UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 9, 2020

 

 

COHEN & COMPANY INC. 

(Exact name of registrant as specified in its charter)

 

 

Maryland   1-32026   16-1685692

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

 

Cira Centre

2929 Arch Street, Suite 1703

Philadelphia, Pennsylvania

  19104
  (Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (215) 701-9555

 

Not Applicable 

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading
Symbol(s) 		  Name of each exchange on which registered
Common Stock, par value $0.01 per share   COHN   The NYSE American Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company                      ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On October 9, 2020 and effective October 15, 2020 (the “Effective Date”), Cohen & Company, LLC (the “Operating LLC”), a Delaware limited liability company and a subsidiary of Cohen & Company Inc., a Maryland corporation (the “Company”), entered into Amendment No. 4 to Investment Agreement (the “Investment Agreement Amendment”), which amended the Investment Agreement, dated September 29, 2017, as amended (the “Investment Agreement”), between the Operating LLC and Cohen Bros. Financial LLC (“Cohen Bros.”), a Delaware limited liability company of which Daniel G. Cohen is the sole member. Daniel G. Cohen is the President and Chief Executive of the Company’s European operations and Chairman of the Company’s Board of Directors and the Operating LLC’s Board of Managers.

 

Pursuant to the Investment Agreement Amendment, the Investment Agreement was amended as of the Effective Date to, among other things, (A) decrease the “Investment Amount” under the Investment Agreement from $6,500,000 to $4,000,000 in exchange for a one-time payment of $2,500,000 from the Operating Company to Cohen Bros.; and (B) provide that the term “Investment Return” (as defined in the Investment Agreement) will mean an annual return equal to, (i) for any twelve-month period following September 29, 2020 (each, an “Annual Period”) in which the revenue of the business of J.V.B. Financial Group, LLC, the Company’s wholly owned subsidiary (“Revenue of the Business”), is greater than zero, the greater of 20% of the Investment Amount or 9.4% of the Revenue of the Business, or (ii) for any Annual Period in which the Revenue of the Business is zero or less than zero, 3.75% of the Investment Amount. Prior to the Investment Agreement Amendment, the term “Investment Return” under the Investment Agreement was defined as (A) with respect to any Annual in which the Revenue of the Business was greater than zero, the greater of 20% of the Investment Amount or 15.2% of the Revenue of the Business, or (ii) for any Annual Period in which the Revenue of the Business was zero or less than zero, 3.75% of the Investment Amount

 

The foregoing description of the Investment Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Investment Agreement Amendment, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
Number

 

Description

     
10.1*   Amendment No. 4 to Investment Agreement, dated October 9, 2020, by and between Cohen & Company, LLC and Cohen Bros. Financial LLC.

 

 

* Filed electronically herewith.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  COHEN & COMPANY INC.
     
Date: October 15, 2020 By:  

/s/ Joseph W. Pooler, Jr.

    Name: Joseph W. Pooler, Jr.
    Title: Executive Vice President, Chief
Financial Officer and Treasurer

 

 

Exhibit 10.1

 

AMENDMENT NO. 4 TO INVESTMENT AGREEMENT

 

THIS AMENDMENT NO. 4 TO INVESTMENT AGREEMENT (this “Amendment”), dated as of October 9, 2020 and effective as of October 15, 2020 (the “Effective Date”), is entered into by and between Cohen & Company, LLC, a Delaware limited liability company (the “Company”), and Cohen Bros. Financial LLC, a Delaware limited liability company (“Investor”). Capitalized terms used herein but otherwise not defined shall have the meanings ascribed to such terms in the Investment Agreement (as defined below).

 

RECITALS:

 

WHEREAS, on September 29, 2017, the Company and Investor entered into the Investment Agreement (as amended, the “Investment Agreement”), pursuant to which, among other things, Investor agreed to invest $8,000,000 into the Company in exchange for the Investment Return Monthly Payments to be made by the Company to Investor pursuant to the terms and conditions of the Investment Agreement;

 

WHEREAS, on September 25, 2019, the Company and Investor entered into Amendment No. 1 to the Investment Agreement (“Amendment No. 1”), to, among other things, (i) decrease the Investment Amount from $8,000,000 to $6,500,000; and (ii) amend the definition of “Investment Return” in each case, subject to the terms and conditions of Amendment No. 1;

 

WHEREAS, on December 4, 2019, the Company and Investor entered into Amendment No. 2 to the Investment Agreement (“Amendment No. 2”), to, among other things, further amend the definition of “Investment Return,” subject to the terms and conditions of Amendment No. 2; and

 

WHEREAS, on September 25, 2020, the Company and Investor entered into Amendment No. 3 to the Investment Agreement (“Amendment No. 3”), to, among other things, (i) provide that no Investor Redemption or Company Redemption may occur prior to January 1, 2021; and (ii) that no Investor Redemption or Company Redemption may be consummated unless the Company’s consummation thereof does not violate the terms and conditions of any loan agreement to which the Company is then a party, subject to the terms and conditions of Amendment No. 3; and

 

WHEREAS, the parties desire to further amend the Investment Agreement to (i) decrease the Investment Amount from $6,500,000 to $4,000,000; and (ii) further amend the definition of “Investment Return,” subject to the terms and conditions of this Amendment.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

1.            Amendment to Background Section of the Investment Agreement. Effective as of the Effective Date of this Amendment, the sole recital in the “BACKGROUND” section of the Investment Agreement is hereby deleted in its entirety and replaced with the following language:

 

 

 

“WHEREAS, Investor has invested $4,000,000 into the Company in exchange for the Investment Return Monthly Payments (as defined below) to be made by the Company to Investor pursuant to the terms and conditions of this Agreement.”

 

2.            Amendment to Section 1(o) of the Investment Agreement. Effective as of the Effective Date of this Amendment, Section 1(o) of the Investment Agreement is hereby deleted in its entirety and replaced with the following language:

 

“(o)        “Investment Return” shall mean an annual return equal to, for any Annual Period following the expiration of the Initial Period, (x) for any Annual Period in which the Revenue of the Business is greater than zero, the greater of 20% of the Investment Amount or 9.4% of the Revenue of the Business, or (y) for any Annual Period in which the Revenue of the Business is zero or less than zero, 3.75% of the Investment Amount.”

 

3.            Amendment to Section 4 of the Investment Agreement. Effective as of the Effective Date of this Amendment, Section 4 of the Investment Agreement is hereby deleted in its entirety and replaced with the following language:

 

“4.          Investment.  For purposes of this Agreement, the term “Investment Amount” shall mean an amount equal to $4,000,000.”

 

4.            One-Time Payment. In consideration of the amendments contemplated by this Amendment, including the decrease of the Investment Amount from $6,500,000 to $4,000,000, on the Effective Date of this Amendment, the Company shall make a one (1)-time payment to Investor equal to $2,500,000 by wire transfer of immediately available funds to such account as Investor shall specify in writing to the Company.

 

5.            No Other Changes. Except as expressly amended by this Amendment, all of the terms and conditions of the Investment Agreement shall continue in full force and effect and shall be unaffected by this Amendment.

 

6.            Amendment. This Amendment may not be amended or modified except by a written agreement executed by the Company and Investor.

 

7.            Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.  THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. THE PARTIES FURTHER AGREE THAT ANY ACTION BETWEEN THEM SHALL BE HEARD IN NEW YORK, NEW YORK, AND EXPRESSLY CONSENT TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS SITTING IN NEW YORK, NEW YORK, FOR THE ADJUDICATION OF ANY CIVIL ACTION ASSERTED PURSUANT TO THIS AMENDMENT.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AMENDMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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8.            Headings. The sections and other headings contained in this Amendment are for reference purposes only and shall not affect the meaning or interpretation of this Amendment.

 

9.            Binding Effect. This Amendment shall be binding upon and inure to the benefit of the Company and the Noteholder and their respective heirs, successors and permitted assigns.

 

10.          Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement.  A signed copy of this Amendment delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Amendment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 4 to Investment Agreement as of the date first written above.

 

COMPANY:

 
  COHEN & COMPANY, LLC
 
  By:   /s/ Joseph W. Pooler, Jr.
  Name: Joseph W. Pooler, Jr.
  Title: Executive Vice President, Chief
Financial Officer and Treasurer

 

INVESTOR: 

 
  COHEN BROS. FINANCIAL LLC
 
  By:   /s/ Daniel G. Cohen
  Name: Daniel G. Cohen
  Title: Managing Member