ALTA EQUIPMENT GROUP INC. 10-Q

Item 1. Financial Statements ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions, except share and per share amounts) March 31, 2021 December 31, 2020 ASSETS CURRENT ASSETS Cash $ 0.6 $ 1.2 Accounts receivable, net of allowances of $7.9 and $7.1 as of March 31, 2021 and December 31, 2020, respectively 144.0 137.8 Inventories, net 223.4 229.0 Prepaid expenses and other current assets 13.3 13.6 Total current assets 381.3 381.6 PROPERTY AND EQUIPMENT, NET 310.8 311.9 OTHER ASSETS Goodwill 25.8 24.3 Intangible assets, net 25.6 26.3 Other assets 1.5 2.1 Total other assets 52.9 52.7 TOTAL ASSETS $ 745.0 $ 746.2 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Lines of credit, net $ 169.6 $ 157.7 Floor plan payable – new equipment 119.9 127.6 Floor plan payable – used and rental equipment 34.3 29.8 Current portion of long-term debt 7.8 7.8 Accounts payable 55.5 58.9 Customer deposits 11.4 9.3 Accrued expenses 28.8 30.1 Other current liabilities 12.3 13.1 Total current liabilities 439.6 434.3 LONG-TERM LIABILITIES Long-term debt, net of current portion 133.5 135.0 Capital lease obligations, net of current portion 0.4 0.6 Buyback residual obligations, net of current portion 0.7 0.7 Lease liability, net of current portion 2.5 2.5 Guaranteed purchase obligation, net of current portion 6.9 6.9 Other liabilities 9.9 9.3 TOTAL LIABILITIES $ 593.5 $ 589.3 CONTINGENCIES - NOTE 11 STOCKHOLDERS’ EQUITY Preferred stock, $0.0001 par value, 1,000,000 shares authorized, 1,200,000 Depositary Shares representing a 1/1000th fractional interest in a share of 10% Series A Cumulative Perpetual Preferred Stock, $0.0001 par value per share, issued and outstanding at March 31, 2021 and December 31, 2020 $ — $ — Common stock, $0.0001 par value, 200,000,000 shares authorized; 30,018,502 issued and outstanding at March 31, 2021 and December 31, 2020 — — Additional paid-in capital 216.5 216.2 Treasury stock (5.9 ) (5.9 ) Accumulated deficit (59.1 ) (53.4 ) TOTAL STOCKHOLDERS’ EQUITY 151.5 156.9 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 745.0 $ 746.2 The accompanying notes are an integral part of these consolidated financial statements. 2 ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, (in millions, except share and per share amounts) 2021 2020 Revenues: New and used equipment sales $ 123.8 $ 82.2 Parts sales 41.4 28.7 Service revenue 38.7 30.2 Rental revenue 33.1 25.2 Rental equipment sales 31.8 14.2 Net revenue $ 268.8 $ 180.5 Cost of revenues: New and used equipment sales 106.5 72.4 Parts sales 28.7 19.6 Service revenue 14.5 11.4 Rental revenue 5.5 4.9 Rental depreciation 19.4 12.9 Rental equipment sales 26.9 12.2 Cost of revenue $ 201.5 $ 133.4 Gross profit $ 67.3 $ 47.1 General and administrative expenses 64.9 51.1 Depreciation and amortization expense 2.0 1.0 Total general and administrative expenses 66.9 52.1 Income (loss) from operations $ 0.4 $ (5.0 ) Other income (expense) Interest expense, floor plan payable – new equipment (0.5 ) (0.7 ) Interest expense – other (5.2 ) (5.2 ) Other income 0.1 0.4 Loss on extinguishment of debt — (7.6 ) Total other income (expense) $ (5.6 ) $ (13.1 ) Loss before taxes $ (5.2 ) $ (18.1 ) Income tax provision (benefit) 0.5 (1.1 ) Net loss $ (5.7 ) $ (17.0 ) Basic and diluted loss per share $ (0.19 ) $ (0.91 ) Basic and diluted weighted average common shares outstanding 30,355,789 18,767,981 The accompanying notes are an integral part of these consolidated financial statements. 3 ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIT) (Unaudited) Three Months Ended March 31, 2021 Preferred Stock Common Stock (amounts in millions, except share amounts) Number of Shares Amount Number of Shares Amount Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Stockholder’s Equity Balance at December 31, 2020 1,200,000 $ — 30,018,502 $ — $ 216.2 $ (53.4 ) $ (5.9 ) $ 156.9 Net loss — — — — — (5.7 ) — (5.7 ) Share based compensation — — — — 0.3 — — 0.3 Balance at March 31, 2021 1,200,000 $ — 30,018,502 $ — $ 216.5 $ (59.1 ) $ (5.9 ) $ 151.5 Three Months Ended March 31, 2020 Preferred Stock Common Stock (amounts in millions, except share amounts) Number of Shares Amount Number of Shares Amount Additional Paid-in Capital Accumulated Deficit Treasury Stock Total Stockholder’s Equity (Deficit) Balance at December 31, 2019 — $ — 7,300,000 $ — $ — $ (23.2 ) $ — $ (23.2 ) Net loss — — — — — (17.0 ) — (17.0 ) Opening deferred tax liabilities under reverse recapitalization — — — — — (6.9 ) — (6.9 ) Equity infusion from reverse recapitalization, net of transaction costs — — 21,911,359 — 175.7 — — 175.7 Shares issued upon settlement of equity-linked incentive plan — — 300,000 — 3.1 — — 3.1 Repurchases of common stock — — — — — — (2.9 ) (2.9 ) Balance at March 31, 2020 — $ — 29,511,359 $ — $ 178.8 $ (47.1 ) $ (2.9 ) $ 128.8 The accompanying notes are an integral part of these consolidated financial statements. 4 ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, (amounts in millions) 2021 2020 OPERATING ACTIVITIES Net loss $ (5.7 ) $ (17.0 ) Adjustments to reconcile net loss to net cash flows used in operating activities: Depreciation and amortization 21.4 13.9 Amortization of debt discount and debt issuance costs 0.5 0.3 Imputed interest 0.1 — Gain on sale of assets — (0.1 ) Gain on sale of rental equipment (4.9 ) (2.0 ) Inventory obsolescence 0.2 0.5 Provision for bad debt 0.6 0.4 Loss on debt extinguishment — 7.6 Repayment of paid-in-kind interest — (11.2 ) Share-based compensation 0.3 3.1 Changes in deferred rent 0.2 — Changes in deferred taxes 0.5 (1.1 ) Changes in: Accounts receivable (5.9 ) (3.5 ) Inventories (34.2 ) (33.6 ) Proceeds from sale of rental equipment 31.8 14.4 Prepaid expenses and other assets 0.5 (0.4 ) Proceeds from floor plans with manufacturers 84.8 94.2 Payments under floor plans with manufacturers (86.9 ) (120.7 ) Accounts payable, accrued expenses, customer deposits, and other current liabilities (4.7 ) (2.1 ) Leases and other liabilities 1.1 0.2 Net cash used in operating activities $ (0.3 ) $ (57.1 ) INVESTING ACTIVITIES Proceeds from the sale of assets 0.7 0.1 Expenditures for rental equipment (6.2 ) (25.5 ) Expenditures for property and equipment (1.5 ) (1.2 ) Expenditures for acquisitions, net of cash acquired (1.9 ) (91.7 ) Net cash used in investing activities $ (8.9 ) $ (118.3 ) FINANCING ACTIVITIES Expenditures for debt issuance costs — (2.7 ) Extinguishment of floor plans and line of credit — (132.9 ) Extinguishment of long-term debt — (82.0 ) Redemption of former shareholder notes payable — (6.7 ) Extinguishment of warrant liability — (29.6 ) Proceeds from lines of credit 73.5 220.2 Payments under lines of credit (61.7 ) (79.9 ) Proceeds from floor plans with unaffiliated source 24.2 25.8 Payments under floor plans with unaffiliated source (25.3 ) (21.6 ) Proceeds from issuance of long-term debt, net — 149.4 Payments on long-term debt (1.9 ) (0.8 ) Payments on capital lease obligations (0.2 ) (0.2 ) Equity proceeds from reverse recapitalization, net — 175.7 Repurchases of common stock — (2.9 ) Net cash provided by financing activities $ 8.6 $ 211.8 NET CHANGE IN CASH (0.6 ) 36.4 Cash, Beginning of year 1.2 0.0 Cash, End of period $ 0.6 $ 36.4 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest $ 5.3 $ 15.2 The accompanying notes are an integral part of these consolidated financial statements. 5 NOTE 1 — ORGANIZATION A ND NATURE OF OPERATIONS Alta Equipment Group Inc. and its subsidiaries (“Alta” or the “Company”) is engaged in the retail sale, service, and rental of material handling and construction equipment in the states of Michigan, Illinois, Indiana, New York (including New York City in our Material Handling segment), Virginia and Florida as well as the New England region (including Boston) of the United States. Alta Equipment Holdings, Inc. is the holding company for Alta Enterprises, LLC. Alta Enterprises, LLC is the holding company for Alta Industrial Equipment Michigan; LLC; Alta Industrial Equipment Company, LLC; Alta Industrial Equipment New York, LLC; PeakLogix, LLC; Alta Construction Equipment, LLC; Alta Construction Equipment Illinois, LLC; Alta Heavy Equipment Services, LLC; NITCO, LLC; Alta Construction Equipment Florida, LLC, and Alta Construction Equipment New York, LLC. Unless the context otherwise requires, the use of the terms “the Company”, “we,” “us,” and “our” in these notes to the unaudited consolidated financial statements refers to Alta Equipment Group Inc. and its consolidated subsidiaries. NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim consolidated financial statements include the consolidated accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. Certain amounts in the prior year have been reclassified to conform with the presentation in the current year. 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 three months ended March 31, 2021 is not necessarily indicative of the results that may be expected for the year ending December 31, 2021, and therefore, the results and trends in these interim consolidated financial statements may not be the same for the entire year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2020 Annual Report on Form 10-K. The Company updated the depreciable useful lives of certain of its rental equipment product categories based on our year-end analysis of fair value relative to book value, prior-year utilization trends and a review of market participants approach to depreciation for similar products . Per our accounting policy the updates to depreciable useful lives will be adjusted on prospective basis. Specifically, the notable changes for 2021 will be extending the depreciable life on lift trucks in our Material Handling segment to 84 months, extending the depreciable life on certain aerial and crane related assets in our Construction Equipment segment to 120 months and applying straight-line depreciation to underutilized construction equipment assets that are being depreciated on a unit-of-activity basis to the extent the assets meet certain underutilized thresholds. These accounting policies of the Company were also described in Note 2 to the audited consolidated financial statements contained in the Company’s 2020 Annual Report on Form 10-K. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on assumptions that we believe are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. Additionally, the COVID-19 outbreak has had an impact on our approach to these estimates and assumptions and any increased severity of the pandemic on our business could result in a reassessment of these estimates and assumptions which, in turn, could affect the reported amounts on our financial statements. Please see section titled Risk Factors in our 2020 Annual Report on Form 10-K for a discussion of risks associated with the COVID-19 pandemic. Impairment of Long-lived Assets The Company evaluates long-lived assets, such as property and equipment and intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying value of any asset group may not be recoverable. If the estimated future cash flow (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. 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 did not identify any indications necessary to perform an interim impairment test for the long-lived assets as of and for the period ended March 31, 2021. 6 Goodwill 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. The Company evaluates goodwill for impairment at least annually, or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. 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 March 31, 2021. Income Taxes The Company was formed in 2020 for income tax purposes. Alta Enterprises, LLC was historically and remains a partnership for federal income tax purposes, with each partner being separately taxed on its share of taxable income (loss). There is no federal income tax expense (benefit) reflected in the Company’s financial statements for any period prior to the reverse recapitalization on February 14, 2020. As the activity resides in Alta Enterprises, LLC, the income tax impact to the Company represents the current income tax calculated at the Consolidated Return level (“Alta Equipment Group Inc and Subsidiaries”), and the deferred impact of the interest in the lower tier partnership. We use the guidance in FASB ASC Topic 740-270, Income Taxes in Interim Periods, where tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period. At the end of each interim reporting period, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected income (loss) before income taxes for the year, projections of the proportion of income (and/or loss) earned and taxed, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or the Company’s tax environment changes. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or to the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is not likely to allow for the use of the deduction or credit. 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 Pronouncements Not Yet Adopted Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”) that replaces the existing leasing guidance. Topic 842 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged. 7 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, 202 1 with an effective date of January 1, 202 1 , and the interim reporting periods beginning January 1, 202 2 . Management is currently assessing the impact the adoption of this standard will have on the Company’s consolidated financial statements as well as the available transition methods. Financial Instruments — Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This standard prescribes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of the financial instrument. Measurement of expected credit losses is to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption. As amended by ASU 2019-10, the ASU 2016-13 is effective for the annual reporting period beginning on or after December 15, 2022. The Company believes ASU 2016-13 will only have applicability to the Company’s receivables from revenue transactions, or trade receivables, except those arising from rental revenues as ASU 2016-13 does not apply to receivables arising from operating leases. The Company is currently evaluating whether the new guidance, while limited to our non-operating lease trade receivables, will have an impact on the consolidated financial statements or existing internal controls. Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) . This guidance is intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform (e.g., discontinuation of LIBOR) if certain criteria are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. Our potential exposure related to the expected cessation of LIBOR is limited to the interest expense we incur on our Credit Facility. We cannot predict the effect of the potential changes to or elimination of LIBOR, the establishment and use of alternative rates or benchmarks, but do not expect a significant impact on our consolidated financial position, and results of operations. NOTE 3 — REVENUE RECOGNITION Revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the business expects to be entitled to in exchange for those goods or services. Control is transferred when the customer has the ability to direct the use of and obtain the benefits from the goods or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when control is transferred to the customer. For agreements with multiple performance obligations, which are infrequent, judgment is required to determine whether performance obligations specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, the Company generally allocates sales prices to each distinct performance obligation based on the observable selling price. The Company enters into various equipment sales transactions with certain customers, whereby customers purchase equipment from the Company and then lease the equipment to a third party. In some cases, the Company provides a guarantee to repurchase the equipment back at the end of the lease term between the customer and third party lessee at a set residual amount set forth in the initial sales contract or pay the customer for the deficiency, if any, between the sale proceeds received for the equipment and the guaranteed minimum resale value. The Company is precluded from recognizing a sale of equipment if it guarantees to repurchase the sold equipment back or guarantees the resale value of the equipment to the customer for contracts determined to be operating leases. Rather, these transactions are accounted for in accordance with ASC 840, Lease Accounting (“Topic 840”). 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 revenue on a pro-rata basis over the leased contract period up to the first exercise date of the guarantee. At March 31, 2021 and December 31, 2020, the total lease liability relating to these various equipment sale transactions amounted to $3.4 million and $3.8 million, respectively. The Company also recognized a liability for its guarantee to repurchase the equipment at the residual amounts of $8.5 million and $9.0 million as of March 31, 2021 and December 31, 2020, respectively. 8 The Company also enters into various rental agreements whereby owned equipment is leased to customers. Revenue from the majority of rental agreements is recognized over the term of the agreement in accordance with Topic 840. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period. Unbilled rental revenues are included as a component of “Accounts receivable” on the Consolidated Balance Sheets. Rental equipment is also purchased outright (“rental conversions”). Rental revenue and revenue attributable to rental conversions, are recognized in “Rental revenue” and “Rental equipment sales” on the Consolidated Statements of Operations, respectively. The Company also enters into contracts with customer where it provides automated equipment installation and system integration services and installation and set-up of warehouse management systems and related hardware and software support services. 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. Revenue from recurring support services is recognized ratably over the contract period. Revenue from periodic maintenance service sales is recognized upon completion of the service. Revenue from guaranteed maintenance contracts is recognized over the contract period in proportion to the costs expected to be incurred in performing services under the contract, typically three to five years. Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized, and payment is due is not significant. The Company does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year, or if payment is expected to be received less than a year after the good or service has been provided. Sales and other taxes collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, excluded from revenue. Shipping and handling costs are treated as fulfillment costs and are included in cost of revenue. Costs to obtain contracts, such as sales commissions, are expensed as incurred given that the terms of the contracts are generally less than one year. 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. Deferred Revenue T he Company recognizes deferred revenue with respect to automated equipment installation and system integration services, service sales and rental agreements. Deferred revenue with respect to service sales represents the unearned portion of fees related to guaranteed maintenance contracts for customers covering equipment they have previously purchased. These amounts are recognized based on an estimated rate at which the services are provided over the life of the contract. The Company also recognizes deferred revenue related to rental agreements. Total deferred revenue relating to automated equipment installation and system integration services, service sales agreements and rental agreements as of March 31, 2021 and December 31, 2020 was $10.0 million and $9.6 million, respectively. 9 Disaggregation of Revenues The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statement of Operations for the three months March 31, 2021 and 2020 by revenue type, and by the applicable accounting standard. Three months ended March 31, 2021 Three months ended March 31, 2020 Topic 840 Topic 606 Total Topic 840 Topic 606 Total Revenues: New and used equipment sales $ — $ 123.8 $ 123.8 $ — $ 82.2 $ 82.2 Parts sales — 41.4 41.4 — 28.7 28.7 Service revenue — 38.7 38.7 — 30.2 30.2 Rental revenue 33.1 — 33.1 25.2 — 25.2 Rental equipment sales — 31.8 31.8 — 14.2 14.2 Net revenue $ 33.1 $ 235.7 $ 268.8 $ 25.2 $ 155.3 $ 180.5 The Company believes that the disaggregation of revenues from contracts to customers as summarized above, together with the discussion below, depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by economic factors. Leases revenues (Topic 840) New and used equipment sales: The Company enters into various equipment sale transactions with certain customers, whereby customers purchase equipment from the Company and then lease the equipment to a third party. In some cases, the Company provides a guarantee to repurchase the equipment back at the end of the lease term between the customer and third party lessee at a set residual amount set forth in the initial sales contract or pay the customer for the deficiency, if any, between the sale proceeds received for the equipment and the guaranteed minimum resale value. The Company is precluded from recognizing a sale of equipment when it is obligated or has an option to repurchase or guarantees the resale value of the equipment to the customer for contracts determined to be operating leases. For these arrangements, because the Company generally receives the full amount of the consideration at the beginning of the arrangement, the Company initially records deferred revenue for the amount received and recognizes revenue on a pro-rata basis over the term of the contract under Topic 840. Rental revenue: Owned equipment rentals represent revenues from renting equipment. The Company accounts for these rental contracts as operating leases. The Company recognizes revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period. Revenues from contracts with customers (Topic 606) Accounting for the different types of revenues pursuant to Topic 606 are discussed below. Substantially all of the Company’s revenues under Topic 606 are recognized at a point in time rather than over time. New and used equipment sales: 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. The Company does not offer material rights of return. The Company recognized approximately $7.9 million and $0 million in revenues for the year-to-date period ended March 31, 2021 and 2020, respectively, from automated equipment installation and system integration services as the performance obligations were satisfied over time using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs. Parts sales: Revenues from the sale of parts are recognized at the time of pick-up by the customer for over the counter sales transactions. For parts that are shipped to a customer, the Company elected to use a practical expedient of Topic 606 and treat such shipping activities as fulfillment costs, thereby recognizing revenues at the time of shipment. The Company does not offer material rights of return. 10 Service revenue: The Company records service revenue primarily from guaranteed maintenance and periodic maintenance contracts with customers. The Company recognizes periodic maintenance service revenues at the time such services are completed, which is when the control of the promised service s is transferred over to the customer . 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 $ 4.3 million and $ 4.0 million for the year-to-date period ended March 31 , 20 2 1 and 20 20 , 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. Rental equipment sales: The Company also sells rental equipment from our rental fleet, these sales 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. In some cases, certain rental agreements contain a rental purchase option, whereby the customer has an option to purchase the rented equipment during the term of the rental agreement. Revenues from the sale of rental equipment are recognized at the time the rental purchase option agreement has been approved and signed by both parties, as the equipment is already in the customer’s possession under the previous rental agreement, and therefore control has been transferred as title has been transferred. Contract costs 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). 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. Receivables and contract assets and liabilities The Company has contract assets associated with contracts with customers. Contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. Deferred revenue associated with service contracts represents the unearned portion of revenue related to guaranteed maintenance contracts for customers covering equipment purchased. These amounts are recognized based on an estimated rate at which the services are provided over the life of the contract. Payment terms The Company’s revenues do not include material amounts of variable consideration under Topic 606. Payment terms may vary by the type of customer, location, and the type of products or services offered. The time between invoicing and when payment is due is not significant, and contracts do not generally include a significant financing component. Contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. Contract estimates and judgments The Company’s revenues accounted for under Topic 606 generally do not require significant estimates or judgments as the transaction price is generally fixed and clearly stated in the customer contracts. Contracts generally do not include multiple performance obligations, and accordingly do not require estimates of the standalone selling price for each performance obligation. Substantially all of the Company’s revenues are recognized at a point in time and the timing of the satisfaction of the applicable performance obligations is readily determinable. The Company’s revenues under Topic 606 are generally recognized at the time of delivery to, or pick-up by, the customer. NOTE 4 — RELATED PARTY TRANSACTIONS 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 three months ended March 31, 2021 and 2020 was $1.2 million. 11 NOTE 5 — INVENTORIES The components of inventories, net, consisted of the following (amounts in millions): March 31, December 31, 2021 2020 New equipment $ 145.8 $ 153.5 Used equipment 30.9 31.4 Work in process 7.3 5.4 Parts 42.5 41.6 Gross Inventory $ 226.5 $ 231.9 Inventory reserves (3.1 ) (2.9 ) $ 223.4 $ 229.0 Direct labor of $2.1 million and $1.7 million incurred for open service orders were capitalized and included in work in process at March 31, 2021 and December 31, 2020, respectively. The remaining work in process balances as of March 31, 2021 and December 31, 2020 primarily represent parts applied to open service orders. Rental depreciation expense in connection with our new and used equipment was $2.0 million and $0.8 million for the three months ended March 31, 2021 and 2020, respectively. NOTE 6 — PROPERTY AND EQUIPMENT Property and equipment, net, consisted of the following (amounts in millions): March 31, December 31, 2021 2020 Land $ 0.1 $ 0.1 Rental fleet 421.2 418.5 Equipment and leasehold improvements: Machinery and equipment 5.5 5.5 Autos and trucks 6.4 7.0 Leasehold improvements 9.3 8.7 Office equipment 3.1 3.1 Computer equipment 10.4 9.4 Total Cost $ 456.0 $ 452.3 Less: accumulated depreciation and amortization Rental fleet (128.3 ) (124.6 ) Equipment, auto and trucks, leasehold improvements and computer and office equipment (16.9 ) (15.8 ) Total accumulated depreciation and amortization (145.2 ) (140.4 ) $ 310.8 $ 311.9 Total depreciation and amortization on property and equipment was $18.7 million and $13.0 million for the three months ended March 31, 2021 and 2020, 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 $4.0 million and $4.0 million, and accumulated amortization balances totaling $2.7 million and $2.5 million, as of March 31, 2021 and December 31, 2020, respectively. Of the $421.2 million and $418.5 million of gross cost of rental fleet, $12.4 million and $13.0 million were represented by guaranteed purchase obligation (“GPO”) assets as of March 31, 2021 and December 31, 2020, respectively. 12 NOTE 7 — GOODWILL The following table summarizes the changes in the carrying amount of goodwill in total and by reportable segment as of March 31, 2021 and December 31, 2020 (amounts in millions): Material Handling Construction Equipment Total Balance, December 31, 2020 $ 10.2 $ 14.1 $ 24.3 Additions 1.5 - 1.5 Balance, March 31, 2021 $ 11.7 $ 14.1 $ 25.8 See Note 16, Business Combinations for further information. NOTE 8 — INTANGIBLE ASSETS The gross carrying amount of intangible assets and accumulated amortization as of March 31, 2021 and December 31, 2020 were as follows (amounts in millions): March 31, 2021 December 31, 2020 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer relationships $ 25.9 $ (3.7 ) $ 22.2 $ 25.9 $ (3.1 ) $ 22.8 Tradenames 1.6 (0.5 ) 1.1 1.6 (0.4 ) 1.2 Non-compete agreements 0.8 (0.1 ) 0.7 0.8 (0.1 ) 0.7 Favorable Market Rent 1.7 (0.1 ) 1.6 1.7 (0.1 ) 1.6 Total $ 30.0 $ (4.4 ) $ 25.6 $ 30.0 $ (3.7 ) $ 26.3 Amortization of intangible assets were $0.7 million and $0.1 million for the three months ended March 31, 2021 and March 31, 2020, respectively. NOTE 9 — LINES OF CREDIT AND FLOOR PLANS Effective February 14, 2020, the Company amended and restated its credit facility with its first lien lender by entering into the Fifth Amended and Restated ABL First Lien Credit Agreement (“Amended and Restated Credit Agreement”) and the facility thereunder, the “ABL Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein. In connection with the Amended and Restated Credit Agreement, the Company amended and restated its floor plan facility with its first lien lender by entering into the Fifth Amended and Restated Floor Plan First Lien Credit Agreement (“Floor Plan Credit Agreement” and the facility thereunder, the “Floor Plan Facility”) by and among Alta Equipment Group Inc. 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. On January 11, 2021, the Company amended its Fifth Amended and Restated ABL First Lien Credit Agreement by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein. The amendment generally allows for dividend payments to be made on the Preferred Stock without having to meet a leverage threshold, it excludes the Preferred dividend payments from affecting the second lien prepayment requirement, and it increases vendor floor plan limits from $225 million to $250 million, however, credit line borrowings would begin to be limited in the instance amounts borrowed on floor plan facilities exceed $225 million. 13 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 . Line of Credit and Floor Plan — First Lien Lender The Company has an ABL Facility with its first lien holder with advances on the line being supported by eligible accounts receivable, parts, and otherwise unencumbered new and used equipment inventory and rental equipment. 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 March 31, 2021, the Company had an outstanding ABL Facility balance of $170.9 million, excluding unamortized debt issuance costs. The effective interest rate was 2.0% at March 31, 2021. As of December 31, 2020, the Company had an outstanding ABL Facility balance of $159.1 million, excluding unamortized debt issuance costs. The effective interest rate was 2.0% at December 31, 2020. The Company has a Floor Plan Facility with its first lien lender to primarily finance new inventory. This Floor Plan Facility has a maximum borrowing capacity of $40 million. The interest cost for the first lien lender floor plan facility is LIBOR plus an applicable margin. The effective interest rate at March 31, 2021 was 2.9%. The floor plan is collateralized by substantially all assets of the Company. As of March 31, 2021, the Company had an outstanding balance on their first lien lender floor plan facility of $34.3 million, excluding unamortized debt issuance costs. As of December 31, 2020, the Company had an outstanding balance on their first lien lender floor plan facility of $35.3 million, excluding unamortized debt issuance costs. The effective interest rate at December 31, 2020 was 2.9%. Original Equipment Manufacturer (“OEM”) Captive Lenders and Suppliers’ Floor Plans The Company has floor plan financing facilities with several OEM captive lenders and suppliers for new and used inventory and rental equipment, each with borrowing capacities ranging from $2.0 million to $102.0 million. Primarily, the Company utilizes the facilities for purchases of new equipment inventories. Certain floor plans provide for up to twelve-months interest only or deferred payment periods. In addition, certain floor plans provide for interest and principal free terms at the suppliers’ discretion. The Company routinely sells equipment that is financed under OEM captive lender floor plans prior to the original maturity date of the financing agreement. When this occurs, the related OEM captive lender floor plan payable becomes due to be paid at the time the equipment being financed is sold. With the recent acquisitions, the Company’s floor plan financing facilities with its OEM capital lenders and suppliers were amended to include the new locations and new entities. The floor plan financing facilities are secured by the equipment being financed, and contain operating company guarantees. The interest is LIBOR plus an applicable margin. The effective rates, excluding the favorable effect of interest-subsidies, as of March 31, 2021 ranged from 3.2% to 4.1%. As of March 31, 2021, the Company had an outstanding balance on these floor plans of $120.0 million. The total aggregate amount of floor plan financing (including the first lien lender floor plan) cannot exceed $250.0 million at any time. Total balance related to floorplan financing as of March 31, 2021 and December 31, 2020 was $154.3 million and $157.5 million, respectively, excluding unamortized debt issuance costs. For the three months ended March 31, 2021 and 2020, the Company recognized interest expense associated with new equipment financed under its floor plan facilities of $0.5 million and $0.7 million, respectively. Maximum borrowings under the floor plans and ABL Facility are limited to $550 million. The total amount outstanding as of March 31, 2021 and December 31, 2020 was $325.2 million and $316.6 million, exclusive of debt issuance and deferred financings costs of $1.4 million and $1.5 million, respectively. Each of the ABL Facility and the Floor Plan Facility was amended and restated in its entirety on April 1, 2021. See Note 18, Subsequent Events – Amended and Restated Credit Arrangements for further information. NOTE 10 — LONG-TERM DEBT T he Company entered into a new Note Purchase Agreement (the “Term Loan”) dated as of February 3, 2020 i n connection with the reverse recapitalization, for the purposes of, among other things, (i) financing the reverse recapitalization, (ii) financing the acquisitions of Flagler and Liftech; and (iii) providing for the repayment and refinance of a portion of the Company’s prior existing debt. 14 Term Loan 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. In connection with the new Term Loan, the Company retired the Prior Note Purchase Agreement. 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 March 31, 2021, the effective interest rate was 9.8%. The Term loan is collateralized by substantially all assets of the Company. As of March 31, 2021, outstanding borrowings under the term loan were $147.3 million, which included $6.0 million deferred financing costs and original issue discounts. On April 1, 2021, we completed a private offering of $315 million of our 5.625% Senior Secured Second Lien Notes due 2026 (the “Notes”). The Company used the net proceeds from the sale of the Notes and the new borrowings under the ABL Facility and the Floor Plan Facility, to repay its $147.3 million second lien term loan facility, to repay and refinance a portion of the ABL Facility and the Floor Plan Facility and to pay related fees and expenses. See Note 18, Subsequent events – Issuance of 5.625% Senior Secured Second Lien Notes due 2026 for further information. Extinguishment of Debt In the first quarter of 2020, the Company recorded a loss on the extinguishment of debt in the amount of $7.6 million in the line item “Loss on Extinguishment of Debt” in its Consolidated Statements of Operations. This was in accordance with ASC Topic No. 470-50, “Debt – Modifications and Extinguishments” (Topic No. 470), as the transaction was determined to be an extinguishment of the existing debt and an issuance of new debt. The Company’s long-term debt consists of the following (amounts in millions): March 31, December 31, 2021 2020 Term Loan $ 147.3 $ 149.2 Unamortized debt issuance costs (1.7 ) (1.8 ) Debt discount (4.3 ) (4.6 ) Total debt $ 141.3 $ 142.8 Less: Current maturities of long-term debt, net (7.8 ) (7.8 ) Long-term debt, net $ 133.5 $ 135.0 As of March 31, 2021, the Company was in compliance with the financial covenants set forth in its debt agreements. Promissory Note 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 March 31, 2021. 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 March 31, 2021, 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 15, Fair Value Instruments and Note 16, Business Combinations for further information. 15 NOTE 11 — CONTINGENCIES Guarantees As of March 31, 2021, and December 31, 2020, 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 $1.9 million and $2.4 million at March 31, 2021 and December 31, 2020, 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 March 31, 2021 and December 31, 2020, respectively. Legal Proceedings During the three months ended March 31, 2021 and March 31, 2020, 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. Contractual Obligations The Company does not believe there are any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on the Company. As of March 31, 2021, and December 31, 2020 there was $1.4 million in outstanding letters of credits issued in the normal course of business, respectively. NOTE 12 — INCOME TAXES The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statement in the period of enactment. The deferred tax liabilities and assets for the Company represent the difference between the financial statement and tax basis of the partnership interest in Alta Enterprises, LLC. As such, the Company is using the single line item approach. The income tax provision (benefit) for the three months ended March 31, 2021 and 2020 consisted of the following: Three Months Ended March 31, 2021 2020 Federal taxes-current $ — $ — Federal taxes-deferred 0.4 (0.8 ) State taxes-current — — State taxes-deferred 0.1 (0.3 ) $ 0.5 $ (1.1 ) Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period. At the end of each interim reporting period, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. The Company recorded an income tax expense of $0.5 million for the three months ended March 31, 2021 and an income tax benefit of $1.1 million for the three months ended March 31, 2020. As a result of Alta’s first quarter 2021 analysis of the realizability of its deferred tax assets, and after considering tax planning initiatives and other inputs, Alta determined that it was more likely than not that deferred tax assets would not be realized and recorded income tax expense of $0.5 million to establish a valuation allowance. Alta reviews the realizability of its deferred tax assets on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results are considered, along with any other positive or negative evidence. All of the factors that Alta considers in evaluating whether and when to establish or release all or a portion of the deferred tax asset valuation allowance involve significant judgment. 16 The effective tax rate for the three months ended March 31, 2021 was (8.8) % when compared to 24.1 % for the period from February 14, 2020 to March 31, 2020 in connection with the reverse recapitalization. This was mainly due to the impact of the application of the valuation allowance during the first quarter. As of December 31, 2020, the Company has federal net operating tax loss carryforwards of approximately 4.7 million, which may be carried forward indefinitely and are eligible to offset 80% of future taxable income. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, includes various income and payroll tax provisions, modifications to federal net operating loss rules, business interest deduction limitations, and bonus depreciation eligibility for qualified improvement property. The CARES Act did not materially impact our effective tax rate for prior periods, although it will impact the timing of future cash payments for taxes. As of March 31, 2021, we have deferred employer payroll taxes of $5.6 million under the CARES Act, with half of the deferred amounts due by December 31, 2021, and the remaining half due by December 31, 2022. NOTE 13 — EQUITY Preferred Stock On December 22, 2020, the Company closed its underwritten public offering of depositary shares, each representing 1/1000th of a share of 10% Series A Preferred Stock, par value $0.0001 per share. The liquidation preference of each share of Series A Preferred Stock is $25,000 ($25.00 per Depositary Share). At the closing, the Company issued 1,200 shares of Series A Preferred Stock represented by 1,200,000 Depositary Shares issued. We will pay cumulative cash dividends on the Series A Preferred Stock, when and as declared by our Board of Directors, at the rate of 10% of the $25,000.00 liquidation preference ($25.00 per depositary share) per year (equivalent to $2,500 or $2.50 per depositary share). Dividends are payable quarterly in arrears, on or about the last day of January, April, July and October, beginning on or about April 30, 2021; provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day, and no interest, additional dividends or other sums will accumulate. Dividends will accumulate and be cumulative from, and including December 22, 2020, the date of original issuance. The first dividend was scheduled to be paid and was paid on or about April 30, 2021 in the amount of $0.88889 per depositary share. This dividend payment covered the period from and including December 22, 2020 through, but not including, April 30, 2021. Warrants As of December 31, 2020, there were warrants outstanding to acquire 8,668,746 shares of the Company’s Common Stock. These warrants were issued in connection with the equity infusion related to reverse recapitalization. The warrants entitle the registered holder to purchase one share of our Class A Common Stock at a price of $11.50 per share, subject to certain adjustments. The warrants will expire five years after February 14, 2020, the date reverse recapitalization was completed or earlier upon redemption or liquidation. Prior to the reverse recapitalization, t he 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 2017 Warrants”). The 2017 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 2017 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 of the warrants simultaneously at a per common share price equal to the per unit set for the sale transaction. On February 14, 2020, the Company consummated its reverse recapitalization. As a result, the Company redeemed all the 2017 Warrants outstanding upon closing of the reverse recapitalization and as of December 31, 2020, there were no warrant liabilities on the Consolidated Balance Sheet associated with the 2017 Warrants. On April 12, 2021, we exchanged all 8,668,746 of our outstanding warrants into shares of our common stock at an exchange ratio of 0.263 shares of common stock per warrant, for an aggregate issuance of approximately 2,279,874 shares of common stock in the exchange. Also, on April 12, 2021, the Acting Chief Accountant and Acting Director of the Division of Corporation Finance of the 17 Securities and Exchange Commission (the “SEC”) released the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies. See Note 18, Subsequent Events – Warrant Exchange and Part II, 1A “Risk Factors” fo r further information. NOTE 14 — 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 $0.3 million and $0 million for the three months ended March 31, 2021, and 2020 respectively. As of March 31, 2021, the total unrecognized compensation expense related to the non-vested portion of the Company's restricted stock awards was $1.4 million, which is expected to be recognized over a weighted average period of 2.4 years. The following table summarizes our restricted stock unit activity as of March 31, 2021: Restricted Stock Units Number of units Weighted average grant date fair value As of December 31, 2020 300,000 $ 7.60 Granted — — Vested (65,000 ) 7.60 Forfeited — — As of March 31, 2021 235,000 $ 7.60 NOTE 15 — 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 March 31, 2021 and December 31, 2020. The following is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring basis: 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”) 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 performance milestones . 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. The earn-out will be remeasured at each balance sheet date using this approach and any resulting increase or decrease will be reflected in the income statement. Going forward, volatility in the amount of PeakLogix’s actual results and forecasted scenarios could impact the fair value of this contingent consideration. 18 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 1 6 , 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 16, Business Combinations for further information. Hilo Equipment & Services (“Hilo”) The purchase agreement for the Hilo acquisition provides an 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 the present value of probability weighted expected future results. See Note 16, Business Combinations for further information. The following table sets forth, by level of hierarchy, the Company’s recurring measures at fair value as of March 31, 2021 and December 31, 2020, which was presented in “Other Liabilities” on the Consolidated Balance Sheet: March 31, 2021 Level 1 Level 2 Level 3 Liabilities: Contingent consideration $ — $ — $ 1.8 December 30, 2020 Level 1 Level 2 Level 3 Liabilities: Contingent consideration $ — $ — $ 1.8 The following is a summary of changes to Level 3 instruments as of March 31, 2021 and December 31, 2020: Contingent Consideration Balance, January 1, 2020 $ — Acquisition of PeakLogix 1.0 Acquisition of Hilo 0.8 Change in fair value — Balance, December 31, 2020 1.8 Change in fair value — Balance, March 31, 2021 $ 1.8 19 NOTE 16 — BUSINESS COMBINATIONS The following table summarizes the net assets acquired from the acquisitions in 2021 (amounts in millions): ScottTech Cash $ 0.5 Accounts receivable 0.9 Inventory 0.3 Prepaid and other assets 0.1 Property and equipment, net 0.4 Goodwill 1.5 Total Assets $ 3.7 Accounts payable (0.3 ) Accrued expenses (0.1 ) Other current liabilities (0.9 ) Total Liabilities $ (1.3 ) Net Assets Acquired $ 2.4 Assets acquired net of cash $ 1.9 SCOTTTECH, LLC (“ScottTech”) On March 1, 2021, the Company acquired all the assets of ScottTech, for a total purchase price of $2.4 million, paid out of available funds. 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. 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 acquisitions in 2020 (amounts in millions): Flagler Liftech Peak Hilo Martin Howell Vantage Total Cash $ 0.4 $ — $ 3.0 $ 2.1 $ — $ — $ — $ 5.5 Accounts receivable 15.1 4.4 4.6 5.4 1.0 5.3 3.6 39.4 Inventory 37.5 9.6 0.4 4.7 6.8 6.3 7.6 72.9 Prepaid and other assets 0.5 1.0 0.2 0.2 — — 0.4 2.3 Rental fleet, net 47.8 4.7 — 7.5 6.3 12.4 15.9 94.6 Property and equipment, net 2.9 1.2 0.2 1.7 — 1.1 0.9 8.0 Intangible assets 14.6 1.2 5.8 2.4 1.5 — — 25.5 Goodwill 5.8 1.5 0.7 3.2 0.8 3.2 0.5 15.7 Total Assets $ 124.6 $ 23.6 $ 14.9 $ 27.2 $ 16.4 $ 28.3 $ 28.9 $ 263.9 Floor plan payable (29.0 ) (3.5 ) — (4.4 ) — (0.8 ) (2.5 ) (40.2 ) Accounts payable (14.0 ) (1.6 ) (1.5 ) (2.8 ) (0.2 ) (1.0 ) (1.5 ) (22.6 ) Accrued expenses (4.1 ) — (0.1 ) (0.3 ) (0.1 ) (0.1 ) (0.6 ) (5.3 ) Other current liabilities — (0.1 ) (3.9 ) (0.4 ) — — (0.1 ) (4.5 ) Other liabilities (1.3 ) — — — — — — (1.3 ) Total Liabilities $ (48.4 ) $ (5.2 ) $ (5.5 ) $ (7.9 ) $ (0.3 ) $ (1.9 ) $ (4.7 ) $ (73.9 ) Net Assets Acquired $ 76.2 $ 18.4 $ 9.4 $ 19.3 $ 16.1 $ 26.4 $ 24.2 $ 190.0 Assets acquired net of cash $ 75.8 $ 18.4 $ 6.4 $ 17.2 $ 16.1 $ 26.4 $ 24.2 $ 184.5 20 Flagler On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Flagler for a total purchase price, net of cash, of $75.8 million, which was paid out of funds from the closing of the reverse recapitalization. The acquisition has been accounted for as a purchase business combination. 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. 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 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. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $79.0 million. Liftech 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. The acquisition has been accounted for as a purchase business combination. 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. 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 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. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $15.2 million. PeakLogix 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 throughout a 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 15, Fair Value Instruments for further information. The acquisition has been accounted for as a purchase business combination. 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. 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. 21 The following table summarizes the component s of the purchase price at June 12, 2020 : Cash consideration paid * $ 5.7 Promissory Note 1.0 Present value of non-contingent earn-out liability 1.7 Earn-out liability 1.0 Total purchase price $ 9.4 * Includes $3.0 million cash acquired as part of the Business Combination Hilo On July 1, 2020, the Company acquired all the assets of Hilo for total purchase price, net of cash, of $17.2 million which was paid out of available funds, and potential earn out payments of an additional $1.0 million. The acquisition has been accounted for as a purchase business combination. 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. 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 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. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $19.0 million. The following table summarizes the component of the purchase price at July 1, 2020: Cash consideration paid * $ 18.5 Earn-out liability 0.8 Total purchase price $ 19.3 * Includes $2.1 million cash acquired as part of the Business Combination Martin Implement Sales, Inc. (“Martin”) On September 1, 2020, the Company acquired all the assets of Martin for a total purchase price of $16.1 million, which included floorplan eligible new equipment inventories that was paid out of available funds. The acquisition has been accounted for as a purchase business combination. 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. 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 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. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $10.6 million. 22 Howell Tractor and Equipment, LLC (“Howell”) On October 30, 2020, the Company acquired all the assets of Howell for a total cash consideration of $22.4 million. The Company issued 507,143 shares of its common stock, valued at $4.0 million, in connection with the purchase agreement, yielding a total purchase price of $26.4 million. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $23.1 million. 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. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses. Vantage Equipment, LLC (“Vantage”) On December 31, 2020, the Company acquired all the assets of Vantage for a total purchase price of $24.2 million. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $22.5 million. 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. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses . Pro forma financial information – 2021 The financial effect of the 2021 acquisition, was not material to the consolidated financial statements. As such, pro forma results of operations have not been presented. Pro forma financial information – 2020 The Company completed the Flagler acquisition on February 14, 2020. 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. The pro forma information below gives effect to the Flagler acquisition as if the acquisition occurred on January 1, 2020. For the three months ended March 31, 2020 (amounts in millions) The Company Flagler Total Total revenues $ 180.5 $ 25.8 $ 206.3 Net loss $ (17.0 ) $ (0.1 ) $ (17.1 ) 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 17 — SEGMENTS The Company has two reportable segments: Material Handling and Construction Equipment. The “Material Handling” segment has been previously reported as our “Industrial” segment. The Company’s segments are determined based on management structure, which is organized based on types of products sold, as described in the following paragraph. The operating results for each segment are reported separately to the Company’s Chief Executive Officer to make decisions regarding the allocation of resources, to assess the Company’s operating performance and to make strategic decisions. 23 The Material Handling segment is principally engaged in operations related to the sale, service, and rental of lift trucks and other m aterial h andling equipment in Michigan, Illinois, Indiana , New York (including New York City) , Virginia as well as the New England region (including Boston) of the United States . As of March 31, 202 1 , the Material Handling segment included the ScottTech acquisition and its related results for the quarter . The Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Illinois, New York (not including New York City), Florida and the New England region (including Boston) of the United States. 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. For the quarter ended March 31, 2021, Corporate incurred expenses associated with compensation (including shared based compensation) of our directors, corporate officers and certain members of our shared-services leadership team, consulting and legal fees related to acquisitions and capital raising activities, corporate governance and compliance related matters, certain corporate development related expenses and interest expense associated with original issue discounts and deferred financing cost related to previous capital raises, which were offset with income tax benefit. For the quarter ended March 31, 2020, Corporate incurred $7.6 million in debt extinguishment fees, $7.6 million in transaction costs and other expenses associated with the reverse recapitalization. Additionally, as it relates to certain allocated corporate level expenses (e.g. audit, tax and other professional fees, interest, IT and HR related expenses, certain corporate marketing expenses, etc.), the Company evaluates and analyzes the appropriateness of expense allocations to each of its business units (and therefore segments) on an annual basis and makes necessary adjustments to these allocations at year-end. The Company uses metrics such as headcount, revenue and total assets, where appropriate, to develop these allocations. In connection with the purchase of NITCO LLC in 2019, the Company expanded its full-service material handling and construction equipment dealer operations into New England market. Given that the sales of the business was more heavily-weighted to material handling versus construction and that NITCO’s reporting systems made it difficult for the construction business to be observed separate from the Material Handling operation, NITCO’s total financial results were historically presented within our Material Handling segment. On January 1, 2021, with the migration of the NITCO business to the Company’s main ERP system, the Company is now able to report the results for the Material Handling and Construction Equipment results within their respective segments for the NITCO business unit. As such, the Company has re-casted certain prior period segment-level results for the NITCO business unit to be consistent with the current period presentation for appropriate period-over-period comparability. The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2021 (amounts in millions): Material Handling Construction Equipment Corporate Total New and used equipment sales $ 57.4 $ 66.4 $ — $ 123.8 Parts sales 15.2 26.2 — 41.4 Service revenue 22.6 16.1 — 38.7 Rental revenue 11.1 22.0 — 33.1 Rental equipment sales 0.5 31.3 — 31.8 Total revenue $ 106.8 $ 162.0 $ — $ 268.8 Interest expense 2.2 3.1 0.4 5.7 Depreciation and amortization 4.6 16.8 — 21.4 Net income (loss) $ 1.3 $ (3.3 ) (3.7 ) $ (5.7 ) 24 The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2020 (amounts in millions): Material Handling Construction Equipment Corporate Total New and used equipment sales $ 39.7 $ 42.5 $ — $ 82.2 Parts sales 14.1 14.6 — 28.7 Service revenue 19.7 10.5 — 30.2 Rental revenue 10.6 14.6 — 25.2 Rental equipment sales 3.5 10.7 — 14.2 Total revenue $ 87.6 $ 92.9 $ — $ 180.5 Interest expense 1.4 2.5 2.0 5.9 Depreciation and amortization 4.6 9.3 — 13.9 Net income (loss) $ 1.3 $ (2.2 ) $ (16.1 ) $ (17.0 ) The following table presents the Company’s identified assets by reportable segment for the period ending March 31, 2021 and December 31, 2020 (amounts in millions): March 31, 2021 December 31, 2020 Segment assets: Material Handling $ 220.7 $ 221.5 Construction Equipment 522.6 523.4 Corporate 1.7 1.3 Total assets $ 745.0 $ 746.2 NOTE 18 — SUBSEQUENT EVENTS Warrant Exchange On April 12, 2021, we exchanged all 8,668,746 of our outstanding warrants into shares of our common stock at an exchange ratio of 0.263 shares of common stock per warrant, for an aggregate issuance of approximately 2,279,874 shares of common stock in the exchange. Also, o n April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the “SEC Statement”). The SEC Statement sets forth the conclusion of the SEC’s Office of the Chief Accountant that certain provisions included in the warrant agreements entered into by many special purpose acquisition companies require such warrants to be accounted for as liabilities measured at fair value, rather than as equity. The SEC Statement also directs issuers who have accounted for these warrants as equity to consider whether the impact of the change in accounting treatment is material and thus require a restatement of previously issued financial statements. In this Form 10-Q and in our financial statements prior to the exchange of warrants for shares of our common stock, we have classified our private placement warrants and public warrants as equity. We evaluated the SEC Statement with respect to our accounting treatment of our warrants and have determined that such guidance would have resulted in the private placement warrants, and not the public warrants, being classified as liabilities on the balance sheet as of December 31, 2020 with the mark to market change in fair value reflected in the statement of operations. Accordingly, we have performed an evaluation of the materiality of this matter in accordance with Staff Accounting Bulletin 99 (“SAB 99”). Notably, of the 8,668,746 warrants that were outstanding since the Business Combination was consummated on February 14, 2020 only 206,250 were private placement warrants subject to liability treatment based on the SEC Statement. To that end, based on our SAB 99 assessment, which included fair value analysis of the 206,250 private placement warrants, we determined that classifying the private placement warrants as liabilities on the balance sheet, versus equity, is immaterial to our historic financial statements and that a restatement is unnecessary. Issuance of 5.625% Senior Secured Second Lien Notes due 2026 25 On April 1, 2021,we completed a private offering of $ 315 million of our 5.625 % Senior Secured Second Lien Notes due 2026 (the “Notes”). The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended, pursuant to a purchase agreement among the Company, the guarantors party thereto (the “Guarantors”) and J.P. Morgan Securities LLC, as representative of the initial purchasers. The Notes are guaranteed by the Guarantors (the “Guarantees” and, together with the Notes, the “Securities”) on a second lien, senior secured basis. The Notes will also be guaranteed by each of our existing and future domestic subsidiaries that becomes a borrower or guarantor under our or the Guarantors’ indebtedness, including the Credit Agreements (as defined below), amended and restated concurrently with the closing of the Notes offering. The Notes and the Guarantees are secured, subject to certain exceptions and permitted liens, by second-priority liens on substantially all of our assets and the assets of the Guarantors that secure on a first-priority basis all of the indebtedness under our ABL Facility (as defined below) and the Floor Plan Facility (as defined below) and certain hedging and cash management obligations, including, but not limited to, equipment, fixtures, inventory, intangibles and capital stock of our restricted subsidiaries now owned or acquired in the future by us or the Guarantors. The Notes were issued pursuant to an indenture dated April 1, 2021 (the “Indenture”), among us, the Guarantors and Wilmington Trust, National Association, as trustee and as collateral agent. The Notes will bear interest at the rate of 5.625% per annum and will mature on April 15, 2026. Interest on the Notes is payable in cash on April 15 and October 15 of each year, beginning on October 15, 2021. The Company used the net proceeds from the sale of the Notes and the new borrowings under the ABL Facility and the Floor Plan Facility, to repay its $147.3 million second lien term loan facility, to repay and refinance a portion of the ABL Facility and the Floor Plan Facility and to pay related fees and expenses. Amended and Restated Credit Arrangements On April 1, 2021, in connection with the offering of the Notes, we entered into: (i) a Sixth Amended and Restated ABL First Lien Credit Agreement, dated April 1, 2021, among us, our subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders who are parties to the agreement (the “ABL Credit Agreement” and the facility thereunder, the “ABL Facility”); and (ii) a Sixth Amended and Restated Floor Plan First Lien Credit Agreement among us, certain of our subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders who are parties to the agreement (the “Floor Plan Credit Agreement” and the facility thereunder, the “Floor Plan Facility”). The ABL Facility is an asset-based revolving loan facility that provides for borrowings of up to the lesser of $350 million or the borrowing base, in each case, less outstanding loans and letters of credit. The ABL Facility has a maturity date of the earlier of (a) April 1, 2026, or (b) December 1, 2025 if the Notes remain outstanding on December 1, 2025. The Floor Plan Facility is an asset-based revolving loan facility related to the floor plan equipment that provides for borrowings of up to the lesser of $40 million or the borrowing base. The Floor Plan Facility has an expiration date of the earlier of (a) April 1, 2026, or (b) December 1, 2025 if the Notes remain outstanding on December 1, 2025. 26