Item 1.01. Entry into a Material Definitive Agreement.
On December 22, 2020, Alta Equipment Group Inc. (the “Company”) closed its underwritten public offering of depositary shares (the “Depositary Shares”), each representing 1/1000th of a share of 10% Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”). The liquidation preference of each share of Series A Preferred Stock is $25,000 ($25.00 per Depositary Share). At the closing, the Company issued 1,200 shares of Series A Preferred Stock represented by 1,200,000 Depositary Shares issued. The offering was conducted pursuant to an underwriting agreement (the “Underwriting Agreement”), dated December 17, 2020, by and among the Company and B. Riley FBR, Inc., as representative of the several underwriters named therein (the “Underwriters”). The Underwriting Agreement included an underwriters’ option to purchase up to 10,000 additional Depositary Shares within thirty (30) days of execution of the Underwriting Agreement. The underwriters’ exercised this option immediately prior to the closing, and the Depositary Shares issued at the closing included the 10,000 Depositary Shares covered by the option.
The Underwriting Agreement contains customary representations, warranties and covenants of the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions.
The foregoing description of the material terms of the Underwriting Agreement is qualified in its entirety by reference to the full text of the Underwriting Agreement, a copy of which is attached hereto as Exhibit 1.1 and is incorporated herein by reference.
The Depositary Shares were offered pursuant to the Company’s registration statement on Form S-1 (Registration No. 333-251097) initially filed with the Securities and Exchange Commission (the “Commission”) on December 3, 2020 and declared effective by the Commission on December 17, 2020.
Item 3.03. Material Modifications to Rights of Security Holders.
On December 18, 2020, the Company filed the Certificate of Designation (“Certificate of Designation”) for the Series A Preferred Stock with the Secretary of State of the State of Delaware, which became effective upon acceptance. The Certificate of Designation classified a total of 1,200 shares of the Company’s authorized shares of preferred stock, $0.0001 par value per share, as Series A Preferred Stock.
As set forth in the Certificate of Designation, the Series A Preferred Stock will rank, as to dividend rights and rights upon the Company’s liquidation, dissolution or winding up: (i) senior to all classes or series of the Company’s common stock and to all other equity securities issued by the Company other than equity securities issued with terms specifically providing that those equity securities rank on a parity with the Series A Preferred Stock, (ii) junior to all equity securities issued by the Company with terms specifically providing that those equity securities rank senior to the Series A Preferred Stock with respect to payment of dividends and the distribution of assets upon the Company’s liquidation, dissolution or winding up and (iii) effectively junior to all of the Company’s existing and future indebtedness (including indebtedness convertible into our common stock or preferred stock) and to the indebtedness and other liabilities of (as well as any preferred equity interests held by others in) the Company’s existing or future subsidiaries. Holders of Series A Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 10% per annum of the $25,000 liquidation preference ($25.00 per depositary share) per year (equivalent to $2,500 or $2.50 per depositary share). Dividends will be payable quarterly in arrears, on or about the last day of January, April, July and October, beginning on or about April 30, 2021. Generally, the Series A Preferred Stock is not redeemable by the Company prior to December 22, 2025. However, upon a change of control or delisting event, the Company will have the special option to redeem.
