What changed in this filing

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Item 1. Financial Statements

2021-08-12 compared with 2021-05-13 · 241 added, 174 removed, 597 unchanged (41% of the section changed)

5 unchanged sentences

CURRENT ASSETS

Accounts receivable, net of allowances of $7.9 and $7.1 as of March 31, 2021 and December 31, 2020, respectively

Accounts receivable, net of allowances of $ 9.4 and $ 7.1 as of June 30, 2021 and December 31, 2020, respectively

Inventories, net

25 unchanged sentences

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

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 June 30, 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

32,363,376 issued and outstanding at June 30, 2021, 30,018,502 issued and outstanding at December 31, 2020

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

(in millions, except share and per share amounts)

21 unchanged sentences

Income tax provision (benefit)

Basic and diluted loss per share

Basic and diluted weighted average common shares outstanding

Preferred stock dividends

Net loss available to common shareholders

Basic loss per share

Diluted loss per share

Basic weighted average common shares outstanding

Diluted weighted average common shares outstanding

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

1 unchanged sentence

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIT)

Three Months Ended March 31, 2021

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Three Months Ended June 30, 2021

Preferred Stock

1 unchanged sentence

Treasury Stock

Stockholder’s

Balance at December 31, 2020

Stockholders'

Equity (Deficit)

Balance at March 31, 2021

Dividends on preferred stock

Share based compensation

Warrants exchanged into common stock

Issuance of restricted stock units to employees

Balance at June 30, 2021

Three Months Ended June 30, 2020

Preferred Stock

(amounts in millions, except share amounts)

Treasury Stock

Stockholders'

Equity (Deficit)

Balance at March 31, 2020

Three Months Ended March 31, 2020

Opening deferred tax liabilities under reverse recapitalization

Disgorgement of short swing profits

Balance at June 30, 2020

Six Months Ended June 30, 2021

Preferred Stock

(amounts in millions, except share amounts)

Accumulated Deficit

Treasury Stock

Stockholder’s

Stockholders'

Equity (Deficit)

Balance at December 31, 2020

Dividends on preferred stock

Share based compensation

Warrants exchanged into common stock

Issuance of restricted stock units to employees

Balance at June 30, 2021

Six Months Ended June 30, 2020

Preferred Stock

(amounts in millions, except share amounts)

Treasury Stock

Stockholders'

Equity (Deficit)

Balance at December 31, 2019

Opening deferred tax liabilities under reverse recapitalization

1 unchanged sentence

Shares issued upon settlement of equity-linked incentive plan

Disgorgement of short swing profits

Repurchases of common stock

Balance at March 31, 2020

Balance at June 30, 2020

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

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(amounts in millions)

OPERATING ACTIVITIES

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

Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:

Depreciation and amortization

Amortization of debt discount and debt issuance costs

Amortization of fair market rent

Imputed interest

4 unchanged sentences

Loss on debt extinguishment

Repayment of paid-in-kind interest

Share based compensation

Changes in deferred rent

(Repayment) accrual of paid-in-kind interest

Changes in deferred taxes

6 unchanged sentences

Leases and other liabilities

Net cash used in operating activities

Net cash provided by (used in) operating activities

INVESTING ACTIVITIES

15 unchanged sentences

Proceeds from issuance of long-term debt, net

Proceeds from issuance of notes

Preferred dividends paid

Payment of promissory note

Payments on long-term debt

1 unchanged sentence

Equity proceeds from reverse recapitalization, net

Proceeds from disgorgement of short swing profits

Repurchases of common stock

6 unchanged sentences

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

NOTE 1 — ORGANIZATION A ND NATURE OF OPERATIONS

NOTE 1 — ORGANIZATION AND NATURE OF OPERATIONS

Alta Equipment Group Inc.

18 unchanged sentences

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.

Operating results for the six months ended June 30, 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.

The updates to depreciable useful lives will be adjusted on prospective basis.

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.

10 unchanged sentences

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.

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.

5 unchanged sentences

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.

The Company was formed in 2020 for income tax purposes.

56 unchanged sentences

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.

At June 30, 2021 and December 31, 2020, the total lease liability relating to these various equipment sale transactions amounted to $ 3.1 million and $ 3.8 million, respectively.

The Company also recognized a liability for its guarantee to repurchase the equipment at the residual amounts of $ 7.7 million and $ 9.0 million as of June 30, 2021 and December 31, 2020, respectively.

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

5 unchanged sentences

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.

The Company also enters into contracts with customers 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 is 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.

13 unchanged sentences

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.

Total deferred revenue relating to automated equipment installation and system integration services, service sales agreements and rental agreements as of June 30, 2021 and December 31, 2020 was $ 13.1 million and $ 9.6 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 March 31, 2021 and 2020 by revenue type, and by the applicable accounting standard.

The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statements of Operations for the three months June 30, 2021 and 2020 by revenue type, and by the applicable accounting standard.

Three months ended

March 31, 2021

June 30, 2021

Three months ended

March 31, 2020

June 30, 2020

New and used equipment sales

2 unchanged sentences

Rental equipment sales

The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statements of Operations for the six months June 30, 2021 and 2020 by revenue type, and by the applicable accounting standard.

Six months ended

June 30, 2021

Six months ended

June 30, 2020

New and used equipment sales

Service revenue

Rental revenue

Rental equipment sales

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.

18 unchanged sentences

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.

The Company recognized approximately $ 21.4 million and $ 0.5 million in revenues for the six month period ended June 30, 2021 and 2020, respectively and approximately $ 13.5 million and $ 0.5 million in revenues for the three month period ended June 30, 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.

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

3 unchanged sentences

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 periodic maintenance service revenues at the time such services are completed, which is when the control of the promised services 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.

Revenue recognized from guaranteed maintenance contracts totaled $ 8.9 million and $ 7.8 million for the six-month period ended June 30, 2021, and 2020, respectively and $ 4.6 million and $ 3.8 million for the three-month period ended June 30, 2021, and 2020, 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.

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.

21 unchanged sentences

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.

Total rent expense under these lease agreements for both the six months ended June 30, 2021 and June 30, 2020 was $ 2.4 million and for both the three months ended June 30, 2021 and June 30, 2020 was $ 1.2 million.

NOTE 5 — INVENTORIES

5 unchanged sentences

Inventory reserves

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.

Direct labor of $ 0.7 million and $ 1.7 million incurred for open service orders were capitalized and included in work in process at June 30, 2021 and December 31, 2020, respectively.

The remaining work in process balances as of June 30, 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 $ 1.2 million and $ 3.2 million for the three and six months ended June 30, 2021 and was $ 0.7 million and $ 1.5 million for the three and six months ended June 30, 2020.

NOTE 6 — PROPERTY AND EQUIPMENT

9 unchanged sentences

Total accumulated depreciation and amortization

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.

Total depreciation and amortization on property and equipment was $ 40.1 million and $ 28.4 million for the six months ended June 30, 2021, and 2020 and $ 21.4 million and $ 14.6 million for the three months ended June 30, 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.

Such assets had gross carrying values totaling $ 3.8 million and $ 4.0 million, and accumulated amortization balances totaling $ 2.6 million and $ 2.5 million, as of June 30, 2021, and December 31, 2020, respectively.

Of the $ 445.4 million and $ 418.5 million of gross cost of rental fleet, $ 11.3 million and $ 13.0 million were represented by guaranteed purchase obligation (“GPO”) assets as of June 30, 2021, and December 31, 2020, respectively.

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):

The following table summarizes the changes in the carrying amount of goodwill in total and by reportable segment as of June 30, 2021, and December 31, 2020 (amounts in millions):

Balance, December 31, 2020

Balance, March 31, 2021

Adjustments to purchase price allocations

Balance, June 30, 2021

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

The gross carrying amount of intangible assets and accumulated amortization as of June 30, 2021 and December 31, 2020 were as follows (amounts in millions):

June 30, 2021

December 31, 2020

4 unchanged sentences

Favorable market rent

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.

Amortization of intangible assets were $ 0.8 million and $ 1.5 million for the three and six months ended June 30, 2021, and $ 0.6 million and $ 0.7 million for the three and six months ended June 30, 2020, respectively.

The amortization of favorable market rent is recorded to rent expense.

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.

On April 1, 2021, the Company entered into a Sixth Amended and Restated ABL First Lien Credit Agreement (the “Amended and Restated ABL 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.

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.

The Amended and Restated ABL Credit Agreement, among other things, (i) increased the asset based revolving line of credit (the “ABL Facility”) borrowing capacity from $ 300 million to $ 350 million, (ii) modified certain financial covenants, and (iii) removed the limitation on credit line borrowings if floorplan facilities exceeded $225 million.

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.

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 .

The amendment generally allowed for dividend payments to be made on the Preferred Stock without having to meet a leverage threshold, it excluded the Preferred dividend payments from affecting the second lien prepayment requirement, and it increased 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.

The Fifth Amended and Restated ABL First Lien Credit Agreement was superseded and replaced by the Sixth Amended and Restated ABL First Lien Credit Agreement.

On April 1, 2021, the Company entered into a Sixth Amended and Restated Floor Plan First Lien Credit Agreement (the “Amended and Restated Floor Plan Credit Agreement”, which establishes the “First Lien Floor Plan Facility”, and together with the Amended and Restated ABL Credit Agreement, collectively the “Credit Agreements”) 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, which among other things, modified certain financial covenants.

Line of Credit and Floor Plan — First Lien Lender

1 unchanged sentence

The ABL Facility has a maximum borrowing capacity of $ 350 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 June 30, 2021, the Company had an outstanding ABL Facility balance of $ 33.8 million, excluding unamortized debt issuance costs.

The effective interest rate was 2.2 % at June 30, 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 Company has a First Lien Floor Plan Facility with its first lien lender to primarily finance new inventory.

This First Lien Floor Plan Facility has a maximum borrowing capacity of $ 40 million.

The interest cost for the First Lien Floor Plan Facility is LIBOR plus an applicable margin.

The First Lien Floor Plan Facility is collateralized by substantially all assets of the Company.

As of June 30, 2021, the Company had an outstanding balance on their First Lien Floor Plan Facility of $ 30.0 million, excluding unamortized debt issuance costs.

The effective interest rate at June 30, 2021 was 2.8 %.

As of December 31, 2020, the Company had an outstanding balance on their First Lien 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 Company has floor plan financing facilities with several OEM captive lenders and suppliers (the “OEM Floor Plan Facilities”, and together with the First Lien Floor Plan Facility, collectively the “Floor Plan Facilities”) 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 OEM Floor Plan Facilities for purchases of new equipment inventories.

Certain OEM Floor Plan Facilities provide for up to twelve-months interest only or deferred payment periods.

In addition, certain OEM Floor Plan Facilities provide for interest and principal free terms at the OEMs’ discretion.

The Company routinely sells equipment that is financed under OEM Floor Plan Facilities prior to the original maturity date of the financing agreement.

When this occurs, the payable under the applicable OEM Floor Plan Facility related to the financed equipment being sold becomes due to be paid at the time of sale.

With the recent acquisitions, some of the Company’s OEM Floor Plan Facilities were amended to include new locations and new entities.

The OEM Floor Plan 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.

The effective rates, excluding the favorable effect of interest-subsidies, as of June 30, 2021 ranged from 0.0 % to 10.4 %.

As of June 30, 2021, and December 31, 2020, the Company had an outstanding balance on the OEM Floor Plan Facilities of $ 127.7 million and $ 122.2 million respectively.

The total aggregate amount of financing under the Floor Plan Facilities cannot exceed $ 250.0 million at any time.

The total outstanding balance under the Floor Plan Facilities as of June 30, 2021, and December 31, 2020, was $ 157.7 million and $ 157.5 million, respectively, excluding unamortized debt issuance costs.

For the six months ended June 30, 2021, and 2020, the Company recognized interest expense associated with new equipment financed under its Floor Plan Facilities of $ 1.0 million and $ 1.3 million, respectively and $ 0.5 million and $ 0.3 million for the three months ended June 30, 2021, and 2020 respectively.

Maximum borrowings under the floor plans and ABL Facility are limited to $ 600 million unless certain other conditions are met.

The total amount outstanding as of June 30, 2021, and December 31, 2020, was $ 191.5 million and $ 316.6 million, exclusive of debt issuance and deferred financings costs of $ 2.7 million and $ 1.5 million, respectively.

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.

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.

On April 1, 2021, the Company completed a private offering of our Senior Secured Second Lien Notes (the “Notes”), for the purposes of, among other things, repayment and refinancing of a portion of the Company’s prior existing debt, reducing interest rate exposure and providing liquidity for financing of future growth initiatives.

Senior Secured Second Lien Notes

On April 1, 2021, the Company sold $ 315 million of our 5.625% Notes which are due in 2026.

The Notes are guaranteed (the “Guarantees” and, together with the Notes, the “Securities”) by the guarantor’s party thereto (the “Guarantors”) on a second lien, senior secured basis.

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, and J.P.

Morgan Securities LLC, as representative of the initial purchasers.

The Notes are 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 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 and the Floor Plan Facility 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 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.

As of June 30, 2021, outstanding borrowings under the Notes were $ 315.0 million, which included $ 5.7 million deferred financing costs and original issue discounts.

The effective interest rate on the Notes, taking into account the original issue discount, is 5.93 %

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

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

On April 1, 2021, in connection with the new Notes, the Company repaid all of its outstanding obligations under the Term Loan, $ 147.3 million, completely discharging the Company of any further obligations to the lender .

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.

In the second quarter of 2021, and in connection with the repayment of the Term Loan, the Company recorded a loss on the extinguishment of debt in the amount of $ 11.9 million in the line item “Loss on Extinguishment of Debt” in its Consolidated Statements of Operations.

This was in accordance with ASC Topic No.

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470), as the transaction was determined to be an extinguishment of the existing debt and an issuance of new debt.

In the second 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):

High Yield Notes

Unamortized debt issuance costs

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Long-term debt, net

As of March 31, 2021, the Company was in compliance with the financial covenants set forth in its debt agreements.

As of June 30, 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.

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 which was due one year from the date of the acquisition.

As of June 30, 2021, the Promissory Note of $ 1.1 million, inclusive of accrued interest, was paid in full.

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.

Pursuant to the asset 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 June 30, 2021, the Company recorded a $ 1.8 million liability which included a $ 1.7 million related to present value of these minimum cash payments using a market participant discount rate and $ 0.1 million of imputed interest.

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

See Note 15, Fair Value Instruments and Note 16, Business Combinations for further information.

NOTE 11 — CONTINGENCIES

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.

As of June 30, 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.

The estimated exposure related to these guarantees was $ 1.3 million and $ 2.4 million at June 30, 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.

therefore, no amount has been accrued on the Consolidated Balance Sheets at June 30, 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.

During the six months ended June 30, 2021 and June 30, 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.

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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.

As of June 30, 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

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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,

The income tax provision (benefit) for the three and six months ended June 30, 2021 and 2020 consisted of the following:

Three Months Ended June 30,

Six Months Ended June 30,

Federal taxes-current

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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.

The Company recorded an income tax expense of $ 0.0 million and a benefit of $ 0.4 million for the three months ended June 3 0 , 2021 , and 2020 and an income tax expense of $ 0.5 million and an income tax benefit of $ 1.5 million for the six months ended June 30 , 20 2 1 and 2020 respectively .

As a result of Alta’s second quarter 2021 analysis of the realizability of its deferred tax asset, and after considering tax planning initiatives and other inputs, Alta determined that it was more likely than not that deferred tax asset would not be realized and has thus maintained a full valuation allowance against the deferred tax asset.

Alta reviews the realizability of its deferred tax asset 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.

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.

The effective tax rate for the six months ended June 30, 2021 was ( 2.2 )% when compared to 22.7 % for the period from February 14, 2020 to June 30, 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.

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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.

As of June 30, 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

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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.

On April 9, 2021, the Company declared a cash dividend $ 0.89 per depositary share, which was paid on April 30, 2021 to holders of record as of the close of business on April 15, 2021.

This dividend payment covered the period from and including December 22, 2020 through, but not including April 30, 2021.

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.

As of December 31, 2020, there were warrants outstanding to acquire 8,668,746 shares of the Company’s Common Stock.

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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.

The warrants were to expire five years after February 14, 2020, the date the 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”).

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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.

Also, on April 12, 2021, the Acting Chief Accountant and Acting Director of the Division of Corporation Finance of the

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.

During the second quarter 2021, the Compensation Committee of our Board of Directors approved the grant of 114,292 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.

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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:

The Company recognized total compensation expense of $ 0.5 million and $ 0 million for the six months ended June 30, 2021, and 2020 respectively.

As of June 30, 2021, the total unrecognized compensation expense related to the non-vested portion of the Company's restricted stock awards was $ 2.7 million, which is expected to be recognized over a weighted average period of 2.5 years.

The following table summarizes our restricted stock unit activity as of June 30, 2021:

Restricted Stock Units

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Weighted average grant date fair value

As of December 31, 2020

As of March 31, 2021

Unvested as of December 31, 2020

Vested-issued

Vested-unissued

Unvested as of June 30, 2021

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:

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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.

We estimated the fair value of the earn-out liability based on the present value of probability weighted expected future results and recorded a $ 0.8 million liability.

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

The following table sets forth, by level of hierarchy, the Company’s recurring measures at fair value as of June 30, 2021 and December 31, 2020, which was presented in “Other Liabilities” on the Consolidated Balance Sheet:

June 30, 2021

Contingent consideration

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Contingent consideration

The following is a summary of changes to Level 3 instruments as of March 31, 2021 and December 31, 2020:

The following is a summary of changes to Level 3 instruments as of June 30, 2021 and December 31, 2020:

Contingent Consideration

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Change in fair value

Balance, March 31, 2021

Balance, June 30, 2021

NOTE 16 — BUSINESS COMBINATIONS

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Prepaid and other assets

Rental fleet, net

Property and equipment, net

Intangible assets

Floor plan payable

Accounts payable

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Other current liabilities

Other liabilities

Total liabilities

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

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

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

Cash consideration paid *

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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 estimated fair values are provisional and are based on the information that was available as of the balance sheet date .

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.

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On October 30, 2020, the Company acquired all the assets of Howell for a total cash consideration of $ 23.0 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.

The Company also 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 $ 27.0 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 $ 23.7 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 acquisition has been accounted for as a purchase business combination.

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

Subsequent to the 2020 year-end audit, before one year from the acquisition date, the Company recorded a purchase price allocation and working capital adjustment of $ 0.6 million which yielded a total purchase price of $ 27.0 million.

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

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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.

Subsequent to the 2020 year-end audit, before one year from the acquisition date, the Company recorded a purchase accounting adjustment to its Vantage acquisition that increased net assets acquired by $ 0.1 million which yielded a total purchase price of $ 24.3 million.

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

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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)

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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.

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 Material Handling segment is principally engaged in operations related to the sale, service, and rental of lift trucks and other material handling 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 June 30, 2021, 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.

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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.

For the quarter ended June 30, 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.

Corporate incurred $ 11.9 million and $ 7.6 million in debt extinguishment fees for the quarters ended June 30, 2021 and June 30, 2020 respectively.

Corporate incurred an additional $ 7.6 million in transaction costs and other expenses associated with the reverse recapitalization for the quarter ended June 30, 2020.

Additionally, as it relates to certain allocated corporate level expenses (e.g.

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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

The following table presents the Company’s results of operations by reportable segment for the six months ended June 30, 2021 (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 March 31, 2020 (amounts in millions):

Material Handling

The following table presents the Company’s results of operations by reportable segment for the three months ended June 30, 2021 (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 March 31, 2021 and December 31, 2020 (amounts in millions):

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

New and used equipment sales

Service revenue

Rental revenue

Rental equipment sales

Total revenue

Interest expense

Depreciation and amortization

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):

New and used equipment sales

Service revenue

Rental revenue

Rental equipment sales

Total revenue

Interest expense

Depreciation and amortization

Net income (loss)

The following table presents the Company’s identified assets by reportable segment for the period ending June 30, 2021 and December 31, 2020 (amounts in millions):

Segment assets:

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Construction equipment

NOTE 18 — EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period.

Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period.

We include all common shares granted under our share-based compensation plan which remain unvested (“restricted stock units”), in the number of shares outstanding for our diluted EPS calculations using the treasury method.

Basic and diluted earnings per share for the three months ended June 30, 2021, and 2020, and for the six months ended June 30, 2021 and 2020 were calculated as follows (amounts in millions, except per share amounts):

Three Months Ended

Six Months Ended

(in millions, per share amounts)

Basic net income (loss) per share:

Basic weighted average common shares outstanding

Net income (loss) per share of common stock - basic:

Diluted net income (loss) per share:

Basic weighted average common shares outstanding

Effect of dilutive securities:

Effect of dilutive non-vested restricted stock units

Basic weighted average common shares outstanding - diluted

Net income (loss) per share of common stock - diluted

NOTE 19 — SUBSEQUENT EVENTS

Warrant 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

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”).

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.

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”);

(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.

We do not have any subsequent events to disclose.

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