Business description of BBX-Capital-Inc

BBX Capital Real Estate: BBXRE is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures, including investments in multifamily rental apartment communities, single-family master-planned for sale housing communities, and commercial properties located primarily in Florida. In addition, BBXRE owns a 50% equity interest in The Altman Companies, LLC (the “Altman Companies”), a developer and manager of multifamily apartment communities, and manages the legacy assets acquired in connection with the Company’s sale of BankAtlantic in 2012, including portfolios of loans receivable, real estate properties, and judgments against past borrowers. BBXRE had approximately $165.7 million of total assets as of December 31, 2020.

BBX Sweet Holdings: BBX Sweet Holdings is engaged in the ownership and management of operating businesses in the confectionery industry, including Hoffman’s Chocolates, a retailer of gourmet chocolates with retail locations in South Florida, and Las Olas Confections and Snacks, a manufacturer and wholesaler of chocolate and other confectionery products. BBX Sweet Holdings also owns approximately 93% of the equity interests in IT’SUGAR, a specialty candy retailer whose products include bulk candy, candy in giant packaging, and licensed and novelty items. Prior to September 22, 2020, the Company consolidated the financial statements of IT’SUGAR and its subsidiaries based on its 93% ownership of IT’SUGAR. However, as further discussed below, on September 22, 2020, IT’SUGAR and its subsidiaries filed voluntary petitions to reorganize under Chapter 11 of Title 11 of the U.S. Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”) (the cases commenced by such filings, the “Bankruptcy Cases”), and as a result of the filings and the uncertainties surrounding the nature, timing, and specifics of the bankruptcy proceedings, the Company deconsolidated IT’SUGAR on September 22, 2020. BBX Sweet Holdings had approximately $28.7 million of total assets as of December 31, 2020.

Renin: Renin is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products and operates through its headquarters in Canada and three manufacturing and distribution facilities in the United States and Canada. In addition to its own manufacturing, Renin also sources various products and raw materials from China, Brazil, and certain other countries. In October 2020, Renin acquired substantially all of the assets and assumed certain of the liabilities of Colonial Elegance, Inc. (“Colonial Elegance”). Headquartered in Montreal, Canada, Colonial Elegance is a supplier and distributor of building products, including barn doors, closet doors, and stair parts, and its customers include various big box retailers in the United States and Canada. Renin had approximately $104.7 million of total assets as of December 31, 2020.

Identifying, acquiring, and developing real estate, including multifamily rental apartment communities, single-family master-planned for sale housing communities, and commercial properties; and

Identifying and investing in real estate joint ventures with third party developers.

Altman Development Company (“ADC”) – The Altman Companies owns 100% of ADC, which performs site selection and other predevelopment activities (including project underwriting and design), identifies development financing (which is typically comprised of a combination of internal and external equity and institutional debt), provides oversight of the construction process, and arranges for the ultimate sale of the projects upon stabilization. ADC enters into a development agreement with each joint venture that is formed to invest in development projects originated by the platform and earns a development fee for its services.

Altman Management Company (“AMC”) – The Altman Companies owns 100% of AMC, which performs leasing and property management services for the multifamily apartment communities developed by the Altman Companies prior to the ultimate sale of such projects. In certain cases, AMC also provides such services to apartment communities owned by third parties and certain affiliated entities. AMC enters into a leasing and property management agreement with each joint venture that is formed to invest in projects originated by the platform and earns a management fee for its services.

Altman-Glenewenkel Construction (“AGC”) – The Altman Companies owns 60% of AGC, which performs general contractor services for the multifamily apartment communities developed by the Altman Companies. AGC enters into a general contractor agreement with each joint venture that is formed to invest in projects originated by the platform and earns a general contractor fee for its services.

Phase 1 – This phase is comprised of 302 single-family homes. BBX Capital Real Estate sold all of the developed lots to homebuilders during the years ended December 31, 2019 and 2018, and as of December 31, 2020, homebuilders had closed on the sale of 275 single-family homes on these lots.

Phase 2 – This phase is expected to be comprised of approximately 479 single-family homes and 196 townhomes. BBX Capital Real Estate has substantially completed development of the lots and entered into agreements with homebuilders to sell all of the developed lots. During the year ended December 31, 2020, BBX Capital Real Estate sold 157 single-family lots and 70 townhome lots to homebuilders, and homebuilders closed on the sale of 56 single-family homes and 35 townhomes on these lots.

Phase 3 – This phase is expected to be comprised of approximately 200 single-family homes, and BBX Capital Real Estate expects to commence land development in 2021. BBXRE expects to sell a portion of these developed lots to a homebuilder, while it is exploring investment alternatives for the remaining lots, including the possible construction, leasing, and management of a portfolio of rental homes.

Phase 4 – This phase is expected to be comprised of 299 lots, and BBX Capital Real Estate has entered into an agreement with an unaffiliated homebuilder to sell all of the undeveloped lots in a single transaction.

Increasing future sales by delivering outstanding customer service and consistently developing innovative products;

Improving gross margin by lowering product costs through improvements in product sourcing and logistics and lowering manufacturing costs through improvements in productivity;

Reducing customer lead-times through better inventory planning and repatriation of domestic manufacturing balanced with global sourcing of finished goods; and

Seeking acquisitions of complementary businesses.

Risks and uncertainties relating to public health issues, including, in particular, the COVID-19 pandemic, and its effects on BBX Capital’s business and results, which are uncertain and will depend in large part on future developments and conditions. Effects have in the past included, and may in the future include, required closures of retail locations, business restrictions, “shelter in place” and “stay at home” orders and advisories, volatility in the global and national economies and equity, credit, and commodities markets, worker absenteeism, quarantines, and other health-related restrictions. In addition, risks and uncertainties related to the COVID-19 pandemic and its impact on BBX Capital’s business and results, include, without limitation, uncertainties relating to the duration and severity of the COVID-19 pandemic and the impact on demand for BBX Capital’s products and services including, without limitation, bulk candy products, levels of consumer confidence, and supply chains; actions governments, businesses, and individuals take in response to the pandemic and their impact on economic activity and consumer spending, which will impact BBX Capital’s ability to successfully resume full business operations; the pace of recovery when the COVID-19 pandemic subsides; competitive conditions; BBX Capital’s liquidity and the availability of capital; the effects and duration of steps BBX Capital takes in response to the COVID-19 pandemic, including the risk of lease defaults and the inability to rehire or replace furloughed employees; risks related to BBX Capital’s indebtedness, including the potential for accelerated maturities and debt covenant violations; the risk of heightened litigation as a result of actions taken in response to the COVID-19 pandemic; risks that the Company may recognize further impairment losses, and the impact of the COVID-19 pandemic on consumers, including, but not limited to, their income, their level of discretionary spending both during and after the pandemic, and their views towards the retail and other industries in which BBX Capital operates;

Risks and uncertainties affecting BBX Capital and its results, operations, markets, products, services and business strategies, and the risks and uncertainties associated with its ability to successfully implement its currently anticipated plans, and its ability to generate earnings under the current business strategy;

Risks and uncertainties relating to the spin-off of BBX Capital from BVH, including that it may not result in the benefits anticipated for BBX Capital to the extent expected or at all, and other risks related to the spin-off described in the “Risk Factors” section hereof;

The performance of entities in which BBX Capital has made investments may not be profitable or achieve anticipated results;

Risks associated with acquisitions, asset or subsidiary dispositions, or debt or equity financings which BBX Capital may consider or pursue from time to time;

Risks of cybersecurity threats, including the potential misappropriation of assets or confidential information, corruption of data or operational disruptions;

The updating of, and developments with respect to, technology, including the cost involved in updating our technology and the impact that any failure to keep pace with developments in technology could have on our operations or competitive position and our information technology expenditures may not result in the expected benefits;

The ability of BBX Capital’s subsidiaries to compete effectively in the highly competitive industries in which they operate;

The Company’s ability to maintain the integrity of internal or customer data, the failure of which could result in damage to our reputation and/or subject us to costs, fines or lawsuits;

The Company’s relationships with key customers and suppliers may be materially diminished or terminated;

The impact on BBX Capital’s consolidated financial statements and internal control over financial reporting of the adoption of new accounting standards;

Audits of BBX Capital’s or its subsidiaries’ federal or state tax returns, including that they may result in the imposition of additional taxes;

Damage to the reputation of BBX Capital or any of its subsidiaries could harm BBX Capital’s business, financial condition and results of operations;

The Company’s businesses are subject to various governmental regulations, laws and orders, compliance with which may result in significant expenses, and any noncompliance could result in civil or criminal penalties or other liabilities;

The outcome of litigation, inquiries, investigations, examinations or other legal proceedings is inherently uncertain and could subject the Company to significant monetary damages or restrictions on the Company’s ability to do business;

Risks that natural disasters and other acts of god may adversely impact the Company’s financial condition and operating results, including, without limitation, due to damage to physical assets or interruption of access to physical assets or operations:

Any damage to physical assets or interruption of access to physical assets or operations resulting from public health issues, such as the recent coronavirus outbreak, or from hurricanes, earthquakes, fires, floods, windstorms or other natural disasters, which may increase in frequency or severity due to climate change or other factors;

The risk that creditors of BBX Capital’s subsidiaries or other third-parties may seek to recover distributions or dividends, if any, made by such subsidiaries to BBX Capital or other amounts owed by such subsidiaries to such creditors or third-parties; and

If BBX Capital issues additional shares of its Class A Common Stock, Class B Common Stock or other securities, including in connection with acquisitions, investments or financings or pursuant to equity compensation plans, BBX Capital’s shareholders would experience dilution and any preferred stock declared and issued could include dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights of BBX Capital’s Class A Common Stock or Class B Common Stock or otherwise adversely affect the holders of BBX Capital’s Class A Common Stock or Class B Common Stock, including the likelihood that holders of BBX Capital’s Class A Common Stock or Class B Common Stock would receive dividend payments and payments on liquidation, or the amounts thereof.

Risks and uncertainties related to the COVID-19 pandemic, as described above;

The impact of economic, competitive, and other factors affecting BBX Capital Real Estate and its assets, including the impact of a decline in real estate values on BBX Capital Real Estate’s business and the value of BBX Capital Real Estate’s assets;

Risks that the investment in the Altman Companies may not realize the anticipated benefits and will increase the Company’s exposure to risks associated with the multifamily real estate development and construction industry;

The risk of additional impairments of real estate assets;

The risks associated with investments in real estate developments and joint ventures include:

exposure to downturns in the real estate and housing markets;

exposure to risks associated with real estate development activities, including severe weather conditions increasing costs, delaying construction, causing uninsured losses or reducing demand for homes;

environmental liabilities, including claims with respect to mold or hazardous or toxic substances;

risks associated with obtaining necessary zoning and entitlements;

risks that joint venture partners may not fulfill their obligations and concentration risks associated with entering into numerous joint ventures with the same joint venture partner;

risks relating to reliance on third-party developers or joint venture partners to complete real estate projects;

risk associated with increasing interest rates, as the majority of the development costs and sales of residential communities is financed;

risks associated with not finding tenants for multifamily apartments or buyers for single-family homes and townhomes;

risk associated with finding equity partners, securing financing, and selling newly built multifamily apartments;

risk associated with rising land and construction costs;

o risk that the projects will not be developed as anticipated or be profitable; and

o risk associated with customers or vendors not performing on their contractual obligations.

Risks and uncertainties related to the COVID-19 pandemic, as described above;

Risks that investments will not achieve the returns anticipated;

Risks that the subsidiaries’ business plans will not be successful;

Risks that market demand for the subsidiaries’ products could decline;

The risk of impairment losses associated with declines in the value of the Company’s investments in operating businesses or the Company’s inability to recover its investments;

Risks that the reorganization of certain confectionery businesses and operations may not achieve anticipated operating efficiencies and reduction in operating losses and that the implementation of strategic alternatives, including the sale or disposal of certain operations, will result in additional losses;

Failure of the Company’s confectionery businesses to meet financial metrics may necessitate BBX Capital making further capital contributions or advances to the businesses or a decision not to support underperforming businesses;

Risks associated with increased commodity costs or a limited availability of commodities;

Risks associated with product recalls or product liability claims;

The risk of losses associated with excess and obsolete inventory and the risks of additional required reserves for lower of cost or market value losses in inventory;

For Renin, the risk of trade receivable losses and the risks of charge-offs and required increases in the allowance for expected credit losses;

Risks associated with the performance of vendors, commodity price volatility, shipping costs to deliver raw materials and finished products from foreign countries, and the impact of tariffs on goods imported from Canada and Asia, particularly with respect to Renin;

For Renin, risks associated with exposure to foreign currency exchange risk of the U.S. dollar compared to the Canadian dollar;

The amount and terms of indebtedness associated with the operations and capital expenditures of the subsidiaries may impact their financial condition and results of operations and limit their activities;

For Renin, risks that its acquisition of Colonial Elegance may not be cash accretive immediately or at all; that net income may not be generated when anticipated or at all or the acquisition may result in net losses;

For Renin, risk that the integration of Colonial Elegance may not be completed on a timely basis or as anticipated or that the anticipated expansion or growth opportunities will not be achieved or if achieved will not be advantageous; and

Requirements for operating and capital expenditures may require BBX Capital to make capital contributions or advances.

Business description of BBX-Capital-Inc from last 10-k form