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<TITLE>Ladenburg Thalmann Financial Services, Inc.</TITLE>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt">As filed with the Securities and Exchange Commission on November&nbsp;30, 2005
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 1pt">Registration No.&nbsp;333-
</DIV>


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<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B><FONT style="font-variant: SMALL-CAPS">Form&nbsp;S-8</FONT></B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT<BR>
<FONT style="font-variant: SMALL-CAPS">Under</FONT><BR>
THE SECURITIES ACT OF 1933</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B><FONT style="font-variant: SMALL-CAPS">Ladenburg Thalmann Financial Services Inc.</FONT></B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact Name of Registrant as Specified in Its Charter)</DIV>


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    <TD align="center" valign="top"><B>Florida</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>65-0701248</B></TD>
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<TR valign="bottom">
    <TD align="center" valign="top">(State or Other Jurisdiction of
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Incorporation or Organization)
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    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification Number)</TD>
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<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>590 MADISON AVENUE, 34</B><SUP style="font-size: 85%; vertical-align: text-top"><B>th</B></SUP><B> FLOOR</B><BR>
<B>NEW YORK, NEW YORK 10022</B><BR>
(Address of Principal Executive Offices)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>OTHER EMPLOYEE BENEFIT PLANS</B><BR>
(Full Title of the Plan)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>MARK D. KLEIN</B>, President and Chief Executive Officer<BR>
Ladenburg Thalmann Financial Services Inc.<BR>
590 Madison Avenue, 34<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor<BR>
New York, New York 10022<BR>
(212)&nbsp;409-2000<BR>
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">with a copy to:</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>DAVID ALAN MILLER, ESQ.</B><BR>
Graubard Miller<BR>
The Chrysler Building<BR>
405 Lexington Avenue<BR>
New York, New York 10174<BR>
Telephone: (212)&nbsp;818-8800</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CALCULATION OF REGISTRATION FEE</B></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
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    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">

<TD nowrap align="left" colspan="23" style="border-bottom: 3px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Proposed maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Proposed maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Title of Securities</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount to be</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>offering price</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>aggregate</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Amount of</B></TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>to be registered</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Registered</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>per share</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(2)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>offering price</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>registration fee</B></TD>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

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                    <TD style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">Common Stock, par value
$.0001 per share
(&#147;Common Stock&#148;), issued
under employee benefit
plans (&#147;Employee Benefit
Plans&#148;)</DIV></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">7,169,444</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$ 0.53</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000" nowrap>$ 3,799,805.32</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$406.58</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">Common Stock issuable
upon exercise of options
under Employee Benefit
Plans</DIV></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">7,500,000</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$ 0.53</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$ 3,975,000.00</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$425.33</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">Common Stock issuable
under Employee Benefit
Plans</DIV></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">5,275,000</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$ 0.53</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$ 2,795,750.00</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$299.15</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000"><DIV style="margin-left:15px; text-indent:-0px">TOTAL</DIV></TD>
    <TD style="border-right: 0px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 0px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 0px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 0px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="center" style="border-top: 1px solid #000000">$1,131.06</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="23" style="border-top: 3px solid #000000">&nbsp;</TD>
</TR>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to Rule&nbsp;416, there are also being registered additional shares of common stock
as may become issuable as a result of
<FONT style="white-space: nowrap">anti-dilution</FONT> provisions contained in such Employee
Benefit Plans.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Based on the average of the high and low price of a share of our common stock as reported by
the American Stock Exchange on November&nbsp;25, 2005 in accordance with Rules 457(c) and 457(h)
promulgated under the Securities Act of 1933, as amended.</TD>
</TR>

</TABLE>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the provisions of Rule&nbsp;462 promulgated under the Securities Act, this
registration statement will become effective upon filing with the Securities and Exchange
Commission.
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
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<P align="center" style="font-size: 10pt">&nbsp;
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART I</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS</B>
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1. Plan Information.</B>
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2. Registrant Information and Employee Plan Annual Information.</B>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 18pt; margin-top: 18pt"><B>LADENBURG THALMANN FINANCIAL SERVICES INC.</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 18pt">19,944,444 shares of common stock
</DIV>


<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to 19,944,444 shares of our common stock that may be offered for
resale for the account of the selling shareholders set forth in this prospectus under the heading
&#147;Selling Shareholders&#148; beginning on page 13. The selling shareholders may sell these shares in a
variety of transactions as described under the heading &#147;Plan of
Distribution&#148; beginning on page 16.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is traded on the American Stock Exchange under the symbol &#147;LTS.&#148; On November
28, 2005, the last reported sale price of our common stock was $0.53.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any proceeds from the sale of the shares covered by this prospectus.
However, we have already received $3,226,250 as payment for 7,169,444 of the above 19,944,444
shares which were issued to the selling shareholders and are being registered for resale under this
prospectus. Additionally, we will receive the amounts paid by the selling shareholders upon
exercise of their options and purchase rights to acquire the remaining 12,775,000 of the above
19,944,444 shares being registered under this prospectus. If those options and purchase rights
are exercised in full, we will receive $7,707,375.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investing in our common stock involves a high degree of risk. See &#147;Risk Factors&#148; beginning on
page 4 for a discussion of information that should be considered in connection with an investment
in our common stock.</B>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The date of this prospectus is November&nbsp;30, 2005
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>You should rely only on the information contained or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling shareholders are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of our common stock.</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Table of Contents</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><U><B>Page</B></U></TD>
</TR>

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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101"><B>PROSPECTUS SUMMARY</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102"><B>RISK FACTORS</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103"><B>WARNING REGARDING OUR USE OF FORWARD-LOOKING STATEMENTS</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104"><B>USE OF PROCEEDS</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105"><B>SELLING SHAREHOLDERS</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106"><B>PLAN OF DISTRIBUTION</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107"><B>LEGAL MATTERS</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108"><B>EXPERTS</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109"><B>WHERE YOU CAN FIND ADDITIONAL INFORMATION</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
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</TABLE>
</DIV>

<DIV align="left">
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</DIV>


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS SUMMARY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are engaged in retail and institutional securities brokerage, investment banking services
and investment activities through our principal operating subsidiary, Ladenburg Thalmann &#038; Co. Inc.
We are committed to establishing a significant presence in the financial services industry by
meeting the varying investment needs of our corporate, institutional and retail clients.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ladenburg Thalmann &#038; Co. is a full service investment banking and brokerage firm that has been
a member of the New York Stock Exchange since 1879. It provides its services principally for
middle market and emerging growth companies and high net worth individuals through a coordinated
effort among corporate finance, capital markets, investment management, brokerage and trading
professionals. Ladenburg is subject to regulation by, among others, the Securities and Exchange
Commission, the NYSE and the National Association of Securities Dealers, Inc. and is a member of
the Securities Investor Protection Corporation. Its private client services and institutional
sales departments serve approximately 70,000 accounts nationwide and its asset management area
provides investment management and financial planning services to numerous individuals and
institutions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Recent Events</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June, July and August&nbsp;2005, we and our subsidiaries entered into employment agreements with
various individuals to join our firm. In connection with the hiring of these individuals, we
issued them shares of common stock and options and rights to purchase additional shares of common
stock and we agreed to register for re-sale the shares of common stock received and to be received
by them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Corporate History</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated under the laws of the State of Florida in February&nbsp;1996. Ladenburg
Thalmann &#038; Co. was incorporated under the laws of the State of Delaware in December&nbsp;1971 and became
our wholly owned subsidiary in May&nbsp;2001. Our principal executive offices, as well as those of
Ladenburg Thalmann &#038; Co., are located at 590 Madison Avenue, New York, New York 10022 and both of
our telephone numbers are (212)&nbsp;409-2000. Ladenburg Thalmann &#038; Co. has currently branch offices
located in Los Angeles, California, Palo Alto, California, Boca Raton, Florida, Lincolnshire,
Illinois and Melville, New York. Ladenburg Thalmann &#038; Co. maintains a website located at
www.ladenburg.com.
</DIV>

<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should carefully consider the risks described below before you decide to invest in our
company. The risks described below are not the only ones facing us. Additional risks not
presently known to us or that we currently believe are immaterial may also impair our business
operations. Our business, financial condition or results of operation could be materially
adversely affected by any of these risks. The trading price of our common stock could decline
because of any one of these risks, and you may lose all or part of your investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We have incurred, and may continue to incur, significant operating losses.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We incurred significant losses from operations during each of the past four calendar years. We
cannot assure you that we will be able to achieve or sustain revenue growth, profitability or
positive cash flow on either a quarterly or annual basis or that profitability, if achieved, will
be sustained. Although we believe that we have adequate cash and regulatory capital to fund our
current level of operating activities through September&nbsp;30, 2006, if we are unable to achieve or
sustain profitability, we may not be financially viable in the future and may have to curtail,
suspend or cease operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>If we are unable to repay our outstanding indebtedness obligations when due, our operations may be
materially adversely affected.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently, we have an aggregate of approximately $6.3&nbsp;million of indebtedness, of which $5.0
million is due on December&nbsp;31, 2006 and approximately $1.3&nbsp;million from our clearing broker is
scheduled to be forgiven as follows: $667,000 in November&nbsp;2005 and $666,000 in November&nbsp;2006.
However, if the clearing agreement is terminated for any reason prior to the loan maturity date,
the loan, less any amount that has been forgiven through the date of the termination, plus
interest, must be repaid on demand. We cannot assure you that our operations will generate funds
sufficient to repay these or other future debt obligations as they come due. Our failure to repay
our indebtedness and make interest payments as required by our debt obligations could have a
material adverse affect on our operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We are currently subject to extensive securities regulation and the failure to comply with these
regulations could subject us to penalties or sanctions.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The securities industry and our business is subject to extensive regulation by the SEC, state
securities regulators and other governmental regulatory authorities. We are also regulated by
industry self-regulatory organizations, including the NYSE, the NASD and the Municipal Securities
Rulemaking Board. The regulatory environment is also subject to change and we may be adversely
affected as a result of new or revised legislation or regulations imposed by the SEC, other federal
or state governmental regulatory authorities, or self-regulatory organizations. We also may be
adversely affected by changes in the interpretation or enforcement of existing laws and rules by
these governmental authorities and self-regulatory organizations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ladenburg Thalmann &#038; Co. is a registered broker-dealer with the SEC and a member firm of the
NYSE. Broker-dealers are subject to regulations which cover all aspects of the securities business,
including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sales methods and supervision;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>trading practices among broker-dealers;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>use and safekeeping of customers&#146; funds and securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>capital structure of securities firms;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>record keeping; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the conduct of directors, officers and employees.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Compliance with many of the regulations applicable to us involves a number of risks, particularly
in areas where applicable regulations may be subject to varying interpretation. The requirements
imposed by these regulators are designed to ensure the integrity of the financial markets and to
protect customers and other third parties who deal with us. Consequently, these regulations often
serve to limit our activities, including through net capital, customer protection and market
conduct requirements. Much of the regulation of broker-dealers has been delegated to
self-regulatory organizations, principally the NASD Regulation, Inc., the regulatory arm of the
NASD, and the NYSE, which are our primary regulatory agencies. NASD Regulation and the NYSE adopt
rules, subject to approval by the SEC, that govern its members and conducts periodic examinations
of member firms&#146; operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we are found to have violated any applicable regulation, formal administrative or judicial
proceedings may be initiated against us that may result in:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>censure;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>fine;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>civil penalties, including treble damages in the case of insider trading violations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the issuance of cease-and-desist orders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the deregistration or suspension of our broker-dealer activities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the suspension or disqualification of our officers or employees; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other adverse consequences.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The imposition of any of these or other penalties could have a material adverse effect on our
operating results and financial condition.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We may incur significant losses from trading and investment activities due to market fluctuations
and volatility.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generally maintain trading and investment positions in the equity markets. To the extent
that we own assets, i.e., have long positions, in those markets, a downturn in those markets could
result in losses from a decline in the value of those long positions. Conversely, to the extent
that we have sold assets that we do not own, i.e., have short positions, in any of those markets,
an upturn in those markets could expose us to potentially unlimited losses as we attempt to cover
our short positions by acquiring assets in a rising market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may from time to time have a trading strategy consisting of holding a long position in one
security and a short position in another security from which we expect to earn revenues based on
changes
</DIV>

<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in the relative value of the two securities. If, however, the relative value of the two
securities changes in a direction or manner that we did not anticipate or against which we are not
hedged, we might realize a loss
in those paired positions. In addition, we maintain trading positions that can be adversely
affected by the level of volatility in the financial markets, i.e., the degree to which trading
prices fluctuate over a particular period, in a particular market, regardless of market levels.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We may need to raise additional funds in the near future.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our capital requirements continue to be adversely affected by our inability to generate cash
from operations. We have been forced to rely on borrowings and proceeds from the sale of our common
stock in order to generate working capital for our operations. Accordingly, we may need to seek to
raise additional capital through other available sources, including through equity offerings or
borrowing additional funds on a short-term basis from third parties, including our current
debtholders, shareholders and clearing broker. As of September&nbsp;30, 2005, we had cash and cash
equivalents of approximately $5,776,000. Accordingly, if we continue to be unable to generate cash
from operations and are unable to find sources of funding, it would have an adverse impact on our
liquidity and operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our expenses may increase due to unresolved real estate commitments.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ladenburg Capital Management Inc., one of our former operating subsidiaries, may have
potential liability under a terminated lease for office space in New York City which it was forced
to vacate during 2001 due to the events of September&nbsp;11, 2001. Ladenburg Capital Management no
longer occupies the space and believes it has no further lease obligation pursuant to the terms of
the lease. This lease, which, had it not terminated as a result of the events of September&nbsp;11,
2001, would have expired by its terms in March&nbsp;2010, provides for future minimum payments
aggregating approximately $3,164,000, payable $176,000 in 2005, $703,000 per year from 2006 through
2009 and $176,000 in 2010. In addition, minimum payments for the period from September&nbsp;11, 2001
through September&nbsp;30, 2005 which were not paid by Ladenburg Capital Management amounted to
$2,649,000. Ladenburg Capital Management is currently in litigation with the landlord in which it
is seeking judicial determination of the termination of the lease. If Ladenburg Capital Management
is not successful in this litigation, it plans to sublease the property. Ladenburg Capital
Management has provided for estimated costs in connection with this lease and has recorded a
liability at September&nbsp;30, 2005 and December&nbsp;31, 2004. Additional costs may be incurred in
connection with terminating this lease, and if not terminated, to the extent Ladenburg Capital
Management does not sublease the office space for an amount at least equal to the lease
obligations. Such costs may have a material adverse effect on Ladenburg Capital Management&#146;s
financial position and liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, we have ceased using portions of our office space in New York City and have
subleased these areas. Should any of the sub-tenants not renew or renew for a sub-rental less than
Ladenburg Thalmann &#038; Co.&#146;s lease commitments, or not pay their rent for an extended period of time,
it may have a material adverse effect on Ladenburg Thalmann &#038; Co.&#146;s financial position and
liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our business could be adversely affected by a breakdown in the financial markets.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a securities broker-dealer, our business is materially affected by conditions in the
financial markets and economic conditions generally, both in the United States and elsewhere around
the world. Many factors or events could lead to a breakdown in the financial markets including war,
terrorism, natural catastrophes and other types of disasters. These types of events could cause
people to begin to lose confidence in the financial markets and their ability to function
effectively. If the financial markets are
</DIV>

<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">unable to effectively prepare for these types of events
and ease public concern over their ability to function, our revenues are likely to decline and our
operations will be adversely affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our revenues may decline in adverse market or economic conditions.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the past several years, unfavorable financial and economic conditions have reduced the
number and size of the transactions in which we provide underwriting services, merger and
acquisition consulting and other services. Our investment banking revenues, in the form of
financial advisory and underwriting fees, are directly related to the number and size of the
transactions in which we participate and have been adversely affected by the sustained downturn in
the securities markets that prevailed through the middle of 2003. Additionally, the downturn in
market conditions led to a decline in the volume of transactions that we executed for our customers
and, therefore, to a decline in the revenues we received from commissions and spreads. If these
adverse financial and economic conditions return and persist for any extended period of time, we
will incur a further decline in transactions and revenues that we receive from commissions and
spreads.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We depend on our senior employees and the loss of their services could harm our business.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success is dependent in large part upon the services of several of our senior executives
and employees, including those of Ladenburg Thalmann &#038; Co. We do not maintain and do not intend to
obtain key man insurance on the life of any executive or employee. If our senior executives or
employees terminate their employment with us and we are unable to find suitable replacements in
relatively short periods of time, our operations may be materially and adversely affected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We face significant competition for professional employees.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time, individuals we employ may choose to leave our company to pursue other
opportunities. We have experienced losses of registered representatives, trading and investment
banking professionals in the past, and the level of competition for key personnel remains intense.
We cannot assure you that the loss of key personnel will not occur again in the future. The loss of
a registered representative or a trading or investment banking professional, particularly a senior
professional with a broad range of contacts in an industry, could materially and adversely affect
our operating results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our principal shareholders including our directors and officers control a large percentage of our
shares of common stock and can significantly influence our corporate actions.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the present time, our executive officers, directors and companies that these individuals
are affiliated with beneficially own approximately 44.2% of our common stock. Accordingly, these
individuals and entities will be able to significantly influence most, if not all, of our corporate
actions, including the election of directors and the appointment of officers. Additionally, this
ownership of our common stock may make it difficult for a third party to acquire control of us,
therefore possibly discouraging third parties from seeking to acquire us. A third party would have
to negotiate any possible transactions with these principal shareholders, and their interests may
be different from the interests of our other shareholders. This may depress the price of our common
stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The American Stock Exchange (the &#147;Exchange&#148;) may delist our common stock from quotation on its
exchange.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is currently quoted on the Exchange. In order to continue quotation of our
common stock, we must maintain certain financial, distribution and stock price levels. Generally,
we must
</DIV>

<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">maintain a minimum amount in shareholders&#146; equity (usually between $2.0&nbsp;million and $4.0
million) and a minimum number of public shareholders (usually 300 shareholders). Additionally, our
common stock cannot have what is deemed to be a &#147;low selling price&#148; as determined by the Exchange.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;28, 2005, the last reported sale price of our common stock was $0.53. If the
Exchange determines that this is a &#147;low selling price,&#148; it may require us to effect a reverse split
or suspend or remove our common stock from listing on the Exchange. In determining whether a
reverse split or suspension or removal is appropriate, the Exchange will consider all pertinent
factors including market conditions in general, the number of shares outstanding, plans which may
have been formulated by management, applicable regulations of the state or country of incorporation
or of any governmental agency having jurisdiction over the company and the relationship to other
Exchange policies regarding continued listing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Exchange delists our common stock from trading on its exchange, we could face
significant material adverse consequences including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a limited availability of market quotations for our common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a determination that our common stock is a &#147;penny stock&#148; which will
require brokers trading in our common stock to adhere to more
stringent rules and possibly resulting in a reduced level of trading
activity in the secondary trading market for our common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a limited amount of news and analyst coverage for our company; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a decreased ability to issue additional securities or obtain
additional financing in the future.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We may lose customers and our revenues may decline due to our lack of Internet brokerage service
capability.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A growing number of brokerage firms offer Internet brokerage services to their customers in
response to increased customer demand for these services. Currently, we are unable to offer
Internet brokerage services, nor do we anticipate having such ability in the near future. Should we
offer such services in the future, the services may not appeal to our current or prospective
customers and these services may not be profitable. Our failure to commence Internet brokerage
services in the near future could have a material adverse effect on our business including the loss
of our existing customers to competitors that do offer these services. Additionally, if we commence
Internet brokerage services but are unable to attract customers for those services, our revenues
will decline.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We rely on one primary clearing broker and the termination of the agreement with this clearing
broker could disrupt our business.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ladenburg Thalmann &#038; Co. primarily uses one clearing broker to process its securities
transactions and maintain customer accounts on a fee basis. The clearing broker also provides
billing services, extends credit and provides for control and receipt, custody and delivery of
securities. In November&nbsp;2002, we renegotiated a clearing agreement with one of our clearing
brokers whereby this clearing broker became our primary clearing broker, clearing substantially all
of our business (the &#147;Clearing Conversion&#148;). As part of the new agreement with this clearing
broker, we are realizing significant cost savings from reduced ticket charges and other incentives.
In addition, under the new clearing agreement, an affiliate of the clearing broker loaned us an
aggregate of $3,500,000 (the &#147;Clearing
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Loans&#148;) in December&nbsp;2002, with various terms and maturing at
various dates through December&nbsp;2006. As scheduled, $1,500,000 and $667,000 of the Clearing Loans
were forgiven in November&nbsp;2003 and 2004, respectively. The remaining principal balance of the
Clearing Loans is scheduled to be forgiven as follows: $667,000 in November&nbsp;2005 and $666,000 in
November&nbsp;2006. However, if the clearing agreement is
terminated for any reason prior to the loan maturity date, the loan, less any amount that has been
forgiven through the date of the termination, plus interest, must be repaid on demand.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ladenburg Thalmann &#038; Co. depends on the operational capacity and ability of the clearing
broker for the orderly processing of transactions. In addition, by engaging the processing services
of a clearing firm, Ladenburg Thalmann &#038; Co. is exempt from some capital reserve requirements and
other regulatory requirements imposed by federal and state securities laws. If the clearing
agreement is terminated for any reason, we would be forced to find an alternative clearing firm. We
cannot assure you that we would be able to find an alternative clearing firm on acceptable terms to
us or at all.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our clearing broker extends credit to our clients and we are liable if the clients do not pay.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ladenburg Thalmann &#038; Co. permits its clients to purchase securities on a margin basis or sell
securities short, which means that the clearing firm extends credit to the client secured by cash
and securities in the client&#146;s account. During periods of volatile markets, the value of the
collateral held by the clearing broker could fall below the amount borrowed by the client. If
margin requirements are not sufficient to cover losses, the clearing broker sells or buys
securities at prevailing market prices, and may incur losses to satisfy client obligations.
Ladenburg Thalmann &#038; Co. has agreed to indemnify the clearing broker for losses it may incur while
extending credit to its clients.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We are subject to various risks associated with the securities industry.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a securities broker-dealer, Ladenburg Thalmann &#038; Co. is subject to uncertainties that are
common in the securities industry. These uncertainties include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the volatility of domestic and international financial, bond and stock markets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>extensive governmental regulation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>litigation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>intense competition;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>substantial fluctuations in the volume and price level of securities; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>dependence on the solvency of various third parties.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a result, revenues and earnings may vary significantly from quarter to quarter and from year to
year. In periods of low volume, profitability is impaired because certain expenses remain
relatively fixed. Ladenburg Thalmann &#038; Co. is much smaller and has much less capital than many
competitors in the securities industry. In the event of a market downturn, our business could be
adversely affected in many ways. Our revenues are likely to decline in such circumstances and, if
we are unable to reduce expenses at the same pace, our profit margins would erode.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our risk management policies and procedures may leave us exposed to unidentified risks or an
unanticipated level of risk.</B>
</DIV>



<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The policies and procedures we employ to identify, monitor and manage risks may not be fully
effective. Some methods of risk management are based on the use of observed historical market
behavior. As a result, these methods may not predict future risk exposures, which could be
significantly greater than the historical measures indicate. Other risk management methods depend
on evaluation of information
regarding markets, clients or other matters that are publicly available or otherwise accessible by
us. This information may not be accurate, complete, up-to-date or properly evaluated. Management of
operational, legal and regulatory risk requires, among other things, policies and procedures to
properly record and verify a large number of transactions and events. We cannot assure you that our
policies and procedures will effectively and accurately record and verify this information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We seek to monitor and control our risk exposure through a variety of separate but
complementary financial, credit, operational and legal reporting systems. We believe that we
effectively evaluate and manage the market, credit and other risks to which we are exposed.
Nonetheless, the effectiveness of our ability to manage risk exposure can never be completely or
accurately predicted or fully assured. For example, unexpectedly large or rapid movements or
disruptions in one or more markets or other unforeseen developments can have a material adverse
effect on our results of operations and financial condition. The consequences of these developments
can include losses due to adverse changes in inventory values, decreases in the liquidity of
trading positions, higher volatility in earnings, increases in our credit risk to customers as well
as to third parties and increases in general systemic risk.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Credit risk exposes us to losses caused by financial or other problems experienced by third
parties.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to the risk that third parties that owe us money, securities or other assets
will not perform their obligations. These parties include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>trading counterparties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>customers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>clearing agents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>exchanges;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>clearing houses; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other financial intermediaries as well as issuers whose securities we hold.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These parties may default on their obligations owed to us due to bankruptcy, lack of liquidity,
operational failure or other reasons. This risk may arise, for example, from:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>holding securities of third parties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>executing securities trades that fail to settle at the required time due to
non-delivery by the counterparty or systems failure by clearing agents, exchanges,
clearing houses or other financial intermediaries; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>extending credit to clients through bridge or margin loans or other arrangements.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">10
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Significant failures by third parties to perform their obligations owed to us could adversely
affect our revenues and perhaps our ability to borrow in the credit markets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Intense competition from existing and new entities may adversely affect our revenues and
profitability.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The securities industry is rapidly evolving, intensely competitive and has few barriers to
entry. We expect competition to continue and intensify in the future. Many of our competitors have
significantly
greater financial, technical, marketing and other resources than we do. Some of our competitors
also offer a wider range of services and financial products than we do and have greater name
recognition and a larger client base. These competitors may be able to respond more quickly to new
or changing opportunities, technologies and client requirements. They may also be able to undertake
more extensive promotional activities, offer more attractive terms to clients, and adopt more
aggressive pricing policies. We may not be able to compete effectively with current or future
competitors and competitive pressures faced by us may harm our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The precautions we take to prevent and detect employee misconduct may not be effective and we could
be exposed to unknown and unmanaged risks or losses.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We run the risk that employee misconduct could occur. Misconduct by employees could include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>employees binding us to transactions that exceed authorized limits or
present unacceptable risks to us;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>employees hiding unauthorized or unsuccessful activities from us; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the improper use of confidential information.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">These types of misconduct could result in unknown and unmanaged risks or losses to us including
regulatory sanctions and serious harm to our reputation. The precautions we take to prevent and
detect these activities may not be effective. If employee misconduct does occur, our business
operations could be materially adversely affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Failure to comply with net capital requirements could subject us to suspension or revocation by the
SEC or suspension or expulsion by the NASD and the NYSE.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ladenburg Thalmann &#038; Co. is subject to the SEC&#146;s net capital rule which requires the
maintenance of minimum net capital. We compute net capital under the alternate method permitted by
the net capital rule. Under this method, Ladenburg Thalmann &#038; Co. is required to maintain net
capital equal to $250,000. At September&nbsp;30, 2005, Ladenburg Thalmann &#038; Co. had net capital of
$4,965,000 which exceeded its minimum net capital requirement by $4,715,000. The net capital rule
is designed to measure the general financial integrity and liquidity of a broker-dealer. In
computing net capital, various adjustments are made to net worth which exclude assets not readily
convertible into cash. Additionally, the regulations require that certain assets, such as a
broker-dealer&#146;s position in securities, be valued in a conservative manner so as to avoid
over-inflation of the broker-dealer&#146;s net capital. The net capital rule requires that a
broker-dealer maintain a certain minimum level of net capital. The particular levels vary in
application depending upon the nature of the activity undertaken by a firm. Compliance with the net
capital rule limits those operations of broker-dealers which require the intensive use of their
capital, such as underwriting commitments and principal trading activities. The rule also limits
the ability of securities firms to pay dividends or make payments on certain indebtedness such as
subordinated debt as it matures. A significant operating loss or any charge against net capital
could adversely affect the ability of a broker-
</DIV>

<P align="center" style="font-size: 10pt">11
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">dealer to expand or, depending on the magnitude of
the loss or charge, maintain its then present level of business. The NASD and the NYSE may enter
the offices of a broker-dealer at any time, without notice, and calculate the firm&#146;s net capital.
If the calculation reveals a deficiency in net capital, the NASD may immediately restrict or
suspend certain or all of the activities of a broker-dealer, including its ability to make markets.
Ladenburg Thalmann &#038; Co. may not be able to maintain adequate net capital, or its net capital may
fall below requirements established by the SEC, and subject us to disciplinary action in the form
of fines, censure, suspension, expulsion or the termination of business altogether.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risk of losses associated with securities laws violations and litigation.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many aspects of our business involve substantial risks of liability. An underwriter is exposed
to substantial liability under federal and state securities laws, other federal and state laws, and
court decisions, including decisions with respect to underwriters&#146; liability and limitations on
indemnification of underwriters by issuers. For example, a firm that acts as an underwriter may be
held liable for material misstatements or omissions of fact in a prospectus used in connection with
the securities being offered or for statements made by its securities analysts or other personnel.
In recent years, there has been an increasing incidence of litigation involving the securities
industry, including class actions that seek substantial damages. Our underwriting activities will
usually involve offerings of the securities of smaller companies, which often involve a higher
degree of risk and are more volatile than the securities of more established companies. In
comparison with more established companies, smaller companies are also more likely to be the
subject of securities class actions, to carry directors and officers liability insurance policies
with lower limits or not at all, and to become insolvent. Each of these factors increases the
likelihood that an underwriter of a smaller companies&#146; securities will be required to contribute to
an adverse judgment or settlement of a securities lawsuit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the normal course of business, our operating subsidiaries have been and continue to be the
subject of numerous civil actions and arbitrations arising out of customer complaints relating to
our activities as a broker-dealer, as an employer and as a result of other business activities. In
general, the cases involve various allegations that our employees had mishandled customer accounts.
We believe that, based on our historical experience and the reserves established by us, the
resolution of the claims presently pending will not have a material adverse effect on our financial
condition. However, although we typically reserve an amount we believe will be sufficient to cover
any damages assessed against us, we have in the past been assessed damages that exceeded our
reserves. If we misjudged the amount of damages that may be assessed against us from pending or
threatened claims, or if we are unable to adequately estimate the amount of damages that will be
assessed against us from claims that arise in the future and reserve accordingly, our financial
condition may be materially adversely affected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Possible additional issuances will cause dilution.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While
we currently have outstanding 141,349,950 shares of common stock, options and purchase
rights to purchase a total of 23,373,071 shares of common stock and warrants to purchase a total of
200,000 shares of common stock, we are authorized to issue up to 200,000,000 shares of common stock
and are therefore able to issue additional shares without being required under corporate law to
obtain shareholder approval. If we issue additional shares, or if our existing shareholders
exercise their outstanding options, our other shareholders may find their holdings drastically
diluted, which if it occurs, means that they will own a smaller percentage of our company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>We may issue preferred stock with preferential rights that may adversely affect your rights.</B>
</DIV>



<P align="center" style="font-size: 10pt">12
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rights of our shareholders will be subject to and may be adversely affected by the rights
of holders of any preferred stock that we may issue in the future. Our articles of incorporation
authorize our board of directors to issue up to 2,000,000 shares of &#147;blank check&#148; preferred stock
and to fix the rights, preferences, privilege and restrictions, including voting rights, of these
shares without further shareholder approval.
</DIV>
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WARNING REGARDING OUR USE OF FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some of the statements contained in this prospectus are forward-looking that relate to
possible future events, our future performance and our future operations. In some cases, you can
identify these forward-looking statements by the use of words such as &#147;may,&#148; &#147;will,&#148; &#147;should,&#148;
&#147;anticipates,&#148; &#147;believes,&#148; &#147;expects,&#148; &#147;plans,&#148; &#147;future,&#148; &#147;intends,&#148; &#147;could,&#148; &#147;estimate,&#148; &#147;predict,&#148;
&#147;potential,&#148; &#147;continue,&#148; or the negative of these terms or other similar expressions. These
statements are only our predictions. Our actual results could and likely will differ materially
from these forward-looking statements for many reasons, including the risks described above and
appearing elsewhere in this prospectus. We cannot guarantee future results, levels of activities,
performance or achievements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform them to actual results or to changes in our
expectations.
</DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any proceeds from the sale of the shares covered by this prospectus.
However, we have already received $3,226,250 as payment for 7,169,444 of the above 19,944,444
shares which were issued to the selling shareholders and are being registered for resale under this
prospectus. Additionally, we will receive the amounts paid by the selling shareholders upon
exercise of their options and purchase rights to acquire the remaining 12,775,000 of the above
19,944,444 shares being registered under this prospectus. If those options and purchase rights
are exercised in full, we will receive $7,707,375.
</DIV>
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING SHAREHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides certain information with respect to the selling shareholders&#146;
beneficial ownership of our common stock as of November&nbsp;30, 2005 and as adjusted to give effect to
the sale of all of the shares offered by this prospectus. Except as otherwise indicated, the
number of shares reflected in the table has been determined in accordance with Rule&nbsp;13d-3
promulgated under the Securities Exchange Act of 1934, as amended. Under this rule, each selling
shareholder is deemed to beneficially own the number of shares issuable upon exercise or conversion
of warrants, options or other convertible securities it holds that are exercisable or convertible
within 60&nbsp;days from the date of this prospectus. However, for purposes of presentation, we have
included the full amount of the shares being registered by this prospectus and which underlie
options and purchase rights in the number of shares beneficially owned by the individuals holding
the options and purchase rights even though such options and purchase rights may not be exercisable
within 60&nbsp;days. Additionally, for purposes of presentation, it is assumed that the selling
shareholders will exercise all of such options and purchase rights and then resell all of the
shares received as a consequence of their exercise. Unless otherwise indicated, each of the
selling shareholders possesses sole voting and investment power with respect to the securities
shown.
</DIV>

<P align="center" style="font-size: 10pt">13
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Shares Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Shares Beneficially</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Owned</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Before Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>After Offering</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Percentage</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Percentage</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bruce S. Mendelsohn<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,225,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,225,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">L. Keith Mullins<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5,222,222</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5,222,222</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark D. Coe<SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,497,222</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,497,222</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lawrence B. Weissman<SUP style="font-size: 85%; vertical-align: text-top">(7)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3,000,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(8)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3,000,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(8)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Barry Rabkin<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">*</TD>

    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Steven Cohen<SUP style="font-size: 85%; vertical-align: text-top">(10)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,000,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(11)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,000,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(11)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than 1%.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Mendelsohn has served as our managing director and senior executive vice president since
July&nbsp;2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 2,000,000 shares of common stock issuable upon exercise of an option held by Mr.
Mendelsohn described below.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Mullins has served as executive vice president of Ladenburg Thalmann &#038; Co. since June&nbsp;2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 3,000,000 shares of common stock issuable upon exercise of an option held by Mr.
Mullins described below.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Coe has served as managing director and chief investment officer of Ladenburg Thalmann &#038;
Co. since July&nbsp;2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 2,275,000 shares of common stock issuable upon exercise of an option and purchase
rights held by Mr.&nbsp;Coe described below.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Weissman has served as chief investment strategist of Ladenburg Thalmann Asset Management
Inc., a wholly owned subsidiary of Ladenburg Thalmann &#038; Co., since July&nbsp;2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 2,000,000 shares of common stock issuable upon exercise of an option and purchase
rights held by Mr.&nbsp;Weissman described below. Does not include 500,000 shares of common stock
which may be issuable upon exercise of an option that will be issued to Mr.&nbsp;Weissman after his
first year of employment with Ladenburg Thalmann Asset Management, assuming he is still
employed by Ladenburg Thalmann Asset Management at that time.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Rabkin has been employed by Ladenburg Thalmann &#038; Co. Inc. since August&nbsp;2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Cohen has been employed by Ladenburg Thalmann &#038; Co. Inc. since August&nbsp;2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 3,500,000 shares of common stock issuable upon exercise of purchase rights held by
Mr.&nbsp;Cohen described below.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2005, we entered into an employment agreement with Bruce S. Mendelsohn pursuant
to which Mr.&nbsp;Mendelsohn became our managing director and senior executive vice president. Under
the employment agreement, Mr.&nbsp;Mendelsohn purchased 225,000 shares of our common stock at $0.45 per
share. We also granted Mr.&nbsp;Mendelsohn an option to purchase 2,000,000 shares of our common stock
at a
</DIV>

<P align="center" style="font-size: 10pt">14
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">price of $0.645 per share. The option, which expires on May&nbsp;31, 2015, vested as to 200,000
shares of common stock on the date of grant and will vest as to the remainder in four equal annual
installments of 450,000 shares commencing on June&nbsp;1, 2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2005, Ladenburg Thalmann &#038; Co. entered into an employment agreement with L. Keith
Mullins pursuant to which Mr.&nbsp;Mullins became an executive vice president of Ladenburg Thalmann &#038;
Co. Under the employment agreement, Mr.&nbsp;Mullins purchased 2,222,222 shares of our common stock at
$0.45 per share. We also granted Mr.&nbsp;Mullins an option to purchase 3,000,000 shares of our common stock
at a price of $0.645 per share. The option, which expires on May&nbsp;31, 2015, vests in four equal
annual installments of 750,000 shares commencing on June&nbsp;1, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2005, Ladenburg Thalmann &#038; Co. entered into an employment agreement with Mark D. Coe
pursuant to which Mr.&nbsp;Coe became the managing director and chief investment officer of Ladenburg
Thalmann &#038; Co. Under the employment agreement, Mr.&nbsp;Coe purchased 2,222,222 shares of our common
stock at $0.45 per share. He also committed to purchase an additional 775,000 shares of common
stock (&#147;Coe Commission Shares&#148;) at $0.645 per share through the use of net commissions payable to
Mr.&nbsp;Coe under the employment agreement. We also granted Mr.&nbsp;Coe an option to purchase 1,500,000
shares of our common stock at a price of $0.645 per share. The option, which expires on May&nbsp;31,
2015, will vest as to 250,000 shares on each of the first, second, third and fourth anniversaries
of the date of grant and an additional 125,000 shares on the third anniversary of the date of grant
and an additional 375,000 shares on the fourth anniversary of the date of grant; provided, however,
that the last 500,000 shares underlying the option shall not become exercisable unless and until
all 775,000 Coe Commission Shares have been purchased by Mr.&nbsp;Coe as described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July&nbsp;2005, Ladenburg Thalmann Asset Management Inc., a wholly owned subsidiary of Ladenburg
Thalmann &#038; Co., entered into an employment agreement with Lawrence B. Weissman pursuant to which
Mr.&nbsp;Wiessman became Ladenburg Thalmann Asset Management&#146;s chief investment strategist. Under the
employment agreement, Mr.&nbsp;Weissman purchased 1,000,000 shares of our common stock at $0.45 per
share. He also committed to purchase an additional 1,000,000 shares of common stock at $0.58 per
share through the use of certain compensation to be earned by him in each calendar year. We also
granted Mr.&nbsp;Weissman an option to purchase 1,000,000 shares of common stock at $0.58 per share.
The option, which expires on July&nbsp;17, 2015, will vest as to 250,000 shares of common stock on each
of the first, second, third and fourth anniversaries of the date of grant. Additionally, after the
first year of Mr.&nbsp;Weissman&#146;s employment, we will grant Mr.&nbsp;Weissman a nine-year option to purchase
an additional 500,000 shares of common stock at the fair market value on the date of grant,
assuming he is still employed by Ladenburg Thalmann Asset Management Inc. at that time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August&nbsp;2005, Ladenburg Thalmann &#038; Co. entered into an employment agreement with Barry
Rabkin. Under the employment agreement, Mr.&nbsp;Rabkin purchased 1,000,000 shares of our common stock
at $0.45 per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August&nbsp;2005, Ladenburg Thalmann &#038; Co. entered into an employment agreement with Steven
Cohen. Under the employment agreement, Mr.&nbsp;Cohen purchased 500,000 shares of our common stock at
$0.45 per share. He also committed to purchase an additional 3,500,000 shares of common stock at
$0.53 per share through the use of certain compensation to be earned by him under the employment
agreement.
</DIV>
<DIV align="left">
<A name="106"></A>
</DIV>


<P align="center" style="font-size: 10pt">15
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The sale or distribution of the common stock may be effected directly to purchasers by the
selling shareholders, or by any donee, pledgee or transferee of the selling shareholders as
principals, or through one or more underwriters, brokers, dealers or agents from time to time in
one or more public or private transactions by any legally available means, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>on the American Stock Exchange or in the over-the-counter market;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>otherwise than on the American Stock Exchange or in the over-the-counter market;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through the writing of put or call options relating to the common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>entering into hedging transactions with broker-dealers, and the broker-dealers may
in turn engage in short sales of the shares as part of establishing and maintaining the
hedge positions they entered into with the selling shareholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>entering into option or loan transactions that require the selling shareholder to
deliver shares to a broker-dealer which may then resell or otherwise
transfer the shares pursuant to this prospectus to cover the broker-dealer&#146;s own short sales of the
shares or to cover short sales of the shares by customers of the broker-dealer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>engaging in short sales of the common stock and delivering shares to cover such
short positions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the pledging of common stock to a broker-dealer and upon the default by the selling
shareholder on the pledge the broker-dealer may sell the pledged shares in accordance
with this prospectus;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through the distribution of the common stock by any selling shareholder to its
partners, members or shareholders; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through a combination of these methods of sale.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Any of these transactions may be effected:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at market prices prevailing at the time of sale;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at prices related to the prevailing market prices;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at varying prices determined at the time of sale; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>at negotiated or fixed prices.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The sale or distribution of common stock under this prospectus will be made in compliance with
the applicable provisions of NASD Conduct Rule&nbsp;2720. If the selling shareholders effect
transactions to or through underwriters, brokers, dealers or agents, these underwriters, brokers,
dealers or agents may receive compensation in the form of discounts, concessions or commissions
from the selling shareholders or purchasers. These discounts, concessions or commissions may be in
excess of those customary for the types of
</DIV>

<P align="center" style="font-size: 10pt">16
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">transactions involved. However, no NASD member or
independent broker-dealer will receive a commission or discount in excess of 8%.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders and any broker, dealer or agent that assists in the sale of the
common stock may be deemed to be underwriters within the meaning of Section&nbsp;2(a)(11) of the
Securities Act. Accordingly, any profit on the sale of common stock by them and any discounts,
concessions or commissions received by any of the underwriters, brokers, dealers or agents may be
deemed to be underwriting discounts and commissions under the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling shareholders may also resell all or a portion of the common stock in open market
transactions in reliance upon Rule&nbsp;144 under the Securities Act. In these cases, they must meet
the criteria and conform to the requirements of that rule.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will pay all of the costs, expenses and fees incident to the registration of the shares
offered under this prospectus. The selling shareholders are responsible for any costs, expenses
and fees related to the offer and sale of the common stock to the public, including brokerage
commissions, fees and discounts of underwriters, brokers, dealers and agents.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The legality of the common stock offered by this prospectus has been passed upon by Graubard
Miller, New York, New York.
</DIV>
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our consolidated financial statements as of December&nbsp;31, 2004 and 2003 and for each of the
three years in the period ended December&nbsp;31, 2004 appearing in our Annual Report on Form 10-K for
the year ended December&nbsp;31, 2004, have been audited by Eisner LLP, an independent registered public
accounting firm, as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by reference in reliance
upon the report of Eisner LLP given upon their authority as experts in accounting and auditing.
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND ADDITIONAL INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file annual, quarterly and current reports, proxy statements and other information with the
SEC. Our SEC filings are available to the public over the Internet at the SEC&#146;s web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC&#146;s public reference
room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information about the public reference room.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC allows us to incorporate by reference the information we file with it, which means
that we can disclose important information to you by referring you to those documents. Any
statement contained in a document incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained herein
modifies or supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this prospectus. Any
information that we file after the date of this prospectus with the SEC will automatically update
and supersede the information contained in this prospectus. This prospectus incorporates by
reference our documents listed below and any future filings
</DIV>

<P align="center" style="font-size: 10pt">17
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">we make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act until all of the securities are sold:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our annual report on Form 10-K for the fiscal year ended December&nbsp;31, 2004;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our quarterly reports on Form 10-Q for the quarters ended March&nbsp;31, 2005, June&nbsp;30,
2005 and September&nbsp;30, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated April&nbsp;14, 2005 and filed with the SEC on April
19, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated June&nbsp;13, 2005 and filed with the SEC on June
15, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated August&nbsp;1, 2005 and filed with the SEC on August
5, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated September&nbsp;26, 2005 and filed with the SEC on
September&nbsp;30, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated November&nbsp;1, 2005 and filed with the SEC on
November&nbsp;8, 2005, as amended on November&nbsp;21, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated November&nbsp;30, 2005 and filed with the SEC on
November&nbsp;30, 2005; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the description of our common stock contained in our registration statement on Form
8-A (No.&nbsp;1-15799) filed with the SEC pursuant to Section 12(b) of the Exchange Act.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Potential investors may obtain a copy of any of our SEC filings without charge by written or
oral request directed to Ladenburg Thalmann Financial Services Inc., Attention: Investor Relations,
590 Madison Avenue, 34th Floor, New York, New York 10022, (212)&nbsp;409-2000.
</DIV>


<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<!-- link1 "PART II" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</DIV>

<!-- link2 "Item&nbsp;3. Incorporation of Documents by Reference" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Incorporation of Documents by Reference.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents that we have previously filed with the SEC are incorporated by
reference in this registration statement:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our annual report on Form 10-K for the fiscal year ended December&nbsp;31, 2004;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our quarterly report on Form 10-Q for the quarter ended
March&nbsp;31, 2005, June&nbsp;30, 2005 and September&nbsp;30, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated April&nbsp;14, 2005 and filed with the SEC
on April&nbsp;19, 2005</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated June&nbsp;13, 2005 and filed with the SEC
on June&nbsp;15, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated on Form 8-K dated August&nbsp;1, 2005 and
filed with the SEC on August&nbsp;5, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated September&nbsp;26, 2005 and filed with the
SEC on September&nbsp;30, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated November&nbsp;1, 2005 and filed with the
SEC on November&nbsp;8, 2005, as amended on November&nbsp;21, 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current report on Form 8-K dated November&nbsp;30, 2005 and filed with the
SEC on November&nbsp;30, 2005; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the description of our common stock, par value $.0001 per share, contained
in our registration statement on Form&nbsp;8-A (No.&nbsp;1-15799) filed with the SEC pursuant to
Section 12(b) of the Securities Exchange Act of 1934, including any subsequent
amendments or reports filed for the purpose of updating this description.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents subsequently filed by us pursuant to Sections&nbsp;13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment which indicates that all the
securities offered have been sold or which deregisters all securities then remaining unsold, will
be deemed to be incorporated by reference in this registration statement and to be a part of this
registration statement from the respective date of filing. Any statement contained in a document
incorporated by reference in this registration statement will be modified or superseded for all
purposes to the extent that a statement contained in this registration statement or in any other
subsequently filed document which is incorporated by reference modifies or replaces the statement.
</DIV>
<!-- link2 "Item&nbsp;4. Description of Securities" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Description of Securities.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is registered under Section 12(b) of the Exchange Act.
</DIV>
<!-- link2 "Item&nbsp;5. Interests of Named Experts and Counsel" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. Interests of Named Experts and Counsel.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<!-- link2 "Item&nbsp;6. Indemnification of Directors and Officers" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. Indemnification of Directors and Officers.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;607.0850 of the 1989 Business Corporation Act of the State of Florida empowers a
Florida corporation to indemnify any person who was or is a party to any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal (other than an action by, or in the right of, the
corporation) by reason of the fact that he or she is or was a director, officer, employee, or agent
of the corporation, or is or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise
against liability including any obligation to pay a judgment, settlement, penalty, fine (including
an excise tax assessed with respect to any employee benefit plan), and expenses (including
counsel&#146;s fees) actually and reasonably incurred in connection with the proceeding and any
subsequent appeals, if he or she acted in good faith and in a manner that he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was
unlawful. The termination of any proceeding by judgment, order, settlement, or conviction or upon a
plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person
did not act in good faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was unlawful.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the case of an action by or in the right of the corporation, Section&nbsp;607.0850 empowers a
corporation to indemnify any person who was or is a party to any threatened, pending, or completed
action, suit, or other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal, in any of the capacities set forth above against
expenses (including counsel&#146;s fees for the proceeding as well as for any appeal) and amounts paid
in settlement not exceeding, in the judgment of the board of directors, the estimated expense of
litigating the proceeding to conclusion, actually and reasonably incurred in connection with the
defense or settlement of the proceeding or any subsequent appeals, if the person acted in good
faith and in a manner that he or she reasonably believed to be in or not opposed to the best
interests of the corporation. With respect to any claim, issue, or matter as to which the person
is adjudged to be liable to the corporation, indemnification is not permitted unless, and only to
the extent that, the court in which the proceeding was brought, or any other court of competent
jurisdiction, determines upon application that, despite the adjudication of liability but in view
of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for
expenses that the court deems proper.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;607.0850 further provides that a Florida corporation is required to indemnify a
director, officer, employee, or agent against expenses (including counsel&#146;s fees) actually and
reasonably incurred by the person in connection with defending any type of proceeding referred to
above or in defending any claim, issue, or matter involved in the proceeding as to which the person
has been successful on the merits or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other than pursuant to a court order, a Florida corporation may provide indemnification only
as authorized in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he or she has met the applicable
standard of conduct. The determination is to be made:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by the board of directors upon majority vote of a quorum consisting of
directors who were not party to the proceeding;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if a quorum is not obtainable, or, even if obtainable, by majority vote of
a committee consisting solely of two or more directors who are not parties to the
proceeding at the time, duly designated by the board of directors (in which interested
directors may participate);</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by independent legal counsel selected by majority vote of the board of
directors who were not party to the proceeding or a committee so designated by the
board of directors; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by shareholders upon majority vote of a quorum consisting of shareholders
who were not parties to the proceeding or, if a quorum is not obtainable, by a majority
vote of shareholders who were not parties to the proceeding.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any indemnification provided for by Section&nbsp;607.0850 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled. A Florida corporation is entitled to
make any other or further indemnification of any of its directors, officers, employees, or agents,
under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as
to action in his or her official capacity and as to action in another capacity while holding his or
her office. However, indemnification shall not be made to or on behalf of any director, officer,
employee, or agent if a judgment or other final adjudication establishes that his or her actions,
or omissions to act, were material to the cause of action so adjudicated and constitute:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a violation of criminal law, unless the director, officer, employee or
agent had reasonable cause to believe his or her conduct was lawful or had no
reasonable cause to believe his or her conduct was unlawful;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a transaction from which the director, officer, employee or agent derived
an improper benefit;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the case of a director, a circumstance under which he is liable for an
unlawful distribution; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a willful misconduct or a conscious disregard for the best interests of the
corporation in a proceeding by or in the right of the corporation to procure a judgment
in its favor or in a proceeding by or in the right of a shareholder.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indemnification provided for by Section&nbsp;607.0850 shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director, officer, employee,
or agent and shall inure to the benefit of the person&#146;s heirs, executors, and administrators.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Florida corporation may also purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the corporation or who is or was serving at the
request of the corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against any liability asserted against the
person and incurred by him or her in any such capacity or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify the person against liability under
Section&nbsp;607.0850.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;XI of our articles of incorporation, as amended, and Article&nbsp;VII of our bylaws provide
for indemnification of our directors and officers to the fullest extent permitted by law, as now in
effect or later amended. Article&nbsp;VII of our bylaws provides that expenses incurred by a director
or officer in defending a civil or criminal action, suit, or proceeding may be paid by us in
advance of a final disposition upon receipt of an undertaking by or on behalf of the director or
officer to repay the advanced amount if he or she is ultimately found not to be entitled to
indemnification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may provide liability insurance for each of our directors and officers for certain losses
arising from claims or charges made against them while acting in their capacities as directors or
officers. We currently maintain this type of liability insurance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, we have entered into indemnification agreements with all of our directors
and executive officers whereby we have agreed to indemnify, and advance expenses to, each
indemnitee to the fullest extent permitted by applicable law. The indemnification agreements will
continue until and terminate upon the later of (i)&nbsp;ten years after the date that the indemnitee has
ceased to serve as a
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">director or officer for us or (ii)&nbsp;the final termination of all pending
proceedings in respect of which the indemnitee is granted rights of indemnification or advancement
of expenses or any proceeding commenced by the indemnitee.
</DIV>

<!-- link2 "Item&nbsp;7. Exemption from Registration Claimed" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7. Exemption from Registration Claimed.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not Applicable.
</DIV>
<!-- link2 "Item&nbsp;8. Exhibits" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8. Exhibits.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Incorporated by</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Reference from</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Exhibit No.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Description</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Document</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">No. in Document</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement, dated as of June&nbsp;1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Bruce S. Mendelsohn
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Bruce S. Mendelsohn
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement, dated as of June&nbsp;1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and L. Keith Mullins
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and L. Keith Mullins
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement, dated as of June&nbsp;1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Mark D. Coe
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Mark D. Coe
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement between Ladenburg Thalmann
Financial Services Inc. and Mark D. Coe
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement, dated as of July&nbsp;18, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Lawrence B. Weissman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">B
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;4.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Lawrence B. Weissman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">B
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement, dated as of July&nbsp;18, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Lawrence B. Weissman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">B
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Steven Cohen
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">C
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement between Ladenburg Thalmann
Financial Services Inc. and Steven Cohen
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">C
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Incorporated by</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Reference from</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Exhibit No.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Description</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Document</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">No. in Document</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incentive Stock Purchase Agreement between
Ladenburg Thalmann Financial Services Inc. and
Steven Cohen
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">C
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Barry Rabkin
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">C
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Graubard Miller
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">Filed Herewith
</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Eisner LLP
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">Filed Herewith
</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Graubard Miller (Included in Exhibit&nbsp;5.1)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (Included on Signature page)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">A.</TD>
    <TD>&nbsp;</TD>
    <TD>Current Report on Form 8-K, dated June&nbsp;13, 2005 and filed with the SEC on June&nbsp;15,
2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">B.</TD>
    <TD>&nbsp;</TD>
    <TD>Current Report on Form 8-K, dated August&nbsp;1, 2005 and filed with the SEC on August&nbsp;5,
2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">C.</TD>
    <TD>&nbsp;</TD>
    <TD>Current Report on Form 8-K, dated September&nbsp;26, 2005 and filed with the SEC on
September&nbsp;30, 2005.</TD>
</TR>

</TABLE>


<!-- link2 "Item&nbsp;9. Undertakings" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9. Undertakings.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The undersigned registrant hereby undertakes:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial <I>bona fide </I>offering thereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant&#146;s annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan&#146;s annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial <I>bona fide </I>offering
thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the registration of the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<!-- link1 " SIGNATURES " -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8
and has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on this 30<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day
of November, 2005.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>LADENBURG THALMANN FINANCIAL SERVICES INC.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Mark D. Klein</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Mark D. Klein</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: President and Chief Executive Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>POWER OF ATTORNEY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Howard M. Lorber, Mark D. Klein and Salvatore Giardina, and each of them, with full power
to act without the others, such person&#146;s true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this registration statement, including post-effective
amendments, and to file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all intents and purposes
as he might or could do in person, and hereby ratifies and confirms all that said attorneys-in-fact
and agents, each acting alone, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Mark D. Klein
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>

    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mark D. Klein
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Executive Officer)
</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Salvatore Giardina
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>

    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Salvatore Giardina
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>(Principal Accounting and Financial Officer)
</TD>

    <TD>&nbsp;</TD>


</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Henry C. Beinstein
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Henry C. Beinstein</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Robert J. Eide
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert J. Eide</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dr. Phillip Frost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Brian S. Genson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Brian S. Genson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Richard J. Lampen
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Richard J. Lampen</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Howard M. Lorber</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Vincent A. Mangone
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Vincent A. Mangone</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Benjamin D. Pelton
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Benjamin D. Pelton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Jeffrey S. Podell
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jeffrey S. Podell</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Steven A. Rosen
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Steven A. Rosen</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Richard J. Rosenstock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Mark Zeitchick
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">November&nbsp;30, 2005</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="1" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mark Zeitchick</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<!-- link1 "EXHIBIT INDEX" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Incorporated by</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Reference from</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Exhibit No.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Description</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Document</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">No. in Document</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement, dated as of June&nbsp;1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Bruce S. Mendelsohn
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Bruce S. Mendelsohn
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement, dated as of June&nbsp;1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and L. Keith Mullins
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and L. Keith Mullins
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement, dated as of June&nbsp;1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Mark D. Coe
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Mark D. Coe
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement between Ladenburg Thalmann
Financial Services Inc. and Mark D. Coe
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement, dated as of July&nbsp;18, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Lawrence B. Weissman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">B
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Lawrence B. Weissman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">B
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement, dated as of July&nbsp;18, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Lawrence B. Weissman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">B
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Steven Cohen
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">C
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement between Ladenburg Thalmann
Financial Services Inc. and Steven Cohen
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">C
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incentive Stock Purchase Agreement between
Ladenburg Thalmann Financial Services Inc. and
Steven Cohen
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">C
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Barry Rabkin
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">C
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
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    <TD width="64%">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Incorporated by</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Reference from</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Exhibit No.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Description</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Document</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">No. in Document</TD>
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<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Graubard Miller
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">Filed Herewith
</TD>
</TR>
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    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Eisner LLP
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">Filed Herewith
</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Graubard Miller (Included in Exhibit&nbsp;5.1)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
</TR>
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    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (Included on Signature page)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: WP TypographicSymbols">&#151;</FONT>
</TD>
    <TD>&nbsp;</TD>
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</TD>
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    <TD width="96"></TD>
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<TR valign="top">
    <TD nowrap align="left">A.</TD>
    <TD>&nbsp;</TD>
    <TD>Current Report on Form 8-K, dated June&nbsp;13, 2005 and filed with the SEC on June&nbsp;15,
2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">B.</TD>
    <TD>&nbsp;</TD>
    <TD>Current Report on Form 8-K, dated August&nbsp;1, 2005 and filed with the SEC on August&nbsp;5,
2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">C.</TD>
    <TD>&nbsp;</TD>
    <TD>Current Report on Form 8-K, dated September&nbsp;26, 2005 and filed with the SEC on September
30, 2005</TD>
</TR>

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<P align="center" style="font-size: 10pt">&nbsp;
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Ladenburg Thalmann Financial Services, Inc.
As filed with the Securities and Exchange Commission on November 30, 2005
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Ladenburg Thalmann Financial Services Inc.
(Exact Name of Registrant as Specified in Its Charter)
Florida
65-0701248
(State or Other Jurisdiction of
(I.R.S. Employer
Incorporation or Organization)
Identification Number)
590 MADISON AVENUE, 34
th
FLOOR
NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices)
OTHER EMPLOYEE BENEFIT PLANS
(Full Title of the Plan)
MARK D. KLEIN
, President and Chief Executive Officer
Ladenburg Thalmann Financial Services Inc.
590 Madison Avenue, 34
th
Floor
New York, New York 10022
(212) 409-2000
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)
with a copy to:
DAVID ALAN MILLER, ESQ.
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Telephone: (212) 818-8800
CALCULATION OF REGISTRATION FEE
Proposed maximum
Proposed maximum
Title of Securities
Amount to be
offering price
aggregate
Amount of
to be registered
Registered
(1)
per share
(2)
offering price
registration fee
Common Stock, par value
$.0001 per share
("Common Stock"), issued
under employee benefit
plans ("Employee Benefit
Plans")
7,169,444
$ 0.53
$ 3,799,805.32
$406.58
Common Stock issuable
upon exercise of options
under Employee Benefit
Plans
7,500,000
$ 0.53
$ 3,975,000.00
$425.33
Common Stock issuable
under Employee Benefit
Plans
5,275,000
$ 0.53
$ 2,795,750.00
$299.15
TOTAL
$1,131.06
(1)
Pursuant to Rule 416, there are also being registered additional shares of common stock
as may become issuable as a result of
anti-dilution
provisions contained in such Employee
Benefit Plans.
(2)
Based on the average of the high and low price of a share of our common stock as reported by
the American Stock Exchange on November 25, 2005 in accordance with Rules 457(c) and 457(h)
promulgated under the Securities Act of 1933, as amended.
In accordance with the provisions of Rule 462 promulgated under the Securities Act, this
registration statement will become effective upon filing with the Securities and Exchange
Commission.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Item 2. Registrant Information and Employee Plan Annual Information.
LADENBURG THALMANN FINANCIAL SERVICES INC.
19,944,444 shares of common stock
This prospectus relates to 19,944,444 shares of our common stock that may be offered for
resale for the account of the selling shareholders set forth in this prospectus under the heading
"Selling Shareholders" beginning on page 13. The selling shareholders may sell these shares in a
variety of transactions as described under the heading "Plan of
Distribution" beginning on page 16.
Our common stock is traded on the American Stock Exchange under the symbol "LTS." On November
28, 2005, the last reported sale price of our common stock was $0.53.
We will not receive any proceeds from the sale of the shares covered by this prospectus.
However, we have already received $3,226,250 as payment for 7,169,444 of the above 19,944,444
shares which were issued to the selling shareholders and are being registered for resale under this
prospectus. Additionally, we will receive the amounts paid by the selling shareholders upon
exercise of their options and purchase rights to acquire the remaining 12,775,000 of the above
19,944,444 shares being registered under this prospectus. If those options and purchase rights
are exercised in full, we will receive $7,707,375.
Investing in our common stock involves a high degree of risk. See "Risk Factors" beginning on
page 4 for a discussion of information that should be considered in connection with an investment
in our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is November 30, 2005
You should rely only on the information contained or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling shareholders are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of our common stock.
Table of Contents
Page
PROSPECTUS SUMMARY
3
RISK FACTORS
4
WARNING REGARDING OUR USE OF FORWARD-LOOKING STATEMENTS
12
USE OF PROCEEDS
13
SELLING SHAREHOLDERS
13
PLAN OF DISTRIBUTION
16
LEGAL MATTERS
17
EXPERTS
17
WHERE YOU CAN FIND ADDITIONAL INFORMATION
17
2
PROSPECTUS SUMMARY
We are engaged in retail and institutional securities brokerage, investment banking services
and investment activities through our principal operating subsidiary, Ladenburg Thalmann & Co. Inc.
We are committed to establishing a significant presence in the financial services industry by
meeting the varying investment needs of our corporate, institutional and retail clients.
Ladenburg Thalmann & Co. is a full service investment banking and brokerage firm that has been
a member of the New York Stock Exchange since 1879. It provides its services principally for
middle market and emerging growth companies and high net worth individuals through a coordinated
effort among corporate finance, capital markets, investment management, brokerage and trading
professionals. Ladenburg is subject to regulation by, among others, the Securities and Exchange
Commission, the NYSE and the National Association of Securities Dealers, Inc. and is a member of
the Securities Investor Protection Corporation. Its private client services and institutional
sales departments serve approximately 70,000 accounts nationwide and its asset management area
provides investment management and financial planning services to numerous individuals and
institutions.
Recent Events
In June, July and August 2005, we and our subsidiaries entered into employment agreements with
various individuals to join our firm. In connection with the hiring of these individuals, we
issued them shares of common stock and options and rights to purchase additional shares of common
stock and we agreed to register for re-sale the shares of common stock received and to be received
by them.
Corporate History
We were incorporated under the laws of the State of Florida in February 1996. Ladenburg
Thalmann & Co. was incorporated under the laws of the State of Delaware in December 1971 and became
our wholly owned subsidiary in May 2001. Our principal executive offices, as well as those of
Ladenburg Thalmann & Co., are located at 590 Madison Avenue, New York, New York 10022 and both of
our telephone numbers are (212) 409-2000. Ladenburg Thalmann & Co. has currently branch offices
located in Los Angeles, California, Palo Alto, California, Boca Raton, Florida, Lincolnshire,
Illinois and Melville, New York. Ladenburg Thalmann & Co. maintains a website located at
www.ladenburg.com.
3
RISK FACTORS
You should carefully consider the risks described below before you decide to invest in our
company. The risks described below are not the only ones facing us. Additional risks not
presently known to us or that we currently believe are immaterial may also impair our business
operations. Our business, financial condition or results of operation could be materially
adversely affected by any of these risks. The trading price of our common stock could decline
because of any one of these risks, and you may lose all or part of your investment.
We have incurred, and may continue to incur, significant operating losses.
We incurred significant losses from operations during each of the past four calendar years. We
cannot assure you that we will be able to achieve or sustain revenue growth, profitability or
positive cash flow on either a quarterly or annual basis or that profitability, if achieved, will
be sustained. Although we believe that we have adequate cash and regulatory capital to fund our
current level of operating activities through September 30, 2006, if we are unable to achieve or
sustain profitability, we may not be financially viable in the future and may have to curtail,
suspend or cease operations.
If we are unable to repay our outstanding indebtedness obligations when due, our operations may be
materially adversely affected.
Currently, we have an aggregate of approximately $6.3 million of indebtedness, of which $5.0
million is due on December 31, 2006 and approximately $1.3 million from our clearing broker is
scheduled to be forgiven as follows: $667,000 in November 2005 and $666,000 in November 2006.
However, if the clearing agreement is terminated for any reason prior to the loan maturity date,
the loan, less any amount that has been forgiven through the date of the termination, plus
interest, must be repaid on demand. We cannot assure you that our operations will generate funds
sufficient to repay these or other future debt obligations as they come due. Our failure to repay
our indebtedness and make interest payments as required by our debt obligations could have a
material adverse affect on our operations.
We are currently subject to extensive securities regulation and the failure to comply with these
regulations could subject us to penalties or sanctions.
The securities industry and our business is subject to extensive regulation by the SEC, state
securities regulators and other governmental regulatory authorities. We are also regulated by
industry self-regulatory organizations, including the NYSE, the NASD and the Municipal Securities
Rulemaking Board. The regulatory environment is also subject to change and we may be adversely
affected as a result of new or revised legislation or regulations imposed by the SEC, other federal
or state governmental regulatory authorities, or self-regulatory organizations. We also may be
adversely affected by changes in the interpretation or enforcement of existing laws and rules by
these governmental authorities and self-regulatory organizations.
Ladenburg Thalmann & Co. is a registered broker-dealer with the SEC and a member firm of the
NYSE. Broker-dealers are subject to regulations which cover all aspects of the securities business,
including:
•
sales methods and supervision;
•
trading practices among broker-dealers;
4
•
use and safekeeping of customers' funds and securities;
•
capital structure of securities firms;
•
record keeping; and
•
the conduct of directors, officers and employees.
Compliance with many of the regulations applicable to us involves a number of risks, particularly
in areas where applicable regulations may be subject to varying interpretation. The requirements
imposed by these regulators are designed to ensure the integrity of the financial markets and to
protect customers and other third parties who deal with us. Consequently, these regulations often
serve to limit our activities, including through net capital, customer protection and market
conduct requirements. Much of the regulation of broker-dealers has been delegated to
self-regulatory organizations, principally the NASD Regulation, Inc., the regulatory arm of the
NASD, and the NYSE, which are our primary regulatory agencies. NASD Regulation and the NYSE adopt
rules, subject to approval by the SEC, that govern its members and conducts periodic examinations
of member firms' operations.
If we are found to have violated any applicable regulation, formal administrative or judicial
proceedings may be initiated against us that may result in:
•
censure;
•
fine;
•
civil penalties, including treble damages in the case of insider trading violations;
•
the issuance of cease-and-desist orders;
•
the deregistration or suspension of our broker-dealer activities;
•
the suspension or disqualification of our officers or employees; or
•
other adverse consequences.
The imposition of any of these or other penalties could have a material adverse effect on our
operating results and financial condition.
We may incur significant losses from trading and investment activities due to market fluctuations
and volatility.
We generally maintain trading and investment positions in the equity markets. To the extent
that we own assets, i.e., have long positions, in those markets, a downturn in those markets could
result in losses from a decline in the value of those long positions. Conversely, to the extent
that we have sold assets that we do not own, i.e., have short positions, in any of those markets,
an upturn in those markets could expose us to potentially unlimited losses as we attempt to cover
our short positions by acquiring assets in a rising market.
We may from time to time have a trading strategy consisting of holding a long position in one
security and a short position in another security from which we expect to earn revenues based on
changes
5
in the relative value of the two securities. If, however, the relative value of the two
securities changes in a direction or manner that we did not anticipate or against which we are not
hedged, we might realize a loss
in those paired positions. In addition, we maintain trading positions that can be adversely
affected by the level of volatility in the financial markets, i.e., the degree to which trading
prices fluctuate over a particular period, in a particular market, regardless of market levels.
We may need to raise additional funds in the near future.
Our capital requirements continue to be adversely affected by our inability to generate cash
from operations. We have been forced to rely on borrowings and proceeds from the sale of our common
stock in order to generate working capital for our operations. Accordingly, we may need to seek to
raise additional capital through other available sources, including through equity offerings or
borrowing additional funds on a short-term basis from third parties, including our current
debtholders, shareholders and clearing broker. As of September 30, 2005, we had cash and cash
equivalents of approximately $5,776,000. Accordingly, if we continue to be unable to generate cash
from operations and are unable to find sources of funding, it would have an adverse impact on our
liquidity and operations.
Our expenses may increase due to unresolved real estate commitments.
Ladenburg Capital Management Inc., one of our former operating subsidiaries, may have
potential liability under a terminated lease for office space in New York City which it was forced
to vacate during 2001 due to the events of September 11, 2001. Ladenburg Capital Management no
longer occupies the space and believes it has no further lease obligation pursuant to the terms of
the lease. This lease, which, had it not terminated as a result of the events of September 11,
2001, would have expired by its terms in March 2010, provides for future minimum payments
aggregating approximately $3,164,000, payable $176,000 in 2005, $703,000 per year from 2006 through
2009 and $176,000 in 2010. In addition, minimum payments for the period from September 11, 2001
through September 30, 2005 which were not paid by Ladenburg Capital Management amounted to
$2,649,000. Ladenburg Capital Management is currently in litigation with the landlord in which it
is seeking judicial determination of the termination of the lease. If Ladenburg Capital Management
is not successful in this litigation, it plans to sublease the property. Ladenburg Capital
Management has provided for estimated costs in connection with this lease and has recorded a
liability at September 30, 2005 and December 31, 2004. Additional costs may be incurred in
connection with terminating this lease, and if not terminated, to the extent Ladenburg Capital
Management does not sublease the office space for an amount at least equal to the lease
obligations. Such costs may have a material adverse effect on Ladenburg Capital Management's
financial position and liquidity.
Additionally, we have ceased using portions of our office space in New York City and have
subleased these areas. Should any of the sub-tenants not renew or renew for a sub-rental less than
Ladenburg Thalmann & Co.'s lease commitments, or not pay their rent for an extended period of time,
it may have a material adverse effect on Ladenburg Thalmann & Co.'s financial position and
liquidity.
Our business could be adversely affected by a breakdown in the financial markets.
As a securities broker-dealer, our business is materially affected by conditions in the
financial markets and economic conditions generally, both in the United States and elsewhere around
the world. Many factors or events could lead to a breakdown in the financial markets including war,
terrorism, natural catastrophes and other types of disasters. These types of events could cause
people to begin to lose confidence in the financial markets and their ability to function
effectively. If the financial markets are
6
unable to effectively prepare for these types of events
and ease public concern over their ability to function, our revenues are likely to decline and our
operations will be adversely affected.
Our revenues may decline in adverse market or economic conditions.
During the past several years, unfavorable financial and economic conditions have reduced the
number and size of the transactions in which we provide underwriting services, merger and
acquisition consulting and other services. Our investment banking revenues, in the form of
financial advisory and underwriting fees, are directly related to the number and size of the
transactions in which we participate and have been adversely affected by the sustained downturn in
the securities markets that prevailed through the middle of 2003. Additionally, the downturn in
market conditions led to a decline in the volume of transactions that we executed for our customers
and, therefore, to a decline in the revenues we received from commissions and spreads. If these
adverse financial and economic conditions return and persist for any extended period of time, we
will incur a further decline in transactions and revenues that we receive from commissions and
spreads.
We depend on our senior employees and the loss of their services could harm our business.
Our success is dependent in large part upon the services of several of our senior executives
and employees, including those of Ladenburg Thalmann & Co. We do not maintain and do not intend to
obtain key man insurance on the life of any executive or employee. If our senior executives or
employees terminate their employment with us and we are unable to find suitable replacements in
relatively short periods of time, our operations may be materially and adversely affected.
We face significant competition for professional employees.
From time to time, individuals we employ may choose to leave our company to pursue other
opportunities. We have experienced losses of registered representatives, trading and investment
banking professionals in the past, and the level of competition for key personnel remains intense.
We cannot assure you that the loss of key personnel will not occur again in the future. The loss of
a registered representative or a trading or investment banking professional, particularly a senior
professional with a broad range of contacts in an industry, could materially and adversely affect
our operating results.
Our principal shareholders including our directors and officers control a large percentage of our
shares of common stock and can significantly influence our corporate actions.
At the present time, our executive officers, directors and companies that these individuals
are affiliated with beneficially own approximately 44.2% of our common stock. Accordingly, these
individuals and entities will be able to significantly influence most, if not all, of our corporate
actions, including the election of directors and the appointment of officers. Additionally, this
ownership of our common stock may make it difficult for a third party to acquire control of us,
therefore possibly discouraging third parties from seeking to acquire us. A third party would have
to negotiate any possible transactions with these principal shareholders, and their interests may
be different from the interests of our other shareholders. This may depress the price of our common
stock.
The American Stock Exchange (the "Exchange") may delist our common stock from quotation on its
exchange.
Our common stock is currently quoted on the Exchange. In order to continue quotation of our
common stock, we must maintain certain financial, distribution and stock price levels. Generally,
we must
7
maintain a minimum amount in shareholders' equity (usually between $2.0 million and $4.0
million) and a minimum number of public shareholders (usually 300 shareholders). Additionally, our
common stock cannot have what is deemed to be a "low selling price" as determined by the Exchange.
On November 28, 2005, the last reported sale price of our common stock was $0.53. If the
Exchange determines that this is a "low selling price," it may require us to effect a reverse split
or suspend or remove our common stock from listing on the Exchange. In determining whether a
reverse split or suspension or removal is appropriate, the Exchange will consider all pertinent
factors including market conditions in general, the number of shares outstanding, plans which may
have been formulated by management, applicable regulations of the state or country of incorporation
or of any governmental agency having jurisdiction over the company and the relationship to other
Exchange policies regarding continued listing.
If the Exchange delists our common stock from trading on its exchange, we could face
significant material adverse consequences including:
•
a limited availability of market quotations for our common stock;
•
a determination that our common stock is a "penny stock" which will
require brokers trading in our common stock to adhere to more
stringent rules and possibly resulting in a reduced level of trading
activity in the secondary trading market for our common stock;
•
a limited amount of news and analyst coverage for our company; and
•
a decreased ability to issue additional securities or obtain
additional financing in the future.
We may lose customers and our revenues may decline due to our lack of Internet brokerage service
capability.
A growing number of brokerage firms offer Internet brokerage services to their customers in
response to increased customer demand for these services. Currently, we are unable to offer
Internet brokerage services, nor do we anticipate having such ability in the near future. Should we
offer such services in the future, the services may not appeal to our current or prospective
customers and these services may not be profitable. Our failure to commence Internet brokerage
services in the near future could have a material adverse effect on our business including the loss
of our existing customers to competitors that do offer these services. Additionally, if we commence
Internet brokerage services but are unable to attract customers for those services, our revenues
will decline.
We rely on one primary clearing broker and the termination of the agreement with this clearing
broker could disrupt our business.
Ladenburg Thalmann & Co. primarily uses one clearing broker to process its securities
transactions and maintain customer accounts on a fee basis. The clearing broker also provides
billing services, extends credit and provides for control and receipt, custody and delivery of
securities. In November 2002, we renegotiated a clearing agreement with one of our clearing
brokers whereby this clearing broker became our primary clearing broker, clearing substantially all
of our business (the "Clearing Conversion"). As part of the new agreement with this clearing
broker, we are realizing significant cost savings from reduced ticket charges and other incentives.
In addition, under the new clearing agreement, an affiliate of the clearing broker loaned us an
aggregate of $3,500,000 (the "Clearing
8
Loans") in December 2002, with various terms and maturing at
various dates through December 2006. As scheduled, $1,500,000 and $667,000 of the Clearing Loans
were forgiven in November 2003 and 2004, respectively. The remaining principal balance of the
Clearing Loans is scheduled to be forgiven as follows: $667,000 in November 2005 and $666,000 in
November 2006. However, if the clearing agreement is
terminated for any reason prior to the loan maturity date, the loan, less any amount that has been
forgiven through the date of the termination, plus interest, must be repaid on demand.
Ladenburg Thalmann & Co. depends on the operational capacity and ability of the clearing
broker for the orderly processing of transactions. In addition, by engaging the processing services
of a clearing firm, Ladenburg Thalmann & Co. is exempt from some capital reserve requirements and
other regulatory requirements imposed by federal and state securities laws. If the clearing
agreement is terminated for any reason, we would be forced to find an alternative clearing firm. We
cannot assure you that we would be able to find an alternative clearing firm on acceptable terms to
us or at all.
Our clearing broker extends credit to our clients and we are liable if the clients do not pay.
Ladenburg Thalmann & Co. permits its clients to purchase securities on a margin basis or sell
securities short, which means that the clearing firm extends credit to the client secured by cash
and securities in the client's account. During periods of volatile markets, the value of the
collateral held by the clearing broker could fall below the amount borrowed by the client. If
margin requirements are not sufficient to cover losses, the clearing broker sells or buys
securities at prevailing market prices, and may incur losses to satisfy client obligations.
Ladenburg Thalmann & Co. has agreed to indemnify the clearing broker for losses it may incur while
extending credit to its clients.
We are subject to various risks associated with the securities industry.
As a securities broker-dealer, Ladenburg Thalmann & Co. is subject to uncertainties that are
common in the securities industry. These uncertainties include:
•
the volatility of domestic and international financial, bond and stock markets;
•
extensive governmental regulation;
•
litigation;
•
intense competition;
•
substantial fluctuations in the volume and price level of securities; and
•
dependence on the solvency of various third parties.
As a result, revenues and earnings may vary significantly from quarter to quarter and from year to
year. In periods of low volume, profitability is impaired because certain expenses remain
relatively fixed. Ladenburg Thalmann & Co. is much smaller and has much less capital than many
competitors in the securities industry. In the event of a market downturn, our business could be
adversely affected in many ways. Our revenues are likely to decline in such circumstances and, if
we are unable to reduce expenses at the same pace, our profit margins would erode.
Our risk management policies and procedures may leave us exposed to unidentified risks or an
unanticipated level of risk.
9
The policies and procedures we employ to identify, monitor and manage risks may not be fully
effective. Some methods of risk management are based on the use of observed historical market
behavior. As a result, these methods may not predict future risk exposures, which could be
significantly greater than the historical measures indicate. Other risk management methods depend
on evaluation of information
regarding markets, clients or other matters that are publicly available or otherwise accessible by
us. This information may not be accurate, complete, up-to-date or properly evaluated. Management of
operational, legal and regulatory risk requires, among other things, policies and procedures to
properly record and verify a large number of transactions and events. We cannot assure you that our
policies and procedures will effectively and accurately record and verify this information.
We seek to monitor and control our risk exposure through a variety of separate but
complementary financial, credit, operational and legal reporting systems. We believe that we
effectively evaluate and manage the market, credit and other risks to which we are exposed.
Nonetheless, the effectiveness of our ability to manage risk exposure can never be completely or
accurately predicted or fully assured. For example, unexpectedly large or rapid movements or
disruptions in one or more markets or other unforeseen developments can have a material adverse
effect on our results of operations and financial condition. The consequences of these developments
can include losses due to adverse changes in inventory values, decreases in the liquidity of
trading positions, higher volatility in earnings, increases in our credit risk to customers as well
as to third parties and increases in general systemic risk.
Credit risk exposes us to losses caused by financial or other problems experienced by third
parties.
We are exposed to the risk that third parties that owe us money, securities or other assets
will not perform their obligations. These parties include:
•
trading counterparties;
•
customers;
•
clearing agents;
•
exchanges;
•
clearing houses; and
•
other financial intermediaries as well as issuers whose securities we hold.
These parties may default on their obligations owed to us due to bankruptcy, lack of liquidity,
operational failure or other reasons. This risk may arise, for example, from:
•
holding securities of third parties;
•
executing securities trades that fail to settle at the required time due to
non-delivery by the counterparty or systems failure by clearing agents, exchanges,
clearing houses or other financial intermediaries; and
•
extending credit to clients through bridge or margin loans or other arrangements.
10
Significant failures by third parties to perform their obligations owed to us could adversely
affect our revenues and perhaps our ability to borrow in the credit markets.
Intense competition from existing and new entities may adversely affect our revenues and
profitability.
The securities industry is rapidly evolving, intensely competitive and has few barriers to
entry. We expect competition to continue and intensify in the future. Many of our competitors have
significantly
greater financial, technical, marketing and other resources than we do. Some of our competitors
also offer a wider range of services and financial products than we do and have greater name
recognition and a larger client base. These competitors may be able to respond more quickly to new
or changing opportunities, technologies and client requirements. They may also be able to undertake
more extensive promotional activities, offer more attractive terms to clients, and adopt more
aggressive pricing policies. We may not be able to compete effectively with current or future
competitors and competitive pressures faced by us may harm our business.
The precautions we take to prevent and detect employee misconduct may not be effective and we could
be exposed to unknown and unmanaged risks or losses.
We run the risk that employee misconduct could occur. Misconduct by employees could include:
•
employees binding us to transactions that exceed authorized limits or
present unacceptable risks to us;
•
employees hiding unauthorized or unsuccessful activities from us; or
•
the improper use of confidential information.
These types of misconduct could result in unknown and unmanaged risks or losses to us including
regulatory sanctions and serious harm to our reputation. The precautions we take to prevent and
detect these activities may not be effective. If employee misconduct does occur, our business
operations could be materially adversely affected.
Failure to comply with net capital requirements could subject us to suspension or revocation by the
SEC or suspension or expulsion by the NASD and the NYSE.
Ladenburg Thalmann & Co. is subject to the SEC's net capital rule which requires the
maintenance of minimum net capital. We compute net capital under the alternate method permitted by
the net capital rule. Under this method, Ladenburg Thalmann & Co. is required to maintain net
capital equal to $250,000. At September 30, 2005, Ladenburg Thalmann & Co. had net capital of
$4,965,000 which exceeded its minimum net capital requirement by $4,715,000. The net capital rule
is designed to measure the general financial integrity and liquidity of a broker-dealer. In
computing net capital, various adjustments are made to net worth which exclude assets not readily
convertible into cash. Additionally, the regulations require that certain assets, such as a
broker-dealer's position in securities, be valued in a conservative manner so as to avoid
over-inflation of the broker-dealer's net capital. The net capital rule requires that a
broker-dealer maintain a certain minimum level of net capital. The particular levels vary in
application depending upon the nature of the activity undertaken by a firm. Compliance with the net
capital rule limits those operations of broker-dealers which require the intensive use of their
capital, such as underwriting commitments and principal trading activities. The rule also limits
the ability of securities firms to pay dividends or make payments on certain indebtedness such as
subordinated debt as it matures. A significant operating loss or any charge against net capital
could adversely affect the ability of a broker-
11
dealer to expand or, depending on the magnitude of
the loss or charge, maintain its then present level of business. The NASD and the NYSE may enter
the offices of a broker-dealer at any time, without notice, and calculate the firm's net capital.
If the calculation reveals a deficiency in net capital, the NASD may immediately restrict or
suspend certain or all of the activities of a broker-dealer, including its ability to make markets.
Ladenburg Thalmann & Co. may not be able to maintain adequate net capital, or its net capital may
fall below requirements established by the SEC, and subject us to disciplinary action in the form
of fines, censure, suspension, expulsion or the termination of business altogether.
Risk of losses associated with securities laws violations and litigation.
Many aspects of our business involve substantial risks of liability. An underwriter is exposed
to substantial liability under federal and state securities laws, other federal and state laws, and
court decisions, including decisions with respect to underwriters' liability and limitations on
indemnification of underwriters by issuers. For example, a firm that acts as an underwriter may be
held liable for material misstatements or omissions of fact in a prospectus used in connection with
the securities being offered or for statements made by its securities analysts or other personnel.
In recent years, there has been an increasing incidence of litigation involving the securities
industry, including class actions that seek substantial damages. Our underwriting activities will
usually involve offerings of the securities of smaller companies, which often involve a higher
degree of risk and are more volatile than the securities of more established companies. In
comparison with more established companies, smaller companies are also more likely to be the
subject of securities class actions, to carry directors and officers liability insurance policies
with lower limits or not at all, and to become insolvent. Each of these factors increases the
likelihood that an underwriter of a smaller companies' securities will be required to contribute to
an adverse judgment or settlement of a securities lawsuit.
In the normal course of business, our operating subsidiaries have been and continue to be the
subject of numerous civil actions and arbitrations arising out of customer complaints relating to
our activities as a broker-dealer, as an employer and as a result of other business activities. In
general, the cases involve various allegations that our employees had mishandled customer accounts.
We believe that, based on our historical experience and the reserves established by us, the
resolution of the claims presently pending will not have a material adverse effect on our financial
condition. However, although we typically reserve an amount we believe will be sufficient to cover
any damages assessed against us, we have in the past been assessed damages that exceeded our
reserves. If we misjudged the amount of damages that may be assessed against us from pending or
threatened claims, or if we are unable to adequately estimate the amount of damages that will be
assessed against us from claims that arise in the future and reserve accordingly, our financial
condition may be materially adversely affected.
Possible additional issuances will cause dilution.
While
we currently have outstanding 141,349,950 shares of common stock, options and purchase
rights to purchase a total of 23,373,071 shares of common stock and warrants to purchase a total of
200,000 shares of common stock, we are authorized to issue up to 200,000,000 shares of common stock
and are therefore able to issue additional shares without being required under corporate law to
obtain shareholder approval. If we issue additional shares, or if our existing shareholders
exercise their outstanding options, our other shareholders may find their holdings drastically
diluted, which if it occurs, means that they will own a smaller percentage of our company.
We may issue preferred stock with preferential rights that may adversely affect your rights.
12
The rights of our shareholders will be subject to and may be adversely affected by the rights
of holders of any preferred stock that we may issue in the future. Our articles of incorporation
authorize our board of directors to issue up to 2,000,000 shares of "blank check" preferred stock
and to fix the rights, preferences, privilege and restrictions, including voting rights, of these
shares without further shareholder approval.
WARNING REGARDING OUR USE OF FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus are forward-looking that relate to
possible future events, our future performance and our future operations. In some cases, you can
identify these forward-looking statements by the use of words such as "may," "will," "should,"
"anticipates," "believes," "expects," "plans," "future," "intends," "could," "estimate," "predict,"
"potential," "continue," or the negative of these terms or other similar expressions. These
statements are only our predictions. Our actual results could and likely will differ materially
from these forward-looking statements for many reasons, including the risks described above and
appearing elsewhere in this prospectus. We cannot guarantee future results, levels of activities,
performance or achievements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform them to actual results or to changes in our
expectations.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares covered by this prospectus.
However, we have already received $3,226,250 as payment for 7,169,444 of the above 19,944,444
shares which were issued to the selling shareholders and are being registered for resale under this
prospectus. Additionally, we will receive the amounts paid by the selling shareholders upon
exercise of their options and purchase rights to acquire the remaining 12,775,000 of the above
19,944,444 shares being registered under this prospectus. If those options and purchase rights
are exercised in full, we will receive $7,707,375.
SELLING SHAREHOLDERS
The following table provides certain information with respect to the selling shareholders'
beneficial ownership of our common stock as of November 30, 2005 and as adjusted to give effect to
the sale of all of the shares offered by this prospectus. Except as otherwise indicated, the
number of shares reflected in the table has been determined in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended. Under this rule, each selling
shareholder is deemed to beneficially own the number of shares issuable upon exercise or conversion
of warrants, options or other convertible securities it holds that are exercisable or convertible
within 60 days from the date of this prospectus. However, for purposes of presentation, we have
included the full amount of the shares being registered by this prospectus and which underlie
options and purchase rights in the number of shares beneficially owned by the individuals holding
the options and purchase rights even though such options and purchase rights may not be exercisable
within 60 days. Additionally, for purposes of presentation, it is assumed that the selling
shareholders will exercise all of such options and purchase rights and then resell all of the
shares received as a consequence of their exercise. Unless otherwise indicated, each of the
selling shareholders possesses sole voting and investment power with respect to the securities
shown.
13
Shares Beneficially
Shares Beneficially
Owned
Owned
Before Offering
After Offering
Number of
Number
Number of
Shares
of
Name
Shares
Percentage
Offered
Shares
Percentage
Bruce S. Mendelsohn
(1)
2,225,000
(2)
1.6
%
2,225,000
(2)
0
0
L. Keith Mullins
(3)
5,222,222
(4)
3.7
%
5,222,222
(4)
0
0
Mark D. Coe
(5)
4,497,222
(6)
3.2
%
4,497,222
(6)
0
0
Lawrence B. Weissman
(7)
3,000,000
(8)
2.1
%
3,000,000
(8)
0
0
Barry Rabkin
(9)
1,000,000
*
1,000,000
0
0
Steven Cohen
(10)
4,000,000
(11)
2.8
%
4,000,000
(11)
0
0
*
Less than 1%.
(1)
Mr. Mendelsohn has served as our managing director and senior executive vice president since
July 2005.
(2)
Includes 2,000,000 shares of common stock issuable upon exercise of an option held by Mr.
Mendelsohn described below.
(3)
Mr. Mullins has served as executive vice president of Ladenburg Thalmann & Co. since June 2005.
(4)
Includes 3,000,000 shares of common stock issuable upon exercise of an option held by Mr.
Mullins described below.
(5)
Mr. Coe has served as managing director and chief investment officer of Ladenburg Thalmann &
Co. since July 2005.
(6)
Includes 2,275,000 shares of common stock issuable upon exercise of an option and purchase
rights held by Mr. Coe described below.
(7)
Mr. Weissman has served as chief investment strategist of Ladenburg Thalmann Asset Management
Inc., a wholly owned subsidiary of Ladenburg Thalmann & Co., since July 2005.
(8)
Includes 2,000,000 shares of common stock issuable upon exercise of an option and purchase
rights held by Mr. Weissman described below. Does not include 500,000 shares of common stock
which may be issuable upon exercise of an option that will be issued to Mr. Weissman after his
first year of employment with Ladenburg Thalmann Asset Management, assuming he is still
employed by Ladenburg Thalmann Asset Management at that time.
(9)
Mr. Rabkin has been employed by Ladenburg Thalmann & Co. Inc. since August 2005.
(10)
Mr. Cohen has been employed by Ladenburg Thalmann & Co. Inc. since August 2005.
(11)
Includes 3,500,000 shares of common stock issuable upon exercise of purchase rights held by
Mr. Cohen described below.
In June 2005, we entered into an employment agreement with Bruce S. Mendelsohn pursuant
to which Mr. Mendelsohn became our managing director and senior executive vice president. Under
the employment agreement, Mr. Mendelsohn purchased 225,000 shares of our common stock at $0.45 per
share. We also granted Mr. Mendelsohn an option to purchase 2,000,000 shares of our common stock
at a
14
price of $0.645 per share. The option, which expires on May 31, 2015, vested as to 200,000
shares of common stock on the date of grant and will vest as to the remainder in four equal annual
installments of 450,000 shares commencing on June 1, 2006.
In June 2005, Ladenburg Thalmann & Co. entered into an employment agreement with L. Keith
Mullins pursuant to which Mr. Mullins became an executive vice president of Ladenburg Thalmann &
Co. Under the employment agreement, Mr. Mullins purchased 2,222,222 shares of our common stock at
$0.45 per share. We also granted Mr. Mullins an option to purchase 3,000,000 shares of our common stock
at a price of $0.645 per share. The option, which expires on May 31, 2015, vests in four equal
annual installments of 750,000 shares commencing on June 1, 2006.
In June 2005, Ladenburg Thalmann & Co. entered into an employment agreement with Mark D. Coe
pursuant to which Mr. Coe became the managing director and chief investment officer of Ladenburg
Thalmann & Co. Under the employment agreement, Mr. Coe purchased 2,222,222 shares of our common
stock at $0.45 per share. He also committed to purchase an additional 775,000 shares of common
stock ("Coe Commission Shares") at $0.645 per share through the use of net commissions payable to
Mr. Coe under the employment agreement. We also granted Mr. Coe an option to purchase 1,500,000
shares of our common stock at a price of $0.645 per share. The option, which expires on May 31,
2015, will vest as to 250,000 shares on each of the first, second, third and fourth anniversaries
of the date of grant and an additional 125,000 shares on the third anniversary of the date of grant
and an additional 375,000 shares on the fourth anniversary of the date of grant; provided, however,
that the last 500,000 shares underlying the option shall not become exercisable unless and until
all 775,000 Coe Commission Shares have been purchased by Mr. Coe as described above.
In July 2005, Ladenburg Thalmann Asset Management Inc., a wholly owned subsidiary of Ladenburg
Thalmann & Co., entered into an employment agreement with Lawrence B. Weissman pursuant to which
Mr. Wiessman became Ladenburg Thalmann Asset Management's chief investment strategist. Under the
employment agreement, Mr. Weissman purchased 1,000,000 shares of our common stock at $0.45 per
share. He also committed to purchase an additional 1,000,000 shares of common stock at $0.58 per
share through the use of certain compensation to be earned by him in each calendar year. We also
granted Mr. Weissman an option to purchase 1,000,000 shares of common stock at $0.58 per share.
The option, which expires on July 17, 2015, will vest as to 250,000 shares of common stock on each
of the first, second, third and fourth anniversaries of the date of grant. Additionally, after the
first year of Mr. Weissman's employment, we will grant Mr. Weissman a nine-year option to purchase
an additional 500,000 shares of common stock at the fair market value on the date of grant,
assuming he is still employed by Ladenburg Thalmann Asset Management Inc. at that time.
In August 2005, Ladenburg Thalmann & Co. entered into an employment agreement with Barry
Rabkin. Under the employment agreement, Mr. Rabkin purchased 1,000,000 shares of our common stock
at $0.45 per share.
In August 2005, Ladenburg Thalmann & Co. entered into an employment agreement with Steven
Cohen. Under the employment agreement, Mr. Cohen purchased 500,000 shares of our common stock at
$0.45 per share. He also committed to purchase an additional 3,500,000 shares of common stock at
$0.53 per share through the use of certain compensation to be earned by him under the employment
agreement.
15
PLAN OF DISTRIBUTION
The sale or distribution of the common stock may be effected directly to purchasers by the
selling shareholders, or by any donee, pledgee or transferee of the selling shareholders as
principals, or through one or more underwriters, brokers, dealers or agents from time to time in
one or more public or private transactions by any legally available means, including:
•
block trades;
•
on the American Stock Exchange or in the over-the-counter market;
•
otherwise than on the American Stock Exchange or in the over-the-counter market;
•
through the writing of put or call options relating to the common stock;
•
entering into hedging transactions with broker-dealers, and the broker-dealers may
in turn engage in short sales of the shares as part of establishing and maintaining the
hedge positions they entered into with the selling shareholders;
•
entering into option or loan transactions that require the selling shareholder to
deliver shares to a broker-dealer which may then resell or otherwise
transfer the shares pursuant to this prospectus to cover the broker-dealer's own short sales of the
shares or to cover short sales of the shares by customers of the broker-dealer;
•
engaging in short sales of the common stock and delivering shares to cover such
short positions;
•
the pledging of common stock to a broker-dealer and upon the default by the selling
shareholder on the pledge the broker-dealer may sell the pledged shares in accordance
with this prospectus;
•
through the distribution of the common stock by any selling shareholder to its
partners, members or shareholders; or
•
through a combination of these methods of sale.
Any of these transactions may be effected:
•
at market prices prevailing at the time of sale;
•
at prices related to the prevailing market prices;
•
at varying prices determined at the time of sale; or
•
at negotiated or fixed prices.
The sale or distribution of common stock under this prospectus will be made in compliance with
the applicable provisions of NASD Conduct Rule 2720. If the selling shareholders effect
transactions to or through underwriters, brokers, dealers or agents, these underwriters, brokers,
dealers or agents may receive compensation in the form of discounts, concessions or commissions
from the selling shareholders or purchasers. These discounts, concessions or commissions may be in
excess of those customary for the types of
16
transactions involved. However, no NASD member or
independent broker-dealer will receive a commission or discount in excess of 8%.
The selling shareholders and any broker, dealer or agent that assists in the sale of the
common stock may be deemed to be underwriters within the meaning of Section 2(a)(11) of the
Securities Act. Accordingly, any profit on the sale of common stock by them and any discounts,
concessions or commissions received by any of the underwriters, brokers, dealers or agents may be
deemed to be underwriting discounts and commissions under the Securities Act.
Selling shareholders may also resell all or a portion of the common stock in open market
transactions in reliance upon Rule 144 under the Securities Act. In these cases, they must meet
the criteria and conform to the requirements of that rule.
We will pay all of the costs, expenses and fees incident to the registration of the shares
offered under this prospectus. The selling shareholders are responsible for any costs, expenses
and fees related to the offer and sale of the common stock to the public, including brokerage
commissions, fees and discounts of underwriters, brokers, dealers and agents.
LEGAL MATTERS
The legality of the common stock offered by this prospectus has been passed upon by Graubard
Miller, New York, New York.
EXPERTS
Our consolidated financial statements as of December 31, 2004 and 2003 and for each of the
three years in the period ended December 31, 2004 appearing in our Annual Report on Form 10-K for
the year ended December 31, 2004, have been audited by Eisner LLP, an independent registered public
accounting firm, as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by reference in reliance
upon the report of Eisner LLP given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the
SEC. Our SEC filings are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference
room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information about the public reference room.
The SEC allows us to incorporate by reference the information we file with it, which means
that we can disclose important information to you by referring you to those documents. Any
statement contained in a document incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained herein
modifies or supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this prospectus. Any
information that we file after the date of this prospectus with the SEC will automatically update
and supersede the information contained in this prospectus. This prospectus incorporates by
reference our documents listed below and any future filings
17
we make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act until all of the securities are sold:
•
our annual report on Form 10-K for the fiscal year ended December 31, 2004;
•
our quarterly reports on Form 10-Q for the quarters ended March 31, 2005, June 30,
2005 and September 30, 2005;
•
our current report on Form 8-K dated April 14, 2005 and filed with the SEC on April
19, 2005;
•
our current report on Form 8-K dated June 13, 2005 and filed with the SEC on June
15, 2005;
•
our current report on Form 8-K dated August 1, 2005 and filed with the SEC on August
5, 2005;
•
our current report on Form 8-K dated September 26, 2005 and filed with the SEC on
September 30, 2005;
•
our current report on Form 8-K dated November 1, 2005 and filed with the SEC on
November 8, 2005, as amended on November 21, 2005;
•
our current report on Form 8-K dated November 30, 2005 and filed with the SEC on
November 30, 2005; and
•
the description of our common stock contained in our registration statement on Form
8-A (No. 1-15799) filed with the SEC pursuant to Section 12(b) of the Exchange Act.
Potential investors may obtain a copy of any of our SEC filings without charge by written or
oral request directed to Ladenburg Thalmann Financial Services Inc., Attention: Investor Relations,
590 Madison Avenue, 34th Floor, New York, New York 10022, (212) 409-2000.
18
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents that we have previously filed with the SEC are incorporated by
reference in this registration statement:
•
our annual report on Form 10-K for the fiscal year ended December 31, 2004;
•
our quarterly report on Form 10-Q for the quarter ended
March 31, 2005, June 30, 2005 and September 30, 2005;
•
our current report on Form 8-K dated April 14, 2005 and filed with the SEC
on April 19, 2005
•
our current report on Form 8-K dated June 13, 2005 and filed with the SEC
on June 15, 2005;
•
our current report on Form 8-K dated on Form 8-K dated August 1, 2005 and
filed with the SEC on August 5, 2005;
•
our current report on Form 8-K dated September 26, 2005 and filed with the
SEC on September 30, 2005;
•
our current report on Form 8-K dated November 1, 2005 and filed with the
SEC on November 8, 2005, as amended on November 21, 2005;
•
our current report on Form 8-K dated November 30, 2005 and filed with the
SEC on November 30, 2005; and
•
the description of our common stock, par value $.0001 per share, contained
in our registration statement on Form 8-A (No. 1-15799) filed with the SEC pursuant to
Section 12(b) of the Securities Exchange Act of 1934, including any subsequent
amendments or reports filed for the purpose of updating this description.
All documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment which indicates that all the
securities offered have been sold or which deregisters all securities then remaining unsold, will
be deemed to be incorporated by reference in this registration statement and to be a part of this
registration statement from the respective date of filing. Any statement contained in a document
incorporated by reference in this registration statement will be modified or superseded for all
purposes to the extent that a statement contained in this registration statement or in any other
subsequently filed document which is incorporated by reference modifies or replaces the statement.
Item 4. Description of Securities.
Our common stock is registered under Section 12(b) of the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 607.0850 of the 1989 Business Corporation Act of the State of Florida empowers a
Florida corporation to indemnify any person who was or is a party to any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal (other than an action by, or in the right of, the
corporation) by reason of the fact that he or she is or was a director, officer, employee, or agent
of the corporation, or is or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise
against liability including any obligation to pay a judgment, settlement, penalty, fine (including
an excise tax assessed with respect to any employee benefit plan), and expenses (including
counsel's fees) actually and reasonably incurred in connection with the proceeding and any
subsequent appeals, if he or she acted in good faith and in a manner that he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was
unlawful. The termination of any proceeding by judgment, order, settlement, or conviction or upon a
plea of nolo contendere or its equivalent does not, of itself, create a presumption that the person
did not act in good faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was unlawful.
In the case of an action by or in the right of the corporation, Section 607.0850 empowers a
corporation to indemnify any person who was or is a party to any threatened, pending, or completed
action, suit, or other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal, in any of the capacities set forth above against
expenses (including counsel's fees for the proceeding as well as for any appeal) and amounts paid
in settlement not exceeding, in the judgment of the board of directors, the estimated expense of
litigating the proceeding to conclusion, actually and reasonably incurred in connection with the
defense or settlement of the proceeding or any subsequent appeals, if the person acted in good
faith and in a manner that he or she reasonably believed to be in or not opposed to the best
interests of the corporation. With respect to any claim, issue, or matter as to which the person
is adjudged to be liable to the corporation, indemnification is not permitted unless, and only to
the extent that, the court in which the proceeding was brought, or any other court of competent
jurisdiction, determines upon application that, despite the adjudication of liability but in view
of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for
expenses that the court deems proper.
Section 607.0850 further provides that a Florida corporation is required to indemnify a
director, officer, employee, or agent against expenses (including counsel's fees) actually and
reasonably incurred by the person in connection with defending any type of proceeding referred to
above or in defending any claim, issue, or matter involved in the proceeding as to which the person
has been successful on the merits or otherwise.
Other than pursuant to a court order, a Florida corporation may provide indemnification only
as authorized in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he or she has met the applicable
standard of conduct. The determination is to be made:
•
by the board of directors upon majority vote of a quorum consisting of
directors who were not party to the proceeding;
•
if a quorum is not obtainable, or, even if obtainable, by majority vote of
a committee consisting solely of two or more directors who are not parties to the
proceeding at the time, duly designated by the board of directors (in which interested
directors may participate);
•
by independent legal counsel selected by majority vote of the board of
directors who were not party to the proceeding or a committee so designated by the
board of directors; or
•
by shareholders upon majority vote of a quorum consisting of shareholders
who were not parties to the proceeding or, if a quorum is not obtainable, by a majority
vote of shareholders who were not parties to the proceeding.
Any indemnification provided for by Section 607.0850 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled. A Florida corporation is entitled to
make any other or further indemnification of any of its directors, officers, employees, or agents,
under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as
to action in his or her official capacity and as to action in another capacity while holding his or
her office. However, indemnification shall not be made to or on behalf of any director, officer,
employee, or agent if a judgment or other final adjudication establishes that his or her actions,
or omissions to act, were material to the cause of action so adjudicated and constitute:
•
a violation of criminal law, unless the director, officer, employee or
agent had reasonable cause to believe his or her conduct was lawful or had no
reasonable cause to believe his or her conduct was unlawful;
•
a transaction from which the director, officer, employee or agent derived
an improper benefit;
•
in the case of a director, a circumstance under which he is liable for an
unlawful distribution; or
•
a willful misconduct or a conscious disregard for the best interests of the
corporation in a proceeding by or in the right of the corporation to procure a judgment
in its favor or in a proceeding by or in the right of a shareholder.
Indemnification provided for by Section 607.0850 shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director, officer, employee,
or agent and shall inure to the benefit of the person's heirs, executors, and administrators.
A Florida corporation may also purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the corporation or who is or was serving at the
request of the corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against any liability asserted against the
person and incurred by him or her in any such capacity or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify the person against liability under
Section 607.0850.
Article XI of our articles of incorporation, as amended, and Article VII of our bylaws provide
for indemnification of our directors and officers to the fullest extent permitted by law, as now in
effect or later amended. Article VII of our bylaws provides that expenses incurred by a director
or officer in defending a civil or criminal action, suit, or proceeding may be paid by us in
advance of a final disposition upon receipt of an undertaking by or on behalf of the director or
officer to repay the advanced amount if he or she is ultimately found not to be entitled to
indemnification.
We may provide liability insurance for each of our directors and officers for certain losses
arising from claims or charges made against them while acting in their capacities as directors or
officers. We currently maintain this type of liability insurance.
Additionally, we have entered into indemnification agreements with all of our directors
and executive officers whereby we have agreed to indemnify, and advance expenses to, each
indemnitee to the fullest extent permitted by applicable law. The indemnification agreements will
continue until and terminate upon the later of (i) ten years after the date that the indemnitee has
ceased to serve as a
director or officer for us or (ii) the final termination of all pending
proceedings in respect of which the indemnitee is granted rights of indemnification or advancement
of expenses or any proceeding commenced by the indemnitee.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Incorporated by
Reference from
Exhibit No.
Description
Document
No. in Document
4.1
Stock Option Agreement, dated as of June 1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Bruce S. Mendelsohn
A
10.1
4.2
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Bruce S. Mendelsohn
A
10.2
4.3
Stock Option Agreement, dated as of June 1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and L. Keith Mullins
A
10.3
4.4
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and L. Keith Mullins
A
10.4
4.5
Stock Option Agreement, dated as of June 1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Mark D. Coe
A
10.5
4.6
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Mark D. Coe
A
10.6
4.7
Stock Purchase Agreement between Ladenburg Thalmann
Financial Services Inc. and Mark D. Coe
A
10.7
4.8
Stock Option Agreement, dated as of July 18, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Lawrence B. Weissman
B
10.1
4.9
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Lawrence B. Weissman
B
10.2
4.10
Letter Agreement, dated as of July 18, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Lawrence B. Weissman
B
10.3
4.11
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Steven Cohen
C
10.1
4.12
Stock Purchase Agreement between Ladenburg Thalmann
Financial Services Inc. and Steven Cohen
C
10.2
Incorporated by
Reference from
Exhibit No.
Description
Document
No. in Document
4.13
Incentive Stock Purchase Agreement between
Ladenburg Thalmann Financial Services Inc. and
Steven Cohen
C
10.3
4.14
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Barry Rabkin
C
10.4
5.1
Opinion of Graubard Miller
—
Filed Herewith
23.1
Consent of Eisner LLP
—
Filed Herewith
23.2
Consent of Graubard Miller (Included in Exhibit 5.1)
—
—
24.1
Power of Attorney (Included on Signature page)
—
—
A.
Current Report on Form 8-K, dated June 13, 2005 and filed with the SEC on June 15,
2005.
B.
Current Report on Form 8-K, dated August 1, 2005 and filed with the SEC on August 5,
2005.
C.
Current Report on Form 8-K, dated September 26, 2005 and filed with the SEC on
September 30, 2005.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide
offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with
the registration of the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8
and has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on this 30
th
day
of November, 2005.
LADENBURG THALMANN FINANCIAL SERVICES INC.
By:
/s/ Mark D. Klein
Name: Mark D. Klein
Title: President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Howard M. Lorber, Mark D. Klein and Salvatore Giardina, and each of them, with full power
to act without the others, such person's true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this registration statement, including post-effective
amendments, and to file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all intents and purposes
as he might or could do in person, and hereby ratifies and confirms all that said attorneys-in-fact
and agents, each acting alone, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Mark D. Klein
President and Chief Executive Officer
November 30, 2005
Mark D. Klein
(Principal Executive Officer)
/s/ Salvatore Giardina
Vice President and Chief Financial Officer
November 30, 2005
Salvatore Giardina
(Principal Accounting and Financial Officer)
/s/ Henry C. Beinstein
Director
November 30, 2005
Henry C. Beinstein
/s/ Robert J. Eide
Director
November 30, 2005
Robert J. Eide
Director
Dr. Phillip Frost
/s/ Brian S. Genson
Director
November 30, 2005
Brian S. Genson
Signature
Title
Date
/s/ Richard J. Lampen
Director
November 30, 2005
Richard J. Lampen
Director
Howard M. Lorber
/s/ Vincent A. Mangone
Director
November 30, 2005
Vincent A. Mangone
/s/ Benjamin D. Pelton
Director
November 30, 2005
Benjamin D. Pelton
/s/ Jeffrey S. Podell
Director
November 30, 2005
Jeffrey S. Podell
/s/ Steven A. Rosen
Director
November 30, 2005
Steven A. Rosen
Director
Richard J. Rosenstock
/s/ Mark Zeitchick
Director
November 30, 2005
Mark Zeitchick
EXHIBIT INDEX
Incorporated by
Reference from
Exhibit No.
Description
Document
No. in Document
4.1
Stock Option Agreement, dated as of June 1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Bruce S. Mendelsohn
A
10.1
4.2
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Bruce S. Mendelsohn
A
10.2
4.3
Stock Option Agreement, dated as of June 1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and L. Keith Mullins
A
10.3
4.4
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and L. Keith Mullins
A
10.4
4.5
Stock Option Agreement, dated as of June 1, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Mark D. Coe
A
10.5
4.6
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Mark D. Coe
A
10.6
4.7
Stock Purchase Agreement between Ladenburg Thalmann
Financial Services Inc. and Mark D. Coe
A
10.7
4.8
Stock Option Agreement, dated as of July 18, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Lawrence B. Weissman
B
10.1
4.9
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Lawrence B. Weissman
B
10.2
4.10
Letter Agreement, dated as of July 18, 2005,
between Ladenburg Thalmann Financial Services Inc.
and Lawrence B. Weissman
B
10.3
4.11
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Steven Cohen
C
10.1
4.12
Stock Purchase Agreement between Ladenburg Thalmann
Financial Services Inc. and Steven Cohen
C
10.2
4.13
Incentive Stock Purchase Agreement between
Ladenburg Thalmann Financial Services Inc. and
Steven Cohen
C
10.3
4.14
Subscription Agreement between Ladenburg Thalmann
Financial Services Inc. and Barry Rabkin
C
10.4
Incorporated by
Reference from
Exhibit No.
Description
Document
No. in Document
5.1
Opinion of Graubard Miller
—
Filed Herewith
23.1
Consent of Eisner LLP
—
Filed Herewith
23.2
Consent of Graubard Miller (Included in Exhibit 5.1)
—
—
24.1
Power of Attorney (Included on Signature page)
—
—
A.
Current Report on Form 8-K, dated June 13, 2005 and filed with the SEC on June 15,
2005.
B.
Current Report on Form 8-K, dated August 1, 2005 and filed with the SEC on August 5,
2005.
C.
Current Report on Form 8-K, dated September 26, 2005 and filed with the SEC on September
30, 2005