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

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

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

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

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

The number of shares of the registrant’s common stock, no par, outstanding at November ~~2, 2020~~5, 2021 was ~~19,791,614.~~19,935,341.

This Quarterly Report on Form 10-Q filed by Manitex International, Inc. speaks as of September 30, ~~2020~~2021 unless specifically noted otherwise. Unless otherwise indicated, Manitex International, Inc., together with its consolidated subsidiaries, is hereinafter referred to as “Manitex,” Inc” the “Registrant,” “us,” “we,” “our” or the “Company.”

Certain information in this Quarterly Report includes forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995). These statements relate to, among other things, the Company’s expectations, beliefs, intentions, future strategies, future events or future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In addition, when included in this Quarterly Report or in documents incorporated herein by reference the words “may,” “expects,” “should,” “intends,” “anticipates,” “believes,” “plans,” “projects,” “estimates” and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. We have based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Such risks and uncertainties, many of which are beyond our control, include, without limitation, those described below and in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019,~~2020, in the section entitled “Item 1A. Risk Factors”:

The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020 and in this Quarterly Report on Form 10-Q are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. We do not undertake, and expressly disclaim, any obligation to update this forward-looking information, except as required under applicable law.

	September 30, 2020			December 31, 2019			September 30, 2021			December 31, 2020
ASSETS
Current assets
Cash	$	23,331		$	23,327		$	17,336		$	17,161
Cash – restricted		231			217			228			240
Trade receivables (net)		29,916			34,725			31,831			30,418
Other receivables		997			1,033			192			179
Inventory (net)		58,641			57,818			64,452			56,055
Prepaid expense and other current assets		4,392			4,706			2,976			2,218
Current assets of discontinued operations		180			1,591
Total current assets		117,688			123,417			117,015			106,271
Total fixed assets, net of accumulated depreciation of $18,551 and $16,818 at September 30, 2020 and December 31, 2019, respectively		18,531			19,035
Total fixed assets, net of accumulated depreciation of $18,499 and $17,444 at September 30, 2021 and December 31, 2020, respectively								17,026			18,723
Operating lease assets		2,160			2,174			3,484			4,068
Intangible assets (net)		15,752			17,032			13,407			15,671
Goodwill		26,699			32,635			26,476			27,472
Other long-term assets		168			281			1,143			1,143
Deferred tax asset		415			441
Long-term assets of discontinued operations		—			413
Deferred tax assets								247			247
Total assets	$	181,413		$	195,428		$	178,798		$	173,595
LIABILITIES AND EQUITY
Current liabilities
Accounts payable							$	41,666		$	32,429
Accrued expenses								8,720			7,909
Related party payables, net								124			52
Notes payable	$	17,832		$	18,212			14,383			16,510
Convertible note - related party (net)		7,455			7,323
Convertible note (net)		7,976			—
Current portion of finance lease obligations		352			476			380			344
Current portion of operating lease liabilities		761			813
Accounts payable		29,337			29,593
Accounts payable related parties		33			228
Accrued expenses		9,265			9,138
Current portion of operating lease obligations								998			1,167
Customer deposits		1,669			1,493			3,101			2,363
Deferred income liability		3,747			—			—			3,747
Current liabilities of discontinued operations		215			800
Total current liabilities		78,642			68,076			69,372			64,521
Long-term liabilities
Revolving term credit facilities		5,000			—
Notes payable (net)		15,368			19,446
Revolving term credit facilities, net								12,704			12,606
Notes payable, net								12,684			13,625
Finance lease obligations (net of current portion)		4,311			4,584			3,931			4,221
Non-current operating lease liabilities		1,398			1,361
Convertible note (net)		—			14,760
Non-current operating lease obligations								2,486			2,901
Deferred gain on sale of property		607			667			527			587
Deferred tax liability		959			721			1,497			1,333
Other long-term liabilities		5,795			5,913			4,190			4,892
Long-term liabilities of discontinued operations		—			350
Total long-term liabilities		33,438			47,802			38,019			40,165
Total liabilities		112,080			115,878			107,391			104,686
Commitments and contingencies
Equity
Preferred Stock—Authorized 150,000 shares, 0 shares issued or outstanding at September 30, 2020 and December 31, 2019		—			—
Common Stock—no par value 25,000,000 shares authorized, 19,794,316 and 19,713,185 shares issued and outstanding at September 30, 2020, and December 31, 2019, respectively		131,276			130,710
Preferred Stock—Authorized 150,000 shares, 0 shares issued or outstanding at September 30, 2021 and December 31, 2020								—			—
Common Stock—no par value 25,000,000 shares authorized, 19,933,130 and 19,821,090 shares issued and outstanding at September 30, 2021, and December 31, 2020, respectively								132,171			131,455
Paid in capital		2,870			2,793			3,057			3,025
Retained deficit		(61,977	)		(50,253	)		(60,371	)		(63,863	)
Accumulated other comprehensive loss		(2,836	)		(3,700	)		(3,450	)		(1,708	)
Total equity		69,333			79,550			71,407			68,909
Total liabilities and equity	$	181,413		$	195,428		$	178,798		$	173,595

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Net revenues	$	36,466		$	50,599		$	122,314		$	162,403		$	50,935		$	36,466		$	158,148		$	122,314
Cost of sales		29,807			42,164			99,877			131,478			42,899			29,807			129,867			99,877
Gross profit		6,659			8,435			22,437			30,925			8,036			6,659			28,281			22,437
Operating expenses
Research and development costs		788			497			2,246			1,890			772			788			2,357			2,246
Selling, general and administrative expenses		6,462			7,808			21,226			26,485			7,419			6,462			23,232			21,226
Impairment of intangibles		—			1,539			6,722			1,539			—			—			—			6,722
Total operating expenses		7,250			9,844			30,194			29,914			8,191			7,250			25,589			30,194
Operating (loss) income		(591	)		(1,409	)		(7,757	)		1,011
Other (expense) income
Operating income (loss)														(155	)		(591	)		2,692			(7,757	)
Other income (expense)
Interest expense		(825	)		(1,121	)		(2,833	)		(3,298	)		(490	)		(825	)		(1,573	)		(2,833	)
Interest income		6			41			80			161			1			6			7			80
Gain on Paycheck Protection Program loan forgiveness														—			—			3,747			—
Gain on extinguishment of debt		595			—			595			—			—			595			—			595
Change in fair value of securities held		—			216			—			5,454
Foreign currency transaction loss		(229	)		(307	)		(671	)		(718	)		(121	)		(229	)		(421	)		(671	)
Other expense		(341	)		(11	)		(497	)		(22	)		(102	)		(341	)		(117	)		(497	)
Total other (expense) income		(794	)		(1,182	)		(3,326	)		1,577
(Loss) income before income taxes from continuing operations		(1,385	)		(2,591	)		(11,083	)		2,588
Total other income (expense)														(712	)		(794	)		1,643			(3,326	)
Income (loss) before income taxes from continuing operations														(867	)		(1,385	)		4,335			(11,083	)
Income tax expense (benefit) from continuing operations		62			1,874			(191	)		2,449			234			62			843			(191	)
Net (loss) income from continuing operations		(1,447	)		(4,465	)		(10,892	)		139
Net income (loss) from continuing operations														(1,101	)		(1,447	)		3,492			(10,892	)
Discontinued operations
Loss from operations of discontinued operations		(120	)		(7,302	)		(831	)		(7,805	)		—			(120	)		—			(831	)
Income tax expense		4			84			1			39			—			4			—			1
Loss from discontinued operations		(124	)		(7,386	)		(832	)		(7,844	)		—			(124	)		—			(832	)
Net loss		(1,571	)		(11,851	)		(11,724	)		(7,705	)
(Loss) earnings Per Share
Net income (loss)														(1,101	)		(1,571	)		3,492			(11,724	)
Income (loss) per share
Basic
(Loss) earnings from continuing operations	$	(0.07	)	$	(0.23	)	$	(0.55	)	$	0.01
Income (loss) from continuing operations													$	(0.06	)	$	(0.07	)	$	0.18		$	(0.55	)
Loss from discontinued operations	$	(0.01	)	$	(0.38	)	$	(0.04	)	$	(0.40	)		—		$	(0.01	)		—		$	(0.04	)
Net loss	$	(0.08	)	$	(0.60	)	$	(0.59	)	$	(0.39	)
Net income (loss)													$	(0.06	)	$	(0.08	)	$	0.18		$	(0.59	)
Diluted
(Loss) earnings from continuing operations	$	(0.07	)	$	(0.23	)	$	(0.55	)	$	0.01
Income (loss) from continuing operations													$	(0.06	)	$	(0.07	)	$	0.17		$	(0.55	)
Loss from discontinued operations	$	(0.01	)	$	(0.38	)	$	(0.04	)	$	(0.40	)		—		$	(0.01	)		—		$	(0.04	)
Net loss	$	(0.08	)	$	(0.60	)	$	(0.59	)	$	(0.39	)
Net income (loss)													$	(0.06	)	$	(0.08	)	$	0.17		$	(0.59	)
Weighted average common shares outstanding
Basic		19,778,225			19,690,233			19,758,241			19,684,521			19,917,276			19,778,225			19,888,319			19,758,241
Diluted		19,778,225			19,690,233			19,758,241			19,715,072			19,917,276			19,778,225			19,970,681			19,758,241

For the three and nine months ended

2020

2019

Number of common shares outstanding

Balance at December 31

19,713,185

19,645,773

Employee 2004 and 2019 incentive plan grant

49,884

39,822

Repurchase to satisfy withholding and cancelled

(2,949
)

(2,882
)
Balance at March 31

19,760,120

19,682,713

Employee 2004 and 2019 incentive plan grant

7,360

7,160

Balance at June 30

19,767,480

19,689,873

Employee 2004 incentive plan grant

27,068

2,945

Repurchase to satisfy withholding and cancelled

(232
)

(882
)
Balance at September 30

19,794,316

19,691,936

Common Stock

Balance at December 31

$
130,710

$
130,260

Employee 2004 and 2019 incentive plan grant

352

251

Repurchase to satisfy withholding and cancelled

(13
)

(19
)
Balance at March 31

$
131,049

$
130,492

Employee 2004 incentive plan grant

86

83

Balance at June 30

$
131,135

$
130,575

Employee 2004 incentive plan grant

142

22

Repurchase to satisfy withholding and cancelled

(1
)

(5
)
Balance at September 30

$
131,276

$
130,592

Paid in Capital

Balance at December 31

$
2,793

$
2,674

Share-based compensation

222

159

Employee 2004 and 2019 incentive plan grant

(352
)

(251
)
Balance at March 31

$
2,663

$
2,582

Share-based compensation

203

141

Employee 2004 and 2019 incentive plan grant

(86
)

(83
)
Balance at June 30

$
2,780

$
2,640

Share-based compensation

233

148

Employee 2004 incentive plan grant

(143
)

(22
)
Balance at September 30

$
2,870

$
2,766

Retained Deficit

Deficit at December 31

$
(50,253
)

$
(41,761
)
Net (loss) income

(7,476
)

910

Balance at March 31

$
(57,729
)

$
(40,851
)
Net (loss) income

(2,677
)

3,236

Deficit at June 30

$
(60,406
)

$
(37,615
)
Net loss

(1,571
)

(11,851
)
Deficit at September 30

$
(61,977
)

$
(49,466
)
Accumulated Other Comprehensive Loss

Deficit at December 31

$
(3,700
)

$
(3,169
)
Loss on foreign currency translation

(508
)

(620
)
Balance at March 31

$
(4,208
)

$
(3,789
)
Gain on foreign currency translation

319

264

Deficit at June 30

$
(3,889
)

$
(3,525
)
Gain (loss) on foreign currency translation

1,053

(1,074
)
Deficit at September 30

$
(2,836
)

$
(4,599
)

	Outstanding shares			Common Stock			APIC			Retained Deficit			AOCI (Loss)			Total
Balance at December 31, 2020		19,821,090		$	131,455		$	3,025	��	$	(63,863	)	$	(1,708	)	$	68,909
Net loss		—			—			—			(772	)		—			(772	)
Loss on foreign currency translation		—			—			—			—			(1,198	)		(1,198	)
Employee incentive plan grant		85,883			584			(584	)		—			—			—
Repurchase to satisfy withholding and cancelled		(6,183	)		(48	)		—			—			—			(48	)
Share-based compensation		—			—			299			—			—			299
Balance at March 31, 2021		19,900,790		$	131,991		$	2,740		$	(64,635	)	$	(2,906	)	$	67,190
Net income		—			—			—			5,365			—			5,365
Gain (loss) on foreign currency translation		—			—			(26	)		—			222			196
Employee incentive plan grant		5,940			44			(44	)		—			—			—
Share-based compensation		—			—			278			—			—			278
Balance at June 30, 2021		19,906,730		$	132,035		$	2,948		$	(59,270	)	$	(2,684	)	$	73,029
Net loss		—			—			—			(1,101	)		—			(1,101	)
Gain (loss) on foreign currency translation		—			—			6			—			(766	)		(760	)
Employee incentive plan grant		26,400			136			(136	)		—			—			—
Share-based compensation		—			—			239			—			—			239
Balance at September 30, 2021		19,933,130		$	132,171		$	3,057		$	(60,371	)	$	(3,450	)	$	71,407

	Outstanding shares			Common Stock			APIC			Retained Deficit			AOCI (Loss)			Total
Balance at December 31, 2019		19,713,185		$	130,710		$	2,793		$	(50,253	)	$	(3,700	)	$	79,550
Net loss		—			—			—			(7,476	)		—			(7,476	)
Loss on foreign currency translation		—			—			—			—			(508	)		(508	)
Employee incentive plan grant		49,884			352			(352	)		—			—			—
Repurchase to satisfy withholding and cancelled		(2,949	)		(13	)		—			—			—			(13	)
Share-based compensation		—			—			222			—			—			222
Balance at March 31, 2020		19,760,120		$	131,049		$	2,663		$	(57,729	)	$	(4,208	)	$	71,775
Net loss		—			—			—			(2,677	)		—			(2,677	)
Gain on foreign currency translation		—			—			—			—			319			319
Employee incentive plan grant		7,360			86			(86	)		—			—			—
Share-based compensation		—			—			203			—			—			203
Balance at June 30, 2020		19,767,480		$	131,135		$	2,780		$	(60,406	)	$	(3,889	)	$	69,620
Net loss		—			—			—			(1,571	)		—			(1,571	)
Gain on foreign currency translation		—			—			—			—			1,053			1,053
Employee incentive plan grant		27,068			142			(143	)		—			—			(1	)
Repurchase to satisfy withholding and cancelled		(232	)		(1	)		—			—			—			(1	)
Share-based compensation		—			—			233			—			—			233
Balance at September 30, 2020		19,794,316		$	131,276		$	2,870		$	(61,977	)	$	(2,836	)	$	69,333

Nine months ended September 30,

2020

2019

Cash flows from operating activities:

Net loss

$
(11,724
)

$
(7,705
)
Adjustments to reconcile net loss to cash used for operating activities:

Depreciation and amortization

3,190

3,592

Gain on sale of discontinued operations

(376
)

—

Gain on extinguishment of debt

(595
)

—

Changes in allowances for doubtful accounts

18

445

Changes in inventory reserves

(578
)

1,130

Deferred income taxes

(21
)

1,985

Amortization of deferred debt issuance costs

161

119

Amortization of debt discount

454

315

Change in value of interest rate swaps

—

(1
)
Tradename impairment

137

2,310

Goodwill impairment

6,585

3,165

Customer relationship impairment

—

2,637

Disposal of assets

1

—

Change in value of securities held

—

(5,454
)
Share-based compensation

657

447

Adjustment to deferred gain on sales and lease back

—

(95
)
Loss on disposal of assets

—

95

Reserves for uncertain tax provisions

(131
)

92

Changes in operating assets and liabilities:

Decrease in accounts receivable

5,845

7,885

Increase in inventory

742

(12,235
)
Increase in prepaid expenses

536

(1,598
)
Decrease in other assets

—

220

(Decrease) increase in accounts payable*

(1,764
)

(3,831
)
Increase in deferred income

3,747

—

Increase in accrued expenses

(216
)

379

Increase (decrease) other current liabilities

123

(715
)
Decrease in other long-term liabilities

(176
)

(107
)
Net cash provided by (used for) operating activities

6,615

(6,925
)

Cash flows from investing activities:

Proceeds from the sale of investment

—

7,614

Proceeds from the sale of discontinued operations (Note 20)

1,610

—

Purchase of property and equipment

(619
)

(1,522
)
Investment in intangibles other than goodwill

—

(7
)
Net cash provided by investing activities

991

6,085

Cash flows from financing activities:

Borrowings on revolving term credit facility

8,500

—

Payments on revolving credit facility

(3,500
)

—

Payments on convertible debt

(7,000
)

—

Net (payments) borrowings working capital facilities (See Note 11)

(136
)

23

New borrowings—other

—

588

Note payments

(5,882
)

(931
)
Shares repurchased for income tax withholding on share-based compensation

(14
)

(25
)
Payments on capital lease obligations

(397
)

(310
)
Net cash used for financing activities

(8,429
)

(655
)
Net decrease in cash and cash equivalents

(823
)

(1,495
)
Effect of exchange rate changes on cash

806

(601
)
Cash and cash equivalents at the beginning of the year**

23,579

22,348

Cash and cash equivalents at end of period**

$
23,562

$
20,252

See Note 1 for supplemental cash flow disclosures

	Nine months ended September 30,
	2021			2020
Cash flows from operating activities:
Net income (loss)	$	3,492		$	(11,724	)
Adjustments to reconcile net income (loss) to cash used for operating activities:
Depreciation and amortization		3,339			3,190
Gain on sale of discontinued operations		—			(376	)
Gain on Paycheck Protection Program loan forgiveness		(3,747	)		—
Changes in allowances for doubtful accounts		135			18
Changes in inventory reserves		(1,089	)		(578	)
Deferred income taxes		223			(21	)
Amortization of deferred debt issuance costs		98			161
Amortization of debt discount		111			454
Gain on forward currency contract		(385	)		—
Write down of intangibles		—			137
Write down of goodwill		—			6,585
Gain on extinguishment of debt		—			(595	)
Share-based compensation		816			657
Adjustment to deferred gain on sales and lease back		(60	)		—
Reserves for uncertain tax provisions		—			(131	)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(1,550	)		5,775
(Increase) decrease in other receivable		(16	)		70
(Increase) decrease in inventory		(8,921	)		742
(Increase) decrease in prepaid expenses		(738	)		536
(Increase) decrease in other assets		(63	)		1
Increase (decrease) in accounts payables and related party payables		10,872			(1,764	)
Increase in deferred income		—			3,747
Increase (decrease) in accrued expenses		1,385			(216	)
Increase in other current liabilities		871			123
(Decrease) in other long-term liabilities		(515	)		(176	)
Net cash provided by operating activities		4,258			6,615

Cash flows from investing activities:

Proceeds from the sale of discontinued operations		—			1,610
Purchase of property and equipment		(666	)		(619	)
Investment in intangible assets		(51	)		—
Net cash (used in) provided for investing activities		(717	)		991
Cash flows from financing activities:
Borrowings on revolving term credit facility		—			8,500
Payments on revolving credit facility		—			(3,500	)
Payments on convertible debt		—			(7,000	)
Net borrowings on working capital facilities		(1,303	)		(136	)
New borrowings—other		748			—
Note payments		(1,083	)		(5,882	)
Shares repurchased for income tax withholding on share-based compensation		(48	)		(14	)
Payments on capital lease obligations		(254	)		(397	)
Net cash used in financing activities		(1,940	)		(8,429	)
Net increase in cash and cash equivalents		1,601			(823	)
Effect of exchange rate changes on cash		(1,438	)		806
Cash and cash equivalents at the beginning of the year		17,401			23,579
Cash and cash equivalents at end of period	$	17,564		$	23,562
See Note 1 for supplemental cash flow disclosures

The unaudited Condensed Consolidated Balance Sheets at September 30, ~~2020~~2021 and December 31, ~~2019~~2020 and the related Condensed Consolidated Statements of Operations, Condensed Consolidated Statement of Comprehensive ~~Loss,~~Income (Loss), Condensed Consolidated Statements of Shareholders’ Equity, and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial condition, results of operations and cash flows of the Company for the interim periods. Interim results may not be indicative of results to be realized for the entire year. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020. The Condensed Consolidated Balance Sheet as of December 31, ~~2019~~2020 was derived from our audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”).

The Company is a leading provider of engineered lifting ~~solutions and operates as~~solutions. The Company reports in a single ~~reportable~~business segment ~~with~~and has 4 operating ~~segments. Operating activities~~segments, under which there are ~~conducted through the following wholly-owned subsidiaries:~~5 reporting units. The Company has integrated Manitex ~~Inc. (“Manitex”),~~and Badger Equipment Company (“Badger”), reporting units into 1 operating segment as a substantial portion of the sales from Badger are intercompany sales to Manitex. While the Company continues to report Badger as a separate reporting unit, its results are combined with Manitex and reported at a combined Manitex level. The Company designs, manufactures and distributes a diverse group of products that serve different functions and are used in a variety of industries.

Manitex markets a comprehensive line of boom trucks, truck cranes and sign cranes. Manitex’s boom trucks and crane products are primarily used for industrial projects, energy exploration and infrastructure development, including roads, bridges and commercial construction.

Badger is a manufacturer of specialized rough terrain cranes and material handling products. Badger primarily serves the needs of the construction, municipality and railroad industries.

PM Oil and Steel S.p.A. (“PM” or “PM Group”), formerly known as PM Group ~~S.p.A,~~S.p.A., is a leading Italian manufacturer of truck- mounted hydraulic knuckle boom cranes with a 50-year history of technology and innovation, and a product range spanning more than 50 models. PM is also a manufacturer of truck-mounted aerial platforms with a diverse product line and an international client base. Through its consolidated subsidiaries, ~~(“PM” or “PM Group”),~~ PM Group has locations in Modena, Italy; Valencia, Spain; Arad, Romania; Chassieu, France; Buenos Aires, Argentina; Santiago, Chile; Singapore and Querétaro, Mexico.

Manitex Valla ~~S.r.l.~~S.r.L. (“Valla”), produces a full range of precision pick and carry industrial cranes using electric, diesel, and hybrid power options. Its cranes offer wheeled or tracked, and fixed or swing boom configurations, with special applications designed specifically to meet the needs of its customers. These products are sold internationally through dealers and into the rental distribution channel.

Crane and Machinery, Inc. (“C&M”)~~, and~~ is a distributor of the Company’s products as well as other cranes. Crane and Machinery Leasing, Inc. (“C&M Leasing”). rents equipment manufactured by the Company as well as a limited amount of equipment manufactured by third parties. Although C&M is a distributor of Terex Corporation’s (“Terex”) cranes, C&M’s primary business is the distribution of products manufactured by the Company.

The Company is continuing to closely monitor the ~~spread and~~ impact of the COVID-19 pandemic and ~~are~~is continually assessing its potential effects on our business and our financial performance as well as the businesses of our customers and ~~vendors.~~vendors, including the impact that we may experience if and when the pandemic subsides. The Company’s supply chain disruptions and related logistical bottlenecks that have impacted our ability to meet strong industrial demand and have also increased costs related to shipping, warehousing, and working capital management. While the Company is doing everything it can to mitigate these expenses and the associated timing issues, certain segments – such as truck chassis – have been more impacted than others. Where appropriate and feasible, we have implemented pricing adjustments to protect margins and, in tandem, are building inventory to meet our customer requirements. In addition, the Company is actively managing costs and working to further streamline operations where needed. The Company cannot predict the duration or severity of the COVID-19 pandemic, and we cannot reasonably estimate the financial impact that the COVID-19 outbreak will have on our results and significant estimates going forward.

Transactions for the periods ended September 30, ~~2020~~2021 and ~~2019~~2020 are as follows:

Prior to the quarter ended September 30, 2017, the Company owned a 51% interest in ASV Holdings, Inc., which was formerly known as A.S.V., LLC (“ASV”). On May 11, 2017, in anticipation of an initial public offering, ASV converted from an LLC to a C-Corporation and the Company’s 51% interest was converted to 4,080,000 common shares of ASV. On May 17, 2017, in connection with its initial public offering, ASV sold 1,800,000 of its own shares and the Company sold 2,000,000 shares of ASV common stock and reduced its investment in ASV to a 21.2% interest. ASV was deconsolidated and was recorded as an equity investment starting with the quarter ended September 30, 2017. In February 2018, the Company sold an additional 1,000,000 shares of ASV that it held which reduced the Company’s investment in ASV to approximately 11.0%. In September 2019, the Company received cash merger consideration for its remaining 1,080,000 shares of ASV and no longer has an investment in ASV.

Sabre is located in Knox, Indiana and manufactures a comprehensive line of specialized mobile tanks for liquid and solid storage and containment solutions with capacities from 8,000 to 21,000 gallons. Its mobile tanks are sold to specialized independent tank rental companies and through the Company’s existing dealer network. The tanks are used in a variety of end markets such as petrochemical, waste management and oil and gas drilling.

On March 4, 2020, the Company’s Board of Directors approved the exploration by management of various strategic alternatives for Sabre, including the possibility of a transaction involving the sale of all or part of Sabre’s business and assets, to determine whether such a transaction would provide value to shareholders. The criterion of asset held for sale has been met and Sabre will be reported as discontinued operations.

On August 21, 2020, the Company ~~signed~~entered into an Asset Purchase Agreement ~~with Sabre Acquisition, LLC~~ to sell ~~all the assets and certain liabilities~~Manitex Sabre, Inc. to an affiliate of ~~Sabre subject to the agreement~~Super Steel, LLC for ~~a selling price at closing~~cash proceeds of ~~approximately $1,500,~~$1.5 million, subject to certain adjustments based on closing date accounts receivable and inventory. Accordingly, Manitex Sabre, Inc. is reported as a discontinued operation for 2020.

In addition to the cash proceeds from sale of ~~$1,500~~$1.5 million in cash received, the Company may receive a maximum royalty and earnout payments of approximately ~~$2,900~~$2.9 million for years 2021 thru 2023 if certain revenue criteria are met. The Company will account for the contingent consideration as a gain in accordance with ASC 450. Under this approach, we will recognize the contingent consideration in earnings after the contingency is resolved. See ~~note 20 Discontinued Operations~~Note 17 for ~~further discussion.~~additional discussion related to the sale of Sabre’s business and assets.

The Company consolidates all entities that we control by ownership of a majority voting interest. Additionally, there are situations in which consolidation is required even though the usual condition of consolidation (ownership of a majority voting interest) does not apply. Generally, this occurs when an entity holds an interest in another business enterprise that was achieved through arrangements that do not involve voting interests, which results in a disproportionate relationship between such entity's voting interests in, and its exposure to the economic risks and potential rewardssummary of the ~~other business enterprise. This disproportionate relationship results~~Company’s significant accounting policies is presented to assist in what is known as a variable interest, and the entity in which we have this interest is referred to as a Variable Interest Entity (“VIE”). An enterprise must consolidate a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both (1) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

~~The Company eliminates from~~understanding the Company’s financial ~~results~~statements. The financial statements and notes are representations of the Company’s management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

For purposes of the statement of cash flows, the Company considers all ~~significant intercompany transactions.~~short-term securities purchased with maturity dates of three months or less to be cash equivalents. The cash in the Company's U.S. banks (primarily CIBC) is not fully insured by the FDIC due to the statutory limit of $250.

Certain of the Company’s lending arrangements require the Company to post collateral or maintain minimum cash balances in escrow. These cash amounts are reported as current assets on the balance sheets based on when the cash will be contractually released. Total restricted cash was ~~$231~~$228 and ~~$217~~$240 at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Accounts receivable are stated at the amounts the Company’s customers are invoiced. Accounts receivable is reduced by an allowance for amounts that may become uncollectible in the future. The Company is exposed to credit losses through the sale of products and services. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customer trade accounts receivables. Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers’ financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and future economic and market conditions surrounding the ongoing COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted at this time. The Company’s estimate for the allowance for doubtful accounts related to trade receivables includes evaluation of specific accounts where the Company has information that the customer may have an inability to meet its financial obligations. The Company had allowances for doubtful accounts of $681 and $686 at September 30, 2020 and December 31, 2019, respectively.

The Company classifies assets (or disposal groups comprised of assets and liabilities) as held for sale when they are expected to be recovered primarily through sale rather than through continuing use. They are stated at the lower of carrying amount or fair value less costs to sell. Upon reclassification, we cease to depreciate or amortize non-current assets classified as held for sale.

A discontinued operation is a component of our business that represents a separate major line of business or geographical area of operation that has been disposed of or is held for sale and a strategic shift that will have a major effect on our operations and financial results. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income (loss) is revised as if the operation had been discontinued from the start of the comparative period. We have elected to not revise unaudited condensed consolidated statements of cash flows to split operating, investing and financing activities between continuing and discontinued operations, but instead provide certain required cash flow information. The Company will account for the contingent consideration as a gain in accordance with ASC 450. Under this approach, we will recognize the contingent consideration in earnings after the contingency is resolved. As part of the discontinued operations classification, we review the allocation of corporate expenses, interest expense and entity-wide goodwill and intangible assets. In addition, income taxes are calculated on a stand-alone basis for both continuing and discontinued operations.

~~See Note 20 to the unaudited condensed consolidated financial statements included elsewhere in this quarterly report for a more detailed discussion of assets held for sale and discontinued operations.~~

Inventory consists of stock materials and equipment stated at the lower of cost (first in, first out) or net realizable value. All equipment classified as inventory is available for sale. The Company records excess and obsolete inventory reserves. The estimated reserve is based upon specific identification of excess or obsolete inventories. Selling, general and administrative expenses are expensed as incurred and are not capitalized as a component of inventory.

Warranty costs are accrued at the time revenue is recognized. The Company’s products are typically sold with a warranty covering defects that arise during a fixed period of time. The specific warranty offered is a function of customer expectations and competitive forces. The Equipment Distribution division does not accrue for warranty costs at the time of sales, as they are reimbursed by the manufacturers for any warranty that they provide to their customers.

A liability for estimated warranty claims is accrued at the time of sale. The liability is established using historical warranty claim experience. Historical warranty experience is, however, reviewed by management. The current provision may be adjusted to take into account unusual or non-recurring events in the past or anticipated changes in future warranty claims. Adjustments to the initial warranty accrual are recorded if actual claim experience indicates that adjustments are necessary. Warranty reserves are reviewed to ensure critical assumptions are updated for known events that may impact the potential warranty liability.

The Company has elected to account for the Paycheck Protection Program (PPP) loan as a government grant and as such, the loan was recorded as a deferred income liability on the balance sheet and when the loan will be forgiven the offset will be recorded against the related expenses on the income statement. On the statement of cash flows, the loan has been recorded in cash provided by operating activities.

The Company enters into derivative instruments to manage its exposure to interest rate risk related to certain foreign term loans. Derivatives are initially recognized at fair value at the date the contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in current earnings immediately unless the derivative is designated and effective as a hedging instrument, in which case the effective portion of the gain or loss is recognized and is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged instrument affects earnings. The Company’s interest rate swap contracts are held by the PM Group and are intended to manage the exposure to interest rate risk related to certain term loans that PM Group has with certain financial institutions in Italy. These contracts have been determined not to be hedge instruments under ASC 815-10.

In determining whether liabilities should be recorded for pending litigation claims, the Company must assess the allegations and the likelihood that it will successfully defend itself. When the Company believes it is probable that it will not prevail in a particular matter, it will then make an estimate of the amount of liability based, in part, on the advice of legal counsel.

The Company’s provision for income taxes consists of U.S. and foreign taxes in amounts necessary to align the Company’s year-to-date tax provision with the effective rate that the Company expects to achieve for the full year. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. The effective tax rate is based upon the Company’s anticipated earnings both in the U.S. and in foreign jurisdictions.

In assessing the realizability of deferred tax assets, the Company evaluates whether it is more-likely-than-not (more than 50%) that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can be utilized. We assess all positive and negative evidence when determining the amount of the net deferred tax assets that are more-likely-than-not to be realized. This evidence includes, but is not limited to, prior earnings history, schedule reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Significant weight is given to positive and negative evidence that is objectively verifiable. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, we establish a valuation allowance.

Reporting “Comprehensive Income” requires reporting and displaying comprehensive income and its components. Comprehensive income includes, in addition to net earnings, other items that are reported as direct adjustments to shareholders’ equity. Currently, the comprehensive income adjustment required for the Company consists of a foreign currency translation adjustment, which is the result of consolidating its foreign subsidiaries.

Beginning with the quarter ended September 30, 2017, the Company accounted for its 21.2% investment in ASV under the equity method of accounting. Under the equity method, the Company’s share of the net income (loss) of ASV was recognized as income (loss) in the Company’s statement of operations and added to the investment account, and dividends received from ASV were treated as a reduction of the investment account. The Company reported ASV’s earnings on a one quarter lag as there was no assurance ASV would report earnings in time to be included in the Company’s financial statements for any given reporting period.

Between February 26 and 28, 2018, the Company sold 1,000,000 shares of ASV stock, reducing the Company’s investment in ASV to approximately 11.0%. During the quarter ended March 31, 2018, the Company:

~~In September 2019, the Company received cash merger consideration for its remaining 1,080,000 shares of ASV and no longer has an investment in ASV. See Notes 8 and 19.~~

Marketable equity securities are valued at fair market value based on the closing price of the stock on the date of the balance sheet. Gains and losses related to fair value adjustments of marketable equity securities are recorded into income each reporting period.

The Company records the amount of shipping and handling costs billed to customers as revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment costs and are included in cost of sales.

GAAP guidance requires the use of highly inflationary accounting for countries whose cumulative three-year inflation exceeds 100 percent. In the second quarter of 2018, published inflation indices indicated that the three-year cumulative inflation in Argentina exceeded 100 percent, and as of July 1, 2018, we elected to adopt highly inflationary accounting for our subsidiary in Argentina (“PM Argentina”). Under highly inflationary accounting, PM Argentina’s functional currency became the Euro (its parent company’s reporting currency), and its income statement and balance sheet have been measured in Euros using both current and historical rates of exchange. The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in other (income) and expense, net and was not material. As of September 30, 2020, PM Argentina had a small net peso monetary position. Net sales of PM Argentina were less than 5 percent of our consolidated net sales for the nine months ended September 30, 2020 and 2019, respectively.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes Topic 740-Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740. The effective date for ASU 2019-12 will be the first quarter of fiscal year 2021 and early adoption is permitted. Adoption of Topic 740 is not expected to have a material effect on the Company’s consolidated financial statements.

In March 2020, the FASB issued guidance under ASC 848, Reference Rate Reform. This guidance provides optional expedients and exceptions to account for debt, leases, contracts, hedging relationships and other transactions that reference LIBOR or another reference rate if certain criteria are met. The guidance is effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are currently evaluating the potential effects of the adoption of this guidance on our Consolidated Financial Statements.

~~There have been no other accounting pronouncements issued but not yet adopted by us which are expected to have a material impact on our Consolidated Financial Statements.~~

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” (“ASU 2019-04”). ASU 2019-04 provides narrow scope amendments for Topics 326, 815 and 825. The effective date was the first quarter of fiscal year 2020 and early adoption was permitted. The Company adopted this guidance as of January 1, 2020. The adoption of this guidance did not have a significant impact on our operating results. There was no adjustment to retained earnings as a result of the adoption of this guidance.

In September 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”). ASU 2016-13 sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. The guidance in this standard replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to certain off-balance sheet credit exposures. Subsequently, the FASB issued the following standards related to ASU 2016-13: ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses,” ASU 2019-05, “Financial Instruments-Credit Losses (Topic 326) Targeted Transition Relief,” and ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses,” which provided additional guidance and clarity to ASU 2016-13 (collectively, the “Credit Loss Standard”). The effective date for these standards was the first quarter of fiscal year 2020 and early adoption was permitted. The Credit Loss Standard was applied using a modified retrospective approach. The Company adopted this guidance as of January 1, 2020. The adoption of this guidance did not have a significant impact on our operating results.

~~Except as noted above, the guidance issued by the FASB during the current year is not expected to have a material effect on the Company’s consolidated financialstatements.~~

Revenue is recognized when obligations under the terms of the contract with our customer are satisfied; generally, this occurs with the transfer of control of our equipment, parts or installation services (typically completed within one day), which occurs at a point in time. Equipment can be redirected during the manufacturing phase such that over time revenue recognition is not appropriate. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Our contracts are non-cancellable and returns are only allowed in limited ~~instances through Crane & Machinery, Inc.~~instances. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The expected costs associated with our base warranties continue to be recognized as expense when the products are sold and do not constitute a separate performance obligation.

For instances where equipment and installation services are sold together, the Company accounts for the equipment and installation services separately. The consideration (including any discounts) is allocated between the equipment and installation services based on their stand-alone selling prices. The stand-alone selling prices are determined based on the prices at which the Company separately sells the equipment.

In some instances, the Company fulfills its obligations and bills the customer for the work performed but does not ship the goods until a later date. These arrangements are considered bill-and-hold transactions. In order to recognize revenue on the bill-and-hold transactions, the Company ensures the customer has requested the arrangement, the product is identified separately as belonging to the customer, the product is ready for shipment to the customer in its current form, and the Company does not have the ability to direct the product to a different customer. A portion of the transaction price is not allocated to the custodial services due to the immaterial value assigned to that performance obligation.

Payment terms offered to customers are defined in contracts and purchase orders and do not include a significant financing component. At times, the Company may offer discounts which are considered variable consideration however, the Company applies the constraint guidance when determining the transaction price to be allocated to the performance obligations.

Accounts receivable are stated at the amounts the Company’s customers are invoiced and do not bear interest. The Company ~~generates~~has adopted a policy consistent with U.S. GAAP for the periodic review of its accounts receivable to determine whether the establishment of an allowance for doubtful accounts is warranted based on the Company’s assessment of the collectability of the accounts. The Company established an allowance for bad debt of $2.6 million at September 30, 2021 and December 31, 2020. The Company also has in some instances a security interest in its accounts receivable until payment is received.

Property and equipment are stated at cost or the fair market value at the date of acquisition for property and equipment acquired in connection with the acquisition of a company. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation of property, and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Depreciation expense for the three and nine months ended September 30, 2021 were $518 and $1,614, respectively. Depreciation expense for the three and nine months ended September 30, 2020 were $487 and $1,500.

The Company capitalizes certain costs related to patent technology. Additionally, a substantial portion of the purchase price related to the Company’s acquisitions has been assigned to patents or unpatented technology, trade name, customer backlog, and customer relationships. Under the guidance, Other Intangible Assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. The Company recognized $0.1 million in impairment related to tradenames during the nine months ended September 30, 2020. NaN impairment expense was recognized for the three months ended September 30, 2020. NaN impairment expense was recognized for the three and nine months ended September 30, 2021.

The Company’s methodology for allocating the purchase price of acquisitions is based on established valuation techniques that reflect the consideration of a number of factors, including valuations performed by third-party appraisers when appropriate. Goodwill is measured as the excess of the cost of an acquired entity over the fair value assigned to identifiable assets acquired and liabilities assumed.

The Company annually tests goodwill for impairment on the first day of its fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company also performs an interim review for indicators of impairment each quarter to assess whether an interim impairment review is required for any reporting unit. As part of its interim reviews, management analyzes potential changes in the value of individual reporting units based on each reporting unit’s operating results for the period compared to expected results as of the prior year’s annual impairment test. In addition, management considers how other key assumptions, including discount rates and expected long-term growth rates, used in the last annual impairment test, could be impacted by changes in market conditions and economic events.

The Company recognized $6.6 million in impairment related to goodwill during the nine months ended September 30, 2020. NaN impairment expense was recognized for the three months ended September 30, 2020. NaN impairment expense was recognized for the three and nine months ended September 30, 2021.

Inventory consists of stock materials and equipment stated at the lower of cost (first in, first out) or net realizable value. All equipment classified as inventory is available for sale. The Company records excess and obsolete inventory reserves. The estimated reserve is based upon specific identification and/or historical experience of excess or obsolete inventories. Selling, general and administrative expenses are expensed as incurred and are not capitalized as a component of inventory.

Warranty costs are accrued at the time revenue ~~through its principal subsidiaries:~~

~~Manitex, Inc.~~ ~~(“Manitex”) markets a comprehensive line of boom trucks, truck cranes and sign cranes. Manitex’s boom trucks and crane~~is recognized. The Company’s products are ~~primarily~~typically sold with a warranty covering defects that arise during a fixed period of time. The specific warranty offered is a function of customer expectations and competitive forces.

A liability for estimated warranty claims is accrued at the time of sale. The liability is established using historical warranty claim experience. The current provision may be adjusted to take into account unusual or non-recurring events in the past or anticipated changes in future warranty claims. Adjustments to the initial warranty accrual are recorded if actual claim experience indicates that adjustments are necessary.

As of September 30, 2021 and December 31, 2020, accrued warranties were $1,421 and $1,292, respectively.

During April 2020, the Company entered a loan transaction pursuant to which the Company received proceeds of $3.7 million under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying companies and is administered by the U.S. Small Business Administration (“SBA”).

The PPP loan was evidenced by a promissory note between the Company and CIBC bank. The promissory note had a two-year term, accrued interest at the rate of 1.0% per annum, and was prepayable at any time without payment of any premium. NaN payments of principal or interest were due during the six-month period beginning on the date of the promissory note. Beginning on the seventh month following the date of the promissory note, we were required to make 18 monthly payments of principal and interest.

Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. However, at least 75 percent of the PPP loan proceeds must be used for ~~industrial projects, energy exploration~~eligible payroll costs. The terms of any forgiveness may also be subject to further requirements in any regulation and ~~infrastructure development, including, roads, bridges and commercial construction.~~guidelines the SBA may adopt.

~~Badger Equipment~~During June 2021, the Company ~~(“Badger”) is a manufacturer of specialized rough terrain cranes and material handling products. Badger primarily serves~~ received notice from the ~~needs~~CIBC bank that CIBC had received confirmation from the SBA that the application for forgiveness of the ~~construction, municipality~~PPP loan had been approved. The loan forgiveness request of $3.7 million was applied to the Company’s entire outstanding PPP loan balance from CIBC bank.

The Company recorded the forgiveness as Gain on Paycheck Protection Program loan forgiveness in Other Income (Expense) on the Condensed Consolidated Statement of Operations. The gain on loan forgiveness is not subject to U.S. taxation. This deductible permanent difference is offset by a change in the U.S. valuation allowance and ~~railroad industries.~~ therefore has no impact on the effective tax rate.

~~PM Oil and Steel S.p.A~~ (“PM” or “PM Group”), formerly known as PM Group S.p.A., is a leading Italian manufacturer of truck mounted hydraulic knuckle boom cranes with a 50-year history of technology and innovation, and a product range spanning more than 50 models.

~~Manitex Valla S.r.l.’s (“Valla”)~~ product line of industrial cranes is a full range of precision pick and carry cranes using electric, diesel, and hybrid power options. Its cranes offer wheeled or tracked, and fixed or swing boom configurations, with special applications designed specifically to meet the needs of its customers. These products are sold internationally through dealers and into the rental distribution channel.

~~Crane and Machinery, Inc. (“C&M”)~~ ~~is a distributor~~The financial statements of the Company’s ~~products~~non-U.S. subsidiaries are translated using the current exchange rate for assets and liabilities and the weighted-average exchange rate for the year for income and expense items. Resulting translation adjustments are recorded to accumulated other comprehensive income (OCI) as a component of shareholders’ equity.

The Company converts receivables and payables denominated in other than the Company’s functional currency at the exchange rate as of the balance sheet date. The resulting transaction exchange gains or losses, except for certain transaction gains or loss related to intercompany receivable and payables, are included in other income and expense. Transaction gains and losses related to intercompany receivables and payables not anticipated to be settled in the foreseeable future are excluded from the determination of net income and are recorded as a translation adjustment (with consideration to the tax effect) to accumulated other comprehensive income (OCI) as a component of shareholders’ equity.

When the Company enters into forward currency exchange contracts it does so such that the exchange gains and losses on the assets and liabilities that are being hedged, which are denominated in a currency other than the reporting units’ functional currency, would be

offset by the changes in the market value of the forward currency exchange contracts it holds. The forward currency exchange contracts that the Company has to offset existing assets and liabilities denominated in other than the reporting units’ functional currency have been determined not to be considered a hedge. The Company records the forward currency exchange contracts at its market value with any associated gain or loss being recorded in current earnings. Both realized and unrealized gains and losses related to forward currency contracts are included in current earnings and are reflected in the Condensed Consolidated Statements of Operations in the other income (expense) section on the line titled foreign currency transaction loss.

Advertising costs are expensed as incurred and were $213 and $487 for the three and nine months ended September 30, 2021, respectively. Advertising costs were $120 and $354 for the three and nine months ended September 30, 2020, respectively.

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions. Employees in Italy are entitled to Trattamento di Fine Rapporto (“TFR”), commonly referred to as an employee leaving indemnity, which represents deferred compensation for employees in the private sector. Under Italian law, an entity is obligated to accrue for TFR on an individual employee basis payable to each individual upon termination of employment (including both voluntary and involuntary dismissal). The expense is recognized in the personnel costs, either in Selling, General, and Administrative expense or Cost of Goods Sold, in the Condensed Consolidated Statements of Operations and the accrual is recorded in other long-term liabilities in the Condensed Consolidated Balance Sheets.

In determining whether liabilities should be recorded for pending litigation claims, the Company must assess the allegations and the likelihood that it will successfully defend itself. When the Company believes it is probable that it will not prevail in a particular matter, it will then record an estimate of the amount of liability based, in part, on advice of legal counsel.

The Company accounts for income taxes under the provisions of ASC 740 “Income Taxes,” which requires recognition of income taxes based on amounts payable with respect to the current year and the effects of deferred taxes for the expected future tax consequences of events that have been included in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial accounting and tax basis of assets and liabilities, as well as ~~Terex Corporation’s~~for operating losses and tax credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets when it is more-likely-than-not a tax benefit will not be realized. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income prior to the expiration of any net operating loss carryforwards. See Note 12, Income Taxes, for further details.

The Jobs Act also establishes Global Intangible Low-Taxed Income (“~~Terex”~~GILTI”) ~~rough terrain~~provisions that impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company has elected to recognize GILTI as a period cost as incurred, therefore there are no deferred taxes recognized for basis differences that are expected to impact the amount of the GILTI inclusion upon reversal.

ASC 740 also prescribes a recognition threshold and ~~truck cranes. Crane~~measurement attribute for the financial statement recognition and ~~Machinery Leasing, Inc.’s (“C&M Leasing”) rents equipment manufactured by the Company~~measurement of a tax position taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company records interest and penalties related to income tax matters in the provision for income taxes.

Comprehensive income includes, in addition to net earnings, other items that are reported as direct adjustments to shareholders’ equity. Currently, the comprehensive income adjustment required for the Company is a ~~limited~~foreign currency translation adjustment, the result of consolidating its foreign subsidiary.

The Company records the amount of ~~equipment manufactured~~shipping and handling costs billed to customers as revenue. The cost incurred for shipping and handling is included in the cost of sales.

Debt issuance costs incurred in securing the Company’s financing arrangements are capitalized and amortized over the term of the associated debt. Deferred financing costs associated with long-term debt are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discount. Deferred financing costs associated with revolving lines of credit are included with Revolving term credit facilities on the Company’s Condensed Consolidated Balance Sheets.

In accordance with ASC 842-10 Sales-Leaseback Transactions, the Company has recorded a deferred gain in relationship to the sale and leaseback of one of the Company’s operating facilities. As such, the gains have been deferred and are being amortized on a straight- line basis over the life of the lease.

Basic Earnings per Share (“EPS”) was computed by ~~third parties. Although C&M is a distributor of Terex rough terrain and truck cranes, C&M’s primary business is the distribution of products manufactured~~dividing net income (loss) by the ~~Company.~~ weighted average number of common shares outstanding during the period.

~~For each~~The number of shares related to options, warrants, restricted stock, convertible debt and similar instruments included in diluted EPS is based on the “Treasury Stock Method” prescribed in ASC 260-10, Earnings per Share. This method assumes the theoretical repurchase of shares using proceeds of the ~~subsidiaries, various products~~respective stock option or warrant exercised, and for restricted stock, the amount of compensation cost attributed to future services which has not yet been recognized, and the amount of current and deferred tax benefit, if any, that would be credited to additional paid in capital upon the vesting of the restricted stock, at a price equal to the issuer’s average stock price during the related earnings period. Accordingly, the number of shares includable in the calculation of EPS in respect of the stock options, restricted stock, and similar instruments is dependent on this average stock price and will increase as the average stock price increases.

In accordance with ASC 718 Compensation-Stock Compensation, share-based payments to employees, including grants of restricted stock units, are measured at fair value as of the date of grant and are expensed in the Condensed Consolidated Statements of Operation over the service period (generally the vesting period).

GAAP guidance requires the use of highly inflationary accounting for countries whose cumulative three-year inflation exceeds 100 percent. Under highly inflationary accounting, PM Argentina’s functional currency became the Euro (its parent company’s reporting currency), and its income statement and balance sheet have been measured in Euros using both current and historical rates of exchange. The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in other (income) and expense, net and was not material. As of September 30, 2021, PM Argentina had an insignificant net peso monetary position. Net sales of PM Argentina were less than 5 percent of our consolidated net sales for the nine months ended September 30, 2021 and year ended December 31, 2020.

In March 2020, the FASB issued guidance under ASC 848, Reference Rate Reform. This guidance provides optional expedients and exceptions to account for debt, leases, contracts, hedging relationships and other transactions that reference LIBOR or another reference rate if certain criteria are met. The guidance is effective immediately and may be ~~sold separately~~applied prospectively to contract modifications made and hedging relationships entered into or ~~together with installation services. Further, equipment sales come with a standard warranty that is not sold separately. Additionally, each~~evaluated on or before December 31, 2022. We are currently evaluating the potential effects of the ~~subsidiaries sells parts~~adoption of this guidance on our Consolidated Financial Statements.

In January 2021, the FASB issued ASU 2021-01, which refines the scope of ASC 848 and clarifies some of its guidance as part of the FASB’s monitoring of global reference rate reform activities. The ASU permits entities to ~~its customers.~~elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculating price alignment interest (PAI) in connection with reference rate reform activities under way in global financial markets (the “discounting transition”). We are currently evaluating the potential effects of the adoption of this guidance on our Consolidated Financial Statements.

There have been no other accounting pronouncements issued, but not yet adopted by us, which are expected to have a material impact on our Condensed Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes Topic 740-Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740. The effective date for ASU 2019-12 was the first quarter of fiscal year 2021 and the Company adopted this guidance as of January 1, 2021. The adoption of this guidance did not have a significant impact on our operating results.

The following table disaggregates our revenue for the three and nine months ended September 30, ~~2020~~2021 and ~~2019:~~2020:

The Company attributes revenue to different geographic areas based on where items are shipped to or services are performed. The following table provides detail of revenues by geographic area for the three and nine months ended September 30, ~~2020~~2021 and ~~2019:~~2020:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2020

2019

2020

2019

United States

$
14,754

$
29,291

$
55,746

$
83,959

Canada

1,976

1,164

5,789

12,958

Italy

5,932

5,201

15,713

16,813

Chile

1,968

2,976

5,315

7,798

France

1,986

1,827

7,079

6,037

Other

1,886

1,563

4,957

5,571

Argentina

1,397

1,758

3,693

5,648

United Kingdom

1,477

1,553

4,281

4,300

Spain

1,078

689

2,574

3,081

Germany

275

671

2,383

2,822

Finland

306

386

2,203

2,233

Mexico

105

604

890

2,343

Romania

313

98

1,076

1,113

Peru

161

507

303

1,241

Hong Kong

106

135

150

842

Singapore

44

48

1,082

685

Israel

466

24

1,298

609

Czech Republic

301

503

804

1,016

Netherlands

676

596

1,645

1,106

Ireland

48

13

141

416

Martinique

9

67

185

217

China

3

-

247

125

Morocco

85

27

123

118

Denmark

28

26

82

94

Turkey

75

62

194

125

United Arab Emirates

84

148

1,978

205

Bahrain

-

-

35

55

Indonesia

-

37

51

87

Saudi Arabia

20

13

65

61

Russia

21

-

369

37

Puerto Rico

696

286

1,090

320

Belgium

121

85

256

111

South Africa

2

4

69

19

Kuwait

—

—

0

1

Qatar

-

1

56

1

Malaysia

65

151

365

151

Ukraine

1

85

26

85

Thailand

1

—

1

—

$
36,466

$
50,599

$
122,314

$
162,403

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
United States		19,078	$	14,754	$	60,900	$	55,746
Italy		7,984		5,932		24,536		15,713
Canada		5,982		1,976		14,307		5,789
Chile		3,339		1,968		9,677		5,315
United Kingdom		2,633		1,477		6,317		4,281
France		1,763		1,986		8,217		7,079
Other		10,156		8,373		34,194		28,391
Total Revenue	$	50,935	$	36,466	$	158,148	$	122,314

The sources of the Company’s revenues are summarized below for the three and nine months ended September 30, ~~2020~~2021 and ~~2019:~~2020:

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses.

At times, the Company may require an upfront deposit related to its contracts. In instances where an upfront deposit has been received by the Company and the revenue recognition criteria have not yet been met, the Company records a contract liability in the form of a customer deposit, which is classified as a short-term liability on the balance sheet. That customer deposit is deferred until the revenue recognition criteria have been met, at which time, the customer deposit is recognized into revenue.

The following table summarizes changes in customer deposits ~~are~~for the nine months ended September 30 as follows:

4. ~~Financial Instruments—Marketable Securities, Forward Currency Exchange Contracts and Interest Rate Swap Contracts~~Fair Value Measurements

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020 by level within the fair value hierarchy. As required by ASC 820-10, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The following is summary of items that the Company measures at fair value on a recurring basis:

	Fair Value at September 30, 2020								Fair Value at September 30, 2021
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Forward currency exchange contracts									$	—	$	118	$	—	$	118
Total current assets at fair value									$	—	$	118	$	—	$	118
Liabilities:
PM contingent liabilities	$	—	$	—	$	328	$	328
Valla contingent consideration		—		—		215		215	$	—	$	—	$	212	$	212
Forward currency exchange contracts		—		53		—		53
Total recurring liabilities at fair value	$	—	$	53	$	543	$	596	$	—	$	—	$	212	$	212

	Fair Value at December 31, 2019								Fair Value at December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Liabilities:
PM contingent liabilities	$	—	$	—	$	314	$	314
Valla contingent consideration		—		—		205		205	$	—	$	—	$	224	$	224
Forward currency exchange contracts		—		99		—		99		—		267		—		267
Total liabilities at fair value	$	—	$	99	$	519	$	618	$	—	$	267	$	224	$	491

ASC 820-10 classifies the inputs used to measure fair value into the following hierarchy:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Fair value of the forward currency contracts is determined on the last day of each reporting period using observable inputs, which are supplied to the Company by the foreign currency trading operation of its bank and are Level 2 items.

The Company’s risk management objective is to use the most efficient and effective methods available to us to minimize, eliminate, reduce or transfer the risks which are associated with fluctuation of exchange rates between the Euro, Chilean peso and the U.S. dollar.

When the Company receives a significant order in a currency other than the operating unit’s functional currency, management may evaluate different options that are available to mitigate future currency exchange risks. As of September 30, 2020, the Company had 0 outstanding forward currency contracts that were in place to hedge future sales. Therefore, there are currently 0 unrealized pre-tax gains or losses which will be reclassified from other comprehensive income into earnings during the next 12 months.

~~In addition, the~~The Company enters into forward currency exchange contracts ~~in relationship~~ such that the exchange gains and losses on ~~certain~~the assets and liabilities denominated in ~~a currency~~ other than the reporting units’ functional currency would be offset by the changes in the market value of the forward currency exchange contracts it holds. The forward currency exchange contracts that the Company has to offset existing assets and liabilities denominated in other than the reporting units’ functional currency have been determined not to be considered a hedge under ASC 815-10. The Company records the forward currency exchange contracts at its market value with any associated gain or loss being recorded in current earnings. Both realized and unrealized gains and losses related to forward currency contracts are included in current earnings and are reflected in the Condensed Consolidated Statements of Operations in the other income (expense) section on the line titled foreign currency transaction loss. Items denominated in other than a reporting unit functional currency include certain intercompany receivables due from the Company’s Italian subsidiaries and accounts receivable and accounts payable of our Italian subsidiaries and their subsidiaries.

PM Group has an intercompany receivable denominated in Euros from its Chilean subsidiary. At September 30, ~~2020,~~2021, the Company had entered into 2a forward currency exchange ~~contracts~~contract that ~~mature~~matures on October ~~28, 2020.~~29, 2021. Under the ~~first~~ contract the Company ~~was~~is obligated to sell ~~2,900,000~~2,600,000 Chilean pesos for ~~3,106~~2,860 euros. ~~The Company had a second contract which obligated the Company to sell 120,000 Chilean pesos for $152.~~ The purpose of the forward ~~contracts~~contract is to mitigate the income effect related to this intercompany receivable that results with a change in exchange rate between the Euro and the Chilean peso.

A contract was signed by PM Group, for an original notional amount of € 482 (€ .01 at September 30, 2020), maturing on October 1, 2020 with interest paid monthly. PM pays interest at a rate of 3.90% and receives from the counterparties interest at the “Euribor” rate for the period in question if greater than 0.90%.

~~As of September 30, 2020, the Company had the following forward currency contracts and interest rate swaps:~~

The following table provides the location and fair value amounts of derivative instruments that are reported in the Condensed ConsolidatedBalance ~~Sheets~~Sheet as of September 30, ~~2020 and December 31, 2019:~~2021:

The following tables provide the effect of derivative instruments on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2020~~2021 and ~~2019:~~2020:

~~The counterparty to each of~~During the three and nine months ended September 30, 2021 and 2020, there were 0 forward currency ~~exchange forward~~ contracts ~~is a major financial institution with credit ratings of investment grade or better~~designated as cash flow hedges. As such, all gains and ~~no collateral is required. Management continues to monitor counterparty risk and believes the risk of incurring losses on derivative contracts~~loss related to ~~credit risk is unlikely.~~forward currency contracts during the three and nine months ended September 30, 2021 and 2020 were recorded in current earnings and did not impact other comprehensive income.

The Company has established reserves for obsolete and excess inventory of ~~$7,406~~$7,247 and ~~$7,961~~$8,451 as of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Intangible assets and accumulated amortization by category as ofSeptember 30, ~~2020~~2021 is as follows:

Intangible assets and accumulated amortization by category as of December 31, ~~2019~~2020 is as follows:

Amortization expense for intangible assets was $568 and $565, and ~~$572,~~$1,725 and $1,645 ~~and $1,147~~ for the three and nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Estimated amortization expense for the next five years for the period ending September 30 and subsequent is as follows:

Changes in goodwill for the nine months ended September 30, ~~2020~~2021 are as follows:

The Company performed an impairment assessment as of ~~March~~December 31, ~~2020, prior to its October 1,~~2020. No additional triggers for an interim impairment test have been identified. While there was no additional impairment of goodwill recognized as a result of the 2020 annual ~~measurement date. The Company’s policy is to assess the realizability of its intangible assets, and to evaluate such assets for~~ impairment ~~whenever events~~test, a reasonably possible unexpected deterioration in financial performance or ~~changes~~adverse change in ~~circumstances indicate that the carrying amount of such assets (or group of assets)~~earnings may not be recoverable. Impairment is determined to exist if the estimated future undiscounted cash flows are less than the carrying value. Future cash flow projections include assumptions for future sales levels, the impact of cost reduction programs, and the level of working capital needed to support each business. The amount of any impairment then recognized would be calculated as the difference between the estimated fair value and the carrying value of the asset. As of the valuation date, the global economy and the financial markets were experiencing severe adverse effects from the coronavirus disease (COVID-19) pandemic. While uncertainty remains as to its ultimate impact and duration, the COVID-19 pandemic is causing tremendous hardships globally and adversely impacting global and financial market conditions. At March 31, 2020, the Company considered a decrease in its market capitalization to be a triggering event and as such a valuation analysis was performed and goodwill and intangible assets were determined to be impaired, and as such non-cash impairment charges were made to selling, general and administrative expense and shown separately on the income statement as impairment of intangibles. In order to more closely align the estimated fair values of our reporting units to our overall market capitalization, an increase to our risk premium utilized within our discounted cash flows analysis was applied, resultingresult in an ~~impairment charge to goodwill and intangible assets at our PM reporting unit in the amount of $6,585 and $137, respectively.~~ impairment.

The Company accounted for its investment in ASV during the period (May 17, 2017 to February 26, 2018) that it owned 21.2% of ASV as an equity investment. Under the equity method, the Company’s share of the net income (loss) of ASV was recognized as income (loss) in the Company’s statement of operations added to the investment, and dividends received from ASV were treated as a reduction of the investment account. The Company reported ASV’s earnings on a one quarter lag as there was no assurance that ASV would report earnings in time to be included in the Company’s financial statements for any given reporting period. During the quarter ended March 31, 2018, the Company recorded its proportional share of ASV’s loss for the quarter ended December 31, 2017 and recorded amortization related temporary differences.

Between February 26 and 28, 2018, the Company sold 1,000,000 shares of ASV stock, reducing the Company’s investment to approximately 11.0%, and ceased accounting for its investment in ASV as an equity method ~~investment. In September 2019, the Company received cash merger consideration for its remaining 1,080,000 shares of ASV and no longer has an investment in ASV. See Note 19~~.

~~The~~A liability for estimated warranty claims is accrued ~~warranty~~at the time of sale and the expense is recorded in Statement of Operations in Cost of Sales. The liability is established using historical warranty claim ~~experience; however, the~~experience. The current provision may be adjusted to take into ~~consideration~~account unusual or non-recurring events in the past or anticipated changes in future ~~warrant~~warranty claims. Adjustments to the warranty accrual are recorded if actual claim experience indicates that adjustments are necessary. Warranty reserves are reviewed to ensure critical assumptions are updated for known events that may impact the potential warranty liability.

At September 30, ~~2020,~~2021, the Company and its U.S. subsidiaries have a Loan and Security Agreement, as amended (the “Loan Agreement”), with CIBC Bank USA (“CIBC”)~~, formerly known as “The Private Bank and Trust Company”~~. The Loan Agreement provides a revolving credit facility ~~extending the~~with a maturity date ~~from July 20, 2021 to~~of July 20, 2023. The aggregate amount of the facility ~~increased from $25,000 to $30,000.~~is $30 million.

The maximum borrowing available to the Company under the Loan Agreement is limited to: (1) ~~up to~~ 85% of eligible receivables; plus (2) ~~up to~~ 50% of eligible inventory valued at the lower of cost or net realizable value subject to a ~~$20,000~~$20 million limit; plus (3) ~~up to~~ 80% of eligible used equipment, as defined, valued at the lower of cost or market subject to a ~~$2,000~~$2 million limit; plus (4) ~~85% of Eligible Bill and Hold Receivables (as defined in the Loan Agreement) subject to a $10,000 limit; plus (5)~~ 50% of eligible Mexico receivables (as ~~defined in the Loan Agreement)~~defined) valued at the lower of cost or net realizable value subject to a ~~$400~~$0.4 million limit. At September 30, 2021 and December 31, 2020, the maximum the Company could borrow based on available collateral was ~~$22,300.~~$23.5 million and $21.9 million, respectively. At September 30, ~~2020,~~2021, the Company had ~~$5,000~~$12.8 million in borrowings (less $0.1 million in debt issuance costs for a net debt of $12.7 million) with ~~approximately $17,300~~$10.7 million available to borrow under its revolving credit facility. ~~The~~At December 31, 2020, the Company had 0$12.8 million in borrowings ~~at December 31, 2019.~~(less $0.2 million in debt issuance costs for a net debt of $12.6 million) with $9.1 million available to borrow under its revolving credit facility. The indebtedness under the Loan Agreement is collateralized by substantially all of the Company’s assets, except for certain assets of the Company’s subsidiaries.

The Loan Agreement provides that the Company can opt to pay interest on the revolving credit at either a base rate plus a spread, or a LIBOR rate plus a spread. The base rate ~~spread ranges from 0.00%~~and the LIBOR rate are subject to a floor of 0.50% ~~depending on the Borrower’s Adjusted Excess Availability (as defined in the Loan Agreement)~~. The LIBOR spread ranges from 1.75% to 2.25% ~~also~~ depending on the Adjusted Excess Availability. Funds borrowed under the LIBOR option can be borrowed for periods of one, two, or three months and are limited to 4 LIBOR contracts outstanding at any time. In addition, ~~CIBC assesses an~~a fee of 0.375% is applied for the unused ~~line fee that ranges from 0.25% to 0.375%~~portion of the revolving facility and is payable monthly.

~~The~~ In March of 2021, the Company amended the Loan Agreement ~~subjects the Company and its domestic subsidiaries~~ to include

a ~~minimum quarterly EBITDA covenant (as defined in the Loan Agreement). The minimum quarterly EBITDA covenant (as defined in the Loan Agreement) is $2,000~~Hedging Agreement for ~~all fiscal years starting~~interest rate protection with ~~the fiscal year ended December 31, 2017 through the end of the agreement. Additionally, the Company and its domestic subsidiaries are subject~~respect to a Fixed Charge Coverage ratio of 1.10 to 1.00 measured on an annual basis beginning September 30, 2019 (based on a trailing twelve-month basis) through the term of the agreement. At the end of a quarter, if there is less than $15,000 of excess availability and more than $5,000 in outstanding borrowings, then covenant testing is required. The Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, incur additional indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, pay dividends or make distributions, repurchase stock, in each case subject to customary exceptions for a credit facility of this size.LIBOR Loans. The Company was ~~not required to calculate covenant~~in compliance ~~calculations at~~with its covenants as of September 30, ~~2020 and December 31, 2019.~~2021.

The Loan Agreement has a Letter of Credit facility of ~~$3,000,~~$3 million, which is fully reserved against availability. As of September 30, 2021, the outstanding Letters of Credit were $0.2 million which is offset against availability under the revolving facility.

At September 30, 2021, the Company has a $207 term note payable to a bank. The note dated January 6, 2021 had an original principal amount of $748 and an annual interest rate of 3.49%. Proceeds from the note were used to pay annual premiums for certain insurance policies carried by the Company. The holder of the note has a security interest in the insurance policies it financed and has the right upon default to cancel these policies and receive any unearned premiums. There are 3 remaining monthly payments of $69 on this note.

The Company had a note dated November 13, 2020 with an original principal amount of $289 and an annual interest rate of 5.81%. Proceeds from the note were used to pay annual premiums for certain insurance policies carried by the Company. The holder of the note has a security interest in the insurance policies it financed and has the right upon default to cancel these policies and receive any unearned premiums. As of September 30, 2021, the outstanding principal balance of the note was $0.

At September 30, 2021 and December 31, 2020, Badger has a balance on a note payable to Avis Industrial Corporation of ~~$207.~~$88 and$180, respectively. Badger is required to make 60 monthly payments of $10 that began on August 1, 2017. The note dated July 26, 2017, had an original principal amount of $500 and annual interest rate of 8.00%. The note matures on July 1, 2022 and is guaranteed by the Company.

In May 2020 PM’s term and secured debt with Unicredit was purchased by Davy Global Fund management in Ireland. The Company approached Davy Global Fund to paydown the entire Unicredit debt obligation in a cash offer at a discount. On July 20, 2020, the Company paid off the entire PM term and unsecured debt of €4,960 ($6,269) with Unicredit at a 15% discount to its face value which resulted in a gain of €533 ($595) recorded in other income. In additional, accrued interest from April 1, 2020 to July 19, 2020 was forgiven by the bank.

On March 6, 2018, PM Group and Oil & Steel S.p.A. (PM Group’s subsidiary) entered into a Debt Restructuring Agreement (the “Restructuring Agreement”) with Banca Monte dei Paschi di Siena S.p.A., Banca Nazionale del Lavoro S.p.A., BPER Banca S.p.A., Cassa di Risparmio in Bologna S.p.A. and Unicredit S.p.A. (collectively the “Lenders”), and Loan Agency Services S.r.l. (the “Agent”). The Restructuring Agreement, which replaces the previous debt restructuring agreement with the Lenders entered into in 2014, provides for, among other things:

At September 30, ~~2020, PM Group has established demand credit~~2021 and overdraft facilities with 5 Italian banks, 1 Spanish bank and 5 banks in South America. Under the facilities, PM Group can borrow up to €20,423 ($23,942) for advances against invoices, and letter of credit and bank overdrafts. At December 31, ~~2019,~~2020, respectively, PM Group had established demand credit and overdraft facilities with 5 ~~Italian~~ banks in Italy, 1 bank in Spain and 911 banks in South America. Under the facilities, as of September 30, 2021 and December 31, 2020 respectively, PM Group can borrow up to ~~€21,337~~€18,838 ($~~23,955)~~21,808) and €20,550 ($25,133) for advances against invoices, ~~and~~ letter of credit and bank ~~overdrafts.~~overdrafts with €4,300 ($4,978) and €2,000 ($2,440) available to borrow under these facilities. These facilities are divided into two types: working capital facilities and cash facilities. ~~Interest~~At September 30, 2021 and December 31, 2020, interest on the Italian working capital ~~facilities and cash~~ facilities is charged at the 3-month Euribor plus 175 or 200 basis points and 3-month Euribor plus 350 basis points, respectively. Interest on the South American facilities is charged at a flat rate of points for advances on invoices ranging from 8%~~-52% and 8-55% during~~ - 55%. During June 2021, the ~~nine months ended September 30, 2020 and 12 months ended December 31, 2019, respectively.~~loan agreement was renewed removing the existing expiration date.

At September 30, ~~2020,~~2021, the Italian banks ~~has~~had advanced PM Group ~~€12,487~~€9,096 ($~~14,638), at variable interest rates, which currently rangefrom 1.75% to 2.00%~~10,531) (less (€135) ($157) in debt issuance costs for a net debt of (€8,961) (10,374).~~At September 30, 2020, there~~ There were 0 advances to PM Group from the Spanish ~~bank. At September 30, 2020,~~bank, and the South American banks had advanced PM Group ~~€286~~€616 ($~~335)~~713). At December 31, ~~2019,~~2020, the Italian banks had advanced PM Group ~~€11,877~~€10,551 ($~~13,334), at variable interest rates, which currently range from 1.75% to 2.00%~~12,904). ~~At December 31, 2019, there~~There were 0 advances to PM Group from the Spanish ~~bank. At December 31, 2019,~~bank, and the South American banks had advanced PM Group ~~€971~~€98 ($~~1,090)~~120). ~~Total short-term borrowings for PM Group were €12,773 ($14,973) and €12,848 ($14,424) at September 30, 2020 and December 31, 2019, respectively.~~

At September 30, 2021 and December 31, 2020, PM Group has a ~~€6,248~~€5,752 ($~~7,324)~~6,659)and €5,752 ($7,035) term loan with Davy Global Fund Management, an Irish fund that purchased the debt from BPER, an Italian bank. The term loan is split into a note and a balloon payment and is secured by PM Group’s common stock. The term loan is charged interest at a fixed rate of 3.5%. The note is payable in annual installments of principal, ~~€991 for 2020, €1,026~~€513 for 2021, ~~€1,062~~€531 for 2022, ~~€1,099~~€549 for 2023, ~~€1,137~~€569 for 2024, and ~~€1,177~~€588 for 2025. The balloon payment is payable in a single payment of €3,002 in 2026. ~~See above for restructuring. At December 31, 2019, the note and balloon payment had an outstanding principal balance of €6,492 ($7,289) for BPER and €3,002 ($3,439) for Unicredit, respectively.~~

An adjustment in the purchase accounting to value the ~~non-interest-bearing~~non-interest- bearing debt at its fair market value was made. At March 6, 2018 it was determined that the fair value of the debt was €480 or $550 less than the book value. This reduction is not reflected in the above descriptions of PM debt. This discount is being amortized over the life of the debt and being charged to interest expense. As of September 30, 2021 and December 31, 2020, the remaining balance was ~~€143 or $167~~€29 ($34) and €114 ($140), respectively, and has been offset ~~against~~to the debt.

At September 30, 2021 and December 31, 2020, PM Group has unsecured borrowings with 2an Italian ~~banks~~bank (MPS) and an Irish fund (Davy Global Fund Management) totaling ~~€8,670~~€7,225 ($~~10,164). At December 31, 2019, PM Group has unsecured~~8,364) and €7,225 ($8,836), respectively. The borrowings ~~with 3 Italian banks totaling €10,385 ($11,659). Interest on the unsecured notes is charged at~~have a ~~stated and effective~~fixed rate of interest of 3.5% ~~at September 30, 2020 and December 31, 2019.~~ .

Annual payments of ~~€1,731~~€1,445 are payable ~~beginning in 2019 and~~ ending in 2025.

PM Group is subject to certain financial covenants ~~as defined by the debt restructuring agreement~~ including maintaining (1) Net debt to EBITDA, (2) Net debt to equity, and (3) EBITDA to net financial charges ratios. The covenants are measured on a semi-annual basis ~~beginning on~~as of June 30 and December 31 ~~2018.~~of each year. The Company was in compliance with the loan covenants at ~~September~~June 30, ~~2020.~~2021.

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, Autogru PM ~~RO,~~had a ~~subsidiary of PM Group, had 3 notes. The first~~term note ~~is payable in 60 monthly principal installments of €8 ($9), plus interest at the 1-month Euribor plus 300 basis points, effective rate of 3.00% at September 30, 2020 and December 31, 2019, maturing~~ ~~October 2020. At September 30, 2020 and December 31, 2019, the~~with an outstanding principal balance of ~~the~~€0 ($0) and €116 ($142), respectively. The note was €8 ~~($9) and €84 ($94).~~

~~The second note is payable~~paid off in ~~monthly installments of €9 ($10) starting from~~full in September ~~2019~~ ~~and ending in~~ ~~January 2022, and one final payment of €6 ($7) in~~ ~~January 2022~~2021. The note iswas charged interest at the 1-month Euribor plus 250 basis points, for an effective rate of 2.50% at September 30, ~~2020~~2021 and December 31, ~~2019. At September 30, 2020, the outstanding balance was €142 ($166). At December 31, 2019, the~~2020.

Autogru PM had another term note with an outstanding principal balance of ~~the note was €218~~€111 ($~~245).~~

129) and €164 ($201) at September 30, 2021 and December 31, 2020, respectively. The ~~third~~ note is divided in three parts: the first part is payable in 60 monthly installments of €1 ($1) plus interest at the 6-month Euribor plus 275 basis points, for an effective rate of 2.75% at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, maturing in February 2023; the second part is payable in 60 monthly installments of €4 ($5) plus interest at the 6-month Euribor plus 275 basis points, for an effective rate of 2.75% at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, maturing in April 2023; the third part is payable in 60 monthly installments of €1 ($1) plus interest at the 6-month Euribor plus 275 basis points, for an effective rate of 2.75% at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, maturing in September ~~2023. At September 30, 2020 and December 31, 2019, the outstanding principal balance of the note was €181($213) and€234 ($263).~~

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, Valla had established demand credit and overdraft facilities with 2 Italian banks. Under the facilities, Valla can borrow up to approximately ~~€660~~€500 ($~~774) and €660 ($741) as of September 30, 2020 and December 31, 2019,~~579) for advances against orders, invoices and bank overdrafts. Interest on the Italian working capital facilities is charged at a flat percentage rate for advances on invoices and orders ranging from 1.67% - ~~4.75%.~~5.75% at September 30, 2021 and December 31, 2020. At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Italian banks had advanced Valla ~~€224~~€465 ($~~263)~~538) and ~~€269~~€474 ($~~302)~~579).

~~At September 30, 2020 and December 31, 2019,~~ Valla ~~has~~had a term loan with ~~Carisbo. The note is~~Carisbo that was payable in quarterly principal installments beginning on October 30, 2017 of €8 ($9)10), plus interest at the 3-month Euribor plus 470 basis points, for an effective rate of 4.36% at December 31, 2020. The note matured on January 31, 2021. At September 30, ~~2020~~2021 and December 31, ~~2019. The note matures in~~ ~~January 2021. At September 30,~~ 2020, ~~and December 31, 2019,~~ the outstanding principal balance of the note was ~~€15~~€0 ($~~18)~~0) and ~~€39~~€8 ($~~44).~~10), respectively.

~~At September 30, 2020,~~ Valla has a term loan with ~~BPER. The note~~BPER that is payable in monthly principal installments beginning on July 10, 2022 of €0.5 ($1), plus interest at ~~1.45%, for~~ an effective rate of 1.46% at September 30, 2021 and December 31, 2020. The note matures in ~~January 2021~~December 2025. At September 30, 2021 and December 31, 2020, the outstanding principal balance of the note was €25 ($29).

~~The Company leases its Georgetown facility under a capital lease that expires on April 30, 2028. The monthly rent is currently $70~~ and ~~is increased by 3% annually on September 1 during the term of the lease. At September 30, 2020, the outstanding capital lease obligation is $4,622.~~

The Company has entered into a lease agreement with a bank pursuant to which the Company is permitted to borrow 100% of the cost of new equipment with 26 month repayment periods. At the conclusion of the lease period, for each piece of equipment the Company is required to purchase that piece of leased equipment for 1 dollar.

~~The equipment, which is acquired in ordinary course of the Company’s business, is available for sale and rental prior to sale.~~

Under the lease agreement the Company can elect to exercise an early buyout option at any time, and pay the bank the present value of the remaining rental payments discounted by a specified Index Rate established at the time of leasing. The early buyout option results in a prepayment penalty which progressively decreases during the term of the lease. Alternatively, under the like-kind provisions in the agreement, the Company can elect to replace or substitute different equipment in place of equipment subject to the early buyout without incurring a penalty.

~~The following is a summary of amounts financed under equipment capital lease agreements:~~

On December 19, 2014, the Company issued a subordinated convertible debenture with a $7,500 face amount payable to Terex, a related party. The convertible debenture, is subordinated, carries a 5% per annum coupon, and is convertible into Company common stock at a conversion price of $13.65 per share or a total of 549,451 shares, subject to customary adjustment provisions. The debenture has a December 19, 2020 maturity date.

From and after the third anniversary of the original issuance date, the Company may redeem the convertible debenture in full (but not in part) at any time that the last reported sale price of the Company’s common stock equals at least 130% of the Conversion Price for at least 20 of any 30 consecutive trading days. Following an election by the holder to convert the debenture into common stock of the Company in accordance with the terms of the debenture, the Company has the discretion to deliver to the holder either (i) shares of common stock, (ii) a cash payment, or (iii) a combination of cash and stock.

~~As of September 30, 2020, and December 31, 2019, the note had a remaining principal balance of $7,455 and $7,323 and an unamortized discount of $45 and $177,~~€25 ($31), respectively.

On January 7, 2015, the Company entered into a Note Purchase Agreement (the “Perella Note Purchase Agreement”) with MI Convert Holdings LLC (which is owned by investment funds constituting part of the Perella Weinberg Partners Asset Based Value Strategy) and Invemed Associates LLC (together, the “Investors”), pursuant to which the Company agreed to issue $15,000 in aggregate principal amount of convertible notes due January 7, 2021 (the “Perella Notes”) to the Investors. The Perella Notes are subordinated, carry a 6.50% per annum coupon, and are convertible, at the holder’s option, into shares of Company common stock, based on an initial conversion price of $15.00 per share, subject to customary adjustments. Following an election by the holder to convert the debenture into common stock of the Company in accordance with the terms of the debenture, the Company has the discretion to deliver to the holder either (i) shares of common stock, (ii) a cash payment, or (iii) a combination of cash and stock. Upon the occurrence of certain fundamental corporate changes, the Perella Notes are redeemable at the option of the holders of the Perella Notes. The Perella Notes are not redeemable at the Company’s option prior to the maturity date, and the payment of principal is subject to acceleration upon an event of default. The issuance of the Perella Notes by the Company was made in reliance upon the exemptions from registration provided by Rule 506 and Section 4(a)(2) of the Securities Act of 1933.

As of September 30, 2020, the note had a remaining principal balance of $8,000 (less $24 debt issuance cost for a net debt of $7,976) and an unamortized discount of $0, compared to a remaining balance of $14,858 (less $98 debt issuance cost for a net debt of $14,760) and an unamortized discount of $142 at December 31, 2019.

In January 2020, the Company obtained consent from the Noteholders to make prepayments on the Notes in accordance with the terms of the Note Purchase Agreement. As of September 30, 2020, the Company has paid $7,000 in principal prepayments on the Notes.

~~We lease~~The Company leases certain warehouses, office space, machinery, vehicles, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; ~~we recognize~~the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company is not aware of any variable lease payments, residual value guarantees, covenants or restrictions imposed by the leases. Most leases include one or more options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at our sole discretion. The depreciable life of assets is limited by the expected lease term for finance leases.

If there was a rate explicit in the lease, this was the discount rate used. For those leases with no explicit or implicit interest rate, an incremental borrowing rate was used. The weighted average remaining useful life for operating and finance leases was 45 and 7 years, respectively. The weighted average discount rate for operating and finance leases was ~~3.80%~~5.1% and 12.5% respectively.

On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was enacted. The CARES Act, among other things, includes provisions relating to net operating loss carrybacks, alternative minimum tax credit refunds, a modification to the net interest deduction limitations and a technical correction to tax depreciation methods for qualified improvement property. The ~~Cares~~CARES Act did not have a material impact on the Company’s consolidated financial ~~statements for~~statements.

2021, the Company recorded an income tax provision of $234, which includes a discrete income tax expense of $5. The calculation of the overall income tax provision for the three months ended September 30, 2021 primarily consists of foreign income taxes and a discrete income tax expense primarily for the accrual of interest related to unrecognized tax benefits. No tax benefit was provided on U.S. losses incurred during the quarter. For the three months ended September 30, 2020, the Company recorded an income tax provision ~~from continuing operations~~ of $62, which includes a discrete income tax benefit of $38. The calculation of the overall income tax provision for the three months ended September 30, 2020 primarily consists of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for a foreign jurisdiction partially offset by an accrual of interest related to unrecognized tax benefits for. For the three months ended September 30, 2019, the Company recorded an income tax provision of $1,874, which includes a discrete income tax provision of $2,224 related to an increase in the valuation allowance and for the accrual of interest related to unrecognized tax benefits.

The effective tax rate for the three months ended September 30, ~~2020~~2021 was an income tax provision of ~~4.51%~~27.0% on pretax loss of ~~$1,385~~$867 compared to an income tax provision of ~~72.32%~~4.5% on a pretax loss of ~~$2,591~~$1,385 in the comparable prior period. The effective tax rate for the three months ended September 30, ~~2020~~2021 differs from the U.S. statutory rate of 21% primarily due to a valuation allowance in the U.S. and partial valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates, and ~~a decrease in~~an accrual of interest related to unrecognized tax ~~benefits~~benefits.

For the nine months ended September 30, 2021, the Company recorded an income tax provision of $843, which includes a discrete income tax benefit of $481. The calculation of the overall income tax provision for the nine months ended September 30, 2021 primarily consists of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for various state and foreign jurisdictions.

For the nine months ended September 30, 2020, the Company recorded an income tax benefit ~~from continuing operations~~ of $191, which includes a discrete income tax benefit of $382. The calculation of the overall income tax ~~provision~~benefit for the nine months ended September 30, 2020 primarily ~~consists~~consist of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for various state and foreign jurisdictions, and the settlement of the Romanian tax audit for 2017 and 2018, which includes a partial reduction in the valuation allowance at PM Italy caused by the indirect effects of uncertain tax positions embedded in foreign net operating loss carryforwards. For the nine months ended September 30, 2019, the Company recorded an income tax provision of $2,449, which includes a discrete income tax provision of $2,283 related to an increase in the valuation allowance and for the accrual of interest related to unrecognized tax benefits.2018.

The effective tax rate for the nine months ended September 30, ~~2020~~2021 was an income tax provision of 19.5% on pretax income of $4,335 compared to an income tax benefit of ~~1.72%~~1.7% on a pretax loss of $11,083 ~~compared to an income tax provision of 94.65% on a pretax income of $2,588~~ in the comparable prior period. The effective tax rate for the nine months ended September 30, ~~2020~~2021 differs from the U.S. statutory rate of 21% primarily due to ~~the~~a valuation allowance in the U.S. and partial valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates, and a decrease in unrecognized tax benefits related to the expiration of the statute of limitations for various state and foreign ~~jurisdictions and the tax effects of settling the Romanian tax audit for 2017 and 2018.~~jurisdictions.

The Company’s total unrecognized tax benefits as of September 30, ~~2020~~2021 and ~~2019~~2020 were approximately ~~$3,900~~$3.1 million and ~~$4,100.~~$4.0 million, respectively. Included in the unrecognized tax benefits is a liability for the disputed Romania income tax audit assessment for tax years 2012-2016. The Company settled the 2016 audit with the Italian taxing authorities. The impact of the settlement did not have a material impact on the financial statements. Depending ~~upon~~on the final resolution of the ~~Italy~~ audit, ~~and disputed Romanian income tax assessment,~~ the uncertain tax position liability could be higher or lower than the amount recorded at September 30, ~~2020. The Romanian audit for tax years 2017 and 2018 was settled during the quarter ended March 31, 2020.~~A favorable resolution of an unrecognized tax benefit could be recognized as a reduction in the tax provision and effective rate in the period of resolution. An unfavorable settlement of an unrecognized tax benefit could increase the tax provision and effective tax rate and may require the use of cash in the period of resolution. 2021.

Basic net earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. ~~Diluted earnings per share reflects the potential dilution of convertible debt, restricted stock units and stock options.~~ Details of the calculations are as follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2020

2019

2020

2019

Net (loss) income from continuing operations

$
(1,447
)

$
(4,465
)

$
(10,892
)

$
139

Income (loss) from operations of discontinued operations,
   net of income taxes

(124
)

(7,386
)

(832
)

(7,844
)
Net loss

$
(1,571
)

$
(11,851
)

$
(11,724
)

$
(7,705
)

(Loss) earnings per share

Basic

Net (loss) income from continuing operations

$
(0.07
)

$
(0.23
)

$
(0.55
)

$
0.01

Income (loss) from operations of discontinued
   operations, net of income taxes

$
(0.01
)

$
(0.38
)

$
(0.04
)

$
(0.40
)
Net loss

$
(0.08
)

$
(0.60
)

$
(0.59
)

$
(0.39
)
Diluted

Net (loss) income from continuing operations

$
(0.07
)

$
(0.23
)

$
(0.55
)

$
0.01

Income (loss) from operations of discontinued
   operations, net of income taxes

$
(0.01
)

$
(0.38
)

$
(0.04
)

$
(0.40
)
Net loss

$
(0.08
)

$
(0.60
)

$
(0.59
)

$
(0.39
)

Weighted average common shares outstanding

Basic

19,778,225

19,690,233

19,758,241

19,684,521

Diluted

Basic

19,778,225

19,690,233

19,758,241

19,684,521

Dilutive effect of restricted stock units and stock options

1,123

25,817

374

30,551

19,779,348

19,716,050

19,758,615

19,715,072

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021		2020
Net income (loss) from continuing operations	$	(1,101	)	$	(1,447	)	$	3,492	$	(10,892	)
Loss from operations of discontinued operations, net of income taxes		—			(124	)		—		(832	)
Net income (loss)	$	(1,101	)	$	(1,571	)	$	3,492	$	(11,724	)

Income (loss) per share
Basic
Income (loss) from continuing operations	$	(0.06	)	$	(0.07	)	$	0.18	$	(0.55	)
Loss from discontinued operations	$	—		$	(0.01	)	$	—	$	(0.04	)
Net income (loss)	$	(0.06	)	$	(0.08	)	$	0.18	$	(0.59	)
Diluted
Income (loss) from continuing operations	$	(0.06	)	$	(0.07	)	$	0.17	$	(0.55	)
Loss from discontinued operations	$	—		$	(0.01	)	$	—	$	(0.04	)
Net income (loss)	$	(0.06	)	$	(0.08	)	$	0.17	$	(0.59	)

Weighted average common shares outstanding
Basic		19,917,276			19,778,225			19,888,319		19,758,241

Diluted
Basic		19,917,276			19,778,225			19,888,319		19,758,241
Dilutive effect of restricted stock units and stock options		—			—			82,362		—
Basic and Dilutive		19,917,276			19,778,225			19,970,681		19,758,241

Potential shares of common stock relating to stock options and restricted stock units excluded from the earnings per share calculation because their effect would be anti-dilutive were 274,595 and 1,906,735 for the three months ended September 30, 2021 and September 30, 2020, respectively, and 280,200 and 1,907,484 for the nine months ended September 30, 2021 and September 30, 2020, respectively.

~~The following securities were not included in the computation of diluted earnings per share as their effect would have been antidilutive:~~

The Company issued shares of common stock to employees and Directors as restricted stock units issued under the Company’s 2004 Incentive Plan vested. Upon issuance entries were recorded to increase common stock and decrease paid in capital for the amounts shown below. The following is a summary of stock issuances that occurred during the period:

The Company purchases shares of Common Stock from certain employees at the closing share price on the date of purchase. The stock is purchased from the employees to satisfy employees’ withholding tax obligations related to stock issuances described above. The below table summarizes shares repurchased from employees during the current year through September 30, ~~2020:~~2021:

~~Equity was decreased by $13, the aggregated value of the shares reflected in the table above.~~

~~In 2019, the Company adopted the Manitex International, Inc. 2019 Equity Incentive Plan (the “Plan”). In 2020, the Plan was amended to increase~~ ~~the number of shares authorized for issuance under the Plan from 279,717 to 779,717.~~ The total number of shares reserved for issuance however, can be adjusted to reflect certain corporate transactions or changes in the Company’s capital structure. The Company’s employees and members of the board of directors who are not our employees or employees of our affiliates are eligible to participate in the plan. The plan is administered by a committee of the board comprised of members who are outside directors. The plan provides that the committee has the authority to, among other things, select plan participants, determine the type and number of awards, determine award terms, fix all other conditions of any awards, interpret the plan and any plan awards. Under the plan, the committee can grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units, except Directors may not be granted stock appreciation rights, performance shares and performance units.

During any calendar year, participants are limited in the number of grants they may receive under the plan. In any year, an individual may not receive options for more than 15,000 shares, stock appreciation rights with respect to more than 20,000 shares, more than 20,000 shares of restricted stock and/or an award for more than 10,000 performance shares or restricted stock units or performance units. The plan requires that the exercise price for stock options and stock appreciation rights be not less than fair market value of the Company’s common stock on date of grant.

Restricted stock units are subject to the same conditions as the restricted stock awards except the restricted stock units will not have voting rights and the common stock will not be issued until the vesting criteria are satisfied.

The value of the restricted stock is being charged to compensation expense over the vesting period. Compensation expense includes expense related to restricted stock units of $231 and $215, and ~~$598~~$789 and ~~$141 and $441~~$598 for the three and nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Additional compensation expense related to restricted stock units will be ~~$178, $666~~$229, $679, and ~~$376~~$308 for the remainder of ~~2020,~~ 2021, 2022, and ~~2022,~~2023, respectively.

On September 1, 2019, 50,000 stock options were granted at $5.62 per share and vest ratably on each of the first three anniversary dates. Compensation expense related to stock options were ~~$17~~$8 and ~~$59~~$27 for the three ~~month~~ and nine months ended September 30, ~~2020~~ 2021

compared to $7$17 and $7$59 for the comparable period. Additional compensation expense will be ~~$10, $31~~$4 and $10 for the remainder of ~~2020,~~ 2021 and 2022, respectively. ~~The following table illustrates the various assumptions used to calculate the Black-Scholes option pricing model for stock options granted on September 1, 2019:~~

On May 23, 2018, the Company issued options under the predecessor 2004 Equity Plan to purchase 47,437 shares of the Company’s common stock at $11.08 per share (the closing price of the Company’s common stock on the date before the Tadano Purchase Agreement was executed) to a consultant in connection with his services related to Tadano’s investment in the Company. The options expire on May 23, 2028. The Company determined that the fair market value of the options was $130 on date of grant. The value of options is one component of the expenses related to the Tadano transactions discussed above.

The Company is involved in various legal proceedings, including product liability, employment related issues, and workers’ compensation matters which have arisen in the normal course of operations. The Company has product liability insurance with self- insurance retention limits that range from $50 to $500.

The Company has been named as a defendant in several multi-defendant asbestos related product liability lawsuits. In certain instances, the Company is indemnified by a former owner of the product line in question. In the remaining cases the plaintiff has, to date, not been able to establish any exposure by the plaintiff to the Company’s products. The Company is uninsured with respect to these claims but believes that it will not incur any material liability with respect to these claims.

~~When it is probable that~~For claims originated in 2020, the Company changed its insurance coverage for worker’s compensation and no longer has a loss has been incurred and possible to make a reasonable estimate of the Company’s liability with respect to such matters, a provision is recorded for the amount of such estimate or the minimum amount of a range of estimates when it is not possible to estimate the amount within the range that is most likely to occur. The Company established reserves for several PM lawsuits in conjunction with the accounting for our acquisition of PM.

~~Additionally, beginning on December 31, 2011 through December 31, 2019, the Company’s workmen’s compensation insurance policy had a per claim~~ deductible ~~of $250 and annual aggregates that range from $1,000 to $1,875 depending on the policy year.~~obligation. The Company is fully insured for any amount on any individual claim that exceeds the deductible and for any additional amounts of all claims once the aggregate is reached. The Company currently has several workers’ compensation claims related to injuries that occurred after December 31, 2011 and therefore are subject to a deductible. The Company does not believe that the contingencies associated with these workers’ compensation claims in aggregate will have a material adverse effect on the Company.

On May 5, 2011, the Company entered into 2 separate settlement agreements with 2 plaintiffs. As of September 30, ~~2020,~~2021, the Company has a remaining obligation under the agreements to pay the plaintiffs an aggregate of ~~$1,045~~$950 without interest in 1210 annual installments of $95 on or before May 22 of each year. The Company has recorded a liability for the net present value of the liability. The difference between the net present value and the total payment will be charged to interest expense over the payment period.

When it is probable that a loss has been incurred and possible to make a reasonable estimate of the Company’s liability with respect to such matters, a provision is recorded for the amount of such estimate to estimate the amount within the range that is most likely to occur. Certain cases are at a preliminary stage, and it is not possible to estimate the amount or timing of any cost to the Company. However, the Company does not believe that these contingencies, in the aggregate, will have a material adverse effect on the Company.

It is reasonably possible that the ~~“Estimated Reserve~~estimated reserve for ~~Product Liability Claims”~~product liability claims may change within the next 12 months. A change in estimate could occur if a case is settled for more or less than anticipated, or if additional information becomes known to the Company.

As described in Note 14, Income Taxes, included in the unrecognized tax benefits is a liability for the disputed Romania income tax audit assessment for tax years 2012-2016. Depending upon the final resolution of the income tax assessment, the liability could be higher or lower than the amount recorded at September 30, 2020.

The Company ~~has settled~~is continuing to work to resolve its two remaining material weaknesses in compliance with the ~~previously disclosed~~previously-disclosed settlement between the Company and the SEC ~~investigation regarding~~that was entered into in connection with the Company’s restatement of certain prior financial statements.

In the course of conducting its business, the Company has entered into certain related party transactions.

C&M conducts business with RAM P&E LLC for the purposes of obtaining parts business as well as buying, selling, and renting equipment. In 2021, $0.1 million was invoiced by Crane and Machinery, Inc. through government parts contracts awarded to RAM P&E LLC.

C&M is a distributor of Terex rough terrain and truck cranes. As such, C&M purchases cranes and parts from Terex.

PM is a manufacturer of cranes. PM sold cranes, parts, and accessories to ~~Tadano. C&M purchases cranes~~Tadano during 2020 and ~~parts from Terex. Additionally, the Company has a convertible note with a face amount of $7,500 payable to Terex. See Note 12 for additional details.~~2021.

During the quarter ended March 31, 2017, the Company was the majority owner of ASV and, therefore, ASV was not a related party during that period. In May 2017, the Company reduced is its ownership interest in ASV to 21.2% and in February 2018 further reduced its ownership to approximately 11%. As such, ASV became a related party beginning in the quarter ended September 30, 2017. The Company sold its remaining interest in ASV in September 2019 and ASV was no longer a related party at September 30, 2019.

As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had accounts receivable and payable with related parties as shown below:

The following is a summary of the amounts attributable to certain related party transactions as described in the footnotes to the table, for the periods indicated:

		Three Months Ended September 30, 2020		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019			Three Months Ended September 30, 2021		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
Rent paid:	Bridgeview Facility (1)	$	71	$	69	$	207	$	205	Bridgeview Facility (1)		—	$	71		—	$	207

Sales to:	Terex	$	7	$	3	$	35	$	11	Terex	$	1	$	7	$	43	$	35
										Tadano		13		—		153		612
	Tadano		—		139		612		278	RAM P&E (2)		23		—		110		—
Total Sales		$	7	$	142	$	647	$	289		$	37	$	7	$	306	$	647


Purchases from:	Terex		94		142		374		1,050	Terex	$	122	$	94	$	355	$	374
	Tadano		11		—		11		—	Tadano		34		11		130		11
Total Purchases		$	105	$	142	$	385	$	1,050		$	156	$	105	$	485	$	385

As of September 30, 2020, the Company had a convertible note payable of $7,455 (net of unamortized debt discount) to Terex. See Note 12 Convertible Notes for additional details regarding this convertible note.

~~On May 17, 2017, the Company and ASV completed the underwritten initial public offering (the “Offering”) of 3,800,000 shares of ASV common stock, including 2,000,000 shares sold by the Company.~~

~~Following the sale of the above referenced shares, the Company had significant continuing involvement with ASV in the form of an equity investment (21.2% ownership in ASV).~~

Over the period from February 26 to 28, 2018, the Company sold an aggregate of 1,000,000 shares of ASV in privately-negotiated transactions with institutional purchasers. All such shares were sold for $7.00 per share. Following such sale transactions, the Company owned an aggregate of 1,080,000 shares of ASV which equated to approximately 11.0% percent of ASV. After this transaction, the investment in ASV is no longer accounted for under the equity method. The Company recognized a pretax loss of $205 (which includes the $118 of commissions paid) in connection with sale of these shares. The Company was not able to record a tax benefit for this loss.

~~In September 2019, ASV merged with Yanmar America Corporation resulting in the Company receiving $7.05 per share in cash, or $7.6 million, for its remaining 1,080,000 shares of ASV.~~

Going forward, the Company no longer has marketable equity securities on its consolidated balance sheet. Gains and losses related to fair value adjustments on marketable equity securities were recorded into income each reporting period. The Company recognized a $216 gain from change in fair value of marketable securities during the quarter ended September 30, 2019 and a gain of $5,454 for the nine months ended September 30, 2019.

On August 21, 2020, the Company entered into an Asset Purchase Agreement to sell Manitex Sabre, Inc. to ~~Sabre Acquisition LLC.~~an affiliate of Super Steel, LLC for cash proceeds of ~~$1,500,~~$1.5 million, subject to certain adjustments based on closing date accounts receivable and inventory. Accordingly, Manitex Sabre, Inc. is reported as a discontinued operation for 2020.

In addition to the proceeds from sale of ~~$1,500~~$1.5 million in cash received, the Company may receive a maximum royalty and earnout payments of approximately ~~$2,900~~$2.9 million for years 2021 thru 2023 if certain revenue criteria are met. The Company will account for the contingent consideration as a gain in accordance with ASC 450. Under this approach, we will recognize the contingent consideration in earnings after the contingency is resolved.

~~During the three and nine months ended September 30, 2020, the Company recorded a gain on the sale of Manitex Sabre of $376, subject to final working capital adjustments.~~

For the nine months ended September 30, 2020, cash flows ~~used for~~provided by operating activities was $1,649, this consisted of depreciation expense of $45, 0 purchases of fixed assets and 0 amortization expense.Cash flows provided by investing activities consisted of proceeds from sale of assets was $1,610.

For the nine months ended September, 30, 2019, cash flows provided by operating activities was $98, this consisted of depreciation and amortization expense of $350 and purchases of fixed assets of $95.

��
As of

September 30,
2020

December 31,
2019

ASSETS

Current assets

Cash

$
-

$
33

Trade receivables (net)

-

507

Other receivables

155

—

Inventory (net)

-

916

Prepaid expense and other

25

135

Total current assets of discontinued operations

180

1,591

Long-term assets

Total fixed assets (net)

-

314

Operating lease assets

-

99

Total long-term assets of discontinued operations

-

413

Total assets of discontinued operations

$
180

$
2,004

LIABILITIES

Current liabilities

Current operating lease liability

$
-

$
106

Accounts payable

38

381

Accrued expenses

177

187

Customer deposits

-

126

Total current liabilities of discontinued operations

215

800

Long-term liabilities

Other long-term liabilities

-

350

Total long-term liabilities of discontinued operations

-

350

Total liabilities of discontinued operations

$
215

$
1,150

	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
	2020			2020
Net revenues	$	391		$	3,276
Cost of sales		628			3,594
Selling, general and administrative expenses		246			839
Interest expense		14			62
Other income		377			388
Net loss of discontinued operations before income tax		(120	)		(831	)
Income tax expense related to discontinued operations		4			1
Net loss on discontinued operations	$	(124	)	$	(832	)

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

Manitex International, Inc., through its wholly owned subsidiaries: Manitex, Badger, PM Group, Valla, C&M and C&M Leasing, designs, manufactures and distributes a diverse group of products that serve different functions and are used in a variety of industries.

~~Manitex is located in Georgetown, Texas and markets a comprehensive line of boom trucks, truck cranes and sign cranes.~~

~~Badger is located in Winona, Minnesota and manufactures specialized rough terrain cranes and material handling products.~~

PM Group is a leading Italian manufacturer of truck mounted hydraulic knuckle boom cranes and a product range spanning more than 50 models. Through its consolidated subsidiaries, PM Group has locations in Modena, Italy; Iberica, Spain; Arad, Romania; Chassieu, France; Buenos Aires, Argentina; Santiago, Chile; London, UK and Mexico City, Mexico.

~~Valla is located in Piacenza, Italy and produces a line of industrial pick and carry cranes using electric, diesel and hybrid power options with lifting capacity that ranges from 2 to 90 tons.~~

C&M and C&M Leasing are located in Bridgeview, Illinois. C&M is a distributor of new and used Manitex branded products as well as Terex rough terrain and truck cranes. C&M also provides repair services in Chicago and supplies repair parts for a wide variety of medium to heavy duty construction equipment. C&M Leasing rents equipment that is manufactured by the Company as well as a limited amount of equipment manufactured by third parties.

We are continuing to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including how it is impacting our customers, employees, supply chain, and distribution network, as well as the demand for our products in the industries and markets that we serve. Our first priority is the health and safety of our employees, customers, and business partners and we believe that we have taken ~~every~~the necessary ~~step~~steps to keep our facilities clean and safe during the COVID-19 pandemic.While COVID-19 has had a material impact on our ~~reported~~past financial results, ~~for our second and third quarters,~~ we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows. The extent to which our operations may be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the ultimate severity and duration of the outbreak (including the spread and impact of new COVID-19 variants) and actions by government authorities to contain the outbreak or treat its impact. Furthermore, the impacts of a potential worsening of global economic conditions and the continued disruptions to and volatility in the financial markets remain unknown. ~~See Part II, Item 1A, Risk Factors, for an additional discussion of risks~~

The Company is currently experiencing supply chain disruptions and related logistical bottlenecks that have impacted our ability to meet strong industrial demand and have also, increased costs related to ~~COVD-19.~~

~~As a result of the impact of the COVID-19 outbreak, during the second~~shipping, warehousing, and ~~third quarters of 2020,~~working capital management. While the Company ~~experienced a temporary reduction of its manufacturing~~is doing everything it can to mitigate these expenses and ~~operating capacity~~the associated timing issues, certain segments – such as truck chassis – have been more impacted than others. Where appropriate and feasible, we have implemented pricing adjustments to protect margins and, in ~~Italy as a result of government-mandated actions~~tandem, are building inventory to ~~control the spread of COVID-19 which adversely impacted~~meet our ~~revenues. Further,~~ customer requirements. In addition, the Company ~~has experience~~is actively managing costs and ~~may continue~~working to experience disruptions or delays in its supply chain as a result of such actions, which would result in higher supply chain costs to the Company in order to maintain the supply of materials and components for its products. In addition,further streamline operations where needed. Furthermore, the Company has modified its business practices to manage expenses (including practices regarding employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences).

The Company has experienced a recent decline in demand and volumes in its global businesses as a result of the impact of efforts to contain the spread of COVID-19. In addition, the Company’s customers may choose to delay or abandon projects on which the Company provides products and/or services.

In the third quarter to address the COVID-19 outbreak induced downturn in our business including, but not limited to, the Company adopted a restructuring plan for North American operations to generate approximately $5.0 million in annualized cost savings.

~~In addition to the above, we continued~~ We continue to take steps to minimize the negative impact of the COVID-19 pandemic on our business and to protect the safety of our employees and customers. For the quarter ended September 30, 2020, we had available liquidity through cash and our credit facility of approximately $41.0 million to address liquidity concerns and we remained in compliance with the covenants in our bank credit facility as we were able to generate positive cash flow from operations of approximately $3.0 million for the nine months ending September 30, 2020 and maintain a strong balance sheet.

The Company derives most of its revenue from purchase orders from dealers and distributors. The demand for the Company’s products depends upon the general economic conditions of the markets in which the Company competes. The Company’s sales depend in part upon its customers’ replacement or repair cycles. Adverse economic conditions, including a decrease in commodity prices, may cause customers to forego or postpone new purchases in favor of repairing existing machinery.

Gross profit varies from period to period. Factors that affect gross profit include product mix, production levels and cost of raw materials. Margins tend to increase when production is skewed towards larger capacity cranes.

~~PM Group remains a very bright spot~~The following management’s discussion and analysis of financial condition and results of continuing operations should be read in our portfolio, and we have made notable progress towards our goal of achieving higher levels of penetration in the global articulating cranes market. As we announced in our annual update in March, we started 2020 with robust demand for PM products, but unfortunatelyconjunction with the ~~outbreak of COVID-19~~Company’s financial statements and notes, and other information included elsewhere in Italy, we were forced to temporarily halt production at our Italian facilities for approximately four weeks during the second quarter of 2020, with employees being told to stay home. Even with these limitations, we delivered improved Adjusted EBITDA, year over year, and the backlog, at approximately $28.6 million an increase of 29% year over year, gives us visibility, all things equal, for a year of modest growth for PM, with improved Adjusted EBITDA margins that approaches our long-term targets. In addition, the Company secured a purchase order from an international military entity in the third quarter of 2020 for approximately $2.5 million with an option of $2.3 million in additional deliveries.this Report.

In our North American operations, COVID-19 had a significant impact during the third quarter 2020 with lower production and increased uncertainty of future demand. Our North American operations have thus far remained opened during the pandemic, which has allowed us to deliver on our backlog. We are preparing as though the lower demand exacerbated by the COVID-19 pandemic is going to persist throughout the year, particularly in the Manitex straight-mast crane side of the business.Backlog

The Company’s backlog ~~is $50.5~~was approximately $113 million and ~~$65.3~~$68 million at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.


	Three Months Ended September 30,
	2021			2020			$ Change			% Change
Net revenues	$	50,935		$	36,466		$	14,469			39.7	%
Cost of sales		42,899			29,807			13,092			43.9
Gross profit		8,036			6,659			1,377			20.7
Operating expenses
Research and development costs		772			788			(16	)		(2.0	)
Selling, general and administrative expenses		7,419			6,462			957			14.8
Total operating expenses		8,191			7,250			941			13.0
Operating income (loss)		(155	)		(591	)		436			(73.8	)
Other income (expense)
Interest expense		(490	)		(825	)		335			(40.6	)
Interest income		1			6			(5	)		(83.3	)
Gain on extinguishment of debt		—			595			(595	)		(100.0	)
Foreign currency transaction loss		(121	)		(229	)		108			(47.2	)
Other expense		(102	)		(341	)		239			(70.1	)
Total other income (expense)		(712	)		(794	)		82			(10.3	)
Income (loss) before income taxes from continuing operations		(867	)		(1,385	)		518			(37.4	)
Income tax expense (benefit) from continuing operations		234			62			172			277.4
Net income (loss) from continuing operations	$	(1,101	)	$	(1,447	)	$	346			(23.9	)%

Three Months Ended September 30, ~~2020~~2021 Compared to Three Months Ended September 30, ~~2019~~2020

Net income (loss) ~~income~~ from continuing operations for the three-month periods ended September 30, ~~2020~~2021 and ~~2019~~2020

For the three months ended September 30, ~~2020 and 2019~~2021, the Company had a net ~~losses~~loss of ~~$1.5~~$1.1 million compared to ~~$4.5~~a net loss of $1.4 million ~~respectively.~~

~~For~~for the three months ended September 30, ~~2020, the net loss of $1.5~~2020. million consisted of revenue of $36.5 million, cost of sales of $29.8 million, research and development costs of $0.8 million, selling, general and administrative (“SG&A”) expenses of $6.5 million, net interest expense of $0.8 million and income tax~~expense of $0.1 million.~~

~~For the three months ended September 30, 2019, the net loss of $4.5~~million consisted of revenue of $50.6 million, cost of sales of $42.2 million, research and development costs of $0.5 million, SG&A expenses of $7.8 million, intangible asset impairment charge of $1.5 million, interest expense of $1.1 million, a gain in change in fair value of securities held of $0.2 million, a foreign currency loss of $0.3 million and income tax expense of $1.9 million.

Net revenues and gross profit —For the three months ended September 30, 2021, net revenues and gross profit were $50.9 million and $8.0 million, respectively. Gross profit as a percent of revenues was 15.8% for the three months ended September 30, 2021. For the three months ended September 30, 2020, net revenues and gross profit were $36.5 million and ~~$6.7~~$6.6 million, respectively. Gross profit as a percent of revenues was 18.3% for the three months ended September 30, 2020. For the three months ended September 30, 2019, net revenues and gross profit were $50.6 million and $8.4 million, respectively. Gross profit as a percent of revenues was 16.7% for the three months ended September 30, 2019.

Net revenues ~~decreased $14.1~~increased $14.4 million or ~~27.9%~~39.7% to ~~$36.5~~$50.9 million for the three months ended September 30, ~~2020~~2021 from ~~$50.6~~$36.5 million for the comparable period in ~~2019.~~2020. The ~~decrease~~increase in revenues is primarily due to ~~decreases~~increases in sales of straight mast ~~cranes. The decreases~~cranes from the Company’s United States subsidiaries and knuckle boom cranes and aerial platforms from the Company’s foreign subsidiaries, primarily due to the partial recovery in ~~revenues for~~ the ~~three months ended September 30, 2020 were partially offset by a favorable impacted by $1.0 million in foreign currency translation adjustments resulting~~global market from ~~a stronger Euro.~~the COVID-19 pandemic.

Our gross profit ~~decreased $1.7~~increased $1.4 million to ~~$6.7~~$8.0 million for the three months ended September 30, ~~2020~~2021 from ~~$8.4~~$6.6 million for the comparable period in ~~2019.~~2020. The ~~decrease~~increase in gross profit is attributable to ~~decreases~~increases in revenues and product mix partially offset by ~~decline~~higher material cost due to steel surcharges and higher other material costs. The decrease in ~~cost of sales driven by cost savings. The increase in the~~ gross profit percentage is primarily ~~due to~~driven by product mix as lower ~~straight mast crane sales which has lower margins~~margin products were sold and higher material cost ~~reductions related to headcount and production supplies.~~for the three months ended September 30, 2021.

Research and development —Research and development expense was $0.8 million for the three months ended September 30, ~~2020 compared~~2021 consistent with ~~$0.5~~$0.8 million for the same period in ~~2019.~~2020. The Company’s research and development spending reflects our continued commitment to develop and introduce new products that give the Company a competitive advantage.

Selling, general and administrative expense —SG&A expense for the three months ended September 30, ~~2020~~2021 was ~~$6.5~~$7.4 million compared to ~~$7.8~~$6.5 million for the comparable period in ~~2019, a decrease~~2020, an increase of ~~$1.3~~$0.9 million.The ~~decreases~~increases are primarily related to ~~cost savings implemented during the third quarter in 2020 related to salary~~higher professional fees, advertising expenses, ~~accounting fees~~sales commissions, and ~~postponing consultant costs, as part of the Company’s restructuring plan.~~software implementation upgrades.

Interest expense~~For the three months ended September 30, 2020, the Company had no impairment of goodwill or intangibles compared to $1.5~~ —Interest expense was $0.5 million for the three months ended September 30, ~~2019.~~

~~Interest expense~~ ~~—Interest expense was $0.8 million for the three months ended September 30, 2020~~2021 compared to ~~$1.1~~$0.8 million for the comparable period in ~~2019.~~2020. The decrease in interest expense is due to lower debt driven by the pay-off of the convertible notes in December 2020 and ~~interest rates.~~principal payments made on the term debt in 2020.

Gain ~~from~~on extinguishment of debt~~— For~~ —For the three months ended September 30, 2020, the Company paid off a portion of the ~~entire~~ PM term and unsecured debt at a 15% discount to its face value which resulted in a gain of $0.6 million.

~~Change in fair value of securities held~~— For the three months ended September 30, 2020, the Company held no marketable securities. For the three months ended September 30, 2019 the Company had a gain of $0.2 million in fair value of marketable securities. The gain for the three months ended September 30, 2019 was due to a change in the fair value of securities held in ASV.

Foreign currency transaction losses —For the three months ended September 30, ~~2020,~~2021, the Company had foreign currency losses of ~~$0.2~~$0.1 million compared to ~~$0.3~~$0.2 million for the comparable period in ~~2019.~~2020. A substantial portion of the losses relate to changes in the Chilean peso.

Other expense —Other expense was $0.1 million for the three months ended September 30, 2021 compared to ($0.3) million for the comparable period in 2020. The decrease in other expense is primarily due to a legal settlement in 2020.

Income tax — On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was enacted. The CARES Act, among other things, includes provisions relating to net operating loss carrybacks, alternative minimum tax credit refunds, a modification to the net interest deduction limitations and a technical correction to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on the Company’s condensed consolidated financial statements.

For the three months ended September 30, 2021, the Company recorded an income tax provision of $0.2 million, which includes a discrete income tax expense of less than $0.01 million. The calculation of the overall income tax provision for the three months ended September 30, 2021 primarily consists of foreign income taxes and a discrete income tax expense primarily for the accrual of interest related to unrecognized tax benefits. No tax benefit was provided on U.S. losses incurred during the quarter. For the three months ended September 30, 2020, the Company recorded an income tax provision of $0.1 million, which includes a discrete income tax benefit of less than $0.1 million. The calculation of the overall income tax provision for the three months ended September 30, 2020 primarily consists of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for a foreign jurisdiction partially offset by an accrual of interest related to unrecognized tax benefits.

The effective tax rate for the three months ended September 30, 2021 was an income tax provision of 27.0% on pretax loss of $0.9 million compared to an income tax provision of 4.5% on a pretax loss of $1.4 million in the comparable prior period. The effective tax rate for the three months ended September 30, 2021 differs from the U.S. statutory rate of 21% primarily due to the valuation allowance in the U.S. and a partial valuation allowance in Italy, nondeductible permanent differences, income taxed in foreign jurisdictions at varying tax rates and an accrual of interest related to unrecognized tax benefits.

	Nine Months Ended September 30,
	2021			2020			$ Change			% Change
Net revenues	$	158,148		$	122,314		$	35,834			29.3	%
Cost of sales		129,867			99,877			29,990			30.0
Gross profit		28,281			22,437			5,844			26.0
Operating expenses
Research and development costs		2,357			2,246			111			4.9
Selling, general and administrative expenses		23,232			21,226			2,006			9.5
Impairment of intangibles		—			6,722			(6,722	)		(100.0	)
Total operating expenses		25,589			30,194			(4,605	)		(15.3	)
Operating income (loss)		2,692			(7,757	)		10,449			(134.7	)
Other income (expense)
Interest expense		(1,573	)		(2,833	)		1,260			(44.5	)
Interest income		7			80			(73	)		(91.3	)
Gain on Paycheck Protection Program loan forgiveness		3,747			—			3,747			100.0
Gain on extinguishment of debt		—			595			(595	)		(100.0	)
Foreign currency transaction loss		(421	)		(671	)		250			(37.3	)
Other expense		(117	)		(497	)		380			(76.5	)
Total other income (expense)		1,643			(3,326	)		4,969			(149.4	)
Income (loss) before income taxes from continuing operations		4,335			(11,083	)		15,418			(139.1	)
Income tax expense (benefit) from continuing operations		843			(191	)		1,034			(541.4	)
Net income (loss) from continuing operations	$	3,492		$	(10,892	)	$	14,384			(132.1	)%

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Net income (loss) from continuing operations for the nine-month periods ended September 30, 2021 and 2020

For the nine months ended September 30, 2021 the Company had a net income of $3.5 million compared to a net loss of $10.9 million for the nine months ended September 30, 2020.

Net revenues and gross profit —For the nine months ended September 30, 2021, net revenues and gross profit were $158.1 million and $28.3 million, respectively. Gross profit as a percent of revenues was 17.9% for the nine months ended September 30, 2021. For the nine months ended September 30, 2020, net revenues and gross profit were $122.3 million and $22.4 million, respectively. Gross profit as a percent of revenues was 18.3% for the nine months ended September 30, 2020.

Net revenues increased $35.8 million or 29.3% to $158.1 million for the nine months ended September 30, 2021 from $122.3 million for the comparable period in 2020. The increase in revenues is primarily due to increases in sales of straight mast cranes from the Company’s United States subsidiaries and increases in sales of knuckle boom cranes and aerial platforms from the Company’s foreign subsidiaries, primarily due to the partial recovery in the global market from the COVID-19 pandemic and a favorable impact by a stronger Euro, which accounted for approximately $5.6 million.

Our gross profit increased $5.8 million to $28.3 million for the nine months ended September 30, 2021 compared to the prior period in 2020. The increase in gross profit is attributable to increases in revenues and product mix partially offset by higher material cost due to steel surcharges and higher other material costs. The decrease in gross profit percentage is primarily driven by product mix as lower margin products were sold and higher material cost for the nine months ended September 30, 2021.

Research and development —Research and development expense was $2.4 million for the nine months ended September 30, 2021 compared with $2.2 million for the same period in 2020. The Company’s research and development spending reflects our continued commitment to develop and introduce new products that give the Company a competitive advantage.

Selling, general and administrative expense —SG&A expense for the nine months ended September 30, 2021 was $23.2 million compared to $21.2 million for the comparable period in 2020, an increase of $2.0 million.The increases are primarily related to higher bonus accrual in 2021, higher stock compensation expense, higher professional fees, higher advertising, higher sales commissions, aided by an unfavorable impact of a stronger euro, which accounted for approximately $0.7 million offset by trade show expenses that did not recur in 2021.

Impairment of goodwill and intangibles- For the nine months ended September 30, 2021, the Company had no impairment of goodwill or intangibles compared to $6.7 million for the nine months ended September 30, 2020. The impairment in 2020 was driven by the COVID-19 pandemic which caused a decrease in the Company’s market capitalization causing a triggering event which resulted in a $6.6 million goodwill impairment charge and a $0.1 million tradename impairment charge during 2020.

Interest expense —Interest expense was $1.6 million for the nine months ended September 30, 2021 compared to $2.8 million for the comparable period in 2020. The decrease in interest expense is due to lower debt driven by the pay-off of the convertible notes in December 2020 and principal payments made on the term debt in 2020.

Gain on Paycheck Protection Program loan forgiveness —Gain on loan forgiveness was $3.7 million for the nine months ended September 30, 2021 due to the loan forgiveness by the SBA. The gain on loan forgiveness is not subject to U.S. taxation. This deductible permanent difference is offset by a change in the U.S. valuation allowance and therefore has no impact on the effective tax rate.

Gain on extinguishment of debt —For the nine months ended September 30, 2020, the Company paid off a portion of the PM term and unsecured debt at a 15% discount to its face value which resulted in a gain of $0.6 million.

Foreign currency transaction losses —For the nine months ended September 30, 2021, the Company had foreign currency losses of $0.4 million compared to $0.7 million for the comparable period in 2020. A substantial portion of the losses relate to changes in the Argentinian ~~peso. The Company has not been able to identify a strategy to effectively hedge the currency risks related to the Argentinian peso.~~peso and British pound.

Other expense —Other expense was ~~$0.3~~$0.1 million for the ~~three~~nine months ended September 30, ~~2020~~2021 compared to ~~less than $0.1~~$0.5 million for the comparable period in ~~2019. Other~~2020. The decrease in other expense ~~for the three months ended September 30, 2020, was~~is primarily due to a legal ~~settlement.~~settlement in 2020.

For the ~~three~~nine months ended September 30, ~~2020,~~2021, the Company recorded an income tax provision ~~from continuing operations~~ of ~~$0.06~~$0.9 million, which includes a discrete income tax benefit of ~~$0.04~~$0.5 million. The calculation of the overall income tax provision for the ~~three~~nine months ended September 30, ~~2020~~2021 primarily consists of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for avarious state and foreign jurisdiction. For the three months ended September 30, 2019, the Company recorded an income tax provision of $1.9 million, which includes a discrete income tax provision of $2.2 million related to an increase in the valuation allowance and for the accrual of interest related to unrecognized tax benefits.

The effective tax rate for the three months ended September 30, 2020 was an income tax provision of 4.51% on pretax loss of $1.4 million compared to an income tax provision of 72.32% on a pretax loss of $2.6 million in the comparable prior period. The effective tax rate for the three months ended September 30, 2020 differs from the U.S. statutory rate of 21% primarily due to the valuation allowance in the U.S. and Italy, nondeductible permanent differences, income taxed in foreign jurisdictions at varying tax rates and a decrease in unrecognized tax benefits related to the expiration of the statute of limitations for a foreign jurisdiction.

~~Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019~~

~~Net (loss) income from continuing operations for the nine-month periods ended September 30, 2020 and 2019~~

~~For the nine months ended September 30, 2020 and 2019 the Company had net lossof $10.9 million and net income of $0.1 million~~, ~~respectively.~~

For the nine months ended September 30, 2020 the net loss of $10.9 million consisted of revenue of $122.3 million, cost of sales of $99.9 million, research and development costs of $2.2 million, SG&A expenses of $21.2 million, impairment charge of $6.7 million, net interest expense of $2.8 million,~~foreign currency transaction loss of $0.7 million, other income of $0.1 million, and income tax benefit of $0.2 million.~~For the nine months ended September 30, 2019 the net income of $0.1 million consisted of revenue of $162.4 million, cost of sales of $131.5 million, research and development costs of $1.9 million, SG&A expenses of $26.5 million, impairment charge of $1.5 million, net interest expense of $3.1 million, equity investment income of $5.4 million, foreign currency transaction loss of $0.7 million and income tax expense of $2.4 million.

~~Net revenues and gross profit~~ —For the nine months ended September 30, 2020, net revenues and gross profit were $122.3 million and $22.4 million, respectively. Gross profit as a percent of revenues was 18.3% for the nine months ended September 30, 2020.~~For~~the nine months ended September 30, 2019, net revenues and gross profit were $162.4 million and $30.9 million, respectively. Gross profit as a percent of revenues was 19.0% for the nine months ended September 30, 2019.

~~Net revenues decreased $40.1 million or 24.7% to $122.3 million for the nine months ended September 30, 2020 from $162.4 million for the comparable period in 2019.The decreases are primarily due to decreases in straight mast crane sales and revenues from the Company’s United States subsidiaries, primarily due to the impact of the ongoing of COVID-19 pandemic.~~

Our gross profit decreased $8.5 million to $22.4 million for the nine months ended September 30, 2020 from $30.9 million for the comparable period in 2019. The decrease in gross profit is attributable to a decrease in revenues partially offset by decrease in cost of sales. The decline in the gross profit percentage is primarily driven by lower absorption partially offset by cost reductions.

~~Research and development~~ —Research and development was $2.2 million for the nine months ended September 30, 2020 compared to $1.9 million for the same period in 2019. Research and development expenditures were relatively consistent with the prior period. The Company’s research and development spending continues to reflect our continued commitment to develop and introduce new products that give the Company a competitive advantage.

~~Selling, general and administrative expense~~ —Selling, general and administrative expense for the nine months ended September 30, 2020 was $21.2 million compared to $26.5 million for the comparable period in 2019, a decrease of $5.3 million. The decreases are primarily related to cost savings during the second quarter of 2020 in which our Italian subsidiaries were shut down, for four weeks, due to COVID-19. These cost savings were related to temporary layoffs and postponing consultant costs. There were also cost savings related to salary expenses and accounting fees.

~~Impairment of goodwill and intangibles-~~ ~~For the nine months ended September 30, 2020, the Company had no impairment of goodwill or intangibles compared to $1.5 million for the nine months ended September 30, 2019.~~

~~Interest expense~~ —Interest expense, net was $2.8 million for the nine months ended September 30, 2020 compared to $3.1 million for the comparable period in 2019. In 2020, interest expense reflects the benefit of decreased in outstanding debt balances and lower interest rates.

~~Gain from extinguishment of debt— For the nine months ended September 30, 2020, the Company paid off the entire PM term and unsecured debt at a 15% discount to its face value which resulted in a gain of $0.6 million.~~

~~Change in fair value of securities held~~— For the nine months ended September 30, 2020, the Company held no marketable securities. For the nine months ended September 30, 2019, the Company had a gain of $5.5 million in fair value of marketable securities. Losses for the nine months ended September 30, 2019 were due to a change in the fair value of securities held in ASV (see Notes 2 and 8 in the accompanying Condensed Consolidated Financial Statements).

~~Foreign currency transaction losses~~ —For the nine months ended September 30, 2020, the Company had a foreign currency loss of $0.7 million compared to a $0.7 million loss for the comparable period in 2019. A substantial portion of the losses relate to changes in the Argentinian peso. The Company has not been able to identify a strategy to effectively hedge the currency risks related to the Argentinian peso.

~~Income tax~~ — On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” was enacted. The CARES Act, among other things, includes provisions relating to net operating loss carrybacks, alternative minimum tax credit refunds, a modification to the net interest deduction limitations and a technical correction to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on the Company’s consolidated financial statements for the nine months ended September 30, 2020.

jurisdictions. For the nine months ended September 30, 2020, the Company recorded an income tax benefit ~~from continuing operations~~ of $0.2 million, which includes a discrete income tax benefit of $0.4 million. The calculation of the overall income tax ~~provision~~benefit for the nine months ended September 30, 2020 primarily ~~consists~~consist of foreign income taxes and a discrete income tax benefit related to the expiration of the statute of limitations for various state and foreign jurisdictions, and the settlement of the Romanian tax audit for 2017 and 2018, which includes a partial reduction in the valuation allowance at PM Italy caused by the indirect effects of uncertain tax positions embedded in foreign net operating loss carryforwards. For the nine months ended September 30, 2019, the Company recorded an income tax provision of $2.5 million, which includes a discrete income tax provision of $2.3 million related to an increase in the valuation allowance and for the accrual of interest related to unrecognized tax benefits.2018.

The effective tax rate for the nine months ended September 30, ~~2020~~2021 was an income tax ~~benefit~~provision of ~~1.72%~~19.5% on pretax ~~loss~~income of ~~$11.1~~$4.3 million compared to an income tax ~~provision~~benefit of ~~94.65%~~1.7% on a pretax ~~income~~loss of ~~$2.6~~$11.1 million in the comparable prior period. The effective tax rate for the nine months ended September 30, ~~2020~~2021 differs from the U.S. statutory rate of 21% primarily due to ~~the~~a valuation allowance in the U.S. and partial valuation allowance in Italy, nondeductible foreign permanent differences, income taxed in foreign jurisdictions at varying tax rates, and a decrease in unrecognized tax benefits related to the expiration of the statute of limitations for various state and foreign jurisdictions, and the tax effects of settling the Romanian tax audit for 2017 and 2018.

~~Other expense~~— For the nine months ended September 30, 2020, the Company had other expense of $0.5 million compared to less than $0.1 million for the comparable period in 2019. Other expense for the nine months ended September 30, 2020, was primarily related to a legal settlement.

The ultimate duration and severity of the COVID-19 pandemic isremains highly uncertain at this time. Accordingly, its impact on the global economy generally and our customers and suppliers specifically, as well as the potential negative financial impact to our results of operations and liquidity position cannot be reasonably estimated at this time, but could be material. In the context of these uncertain conditions, we are actively managing the business to maintain cash flow and ensure that we have sufficient liquidity for a variety of scenarios. We believe that such strategy will allow us to meet our anticipated funding requirements.

On April 14, 2020, the Company and its United States subsidiaries received the Paycheck Protection Program (PPP) loan which is part of the recently enacted CARES Act administered by the U.S. Small Business Administration. The Company received total proceeds of $3.7 million from the PPP loan which we anticipate to be fully forgiven. In accordance with the requirements of the PPP, the Company is using proceeds from the PPP loan primarily for payroll costs. The loan is recorded on the balance sheet in current liabilities as deferred income liability and cash provided by operating activities on the statement of cash flows (See Note 2 for accounting policy on loan). While there is no guarantee that the Company will receive forgiveness for any outstanding amounts under the PPP Loan, it believes that it has acted in compliance with the terms of the program and plans to seek forgiveness of the PPP Loan.

Cash, cash equivalents and restricted cash were ~~$23.6~~$17.6 millionand $17.4 million at September 30, ~~2020 consistent with levels as of~~2021 and December 31, ~~2019.~~2020. In addition, the Company has a U.S. revolving credit facility with a maturity date of July 20, 2023. At September 30, ~~2020,~~2021, the Company had approximately ~~$17.3~~$10.7 million available to borrow under its U.S. revolving credit facility.

At September 30, ~~2020,~~2021, the PM Group had established working capital facilities with five Italian, one Spanish and ~~five~~eleven South American banks. Under these facilities, the PM Group can borrow ~~$23.9~~$21.8 million against orders, invoices and letters of credit. At

At September 30, ~~2020,~~2021, the PM Group had ~~received advances~~availability under these facilities of ~~$14.9~~$5.0 million. Future advances are dependent on having available collateral.

Our subsidiary in Argentina (“PM Argentina”) began accounting for their operations as highly inflationary effective July 1, 2018, as required by GAAP. Under highly inflationary accounting, PM Argentina’s functional currency became the Euro (its parent company reporting currency), and its income statement and balance sheet have been measured in Euros using both current and historical rates of exchange. The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in other (income) and expense, net and was not material. As of September 30, 2020, PM Argentina had a small net peso monetary position. Net sales of PM Argentina were less than 5 percent of our consolidated net sales for the nine months ended September 30, 2020 and 2019.

On September 26, 2019, ASV entered into an Agreement and Plan of Merger. The Company’s investment in ASV common stock was converted into $7.05 per share in cash. The Company received approximately $7.6 million in cash in September of 2019.

~~Cash flows for the nine-month period ended September 30, 2020 compared to nine-months ended September 30, 2019~~

~~Operating Activities -~~ For the first nine months of 2020, cash flow provided by operating activities was $6.6 million compared to $6.9 million used for the same period in the prior year. The increase reflected an increase of $3.7 million in cash provided by the PPP Loan noted above. Further, the increase related to working capital primarily driven by effective accounts receivable and accounts payable management in the first nine months of 2020 compared to the same period in the prior year.

~~Investing Activities -~~ Cash provided by investing activities was $1.0 million in the first nine months of 2020, which included $1.6 million in proceeds from the sale of Sabre in Q3 2020. Cash provided by investing activities was $6.1 million in the same period a year ago which included a $7.6 million in proceeds from the conversion of 1,080,000 shares of ASV stock in Q3 2019 into cash consideration in ASV’s merger. Cash payments for plant, property and equipment were $0.6 million and $1.5 million for the first nine months of 2020 and 2019, respectively.

~~Financing Activities -~~ Cash used for financing activities was an outflow of $8.4 million for the nine months ended September 30, 2020 which included repayments of the convertible debt of $7.0 million, note payments of $5.9 million and repayments on the revolving credit facility of $3.5 million, offset by $8.5 million in borrowings from the revolving credit facility. Cash from financing activities was an outflow of $0.7 million for the nine months ended September 30, 2019, which included a working capital outflow of $0.6 million.

~~During the nine months ended September 30, 2020, total debt decreased by $6.5 million to $58.3 million at September 30, 2020 from $64.8 million at December 31, 2019.~~

~~The following is a summary of the net decrease in our indebtedness from December 31, 2019 to September 30, 2020:~~

The total change on the above tables differs significantly from the amounts that appear in the financing section of the Company’s Statement of Cash Flow. This occurs as the changes for Cash Flow statements are calculated in local currency and then converted to dollars at an average exchange rate. The impact of exchange rate fluctuations is, therefore, isolated and is included in separate line on the cash flow statement.

~~The following is a summary of our outstanding borrowings at September 30, 2020:~~

As stated above, the Company had cash of $23.6 million and approximately $22.3 million available to borrow under its credit facility as of September 30, 2020. The Company had drawn down $5.0 million leaving $17.3 million of remaining availability in this facility.

PM Group has its own working capital facilities. As stated above, any future advances against the Italian facilities are dependent on having available collateral. Additionally, the Company is permitted to make limited advances to the Italian operations under the Company’s credit facilities. Additional funds can be advanced to the Italian operations provided that the funds come from the sales of the marketable equity security referenced above.

The Company needs cash to fund normal working capital needs and to make scheduled debt payments as shown in the above table. The U.S. credit facilities are asset based. The maximum the Company may borrow under either facility is the lower of the credit line or the available collateral, as defined in the credit agreements. Collateral under the agreements consists of stated percentages of eligible accounts receivable and inventory.

Under the collateral formulas in the credit facilities accounts receivable collateral is equal to a stated percentage of eligible accounts receivable (generally 85%), while inventory collateral is equal to a stated percentage of eligible inventory (generally 50%) and caps total borrowing against our inventory. If our revenues were to increase significantly in the future, the provision limiting borrowing against accounts receivable and inventory would limit future borrowings. If this were to occur, we would attempt to negotiate higher inventory caps with our banks. There is, however, no assurance that the banks would agree to increase the caps. ~~With the Company’s current cash position and additional borrowing capacity, this presently is not viewed to be a significant concern.~~

The Company expects cash flows from operations and existing availability under the current revolving credit and working capital facilities will be adequate to fund future operations. If in the future, we were to determine that additional funding is necessary, we believe that it would be available. There is, however, no assurance that such financing will be available or, if available, on acceptable terms.

Cash flows for the nine-month period ended September 30, 2021 compared to the nine-month period ended September 30, 2020

Operating Activities - For the nine months ended September 30, 2021, cash flow provided by operating activities was $4.3 million compared to ~~raise additional~~$6.6 million for the same period in the prior year. Cash provided by working capital ~~through~~was $0.4 million for the nine months ended September 30, 2021 compared to $4.8 million for the same period in the prior year. The change in accounts receivable used $1.6 million in cash for the nine months ended September 30, 2021 compared to $5.8 million cash provided for the same period in the prior year. Effective accounts payable management generated $10.9 million in cash for the first nine months of 2021 compared to $1.8 million used in cash for the same period in the prior year. Inventory represented a cash outflow of $8.9 million for the first nine months of 2021 compared to $0.7 million cash inflow for the same period in the prior year. During April 2020, the Company was granted $3.7 million from a bank under the Paycheck Protection Program. During June 2021, the Company’s loan was forgiven for the entire $3.7 million balance.

Investing Activities - Cash used in investing activities was $0.7 million in the first nine months of 2021, compared to $1.0 million provided by investing activities in the same period a year ago. Cash used in the nine-month period ended September 30, 2021 was related to cash payments for property and equipment and investment in intangibles. Cash provided by investing activities in the nine-month period ended September 30, 2020 related to proceeds from the sale of Sabre offset by cash payments property and equipment.

Financing Activities - Cash used in financing activities was an outflow of $1.9 million for the nine months ended September 30, 2021 which included a decrease in working capital borrowing of $1.3 million and repayments of notes of $1.1 million, and payments on capital lease obligations of $0.3 million offset by borrowings for insurance agreements of $0.7 million. Cash used in financing activities was an outflow of $8.4 million for the nine months ended September 30, 2020, which included repayments of the convertible debt ~~or equity financings to fund any future significant acquisitions. There is no assurance that such financing will be available or, if available,~~of $7.0 million, note payments of $5.9 million, and repayments on ~~acceptable terms.~~the revolving credit facility of $3.5 million offset borrowings on the revolving credit facility of $8.5 million.

CIBC has issued 2 standby letters of credit at September 30, ~~2020.~~2021. The first standby letter of credit is ~~$0.4~~$0.2 million in favor of an insurance carrier to secure obligations which may arise in connection with future deductible payments that may be incurred under the Company’s worker’s compensation insurance policies. The second standby letter of credit is ~~$20 thousand~~less than $0.1 million in favor of a governmental agency to secure obligations which may arise in connection with worker’s compensation claims.

~~See Note 17 in the accompanying Condensed Consolidated Financial Statements for further information regarding our guarantees.~~

See Note ~~18,~~16, Transactions between the Company and Related Parties, in the accompanying Condensed Consolidated Financial Statements for a description of the Company’s related party transactions.

See Item 7, Management’s Discussion and Analysis of Results of Operations and Financial Condition, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020 for a discussion of the Company’s ~~other~~ critical accounting policies.

See Note 2, in the accompanying Condensed Consolidated Financial Statements for a summary of recently issued accounting standards.

The Company’s market risk disclosures have not materially changed since the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020 was filed. The Company’s quantitative and qualitative disclosures about market risk are incorporated by reference from Part II, Item 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020.

~~Under the supervision of and with~~With the participation of ~~management, including the~~our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), and under the supervision of the Audit Committee of the Board of Directors, ~~the Company~~our management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the ~~Securities and~~ Exchange Act, ~~of 1934,~~ as of September 30, ~~2020. The Company’s~~2021. Our management’s evaluation has identified certain material weaknesses in its internal control over financial reporting as further described in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020. Based on the evaluation of these material weaknesses, ~~the Company has~~our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of September 30, ~~2020~~2021 to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. ~~Based on a number~~Despite the existence of factors, including the completion of the Audit Committee’s internal investigation, our internal review that identified revisions to our previously issued financial statements, and efforts to remediate thethese material weaknesses, ~~in internal control over financial reporting described below we believe~~our Chief Executive Officer and Chief Financial Officer have concluded that the ~~unaudited~~ condensed consolidated financial statements in this Quarterly Report fairly present, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods, presented, in conformity with GAAP.

The effectiveness of any system of controls and procedures is subject to certain limitations, and, as a result, there can be no assurance that our controls and procedures will detect all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be attained.

Our Chief Executive Officer and ~~Senior Vice President of~~Chief Financial ~~Reporting~~Officer have determined that there were deficiencies in our internal control over financial reporting that constitute material weaknesses, as defined by SEC regulations, at September 30, ~~2020,~~2021, with respect to procedures for:

Accordingly, our Chief Executive Officer and ~~Senior Vice President of~~Chief Financial ~~Reporting~~Officer have concluded that our internal control over financial reporting and disclosure controls and procedures, as defined by SEC regulations, were not effective at September 30, ~~2020.~~2021.

During 2021, management continued to invest significant time and effort to remediate the remaining two material weaknesses identified in 2018. The Company continued to progress on implementing Enterprise Resource Planning (“ERP”) software in the Company’s U.S. subsidiaries. In Italy, the Company is working towards the implementation of a new ERP system. In addition, the Company continued to progress on the remediation of the remaining control deficiencies, as discussed further below.

Other than the changes disclosed above, there were no changes in internal control over financial reporting (as defined by Rules 13a-15 and 15d-15) that occurred during the nine months ended September 30, 2021, that have materially affected, or are likely to materially affect, the Company's internal control over financial reporting.

Plan for Remediation of the Material Weaknesses in Internal Control Over Financial Reporting

Management has been actively engaged in the planning for, and implementation of, remediation efforts to address the remaining material weaknesses, as well as other identified areas of risk. These remediation efforts, outlined below, are intended both to address the identified material weaknesses and to enhance the Company’s overall financial control environment. Management’s ongoing actions and planned actions for fiscal year 2021 to further address these issues ~~in fiscal year 2020~~ include:

~~The~~Management continues to execute on the plan that has been provided to the audit committee ~~directed management to develop a detailed plan and timetable~~ for the implementation of the foregoing remedial measures (to the extent not already completed) and the audit committee will continue to monitor ~~their implementation.~~the anticipated timetable. Management ~~completed development/implementation~~continues to monitor completion of actions as outlined in the ~~detailed~~ plan ~~during the third quarter of 2019~~ and ~~has~~have been providing updates to the audit committee on a periodic basis. As part of the plan, during the third quarter of 2019, the Company hired an information technology director to evaluate and improve the information technology controls at our U.S. operations so as to enable us to identify and mitigate risks of material accounting errors. During the second quarter of 2019, the Company engaged a top ten accounting firm to help with remediating its material weaknesses. In addition, under the direction of the audit committee, management will continue to review and make necessary changes to the overall design of the Company’s internal control environment, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting.

Management believes the measures described above ~~and others that will be implemented~~ will remediate the control deficiencies the Company has identified and strengthen its internal control over financial reporting. Management is committed to continuous improvement of the Company’s internal control processes and will continue to diligently review the Company’s financial reporting controls and procedures. As management continues to evaluate and work to improve internal control over financial reporting, the Company may determine to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above.

The information set forth in Note 1715 (Legal Proceedings and Other Contingencies) to the accompanying Condensed Consolidated Financial Statements included in Part I. Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q is incorporated herein by reference.

As of the date of this filing, ~~other than as described in this Item 1A,~~ there have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K filed for the fiscal year ended December 31, ~~2019.~~2020.

~~The ongoing~~ ~~COVID-19 pandemic has had and could continue to have an adverse effect on our business, financial condition, results of operations and cash flows.~~

The global outbreak of COVID-19 severely restricted the level of economic activity in many parts of the world. In response to this outbreak, the governments of many countries, states, cities and other geographic regions have taken a variety of preventative or protective actions, such as imposing restrictions on travel and business operations. While some countries have experienced declining numbers of COVID-19 cases and have therefore reversed some of these preventative and protective measures, others, including certain areas of the United States, have experienced increases in COVID-19 cases and have implemented or are considering implementing or re-implementing such actions. These measures, while intended to curtail the spread of COVID-19, have had and are expected to continue to have significant adverse impacts of uncertain severity and duration on domestic and foreign economies. The outbreak and continued spread of COVID-19 have resulted in a global economic slowdown. Currently, the effectiveness of economic stabilization efforts and other measures being taken to mitigate the effects of these actions and the spread of COVID-19 is uncertain.

As a result of the COVID-19 pandemic, we and our affiliates, employees, suppliers, customers and others have been and may continue to be restricted or prevented from conducting normal business activities, including as a result of shutdowns, travel restrictions and other actions that may be requested or mandated by governmental authorities. Such actions have prevented, and may in the future prevent us from accessing the facilities of our customers to provide services. While a substantial portion of our businesses have been classified as an essential business in jurisdictions in which facility closures have been mandated, some of our facilities have nevertheless been ordered to close in certain jurisdictions and we can give no assurance that there will not be additional closures in the future or that our businesses will be classified as essential in each of the jurisdictions in which we operate.

The COVID-19 outbreak has impacted, and may continue to impact, our office locations and manufacturing facilities, as well as those of our third-party vendors, including the effects of facility closures, reductions in operating hours and other social distancing efforts. In addition, we have modified our business practices (including practices regarding employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, suppliers and other partners. These modifications to our business practices may cause us to experience reductions in productivity and disruptions to our business routines. Further, we have experienced, and may continue to experience, disruptions or delays in our supply chain as a result of such actions, which has resulted in higher supply chain costs to us in order to maintain an adequate supply of materials and components for our products.

Our management of the impact of COVID-19 has and will continue to require significant investment of time from our management and employees, as well as resources across our global enterprise. The focus on managing and mitigating the impacts of COVID-19 on our business may cause us to divert or delay the application of our resources toward new initiatives or investments, which may adversely impact our future results of operations. In addition, issues relating to the COVID-19 pandemic may result in legal claims or litigation against us.

We may also experience impacts from market downturns and changes in consumer behavior related to pandemic fears as a result of COVID-19. For example, we have experienced a recent decline in demand in our global businesses as a result of the impact of efforts to contain the spread of COVID-19. In addition, our customers may choose to delay or abandon projects on which we provide

products. We may also experience adverse impacts on demand and sales volumes from industries that are sensitive to economic downturns and volatility in commodity prices. If these adverse impacts continue, our stock price and the operating performances of our businesses could be adversely affected, which could require us to incur material impairment, restructuring or other charges. For example, during the quarters ended June 30 and September 30, 2020, our revenues were impacted significantly and for the quarter ended March 31, 2020, we were required to record impairment charges to goodwill and indefinite-lived intangible assets related to PM Group.

Further, the impact of COVID-19 has caused significant uncertainty and volatility in the credit markets. We rely on the credit markets to provide us with liquidity to operate and grow our businesses beyond the liquidity that our operating cash flows provide. If our access to capital were to become significantly constrained or if costs of capital increased significantly due the impact of COVID-19, including volatility in the capital markets, or other factors, then our financial condition, results of operations and cash flows could be adversely affected.

Lastly, if the COVID-19 pandemic becomes more pronounced in our global markets, or resurges in markets recovering from the spread of COVID-19, our operations in impacted areas could experience further adverse financial impacts due to market changes and other resulting events and circumstances. The extent to which the COVID-19 outbreak impacts our financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19, the longevity of COVID-19, the impact of COVID-19 on economic activity, and the actions to contain its impacts on public health and the global economy. The impact of COVID-19 may also exacerbate other risks discussed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, any of which could have a material effect on our financial condition, results of operations and cash flows.

~~The potential insolvency or financial distress of third parties could adversely impact our business and results of operations.~~

We are exposed to the risk that various third parties with whom we conduct business will not be able to perform their obligations or continue to place orders due to insolvency or financial distress. The global COVID-19 pandemic has created heightened risk that third parties may be unable to perform their obligations due to suffering financial distress as a result of the pandemic and corresponding measures that have been enacted by governments to contain the spread of the virus. However, we are unable predict the ultimate impact that COVID-19 will have on any of our customers, suppliers, vendors, and other business partners, and each of their financial conditions or their ability to perform their obligations. If third parties fail to perform their obligations under arrangements with us, we may be forced to replace the underlying commitment at current or above market prices or on other terms that are less favorable to us. In such events, we may incur losses, or our results of operations, financial condition or liquidity could otherwise be adversely affected.

The Company’s credit agreement with CIBC directly restricts the Company’s ability to declare or pay dividends without CIBC’s consent. In addition, pursuant to the Company’s credit agreement with CIBC and other lenders, the Company must maintain as specified in the agreements certain fixed coverage ratios and debt to EBITDA ratios.

See the Exhibit Index set forth below for a list of exhibits included with 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.

Michigan		42-1628978
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

9725 Industrial Drive, Bridgeview, Illinois		60455
(Address of Principal Executive Offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	MNTX	The NASDAQ Stock Market LLC
Preferred Share Purchase Rights	N/A	The NASDAQ Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐☒

~~Emerging growth company~~	☐		Emerging growth company	☐

PART I:		FINANCIAL INFORMATION		4

ITEM 1: Financial Statements (Unaudited)				4

		Condensed Consolidated Balance Sheets as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020	4

	��	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020		5

		Condensed Consolidated Statements of Comprehensive Income (Loss) ~~Income~~ for the Three and Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020		6

		Condensed Consolidated Statement of Shareholders’ Equity for the Three and Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020		7

		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020		8

		Notes to Condensed Consolidated Financial Statements		9

ITEM 2: Management’s Discussion And Analysis Of Financial Condition And Results Of Operations				3430

ITEM 3: Quantitative And Qualitative Disclosures About Market Risk				4136

ITEM 4: Controls And Procedures				4136

PART II:		OTHER INFORMATION		4338

ITEM 1: Legal Proceedings				4338

ITEM 1A: Risk Factors				4338

ITEM 2: Unregistered Sales Of Equity Securities And Use Of Proceeds				4438

ITEM 3: Defaults Upon Senior Securities				4538

ITEM 4: Mine Safety Disclosures				4538

ITEM 5: Other Information				4538

ITEM 6: Exhibits				4538

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Equipment sales	$	29,017	$	41,814	$	100,782	$	136,925	$	43,740	$	29,017	$	134,172	$	100,782
Part sales		6,747		7,994		19,583		23,017		6,337		6,747		20,805		19,583
Installation services		702		791		1,949		2,461		858		702		3,171		1,949
Total Revenue	$	36,466	$	50,599	$	122,314	$	162,403	$	50,935	$	36,466	$	158,148	$	122,314

	For the three and nine months ended
	2020			2019
Number of common shares outstanding
Balance at December 31		19,713,185			19,645,773
Employee 2004 and 2019 incentive plan grant		49,884			39,822
Repurchase to satisfy withholding and cancelled		(2,949	)		(2,882	)
Balance at March 31		19,760,120			19,682,713
Employee 2004 and 2019 incentive plan grant		7,360			7,160
Balance at June 30		19,767,480			19,689,873
Employee 2004 incentive plan grant		27,068			2,945
Repurchase to satisfy withholding and cancelled		(232	)		(882	)
Balance at September 30		19,794,316			19,691,936
Common Stock
Balance at December 31	$	130,710		$	130,260
Employee 2004 and 2019 incentive plan grant		352			251
Repurchase to satisfy withholding and cancelled		(13	)		(19	)
Balance at March 31	$	131,049		$	130,492
Employee 2004 incentive plan grant		86			83
Balance at June 30	$	131,135		$	130,575
Employee 2004 incentive plan grant		142			22
Repurchase to satisfy withholding and cancelled		(1	)		(5	)
Balance at September 30	$	131,276		$	130,592
Paid in Capital
Balance at December 31	$	2,793		$	2,674
Share-based compensation		222			159
Employee 2004 and 2019 incentive plan grant		(352	)		(251	)
Balance at March 31	$	2,663		$	2,582
Share-based compensation		203			141
Employee 2004 and 2019 incentive plan grant		(86	)		(83	)
Balance at June 30	$	2,780		$	2,640
Share-based compensation		233			148
Employee 2004 incentive plan grant		(143	)		(22	)
Balance at September 30	$	2,870		$	2,766
Retained Deficit
Deficit at December 31	$	(50,253	)	$	(41,761	)
Net (loss) income		(7,476	)		910
Balance at March 31	$	(57,729	)	$	(40,851	)
Net (loss) income		(2,677	)		3,236
Deficit at June 30	$	(60,406	)	$	(37,615	)
Net loss		(1,571	)		(11,851	)
Deficit at September 30	$	(61,977	)	$	(49,466	)
Accumulated Other Comprehensive Loss
Deficit at December 31	$	(3,700	)	$	(3,169	)
Loss on foreign currency translation		(508	)		(620	)
Balance at March 31	$	(4,208	)	$	(3,789	)
Gain on foreign currency translation		319			264
Deficit at June 30	$	(3,889	)	$	(3,525	)
Gain (loss) on foreign currency translation		1,053			(1,074	)
Deficit at September 30	$	(2,836	)	$	(4,599	)

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)						Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	PM Contingent Consideration		Valla Contingent Consideration		Total		Valla Contingent Consideration
Liabilities:
Balance at January 1, 2020	$	314	$	205	$	519
Balance at January 1, 2021							$	224
Effect of change in exchange rates		14		10		24		(12	)
Balance at September 30, 2020	$	328	$	215	$	543
Balance at September 30, 2021							$	212

		Fair Value					Fair Value
						Balance Sheet Location	September 30, 2021		December 31, 2020
Asset Derivatives
Foreign currency exchange contract						Prepaid expense and other current assets	$	118	$	—
	Balance Sheet Location	September 30, 2020		December 31, 2019
Liabilities Derivatives
Foreign currency exchange contract	Accrued expense	$	53	$	99	Accrued expenses	$	—	$	267

		Gain (loss)						Gain (loss)						Gain (loss)					Gain (loss)
	Location of gain or (loss) recognized in the Statement of Operations	Three Months Ended September 30,						Nine Months Ended September 30,					Location of gain or (loss) recognized in the Statement of Operations	Three Months Ended September 30,					Nine Months Ended September 30,
		2020			2019			2020		2019				2021		2020			2021		2020
Derivatives Not Designated as Hedge Instruments
Forward currency contracts	Foreign currency transaction (losses) gains	$	(236	)	$	105		$	-	$	(73	)	Foreign currency transaction gains (losses)	$	225	$	(236	)	$	226	$	—
Interest rate swap contracts	Interest expense		—			(2	)		—		1
		$	(236	)	$	103		$	-	$	(72	)		$	225	$	(236	)	$	226	$	—

	Weighted Average	Gross					Net		Weighted Average	Gross					Net
	Amortization	Carrying		Accumulated			Carrying		Amortization	Carrying		Accumulated			Carrying
	Period (in years)	Amount		Amortization			Amount		Period (in years)	Amount		Amortization			Amount
Patented and unpatented technology	6	$	18,305	$	(14,218	)	$	4,087	5	$	18,248	$	(14,933	)	$	3,315
Customer relationships	6		19,072		(12,161	)		6,911	4		18,934		(13,371	)		5,563
Trade names and trademarks	12		4,830		(2,629	)		2,201	10		4,829		(2,824	)		2,005
Indefinite lived trade names			2,553					2,553			2,524					2,524
Total intangible assets, net							$	15,752							$	13,407

	Total
Balance January 1, 2020	$	32,635
Effect of change in exchange rates		631
Goodwill impairment		(6,567	)
Balance September 30, 2020	$	26,699

	Total
Balance January 1, 2021	$	27,472
Effect of change in exchange rates		(996	)
Balance September 30, 2021	$	26,476

	September 30, 2021		December 31, 2020
Accrued payroll and employee benefits	$	1,914	$	2,216
Accrued vacation		1,532		1,398
Accrued warranty		1,421		1,292
Accrued income tax and other taxes		1,358		1,127
Accrued interest		448		244
Accrued expenses—other		2,047		1,632
Total accrued expenses	$	8,720	$	7,909

	September 30, 2020		December 31, 2019
Accrued payroll	$	1,863	$	899
Accrued warranty		1,365		1,604
Accrued taxes other than income taxes		1,299		1,297
Accrued expenses—other		1,290		684
Accrued vacation		1,168		1,218
Accrued employee benefits		860		829
Accrued interest		738		932
Accrued bonuses		238		797
Accrued commissions		225		344
Accrued product liability and workers compensation claims		219		534
Total accrued expenses	$	9,265	$	9,138

	For the nine months ended						For the nine months ended
	September 30,						September 30,
	2020			2019			2021			2020
Balance January 1,	$	1,604		$	2,004		$	1,292		$	1,604
Accrual for warranties issued during the period		1,576			1,856
Provision for warranties issued during the year								2,505			1,576
Warranty services provided		(1,885	)		(1,579	)		(2,343	)		(1,885	)
Changes in estimate		59			(518	)		—			59
Foreign currency translation		11			(52	)		(33	)		11
Balance September 30,	$	1,365		$	1,711		$	1,421		$	1,365

Leases (thousands)	Classification	September 30, 2020		December 31, 2019
Leases						Classification	September 30, 2021		December 31, 2020
Assets
Operating lease assets	Operating lease assets	$	2,160	$	2,174	Operating lease assets	$	3,484	$	4,068
Finance lease assets	Fixed assets, net		3,022		3,906
Financing lease assets						Fixed assets, net		2,394		2,847
Total leased assets		$	5,182	$	6,080		$	5,878	$	6,915

Liabilities
Current
Operating	Current liabilities	$	761	$	813	Current liabilities	$	998	$	1,167
Finance	Current liabilities		352		476
Financing						Current liabilities		380		344

Non-current
Operating	Non-current liabilities		1,398		1,361	Non-current liabilities		2,486		2,901
Finance	Non-current liabilities		4,311		4,584
Financing						Non-current liabilities		3,931		4,221
Total lease liabilities		$	6,822	$	7,234		$	7,795	$	8,633

		Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
Lease Cost (thousands)	Classification	2020		2019		2020		2019
Lease Cost										Classification	2021		2020		2021		2020
Operating lease costs	Operating lease assets	$	262	$	203	$	793	$	636	Operating lease assets	$	315	$	262	$	1,017	$	793
Finance lease cost
Depreciation/Amortization of leased assets	Depreciation or Inventory reserve		79		34		306		319
Amortization of leased assets										Amortization		91		79		273		306
Interest on lease liabilities	Interest expense		145		155		444		469	Interest expense		136		145		416		444
Lease cost		$	486	$	392	$	1,543	$	1,424		$	542	$	486	$	1,706	$	1,543

	Three months ended September 30,				Nine months ended September 30,
Other Information (thousands)	2020		2019		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	282	$	226	$	794	$	716
Operating cash flows from finance leases	$	79	$	106	$	306	$	320
Financing cash flows from finance leases	$	145	$	155	$	444	$	469

	Operating Leases			Capital Leases			Operating Leases			Capital Leases
2021	$	819		$	913
2022		495			898		$	1,204		$	898
2023		336			925			925			925
2024		184			952			627			952
2025		118			981			431			981
2026								391			1,010
And subsequent		379			2,675			446			1,665
Total undiscounted lease payments		2,331			7,344			4,024			6,431
Less interest		(172	)		(2,681	)		(540	)		(2,120	)
Total liabilities	$	2,159		$	4,663		$	3,484		$	4,311
Less current maturities		(761	)		(352	)		(998	)		(380	)
Non-current lease liabilities	$	1,398		$	4,311		$	2,486		$	3,931

	As of September 30,
	2021		2020
Unvested restricted stock units		265,125		260,970
Options to purchase common stock		97,437		97,437
Convertible subordinated notes		—		1,549,451
		362,562		1,907,858

Date of Issue	Employees or Director	Shares Issued		Value of Shares Issued
January 1, 2020	Employee		2,250	$	13
March 6, 2020	Directors		7,920		47
March 13, 2020	Employee		39,714		292
May 15, 2020	Employee		560		6
May 31, 2020	Directors		6,800		79
August 14, 2020	Directors		9,900		44
August 20, 2020	Employee		333		4
August 21, 2020	Employee		335		2
September 1, 2020	Employee		16,500		93
			84,312	$	580

Date of Purchase	Shares Purchased		Closing Price on Date of Purchase
March 13, 2020		2,949	$	4.34
August 20, 2020		116	$	4.37
August 21, 2020		116	$	4.23
		3,181

	September 30, ~~2020~~2021
Outstanding on January 1, ~~2020~~2021		~~198,717~~242,586
Units granted during the period		~~155,000~~147,800
Vested and issued		(~~81,131~~112,040	)
Vested-issued and repurchased for income tax withholding		(~~3,181~~6,183	)
Forfeited		(~~8,435~~7,038	)
Outstanding on September 30, ~~2020~~2021		~~260,970~~265,125

	Grant date 9/1/2019
Dividend yields		—
Expected volatility		51.0	%
Risk free interest rate		1.42	%
Expected life (in years)		6
Fair value of the option granted	$	2.76

	Three Months Ended September 30, 2020			Nine Months Ended September 30, 2020
Proceeds from sale	$	1,489		$	1,489
Transaction Costs		(69	)		(69	)
Preliminary working capital adjustment		190			190
Net proceeds		1,610			1,610
Net assets sold		(1,234	)		(1,234	)
Gain on sale before taxes		376			376
Taxes on gain		-			-
Gain on sale, net of tax	$	376		$	376

	��	As of
		September 30, 2020		December 31, 2019
ASSETS
Current assets
Cash		$	-	$	33
Trade receivables (net)			-		507
Other receivables			155		—
Inventory (net)			-		916
Prepaid expense and other			25		135
Total current assets of discontinued operations			180		1,591
Long-term assets
Total fixed assets (net)			-		314
Operating lease assets			-		99
Total long-term assets of discontinued operations			-		413
Total assets of discontinued operations		$	180	$	2,004
LIABILITIES
Current liabilities
Current operating lease liability		$	-	$	106
Accounts payable			38		381
Accrued expenses			177		187
Customer deposits			-		126
Total current liabilities of discontinued operations			215		800
Long-term liabilities
Other long-term liabilities			-		350
Total long-term liabilities of discontinued operations			-		350
Total liabilities of discontinued operations		$	215	$	1,150

Facility	Increase/(decrease) (In millions)
U.S. Revolver	$	5.0
Note payable—Badger		(0.1	)
Capital leases-buildings		(0.2	)
Capital leases-equipment		(0.2	)
Convertible note-Terex		0.2
Convertible note-Perella		(6.9	)
PM		(4.3	)
Valla working capital borrowings		(0.1	)
	$	(6.6	)
Debt issuance costs		0.1
	$	(6.5	)

	Outstanding Balance		Interest Rate	Interest Paid	Principal Payment
U.S. Revolver	$	5.0	N/A	Monthly	July 20, 2023 maturity
Convertible note—Terex		7.5	7.5%	Semi-Annual	January 1, 2021 maturity
Convertible note—Perella		8.0	7.5%	Semi-Annual	January 7, 2021 maturity
Capital lease—cranes for sale		0.1	5.5%	Monthly	January 13, 2021 maturity
Capital lease—Georgetown facility		4.6	12.5%	Monthly	$0.06 million monthly payment includes interest. April 30, 2028 maturity
Note payable—Winona Facility		0.2	8.0%	Monthly	$0.01 million monthly
PM unsecured borrowings		10.2	3.5%	Semi-Annual	Annual installments starting December 2019 through December 2025
PM Autogru term loan #1		0.1	3.00%	Monthly	$0.01 million monthly through October 2020
PM Autogru term loan #2		0.1	2.50%	Monthly	$0.01 monthly through September 2020
PM Autogru term loan #3		0.2	2.75%	Monthly	Monthly through June 2023
PM term loans with related accrued interest, interest rate swaps and FMV adjustments		6.9	0 to 3.5%	Semi-Annual	Annual installments starting December 2019 and a balloon payment in December 2026
PM short-term working capital borrowings		15.0	1.75 to 52.0%	Monthly	Upon payment of invoice
Valla note payable		-	1.46 to 4.38%	Quarterly	Over 14 quarterly payments
Valla short-term working capital borrowings		0.3	1.67 to 4.75%	Monthly	Upon payment of invoice or letter of credit
	$	58.2
Debt issuance costs		0.1

Debt net of issuance costs	$	58.3

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1—July 31, 2020		—	$	—		—		—
August 1—August 31, 2020		232		4.30		—		—
September 1—September 30, 2020		—		—		—		—

		232	$	4.30		—		—

Exhibit Number		Exhibit Description

~~10.1~~		~~Employment Agreement, effective as of October 20, 2020, between Manitex International, Inc. and Joseph Doolan(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 5, 2020)~~.

31.1*		Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification by the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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		By:		/s/ STEVE FILIPOV
				Steve Filipov
				Chief Executive Officer and Director
				(Principal Executive Officer)