X0206 3 2017-04-11 0 0001397403 IMH Financial Corp NONE 0000019617 JPMORGAN CHASE & CO 270 PARK AVENUE NEW YORK NY 10017 0 0 1 0 Series B-2 Cumulative Convertible Preferred Stock Common Stock 5595148 I See Footnote The Series B-2 Cumulative Convertible Preferred Stock ("Series B-2 Preferred Stock") is convertible at any time into the Issuer's common stock, par value $0.01 per share ("Common Stock"). Each share of Series B-2 Preferred Stock is convertible, at the election of the holder, into a number of shares of Common Stock determined by dividing (i) the sum of (a) $3.2171 (the "Original Price") and (b) all accrued and unpaid dividends on such Series B-2 Preferred Stock by (ii) the then effective conversion price. Initially, each share of Series B-2 Preferred Stock is convertible into one share of Common Stock. The conversion price, and number of shares issuable upon conversion of Series B-2 Preferred Stock, are subject to adjustment as provided in the Amended and Restated Certificate of Designation of the Series B-1 Cumulative Convertible Preferred Stock and Series B-2 Cumulative Convertible Preferred Stock of the Issuer. Series B-2 Preferred Stock will automatically be converted into shares of Common Stock at the then effective conversion price upon the closing of a sale of shares of Common Stock at a price equal to or greater than two and a quarter times (2.25x) the Original Price (subject to adjustment in accordance with the Amended and Restated Certificate of Designation), in a firm commitment underwritten public offering and listing of the Common Stock on a national securities exchange, pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $75,000,000 of gross proceeds to the Issuer. The securities reported herein are directly owned by JPMorgan Chase Funding Inc., a wholly owned subsidiary of JPMorgan Chase & Co. JPMorgan Chase & Co. disclaims beneficial ownership of the reported securities except to the extent of its pecuniary interest therein, if any. JPMorgan Chase & Co., by /s/ Michael T. Lees, Executive Director 2017-04-21