What changed in this filing

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Item 1. Business

2023-03-14 compared with 2022-03-09 · 275 added, 170 removed, 452 unchanged (50% of the section changed)

11 unchanged sentences

(iii) HC2 Broadcasting Holdings Inc.

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 U.S.;

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

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

23 unchanged sentences

Competitive conditions affecting our operating businesses are described in the discussions below.

As of December 31, 2021, we had approximately 3,902 employees, including the employees of our operating businesses as described in more detail below.

As of December 31, 2022, we had 3,565 full-time employees and 196 part-time employees, including the employees of our operating businesses as described in more detail below.

We consider our relations with our employees to be satisfactory.

2 unchanged sentences

DBM Global Inc.

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 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.

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.

(“DBMG”) is a fully integrated construction company offering both construction and professional services primarily through its core subsidiaries, Schuff Steel Company ("SSC"), Banker Steel (“Banker”) and GrayWolf Industrial (“GrayWolf”) to a wide variety of commercial and industrial market segments.

These companies provide services to their clients including design-assist, modularization, fabrication and erection of structural steel, heavy steel plate, trusses and girders, heavy equipment installation, as well as facility services for maintenance and shutdowns.

The companies enable best delivery of preconstruction, construction and operations services by, leveraging the capabilities of the DBM Vircon (“Vircon”) business, which provides construction modeling, rebar and steel detailing, industrial design, and digital engineering services.

In addition, through its Aitken business ("Aitken"), DBMG manufactures pressure vessels, strainers, filters, separators and a variety of customized products.

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, hospital and medical offices, data centers, renewables, chemical, pulp and paper mills, manufacturing facilities, bridges, mines, metal processing and power plants.

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.

In addition, DBMG has international operations in Australia, Canada, India, New Zealand, the Philippines, Thailand, and the United Kingdom.

DBMG’s results of operations are affected primarily by (i) the level of commercial, industrial and infrastructure construction as well as the need for mechanical and maintenance services in its principal markets;

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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, original equipment manufacturers ("OEMs"), industrial owners, 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.

DBMG believes that continuing to diversify its revenue base by completing smaller projects--such as low-rise office buildings, healthcare facilities and other commercial and industrial structures--could reduce the impact of periodic adverse market or economic conditions, as well as the margin slippage that may accompany larger projects;

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

DBMG believes that continuing to diversify its revenue base by completing projects - such as low-rise office buildings, healthcare facilities and other commercial and industrial structures - could reduce the impact of periodic adverse market or economic conditions, as well as the margin slippage that may accompany larger projects;

• Emphasize Innovative Services:

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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, piping, machinery rigging and setting, deep foundations, and specialty welding.

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

These service capabilities have enabled DBMG to address such design-sensitive projects as stadiums, uniquely designed hotels and casinos, pulp and paper mills, chemical plants, and other industrial and manufacturing facilities;

• Diversify Customer and Product Base:

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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).

Schuff Steel Company ("SSC") (steel fabrication and erection), Banker Steel (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, 2022, revenues were as follows (in millions):

9 unchanged sentences

In 2021, DBMG’s two largest customers represented approximately 23.4% of revenues.

DBMG’s size gives it the production capacity to complete large-scale, demanding projects, with typical utilization per facility ranging from 62% - 82% and a sales pipeline that includes over $1,876 million in potential revenue generation.

DBMG’s size gives it the production capacity to complete large-scale, demanding projects, with typical utilization per facility ranging from 90% - 96% and a sales pipeline that includes over $4.6 billion in potential revenue generation.

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 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.

Additionally, DBMG has in-house fabrication, erection, and multi-discipline industrial construction 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-six 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 53.7% of DBMG's backlog (out of a total backlog of $1,782.3 million) as of December 31, 2022, and bonding is reduced as projects are billed rather than upon completion.

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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 287,000 tons;

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;

Named the top steel erector in the United States for 2007, 2008, 2011, 2013-2020, and 2022, 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.

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• 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;

1 unchanged sentence

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, 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.

During the year ended December 31, 2022, DBMG, through SSC and Banker Steel, purchased approximately 60% of the total value of steel and steel components purchased from two domestic steel vendors.

Refer to 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.

Sales and Distributions

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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, 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.

As of December 31, 2022, DBMG employed 3,489 full-time and 186 part-time 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, 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.

Certain of the fabrication and erection personnel DBMG employs are represented by various trade unions.

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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Pansend also invests in other early stage or developmental stage healthcare companies including an approximately 47.2% interest in MediBeacon Inc.

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

("MediBeacon"), and an approximately 25.8% interest in Triple Ring Technologies, Inc.

("Triple Ring").

R2 Technologies, Inc.

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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, R2 will receive a share of the residual profits from such sales.

In 2019, R2 closed on its Series B Preferred Stock financing round with its strategic partner, Huadong Medicine Company, Ltd., (“Huadong”).

In connection with a staggered $30 million investment by Huadong, R2 entered into a distribution agreement with Huadong under which R2 granted Huadong all of R2's products in the Asia-Pacific region, and R2 is entitled to receive a share of Huadong's profits from such sales.

As of December 31, 2022, R2 has received the entire $30 million investment from Huadong.

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

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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.

Glacial Spa – Launched 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 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.

Sales and Distribution

In North America, R2 utilizes a direct sales force to sell Glacial Rx.

As of December 31, 2022, R2 had a North American sales force of 20 employees, and total full-time employees of 46 and part-time employees of 9.

In international markets, R2 sells both Glacial Rx and Glacial Spa through distributors.

The medical technology and aesthetic product markets are highly competitive and dynamic and are characterized by rapid and substantial technological development and product innovations.

Demand for our products could be limited by the products and technologies offered now or in the future by our competitors.

Due to less stringent regulatory requirements, there are many more aesthetic products and procedures available for use in international markets than are cleared for use in the United States.

There are also fewer limitations on the claims our competitors in international markets can make about the effectiveness of their products and the manner in which they can market them.

As a result, we face more competition in these markets than in the United States.

We also compete against medical technology and aesthetic companies, including those offering products and technologies unrelated to skin lightening and brightening, for physician resources and mind share.

Some of our competitors have a broad range of product offerings, large direct sales forces, and long-term customer relationships, which could inhibit our market penetration efforts.

Our potential customers also may need to recoup the cost of expensive products that they have already purchased from our competitors, and thus they may decide to delay or not to purchase our products.

We believe that our products compete favorably, largely based on the following competitive factors:

• Our products safely downregulate inflammation and pain, accelerate exfoliation and normalize melanin production.

This is a breakthrough technology unlike any other currently available in the marketplace;

• Our products are versatile, providing customized treatment capabilities for patients of all ages and skin types making every aesthetic patient a candidate;

• Our products achieve measurable results with little to no patient discomfort and high patient satisfaction;

• Glacial Rx is FDA cleared in the United States as a complementary treatment to improve the patient experience of most other pain or inflammation inducing treatments.

This allows practices to offer a highly differentiated experience to existing customers and attract new business, generating additional revenue.

Governmental Approvals

The design, development, manufacture, testing and sale of our Glacial Rx product is subject to regulation by numerous governmental authorities, principally the FDA, and corresponding state and foreign regulatory agencies.

The Glacial Rx product (also known as the Dermal Cooling System) originally received 510(k) clearance in October 2016 as a cryosurgical instrument intended for use in dermatologic procedures for the removal of benign lesions of the skin.

In July 2017, the FDA cleared device modifications implemented to improve usability of the Dermal Cooling System.

Subsequently in September 2020, we received FDA clearance for expansion of the Dermal Cooling System indication to include use when cooling is intended for the temporary reduction of pain, swelling, inflammation, and hematoma from minor surgical procedures.

In August 2021, the Dermal Cooling System was also cleared by the FDA for use with optional dermabrasion tip accessories for general dermabrasion, scar revision, acne scar revision, and tattoo removal.

Most recently, in November 2022, FDA clearance was received for expansion of the Dermal Cooling System indication to include minimize pain, inflammation, and thermal injury during laser and dermatological treatments and for temporary topical anesthetic relief of injections.

We have received regulatory approval or are otherwise free to market the Glacial Rx product in numerous international markets.

Any devices we manufacture or distribute pursuant to clearance or approval by the FDA are subject to pervasive and continuing regulation by the FDA and certain state agencies, including establishment registration and device listing with the FDA.

We are required to adhere to applicable regulations detailed in FDA’s current Good Manufacturing Practices ("cGMP") as set forth in the Quality System Regulation, which include among other things, testing, control and documentation requirements.

Non-compliance with these standards can result in, among other things, fines, injunctions, civil penalties, recalls or seizures of products, total or partial suspension of production, refusal of the government to grant 510(k) clearance of devices, withdrawal of marketing approvals and criminal prosecutions.

We and our contract manufacturer have designed and operate our manufacturing facilities under the FDA's cGMP requirements and are subject to periodic inspection by the FDA for compliance with regulatory requirements.

Because we are a manufacturer of medical devices, we must also comply with medical device reporting requirements by reviewing and reporting to the FDA whenever there is evidence that reasonably suggests that one of our products may have caused or contributed to a death or serious injury.

We must also report any incident in which our product has malfunctioned if that malfunction would likely cause or contribute to a death or serious injury if it were to recur.

Labeling and promotional activities are subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission.

Medical devices approved or cleared by the FDA may not be promoted for unapproved or uncleared uses, otherwise known as “off-label” promotion.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including substantial monetary penalties and criminal prosecution.

The regulatory review process for medical devices varies from country to country, and many countries also impose product standards, packaging requirements, environmental requirements, labeling requirements and import restrictions on devices.

Each country has its own tariff regulations, duties, and tax requirements.

Failure to comply with applicable foreign regulatory requirements may subject a company to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions, criminal prosecution, or other consequences.

The California Food & Drug Branch inspected our San Ramon facility in December 2016 and had no findings or observations.

In international markets, we are required to obtain and maintain various quality assurance and quality management certifications.

We have obtained the following international certifications:

EN ISO 13485:2016 Medical Devices - Quality Management Systems - Requirements for regulatory purposes and Medical Device Single Audit Program (US and Canada).

In November 2022, we were audited by our Certification Body, SGS, and all certifications have been extended to cover our Dublin facility.

Sources of Raw Materials and Suppliers

We depend upon our contract manufacturer to build our products.

We rely on purchase orders rather than long-term contracts with our contract manufacturer, which mitigates some risks, including price increases.

However, this subjects us to other risks such as component shortages.

We continue to evaluate alternative sources of supply for these components and materials.

Patents and Proprietary Technology

To establish and protect our proprietary technologies and products, we rely on a combination of patent, copyright, trademark, and trade-secret laws, as well as confidentiality provisions in our contracts.

We have implemented a patent strategy designed to protect our technology and facilitate commercialization of our current and future products.

As of December 31, 2022, our patent portfolio comprised 45 issued patents and 113 pending patent applications, each of which we either own directly or for which we are the exclusive licensee.

Our intellectual property portfolio for our CryoModulation technology was built through the combination of licensing patents from third parties and the issuance of new patents to us as the result of our ongoing development activities.

Many of our issued and pending patents were exclusively licensed from General Hospital Corporation, which owns and operates the Massachusetts General Hospital ("MGH") and generally relate to our core technology.

In general, patents have a term of 20 years from the application filing date or earliest claimed priority date.

We expect our issued and exclusively licensed patents to expire in 2037 or later.

We also rely on trade secrets, technical know-how, contractual arrangements, and continuing innovation to protect our intellectual property and maintain our competitive position.

We have a policy to enter into confidentiality agreements with third parties, employees, and consultants.

We also have a policy that our employees and consultants sign agreements requiring that they assign to us their interests in intellectual property such as patents and copyrights arising from their work for us.

Patent License Agreement

On December 8, 2014, the Company entered into a Patent License Agreement with MGH, whereby R2 may use certain licensor assets and patent rights for the commercial development, manufacturing, distribution and use in products and processes.

The agreement, as amended, calls for royalties to be paid at 8% of net sales of all products and processes with minimum guarantees.

Future annual minimum royalty payment commitments are as follows:

$75,000 on the first anniversary, $100,000 on the second anniversary, $150,000 on the third anniversary, and $200,000 on the fourth anniversary of the effective date that occurs following the first commercial sale, and each subsequent anniversary of the effective date thereafter through the term.

In addition, R2 will pay a milestone payment of $1,000,000 within sixty days of the earliest:

(i) first commercial sale, (ii) first regulatory approval allowing Sale or marketing of a product or process in any country, (iii) the first marketing of a product or process in any country.

As of December 31, 2022, we have completed all milestones associated with the license agreement with MGH and have made all required license fee and milestone payments to MGH described above.

We continue to pay the royalty on net sales as required by the agreement and currently have no additional obligations to MGH resulting from any sublicensing agreement.

MediBeacon, Inc.

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Under the Breakthrough Device program, the FDA works with companies to expedite regulatory review in order to give patients more timely access to innovative diagnostic and therapeutic technologies.

MediBeacon is expected to begin its U.S.

pivotal study in the second half of 2022.

In 2019, MediBeacon closed its Series B financing round with its strategic partner, Huadong, providing Huadong with exclusive rights to MediBeacon’s portfolio of assets in Greater China in exchange for a staged $30 million investment.

Further, Huadong will be responsible for funding clinical trials, commercial and regulatory activities in 25 countries in the Asia-Pacific region, including Greater China.

In exchange, MediBeacon will receive royalty payments on net sales of the TGFR system.

As of December 31, 2021, MediBeacon has received $15 million from Huadong at a pre-money valuation of approximately $300 million.

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 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.

MediBeacon began its U.S.

pivotal study in the second half of 2022 and is expected to submit results of the study to the FDA in the first half of 2023.

In 2019, MediBeacon closed its Series B financing round with its strategic partner, Huadong.

In connection with a $30 million staggered investment by Huadong, MediBeacon entered into an exclusive distribution agreement with Huadong, under which MediBeacon granted Huadong the exclusive rights to distribute all of MediBeacon’s products in Greater China and MediBeacon will receive royalty payments on net sales of the TGFR system.

Under this agreement, Huadong is also responsible for funding clinical trials, commercial and regulatory activities relating to the TGFR system in 25 countries in the Asia-Pacific region, including Greater China.

MediBeacon received the first $15 million tranche during 2019 at a pre-money valuation of approximately $300 million.

In 2020, Huadong amended their agreements to provide for Huadong to prepay $20 million of future China royalties to fund registration of the TGFR system as a Class 1 device in China, allowing it to immediately enter the Chinese hospital system.

As of December 31, 2022, the full $20 million has been received.

On November 16, 2022, MediBeacon and Huadong amended their existing agreements to provide that Huadong will invest approximately $10 million in funding in MediBeacon by June 30, 2023, including $7.5 million or 50% of the remaining $15 million milestone investment due upon FDA approval of MediBeacon's TGFR, at a pre-money valuation of approximately $400 million.

MediBeacon is also exploring additional clinical applications of the patented Lumitrace technology, including:

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MediBeacon was the recipient of a Small Business Innovation Research grant supported by the National Eye Institute of the National Institutes of Health (NIH).

With this support, MediBeacon is pursuing research into the use of a MediBeacon fluorescent tracer agent to visualize vasculature in the eye, having recently received FDA approval in 2020 to begin clinical studies.

With this support, MediBeacon is pursuing research into the use of a MediBeacon fluorescent tracer agent to visualize vasculature in the eye with clinical studies currently underway.

Surgical visualization feasibility, which has the potential to be used in open, laparoscopic and robotic surgeries to identify critical structures, tumor margins and blood flow in tissues in real-time.

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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, Inc.

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

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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.

As of December 31, 2022, Broadcasting operated 251 stations, including 3 Full-Power stations, 53 Class A stations and 195 LPTV stations.

Broadcasting stations are collectively able to broadcast over 1,500 sub-channels and reach 106 markets in the U.S.

and Puerto Rico, including 32 of the top 35 markets.

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

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.

The majority of the network’s programming is provided by TV Azteca, S.A.B.

Broadcasting has approximately 95 stations concentrated in the top 35 markets.

During the year ended December 31, 2022, Broadcasting included Azteca America.

Azteca America aired Spanish language programming targeting U.S.

The majority of the network’s programming was provided by TV Azteca, S.A.B.

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

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

Broadcasting has employees in the U.S.

Broadcasting had 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.

On December 31, 2022, Broadcasting shutdown the operations and broadcasting of the Azteca America network and, during the year ended December 31, 2022, terminated both the PLA and BSA with TV Azteca.

New network content is now in place on those stations formerly carrying Azteca.

Operating Broadcast Stations

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Station Service

New York, NY 1 W28ES-D LPTV Station

New York, NY 1 W02CY-D LPTV Station

WKOB-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

Los Angeles, CA 2 KSKJ-CD Class A Station

KHIZ-LD LPTV Station

Philadelphia, PA 3 WPSJ-CD Class A Station

W25FG-D LPTV Station

WDUM-LD LPTV Station

WPSJ-CD Class A Station

WZPA-LD LPTV Station

WPVN-CD Class A Station

Chicago, IL 4 W31EZ-D LPTV Station

Boston, MA 5 WLEK-LD LPTV Station

Worth, TX 7 K07AAD-D LPTV Station

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KPFW-LD LPTV Station

Houston, TX 6 KBMN-LD LPTV Station

KEHO-LD LPTV Station

KQRO-LD LPTV Station

San Francisco - Oakland - San Jose, CA 8 KEMO-TV Full-Power Station

Atlanta, GA 9 WYGA-CD Class A Station

WDWW-LD LPTV Station

WUEO-LD LPTV Station

WUVM-LD LPTV Station

KUGB-CD Class A Station

KUVM-CD Class A Station

Houston, TX 10 KBMN-LD LPTV Station

KEHO-LD LPTV Station

KUVM-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

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 W16DQ-D LPTV Station

Tampa - St Petersburg - Sarasota, FL 11 WXAX-CD Class A Station

W16DQ-D LPTV Station

W31EG-D LPTV Station

WTAM-LD LPTV Station

WXAX-CD Class A Station

Seattle, WA 12 KUSE-LD LPTV Station

Detroit, MI 13 WDWO-CD Class A Station

WUDL-LD LPTV Station

Phoenix - Prescott, AZ 14 KPDF-CD Class A Station

K12XP-D LPTV Station

KTVP-LD LPTV Station

Orlando - Daytona Beach - Melbourne, FL 15 WATV-LD LPTV Station

WFEF-LD LPTV Station

Minneapolis - St.

Paul, MN 14 K28PQ-D LPTV Station

K33LN-D Class A Station

Paul, MN 16 K33LN-D Class A Station

K28PQ-D LPTV Station

KJNK-LD LPTV Station

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KWJM-LD LPTV Station

Detroit, MI 15 WDWO-CD Class A Station

WUDL-LD LPTV Station

Lauderdale, FL 16 W16CC-D LPTV Station

Denver, CO 17 KRDH-LD LPTV Station

Orlando - Daytona Beach - Melbourne, FL 18 WATV-LD LPTV Station

WFEF-LD LPTV Station

Lauderdale, FL 18 W16CC-D LPTV Station

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

2 unchanged sentences

WUEK-LD LPTV Station

KBTV-CD Class A Station

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

2 unchanged sentences

KBIS-LD LPTV Station

KBTV-CD Class A Station

KFKK-LD LPTV Station

1 unchanged sentence

KFTY-LD LPTV Station

Louis, MO 21 K25NG-D Class A Station

K35OY-D LPTV Station

KBGU-LD LPTV Station

KPTN-LD LPTV Station

W09DL-D LPTV Station

WLEH-LD LPTV Station

WODK-LD LPTV Station

Portland, OR 22 KOXI-CD Class A Station

Charlotte, NC 21 W15EB-D Class A Station

6 unchanged sentences

WWLM-CD Class A Station

Indianapolis, IN 25 WQDE-LD LPTV Station

WSDI-LD LPTV Station

WUDZ-LD LPTV Station

Baltimore, MD 26 WQAW-LP LPTV Station

Raleigh - Durham - Fayetteville, NC 23 WIRP-LD LPTV Station

WNCB-LD LPTV Station

San Diego, CA 28 KSKT-CD Class A Station

Portland, OR 24 KOXI-CD Class A Station

Louis, MO 25 K25NG-D Class A Station

KBGU-LD LPTV Station

KPTN-LD LPTV Station

W09DL-D LPTV Station

WLEH-LD LPTV Station

WODK-LD LPTV Station

Baltimore, MD 26 WQAW-LD LPTV Station

Nashville, TN 27 WCTZ-LD LPTV Station

WKUW-LD LPTV Station

Hartford - New Haven, CT 28 WRNT-LD LPTV Station

WTXX-LD LPTV Station

Indianapolis, IN 29 WQDE-LD LPTV Station

WSDI-LD LPTV Station

WUDZ-LD LPTV Station

San Diego, CA 30 KSKT-CD Class A Station

Columbus, OH 31 WDEM-CD Class A Station

San Antonio, TX 31 K17MJ-D LPTV Station

K25OB-D LPTV Station

Salt Lake City, UT 33 KBTU-LD LPTV Station

San Antonio, TX 35 KVDF-CD Class A Station

K17MJ-D LPTV Station

K25OB-D Class A Station

KISA-LD LPTV Station

2 unchanged sentences

KSSJ-LD LPTV Station

KVDF-CD Class A Station

Kansas City, MO 36 KAJF-LD LPTV Station

1 unchanged sentence

KQML-LD LPTV Station

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

WTXX-LD LPTV Station

Salt Lake City, UT 34 KBTU-LD LPTV Station

Milwaukee, WI 37 WTSJ-LD LPTV Station

Austin, TX 39 KGBS-CD Class A Station

KVAT-LD LPTV Station

West Palm Beach - Ft.

Pierce, FL 36 WDOX-LD LPTV Station

WWCI-CD Class A Station

Pierce, FL 40 WWCI-CD Class A Station

WDOX-LD LPTV Station

WXOD-LD LPTV Station

Las Vegas, NV 42 K36NE-D Class A Station

KEGS-LD LPTV Station

KHDF-CD Class A Station

KNBX-CD Class A Station

KEGS-LD LPTV Station

KVPX-LD LPTV Station

Austin, TX 41 KGBS-CD Class A Station

KVAT-LD LPTV Station

Jacksonville, FL 45 WJXE-LD LPTV Station

2 unchanged sentences

WRCZ-LD LPTV Station

Oklahoma City, OK 43 KBZC-LD LPTV Station

KOHC-CD Class A Station

KTOU-LD LPTV Station

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

KWPL-LD LPTV Station

Birmingham - Anniston - Tuscaloosa, AL 46 WUDX-LD LPTV Station

WUOA-LD LPTV Station

New Orleans, LA 50 WQDT-LD LPTV Station

WTNO-LP Class A Station

Buffalo, NY 48 WVTT-CD Class A Station

WWHC-LD LPTV Station

Myers - Naples, FL 50 WGPS-LD LPTV Station

Memphis, TN 53 KPMF-LD LPTV Station

W15EA-D Class A Station

Oklahoma City, OK 52 KOHC-CD Class A Station

KBZC-LD LPTV Station

KTOU-LD LPTV Station

Albuquerque - Santa Fe, NM 53 KQDF-LD LPTV Station

KWPL-LD LPTV Station

New Orleans, LA 55 WTNO-LP Class A Station

WQDT-LD LPTV Station

Memphis, TN 56 W15EA-D Class A Station

KPMF-LD LPTV Station

WPED-LD LPTV Station

1 unchanged sentence

WQEO-LD LPTV Station

Buffalo, NY 54 WVTT-CD Class A Station

WWHC-LD LPTV Station

Richmond - Petersburg, VA 57 WFWG-LD LPTV Station

2 unchanged sentences

Mobile, AL - Pensacola, FL 60 WEDS-LD LPTV Station

WWBH-LP LPTV Station

WWBH-LD LPTV Station

Fresno - Visalia, CA 61 K17JI-D Class A Station

KZMM-CD Class A Station

Tulsa, OK 60 KUOC-LD LPTV Station

KZLL-LD LPTV Station

Little Rock - Pine Bluff, AR 63 K23OW-D LPTV Station

3 unchanged sentences

WFFC-LD LPTV Station

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

KCYM-LD LPTV Station

KRPG-LD LPTV Station

Tulsa, OK 66 KUOC-LD LPTV Station

KZLL-LD LPTV Station

Rochester, NY 69 WGCE-CD Class A Station

Charleston - Huntington, WV 73 WOCW-LD LPTV Station

Madison, WI 75 W23BW-D Class A Station

WZCK-LD LPTV Station

Chattanooga, TN 78 WYHB-CD Class A Station

Wichita - Hutchinson, KS 79 KFVT-LD LPTV Station

Omaha, NE 73 KAJS-LD LPTV Station

KQMK-LD LPTV Station

Myrtle Beach - Florence, SC 80 W33DN-D LPTV Station

Springfield, MO 82 KCNH-LD LPTV Station

KFKY-LD LPTV Station

Charleston - Huntington, WV 76 WOCW-LD LPTV Station

Omaha, NE 83 KAJS-LD LPTV Station

KQMK-LD LPTV Station

Harlingen - Weslaco - Brownsville - McAllen, TX 84 KRZG-CD Class A Station

KAZH-LP LPTV Station

KNWS-LD LPTV Station

Des Moines - Ames, IA 85 KAJR-LD LPTV Station

KCYM-LD LPTV Station

KRPG-LD LPTV Station

Huntsville - Decatur - Florence, AL 86 W34EY-D Class A Station

Madison, WI 79 W23BW-D Class A Station

WZCK-LD 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

Savannah, GA 87 WDID-LD LPTV Station

WUET-LD LPTV Station

Waco - Temple - Bryan, TX 88 KAXW-LD LPTV Station

KZCZ-LD LPTV Station

Shreveport, LA 86 K36MU-D LPTV Station

Champaign - Springfield - Decatur, IL 90 W23EW-D LPTV Station

1 unchanged sentence

WEAE-LD LPTV Station

Chattanooga, TN 89 WYHB-CD Class A 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

Charleston, SC 91 WBSE-LD LPTV Station

Traverse City - Cadillac, MI 92 W36FH-D LPTV Station

Baton Rouge, LA 93 K27NB-D LPTV Station

K29LR-D LPTV Station

Greenville - New Bern - Washington, NC 94 W35DW-D LPTV Station

Paducah, KY - Cape Girardeau, MO - Harrisburg, IL 95 W29CI-D Class A Station

Shreveport, LA 96 K36MU-D LPTV Station

South Bend - Elkhart, IN 98 KPDS-LD LPTV Station

Cedar Rapids - Waterloo - Iowa City, IA 100 K17MH-D LPTV Station

KFKZ-LD LPTV Station

Reno, NV 101 K07AAI-D LPTV Station

Smith - Fayetteville - Springdale - Rogers, AR 103 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

KFLL-LD LPTV Station

Reno, NV 104 K07AAI-D LPTV Station

Lincoln - Hastings - Kearney, NE 106 KIUA-LD LPTV Station

Wilmington, NC 108 WQDH-LD LPTV Station

Tallahassee, FL - Thomasville, GA 110 W21EL-D LPTV Station

Evansville, IN 111 WDLH-LD LPTV Station

1 unchanged sentence

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

Augusta, GA - Aiken, SC 113 WIEF-LD LPTV Station

Wayne, IN 114 WFWC-CD Class A Station

W25FH-D LPTV Station

W30EH-D LPTV Station

WCUH-LD LPTV Station

WFWC-CD Class A Station

WODP-LD LPTV Station

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

Montgomery - Selma, AL 116 WDSF-LD LPTV Station

WQAP-LD LPTV Station

Tyler - Longview- Nacogdoches, TX 118 KBJE-LD LPTV Station

KCEB Full-Power Station

KDKJ-LD LPTV Station

1 unchanged sentence

KPKN-LD LPTV Station

Eugene, OR 116 K06QR-D LPTV Station

KCEB Full-Power Station

KORY-CD Class A Station

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

K33EJ-D Class A Station

Eugene, OR 119 K06QR-D LPTV Station

Fargo - Valley City, ND 120 K15MR-D LPTV Station

Lafayette, LA 120 K21OM-D LPTV Station

Macon, GA 121 W28EU-D LPTV Station

WJDO-LD LPTV Station

Peoria - Bloomington, IL 122 W27EQ-D LPTV Station

K31FD-D Class A Station

Boise, ID 121 K17ED-D Class A Station

KBKI-LD LPTV Station

KFLL-LD LPTV Station

Santa Barbara - San Luis Obispo, CA 122 KDFS-CD Class A Station

4 unchanged sentences

KZDF-LD LPTV Station

Montgomery - Selma, AL 125 WDSF-LD LPTV Station

WQAP-LD LPTV Station

Yakima - Pasco - Richland - Kennewick, WA 123 K33EJ-D Class A Station

K28QK-D LPTV Station

Macon, GA 124 W28EU-D LPTV Station

WJDO-LD LPTV Station

Peoria - Bloomington, IL 125 W27EQ-D LPTV Station

Bakersfield, CA 126 KTLD-CD Class A Station

KXBF-LD LPTV Station

Wilmington, NC 127 WQDH-LD LPTV Station

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

Columbus, GA - Opelika - Auburn, AL 128 W29FD-D LPTV Station

W31EU-D LPTV Station

Lafayette, LA 129 K21OM-D LPTV Station

La Crosse - Eau Claire, WI 130 W23FC-D LPTV Station

Corpus Christi, TX 132 K21OC-D LPTV Station

2 unchanged sentences

KYDF-LD LPTV Station

Palm Springs, CA 133 K21DO-D Class A Station

Bangor, ME 139 W32FS-D LPTV Station

W20ER-D LPTV Station

Amarillo, TX 140 KAUO-LD LPTV Station

KLKW-LD LPTV Station

Palm Springs, CA 140 K21DO-D Class A Station

K35OY-D LPTV Station

Lubbock, TX 146 K32OV-D LPTV Station

4 unchanged sentences

Biloxi-Gulfport, MS 166 W33EG-D LPTV Station

Quincy, IL - Hannibal, MO - Keokuk, IA 173 WVDM-LD LPTV Station

Jackson, TN 173 WYJJ-LD LPTV Station

Quincy, IL - Hannibal, MO - Keokuk, IA 177 WVDM-LD LPTV Station

K14SU-D LPTV Station

Bowling Green, KY 184 WCZU-LD LPTV Station

WKUT-LD LPTV Station

Puerto Rico NA W20EJ-D LPTV Station

Puerto Rico NA WQQZ-CD Class A Station

W20EJ-D LPTV Station

W27DZ-D LPTV Station

WOST Full-Power Station

WQQZ-CD Class A Station

WWKQ-LD 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 as of December 31, 2021.

WOST Full-Power 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.

Broadcast Operations

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

Broadcasting carries approximately 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.

26 unchanged sentences

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

With the shut-down of the Azteca America network on December 31, 2022, Broadcast revenues will be driven principally by channel leases and revenue share agreements with some 70 other networks carried on Broadcasting's stations.

Broadcasting’s strategy includes the following initiatives:

7 unchanged sentences

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.

Our television stations compete in the U.S.

domestic media market for multicast network tenants, viewer audiences and advertisers.

In the last several years, there has been increasing competition from not just cable channels but also streaming services, digital platforms, social media, and internet-delivered video channels.

These media platforms have taken market share from “over-the-air” (OTA) broadcast stations like ours.

Full Power stations delivering OTA multicast networks also represent direct competition in all our markets.

Because our stations are mostly LPTVs and Class A stations, our signal coverage of a market is often less than that of Full Power stations, resulting in a competitive advantage for Full Power stations.

As a result of improvements in digital compression technology over the last several years, many Full Power stations have increased the number of subchannels that they can lease to OTA multicast networks, resulting in increased competition in many of our markets over the last several years.

Because nearly all our stations are LPTV and Class A, they do not have primary channel “must carry” rights and, therefore, have no signal coverage and carriage on multichannel video programming distributor ("MVPD") systems.

Our lack of MVPD distribution materially affects our television stations’ competitive position in attracting programmers and viewers.

Specifically, MVPD systems can increase a broadcasting station’s competition for viewers in a market by providing both cable networks and distant television station signals not otherwise available to the station’s audience.

Other sources of competition for audiences, programming and advertisers include streaming services, connected televisions, internet websites, mobile applications and wireless carriers, direct-to-consumer video distribution systems, and home entertainment systems.

Recent developments by many companies, including internet streaming service providers and internet website operators, have expanded, and are continuing to expand, the variety and quality of broadcast and non-broadcast video programming available to consumers via the internet.

Internet companies have developed business relationships with companies that have traditionally provided syndicated programming, network television and other content.

As a result, additional programming has, and is expected to further become, available through non-traditional methods, which can directly impact the number of OTA TV viewers, and, thus, indirectly impact station revenues.

Government Approvals and Regulation

Federal broadcasting industry regulations limit our operating flexibility.

The FCC regulates all local television broadcasters, including us.

We must obtain FCC approval whenever we (i) apply for a new license;

(ii) seek to renew or modify a license;

(iii) purchase or sell a broadcast station license;

and/or (iv) assign or transfer the control of one of our subsidiaries that holds a license.

Our FCC licenses are critical to our operations, and we cannot operate without them.

Our FCC licenses must be renewed every 8 years.

The current television license renewal cycle began in 2020, and many of our licenses have been renewed, but others remain pending.

While we cannot be certain that the FCC will renew the remaining licenses or that we will always obtain renewal grants in the future, the FCC has historically renewed the Company’s broadcast licenses in substantially all cases.

The Company does not believe that the expiration or non-renewal of any of our FCC licenses would have a material adverse effect on the expected future cash flows and profitability.

The FCC can sanction us for programming broadcast on our stations that it finds to be indecent.

Over the past several years, the FCC has increased its enforcement efforts regarding broadcast indecency and profanity.

Additionally, our Full-Power stations and Class A stations are subject to additional FCC rules regarding the airing of mandatory children’s programming and local content.

While we have measures in place to remain compliant, shortfalls in required programming for Full-Power stations and Class A stations may result in financial penalties levied by the FCC or, in worst cases, the loss of license.

Federal legislation and FCC rules have changed significantly in recent years and may continue to change.

These changes may affect our ability to conduct our business in ways that we believe would be advantageous and may impact our operating results.

New Broadcast TV Technology:

13 unchanged sentences

Many of these features will be available to mobile devices.

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.

As of December 31, 2022, Broadcasting employed 18 full-time employees and 1 part-time employees across the U.S.

Refer to Note 20.

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

Environmental Regulation and Laws

10 unchanged sentences

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.innovatecorp.com .

1 unchanged sentence

The information on our website is not a part of this Annual Report on Form 10-K.

Our reports filed with the SEC may be accessed at the SEC’s website at www.sec.gov.

The information required by this item relating to our executive officers, directors and code of conduct is set forth in Item 10.

1 unchanged sentence

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