Cohen & Co Inc. 8-K Summary
Business Context and Reporting Period
This Form 8-K Current Report was filed by Cohen & Company Inc. on September 25, 2018. The filing discloses the entry into material definitive agreements involving amendments to existing convertible senior promissory notes.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, or margin data. It details the following debt instruments:
- Cohen Note: Principal amount of $4,385,628 issued to the Edward E. Cohen IRA on August 28, 2015.
- EBC Note: Principal amount of $2,400,000 issued to the EBC 2013 Family Trust on September 25, 2013.
- Total Principal Amended: $6,785,628.
Material Changes
On September 25, 2018, the Company amended both notes with the following material changes:
- Maturity Extension: The maturity date for both notes was extended from September 25, 2018, to September 25, 2019.
- Conversion Price Reduction: The conversion price was reduced from $30.00 per share to $12.00 per share of Common Stock.
- Conversion Cap: Conversion is restricted until stockholder approval is obtained if the issuance would result in the holder owning 19.99% or more of the outstanding Common Stock (as of the Effective Date).
Outlook, Risks, and Management Commentary
The amendments impose specific obligations on the Company regarding future stockholder actions:
- Stockholder Vote: The Company must present a proposal at the 2019 annual meeting of stockholders to approve the issuance of shares upon conversion, as required by Section 713 of the NYSE American's Company Guide.
- Board Recommendation: The Board of Directors is required to recommend that stockholders approve this proposal.
- Related Party Transactions: The notes are held by entities related to the Cohen family. Edward E. Cohen is the benefactor of the Cohen IRA and father of Daniel G. Cohen (Chairman and CEO of European operations). Daniel G. Cohen is a trustee of the EBC 2013 Family Trust.
Key Facts for Investor Verification
- Verify the impact of the reduced conversion price ($12.00) on potential future dilution of existing shareholders.
- Confirm the status of the required stockholder vote scheduled for the 2019 annual meeting.
- Review the full text of Exhibit 10.1 and 10.2 for additional covenants or conditions not summarized in the 8-K.
- Assess the liquidity implications of extending the debt maturity by one year.