EX-99.1

EX-99.1 8 d918088dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

INFORMATION STATEMENT

BBX CAPITAL FLORIDA LLC

(“NEW BBX CAPITAL”)

CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE

CLASS B COMMON STOCK, PAR VALUE $0.01 PER SHARE

This information statement is being furnished by BBX Capital Corporation, Florida corporation (“Parent”), in connection with its spin-off (the “spin-off”) of BBX Capital Florida LLC, a Florida limited liability company (“New BBX Capital,” “we,” “us” and “our”). New BBX Capital is currently a wholly-owned subsidiary of Parent but, as described below, will become a separate, publicly-traded company as a result of the spin-off. New BBX Capital holds or will hold at the time of the spin-off all of Parent’s investments other than Woodbridge Holdings Corporation (“Woodbridge”), a wholly-owned subsidiary of Parent which in turn owns approximately 93% of the issued and outstanding common stock of Bluegreen Vacations Corporation (“Bluegreen Vacations”). New BBX Capital’s principal holdings are (i) BBX Capital Real Estate LLC (“BBX Capital Real Estate”), which is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures, 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 retained in connection with Parent’s 2012 sale of BankAtlantic, including a portfolio of loans receivable, real estate properties and judgments against past borrowers, (ii) BBX Sweet Holdings LLC (“BBX Sweet Holdings”), which is engaged in the ownership and management of operating businesses in the confectionery industry, including IT’SUGAR, LLC (“IT’SUGAR”), a retailer of special candy products, Hoffman’s Chocolates and Las Olas Confections and Snacks, and (iii) Renin Holdings, LLC (“Renin”), which is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products.

Parent will continue as a separate, public company following the spin-off, with its business consisting of its indirect ownership interest in Bluegreen Vacations. Bluegreen Vacations is a leading vacation ownership company that markets and sells vacation ownership interests (“VOIs”) and manages resorts in popular leisure and urban destinations.

Prior to the spin-off, New BBX Capital will be converted into a Florida corporation to be named BBX Capital, Inc. In connection with the conversion, Parent, as the 100% owner of New BBX Capital at the time, will receive all of the issued and outstanding shares of New BBX Capital’s Class A Common Stock and Class B Common Stock. We refer to New BBX Capital’s Class A Common Stock and Class B Common Stock, collectively, as “New BBX Capital’s common stock.” To effect the spin-off, Parent will distribute all of the shares of New BBX Capital’s common stock held by it to Parent’s shareholders (the “distribution”). As a shareholder of Parent, you will receive one share of New BBX Capital’s Class A Common Stock for each share of Parent’s Class A Common Stock held of record by you as of 5:00 P.M., Eastern time, on September 22, 2020, the record date for the distribution (such date and time, the “record date”), and one share of New BBX Capital’s Class B Common Stock for each share of Parent’s Class B Common Stock held of record by you as of the record date. As a result, the shareholders of Parent prior to the spin-off will become the shareholders of New BBX Capital after the spin-off. In addition, if, as currently anticipated and described in further detail in this information statement, New BBX Capital adopts a rights agreement prior to the spin-off, then each share of New BBX Capital’s Class A Common Stock and Class B Common Stock distributed in connection with the spin-off will have attached thereto an associated preferred share purchase right distributed under the rights agreement. See “Description of Capital Stock” for information regarding New BBX Capital’s Class A Common Stock and Class B Common Stock and the rights agreement expected to be adopted by New BBX Capital in connection with the spin-off.

We expect that the distribution will occur on September 30, 2020 (the “distribution date”). Immediately after the distribution, New BBX Capital will be a separate, publicly-traded company. The spin-off will not impact your holdings of Parent’s Class A Common Stock or Class B Common Stock and, accordingly, your proportionate interest in Parent will not change as a result of the spin-off. The distribution will be a taxable transaction to Parent’s shareholders. See “The Spin-Off—Material U.S. Federal Income Tax Consequences of the Spin-Off.”

It is anticipated that, subject to the approval of Parent’s shareholders, on or about the distribution date, Parent will change its name to Bluegreen Vacations Holding Corporation, reflecting that Parent’s assets and activities will be the assets and activities of its indirect subsidiary, Bluegreen Vacations. As previously described, it is expected that, upon its conversion into a Florida corporation, New BBX Capital will be named BBX Capital, Inc.

The Board of Directors of Parent is seeking shareholder approval of the proposed spin-off and Parent’s contemplated name change to Bluegreen Vacations Holding Corporation. Parent intends to hold a special meeting of its shareholders (the “special meeting”), and Parent is distributing a separate proxy statement which contains information regarding the proposed spin-off, the contemplated name change, and the special meeting. Completion of the spin-off is conditioned upon shareholder approval of the spin-off. You do not need to pay any consideration, exchange or surrender your existing shares of Parent’s Class A Common Stock or Class B Common Stock or take any other action to receive your shares of New BBX Capital’s Class A Common Stock or Class B Common Stock, as applicable.

Prior to the spin-off, Parent will own all of the outstanding shares of New BBX Capital’s common stock. Accordingly, there is no current trading market for New BBX Capital’s common stock. New BBX Capital is applying for its Class A Common Stock and Class B Common Stock to be quoted on the OTCQX market of the OTC Markets Group, Inc. However, there is no assurance that an active public market for New BBX Capital’s Class A Common Stock or Class B Common Stock will develop or be sustained after the spin-off. If an active public market does not develop or is not sustained, it may be difficult for New BBX Capital’s shareholders to sell their shares of New BBX Capital’s Class A Common Stock or Class B Common Stock at a price that is attractive to them, or at all. New BBX Capital has requested the trading symbol “BBXT” for its Class A Common Stock and “BFCTB” for its Class B Common Stock. Subject to the approval of New BBX Capital’s application for quotation, it is expected that a limited market, commonly known as a “when-issued” trading market, for its Class A Common Stock and Class B Common Stock may begin approximately two trading days before the record date. However, “when-issued” symbols are subject to action by the Financial Industry Regulatory Authority (“FINRA”). If “when-issued” trading is approved, FINRA has advised us that it will publish the addition of “when-issued” symbols on its Daily List in advance of the first “when-issued” trading date. It is currently expected that, subject to FINRA approval, “regular way” trading of New BBX Capital’s Class A Common Stock and Class B Common Stock will begin on the first day of trading after the distribution date.

Parent’s Class A Common Stock is listed on the New York Stock Exchange (the “NYSE”). It is anticipated that, beginning on the record date and continuing until the time of the distribution, there will be two markets in shares of Parent’s Class A Common Stock on the NYSE: a “regular-way” market and an “ex-distribution” market. Shares of Parent’s Class A Common Stock that trade on the “regular-way” market will trade with an entitlement to the shares of New BBX Capital’s Class A Common Stock to be distributed in the spin-off in respect thereof. Shares of Parent’s Class A Common Stock that trade on the “ex-distribution” market will trade without an entitlement to shares of New BBX Capital’s Class A Common Stock. Therefore, if a shareholder sells shares of Parent’s Class A Common Stock in the “regular-way” market on or prior to the time of the distribution, such shareholder will also be selling the right to receive the shares of New BBX Capital’s Class A Common Stock that such shareholder would have otherwise received in the spin-off in respect of the shares of Parent’s Class A Common Stock being sold. If a shareholder owns shares of Parent’s Class A Common Stock on the record date and sells those shares on the “ex-distribution” market on or prior to the time of the distribution, such shareholder will continue to be entitled to receive the shares of New BBX Capital’s Class A Common Stock which are distributed in the spin-off in respect of the shares of Parent’s Class A Common Stock being sold.

Parent’s Class B Common Stock is quoted on the OTCQX market. While there is no assurance as to the ex-distribution date that FINRA will ultimately set with respect to New BBX Capital’s Class B Common Stock, it is anticipated that, pursuant to Rule 11140 promulgated by FINRA, FINRA will set an “ex-distribution date” for New BBX Capital’s Class B Common Stock as the first business day following the distribution date. Assuming that FINRA sets an ex-distribution date for New BBX Capital’s Class B Common Stock as the first business day following the distribution date, then shareholders who hold shares of Parent’s Class B Common Stock on the record date and sell the shares on or prior to the distribution date will also be selling the right to receive the shares of New BBX Capital’s Class B Common Stock that such shareholder would have otherwise received in the spin-off in respect of the shares of Parent’s Class B Common Stock being sold.

You are encouraged to consult with your broker or financial advisor regarding the specific implications of selling your shares of Parent’s Class A Common Stock or Class B Common Stock prior to or on the distribution date.

New BBX Capital is an “emerging growth company” as defined under applicable U.S. federal securities laws and, as such, has provided more limited disclosures in this information statement than an issuer that would not so qualify and also intends to elect to comply with the reduced public company reporting requirements for emerging growth companies in its future filings for so long as it is permitted to do so. See “Summary—Implications of Being an Emerging Growth Company.”

In reviewing this information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 27.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.

The date of this information statement is August 27, 2020.

In connection with the distribution, this information statement will be mailed on or about September 28, 2020 to Parent’s shareholders as of the record date for the distribution.

TABLE OF CONTENTS


SUMMARY			5
RISK FACTORS			27
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			49
THE SPIN-OFF			54
DIVIDEND POLICY			67
CAPITALIZATION			68
SELECTED HISTORICAL FINANCIAL INFORMATION			69
UNAUDITED PRO FORMA FINANCIAL STATEMENTS			71
BUSINESS			77
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			87
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			117
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			119
MANAGEMENT			120
EXECUTIVE COMPENSATION			126
DIRECTOR COMPENSATION			130
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			131
DESCRIPTION OF CAPITAL STOCK			133
WHERE YOU CAN FIND MORE INFORMATION			142
INDEX TO COMBINED CARVE-OUT FINANCIAL STATEMENTS			143

SUMMARY

The following is a summary of material information discussed in this information statement. This summary may not contain all the details concerning the spin-off or other information that may be important to you. To better understand the spin-off and New BBX Capital’s business and financial position, you should carefully review this entire information statement. Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement, including the consolidated financial statements of New BBX Capital, assumes the completion of all the transactions referred to in this information statement in connection with the spin-off. Unless the context otherwise requires, references in this information statement to “New BBX Capital,” “we,” “us,” “our” and “our company” refer to BBX Capital Florida LLC, a Florida limited liability company, the Florida corporation into which BBX Capital Florida LLC and its consolidated subsidiaries; provided, however, that, except as expressly set forth to the contrary herein or the context otherwise requires, this information statement assumes the completion of the conversion of BBX Capital Florida LLC into a Florida corporation prior to the spin-off and accordingly, such references shall be deemed to refer to the Florida corporation into which BBX Capital Florida LLC is converted and the consolidated subsidiaries thereof. References in this information statement to “Parent” refer to BBX Capital Corporation, a Florida corporation, and its consolidated subsidiaries (other than, after the spin-off, New BBX Capital and its consolidated subsidiaries), unless the context otherwise requires. We anticipate that, on or about the distribution date and subject to the approval of Parent’s shareholders, Parent will change its name to Bluegreen Vacations Holding Corporation and New BBX Capital’s name will be changed to BBX Capital, Inc. in connection with its conversion into a Florida corporation.

References in this information statement to the historical assets, liabilities, products, businesses or activities of New BBX Capital are generally intended to refer to the historical assets, liabilities, products, businesses or activities of the businesses of New BBX Capital as they have been conducted as part of Parent’s organization.

You should not assume that the information contained in this information statement is accurate as of any date other than the date set forth on the cover. Changes to the information contained in this information statement may occur after that date, and we undertake no obligation to update the information, except as required by law.

This information statement describes New BBX Capital’s business, its relationship with Parent, and how this transaction affects Parent’s shareholders, and provides other information to assist you in evaluating the benefits and risks of the spin-off and holding or disposing of the shares of New BBX Capital’s common stock received in connection with the spin-off.

Parent

Parent is BBX Capital Corporation, a Florida corporation and Florida-based diversified holding company. Parent’s principal investments currently include Bluegreen Vacations (indirectly through Parent’s 100% ownership of Woodbridge), BBX Capital Real Estate, BBX Sweet Holdings, and Renin. As described in further detail below, as a result of the spin-off, New BBX Capital, which holds or will hold all of the subsidiaries of Parent other than Woodbridge, including BBX Capital Real Estate, BBX Sweet Holdings and Renin, will be held by Parent’s shareholders as a result of a distribution to them of shares of New BBX Capital’s Class A Common Stock and Class B Common Stock, and Parent will retain its indirect ownership interest in Bluegreen Vacations through Woodbridge.

Parent is a publicly-traded company. Its Class A Common Stock is listed on the NYSE under the ticker symbol “BBX.” Its Class B Common Stock is traded on the OTCQX under the symbol “BBXTB.” Bluegreen Vacations is a leading vacation ownership company that markets and sells VOIs and manages resorts in popular

leisure and urban destinations. Bluegreen Vacations’ common stock is listed on the NYSE under the ticker symbol “BXG.” Parent, indirectly through Woodbridge, currently owns approximately 93% of Bluegreen Vacations’ common stock.

It is anticipated that, subject to the approval of Parent’s shareholders, on or about the distribution date, Parent will change its name to Bluegreen Vacations Holding Corporation. In connection with the anticipated name change, Parent intends to change the ticker symbols of its Class A Common Stock and Class B Common Stock to “BVH” and “BVHB,” respectively.

Parent will own all of New BBX Capital’s common stock issued and outstanding prior to the distribution. Immediately following the distribution, Parent will not own any shares of New BBX Capital’s common stock. Instead, the shareholders of Parent prior to the spin-off will become the shareholders of New BBX Capital after the spin-off.

New BBX Capital

Overview

New BBX Capital is a Florida-based diversified holding company. Its principal investments include BBX Capital Real Estate, BBX Sweet Holdings and Renin. Prior to the spin-off, New BBX Capital will be converted into a Florida corporation named BBX Capital, Inc.

BBX Capital Real Estate 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 communities, and commercial properties located primarily in Florida. In addition, BBX Capital Real Estate owns a 50% equity interest in The Altman Companies, a developer and manager of multifamily apartment communities, and manages the legacy assets retained in connection with Parent’s sale of BankAtlantic in 2012, including portfolios of loans receivable, real estate properties and judgments. BBX Capital Real Estate had total assets of $161.9 million as of June 30, 2020.

BBX Sweet Holdings is engaged in the ownership and management of operating businesses in the confectionery industry, including IT’SUGAR, Hoffman’s Chocolates, and Las Olas Confections and Snacks. IT’SUGAR is a specialty candy retailer which operates in retail locations throughout the United States. Its products include bulk candy, candy in giant packaging, and novelty items that are sold at its retail locations, which include a mix of high-traffic resort and entertainment, lifestyle, mall/outlet, and urban locations across the United States. Hoffman’s Chocolates is a retailer of gourmet chocolates with retail locations in South Florida. Las Olas Confections and Snacks is a manufacturer and wholesaler of chocolates and other confectionery products. BBX Sweet Holdings had total assets of $133.2 million as of June 30, 2020.

In addition to its principal investments, New BBX Capital also has investments in other operating businesses, including a restaurant located in South Florida that was acquired through foreclosure. From 2016 to 2019, New BBX Capital previously operated as a franchisee of MOD Super Fast Pizza (“MOD”) restaurant locations in Florida. In 2019, the agreements with MOD were terminated, and all of New BBX Capital’s MOD restaurant locations were transferred to MOD or closed.

The Spin-Off

During June 2020, Parent announced its intention to separate its investment in Bluegreen Vacations from its other investments. This separation will be accomplished through a spin-off of New BBX Capital, which owns or will own all of the subsidiaries of Parent (other than Woodbridge, through which Parent owns its approximately 93% ownership interest in Bluegreen Vacations), through a distribution of its common stock to Parent’s shareholders. As a shareholder of Parent, you will receive one share of New BBX Capital’s Class A Common Stock for each share of Parent’s Class A Common Stock held of record by you as of the 5:00 P.M., Eastern time, on September 22, 2020, the record date for the distribution, and one share of New BBX Capital’s Class B Common Stock for each share of Parent’s Class B Common Stock held of record by you as of the record date.

In connection with the contemplated spin-off, New BBX Capital will enter into a number of agreements with Parent, including a Separation and Distribution Agreement, an Employee Matters Agreement, a Transition Services Agreement, and a Tax Matters Agreement. These agreements will provide the terms and conditions of the separation of Parent’s businesses between Parent and New BBX Capital and will govern various ongoing arrangements between Parent and New BBX Capital upon completion of the spin-off.

As described in further detail below, completion of the spin-off is subject to a number of conditions, including the approval of the distribution and all related transactions by Parent’s Board of Directors (and such approval not having been withdrawn) and the approval by Parent’s shareholders of the proposed spin-off. Subject to the satisfaction of the conditions to completion of the spin-off, we expect that the distribution will occur on September 30, 2020. Immediately after the distribution, New BBX Capital will be a separate, publicly-traded company and Parent will not own any shares of New BBX Capital’s common stock.

As previously described, it is anticipated that, on or about the distribution date, Parent will change its name to Bluegreen Vacations Holding Corporation and, upon its conversion into a Florida corporation, New BBX Capital will be named BBX Capital, Inc.

New BBX Capital is applying for its Class A Common Stock and Class B Common Stock to be quoted on the OTCQX market of the OTC Markets Group, Inc. (the “OTC Markets”). New BBX Capital has requested the trading symbol “BBXT” for its Class A Common Stock and “BFCTB” for its Class B Common Stock.

The spin-off will be a taxable transaction to Parent’s shareholders. See “The Spin-Off—Material U.S. Federal Income Tax Consequences of the Spin-Off.”

Risk Factors

You should carefully read the section of this information statement entitled “Risk Factors” for an explanation of risks and uncertainties associated with the business and investments of New BBX Capital, as well as risks and uncertainties related to the spin-off and to ownership of New BBX Capital’s common stock.

Implications of Being an Emerging Growth Company

New BBX Capital qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, it may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies, including reduced financial disclosure and reduced disclosure about its executive compensation arrangements. In addition, as an emerging growth company, New BBX Capital is exempt from the requirements to hold non-binding advisory votes on executive compensation and golden parachute payments, and from the auditor attestation requirement in the assessment of its internal control over financial reporting.

New BBX Capital is permitted to, and intends to, take advantage of these exemptions until it no longer qualifies for such exemptions. It will cease to be an emerging growth company upon the earliest of:

•

the last day of the fiscal year in which it has $1.07 billion or more in annual revenues;

•

the last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”);

•

the date on which it has issued more than $1.0 billion in non-convertible debt securities during the previous three-year period; and

•

the date on which it is deemed to be a “large accelerated filer” (which is the last day of the fiscal year during which the total market value of common equity securities held by non-affiliates is $700 million or more, calculated as of the end of the second quarter (June 30) of such fiscal year).

New BBX Capital may choose to take advantage of some, but not all, of the exemptions available to it. New BBX Capital has taken advantage of certain reduced reporting obligations in this information statement. Accordingly, the information contained herein may be different than the information you receive from other public companies.

In addition, Section 107 of the JOBS Act provides that an emerging growth company may take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. New BBX Capital is choosing to opt out of the extended transition periods available under the JOBS Act for complying with new or revised accounting standards. Pursuant to Section 107 of the JOBS Act, the decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Corporate Information

BBX Capital Florida LLC is a Florida limited liability company. Its principal executive offices are located at 401 East Las Olas Boulevard, Suite 800, Fort Lauderdale, Florida, 33301. It is expected that, following the spin-off, its telephone number will be 954-940-4000 and its corporate website will be located at www.bbxcapital.com. Information contained on, or connected to, New BBX Capital’s website or Parent’s website does not and will not constitute part of this information statement or the registration statement on Form 10 of which this information statement is a part.

As previously described, immediately prior to the spin-off, BBX Capital Florida LLC will be converted into a Florida corporation and continue its business under the name BBX Capital, Inc. as a separate, publicly-traded company.

QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF

The following provides a summary of certain of the terms of the spin-off. For a more detailed description of the matters described below, see “The Spin-Off.”

Q: What is the spin-off?

A: The spin-off is the method by which New BBX Capital will separate from Parent. To complete the spin-off, Parent will distribute to its shareholders all of the shares of New BBX Capital’s common stock. We refer to this as the “distribution.” Following the spin-off, New BBX Capital will be a separate company from Parent, and Parent will not retain any ownership interest in New BBX Capital. The separation of New BBX Capital from Parent and the distribution of New BBX Capital’s common stock are intended to provide you with equity investments in two separate companies, each able to focus on its respective business and investments. The two separate companies will be (i) New BBX Capital, which, as described in further detail below, holds or will hold all of Parent’s subsidiaries other than Woodbridge, through which Parent currently holds approximately 93% of the outstanding Common Stock of Bluegreen Vacations, and (ii) Parent, which will continue to hold its investment in Bluegreen Vacations indirectly through Woodbridge. Bluegreen Vacations is a leading vacation ownership company that markets and sells VOIs and manages resorts in popular leisure and urban destinations. Bluegreen Vacations’ common stock is listed on the NYSE under the ticker symbol “BXG.”

Q: What is New BBX Capital?

A: New BBX Capital is currently a wholly-owned subsidiary of Parent. Prior to the spin-off, New BBX Capital will be converted into a Florida corporation. New BBX Capital’s subsidiaries include (i) BBX Capital Real Estate, which is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures, owns a 50% equity interest in The Altman Companies, a developer and manager of multifamily apartment communities, and manages the legacy assets retained in connection with Parent’s sale of BankAtlantic in 2012, including portfolios of loans receivable, real estate properties and judgments, (ii) BBX Sweet Holdings, which is engaged in the ownership and management of operating businesses in the confectionery industry, including IT’SUGAR, a retailer of special candy products, Hoffman’s Chocolates and Las Olas Confections and Snacks, and (iii) Renin, which is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products. In addition to its principal holdings, New BBX Capital also holds or will hold at the time of the spin-off certain other investments in various operating businesses, as described in further detail herein.

It is anticipated that, on or about the distribution date and subject to the approval of Parent’s shareholders, Parent will change its name to Bluegreen Vacations Holding Corporation and, upon its conversion into a Florida Corporation, New BBX Capital will be named BBX Capital Inc.

Q: What will I receive in the spin-off?

A: As a shareholder of Parent, in connection with the spin-off, you will receive one share of New BBX Capital’s Class A Common Stock for each share of Parent’s Class A Common Stock you own as of the record date and one share of New BBX Capital’s Class B Common Stock for each share of Parent’s Class B Common Stock you own as of the record date. In addition, if New BBX Capital adopts a rights agreement prior to the spin-off, then each share of New BBX Capital’s Class A Common Stock and Class B Common Stock distributed in connection with the spin-off will have attached thereto an associated preferred share purchase right distributed under the rights agreement. See “Description of Capital Stock” for additional information regarding the rights agreement expected to be adopted by New BBX Capital.

The spin-off will not impact your holdings of Parent’s Class A Common Stock and Class B Common Stock, as applicable, and, accordingly, your proportionate interest in Parent will not change as a result of the spin-off.

Based on the number of shares of Parent’s Class A Common Stock and Class B Common Stock expected to be outstanding as of the record date, we expect that approximately 15,624,091 shares of New BBX Capital’s Class A Common Stock and 3,693,596 shares of New BBX Capital’s Class B Common Stock will be distributed in the spin-off. However, the actual number of shares of New BBX Capital’s Class A Common Stock and Class B Common Stock to be distributed in the spin-off will be determined based on the actual number of shares of Parent’s Class A Common Stock and Class B Common Stock outstanding as of the record date. The shares of New BBX Capital’s Class A Common Stock and Class B Common Stock to be distributed in the spin-off will constitute all of the issued and outstanding shares of New BBX Capital’s common stock immediately following the distribution. The share amounts set forth above and elsewhere herein reflect the one-for-five reverse split of Parent’s Class A Common Stock and Class B Common Stock which was effected on July 22, 2020.

Q: What will be the voting rights of the New BBX Capital stock I receive in the spin-off?

A: The shares of New BBX Capital’s Class A Common Stock or Class B Common Stock that you will receive in the spin-off will have the same voting rights as the respective shares of Parent’s Class A Common Stock or Class B Common Stock that you currently hold. As a general matter, holders of New BBX Capital’s Class A Common Stock and Class B Common Stock will vote as one class on the election of directors and most other matters submitted to a vote of New BBX Capital’s shareholders. In such cases, holders of New BBX Capital’s Class A Common Stock will be entitled to one vote per share on each such matter, with all holders of New BBX Capital’s Class A Common Stock having in the aggregate 22% of the general voting power, and holders of New BBX Capital’s Class B Common Stock will be entitled to such number of votes on each such matter so that the holders of New BBX Capital’s Class B Common Stock have in the aggregate 78% of the general voting power. Pursuant to New BBX Capital’s Articles of Incorporation, the holders of New BBX Capital’s Class B Common Stock will also be entitled to a separate class vote on certain matters to the same extent that such holders have the right to a separate class vote under Parent’s Amended and Restated Articles of Incorporation, as amended (“Parent’s Articles of Incorporation”). In addition, the holders of New BBX Capital’s Class A Common Stock and Class B Common Stock will each be entitled to a separate class vote under limited circumstances provided by Florida law. See “Description of Capital Stock” for additional information.

Q: What is the record date for the distribution?

A: The record date for the distribution will be 5:00 p.m. Eastern Time on September 22, 2020, which date and time we refer to as the “record date.”

Q: When will the distribution occur?

A: We expect that the shares of New BBX Capital’s Class A Common Stock and Class B Common Stock will be distributed on or about September 30, 2020, which we refer to as the “distribution date.” It is expected that the

distribution agent, acting on behalf of Parent, may require up to one week after the distribution date to fully distribute the shares of New BBX Capital’s common stock to Parent’s shareholders.

Q: Is Parent seeking shareholder approval of the spin-off?

A: Yes. Parent’s Board of Directors is seeking the approval of Parent’s shareholders to effect the spin-off and to approve Parent’s contemplated name change to Bluegreen Vacations Holding Corporation at a special meeting of its shareholders. Parent is distributing a separate proxy statement which contains information regarding the approvals sought and the special meeting. Completion of the spin-off is conditioned upon the approval of the spin-off by Parent’s shareholders.

Q: What do shareholders need to do to participate in the distribution?

A: You do not need to take any action to receive your shares of New BBX Capital’s Class A Common Stock and Class B Common Stock, as applicable, in the spin-off, but you are encouraged to read this entire information statement carefully. You will not be required make any payment to Parent for the new shares or to surrender any shares of Parent’s Class A Common Stock or Class B Common Stock you currently own in order to participate in the spin-off. However, the receipt of shares of New BBX Capital’s Class A Common Stock or Class B Common Stock will be a taxable transaction to Parent’s shareholders. See “What are the U.S. federal income tax consequences of the distribution to Parent’s shareholders?” below and “The Spin-Off—Material U.S. Federal Income Tax Consequences of the Spin-Off.”

Q: Will fractional shares be distributed in the spin-off?

A: Because the distribution ratio is one share of New BBX Capital’s Class A Common Stock for each share of Parent’s Class A Common Stock and one share of New BBX Capital’s Class B Common Stock for each share of Parent’s Class B Common Stock, no fractional shares will result from, or be distributed in, the spin-off.

Q: Will the spin-off affect Parent’s preferred share purchase rights or rights agreement? Will New BBX Capital adopt a rights agreement?

A: During June 2020, Parent entered into a rights agreement similar to rights agreements adopted by other public companies in light of the COVID-19 pandemic in an effort to protect against investors seeking short-term gains from taking advantage of current market conditions at the expense of Parent and its long-term investors. Pursuant to the rights agreement, Parent distributed one right for each share of its Class A Common Stock and Class B Common Stock outstanding as of the close of business on June 29, 2020, the record date for purposes of the distribution set forth in the rights agreement. Subject to the terms and conditions of the rights agreement, including certain exceptions set forth therein, the rights will become exercisable upon the earlier to occur of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons or person(s) acting in concert therewith has acquired, or obtained the right to acquire, beneficial ownership of 5% or more of the outstanding shares of Parent’s Class A Common Stock, Class B Common Stock or total combined common stock or (ii) 10 business days (or such later date as may be determined by action of Parent’s Board of Directors) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 5% or more of the outstanding shares of Parent’s Class A Common Stock, Class B Common Stock or total combined common stock. If the rights become exercisable, each right (other than the rights beneficially owned by the triggering person, its affiliates, associates and others acting in concert therewith, and certain of their respective transferees, all of which rights will become void) will entitle its holder to purchase, a number of shares of Parent’s Class A Common Stock or equivalent securities having a market value at that time of twice the right’s exercise price. The spin-off will not have any impact on Parent’s rights agreement or the preferred share purchase rights issued thereunder, each of which will continue in effect in accordance with their prevailing terms and conditions.

It is expected that, prior to or in connection with the spin-off, New BBX Capital will adopt a rights agreement the terms of which will be similar to those contained in Parent’s rights agreement. The rights agreement may have an anti-takeover effect and will be an impediment to a proposed takeover of New BBX Capital which is not approved by New BBX Capital’s Board of Directors and may also limit the trading of, or otherwise adversely impact the market price of, New BBX Capital’s Class A Common Stock or Class B Common Stock. If New BBX Capital adopts the rights agreement prior to the spin-off, then each share of New BBX Capital’s Class A Common Stock and Class B Common Stock distributed in connection with the spin-off will have attached thereto an associated preferred share purchase right distributed under the rights agreement. Acquisitions of shares of New BBX Capital’s Class A Common Stock or Class B Common Stock as a result of acquiring additional shares of Parent’s Class A Common Stock or Class B Common Stock prior to the distribution or shares representing New BBX Capital’s Class A Common Stock or Class B Common Stock in the when-issued trading market or as a result of the distribution will each be included in determining the beneficial ownership of a person and all such acquisitions following the first public announcement of New BBX Capital’s adoption of the rights agreement will be taken into account in determining whether a person is an acquiring person under the terms of the rights agreement. Therefore, a person could become an acquiring person under the terms of the rights agreement simultaneously with the receipt of shares in the distribution. See “Description of Capital Stock” for additional information regarding the rights agreement expected to be adopted by New BBX Capital.

Q: What are the U.S. federal income tax consequences of the distribution to Parent’s shareholders?

A: For U.S. federal income tax purposes, the receipt of New BBX Capital’s Class A Common Stock or Class B Common Stock in the spin-off is expected to be treated as a distribution of property in an amount equal to the fair market value of the stock received. We believe that a reasonable approach to determine the fair market value of the shares of New BBX Capital’s Class A Common Stock or Class B Common Stock received would be to use the volume-weighted average price of New BBX Capital’s common stock on the first full trading day following the distribution. We believe this is a reasonable approach because the rights of New BBX Capital’s Class A Common Stock and Class B Common Stock (other than voting rights, as described above) are substantially the same and New BBX Capital’s Class B Common Stock will be convertible into shares of New BBX Capital’s Class A Common Stock on a share-for-share basis in the holder’s discretion; however, there is expected to be significantly less trading volume in the shares of New BBX Capital’s Class B Common Stock as compared to New BBX Capital’s Class A Common Stock.

The distribution of New BBX Capital’s Class A Common Stock or Class B Common Stock in the spin-off should be treated as ordinary dividend income to the extent considered paid out of Parent’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of Parent’s current year and accumulated earnings and profits will be treated as a non-taxable return of capital, which reduces basis, to the extent of the holder’s basis in its shares of Parent’s Class A Common Stock or Class B Common Stock, as applicable, and thereafter as capital gain. The amount of those earnings and profits is not determinable at this time because it will depend on Parent’s income for the entire tax year in which the distribution occurs. For a more detailed discussion, see “The Spin-Off—Material U.S. Federal Income Tax Consequences of the Spin-Off” and “Risk Factors—Risks Relating to the Spin-Off—The distribution of our common stock will not qualify for tax-free treatment.”

Q: Why has Parent decided to spin-off New BBX Capital?

A: Parent’s Board of Directors has determined that the separation of its investment in Bluegreen Vacations from its other investments is in the best interests of Parent’s shareholders. Parent’s Board of Directors believes such investments have distinct characteristics and that separating Parent’s investment in Bluegreen Vacations from its other investments will, among other things:

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allow each company to adopt strategies and pursue objectives appropriate to each, independent of the other, which would better position each company to maximize value over the long-term;

•

bring greater clarity to the marketplace as to each company’s core competencies;

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better position each company to optimize capital deployment and investment strategies necessary to advance their respective interests, and provide management with incentives related directly to each company’s performance and align their interests with the other shareholders of the company;

•

provide current Parent shareholders with equity investments in two separate, publicly traded companies, including Parent, which following the spin-off will be a “pure play” Bluegreen Vacations holding company; and

•

enable investors to better evaluate the financial performance, strategies, and other characteristics of each company, allowing investors to make investment decisions based on each company’s individual performance and potential, and enhance the likelihood that the market will value each company appropriately.

Q: Are there risks associated with the spin-off and ownership of New BBX Capital’s common stock?

A: Yes. There are a number of risks associated with the spin-off, New BBX Capital and ownership of New BBX Capital’s common stock. We discuss these risks under “Risk Factors.”

Q: Are there conditions to completion of the spin-off?

A: Yes. Completion of the spin-off is subject to the following conditions:

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the Board of Directors of Parent, in its sole and absolute discretion, shall have authorized and approved the spin-off (and such authorization and approval shall not have been withdrawn, as described below);

•

the approval of the spin-off by Parent’s shareholders;

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New BBX Capital’s registration statement on Form 10 of which this information statement is a part shall have become effective under the Exchange Act and shall not be the subject of any stop order or proceedings seeking a stop order, and this information statement shall have been sent to Parent’s shareholders as of the close of business on the record date, all necessary permits and authorizations under the Securities Act and the Exchange Act relating to the issuance and trading of shares of New BBX Capital’s Class A Common Stock and Class B Common Stock shall have been obtained and be in effect, and such shares shall have been approved for listing, trading or quotation on a national securities exchange or on the OTC Markets, subject to official notice of issuance; and

•

no court or other governmental authority having jurisdiction over Parent or New BBX Capital shall have issued or entered any order, and no applicable law shall have been enacted or promulgated, in each case, that is then in effect and has the effect of permanently restraining, enjoining or otherwise prohibiting the consummation of the spin-off.

We are not aware of any material regulatory requirements that must be complied with or any material regulatory or third party approvals that must be obtained, other than compliance with SEC rules and regulations and the approval for listing, trading or quotation of New BBX Capital’s Class A Common Stock and Class B Common Stock on a national securities exchange or on the OTC Markets, subject to official notice of issuance.

Q: Can Parent’s Board of Directors decide to terminate the spin-off even if all of the conditions have been satisfied?

A: Yes. Until the distribution has occurred, Parent’s Board of Directors has the right to terminate the spin-off, even if all of the other conditions have been satisfied, if Parent’s Board of Directors determines, in its sole and absolute discretion, that the spin-off is not in the best interests of Parent and its shareholders or that market conditions or other circumstances are such that the separation of New BBX Capital and Parent is otherwise no longer advisable at that time.

Q: When will I be able to trade my shares of New BBX Capital’s Class A Common Stock and/or Class B Common Stock? What will the market price be?

A: Parent will own all of the outstanding shares of New BBX Capital’s common stock prior to the spin-off. Accordingly, there is no current trading market for New BBX Capital’s common stock. New BBX Capital is applying for its Class A Common Stock and Class B Common Stock to be quoted on the OTCQX market and has requested the trading symbol “BBXT” for its Class A Common Stock and “BFCTB” for its Class B Common Stock. Subject to the approval of New BBX Capital’s application for quotation, it is expected that a limited market, commonly known as a “when-issued” trading market, for its Class A Common Stock and Class B Common Stock may begin approximately two trading days before the record date. However, “when-issued” symbols are subject to action by FINRA. If “when-issued” trading is approved, FINRA has advised us that it will publish the addition of “when-issued” symbols on its Daily List in advance of the first “when-issued” trading date. It is currently expected that, subject to FINRA approval, “regular way” trading of New BBX Capital’s Class A Common Stock and Class B Common Stock will begin on the first day of trading after the distribution date.

We cannot predict what the market price will be for New BBX Capital’s Class A Common Stock or Class B Common Stock, in each case, prior to, on or after the distribution date. It is possible that some of Parent’s shareholders may sell the shares received in connection with the spin-off because, among other things, New BBX Capital’s investments or strategies do not fit their investment objectives or because New BBX Capital’s Class A Common Stock or Class B Common Stock may not be included in certain indices. The market price of New BBX Capital’s Class A Common Stock and Class B Common Stock may fluctuate significantly, including during the period before the market has analyzed fully the business and financial characteristics of New BBX Capital separate from Parent.

Q: Does New BBX Capital expect to pay dividends after the spin-off?

A: No. It is not anticipated that New BBX Capital will pay cash dividends on its common stock following the spin-off. New BBX Capital currently intends to retain any earnings for use in the operation of its business.

Q: Will my shares of Parent’s Class A Common Stock and Class B Common Stock continue to trade after the spin-off?

A: Subject to continued compliance with applicable listing standards and requirements, it is expected that, following the spin-off, Parent’s Class A Common Stock will continue to trade on the NYSE and Parent’s Class B Common Stock will continue to be quoted on the OTCQX market. It is anticipated that, on or about the distribution date and subject to the approval of the holders of Parent’s shareholders, Parent will change its name to Bluegreen Vacations Holding Corporation. In connection with such name change, it is expected that the ticker symbol of Parent’s Class A Common Stock on the NYSE will change from “BBX” to “BVH” and the trading symbol of Parent’s Class B Common Stock on the OTCQX market will change from “BBXTB” to “BVHB.”

Parent’s name change will not affect the validity or transferability of any currently outstanding stock certificates and shareholders will not be requested to, and should not, surrender for exchange any certificates presently held by them, whether in connection with the spin-off or the name change.

Q: If I sell my shares of Parent’s Class A Common Stock or Class B Common Stock prior to the distribution, will I still be entitled to receive shares of New BBX Capital in the distribution?

A: It is anticipated that, beginning on the record date and continuing until the time of the distribution, there will be two markets in shares of Parent’s Class A Common Stock on the NYSE: a “regular-way” market and an “ex-distribution” market. Shares of Parent’s Class A Common Stock that trade on the “regular-way” market will trade with an entitlement to the shares of New BBX Capital’s Class A Common Stock to be distributed in the spin-off in respect thereof. Shares of Parent’s Class A Common Stock that trade on the “ex-distribution” market will trade without an entitlement to shares of New BBX Capital’s Class A Common Stock. Therefore, if a shareholder sells shares of Parent’s Class A Common Stock in the “regular-way” market on or prior to the time of the distribution, such shareholder will also be selling the right to receive the shares of New BBX Capital’s Class A Common Stock that such shareholder would have otherwise received in the spin-off in respect of the shares of Parent’s Class A Common Stock being sold. If a shareholder owns shares of Parent’s Class A Common Stock on the record date and sells those shares on the “ex-distribution” market on or prior to the time of the distribution, such shareholder will continue to be entitled to receive the shares of New BBX Capital’s Class A Common Stock which are distributed in the spin-off in respect of the shares of Parent’s Class A Common Stock being sold.

Q: Will the spin-off affect the market price of Parent’s Class A Common Stock or Class B Common Stock?

A: It is possible that the market price of Parent’s Class A Common Stock and/or Class B Common Stock will be affected by the spin-off because such stock will no longer reflect the benefits, risks or rewards associated with

New BBX Capital and its subsidiaries. There is no assurance as to how the market will respond to the spin-off, including the agreements entered into in connection with the spin-off and the relationship between Parent and New BBX Capital following the spin-off. We cannot provide you with any assurance as to the price at which shares of Parent’s Class A Common Stock or Class B Common Stock or New BBX Capital’s Class A Common Stock or Class B Common Stock will trade following the spin-off.

Q: What will be the relationship between Parent and New BBX Capital after the spin-off?

A: Immediately following the spin-off, New BBX Capital will be a separate, publicly-traded company, and Parent will have no continuing stock ownership interest in New BBX Capital. In connection with the spin-off, New BBX Capital will enter into a Separation and Distribution Agreement and certain other agreements with Parent which will provide the terms and conditions of the separation of the businesses of Parent between Parent and New BBX Capital and will govern various ongoing arrangements between Parent and New BBX Capital after completion of the spin-off.

In connection with the spin-off and pursuant to the Separation and Distribution Agreement, Parent will execute a $75 million promissory note in favor of New BBX Capital. Amounts outstanding under the note will accrue interest at a rate of 6% per annum. The note will require payments of interest only on a quarterly basis; provided however that interest payments may be deferred at the option of Parent, with interest on the entire outstanding balance thereafter to accrue at a cumulative, compounded rate of 8% per annum until such time as Parent is current on all accrued payments under the note, including deferred interest. All outstanding amounts under the note will become due and payable in five years or upon certain events.

Following the spin-off, there will be an overlap between executive management of Parent and New BBX Capital. Alan B. Levan will continue to serve as the Chairman, Chief Executive Officer and President of Parent and will also serve as the Chairman of New BBX Capital. John E. Abdo will continue to serve as the Vice Chairman of Parent and Bluegreen Vacations and will also serve as the Vice Chairman of New BBX Capital. Jarett S. Levan, the son of Alan B. Levan, will continue to serve as a director of Parent and Bluegreen Vacations and will be the Chief Executive Officer and President and a director of New BBX Capital. In addition, Seth M. Wise will be Executive Vice President and a director of New BBX Capital and will continue to serve as a director of Bluegreen Vacations. Other than Messrs. Alan Levan, Abdo, Jarett Levan, Darwin Dornbush, Joel Levy and William Nicholson, it is expected that the directors serving on Parent’s Board of Directors at the time of the spin-off will resign as directors of Parent and instead serve as directors of New BBX Capital following the spin-off. Messrs. Dornbush, Levy and Nicholson are expected to remain as directors of Parent and not join New BBX Capital’s Board. See “Management” for additional information.

Q: What will Alan B. Levan, John E. Abdo’s, Jarett S. Levan’s and Seth M. Wise’s ownership and voting percentage of New BBX Capital be immediately following the distribution?

Alan B. Levan, John E. Abdo, Jarett S. Levan and Seth M. Wise will have the same ownership and voting interest in New BBX Capital immediately following the spin-off as they have with respect to Parent immediately prior to the spin-off. Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise currently collectively beneficially own shares representing approximately 20.6% of Parent’s outstanding Class A Common Stock and 95.2% of Parent’s outstanding Class B Common Stock. In the aggregate, these shares currently represent approximately 34.8% of Parent’s total outstanding common equity and 78.8% of the total voting power of Parent’s Class A Common Stock and Class B Common Stock. For so long as Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise collectively have a greater than 50% voting interest in New BBX Capital, they will have the voting power to approve the election of directors and any matter which requires the affirmative vote of shares representing a majority of New BBX Capital’s total voting power.

Q: Do Parent’s executive officers and directors have interests in the spin-off that may be different from or in addition to the interests of Parent’s other shareholders?

Yes. You should be aware that the executive officers and directors of Parent have interests in the spin-off that may differ from, or may be in addition to, the interests of Parent’s shareholders generally. These interests include the following:

•

As previously described, following the spin-off, there will be an overlap between executive management of Parent and New BBX Capital. Alan B. Levan, John E. Abdo and Jarett S. Levan will serve as directors of Parent, Bluegreen Vacations and New BBX Capital, and Messrs. Alan Levan and Abdo will serve as executive officers of Parent, Bluegreen Vacations and New BBX Capital. In addition, Seth M. Wise will be Executive Vice President and a director of New BBX Capital and will continue to serve as a director of Bluegreen Vacations. In addition, it is expected that the non-employee directors serving on Parent’s Board of Directors at the time of the spin-off (other than Darwin Dornbush, Joel Levy and William Nicholson, who are expected to remain directors of Parent and not join New BBX Capital’s Board) will resign as directors of Parent and serve as directors of New BBX Capital following the spin-off. Non-employee directors of New BBX Capital will receive compensation for their service on New BBX Capital’s Board of Directors and committees. Such compensation is expected to be the same as what they currently receive for their service on Parent’s Board of Directors and its committees.

•

The vesting of all unvested restricted stock awards of Parent’s Class A Common Stock and Class B Common Stock was accelerated in contemplation of the spin-off. These restricted stock awards, all of which were held by the Company’s executive officers, covered a total of 488,503 shares of Parent’s Class A Common Stock and 528,484 shares of Parent’s Class B Common Stock as follows: Alan B. Levan held, and had vested, restricted stock awards of 193,042 shares of Parent’s Class A Common Stock and 183,125 shares of Parent’s Class B Common Stock; John E. Abdo held, and had vested, restricted stock awards of 193,042 shares of Parent’s Class A Common Stock and 212,892 shares of Parent’s Class B Common Stock; Jarett S. Levan held, and had vested, restricted stock awards of 48,261 shares of Parent’s Class A Common Stock and 60,698 shares of Parent’s Class B Common Stock; Seth M. Wise held, and had vested, restricted stock awards of 48,261 shares of Parent’s Class A Common Stock and 60,698 shares of Parent’s Class B Common Stock; and Raymond S. Lopez held, and had vested, restricted stock awards of 5,897 shares of Parent’s Class A Common Stock and 11,071 shares of Parent’s Class B Common Stock. The shares are (and, prior to their vesting, were) considered outstanding and will participate in the spin-off on the same terms as all other outstanding shares of Parent’s common stock. Absent the vesting acceleration, the restricted stock awards would otherwise have been scheduled to vest between October 2020 and October 2023.

Q: Will I have appraisal rights in connection with the spin-off?

A: No. Shareholders of Parent will not have any appraisal rights in connection with the spin-off.

Q: Who is the distribution agent for the spin-off?

A: American Stock Transfer & Trust Company, LLC (“AST”) will be the distribution agent for the spin-off.

Q: Who will be the transfer agent for New BBX Capital’s Class A Common Stock and Class B Common Stock after the spin-off?

A: It is expected that AST will be the transfer agent for New BBX Capital’s Class A Common Stock and Class B Common Stock after the spin-off.

Q: Where can I get more information?

A: If you have any questions relating to the spin-off, you should contact the distribution agent at:

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Telephone: (800) 937-5449 or (718) 921-8317

SUMMARY OF THE SPIN-OFF

Distributing Company/Parent

BBX Capital Corporation (“Parent”), a Florida corporation. Immediately after the distribution, Parent will not own any shares of New BBX Capital’s Class A Common Stock or Class B Common Stock.

Distributed/Spin-Off Company

BBX Capital Florida LLC (“New BBX Capital”), which is currently a wholly-owned subsidiary of Parent. BBX Capital Florida LLC will be converted into a Florida corporation named BBX Capital, Inc. immediately prior to the spin-off and such corporation will become a separate, publicly-traded company as a result of the spin-off.

Separation of Businesses

In connection with the spin-off, Parent will retain its investment in Bluegreen Vacations, a leading vacation ownership company that markets and sells VOIs and manages resorts in leisure and urban destinations, making Parent a “pure play” Bluegreen Vacations holding company. Parent holds its investment in Bluegreen Vacations indirectly through Woodbridge, a wholly-owned subsidiary of Parent which owns approximately 93% of Bluegreen Vacations’ common stock. Bluegreen Vacations’ common stock is traded on the NYSE under the ticker symbol “BXG.”

If the spin-off is completed, New BBX Capital will be a separate, publicly-traded company holding all of Parent’s subsidiaries other than Woodbridge and Bluegreen Vacations (and its subsidiaries). Subsidiaries owned by New BBX Capital include (i) BBX Capital Real Estate, which is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures, owns a 50% equity interest in The Altman Companies, a developer and manager of multifamily apartment communities, and manages the legacy assets retained after Parent’s sale of BankAtlantic in 2012, including portfolios of loans receivable, real estate properties and judgments, (ii) BBX Sweet Holdings, which owns and manages operating businesses in the confectionery industry, including IT’SUGAR, a retailer of special candy products, Hoffman’s Chocolates and Las Olas Confections and Snacks, and (iii) Renin, which is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products.

Anticipated Name Changes

Subject to the approval of Parent’s shareholders, it is expected that, on or about the distribution date, Parent will change its name to Bluegreen Vacations Holding Corporation and, upon its conversion into a Florida corporation, New BBX Capital will be named BBX Capital, Inc.

Distributed Securities

All of the shares of New BBX Capital’s Class A Common Stock and Class B Common Stock, which will represent 100% of New BBX Capital’s common stock issued and outstanding immediately following the distribution.

In addition, if New BBX Capital adopts a rights agreement prior to the spin-off, then each share of New BBX Capital’s Class A Common Stock and Class B Common Stock distributed in connection with the spin-off will have attached thereto an associated preferred share purchase right distributed under the rights agreement. See “Description of Capital Stock” for additional information regarding the rights agreement expected to be adopted by New BBX Capital.

Record Date

5:00 P.M., Eastern time, on September 22, 2020.

Distribution Date

September 30, 2020.

Distribution Ratio

Each shareholder of Parent will receive one share of New BBX Capital’s Class A Common Stock for each share of Parent’s Class A Common Stock held by such shareholder as of the record date and one share of New BBX Capital’s Class B Common Stock for each share of Parent’s Class B Common Stock held by such shareholder as of the record date.

The Distribution

On or before the distribution date, Parent will release the shares of New BBX Capital’s Class A Common Stock and Class B Common Stock to the distribution agent to distribute to Parent’s shareholders. The shares will be distributed in book-entry form, which means that no physical share certificates will be issued. We expect that it may take the distribution agent up to one week following the distribution date to electronically issue shares of New BBX Capital’s Class A Common Stock and/or Class B Common Stock to you or to your bank or brokerage firm on your behalf by way of direct registration in book-entry form.

You will not be required to make any payment, surrender or exchange of your shares of Parent’s Class A Common Stock or Class B Common Stock or take any other action to receive your shares of New BBX Capital’s Class A Common Stock or Class B Common Stock, as applicable. However, Parent is seeking shareholder approval of the spin-off and Parent’s contemplated name change to Bluegreen Vacations Holding Corporation. Parent intends to hold a special meeting of its shareholders to approve these actions and is distributing a separate proxy statement which contains information regarding the proposed spin-off and name change and the special meeting. Completion of the spin-off is conditioned upon shareholder approval of the spin-off and certain other conditions described below.

In addition, the spin-off will be a taxable transaction to you, as a shareholder of Parent, as described in further detail below.

No Fractional Shares

Because the distribution ratio is one share of New BBX Capital’s Class A Common Stock for each share of Parent’s Class A Common Stock and one share of New BBX Capital’s Class B Common Stock for each share of Parent’s Class B Common Stock, no fractional shares will result from, or be distributed in, the spin-off.

Conditions to the Spin-Off

Completion of the spin-off is subject to the following conditions:

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the approval by Parent’s shareholders of the spin-off;

•

New BBX Capital’s registration statement on Form 10 of which this information statement is a part shall have become effective under the Exchange Act and shall not be the subject of any stop order or proceedings seeking a stop order, and this information statement shall have been sent to Parent’s shareholders as of the close of business on the record date, all necessary permits and authorizations under the Securities Act and the Exchange Act relating to the issuance and trading of shares of New BBX Capital’s Class A Common Stock and Class B Common Stock shall have been obtained and be in effect, and such shares shall have been approved for listing, trading or quotation on a national securities exchange or the OTC Markets, subject to official notice of issuance; and

•

Trading of Shares

New BBX Capital is applying for its Class A Common Stock and Class B Common Stock to be quoted on the OTCQX market and has requested the trading symbol “BBXT” for its Class A Common Stock and “BFCTB” for its Class B Common Stock. Subject to the approval of New BBX Capital’s application for quotation, it is expected that a limited market, commonly known as a “when-issued” trading market,

for its Class A Common Stock and Class B Common Stock may begin approximately two trading days before the record date. However, “when-issued” symbols are subject to action by FINRA. If “when-issued” trading is approved, FINRA has advised us that it will publish the addition of “when-issued” symbols on its Daily List in advance of the first “when-issued” trading date. It is currently expected that, subject to FINRA approval, “regular way” trading of New BBX Capital’s Class A Common Stock and Class B Common Stock will begin on the first day of trading after the distribution date.

It is anticipated that, beginning on the record date and continuing until the time of the distribution, there will be two markets in shares of Parent’s Class A Common Stock on the NYSE: a “regular-way” market and an “ex-distribution” market. Shares of Parent’s Class A Common Stock that trade on the “regular-way” market will trade with an entitlement to the shares of New BBX Capital’s Class A Common Stock to be distributed in the spin-off in respect thereof. Shares of Parent’s Class A Common Stock that trade on the “ex-distribution” market will trade without an entitlement to shares of New BBX Capital’s Class A Common Stock. Therefore, if a shareholder sells shares of Parent’s Class A Common Stock in the “regular-way” market on or prior to the time of the distribution, such shareholder will also be selling the right to receive the shares of New BBX Capital’s Class A Common Stock that such shareholder would have otherwise received in the spin-off in respect of the shares of Parent’s Class A Common Stock being sold. If a shareholder owns shares of Parent’s Class A Common Stock on the record date and sells those shares on the “ex-distribution” market on or prior to the time of the distribution, such shareholder will continue to be entitled to receive the shares of New BBX Capital’s Class A Common Stock which are distributed in the spin-off in respect of the shares of Parent’s Class A Common Stock being sold.

You are encouraged to consult with your broker or financial advisor regarding the specific implications of selling your shares of Parent’s

Class A Common Stock or Class B Common Stock prior to or on the distribution date.

Material U.S. Federal Income Tax Consequences

The spin-off will be a taxable transaction to Parent’s shareholders. For U.S. federal income tax purposes, the receipt of New BBX Capital’s Class A Common Stock or Class B Common Stock in the spin-off is expected to be treated as a distribution of property in an amount equal to the fair market value of the stock received. We believe that a reasonable approach to determine the fair market value of the shares of New BBX Capital’s Class A Common Stock or Class B Common Stock received would be to use the volume-weighted average price of New BBX Capital’s common stock on the first full trading day following the distribution. We believe this is a reasonable approach because the rights of New BBX Capital’s Class A Common Stock and Class B Common Stock (other than voting rights, as described above) are substantially the same and New BBX Capital’s Class B Common Stock will be convertible into shares of New BBX Capital’s Class A Common Stock on a share-for-share basis in the holder’s discretion; however, there is expected to be significantly less trading volume in the shares of New BBX Capital’s Class B Common Stock as compared to New BBX Capital’s Class A Common Stock.

The distribution of New BBX Capital’s Class A Common Stock or Class B Common Stock in the spin-off should be treated as ordinary dividend income to the extent considered paid out of Parent’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of Parent’s current year and accumulated earnings and profits will be treated as a non-taxable return of capital, which reduces basis, to the extent of the holder’s basis in its shares of Parent’s Class A Common Stock or Class B Common Stock, as applicable, and thereafter as capital gain. The amount of those earnings and profits is not determinable at this time because it will depend on Parent’s income for the entire tax year in which the distribution occurs. For a more detailed discussion of the federal income tax consequences of the spin-off, see “The Spin-Off—Material U.S. Federal Income Tax Consequences of the Spin-Off” and “Risk Factors—Risks Relating to the Spin-Off—The distribution of our common stock will not qualify for tax-free treatment.”

Separation and Distribution Agreement and other Spin-Off Documents

In connection with the spin-off, New BBX Capital and Parent will enter into a Separation and Distribution Agreement and certain other agreements, which will provide the terms and conditions of the separation of the businesses of Parent between Parent and New BBX Capital and will govern various ongoing arrangements between Parent and New BBX Capital upon completion of the spin-off, including a $75 million promissory note to be issued by Parent in favor of New BBX Capital. The Separation and Distribution

Agreement and other agreements between New BBX Capital and Parent in connection with the spin-off, including the promissory note, are described in further detail under “The Spin-Off—Relationship Between New BBX Capital and Parent.”

Dividend Policy

It is not anticipated that New BBX Capital will pay cash dividends on its common stock following the spin-off. New BBX Capital currently intends to retain any earnings for use in the operation of its business.

Distribution Agent

AST

Risk Factors

There are a number of risks and uncertainties related to the spin-off, New BBX Capital (including its business and investments and it being a separate, publicly-traded company following the spin-off) and ownership of New BBX Capital’s Class A Common Stock and Class B Common Stock. You should carefully read the factors set forth in the section of this information statement entitled “Risk Factors.”

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The following tables present the summary historical and pro forma financial data for New BBX Capital. New BBX Capital derived the statement of operations data for the years ended December 31, 2019, 2018 and 2017 and the balance sheet data as of December 31, 2019 and 2018 from its audited combined carve-out financial statements included elsewhere in this information statement. The statement of operations data for the six months ended June 30, 2020 and the balance sheet data as of June 30, 2020 are derived from New BBX Capital’s unaudited combined carve-out financial statements included elsewhere in this information statement and, in management’s opinion, have been prepared on the same basis as the audited carve-out combined financial statements and include all adjustments, consisting only of normal recurring adjustments and allocations, necessary for a fair presentation of the information for the periods presented.

The historical statements of operations reflect allocations of general corporate expenses from Parent, including, but not limited to, executive management, finance, legal, information technology, human resources, employee benefits administration, treasury, risk management and other shared services. These expenses have been allocated to New BBX Capital on the basis of direct usage when identifiable, while the remainder of the expenses, including costs related to executive compensation, were allocated primarily on a pro-rata basis of combined revenues and equity in earnings of unconsolidated joint ventures of Parent and its subsidiaries. Management considers these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, New BBX Capital. The allocations may not, however, reflect the expenses New BBX Capital would have incurred as a stand-alone public company for the periods presented. Actual costs that may have been incurred if New BBX Capital had been a stand-alone public company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. The financial statements included in this information statement may not necessarily reflect New BBX Capital’s financial position, results of operations and cash flows as if New BBX Capital had operated as a stand-alone public company during all periods presented. Accordingly, New BBX Capital’s historical results may not be a reliable indicator of its future performance or financial condition. In addition, the financial data as of and for the six months ended June 30, 2020 and 2019 are not necessarily indicative of the results that may be obtained for the full year or any other future period.

In presenting the financial data in conformity with accounting principles generally accepted in the United States (“GAAP”), New BBX Capital is required to make estimates and assumptions that affect the amounts reported. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” included elsewhere in this information statement for a detailed discussion of the accounting policies that management believes require subjective and complex judgments that could potentially affect reported results.

In addition, the summary pro forma financial information has been prepared to include accounting transaction adjustments, which are adjustments directly attributable to the spin-off or otherwise under the Separation and Distribution Agreement or other spin-off documents, and autonomous entity adjustments that reflect incremental expense or other changes necessary, if any, to reflect the financial condition and results of operations as if New BBX Capital was a separate stand-alone entity.

The pro forma statement of operations data for the six months ended June 30, 2020 and the year ended December 31, 2019 assumes that the spin-off occurred on January 1, 2019. The pro forma balance sheet data as of June 30, 2020 assumes that the spin-off occurred as of such date. The assumptions used in connection with the preparation of the pro forma financial information and the adjustments derived from such assumptions are based on currently available information, which management believes are reasonable under the circumstances. However, the pro forma financial information is not necessarily indicative of New BBX Capital’s results of

operations or financial condition had the spin-off occurred on the date assumed. Also, they may not reflect the results of operations or financial condition that would have resulted had New BBX Capital been operating as a stand-alone public company during such periods. In addition, they are not necessarily indicative of New BBX Capital’s future results of operations or financial condition.

You should read the following summary financial data in conjunction with New BBX Capital’s audited combined carve-out financial statements and unaudited combined carve-out financial statements included elsewhere in this information statement and the financial and other information contained in the sections of this information statement entitled “Unaudited Pro Forma Financial Statements,” “Capitalization” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Summary Historical Financial Data


	As of or For the Six Months Ended June 30, 2020			As of or For the Years Ended December 31,
	As of or For the Six Months Ended June 30, 2020			2019		2018			2017
	(in thousands)
Statements of Operations Data
Revenues	$	74,785			203,724		208,565			152,036
Net (loss) income from continuing operations	$	(34,818	)		20,651		(5,887	)		(14,770	)
Net (loss) income attributable to Parent	$	(30,580	)		13,737		(9,201	)		(16,089	)

Statements of Financial Condition Data
Total assets	$	416,797			361,507		309,952			315,170
Borrowings	$	41,614			42,736		37,496			43,920
Parent equity	$	242,932			179,681		235,415			237,259

Summary Pro Forma Financial Data


	Pro forma
	As of or For the Six Months Ended June 30, 2020			For the Year Ended December 31, 2019
	(in thousands)
Statements of Operations Data:
Total revenues	$	77,035			208,224
Net (loss) income from continuing operations	$	(33,039	)		24,047
Net (loss) income from continuing operations attributable to Parent/shareholders	$	(28,727	)		24,271

Statements of Financial Condition Data
Total assets	$	491,797
Borrowings	$	41,614
Parent equity	$	317,932

RISK FACTORS

You should carefully consider each of the following risks and uncertainties, which we believe are the principal risks that New BBX Capital faces and of which we are currently aware, and all of the other information in this information statement. Some of the risks and uncertainties described below relate to New BBX Capital’ business. Other risks relate principally to the spin-off, the securities markets and the ownership of New BBX Capital’ Class A Common Stock and Class B Common Stock. If any of the following events actually occur, New BBX Capital’ business, financial condition or results of operations, and the liquidity and trading price of New BBX Capital’ Class A Common Stock and/or Class B Common Stock, could be materially adversely affected. Additional risks and uncertainties that we do not presently know about or currently believe are not material may also adversely affect New BBX Capital’ business, financial condition and results of operations and, accordingly, New BBX Capital’ Class A Common Stock and/or Class B Common Stock. References in this section to “New BBX Capital” refers to New BBX Capital, at the parent company level, and references in this section to the “Company” refers to New BBX Capital, together with each of its subsidiaries.

Risks Relating to Our Business

The COVID-19 pandemic has had and the current and uncertain future outlook may continue to have a material adverse effect on our business financial condition, liquidity and results of operations.

The COVID-19 pandemic has been, and continues to be, an unprecedented disruption in the U.S. and global economies and its rapid spread, as well as the escalating measures governments, private organizations and individuals have implemented in order to stem the spread of this pandemic, have had, and are expected to continue to have, a material adverse impact on our business, operating results and financial condition, including due to government ordered travel restrictions, restrictions on business operations, stay at home orders and guidelines, a recessionary economic environment and reduced consumer demand for our products and services. The adverse impact of the pandemic across the Company’s investments and on the Company’s consolidated results of operations, cash flows and financial condition in 2020 has been, and is expected to continue to be, material. Furthermore, while it is not currently possible to accurately assess the expected duration and severity of the pandemic on the Company’s operations, and additional restrictions or other events stemming from the pandemic, including a further resurgence of COVID-19 infections globally, nationally, or in regions where the Company has significant operations, could further lengthen or exacerbate these adverse effects, the Company expects that demand for many of the Company’s products and services may remain weak for a significant length of time, and the Company cannot predict if and when the industries in which the Company operates will return to pre-pandemic levels.

Steps we have implemented in an attempt to mitigate the effects of the pandemic on our business and to preserve liquidity may themselves have negative consequences with respect to our business and operations, including by reducing sales. In addition, the cost savings we are seeking to achieve from these measures will not be recognized immediately and will not completely offset the decrease in revenues and other adverse impacts of the pandemic.

Our operations could also be negatively affected further if our employees are quarantined or sickened as a result of exposure to COVID-19, or if they are subject to governmental COVID-19 curfews or “shelter in place” health orders. Measures restricting the ability of employees to come to work may cause a further deterioration in our service or operations, all of which could negatively affect our business.

We are unable to predict how long these conditions will persist, what additional measures may be introduced by governments or private parties or what effect any such additional measures may have on our business. Furthermore, not only is the duration of the pandemic and combative measures unknown, the overall situation is extremely fluid, and it is impossible to predict the timing of future changes in the situation and what their impact may be on our business. At this time we are also not able to predict whether the COVID-19

pandemic will result in permanent changes in our customers’ behavior, which may include continued or permanent decreases in discretionary spending and reductions in demand for retail store and confectionery products, home improvement products or real estate, each of which would have a material adverse impact on our business, operating results and financial condition. As detailed throughout this Information Statement, the demand for the Company’s products and services has been adversely impacted by the COVID-19 pandemic and there is no assurance that sales volumes and revenues will improve, will not further decline, or will return to pre-pandemic levels in the foreseeable future, if ever, and this and other factors may result in the recognition of additional impairment losses in future periods. BBX Capital’s management is evaluating the potential operating deficits and liquidity requirements of its subsidiaries as a result of the impact of the pandemic and may determine not to provide additional funding or capital to subsidiaries whose operations they believe may not be sustainable.

New BBX Capital will rely on cash on hand and dividends from its subsidiaries.

New BBX Capital will rely on its cash and cash equivalents, payments received by it pursuant to the terms of the $75 million note issued to it by Parent and on dividends from its subsidiaries in order to fund its operations and investments. During the year ended December 31, 2019, cash generated from operations was $22.7 million and for the six months ended June 30, 2020 cash used in operations was $8.9 million.

Accordingly, if cash flow is not sufficient to fund New BBX Capital’s liquidity needs or New BBX Capital otherwise determines it is advisable to do so, BBX Capital might seek to liquidate some of its investments or seek to fund its operations with the proceeds of additional equity or debt financing. Such financing may not be available on commercially reasonable terms, if at all, and if New BBX Capital chooses to liquidate its investments, it may be forced to do so at depressed prices. Further, Parent may elect to defer interest payments due under the note. See the risk factor below entitled “Parent may incur additional indebtedness and may defer interest payments under its $75 million promissory note to New BBX Capital.”

New BBX Capital’s acquisitions and investments may generate losses, require it to obtain additional financing and expose it to additional risks.

New BBX Capital has made investments in and acquisitions of operating companies, such as its 50% equity interest investment in The Altman Companies and its acquisitions of Renin, IT’SUGAR, and other businesses in the confectionery industry. New BBX Capital may also seek to make opportunistic investments outside of its existing portfolio. Some of these investments and acquisitions may be material. While New BBX Capital seeks to make investments and acquisitions in companies that provide opportunities for growth, its investments or acquisitions may not prove to be successful or, even if successful, may not initially generate income, or may generate income on an irregular basis or over a long time period. Accordingly, our results of operations may vary significantly on a quarterly basis and from year to year as a result of acquisitions and investments. Acquisitions or investments expose New BBX Capital to the risks of the businesses acquired or invested in. Acquisitions and investments entail numerous risks, including:

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Risks associated with achieving profitability;

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Difficulties in integrating and assimilating acquired management, acquired company founders, and operations;

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Losses and unforeseen expenses or liabilities;

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Risks associated with entering new markets in which we have no or limited prior experience;

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The potential loss of key employees or founders of acquired organizations;

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Risks associated with transferred assets and liabilities; and

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The incurrence of significant due diligence expenses relating to acquisitions, including with respect to those that are not completed.

New BBX Capital may not be able to integrate or profitably manage acquired businesses, including Renin, IT’SUGAR, and its other operating businesses or its investment in The Altman Companies, without substantial costs, delays, or other operational or financial difficulties, including difficulties in integrating information systems and personnel and establishing control environment processes across acquired businesses. Further, New BBX Capital may not be able to monitor the day to day activities of its investments in joint ventures, and failure to do so could have a material adverse effect on its business, financial condition and results of operations. In addition, to the extent that operating businesses are acquired outside the United States or the State of Florida, there will be additional risks related to compliance with foreign regulations and laws including tax laws, labor laws, currency fluctuations and geographic economic conditions.

Parent may incur additional indebtedness and may defer interest payments under its $75 million promissory note to New BBX Capital.

In connection with the spin-off, Parent will execute a $75 million promissory note in favor of New BBX Capital. Amounts outstanding under the note will accrue interest at a rate of 6% per annum. The note will require payments of interest only on a quarterly basis; provided however that interest payments may be deferred at the option of Parent, with interest on the entire outstanding balance thereafter to accrue at a cumulative, compounded rate of 8% per annum until such time as Parent is current on all accrued payments under the note, including deferred interest. All outstanding amounts under the note will become due and payable in five years or upon certain events. Parent’s principal sources of liquidity have historically been its available cash and short term investments, distributions from real estate joint ventures and sales of real estate assets held by BBX Capital Real Estate, and dividends from Bluegreen Vacations. Following the spin-off, Parent will be a Bluegreen Vacations holding company with limited operations. It is currently expected that Parent will incur approximately $700,000 in annual executive compensation expenses, approximately $1.5 - $2.0 million annually in other general and administrative expenses, including costs associated with being a public company, and annual interest expense of approximately $7.3 million associated with Woodbridge’s junior subordinated debentures and the promissory note to New BBX Capital. While Parent believes that its cash and cash equivalents will be sufficient to fund its operations and satisfy its obligations for two years following the spin-off, Parent will rely primarily on dividends from Bluegreen Vacations to fund its operations and satisfy its debt service requirements and other liabilities, including its promissory note to New BBX Capital. The COVID-19 pandemic has resulted in uncertainty regarding Bluegreen Vacations’ operations and cash flow, and Bluegreen Vacations announced during April 2020 that it has suspended its regular quarterly dividend. While Bluegreen Vacations declared a special cash dividend on its common stock of $1.19 per share during July 2020 which is payable on August 21, 2020, there is no assurance that Bluegreen Vacations will resume the payment of regular dividends consistent with prior periods, in the time frames or amounts previously paid, or at all, or pay any other special cash dividends in the future. Parent has agreed to utilize its proceeds from the special cash dividend declared by Bluegreen Vacations to repay Parent’s $80.0 million note to Bluegreen Vacations. If Parent does not receive sufficient dividends from Bluegreen Vacations, Parent may be unable to satisfy its debt service obligations, including payments under the promissory note to New BBX Capital. In addition, Parent may in the future pursue a transaction to increase its ownership in Bluegreen Vacations, including a transaction or transactions which would result in Bluegreen Vacations once again becoming an indirect wholly-owned subsidiary of Parent. In connection with any such transaction or otherwise, Parent may in the future seek additional funds from third party sources, which may include the incurrence of additional indebtedness. Any such additional indebtedness would increase Parent’s debt service requirements and may impair Parent’s ability to satisfy its payment obligations under its promissory note to New BBX Capital. Parent’s promissory note to New BBX Capital is unsecured.

New BBX Capital may issue additional securities at New BBX Capital or its subsidiaries and New BBX Capital and its subsidiaries can incur additional indebtedness.

New BBX Capital from time to time may pursue transactions involving the sale of its subsidiaries or investments or other transactions which would result in a decrease in New BBX Capital’s ownership interest in its subsidiaries. There is no assurance that any such transactions, if pursued and consummated, will generate a profit or otherwise be advantageous to New BBX Capital.

New BBX Capital may in the future also seek to raise funds through the issuance of debt or equity securities. There is generally no restriction on New BBX Capital’s ability to issue debt or equity securities which are pari passu or have a preference over its Class A Common Stock and Class B Common Stock. Authorized but unissued shares of New BBX Capital’s capital stock are available for issuance from time to time at the discretion of New BBX Capital’s board of directors, and any such issuance may be dilutive to New BBX Capital’s shareholders.

New BBX Capital and its subsidiaries have in the past and may in the future incur significant amounts of debt. Further, additional indebtedness could have important effects on New BBX Capital, including that debt service requirements will reduce cash available for operations, future investment and acquisition opportunities and payments of dividends, if any, and that increased leverage could impact New BBX Capital’s liquidity and increase its vulnerability to adverse economic or market conditions. Additionally, agreements relating to additional indebtedness could contain financial covenants and other restrictions limiting New BBX Capital’s operations and its ability to pay dividends, if any, borrow additional funds or acquire or dispose of assets, and expose New BBX Capital to the risks of being in default of such covenants.

Substantial sales of New BBX Capital’s Class A Common Stock or Class B Common Stock could adversely affect the market prices of such securities.

Substantial sales of New BBX Capital’s Class A Common Stock or Class B Common Stock, including sales of shares by controlling shareholders and management, could adversely affect the market prices of such securities. Management has in the past and may in the future enter into Rule 10b5-1 plans pursuant to which a significant number of shares are sold into the open market.

BBX Capital Real Estate

BBX Capital Real Estate’s business and results of operations have been and may continue to be impacted by the COVID-19 pandemic.

The effects of the pandemic have impacted BBXRE’s operations and are expected to adversely impact its operating results and financial position for the year ended December 31, 2020, and the effects of the pandemic, including increased unemployment and economic uncertainty, as well as recent increases in the number of COVID-19 cases in Florida and throughout the United States, have and may continue to impact rental activities at BBX Capital Real Estate’s multifamily apartment developments. In addition, the effects of the pandemic, including the impact on general economic conditions and real estate and credit markets, have increased uncertainty relating to the expected timing and pricing of future sales of multifamily apartment developments, single-family homes, and developed lots at BBX Capital Real Estate’s Beacon Lake Community, as well as the timing and financing of new multifamily apartment developments.

Further, as a result of the effects of the pandemic, the Altman Companies has experienced a decline in tenant demand and in the volume of new leases at certain of its communities, which has resulted in an increase in concessions offered to prospective and renewing tenants in an effort to maintain occupancy at its stabilized communities or increase occupancy at its communities under development. Further, some jurisdictions have imposed moratoriums on evictions. The effects of the pandemic, including a prolonged economic downturn, high unemployment, the expiration of or a decrease in government benefits to individuals, and government-mandated moratoriums on tenant evictions, could ultimately have a longer term and more significant impact on rental rates, occupancy levels, and rent collections, including an increase in tenant delinquencies and/or requests for rent abatements. These effects would impact the amount of rental revenues generated from the multifamily apartment communities in which BBX Capital Real Estate invests, including those sponsored and managed by the Altman Companies, the extent of management fees earned by the Altman Companies, and the ability of the related joint ventures to stabilize and successfully sell such communities. Furthermore, a decline in rental revenues at developments sponsored by the Altman Companies could require it, as the sponsor and managing member, to fund certain operating shortfalls in certain circumstances.

If there is a significant adverse impact on real estate values as a result of lower rental revenues, higher capitalization rates, or otherwise, the joint ventures sponsored by the Altman Companies may be unable to sell their respective multifamily apartment developments within the time frames previously anticipated and/or for the previously forecasted sales prices, if at all, which may impact the profits expected to be earned by BBX Capital Real Estate from its investment in the managing member of the Altman Company projects and could result in the recognition of impairment losses related to BBX Capital Real Estate’s investment in such projects. Furthermore, the Altman Companies may be unable to close on the equity and/or debt financing necessary to commence the construction of new projects, which could result in increased operating losses at the Altman Companies and the recognition of impairment losses by BBX Capital Real Estate related to BBX Capital Real Estate’s overall investment in the Altman Companies.

There is no assurance that the real estate market will not be materially adversely impacted by the pandemic or otherwise, that the sales prices of single-family homes will not materially decline, that rents will be paid when due or at all, that market rents will not materially decline or additional concessions will not be necessary to maintain rentals. While government efforts to delay or forestall evictions and the availability of judicial remedies have not to date materially impacted BBX Capital Real Estate’s operations, they may in the future have an adverse impact on both market values and BBX Capital Real Estate’s operating results. Further, the effects of the pandemic may impact the costs of operating BBX Capital Real Estate’s real estate assets, including, but not limited to, an increase in property insurance costs indicated by recent quotes of insurance costs that are higher than pre-pandemic levels, which could also have an adverse impact on market values and BBX Capital Real Estate’s operating results.

Some of BBX Capital Real Estate’s operations are through unconsolidated joint ventures with others, and we may be adversely impacted by a joint venture partner’s failure to fulfill its obligations.

From time to time BBX Capital Real Estate has entered into joint ventures which reduces the amount BBX Capital Real Estate is required to invest in the development of the real estate properties. However, joint venture partners may become financially unable or unwilling to fulfill their obligations under the joint venture agreements. Most joint ventures borrow money to help finance their activities, and although recourse on the loans is generally limited to the managing members, joint ventures and their properties, BBX Capital Real Estate has in some cases and may in the future provide ongoing financial support or guarantees. If joint venture partners do not meet their obligations to the joint venture, BBX Capital Real Estate may be required to make significant expenditures, which may have an adverse effect on our operating results or financial condition. BBX Capital Real Estate has in the past and may in the future hold investments in a number of different joint ventures with the same or related developers, which could increase the adverse effects of any failures by such developer to fulfil its obligations. BBX Capital Real Estate has a substantial investment in The Altman Companies and related investments in Altis multifamily apartment joint ventures developed and managed by The Altman Companies and Joel Altman (“JA”). Further, BBX Capital is obligated to increase its ownership in the Altman Companies in 2022 regardless of the performance of the Altman Companies at that time. There is no assurance that the value of the interest that it is required to buy will be equal to or greater than the purchase price. Additionally, BBX Capital Real Estate has contributed $3.8 million to a newly formed joint venture with JA that guarantees the indebtedness and construction cost overruns of new real estate joint ventures established by The Altman Companies, which increases BBX Capital Real Estate’s risk of loss in connection with its real estate joint venture investments managed by JA and The Altman Companies.

Investments by BBX Capital Real Estate in real estate developments directly or through joint ventures expose it to market and economic risks inherent in the real estate construction and development industry.

The real estate construction and development industry is highly competitive and subject to numerous risks which in many cases are beyond management’s control. The success of BBX Capital Real Estate’s investments in real estate developments is dependent on many factors, including:

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Demand for or oversupply of new homes, finished lots, rental apartments and commercial real estate;

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Demand for commercial real estate tenants;

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Real estate market values;

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Changes in capitalization rates impacting real estate values;

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Availability and reasonable pricing of skilled labor;

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Availability and reasonable pricing of construction materials, such as lumber, framing, concrete and other building materials, including increases associated with tariffs;

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Changes in laws and regulations for new construction and land entitlements, including environmental and zoning laws and regulations;

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Natural disasters and severe weather conditions increasing costs, delaying construction, causing uninsured losses or reducing demand for new homes;

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Availability and cost of mortgage financing for potential purchasers;

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Inventory of foreclosed homes negatively impacting selling prices;

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Mortgage loan interest rates;

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Availability of land in desirable locations at prices that result in an economically viable project;

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Availability, delays and costs associated with obtaining permits, approvals or licenses necessary to develop property;

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Construction defects and product liability claims;

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Risk of losses resulting from cost overrun guarantees in The Altman Companies’ sponsored projects that require unique high-density apartment developments in certain markets; and

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General economic conditions.

Any of these factors could give rise to delays in the start or completion of a project, increase the cost of developing a project, or result in reduced prices and values for New BBX Capital’s developments, including developments underlying its joint venture investments. These factors could also result in New BBX Capital being unable to identify real estate inventory opportunities which meet its investment criteria. In addition, New BBX Capital’s efforts to identify additional investment opportunities, including the development of multifamily apartment communities that will be owned over a long-term hold period, the acquisition of existing multifamily apartment communities which can be renovated and re-leased pursuant to a “value add” strategy, and the pursuit of investment opportunities in additional geographic locations may not prove to be successful.

A significant portion of BBX Capital Real Estate’s loans and real estate assets are located in Florida, and conditions in the Florida real estate market could adversely affect our earnings and financial condition.

The legacy assets retained by us in Parent’s sale of BankAtlantic in 2012, the real estate developments owned or managed by BBX Capital Real Estate, and the real estate being developed by BBX Capital Real Estate or joint ventures in which BBX Capital Real Estate has invested are primarily concentrated in Florida, and adverse changes to the Florida economy or the real estate market may negatively impact our earnings and financial condition. As a result, BBX Capital Real Estate is exposed to geographic risks of high unemployment rates, declines in the housing industry and declines in the real estate market in Florida. Adverse changes in laws and regulations in Florida, including moratoriums on evictions would have a negative impact on our revenues, financial condition and business. Declines in the Florida housing markets may negatively impact the credit performance of BBX Capital Real Estate’s loans and result in asset impairments. Further, in addition to impact of the risks and uncertainties of the pandemic, the State of Florida is subject to the risks of natural disasters, such as tropical storms and hurricanes, which may disrupt operations, adversely impact the ability of borrowers to timely repay their loans, adversely impact the value of any collateral securing loans and BBX Capital Real Estate’s portfolio of real estate, or otherwise have an adverse effect on our results of operations. The severity and impact of tropical storms, hurricanes and other weather related events are unpredictable.

BBX Capital Real Estate’s inability to finance its real estate developments through Community Development District Bonds or obtain performance bonds or letters of credit could adversely affect our results of operations and liquidity.

BBX Capital Real Estate is often required to provide performance bonds and letters of credit under construction contracts or development agreements. BBX Capital Real Estate also obtained financing for the construction of infrastructure improvements for the first two phases of its Beacon Lake development in St. Johns County, Florida from the issuance of Community Development Bonds. BBX Capital Real Estate’s ability to obtain performance bonds, letters of credit, or additional issuances of Community Development Bonds is dependent on BBX Capital Real Estate’s credit rating, financial condition, and historical performance. If BBX Capital Real Estate is unable to obtain these bonds or letters of credit or cause the issuance of Community Development Bonds when required or desirable, our results of operations and liquidity could be adversely affected.

In connection with the sale of BankAtlantic to BB&T during July 2012, we acquired nonperforming loans and foreclosed real estate, and our results of operations and financial condition may be adversely affected if these assets are monetized below their current book values.

As a result of Parent’s sale of BankAtlantic in 2012, we maintain and manage a portfolio of foreclosed real estate and non-performing loans managed by BBX Capital Real Estate. As a consequence, our financial condition and results of operations will be dependent on BBX Capital Real Estate’s ability to successfully manage and monetize these legacy assets. Further, the loan portfolio and real estate may not be easily salable in the event BBX Capital Real Estate decides to liquidate an asset through a sale transaction. If the legacy assets are not monetized at or near the current book values ascribed to them, or if these assets are liquidated for amounts less than book value, our financial condition and results of operations would be adversely affected. Because a majority of these legacy assets do not generate income on a regular basis, we do not expect to generate significant revenue or income with respect to these assets until such time as an asset is monetized through repayments or BBX Capital Real Estate consummates transactions involving the sale, joint venture or development of the underlying real estate or investments.

BBX Sweet Holdings

The COVID-19 pandemic has had and the current and uncertain future outlook may continue to have a material adverse effect on BBX Sweet Holdings’ business, financial condition, liquidity and results of operations.

In March 2020, as a result of various factors, including government-mandated closures and CDC and WHO advisories in connection with the COVID-19 pandemic, IT’SUGAR closed all of its retail locations and furloughed all store employees and the majority of its corporate employees. While IT’SUGAR has since reopened many of its retail locations, it was required to close four previously reopened retail locations as a result of governments reinstating mandated closures and has also been required to temporarily close four to six locations on a daily basis due to staffing shortages. IT’SUGAR’s reopened retail locations have achieved sales volumes at approximately 45-55% of pre-pandemic levels (as compared to the comparable period in 2019), and there is no assurance that sales volumes will improve or will not further decline. Further, there is uncertainty as to when IT’SUGAR will be able to reopen locations that have remained closed since March 2020 or that were subsequently closed following their initial reopening. IT’SUGAR ceased paying rent to the landlords of its closed locations in April 2020 and has been engaged in negotiations with its landlords for rent abatements, deferrals, and other modifications for the period of time that the locations were or have been closed and the period of time that the locations are opened and operating under conditions which are affected by the pandemic. As of June 30, 2020, IT’SUGAR had accrued and unpaid current rental obligations of $4.5 million, and had received default notices from landlords in relation to 28 of its locations. While IT’SUGAR has executed lease amendments in relation to some of its retail locations and it remains involved in ongoing and active negotiations with most of its remaining landlords, it has only paid a portion of July 2020 rent for most of its locations (including many locations for which IT’SUGAR had previously executed lease amendments related to rent concessions for April

through June 2020). Due to the uncertainty related to IT’SUGAR’s business as a result of the pandemic, including the potential impact on sales volumes and the possibility of additional closures of its retail locations, there is no assurance that it will be in a position to meet its obligations under the terms of its existing leases or its amended or modified leases. If IT’SUGAR’s negotiations with its landlords are not successful and its failure to pay rent constitutes an event of default under the applicable lease agreements, IT’SUGAR’s landlords may also pursue remedies available to them pursuant to such agreements, which may include the acceleration of liabilities under the lease agreements and the initiation of eviction proceedings.

The effects of the COVID-19 pandemic on demand, sales levels, and consumer behavior, as well as the current recessionary economic environment, have had and could continue to have a material adverse effect on IT’SUGAR’s business, results of operations, and financial condition. IT’SUGAR expects that it will require additional funding or capital in 2020 in order to maintain its operations and is engaged in efforts to obtain additional funding from BBX Capital or other outside investors. There is no assurance that IT’SUGAR will be successful in obtaining additional funding on acceptable terms or at all. If IT’SUGAR is unable to successfully negotiate with its landlords and vendors, its sales volumes do not recover, and it is unable to obtain additional funding or capital, IT’SUGAR would need to consider pursuing a formal or informal restructuring.

Market demand for candy products could decline.

BBX Sweet Holdings confectionery businesses operate in highly competitive markets and compete with larger companies that have greater resources. BBX Sweet Holdings success is impacted by many factors, including the following:

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Effective retail execution;

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Effective and cost-efficient advertising campaigns and marketing programs;

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Adequate supply of commodities at a reasonable cost;

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Oversight of product safety;

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Ability to sell products at competitive prices;

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Response to changes in consumer preferences and tastes;

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Changes in consumer health concerns, including obesity and the consumption of certain ingredients; and

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Concerns related to effects of sugar or other ingredients which may be used to make its products.

A decline in market demand for candy products could negatively affect operating results.

IT’SUGAR’s is dependent on its ability to differentiate itself from other retailers in the confectionery industry.

IT’SUGAR in the past has differentiated itself from other retailers through merchandise packaging, licenses, store environment, and celebrity endorsements. IT’SUGAR’s results of operations and financial condition would be adversely affected if it is unable to obtain celebrity endorsements or licenses at a reasonable cost or to maintain its distinct appeal or if actions by its competitors reduce the effectiveness of its business model.

BBX Sweet Holdings may experience product recalls or product liability claims associated with businesses in the confectionery industry.

Selling products for human consumption involves inherent legal and other risks, including product contamination, spoilage, product tampering, allergens, or other adulteration. BBX Sweet Holdings could decide or be required to destroy inventory, recall products or lose sales in connection with contamination, tampering, adulteration or other deficiencies. These events could result in significant losses and may damage the reputation

of our confectionery businesses, and discourage consumers from buying products, or cause production and delivery disruptions which would adversely affect our financial condition and results of operations. BBX Sweet Holdings may also incur losses if products cause injury, illness or death. A significant product liability claim may adversely affect both reputation and profitability, even if the claim is unsuccessful.

New BBX Capital’s investment in companies in the confectionery industry may result in additional losses and impairments.

During 2019, 2018 and 2017, BBX Sweet Holdings exited its candy manufacturing facilities in Utah and South Florida, consolidated its wholesale manufacturing operations in Orlando and centralized the executive management and back office activities in order to improve operating efficiencies and generate cost savings. These strategic initiatives may not be successful, and BBX Sweet Holdings may decide to exit the remaining manufacturing operations. Further New BBX Capital recognized an impairment loss of approximately $22.4 million related to goodwill associated with IT’SUGAR and certain of its reporting units and currently carries $14.9 million of goodwill on its balance sheet. In the event that BBX Sweet Holdings continues to generate losses or exits any of its businesses, this would result in additional losses or impairment of goodwill and adversely affect BBX Sweet Holdings’ results of operations.

Renin

Renin’s retail sales are concentrated with big-box home center customers, and there is significant competition in the industry.

A significant amount of Renin’s sales are to big-box home centers. These home centers in many instances have significant negotiating leverage with their vendors, including Renin, and are able to affect the prices of the products sold and the terms and conditions of conducting business with them. These home centers may also reduce the number of vendors they purchase from or make significant changes in their volume of purchases. Although homebuilders, dealers and other retailers represent other channels of distribution for Renin’s products, the loss of a home center customer or reduced sales volume at any of these home centers would have a material adverse effect on Renin’s business. Further, Renin has substantial competition from overseas manufacturers of products similar to those sold by Renin. Revenues from one customer of Renin represented $20.2 million, $20.7 million, and $20.9 million of the New BBX Capital’s total revenues for the years ended December 31, 2019, 2018 and 2017, respectively, which represented nearly 10% of the Company’s total revenues for the years ended December 31, 2019 and 2018 and over 10% of the Company’s total revenues for the year ended December 31, 2017.

A significant portion of Renin’s business relies on home improvement and new home construction activity, both of which are cyclical and outside of management’s control.

A significant portion of Renin’s business is dependent on the levels of home improvement activity, including spending on repair and remodeling projects, and new home construction activity. Macroeconomic conditions, including consumer confidence levels, fluctuations in home prices, unemployment and underemployment levels, interest rates, regulatory initiatives, and the availability of home equity loans and mortgage financing affect both discretionary spending on home improvement projects as well as new home construction activity. Adverse changes in these factors or uncertainty regarding these macroeconomic conditions could result in a decline in spending on home improvement projects and a decline in demand for new home construction, both of which could adversely affect Renin’s results of operations.

Renin’s operating results would be negatively impacted if it experiences increased commodity costs or a limited availability of commodities.

Renin purchases various commodities to manufacture products, including steel, aluminum, glass and mirrors. Fluctuations in the availability and prices of these commodities could increase the cost to manufacture

products. Further, increases in energy costs could increase production and transportation costs, each of which could negatively affect its operating results. Renin’s existing arrangements with customers, competitive considerations and the relative negotiating power and resistance of home center customers and big-box retailers to price increases make it difficult to increase selling prices to absorb increased production costs. If Renin is not able to increase the prices of its products or achieve other cost savings or productivity improvements to offset any increased commodity and production costs, our operating results could be negatively impacted. Many of the raw materials purchased by Renin are sourced from China, Mexico, and other countries. Changes in United States trade practices, or tariffs levied on these imports, could significantly impact Renin’s results of operations and financial condition.

Other Risk Factors

New BBX Capital or its subsidiaries may incur additional indebtedness.

The Company’s technology requires updating, the cost involved in updating the technology may be significant, and the failure to keep pace with developments in technology could impair the Company’s operations or competitive position.

The industries in which the Company does business require the utilization of technology and systems, including technology utilized for sales and marketing, mortgage servicing, property management, brand assurance and compliance. This technology requires continuous updating and refinements, including technology required to remain competitive and to comply with the legal requirements such as privacy regulations and requirements established by third parties. The Company is taking steps to update its information technology platform, which has required, and is likely to continue to require, significant capital expenditures. Older systems which have not yet been updated may increase the risk of operational inefficiencies, financial loss and non-compliance with applicable legal and regulatory requirements, and the Company may not be successful in updating such systems in the time frame or at the cost anticipated. Further, as a result of the rapidly changing technological environment, systems which the Company has put in place or expects to put in place in the near term may become outdated, requiring new technology, and the Company may not be able to replace those systems as quickly as its competition or within budgeted costs and time frames. Further, the Company may not achieve the benefits that may have been anticipated from any new technology or system.

In addition, conversions to new information technology systems require effective change management processes and may result in cost overruns, delays or business interruptions. If the Company’s information technology systems are disrupted, become obsolete, or do not adequately support our strategic, operational, or compliance needs, the Company’s business, financial position, results of operations, or cash flows may be adversely affected.

Information technology failures and failure to maintain the integrity of the Company’s internal or customer data could result in faulty business decisions or operational inefficiencies, damage the Company’s reputation and/or subject the Company to costs, fines, or lawsuits.

The Company relies on information technology (IT) systems, including Internet sites, data hosting facilities and other hardware and platforms, some of which are hosted by third parties. These IT systems, like those of

most companies, may be vulnerable to a variety of interruptions and risks, including, but not limited to, natural disasters, telecommunications failures, hackers, and other security issues. Moreover, the Company’s computer systems, like those of most companies, may become subject to computer viruses or other malicious codes, and to cyber or phishing-attacks. Although administrative and technical controls have been implemented which attempt to minimize the risk of cyber incidents, computer intrusion efforts are becoming increasingly sophisticated, and any enhanced controls installed might be breached. If the IT systems cease to function properly, the Company could suffer interruptions in its operations. The Company collects and retains large volumes of internal and customer data, including social security numbers, credit card numbers and other personally identifiable information of its customers in various internal information systems and information systems of its service providers. The Company also maintains personally identifiable information about its employees. The integrity and protection of that customer, employee and company data is critical to the Company and faulty decisions could be made if that data is inaccurate or incomplete. The regulatory environment as well as the requirements imposed on the Company by the payment card industry surrounding information, security and privacy is also increasingly demanding, in both the United States and other jurisdictions in which the Company operates. The Company’s systems may be unable to satisfy changing regulatory and payment card industry requirements and employee and customer expectations, or may require significant additional investments or time in order to do so.

The Company’s information systems and records, including those it maintains with its service providers, may be subject to security breaches, cyberattacks, system failures, viruses, operator error or inadvertent releases of data. A significant theft, loss, or fraudulent use of customer, employee or company data maintained by the Company or by a service provider could adversely impact the Company’s reputation and could result in remedial and other expenses, fines or litigation. A breach in the security of the Company’s information systems or those of its service providers could lead to an interruption in the operation of the Company’s systems, resulting in operational inefficiencies and a loss of profits. This could require the Company to incur significant costs to comply with legally required protocols and to repair or restore the security of its systems.

The tax impact resulting from the Tax Cuts and Jobs Act are based on interpretations and assumptions the Company has made. Any changes in interpretations and assumptions or the issuance of additional regulatory guidance may have a material adverse impact on our tax rate in fiscal years 2019 and beyond.

On December 22, 2017, U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Act”), was signed into law, significantly changing the U.S. Internal Revenue Code. The Tax Reform Act is complex, and the Company has made judgments and interpretations about the application of these changes in the tax laws. The interpretation and finalization of recently proposed regulations and other interpretive guidance that may be issued by the Internal Revenue Service could differ from our interpretations of the Tax Reform Act which could result in the potential for the payment of additional taxes, penalties or interest that may adversely affect our results of operations for the fiscal years 2020 and beyond.

The Company’s insurance policies may not cover all potential losses and the cost of insurance may increase.

The Company maintains insurance coverage for liability, property and other risks with respect to its operations and activities. While the Company currently has comprehensive property and liability insurance policies with coverage features and insured limits that it believes are customary, market forces beyond the Company’s control may limit the scope of the insurance coverage it can obtain or ability to obtain coverage at reasonable rates. The cost of insurance may increase and coverage levels may decrease, which may affect the Company’s ability to maintain insurance coverage and deductibles at acceptable costs. There is a limit as well as various sub-limits on the amount of insurance proceeds the Company will receive in excess of applicable deductibles. Further, certain types of losses, such as earthquakes, hurricanes and floods, terrorist acts, and certain environmental matters and business interruptions, may be outside the general coverage limits of the Company’s policies, subject to large deductibles, deemed uninsurable or too cost-prohibitive to insure against. In addition, in the event of a substantial loss, the insurance coverage the Company carries may not be sufficient to pay the full market value or replacement cost of the affected property or in some cases may not provide a recovery for any part of a loss.

If an insurable event occurs that affects more than one of the Company’s assets or properties, the claims from each affected property may in some cases may be considered together and may not in other cases be considered together to determine whether the individual occurrence limit, annual aggregate limit or sub-limits, depending on the type of claim, have been reached. As a result, the Company could lose some or all of the capital it has invested, as well as the anticipated future revenue opportunities.

Adverse outcomes in legal or other regulatory proceedings, including claims of non-compliance with applicable regulations or development-related defects could adversely affect the Company’s financial condition and operating results.

In the ordinary course of business, the Company is subject to litigation and other legal and regulatory proceedings, which result in significant expenses and devotion of time and the Company may agree to indemnify third parties or its strategic partners from damages or losses associated with such risks. In addition, litigation is inherently uncertain, and adverse outcomes in the litigation and other proceedings to which the Company is or may be subject could adversely affect its financial condition and operating results.

BBX Capital Real Estate engages third-party contractors in its developments. However, BBX Capital Real Estate’s customers may assert claims against BBX Capital Real Estate for construction defects or other perceived development defects, including, without limitation, structural integrity, the presence of mold as a result of leaks or other defects, water intrusion, asbestos, electrical issues, plumbing issues, road construction, water and sewer defects and defects in the engineering of amenities. In addition, certain state and local laws may impose liability on property developers with respect to development defects discovered in the future. BBX Capital Real Estate could have to accrue a significant portion of the cost to repair such defects in the quarter when such defects arise or when the repair costs are reasonably estimable.

Costs associated with litigation, and the outcomes thereof, which in most instances are very difficult to predict, could adversely affect the Company’s liquidity, financial condition and operating results.

The Company is subject to environmental laws related to its real estate activities including claims with respect to mold or hazardous or toxic substances, which could have a material adverse impact on our financial condition and operating results.

As current or previous owners or operators of real property, the Company may be liable under federal, state and local environmental laws, ordinances and regulations for the costs of removal or remediation of hazardous or toxic substances on, under or in the property. These laws often impose liability whether or not we knew of, or were responsible for, the presence of such hazardous or toxic substances. The presence of such substances, or the failure to properly remediate such substances, may adversely affect our ability to sell or lease real estate or to borrow money using such real estate or receivables generated from the sale of such property as collateral. Noncompliance with environmental, health or safety requirements may require us to cease or alter operations at one or more of our properties. Further, we may be subject to common law claims by third parties based on damages and costs resulting from violations of environmental regulations or from contamination associated with one or more of our properties. The cost of investigating, remediating or removing such hazardous or toxic substances may be substantial.

The Company’s business may be adversely impacted by negative publicity, including information spread through social media.

The proliferation and global reach of social media continues to expand rapidly and could cause the Company to suffer reputational harm. The continuing evolution of social media presents new challenges. Negative posts or comments about the Company, the properties it manages or its brands on any social networking or user-generated review website, could affect consumer opinions of the Company and its products, and the Company cannot guarantee that it will timely or adequately redress such instances.

The loss of the services of key management and personnel could adversely affect the Company’s business.

The Company’s ability to successfully implement its business strategy will depend on the ability to attract and retain experienced and knowledgeable management and other professional staff. If the Company is unable to retain and motivate its existing employees and efforts to retain and attract key management and other personnel are unsuccessful, the Company’s results of operations and financial condition may be materially and adversely impacted.

Changes to and replacement of the LIBOR benchmark interest rate could adversely affect our results of operations and liquidity.

In July 2017, the Financial Conduct Authority (the regulatory authority over LIBOR) stated they will plan for a phase out of regulatory oversight of LIBOR interest rate indices after 2021 to allow for an orderly transition to an alternate reference rate. The Alternative Reference Rates Committee (ARRC) has proposed that the Secured Overnight Financing Rate (SOFR) is the rate that represents best practice as the alternative to LIBOR for promissory notes or other contracts that are currently indexed to LIBOR. The ARRC has proposed a market transition plan to SOFR from LIBOR and organizations are currently working on transition plans as it relates to derivatives and cash markets exposed to LIBOR. The Company currently has $8.0 million of LIBOR indexed notes payable and lines of credit that mature after 2021. Changes in the method of calculating LIBOR, or the replacement of LIBOR with SOFR or another alternative rate or benchmark, may adversely affect interest rates and result in high borrowing costs, which could adversely affect New BBX Capital’s results of operations and liquidity. We cannot predict the effect of the potential changes to LIBOR or the establishment and use of alternative rates or benchmarks.

There are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with GAAP. Any changes in estimates, judgments and assumptions used could have a material adverse effect on our financial condition and operating results.

The preparation of financial statements in accordance with GAAP involves making estimates, judgments and assumptions that affect reported amounts of assets (including long-lived assets, goodwill and other intangible assets), liabilities and related reserves, revenues, expenses and income. This includes estimates, judgments and assumptions for assessing the amortization/accretion of purchase accounting fair value differences and the impairment of long-lived assets, goodwill and other intangible assets pursuant to applicable accounting guidance. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are often not readily apparent from other sources. However, estimates, judgments and assumptions can be highly uncertain and are subject to change in the future, and our estimates, judgments and assumptions may prove to be incorrect and our actual results may differ from these estimates under different assumptions or conditions. If any estimates, judgments or assumptions change in the future, or our actual results differ from our estimates or assumptions, we may be required to record additional expenses or impairment charges, which would be recorded as a charge against our earnings and could have a material adverse impact on our financial condition and operating results.

Risks Relating to the Spin-Off

The distribution of New BBX Capital’s common stock will not qualify for tax-free treatment and will be a taxable transaction.

The distribution does not qualify for tax-free treatment and, accordingly, will be a taxable transaction to Parent’s shareholders. For U.S. federal income tax purposes, the receipt of New BBX Capital’s Class A Common Stock or Class B Common Stock in the spin-off is expected to be treated as a distribution of property in an amount equal to the fair market value of the stock received. We believe that a reasonable approach to determine the fair market value of the shares of New BBX Capital’s Class A Common Stock or Class B Common Stock

received would be to use the volume-weighted average price of New BBX Capital’s common stock on the first full trading day following the distribution. We believe this is a reasonable approach because the rights of New BBX Capital’s Class A Common Stock and Class B Common Stock (other than voting rights, as described above) are substantially the same and New BBX Capital’s Class B Common Stock will be convertible into shares of New BBX Capital’s Class A Common Stock on a share-for-share basis in the holder’s discretion; however, there is expected to be significantly less trading volume in the shares of New BBX Capital’s Class B Common Stock as compared to New BBX Capital’s Class A Common Stock. The distribution of New BBX Capital’s Class A Common Stock or Class B Common Stock in the spin-off should be treated as ordinary dividend income to the extent considered paid out of Parent’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of Parent’s current year and accumulated earnings and profits will be treated as a non-taxable return of capital, which reduces basis, to the extent of the holder’s basis in its shares of Parent’s Class A Common Stock or Class B Common Stock, as applicable, and thereafter as capital gain. The amount of those earnings and profits is not determinable at this time because it will depend on Parent’s income for the entire tax year in which the distribution occurs. For more information regarding the potential U.S. federal income tax consequences to you of the distribution, see the section entitled “The Spin-Off—Material U.S. Federal Income Tax Consequences of the Spin-Off.”

New BBX Capital may be unable to achieve some or all of the expected benefits of the spin-off, and the spin-off may adversely affect New BBX Capital’s business.

As a new, publicly-traded company, New BBX Capital may be more susceptible to market fluctuations and other adverse events than New BBX Capital would have been were it still a part of Parent’s organization. New BBX Capital’s performance may not meet expectations for a variety of reasons. There is no assurance that New BBX Capital will achieve profitability or succeed as a separate public company.

New BBX Capital’s ability to meet its capital needs may be adversely impacted by the loss of financial support from Parent; New BBX Capital may not be able to obtain funds necessary to operate its business.

The loss of financial support from Parent could materially impact New BBX Capital’s ability to meet its capital needs. In the event that New BBX Capital’s cash and cash equivalents, payments received by New BBX Capital pursuant to the terms of the $75 million note issued to it by Parent in connection with the spin-off and dividends from New BBX Capital’s subsidiaries are insufficient to fund New BBX Capital’s operations and investments, New BBX Capital will be required to obtain funds through accessing the capital or debt markets, and not from Parent. As a standalone company apart from Parent’s organization, the cost of financing may depend on factors such as, among other things, New BBX Capital’s performance and financial market conditions generally. Accordingly, New BBX Capital may not be able to obtain financing or otherwise raise funds necessary to operate its business on favorable terms, or at all. If New BBX Capital is unable to raise additional capital when required or on acceptable terms, New BBX Capital may have to significantly delay, scale back or discontinue its investments or operations. Any of these events could significantly adversely impact New BBX Capital’s business and prospects and could cause New BBX Capital’s stock price to decline. In addition, any debt financing, if available, may restrict New BBX Capital’s operations and activities. New BBX Capital’s indebtedness could also have other important consequences for holders of New BBX Capital’s common stock. If New BBX Capital cannot generate sufficient cash flow from operations to meet future debt payment obligations or to comply with its loan covenants, then New BBX Capital may be required to attempt to restructure or refinance such debt, raise additional capital or take other actions such as selling assets, or reducing or delaying capital expenditures. There is no assurance that New BBX Capital will be able to effect any such actions or do so on satisfactory terms, if at all, or that such actions would be permitted by the terms of New BBX Capital’s indebtedness. Further, to the extent that New BBX Capital raises additional funds by issuing equity securities, New BBX Capital’s shareholders would experience dilution, which may be significant and could cause the market price of New BBX Capital’s common stock to decline.

New BBX Capital may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as a separate, publicly traded company, and New BBX Capital may experience increased costs after the spin-off.

Following the spin-off, Parent will have no obligation to provide New BBX Capital with assistance other than the obligations and services contained in the agreements between Parent and New BBX Capital relating to the spin-off, including the Separation and Distribution Agreement and other agreements described under “The Spin-Off – Relationship Between New BBX Capital and Parent.” These services do not include every service that New BBX Capital has received from Parent in the past, and Parent is only obligated to provide the services for limited periods following completion of the spin-off. The agreements relating to such services and to the spin-off were agreed to prior to the spin-off, at a time when New BBX Capital’s business was still operated as part of Parent’s organization, and New BBX Capital did not have an independent board of directors or management team representing its interests with respect to such agreements.

Following the spin-off and the expiration of the aforementioned agreements, New BBX Capital will need to provide internally or obtain from unaffiliated third parties the services New BBX Capital will no longer receive from Parent. These services may include, without limitation, legal, accounting, information technology, software development, human resources and other infrastructure support, the effective and appropriate performance of which may be critical to New BBX Capital’s operations. New BBX Capital may be unable to replace these services in a timely manner or on terms and conditions as favorable as those received from Parent. New BBX Capital may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently, or may incur additional costs that could adversely affect New BBX Capital. If New BBX Capital fails to obtain the quality of services necessary to operate effectively or incurs greater costs in obtaining these services, New BBX Capital’s business, financial condition and results of operations may be adversely affected.

As a public company, New BBX Capital will be subject to the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). These requirements may place a strain on New BBX Capital’s systems and resources. The Exchange Act requires that New BBX Capital file reports and statements with the Securities and Exchange Commission (the “SEC”), including annual, quarterly and current reports. Under the Sarbanes-Oxley Act, New BBX Capital must maintain effective disclosure controls and procedures and internal control over financial reporting, which requires significant resources and management oversight. New BBX Capital intends to implement additional procedures and processes to address the standards and requirements applicable to public companies, but these procedures may not be successful and the costs associated with compliance may be greater than anticipated.

New BBX Capital does not have an operating history as a standalone company apart from Parent’s organization, and New BBX Capital’s historical and pro forma financial information may not be a reliable indicator of New BBX Capital’s future results.

The historical financial information New BBX Capital has included in this information statement has been derived from Parent’s consolidated financial statements and accounting records and does not necessarily reflect what New BBX Capital’s financial position, results of operations and cash flows would have been had New BBX Capital been a separate, stand-alone entity during the periods presented. Parent did not account for New BBX Capital, and New BBX Capital was not operated, as a separate, stand-alone company for the periods presented. Actual costs that may have been incurred if New BBX Capital had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure, and materiality thresholds would have been significantly lower. In addition, the historical information may not be indicative of what New BBX Capital’s results of operations, financial position and cash flows will be in the future particularly in light of the impact of the COVID-19 pandemic on New BBX Capital’s businesses, assets and prospects.

Additionally, in preparing the unaudited pro forma combined financial statements contained in this information statement, New BBX Capital based the pro forma adjustments on available information and assumptions that New BBX Capital believes are reasonable and factually supportable; however, the assumptions may prove not to be accurate. Also, New BBX Capital’s unaudited pro forma combined financial statements do not give effect to various ongoing additional costs New BBX Capital may incur in connection with being a stand-alone public company. Accordingly, the unaudited pro forma combined financial statements do not reflect what New BBX Capital’s financial condition, results of operations or cash flows would have been as a stand-alone public company and is not necessarily indicative of New BBX Capital’s future financial condition or results of operations.

The spin-off could give rise to disputes or other unfavorable effects, which could have a material adverse effect on New BBX Capital’s business, financial position and results of operations.

Disputes with third parties could arise out of the distribution, and New BBX Capital could experience unfavorable reactions to the distribution from employees, investors, or other interested parties. These disputes and reactions could have a material adverse effect on New BBX Capital’s business, financial position, and results of operations. In addition, following the spin-off, disputes between New BBX Capital and Parent could arise in connection with the Separation and Distribution Agreement and other agreements to be entered into between New BBX Capital and Parent in connection with the spin-off as described under “The Spin-Off – Relationship Between New BBX Capital and Parent.”

New BBX Capital’s potential indemnification obligations pursuant to the Separation and Distribution Agreement could have material adverse effects.

Under the Separation and Distribution Agreement, New BBX Capital will have an obligation to indemnify Parent for liabilities associated with New BBX Capital’s business, Parent’s assets and liabilities being transferred to New BBX Capital in connection with the spin-off, and any breach of New BBX Capital’s obligations under the Separation and Distribution Agreement and other agreements to be entered into between New BBX Capital and Parent in connection with the spin-off as described under “The Spin-Off – Relationship Between New BBX Capital and Parent.” The costs associated with any such indemnification could be significant and have a material adverse effect on New BBX Capital’s results and financial condition.

New BBX Capital’s current or prospective customers, suppliers or other companies with whom New BBX Capital conducts business may require assurances that New BBX Capital’s financial condition on a stand-alone basis is sufficient to satisfy their requirements for doing or continuing to do business with them.

New BBX Capital’s customers, suppliers or other companies with whom New BBX Capital conducts business may require assurances that New BBX Capital’s financial condition on a stand-alone basis is sufficient to satisfy their requirements for doing or continuing to do business with them. If any of them are not satisfied with New BBX Capital’s financial stability and cease doing business with New BBX Capital, New BBX Capital’s business, financial condition and results of operations could be materially adversely affected.

Until the spin-off occurs, Parent may change the terms of the separation in ways that may be unfavorable to New BBX Capital.

Until the spin-off occurs, New BBX Capital will continue as a wholly-owned subsidiary of Parent. Accordingly, Parent will effectively have the sole and absolute discretion to determine and change the terms of the spin-off, including the establishment of the record date for the distribution and the distribution date. These changes could be unfavorable to New BBX Capital. Notwithstanding the foregoing, if the spin-off is approved by Parent’s shareholders, then, following such approval, Parent may not, without the approval of its shareholders, change the terms of the spin-off in a manner that would be reasonably likely to have a material adverse impact on Parent’s shareholders or New BBX Capital, or be reasonably likely to cause a shareholder who voted in favor of

the spin-off to change its vote. Parent may decide at any time, including following any shareholder approval of the spin-off, not to proceed with the spin-off and to abandon the transaction.

Risks Relating to New BBX Capital’s Common Stock

There is no existing market for New BBX Capital’s common stock and an active trading market may not develop or be sustained after the spin-off. If the price of New BBX Capital’s common stock fluctuates significantly following the spin-off, shareholders could incur substantial loss of their investment.

There currently is no public market for New BBX Capital’s common stock and there can be no assurance that an active trading market will develop as a result of the spin-off or be sustained in the future. The lack of an active market may make it more difficult for you to sell your stock and could lead to the price of the stock being depressed or more volatile. The price at which New BBX Capital’s common stock may trade after the spin-off cannot be predicted. The price of New BBX Capital’s common stock could fluctuate widely in response to:

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New BBX Capital’s quarterly and annual operating results;

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changes in New BBX Capital’s business and the market’s perception of New BBX Capital’s business;

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changes in the businesses, earnings estimates or market perceptions of New BBX Capital’s competitors or customers;

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changes in New BBX Capital’s key personnel;

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changes in general market or economic conditions; and

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changes in the legislative or regulatory environment.

In addition, the stock market has experienced extreme price and volume fluctuations that have significantly affected the quoted prices of securities. The changes often appear to occur without regard to specific operating performance. The price of New BBX Capital’s common stock could fluctuate based upon factors that have little or nothing to do with its business or its performance, and these fluctuations could materially reduce the price of New BBX Capital’s common stock.

Substantial sales of New BBX Capital’s common stock may occur in connection with the spin-off, which could cause the price of the common stock to decline.

Other than shareholders that are affiliates of Parent, shareholders of Parent receiving shares of New BBX Capital’s common stock in the distribution generally may sell those shares immediately in the public market. Parent’s shareholders may decide to sell the shares received in the distribution for any reason, including if, among other things, if New BBX Capital’s common stock does not fit their investment objectives or, in the case of index funds, if New BBX Capital is not part of the index in which they invest. Sales of significant amounts of New BBX Capital’s common stock or a perception in the market that such sales will occur may reduce the market price of the stock.

New BBX Capital’s Articles of Incorporation provide for fixed relative voting percentages between New BBX Capital’s Class A Common Stock and Class B Common Stock, which may not be well accepted by the market.

Like Parent’s Class A and Class B Common Stock, New BBX Capital’s Articles of Incorporation provide that holders of Class A Common Stock and Class B Common Stock will generally vote together as a single class, including with respect to the election of directors, with holders of Class A Common Stock possessing in the aggregate 22% of the total voting power of all common stock and holders of Class B Common Stock possessing in the aggregate the remaining 78% of the total voting power. These relative voting percentages will remain fixed unless the number of shares of Class B Common Stock outstanding decreases to 360,000 shares, at which time the Class A Common Stock’s aggregate voting power will increase to 40% and the aggregate voting power of the Class B Common Stock will decrease to 60%. If the number of shares of Class B Common Stock outstanding

decreases to 280,000 shares, then the Class A Common Stock’s aggregate voting power will increase to 53% and the aggregate voting power of the Class B Common Stock will decrease to 47%. If the number of shares of New BBX Capital’s Class B Common Stock outstanding decreases to 100,000 shares, then the fixed voting percentages will be eliminated and each share of Class A Common Stock and Class B Common Stock will be entitled to one vote per share. The share thresholds set forth above are subject to equitable adjustment to reflect any stock split, reverse stock split or similar transaction. The changes in the relative voting power represented by each class of New BBX Capital’s common stock are based only on the number of shares of New BBX Capital’s Class B Common Stock outstanding, thus issuances of Class A Common Stock, including under equity-based compensation plans and in connection with any acquisitions that New BBX Capital may pursue, will have no effect on these provisions. If additional shares of New BBX Capital’s Class A Common Stock are issued without a comparative increase in the number of outstanding shares of New BBX Capital’s Class B Common Stock, the disparity between the equity interest represented by New BBX Capital’s Class B Common Stock and its voting power will widen. In addition, shareholders who hold shares of both New BBX Capital’s Class A Common Stock and Class B Common Stock, including Alan B. Levan, John E. Abdo, Jarett S. Levan and Seth M. Wise, will be able to sell shares of New BBX Capital’s Class A Common Stock without affecting in any material respect their overall voting interest. If the fixed relative voting percentages between New BBX Capital’s Class A Common Stock and Class B Common Stock provided by New BBX Capital’s Articles of Incorporation is not well-accepted by the market, the trading market and market price of New BBX Capital’s stock may be materially adversely affected.

Alan B. Levan, John E. Abdo, Jarett S. Levan and Seth M. Wise’s control position may adversely affect the market price of New BBX Capital’s Class A Common Stock and Class B Common Stock.

Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise currently collectively beneficially own shares representing approximately 20.6% of Parent’s outstanding Class A Common Stock and 95.2% of Parent’s outstanding Class B Common Stock. In the aggregate, these shares currently represent approximately 34.8% of Parent’s total outstanding common equity and 78.8% of the total voting power of Parent’s Class A Common Stock and Class B Common Stock. Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise will have the same ownership and voting interest in New BBX Capital immediately following the spin-off as they have with respect to Parent immediately prior to the spin-off. Accordingly, and because New BBX Capital’ Class A Common Stock and Class B Common Stock vote as a single class on most matters, including the election of directors, as described above, Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise will have the voting power to elect the members of New BBX Capital’s Board of Directors and to control the outcome of any other vote of New BBX Capital’s shareholders, except in those limited circumstances where Florida law mandates that the holders of New BBX Capital’s Class A Common Stock vote as a separate class. This control position may have an adverse effect on the market price of New BBX Capital’s Class A Common Stock and Class B Common Stock. In addition, their interests may conflict with the interests of New BBX Capital’s other shareholders.

Certain of the Parent’s executive officers and directors have interests in the spin-off that may differ from, or be in addition to, the interests of Parent’s shareholders generally.

In reviewing and considering the spin-off, you should be aware that certain executive officers and directors of Parent have interests in the spin-off that may differ from, or be in addition to, the interests of Parent’s shareholders generally. These interests include those related to the acceleration of restricted stock awards in connection with the spin-off (all of which were held by the Parent’s executive officers), the expected control position of Alan B. Levan, John E. Abdo, Jarett S. Levan and Seth M. Wise with respect to New BBX Capital following the spin-off, and the overlap of management between the Parent and New BBX Capital following the spin-off, each of which is described in further detail below.

The vesting of all unvested restricted stock awards of Parent’s Class A Common Stock and Class B Common Stock

was accelerated in contemplation of the spin-off. These restricted stock awards, all of which were held by the Company’s executive officers, covered a total of 488,503 shares of Parent’s Class A Common Stock and 528,484 shares of Parent’s Class B Common Stock as follows: Alan B. Levan held, and had vested, restricted stock awards of 193,042 shares of Parent’s Class A Common Stock and 183,125 shares of Parent’s Class B Common Stock; John E. Abdo held, and had vested, restricted stock awards of 193,042 shares of Parent’s Class A Common Stock and 212,892 shares of Parent’s Class B Common Stock; Jarett S. Levan held, and had vested, restricted stock awards of 48,261 shares of Parent’s Class A Common Stock and 60,698 shares of Parent’s Class B Common Stock; Seth M. Wise held, and had vested, restricted stock awards of 48,261 shares of Parent’s Class A Common Stock and 60,698 shares of Parent’s Class B Common Stock; and Raymond S. Lopez held, and had vested, restricted stock awards of 5,897 shares of Parent’s Class A Common Stock and 11,071 shares of Parent’s Class B Common Stock. The shares are (and, prior to their vesting, were) considered outstanding and will participate in the spin-off on the same terms as all other outstanding shares of Parent’s common stock. Absent the vesting acceleration, the restricted stock awards would otherwise have been scheduled to vest between October 2020 and October 2023.

As previously described, it is expected that Alan B. Levan, John E. Abdo, Jarett S. Levan and Seth M. Wise will be deemed to control New BBX Capital following the spin-off by virtue of their collective ownership of shares expected to represent approximately 78.8% of the total voting power of New BBX Capital’s Class A Common Stock and Class B Common Stock following the spin-off. See the risk factor above entitled “Alan B. Levan, John E. Abdo, Jarett S. Levan and Seth M. Wise’s control position may adversely affect the market price of New BBX Capital’s Class A Common Stock and Class B Common Stock” for additional information with respect to Messrs. Alan Levan, Abdo, Jarett Levan and Seth M. Wise’s expected stock ownership of New BBX Capital and the risks related thereto.

Following the spin-off, there will be an overlap between executive management of Parent and New BBX Capital. Alan B. Levan, John E. Abdo and Jarett S. Levan will serve as directors of Parent, Bluegreen Vacations and New BBX Capital, and Messrs. Alan Levan and Abdo will serve as executive officers of Parent, Bluegreen Vacations and New BBX Capital. In addition, Seth M. Wise will be Executive Vice President and a director of New BBX Capital and will continue to serve as a director of Bluegreen Vacations. In addition, it is expected that the non-employee directors serving on Parent’s Board of Directors at the time of the spin-off (other than Darwin Dornbush, Joel Levy and William Nicholson, each of whom is expected to remain as a director of Parent and not join New BBX Capital’s Board) will resign as directors of Parent and serve as directors of New BBX Capital following the spin-off. Non-employee directors of New BBX Capital will receive compensation for their service on New BBX Capital’s Board of Directors and committees. Such compensation is expected to be the same as what they currently receive for their service on Parent’s Board of Directors and its committees.

Provisions in New BBX Capital’s Articles of Incorporation and Bylaws, and the rights agreement expected to be adopted by New BBX Capital, may make it difficult for a third party to acquire New BBX Capital and could impact the price of, or otherwise adversely impact, New BBX Capital’s Class A Common Stock and Class B Common Stock.

New BBX Capital’s Articles of Incorporation and Bylaws will contain provisions that could delay, defer or prevent a change of control of New BBX Capital or New BBX Capital’s management. These provisions could make it more difficult for shareholders to elect directors and take other corporate actions. As a result, these provisions could limit the price that investors are willing to pay in the future for shares of New BBX Capital’s Class A Common Stock or Class B Common Stock. These provisions include:

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the provisions in New BBX Capital’s Articles of Incorporation regarding the special voting rights of New BBX Capital’s Class B Common Stock;

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subject to the special class voting rights of New BBX Capital’s Class B Common Stock under certain circumstances, the authority of the Board of Directors to issue additional shares of common or preferred stock and to fix the relative rights and preferences of the preferred stock without shareholder approval, as described in further detail below; and

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advance notice procedures to be complied with by shareholders in order to make shareholder proposals or nominate directors.

In addition, it is expected that, prior to or in connection with the spin-off, New BBX Capital will adopt a rights agreement. The rights agreement may have an anti-takeover effect and will be an impediment to a proposed takeover of New BBX Capital which is not approved by New BBX Capital’s Board of Directors and may also limit the trading of, or otherwise adversely impact the market price of, New BBX Capital’s Class A Common Stock or Class B Common Stock. In addition, acquisitions of shares of New BBX Capital’s Class A Common Stock or Class B Common Stock as a result of acquiring additional shares of Parent’s Class A Common Stock or Class B Common Stock prior to the distribution or shares representing New BBX Capital’s Class A Common Stock or Class B Common Stock in the when-issued trading market or as a result of the distribution will each be included in determining the beneficial ownership of a person and all such acquisitions following the first public announcement of New BBX Capital’s adoption of the rights agreement will be taken into account in determining whether a person is an acquiring person under the terms of the rights agreement. Therefore, a person could become an acquiring person under the terms of the rights agreement simultaneously with the receipt of shares in the distribution. See “Description of Capital Stock” for additional information regarding the rights agreement expected to be adopted by New BBX Capital.

Further, due to the control position of Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise with respect to New BBX Capital’s Class A Common Stock and Class B Common Stock, as described above, a change of control or sale of New BBX Capital, or any other action which requires the affirmative vote of holders of shares of New BBX Capital’s Class A Common Stock and Class B Common Stock representing a majority of the voting power of such stock, will be impossible without the consent of Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise, and Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise’s interests may conflict with the interests of New BBX Capital’s other shareholders. Further, the rights agreement, if adopted by New BBX Capital, would, subject to limited exceptions expected to be set forth therein, prevent other shareholders from acquiring a greater than 5% ownership position in New BBX Capital’ Class A Common Stock, Class B Common Stock or total combined common stock and, accordingly, would prevent a meaningful challenge to the influence of Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise over New BBX Capital, including matters submitted for shareholder approval.

Additionally, pursuant to New BBX Capital’s Articles of Incorporation and Florida law, except as may be required by any national securities exchange or OTC Market on which New BBX Capital’s Class A Common Stock or Class B Common Stock is traded or quoted and subject to the separate voting rights of New BBX Capital’s Class B Common Stock in certain circumstances, New BBX Capital’s Board of Directors may, without the consent of the New BBX Capital’s shareholders, approve the issuance of authorized but unissued shares of New BBX Capital’s securities and fix the relative rights and preferences of preferred stock. If New BBX Capital issues additional shares of its Class A Common Stock, Class B Common Stock or other securities, its shareholders would experience dilution. In addition, 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 New BBX Capital’s Class A Common Stock or Class B Common Stock or otherwise adversely affect the holders of New BBX Capital’s Class A Common Stock or Class B Common Stock, including the likelihood that holders of New BBX Capital’s Class A Common Stock or Class B Common Stock would receive dividend payments and payments on liquidation, or the amounts thereof. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, financing transactions and other corporate purposes, could also, among other things, have the effect of delaying, deferring or preventing a change in control or other corporate actions, and might adversely affect the market price of New BBX Capital’s Class A Common Stock or Class B Common Stock.

New BBX Capital’s Bylaws will contain an exclusive forum provision, which could impair the ability of shareholders to obtain a favorable judicial forum for certain disputes with us or our directors, officers or other employees and be cost-prohibitive to shareholders.

New BBX Capital’s Bylaws will contain an exclusive forum provision which provides that, unless its Board of Directors consents to the selection of an alternative forum, the Circuit Court located in Miami-Dade County, Florida (or, if such Circuit Court does not have jurisdiction, another Circuit Court located within Florida or, if no Circuit Court located within Florida has jurisdiction, the federal district court for the Southern District of Florida) will be the sole and exclusive forum for “Covered Proceedings,” which include: (i) any derivative action or proceeding brought on New BBX Capital’s behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of New BBX Capital’s directors, officers or other employees to New BBX Capital or its shareholders; (iii) any action asserting a claim against New BBX Capital or any of its directors, officers or other employees arising pursuant to any provision of the Florida Business Corporation Act, New BBX Capital’s Articles of Incorporation or New BBX Capital’s Bylaws (in each case, as may be amended or amended and restated from time to time); and (iv) any action asserting a claim against New BBX Capital or any of its directors, officers or other employees governed by the internal affairs doctrine of the State of Florida. To the extent within the categories set forth in the preceding sentence, Covered Proceedings include causes of action under the Exchange Act and the Securities Act. The exclusive forum provision will also provide that if any Covered Proceeding is filed in a court other than a court located within Florida in the name of any shareholder, then such shareholder shall be deemed to have consented to (a) the personal jurisdiction of the state and federal courts located within Florida in connection with any action brought in any such court to enforce the exclusive forum provision and (b) having service of process made upon such shareholder in any such enforcement action by service upon such shareholder’s counsel in the action as agent for such shareholder. Notwithstanding the foregoing, shareholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

The exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New BBX Capital or its directors, officers or other employees or be cost-prohibitive to shareholders, which may discourage such lawsuits against New BBX Capital and its directors, officers and other employees. However, there is uncertainty regarding whether a court would enforce the exclusive forum provision. If a court were to find the exclusive forum provision to be inapplicable or unenforceable in an action, New BBX Capital may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect New BBX Capital’s financial condition and operating results.

New BBX Capital does not plan to pay dividends on its common stock.

New BBX Capital’s dividend policy will be established by New BBX Capital’s Board of Directors based on New BBX Capital’s financial condition, results of operations and capital requirements, as well as other business considerations that New BBX Capital’s Board considers relevant. Further, the terms of New BBX Capital’s indebtedness may limit or prohibit the payments of dividends. New BBX Capital does not currently anticipate paying any cash dividends for the foreseeable future.

Utilizing the reduced disclosure requirements applicable to New BBX Capital may make New BBX Capital’s common stock less attractive to investors.

New BBX Capital qualifies as an “emerging growth company” and is therefore eligible to utilize certain reduced reporting and other requirements that are otherwise applicable generally to public companies. Pursuant to these reduced disclosure requirements, New BBX Capital is not required to, among other things, provide certain disclosures regarding executive compensation, hold shareholder advisory votes on executive compensation or obtain shareholder approval of any golden parachute payments, and New BBX Capital has reduced financial disclosure obligations. New BBX Capital would cease to be an emerging growth company upon the earliest of:

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the last day of the fiscal year in which New BBX Capital has $1.07 billion or more in annual revenues;

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the last day of the fiscal year following the fifth anniversary of the date of the first sale of New BBX Capital’s common equity securities pursuant to an effective registration statement under the Securities Act;

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the date on which New BBX Capital has issued more than $1.0 billion in non-convertible debt securities during the previous three-year period; and

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the date on which New BBX Capital is deemed to be a “large accelerated filer” (which is the last day of the fiscal year during which the total market value of New BBX Capital’s common equity securities held by non-affiliates is $700 million or more, calculated as of the end of the second quarter (June 30) of such fiscal year).

In addition, New BBX Capital may in the future qualify as a “smaller reporting company,” in which case New BBX Capital would be eligible to utilize the reduced disclosure requirements available to smaller reporting companies even after New BBX Capital ceases to be an emerging growth company. The reduced disclosure requirements available to smaller reporting companies are similar to those available to emerging growth companies, including reduced financial and executive compensation disclosures. Under current SEC rules, New BBX Capital will become a smaller reporting company if, as of the end of the second fiscal quarter following the completion of the spin-off (the quarter ending June 30, 2022 assuming the spin-off is completed prior to such date), the total market value of New BBX Capital’s common equity securities held by non-affiliates is less than $200 million.

New BBX Capital intends to utilize the reduced reporting requirements and available exemptions for so long as New BBX Capital is permitted to do so. Investors may find New BBX Capital’s common stock to be less attractive as a result of its utilization of the reduced disclosure requirements and exemptions, which may have a material, adverse effect on the trading market and market price of New BBX Capital’s Class A Common Stock and Class B Common Stock.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This information statement and other materials that New BBX Capital has filed, or will file, with the SEC contain, or will contain, “forward-looking statements.” Forward-looking statements are those that do not relate strictly to historical or current facts and can be identified by use of words such as “anticipates,” “estimates,” “expects,” “intends,” “plans,” “believes,” “will,” “should,” “would,” “may,” “could” or the negative of these terms or similar expressions or future or conditional verbs. Forward-looking statements include, among others, statements relating to New BBX Capital’s future financial performance, business prospects and strategy, anticipated financial position, liquidity and capital needs, market potential, and other events or developments that New BBX Capital expects or anticipates will occur in the future and statements expressing general views about future operating results or conditions. These statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are impossible or difficult to predict. New BBX Capital’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements as a result of various factors, including, without limitation, those set forth below.

With respect to New BBX Capital generally, the various factors include, but are not limited to:

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risks and uncertainties relating to public health issues, including, in particular, the COVID-19 pandemic, as it is not currently possible to accurately assess the expected duration and effects of the pandemic on New BBX Capital’s business (these 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; the duration and severity of the COVID-19 pandemic and the impact on demand for New 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 New BBX Capital’s ability to successfully resume full business operations; the pace of recovery when the COVID-19 pandemic subsides; competitive conditions; New BBX Capital’s liquidity and the availability of capital; the effects and duration of steps New 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 New 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; 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 New BBX Capital operates;

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risks and uncertainties affecting New 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;

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

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

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

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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;

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New BBX Capital’s ability to compete effectively in the highly competitive industries in which it operates;

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New BBX Capital’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;

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New BBX Capital’s relationships with key customers and suppliers may be materially diminished or terminated;

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the preparation of financial statements in accordance with GAAP involves making estimates, judgments and assumptions, and any changes in estimates, judgments and assumptions used could have a material adverse impact on the financial condition and operating results of New BBX Capital or its subsidiaries;

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

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

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

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New BBX Capital’s business is subject to various governmental regulations, laws and orders, compliance with which may cause New BBX Capital to incur significant expenses, and any noncompliance could subject New BBX Capital to civil or criminal penalties or other liabilities;

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

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environmental liabilities, including claims with respect to mold or hazardous or toxic substances, and their impact on New BBX Capital’s financial condition and operating results;

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risks that natural disasters and other acts of god may adversely impact New BBX Capital’s financial condition and operating results;

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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;

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

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if New 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, New 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 New BBX Capital’s Class A Common Stock or Class B Common Stock or otherwise adversely affect the holders of New BBX Capital’s Class A Common Stock or Class B Common Stock, including the likelihood that holders of New BBX Capital’s Class A Common Stock or Class B Common Stock would receive dividend payments and payments on liquidation, or the amounts thereof.

In addition, with respect to BBX Capital Real Estate, the various factors include, but are not limited to:

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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;

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risks that the recent 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;

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the risk of additional impairments of real estate assets;

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

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exposure to downturns in the real estate and housing markets;

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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;

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risks associated with obtaining necessary zoning and entitlements;

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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;

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

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

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

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

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risk associated with rising land and construction costs;

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

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

With respect to BBX Sweet Holdings, Renin and other operating businesses, the various factors include, but are not limited to:

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risks that New BBX Capital’s investments will not achieve the returns anticipated;

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risks that their business plans, including IT’SUGAR’s opening of new stores in high profile locations, will not be successful;

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risks that market demand for their products could decline;

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

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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;

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

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

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risks associated with product recalls or product liability claims;

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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;

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for Renin, the risk of trade receivable losses and the risks of charge-offs and required increases in the allowance for bad debts;

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risks associated with the performance of vendors, commodity price volatility and the impact of tariffs on goods imported from Canada and Asia, particularly with respect to Renin;

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

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

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requirements for operating and capital expenditures may require New BBX Capital to make capital contributions or advances; and

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risk that a decline in IT’SUGAR’s profitability or cash flows may result in impairment losses associated with IT’SUGAR’s intangible and long-lived assets.

Risks and uncertainties related to the spin-off include, but are not limited to:

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the risk that some or all of the anticipated benefits related to the spin-off may not be achieved when or to the extent expected, or at all;

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the risk that New BBX Capital may need additional capital in the future; however, such capital may not be available to New BBX Capital on reasonable terms, if at all;

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New BBX Capital’s historical and pro forma financial information is not necessarily representative of the results New BBX Capital would have achieved as a separate, publicly-traded company and may not be a reliable indicator of its future results;

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the spin-off could give rise to disputes or other unfavorable effects, which could have a material adverse effect on New BBX Capital’s business, financial position and results of operations;

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under the Separation and Distribution Agreement, New BBX Capital and Parent may be required to indemnify each other for certain liabilities; however, there can be no assurance that any indemnities from Parent will be sufficient to insure New BBX Capital against the full amount of such liabilities or that Parent’s ability to satisfy its indemnification obligations will not be impaired in the future, and any indemnification obligations New BBX Capital may have could materially adversely affect New BBX Capital’s results and financial condition;

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no market for New BBX Capital’s Class A Common Stock or Class B Common Stock currently exists and an active trading market may not develop or be sustained after the spin-off;

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the price of New BBX Capital’s Class A Common Stock and Class B Common Stock, once publicly-traded, may be volatile, including until the public is able to fully analyze New BBX Capital’s business, operations and results separate from Parent, and there is no assurance as to the price at which shares of New BBX Capital’s Class A Common Stock or Class B Common Stock will trade following the spin-off or at any other time in the future;

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risks associated with New BBX Capital’s indebtedness, including that New BBX Capital will be required to utilize cash flow to service its indebtedness, and that indebtedness may make New BBX Capital more vulnerable to economic downturns and subject New BBX Capital to covenants or restrictions on its operations and activities or on its ability to pay dividends, if any; and

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risks associated with the $75 million promissory note to be made by Parent in favor of New BBX Capital in connection with the spin-off, including Parent’s option to defer interest payments under the note, and Parent’s liquidity and ability to pay amounts due under the note, including that Parent may be dependent upon dividends from Bluegreen Vacations in order to pay amounts due under the note and, while Bluegreen Vacations declared a special cash dividend which is payable on August 21, 2020, Parent has agreed to use its proceeds from such special cash dividend to repay its $80 million note payable to Bluegreen Vacations, and Bluegreen Vacations has suspended regular dividend payments in light of the impact of the COVID-19 pandemic and there is no assurance that Bluegreen Vacations will resume paying regular dividends or pay any other special dividends in the future, whether consistent with previous amounts or at all; further, Parent may incur additional indebtedness in the future, including, without limitation, in connection with any potential transaction or transactions which Parent may decide to pursue in order to increase its ownership in Bluegreen Vacations, including a transaction or transactions which would result in Bluegreen Vacations once again becoming an indirect wholly-owned subsidiary of Parent;

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adverse conditions in the stock market, the public debt market and other capital markets or the economy generally, and the impact of such conditions on New BBX Capital’s activities and results, and the price and liquidity of New BBX Capital’s Class A Common Stock and Class B Common Stock.

In addition to the foregoing, reference is made to the other risks and uncertainties inherent to New BBX Capital’s business and activities, including those discussed under “Risk Factors” and elsewhere in this information statement. These and other factors disclosed in this information statement are not necessarily all of the important factors that could cause New BBX Capital’s actual results to differ materially from those expressed in or implied by any of the forward-looking statements. Other unknown or unpredictable factors could cause New BBX Capital’s actual results to differ materially from those expressed in or implied by any of the forward-looking statements. Given these uncertainties, you are cautioned not to place undue reliance on forward-looking statements. These statements should be considered only after carefully reading this entire information statement and in conjunction with the other information contained herein.

The forward-looking statements contained in this information statement are made only as of the date of this information statement. Except to the extent required by law, we do not undertake, and specifically disclaim any obligation, to update any forward-looking statements or to publicly announce the results of any revisions to any of such statements, including to reflect future events or developments. In addition, past performance may not be indicative of future results, and comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, and all such information should only be viewed as historical data.

You should read this information statement and the materials that we reference in this information statement and have filed with the SEC as exhibits to the registration statement on Form 10 of which this information statement is a part with the understanding that New BBX Capital’s actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect. We qualify all forward-looking statements by these cautionary statements.

THE SPIN-OFF

Reasons for the Spin-off

Parent’s Board of Directors has determined that the separation of New BBX Capital from Parent’s investment in Bluegreen Vacations is in the best interests of Parent’s shareholders. Parent’s Board of Directors believes that the separation will, among other things:

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allow each company to adopt strategies and pursue objectives independent of the other company, which may better position each company to maximize value over the long-term;

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bring greater clarity to the marketplace as to each company’s core competencies;

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enable investors to better evaluate the financial performance, strategies, and other characteristics of each company, which will permit investors to make investment decisions based on each company’s individual performance and potential, and enhance the likelihood that the market will value each company appropriately.

Mechanics of the Spin-off

Prior to the spin-off, New BBX Capital will be converted into a Florida corporation. In connection with the conversion, Parent, as the 100% owner of New BBX Capital at the time, will receive all of the issued and outstanding shares of New BBX Capital’s Class A Common Stock and Class B Common Stock. The spin-off will be effected through the distribution by Parent to its shareholders of 100% of the shares of New BBX Capital’s Class A Common Stock and Class B Common Stock held by Parent. Except for Woodbridge, the subsidiary through which Parent holds its investment in Bluegreen Vacations, New BBX Capital holds or will hold at the time of the spin-off all of Parent’s subsidiaries. These include BBX Capital Real Estate, BBX Sweet Holdings and its subsidiaries, including IT’SUGAR, Hoffman’s Chocolates and Las Olas Confections and Snacks, and Renin. As a shareholder of Parent, you will receive one share of New BBX Capital’s Class A Common Stock for each share of Parent’s Class A Common Stock held of record by you as of the 5:00 P.M., Eastern time, on September 22, 2020 (such time and date being referred to as the “record date” for the distribution), and one share of New BBX Capital’s Class B Common Stock for each share of Parent’s Class B Common Stock held of record by you as of the record date. The spin-off will not impact your holdings of Parent’s Class A Common Stock or Class B Common Stock and, accordingly, your proportionate interest in Parent will not change as a result of the spin-off. The distribution will be a taxable transaction to Parent’s shareholders. See “Material U.S. Federal Income Tax Consequences of the Spin-Off” below.

Based on the number of shares of Parent’s Class A Common Stock and Class B Common Stock expected to be outstanding as of the record date, we expect that approximately 15,624,091 shares of New BBX Capital’s Class A Common Stock and 3,693,596 shares of New BBX Capital’s Class B Common Stock will be distributed in the spin-off. However, the actual number of shares of New BBX Capital’s Class A Common Stock and Class B Common Stock to be distributed in the spin-off will be determined based on the actual number of shares of Parent’s Class A Common Stock and Class B Common Stock outstanding as of the record date. The shares of New BBX Capital’s Class A Common Stock and Class B Common Stock to be distributed in the spin-off will constitute all of the issued and outstanding shares of New BBX Capital’s common stock immediately following the distribution. In addition, if New BBX Capital adopts a rights agreement prior to the spin-off, then each share of New BBX Capital’s Class A Common Stock and Class B Common Stock distributed in connection with the

spin-off will have attached thereto an associated preferred share purchase right distributed under the rights agreement. See “Description of Capital Stock” for additional information regarding the rights agreement expected to be adopted by New BBX Capital.

No Parent shareholder will be required to pay any consideration, exchange or surrender their existing shares of Parent’s Class A Common Stock or Class B Common Stock or take any other action to receive their shares of New BBX Capital’s Class A Common Stock or Class B Common Stock, as applicable. However, the distribution will be a taxable transaction to Parent’s shareholders. In addition, Parent is seeking shareholder approval of the spin-off and Parent’s contemplated name change to Bluegreen Vacations Holding Corporation. Parent intends to hold a special meeting of its shareholders to approve these items and is distributing a separate proxy statement which contains information regarding the spin-off, the proposed name change, and the special meeting. Completion of the spin-off is conditioned upon the approval of the spin-off by Parent’s shareholders.

Relationship Between New BBX Capital and Parent

The separation of businesses of New BBX Capital and Parent in connection with the spin-off and the relationship between New BBX Capital and Parent following the spin-off will be governed by a Separation and Distribution Agreement, an Employee Matters Agreement, a Transition Services Agreement, and a Tax Matters Agreement, each as entered into between New BBX Capital and Parent in connection with the spin-off. In addition, Parent will issue a $75 million promissory note in favor of New BBX Capital in connection with the spin-off. These agreements are intended to facilitate the separation of businesses between Parent and New BBX Capital in connection with the spin-off and the operation of New BBX Capital and Parent as separate companies after the spin-off. The following is a summary of the Separation and Distribution Agreement, Employee Matters Agreement, Transition Services Agreement, Tax Matters Agreement and promissory note. The summaries are not complete and are qualified in their entirety by reference to the actual agreements or instruments, copies of which are filed as exhibits to the registration statement on Form 10 of which this information statement forms a part. We encourage you to read the full text of these agreements.

Separation and Distribution Agreement

The Separation and Distribution Agreement sets forth how the spin-off will be effected and certain other obligations of Parent and New BBX Capital prior to, upon and for a specified period following the completion of the spin-off. The Separation and Distribution Agreement provides that at the effective time of the spin-off, Parent will transfer to New BBX Capital the assets identified in the Separation and Distribution Agreement relating to the businesses and subsidiaries of New BBX Capital (to the extent not already owned by New BBX Capital).

New BBX Capital will retain or assume the liabilities identified in the Separation and Distribution Agreement relating to the businesses and subsidiaries of New BBX Capital, including the indebtedness of or related to the subsidiaries held by it or transferred to it in connection with the spin-off, which totaled approximately $41.6 million as of June 30, 2020.

The Separation and Distribution Agreement provides that Parent and New BBX Capital will use their respective reasonable best efforts to obtain promptly any required third-party consents or governmental approvals required in connection with the spin-off, provided that neither party will be required to make any payments or assume any liabilities or offer or grant any financial accommodation or other benefit with respect to any existing

agreements with third parties not required to be paid under the terms of an existing agreement. The transfer of any specific asset to New BBX Capital, on the one hand, or Parent, on the other hand, in connection with the spin-off will be deferred until any required consents or governmental approvals for such transfer are obtained. Notwithstanding the inability to transfer an asset or liability as a result of a third-party consent or required governmental approval prior to the spin-off, subject to the satisfaction of the conditions to the completion of the spin-off, the spin-off will nevertheless take place if so determined by Parent’s Board of Directors, and Parent and New BBX Capital, as applicable, will be required to hold the applicable asset or liability in trust and use reasonable best efforts to establish arrangements pursuant to which Parent or New BBX Capital, as applicable, will obtain all of the benefits and burdens associated with the asset or liability as if it had been transferred. Parent, on the one hand, and New BBX Capital, on the other hand, have also agreed to deliver (or cause to be delivered) any necessary or appropriate documents to the other party to effect, or as reasonably necessary or appropriate in connection with, the spin-off.

Termination of Prior Intercompany Arrangements

Except for the agreements entered into in connection with the spin-off and shared services agreements between Parent or its subsidiaries and New BBX Capital or its subsidiaries, all previous agreements between New BBX Capital and Parent will be terminated upon the spin-off, and all parties to such terminated agreements will be released from all liabilities thereunder other than liabilities for payment and/or reimbursement for costs and other fees and charges relating to services provided by Parent to New BBX Capital, or vice versa, prior to the spin-off in the ordinary course of business, which shall be settled at the effective time of the spin-off.

No Representations or Warranties

Under the Separation and Distribution Agreement, Parent does not make any representations or warranties to New BBX Capital, express or implied, as to the condition or the value of any asset or liability, the existence of any security interest on any asset, the absence of defenses from counterclaims, or any implied warranties of merchantability or fitness for a particular purpose or title. Under the Separation and Distribution Agreement, New BBX Capital will take the assets and liabilities transferred to it ‘‘as is, where is,’’ and bear the economic and legal risks relating to conveyance of, title to and transfer of those assets and liabilities.

Actions Before the Spin-Off

New BBX Capital and Parent will cooperate to prepare all documents and make all filings required for the spin-off. Parent will direct and control the efforts of the parties in connection with the spin-off. New BBX Capital will use reasonable best efforts to take all actions reasonably requested by Parent to facilitate the spin-off, including, among other things, cooperating in the preparation and filing of the registration statement on Form 10 of which this information statement forms a part and any other filing required to be made with the SEC or any other governmental authority and, as previously described, using reasonable best efforts to obtain promptly any required third-party consents or governmental approvals required in connection with the spin-off.

Conditions to the Spin-Off

We expect to consummate the spin-off on the distribution date, provided that the following conditions shall have been satisfied or, to the extent permissible, waived:

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the Board of Directors of Parent, in its sole and absolute discretion, shall have authorized and approved the spin-off (and such authorization and approval shall not have been withdrawn);

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the shareholders of Parent approving the spin-off;

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record date, all necessary permits and authorizations under the Securities Act and the Exchange Act relating to the issuance and trading of shares of New BBX Capital’s Class A Common Stock and Class B Common Stock shall have been obtained and be in effect, and such shares shall have been approved for listing, trading or quotation on a national securities exchange or the OTC Markets; and

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Mutual Releases and Indemnification

Parent and New BBX Capital will release each other, each other’s respective subsidiaries and specified related parties from any and all liabilities arising out of or related to any events occurring (or failing to occur) or conditions existing (or alleged to have exist), arising at or before the effective time of the spin-off, whether such events, circumstances or actions are known or unknown as of the effective time of the spin-off (provided, however, that New BBX Capital’s release shall apply only to claims related to New BBX Capital’s business). In addition, neither party may bring any legal proceeding against the other party or other releasees with respect to any released claim. The Separation and Distribution Agreement provides that this mutual release will not impair each party’s right to enforce the agreements entered into between Parent and New BBX Capital in connection with the spin-off and certain other rights, including, among other things, any right to indemnification or advancement of expenses under the organizational documents of any party or pursuant to directors and officers insurance, accrued and unpaid compensation or expense reimbursement of any employee, terms of existing employment agreements or arrangements, or any rights of a shareholder of Parent in its capacity as such.

Further, under the Separation and Distribution Agreement, New BBX Capital will indemnify Parent and its affiliates and their respective officers, directors, employees and agents for any liabilities resulting from, relating to or arising out of New BBX Capital’s business, including any of its subsidiaries or any assets or liabilities held by it or transferred to or assumed by New BBX Capital in connection with the spin-off, any breach by New BBX Capital of any agreement or obligation under any agreement entered into between Parent and New BBX Capital in connection with the spin-off, and the enforcement of any such right to indemnification. Parent will indemnify New BBX Capital and its affiliates and their respective officers, directors, employees and agents for any and all liabilities resulting from, relating to or arising out of any business, asset or liability not held by, transferred to, or assumed by, New BBX Capital in connection with the spin-off, any breach by Parent of any agreement or obligation under any agreement entered into between Parent and New BBX Capital in connection with the spin-off, and the enforcement of any such right to indemnification. The Separation and Distribution Agreement addresses other matters associated with the indemnification granted by each party under the agreement, including adjustments to indemnification payments for insurance proceeds, the procedure to defend third-party claims and the right to contribution by the indemnified party in the event the indemnification provided under the Separation and Distribution Agreement is not legally available.

Additional Covenants

The Separation and Distribution Agreement also addresses additional obligations of Parent and New BBX Capital, including those relating to, among others, omitted services, release of guarantees or indemnity, access to and exchange of information, record retention, provision of financial information, ownership of information,

cooperation in the conduct of certain claims, the privileged nature of information, insurance, waivers of conflicts of interest for counsel, confidentiality of information and non-solicitation, and directors’ and officers’ exculpation, indemnification and insurance.

Tax Matters Agreement

The Tax Matters Agreement generally sets out the respective rights, responsibilities and obligations of Parent and New BBX Capital with respect to taxes (including taxes arising in the ordinary course of business and taxes incurred as a result of the spin-off), tax attributes, tax returns, tax contests and certain other related tax matters.

The Tax Matters Agreement allocates responsibility for the preparation and filing of certain tax returns (and the payment of taxes reflected thereon). Under the Tax Matters Agreement, Parent will generally be liable for its own taxes and taxes of all of its subsidiaries (other than the taxes of New BBX Capital and its subsidiaries, the taxes for which New BBX Capital shall be liable) for all tax periods (or portion thereof) ending on the effective date of the spin-off. New BBX Capital will be responsible for its taxes, including for taxes of its subsidiaries, as well as for taxes of Parent arising as a result of the spin-off (including any taxes resulting from an election under Section 336(e) of the Internal Revenue Code of 1986, as amended (the “Code”) in connection with the spin-off). New BBX Capital will bear liability for any transfer taxes incurred in the spin-off.

Each of Parent and New BBX Capital will indemnify each other against any taxes to the extent paid by one party but allocated to the other party under the Tax Matters Agreement, or arising from any breach of its covenants thereunder, and related out-of-pocket costs and expenses.

Employee Matters Agreement

The Employee Matters Agreement sets out the respective rights, responsibilities and obligations of Parent and New BBX Capital with respect to the transfer of certain employees of the businesses of New BBX Capital and related matters, including benefit plans, terms of employment, retirement plans and other employment-related matters.

Under the Employee Matters Agreement, New BBX Capital or its subsidiaries will generally assume or retain responsibility as employer of employees whose duties primarily relate to their respective businesses as well as all obligations and liabilities with respect thereto.

Upon the spin-off, the employees of New BBX Capital or its subsidiaries, in their capacities as such, will cease to participate in any Parent employee benefit plans, and will instead be entitled to participate in employee benefit plans established or maintained by New BBX Capital or its subsidiaries. Employees who prior to the spin-off were covered by plans maintained by New BBX Capital subsidiaries will remain covered by such plans. New BBX Capital employees will be entitled to credit for prior service to the extent afforded under any Parent plans for purposes of eligibility to participate and vesting, except to the extent such credit would result in the duplication of benefits for the same period of service.

New BBX Capital may establish or designate welfare benefit plans and administer a group welfare benefits plan, in which the employees of New BBX Capital or its subsidiaries may participate immediately following the spin-off. In such case, New BBX Capital will use reasonable best efforts to ensure that such employees will be immediately eligible to commence participation in such plans without regard to any eligibility period, pre-existing condition, waiting period, or certain other restrictions.

Transition Services Agreement

The Transition Services Agreement generally sets out the respective rights, responsibilities and obligations of Parent and New BBX Capital with respect to the support services to be provided to one another after the spin-off, as may be necessary to ensure the orderly transition under the Separation and Distribution Agreement.

The Transition Services Agreement establishes a baseline charge for certain categories or components of services to be provided, which will be at cost unless the parties mutually agree to a different charge. The Transition Services Agreement will be effective upon the spin-off and will continue for a minimum term of one year, provided that after that year, Parent or New BBX Capital may terminate the Transition Services Agreement with respect to any or all services provided thereunder at any time upon thirty (30) days prior written notice to the other party. Either party may renew or extend the term of the Transition Services Agreement with respect to the provision of any service which has not been previously terminated.

Promissory Note

In connection with the spin-off, Parent will issue a $75 million promissory note in favor of New BBX Capital. Amounts outstanding under the note will accrue interest at a rate of 6% per annum. The note will require payments of interest only on a quarterly basis; provided however that interest payments may be deferred at the option of Parent, with interest on the entire outstanding balance thereafter to accrue at a cumulative, compounded rate of 8% per annum until such time as Parent is current on all accrued payments under the note, including deferred interest. All outstanding amounts under the note will become due and payable in five years or upon certain events.

Principal Executive Office

Following the spin-off, Parent and New BBX Capital will share office space at their principal executive offices located in Fort Lauderdale, Florida. The space is currently leased by Parent. It is expected that the lease will be assigned to New BBX Capital, with a portion of the office space to be subleased to Parent at a rate of approximately 20% of the rental payments under the lease (currently estimated to be approximately $200,000 per year), or New BBX Capital will pay or reimburse Parent for payments under the lease other than 20% of the rental payments under the lease to be borne by Parent.

Acceleration of Restricted Stock Awards

The vesting of all unvested restricted stock awards of Parent’s Class A Common Stock and Class B Common Stock was accelerated in contemplation of the spin-off. All of these restricted stock awards were held by the Company’s executive officers, and they covered a total of 488,503 shares of Parent’s Class A Common Stock and 528,484 shares of Parent’s Class B Common Stock in the aggregate. The shares are (and, prior to the vesting, were) considered outstanding and will participate in the spin-off on the same terms as all other outstanding shares of Parent’s common stock. Absent the vesting acceleration, the restricted stock awards would otherwise have been scheduled to vest between October 2020 and October 2023.

Trading of New BBX Capital’s Common Stock

Parent will own all of the outstanding shares of New BBX Capital’s common stock prior to the spin-off. Accordingly, there is no current trading market for New BBX Capital’s common stock. New BBX Capital is applying for its Class A Common Stock and Class B Common Stock to be quoted on the OTCQX market. However, there are no assurances that an active public market for New BBX Capital’s Class A Common Stock or Class B Common Stock will develop or be sustained after the distribution. If an active public market does not develop or is not sustained, it may be difficult for New BBX Capital’s shareholders to sell their shares of New BBX Capital’s Class A Common Stock or Class B Common Stock at a price that is attractive to them, or at all. New BBX Capital has requested the trading symbol “BBXT” for its Class A Common Stock and “BFCTB” for its Class B Common Stock.

Subject to the approval of New BBX Capital’s application for quotation of its Class A Common Stock and Class B Common Stock on the OTCQX Market, it is expected that trading may commence on a “when-issued” basis approximately two trading days before the record date. However, “when-issued” symbols are subject to action by FINRA. If “when-issued” trading is approved, FINRA has advised us that it will publish the addition of “when-issued” symbols on its Daily List in advance of the first “when-issued” trading date. “When-issued” trading refers to a transaction made conditionally because the security has been authorized but not yet issued. Generally, shares may trade on the OTCQX Market on a “when-issued” basis after they have been authorized but not yet formally issued, which is often initiated by the OTC Markets prior to the record date relating to the issuance of such shares. Any “when-issued” transactions in New BBX Capital’s common stock will be settled after the shares of New BBX Capital’s common stock have been issued to Parent’s shareholders. It is currently expected that, subject to FINRA approval, “when-issued” trading in New BBX Capital’s Class A Common Stock and Class B Common Stock will end and “regular way” trading will begin on the first trading day following the distribution date. “Regular way” trading refers to trading after a security has been issued.

We cannot predict the trading prices for New BBX Capital’s common stock when trading begins. Those prices will be determined by the marketplace. Prices at which trading in New BBX Capital’s common stock occurs may fluctuate significantly. Trading prices for New BBX Capital’s common stock may be influenced by many factors, including New BBX Capital’s operating results, investor perception of New BBX Capital, market fluctuations and general economic conditions. In addition, the stock market in general has experienced extreme price and volume fluctuations that have affected the performance of many stocks and that have often been unrelated or disproportionate to a company’s operating performance. These are just some of the factors that may adversely affect the market price of New BBX Capital’s common stock. See “Risk Factors” for further discussion of risks which may impact New BBX Capital and the trading price of its common stock.

Shares of New BBX Capital’s common stock received by Parent shareholders in connection with the spin-off will be freely transferable, except for shares received by persons who may be deemed to be New BBX Capital’s affiliates under the Securities Act. Shareholders of Parent that receive shares of New BBX Capital’s common stock in the spin-off and are deemed affiliates of New BBX Capital will be permitted to sell their shares of New BBX Capital’s common stock only pursuant to an effective registration statement under the Securities Act or in accordance with Rule 144 of the Securities Act or another exemption from the registration requirements of the Securities Act.

Trading of Parent’s Common Stock Between the Record Date and the Distribution Date

Parent’s Class A Common Stock is listed on the NYSE. It is anticipated that, beginning on the record date and continuing until the time of the distribution, there will be two markets in shares of Parent’s Class A Common Stock on the NYSE: a “regular-way” market and an “ex-distribution” market. Shares of Parent’s Class A Common Stock that trade on the “regular-way” market will trade with an entitlement to the shares of New BBX Capital’s Class A Common Stock to be distributed in the spin-off in respect thereof. Shares of Parent’s Class A Common Stock that trade on the “ex-distribution” market will trade without an entitlement to shares of New BBX Capital’s Class A Common Stock. Therefore, if a shareholder sells shares of Parent’s Class A Common Stock in the “regular-way” market on or prior to the time of the distribution, such shareholder will also be selling the right to receive the shares of New BBX Capital’s Class A Common Stock that such shareholder would have otherwise received in the spin-off in respect of the shares of Parent’s Class A Common Stock being sold. If a shareholder owns shares of Parent’s Class A Common Stock on the record date and sells those shares on the “ex-distribution” market on or prior to the time of the distribution, such shareholder will continue to be entitled to receive the shares of New BBX Capital’s Class A Common Stock which are distributed in the spin-off in respect of the shares of Parent’s Class A Common Stock being sold.

business day following the distribution date, then shareholders who hold shares of Parent’s Class B Common Stock on the record date and sell the shares on or prior to the distribution date will also be selling the right to receive the shares of New BBX Capital’s Class B Common Stock that such shareholder would have otherwise received in the spin-off in respect of the shares of Parent’s Class B Common Stock being sold.

Material U.S. Federal Income Tax Consequences of the Spin-Off

The following is a summary of the material U.S. federal income tax consequences of the spin-off to “U.S. holders” and “Non-U.S. holders” (in each case, as defined below). It addresses U.S. holders or Non-U.S. holders that will receive New BBX Capital’s common stock in the distribution. This summary deals only with U.S. holders or Non-U.S. holders that use the U.S. dollar as their functional currency and hold their Parent common stock as a capital asset. This summary does not address tax considerations applicable to investors subject to special rules, such as persons owning (either actually or constructively) 10% or more of Parent or New BBX Capital’s stock, certain financial institutions, dealers or traders, insurance companies, tax exempt entities, persons holding their shares as part of a hedge, straddle, conversion, constructive sale or other integrated transaction. It also does not address any U.S. state and local tax or non-U.S. tax considerations.

As used here, “U.S. holder” means a beneficial owner of Parent or New BBX Capital’s common stock (as applicable) that is, for U.S. federal income tax purposes, (i) a citizen or individual resident of the United States, (ii) a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia, (iii) a trust subject to the control of a U.S. person and the primary supervision of a U.S. court or (iv) an estate the income of which is subject to U.S. federal income tax without regard to its source. For purposes of this discussion, a “Non-U.S. holder” is a beneficial owner of Parent or New BBX Capital’s common stock (as applicable) that is, for U.S. federal income tax purposes, an individual, a corporation, a trust or an estate that is not a U.S. holder.

The tax consequences to a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) receiving New BBX Capital common stock in the spin-off generally will depend on the status of the partnership and the activities of its partners. Partnerships holding Parent common stock should consult their own tax advisors about the U.S. federal income tax consequences to their partners from receiving New BBX Capital common stock in the spin-off.

Tax Classification of the Spin-off in General

The spin-off will not qualify for tax-free treatment under Section 355 of the Code and, accordingly, shareholders of Parent will be treated as having received a distribution of property that does not qualify for tax-free treatment in connection with their receipt of shares of New BBX Capital’s common stock in connection with the spin-off. The amount of that distribution will be equal to the fair market value of the New BBX Capital common stock received. We believe that a reasonable approach to determine the fair market value of the shares of New BBX Capital’s Class A Common Stock or Class B Common Stock received would be to use the volume-weighted average price of New BBX Capital’s common stock on the first full trading day following the distribution. We believe this is a reasonable approach because the rights of New BBX Capital’s Class A Common Stock and Class B Common Stock (other than voting rights, as described above) are substantially the same and New BBX Capital’s Class B Common Stock will be convertible into shares of New BBX Capital’s Class A Common Stock on a share-for-share basis in the holder’s discretion, however there is expected to be significantly less trading volume in the shares of New BBX Capital’s Class B Common Stock as compared to New BBX Capital’s Class A Common Stock.

To the extent, if any, that New BBX Capital’s market value at the time of the distribution is greater than Parent’s tax basis in New BBX Capital, New BBX Capital will indemnify Parent for tax on gain taken into account as a result of the distribution of New BBX Capital’s common stock, determined as if no net operating losses or other tax attributes were available to shelter that gain and computed at an assumed tax rate of 25%. If

Parent recognizes gain on the distribution, so that New BBX Capital has an indemnity obligation, Parent and New BBX Capital expect to make an election for U.S. federal income tax purposes that would enable New BBX Capital to increase the basis of its assets to New BBX Capital’s market value at the time of the distribution, thereby increasing the amount of amortization or depreciation deductions allowable to New BBX Capital after the distribution of New BBX Capital’s common stock. To the extent, however, that New BBX Capital’s market value at the time of the distribution is less than Parent’s tax basis in New BBX Capital, Parent will not recognize any loss, but Parent and New BBX Capital expect to make an election that is intended to prevent a reduction to fair market value of New BBX Capital’s tax basis in its assets (or in the assets of partnerships in which it holds an interest) in order to preserve New BBX Capital’s ability to claim the amortization or depreciation deductions that would have been available if the separation had not occurred. There can be no assurance, however, that such a basis reduction will not be required.

U.S. Holders

The distribution of New BBX Capital common stock should be treated as ordinary dividend income to the extent considered paid out of Parent’s current year or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of both current year and accumulated earnings and profits will be treated as a non-taxable return of capital, which reduces basis, to the extent of the holder’s basis in Parent’s common stock and thereafter as capital gain. To the extent that any such amount is treated as a dividend, corporate U.S. holders should generally be eligible for the dividends received deduction and non-corporate U.S. holders should generally qualify for reduced rates applicable to qualified dividend income, assuming, in each case, that a minimum holding period and certain other generally applicable requirements are satisfied. U.S. holders will take a tax basis in their New BBX Capital common stock equal to its fair market value on the date of receipt.

Parent will not be able to determine the amount of the distribution (if any) that will be treated as a dividend until after the close of the taxable year of the spin-off, because its current year earnings and profits will be calculated based on its income for the entire taxable year in which the distribution occurs. In addition to Parent’s operating results for that year, which will not include the earnings and expenses of the business conducted by New BBX Capital after the separation, other factors that are not knowable at this time will affect Parent’s earnings and profits for the taxable year of the spin-off. Those factors include the extent, if any, to which the value of New BBX Capital at the time of the spin-off exceeds Parent’s tax basis in New BBX Capital, resulting in recognition of a gain that will increase Parent’s earnings and profits. Parent currently intends to cause shareholders to be provided with a determination of the portion of the distribution constituting a taxable dividend as soon as practicable after its earnings and profits for the taxable year in which the distribution occurs are calculated. The information will be based on Parent’s estimates and information available at the time that such determination is provided to shareholders, and there is no assurance that the forms provided and returns filed will not need to be amended based on changes in Parent’s estimates or subsequent events or information. Further, this information may not be available until after U.S. holders file their income tax returns for that taxable year. Accordingly, such U.S. holders may need to file amended tax returns to reflect the amount of the taxable dividend as finally determined.

To the extent that the distribution of New BBX Capital common stock constitutes an “extraordinary dividend” with respect to a particular U.S. holder, special rules may apply. In general, a dividend constitutes an “extraordinary dividend” if the amount of the dividend exceeds 10% of that U.S. holder’s tax basis in its stock. For purposes of this calculation, only the portion of a distribution treated as a dividend, rather than the full amount of the distribution, is taken into account. If the portion (if any) of the distribution treated as a dividend constitutes an extraordinary dividend to a corporate U.S. holder that both (i) claimed a dividends-received deduction with respect to the distribution and (ii) held its Parent common stock for two years or less, such U.S. holder will reduce its tax basis in its Parent common stock (but not below zero) by an amount determined by reference to the dividends-received deduction claimed. If any corporate U.S. holder’s basis would be reduced below zero as a result of these rules, any excess would be treated as capital gain. In addition, if the portion (if any) of the distribution treated as a dividend qualifies as an extraordinary dividend to a non-corporate U.S. holder

who had claimed a reduced rate for qualified dividend income on the distribution, such non-corporate U.S. holder may be required to treat a portion of any loss on a subsequent sale of its Parent common stock as long-term capital loss, regardless of its actual holding period.

U.S. holders should consult with their tax advisors regarding the possible applicability and effects of the extraordinary dividend provisions, including the possible availability of an election to substitute the fair market value of the Parent common stock for its tax basis for purposes of determining if the portion (if any) of the distribution treated as a dividend constitutes an extraordinary dividend. Such election will generally be available if the fair market value of the Parent common stock as of the day before the ex-dividend date is established to the satisfaction of the Secretary of the Treasury.

Dividends and capital gains earned by non-corporate U.S. holders may be subject to the 3.8% Medicare tax on net investment income.

Non-U.S. Holders

For Non-U.S. holders, the characterization of the distribution for U.S. federal income tax purposes as a dividend, a return of capital or a capital gain will be determined in the manner described above under “U.S. holders.”

In the case of a Non-U.S. holder, the portion (if any) of the distribution treated as a dividend for U.S. federal income tax purposes will generally be subject to U.S. federal gross-basis income tax at a rate of 30%, or a lower rate specified in an applicable income tax treaty. This tax is generally collected by way of withholding. Because the amount of the distribution (if any) constituting a dividend for U.S. federal income tax purposes will not be known at the time of the distribution, for purposes of determining required withholding, Parent or its withholding agent is generally required by U.S. Internal Revenue Service (“IRS”) regulations to treat the entire amount of the distribution as a dividend, and withhold tax from that amount, unless it elects instead to withhold based on a reasonable estimate of Parent’s earnings and profits. Thus, Parent or another withholding agent will withhold some portion of the New BBX Capital common stock otherwise distributable to a Non-U.S. holder to satisfy its obligation to withhold tax, except to the extent it estimates that the amount of the distribution will exceed its earnings and profits. To the extent it is required to withhold tax, Parent or its withholding agent may sell the portion of New BBX Capital common stock otherwise distributable to Non-U.S. holders needed to pay that tax, together with associated expenses. Non-U.S. holders would generally be eligible to obtain a refund of any excess amounts withheld (which would be the entire amount withheld to pay tax if Parent determines, after the end of the taxable year of the spin-off that it had no earnings and profits) by filing an appropriate claim for refund with the IRS. To receive the benefit of a reduced treaty rate, a Non-U.S. holder must furnish to Parent or its paying agent a valid IRS Form W-8BEN, W-8BEN-E or other applicable form certifying such holder’s qualification for the reduced rate. This certification must be provided to Parent or its paying agent prior to the distribution of New BBX Capital common stock.

Dividends that are treated as “effectively connected” with a U.S. trade or business conducted by a Non-U.S. holder (and, if an applicable income tax treaty so provides, are also attributable to a U.S. permanent establishment of such Non-U.S. holder) are not subject to the withholding tax, provided the Non-U.S. holder satisfies certain certification and disclosure requirements. Instead, such dividends, net of specified deductions and credits, are taxed at the same graduated U.S. federal income tax rates applicable to U.S. persons. Any such effectively connected dividends received by a Non-U.S. holder that is a corporation may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or such lower rate as specified by an applicable income tax treaty.

In addition, any capital gains recognized (including capital gains arising from the amount of the distribution exceeding current and accumulated earnings and profits as well as basis in such Non-U.S. holder’s Parent common stock) may be subject to U.S. net income tax (and in respect of corporate non-U.S. holders, branch

profits tax) if the gain is effectively connected with a trade or business of the Non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base of the Non-U.S. holder within the United States). Additionally, a Non-U.S. holder that is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and meets certain other requirements will be subject to a flat 30% tax on the amount of capital gains together with certain other U.S. source capital gains realized during such year, to the extent that they exceed certain U.S. source capital losses realized during such year.

Tax Considerations to U.S. Holders in Respect of Ownership and Disposition of New BBX Capital Common Stock

Dividends

Any dividends paid by New BBX Capital out of its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally will be taxable to a U.S. holder as ordinary dividend income. Corporate U.S. holders should generally be eligible for the dividends-received deduction and non-corporate U.S. holders should generally qualify for reduced rates applicable to qualified dividend income, assuming, in each case, that a minimum holding period and certain other generally applicable requirements are satisfied. Dividends in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. holder’s basis in New BBX Capital’s common stock and thereafter as capital gain. U.S. holders should consult their own tax advisors with respect to the appropriate U.S. federal income tax treatment of any dividend received from New BBX Capital. Dividends received by a non-corporate U.S. holder may be subject to a 3.8% Medicare tax on net investment income.

Sales or Other Dispositions of New BBX Capital Common Stock

A U.S. holder will recognize capital gain or loss on the sale or other disposition of New BBX Capital common stock in an amount equal to the difference between the U.S. holder’s adjusted tax basis in its New BBX Capital common stock and the amount realized from the disposition. Any gain or loss on a sale or other disposition of New BBX Capital common stock generally will be treated as arising from U.S. sources and will be long-term capital gain or loss if the holder has held our common stock for more than one year. Deductions for capital losses are subject to limitations. Any gain recognized by a non-corporate U.S. holder may be subject to a 3.8% Medicare tax on net investment income.

Tax Considerations to Non-U.S. Holders in Respect of Ownership and Disposition of New BBX Capital Common Stock

Dividends

Any dividends paid on New BBX Capital common stock that are characterized as dividends paid to a Non-U.S. holder generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be provided by an applicable income tax treaty. To receive the benefit of a reduced treaty rate, a Non-U.S. holder must furnish to New BBX Capital or its paying agent a valid IRS Form W-8 (or applicable successor form) certifying such holder’s qualification for the reduced rate. This certification must be provided to New BBX Capital or its paying agent prior to the payment of dividends and must be updated periodically. If a Non-U.S. holder who qualifies for a reduced treaty rate but does not timely provide New BBX Capital or the payment agent with the required certification, such Non-U.S. holder may be entitled to a credit against their U.S. federal income tax liability or a refund of the tax withheld, which the Non-U.S. holder may claim by filing the appropriate claim for refund with the IRS.

Dividends that are treated as “effectively connected” with a trade or business conducted by a Non-U.S. holder within the United States (and, if an applicable income tax treaty so provides, are also attributable to a U.S. permanent establishment of such Non-U.S. holder) are not subject to the withholding tax, provided the Non-U.S.

holder satisfies certain certification and disclosure requirements. Instead, such dividends, net of specified deductions and credits, are taxed at the same graduated U.S. federal income tax rates applicable to U.S. persons. To the extent a dividend is effectively connected with a U.S. trade or business, non-corporate Non-U.S. holders may be eligible for taxation at reduced U.S. federal tax rates applicable to qualified dividend income. Any such effectively connected dividends received by a Non-U.S. holder that is a corporation may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or such lower rate as specified by an applicable income tax treaty.

Sales or Other Dispositions of New BBX Capital Common Stock

Subject to the discussions under “Information Reporting and Backup Withholding” and “FATCA,” below, a Non-U.S. holder will generally not be subject to any U.S. federal income tax or withholding tax on any gain realized upon such holder’s sale or other disposition of New BBX Capital common stock. Gain on sale of New BBX Capital common stock may be subject to U.S. net income tax (and in respect of corporate non-U.S. holders, branch profits tax) if the gain is effectively connected with a trade or business of the Non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base of the Non-U.S. holder within the United States). Additionally, a Non-U.S. holder that is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and meets certain other requirements will be subject to a flat 30% tax on the amount of gain derived from the sale that, together with certain other U.S. source capital gains realized during such year, to the extent that they exceed certain U.S. source capital losses realized during such year.

FATCA

Sections 1471-1474 of the Code (commonly known as “FATCA”) impose a 30% withholding tax on certain types of payments (including dividends by Parent and New BBX Capital) made to “foreign financial institutions” and certain other non-U.S. entities unless (i) the foreign financial institution undertakes certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner. If any payee, whether or not it is a beneficial owner or an intermediary with respect to a payment, is a foreign financial institution that is not subject to special treatment under certain intergovernmental agreements, it must enter into an agreement with the U.S. Treasury requiring, among other things, that it undertakes to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent them from complying with these reporting or other requirements. Withholding under this legislation on withholdable payments to foreign financial institutions and certain non-financial foreign entities also apply with respect to the gross proceeds of a disposition of New BBX Capital common stock (which will include sales, redemptions and returns on capital). Failure by a Non-U.S. holder (or any non-U.S. intermediary through which it will hold its stock) that is subject to FATCA to comply with its certification and reporting requirements, or properly document its status as a person not subject to FATCA withholding, could result in withholding at a rate of 30% on withholdable payments made to the Non-U.S. holder. Non-U.S. holders or U.S. holders owning Parent or New BBX Capital common stock through a non-U.S. intermediary should consult their tax advisors regarding this legislation.

Information Reporting and Backup Withholding

In general, information reporting requirements may apply to dividends, sales proceeds or other amounts paid to U.S. holders and Non-U.S. holders, unless an exemption applies. Backup withholding tax may apply to amounts subject to reporting if the holder fails to provide an accurate taxpayer identification number or fails to report all interest and dividends required to be shown on its U.S. federal income tax returns. A U.S. holder or Non-U.S. holder can claim a credit against its U.S. federal income tax liability for the amount of any backup withholding tax and a refund of any excess, provided that all required information is timely provided to the IRS. U.S. holders and Non-U.S. holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for establishing an exemption.

THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR SHAREHOLDER. EACH SHAREHOLDER IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF THE SPIN-OFF IN LIGHT OF THE SHARHOLDER’S OWN CIRCUMSTANCES.

Holders

Currently, New BBX Capital is a wholly-owned subsidiary of Parent and as such it only has one shareholder, Parent. Upon completion of the spin-off, it is anticipated that New BBX Capital will have 111 record holders of 15,624,091 outstanding shares of New BBX Capital’s Class A Common Stock and 51 record holders of 3,693,596 outstanding shares of New BBX Capital’s Class B Common Stock. The outstanding share amounts set forth above is based on the number of shares of Parent’s Class A Common Stock and Class B Common Stock expected to be outstanding on the record date and, as previously described, reflects the one-for-five reverse split of Parent’s Class A Common Stock and Class B Common Stock effected on July 22, 2020.

Reason for Furnishing this Information Statement

We are furnishing this information statement to you, as a shareholder of Parent entitled to receive shares of New BBX Capital’s common stock in the spin-off, for the sole purpose of providing you with information about the spin-off and New BBX Capital. This information statement is not, and you should not consider it, an inducement or encouragement to buy, hold or sell any securities of Parent or New BBX Capital. We believe that the information in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither Parent nor New BBX Capital undertakes any obligation to update the information except as may be required by law.

DIVIDEND POLICY

Following the spin-off, dividends by New BBX Capital will be at the discretion of New BBX Capital’s Board of Directors based on New BBX Capital’s financial condition, results of operations and capital requirements, and considerations that New BBX Capital’s Board of Directors considers relevant. In addition, the terms of agreements governing New BBX Capital’s indebtedness, whether existing at the time of the spin-off or subsequently entered into, may limit or prohibit dividend payments. It is currently expected that, for the foreseeable future following the spin-off, New BBX Capital will retain any earnings for use in the operation of its business. Accordingly, New BBX Capital does not anticipate paying any cash dividends on its common stock for the foreseeable future.

CAPITALIZATION

The following table presents our cash and cash equivalents and capitalization as of June 30, 2020 on a historical basis and on a pro forma basis to give effect to the spin-off and the related transactions and events described in this information statement as if the spin-off and such related transactions and events had occurred on June 30, 2020. We are providing the following capitalization table for informational purposes only. You should not construe it as indicative of our capitalization or financial condition had the spin-off and the related transactions and events been completed on the date assumed. The capitalization table below also may not reflect the capitalization or financial condition that would have resulted had New BBX Capital been operated as a separate company apart from Parent’s organization at that date or New BBX Capital’s future capitalization or financial condition. You should read the table below in conjunction with the financial and other information included in the sections of this information statement entitled “Unaudited Pro Forma Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and with New BBX Capital’s historical financial statements and accompanying notes included elsewhere in this information statement.


	June 30, 2020
	Actual		Pro Forma
(dollars in thousands)
Cash
Cash and cash equivalents	$	96,537		96,537

Capitalization:

Debt Outstanding
Notes payable and lines of credit		41,614		41,614

Redeemable noncontrolling interest		1,759		1,759

Equity
Preferred stock of $0.01 par value: authorized 10,000,000 shares
Class A Common Stock of $0.01 par value; authorized 30,000,000 shares: none issued and outstanding, 15,624,091 pro forma		—		156
Class B Common Stock of $0.01 par value; authorized 4,000,000 shares: none issued and outstanding, 3,693,596 pro forma		—		37
Additional paid-in-capital		—		317,739	(A)
Parent’s net investment		242,932		—
Accumulated other comprehensive income		1,203		1,203

Parent equity/total stockholders’ equity		244,135		319,135
Noncontrolling interests		278		278

Total Equity		244,413		319,413

Total Capitalization	$	287,786		362,786

(A)	In connection with the spin-off, Parent will issue a $75 million promissory note in favor of New BBX Capital.

SELECTED HISTORICAL FINANCIAL INFORMATION

The following table presents selected historical financial data for the periods indicated below. New BBX Capital derived the selected historical statement of operations data for the six months ended June 30, 2020 and 2019 and the balance sheet data as of June 30, 2020 from its unaudited combined carve-out financial statements included elsewhere in this information statement. New BBX Capital derived the selected historical statement of financial condition data as of December 31, 2017 from its unaudited statement of financial condition that is not included in this information statement. New BBX Capital derived the selected historical financial data as of December 31, 2019 and 2018, and for each of the years in the three-year period ended December 31, 2019, from its audited combined carve-out financial statements included elsewhere in this information statement. In management’s opinion, the unaudited combined carve-out financial statements have been prepared on the same basis as the audited combined carve-out financial statements and include all adjustments, consisting only of normal recurring adjustments and allocations, necessary for a fair presentation of the information for the periods presented.

In presenting the financial data in conformity with GAAP, New BBX Capital is required to make estimates and assumptions that affect the amounts reported. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” included elsewhere in this information statement for a detailed discussion of the accounting policies that management believes require subjective and complex judgments that could potentially affect reported results.

You should read the selected historical financial data in conjunction with New BBX Capital’s audited combined carve-out financial statements and unaudited combined carve-out financial statements included elsewhere in this information statement and the financial and other information contained in the sections of this information statement entitled “Unaudited Pro Forma Financial Statements,” “Capitalization” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


	For the Six Months Ended						For the Years Ended
	June 30,						December 31,
	2020			2019			2019			2018			2017
	(in thousands)
Statements of Operations Data:
Total revenues	$	74,785			105,136			203,724			208,565			152,036
Total cost and expenses		119,896			107,000			213,227			226,126			178,068
Equity in earnings of unconsolidated real estate joint ventures		696			8,742			37,898			14,194			12,541
Other income		111			554			665			277			220
Foreign exchange gain (loss)		272			(24	)		(75	)		68			(193	)

(Loss) income before income taxes		(44,032	)		7,408			28,985			(3,022	)		(13,464	)
Benefit (provision) for income taxes ⁽¹⁾		9,214			(2,148	)		(8,334	)		(2,865	)		(1,306	)

Net (loss) income from continuing operations		(34,818	)		5,260			20,651			(5,887	)		(14,770	)
Discontinued operations		(74	)		(3,523	)		(7,138	)		(3,580	)		(1,339	)

Net (loss) income		(34,892	)		1,737			13,513			(9,467	)		(16,109	)
Less: Net loss attributable to noncontrolling interests		4,312			68			224			266			20

Net (loss) income attributable to Parent	$	(30,580	)		1,805			13,737			(9,201	)		(16,089	)


	As of June 30,		As of December 31,
	2020		2019		2018		2017
	(in thousands)
Statements of Financial Condition Data:
Total assets (2)	$	416,797		361,507		309,952		315,170
Borrowings (3)		41,614		42,736		37,496		43,920
Parent’s equity		242,932		179,681		235,415		237,259
Accumulated other comprehensive income		1,203		1,554		1,216		1,785
Noncontrolling interests		278		1,001		899		(238	)
Total equity (2)		244,413		182,236		237,530		238,806

(1)

The provision for income taxes for the year ended December 31, 2017 was the result of the reduction in New BBX Capital’s net deferred income tax asset associated with the enactment of the Tax Cuts and Jobs Act which permanently lowered the corporate income tax rate from 35% to 21%. The provision for income taxes for the year ended December 31, 2018 was the result of nondeductible executive compensation.

(2)

Total assets as of June 30, 2020 and December 31, 2019 includes $79.9 million and $87.1 million of operating lease assets, while total assets in the prior periods presented do not include operating lease assets. Total equity as of December 31, 2019 includes a cumulative effect adjustment of $2.2 million, net of income taxes, associated with a right-of-use asset impairment loss recognized upon the adoption of the new lease accounting standard on January 1, 2019. Based on the transition guidance elected by New BBX Capital upon the adoption of the new lease accounting standard, comparable prior periods are reported in accordance with Topic 840, which did not require the recognition of right-of-use assets and lease liabilities related to operating leases. See Note 2—Summary of Significant Accounting Policies to New BBX Capital’s audited combined carve-out financial statements included elsewhere in this information statement.

(3)

Borrowings consist of community development bonds, revolving credit facilities and term loans.

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The unaudited pro forma combined financial statements set forth below have been derived from New BBX Capital’s historical annual and interim financial statements, including its unaudited statement of financial condition as of June 30, 2020, its unaudited statement of operations for the six months ended June 30, 2020, and its audited statement of operations for the year ended December 31, 2019, which are included elsewhere in this information statement. New BBX Capital’s historical financial statements include allocations of certain expenses from Parent, including expenses for costs related to functions such as treasury, tax, accounting, legal, internal audit, human resources, public and investor relations, general management, shared information technology systems, corporate governance activities, executive services and centrally managed employee benefit arrangements.

The unaudited pro forma combined financial statements give effect to the following transaction accounting adjustments:

•

the $75 million promissory note expected to be made by Parent in favor of New BBX Capital in connection with the spin-off; and

•

New BBX Capital’s anticipated post-distribution capital structure, including the issuance of approximately 15,624,091 shares of New BBX Capital’s Class A Common Stock to holders of Parent’s Class A Common Stock and approximately 3,693,596 shares of New BBX Capital’s Class B Common Stock to holders of Parent’s Class B Common Stock (in each case, based upon the number of outstanding shares of Parent’s Class A Common Stock or Class B Common Stock, as applicable, on June 30, 2020, the one-for-five reverse split of Parent’s Class A Common Stock and Class B Common Stock effected on July 22, 2020, the acceleration of the vesting of restricted stock awards of Parent’s Class A Common Stock and Class B Common Stock previously granted to Parent’s executives, and a distribution ratio of one share of New BBX Capital’s Class A Common Stock for each share of Parent’s Class A Common Stock and one share of New BBX Capital’s Class B Common Stock for each share of Parent’s Class B Common Stock).

The unaudited pro forma statements of operations for the six months ended June 30, 2020 and the year ended December 31, 2019 give effect to the spin-off and the related transactions described above as if they had occurred on January 1, 2019. The unaudited pro forma balance sheet as of June 30, 2020 gives effect to the spin-off and the related transactions described above as if they had occurred on such date.

In management’s opinion, the unaudited pro forma combined financial statements reflect adjustments necessary to present fairly New BBX Capital’s pro forma results and financial position as of and for the periods indicated. The pro forma adjustments are based on currently available information and assumptions management believes are, under the circumstances and given the information available at this time, reasonable, directly attributable to New BBX Capital’s separation from Parent, and reflect changes necessary to reflect New BBX Capital’s financial condition and results of operations as if New BBX Capital was a stand-alone entity.

The unaudited pro forma combined financial statements are for illustrative and informational purposes only and are not intended to represent what New BBX Capital’s results of operations or financial position would have been had the spin-off and related transactions occurred on the dates assumed. The unaudited pro forma combined financial statements also should not be considered indicative of New BBX Capital’s future results of operations or financial position as a separate, publicly-traded company.

Parent currently provides many corporate functions on New BBX Capital’s behalf, including those described above, and New BBX Capital’s historical financial statements include allocations of these expenses from Parent. We believe that these allocations are representative of costs that New BBX Capital would have

incurred as a separate stand-alone publicly-traded company. However, future costs that New BBX Capital may incur as a stand-alone publicly-traded company are uncertain and may be higher or lower than the historical allocations in the unaudited pro forma combined financial statements.

Costs related to the spin-off prior to its completion have been and will be borne by Parent. These costs include, but are not limited to, the recognition in contemplation of the spin-off of compensation expense related to the acceleration of the vesting of restricted stock awards previously granted to Parent’s executives (for which unrecognized compensation expenses were $19.8 million as of June 30, 2020) and the cost of the expected cash payout to settle Parent’s long-term incentive program for 2020 (which was historically paid primarily in stock awards). Accordingly, these costs were not allocated to New BBX Capital or otherwise reflected in New BBX Capital’s financial statements, including New BBX Capital’s historical and pro forma statements of operations contained herein.

The unaudited pro forma combined financial statements should be read in conjunction with New BBX Capital’s historical financial statements and accompanying notes included elsewhere in this information statement and the financial and other information contained in the section of this information statement entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

NEW BBX CAPITAL

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2020

(In thousands, except per share data)


	Historical			Transaction Accounting Adjustments			Autonomous Entity Adjustments				Pro Forma
Revenues:
Trade sales	$	63,936			—			—				63,936
Sales of real estate inventory		9,278			—			—				9,278
Interest income		199			2,250	(B)		—				2,449
Net losses on sales of real estate assets		(34	)		—			—				(34	)
Other revenue		1,406			—			—				1,406

Total revenues		74,785			2,250			—				77,035

Costs and Expenses:
Cost of trade sales		52,173			—			—				52,173
Cost of real estate inventory sold		6,106			—			—				6,106
Interest expense		—			—			—				—
Recoveries from loan losses, net		(5,037	)		—			—				(5,037	)
Impairment losses		30,740			—			—				30,740
Selling, general and administrative expenses		35,914			—			—				35,914

Total costs and expenses		119,896			—			—				119,896

Operating profits (losses)		(45,111	)		2,250			—				(42,861	)

Equity in net earnings of unconsolidated real estate joint ventures		696			—			—				696
Other income		111			—			—				111
Foreign exchange gain		272			—			—				272

Loss from continuing operations before income taxes		(44,032	)		2,250			—				(41,782	)
Benefit (provision) for income taxes		9,214			(471	) (C)		—				8,743

Net Loss from continuing operations		(34,818	)		1,779			—				(33,039	)
Less: Net loss attributable to noncontrolling interests		4,312			—			—				4,312

Net Loss from continuing operations attributable to parent/shareholders	$	(30,506	)		1,779			—				(28,727	)

Earnings per common share
Basic									(D	)		(1.49	)
Diluted									(D	)		(1.49	)

Weighted-average common shares outstanding
Basic									(E	)		19,261
Diluted									(E	)		19,261

See accompanying notes to unaudited pro forma combined financial statements

NEW BBX CAPITAL

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2019

(In thousands, except per share data)


	Historical			Transaction Accounting Adjustments			Autonomous Entity Adjustments				Pro Forma
Revenues:
Trade sales	$	180,319			—			—				180,319
Sales of real estate inventory		5,049			—			—				5,049
Interest income		811			4,500	(B)		—				5,311
Net gains on sales of real estate assets		13,616			—			—				13,616
Other revenue		3,929			—			—				3,929

Total revenues		203,724			4,500			—				208,224

Costs and Expenses:
Cost of trade sales		125,735			—			—				125,735
Cost of real estate inventory sold		2,643			—			—				2,643
Interest expense		433			—			—				433
Recoveries from loan losses, net		(5,428	)		—			—				(5,428	)
Impairment losses		189			—			—				189
Selling, general and administrative expenses		89,655			—			—				89,655

Total costs and expenses		213,227			—			—				213,227

Operating profits (losses)		(9,503	)		4,500			—				(5,003	)

Equity in net earnings of unconsolidated real estate joint ventures		37,898			—			—				37,898
Other income		665			—			—				665
Foreign exchange loss		(75	)		—			—				(75	)

Income from continuing operations before income taxes		28,985			4,500			—				33,485
(Provision) for income taxes		(8,334	)		(1,104	) (C)		—				(9,438	)

Net income from continuing operations		20,651			3,396			—				24,047
Less: net loss attributable to noncontrolling interests		224			—			—				224

Net income from continuing operations attributable to parent/shareholders	$	20,875			3,396			—				24,271

Earnings per common share
Basic									(D	)		1.26
Diluted									(D	)		1.26

Weighted-average common shares outstanding
Basic									(E	)		19,276
Diluted									(E	)		19,276

See accompanying notes to unaudited pro forma combined financial statements

NEW BBX CAPITAL

UNAUDITED PRO FORMA STATEMENT OF FINANCIAL CONDITION

AS OF JUNE 30, 2020

(In thousands)


	Historical		Transaction Accounting Adjustments			Autonomous Entity Adjustments		Pro Forma
ASSETS
Cash and cash equivalents	$	96,537		—			—		96,537
Restricted cash		529		—			—		529
Trade accounts receivable, net		15,157		—			—		15,157
Trade inventory		20,501		—			—		20,501
Real estate		63,897		—			—		63,897
Investments in unconsolidated real estate joint ventures		63,775		—			—		63,775
Property and equipment, net		28,990		—			—		28,990
Goodwill		14,864		—			—		14,864
Intangible assets, net		6,392		—			—		6,392
Operating lease assets		79,853		—			—		79,853
Note receivable from parent		—		75,000	(A)		—		75,000
Due from Parent		683		—			—		683
Other assets		15,614		—			—		15,614
Deferred tax asset, net		9,944		—			—		9,944
Discontinued operations total assets		61		—			—		61

Total assets	$	416,797		75,000			—		491,797

LIABILITIES AND EQUITY
Liabilities:
Accounts payable		11,814		—			—		11,814
Accrued expenses		14,440		—			—		14,440
Other liabilities		6,597		—			—		6,597
Operating lease liabilities		96,119		—			—		96,119
Notes payable and other borrowings		41,614		—			—		41,614
Discontinued operations total liabilities		41		—			—		41

Total liabilities		170,625		—			—		170,625

Redeemable noncontrolling interest		1,759		—			—		1,759
Equity:
Parent’s equity		242,932		75,000	(A)		—		317,932
Accumulated other comprehensive income		1,203		—			—		1,203
Noncontrolling interests		278		—			—		278

Total equity		244,413		75,000			—		319,413

Total liabilities and equity	$	416,797		75,000			—		491,797

See accompanying notes to unaudited pro forma combined financial statements

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

A.	Pursuant to the Separation and Distribution Agreement between Parent and New BBX Capital, Parent will issue a $75 million promissory note in favor of New BBX Capital.

B.	Adjustment represents interest income from Parent’s $75 million promissory note that bears interest at 6.0% per annum.

C.	Represents the provision for income taxes based on the estimated effective income tax rate of 20.9% for the six months ended June 30, 2020 and 24.5% for the year ended December 31, 2019.

D.	Pro forma basic and diluted earnings (loss) per share were calculated based on income (loss) from continuing operations attributable to shareholders divided by the weighted average pro forma basic common shares and diluted common shares, respectively, outstanding for the period.

Pro forma weighted average basic and diluted common shares outstanding for the six months ended June 30, 2020 and the year ended December 31, 2019 reflect Parent’s historical basic weighted average shares outstanding for the respective periods adjusted for the 1 for 5 reverse stock split effected by Parent and the accelerated vesting of outstanding restricted stock awards as of January 1, 2019 (or when the restricted stock awards were granted if the grant date for the applicable award was subsequent to January 1, 2019).

BUSINESS

You should read the following business description in conjunction with New BBX Capital’s audited and unaudited combined carve-out financial statements and related notes appearing elsewhere in this information statement.

Company Overview

New BBX Capital is a Florida-based diversified holding company. Prior to the spin-off, New BBX Capital will be converted into a Florida corporation. New BBX Capital’s principal holdings include (i) BBX Capital Real Estate, which is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures, owns a 50% equity interest in The Altman Companies, a developer and manager of multifamily apartment communities, and manages the legacy assets retained in connection with Parent’s sale of BankAtlantic in 2012, including a portfolio of loans receivable, real estate properties and judgments, (ii) BBX Sweet Holdings, which is engaged in the ownership and management of companies in the confectionery industry, including IT’SUGAR, a retailer of special candy products, including bulk candy, candy in giant packaging and novelty items, and (iii) Renin, which is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products.

The Company’s goal is to build long-term shareholder value. Since many of the Company’s assets do not generate income on a regular or predictable basis, the Company’s objective is long-term growth as measured by increases in book value and intrinsic value over time. In addition, the Company’s goal is to streamline its investment verticals so that the Company can be more easily analyzed and followed by the marketplace.

The Company regularly reviews the performance of its investments and, based upon economic, market, and other relevant factors, considers transactions involving the sale or disposition of all or a portion of its assets, investments, or subsidiaries.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the impact of the COVID-19 pandemic on the operations and results of our businesses and investments.

Our Businesses

BBX Capital Real Estate

BBX Capital Real Estate 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 communities, and commercial properties located primarily in Florida. In addition, it owns a 50% equity interest in The Altman Companies, a developer and manager of multifamily apartment communities, and manages the legacy assets acquired in connection with Parent’s sale of BankAtlantic in 2012, including a portfolio of loans receivable, real estate properties and judgments.

BBX Capital Real Estate’s strategy is focused on:

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identifying and acquiring or developing real estate, including multifamily apartment and townhome communities, single-family master-planned communities, and commercial properties; and

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

Although BBX Capital Real Estate has historically focused on the monetization of the legacy asset portfolio through the collection or sale of loans receivable and the development or sale of foreclosed real estate properties,

it largely completed the monetization of the portfolio following the sale of several significant real estate properties during 2019. As a result, BBX Capital Real Estate is currently focused on leveraging The Altman Companies, as well as BBX Capital Real Estate’s relationships with third party developers, to identify new development opportunities with the goal of building a diversified portfolio of real estate investments that generate profits. In addition to the development and sale of multifamily apartment communities, these investment opportunities may also include the development of multifamily apartment communities that will be owned over a long-term hold period and the acquisition of existing multifamily apartment communities which can be renovated and re-leased pursuant to a “value add” strategy, as well as the pursuit of possible investment opportunities in additional geographic locations. Furthermore, while BBX Capital Real Estate’s investments in multifamily apartment communities sponsored by The Altman Companies primarily involve investing in the managing member in the joint ventures that are formed to invest in such projects, BBX Capital Real Estate has in the past and may in the future consider opportunistically making debt or equity investments in one or more of such projects in lieu of seeking funding from unaffiliated third parties.

Investments

BBX Capital Real Estate currently holds investments in a diverse portfolio of real estate developments, including multifamily rental apartment communities, single-family master-planned for sale communities, mixed-used properties, and other legacy assets. The following provides a description of certain of these investments.

Multifamily Apartment Developments—The Altman Companies

The Altman Companies

In November 2018, BBX Capital Real Estate acquired a 50% equity interest in The Altman Companies, a joint venture between BBX Capital Real Estate and Joel Altman engaged in the development, construction, and management of multifamily apartment communities, for cash consideration of $14.6 million, including $2.3 million in transaction costs. The Company accounts for this investment under the equity method of accounting. The Altman Companies is a fully integrated platform engaged in all aspects of the development process through its ownership of various operating companies that were previously owned and operated by Mr. Altman. These companies and their predecessors have operated since 1968 and have developed and managed more than 25,000 multifamily units throughout the United States, including communities in Florida, Michigan, Illinois, Tennessee, Georgia, Texas, and North Carolina. The Altman Companies currently operates through the following companies:

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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.

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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.

In addition to the fees earned by these companies, BBX Capital Real Estate invests in the managing member of the joint ventures that are formed to invest in projects originated by the platform. Such equity interests are typically entitled to a preferred equity interest in the projects to the extent that the external equity investors in such ventures receive agreed-upon returns on their investments.

The Altman Companies has historically incurred operating costs in excess of the fees earned from the projects, and as a result, earnings generated by the platform generally arise as a result of the ability to invest as the managing member and receive promoted equity interests in the projects.

Pursuant to the operating agreement of The Altman Companies, BBX Capital Real Estate will acquire an additional 40% equity interest in The Altman Companies from Mr. Altman for a purchase price, subject to certain adjustments, of $9.4 million in January 2023, and Mr. Altman can also, at his option or in other predefined circumstances, require New BBX Capital to purchase his remaining 10% equity interest in The Altman Companies for $2.4 million. However, he will retain his membership interests, including his decision making rights, in the managing member of any development joint ventures that are originated prior to New BBX Capital’s acquisition of additional equity interests in The Altman Companies. In addition, in certain circumstances, BBX Capital Real Estate may acquire the 40% membership interests in AGC that are not owned by The Altman Companies for a purchase price based on prescribed formulas in the operating agreement of AGC.

In connection with its investment in the Altman Companies, BBX Capital Real Estate acquired interests in the managing member of seven multifamily apartment developments, including four developments in which BBX Capital Real Estate had previously invested as a non-managing member, for aggregate cash consideration of $8.8 million.

In addition, as of June 30, 2020, BBX Capital Real Estate and Mr. Altman have each contributed $3.75 million to ABBX Guaranty, LLC, a joint venture established to provide guarantees on the indebtedness and construction cost overruns of new real estate joint ventures formed by The Altman Companies.

The following provides a description of certain of BBX Capital Real Estate’s current investments in multifamily apartment communities sponsored by The Altman Companies.

Altis at Grand Central

In September 2017, BBX Capital Real Estate invested $1.9 million as one of a number of investors in a joint venture with Mr. Altman to develop Altis at Grand Central, a 314 unit multifamily apartment community in Tampa, Florida. In November 2018, BBX Capital Real Estate also acquired approximately 50% of Mr. Altman’s membership interest in the joint venture for $0.6 million. Construction commenced in 2017 and is expected to be substantially completed during 2020. The 314 apartment units were approximately 50% leased as of June 30, 2020.

Altis at Promenade

In December 2017, BBX Capital Real Estate invested $1.0 million as one of a number of investors in a joint venture with Mr. Altman to develop Altis at Promenade, a 338 unit multifamily apartment community in Tampa, Florida. In November 2018, BBX Capital Real Estate also acquired approximately 50% of Mr. Altman’s membership interest in the joint venture for $1.2 million. Construction commenced in 2018 and was substantially completed during 2019. The 338 apartment units were approximately 70% leased as of June 30, 2020.

Altis at Ludlam

During 2018, BBX Capital Real Estate invested $0.7 million with Mr. Altman and another investor in a joint venture to acquire land, obtain entitlements, and fund predevelopment costs for a potential multifamily apartment

development in Miami, Florida. During 2019, BBX Capital Real Estate invested an additional $0.4 million in the joint venture to fund predevelopment costs. In June 2020, the joint venture obtained entitlements, closed on development financing, and commenced development of a 312 unit multifamily apartment community with 7,500 square feet of retail space. In connection with the closing, BBXRE received a $0.5 million distribution from the joint venture as a reimbursement of predevelopment costs and invested an additional $8.5 million in the joint venture as preferred equity.

Altis at Preserve (Suncoast)

During 2018, BBX Capital Real Estate invested $1.9 million with Mr. Altman in a joint venture to acquire land, obtain entitlements, and fund predevelopment costs for the development of Altis at Preserve (Suncoast), a 350 unit multifamily apartment community in Tampa, Florida. In 2019, the joint venture closed on its development financing and commenced construction, which is expected to be substantially completed in 2020. In connection with the closing, BBX Capital Real Estate and Mr. Altman retained membership interests in the managing member of the joint venture and received distributions of a portion of their previous capital contributions based on the final development financing structure.

Altis at Pembroke Gardens

In November 2018, BBX Capital Real Estate acquired approximately 50% of Mr. Altman’s membership interest in a joint venture invested in Altis at Pembroke Gardens for $1.3 million. Altis at Pembroke Gardens is a 280 unit multifamily apartment community in Pembroke Pines, Florida. Construction of the community was completed during 2017, and the 280 apartment units were approximately 88% leased as of June 30, 2020. The joint venture intends to seek to sell the project in 2021.

Altis at Boca Raton

In November 2018, BBX Capital Real Estate acquired approximately 50% of Mr. Altman’s membership interest in a joint venture invested in Altis at Boca Raton for $1.9 million. Altis at Boca Raton is a 398 unit multifamily apartment community in Boca Raton, Florida. Construction of the community was completed during 2017, and the 398 apartment units were approximately 88% leased as of June 30, 2020. The joint venture intends to seek to sell the project in 2021.

Altis at Little Havana

In June 2019, BBX Capital Real Estate invested $0.8 million in a joint venture sponsored by The Altman Companies to develop Altis at Little Havana, a 224 unit multifamily apartment community in Miami, Florida. Construction commenced in 2019 and is expected to be substantially completed in 2021.

Altis at Lake Willis (Vineland Point)

In August 2019, BBX Capital Real Estate invested $4.5 million in a joint venture sponsored by The Altman Companies to acquire land, obtain entitlements, and fund predevelopment costs for the development of a potential multifamily apartment community in Orlando, Florida. The joint venture is continuing to evaluate its plans for the project, including the potential development of the community in two phases.

Altis at Miramar East/West

In October 2019, BBX Capital Real Estate invested $2.5 million in a joint venture sponsored by The Altman Companies to develop Altis Miramar West, a 320 unit multifamily apartment community, and Altis Miramar East, a 330 unit multifamily apartment community, on two adjacent sites in Miramar, Florida. Construction commenced in 2019 and is expected to be substantially completed in 2021.

Rights to Joint Venture Distributions

The operating agreements governing Altman joint ventures generally provide that the holders of the non-managing membership interests are entitled to distributions based on their pro-rata share of the capital contributions to the ventures until such members receive their aggregate capital contributions plus a specified return on their capital. After such members receive their contributed capital and the specified returns, distributions are based on an agreed-upon allocation of the remaining cash flows available for distribution, with the holders of the managing membership interests receiving an increasing percentage of the distributions. As BBX Capital Real Estate’s investments in the above joint ventures include investments as both a non-managing member and a managing member, New BBX Capital’s economic interest in the expected distributions from such ventures in many cases is not the same as its pro-rata share of its contributed capital in such ventures.

Single Family Developments

Beacon Lake Master Planned Development

BBX Capital Real Estate has obtained entitlements to develop raw land in St. Johns County, Florida into 1,476 finished lots which will comprise the Beacon Lake Community. As part of the development, BBX Capital Real Estate is developing the land and common areas and selling the finished lots to third-party homebuilders who will construct single-family homes and townhomes that are planned to range from 1,800 square feet to 4,000 square feet and priced from the high $200,000’s to the $500,000’s.

In 2017, BBX Capital Real Estate commenced land development and entered into agreements with homebuilders for the 302 finished lots comprising Phase I of the project. During the years ended December 31, 2019 and 2018, BBX Capital Real Estate closed on the sale of all of the finished lots comprising Phase I to homebuilders (51 in 2019 and 251 in 2018).

BBX Capital Real Estate has also commenced land development of the lots comprising Phase II of the project, which is expected to include approximately 400 single-family homes and 196 townhomes, and an additional 79 lots for single-family homes as part of Phase III of the project. During the six months ended June 30, 2020, BBX Capital Real Estate closed on the sale of 71 single family lots and 38 townhome lots to homebuilders. As of June 30, 2020, BBX Capital Real Estate had entered into agreements with homebuilders to sell developed lots for an additional 373 single-family homes and 158 townhomes as part of Phases II and III and has collected deposits related to these agreements.

BBX Capital Real Estate has financed a portion of the development costs for the project through the issuance of Community Development District Bonds. Under the terms of the agreements with the homebuilders, in connection with the sale of the finished lots, BBX Capital Real Estate is required to repay a portion of the bonds with proceeds from such sales, while a portion of the bonds are required to be assumed by the homebuilders.

Sky Cove

In June 2019, BBX Capital Real Estate invested $4.2 million as one of a number of investors in a joint venture with Label & Co. to develop Sky Cove at Westlake, a residential community comprised of 204 single family homes in Loxahatchee, Florida. BBX Capital Real Estate is entitled to receive 26.25% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with Label & Co., as the managing member, receiving an increasing percentage of distributions. The project commenced construction in 2019, and home closings commenced in 2020.

Marbella

As of June 30, 2020, BBX Capital Real Estate had invested $7.0 million in a joint venture with CC Homes to develop Marbella, a residential community comprised of 158 single family homes in Miramar, Florida, and

expects to invest an additional $1.3 million in the venture during the remainder of 2020. BBX Capital Real Estate is entitled to receive 70.00% of the joint venture distributions until it receives its aggregate capital contributions plus a specified return on its capital. After all investors receive a specified return and the return of their contributed capital, any distributions thereafter are shared based on earnings, with CC Homes, as the managing member, receiving an increasing percentage of distributions. The joint venture acquired the development land in 2019 and commenced site development in 2020.

Mixed Use Developments

Bayview

In 2014, BBX Capital Real Estate invested in a joint venture with an affiliate of Procacci Development Corporation (“PDC”). At the inception of the venture, BBX Capital Real Estate and PDC each contributed $1.8 million to the venture in exchange for a 50% interest. The joint venture acquired for $8.0 million approximately three acres of real estate in Fort Lauderdale, Florida. There is currently an approximate 84,000 square foot office building, along with a convenience store and gas station, on the property. The office building has low occupancy with short term leases, while the lease for the convenience store ends in March 2022. BBX Capital Real Estate anticipates that the property will be redeveloped into a mixed-use project in the future.

L03/212 Partners

As of June 30, 2020, BBX Capital Real Estate has invested $2.8 million as one of a number of investors in The Main Las Olas joint venture, which was formed to invest in the development of The Main Las Olas, a mixed-used project in downtown Fort Lauderdale, Florida that is planned to be comprised of an office tower with approximately 365,000 square feet of leasable area, a residential tower with approximately 341 units, and approximately 45,000 square feet of ground floor retail. As of December 31, 2019, BBX Capital Real Estate expects to invest an additional $1.0 million in the venture as development progresses. The project is currently under construction and is anticipated to be substantially completed during the fourth quarter of 2020. Parent has executed an agreement with the joint venture to lease space in the office tower for its corporate headquarters.

Other Assets

In addition to the above projects, BBX Capital Real Estate holds certain investments in real estate joint ventures in which a majority of the assets of the ventures have been sold. BBX Capital Real Estate also holds various legacy assets acquired in connection with Parent’s sale of BankAtlantic in 2012, including loans receivable and real estate with an aggregate carrying amount of approximately $21.8 million as of June 30, 2020. The majority of the legacy assets do not generate cash flows on a regular or predictable basis and are not expected to do so until the assets are monetized through loan repayments or transactions involving the sale, joint venture, or development of the underlying real estate.

In recent years, BBX Capital Real Estate has generated substantial profits from the legacy asset portfolio, as the majority of the loans receivable and foreclosed real estate assets within the portfolio were impaired in prior periods to their estimated fair values during the recession that began in 2007 and 2008 but were ultimately monetized by BBX Capital Real Estate following the subsequent recovery in the real estate market over the past several years. Although BBX Capital Real Estate is continuing its efforts to monetize the remaining assets within the portfolio, BBX Capital Real Estate has substantially completed the monetization of the portfolio and does not expect to generate substantial profits from the remaining assets in future periods.

BBX Sweet Holdings

Business Overview

BBX Sweet Holdings is engaged in the ownership and management of operating businesses in the confectionery industry, including IT’SUGAR, Hoffman’s Chocolates, and Las Olas Confections and Snacks.

IT’SUGAR is a specialty candy retailer in retail locations, which include a mix of high-traffic resort and entertainment, lifestyle, mall/outlet, and urban locations throughout the U.S. Its products include bulk candy, candy in giant packaging, and licensed and novelty items. IT’SUGAR has historically utilized a store model for its retail locations that requires a relatively low initial investment, with a goal of shorter payback periods and increased investment returns. However, as a result of trends in retail consumer traffic, IT’SUGAR had focused on opening and operating larger stores in select resort and entertainment locations which generally experience higher traffic and sales volume but require a higher initial investment. During 2019, IT’SUGAR continued to invest capital in these types of locations, including Grand Bazaar, a 6,000 square foot location in Las Vegas, Nevada that was opened in June 2019, and a 22,000 square foot, three story candy department store at American Dream, a 3 million square foot shopping and entertainment complex in New Jersey. While the American Dream store opened in December 2019, it was closed and remained closed as of June 30, 2020 as a result of the COVID-19 pandemic. In addition, IT’SUGAR is continuing to evaluate its current retail locations where sales volumes may give rise to early lease termination rights and the potential opportunity to renegotiate lease terms and occupancy costs. For certain underperforming locations where IT’SUGAR does not have early lease termination rights, IT’SUGAR is evaluating potential opportunities to close or sublease such locations. In certain circumstances, IT’SUGAR may determine that it is in its best interest to incur costs to exit a location if New BBX Capital believes that the closure of such locations will improve IT’SUGAR’s overall operating efficiencies and profitability over the long term.

BBX Sweet Holdings’ other operations include 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.

Renin

Business Overview

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 two manufacturing and distribution facilities in the United States and Canada. In addition to its own manufacturing, Renin also sources various products and materials from China and Vietnam. Following BBX Capital’s acquisition of Renin in 2013, Renin, which historically generated operating losses, has become profitable, generating trade sales of $67.5 million and income before taxes of $1.8 million for the year ended December 31, 2019 and for the six months ended June 30, 2020.

Renin’s products are sold through three channels in North America: retail, commercial, and direct installation in the greater Toronto area. Renin’s retail channel currently comprises approximately 63% of its gross sales and includes big box retail customers such as Lowes, Home Depot, and Costco. Revenues from one customer of Renin represented $20.2 million, $20.7 million, and $20.9 million of the New BBX Capital’s total revenues for the years ended December 31, 2019, 2018 and 2017, respectively, which represented nearly 10% of the Company’s total revenues for the years ended December 31, 2019 and 2018 and over 10% of the Company’s total revenues for the year ended December 31, 2017. Its commercial channel currently comprises approximately 26% of its gross sales and includes original equipment manufacturers and fabricators across North America. Renin’s direct installation channel generates the remaining sales.

Renin’s business and operating strategy is focused on:

•

Growing sales across all channels by delivering outstanding customer service and consistently developing innovative products;

•

Improving gross margin by lowering manufacturing costs through productivity improvement;

•

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

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Seeking to potentially acquire companies in complementary businesses.

Renin has entered into a non-binding letter of intent in connection with a possible acquisition of a Canadian company which is engaged in a complementary business. Renin is currently performing due diligence in connection with the potential acquisition. There is no assurance that a definitive agreement for the acquisition will be entered into by the parties or that the transaction will be consummated.

Competition

The industries in which New BBX Capital’s investments conduct business are very competitive, and New BBX Capital also faces substantial competition with respect to our investment activities from real estate investors and developers, private equity funds, hedge funds, and other institutional investors. New BBX Capital competes with institutions and entities that are larger and have greater resources than the resources available to New BBX Capital.

BBX Capital Real Estate invests in the development of multifamily apartment communities. Due to the historically strong performance of this class of asset within the real estate market, BBX Capital Real Estate is experiencing increased competition from other real estate investors and developers, which is increasing the cost of land and resulting in increased inventories of multifamily apartment communities in the markets in which BBX Capital Real Estate invests and operates, which can decrease market rental rates and increase the time required to lease and stabilize its developments.

Renin’s products are primarily sold to large retailers and wholesalers, and it experiences intense competition from importers of foreign products.

Four unaffiliated companies in the confectionery industry currently account for the majority of the industry’s revenues, reflecting significant concentration and competition in the industry in which BBX Sweet Holdings operates.

Regulatory Matters

As a public company, New BBX Capital will be subject to federal securities laws, including the Exchange Act. In addition, the companies in which New BBX Capital holds investments are subject to federal, state and local laws and regulations generally applicable to their respective businesses.

Seasonality

BBX Sweet Holdings’ businesses are subject to seasonal fluctuations in trade sales, which cause fluctuations in BBX Sweet Holdings’ quarterly results of operations. Historically, IT’SUGAR generated its strongest retail trade sales during the months from June through August, as well as during the month of December, when families are on vacation. BBX Sweet Holdings’ other operating businesses generate their strongest trade sales during the fourth quarter in connection with various holidays in the United States.

Employees

As of December 31, 2019, New BBX Capital had 1,312 employees. As previously described, however, New BBX Capital has taken steps to reduce expenses in connection with, and in an attempt to mitigate the effects of, the COVID-19 pandemic, including the furlough by IT’SUGAR of all of its store employees and the majority of its corporate employees beginning in March 2020. While certain of such employees have been recalled as part of IT’SUGAR’s phased reopening plan, not all IT’SUGAR stores have been reopened and certain stores that were reopened have subsequently been required to close due to government mandates or staffing shortages. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.

None of our employees are represented by a labor organization, and none are party to any collective bargaining agreement. We have not experienced any work stoppages and consider our relations with our employees to be satisfactory.

Properties

Following the spin-off, Parent and New BBX Capital will share office space at their principal executive offices located at 401 East Las Olas Boulevard, Suite 800, Fort Lauderdale, Florida, 33301. The space is currently leased by Parent under a lease with an expiration date of February 28, 2021. Parent has the right to renew the terms of the lease for two additional terms of five years commencing as of the expiration date. Parent has executed a lease for a new principal executive office located at 201 East Las Olas Boulevard, Fort Lauderdale, Florida, 33301, and expects to relocate its office upon the delivery of the new space during the first quarter of 2021. The lease agreement for the new principal executive office has an initial term of 10 years and provides Parent with the right to renew the terms of the lease for three additional terms of five years following the initial term. It is expected that the principal executive office lease will either be assigned to New BBX Capital, with a portion of the office space to be subleased to Parent at a rate of $200,000 per year, or New BBX Capital will pay or reimburse Parent for payments under the lease other than $200,000 of annual rent to be borne by Parent.

BBX Sweet Holdings maintains certain executive offices at Parent’s principal executive office and also maintains a principal executive office for IT’SUGAR at 3155 Southwest 10^th Street, Deerfield Beach, Florida that is occupied under a lease with an expiration date of October 31, 2024. BBX Sweet Holdings operates retail locations throughout the United States which are subject to leases that expire between 2020 and 2030 and seven Hoffman’s Chocolates retail locations in South Florida which are subject to leases that expire between 2020 and 2026. BBX Sweet Holdings also operates a manufacturing facility in Orlando, Florida which is subject to a lease that expires in 2020, subject to four one-year renewals that may be exercised by BBX Sweet Holdings, and leases a manufacturing facility in Utah which is subject to a lease that expires in 2023 and has been subleased. BBX Sweet Holdings also owns a manufacturing facility in Greenacres, Florida. As discussed herein, BBX Sweet Holdings and IT’SUGAR in particular are not current in the payments due under their leases and in many cases the landlords have delivered notices of default with respect to the leased premises.

Renin’s principal executive office is located at 110 Walker Drive, Brampton, Ontario and is occupied under a lease with an expiration date of December 31, 2027. Renin leases its manufacturing facilities in the United States and Canada which have lease expiration dates of December 31, 2022 and December 31, 2027, respectively.

Legal Proceedings

In the ordinary course of business, New BBX Capital and its subsidiaries are parties to lawsuits as plaintiff or defendant involving its operations and activities. Additionally, from time to time in the ordinary course of business, New BBX Capital is involved in disputes with existing and former employees, vendors, taxing jurisdictions, landlords and various other parties and also receives consumer complaints and complaints, inquiries, and orders requiring compliance from governmental and consumer agencies, including Offices of State Attorneys General. New BBX Capital takes these matters seriously and attempts to resolve any such issues as they arise. We may also become subject to litigation related to the COVID-19 pandemic, including with respect to leases and any actions we take or may be required to take as a result of the pandemic.

Reserves are accrued for matters in which management believes it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. Management does not believe that the aggregate liability relating to known contingencies in excess of the aggregate amounts accrued will have a material impact on New BBX Capital’s results of operations or financial condition. However, litigation is inherently uncertain, and the actual costs of resolving legal claims, including awards of damages, may be substantially higher than the amounts accrued for these claims and may have a material adverse impact on New BBX Capital’s results of operations or financial condition.

Adverse judgments and the costs of defending or resolving legal claims may be substantial and may have a material adverse impact on New BBX Capital’s financial statements. Management is not at this time able to estimate a range of reasonably possible losses with respect to matters in which it is reasonably possible that a loss

will occur. In certain matters, management is unable to estimate the loss or reasonable range of loss until additional developments provide information sufficient to support an assessment of the loss or reasonable range of loss. Frequently in these matters, the claims are broad, and the plaintiffs have not quantified or factually supported their claim.

There were no material pending legal proceedings against New BBX Capital or its subsidiaries as of June 30, 2020.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULT OF OPERATIONS

You should read the following discussion of our results of operations and financial condition together with our historical financial statements and accompanying notes that we have included elsewhere in this information statement as well as the discussion in the section of this information statement entitled “Business.” The following discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections. Actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including, without limitation, those discussed in the sections of this information statement entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

The historical and pro forma financial statements included in this information statement may not reflect what New BBX Capital’s business, financial position or results of operations would have been had it been a separate, publicly-traded company during the periods presented or what its results of operations, financial position, and cash flows will be in the future. For additional information about New BBX Capital’s past financial performance and the basis of presentation of New BBX Capital’s financial statements, please see “Unaudited Pro Forma Financial Statements” and New BBX Capital’s historical financial statements and the notes thereto included elsewhere in this information statement,

Overview

BBX Capital Florida LLC is currently a Florida limited liability company. Prior to the spin-off, BBX Capital Florida LLC will be converted into a Florida corporation. BBX Capital Florida LLC or the corporation into which it is converted is referred to together with its subsidiaries as the “Company,” “we,” “us,” or “our,” and without its subsidiaries as “New BBX Capital.”

The Company is a Florida-based diversified holding company whose principal investments are BBX Capital Real Estate LLC (“BBX Capital Real Estate” or “BBXRE”), BBX Sweet Holdings, LLC (“BBX Sweet Holdings”), and Renin Holdings, LLC (“Renin”).

The Company’s goal is to build long-term shareholder value. Since many of the Company’s assets do not generate income on a regular or predictable basis, the Company’s objective is long-term growth as measured by increases in book value and intrinsic value over time. The Company regularly reviews the performance of its investments and, based upon economic, market, and other relevant factors, considers transactions involving the sale or disposition of all or a portion of its assets, investments, or subsidiaries.

As of June 30, 2020, the Company had total consolidated assets of approximately $416.8 million and Parent’s equity of approximately $242.9 million.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic has caused, and continues to cause, an unprecedented disruption in the U.S. and global economies and the industries in which the Company operates due to, among other things, government ordered “shelter in place” and “stay at home” orders and advisories, travel restrictions, and restrictions on business operations, including government guidance with respect to travel, public accommodations, social gatherings, and related matters. The disruptions arising from the pandemic and the reaction of the general public had a significant adverse impact on the Company’s financial condition and operations during the six months ended June 30, 2020. The duration and severity of the pandemic and related disruptions, as well as the adverse impact on economic and market conditions, are uncertain; however, given the nature of these circumstances, the adverse impact of the pandemic on the Company’s consolidated results of operations, cash flows, and financial condition in 2020 has

been, and is expected to continue to be, material. Furthermore, although the duration and severity of the effects of the pandemic are uncertain, demand for many of the Company’s products and services may remain weak for a significant length of time, and the Company cannot predict if or when the industries in which the Company operates will return to pre-pandemic levels.

Although the impact of the COVID-19 pandemic on the Company’s principal investments and management’s efforts to mitigate the effects of the pandemic has varied, as described in further detail below, New BBX Capital and its subsidiaries have sought to take steps to manage expenses through cost saving initiatives and reductions in employee head count and actions to increase liquidity and strengthen the Company’s financial position, including maintaining availability under lines of credit and reducing planned capital expenditures. As of June 30, 2020, the Company’s consolidated cash and cash equivalent balances were $96.5 million.

See below for additional discussions related to the current and possible impacts of the COVID-19 pandemic on the Company’s principal investments.

Summary of Combined Results of Operations for the Six Months Ended June 30, 2020 and 2019

Consolidated Results

The following summarizes key financial highlights for the six months ended June 30, 2020 compared to the same 2019 period:

•

Total consolidated revenues of $74.8 million, a 28.9% decrease compared to the same 2019 period.

•

Loss before income taxes from continuing operations of $44.0 million compared to income of $7.4 million during the same 2019 period.

•

Net loss attributable to Parent of $30.6 million compared to income of $1.8 million during the same 2019 period.

The Company’s consolidated results for the six months ended June 30, 2020 compared to the same 2019 period were significantly impacted by the following:

•

A decrease in BBX Sweet Holdings’ revenues primarily attributable to the impact of the COVID-19 pandemic on its operations, including the closure of IT’SUGAR’s retail locations in March 2020.

•

The recognition of impairment losses of $30.7 million in the 2020 period primarily related to goodwill and long-lived assets associated with IT’SUGAR as a result of the impact of the COVID-19 pandemic.

•

A net decrease in sale activity by BBX Capital Real Estate and its joint ventures in the 2020 period as compared to the 2019 period.

•

A net decrease in selling, general and administrative expenses primarily attributable to cost mitigating activities implemented in the 2020 period in response to the COVID-19 pandemic, including permanent and temporary reductions in workforce.

Segment Results

New BBX Capital currently reports the results of its business activities through the following reportable segments: BBX Capital Real Estate, BBX Sweet Holdings, and Renin.

Information regarding income before income taxes by reportable segment is set forth in the table below (in thousands):


	For the Six Months Ended June 30,
	2020			2019			Change
BBX Capital Real Estate	$	3,672			21,527			(17,855	)
BBX Sweet Holdings		(38,952	)		(4,166	)		(34,786	)
Renin		1,925			1,071			854
Other		(3,044	)		245			(2,289	)
Reconciling items and eliminations		(7,633	)		(11,269	)		2,636

(Loss) income before income taxes from continuing operations		(44,032	)		7,408			(51,440	)
Benefit (provision) for income taxes		9,214			(2,148	)		11,362

Net (loss) income from continuing operations		(34,818	)		5,260			(40,078	)
Discontinued operations		(74	)		(3,523	)		3,449

Net (loss) income		(34,892	)		1,737			(36,629	)
Less: Net loss attributable to noncontrolling interests		4,312			68			4,244

Net (loss) income attributable to Parent	$	(30,580	)		1,805			(32,385	)

BBX Capital Real Estate Reportable Segment

Segment Description

BBX Capital Real Estate (or 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, a developer and manager of multifamily apartment communities, and also 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.

Overview

Although BBXRE has not to date been as significantly impacted by the COVID-19 pandemic as BBX Sweet Holdings, the effects of the pandemic have impacted BBXRE’s operations and are expected to impact its operating results and financial position for the year ended December 31, 2020. Recent construction activities have continued at BBXRE’s existing projects, and following some disruptions in March and April 2020, sales at BBXRE’s single-family home developments generally returned to pre-pandemic levels. However, the effects of the pandemic, including increased unemployment and economic uncertainty, as well as recent increases in the number of COVID-19 cases in Florida and throughout the United States, have impacted rental activities at BBXRE’s multifamily apartment developments. In addition, the effects of the pandemic, including the impact on general economic conditions and real estate and credit markets, have increased uncertainty relating to the expected timing and pricing of future sales of multifamily apartment developments, single-family homes, and developed lots at BBXRE’s Beacon Lake Community, as well as the timing and financing of new multifamily apartment developments.

While the Company expects that the impact of the COVID-19 pandemic will adversely affect BBXRE’s operating results and financial condition for the year ended December 31, 2020, particularly with respect to the expected timing of sales, the Company evaluated various factors, including asset-specific factors, overall economic and market conditions, and the excess of the expected profits associated with such assets in relation to their carrying amounts, and concluded that, except as discussed below, there had not been a significant decline in

the fair value of most of BBXRE’s real estate assets as of June 30, 2020 that should be recognized as an impairment loss. As part of this evaluation, the Company considered the sales at its single-family home developments (which remain at or near pre-pandemic levels), continued collection of rent at its multifamily apartment developments, and indications that there has not to date been a significant decline in sales prices for single family homes or an increase in capitalization rates for multifamily apartment communities. However, the Company recognized $2.7 million of impairment losses during the six months ended June 30, 2020 primarily related to a decline in the estimated fair values of certain of BBXRE’s investments in joint ventures, including i) a joint venture that is developing an office tower, as the market for office space has been more significantly impacted by the pandemic compared to the single family and multifamily markets in which BBXRE primarily invests, and ii) a joint venture invested in a multifamily apartment community in which BBXRE purchased its interest following the stabilization of the underlying asset at a purchase price calculated based on assumptions related to the timing and pricing of the sale of the asset, both of which have been impacted by the pandemic.

There is no assurance that the real estate market will not be materially adversely impacted by the pandemic or otherwise, that the sales prices of single-family homes will not materially decline, that rents will be paid when due or at all, or that market rents will not materially decline. While government efforts to delay or forestall evictions and the availability of judicial remedies have not to date materially impacted BBXRE’s operations, they may in the future have an adverse impact on both market values and BBXRE’s operating results. Further, the effects of the pandemic may impact the costs of operating BBXRE’s real estate assets, including, but not limited to, an increase in property insurance costs indicated by recent quotes of insurance costs that are higher than pre-pandemic levels, which could also have an adverse impact on market values and BBXRE’s operating results. BBXRE will continue to monitor economic and market conditions and may recognize further impairment losses in future periods as a result of various factors, including, but not limited to, material declines in overall real estate values, sales prices for single family homes, and/or rental rates for multifamily apartments.

Prior to the pandemic, BBXRE previously disclosed that it anticipated that its operating profits would decline in 2020 as compared to recent prior periods when significant sales of assets were consummated, and BBXRE expects that the effects of the COVID-19 pandemic will result in a further decline in its results of operations for 2020. Further, as BBXRE’s primary focus in 2020 had been to source investments in new development opportunities with the goal of building a diversified portfolio of real estate investments that generate profits in future periods, the effects of the COVID-19 pandemic may impact BBXRE over a longer term to the extent that its ability to identify new development opportunities that meet its investment criteria or source debt or equity capital from unaffiliated third parties is adversely impacted. While BBXRE may be able to identify opportunistic investments in a recessionary environment that could be funded with available cash, there is no certainty that such opportunities will be identified, that such opportunities will meet the Company’s investment criteria, or that required funds will be available for that purpose.

As a result of the above factors, including the potential impact of the COVID-19 pandemic on sales of existing projects and investments in new development opportunities, BBXRE’s results of operations and financial condition may be materially adversely impacted by the effects of the pandemic in future periods.

The Altman Companies and Related Investments

During the six months ended June 30, 2020, the Altis at Wiregrass joint venture, which was sponsored by the Altman Companies, sold its 392 unit multifamily apartment community in Tampa, Florida. As a result of the sale, BBXRE recognized $0.8 million of equity earnings and received $2.3 million of distributions from the venture during the six months ended June 30, 2020. During the period, BBXRE also contributed $1.3 million of additional capital to the Altman Companies to fund operations and invested $10.9 million in existing real estate joint ventures sponsored by the Altman Companies, including $1.6 million in additional equity contributions to the Altis Miramar West, Altis Miramar East, and Altis at Lake Willis joint ventures and an $8.5 million preferred equity contribution to the Altis at Ludlam joint venture.

To date, the COVID-19 pandemic has not significantly impacted construction activities which remain ongoing at the existing projects sponsored by the Altman Companies, and as a result, the Altman Companies continues to generate development and general contractor fees from such projects. In addition, the Altman Companies had collected in excess of 95% of the rents at the multifamily apartment communities under its management through July 2020, although initial collections of August 2020 rent were slower than in prior months. With respect to its leasing activities, while leasing was conducted virtually during March through May 2020, the Altman Companies has reopened its leasing offices for visits by appointment. However, as a result of the effects of the pandemic, the Altman Companies has experienced a decline in tenant demand and in the volume of new leases at certain of its communities, which has resulted in an increase in concessions offered to prospective and renewing tenants in an effort to maintain occupancy at its stabilized communities or increase occupancy at its communities under development. Further, some jurisdictions have imposed moratoriums on evictions.

BBXRE and the Altman Companies currently believe that market participants for multifamily apartment communities similar to those sponsored and managed by the Altman Companies are generally assuming a short to medium term decline in occupancy and market rents and an increase in rent concessions and a recovery in occupancy and rental rates in 12-24 months. However, the impact of the COVID-19 pandemic on the economy remains uncertain, and the effects of the pandemic, including a prolonged economic downturn, high unemployment, the expiration of or a decrease in government benefits to individuals, and government-mandated moratoriums on tenant evictions, could ultimately have a longer term and more significant impact on rental rates, occupancy levels, and rent collections, including an increase in tenant delinquencies and/or requests for rent abatements. These effects would impact the amount of rental revenues generated from the multifamily apartment communities sponsored and managed by the Altman Companies, the extent of management fees earned by the Altman Companies, and the ability of the related joint ventures to stabilize and successfully sell such communities. Furthermore, a decline in rental revenues at developments sponsored by the Altman Companies could require it, as the sponsor and managing member, to fund operating shortfalls in certain circumstances and could also impact the ability of the related joint ventures to extend or refinance the construction loans on their respective projects.

Further, BBXRE and the Altman Companies believe that capitalization rates for multifamily apartment communities similar to those sponsored and managed by the Altman Companies have largely remained steady, as the impact of the increased uncertainty in the overall market has generally been seen as having been offset by the impact of the significant decline in interest rates. However, the impact of the COVID-19 pandemic on economic conditions in general, including the uncertainty regarding the severity and duration of such impact, has adversely impacted the level of real estate sales activity and overall credit markets and may ultimately have a significant adverse impact on capitalization rates and real estate values in future periods, particularly if there is a prolonged economic downturn.

If there is a significant adverse impact on real estate values as a result of lower rental revenues, higher capitalization rates, or otherwise, the joint ventures sponsored by the Altman Companies may be unable to sell their respective multifamily apartment developments within the time frames previously anticipated and/or for the previously forecasted sales prices, if at all, which may impact the profits expected to be earned by BBXRE from its investment in the managing member of such projects and could result in the recognition of impairment losses related to BBXRE’s investment in such projects. Furthermore, the Altman Companies may be unable to close on the equity and/or debt financing necessary to commence the construction of new projects, including the development of Altis at Lake Willis, which could result in increased operating losses at the Altman Companies due to a decline in development, general contractor, and management fees, the recognition of impairment losses by BBXRE and/or the Altman Companies related to their current investments in predevelopment expenditures and land acquired for development, and the recognition of impairment losses related to BBXRE’s overall investment in the Altman Companies, as the profitability and value of the Altman Companies is directly correlated with its ability to source new development opportunities.

Beacon Lake Master Planned Development

During the six months ended June 30, 2020, BBXRE continued the development of the lots comprising Phase II of the Beacon Lake Community in St. Johns County, Florida, which is expected to include approximately

400 single-family homes and 196 townhomes, and an additional 79 lots for single-family homes as part of Phase III of the project and sold to homebuilders 71 single family lots and 38 townhome lots. In addition, as part of BBXRE’s efforts to maximize liquidity in light of overall economic conditions, the community development district related to the Beacon Lake Community issued $8.6 million of additional community development bonds. The funds from the issuance were used to reimburse BBXRE for its funding of ongoing development costs related to Phases II and III and the repayment of a portion of the bonds previously issued by the community development district. As of June 30, 2020, BBXRE had entered into agreements with homebuilders to sell developed lots for an additional 373 single-family homes and 158 townhomes as part of Phases II and III and has collected deposits related to these agreements.

Following the initial outbreak of COVID-19 in March 2020, homebuilders at the Beacon Lake Community experienced a decline in the volume of sales traffic and home sales and requested extensions of their existing agreements for the purchase of additional developed lots from BBXRE, and BBXRE agreed to such extensions. Subsequently, sales activity significantly increased in May 2020 and generally returned to pre-pandemic levels in June and July 2020. Accordingly, BBXRE currently expects the remaining sale of developed lots to occur pursuant to the modified takedown schedules under its agreements with homebuilders. However, there is no assurance that this will be the case, and the effects of the COVID-19 pandemic on the economy and demand for single-family housing remain uncertain and could result in further requests by homebuilders to extend the timing of their purchase of developed lots and/or failure of the homebuilders to meet their obligations under these contracts. In addition, a decline in home prices as a result of the economic impacts associated with the COVID-19 pandemic could result in a decrease in contingent revenues expected to be earned by BBXRE in connection with sales of homes by homebuilders on developed lots previously sold to them, as well as a decrease in the expected sales prices for the unsold lots comprising the remainder of the Beacon Lakes Community. Although BBXRE is not currently expecting a significant decrease in the sales prices or fair value of its unsold lots, a significant decline in the demand and pricing for single-family homes could result in the recognition of impairment losses in future periods.

Results of Operations

Information regarding the results of operations for BBXRE is set forth below (dollars in thousands):


	For the Six Months Ended June 30,
	2020			2019			Change
Sales of real estate inventory	$	9,278			4,660			4,618
Interest income		185			465			(280	)
Net (losses) gains on sales of real estate assets		(34	)		10,996			(11,030	)
Other		787			1,125			(338	)

Total revenues		10,216			17,246			(7,030	)

Cost of real estate inventory sold		6,106			2,643			3,463
Recoveries from loan losses, net		(5,037	)		(2,385	)		(2,652	)
Impairment losses		2,710			—			2,710
Selling, general and administrative expenses		3,461			4,373			(912	)

Total costs and expenses		7,240			4,631			2,609

Operating profits		2,976			12,615			(9,639	)
Equity in net earnings of unconsolidated joint ventures		696			8,742			(8,046	)
Other income		—			170			(170	)

Income before income taxes	$	3,672			21,527			(17,855	)

BBX Capital Real Estate’s income before income taxes for the six months ended June 30, 2020 compared to the same 2019 period decreased by $17.9 million primarily due to the following:

•

A decrease in net gains on sales of real estate assets primarily due to BBXRE’s sale of various real estate assets during the 2019 period, including RoboVault and land parcels at PGA Station; and

•

A decrease in equity in net earnings of unconsolidated joint ventures primarily due to sales of real estate during the 2019 period, including the sale of real estate assets by the Altis at Lakeline and PGA Design Center joint ventures and single-family homes by the Chapel Trail joint venture; and

•

The recognition of impairment losses during the 2020 period; partially offset by,

•

An increase in net profits from the sale of developed lots to homebuilders at the Beacon Lake Community development, as BBXRE sold 110 developed lots during the 2020 period and 51 developed lots during the 2019 period;

•

A net increase in recoveries from loan losses primarily due to a settlement with a financial institution servicing loans and guarantors for BBXRE; and

•

A decrease in selling, general and administrative expenses primarily associated with the receipt of a legal settlement with a title company in the 2020 period and lower operating expenses due to the sale of RoboVault.

BBX Sweet Holdings Reportable Segment

Segment Description

BBX Sweet Holdings is engaged in the ownership and management of operating businesses in the confectionery industry, including IT’SUGAR, Hoffman’s Chocolates, and Las Olas Confections and Snacks. IT’SUGAR is a specialty candy retailer whose products include bulk candy, candy in giant packaging, and licensed and novelty items. Hoffman’s Chocolates is a retailer of gourmet chocolates with retail locations in South Florida, and Las Olas Confections and Snacks is a manufacturer and wholesaler of chocolate and other confectionery products.

Overview

Although BBX Sweet Holdings’ results from operations were improved for the first two months of 2020 as compared to 2019, reflecting, among other things, IT’SUGAR’s opening of a three story candy department store at American Dream in New Jersey in December 2019 and the opening of three other stores in 2019, BBX Sweet Holdings has been materially adversely impacted by the effects of the COVID-19 pandemic.

In March 2020, as a result of various factors, including government-mandated closures and CDC and WHO advisories in connection with the COVID-19 pandemic, IT’SUGAR closed all of its retail locations and furloughed all store employees and the majority of its corporate employees. During the three months ended June 30, 2020, IT’SUGAR reopened 85 of its retail locations (out of approximately 100 locations that were open prior to the pandemic) as part of a phased reopening plan, and as part of this plan, it implemented revised store floor plans, increased sanitation protocols and began recalling furloughed store and corporate employees to full or part-time employment. Subsequent to June 30, 2020, IT’SUGAR reopened an additional 11 of its retail locations but was required to close 4 previously reopened retail locations as a result of various governments reimplementing mandated closures. In addition, on a daily basis, IT’SUGAR has had to temporarily close 4-6 locations due to staffing shortages. Sales at IT’SUGAR’s retail locations that were open as of June 30, 2020 declined during the second quarter of 2020 by approximately 48% as compared to the comparable period in 2019, and sales at its locations that were open as of July 31, 2020 declined by approximately 43% during July 2020 as compared to the comparable period in 2019. There is no assurance that sales volumes will improve or will not further decline, as the duration and severity of the COVID-19 pandemic and its effects on demand and future sales levels, including a recessionary economic environment and the potential impact of the pandemic on

consumer behavior, remain uncertain. In addition, IT’SUGAR may close additional previously reopened locations as a result of various factors, including governments reimplementing mandated closures, continued staffing shortages, or insufficient sales volumes. Further, there is uncertainty as to when IT’SUGAR will be able to reopen locations that have remained closed since March 2020 or that were subsequently closed following their initial reopening.

As a result of the closure of its retail locations, IT’SUGAR ceased paying rent to the landlords of such locations in April 2020 and has been engaged in negotiations with its landlords for rent abatements, deferrals, and other modifications for the period of time that the locations were or have been closed and the period of time that the locations are opened and operating under conditions which are affected by the pandemic. Accordingly, as of June 30, 2020, IT’SUGAR had accrued and unpaid current rental obligations of $4.5 million, which are included in other liabilities in the Company’s condensed consolidated statement of financial condition, and had received default notices from landlords in relation to 28 of its locations. While IT’SUGAR had executed lease amendments in relation to 16 of its retail locations as of June 30, 2020 and an additional 5 of its retail locations subsequent to June 30, 2020, it remains involved in ongoing and active negotiations with most of its landlords and has only paid a portion of July 2020 rent for most of its locations (including many locations for which IT’SUGAR had previously executed lease amendments related to rent concessions for April through June 2020). In connection with these negotiations, IT’SUGAR’s landlords have in some cases indicated that they might provide additional relief if IT’SUGAR opened additional locations at certain of the landlords’ other retail locations. The terms of the executed lease amendments vary and include a combination of rent abatements and deferrals. For amendments that provide for the deferral of rent, the repayment terms generally contemplate a repayment period during the remainder of 2020 and through the end of 2021. Certain amendments also provide for the payment of rent based on a percentage of sales volumes for a period of one year to two years in lieu of previously scheduled fixed and variable lease costs under the terms of the existing leases. However, there is no assurance that IT’SUGAR will be able to reach agreements with the landlords of its remaining locations relating to rents for the months of April through June 2020 or with all of its landlords relating to rents for the remaining months of 2020. Furthermore, due to the uncertainty related to IT’SUGAR’s business as a result of the pandemic, including the potential impact on sales volumes and the possibility of additional closures of its retail locations, there is no assurance that it will be in a position to meet its obligations under the terms of lease agreements and amendments that have been executed or are otherwise being negotiated. Further, there is no assurance that the terms of lease amendments that have been executed or are being negotiated will provide sufficient relief for IT’SUGAR to stabilize and maintain its full operations. If IT’SUGAR’s negotiations with its landlords are not successful and its failure to pay rent constitutes an event of default under the applicable lease agreements, IT’SUGAR’s landlords may also pursue remedies available to them pursuant to such agreements, which may include the acceleration of obligations under the lease agreements and the initiation of eviction proceedings.

In April 2020, New BBX Capital, through a wholly-owned subsidiary of BBXRE, purchased IT’SUGAR’s revolving line of credit and equipment note from the respective lenders for the aggregate outstanding principal balance of the loans of $4.3 million plus accrued interest and subsequently advanced an additional $2.0 million to IT’SUGAR pursuant to the terms of the loans. However, New BBX Capital is continuing to evaluate the potential operating deficits and liquidity requirements of its subsidiaries as a result of the impact of the COVID-19 pandemic and may determine not to provide additional funding or capital to subsidiaries whose operations they believe may not be sustainable. There is no assurance that New BBX Capital or its other subsidiaries will provide additional funds to IT’SUGAR.

The effects of the COVID-19 pandemic on demand, sales levels, and consumer behavior, as well as the current recessionary economic environment, have had and could continue to have a material adverse effect on IT’SUGAR’s business, results of operations, and financial condition. As a result of the impact of the pandemic on IT’SUGAR’s business, including the above mentioned decline in sales volumes as a result of the prolonged closure of its retail locations, decrease in customer traffic in its stores, and the impact of the pandemic on demand and consumer behavior, IT’SUGAR does not believe that it will have sufficient liquidity to continue its

operations if it is unable to obtain significant rent abatements or deferrals from its landlords and amended payment terms from its vendors and its sales volumes do not recover and stabilize in a reasonable period of time. Further, based on its current estimates, IT’SUGAR expects that it will require additional funding or capital in 2020 in order to maintain its operations and is engaged in efforts to obtain additional funding from New BBX Capital or other outside investors. If IT’SUGAR is unable to successfully negotiate with its landlords and vendors, its sales volumes do not recover, and it is unable to obtain additional funding or capital, IT’SUGAR would need to consider pursuing a formal or informal restructuring.

As a result of the above factors, the Company recognized $25.3 million of impairment losses related to IT’SUGAR’s goodwill and long-lived assets during the six months ended June 30, 2020, including the recognition of a goodwill impairment loss of $20.3 million during the three months ended March 31, 2020 based on a decline in the estimated fair value of IT’SUGAR as of March 31, 2020. See Notes 1 and 6 to the Company’s unaudited combined carve-out financial statements for the six months ended June 30, 2020 and 2019 included in this information statement for additional information with respect to the Company’s recognition of impairment losses related to IT’SUGAR, including the Company’s significant estimates and assumptions related to IT’SUGAR and the fact that such assumptions may change over time as a result of the COVID-19 pandemic, which may result in the recognition of additional impairment losses related to IT’SUGAR’s assets that would be material to the Company’s financial statements.

In addition to the material adverse impact of the COVID-19 pandemic on IT’SUGAR’s operations, BBX Sweet Holdings’ other operations have also been adversely impacted by the pandemic. In March 2020, Hoffman’s Chocolates closed all of its retail locations to customer traffic and limited sales to curbside pickup (where allowable by government mandates) and online customers. During the three months ended June 30, 2020, it reopened all of its locations and achieved sales volumes at approximately 70% of pre-pandemic levels (as compared to the comparable period in 2019). In addition, while Las Olas Confections and Snacks’ manufacturing and distribution processes were not materially impacted by the pandemic, its sales during the three months ended June 30, 2020 were approximately 51% of pre-pandemic levels (as compared to the comparable period in 2019). Hoffman’s Chocolates and Las Olas Confections and Snacks have also been engaged in negotiations with the landlords of their respective retail and manufacturing locations for rent abatements, deferrals, and other modifications. As of June 30, 2020, Hoffman’s Chocolates and Las Olas Confections and Snacks had accrued and unpaid current rental obligations of $0.3 million, which are included in other liabilities in the Company’s condensed consolidated statement of financial condition, and they had executed lease amendments with respect to 4 of such locations, including Las Olas Confections and Snacks’ manufacturing facility in Orlando, Florida. Subsequent to June 30, 2020, Hoffman’s Chocolates executed lease amendments with respect to an additional 2 of its retail locations. Similar to IT’SUGAR, there is no assurance that the sales volumes of these businesses will improve, and they may be required to close previously reopened locations as a result of governments reimplementing mandated closures or otherwise. Furthermore, there is no assurance that Hoffman’s Chocolates will be able to execute lease amendments with the landlords of its remaining locations, and due to the uncertainty related to these businesses as a result of the pandemic, there is no assurance they will be in position to meet their obligations under the terms of lease agreements and amendments that have been executed or are otherwise being negotiated.

Results of Operations

Information regarding the results of operations for BBX Sweet Holdings is set forth below (dollars in thousands):


	For the Six Months Ended June 30,
	2020			2019			Change
Trade sales	$	26,577			47,988			(21,411	)
Cost of trade sales		(23,815	)		(31,634	)		7,819

Gross margin		2,762			16,354			(13,592	)
Interest income		27			29			(2	)
Other revenue		204			96			108
Interest expense		(116	)		(98	)		(18	)
Impairment losses		(25,303	)		—			(25,303	)
Selling, general and administrative expenses		(16,640	)		(20,774	)		4,134

Operating losses		(39,066	)		(4,393	)		(34,673	)
Other income		114			227			(113	)

Loss before income taxes	$	(38,952	)		(4,166	)		(34,786	)

Gross margin percentage		%10.39			34.08			(23.69	)

SG&A as a percent of trade sales		%62.61			43.29			19.32

BBX Sweet Holdings’ loss before income taxes for the six months ended June 30, 2020 was $39.0 million compared to $4.2 million during the same 2019 period, which reflects the following:

•

The recognition of impairment losses due to a decline in the estimated value of the goodwill and long-lived assets associated with BBX Sweet Holdings’ reporting units as a result of the impact of the COVID-19 pandemic on market conditions;

•

A decrease in trade sales primarily due to the impacts of the COVID-19 pandemic described above, including the temporary closing of all of IT’SUGAR’s retail locations in March 2020; and

•

A significant decline in gross margin percentage as a result of ongoing lease costs associated with BBX Sweet Holdings’ retail and manufacturing locations; partially offset by

•

A net decrease in selling, general and administrative expenses primarily due to the furlough of all of IT’SUGAR’s store employees and the majority of its corporate employees from March 2020 to June 2020 as a result of the COVID-19 pandemic.

Information regarding the results of operations for IT’SUGAR for the six months ended June 30, 2020 and 2019 is set forth below (dollars in thousands):


	For the Six Months Ended June 30,
	2020			2019			Change
Trade sales	$	19,597			38,669			(19,072	)
Cost of trade sales		(17,828	)		(23,540	)		5,712

Gross margin		1,769			15,129			(13,360	)
Other revenue		8			7			1
Interest expense		(76	)		(57	)		(19	)
Impairment losses		(24,948	)		—			(24,948	)
Selling, general and administrative expenses		(13,327	)		(17,078	)		3,751

Operating losses		(36,574	)		(1,999	)		(34,575	)
Other income		62			219			(157	)

Loss before income taxes	$	(36,512	)		(1,780	)		(34,732	)

Gross margin percentage		%9.03			39.12			(30.09	)

SG&A as a percent of trade sales		%68.01			44.16			23.84

Renin Reportable Segment

Segment Description

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 two 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 and Vietnam. Renin’s products are sold through three channels in North America: retail, commercial, and direct installation in the greater Toronto area.

Overview

Renin has not to date been significantly impacted by the COVID-19 pandemic, and it has continued to operate both of its manufacturing and distribution facilities, source various products and raw materials from China and Vietnam, and sell its products through various channels. Although Renin has experienced a decline in sales to certain customers as a result of concerns related to the pandemic, these declines have been offset by an increase in sales to various customers in its retail and commercial channels. In particular, Renin has observed an increase in online orders in its retail channel and has also experienced an increase in sales to former customers in its commercial channel who previously began sourcing products in China and have returned as customers following the implementation of tariffs on Chinese products. In addition, Renin has realized cost reductions as a result of the pandemic, including lower costs related to travel and trade shows and wage subsidies related to employees in its Canadian offices.

Although Renin’s operations have not to date been significantly impacted by the pandemic, the effects of the pandemic, including a recessionary economic environment, could have a significant adverse impact on Renin’s results of operations and financial condition in future periods, particularly if an economic downturn is prolonged in nature and impacts consumer demand or the effects of the pandemic result in material disruptions in the supply chains for its products and raw materials. Further, while Renin has begun to diversify its supply chain and transfer the assembly of certain products from foreign suppliers to its own manufacturing facilities, Renin continues to source products and raw materials from China. As a result, disruptions in its supply chain from China as a result of various factors, including increased tariffs or closures in the supply chain, could impact Renin’s cost of product and ability to meet customer demand.

Renin is currently evaluating various opportunities to expand its operations, including through acquisitions.

Results of Operations

Information regarding the results of operations for Renin is set forth below (dollars in thousands):


	For the Six Months Ended June 30,
	2020			2019			Change
Trade sales	$	34,621			34,682			(61	)
Cost of trade sales		(28,127	)		(28,006	)		(121	)

Gross margin		6,494			6,676			(182	)
Interest expense		(185	)		(256	)		71
Selling, general and administrative expenses		(4,653	)		(5,477	)		824

Operating profits		1,656			943			713
Other (expense) income		(3	)		152			(155	)
Foreign exchange gain (loss)		272			(24	)		296

Income before income taxes	$	1,925			1,071			854

Gross margin percentage		%18.76			19.25			(0.49	)

SG&A as a percent of trade sales		%13.44			15.79			(2.35	)

Renin’s income before income taxes for the six months ended June 30, 2020 was $1.9 million compared to $1.1 million during the same 2019 period. The increase was primarily due to reduced selling, general and administrative expenses associated with lower marketing expenses from reduced travel and trade show costs and open positions.

Other

Other in the Company’s segment information includes its investments in other operating businesses, including a restaurant located in South Florida that was acquired through a loan foreclosure and an insurance agency.

During the six months ended June 30, 2020, the Company recognized $2.7 million of impairment losses related to certain of these investments primarily resulting from the effects of the COVID-19 pandemic on the estimated value of the businesses.

Reconciling Items and Eliminations

Reconciling items and eliminations in the Company’s segment information includes the following:

•

New BBX Capital’s corporate general and administrative expenses allocation from Parent;

•

Elimination of transactions between New BBX Capital’s subsidiaries, including the purchase by BBXRE of IT’SUGAR’s revolving line of credit and equipment note for the outstanding principal balances plus accrued interest and subsequent $2.0 million advance to IT’SUGAR pursuant to the terms of the loans; and

•

Interest expense capitalized in connection with real estate construction activities.

Corporate General and Administrative Expenses

New BBX Capital’s corporate general and administrative expenses consist primarily of an allocation of the cost of services provided by the Parent to New BBX Capital for various support functions, including executive compensation, legal, accounting, human resources, investor relations, and executive offices. The cost allocation from Parent to New BBX Capital’s corporate general and administrative expenses for the six months ended June 30, 2020 and 2019 were $7.9 million and $11.3 million, respectively. The decrease in the cost allocation for corporate general and administrative expenses for the 2020 period as compared to the same 2019 period primarily reflects the allocation of compensation expense related to Parent’s Chief Executive Officer and Chief Financial Officer to Bluegreen as a result of their expanded roles at Bluegreen in the 2020 periods, which resulted in lower executive compensation expenses incurred directly by Parent, as well as an updated estimate of the allocation of annual executive bonus expenses expected to be paid in cash and stock.

Provision for Income Taxes

The Company estimates its effective annual income tax rate on a quarterly basis based on current and forecasted operating results for the annual period and applies the estimated effective income tax rate to its loss or income before income taxes reduced by net income or loss attributable to noncontrolling interests in joint ventures taxed as partnerships.

The Company’s effective income tax rate was approximately 21% and 29% during the six months ended June 30, 2020 and 2019, respectively. The Company’s effective income tax rate for the six months ended June 30, 2020 was impacted by the Company’s nondeductible executive compensation allocated from Parent and state income taxes. The effective income tax rate for the 2020 period reflects a current estimated ordinary taxable loss for the year ended December 31, 2020 resulting primarily from the effects of the COVID-19 pandemic.

Discontinued Operations

As described in Note 1 to the Company’s unaudited combined carve-out financial statements for the six months ended June 30, 2020 and 2019, Food for Thought Restaurant Group (“FFTRG”), a wholly-owned subsidiary of the Company, previously entered into area development and franchise agreements with MOD Pizza related to the development of MOD Pizza franchised restaurant locations throughout Florida and, through 2019, had opened nine restaurant locations. In September 2019, the Company entered into an agreement with MOD Pizza to terminate the area development and franchise agreements and transferred seven of its restaurant locations, including the related assets, operations, and lease obligations, to MOD Pizza. In addition, the Company closed the remaining two locations and terminated the related lease agreements.

The Company recognized a pre-tax loss from discontinued operations of $0.1 million and $4.6 million during the six months ended June 30, 2020 and 2019, respectively. The $4.6 million loss for the six months ended June 30, 2019 was primarily attributable to operating losses associated with FFTRG’s MOD Pizza restaurant locations, including costs incurred in connection with the opening of two restaurant locations and the recognition of impairment losses of $2.8 million associated with property and equipment at three locations that were performing below expectations.

Net Loss Attributable to Noncontrolling Interests

New BBX Capital’s combined carve-out financial statements include the results of operations and financial position of IT’SUGAR, a partially-owned subsidiary in which it holds a controlling financial interest. As a result, the Company is required to attribute net income or loss to the noncontrolling interest in IT’SUGAR.

Net loss attributable to noncontrolling interests was $4.3 million during the six months ended June 30, 2020 compared to $68,000 for the comparable 2019 period. The increase in the net loss attributable to noncontrolling

interests for the six months ended June 30, 2020 as compared to the same 2019 period was primarily due to increased operating losses at IT’SUGAR, including the recognition of impairment losses related to its goodwill and long lived assets,

Consolidated Cash Flows

A summary of our consolidated cash flows is set forth below (in thousands):


	For the Six Months Ended June 30,
	2020			2019
Cash flows used in operating activities	$	(8,856	)		(2,801	)
Cash flows (used in) provided by investing activities		(10,324	)		29,218
Cash flows provided by (used in) financing activities		94,962			(30,227	)

Net increase (decrease) in cash, cash equivalents and restricted cash	$	75,782			(3,810	)
Cash, cash equivalents and restricted cash at beginning of period		21,287			30,082

Cash, cash equivalents and restricted cash at end of period	$	97,069			26,272

Cash Flows related to Operating Activities

The Company’s cash used in operating activities increased by $6.1 million during the six months ended June 30, 2020 compared to the same 2019 period primarily due to increased operating losses as a result of the impacts of the COVID-19 pandemic, including a decline in trade sales primarily reflecting the closure of BBX Sweet Holdings’ retail locations and subsequent impact on consumer demand, and lower distributions from unconsolidated real estate joint ventures, partially offset by a reduction in spending for real estate inventory during the 2020 period as compared to the 2019 period.

Cash Flows related to Investing Activities

The Company’s cash used in investing activities increased by $39.5 million during the six months ended June 30, 2020 compared to the same 2019 period primarily to lower distributions from unconsolidated real estate joint venture and decreased proceeds from the sale of real estate, partially offset by an increase in loan recoveries in the legacy asset portfolio.

Cash Flows related to Financing Activities

The Company’s cash provided by financing activities increased by $125.2 million during the six months ended June 30, 2020 compared to the same 2019 period, which was primarily due to higher net transfers from Parent in the 2020 period.

Commitments

The Company’s material commitments as of June 30, 2020 included the required payments due on notes payable and other borrowings and commitments under non-cancelable operating leases.

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The following table summarizes the contractual minimum principal and interest payments required on the Company’s outstanding debt and payments required on the Company’s non-cancelable operating leases by period due date as of June 30, 2020 (in thousands):


	Payments Due by Period
Contractual Obligations ⁽¹⁾	Less than 1 year		1 — 3 Years		4 — 5 Years		After 5 Years		Unamortized Debt Issuance Costs			Total
Notes payable and other borrowings	$	8,438		850		2,539		30,832		(1,045	)		41,614
Noncancelable operating leases		13,007		50,101		34,495		48,557		—			146,160

Total contractual obligations		21,445		50,951		37,034		79,389		(1,045	)		187,774

Interest Obligations ⁽²⁾
Notes payable and other borrowings		1,959		4,265		4,114		27,449		—			37,787

Total contractual interest		1,959		4,265		4,114		27,449		—			37,787

Total contractual obligations	$	23,404		55,216		41,148		106,838		(1,045	)		225,561

(1)	Does not include BBXRE’s obligation under the Altman Companies’ operating agreement to purchase an additional 40% equity interest in January 2023 for a purchase price, subject to certain adjustments, of $9.4 million.

(2)	Assumes that the scheduled minimum principal payments are made in accordance with the table above and the interest rate on variable rate debt remains the same as the rate at June 30, 2020.

At the current time, New BBX Capital intends to use its cash in order to satisfy the payments required under its contractual obligations for the foreseeable future, while its subsidiaries will use, to the extent available, their respective cash on hand, cash flows from operations, and cash received from new borrowings under existing or future debt facilities in order to satisfy their respective obligations. However, as a result of the COVID-19 pandemic and the related impact on the Company’s operations, there is no assurance that New BBX Capital’s subsidiaries will have sufficient cash from such sources to satisfy their respective contractual obligations and maintain their respective operations.

While New BBX Capital has available cash that it may use to contribute to or fund the obligations and commitments of its subsidiaries, New BBX Capital intends to evaluate the facts and circumstances of the cash requirements of each of its subsidiaries, including their operating deficits, their liquidity requirements, and the sustainability of their operations as a result of the COVID-19 pandemic and otherwise, and make a determination of whether and to what extent it will make funds available to each subsidiary.

Off-balance-sheet Arrangements

Parent guarantees certain obligations of New BBX Capital’s wholly-owned subsidiaries and unconsolidated real estate joint ventures as described in further detail in Note 11 to the Company’s unaudited combined carve-out financial statements for the six months ended June 30, 2020 and 2019 included in this information statement.

The Company has investments in joint ventures involved in the development of multifamily rental apartment communities, as well as single-family master-planned for sale housing communities. The Company’s investments in these joint ventures are accounted for as unconsolidated variable interest entities, and as a result, the Company does not recognize the assets and liabilities of these joint ventures in its financial statements. As of June 30, 2020 and December 31, 2019, the Company’s investments in these joint ventures totaled $63.8 million and $57.3 million, respectively. These unconsolidated real estate joint ventures generally finance their activities with a combination of debt financing and equity. The Company generally does not directly guarantee the financing of these joint ventures, other than as described in Note 11 to the Company’s unaudited combined

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carve-out financial statements included in this information statement, and the Company’s maximum exposure to losses from these joint ventures is its equity investment. The Company is typically not obligated to fund additional capital to its joint ventures; however, the Company’s interest in a joint venture may be diluted if the Company elects not to fund a joint venture capital call.

Summary of Combined Results of Operations for the years ended December 31, 2019, 2018 and 2017

Consolidated Results

The following summarizes key financial highlights for the year ended December 31, 2019 compared to the same 2018 period:

•

Total consolidated revenues were $203.7 million, a 2.3% decrease compared to 2018.

•

Income from continuing operations before income taxes was $29.0 million compared to a loss from continuing operations of $3.0 million for 2018.

•

Net income attributable to Parent was $13.7 million, compared to a net loss attributable to Parent of $9.2 million for 2018.

The Company’s consolidated results for the year ended December 31, 2019 compared to 2018 were significantly impacted by the following:

•

A net increase in sale activity in BBX Capital Real Estate’s portfolio in 2019, including the Altis at Bonterra joint venture’s sale of its multifamily apartment community in Hialeah, Florida, which resulted in the recognition of $29.2 million of equity earnings from the joint venture in 2019, and the sale of various real estate assets, which resulted in an increase in the gains on sales of real estate assets of $9.1 million in 2019 as compared to 2018.

•

A decrease in operating losses generated by BBX Sweet Holdings in 2019, which primarily reflects the impact of various strategic initiatives implemented by the Company during 2018, including the closure of a manufacturing facility and a reduction in corporate personnel and infrastructure, and various impairment losses and other costs recognized in 2018 in connection with such initiatives.

The following summarizes key financial highlights for the year ended December 31, 2018 compared to 2017:

•

Total consolidated revenues were $208.6 million, a 37.2% increase compared to 2017.

•

Loss from continuing operations before income taxes was $3.0 million, a 77.6% decrease compared to 2017.

•

Net loss attributable to Parent was $9.2 million, a 42.8% decrease compared to 2017.

The Company’s consolidated results for 2018 as compared to the same 2017 period were significantly impacted by the following events:

•

In June 2017, the Company acquired IT’SUGAR, a specialty candy retailer with retail locations throughout the United States, for a purchase price of $58.4 million, net of cash acquired. During 2018, IT’SUGAR contributed revenues of $79.8 million and a loss before income taxes of $2.4 million.

•

In December 2017, the enactment of the Tax Cuts and Jobs Act (the “Tax Reform Act”), which reduced the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018, resulted in a $4.0 million reduction in the Company’s deferred tax asset in 2017.

•

During 2018, BBX Capital Real Estate closed on the sale of 251 developed lots to homebuilders as part of Phase I of its development of the Beacon Lake Community, which resulted in pre-tax profits of $7.7 million in 2018. In addition, BBX Capital Real Estate monetized various investments within its portfolio, including the Addison on Millenia, Altis at Shingle Creek, and a student housing facility.

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Segment Results

Income before income taxes by reportable segment for the years ended December 31, 2019, 2018, and 2017 is set forth in the table below (in thousands):


	For the Years Ended December 31,
	2019			2018			2017
BBX Capital Real Estate	$	52,696			30,214			16,085
BBX Sweet Holdings		(5,122	)		(14,986	)		(16,781	)
Renin		1,808			2,461			2,180
Other		349			346			(219	)
Reconciling items and eliminations		(20,746	)		(21,057	)		(14,729	)

Income (loss) from continuing operations before income taxes		28,985			(3,022	)		(13,464	)
Provision for income taxes		(8,334	)		(2,865	)		(1,306	)

Net income (loss) from continuing operations		20,651			(5,887	)		(14,770	)
Net loss from discontinued operations		(7,138	)		(3,580	)		(1,339	)

Net income (loss)		13,513			(9,467	)		(16,109	)
Less: Net loss attributable to noncontrolling interests		224			266			20

Net income (loss) attributable to Parent	$	13,737			(9,201	)		(16,089	)

BBX Capital Real Estate Reportable Segment

Overview

The Altman Companies and Related Investments

In 2018, BBXRE acquired a 50% membership interest in the Altman Companies, a joint venture between the Company and Joel Altman (“JA”) engaged in the development, construction, and management of multifamily apartment communities. As of December 31, 2019, BBXRE had investments in ten active developments sponsored by the Altman Companies, comprised of three developments that are stabilized or being leased and expected to be sold over the next two years, five developments that are under construction, and two projects that are currently in predevelopment stages.

During the year ended December 31, 2019, BBXRE monetized certain of its investments in real estate joint ventures that were sponsored by the Altman Companies, including the following:

•

In April 2019, the Altis at Lakeline joint venture sold its 354 unit multifamily apartment community in Cedar Park, Texas. As a result of the sale, BBXRE recognized $5.0 million of equity earnings and received approximately $9.3 million of distributions from the venture during the year ended December 31, 2019.

•

In August 2019, the Altis at Bonterra joint venture sold its 314 unit multifamily apartment community located in Hialeah, Florida. As a result of the sale, BBXRE recognized $29.2 million of equity earnings and received approximately $46.0 million of distributions from the joint venture. In addition, prior to the sale, BBXRE received approximately $4.3 million of distributions from the venture during the year ended December 31, 2019 related to prior operating profits of the venture.

BBXRE also continued to invest in new real estate joint ventures sponsored by the Altman Companies, which are summarized below:

•

During the year ended December 31, 2019, joint ventures sponsored by the Altman Companies closed on construction financing and commenced development of the following projects:

•

Altis at Preserve (Suncoast), a 350 unit multifamily apartment community in Tampa, Florida;

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•

Altis at Little Havana, a 224 unit multifamily apartment community in Miami, Florida;

•

Altis Miramar West, a 320 unit multifamily apartment community in Miramar, Florida; and

•

Altis Miramar East, a 330 unit multifamily apartment community, in Miramar, Florida.

The Altman Companies is providing development, construction, and management services to the ventures in exchange for ongoing fee revenue, and BBXRE and JA have invested in the respective managing member of these ventures. As of December 31, 2019, BBXRE had invested an aggregate of $4.2 million in the managing members of these joint ventures.

•

In August 2019, BBXRE invested $4.5 million in the Altis at Lake Willis (Vineland Pointe) joint venture, which was formed to acquire land, obtain entitlements, and fund predevelopment costs for the development of a potential multifamily apartment community in Orlando, Florida. The joint venture expects to receive entitlements for the project, close on the capital to construct the project, and commence construction in 2021.

Beacon Lake Master Planned Development

During the year ended December 31, 2019, BBXRE continued its development of the Beacon Lake Community in St. Johns County, Florida and sold to homebuilders the remaining 51 developed lots in Phase I of the project, which is comprised of 302 lots.

BBXRE has commenced land development on the lots comprising Phase II of the project, which is expected to include approximately 400 single-family homes and 196 townhomes, and an additional 79 lots for single-family homes as part of Phase III of the project. BBXRE has entered into agreements with homebuilders to sell developed lots for 422 single-family homes and all of the 196 townhomes, and closings on the sale of developed lots in Phase II to homebuilders commenced in January 2020.

Other Joint Venture Activity

During the year ended December 31, 2019, the PGA Design Center joint venture sold its remaining commercial buildings located in Palm Beach Gardens, Florida and provided seller financing to the buyer for a portion of the sales price. As a result of the sale, BBXRE recognized $2.8 million of equity earnings and received approximately $2.3 million of distributions from the venture.

In addition, BBXRE invested in two new real estate joint ventures, including The Main Las Olas joint venture, which was formed to invest in the development of The Main Las Olas, a mixed-used project in downtown Fort Lauderdale, Florida that is planned to be comprised of an office tower with approximately 365,000 square feet of leasable area, a residential tower with approximately 341 units, and approximately 45,000 square feet of ground floor retail, and the Sky Cove joint venture, which was formed to develop, construct, and sell 204 single-family homes in Westlake Florida. BBXRE has invested $2.0 million in The Main Las Olas joint venture and $4.2 million in the Sky Cove joint venture and expects to invest an additional $2.0 million in The Main Las Olas joint venture as the development progresses.

Other Real Estate Activity

During the year ended December 31, 2019, BBXRE sold other various real estate assets within its portfolio, including RoboVault, a self-storage facility located in Fort Lauderdale, Florida, its remaining land parcels located at PGA Station in Palm Beach Gardens, Florida, and various land parcels located in Florida. As a result of these sales, BBXRE recognized total net gains on sales of real estate of $13.6 million and received aggregate net proceeds of $35.2 million.

In connection with the sale of its remaining land parcels at PGA Station, which were sold to the buyer of the commercial buildings sold by the PGA Design Center joint venture, as described above, BBXRE reinvested

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$2.1 million of the proceeds in the PGA Lender joint venture, a joint venture formed with the PGA Design Center joint venture to invest in the seller financing provided to the buyer.

Results of Operations

Information regarding the results of operations for BBX Capital Real Estate is set forth below (dollars in thousands):


	For the Years Ended December 31,									Change 2019 vs 2018			Change 2018 vs 2017
	2019			2018			2017			Change 2019 vs 2018			Change 2018 vs 2017
Sales of real estate inventory	$	5,049			21,771			—			(16,722	)		21,771
Interest income		750			2,277			2,225			(1,527	)		52
Net gains on sales of real estate assets		13,616			4,563			1,451			9,053			3,112
Other		1,619			2,541			4,997			(922	)		(2,456	)

Total revenues	$	21,034			31,152			8,673			(10,118	)		22,479

Cost of real estate inventory sold		2,643			14,116			—			(11,473	)		14,116
Recoveries from loan losses, net		(5,428	)		(8,653	)		(7,546	)		3,225			(1,107	)
Impairment losses		47			571			1,696			(524	)		(1,125	)
Selling, general and administrative expenses		9,144			9,210			11,127			(66	)		(1,917	)

Total costs and expenses		6,406			15,244			5,277			(8,838	)		9,967

Operating profits		14,628			15,908			3,396			(1,280	)		12,512
Equity in net earnings of unconsolidated joint ventures		37,898			14,194			12,541			23,704			1,653
Other income		170			112			148			58			(36	)

Income before income taxes	$	52,696			30,214			16,085			22,482			14,129

BBX Capital Real Estate’s income before income taxes for the year ended December 31, 2019 compared to the 2018 period increased by $22.5 million, or 74.4%, primarily due to the following:

•

A net increase in equity in earnings of unconsolidated joint ventures and gains on sales of real estate assets primarily associated with the sales in 2019 described above, as well as the sale of single-family homes by the Chapel Trail joint venture; partially offset by

•

The recognition of a $3.1 million net gain upon the sale of a student housing complex in 2018;

•

A decrease in interest income and recoveries from loan losses primarily due to the continued decline in the balance of the legacy asset portfolio, as several significant nonaccrual commercial loans were repaid in 2018; and

•

A decrease in net profits from the sale of developed lots to homebuilders at the Beacon Lake Community development, as BBXRE sold 51 developed lots in 2019 and 251 in 2018.

BBX Capital Real Estate’s income before income taxes for the year ended December 31, 2018 compared to 2017 increased by $14.1 million, or 87.9%, primarily due to the following:

•

Net profits from the sale of 251 developed lots to homebuilders at the Beacon Lake Community development during the year ended December 31, 2018;

•

Net gains on the sale of real estate primarily resulting from the sale of a student housing facility during 2018;

•

A net increase in equity in earnings of unconsolidated joint ventures primarily due to the sale of the properties developed by the Addison on Millenia and Altis at Shingle Creek joint ventures, partially offset by the CC Homes Bonterra joint venture’s completion of sales in its 394 single-family home community development during late 2017;

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•

A decrease in impairment losses on commercial land parcels; and

•

An increase in recoveries from loan losses primarily resulting from a $2.9 million recovery on a commercial loan in 2018; partially offset by

•

A decrease in net profits from the above mentioned student housing facility after its sale, which consists of a decrease in rental revenues and selling, general and administrative expenses associated with the property.

BBX Sweet Holdings Reportable Segment

Overview

During the fourth quarter of 2019, the Company reorganized the operating businesses in the confectionery industry that are owned by BBX Sweet Holdings, including the centralization of various management and back office activities and the management of the operations of these businesses by the Company’s executive management based on the consolidated activities and results of BBX Sweet Holdings. In addition, BBX Sweet Holdings continued its efforts to streamline and integrate the operations of these businesses, including the manufacturing and sourcing of certain products by Las Olas Confections and Snacks for BBX Sweet Holdings’ retail operations at IT’SUGAR and Hoffman’s Chocolates. As a result of these organizational changes, the Company updated its internal and external presentations of the operating results of these businesses to reflect the consolidated results of BBX Sweet Holdings.

IT’SUGAR

Consistent with its focus at the time on selectively opening larger stores in resort and entertainment locations which experience high traffic, IT’SUGAR invested capital in several new retail locations in 2019, including Grand Bazaar, a 6,000 square foot location in Las Vegas, Nevada that was opened in June 2019, and a 22,000 square foot, three story candy department store at American Dream, a 3 million square foot shopping and entertainment complex in New Jersey, that was opened in December 2019.

Hoffman’s Chocolates

During the year ended December 31, 2019, BBX Sweet Holdings implemented various initiatives to reduce costs at Hoffman’s Chocolates, including reductions in corporate personnel and the integration of certain of its management and back office activities with BBX Sweet Holdings.

Las Olas Confections and Snacks

During the year ended December 31, 2019, Las Olas Confections and Snacks significantly reduced its operating losses as a result of various strategic initiatives implemented by BBX Sweet Holdings during 2018, including the closure of a manufacturing facility in Utah and a reduction in corporate personnel and infrastructure, and various impairment losses and other costs recognized in 2018 in connection with such initiatives that did not reoccur in 2019.

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Results of Operations

Information regarding the results of operations for BBX Sweet Holdings is set forth below (dollars in thousands):


	For the Years Ended December 31,									Change 2019 vs 2018			Change 2018 vs 2017
	2019			2018			2017			Change 2019 vs 2018			Change 2018 vs 2017
Trade sales	$	105,406			101,187			72,899			4,219			28,288
Cost of trade sales		(67,703	)		(65,829	)		(51,975	)		(1,874	)		(13,854	)

Gross margin		37,703			35,358			20,924			2,345			14,434
Interest income		56			61			40			(5	)		21
Other revenues		324			10			7			314			3
Interest expense		(196	)		(308	)		(335	)		112			27
Impairment losses		(142	)		(4,147	)		(5,786	)		4,005			1,639
Selling, general and administrative expenses		(43,203	)		(46,130	)		(31,703	)		2,927			(14,427	)

Total operating losses		(5,458	)		(15,156	)		(16,853	)		9,698			1,697
Other income		336			170			72			166			98

Loss before income taxes	$	(5,122	)		(14,986	)		(16,781	)		9,864			1,795

Gross margin percentage	%	35.77			34.94			28.70			0.83			6.24

SG&A as a percent of trade sales	%	40.99			45.59			43.49			(4.60	)		2.10

BBX Sweet Holdings’ results of operations include the results of IT’SUGAR’s operations commencing on June 16, 2017, the date on which BBX Sweet Holdings acquired IT’SUGAR.

BBX Sweet Holdings’ loss before income taxes for the year ended December 31, 2019 compared to the same 2018 period decreased by $9.9 million, or 65.8%, primarily due to the following:

•

The recognition of impairment losses in 2018 in connection with the implementation of various strategic initiatives in 2018, as described above, and ongoing losses from BBX Sweet Holdings’ businesses;

•

A net decrease in selling, general and administrative expenses primarily due to the above mentioned strategic initiatives, which have resulted in lower ongoing operating costs and the recognition of severance and other expenses in 2018 that did not reoccur in 2019, partially offset by costs associated with new IT’SUGAR locations opened in 2019 and 2018, including the FAO Schweetz location in New York City, the Grand Bazaar location in Las Vegas, and the American Dream location in New Jersey; and

•

A net increase in gross margin primarily due to sales from the new IT’SUGAR locations described above and improvements in Las Olas Confections and Snacks’ gross margin percentage as a result of improved efficiencies in its manufacturing facility and the closure of its manufacturing facility in Utah.

BBX Sweet Holdings’ loss before income taxes for the year ended December 31, 2018 compared to the same 2017 period decreased by $1.8 million, or 10.7%, primarily due to the following:

•

A net increase in the loss before income taxes generated by IT’SUGAR as a result of costs and expenses associated with replacing various executives and opening new locations, as well as the operating results for 2018 reflecting seasonal operating losses that are typically incurred during the first half of the annual period which are not reflected in IT’SUGAR’s operating results for 2017 due to the timing of BBX Sweet Holdings’ acquisition of IT’SUGAR in June 2017;

•

A net decrease in Las Olas Confections and Snacks selling, general and administrative expenses and improvements in gross margin primarily due to the above mentioned strategic initiatives; and

•

A net decrease in impairment losses related to certain of BBX Sweet Holdings’ businesses.

107

Information regarding the results of operations for IT’SUGAR is set forth below (dollars in thousands):


	For the Years Ended December 31,						June 16, 2017 to December 31, 2017			Change 2019 vs 2018			Change 2018 vs 2017
	2019			2018			June 16, 2017 to December 31, 2017			Change 2019 vs 2018			Change 2018 vs 2017
Trade sales	$	85,275			79,618			46,765			5,657			32,853
Cost of trade sales		(50,748	)		(46,718	)		(26,639	)		(4,030	)		(20,079	)

Gross margin		34,527			32,900			20,126			1,627			12,774
Interest income		—			1			2			(1	)		(1	)
Other revenues		10			10			6			—			4
Interest expense		(114	)		(40	)		—			(74	)		(40	)
Impairment losses		(142	)		—			—			(142	)		—
Selling, general and administrative expenses		(36,521	)		(35,404	)		(17,594	)		(1,117	)		(17,810	)

Total operating (losses) profits		(2,240	)		(2,533	)		2,540			293			(5,073	)
Other income		276			149			58			127			91

Loss before income taxes	$	(1,964	)		(2,384	)		2,598			420			(4,982	)

Gross margin percentage	%	40.49			41.32			43.04			(0.83	)		(1.71	)
		&nb