Cohen & Co Inc.
For the period ended Dec 31, 2024. Filed Mar 12, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 12, 2025
COHN$10.19+1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-06.
0001437749-24-006827
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-12.
0001437749-25-007158
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 380 previous paragraphs and 344 current paragraphs.
241 unchanged; 53 reworded; 43 added; 82 removed; 4 previous and 7 current paragraphs rearranged.
Tables are not compared: 50 previous and 49 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (43)
Current report
Redemption of Redeemable Financial Instrument and Issuance of the 2024 Note
Current report
Effective September 1, 2024, we entered into the Redemption Agreement, which terminated the JKD Investment Agreement in its entirety. As of September 1, 2024, the investment balance under the JKD Investment Agreement was $7,719. Pursuant to the Redemption Agreement, we (i) paid $2,573 of the investment balance in cash, and (ii) issued a senior promissory note (the “2024 Note”) in the aggregate principal amount of $5,146, representing the remaining balance payable under the JKD Investment Agreement. The 2024 Note bears interest at 12% and its principal is to be repaid as follows: (i) $2,573 of the principal amount will be due and payable on August 31, 2025, and (ii) $2,573 will be due and payable on August 31, 2026. The 2024 Note may not be prepaid in whole or in part prior to January 31, 2025. The 2024 Note may, with at least 31 days’ prior written notice to the holder of the 2024 Note, be prepaid in whole or in part at any time following January 31, 2025, without penalty or premium. See notes 4 and 19 to our consolidated financial statements included in this Annual Report on Form 10-K for additional information relating to the Redemption Agreement and 2024 Note.
Current report
Sale of Membership Interests in Vellar GP
Current report
On February 25, 2025, the Operating LLC entered into (i) a Limited Liability Company Interest Purchase Agreement with Jason Capone and Solomon Cohen, who is the son of our Executive Chairman, Daniel G. Cohen (the “Vellar Purchase Agreement”); and (ii) a Transition Services Agreement (the “Vellar Transition Services Agreement” and, together with the Vellar Purchase Agreement, the “Vellar Agreements”) with Vellar GP.
Current report
Prior to entering into the Vellar Agreements, the Operating LLC was the managing member and owner of 33.4% of Vellar GP.
Current report
Pursuant to the Vellar Purchase Agreement, the Operating LLC sold all of its 33.4% interest in Vellar GP for an aggregate of $10. As of February 25, 2025 and as a result of the consummation of the transactions contemplated by the Vellar Purchase Agreement, the Company no longer had any investment in Vellar GP. Pursuant to the Vellar Purchase Agreement, the Operating LLC resigned as the managing member of Vellar GP, effective February 25, 2025. In the first quarter of 2025, we expect to record a net loss of $404 related to Vellar GP which includes both the loss on sale and results of operations for the 2025 period prior to the sale.
Current report
Pursuant to the Vellar Transition Services Agreement, in exchange for The Operating LLC’s agreement to provide certain transitional services to Vellar GP, Vellar GP agreed to pay to The Operating LLC certain defined net revenue share amounts up to an aggregate of $4,234; and (ii) agreed to decrease the amount which The Operating LLC had previously agreed to pay to Vellar GP in connection with the funding of certain Vellar GP litigation expenses from $2,121 to $1,084.
Current report
Asset management fees increased by $1,672, or 23%, to $9,009 for the year ended December 31, 2024, as compared to $7,337 for the year ended December 31, 2023, as discussed in more detail below.
Current report
Asset management fees from CDOs remained relatively unchanged. Asset management fees from other increased primarily due to the recognition in 2024 of deferred performance fees related to certain PriDe Funds and the portfolio servicing fee on the notional amount of loans owned by the CREO JV.
Current report
All asset management revenue is included in our asset management segment. See note 29 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current report
New issue and advisory revenue increased by $35,158, or 124%, to $63,422 for the year ended December 31, 2024, as compared to $28,264 for the year ended December 31, 2023.
Current report
In some cases, CCM will receive financial instruments in lieu of cash for its advisory transactions. In these cases, we record advisory revenue equal to the fair value of the instruments received. Subsequent to receipt, the instruments are carried at fair value as a component of other investments, at fair value in our consolidated balance sheets. Any change in the fair value of these instruments subsequent to recording the new issue revenue will be recorded as principal transactions gain or loss in our consolidated statement of operations. Further, the financial instruments we receive in these cases are often either (i) common stock investments that are restricted for resale for some period of time; (ii) convertible or non-convertible notes receivable that are not publicly traded; (iii) equity investments in special purpose entities that are not publicly traded; or (iv) unrestricted common stock investments in public companies with low trading volumes. As a result, it may take us a significant period of time to liquidate these financial instruments. We may suffer significant principal transactions loss prior to final liquidation of these financial instruments. SeePrincipal Transactions and Other Income below.
Current report
In the table above, our principal transactions are broken out into two groups:
Current report
Capital Markets Principal Transactions: In some cases, CCM acquires financial instruments or receives financial instruments in lieu of cash for its advisory transactions. We carry these instruments at fair value with changes in fair value included as a component of principal transactions and other income in our consolidated income statement. Gains and losses on these instruments are included in our Capital Markets segment as these instruments were acquired as part of CCM's activities. See note 29 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current report
Principal Investing Principal Transactions: In other cases, we will acquire a financial instrument for the purposes of earning an investment return. We also carry these instruments at fair value with changes in fair value included as a component of principal transactions and other income in our consolidated income statement. However, gains and losses on these instruments are included in our Principal Investing segment as these investments were acquired to earn a return. Note that a particular instrument may be included in both categories if it was acquired as part of CCM's activities and separately acquired to earn an investment return.
Current report
Interests in Public Companies
Current report
These investments represent our direct and indirect investments in certain public companies. These investments may be in the form of unrestricted common stock, restricted common stock, equity derivatives, convertible notes and non-convertible notes receivable, as well as equity interest in SPVs that have investments in these public companies. The name and stock symbol of each public company in which we have a direct or indirect investment is listed in the table above. The amounts shown represent the change in the fair value of our investment during each time period noted in the table. Many of the interests in the public companies listed above were acquired as non-cash compensation related to new issue and advisory engagements. When we received these investments, we recorded new issue and advisory revenue for the fair value of those instruments at that time.
Current report
Other Principal Investments
Current report
The CREO JV invests in primarily multi-family commercial real estate mortgage-backed loans. We carry our investment in the CREO JV at its reported NAV.
Current report
The bridge loan exit fee was earned on a bridge loan made to an early stage growth company.
Current report
Compensation and benefits increased by $4,296, or 8%, to $56,388 for the year ended December 31, 2024, as compared to $52,092 for the year ended December 31, 2023.
Current report
Equity-based compensation increased due to a higher number of restricted shares granted in 2024 as compared to 2023.
Current report
Business development, occupancy, and equipment increased by $1,413, or 27%, to $6,617 for the year ended December 31, 2024, as compared to $5,204 for the year ended December 31, 2023. This increase was comprised of an increase in business development of $867 and an increase in other occupancy of $546.
Current report
Professional fee and other operating expenses increased by $5,125, or 55%, to $14,421 for the year ended December 31, 2024, as compared to $9,296 for the year ended December 31, 2023. The increase was comprised of an increase in professional fees of $1,913 and an increase in other operating expenses of $3,212. A large portion of the increase in other operating expense was the result of bad debt expense of $2,556 recorded during 2024 related to CCM accounts receivable.
Current report
Depreciation and amortization decreased by $7, or 1%, to $556 for the year ended December 31, 2024, as compared to $563 for the year ended December 31, 2023.
Current report
Income tax expense / (benefit) was ($329) for the year ended December 31, 2024, as compared to $5,545 for the year ended December 31, 2023. See note 23 to our consolidated financial statements included in our Annual Report on Form 10-K.
Current report
All asset management revenue is included in our asset management segment. See note 29 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current report
In some cases, CCM will receive financial instruments in lieu of cash for its advisory transactions. In these cases, we record advisory revenue equal to the fair value of the instruments received. Subsequent to receipt, the instruments are carried at fair value as a component of other investments, at fair value in our consolidated balance sheets. Any change in the fair value of these instruments subsequent to recording the new issue revenue will be recorded as principal transactions gain or loss in our consolidated statement of operations. Further, the financial instruments we receive in these cases are often either (i) common stock investments that are restricted for resale for some period of time; (ii) convertible or non-convertible debt investments that are not publicly traded; (iii) equity investments in special purpose entities that are not publicly traded; or (iv) unrestricted common stock investments in public companies with low trading volumes. As a result of the above, it may take us a significant period of time to liquidate these financial instruments. We may suffer significant principal transactions loss prior to final liquidation of these financial instruments. SeePrincipal Transactions and Other Income below.
Current report
In the table above, our principal transactions revenue is broken out into two groups:
Current report
Capital Markets Principal Transactions: In some cases, CCM acquires financial instruments or receives financial instruments in lieu of cash for its advisory transactions. We carry these instruments at fair value with changes in fair value included as a component of principal transactions and other income in our consolidated income statement. Gains and losses on these instruments are included in our Capital Markets segment as these instruments were acquired as a result of CCM's activities. See note 29 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current report
Principal Investing Principal Transactions: In other cases, we will acquire a financial instrument for the purposes of earning an investment return. We also carry these instruments at fair value with changes in fair value included as a component of principal transactions and other income in our consolidated income statement. However, gains and losses on these instruments are included in our Principal Investing segment as these investments were acquired to earn a return. Note that a particular instrument may be included in both categories if it was acquired as a result of CCM's activities and separately acquired to earn an investment return.
Current report
Interests in Public Companies
Current report
These investments represent our direct and indirect investments in certain public companies. These investments may be in the form of unrestricted common stock, restricted common stock, equity derivatives, convertible notes, non-convertible notes, fair value receivables, as well as equity interest in SPVs that have investments in these public companies. The name and stock symbol of each public company in which we have a direct or indirect investment is listed in the table above. The amounts shown represent the change in the fair value of our investment in each time period noted in the table. Many of the interests in the public companies listed above were acquired as non-cash compensation related to new issue and advisory engagements. When we received these investments, we recorded new issue and advisory revenue for the fair value of those instruments at that time.
Current report
Other Principal Investments
Current report
The CREO JV invests in primarily multi-family commercial real estate mortgage-backed loans. We carry our investment in the CREO JV at its reported NAV.
Current report
The bridge loan exit fee was earned on a bridge loan made to an early stage growth company.
Current report
The cash provided from operating activities of $9,475 was comprised of (a) net cash inflow of $1,527 related to working capital fluctuations; (b) net cash inflow of $8,310 from trading activities comprised of our investments-trading, trading securities sold, not yet purchased, securities sold under agreement to repurchase, receivables under resale agreements, and receivables and payables from brokers, dealers, and clearing agencies, as well as the changes in unrealized gains and losses on the investments-trading and trading securities sold, not yet purchased; and (c) net cash outflow from other earnings items of $362 (which represents net income or loss adjusted for the following non-cash operating items: deferred taxes, other income / (expense), non-cash advisory revenue, realized and unrealized gains and losses on other investments, at fair value, other investments sold, not yet purchased, income / (loss) from equity method affiliates, equity-based compensation, depreciation, and amortization).
Current report
The cash provided from investing activities of $16,506 was comprised of (a) $78,834 in proceeds from sales of other investments, at fair value; (b) $214 in proceeds from sales from other investments sold, not yet purchased; and (c) $1,026 in distributions received from equity method affiliates; partially offset by (d) $60,675 of purchases of other investments, at fair value; (e) $1,408 of purchases of other investments sold, not yet purchased; (f) $236 used to invest in equity method affiliates, and (g) $1,249 of purchases of furniture, equipment, and leasehold improvements.
Current report
The cash used in financing activities of $16,717 was comprised of (a) $2,573 used to repay our redeemable financial instrument; (b) $189 used to net settle equity awards; (c) $1,873 paid in dividends on Common Stock; (d) $4,819 paid in distributions to the convertible non-controlling interest; (e) $659 of redemptions of convertible non-controlling interest; and (f) $6,758 paid in distributions to the non-convertible non-controlling interest; partially offset by (g) $154 in proceeds from the issuance of Common Stock.
Current report
In March 2024, the FASB issued ASU 2024-01,Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The ASU provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for as share-based payment arrangements in accordance with FASB Accounting Standards Codification (FASB ASC) 718,Compensation-Stock Compensation. The ASU is effective for public business entities for annual periods beginning after December 15, 2024 and interim periods with those annual periods. We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements.
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Removed paragraphs (82)
Previous report
Consolidation of the SPAC Fund
Previous report
Prior to March 31, 2023, the Vellar GP had an investment in the SPAC Fund, the potential to earn incentive fees, and did not consolidate the SPAC Fund. Effective April 1, 2023, all of the investors in the SPAC Fund, other than the Vellar GP, redeemed all of their interests in the SPAC Fund. As a result, effective April 1, 2023, the Vellar GP became the sole owner of the SPAC Fund and began consolidating it. We own an interest in and consolidates the Vellar GP. Effective April 1, 2023, we began consolidating the SPAC Fund as well. We recorded the following entry upon consolidation:
Previous report
As of December 31, 2023, all amounts due to the redeeming investors in the SPAC Fund were paid in full.
Previous report
The 2020 Senior Notes
Previous report
On January 31, 2020, the Operating LLC entered into a note purchase agreement (the “Original 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, Jr., the vice chairman of our board of directors, and his spouse. The note purchased by the JKD Investor is herein referred to as the “JKD Note.”
Previous report
Pursuant to the Original 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 bore interest at a fixed rate of 12% per annum and matured on January 31, 2022. On January 31, 2022, the Operating LLC and JKD Investor entered into a note purchase agreement (the "2022 Purchase Agreement"), pursuant to which, among other things, on such date, (i) JKD Investor paid to the Operating LLC an additional $2,250 and (ii) in consideration for such funds, the Operating LLC issued to JKD Investor an amended and restated senior promissory note in the aggregate principal amount of $4,500 (the “Amended and Restated Note”), which Amended and Restated Note amended and restated the JKD Note in its entirety. The 2022 Purchase Agreement contains customary representations and warranties on the part of each of JKD Investor and the Operating LLC. We used these proceeds to retire the $2,250 of 2020 Senior Notes held by RNCS. See note 20 and 31.
Previous report
On January 5, 2024, the Operating LLC and JKD Investor entered into an amendment to the Amended and Restated Note, pursuant to which the Amended and Restated Note was amended to (a) extend (i) the maturity date thereof from January 31, 2024 to January 31, 2026, (ii) the date following which the Amended and Restated Note may be redeemed by JKD Investor from January 31, 2023 to January 31, 2025, and (iii) the date following which the Amended and Restated Note may be prepaid by the Operating LLC from January 31, 2023 to January 31, 2025; and (b) increase the interest rate payable under the Amended and Restated Note from 10% per annum to 12% per annum effective as of January 31, 2024.
Previous report
The Company recorded a gross loss of $1,752 and $5,454 in connection with the FGMC reverse repo for the years ended December 31, 2023 and 2022, respectively. Of the $1,752 loss in 2023, $1,748 was recorded as a reduction in net trading revenue and $4 was recorded in professional fees and other operating expense. Of the $5,454 loss in 2022, $5,244 was recorded as a reduction in net trading revenue and $210 was recorded in professional fees and other operating expense. Of the $1,748 recorded in net trading revenue in 2023, $1,500 is included in the mortgage group and $248 is included in the matched book repo group in the table above. Of the $5,244 recorded in net trading revenue in 2022, $4,330 is included in the mortgage group and $914 is included in the matched book repo group in the table above. See note 11 to our consolidated financial statements included in Item 1 of this Annual Report on Form 10-K.
Previous report
In some cases, CCM will receive financial instruments in lieu of cash for its advisory transactions. In these cases, we record advisory revenue equal to the fair value of the instruments received. Subsequent to receipt, the instruments are carried at fair value as a component of other investments, at fair value in our consolidated balance sheets. Any future income or loss related to these instruments will be recorded as principal transactions gain or loss in the consolidated statement of operations.
Previous report
For all investments discussed below, see note 9 to our consolidated financial statements included in this Annual Report on Form 10-K for information about how we determine the value of these instruments. For several of the investments described below, we also had an investment in the same company that was accounted for under the equity method during the periods presented. See discussion of equity method income / (loss) below.
Previous report
SFT was a publicly traded company. As of December 31, 2023, the total carrying value of our investment in SFT was $13.
Previous report
LMND represents equity positions of Lemonade, Inc. (NYSE: LMND), a publicly traded company that acquired Metromile, Inc. As of December 31, 2023, the total carrying value of our investment in LMND was $0.
Previous report
REE represents equity positions of REE Automotive Ltd. (NASDAQ: REE), a publicly traded company that closed a business combination with 10X Capital Venture Acquisition Corp. As of December 31, 2023, we had a total investment in REE carried at fair value of $130, which was included as a component of other investments, at fair value.
Previous report
RBT represents equity positions of Rubicon Technologies, Inc. (NYSE: RBT), a publicly traded company that closed a business combination with Founder SPAC. As of December 31, 2023, we had a total investment in RBT carried at fair value of $0, which was included as a component of other investments, at fair value.
Previous report
HLGN represents equity positions of Heliogen, Inc. (NYSE: HLGN), a publicly traded company that closed a business combination with Athena Technology Acquisition Corp. As of December 31, 2023, we had a total investment in HLGN carried at fair value of $29, which was included as a component of other investments, at fair value.
Previous report
PAYO represents equity positions of Payoneer Global, Inc. (NASDAQ: PAYO), a publicly traded company that closed a business combination with FTAC Olympus Acquisition Corp. As of December 31, 2023, we had a total investment in PAYO carried at fair value of $1,443, which was included as a component of other investments, at fair value.
Previous report
PWP represents equity positions of Perella Weinberg Partners (NASDAQ: PWP), a publicly traded company that closed a business combination with FTAC IV Acquisition Corp. As of December 31, 2023, we had a total investment in PWP carried at fair value of $317, which was included as a component of other investments, at fair value.
Previous report
FOXO represents equity positions of FOXO Technologies Inc. (NASDAQ: FOXO), a publicly traded company that closed a business combination with Delwinds Insurance Acquisition Corp. As of December 31, 2023, we had a total investment in FOXO carried at fair value of $21, which was included as a component of other investments, at fair value.
Previous report
BURU represents equity positions of Nuburu, Inc. (NYSE American: BURU), a publicly traded company that closed a business combination with Tailwind Acquisition Corp. As of December 31, 2023, we had a total investment in BURU carried at fair value of $7, which was included as a component of other investments, at fair value.
Previous report
OPTX represents equity positions of Syntec Optics Holdings, Inc. (NASDAQ: OPTX), a publicly traded company that closed a business combination with OmniLit Acquisition Corp. As of December 31, 2023, we had a total investment in OPTX carried at fair value of $1,317, which was included as a component of other investments, at fair value.
Previous report
CAPT represents equity positions of Captivision, Inc. (NASDAQ: CAPT), a publicly traded company that closed a business combination with Jaguar Global Growth Corp. I. As of December 31, 2023, we had a total investment in CAPT carried at fair value of $3,791, which was included as a component of other investments, at fair value.
Previous report
EGOX represents equity positions of Next.e.GO, BV (NASDAQ: EGOX), a publicly traded company that closed a business combination with Athena Consumer Acquisition Corp. As of December 31, 2023, we had a total investment in EGOX carried at fair value of $7,854, which was included as a component of other investments, at fair value.
Previous report
WEJO represents equity positions of Wejo Group, Ltd. (NASDAQ: WEJO), a publicly traded company that closed a business combination with Virtuoso Acquisition Corp. As of December 31, 2023, we had a total investment in WEJO carried at fair value of $0, which was included as a component of other investments, at fair value.
Previous report
In 2022, we entered into a bridge loan arrangement with an early stage growth company. The principal of the bridge loan was repaid in full during 2023. We earned a gross exit fee, initially valued at $3,040, comprised of a cash component of $1,050 and a share component of $1,990. The cash component was paid in full. The share component remains outstanding and is carried at fair value and included in the SFA amounts shown in the table.
Previous report
The CREO JV invests in commercial real estate debt. We carry our investment in the CREO JV at its reported NAV. As of December 31, 2023, we had a total investment in the CREO JV carried at fair value of $4,783, which was included as a component of other investments, at fair value.
Previous report
As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of HLGN was $0.
Previous report
As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of WEJO was $0.
Previous report
We held an equity method investment in the sponsor of the predecessor SPAC of Alpha Tau Medical, LTD (NASDAQ: DRTS). As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of DRTS was $0.
Previous report
As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of FOXO was $0.
Previous report
As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of OPTX was $0.
Previous report
We held an equity method investment in the sponsor of the predecessor SPAC of Zoomcar Holdings, Inc. (NASDAQ: ZCAR). As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of ZCAR was $0.
Previous report
We hold an equity method investment in the sponsor of the predecessor SPAC of African Agriculture Holdings Inc. (NASDAQ: AAGR). AAGR and its predecessor SPAC completed a business combination during 2023. Our remaining equity method investment as of December 31, 2023 of $2,357 represents the fair value of the equity interests attributable to us that remain in the sponsor entity. These interests should be distributed to us in 2024.
Previous report
The Company recorded a gross loss of $5,454 in connection with the FGMC reverse repo. Of the $5,454 loss, $5,244 was recorded as a reduction in net trading revenue and $210 was recorded in professional fees and other operating expenses. Of the $5,244 recorded in net trading revenue, $4,330 is included in the mortgage group and $914 is included in the matched book repo group in the table above. See note 11 to our consolidated financial statements included in Item 1 of this Annual Report on Form 10-K.
Previous report
Asset management fees decreased by $1,919, or 18%, to $9,004 for the year ended December 31, 2022, as compared to $10,923 for the year ended December 31, 2021, as discussed in more detail below.
Previous report
Asset management fees from other investment vehicles decreased primarily due to a reduction of incentive fees earned on the SPAC Fund.
Previous report
New issue and advisory revenue decreased by $4,015, or 14%, to $24,721 for the year ended December 31, 2022, as compared to $28,736 for the year ended December 31, 2021.
Previous report
For all investments discussed below, see note 9 to our consolidated financial statements included in this Annual Report on Form 10-K for information about how we determine the value of these instruments. For several of the investments described below, we also had an investment in the same company that was accounted for under the equity method during the periods presented. See discussion of equity method income / (loss) below.
Previous report
SFT was a publicly traded company. In the periods presented, the shares of SFT we held were comprised of both unrestricted and restricted shares and were carried at fair value. For a portion of the period we held these shares, they were held in majority owned consolidated subsidiaries (the "Insurance SPAC Sponsor Entities"). Accordingly, there were significant non-controlling interest and equity compensation expenses associated with these shares. See discussion of non-convertible non-controlling interest and equity compensation expense below. As of December 31, 2022, the total carrying value of our investment in SFT was $231.
Previous report
LMND is a publicly traded company. In the periods presented, the shares of LMND we held were comprised of both unrestricted and restricted shares and were carried at fair value. For a portion of the period we held these shares, they were held in majority owned consolidated subsidiaries (the "Insurance SPAC II Sponsor Entities"). Accordingly, there were significant non-controlling interest and equity compensation expenses associated with these shares. See discussion of non-convertible non-controlling interest and equity compensation expense below. As of December 31, 2022, the total carrying value of our investment in LMND was $561.
Previous report
IMXI represents equity positions of International Money Express, Inc. (NASDAQ: IMXI), a publicly traded company that resulted from the merger of Intermex Holdings, LLC and FinTech Acquisition Corp. II. These shares were carried at fair value. As of December 31, 2022, we hold no remaining investment in IMXI.
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Reworded paragraphs (53)
Previous wording
A portion of our revenue is generated from new issue and advisory engagements. The fees charged and volume of these engagements are sensitive to the overall business environment. We provide origination services in Europe through our subsidiary CCFESA, and new issue and advisory services in the U.S. through our subsidiary JVB. A division of JVB, CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory. Currently, our primary source of new issue and advisory revenue is from investment banking and advisory services through CCM, as well as originating assets for our U.S. and European insurance asset management business including our U.S. Insurance JV and for our CREO JV.
Current wording
A portion of our revenue is generated from new issue and advisory engagements. The fees charged and volume of these engagements are sensitive to the overall business environment. We provide origination services in Europe through our subsidiary CCFESA, and new issue and advisory services in the U.S. through our subsidiary JVB. A division of JVB, CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory services. In some cases, CCM will receive financial instruments in lieu of cash for its advisory transactions. In these cases, we record revenue equal to the fair value of the instruments received. Subsequent to receipt, the instruments are carried at fair value as a component of other investments, at fair value in our consolidated balance sheets. Any change in the fair value of these instruments subsequent to recording the new issue revenue will be recorded as principal transactions gain or loss in our consolidated statement of operations. Currently, our primary source of new issue and advisory revenue is from investment banking and advisory services through CCM, as well as originating assets for our U.S. and European insurance asset management business including our U.S. Insurance JV and for our CREO JV.
Previous wording
A portion of our revenues is generated from our principal investing activities. Therefore, our revenues are impacted by the overall market supply and demand of these investments as well as the individual performance of each investment. Our principal investments are included within other investments, at fair value; other investments sold, not yet purchased; and investments in equity method affiliates in our consolidated balance sheets. More recently, a significant component of our principal investment revenue has come from SPAC related equity investments, primarily in entities that have been the result of sponsored SPAC business combinations, share forward arrangements ("SFAs"), or related party sponsored SPAC business combinations. Access to these investments is reliant on a robust SPAC market. Performance of the resulting principal investments can be materially impacted by overall performance of the equity markets. See note 8 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current wording
A portion of our revenues is generated from our principal investing activities. Therefore, our revenues are impacted by the overall market supply and demand of these investments as well as the individual performance of each investment. Our principal investments are included within other investments, at fair value; other investments sold, not yet purchased; and investments in equity method affiliates in our consolidated balance sheets. More recently, a significant component of our principal investment revenue has come from SPAC related equity investments, primarily in entities that have been the result of sponsored SPAC business combinations, share forward arrangements ("SFAs"), CCM engagements, or related party sponsored SPAC business combinations. Access to these investments is reliant on a robust SPAC market. Performance of the resulting principal investments can be materially impacted by overall performance of the equity markets. See note 8 to our consolidated financial statements included in this Annual Report on Form 10-K.
Previous wording
During 2022 and 2023, the U.S. Federal Reserve began a process of raising the federal funds rate and quantitative tightening to address rising inflation. These actions have the effect of increasing interest rates, which negatively impacts our business in several ways:
Current wording
During 2022 and 2023, the U.S. Federal Reserve began a process of raising the federal funds rate and quantitative tightening to address rising inflation. Recently, the U.S. Federal Reserve reduced interest rates for the first time in several years. It is unclear as to whether or how quickly interest rates will continue to decline, if at all. For most of the periods presented herein, rates were rising or elevated versus historical lows, which negatively impacted our business in the following ways:
Previous wording
Revenues decreased by $101,981, or 70%, to $44,387 for the year ended December 31, 2022, as compared to $146,368 for the year ended December 31, 2021. As discussed in more detail below, the change was comprised of (i) a decrease of $29,376 in net trading revenue; (ii) a decrease of $1,919 in asset management revenue; (iii) a decrease of $4,015 in new issue and advisory revenue; and (iv) a decrease of $66,671 in principal transactions and other income.
Current wording
Revenues decreased by $3,383, or 4%, to $79,598 for the year ended December 31, 2024, as compared to $82,981 for the year ended December 31, 2023. As discussed in more detail below, the change was comprised of (i) an increase of $5,483 in net trading revenue; (ii) an increase of $1,672 in asset management revenue; (iii) an increase of $35,158 in new issue and advisory revenue; and (iv) a decrease of $45,696 in principal transactions and other income.
Previous wording
Net trading revenue decreased by $29,376, or 42%, to $40,009 for the year ended December 31, 2022, as compared to $69,385 for the year ended December 31, 2021. The following table shows the detail by trading group.
Current wording
Net trading revenue increased by $5,483, or 18%, to $36,409 for the year ended December 31, 2024, as compared to $30,926 for the year ended December 31, 2023. The following table shows the detail by trading group.
Previous wording
Our net trading revenue includes unrealized gains on our trading investments, as of the applicable measurement date, which may never be realized due to changes in market or other conditions not in our control. This may adversely affect the ultimate value realized from these investments. In addition, our net trading revenue also includes realized gains on certain proprietary trading positions. Our ability to derive trading gains from such trading positions is subject to overall market conditions. Due to the volatility and uncertainty in the capital markets generally, the net trading revenue recognized during the year may not be indicative of future results. Furthermore, from time to time, some of the assets included in the Investments-trading line of our consolidated balance sheets represent level 3 valuations within the FASB valuation hierarchy. Level 3 assets are carried at fair value based on estimates derived using internal valuation models and other estimates. See notes 9 and 10 to our consolidated financial statements included in this Annual Report on Form 10-K. The fair value estimates made by us may not be indicative of the final sale price at which these assets may be sold. We consider our matched book repo business to be subject to significant concentration risk. See note 11 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current wording
Our net trading revenue includes unrealized gains on our trading investments, as of the applicable measurement date, which may never be realized due to changes in market or other conditions not in our control. This may adversely affect the ultimate value realized from these investments. In addition, our net trading revenue also includes realized gains on certain proprietary trading positions. Our ability to derive trading gains from such trading positions is subject to overall market conditions. Due to the volatility and uncertainty in the capital markets generally, the net trading revenue recognized during the year may not be indicative of future results. Furthermore, from time to time, some of the assets included in the investments-trading line of our consolidated balance sheets represent level 3 valuations within the FASB valuation hierarchy. Level 3 assets are carried at fair value based on estimates derived using internal valuation models and other estimates. See notes 9 and 10 to our consolidated financial statements included in this Annual Report on Form 10-K. The fair value estimates made by us may not be indicative of the final sale price at which these assets may be sold. We consider our matched book repo business to be subject to significant concentration risk. See note 11 to our consolidated financial statements included in this Annual Report on Form 10-K. All net trading revenue is included in our Capital Markets segment. See note 29 to our consolidated financial statements included in this Annual Report on Form 10-K.
Previous wording
Our calculation of AUM may differ from the calculations used by other asset managers and, as a result, this measure may not be comparable to similar measures presented by other asset managers. This definition of AUM is not necessarily identical to the definitions of AUM that may be used in our management agreements.
Current wording
Our AUM equals the sum of the NAV or gross assets of the Investment Vehicles we manage based on whichever measurement serves as the basis for the calculation of our management fees. Our calculation of AUM may differ from the calculations used by other asset managers and, as a result, this measure may not be comparable to similar measures presented by other asset managers. This definition of AUM is not necessarily identical to the definitions of AUM that may be used in our management agreements.
Previous wording
Our revenue earned from new issue and advisory has been, and we expect will continue to be, volatile. We earn revenue from a limited number of engagements. Therefore, a small change in the number of engagements can result in large fluctuations in the revenue recognized. Further, even if the number of engagements remains consistent, the average revenue per engagement can fluctuate considerably. Finally, our revenue is generally earned when an underlying transaction closes (rather than on a monthly or quarterly basis). Therefore, the timing of underlying transactions increases the volatility of our revenue recognition. In addition, we often incur certain costs related to new issue engagements. These costs are included as a component of either subscriptions, clearing and execution, or professional fees and other.
Current wording
Our revenue earned from new issue and advisory has been, and we expect will continue to be, volatile. We earn revenue from a limited number of engagements. Therefore, a small change in the number of engagements can result in large fluctuations in the revenue recognized. Further, even if the number of engagements remains consistent, the average revenue per engagement can fluctuate considerably. Finally, our revenue is generally earned when an underlying transaction closes (rather than on a monthly or quarterly basis). Therefore, the timing of underlying transactions increases the volatility of our revenue recognition. In addition, we often incur certain costs related to new issue engagements. These costs are included as a component of either subscriptions, clearing and execution, or professional fees and other. All new issue revenue is included in our Capital Markets segment. See note 29 to our consolidated financial statements included in this Annual Report on Form 10-K.
Previous wording
CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory. In addition, we generate new issue revenue by originating new assets for the U.S. Insurance JV, CREO JV, and our PriDe funds in Europe.
Current wording
CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory services. In addition, we generate new issue revenue by originating new assets for the U.S. Insurance JV, CREO JV, and our PriDe Funds in Europe.
Previous wording
Principal transactions and other income decreased by $66,671 to ($29,347) for the year ended December 31, 2022, as compared to $37,324 for the year ended December 31, 2021.
Current wording
Principal transactions and other income decreased by $45,696 to ($29,242) for the year ended December 31, 2024, as compared to $16,454 for the year ended December 31, 2023.
Previous wording
The U.S. Insurance JV invests in insurance company debt. We carry our investment in the U.S. Insurance JV at its reported NAV. As of December 31, 2023, we had a total investment in the U.S. Insurance JV carried at fair value of $3,107, which was included as a component of other investments, at fair value.
Current wording
The U.S. Insurance JV invests in insurance company debt. We carry our investment in the U.S. Insurance JV at its reported NAV.
Previous wording
Stoa USA Inc. / FlipOS was a private company in which we owned common equity. During 2023, Stoa USA Inc. / FlipOS announced that it had ceased operations. We wrote off our investment during 2023 and recorded a principal transactions loss. We have no remaining investment in Stoa USA Inc. / FlipOS as of December 31, 2023.
Current wording
Stoa USA Inc. / FlipOS was a private company in which we owned common equity. During 2023, Stoa USA Inc. / FlipOS announced it had ceased operations. We wrote off our investment in 2023. We have no remaining investment in Stoa USA Inc. / FlipOS.
Previous wording
We have engaged in several SFAs. In a typical SFA transaction, we acquire an interest in a publicly traded company and enter into an offsetting derivative with the same company. Both the interest in the public company and the offsetting derivative are carried at fair value. The amount shown in the table above represents the net change in fair value recorded during the period. The interests we hold in SFA Counterparties are included as a component of other investments, at fair value. The derivatives are included as a component of other investments sold, not yet purchased, at fair value. See note 10 to our consolidated financial statements included in Item 1 of this Annual Report on Form 10-K for more information regarding our SFAs.
Current wording
We have engaged in several SFA transactions. In a typical SFA transaction, we acquire an interest in a publicly traded company and enter into an offsetting derivative with the same company. Both the interest in the public company and the offsetting derivative are carried at fair value. The amount shown in the table above represents the net change in fair value recorded during the periods presented. The interests we hold in SFA Counterparties are included as a component of other investments, at fair value. The derivatives are included as a component of other investments sold, not yet purchased, at fair value. See note 8 to our consolidated financial statements included in this Annual Report on Form 10-K for more information regarding our SFAs.
Previous wording
Other income increased by $144 to $1,284 for the year ended December 31, 2022, as compared to $1,140 for the year ended December 31, 2021. The revenue share arrangement noted in the table above entitles us to a percentage of revenue earned by IIFC. The IIFC revenue share arrangement expires at the earlier of (i) the dissolution of IIFC or (ii) when we have earned a cumulative $20,000 in revenue share payments. As of December 31, 2022, we had earned $4,513. In addition, in any particular year, the revenue share earned by us cannot exceed $2,000.
Current wording
Other income is comprised of an ongoing revenue share arrangement as well as other miscellaneous operating income items. The revenue share arrangement noted in the table above entitles us to a percentage of revenue earned by IIFC. The IIFC revenue share arrangement expires at the earlier of (i) the dissolution of IIFC or (ii) when we have earned a cumulative $20,000 in revenue share payments. To date, we have earned $8,175. Other income is recorded in all three of our segments. See note 29 to our consolidated financial statements included in our Annual Report on Form 10-K.
Previous wording
Operating expenses decreased by $34,425, or 32%, to $72,350 for the year ended December 31, 2022, as compared to $106,775 for the year ended December 31, 2021. As discussed in more detail below, the change was comprised of (i) a decrease of $34,758 in compensation and benefits; (ii) an increase of $1,711 in business development, occupancy, and equipment; (iii) a decrease of $2,033 in subscriptions, clearing, and execution; (iv) an increase of $469 in professional fee and other operating; and (v) an increase of $186 in depreciation and amortization.
Current wording
Operating expenses increased by $11,501, or 15%, to $87,621 for the year ended December 31, 2024, as compared to $76,120 for the year ended December 31, 2023. As discussed in more detail below, the change was comprised of (i) an increase of $4,296 in compensation and benefits; (ii) an increase of $1,413 in business development, occupancy, and equipment; (iii) an increase of $674 in subscriptions, clearing, and execution; (iv) an increase of $5,125 in professional fee and other operating; and (v) a decrease of $7 in depreciation and amortization.
Previous wording
Cash compensation and benefits in the table above is primarily comprised of salary, incentive compensation, severance, employer portion of payroll taxes, and benefits. Cash compensation and benefits decreased by $23,430 to $45,900 for the year ended December 31, 2022, as compared to $69,330 for the year ended December 31, 2021. Our headcount increased to 121 as of December 31, 2022 from 118 as of December 31, 2021. Cash compensation decreased primarily due to a decrease in incentive compensation related to the decrease in overall revenue and income from equity method affiliates.
Current wording
Cash compensation and benefits in the table above is primarily comprised of salary, incentive compensation, severance, employer portion of payroll taxes, and benefits. Cash compensation and benefits increased by $4,019 to $51,720 for the year ended December 31, 2024, as compared to $47,701 for the year ended December 31, 2023. Our headcount decreased to 113 as of December 31, 2024 from 118 as of December 31, 2023. Cash compensation increased primarily due to an increase in incentive compensation related to the increase in new issue and advisory revenue and income from equity method affiliates, as well as the year over year overall improvement in operating performance.
Previous wording
Subscriptions, clearing, and execution decreased by $2,033, or 20%, to $8,274 for the year ended December 31, 2022, as compared to $10,307 for the year ended December 31, 2021. This was comprised of a decrease in clearing and execution costs of $2,342, partially offset by an increase in subscriptions and dues of $309. The increase in subscriptions and dues was due to normal fluctuations in the number of subscriptions. The decrease in clearing and execution was due to decreased trading volumes.
Current wording
Subscriptions, clearing, and execution increased by $674, or 8%, to $9,639 for the year ended December 31, 2024, as compared to $8,965 for the year ended December 31, 2023. The increase was comprised of an increase in subscriptions and dues of $660 and an increase in clearing and execution of $14.
Previous wording
Interest expense, net decreased by $2,251, or 31%, to $4,982 for the year ended December 31, 2022, as compared to $7,233 for the year ended December 31, 2021.
Current wording
Interest expense, net decreased by $705 to $5,821 for the year ended December 31, 2024, as compared to $6,526 for the year ended December 31, 2023.
Previous wording
The tax benefit recognized in 2021 was comprised of a deferred tax benefit of $4,116, partially offset by current tax expense of $575. The current tax expense incurred was the result of foreign, state, and local income tax. The deferred tax benefit was a U.S. federal, state, and local tax benefit, which was the result of the reduction in the valuation allowance applied against the Company's NOL and NCL tax assets.
Current wording
The tax benefit recognized in 2024 was comprised of a deferred tax benefit of $677 and current tax expense of $348. The current tax expense incurred was the result of foreign, state, and local income tax. The deferred tax benefit was due to routine timing differences between recognition of income and expense items for GAAP and tax purposes.
Previous wording
The tax expense recognized in 2023 was comprised of a deferred tax expense of $5,354 and current tax expense of $191. The current tax expense incurred was the result of foreign, state, and local income tax. The deferred tax expense was a U.S. federal, state, and local tax expense, which was the result of the increase in the valuation allowance applied against the Company's NOL and NCL tax assets.
Current wording
The tax expense recognized in 2023 was comprised of a deferred tax expense of $5,354 and current tax expense of $191. The current tax expense incurred was the result of foreign, state, and local income tax. The deferred tax expense was U.S. federal, state, and local tax expense, which was the result of the increase in the valuation allowance applied against the Company's carryforward tax assets.
Previous wording
We have significant carryforward tax assets. As of December 31, 2023, the Company had a federal net operating loss (“NOL”) of approximately $96,457, which will be available to offset future taxable income, subject to limitations described below. If not used, this NOL will begin to expire in 2028. The Company also had net capital losses (“NCLs”) in excess of capital gains of $59,844 as of December 31, 2023, which can be carried forward to offset future capital gains. If not used, this carryforward will begin to expire in 2024. ASC 746 requires that we record a valuation allowance against these assets so that the net asset recognized is, in management's judgment, more likely than not to be realized.
Current wording
We have significant carryforward tax assets. As of December 31, 2024, the Company had a federal net operating loss (“NOL”) of approximately $92,543, which will be available to offset future taxable income, subject to limitations described below. If not used, this NOL will begin to expire in 2028. The Company also had net capital losses (“NCLs”) in excess of capital gains of $57,239 as of December 31, 2024, which can be carried forward to offset future capital gains. If not used, this carryforward will begin to expire in 2025. ASC 746 requires that we record a valuation allowance against these assets so that the net asset recognized is, in management's judgment, more likely than not to be realized.
Previous wording
Each reporting period, management determines the expected amount of taxable income it will generate in each jurisdiction where the Company has NOLs. Management then schedules this income against each carryforward asset and determines what portion of the asset it believes is more likely than not to be realized. This determination is subjective and subject to many assumptions and factors including: profitability of our business in the future, the timing of that future income as compared to carryforward asset expiration, the character of future income (ordinary or capital), and the jurisdiction in which the income will be generated. To the extent management's determination changes, an adjustment will be made to the valuation allowance resulting in deferred tax expense or benefit. We recorded deferred tax expense in 2022 and 2023 because expectations of future income decreased and the Company increased the valuation allowance it had applied against carryforward assets. Due to the magnitude of the Company's carryforward assets as well as the volatility of the Company's operating results, significant adjustments to the valuation allowance are likely going forward. These future adjustments may likewise result in material amounts of deferred tax benefit or expense going forward.
Current wording
Each reporting period, management determines the expected amount of taxable income it will generate in each jurisdiction where the Company has NOLs. Management then schedules this income against each carryforward asset and determines what portion of the asset it believes is more likely than not to be realized. This determination is subjective and subject to many assumptions and factors including: profitability of our business in the future, the timing of that future income as compared to carryforward asset expiration, the character of future income (ordinary or capital), and the jurisdiction in which the income will be generated. To the extent management's determination changes, an adjustment will be made to the valuation allowance resulting in deferred tax expense or benefit. We recorded deferred tax expense in 2023 because expectations of future income decreased and the Company increased the valuation allowance it had applied against carryforward assets. Due to the magnitude of the Company's carryforward assets as well as the volatility of the Company's operating results, significant adjustments to the valuation allowance are likely going forward. These future adjustments may likewise result in material amounts of deferred tax benefit or expense going forward.
Previous wording
Our net trading revenue includes unrealized gains on our trading investments, as of the applicable measurement date, which may never be realized due to changes in market or other conditions not in our control. This may adversely affect the ultimate value realized from these investments. In addition, our net trading revenue also includes realized gains on certain proprietary trading positions. Our ability to derive trading gains from such trading positions is subject to overall market conditions. Due to volatility and uncertainty in the capital markets, the net trading revenue recognized during the year may not be indicative of future results. Furthermore, from time to time, some of the assets included in the Investments-trading line of our consolidated balance sheets represent level 3 valuations within the FASB valuation hierarchy. Level 3 assets are carried at fair value based on estimates derived using internal valuation models and other estimates. See notes 9 and 10 to our consolidated financial statements included in this Annual Report on Form 10-K. The fair value estimates made by us may not be indicative of the final sale price at which these assets may be sold. We consider our matched book repo business to be subject to significant concentration risk. See note 11 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current wording
Our net trading revenue includes unrealized gains on our trading investments, as of the applicable measurement date, which may never be realized due to changes in market or other conditions not in our control. This may adversely affect the ultimate value realized from these investments. In addition, our net trading revenue also includes realized gains on certain proprietary trading positions. Our ability to derive trading gains from such trading positions is subject to overall market conditions. Due to the volatility and uncertainty in the capital markets generally, the net trading revenue recognized during the year may not be indicative of future results. Furthermore, from time to time, some of the assets included in the investments-trading line of our consolidated balance sheets represent level 3 valuations within the FASB valuation hierarchy. Level 3 assets are carried at fair value based on estimates derived using internal valuation models and other estimates. See notes 9 and 10 to our consolidated financial statements included in this Annual Report on Form 10-K. The fair value estimates made by us may not be indicative of the final sale price at which these assets may be sold. We consider our matched book repo business to be subject to significant concentration risk. See note 11 to our consolidated financial statements included in this Annual Report on Form 10-K. All net trading revenue is included in our Capital Markets segment. See note 29 to our consolidated financial statements included in this Annual Report on Form 10-K.
Previous wording
Asset management fees from CDOs decreased primarily because the one of the securitizations we manage completed a successful auction during 2022. As a result, we received payment of deferred subordinated management fees of $1,600 in 2022. Otherwise, asset management fees from CDOs declined by $216 during 2023 mainly due to a decline in AUM due to liquidations and principal paydowns of collateral.
Current wording
Asset management fees from CDOs decreased primarily because one of the securitizations we manage completed a successful auction during 2022. As a result, we received payment of deferred subordinated management fees of $1,600 in 2022. Otherwise, asset management fees from CDOs declined by $216 during 2023 mainly due to a decline in AUM due to liquidations and principal paydowns of collateral.
Previous wording
Asset management fees from other investment vehicles remained relatively flat.
Current wording
Asset management fees from other investment vehicles remained relatively unchanged.
Previous wording
Our revenue earned from new issue and advisory has been, and we expect will continue to be, volatile. We earn revenue from a limited number of engagements. Therefore, a small change in the number of engagements can result in large fluctuations in the revenue recognized. Further, even if the number of engagements remains consistent, the average revenue per engagement can fluctuate considerably. Finally, our revenue is generally earned when an underlying transaction closes (rather than on a monthly or quarterly basis). Therefore, the timing of underlying transactions increases the volatility of our revenue recognition. In addition, we often incur certain costs related to new issue engagements. These costs are included as a component of either subscriptions, clearing and execution, or professional fees and other and will generally be recognized in the same period that the related revenue is recognized.
Current wording
Our revenue earned from new issue and advisory has been, and we expect will continue to be, volatile. We earn revenue from a limited number of engagements. Therefore, a small change in the number of engagements can result in large fluctuations in the revenue recognized. Further, even if the number of engagements remains consistent, the average revenue per engagement can fluctuate considerably. Finally, our revenue is generally earned when an underlying transaction closes (rather than on a monthly or quarterly basis). Therefore, the timing of underlying transactions increases the volatility of our revenue recognition. In addition, we often incur certain costs related to new issue engagements. These costs are included as a component of either subscriptions, clearing and execution, or professional fees and other. All new issue revenue is included in our Capital Markets segment. See note 29 to our consolidated financial statements included in this Annual Report on Form 10-K.
Previous wording
CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory. In addition, we generate new issue revenue by originating new assets for the U.S. Insurance JV, CREO JV, and for our PriDe funds in Europe.
Current wording
CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory services. In addition, we generate new issue revenue by originating new assets for the U.S. Insurance JV, CREO JV, and our PriDe Funds in Europe.
Previous wording
The U.S. Insurance JV invests in insurance company debt. We carry our investment in the U.S. Insurance JV at its reported NAV. As of December 31, 2022, we had a total investment in the U.S. Insurance JV carried at fair value of $3,459, which was included as a component of other investments, at fair value.
Current wording
The U.S. Insurance JV invests in insurance company debt. We carry our investment in the U.S. Insurance JV at its reported NAV.
Previous wording
Other income / (loss) is comprised of an ongoing revenue share arrangement as well as other miscellaneous operating income items. The revenue share arrangement noted in the table above entitles us to a percentage of revenue earned by IIFC. The IIFC revenue share arrangement expires at the earlier of (i) the dissolution of IIFC or (ii) when we have earned a cumulative $20,000 in revenue share payments. To date, we have earned $5,618. Also, in any particular year, the revenue share earned by us cannot exceed $2,000.
Current wording
Other income is comprised of an ongoing revenue share arrangement as well as other miscellaneous operating income items. The revenue share arrangement noted in the table above entitles us to a percentage of revenue earned by IIFC. The IIFC revenue share arrangement expires at the earlier of (i) the dissolution of IIFC or (ii) when we have earned a cumulative $20,000 in revenue share payments. To date, we have earned $8,715. See note 29 to our consolidated financial statements included in our Annual Report on Form 10-K.
Previous wording
Interest expense, net increased by $1,544 to $6,526 for the year ended December 31, 2023, as compared to $4,982 for the year ended December 31, 2022.
Current wording
Interest expense, net increased by $1,544, or 31%, to $6,526 for the year ended December 31, 2023, as compared to $4,982 for the year ended December 31, 2022.
Previous wording
SPAC Sponsor Entities includes both indirect and direct investments in SPAC Sponsor Entities. Several of these SPAC Sponsor Entities are invested in SPACs that have completed their business combinations. Those SPAC Sponsor Entities hold restricted and unrestricted equity interests in the public post-merger entities. We account for our investments in SPAC Sponsor Entities under the equity method of accounting. If the SPAC Sponsor Entity distributes SPAC shares to us, we account for those SPAC shares as a component of other investments, at fair value. The following table shows the equity method income or loss included in other SPAC Sponsor Entities above broken out by the ultimate public company investee. For several of the investments described below, we also had an investment in the same company accounted for at fair value as a component of other investments, at fair value during the periods presented. See discussion of principal transactions above.
Current wording
SPAC sponsor entities includes both indirect and direct investments in SPAC sponsor entities. Several of these SPAC sponsor entities are invested in SPACs that have completed their business combinations. Those SPAC sponsor entities hold restricted and unrestricted equity interests in the public post-merger entities. We account for our investments in SPAC sponsor entities under the equity method of accounting. If the SPAC sponsor entity distributes SPAC shares to us, we account for those SPAC shares as a component of other investments, at fair value. The following table shows the equity method income or loss included in SPAC sponsor entities above broken out by the ultimate public company investee. For several of the investments described below, we also had an investment in the same company accounted for at fair value as a component of other investments, at fair value during the periods presented. See discussion of principal transactions above.
Previous wording
The remaining other investments in SPAC Sponsor Entities represent direct and indirect investments in sponsor entities that have not yet completed a business combination. See note 12 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-K.
Current wording
See note 12 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-K.
Previous wording
The income tax expense / (benefit) was $5,545 for the year ended December 31, 2023, as compared to $4,794 for the year ended December 31, 2022. See note 23 to our consolidated financial statements included in our Annual Report on Form 10-K.
Current wording
The income tax expense was $5,545 for the year ended December 31, 2023, as compared to $4,794 for the year ended December 31, 2022. See note 23 to our consolidated financial statements included in our Annual Report on Form 10-K.
Previous wording
The tax expense recognized in 2022 was comprised of a deferred tax expense of $4,579 and current tax expense of $215. The current tax expense incurred was the result of foreign, state, and local income tax. The deferred tax expense was a U.S. federal, state, and local tax expense, which was the result of the increase in the valuation allowance applied against the Company's NOL and NCL tax assets.
Current wording
The tax expense recognized in 2022 was comprised of a deferred tax expense of $4,579 and current tax expense of $215. The current tax expense incurred was the result of foreign, state, and local income tax. The deferred tax expense was U.S. federal, state, and local tax expense, which was the result of the increase in the valuation allowance applied against the Company's carryforward tax assets.
Previous wording
We have significant carryforward tax assets. As of December 31, 2022, the Company had a federal net operating loss (“NOL”) of approximately $96,002, which will be available to offset future taxable income, subject to limitations described below. If not used, this NOL will begin to expire in 2028. The Company also had net capital losses (“NCLs”) in excess of capital gains of $70,457 as of December 31, 2022, which can be carried forward to offset future capital gains. If not used, this carryforward will begin to expire in 2023. ASC 746 requires that we record a valuation allowance against these assets so that the net asset recognized is, in management's judgment, more likely than not to be realized.
Current wording
We have significant carryforward tax assets. As of December 31, 2023, the Company had a federal net operating loss (“NOL”) of approximately $96,457, which will be available to offset future taxable income, subject to limitations described below. The Company also had net capital losses (“NCLs”) in excess of capital gains of $59,844 as of December 31, 2023, which can be carried forward to offset future capital gains. ASC 746 requires that we record a valuation allowance against these assets so that the net asset recognized is, in management's judgment, more likely than not to be realized.
Previous wording
Each reporting period, management determines the expected amount of taxable income it will generate in each jurisdiction where the Company has NOLs. Management then schedules this income against each carryforward asset and determines what portion of the asset it believes is more likely than not to be realized. This determination is subjective and subject to many assumptions and factors including: profitability of our business in the future, the timing of that future income as compared to carryforward asset expiration, the character of future income (ordinary or capital), and the jurisdiction in which the income will be generated. To the extent management's determination changes, an adjustment will be made to the valuation allowance resulting in deferred tax expense or benefit. We recorded deferred tax benefit in 2021 because expectations of future income increased and the Company reduced the valuation allowance it had applied against carryforward assets. The Company recorded deferred tax expense in 2022 because expectations of future income decreased and the Company increased the valuation allowance it had applied against carryforward assets. Because of magnitude of the Company's carryforward assets as well as the volatility of the Company's operating results, significant adjustments to the valuation allowance are likely going forward. These future adjustments may likewise result in material amounts of deferred tax benefit or expense going forward.
Current wording
Each reporting period, management determines the expected amount of taxable income it will generate in each jurisdiction where the Company has NOLs. Management then schedules this income against each carryforward tax asset and determines what portion of the asset it believes is more likely than not to be realized. This determination is subjective and subject to many assumptions and factors including: profitability of our business in the future, the timing of that future income as compared to carryforward asset expiration, the character of future income (ordinary or capital), and the jurisdiction in which the income will be generated. To the extent management's determination changes, an adjustment will be made to the valuation allowance resulting in deferred tax expense or benefit. We recorded deferred tax expense in 2022 and 2023 because expectations of future income decreased and the Company increased the valuation allowance it had applied against carryforward tax assets. Due to the magnitude of the Company's carryforward tax assets as well as the volatility of the Company's operating results, significant adjustments to the valuation allowance are likely going forward. These future adjustments may likewise result in material amounts of deferred tax benefit or expense going forward.
Previous wording
Insurance SPAC III Sponsor Entities are the sponsor entities formed by us for our sponsored SPACs. Prior to March 31, 2023, the Vellar GP was the general partner of the SPAC Fund but did not consolidate it. Effective April 1, 2023, the Vellar GP began consolidating the SPAC Fund. The Vellar GP primarily invests in share forward arrangements. See notes 4, 10, and 21 to our consolidated financials included in this Annual Report on Form 10-K. Other SPAC related is mainly comprised of an entity that we consolidated but do not wholly own that invests in other SPAC sponsor entities.
Current wording
Insurance SPAC III sponsor entities are the sponsor entities formed by us for our sponsored SPAC, Insurance SPAC III. Prior to March 31, 2023, Vellar GP was the general partner of the SPAC Fund but did not consolidate it. Effective April 1, 2023, Vellar GP began consolidating the SPAC Fund. Vellar GP primarily invests in share forward arrangements. On February 25, 2025, the Operating LLC sold its 33.4% interest in Vellar GP pursuant to the Vellar Purchase Agreement and will no longer consolidate Vellar GP. See notes 4, 10, and 21 to our consolidated financials included in this Annual Report on Form 10-K. Other SPAC related is mainly comprised of an entity that we consolidated but do not wholly own that invests in other SPAC sponsor entities.
Previous wording
Liquidity is a measurement of our ability to meet potential cash requirements including ongoing commitments to repay debt borrowings, make interest payments on outstanding borrowings, fund investments, and support other general business purposes. In addition, our United States and European broker-dealer subsidiaries are subject to certain regulatory requirements to maintain minimum levels of net capital. Historically, our primary sources of funds have been our operating activities and general corporate borrowings. In addition, our trading operations have generally been financed by use of collateralized securities financing arrangements as well as margin loans.
Current wording
Liquidity is a measurement of our ability to meet potential cash requirements including ongoing commitments to repay debt borrowings, make interest payments on outstanding borrowings, fund investments, and support other general business purposes. In addition, our U.S. and European broker-dealer subsidiaries are subject to certain regulatory requirements to maintain minimum levels of net capital. Historically, our primary sources of funds have been our operating activities and general corporate borrowings. In addition, our trading operations have generally been financed by use of collateralized securities financing arrangements as well as margin loans.
Previous wording
During the twelve months ended December 31, 2021, the Company repurchased 49,544 shares of Common Stock in the open market for a total purchase price of $857. The Company did not repurchase any shares of Common Stock in 2022 or 2023.
Current wording
The Company did not repurchase any shares of Common Stock in 2022, 2023, or 2024.
Previous wording
On October 5, 2023, we entered into an equity distribution agreement (the “2023 Equity Agreement”) with the Sales Agent, relating to the ATM Program, pursuant to which we are permitted to sell an aggregate of up to $4,712 in Shares, which represented one-third of the value of the Common Stock held by non-affiliates. As of December 31, 2023, no Shares had been sold under the 2023 Equity Agreement.
Current wording
On October 5, 2023, we entered into an equity distribution agreement (the “2023 Equity Agreement”) relating to the ATM Program, pursuant to which we are permitted to sell an aggregate of up to $4,712 in Shares, which represented one-third of the value of the Common Stock held by non-affiliates. As of December 31, 2024, 13,500 shares had been sold under the 2023 Equity Agreement for total proceeds of $154.
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Income / (loss) from equity method affiliates increased by $6,095 to $21,704 for the year ended December 31, 2024, as compared to $15,609 for the year ended December 31, 2023. See note 12 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current report — wording carried from elsewhere
See note 12 to our consolidated financial statements included in this Annual Report on Form 10-K.
Current report — wording carried from elsewhere
Prior to March 31, 2023, the Vellar GP was the general partner of the SPAC Fund but did not consolidate it. Effective April 1, 2023, the Vellar GP began consolidating the SPAC Fund. The Vellar GP primarily invests in share forward arrangements. On February 25, 2025, the Operating LLC sold its 33.4% interest in the Vellar GP pursuant to the Vellar Purchase Agreement and will no longer consolidate Vellar GP. See notes 4, 10, and 21 to our consolidated financials included in this Annual Report on Form 10-K. Other SPAC related is mainly comprised of an entity that we consolidated but do not wholly own that invests in other SPAC sponsor entities.
Current report — wording carried from elsewhere
Stoa USA Inc. / FlipOS was a private company in which we owned common equity. During 2023, Stoa USA Inc. / FlipOS announced it had ceased operations and declared bankruptcy. We wrote off our investment in 2023. We have no remaining investment in Stoa USA Inc. / FlipOS.
Current report — wording carried from elsewhere
We have engaged in several SFA transactions. In a typical SFA transaction, we acquire an interest in a publicly traded company and enter into an offsetting derivative with the same company. Both the interest in the public company and the offsetting derivative are carried at fair value. The amount shown in the table above represents the net change in fair value recorded during the periods presented. The interests we hold in SFA Counterparties are included as a component of other investments, at fair value. The derivatives are included as a component of other investments sold, not yet purchased, at fair value. See note 8 to our consolidated financial statements included in this Annual Report on Form 10-K for more information regarding our SFAs.
Current report — wording carried from elsewhere
Other principal investments consist of realized and unrealized gains and losses from other investments reported at fair value.
Current report — wording carried from elsewhere
The tax expense recognized in 2023 was comprised of a deferred tax expense of $5,354 and current tax expense of $191. The current tax expense incurred was the result of foreign, state, and local income tax. The deferred tax expense was U.S. federal, state, and local tax expense, which was the result of the increase in the valuation allowance applied against the Company's carryforward tax assets.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Our AUM equals the sum of the NAV or gross assets of the Investment Vehicles we manage based on whichever measurement serves as the basis for the calculation of our management fees.
Previous report — wording carried elsewhere
A significant portion of our asset management fees are earned from the management of CDOs. We have not completed a new securitization since 2008. As a result, our asset management revenue from CDOs has declined from its historical highs as the assets of the CDOs decline due to maturities, repayments, auction call redemptions, liquidations, and defaults. Our ability to complete securitizations in the future will depend upon, among other things, our asset origination capacity and success, our ability to arrange warehouse financing to originate assets, our willingness and capacity to fund required amounts to obtain warehouse financing and securitized financings, and the demand in the markets for such securitizations.
Previous report — wording carried elsewhere
Asset management fees from CDOs increased because the one of the securitizations we manage completed a successful auction during 2022. As a result, we received payment of deferred subordinated management fees of $1,600. Otherwise, asset management fees from CDOs declined by $630 during 2022 mainly due to a decline in AUM due to liquidations of collateral, our removal as manager of one CDO, and principal paydowns of collateral.
Previous report — wording carried elsewhere
Stoa USA Inc. / FlipOs was a private company in which we owned common equity. We carried our investment at fair value. As of December 31, 2022, we had a total investment in Stoa USA Inc. / FlipOs carried at fair value of $6,693, which was included as a component of other investments, at fair value. See note 31 to our consolidated financial statements included in Item 1 of this Annual Report on Form 10-K.