☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~B. RILEY PRINCIPAL MERGER CORP.~~
~~(Exact Name of Registrant as Specified in Its Charter)~~

Indicate by check mark whether the ~~registrant:~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No ☒ ~~No ☐~~

As of November 6, 2023, there were 32,368,112 shares of Common Stock, $0.0001 par value, and 1,200 shares of Preferred Stock, $0.0001 par value, which Preferred Stock is evidenced by 1,200,000 depositary shares, outstanding.

As of May 16, 2019, there were 14,837,500 shares of the registrant’s Class A common stock, par value $0.0001 per share, and 3,593,750 shares of the registrant’s Class B common stock, par value $0.0001 per share, outstanding.

This Form 10-Q contains statements that, to the extent they are not recitations of historical fact, constitute forward-looking statements within the meaning of federal securities laws, and are based on our current expectations and assumptions. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements are not intended to guarantee future performance and are subject to risks and uncertainties. Actual results may differ materially due to factors such as:

These are only some of the factors that may affect the forward-looking statements contained in this Form 10-Q. For a discussion identifying additional important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, see our filings with the SEC including, but not limited to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, and in this Quarterly Report on Form 10-Q. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise.

~~B. RILEYPRINCIPAL MERGER CORP.~~CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

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

(1) Correction of ~~Cash Flows~~previously disclosed shares repurchased in 2020, not previously reported as a reduction of common stock shares outstanding. Amount is immaterial to the condensed consolidated financial statements.

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

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

~~B. Riley Principal Merger Corp. (the~~its subsidiaries (“Alta” or the “Company”) are engaged in the sale, service, and rental of material handling, construction, and environmental processing equipment in the states of Michigan, Illinois, Indiana, Ohio, New York (including New York City in our Material Handling segment), ~~a blank check corporation, was incorporated~~Virginia, Massachusetts, Maine, New Hampshire, Vermont, Connecticut, Rhode Island, Nevada, and Florida as ~~a Delaware corporation on October 30, 2018. The Company is an emerging growth company,~~well as ~~defined in Section 2(a)~~the Canadian provinces of Quebec and Ontario. Unless the context otherwise requires, the use of the ~~Securities Act~~terms “the Company”, “we”, “us,” and “our” in these notes to the condensed consolidated financial statements refers to Alta Equipment Group Inc. and its consolidated subsidiaries.

Basis of ~~1933, as amended, (the “Securities Act”), as modified by~~Presentation

The accompanying unaudited interim condensed consolidated financial statements include the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). On November 14, 2018, GA International Services Corp. (“GA International”), a California corporation, owned by Great American Group, LLC (“Great American”), a wholly owned subsidiary of B. Riley Financial, Inc. (“B. Riley Financial”), merged into the Company. GA International operated as GA International Services, LLC, a former California limited liability company, from the date of its incorporation on October 9, 2012 through November 5, 2018, the date it was converted from a limited liability company to a California corporation. All of the membership interests in GA International Services, LLC were issued to Great American in 2012. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (an “Initial Business Combination”).

~~At March 31, 2019, the Company had not commenced any operations. All activity~~consolidated accounts of the Company ~~includes the activity of GA International as if GA International, which was owned by the Company from inception~~ and activity related to the initial public offering on April 11, 2019 (the “Public Offering”) described below. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering described below. The Company has selected December 31st as its fiscal year end.

The Company completed the sale of 12,500,000 Units at an offering price of $10.00 per unit through the Public Offering. B. Riley Principal Sponsor Co., LLC (the “Sponsor”), a Delaware limited liability company, was incorporated on October 11, 2018 as a wholly owned indirect subsidiary of B. Riley Financial. The Sponsor subscribed to purchase an aggregate of 425,000 Units at a price of $10.00 per unit (the “Private Placement Unit”) in a private placement that closed on April 11, 2019 simultaneously with the Public Offering. The sale of the 12,500,000 Units generated gross proceeds of $125,000,000, less underwriting commissions of $2,500,000 (2% of gross proceeds) and other offering costs of $458,987. The Private Placement Units generated $4,250,000 of proceeds.

Each unit consists of one share of the Company’s Class A common stock, $0.0001 par value (each a “public share”), and one-half of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock (each, a “Warrant” and, collectively, the “Warrants” and, with respect to the warrants underlying the Private Placement Units, the “Private Placement Warrants”). One Warrant entitles the holder thereof to purchase one whole share of Class A common stock at a price of $11.50 per share.

The Company granted the underwriters a 45-day option to purchase on a pro rata basis up to 1,875,000 additional units at the initial public offering price less the underwriting discounts and commissions. On April 12, 2019, the Company consummated the closing of the sale of 1,875,000 additional units (“Overallotment Units”) upon receiving notice of the underwriters’ election to exercise their overallotment option, generating additional gross proceeds of $18,750,000 and incurring additional offering costs of $375,000 in underwriting fees. Simultaneously with the exercise of the overallotment, the Company consummated the Private Placement of an additional 37,500 Private Placement Units to the Sponsor, generating gross proceeds of $375,000. In addition, as a result of the underwriters’ election to exercise their overallotment option the Founder Shares, as defined in Note 3, were no longer forfeitable.

On November 16, 2018, the Sponsor agreed to loan the Company up to $300,000 (see Note 3) to support the Company’s initial formation and operations. At March 31, 2019 and December 31, 2018, $67,950 and $50,000 was outstanding, respectively, on the loan and such loan was repaid using proceeds from the Public Offering on April 12, 2019.

Upon completion of the Public Offering and issuance of the Overallotment Units, $143,750,000 of proceeds were deposited in the Trust Account to be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds registered under the Investment Company Act and compliant with Rule 2a-7 thereof that maintain a stable net asset value of $1.00. Unless and until the Company completes the Initial Business Combination, it may pay its expenses only from the net proceeds of the Public Offering held outside the Trust Account, which was $1,685,930 on April 11, 2019, of which $450,864 was used to pay unpaid offering costs payable and $67,950 was used to pay the promissory note payable to the Sponsor.

Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, the proceeds from the Public Offering may not be released from the Trust Account until the earliest of: (i) the completion of the Initial Business Combination; (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of its public shares if it does not complete the Initial Business Combination within 18 months from the closing of the Public Offering; or (iii) the redemption of all of the Company’s public shares if the Company is unable to complete the Initial Business Combination within 18 months from the closing of the Public Offering (at which such time up to $100,000 of interest shall be available to the Company to pay dissolution expenses), subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering and the Private Placement are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account less taxes payable on interest earned on the Trust Account. There is no assurance that the Company will be able to successfully effect an Initial Business Combination.

The Company, after signing a definitive agreement for an Initial Business Combination, will provide its public stockholders with the opportunity to redeem all or a portion of their shares upon the completion of the Initial Business Combination, either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its public shares and the related Initial Business Combination, and instead may search for an alternate Initial Business Combination.

If the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable. As a result, such shares of Class A common stock have been ~~recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering,~~prepared in accordance ~~with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.”~~

Pursuant to the Company’s amended and restated certificate of incorporation, if the Company is unable to complete the Initial Business Combination within 18 months from the closing of the Public Offering, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest but less taxes payable (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

The Company’s Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed, among other things (a) to waive their redemption rights with respect to any Founder Shares, Private Placement Shares and any Public Shares held by them in connection with the completion of the Initial Business Combination, (b) to waive their redemption rights with respect to their Founder Shares, Private Placement Shares and public shares in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the substance or timing of its obligation to redeem 100% of its public shares if it does not complete an Initial Business Combination within 18 months from the closing of the Public Offering and (c) to vote their Founder Shares and any public shares purchased during or after the Public Offering (including in open market and privately negotiated transactions) in favor of the Initial Business Combination.

B. Riley Principal Investments, LLC (“BRPI”), a Delaware limited liability company and an affiliate of the Sponsor, entered into a forward purchase agreement with the Company to provide for the purchase by it (or its designees) of an aggregate of 2,500,000 units at $10.00 per unit for an aggregate purchase price of $25,000,000 in a private placement to close concurrently with the closing of the Initial Business Combination.

The proceeds from the sale of the forward purchase units may be used as part of the consideration to the sellers in the Initial Business Combination, to pay expenses in connection with the Initial Business Combination or for working capital in the post-business combination company. The forward purchase will be required to be made regardless of whether any Class A common stock is redeemed by the Company’s public stockholders and is intended to provide the Company with a minimum funding level for the Initial Business Combination. The forward purchaser will not have the ability to approve the Initial Business Combination prior to the signing of a material definitive agreement. The forward purchase units will be issued only in connection with the closing of the Initial Business Combination.

The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares and Private Placement Shares held by them if the Company fails to complete the Initial Business Combination within 18 months of the closing of the Public Offering. However, if the Sponsor or any of the Company’s directors or officers acquires shares of Class A common stock in or after the Public Offering, they are entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Initial Business Combination within the prescribed time period.

In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s remaining stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The Company’s stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that the Company will provide its stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, under the circumstances, and, subject to the limitations, described herein.

~~The financial statements of the Company are presented in conformity~~ with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The Company’s unaudited condensed interim financial statements have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC for interim financial information and the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP. In ~~the~~our opinion, ~~of management,~~ all adjustments, consisting of all normal and recurring adjustments, considered necessary for a fair presentation of our condensed consolidated cash flows, statements of operations, and balance sheets for the periods presented have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or any other period. The accompanyingThese unaudited condensed ~~interim~~consolidated financial statements should be read in conjunction with the ~~Company’s audited~~2022 Form 10-K. All intercompany transactions and balances have been eliminated in the preparation of the condensed consolidated financial statements.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

We describe our significant accounting policies in Note 2 of the consolidated financial statements ~~and notes thereto included~~ in ~~the Company’s prospectus filed with the SEC~~our Annual Report on ~~April 9, 2019, as well as the Company’s audited balance sheet statement and notes thereto included in the Company’s~~ Form ~~8-K filed with the SEC on April 17, 2019.~~

~~Emerging Growth Company~~

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

~~Net Loss Per Common Share~~

The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding10-K for the period, excluding shares of common stock subject to forfeiture. Net loss per common share is computed by dividing net gain/(loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period, plus, to the extent dilutive, the incremental number of shares of common stock to settle warrants, as calculated using the treasury stock method. At March 31, 2019 andyear ended December 31, ~~2018,~~2022. During the ~~Company did not have any dilutive securities~~three and nine months ended September 30, 2023, there were no significant changes to those accounting policies other ~~contracts that could, potentially, be exercised or converted into common stock and then share~~than as disclosed below in the earnings of the Company under the treasury stock method. As a result, diluted loss per common share is the same as basic loss per common share for the periods. In connection with the Company’s merger with GA International on November 14, 2018, the Company completed a stock split 1 to 3,593,750 shares of Class B common stock on November 19, 2018. The financial statements have been retroactively adjusted to reflect the stock split for all periods presented.

New Accounting Pronouncements Adopted in 2023.

~~Concentration of Credit Risk~~

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

~~Financial Instruments~~

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheets, primary due to their short term nature.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires ~~the Company’s~~ 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. ~~Actual~~Estimates are based on assumptions that we believe are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results ~~could differ~~may differ.

New Accounting Pronouncements

New Accounting Pronouncements Adopted in 2023

Financial Instruments — Credit Losses

On January 1, 2023, we adopted ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("Topic 326"). 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, we recognize an allowance for our estimate of expected credit losses over the entire contractual term of our trade receivables from revenue transactions, except those ~~estimates.~~arising from rental revenues, from the date of initial recognition of the financial instrument. Estimates of expected credit losses over their contractual life are recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts.

The adoption of Topic 326 did not have a material impact on the Company's condensed consolidated financial statements and related disclosures or our existing internal controls as our non-rental accounts receivable are of short duration and there is not a material difference between incurred losses and expected losses.

NOTE 4 — RELATED PARTY TRANSACTIONS

During the fourth quarter 2022, substantially all of the Company's operating facilities that were previously leased from four real estate entities related through common ownership were sold to an unrelated third party. The Company continues to lease those facilities, however the lessor is no longer a related party. For the three and nine months ended September 30, 2022, total rent expense under related party lease agreements, all of which are classified as operating, was $1.2 million and $3.6 million, respectively.

Our Chief Executive Officer ("CEO"), Chief Financial Officer and Chief Operating Officer collectively own an indirect, non-controlling minority interest in OneH2, Inc. (“OneH2”), which they each acquired through various transactions that took place in early 2018 and prior. Our CEO is on the Board of Directors of OneH2. OneH2 is a privately held company that produces and delivers hydrogen fuel to end users. During the three and nine months ended September 30, 2023, the Company purchased $0.1 million and $0.4 million, respectively, of hydrogen fuel from OneH2. The Company paid OneH2 $1.1 million for the nine months ended September 30, 2023 in addition to $3.1 million during the year ended December 31, 2022, as part of the Company's investment to build and commercialize a hydrogen production plant which we expect to become operational in 2024.

NOTE 5 — INVENTORIES

The components of inventories, net, consisted of the following:


	September 30,			December 31,
	2023			2022
New equipment	$	337.8		$	258.5
Used equipment		62.8			59.0
Work in process		9.7			8.6
Parts		91.0			78.8
Gross inventory		501.3			404.9
Inventory reserves		(8.5	)		(5.2	)
Inventories, net	$	492.8		$	399.7

Direct labor of $1.8 million incurred for open service orders were capitalized and included in work in process at both September 30, 2023 and December 31, 2022. The remaining work in process balances as of September 30, 2023 and December 31, 2022 primarily represent parts applied to open service orders. Rental depreciation expense for new and used equipment inventory to be sold after short-term leases expire was $3.1 million and $2.3 million for the three months ended September 30, 2023 and 2022, respectively, and $8.7 million and $5.4 million for the nine months ended September 30, 2023 and 2022, respectively.

NOTE 6 — PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following:


	September 30,			December 31,
	2023			2022
Land	$	2.1		$	2.1
Rental fleet		590.2			516.4
Buildings, equipment, and leasehold improvements:
Machinery and equipment		7.8			8.6
Autos and trucks		6.9			7.1
Buildings and leasehold improvements		16.4			15.6
Construction in progress		8.1			4.3
Finance lease right-of-use assets		40.8			24.4
Office equipment		4.1			4.7
Computer equipment		12.7			13.1
Total cost		689.1			596.3

Less: accumulated depreciation and amortization:
Rental fleet		(206.6	)		(187.4	)
Buildings, equipment, autos and trucks, leasehold improvements, finance leases and office and computer equipment		(34.9	)		(31.1	)
Total accumulated depreciation and amortization		(241.5	)		(218.5	)
Property and equipment, net	$	447.6		$	377.8

Total depreciation and amortization on property and equipment was $29.9 million and $26.3 million for the three months ended September 30, 2023 and 2022, respectively, and $81.0 million and $71.7 million for the nine months ended September 30, 2023 and 2022, respectively. The Company had assets related to finance leases with gross carrying values totaling $40.8 million and $24.4 million, and accumulated amortization balances totaling $9.1 million and $5.4 million, as of September 30, 2023 and December 31, 2022, respectively. Of the $590.2 million and $516.4 million of gross cost of rental fleet, $9.5 million and $11.8 million were represented by guaranteed purchase obligation assets as of September 30, 2023 and December 31, 2022, respectively.

NOTE 7 — GOODWILL

The following table summarizes the changes in the carrying amount of goodwill in total and by reportable segment for the nine months ended September 30, 2023:


	Material Handling			Construction Equipment		Master Distribution		Total
Balance, December 31, 2022	$	13.6		$	38.0	$	17.6	$	69.2
Additions		1.0			—		—		1.0
Adjustments to purchase price allocations		0.3			—		0.7		1.0
Translation adjustments		(0.1	)		—		—		(0.1	)
Balance, September 30, 2023	$	14.8		$	38.0	$	18.3	$	71.1

Goodwill is tested for impairment by reporting unit annually or more frequently if events or circumstances indicate that an impairment may exist. There were no indicators of potential impairment during the three and nine months ended September 30, 2023.

See Note 17, Business Combinations, for further information.

NOTE 10 — LONG-TERM DEBT

Line of Credit — First Lien Lenders

On April ~~2019.~~1, 2021, the Company entered into an ABL First Lien Credit Agreement (the “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. Under the ABL Credit Agreement, the Company has an asset based revolving line of credit (the “ABL Facility”) with its first lien holders with advances on the line being supported by eligible accounts receivable, parts, and otherwise unencumbered new and used equipment inventory and rental equipment. On June 28, 2023 the Company amended the ABL Facility by exercising $55.0 million of the Company's expansion option increasing borrowing capacity from $430.0 million to $485.0 million, which includes a $35 million Canadian-denominated sublimit facility. The ABL Facility is collateralized by substantially all assets of the Company, and the interest cost is SOFR plus an applicable margin on the CB Floating Rate, depending on borrowing levels. The ABL Facility matures on the earlier of April 1, 2026 or December 1, 2025 if any of the Notes (as hereinafter defined) remain outstanding as of December 1, 2025. As of September 30, 2023, the Company had an outstanding ABL Facility balance of $305.3 million, excluding unamortized debt issuance costs. The effective interest rate was 7.2% at September 30, 2023. As of December 31, 2022, the Company had an outstanding ABL Facility balance of $219.5 million, excluding unamortized debt issuance costs. The effective interest rate was 6.2% at December 31, 2022.

Maximum borrowings under the Floor Plan Facilities and ABL Facility are limited to $875.0 million unless certain other conditions are met. The total amount outstanding as of September 30, 2023 and December 31, 2022, was $670.1 million and $476.4 million, respectively, excluding debt issuance and deferred financing costs of $2.1 million at both September 30, 2023 and December 31, 2022.

~~Income Taxes~~Senior Secured Second Lien Notes

On April 1, 2021, the Company completed a private offering of 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.The Company sold $315.0 million of Notes at the rate of 5.625% per annum which are due on April 15, 2026. Interest on the Notes is ~~included~~payable in cash on April 15 and October 15 of each year, beginning on October 15, 2021. The Notes are guaranteed (the “Guarantees” and, together with the Notes, the “Securities”) by the guarantors that are 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 become 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 First Lien 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 ~~consolidated tax return~~future by us or the Guarantors.

As of ~~B. Riley Financial (the “Parent”)~~September 30, 2023, outstanding borrowings under the Notes were $312.0 million, which included $3.0 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%.

The Company’s long-term debt consists of the following:


	September 30,			December 31,
	2023			2022
Line of credit	$	305.3		$	219.5
Senior secured second lien notes		315.0			315.0
Unamortized debt issuance costs		(2.5	)		(2.8	)
Debt discount		(2.3	)		(3.0	)
Finance leases		32.8			19.6
Total debt and finance leases		648.3			548.3
Less: current maturities		(6.6	)		(4.2	)
Long-term debt and finance leases, net	$	641.7		$	544.1

As of September 30, 2023, the Company was in compliance with the financial covenants set forth in its debt agreements.

Notes Payable – Non-Contingent Consideration

The Company ~~calculates~~acquired the ~~provision for income taxes by~~assets of Ecoverse Industries, LTD ("Ecoverse") on November 1, 2022. Pursuant to the asset purchase agreement, the sellers are entitled to additional cash payments of a minimum of $6.0 million plus interest throughout a 5-year period. The liabilities below include the present value of these minimum cash payments using a ~~“separate return” method. Under this method~~market participant discount rate and the current year change due to $0.4 million of imputed interest.


	September 30,			December 31,
Location on Balance Sheet	2023			2022
Other current liabilities	$	(1.3	)	$	—
Other liabilities		(4.9	)		(5.8	)
Total	$	(6.2	)	$	(5.8	)

See Note 16, Fair Value of Financial Instruments, and Note 17, Business Combinations, for further information.

NOTE 11 — EQUITY

Accumulated Other Comprehensive Income ("AOCI")

The components of AOCI as reported in the Condensed Consolidated Balance Sheets, and the changes in AOCI by components, net of tax, are as follows:


	Foreign Currency Translation			(Losses) Gains on Cash Flow Hedges			Total
Balance at December 31, 2022	$	(1.5	)	$	(1.4	)	$	(2.9	)
Other comprehensive income (loss) before reclassification		0.1			(0.4	)		(0.3	)
Amounts reclassified from accumulated other comprehensive loss		—			—			—
Balance at March 31, 2023	$	(1.4	)	$	(1.8	)	$	(3.2	)
Other comprehensive income before reclassification		0.7			1.6			2.3
Amounts reclassified from accumulated other comprehensive loss		—			—			—
Balance at June 30, 2023	$	(0.7	)	$	(0.2	)	$	(0.9	)
Other comprehensive (loss) income before reclassification		(0.7	)		0.3			(0.4	)
Amounts reclassified from accumulated other comprehensive (loss) income		—			—			—
Balance at September 30, 2023	$	(1.4	)	$	0.1		$	(1.3	)

NOTE 12 — LEASES

The Company primarily has operating and finance leases for branch facilities, corporate office, and certain equipment. The Company’s leases have remaining lease terms that range from less than one year to leases that mature through December 2037 and contain provisions to renew the leases for additional terms of up to twenty years.

At September 30, 2023 and December 31, 2022, assets recorded under finance leases, net of accumulated depreciation were $31.7 million and $19.0 million, respectively. The assets are depreciated over the lesser of their remaining lease terms or their estimated useful lives.

The components of lease expense were as follows:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023			2022
Operating lease expense	$	6.8		$	6.2	$	20.2		$	18.5
Short-term lease expense		0.9			1.3		3.8			3.0
Low-value lease expense		0.3			0.1		0.8			0.2
Variable lease expense		2.2			2.0		6.4			4.7
Finance lease expense:
Amortization of right-of-use assets		1.7			1.1		4.4			2.8
Interest on lease liabilities		0.6			0.3		1.7			0.7
Sublease income		(0.1	)		—		(0.2	)		(0.1	)
Total lease expense	$	12.4		$	11.0	$	37.1		$	29.8

Additional information related to leases is presented in the table below:


	Nine Months Ended September 30,
Supplemental Cash Flows Information	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	19.4	$	17.9
Operating cash flows for finance leases		1.7		0.7
Financing cash flows for finance leases		3.9		2.5
Non-cash right-of-use assets obtained in exchange for lease obligations:
Operating leases		4.9		14.5
Finance leases		17.3		7.8
Weighted Average Remaining Lease Term (in years):
Operating leases		9.0		6.9
Finance leases		4.7		4.5
Weighted Average Discount Rate (in %):
Operating leases		10.2		7.0
Finance leases		8.2		6.6

Minimum future lease payments under non-cancellable operating and finance leases described above as of September 30, 2023 were as follows:


Years	Operating Leases			Finance Leases
Remainder of 2023	$	6.3		$	2.2
2024		24.2			8.8
2025		20.9			8.6
2026		17.5			7.8
2027		16.1			6.2
Thereafter		89.4			5.7
Total future minimum lease payments		174.4			39.3
Less: imputed interest		(64.0	)		(6.5	)
Total	$	110.4		$	32.8


Amounts recognized in the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	September 30, 2023			December 31, 2022
Current portion of long-term debt	$	6.6		$	4.2
Current operating lease liabilities		15.4			14.8
Finance lease obligations, net of current portion		26.2			15.4
Long-term operating lease liabilities, net of current portion		95.0			101.9
Total	$	143.2		$	136.3

As of September 30, 2023, the Company ~~is assumed to file a separate return~~had additional leases, substantially all real estate, that were executed but had not yet commenced with ~~the tax authority, thereby reporting its taxable income or loss and paying the applicable tax to, or receiving the appropriate refund from, the Parent. The Company’s current provision is the amount~~undiscounted lease payments of ~~tax payable or refundable on the basis of a hypothetical, current year, separate return.~~

Any difference between the tax provision (or benefit) allocated to the Company under the separate return method and payments to be made to (or received from) the Parent for tax expense are treated as either dividends or capital contribution. Accordingly, the amount by which the Company’s tax liability under the separate return method exceeds the amount of tax liability ultimately settled as a result of using incremental expenses of the Parent is periodically settled as a capital contribution from the Parent to the Company.

The Company complies with the accounting and reporting requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences$3.2 million. These leases are expected to ~~affect taxable income. Valuation allowances~~commence in 2023 with lease terms up to 10 years.

See Note 13, Contingencies, for more information on certain contracts where the Company guarantees the performance of the third-party lessee.

NOTE 14 — INCOME TAXES

The Company recognized income tax benefit of $7.3 million and expense of $0.3 million for the three months ended September 30, 2023 and 2022 respectively, and $6.9 million benefit and $0.8 million expense for the nine months ended September 30, 2023 and 2022, respectively.

The income tax benefit was primarily attributable to the release of the valuation allowance of certain U.S. federal and state deferred tax assets. We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the ~~amount expected to be realized.~~

~~ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement~~weight of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2019 and December 31, 2018, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

On December 22, 2017, the Tax Cut and Jobs Act (the “Tax Act”) was enacted into law resulting in a reduction in the federal corporate income tax rate from 35% to 21% for years beginning in 2018. The enactment of the Tax Act also requires companies to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company was at the time of the law change organized as a limited liability company (“LLC”) that had elected to be treated as a single member LLC under the Internal Revenue Code. As such, income, losses, and other tax attributes were primarily passed through to the sole owner. The Company upon conversation to a C-Corporation became subject to the new rates and requirements for corporations under the Tax Act.

~~The provision for income taxes was deemed to be immaterial.~~

~~Unrecognized Tax Benefits~~

~~The Company recognizes tax positions in the financial statements only when~~available evidence, whether it is more likely than not that ~~the position will be sustained on examination by the relevant taxing authority based on the technical merits~~some or all of the ~~position. A position that meets this standard~~deferred tax assets will not be realized. Based on all available positive and negative evidence, having demonstrated sustained profitability, which is ~~measured at the largest amount of benefit that will~~objective and verifiable, and taking into account anticipated future earnings, we concluded it is more likely than not that our U.S. federal and state deferred tax assets will be ~~realized on settlement. A liability~~realizable. When a change in valuation allowance is ~~established for differences between positions taken~~recognized during an interim period, the change in ~~a tax return and amounts recognized~~valuation allowance resulting from current year income is included in the ~~financial statements. There were no unrecognized~~annual effective tax ~~benefits~~rate and the release of valuation allowance supported by projections of future taxable income is recorded as a discrete tax benefit in the interim period. We released $7.4 million valuation allowance as a discrete tax benefit which is part of ~~March 31, 2019~~the effective tax rate during the nine months ended September 30, 2023 disclosed below. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis.

The effective tax rate for the nine months ended September 30, 2023 and ~~December 31, 2018.~~2022 was (176.9)% and 7.4%, respectively. The ~~Company recognizes accrued interest and penalties related to unrecognized tax benefits as~~effective income tax ~~expense. No amounts were accrued for interest expense and penalties~~rate in 2023 was primarily related to income tax ~~matters as~~benefit from the release of ~~March 31, 2019 and December 31, 2018.~~the valuation allowance. The ~~Company is subject to~~effective income tax ~~examinations by major taxing authorities since inception.~~rate in 2022 was primarily related to expense associated with tax filing jurisdictions with no associated valuation allowance.

NOTE 17 — BUSINESS COMBINATIONS

During the first nine months of ~~preferred stock issued or outstanding.~~

~~Warrants~~

~~Warrants may only be exercised~~2023, the Company purchased the assets of M&G Materials Handling Co. ("M&G") and Battery Shop of New England Inc. ("BSNE") for a ~~whole number~~combined purchase price of ~~shares. No fractional Warrants will be issued upon separation~~$2.6 million, net of cash acquired. These acquisitions, which took place in our Material Handling segment, are neither material individually nor in the aggregate; therefore, we did not include opening balance sheets herein. The estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the units and only whole Warrants will trade. The Warrants will become exercisable on the later of (a) 30 days after the completion of the Initial Business Combination or (b) 12 months from the closing of the Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act).acquisition dates. The Company ~~will~~expects to finalize the valuation and complete the purchase price allocation as soon as ~~practicable,~~practical but in no ~~event~~ later than ~~15 business days, after~~one year from the ~~closing~~acquisition dates. Costs and expenses related to the acquisitions have been expensed as incurred in operating expenses.

The following table summarizes the net assets acquired by segment from the 2022 acquisitions:


	Material Handling			Master Distribution			Total
Cash	$	2.3		$	0.3		$	2.6
Accounts receivable		9.6			9.6			19.2
Inventories		7.6			12.3			19.9
Prepaid expenses and other current assets		0.1			0.8			0.9
Rental fleet		22.7			—			22.7
Property and equipment		2.0			0.6			2.6
Operating lease right-of-use assets		2.2			1.6			3.8
Other intangible assets		1.4			27.8			29.2
Goodwill		2.3			18.3			20.6
Total assets	$	50.2		$	71.3		$	121.5

Accounts payable	$	(1.5	)	$	(8.3	)	$	(9.8	)
Customer deposits		—			(2.2	)		(2.2	)
Accrued expenses		(1.6	)		(0.2	)		(1.8	)
Current operating lease liabilities		(0.8	)		(0.1	)		(0.9	)
Current deferred revenue		(1.2	)		—			(1.2	)
Other current liabilities		—			(0.9	)		(0.9	)
Long-term operating lease liabilities		(1.4	)		(1.5	)		(2.9	)
Deferred tax liability		(2.8	)		—			(2.8	)
Total liabilities	$	(9.3	)	$	(13.2	)	$	(22.5	)

Net assets acquired	$	40.9		$	58.1		$	99.0

Net assets acquired net of cash	$	38.6		$	57.8		$	96.4

During 2023, we have had purchase price accounting adjustments related to 2022 acquisitions which were not significant individually or in the aggregate. See the Condensed Consolidated Statements of Cash Flows for the total cash outflow in "Expenditures for acquisitions, net of cash acquired" for the net current year impact of the ~~Initial Business Combination, use its best efforts to file with~~2022 acquisitions purchase price accounting adjustments and current year acquisitions. We describe our 2022 acquisitions in more detail in Note 17 of the ~~Securities and Exchange Commission (“SEC”) a registration statement~~audited consolidated financial statements in our Annual Report on Form 10-K for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Warrants, to cause such registration statement to become effective within 60 business days after the closing of the Initial Business Combination and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If the shares issuable upon exercise of the warrants are not registered under the Securities Act by the 60^th business day after the closing of the Initial Business Combination, the Company will be required to permit holders to exercise their warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Company’s Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.year ended December 31, 2022.

NOTE 18 — SEGMENTS

~~The Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.~~

The Company ~~may call the Warrants for redemption (except with respect to the Private Placement Warrants):~~

●

~~in whole and not in part;~~

●

~~at a price of $0.01 per warrant;~~

●

~~upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”); and~~

●

if, and only if, the last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period endinghas three reportable segments: Material Handling, Construction Equipment, and Master Distribution. All other business activities, including electric vehicles and corporate are included in "Corporate and Other". The Company’s segments are determined based on ~~the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.~~

~~If the Company calls the Warrants for redemption,~~ management ~~will have the option to require all holders that wish to exercise the Warrants to do so~~structure, which is organized based on ~~a “cashless basis,”~~types of products and services sold, as described in the ~~warrant agreement.~~following paragraphs. The operating results for each segment are reported separately to the Company’s CEO 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 material handling equipment in Michigan, Illinois, Indiana, New York (including New York City), Virginia and the New England region of the U.S. as well as Ontario and Quebec provinces of Canada.

The ~~exercise price~~Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Illinois, Indiana, Ohio, New York (excluding New York City), Florida and the New England region of the U.S.

The Company began separately reporting Master Distribution as its own segment in the first quarter of 2023. The Master Distribution segment is principally engaged in large-scale equipment distribution rights with sub dealers throughout North America related to environmental processing equipment. The Company’s identified assets by reportable segment below, as of December 31, 2022, has been recast to reflect the change in segment presentation.

The Company retains various unallocated expense items at the general corporate level, which the Company refers to as “Corporate and Other” in the table below. Corporate and Other holds corporate debt and has minor transactional activity all together including Alta e-mobility (e.g., commercial electric vehicles) revenues and costs. Corporate incurs expenses associated with compensation (including stock-based compensation) of our directors, corporate officers and members of our shared-services team, consulting and legal fees related to acquisitions and capital raising activities, corporate governance and compliance related matters, certain corporate development related expenses, interest expense associated with original issue discounts and deferred financing cost related to previous capital raises and a portion of the Company’s income tax provision. There is also intercompany elimination activity presented within the Corporate and Other segment.

The following tables present the Company’s results of operations by reportable segment for the three months ended September 30, 2023:


	Three Months Ended September 30, 2023
	Material Handling		Construction Equipment		Master Distribution		Corporate and Other			Total
New and used equipment sales	$	89.8	$	150.8	$	15.2	$	(2.2	)	$	253.6
Parts sales		24.4		42.9		2.5		(0.3	)		69.5
Service revenues		33.2		27.3		0.1		—			60.6
Rental revenues		19.6		34.1		0.3		—			54.0
Rental equipment sales		1.6		26.9		—		—			28.5
Total revenues	$	168.6	$	282.0	$	18.1	$	(2.5	)	$	466.2
Interest expense		4.9		8.7		0.9		0.7			15.2
Depreciation and amortization		8.6		25.0		1.1		0.3			35.0
Income (loss) before taxes		4.8		0.8		0.3		(5.8	)		0.1

The following table presents the Company’s results of operations by reportable segment for the nine months ended September 30, 2023:


	Nine Months Ended September 30, 2023
	Material Handling		Construction Equipment		Master Distribution		Corporate and Other			Total
New and used equipment sales	$	267.5	$	412.1	$	57.3	$	(9.1	)	$	727.8
Parts sales		75.8		126.4		7.9		(0.9	)		209.2
Service revenues		99.1		81.1		0.3		—			180.5
Rental revenues		56.2		90.2		0.7		—			147.1
Rental equipment sales		3.9		86.8		—		—			90.7
Total revenues	$	502.5	$	796.6	$	66.2	$	(10.0	)	$	1,355.3
Interest expense		13.2		23.2		2.5		2.0			40.9
Depreciation and amortization		25.4		67.0		3.2		0.5			96.1
Income (loss) before taxes		12.8		3.7		5.1		(17.7	)		3.9

The following table presents the Company’s results of operations by reportable segment for the three months ended September 30, 2022:


	Three Months Ended September 30, 2022
	Material Handling		Construction Equipment		Corporate and Other			Total
New and used equipment sales	$	83.7	$	126.4	$	—		$	210.1
Parts sales		22.3		39.5		—			61.8
Service revenues		29.6		24.7		—			54.3
Rental revenues		17.7		32.5		—			50.2
Rental equipment sales		2.0		26.6		—			28.6
Total revenues	$	155.3	$	249.7	$	—		$	405.0
Interest expense		3.1		4.8		0.6			8.5
Depreciation and amortization		7.2		22.4		—			29.6
Income (loss) before taxes		4.6		5.7		(4.9	)		5.4

The following table presents the Company’s results of operations by reportable segment for the nine months ended September 30, 2022:


	Nine Months Ended September 30, 2022
	Material Handling		Construction Equipment		Corporate and Other			Total
New and used equipment sales	$	222.7	$	356.3	$	—		$	579.0
Parts sales		61.6		111.9		—			173.5
Service revenues		83.2		71.0		—			154.2
Rental revenues		44.7		86.8		—			131.5
Rental equipment sales		4.2		100.8		—			105.0
Total revenues	$	416.4	$	726.8	$	—		$	1,143.2
Interest expense		8.0		12.1		1.3			21.4
Depreciation and amortization		18.6		62.5		—			81.1
Income (loss) before taxes		13.5		9.9		(12.6	)		10.8

The following table presents the Company’s identified assets by reportable segment as of September 30, 2023 and December 31, 2022:


	September 30, 2023		December 31, 2022
Segment assets:
Material Handling	$	463.8	$	416.3
Construction Equipment		904.5		775.5
Master Distribution		85.2		77.6
Corporate and Other		26.9		21.2
Total assets	$	1,480.4	$	1,290.6

NOTE 19 — EARNINGS PER SHARE

Basic earnings per share ("EPS") is calculated by dividing net income by the weighted-average number of common 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 potential dilutive common shares outstanding during the period. We include all common share equivalents granted under our stock-based compensation plan which remain unvested ("dilutive securities"), in the number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. In addition, if (x) the Company issues additional shares of Class A common stock or securities convertible into or exercisable or exchangeableoutstanding for shares of Class A common stock for capital raising purposes in connection with the closing of the Initial Business Combination (excluding any issuance of securities under the Forward Purchase Agreement), at an issue price or effective issue price of less than $9.20our diluted earnings per share calculations using the treasury method.

Basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 were calculated as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Basic net income per share
Net income available to common stockholders	$	6.7	$	4.4	$	8.6	$	7.8
Basic weighted average common shares outstanding		32,368,112		31,981,843		32,320,346		32,091,353
Basic net income per share of common stock	$	0.21	$	0.14	$	0.27	$	0.24
Diluted income per share
Net income available to common stockholders	$	6.7	$	4.4	$	8.6	$	7.8
Basic weighted average common shares outstanding		32,368,112		31,981,843		32,320,346		32,091,353
Effect of dilutive securities:
Effect of dilutive securities		361,405		157,109		310,736		198,774
Diluted weighted average common shares outstanding		32,729,517		32,138,952		32,631,082		32,290,127
Diluted net income per share of common stock	$	0.20	$	0.14	$	0.26	$	0.24

NOTE 20 — SUBSEQUENT EVENTS

On October 13, 2023, Alta closed its acquisition of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance (the “Newly Issued Price”)Burris Equipment Company ("Burris"), ~~(y) the aggregate gross proceeds from such issuances represent more than 60%~~a privately held premier distributor of ~~the total equity proceeds,~~market leading construction and ~~interest thereon, available for funding the Initial Business Combination, and (z) the volume weighted average trading~~turf equipment with three locations in Illinois. The purchase price ~~of the Class A common stock during the 20 trading day period starting~~ on the ~~trading day prior to the day on~~asset-structured acquisition was $15.2 million in cash paid at closing, which ~~the Company consummates the Initial Business Combination (the “Market Value”) is below $9.20 per share, the exercise price~~included $1.2 million of ~~the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value~~excess net working capital. Burris generated approximately $40.6 million in revenue and the Newly Issued Price, and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. Additionally,$1.9 million in ~~no event will the Company be required to~~ net ~~cash settle any warrant. In the event that a registration statement is not effective~~income for the ~~exercised warrants, the purchaser of a unit containing such warrant will have paid the full~~trailing twelve months through July 2023. The purchase price for the unit solely for the share of Class A common stock underlying such unit. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if the Company fails to complete an Initial Business Combination within the 18-month time period.

The Private Placement Warrants are identical to the Warrants underlying the units sold in the Public Offering, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the Initial Business Combination,paid at close is subject to certain ~~limited exceptions. Additionally,~~adjustments based upon Burris' net working capital at closing.

On November 1, 2023, Alta acquired the ~~Private Placement Warrants~~stock of Ault Industries Inc. ("Ault"), a privately held Canadian crushing and screening equipment distributor with locations in Ontario, Quebec, and Maritime provinces for a total purchase price of $39.9 million, consisting of $27.1 million cash at close, which included $4.8 million of excess net working capital, a $2.2 million seller note, and $10.6 million worth of Alta’s common stock, which will be ~~non-redeemable so long as they are held by~~issued at $13 per share, equating to 819,398 shares vesting annually over a five-year period. The purchase price is subject to post-closing working capital adjustments. Ault generated approximately $50.3 million in revenue and $4.5 million in net income for the initial purchasers or such purchasers’ permitted transferees. If the Private Placement Warrants are held by someone other than the initial shareholders or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Warrants.trailing twelve months through June 30, 2023.

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

References in this Quarterly Report on Form 10-Q (this “Quarterly Report”) to “we,” “us,” “our” or the “Company” are to B. Riley Principal Merger Corp. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report, and the audited consolidated financial statements and related notes thereto ~~included elsewhere in this Quarterly Report.~~

~~Forward-Looking Statements~~

This Quarterly Report includes forward-looking statements. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’sand Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations” regarding~~Operations contained in our Annual Report on Form 10-K for the ~~Company’s~~fiscal year ended December 31, 2022. This discussion contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 reflecting Alta’s current expectations, estimates and assumptions concerning events and financial ~~position, business strategy~~trends that may affect its future operating results or financial position. Actual results and the ~~plans and objectives~~timing of ~~management for future operations, are forward-looking statements. In some cases, you can identify forward-looking~~events may differ materially from those contained in these forward- looking statements ~~by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative~~due to a number of such terms or other similar expressions. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.factors. Factors that ~~might~~could cause or contribute to such ~~a discrepancy~~differences include, but are not limited to, economic and competitive conditions, regulatory changes and other uncertainties, as well as those ~~described~~factors discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the Risk Factors section of our final prospectus for our Public Offering (as defined below) and in our other Securities and Exchange Commission (“SEC”) filings. Except as expressly required by applicable securities law, we disclaim any intention orforward-looking events discussed may not occur. Alta assumes no obligation to update ~~or revise~~ any of these forward-looking ~~statements whether~~statements.

Recent Developments

Strategic Acquisitions

Our growth strategy is predicated on making strategic acquisitions that expand our geographic reach, broaden our capabilities and service offerings and diversify our customer and supplier bases. We believe these acquisitions, both immediately and over the long term will be accretive to our financial performance.

Equipment Inventory Availability, Rental Fleet Investment and Product Support

Throughout 2021 and 2022, our industry was unfavorably impacted by equipment supply chain constraints leading to shortages across construction and material handling equipment categories and limiting our ability to meet customer demand and potentially increase our market share. Throughout 2023 equipment supply chain constraints have continued to subside, resulting in an increase in our new equipment inventory relative to prior periods. The increase in new inventory through three quarters of 2023, given the seasonality of our Construction segment, is natural for our business and in line with historic norms. Our ability to take delivery of new equipment from our OEMs throughout 2023 was the primary driver of the $148.8 million increase in new and used equipment sales when compared to the same period last year, as the increase in supply of new equipment meets a strong end-market demand backdrop. The increase in equipment availability in 2023 has also allowed us to replenish and strategically grow our rental fleet in geographies where we intend to grow our market share. Additionally, and notably, supply chain issues have not materially impacted our ability to source replacement parts for our service operation, as our OEMs have prioritized the production and delivery of replacement parts to dealers. As our customers focus on the “up-time” of their equipment, we continued to see strong demand for our product support capabilities, skilled technicians' labor and replacement parts in 2023, as evidenced by our increased technician headcount and organic product support revenues year over year.

Business Description

The Company owns and operates one of the largest integrated equipment dealership platforms in the U.S. and has a presence in Canada. Through our branch network, we sell, rent, and provide parts and service support for several categories of specialized equipment, including lift trucks, heavy and compact earthmoving equipment, environmental processing equipment, cranes, paving and asphalt equipment, and other material handling and construction equipment. We engage in five principal business activities in these equipment categories:

(i)

new equipment sales;

(ii)

used equipment sales;

(iii)

parts sales;

(iv)

repair and maintenance services; and

(v)

equipment rentals.

We have operated as an equipment dealership for over 39 years and have developed a branch network that includes over 75 total locations in Michigan, Illinois, Indiana, Ohio, Massachusetts, Maine, Connecticut, New Hampshire, Vermont, Rhode Island, New York, Virginia, Nevada and Florida and the Canadian provinces of Ontario and Quebec. We offer our customers end-to-end solutions for their equipment needs by providing sales, parts, service and rental functions. Additionally, we provide warehouse design and build services, automated equipment installation and system integration solutions within our Material Handling segment.

Within our territories, we are the exclusive distributor of new equipment and replacement parts on behalf of our OEM partners. We and our regional subsidiaries enjoy long-standing relationships with leading material handling and construction equipment OEMs, including Hyster-Yale, Volvo, CNH, JCB and Kubota, among many others. We also now, through the acquisition of Ecoverse, have exclusive master dealer rights throughout North America for environmental processing equipment with leading OEMs including Doppstadt, Backus and Backers, among others. We are consistently recognized by OEMs as a ~~result~~top dealership partner and have been identified as a nationally recognized Hyster-Yale dealer and multi-year recipient of the Volvo Dealer of the Year award. More recently, the Company entered into a dealer agreement with Nikola Corporation to become the authorized dealer to sell and service Nikola medium and long-haul class 8 electric vehicle trucks in New York, New Jersey, eastern Pennsylvania, New England, Florida and Illinois markets.

Business Segments

For detailed description of our business segments, refer to Note 18, Segments.

Financial Statement Overview

Our revenues are primarily derived from sale or rental of equipment and product support (e.g., parts and service) related activities, and consist of:

New equipment sales. We sell new heavy construction, material handling and environmental processing equipment and are a leading regional distributor for nationally recognized equipment manufacturers. Our new equipment sales operation is a primary source of new ~~information, future events or otherwise.~~

~~Overview~~

~~We are~~customers for the rental, parts and services business. The majority of our new equipment sales is predicated on exclusive distribution agreements we have with best-in-class OEMs. The sale of new equipment to customers, while profitable from a ~~blank check company incorporated~~gross margin perspective, acts as a ~~Delaware corporation~~means of generating equipment field population and ~~formed~~activity for our higher-margin aftermarket revenue streams, specifically service and parts. We also sell tangential products and services related to our material handling equipment offerings which include, but are not limited to, automated equipment and related installation, warehouse systems integration solutions and related controls software.

Used equipment sales. We sell used equipment which is typically equipment that has been taken in on trade from a customer that is purchasing new equipment, equipment coming off a third-party lease arrangement where we purchase the equipment from the finance company, or used equipment that is sourced for our customers in the open market by our used equipment specialists. Used equipment sales in our territories, like new equipment sales, generate parts and service business for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”).Company.

Parts sales. We ~~intend~~sell replacement parts to ~~effectuate an Initial Business Combination using cash from the proceeds~~customers and supply parts to our own rental fleet. Our in-house parts inventory is extensive such that we are able to provide timely service support to our customers. The majority of our ~~initial public offering (the “Public Offering”)~~parts inventory is made up of OEM replacement parts for those OEM’s with which we have exclusive agreements to sell new equipment.

Service revenues. We provide maintenance and repair services for customer-owned equipment and we maintain our own rental fleet. In addition to repair and maintenance on an as needed or scheduled basis, we provide ongoing preventative maintenance services and warranty repairs for our customers. We have committed substantial resources to training our technical service employees and have a full-scale service infrastructure that ~~closed~~we believe differentiates us from our competitors. Approximately 45% of our employees are skilled service technicians.

Rental revenues. We rent heavy construction, compact, aerial, material handling, and a variety of other types of equipment to our customers on ~~April 11, 2019 (the “Closing Date”)~~a daily, weekly and monthly basis. Our rental fleet, which is well-maintained, has an original acquisition cost (which we define as the ~~private placement units~~cost originally paid to manufacturers plus any capitalized costs) of $580.7 million as of September 30, 2023. The original acquisition cost of our rental fleet excludes the $9.5 million of assets associated with our guaranteed purchase obligations, which are assets that are not in our day-to-day operational control. In addition to being a core business, our rental business also creates cross-selling opportunities for us in our sales and product support activities.

Rental equipment sales. We also sell rental equipment from our rental fleet. Customers often have options to purchase ~~shares~~equipment after or before rental agreements have matured. Rental equipment sales, like new and used equipment sales, generate customer-based equipment field population within our territories and ultimately yield high-margin parts and service revenues for us.

Principal Costs and Expenses

Our cost of revenues are primarily related to the costs associated with the sale or rental of equipment and product support activities, which includes direct labor costs for our skilled technicians. Our operating expenses consist principally of selling, general and administrative expenses, which primarily includes personnel costs associated with our sales and administrative staff and expenses associated with the deployment of our ~~Class A common stock (“Private Placement Warrants”)~~service vehicle fleet and occupancy expenses. In addition, we have interest expense related to our floorplan payables, finance leases, line of credit, and secured second lien notes. These principal costs and expenses are described further below:

New equipment sales. Cost of new equipment sold consists of the total acquisition costs of the new equipment we purchase from third parties.

Used equipment sales. Cost of used equipment sold consists of the net book value, or cost, of used equipment we purchase from third parties or the trade-in value of used equipment that ~~closed~~we obtain from customers in new equipment sales transactions.

Parts sales. Cost of parts sales represents the average cost of parts used in the maintenance and repair of customer-owned equipment we service or parts sold directly to customers for their owned equipment (e.g., over-the-counter parts).

Service revenues. Cost of service revenues primarily represents the labor costs attributable to services provided for the maintenance and repair of customer-owned equipment. Training, paid time off, and other non-billable costs of maintaining our expert technicians flow through this department in addition to the direct customer-billable labor.

Rental revenues. Rental expense represents the costs associated with rental equipment, including, among other things, the cost of repairing and maintaining our rental equipment and other miscellaneous costs of owning rental equipment. Other rental expenses consist primarily of equipment support activities that we provide our customers in connection with renting equipment, such as freight services and damage waiver policies.

Rental depreciation. Depreciation of rental equipment represents the depreciation costs attributable to rental equipment. Estimated useful lives vary based upon type of equipment. See Note 2, Summary of Significant Accounting Policies, to the audited consolidated financial statements contained in the Company’s 2022 Annual Report on Form 10-K, for information on our rental equipment depreciation methods.

Rental equipment sales. Cost of previously rented equipment sold consists of the ~~Closing Date~~net book value (i.e. net of accumulated depreciation) of rental equipment sold from our rental fleet.

Operating expenses. These costs are comprised of three main components: personnel, operational and occupancy costs. Personnel costs are comprised of hourly and salaried wages for administrative employees, including incentive compensation and employee benefits, such as medical benefits. Operational costs include marketing activities, costs associated with deploying and leasing our service vehicle fleet, insurance, IT, office and shop supplies, general corporate costs, depreciation on non-sales and rental related assets and intangible amortization. Occupancy costs are comprised of all expenses related to our facility infrastructure, including rent, utilities, property taxes and building insurance.

Other expense, net. This section of the ~~overallotment~~Condensed Consolidated Statements of Operations is mostly comprised of interest expense and other miscellaneous items that ~~closed on April 12, 2019, and from additional issuances~~result in income or expense. Interest expense is mostly driven by our OEM floorplan financing arrangements, a working capital line of ~~if any,~~credit, our ~~capital stock~~second lien secured notes and our ~~debt,~~finance lease arrangements.

Results of Operations

The three and nine months ended September 30, 2023 and 2022

Consolidated Results


	Three Months Ended September 30,						Increase (Decrease)						Nine Months Ended September 30,						Increase (Decrease)
	2023			2022			2023 versus 2022						2023			2022			2023 versus 2022
Revenues:
New and used equipment sales	$	253.6		$	210.1		$	43.5			20.7	%	$	727.8		$	579.0		$	148.8			25.7	%
Parts sales		69.5			61.8			7.7			12.5	%		209.2			173.5			35.7			20.6	%
Service revenues		60.6			54.3			6.3			11.6	%		180.5			154.2			26.3			17.1	%
Rental revenues		54.0			50.2			3.8			7.6	%		147.1			131.5			15.6			11.9	%
Rental equipment sales		28.5			28.6			(0.1	)		(0.3	)%		90.7			105.0			(14.3	)		(13.6	)%
Total revenues		466.2			405.0			61.2			15.1	%		1,355.3			1,143.2			212.1			18.6	%
Cost of revenues:
New and used equipment sales		212.0			176.5			35.5			20.1	%		601.3			482.6			118.7			24.6	%
Parts sales		45.3			40.0			5.3			13.3	%		138.2			116.7			21.5			18.4	%
Service revenues		26.5			24.3			2.2			9.1	%		77.0			66.3			10.7			16.1	%
Rental revenues		5.7			5.9			(0.2	)		(3.4	)%		18.0			16.7			1.3			7.8	%
Rental depreciation		29.6			25.9			3.7			14.3	%		80.1			69.5			10.6			15.3	%
Rental equipment sales		21.0			20.8			0.2			1.0	%		66.5			82.6			(16.1	)		(19.5	)%
Total cost of revenues		340.1			293.4			46.7			15.9	%		981.1			834.4			146.7			17.6	%
Gross profit		126.1			111.6			14.5			13.0	%		374.2			308.8			65.4			21.2	%
General and administrative expenses		106.8			94.2			12.6			13.4	%		316.0			265.9			50.1			18.8	%
Non-rental depreciation and amortization		5.4			3.7			1.7			45.9	%		16.0			11.6			4.4			37.9	%
Total operating expenses		112.2			97.9			14.3			14.6	%		332.0			277.5			54.5			19.6	%
Income from operations		13.9			13.7			0.2			1.5	%		42.2			31.3			10.9			34.8	%
Other (expense) income:
Interest expense, floor plan payable – new equipment		(2.4	)		(0.8	)		(1.6	)		200.0	%		(5.8	)		(1.6	)		(4.2	)		262.5	%
Interest expense – other		(12.8	)		(7.7	)		(5.1	)		66.2	%		(35.1	)		(19.8	)		(15.3	)		77.3	%
Other income		1.4			0.2			1.2			600.0	%		2.6			0.9			1.7			188.9	%
Total other expense, net		(13.8	)		(8.3	)		(5.5	)		66.3	%		(38.3	)		(20.5	)		(17.8	)		86.8	%
Income before taxes		0.1			5.4			(5.3	)		(98.1	)%		3.9			10.8			(6.9	)		(63.9	)%
Income tax (benefit) provision		(7.3	)		0.3			(7.6	)	NM				(6.9	)		0.8			(7.7	)	NM
Net income		7.4			5.1			2.3			45.1	%		10.8			10.0			0.8			8.0	%
Preferred stock dividends		(0.7	)		(0.7	)		—			—			(2.2	)		(2.2	)		—			—
Net income available to common stockholders	$	6.7		$	4.4		$	2.3			52.3	%	$	8.6		$	7.8		$	0.8			10.3	%

NM - calculated change not meaningful


	Percent of Revenues						Percent of Revenues
Consolidated	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues:
New and used equipment sales		54.4	%		51.9	%		53.7	%		50.6	%
Parts sales		14.9	%		15.2	%		15.4	%		15.2	%
Service revenues		13.0	%		13.4	%		13.3	%		13.5	%
Rental revenues		11.6	%		12.4	%		10.9	%		11.5	%
Rental equipment sales		6.1	%		7.1	%		6.7	%		9.2	%
Total revenues		100.0	%		100.0	%		100.0	%		100.0	%
Cost of revenues:
New and used equipment sales		45.5	%		43.6	%		44.4	%		42.2	%
Parts sales		9.7	%		9.8	%		10.2	%		10.2	%
Service revenues		5.7	%		6.0	%		5.7	%		5.8	%
Rental revenues		1.2	%		1.5	%		1.3	%		1.5	%
Rental depreciation		6.3	%		6.4	%		5.9	%		6.1	%
Rental equipment sales		4.6	%		5.1	%		4.9	%		7.2	%
Total cost of revenues		73.0	%		72.4	%		72.4	%		73.0	%
Gross profit		27.0	%		27.6	%		27.6	%		27.0	%

Non-GAAP Financial Measure: Organic Revenues


	Organic Revenues									Organic Revenues
	Three Months Ended September 30,				Increase (Decrease)					Nine Months Ended September 30,				Increase (Decrease)
	2023		2022		2023 versus 2022					2023		2022		2023 versus 2022
Total revenues	$	466.2	$	405.0	$	61.2		15.1	%	$	1,355.3	$	1,143.2	$	212.1		18.6	%
Acquisitions revenues		30.7		7.4							98.7		7.4
Organic revenues:
New and used equipment sales		235.0		207.7		27.3		13.1	%		665.4		576.6		88.8		15.4	%
Parts sales		64.7		60.0		4.7		7.8	%		193.8		171.7		22.1		12.9	%
Service revenues		57.5		52.7		4.8		9.1	%		171.4		152.6		18.8		12.3	%
Rental revenues		50.2		48.5		1.7		3.5	%		136.6		129.8		6.8		5.2	%
Rental equipment sales		28.1		28.7		(0.6	)	(2.1	)%		89.4		105.1		(15.7	)	(14.9	)%
Total organic revenues	$	435.5	$	397.6	$	37.9		9.5	%	$	1,256.6	$	1,135.8	$	120.8		10.6	%

The above table contains a non-GAAP financial measure. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or ~~a combination~~includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the condensed consolidated statements of operations, balance sheets or statements of cash ~~stock~~flows of the company. The non-GAAP financial measure used is organic revenues and ~~debt.~~

~~At March 31, 2019, we had cash~~growth rates associated with organic revenues. We define organic revenues growth as revenues growth excluding the impact of ~~$31,665, deferred offering costs of $372,422, and current liabilities of $413,729. Further, we expect to continue to incur significant costs~~acquisitions that do not appear fully in both periods in the ~~pursuit~~current and prior years. We believe organic revenues growth is a meaningful metric to investors as it provides a more consistent comparison of our ~~acquisition plans. We cannot assure you that~~revenues to prior periods as well as to industry peers.

Pursuant to the requirements of Regulation G, we have provided a reconciliation of organic revenues to the most directly comparable GAAP financial measure in the table above and in subsequent tables in management's discussion and analysis of our ~~plans~~individual business segments. This measure is supplemental to, ~~complete an Initial Business Combination will~~and should be ~~successful.~~used in conjunction with, the most comparable GAAP measure. Management uses this non-GAAP financial measure to monitor and evaluate financial results and trends.

~~Results of Operations~~

~~For~~Revenues: Consolidated revenues increased by $61.2 million, or 15.1%, to $466.2 million for the three months ended ~~March 31, 2019~~September 30, 2023 as compared to the same period last year. The primary drivers of this period over period increase were the favorable full period impact from acquisitions, the availability of new equipment from OEMs, a favorable business climate for our equipment and ~~2018, we had a net loss~~services, price increases, and our ability to grow on an organic basis. If excluding the effects of ~~$1,021~~acquisitions by observing the consolidated results on an organic basis, total revenues increased $37.9 million, or 9.5%, to $435.5 million for the three months ended September 30, 2023. Organic new and ~~$800, respectively. Our loss consists solely~~used equipment sales increased 13.1% over the same period last year as market demand for equipment remains high and the increased availability of ~~miscellaneous general and administrative expenses and income taxes. Our business activities~~new equipment from ~~inception~~our suppliers, relative to ~~March 31, 2019 consisted primarily~~the same period last year, allowed for throughput of our ~~formation~~sales backlogs. Organic parts sales and ~~completing~~service revenues increased by 7.8% and 9.1%, respectively, over the same period last year. Similarly, rental revenues exhibited growth on an organic basis of 3.5% period over period as market rental rates in the industry continue to increase in our ~~Public Offering,~~operating regions. Lastly, rental equipment sales decreased organically by 2.1% from the prior year as we actively retained rental fleet amidst high rental demand, while remaining focused on our field population-based business model and ~~since~~meeting customer demand for used equipment by selling equipment out of our rental fleet.

Consolidated revenues increased by $212.1 million, or 18.6%, to $1,355.3 million for the ~~offering on April 11, 2019,~~nine months ended September 30, 2023 as compared to the same period last year. Organic sales growth in the nine months ended September 30, 2023 reached 10.6% compared to the same period last year. Despite headwinds during the year from higher interest rates, inflation and tight labor markets, we have experienced continued demand for our ~~activity has been limited to identifying~~products and ~~evaluating prospective acquisition targets for an Initial Business Combination.~~

~~Liquidity and Capital Resources~~

~~Until~~services as the ~~closing~~fundamentals in many of the ~~Public Offering,~~markets we serve remain solid. We continue to maintain a strong backlog and, in certain regions, we have taken market share from competitors with our ~~only source~~inventory stocking strategies. In the nine months ended September 30, 2023, our customer focus through turbulent market times has led to an organic revenue increase of ~~liquidity~~15.4% in new and used equipment sales, a 12.6% organic revenue increase in our combined parts and service product support departments and a 5.2% organic increase in rental revenues. Rental equipment sales declined 14.9% for the nine months ended September 30, 2023 as compared to the same period last year due to the growing availability of new equipment throughout the year, combined with our ability to strategically balance the decision to retain fleet to benefit from the elevated rental demand environment but still accommodate sales into our territories to bolster field population for longer-term returns in our product support departments.

Gross profit (GP):


	Three Months Ended September 30,						Increase (Decrease)			Nine Months Ended September 30,						Increase (Decrease)
	2023			2022			2023 versus 2022			2023			2022			2023 versus 2022
Consolidated	GP%			GP%			GP%			GP%			GP%			GP%
New and used equipment sales		16.4	%		16.0	%		0.4	%		17.4	%		16.6	%		0.8	%
Parts sales		34.8	%		35.3	%		(0.5	)%		33.9	%		32.7	%		1.2	%
Service revenues		56.3	%		55.2	%		1.1	%		57.3	%		57.0	%		0.3	%
Rental revenues		34.6	%		36.7	%		(2.1	)%		33.3	%		34.4	%		(1.1	)%
Rental equipment sales		26.3	%		27.3	%		(1.0	)%		26.7	%		21.3	%		5.4	%

Consolidated gross profit		27.0	%		27.6	%		(0.6	)%		27.6	%		27.0	%		0.6	%

The consolidated gross profit for the three months ended September 30, 2023 was 27.0%, a 60 basis point decrease from the 27.6% for the same period in 2022. Gross margins on new and used equipment sales increased moderately, on higher volumes, when compared to the same period last year as the pricing environment has become more competitive recently, given increased equipment availability, when compared to previous quarters in 2023. Gross margins on service revenues improved by 110 basis points to 56.3% while parts revenue gross margin declined slightly by 50 basis points, but remained in line with expectations and recent historical trends. Gross margins on rental revenues declined in the three months ended September 30, 2023 when compared to the same period in 2022, a result primarily driven by compression of rental margins in the Material Handling segment due to increased rental depreciation expense associated with the acquisition of Yale Industrial Trucks Inc. ("YIT") in the third quarter of 2022 and the increased size of our rental fleet overall.

The consolidated gross profit for the nine months ended September 30, 2023 was 27.6%, a 60 basis point increase from the 27.0% for the same period in 2022. New and used equipment sales margins increased 80 basis points to 17.4%, consistent overall with prior year but reflective of a favorable pricing environment for new and used equipment, particularly in the first half of 2023, and our focus on providing more customized equipment solutions which yield a higher gross margin versus standard products. The favorable pricing market coupled with our flexible rent-to-sell rental model, which allows us to sell previously depreciated rental fleet, led to a 540 basis point increase in rental equipment sales margin when comparing the year-over-year periods despite lower sales volume in the category. The lower sales volume of rental equipment sales is related to loosening supply chain constraints on new equipment, which led to the large increase in new equipment sales, as previously mentioned. Parts sales margins are improved 120 basis points year to date when compared to the same time last year amid a favorable pricing environment and the high gross margins realized on parts in the Master Distribution segment acquired in the fourth quarter of 2022. We realized a 110 basis point decrease in rental revenues gross margin for the nine months ended September 30, 2023, largely a result of replenishing and increasing the size of our rental fleet and the related incremental increase in depreciation expense associated thereto. Service gross margins increased by 30 basis points, remaining consistent year over year and in line with expectations.

Operating expenses: Consolidated operating expenses increased by $14.3 million to $112.2 million for the three months ended September 30, 2023 compared to the same period last year, driven primarily by the full period impact from our 2022 acquisitions, costs associated with organic headcount growth, increases in labor and operating input costs, and certain sales-based expenses.

Consolidated operating expenses increased by $54.5 million to $332.0 million for the nine months ended September 30, 2023 compared to the same period last year. The increase is primarily driven by the full period impact from our 2022 acquisitions and incremental expenses to support our organic growth, such as overall headcount growth, incremental technician service vehicles and marketing expenditures. Additionally, the large increase in equipment sales resulted in higher sales commissions. Further, employment costs such as wages and benefits increased due to inflationary labor market factors.

Other expense, net: Consolidated other expense for the three months ended September 30, 2023 was $13.8 million compared to $8.3 million for the same period in 2022. The increase is primarily due to an ~~initial sale~~increase in interest expense due to higher interest rates and more debt outstanding relative to the same period in 2022.

Consolidated other expense, net for the nine months ended September 30, 2023 was $38.3 million compared to $20.5 million for the same period in 2022. The increase is primarily due to an increase in interest expense due to higher interest rates and more debt outstanding due to recent debt-financed acquisitions and higher inventory and rental fleet levels.

Provision for income taxes: The Company recorded an income tax benefit of ~~shares (the “Founder Shares”)~~$7.3 million and provision of ~~Class B common stock, par value $0.0001 per share,~~$0.3 million for the three months ended September 30, 2023 and 2022, respectively and $6.9 million benefit and $0.8 million expense for the nine months ended September 30, 2023 and 2022, respectively. The income tax benefit in the current year was due to the full release of the valuation allowance during the third quarter while the prior year expense was primarily due to income that could not be fully offset with net operating losses.

Material Handling Results


	Three Months Ended September 30,						Increase (Decrease)					Nine Months Ended September 30,						Increase (Decrease)
	2023			2022			2023 versus 2022					2023			2022			2023 versus 2022
Revenues:
New and used equipment sales	$	89.8		$	83.7		$	6.1		7.3	%	$	267.5		$	222.7		$	44.8		20.1	%
Parts sales		24.4			22.3			2.1		9.4	%		75.8			61.6			14.2		23.1	%
Service revenues		33.2			29.6			3.6		12.2	%		99.1			83.2			15.9		19.1	%
Rental revenues		19.6			17.7			1.9		10.7	%		56.2			44.7			11.5		25.7	%
Rental equipment sales		1.6			2.0			(0.4	)	(20.0	)%		3.9			4.2			(0.3	)	(7.1	)%
Total revenues		168.6			155.3			13.3		8.6	%		502.5			416.4			86.1		20.7	%
Cost of revenues:
New and used equipment sales		70.9			67.5			3.4		5.0	%		212.8			175.9			36.9		21.0	%
Parts sales		15.0			13.7			1.3		9.5	%		46.7			38.3			8.4		21.9	%
Service revenues		14.5			13.3			1.2		9.0	%		42.8			35.8			7.0		19.6	%
Rental revenues		2.3			2.0			0.3		15.0	%		6.6			4.7			1.9		40.4	%
Rental depreciation		6.7			5.4			1.3		24.1	%		19.5			13.4			6.1		45.5	%
Rental equipment sales		0.7			0.9			(0.2	)	(22.2	)%		2.2			2.3			(0.1	)	(4.3	)%
Total cost of revenues		110.1			102.8			7.3		7.1	%		330.6			270.4			60.2		22.3	%
Gross profit		58.5			52.5			6.0		11.4	%		171.9			146.0			25.9		17.7	%
General and administrative expenses		54.9			44.1			10.8		24.5	%		140.3			122.6			17.7		14.4	%
Non-rental depreciation and amortization		1.9			1.8			0.1		5.6	%		5.9			5.2			0.7		13.5	%
Total operating expenses		56.8			45.9			10.9		23.7	%		146.2			127.8			18.4		14.4	%
Income from operations		1.7			6.6			(4.9	)	(74.2	)%		25.7			18.2			7.5		41.2	%
Other (expense) income:
Interest expense, floor plan payable – new equipment		(0.8	)		(0.4	)		(0.4	)	100.0	%		(1.9	)		(0.8	)		(1.1	)	137.5	%
Interest expense – other		(4.1	)		(2.7	)		(1.4	)	51.9	%		(11.3	)		(7.2	)		(4.1	)	56.9	%
Other income		8.0			1.1			6.9		627.3	%		0.3			3.3			(3.0	)	(90.9	)%
Total other income (expense), net		3.1			(2.0	)		5.1		(255.0	)%		(12.9	)		(4.7	)		(8.2	)	174.5	%
Income before taxes	$	4.8		$	4.6		$	0.2		4.3	%	$	12.8		$	13.5		$	(0.7	)	(5.2	)%


	Percent of Revenues						Percent of Revenues
Material Handling	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues:
New and used equipment sales		53.3	%		53.8	%		53.2	%		53.5	%
Parts sales		14.5	%		14.4	%		15.1	%		14.8	%
Service revenues		19.7	%		19.1	%		19.7	%		20.0	%
Rental revenues		11.6	%		11.4	%		11.2	%		10.7	%
Rental equipment sales		0.9	%		1.3	%		0.8	%		1.0	%
Total revenues		100.0	%		100.0	%		100.0	%		100.0	%
Cost of revenues:
New and used equipment sales		42.1	%		43.5	%		42.3	%		42.2	%
Parts sales		8.9	%		8.8	%		9.3	%		9.2	%
Service revenues		8.6	%		8.6	%		8.6	%		8.6	%
Rental revenues		1.3	%		1.3	%		1.3	%		1.1	%
Rental depreciation		4.0	%		3.4	%		3.9	%		3.2	%
Rental equipment sales		0.4	%		0.6	%		0.4	%		0.6	%
Total cost of revenues		65.3	%		66.2	%		65.8	%		64.9	%
Gross profit		34.7	%		33.8	%		34.2	%		35.1	%


	Organic Revenues									Organic Revenues
	Three Months Ended September 30,				Increase (Decrease)					Nine Months Ended September 30,				Increase (Decrease)
	2023		2022		2023 versus 2022					2023		2022		2023 versus 2022
Total revenues	$	168.6	$	155.3	$	13.3		8.6	%	$	502.5	$	416.4	$	86.1		20.7	%
Acquisitions revenues		15.3		8.0							45.9		8.0
Organic revenues:
New and used equipment sales		84.1		81.3		2.8		3.4	%		250.1		220.3		29.8		13.5	%
Parts sales		21.7		20.6		1.1		5.3	%		67.4		59.9		7.5		12.5	%
Service revenues		30.2		27.9		2.3		8.2	%		90.1		81.5		8.6		10.6	%
Rental revenues		16.1		15.9		0.2		1.3	%		46.4		42.9		3.5		8.2	%
Rental equipment sales		1.2		1.6		(0.4	)	(25.0	)%		2.6		3.8		(1.2	)	(31.6	)%
Total organic revenues	$	153.3	$	147.3	$	6.0		4.1	%	$	456.6	$	408.4	$	48.2		11.8	%

Revenues: Material Handling segment revenues increased by $13.3 million, or 8.6%, to $168.6 million for the three months ended September 30, 2023 as compared to the same period last year. The primary drivers of this period over period increase were the favorable full period impact from the YIT acquisition in the third quarter of 2022, realization of new equipment sales backlog, general price increases and our ability to grow product support and rental revenues on an organic basis. Organic new and used equipment sales increased by $2.8 million, or 3.4%, over the same period last year as market demand for equipment remains stable amidst a favorable pricing environment when compared to the same period ended September 30, 2022. Our equipment sales backlog remains healthy as of September 30, 2023. Organic parts sales and service revenues increased by 5.3% and 8.2%, respectively, over the same period last year amid a favorable pricing environment and higher technician headcount. Similarly, rental revenues exhibited growth on an organic basis of 1.3% period over period primarily related to higher nominal level of fleet on rent in our operating regions. Although a relatively immaterial component of the overall sales mix in the Material Handling segment, rental equipment sales decreased organically by $0.4 million over the prior year as we actively manage our rental fleet size amid periods of high rental demand, while remaining focused on growing our field population for future product support business by selling used equipment out of our rental fleet.

Material Handling segment revenues increased by $86.1 million to $502.5 million for the nine months ended September 30, 2023 as compared to the same period last year. Organically, the segment revenues increased 11.8% year to date over the same period in the prior year based on a favorable demand backdrop, elevated pricing environment and the ability of our OEMs to deliver more new equipment in 2023 versus 2022 allowing for throughput on our equipment sales backlog. Importantly, on an organic basis product support revenues, made up of the combined parts and service departments, increased 11.4% as volumes and pricing showed improvements. Rental revenues increased 8.2%, on an organic basis for the nine months ended September 30, 2023 as compared to the same period last year on higher rental rates and a higher nominal level of fleet on rent, and rental equipment sales decreased 31.6% on low volume due to our ~~sponsor, B. Riley Principal Sponsor Co., LLC,~~strategic decision to retain fleet to benefit from the elevated rental demand environment but still accommodate sales into our territories to bolster field population for longer-term returns in our product support departments.

Gross profit (GP):


	Three Months Ended September 30,						Increase (Decrease)			Nine Months Ended September 30,						Increase (Decrease)
	2023			2022			2023 versus 2022			2023			2022			2023 versus 2022
	GP%			GP%			GP%			GP%			GP%			GP%
New and used equipment sales		21.0	%		19.4	%		1.6	%		20.4	%		21.0	%		(0.6	)%
Parts sales		38.5	%		38.6	%		(0.1	)%		38.4	%		37.8	%		0.6	%
Service revenues		56.3	%		55.1	%		1.2	%		56.8	%		57.0	%		(0.2	)%
Rental revenues		54.1	%		58.2	%		(4.1	)%		53.6	%		59.5	%		(5.9	)%
Rental equipment sales		56.3	%		55.0	%		1.3	%		43.6	%		45.2	%		(1.6	)%

Segment gross profit		34.7	%		33.8	%		0.9	%		34.2	%		35.1	%		(0.9	)%

Material Handling gross profit for the three months ended September 30, 2023 increased 90 basis points to 34.7% compared to the same period in 2022. Although the revenue mix was weighted less heavily toward equipment sales, the improved margins in new, used and rental equipment sales improved the overall segment gross profit margin. New and used equipment sales margins increased 160 basis points from the same periods in 2022 but align with expectations. Parts gross profit margins decreased 10 basis points to 38.5% and service gross profit margins increased 120 basis points, both in line with historic norms and expectations. Gross margins on rental revenues were reduced in the three months ended September 30, 2023 when compared to the same period in 2022, a ~~Delaware limited liability company (the “Sponsor”),~~result

driven by increased rental depreciation expense associated with the acquisition of YIT in the third quarter of 2022 and the ~~proceeds~~increased size of ~~a promissory note (the “Note”)~~our rental fleet.

Material Handling gross profit for the nine months ended September 30, 2023 decreased 90 basis points to 34.2% compared to the same period in 2022. New and used equipment gross margins compressed slightly due to product mix variances, and parts and service gross margins have remained relatively consistent year over year. The 20 basis point service margin decline in the Material Handling segment for the nine months ended September 30, 2023 compared to the prior year same period can be partially attributed to the inclusion of our acquired company, YIT, with average service margins lower than the organic locations existing in both periods. Rental revenues gross margins have declined 590 basis points due to replenishing and increasing the size of our rental fleet and the related incremental increase in depreciation expense, and increased rental depreciation expense associated with the acquisition of YIT in the third quarter of 2022. Rental equipment sales margins decreased slightly on low volume of sales.

Operating expenses: Material Handling operating expenses increased by $10.9 million to $56.8 million for the three months ended September 30, 2023 as compared to the same period last year, primarily the result of full period impact from YIT acquisition and sales commissions, labor and operating input costs that support organic revenue growth and changes in intercompany allocation of shared service expenses with offsetting impact in Other income.

Material Handling operating expenses increased by $18.4 million to $146.2 million for the nine months ended September 30, 2023 as compared to the same period last year, mainly due to the full period impact from the ~~Sponsor,~~YIT acquisition. Sales-related variable costs, such as equipment sales commissions and labor and operating input costs that support organic revenue growth, as described previously, and changes in intercompany allocation of shared service expenses also impacting the ~~amount~~year-over-year variance.

Other income (expense), net: Material Handling other income (expense), net increased by $5.1 million to $3.1 million of ~~$300,000.~~income for the three months ended September 30, 2023 as compared to the same period last year, primarily due to the aforementioned change in intercompany allocation of expenses for shared service functions between segments.

Material Handling other expense, net increased by $8.2 million to $12.9 million for the nine months ended September 30, 2023 as compared to the same period last year. The ~~Note was repaid upon~~increase is mainly related to the ~~closing~~increased interest expense associated with an increase in total borrowings used to support a larger rental fleet, higher inventory levels and debt-financed acquisitions combined with a rise in interest rates on our floating-rate debt and the aforementioned change in intercompany expense allocation for shared service functions.

Construction Equipment Results


	Three Months Ended September 30,						Increase (Decrease)					Nine Months Ended September 30,						Increase (Decrease)
	2023			2022			2023 versus 2022					2023			2022			2023 versus 2022
Revenues:
New and used equipment sales	$	150.8		$	126.4		$	24.4		19.3	%	$	412.1		$	356.3		$	55.8		15.7	%
Parts sales		42.9			39.5			3.4		8.6	%		126.4			111.9			14.5		13.0	%
Service revenues		27.3			24.7			2.6		10.5	%		81.1			71.0			10.1		14.2	%
Rental revenues		34.1			32.5			1.6		4.9	%		90.2			86.8			3.4		3.9	%
Rental equipment sales		26.9			26.6			0.3		1.1	%		86.8			100.8			(14.0	)	(13.9	)%
Total revenues		282.0			249.7			32.3		12.9	%		796.6			726.8			69.8		9.6	%
Cost of revenues:
New and used equipment sales		131.5			109.0			22.5		20.6	%		353.7			306.7			47.0		15.3	%
Parts sales		29.5			26.3			3.2		12.2	%		88.5			78.4			10.1		12.9	%
Service revenues		12.0			11.0			1.0		9.1	%		34.0			30.5			3.5		11.5	%
Rental revenues		3.4			3.9			(0.5	)	(12.8	)%		11.4			12.0			(0.6	)	(5.0	)%
Rental depreciation		22.5			20.5			2.0		9.8	%		59.7			56.1			3.6		6.4	%
Rental equipment sales		20.3			19.9			0.4		2.0	%		64.3			80.3			(16.0	)	(19.9	)%
Total cost of revenues		219.2			190.6			28.6		15.0	%		611.6			564.0			47.6		8.4	%
Gross profit		62.8			59.1			3.7		6.3	%		185.0			162.8			22.2		13.6	%
General and administrative expenses		57.3			45.9			11.4		24.8	%		152.3			132.0			20.3		15.4	%
Non-rental depreciation and amortization		2.5			1.9			0.6		31.6	%		7.3			6.4			0.9		14.1	%
Total operating expenses		59.8			47.8			12.0		25.1	%		159.6			138.4			21.2		15.3	%
Income from operations		3.0			11.3			(8.3	)	(73.5	)%		25.4			24.4			1.0		4.1	%
Other (expense) income:
Interest expense, floor plan payable – new equipment		(1.3	)		(0.4	)		(0.9	)	225.0	%		(3.3	)		(0.8	)		(2.5	)	312.5	%
Interest expense – other		(7.4	)		(4.4	)		(3.0	)	68.2	%		(19.9	)		(11.3	)		(8.6	)	76.1	%
Other income (expense)		6.5			(0.8	)		7.3		(912.5	)%		1.5			(2.4	)		3.9		(162.5	)%
Total other expense, net		(2.2	)		(5.6	)		3.4		(60.7	)%		(21.7	)		(14.5	)		(7.2	)	49.7	%
Income before taxes	$	0.8		$	5.7		$	(4.9	)	(86.0	)%	$	3.7		$	9.9		$	(6.2	)	(62.6	)%


	Percent of Revenues						Percent of Revenues
Construction Equipment	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues:
New and used equipment sales		53.5	%		50.6	%		51.7	%		49.0	%
Parts sales		15.2	%		15.8	%		15.9	%		15.4	%
Service revenues		9.7	%		9.9	%		10.2	%		9.8	%
Rental revenues		12.1	%		13.0	%		11.3	%		11.9	%
Rental equipment sales		9.5	%		10.7	%		10.9	%		13.9	%
Total revenues		100.0	%		100.0	%		100.0	%		100.0	%
Cost of revenues:
New and used equipment sales		46.5	%		43.7	%		44.4	%		42.2	%
Parts sales		10.5	%		10.5	%		11.1	%		10.8	%
Service revenues		4.3	%		4.4	%		4.3	%		4.2	%
Rental revenues		1.2	%		1.5	%		1.4	%		1.7	%
Rental depreciation and amortization		8.0	%		8.2	%		7.5	%		7.7	%
Rental equipment sales		7.2	%		8.0	%		8.1	%		11.0	%
Total cost of revenues		77.7	%		76.3	%		76.8	%		77.6	%
Gross profit		22.3	%		23.7	%		23.2	%		22.4	%


	Organic Revenues								Organic Revenues
	Three Months Ended September 30,				Increase (Decrease)				Nine Months Ended September 30,				Increase (Decrease)
	2023		2022		2023 versus 2022				2023		2022		2023 versus 2022
Total revenues	$	282.0	$	249.7	$	32.3	12.9	%	$	796.6	$	726.8	$	69.8		9.6	%
Acquisitions revenues		—		—						—		—
Organic revenues:
New and used equipment sales		150.8		126.4		24.4	19.3	%		412.1		356.3		55.8		15.7	%
Parts sales		42.9		39.5		3.4	8.6	%		126.4		111.9		14.5		13.0	%
Service revenues		27.3		24.7		2.6	10.5	%		81.1		71.0		10.1		14.2	%
Rental revenues		34.1		32.5		1.6	4.9	%		90.2		86.8		3.4		3.9	%
Rental equipment sales		26.9		26.6		0.3	1.1	%		86.8		100.8		(14.0	)	(13.9	)%
Total organic revenues	$	282.0	$	249.7	$	32.3	12.9	%	$	796.6	$	726.8	$	69.8		9.6	%

Revenues: Construction Equipment segment revenues increased by $32.3 million to $282.0 million for the three months ended September 30, 2023 as compared to the same period last year. As no acquisitions occurred within the segment over the comparable periods, the entire increase is organic. New and used equipment sales increased 19.3% over the same period last year primarily reflective of ~~the Public Offering.~~

~~At March 31, 2019 we had cash~~inflationary pricing increases and increased supply of ~~$31,665~~equipment from OEMs. Notably, parts and ~~a working capital deficit of $382,064.~~

~~We completed the sale of 12,500,000 units at an offering price of $10.00 per unit in the Public Offering. The Sponsor subscribed to purchase an aggregate of 425,000 units~~service sales increased 8.6% and 10.5%, respectively, growing at a ~~price~~combined rate of $10.00 per Private Placement Unit in a private placement that closed on April 11, 2019 simultaneously with the Public Offering. The sale of the 12,500,000 Units generated gross proceeds of $125,000,000, less underwriting commissions of $2,500,000 (2% of gross proceeds) and other offering costs of $458,987. The Private Placement Units generated $4,250,000 of proceeds.

Each unit consists of one share of our Class A common stock, $0.0001 par value (each a “public share”), and one-half of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock (each, a “Warrant” and, collectively, the “Warrants” and, with respect9.3% when compared to the warrants underlying the Private Placement Units, the “Private Placement Warrants”). One Warrant entitles the holder thereof to purchase one whole share of Class A common stock at a price of $11.50 per share.

We granted the underwriters a 45-day option to purchase on a pro rata basis up to 1,875,000 additional units at the initial public offering price less the underwriting discounts and commissions. On April 12, 2019, we consummated the closing of the sale of 1,875,000 additional units upon receiving notice of the underwriters’ election to exercise their overallotment option (“Overallotment Units”), generating additional gross proceeds of $18,750,000 and incurred additional offering costs of $375,000 in underwriting fees. Simultaneously with the exercise of the overallotment, we consummated the Private Placement of an additional 37,500 Private Placement Units to the Sponsor, generating gross proceeds of $375,000. In addition, assame period last year, a result of the ~~underwriters’ election~~ability to ~~exercise their overallotment option~~realize the ~~Founder Shares are no longer forfeitable.~~returns from a growing equipment field population and labor rate increases. Rental revenues have increased 4.9%, primarily on rate increases, when compared to the prior year, and rental equipment sales increased 1.1% as we strategically balance the decision to retain fleet to benefit from the elevated rental rate environment but still accommodate sales into our territories to bolster field population for longer-term returns in our product support departments.

Construction Equipment segment revenues increased by $69.8 million to $796.6 million for the nine months ended September 30, 2023 as compared to the same period last year. Segment revenues increased 9.6% for the nine months ended September 30, 2023 over the same period in the prior year based on a favorable demand backdrop, an elevated pricing environment and our OEMs ability to deliver more new equipment in 2023 versus 2022. New and used equipment sales increased by 15.7% as OEM production shortages in the prior year for new equipment have subsided in the current year, exhibited by the shift in sales mix from rental equipment sales into new equipment sales when comparing the periods. Rental equipment sales decreased for the nine months ended September 30, 2023 due to the aforementioned shift to new equipment sales which allowed for more flexibility in the decision as to whether to strategically sell equipment out of the rental fleet or to retain fleet to benefit from the elevated rental rate environment during the warmer weather rental season. Product support revenues increased 13.4% due to favorable pricing and volumes. Rental revenues increased 3.9% for the nine months ended September 30, 2023 as compared to the same period last year primarily attributable to an increased rental rate environment existing between the comparable periods.

~~In addition, income~~Gross profit (GP):


	Three Months Ended September 30,						Increase (Decrease)			Nine Months Ended September 30,						Increase (Decrease)
	2023			2022			2023 versus 2022			2023			2022			2023 versus 2022
	GP%			GP%			GP%			GP%			GP%			GP%
New and used equipment sales		12.8	%		13.8	%		(1.0	)%		14.2	%		13.9	%		0.3	%
Parts sales		31.2	%		33.4	%		(2.2	)%		30.0	%		29.9	%		0.1	%
Service revenues		56.0	%		55.5	%		0.5	%		58.1	%		57.0	%		1.1	%
Rental revenues		24.0	%		24.9	%		(0.9	)%		21.2	%		21.5	%		(0.3	)%
Rental equipment sales		24.5	%		25.2	%		(0.7	)%		25.9	%		20.3	%		5.6	%

Segment gross profit		22.3	%		23.7	%		(1.4	)%		23.2	%		22.4	%		0.8	%

Construction Equipment gross profit decreased by 140 basis points to 22.3% in the three months ended September 30, 2023 from 23.7% in the same period in 2022. New and used equipment sales margins declined 100 basis points to 12.8% amid a competitive sales backdrop. Notably, nominal gross margin dollars increased when compared to the same period in 2022 on higher equipment sales volumes. Parts sales margins declined 220 basis points but remain in line with recent trends. Service gross profit margins remained consistent and in line with expectations. Gross margin on rental revenues were reduced in the three months ended September 30, 2023 when compared to the same period in 2022, a result primarily driven by increased rental depreciation expense associated with the increased size of our construction rental fleet.

Construction Equipment gross profit increased by 80 basis points to 23.2% in the nine months ended September 30, 2023 from 22.4% in the same period in 2022, with overall margin improvements reflective of the general business climate and demand factors of the industry. Specifically, new and used equipment sales margins increased 30 basis points to 14.2%, primarily related to a strong

pricing environment and our ability to provide value-added products to customers, when compared to the same period last year. Notably, with the increased sales volume of new and used equipment coupled with the strong pricing environment, new and used gross profit increased to $58.4 million from $49.6 million in the same period last year. The increased availability of new equipment allowed for a more measured approach on the ~~funds held~~sale of rental equipment. Despite a lower sales volume of rental equipment, the flexibility afforded by the availability of new equipment in our markets allowed for a more deliberate approach to rental equipment sales which led to a 560 basis point increase in rental equipment sales margin when comparing the year-over-year periods (equating to rental equipment gross profits of $22.5 million compared to $20.5 million from the same period last year). Parts sales margins for the nine months ended September 30, 2023 remained consistent when compared to the same time last year. Service gross margins increased by 110 basis points year over year primarily related to positive trends in road, shop and warranty services when compared to the same period last year. Rental revenues gross margin for the nine months ended September 30, 2023 was consistent with the same period last year.

Operating expenses: Construction Equipment operating expenses increased by $12.0 million to $59.8 million for the three months ended September 30, 2023 as compared to the same period in 2022. The increase can be attributed to incremental variable expenses associated with our organic sales growth and customer relation efforts as well as changes in intercompany allocation of shared service expenses with offsetting impact in Other income.

Construction Equipment operating expenses increased by $21.2 million to $159.6 million for the nine months ended September 30, 2023 as compared to the same period in 2022. The increase is mainly due to inflationary factors, general headcount increases in the ~~Trust Account~~segment, rising benefit costs, and incremental expenses associated with our organic growth, such as technician service vehicles as well as changes in allocation of intercompany expenses across segments for shared service functions.

Other expense, net: Construction Equipment other expense decreased by $3.4 million to $2.2 million for the three months ended September 30, 2023 as compared to the same period in 2022 primarily due to the aforementioned change in intercompany allocation of expenses for shared service functions between segments.

Construction Equipment other expense, net increased by $7.2 million to $21.7 million for the nine months ended September 30, 2023 as compared to the same period in 2022. The variance was mainly due to the increase in interest rates on our floating-rate debt and the interest expense related to a larger rental fleet and higher inventory levels partially offset by the aforementioned change in shared service function intercompany segment allocations.

Master Distribution Results

The Company began separately reporting Master Distribution as its own segment in the first quarter of 2023. This business was acquired during the fourth quarter of 2022. As such, all Master Distribution revenue is considered inorganic and the below tables do not include comparable data for the three and nine months ended September 30, 2022.


	Three Months Ended September 30,			Nine Months Ended September 30,
	2023			2023
Revenues:
New and used equipment sales	$	15.2		$	57.3
Parts sales		2.5			7.9
Service revenues		0.1			0.3
Rental revenues		0.3			0.7
Rental equipment sales		—			—
Total revenues		18.1			66.2
Cost of revenues:
New and used equipment sales		12.0			42.7
Parts sales		1.1			3.8
Service revenues		—			0.2
Rental revenues		—			—
Rental depreciation		0.2			0.5
Rental equipment sales		—			—
Total cost of revenues		13.3			47.2
Gross profit		4.8			19.0
General and administrative expenses		3.3			9.1
Non-rental depreciation and amortization		0.9			2.7
Total operating expenses		4.2			11.8
Income from operations		0.6			7.2
Other (expense) income:
Interest expense, floor plan payable – new equipment		(0.2	)		(0.5	)
Interest expense – other		(0.7	)		(2.0	)
Other expense		0.6			0.4
Total other expense, net		(0.3	)		(2.1	)
Income before taxes	$	0.3		$	5.1


	Percent of Revenues			Percent of Revenues
Master Distribution	Three Months Ended September 30,			Nine Months Ended September 30,
	2023			2023
Revenues:
New and used equipment sales		84.0	%		86.6	%
Parts sales		13.8	%		11.9	%
Service revenues		0.5	%		0.4	%
Rental revenues		1.7	%		1.1	%
Rental equipment sales		—			—
Total revenues		100.0	%		100.0	%

Gross profit (GP):


	Three Months Ended September 30,			Nine Months Ended September 30,
	2023			2023
	GP%			GP%
New and used equipment sales		21.1	%		25.5	%
Parts sales		56.0	%		51.9	%
Service revenues		100.0	%		33.3	%
Rental revenues		33.3	%		28.6	%
Rental equipment sales	NA			NA

Segment gross profit		26.5	%		28.7	%

Overall Summary: Master Distribution segment revenues for the quarter were $18.1 million, made up primarily, 84.0%, of new and used equipment sales and secondarily, 13.8%, of parts sales. It should be noted that Master Distribution’s equipment revenue is seasonal and more heavily weighted towards the first half of the fiscal year, and the first quarter in general, as Master Distribution sells to a network of subdealers who tend to stock inventory early in the year ahead of their customers' buying season. Parts revenues do not have the same level of seasonality. Year-to-date segment revenues were $66.2 million, with 86.6% of sales coming in the form of new and used equipment and 11.9% of sales coming from parts.

Gross profit margin on new and used equipment sales and parts sales was 21.1% and 56.0%, respectively, for the quarter. These gross margin levels are in line with our expectations and pre-acquisition history. Year-to-date gross profit margins on new and used equipment sales and parts sales were 25.5% and 51.9%, respectively.

Operating expenses: Master Distribution segment operating expenses were $4.2 million for the three months ended September 30, 2023 and $11.8 million for the nine months ended September 30, 2023. Personnel costs, such as wages and commissions, and sales-related expenses are the primary operating expense of the Master Distribution segment.

Other expense, net: Master Distribution other expense was $0.3 million for the three months ended September 30, 2023 and $2.1 million for the nine months ended September 30, 2023. Other expenses of the Master Distribution segment include interest expense and foreign currency exchange variances.

Liquidity and Capital Resources

The nine months ended September 30, 2023 and 2022 Cash Flows

Cash Flow from Operating Activities. Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital. For the nine months ended September 30, 2023, operating activities resulted in net cash used in operations of $19.4 million. Our reported net income of $10.8 million, when adjusted for non-cash income and expense items, such as depreciation and amortization, inventory obsolescence and bad debt reserves, and stock-based compensation, provided net cash inflows of $91.5 million. Changes in working capital included $247.4 million of inventory purchased (of which $143.0 million has been transferred into our rental fleet for replenishment and growth purposes), and a $32.7 million increase in accounts receivable. Cash flows from operating activities were favorably impacted by $90.7 million due to proceeds from the sale of rental equipment, $97.9 million in net inflows related to manufacturer floor plans and unfavorably impacted by a $6.9 million decrease in accounts payable, accrued expenses, customer deposits, and other current liabilities and by a $12.5 million net change in prepaid expenses and other assets and leases, deferred revenue, and other liabilities.

For the nine months ended September 30, 2022, operating activities resulted in net cash provided by operations of $18.3 million. Our cash flows from operating activities related to net income adjusted for non-cash income and expenses, primarily the gain on sale of rental fleet, depreciation and amortization, inventory obsolescence and bad debt reserves, and stock-based compensation, generated $78.2 million for the nine months ended September 30, 2022. This was partially offset by $59.9 million of net working capital investments. Changes in working capital included $200.8 million of inventory purchased (of which $101.0 million was transferred into

our rental fleet for replenishment and growth purposes), and a $24.8 million increase in accounts receivable. Cash flows from operating activities were favorably impacted by $105.1 million due to proceeds from the sale of rental equipment, $37.8 million in net inflows related to manufacturer floor plans and by a $30.5 million increase in accounts payable, accrued expenses, customer deposits, and other current liabilities and unfavorably impacted by a $7.7 million net change in prepaid expenses and other assets and leases, deferred revenue, and other liabilities.

Cash Flow from Investing Activities. For the nine months ended September 30, 2023, our cash used in investing activities was $60.6 million. This was mainly due to $61.4 million purchases of rental equipment, non-rental property and equipment, and equipment contracted under guaranteed purchase obligations as well as acquisition activity partially offset by $0.8 million proceeds from the sale of non-rental property and equipment.

For the nine months ended September 30, 2022, our cash used in investing activities was $85.7 million. This was mainly due to $46.8 million purchases of rental equipment and non-rental property and equipment and $40.4 million use of cash for the YIT acquisition and adjustments to the purchase prices of two of our 2021 acquisitions partially offset by $1.5 million of proceeds from the sale of non-rental assets and equipment contracted under guaranteed purchase obligations .

Cash Flow from Financing Activities. For the nine months ended September 30, 2023, cash provided by financing activities was $78.2 million. The favorable impact was mainly due to $81.5 million of net proceeds under our line of credit, long-term debt, and finance lease obligations, which funded the increase in net working capital and rental fleet as previously noted and net proceeds of $9.8 million related to non-manufacturer floor plans. This was partially offset by payments of $7.9 million for preferred and common stock dividends and $5.2 million related to other financing activities.

For the nine months ended September 30, 2022, cash provided by financing activities was $67.3 million. The favorable impact was mainly due to $57.5 million of net proceeds under our line of credit, primarily related to a draw on the line to fund the YIT acquisition, and net proceeds of $17.5 million related to non-manufacturer floor plans. This was partially offset by $2.5 million payments on finance lease obligations, $4.0 million related to preferred dividend payments and $1.2 million related to other financing activities.

Sources of Liquidity

Our principal sources of liquidity have been from cash provided by our service, parts and rental related operations and the sales of new, used, and rental fleet equipment, proceeds from the issuance of debt, and borrowings available under our line of credit and floor plans. The Company reported $1.4 million in cash for the period ended September 30, 2023. For more information on our available borrowings under the revolving line of credit, senior secured second lien notes, and floor plans, please refer to Note 9, Floor Plans and Note 10, Long-term Debt. We consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested as we do not anticipate the need to repatriate funds to the U.S. to satisfy domestic liquidity needs.

Cash Requirements Related to Operations

Our principal uses of cash have been to fund operating activities and working capital, including but not limited to new and used equipment inventories, purchases of rental fleet equipment and personal property, payments due under line of credit and floor plans, acquisitions, debt service requirements, and preferred stock and common stock dividends. In the future, we may ~~be released~~pursue additional strategic acquisitions and seek to open new start-up locations. We anticipate that the uses described above encompass the principal demands on our cash and availability under our line of credit and floor plans in the future.

The amount of our future capital expenditures will depend on a number of factors including general economic conditions and growth prospects. Our gross rental fleet capital expenditures for the period ended September 30, 2023 was $191.7 million, including $143.0 million of transfers from new and used inventory to rental fleet. This gross rental fleet capital expenditure was offset by sales proceeds of rental equipment of $90.7 million for the period ended September 30, 2023 as our business model is to sell lightly used inventory to customers from our rental fleet to increase field population in our geographies. In response to changing economic conditions, we have the flexibility to modify our capital expenditures, especially as it relates to rental fleet.

To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness, will depend upon our future operating performance and the availability of borrowings under the line of credit and/or other debt and equity financing alternatives available to us, ~~to pay our franchise~~which will be affected by prevailing economic conditions and ~~income taxes.~~

~~We do not believe we will need to raise additional funds other than the funds raised~~conditions in the ~~Public Offering~~global credit and capital markets, as well as financial, business and other factors, some of which are beyond our control. Based on ~~April 11, 2019 in order~~our current level of operations and given the current state of the capital markets, we believe our cash flow from operations, available cash, and available borrowings under the line of credit will be adequate to meet our future liquidity needs for at least the ~~expenditures required for operating our business. However, if our estimates~~next 12 months and foreseeable future thereafter. As of September 30, 2023, we had $195.2 million of available borrowings under the ~~costs~~revolving line of ~~identifying a target business, undertaking��in-depth due diligence~~credit and negotiating an Initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Initial Business Combination or because we become obligated to redeem a significant number of our shares of Class A common stock upon completion of our Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such business combination (including from our affiliates or affiliates of our Sponsor).floor plan facilities.

Critical Accounting Policies and Estimates

~~Off-Balance Sheet Arrangements~~

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets.

~~Contractual Obligations~~

At March 31, 2019, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. On April 8, 2019, we entered into an administrative support agreement pursuant to which we have agreed to pay an affiliate of the Sponsor a total of $10,000 per month for office space, administrative and support services. Upon the earlier of the completion of the Initial Business Combination and the Company’s liquidation, we will cease paying these monthly fees.

The underwriters of the Public Offering were entitled to underwriting discounts and commissions of 2.0% ($2,875,000), $2,500,000 of which was paid at the closing of the Public Offering and $375,000 was paid upon the closing of the overallotment.

We have engaged B. Riley FBR, Inc. as advisors in connection with the Initial Business Combination to assist us in arranging meetings with stockholders to discuss a potential business combination and the target business’ attributes, introduce us to potential investors that may be interested in purchasing our securities, assist us in obtaining stockholder approval for our Initial Business Combination and assist us withIn the preparation of press releases and public filings in connection with the Initial Business Combination. We will pay B. Riley FBR, Inc. for such services upon the consummation of the Initial Business Combination a cash fee in an amount equal to 3.5% of the gross proceeds of the Public Offering (exclusive of any applicable finders’ fees which might become payable). Pursuant to the terms of the business combination marketing agreement, no fee will be due if we do not complete an Initial Business Combination.

~~Critical Accounting Policies~~

~~The preparation of~~condensed consolidated financial statements ~~and related disclosures~~prepared in conformity with ~~accounting principles generally accepted in the United States requires management~~U.S. GAAP, we are required to make estimates and ~~assumptions~~judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and ~~liabilities, disclosure of contingent assets~~the related disclosures.

Our management reviews these estimates and ~~liabilities at~~assumptions on an ongoing basis. While we believe the ~~date of the condensed~~estimates and judgments we use in preparing our consolidated financial statements are reasonable and ~~income~~appropriate, they are subject to future events and ~~expenses during the periods reported. Actual~~uncertainties regarding their outcome; therefore, actual results ~~could~~may materially differ from ~~those~~these estimates. ~~We have identified~~If actual amounts are ultimately different from our estimates, the ~~following as~~revisions are included in our ~~critical accounting policies:~~

~~Net Income Per Common Share~~

~~We comply with accounting and disclosure requirements~~results of Accounting Standards Codification (“ASC”) Topic 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstandingoperations for the period ~~excluding shares~~in which the actual amounts first become known. Refer to Part I, Item 1, Note 2 of ~~common stock subject~~the notes to ~~forfeiture. Net loss per common share is computed by dividing net gain/(loss) applicable to common stockholders by~~our condensed consolidated financial statements for disclosures regarding the ~~weighted average number~~use of ~~common shares outstanding during the period, plus,~~estimates and assumptions.

Additionally, see Note 2 to the extent dilutive, the incremental number of shares of common stock to settle warrants, as calculated using the treasury stock method. At March 31, 2019 and December 31, 2018, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then shareaudited consolidated financial statements contained in the ~~earnings~~Company’s 2022 Annual Report on Form 10-K for a summary of ~~the Company under the treasury stock method. As a result, diluted loss per common share is the same as basic loss per common share for the periods. In connection with~~ our merger with GA International on November 14, 2018, we completed a 1 to 3,593,750 shares stock split of Class B common stock on November 19, 2018. The financial statements have been retroactively adjusted to reflect the stock split for all periods presented. significant accounting policies.

~~Redeemable Shares of Class A Common Stock~~

All of the 14,375,000 shares of Class A common stock sold as parts of the Units in the Public Offering and in connection with the overallotment contain a redemption feature. In accordance with the Financial Accounting Standards Board (“FASB”) ASC 480, redemption provisions not solely within our control require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although we have not specified a maximum redemption threshold, our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.

~~Deferred Offering Costs~~

We comply with the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offering.” Deferred offering costs of $372,422 and $162,500 as of March 31, 2019 and December 31, 2018, respectively, consist principally of costs incurred in connection with preparation for the Public Offering. These costs, together with the underwriter discount, were charged to capital upon completion of the Public Offering in April 2019.

~~Recent Accounting Pronouncements~~

~~Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.~~

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk.~~Risk

Our exposure to market risk primarily consists of interest rate risk associated with our variable and fixed rate debt, prices of certain commodities and foreign currency exchange rate risks. We employ financial instruments to manage the Company's exposure to changes in interest rates, diesel and unleaded fuel and foreign currencies. See Note 16, Fair Value of Financial Instruments, for more information.

Interest rate risk: Our earnings may be affected by changes in interest rates on the ABL Facility and Floor Plan Facilities. The interest rates applicable to any loans under the ABL Facility are based, at the option of the borrowers, on (i) a floating rate based on the SOFR (for loans denominated in U.S. dollars) or Canadian Dollar Offered Rate (for loans denominated in Canadian dollars) plus an initial margin of 1.75% or (ii) CBFR (for loans denominated in U.S. dollars) or the Canadian Prime Rate (for loans denominated in Canadian dollars) less an initial margin of 0.75%, in each case, where margin is adjusted under the ABL Facility based on the quarterly average excess availability under the ABL Facility. The interest rates applicable to any loans under various Floor Plan Facilities are based on a wide range of benchmark rates (including SOFR, Prime, Bloomberg Short-Term Bank Yield Index, and the Canadian Bankers' Acceptance Rate) plus an applicable margin. As of ~~March~~September 30, 2023 the lowest Floor Plan Rate was SOFR plus an initial margin of 2.75%, and the highest was SOFR plus an initial margin of 5.00% plus an adjustment of 0.1145% per annum.

At September 30, 2023 and December 31, ~~2019,~~2022, we ~~were~~had $305.3 million and $219.5 million, respectively, outstanding borrowings under the ABL Facility. At September 30, 2023 and December 31, 2022, we had $364.8 million and $256.9 million, respectively, outstanding borrowings under the Floor Plan Facilities. As of September 30, 2023, based upon the amount of our variable rate debt outstanding, each one percentage point increase in the interest rates applicable to our variable rate debt when excluding and including the hedge impact of our interest rate cap would reduce our annual pre-tax earnings by $4.8 million and $2.8 million, respectively. The amount of variable rate indebtedness outstanding may fluctuate significantly. See Note 9, Floor Plans, and Note 10, Long-Term Debt, in our condensed consolidated financial statements for additional information concerning the terms of our variable rate debt.

We have fixed rate Notes of $315.0 million which are due in 2026. We did not have exposure to changing interest rates as of September 30, 2023 on the fixed rate Notes. For additional information concerning the terms of our fixed rate debt, see Note 10, Long-Term Debt.

Commodity price risk: The market prices of diesel and unleaded fuels are unpredictable and can fluctuate significantly. Because of the volume of fuel we purchase each year, a significant increase in the price of fuel could adversely affect our business and reduce our operating margins. To manage a portion of this risk, we enter into fixed price swap contracts to purchase gasoline and diesel fuel related to forecasted fuel purchases. For the purchases of unleaded and diesel fuel that we expect to purchase at market prices in the next 12 months, each $0.10 per gallon increase in the price of diesel and unleaded fuel, holding other variables constant, would decrease our pre-tax income during this period by approximately $0.2 million when including the fixed price swap contracts.

Foreign currency exchange rate risk: Due to our international operations, a portion of our revenues, cost of revenues, and operating expenses are subject to ~~any material market or interest~~foreign currency exchange rate risk. ~~On April 11, 2019,~~Changes in the ~~net proceeds~~exchange rate of the ~~Public Offering~~U.S. dollar versus the Canadian dollar and European currencies affect the ~~Private Placement Warrants, including amounts in the Trust Account, were invested in money market funds~~translated value and relative level of revenues and net income that ~~meet certain conditions under Rule 2a-7 under the Investment Company Act. Due~~we report from one period to the ~~short-term nature~~next. Based upon balances and exchange rates as of ~~these investments,~~September 30, 2023, holding other variables constant, we believe ~~there was no associated~~that a hypothetical 10% increase or decrease in all applicable foreign exchange rates would not have a material ~~exposure to interest rate risk.~~impact on our results of operations or cash flows.

~~We have not engaged in any hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.~~

Item 4. Controls and Procedures.

Management’s Evaluation of Disclosure Controls and Procedures

~~Disclosure controls~~Management is responsible for establishing and ~~procedures are controls~~maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted15d-15(f) under the Exchange ~~Act~~Act. Our internal control over financial reporting is ~~accumulated~~a process designed to provide reasonable assurance regarding the reliability of financial reporting and ~~communicated~~the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting

may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management utilized the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to conduct an assessment of the effectiveness of our internal control over financial reporting as of September 30, 2023

Refer to Item 9A. Controls and Procedures in the 2022 Annual Report on Form 10-K for more information on the material weakness identified leading to the conclusion that our internal control over financial reporting was not effective as of December 31, 2022. As of September 30, 2023, the material weakness has not been fully remediated. Our management, including our Chief Executive Officer (who serves as our Principal Executive Officer) and Chief Financial Officer (who serves as our Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure.

~~As required by Rules 13a-15 and 15d-15 under~~with the ~~Exchange Act,~~participation of our Chief Executive Officer and Chief Financial Officer, ~~carried out an evaluation of~~evaluated the effectiveness ~~of the design and operation~~ of our disclosure controls and procedures as of ~~March 31, 2019.~~September 30, 2023. Based ~~upon their~~on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2023, our disclosure controls and procedures ~~(as defined~~were not effective due to a material weakness in ~~Rules 13a-15(e)~~internal control over financial reporting.

Our Chief Executive Officer and ~~15d-15(e) under~~Chief Financial Officer have certified that, based on each such officer’s knowledge, the ~~Exchange Act)~~financial statements, and other financial information included in this Quarterly Report on Form 10-Q, fairly present in all material respects our financial condition, results of operations, and cash flows as of, and for, the periods presented in this Quarterly Report on Form 10-Q. We are in the process of executing our remediation plan for the material weakness, which is described below.

Remediation

Management has implemented and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:

For the material weakness over the sales process; (i) we continue to develop and deliver training programs to educate personnel concerning the principles and requirements of each control impacting the sales process; (ii) we have made updates within our business system that will assist with remediation efforts; (iii) we have developed and implemented regular monitoring controls to identify and address deviations from policies in a timely manner, (iv) we are performing testing over the monitoring controls to validate they are being performed as intended.

We believe that these actions will remediate the material weakness. The material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

There were ~~effective.~~

~~During the most recently completed fiscal quarter, there has been~~ no ~~change~~changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended September 30, 2023 that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

~~Inherent Limitation~~Limitations on Effectiveness of Controls and Procedures

~~Our management, including our Chief Executive Officers~~In designing and ~~Chief Financial Officer, does not expect that our~~evaluating the disclosure controls and procedures, ~~or our internal control over financial reporting will prevent or detect all errors~~management recognizes that any controls and ~~all fraud. A control system,~~procedures, no matter how ~~well-designed~~well designed and operated, can provide only reasonable ~~not absolute,~~ assurance ~~that~~of achieving the desired control ~~system’s objectives will be met. The~~objectives. In addition, the design of ~~a control system~~disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls ~~must be considered~~and procedures relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Other than routine legal proceedings incident to our business, there are no material legal proceedings to which we are a party or to which any of our property is subject.

~~None.~~

Item 1A. Risk Factors.

~~Factors~~We face a number of uncertainties and risks that ~~could cause~~are difficult to predict and many of which are outside of our ~~actual results to differ materially from those in this Quarterly Report are any~~control. For a detailed discussion of the risks ~~described~~that affect our business, please refer to Part I, Item 1A, “Risk Factors” in our prospectus dated April 8, 2019 filed with the SEC on April 9, 2019. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

~~As of the date of this Quarterly~~Annual Report on Form ~~10-Q, there~~10-K for the fiscal year ended December 31, 2022. There have been no material changes tofrom the risk factors ~~disclosed~~included in our ~~prospectus dated April 8, 2019 filed with~~Annual Report on Form 10-K for the ~~SEC on April 9, 2019. However, we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.~~fiscal year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

~~Unregistered Sales of Equity Securities~~

On April 11, 2019, simultaneously with the closing of the Public Offering, we completed the private sale of 425,000 Private Placement Units at a purchase price of $10.00 per Private Placement Unit, to the Sponsor, generating gross proceeds to us of $4,250,000. In connection with the underwriters’ exercise of the overallotment option, we sold an additional 37,500 Private Placement Units to the Sponsor on April 12, 2019, generating gross proceeds to us of $375,000. The Private Placement Units are substantially identical to the units sold as part of the units in the Public Offering (as described below), except that our Sponsor has agreed not to transfer, assign or sell any of the Private Placement Units (except to certain permitted transferees) until 30 days after the completion of our Initial Business Combination. The Private Placement Units are also not redeemable by us so long as they are held by our Sponsor or its permitted transferees, and they may be exercised by our Sponsor and its permitted transferees on a cashless basis. The Private Placement Units were issued in connection with our incorporation pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

~~Use of Proceeds~~

On April 11, 2019, we consummated the Public Offering of 12,500,000 Units, excluding the issuance of 1,875,000 Units as a result of the underwriters’ exercise of their option to purchase additional Units in full on April 12, 2019. Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share, and one-half of one redeemable warrant of the Company. Each whole warrant entitles the holder thereof to purchase one share of Class A Common Stock for $11.50 per share, and only whole warrants are exercisable. The warrants will become exercisable on the later of 30 days after the completion of our Initial Business Combination and 12 months from the closing of the Public Offering and will expire five years after the completion of our Initial Business Combination or earlier upon redemption or liquidation. Subject to certain terms and conditions, we may redeem the warrants either for cash once the warrants become exercisable or for shares of our Class A Common Stock commencing 90 days after the warrants become exercisable.

The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $143,750,000. B. Riley FBR, Inc. served as the sole book-running manager for the offering. The securities sold in the Public Offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-230286). The SEC declared the registration statements effective on April 8, 2019.

We paid a total of $2,875,000 in underwriting discounts and commissions and $458,987 for other costs and expenses related to the Public Offering. B. Riley FBR, Inc., an underwriter in the Public Offering, and an affiliate of us and our Sponsor (which Sponsor beneficially owns more than 10% of our common stock) received a portion of the underwriting discounts and commissions related to thePublic Offering. After deducting the underwriting discounts and commissions and incurred offering costs, the total net proceeds from our Public Offering and the sale of the Private Placement Warrants was $~~148,375,000,of which $143,750,000~~(or $10.00 per unit sold in the Public Offering) was placed in the Trust Account. We also repaid $67,950 in non-interest bearing loans made to us by our Sponsor to cover expenses related to the Public Offering. Other than as described above, no payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates.

Item 3. Defaults Upon Senior Securities.

None.

~~None.~~

Item 4. Mine Safety Disclosures.

Not Applicable.

~~Not applicable.~~

Item 5. Other Information.

Effective May 15, 2023, Craig Brubaker, Chief Operating Officer of the Company, entered into a pre-arranged stock trading plan (the “10b5-1 Plan”) with a brokerage firm to sell up to 43,525 shares of the Company’s Common Stock in order to pay taxes on previously issued share grants and to diversify his investment holdings.

Sales under the 10b5-1 Plan will continue until all such shares are sold or August 13, 2024, whichever comes first.

~~None.~~The 10b5-1 Plan was designed to comply with the Company’s insider trading policies and the guidelines specified in Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended, which provide an affirmative defense for an officer or director to enter into a pre-arranged plan for buying or selling Company stock at a time when the officer or director is not in possession of material, nonpublic information about the Company.

All sales of Common Stock under the 10b5-1 Plan will be disclosed publicly in accordance with applicable securities laws, rules, and regulations through appropriate filings with the SEC.

Item 6. Exhibits.

~~The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.~~

~~Exhibit Index~~

~~Exhibit~~ ~~No.~~		~~Description~~
Exhibit Number		Description
31.1* 3.1		Third Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Form 8-A (File No. 001-38864) filed by the Company on February 14, 2020).
3.2		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Form 8-A (File No. 001-38864) filed by the Company on February 14, 2020)
3.3		Certificate of Designation for 10% Series A Cumulative Perpetual Preferred Stock of Alta Equipment Group Inc. (incorporated by reference to Exhibit 3.3 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on December 22, 2020)
4.1		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Form 8-A (File No. 001- 38864) filed by the Company on February 14, 2020).
4.2		Specimen Warrant Certificate (incorporated by reference to Exhibit 4.2 of the Form 8-A (File No. 001-38864) filed by the Company on February 14, 2020).
4.3		Warrant Agreement, dated April 8, 2019, between the B. Riley Principal Merger Corp. and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on April 11, 2019).


4.4		Deposit Agreement, dated December 22, 2020, among Alta Equipment Group Inc., Continental Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts, with respect to Alta Equipment Group’s 10% Series A Cumulative Perpetual Preferred Stock (incorporated by reference to Exhibit 4.4 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on December 22, 2020).
4.5		Form of Specimen Certificate representing the 10% Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share, of Alta Equipment Group Inc. (incorporated by reference to Exhibit 4.5 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on December 22, 2020).
4.6		Form of Depositary Receipt (included as Exhibit A to Exhibit 4.4) (incorporated by reference to Exhibit 4.6 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on December 22, 2020).
4.7		Indenture, dated April 1, 2021, among the Company, the Guarantors listed therein and Wilmington Trust, National Association, as trustee and as collateral agent (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on April 5, 2021).
4.8		Form of 5.625% Senior Secured Second Lien Notes due 2026 (incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on April 5, 2021). Form of 5.625% Senior Secured Second Lien Notes due 2026 (incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on April 5, 2021).
4.9		Registration Rights Agreement, dated April 8, 2019, by and among the Company, B. Riley Principal Sponsor Co., LLC and the Company’s independent directors (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on April 11, 2019).
4.10		Registration Rights Agreement, dated February 14, 2020, by and among the Company and Ryan Greenawalt, Robert Chiles, Anthony Colucci, Craig Brubaker, Alan Hammersley, Richard Papalia, Paul Ivankovics and Jeremy Cionca (incorporated by reference to Exhibit 10.2 of the Form 8-A (File No. 001- 38864) filed by the Company on February 14, 2020).
10.1		Sixth Amended and Restated ABL First Lien Credit Agreement, dated April 1, 2021 among Alta Equipment Group Inc., Alta Equipment Holdings, Inc., Alta Enterprises, LLC, Alta Construction Equipment Illinois, LLC, Alta Heavy Equipment Services, LLC, Alta Industrial Equipment Michigan, LLC, Alta Construction Equipment, L.L.C., Alta Industrial Equipment Company, L.L.C., NITCO, LLC, Alta Construction Equipment Florida, LLC, Alta Industrial Equipment New York, LLC, Alta Construction Equipment New York and PEAKLOGIX, LLC the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on June 30, 2023).
10.2		Sixth Amended and Restated Floor Plan First Lien Credit Agreement, dated February 3, 2020, among Alta Equipment Group Inc., Alta Equipment Holdings, Inc., Alta Enterprises, LLC, Alta Construction Equipment Illinois, LLC, Alta Heavy Equipment Services, LLC, Alta Industrial Equipment Michigan, LLC, Alta Construction Equipment, L.L.C., Alta Industrial Equipment Company, L.L.C., NITCO, LLC, Alta Construction Equipment Florida, LLC, Alta Industrial Equipment New York, LLC, Alta Construction Equipment New York and PEAKLOGIX, LLC the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on June 30, 2023).
10.3		Intercreditor Agreement, dated April 1, 2021, between JPMORGAN CHASE BANK, N.A., as Administrative Agent for the ABL First Lien Secured Parties, WILMINGTON TRUST, NATIONAL ASSOCIATION, as collateral agent for the Second Lien Secured Parties, and acknowledged by Alta Equipment Group Inc., Alta Equipment Holdings, Inc., Alta Enterprises, LLC, Alta Construction Equipment Illinois, LLC, Alta Heavy Equipment Services, LLC, Alta Industrial Equipment Michigan, LLC, Alta Construction Equipment, L.L.C., Alta Industrial Equipment Company, L.L.C., NITCO, LLC, Alta Construction Equipment Florida, LLC, Alta Industrial Equipment New York, LLC, Alta Construction Equipment New York, LLC and PEAKLOGIX, LLC (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on April 11, 2019).
10.4		Letter Agreement, dated April 8, 2019, by and among the Company, its officers, its directors and B. Riley Principal Sponsor Co., LLC (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on April 11, 2019).
10.5		Forward Purchase Agreement, dated April 8, 2019, by and between the Company and B. Riley Principal Investments, LLC (incorporated by reference to Exhibit 10.5 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on April 11, 2019).
10.6		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.6 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on February 14, 2020).
10.7		Amendment to Subscription Agreement, dated February 12, 2020, by and between the Company and B. Riley Principal Investments, LLC (incorporated by reference to Exhibit 10.7 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on February 14, 2020).
10.8		Alta Equipment Group Inc. 2020 Omnibus Incentive Plan (incorporated by reference to Annex C to the Definitive Proxy Statement filed by the Company on January 23, 2020).


10.9		Registration Side Letter — Howell Share Consideration (incorporated by reference to Exhibit 10.12 of the Registration Statement on Form S-1 (File No. 001-38864) filed by the Company on October 26, 2020).
10.10		Underwriting Agreement, dated December 17, 2020, by and among Alta Equipment Group Inc. and B. Riley FBR, Inc., as representative of the several underwriters named therein (incorporated by reference to Exhibit 1.1 of the Current Report on Form 8-K (File No. 001-38864) filed by the Company on December 22, 2020).
10.11		Form of Restricted Stock Unit Agreement (Employee) (incorporated by reference to Exhibit 10.11 on Form 10-Q (File No. 001-38864) filed by the Company on August 9, 2022)
10.12		Form of Restricted Stock Unit Agreement (Non-Employee Director) (incorporated by reference to Exhibit 10.11 on Form 10-Q (File No. 001-38864) filed by the Company on August 9, 2022)
10.13		Form of Performance Stock Unit Agreement (incorporated by reference to Exhibit 10.11 on Form 10-Q (File No. 001-38864) filed by the Company on August 9, 2022)
13.1		December 31, 2022 Annual Report to Security Holders on Form 10-K (incorporated by reference to 10-K (File No. 001-38864) filed by the Company on March 9, 2023).
31.1*		Certification of ~~Chief~~Principal Executive Officer ~~pursuant~~Pursuant to Rules ~~13a-14~~13a-14(a) and ~~15d-14 promulgated~~15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
31.2*		Certification of ~~Chief~~Principal Financial Officer ~~pursuant~~Pursuant to Rules ~~13a-14~~13a-14(a) and ~~15d-14 promulgated~~15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
32.1**		Certification of ~~Chief~~Principal Executive Officer ~~pursuant~~Pursuant to 18 U.S.C. Section 1350, as ~~adopted pursuant~~Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
32.2*
32.2**		Certification of ~~Chief~~Principal Financial Officer ~~pursuant~~Pursuant to 18 U.S.C. Section 1350, as ~~adopted pursuant~~Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
101.INS
101.INS*		Inline XBRL Instance Document
101.SCH
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

~~Filed herewith~~

~~Furnished herewith~~

~~SIGNATURES~~

*Filed herewith.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	~~B. Riley Principal Merger Corp.~~
		ALTA EQUIPMENT GROUP INC.
~~Date: May 21, 2019~~	~~By:~~	~~/s/ DANIEL SHRIBMAN~~
Date: November 8, 2023		~~Name: Daniel Shribman~~ By:	/s/ Anthony J. Colucci
		~~Title:~~	Anthony J. Colucci
			Chief Financial Officer
		~~(Principal~~ (Principal Financial Officer)

~~(Mark One)~~
☒	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~
~~For the quarterly period ended March 31, 2019~~
Or
☐	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~
~~For the transition period from to~~

~~Delaware~~	~~83-2583782~~
Delaware	001-38864	83-2583782
(State or ~~Other Jurisdiction~~ other jurisdiction of ~~Incorporation or Organization)~~ incorporation)	(~~I.R.S.~~Commission File Number)	(IRS Employer Identification No.)

~~299 Park Avenue, 21~~^st ~~Floor~~ ~~New York, New York~~	~~10171~~
~~(Address of Principal Executive Offices)~~	~~(Zip Code)~~




Large accelerated filer ☐	☐		Accelerated filer	☒	Non-accelerated filer	☐
~~Non-accelerated filer ☒~~	Smaller reporting company ☒
☐	Emerging growth company ☒	☐


Title of each class		Trading ~~Symbols(s)~~Symbol(s)		Name of each exchange on which registered
Common stock, $0.0001 par value per share	~~Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant~~	~~BRPM.U~~ ALTG		The New York Stock Exchange
	~~Class~~ Depositary Shares representing a 1/1000th fractional interest in a share of 10% Series A ~~common stock,~~Cumulative Perpetual Preferred Stock, $0.0001 par value ~~$0.0001~~ per share	~~BRPM~~	ALTG PRA		The New York Stock Exchange

		~~Page~~
				PART I – FINANCIAL INFORMATION
~~PART I. FINANCIAL INFORMATION~~ Item 1.	Condensed Consolidated Interim Financial Statements (Unaudited)		3
	Condensed Consolidated Balance Sheets (Unaudited)		3
~~Item 1.~~	~~Financial Statements~~		3

	Condensed ~~Balance Sheets as of March 31, 2019 and December 31, 2018~~	3

	~~Condensed~~Consolidated Statements of Operations ~~for the three months ended March 31, 2019 and 2018~~(Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)		5
	Condensed Consolidated Statements of ~~Changes in Stockholder’s Deficit for the three months ended March 31, 2019 and 2018~~Stockholders' Equity (Unaudited)		5 6

	Condensed Consolidated Statements of Cash Flows ~~for the three months ended March 31, 2019 and 2018~~(Unaudited)	6 8

	Notes to Unaudited Condensed Consolidated Financial Statements	7 9
	Note 1.	Organization and Nature of Operations	9
	Note 2.	Summary of Significant Accounting Policies	9
	Note 3.	Revenue Recognition	9
	Note 4.	Related Party Transactions	12
	Note 5.	Inventories	12
	Note 6.	Property and Equipment	13
	Note 7.	Goodwill	13
	Note 8.	Other Intangible Assets	14
	Note 9.	Floor Plans	14
	Note 10.	Long-Term Debt	15
	Note 11.	Equity	16
	Note 12.	Leases	16
	Note 13.	Contingencies	17
	Note 14.	Income Taxes	18
	Note 15.	Stock-Based Compensation	18
	Note 16.	Fair Value of Financial Instruments	19
	Note 17.	Business Combinations	21
	Note 18.	Segments	22
	Note 19.	Earnings Per Share	24
	Note 20.	Subsequent Events	24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14 25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		16 39

Item 4.	Controls and Procedures		16 39
				PART II
~~PART II. OTHER INFORMATION~~ Item 1.	Legal Proceedings		41
Item 1A.	Risk Factors		41
~~Item 1.~~	~~Legal Proceedings~~	18

~~Item 1A.~~	~~Risk Factors~~	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		18 41

Item 3.	Defaults Upon Senior Securities		18 41

Item 4.	Mine Safety Disclosures		19 41
Item 5.	Other Information		41
Item 5.6.	~~Other Information~~Exhibits		19 41
Signature
~~Item 6.~~	~~Exhibits~~	19

	~~Signatures~~	20 44


	~~Warrants, each exercisable for one share of Class A common stock~~		~~BRPM.WS~~	~~New York Stock Exchange~~


	September 30, 2023			December 31, 2022
ASSETS
Cash	$	1.4		$	2.7
Accounts receivable, net of allowances of $14.3 and $13.0 as of September 30, 2023 and December 31, 2022, respectively		259.1			232.8
Inventories, net		492.8			399.7
Prepaid expenses and other current assets		31.0			28.1
Total current assets		784.3			663.3

NON-CURRENT ASSETS
Property and equipment, net		447.6			377.8
Operating lease right-of-use assets, net		106.1			113.6
Goodwill		71.1			69.2
Other intangible assets, net		54.3			60.7
Other assets		17.0			6.0
TOTAL ASSETS	$	1,480.4		$	1,290.6

LIABILITIES AND STOCKHOLDERS’ EQUITY
Floor plan payable – new equipment	$	280.6		$	211.5
Floor plan payable – used and rental equipment		83.9			45.3
Current portion of long-term debt		6.6			4.2
Accounts payable		89.6			90.8
Customer deposits		14.9			27.9
Accrued expenses		53.4			55.1
Current operating lease liabilities		15.4			14.8
Current deferred revenue		14.5			14.1
Other current liabilities		10.9			7.5
Total current liabilities		569.8			471.2

NON-CURRENT LIABILITIES
Line of credit, net		303.5			217.5
Long-term debt, net of current portion		312.0			311.2
Finance lease obligations, net of current portion		26.2			15.4
Deferred revenue, net of current portion		4.4			4.9
Guaranteed purchase obligations, net of current portion		2.9			4.7
Long-term operating lease liabilities, net of current portion		95.0			101.9
Deferred tax liability		7.7			6.4
Other liabilities		11.4			17.6
TOTAL LIABILITIES		1,332.9			1,150.8
CONTINGENCIES - NOTE 13
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value per share, 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 both September 30, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value per share, 200,000,000 shares authorized; 32,368,112 and 32,194,243 issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		226.5			222.8
Treasury stock at cost, 862,182 shares of common stock held at both September 30, 2023 and December 31, 2022		(5.9	)		(5.9	)
Accumulated deficit		(71.8	)		(74.2	)
Accumulated other comprehensive loss		(1.3	)		(2.9	)
TOTAL STOCKHOLDERS’ EQUITY		147.5			139.8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,480.4		$	1,290.6

	March 31,			December 31,
	2019			2018
	(Unaudited)
Assets
Current assets:
Cash	$	31,665		$	49,658
Total current assets		31,665			49,658
Deferred offering costs		372,422			162,500
Total assets	$	404,087		$	212,158

Liabilities and Stockholder’s Deficit
Current liabilities
Accounts payable	$	337,500		$	162,500
Payable to related party		8,279			8,279
Note payable - related party		67,950			50,000
Total liabilities		413,729			220,779

Stockholder’s deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Class A Common stock, $0.0001 par value; 100,000,000 shares authorized; none issued and outstanding		—			—
Class B Common stock, $0.0001 par value; 25,000,000 shares authorized; 3,593,750 issued and outstanding at March 31, 2019 and December 31, 2018		359			359
Additional paid-in capital		—			—
Accumulated deficit		(10,001	)		(8,980	)
Total stockholder’s deficit		(9,642	)		(8,621	)
Total liabilities and stockholder’s deficit	$	404,087		$	212,158

	Three Months Ended
	March 31,
	2019			2018
Selling, general and administrative expenses	$	1,021		$	—
Loss before income taxes		(1,021	)		—
Provision for income taxes		—			800
Net loss	$	(1,021	)	$	(800	)

Basic and diluted loss per share	$	(0.00	)	$	(0.00	)

Weighted average basic and diluted shares outstanding		3,125,000			3,125,000

					Additional					Total
	Class B Common Stock				Paid-in		Accumulated			Stockholder’s
	Shares		Amount		Capital		Deficit			Deficit
Balance, January 1, 2018		3,593,750	$	359	$	—	$	(7,838	)	$	(6,679	)
Net loss for the three months ended March 31, 2018		—		—		—		(800	)		(800	)
Balance, March 31, 2018		3,593,750	$	359	$	—	$	(8,638	)	$	(8,279	)

Balance, January 1, 2019		3,593,750	$	359	$	—	$	(8,980	)	$	(8,621	)
Net loss for the three months ended March 31, 2019		—		—		—		(1,021	)		(1,021	)
Balance, March 31, 2019		3,593,750	$	359	$	—	$	(10,001	)	$	(9,642	)


	Three and Nine Months Ended September 30, 2023
	Preferred Stock				Common Stock
	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity (Deficit)
Balance at December 31, 2022		1,200,000	$	—		32,194,243	$	—	$	222.8	$	(74.2	)	$	(5.9	)	$	(2.9	)	$	139.8
Net income		—		—		—		—		—		1.0			—			—			1.0
Dividends on preferred stock, $0.625 per share		—		—		—		—		—		(0.8	)		—			—			(0.8	)
Dividends on common stock and dividend equivalent on stock-based compensation, $0.057 per share		—		—		—		—		—		(1.9	)		—			—			(1.9	)
Impact of adoption of new accounting standard (Note 2)		—		—		—		—		—		(0.5	)		—			—			(0.5	)
Stock-based compensation		—		—		173,869		—		0.8		—			—			—			0.8
Foreign currency translation adjustments		—		—		—		—		—		—			—			0.1			0.1
Change in fair value of derivative, net of tax		—		—		—		—		—		—			—			(0.4	)		(0.4	)
Balance at March 31, 2023		1,200,000	$	—		32,368,112	$	—	$	223.6	$	(76.4	)	$	(5.9	)	$	(3.2	)	$	138.1
Net income		—		—		—		—		—		2.4			—			—			2.4
Dividends on preferred stock, $0.625 per share		—		—		—		—		—		(0.7	)		—			—			(0.7	)
Dividends on common stock and dividend equivalent on stock-based compensation, $0.057 per share		—		—		—		—		—		(1.8	)		—			—			(1.8	)
Stock-based compensation		—		—		—		—		1.1		—			—			—			1.1
Foreign currency translation adjustments		—		—		—		—		—		—			—			0.7			0.7
Change in fair value of derivative, net of tax		—		—		—		—		—		—			—			1.6			1.6
Balance at June 30, 2023		1,200,000	$	—		32,368,112	$	—	$	224.7	$	(76.5	)	$	(5.9	)	$	(0.9	)	$	141.4
Net income		—		—		—		—		—		7.4			—			—			7.4
Dividends on preferred stock, $0.625 per share		—		—		—		—		—		(0.7	)		—			—			(0.7	)
Dividends on common stock and dividend equivalent on stock-based compensation, $0.057 per share		—		—		—		—		—		(2.0	)		—			—			(2.0	)
Stock-based compensation		—		—		—		—		1.4		—			—			—			1.4
Foreign currency translation adjustments		—		—		—		—		—		—			—			(0.7	)		(0.7	)
Change in fair value of derivative, net of tax		—		—		—		—		—		—			—			0.3			0.3
Proceeds from stockholder short-swing profits		—		—		—		—		0.4		—			—			—			0.4
Balance at September 30, 2023		1,200,000	$	—		32,368,112	$	—	$	226.5	$	(71.8	)	$	(5.9	)	$	(1.3	)	$	147.5


	Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
	Topic 842		Topic 606		Total		Topic 842		Topic 606		Total
Revenues:
New and used equipment sales	$	—	$	253.6	$	253.6	$	—	$	210.1	$	210.1
Parts sales		—		69.5		69.5		—		61.8		61.8
Service revenues		—		60.6		60.6		—		54.3		54.3
Rental revenues		54.0		—		54.0		50.2		—		50.2
Rental equipment sales		—		28.5		28.5		—		28.6		28.6
Total revenues	$	54.0	$	412.2	$	466.2	$	50.2	$	354.8	$	405.0


	September 30, 2023
	Weighted Average Remaining Life (in years)		Gross carrying amount		Accumulated amortization			Net carrying amount
Customer and supplier relationships		7.6	$	63.0	$	(15.0	)	$	48.0
Other intangibles		3.5		10.7		(4.4	)		6.3
Total		7.0	$	73.7	$	(19.4	)	$	54.3

	December 31, 2022
	Weighted Average Remaining Life (in years)		Gross carrying amount		Accumulated amortization			Net carrying amount
Customer and supplier relationships		8.3	$	63.0	$	(10.1	)	$	52.9
Other intangibles		4.2		10.7		(2.9	)		7.8
Total		7.7	$	73.7	$	(13.0	)	$	60.7


	Restricted Stock Units					Performance Stock Units
	Number of units			Weighted average grant date fair value		Number of units			Weighted average grant date fair value
Unvested units as of December 31, 2022		288,266		$	10.24		424,538		$	12.14
Granted		96,376			15.65		207,292			15.85
Vested - issued		(120,079	)		9.95		(53,790	)		12.14
Vested - unissued		(27,175	)		12.18		—			—
Forfeited		—			—		(6,917	)		13.71
Unvested units as of September 30, 2023		237,388		$	12.36		571,123		$	13.49


	September 30, 2023		December 31, 2022
Estimated aggregate fair value	$	626.3	$	521.0
Aggregate carrying value (1)		653.1		554.1


Maturity Date of Derivatives	Currency / Unit of Measure	Notional Value
Interest rate cap (December 2025)	One-month SOFR	$	200.0
Fuel swaps (various through June 2025)	Gallons		2.9


	Level 3
Balance Sheet Location	September 30, 2023		December 31, 2022
Other current liabilities	$	5.3	$	1.8
Other liabilities		4.2		8.0


	Contingent Consideration
Balance, December 31, 2022	$	9.8
Acquisitions		—
Changes in fair value		0.9
Payments		(1.2	)
Balance, September 30, 2023	$	9.5


	Asset Derivatives					Liability Derivatives
Derivatives designated as hedges	Balance Sheet location	September 30, 2023		December 31, 2022		Balance Sheet location	September 30, 2023		December 31, 2022
Interest rate cap - current	Prepaid expenses and other current assets	$	—	$	—	Other current liabilities	$	1.6	$	1.6
Interest rate cap - long-term	Other assets		3.8		3.5	Other liabilities		2.1		3.4
Derivatives not designated as hedge
Foreign currency forwards	Prepaid expenses and other current assets		—		—	Other current liabilities		—		0.2
Fuel swaps - current	Prepaid expenses and other current assets		0.3		—	Other liabilities		—		—
Fuel swaps - long-term	Other assets		0.1		—	Other liabilities		—		—