Cohen (COHN) risk factors, FY2025 10-K

Other

1. 01We may make future loans to SPACs which may not be repaid
2. 02We may not be able to keep pace with continuing changes in technology
3. 03Maintenance of our Investment Company Act exemption imposes limits on our operationsNew

Risks Related to Our Organizational Structure and Ownership of Our Common Stock

1. 04As a “controlled company,” our other stockholders may lose certain corporate governance protections
2. 58We could repurchase shares of our Common Stock at price levels considered excessive, the amount of our Common Stock we repurchase may decrease from historical levels, or we may not repurchase any additional shares of our Common Stock in the future
3. 59We are a holding company whose primary asset is units of membership interests in the Operating LLC, and we are dependent on distributions from the Operating LLC to pay taxes and other obligations
4. 60Our failure to deal appropriately with actual, potential or perceived conflicts of interest could damage our reputation and materially adversely affect our business
5. 61Mr. Cohen currently owns approximately 38.7% of the voting power of the Company as a result of his ownership of our outstanding Common Stock, Series E Preferred Stock and Series F Preferred Stock
6. 62Any future distributions to our stockholders will depend upon certain factors affecting our operating results, some of which are beyond our control. Any future distributions to our stockholders will depend upon certain factors affecting our operating results, some of which are beyond our control
7. 63Future sales of our Common Stock in the public market could lower the price of our Common Stock and impair our ability to raise funds in future securities offerings
8. 64Your percentage ownership in the Company may be diluted in the future
9. 65The issuance of the shares of Common Stock upon the redemption, if any, of the issued and outstanding LLC Units may cause substantial dilution to our existing stockholders and may cause the price of our Common Stock to decline
10. 66We may not be able to generate sufficient taxable income to fully realize our deferred tax asset, which would also have to be reduced if U.S. federal income tax rates are lowered
11. 67The Maryland General Corporation Law (the “MGCL”), and provisions in our charter and bylaws may prevent takeover attempts that could be beneficial to our stockholders
12. 68no stockholder is entitled to cumulate votes at any election of directors; and

Risks Related to General and Global Factors

1. 05We may need to offer new investment strategies and products in order to continue to generate revenue100% rewritten
2. 69Climate change concerns and incidents could disrupt our business, adversely affect the profitability of certain of our investments, adversely affect customer activity levels, adversely affect the creditworthiness of our counterparties, and damage our reputation
3. 70Cybersecurity incidents, data breaches, or operational failures could disrupt our business, compromise sensitive information, and adversely affect our financial condition and results of operationsNew
4. 71If we fail to control our costs effectively, our business could be disrupted, and our financial results could be adversely affected33% rewritten
5. 72Our strategy of expanding into new lines of business, including in connection with emerging or frontier industries, exposes us to increased risks, uncertainties, and potential liabilitiesNew
6. 73We may face damage to our professional reputation if our services are not regarded as satisfactory or for other reasonsNew
7. 74Our failure to deal appropriately with conflicts of interest could damage our reputation and adversely affect our business
8. 75Our Insurance coverage may be inadequate to cover the risks facing the Company
9. 76We depend on third-party software licenses and the loss of any of our key licenses could adversely affect our ability to provide our brokerage services
10. 77If we fail to maintain effective internal control over financial reporting and disclosure controls and procedures in the future, we may not be able to accurately report our financial results, which could have an adverse effect on our business
11. 78The market price of our Common Stock may be volatile and may be affected by market conditions beyond our control
12. 79general economic conditions and slow or negative growth of related markets
13. 80Our Common Stock may be delisted, which may have a material adverse effect on the liquidity and value of our Common Stock

Risks Related to Our Business and Our Industry

1. 06Difficult market conditions have adversely affected our business in many ways and may continue to adversely affect our business in a manner which could materially reduce our revenues
2. 07A prolonged economic slowdown, volatility in the markets, a recession, and increasing interest rates could impair our investments and harm our operating results
3. 08We may experience write downs of financial instruments and other losses related to the volatile and illiquid market conditions
4. 09Although the Company recorded net income of $40.1 and $8.2 million for the years ended December 31, 2025 and 2024, respectively we may incur losses in future periods. If we are unable to finance future losses, those losses may have a significant effect on our liquidity as well as our ability to operate our business
5. 10We have experienced intense competition in our Capital Markets segment, which has resulted in significant strain on our administrative, operational and financial resources. These difficulties may continue in the future
6. 11Our gestation repo business serves a narrow market and is likely subject to highly volatile demand
7. 12Mortgage and U.S. Housing Market-Related Risks
8. 13Our Capital Markets segment depends significantly on a limited group of customers
9. 14Underwriting activities expose us to risks77% rewritten
10. 15Payment of severance could strain our cash flow
11. 16Our business will require a significant amount of cash, and if it is not available, our business and financial performance will be significantly harmed
12. 17Failure to obtain or maintain adequate capital and funding would adversely affect the growth and results of our operations and may, in turn, negatively affect the market price of our Common Stock
13. 18Our investments in the equity interests of SPACs and SPAC Sponsor Entities may expose us to increased risks and liabilities
14. 19Our investments in SPAC Sponsor Entities are highly speculative, subject to total loss, and completely illiquid prior to business combination
15. 20Our investments in post-business combination SPACs are carried at fair value but are subject to sale restrictions which could result in significant losses to our business43% rewritten
16. 21Our increasing involvement in digital-asset-related capital marketNew
17. 22If we are unable to manage the risks of international operations effectively, our business could be adversely affected
18. 23reduced protection for intellectual property rights; and22% rewritten
19. 24If we are unable to manage any of these risks effectively, our business could be adversely affected
20. 25The securities settlement process exposes us to risks that may adversely affect our business, financial condition and results of operations
21. 26We are exposed to the risk that third parties that are indebted to us will not perform their obligations
22. 27We are exposed to various risks related to margin requirements under repurchase agreements and securities financing arrangements and are highly dependent on our clearing relationships
23. 28We have market risk exposure from unmatched principal transactions entered into by our brokerage desks, which could result in substantial losses to us and adversely affect our financial condition and results of operations
24. 29Pricing and other competitive pressures may impair the revenues and profitability of our brokerage business
25. 30Increase in capital commitments in our trading business increases the potential for significant losses
26. 31Our principal trading and investments expose us to risk of loss
27. 32We use a portion of our own capital in a variety of principal investment activities, each of which involves risks of illiquidity, loss of principal and revaluation of assets. As of December 31, 2025, we had $57.3 million in other investments, at fair value
28. 33The historical returns of our funds and managed accounts may not be indicative of the future results of our funds and managed accounts
29. 34There is increasing regulatory supervision of alternative asset management companies
30. 35Some of our asset management clients generally may redeem their investments, which could reduce our asset management fee revenues
31. 36The investment management business is intensely competitive, which could have a material adverse impact on our business
32. 37the relative attractiveness of the types of investments that have been or will be made
33. 38other industry participants will from time to time seek to recruit our investment professionals and other employees away from us
34. 39Any agreement to indemnify a SPAC against certain claims could negatively affect our financial results
35. 40We may in the future make loans to the SPACs in which we sponsor, which may not be repaid, in which event our financial results could be adversely affected
36. 41If our risk management systems for our businesses are ineffective, we may be exposed to material unanticipated losses
37. 42We are highly dependent on information and communications systems. Systems failures could significantly disrupt our business, which may, in turn, negatively affect our operating results
38. 43The development and use of artificial intelligence presents risks and challenges that could adversely impact our business, financial condition, and results of operations
39. 44Failure to protect client data or prevent breaches of our information systems could expose us to liability or reputational damage
40. 45We are largely dependent on Pershing LLC to provide clearing services and margin financing51% rewritten
41. 46Our substantial level of indebtedness could adversely affect our financial health and ability to compete. In addition, our failure to satisfy the financial covenants in our debt agreements could result in a default and acceleration of repayment of the indebtedness thereunder
42. 47result in higher interest expense in the event of increases in interest rates since some of our borrowings are and will continue to be, at variable rates of interest
43. 48Accounting rules for certain of our transactions are highly complex and involve significant judgment and assumptions. Changes in accounting interpretations or assumptions could adversely impact our financial statements
44. 49We may change our investment strategy, hedging strategy, asset allocation and operational policies without our stockholders’ consent, which may result in riskier investments and adversely affect the market value of our Common Stock
45. 50Maintenance of our Investment Company Act exemption imposes limits on our operations, and loss of our Investment Company Act exemption would adversely affect our operations56% rewritten
46. 51The soundness of other financial institutions and intermediaries affects us100% rewritten
47. 52We operate in a highly regulated industry and may face restrictions on, and examination of, the way we conduct certain of our operations
48. 53client identification and anti-money laundering requirements
49. 54As a member of the financial services industry, we face substantial litigation and regulatory risks and substantial legal liability or significant regulatory action could have material adverse financial effects or cause significant reputational harm, either of which could seriously harm our business
50. 55The competitive pressures we face as a result of operating in highly competitive markets could have a material adverse effect on our business, financial condition, liquidity and results of operations
51. 56Employee misconduct or error, which can be difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and by subjecting us to significant legal liability and reputational harm
52. 57We receive financial instruments instead of cash as consideration for some of our services, which may be illiquid, and the price we ultimately realize may be materially lower than their current fair value