Cohen & Company (COHN) 8-K/A Financial Statements and Exhibits

EXHIBIT 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

In this report on Form 8-K, unless otherwise noted or as the context requires:“the Company,”, “Institutional Financial Markets”, “we”, “us”, “IFMI”, and “our”refers to Institutional Financial Markets, Inc. and it subsidiaries (formerly known as Cohen & Company Inc.).“IFMI LLC,” refers to IFMI LLC (formerly known as Cohen Brothers, LLC), the main operating subsidiary of the Company. “PrinceRidge” refers to PrinceRidge Partners, LLC, and its consolidated entities, including PrinceRidge Holdings LP. “Business Combination” refers to the June 1, 2011 closing of the contribution transaction between IFMI and PrinceRidge.

On April 19, 2011, the Company entered into a contribution agreement, referred to herein, as amended, as the “Contribution Agreement,” with PrinceRidge. On June 1, 2011, the Company completed the Business Combination, pursuant to which the Company contributed the equity interests of its wholly owned subsidiary, Cohen and Company Capital Markets, LLC (“CCCM”) along with cash and other amounts payable to PrinceRidge in exchange for a 69.9% equity interest in PrinceRidge. The owners of PrinceRidge prior to the Business Combination are referred to herein as the PrinceRidge Principals. The PrinceRidge Principals retained a 30.1% interest in PrinceRidge subsequent to the Business Combination and contribution.

The following unaudited pro forma condensed combined statements give effect to the Business Combination as if it had been completed as of March 31, 2011 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 PrinceRidge 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 future financial position of the combined company. These statements do not give effect to (1) IFMI or PrinceRidge’s results of operations or other transactions or developments since March 31, 2011, (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 foregoing 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 PrinceRidge. PrinceRidge’s audited financial statements for 2010 and 2011 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 Form 10-K and Forms 10-Q filed with the Securities and Exchange Commission and are available via IFMI’s website atwww.ifmi.com.

Institutional Financial Markets, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of March 31, 2011

(In thousands, except share amounts)

	IFMI			PrinceRidge			Adjustments			Pro Forma
Cash and cash equivalents	$	49,548		$	3,241					$	52,789
Restricted cash		1,880									1,880
Receivables from:
Brokers, dealers, and clearing agencies					397						397
Related parties		771			353						1,124
Other receivables		5,632			1,676						7,308
Investments - trading		316,394			42,651						359,045
Other investments, at fair value		44,766									44,766
Receivables under resale agreements		—			42,764						42,764
Goodwill		10,184						806	(A)		10,990
Other assets		12,613			4,424			166	(B)		17,203
Total assets	$	441,788		$	95,506		$	972		$	538,266
Payables to:
Brokers, dealers, and clearing agencies	$	113,885		$	6,205					$	120,090
Related parties		60									60
Accounts payable and other liabilities		13,842			3,823						17,665
Accrued compensation		9,072			2,725						11,797
Trading securities sold, not yet purchased		54,351			22,284						76,635
Securities sold under agreement to repurchase		105,490			42,410						147,900
Deferred income taxes		8,639									8,639
Debt		43,258									43,258
Total liabilities		348,597			77,447			—			426,044
Redeemable non controlling interest								19,031	(C)		19,031
Preferred stock		5									5
Common stock		11									11
Additional paid in capital		62,762									62,762
Retained earnings		6,212									6,212
Accumulated comprehensive loss		(448	)								(448	)
Treasury stock		(328	)								(328	)
Members’ equity		—			(231	)		231	(D)		—
Total controlling interest		68,214			(231	)		231			68,214
Non controlling interest		24,977			18,290			(18,290	) (D)		24,977
Total stockholders’ equity		93,191			18,059			(18,059	)		93,191
Total liabilities and equity and redeemable non controlling interest	$	441,788		$	95,506		$	972		$	538,266
IFMI Shares outstanding		12,160,249						848,742	(E)		13,008,991

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Institutional Financial Markets, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Three Months Ended March 31, 2011

(In thousands, except share and per share amounts)

	IFMI			PrinceRidge			Adjustments			Pro Forma
Revenues
Net trading	$	27,274		$	7,049						34,323
Asset management		5,970									5,970
New issue and advisory		109			2,319						2,428
Principal transactions and other income		(1,039	)								(1,039	)
Total revenues		32,314			9,368			—			41,682
Operating expenses
Compensation and benefits		21,988			6,545			497	(E)		29,030
Business development, occupancy, equipment		1,439			499						1,938
Subscriptions, clearing, and execution		2,815			1,180						3,995
Professional services and other operating		4,015			866						4,881
Depreciation and amortization		470			208						678
Impairment of intangible asset											—
Total operating expenses		30,727			9,298			497			40,522
Operating income / (loss)		1,587			70			(497	)		1,160
Non operating income / (expense)
Interest expense		(1,482	)								(1,482	)
Gain on sale of management contracts		—									—
Income / (loss) from equity method affiliates		95									95
Income / (loss) before income taxes		200			70			(497	)		(227	)
Income taxes		(213	)								(213	)
Net income (loss)		413			70			(497	)		(14	)
Less: Net (loss) income attributable to the noncontrolling interest		38			76			(335	)  (F)		(221	)
Net income (loss) attributable to controlling interest	$	375		$	(6	)	$	(162	)	$	207
Earnings (loss) per share - basic: (H)
Weighted average shares outstanding-Basic		10,819,995									10,819,995
Basic earnings (loss) per share	$	0.03								$	0.02
Earnings (loss) per share-diluted: (H)
Weighted average shares outstanding-Diluted		16,125,155						223,687	(E)		16,348,842
Diluted earnings (loss) per share	$	0.03								$	0.02

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Institutional Financial Markets, Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2010

(In thousands, except share and per share amounts)

	IFMI			PrinceRidge			Adjustments			Pro Forma
Revenues
Net trading	$	70,809		$	20,385						91,194
Asset management		25,281									25,281
New issue and advisory		3,778			4,357						8,135
Principal transactions and other income		25,684									25,684
Total revenues		125,552			24,742			—			150,294
Operating expenses
Compensation and benefits		77,446			19,369			1,986	(E)		98,801
Business development, occupancy, equipment		5,470			1,681						7,151
Subscriptions, clearing, and execution		8,733			3,649						12,382
Professional services and other operating		17,198			3,780						20,978
Depreciation and amortization		2,356			818						3,174
Impairment of intangible asset		5,607			—						5,607
Total operating expenses		116,810			29,297			(1,986	)		148,093
Operating income / (loss)		8,742			(4,555	)		(1,986	)		2,201
Non operating income / (expense)
Interest expense		(7,686	)								(7,686	)
Gain on repurchase of debt		2,555									2,555
Gain on sale of management contracts		971									971
Income / (loss) from equity method affiliates		5,884									5,884
Income / (loss) before income taxes		10,466			(4,555	)		(1,986	)		3,925
Income taxes		(749	)								(749	)
Net income (loss)		11,215			(4,555	)		(1,986	)		4,674
Less: Net (loss) income attributable to the noncontrolling interest		3,620			(4,479	)		1,592	(G)		733
Net income (loss) attributable to controlling interest	$	7,595		$	(76	)	$	(3,578	)	$	3,941
Earnings (loss) per share - basic: (H)
Weighted average shares outstanding-Basic		10,404,017									10,404,017
Basic earnings (loss) per share	$	0.73								$	0.38
Earnings (loss) per share-diluted: (H)
Weighted average shares outstanding-Diluted		15,687,573						378,578	(E)		16,066,151
Diluted earnings (loss) per share	$	0.73								$	0.37

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Note 1 – Basis of Presentation

The unaudited pro forma condensed combined statements give effect to the Business Combination as 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 PrinceRidge had been completed as of March 31, 2011 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 PrinceRidge’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 PrinceRidge 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 PrinceRidge 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 PrinceRidge 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 PrinceRidge’s accounting policies but the review is ongoing. As such, additional reclassifications or pro forma adjustments may be identified.

Note 2 – Assets and Liabilities Acquired

The following represents the identifiable assets and liabilities acquired and the values assigned as of March 31, 2011:

Values Assigned to Identifiable Net Assets Acquired

	PrinceRidge Recorded Value			Purchase Accounting Adjustments		Purchase Accounting Value
Cash and cash equivalents	$	3,241				$	3,241
Receivables from brokers, dealers, and clearing agencies		397					397
Receivables from related parties		353					353
Other receivables		1,676					1,676
Investments - trading		42,651					42,651
Receivables under resale agreements		42,764					42,764
Other assets		4,424			166		4,590
Payables to brokers, dealers, and clearing agencies		(6,205	)				(6,205	)
Accounts payable and other liabilities		(6,548	)				(6,548	)
Trading securities sold, not yet purchased		(22,284	)				(22,284	)
Securities sold under agreement to repurchase		(42,410	)				(42,410	)
Fair Value of Net Assets							18,225

Note 3 – Pro Forma Adjustments

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(A) Goodwill is calculated as:

Calculation of Goodwill

Purchase price	$	19,031
Fair value of net assets acquired		(18,225	)
Goodwill	$	806

The purchase price equals the fair value of the non-controlling interest retained by the PrinceRidge Principals. The fair value is calculated in (C) below.

(B) $166 represents the estimated value of broker-dealer license. The $166 value of PrinceRidge’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.

(C) Represents the fair value of the non-controlling interest retained by the PrinceRidge Principals.

Calculation of Fair Value of Non Controlling Interest

Fair value of net assets of PrinceRidge - Historical	18,225
Contribution from IFMI	45,000
Pro Forma fair value of PrinceRidge equity	63,225
Non controlling interest percentage	30.1	%
Fair value of non controlling interest	19,031

This interest represents the membership interests of PrinceRidge that are not owned by IFMI, LLC. The members of PrinceRidge have the right to withdraw from PrinceRidge and require PrinceRidge to redeem the interests for cash over an agreed upon payment period. The Company has concluded it will treat these interests as temporary equity under Accounting Series Release 268 (“ASR 268”). These interests will be shown outside of the permanent equity of IFMI in its consolidated balance sheet as redeemable non controlling interests.

(D) Adjustment to eliminate the historical equity accounts of PrinceRidge.

(E) To record expense and dilutive share effect of equity compensation granted to PrinceRidge Principals contemporaneous with the business combination.

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(F) Adjustment to non controlling interest for the three months ended March 31, 2011 is calculated as follows:

Calculation of Adjustment to Non Controlling Interest

Prince Ridge historical net income	70
Pro forma equity compensation recognized by PrinceRidge	(199	)
Historical net loss of CCCM	(456	)
Pro Forma net loss of PrinceRidge			(585	)
PrinceRidge non controlling interest percentage			30.1	%
Pro Forma loss attributable to non controlling interest of PrinceRidge						(176	)
IFMI LLC historical net income	115
Pro forma equity compensation recognized by IFMI	(298	)
Historical net loss of CCCM	456
Pro forma income of IFMI LLC before PrinceRidge						273
Pro Forma net loss of PrinceRidge			(585	)
Pro Forma loss attributable to non controlling interest of PrinceRidge			176
IFMI LLC’s share of PrinceRidge pro forma net income						(409	)
Pro Forma income of IFMI LLC						(136	)
IFMI non controlling interest percentage						32.76	%
IFMI pro forma non controlling interest						(45	)
Consolidated pro forma non controlling interest						(221	)
Less: Historical combined non controlling interest						114
Adjustment required					$	(335	)

(G) Adjustment to non controlling interest for the year ended December 31, 2010 is calculated as follows:

Calculation of Adjustment to Non Controlling Interest

Prince Ridge historical net income	(4,555	)
Pro forma equity compensation recognized by PrinceRidge	(796	)
Historical net income of CCCM	1,959
Pro Forma net loss of PrinceRidge			(3,392	)
PrinceRidge non controlling interest percentage			30.1	%
Pro Forma loss attributable to non controlling interest of PrinceRidge						(1,021	)
IFMI LLC historical net income	10,707
Pro froma equity compensation recognized by IFMI	(1,190	)
Historical net income of CCCM	(1,959	)
Pro forma income of IFMI LLC before PrinceRidge						7,558
Pro Forma net loss of PrinceRidge			(3,392	)
Pro Forma loss attributable to non controlling interest of PrinceRidge			1,021
IFMI LLC’s share of PrinceRidge pro forma net income						(2,371	)
Pro Forma Income of IFMI LLC						5,187
IFMI non controlling interest percentage						33.81	%
IFMI pro forma non controlling interest						1,754
Consolidated pro forma non controlling interest						733
Less: Historical combined non controlling interest						(859	)
Adjustment required					$	1,592

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(H) The following table shows the calculation of the earnings per share amounts:

	Historical Year Ended December 31, 2010		Proforma Year Ended December 31, 2010		Historical Three Months Ended March 31, 2011		Proforma Three Months Ended March 31, 2011
Basic
Net income attributable to controlling interest		7,595		3,941		375		207
Weighted average shares outstanding		10,404		10,404		10,820		10,820
Earnings per share	$	0.73	$	0.38	$	0.03	$	0.02
Diluted
Net income attributable to controlling interest		7,595		3,941		375		207
Income attributable to units of IFMI, LLC that are exchangeable into IFMI shares		3,620		1,754		38		(45	)
Adjustment to income tax expense for exchange at units to shares		260		260		145		145
Net income on a fully converted basis		11,475		5,955		558		307
Weighted shares outstanding		15,688		16,066		16,125		16,349
Earnings per share	$	0.73	$	0.37	$	0.03	$	0.02

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