Upon the Closing, the Sponsor Entities held 375,000 shares of
SFT’s Class A Common Stock, par value $0.0001 per share (“SFT Class A Common Stock”), and 187,500 warrants (“SFT
Warrants”) to purchase an equal number of shares of SFT Class A Common Stock (such SFT Class A Common Stock and SFT Warrants,
collectively, the “Placement Securities”) as a result of the 375,000 placement units which the Sponsor Entities had
purchased in a private placement that occurred simultaneously with INSU’s initial public offering on March 22, 2019.
Further, upon the Closing, the Sponsor Entities collectively
held an additional 4,497,525 shares of SFT Class A Common Stock as a result of its previous purchase of founder shares of INSU
(collectively, the “Founder Shares,” and, together with the Placement Securities, the “Sponsor Shares”).
The Company currently consolidates the Sponsor Entities
and previously treated its investment in INSU as an equity method investment. Effective upon the Closing, the Company
has reclassified its equity method investment in INSU to other investments, at fair value and has adopted fair value
accounting for the investment in SFT, resulting in an amount of principal transaction revenue derived from the (i) the final
amount of Sponsor Shares retained by the Sponsor Entities; (ii) the trading share price of the SFT Class A Common Stock and
the SFT Warrants; and (iii) fair value discounts related to the share sale restrictions on the Sponsor Shares outlined
below. Upon recognition of the principal transaction revenue described above, the Company will record a non-controlling
interest expense or compensation expense related to the amount of Sponsor Shares distributable to the non-controlling
interest holders in the Sponsor Entities. If the non-controlling interest holder is an employee of the Company, the
expense will be recorded as compensation. Otherwise, the expense will be non-controlling interest expenses. The
Company currently expects that, upon the registration of the Sponsor Shares in accordance with the Amended and Restated
Registration Rights Agreement described below, (a) of the Placement Securities, 252,335 shares of SFT Class A Common Stock
and 126,500 SFT Warrants will be distributed to the non-controlling interest holders of the Sponsor Entities and, (b) of the
Founder Shares, 2,477,803 shares of SFT Class A Common Stock will be distributed to the non-controlling interest holders of
the Sponsor Entities. Immediately following these distributions, the Company expects to retain (i) of the Placement
Securities, 122,665 shares of SFT Class A Common Stock and 61,332 SFT Warrants, and (ii) of the Sponsor Shares, 2,019,722
shares of SFT Class A Common Stock.
Subject to certain limited exceptions, Placement Securities
held by IAS will not be transferable or salable until 30 days following the Closing. Of the Founder Shares held by the Sponsor
Entities, (a) 20% are freely transferable and salable, and (b) subject to certain limited exception, the remaining shares will
not be transferable or salable until the closing price of the SFT Class A Common Stock, for a period of 20 out of any 30 consecutive
trading days following the Closing, (a) exceeds $12.00 with respect to 20% of such shares, (b) exceeds $13.50 with respect to an
additional 20% of such shares, (c) exceeds $15.00 with respect to an additional 20% of such shares, and (d) exceeds $17.00 with
respect to an additional 20% of such shares.
Concurrently with the Closing, a subsidiary of the Company purchased
600,000 shares of SFT Class A Common Stock at a purchase price per share of $10.00 pursuant to a subscription agreement that such
subsidiary executed at the time of the execution of the Merger Agreement. The Company’s subsidiary currently expects that,
upon the registration of these 600,000 shares of SFT Class A Common Stock in accordance with the subscription agreement, the Company’s
subsidiary will distribute 350,000 of such shares of SFT Class A Common Stock to its minority interest holders and distribute the
remaining 250,000 of such shares of SFT Class A Common Stock to a wholly owned subsidiary of the Company.
At the Closing, the Sponsor Entities and SFT entered into a
letter agreement (the “Sponsor Letter Agreement”), pursuant to which the Sponsor Entities will receive certain SFT
board of directors observer rights. Pursuant to the Sponsor Letter Agreement, for so long as the Sponsor Entities, the Operating
LLC, or any of their respective affiliates (as such term is defined in Rule 405 of the Securities Act of 1933, as amended) continue
to hold shares representing at least two percent of the total voting power of shares entitled to vote in the election of directors
of SFT issued and outstanding, the Sponsor Entities will have the right to designate an individual to attend and observe SFT’s
board meetings.
In addition, at the Closing, the Sponsor Entities entered into
an amended and restated registration rights agreement (the “Amended and Restated Registration Rights Agreement”) with
SFT, Cantor Fitzgerald & Co., and certain other initial stockholders of SFT, requiring SFT to, among other things, file a resale
shelf registration statement on behalf of the stockholders promptly after the Closing. The Amended and Restated Registration Rights
Agreement will also provide certain demand rights and piggyback rights to the stockholders, subject to underwriter cutbacks and
issuer blackout periods.
Prior to the Closing, in March 2019, Daniel G. Cohen,
Lester R. Brafman and Joseph W. Pooler, Jr., purchased for $2,500, $2,500, and $300, respectively, interests in
Dioptra. Subsequent to the Closing, in respect of their ownership interests in Dioptra, Messrs. Cohen, Brafman and
Pooler were allocated from Dioptra 196,739, 196,739 and 29,117 shares of SFT Class A Common Stock, respectively. Of the
shares allocated to each of Messrs. Cohen, Brafman and Pooler, (a) 20% are freely transferable and salable, and (b) subject
to certain limited exception, the remaining shares will not be transferable or salable until the closing price of the SFT
Class A Common Stock, for a period of 20 out of any 30 consecutive trading days following the consummation of the Merger, (a)
exceeds $12.00 with respect to 20% of such shares, (b) exceeds $13.50 with respect to an additional 20% of such shares, (c)
exceeds $15.00 with respect to an additional 20% of such shares, and (d) exceeds $17.00 with respect to an additional 20% of
such shares. Mr. Cohen is the Chairman of the Board of Directors of the Company, Mr. Brafman is the Chief Executive Officer
of the Company, and Mr. Pooler is the Executive Vice President, Chief Financial Officer and Treasurer of the Company.
Forward Looking Statements
This Current Report on Form 8-K contains certain statements,
estimates, and forecasts with respect to future performance and events. These statements, estimates, and forecasts are “forward-looking statements.”
In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,”
“might,” “will,” “should,” “expect,” “intend,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,” “seek,”
or “continue” or the negatives thereof or variations thereon or similar terminology. All statements other than statements
of historical fact included in this communication are forward-looking statements and are based on various underlying
assumptions and expectations and are subject to known and unknown risks, uncertainties, and assumptions, and may include projections
of the Company’s future financial performance based on the Company’s growth strategies and anticipated trends in its
business. These statements are based on the Company’s current expectations and projections about future events. There are
important factors that could cause the Company’s actual results, level of activity, performance, or achievements to differ
materially from the results, level of activity, performance, or achievements expressed or implied in the forward-looking statements including,
but not limited to, those discussed under the heading “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition” in the Company’s filings with the Securities and Exchange Commission (the “SEC”),
which are available at the SEC’s website at www.sec.gov and the Company’s website at www.cohenandcompany.com/sec-filings.
Such risk factors include the following: (a) a decline in general economic conditions or the global financial markets, (b) losses
caused by financial or other problems experienced by third parties, (c) losses due to unidentified or unanticipated risks, (d)
a lack of liquidity, i.e., ready access to funds for use in the Company’s businesses, (e) the ability to attract and retain
personnel, (f) litigation and regulatory issues, (g) competitive pressure, (h) an inability to generate incremental income from
acquired businesses, (i) unanticipated market closures due to inclement weather or other disasters, (j) losses (whether realized
or unrealized) on the Company’s principal investments, (k) an inability to achieve projected integration synergies, and (l)
the possibility that the intended distributions to minority interest holders of the Sponsor Entities and the Company’s subsidiary
will not occur. As a result, there can be no assurance that the forward-looking statements included in this communication
will prove to be accurate or correct. In light of these risks, uncertainties, and assumptions, the future performance or events
described in the forward-looking statements in this communication might not occur. Accordingly, you should not rely upon
forward-looking statements as a prediction of actual results and we do not undertake any obligation to update any forward looking statements,
whether as a result of new information, future events, or otherwise.