What changed in this filing

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Item 1. Business

2022-03-09 compared with 2021-03-10 · 273 added, 355 removed, 349 unchanged (64% of the section changed)

Unless the context otherwise requires, in this Annual Report on Form 10-K, "HC2," means HC2 Holdings, Inc.

and the "Company," "we" and "our" mean HC2 together with its consolidated subsidiaries.

Unless the context otherwise requires, in this Annual Report on Form 10-K, "INNOVATE," means INNOVATE Corp.

and the "Company," "we" and "our" mean INNOVATE together with its consolidated subsidiaries.

This Annual Report on Form 10-K contains forward-looking statements.

See "Management’s Discussion and Analysis of Financial Condition and Results of Operations - Special Note Regarding Forward-Looking Statements."

HC2 is a diversified holding company that has a portfolio of subsidiaries in a variety of operating segments.

INNOVATE is a diversified holding company that has a portfolio of subsidiaries in a variety of operating segments.

We seek to grow these businesses so that they can generate long-term sustainable free cash flow and attractive returns in order to maximize value for all stakeholders.

As of December 31, 2020, our four reportable operating segments, plus our Other segment, based on management’s organization of the enterprise included Infrastructure, Life Sciences, Spectrum, Insurance and Other, which includes businesses that do not meet the separately reportable segment thresholds.

As of December 31, 2021, our three operating platforms or reportable segments, based on management’s organization of the enterprise, are Infrastructure, Life Sciences and Spectrum, plus our Other segment, which includes businesses that do not meet the separately reportable segment thresholds.

Our principal operating subsidiaries include the following assets:

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(iii) HC2 Broadcasting Holdings Inc.

and its subsidiaries ("HC2 Broadcasting") (Spectrum), a strategic acquirer and operator of Over-The-Air ("OTA") broadcasting stations across the United States ("U.S.") and Puerto Rico.

and its subsidiaries ("Broadcasting") (Spectrum), a strategic operator of Over-The-Air ("OTA") broadcasting stations across the United States ("U.S.") and Puerto Rico.

In addition, Spectrum, through its wholly-owned subsidiary, HC2 Network Inc.

("Network"), operates Azteca America, a Spanish-language broadcast network offering high quality Hispanic content to a diverse demographic across the United States;

(iv) Continental Insurance Group Ltd.

("CIG") (Insurance), a platform for our run-off long-term care and life and annuity business, through its insurance company, Continental General Insurance Company ("CGI" or the "Insurance Company");

(v) Other, which represents all other businesses or investments that do not meet the definition of a segment individually or in the aggregate.

("Network"), operates Azteca America, a Spanish-language broadcast network offering high quality Hispanic content to a diverse demographic across the U.S.;

(iv) Other, which represents all other businesses or investments that do not meet the definition of a segment individually or in the aggregate.

We expect to focus on operating and managing our portfolio of companies and building value in Infrastructure, Life Sciences and Spectrum in the future.

We believe these segments are well positioned to take advantage of current trends in today’s economy and that there is opportunity to build value organically and inorganically in these three segments.

We will consider opportunities outside of these businesses in the longer term to acquire and invest in businesses with attractive assets that we consider to be undervalued or fairly valued.

We may consider opportunities outside of these businesses in the longer term to acquire and invest in businesses with attractive assets that we consider to be undervalued or fairly valued.

Overall Business Strategy

We evaluate strategic and business alternatives, which may include the following:

operating, growing or acquiring additional assets or businesses related to our current or historical operations;

or winding down or selling our existing operations (including our Insurance segment), or, in the longer-term, acquiring assets or businesses unrelated to our current or historical operations.

We will generally pursue either controlling positions in durable, cash-flow generating businesses, assets that will enhance our current businesses or companies we believe exhibit substantial growth potential in Infrastructure, Life Sciences and Spectrum.

We may choose to actively assemble or re-assemble a company’s management team to ensure the appropriate expertise is in place to execute the operating objectives of such business.

We continually evaluate strategic and business alternatives within our operating segments, which may include the following:

operating, growing or acquiring additional assets or businesses related to current or historical operations;

or winding down or selling our existing operations.

In the longer-term, we may evaluate opportunities to acquire assets or businesses unrelated to our current or historical operations.

We have generally pursued either controlling positions in durable, cash-flow generating businesses, assets that will enhance our current businesses in Infrastructure, Life Sciences and Spectrum or companies we believe exhibit substantial growth potential, which may be unrelated to the Company’s then-current operating segments.

In connection with any such acquisition, we may choose to actively assemble or re-assemble a company’s management team to ensure the appropriate expertise is in place to execute the operating objectives of such business.

We view ourselves as strategic and financial partners and seek to align our management teams’ incentives with our goal of delivering sustainable long-term value to our stakeholders.

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We have broad discretion in selecting a business strategy for the Company.

If we elect to pursue an acquisition, while we intend to focus on Infrastructure, Life Science and Spectrum, we have broad discretion in identifying and selecting both the industry and the possible acquisition or business combination opportunity.

If we elect to pursue an acquisition, while we intend to focus on Infrastructure, Life Science and Spectrum, we may exercise our broad discretion to identify and select an industry and the possible acquisition or business combination opportunity unrelated to our current operating segments.

In connection with evaluating these strategic and business alternatives, we may at any time be engaged in ongoing discussions with respect to possible acquisitions, business combinations and debt or equity securities offerings of widely varying sizes.

There can be no assurance that any of these discussions will result in a definitive agreement and, if they do, what the terms or timing of any agreement would be.

Our strategic process includes a continual evaluation of our existing businesses which may include a sale of businesses or operating segments.

We consider many factors as we go through our evaluation, which include but are not limited to market factors and opportunity, growth prospects and internal needs.

In connection with evaluating these strategic and business alternatives, we may at any time be engaged in ongoing discussions with respect to possible dispositions, mergers and public offerings of widely varying sizes.

There can be no assurance that any of these discussions will result in a definitive agreement and if they do, what the terms or timing of any agreement would be.

From a strategic perspective, we encounter competition for acquisition and business opportunities from other entities having similar business objectives, such as strategic investors and private equity firms, which could lead to higher prices for acquisition targets.

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DBM Global Inc.

is a fully integrated Industrial Construction, Structural Steel, and Facility Maintenance provider who provides 3D Building Information Modeling ("BIM"), detailing, fabrication, and erection of structural steel and heavy steel plate, heavy mechanical and facility maintenance services.

is a fully integrated Industrial Construction, Structural Steel, and Facility Maintenance provider, primarily through its subsidiary, Schuff Steel Company ("SSC"), who provides 3D Building Information Modeling ("BIM"), detailing, fabrication, and erection of structural steel and heavy steel plate, and heavy mechanical and facility maintenance services.

DBMG provides these services on commercial, industrial, and infrastructure construction projects such as high- and low-rise buildings and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, metal processing, refineries, pulp and paper mills, and power plants.

DBMG also fabricates trusses and girders and specializes in the fabrication and erection of large-diameter water pipe and water storage tanks.

Through its Aitken business ("Aitken"), DBMG manufactures pollution control scrubbers, tunnel liners, pressure vessels, strainers, filters, separators and a variety of customized products.

Through its Aitken business ("Aitken"), DBMG manufactures tunnel liners, pressure vessels, strainers, filters, separators and a variety of customized products.

Through its GrayWolf Industrial business ("GrayWolf"), DBMG also provides integrated solutions for digital engineering, modeling and detailing, construction, heavy equipment installation and facility services including maintenance, repair, and installation to a diverse range of end markets.

Headquartered in Phoenix, Arizona, DBMG has domestic operations in Alabama, Arizona, California, Georgia, Kansas, Kentucky, Oregon, South Carolina, Texas, Utah, and Washington with construction projects primarily located in the aforementioned states.

Through its Banker Steel business (“Banker”), DBMG provides full-service fabricated structural steel and erection services primarily for the East Coast and Southeast commercial and industrial construction market, in addition to full design-assist services.

Headquartered in Phoenix, Arizona, DBMG has domestic operations in Alabama, Arizona, California, Florida, Georgia, Kansas, Kentucky, New Jersey, New York, Oregon, South Carolina, Texas, Utah, Virginia, and Washington with construction projects primarily located in the aforementioned states.

In addition, through its DBM Vircon business (“DBM Vircon”), DBMG also has international operations located in Australia, Canada, India, New Zealand, the Philippines, Thailand, and the United Kingdom, providing steel detailing, rebar detailing, BIM modeling, and BIM management services.

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• Expand and Diversify Revenue Base:

DBMG is seeking to expand and diversify its revenue base by leveraging its long-term relationships with national and multi-national construction and engineering firms, national and regional accounts and other customers.

DBMG also intends to continue to grow its operations by targeting smaller projects that carry higher margins and less risk of large margin fluctuations.

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• Emphasize Innovative Services:

DBMG focuses its BIM modeling, design-build, engineering, detailing, fabrication and erection expertise on larger, more complex projects, where it typically experiences less competition and more advantageous negotiated contract opportunities.

DBMG has extensive experience in providing services requiring complex BIM modeling, detailing, fabrication and erection techniques and other unusual project needs, such as BIM coordination, specialized transportation, steel treatment or specialty coating applications.

DBMG focuses its BIM modeling, digital engineering, design-build, engineering, detailing, fabrication, erection, and construction expertise on larger, more complex projects, where it typically experiences less competition and more advantageous negotiated contract opportunities.

These service capabilities have enabled DBMG to address such design-sensitive projects as stadiums and uniquely designed hotels and casinos;

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• Ensure Project Delivery Success through Predictive Technologies :

DBMG uses resources including data analytics, modeling and detailing, laser scan to BIM, and augmented and virtual reality to provide fully integrated solutions for a project’s lifecycle, from design through fabrication, construction, and mechanical and facility services.

DBMG is thus able to deliver optimal value and reliable outcomes that are on schedule and on budget.

DBMG uses resources including data analytics, modeling and detailing, laser scan to BIM, and augmented and virtual reality to provide fully integrated solutions for a project’s lifecycle from design through to fabrication and construction, as well as providing mechanical and facility services.

DBMG is thus able to deliver optimal value and reliable outcomes that are on schedule and on budget across a wide variety of services and geographic regions.

Services and Customers

DBMG consists of four business units spread across diverse markets:

Schuff Steel Company ("SSC") (steel fabrication and erection), DBM Vircon ("DBM Vircon") (steel detailing, rebar detailing, bridge detailing, BIM modeling services and BIM management services), the Aitken product line ("Aitken") (manufacturing of equipment for the oil and gas industry) and GrayWolf (specialty facility maintenance, repair, and installation services, as well as management of smaller structural steel projects).

DBMG consists of five business units spread across diverse markets:

SSC (steel fabrication and erection), Banker (steel fabrication and erection), DBM Vircon (steel detailing, rebar detailing, bridge detailing, BIM modeling services and BIM management services), the Aitken product line (manufacturing of equipment for the oil and gas industry), and GrayWolf (steel fabrication and erection, specialty facility maintenance, repair, and installation services, as well as management of smaller structural steel projects, leveraging subcontractors).

For the year ended December 31, 2021 revenues were as follows (in millions):

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SSC $ 586.1 50.5 %

Banker Steel 265.9 22.9 %

GrayWolf 258.3 22.3 %

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DBMG believes it has benefited from being one of the largest players in a market that is highly fragmented across many small firms.

DBMG achieves a highly efficient and cost-effective construction process by focusing on collaborating with all project participants and utilizing its extensive design-build and design-assist capabilities with its clients.

Additionally, DBMG has in-house fabrication and erection combined with access to a network of subcontractors for smaller projects in order to provide high-quality solutions for its customers.

DBMG offers a range of services across a broad geography through its ten fabrication shops in the United States and 29 sales and management facilities located in the United States, Australia, Canada, India, New Zealand, the Philippines, Thailand and the UK.

DBMG achieves a highly efficient and cost-effective construction process by focusing on collaborating with all project participants and utilizing its extensive digital engineering, design-build and design-assist capabilities with its clients.

Additionally, DBMG has in-house fabrication and erection capabilities combined with access to a network of subcontractors for smaller projects in order to provide high-quality solutions for its customers.

DBMG offers a range of services across a broad geography through its fifteen fabrication shops in the United States and thirty-five sales and management facilities located in the United States, Australia, Canada, India, New Zealand, the Philippines, Thailand and the UK.

DBMG operates with minimal bonding requirements, with a current balance of 57% of DBMG's backlog (out of a total backlog of $1,580.9 million) as of December 31, 2021, and bonding is reduced as projects are billed rather than upon completion.

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• Steel Management:

Using DBMG’s proprietary SIMS, DBMG can track any piece of steel and instantly know its location.

Using DBMG’s proprietary Steel Integrated Management System ("SIMS"), DBMG can track any piece of steel and instantly know its location.

Additionally, DBMG can help clients manage steel subcontracts, providing clients with savings on raw steel purchases and giving them access to a variety of DBMG-approved subcontractors;

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Through its six fabrication shops in Arizona, California, Kansas, and Utah, SSC has one of the highest fabrication capacities in the United States, with over 1.1 million square feet under roof and a maximum annual fabrication capacity of approximately 256,000 tons;

Named the top steel erector in the United States for 2007, 2008, 2011, and from 2013-2020 by Engineering News-Record, SSC knows how to add value to its projects through the safe and efficient erection of steel structures;

Named the top steel erector in the United States for 2007, 2008, 2011, and from 2013-2020 and the second top steel erector for 2021 by Engineering News-Record, SSC knows how to add value to its projects through the safe and efficient erection of steel structures;

DBMG uses BIM on every project to manage its role efficiently.

Additionally, DBMG’s use of Steel Integrated Management Systems ("SIMS") in conjunction with its BIM platform Visualizer allows for real-time reporting on a project’s progress and an information-rich model review.

Additionally, DBMG’s use of SIMS in conjunction with its BIM platform Visualizer allows for real-time reporting on a project’s progress and an information-rich model review.

Aitken is a manufacturer of equipment used in the oil, gas, petrochemical and pipeline industries.

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GrayWolf provides services including steel fabrication, steel management, maintenance, repair, erection, and installation to a diverse range of end markets in order to provide high-quality outage, turnaround, and new installation services to customers.

GrayWolf provides the following services through its four major brands:

GrayWolf Integrated Construction (formerly Titan Contracting), Inco Services, Milco National Constructors and Titan Fabricators.

GrayWolf provides the following services through its two major brands:

GrayWolf Integrated Construction (formerly Titan Contracting, Titan Fabricators, and Inco Services), and Milco National Constructors.

• Specialty mechanical contracting services:

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• Specialty construction solutions for processing markets:

Customers in the pulp and paper, metals, mining and minerals, and petrochemical markets are able to receive specialized solutions including plant maintenance, process piping, equipment, and tank and vessel fabrication and erection that are catered to the needs and specifications of the customer’s industry through the Inco Services brand;

Customers in the pulp and paper, metals, mining and minerals, and petrochemical markets utilize GrayWolf’s specialized solutions including plant maintenance, process piping, equipment, and tank and vessel fabrication and erection that are catered to the needs and specifications of the customer’s industry;

• Turnarounds, tank construction, and piping services:

GrayWolf offers services including plant maintenance, specialty welding, piping systems, and tanks and vessels construction to the power, refining, petrochemical, and water treatment markets in the Midwest, Mid-Atlantic, and West Coast;

GrayWolf offers services including plant maintenance, specialty welding, piping systems, and tanks and vessels construction to the power, pulp and paper, refining, petrochemical, and water treatment markets in the Midwest, Mid-Atlantic, Southeast, and West Coast;

• Custom steel fabrication and erection:

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• Structural steel management:

provides turn-key steel fabrication and erection services with expertise in project management.

GrayWolf provides turn-key steel fabrication and erection services with expertise in project management.

Leveraging such strengths, GrayWolf uses its relationships with reliable subcontractors and erectors, along with state-of-the-art management systems, to deliver excellence to clients.

Banker Steel provides full-service fabricated structural steel and erection services primarily for the East Coast and Southeast commercial and industrial construction market in addition to full design-assist services.

Banker Steel offers a variety of services to its customers, which it believes enhances its ability to obtain and successfully complete projects.

These services fall into four distinct groups:

design-assist/design-build, pre-construction design and budgeting, fabrication, and erection:

• Desi gn-Assist/ Design-Build :

Using the latest technology, Banker Steel helps developers plan, schedule, model and price projects from start to finish resulting in cost-effective steel designs;

• Pre-Construction/Design and Budgeting :

Clients who contact Banker Steel in the early stages of planning can receive a detailed analysis of the structure and cost breakdown.

Both of these tools allow clients to accurately plan and budget for any upcoming project;

• Fabrication:

Through its five fabrication shops in Florida, New Jersey, South Carolina and Virginia, Banker Steel has maximum annual fabrication capacity of approximately 189,000 tons with over 0.5 million square feet of space;

typically focusing on complex, non-commoditized jobs with intensive fabrication requirements;

Banker offers a full suite of erection services including horizontal and vertical erection services.

DBMG currently purchases its steel from a variety of domestic and foreign steel producers but is not dependent on any one producer.

During the year ended December 31, 2020, DBMG, through SSC, purchased approximately 53% of the total value of steel and steel components purchased from two domestic steel vendors.

During the year ended December 31, 2021, DBMG, through SSC and Bankers, purchased approximately 52% of the total value of steel and steel components purchased from two domestic steel vendors.

See Item 1A - Risk Factors - "Risks Related to the Infrastructure segment" elsewhere in this document for discussion on DBMG’s reliance on suppliers of steel and steel components.

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DBMG obtains contracts through competitive bidding or negotiation, which generally are fixed-price, cost-plus, unit cost, or time and material arrangements.

Bidding and negotiations require DBMG to estimate the costs of the project up front, with most projects typically lasting from one to 12 months.

Bidding and negotiations require DBMG to estimate the costs of the project up front, with most projects typically lasting from one to twelve months.

However, large and more complex projects can often last two years or more.

Sales managers lead DBMG’s sales and marketing efforts.

Each sales manager is primarily responsible for estimating sales and marketing efforts in defined geographic areas.

General managers along with sales managers lead DBMG’s sales and marketing efforts.

Each general manager is primarily responsible for sales, estimating, and marketing efforts in defined geographic areas.

In addition, DBMG employs full-time project estimators and chief estimators.

DBMG’s sales representatives build and maintain relationships with general contractors, architects, engineers and other potential sources of business to identify potential new projects.

DBMG’s sales representatives build and maintain relationships with general contractors, architects, engineers, OEMs, industrial owners, and other potential sources of business to identify potential new projects.

DBMG generates future project reports to track the weekly progress of new opportunities.

DBMG’s sales efforts are further supported by most of its executive officers and engineering personnel, who have substantial experience in the design, detailing, modeling, fabrication and erection of structural steel and heavy steel plate.

DBMG’s sales efforts are further supported by most of its executive officers, engineering, and strategic sales and marketing personnel, who have substantial experience in the design, detailing, modeling, fabrication, industrial construction, maintenance, and erection of structural steel and heavy steel plate.

DBMG competes for new project opportunities through its relationships and interaction with its active and prospective customer base which provides valuable current market information and sales opportunities.

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While DBMG believes that it maintains a competitive advantage with respect to many of these factors, failure to continue to do so or to meet other competitive challenges could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition.

As of December 31, 2020, DBMG employed approximately 2,530 people across the globe, including the U.S., Canada, Australia, New Zealand, India, Philippines, Thailand, and the UK.

As of December 31, 2021, DBMG employed approximately 3,794 people across the globe, including the U.S., Canada, Australia, New Zealand, India, the Philippines, Thailand, and the UK.

The number of persons DBMG employs on an hourly basis fluctuates directly in relation to the amount of business DBMG performs.

Certain of the fabrication and erection personnel DBMG employs are represented by the United Steelworkers of America and the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Union.

Certain of the fabrication and erection personnel DBMG employs are represented by the United Steelworkers of America, the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Union, the Ironworkers Union, the International Union of Operating Engineers, and the Texas Ironworkers Union.

DBMG is a party to several separate collective bargaining agreements with these unions in certain of its current operating regions, which expire (if not renewed) at various times in the future.

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DBMG also maintains insurance against property damage caused by fire, flood, explosion and similar catastrophic events that may result in physical damage or destruction of its facilities and property.

DBM maintains professional liability insurance in the amount of $10.0 million for professional services related to our work in steel erection and fabrication projects.

DBMG maintains professional liability insurance in the amount of $10.0 million for professional services related to our work in steel erection and fabrication projects.

All policies are subject to various deductibles and coverage limitations.

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Life Sciences Segment (Pansend Life Sciences, LLC)

Pansend focuses on the development of innovative technologies and products in the healthcare industry.

As of December 31, 2020, Pansend is currently invested in four companies:

R2 Technologies, Inc.

Our Life Sciences segment is comprised of Pansend Life Sciences, LLC ("Pansend").

Pansend maintains controlling interests of approximately 80% in Genovel Orthopedics, Inc.

("Genovel"), which seeks to develop products to treat early osteoarthritis of the knee and approximately 56% in R2 Technologies, Inc.

("R2"), which develops aesthetic and medical technologies for the skin.

Pansend also invests in other early stage or developmental stage healthcare companies including an approximately 47% interest in MediBeacon Inc.

("MediBeacon"), and an approximately 26% interest in Triple Ring Technologies, Inc ("Triple Ring").

R2 Technologies, Inc.

("R2"), a company developing and commercializing breakthrough aesthetic medical and non-medical devices in the aesthetic dermatology market.

R2 develops and commercializes breakthrough aesthetic medical and non-medical devices in the aesthetic dermatology market.

Founded in 2014 by Pansend and Blossom Innovations, LLC, R2 exclusively licenses intellectual property developed at Massachusetts General Hospital and Harvard Medical School.

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Current lightening products and/or procedures may be ineffective, unpredictable or even harmful, and patients often must compensate for lack of efficacy by using makeup or concealers.

R2 has developed breakthrough CryoAesthetic technologies that uniquely deliver in-office treatments that provide patients skin lightening, brightening, skin tone evening and reduction or elimination of hyperpigmentation.

R2 uses patented CryoAesthetic technology, which is the use of controlled cooling to suppress melanin, inflammation and discomfort by precisely controlling time and temperature to deliver an effective treatment with no social downtime.

R2 has developed breakthrough CryoAesthetic technologies that uniquely deliver treatments that provide patients skin lightening, brightening, skin tone evening and reduction or elimination of hyperpigmentation and inflammation.

R2’s patented CryoModulation technology uses controlled cooling to suppress melanin, inflammation and discomfort by precisely controlling time and temperature to deliver an effective treatment with little social downtime.

In 2019, R2 closed its Series B “Commercialization” round with its strategic partner, Huadong Medicine Company, Ltd., (“Huadong”) and, in exchange for a staged $30 million investment, entered into an exclusive distribution agreement with Huadong for the Asia-Pacific region.

As a part of this agreement, Huadong’s existing sales force will be responsible for sales and marketing in the Asia-Pacific region, and R2 will receive a share of the residual profits from such sales.

As of December 31, 2020, R2 received two $10 million staged investments from Huadong based on the completion of certain pre-determined milestones at a post-money valuation of approximately $90 million.

On February 3, 2021, the Company announced that R2 received its third and final $10 million staged investment at a pre-determined post-money valuation of approximately $113 million.

As a part of this agreement, R2 will receive a share of the residual profits from such sales.

In 2021, Pansend invested $15 million in R2's Series C Preferred Stock at a post-money valuation of $150 million for R2.

R2 currently has three products in various stages of commercialization and development:

Glacial Rx – Launching in the first quarter of 2021 in the United States after receiving U.S.

Food and Drug Administration (“FDA”) clearance, the Glacial Rx system removes benign lesions of the skin (such as those caused by aging, sun damage and/or genetics), leaving the skin with a smoother and brighter appearance with little to no pain and downtime for the patient.

The Glacial Rx system will be sold to dermatologists and plastic surgeons and operated by trained healthcare professionals.

Glacial Rx – Launched in the first quarter of 2021 in the United States after receiving U.S.

Food and Drug Administration (“FDA”) clearance for use in dermatologic procedures for the removal of benign lesions of the skin and for use when cooling is intended for the temporary reduction of pain, swelling, inflammation, and hematoma from minor surgical procedures.

When used with R2 Dermabrasion Tips, the intended use includes general dermabrasion, scar revision, acne scar revision and tattoo removal.

The Glacial Rx system effectively and comfortably addresses these conditions, leaving the skin with a smoother and brighter appearance with little downtime for the patient.

The Glacial Rx system is sold to dermatologists and plastic surgeons and operated by trained healthcare professionals.

Glacial Spa – Launching in the first half of 2022 in China after receiving China Non-Medical Classification, the Glacial Spa is a cooling experience used to even skin tone, and brighten and lighten skin.

The Glacial Spa system will be sold by Huadong’s existing sales force to spas and operated by a trained aesthetician.

Glacial AI – Currently undergoing research and development, the Glacial AI is an autonomous cooling device focused on whole-body skin lightening and brightening.

MediBeacon, Inc.

The Glacial Spa system will be sold by Huadong’s existing sales force to spas and is intended to be operated by a trained aesthetician.

Glacial AI – Currently undergoing research and development, the Glacial AI is an autonomous, robotic cooling device focused on whole-body skin lightening and brightening.

MediBeacon, Inc.

("MediBeacon") develops proprietary non-invasive real-time monitoring system for the evaluation of kidney function.

MediBeacon is developing a proprietary non-invasive real-time monitoring system for the evaluation of kidney function.

Current methods to evaluate kidney function are indirect estimates that may be inaccurate and are not real-time.

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Contingent upon the regulatory approval of the TGFR system by the FDA, Huadong will make a second $15 million investment at a pre-money valuation of approximately $400 million.

In 2020, Huadong amended its commercial agreement, which will provide an additional $20 million pre-payment of future China royalties over the next two years to pursue Class 1 status in China, allowing the device to immediately enter the Chinese hospital system.

In 2020, Huadong amended its commercial agreement to provide an additional $20 million prepayment of future China royalties over the next two years to pursue Class 1 status in China, allowing the device to immediately enter the Chinese hospital system.

As of December 31, 2021, MediBeacon has received approximately $17.1 million to include China in MediBeacon's global pivotal study.

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Louis and the Mayo Clinic, have supported MediBeacon’s research in this area.

During 2020, the first in-human clinical studies were conducted to establish the feasibility of fluorescent tracer agent-based systems to quantify the permeability of the gastrointestinal tract in patients with active Crohn’s disease.

The first in-human clinical studies were recently completed to study the feasibility of fluorescent tracer agent-based systems to quantify the permeability of the gastrointestinal tract in patients with active Crohn’s disease.

Ocular angiography, which has the potential to diagnose and monitor vasculature leakage in the eye, a key factor in diagnosing and monitoring various diseases, including macular degeneration, diabetic retinopathy and retinal vasculitis while avoiding current potential clinical side effects such as allergic reactions, nausea and vomiting.

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Genovel Orthopedics, Inc.

Genovel is a medical device company developing novel partial and total knee replacements for the treatment of osteoarthritis of the knee based on patented technology developed at New York University School of Medicine.

Triple Ring Technologies

Triple Ring Technologies is a research and development engineering company specializing in medical devices, homeland security, imaging sensors, optics, fluidics, robotics and mobile healthcare.

Triple Ring is a research and development engineering company specializing in medical devices, homeland security, imaging sensors, optics, fluidics, robotics and mobile healthcare.

Spectrum Segment (HC2 Broadcasting Holdings Inc.)

HC2 Broadcasting Holdings Inc., ("HC2B" and together with its subsidiaries, "HC2 Broadcasting"), a majority-owned subsidiary of HC2 Holdings, Inc., is an owner and operator of broadcast TV stations throughout the U.S.

HC2 Broadcasting Holdings Inc., ("HC2B" and together with its subsidiaries, "Broadcasting"), a majority-owned subsidiary of INNOVATE, is an owner and operator of broadcast TV stations throughout the U.S.

and an avenue for high-end content providers to deliver their product OTA to more homes and, ultimately, mobile devices.

HC2 Broadcasting’s stations are interconnected to an internet protocol network backbone, which allows HC2 Broadcasting to monitor and operate the stations remotely, resulting in significant cost efficiencies.

As of December 31, 2020, HC2 Broadcasting operated approximately 221 stations, including 6 Full-Power stations, 49 Class A stations and 166 LPTV stations.

HC2 Broadcasting stations are collectively able to broadcast over 1,500 sub-channels and reach 94 markets in the U.S.

Broadcasting’s stations are interconnected to an internet protocol network backbone, which allows Broadcasting to monitor and operate the stations remotely, resulting in significant cost efficiencies.

As of December 31, 2021, Broadcasting operated approximately 246 stations, including 3 Full-Power stations, 53 Class A stations and 190 LPTV stations.

Broadcasting stations are collectively able to broadcast over 1,500 sub-channels and reach 103 markets in the U.S.

and Puerto Rico, including 34 of the top 35 markets.

HC2B has approximately 100 stations concentrated in the top 35 markets.

HC2 Broadcasting also owns approximately 200 construction permits for broadcast stations, a portion of which are expected to be selectively built and licensed over the next 24 months, increasing HC2 Broadcasting’s footprint to approximately 130 markets.

HC2 Broadcasting includes Azteca America,.

Broadcasting also owns approximately 19 construction permits for broadcast stations, a portion of which may be selectively built and licensed over the next 24 months, increasing Broadcasting’s footprint to approximately 110 markets.

Broadcasting includes Azteca America.

Azteca America airs Spanish language programming targeting U.S.

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("TV Azteca"), Mexico’s second largest broadcast network, under a multi-year Programming Licensing Agreement ("PLA").

As of December 31, 2020, Azteca America was carried on approximately 85 HC2 Broadcasting stations.

HC2 Broadcasting has employees in the U.S.

As of December 31, 2021, Azteca America was carried on approximately 88 Broadcasting stations.

Broadcasting has employees in the U.S.

and contracted employees in Mexico under a Broadcast Services Agreement ("BSA") with TV Azteca dedicated to the operations of Azteca America.

Operating Broadcast Stations

Below are HC2 Broadcasting’s operating stations as of December 31, 2020, listed by call sign and market rank:

Below are Broadcasting’s operating stations as of December 31, 2021, listed by call sign and market rank:

Market Market

Station Service

New York, NY 1 WTXX-LD Full-Power Station (b)

New York, NY 1 W28ES-D LPTV Station

WKOB-LD LPTV Station

W02CY-D LPTV Station

Los Angeles, CA 2 KSKJ-CD Class A Station

KHIZ-LD LPTV Station

Chicago, IL 3 WPVN-CD Class A Station

W31EZ-D LPTV Station

Philadelphia, PA 4 WPSJ-CD Class A Station

WZPA-LD LPTV Station

Los Angeles, CA 2 KHIZ-LD LPTV Station

KSKJ-CD Class A Station

Chicago, IL 3 W31EZ-D LPTV Station

WPVN-CD Class A Station

Philadelphia, PA 4 W25FG-D LPTV Station

WDUM-LD LPTV Station

W25FG-LD LPTV Station

Worth, TX 5 KNAV-LP LPTV Station

KODF-LD LPTV Station

WPSJ-CD Class A Station

WZPA-LD LPTV Station

Worth, TX 5 K07AAD-D LPTV Station

KHPK-LD LPTV Station

K07AAD-D LPTV Station

KPFW-LD LPTV Station

KJJM-LD LPTV Station

San Francisco - Oakland - San Jose, CA 6 KEMO-TV Full-Power Station

KQRO-LD LPTV Station

Houston, TX 8 KUGB-CD Class A Station

KNAV-LD LPTV Station

KODF-LD LPTV Station

KPFW-LD LPTV Station

Houston, TX 6 KBMN-LD LPTV Station

KEHO-LD LPTV Station

KUGB-CD Class A Station

KUVM-CD Class A Station

KUVM-LD LPTV Station

KEHO-LD LPTV Station

KBMN-LD LPTV Station

Boston, MA 9 WLEK-LD LPTV Station

Atlanta, GA 10 WYGA-CD Class A Station

WDWW-LD LPTV Station

San Francisco - Oakland - San Jose, CA 7 KEMO-TV Full-Power Station

KQRO-LD LPTV Station

Atlanta, GA 8 WDWW-LD LPTV Station

WUEO-LD LPTV Station

WUVM-LP LPTV Station

Phoenix - Prescott, AZ 11 KPDF-CD Class A Station

K18JL-D LPTV Station

WYGA-CD Class A Station

Boston, MA 10 WLEK-LD LPTV Station

Phoenix - Prescott, AZ 11 K12XP-D LPTV Station

KPDF-CD Class A Station

KTVP-LD LPTV Station

Tampa - St Petersburg - Sarasota, FL 12 WXAX-CD Class A Station

Tampa - St Petersburg - Sarasota, FL 12 W16DQ-D LPTV Station

W31EG-D LPTV Station

WTAM-LD LPTV Station

W16DQ-D LPTV Station

W15CM-D LPTV Station

WXAX-CD Class A Station

Seattle, WA 13 KUSE-LD LPTV Station

Detroit, MI 14 WDWO-CD Class A Station

WUDL-LD LPTV Station

Minneapolis - St.

Paul, MN 15 K33LN-D Class A Station

Paul, MN 14 K28PQ-D LPTV Station

K33LN-D Class A Station

KJNK-LD LPTV Station

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KWJM-LD LPTV Station

K28PQ-D LPTV Station

Detroit, MI 15 WDWO-CD Class A Station

WUDL-LD LPTV Station

Lauderdale, FL 16 W16CC-D LPTV Station

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WFEF-LD LPTV Station

Cleveland - Akron - Canton, OH 19 WUEK-LD LPTV Station

WQDI-LD LPTV Station

KONV-LD LPTV Station

Cleveland - Akron - Canton, OH 19 KONV-LD LPTV Station

WEKA-LD LPTV Station

Sacramento - Stockton - Modesto, CA 20 KBTV-CD Class A Station

KFTY-LD LPTV Station

KFMS-LD LPTV Station

WQDI-LD LPTV Station

WUEK-LD LPTV Station

Sacramento - Stockton - Modesto, CA 20 K04QR-D LPTV Station

K12XJ-D LPTV Station

KAHC-LD LPTV Station

K04QR-D LPTV Station

KFKK-LD LPTV Station

KBIS-LD LPTV Station

K12XJ-D LPTV Station

Charlotte, NC 21 W15EB-D Class A Station

WHEH-LD LPTV Station

WVEB-LD LPTV Station

Portland, OR 22 KOXI-CD Class A Station

KBTV-CD Class A Station

KFKK-LD LPTV Station

KFMS-LD LPTV Station

KFTY-LD LPTV Station

Louis, MO 21 K25NG-D Class A Station

K35OY-D LPTV Station

KBGU-LD LPTV Station

WODK-LD LPTV Station

KPTN-LD LPTV Station

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WLEH-LD LPTV Station

Pittsburgh, PA 24 WWKH-CD Class A Station

WJMB-CD Class A Station

WODK-LD LPTV Station

Portland, OR 22 KOXI-CD Class A Station

Charlotte, NC 23 W15EB-D Class A Station

WHEH-LD LPTV Station

WVEB-LD LPTV Station

Pittsburgh, PA 24 WJMB-CD Class A Station

WKHU-CD Class A Station

WMVH-CD Class A Station

WWKH-CD Class A Station

WWLM-CD Class A Station

WKHU-CD Class A Station

Indianapolis, IN 25 WUDZ-LD LPTV Station

Indianapolis, IN 25 WQDE-LD LPTV Station

WSDI-LD LPTV Station

WQDE-LD LPTV Station

WUDZ-LD LPTV Station

Baltimore, MD 26 WQAW-LP LPTV Station

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WNCB-LD LPTV Station

San Diego, CA 28 KSKT-CD Class A Station

Nashville, TN 29 WCTZ-LD LPTV Station

WKUW-LD LPTV Station

San Diego, CA 29 KSKT-CD Class A Station

Salt Lake City, UT 30 KPNZ Full-Power Station

KBTU-LD LPTV Station

San Antonio, TX 31 KVDF-CD Class A Station

K17MJ-D LPTV Station

KSAA-LP LPTV Station

KOBS-LD LPTV Station

Columbus, OH 30 WDEM-CD Class A Station

San Antonio, TX 31 K17MJ-D LPTV Station

K25OB-D LPTV Station

KISA-LD LPTV Station

KOBS-LD LPTV Station

KSAA-LP LPTV Station

KSSJ-LD LPTV Station

KVDF-CD Class A Station

Kansas City, MO 32 KAJF-LD LPTV Station

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Hartford - New Haven, CT 33 WRNT-LD LPTV Station

Columbus, OH 34 WDEM-CD Class A Station

WTXX-LD LPTV Station

Salt Lake City, UT 34 KBTU-LD LPTV Station

Milwaukee, WI 35 WTSJ-LD LPTV Station

West Palm Beach - Ft.

Pierce, FL 36 WWCI-CD Class A Station

WDOX-LD LPTV Station

Pierce, FL 36 WDOX-LD LPTV Station

WWCI-CD Class A Station

WXOD-LD LPTV Station

Las Vegas, NV 39 KNBX-CD Class A Station

KHDF-CD Class A Station

K36NE-D Class A Station

Las Vegas, NV 39 K36NE-D Class A Station

KEGS-LD LPTV Station

KHDF-CD Class A Station

KNBX-CD Class A Station

KVPX-LD LPTV Station

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KVAT-LD LPTV Station

Jacksonville, FL 41 WODH-LD LPTV Station

Jacksonville, FL 42 WJXE-LD LPTV Station

WKBJ-LD LPTV Station

WODH-LD LPTV Station

WRCZ-LD LPTV Station

WJXE-LD LPTV Station

Oklahoma City, OK 43 KOHC-CD Class A Station

Oklahoma City, OK 43 KBZC-LD LPTV Station

KOHC-CD Class A Station

KTOU-LD LPTV Station

KBZC-LD LPTV Station

Birmingham - Anniston - Tuscaloosa, AL 44 WUOA-LD LPTV Station

Albuquerque - Santa Fe, NM 46 KWPL-LD LPTV Station

KQDF-LP LPTV Station

New Orleans, LA 50 WTNO-LP Class A Station

WQDT-LD LPTV Station

Buffalo, NY 52 WVTT-CD Class A Station

WWHC-LP LPTV Station

Albuquerque - Santa Fe, NM 45 KQDF-LP LPTV Station

KWPL-LD LPTV Station

Birmingham - Anniston - Tuscaloosa, AL 47 WUDX-LD LPTV Station

WUOA-LD LPTV Station

New Orleans, LA 50 WQDT-LD LPTV Station

WTNO-LP Class A Station

Myers - Naples, FL 51 WGPS-LD LPTV Station

Richmond - Petersburg, VA 54 WUDW-LD LPTV Station

WFWG-LD LPTV Station

Memphis, TN 53 KPMF-LD LPTV Station

W15EA-D Class A Station

WPED-LD LPTV Station

WQEK-LD LPTV Station

WQEO-LD LPTV Station

Buffalo, NY 54 WVTT-CD Class A Station

WWHC-LD LPTV Station

Richmond - Petersburg, VA 55 WFWG-LD LPTV Station

WUDW-LD LPTV Station

WWBK-LD LPTV Station

Mobile, AL - Pensacola, FL 56 WEDS-LD LPTV Station

WWBH-LP LPTV Station

Fresno - Visalia, CA 57 K17JI-D Class A Station

KZMM-CD Class A Station

Mobile, AL - Pensacola, FL 57 WWBH-LP LPTV Station

WEDS-LD LPTV Station

Tulsa, OK 58 KZLL-LD LPTV Station

KUOC-LD LPTV Station

Little Rock - Pine Bluff, AR 62 KWMO-LD LPTV Station

Tulsa, OK 60 KUOC-LD LPTV Station

KZLL-LD LPTV Station

Little Rock - Pine Bluff, AR 61 K23OW-D LPTV Station

KENH-LD LPTV Station

K23OW-D LPTV Station

KWMO-LD LPTV Station

Flint - Saginaw - Bay City, MI 67 W35DQ-D LPTV Station

WFFC-LD LPTV Station

Des Moines - Ames, IA 69 KAJR-LD LPTV Station

KRPG-LD LPTV Station

KCYM-LD LPTV Station

KRPG-LD LPTV Station

Wichita - Hutchinson, KS 71 KFVT-LD LPTV Station

Omaha, NE 73 KAJS-LD LPTV Station

KQMK-LD LPTV Station

Wichita - Hutchinson, KS 72 KFVT-LD LPTV Station

Springfield, MO 73 KFKY-LD LPTV Station

KCNH-LD LPTV Station

Springfield, MO 74 KCNH-LD LPTV Station

KFKY-LD LPTV Station

Charleston - Huntington, WV 76 WOCW-LD LPTV Station

Rochester - Mason City - Austin, NY 76 WGCE-CD Class A Station

Flint - Saginaw - Bay City, MI 77 W35DQ-D LPTV Station

WFFC-LD LPTV Station

Huntsville - Decatur - Florence, AL 77 W34EY-D Class A Station

1 unchanged sentence

WZCK-LD LPTV Station

Waco - Temple - Bryan, TX 82 KZCZ-LD LPTV Station

KAXW-LD LPTV Station

Harlingen - Weslaco - Brownsville - McAllen, TX 83 KRZG-CD Class A Station

KAZH-LP LPTV Station

KNWS-LP LPTV Station

Rochester, NY 80 WGCE-CD Class A Station

Paducah, KY - Cape Girardeau, MO - Harrisburg, IL 82 W29CI-D Class A Station

Charleston, SC 83 WBSE-LD LPTV Station

Waco - Temple - Bryan, TX 84 KAXW-LD LPTV Station

KZCZ-LD LPTV Station

Shreveport, LA 86 K36MU-D LPTV Station

Champaign - Springfield - Decatur, IL 87 W23EW-D LPTV Station

WCQA-LD LPTV Station

Savannah, GA 89 WUET-LD LPTV Station

WDID-LD LPTV Station

Cedar Rapids - Waterloo - Iowa City, IA 90 KWKB Full-Power Station

KFKZ-LD LPTV Station

Charleston, SC 91 WBSE-LD LPTV Station

WEAE-LD LPTV Station

Chattanooga, TN 89 WYHB-CD Class A Station

Baton Rouge, LA 94 K29LR-D LPTV Station

K27NB-D LPTV Station

Savannah, GA 90 WDID-LD LPTV Station

WUET-LD LPTV Station

Cedar Rapids - Waterloo - Iowa City, IA 91 K17MH-D LPTV Station

KFKZ-LD LPTV Station

Harlingen - Weslaco - Brownsville - McAllen, TX 92 KAZH-LP LPTV Station

KNWS-LD LPTV Station

KRZG-CD Class A Station

Baton Rouge, LA 93 K27NB-D LPTV Station

K29LR-D LPTV Station

South Bend - Elkhart, IN 96 KPDS-LD LPTV Station

Smith - Fayetteville - Springdale - Rogers, AR 101 KFLU-LD LPTV Station

KAJL-LD LPTV Station

Boise, ID 102 K31FD-D Class A Station

KFLL-LD LPTV Station

Smith - Fayetteville - Springdale - Rogers, AR 98 KAJL-LD LPTV Station

KFLU-LD LPTV Station

Greenville - New Bern - Washington, NC 100 W35DW-D LPTV Station

Boise, ID 103 K17ED-D LPTV Station

K31FD-D Class A Station

KBKI-LD LPTV Station

Augusta, GA - Aiken, SC 108 WIEF-LD LPTV Station

Wayne, IN 110 WFWC-CD Class A Station

KFLL-LD LPTV Station

Reno, NV 104 K07AAI-D LPTV Station

Evansville, IN 105 WDLH-LD LPTV Station

WEIN-LD LPTV Station

WELW-LD LPTV Station

Tallahassee, FL - Thomasville, GA 107 W21EL-D LPTV Station

Lincoln - Hastings - Kearney, NE 108 KIUA-LD LPTV Station

Wayne, IN 109 W25FH-D LPTV Station

W30EH-D LPTV Station

WCUH-LD LPTV Station

WFWC-CD Class A Station

WODP-LD LPTV Station

W25FH-D LPTV Station

W30EH-D LPTV Station

Tyler - Longview- Nacogdoches, TX 114 KCEB Full-Power Station

KPKN-LD LPTV Station

Augusta, GA - Aiken, SC 110 WIEF-LD LPTV Station

Tyler - Longview- Nacogdoches, TX 113 KBJE-LD LPTV Station

KCEB Full-Power Station

KDKJ-LD LPTV Station

KBJE-LD LPTV Station

KKPD-LD LPTV Station

Yakima - Pasco - Richland - Kennewick, WA 118 K33EJ-D Class A Station

Macon, GA 119 W28EU-D LPTV Station

Montgomery - Selma, AL 122 WQAP-LD LPTV Station

WDSF-LD LPTV Station

KPKN-LD LPTV Station

Eugene, OR 116 K06QR-D LPTV Station

KORY-CD Class A Station

Yakima - Pasco - Richland - Kennewick, WA 118 K28QK-D LPTV Station

K33EJ-D Class A Station

Fargo - Valley City, ND 119 K15MR-D LPTV Station

Lafayette, LA 120 K21OM-D LPTV Station

Bakersfield, CA 125 KTLD-CD Class A Station

KXBF-LD LPTV Station

Santa Barbara - San Luis Obispo, CA 126 KSBO-CD Class A Station

Macon, GA 121 W28EU-D LPTV Station

WJDO-LD LPTV Station

Peoria - Bloomington, IL 122 W27EQ-D LPTV Station

Santa Barbara - San Luis Obispo, CA 123 KDFS-CD Class A Station

KLDF-CD Class A Station

KQMM-CD Class A Station

KSBO-CD Class A Station

KVMM-CD Class A Station

KDFS-CD Class A Station

KLDF-CD Class A Station

KZDF-LP LPTV Station

KZDF-LD LPTV Station

Montgomery - Selma, AL 125 WDSF-LD LPTV Station

WQAP-LD LPTV Station

Bakersfield, CA 126 KTLD-CD Class A Station

KXBF-LD LPTV Station

Wilmington, NC 127 WQDH-LD LPTV Station

Corpus Christi, TX 128 KYDF-LD LPTV Station

K21OC-D LPTV Station

La Crosse - Eau Claire, WI 128 W23FC-D LPTV Station

Columbus, GA - Opelika - Auburn, AL 129 W29FD-D LPTV Station

W31EU-D LPTV Station

Corpus Christi, TX 130 K21OC-D LPTV Station

K32OC-D LPTV Station

KCCX-LD LPTV Station

Columbus, GA - Opelika - Auburn, AL 130 W29FD-D LPTV Station

KYDF-LD LPTV Station

Amarillo, TX 134 KAUO-LD LPTV Station

1 unchanged sentence

Palm Springs, CA 140 K21DO-D Class A Station

Lubbock, TX 142 K24GP LPTV Station

Lubbock, TX 141 K32OV-D LPTV Station

KNKC-LD LPTV Station

Topeka, KS 146 K35KX-D LPTV Station

Joplin, MO - Pittsburg, KS 153 KRLJ-LD LPTV Station

KPJO-LD LPTV Station

Joplin, MO - Pittsburg, KS 153 KPJO-LD LPTV Station

KRLJ-LD LPTV Station

Biloxi-Gulfport, MS 155 W33EG-D LPTV Station

1 unchanged sentence

Jackson, TN 175 WYJJ-LD LPTV Station

Bowling Green, KY 177 WKUT-LD LPTV Station

WCZU-LD LPTV Station

Puerto Rico NA WOST Full-Power Station

Bowling Green, KY 179 WCZU-LD LPTV Station

WKUT-LD LPTV Station

Puerto Rico NA W20EJ-D LPTV Station

W27DZ-D LPTV Station

WOST Full-Power Station

WQQZ-CD Class A Station

W20EJ-D LPTV Station

WWKQ-LD LPTV Station

W27DZ-D LPTV Station

(a) Rankings are based on the relative size of a station’s Designated Market Area ("DMA") among the 210 generally recognized DMAs in the United States as estimated by Nielsen Media Research (Nielsen) as of December 31, 2020.

(b) WTXX-LD is an LPTV license broadcasting on full-power station WEDW, pursuant to a channel-sharing agreement.

The station is currently broadcasting from Stamford, CT.

A DTS installation is underway that will enable the station to broadcast from Manhattan, NY.

Broadcast Operations

HC2 Broadcasting carries more than 70 networks on its stations, distributing content across the U.S.

Broadcasting carries more than 70 networks on its stations, distributing content across the U.S.

Broadcasting provides free OTA programming to television viewing audiences in the communities it serves.

The programming Broadcasting distributes includes networks targeting shopping, weather, sports and entertainment programming, as well as religious networks and networks targeting select ethnic groups.

Broadcasting generates broadcast station revenue and network advertising revenue from its operations.

Broadcast station revenue is generated primarily from the sale of television airtime in return for a fixed fee or a portion of the related ad sales.

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In the scatter market, advertisers buy advertising time close to when the commercials will be run and varies quarter over quarter.

In some cases, the network advertising sales are subject to impressions guarantees that require the Company to provide additional advertising time if the guaranteed audience levels are not achieved.

In some cases, the network advertising sales are subject to impressions guarantees that require the Broadcasting to provide additional advertising time if the guaranteed audience levels are not achieved.

Network advertising revenue is recognized when advertising spots are aired, and as impression guarantees, if any, are achieved.

2 unchanged sentences

If there is a guarantee to deliver a targeted audience number of impressions, revenues are recognized based on the proportion of the audience impressions delivered to the total guaranteed in the contract.

For the local inventory the Company sells national spot advertising and local advertising.

For the local inventory, Broadcasting sells national spot advertising and local advertising.

National spot advertising represents time sold to advertisers that advertise in more than one DMA.

2 unchanged sentences

Network distribution revenue consists of fees charged and payments received from cable, satellite and other multiple video program distribution (“MVPD”) systems for their retransmission of our network content.

The Company’s network is aired on MVPDs pursuant to multi-year carriage agreements that provide for the level of carriage that the Company’s network will receive.

Broadcasting’s network is aired on MVPDs pursuant to multi-year carriage agreements that provide for the level of carriage that the Company’s network will receive.

Carriage of the network is generally determined by package, such as whether the network is included in the more widely distributed, general entertainment packages offered or lesser-distributed, specialized packages, such as U.S.

Hispanic-targeted or Spanish language package.

Network distribution revenue is determined on the contractual rate-per-subscriber negotiated in the agreements, the average number of subscribers that receive content, and the market demand for the content that the Company provides.

Network distribution fees received from MVPDs are recognized as revenue in the period that services are provided.

HC2 Broadcasting’s strategy includes the following initiatives:

• HC2 Broadcasting is principally designed to be a nationwide OTA distribution platform, targeting the growing number of OTA households in the U.S.;

• HC2 Broadcasting's vision is to capitalize on the opportunities to bring valuable content to more viewers over-the-air and to position itself for the changing media landscape and to take advantage of the technology advances rapidly underway in the industry.

• As of December 31, 2020, 203 operating stations are connected to HC2 Broadcasting's cloud-based IP backbone, can be operated and monitored remotely, allowing for substantial cost savings and operating efficiencies.

In 2018, FCC deregulation in TV broadcasting has eliminated the need for full time employees and studio facilities in markets where HC2 Broadcasting operates Full-Power and Class A stations, thus allowing HC2 Broadcasting to operate these stations remotely at greater cost efficiency;

• HC2 Broadcasting's major focus is to attract the highest quality content providers looking for nationwide distribution.

With its national footprint and cloud-based infrastructure, HC2 Broadcasting also expects to realize premium pricing for content distribution;

• HC2 Broadcasting's growing revenue source is from providing national carriage to content providers.

Pricing carriage contracts is in part determined by the signal contour of the broadcast station and the number of OTA TV households in a given market, as well as market supply and demand;

• As an anchor network tenant, Azteca America is distributed on the HC2 Broadcasting platform in 60+ markets.

Broadcasting’s strategy includes the following initiatives:

• Broadcasting is principally designed to be a nationwide OTA distribution platform, targeting the growing number of OTA households in the U.S.;

• Broadcasting's vision is to capitalize on the opportunities to bring valuable content to more viewers over-the-air and to position itself for the changing media landscape and to take advantage of the technology advances rapidly underway in the industry;

• As of December 31, 2021, 232 operating stations are connected to Broadcasting's cloud-based IP backbone and can be operated and monitored remotely, allowing for substantial cost savings and operating efficiencies.

In 2018, FCC deregulation in TV broadcasting eliminated the need for full time employees and studio facilities in markets where Broadcasting operates Full-Power and Class A stations, thus allowing Broadcasting to operate these stations remotely at greater cost efficiency;

• Broadcasting's major focus is to attract the highest quality content providers looking for nationwide distribution.

With its national footprint and cloud-based infrastructure, Broadcasting also expects to realize premium pricing for content distribution;

• Broadcasting's growing revenue source is from providing national carriage to content providers.

Carriage contracts pricing is in part determined by the signal contour of the broadcast station and the number of OTA TV households in a given market, as well as market supply and demand;

• As an anchor network tenant, Azteca America is distributed on the Broadcasting platform in 60+ markets.

New Broadcast TV Technology:

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Many of these features will be available to mobile devices.

As of December 31, 2020, HC2 Broadcasting employed approximately 58 people across the U.S.

As of December 31, 2021, Broadcasting employed approximately 55 people across the U.S.

Operating Segment and Related Information for additional detail regarding our Segment's operations and financial information.

Insurance Segment (Continental Insurance Group Ltd.)

CIG currently provides long-term care, life, annuity, and other accident and health coverage to approximately 124,000 individuals through CGI.

The benefits provided by CIG's insurance operations help protect policy and certificate holders from the financial hardships associated with illness, injury, loss of life, or income discontinuation.

CIG has a concentrated focus on long-term care insurance and is committed to the continued delivery of best-practice services as established by CIG’s insurance operations to its policy and certificate holders.

Through investments in technology, a commitment to attracting, developing and retaining best-in-class insurance professionals, a dedication to continuing process improvements, and a focus on strategic growth, we believe CIG is well equipped to maintain and improve the level of service provided to its customers and assume a leading role in the long-term care industry.

CIG’s plan is to leverage its existing platform and industry expertise to identify strategic growth opportunities for managing closed blocks of long-term care business.

Growth opportunities are expected to come from:

• Future acquisitions of long-term care businesses and/or closed blocks of long-term care policies;

• Reinsurance arrangements;

• Third party administration arrangements;

• Strategically diversifying into other product lines.

Long-Term Care Insurance

CIG's long-term care insurance products pay a benefit that is either a specified daily indemnity amount or reimbursement of actual charges up to a daily maximum for long-term care services provided in the insured’s home or in assisted living or nursing facilities.

Benefits begin after a waiting period, usually 90 days or less, and are generally paid for a period of three years, six years, or the policy holder's lifetime.

Substantially all of the in-force long-term care insurance policies were sold after 1995, with all sales then being discontinued in January 2010.

Policies were issued in all states except for New York, with Texas being the largest issue state with approximately 20% of the business.

The existing block of policies includes both individual and group products, but all individuals were individually underwritten.

CIG's long-term care insurance products were sold on a guaranteed renewable basis which allows us to re-price in-force policies, subject to regulatory approval.

Profitability of CIG's long-term care block is affected by premium rate increases, persistency, investment returns, claims experience, and the level of administrative expenses.

As part of CIG's strategy for its long-term care insurance business, management has been implementing, and expects to continue to pursue, significant premium rate increases on its blocks of business as actuarially justified.

Premium rates vary by age and are based on assumptions concerning morbidity, mortality, persistency, administrative expenses, and investment yields.

CIG develops its assumptions based on its own claims and persistency experience and published industry tables.

Life Insurance and Annuities

CIG's life insurance products include Traditional, Term, Universal, and Interest Sensitive Life Insurance.

Its annuity products include Flexible and Single Premium Deferred Annuities.

CIG's life insurance business provides a personal financial safety net for individuals and their families.

These products provide protection against financial hardship after the death of an insured.

Some of these products also offer a savings element that can help accumulate funds to meet future financial needs.

Annuities are long-term retirement saving instruments that benefit from income accruing on a tax-deferred basis.

The issuer of the annuity collects premiums, credits interest or earnings on the policy and pays out a benefit upon death, surrender or annuitization.

All life insurance and annuity products are closed to new business.

The life insurance products were issued with both full and simplified underwriting.

Other Accident & Health

CIG’s accident and health products, other than Long-Term Care Insurance, include accidental death, accidental death and dismemberment disability income, hospital expense, hospital indemnity, and major medical individual insurance policies.

These products provide from partial reimbursement to full reimbursement of covered medical and related expenses.

All products were sold prior to the introduction of the Affordable Care Act and these product lines are closed to new business.

If not otherwise exempted from the requirements of the Affordable Care Act, the policies are grandfathered under the Affordable Care Act and not subject to the requirements of the Affordable Care Act.

A limited number of these policies were guaranteed issued, although the majority of the policies were issued with individual underwriting.

CIG's long-term care insurance policies were marketed and sold to individuals between 1986 and 2010 for the purpose of providing defined levels of protection against the significant and escalating costs of long-term care services provided in the insured’s home or in assisted living or nursing facilities.

Though CIG no longer actively markets new insurance products, it continues to service and receive net renewal premiums on its in-force Long-Term Care, Life, Annuity, and Other Accident & Health blocks for approximately 124,000 lives.

Employees and Operations

As of December 31, 2020, CIG employed 144 people, the majority of whom are employed on a salaried basis with some on an hourly basis.

Besides eleven remote employees working in various states, all other employees typically work out of the home office located in Austin, Texas.

However, due to the COVID-19 pandemic, most employees are working remotely with the exception of certain essential workers remaining in the home office.

CIG considers its relations with its employees to be satisfactory and has never experienced a work stoppage or other labor disturbance.

All operating centers maintain a cost effective and efficient operating model.

Administrative Services Agreement

On December 24, 2015, an Administrative Services Agreement (the "Administrative Services Agreement") was entered into with Great American, pursuant to which Great American Life Insurance Company ("GALIC") agreed to continue to administer the Insurance Company’s life and annuity businesses for a period of no less than five years.

Effective July 1, 2019, the Insurance Company and GALIC entered into Amendment No.

1 to Administrative Services Agreement which removed the five-year duration clause effectively extending the duration of the Administrative Services Agreement.

The KIC acquisition included the assumption of numerous existing, or the establishment of new, third party administrator ("TPA") agreements to continue to provide services and perform processes critical (actuarial, claims processing, rate increase work etc.) to KIC’s ability to continue producing outputs.

The majority of KIC’s insurance contracts are currently administered by these TPAs.

CIG has assumed the administration for the KIC Life and Annuity blocks previously administered by one of these TPAs.

CIG reinsures through cession agreements a significant portion of its insurance business with unaffiliated reinsurers.

In a reinsurance transaction, a reinsurer agrees to indemnify another insurer for part or all of its liability under a policy or policies it has issued for an agreed upon premium.

CIG participates in reinsurance cession activities in order to minimize exposure to significant risks, limit losses, and provide additional capacity for future growth.

CIG also obtains reinsurance to meet certain capital requirements.

Under the terms of the reinsurance agreements, the reinsurer agrees to reimburse CIG for the ceded amount in the event a claim is paid.

Cessions under reinsurance agreements do not discharge CIG's obligations as the primary insurer.

If the assuming reinsurer in a reinsurance agreement is unable to meet its obligations, CIG remains contingently liable.

In the event that reinsurers do not meet their obligations under the terms of the reinsurance agreement, reinsurance recoverable balances could become uncollectible.

CIG evaluates the financial condition of reinsurers to whom CIG cedes business and monitors concentration of credit risk to minimize our exposure.

CIG may also require acceptable collateral to support reinsurance recoverable balances.

The collectability of CIG’s reinsurance recoverable is primarily a function of the solvency of the individual reinsurers.

Although CIG has controls to minimize its exposure, the insolvency of a reinsurer or the inability or unwillingness of a reinsurer to comply with the terms of a reinsurance contract could have a material adverse effect on CIG’s results of operations.

CIG has various quota share reinsurance agreements in place for its long-term care business, with ceded reinsurance totaling $524 million in active life reserves and $125 million in disabled life reserves.

Amounts recoverable from reinsurers are estimated in a manner consistent with the gross liability associated with the reinsured policy.

Reserves for Policy Contracts and Benefits

The applicable insurance laws under which insurance companies operate require that they report, as liabilities, policy reserves to meet future obligations on their outstanding policies.

These reserves are the amounts which, with the additional premiums to be received and interest thereon compounded annually at certain assumed rates, are calculated to be sufficient to meet the various policy and contract obligations as they mature.

These laws specify that the reserves shall not be less than reserves calculated using certain specified mortality and morbidity tables, interest rates, and methods of valuation required for statutory accounting.

CIG calculates reserves in conformity with accounting principles generally accepted in the United States of America ("U.S.

GAAP"), which calculations can differ from those specified by the laws of the various states and reported in the statutory financial statements.

These differences result from the use of mortality and morbidity tables and interest assumptions which CIG believes are more representative of the expected experience for these policies than those required for statutory accounting purposes and also result from differences in actuarial reserving methods.

The assumptions CIG uses to calculate its reserves are intended to represent an estimate of experience for the period that policy benefits are payable.

If actual experience is more favorable than our reserve assumptions, then reserves should be adequate to provide for future benefits and expenses.

If experience is less favorable than the reserve assumptions, additional reserves may be required.

The key experience assumptions include claim incidence rates, claim resolution rates, mortality and morbidity rates, policy persistency, interest rates, crediting spreads, and premium rate increases.

CIG periodically reviews its experience and updates its policy reserves and reserves for all claims incurred, as it believes appropriate.

The statements of income include the annual change in reserves for future policy and contract benefits.

The change reflects a normal accretion for premium payments and interest buildup and decreases for policy terminations such as lapses, deaths, and benefit payments.

If policy reserves using best estimate assumptions as of the date of a test for loss recognition are higher than existing policy reserves net of any deferred acquisition costs, the increase in reserves necessary to recognize the deficiency is also included in the change in reserves for future policy and contract benefits.

For further discussion of reserves, refer to the risks related to the Insurance Segment within "Risk Factors" contained herein in Item 1A, the discussion of the Insurance segment operating results included in "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein in Item 7, and Note 2.

Summary of Significant Accounting Policies and Note 13.

Life, Accident and Health Reserves of the "Notes to Consolidated Financial Statements."

CIG manages its cash and invested assets using an approach that is intended to balance quality, diversification, asset/liability matching, liquidity needs and investment return.

The goals of the investment process are to optimize after-tax, risk-adjusted investment income and after-tax, risk-adjusted total return while managing the assets and liabilities on a cash flow and duration basis.

CIG’s liabilities are primarily supported by investments in investment grade, fixed maturity securities reflected on the Company’s consolidated balance sheets.

The Company filed an Investment Management Agreement Form D application with the Texas Department of Insurance ("TDOI") to appoint CIG, an affiliate, as investment manager, effective April 1, 2020.

The TDOI issued a “no action” letter dated May 14, 2020 with respect to the April 1, 2020 Investment Management Agreement.

The CGIC Board of Directors has approved the extension of the current IMA for a six month period and notification has been given to the TDOI on February 26, 2021.

The TDOI responded on March 1, 2021 expressing no concern with the extension request.

CIG entered into a new Investment Management Agreement with Goldman Sachs Asset Management, L.P.

(“GSAM”) dated December 23, 2020 to begin providing services no earlier than January 1, 2021.

Approximately one-third of the portfolio will be managed by GSAM while the remaining two-thirds remains with the affiliate investment manager, CIG.

CIG's insurance company subsidiary is subject to regulations in the jurisdictions where it does business.

In general, the insurance laws of the various states establish regulatory agencies with broad administrative powers governing, among other things, premium rates, solvency standards, licensing of insurers, agents and brokers, trade practices, forms of policies, maintenance of specified reserves and capital for the protection of policyholders, deposits of securities for the benefit of policyholders, investment activities and relationships between insurance subsidiaries and their parents and affiliates.

Material transactions between insurance subsidiaries and their parents and affiliates generally must receive prior approval of the applicable insurance regulatory authorities and be disclosed.

In addition, while differing from state to state, these regulations typically restrict the maximum amount of dividends that may be paid by an insurer to its stockholders in any twelve-month period without advance regulatory approval.

Such limitations are generally based on net earnings or statutory surplus.

Our insurance subsidiary is examined periodically by its state of domicile and by other states in which it is licensed to conduct business.

The domestic examinations have traditionally emphasized financial matters from the perspective of protection of policyholders, but they can and have covered other subjects that an examining state may be interested in reviewing, such as market conduct issues.

Examinations in other states more typically focus on market conduct, such as a review of sales practices, including the content and use of advertising materials and the licensing and appointing of agents and brokers, as well as underwriting, claims, and customer service practices, and identification and handling of unclaimed property to determine compliance with state laws.

Our insurance subsidiary is also subject to assessments by state insurance guaranty associations to cover the proportional cost of insolvent or failed insurers.

Financial impact of annual guaranty assessments for CGI has not been material.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), among other things, established a Federal Insurance Office ("FIO") within the U.S.

The Dodd-Frank Act requires the promulgation of regulations for the FIO to carry out its mandate to focus on systemic risk oversight.

The FIO gathered information regarding the insurance industry and submitted a report to Congress in December 2013.

The report concluded that a hybrid approach to regulation, involving a combination of state and federal government action, could improve the U.S.

insurance system by attaining uniformity, efficiency and consistency, particularly with respect to solvency and market conduct regulation.

The FIO has issued additional reports since that time on various aspects of the insurance sector and insurance regulation.

We cannot predict the extent to which any of these matters might result in changes to the current state-based system of insurance industry regulation or ultimately impact the Company’s operations.

Risk-based capital ("RBC') standards for U.S.

life insurance companies are prescribed by the National Association of Insurance Commissioners ("NAIC").

The domiciliary state of our insurance subsidiary has adopted a version of the NAIC RBC for Insurers Model Act, which prescribes a system for assessing the adequacy of statutory capital and surplus for all life and health insurers.

The basis of the system is a risk-based formula that applies prescribed factors to the various risk elements in a life and health insurer's business to report a minimum capital requirement proportional to the amount of risk assumed by the insurer.

The life and health RBC formula is designed to measure annually (i) the risk of loss from asset defaults and asset value fluctuations, (ii) the risk of loss from adverse mortality and morbidity experience, (iii) the risk of loss from mismatching of asset and liability cash flow due to changing interest rates, and (iv) business risks.

The formula is used as an early warning tool to identify companies that are potentially inadequately capitalized.

The formula is intended to be used as a regulatory tool only and is not intended as a means to rank insurers generally.

The RBC ratio for our insurance subsidiary remains in line with our expectations and is significantly above the level that would require state regulatory action.

The NAIC has also issued a proposal to implement a new and more granular RBC structure for fixed income asset capital charges.

The proposed structure will expand the fixed income asset designations from six to 20 categories and will revise factor values.

The new structure related to fixed income assets is not in effect as of December 31, 2020.

CIG will continue to monitor the NAIC's activities on this issue.

CIG competes with financial services firms with respect to the acquisition of insurance companies and/or blocks of insurance businesses through merger, stock purchase, or reinsurance transactions or otherwise.

Environmental Regulation and Laws

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Corporate Information

HC2, a Delaware corporation was incorporated in 1994.

The Company’s executive offices are located at 450 Park Avenue, 29th Floor, New York, NY, 10022.

INNOVATE, a Delaware corporation, was incorporated in 1994.

The Company’s executive offices are located at 295 Madison Avenue, 12th Floor, New York, NY, 10017.

The Company’s telephone number is (212) 235-2690.

Our Internet address is www.hc2.com.

Our Internet address is www.innovatecorp.com .

We make available free of charge through our Internet website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the United States Securities and Exchange Commission (the "SEC").

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business