X0306 4 2018-02-09 0 0001397403 IMH Financial Corp NONE 0000019617 JPMORGAN CHASE & CO 270 PARK AVENUE NEW YORK NY 10017 0 0 1 1 Director by Deputization 0001364743 JPMorgan Chase Funding Inc. 270 PARK AVENUE NEW YORK NY 10017 0 0 1 0 Series B-2 Cumulative Convertible Preferred Stock 2018-02-09 4 P 0 2352941 A Common Stock 2352941 I See footenote Warrants 2.25 2018-02-09 4 P 0 600000 0.00 A Common Stock 600000 600000 I See footenote The Series B-3 Cumulative Convertible Preferred Stock ("Series B-3 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-3 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) $3.40 and (b) all accrued and unpaid dividends on such Series B-3 Preferred Stock by (ii) the then effective conversion price. Initially, each share of Series B-3 Preferred Stock is convertible into one share of Common Stock. The conversion price, and number of shares issuable upon conversion of Series B-3 Preferred Stock, are subject to adjustment as provided in the Second Amended and Restated Certificate of Designation of Series B-1 Cumulative Convertible Preferred Stock, Series B-2 Cumulative Convertible Preferred Stock and Series B-3 Cumulative Convertible Preferred Stock of the Issuer ("Restated Certificate of Designation"). Series B-3 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) $3.2171 (subject to adjustment in accordance with the 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. These warrants shall be exercisable from and after February 9, 2021 through February 8, 2023. On April 24, 2017, JPMorgan Chase Funding Inc. appointed Chadwick S. Parson as a member of the board of directors of the Issuer. JPMorgan Chase Funding Inc. may therefore be deemed a director by deputization. JPMorgan Chase & Co., by /s/ Michael T. Lees, Executive Director 2018-02-13 JPMorgan Chase Funding Inc., by /s/ Chadwick S. Parson, Managing Director 2018-02-13