8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Amendment No. 1

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 13, 2011

INSTITUTIONAL FINANCIAL MARKETS, INC.

(Exact name of registrant as specified in its charter)

Maryland	1-32026	16-1685692
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)
Cira Centre 2929 Arch Street, 17th Floor Philadelphia, Pennsylvania		19104
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (215) 701-9555

COHEN & COMPANY INC.

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE:

This Amendment No. 1 amends Item 9.01 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2011 by providing the financial statement information of JVB Financial Holdings, L.L.C. and the pro forma financial information required by Item 9.01 of Form 8-K with respect to the acquisition of JVB Financial Holdings, L.L.C. by IFMI, LLC (formerly Cohen Brothers, LLC), a majority owned subsidiary of the Registrant (the “Acquisition”).

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The audited consolidated statements of financial condition of JVB Financial Holdings, L.L.C. and Subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in members’ equity and cash flows, and the notes related thereto, are attached hereto as Exhibit 99.1.

The unaudited consolidated statements of financial condition of JVB Financial Holdings, L.L.C. and Subsidiaries as of September 30, 2010 and the related consolidated statements of operations, changes in members’ equity and cash flows, and the notes related thereto, are attached hereto as Exhibit 99.2.

(b) Pro forma financial information.

The unaudited pro forma condensed combined statement of operations of the Registrant for the nine months ended September 30, 2010 and the year ended December 31, 2009 and the unaudited pro forma condensed consolidated balance sheet of the Registrant as of September 30, 2010, and the notes related thereto, giving effect to the Acquisition are attached hereto as Exhibit 99.3.

(d) Exhibits.

Exhibit No.	Exhibit Description
23.1*	Consent of Sherb & Co., LLP, Independent Public Accounting Firm, regarding the financial statements of JVB Financial Holdings, L.L.C.
99.1*	Audited consolidated statements of financial condition of JVB Financial Holdings, L.L.C. and Subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in members’ equity and cash flows, and the notes related thereto.
99.2*	Unaudited consolidated statements of financial condition of JVB Financial Holdings, L.L.C. and Subsidiaries as of September 30, 2010 and the related consolidated statements of operations, changes in members’ equity and cash flows, and the notes related thereto.
99.3*	Unaudited pro forma condensed combined statement of operations of the Registrant for the nine months ended September 30, 2010 and the year ended December 31, 2009 and the unaudited pro forma condensed consolidated balance sheet of the Registrant as of September 30, 2010, and the notes related thereto.

* Filed electronically herewith.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INSTITUTIONAL FINANCIAL MARKETS, INC.
Date: February 4, 2011	By:	/s/ DOUGLAS LISTMAN
		Douglas Listman
		Chief Accounting Officer

3

EXHIBIT INDEX

Exhibit No.	Exhibit Description
23.1*	Consent of Sherb & Co., LLP, Independent Public Accounting Firm, regarding the financial statements of JVB Financial Holdings, L.L.C.
99.1*	Audited consolidated statements of financial condition of JVB Financial Holdings, L.L.C. and Subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in members’ equity and cash flows, and the notes related thereto.
99.2*	Unaudited consolidated statements of financial condition of JVB Financial Holdings, L.L.C. and Subsidiaries as of September 30, 2010 and the related consolidated statements of operations, changes in members’ equity and cash flows, and the notes related thereto.
99.3*	Unaudited pro forma condensed combined statement of operations of the Registrant for the nine months ended September 30, 2010 and the year ended December 31, 2009 and the unaudited pro forma condensed consolidated balance sheet of the Registrant as of September 30, 2010, and the notes related thereto.

* Filed electronically herewith.

4

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTING FIRM

The Board of Directors

Institutional Financial Markets, Inc.

We consent to the use of our report dated August 30, 2010 (except for note 13 as to which the date is September 13, 2010), with respect to the consolidated statements of financial condition of JVB Financial Holdings, LLC and Subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in members’ equity and cash flows for the years then ended, which are included in Institutional Financial Markets, Inc.’s Current Report (Form 8-K/A) dated February 3, 2011, filed with the Securities and Exchange Commission.

We hereby consent to the incorporation by reference of said reports in the Registration Statements of Institutional Financial Markets, Inc. (formerly Cohen & Company Inc.) on Form S-3 (File No.333-145417, effective October 2, 2007; and File No. 333-166385, effective May 24, 2010) and on Forms S-8 (File No. 333-140318, effective January 30, 2007; File No.333-143503, effective June 5, 2007; File No. 333-153211, effective August 27, 2008; File No. 333-166387, effective April 29, 2010; and File No. 333-166386, effective on April 29, 2010).

/s/ Sherb & Co., LLP

Boca Raton, Florida

Febraury 3, 2011

EX-99.1

EXHIBIT 99.1

JVB FINANCIAL HOLDINGS, LLC

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2009 and 2008

TABLE OF CONTENTS

Independent Auditor’s Report	1
Consolidated Financial Statements:
Consolidated Statements of Financial Condition	2
Consolidated Statements of Operations	3
Consolidated Statements of Changes in Members’ Equity	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6-12

INDEPENDENT AUDITOR’S REPORT

To the Board of the Members

JVB Financial Holdings, LLC and Subsidiaries

We have audited the accompanying consolidated statements of financial condition of JVB Financial Holdings, LLC and Subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in members’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of JVB Financial Holdings, LLC and Subsidiaries as of December 31, 2009 and 2008, and the results of its consolidated operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

	/s/ Sherb & Co., LLP
Boca Raton, Florida	Certified Public Accountants
August 30, 2010 (except for note 13 as to which the date is September 13, 2010)

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,

ASSETS
	2009		2008
Cash	$	132,693	$	58,607
Receivable from clearing organization, net		—		3,355,438
Marketable Securities, at market value		17,087,066		6,152,929
Other receivables		118,734		183,144
Prepaid expenses		305,224		192,556
Property and equipment, net		322,249		149,059
Clearing deposit and other deposits		172,162		139,030
Total assets	$	18,138,128	$	10,230,763
LIABILITIES AND MEMBERS’ EQUITY
Liabilities:
Securities sold, not yet purchased, at market value	$	5,250,826	$	2,976,504
Due to clearing organization, net		558,981		—
Commissions and wages payable		1,640,777		1,184,170
Accounts payable		12,053		7,457
Deferred income		44,739		—
Accrued expenses		592,955		475,966
Total liabilities		8,100,331		4,644,097
Members’ equity		10,037,797		5,586,666
Total liabilities and members’ equity	$	18,138,128	$	10,230,763

See accompanying notes to consolidated financial statements.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31,

	2009		2008
Revenues:
Commissions	$	12,807	$	23,616
Proprietary trading		25,390,191		13,249,556
Interest		1,506,058		1,860,539
Unrealized gain (loss) on marketable securities		690,232		(845,231	)
Other		31,234		62,047
Total revenues		27,630,522		14,350,527
Expenses:
Compensation and benefits		17,173,024		8,844,937
Clearing costs		654,543		510,357
Regulatory fees		137,294		55,741
Trading Platforms		919,403		452,469
Communication costs		980,282		529,598
Interest expense		1,127,705		1,344,031
Insurance cost		128,535		88,935
Professional fees		120,900		147,874
Depreciation		106,092		65,084
Rent		413,072		323,565
Other expenses		802,467		578,081
Total expenses		22,563,317		12,940,672
Net income	$	5,067,205	$	1,409,855

See accompanying notes to consolidated financial statements.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

YEARS ENDED DECEMBER 31,

	2009			2008
Balance, January 1,	$	5,586,666		$	4,481,298
Distributions to members		(1,178,574	)		(304,487	)
Capital contribution		562,500			—
Net income		5,067,205			1,409,855
Balance, December 31,	$	10,037,797		$	5,586,666

See accompanying notes to consolidated financial statements.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,

	2009			2008
Cash flows from operating activites:
Net income	$	5,067,205		$	1,409,855
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized (gain) loss on marketable securities		(690,232	)		845,231
Depreciation		107,011			74,670
Gain on disposal of fixed asset		—			(3,458	)
Changes in assets and liabilities:
(Increase) decrease in:
Receivable from clearing organization		3,355,438			(3,355,438	)
Prepaid expenses		(112,668	)		(114,852	)
Other deposits		(33,132	)		19,357
Other receivables		64,409			(166,822	)
Marketable securities		(7,969,583	)		4,004,376
Increase (decrease) in:
Commissions and wages payable		456,607			622,977
Payable to clearing organization		558,981			(3,158,599	)
Accounts payable		4,596			7,457
Deferred revenue		44,739			—
Accrued expenses		116,989			113,238
Net cash provided by operating activities		970,360			297,992
Cash flows from investing activites:
Purchase of property and equipment		(280,201	)		(28,867	)
Proceeds from sale of property and equipment		—			33,735
Net cash provided by (used in) investing activities		(280,201	)		4,868
Cash flows from financing activites:
Capital Contribution		562,500			—
Distributions to members		(1,178,573	)		(304,487	)
Net cash used in financing activities		(616,073	)		(304,487	)
Net increase (decrease) in cash		74,086			(1,627	)
Cash, beginning of year		58,607			60,234
Cash, end of year	$	132,693		$	58,607
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	1,127,705		$	1,344,024

See accompanying notes to financial statements.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008

NOTE 1 – DESCRIPTION OF BUSINESS

The accompanying consolidated financial statements represent those of JVB Financial Holdings, LLC, which is the holding company, and its wholly owned subsidiaries, JVB Financial Group, LLC, which is a registered broker-dealer, JVB Financial Services, LLC, which was organized in 2001 and has no business purpose to date, Atlantic Real Estate Advisory Service, LLC which was organized in 2009 and has no business purpose to date, and JVB Financial, Inc., which holds the operating leases for the office spaces, (the “Company”). The Company was organized under the laws of the state of Florida in June 2000.

The Company’s sole business activities are through JVB Financial Group, LLC, which is a broker-dealer registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). All customer accounts were cleared through and carried with Pershing LLC a subsidiary of the Bank of New York on a fully disclosed basis.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the parent company, JVB Financial Holdings, LLC and of its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain items in the 2008 financial statements have been reclassified to conform to the presentation in the 2009 financial statements. Such reclassifications did not have a material impact on the presentation of the overall financial statements.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method based on the estimated useful lives of the related assets, which range from three to eight years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the assets or the terms of the leases. When assets are retired or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized.

Revenue Recognition

Proprietary securities transactions are recorded on the trade date, as if they had settled. Profit and loss arising from all securities transactions entered into for the account and risk of the Company are recorded on a trade date basis.

The Company generates commission income from sales and purchases of bonds on behalf of customers. Commissions are recorded on a trade date basis.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Marketable Securities

Marketable securities held at year-end consist of trading securities, which are reported at fair value with unrealized gains or losses included in earnings.

Fair Value of Financial Instruments

We adopted the fair value guidelines issued by the FASB on July 1, 2007. The guidelines defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is a relevant measurement attribute.

Valuation techniques for fair value are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our best estimate, considering all relevant information. These valuation techniques involve some level of management estimation and judgment. The valuation process to determine fair value also includes making appropriate adjustments to the valuation model outputs to consider risk factors.

The fair value hierarchy of our inputs used in the determination of fair value for assets and liabilities during the current period consists of three levels. Level 1 inputs are comprised of unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs incorporate our own best estimate of what market participants would use in pricing the asset or liability at the measurement date where consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. If inputs used to measure an asset or liability fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the asset or liability. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

December 31, 2009
Description	Total Fair Value of Liability		Quoted Prices in Active Markets for Identical Assets (Level 1)
Marketable securities, at market value	$	17,087,066	$	17,087,066
Securities sold, not yet purchased, at market value	$	5,250,826	$	5,250,826

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008

Fair Value of Financial Instruments-(Continued)

December 31, 2008
Description	Total Fair Value of Liability		Quoted Prices in Active Markets for Identical Assets (Level 1)
Marketable securities, at market value	$	6,152,929	$	6,152,929
Securities sold, not yet purchased, at market value	$	2,976,504	$	2,976,504

Income Taxes

As a limited liability company, the Company is treated as a partnership for Federal and State income tax purposes. Under subchapter K of the Internal Revenue Code, each member is taxed separately on his distributive share of the Company’s income whether or not that income is actually distributed. Accordingly, no provision for income taxes has been recorded in the accompanying statement of operations for the year ended December 31, 2009 and 2008. However, one of its subsidiaries, JVB Financial Inc, is a corporation and is subject to state and federal income taxes on its income such amounts were not material in either 2009 or 2008.

Recent Accounting Pronouncements

In January 2010, the FASB issued guidance on fair value measurements and disclosure. This guidance amends the fair value measurements and disclosures by improving the disclosure of fair value measurements. We have adopted the Codification in the period ending March 31, 2010. The adoption of the Codification did not result in any change in our significant accounting policies.

Effective for interim and annual periods ending after September 15, 2009, the FASB Accounting Standards Codification (the “Codification”) is the single source of authoritative literature of U.S. generally accepted accounting principles (“GAAP”). The Codification consolidates all authoritative accounting literature into one internet-based research tool, which supersedes all pre-existing accounting and reporting standards, excluding separate rules and other interpretive guidance released by the SEC. New accounting guidance is now issued in the form of Accounting Standards Updates, which update the Codification. We have adopted the Codification in the period ending September 30, 2009. The adoption of the Codification did not result in any change in our significant accounting policies.

In August 2009, the FASB issued guidance on measuring liabilities at fair value. This guidance amends the fair value measurements and disclosures by providing additional guidance clarifying the measurement of liabilities at fair value. The adoption of the new accounting guidance did not have a significant impact on our consolidated financial statements.

All other new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008

NOTE 3 – RECEIVABLE FROM AND PAYABLE TO CLEARING ORGANIZATIONS

The Company clears all of its proprietary and customer securities transactions through another broker-dealer on a fully disclosed basis. At no time is the Company in possession of customer funds.

The Company has an $11,348,077 and $7,292,095 receivable from their clearing organization at December 31, 2009 and 2008 which consists primarily of the Company’s trading profits and net commissions due from customer trades.

The Company has an $11,907,058 and $3,936,657 payable to their clearing organization at December 31, 2009 and 2008 which includes amounts due on cash and margin transactions and is collateralized by securities owned by the Company.

The Company’s clearing organization nets the receivable and payable, hence carrying either an amount payable to the Company or amount receivable from the Company. At December 31, 2009 and 2008 the Company had a net payable due and a net receivable from this clearing organization of $558,981 and $3,355,438.

NOTE 4 – MARKETABLE SECURITIES

Marketable securities, as shown in the accompanying statement of financial condition, consist primarily of federal, state and municipal government obligations. Their cost and estimated market value at December 31, 2009 and 2008 are as follows:

	December 31, 2009
	Owned			Securities sold, not yet purchased
Trading securities:
Cost	$	17,141,529		$	5,229,266
Unrealized (loss) gain		(54,463	)		21,560
Market value	$	17,087,066		$	5,250,826

	December 31, 2008
	Owned			Securities sold, not yet purchased
Trading securities:
Cost	$	6,762,448		$	2,819,768
Unrealized (loss) gain		(609,519	)		156,736
Market value	$	6,152,929		$	2,976,504

The Company included unrealized gains and losses in the amount of $690,232 and ($845,231) in earnings for the year ended December 31, 2009 and 2008.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008

NOTE 5 – OTHER RECEIVABLES

Other receivables consist of the following at December 31, 2009 and 2008:

	December 31, 2009		December 31, 2008
Short-term loans	$	70,538	$	92,029
Long-term loans		23,000		91,115
Health Insurance Refund		25,196
Total	$	118,734	$	183,144

NOTE 6 – PROPERTY & EQUIPMENT

Fixed assets as of December 31, 2009 and 2008 consist of the following:

	December 31, 2009			December 31, 2008
Computers	$	393,471		$	289,966
Equipment		64,820			64,820
Furniture and fixtures		172,283			113,197
Leasehold improvements		125,097			37,240
Software licensing		29,603			29,603
		785,274			534,826
Less accumulated depreciation		(463,025	)		(385,767	)
Fixed asset, net	$	322,249		$	149,059

Depreciation for the years ended December 31, 2009 and 2008 was $107,011 and $74,670.

NOTE 7 – CONCENTRATIONS OF CREDIT RISK

The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

The Company maintains its cash in bank accounts at high credit quality financial institutions. The balances at times may exceed federally insured limits.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008

NOTE 8 – NET CAPITAL REQUIREMENTS

The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The Company’s ratio of aggregate indebtedness to net capital computed in accordance with Rule 15c3-1 was 0.33 to 1.

NOTE 9 – FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheet for cash, marketable securities, receivables, prepaid expenses, deposits and payables approximate fair value based on the short-term maturity of these instruments.

NOTE 10 – RETIREMENT PLAN

The Company maintains a defined contribution plan covering substantially all employees of the Company. Employees who have attained age eighteen and have completed ninety days of service are eligible to become a participant in the plan. The plan is subject to the provisions of the Employment Retirement Income Security Act of 1974 (ERISA). The Plan has an agreement with a company to act as investment manager and invest the Plan’s assets in various types of funds. Participants can elect to have a percentage of their compensation contributed to the Plan. The Company may contribute a matching contribution to the plan for each participant equal to a percentage of the elective contributions made by the participants. Pension contribution expense was $358,302 and $320,298 for the year ended December 31, 2009 and 2008.

NOTE 11 – ACCRUED EXPENSES

	December 31, 2009		December 31, 2008
Accrued pension	$	359,238	$	317,782
Accrued payroll tax		1,812		600
Accrued other		231,905		157,584
Total Accrued Expenses	$	592,955	$	475,966

NOTE 12 – COMMITMENTS

The Company leases certain facilities and equipment for administrative purposes. Future minimum rental payments required under long-term noncancelable operating leases at the year ended December 31, 2009 were as follows:

2010	$	444,274
2011		295,056
2012		135,715
2013		3,994
Total	$	879,039

Total rental expenses for fiscal 2009 and 2008 were $413,072 and $323,565, respectively.

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JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008

NOTE 13 – SUBSEQUENT EVENTS

On September 13, 2010 the Company entered into a definitive agreement to sell 100% of the outstanding units of the Company to Cohen Brothers, LLC, a majority-owned subsidiary of Cohen & Company Inc. (AMEX:COHN), a leading investment firm specializing in Credit-related fixed income investments. The purchase price is estimated to be $16,631,000 not including an authorized distribution of $5,000,000 to members prior to closing. The total consideration will be adjusted on a dollar-for-dollar basis if the approved distribution is not made by the Company prior to the Closing Date and to the extent that the Final Tangible Net Worth differs from the Estimated Tangible Net Worth. Also included in the consideration is a holdback amount of $384,000 for certain performance goals by the Company.

On September 8, 2010 our Board of Members approved a distribution to members for $400,000 to be paid on September 13, 2010.

The Company has evaluated subsequent events through October 18, 2010, which is the date the financial statements were issued, and has concluded that other than the aforementioned events no other events or transactions took place which would require additional disclosure herein.

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EX-99.2

Exhibit 99.2

JVB FINANCIAL HOLDINGS, LLC

AND SUBSIDIARIES

CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

SEPTEMBER 30, 2010

TABLE OF CONTENTS

Consolidated Unaudited Interim Financial Statements:
Consolidated Statements of Financial Condition	1
Consolidated Statements of Operations	2
Consolidated Statements of Changes in Members’ Equity	3
Consolidated Statements of Cash Flows	4
Notes to Consolidated Unaudited Interim Financial Statements	5-8

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED UNAUDITED STATEMENTS OF FINANCIAL CONDITION

ASSETS

	September 30, 2010 (Unaudited)		December 31, 2009
Assets:
Cash	$	184,389	$	132,693
Marketable Securities, at market value		57,745,190		17,087,066
Other receivables		66,513		118,734
Prepaid expenses		450,731		305,224
Property and equipment, net		281,704		322,249
Clearing deposit and other deposits		162,766		172,162
Total assets	$	58,891,293	$	18,138,128

LIABILITIES AND MEMBERS’ EQUITY

Liabilities:
Securities sold, not yet purchased, at market value	$	15,065,050	$	5,250,826
Due to clearing organization, net		31,780,458		558,981
Commissions and wages payable		1,606,851		1,640,777
Accounts payable		143,717		12,053
Deferred income		7,852		44,739
Accrued expenses		353,099		592,955
Total liabilities		48,957,027		8,100,331
Members’ equity		9,934,266		10,037,797
Total liabilities and members’ equity	$	58,891,293	$	18,138,128

See accompanying notes to consolidated financial statements.

1

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS

	For the nine months ended
	September 30, 2010 (unaudited)		September 30, 2009 (unaudited)
Revenues:
Proprietary trading		18,742,149		19,816,091
Interest		1,681,714		889,656
Unrealized gain on marketable securities		50,453		275,724
Other		75,635		30,229
Total revenues		20,549,951		21,011,700
Expenses:
Compensation and benefits		12,720,993		12,575,387
Clearing costs		717,784		543,578
Regulatory fees		99,670		33,557
Trading Platforms		680,499		722,462
Communication costs		1,129,021		565,978
Interest expense		1,293,660		661,414
Insurance cost		99,782		87,408
Professional fees		353,153		95,247
Depreciation		94,208		46,388
Rent		379,436		285,115
Other expenses		1,229,536		812,230
Total expenses		18,797,742		16,428,764
Net income	$	1,752,209	$	4,582,936

See accompanying notes to consolidated financial statements.

2

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED UNAUDITED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

NINE MONTHS ENDED SEPTEMBER 30

	2010
Balance, January 1,	$	10,037,797
Distributions to members		(1,497,205	)
Capital redemption		(358,535	)
Net income		1,752,209
Balance, September 30,	$	9,934,266

See accompanying notes to consolidated financial statements.

3

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

	For the nine months ended
	September 30, 2010			September 30, 2009
Cash flows from operating activities:
Net income	$	1,752,209			4,582,936
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		94,208			46,388
Changes in assets and liabilities:
(Increase) decrease in:
Prepaid expenses		(145,507	)		16,981
Clearing deposits and other deposits		9,396			(66,081	)
Other receivables		52,221			(174,846	)
Marketable securities, at market value		(40,658,124	)		(34,149,976	)
Increase (decrease) in:
Commissions and wages payable		(33,926	)		466,314
Due to clearing organization, net		31,221,477			6,236,067
Securities sold, not yet purchased, at market value		9,814,224			23,793,872
Accounts payable		131,664			4,096
Deferred income		(36,887	)		—
Accrued expenses		(239,856	)		(140,032	)
Net cash provided by operating activities		1,961,099			615,719
Cash flows from investing activities:
Purchase of property and equipment, net		(53,663	)		(200,708	)
Net cash used in investing activities		(53,663	)		(200,708	)
Cash flows from financing activities:
Capital Contribution / (Redemption)		(358,535	)		562,500
Distributions to members		(1,497,205	)		(775,241	)
Net cash used in financing activities		(1,855,740	)		(212,741	)
Net increase (decrease) in cash		51,696			202,270
Cash, beginning of year		132,693			58,607
Cash, end of year	$	184,389			260,877
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	1,681,714			889,656

See accompanying notes to financial statements.

4

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

The accompanying consolidated financial statements represent those of JVB Financial Holdings, LLC, which is the holding company, and its wholly owned subsidiaries, JVB Financial Group, LLC, which is a registered broker-dealer, JVB Financial Services, LLC, which was organized in 2001 and has no business purpose to date, Atlantic Real Estate Advisory Service, LLC which was organized in 2009 and has no business purpose to date, and JVB Financial, Inc., which holds the operating leases for the office spaces, (the “Company”). The Company was organized under the laws of the state of Florida in June 2000.

The Company’s sole business activities are through JVB Financial Group, LLC, which is a broker-dealer registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). All customer accounts were cleared through and carried with Pershing LLC a subsidiary of the Bank of New York on a fully disclosed basis.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the parent company, JVB Financial Holdings, LLC and of its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.

Revenue Recognition

Proprietary securities transactions are recorded on the trade date, as if they had settled. Profit and loss arising from all securities transactions entered into for the account and risk of the Company are recorded on a trade date basis.

The Company generates commission income from sales and purchases of bonds on behalf of customers. Commissions are recorded on a trade date basis.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Marketable Securities

Marketable securities held as of the balance sheet dates consist of trading securities, which are reported at fair value with unrealized gains or losses included in earnings.

Fair Value of Financial Instruments

We adopted the fair value guidelines issued by the FASB on July 1, 2007. The guidelines defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is a relevant measurement attribute.

5

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

Valuation techniques for fair value are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our best estimate, considering all relevant information. These valuation techniques involve some level of management estimation and judgment. The valuation process to determine fair value also includes making appropriate adjustments to the valuation model outputs to consider risk factors.

The fair value hierarchy of our inputs used in the determination of fair value for assets and liabilities during the current period consists of three levels. Level 1 inputs are comprised of unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs incorporate our own best estimate of what market participants would use in pricing the asset or liability at the measurement date where consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. If inputs used to measure an asset or liability fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the asset or liability. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

September 30, 2010

Description	Total Fair Value		Quoted Prices in Active Markets  for Identical Assets (Level 1)
Marketable securities, at market value	$	57,745,190	$	57,745,190
Securities sold, not yet purchased, at market value	$	15,065,050	$	15,065,050

December 31, 2009

Description	Total Fair Value		Quoted Prices in Active Markets  for Identical Assets (Level 1)
Marketable securities, at market value	$	17,087,066	$	17,087,066
Securities sold, not yet purchased, at market value	$	5,250,826	$	5,250,826

Recent Accounting Pronouncements

In January 2010, the FASB issued guidance on fair value measurements and disclosure. This guidance amends the fair value measurements and disclosures by improving the disclosure of fair value measurements. We have adopted the Codification in the period ending March 31, 2010. The adoption of the Codification did not result in any change in our significant accounting policies.

6

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

Effective for interim and annual periods ending after September 15, 2009, the FASB Accounting Standards Codification (the “Codification”) is the single source of authoritative literature of U.S. generally accepted accounting principles (“GAAP”). The Codification consolidates all authoritative accounting literature into one internet-based research tool, which supersedes all pre-existing accounting and reporting standards, excluding separate rules and other interpretive guidance released by the SEC. New accounting guidance is now issued in the form of Accounting Standards Updates, which update the Codification. We have adopted the Codification in the period ending September 30, 2009. The adoption of the Codification did not result in any change in our significant accounting policies.

NOTE 3 – PAYABLE TO CLEARING ORGANIZATIONS

The Company clears all of its proprietary and customer securities transactions through another broker-dealer on a fully disclosed basis. At no time is the Company in possession of customer funds.

The payable to clearing organizations represents the net amounts due to the Company’s clearing broker which is comprised of trading profits owed to the Company net of margin payable and net payables from unsettled trades.

NOTE 4 – MARKETABLE SECURITIES

Marketable securities, as shown in the accompanying statements of financial condition, consist primarily of federal, state and municipal government obligations. Their cost and estimated market value at September 30, 2010 and December 31, 2009 are as follows:

	September 30, 2010
	Owned			Securities sold, not yet purchased
Trading securities:
Cost	$	57,583,741		$	14,878,031
Unrealized (loss) gain		161,449			187,019
Market value	$	57,745,190		$	15,065,050
	December 31, 2009
	Owned			Securities sold, not yet purchased
Trading securities:
Cost	$	17,141,529		$	5,229,266
Unrealized (loss) gain		(54,463	)		21,560
Market value	$	17,087,066		$	5,250,826

7

JVB FINANCIAL HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

NOTE 5 – CONCENTRATIONS OF CREDIT RISK

The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company’s policy to review, as necessary, the credit standing of each counterparty.

The Company maintains its cash in bank accounts at high credit quality financial institutions. The balances at times may exceed federally insured limits.

NOTE 6 – NET CAPITAL REQUIREMENTS

The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The Company’s ratio of aggregate indebtedness to net capital computed in accordance with Rule 15c3-1 was 6.46 to 1 as of September 30, 2010.

NOTE 7 – SALE

On January 13, 2011, the Company and IFMI, LLC completed the previously disclosed business combination with Institutional Financial Markets, Inc. (“IFMI”), formerly known as Cohen & Company Inc.. The Company will continue operations as a wholly owned subsidiary of IFMI, LLC, the main operating subsidiary of IFMI.

NOTE 8 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through February 4, 2010, which is the date the financial statements were issued, and has concluded that other than the aforementioned events no other events or transactions took place which would require additional disclosure herein.

8

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Unless otherwise noted or as the context requires: “the Company,” “Institutional Financial Markets”, “we”, “us”, “IFMI” and “our” refer to Institutional Financial Markets, Inc. and it subsidiaries (formerly known as Cohen & Company Inc.); “IFMILLC,” refers to IFMI, LLC (formerly known as Cohen Brothers, LLC), the main operating subsidiary of the Company; “JVB” refers to JVB Financial Holdings, L.L.C. and its subsidiaries; and “Business Combination” refers to the January 13, 2011 closing of the acquisition of all of the outstanding membership units of JVB by IFMILLC.

On September 14, 2010, the Company and IFMILLC entered into a Purchase and Contribution Agreement, referred to herein, as amended, as the “Purchase Agreement,” with JVB, the sellers listed therein, or the “Sellers,” and certain employees of JVB, or the “Management Employees.” On January 13, 2011, the Company and IFMILLC completed the Business Combination, pursuant to which the Sellers sold all of the outstanding equity interests in JVB to IFMILLC and JVB became a wholly owned subsidiary of IFMILLC. The purchase price consisted of $5.6 million in cash, 313,051 shares of IFMI common stock and 559,020 restricted membership units in IFMILLC, or “Restricted Units,” plus a cash amount equal to JVB’s tangible net worth. In addition, the Company agreed to pay $2.5 million to the Management Employees in three equal installments, one on each of the first three anniversaries of the closing date of the Business Combination, contingent upon each individual’s continued employment at each payment date. Upon the closing of the Business Combination, an escrow of $484,000 was established for the payment of any adjustments to the purchase price based on the final tangible net worth of JVB as of the closing of the transaction and particular indemnities, and $384,000 was withheld by IFMILLC for payment to the Sellers only if a specific revenue target is achieved at the end of the first year of operation following the closing of the transaction. All of the Restricted Units were delivered to Management Employees and will vest in three equal installments on each of the first three anniversaries of the closing date of the Business Combination, subject to the terms and conditions contained in each employee’s employment agreement. Once vested, the Restricted Units may be redeemed for cash or, at the Company’s option, shares of the common stock of the Company.

The following unaudited pro forma condensed combined statements give effect to the Business Combination as if it had been completed as of September 30, 2010 for balance sheet purposes, and at the beginning of the periods presented for statements of operations purposes. We have adjusted the historical consolidated financial statements of both IFMI and JVB to give effect to pro forma events that are (1) directly attributable to the Business Combination, (2) factually supportable, and (3) with respect to the statement of operations, expected to have a continuing impact on the combined results. The manner in which this pro forma financial information is calculated may differ from similarly titled measures reported by other companies.

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred if the Business Combination had been completed during the period or as of the dates for which the pro forma data is presented, nor is it necessarily indicative of future operating results or the financial position of the combined company. These statements do not give effect to (1) IFMI or JVB’s results of operations or other transactions or developments since September 30, 2010, (2) the impact of possible enhancements, expense efficiencies or synergies expected to result from the Business Combination, or (3) the effects of events or developments that may occur subsequent to the Business Combination. The forgoing matters could cause both the combined company’s pro forma historical financial position and results of operations, and the combined company’s actual future financial position and results of operations, to differ materially from those presented in the accompanying unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined balance sheet and statement of operations and accompanying notes should be read in conjunction with the historical consolidated financial statements of IFMI and JVB. JVB’s audited financial statements for 2009 and 2008 are filed as an exhibit to the Form 8-K of which this exhibit is a part. IFMI’s historical audited financial statements and interim unaudited quarterly financial statements are included on Forms 10-K and Forms 10-Q filed with the Securities and Exchange Commission and are available via IFMI’s website at www.ifmi.com.

1

Institutional Financial Markets, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2010

(In thousands, except share amounts)

	IFMI			JVB		Adjustments			Pro Forma
Cash and cash equivalents	$	43,069		$	184	$	(15,196	) (A)	$	28,057
Restricted cash		3,314			100					3,414
Receivables from:
Brokers, dealers, and clearing agencies		4,423								4,423
Related parties		1,032								1,032
Other receivables		4,809								4,809
Investments - trading		168,376			57,745					226,121
Other investments, at fair value		47,846								47,846
Receivables under resale agreements		9,606								9,606
Goodwill		3,944					6,953	(B)		10,897
Other assets		22,069			862		166	(C)		23,097
Total assets	$	308,488		$	58,891	$	(8,077	)	$	359,302
Payables to:
Brokers, dealers, and clearing agencies	$	35,595		$	31,780				$	67,375
Related parties		38								38
Accounts payable and other liabilities		15,859			2,111		326	(D)		18,296
Accrued compensation		16,978								16,978
Trading securities sold, not yet purchased		86,504			15,066					101,570
Securities sold under agreement to repurchase		7,669								7,669
Deferred income taxes		10,569								10,569
Debt		48,431								48,431
Total liabilities		221,643			48,957		326			270,926
Common stock		10					1	(E)		11
Additional paid in capital		59,611					1,530	(E)		61,141
Retained earnings		4,285								4,285
Accumulated comprehensive income		(1,185	)							(1,185	)
Treasury stock		(328	)							(328	)
Members’ equity		—			9,934		(9,934	) (F)		—
Total controlling interest		62,393			9,934		(8,403	)		63,924
Non controlling interest		24,452								24,452
Total stockholders’ equity		86,845			9,934		(8,403	)		88,376
Total liabilities and equity	$	308,488		$	58,891	$	(8,077	)	$	359,302
IFMI Shares		10,478,682					313,051			10,791,733

See notes to the unaudited pro forma condensed combined financial statements

2

Institutional Financial Markets, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2010

(In thousands, except share and per share amounts)

	IFMI			JVB		Adjustments			Pro Forma
Revenues
Net trading	$	56,483			20,550				$	77,033
Asset management		19,050								19,050
New issue and advisory		2,103								2,103
Principal transactions and other income		23,012								23,012
Total revenues		100,648			20,550		—			121,198
Operating expenses
Compensation and benefits		64,190			12,721		1,304	(G)		78,215
Business development, occupancy, equipment		4,113								4,113
Professional services and other operating		20,043			6,077		(242	) (H)		25,878
Depreciation and amortization		1,899								1,899
Impairment of intangible asset		5,607								5,607
Total operating expenses		95,852			18,798		1,062			115,712
Operating income / (loss)		4,796			1,752		(1,062	)		5,486
Non operating income / (expense)
Gain on repurchase of debt		2,518								2,518
Interest expense		(6,167	)							(6,167	)
Gain on sale of management contracts		971								971
Income / (loss) from equity method affiliates		6,004								6,004
Income / (loss) before income taxes		8,122			1,752		(1,062	)		8,812
Income taxes		501					25	(I)		526
Net income (loss)		7,621			1,752		(1,087	)		8,286
Less: Net (loss) income attributable to the noncontrolling interest		2,645					174	(J)		2,819
Net loss attributable to IFMI	$	4,976		$	1,752	$	(1,261	)	$	5,467
Earnings (loss) per share-basic:
Basic earnings (loss) per share/unit	$	0.48							$	0.51
Weighted average shares/units outstanding-Basic		10,391,679					313,051	(K)		10,704,730
Earnings (loss) per share-diluted:
Diluted earnings (loss) per share unit	$	0.48							$	0.51
Weighted average shares/units outstanding-Diluted		15,675,235					477,116	(K)		16,152,351

See notes to the unaudited pro forma condensed combined financial statements

3

Institutional Financial Markets, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2009

(In thousands, except share and per share mounts)

	IFMI			JVB		Adjustments			Pro Forma
Revenues
Net trading	$	44,165		$	26,503				$	70,668
Asset management		31,148								31,148
New issue and advisory		1,816								1,816
Principal transactions and other income		6,957								6,957
Total revenues		84,086			26,503		—			110,589
Operating expenses
Compensation and benefits		70,519			17,173		1,739	(L)		89,431
Business development, occupancy, equipment		5,469			1,523					6,992
Professional services and other operating		16,666			2,634					19,300
Depreciation and amortization		2,543			106					2,649
Total operating expenses		95,197			21,436		1,739			118,372
Operating income / (loss)		(11,111	)		5,067		(1,739	)		(7,783	)
Non operating income / (expense)
Interest expense		(4,974	)							(4,974	)
Gain on sale of management contracts		7,746								7,746
Income / (loss) from equity method affiliates		(3,455	)							(3,455	)
Income / (loss) before income taxes		(11,794	)		5,067		(1,739	)		(8,466	)
Income taxes		9						(M)		9
Net income (loss)		(11,803	)		5,067		(1,739	)		(8,475	)
Less: Net (loss) income attributable to the noncontrolling interest		(98	)				(46	) (N)		(144	)
Net loss attributable to IFMI	$	(11,705	)	$	5,067	$	(1,693	)	$	(8,331	)
Earnings (loss) per share/unit-basic:
Basic earnings (loss) per share/unit	$	(1.21	)						$	(0.84	)
Weighted average shares/units outstanding-Basic		9,639,475					313,051	(O)		9,952,526
Earnings (loss) per share/unit-diluted:
Diluted earnings (loss) per share unit	$	(1.21	)						$	(0.84	)
Weighted average shares/units outstanding-Diluted		9,639,475					313,051	(O)		9,952,526

See notes to unaudited pro forma condensed combined financial statements

4

Institutional Financial Markets, Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(Dollars in thousands, except share and per share data)

Note 1 – Basis of Presentation

The unaudited pro forma condensed combined statements give effect to the Business Combination in a transaction to be accounted for as a purchase business combination under FASB Accounting Standards Codification (“ASC”) 805 “Business Combinations” and as if the acquisition of JVB had been completed as of September 30, 2010 for balance sheet purposes, and at the beginning of the periods presented for statements of operations purposes. IFMI is the acquirer for accounting purposes. IFMI will record the acquisition of JVB’s assets and liabilities as of the effective date of the Business Combination.

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred if the Business Combination had been completed during the period or as of the dates for which the pro forma data is presented, nor is it necessarily indicative of future operating results or the financial position of the combined company.

The purchase price of JVB has been allocated to the assets acquired and liabilities assumed based upon management’s preliminary estimates of their respective fair values as of the assumed date of acquisition as described above. The purchase price allocation reflected in the unaudited pro forma condensed combined financial statements is preliminary, and the final allocation will be based upon the fair values of the actual assets and liabilities of JVB as of the effective date of the combination. Accordingly, the actual purchase price adjustments may differ materially from those presented in these statements.

Certain reclassifications have been made to the JVB historical balances in the unaudited pro forma condensed combined financial statements in order to conform to IFMI’s presentation. IFMI has completed a preliminary review of JVB’s accounting policies but the review is ongoing. As such, additional reclassifications or pro forma adjustments may be identified.

Note 2 – Purchase Price of JVB

For purposes of preparing the accompanying unaudited pro forma condensed combined balance sheet, the purchase price was calculated as follows:

Calculation of Purchase Price

Equity consideration (i)
Shares of IFMI issued		313,051
Assumed price (ii)	$	4.89
Value of shares			$	1,531
Cash Consideration (iii)				15,196
Contingent payments due (iv)				326
Total purchase price			$	17,053

(i) Excludes 559,020 Restricted Units issued to certain JVB sellers that will remain employees of JVB. These Restricted Units vest over a three-year period and will be treated as compensation for future service and not part of the purchase price.

5

Institutional Financial Markets, Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(Dollars in thousands, except share and per share data)

(ii) The price used is the closing price of IFMI common stock on January 13, 2011.

(iii) Excludes $2,482 to be paid over time to certain JVB sellers that will remain employees of JVB. The amount is contingent upon the individuals remaining employees. It is earned ratably over a three-year period. If the employee terminates employment during the three-year period, any unearned portion is refundable to the Company. It will be treated as compensation for future services and not part of the purchase price.

(iv) See note 3-(D) below

The following represents the identifiable assets and liabilities acquired and the values assigned as of September 30, 2010:

Values Assigned to Identifiable Net Assets Acquired

	JVB Recorded Value			Purchase Accounting Adjustments		Purchase Accounting Value
Cash and cash equivalents	$	184				$	184
Restricted cash		100					100
Investments - trading		57,745					57,745
Other assets (i)		862			166		1,028
Payables to Brokers, dealers, and clearing agencies		(31,780	)				(31,780	)
Accounts payable and other liabilities		(2,111	)				(2,111	)
Trading securities sold, not yet purchased		(15,066	)				(15,066	)
Fair Value of net assets acquired						$	10,100

(i) See note 3(c) below

Note 3 – Pro Forma Adjustments

Pro forma adjustments for the Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2010 include:

(A) Cash consideration paid to JVB sellers. See note 2.

(B) Goodwill. Goodwill is calculated as follows:

Calculation of Goodwill

Purchase price	$	17,053
Fair value of net assets acquired		(10,100	)
Goodwill	$	6,953

(C) $166 which represents estimated value of broker-dealer license. The $166 value of JVB’s broker-dealer license is an initial estimate. This value will be finalized in the future. Any adjustment to this value in the final purchase accounting will result in an offsetting adjustment to the amount assigned to goodwill.

(D) Represents contingent payments due to JVB sellers based on performance targets. A specific business unit of JVB is required to earn a minimum amount of revenue within 12 months of the Business Combination in order for this amount to be due to the owners of JVB. If that threshold is met, the owners of JVB will receive an additional payment of $384. The Company will treat this arrangement as contingent consideration under ASC 805. Accordingly, the Company should determine the fair value of this arrangement and record a liability equal to the fair value as of the date of the Business Combination. The Company has not yet finalized its determination of fair value, but included its preliminary determination of $326. The Company will carry this liability at fair value and any future adjustments in fair value will be recognized in earnings.

6

Institutional Financial Markets, Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(Dollars in thousands, except share and per share data)

(E) Value of IFMI common stock issued to JVB sellers. See note 2.

(F) Elimination of the historical net worth of JVB.

Pro forma adjustments for the Unaudited Pro Forma Condensed Combined Statement of Operations for the Nine Months Ended September 30, 2010 include:

(G) (i) Cash compensation to be paid to certain JVB sellers that will remain employees; and (ii) equity based compensation expense relating to Restricted Units issued to certain JVB Sellers that will remain employees calculated as follows:

Calculation of Compensation Adjustment

Cash compensation to be paid	$	2,482
Required service period in months		36
Monthly expense		69
Months in period		9
Compensation recognized			$	620
Cohen Brothers units issued		559,020
Assumed price		4.89
Total value of issuance		2,734
Required service period in months		36
Monthly expense		76
Months in period		9
Compensation recognized				684
Total Adjustment			$	1,304

Note: Vested Restricted Units may be convertible on a one for one basis to IFMI shares of common stock at the Company’s option. Therefore, the per unit value of IFMILLC membership units used for equity compensation expense equals the per share market price of IFMI shares of common stock.

(H) Adjust to professional services and other operating to eliminate legal fees related to the Business Combination.

(I) Adjustment to income taxes calculated using the outstanding income tax provision rate of IFMILLC and the Company as of September 30, 2010 and applying it to the JVB income and adjustments included in the unaudited pro forma condensed combined statement of operations.

(J) As part of the Business Combination and the issuance by IFMI of 313,051 shares of common stock to the JVB sellers, IFMILLC has agreed to issue to IFMI an additional 313,051 membership units of IFMILLC. This adjustment represents adjustment to non-controlling interest as result of applying JVB income and adjustments as well as the additional IFMILLC membership units issued to IFMI.

7

Institutional Financial Markets, Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(Dollars in thousands, except share and per share data)

(K) Pro forma weighted average shares of common stock outstanding and earnings per share are calculated as follows:

Computation of Weighted Average Shares

Basic
Actual weighted average shares - basic		10,391,679
IFMI shares issued to JVB Sellers		313,051
Pro Forma weighted average shares - basic		10,704,730
Diluted
Pro Forma weighted average shares - basic	10,704,730
IFMILLC membership units exchangeable into IFMI shares	5,283,556
		15,988,286
Dilutive effective of non-participating securities		164,065
Pro Forma weighted average shares - fully diluted		16,152,351

Note: The pro forma adjustment of 477,116 to diluted shares of common stock outstanding represents the 313,051 adjustment to basic plus the additional adjustment of 164,065 for the dilutive effect of non-participating securities.

Computation of Pro Forma Earnings per Share

Basic
Net Income attributable to IFMI	$	5,467
Pro Forma weighted average shares - basic		10,704,730
Basic EPS	$	0.51
Diluted
Net Income attributable to IFMI		5,467
Add: non controlling interest attributable to IFMILLC units convertible into IFMI shares		2,819
Add / (deduct): adjustment to income tax expense		(109	)
Enterprise net income		8,177
Pro Forma weighted average shares - fully diluted		16,152,351
Diluted EPS	$	0.51

8

Institutional Financial Markets, Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(Dollars in thousands, except share and per share data)

Pro forma adjustments for the Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2009 include:

(L) (i) Amortization of prepaid compensation paid to certain JVB sellers that will remain employees; and (ii) equity based compensation expense relating to Restricted Units issued to certain JVB sellers that will remain employees, calculated as follows:

Calculation of Compensation Adjustment

Cash compensation to be paid	$	2,482
Required service period in months		36
Monthly expense		69
Months in period		12
Compensation recognized			$	828
Cohen brothers units issued		559,020
Assumed price		4.89
Total value of issuance		2,734
Required service period in months		36
Monthly expense		76
Months in period		12
Compensation recognized			$	911
Total Adjustment			$	1,739

Note: Vested Restricted Units are convertible on a one for one basis to IFMI shares of common stock at the Company’s option. Therefore, the per-unit value of Restricted Units equals the per share market price of IFMI common stock.

(M) There is no tax adjustment for the twelve months ended December 31, 2009. IFMI was a partnership from January 1, 2009 to December 17, 2009 and therefore not subject to federal income tax. Although it was subject to small amounts of entity level taxes in certain jurisdictions, there would not have been any material impact to those taxes (which in themselves were immaterial during 2009) through the acquisition of JVB. For the two week period of 2009 that IFMI was a corporation, its effective tax rate was 0%.

(N) As part of the Business Combination and the issuance by IFMI of 313,051 shares of common stock to the JVB sellers, IFMILLC has agreed to issue IFMI an additional 313,051 membership units of IFMILLC. This adjustment represents adjustment to non-controlling interest as result of applying JVB income and adjustments as well as additional IFMILLC membership units issued to IFMI.

9

Institutional Financial Markets, Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(Dollars in thousands, except share and per share data)

(O) Pro forma weighted average shares of common stock outstanding and earnings per share are calculated as follows. Because 2009 was a period of net loss, fully diluted shares of common stock outstanding and earnings per share equals basic:

Computation of Weighted Average Shares

Basic and Diluted
Actual weighted average shares - basic / diluted	9,639,475
IFMI shares issued to JVB Sellers	313,051
Pro Forma weighted average shares - basic / diluted	9,952,526

Computation of Pro Forma Earnings per Share

Basic and Diluted
Net Income attributable to IFMI	$	(8,331	)
Pro Forma weighted average shares - basic / diluted		9,952,526
Basic and Diluted EPS	$	(0.84	)

10