20.

DEBT

DETAIL OF DEBT

(Dollars in Thousands)

	As of December 31,
Description	2020			2019			Interest Rate Terms	Interest (4)		Maturity
Non-convertible debt:
12.00% senior notes (the "2020 Senior Notes")	$	4,500		$	-		Fixed		12.00%	January 2022
12.00% senior notes (the "2019 Senior Notes")		2,400			6,786		Fixed		12.00%	September 2021 (1)
PPP Loan		2,166			-		Fixed		1.00%	May 2022
Contingent convertible debt:
8.00% convertible senior note (the "2017 Convertible Note")		15,000			15,000		Fixed		8.00%	March 2022 (2)
Less unamortized debt issuance costs		(401	)		(703	)
		14,599			14,297
Junior subordinated notes (3):
Alesco Capital Trust I		28,125			28,125		Variable		4.21%	July 2037
Sunset Financial Statutory Trust I		20,000			20,000		Variable		4.37%	March 2035
Less unamortized discount		(24,690	)		(25,124	)
		23,435			23,001

ByLine Bank		-			-		Variable		N/A	October 2021
FT Financial Bank, N.A. Credit Facility		-			-		Variable		N/A	N/A

LegacyTexas Credit Facility		-			4,777		Variable		N/A	N/A
Total	$	47,100		$	48,861

	( 1 )	On September 25, 2019, the Company amended and restated the previously outstanding 2013 Convertible Notes, which were scheduled to mature on September 25, 2019. The material terms and conditions of the 2013 Convertible Notes remained substantially the same, except that (i) the maturity date changed from September 25, 2019 to September 25, 2020; (ii) the conversion feature in the 2013 Convertible Notes was removed; (iii) the interest rate thereunder changed from 8% per annum ( 9% in the event of certain events of default) to 12% per annum ( 13% in the event of certain events of default); and (iv) the restrictions regarding the prepayment were removed. The post amendment notes are referred to herein as the “2019 Senior Notes” and the pre-amendment notes are referred to herein as the “2013 Convertible Notes.” On September 25, 2020, the 2019 Senior Notes were amended again to extend the maturity date from September 25, 2020 until September 25, 2021.
	( 2 )	The holder of the 2017 Convertible Note may convert all or any part of the outstanding principal amount at any time prior to maturity into units of membership interests of the Operating LLC at a conversion price of $1.45 per unit, subject to customary anti-dilution adjustments. Units of membership interests of the Operating LLC not held by Cohen & Company Inc. may, with certain restrictions, be redeemed and exchanged into shares of the Cohen & Company Inc. common stock, par value $0.01 per share (“Common Stock”) on a ten -for- one basis. Therefore, the 2017 Convertible Note can be converted into Operating LLC units of membership interests and then redeemed and exchanged into Common Stock at an effective conversion price of $14.50. See note 21.
	( 3 )	The junior subordinated notes listed represent debt the Company owes to the two trusts noted above. The total par amount owed by the Company to the trusts is $49,614. However, the Company owns the common stock of the trusts in a total par amount of $1,489. The Company pays interest (and at maturity, principal) to the trusts on the entire $49,614 junior notes outstanding. However, the Company receives back from the trusts the pro rata share of interest and principal on the common stock held by the Company. These trusts are VIEs and the Company does not consolidate them even though the Company holds the common stock. The Company carries the common stock on its balance sheet at a value of $0. The junior subordinated notes are recorded at a discount to par. When factoring in the discount, the yield to maturity of the junior subordinated notes as of December 31, 2020 on a combined basis was 11.58% assuming the variable rate in effect on the last day of the reporting period remains in effect until maturity.
	( 4 )	Represents the interest rate in effect as of the last day of the reporting period.

The

2020

Senior Notes

January 31, 2020,

the Operating LLC entered into a note purchase agreement with JKD Capital Partners I LTD, a New York corporation (“JKD Investor”), and RN Capital Solutions LLC, a Delaware limited liability company (“RNCS”). The JKD Investor is owned by Jack DiMaio, the vice chairman of the Company's board of directors and the Operating LLC's board of managers, and his spouse.

Pursuant to the note purchase agreement, JKD Investor and RNCS each purchased a senior promissory note in the principal amount of

$2,250

(for an aggregate investment of

$4,500

). The senior promissory notes bear interest at a fixed rate of

12%

per annum and mature on

January 31, 2022.

February 3, 2020,

pursuant to the note purchase agreement, the Operating LLC used the proceeds received from the issuance of the senior promissory notes to the JKD Investor and RNCS to repay in full all amounts outstanding under the senior promissory note, dated

September 25, 2019,

issued by the Company to Pensco Trust Company, Custodian fbo Edward E. Cohen IRA in the principal amount of

$4,386

(the “Cohen IRA Note”). The Cohen IRA Note was included as a portion of the

2019

Senior Notes outstanding as of

December 31, 2019.

The Cohen IRA Note was fully paid and extinguished on

February 3, 2020.

Subsequent to this repayment,

$2,400

of the

2019

Senior Notes remain outstanding.

The

2019

Senior Notes

September 25, 2019,

the Company amended and restated the previously outstanding

2013

Convertible Notes, which were scheduled to mature on

September 25, 2019.

The material terms and conditions of the

2013

Convertible Notes remained substantially the same, except that (i) the maturity date thereof was changed from

September

25,

2019

September

25,

2020;

(ii) the conversion feature in the

2013

Convertible Notes was removed; (iii) the interest rate thereunder was changed from

per annum (

in the event of certain events of default) to

12%

per annum (

13%

in the event of certain events of default); and (iv) the restrictions regarding prepayment were removed. The post amendment notes are referred to herein as the

“2019

Senior Notes” and the pre-amendment notes are referred to herein as the

“2013

Convertible Notes.” On

September

25,2020,

the

2019

Senior Notes were amended again to extend the maturity date from

September 25, 2020

until

September 25, 2021.

All other material terms and conditions of the

2019

Convertible Notes remained substantially the same.

The Amendment to the

2017

Convertible Note

In connection with the amendment to the

2019

Senior Notes, on

September 25, 2020,

the Operating LLC and DGC Trust entered into Amendment

No.

( the "Amendment to the

2017

Convertible

Note") to the

2017

Convertible Note to provide that the voting proxy as defined in the

2017

Convertible Note will be revoked without further action by any party, upon the earliest to occur of the following: (i) a Notice Default (as defined in the

2017

Convertible Note); (ii) and Automatic Default (as defined in the

2017

Convertible Note); and (iii) if Daniel Cohen and/or his affiliates cease to beneficially own (as defined in Rule

13d

under the Exchange Act) a majority of the voting securities of the Company pursuant to the terms and conditions of the Amendment to the

2017

Convertible Note. All other material terms and conditions of the

2017

Note remained substantially the same.

The

2013

Convertible Notes

In connection with the investments by Mead Park Capital and EBC, as assignee of CBF, in

September 2013,

the Company issued

$8,248

in aggregate principal amount of convertible senior promissory notes (the

"2013

Convertible Notes"). The

2013

Convertible Notes accrued

interest per year, payable quarterly. As required under ASC

470,

the Company accounted for the

2013

Convertible Notes as conventional convertible debt and did

not

allocate any amount of the proceeds to the embedded equity option.

The original maturity date of the

2013

Convertible Notes was

September 25, 2018.

Immediately prior to maturity, the

2013

Convertible Notes were held by

three

holders. On

September 25, 2018,

the Company paid

one

holder in full in the amount of

$1,461.

The Company entered into amendments with the remaining

two

holders: Pensco Trust Company, Custodian fbo Edward E. Cohen and EBC.

Pursuant to the amendments to the

2013

Convertible Notes, (i) the maturity date of each of the outstanding

2013

Convertible Notes was extended from

September 25, 2018

September 25, 2019

and (ii) the conversion price under each of the outstanding

2013

Convertible Notes was reduced from

$30.00

per share of Common Stock to

$12.00

per share of Common Stock.

The amendments to the

2013

Convertible Notes provided that, until the Company's stockholders approved the issuance of the shares of Common Stock issuable upon conversion of the

2013

Convertible Notes for purposes of Section

713

of the NYSE American's Company Guide, the

2013

Convertible Notes

may

not

be converted if such conversion would result in the Company issuing a number of shares of Common Stock that, when aggregated with any shares of Common Stock previously issued in connection with any conversion under the

2013

Convertible Notes, equals or exceeds, in the aggregate,

19.99%

of the outstanding Common Stock as of

September 25, 2018.

In addition, the amendments to the

2013

Convertible Notes provided that (i) the Company cause its stockholders to vote on a proposal (the “Stockholder Proposal”) regarding the issuance of the shares of Common Stock issuable upon conversion of the

2013

Convertible Notes for purposes of Section

713

of the NYSE American's Company Guide at the

2019

annual meeting of the Company's stockholders, (ii) the Company use its reasonable best efforts to solicit proxies for such stockholder approval, and (iii) the Company's board of directors recommend to the Company's stockholders that such stockholders approve the Stockholder Proposal. At the Company's

2019

annual meeting of stockholders held on

June 12, 2019,

the Company's stockholders approved the Company's potential issuances of up to

379,785

shares of Common Stock pursuant to the

2013

Convertible Note held by Pensco Trust Company, Custodian fbo Edward E. Cohen and up to

207,834

shares of Common Stock pursuant to the

2013

Convertible Note held by EBC, in each case, in accordance with Section

713

(a) of the NYSE American Company Guide.

September 25, 2019,

the

2019

Senior Notes amended and restated the

2013

Convertible Notes as discussed above.

PPP Loan

May 1, 2020,

the Company qualified for and received a PPP loan pursuant to the PPP under the CARES Act and administered by the U.S. Small Business Association ("SBA"). The PPP loan is evidenced by a promissory note between the Company and FT Financial. The PPP loan bears interest at a fixed rate of

1.0%

per year, with the

first

six

months of interest deferred, has a term of

two

years and

may

be prepaid at any time without payment of any premium. The PPP loan is unsecured but guaranteed by the SBA.

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of the PPP loan, with such forgiveness to be determined, subject to limitations, based on the use of the PPP loan proceeds for payment of payroll costs and payments of mortgage interest, rent, and utilities. The terms of any forgiveness

may

also be subject to further requirements in any regulations and guidelines the SBA

may

adopt.

In order to obtain forgiveness of the PPP loan, the Company must submit a request and provide satisfactory documentation regarding its compliance with applicable requirements. While the Company currently believes that its use of the PPP loan proceeds will meet the conditions for forgiveness under the PPP,

assurance is provided that the Company will obtain forgiveness of the PPP loan in whole or in part. The Company must repay any unforgiven principal amount of the PPP loan, with interest, on a monthly basis following the deferral period. On

September 23, 2020,

the Company applied for forgiveness of the PPP loan. As of the date of this report, the Company had

not

heard back regarding the forgiveness of the PPP loan.

The PPP loan contains customary events of default relating to, among other things, payment defaults and breaches of representations, warranties, or covenants. The occurrence of an event of default

may

result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company.

LegacyTexas Bank

November 20, 2018,

ViaNova, as borrower, entered into a Warehousing Credit and Security Agreement (the “LegacyTexas Credit Facility”) with LegacyTexas Bank, as the lender, with an effective date of

November 16, 2018,

and amended on

May 4, 2019

and

September 25, 2019.

The LegacyTexas Credit Facility supported the purchasing, aggregating, and distribution of residential transition loans by ViaNova.

Pursuant to the terms of the LegacyTexas Credit Facility, LegacyTexas Bank agreed to make loans at ViaNova's request from time to time in the aggregate amount of up to

$12,500.

The loans (both principal and interest) were scheduled to mature and become immediately due and payable in full on

November 15, 2019.

However, on

October 28, 2019,

the maturity date was extended to

April 15, 2020.

Loans under the LegacyTexas Credit Facility bore interest at a per annum rate equal to LIBOR (with a floor of

1.50%

) plus

4.0%

(for residential transition loans) or

5.0%

(for aged residential transition loans). Commencing

February 14, 2019,

ViaNova became required to pay an undrawn commitment fee at a per annum rate equal to

0.25%

of the undrawn portion of the

$12,500

commitment under the LegacyTexas Credit Facility; provided, however, that such fee would be waived for any calendar month (i) in which the used portion for such month is equal to or greater than

fifty

percent (

50%

) of the

$12,500

commitment amount, or (ii) the aggregate advances funded by LegacyTexas Bank for such calendar month are equal to or greater than the

$12,500

commitment amount, as

may

be in effect from time to time.

Loans under the LegacyTexas Credit Facility were required to be used by ViaNova to provide funding for short-term mortgages to developers for the purchase and renovation of residential

family properties or to purchase such short-term mortgages from correspondents that originate such short-term mortgages.

The obligations of ViaNova under the LegacyTexas Credit Facility were secured by a lien on the mortgages financed by the LegacyTexas Credit Facility. Further, pursuant to the terms of the LegacyTexas Credit Facility, ViaNova deposited cash in an amount equal to

of the

$12,500

commitment amount in a non-interest-bearing account with LegacyTexas Bank as additional collateral.

The Company was subject to certain financial covenants in the LegacyTexas Credit Facility. As of

December 31, 2019,

the Company was in compliance with all of these financial covenants. On

March 19, 2020,

ViaNova received a notice of default from LegacyTexas Bank regarding the LegacyTexas Credit Facility, stating that ViaNova's unrestricted cash balance was less than the amount required. Also, on

March 19, 2020,

ViaNova received notice from LegacyTexas Bank that the Bank had suspended funding all “alternative” loans for all of their clients, including the RTLs that are the subject of the LegacyTexas Credit Facility with LegacyTexas Bank. Since

March 19, 2020

ViaNova has repaid all outstanding indebtedness under the LegacyTexas Credit Facility. See note

FT Bank Credit Facility

Effective on

April 25, 2018,

the Company, the Operating LLC, and JVB Holdings, as guarantors, and JVB, as borrower, entered into a loan agreement (the

“2018

FT LOC”) with FT Financial as lender. FT Financial was formerly known as MB Financial Bank, N.A.

Pursuant to the terms of the

2018

FT LOC, FT Financial agreed to make loans (each a “Loan” and collectively, the “Loans”) at JVB's request from time to time in the aggregate amount of up to

$25,000.

The Loans (both principal and interest) were scheduled to mature and become immediately due and payable in full on

April 10, 2020.

In accordance with the terms of the

2018

FT LOC, JVB paid to FT Financial a commitment fee in the amount of

$250.

Loans under the

2018

FT LOC bore interest at a per annum rate equal to LIBOR plus

6.0%.

The Operating LLC was required to pay an undrawn commitment fee at a per annum rate equal to

0.50%

of the undrawn portion of the FT Financial' s

$25,000

commitment under the

2018

FT LOC. Pursuant to the

2018

FT LOC, all Loans must be used by JVB for working capital purposes and general liquidity of JVB. Further, under the

2018

FT LOC, JVB

may

request a reduction of the

$25,000

commitment amount in a minimum amount of

$1,000

and multiples of

$500

thereafter, upon

not

less than

five

days prior notice to FT Financial.

January 29, 2019,

the

2018

FT LOC was restructured. The total commitment of the

2018

FT LOC was reduced from

$25,000

$7,500

and the maturity date was extended from

April 10, 2020

April 10, 2021.

The other material terms and conditions remained substantially identical.

As part of the restructuring, the Company entered into a new subordinated revolving note agreement (the

“2019

FT Revolver”). Under the

2019

FT Revolver, the Company could borrow up to

$17,500

on a revolving basis in minimum amounts of

$1,000

or any higher multiple of

$500.

The

2019

FT Revolver bore interest at a per annum rate equal to LIBOR plus

and the Company was required to pay an undrawn commitment fee at a per annum rate equal to

0.50%

per annum on any undrawn amounts. In addition, the Company paid a commitment fee equal to

0.75%

(or

$131

) on

April 10, 2020.

The maturity date for the

2019

FT Revolver was

April 10, 2021.

January 30, 2019,

JVB received approval from FINRA to treat draws under the

2019

FT Revolver as qualified subordinated debt. As such, draws under the

2019

FT Revolver are treated as an increase in net capital for purposes of FINRA Rule

(c)

Furthermore, JVB is subject to financial covenants including a minimum excess net capital covenant, a debt to tangible net worth covenant, and a minimum tangible net worth covenant. The Company was in compliance with all covenants as of all periods presented.

The

2019

FT Revolver did

not

allow for additional draws after

April 20, 2020.

During

March 2020,

the Company drew the full amount of

$17,500

under the

2019

FT Revolver. On

October 27, 2020,

the Company cancelled both revolving lines of credit and fully repaid the

$17,500

outstanding balance plus accrued interest.

Byline Bank

October 28, 2020 (

the “Effective Date”), the Company entered into a Loan Agreement (the “Loan Agreement”) with Byline Bank, as lender (the “Lender”), by and among the Lender, the Company, as a guarantor, and the Company's subsidiaries, the Operating LLC and J.V.B. Financial Group Holdings, LP (“Holdings LP”), as guarantors, and JVB as borrower (the “Borrower”), and C&Co PrinceRidge Holdings, LP (“C&Co.”), pursuant to which the Lender agreed to make loans at the Borrower's request from time to time in the aggregate amount of up to

$7.5

million.

In addition, on the Effective Date, the Borrower and the Lender entered into a Revolving Note and Cash Subordination Agreement (the “Revolving Note and Cash Subordination Agreement,” and, together with the Loan Agreement, the “Byline Credit Facility”), pursuant to which, among other things, the Lender agreed to make loans at the Borrower's request from time to time in the aggregate amount of up to

$17.5

million. The Byline Credit Facility replaced the previous outstanding facility with FT Bank, the

2019

FT Revolver discussed above.

Loans (both principal and interest) made by the Lender to the Borrower under the Loan Agreement and Revolving Note and Cash Subordination Agreement are scheduled to mature and become immediately due and payable in full on

October 28, 2022.

In addition, loans

may

be made under the Loan Agreement and the Revolving Note and Cash Subordination Agreement until

October 28, 2022

and

October 28, 2021,

respectively.

Loans under the Byline Credit Facility bear interest at a per annum rate equal to LIBOR plus

6.0%,

provided

that in

event can the interest rate be less than

7.0%.

The Borrower is required to pay on a quarterly basis an undrawn commitment fee at a per annum rate equal to

0.50%

of the undrawn portion of the Lender's

$25

million commitment under the Byline Credit Facility. The Borrower is also required to pay on each anniversary of the Effective Date a commitment fee at a per annum rate equal to

0.50%

of the Lender's

$25

million commitment under the Byline Credit Facility. Pursuant to the terms of the Byline Credit Facility, the Borrower paid to the Lender a commitment fee of

$250

on the Effective Date. Loans under the Byline Credit Facility must be used by the Borrower for working capital purposes and general liquidity of the Borrower. The Borrower

may

request a reduction in the Lender's

$25,000

commitment in a minimum amount of

million and multiples of

$500

thereafter upon

not

less than

five

days' prior notice to the Lender. The obligations of the Borrower under the Byline Credit Facility are guaranteed by the Company, the Operating LLC and Holdings LP (collectively, the “Guarantors”), and are secured by a lien on all of Holdings LP's property, including its

100%

ownership interest in all of the outstanding membership interests of the Borrower. Pursuant to the Byline Credit Facility, the Borrower and the Guarantors provide customary representations and warranties for a transaction of this type.

The Byline Credit Facility also includes customary covenants for a transaction of this type, including covenants limiting the indebtedness that can be incurred by the Borrower and Holdings LP and restricting the Borrower's ability to make certain loans and investments. Additionally, the Borrower

may

not

permit (i) the Borrower's tangible net worth to be less than

$80,000

at any time from

October 29, 2020

through

December 31, 2021,

and

$85,000

at any time thereafter; and (ii) the Borrower's excess net capital to be less than

$40,000

at any time. The Borrower and each Guarantor are also limited in their ability to repay certain of their existing outstanding indebtedness. As of

December 31, 2020,

the Company was in compliance with all of the financial covenants.

The Byline Credit Facility contains customary events of default for a transaction of this type. If an event of default under the Byline Credit Facility occurs and is continuing, then the Lender

may

declare and cause all or any part of the Loans and all other liabilities outstanding under the Byline Credit Facility to become immediately due and payable.

The foregoing description of the Byline Credit Facility does

not

purport to be complete and is qualified in its entirety by reference to the full text of the Loan Agreement and the Revolving Note and Cash Subordination Agreement, copies of which are attached hereto as Exhibit

10.1

and Exhibit

10.2,

respectively, and are incorporated herein by reference. As of

December 31, 2020,

the Company had

not

drawn on the Byline Credit Facility.

Deferred Financing

The Company incurred

$1,400

of deferred financing costs associated with the issuance of the

2017

Convertible Note and

$670

of deferred financing costs associated with the issuance of the

2013

Convertible Notes. These amounts were initially recorded as a discount on debt and are amortized to interest expense over the life of the notes under the effective interest method.

The Company also incurred

$272

of deferred financing costs associated with the Byline Credit Facility and

$525

of deferred financing costs associated with the

2018

FT LOC. These amounts were initially recorded as a component of other assets and are amortized to interest expense over the life of the line of credit using the straight-line method. The Company recognized interest expense from deferred financing costs of

$626,

$509,

and

$552

for the years ended

December 31, 2020

2019

, and

2018

, respectively.

Interest Expense, Net

Interest expense incurred is shown in the table below by instrument for the years ended

2020

2019

, and

2018

INTEREST EXPENSE

(Dollars in Thousands)

	Year Ended December 31,
	2020			2019			2018
Junior subordinated notes	$	2,882		$	3,457		$	3,499
2020 Senior Notes		496			-
2017 Convertible Note		1,505			1,472			1,445
2013 Convertible Notes / 2019 Senior Notes		336			615			752
2018 FT LOC / 2019 FT Revolver/Byline Credit Facility		1,102			365			270
Redeemable Financial Instrument - DGC Trust / CBF		1,490			1,166			587
Redeemable Financial Instrument - JKD Investor		1,883			699			1,968
Redeemable Financial Instrument - ViaNova Capital Group, LLC		(105	)		(190	)		(34	)
	$	9,589		$	7,584		$	8,487

The redeemable financial instrument – Via Nova Capital Group, LLC had a negative return during the periods presented. Accordingly, the redemption value of the instrument is reduced, which is recorded as interest income. See note

19.