NOTE 14 — BUSINESS COMBINATIONS

PeakLogix

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

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

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


Cash	$	3.0
Accounts Receivable		4.6
Inventory		0.4
Other assets		0.2
Property and equipment		0.2
Goodwill		6.1

Total Assets	$	14.5

Accounts payable		(1.5	)
Accrued expenses		(0.1	)
Other current liabilities		(3.9	)

Total Liabilities	$	(5.5	)

Net Assets Acquired	$	9.0

Assets acquired net of cash	$	6.0

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


Cash consideration paid	$	5.7
Promissory Note		1.0
Earn-out liability		2.3

Total purchase price	$	9.0

Flagler

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

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

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.

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


Cash	$	0.4
Accounts Receivable		15.1
Inventory		37.5
Prepaid and other assets		0.5
Property and equipment		50.7
Intangible Assets		14.0
Goodwill		5.0

Total Assets	$	123.2

Floor plan payable		(29.0	)
Accounts payable		(14.0	)
Accrued expenses		(4.1	)
Other liabilities		(0.3	)
Total Liabilities	$	(47.4	)

Net Assets Acquired	$	75.8

Assets acquired net of cash	$	75.4

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.

Liftech

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

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

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

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


Accounts receivable	$	4.4
Inventory		9.6
Other current & non-current assets		1.0
Property, plant, and equipment		5.9
Intangible Assets		0.7
Goodwill		2.0

Total Assets	$	23.6

Floor plan payable		(3.5	)
Accounts payable and accrued expenses		(1.6	)
Other liabilities		(0.1	)

Total Liabilities	$	(5.2	)

Net Assets Acquired	$	18.4

Northland Industrial Truck Co., Inc.

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

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

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

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


Accounts receivable	$	13.9
Other current & non-current assets		0.5
Inventory		35.7
Guaranteed purchase obligation asset		9.7
Property, plant, and equipment		18.8
Identifiable intangible assets		3.3
Goodwill		1.0

Total Assets	$	82.9

Accounts payable		(5.2	)
Guaranteed purchase obligation liability		(9.7	)
Capital lease obligations		(1.3	)
Other liabilities		(1.1	)

Total Liabilities	$	(17.3	)

Net Assets Acquired	$	65.6

Pro forma financial information

The Company completed the Flagler acquisition on February 14, 2020. Therefore, operating results of Flagler are included in the Company’s Consolidated Statement of Operations from February 14, 2020. Pursuant to ASC 805, pro forma disclosures should be reported whenever the year or interim period of the acquisition is presented. Since the Flagler acquisition was completed in the period ended March 31, 2020, the pro forma information below gives effect to the Flagler acquisition as if the acquisition occurred on January 1, 2020.


	6 Months ended June 30, 2020
	The Company			Flagler			Total
Total revenues	$	372.6		$	25.8		$	398.4
Net (loss) income	$	(21.1	)	$	(0.1	)	$	(21.2	)

Pro forma financial information

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.


	6 Months ended June 30, 2019											3 Months ended June 30, 2019
	The Company			NITCO		Flagler			Total			The Company		NITCO			Flagler			Total
Total revenues	$	238.2		$	45.2	$	91.4		$	374.8		$	135.9	$	11.5		$	49.6		$	197.0
Net (loss) income	$	(2.2	)	$	1.0	$	(1.4	)	$	(2.6	)	$	0.4	$	(0.2	)	$	(1.5	)	$	(1.3	)

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