What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-12 compared with 2020-08-13 · 249 added, 200 removed, 575 unchanged (44% of the section changed)

4 unchanged sentences

(in millions, except share and per share amounts)

September 30,

CURRENT ASSETS

Accounts receivable, net of allowances of $5.7 and $4.4 as of June 30, 2020 and December 31, 2019, respectively

Accounts receivable, net of allowances of $6.2 and $4.4 as of September 30, 2020 and December 31, 2019, respectively

Inventories, net

27 unchanged sentences

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred stock, $0.0001 par value, 1,000,000 authorized and no shares outstanding at June 30, 2020

Common stock, $0.0001 par value, 29,511,359 and 7,300,000 shares issued and outstanding at June 30, 2020 and December 31, 2019

Preferred stock, $0.0001 par value, 1,000,000 authorized and no shares outstanding at September 30, 2020

Common stock, $0.0001 par value, 29,511,359 and 7,300,000 shares issued and outstanding at September 30, 2020 and December 31, 2019

Additional paid-in capital

2 unchanged sentences

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(in millions, except share and per share amounts)

13 unchanged sentences

Total general and administrative expenses

Income (loss) from operations

(Loss) income from operations

Other income (expense)

1 unchanged sentence

Interest expense – other

Change in fair market of warrants

Loss on extinguishment of debt

Total other income (expense)

(Loss) income before taxes

Loss before taxes

Income tax benefit

Net (loss) income

Basic and diluted (loss) income per share

Net income (loss)

Basic and diluted income (loss) per share

Basic and diluted weighted average common shares outstanding

3 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIT)

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

(amounts in millions, except share amounts)

2 unchanged sentences

Equity (Deficit)

Balance at March 31, 2020

Opening deferred tax liabilities under reverse recapitalization

Balance at June 30, 2020

Disgorgement of short swing profits

Share based compensation

Repurchases of common stock

Balance at June 30, 2020

Three Months Ended June 30, 2019

Balance at September 30, 2020

Three Months Ended September 30, 2019

(amounts in millions, except share amounts)

2 unchanged sentences

Equity (Deficit)

Balance at March 31, 2019

Balance at June 30, 2019

Balance at September 30, 2019

The accompanying notes are an integral part of these consolidated financial statements.

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

(amounts in millions, except share amounts)

7 unchanged sentences

Disgorgement of short swing profits

Share based compensation

Repurchases of common stock

Balance at June 30, 2020

Six Months Ended June 30, 2019

Balance at September 30, 2020

Nine Months Ended September 30, 2019

(amounts in millions, except share amounts)

4 unchanged sentences

Balance at December 31, 2018

Balance at June 30, 2019

Balance at September 30, 2019

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(amounts in millions)

OPERATING ACTIVITIES

Adjustments to reconcile net loss to net cash flows provided by operating activities:

Adjustments to reconcile net loss to net cash flows used in operating activities:

Depreciation and amortization

1 unchanged sentence

Inventory obsolescence

Gain on sale of assets

Gain on sale of rental equipment

2 unchanged sentences

(Repayment) accrual of paid-in-kind interest

Change in fair value of warrants

Share-based payment

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Expenditures for acquisitions, net of cash acquired

Net activity on notes and land contract receivable

Net cash used in investing activities

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The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein.

Operating results for the six months ended June 30, 2020 is not necessarily indicative of the results that may be expected for the year ending December 31, 2020, and therefore, the results and trends in these interim consolidated financial statements may not be the same for the entire year.

Operating results for the nine months ended September 30, 2020 is not necessarily indicative of the results that may be expected for the year ending December 31, 2020, and therefore, the results and trends in these interim consolidated financial statements may not be the same for the entire year.

These interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes in our Registration Statement on Form S-1, filed with the U.S.

Securities and Exchange Commission (the “SEC”) on March 25, 2020 (the “Registration Statement”), from which the consolidated balance sheet amounts as of December 31, 2019 were derived.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Registration Statement on Form S-1, filed on March 25, 2020.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Registration Statement.

COVID-19 Pandemic

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Consistent with the actions taken by governmental authorities, virtually all of our sales and back office operations employees began working remotely in mid-March in order to reduce the spread of COVID-19.

Broadly, as the Company was deemed “essential” by state and local governments, our facilities were able to remain open, albeit at reduced capacity during the beginning of the second quarter.

As of June 30, 2020, all of our branches are fully operational although some of our administrative employees continued to work remotely.

Despite the Company remaining operational during the second quarter of

2020, certain segments of our c ustomer base were negatively impacted by COVID-19 and, as such, our revenues were negatively impacted as well.

To mitigate the impact of reduced revenues, the Company implemented various cost savings measures in the second quarter of 2020.

These cost savi ngs measures were temporary in nature and were minimized as increased demand for our products and services returned toward the end of the quarter.

COVID-19’s impact on our second-half 2020 financial results and beyond will depend on future developments, such as the duration and scope of the outbreak and the potential for future “shelter in place” orders that could impact our employees, customers and suppliers.

Although we’ve seen improvements as a result of the easing of various restrictions, we expect our full year 2020 results to be adversely affected by COVID-19.

Broadly, as the Company was deemed “essential” by state and local governments, our facilities were able to remain open, albeit at reduced capacity since the beginning of the second quarter.

As of September 30, 2020, all of our branches are fully operational although some of our administrative employees continued to work remotely.

Despite the Company remaining operational since the second quarter of 2020, certain segments of our customer base were negatively impacted by COVID-19 and, as such, our revenues were negatively impacted as well.

To mitigate the impact of reduced revenues, the Company implemented various cost savings measure s in the second quarter of 2020.

As business conditions and customer demand returned to more normalized levels, many of these cost savings measures and furlough programs were removed and eliminated in the third quarter.

While our sales and service-related operations are performing near pre-COVID levels, our rental fleet utilization has lagged pre-COVID performance.

The Company will continue to monitor utilization and, in-turn, rationalize rental fleet levels to match expected demand in the fourth quarter of 2020 and beyond.

COVID-19’s impact on our last quarter of 2020 financial results and beyond will depend on future developments, such as the duration and scope of the outbreak and the potential for future “shelter in place” orders that could impact our employees, customers and suppliers.

Although we have seen improvements as a result of the easing of various restrictions, we expect our full year 2020 results to be adversely affected by COVID-19.

We believe we have sufficient liquidity to fund our operations as we work through the COVID-19 recovery.

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We have instituted various initiatives throughout the Company as part of our business continuity programs, and we are working to mitigate risk when disruptions occur.

While we continue to expect this situation to be temporary, and we believe we have successfully navigated the second quarter of 2020, any longer-term impacts of COVID-19 (or a future pandemic of its nature) is currently difficult to predict with certainty.

While we continue to expect this situation to be temporary, and we believe we have successfully navigated the second and third quarter of 2020, any longer-term impacts of COVID-19 (or a future pandemic of its nature) is currently difficult to predict with certainty.

The nature of our business requires that we make estimates and assumptions in accordance with GAAP.

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Any increased severity of the COVID outbreak and the related future financial impacts cannot be estimated at this time.

Our estimates at the end of the second quarter assumed no material impact from the disruptions caused by COVID-19.

The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts COVID-19 as of June 30, 2020 and through the date of this report.

The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts, inventory and related reserves and the carrying value of goodwill and other long-lived assets.

While there was no material impact to the Company’s consolidated financial statements as of and for the quarter ended June 30, 2020, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

While there was no material impact to the Company’s consolidated financial statements, as of and for the quarter ended September 30, 2020, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Impairment of Long-lived Assets

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When reviewing long-lived assets for impairment, the Company groups long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

After evaluating and weighing all relevant events and circumstances, the Company concluded that it was not necessary to perform an interim impairment test for the long-lived assets as of and for the period ended June 30, 2020.

Pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 350, Intangibles-Goodwill and Other (“ASC 350”), goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired.

4 unchanged sentences

a component).

A component of an operating segment is a reporting unit if the component constitutes a business for which discrete

financial information is available and segment management regularly reviews the operating results of that component.

After evaluating and weighing all relevant events and circumstances, the Company concluded there was no triggering event that constitutes the need to perform a goodwill impairment test for the period ended June 30, 2020.

A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component.

It should be noted that at March 31, 2020, the Company’s share price reduction as a result of the ongoing COVID-19 pandemic during the first quarter of 2020, was determined to be a triggering event for impairment testing under ASC 350.

The Company performed an interim quantitative impairment analysis and the fair value of reporting units was determined based on valuation techniques using the best available information, primarily cash flow projections.

We determined no goodwill impairment existed for the period ended March 31, 2020.

At that time, we determined no goodwill impairment existed for the period.

Offering Costs and Transaction Expenses

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The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of 201,000,000 shares of capital stock, consisting of (i) 200,000,000 shares of common stock, (the “Common Stock”) and (ii) 1,000,000 shares of preferred stock, par value $0.0001 per share.

As of June 30, 2020, no shares of preferred stock issued have been issued.

As of September 30, 2020, no shares of preferred stock authorized have been issued.

As a result of the reverse recapitalization, the shares issued to Alta Equipment Holdings, Inc.

shareholders in connection with the transaction are reflected as if they were issued and outstanding beginning on January 1, 2019.

As of June 30, 2020, there were warrants outstanding to acquire 8,668,750 shares of the Company’s Common Stock.

As of September 30, 2020, there were warrants outstanding to acquire 8,668,750 shares of the Company’s Common Stock.

These warrants were issued in connection with the equity infusion related to reverse recapitalization.

1 unchanged sentence

The warrants will expire five years after the completion of our initial reverse recapitalization or earlier upon redemption or liquidation.

Share Based Compensation

The Board of Directors approved the Company’s 2020 Omnibus Incentive Plan, which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other share based awards and cash awards to directors, employees and consultants to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company.

We measure the employee stock-based awards at grant-date fair value using provisions of ASC 718 – Stock Compensation and record compensation expense over the vesting period of the award.

The Company made an accounting election upon adoption of Accounting Standard Update (“ASU”) 2016-09 and will recognize forfeitures when they occur .

The Company treated equity awards granted to non-employee directors similarly to the equity awards to employees upon adoption of ASU 2018-07.

New Accounting Pronouncements

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Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU eliminates, modifies, and adds certain disclosure requirements on fair value measurements.

Entities are no longer required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies are required to disclose the range and weighted average used to

develop sig nificant unobservable inputs for Level 3 fair value measurements.

For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted.

1 unchanged sentence

We adopted this ASU on the effective date of January 1, 2020.

The adopti on of this accounting standard update has not had a material impact on our on our consolidated financial statements and disclosures.

The adoption of this accounting standard update has not had a material impact on our consolidated financial statements and disclosures.

Pronouncements Not Yet Adopted

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The Company is still assessing the impact Topic 842 will have on its future revenue and expenses.

The new accounting standard is effective for the annual reporting period ended December 31, 2022 with an effective date of January 1, 2022, and the interim reporting periods beginning January 1, 2023.

Early adoption is permitted.

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The l ease liability, with respect to the aforementioned sale transactions, represents the net proceeds upon the equipment’s initial transfer.

These amounts, excluding the guaranteed residual value, are recognized into rental revenu e on a pro-rata basis over the leased contract period up to the first exercise date of the guarantee.

At June 30 , 2020 and December 31, 2019, the total lease liability relating to these various equipment sale transactions amounted to $ 4.6 million and $ 5.5 million , respectively.

The Company also recognized a liability for its guarantee to repurchase the equipment at the residual amounts of $ 11.

0 million and $ 1 2.

5 million as of June 30 , 2020 and December 31, 2019, respectively.

These amounts, excluding the guaranteed residual value, are recognized into rental revenue on a pro-rata basis over the leased contract period up to the first exercise date of the guarantee.

At September 30, 2020 and December 31, 2019, the total lease liability relating to these various equipment sale transactions amounted to $4.1 million and $5.5 million, respectively.

The Company also recognized a liability for its guarantee to repurchase the equipment at the residual amounts of $10.6 million and $12.5 million as of September 30, 2020 and December 31, 2019, respectively.

The Company also enters into various rental agreements whereby owned equipment is leased to customers.

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The Company also enters into contracts with customer where it provides automated equipment installation and system integration services.

Revenue from the installation services are recognized over time as the performance obligation is satisfied, determined by the percentage of completion or input method, measured by the percentage of costs incurred to the estimated total costs for each contract.

Revenue from the installation services are recognized over time as the performance obligation is satisfied, determined using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs.

Deferred Revenue

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The Company also recognizes deferred revenue related to rental agreements.

Total deferred revenue relating to service sales agreements, rental agreements and automated equipment installation and system integration services as of June 30, 2020 and December 31, 2019 was $10.9 million and $4.7 million, respectively.

Total deferred revenue relating to service sales agreements, rental agreements and automated equipment installation and system integration services as of September 30, 2020 and December 31, 2019 was $9.8 million and $4.7 million, respectively.

Disaggregation of Revenues

The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statement of Operations for the three months and six months ended June 30, 2020 and 2019 by revenue type, and by the applicable accounting standard.

The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statement of Operations for the three months and nine months ended September 30, 2020 and 2019 by revenue type, and by the applicable accounting standard.

Three months ended

June 30, 2020

September 30, 2020

Three months ended

June 30, 2019

September 30, 2019

New and used equipment sales

2 unchanged sentences

Rental equipment sales

Six months ended

June 30, 2020

Six months ended

June 30, 2019

Nine months ended

September 30, 2020

Nine months ended

September 30, 2019

New and used equipment sales

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With the exception of bill-and-hold arrangements, the Company’s revenues from the sale of new and used equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good.

Under bill-and-hold arrangements, revenue is recognized when all configuration work is complete and the equipment has been set aside for final shipment, at which point the Company has determined control has been transferred.

Under bill-and-hold arra ngements, revenue is recognized when all configuration work is complete and the equipment has been set aside for final shipment, at which point the Company has determined control has been transferred.

The Company does not offer material rights of return.

The Company recognized $0.5 million in revenues for the year-to-date period ended June 30, 2020 from automated equipment installation and system integration services as performance obligation was satisfied over time using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs.

The Company recognized approximately $ 7.1 million in revenues for the year-to-date period ended September 30, 2020 from automated equipment installation and system integration services as performance obligation was satisfied over time using the cost-to-cost input method , based on contract costs incurred to date to total estimated contract costs .

Revenues from the sale of parts are recognized at the time of pick-up by the customer for over the counter sales transactions.

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The Company recognizes guaranteed maintenance service revenues over-time using an input method of costs incurred to estimated costs over the life of the related contract.

Revenue recognized from guaranteed maintenance contracts totaled $7.8 million and $7.2 million for the year-to-date period ended June 30, 2020 and 2019, respectively.

Revenue recognized from guaranteed maintenance contracts totaled $12.0 million and $12.1 million for the year-to-date period ended September 30, 2020 and 2019, respectively.

The Company also records service revenue from warranty contracts whereby the Company performs service on behalf of the Original Equipment Manufacturer (“OEM”) or third-party warranty provider.

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The Company does not recognize assets associated with the incremental costs of obtaining a contract with a customer that the Company expects to recover (for example, a sales commission).

obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.

Most of the Company’s revenue is recognized at a point in time or over a period of one year or less, and the Company has used the practical expedient that allows it to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.

The amount of the costs associated with the revenue recognized over a period of greater than one year is insignificant.

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The Company leases a subset of its operating facilities from three real estate entities related through common ownership.

Total rent expense under these lease agreements for both the six months ended June 30, 2020 and June 30, 2019 was $2.4 million and for both the three months ended June 30, 2020 and June 30, 2019 was $1.1 million.

Total rent expense under these lease agreements for both the nine months ended September 30, 2020 and September 30, 2019 was $3.6 million and for both the three months ended September 30, 2020 and September 30, 2019 was $1.2 million.

NOTE 5 — INVENTORIES

The components of inventories, net, consisted of the following (amounts in millions):

September 30,

New equipment

2 unchanged sentences

Gross Inventory

Accumulated depreciation

Inventory reserve

Direct labor of $1.3 million and $1.2 million incurred for open service orders were capitalized and included in work in process at both June 30, 2020 and December 31, 2019.

The remaining work in process balances as of June 30, 2020 and December 31, 2019 primarily represent parts applied to open service orders.

NOTE 6 — PROPER TY AND EQUIPMENT

Direct labor of $1.4 million and $1.2 million incurred for open service orders were capitalized and included in work in process at both September 30, 2020 and December 31, 2019.

The remaining work in process balances as of September 30, 2020 and December 31, 2019 primarily represent parts applied to open service orders.

Rental depreciation expense in connection with our new and used equipment was $0.9 and $2.4 million for the three and nine months ended September 30, 2020 and was $0.2 million and $1.5 million for the three and nine months ended September 30, 2019.

NOTE 6 — PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following (amounts in millions):

September 30,

Equipment and leasehold improvements:

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accumulated depreciation and amortization

Equipment and leasehold improvements

Equipment and leasehold improvements and computer equipment

Total accumulated depreciation and amortization

Total depreciation and amortization on property and equipment was $28.4 million and $19.2 million for the six months ended June 30, 2020 and 2019 and $14.6 million and $10.1 million for the three months ended June 30, 2020 and 2019, respectively.

Total depreciation and amortization on property and equipment was $47.8 million and $33.2 million for the nine months ended September 30, 2020 and 2019 and $19.4 million and $14.0 million for the three months ended September 30, 2020 and 2019, respectively.

The Company had assets related to capital leases, which are included in the machinery and equipment balance above.

Such assets had gross carrying values totaling $3.9 million and $3.5 million, and accumulated amortization balances totaling $1.9 million and $1.3 million, as of June 30, 2020 and December 31, 2019, respectively.

Of the $377.7 million and $285.1 million of gross cost of rental fleet, $16.3 million and $18.4 million were represented by GPO assets as of June 30, 2020 and December 31, 2019, respectively.

Such assets had gross carrying values totaling $3.9 million and $3.5 million, and accumulated amortization balances totaling $2.1 million and $1.3 million, as of September 30, 2020 and December 31, 2019, respectively.

Of the $396.8 million and $285.1 million of gross cost of rental fleet, $15.4 million and $18.4 million were represented by guaranteed purchase obligation (“GPO”) assets as of September 30, 2020 and December 31, 2019, respectively.

NOTE 7 — GOODWILL

The following table summarizes the changes in the carrying amount of goodwill in total and by reportable segment as of June 30, 2020 and December 31, 2019 (amounts in millions):

The following table summarizes the changes in the carrying amount of goodwill in total and by reportable segment as of September 30, 2020 and December 31, 2019 (amounts in millions):

Balance, December 31, 2019

Balance, June 30, 2020

Balance, September 30, 2020

See Note 15, Business Combinations for further information.

NOTE 8 — INTANGIBLE ASSETS

The gross carrying amount of intangible assets and accumulated amortization as of June 30, 2020 and December 31, 2019 were as follows (amounts in millions):

June 30, 2020

The gross carrying amount of intangible assets and accumulated amortization as of September 30, 2020 and December 31, 2019 were as follows (amounts in millions):

September 30, 2020

December 31, 2019

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Non-compete agreements

Amortization of intangible ass ets were $0.

6 million and $ 0.

7 million for the three and six months ended June 30, 2020 and $0.

0 million and $ 0.

1 million for the three and six months ended June 30, 2019 , respectively .

The Company concluded there was no triggering event that constitutes the need to perform a finite-lived intangible assets for impairment for the period ended June 30, 2020.

Amortization of intangible assets were $0.7 million and $1.4 million for the three and nine months ended September 30, 2020 and $0.1 million and $0.2 million for the three and nine months ended September 30, 2019, respectively.

The Company concluded there was no triggering event that constitutes the need to perform finite-lived intangible assets for impairment for the period ended September 30, 2020.

NOTE 9 — LINES OF CREDIT AND FLOOR PLANS

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and the other credit parties named therein, the lender JP Morgan Chase Bank, N.A., as Administrative Agent, Sole Bookrunner and Sole Lead Arranger.

The Amended and Restated Credit Agreement, among other things, (i) moved the $85 million floor plan financing facility of the Fourth Amended and Restated First Lien Credit Agreement out of syndication and into the Floor Plan Credit Agreement, (ii) increased the total aggregate amount of indebtedness of all floor plans from $220 million to $225 million, (iii) increased the revolving line of credit borrowing capacity from $110 million to $300 million, and (iv) modified certain financial covenants.

The Amended and Restated Credit Agr eement, among other things, (i) moved the $85 million floor plan financing facility of the Fourth Amended and Restated First Lien Credit Agreement out of syndication and into the Floor Plan Credit Agreement, (ii) increased the total aggregate amount of in debtedness of all floor plans from $220 million to $225 million, (iii) increased the revolving line of credit borrowing capacity from $110 million to $300 million, and (iv) modified certain financial covenants.

The Floor Plan Credit Agreement, among other things, (i) modified the floor plan financing facility with its first lien lender from $85 million to $40 million, and (ii) modified certain financial covenants.

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The ABL Facility has a maximum borrowing capacity of $300 million and interest cost is the London Interbank Offered Rate (“LIBOR”) plus an applicable margin or the CB Floating Rate, depending on the borrowing.

As of June 30, 2020, the Company had an outstanding ABL Facility balance of $110.8 million, excluding unamortized debt issuance costs.

The effective interest rate was 2.0% at June 30, 2020.

As of September 30, 2020, the Company had an outstanding ABL Facility balance of $140.5 million, excluding unamortized debt issuance costs.

The effective interest rate was 2.1% at September 30, 2020.

The Company has Floor Plan Facility with its first lien lender to finance new and used inventory and rental fleet equipment.

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The interest cost for the first lien lender floor plan facility is LIBOR plus an applicable margin.

The effective interest rate at June 30, 2020 was 2.9%.

The effective interest rate at September 30, 2020 was 2.9%.

The floor plan is collateralized by substantially all assets of the Company.

As of June 30, 2020, the Company had an outstanding balance on their first lien lender floor plan facility of $29.0 million, excluding unamortized debt issuance costs.

As of September 30, 2020, the Company had an outstanding balance on their first lien lender floor plan facility of $30.7 million, excluding unamortized debt issuance costs.

In relation to information regarding to our former line of credit and floor plans as of December 31, 2019, please refer to the “Lines of Credit and Floor Plans” footnote in our Registration Statement on Form S-1, filed with the SEC on March 25, 2020.

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The interest is LIBOR plus an applicable margin.

The effective rates, excluding the favorable effect of interest-subsidies, as of June 30, 2020 ranged from 3.1% to 4.2%.

As of June 30, 2020, the Company had an outstanding balance on these floor plans of $136.1 million.

The effective rates, excluding the favorable effect of interest-subsidies, as of September 30, 2020 ranged from 3.0% to 4.2%.

As of September 30, 2020, the Company had an outstanding balance on these floor plans of $124.3 million.

The total aggregate amount of indebtedness related to floor plan financing activities (including the first lien lender floor plan) facility cannot exceed $225.0 million at any time.

Total borrowings related to floorplan financing as of June 30, 2020 was

1 million excluding unamortized debt issuance costs.

For the six months ended and three months ended June 3 0 , 2020 the Company recognized interest expense associated with new equipment financed under its floor plan facilities of $1.

3 million and $0.3 million .

Total borrowings related to floorplan financing as of September 30, 2020 was $155.0 million excluding unamortized debt issuance costs.

For the nine months ended and three months ended September 30, 2020 the Company recognized interest expense associated with new equipment financed under its floor plan facilities of $1.8 million and $0.5 million.

Maximum borrowings under the floor plans and ABL Facility are limited to $525 million.

The total amount outstanding as of June 30, 2020 was $275.9 million, exclusive of debt issuance and deferred financings costs of $1.6 million.

The total amount outstanding as of September 30, 2020 was $295.5 million, exclusive of debt issuance and deferred financings costs of $1.6 million.

NOTE 10 — LONG-TERM DEBT

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On February 14, 2020, in connection with the reverse recapitalization, and i n conjunction with entering into the Amended and Restated Credit Agreement and Term Loan, the Company repaid in full the subordinated debt to the former shareholders of Alta Equipment Company and terminated all commitments and discharged all guarantees related to those agreements.

As of June 30, 2020, the Company has no subordinated debt on its Consolidated Balance Sheet.

As of September 30, 2020, the Company has no subordinated debt on its Consolidated Balance Sheet.

On February 14, 2020, the Company entered into a Note Purchase Agreement which comprised of a term loan in an aggregate principal amount of $155.0 million with its second priority lien lender through syndication, with an initial maturity date of August 2025.

1 unchanged sentence

The term loan is payable, at the lender’s option, in quarterly installments of $1.9 million plus interest at LIBOR plus 8%.

As of June 30, 2020, the effective interest rate was 9.8%.

As of September 30, 2020, the effective interest rate was 9.8%.

The Term loan is collateralized by substantially all assets of the Company.

As of June 30, 2020, outstanding borrowings under the term loan were $145.7 million, which included $7.4 million deferred financing costs and original issue discounts.

As of September 30, 2020, outstanding borrowings under the term loan were $151.1 million, which included $6.9 million deferred financing costs and original issue discounts.

Notes Payable — OEM Captive Lender

On May 9, 2014, the Company entered into a Master Note Agreement with an OEM captive lender.

These notes were payable in

monthly installments, with interest ranging from 3.29% to 4.99%.

The notes we re secured by the specific assets financed and were to mat ure at various dates through October 2024.

These notes were payable in monthly installments, with interest ranging from 3.29% to 4.99%.

The notes were secured by the specific assets financed and were to mature at various dates through October 2024.

On February 14, 2020, in connection with the reverse recapitalization, the Company repaid in full the balance of the notes payable to the OEM captive lender.

As of June 30, 2020, there were no notes payable to an OEM captive lender on our Consolidated Balance Sheet.

As of September 30, 2020, there were no notes payable to an OEM captive lender on our Consolidated Balance Sheet.

Extinguishment of Debt

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The Company’s long-term debt consists of the following (amounts in millions):

September 30,

Senior lien holder

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Long-term debt, net

As of June 30, 2020, the Company was in compliance with the financial covenants set forth in its debt agreements.

As of September 30, 2020, the Company was in compliance with the financial covenants set forth in its debt agreements.

Promissory Note

On June 12, 2020, the Company acquired PeakLogix.

As part of this acquisition agreement, the Company incurred a $1.0 million unsecured one-year promissory note at an interest rate of 6.0% on the unpaid principal sum.

Due to the short-term nature of the note, this liability was included in “Other current liabilities” on the Consolidated Balance Sheet as of June 30, 2020.

On June 12, 2020, the Company entered into an unsecured promissory note for $1.0 million at an interest rate of 6.0% on the unpaid principal sum in connection with the PeakLogix acquisition.

The promissory note is due one year from the date of the acquisition.

Due to the short-term nature of the note, the liability was included in “Other current liabilities” on the Consolidated Balance Sheet as of September 30, 2020.

Notes Payable – Non-Contingent Consideration

The Company acquired all the assets of PeakLogix on June 12, 2020.

Pursuant to the purchase agreement, Sellers are entitled to additional cash payments of a minimum of $2.0 million through-out 5-year earn-out period .

As of September 30, 2020, the Company recorded a $1.7 million liability related to present value of these minimum cash payments using a market participant discount rate.

This additional future liability is recorded as non-contingent liability in “Other liabilities” on the Consolidated Balance Sheet.

See Note 14, Fair Value Instruments and Note 15, Business Combinations for further information.

NOTE 11 — CONTINGENCIES

As of June 30, 2020, and December 31, 2019, the Company was party to certain contracts in which it guarantees the performance of agreements between various third-party financial institutions.

As of September 30, 2020, and December 31, 2019, the Company was party to certain contracts in which it guarantees the performance of agreements between various third-party financial institutions.

The terms of the guarantees range from three to five years.

In the event of a default by a third-party lessee, the Company would be required to pay all or a portion of the remaining unpaid obligations as specified in the contract.

The estimated exposure related to these guarantees was $2.5 million and $3.3 million at June 30, 2020 and December 31, 2019, respectively.

The estimated exposure related to these guarantees was $2.6 million and $3.3 million at September 30, 2020 and December 31, 2019, respectively.

It is anticipated that the third parties will have the ability to repay the debt without the Company having to honor the guarantee;

therefore, no amount has been accrued on the Consolidated Balance Sheets at June 30, 2020 and December 31, 2019.

therefore, no amount has been accrued on the Consolidated Balance Sheets at September 30, 2020 and December 31, 2019.

Legal Proceedings

During the six months ended June 30, 2020 and June 30, 2019, various claims and lawsuits, incidental to the ordinary course of business, were pending against the Company.

During the nine months ended September 30, 2020 and September 30, 2019, various claims and lawsuits, incidental to the ordinary course of business, were pending against the Company.

In the opinion of management, after consultation with legal counsel, resolution of these matters is not expected to have a material effect on the Company’s consolidated financial statements.

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As such, the Company is using the single line item approach.

The income tax benefit for the three and six months ended June 30, 2020 and 2019 consisted of the following:

Three Months Ended June 30,

Six Months Ended June 30,

The income tax benefit for the three and nine months ended September 30, 2020 and 2019 consisted of the following:

Three Months Ended September 30,

Nine Months Ended September 30,

Federal taxes-current

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State taxes-deferred

The Company recorded an income tax benefit of $0.4 million and $0 for the three months ended June 30, 2020 and 2019, income tax benefit of $1.5 million and $0 for the six months ended June 30, 2020 and 2019 respectively.

For the period ended June 30, 2019, the Company was not in existence and therefore does not have a comparable period.

The income tax benefit covers the period starting with the reverse recapitalization on February 14, 2020 through the period ended June 30, 2020.

The Company recorded an income tax benefit of $1.9 million and $0 for the three months ended September 30, 2020 and 2019, income tax benefit of $3.4 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

For the period ended September 30, 2019, the Company was not in existence and therefore does not have a comparable period.

The income tax benefit covers the period starting with the reverse recapitalization on February 14, 2020 through the period ended September 30, 2020.

The income tax results from the period January 1, 2020 through the day prior to the reverse recapitalization will be recognized by the predecessor.

The income tax benefit of $0.4 million and $1.5 for the three months and six months ended June 30, 2020, respectively, was primarily driven by the level of pre-tax loss of $6.8 million for the period from February 14, 2020 to June 30, 2020.

The effective income tax rate for the period from February 14, 2020 to June 30, 2020 of 22.7% was affected by non-deductible expenses and state income taxes.

As of June 30, 2020, the Company had $17.4 million of net deferred tax liabilities.

The Company finalized the February 14, 2020 pre-tax income calculation in the third quarter of 2020.

As a result, for the three months and nine months ended September 30, 2020, the income tax benefit was $1.9 million and $3.4 million, respectively.

This was primarily driven by the level of pre-tax loss of $14.1 million for the period from February 14, 2020 to September 30, 2020.

The effective income tax rate for the period from February 14, 2020 to September 30, 2020 of 24.1% was affected by non-deductible expenses and state income taxes.

As of September 30, 2020, the Company had $15.6 million of net deferred tax liabilities.

As discussed above, this represents the GAAP to tax difference in the basis of the underlying partnership, Alta Enterprises, LLC.

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With regard to the Employee Retention Credit, as this only impacts payroll taxes which are recorded in pre-tax income, there would be no impact on the income tax provision.

NOTE 13 — SHARE BASED COMPENSATION

During the third quarter 2020, the Compensation Committee of our Board of Directors approved the grant of 690,000 shares of Restricted Stock Units (“RSUs”) to certain directors, officers and employees of the Company under the 2020 Omnibus Incentive Plan.

The Company’s plan is to have broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests.

We calculated the fair value of the RSUs at grant date based on the closing market price of our common stock at the date of grant.

The compensation expense is recognized on a straight-line basis over the requisite vesting period of the award.

The Company recognized total compensation expense of $3.2 million for the three months and nine months ended September 30, 2020, respectively .

On August 18, 2020, Robert T.

Chiles, President of our Construction Group, passed away.

Chiles was the holder of RSUs for 390,000 shares of common stock of the Company, and at his passing these RSU’s became fully vested and converted into 390,000 shares of our common stock.

As a result of the immediate vesting of these RSUs, the Company incurred $3.0 million expense.

As of September 30, 2020, the total unrecognized compensation expense related to the non-vested portion of the Company's restricted stock awards was $2.0 million, which is expected to be recognized over a weighted average period of 3.0 years.

The following table shows the number of restricted stock awards that were granted and vested during 2020:

Restricted Stock Awards

Number of units

Weighted average grant date fair value

As of September 30, 2020

NOTE 14 — FAIR VALUE INSTRUMENTS

The carrying value of financial instruments reported in the accompanying Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature or maturity of these financial instruments.

Based upon current borrowing rates with similar maturities, which are Level 2 fair value inputs, the carrying value of lines of credit, long-term debt, and the guaranteed purchase obligations approximates the fair value as of June 30, 2020 and December 31, 2019.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring basis:

The Company granted warrants to purchase 33,333.33 shares of common units in connection with the stock purchase and redemption that occurred on December 27, 2017.

The warrants had an exercise price of $0.01 and included a conditional put option, allowing the holder to require the Company to purch ase the outstanding warrants, via a settlement upon the following events:

(1) upon 75% repayment of senior indebtedness, (2) change in control from a sale transaction, and (3) the maturity of the related debt, which require d the Company to settle the warra nts in cash.

The warrants had an exercise price of $0.01 and included a conditional put option, allowing the holder to require the Company to purchase the outstanding warrants, via a settlement upon the following events:

(1) upon 75% repayment of senior indebtedness, (2) change in control from a sale transaction, and (3) the maturity of the related debt, which required the Company to settle the warrants in cash.

The warrants were to expire December 27, 2027.

The warrants also included a limited call right, where in the event of a sale transaction, the Company had the right to redeem , in cash, all the warrants simultaneously at the per common share pri ce equal to the price set for the sale transaction.

The warrants also included a limited call right, where in the event of a sale transaction, the Company had the right to redeem, in cash, all the warrants simultaneously at the per common share price equal to the price set for the sale transaction.

On February 14, 2020, the Company consummated its reverse recapitalization.

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The fair value of warrants classified as liabilities at the date of grant was estimated using a market approach.

The market-based approach valuation methodology was primarily a using participants in the industry of industrial and heavy-equipment retailing, wholesaling, and rental.

The valuation methodology was primarily a market-based approach using participants in the industrial and heavy-equipment retailing, wholesaling, and rental industry.

A range of multiples was established taking company-specific risks into consideration and applied to Alta’s reported EBITDA to derive an implied enterprise value.

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Furthermore, although management believed its valuation methods to be appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could have resulted in a different fair value measurement at the reporting date.

The Company redeemed all the warrants outstanding upon closing of the reverse recapitalization on February 14, 2020 and as of June 30, 2020, there were no warrant liabilities on the Consolidated Balance Sheet.

The purchase agreement for the PeakLogix acquisition provides for earn-out payments of a minimum of $2.0 million up to $3.7 million which can be earned through June 30, 2025 based on meeting certain financial targets .

The initial earn-out liability was recorded at net present value based on a probability weighted range of outcomes analysis.

The Company redeemed all the warrants outstanding upon closing of the reverse recapitalization on February 14, 2020 and as of September 30, 2020, there were no warrant liabilities on the Consolidated Balance Sheet.

Contingent Consideration

The contingent consideration liability represents the fair value of the future earn-out liability that the Company may be required to pay in conjunction with the acquisitions upon the achievement of certain performance milestones.

The earn-out for the acquisitions is measured at fair value in each reporting period, based on level 3 inputs, with any change to the fair value recorded in the Consolidated Statements of Operations.

PeakLogix LLC (“PeakLogix”)

We estimated the fair value of the incremental $1.7 million earn-out payment based on a probability weighted range of outcomes analysis and applied a discount rate that appropriately captures a market participant's view of the risk associated with the obligation.

This analysis considered the earn-out payment thresholds, the minimum and maximum range of earn-out payments per the agreement and the expected future cash flows of PeakLogix.

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Going forward, volatility in the amount of PeakLogix’s actual results and forecasted scenarios could impact the fair value of this contingent consideration.

The contingent consideration liability represents the fair value of the future earn-out liability that the Company may be required to pay in conjunction with the acquisition of PeakLogix.

The following table sets forth, by level of hierarchy, the provisional fair value of contingent liability for the earn-out consideration at net present value as of June 30, 2020, which was presented in “Other liabilities” on the Consolidated Balance Sheet:

June 30, 2020

The Company concluded the future minimum cash payments of $2.0 million will be treated as a non-contingent liability and recorded a $1.7 million liability related to the present value of these minimum cash payments.

See Note 10, Long-Term Debt and Note 15, Business Combinations for further information.

In addition to the non-contingent liability, there is a potential earn out payment of $1.7 million to be paid to Sellers over a five-year period.

The Company recorded a $1.0 million earn out liability as the acquisition date fair value in “Other Liabilities” on the Consolidated Balance Sheet.

See Note 15, Business Combinations for further information.

Hilo Equipment & Services (“Hilo”)

The purchase agreement for the Hilo acquisition provides for one additional earn-out payment of $1.0 million based on meeting certain financial target which can be earned through July 1, 2023 .

We estimated the fair value of the earn-out liability based on present value of probability weighted expected future results.

See Note 15, Business Combinations for further information.

The following table sets forth, by level of hierarchy, the provisional fair value of contingent liability for the earn-out considerations at net present value as of September 30, 2020, which was presented in “Other liabilities” on the Consolidated Balance Sheet:

September 30, 2020

Contingent consideration

NOTE 15 — BUSINESS COMBINATIONS

On June 12, 2020, the Company acquired all the assets of PeakLogix for a total purchase cash consideration of $5.7 million, which was paid out of available funds.

Additional consideration includes $1.0 million in an unsecured one-year promissory note at 6% and earn-out payment of a minimum $2.0 million up to a cap of $3.7 million to be paid out to former owners based on meeting certain financial targets through-out 5-year earn-out period.

In connection with the purchase, PeakLogix LLC was created.

The estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date.

The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes.

The following table summarizes the net assets acquired from the acquisition (amounts in millions ):

The following table summarizes the net assets acquired from the acquisitions in 2020 (amounts in millions):

Accounts receivable

Property and equipment

Prepaid and other assets

Property, plant, and equipment

Intangible assets

Floor plan payable

Accounts payable

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Other current liabilities

Other liabilities

Total Liabilities

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Assets acquired net of cash

The following table summarizes the components of the purchase price at 6/12/2020:

Cash consideration paid

Promissory Note

Earn-out liability

Total purchase price

On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Flagler for a total purchase price of $75.8 million, which was paid out of funds from the closing of the reverse recapitalization.

T he acquisition has been accounted for as a purchase business combination.

Under the purchase method of accounting, the fair value of the assets acquired, and liabilities assumed have been recorded at the acquisition date of acquisition in our consolidated financial statements and may be subject to adjustment pending completion of final valuation.

Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements and may be subject to adjustment pending completion of final valuation.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection.

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Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

The following table summarizes the net assets acquired from the acquisition (amounts in millions ):

Accounts Receivable

Prepaid and other assets

Property and equipment

Intangible Assets

Floor plan payable

Accounts payable

Accrued expenses

Other liabilities

Total Liabilities

Net Assets Acquired

Assets acquired net of cash

It should be further noted that, upon the acquisition’s close, the Company established additional floorplan borrowings for new equipment on its Floor Plan Facility with its first lien lender in the amount of $1.2 million.

On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Liftech for a total purchase price of $18.4 million adjusted for the $1.5 million working capital, which was paid out of funds from the closing of the reverse recapitalization.

The $1.5 million working capital will be settled in the third quarter of 2020.

On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Liftech for a total purchase price of $18.4 million, which was paid out of funds from the closing of the reverse recapitalization.

T he acquisition has been accounted for as a purchase business combination.

Under the purchase method of accounting, the fair value of the assets acquired, and liabilities assumed have been recorded at the acquisition date in our consolidated financial statements and may be subject to adjustment pending completion of final valuation.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection.

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Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

The following table summarizes the net assets acquired from the acquisition (amounts in millions):

Accounts receivable

Other current & non-current assets

Property, plant, and equipment

Intangible Assets

Floor plan payable

Accounts payable and accrued expenses

Other liabilities

Total Liabilities

Net Assets Acquired

Northland Industrial Truck Co., Inc.

On May 1, 2019, the Company purchased the assets of Northland Industrial Truck Co., Inc., or NITCO, for a total purchase price of $65.6 million.

In connection with the purchase, NITCO, LLC was created.

The goodwill of $1.0 million arising from the acquisition consists largely of an assembled workforce and is expected to be deductible for income tax purposes.

The total balance of goodwill was allocated to the Industrial Equipment segment.

The acquisition has been accounted for as a purchase business combination.

Under the purchase method of accounting, the assets and liabilities assumed are recorded at the date of acquisition at their respective fair values.

On June 12, 2020, the Company acquired all the assets of PeakLogix for a total purchase cash consideration of $5.7 million, which was paid out of available funds.

Additional consideration includes $1.0 million in an unsecured one-year promissory note at 6% and earn-out payment of a minimum $2.0 million up to a $3.7 million to be paid out to former owners based on meeting certain financial targets through-out 5-year earn-out period, collectively resulting in an estimated enterprise value of $6.4 million net of cash acquired.

In connection with the purchase, PeakLogix LLC was created.

See Note 10, Long-Term Debt and Note 14, Fair Value Instruments for further information.

T he acquisition has been accounted for as a purchase business combination.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection.

The fair value of property, plant, and equipment were estimated to approximate their respective acquisition date net book values.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes.

Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

The following table summarizes the components of the purchase price at June 12, 2020:

Cash consideration paid *

Promissory Note

Present value of non-contingent earn-out liability

Earn-out liability

Total purchase price

* Includes $3.0 million cash acquired as part of the Business Combination

On July 1, 2020, the Company acquired all the assets of Hilo for a total purchase cash consideration of $18.2 million which was paid out of available funds, and potential earn out payments of an additional $1.0 million.

T he acquisition has been accounted for as a purchase business combination.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection.

The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values.

The following table summarizes the net assets acquired from the acquisition (amounts in millions):

The Company expects the goodwill recognized to be 100% deductible for income tax purposes.

Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

It should be further noted that, upon the close of the acquisition, total enterprise value was $16.9 million net of cash acquired.

The following table summarizes the component of the purchase price at July 1, 2020:

Cash consideration paid *

Earn-out liability

Total purchase price

* Includes $2.1 million cash acquired as part of the Business Combination

Martin Implement Sales, Inc.

On September 1, 2020, the Company acquired all the assets of Martin for a total purchase price of $16.2 million, which included floorplan eligible new equipment inventories that was paid out of available funds.

T he estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date.

The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date.

T he Company expects the goodwill recognized to be 100% deductible for income tax purposes.

Costs and expenses related to the acquisition have been expensed as incurred in operating expenses .

It should be further noted that, upon the close of the acquisition, the Company established additional floorplan borrowings for new equipment on its Floor Plan Facility with its first lien lender in the amount of $2.1 million, for a total enterprise value of $14.1 million.

Northland Industrial Truck Co., Inc.

The following table summarizes the net assets acquired from the acquisition in 2019 (amounts in millions):

Accounts receivable

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Net Assets Acquired

On May 1, 2019, the Company purchased the assets of NITCO, for a total purchase price of $65.6 million.

In connection with the purchase, NITCO, LLC was created.

The goodwill of $1.0 million arising from the acquisition consists largely of an assembled workforce and is expected to be deductible for income tax purposes.

The total balance of goodwill was allocated to the Industrial Equipment segment.

The acquisition has been accounted for as a purchase business combination.

Under the purchase method of accounting, the assets and liabilities assumed are recorded at the date of acquisition at their respective fair values.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection.

The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values.

It should be further noted that, upon the close of the acquisition, the Company established additional floorplan borrowings for new equipment on its Floor Plan Facility with its first lien lender, and OEMs, in the amount of $23.5 million, for a total enterprise value of $42.1 million.

Pro forma financial information - 2020

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Therefore, operating results of Flagler are included in the Company’s Consolidated Statement of Operations from February 14, 2020.

Pursuant to ASC 805, pro forma disclosures should be reported whenever the year or interim period of the acquisition is presented.

Since the Flagler acquisition was completed in the period ended March 31, 2020, the pro forma information below gives effect to the Flagler acquisition as if the acquisition occurred on January 1, 2020.

6 Months ended June 30, 2020

Pursuant to ASC 805, pro forma disclosures should be

reported w henever the year or interim period of the acquisition is presented.

Th e pro forma information below gives effect to the Flagler acquisition as if the acquisition occurred on January 1, 2020.

9 Months ended September 30, 2020

Total revenues

Net (loss) income

Pro forma financial information - 2019

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The Company, for this presentation, prorated NITCO pro forma financial information presented in our Registration Statement on Form S-1, filed with the SEC on March 25, 2020.

6 Months ended June 30, 2019

3 Months ended June 30, 2019

9 Months ended September 30, 2019

3 Months ended September 30, 2019

Total revenues

Net (loss) income

The Liftech and PeakLogix acquisitions were not deemed material for proforma financial information disclosure.

The financial effect of the other acquisitions, individually and in the aggregate, was not material to the consolidated financial statements.

As such, pro forma results of operations including other acquisitions have not been presented.

NOTE 16 — SEGMENTS

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The Industrial Equipment segment is principally engaged in operations related to the sale, service, and rental of lift trucks in Michigan, Illinois, Indiana and New York, as well as parts of the northeastern United States.

As of June 12, 2020, the Industrial Equipment segment also includes PeakLogix.

As of September 30, 2020, the Industrial Equipment segment included the Liftech, PeakLogix and Hilo acquisitions.

The Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Illinois and Florida.

The Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan and Illinois.

As of September 30, 2020, the Construction Equipment segment included the Flagler and Martin acquisitions.

The Company retains various unallocated expense items at the general corporate level, which the Company refers to as “Corporate” in the table below.

Corporate holds corporate debt and has minor activity all together.

During the first quarter 0f 2020, Corporate incurred $7.6 million in debt extinguishment fees, $7.6 million in transaction costs and other expenses associated with the reverse recapitalization.

During the second quarter of 2020, Corporate primarily incurred expenses associated with consulting and legal fees, acquisition costs and interest expense.

The following table presents the Company’s results of operations by reportable segment for the six months ended June 30, 2020 (amounts in millions):

For the nine months ended September 30, 2020, Corporate incurred $7.6 million in debt extinguishment fees, $7.6 million in transaction costs and other expenses associated with the reverse recapitalization.

During the quarter, Corporate primarily incurred expenses associated with consulting and legal fees related to acquisition costs, shared based compensation expense and interest expense, which were offset with income tax benefit and $8.0 million in income from a life insurance policy on our Construction Group President.

The following table presents the Company’s results of operations by reportable segment for the nine months ended September 3 0 , 20 20 (amounts in millions):

New and used equipment sales

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Net income (loss)

The following table presents the Company’s results of operations by reportable segment for the three months ended June 30, 2020 (amounts in millions):

The following table presents the Company’s results of operations by reportable segment for the three months ended September 30, 2020 (amounts in millions):

New and used equipment sales

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Net income (loss)

The following table presents the Company’s results of operations by reportable segment for the six months ended June 30, 2019 (amounts in millions):

The following table presents the Company’s results of operations by reportable segment for the nine months ended September 30, 2019 (amounts in millions):

New and used equipment sales

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Net income (loss)

The following table presents the Company’s results of operations by reportable segment for the three months ended June 30, 2019 (amounts in millions):

The following table presents the Company’s results of operations by reportable segment for the three months ended September 3 0 , 201 9 (amounts in millions):

New and used equipment sales

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Net income (loss)

The following table presents the Company’s identified assets by reportable segment for the period ending June 3 0 , 20 20 and December 31, 201 9 (amounts in millions):

The following table presents the Company’s identified assets by reportable segment for the period ending September 30, 2020 and December 31, 2019 (amounts in millions):

September 30,

Segment assets:

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NOTE 17 — SUBSEQUENT EVENTS

On July 1, 2020, the Company closed its acquisition of Hilo Equipment & Services, distributor of material handling equipment with three branches in the New York City metro area.

Under the terms of the agreement, the purchase price at close was $17.3 million in cash and potential earn out payments tied to post closing performance of the Hilo business.

On July 31, 2020, the Company announced its entry into a definitive agreement to acquire Martin Implement Sales, Inc., a privately held premium distributor of construction and agricultural equipment in the greater Chicago area.

The acquisition is expected to close during the third quarter of 2020.

On October 30, 2020, the Company closed its acquisition of all the assets of Howell Tractor and Equipment, LLC.

(“Howell”), a privately held heavy equipment dealer serving Northern Illinois and Northwest Indiana.

The purchase price consisted of $23.3 million in cash paid at closing, subject to certain adjustments based upon Howell’s net working capital at closing.

Additionally, the Company issued 507,143 shares of its common stock in connection with the purchase agreement, yielding a total enterprise value of approximately $23.8 million, excluding approximately $3.4 million of floorplan eligible new equipment inventories.

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

What changed 10-Q

Item 1. Financial Statements