Business Context and Reporting Period
Company: Cohen & Co Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: December 30, 2019
Event: Entry into a Material Definitive Agreement involving the issuance of equity securities and the acquisition of International Money Express, Inc. (IMXI) common stock.
Key Financial Metrics and Transaction Details
This filing reports a specific transaction rather than periodic financial performance metrics (e.g., revenue, profit, cash flow). The filing text does not provide a clear value for the company's overall revenue, profit, margins, debt, or liquidity.
Transaction Components:
- Securities Issued: 22,429,541 newly issued LLC Units and 22,429,541 newly issued Series F Voting Non-Convertible Preferred Stock.
- Consideration Received: 662,361 shares of IMXI Common Stock transferred to the Operating LLC.
- Counterparties: Daniel G. Cohen (President/CEO of European operations, Chairman) and The DGC Family Fintech Trust (collectively, "Buyer").
Material Changes and Restrictions
The transaction introduces specific restrictions on the newly issued securities and voting rights:
- IMXI Stock Restrictions:
- 264,021 shares are restricted until IMXI stock closes above $15.00 for 20 of 30 consecutive trading days.
- 264,023 shares are restricted until IMXI stock closes above $17.00 for 20 of 30 consecutive trading days.
- Redemption Limits: The Buyer agreed not to redeem LLC Units for Common Stock if the issuance would exceed 19.99% of outstanding Common Stock or if it jeopardizes net operating loss carryforwards under Section 382 of the Internal Revenue Code.
- Voting Proxy: If the Company holds less than a majority of votes in the Operating LLC, the Buyer must grant a proxy to the Company to ensure a majority vote.
Guidance, Outlook, and Corporate Actions
Stockholder Proposal: The Company agreed to submit a proposal at the 2020 annual meeting for stockholder approval regarding the issuance of Common Stock in connection with LLC Unit redemptions, as required by NYSE American rules. The Board must recommend approval and cannot withdraw the resolution.
Corporate Governance: Articles Supplementary for the Series F Voting Non-Convertible Preferred Stock were filed with the State of Maryland. These shares vote together with Series E shares (one vote per ten shares).
Risks and Contingencies: The transaction relies on exemptions under Section 4(a)(2) of the Securities Act of 1933. The value of the consideration (IMXI stock) is subject to market volatility and transfer restrictions.
Investor Verification Checklist
- Verify the current market price of IMXI Common Stock to assess the value of the consideration received and the status of transfer restrictions ($15.00 and $17.00 thresholds).
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) for detailed representations, warranties, and indemnification terms.
- Confirm the Company's current ownership percentage in the Operating LLC to determine if the voting proxy provision is currently active.
- Monitor the 2020 annual meeting proxy statement for the specific language of the Stockholder Proposal regarding LLC Unit redemptions.
- Assess the impact of the new Series F Preferred Stock on the Company's capital structure and potential dilution of existing common shareholders.