UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended ~~September 30, 2020~~March 31, 2022

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number

~~001-09071~~000-56177

BBX Capital, Inc.

(Exact name of registrant as specified in its charter)


Florida		82-4669146
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)

~~401~~201 East Las Olas Boulevard, Suite ~~800~~1900
Fort Lauderdale, Florida		33301
(Address of principal executive office)		(Zip Code)

(954) 940-4900

(Registrant's telephone number, including area code)

Securities Registered pursuant to Section 12(b) of the Act:

None

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES ~~[X]~~[X]NO [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ~~[X]~~[X]NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer [ ]	Accelerated ~~filer[]~~filer [X]	Non-accelerated filer [X[ ]	Smaller reporting company [ ]
Emerging growth company[X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES [ ]NO [ X ]

The number of shares outstanding of each of the registrant’s classes of common stock as of ~~November~~May 4, ~~2020~~2022 is as follows:

Class A Common Stock of $.01 par value, ~~15,624,091~~12,379,965 shares outstanding.
‎Class B Common Stock of $.01 par value, ~~3,693,596~~3,871,866 shares outstanding.


BBX Capital, Inc. TABLE OF CONTENTS

Part I.
Item 1.	Financial Statements

	Condensed Consolidated Statements of Financial Condition as of ~~September 30, 2020~~March 31, 2022 and December 31, ~~2019~~2021 - Unaudited	1
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2020~~March 31, 2022 and ~~2019~~2021 - Unaudited	2
	Condensed Consolidated Statements of Changes in Equity for the Three ~~and Nine~~ Months Ended ~~September 30, 2020~~March 31, 2022 and ~~2019~~2021 - Unaudited	3
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2020~~March 31, 2022 and ~~2019~~2021 - Unaudited	54
	Notes to Condensed Consolidated Financial Statements - Unaudited	76
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3625
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	5547
Item 4.	Controls and Procedures	5647

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	5648
Item 1A.	Risk Factors	5648
Item 6.5.	~~Exhibits~~Other Information	5748
Item 6.	~~Signatures~~Exhibits	5849
	Signatures	50

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BBX Capital, Inc.

Condensed Consolidated Statements of Financial Condition - Unaudited

(In thousands, except share data)



BBX Capital, Inc.
Condensed Consolidated Statements of Financial Condition - Unaudited
					March 31,		December 31,
	September 30,		December 31,		2022		2021
(in thousands, except share data)	2020		2019
ASSETS
Cash and cash equivalents	$	96,592		20,723	$	114,632		118,045
Restricted cash		250		529		1,000		1,000
Trade accounts receivable, net		15,337		13,104		30,673		29,899
Trade inventory		16,351		22,843
Real estate ($9,342 in 2020 and $11,297 in 2019 held for sale)		59,495		65,818
Trade inventory, net						48,353		41,895
Real estate ($5,075 in 2022 and $7,679 in 2021 held for sale)						19,069		22,868
Investments in and advances to unconsolidated real estate joint ventures		60,648		57,330		53,666		52,966
Investment in and advances to IT'SUGAR, LLC		18,942		—
Note receivable from Bluegreen Vacations Holding Corporation		75,000		—		50,000		50,000
Property and equipment, net		6,122		29,836		28,736		30,611
Goodwill		—		37,248		18,414		18,414
Intangible assets, net		3,045		6,671		31,338		31,982
Operating lease assets		11,889		87,082		91,690		90,639
Deferred tax asset, net		8,696		3,280		4,056		3,776
Contingent purchase price receivable						19,283		19,925
Other assets		15,080		16,051		21,462		21,335
Discontinued operations total assets		—		992
Total assets	$	387,447		361,507	$	532,372		533,355
LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	5,848		10,104	$	13,229		12,980
Accrued expenses		13,384		14,115		30,301		33,136
Other liabilities		6,097		6,336		5,479		5,002
Due to parent		—		1,362
Operating lease liabilities		12,199		99,568		104,943		103,262
Notes payable and other borrowings		36,000		42,736		55,575		54,883
Discontinued operations total liabilities		—		1,041
Total liabilities		73,528		175,262		209,527		209,263
Commitments and contingencies (See Note 10)
Commitments and contingencies (See Note 12)
Redeemable noncontrolling interest		—		4,009		1,137		1,144
Equity:
Bluegreen Vacations Holding Corporation equity		—		179,681
Preferred stock of $0.01 par value; authorized 10,000,000 shares		—		—
Class A Common Stock of $0.01 par value; authorized 30,000,000 shares;
issued and outstanding 15,624,091 in 2020		156		—
Class B Common Stock of $0.01 par value; authorized 4,000,000 shares;
issued and outstanding 3,693,596 in 2020		37		—
Class A Common Stock of $0.01 par value; authorized 30,000,000 shares; issued and outstanding 11,808,442 in 2022 and 11,803,842 in 2021						118		118
Class B Common Stock of $0.01 par value; authorized 4,000,000 shares; issued and outstanding 3,666,837 in 2022 and 3,671,437 in 2021						37		37
Additional paid-in capital		312,153		—		311,344		310,588
Retained earnings		—		—
Accumulated earnings						7,357		9,226
Accumulated other comprehensive income		1,375		1,554		1,954		1,836
Total shareholders' equity		313,721		181,235		320,810		321,805
Noncontrolling interests		198		1,001		898		1,143
Total equity		313,919		182,236		321,708		322,948
Total liabilities and equity	$	387,447		361,507	$	532,372		533,355


See Notes to Condensed Consolidated Financial Statements - Unaudited

SeeNotes to Condensed Consolidated Financial Statements - Unaudited

‎

BBX Capital, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income - Unaudited

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,
(In thousands, except share data)

2020

2019

2020

2019
Revenues:

Trade sales

$
35,692

45,603

99,628

132,677
Sales of real estate inventory

4,970

370

14,248

5,030
Interest income

387

178

586

674
Net gains on sales of real estate assets

164

399

130

11,395
Other revenue

992

1,142

2,398

3,052
Total revenues

42,205

47,692

116,990

152,828
Costs and Expenses:

Cost of trade sales

27,981

30,704

80,154

91,845
Cost of real estate inventory sold

3,367

—

9,473

2,643
Interest expense

—

118

—

409
Recoveries from loan losses, net

(807)

(1,821)

(5,844)

(4,206)
Impairment losses

—

37

30,740

37
Selling, general and administrative expenses

18,110

23,194

54,024

68,504
Total costs and expenses

48,651

52,232

168,547

159,232
Operating losses

(6,446)

(4,540)

(51,557)

(6,404)
Equity in net (losses) earnings of unconsolidated real estate joint ventures

(646)

28,534

50

37,276
Loss on the deconsolidation of IT'SUGAR, LLC

(3,326)

—

(3,326)

—
Other income

81

67

192

621
Foreign exchange (loss) gain

(58)

1

214

(23)
(Loss) income before income taxes

(10,395)

24,062

(54,427)

31,470
Benefit (provision) for income taxes

1,633

(6,893)

10,847

(9,041)
Net (loss) income from continuing operations

(8,762)

17,169

(43,580)

22,429
Discontinued operations

Loss from operations

—

(4,829)

(91)

(9,473)
Benefit for income taxes

—

1,175

17

2,296
Loss from discontinued operations

—

(3,654)

(74)

(7,177)
Net (loss) income

(8,762)

13,515

(43,654)

15,252
Less: Net loss attributable to noncontrolling interests

510

97

4,822

165
Net (loss) income attributable to shareholders

$
(8,252)

13,612

(38,832)

15,417

Basic and diluted (loss) earnings per share from continuing operations

$
(0.43)

0.89

(2.01)

1.17
Basic and diluted loss per share from discontinued operations

—

(0.19)

—

(0.37)
Total basic and diluted (loss) earnings per share

(0.43)

0.70

(2.01)

0.80
Weighted average number of common shares outstanding

19,318

19,318

19,318

19,318
Net (loss) income

$
(8,762)

13,515

(43,654)

15,252
Other comprehensive income (loss), net of tax:

Unrealized gain on securities available for sale

15

17

19

54
Foreign currency translation adjustments

157

(75)

(198)

151
Other comprehensive income (loss), net

172

(58)

(179)

205
Comprehensive (loss) income, net of tax

(8,590)

13,457

(43,833)

15,457
Less: Comprehensive income attributable to noncontrolling interests

510

97

4,822

165
Comprehensive (loss) income attributable to shareholders

$
(8,080)

13,554

(39,011)

15,622

See Notes to Condensed Consolidated Financial Statements - Unaudited

BBX Capital, Inc.
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Three Months Ended September 30, 2019 and 2020
(In thousands)

Shares of

Accumulated

Common Stock

Common

Other

Outstanding

Stock

Additional

Comprehen-

Non-

Class

Class

Parent

Paid-in

sive

controlling

Total

A

B

A

B

Equity

Capital

Income

Interests

Equity
Balance, June 30, 2019

—

—

$
—

—

207,742

—

1,479

1,071

210,292
Net income excluding $82 of loss attributable to redeemable noncontrolling interest

—

—

—

—

13,612

—

(179)

13,433
Other comprehensive loss

—

—

—

—

—

—

(58)

—

(58)
Net transfers to Parent

—

—

—

—

(28,726)

—

—

—

(28,726)
Balance, September 30, 2019

—

—

$
—

—

192,628

—

1,421

892

194,941

Balance, June 30, 2020

—

—

$
—

—

242,932

—

1,203

278

244,413
Net loss excluding $484 of loss attributable to redeemable noncontrolling interest

—

—

—

—

(8,252)

—

—

(26)

(8,278)
Other comprehensive income

—

—

—

—

—

—

172

—

172
Distributions to noncontrolling interests

—

—

—

—

—

—

—

(54)

(54)
Reversal of accretion of redeemable noncontrolling interest

—

—

—

—

3,150

—

—

—

3,150
Net transfers from Parent

—

—

—

—

74,516

—

—

—

74,516
Issuance of common stock

15,624

3,694

156

37

(193)

—

—

—

—
Transfer to additional paid-in capital

—

—

—

—

(312,153)

312,153

—

—

—
Balance, September 30, 2020

15,624

3,694

$
156

37

—

312,153

1,375

198

313,919

See Notes to Condensed Consolidated Financial Statements - Unaudited

BBX Capital, Inc.
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Nine Months Ended September 30, 2019 and 2020
(In thousands)

Shares of

Accumulated

Common Stock

Common

Other

Outstanding

Stock

Additional

Comprehen-

Non-

Class

Class

Parent

Paid-in

sive

controlling

Total

A

B

A

B

Equity

Capital

Income

Interests

Equity
Balance, December 31, 2018

—

—

$
—

—

235,415

—

1,216

899

237,530
Cumulative effect from the adoption of ASU 2016-02, net of income taxes and redeemable noncontrolling interest

—

—

—

—

(2,202)

—

—

—

(2,202)
Net income excluding $158 of loss attributable to redeemable noncontrolling interest

—

—

—

—

15,417

—

—

(7)

15,410
Other comprehensive income

—

—

—

—

—

—

205

—

205
Net transfers to Parent

—

—

—

—

(56,002)

—

—

—

(56,002)
Balance, September 30, 2019

—

—

$
—

—

192,628

—

1,421

892

194,941

Balance, December 31, 2019

—

—

$
—

—

179,681

—

1,554

1,001

182,236
Net loss excluding $4,073 of loss attributable to redeemable noncontrolling interest

—

—

—

—

(38,832)

—

—

(749)

(39,581)
Other comprehensive loss

—

—

—

—

—

—

(179)

—

(179)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

(54)

(54)
Accretion of redeemable noncontrolling interest

—

—

—

—

(1,248)

—

—

—

(1,248)
Reversal of accretion of redeemable noncontrolling interest

3,150

—

—

—

3,150
Net transfers from Parent

—

—

—

—

169,595

—

—

—

169,595
Issuance of common stock

15,624

3,694

156

37

(193)

—

—

—

—
Transfer to additional paid-in capital

—

—

—

—

(312,153)

312,153

—

—

—
Balance, September 30, 2020

15,624

3,694

$
156

37

—

312,153

1,375

198

313,919

See Notes to Condensed Consolidated Financial Statements - Unaudited

BBX Capital, Inc.
Condensed Consolidated Statements of Cash Flows - Unaudited
(In thousands)

For the Nine Months Ended September 30,

2020

2019
Operating activities:

Net (loss) income

$
(43,654)

15,252
Adjustment to reconcile net (loss) income to net cash

(used in) provided by operating activities:

Recoveries from loan losses, net

(5,844)

(4,206)
Depreciation, amortization and accretion, net

5,468

6,519
Net gains on sales of real estate and property and equipment

(130)

(11,105)
Equity earnings of unconsolidated real estate joint ventures

(50)

(37,276)
Return on investment in unconsolidated real estate joint ventures

3,934

38,020
Loss from the deconsolidation of IT'SUGAR, LLC

3,326

—
(Increase) decrease in deferred income tax asset, net

(5,402)

6,277
Impairment losses

31,588

6,786
Decrease (increase) in trade inventory

279

(5,016)
(Increase) decrease in trade receivables

(2,336)

5,042
Decrease (increase) in real estate inventory

925

(2,865)
Net change in operating lease asset and operating lease liability

(964)

683
(Increase) decrease in other assets

(1,388)

3,744
Increase (decrease) in accrued liabilities

12,376

(3,227)
(Decrease) increase in due to parent

(1,362)

582
Decrease in accounts payable

(4,256)

(1,554)
(Decrease) increase in other liabilities

(246)

3,716
Net cash (used in) provided by operating activities

(7,736)

21,372
Investing activities:

Return of investment in unconsolidated real estate joint ventures

4,631

30,331
Investments in unconsolidated real estate joint ventures

(14,009)

(20,076)
Proceeds from repayment of loans receivable

5,960

4,935
Proceeds from sales of real estate held-for-sale

2,151

32,136
Additions to real estate held-for-sale and held-for-investment

(70)

(438)
Purchases of property and equipment

(4,032)

(7,765)
Decrease in cash from other investing activities

(1,065)

(73)
Net cash (used in) provided by investing activities

(6,434)

39,050

(Continued)

BBX Capital, Inc.
Condensed Consolidated Statements of Cash Flows - Unaudited
(In thousands)

For the Nine Months Ended September 30,

2020

2019
Financing activities:

Repayments of notes payable and other borrowings

(15,415)

(2,699)
Proceeds from notes payable and other borrowings

10,919

663
Distributions to noncontrolling interests

(54)

—
Net transfers from (to) Parent

94,275

(56,002)
Net cash provided by (used in) financing activities

89,725

(58,038)
Increase in cash, cash equivalents and restricted cash

75,555

2,384
Cash, cash equivalents and restricted cash at beginning of period

21,287

30,082
Cash, cash equivalents and restricted cash at end of period

$
96,842

32,466

Supplemental cash flow information:

Interest paid on borrowings, net of amounts capitalized

$
—

—
Income taxes paid

330

1,016
Supplementary disclosure of non-cash investing and financing activities:

Construction funds receivable transferred to real estate

—

15,890
Bluegreen Vacations Holding Corporation note receivable

75,000

—
Operating lease assets recognized upon adoption of ASC 842

—

86,431
Operating lease liabilities recognized upon adoption of ASC 842

—

95,296
Operating lease assets obtained in exchange for new operating lease liabilities

4,921

21,448
Increase in other assets upon issuance of Community Development District Bonds

827

8,110
Assumption of Community Development District Bonds by homebuilders

3,137

1,035
Reconciliation of cash, cash equivalents and restricted cash:

Cash and cash equivalents

96,592

25,935
Restricted cash

250

528
Cash discontinued operations

—

6,003
Total cash, cash equivalents, and restricted cash

$
96,842

32,466

See Notes to Condensed Consolidated Financial Statements - Unaudited

BBX Capital, Inc.

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income – Unaudited

(In thousands, except share data)



	For the Three Months Ended
	March 31,
	2022		2021
Revenues:
Trade sales	$	65,749		45,914
Sales of real estate inventory		6,470		13,535
Interest income		1,149		1,650
Net gains on sales of real estate assets		1,329		105
Other revenue		779		671
Total revenues		75,476		61,875
Costs and expenses:
Cost of trade sales		51,006		36,893
Cost of real estate inventory sold		2,235		7,858
Interest expense		536		290
Recoveries from loan losses, net		(648)		(508)
Impairment losses		64		—
Selling, general and administrative expenses		27,364		13,198
Total costs and expenses		80,557		57,731
Operating (losses) income		(5,081)		4,144
Equity in net earnings (loss) of unconsolidated real estate joint ventures		1,532		(271)
Other income		984		63
Foreign exchange loss		(189)		(480)
(Loss) income before income taxes		(2,754)		3,456
Benefit (provision) for income taxes		828		(1,001)
Net (loss) income		(1,926)		2,455
Net loss (income) attributable to noncontrolling interests		110		(110)
Net (loss) income attributable to shareholders	$	(1,816)		2,345

Basic (loss) earnings per share	$	(0.12)		0.12
Diluted (loss) earnings per share	$	(0.12)		0.12
Basic weighted average number of common shares outstanding		15,475		19,282
Diluted weighted average number of common shares outstanding		15,475		19,282

Net (loss) income	$	(1,926)		2,455
Other comprehensive income, net of tax:
Unrealized loss on securities available for sale		(46)		(2)
Foreign currency translation adjustments		164		114
Other comprehensive income, net		118		112
Comprehensive (loss) income, net of tax		(1,808)		2,567
Comprehensive loss (income) attributable to noncontrolling interests		110		(110)
Comprehensive (loss) income attributable to shareholders	$	(1,698)		2,457

SeeNotes to Condensed Consolidated Financial Statements – Unaudited

‎



BBX Capital, Inc.
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Three Months Ended March 31, 2022 and 2021
(In thousands)

	Shares of
	Common Stock				Common								Accumulated
	Outstanding				Stock				Additional				Other		Non-
	Class				Class				Paid-in		Accumulated		Comprehensive		controlling		Total
	A		B		A		B		Capital		Deficit		Income		Interests		Equity
Balance, December 31, 2020		15,624		3,694	$	156		37		310,588		(3,457)		1,830		99		309,253
Net income		—		—		—		—		—		2,345		—		110		2,455
Other comprehensive income		—		—		—		—		—		—		112		—		112
Purchase and retirement of common stock		(339)		—		(3)		—		(2,133)		—		—		—		(2,136)
Balance, March 31, 2021		15,285		3,694	$	153		37		308,455		(1,112)		1,942		209		309,684



	Share of
	Common Stock				Common								Accumulated
	Outstanding				Stock				Additional				Other		Non-
	Class				Class				Paid-in		Accumulated		Comprehensive		controlling		Total
	A		B		A		B		Capital		Earnings		Income		Interests		Equity
Balance, December 31, 2021		11,804		3,671	$	118		37		310,588		9,226		1,836		1,143		322,948
Net loss excluding $71 of loss attributable to redeemable noncontrolling interest		—		—		—		—		—		(1,816)		—		(39)		(1,855)
Other comprehensive income		—		—		—		—		—		—		118		—		118
Accretion of noncontrolling interest		—		—		—		—		—		(53)		—		—		(53)
Contributions from noncontrolling interest		—		—		—		—		—		—		—		25		25
Distributions to noncontrolling interests		—		—		—		—		—		—		—		(231)		(231)
Conversion of common stock from Class B to Class A		4		(4)		—		—		—		—		—		—		—
Share-based compensation		—		—		—		—		756		—		—		—		756
Balance, March 31, 2022		11,808		3,667	$	118		37		311,344		7,357		1,954		898		321,708

SeeNotes to Condensed Consolidated Financial Statements - Unaudited

‎

BBX Capital, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(In thousands)



	For the Three Months Ended March 31,
	2022		2021
Operating activities:
Net (loss) income	$	(1,926)		2,455
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Recoveries from loan losses, net		(648)		(508)
Depreciation, amortization and accretion		2,487		1,041
Net gains on sales of real estate and property and equipment		(2,131)		(163)
Equity in net (earnings) losses of unconsolidated real estate joint ventures		(1,532)		271
Return on investment in unconsolidated real estate joint ventures		2,612		88
Increase in deferred income tax asset, net		(280)		(46)
Impairment losses		64		—
Share-based compensation expense		767		—
(Increase) decrease in trade inventory		(6,082)		705
Provision for excess and obsolete inventory		(376)		(356)
(Increase) decrease in trade receivables		(774)		18
Decrease in real estate inventory		481		6,119
Net change in operating lease asset and operating lease liability		525		140
Decrease (increase) in contingent purchase price receivable		642		(2,979)
Increase in other assets		(236)		(1,501)
Decrease in accrued expenses		(2,835)		(801)
Advances to IT'SUGAR		—		(233)
Increase (decrease) in accounts payable		249		(968)
Increase in other liabilities		641		508
Net cash (used in) provided by operating activities		(8,352)		3,790
Investing activities:
Return of investment in unconsolidated real estate joint ventures		402		3,115
Investments in unconsolidated real estate joint ventures		(2,182)		(5,866)
Proceeds from repayment of loans receivable		761		1,001
Proceeds from sales of real estate held-for-sale		3,937		368
Proceeds from sales of property and equipment		2,741		—
Additions to real estate held-for-sale and held-for-investment		(66)		(19)
Purchases of property and equipment		(1,884)		(266)
Change in cash from other investing activities		(3)		(111)
Net cash provided by (used in) investing activities		3,706		(1,778)
				(Continued)

‎



	For the Three Months Ended March 31,
	2022		2021
Financing activities:
Repayments of notes payable and other borrowings		(3,247)		(4,337)
Proceeds from notes payable and other borrowings		4,686		1,757
Purchase and retirement of Class A Common Stock		—		(1,662)
Capital contributions from noncontrolling interests		25		—
Distributions to noncontrolling interests		(231)		—
Net cash provided by (used in) financing activities		1,233		(4,242)
Decrease in cash, cash equivalents and restricted cash		(3,413)		(2,230)
Cash, cash equivalents and restricted cash at beginning of period		119,045		90,387
Cash, cash equivalents and restricted cash at end of period	$	115,632		88,157

Interest paid on borrowings, net of amounts capitalized	$	472		106
Income taxes paid		492		20
Supplementary disclosure of non-cash investing and financing activities:
Construction funds receivable transferred to real estate		34		48
Class A Common Stock purchases with settlement dates in April 2021		—		474
Operating lease assets obtained in exchange for new operating lease liabilities		4,851		—
Assumption of Community Development District Bonds by homebuilders		811		2,194
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents		114,632		87,807
Restricted cash		1,000		350
Total cash, cash equivalents, and restricted cash	$	115,632		88,157

SeeNotes to Condensed Consolidated Financial Statements - Unaudited

BBX Capital, Inc.

Notes to Condensed Consolidated Financial Statements - Unaudited

1. Organization and Basis of Financial Statement Presentation

Organization

BBX Capital, Inc. and its subsidiaries (the “Company” or, unless otherwise indicated or the context otherwise requires, “we,” “us,” or “our”) is a Florida-based diversified holding company. BBX Capital, Inc. as a standalone entity without its subsidiaries is referred to as “BBX Capital.” ~~Prior to September 30, 2020, the Company was a wholly owned subsidiary of Bluegreen Vacations Holding Corporation (“Parent” or “BVH”), which was formerly known as~~

Principal Investments

BBX ~~Capital Corporation.~~

~~Spin-Off from BVH~~

~~Prior to September 30, 2020, BVH was a Florida-based diversified holding company whose~~Capital’s principal holdings ~~were Bluegreen Vacations Corporation (“Bluegreen”),~~are BBX Capital Real Estate, LLC (“BBX Capital Real Estate” or “BBXRE”), BBX Sweet Holdings, LLC (“BBX Sweet Holdings”), and Renin Holdings, LLC (“Renin”). On September 30, 2020, BVH completed the spin-off of the Company, which separated BVH’s business, activities, and investments into two separate, publicly-traded companies: (i) BVH, which continues to hold its investment in Bluegreen, and (ii) BBX Capital, which continues to hold all of BVH’s other businesses and investments, including

BBX Capital Real Estate BBX Sweet Holdings, and Renin. The spin-off was consummated on September 30, 2020 with the distribution by BVH to its shareholders all of the outstanding shares of BBX Capital’s Common Stock through the distribution of one share of BBX Capital’s Class A Common Stock for each share of its Class A Common Stock held on September 22, 2020, the record date for the distribution, and one share of BBX Capital’s Class B Common Stock for each share of its Class B Common Stock held on the record date. Accordingly, as of the close of business on September 30, 2020, BVH ceased to have an ownership interest in the Company, and BVH’s shareholders who received shares of BBX Capital’s Common Stock in the distribution became shareholders of the Company following the spin-off.

In connection with the spin-off, BBX Capital was converted from a Florida limited liability company into a Florida corporation and changed its name from BBX Capital Florida LLC to BBX Capital, Inc., and BVH changed its name from BBX Capital Corporation to Bluegreen Vacations Holding Corporation. In addition, in connection with the spin-off, BVH issued a $75.0 million note payable to the Company that accrues interest at a rate of 6% per annum and requires payments of interest on a quarterly basis. Under the terms of the note, BVH will have the option in its discretion to defer interest payments under the note, with interest on the entire outstanding balance thereafter to accrue at a cumulative, compounded rate of 8% per annum until such time as BVH is current on all accrued payments under the note, including deferred interest. All outstanding amounts under the note will become due and payable in five years or earlier upon certain other events.

In October 2020, BBX Capital’s Class A Common Stock commenced trading on the OTCQX Best Market under the ticker symbol “BBXIA,” and its Class B Common Stock commenced trading on the OTC Pink Market under the ticker symbol “BBXIB.”

BBX Capital has two classes of common stock. Holders of BBX Capital’s Class A Common Stock are entitled to one vote per share, which in the aggregate represents 22% of the combined voting power of BBX Capital’s Class A Common Stock and the Class B Common Stock. BBX Capital’s Class B Common Stock represents the remaining 78% of the combined vote. As of September 30, 2020, the percentage of total common equity represented by the Class A and Class B Common Stock was 81% and 19%, respectively. BBX Capital’s Class B Common Stock is convertible into its Class A Common Stock on a share for share basis at any time at the option of the holder.

~~Principal Holdings~~

~~BBX Capital’s principal holdings include BBX Capital Real Estate, BBX Sweet Holdings, and Renin.~~

~~BBX Capital Real Estate~~

BBX Capital Real Estate is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures, including investments in multifamily rental apartment communities, single-family master-planned for sale housing communities, and commercial properties

located primarily in Florida. In addition, BBX Capital Real Estate owns a 50% equity interest in The Altman Companies, LLC (the “Altman Companies”), a developer and manager of multifamily rental apartment communities, and manages the legacy assets acquired in connection with the Company’s sale of BankAtlantic in 2012, including portfolios of loans receivable, real estate properties, and judgments against past borrowers.

BBX Sweet Holdings

BBX Sweet Holdings is engaged in the ownership and management of operating businesses in the confectionery industry, including Hoffman’s Chocolates, a retailer of gourmet chocolates with retail locations in South Florida, and Las Olas Confections and Snacks, a manufacturer and wholesaler of chocolate and other confectionery products. BBX Sweet Holdings also owns ~~approximately 93%~~over 90% of the equity interests in IT’SUGAR, a specialty candy retailer whose products include bulk candy, candy in giant packaging, and licensed and novelty items. ~~Prior to~~On September 22, 2020, ~~the Company consolidated the financial statements of IT’SUGAR and its subsidiaries as a result of its 93% ownership of IT’SUGAR. However, as further discussed below,~~ IT’SUGAR and its subsidiaries filed voluntary petitions to reorganize under Chapter 11 of Title 11 of the U.S. Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Florida ~~on September 22, 2020,~~(the “Bankruptcy Court”) (the cases commenced by such filings, the “Bankruptcy Cases”), and the Company deconsolidated IT’SUGAR as a result of the filings and the uncertainties surrounding the nature, timing, and specifics of the bankruptcy proceedings. On June 16, 2021, the Bankruptcy Court confirmed IT’SUGAR’s plan of reorganization, and the plan became effective on June 17, 2021 (the “Effective Date”). Pursuant to the terms of the plan, BBX Sweet Holdings’ equity interests in IT’SUGAR were revested on the Effective Date.As a result of the confirmation and effectiveness of the plan and the revesting of its equity interests in IT’SUGAR, the Company was deemed to have reacquired a controlling financial interest in IT’SUGAR and consolidated the results of IT’SUGAR into its consolidated financial statements as of the Effective Date. See Note 16 for further discussion.

Renin

Renin is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products and operates through its headquarters in Canada and ~~two~~three manufacturing and distribution facilities in the United States and Canada. In addition to its own manufacturing activities, Renin also sources various products and raw materials from China, Brazil, and ~~Vietnam.~~certain other countries.

~~Other~~During the three ended March 31, 2022, Renin’s total revenues included $26.7 million of trade sales to 3 major customers and their affiliates and $13.1 million of revenues generated outside the United States. Revenues from each of the 3 major customers were $5.4 million, $11.5 million, and $9.8 million for the three months ended March 31, 2022, which represented 7.2%, 15.3%, and 12.9% of the Company’s total revenues for the three months ended March 31, 2022.

During the three months ended March 31, 2021, Renin’s total revenues included $31.4 million of trade sales to 3 major customers and their affiliates and $14.3 million of revenues generated outside the United States. Revenues from each of the 3 major customers were $9.4 million, $11.1 million, and $10.9 million for the three months ended March 31, 2021, which represented 15.1%, 17.9%, and 17.7% of the Company’s total revenues for the three months ended March 31, 2021.

Other

In addition to its principal holdings, the Company has investments in other operating businesses, including a restaurant located in South Florida that was acquired through a loan foreclosure and an insurance agency.

In 2016, Food for Thought Restaurant Group (“FFTRG”), a wholly-owned subsidiary of the Company, entered into area development and franchise agreements with MOD Pizza related to the development of up to approximately 60 MOD Pizza franchised restaurant locations throughout Florida. Through 2019, FFTRG had opened nine restaurant locations. As a result of FFTRG’s overall operating performance and the Company’s goal of streamlining its investment verticals, the Company entered into an agreement with MOD Pizza to terminate the area development and franchise agreements and transferred seven of its restaurant locations, including the related assets, operations, and lease obligations, to MOD Pizza in September 2019. In addition, the Company closed the remaining two locations and terminated the related lease agreements. FFTRG’s operations as a franchisee of MOD Pizza are presented as discontinued operations in the Company’s condensed consolidated financial statements.

Basis of Financial Statement Presentation

The accompanying condensed consolidated financial statements of the Company include the ~~combined~~condensed consolidated financial statements of BBX Capital and its subsidiaries, including BBX Capital Real Estate, BBX Sweet Holdings, ~~Renin,~~ and ~~FFTRG,~~Renin. Due to the deconsolidation of IT’SUGAR in September 2020 as ~~well as certain subsidiaries in which ownership was transferred from Parent in connection with the spin-off transaction described above.~~

~~Other than~~a result of its bankruptcy filings and the Company’s ~~statement~~reconsolidation of ~~financial condition~~IT’SUGAR’s subsequent to its emergence from bankruptcy in June 2021 as ~~of September 30, 2020, which reflects~~discussed above, the Company’s condensed consolidated statement of changes in equity, condensed consolidated statement of operations and comprehensive income and condensed consolidated statement of cash flows for the three months ended March 31, 2021 does not include the operations of IT’SUGAR while the Company’s condensed consolidated statement of changes in equity, condensed consolidated statement of operations and comprehensive loss and condensed consolidated statement of cash flows for the three months ended March 31, 2022 includes the operations of IT’SUGAR. The Company’s statements of financial condition includes IT’SUGAR assets and liabilities as of ~~BBX Capital~~March 31, 2022 and its subsidiaries, these condensed consolidated financial statements have been derived from the accounting records of Parent and these companies and should be read with the accompanying notes thereto. Further, the condensed consolidated financial statements do not necessarily reflect what the results of operations, financial position, or cash flows would have been had the Company been a separate entity nor are they indicative of the future results of the Company.December 31, 2021.

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these financial statements do not include all of the information and disclosures required by GAAP for complete financial statements.

Financial statements prepared in conformity with GAAP require the Company to make estimates based on assumptions about current and, for some estimates, future economic and market conditions which affect reported amounts and related disclosures in the Company’s financial statements. Due to, among other things, the impact and potential future impact of the ~~ongoing~~ COVID-19 pandemic, ~~which is discussed in more detail below,~~the current inflationary economic environment, rising interest rates, labor shortages and supply chain issues and ongoing economic uncertainty, actual conditions could differ from the Company’s expectations and estimates, which could materially affect the Company’s results of operations and financial condition. The severity, magnitude, and duration, as well as the economic consequences, of the COVID-19 pandemic and economic trends, are uncertain, rapidly changing, and difficult to predict. As a result, the Company’s accounting estimates and assumptions may change over time in response to the COVID-19 ~~pandemic.~~pandemic, inflationary trends and resulting economic impacts. Such changes could result in, among other adjustments, future impairments of intangibles, long-lived assets, and investments in unconsolidated subsidiaries and future reserves for inventory and receivables.

The majority of the assets, liabilities, revenues, expenses, and cash flows of the Company have been identified based on the existing legal entities. However, the historical costs and expenses reflected in the financial statements also include an allocation for certain corporate and shared service functions that were historically provided by Parent prior to the spin-off. These expenses have been allocated to the Company on the basis of direct usage when identifiable, while the remainder of the expenses, including costs related to executive compensation, were allocated primarily on a pro-rata basis of combined revenues and equity in earnings of unconsolidated joint ventures of Parent and its subsidiaries. However, the allocation of corporate expenses excludes costs specific to the spin-off and the acceleration of compensation expense in connection with the spin-off. The Company believes that the assumptions underlying the condensed consolidated financial statements, including the assumptions regarding the allocation of general corporate expenses from Parent, are reasonable. However, the condensed consolidated financial statements may not include all of the actual expenses that would have been incurred had the Company been operating as a standalone company during the periods presented. Actual costs that would have been incurred if the Company operated as a standalone company would depend on multiple factors, including organizational structure, technology infrastructure, and strategic direction. In addition, following the spin-off on September 30, 2020, the Company also incurs additional costs associated with being a public company that are not reflected in the accompanying condensed consolidated financial statements.

These unaudited condensed consolidated financial statements and related notes are presented as permitted by Form 10-Q and should be read in conjunction with the Company’s audited ~~combined carve-out~~consolidated financial statements and footnotes thereto included in the Company’s ~~Information Statement, dated August 27, 2020, attached as Exhibit 99.1 to the Company’s Registration Statement~~Annual Report on Form 1010-K for the year ended December 31, 2021 (the “2021 Annual Report”) filed with the SEC on ~~August 27, 2020 (the “Form 10 Information Statement”).~~ March 16, 2022.

The condensed consolidated financial statements include the accounts of BBX Capital’s wholly-owned subsidiaries, other entities in which BBX Capital or its wholly-owned subsidiaries hold controlling financial interests, and any variable interest entities (“VIEs”) in which BBX Capital or one of its consolidated subsidiaries is deemed the primary beneficiary of the VIE. All significant inter-company accounts and transactions have been eliminated in consolidation.

Impact of the COVID-19 Pandemic and Current Economic Issues

The COVID-19 pandemic has resulted in an unprecedented disruption in the U.S. and global economies and the industries in which the Company operates due to, among other things, government ordered “shelter in place” and “stay at home” orders and advisories, travel restrictions, and restrictions on business operations, including government guidance and restrictions with respect to travel, public accommodations, social gatherings, and related matters, as well asoperates. While the ~~general public’s reaction to the pandemic. The disruptions arising from the pandemic and the reaction~~impact of the COVID-19 pandemic on our businesses has generally subsided, it is not currently possible to accurately assess the expected duration and effects of COVID-19 and general ~~public had~~economic conditions on our business. These include impacts on i) consumer demand, (ii) disruptions in global supply chains, iii) employee absenteeism and a ~~significant adverse impact on the Company's financial condition~~general labor shortage, and ~~operations during the three and nine months ended September 30, 2020.~~ (iv) increased economic uncertainty.

The duration and severity of the pandemic and related disruptions, as well as the adverse impact onof economic and market conditions, are ~~uncertain; however, given the nature of these circumstances, the adverse impact of the pandemic on the Company’s~~ ~~condensed consolidated~~ results of operations, cash flows, and financial condition in 2020 has been, and is expected to continue to be, material. Furthermore, although the duration and severity of the effects of the pandemic are uncertain, ~~demand for many of the Company’s products and services may remain weak for a significant length of time,~~ and the Company ~~cannot predict if or when the industries in which the Company operates will return to pre-pandemic levels.~~

Although the impact of the COVID-19 pandemic on the Company’s principal holdings and management’s efforts to mitigate the effects of the pandemic has varied, as described in further detail below, BBX Capital and its subsidiaries have sought to take steps to manage expenses through cost saving initiatives and reductions in employee head count and actions to increase liquidity and strengthen the Company’s financial position, including reducing planned capital expenditures. As of September 30, 2020, the Company’s consolidated cash balances were $96.6 million.

~~BBX Capital Real Estate~~

~~Although BBXRE has not to date been as significantly~~may be adversely impacted by ~~the COVID-19 pandemic as BBX Sweet Holdings, BBXRE’s operations have been impacted by the pandemic,~~these conditions in future periods. The overall situation is extremely fluid, and it is ~~expected that its operations will continue~~impossible to ~~be impacted by~~predict the ~~pandemic in~~timing of future periods. While recent construction activities have continued at BBXRE’s existing projects and sales at its single-family home developments have generally returned to pre-pandemic levels following some disruptions in March and April 2020, the effects of the pandemic, including increased unemployment and economic uncertainty generally andchanges in the ~~real estate~~situation and credit markets in particular, as well as increases in the number of COVID-19 cases in Florida and throughout the United States, have impacted rental activities at BBXRE’s multifamily apartment developments and increased uncertainty relatingwhat their impact may be on our business. At this time we are also not able to the expected timing and pricing of future sales of multifamily apartment developments, single-family homes, and developed lots at BBXRE’s Beacon Lake Community, as well as the timing and financing of new multifamily apartment developments.

~~While the Company expects that the impact of~~predict whether the COVID-19 pandemic will ~~adversely affect BBXRE’s~~result in permanent changes in our customers’ behavior, which may include continued or permanent decreases in discretionary spending and reductions in demand for retail store and confectionery products, home improvement products or real estate, each of which would have a material adverse impact on our business, operating results and financial ~~condition for the year ended December 31, 2020, primarily with respect to the expected timing~~condition.

In addition, current inflationary and economic trends may adversely impact our results of sales, the Company evaluated various factors, including asset-specific factors, overall economic and market conditions, and the excess of the expected profits associated with real estate assets in relation to their carrying amounts, and concluded that, except as discussed below, there had not beenoperations. BBXRE has experienced a significant decline in the fair value of most of BBXRE’s real estate assets as of September 30, 2020 that should be recognized as an impairment loss. As part of this evaluation, the Company considered the sales at its single-family home developments (which have returned to pre-pandemic levels), continued collection of rent at its multifamily apartment developments, and indications that there has not to date been a significant decline in sales prices for single family homes or an increase in capitalization rates for multifamily apartment communities. However, the Company recognized $2.7 million of impairment losses during the nine months ended September 30, 2020 primarily related to a declinecommodity and labor prices, which has resulted in the estimated fair values of certain of BBXRE’s investments in joint ventures, including i) a joint venture that is developing an office tower, as the market for office space has been more significantly impacted by the pandemic compared to the single family and multifamily markets in which BBXRE primarily invests, and ii) a joint venture invested in a multifamily apartment community in which BBXRE purchased its interest following the stabilization of the underlying asset at a purchase price calculated based on assumptions related to the timing and pricing of the sale of the asset, both of which have been impacted by the pandemic.

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

~~The Altman Companies and Related Investments~~

To date, the COVID-19 pandemic has not significantly impacted construction activities which remain ongoing at the existing projects sponsored by the Altman Companies, and as a result, the Altman Companies continues to generate development and general contractor fees from such projects. In addition, through September 30, 2020, the Altman Companies had collected in excess of 97% of the rents at the multifamily apartment communities under its management. ~~While its leasing activities were conducted virtually during March through May 2020, the Altman Companies~~construction costs. IT’SUGAR has reopened its leasing offices for visits by appointment. Although the Altman Companies experienced a decline in tenant demand and in the volume of new leases during the second quarter of 2020, it generally experienced an increase in the ~~volume~~cost of ~~new leases at~~inventory and freight, and Renin has experienced significant supply chain challenges and increases in costs related to shipping and raw materials. These trends could have a material effect on the Company’s results of operations and financial condition if the Company is not able to increase prices to its ~~communities during~~customers to offset the ~~third quarter of 2020. However,~~increase in ~~an effort to maintain occupancy at~~ its ~~stabilized communities and increase occupancy at its communities under development, commencing~~costs.

Further, downturn in the ~~second quarter and through the third quarter of 2020, the Altman Companies offered an increased number of concessions to prospective and renewing tenants.~~

~~The impact of the COVID-19 pandemic on the economy remains uncertain, and the effects of the pandemic, including a prolonged~~ economic downturn, high unemployment, the expiration of or a decrease in government benefits to individuals, and government-mandated moratoriums on tenant evictions, could ultimately have a longer term and more significant impact on rental rates, occupancy levels, and rent collections, including an increase in tenant delinquencies and/or requests for rent abatements. These effects would impact the amount of rental revenues generated from the multifamily apartment communities sponsored and managed by the Altman Companies, the extent of management fees earned by the Altman Companies, and the ability of the related joint ventures to stabilize and successfully sell such communities. Furthermore, a decline in rental revenues at developments sponsored by the Altman Companies could require it, as the sponsor and managing member, to fund operating shortfalls in certain circumstances.

Further, while there are indications that the capitalization rates for multifamily apartment communities similar to those sponsored and managed by the Altman Companies have generally remained steady, the impact of the COVID-19 pandemic on economic conditions in general, including uncertainty regarding the severity and duration of such impact, has adversely impacted the level of real estate sales activity and overall credit markets andenvironment may ~~ultimately~~ have a significant adverse impact on ~~capitalization rates and real estate values in future periods, particularly if there is a prolonged economic downturn.~~

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

~~Beacon Lake Master Planned Development~~

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

~~BBX Sweet Holdings~~

~~IT’SUGAR~~

In March 2020, as a result of various factors, including government-mandated closures and CDC and WHO advisories in connection with the COVID-19 pandemic, IT’SUGAR closed all of its retail locations and furloughed all store employees and the majority of its corporate employees. Between May 2020 and September 2020, IT’SUGAR reopened nearly all of its ~~approximately 100~~ ~~locations~~ ~~that were open prior to the pandemic~~ ~~as part of a phased reopening plan which included revised store floor plans, increased sanitation protocols, and the gradual recall of~~

furloughed store and corporate employees to full or part-time employment. However, from time to time, IT’SUGAR has been required to close previously reopened locations as a result of various factors, including government- mandated closures and staffing shortages.

IT’SUGAR ceased paying rent to the landlords of its closed locations in April 2020 and engaged in negotiations with its landlords for rent abatements, deferrals, and other modifications for both the period of time that the locations were closed and the subsequent period that the locations have been opened and operating under conditions which have been affected by the pandemic. In addition to its unpaid rental obligations, IT’SUGAR ceased paying various outstanding obligations to its vendors.

Although IT’SUGAR was able to reopen its retail locations and received an advance of $2.0 million from a subsidiary of BBX Capital (as further described in Note 7), IT’SUGAR was unable to maintain sufficient liquidity to sustain its operations as i) it was unable to obtain significant rent abatements or deferrals from its landlords and amended payment terms from its vendors and ii) its sales volumes had not sufficiently improved and stabilized following the reopening of its locations. In particular, although a significant portion of its retail locations were reopened during the three months ended September 30, 2020, IT’SUGAR’s total revenues for the period declined by approximately 50.4% as compared to the comparable period in 2019. As a result, on September 22, 2020, IT’SUGAR and its subsidiaries filed voluntary petitions to reorganize under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”) (the cases commenced by such filings, the “Bankruptcy Cases”).

Under Section 362 of the Bankruptcy Code, the filing of bankruptcy petitions automatically stays most actions against IT’SUGAR, including most actions to collect pre-petition indebtedness or to exercise control of the property of IT’SUGAR. Accordingly, absent an order of the Bankruptcy Court, substantially all pre-petition liabilities will be subject to settlement under a plan of reorganization, as further described below.

In order to successfully exit the Chapter 11 Bankruptcy Cases, IT’SUGAR will need to propose, and obtain confirmation by the Bankruptcy Court of, a plan of reorganization or liquidation (the “Reorganization Plan”) that satisfies the requirements of the Bankruptcy Code. The Reorganization Plan will determine the rights and claims of various creditors and security holders, and under the priority rules established by the Bankruptcy Code, certain post-petition liabilities and pre-petition liabilities will be given priority over pre-petition indebtedness and need to be satisfied before unsecured creditors or stockholders are entitled to any distribution. As provided by the Bankruptcy Code, IT’SUGAR initially has the exclusive right to solicit a plan and plans to submit a Reorganization Plan to the Bankruptcy Court in the near future. In connection with the Chapter 11 Bankruptcy Cases, the Office of the United States Trustee, a division of the Department of Justice, has appointed an official committee of unsecured creditors (the “Creditors’ Committee”), which has a right to be heard on all matters that come before the Bankruptcy Court, including the confirmation of the Reorganization Plan.

If IT’SUGAR fails to file a Reorganization Plan or if the Bankruptcy Court does not confirm a Reorganization Plan filed by IT’SUGAR, the Bankruptcy Cases could be converted to cases under Chapter 7 of the Bankruptcy Code. Under Chapter 7 bankruptcy cases, a trustee would be appointed to collect IT’SUGAR’s assets, reduce them to cash, and distribute the proceeds to IT’SUGAR’s creditors in accordance with the statutory scheme of the Bankruptcy Code. Alternatively, if IT’SUGAR’s Reorganization Plan is not confirmed by the Bankruptcy Court, in lieu of the conversion of the Bankruptcy Cases to Chapter 7 bankruptcy cases, the Bankruptcy Court could dismiss the Bankruptcy Cases.

At the current time, IT’SUGAR is continuing to operate its retail locations under the supervision of the Bankruptcy Court and Creditors’ Committee and is negotiating with its creditors in relation to a proposed Reorganization Plan and the terms of amendments to the lease agreements associated with its retail locations. In addition, as further described in Note 17, in October 2020, IT’SUGAR obtained a $4.0 million “debtor in possession” (“DIP”) credit facility from a subsidiary of BBX Capital that was approved by the Bankruptcy Court on an interim basis pending a final hearing. As of November 9, 2020, $2.0 million had been funded to IT’SUGAR under the DIP credit facility.

At this time, it is not possible to predict the ultimate effect of the reorganization process on IT’SUGAR’s business and creditors or when, or if, IT’SUGAR may emerge from bankruptcy. While the reorganization process may improve IT’SUGAR’s result of operations, cash flows, and financial condition if it obtains relief in relation to its pre-petition liabilities and it is able to negotiate amendments to its lease agreements that lower its ongoing occupancy costs, there is no assurance that it will obtain such relief, and the ultimate impact of the Bankruptcy Cases and the reorganization process on IT’SUGAR and its results of operations, cash flows, or financial condition remains uncertain. Further, the effects of the COVID-19 pandemic on demand, sales levels, and consumer behavior, as well as the current recessionary economic environment, have had and could continue to have a material adverse effect on IT’SUGAR’s business, results of operations, and financial condition during the bankruptcy proceedings and thereafter.

~~As a result of IT’SUGAR filing the Chapter 11 Bankruptcy Cases and the~~ ~~uncertainties surrounding the nature, timing, and specifics of the bankruptcy proceedings,~~ ~~the Company deconsolidated IT’SUGAR as of September 22, 2020 and recognized a loss of~~ ~~$3.3 million~~ ~~during the three and nine months ended September 30, 2020 in connection with the deconsolidation, as further described in Note 17. Prior to the deconsolidation of IT’SUGAR,~~ ~~the Company recognized $25.3 million of impairment losses during the nine months ended September 30, 2020 related to IT’SUGAR’s goodwill and long-lived assets~~ a~~s a result of the effects of the pandemic, including the recognition of a goodwill impairment loss of $20.3 million~~ based on a decline in the estimated fair value of IT’SUGAR. The decline in the estimated fair value of IT’SUGAR during the nine months ended September 30, 2020 as compared to the Company’s prior valuation of IT’SUGAR as of December 31, 2019 reflected the impact on the Company’s estimated future cash flows of the temporary closure of IT’SUGAR’s retail locations commencing in March 2020, including the liabilities incurred by IT’SUGAR during the shutdown, and considered scenarios in which IT’SUGAR’s business and sales volumes would stabilize following the phased reopening of its retail locations. The Company’s estimated discount rate applicable to IT’SUGAR’s cash flows was also increased to reflect, among other things, changes in market conditions, the uncertainty of the duration and severity of the economic downturn, uncertainty related to the retail environment and consumer behavior, uncertainty related to IT’SUGAR’s ability to stabilize its operations and implement its long-term strategies for its business, and the deterioration in IT’SUGAR’s financial condition as a result of the effects of the COVID-19 pandemic, including its lack of sufficient liquidity for its operations during 2020.

The Company’s assessment of IT’SUGAR’s assets for impairment, as well as its estimate of the fair value of its investment in IT’SUGAR in connection with the deconsolidation of IT’SUGAR, required the Company to make estimates based on facts and circumstances as of each reporting date and assumptions about current and future economic and market conditions. These assumptions included the stabilization of IT’SUGAR following a phased reopening of its retail locations in 2020 and its ability to access and operate in its retail locations in spite of ongoing negotiations with the landlords of these locations related to unpaid rents. Further, the Company’s estimated fair value of its investment in IT’SUGAR at the time of its filing of Bankruptcy Cases included assumptions related to relief of pre-petition obligations and improved occupancy costs as a result of renegotiated lease agreements for its retail locations. In addition, the Company’s estimates assumed that there would not be a material permanent decline in the demand for IT’SUGAR’s products and that IT’SUGAR will ultimately in the future return to its full operations and implement its long-term strategy to reinvest in and grow its business. However, as it is difficult to predict i) the severity, magnitude, and duration, as well as the economic consequences, of the COVID-19 pandemic, which are uncertain and rapidly changing and may involve the re-implementation of government mandated closures or operating restrictions, and ii) the ultimate outcome of IT’SUGAR’s Chapter 11 Bankruptcy Cases, these estimates and assumptions may change over time, which may result in the recognition of additional impairment losses related to the Company’s investment in IT’SUGAR that would be material to the Company’s financial statements. Changes in assumptions that could materially impact the Company’s estimates related to IT’SUGAR that could result in the recognition of impairment losses in future periods include, but are not limited to, IT’SUGAR’s Chapter 11 Bankruptcy Cases being converted to Chapter 7 bankruptcy cases, IT’SUGAR not obtaining expected relief during the reorganization, a material permanent decline in demand for IT’SUGAR’s products, IT’SUGAR abandoning its long-term strategy to reinvest and grow its business as a result of changes in consumer demand, and significant additional closures following the initial reopening of locations as a result of additional outbreaks of COVID-19.

~~See Note 6 for additional information with respect to the recognition of impairment losses related to IT’SUGAR.~~

~~Hoffman’s Chocolates and Las Olas Confections and Snacks~~

In addition to the material adverse impact of the COVID-19 pandemic on IT’SUGAR’s operations, BBX Sweet Holdings’ other operations have also been impacted by the pandemic. In March 2020, Hoffman’s Chocolates closed all of its retail locations to customer traffic and limited sales to curbside pickup (where allowable by government mandates) and online customers, and during the three months ended June 30, 2020, it commenced a phased reopening of its locations to customer traffic. As of July 1, 2020, Hoffman’s Chocolates had reopened all of its locations, and its sales volumes during the three months ended September 30, 2020 were approximately 71% of pre-pandemic levels (as compared to the comparable period in 2019). Although Las Olas Confections and Snacks experienced a decline in sales through the second quarter of 2020, its manufacturing and distribution processes were not materially impacted by the pandemic, and its sales during the nine months ended September 30, 2020 were approximately 92% of pre-pandemic levels (as compared to the comparable period in 2019).

~~rental obligations of $0.2 million, which are included in other liabilities in the Company’s~~ ~~condensed consolidated~~ statement of financial condition, and they had executed lease amendments with respect to 6 of these locations, including Las Olas Confections and Snacks’ manufacturing facility in Orlando, Florida. There is no assurance that the sales volumes of these businesses, will improve, and they may be required to close previously reopened locations as a result of governments reimplementing mandated closures or otherwise. There is also no assurance that Hoffman’s Chocolates will be able to execute a lease amendment with the landlord of its remaining location for which an agreement has yet to be reached, and due to the uncertainty related to these businesses as a result of the pandemic, there is no assurance they will be in a position to meet their obligations under the terms of lease agreements and amendments that have been executed or are otherwise being negotiated.

~~Renin~~

As of September 30, 2020, Renin had not been significantly impacted by the COVID-19 pandemic, and it has continued to operate both of its manufacturing and distribution facilities, source various products and raw materials from China and Vietnam, and sell its products through various channels. Further, in October 2020, Renin acquired substantially all of the assets and assumed certain of the liabilities of Colonial Elegance Inc. (“Colonial Elegance”), a supplier and distributor of building products, including barn doors, closet doors, and stair parts, that is headquartered in Montreal, Canada, for a base purchase price of CAD $51.0 million (approximately USD $39.0 million). See Note 18 for additional information related to the acquisition, including i) Renin’s acquisition of excess working capital held by Colonial Elegance for CAD $6.7 million (approximately USD $5.1 million) and ii) the expansion of its existing credit facility with TD Bank to partially fund the acquisition.

Although Renin has experienced a decline in sales to certain customers as a result of concerns related to the pandemic, these declines have been offset by an increase in sales through its retail and commercial channels. However, as a result of the pandemic, Renin has experienced increased costs related to the shipment of products and raw materials, which has impacted its product costs and gross margin.

Although Renin’s operations had not been significantly impacted by the pandemic as of September 30, 2020, the effects of the pandemic, including a recessionary economic environment, could have a significant adverse impact on Renin’s results of operations and financial condition in future periods, particularly if an economic downturn is prolonged in nature and impacts consumer demand, ~~or the effects of the pandemic result in material disruptions in~~materially disrupts the supply ~~chains~~chain for ~~its~~the Company’s operating businesses’ products and raw materials, ~~including additional~~ delays in the production and shipment of products and raw materials from foreign suppliers ~~and continued~~or increases in shipping costs. ~~Further, while Renin has begun~~

Labor is one of the primary components of our expenses. A number of factors may adversely affect the labor force available to ~~diversify its supply chain~~us or increase our labor costs, including high unemployment levels, federal unemployment subsidies and transfer the assembly of certain products from foreign suppliers to its own manufacturing facilities, Renin continues to source products and raw materials from China. As a result, disruptions in its supply chain from Chinaother government regulations. A sustained labor shortage or increased turnover rates, whether caused by COVID-19, inflationary pressures, or as a result of ~~various~~general macroeconomic conditions or other factors ~~including~~could lead to increased ~~tariffs~~costs, such as increased overtime pay to meet demand and increased wage rates to attract and retain employees, or ~~closures~~negatively affect our operations or ~~delays~~adversely impact our business and results. Further, any mitigation measures we take in ~~the supply chain,~~response to a decrease in labor availability or an increase in labor costs may be unsuccessful and could have ~~a material impact on Renin’s~~negative effects.

BBX Capital and its subsidiaries sought to take steps to manage expenses through cost ~~of product~~saving initiatives and ~~ability~~steps intended to ~~meet customer demand.~~

~~Recently Adopted Accounting Pronouncements~~

~~The Financial Accounting Standards Board (“FASB”) has issued the following Accounting Standards Updates (“ASU”)~~increase liquidity and ~~guidance relevant to~~strengthen the Company’s ~~operations which were adopted as~~financial position, including delaying planned capital expenditures. As of ~~January 1, 2020:~~

~~ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (as subsequently amended and clarified by various ASUs).~~ This standard introduces an approach of estimating credit losses on certain types of financial instruments based on expected losses and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating its allowance for credit losses. The standard also requires entities to record an allowance for credit losses for available for sale debt securities rather than reduce the carrying amount under the other-than temporary impairment model. In addition, the standard requires entities to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination (i.e., by vintage year). The Company adopted this standard on January 1, 2020 using a modified retrospective method and did not recognize a cumulative effect adjustment upon adoption of the standard as the Company’s trade receivables are generally due 30 to 60 days from the date of the invoice with minimal historical loss experience. The Company’s loans receivable are legacy loans from its sale of BankAtlantic that have been written down to the collateral value less cost to sell with interest recognized on a cash basis. As such, the adoption of the standard did not have a material impact on the Company’s ~~condensed consolidated~~ ~~financial statements.~~

~~ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.~~ This standard modifies the disclosure requirements in Topic 820 related to the valuation techniques and inputs used in fair value measurements, uncertainty in measurement, and changes in measurements applied. This standard was effective for the Company on January 1, 2020, and the adoption of the standard did not have a material impact onMarch 31, 2022, the Company’s consolidated ~~financial statements and disclosures.~~cash balances were $114.6 million.

~~FASB Staff Q&A Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic (Topic 842):~~ The FASB issued guidance on lease concessions related to the effects of the COVID-19 pandemic allowing entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic as if the enforceable rights and obligationsfor those concessions existed in the lease contract (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the lease contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance of Topic 842. The election only applies to concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee.

Pursuant to this FASB guidance, the Company has elected to account for lease concessions related to the effects of the COVID-19 pandemic as if the rights and obligations related to such concessions existed in the related lease agreements. Accordingly, if a concession does not result in a substantial increase in the rights of the lessor or the Company’s obligations as the lessee, the Company will elect to not account for the concession as a modification and will not remeasure the lease liability and right-of-use asset for such leases. If rent is deferred pursuant to a concession, such rents will be accrued pursuant to the existing terms of the lease, and the related liability will be relieved when the rental payment is made to the landlord pursuant to the terms of the concession. If rent is abated pursuant to a concession, the Company’s rent expense will be decreased by the amount of the abated rental payment in the period in which the payment was otherwise due pursuant to the existing terms of the lease.

As of September 30, 2020, excluding agreements executed by IT’SUGAR prior to its filing of the Bankruptcy Cases and related deconsolidation by the Company, the Company had executed 7 agreements related to lease concessions associated with the COVID-19 pandemic, which included a combination of rent deferrals and abatements. Under the terms of such agreements, rent payments subject to deferral are generally required to be paid between 1- 21 months following the execution of the agreements based on the payment schedules specified in such agreements. The Company accounted for 3 of these agreements as modifications and remeasured the related lease liabilities as the concessions extended the lease terms and increased the Company’s overall obligations under the related lease agreements. The Company did not account for the remaining 4 agreements as modifications as the concessions did not result in a substantial increase in the rights of the lessor or the obligations of the Company as the lessee. Under these agreements, deferrals and abatements of rental payments were $0.2 million and $0.3 million, respectively, for the nine months ended September 30, 2020, which were not accounted for as modifications. As of September 30, 2020, $0.1 million of these deferred amounts had been paid to the respective landlords.

~~Future Adoption of Recently Issued Accounting Pronouncements~~

~~The FASB has issued the following accounting pronouncements and guidance relevant to the Company’s operations which had not been adopted by the Company as of September 30, 2020:~~

~~ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.~~ This standard removes specific exceptions to the general principles in Topic 740 including exceptions related to (i) the incremental approach for intraperiod tax allocations, (ii) accounting for basis differences when there are ownership changes in foreign investments, and (iii) interim period income tax accounting for year-to-date losses that exceed anticipated losses. The statement is effective for the Company on January 1, 2021 and interim periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact that this standard may have on its consolidated financial statements.

~~ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.~~ This standard provides relief for companies preparing for discontinuation of LIBOR in response to the Financial Conduct Authority (the regulatory authority over LIBOR) plan for a phase out of regulatory oversight of LIBOR interest rate indices after 2021 to allow for an orderly transition to an alternate reference rate. The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to LIBOR for promissory notes or other contracts that are currently indexed to LIBOR. The ARRC has proposed a market transition plan to SOFR from LIBOR, and organizations are currently working on transition plans as it relates to derivatives and cash markets exposed to LIBOR.

The Company currently has a LIBOR indexed line of credit which has a balance of $4.9 million and matures after 2021. Although companies can apply this standard immediately, the guidance will only be available for a limited time, generally through December 31, 2022. The Company is currently evaluating the potential impact that the eventual replacement of the LIBOR benchmark interest rate could have on its results of operations, liquidity and consolidated financial statements and the related impact that this standard may have on its consolidated financial statements.

2. Trade Receivables

The Company’s trade receivables consisted of the following (in thousands):



	March 31,		December 31,
	2022		2021
Trade receivables	$	30,937		30,124
Allowance for expected credit losses		(264)		(225)
Total trade receivables	$	30,673		29,899

September 30,

December 31,

2020

2019
Trade receivables

$
15,599

13,274
Allowance for bad debts

(262)

(170)
Total trade receivables

$
15,337

13,104

3. Trade Inventory

The Company’s trade inventory consisted of the following (in thousands):




	September 30,		December 31,		March 31,		December 31,
	2020		2019		2022		2021
Raw materials	$	3,828		3,048	$	8,790		8,545
Paper goods and packaging materials		1,449		1,327		2,138		1,777
Finished goods		11,074		18,468		40,731		35,255
Total trade inventory	$	16,351		22,843		51,659		45,577
Inventory reserve						(3,306)		(3,682)
Total trade inventory, net					$	48,353		41,895

4. Real Estate

The Company’s real estate consisted of the following (in thousands):


	September 30,		December 31,		March 31,		December 31,
	2020		2019		2022		2021
Real estate held-for-sale	$	9,342		11,297	$	5,075		7,679
Real estate held-for-investment		6,024		6,015		6,177		6,113
Real estate inventory		44,129		48,506		7,209		8,884
Predevelopment costs						608		192
Total real estate	$	59,495		65,818	$	19,069		22,868

5. Investments in and Advances to Unconsolidated Real Estate Joint Ventures

As of ~~September 30, 2020,~~March 31, 2022, the Company had equity interests in and advances to unconsolidated real estate joint ventures involved in the development of multifamily rental apartment communities ~~as well as~~and single-family master planned for sale housing communities. In addition, the Company owns a 50% equity interest in the Altman Companies, a developer and manager of multifamily apartment communities.

Investments in unconsolidated real estate joint ventures are accounted for as unconsolidated ~~VIEs.~~VIEs under the equity method of accounting.

The Company’s investments in and advances to unconsolidated real estate joint ventures consisted of the following (in thousands):



	March 31,		December 31,
	2022		2021
Altis Grand Central	$	731	$	730
Altis Ludlam Trail⁽¹⁾		11,144		10,831
Altis Grand at The Preserve		—		194
Altis Little Havana		1,078		1,021
Altis Lake Willis Phase 1		442		437
Altis Lake Willis Phase 2		2,715		2,538
Altis Miramar East/West		2,904		2,878
Altis Grand at Suncoast		3,641		2,780
Altis Blue Lake		351		260
Altis Santa Barbara		409		—
The Altman Companies		16,157		16,716
ABBX Guaranty		3,750		3,750
Bayview		1,367		1,308
Marbella		872		974
The Main Las Olas		1,983		1,990
Sky Cove		1,348		1,686
Sky Cove South		4,608		4,708
Other		166		165
Total	$	53,666	$	52,966

(1)The carrying value of BBXRE’s investment at March 31, 2022 and December 31, 2021 includes $10.6 million and $10.3 million, respectively, related to BBXRE’s investment in the preferred equity associated with the Altis Ludlam Trail project accounted for as a loan receivable.

September 30,

December 31,

2020

2019
Altis at Grand Central Capital, LLC

$
2,472

$
2,653
Altis Promenade Capital, LLC

1,977

2,126
Altis at Bonterra - Hialeah, LLC

—

618
Altis Ludlam - Miami Investor, LLC

9,378

1,081
Altis Suncoast Manager, LLC

1,102

753
Altis Pembroke Gardens, LLC

311

1,277
Altis Fairways, LLC

1,657

1,880
Altis Wiregrass, LLC

163

1,792
Altis LH-Miami Manager, LLC

837

811
Altis Vineland Pointe Manager, LLC

5,355

4,712
Altis Miramar East/West

2,794

2,631
The Altman Companies, LLC

15,589

14,745
ABBX Guaranty, LLC

3,750

3,750
Sunrise and Bayview Partners, LLC

1,450

1,562
PGA Design Center Holdings, LLC

3

996
CCB Miramar, LLC

7,168

5,999
BBX/Label Chapel Trail Development, LLC

153

1,126
L03/212 Partners, LLC

2,179

2,087
PGA Lender, LLC

2

2,111
Sky Cove, LLC

4,146

4,178
All other investments in real estate joint ventures

162

442
Total

$
60,648

$
57,330

See Note 7 to the Company’s ~~condensed~~ consolidated financial statements for the ~~years~~year ended December 31, ~~2019, 2018, and 2017~~ ~~and footnotes thereto~~ 2021 included in the ~~Form 10 Information Statement~~2021 Annual Report for the Company’s accounting policies relating to its investments in unconsolidated real estate joint ventures, including the Company’s analysis and determination that such entities are VIEs in which the Company is not the primary beneficiary.

~~As of December 31, 2019,~~In February 2022, BBXRE ~~had~~ invested ~~$1.1~~$0.4 million in Altis Santa Barbara – Naples Manager LLC (“Altis Santa Barbara”). Altis Santa Barbara was formed to serve as the ~~Altis at Ludlam~~Manager of Santa Barbara – Naples Venture, LLC, a joint venture sponsored by the Altman Companies that was formed to ~~acquire land, obtain entitlements,~~develop, construct, and ~~fund predevelopment costs for~~manage Altis Santa Barbara, a ~~potential multifamily apartment development in Miami, Florida. In June 2020, the joint venture obtained entitlements, closed on development financing, and commenced development of a 312~~242 unit multifamily apartment community located in Naples, Florida.

As of March 31, 2022, BBRE had invested $8.1 million in a joint venture with ~~7,500 square feet~~CC Homes to develop Marbella, a residential community expected to be comprised of ~~retail space. In connection with the closing, BBXRE received a $0.5 million distribution from~~158 single-family homes in Miramar, Florida. As of March 31, 2022, the joint venture ~~as a reimbursement of predevelopment costs and invested an additional $8.5 million in the joint venture as preferred equity. Pursuant~~had executed contracts to the applicable operating agreement for the Altis Ludlam joint venture, distributions from the joint venture are required to be paid to BBXRE on account of its preferred equity interest until it receives its $8.5 million investment and a preferred return of 11.9% per annum (subject to a minimum payment of $11.9 million). Following such payment,sell all remaining distributions will be paid to the other members, including the managing member in which BBXRE holds an interest. Further, BBXRE’s preferred interest is required to be redeemed by the joint venture for a cash amount equal to its preferred return and initial investment in December 2023, although the joint venture has the option to extend the redemption for three one year periods, subject to certain conditions. As BBXRE’s preferred membership interest in the joint venture is mandatorily redeemable, the Company is accounting for its preferred interest in the joint venture as a loan receivable from the Altis Ludlum joint venture, while the Company’s remaining investment in the managing member of the ~~joint venture is being accounted for under the equity method of accounting.~~

~~In March 2020, the Altis at Wiregrass joint venture sold its 392 unit multifamily apartment community in Tampa, Florida. As a result of~~158 single-family homes comprising Marbella and had closed on the sale of 51 homes. During the three months ended March 31, 2022, BBXRE recognized ~~$0.8~~$1.8 million of equity earnings ~~during the nine months ended September 30, 2020~~ and received ~~approximately $2.3~~$2.0 million of distributions from the ~~venture in April 2020.~~joint venture.

Summarized Financial Information ofCertain Unconsolidated Real Estate Joint Ventures

The ~~unaudited condensed statements of operations for Altis at Bonterra - Hialeah for the three and the nine months ended September 30, 2020 and 2019 were as follows (in thousands):~~

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019
Total revenues

$
—

927

—

4,479
Gain on sale of real estate

—

33,608

—

33,608
Other expenses

—

(813)

—

(4,339)
Net earnings

$
—

33,722

—

33,748
Equity in net earnings of unconsolidated real estate joint venture - Altis at Bonterra - Hialeah, LLC

$
—

29,100

—

29,100

~~The unaudited~~tables below set forth financial information, including condensed statements of financial condition ~~for Altis at Bonterra – Hialeah as of September 30, 2020~~ and ~~December 2019 were as follows (in thousands):~~

September 30,

December 31,

2020

2019
Assets

Cash

$
—

855
Real estate

—

559
Other assets

—

—
Total assets

$
—

1,414

Liabilities and Equity

Notes payable

$
—

—
Other liabilities

—

751
Total liabilities

—

751
Total equity

—

663
Total liabilities and equity

$
—

1,414

~~6. Impairments~~

~~Goodwill~~

~~The activity in the balance of the Company’s goodwill was as follows (in thousands):~~

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019
Balance, beginning of period

$
14,864

37,248

$
37,248

37,248
Deconsolidation of IT'SUGAR

(14,864)

—

(14,864)

—
Impairment losses

—

—

(22,384)

—
Balance, end of period

$
—

37,248

$
—

37,248

The Company tests goodwill associated with its reporting units for potential impairment on an annual basis as of December 31 or during interim periods if impairment indicators exist. The Company concluded that the effects of the COVID-19 pandemic, including the recessionary economic environment and the impact on certain of the Company’s operations, indicated that it was more likely than not that the fair values of certain of its reporting units with goodwill had declined below the respective carrying amounts of such reporting units as of March 31, 2020. As a result, the Company tested the goodwill associated with such reporting units for impairment by estimating the fair values of the respective reporting units as of March 31, 2020 and recognized goodwill impairment losses of $22.4 million associated primarily with IT’SUGAR and, to a lesser extent, certain of its other reporting units. Subsequent to March 31, 2020, the Company’s remaining goodwill balance was comprised of goodwill associated with its IT’SUGAR reporting unit. Although the Company tested goodwill associated with the IT’SUGAR reporting unit as of June 30, 2020 and did not recognize any additional impairment losses as of that date, the Company deconsolidated IT’SUGAR on September 22, 2020 as a result of IT’SUGAR filing petitions for Chapter 11 bankruptcy and derecognized the remaining goodwill balance of approximately $14.9 million as of that date.

The Company generally applies an income approach utilizing a discounted cash flow methodology and a market approach utilizing a guideline public company and transaction methodology to estimate the fair value of its reporting units. The estimated fair values obtained from the income and market approaches are compared and reviewed for reasonableness to determine a best estimate of fair value. The Company’s discounted cash flow methodology establishes an estimate of fair value by estimating the present value of the projected future cash flows to be generated from a reporting unit. The discount rate applied to the projected future cash flows to arrive at the present value is intended to reflect all risks of ownership and the associated risks of realizing the stream of projected future cash flows. The Company generally uses a five to ten-year period in computing discounted cash flow values. The most significant assumptions used in the discounted cash flow methodology are generally the terminal value, the discount rate, and the forecast of future cash flows. The guideline public company methodology establishes an estimate of fair value based upon the trading prices of public traded companies that are similar to the applicable reporting unit, while the guideline transaction methodology establishes an estimate of fair value based on acquisitions of companies that are similar to the applicable reporting unit. Under these methods, the Company develops multiples of revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”) based upon the indicated enterprise value, revenues, and EBITDA of the guideline companies and makes adjustments to such multiples based on various considerations, including the financial condition, operating performance, and relative risk of the guideline companies. The adjusted multiples are then applied to the revenues and EBITDA of the reporting unit to develop an estimated fair value of the reporting unit. Depending on the facts and circumstances applicable to the reporting unit and the guideline companies, the Company may place greater emphasis on the income or market approach to determine its best estimate of fair value.

In connection with its impairment testing as of March 31, 2020, the Company estimated that the fair value of the IT’SUGAR reporting unit had declined to $27.3 million as of March 31, 2020 and recognized a goodwill impairment loss of $20.3 million during the nine months ended September 30, 2020 based on the excess of the carrying amount of the IT’SUGAR reporting unit over its estimated fair value. The Company primarily utilized a discounted cash flow methodology to estimate the fair value of the IT’SUGAR reporting unit and used the relevant market approaches to support the reasonableness of its estimated fair value under the income approach. See Note 1 for additional discussion related to the ~~factors which resulted in the decline in the estimated fair value~~Altman Companies joint venture (in thousands):



	March 31,		December 31,
	2022		2021
Assets
Cash	$	2,346		995
Properties and equipment		386		387
Investment in unconsolidated subsidiaries		7,441		7,153
Goodwill		16,683		16,683
Due from related parties		5,471		4,462
Other assets		9,345		8,662
Total assets	$	41,672		38,342
Liabilities and Equity
Other liabilities	$	12,929		8,463
Total liabilities		12,929		8,463
Total equity		28,743		29,879
Total liabilities and equity	$	41,672		38,342




	For the Three Months Ended March 31,
	2022		2021
Total revenues	$	2,168	$	1,826
Other expenses		(3,032)		(2,525)
Operating loss		(864)		(699)
Equity in (losses) earnings from unconsolidated investment in Altman Glenewinkel Construction, LLC		(459)		367
Net loss		(1,323)		(332)
Equity in net loss of unconsolidated real estate joint venture - The Altman Companies	$	(662)	$	(166)

The tables below set forth financial information, including condensed statements of ~~the IT’SUGAR reporting unit as of March 31, 2020 as compared to December 31, 2019, which included the effects of the COVID-19 pandemic on IT’SUGAR.~~

~~In addition to the IT’SUGAR reporting unit, the Company tested the goodwill of its other reporting units~~financial condition and based on its estimates of their fair values, recognized goodwill impairment losses of $2.1 million during the nine months ended September 30, 2020 related to these reporting units. The decline in the fair value of these reporting units from December 31, 2019 primarily resulted from the effects of the COVID-19 pandemic on these businesses.

~~Long-Lived Assets~~

The Company’s long-lived assets include property and equipment, amortizable intangible assets, and right-of-use assets associated with its lease agreements. The Company tests its long-lived assets, or asset groups which include long-lived assets, for recoverability whenever events or changes in circumstances indicate that the carrying amount of such assets or asset groups may not be recoverable. The carrying amount of an asset or asset group is not considered recoverable when the carrying amount exceeds the sum of the undiscounted cash flows expected to result from the use of the asset or asset group. To the extent that the carrying amount of an asset or asset group exceeds the sum of

~~such undiscounted cash flows, an impairment loss is measured and recorded based on the amount by which the carrying amount of the asset or asset group exceeds its fair value.~~ Impairment losses associated with an asset group are allocated to long-lived assets within the asset group based on their relative carrying amounts; however, the carrying amount of individual long-lived assets within an asset group are not reduced below their individual fair values.

The Company concluded that the effects of the COVID-19 pandemic indicated that the carrying amount of certain of its long-lived assets may not be recoverable, including asset groups associated with certain of its retail locations which were temporarily closed as a result of the pandemic. In such circumstances, the Company compared its estimated undiscounted cash flows expected to result from the use of such assets or asset groups with their respective carrying amounts, and to the extent that such carrying amounts were in excess of the related undiscounted cash flows, the Company estimated the fair values of the applicable assets or asset groups and recognized impairment losses based on the excess of the carrying amounts of such assets or asset groups over their estimated fair values. In certain circumstances, the Company estimated the fair value of individual assets within its asset groups, including right-of-use assets associated with its retail locations, to determine the extent to which an impairment loss should be allocated to such assets.

~~The Company generally estimated the fair value of the relevant assets or asset groups~~ utilizing a discounted cash flow methodology which estimated the present value of the projected future cash flows expected to be generated from such assets or asset groups. When estimating the fair value of asset groups related to a retail location, the Company’s estimated fair value considered the relevant market participants and the highest and best use for the location, including whether the value of the location would be maximized by operating the location in its current use or by permanently closing the location and subleasing it. In addition, to the extent applicable, the Company estimated the fair value of right-of-use assets associated with its retail locations using a discounted cash flow methodology which estimated the present value of market rental rates applicable to such right-of-use assets.

As a result of the Company’s testing of its long-lived assets for impairment, the Company recognized impairment losses of $5.4 million during the nine months ended September 30, 2020 related primarily to leasehold improvements and right-of-use assets associated with certain of IT’SUGAR’s retail locations. The recognition of these impairment losses primarily resulted from the effects of the COVID-19 pandemic on the estimated cash flows expected to be generated by the related~~assets.~~

~~Equity Method Investments~~

The Company evaluates its equity method investments for impairment when events or changes in circumstances indicate that the fair values of the investments may be below the carrying values. When a decline in the fair value of an investment is determined to be other than temporary, an impairment loss is recorded to reduce the carrying amount of the investment to its fair value. The Company’s determination of whether an other-than-temporary impairment has occurred requires significant judgment in which the Company evaluates, among other factors, the fair value of an investment, general market conditions, the duration and extent to which the fair value of an investment is less than cost, and the Company’s intent and ability to hold an investment until it recovers. The Company also considers specific adverse conditionsoperations, related to the financial health and business outlook of the investee, including industry and market performance and expected future operating and financing cash flows. During the three and nine months ended September 30, 2020, the Company recognized impairment losses of $0 and $2.2 million, respectively, associated with certain of its investments in unconsolidated real estateMarabella joint ventures. The Company estimated the fair value of these investments utilizing a discounted cash flow methodology which estimated the present value of the projected future cash flows expected to be generated from such investments. See Note 1 for additional discussion related to the factors which resulted in the decline in the estimated fair values of these investments. The Company did not record any impairment charges related to its equity method investments during the three and nine months ended September 30, 2019.venture (in thousands):



	March 31,		December 31,
	2022		2021
Assets
Cash	$	2,464		4,371
Inventory		49,420		49,967
Other assets		1,742		1,835
Total assets	$	53,626		56,173
Liabilities and Equity
Notes payable	$	30,504		31,256
Other liabilities		21,815		23,885
Total liabilities		52,319		55,141
Total equity		1,307		1,032
Total liabilities and equity	$	53,626		56,173



	For the Three Months Ended March 31,
	2022		2021
Total revenues	$	15,792		—
Cost of goods sold		(11,289)		—
Other expenses		(727)		(341)
Net earnings (loss)		3,776		(341)
Equity in net earnings (loss) of unconsolidated real estate joint venture – Marabella	$	1,849		(239)

~~7. Debt~~

6. Notes Payable and Other Borrowings

The table below sets forth information regarding the Company’s notes payable and other borrowings (dollars in thousands):



	September 30, 2020						December 31, 2019						March 31, 2022						December 31, 2021
					Carrying						Carrying						Carrying						Carrying
					Amount of						Amount of						Amount of						Amount of
	Debt		Interest		Pledged		Debt		Interest		Pledged		Debt		Interest		Pledged		Debt		Interest		Pledged
	Balance		Rate		Assets		Balance		Rate		Assets		Balance		Rate		Assets		Balance		Rate		Assets
Community Development District Obligations	$	30,536		4.25-6.00%	$	44,129	$	29,287		4.25-6.00%	$	49,352	$	5,871		2.40-6.00%	$	7,767	$	7,657		2.40-6.00%	$	9,669
TD Bank Term Loan and Line of Credit		4,929		3.46%		(1)		6,826		5.00%		(1)		48,299		4.65%		(1)		44,363		3.78%		(1)
Banc of America Leasing & Capital Equipment Note		—		—		—		355		4.75%		(2)
Bank of America Revolving Line of Credit		—		—		—		2,000		3.24%		—
Unsecured Note (3)		—		—		—		3,400		6.00%		—
Centennial Bank Note (4)		1,439		5.25%		1,854		1,469		5.25%		1,892
IberiaBank Revolving Line of Credit (2)														1,941		4.00%		(3)		2,041		3.75%		(3)
IberiaBank Note (2)														—		—		—		1,418		3.50%		1,802
Other		47		15.00%		—		223		15.00%		—		22		4.22%		—		26		4.22%		—
Unamortized debt issuance costs		(951)						(824)						(558)						(622)
Total notes payable and other borrowings	$	36,000					$	42,736					$	55,575					$	54,883

~~(1)~~

~~The collateral is a blanket lien on Renin’s assets.~~

~~(2)~~

~~The collateral is a security interest in the equipment financed by the underlying note. Additionally, IT’SUGAR is guarantor of the note.~~

~~(3)~~

~~Parent was the guarantor of the note prior to BBXRE’s repayment of the note in December 2019.~~

~~(4)~~

~~BBX Capital is guarantor of the note.~~

(1)The collateral is a blanket lien on Renin’s assets and the Company’s ownership interest in Renin.

(2)BBX Capital was guarantor of the note.

(3)The collateral is a blanket lien on LOC’s assets.

See Note 1211 to the Company’s ~~combined carve-out~~consolidated financial statements ~~for the years ended December 31, 2019, 2018, and 2017 and footnotes thereto~~ included in the ~~Form 10 Information Statement~~2021 Annual Report for additional information regarding the above listed notes payable and other borrowings.

~~Except as described below, there were no new debt issuances or significant changes related to the above listed notes payable and other borrowings during the nine months ended September 30, 2020.~~

~~Community Development District Obligation.~~ In May 2020, the Meadow View at Twin Creeks Community Development District issued $8.6 million of community development bonds related to the Company’s Beacon Lake Community development. The bonds issued in May 2020 have fixed interest rates ranging from 4.25% to 5.38% and mature at various times during the years 2026 through 2051. The Company at its option has the ability to repay a specified portion of the bonds at the time that it sells developed lots in the Beacon Lakes Community.

Toronto-Dominion ~~Commercial~~ Bank (“TD Bank”) Term Loan and Revolving Line of Credit ~~Facility.~~ ~~At September 30,~~

In connection with the acquisition of Colonial Elegance in 2020, Renin ~~maintained a~~amended and restated its credit facility with TD Bank which provided for a revolving line of credit for up to approximately $16.3 million based on available collateral, as defined in the facility, and subject to Renin’s compliance with the terms and conditions of the credit facility, including certain specific financial covenants. Through February 2020, the credit facility also provided for term loans for up to $1.7 million. However, in February 2020, the credit facility was amended to replace the existing debt service coverage ratio with an interest coverage ratio, and in connection with the amendment to the credit facility, Renin repaid the outstanding balance of the term loans with borrowings from the revolving line of credit. In July 2020, the credit facility was also amended to extend the maturity date of the facility from September 2020 to September 2022. As of September 30, 2020, there was $8.3 million available to Renin under the TD Bank revolving line of credit, subject to available collateral and the terms of the facility, and Renin was in compliance with all financial debt covenants under the credit facility.

~~In October 2020, the credit facility with TD Bank was amended and restated~~ to include a $30.0 million term loan, ~~and an~~increase the availability under its existing revolving operating ~~loan~~line of upcredit with TD Bank to ~~$20~~$20.0 million, and extend the maturity of the facility to October ~~2025,~~2025.

In 2021, Renin’s credit facility with TD Bank was amended to temporarily increase the availability under the revolving line of credit from $20.0 million to $24.0 million through December 31, 2022, at which time the availability under the line of credit was to revert to $20.0 million and any amounts outstanding in excess of $20.0 million was to be repaid by Renin. The amendments to the credit facility also (i) waived the requirement for Renin ~~utilized $30.0~~to comply with certain ratios included in the financial covenants of the facility, (ii) temporarily increased the maximum total leverage ratio included in the financial covenants of the facility through December 31, 2022, (iii) modified the calculation of the maximum total leverage ratio, and (iv) included an additional financial covenant related to Renin meeting certain minimum levels of specified operating results from November 2021 through December 2022. Further, the amendments prohibited Renin from making distributions to BBX Capital through December 31, 2022. On January 1, 2023, the financial covenants under the facility and Renin’s ability to make distributions to the Company were to revert to the requirements under the facility prior to the amendments in 2021.

However, as Renin was not in compliance with certain financial covenants under the facility from January through March 2022, Renin’s credit facility with TD Bank was further amended effective March 31, 2022 to (i) require $13.5 million of ~~proceeds~~funding from BBX Capital to provide Renin funds to prepay $10.0 million of the term loan and to provide additional working capital to Renin of $3.5 million, (ii) waive compliance with the maximum total leverage ratio and fixed charge coverage ratio included in the financial covenants of the facility until December 31, 2022, (iii) waive compliance with the financial covenant requiring Renin to meet certain minimum levels of specified operating results for January through March 2022, (iv) adjust the required minimum levels of specified operating results through December 31, 2022 beginning in April 2022, and (v) amend the modification period to the later of December 31, 2022 or upon Renin’s compliance with specified financial covenant ratios. The amendment also increased the interest rates on amounts outstanding under the term loan and ~~approximately $8.0~~revolving line of credit during the modification period to (i) the Canadian Prime Rate plus a spread of 3.375% per annum, (ii) the United States Base Rate plus a spread of 3.00% per annum, or (iii) Term SOFR or Canadian Bankers’ Acceptance Rate plus a spread of 4.875% per annum. Under the terms of the amendment, the Term SOFR Rate for loans with one to six-months terms are also subject to an additional credit spread adjustment of 10 to 25 basis points per annum. Renin issued a $13.5 million promissory note to BBX Capital upon execution of the amendment on May 9, 2022, and pursuant to the terms of the amendment, BBX Capital funded $8.5 million of ~~proceeds under~~ the ~~operating loan~~note to Renin in ~~connection with~~May 2022 and expects to fund the ~~acquisition of Colonial Elegance. See Note 18 for additional information related to the facility, including BBX Capital’s pledge of its membership interest in Renin.~~

~~The effects~~remaining $5.0 million of the ~~COVID-19 pandemic~~note to Renin prior to May 31, 2022. BBX Capital and Renin entered into a subordination, assignment, and postponement agreement with TD Bank that requires all present and future loans or advances (including the $13.5 million promissory note) from BBX Capital to Renin be subordinated and postponed until the TD Bank credit facility has been paid or satisfied in full.

Adverse events, including inflationary and cost pressures, labor shortages, and supply chain disruptions, continue to have a material negative impact on Renin’s ~~operations could impact its ability~~operating results and financial condition and may cause Renin to ~~remain in~~again fall out of compliance with the ~~financial covenants and the extent~~terms of ~~availability under~~ its outstanding credit facility with TD ~~Bank in future periods. If~~Bank. In such case, if Renin is unable to ~~maintain compliance with~~obtain additional waivers or modifications to the facility, Renin may lose availability under its ~~debt covenants or obtain waivers if it is not in compliance with such covenants, Renin will no longer be able to access its revolving~~ line of credit, ~~may have~~be required to provide additional collateral, or repay all or a portion of its borrowings, ~~prior to the scheduled maturity date, and/or provide additional collateral for such borrowings,~~ any of which ~~would~~could have a material adverse effect on the Company’s liquidity, financial position, and results.

The risks and uncertainties associated with the matters described above, as well as those described in the Company’s 2021 Annual Report, could have a material adverse impact on Renin’s results of ~~operations.~~ operations, cash flows, and financial condition in future periods.

~~Banc~~IberiaBank Note

In August 2021, BBX Sweet Holdings and certain of ~~America Leasing &~~its subsidiaries, including The Hoffman Commercial Group, Inc., borrowed $1.4 million from IberiaBank and issued a note payable to IberiaBank (the “IberiaBank Note”). The IberiaBank Note was secured by land and buildings owned by The Hoffman Commercial Group, Inc. and was guaranteed by BBX Capital. In March 2022, The Hoffman Commercial Group, Inc. closed on the sale of the land and building held as collateral, and the IberiaBank Note was repaid-in-full. Included in other income in the Company’s condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2022 was a $0.9 million net gain from The Hoffman Commercial Group, Inc’s sale of the land and building for net proceeds of $2.7 million.

7. Common Stock

BBX Capital ~~Equipment Note~~has two classes of common stock. Holders of BBX Capital’s Class A Common Stock are entitled to one vote per share, which in the aggregate represents 22% of the combined voting power of BBX Capital’s Class A and ~~Bank~~Class B Common Stock. BBX Capital’s Class B Common Stock represents the remaining 78% of ~~America Revolving Line~~the combined vote. As of ~~Credit~~. March 31, 2022, the percentage of total common equity represented by the Class A and Class B Common Stock was 76% and 24%, respectively. BBX Capital’s Class B Common Stock is convertible into its Class A Common Stock on a share for share basis at any time at the option of the holder.

BBX Capital 2001 Incentive Plan (“2021 Plan”)

On January 18, 2022, BBX Capital’s compensation committee of the board of directors granted awards of 571,523 restricted shares of BBX Capital’s Class A Common Stock to its executive and non-executive officers and 205,029 restricted shares of BBX Class B Common Stock to an executive officer of the Company under the 2021 Plan. The aggregate grant date fair value of the January 2022 awards was $8.0 million, and the shares vest ratably in annual installments of approximately 258,850 shares over three periods beginning on October 1, 2022. The weighted average grant date fair value was $10.34. The unearned compensation expense as of March 31, 2022 was $7.3 million.

Compensation cost for restricted stock awards is based on the fair value of the award on the measurement date, which is generally the grant date. The fair value of restricted stock awards is generally based on the market price of the Company’s common stock on the grant date. For awards that are subject only to service conditions, the Company recognizes compensation costs on a straight-line basis over the requisite service period of the awards, and the impact of forfeitures are recognized when they occur.

Share Repurchase Program

In January 2022, the Board of Directors approved a new share repurchase program which authorizes the repurchase of up to $15.0 million of shares of the Company’s Class A Common Stock and Class B Common Stock. The repurchase program authorizes the Company, in management’s discretion, to repurchase shares from time to time subject to market conditions and other factors.

The timing, price, and number of shares which may be repurchased under the program in the future will be based on market conditions, applicable securities laws, and other factors considered by management. Share repurchases under the program may be made from time to time through solicited or unsolicited transactions in the open market or in privately negotiated transactions. The share repurchase program does not obligate the Company to repurchase any specific amount of shares and may be suspended, modified, or terminated at any time without prior notice. There were no shares repurchased during the three months ended March 31, 2022.

During the three months ended ~~June 30, 2020, a wholly-owned subsidiary of BBXRE purchased IT’SUGAR’s revolving line of credit and equipment note from the respective lenders for the outstanding principal balance~~March 31, 2021, 338,897 shares of the ~~loans plus accrued interest and subsequently advanced an additional $2.0~~Company’s Class A Common Stock were purchased for approximately $2.1 million ~~to IT’SUGAR pursuant to the terms of the loans. As the Company paid the respective third party lenders and was relieved of its obligations to such lenders~~ under the ~~respective debt arrangements, the Company derecognized the liabilities in its consolidated financial statements in connection with the purchase~~Company’s then existing 2020 stock repurchase program, which reflects an average cost of the loans by its wholly-owned subsidiary during the three months ended June 30, 2020. However, as described in Note 17, as a result of IT’SUGAR’s filing petitions for Chapter 11 bankruptcy and the related deconsolidation of IT’SUGAR, the loans held by the subsidiary of BBXRE are no longer eliminated in consolidation and are included in investment in and advances to IT’SUGAR in the Company’s statement of financial condition as of September 30, 2020. $6.30 per share, including fees.

8. Revenue Recognition

The table below sets forth the Company’s revenue disaggregated by category (in thousands):



	For the Three Months Ended
	March 31,
	2022		2021
Trade sales - wholesale	$	37,587		42,468
Trade sales - retail		28,162		3,446
Sales of real estate inventory		6,470		13,535
Revenue from customers		72,219		59,449
Interest income		1,149		1,650
Net gains on sales of real estate assets		1,329		105
Other revenue		779		671
Total revenues	$	75,476		61,875

As of March 31, 2022 and December 31, 2021, the contingent purchase price receivable of $19.3 million and $19.9 million included in the Company’s condensed consolidated statements of financial condition, respectively, represents estimated variable consideration related to the contingent purchase price due from homebuilders in connection with the sale of real estate inventory to the homebuilders. As of March 31, 2022 and December 31, 2021, the Company’s other liabilities in its condensed consolidated statements of financial condition included $0.6 million of variable consideration related to the estimated contingent purchase price due to a homebuilder in connection with the sale of real estate inventory to the homebuilder.

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019
Trade sales - wholesale

$
22,256

18,664

$
61,529

59,024
Trade sales - retail

13,436

26,939

38,099

73,653
Sales of real estate inventory

4,970

370

14,248

5,030
Revenue from customers

40,662

45,973

113,876

137,707
Interest income

387

178

586

674
Net gains on sales of real estate assets

164

399

130

11,395
Other revenue

992

1,142

2,398

3,052
Total revenues

$
42,205

47,692

$
116,990

152,828

9. Income Taxes

BBX Capital and its subsidiaries ~~were included in the~~file a consolidated U.S. federal income tax return and ~~certain state~~ income tax returns of BVH through the date of the spin-off from BVH. The accompanying condensed consolidated financial statements allocates taxable income to the Company as if the Company was a separate taxpayer under the separate return basis. in various state and foreign jurisdictions.

Effective income tax rates for interim periods are based upon the Company’s then current estimated annual rate, which varies based upon the Company’s estimate of taxable ~~earnings~~income or loss and the mix of taxable ~~earnings~~income or loss in the various states in which the Company operates. The Company’s effective tax rate was applied to income or loss before income taxes reduced by net income or losses attributable to noncontrolling interests in ~~joint ventures~~consolidated entities taxed as partnerships. In addition, the Company recognizes taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior period as discrete items in the interim period in which the event occurs.

~~The Company’s effective income tax rate was approximately 17% and 22% during the three and nine months ended September 30, 2020, respectively.~~ The Company’s effective income tax rate for ~~the~~ three months ended ~~September 30, 2020~~March 31, 2022 and 2021 was approximately 32% and 29%, respectively, and was different than the expected federal income tax rate of 21% due to the impact of ~~a change in the Company’s forecasted operating results for the annual period, which resulted in the reversal of the tax benefit recognized during the six months ended June 30, 2020.~~

The Company’s effective income tax rate was approximately 29% during the three and nine months ended September 30, 2019. The Company’s effective income tax rate for the three and nine months ended September 30, 2020 was different than the expected federal income tax rate of 21% due to the impact of the Company’s nondeductible executive compensation and state income taxes.

Certain of Bluegreen Vacations Holding Corporation’s (“Bluegreen Vacations”) state filings covering tax periods prior to the spin-off of the Company are under examination which may result in the audit of the Company’s subsidiaries. While there is no assurance as to the results of these audits, no material adjustments are currently anticipated in connection with these examinations.

10. Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to BBX Capital’s shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed in the same manner as basic earnings per share but also reflects potential dilution that could occur if restricted stock awards issued by BBX Capital were vested. Common restricted stock awards, if dilutive, are considered in the weighted average number of dilutive common shares outstanding based on the treasury stock method.

The table below sets forth the computation of basic and diluted earnings per common share (in thousands, except per share data):



		For the Three Months Ended
		March 31,
		2022	2021
Basic (loss) earnings per common share
Numerator:
Net (loss) income	$	(1,926)	2,455
Noncontrolling interests net loss (income)		110	(110)
Net (loss) income available to common shareholders	$	(1,816)	2,345
Denominator:
Basic weighted average number of common shares outstanding		15,475	19,282
Basic (loss) earnings per common share	$	(0.12)	0.12
Diluted (loss) earnings per common share
Numerator:
Net (loss) income available to common shareholders	$	(1,816)	2,345
Denominator:
Basic weighted average number of common shares outstanding		15,475	19,282
Effect of dilutive stock-based compensation		—	—
Diluted weighted average number of common shares outstanding		15,475	19,282
Diluted (loss) earnings per common share	$	(0.12)	0.12

During the three month ended March 31, 2022, 776,552 of outstanding unvested restricted stock awards were anti-dilutive and not included in the computation of diluted earnings per share. There were 0 restricted stock awards outstanding during the three months ended March 31, 2021.

11. Noncontrolling Interests

The redeemable noncontrolling interest included in the Company’s consolidated statements of financial condition as of March 31, 2022 and December 31, 2021 of $1.1 million relates to a redeemable noncontrolling interest associated with IT’SUGAR. The Company owns over 90% of IT’SUGAR’s Class B Units, while the remaining Class B units are a noncontrolling interest held by an executive officer of IT’SUGAR and may be redeemed for cash at the holder’s option upon a contingent event outside of the Company’s control.

As a result of the filing of the Bankruptcy Cases by IT’SUGAR and its subsidiaries, the Company deconsolidated IT’SUGAR as of September 22, 2020 and derecognized the related redeemable noncontrolling interest in IT’SUGAR. However, as a result of IT’SUGAR emerging from the Bankruptcy Cases in June 2021 and the revesting of BBX Sweet Holdings’ equity interest in IT’SUGAR, the Company consolidated the results of IT’SUGAR into its consolidated financial statements as of June 17, 2021 and is again attributing net income or loss to the redeemable noncontrolling interest in IT’SUGAR as of and subsequent to that date. As a result, during the three months ended March 31, 2022, the Company’s condensed consolidated results of operations and comprehensive loss included the results of operation of IT’SUGAR and the Company’s condensed consolidated results of operations and comprehensive loss excluded the results of operation of IT’SUGAR during the three months ended March 31, 2021.

The net loss attributable to the redeemable noncontrolling interest in IT’SUGAR was $0.1 million for the three months ended March 31, 2022.

The noncontrolling interest included in the Company’s condensed consolidated statements of financial condition as of March 31, 2022 and December 31, 2021 of $0.9 million and $1.1 million, respectively, is comprised i) of a 19% noncontrolling equity interest in a restaurant the Company acquired through foreclosure and ii), an $0.7 million and $0.8 million noncontrolling interest in IT’SUGAR FL II, LLC.

IT’SUGAR FL II, LLC operates IT’SUGAR’s new location in Hawaii and is a consolidated variable interest entity. Included in the Company’s condensed consolidated statement of financial condition as of March 31, 2022 was $9.6 million of total assets and $7.9 million of total liabilities of IT’SUGAR FL II, LLC. Included in the Company’s condensed consolidated statement of financial condition as of December 31, 2021 was $11.2 million of total assets and $9.1 million of total liabilities of IT’SUGAR FL II, LLC. During the three months ended March 31, 2022 and 2021, the Company attributed ($39,000) and $0.1 million, respectively, of net (loss) income to this noncontrolling interest.

12. Commitments and Contingencies

Litigation

In the ordinary course of business, ~~BBX Capital and its subsidiaries are parties~~the Company is party to lawsuits as plaintiff or defendant involving its operations and activities. Additionally, from time to time in the ordinary course of business, the Company is involved in disputes with existing and former employees, vendors, taxing jurisdictions, and various other parties and also ~~receive~~receives individual consumer complaints as well as complaints received through regulatory and consumer agencies. The Company takes these matters seriously and attempts to resolve any such issues as they arise. The Company may also become subject to litigation related to the COVID-19 pandemic, including with respect to any actions we take or may be required to take as a result thereof.

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

Adverse judgments and the costs of defending or resolving legal claims may be substantial and may have a material adverse impact on the Company’s financial statements. Management is not at this time able to estimate a range of reasonably possible losses with respect to matters in which it is reasonably possible that a loss will occur. In certain matters, management is unable to estimate the loss or reasonable range of loss until additional developments provide information sufficient to support an assessment of the loss or reasonable range of loss. Frequently in these matters, the claims are broad, and the plaintiffs have not quantified or factually supported their ~~claim.~~ claims.

~~In October 2020, Renin incurred approximately $6.0 million in costs for the expedited shipment~~There were no material pending legal proceedings against BBX Capital or its subsidiaries as of products to Renin from a foreign supplier and an additional $2.0 million in costs for the expedited shipment of product displays from the same supplier. The supplier had failed to deliver both the products and displays on the contractually agreed upon delivery schedule, and Renin incurred these costs, which were significantly in excess of the shipping costs that would have been incurred had such products been delivered on schedule, based on its belief that the costs were necessary in order for Renin to meet its obligations to one of its customers. The products were committed to be sold by Renin in connection with the customer’s November 2020 holiday sale program, while the displays were required in connection with the rollout of new products with the customer. Renin believes that the supplier is liable for such costs pursuant to the terms of the agreements between Renin and the supplier, and Renin has notified the supplier that it intends to exercise a right of offset of the costs against outstanding amounts due to the supplier of approximately $6.0 million. The costs of the products and related shipping will be recognized in connection with sale to the customer during the fourth quarter of 2020, while the costs of the displays and related shipping will be deferred and amortized over the period in which the Company expects to benefit from their use. Although Renin’s right of offset may reduce a portion of the shipping costs incurred related to the products and displays, the supplier may dispute Renin’s offset and seek collection for amounts otherwise due to it, and there is no assurance regarding the ultimate resolution of the matter. This matter may adversely impact Renin’s compliance with the financial covenants under its outstanding credit facility. If Renin is unable to comply with its covenants, Renin would be required to seek a waiver from the bank, and if unable to obtain a waiver, might lose availability under its line of credit, be required to provide additional collateral, or repay all or a portion of its borrowings, any of which could have a material adverse effect on the Company’s liquidity, financial position, and results.March 31, 2022.

Other Commitments and Guarantees

BBX Capital guarantees certain obligations of its wholly-owned subsidiaries and unconsolidated real estate joint ventures, including the following:

BBX Capital is a guarantor of 50% of the outstanding balance of a third party loan to the Sunrise and Bayview Partners, LLC real estate joint venture, which had an outstanding balance of $5.0 million as of September 30, 2020.

~~BBX Capital is a guarantor on certain notes payable by its wholly-owned subsidiaries. See Note 7 for additional information regarding these obligations.~~

~~11. Rights Agreement and Earnings per Share~~

~~Rights Agreement~~

~~On September 25, 2020,~~BBX Capital is a guarantor of 50% of the outstanding balance of a third-party mortgage loan to the Bayview real estate joint venture, which had an outstanding balance of $5.0 million as of March 31, 2022. In February 2022, the Company ~~adopted a rights agreement (“Rights Agreement”)~~agreed to sell its equity interest in ~~light~~the joint venture to its partner in the joint venture. Under the terms of the ~~significant market volatility and uncertainties associated with~~agreement, the ~~COVID-19 pandemic and~~joint venture partner will fully assume the ~~impact~~liability for the mortgage loan on the ~~Company~~property and BBX Capital’s existing guaranty on 50% of the ~~market price~~outstanding loan balance as well as any liabilities that arise following the closing. However, the consummation of the sale is subject to certain closing conditions, including obtaining a release from the lender of BBX Capital’s ~~Class A Common Stock~~guaranty on the outstanding loan balance and ~~Class B Common Stock. The Rights Agreement provides a deterrent~~for any liabilities that arise following the closing, and there is no assurance that the transaction will be consummated pursuant to ~~shareholders from acquiring a 5% or greater ownership interest in BBX Capital’s Class A Common Stock, Class B Common Stock or total combined common stock without~~ the ~~prior approval~~terms of the ~~board~~agreement, or at all.

BBX Capital is guarantor on a lease agreement executed by IT’SUGAR for base rent of ~~directors.~~$0.7 million and common area costs for a lease which expires in January 2023.

~~Earnings per Share~~

~~The weighted average shares outstanding for basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019 reflect the 19,317,687 shares distributed~~BBX Capital also is a guarantor on ~~September 30, 2020 to the Company’s shareholders.~~

~~12. Noncontrolling Interests~~

The redeemable noncontrolling interest included in the Company’s condensed consolidated statements of financial condition as of December 31, 2019 of $4.0 million is comprised of a redeemable noncontrolling interest associated with IT’SUGAR. The Company owns 90.4% of IT’SUGAR’s Class B Units, while the remaining 9.6% of such units are a noncontrolling interest heldcertain notes payable by an executive officer of IT’SUGAR and may be redeemed for cash at the holder’s option upon a contingent event outside of the Company’s control. As a result of IT’SUGAR filing the Bankruptcy Cases and the related deconsolidation of IT’SUGAR by the Company, the Company derecognized the redeemable noncontrolling interest in IT’SUGAR.its wholly-owned subsidiaries. See Note 176 for additional ~~discussion.~~information regarding these obligations.

The noncontrolling interest as of September 30, 2020 and December 31, 2019 included in the Company’s condensed consolidated statements of financial condition of $0.2 million and $1.0 million is comprised of a 47% noncontrolling equity interest in a restaurant the Company acquired through foreclosure.

13. Fair Value Measurement

Fair value is defined as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

There are three main valuation techniques to measure the fair value of assets and liabilities: the market approach, the income approach, and the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses financial models to convert future amounts to a single present amount and includes present value and option-pricing models. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset and is often referred to as current replacement cost.

Accounting standards define an input fair value hierarchy that has three broad levels and gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The input fair value hierarchy is summarized below:

Level 1:
~~Level 1:~~		Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2:		Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
~~Level 3:~~
Level 3:		Unobservable inputs for the asset and liability

~~Other than the measurement of certain reporting units and long-lived assets as further described in Note 6, there~~There were no material assets or liabilities measured at fair value on a recurring or nonrecurring basis in the Company’s condensed consolidated financial statements as of ~~September 30, 2020~~March 31, 2022 and December 31, ~~2019.~~2021.

Financial Disclosures about Fair Value of Financial Instruments

The tables below set forth information regarding the Company’s consolidated financial instruments (in thousands):



					Fair Value Measurements Using										Fair Value Measurements Using
					Quoted prices										Quoted prices
	Carrying				in Active		Significant				Carrying				in Active		Significant
	Amount		Fair Value		Markets		Other		Significant		Amount		Fair Value		Markets		Other		Significant
	As of		As of		for Identical		Observable		Unobservable		As of		As of		for Identical		Observable		Unobservable
	September 30,		September 30,		Assets		Inputs		Inputs		March 31,		March 31,		Assets		Inputs		Inputs
	2020		2020		(Level 1)		(Level 2)		(Level 3)		2022		2022		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Cash and cash equivalents	$	96,592		96,592		96,592		—		—	$	114,632		114,632		114,632		—		—
Restricted cash		250		250		250		—		—		1,000		1,000		1,000		—		—
Note receivable from Bluegreen Vacations Holding Corporation		75,000		75,000		—		—		75,000
Note receivable from Bluegreen Vacations												50,000		49,230		—		—		49,230
Financial liabilities:
Notes payable and other borrowings		36,000		39,913		—		—		39,913		55,575		56,458		—		—		56,458



					Fair Value Measurements Using											Fair Value Measurements Using
					Quoted prices											Quoted prices
	Carrying				in Active		Significant				Carrying				in Active			Significant
	Amount		Fair Value		Markets		Other		Significant		Amount		Fair Value			Markets		Other		Significant
	As of		As of		for Identical		Observable		Unobservable		As of		As of			for Identical		Observable		Unobservable
	December 31,		December 31,		Assets		Inputs		Inputs		December 31,		December 31,			Assets		Inputs		Inputs
	2019		2019		(Level 1)		(Level 2)		(Level 3)		2021		2021			(Level 1)		(Level 2)		(Level 3)
Financial assets:
Cash and cash equivalents	$	20,723		20,723		20,723		—		—	$	118,045		118,045			118,045		—		—
Restricted cash		529		529		529		—		—		1,000		1,000			1,000		—		—
Note receivable from Bluegreen Vacations												50,000		50,340			—		—		50,340
Financial liabilities:
Notes payable and other borrowings		42,736		45,669		—		—		45,669		54,883		56,360			—		—		56,360

Management has made estimates of fair value that it believes to be reasonable. However, because there is no active market for many of these financial instruments, the fair values of the majority of the Company’s financial instruments have been derived using the income approach technique with Level 3 unobservable inputs. Estimates used in net present value financial models rely on assumptions and judgments regarding issues in which the outcome is unknown, and actual results or values may differ significantly from these estimates. The Company’s fair value estimates do not consider the tax effect that would be associated with the disposition of the assets or liabilities at their fair value estimates. As such, the estimated value upon sale or disposition of the asset may not be received, and the estimated value upon disposition of the liability in advance of its scheduled maturity may not be paid.

The amounts reported in the condensed consolidated statements of financial condition for cash and cash equivalents and restricted cash approximate fair value.

The estimated fair value of the Company’s note receivable from ~~BVH approximates fair value as~~Bluegreen Vacations was measured using the income approach with Level 3 inputs by discounting the forecasted cash inflows associated with the note ~~was issued on September 30, 2020.~~using an estimated market discount rate.

The fair ~~value~~values of the Company’s Community Development Bonds, which are included in notes payable and other borrowings above, iswere measured using the market approach with Level 3 inputs obtained based on estimated market prices of similar financial instruments.

The fair values of the Company’s notes payable and other borrowings (other than the Community Development Bonds above) ~~are~~were measured using the income approach with Level 3 inputs obtained by discounting the forecasted cash flows based on estimated market rates.

The Company’s financial instruments also include trade accounts receivable, accounts payable, and accrued liabilities. The carrying amount of these financial instruments approximate their fair values due to their short-term maturities.

The Company is exposed to credit related losses in the event of non-performance by counterparties to the financial instruments with a maximum exposure equal to the carrying amount of the assets. The Company’s exposure to credit risk consists primarily of accounts receivable balances.

14. Certain Relationships and Related Party Transactions

The Company ~~paid Parent $0.5 million~~may be deemed to be controlled by Alan B. Levan, the Company’s Chairman, John E. Abdo, the Company’s Vice Chairman, Jarett S. Levan, the Company’s Chief Executive Officer and ~~$1.9 million~~President, and Seth M. Wise, the Company’s Executive Vice President. Together, they may be deemed to beneficially own shares of BBX Capital’s Class A Common Stock and Class B Common Stock representing approximately 82% of BBX Capital’s total voting power. Mr. Alan B. Levan also serves as the Chairman, Chief Executive Officer, and President of Bluegreen Vacations, and Mr. Abdo also serves as Vice Chairman of Bluegreen Vacations. Additionally, Mr. Jarett Levan and Mr. Wise serve as directors of Bluegreen Vacations.

Included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income during the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2022 and 2021 was $0 and $0.2 million, ~~and $0.4 million during~~respectively, of rent for office space provided by Bluegreen Vacations to the ~~three and nine months ended September 30, 2019, for management advisory and employer provided medical insurance.~~Company. The Company reimbursed ~~Parent~~Bluegreen Vacations the actual cost of providing the services. The Company accrued $0.1 million of rent income from Bluegreen Vacations at March 31, 2022 as Bluegreen Vacations began renting office space from the Company in November 2021.

During the three months ended March 31, 2022 and 2021, the Company paid Abdo Companies, Inc. approximately $44,000 and $38,000, respectively, for certain management services and rent. John E. Abdo, the Company’s Vice Chairman, is the principal shareholder and Chief Executive Officer of Abdo Companies, Inc.

The Company provides management services to the Altman Companies for which the Company recognized $0.2 million and $60,000, net of services provided to the Company by Altman Companies, during the three months ended March 31, 2022 and 2021 in return for such services.

Included in other revenues in the Company’s condensed consolidated statements of operations and comprehensive loss or income for ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2022 and ~~September 30, 2019~~2021 was $0.2 million and ~~$0.6~~$0.1 million, respectively, ~~received by the Company~~ for providing risk management consulting services ~~provided~~ to ~~Parent and Bluegreen. As of September 30, 2020,~~Bluegreen Vacations. Included in interest income is $40,000 on loans receivable from IT’SUGAR for the three months ended March 31, 2021. The interest income on the IT’SUGAR loan receivable was not eliminated in consolidation during the three months ended March 31, 2021 as the Company ~~had $0.1 million due, and as of December 31, 2019, no amounts due, from Bluegreen~~did not consolidate IT’SUGAR during this period. See Note 16 for ~~these services.~~ further discussion.

Expenses related to certain support functions paid for by Parent, including executive services, treasury, tax, accounting, legal, internal audit, human resources, public and investor relations, general management, shared information technology systems, corporate governance activities, and centralized managed employee benefit arrangements, were allocated to the Company on the basis of direct usage when identifiable, while the remainder of the expenses, including costs related to executive compensation, were allocated primarily on a pro-rata basis of combined revenues and equity in earnings of unconsolidated joint ventures of the Parent and its subsidiaries. The expenses related to these support functions allocated to the Company and included in selling, general and administrative expensesIncluded in the Company’s condensed consolidated statements of operations and comprehensive loss ~~for~~as a reduction to selling, general and administrative expenses during each of the three ~~and nine~~ months ended ~~September 30, 2020 were $4.8 million~~March 31, 2022 and ~~$12.7 million, respectively, and $5.4 million and $16.7~~2021 was $0.2 million for ~~the three and nine months ended September 30, 2019, respectively. The allocated support function costs were recognized as contributed capital in the Company’s~~ ~~condensed consolidated~~ ~~statements of financial condition for the three and nine months ended September 30, 2020 and 2019.~~

The Company was previously a party to an Agreement to Allocate Consolidated Income Tax Liability and Benefits with Parent, Bluegreen, and Woodbridge. Under this tax sharing agreement, the parties calculated their respective income tax liabilities and attributes as if each of them was a separate filer. If any tax attributes were used by another party to the agreement to offset its tax liability, the party providing the benefit would receive an amount for the tax benefits realized. As of September 30, 2020 and December 31, 2019, $0 and $2.8 million, respectively, was due to Parent in accordance with the tax sharing agreement. This tax sharing agreement was terminated with respect to the Company upon the consummation of the spin-off.

~~Upon the consummation of the spin-off, all agreements with Parent were terminated and replaced with a Transition Services Agreement, Tax Matters Agreement, and Employee Matters Agreement.~~

~~The Transition Services Agreement generally sets out the respective rights, responsibilities and obligations of Parent and BBX Capital with respect to the support~~management advisory services ~~to be~~ provided to ~~one another after~~Bluegreen Vacations by the spin-off, as may be necessary to ensure an orderly transition. The Transition Services Agreement establishes a baseline charge for certain categories or components of services to be provided, which will be at cost unless the parties mutually agree to a different charge. The Transition Services Agreement was effective on September 30, 2020 and will continue for a minimum term of one year, provided that after that year, Parent or BBX Capital may terminate the Transition Services Agreement with respect to any or all services provided thereunder at any time upon thirty (30) days prior written notice to the other party. Either party may renew or extend the term of the Transition Services Agreement with respect to the provision of any service which has not been previously terminated.Company.

The Tax Matters Agreement generally sets out the respective rights, responsibilities, and obligations of Parent and BBX Capital with respect to taxes (including taxes arising in the ordinary course of business and taxes incurred as a result of the spin-off), tax attributes, tax returns, tax contests, and certain other related tax matters. The Tax Matters Agreement allocates responsibility for the preparation and filing of certain tax returns (and the payment of taxes reflected thereon). Under the Tax Matters Agreement, Parent will generally be liable for its own taxes and taxes of all of its subsidiaries (other than the taxes of BBX Capital and its subsidiaries, for which BBX Capital shall be liable) for all tax periods (or portion thereof) ending on September 30, 2020, the effective date of the spin-off. BBX Capital will be responsible for its taxes, including for taxes of its subsidiaries, as well as for taxes of Parent arising as a result of the spin-off (including any taxes resulting from an election under Section 336(e) of the Internal Revenue Code of

1986, as amended (the “Code”) in connection with the spin-off). BBX Capital will bear liability for any transfer taxes incurred in the spin-off. Each of Parent and BBX Capital will indemnify each other against any taxes to the extent paid by one party but allocated to the other party under the Tax Matters Agreement, or arising from any breach of its covenants thereunder, and related out-of-pocket costs and expenses.

The Employee Matters Agreement sets out the respective rights, responsibilities, and obligations of Parent and BBX Capital with respect to the transfer of certain employees of the businesses of BBX Capital and related matters, including benefit plans, terms of employment, retirement plans and other employment-related matters. Under the Employee Matters Agreement, BBX Capital or its subsidiaries will generally assume or retain responsibility as employer of employees whose duties primarily relate to their respective businesses as well as all obligations and liabilities with respect thereto.

~~As further described in Note 1, in~~In connection with the spin-off, ~~Parent also~~of the Company from Bluegreen Vacations, Bluegreen Vacations issued a $75.0 million note payable to ~~BBX Capital~~the Company that accrues interest at a rate of 6% per annum and requires payments of interest on a quarterly basis.

~~The components~~ Under the terms of ~~net transfers from/~~the note, Bluegreen Vacations has the option in its discretion to ~~Parent~~defer interest payments under the note, with interest on the entire outstanding balance thereafter to accrue at a cumulative, compounded rate of 8% per annum until such time as Bluegreen Vacations is current on all accrued payments under the note, including deferred interest. All outstanding amounts under the note will become due and payable on September 30, 2025 or earlier upon certain other events. Bluegreen Vacations is permitted to prepay the note in whole or in part at any time, and in December 2021, Bluegreen Vacations prepaid $25.0 million of the principal balance of the note, reducing the outstanding balance to $50.0 million. Included in interest income in the Company’s condensed consolidated ~~statements~~statement of ~~changes in equity consisted~~operations and comprehensive income or loss for the three months ended March 31, 2022 and 2021 was $0.8 million and $1.1 million, respectively, of interest income received on the ~~following (in thousands):~~note.

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019
Cash pooling
$
(5,426)

(34,171)

81,581

(72,714)
Corporate overhead allocations

4,767

5,445

12,694

16,712
Asset transfers

75,175

—

75,320

—
Net transfers from (to) parent
$
74,516

(28,726)

169,595

(56,002)

15. Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker (“CODM”) in assessing performance and deciding how to allocate resources. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, type of customer, distribution system, or regulatory environment.

The information provided for segment reporting is obtained from internal reports utilized by the Company’s CODM, and the presentation and allocation of assets and results of operations may not reflect the actual economic costs of the segments as standalone businesses. If a different basis of allocation were utilized, the relative contributions of the segments might differ, but the relative trends in the segments’ operating results would, in management’s view, likely not be materially impacted.

The Company’s 3 reportable segments are its principal ~~holdings:~~investments: BBX Capital Real Estate, BBX Sweet Holdings, and Renin. See Note 1 for a description of the Company’s ~~reportable segments.~~ principal investments.

In the segment information for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2022 and ~~2019,~~2021, amounts set forth in the column entitled “Other” include the Company’s investments in various operating businesses, including a controlling financial interest in a restaurant acquired in connection with a loan receivable default.

The amounts set forth in the column entitled “Reconciling Items and Eliminations” include unallocated corporate general and administrative ~~expenses.~~expenses and interest income on the $50.0 million note receivable from Bluegreen Vacations.

The Company evaluates segment performance based on segment income or loss before income taxes.

‎

The table below sets forth the Company’s segment information as of and for the three months ended ~~September 30, 2020~~March 31, 2022 (in thousands):



Revenues:		BBX Capital Real Estate	BBX Sweet Holdings		Renin		Other		Reconciling Items and Eliminations		Segment Total			BBX Capital Real Estate	BBX Sweet Holdings		Renin		Other		Reconciling Items and Eliminations		Segment Total
Trade sales	$	—		15,166		19,662		864		—		35,692	$	—		29,357		33,488		2,905		(1)		65,749
Sales of real estate inventory		4,970		—		—		—		—		4,970		6,470		—		—		—		—		6,470
Interest income		419		2		—		—		(34)		387		545		—		—		—		604		1,149
Net gains on sales of real estate assets		164		—		—		—		—		164		1,329		—		—		—		—		1,329
Other revenue		329		77		—		610		(24)		992		516		—		—		445		(182)		779
Total revenues		5,882		15,245		19,662		1,474		(58)		42,205		8,860		29,357		33,488		3,350		421		75,476
Costs and expenses:
Cost of trade sales		—		11,678		15,927		376		—		27,981		—		18,373		31,774		859		—		51,006
Cost of real estate inventory sold		3,367		—		—		—		—		3,367		2,235		—		—		—		—		2,235
Interest expense		—		54		53		4		(111)		-		—		247		566		1		(278)		536
Recoveries from loan losses, net		(807)		—		—		—		—		(807)		(648)		—		—		—		—		(648)
Impairment losses		—		—		—		—		—		—		—		64		—		—		—		64
Selling, general and administrative expenses		1,715		8,483		2,135		280		5,497		18,110		2,398		12,675		4,660		1,999		5,632		27,364
Total costs and expenses		4,275		20,215		18,115		660		5,386		48,651		3,985		31,359		37,000		2,859		5,354		80,557
Equity in net loss of unconsolidated real estate joint ventures		(646)		—		—		—		—		(646)
Loss on the deconsolidation of IT'SUGAR, LLC		—		(3,326)		—		—		—		(3,326)
Operating income (losses)														4,875		(2,002)		(3,512)		491		(4,933)		(5,081)
Equity in net earnings of unconsolidated real estate joint ventures														1,532		—		—		—		—		1,532
Other income		—		81		—		—		—		81		(13)		872		—		2		123		984
Foreign exchange loss		—		—		(58)		—		—		(58)		—		—		(189)		—		—		(189)
Income (loss) before income taxes	$	961		(8,215)		1,489		814		(5,444)		(10,395)	$	6,394		(1,130)		(3,701)		493		(4,810)		(2,754)
Total assets	$	160,442		26,108		36,894		6,707		157,296		387,447	$	186,617		139,991		108,952		6,809		90,003		532,372
Expenditures for property and equipment	$	—		196		247		15		—		458	$	—		1,357		270		26		231		1,884
Depreciation and amortization	$	—		1,323		260		26		—		1,609	$	—		1,493		819		33		57		2,402
Debt accretion and amortization	$	70		5		4		—		—		79	$	9		44		32		—		—		85
Cash and cash equivalents	$	24,066		610		1,168		941		69,807		96,592	$	74,412		7,713		523		2,009		29,975		114,632
Real estate equity method investments	$	60,648		—		—		—		—		60,648	$	53,666		—		—		—		—		53,666
Goodwill	$	—		—		—		—		—		—	$	—		14,274		4,140		—		—		18,414
Notes payable and other borrowings	$	29,597		1,427		4,929		47		—		36,000	$	5,535		15,966		48,077		22		(14,025)		55,575

‎

2820

The table below sets forth the Company’s segment information as of and for the three months ended ~~September 30, 2019~~March 31, 2021 (in thousands):



		BBX Capital Real Estate	BBX Sweet Holdings	Renin	Other	Reconciling Items and Eliminations	Segment Total	BBX Capital Real Estate		BBX Sweet Holdings		Renin		Other		Reconciling Items and Eliminations		Segment Total
Revenues:
Trade sales	$	—	28,051	16,442	1,111	(1)	45,603	$	—		4,982		38,691		2,241		—	45,914
Sales of real estate inventory		370	—	—	—	—	370		13,535		—		—		—		—	13,535
Interest income		166	12	—	—	—	178		475		—		—		—		1,175	1,650
Net gains on sales of real estate assets		399	—	—	—	—	399		105		—		—		—		—	105
Other revenue		197	115	—	888	(58)	1,142		398		—		—		430		(157)	671
Total revenues		1,132	28,178	16,442	1,999	(59)	47,692		14,513		4,982		38,691		2,671		1,018	61,875
Costs and expenses:
Cost of trade sales		—	17,229	12,983	493	(1)	30,704		—		3,828		32,656		409		—	36,893
Cost of real estate inventory sold		—	—	—	—	—	—		7,858		—		—		—		—	7,858
Interest expense		—	45	131	8	(66)	118		—		26		410		1		(147)	290
Recoveries from loan losses, net		(1,821)	—	—	—	—	(1,821)		(508)		—		—		—		—	(508)
Impairment losses		37	—	—	—	—	37
Selling, general and administrative expenses		2,336	11,086	2,849	1,612	5,311	23,194		1,974		1,571		4,304		1,506		3,843	13,198
Total costs and expenses		552	28,360	15,963	2,113	5,244	52,232		9,324		5,425		37,370		1,916		3,696	57,731
Equity in net earnings of unconsolidated real estate joint ventures		28,534	—	—	—	—	28,534
Operating income (losses)									5,189		(443)		1,321		755		(2,678)	4,144
Equity in net loss of unconsolidated real estate joint ventures									(271)		—		—		—		—	(271)
Other income		—	67	—	—	—	67		—		26		—		(1)		38	63
Foreign exchange gain		—	—	1	—	—	1
Foreign exchange loss									—		—		(480)		—		—	(480)
Income (loss) before income taxes	$	29,114	(115)	480	(114)	(5,303)	24,062	$	4,918		(417)		841		754		(2,640)	3,456
Total assets	$	147,712	166,311	32,103	8,491	1,864	356,481	$	163,449		27,007		105,216		7,141		139,138	441,951
Expenditures for property and equipment	$	1	3,801	79	174	—	4,055	$	—		3		237		12		14	266
Depreciation and amortization	$	—	1,519	303	193	—	2,015	$	—		81		631		30		49	791
Debt accretion and amortization	$	22	55	6	2	—	85	$	219		19		12		—		—	250
Cash and cash equivalents	$	21,781	3,629	—	525	—	25,935	$	31,924		1,001		1,939		1,985		50,958	87,807
Real estate equity method investments	$	53,739	—	—	—	—	53,739	$	60,402		—		—		—		—	60,402
Goodwill	$	—	35,521	—	1,727	—	37,248	$	—		—		6,936		—		—	6,936
Notes payable and other borrowings	$	32,009	1,867	8,394	400	—	42,670	$	21,028		1,407		46,473		39		—	68,947

~~The table below sets forth~~16. IT’SUGAR Bankruptcy

Bankruptcy and Deconsolidation of IT’SUGAR

In March 2020, as a result of various factors, including government-mandated closures and Center for Disease Control and World Health Organization advisories in connection with the ~~Company’s segment information as~~COVID-19 pandemic, IT’SUGAR closed all of its retail locations and ~~for~~furloughed all store employees and the ~~nine months ended September 30, 2020 (in thousands):~~majority of its corporate employees.

BBX Capital Real Estate

BBX Sweet Holdings

Renin

Other

Reconciling Items and Eliminations

Segment Total
Revenues:

Trade sales

$
—

41,743

54,283

3,602

—

99,628
Sales of real estate inventory

14,248

—

—

—

—

14,248
Interest income

604

29

—

—

(47)

586
Net gains on sales of real estate assets

130

—

—

—

—

130
Other revenue

1,116

281

—

1,083

(82)

2,398
Total revenues

16,098

42,053

54,283

4,685

(129)

116,990
Costs and expenses:

Cost of trade sales

—

35,493

44,054

607

—

80,154
Cost of real estate inventory sold

9,473

—

—

—

—

9,473
Interest expense

—

170

238

9

(417)

—
Recoveries from loan losses, net

(5,844)

—

—

—

—

(5,844)
Impairment losses

2,710

25,303

—

2,727

—

30,740
Selling, general and administrative expenses

5,176

25,123

6,788

3,572

13,365

54,024
Total costs and expenses

11,515

86,089

51,080

6,915

12,948

168,547
Equity in net earnings of unconsolidated real estate joint ventures

50

—

—

—

—

50
Loss on the deconsolidation of IT'SUGAR, LLC

—

(3,326)

—

—

—

(3,326)
Other income (expense)

—

195

(3)

—

—

192
Foreign exchange gain

—

—

214

—

—

214
Income (loss) before income taxes

$
4,633

(47,167)

3,414

(2,230)

(13,077)

(54,427)
Expenditures for property and equipment

$
—

3,120

852

60

—

4,032
Depreciation and amortization

$
—

4,108

880

77

—

5,065
Debt accretion and amortization

$
223

167

13

—

—

403

~~The table below sets forth the Company’s segment information as of and for the nine months ended September 30, 2019 (in thousands):~~

BBX Capital Real Estate

BBX Sweet Holdings

Renin

Other

Reconciling Items and Eliminations

Segment Total
Revenues:

Trade sales

$
—

76,039

51,124

5,514

—

132,677
Sales of real estate inventory

5,030

—

—

—

—

5,030
Interest income

631

43

—

—

—

674
Net gains on sales of real estate assets

11,395

—

—

—

—

11,395
Other revenue

1,321

210

—

1,751

(230)

3,052
Total revenues

18,377

76,292

51,124

7,265

(230)

152,828
Costs and expenses:

Cost of trade sales

—

48,862

40,989

1,994

—

91,845
Cost of real estate inventory sold

2,643

—

—

—

—

2,643
Interest expense

—

143

387

11

(132)

409
Recoveries from loan losses, net

(4,206)

—

—

—

—

(4,206)
Impairment losses

37

—

—

—

—

37
Selling, general and administrative expenses

6,709

31,860

8,326

5,136

16,473

68,504
Total costs and expenses

5,183

80,865

49,702

7,141

16,341

159,232
Equity in net earnings of unconsolidated real estate joint ventures

37,276

—

—

—

—

37,276
Other income

171

292

152

6

—

621
Foreign exchange loss

—

—

(23)

—

—

(23)
Income (loss) before income taxes

$
50,641

(4,281)

1,551

130

(16,571)

31,470
Expenditures for property and equipment

$
4

6,387

284

548

—

7,223
Depreciation and amortization

$
93

4,252

897

260

—

5,502
Debt accretion and amortization

$
133

167

23

3

—

326

~~16. Discontinued Operations~~

~~As described in Note 1, FFTRG previously entered into area development and franchise agreements with MOD Pizza related~~IT’SUGAR ceased paying rent to the development of MOD Pizza franchised restaurant locations throughout Florida and, through 2019, had opened nine restaurant locations. In September 2019, the Company entered into an agreement with MOD Pizza to terminate the area development and franchise agreements and transferred sevenlandlords of its ~~restaurant~~closed locations ~~including~~in April 2020 and engaged in negotiations with its landlords for rent abatements, deferrals, and other modifications for both the ~~related assets, operations,~~period of time that the locations were closed and ~~lease~~the subsequent period during which the locations were open and operating under conditions affected by the pandemic. During that period, in addition to its unpaid rental obligations, IT’SUGAR ceased paying various outstanding obligations to ~~MOD Pizza. In addition,~~its vendors.

Between May 2020 and September 2020, IT’SUGAR reopened nearly all of its approximately 100 locations that were open prior to the ~~Company closed the remaining two~~pandemic. Although IT’SUGAR reopened its retail locations and ~~terminated the related lease agreements.~~

~~FFTRG’s operations as~~received an advance of $2.0 million from a ~~franchisee~~subsidiary of ~~MOD Pizza are presented as discontinued operations in the Company’s condensed consolidated financial statements.~~

~~The carrying amount of major classes of assets and liabilities included as part of discontinued operations is as follows (in thousands):~~

September 30,

December 31,

2020

2019
ASSETS

Cash and cash equivalents

$
—

35
Operating lease assets

—

772
Other assets

—

185
Discontinued operations total assets

$
—

992
LIABILITIES AND EQUITY

Liabilities:

Accounts payable

$
—

2
Accrued expenses

—

134
Operating lease liability

—

905
Discontinued operations total liabilities

$
—

1,041

~~The major components of loss from discontinued operations are as follows (in thousands):~~

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019
Revenues:

Trade sales

$
—

2,057

—

6,044
Other revenue

—

31

—

89
Total revenues

—

2,088

—

6,133
Costs and Expenses:

Cost of trade sales

—

1,156

—

2,452
Depreciation, amortization and accretion, net

—

183

—

690
Impairment losses

—

3,993

71

6,749
Selling, general and administrative expenses

—

1,585

20

5,715
Total costs and expenses

—

6,917

91

15,606
Pre-tax loss from discontinued operations

$
—

(4,829)

(91)

(9,473)

~~The following are the major components of the statement of cash flows from discontinued operations (in thousands):~~

For the Nine Months Ended

September 30,

2020

2019
Operating activities:

Pre-tax loss from discontinued operations

$
(91)

(9,473)
Adjustment to reconcile pre-tax loss to net cash

used in operating activities:

Depreciation, amortization and accretion, net

—

690
Impairment losses

71

6,749
Decrease in trade inventory

—

64
Decrease in other assets

94

470
Change in operating lease assets and liabilities

(113)

(269)
Decrease in accounts payable

(2)

(57)
Decrease in accrued expenses

(134)

(540)
Net cash used in operating activities

$
(175)

(2,366)
Investing activities:

Cash paid for intangible assets

$
—

(40)
Purchases of property and equipment

—

(542)
Net cash used in investing activities

$
—

(582)

~~��~~

~~17.~~BBX Capital under an existing credit facility, IT’SUGAR ~~Bankruptcy~~

Onwas unable to maintain sufficient liquidity to sustain its operations. As a result, on September 22, 2020, IT’SUGAR and its subsidiaries filed voluntary petitions to reorganize under Chapter 11 of the Bankruptcy ~~Code.~~ Code in the Bankruptcy Court.

As a result of the filings, the uncertainties surrounding the nature, timing, and specifics of the ~~bankruptcy proceedings,~~Bankruptcy Cases, and the Company’s resulting loss of control and significant influence over IT’SUGAR,, the Company determined that IT’SUGAR iswas a VIE in which the Company iswas not the primary beneficiary and deconsolidated IT’SUGAR in connection with the filings. ~~In connection with~~Following the deconsolidation of IT’SUGAR, the Company ~~recognized a noncontrolling equity~~accounted for its investment in IT’SUGAR at its estimated fair value of $12.7 million and a $3.3 million loss based upon the difference between the carrying amount of IT’SUGAR (including its asset and liabilities and the redeemable noncontrolling interest in it) and the Company’s estimated fair value of its noncontrolling equity investment.

~~The noncontrolling equity investment in IT’SUGAR will subsequently be accounted for at cost less impairment. Equity investments are accounted for at~~ cost less impairment, ~~when~~if any.

Emergence from Bankruptcy and Reconsolidation of IT’SUGAR

Emergence from Bankruptcy

In April 2021, IT’SUGAR filed its proposed plan of reorganization with the ~~investor does not have significant influence over~~Bankruptcy Court. Following approval of the ~~investee~~proposed plan by IT’SUGAR’s unsecured creditors, the Bankruptcy Court entered an order (the “Confirmation Order”) on June 16, 2021 confirming the plan of reorganization filed by IT’SUGAR, as modified by the Confirmation Order (the “Plan”), and the ~~equity investment has no readily determinable fair value. Under this method, equity investments are accounted for at historical cost and adjusted if there is evidence that~~Plan became effective on June 17, 2021 (the “Effective Date”). Pursuant to the ~~fair market value~~terms of the ~~equity investment has declined below the historical cost.~~

~~IT’SUGAR’s assets, liabilities, results of operations and cash flows through September 22, 2020 continue to be included as continuing operations in~~Plan, the Company’s ~~financial statements, as~~equity interests in IT’SUGAR were revested on the ~~Company continues to hold a substantive equity investment in IT’SUGAR. Additionally, as~~Effective Date, and all organizational documents of IT’SUGAR were assumed, ratified, and reinstated. As a result of the ~~Company deconsolidating~~confirmation and effectiveness of the Plan and the revesting of its equity interests in IT’SUGAR, ~~IT’SUGAR’s $6.2 million notes payable to~~ the Company ~~are no longer eliminated~~was deemed to have reacquired a controlling financial interest in IT’SUGAR and consolidated the results of IT’SUGAR into its consolidated financial statements as of the Effective Date, the date that the Company reacquired control of IT’SUGAR.

Allocation of IT’SUGAR’s Fair Value upon Consolidation

The Company accounted for the consolidation of IT’SUGAR upon the revesting of its equity interests under the acquisition method of accounting, which requires that the assets acquired and ~~are included~~liabilities assumed associated with an acquiree be recognized at their fair values at the consolidation date. As a result, the Company remeasured the carrying value of its equity interests in ~~investments in and advances to~~ IT’SUGAR at fair value as of the Effective Date, with the remeasurement adjustment recognized in the Company’s statement of ~~financial condition as~~operations, and recognized goodwill based on the difference between (i) the fair values of ~~September 30, 2020.~~IT’SUGAR’s identifiable assets and liabilities at the consolidation date and (ii) the fair values of the Company’s interests in IT’SUGAR and the noncontrolling interests in IT’SUGAR.

The following table summarizes the fair values of the assets acquired and liabilities ~~and net equity~~assumed of IT’SUGAR ~~as of September 22, 2020,~~at the consolidation date ~~it was deconsolidated from the Company’s financial statements:~~(in thousands):



~~IT'SUGAR~~Cash	$	6,909
~~Balance Sheet~~Trade accounts receivable		584
Trade inventory		5,337
Property and equipment	~~September 22,~~	19,291
~~(in thousands)~~Identifiable intangible assets⁽¹⁾	~~2020~~	9,670
~~ASSETS~~Operating lease assets ⁽²⁾		54,421
~~Cash and cash equivalents~~Other assets	$	~~1,045~~
~~Restricted cash~~		20
~~Trade accounts receivable, net~~		~~103~~
~~Trade inventory~~		~~6,213~~
~~Property and equipment, net~~		~~22,162~~
~~Goodwill~~		~~14,864~~
~~Intangible assets, net~~		~~3,222~~
~~Operating lease assets~~		~~64,889~~
~~Other assets~~		~~1,707~~
~~Total assets~~	$	~~114,225~~
~~LIABILITIES AND EQUITY~~		3,323
~~Liabilities:~~Total assets acquired		99,535
~~Accrued expenses~~Accounts payable		~~13,441~~ (2,517)
Accrued expenses		(8,445)
Other liabilities		(124)
Operating lease liabilities		~~80,388~~ (63,143)
Notes payable and other borrowings⁽⁴⁾		~~6,199~~
~~Total liabilities~~		~~100,028~~
~~Equity:~~		(10,054)
~~Additional paid-in capital~~Total liabilities assumed		~~59,809~~ (84,283)
~~Accumulated earnings~~Fair value of identifiable net assets		~~(50,102)~~ 15,252
~~Noncontrolling interests~~Fair value of net assets acquired		~~4,490~~ 28,590
~~Total equity~~Fair value of redeemable noncontrolling interest		~~14,197~~ 936
~~Total liabilities and equity~~Fair value of IT'SUGAR	$	~~114,225~~ 29,526
Goodwill	$	14,274

Gain on the consolidation of IT'SUGAR ⁽³⁾	$	15,890

~~Included~~(1)Identifiable intangible assets primarily include the estimated fair value of IT’SUGAR’s trademark, which is being amortized over an estimated expected useful life of 15 years.

(2)Includes a net intangible liability of $8.7 million related to off market rents associated with certain of IT’SUGAR’s retail locations that is expected to be recognized over a weighted average lease term of approximately 8 years.

(3)The gain is comprised of the remeasurement of the Company’s equity interest in ~~total liabilities~~IT’SUGAR at fair value.

(4)Notes payable and other borrowings reflects amounts due to the Company’s wholly-owned subsidiary that have been eliminated in consolidation as of and subsequent to the consolidation date.

The fair values reported in the above table were estimated by the Company using available market information and applicable valuation methods. As considerable judgment is involved in estimates of fair value, the fair values presented above are ~~approximately $11.7 million~~not necessarily indicative of ~~pre-petition~~the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methods could have a material effect on the estimated fair value amounts.

The following summarizes the Company’s methodologies for estimating the fair values of certain assets and liabilities associated with the consolidation of ~~which $7.7 million are pre-petition~~IT’SUGAR and the fair value of BBX Capital’s existing investment in IT’SUGAR:

Property and Equipment – Property and equipment acquired consists primarily of leasehold improvements at IT’SUGAR’s retail locations. The fair value of IT’SUGAR’s property and equipment was estimated based on the replacement cost approach.

Identifiable Intangible Assets – The primary identifiable intangible asset acquired consists of IT’SUGAR’s trademark. The fair value of the acquired trademark was estimated using the relief-from-royalty method, a form of the income approach. Under this approach, the fair value was estimated by calculating the present value using a risk-adjusted discount rate of the expected future royalty payments that would have to be paid if the IT’SUGAR trademark was not owned.

Operating Lease Assets and Lease Liabilities – Operating lease assets and lease liabilities were measured based on the present value of the fixed lease payments ~~and $4.0 million are pre-petition obligations to other creditors, including supplies and vendors.~~

~~Under the Bankruptcy Code, debtors may assume, assign or reject executory contracts and unexpired leases subject~~included in IT’SUGAR’s lease agreements pursuant to the ~~approval~~provisions of Accounting Standards Codification 842, Leases. In addition, IT’SUGAR’s operating lease assets have been adjusted to reflect an estimate of favorable or unfavorable terms of IT’SUGAR’s lease agreements when compared with market terms. These adjustments were estimated by calculating the present value using a risk-adjusted discount rate of the ~~Bankruptcy Court~~difference between the contractual amounts to be paid pursuant to the lease agreements and ~~certain other conditions. Generally,~~ the ~~rejection~~estimate of ~~an executory contract or unexpired~~market lease rates at the consolidation date.

Goodwill – Goodwill recognized in connection with the consolidation of IT’SUGAR reflects the difference between the (i) the fair values of IT’SUGAR’s identifiable assets and liabilities at the consolidation date and (ii) the fair values of the Company’s existing interests and any noncontrolling interests in IT’SUGAR at the consolidation date.

Remeasurement of Existing Investment in IT’SUGAR – As part of the acquisition method of accounting, the Company is ~~treated~~required to remeasure the carrying value of its existing interests in IT’SUGAR at fair value as ~~a prepetition breach~~ of ~~such executory contract or unexpired lease and, subject to certain exceptions, relieves~~ the ~~debtors of performing their future obligations under such executory contract or unexpired lease but entitles~~consolidation date, with the ~~contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach subject,~~remeasurement adjustment recognized in the ~~case~~Company’s condensed consolidated statement of operations and comprehensive income. The Company applied an income approach utilizing a discounted cash flow methodology to estimate the fair value of its investment in IT’SUGAR as of the ~~rejection~~consolidation date. The Company’s discounted cash flow methodology established an estimate of ~~unexpired leases~~the fair value of ~~real property,~~IT’SUGAR by estimating the present value of the projected future cash flows to ~~certain caps on damages. Counterparties~~be generated from IT’SUGAR. The discount rate applied to ~~such rejected contracts or leases may assert unsecured claims~~the projected future cash flows to arrive at the present value is intended to reflect all risks of ownership and the associated risks of realizing the stream of projected future cash flows associated with IT’SUGAR. The most significant assumptions used in the ~~Bankruptcy Court against~~discounted cash flow methodology to estimate the ~~applicable debtor’s estate for such damages. Generally,~~preliminary fair value of IT’SUGAR were the ~~assumption or assumption~~terminal value, the discount rate, and ~~assignment of an executory contract or unexpired lease requires~~ the ~~debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance~~forecast of future ~~performance.~~cash flows.

~~In connection with~~Redeemable Noncontrolling Interest – Represents a 9.65% redeemable noncontrolling interest in IT'SUGAR’s Class B Units.

The results of operations of IT’SUGAR are included in the Company’s condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2022 but are not included in the Company’s condensed consolidated statement of operations and comprehensive income for the three months ended March 31, 2021. The following table shows IT’SUGAR’s ~~Bankruptcy Cases,~~trade sales and income before income taxes included in the Company’s condensed consolidated statements of operations and comprehensive income for the dates indicated (in thousands):


	For the Three Months Ended March 31,
	2022		2021
Trade sales	$	24,255		—
Loss before income taxes	$	(1,021)		—

The following unaudited financial data presents the Company’s actual revenues and earnings or loss for the three months ended March 31 2022 and the Company’s pro forma earnings for the three months ended March 31, 2021 as if the Company consolidated IT’SUGAR had emerged from bankruptcy on ~~October 7,~~January 1, 2020 ~~IT’SUGAR obtained a $4.0 million DIP credit facility from a subsidiary~~(in thousands):


	Actual		Pro Forma
	March 31,		March 31,
	2022		2021
Trade sales	$	65,749		64,979
(Loss) income before income taxes	$	(2,754)		2,181
Net (loss) income	$	(1,926)		1,459
Net (loss) income attributable to shareholders	$	(1,816)		1,507

The unaudited pro forma financial data reported in the above table does not purport to represent what the actual results of the ~~Company~~Company’s operations would have been assuming that the consolidation date was ~~approved by~~January 1, 2020, nor does it purport to predict the ~~Bankruptcy Court on an interim basis pending a final hearing. As~~Company’s results of November 9, 2020, $2.0 million had been funded to IT’SUGAR. The principal amount outstanding under the DIP facility bears interest at the LIBOR daily floating rate plus 1.50% with monthly interest only payments until the full payment of all principal outstanding. The maturity date is the earliest of (a) 365 days from the petition date; (b) the effective date of a plan of reorganization or liquidation; (c) the consummation of a sale(s) of all or substantially all of the assets of IT’SUGAR; (d) the occurrence of an Event of Default (as defined in the loan agreement); and (e) the entry of an order by the Bankruptcy Court approving or authorizing any alternative or additional debtor-in-possession financing. Notwithstanding the foregoing, the Company may, in its sole discretion, agree in writing with IT’SUGAR, to a later maturity date. operations for future periods.

~~18.~~17. Subsequent Events

Subsequent events have been evaluated through the date the financial statements were available to be issued. As of such date, there were no material subsequent events identified that required recognition or disclosure other than as disclosed ~~below or~~ in the footnotes herein.

~~Stock Repurchase Program~~

On October 20, 2020, BBX Capital’s Board of Directors authorized the repurchase of up to $10 million of shares of BBX Capital’s Class A Common Stock and Class B Common Stock. The timing, price, and number of shares repurchased will be based on market conditions, applicable securities laws, and other factors. The stock repurchases may be made from time to time through solicited or unsolicited transactions in the open market or in privately negotiated transactions. The stock repurchase authorization does not obligate the Company to repurchase any specific number of shares and may be suspended, modified, or terminated at any time without prior notice.

~~Acquisition of Colonial Elegance~~

On October 22, 2020, Renin acquired substantially all of the assets and assumed certain of the liabilities (the “Acquisition”) of Colonial Elegance. Colonial Elegance, which is headquartered in Montreal, Canada, is a supplier and distributor of building products, including barn doors, closet doors, and stair parts, and its customers include various big box retailers in the United States and Canada.

The base purchase price for the Acquisition was CAD $51.0 million (approximately USD $39.0 million), substantially all of which was paid in cash by Renin at closing. In addition to the base purchase price, Renin acquired estimated excess working capital held by Colonial Elegance above an agreed upon target working capital amount of CAD $13.0 million (approximately USD $9.9 million) for CAD $6.7 million (approximately USD $5.1 million), of which CAD $1.3 million (approximately USD $1.0 million) was held back by Renin at closing. The final working capital adjustment amount will be determined by Renin and Colonial Elegance during the 90 day period following closing and may result in the payment of additional amounts to Colonial Elegance, including the release of all or a portion of the working capital adjustment holdback, or a refund to Renin (if the estimated working capital adjustment at closing exceeds the actual working capital adjustment by an amount in excess of the working capital adjustment holdback).

The Company made a $5.0 million capital contribution to Renin to partially fund the Acquisition, while the remainder of the Acquisition was funded by Renin using borrowings under the 2020 TD Bank Credit Facility (as defined and described below).

The Acquisition was consummated pursuant to an Asset Purchase Agreement, dated October 22, 2020, between Renin Canada Corp., a wholly-owned subsidiary of Renin, and Colonial Elegance (the “Asset Purchase Agreement”). The Asset Purchase Agreement contains representations, warranties, and covenants believed to be customary for a transaction of this nature, including covenants as to indemnification for breaches of certain representations, warranties and covenants, subject to certain exclusions and caps. Renin has obtained a representations and warranties insurance policy under which Renin may seek coverage for breaches of certain of Colonial Elegance’s representations, warranties, and covenants in the Asset Purchase Agreement, subject to certain exclusions, retention amounts, policy limits, and other terms and conditions.

~~Amended and Restated TD Bank Credit Facility~~

In connection with the Acquisition, on October 22, 2020, Renin Canada Corp. and Renin US LLC, each of which is a wholly-owned subsidiary of Renin, entered into a credit agreement (the “2020 TD Bank Credit Facility”) with TD Bank, which amended and restated their existing facility with TD Bank initially entered into in May 2017. The 2020 TD Bank Credit Facility includes a $30.0 million term loan (the “Term Loan”) and an operating loan of up to $20.0 million (the “Operating Loan”) and matures in October 2025. $30.0 million of proceeds from the Term Loan and approximately $8.0 million of borrowings under the Operating Loan were used to fund most of the purchase price and excess working capital payment related to the Acquisition, as described above. Amounts outstanding under the Term Loan and Operating Loan bear interest at (i) the Canadian Prime Rate plus a spread between 1.375% to 1.875% per annum, (ii) the United States Base Rate plus a spread between 1.00% to 1.50% per annum, or (iii) LIBOR or Canadian Bankers Acceptance Rate, in each case plus a spread between 2.875% to 3.375% per annum, with the spreads applicable to each rate depending on Renin’s total leverage. In addition to ongoing payments of interest under the Term Loan and Operating Loan, the Term Loan requires quarterly payments of principal based on a stated percentage of the original principal amount of $30.0 million, with approximately 37.5% of the original principal amount due at maturity in October 2025.

Pursuant to the terms and conditions of the 2020 TD Bank Credit Facility, Renin is required to comply with certain financial covenants, including a maximum total leverage ratio and a minimum total fixed charge coverage ratio determined quarterly. The 2020 TD Bank Credit Facility also contains other affirmative and negative covenants believed to be customary, including those that may, among other things, limit Renin’s ability to make distributions to the Company and engage in certain transactions, including asset acquisitions or dispositions, mergers, consolidations, and similar transactions.

Renin has guaranteed the obligations of the borrowers under the 2020 TD Bank Credit Facility, and the 2020 TD Bank Credit Facility is collateralized by all of Renin’s assets. In addition, the Company entered into a Pledge Agreement pursuant to which it pledged all of its membership interests in Renin as security for the borrower’s obligations under the 2020 TD Bank Credit Facility.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Except as otherwise noted or where the context otherwise requires, the terms “the Company,” “we,” “us,” or “our” refers to BBX Capital, Inc. and its consolidated subsidiaries, and the term “BBX Capital” refers to BBX Capital, Inc. as a standalone entity. BBX Capital’s principal holdings are BBX Capital Real Estate, LLC (“BBX Capital Real Estate” or “BBXRE”), BBX Sweet Holdings, LLC (“BBX Sweet Holdings”) and Renin Holdings, LLC (“Renin”).

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements based largely on current expectations of the Company that involve a number of risks and uncertainties. All opinions, forecasts, projections, future plans, or other statements, other than statements of historical fact, are forward-looking statements and can be identified by the use of words or phrases such as “plans,” “believes,” “will,” “expects,” “anticipates,” “intends,” “estimates,” “our view,” “we see,” “would,” and words and phrases of similar import. The forward-looking statements in this document are also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve substantial risks and uncertainties. We can give no assurance that such expectations will prove to be correct. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. Forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. When considering forward-looking statements, the reader should keep in mind the risks, uncertainties, and other cautionary statements made in this report and in the Company’s other reports filed with the Securities and Exchange Commission (“SEC”). The reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made. This document also contains information regarding the past performance of the Company and its respective investments and operations. The reader should note that prior or current performance and pro forma financial information is not a guarantee or indication of future performance. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, and all such information should only be viewed as historical data.

Future results and the accuracy of forward-looking statements may be affected by various risks and uncertainties, including the risk factors applicable to the Company which are described herein and in ~~the sections entitled “Cautionary Statement~~“Item 1. Business – Cautionary Note Regarding Forward-Looking Statements” and ~~“Risk~~“Item 1A. Risk Factors” inof the Company’s ~~Information Statement, dated August 27, 2020, included as Exhibit 99.1 to~~Annual Report on Form 10-K for the ~~Company’s Form 10 filed with the SEC on August 27, 2020~~year ended December 31, 2021 (the ~~Form 10 Information Statement”~~“2021 Annual Report”). These risks and uncertainties also include risks relating to public health issues and general economic uncertainties, including, in particular, the COVID-19 pandemic, ~~as it~~labor shortages, increases in interest rates, and current inflationary trends. It is not currently possible to accurately assess the expected duration and effects of the COVID-19 pandemic onor the uncertain economic environment which create a number of risks that could adversely impact our business. These include ~~required closures of retail locations, travel~~impacts on (i) consumer demand, (ii) disruptions in global supply chains, (iii) employee absenteeism and ~~business restrictions, “shelter~~a general labor shortage, (iv) disruptions in ~~place” and “stay at home” orders and advisories, volatility in the global and national economies and equity,~~ credit and ~~commodities~~capital markets, ~~worker absenteeism, quarantines,~~(v) customer retention and ~~other health-related restrictions; the~~(vi) heightened cybersecurity risks. The duration and severity of these factors as well as the resulting adverse impact on economic and market conditions, are uncertain, and the Company may continue to be adversely impacted by these conditions in future periods. The overall situation is extremely fluid, and it is impossible to predict the timing of future changes in these factors and what their impact may be on our business. At this time we are also not able to predict whether the COVID-19 pandemic or the current economic conditions will result in prolonged changes in our customers’ behavior, which may include continued or permanent decreases in discretionary spending and ~~the~~reductions in demand for retail store and confectionery products, home improvement products or real estate, each of which would have a material adverse impact on ~~demand for~~our business, operating results and financial condition.

In addition, current inflationary trends may adversely impact our results of operations. BBXRE has experienced a significant increase in commodity and labor prices, which has resulted in higher development and construction costs. IT’SUGAR has experienced an increase in the cost of inventory and freight, and Renin has experienced significant supply chain challenges and increases in costs related to shipping and raw materials. The significant increase in Renin’s costs could impact Renin’s ability to comply with the terms of its debt covenants requiring additional loan paydowns. These inflationary trends could have a material effect on the Company’s ~~products~~results of operations and ~~services, levels~~financial condition if the Company is unable to increase prices to its customers to offset the increase in its costs.

The continuing effect of ~~consumer confidence,~~the COVID-19 pandemic, increasing interest rates and ~~supply chains;~~other actions ~~governments, businesses, and individuals~~the Federal Reserve may take in response to inflationary pressure as well as other factors, may cause a downturn in the ~~pandemic and their~~economic environment, which could also have a significant adverse impact on ~~economic activity and consumer spending, which will impact~~the gross margins of the Company’s ~~ability to successfully resume full business operations;~~operating businesses, particularly if an economic downturn is prolonged in nature and impacts consumer demand, materially disrupts the ~~pace of recovery when the COVID-19 pandemic subsides and the possibility of a resurgence; competitive conditions;~~supply chain for the Company’s ~~liquidity~~operating businesses’ products and raw materials, delays the production and shipment of products and raw materials from foreign suppliers or increases shipping costs.

Labor is one of the primary components of our expenses. A number of factors may adversely affect the labor force available to us or increase our labor costs, including labor shortages, increased competition for qualified employees, federal unemployment subsidies, and other government regulations. A sustained labor shortage or increased turnover rates, whether caused by COVID-19 or as a result of general economic conditions or other factors, could lead to increased costs, increased overtime pay to meet demand and increased costs to attract and retain employees, which could in turn negatively affect our operations or adversely impact our business and results. Further, any mitigation measures we take in response to a decrease in labor availability or an increase in labor costs may be unsuccessful and could have negative effects.

Rising interest rates could also have an adverse impact on home sales, the availability of ~~capital;~~financing, and the ~~effects and duration~~profitability of ~~steps~~development projects, as a majority of development costs are financed with third party debt.

While the Company ~~takes in response to the COVID-19 pandemic, including the inability to rehire or replace furloughed employees; risks~~believes that the bankruptcy process has improved IT’SUGAR’s financial condition as a result of the relief it obtained in relation to its pre-petition liabilities and amendments to its lease agreements, the Company ~~may recognize further impairment losses; the~~continues to be subject to risks and uncertainties ~~inherent in the bankruptcy proceedings of~~related to IT’SUGAR ~~LLC~~that have had and ~~its subsidiaries (“IT’SUGAR”) and the inability~~could continue to ~~predict the~~have a material adverse effect ~~of IT’SUGAR’s reorganization and/or liquidation process~~ on the Company and ~~its~~IT’SUGAR’s business, results of ~~operation~~operations, and financial ~~condition, including~~condition. These risks and uncertainties include, without limitation, the potential for additional disruptions to its operations if there is another outbreak of COVID-19 or a similar pandemic; risks associated with the current economic environment with respect to demand, sales levels, and consumer behavior, as well as increased inventory, freight, and labor costs and general supply chain disruptions which have had and may continue to have a material adverse effect in future periods; the risk that ~~additional impairment charges~~IT’SUGAR may not be ~~required~~able to continue to increase prices without significantly impacting consumer demand; risks relating to IT’SUGAR’s business plans, including that IT’SUGAR may not be able to fund or otherwise open new retail locations as or when expected, or at all; the risk that IT’SUGAR may not be able to extend or enter into new lease agreements for any existing “temporary” locations which it desires to extend, whether on favorable terms or at all; risks related to the lease amendments entered into by IT’SUGAR, including that, while many of the lease amendments provided for the payment of rent based on a percentage of sales volumes for a specified period of time as opposed to fixed rental payments, IT’SUGAR continues to bear the costs of staffing and procuring inventory and the terms of many of such amendments require IT’SUGAR to resume the payment of previously scheduled fixed lease payments going forward and, as a result, IT’SUGAR’s ongoing occupancy costs have increased as fixed rental payments under these leases have resumed and IT’SUGAR’s overall exposure to risks related to fixed rental obligations have begun to increase and revert to pre-bankruptcy levels in ~~the future, IT’SUGAR’s ability~~relation to develop, prosecute, confirm and consummate a plan of reorganization or liquidation, IT’SUGAR’s ability, through the Chapter 11 bankruptcy process, to reach agreement with its landlords or other third parties,such locations; and the risk that ~~creditors of IT’SUGAR~~landlords may ~~assert claims against the Company~~exercise their right to terminate certain leases where rent was reduced or ~~any of their respective subsidiaries (other than IT’SUGAR) and that the Company or any such subsidiary’s assets may become subject~~in relation to ~~or included in~~ IT’SUGAR’s bankruptcy case; risks related to the Company’s indebtedness, including the potential for accelerated maturities and debt covenant violations; the risk of heightened litigation as a result of actions taken in response to the COVID-19 pandemic; the impact of the COVID-19 pandemic on consumers, including, but not limited to, their income, their level of discretionary spending both during and after the pandemic, and their views towards thetemporary retail industry; and the risk that certain of the Company’s operations, including retail locations, may not continue to generate recurring sources of cash during or following the pandemic to the extent anticipated or at all. This Quarterly Report on Form 10-Q also contains a discussion of the recent acquisition by Renin Holding, LLC (“Renin”) of Colonial Elegance (“Colonial Elegance”), which is subject to the impact of economic, competitive and other factors affecting Renin and Colonial Elegance, including their operations,locations.

markets, marketing strategies, products and services; the risk that the integration of Colonial Elegance may not be completed on a timely basis, or as anticipated; that the anticipated expansion or growth opportunities will not be achieved or if achieved will not be advantageous; that the acquisition will not be cash accretive immediately or at all; that net income may not be generated when anticipated or at all or the acquisition may result in net losses; that BBX Capital and/or Renin may not realize the anticipated benefits of the acquisition when or to the extent anticipated or at all; the risks associated with the increased indebtedness incurred by Renin to finance the acquisition including, compliance with financial covenants and restrictions on Renin’s activities.

The risk factors described in ~~Form 10 Information Statement,~~the 2021 Annual Report, as well as the other risks and factors detailed in this report and the other reports filed by the Company with the SEC, are not necessarily all of the important factors that could cause the Company’s actual results to differ materially from those expressed in any of the forward-looking statements. Other unknown or unpredictable factors could cause the Company’s actual results to differ materially from those expressed in any of the forward-looking statements. As a result, the Company cautions that the foregoing factors are not exclusive.

Given these uncertainties, you are cautioned not to place undue reliance on forward-looking statements, and you should read this Quarterly Report on Form 10-Q with the understanding that actual future results, levels of activity, performance, and events and circumstances may be materially different from prior results or what the Company expects. The Company qualifies all forward-looking statements by these cautionary statements.

Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q, and the Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report.

Critical Accounting Policies

See Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the section “Critical Accounting Policies” in ~~Form 10 Information Statement~~the Company’s 2021 Annual Report for a discussion of the Company’s critical accounting policies.

New Accounting Pronouncements

See Note 1 to the Company’s condensed consolidated financial statements included in Item 1 of this report for a discussion of new accounting pronouncements applicable to the Company.

Overview

BBX Capital is a Florida-based diversified holding company whose principal holdings are BBX Capital Real Estate, ~~LLC (“BBX Capital Real Estate” or “BBXRE”),~~ BBX Sweet Holdings, ~~LLC (“BBX Sweet Holdings”),~~ and ~~Renin Holdings, LLC (“Renin”).~~Renin. As of March 31, 2022, the Company had total consolidated assets of $532.4 million and shareholders’ equity of $320.8 million.

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

~~As of September 30, 2020,~~ Further, subject to market conditions and other factors, the Company ~~had total consolidated assets~~has and may from time to time in the future repurchase its outstanding common stock.

Impact of ~~$387.4 million~~Current Economic Conditions

Headline inflation accelerated to 8.5%, its highest level since 1982, and ~~shareholders’ equity~~the Federal Reserve has signaled that it plans to address inflation through monetary policy, including the wind-down of ~~$313.9 million.~~

~~Spin-Off from Bluegreen Vacations Holding Corporation~~

Prior to September 30, 2020, Bluegreen Vacations Holding Corporation (“BVH”), formerly BBX Capital Corporation, was a Florida-based diversified holding company whose principal holdings were Bluegreen Vacations Corporation (“Bluegreen”), BBX Capital Real Estate, BBX Sweet Holdings,quantitative easing and ~~Renin”. On September 30, 2020, BVH completed~~by raising the ~~spin-off~~Federal Funds rate. The Russian invasion of Ukraine and the ~~Company, which separated BVH’s business, activities, and investments into two separate, publicly-traded companies: (i) BVH, which continues to hold its investment~~embargoes against Russia as well as China’s actions in Bluegreen, and (ii) BBX Capital, which continues to hold all of BVH’s other businesses and investments, including BBX Capital Real Estate, BBX Sweet Holdings, and Renin. The spin-off was consummated on September 30, 2020addressing COVID-19 cases in that country have worsened supply chain issues with the ~~distribution~~potential of further exacerbating inflationary trends. These conditions can negatively affect our operating results by ~~BVH~~resulting in: (i) higher interest expense on variable rate debt, (ii) increased risk of impairment associated with higher discount rates, (iii) lower gross margins due to ~~its shareholders all~~increased costs of the outstanding shares of BBX Capital’s Common Stock through the distribution of one share of BBX Capital’s Class A Common Stock for each share of its Class A Common Stock held on September 22, 2020, the

~~record date for the distribution,~~manufactured or purchased inventory and ~~one share of BBX Capital’s Class B Common Stock for each share of its Class B Common Stock held on the record date. Accordingly, as of the close of business on September 30, 2020, BVH ceased~~shipping, (iv) higher overall operating expenses due to ~~have an ownership interest~~increases in ~~the Company,~~labor and ~~BVH’s shareholders who received shares of BBX Capital’s Common Stock~~service costs, and (v) a shift in ~~the distribution became shareholders of the Company following the spin-off.~~

These conditions have resulted in efforts by us to increase prices; however, such increases may not be accepted by our customers or may not adequately offset the increases in our costs, and could negatively impact customer retention.

BBXRE has experienced a ~~rate of 6% per annum~~significant increase in commodity and requires payments of interest on a quarterly basis. Under the terms of the note, BVH will have the option in its discretion to defer interest payments under the note, with interest on the entire outstanding balance thereafter to accrue at a cumulative, compounded rate of 8% per annum until such time as BVH is current on all accrued payments under the note, including deferred interest. All outstanding amounts under the note will become due and payable in five years or earlier upon certain other events.

~~Rights Agreement~~

On September 25, 2020, the Company adopted a rights agreement (“Rights Agreement”) in light of the significant market volatility and uncertainties associated with the COVID-19 pandemic and the impact on the Company and the market price of BBX Capital’s Class A Common Stock and Class B Common Stock. The Rights Agreement provides a deterrent to shareholders from acquiring a 5% or greater ownership interest in BBX Capital’s Class A Common Stock, Class B Common Stock or total combined common stock without the prior approval of the board of directors.

~~Impact of the COVID-19 Pandemic~~

~~The COVID-19 pandemic~~labor prices, which has resulted in ~~an unprecedented disruption~~higher development and construction costs, and disruptions in the ~~U.S.~~supply chain for certain commodities and ~~global economies~~equipment have resulted in ongoing supply shortages of building materials, equipment, and appliances. These factors have impacted the timing of certain projects currently under construction and the ~~industries~~commencement of construction of new projects. Although such factors have not yet materially impacted BBXRE’s results of operations, these increases and increases in ~~which~~interest rates may have a material impact on BBXRE’s operating results in future periods and may also impact consumer and customer behavior.

Similarly, as a result of ongoing disruptions in global supply chains, IT’SUGAR has experienced an increase in the ~~Company operates due to, among other things, government ordered “shelter in place”~~cost of inventory and “stay at home” orders and advisories, travel restrictions, and restrictions on business operations, including government guidance and restrictions with respect to travel, public accommodations, social gatherings, and related matters,freight, as well as delays in its supply chain. While IT’SUGAR has generally been able to mitigate the ~~general public’s reaction~~impact of increased costs through increases in the prices of its products, supply chain disruptions have impacted its ability to maintain historical inventory levels at its retail locations which IT’SUGAR believes has negatively impacted its sales volumes. To the ~~pandemic. The~~extent that costs continue to increase, there is no assurance that IT’SUGAR will be able to continue to increase the prices of its products without significantly impacting consumer demand and its sales volume. IT’SUGAR has also experienced an increase in payroll costs as a result of shortages in available labor at its retail locations.

Global supply chain disruptions ~~arising from~~has also contributed to a significant increase in Renin’s costs related to shipping and raw materials, as well as delays in its supply chains, which have: (i) negatively impacted Renin’s product costs and gross margin, (ii) increased the ~~pandemic~~risk that Renin will be unable to fulfill customer orders, and (iii) negatively impacted Renin’s working capital and cash flows due to increased inventory in transit, a prolonged period between when it is required to pay its suppliers and it is paid by its customers, and an overall decline in its gross margin. While Renin has obtained price increases for many of its products, Renin’s gross margin, have nonetheless been negatively impacted by these cost pressures, and the ~~reaction~~negotiation of increased prices with customers increases the risk that customers will pursue alternative sources for Renin’s products, which may result in Renin losing customers or require it to lower prices in an effort to retain customers. Increases in interest rates will also adversely impact Renin’s results and additionally, Renin has recently observed a decline in consumer demand, which Renin believes may be attributable to (i) the impact of price increases and overall inflationary pressures on consumer behavior and (ii) a shift in consumer spending away from home improvements as many portions of the ~~general public had~~economy reopen, particularly in the United States.

There is no assurance that the Company’s operating subsidiaries will be able to continue increasing prices in response to increasing costs, which could have a material adverse effect on the Company’s results of operations and financial condition.

Any downturn in the economic environment may also have a significant adverse impact on the Company's financial condition and operations during the three and nine months ended September 30, 2020. The duration and severity of the pandemic and related disruptions, as well as the adverse impact on economic and market conditions, are uncertain; however, given the nature of these circumstances, the adverse impact of the pandemic on the Company’s ~~condensed consolidated~~ results of operations, cash flows, and financial condition in 2020 has been, and is expected to continue to be, material. Furthermore, although the duration and severity of the effects of the pandemic are uncertain, demand for manygross margins of the Company’s operating businesses, particularly if an economic downturn is prolonged in nature and impacts consumer demand, materially disrupts the supply chain for the Company’s operating businesses’ products and ~~services may remain weak for a significant length~~raw materials, delays the production and shipment of ~~time,~~products and ~~the Company cannot predict if~~raw materials from foreign suppliers or ~~when the industries in which the Company operates will return to pre-pandemic levels.~~increases shipping costs.

~~See below for additional discussion related to the current and estimated impacts of the COVID-19 pandemic on the Company’s principal holdings.~~

Summary of Consolidated Results of Operations

Consolidated Results

The following summarizes key financial highlights for the three months ended ~~September 30, 2020~~March 31, 2022 compared to the same ~~2019~~2021 period:

~~Total consolidated revenues of $42.2 million, a 11.5% decrease compared to the same 2019 period.~~

~~Loss from continuing operations before income taxes of $10.4 million compared to income from continuing operations before income taxes of $24.1 million during the same 2019 period.~~

~~Net loss attributable to common shareholders of $8.3 million compared to net income attributable to shareholder of $13.6 million during the same 2019 period.~~

~~Diluted loss per share of $0.43 compared to a diluted earnings per share of $0.70 for the same 2019 period.~~

~~The following summarizes key financial highlights for the nine months ended September 30, 2020~~Total consolidated revenues of $75.5 million, a 22.0% increase compared to the same ~~2019 period:~~2021 period.

~~Total consolidated revenues of $117.0 million, a 23.5% decrease compared to the same 2019 period.~~

~~Loss from continuing operations before income taxes of $54.4 million compared to income from continuing operations before income taxes of $31.5 million during the same 2019 period.~~

~~Net loss attributable to common shareholders of $38.8 million compared to net income attributable to shareholder of $15.4 million during the same 2019 period.~~

~~Diluted loss per share of $2.01 compared to a diluted income per share of $0.80 for the same 2019 period.~~

Loss before income taxes of $2.8 million compared to income before income taxes of $3.5 million during the same 2021 period.

Net loss attributable to shareholders of $1.8 million compared to a net income attributable to shareholders of $2.3 million during the same 2021 period.

Diluted loss per share of ($0.12) compared to a diluted earnings per share of $0.12 for the same 2021 period.

The Company’s consolidated results of operations for the three months ended ~~September 30, 2020~~March 31, 2022 compared to the same ~~2019~~2021 period were significantly impacted by the following:

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

~~A decrease in BBX Sweet Holdings’ revenues primarily attributable to the impact of the COVID-19 pandemic on its operations.~~

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

~~The recognition of a loss of $3.3 million upon the Company’s deconsolidation of IT’SUGAR in connection with its filing of voluntary petitions to reorganize under Chapter 11 of the Bankruptcy Code.~~

~~In addition~~The recognition by Renin of a loss before income taxes of $3.7 million during the 2022 period due to (i) a decline in its gross margin percentage due to a significant increase in costs related to freight and raw materials incurred in 2022 compared to 2021 and (i) a decline in sales primarily attributable to backordered inventory resulting from supply chain disruptions, delays in shipments to customers due to ongoing price negotiations, and disruptions in shipping and facilities associated with inclement weather and restrictions related to COVID-19 in January 2022;

The recognition by BBX Sweet Holdings of a loss before income taxes of $1.1 million during the 2022 period primarily due to the ~~items discussed above~~inclusion of IT’SUGAR in the Company’s results of operations for the three months ended ~~September 30, 2020,~~March 31, 2022, as the ~~Company’s consolidated results for~~Company reconsolidated IT’SUGAR in June 2021 upon IT’SUGAR’s emergence from bankruptcy; and

An increase in corporate general and administrative expenses primarily related to higher compensation expense during the ~~nine months ended September 30, 2020 compared~~2022 period, including the impact of restricted stock awards granted in January 2022; partially offset by

An increase in income before income taxes recognized by BBXRE primarily attributable to ~~the same 2019 period were also significantly impacted by~~equity earnings from its Marbella joint venture and the recognition of ~~impairment losses~~a gain upon the sale of ~~$30.7 million~~a legacy asset during the 2022 period, partially offset by a net decrease in sales activity at BBXRE’s Beacon Lake Community development, as BBXRE sold 44 developed lots to homebuilders during the ~~2020~~2022 period ~~primarily related~~compared to ~~goodwill and long-lived assets associated with IT’SUGAR as a result of~~128 lots during the ~~impact of the COVID-19 pandemic.~~2021 period.

Segment Results

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

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

1

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,						For the Three Months Ended March 31,
	2020		2019		Change		2020		2019		Change		2022		2021		Change
BBX Capital Real Estate	$	961		29,114		(28,153)		4,633		50,641		(46,008)	$	6,394		4,918		1,476
BBX Sweet Holdings		(8,215)		(115)		(8,100)		(47,167)		(4,281)		(42,886)		(1,130)		(417)		(713)
Renin		1,489		480		1,009		3,414		1,551		1,863		(3,701)		841		(4,542)
Other		814		(114)		928		(2,230)		130		(2,360)		493		754		(261)
Reconciling items and eliminations		(5,444)		(5,303)		(141)		(13,077)		(16,571)		3,494		(4,810)		(2,640)		(2,170)
(Loss) income before income taxes from continuing operations		(10,395)		24,062		(34,457)		(54,427)		31,470		(85,897)
(Loss) income before income taxes														(2,754)		3,456		(6,210)
Benefit (provision) for income taxes		1,633		(6,893)		8,526		10,847		(9,041)		19,888		828		(1,001)		1,829
Net (loss) income from continuing operations		(8,762)		17,169		(25,931)		(43,580)		22,429		(66,009)
Discontinued operations		—		(3,654)		3,654		(74)		(7,177)		7,103
Net (loss) income		(8,762)		13,515		(22,277)		(43,654)		15,252		(58,906)		(1,926)		2,455		(4,381)
Less: Net loss attributable to noncontrolling interests		510		97		413		4,822		165		4,657
Net loss (income) attributable to noncontrolling interests														110		(110)		220
Net (loss) income attributable to shareholders	$	(8,252)		13,612		(21,864)		(38,832)		15,417		(54,249)	$	(1,816)		2,345		(4,161)

BBX Capital Real Estate Reportable Segment

Segment Description

BBX Capital Real Estate (or BBXRE) is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures, including investments in multifamily rental apartment communities, single-family master-planned for sale housing communities, and commercial properties located primarily in Florida. In addition, BBXRE currently owns a 50% equity interest in the Altman Companies, a developer and manager of multifamily apartment communities, and anticipates acquiring an additional 40% of the Altman Companies in 2023. BBXRE also manages the legacy assets acquired in connection with the Company’s sale of BankAtlantic in 2012, including portfolios of loans receivable, real estate properties, and judgments against past borrowers.

~~Overview~~In an effort to diversify its portfolio of real estate developments, BBXRE is also currently evaluating potential investment opportunities in the development of warehouse and logistics facilities and has expanded its operating platform to include a logistics real estate division. Further, the Altman Companies is currently evaluating potential opportunities to develop multifamily apartment communities in new geographical areas, including the greater Atlanta, Georgia area.

~~Although BBXRE has not to date been as significantly impacted by~~Business Update

As further described in the ~~COVID-19 pandemic as BBX Sweet Holdings,~~Company’s 2021 Annual Report, BBXRE’s operations have ~~been impacted by~~recently benefited from an increase in demand for single-family and multifamily apartment housing in many of the ~~pandemic, and it is expected that its operations will continue to be impacted by the pandemic~~markets in ~~future periods. While recent construction activities have continued at BBXRE’s existing projects and~~Florida in which BBXRE operates, as sales at ~~its~~BBXRE’s single-family home developments ~~have generally returned to pre-pandemic levels following some disruptions in March~~ and April 2020, the effects of the pandemic, including increased unemployment and economic uncertainty generally and in the real estate and credit markets in particular, as well as recent increases in the number of COVID-19 cases in Florida and throughout the United States, have impacted rental activities at BBXRE’s multifamily apartment developments and increased uncertainty relating to the expected timing and pricing of future sales of multifamily apartment developments, single-family homes, and developed lots at BBXRE’s Beacon Lake Community, as well as the timing and financing of new multifamily apartment developments.

While the Company expects that the impact of the COVID-19 pandemic will adversely affect BBXRE’s operating results and financial condition for the year ended December 31, 2020, primarily with respect to the expected timing of sales, the Company evaluated various factors, including asset-specific factors, overall economic and market conditions, and the excess of the expected profits associated with real estate assets in relation to their carrying amounts, and concluded that, except as discussed below, there had not been a significant decline in the fair value of most of BBXRE’s real estate assets as of September 30, 2020 that should be recognized as an impairment loss. As part of this evaluation, the Company considered the sales at its single-family home developments (which have returned to pre-pandemic levels), continued collection of rentleasing at its multifamily apartment developments sponsored by the Altman Companies are generally exceeding pre-pandemic levels. Further, BBXRE has recently observed (i) significant investor demand for the acquisition of stabilized multifamily apartment communities, as evidenced by the sale of communities sponsored by the Altman Companies in 2021 and ~~indications that~~recent interest in communities for which development is expected to be completed in 2022, and (ii) available debt and equity capital for financing new multifamily apartment developments, as evidenced by the Altman Companies commencing the development of three multifamily apartment communities in 2021 and another multifamily community in the first quarter of 2022.

However, there has ~~not to date~~also been a significant increase in land, commodity, and labor prices, which has resulted in higher development and construction costs, and disruptions in supply chains for certain commodities and equipment, which has resulted in ongoing supply shortages of building materials, equipment, and appliances. In addition to these factors impacting the timing of certain projects currently under construction, the factors are also impacting the commencement of new development opportunities. Further, in addition to increasing the cost of the Company’s outstanding indebtedness, rising interest rates will at some point likely have an adverse impact on home sales, the availability of financing, and the profitability of development projects, as a majority of development costs are financed with third party debt. Although such factors have not yet materially impacted BBXRE’s results of operations, these factors may have a material impact on BBXRE’s operating results in future periods, as described in further detail below. In addition, as further described in the Company’s 2021 Annual Report, the COVID-19 pandemic resulted in significant uncertainty and volatility in the overall economy, which could have a material adverse impact on BBXRE’s results of operations, cash flows, and financial condition in future periods.

As previously discussed in the Company’s 2021 Annual Report, BBXRE’s operating results in 2021 significantly benefited from the impact of demand for single-family and multifamily housing on certain of its existing investments, and BBXRE currently expects certain of its existing investments to benefit from these factors in 2022. However, BBXRE currently expects a relative decline in ~~sales prices~~revenues and net income over the next several years as compared to 2021 and 2022 based on its current pipeline of investments, which reflects a combination of (i) the accelerated monetization of certain investments from future years into 2021 and 2022 and (ii) the temporary delay of the commencement of new projects in 2020 due to the COVID-19 pandemic. Accordingly, BBXRE is focused on the sourcing and deployment of capital in investments in new development opportunities, including (i) the expansion of its investments in multifamily rental apartment communities through the Altman Companies and (ii) investing in the development of warehouse and logistics facilities through its recently formed logistics real estate division. Due to the currently expected life cycle of these developments, in which the monetization of an investment generally occurs approximately three years following the commencement of the development, BBXRE does not expect its operating results to significantly benefit from these efforts in the near term but believes that these investments are ultimately consistent with BBX Capital’s goal to build long-term shareholder value and BBXRE’s goal of building a diversified portfolio of profitable real estate investments that generate recurring earnings and cash flows in future periods. However, there is no assurance that these investments in new development opportunities will be successful.

The Altman Companies and Related Investments

In 2018, BBXRE acquired a 50% membership interest in the Altman Companies, a joint venture between the Company and Joel Altman engaged in the development, construction, and management of multifamily apartment communities. Pursuant to the operating agreement of the Altman Companies, BBXRE will acquire an additional 40% equity interest in the Altman Companies from Joel Altman for ~~single family homes~~a purchase price, subject to certain adjustments (including reimbursements for predevelopment expenditures incurred at the time of purchase), of $9.4 million in January 2023. Joel Altman can also, at his option or anin other predefined circumstances, require BBX Capital to purchase his remaining 10% equity interest in the Altman Companies for $2.4 million; however, Joel Altman will retain his membership interests, including his decision making rights, in the managing member of any development joint ventures that are originated prior to BBXRE’s acquisition of additional equity interests in the Altman Companies.

‎

As of March 31, 2022, BBXRE had investments in nine active developments sponsored by the Altman Companies, which are summarized as follows (dollars in thousands):



Project	Location	Apartment Units	Project Status at March 31, 2022	Expected Exit/Sales Date		Carrying Value of BBXRE Investment at March 31, 2022
Altis Grand Central	Tampa, Florida	314	Stabilized - 97% Occupied	2031	$	731
Altis Little Havana	Miami, Florida	224	Under Construction - Expected Completion in 2022	2022		1,078
Altis Miramar East/West	Miramar, Florida	650	Construction Complete. In Lease-Up	2022		2,904
Altis Ludlam Trail (1)	Miami, Florida	312	Under Construction - Expected Completion in 2022	2023		11,144
Altis Grand at Lake Willis Phase 1	Orlando, Florida	329	Under Construction - Expected Completion in 2023	2025		442
Altis Lake Willis Phase 2	Orlando, Florida	230	Predevelopment	TBD		2,715
Altis Grand at Suncoast	Lutz, Florida	449	Under Construction - Expected Completion in 2024	2025		3,641
Altis Blue Lake	West Palm Beach, Florida	318	Under Construction - Expected Completion in 2023	2025		351
Altis Santa Barbara	Naples, Florida	242	Under Construction - Expected Completion in 2023	2025		409

(1)The carrying value of BBXRE’s investment at March 31, 2022 includes $10.6 million related to BBXRE’s investment in the preferred equity associated with the Altis Ludlam Trail project, including the investment balance and accrued preferred return.

Existing Developments

During the three months ended March 31, 2022, the Altman Companies commenced the delivery of completed units at Altis Miramar East/West and expects the construction at Altis Little Havana community to be substantially completed during the second quarter of 2022.

While the Altman Companies previously anticipated that the Altis Little Havana joint venture would continue to hold the Altis Little Havana community as a longer term investment, the joint venture is currently pursuing a possible sale of Altis Little Havana based on current investor interest in the acquisition of stabilized multifamily communities of this type. However, there is no assurance that there will be continued investor interest or that the property will be sold in the short term on advantageous terms, or at all.

New Developments

In February 2022, a joint venture sponsored by the Altman Companies closed on development financing and commenced the development of Altis Santa Barbara, a planned 242-unit multifamily apartment community in Naples, Florida, and BBXRE invested $0.4 million in the managing member of the joint venture.

Other

As previously described in the Company’s 2021 Annual Report, developments sponsored by the Altman Companies benefited from the increase in ~~capitalization~~demand for multifamily apartment housing in many of the markets in Florida in which the Altman Companies operates, as the volume of new leases and rental rates at its completed developments generally exceeded pre-pandemic levels and expectations and have continued to increase. The Altman Companies has also observed increased investor demand for the acquisition of stabilized multifamily apartment communities. However, the Company recognized $2.7 million of impairment losses during the nine months ended September 30, 2020 primarily related to a decline in the estimated fair values of certain of BBXRE’s investments in joint ventures, including i) a joint venture that is developing an office tower, as the market for office space has been more significantly impacted by the pandemic compared to the single family and multifamily markets in which BBXRE primarily invests, and ii) a joint venture invested in a multifamily apartment community in which BBXRE purchased its interest following the stabilization of the underlying asset at a purchase price calculated based on assumptions related to the timing and pricing of the sale of the asset, both of which have been impacted by the pandemic.

~~There~~there is no assurance that the ~~real estate~~demand in the housing markets and for investments in these communities will continue.

With respect to its communities for which construction is expected to be completed in 2022, including Altis Little Havana, Altis Miramar East/West, and Altis Ludlam Trail, the timing of the completion of these projects were adversely impacted by supply chain disruptions, and the Altman Companies currently expects that the costs to develop certain of these projects will be in excess of the estimated development costs. With respect to these communities as well as its communities for which construction commenced in 2021 and 2022, the Altman Companies currently believes that the higher rental rates resulting from increased demand for multifamily housing and investor demand for the acquisition of stabilized multifamily apartment communities may to some extent offset the impact of higher development costs on the profits expected to be earned on such developments; however, in light of the timing of the expected completion of these developments and uncertainty associated with general market conditions, including an expected increase in interest rates and the possible impact on the economy and investor demand, there is no assurance that the profits expected to be earned on these developments will not be ~~materially~~ adversely impacted by these factors.

In addition to its existing development portfolio, the ~~pandemic or otherwise, that~~Altman Companies has been focused on the ~~sales prices~~identification of single-family homes will not materially decline, that rents will be paid when due or at all, or that market rents will not materially decline. Further, while government efforts to delay or forestall evictionsnew opportunities primarily located in South Florida, Orlando, Florida, and the ~~availability~~greater Tampa, Florida area, all of ~~judicial remedies~~which have ~~not~~experienced increased demand for multifamily housing. While the Altman Companies believes that debt and equity capital is currently available for new development opportunities, it has observed a significant increase in land, commodity, and labor prices, as well as supply chain disruptions and material shortages, all of which are expected to ~~date materially impacted BBXRE’s operations, they may~~significantly increase development costs and result in possible delays in connection with developing new multifamily apartment communities. The Altman Companies is continuing to evaluate the impact of these costs on the overall profitability of its potential future developments and has observed compression in the ~~future~~profits expected to be earned from developments in its pipeline. Accordingly, the Altman Companies may make a determination to not pursue prospective opportunities in its pipeline. Notwithstanding the potential mitigating factors of higher rental rates and investor demand for the acquisition of stabilized multifamily apartment communities, a significant increase in development costs could have ~~an adverse~~a material impact on ~~both market values and BBXRE’s operating results. In addition,~~ the ~~effects of the pandemic may impact the costs of operating BBXRE’s real estate assets,~~Altman Companies’ operations, including, but not limited to, ~~an increase~~(i) a decrease in ~~property insurance costs indicated by recently obtained quotes~~the availability of ~~insurance costs~~equity and/or debt financing as a result of a decrease in projected investor profits and (ii) a decrease in the expected profits of development projects that are ultimately pursued. Such factors could result in, among other things, (i) increased operating losses at the Altman Companies due to a decline in development, general contractor, and management fees, (ii) the recognition of impairment losses by BBXRE and/or the Altman Companies related to their current investments, including predevelopment expenditures related to prospective development opportunities that are abandoned, and (iii) the recognition of impairment losses related to BBXRE’s overall investment in the Altman Companies, as the profitability and value of the Altman Companies depends on its ability to source new development opportunities.

In addition to the impact of higher ~~than pre-pandemic levels, which could also have an adverse impact on market values and BBXRE’s operating results. BBXRE will continue to monitor~~costs, economic and market conditions ~~and may recognize further impairment losses in future periods~~are also uncertain as a result of various factors, including ~~but not limited to, material declines~~inflationary pressures and expected increases in ~~overall real estate values, sales prices for single family homes, and/or rental rates for multifamily apartments.~~

Prior to the pandemic, BBXRE previously disclosed that it anticipated that its operating profits would decline in 2020 as compared to recent prior periods when significant sales of assets were consummated, and BBXRE expects that the effects of the COVID-19 pandemic will result in a further decline in its results of operations for 2020. Further, as BBXRE’s primary focus in 2020 had been to source investments in new development opportunities with the goal of

building a diversified portfolio of real estate investments that generate profits in future periods, the effects of the COVID-19 pandemic may impact BBXRE over a longer term to the extent that its ability to identify new development opportunities that meet its investment criteria or source debt or equity capital from unaffiliated third parties is adversely impacted. While BBXRE may be able to identify opportunistic investments in a recessionary environment that could be funded with available cash, there is no certainty that such opportunities will be identified, that such opportunities will meet the Company’s investment criteria, or that required funds will be available for that purpose.

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

~~The Altman Companies and Related Investments~~

To date, the COVID-19 pandemic has not significantly impacted construction activities which remain ongoing at the existing projects sponsored by the Altman Companies, and as a result, the Altman Companies continues to generate development and general contractor fees from such projects. In addition, through September 30, 2020, the Altman Companies had collected in excess of 97% of the rents at the multifamily apartment communities under its management. While its leasing activities were conducted virtually during March through May 2020, the Altman Companies has reopened its leasing offices for visits by appointment. Although the Altman Companies experienced a decline in tenant demand and in the volume of new leases during the second quarter of 2020, it generally experienced an increase in the volume of new leases at its communities during the third quarter of 2020. However, in an effort to maintain occupancy at its stabilized communities and increase occupancy at its communities under development, commencing in the second quarter and through the third quarter of 2020, the Altman Companies offered an increased number of concessions to prospective and renewing tenants.

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

~~Further, while there are indications that~~ In addition, as discussed above, the ~~capitalization rates for~~increases in costs of developing and operating multifamily apartment communities, ~~similar~~including, but not limited to, ~~those sponsored~~increases in commodity prices as a result of, among other things, supply chain disruptions and ~~managed by the Altman Companies~~material shortages, labor prices, and property insurance costs as compared to pre-pandemic levels, could also have generally remained steady, as the impact of the increased uncertainty in the overall market is generally viewed as having been offset by the impact of the significant decline in interest rates, the impact of the COVID-19 pandemic on economic conditions in general, including uncertainty regarding the severity and duration of such impact, has adversely impacted the level of real estate sales activity and overall credit markets and may ultimately have a significantan adverse impact on ~~capitalization rates~~market values and ~~real estate values in future periods, particularly if there is a prolonged economic downturn.~~

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

Beacon Lake Master Planned Development

~~During~~BBXRE is the ~~nine months ended September 30, 2020,~~master developer of the Beacon Lake Community, a master planned community located in St. Johns County, Florida that is being developed in four phases and is expected to be comprised of 1,476 single-family homes and townhomes. BBXRE ~~continued~~is primarily developing the land and common areas and selling finished lots to third-party homebuilders who are constructing single-family homes and townhomes that are planned to range from 1,400 square feet to 4,400 square feet and have base prices ranging from the high $300,000’s to the $700,000’s. Other than in the case of the lots comprising Phase 4, the agreements pursuant to which BBXRE is selling finished lots to homebuilders generally provide for a base purchase price that is paid to BBXRE upon the sale of the developed lots to the homebuilders and a contingent purchase price that is calculated as a percentage of the proceeds that the homebuilders receive from the sale of the completed homes. While an estimated amount of the contingent purchase price is recognized in BBXRE’s revenues upon the sale of the lots to the homebuilders, the contingent purchase price is paid to BBXRE upon the closing of such home sales.

BBXRE has substantially completed the development of the lots comprising Phases 1 and 2 of the Beacon Lake Community and expects to complete the development of the lots comprising Phase II3 in 2022. In 2021, BBXRE sold the 299 undeveloped lots comprising Phase 4 in a bulk lot sale to a single homebuilder.

The following table summarizes the status of the sale of lots to homebuilders in each phase in the development as of March 31, 2022:


	Phase 1	Phase 2		Phase 3	Phase 4	Total
		Single-family	Townhomes
Total planned lots	302	479	196	200	299	1,476
Lots sold to homebuilders ⁽¹⁾	(302)	(470)	(186)	—	(299)	(1,257)
Remaining lots to sell	—	9	10	200	—	219
Lots under contract with homebuilders	—	(9)	(10)	(200)	—	(219)
Available lots	—	—	—	—	—	—

(1)As further described in Note 2 to the Company’s consolidated financial statements included in the 2021 Annual Report, BBXRE generally recognizes revenue related to sales of lots to homebuilders, including an estimate of any contingent purchase price expected to be collected in relation to such lots, upon the closing of the sale of such lots to the homebuilders. Although BBXRE recognizes the expected contingent purchase price associated with such lots upon the closing of the sale to the homebuilders, BBXRE ultimately does not receive any contingent purchase price related to a lot until the homebuilder closes on the sale of a home on such lot and collects the proceeds from the home sale. With respect to the sale of the undeveloped lots comprising Phase 4, BBXRE received the payment of the purchase price for the lots from the homebuilder at the time of closing, subject to certain adjustments contemplated in the agreement, but the agreement related to the transaction does not provide for a contingent purchase price structure similar to the agreements related to the sale of developed lots in Phases 1 through 3. As of March 31, 2022, BBXRE had recognized a contingent purchase price receivable of $19.3 million related to the sale of lots in the Beacon Lake Community.

The following table summarizes the status of the sale of homes by homebuilders on lots previously sold by BBXRE to such homebuilders:


	Phase 1	Phase 2		Total
		Single-family	Townhomes
Lots sold to homebuilders	302	470	186	958
Homes closed	301	256	117	674
Homes remaining to close	1	214	69	284

At the current time, BBXRE does not expect the observed increases in commodity and labor prices to materially impact its costs to develop the lots in Phase 3 but does expect that the costs to construct homes on the developed lots throughout the Beacon Lake Community ~~in St. Johns County, Florida, which is expected~~will be impacted. BBXRE currently believes that homebuilders are likely to ~~include approximately 400 single-family homes and 196 townhomes, and an additional 79 lots for single-family homes as part of Phase III of the project and sold~~continue to ~~homebuilders 102 single family lots and 70 townhome lots. In addition, as part of BBXRE’s efforts~~meet their obligations to maximize liquidity in light of overall economic conditions, the community development district related to the Beacon Lake Community issued $8.6 million of additional community development bonds. The funds from the issuance were primarily used to reimburse BBXRE for its funding of ongoing development costs related to Phases II and III. As of September 30, 2020, BBXRE had entered into purchase agreements with homebuilders to sell developed lots for an additional 320 single-family homes and 126 townhomes as part of Phases II and III and has collected deposits related to these purchase agreements.

Following the initial outbreak of COVID-19 in March 2020, unaffiliated homebuilders at the Beacon Lake Community experienced a decline in the volume of sales traffic and home sales and requested extensions of their existing agreements for the purchase of additional developedacquire lots from BBXRE pursuant to the existing agreements between BBXRE and BBXRE agreed to such extensions. Subsequently, sales activity significantly increased in May 2020 and generally returned to pre-pandemic levels subsequent to May 2020. Based on that activity, BBXRE currently expects the ~~sale~~homebuilders, as the impact of the ~~remaining developed lots~~increase in construction costs on the profitability of home sales is being offset to ~~occur pursuant its purchase agreements with the homebuilders under the modified takedown schedules.~~some extent by an increase in prices for single-family homes. However, there is no assurance that this will continue to be the case, and the ~~effects of the COVID-19 pandemic on the economy and demand for single-family housing remain uncertain and~~increase in construction costs could result in ~~further~~ requests by homebuilders to extend the timing of their purchase of developed lots and/or failure of the homebuilders to meet their obligations under these contracts. In addition, while there has been continued demand for homes at the Beacon Lake Community, other market factors, including an increase in interest rates on mortgage loans, could negatively impact demand and the estimated selling prices of homes in the community, which would have a ~~decline~~negative impact on the expected contingent purchase price due from homebuilders upon the sale of homes in ~~home prices as a result of~~ the ~~economic impacts associated with the COVID-19 pandemic could result~~community.

Single-Family Development Joint Ventures

Prior to 2021, BBXRE invested approximately $7.4 million in a ~~decrease in contractually owed contingent revenues~~joint venture with CC Homes to develop Marbella, a residential community expected to be ~~earned by~~comprised of 158 single-family homes in Miramar, Florida. As of March 31, 2022, the joint venture had entered into contracts to sell all of its remaining 107 single-family homes, as closings commenced in September 2021. During the three months ended March 31, 2022, the joint venture closed on the sale of 19 single-family homes, and BBXRE ~~in connection with sales~~recognized $1.8 million of ~~homes by homebuilders on developed lots previously sold to them, as well as a decrease~~equity earnings and received $2.0 million of distributions from the venture.

In June 2019, BBXRE invested $4.2 million in the Sky Cove joint venture, which was formed to develop Sky Cove at Westlake, a residential community comprised of 204 single-family homes in Loxahatchee, Florida. During the three months ended March 31, 2022, the joint venture closed on the sale of 24 single-family homes, and BBXRE recognized $0.2 million of equity earnings and received $0.5 million of distributions from the venture. As of March 31, 2022, the joint venture had executed sales contracts on an additional 14 single-family homes, and closings on such sales are expected ~~sales prices for~~to occur in 2022.

In February 2021, BBXRE invested $4.9 million in the ~~unsold lots comprising~~Sky Cove South joint venture, which was formed to develop Sky Cove South at Westlake, a residential community that will be adjacent to Sky Cove at Westlake and is expected to be comprised of 197 single-family homes. As of March 31, 2022, the ~~remainder~~joint venture had commenced construction of the ~~Beacon Lakes Community.~~ community and executed sales contracts on 115 single-family homes.

Although the above joint ventures expect to incur increased costs to construct homes in their respective communities and have experienced disruptions in supply chains and supply shortages, BBXRE does not currently ~~expect~~believe that such increases will have a material adverse impact on the expected profitability of these investments. While there is no assurance that this will be ~~a significant decrease in~~ the case, it is expected that higher demand and sales prices ~~or fair value of its unsold lots, a significant decline in the demand and pricing~~ for single-family homes ~~could result~~will to some extent offset the increase in construction costs.

Bayview Joint Venture

In 2014, BBXRE invested in a joint venture with an affiliate of Procacci Development Corporation (“Procacci”). At the inception of the venture, BBXRE and Procacci each contributed $1.8 million to the venture in exchange for a 50% equity interest, and the joint venture acquired approximately three acres of real estate in Fort Lauderdale, Florida for $8.0 million. As of March 31, 2021, the carrying amount of BBXRE’s investment in the ~~recognition~~joint venture was $1.4 million.

In February 2022, BBXRE agreed to sell its equity interest in the joint venture to Procacci for net cash consideration of ~~impairment losses~~approximately $8.9 million. Under the terms of the agreement, Procacci will fully assume the mortgage loan on the property, which currently has an outstanding balance of $5.0 million, and BBX Capital’s existing guaranty on 50% of the outstanding loan balance for any liabilities that occur following the closing. However, the closing of the sale is subject to certain closing conditions, including obtaining a release from the lender of BBX Capital’s guaranty on the outstanding loan balance for any liabilities that occur following the closing, and there is no assurance that the transaction will be consummated pursuant to the terms of the agreement, or at all.

Other Pending Real Estate Sales

During the first quarter of 2022, BBXRE entered into an agreement to sell approximately 119 acres of vacant land located in ~~future periods.~~St. Lucie County, Florida for a sales price of approximately $23.0 million, subject to certain adjustments. The vacant land is a legacy asset acquired by a predecessor of BBXRE and has a carrying value of approximately $0.4 million. The transaction is currently expected to close in December 2022 or an earlier date as designated by the buyer. However, the closing of the transaction is subject to customary closing conditions, and there is no assurance that the property will be sold pursuant to the terms of the contract, or at all.

‎

Results of Operations

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



	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,						For the Three Months Ended March 31,
	2020		2019		Change		2020		2019		Change		2022		2021		Change
Sales of real estate inventory	$	4,970		370		4,600		14,248		5,030		9,218	$	6,470		13,535		(7,065)
Interest income		419		166		253		604		631		(27)		545		475		70
Net gains on sales of real estate assets		164		399		(235)		130		11,395		(11,265)		1,329		105		1,224
Other		329		197		132		1,116		1,321		(205)
Other revenues														516		398		118
Total revenues		5,882		1,132		4,750		16,098		18,377		(2,279)		8,860		14,513		(5,653)
Cost of real estate inventory sold		3,367		—		3,367		9,473		2,643		6,830		2,235		7,858		(5,623)
Recoveries from loan losses, net		(807)		(1,821)		1,014		(5,844)		(4,206)		(1,638)		(648)		(508)		(140)
Impairment losses		—		37		(37)		2,710		37		2,673
Selling, general and administrative expenses		1,715		2,336		(621)		5,176		6,709		(1,533)		2,398		1,974		424
Total costs and expenses		4,275		552		3,723		11,515		5,183		6,332		3,985		9,324		(5,339)
Operating profits		1,607		580		1,027		4,583		13,194		(8,611)
Equity in net (losses) earnings of unconsolidated joint ventures		(646)		28,534		(29,180)		50		37,276		(37,226)
Other income		—		—		—		—		171		(171)
Operating income														4,875		5,189		(314)
Equity in net earnings (losses) of unconsolidated real estate joint ventures														1,532		(271)		1,803
Other expense														(13)		—		(13)
Income before income taxes	$	961		29,114		(28,153)		4,633		50,641		(46,008)	$	6,394		4,918		1,476

~~BBX Capital Real Estate’s~~BBXRE’s income before income taxes for the three months ended ~~September 30, 2020~~March 31, 2022 compared to the same ~~2019~~2021 period ~~decreased~~increased by ~~$28.2~~$1.5 million primarily due to the following:

~~A decrease~~

An increase in equity in net earnings of unconsolidated joint ventures primarily due to BBXRE recognizing $29.1 million of equity earnings from the Altis at Bonterra joint venture in 2019 as a result of the sale of its 314 unit multifamily apartment community in August 2019; and

~~A net decrease in recoveries from loan losses; partially offset by,~~

An increase in net profits from the sale of developed lots to homebuilders at the Beacon Lake Community development, as BBXRE sold 62 developed lots during the 2020 period and no developed lots during the 2019 period; and

~~A decrease in selling, general and administrative expenses primarily associated with lower incentive bonuses and professional fees.~~

~~BBX Capital Real Estate’s income before income taxes for the nine months ended September 30, 2020 compared to the same 2019 period decreased by $46.0 million~~ primarily due to the ~~following:~~Marbella joint venture’s single-family home sales during the three months ended March 31, 2022, which resulted in the recognition of $1.8 million of equity earnings from BBXRE’s investment in the venture; and

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

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

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

An increase in net profits from the sale of developed lots to homebuilders at the Beacon Lake Community development, as BBXRE sold 172 developed lots during the 2020 period and 51 developed lots during the 2019 period;

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

A decrease in selling, general and administrative expenses primarily due to the above mentioned cost reductions, a legal settlement with a title company in 2020, and lower operating expenses due to the sale of RoboVault during 2019.

An increase in gains on the sales of real estate assets from the legacy portfolio of foreclosed assets; partially offset by

A decrease in net profits from the sale of lots to homebuilders at the Beacon Lake Community development, as BBXRE sold 44 developed lots during the 2022 period compared to 128 developed lots during the 2021 period; and

An increase in selling, general and administrative expenses primarily associated with new hires, which reflects the impact of BBXRE’s newly formed logistics real estate division, and increased incentive compensation.

BBX Sweet Holdings Reportable Segment

Segment Description

~~BBX Sweet Holdings also owns approximately 93% of the equity interests in~~(i) IT’SUGAR, a specialty candy retailer whose products include bulk candy, candy in giant packaging, and licensed and novelty ~~items.~~items and which operates in retail locations which include a mix of high-traffic resort and entertainment, lifestyle, mall/outlet, and urban locations throughout the United States, (ii) Las Olas Confections and Snacks, a manufacturer and wholesaler of chocolate and other confectionery products, and (iii) Hoffman’s Chocolates, a retailer of gourmet chocolates with retail locations in South Florida.

BBX Sweet Holdings owns over 90% of the equity interests in IT’SUGAR. Prior to September 22, 2020, the Company consolidated the financial statements of IT’SUGAR and its subsidiaries as a result of its ~~93%~~over 90% ownership of IT’SUGAR. ~~However, as further discussed below,~~As a result of the impact of the COVID-19 pandemic on its operations, on September 22, 2020, IT’SUGAR and its subsidiaries filed voluntary petitions to reorganize under Chapter 11 of Title 11 of the ~~Bankruptcy~~U.S. Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”) ~~on September 22, 2020,~~(the cases commenced by such filings, the “Bankruptcy Cases”), and ~~the Company deconsolidated IT’SUGAR~~ as a result of the filings and the uncertainties surrounding the nature, timing, and specifics of the bankruptcy ~~proceedings.~~

~~Overview~~

~~Although~~proceedings, the Company deconsolidated IT’SUGAR on September 22, 2022. On June 16, 2021, the Bankruptcy Court confirmed IT’SUGAR’s plan of reorganization, and the plan became effective on June 17, 2021 (the “Effective Date”). Pursuant to the terms of the plan, BBX Sweet Holdings’ equity interests in IT’SUGAR were revested on the Effective Date, and all organizational documents of

IT’SUGAR were assumed, ratified, and reinstated. As a result of the confirmation and effectiveness of the plan and the revesting of its equity interests in IT’SUGAR, the Company was deemed to have reacquired a controlling financial interest in IT’SUGAR and consolidated the results ~~from~~of IT’SUGAR into its consolidated financial statements as of the Effective Date, the date that the Company reacquired control of IT’SUGAR.

As a result of the above, IT’SUGAR’s results of operations ~~were improved~~are included in the Company’s statement of operations and comprehensive income for the ~~first two~~three months ended March 31, 2022 but are not included in the Company’s statement of ~~2020 as compared to 2019, reflecting, among other things, IT’SUGAR’s opening~~operations and comprehensive income for the three months ended March 31, 2021.

Business Update

IT'SUGAR

As of ~~a three story candy~~March 31, 2022, IT’SUGAR was operating approximately 100 retail locations across the United States, including 13 “temporary” retail locations.

Since June 2021, IT’SUGAR has been focused on (i) expanding its “candy department ~~store~~store” concept (as implemented in retail locations at American Dream in New Jersey ~~in December 2019~~ and the ~~opening~~Ala Moana Center in Honolulu, Hawaii) in select high-traffic resort and entertainment locations across the United States, (ii) evaluating additional retail locations in targeted markets in which it believes it can opportunistically capitalize on the availability of ~~three other stores~~retail space and a decline in ~~2019, BBX Sweet Holdings has been materially adversely impacted~~rental rates of retail space, and (iii) improving the remaining maturity of its store portfolio by extending the ~~effects~~lease terms of its existing successful retail locations, as well as expanding the ~~COVID-19 pandemic.~~size of certain retail locations.

~~In March 2020, as~~The following summarizes activities in IT’SUGAR’s store portfolio in 2022:

IT’SUGAR opened (i) an expansion of an existing retail location in Coney Island, New York, (ii) an expanded relocation of a ~~result~~store at an existing location in Branson, Missouri, and (iii) a “large format” temporary retail location in Chicago, Illinois;

IT’SUGAR executed lease agreements for (i) a 17,000 square foot “candy department store” in a high-traffic metropolitan area, (ii) its first international location, (iii) two “large format” temporary retail locations in high-traffic metropolitan areas, (iv) a relocation of ~~various factors, including government-mandated closures~~a store at an existing location, and ~~CDC~~(iv) one new location; and ~~WHO advisories in connection with the COVID-19 pandemic,~~

IT’SUGAR closed ~~all of~~three retail locations.

With respect to the “temporary” retail locations that IT’SUGAR opened during its Bankruptcy, these locations required initial capital investments that were generally significantly lower than the investments required for IT’SUGAR’s traditional retail locations and ~~furloughed all store employees~~were leased with terms ranging from 13-36 months and which generally provided for the ~~majority~~payment of ~~its corporate employees. Between May 2020 and September 2020, IT’SUGAR reopened nearly all~~rent based on a percentage of ~~its approximately 100 locations that were open prior to~~sales generated at the ~~pandemic as part of a phased reopening plan which included revised store floor plans, increased sanitation protocols, and the gradual recall of~~

~~furloughed store and corporate employees to full or part-time employment. However, from time to time,~~applicable location. Although IT’SUGAR has been ~~required~~seeking to ~~close previously reopened~~extend the term of the leases for certain of these locations, ~~as a result~~certain of ~~various factors, including government- mandated closures and staffing shortages.~~

~~IT’SUGAR ceased paying rent to~~ the landlords ~~of its closed locations in April 2020 and engaged in negotiations with its landlords for rent abatements, deferrals, and other modifications for both~~have indicated that they do not intend to extend the period of time that the locations were closed and the subsequent period that the locations have been opened and operating under conditions which have been affected by the pandemic. In addition to its unpaid rental obligations, IT’SUGAR ceased paying various outstanding obligations to its vendors.

~~Although IT’SUGAR was able to reopen its retail locations and received an advance of $2.0 million from a subsidiary of BBX Capital (as further described in~~ ~~Note 7 to the Company’s condensed consolidated financial statements included in Item 1 of this report~~), IT’SUGAR was unable to maintain sufficient liquidity to sustain its operations as i) it was unable to obtain significant rent abatements or deferrals from its landlords and amended payment terms from its vendors and ii) its sales volumes had not sufficiently improved and stabilized following the reopening of its locations. In particular, although a significant portion of its retail locations were reopened during the three months ended September 30, 2020, IT’SUGAR’s total revenues for the period declined by approximately 50.4% as compared to the comparable period in 2019. ~~As a result, on September 22, 2020, IT’SUGAR and its subsidiaries filed voluntary petitions to reorganize under Chapter 11~~term of the ~~Bankruptcy Code~~leases, and in some cases, IT’SUGAR has closed the ~~Bankruptcy Court (the cases commenced by such filings, the “Bankruptcy Cases”)~~

~~At the current time,~~locations. IT’SUGAR is continuing to ~~operate its~~seek to add additional “temporary” retail locations ~~under the supervision of the Bankruptcy Court and Creditors’ Committee and~~but is ~~negotiating with its creditors in relation~~also pursuing possible “large format” locations which may require higher initial capital investments but are currently expected by IT’SUGAR to ~~a proposed Reorganization Plan and the terms of amendments to the lease agreements associated with its retail locations.~~

At this time, it is not possible to predict the ultimate effect of the reorganization process on IT’SUGAR’s business and creditors or when, or if, IT’SUGAR may emerge from bankruptcy. While the reorganization process may improve IT’SUGAR’s result of operations, cash flows, and financial condition if it obtains relief in relation to its pre-petition liabilities and it is able to negotiate amendments to its lease agreements that lower its ongoing occupancy costs, there is no assurance that it will obtain such relief, and the ultimate impact of the Bankruptcy Cases and the reorganization process on IT’SUGAR and its results of operations, cash flows, or financial condition remains uncertain.generate higher sales. Further, the ~~effects of the COVID-19 pandemic on demand, sales levels, and consumer behavior,~~leases for these locations may include fixed rental obligations as ~~well as the current recessionary economic environment, have had and could continue~~opposed to ~~have a material adverse effect on IT’SUGAR’s business, results of operations, and financial condition both during the resolution of the bankruptcy proceedings and thereafter.~~

~~As a result of IT’SUGAR filing the Chapter 11 Bankruptcy Cases and the~~ ~~uncertainties surrounding the nature, timing, and specifics of the bankruptcy proceedings,~~ ~~the Company deconsolidated IT’SUGAR as of September 22, 2020 and recognized a loss of~~ ~~$3.3 million~~ ~~during the three and nine months ended September 30, 2020 in connection with the deconsolidation,~~ ~~as further discussed in~~ ~~Note 17 to the Company’s condensed consolidated financial statements included in Item 1 of this report. Prior to the deconsolidation of IT’SUGAR,~~ ~~the Company recognized $25.3 million of impairment losses during the nine months ended September 30, 2020 related to IT’SUGAR’s goodwill and long-lived assets~~ a~~s a result of the effects of the pandemic, including the recognition of a goodwill impairment loss of $20.3 million~~lease payments based on a ~~decline~~percentage of sales. As certain of these temporary locations are in the estimated fair value of IT’SUGAR. The decline in the estimated fair value of IT’SUGAR during the nine months ended September 30, 2020 as compared to the Company’s prior valuation of IT’SUGAR as of December 31, 2019 reflected the impact on the Company’s estimated future cash flows of the temporary closure of IT’SUGAR’s retailhigh-traffic metropolitan locations ~~commencing in March 2020, including the liabilities incurred by IT’SUGAR during the shutdown, and considered scenarios~~ in which ~~IT’SUGAR’s business~~IT’SUGAR desires to expand, IT’SUGAR believes that these temporary locations will allow IT’SUGAR to better evaluate whether it should incur the capital expenditures and sales volumes would stabilize following the phased reopening of its retail locations. The Company’s estimated discount rate applicable to IT’SUGAR’s cash flows was also increased to reflect, among other things, changes in market conditions, the uncertainty of the duration and severity of the economic downturn, uncertaintylease obligations related to the retail environment and consumer behavior, uncertainty related to IT’SUGAR’s ability to stabilize its operations and implement its long-term strategies for its business, and the deterioration in IT’SUGAR’s financial condition as a result of the effects of the COVID-19 pandemic, including its lack of sufficient liquidity for its operations during 2020.

As previously disclosed, during the ~~landlords of these locations related to unpaid rents. Further, the Company’s estimated fair value~~course of its ~~investment in~~bankruptcy, IT’SUGAR at the time of its filing of the Bankruptcy Cases included assumptions related to relief of pre-petition obligations and improved occupancy costs as a result of renegotiated lease agreements for its retail locations. In addition, the Company’s estimates assumed that there would not be a material permanent decline in the demand for IT’SUGAR’s products and that IT’SUGAR will ultimately in the future return to its full operations and implement its long-term strategy to reinvest in and grow its business. However, as it is difficult to predict i) the severity, magnitude, and duration, as well as the economic consequences, of the COVID-19 pandemic, which are uncertain and rapidly changing and may involve the re-implementation of government mandated closures or operating restrictions, and ii) the ultimate outcome of IT’SUGAR’s Chapter 11 Bankruptcy Cases, these estimates and assumptions may change over time, which may result in the recognition of additional impairment losses related to the Company’s investment in IT’SUGAR that would be material to the Company’s financial statements. Changes in assumptions that could materially impact the Company’s estimates related to IT’SUGAR that could result in the recognition of impairment losses in future periods include, but are not limited to, IT’SUGAR’s Chapter 11 Bankruptcy Cases being converted to Chapter 7 bankruptcy cases, IT’SUGAR not obtaining expected relief during the reorganization, a material permanent decline in demand for IT’SUGAR’s products, IT’SUGAR abandoning its long-term strategy to reinvest and grow its business as a result of changes in consumer demand, and significant additional closures following the initial reopening of locations as a result of additional outbreaks of COVID-19.

As a result of the above factors, the Company recognized $25.3 million of impairment losses related to IT’SUGAR’s goodwill and long-lived assets during the nine months ended September 30, 2020, including the recognition of a goodwill impairment loss of $20.3 million based on a decline in the estimated fair value of IT’SUGAR. See Notes 1 and 6 to the Company’s ~~condensed consolidated~~ financial statements included in Item 1 of this report for additional information with respect to the Company’s recognition of impairment losses related to IT’SUGAR, including the Company’s significant estimates and assumptions related to IT’SUGAR and the fact that such assumptions may change over time as a result of the COVID-19 pandemic and the ultimate outcome of IT’SUGAR’s Chapter 11 bankruptcy cases, which may result in the recognition of additional impairment losses related to the BBX Sweet Holdings’ investment in IT’SUGAR that would be material to the Company’s financial statements.

In April 2020, BBX Capital, through a wholly-owned subsidiary of BBXRE, purchased IT’SUGAR’s revolving line of credit and equipment note from the respective lenders for the aggregate outstanding principal balance of the loans of $4.3 million plus accrued interest and subsequently advanced an additional $2.0 million to IT’SUGAR pursuant to the terms of the loans. In addition, in October 2020, IT’SUGAR obtained a $4.0 million “debtor in possession” credit facility from a subsidiary of BBX Capital that was approved by the Bankruptcy Court on an interim basis pending a final hearing. As of November 9, 2020, $2.0 million had been funded to IT’SUGAR under the DIP credit facility.

~~See Note 17 to the Company’s~~ ~~condensed consolidated~~ ~~financial statements included in Item 1 of this report for additional information with respect to IT’SUGAR’s Bankruptcy Cases and the Company’s issuance of DIP financing to IT’SUGAR.~~

~~Hoffman’s Chocolates and Las Olas Confections and Snacks~~

Hoffman’s Chocolates and Las Olas Confections and Snacks have also been engaged in negotiations with the landlords of their respective retail and manufacturing locations for rent abatements, deferrals, and other modifications. As of September 30, 2020, Hoffman’s Chocolates and Las Olas Confections and Snacks had accrued and unpaid current rental obligations of $0.2 million, which are included in other liabilities in the Company’s ~~condensed consolidated~~ ~~statement of financial condition, and they had~~ executed lease amendments with respect to 678 of its 96 retail locations. Although the specific terms of the executed lease amendments vary, the amended leases generally provided for the forgiveness of IT’SUGAR’s pre-petition rent obligations, and many (but not all) of the amended leases also provided for the payment of rent based on a percentage of sales volumes (in lieu of previously scheduled fixed lease payments), generally for a period of one to two years from the commencement of the Chapter 11 Cases. Following such periods of time, the amended leases generally require IT’SUGAR to resume the payment of previously scheduled fixed lease payments going forward. As the temporary rent relief provided by these amendments expired in December 2021 for many of IT’SUGAR’s leases, IT’SUGAR experienced a relative increase in its occupancy costs during the three months ended March 31, 2022, as it recommenced the payment of previously scheduled fixed lease payments. In addition, for certain retail locations, including four locations that historically generated operating losses largely based on the applicable fixed rental obligations prior to the amendments, the lease amendments provide for the payment of rent based on a percentage of sales volumes through the remainder of the

lease term; however, in such cases, the landlords generally have the right to terminate the lease agreements at any time following notice periods ranging from 30 to 60 days. During the three months ended March 31, 2022, IT’SUGAR closed one of these locations ~~including~~as a result of the landlord’s exercise of its right to terminate the lease.

As previously disclosed, IT’SUGAR has experienced an improvement in its sales since the filing of its bankruptcy, and its sales have continued to improve during the first quarter of 2022. The following summarizes the increase in IT’SUGAR’s comparable store sales and total revenues during the quarter ended March 31, 2022 as compared to the comparable periods in 2021 and 2019:



	First Quarter 2022 Compared to First Quarter 2019⁽²⁾	First Quarter 2022 Compared to First Quarter 2021
Comparable Store Sales ⁽¹⁾	16%	30%
Total Revenues	41%	27%

(1)Comparable store sales represent IT’SUGAR’s sales at its retail locations excluding both the impact of e-commerce sales and changes in its store portfolio.

(2)Because IT’SUGAR’s results for the first quarter of 2021 and fiscal 2020 were impacted by the COVID-19 pandemic, the Company has included a comparison of its results for the quarter ended March 31, 2022 to the comparable period in 2019 in order to include a meaningful comparison to a period that was not impacted by the COVID-19 pandemic.

As a result of ongoing disruptions in global supply chains, IT’SUGAR has experienced an increase in the cost of inventory and freight, as well as delays in its supply chain. To date, IT’SUGAR has generally been able to mitigate the impact of increased costs through increases in the prices of its products. However, supply chain disruptions have also impacted its ability to maintain historical inventory levels at its retail locations. To the extent that costs continue to increase, there is no assurance that IT’SUGAR will be able to continue to increase the prices of its products without significantly impacting consumer demand and its sales volume. Additionally, IT’SUGAR has experienced an increase in payroll costs as a result of higher wages and shortages in available labor at its retail locations.

Las Olas Confections and Snacks and Hoffman’s Chocolates

During the three months ended March 31, 2022, the combined revenues of Las Olas Confections and Snacks’ and Hoffman’s Chocolates increased by approximately 4% as compared to their sales during the same 2021 period. However, they are also currently experiencing the impact of increased costs for raw materials and supply chain delays, as well as increased labor costs. In an effort to mitigate the impact of these factors, they have increased the price of certain of their products, while Las Olas Confections and Snacks has also focused on efforts to improve efficiencies in its manufacturing facility.

During the three months ended March 31, 2022, Hoffman’s Chocolates also sold its manufacturing facility in ~~Orlando, Florida. There is no assurance that the sales volumes of these businesses will improve,~~Greenacres, Florida, and they may be required to close previously reopened locations as a result of governments reimplementing mandated closures or otherwise. There is also no assurance that Hoffman’s Chocolates will be able to execute a lease amendment with the landlordsubstantially all of its ~~remaining location for which an agreement has yet~~products are now expected to be ~~reached,~~manufactured by Las Olas Confections and ~~due to the uncertainty related to these businesses as a result of the pandemic, there is no assurance they will be~~Snacks in ~~a position to meet their obligations under the terms of lease agreements and amendments that have been executed or are otherwise being negotiated.~~future periods.

‎

Results of Operations

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



	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,						For the Three Months Ended March 31,
	2020		2019		Change		2020		2019		Change		2022		2021		Change
Trade sales	$	15,166		28,051		(12,885)		41,743		76,039		(34,296)	$	29,357		4,982		24,375
Cost of trade sales		(11,678)		(17,229)		5,551		(35,493)		(48,862)		13,369		(18,373)		(3,828)		(14,545)
Gross margin		3,488		10,822		(7,334)		6,250		27,177		(20,927)		10,984		1,154		9,830
Interest income		2		12		(10)		29		43		(14)		—		—		—
Other revenue		77		115		(38)		281		210		71		—		—		—
Interest expense		(54)		(45)		(9)		(170)		(143)		(27)		(247)		(26)		(221)
Impairment losses		—		—		—		(25,303)		—		(25,303)		(64)		—		(64)
Selling, general and administrative expenses		(8,483)		(11,086)		2,603		(25,123)		(31,860)		6,737		(12,675)		(1,571)		(11,104)
Total operating losses		(4,970)		(182)		(4,788)		(44,036)		(4,573)		(39,463)		(2,002)		(443)		(1,559)
Loss on the deconsolidation of IT'SUGAR, LLC		(3,326)		—		(3,326)		(3,326)		0		(3,326)
Other income		81		67		14		195		292		(97)		872		26		846
Loss before income taxes	$	(8,215)		(115)		(8,100)		(47,167)		(4,281)		(42,886)	$	(1,130)		(417)		(713)
Gross margin percentage	%	23.00		38.58		(15.58)		14.97		35.74		(20.77)	%	37.42		23.16		14.26
SG&A as a percent of trade sales	%	(55.93)		(39.52)		(16.41)		(60.18)		(41.90)		(18.28)	%	43.18		31.53		11.65
Expenditures for property and equipment													$	1,357		3		1,354
Depreciation and amortization													$	1,493		81		1,412
Debt accretion and amortization													$	44		19		25

BBX Sweet ~~Holdings~~Holdings’ loss before income taxes for the three months ended ~~September 30, 2020~~March 31, 2022 compared to the same ~~2019~~2021 period increased by ~~$8.1~~$0.7 million primarily due to the following:

~~A decrease~~

An overall increase in operating losses associated with the consolidation of IT’SUGAR in the 2022 period, as IT’SUGAR has historically generated operating losses during the first quarter due to the seasonal decline in its sales, particularly during the months of January and February; and

An increase in Las Olas Confections and Snacks’ cost of trade sales ~~primarily due to the impacts of the COVID-19 pandemic described above;~~

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

~~A loss on the deconsolidation of IT’SUGAR; partially offset by~~

~~A net decrease in selling, general and administrative expenses primarily due costs reductions implemented as a result of the COVID-19 pandemic.~~

~~BBX Sweet Holdings’ loss before income taxes for the nine months ended September 30, 2020 was $47.2 million compared to $4.3 million during the same 2019 period. The increase was~~ primarily due to ~~the~~higher material and labor costs; partially offset by

The recognition of ~~impairment losses in 2020 due to~~ a ~~decline~~$0.9 million gain on the sale of property and equipment in the ~~estimated value of the goodwill and long-lived assets~~2022 period associated with ~~BBX Sweet Holdings’ reporting units as a result~~Hoffman’s Chocolates’ sale of ~~the impact of the COVID-19 pandemic on market conditions, as well as the factors described above related to the three months ended September 30, 2020 and 2019.~~its manufacturing facility in Greenacres, Florida.

Information regarding the results of operations for IT’SUGAR for the three ~~and nine~~ months ended ~~September 30, 2020 and 2019~~March 31, 2022 is set forth below (dollars in thousands):



	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,						For the Three Months Ended March 31,
	2020		2019		Change		2020		2019		Change		2022		2021		Change
Trade sales	$	12,197		24,677		(12,480)		31,794		63,347		(31,553)	$	24,255		—		24,255
Cost of trade sales		(9,095)		(13,902)		4,807		(26,923)		(37,442)		10,519		(14,130)		—		(14,130)
Gross margin		3,102		10,775		(7,673)		4,871		25,905		(21,034)		10,125		—		10,125
Other revenue														—		—		—
Interest expense														(176)		—		(176)
Impairment losses														(64)		—		(64)
Selling, general and administrative expenses		7,793		9,567		(1,774)		21,121		26,645		(5,524)		(10,938)		—		(10,938)
Total operating (losses) profits		(4,691)		1,208		(5,899)		(16,250)		(740)		(15,510)
Interest and other income		54		15		39		125		240		(115)
Impairment losses		—		—		—		(24,948)		—		(24,948)
Interest expense		(34)		(23)		(11)		(109)		(80)		(29)
(Loss) income before income taxes	$	(4,671)		1,200		(5,871)		(41,182)		(580)		(40,602)
Total operating losses														(1,053)		—		(1,053)
Other income														32		—		32
Loss before income taxes													$	(1,021)		—		(1,021)
Gross margin percentage	%	25.43		43.66		(18.23)		15.32		40.89		(25.57)	%	41.74		—		41.74
SG&A as a percent of trade sales	%	63.89		38.77		25.12		66.43		42.06		24.37	%	45.10		—		45.10

‎

Renin Reportable Segment

Segment Description

Renin is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products and operates through its headquarters in Canada and ~~two~~four manufacturing and distribution facilities in the United States and Canada. In addition to its own manufacturing activities, Renin also sources various products and ~~raw~~ materials from China, Brazil, and ~~Vietnam.~~ certain other countries.

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

~~Overview~~Business Update

~~As of September 30, 2020, Renin had not been significantly impacted by~~During the ~~COVID-19 pandemic,~~three months ended March 31, 2022, Renin’s sales decreased as compared to the same period in 2021, primarily reflecting (i) backordered inventory resulting from supply chain disruptions, (ii) delays in shipments to customers due to ongoing price negotiations, (iii) disruptions in shipping and ~~it has continued to operate both of its manufacturing~~facilities associated with inclement weather and distribution facilities, source various products and raw materials from China and Vietnam, and sell its products through various channels. Although Renin has experienced a decline in sales to certain customersrestrictions on business operations as a result of ~~concerns related to the pandemic, these declines have been offset by an increase~~COVID-19 in ~~sales through~~January 2022 and (iv) one of Renin’s major customers discontinuing its ~~retail and commercial channels. However, as~~purchase of certain products from Renin in late 2021. As a result, Renin’s retail channel comprised approximately 71% of its gross sales for the ~~pandemic,~~ three months ended March 31, 2022 as compared to approximately 80% for the same period in 2021.

Renin has ~~experienced increased~~continued to experience a significant increase in costs related to ~~the shipment of products~~shipping and raw materials, as well as delays in its supply chains, which ~~has~~have negatively impacted (i) its product costs and gross margin, (ii) its ability to fulfill customer orders, and (iii) its working capital and cash flows due to increased inventory in transit, a prolonged period between when it is required to pay its suppliers and it is paid by its customers, and the overall decline in its gross margin.

~~Although~~ Further, as described below, these factors have negatively impacted Renin’s ~~operations had not been significantly impacted by~~compliance with the ~~pandemic as~~covenants contained in its credit facility with TD Bank. In an effort to mitigate the impact of ~~September 30, 2020, the effects~~certain of ~~the pandemic, including a recessionary economic environment, could have a significant adverse impact on Renin’s results of operations and financial condition~~these factors, Renin has sought to (i) negotiate increases in ~~future periods, particularly if~~prices with its customers, (ii) maintain higher inventory levels in an ~~economic downturn is prolonged in nature and impacts consumer demand or the effects of the pandemic result in material disruptions in the~~effort to ensure that it can fulfill customer orders, (iii) diversify its global supply chains, ~~for its products~~ and ~~raw materials, including further delays in the production and shipment of products~~

~~and raw materials from foreign suppliers and continued increases in shipping costs. Further, while Renin has begun to diversify its supply chain and~~(iv) transfer the assembly of certain products from foreign suppliers to its own manufacturing ~~facilities,~~facilities.

Although Renin ~~continues~~has taken steps intended to mitigate the risks it faces, Renin’s product costs and gross margin have been and are expected to continue to be adversely impacted in 2022. While Renin has successfully increased the prices of many of its products, including in many cases multiple times during 2021, the timing of the implementation of these price increases with its major customers has generally lagged behind the timing of the increases in its costs, which has resulted in significantly lower gross margins during the periods in which Renin has continued to fulfill orders prior to the implementation of the price increases. In addition, in certain cases, the negotiated price increases do not fully offset the increase in Renin’s costs, and as a result, Renin’s gross margins will continue to be negatively impacted unless it can negotiate additional price increases in the future, global supply chains stabilize, and/or Renin is able to identify and implement alternative methods to source and manufacture its products in a more cost effective manner.

As a result of the above factors, Renin’s gross margin percentage decreased from 15.6% during the three months ended March 31, 2021 to 5.1% during the same period in 2022.

Further, Renin’s efforts to mitigate its increase in costs have had and may have other negative impacts on Renin’s operations. In particular, the combination of higher inventory levels and the increased time between its purchase of inventory and receipt of payments from customers negatively impacted its liquidity and required it to obtain a temporary increase in the availability under its credit facility with TD Bank in July 2021, as further described below. In addition, although the increase in product and shipping costs is impacting the entire industry, generally resulting in an overall increase in prices, the negotiation of increased prices with customers increases the risk that customers will pursue alternative sources for Renin’s products, which may result in Renin losing customers or require it to lower prices in an effort to retain customers. Further, while Renin is generally seeking to diversify its supply chain and limit its exposure to specific geographic locations and suppliers, supply chain delays and the scarcity of products and raw materials ~~from China. As~~have made this difficult.

Further, although Renin’s manufacturing and distribution facilities remained open throughout the COVID-19 pandemic, worker shortages as a result ~~disruptions~~of COVID-19 or otherwise may also result in ~~its supply chain~~the closure of facilities or cause such facilities to operate below capacity. Additionally, while consumer demand for Renin’s products generally remained strong throughout the COVID-19 pandemic, Renin has recently observed a decline in consumer demand, which Renin believes may be attributable to (i) the impact of price increases and overall inflationary pressures on consumer behavior and (ii) a shift in consumer spending away from ~~China~~home improvements as many portions of the economy reopen, particularly in the United States, and Renin’s sales may be further impacted by changes in consumer demand as a result of various factors, including ~~increased tariffs or closures or delays in~~a potential recessionary environment resulting from the ~~supply chain, could have a material impact~~impacts of rising interest rates on ~~Renin’s cost of product and ability to meet customer demand.~~market conditions.

~~Acquisition of Colonial Elegance~~

In October 2020, Renin acquired substantially all of the assets and assumed certain of the liabilities of Colonial Elegance Inc. (“Colonial Elegance”). Colonial Elegance, which is headquartered in Montreal, Canada, is a supplier and distributor of building products, including barn doors, closet doors, and stair parts, and its customers include various big box retailers in the United States and Canada which are complementary to and expand Renin’s existing customer base. Renin believes the acquisition of Colonial Elegance will establish Renin as a leader in barn doors and closet doors products, support the expansion of the growing door hardware and stair parts business, and provide a promising avenue for continued growth. In addition, Renin ~~believes that the increased scale of the combined businesses will result~~would be negatively impacted by an increase in ~~better overall service and selection for~~interest rates, as its ~~customers and improved logistics and cost efficiencies for Renin.~~borrowings bear interest at variable rates.

The base purchase price for the acquisition was CAD $51.0 million (approximately USD $39.0 million) plus a payment of CAD $6.7 million (approximately USD $5.1 million) for excess working capital, with the payment for excess working capital subject to adjustment based on the final determination of the excess working capital amount delivered at closing. BBX Capital made a $5.0 million capital contribution to Renin to partially fund the acquisition, while the remainder of acquisition was funded by Renin using borrowings under its amended and restated credit facility with TD Bank, as described below.

Amendment and Restatement of TD Bank Credit Facility

In connection with the acquisition of Colonial Elegance in 2020, Renin amended and restated its credit facility with TD Bank to include a $30.0 million term loan, ~~(the “Term Loan”) and an operating loan~~increase the availability under its existing revolving line of upcredit with TD Bank to $20.0 million, ~~(the “Operating Loan”), both~~and extend the maturity of ~~which mature in~~the facility to October 2025. ~~$30.0~~

In 2021, Renin’s credit facility with TD Bank was amended to temporarily increase the availability under the revolving line of credit from $20.0 million to $24.0 million through December 31, 2022, at which time the availability under the line of credit was to revert to $20.0 million and any amounts outstanding in excess of $20.0 million was to be repaid by Renin. The amendments to the credit facility also (i) waived the requirement for Renin to comply with certain ratios included in the financial covenants of the facility, (ii) temporarily increased the maximum total leverage ratio included in the financial covenants of the facility through December 31, 2022, (iii) modified the calculation of the maximum total leverage ratio, and (iv) included an additional financial covenant related to Renin meeting certain minimum levels of specified operating results from November 2021 through December 2022. Further, the amendments prohibited Renin from making distributions to BBX Capital through December 31, 2022. On January 1, 2023, the financial covenants under the facility and Renin’s ability to make distributions to the Company were to revert to the requirements under the facility prior to the amendments in 2021.

However, as Renin was not in compliance with certain financial covenants under the facility from January through March 2022, Renin’s credit facility with TD Bank was further amended on May 9, 2022 to (i) require $13.5 million of ~~proceeds~~funding from ~~the Term Loan and approximately $8.0~~BBX Capital to provide Renin funds to prepay $10.0 million of ~~borrowings under~~ the ~~Operating Loan were used~~term loan and to ~~fund most~~provide additional working capital to Renin of $3.5 million, (ii) waive compliance with the maximum total leverage ratio and fixed charge coverage ratio included in the financial covenants of the ~~purchase price~~facility until December 31, 2022, (iii) waive compliance with the financial covenant requiring Renin to meet certain minimum levels of specified operating results for January through March 2022, (iv) adjust the required minimum levels of specified operating results through December 31, 2022 beginning in April 2022, and ~~excess working capital payment related~~(v) amend the modification period to the ~~acquisition. Amounts~~later of December 31, 2022 or upon Renin’s compliance with specified financial covenant ratios. The amendment also increased the interest rates on amounts outstanding under the ~~Term Loan~~term loan and ~~Operating Loan bear interest at~~revolving line of credit during the modification period to (i) the Canadian Prime Rate plus a spread ~~between 1.375% to 1.875%~~of 3.375% per annum, (ii) the United States Base Rate plus a spread ~~between 1.00% to 1.50%~~of 3.00% per annum, or (iii) ~~LIBOR~~Term SOFR or Canadian ~~Bankers~~Bankers’ Acceptance Rate ~~in each case~~ plus a spread ~~between 2.875%~~of 4.875% per annum. Under the terms of the amendment, the Term SOFR Rate for loans with one to ~~3.375%~~six-months terms are also subject to an additional credit spread adjustment of 10 to 25 basis points per ~~annum,~~annum. Renin issued a $13.5 million promissory note to BBX Capital upon execution of the amendment on May 9, 2022, and pursuant to the terms of the amendment, BBX Capital funded $8.5 million of the note to Renin in May 2022 and expects to fund the remaining $5.0 million of the note to Renin prior to May 31, 2022. BBX Capital and Renin entered into a subordination, assignment, and postponement agreement with TD Bank that requires all present and future loans or advances (including the $13.5 million promissory note) from BBX Capital to Renin be subordinated and postponed until the TD Bank credit facility has been paid or satisfied in full.

If the factors described above, including inflationary and cost pressures, labor shortages, and supply chain disruptions, continue to have a material negative impact on Renin’s operating results and financial condition, Renin may again fall out of compliance with the ~~spreads applicable to each rate depending on the Renin’s total leverage. In addition to ongoing payments~~terms of interest under the Term Loan and Operating Loan, the Term Loan requires quarterly payments of principal based on a stated percentage of the original principal amount of $30.0 million, with approximately 37.5% of the original principal amount due at maturity in October 2025.

~~See Note 18 to the Company’s~~ ~~condensed consolidated~~ ~~financial statements included in Item 1 of this report for additional information with respect to Renin’s acquisition of Colonial Elegance and~~ its ~~amended and restated~~outstanding credit facility with TD ~~Bank, including BBX Capital’s pledge~~Bank. If Renin falls out of compliance and is unable to obtain additional waivers or modifications of the facility, Renin may lose availability under its line of credit, be required to provide additional collateral, or repay all or a portion of its ~~membership interest~~borrowings, any of which would have a material adverse effect on the Company’s liquidity, financial position, and results of operations.

The risks and uncertainties associated with the matters described above, as well as those described in ~~Renin.~~the Company’s 2021 Annual Report, could have a material adverse impact on Renin’s results of operations, cash flows, and financial condition in future periods.

Results of Operations

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




	For the Three Months Ended March 31,
	2022		2021		Change
Trade sales	$	33,488		38,691		(5,203)
Cost of trade sales		(31,774)		(32,656)		882
Gross margin		1,714		6,035		(4,321)
Interest expense		(566)		(410)		(156)
Selling, general and administrative expenses		(4,660)		(4,304)		(356)
Total operating (loss) income		(3,512)		1,321		(4,833)
Other expense		—		—		—
Foreign exchange loss		(189)		(480)		291
(Loss) income before income taxes	$	(3,701)		841		(4,542)
Gross margin percentage	%	5.12		15.60		(10.48)
SG&A as a percent of trade sales	%	13.92		11.12		2.80
Expenditures for property and equipment	$	270		237		33
Depreciation and amortization	$	819		631		188
Debt accretion and amortization	$	32		12		20

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2020

2019

Change

2020

2019

Change
Trade sales

$
19,662

16,442

3,220

54,283

51,124

3,159
Cost of trade sales

(15,927)

(12,983)

(2,944)

(44,054)

(40,989)

(3,065)
Gross margin

3,735

3,459

276

10,229

10,135

94
Selling, general and administrative expenses

2,135

2,849

(714)

6,788

8,326

(1,538)
Total operating profits

1,600

610

990

3,441

1,809

1,632
Other (expense) revenue

—

—

—

(3)

152

(155)
Interest expense

(53)

(131)

78

(238)

(387)

149
Foreign exchange (loss) gain

(58)

1

(59)

214

(23)

237
Income before income taxes

$
1,489

480

1,009

3,414

1,551

1,863
Gross margin percentage

%
19.00

21.04

(2.04)

18.84

19.82

(0.98)
SG&A as a percent of trade sales

%
10.86

17.33

(6.47)

12.50

16.29

(3.78)

Renin’s ~~income~~loss before income taxes for the three months ended ~~September 30, 2020~~March 31, 2022 was ~~$1.5~~$3.7 million compared to ~~$0.5~~$0.8 million of income during the same ~~2019~~2021 period. The ~~increase~~decrease was primarily due to the following:

A decrease in Renin’s sales as compared to the same period in 2021 primarily as a result of (i) backordered inventory resulting from supply chain disruptions, (ii) delays in shipments to customers due to ongoing price negotiations, (iii) disruptions in shipping and facilities associated with inclement weather and restrictions on business operations as a result of COVID-19 in January 2022, and (iv) one of Renin’s major customers discontinuing its purchase of certain products from Renin in late 2021;

A decrease in Renin’s gross margin percentage primarily as a result of increased costs of shipping and raw materials;

An increase in interest expense associated with higher amounts outstanding on Renin’s credit facility with TD Bank in order to fund higher working capital balances and an increase in interest rates; and

An increase in ~~Renin’s trade sales resulting primarily from a net increase in sales to customers in its retail and commercial channels; and~~

A decrease in selling, general and administrative expenses primarily due to lower marketing, travel, and trade show expenses as a result of travel restrictions associated with the COVID-19 pandemic and lower consulting expenses related to costs incurred in 2019 associated with the procurement of raw materials; partially offset by

~~A decrease in Renin’s gross margin percentage which primarily resulted from increased costs related to the shipment of products and raw materials largely due to the COVID-19 pandemic.~~

~~Renin’s income before income taxes for the nine months ended September 30, 2020 was $3.4 million compared to $1.6 million during the same 2019 period. The increase was primarily due to reduced~~ selling, general, and administrative expenses ~~as described above, including lower marketing, travel, and trade show expenses as a result of travel restrictions~~primarily due to accrued severance expense associated with ~~the COVID-19 pandemic~~a former executive; higher labor costs and ~~lower consulting expenses. For the nine months ended September 30, 2020,~~professional fees; partially offset by

A decrease in foreign currency exchange losses due to the impact of ~~higher shipping costs on Renin’s gross margin percentage was partially offset by~~changes in foreign exchange rates between the ~~impact of wage subsidies received for employees in its~~U.S. dollar and Canadian ~~manufacturing facility during the second quarter of 2020 as a result of the COVID-19 pandemic.~~dollar.

~~Other~~

Other

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

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2022 and 2021, the Company recognized ~~$2.7~~income before income taxes related to these other businesses of $0.5 million and $0.8 million, respectively. During the three months ended March 31, 2021, the Company reversed $0.3 million of ~~impairment losses related~~rent expense as a result of rent abatements obtained due to ~~certain of these investments primarily resulting from~~ the effects of the COVID-19 pandemic on the ~~estimated value of the businesses.~~restaurant located in South Florida.

‎

Reconciling Items and Eliminations

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

~~BBX Capital’s corporate general and administrative expenses; and~~

~~Interest income on interest-bearing cash accounts~~

BBX Capital’s corporate general and administrative expenses;

Interest income on the note receivable from Bluegreen Vacations;

Interest income on interest-bearing cash accounts; and

49Interest expense capitalized in connection with the development and construction of real estate.

Corporate General and Administrative Expenses

~~Through September 30, 2020,~~BBX Capital’s corporate general and administrative expenses for the three months ended March 31, 2022 and 2021 were $5.6 million and $3.8 million, respectively. During the three months ended March 31, 2022 and 2021, BBX Capital’s corporate general and administrative expenses consisted ~~primarily of an allocation~~ of the ~~cost~~costs of ~~services provided by BVH to the Company for~~ various support functions, including executive compensation, legal, accounting, human resources, investor relations, and executive offices. The ~~cost allocation from BVH to BBX Capital’s~~increase in corporate general and administrative expenses for the three months ended September 30, 2020 and 2019 were $4.8 million and $5.4 million, respectively, and $12.7 million and $16.7 million, respectively for the nine months ended September 30, 2020 and 2019. The decrease in the cost allocation for corporate general and administrative expenses for the 2020 period asMarch 31, 2022 compared to the same ~~2019~~ period ~~primarily reflects the allocation of~~in 2021 reflect higher executive compensation, including $0.8 million in share based compensation expense ~~related to BVH’s Chief Executive Officer~~from restricted stock awards granted in January 2022.

Interest Income

BBX Capital’s interest income for the three months ended March 31, 2022 and ~~Chief Financial Officer to~~ 2021 was $0.6 million and $1.2 million, respectively, which includes (i) $0.8 million and $1.1 million, respectively, of interest income from its note receivable from Bluegreen asVacations and (ii) the elimination of interest income recognized by a ~~result of their expanded roles at Bluegreen in the 2020 periods, which resulted in lower executive compensation expenses incurred directly by BVH, as well as an updated estimate~~wholly-owned subsidiary of the ~~allocation of annual executive bonus expenses expected~~Company relating to ~~be paid in cash and stock.~~the credit facility provided to IT’SUGAR.

Provision for Income Taxes

The Company estimates its effective annual income tax rate on a quarterly basis based on current and forecasted operating results for the annual period and applies the estimated effective income tax rate to its income or loss before income taxes reduced by net income or loss attributable to noncontrolling interests in joint ventures taxed as partnerships. In addition, the Company recognizes taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior period as discrete items in the interim period in which the event occurs.

The Company’s effective income tax rate was approximately ~~17%~~32% and 29% during the three months ended ~~September 30, 2020~~March 31, 2022 and ~~2019, respectively, and 22% and 29% during the nine months ended September 30, 2020 and 2019,~~2021, respectively. The Company’s effective income tax ~~rate~~rates for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2022 and ~~2019 was~~2021 were impacted by the Company’s nondeductible executive compensation ~~allocated from BVH~~ and state income taxes. ~~The effective income tax rate for the 2020 period reflects a current estimated ordinary taxable loss for the year ended December 31, 2020 resulting primarily from the effects of the COVID-19 pandemic.~~

~~Discontinued Operations~~

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

The Company recognized a pre-tax loss from discontinued operations of $0.1 million during the nine months ended September 30, 2020 and pre-tax losses from discontinued operations of $4.8 million and $9.5 million during the three and nine months ended September 30, 2019. The pre-tax losses during the three and nine months ended September 30, 2019 were primarily attributable to operating losses associated with FFTRG’s MOD Pizza restaurant locations, including costs incurred in connection with the opening of two restaurant locations and the recognition of impairment losses of $4.0 million and $6.7 million during the three and nine months ended September 30, 2019 primarily associated with the closing of locations and the termination of the MOD Pizza area development and franchise agreements.

Net Income or Loss Attributable to Noncontrolling Interests

Through September 22, 2020, the Company’s condensed consolidated financial statements included the results of operations and financial position of IT’SUGAR, a partially-owned subsidiary in which it held a controlling financial interest, and as a result, the Company was previously required to attribute net income or loss to the noncontrolling interest in IT’SUGAR. As a result of the filing of the Bankruptcy Cases by IT’SUGAR and its subsidiaries, the Company deconsolidated IT’SUGAR as of September 22, 2020 and derecognized the related noncontrolling interest in IT’SUGAR. On June 17, 2021, the Company reconsolidated IT’SUGAR as a result of IT’SUGAR’s subsequent emergence from bankruptcy and again recognized the noncontrolling interest in IT’SUGAR. As IT’SUGAR is a partially-owned subsidiary, BBX Capital is required to attribute income or loss to the noncontrolling interest in IT’SUGAR during the periods in which IT’SUGAR is consolidated in the Company’s financial statements. As a result, during the three months ended March 31, 2021, IT’SUGAR’s activities are not included in the Company’s attribution of income or loss to noncontrolling interests, but during the three months ended March 31, 2022, the Company attributed a loss related to IT’SUGAR activities to the noncontrolling interest in IT’SUGAR.

~~Net~~The net loss attributable to noncontrolling interests ~~was $0.5 million and $4.8~~of $0.1 million during the three ~~and nine~~ months ended ~~September 30, 2020 compared~~March 31, 2022 reflects income attributed to ~~$0.1 million~~a 19% noncontrolling equity interest in a restaurant the Company acquired through foreclosure and ~~$0.2 million for~~ the ~~comparable 2019 periods.~~aforementioned noncontrolling interest in IT’SUGAR. The ~~increase in the~~ net ~~loss~~income attributable to noncontrollinginterests ~~for~~of $0.1 million during the three ~~and nine~~ months ended ~~September 30, 2020 as compared to~~March 31, 2021 was income associated with the ~~same 2019 periods was primarily due to increased operating losses at IT’SUGAR, including~~19% noncontrolling equity interest in the ~~recognition of impairment losses related to its goodwill and long lived assets.~~restaurant.

‎

Consolidated Cash Flows

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



	For the Nine Months Ended September 30,				For the Three Months Ended March 31,
	2020		2019		2022		2021
Cash flows (used in) provided by operating activities	$	(7,736)		21,372	$	(8,352)		3,790
Cash flows (used in) provided by investing activities		(6,434)		39,050
Cash flows provided by (used in) investing activities						3,706		(1,778)
Cash flows provided by (used in) financing activities		89,725		(58,038)		1,233		(4,242)
Net increase in cash, cash equivalents and restricted cash	$	75,555		2,384
Net decrease in cash, cash equivalents and restricted cash					$	(3,413)		(2,230)
Cash, cash equivalents and restricted cash at beginning of period		21,287		30,082		119,045		90,387
Cash, cash equivalents and restricted cash at end of period	$	96,842		32,466	$	115,632		88,157

Cash Flows from Operating Activities

The Company’s cash ~~used in~~from operating activities ~~increased~~decreased by ~~$29.1~~$12.1 million during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2022 compared to the same ~~2019~~2021 period primarily due to ~~lower distributions from unconsolidated real estate joint ventures and increased operating losses as a result of the impacts of the COVID-19 pandemic, including a decline~~an increase in trade ~~sales primarily reflecting the closure of BBX Sweet Holdings’ retail locations and subsequent impact on consumer demand, partially offset by higher~~inventory balances, lower sales of real estate inventory by BBXRE ~~during the 2020 period as compared to the 2019 period.~~and higher operating losses at Renin and BBX Sweet Holdings, partially offset by a higher return on investments of unconsolidated real estate joint ventures.

Cash Flows from Investing Activities

The Company’s cash ~~used in~~from investing activities increased by ~~$45.5~~$5.5 million during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2022 compared to the same ~~2019~~2021 period primarily due to ~~lower distributions from unconsolidated real estate joint ventures and decreased~~higher proceeds from the ~~sale~~sales of real estate ~~partially offset by~~and property and equipment, lower investments in unconsolidated real estate joint ventures, partially offset by lower returns of investments in unconsolidated real estate joint ventures, and ~~a decline in~~higher purchases of property and equipment.

Cash Flows from Financing Activities

The Company’s cash ~~provided by~~from financing activities increased by ~~$147.8~~$5.5 million during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2022 compared to the same ~~2019~~2021 period ~~which was~~ primarily due to ~~higher~~an increase in net ~~transfers from Parent in~~borrowings and the ~~2020~~repurchase of $1.7 million of Class A Common Stock during the 2021 period.

Seasonality

BBX Sweet Holdings’ businesses are subject to seasonal fluctuations in trade sales, which ~~cause~~causes fluctuations in BBX Sweet Holdings’ quarterly results of operations. Historically, IT’SUGAR has generated its strongest retail trade sales during the months from June through August, as well as during the month of December, when families are generally on ~~vacation.~~vacation, while BBX Sweet Holdings’ other operating businesses ~~historically generated~~generally generate their strongest trade sales during the fourth quarter in connection with various holidays in the United States. Due primarily to the closures of IT’SUGAR’s retail locations as a result of COVID-19 pandemic and the reduction in consumer demand and families on vacation, BBX Sweet Holdings and IT’SUGAR experienced significantly decreased sales in the second and third quarters of 2020. As a result of the filing of the Bankruptcy Cases by IT’SUGAR, IT’SUGAR’s sales and results of operations will not be included in the Company’s condensed consolidated statement of operations subsequent to September 22, 2020.

Commitments

The Company’s material commitments as of ~~September 30, 2020~~March 31, 2022 included the required payments due on notes payable and other borrowings and commitments under non-cancelable operating leases.

The following table summarizes the contractual minimum principal and interest payments required on the Company’s outstanding debt and payments required on the Company’s non-cancelable operating leases by period due date as of ~~September 30, 2020~~March 31, 2022 (in thousands):




	Payments Due by Period												Payments Due by Period
									Unamortized												Unamortized
									Debt												Debt
	Less than		1 — 3		4 — 5		After 5		Issuance				Less than		1 — 3		4 — 5		After 5		Issuance
Contractual Obligations (1)	1 year		Years		Years		Years		Costs		Total		1 year		Years		Years		Years		Costs		Total
Notes payable and other borrowings	$	5,311		850		2,529		28,261		(951)		36,000
Notes payable and other borrowings ⁽²⁾													$	12,361		10,362		28,280		5,130		(558)		55,575
Noncancelable operating leases		727		4,788		3,305		6,168		—		14,988		14,791		37,781		30,526		38,904		—		122,002
Foreign supplier dispute settlement														2,025		—		—		—		—		2,025
Purchase an additional 40% interest in the Altman Companies⁽³⁾														—		9,400		—		—		—		9,400
Total contractual obligations		6,038		5,638		5,834		34,429		(951)		50,988		29,177		57,543		58,806		44,034		(558)		189,002
Interest Obligations (2)
Interest Obligations ⁽⁴⁾
Notes payable and other borrowings		1,939		4,264		4,094		27,449		—		37,746		1,625		4,080		2,030		4,013		—		11,748
Total contractual interest		1,939		4,264		4,094		27,449		—		37,746		1,625		4,080		2,030		4,013		—		11,748
Total contractual obligations	$	7,977		9,902		9,928		61,878		(951)		88,734	$	30,802		61,623		60,836		48,047		(558)		200,750

~~(1)~~

Does not include BBXRE’s obligation under the Altman Companies’ operating agreement to purchase an additional 40% equity interest in January 2023 for a purchase price, subject to certain adjustments, of $9.4 million. In addition, does not include contractual obligations of IT’SUGAR, which is no longer consolidated by the Company as a result of its filing of the Bankruptcy Cases on September 22, 2020.

~~(2)~~

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

~~Off-balance-sheet Arrangements~~

~~BBX Capital guarantees~~(1)The above table excludes certain ~~obligations of its wholly-owned subsidiaries and unconsolidated real estate joint ventures as described in further detail in Note 10 to~~additional amounts that the ~~Company’s condensed consolidated financial statements included in Item 1 of this report.~~

~~The~~ Company ~~has investments in joint ventures involved~~may invest in the ~~development of multifamily rental apartment communities, as well as single-family master planned for sale housing communities. The Company’s investments in these~~Altman Companies or its sponsored joint ~~ventures are primarily accounted for~~ventures.

(2)Obligations under the equity method of accounting, and as a result, the Company does not recognize the assets and liabilities of these joint ventures in its financial statements. As of September 30, 2020 and December 31, 2019, the Company’s investments in these joint ventures totaled $60.6 million and $57.3 million, respectively. These unconsolidated real estate joint ventures generally finance their activities with a combination of debt financing and equity. The Company generally does not directly guarantee the financing of these joint ventures, other than as described in Note 5 to the Company’s condensed consolidated financial statements included in Item 1 of this report, and the Company’s maximum exposure to losses from these joint ventures is its equity investment. The Company is typically not obligated to fund additional capital to its joint ventures; however, the Company’s interest in a joint venture may be diluted if the Company elects not to fund a joint venture capital call.

The Company owns all of IT’SUGAR’s Class A Preferred Units and 90.4% of its Class B Common Units and accounts for its $18.9 million investment in and advances to IT’SUGAR at cost. Although the Company is not obligated to finance the activities of IT’SUGAR in bankruptcy, in October 2020, a subsidiary of the Company entered into a $4.0 million Debtor-in-PossessionRenin’s credit facility with ~~IT’SUGAR~~TD Bank are presented based on the scheduled principal payments and stated maturity date of October 2025 currently contemplated in the loan agreement. If Renin falls out of compliance with certain financial loan covenants and is unable to obtain additional waivers or modifications to the facility, Renin may be required to repay all or a portion of its borrowings, which would have a material adverse effect on the Company’s liquidity, financial position, and results.

(3)Subject to certain adjustments, including, but not limited to, reimbursements for excess working capital and predevelopment expenditures incurred at the time of purchase.

(4)Assumes that the scheduled minimum principal payments are made in accordance with the table above and the ~~Company may advance additional funds to IT’SUGAR in order to maintain its ownership interest. In~~interest rate on variable rate debt remains the ~~future,~~same as the ~~Company may decide not to advance additional funds to IT’SUGAR in bankruptcy, if needed, which could dilute the Company’s investment in IT’SUGAR and result in additional impairment charges.~~rate at March 31, 2022.

Liquidity and Capital Resources

As of ~~September 30, 2020,~~March 31, 2022, the Company had cash, cash equivalents, and short-term investments of approximately ~~$96.6~~$118.7 million. Management believes that the Company has sufficient liquidity to fund operations, including anticipated working capital, capital expenditure, and debt service requirements, and respond to the challenges related to the COVID-19 pandemic, inflationary trends, increased interest rates, and the current economic environment for the foreseeable future, subject to mitigation and cost reduction efforts and management’s determination of whether and/or the extent to which it will fund the operations and commitments of its subsidiaries. As ~~discussed in this report, the Company~~previously disclosed, management has ~~sought to take various mitigating measures to manage through the current challenges resulting from the COVID-19 pandemic, including cost~~evaluated and ~~capital expenditure reductions at its subsidiaries. However, management is continuing~~will continue to evaluate the potential operating deficits, commitments, and liquidity requirements of its subsidiaries ~~as a result of the impact of the COVID-19 pandemic~~ and may determine not to provide additional funding or capital to subsidiaries whose operations it believes may not be sustainable ~~including~~or do not support additional ~~debtor-in-possession funding to IT’SUGAR during the Bankruptcy Court proceedings.~~investment.

The Company’s principal sources of liquidity have historically been its available cash and short-term investments, distributions from unconsolidated real estate joint ventures, and proceeds received from sales of real estate, including lot sales at the Beacon Lake Community ~~development, and contributions from BVH. However,~~development.

In addition to the ~~COVID-19 pandemic has impacted and resulted in uncertainty regarding many of these~~above sources of liquidity, and as a result of the spin-off of BBX Capital from BVH, the Company will no longer receive capital contributions from BVH. The Company believes that its primary source of liquidity for the foreseeable future will be its available cash, cash equivalents, and short-term investments.

~~In addition,~~ the Company expects to receive quarterly interest payments on the ~~$75.0 million~~ promissory note that was issued by ~~BVH~~Bluegreen Vacations in favor of BBX Capital in connection with the ~~spin-off.~~ spin-off of the Company. The original principal amount of the note was $75.0 million; however, in December 2021, Bluegreen Vacations prepaid $25.0 million of the principal balance, reducing the outstanding balance to $50.0 million.Amounts outstanding under the note accrue interest at a rate of 6% per annum, with interest payments scheduled to occur on a quarterly basis. However, ~~BVH~~Bluegreen Vacations may elect to defer such quarterly interest payments, with interest on the entire outstanding balance thereafter to accrue at a cumulative, compounded rate of 8% per annum until such time as ~~BVH~~Bluegreen Vacations is current on all accrued payments under the note, including deferred interest. All outstanding amounts under the note will become due and payable on September 30, 2025 or earlier upon certain other events. Bluegreen Vacations is permitted to prepay the note in whole or in part at any time.

The Company believes that its current financial condition will allow it to meet its anticipated near-term liquidity needs. The Company may also seek additional liquidity from outside sources, including traditional bank financing, secured or unsecured indebtedness, or the issuance of equity and/or debt securities. However, these alternatives may not be available to the Company on attractive terms, or at all. The inability to raise any needed funds through the sources discussed above would have a material adverse effect on the Company’s business, results of operations, and financial condition.

Anticipated and Potential Liquidity Requirements

The Company ~~has historically used~~currently expects to use its available ~~funds for~~liquidity to fund operations ~~and general~~(including corporate ~~purposes (including~~expenses, working capital, capital expenditures, debt service requirements, and the Company’s other commitments described above), and make additional investments in real estate, ~~opportunities,~~its existing operating businesses, or other opportunities, or make distributions to BVH. While the Company will continue to evaluate opportunistic investments, the Company currently expects to use its available funds primarily for operations and general corporate purposes and to fund operating deficits resulting from the COVID-19 pandemic.opportunities. However, as discussed above, the Company’s management intends to evaluate ~~the~~any operating deficits, commitments, and liquidity requirements of its subsidiaries as a result of the impact of the COVID-19 pandemic, ~~on operations~~inflationary trends, higher interest rates, and general economic conditions and may make a determination that it will not provide additional funding or capital to ~~certain~~its subsidiaries.

BBX Capital

In January 2022, the Board of ~~its subsidiaries.~~Directors approved a share repurchase program which authorizes the repurchase of up to $15.0 million of shares of the Company’s Class A and Class B Common Stock. The repurchase program authorizes the Company, in management’s discretion, to repurchase shares from time to time subject to market conditions and other factors. The timing, price, and number of shares which may be repurchased under the program in the future will be based on market conditions, applicable securities laws, and other factors considered by management. Share repurchases under the program may be made from time to time through solicited or unsolicited transactions in the open market or in privately negotiated transactions. The share repurchase program does not obligate the Company to repurchase any specific amount of shares and may be suspended, modified, or terminated at any time without prior notice. There were no share repurchases during the three months ended March 31, 2022.

BBX Capital Real Estate

In November 2018, BBXRE acquired a 50% membership interest in the Altman Companies, a joint venture between BBXRE and Joel Altman engaged in the development, construction, and management of multifamily apartment communities. Although the Altman Companies generates revenues from the performance of development, general contractor, leasing, and property management services to the joint ventures that are formed to invest in the development projects that it originates, it is expected that any profits generated for BBXRE and Joel Altman would primarily be through the equity distributions that BBXRE and Joel Altman receive through their investment in the managing member of such joint ventures. Therefore, as the timing of any such distributions to BBXRE and Joel Altman is generally contingent upon the sale or refinancing of a completed development project, it is anticipated that BBXRE and Joel Altman will be required to contribute capital to the Altman Companies for its ongoing operating costs and predevelopment expenditures, as well as to the managing member of newly formed joint ventures. ~~At the current time,~~ BBXRE currently anticipates that it will invest approximately ~~$0.5~~$7.0 million to ~~$1.0~~$9.0 million in the Altman Companies and certain related joint ventures during the remainder of ~~2020 relating to~~2022 for planned predevelopment expenditures, ongoing operating costs, and potential operating shortfalls related to certain projects. ~~Furthermore, if~~Further, based on its current pipeline of new potential development projects and certain existing development projects for which the equity contributions to the joint ventures are expected to be funded over time, BBXRE currently estimates that it may invest in excess of $10.0 million in the managing member of newly formed joint ventures during the remainder of 2022; however, the timing of the commencement of such projects and the pace of development may result in such estimated investments being made

in 2023 or a later period. As previously disclosed, BBXRE may also consider opportunistically making increased equity investments in one or more new projects originated by the Altman

~~Companies closes on development financing for additional projects,~~ Companies. Furthermore, BBXRE currently expects that it ~~would be required to~~will contribute an estimated additional $1.25 million to ABBX Guaranty, LLC, a joint venture between BBXRE and Joel Altman that provides guarantees on the indebtedness and construction cost overruns of new real estate joint ventures formed by the Altman ~~Companies. However, at this time, the COVID-19 pandemic has resulted~~Companies, in uncertainty in the ability of the Altman Companies to close on the capital necessary to commence the construction of new projects for the foreseeable future, and an additional contribution to ABBX Guaranty, LLC is not anticipated to occur until 2021.2022.

Pursuant to the operating agreement of the Altman Companies, BBXRE ~~will also~~is required to acquire an additional 40% equity interest in the Altman Companies from Joel Altman for a purchase price of $9.4 million, subject to certain adjustments, in January ~~2023, while~~2023. Joel Altman can also, at his option or in other predefined circumstances, require BBXRE to purchase his remaining 10% equity interest in the Altman Companies for $2.4 million. In addition, in certain circumstances, BBXRE may acquire the 40% membership interests in the affiliated Altman-Glenewinkel Construction that are not owned by the Altman Companies for a purchase price based on prescribed formulas in the operating agreement of Altman-Glenewinkel Construction.

In addition to ~~BBXRE’s anticipated~~ investments in the Altman Companies and related joint ventures, BBXRE currently expects to invest $6.0 million to $8.0 million in its logistics real estate division during the remainder of 2022 for planned predevelopment expenditures and ongoing operating costs. In addition, if the division ultimately commences the development of warehouse and logistics facilities, BBXRE expects that it will seek to develop such projects through joint ventures with third party investors and that it will invest in the managing member of the joint ventures formed to invest in such development projects. Accordingly, if such joint ventures are formed to invest in these projects, BBXRE expects that it will be reimbursed for previously incurred predevelopment expenditures by such ventures. Further, in the event that BBXRE closes on development financing for such projects, BBXRE currently expects that it would be required to contribute at least $5.0 million to a wholly-owned subsidiary that will provide guarantees on the indebtedness for the funded projects.

BBXRE has entered into ~~two~~agreements to acquire three land parcels for the purpose of developing logistics facilities for an aggregate purchase price of $40.1 million. These agreements are subject to the successful completion of due diligence, and the escrowed deposits paid by BBXRE in connection with the agreements are refundable until the end of the due diligence period. As indicated above, if BBXRE moves forward with any or all of these projects, BBXRE expects that it will develop the projects through joint ventures with third party investors and it will assign the agreements to the applicable joint ventures.

The operating agreements of certain of real estate joint ventures ~~CCB Miramar, LLC and L03/212 Partners, LLC,~~ in which BBXRE is an investor contain customary buy-sell provisions which could result in either the sale of BBXRE’s interest or the use of available cash to acquire the partner’s interest, and the Company’s commitments and liquidity requirements described above do not include amounts that the Company could pay as a result of the initiation of these provisions.

BBX Sweet Holdings

IT’SUGAR currently expects to ~~contribute additional~~incur in excess of $10.0 million of capital ~~of approximately $1.5 million~~expenditures during the ~~next twelve~~remainder of 2022 to ~~twenty-four months based on the current plans and estimates~~fund construction costs associated with new retail locations and the ~~related development projects.~~expansion of existing retail locations. BBX Capital has loaned $4.0 million to IT’SUGAR to partially fund such capital expenditures and currently expects that it will loan up to an additional $3.0 million to IT’SUGAR during the remainder of 2022.

~~Subsequent to September 30, 2020,~~Renin

During the ~~Company~~year ended December 31, 2021, BBX Capital contributed ~~$5.0~~$15.0 million to Renin to ~~partially fund~~provide additional liquidity for working capital. Further, BBX Capital invested $8.5 million in Renin in May 2022 and expects to invest an additional $5.0 million in Renin prior to May 31, 2022. BBX Capital’s investments in May 2022 are being used by Renin to pay down Renin’s ~~acquisition~~term loan with TD Bank by $10.0 million and to provide additional liquidity for working capital requirements. The investment in Renin was necessitated primarily as a result of ~~Colonial Elegance, as further described in this report,~~the impact of global supply chain disruptions, the increased costs of Renin’s operations, and the ~~Company will continue to evaluate opportunistic investments which may involve~~resulting impact on the ~~use~~covenants in Renin’s credit facility with TD Bank. Further, as a result of the resolution of a dispute between Renin and one of its ~~available cash, cash equivalents,~~suppliers, BBX Capital contributed $2.0 million to Renin in 2021 in order to fund the first half installment of the settlement payable by Renin to the supplier and ~~short-term investments.~~expects to fund an additional $2.0 million to Renin in June 2022 in order to fund the final installment of the settlement. While BBX Capital may consider providing additional funds to Renin in future periods to fund working capital and its commitments, BBX Capital’s management will evaluate the operating results, financial condition, commitments and prospects of its subsidiaries on an ongoing basis and may determine that it will not provide additional funding or capital to its subsidiaries, including Renin.

Credit Facilities with Future Availability

As of ~~September 30, 2020, Renin~~March 31, 2022, BBX Capital and certain of its subsidiaries had athe following credit ~~facility~~facilities with future availability, subject to eligible collateral and the terms of the ~~facility.~~facilities, as applicable

LOCS Credit Facility. In July 2021, BBX Sweet Holdings and certain of its subsidiaries, including Las Olas Confections and Snacks, entered into a credit agreement (the “LOCS Credit Facility”) with IberiaBank which provides for a revolving line of credit of up to $2.5 million that matures in July 2023. Amounts outstanding under the LOCS Credit Facility bear interest at the higher of the Wall Street Journal Prime Rate plus 50 basis points or 3.0% per annum, and the facility requires monthly payments of interest only, with any outstanding principal and accrued interest due at the maturity date. The LOCS Credit Facility is collateralized by a blanket lien on all of the assets of the borrowers under the facility and is guaranteed by BBX Capital. The facility contains certain financial covenants, including a minimum liquidity requirement for BBX Capital as guarantor under the facility and a requirement that the borrowers maintain a zero balance on the facility for thirty consecutive days during each calendar year during the term of the facility. As of March 31, 2022, the outstanding amount under the credit facility was $1.9 million, and the effective interest rate was 4.0%.

TD Bank Credit Facility. ~~In May 2017, Renin entered into a~~Renin’s credit facility with TD Bank ~~that was subsequently renewed in September 2019 and 2018. Under the terms and conditions~~had no availability as of ~~the credit facility, TD Bank agreed to provide term loans for up to $1.7 million and loans under a revolving line of credit for up to approximately $16.3 million subject to~~March 31, 2022.

Off-balance-sheet Arrangements

BBX Capital guarantees certain ~~terms and conditions. During the first quarter of 2020, Renin received a waiver from TD Bank~~obligations of its ~~breach of the quarterly debt service coverage ratio under the facility,~~wholly-owned subsidiaries and the credit facility was amended to replace the existing debt service coverage ratio with an interest coverage ratio. In connection with the amendment to the credit facility, Renin repaid the outstanding balance of the term loan with borrowings from the revolving line of credit. Further, i~~n July 2020, the credit facility was also amended to extend the maturity date of the facility from September 2020 to September 2022.~~ As of September 30, 2020, the outstanding amount under the revolving line of credit was $4.9 million with an effective interest rate of 3.46%. As of September 30, 2020, Renin had availability of approximately $8.3 million under the above revolving line of credit, subject to eligible collateral and the terms of the facility, as applicable. However, the potential effects of the COVID-19 pandemic on Renin’s operations could impact its ability to remain in compliance with the financial covenants under these facilities and limit the extent of availability under the facilities, including under the terms of the facilities as amended and restatedunconsolidated real estate joint ventures as described ~~below,~~ in ~~future periods.~~

~~In connection with Renin’s acquisition of Colonial Elegance~~further detail in October 2020, the credit facility with TD Bank was amended and restated to include a $30.0 million term loan (the “Term Loan”) and an operating loan of up to $20.0 million (the “Operating Loan”), with the Operating Loan serving as a continuation of the existing revolving line of credit under the prior credit facility. Both the Term Loan and Operating Loan mature in October 2025. See Note 1812 to the Company’s condensed consolidated financial statements included in Item 1 of this report.

The Company has investments in joint ventures involved in the development of multifamily rental apartment communities, as well as single-family master planned for sale housing communities. The Company’s investments in these joint ventures are accounted for under the equity method of accounting, and as a result, the Company does not recognize the assets and liabilities of these joint ventures in its financial statements. As of March 31, 2022 and December 31, 2021, the Company’s investments in these joint ventures totaled $53.7 million and $53.0 million, respectively. These unconsolidated real estate joint ventures generally finance their activities with a combination of debt financing and equity. The Company generally does not directly guarantee the financing of these joint ventures, other than as described in Note 12 to the Company’s condensed consolidated financial statements included in Item 1 of this report, ~~for additional information~~.

In October 2020, Renin incurred approximately $6.0 million in costs for the expedited shipment of products to Renin from a foreign supplier and an additional $2.0 million in costs for the expedited shipment of product displays from the same supplier. The supplier had failed to deliver both the products and displays on the contractually agreed upon delivery schedule, and Renin incurred these costs, which were significantly in excess of the shipping costs that would have been incurred had such products been delivered on schedule, based on its belief that the costs were necessary in order for Renin to meet its obligations to one of its customers. The products were committed to be sold by Renin in connection with the customer’s November 2020 holiday sale program, while the displays were required in connection

~~with the rollout of new products with the customer. Renin believes that the supplier is liable for such costs pursuant to the terms of the agreements between Renin~~ and the ~~supplier, and Renin has notified~~Company’s maximum exposure to losses from these joint ventures is its equity investment. The Company is typically not obligated to fund additional capital to its joint ventures; however, the ~~supplier that it intends to exercise~~Company’s interest in a ~~right of offset of the costs against outstanding amounts due to the supplier of approximately $6.0 million. The costs of the products and related shipping will~~joint venture may be ~~recognized in connection with sale to the customer during the fourth quarter of 2020, while the costs of the displays and related shipping will be deferred and amortized over the period in which~~diluted if the Company ~~expects~~elects not to ~~benefit from their use. Although Renin’s right of offset may reduce~~fund a portion of the shipping costs incurred related to the products and displays, the supplier may dispute Renin’s offset and seek collection for amounts otherwise due to it, and there is no assurance regarding the ultimate resolution of the matter. This matter may adversely impact Renin’s compliance with the financial covenants under its outstanding credit facility. If Renin is unable to comply with its covenants, Renin would be required to seek a waiver from the bank, and if unable to obtain a waiver, might lose availability under its line of credit, be required to provide additional collateral, or repay all or a portion of its borrowings, any of which could have a material adverse effect on the Company’s liquidity, financial position, and results.joint venture capital call.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company is exposed to market risks in the ordinary course of its business. These risks primarily include interest rate risk, commodity price risk and equity price risk. The Company’s exposure to market risk has not materially changed from what was previously disclosed in ~~its Form 10 filed with the SEC on August 27, 2020~~our 2021 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, our management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of ~~September 30, 2020~~March 31, 2022 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

~~There~~There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September 30, 2020~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

~~Except as set forth below, there~~

There have been no material changes in our legal proceedings from those disclosed in the ~~Company’s Form 10 Information Statement filed on August 27, 2020.~~“Legal Proceedings” section of our 2021 Annual Report.

Item 1A. Risk Factors

There have been no material changes in the risks and uncertainties that we face from those disclosed in the “Risk Factors” section of ~~Company’s~~our 2021 Annual Report.

Item 5. Other Information ~~Statement filed~~

As Renin was not in compliance with certain financial covenants under its credit facility with TD Bank from January through March 2022, Renin’s credit facility with TD Bank was further amended on ~~August 27, 2020.~~

~~The information presented below updates the related risk factor set forth in~~ ~~Company’s Information Statement filed on August 27, 2020.~~

~~The impact~~May 9, 2022 to (i) require $13.5 million of funding from BBX Capital to provide Renin funds to prepay $10.0 million of the ~~IT’SUGAR Bankruptcy Cases on IT’SUGAR~~term loan and ~~its business~~to provide additional working capital to Renin of $3.5 million, (ii) waive compliance with the maximum total leverage ratio and onfixed charge coverage ratio included in the ~~Company is uncertain~~financial covenants of the facility until December 31, 2022, (iii) waive compliance with the financial covenant requiring Renin to meet certain minimum levels of specified operating results for January through March 2022, (iv) adjust the required minimum levels of specified operating results through December 31, 2022 beginning in April 2022, and ~~difficult to predict.~~

~~In order to successfully exit~~(v) amend the ~~Chapter 11 Bankruptcy Cases, IT’SUGAR will need to propose, confirm and consummate a Reorganization Plan. While IT’SUGAR plans to submit a Reorganization Plan~~modification period to the ~~Bankruptcy Court in~~later of December 31, 2022 or upon Renin’s compliance with specified financial covenant ratios. The amendment also increased the ~~near future, there is no assurance that its Reorganization Plan will be confirmed. Third parties, including~~interest rates on amounts outstanding under the ~~Creditors’ Committee appointed by the United States Trustee, may object to IT’SUGAR’s Reorganization Plan or seek approval to propose~~term loan and confirm a competing Reorganization Plan. Further, if IT’SUGAR fails to file a Reorganization Plan or if the Bankruptcy Court does not confirm a Reorganization Plan filed by IT’SUGAR or by a third party, the Bankruptcy Cases could be converted to cases under Chapter 7 of the Bankruptcy Code, or the Bankruptcy Court could dismiss the Bankruptcy Cases.

There is also no assurance that IT’SUGAR’s creditors will not seek to assert claims against BBX Capital or any of its subsidiaries other than IT’SUGAR, whether or not such claims have any merit, and attempt to include assets of BBX Capital or any of its subsidiaries in the Bankruptcy Cases. In April 2020, a wholly owned subsidiary of BBX Capital Real Estate purchased the $4.3 million aggregate principal balance (plus accrued interest) of IT’SUGAR’s revolving line of credit ~~and equipment note from~~during the ~~respective lenders and subsequently advanced~~modification period to (i) the Canadian Prime Rate plus a spread of 3.375% per annum, (ii) the United States Base Rate plus a spread of 3.00% per annum, or (iii) Term SOFR or Canadian Bankers’ Acceptance Rate plus a spread of 4.875% per annum. Under the terms of the amendment, the Term SOFR Rate for loans with one to six-months terms are also subject to an additional ~~$2.0~~credit spread adjustment of 10 to 25 basis points per annum. Renin issued a $13.5 million promissory note to ~~IT’SUGAR~~BBX Capital upon execution of the amendment on May 9, 2022, and pursuant to the terms of the amendment, BBX Capital funded $8.5 million of the note to Renin in May 2022 and expects to fund the remaining $5.0 million of the note to Renin prior to May 31, 2022. BBX Capital and Renin entered into a subordination, assignment, and postponement agreement with TD Bank that requires all present and future loans or advances (including the $13.5 million promissory note) from BBX Capital to Renin be subordinated and postponed until the TD Bank credit facility has been paid or satisfied in full.

Adverse events, including inflationary and cost pressures, labor shortages, and supply chain disruptions, continue to have a material negative impact on Renin’s operating results and financial condition and may cause Renin to again fall out of compliance with the terms of its outstanding credit facility with TD Bank. If Renin falls out of compliance and is unable to obtain additional waivers or modifications to the facility, Renin may lose availability under ~~the existing~~its line of credit, ~~facility. Further, in connection with~~be required to provide additional collateral, or repay all or a portion of its borrowings, any of which would have a material adverse effect on the Chapter 11 Bankruptcy Cases, the same subsidiary of BBX Capital Real Estate provided a $4.0 million credit facility to IT’SUGAR to fund IT’SUGAR’s operations as a debtor-in-possession (the “DIP Financing”),Company’s liquidity, financial position, and a~~s of November 9, 2020, $2.0 million had been funded to IT’SUGAR under this facility.~~results.

The ~~payment by IT’SUGAR~~foregoing description of the ~~outstanding amounts under the line of credit~~Third Amendment to 2020 TD Bank Credit Facility Agreement is only a summary and ~~equipment note, as well as the DIP Financing,~~ is ~~subject~~qualified in its entirety by reference to the ~~risks inherent in the payment of creditor claims in the Bankruptcy Cases, and there is no assurance that such claims will be satisfied in~~ full ~~or at all.~~

Further, even if ITSUGAR is able to exit the Bankruptcy Cases under a Reorganization Plan proposed by IT’SUGAR, there is no assurance that any relief granted to IT’SUGAR from pre-petition obligations and renegotiated lease

~~agreements for its retained retail locations will be sufficient, in light~~text of the ~~continuing uncertainty regarding the COVID-19 pandemic and its impact on IT’SUGAR’s operations and the other risks inherent~~agreements, which is filed as Exhibit 10.1 in ~~IT’SUGAR’s business,~~Item 6 to ~~enable IT’SUGAR to profitably resume its operations and successfully implement its long-term business and growth strategies.~~this Quarterly Report.

‎

Item 6. Exhibits



Exhibit ~~31.1~~10.1		Third Amendment to 2020 TD Bank Credit Facility Agreement, dated as of May 9, 2022, by and among Renin Canada Corp., Renin US LLC, and the Toronto-Dominion Bank
Exhibit 31.1		Principal Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2		Principal Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1*		Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2*		Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive File (formatted in inline XBRL and contained in Exhibit 101)

* Exhibits furnished and not filed with this Form 10-Q.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		BBX CAPITAL, INC.

~~November 9, 2020~~May 10, 2022		By: /s/ Jarett S. Levan
		Jarett S. Levan, Chief Executive Officer
		and President

~~November 9, 2020~~May 10, 2022		By: /s/ Brett Sheppard
		Brett Sheppard, Chief Financial Officer



BBX Capital, Inc.
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Three Months Ended September 30, 2019 and 2020
(In thousands)

	Shares of							Accumulated
	Common Stock			Common				Other
	Outstanding			Stock			Additional	Comprehen-	Non-
	Class			Class		Parent	Paid-in	sive	controlling	Total
	A	B		A	B	Equity	Capital	Income	Interests	Equity
Balance, June 30, 2019	—	—	$	—	—	207,742	—	1,479	1,071	210,292
Net income excluding $82 of loss attributable to redeemable noncontrolling interest	—	—		—	—	13,612		—	(179)	13,433
Other comprehensive loss	—	—		—	—	—	—	(58)	—	(58)
Net transfers to Parent	—	—		—	—	(28,726)	—	—	—	(28,726)
Balance, September 30, 2019	—	—	$	—	—	192,628	—	1,421	892	194,941

Balance, June 30, 2020	—	—	$	—	—	242,932	—	1,203	278	244,413
Net loss excluding $484 of loss attributable to redeemable noncontrolling interest	—	—		—	—	(8,252)	—	—	(26)	(8,278)
Other comprehensive income	—	—		—	—	—	—	172	—	172
Distributions to noncontrolling interests	—	—		—	—	—	—	—	(54)	(54)
Reversal of accretion of redeemable noncontrolling interest	—	—		—	—	3,150	—	—	—	3,150
Net transfers from Parent	—	—		—	—	74,516	—	—	—	74,516
Issuance of common stock	15,624	3,694		156	37	(193)	—	—	—	—
Transfer to additional paid-in capital	—	—		—	—	(312,153)	312,153	—	—	—
Balance, September 30, 2020	15,624	3,694	$	156	37	—	312,153	1,375	198	313,919

See Notes to Condensed Consolidated Financial Statements - Unaudited



BBX Capital, Inc.
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Nine Months Ended September 30, 2019 and 2020
(In thousands)

	Shares of							Accumulated
	Common Stock			Common				Other
	Outstanding			Stock			Additional	Comprehen-	Non-
	Class			Class		Parent	Paid-in	sive	controlling	Total
	A	B		A	B	Equity	Capital	Income	Interests	Equity
Balance, December 31, 2018	—	—	$	—	—	235,415	—	1,216	899	237,530
Cumulative effect from the adoption of ASU 2016-02, net of income taxes and redeemable noncontrolling interest	—	—		—	—	(2,202)	—	—	—	(2,202)
Net income excluding $158 of loss attributable to redeemable noncontrolling interest	—	—		—	—	15,417	—	—	(7)	15,410
Other comprehensive income	—	—		—	—	—	—	205	—	205
Net transfers to Parent	—	—		—	—	(56,002)	—	—	—	(56,002)
Balance, September 30, 2019	—	—	$	—	—	192,628	—	1,421	892	194,941

Balance, December 31, 2019	—	—	$	—	—	179,681	—	1,554	1,001	182,236
Net loss excluding $4,073 of loss attributable to redeemable noncontrolling interest	—	—		—	—	(38,832)	—	—	(749)	(39,581)
Other comprehensive loss	—	—		—	—	—	—	(179)	—	(179)
Distributions to noncontrolling interests	—	—		—	—	—	—	—	(54)	(54)
Accretion of redeemable noncontrolling interest	—	—		—	—	(1,248)	—	—	—	(1,248)
Reversal of accretion of redeemable noncontrolling interest						3,150	—	—	—	3,150
Net transfers from Parent	—	—		—	—	169,595	—	—	—	169,595
Issuance of common stock	15,624	3,694		156	37	(193)	—	—	—	—
Transfer to additional paid-in capital	—	—		—	—	(312,153)	312,153	—	—	—
Balance, September 30, 2020	15,624	3,694	$	156	37	—	312,153	1,375	198	313,919

See Notes to Condensed Consolidated Financial Statements - Unaudited