(in millions, except share and per share amounts)	September 30, 2020			December 31, 2019
ASSETS
CURRENT ASSETS
Cash	$	0.1		$	—
Accounts receivable, net of allowances of $6.2 and $4.4 as of September 30, 2020 and December 31, 2019, respectively		122.8			101.2
Inventories, net		221.1			137.2
Prepaid expenses and other current assets		13.2			5.7
Total current assets		357.2			244.1

PROPERTY AND EQUIPMENT, NET		293.7			196.5
OTHER ASSETS
Goodwill		22.8			8.6
Intangible assets, net		24.2			3.0
Other assets		1.9			2.0
Total other assets		48.9			13.6
TOTAL ASSETS	$	699.8		$	454.2

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Lines of credit, net	$	139.0		$	72.5
Floor plan payable – new equipment		118.6			87.7
Floor plan payable – used and rental equipment		36.3			112.5
Current portion of long-term debt		7.8			7.1
Accounts payable		62.8			31.1
Customer deposits		6.8			7.2
Accrued expenses		26.8			16.0
Other current liabilities		13.3			9.3
Total current liabilities		411.4			343.4

LONG-TERM LIABILITIES
Long-term debt, net of current portion		136.4			86.5
Capital lease obligations, net of current portion		0.8			1.4
Buyback residual obligations, net of current portion		0.8			0.7
Guaranteed purchase obligation, net of current portion		7.4			9.0
Lease liability, net of current portion		2.7			3.7
Deferred tax liability		15.6			—
Other liabilities		10.0			3.1
Warrant liability		—			29.6
TOTAL LIABILITIES	$	585.1		$	477.4
CONTINGENCIES - NOTE 11
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value, 1,000,000 authorized and no shares outstanding at September 30, 2020	$	—		$	—
Common stock, $0.0001 par value, 29,511,359 and 7,300,000 shares issued and outstanding at September 30, 2020 and December 31, 2019		—			—
Additional paid-in capital		183.6			—
Treasury stock		(5.9	)		—
Retained deficit		(63.0	)		(23.2	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		114.7			(23.2	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	699.8		$	454.2

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

~~B. RILEYPRINCIPAL MERGER CORP.~~ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions, except share and per share amounts)	2020			2019			2020			2019
Revenues:
New and used equipment sales	$	97.9		$	61.1		$	275.2		$	167.1
Parts sales		35.5			22.9			92.3			60.0
Service revenue		35.5			27.3			94.1			67.2
Rental revenue		32.2			27.8			83.4			66.9
Rental equipment sales		19.5			10.7			48.2			26.8
Net revenue	$	220.6		$	149.8		$	593.2		$	388.0

Cost of revenues:
New and used equipment sales		84.4			53.4			240.3			146.6
Parts sales		24.3			14.9			63.3			39.4
Service revenue		13.5			10.0			35.9			24.3
Rental revenue		5.4			4.3			14.8			11.4
Rental depreciation		19.2			13.7			47.1			32.9
Rental equipment sales		17.1			9.3			41.7			23.1
Cost of revenue	$	163.9		$	105.6		$	443.1		$	277.7

Gross profit	$	56.7		$	44.2		$	150.1		$	110.3

General and administrative expenses		58.4			37.5			153.2			95.6
Depreciation and amortization expense		1.8			0.5			4.5			1.8
Total general and administrative expenses		60.2			38.0			157.7			97.4

(Loss) income from operations	$	(3.5	)	$	6.2		$	(7.6	)	$	12.9

Other income (expense)
Interest expense, floor plan payable – new equipment		(0.5	)		(0.9	)		(1.8	)		(2.4	)
Interest expense – other		(5.6	)		(4.7	)		(15.9	)		(12.7	)
Other income		8.0			0.3			8.7			0.9
Change in fair market of warrants		—			(28.3	)		—			(28.3	)
Loss on extinguishment of debt		—			—			(7.6	)		—
Total other income (expense)	$	1.9		$	(33.6	)	$	(16.6	)	$	(42.5	)

Loss before taxes	$	(1.6	)	$	(27.4	)	$	(24.2	)	$	(29.6	)

Income tax benefit		(1.9	)		—			(3.4	)		—

Net income (loss)	$	0.3		$	(27.4	)	$	(20.8	)	$	(29.6	)

Basic and diluted income (loss) per share	$	0.01		$	(3.74	)	$	(0.81	)	$	(4.05	)

Basic and diluted weighted average common shares outstanding		29,221,460			7,300,000			25,689,145			7,300,000

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

~~B. RILEYPRINCIPAL MERGER CORP.~~ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

~~Condensed Statements of Changes in Stockholder’s Deficit~~CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIT)

	Three Months Ended September 30, 2020
	Common Stock
(amounts in millions, except share amounts)	Number of Shares			Amount		Additional Paid-in Capital		Retained (Deficit)			Treasury Stock			Total Stockholder’s Equity (Deficit)
Balance at June 30, 2020		29,511,359		$	—	$	180.4	$	(63.3	)	$	(2.9	)	$	114.2
Net loss		—			—		—		0.3			—			0.3
Disgorgement of short swing profits		—			—		—		—			—			—
Share based compensation		390,000			—		3.2		—			—			3.2
Repurchases of common stock		(390,000	)		—		—		—			(3.0	)		(3.0	)
Balance at September 30, 2020		29,511,359		$	—	$	183.6	$	(63.0	)	$	(5.9	)	$	114.7

	Three Months Ended September 30, 2019
	Common Stock
(amounts in millions, except share amounts)	Number of Shares			Amount		Additional Paid-in Capital		Retained Earnings			Treasury Stock			Total Stockholder’s Equity (Deficit)
Balance at June 30, 2019		7,300,000		$	—	$	—	$	10.0		$	—		$	10.0
Net income		—			—		—		(27.4	)		—			(27.4	)
Balance at September 30, 2019		7,300,000		$	—	$	—	$	(17.4	)	$	—		$	(17.4	)

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

	Nine Months Ended September 30, 2020
	Common Stock
(amounts in millions, except share amounts)	Number of Shares			Amount		Additional Paid-in Capital		Retained (Deficit)			Treasury Stock			Total Stockholder’s Equity (Deficit)
Balance at December 31, 2019		7,300,000		$	—	$	—	$	(23.2	)	$	—		$	(23.2	)
Net loss		—			—		—		(20.8	)		—			(20.8	)
Opening deferred tax liabilities under reverse recapitalization		—			—		—		(19.0	)		—			(19.0	)
Equity infusion from reverse recapitalization, net of transaction costs		21,911,359			—		175.7		—			—			175.7
Shares issued upon settlement of equity-linked incentive plan		300,000			—		3.1		—			—			3.1
Disgorgement of short swing profits		—			—		1.6		—			—			1.6
Share based compensation		390,000			—		3.2		—			—			3.2
Repurchases of common stock		(390,000	)		—		—		—			(5.9	)		(5.9	)
Balance at September 30, 2020		29,511,359		$	—	$	183.6	$	(63.0	)	$	(5.9	)	$	114.7

	Nine Months Ended September 30, 2019
	Common Stock
(amounts in millions, except share amounts)	Number of Shares			Amount		Additional Paid-in Capital		Retained Earnings (Deficit)			Treasury Stock			Total Stockholder’s Equity (Deficit)
Balance at December 31, 2018		7,300,000		$	—	$	—	$	12.2		$	—		$	12.2
Net loss		—			—		—		(29.6	)		—			(29.6	)
Balance at September 30, 2019		7,300,000		$	—	$	—	$	(17.4	)	$	—		$	(17.4	)

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

~~B. RILEYPRINCIPAL MERGER CORP.~~ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

	Nine Months Ended September 30,
(amounts in millions)	2020			2019
OPERATING ACTIVITIES
Net loss	$	(20.8	)	$	(29.6	)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation and amortization		51.6			34.9
Amortization of debt discount and debt issuance costs		1.2			0.8
Inventory obsolescence		1.3			0.6
Gain on sale of rental equipment		(6.5	)		(3.7	)
Provision for bad debt		2.8			1.3
Loss on debt extinguishment		7.6			—
(Repayment) accrual of paid-in-kind interest		(11.2	)		4.7
Change in fair value of warrants		—			28.3
Share-based payment		6.3			—
Changes in deferred taxes		(3.4	)		—
Changes in:
Accounts receivable		6.2			(14.2	)
Inventories		(102.8	)		(53.2	)
Proceeds from sale of rental equipment		48.2			26.8
Prepaid expenses and other assets		(5.5	)		(1.3	)
Proceeds from floor plans with manufacturers		240.5			183.1
Payments under floor plans with manufacturers		(273.1	)		(188.4	)
Accounts payable, accrued expenses, customer deposits, and other current liabilities		16.0			5.1
Leases and other liabilities		(3.1	)		0.8
Net cash used in operating activities	$	(44.7	)	$	(4.0	)

INVESTING ACTIVITIES
Proceeds from the sale of assets		1.0			—
Expenditures for rental equipment		(34.5	)		(18.0	)
Expenditures for property and equipment		(4.0	)		(2.1	)
Expenditures for acquisitions, net of cash acquired		(128.8	)		(65.6	)
Net activity on notes and land contract receivable		—			0.1
Net cash used in investing activities	$	(166.3	)	$	(85.6	)

FINANCING ACTIVITIES
Expenditures for debt issuance costs		(2.7	)		(0.1	)
Extinguishment of floor plans and line of credit		(132.9	)		—
Extinguishment of long-term debt		(82.0	)		—
Redemption of former shareholder notes payable		(6.7	)		—
Extinguishment of warrant liability		(29.6	)		—
Proceeds from lines of credit		334.5			137.4
Payments under lines of credit		(187.1	)		(88.0	)
Proceeds from floor plans with unaffiliated source		63.5			81.4
Payments under floor plans with unaffiliated source		(61.3	)		(50.7	)
Proceeds from issuance of long-term debt, net		149.4			20.0
Payments on long-term debt		(4.8	)		(9.1	)
Payments on capital lease obligations		(0.6	)		(0.7	)
Equity proceeds from reverse recapitalization, net		175.7			—
Proceeds from disgorgement of short swing profits		1.6			—
Repurchases of common stock		(5.9	)		—
Net cash provided by financing activities	$	211.1		$	90.2

NET CHANGE IN CASH		0.1			0.6

Cash, Beginning of year		—			1.5
Cash, End of period	$	0.1		$	2.1

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	26.0		$	9.7

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

NOTE 1—1 — ORGANIZATION ~~AND~~AND NATURE OF ~~BUSINESS OPERATIONS~~OPERATIONS

Alta Equipment Group, Inc. (formerly known as B. Riley Principal Merger Corp. ~~(the~~) (individually or as sometimes collectively together with its direct and indirect subsidiaries referred to herein as the “Company”), was incorporated in Delaware on October 30, 2018 as a blank check ~~corporation, was incorporated as a Delaware corporation on October 30, 2018. The Company is an emerging growth~~ company as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by 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~~share exchange, asset acquisition, ~~stock~~share purchase, recapitalization, reorganization or other similar business combination with one or more businesses ~~(an “Initial Business Combination”).~~

~~At March 31, 2019,~~or entities. On February 14, 2020, the Company ~~had not commenced any operations. All activity~~consummated a reverse recapitalization pursuant to which the Company acquired Alta Equipment Holdings, Inc. pursuant to an agreement and plan of merger between the Company, BR Canyon Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of the Company ~~includes~~(“Merger Sub”), Alta Equipment Holdings, Inc. and Ryan Greenawalt. This business merger will be referred to as “reverse recapitalization” throughout this document.

In connection with the ~~activity~~reverse recapitalization, Merger Sub merged with and into Alta Equipment Holdings, Inc., with Alta Equipment Holdings, Inc. surviving the reverse recapitalization as a direct, wholly owned subsidiary of ~~GA International as if GA International, which was owned by~~ the Company, and the Company changed its name from ~~inception and activity related~~B. Riley Principal Merger Corp. 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~~and Alta Equipment Holdings, Inc. are the ~~sale of 12,500,000 Units at an offering price of $10.00 per unit through~~holding companies for Alta Enterprises, LLC. Alta Enterprises, LLC is the ~~Public Offering. B. Riley Principal Sponsor Co.,~~holding company for Alta Industrial Equipment Michigan; LLC; Alta Industrial Equipment Company, LLC; Alta Industrial Equipment New York, LLC; Alta Construction Equipment, LLC; Alta Construction Equipment Illinois, LLC; Alta Heavy Equipment Services, LLC; NITCO, LLC; Alta Construction Equipment Florida, 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~~is engaged in the ~~Trust Account to be invested only in U.S. government treasury bills with a maturity~~retail sale, service, and rental of ~~180 days or less or in money market funds registered under the Investment Company Act~~lift trucks 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~~construction equipment in the ~~Trust Account that may be released to~~states of Michigan, Illinois, Indiana, Virginia and Florida as well as 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, 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~~Northeastern part of the ~~consideration~~United States.

Unless the context otherwise requires, the use of the terms “the Company”, “we,” “us,” and “our” in these notes to the ~~sellers in the Initial Business Combination,~~unaudited consolidated financial statements refers 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 stockholdersAlta Equipment Group Inc. 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.its consolidated subsidiaries.

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 accompanying unaudited interim consolidated financial statements include the consolidated accounts of the Company ~~are presented~~and have been prepared in ~~conformity~~accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

~~The Company’s unaudited condensed interim financial statements~~ All significant intercompany transactions and balances have been ~~prepared~~eliminated in ~~accordance with U.S. GAAP and~~ the ~~rules and regulations~~preparation of the ~~SEC for~~consolidated financial statements. Certain amounts in the prior year have been reclassified to conform with the presentation in the current year.

The interim financial information ~~and the instructions to Form 10-Q. Accordingly, the financial statements do not include~~is unaudited, but reflects all ~~of the information and footnotes required by U.S. GAAP. In~~normal recurring adjustments that are, in the opinion of management, ~~all adjustments considered for a fair presentation have been included.~~necessary to fairly present the information set forth herein. Operating results for the ~~three~~nine months ended ~~March 31, 2019 are~~September 30, 2020 is not necessarily indicative of the results that may be expected for the year ending December 31, ~~2019 or any other period. The accompanying unaudited condensed~~2020, and therefore, the results and trends in these interim consolidated financial statements may not be the same for the entire year. These interim consolidated financial statements should be read in conjunction with the ~~Company’s~~annual audited consolidated financial statements and related notes ~~thereto included~~in our Registration Statement on Form S-1, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 25, 2020 (the “Registration Statement”), from which the consolidated balance sheet amounts as of December 31, 2019 were derived.

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

On March 11, 2020, the World Health Organization characterized the outbreak of COVID-19 as a global pandemic and recommended containment and mitigation measures. Subsequent to this characterization international, federal, state, and local public health and governmental authorities have taken extraordinary measures to contain and combat the outbreak and spread of COVID-19. These actions include travel restrictions, local quarantines, “stay-at-home” orders, and similar mandates for many individuals to substantially restrict daily activities and for many businesses to drastically reduce or cease customary operations.

The Company’s response to the global COVID-19 pandemic has been measured, swift and determined with an emphasis on health and safety, operating costs and liquidity. Consistent with the ~~SEC on April 9, 2019, as well~~actions taken by governmental authorities, virtually all of our sales and back office operations employees began working remotely in mid-March in order to reduce the spread of COVID-19. Broadly, as the ~~Company’s audited balance sheet statement~~Company was deemed “essential” by state and ~~notes thereto included~~local governments, our facilities were able to remain open, albeit at reduced capacity since the beginning of the second quarter. As of September 30, 2020, all of our branches are fully operational although some of our administrative employees continued to work remotely.

Despite the Company remaining operational since the second quarter of 2020, certain segments of our customer base were negatively impacted by COVID-19 and, as such, our revenues were negatively impacted as well. To mitigate the impact of reduced revenues, the Company implemented various cost savings measures in the ~~Company’s Form 8-K filed with~~second quarter of 2020. As business conditions and customer demand returned to more normalized levels, many of these cost savings measures and furlough programs were removed and eliminated in the ~~SEC on April 17, 2019.~~third quarter. While our sales and service-related operations are performing near pre-COVID levels, our rental fleet utilization has lagged pre-COVID performance. The Company will continue to monitor utilization and, in-turn, rationalize rental fleet levels to match expected demand in the fourth quarter of 2020 and beyond.

~~Section 102(b)(1)~~COVID-19’s impact on our last quarter of 2020 financial results and beyond will depend on future developments, such as the duration and scope of the ~~JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those~~outbreak and the potential for future “shelter in place” orders that could impact our employees, customers and suppliers. Although we have ~~not had~~seen improvements as 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 outresult of the ~~extended transition period~~easing of various restrictions, we expect our full year 2020 results to be adversely affected by COVID-19.

We believe we have sufficient liquidity to fund our operations as we work through the COVID-19 recovery. However, if there are future “shelter in place” orders or similar measures taken in the geographies that we operate in and ~~comply with~~ the ~~requirements that apply~~demand for our products and services is adversely impacted, we may take additional actions to ~~non-emerging growth~~further reduce costs and/or seek additional financing.

The COVID-19 outbreak has caused significant disruptions to national and global economies. Our businesses are designated as critical infrastructure companies ~~but any~~by the government and, as 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,have remained open. We have instituted various initiatives throughout the Company as ~~an emerging growth company, can adopt~~part of our business continuity programs, and we are working to mitigate risk when disruptions occur. While we continue to expect this situation to be temporary, and we believe we have successfully navigated the ~~new or revised standard at the time private companies adopt the new or revised standard.~~

second and third quarter of 2020, any longer-term impacts of COVID-19 (or a future pandemic of its nature) is currently difficult to predict with certainty.

The ~~Company complies with accounting and disclosure requirements~~nature 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 outstanding 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 and December 31, 2018, the Company did not have any dilutive securities and other contractsour business requires that could, potentially, be exercised or converted into common stock and then share 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.

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.

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.

~~The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to~~we make estimates and assumptions ~~that~~in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, ~~and~~as well as the reported amounts of ~~revenues~~revenue and expenses during the reporting period. ~~Actual results could differ from those estimates.~~

The COVID-19 outbreak has an impact on the approach to these estimates and assumptions and will continue to do so. Any increased severity of the COVID outbreak and the related future financial impacts cannot be estimated at this time.

The Company ~~complies~~assessed certain accounting matters that generally require consideration of forecasted financial information in context with the ~~requirements~~information reasonably available to the Company and the unknown future impacts COVID-19 as of September 30, 2020 and through the date of this report. The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts, inventory and related reserves and the carrying value of goodwill and other long-lived assets. While there was no material impact to the Company’s consolidated financial statements, as of and for the quarter ended September 30, 2020, the Company’s future assessment of the ~~FASB ASC 340-10-S99-1~~magnitude and ~~SEC Staff Accounting Bulletin Topic 5A — “Expenses~~duration of ~~Offering.” Deferred offering costs~~COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

The Company evaluates long-lived assets, such as property and ~~$162,500~~equipment and intangible assets subject to amortization, for impairment annually and whenever events or changes in circumstances indicate that the carrying value of any asset group may not be recoverable.

If the estimated future cash flow (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. When reviewing long-lived assets for impairment, the Company groups long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. After evaluating and weighing all relevant events and circumstances, the Company concluded that it was not necessary to perform an interim impairment test for the long-lived assets as of and for the period ended September 30, 2020.

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

The Company evaluates goodwill for impairment at least annually, or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component.

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

It should be noted that at March 31, ~~2019~~2020, the Company’s share price reduction as a result of the ongoing COVID-19 pandemic during the first quarter of 2020, was determined to be a triggering event for impairment testing under ASC 350. The Company performed an interim quantitative impairment analysis and the fair value of reporting units was determined based on valuation techniques using the best available information, primarily cash flow projections. At that time, we determined no goodwill impairment existed for the period.

The Company incurred costs directly attributable to its initial public offering, such as underwriter, registration and filing fees along with direct incremental legal, accounting, and professional fees relating to the Business Combination. The Company evaluated all the fees and approximately $2.6 million of expenses were recorded as an offset against proceeds of the reverse recapitalization. As of December 31, ~~2018, respectively, consist principally of costs incurred~~2019, there were $0.7 million deferred as prepaid expenses and other current assets in ~~connection with preparation for the Public Offering.~~our accompanying Consolidated Balance Sheets. These ~~costs, together with the underwriter discount, will be charged to capital upon~~were deferred until completion of the ~~Public Offering in April 2019.~~reverse recapitalization, at which time $0.4 million were reclassified to additional paid-in capital as a reduction of the proceeds. Recurring and other incremental organizational costs including accounting and legal fees that were not directly attributable to the offering were expensed as incurred.

The Company is ~~included~~a newly formed corporation for the income tax purposes. Alta Enterprises, LLC was historically and remains a partnership for federal income tax purposes, with each partner being separately taxed on its share of taxable income (loss). There is no federal income tax expense (benefit) reflected in the ~~consolidated~~Company’s financial statements for any period prior to the reverse recapitalization on February 14, 2020. As the activity resides in Alta Enterprises, LLC, the income tax ~~return~~impact to the Company represents the current income tax calculated at the Consolidated Return level, (“Alta Equipment Group, Inc and Subsidiaries”), and the deferred impact of ~~B. Riley Financial (the “Parent”). The~~the interest in the lower tier partnership.

When looking at the Consolidated Return filer, and considering the operating entity is a 100% owned partnership, the Company ~~calculates~~uses the ~~provision~~guidance in FASB ASC Topic 740 - Income Taxes, asset and liability method of accounting for income taxes, ~~by using a “separate return” method. Under this method~~under which deferred tax assets and liabilities are recognized for the ~~Company is assumed to file a separate return with~~future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax ~~authority, thereby reporting its taxable income or~~bases of existing assets and liabilities and (ii) operating loss and ~~paying the applicable~~ tax ~~to, or receiving the appropriate refund from, the Parent. The Company’s current provision is the amount 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.credit carryforwards. 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~~future period when those temporary differences are expected to ~~affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to~~ be ~~realized.~~

~~ASC Topic 740 prescribes~~recovered or settled. The effect of a recognition threshold and a measurement attribute for the financial statement recognition and measurement 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~~is recognized in ~~tax laws~~income in the period ~~in which~~ the ~~new legislation~~rate change is enacted. ~~Valuation allowances are established, when necessary, to reduce deferred~~Deferred income 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 becameare subject to ~~the new rates and requirements for corporations under the Tax Act.~~

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

~~The Company recognizes tax positions in the financial statements~~recognize only ~~when it is~~amounts that are more likely than not ~~that the position will~~to be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax returnultimately realized.

Equity and amounts recognized in the financial statements. There were no unrecognized tax benefits as of March 31, 2019 and December 31, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for interest expense and penalties related to income tax matters as of March 31, 2019 and December 31, 2018. The Company is subject to income tax examinations by major taxing authorities since inception.

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

In ~~November 2018, upon~~conjunction with the ~~completion of the merger of GA International Services Corp. and~~reverse recapitalization, the Company ~~3,593,750 shares~~made changes to its capital stock. The Company’s Amended and Restated Certificate of ~~Class B common stock (the “Founder Shares”) were issued to Great American in exchange for all of the common stock of GA International Services Corp. The financial statement reflects~~Incorporation authorizes the issuance of ~~these shares retroactively for all periods presented. As used herein, unless the context otherwise requires, Founder Shares shall be deemed to include the~~201,000,000 shares of ~~Class A common~~capital stock, ~~issuable upon conversion thereof. The Founder Shares are identical to the Class A common stock included in the units sold in the Public Offering, the Founder Shares automatically convert into shares~~consisting of Class A common stock at the time of the Initial Business Combination and are subject to certain transfer restrictions, as described in more detail below, and the holders of the Founder Shares, as described in more detail below, have agreed to certain restrictions and will have certain registration rights with respect thereto. The number of Founder Shares issued was determined based on the expectation that the Founder Shares would represent 20% of the outstanding(i) 200,000,000 shares of common stock, ~~upon completion of the Public Offering.~~

~~The Company’s initial stockholders, officers~~(the “Common Stock”) and ~~directors have agreed, not to transfer, assign or sell any Founder Shares held by them until the earlier to occur of: (i) one year after the completion of the Initial Business Combination,~~ (ii) the last sale price of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Initial Business Combination, or (iii) the date following the completion of the Initial Business Combination on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the public stockholders having the right to exchange their shares of common stock for cash, securities or other property.

The Company engaged B. Riley FBR, Inc. as advisors in connection with its Initial Business Combination to assist it in arranging meetings with its stockholders to discuss a potential business combination and the target business’ attributes, introduce it to potential investors that may be interested in purchasing its securities, assist it in obtaining stockholder approval for its Initial Business Combination and assist it with the preparation of press releases and public filings in connection with the Initial Business Combination. The Company 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 the Company does not complete an Initial Business Combination.

Commencing on the date of the prospectus, the Company agreed to pay an affiliate of the Sponsor a total of $10,000 a month for office space, utilities and secretarial and administrative support. Upon completion of the Company’s Initial Business Combination or liquidation, the Company will cease paying these monthly fees.

The holders of Founder Shares, Private Placement Units, Private Placement Shares, Private Placement Warrants and units that may be issued upon conversion of working capital loans, if any, have registration rights to require the Company to register the resale of any of its securities held by them (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock) pursuant to a registration rights agreement. These holders are also entitled to certain piggyback registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements. The Forward Purchase Agreement has substantially similar registration rights.

On November 16, 2018, the Sponsor agreed to loan the Company up to $300,000 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.

The Company also had an amount payable to Great American of $8,279 at March 31, 2019 and December 31, 2018. This amount primarily reflects expenses relating to income taxes and formation expenses that were paid on behalf of the Company by Great American.

The authorized common stock of the Company includes up to 100,000,000 shares of Class A common stock and 25,000,000 shares of Class B common stock. If the Company enters into an Initial Business Combination, it may (depending on the terms of such an Initial Business Combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on the Initial Business Combination to the extent the Company seeks stockholder approval in connection with the Initial Business Combination. Holders of the Company’s common stock are entitled to one vote for each share of common stock. 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. At March 31, 2019 and December 31, 2018, there were 3,593,750 shares of Class B common stock issued and outstanding.

~~The Company is authorized to issue~~ 1,000,000 shares of preferred stock, ~~with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board~~par value $0.0001 per share. As of ~~directors. At March 31, 2019 and December 31, 2018, there were~~September 30, 2020, no shares of preferred stock ~~issued or outstanding.~~

~~Warrants may only be exercised for~~authorized have been issued. As a ~~whole number of shares. No fractional Warrants will be issued upon separation~~result of the ~~units~~reverse recapitalization, the shares issued to Alta Equipment Holdings, Inc. shareholders in connection with the transaction are reflected as if they were issued and ~~only whole Warrants will trade.~~outstanding beginning on January 1, 2019.

As of September 30, 2020, there were warrants outstanding to acquire 8,668,750 shares of the Company’s Common Stock. These warrants were issued in connection with the equity infusion related to reverse recapitalization. The Warrants ~~will become exercisable on~~entitle the ~~later~~registered holder to purchase one share 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 ofour Class A ~~common stock issuable upon exercise~~Common Stock at a price of ~~the Warrants and a current prospectus relating~~$11.50 per share, subject 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).~~certain adjustments. The Company will as soon as practicable, but in no event later than 15 business days, after the closing of the Initial Business Combination, use its best efforts to file with the Securities and Exchange Commission (“SEC”) a registration statement 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.

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

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

We measure the employee stock-based awards at grant-date fair value using provisions of ASC 718 – Stock Compensation and record compensation expense over the vesting period of the award. The Company made an accounting election upon adoption of Accounting Standard Update (“ASU”) 2016-09 and will recognize forfeitures when they occur . The Company treated equity awards granted to non-employee directors similarly to the equity awards to employees upon adoption of ASU 2018-07.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU eliminates, modifies, and adds certain disclosure requirements on fair value measurements. Entities are no longer required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies are required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted. Entities were permitted to early adopt any eliminated or amended disclosures and delay adoption of the additional disclosure requirements until the effective date. We adopted this ASU on the effective date of January 1, 2020. The adoption of this accounting standard update has not had a material impact on our consolidated financial statements and disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases (“Topic 842”) that replaces the existing leasing guidance. Topic 842 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged.

The Company is still assessing the impact Topic 842 will have on its future revenue and expenses. The new accounting standard is effective for the annual reporting period ended December 31, 2022 with an effective date of January 1, 2022, and the interim reporting periods beginning January 1, 2023. Early adoption is permitted. Management is currently assessing the impact the adoption of this standard will have on the Company’s consolidated financial statements as well as the available transition methods.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This standard prescribes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of the financial instrument.

Measurement of expected credit losses is to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption. As amended by ASU 2019-10, the ASU 2016-13 is effective for the annual reporting period beginning on or after December 15, 2022. The Company believes ASU 2016-13 will only have applicability to the Company’s receivables from revenue transactions, or trade receivables, except those arising from rental revenues as ASU 2016-13 does not apply to receivables arising from operating leases. The Company is currently evaluating whether the new guidance, while limited to our non-operating lease trade receivables, will have an impact on the consolidated financial statements or existing internal controls.

Revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the business expects to be entitled to in exchange for those goods or services. Control is transferred when the customer has the ability to direct the use of and obtain the benefits from the goods or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when control is transferred to the customer. For agreements with multiple performance obligations, which are rare, judgment is required to determine whether performance obligations specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, the Company generally allocates sales prices to each distinct performance obligation based on the observable selling price.

The Company enters into various equipment sales transactions with certain customers, whereby customers purchase equipment from the Company and then lease the equipment to a third party. In some cases, the Company provides a guarantee to repurchase the equipment back at the end of the lease term between the customer and third party lessee at a set residual amount set forth in the initial sales contract or pay the customer for the deficiency, if any, between the sale proceeds received for the equipment and the guaranteed minimum resale value. The Company is precluded from recognizing a sale of equipment if it guarantees the repurchase of the sold equipment back or guarantees the resale value of the equipment to the customer for contracts determined to be operating leases. Rather, these transactions are accounted for in accordance with ASC 840, Lease Accounting (“Topic 840”).

The lease liability, with respect to the aforementioned sale transactions, represents the net proceeds upon the equipment’s initial transfer. These amounts, excluding the guaranteed residual value, are recognized into rental revenue on a pro-rata basis over the leased contract period up to the first exercise date of the guarantee. At September 30, 2020 and December 31, 2019, the total lease liability relating to these various equipment sale transactions amounted to $4.1 million and $5.5 million, respectively. The Company also recognized a liability for its guarantee to repurchase the equipment at the residual amounts of $10.6 million and $12.5 million as of September 30, 2020 and December 31, 2019, respectively.

The Company also enters into various rental agreements whereby owned equipment is leased to customers. Revenue from the majority of rental agreements is recognized over the term of the agreement in accordance with Topic 840. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period. Unbilled rental revenues are included as a component of “Accounts receivable” on the Consolidated Balance Sheets. Rental equipment is also purchased outright (“rental conversions”). Rental revenue and revenue attributable to rental conversions, are recognized in “Rental revenue” and “Rental equipment sales” on the Consolidated Statements of Operations, respectively.

The Company also enters into contracts with customer where it provides automated equipment installation and system integration services. Revenue from the installation services are recognized over time as the performance obligation is satisfied, determined using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs.

The Company recognizes deferred revenue with respect to service sales, rental agreements and automated equipment installation and system integration services. Deferred revenue with respect to service sales represents the unearned portion of fees related to guaranteed maintenance contracts for customers covering equipment purchased. These amounts are recognized based on an estimated rate at which the services are provided over the life of the contract. The Company also recognizes deferred revenue related to rental agreements. Total deferred revenue relating to service sales agreements, rental agreements and automated equipment installation and system integration services as of September 30, 2020 and December 31, 2019 was $9.8 million and $4.7 million, respectively.

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

	Three months ended September 30, 2020						Three months ended September 30, 2019
	Topic 840		Topic 606		Total		Topic 840		Topic 606		Total
Revenues:
New and used equipment sales	$	—	$	97.9	$	97.9	$	—	$	61.1	$	61.1
Parts sales		—		35.5		35.5		—		22.9		22.9
Service revenue		—		35.5		35.5		—		27.3		27.3
Rental revenue		32.2		—		32.2		27.8		—		27.8
Rental equipment sales		—		19.5		19.5		—		10.7		10.7
Net revenue	$	32.2	$	188.4	$	220.6	$	27.8	$	122.0	$	149.8

	Nine months ended September 30, 2020						Nine months ended September 30, 2019
	Topic 840		Topic 606		Total		Topic 840		Topic 606		Total
Revenues:
New and used equipment sales	$	—	$	275.2	$	275.2	$	—	$	167.1	$	167.1
Parts sales		—		92.3		92.3		—		60.0		60.0
Service revenue		—		94.1		94.1		—		67.2		67.2
Rental revenue		83.4		—		83.4		66.9		—		66.9
Rental equipment sales		—		48.2		48.2		—		26.8		26.8
Net revenue	$	83.4	$	509.8	$	593.2	$	66.9	$	321.1	$	388.0

The Company ~~may call~~believes that the ~~Warrants~~disaggregation of revenues from contracts to customers as summarized above, together with the discussion below, depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by economic factors.

New and used equipment sales: The Company enters into various equipment sale transactions with certain customers, whereby customers purchase equipment from the Company and then lease the equipment to a third party. In some cases, the Company provides a guarantee to repurchase the equipment back at the end of the lease term between the customer and third party lessee at a set residual amount set forth in the initial sales contract or pay the customer for ~~redemption (except with respect~~the deficiency, if any, between the sale proceeds received for the equipment and the guaranteed minimum resale value. The Company is precluded from recognizing a sale of equipment when it is obligated or has an option to repurchase or guarantees the resale value of the equipment to the ~~Private Placement Warrants)~~customer for contracts determined to be operating leases. For these arrangements, because the Company generally receives the full amount of the consideration at the beginning of the arrangement, the Company initially records deferred revenue for the amount received and recognizes revenue on a pro-rata basis over the term of the contract under Topic 840.

Rental revenue: Owned equipment rentals represent revenues from renting equipment. The Company accounts for these rental contracts as operating leases. The Company recognizes revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period.

Accounting for the different types of revenues pursuant to Topic 606 are discussed below. Substantially all of the Company’s revenues under Topic 606 are recognized at a point in time rather than over time.

New and used equipment sales: With the exception of bill-and-hold arrangements, the Company’s revenues from the sale of new and used equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. Under bill-and-hold arrangements, revenue is recognized when all configuration work is complete and the equipment has been set aside for final shipment, at which point the Company has determined control has been transferred. The Company does not offer material rights of return. The Company recognized approximately $7.1 million in revenues for the year-to-date period ended September 30, 2020 from automated equipment installation and system integration services as performance obligation was satisfied over time using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs.

Parts sales: Revenues from the sale of parts are recognized at the time of pick-up by the customer for over the counter sales transactions. For parts that are shipped to a customer, the Company elected to use a practical expedient of Topic 606 and treat such shipping activities as fulfillment costs, thereby recognizing revenues at the time of shipment. The Company does not offer material rights of return.

Service revenue: The Company records service revenue primarily from guaranteed maintenance and periodic maintenance contracts with customers. The Company recognizes periodic maintenance service revenues at the time such services are completed, which is when the control of the promised services is transferred over to the customer. The Company recognizes guaranteed maintenance service revenues over-time using an input method of costs incurred to estimated costs over the life of the related contract. Revenue recognized from guaranteed maintenance contracts totaled $12.0 million and $12.1 million for the year-to-date period ended September 30, 2020 and 2019, respectively. The Company also records service revenue from warranty contracts whereby the Company performs service on behalf of the Original Equipment Manufacturer (“OEM”) or third-party warranty provider.

Rental equipment sales: The Company also sells rental equipment from our rental fleet, these sales are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. In some cases, certain rental agreements contain a rental purchase option, whereby the customer has an option to purchase the rented equipment during the term of the rental agreement. Revenues from the sale of rental equipment are recognized at the time the rental purchase option agreement has been approved and signed by both parties, as the equipment is already in the customer’s possession under the previous rental agreement, and therefore control has been transferred as title has been transferred.

The Company does not recognize assets associated with the incremental costs of obtaining a contract with a customer that the Company expects to recover (for example, a sales commission). Most of the Company’s revenue is recognized at a point in time or over a period of one year or less, and the Company has used the practical expedient that allows it to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. The amount of the costs associated with the revenue recognized over a period of greater than one year is insignificant.

The Company has contract assets associated with contracts with customers. Contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. Deferred revenue associated with service contracts represents the unearned portion of revenue related to guaranteed maintenance contracts for customers covering equipment purchased. These amounts are recognized based on an estimated rate at which the services are provided over the life of the contract.

The Company’s revenues do not include material amounts of variable consideration under Topic 606. Payment terms may vary by the type of customer, location, and the type of products or services offered. The time between invoicing and when payment is due is not significant, and contracts do not generally include a significant financing component. Contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties.

The Company’s revenues accounted for under Topic 606 generally do not require significant estimates or judgments as the transaction price is generally fixed and clearly stated in the customer contracts. Contracts generally do not include multiple performance obligations, and accordingly do not require estimates of the standalone selling price for each performance obligation. Substantially all of the Company’s revenues are recognized at a point in time and the timing of the satisfaction of the applicable performance obligations is readily determinable. The Company’s revenues under Topic 606 are generally recognized at the time of delivery to, or pick-up by, the customer.

The Company leases a subset of its operating facilities from three real estate entities related through common ownership. Total rent expense under these lease agreements for both the nine months ended September 30, 2020 and September 30, 2019 was $3.6 million and for both the three months ended September 30, 2020 and September 30, 2019 was $1.2 million.

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

IfDirect labor of $1.4 million and $1.2 million incurred for open service orders were capitalized and included in work in process at both September 30, 2020 and December 31, 2019. The remaining work in process balances as of September 30, 2020 and December 31, 2019 primarily represent parts applied to open service orders. Rental depreciation expense in connection with our new and used equipment was $0.9 and $2.4 million for the three and nine months ended September 30, 2020 and was $0.2 million and $1.5 million for the three and nine months ended September 30, 2019.

Total depreciation and amortization on property and equipment was $47.8 million and $33.2 million for the nine months ended September 30, 2020 and 2019 and $19.4 million and $14.0 million for the three months ended September 30, 2020 and 2019, respectively. The Company had assets related to capital leases, which are included in the machinery and equipment balance above. Such assets had gross carrying values totaling $3.9 million and $3.5 million, and accumulated amortization balances totaling $2.1 million and $1.3 million, as of September 30, 2020 and December 31, 2019, respectively. Of the $396.8 million and $285.1 million of gross cost of rental fleet, $15.4 million and $18.4 million were represented by guaranteed purchase obligation (“GPO”) assets as of September 30, 2020 and December 31, 2019, respectively.

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

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

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

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

Effective February 14, 2020, the Company ~~calls~~amended and restated its credit facility with its first lien lender by entering into the ~~Warrants~~Fifth Amended and Restated ABL First Lien Credit Agreement (“Amended and Restated Credit Agreement”) and the facility thereunder, the “ABL Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein.

In connection with the Amended and Restated Credit Agreement, the Company amended and restated its floor plan facility with its first lien lender by entering into the Fifth Amended and Restated Floor Plan First Lien Credit Agreement (“Floor Plan Credit Agreement” and the facility thereunder, the “Floor Plan Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lender JP Morgan Chase Bank, N.A., as Administrative Agent, Sole Bookrunner and Sole Lead Arranger.

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

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

The Company has an ABL Facility with its first lien holder with advances on the line being supported by eligible accounts receivable, parts, and otherwise unencumbered new and used equipment inventory and rental equipment. The ABL Facility has a maximum borrowing capacity of $300 million and interest cost is the London Interbank Offered Rate (“LIBOR”) plus an applicable margin or the CB Floating Rate, depending on the borrowing. As of September 30, 2020, the Company had an outstanding ABL Facility balance of $140.5 million, excluding unamortized debt issuance costs. The effective interest rate was 2.1% at September 30, 2020.

The Company has Floor Plan Facility with its first lien lender to finance new and used inventory and rental fleet equipment. This Floor Plan Facility has a maximum borrowing capacity of $40 million. The interest cost for ~~redemption, management~~the first lien lender floor plan facility is LIBOR plus an applicable margin. The effective interest rate at September 30, 2020 was 2.9%. The floor plan is collateralized by substantially all assets of the Company. As of September 30, 2020, the Company had an outstanding balance on their first lien lender floor plan facility of $30.7 million, excluding unamortized debt issuance costs.

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

Original Equipment Manufacturer (“OEM”) Captive Lenders and Suppliers’ Floor Plans

The Company has floor plan financing facilities with several OEM captive lenders and suppliers for new and used inventory and rental equipment, each with borrowing capacities ranging from $10 million to $82.0 million. Primarily, the Company utilizes the facilities for purchases of new equipment inventories. Certain floor plans provide for a five to twelve-month interest only or deferred payment periods. In addition, certain floor plans provide for interest and principal free terms at the suppliers’ discretion. The Company routinely sells equipment that is financed under OEM captive lender floor plans prior to the original maturity date of the financing agreement. When this occurs, the related OEM captive lender floor plan payable becomes due to be paid at the time the equipment being financed is sold.

With the recent acquisitions, the Company’s floor plan financing facilities with its OEM capital lenders and suppliers were amended to include the new locations and new entities. The floor plan financing facilities are secured by the equipment being financed, and contain operating company guarantees. The interest is LIBOR plus an applicable margin. The effective rates, excluding the favorable effect of interest-subsidies, as of September 30, 2020 ranged from 3.0% to 4.2%. As of September 30, 2020, the Company had an outstanding balance on these floor plans of $124.3 million.

The total aggregate amount of indebtedness related to floor plan financing activities (including the first lien lender floor plan) facility cannot exceed $225.0 million at any time. Total borrowings related to floorplan financing as of September 30, 2020 was $155.0 million excluding unamortized debt issuance costs. For the nine months ended and three months ended September 30, 2020 the Company recognized interest expense associated with new equipment financed under its floor plan facilities of $1.8 million and $0.5 million.

Maximum borrowings under the floor plans and ABL Facility are limited to $525 million. The total amount outstanding as of September 30, 2020 was $295.5 million, exclusive of debt issuance and deferred financings costs of $1.6 million.

In connection with the reverse recapitalization, the Company entered into a new Note Purchase Agreement (the “Term Loan”) dated as of February 3, 2020, for the purposes of, among other things, (i) financing the reverse recapitalization, (ii) financing the acquisitions of Flagler and Liftech; and (iii) providing for the repayment and refinance of a portion of the Company’s prior existing debt.

On December 27, 2017, the Company entered into a Note Purchase Agreement (the “Prior Note Purchase Agreement”) with a lender with an initial note commitment of $40 million, plus an additional delayed draw note commitment of $20 million. On April 31, 2018 and July 31, 2018, the Company borrowed $3.5 million and $5 million, respectively, against the $20 million delayed draw commitment. On May 1, 2019, the Company borrowed an additional $11.5 million against the $20 million delayed draw commitment. The notes were subject to payment-in-kind (PIK) interest at 10% on any unpaid principal amount from the date of issue through repayment, with all PIK interest added to the outstanding principal. The balance at December 31, 2019 included the initial note commitment of $40 million and delayed draws totaling $20 million, plus PIK interest of approximately $11.2 million, accrued from the initial funding date through the end of the year. The note was secured by a second priority lien on substantially all of the assets of the Company, including a pledge of equity interests, and were to mature on June 27, 2023. In connection with the December 27, 2017 note, warrants were issued enabling the purchase of 25% of the common units outstanding on a fully diluted basis at $0.01 per warrant unit.

On February 14, 2020, in connection with the reverse recapitalization and in conjunction with entering into the Amended and Restated Credit Agreement and Term Loan, the Company repaid this note payable in full, completely discharging the Company of any obligations to the lender.

On December 27, 2017, the Company entered into notes payable to former shareholders of Alta Equipment Company, Inc., the Company’s former parent Company. The notes were unsecured, were subject to interest at 5%, with rights subordinated to the first lien lender and second lien lender. During the term of the notes, the Company paid holders’ semi-annual installments of accrued interest but maintained the option to capitalize such accrued interest amounts into the principal sum of each note. The notes were to mature December 2027.

On February 14, 2020, in connection with the reverse recapitalization, and in conjunction with entering into the Amended and Restated Credit Agreement and Term Loan, the Company repaid in full the subordinated debt to the former shareholders of Alta Equipment Company and terminated all commitments and discharged all guarantees related to those agreements. As of September 30, 2020, the Company has no subordinated debt on its Consolidated Balance Sheet.

On February 14, 2020, the Company entered into a Note Purchase Agreement which comprised of a term loan in an aggregate principal amount of $155.0 million with its second priority lien lender through syndication, with an initial maturity date of August 2025. In connection with the new Term Loan, the Company retired the Prior Note Purchase Agreement. The term loan is payable, at the lender’s option, in quarterly installments of $1.9 million plus interest at LIBOR plus 8%. As of September 30, 2020, the effective interest rate was 9.8%. The Term loan is collateralized by substantially all assets of the Company.

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

On May 9, 2014, the Company entered into a Master Note Agreement with an OEM captive lender. These notes were payable in monthly installments, with interest ranging from 3.29% to 4.99%. The notes were secured by the specific assets financed and were to mature at various dates through October 2024.

On February 14, 2020, in connection with the reverse recapitalization, the Company repaid in full the balance of the notes payable to the OEM captive lender. As of September 30, 2020, there were no notes payable to an OEM captive lender on our Consolidated Balance Sheet.

In accordance with ASC Topic No. 470-50, “Debt – Modifications and Extinguishments” (Topic No. 470), the transactions noted above were determined to be an extinguishment of the existing debt and an issuance of new debt. As a result, the Company recorded a loss on the extinguishment of debt in the amount of $7.6 million in the line item “Loss on Extinguishment of Debt” in its Consolidated Statements of Operations. Of the $7.6 million loss on the extinguishment of debt, $3.9 million represented early call premiums that the Company paid to the holders of its Senior Lien Notes and OEM Captive Lender as a result of repurchasing both notes prior to their maturity. The remaining balance represented the write off of deferred financing fees related to the extinguishment of these debt facilities.

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

On June 12, 2020, the Company entered into an unsecured promissory note for $1.0 million at an interest rate of 6.0% on the unpaid principal sum in connection with the PeakLogix acquisition. The promissory note is due one year from the date of the acquisition. Due to the short-term nature of the note, the liability was included in “Other current liabilities” on the Consolidated Balance Sheet as of September 30, 2020.

The Company acquired all the assets of PeakLogix on June 12, 2020. Pursuant to the purchase agreement, Sellers are entitled to additional cash payments of a minimum of $2.0 million through-out 5-year earn-out period. As of September 30, 2020, the Company recorded a $1.7 million liability related to present value of these minimum cash payments using a market participant discount rate. This additional future liability is recorded as non-contingent liability in “Other liabilities” on the Consolidated Balance Sheet. See Note 14, Fair Value Instruments and Note 15, Business Combinations for further information.

As of September 30, 2020, and December 31, 2019, the Company was party to certain contracts in which it guarantees the performance of agreements between various third-party financial institutions. The terms of the guarantees range from three to five years. In the event of a default by a third-party lessee, the Company would be required to pay all or a portion of the remaining unpaid obligations as specified in the contract. The estimated exposure related to these guarantees was $2.6 million and $3.3 million at September 30, 2020 and December 31, 2019, respectively. It is anticipated that the third parties will have the ~~option~~ability to ~~require all holders~~repay the debt without the Company having to honor the guarantee; therefore, no amount has been accrued on the Consolidated Balance Sheets at September 30, 2020 and December 31, 2019.

During the nine months ended September 30, 2020 and September 30, 2019, various claims and lawsuits, incidental to the ordinary course of business, were pending against the Company. In the opinion of management, after consultation with legal counsel, resolution of these matters is not expected to have a material effect on the Company’s consolidated financial statements.

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statement in the period of enactment. The deferred tax liabilities and assets for the Company represent the difference between the financial statement and tax basis of the partnership interest in Alta Enterprises, LLC. As such, the Company is using the single line item approach.

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

The Company recorded an income tax benefit of $1.9 million and $0 for the three months ended September 30, 2020 and 2019, income tax benefit of $3.4 million and $0 for the nine months ended September 30, 2020 and 2019, respectively. For the period ended September 30, 2019, the Company was not in existence and therefore does not have a comparable period. The income tax benefit covers the period starting with the reverse recapitalization on February 14, 2020 through the period ended September 30, 2020. The income tax results from the period January 1, 2020 through the day prior to the reverse recapitalization will be recognized by the predecessor. The Company finalized the February 14, 2020 pre-tax income calculation in the third quarter of 2020. As a result, for the three months and nine months ended September 30, 2020, the income tax benefit was $1.9 million and $3.4 million, respectively. This was primarily driven by the level of pre-tax loss of $14.1 million for the period from February 14, 2020 to September 30, 2020. The effective income tax rate for the period from February 14, 2020 to September 30, 2020 of 24.1% was affected by non-deductible expenses and state income taxes.

As of September 30, 2020, the Company had $15.6 million of net deferred tax liabilities. As discussed above, this represents the GAAP to tax difference in the basis of the underlying partnership, Alta Enterprises, LLC. This basis difference mirrors the GAAP to tax differences within the partnership, which primarily relate to property and equipment assets and other temporary items where the tax basis differs from the GAAP carrying amounts.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, includes various income and payroll tax provisions, modifications to federal net operating loss rules, business interest deduction limitations, and bonus depreciation eligibility for qualified improvement property. At this time, we plan to take advantage of both the payroll tax deferral and the employee retention credit. We are currently evaluating the full impact of these provisions and recent IRS guidance, but note that ~~wish~~any portion of accrued payroll tax not paid out by December 31, 2020 may not be deductible for income tax purposes in 2020. Further evaluation is required to ~~exercise~~determine the ~~Warrants~~current year impact. With regard to ~~do so~~the Employee Retention Credit, as this only impacts payroll taxes which are recorded in pre-tax income, there would be no impact on the income tax provision.

During the third quarter 2020, the Compensation Committee of our Board of Directors approved the grant of 690,000 shares of Restricted Stock Units (“RSUs”) to certain directors, officers and employees of the Company under the 2020 Omnibus Incentive Plan. The Company’s plan is to have broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. We calculated the fair value of the RSUs at grant date based on the closing market price of our common stock at the date of grant. The compensation expense is recognized on a ~~“cashless~~straight-line basis~~” as described in~~ over the ~~warrant agreement.~~requisite vesting period of the award.

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

On August 18, 2020, Robert T. Chiles, President of our Construction Group, passed away. Mr. Chiles was the holder of RSUs for 390,000 shares of common stock of the Company, and at his passing these RSU’s became fully vested and converted into 390,000 shares of our common stock. As a result of the immediate vesting of these RSUs, the Company incurred $3.0 million expense.

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

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

The carrying value of financial instruments reported in the accompanying Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature or maturity of these financial instruments. Based upon current borrowing rates with similar maturities, which are Level 2 fair value inputs, the carrying value of lines of credit, long-term debt, and the guaranteed purchase obligations approximates the fair value as of September 30, 2020 and December 31, 2019.

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

The Company granted warrants to purchase 33,333.33 shares of common units in connection with the stock purchase and redemption that occurred on December 27, 2017. The warrants had an exercise price of $0.01 and ~~number~~included a conditional put option, allowing the holder to require the Company to purchase the outstanding warrants, via a settlement upon the following events: (1) upon 75% repayment of ~~shares of Class A common stock issuable upon exercise~~senior indebtedness, (2) change in control from a sale transaction, and (3) the maturity of the related debt, which required the Company to settle the warrants ~~may be adjusted~~ in ~~certain circumstances including~~cash. The warrants were to expire December 27, 2027. The warrants also included a limited call right, where in the event of a sale transaction, the Company had the right to redeem, in cash, all the warrants simultaneously at the per common share ~~dividend,~~price equal to the price set for the sale transaction.

The Company recorded the warrants issued based on the fair value at the date of grant and re-measured at each balance sheet date. The fair value of warrants classified as liabilities at the date of grant was estimated using a market approach. The valuation methodology was primarily a market-based approach using participants in the industrial and heavy-equipment retailing, wholesaling, and rental industry. A range of multiples was established taking company-specific risks into consideration and applied to Alta’s reported EBITDA to derive an implied enterprise value. To derive equity value, interest-bearing debt was removed.

The preceding methods described produced a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although management believed its valuation methods to be appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could have resulted in a different fair value measurement at the reporting date.

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

The contingent consideration liability represents the fair value of the future earn-out liability that the Company may be required to pay in conjunction with the acquisitions upon the achievement of certain performance milestones. The earn-out for the acquisitions is measured at fair value in each reporting period, based on level 3 inputs, with any change to the fair value recorded in the Consolidated Statements of Operations.

The purchase agreement for the PeakLogix acquisition provides for earn-out payments of a minimum of $2.0 million up to $3.7 million which can be earned through June 30, 2025 based on meeting certain performance milestones. We estimated the fair value of the incremental $1.7 million earn-out payment based on a probability weighted range of outcomes analysis and applied a discount rate that appropriately captures a market participant's view of the risk associated with the obligation. This analysis considered the earn-out payment thresholds, the minimum and maximum range of earn-out payments per the agreement and the expected future cash flows of PeakLogix. The earn-out will be remeasured at each balance sheet date using this approach and any resulting increase or ~~consolidation.~~ decrease will be reflected in the income statement. Going forward, volatility in the amount of PeakLogix’s actual results and forecasted scenarios could impact the fair value of this contingent consideration.

The Company concluded the future minimum cash payments of $2.0 million will be treated as a non-contingent liability and recorded a $1.7 million liability related to the present value of these minimum cash payments. See Note 10, Long-Term Debt and Note 15, Business Combinations for further information.

In addition ~~if (x)~~to the non-contingent liability, there is a potential earn out payment of $1.7 million to be paid to Sellers over a five-year period. The Company ~~issues~~recorded a $1.0 million earn out liability as the acquisition date fair value in “Other Liabilities” on the Consolidated Balance Sheet. See Note 15, Business Combinations for further information.

The purchase agreement for the Hilo acquisition provides for one additional ~~shares~~earn-out payment of ~~Class A common stock or securities convertible into or exercisable or exchangeable~~$1.0 million based on meeting certain financial target which can be earned through July 1, 2023. We estimated the fair value of the earn-out liability based on present value of probability weighted expected future results. See Note 15, Business Combinations for ~~shares~~further information.

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

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

	Flagler			Liftech			Peak			Hilo			Martin			Total
Cash	$	0.4		$	—		$	3.0		$	2.1		$	—		$	5.5
Accounts receivable		15.1			4.4			4.6			5.5			1.0			30.6
Inventory		37.5			9.6			0.4			4.7			13.2			65.4
Prepaid and other assets		0.5			1.0			0.2			0.2			—			1.9
Property, plant, and equipment		50.7			5.9			0.2			9.2			0.1			66.1
Intangible assets		14.0			0.7			4.6			3.1			—			22.4
Goodwill		6.0			2.0			1.9			2.1			2.2			14.2
Total Assets	$	124.2		$	23.6		$	14.9		$	26.9		$	16.5		$	206.1

Floor plan payable		(29.0	)		(3.5	)		—			(4.4	)		—			(36.9	)
Accounts payable		(14.0	)		(1.6	)		(1.5	)		(2.8	)		(0.2	)		(20.1	)
Accrued expenses		(4.1	)		—			(0.1	)		(0.3	)		(0.1	)		(4.6	)
Other current liabilities		—			(0.1	)		(3.9	)		(0.4	)		—			(4.4	)
Other liabilities		(1.3	)		—			—			—			—			(1.3	)
Total Liabilities	$	(48.4	)	$	(5.2	)	$	(5.5	)	$	(7.9	)	$	(0.3	)	$	(67.3	)

Net Assets Acquired	$	75.8		$	18.4		$	9.4		$	19.0		$	16.2		$	138.8

Assets acquired net of cash	$	75.4		$	18.4		$	6.4		$	16.9		$	16.2		$	133.3

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

The acquisition has been accounted for as a purchase business combination. Under the purchase method of ~~securities under~~accounting, the ~~Forward Purchase Agreement),~~assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements and may be subject to adjustment pending completion of final valuation.

The fair value of accounts receivable was determined based on the acquisition date net book value and an ~~issue price or effective issue~~evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

It should be further noted that, upon the acquisition’s close, the Company established additional floorplan borrowings for new equipment on its Floor Plan Facility with its first lien lender in the amount of $1.2 million, for a total enterprise value of $74.2 million net of cash acquired.

On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Liftech for a total purchase price of ~~less than $9.20 per share~~$18.4 million, which was paid out of ~~Class A common stock (with such issue price or effective issue price~~funds from the closing of the reverse recapitalization.

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

The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

It should be further noted that, upon the acquisition’s close, the Company established additional floorplan borrowings for new equipment on its Floor Plan Facility with its first lien lender in the amount of $2.5 million, for a total enterprise value of $15.9 million.

On June 12, 2020, the Company acquired all the assets of PeakLogix for a total purchase cash consideration of $5.7 million, which was paid out of available funds. Additional consideration includes $1.0 million in an unsecured one-year promissory note at 6% and earn-out payment of a minimum $2.0 million up to a $3.7 million to be paid out to former owners based on meeting certain financial targets through-out 5-year earn-out period, collectively resulting in an estimated enterprise value of $6.4 million net of cash acquired. In connection with the purchase, PeakLogix LLC was created.

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

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in ~~good faith by~~operating expenses.

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

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

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

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

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

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

The estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

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

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

On May 1, 2019, the Company purchased the assets of NITCO, for a total purchase price of $65.6 million. In connection with the purchase, NITCO, LLC was created.

The goodwill of $1.0 million arising from the acquisition consists largely of an assembled workforce and is expected to be deductible for income tax purposes. The total balance of goodwill was allocated to the Industrial Equipment segment.

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets and liabilities assumed are recorded at the date of acquisition at their respective fair values.

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

The Company completed the Flagler acquisition on February 14, 2020. Therefore, operating results of Flagler are included in the Company’s ~~board~~Consolidated Statement of ~~directors~~Operations from February 14, 2020. Pursuant to ASC 805, pro forma disclosures should be

reported whenever the year or interim period of the acquisition is presented. The pro forma information below gives effect to the Flagler acquisition as if the acquisition occurred on January 1, 2020.

The Company completed the NITCO acquisition on May 1, 2019. Therefore, operating results of NITCO are included in the Company��s Consolidated Statement of Operations from May 1, 2019. Pursuant to ASC 805, pro forma disclosures should be reported whenever the year or interim period of the acquisition is presented. Since the NITCO acquisition was completed in the period ended December 31, 2019, the pro forma information below gives effect to the NITCO acquisition as if the acquisition occurred on January 1, 2019.

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

The financial effect of the other acquisitions, individually and in the ~~case of any such issuance~~aggregate, was not material to the ~~Sponsor or its affiliates, without taking into account any Founder Shares held by~~consolidated financial statements. As such, pro forma results of operations including other acquisitions have not been presented.

The Company has two reportable segments: Industrial Equipment and Construction Equipment. The Company’s segments are determined based on management structure, which is organized based on types of products sold, as described in the ~~Sponsor or such affiliates,~~following paragraph. The operating results for each segment are reported separately to the Company’s Chief Executive Officer to make decisions regarding the allocation of resources, to assess the Company’s operating performance and to make strategic decisions.

The Industrial Equipment segment is principally engaged in operations related to the sale, service, and rental of lift trucks in Michigan, Illinois, Indiana and New York, as ~~applicable, prior to such issuance (the “Newly Issued Price”)), (y) the aggregate gross proceeds from such issuances represent more than 60%~~well as parts of the ~~total equity proceeds,~~northeastern United States. As of September 30, 2020, the Industrial Equipment segment included the Liftech, PeakLogix and interest thereon, available for funding the Initial Business Combination, and (z) the volume weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading day priorHilo acquisitions.

The Construction Equipment segment is principally engaged in operations related to the ~~day on~~sale, service, and rental of construction equipment in Michigan, Illinois and Florida. As of September 30, 2020, the Construction Equipment segment included the Flagler and Martin acquisitions.

The Company retains various unallocated expense items at the general corporate level, which the Company ~~consummates~~refers to as “Corporate” in the ~~Initial Business Combination (the “Market Value”) is below $9.20 per share,~~table below. Corporate holds corporate debt and has minor activity all together. For the ~~exercise price~~nine months ended September 30, 2020, Corporate incurred $7.6 million in debt extinguishment fees, $7.6 million in transaction costs and other expenses associated with the reverse recapitalization. During the quarter, Corporate primarily incurred expenses associated with consulting and legal fees related to acquisition costs, shared based compensation expense and interest expense, which were offset with income tax benefit and $8.0 million in income from a life insurance policy on our Construction Group President.

The following table presents the Company’s results of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value 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, in no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effectiveoperations by reportable segment for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full 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.nine months ended September 30, 2020 (amounts in millions):

The ~~Private Placement Warrants are identical to~~following table presents the ~~Warrants underlying~~Company’s results of operations by reportable segment for the ~~units sold~~three months ended September 30, 2020 (amounts in millions):

The following table presents the ~~Public Offering, except that~~Company’s results of operations by reportable segment for the ~~Private Placement Warrants~~nine months ended September 30, 2019 (amounts in millions):

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

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

On October 30, 2020, the ~~shares~~Company closed its acquisition of ~~Class A common stock issuable upon exercise~~all the assets of ~~the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion~~Howell Tractor and Equipment, LLC. (“Howell”), a privately held heavy equipment dealer serving Northern Illinois and Northwest Indiana. The purchase price consisted of ~~the Initial Business Combination,~~$23.3 million in cash paid at closing, subject to certain ~~limited exceptions.~~adjustments based upon Howell’s net working capital at closing. Additionally, the ~~Private Placement Warrants will be non-redeemable so long as they are held by~~Company issued 507,143 shares of its common stock in connection with 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.purchase agreement, yielding a total enterprise value of approximately $23.8 million, excluding approximately $3.4 million of floorplan eligible new equipment inventories.

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~~and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Prospectus filed as part of our S-1 Registration Statement as filed with the U.S. Securities and Exchange Commission on March 25, 2020. This discussion contains “forward-looking statements” reflecting Alta’s current expectations, estimates and assumptions concerning events and financial trends that may affect its future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward- looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this Quarterly ~~Report.~~

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 forward-looking events discussed may not occur. Alta assumes no obligation to update any of these forward-looking statements.

The impact of the COVID-19 pandemic has created significant volatility in the global economy and led to reduced economic activity. On March 11, 2020, the World Health Organization characterized the outbreak of COVID-19 as a global pandemic and recommended containment and mitigation measures. Subsequent to this characterization international, federal, state, and local public health and governmental authorities have taken extraordinary measures to contain and combat the outbreak and spread of COVID-19. These actions include travel restrictions, local quarantines, “stay-at-home” orders, and similar mandates for many individuals to substantially restrict daily activities and for many businesses to drastically reduce or cease customary operations.

The pandemic has resulted, and may continue to result, in significant economic disruption that has and may likely continue to adversely affect our business.

In mid-March, the Company started to see a slowdown in its business activity, initially and primarily in the automotive industry and in the state of Michigan due to its customers being impacted by the COVID-19 pandemic. This slowdown reached its most acute level midway through the second quarter. In mid-May as state and local officials began easing quarantine and “stay at home” orders we saw an increase in business activity levels that continued to trend positively through the remainder of the second quarter. While business activity levels stabilized in the third quarter to near pre-COVID levels, with the exception of our rental fleet utilization which continues to lag 2019 levels, as of the time of this filing, we are unable to predict the exact impact the COVID-19 pandemic will have on our business in fourth quarter of 2020 and into 2021. COVID-19’s impact on our fourth quarter of 2020 and 2021 financial results and beyond will depend on future developments, such as the duration and scope of outbreaks and the potential for future “shelter in place” orders that could impact our employees, customers and suppliers. Although we’ve seen improvements in business activity in the third quarter of 2020 when compared to the second quarter of 2020, we expect our full year 2020 results to be adversely affected by COVID-19. Specifically, if there is a resurrection of the “stay at home” restrictions in the fourth quarter of 2020, our business and financial performance would likely be negatively impacted.

Nevertheless, we are able to address our continuing response to the pandemic, and how COVID-19 may impact our results and financial condition going forward. Based on business conditions as of the date of this filing, the Company believes it has sufficient liquidity to fund operations for the foreseeable future so long as business conditions and economic activity remain at current levels. However, if there are future “shelter in place” orders or similar measures taken in the geographies where we operate and the demand for our products and services is adversely impacted, we may take additional actions to further reduce costs and/or seek additional financing.

In late March 2020, in compliance with the directives of government authorities in the state and local geographic areas in which we have operations, we adjusted our operations to permit virtually all of our sales and back office employees to work remotely. In late second quarter of 2020, we phased in a return to more normalize working conditions as state or local governments began lifting restrictions. Despite the lifting of certain restrictions, Alta continues to adhere to government issued guidelines and promote a clean and safe environment in all of its branch locations. Where and when applicable, certain non-revenue producing business functions have been able to operate via remote work arrangements which have been designed to allow for the continued operation of our business while allowing employees to work virtually.

Although we were deemed an “essential” business in all of our geographies, many of our customers were drastically impacted by COVID-19 in the second quarter of 2020, which led to an adverse effect on the Company’s financial performance in the quarter.

Despite the relative reduction in revenues in the second quarter and in order to preserve our liquidity, our senior executive officers volunteered to accept pay reductions, we implemented an employee furlough program and took various other cost savings measures to prioritize preserving our liquidity position. We believe the measures we took were prudent and successful in helping to preserve our liquidity position. As business conditions and customer demand returned to more normalized levels, many of these cost savings measures and furlough programs were removed and eliminated in the third quarter. While our sales and services related operations are performing at near pre-COVID levels, our rental fleet utilization has lagged pre-COVID performance which prevented the Company from generating an optimal level of cash flow commensurate with pre-COVID levels in the third quarter. The Company will continue to monitor utilization and, in-turn, rationalize rental fleet levels to match expected demand in the fourth quarter of 2020 and through the end of COVID-19 pandemic. Additionally, we believe that the acquisitions and investments made in the second and third quarters of 2020 expand our service capabilities, geographic reach, end market diversification and product offerings; each of which ultimately strengthens our resiliency to economic shocks and will help to preserve liquidity over the long term. After considering current business conditions, we believe we have sufficient liquidity to fund our operations as we work through the COVID-19 recovery. Our Board of Directors and management team continues to monitor and evaluate the continuing impacts of the COVID-19 pandemic on our business and operations, to the extent business conditions regress from current levels we may take additional actions to further reduce costs and/or seek additional financing to bolster our liquidity position.

We have established new safety protocols intended to help protect the health and safety of our workforce as many of them have continued to provide services to our customers in the field or within our branch infrastructure during the COVID-19 outbreak. The protocols comport with state and local guidelines and include, requiring face mask use in our facilities, providing additional personal protective equipment when job requirements do not permit following social distancing guidelines and rigorous facility cleaning protocols.

This ~~Quarterly Report includes forward-looking statements. All~~Form 10-Q contains statements ~~other than statements~~that, to the extent they are not recitations of historical fact, ~~included~~constitute forward-looking statements within the meaning of the 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 indented to guaranty 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 ~~Quarterly Report~~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, ~~without limitation, statements in this~~but not limited to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” ~~regarding~~, “Risk Factors” in our Annual Report on Form 10-K for the ~~Company’s financial position, business strategy~~year ended December 31, 2019,

Registration Statement on Form S-1, filed with the SEC on March 25, 2020, Registration Statement on Form S-1, filed with the SEC on October 26, 2020 and ~~the plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify~~in this Quarterly Report on Form 10-Q, respectively. Our forward-looking statements ~~by terminology such~~speak only as ~~“may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or~~of the ~~negative~~date of ~~such terms or other similar expressions. We have based these forward-looking statements on our current expectations~~their initial issuance, 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 fromwe do not undertake any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in 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 or obligation to update or revise publicly any forward-looking ~~statements~~statement, whether as a result of new information, future events, or ~~otherwise.~~otherwise

The Company owns and operates one of the largest integrated equipment dealership platforms in the U.S. Through our branch network, we sell, rent, and provide parts and service support for several categories of specialized equipment, including lift trucks and aerial work platforms, cranes, earthmoving equipment and other industrial and construction equipment. We engage in five principal business activities in these equipment categories:

We have operated as an equipment dealership for over 35 years and have developed a branch network that includes 51 total locations in Michigan, Illinois, Indiana, Massachusetts, Maine, Connecticut, New Hampshire, Vermont, New York, Virginia and Florida. We offer our customers a one-stop-shop for most of their equipment needs by providing sales, parts, service, and rental functions under one roof. More recently, with the acquisition of PeakLogix, we have entered the automated equipment installation and system integration sector, which we believe has natural synergies with our material handling business and positions us to take advantage of the macroeconomic trend in warehousing and logistics, and e-commerce.

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 the leading industrial and construction equipment OEMs, including Hyster-Yale, Volvo, and JCB, among more than 30 others. We are consistently recognized by OEMs as a 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.

We have two reportable segments: Industrial Equipment and Construction Equipment. Our segments are determined based on management structure, which is organized based on types of products sold and geographic areas, as described in the following paragraph. The operating results for each segment are reported separately to our Chief Executive Officer (our chief operating decision maker) to make decisions regarding the allocation of resources, to assess our operating performance and to make strategic decisions.

The Industrial Equipment segment is principally engaged in operations related to the sale, service, and rental of lift trucks in Michigan, Illinois, Indiana, as well as parts of the northeastern United States including Massachusetts, Maine, Connecticut, New Hampshire, New York, Vermont, and Rhode Island, and Virginia. The Industrial Equipment segment is made up of the legal entities Alta Industrial Equipment Michigan, LLC, Alta Industrial Equipment Company, LLC, NITCO, LLC, PeakLogix LLC and Alta Industrial Equipment New York, LLC. The Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Indiana, Illinois and Florida. The Construction Equipment segment is made up of the legal entities Alta Construction Equipment, LLC, Alta Construction Equipment Illinois, LLC, Alta Heavy Equipment Services LLC and Alta Construction Equipment Florida, LLC.

Alta Equipment Group Inc., Alta Equipment Holdings, Inc. and Alta Enterprises, LLC (individually or as sometimes collectively referred to as “Corporate”) are the holding companies for the legal entities noted above that make up each segment. In addition to being a holding company, Alta Enterprises, LLC also holds corporate debt, debt extinguishment fees, deferred taxes, income tax provision, transaction costs associated with the reverse recapitalization, and has minor activity all together.

On September 1, 2020, the Company acquired all the assets of Martin for a total purchase price of $16.2 million, which included floorplan eligible new equipment inventories, which was paid out of available funds. This acquisition enhances our position in the Illinois construction market, broadens our product portfolio in the compact segment of the construction equipment market and adds valuable service capabilities in the region.

On July 1, 2020, the Company acquired all the assets of Hilo, a distributor of material handling equipment with three branches in the New York City metro area. Under the terms of the agreement, the purchase price at close was $18.2 million in cash, including certain new floorplan inventory and potential earn out payments of $1.0 million tied to post closing performance of the Hilo business. The acquisition aligns with our growth strategy by expanding our distribution footprint with a major OEM, giving us a strategic presence in yet another densely populated major market and strengthens our overall coverage of the Northeastern United States.

On June 12, 2020, the Company acquired all the assets of PeakLogix for a total cash purchase price of $5.7 million, which was paid out of available funds. Additional consideration includes $1.0 million in an unsecured one-year promissory note at 6% and earn-out payment of a minimum $2.0 million up to $3.7 million to be paid out to former owners based on meeting certain financial targets through-out the 5-year earn-out period. The acquisition represents the Company’s entrance into the ~~Overview~~automated equipment installation and system integration sector, which we believe has natural synergies with our material handling business and positions us to take advantage of the macroeconomic trend in warehousing and logistics, and e-commerce.

On February 14, 2020, the Company acquired all the assets of Flagler for a total purchase price of $75.8 million, which was paid out of funds from the closing of the reverse recapitalization. The acquisition expands our heavy equipment segment into the Florida construction market, scales our relationship with a major OEM and provides an opportunity for us to deploy our aftermarket strategies in a robust and growing construction market in the southeastern United States.

On February 14, 2020, the Company acquired all the assets of Liftech for a total purchase price of $18.4 million, which was paid out of funds from closing of the reverse recapitalization. The acquisition primarily expands our materials handling segment into the upstate New York market, scales our relationship with a major OEM and provides an opportunity for Alta to drive market share with allied products in the region.

On May 1, 2019, we purchased the assets of Northland Industrial Truck Co., Inc. for a total purchase price of $65.6 million. In connection with the purchase, NITCO LLC was created. The acquisition expands our business into the New England market, diversifies our end market exposure, and provides Alta a growth platform on the East Coast of the United States. The acquisition adds a best-in-class full-service materials handling and construction equipment dealer with operations in Massachusetts, Connecticut, New Hampshire and Maine.

Our revenues and related costs are primarily derived from sale or rental of equipment and related activities, and consist of:

New Equipment Sales. We sell new heavy construction and industrial equipment and are a leading regional distributor for over 30 nationally recognized equipment manufacturers, including Hyster, Yale, Volvo, and JCB. Our new equipment sales operation is a primary source of new 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, acts as a means of generating equipment field population and activity for our higher-margin aftermarket revenue streams, specifically service and parts. We also sell tangential products related to our material handling equipment offerings and, with the acquisition of PeakLogix, we provide automated equipment installation and system implementation solutions.

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, or , as is primarily the case in our industrial segment, equipment that has been designated for disposal and has been transferred to our used inventory from our rental fleet. Used equipment sales made in our territories, like new equipment sales, generate parts and services business for us, as well.

Parts Sales. We sell replacement parts to 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 parts inventory is made up of OEM replacement parts for those OEM’s with which we have exclusive dealership agreements to sell new equipment.

Service Support. We provide maintenance and repair services for customer-owned equipment and to 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 services infrastructure that we believe differentiates us from our competitors. Approximately half of our employees are skilled service technicians. 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.

Equipment Rentals. We rent heavy construction, aerial, industrial, and compact equipment to our customers on a daily, weekly and monthly basis. Our rental fleet, which we believe to be well maintained has an original acquisition cost (which we define as the cost originally paid to manufacturers plus any capitalized costs) of $381.4 million. The original acquisition cost of our rental fleet excludes the value of assets associated with the guaranteed purchase obligations. 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 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 high-margin parts and services revenue for us.

General and Administrative expenses. These costs are made up of three main components: personnel costs, operational costs, and occupancy costs. Personnel costs are made up of hourly and salaried wages for administrative employees, including incentive compensation, and employee benefits, including medical benefits. Operational costsinclude marketing activities, costs associated with deploying and leasing our service vehicle fleet, information technology, office and shop supplies, general corporate costs, depreciation on non-sales and rental related assets, and intangible amortization. Occupancy costs are made up of all expenses related to office and administrative working space, including rent, utilities, property taxes, and building insurance.

Other Income (Expense). This section of the financial statements is mostly made up of interest expense and other miscellaneous items that result in income or expense. Interest expense is mostly driven by manufacturer floor plan arrangements, a working capital line-of-credit, and a second lien notes payable. Manufacturer floor plans payable are financing arrangements for new, used inventory and rental equipment. Also included in this section of the financials are non-recurring costs, in particular expenses associated with the extinguishment of debt.

Three and nine months ended September 30, 2020 compared to three and nine months ended September 30, 2019


	Three months ended September 30,						Increase (Decrease)						Nine months ended September 30,						Increase (Decrease)
	2020			2019			2020 versus 2019						2020			2019			2020 versus 2019
Revenues:
New and used equipment sales	$	97.9		$	61.1		$	36.8			60.2	%	$	275.2		$	167.1		$	108.1			64.7	%
Parts sales		35.5			22.9			12.6			55.0	%		92.3			60.0			32.3			53.8	%
Service revenue		35.5			27.3			8.2			30.0	%		94.1			67.2			26.9			40.0	%
Rental revenue		32.2			27.8			4.4			15.8	%		83.4			66.9			16.5			24.7	%
Rental equipment sales		19.5			10.7			8.8			82.2	%		48.2			26.8			21.4			79.9	%
Net revenue	$	220.6		$	149.8		$	70.8			47.3	%	$	593.2		$	388.0		$	205.2			52.9	%

Cost of revenues:
New and used equipment sales		84.4			53.4			31.0			58.1	%		240.3			146.6			93.7			63.9	%
Parts sales		24.3			14.9			9.4			63.1	%		63.3			39.4			23.9			60.7	%
Service revenue		13.5			10.0			3.5			35.0	%		35.9			24.3			11.6			47.7	%
Rental revenue		5.4			4.3			1.1			25.6	%		14.8			11.4			3.4			29.8	%
Rental depreciation and amortization		19.2			13.7			5.5			40.1	%		47.1			32.9			14.2			43.2	%
Rental equipment sales		17.1			9.3			7.8			83.9	%		41.7			23.1			18.6			80.5	%
Cost of revenue	$	163.9		$	105.6		$	58.3			55.2	%	$	443.1		$	277.7		$	165.4			59.6	%

Gross profit	$	56.7		$	44.2		$	12.5			28.3	%	$	150.1		$	110.3		$	39.8			36.1	%

General and administrative expenses		58.4			37.5			20.9			55.7	%		153.2			95.6			57.6			60.3	%
Depreciation and amortization expense		1.8			0.5			1.3			260.0	%		4.5			1.8			2.7			150.0	%
Total general and administrative expenses		60.2			38.0		$	22.2			58.4	%		157.7			97.4		$	60.3			61.9	%

(Loss) income from operations	$	(3.5	)	$	6.2		$	(9.7	)		(156.5	)%	$	(7.6	)	$	12.9		$	(20.5	)		(158.9	)%

Other income (expense)
Interest expense, floor plan payable – new equipment		(0.5	)		(0.9	)		0.4			(44.4	)%		(1.8	)		(2.4	)		0.6			(25.0	)%
Interest expense – other		(5.6	)		(4.7	)		(0.9	)		19.1	%		(15.9	)		(12.7	)		(3.2	)		25.2	%
Other income		8.0			0.3			7.7			2566.7	%		8.7			0.9			7.8			866.7	%
Change in fair market of warrants		—			(28.3	)		28.3			(100.0	)%		—			(28.3	)		28.3			(100.0	)%
Loss on extinguishment of debt		—			—			—		NA				(7.6	)		—			(7.6	)	NA
Total other income (expense)	$	1.9		$	(33.6	)	$	35.5			(105.7	)%	$	(16.6	)	$	(42.5	)	$	25.9			(60.9	)%

Loss before taxes	$	(1.6	)	$	(27.4	)		25.8			(94.2	)%	$	(24.2	)	$	(29.6	)		5.4			(18.2	)%

Income tax benefit		(1.9	)		—			(1.9	)	NA				(3.4	)		—			(3.4	)	NA

Net income (loss)	$	0.3		$	(27.4	)	$	27.7			(101.1	)%	$	(20.8	)	$	(29.6	)	$	8.8			(29.7	)%

	Percent of Revenue						Percent of Revenue
Consolidated	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Revenues:
New and used equipment sales		44.4	%		40.8	%		46.4	%		43.1	%
Parts sales		16.1	%		15.3	%		15.6	%		15.5	%
Service revenue		16.1	%		18.2	%		15.9	%		17.3	%
Rental revenue		14.6	%		18.6	%		14.1	%		17.2	%
Rental equipment sales		8.8	%		7.1	%		8.1	%		6.9	%
Net revenue		100.0	%		100.0	%		100.0	%		100.0	%

Cost of revenues:
New and used equipment sales		38.3	%		35.6	%		40.5	%		37.8	%
Parts sales		11.0	%		9.9	%		10.7	%		10.2	%
Service revenue		6.1	%		6.7	%		6.1	%		6.3	%
Rental revenue		2.4	%		2.9	%		2.5	%		2.9	%
Rental depreciation and amortization		8.7	%		9.1	%		7.9	%		8.5	%
Rental equipment sales		7.8	%		6.2	%		7.0	%		6.0	%
Cost of revenue		74.3	%		70.5	%		74.7	%		71.6	%

Gross profit		25.7	%		29.5	%		25.3	%		28.4	%

Revenues: Consolidated revenues increased by $70.8 million, or 47.3%, to $220.6 million for the three months ended September 30, 2020 as compared to the same period last year. The primary drivers of this period over period increase were the favorable impact from the acquisitions of Flagler, Liftech, PeakLogix, Hilo and Martin which occurred between February 2020 and September 2020. All revenue streams increased as a result of these acquisitions. Notably, our new and used equipment sales increased by approximately 11.0% on an organic basis compared to the same period in 2019 due to increased sales volume within our existing markets. Additionally, parts and service increased by 7.5% and 4.2% on an organic basis, respectively, quarter over quarter. While sales, parts and service increased on an organic basis, our rental revenue decreased by approximately 13.0% on an organic basis due to a decrease in utilization for the three months ended 2020 compared to the same period in 2019.

~~We are a blank check company incorporated~~Consolidated revenues increased by $205.2 million, or 52.9%, to $593.2 million for the nine months ended September 30, 2020 as compared to the same period last year. Overall, the revenue streams increased as a ~~Delaware corporation~~result of the NITCO, Flagler, Liftech, Peak Logix, Hilo and ~~formed~~Martin acquisitions that closed between May 2019 and September 2020. All revenue streams increased as a result of these acquisitions.

The consolidated gross profit for the ~~purpose of effecting~~three months ended September 30, 2020 was 25.7%, a ~~merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”).~~

~~We intend to effectuate an Initial Business Combination using cash~~3.8% decline from the ~~proceeds~~29.5% for the same period in 2019. We also realized a decline in rental revenue gross margin in the third quarter of 2020, which was the main driver in the overall depressed margin; specific factors of this decline in rental revenue gross margin are further described herein in the segment levels results. Additionally, parts and service gross margins decreased as a whole, in part due to the relative sales mix being more heavily weighted to our construction segment year over year. This was partially offset by higher gross margin on new and allied products as a result of the PeakLogix acquisition. Additionally, we realized better used equipment gross margin in our industrial segment in the third quarter of 2020 when compared to the same period in 2019.

The consolidated gross profit for the nine months ended September 30, 2020 was 25.3%, a 3.1% decline from the 28.4% for the same period in 2019. The decrease in gross margins were largely driven by the same issues as described above for the reduction in the third quarter of 2020 gross margin when compared with the same period in 2019.

General and Administrative expenses: Consolidated general and administrative (G&A) expenses increased by $22.2 million to $60.2 million for the three months ended September 30, 2020 compared to the same period last year. This increase was mainly driven by the impact from the acquisitions of Flagler, Liftech, PeakLogix, Hilo and Martin. In addition to the acquisitions, the Company incurred $3.2 million share-based compensation expense mainly due to the immediate vesting of restricted stock units related to the passing of our ~~initial public offering (the “Public Offering”) that closed on April 11, 2019 (the “Closing Date”)~~Construction Group President.

Consolidated general and administrative (G&A) expenses increased by $60.3 million to $157.7 million for the ~~private placement units~~nine months ended September 30, 2020 compared to ~~purchase shares~~the same period last year. This increase was mainly due to the same drivers described above in addition to the $7.6 million of transaction costs associated with activities directly attributable to the reverse recapitalization. Outside of the reverse recapitalization and acquisition activities, G&A expenses also increased in support of enterprise-wide growth.

Other Income (expense): Consolidated other income for the three months ended September 30, 2020 was $1.9 million compared to $(33.6) million for the same period in 2019. This change was mainly due to $8.0 million in key man life insurance proceeds as a result of the passing away of our ~~Class A common stock (“Private Placement Warrants”) that closed on~~Construction Group President, which offset higher borrowings associated with the ~~Closing Date and the overallotment that closed on April 12, 2019, and from additional issuances of, if any, our capital stock and our debt, or a combination of cash, stock and debt.~~

~~At March 31, 2019, we had cash of $31,665, deferred offering costs of $372,422, and current liabilities of $413,729. Further, we expect to continue to incur significant costs in the pursuit~~financing of our ~~acquisition plans. We cannot assure you that our plans to complete an Initial Business Combination will be successful.~~

recent acquisitions. For the three months ended ~~March 31,~~ 2019, ~~and 2018, we had~~the Company incurred a net loss of $1,021 and $800, respectively. Our loss consists solely of miscellaneous general and administrative expenses and income taxes. Our business activities from inception to March 31, 2019 consisted primarily of our formation and completing our Public Offering, and since the offering on April 11, 2019, our activity has been limited to identifying and evaluating prospective acquisition targets for an Initial Business Combination.

Until the closing of the Public Offering, our only source of liquidity was an initial sale of shares (the “Founder Shares”) of Class B common stock, par value $0.0001 per share, to our sponsor, B. Riley Principal Sponsor Co., LLC, a Delaware limited liability company (the “Sponsor”), and the proceeds of a promissory note (the “Note”) from the Sponsor, in the amount of $300,000. The Note was repaid upon the closing of the Public Offering.

~~At March 31, 2019 we had cash of $31,665 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 at a price 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 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.

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,$28.3 million expense as a result of the ~~underwriters’ election~~recognition of an increase in the fair value of warrants held by a former minority shareholder. The increase in fair value was triggered by the implied valuation of the company in the reverse recapitalization

Consolidated other expense decreased by $25.9 million compared to ~~exercise their overallotment option~~ the ~~Founder Shares are no longer forfeitable.~~same period last year. The year over year favorable change was primarily attributable to the activities described above. In addition to the above, the Company incurred $7.6 million loss on debt extinguishment in the reverse recapitalization and had higher borrowings associated with the reverse recapitalization and acquisition related activities during the nine months ended September 30, 2020.

Provision for income taxes: Income tax benefit for the three months ended September 30, 2020 was $1.9 million compared to $0 for the three months ended September 30, 2019. This benefit was the result of the level of pre-tax loss for the third quarter of 2020.

Income tax benefit for the nine months ended September 30, 2020 was $3.4 million compared to $0 for the nine months ended September 30, 2019. This benefit was the result of the level of pre-tax loss for the period from February 14, 2020 to September 30, 2020.


	Three months ended September 30,						Increase (Decrease)					Nine months ended September 30,						Increase (Decrease)
	2020			2019			2020 versus 2019					2020			2019			2020 versus 2019
Revenues:
New and used equipment sales	$	58.7		$	41.5		$	17.2		41.4	%	$	152.7		$	98.3		$	54.4		55.3	%
Parts sales		16.7			14.3			2.4		16.8	%		43.7			35.7			8.0		22.4	%
Service revenue		23.4			20.2			3.2		15.8	%		61.8			48.4			13.4		27.7	%
Rental revenue		12.2			12.0			0.2		1.7	%		34.2			26.9			7.3		27.1	%
Rental equipment sales		4.0			0.7			3.3		471.4	%		12.3			2.5			9.8		392.0	%
Net revenue	$	115.0		$	88.7		$	26.3		29.7	%	$	304.7		$	211.8		$	92.9		43.9	%

Cost of revenues:
New and used equipment sales		48.5			36.1			12.4		34.3	%		129.6			86.3			43.3		50.2	%
Parts sales		10.6			8.9			1.7		19.1	%		27.8			22.2			5.6		25.2	%
Service revenue		8.5			7.2			1.3		18.1	%		22.4			17.6			4.8		27.3	%
Rental revenue		2.2			1.6			0.6		37.5	%		6.0			4.2			1.8		42.9	%
Rental depreciation and amortization		5.4			4.5			0.9		20.0	%		14.5			10.2			4.3		42.2	%
Rental equipment sales		2.9			0.3			2.6		866.7	%		9.4			1.6			7.8		487.5	%
Cost of revenue	$	78.1		$	58.6		$	19.5		33.3	%	$	209.7		$	142.1		$	67.6		47.6	%

Gross profit	$	36.9		$	30.1		$	6.8		22.6	%	$	95.0		$	69.7		$	25.3		36.3	%

General and administrative expenses		31.7			23.8			7.9		33.2	%		80.7			57.7			23.0		39.9	%
Depreciation and amortization expense		1.0			0.4			0.6		150.0	%		2.5			1.4			1.1		78.6	%
Total general and administrative expenses	$	32.7		$	24.2		$	8.5		35.1	%	$	83.2		$	59.1		$	24.1		40.8	%

Income from operations	$	4.2		$	5.9		$	(1.7	)	(28.8	)%	$	11.8		$	10.6		$	1.2		11.3	%

Other income (expense)
Interest expense, floor plan payable – new equipment		(0.2	)		(0.6	)		0.4		(66.7	)%		(1.0	)		(1.4	)		0.4		(28.6	)%
Interest expense – other		(1.2	)		(0.7	)		(0.5	)	71.4	%		(3.3	)		(1.9	)		(1.4	)	73.7	%
Other income		—			0.3			(0.3	)	(100.0	)%		0.4			0.7			(0.3	)	(42.9	)%
Total other income (expense)	$	(1.4	)	$	(1.0	)	$	(0.4	)	40.0	%	$	(3.9	)	$	(2.6	)	$	(1.3	)	50.0	%

Net income	$	2.8		$	4.9		$	(2.1	)	(42.9	)%	$	7.9		$	8.0		$	(0.1	)	(1.3	)%

	Percent of Revenue						Percent of Revenue
Industrial Equipment	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Revenues:
New and used equipment sales		51.0	%		46.8	%		50.1	%		46.4	%
Parts sales		14.5	%		16.1	%		14.3	%		16.9	%
Service revenue		20.3	%		22.8	%		20.3	%		22.9	%
Rental revenue		10.6	%		13.5	%		11.2	%		12.7	%
Rental equipment sales		3.5	%		0.8	%		4.0	%		1.2	%
Net revenue		100.0	%		100.0	%		100.0	%		100.0	%

Cost of revenues:
New and used equipment sales		42.2	%		40.7	%		42.5	%		40.7	%
Parts sales		9.2	%		10.0	%		9.1	%		10.5	%
Service revenue		7.4	%		8.1	%		7.4	%		8.3	%
Rental revenue		1.9	%		1.8	%		2.0	%		2.0	%
Rental depreciation and amortization		4.7	%		5.1	%		4.8	%		4.8	%
Rental equipment sales		2.5	%		0.3	%		3.1	%		0.8	%
Cost of revenue		67.9	%		66.1	%		68.8	%		67.1	%

Gross profit		32.1	%		33.9	%		31.2	%		32.9	%

Revenues: Industrial Equipment segment revenues increased by 29.7% to $115.0 million for the three months ended September 30, 2020 as compared to the same period last year. Overall, revenue streams were up as a result of the Liftech, PeakLogix and Hilo acquisitions that closed in February 2020, June 2020 and July 2020, respectively. While we experienced an acute reduction in customer demand from the global COVID-19 pandemic in the second quarter of 2020, specifically in parts and service, we were able to rebound in the third quarter and both parts and service revenue lines increased by approximately $3.4 million each compared to the second quarter, or up by 28.3% and 19.3%, respectively.

Industrial Equipment segment revenues increased by 43.9% to $304.7 million for the nine months ended September 30, 2020 as compared to the same period last year. The year-over-year increase was mainly due to the contributions from the acquisitions of NITCO, Liftech, PeakLogix and Hilo that occurred between May 2019 and July 2020.

Industrial Equipment gross profit margins for the three months ended September 30, 2020 declined 1.8% to 32.1% compared to the same period in 2019. New equipment sales gross margin benefited from the addition ~~income on~~of PeakLogix to the ~~funds held~~sales mix in the ~~Trust Account may be released~~third quarter of 2020. As PeakLogix “design and build” higher margin business line realizes higher gross margin than the gross margin on new and allied products in our legacy business. Additionally, we realized better used equipment gross margin in the third quarter of 2020 when compared to usthe third quarter of 2019. We also realized a decline in rental revenue gross margin in the third quarter of 2020 which was the main driver in the overall depressed margin. This reduction in rental gross margin was the result of reduced quarter-over-quarter utilization of our rental fleet and the fixed depreciation on our Industrial rental fleet and an increase in repairs and maintenance and subleasing expense quarter-over-quarter as a percentage of revenue. Notably, overall, our gross profit for the three months ended September 30, 2020 increased by $9.2 million, or 33.2% versus the second quarter of 2020. This increase in gross profit is almost exclusively related to the increase in business activity we experienced once “stay at home” orders and related restrictions were relaxed near the end of the second quarter.

Industrial Equipment gross profit margins for the nine months ended September 30, 2020 declined 1.7% to 31.2% compared to the same period in 2019 for the aforementioned reasons.

General and administrative expenses: Industrial Equipment general and administrative (G&A) expenses increased by 8.5 million to $32.7 million for the three months ended September 30, 2020 as compared to the same period last year. This change was mainly driven by the addition of the G&A from the Industrial segment acquisitions Liftech, PeakLogix and Hilo. As business activity recovered in the third quarter of 2020, cost mitigation efforts related to COVID in the form of pay reductions, employee furlough programs and reductions in benefits ceased, causing an increase in G&A in the third quarter when compared to the second quarter.

Industrial Equipment general and administrative (G&A) expenses increased by 24.1 million to $83.2 million for the nine months ended September 30, 2020 as compared to the same period last year. This increase was primarily due to the inclusion of the G&A from the Industrial segment acquisitions, NITCO, Liftech, PeakLogix and Hilo.

Other Income (expense): Industrial Equipment other expense increased by $0.4 to ($1.4) million for the three months ended September 30, 2020 as compared to the same period last year. The majority of the quarter-over- quarter increase was the result of the addition of debt related to the Liftech, PeakLogix and Hilo acquisitions, as their assets were financed via our ~~franchise~~line of credit and ~~income taxes.~~floorplan financing facilities.

Industrial Equipment other expense increased by $1.3 million to ($3.9) million for the nine months ended September 30, 2020 as compared to the same period last year. The majority of the year-over-year increase was the result of the addition of debt related to the NITCO, Liftech, PeakLogix and Hilo acquisitions, as their assets were financed via our line of credit and floorplan financing facilities.

	Three months ended September 30,						Increase (Decrease)						Nine months ended September 30,						Increase (Decrease)
	2020			2019			2020 versus 2019						2020			2019			2020 versus 2019
Revenues:
New and used equipment sales	$	39.2		$	19.6		$	19.6			100.0	%	$	122.5		$	68.8		$	53.7		78.1	%
Parts sales		18.8			8.6			10.2			118.6	%		48.6			24.3			24.3		100.0	%
Service revenue		12.1			7.1			5.0			70.4	%		32.3			18.8			13.5		71.8	%
Rental revenue		20.0			15.8			4.2			26.6	%		49.2			40.0			9.2		23.0	%
Rental equipment sales		15.5			10.0			5.5			55.0	%		35.9			24.3			11.6		47.7	%
Net revenue	$	105.6		$	61.1		$	44.5			72.8	%	$	288.5		$	176.2		$	112.3		63.7	%

Cost of revenues:
New and used equipment sales		35.9			17.3			18.6			107.5	%		110.7			60.3			50.4		83.6	%
Parts sales		13.7			6.0			7.7			128.3	%		35.5			17.2			18.3		106.4	%
Service revenue		5.0			2.8			2.2			78.6	%		13.5			6.7			6.8		101.5	%
Rental revenue		3.2			2.7			0.5			18.5	%		8.8			7.2			1.6		22.2	%
Rental depreciation and amortization		13.8			9.2			4.6			50.0	%		32.6			22.7			9.9		43.6	%
Rental equipment sales		14.2			8.9			5.3			59.6	%		32.3			21.4			10.9		50.9	%
Cost of revenue	$	85.8		$	46.9		$	38.9			82.9	%	$	233.4		$	135.5		$	97.9		72.3	%

Gross profit	$	19.8		$	14.2		$	5.6			39.4	%	$	55.1		$	40.7		$	14.4		35.4	%

General and administrative expenses		24.9			13.4			11.5			85.8	%		60.4			36.8			23.6		64.1	%
Depreciation and amortization expense		0.8			0.1			0.7			700.0	%		2.0			0.4			1.6		400.0	%
Total general and administrative expenses	$	25.7		$	13.5		$	12.2			90.4	%	$	62.4		$	37.2		$	25.2		67.7	%

(Loss) income from operations	$	(5.9	)	$	0.7		$	(6.6	)		(942.9	)%	$	(7.3	)	$	3.5		$	(10.8	)	(308.6	)%

Other income (expense)
Interest expense, floor plan payable – new equipment		(0.3	)		(0.4	)		0.1			(25.0	)%		(0.8	)		(1.1	)		0.3		(27.3	)%
Interest expense – other		(2.4	)		(1.7	)		(0.7	)		41.2	%		(7.0	)		(4.9	)		(2.1	)	42.9	%
Other income		—			—			—		NA				0.3			0.2			0.1		50.0	%
Total other income (expense)	$	(2.7	)	$	(2.1	)	$	(0.6	)		28.6	%	$	(7.5	)	$	(5.8	)	$	(1.7	)	29.3	%

Net loss	$	(8.6	)	$	(1.4	)	$	(7.2	)		514.3	%	$	(14.8	)	$	(2.3	)	$	(12.5	)	543.5	%

	Percent of Revenue						Percent of Revenue
Construction Equipment	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Revenues:
New and used equipment sales		37.1	%		32.1	%		42.5	%		39.0	%
Parts sales		17.8	%		14.1	%		16.8	%		13.8	%
Service revenue		11.5	%		11.6	%		11.2	%		10.7	%
Rental revenue		18.9	%		25.9	%		17.1	%		22.7	%
Rental equipment sales		14.7	%		16.4	%		12.4	%		13.8	%
Net revenue		100.0	%		100.0	%		100.0	%		100.0	%

Cost of revenues:
New and used equipment sales		34.0	%		28.3	%		38.4	%		34.2	%
Parts sales		13.0	%		9.8	%		12.3	%		9.8	%
Service revenue		4.7	%		4.6	%		4.7	%		3.8	%
Rental revenue		3.0	%		4.4	%		3.1	%		4.1	%
Rental depreciation and amortization		13.1	%		15.1	%		11.3	%		12.9	%
Rental equipment sales		13.4	%		14.6	%		11.2	%		12.1	%
Cost of revenue		81.3	%		76.8	%		80.9	%		76.9	%

Gross profit		18.8	%		23.2	%		19.1	%		23.1	%

~~We do not believe we will need~~Revenues: Construction Equipment segment revenues increased by 72.8% to ~~raise additional funds other than~~$105.6 million for the ~~funds raised~~three months ended September 30, 2020 as compared to the same period last year. This increase was mainly attributable to the Flagler and Martin acquisitions that occurred in the ~~Public Offering on April 11,~~first and third quarter of 2020. Organically, we experienced an increase in the sale of equipment by 30.5% over the third quarter of 2019, parts and service increased by 14.6% over the same period in ~~order~~2019, despite the global COVID-19 pandemic that was still impacting the broader economy in the third quarter of 2020. However, organic rental revenues and utilization decreased in the third quarter of 2020, leading to ~~meet~~a 13.9% decrease in organic rental revenue when compared to the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking��in-depth due diligence 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,same period 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).~~

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 referredConstruction Equipment segment revenues increased by 63.7% to ~~as variable interest entities, which would have been established~~$288.5 million for the ~~purpose~~nine months ended September 30, 2020 as compared to the same period last year. This increase was primarily attributable to the favorable impact from the acquisitions of ~~facilitating off-balance sheet arrangements.~~Flagler and Martin businesses during first and third quarter of 2020, respectively. Organic rental utilization metrics were outpacing prior years before the impact of COVID-19 negatively impacted our rental utilization and, in turn, our rental revenues.

~~We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments~~Gross profit (GP):

Construction Equipment gross profit decreased by 4.5% to 18.8% in the three months ended September 30, 2020 from 23.2% compared to the same period in 2019. A decline in rental revenue gross margin was the main driver in the overall depressed margin. Rental margins decreased primarily due to the acquisition of ~~other entities, or entered into any non-financial agreements involving assets.~~Flagler in the first quarter of 2020. Flagler’s rental fleet, when compared to the rental fleet that existed in the third quarter of 2019, is more heavily weighted to larger capacity construction equipment which we depreciate at a higher rate than lower capacity construction equipment Secondarily, the combination of reduced quarter-over-quarter utilization of our rental fleet, due to COVID-19 and the fixed depreciation expense on certain product categories of our rental fleet also contributed to this reduction in gross margin. Despite parts margins being down quarter over quarter, we note that the 27.1% realized in the third quarter is in line with expectations and historic gross margin levels. Additionally, service gross margins, and parts

to a less extent, decreased quarter-over-quarter due to acquisition of Flagler in the first quarter of 2020, where the mix of service and parts revenue is more heavily weighted toward lower-margin warranty work and where best practices in the service department continue to be implemented. Notably, the service gross margin increased by 3.0% when compared to the second quarter of 2020. Additionally, in the third quarter of 2020 our used and rental equipment sales gross margins were below historic levels realized as the company used wholesale brokers to sell certain tranches of used equipment that was underutilized.

Construction Equipment gross profit decreased by 4.0% to 19.1% in the nine months ended September 30, 2020 from 23.1% compared to the same period in 2019. This decline in gross margins were largely driven by the same issues as described above for the reduction in the third quarter of 2020 gross margin when compared with the same period in 2019.

General and Administrative expenses: ~~Contractual Obligations~~Construction Equipment general and administrative (G&A) expenses increased by $12.2 million to $25.7 million for the three months ended September 30, 2020 as compared to the same period in 2019. The quarter over quarter increase was mainly attributable to the additional G&A as a result of the Flagler and Martin acquisitions. In addition to the acquisitions, the Construction equipment segment incurred $3.0 million stock compensation expense mainly due to the immediate vesting of the restricted stock units for the passing of its Construction Group President.

~~At March 31,~~Construction Equipment general and administrative (G&A) expenses increased by $25.2 million to $62.4 million for the nine months ended September 30, 2020 as compared to the same period in 2019. The year over year change was mainly driven by the aforementioned reasons.

Other Income (expense): Construction Equipment other expense increased by $0.6 million to ($2.7) million for the three months ended September 30, 2020 as compared to the same period in 2019. The quarter over quarter increase was mainly due to the interest expense respective to the Flagler and Martin acquisitions, as the assets were financed through our line of credit and floorplan financing facilities.

Construction Equipment other expense increased to ($7.5) million for the nine months ended September 30, 2020 as compared to ($5.8) million during the same period in 2019. This change was primarily driven by interest expense associated with the Flagler and Martin acquisitions, as these assets were financed via our line of credit and floorplan financing facilities.

Nine months ended September 30, 2020 compared with nine months ended September 30, 2019 ~~we did not have any long-term~~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, 2020, operating activities resulted in net cash used in operations of $44.7 million. Our reported net loss of $20.8 million, when adjusted for non-cash income and expense items, such as depreciation and amortization, former debt extinguishment, and the share-based payments, provided net cash inflows of $28.9 million. Changes in working capital ~~lease obligations,~~included a $102.8 million increase in inventories, $32.6 million in net payments on manufacturer floor plans, and an $8.6 million cash outflow in prepaid expense and other assets and other liabilities. Cash flows from operating ~~lease obligations or long-term~~activities were impacted by a $48.2 million favorable change in proceeds from the sale of rental equipment, a $6.2 million favorable change in accounts receivable, and a $16.0 million cash inflows from accounts payable, accrued expenses, customer deposits, and other liabilities. ~~On April 8,~~

For the nine months ended September 30, 2019, ~~we entered into~~the cash used in our operating activities was $4.0 million. Our reported net loss of $29.6 million, when adjusted for non-cash income and expense items, such as depreciation and amortization, paid-in-kind interest, and provision for losses on accounts receivable, provided positive cash flows of $37.3 million. Cash used in operating activities included $53.2 million cash outflows in inventories, an ~~administrative support agreement pursuant~~increase in accounts receivable by $14.2 million, a $5.3 million in net payments on manufacturer floor plans, a $1.3 million cash outflows in prepaid expense and other assets. Cash flows from operating activities was positively impacted by a $5.9 million favorable changes in accounts payable, accrued expenses, and other current liabilities and leases and other liabilities.

Cash Flow from Investing Activities. For the nine months ended September 30, 2020, our cash used in investing activities was $166.3 million. This was mainly due to ~~which we have agreed to pay an affiliate~~$128.8 million use of cash as a result of the ~~Sponsor a total~~recent acquisitions and $38.5 million for purchases of ~~$10,000 per month for office space, administrative~~rental equipment and ~~support services. Upon~~non-rental property and equipment.

For the ~~earlier~~nine months ended September 30, 2019, our cash used in investing activities was $85.6 million. The acquisition of NITCO totaled $65.6 million and purchases of rental equipment and non-rental property and equipment totaled $20.1 million.

Cash Flow from Financing Activities. For the nine months ended September 30, 2020, cash provided by financing activities was $211.1 million. The favorable impact was mainly due to $175.7 million proceeds from the completion of the ~~Initial Business Combination~~reverse recapitalization. Net proceeds under our lines of credits and floor plans with an unaffiliated source (i.e. a non-vendor) were $147.4 and $2.2 million, respectively. Net proceeds under long-term debt amounted to $149.4. Additionally, proceeds from disgorgement of short swing profits was $1.6 million. This was partially offset by payments related to the extinguishment of former debt, a line of credit and redemption of former shareholders’ notes payable all of which totaled $221.6 million, an extinguishment of a warrant liability of $29.6 million, expenditures of debt issuance costs of $2.7 million, repurchases of common stock of $5.9 million and a $5.4 million payment on long term debt and capital lease obligations.

For the nine months ended September 30, 2019, cash provided by financing activities was $90.2 million. Net proceeds under our lines of credit and floor plans with an unaffiliated source (i.e. a non-vendor) for the nine months ended September 30, 2019 were $49.4 million and $30.7 million, respectively. Additionally, net proceeds under long-term debt amounted to $10.9 million partially offset by payments on long term debt of $0.7 million.

The Company reported $0.1 million in cash for the nine months ended September 30, 2020.

In conjunction with the reverse recapitalization, effective February 14, 2020, the Company amended and restated its credit facility with its first lien lender by entering into the Fifth Amended and Restated ABL First Lien Credit Agreement (“Amended and Restated Credit Agreement” and the ~~Company’s liquidation, we will cease paying these monthly fees.~~facility thereunder, the “ABL Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein.

In connection with the Amended and Restated Credit Agreement, the Company amended and restated its floor plan facility with its first lien lender by entering into the Fifth Amended and Restated Floor Plan First Lien Credit Agreement (“Floor Plan Credit Agreement”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lender JP Morgan Chase Bank, N.A., as Administrative Agent, Sole Bookrunner and Sole Lead Arranger.

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

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

Line of ~~2.0% ($2,875,000), $2,500,000~~Credit and Floor Plan First Lien Lender

The Company has a revolving line of ~~which was~~credit with its first lien holder with advances on the line being supported by eligible accounts receivable, parts, and otherwise unencumbered new and used equipment inventory and rental equipment. The revolving line of credit has a maximum borrowing capacity of $300 million and interest cost is the London Interbank Offered Rate (“LIBOR”) plus an applicable margin or the CB Floating Rate, depending on the borrowing. As of September 30, 2020, the Company had an outstanding revolving line of credit balance of $140.5 million, excluding unamortized debt issuance costs.

The Company has a floor plan financing facility with its first lien lender to finance new and used inventory and rental fleet equipment. This floor plan has a maximum borrowing capacity of $40 million. At September 30, 2020, the Company had an outstanding balance on their first lien lender floor plan facility of $30.7 million, excluding unamortized debt issuance costs.

Original Equipment Manufacturer (“OEM”) Captive Lenders and Suppliers’ Floor Plans

OEM captive lender and suppliers’ floor plans payable are financing arrangements for new and used inventory and rental equipment. We have such arrangements with several OEM captive lenders and suppliers each with borrowing capacities ranging from $10 million to $82.0 million. Certain floor plans provide for a five to twelve-month interest only or deferred payment period. In addition, these floor plan agreements provide for interest or principal free terms at the supplier’s discretion. The Company routinely sells equipment that is financed under OEM captive lender floor plans prior to the original maturity date of the financing agreement. The related OEM captive lender floor plans payable is then paid at the ~~closing~~time the equipment being financed is sold.

Maximum borrowings under the floor plans and the revolving line of ~~the Public Offering~~credit are limited to $525 million. The total amount outstanding was $295.5 million, exclusive of debt issuance and ~~$375,000 was paid upon the closing~~deferred financings costs of ~~the overallotment.~~$1.6 million.

~~We have engaged B. Riley FBR, Inc. as advisors in~~In connection with the ~~Initial Business Combination~~reverse recapitalization, the Company entered into a new Note Purchase Agreement (the “Term Loan”) dated as of February 3, 2020, for the purposes of, among other things, (i) financing the reverse recapitalization, (ii) financing the acquisition of Flagler and Liftech, and (iii) providing for the repayment and refinance of a portion of the Company’s prior existing debt.

Effective February 14, 2020, the Company entered into a Note Purchase Agreement which comprised of a term loan in an aggregate principal amount of $155.0 million with its second lien lender through syndication, with an initial maturity date of August 2025. In connection with the new Note Purchase Agreement, the Company retired its existing term loan facility. The term loan is payable in quarterly installments of $1.9 million plus interest at LIBOR plus 8%. As of September 30, 2020, the effective interest rate was 9.8%. The loan is collateralized by substantially all assets of the Company.

Cash Requirements Related to ~~assist us in arranging meetings with stockholders to discuss a potential business combination~~Operations

Our principal sources of liquidity have been from cash provided by our service-related operations and the ~~target business’ attributes, introduce~~sales of new, used and rental fleet equipment along with rentals of such equipment, proceeds from the issuance of debt, and borrowings available under our lines of credit and floor plans. Our principal uses of cash have been to fund operating activities and working capital (including new and used equipment inventories), purchases of rental fleet equipment and property and equipment, fund payments due under lines of credit and flooring plans payable, fund acquisitions, and meet debt service requirements. In the future, we may 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 lines of credit 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 nine months ended September 30, 2020 was approximately $115.1 million, including $80.6 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 approximately $48.2 million for the nine months ended September 30, 2020 as our business model is to sell lightly used inventory to customers from our rental fleet so as 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 lines of credit and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business and other factors, some of which are beyond our control. Based on 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 lines of credit will be adequate to meet our future liquidity needs for the foreseeable future. As of September 30, 2020, we had $197.6 million of available borrowings under the revolving line of credit and floor plans.

We cannot provide absolute assurance that our future cash flow from operating activities will be sufficient to meet our long-term obligations and commitments. If we are unable to generate sufficient cash flow from operating activities in the future to service our indebtedness and to meet our other commitments, we will be required to adopt one or more alternatives, such as refinancing or restructuring our indebtedness, selling material assets or operations, or seeking to raise additional debt or equity capital. Given current economic and market conditions, including the volatility in the global capital markets, we cannot assure investors that any of these actions could be affected on a timely basis or on satisfactory terms or at all, or that these actions would enable us to ~~potential investors that~~continue to satisfy our capital requirements. In addition, our existing debt agreements, as well as any future debt agreements, contain or may ~~be interested~~contain restrictive covenants, which may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in ~~purchasing~~an event of default which, if not cured or waived, could result in the acceleration of all of our ~~securities, assist us in obtaining stockholder approval for our Initial Business Combination and assist us with~~debt.

In 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.

~~The preparation of~~consolidated financial statements ~~and related disclosures~~prepared in conformity with U.S. generally accepted accounting principles ~~generally accepted in the United States requires management~~(“GAAP”), we are required to make estimates and ~~assumptions~~judgments that affect the reported amounts of assets, liabilities, revenues, expenses and ~~liabilities, disclosure~~the related disclosures. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of ~~contingent~~a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. The Company also has other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results. For additional information, see our Annual Report on Form 10-K for the year ended December 31, 2019 and Registration Statement on Form S-1, initially filed with the SEC on March 25, 2020, respectively.

Goodwill is tested for impairment annually or more frequently if an event or circumstance indicates that an impairment loss may have been incurred. Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities ~~at the date~~to reporting units; assignment of goodwill to reporting units; determination of the ~~condensed financial statements,~~fair value of each reporting unit; and ~~income and expenses during~~an assumption as to the ~~periods reported. Actual results could materially differ from those estimates. We have identified~~form of the ~~following as our critical accounting policies:~~

transaction in which the reporting unit would be acquired by a market participant (either a taxable or nontaxable transaction).

We ~~comply~~estimate the fair value of our reporting units (which are our reportable segments) using a discounted cash flow methodology under an income approach, corroborating the results with ~~accounting~~a market approach based guideline-company methodology which analyzes the enterprise value (market capitalization plus interest-bearing liabilities) and ~~disclosure requirements~~operating metrics (e.g., EBITDA) of ~~Accounting Standards Codification (“ASC”) Topic 260, “Earnings Per Share.” Net loss per common share~~companies engaged in the same or similar line of business and compares those metrics to those of the Company. We believe the combination of these valuation approaches, yields the most appropriate evidence of fair value.

We review goodwill for impairment utilizing a one-step process in which we compare the fair value of each of our reporting units’ net assets to the respective carrying value of net assets. If the carrying value of a reporting unit’s net assets is ~~computed by dividing~~less than its fair value, then we do not recognize an impairment. If the carrying amount of a reporting unit’s net ~~loss by the weighted average number of common shares outstanding~~assets is greater than its fair value, we recognize a goodwill impairment 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 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 share in the earningsamount 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.

~~All~~excess of the ~~14,375,000 shares of Class A common stock sold as parts of~~net assets over the ~~Units in the Public Offering and in connection with the overallotment contain a redemption feature. In accordance with the~~ fair value.

Financial Accounting Standards Board (“FASB”) ~~ASC 480, redemption provisions~~guidance permits entities to first assess qualitative factors to determine whether it is more likely than not ~~solely within our control require~~that the ~~security~~fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to ~~be classified outside~~perform a quantitative goodwill impairment test.

After evaluating and weighing all relevant events and circumstances, as of ~~permanent equity. Ordinary liquidation events,~~September 30, 2020, the Company concluded there was no triggering event for a goodwill impairment test.

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

We measure the employee stock-based awards at their grant-date fair value using provisions of ~~FASB~~ ASC ~~480. Although~~718 – Stock Compensation and record compensation expense over the vesting period of the award. The Company made an accounting election upon adoption of ASU 2016-09 and will recognize forfeitures when occurred rather than estimating expected forfeitures. The Company treated equity awards granted to non-employee directors similarly to the equity awards to employees upon adoption of ASU 2018-07.

As of September 30, 2020, we did not have ~~not specified a maximum redemption threshold, our amended and restated certificate~~any “off-balance-sheet arrangements”, as defined in Item 303(a)(4)(ii) 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.~~Regulation S-K.

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.

~~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~~Qualitative Disclosures About Market Risk.

As of March 31, 2019, we were not subject to any material market or interest rate risk. On April 11, 2019, the net proceeds of the Public Offering and the Private Placement Warrants, including amounts in the Trust Account, were invested in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act. Due to the short-term nature of these investments, we believe there was no associated material exposure to interest rate risk.

~~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.~~

~~Disclosure~~We maintain disclosure controls and procedures ~~are controls~~(as defined in Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) and ~~other procedures~~15d-15(e)) that are designed to ~~ensure~~provide reasonable assurance that information required to be disclosed by us in ~~our~~the reports ~~filed~~that we file or ~~submitted~~submit 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~~forms, and ~~procedures include, without limitation, controls and procedures designed to ensure~~ that such information ~~required to be disclosed in company reports filed or submitted under the Exchange Act~~ is accumulated and communicated to 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~~Any controls and ~~15d-15 under~~procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the ~~Exchange Act,~~desired control objectives. Our management, with the 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, 2020. Based ~~upon their~~on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2020, our disclosure controls and procedures ~~(as defined~~were effective to accomplish their objectives at the reasonable assurance level.

Changes in ~~Rules 13a-15(e) and 15d-15(e) under the Exchange Act)~~Internal Control over Financial Reporting

~~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, 2020 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.

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.

As a smaller reporting company, we are not required to provide the information required by this item. However, the discussion of our business and operations should be read together with the Risk Factors set forth in the Prospectus that ~~could cause~~constitutes part of our ~~actual results to differ materially from those in this Quarterly Report are any of the risks described in our prospectus dated April 8, 2019~~registration statement on Form S-1 filed with the SEC on ~~April 9, 2019. Any~~March 25, 2020, the Prospectus that constitutes part 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 Report~~Registration Statement on Form ~~10-Q, there have been no material changes to the risk factors disclosed in our prospectus dated April 8, 2019~~S-1, filed with the SEC on ~~April 9,~~October 26, 2020 and our Annual Report on Form 10-K for the year ended December 31, 2019. ~~However,~~Such risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flow, strategies or prospects in a material and adverse manner.

In addition, the following risk factor supplements the “Risk Factors” included in the Prospectus that constitutes part of our registration statement on Form S-1 filed with the SEC on March 25, 2020, the Prospectus that constitutes part of our Registration Statement on Form S-1, filed with the SEC on October 26, 2020 and our Annual Report on Form 10-K for the year ended December 31, 2019 and should be read in conjunction with these risk factors:

The Company’s financial condition and results of operations has been adversely affected and may continue to be adversely affected by public health issues, including epidemics or pandemics such as COVID-19. We face various risks related to public health issues, including epidemics, pandemics, and other outbreaks, including the global outbreak of COVID-19.

The economic slowdown attributable to COVID-19 has led to a global decrease in equipment utilization and leasing activity and this decline could become more substantial if the pandemic results in a sustained recession or other financial crisis. Moreover, as a result of “stay at home” orders and consumer reaction to the pandemic, our sales and service operations may have to again curtail normal activities which would then lead to reduced revenue related to products and services we ~~may disclose changes~~sell and lease.

The full impact of the COVID-19 pandemic on our financial condition and results of operations will depend on future developments, such as the ultimate duration, scope and severity of the continued outbreak, its impact on our customers and suppliers and whether the pandemic leads to ~~such factors or disclose additional factors from time to time~~recessionary conditions in our ~~future filings~~key markets. Moreover, our supply chain may be disrupted because of COVID-19 impact to the operations of the part and equipment manufacturers who supply us with products.

The COVID-19 pandemic may also exacerbate other risks disclosed in the section entitled “Risk Factors” in the Prospectus that constitutes part of our registration statement on Form S-1 filed with the ~~SEC.~~SEC on March 25, 2020, the Prospectus that constitutes part of our Registration Statement on Form S-1, filed with the SEC on October 26, 2020 and Annual Report on Form 10-K for the year ended December 31, 2019.

~~Unregistered Sales~~On August 18, 2020, Robert T. Chiles, our President – Construction Group, passed away. Mr. Chiles was the holder of ~~Equity Securities~~

~~On April 11, 2019, simultaneously with the closing~~restricted stock units (“RSUs”) for 390,000 shares 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”).

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,~~at his passing these RSU’s became fully vested 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 forconverted into 390,000 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~~common stock. On September 30, 2020, the Company purchased from the estate of ~~$143,750,000. B. Riley FBR, Inc. served as~~Mr. Chiles the ~~sole book-running manager~~390,000 shares for ~~the offering.~~cash consideration of $3.0 million. 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) receivedCompany used a portion of the ~~underwriting discounts and commissions related~~proceeds of an $8.0 million life insurance policy that the Company maintained on the life of Mr. Chiles to ~~thePublic Offering. After deducting~~fund the ~~underwriting discounts and commissions and incurred offering costs, the total net proceeds from our Public Offering and the sale~~purchase 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.shares from Mr. Chiles’ estate.

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

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.

~~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

~~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 A common stock, par value $0.0001 per share~~	~~BRPM~~	~~New York Stock Exchange~~
	Warrants, each exercisable for one share of ~~Class A~~ common stock	~~BRPM.WS~~	ALTG WS		The New York Stock Exchange

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