INNOVATE Corp. — Director's Dealing 2014

Sep 25, 2014

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: HC2 Holdings, Inc. (HCHC)
CIK: 0001006837
Period of Report: 2014-09-22

Reporting Person: Benefit Street Partners LLC (10% Owner)
Reporting Person: Providence Equity Capital Markets L.L.C. (10% Owner)
Reporting Person: NELSON JONATHAN M (10% Owner)
Reporting Person: SALEM PAUL J (10% Owner)
Reporting Person: CREAMER GLENN M (10% Owner)
Reporting Person: Gahan Thomas (10% Owner)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2014-09-22	Series A Convertible Participating Preferred Stock	$	H	5611.5	Disposed		Common Stock (1320353)	Indirect
2014-09-22	Series A Convertible Participating Preferred Stock	$	H	2988.5	Disposed		Common Stock (703176)	Indirect
2014-09-22	Series A Convertible Participating Preferred Stock	$	H	2937.5	Disposed		Common Stock (691176)	Indirect
2014-09-22	Series A Convertible Participating Preferred Stock	$	H	962.5	Disposed		Common Stock (226471)	Indirect
2014-09-22	Series A Convertible Participating Preferred Stock	$	P	5611.5	Acquired		Common Stock (1407863)	Indirect
2014-09-22	Series A Convertible Participating Preferred Stock	$	P	2988.5	Acquired		Common Stock (749781)	Indirect
2014-09-22	Series A Convertible Participating Preferred Stock	$	P	2937.5	Acquired		Common Stock (736986)	Indirect
2014-09-22	Series A Convertible Participating Preferred Stock	$	P	962.5	Acquired		Common Stock (241481)	Indirect

Footnotes

F1: The two transactions reported in Table II above relate to an amendment to the terms of the outstanding shares of Series A Convertible Participating Preferred Stock to, among other things, reduce the initial conversion price from $4.25 per share to $4.00 per share, in each case subject to adjustment in accordance with the terms of the Series A Convertible Participating Preferred Stock. This amendment to the terms of the Series A Convertible Participating Preferred Stock is reported on this Form 4 as the cancellation of the "old" shares of Series A Convertible Participating Preferred Stock and the acquisition of "new" shares of Series A Convertible Participating Preferred Stock.

F2: The shares are held by Providence Debt Fund III L.P., Providence Debt Fund III Master (Non-US) L.P., PECM Strategic Funding L.P. and Benefit Street Partners SMA LM L.P. (collectively, the "Providence Funds"). Benefit Street Partners L.L.C. ("BSP") is the investment manager of each of Providence Debt Fund III L.P., Providence Debt Fund III Master (Non-US) L.P. and Benefit Street Partners SMA LM L.P. Providence Equity Capital Markets L.L.C. ("PECM") is the investment manager of PECM Strategic Funding L.P. Messrs. Creamer, Gahan, Nelson and Salem collectively control each of BSP and PECM through their indirect ownership of membership interests of BSP and PECM (continued in footnote 3).

F3: (continued from footnote 2) As a result, each of Messrs. Creamer, Gahan, Nelson and Salem and BSP may be deemed to share beneficial ownership of the shares held by each of Providence Debt Fund III L.P., Providence Debt Fund III Master (Non-US) L.P. and Benefit Street Partners SMA LM L.P., and each of Messrs. Creamer, Gahan, Nelson and Salem and PECM may be deemed to share beneficial ownership of the shares held by the Providence Funds, except to the extent of its or his pecuniary interest therein.

F4: The Series A Convertible Participating Preferred Stock is convertible at the option of the holder of the security and will be convertible at the option of the Company, beginning on the third anniversary of the date of issuance, in each case at the then applicable conversion rate. The conversion rate is generally determined by dividing the then applicable accrued value of a share of Series A Convertible Participating Preferred Stock by the then applicable conversion price.

F5: Represents 12,500 shares of Series A Convertible Participating Preferred Stock at the original conversion rate of approximately 235.294

F6: Represents 12,500 shares of Series A Convertible Participating Preferred Stock at the adjusted conversion rate of approximately 250.889. This adjusted conversion rate reflects the change to the conversion price described in footnote 1 above as well as the receipt on July 15, 2014 of a quarterly accreting dividend on the shares of Series A Convertible Participating Preferred Stock that is payable by means of an increase in the accrued value of each outstanding share of Series A Convertible Participating Preferred Stock.

F7: Par value $0.001 per share.