Amended Annual Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

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

For the Fiscal Year Ended DECEMBER 31, 2010

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT F 1934

For the transition period from __________ to ___________

Commission File Number: 000-52459

Essex Rental Corp.

(Exact Name of Registrant as specified in its Charter)

Delaware		20-5415048
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1110 Lake Cook Road, Suite 220 Buffalo Grove, Illinois		60089
(Address of Principal Executive Offices)		(Zip code)

( 847) 215-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Common Shares, $.0001 par value per share		The NASDAQ Capital Market
(Title of each class)		(Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes þ No

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. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act): Large Accelerated Filer ¨ Accelerated Filer þ Non-Accelerated Filer ¨ Smaller Reporting Company ¨

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

The aggregate market value of the voting and non-voting common equity of the Registrant held by non-affiliates as of June 30, 2010 was $57,077,031.

The number of shares of outstanding common stock of the Registrant as of March 10, 2011 was 24,428,092.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Definitive Proxy Statement with respect to the 2011 Annual Meeting of Stockholders filed with the Securities and Exchange Commission on April 29, 2011 are incorporated by reference into Part III of this Annual Report on Form 10-K.

FORM 10-K/A REPORT INDEX

10-K/A Part and Item No.		Page No.
PART I
Item 1	Business	2
Item 1A	Risk Factors	16
Item 1B	Unresolved Staff Comments	23
Item 2	Properties	23
Item 3	Legal Proceedings	25
Item 4	Reserved	25

PART II
Item 5	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6	Selected Financial Data	28
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	50
Item 8	Financial Statements and Supplementary Data	51
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	51
Item 9A	Controls and Procedures	51
Item 9B	Other Information	52

PART III
Item 10	Directors, Executive Officers and Corporate Governance of the Registrant	53
Item 11	Executive Compensation	53
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	53
Item 13	Certain Relationships and Related Transactions	53
Item 14	Principal Accountant Fees and Services	53

PART IV
Item 15	Exhibits and Financial Statement Schedules	54

EXPLANATORY NOTE – 2010 RESTATEMENT

This Amendment No. 1 to Form 10-K (“Amendment No. 1”) is being filed by Essex Rental Corp. (the “Company”) to amend and restate its Annual Report on Form 10-K for the year ended December 31, 2010 filed with the United States Securities and Exchange Commission (“SEC”) on March 16, 2011 (the “Initial Form 10-K”). For purposes of this Annual Report on Form 10-K/A, and in accordance with Rule 12b-15 under the Securities Exchange Act of 1934 (Exchange Act), Items 1A, 6, 7, 8 and 9A of our Initial Form 10-K have been amended and restated in their entirety. Pursuant to the rules of the SEC, Item 15 has also been amended and restated in its entirety to include currently dated certifications of the Company’s principal executive officer and principal financial officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Other than the Items outlined above, there are no changes to the Initial Form 10-K. However, for the convenience of the reader, this Amendment No. 1 sets forth those items in the Initial Form 10-K that are not being amended and restated in their entirety. Except as otherwise specifically noted, all information contained herein is as of December 31, 2010 and does not reflect any events or changes that have occurred subsequent to that date. We are not required to and we have not updated any forward-looking statements previously included in the Initial Form 10-K filed on March 16, 2011. Our previously issued consolidated financial statements included in the Initial Form 10-K should no longer be relied upon.

This Amendment No. 1 is required due to material misstatements within the financial statements in the Initial Form 10-K related to the Company’s estimate of future state income tax rates and related valuation reserves. The Company’s estimate of future state income tax rates did not properly include the impact of the acquisition of substantially all of the assets of Coast Crane Company on November 24, 2010 on future state apportionment calculations for the Company on a consolidated basis. As a result, the Company understated net state deferred tax liabilities by approximately $2.8 million at December 31, 2010 and overstated income tax benefit by approximately the same amount in 2010. The Company’s 2010 Financial Statements also understated the Company’s net deferred tax liabilities at December 31, 2010 as a result of the overstatement in its reserve against state net operating losses (“NOLs”) by approximately $1.0 million. As a result the Company overstated net state deferred tax liabilities by approximately $1.0 million at December 31, 2010 and understated income tax benefit by the same amount in 2010. The favorable benefit of sources of future income was understated and the associated benefit underestimated in the evaluation of whether the state NOLs would be utilized prior to expiration.

We have restated:

Our consolidated balance sheet as of December 31, 2010 by increasing amounts reported in net deferred tax liabilities and increasing the amount reported in accumulated deficit both by $1.8 million; and

Our consolidated statement of operations for the year ended December 31, 2010 by decreasing the benefit for income taxes by $1.8 million.

As a result of this restatement, amounts in our consolidated statements of cash flows and stockholders’ equity for the year ended December 31, 2010 have also been corrected. Our total cash flows from operations for the year ended December 31, 2010 remains unchanged. A summary of the effects of this restatement to our financial statements included within this Amendment to our Annual Report on Form 10-K/A is presented in note 3 in the accompanying notes to consolidated financial statements.

In summary, the net loss after increasing the Company’s provision for income taxes, increased from the $(0.59) per share originally disclosed for both basic and fully-diluted loss per share to $(0.71) for both basic and fully-diluted loss per share for the year ended December 31, 2010.

This Amendment No. 1 includes changes in “Item 9A - Controls and Procedures” and reflects management’s restated assessment of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2010. This restatement of management’s assessment regarding disclosure controls and procedures results from a material weakness in our internal control over financial reporting relating to the above described restatements. The information required in this restatement was previously omitted and should have been recorded in our Initial Form 10-K. The Company has implemented certain changes in our internal controls as of the date of this report to address this material weakness, and believes such weakness has been remediated. There can be no assurance that our remedial efforts will be effective nor can there be any assurances that the Company will not incur losses due to internal or external acts intended to defraud, misappropriate assets, or circumvent applicable law or our system of internal controls. See “Item 9A - Controls and Procedures.”

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements in this Annual Report on Form 10-K/A are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent and belief or current expectations of Essex Rental Corp. and its management team and may be identified by the use of words like "anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "will", "should", "seek", the negative of these terms or other comparable terminology. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from Essex’s expectations include, without limitation, the continued ability of Essex to successfully execute its business plan, the possibility of a change in demand for the products and services that Essex provides (through its subsidiaries, Essex Crane Rental Corp., Coast Crane Company and Coast Crane Ltd.), intense competition which may require us to lower prices or offer more favorable terms of sale, our reliance on third party suppliers, our indebtedness which could limit our operational and financial flexibility, global economic factors including interest rates, general economic conditions, geopolitical events and regulatory changes, our dependence on our management team and key personnel, as well as other relevant risks. The factors listed here are not exhaustive. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Certain of such risks and uncertainties are discussed below under Item 1A – Risk Factors. Essex assumes no obligation to update or supplement forward-looking information in this Annual Report whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results or financial conditions, or otherwise.

PART I

As used in this Annual Report, references to “the Company” or “Essex” or to “we,” “us” or “our” refer to Essex Rental Corp., together with its consolidated subsidiaries, Essex Holdings, LLC, Essex Crane Rental Corp., Essex Finance Corp., Coast Crane Company and Coast Crane Ltd., unless the context otherwise requires.

Item 1.

Business

Background

Essex Rental Corp. (formerly Hyde Park Acquisition Corp.) was incorporated in Delaware on August 21, 2006 as a blank check company whose objective was to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business. On March 13, 2007, we closed our initial public offering of 11,250,000 units. Each unit that was offered had a price of $8.00 and consisted of one share of our common stock and one warrant. Each warrant entitled the holders to purchase one share of our common stock at a price of $5.00. On March 15, 2007, we consummated the sale of an additional 1,687,500 units which were subject to an over-allotment option granted to EarlyBirdCapital, Inc., the representatives of the underwriters for our initial public offering. We also sold to EarlyBirdCapital, Inc., for $100, as additional compensation an option to purchase up to a total of 600,000 units at $8.80 per unit. Laurence S. Levy, chairman of our board of directors, Edward Levy, a member of our board of directors, and Isaac Kier, one of our stockholders, owned a total of 2,812,500 shares of our common stock prior to our initial public offering. These initial stockholders also purchased a total of 1,500,000 warrants from us at $1.00 per warrant in a private placement completed concurrently with our initial public offering. The total proceeds from our initial public offering (including from our private placement of warrants and exercise of the underwriters’ over-allotment option) were $105,000,000. Upon the closing of the offering, including the over-allotment option and the private placement of warrants, and after deducting the underwriting discounts and commissions and offering expenses, the total net proceeds from the offering were approximately $99,923,651.

All activity from August 21, 2006 (inception) through March 13, 2007 related to Essex Rental Corp’s formation and initial public offering. From March 13, 2007 through October 31, 2008, our activities were limited to identifying prospective target businesses to acquire and completing a business combination.

On October 31, 2008, we acquired Essex Crane Rental Corp., which we refer to as Essex Crane, through the acquisition of substantially all of the ownership interests of Essex Crane’s parent company, Essex Holdings, LLC, which we refer to as Holdings, and as a result, we are no longer in the development stage.

Essex Crane is a leading provider of lattice-boom crawler crane and attachment rental services and possesses one of the largest fleets of such equipment in the United States (US). For more information regarding the acquisition of Holdings and Essex Crane, see note 1 to our consolidated financial statements. From October 31, 2008 until November 24, 2010, we conducted substantially all of our operations through Essex Crane.

In 2009, the Company formed a new subsidiary, Essex Finance Corp., to facilitate the acquisition of rental equipment.

In November 2010, we formed CC Bidding Corp (“CCBC”), a Delaware corporation and an indirectly wholly-owned subsidiary of Essex Rental Corp., to facilitate the acquisition (the “Coast Acquisition”) of substantially all of the assets, and the assumption of certain liabilities, of Coast Crane Company, a Delaware corporation (“Coast Liquidating Co.”), a leading provider of specialty lifting solutions and crane rental services on the West Coast of the United States. We completed the Coast Acquisition on November 24, 2010 as the successful bidder in a bankruptcy proceeding. The assets acquired included all of the outstanding shares of capital stock of Coast Crane Ltd., a British Columbia corporation, through which Coast Liquidating Co. conducted its operations in Canada. Following the closing of the Coast Acquisition, CCBC changed its name to “Coast Crane Company”. References to “Coast Crane” in this Annual Report mean Coast Crane Company, a Delaware corporation, formerly known as CC Bidding Corp. For more information regarding the Coast Acquisition, see note 1 to our consolidated financial statements.

We conduct substantially all of our operations through Essex Crane and Coast Crane.

Business Combinations

Acquisition of Holdings and Its Subsidiary Essex Crane

On October 31, 2008, we acquired Essex Crane through the acquisition of substantially all of the ownership of Holdings. The purchase agreement provided for a gross purchase price of $210.0 million, less the amount of Essex Crane’s indebtedness outstanding as of the closing (which was refinanced as of the closing date with a credit facility made available to Essex Crane as of the closing date), the $5.0 million stated value of the membership interests in Holdings not acquired in the acquisition and the amount of certain other liabilities of Essex Crane as of the closing of the acquisition. The purchase price was subject to adjustment at and after the closing based on Essex Crane’s working capital as of the closing date and crane purchases and sales by Essex Crane prior to the closing date. The adjusted purchase price of the Holdings acquisition was $215.5 million, (including the amount of Essex’s indebtedness outstanding under Essex Crane’s credit facility immediately prior to the closing). For additional information regarding the gross purchase price paid in the acquisition of Essex Crane, including related transaction expenses, see note 1 to our consolidated financial statements.

The acquisition, excluding transaction costs was financed with approximately $80.6 million of cash from the proceeds of the Company’s initial public offering, the $5.0 million stated value of the membership interests in Holdings not acquired in the acquisition and approximately $129.9 million of assumption of Essex Crane’s indebtedness outstanding as of the closing (which was refinanced as of the closing date with a credit facility made available to Essex Crane as of the closing date). In addition, as was required under the Company’s certificate of incorporation, shortly after completion of the acquisition approximately $18.7 million of the proceeds of the Company’s initial public offering was paid to shareholders who voted against the acquisition of Essex Crane and exercised their conversion rights.

The ownership interests in Holdings that were not acquired by the Company in the acquisition were retained by the management members of Holdings, including Ronald Schad, our Chief Executive Officer, and Martin Kroll, our Chief Financial Officer, and are referred to throughout this annual report on Form 10-K/A as the “Retained Interests”.

The Retained Interests are exchangeable at the option of the holder for an aggregate of 632,911 shares of our common stock. The Retained Interests do not carry any voting rights and are entitled to distributions from Holdings only if the Company pays a dividend to its stockholders, in which case a distribution on account of the Retained Interests will be made on an “as exchanged” basis. We have granted certain registration rights to the holders of the Retained Interests with respect to the shares of our common stock issuable upon exchange of the Retained Interests. For additional information on our acquisition of Essex Crane and related transactions, see Note 1 to the Company’s consolidated financial statements.

Acquisition of the Assets of Coast Crane Company and Subsidiary

On November 24, 2010, through CCBC, we acquired substantially all of the assets and assumed certain liabilities of Coast Liquidating Co., which consisted of all of the assets used in the operation of its specialty lifting solutions and crane rental services business including all of the outstanding shares of capital stock of Coast Crane Ltd., a British Columbia corporation, through which Coast Liquidating Co. conducted its operations in Canada.

The purchase agreement provided for a gross purchase price of $103.2 million which included net cash payments of $82.5 million and the assumption of certain liabilities of Coast Crane and its subsidiary as of the closing of the acquisition. For additional information regarding the gross purchase price paid for the acquisition of Coast Crane, including related transaction expenses, see note 1 to our consolidated financial statements.

The Coast Acquisition was financed with $14.2 million of proceeds from the issuance of 3.3 million shares of common stock, cash of $20.3 million, primarily funded by Essex Crane’s revolving credit facility, proceeds of $49.6 million from a new revolving credit facility and the assumption of certain liabilities and indebtedness outstanding of Coast Crane and its subsidiary as of the closing date of approximately $20.7 million.

Business

Overview

Through our subsidiaries, Essex Crane and Coast Crane, we are one of North America's largest providers of cranes (including lattice-boom crawler cranes, truck cranes and rough terrain cranes, tower cranes, and other lifting equipment) used in a wide array of construction projects. In addition, we provide product support including installation, maintenance, repair, and parts and services for equipment provided and other equipment used by our construction industry customers. With a fleet of over 1,000 cranes and other construction equipment and customer service and support, we supply a wide variety of innovative lifting solutions for construction projects related to power generation, petro-chemical, refineries, water treatment and purification, bridges, highways, hospitals, shipbuilding, offshore oil fabrication and industrial plants, and commercial and residential construction. Both Essex Crane and Coast Crane rent their equipment “bare,” meaning without supplying an operator and, in exchange for a fee, make arrangements for the transportation and delivery of equipment. Once the crane is delivered and erected on the customer’s site, inspected and determined to be operating properly by the customer’s crane operator and management, the majority of the maintenance and repair costs are the responsibility of the customer while the equipment is on rent. This business model allows Essex to minimize its headcount and operating costs including reduced liability related to operator error and provides the customer with a more flexible situation where they control the crane and the operator’s work schedule.

Through a network of seventeen main service centers, other smaller service locations and several remote storage yards, complemented by a geographically dispersed highly skilled staff of sales and maintenance service professionals, we serve a variety of customers engaged in construction and maintenance projects related to power plants, refineries, bridge and road, alternative energy, water treatment and purification, hospitals, shipbuilding and other infrastructure and commercial construction. We have significantly diversified the end-markets that we serve in recent years, including through the Coast Acquisition, to avoid over-exposure to any one sector of the construction market.

Although Essex Crane and Coast Crane experience overlap in the customers and projects that they serve, they are distinct from one another in the equipment comprising their fleets.

Essex Crane

Essex Crane is a leading provider of lattice-boom crawler crane and attachment rental services and possesses one of the largest fleets of such equipment in the United States. Over approximately 50 years of operation, since its founding in 1960, Essex Crane has steadily grown from a small, family-owned crane rental company to a private equity owned professionally managed company that today is a public company and one of the leading players in its industry offering lattice boom crawler rental services to a variety of customers, industries and regions mainly throughout the United States and Canada.

Essex Crane’s fleet size currently stands at more than 350 lattice-boom crawler cranes and various types of attachments which are made available to clients depending on their lifting requirements, such as weight, pick and carry aspects, reach and angle of reach. The fleet’s combination of crawler cranes and attachments is diverse by lift capacity and capability, allowing Essex Crane to meet the crawler crane requirements of its engineering and construction firm customer base.

Essex Crane uses its significant investment in modern enterprise resource planning (“ERP”) systems and business process methods to help its management assimilate information more quickly than others in our industry, and to provide management with real time visibility of the factors that must be effectively managed to achieve Essex’s goals. Management intends to implement similar systems within Coast Crane during 2011. Essex’s end-markets are characterized by major construction projects often times with long lead times. Management believes that these longer lead times, coupled with most contracts having rental periods of between 4 and 18 months for lifting equipment with heavier capacities, provide them more visibility over future project pipelines and revenues.

Coast Crane

Coast Crane is a market leader for innovative lifting solutions throughout Western North America, Alaska, Hawaii, Guam and the South Pacific. Through Coast Crane, we provide both used and new tower cranes, boom trucks, rough terrain cranes and other lifting equipment to customers in the infrastructure, energy, crane rigger/operator, and municipal, commercial and industrial construction sectors. Coast Crane’s operations are headquartered in Seattle, Washington and its products are rented and sold through a regional network including 13 branch locations. According to the industry publication American Cranes and Transport, Coast Crane is one of the largest crane service providers within its core rental equipment categories.

In addition to providing crane rental services, Coast Crane is a leading crane distributor of self-erecting tower cranes, rough terrain cranes, boom trucks and all terrain cranes in its West Coast territories. Coast Crane enjoys strong working partnerships with leading crane and lifting manufacturers in the U.S. Coast Crane has exclusive distribution relationships with such manufacturers for certain territories on the West Coast. Coast Crane provides after-sale spare parts and services to customers to whom it sells equipment as well as to customers who purchase equipment from other sources.

Products and Services

Our principal products and services are described below.

Equipment Rentals We offer for rent crawler crane and attachments, rough terrain cranes, boom trucks, tower cranes, and other construction related rental equipment. Most attachments are rented separately and increase either the lifting capacity or the reach capabilities of the base crawler cranes and tower cranes. Crawler cranes are long-lived assets with actual lives of up to 50 years or more when properly maintained. The weighted-average age of our crawler crane fleet was approximately 14 years at December 31, 2010 and 2009.

Used Rental Equipment Sales We routinely sell used rental equipment and invest in new equipment in order to manage the mix, composition and size of our fleet. We also sell used equipment in response to customer demand for this equipment. The rate at which we replace used equipment with new equipment depends on a number of factors, including changing general economic conditions, growth opportunities and the need to adjust fleet mix to meet customer requirements and demand.

Retail Equipment and Parts Sales We routinely sell new equipment, used equipment and parts to customers in the construction industry. The types of equipment sold are consistent with the types of equipment used in the Company’s rental fleets and include crawler cranes, tower crane, rough terrain cranes, boom trucks and other lifting equipment. Parts sold are used by customers in similar types of lifting equipment and other heavy machinery.

Transportation Service and Other Revenue We also offer transportation and repair and maintenance services. Our target customers for these ancillary services are our current rental customers, customers that own their own equipment and those who purchase new and used equipment from us.

We generate revenue from a number of sources as follows:

Equipment rentals – We rent our fleet of over 1,000 cranes and attachments and other lifting equipment to a variety of engineering and construction customers under contracts, most of which have rental periods of between 4 and 18 months. Boom trucks and other smaller equipment may be rented as frequently as daily. The contracts typically provide for an agreed rental rate and a specified rental period. The revenue from crane and attachment rentals is primarily driven by rental rates (which are typically higher for the more expensive cranes with heavier lifting capacities than less expensive cranes with lower lifting capacities) charged to its customers and its fleet utilization rate. Rental revenue is recognized as earned in accordance with the terms of the relevant rental agreement on a pro rata daily basis;

Retail equipment sales – We offer a variety of construction equipment products and the related parts for sale including tower cranes, boom trucks, rough terrain cranes and other lifting equipment used in the construction industry. The revenue from equipment and parts sales is primarily driven by the level of construction activity in a particular geographic region. Equipment sales revenue is recognized at the time ownership transfers, which is generally based on delivery and/or inspection of the equipment. Parts sales revenue is recognized at the time of purchase.

Used rental equipment sales revenue – In the ordinary course of business, we sell used cranes and attachments and other lifting equipment over time to optimize the combination of crane models and lifting capacities available in our fleet as we perceive market demands and opportunities. On average, we have historically achieved sale prices for equipment in excess of the appraised value. This is due to the long useful life of the crane and attachment fleet, the conditions prevailing in the secondary market and the high content of engineered high-strength steel included in these fleet assets. Used rental equipment sales are recognized upon acceptance by the customer or the execution of a definitive sales agreement stipulating the date of transferring the risk of ownership. The gain on sale of rental equipment realized by the Predecessor will not be indicative of near term future results in light of our recent acquisitions of Essex Crane and Coast Crane since the rental equipment has been adjusted to fair value as of the closing date, thereby reducing near-term future gain on sale;

Transportation services revenue – Transportation services revenue is derived from the management of the logistics process by which our rental equipment is transported to and from customers’ construction sites, including the contracting of third party trucking for such transportation. Transportation revenue is earned under equipment rental agreements on a gross basis representing both the third-party provider’s fee for transportation and our fee for managing these transportation services and they are matched with the associated costs, and related costs for amounts paid to third party providers. The key drivers of transportation revenue are crane and attachment and other lifting equipment utilization rates and average contract lengths. Shorter average contract durations and high utilization rates generally result in higher requirements for transportation of equipment and resulting revenue. The distance that equipment has to move between different jobsites and the type of equipment being moved (number of truckloads) are also major drivers of transportation revenue and associated costs. Transportation revenue is recognized upon completion of the transportation of equipment; and

Equipment repair and maintenance services revenue – While crawler cranes or attachments, tower cranes, rough terrain cranes, boom trucks or other equipment are on rent, much of the repair and maintenance work is paid for by the customer. We perform a portion of the repair and maintenance work and recognize revenue for such services to the extent they are the customer’s responsibility. This category of revenue also includes providing certain services while erecting the equipment during initial assembly or disassembly of the equipment at the end of the rental. In addition, we offer repair and maintenance services to any party that owns their own equipment and requests repair and maintenance services at one of our Coast Crane service center locations. Key drivers for repair and maintenance revenue are the utilization rates for cranes and attachments as well as jobsite operating conditions and the general construction activity in a given geographic region. Repair and maintenance revenue is recognized as such services are performed.

In summary, 60.3% of total revenue for the year ended December 31, 2010 was generated through equipment rentals, 3.0% through retail equipment sales, 10.2% through used rental equipment sales, 2.9% through retail part sales, 11.5% through transportation services and 12.1% through repair and maintenance services.

US Crane and Lifting Equipment Rental Industry

According to the Rental Equipment Register and the American Rental Association, the US equipment rental sector has grown from a minor industry in 1982 to an industry generating over $30.0 billion in annual revenues in 2008. Driving this growth has been an increase in crane and attachment penetration rates with engineering and construction firms, the result of a fundamental shift in contractor preferences to rent versus purchasing equipment based on the following factors:

focus on core construction services businesses rather than equipment ownership;

access to broader pool of equipment through rental; and

an efficient use of capital as rental equipment has minimal equipment downtime compared to owned equipment, which reduces servicing and storage costs between projects.

The following table summarizes descriptions of the types of equipment that we offer for rent:

Equipment Type

	Crawler cranes	Other cranes (all terrain, rough terrain, tower and boom truck)	Small equipment (e.g., aerial work platforms, forklifts, etc.)
Economic life	50 plus years with proper maintenance due to higher strength steel percentage content	15-30 years due to higher relative machinery percentage content	Often 10 years or less

Typical Projects	Large infrastructure components requiring heavy lifts: bridges, power plants, municipal infrastructure	Range from residential condominium to large infrastructure	Range from single house builds to large construction projects

End markets	Primarily large infrastructure and industrial	Residential construction to large infrastructure	Residential construction to large infrastructure

Residual value	High	Medium	Medium to low

Within the US heavy lifting crane rental (including crawler cranes, rough terrain cranes and tower cranes) sector operators either provide cranes “bare” or “manned.” Bare rental involves the provision of cranes without an operator, the crane being operated by an employee of the customer. Bare rental is suited to construction firms with adequately trained staff to operate the heavy machinery. Manned rental involves the provision of an operator with the crawler crane and is often suited to customers unable or unwilling to provide an operator of their own and is often more common with customers who perform shorter duration work. Manned rental involves the maintenance of adequate staffing levels to ensure equipment can be rented as required. We operate a bare rental model, because we believe bare rental offers an opportunity for higher returns on invested capital primarily due to decreased liability exposure and a more efficient operating platform and business model. Bare rental allows us to operate the business with significantly less human resources and costs associated with those resources than if we were to operate a manned operation. The primary disadvantage of renting cranes on a bare basis is that we forego a portion of the rental market associated with construction firms that prefer to rent equipment manned.

Operations

Essex Crane is a national provider of crawler crane and attachment rentals with more than 350 crawler cranes and attachments in its fleet. Essex Crane’s revenue is driven through a range of activities including:

· crawler crane and attachment rental;

· repair and maintenance services;

· equipment transportation services; and

· used equipment sales.

Coast Crane is a provider of specialty lifting solutions and crane and attachment rentals and sales in Western North America, Hawaii, Alaska, Guam, and the South Pacific with in excess of 650 pieces of equipment in its fleet.

Coast Crane’s revenue is driven through a range of activities including:

· rough terrain, tower crane, boom truck and other construction equipment rentals;

· repair and maintenance services;

· equipment transportation services; and

· new and used equipment and part sales.

Crane and attachment rentals . We maintain one of the largest fleets of cranes and attachments and other lifting equipment in North America. Rental revenue generated from the rental of equipment was $25.0 million in 2010 or approximately 60.3% of total revenue. Equipment is rented to customers under contract, with an average length of seven months (contracts range from 4-18 months in general), which specifies a constant monthly rate for each piece of equipment over the period of the contract. In 2010, Essex Crane’s average monthly crane rental rate was $16,391 and crane utilization was 37.5% on “days” basis (or 41.2% if calculated using the “hits” method). Utilization on a “days” method increased to 44.7% for the three months ended December 31, 2010 from 30.0% for the three months ended March 31, 2010. For a discussion of the “days” and “hits” methods of measuring crane utilization, see “Fleet Overview” below.

Once we and a potential customer communicate regarding the customer’s need for an equipment rental, we confirm that an appropriate piece of equipment is available. We then prepare and deliver a written rental quote to the customer. The customer reviews the quote and, if acceptable, places an order.

Essex Crane’s on-line, real time information system provides visibility of the entire crawler crane rental fleet for the sales team including the cranes’ lease information and expected availability. All sales team quote and order activity is also available on the same information system and viewable by appropriate sales, operations, and management personnel.

Upon a review of the order including a check of the customer’s credit and continued equipment availability, an order confirmation and a rental agreement are sent to the customer. Once a signed rental agreement and other required documentation (including insurance certificates) are received, the order is authorized for shipment to the customer. Our operations team sees both the quote and order activity and responds appropriately to confirm the readiness of the required crane for shipment to the new rental, but does not begin shipping it until the lease is authorized. Once the crane is delivered to the customer’s site, our representative inspects the crane with the customer and an inspection report is signed verifying that the crane was correctly delivered in accordance with the lease agreement. The rental period for the equipment usually begins when the first major item for the crane begins transport to the customer and the rental ends when the last major item of the crane is returned to our designated location.

Retail equipment sales . Coast Crane and its Canadian subsidiary, Coast Crane Ltd. sell various new and used cranes and other equipment. Revenue from such new equipment sales totaled $1.2 million for the 5 week post-acquisition period in 2010 or approximately 2.9% of total revenue.

Used rental equipment sales . Given the size of our crane and equipment fleet and the various types of cranes and equipment, we sell pieces of used equipment both domestically and internationally to construction or, although infrequently, other rental companies. Sales of used rental equipment are discretionary and based on a variety of factors including, but not limited to, a piece of equipment’s orderly liquidation value, age, rental yield, perceived demand in the marketplace and impact of a sale on our rental businesses and cash flow. Revenue from such used rental equipment sales totaled $4.3 million in 2010 or approximately 10.2% of total revenue.

Retail parts sales . Coast Crane and its Canadian subsidiary, Coast Crane Ltd. sell various crane and other equipment parts. Revenue from such retail part sales totaled $1.2 million for the 5 week post-acquisition period in 2010 or approximately 2.8% of total revenue.

Equipment transportation services . We do not have an in-house fleet of vehicles to transport our cranes, attachments and other equipment to and from project sites and instead out-sources transportation to third party providers. We charge a fee for arranging transportation services from its nearest storage yard with the required equipment to the construction location. Revenue from such equipment transportation services totaled $4.8 million in 2010 or approximately 11.5% of total revenue.

Repair and maintenance services . Our contracts have provisions that provide for the customer to assume responsibility to operate and maintain the equipment to manufacturer’s specifications throughout the contract period. We may provide maintenance and repair services to customers during the contract rental period and will invoice the customer for any work carried out (to the extent such work is the customer’s responsibility). We also provide repair and maintenance services to owners of construction equipment. Revenue from such repair and maintenance services totaled $5.0 million in 2010 or approximately 12.1% of total revenue. While a piece of equipment is not rented, we are responsible for ensuring that its equipment is compliant with all manufacturers’ specifications and other regulations.

Fleet Overview

Essex Crane’s fleet consists of over 350 lattice boom crawler cranes and attachments manufactured solely by Manitowoc and Liebherr. Coast Crane’s fleet consists of over 650 cranes and other construction equipment. Tower cranes, rough terrain cranes and boom trucks comprise approximately 90% of the total value of Coast Crane’s rental equipment fleet. The fleet’s crawler cranes vary in age of equipment and have a maximum lifting capacity ranging from 100 to 440 tons. As of December 31, 2010, the average lifting capacity of Essex Crane’s fleet was approximately 255 tons and average age was 14 years (weighted based on orderly liquidation value). The Company owns all of its crawler cranes and attachments and does not lease any of these items from third parties.

Essex Crane’s management has employed a strategy of increasing the average lifting capacity of the crawler crane fleet by selling lower capacity models and investing in higher capacity models. This has resulted in average lifting capacity growing from approximately 177 tons in 2003 to approximately 255 tons as of December 31, 2010. Attachments are rented by customers to enhance the lifting capacity and reach of cranes. While Essex Crane’s cranes have lifting capacities up to 440 tons, its attachments increase the capacity up to a total of 660 tons. Management has employed this strategy as it believes larger cranes are more applicable to larger construction projects, are less readily substitutable with other equipment, receive above average utilization rates and provide attractive rental rate returns. While this strategy has resulted in a shrinking of the total number of cranes in the fleet since 2003, average rental rate and utilization grew significantly over the same period through December 31, 2008. Due to the global economic downturn that began affecting the Company’s business in 2009 and 2010, utilization rates were affected and have been reduced to rates consistent with those experienced in the 2003 downturn. In contrast, average rental rates have remained comparatively higher than in 2003 due to our enhanced fleet mix.

Historically, Essex Crane measured equipment utilization using what was referred to as the “hits” method. Under this method, equipment on rent for any period of time within a month counted as a utilization hit. This meant that if a piece of equipment were on rent for one day in a month it would be treated the same in the utilization statistic as a piece of equipment on rent for all 30 days in a month. Essex Crane's management believes that the “hits” utilization measurement has a less direct correlation with equipment rental revenue.

Upon implementation of Essex Crane’s ERP System in 2002, Essex Crane began to measure utilization using the method referred to as the “days” method. Essex's management believes that this method, while it may reflect lower utilization rates than the “hits” method, is the most accurate method for measuring equipment utilization and correlates the most closely with rental revenue. Under this method, a real time report is generated from the ERP system for each piece of equipment on rent in a period. The report includes the number of days each piece of equipment was on rent on a particular lease at the base monthly rental rate. The total number of days on rent of all pieces of equipment provides the numerator for determining utilization. The denominator is all equipment rental assets owned times the number of days in the month. The “days” method is the utilization measurement currently used by Essex, and Essex anticipates that the “days” method will be the primary basis for future disclosure of utilization rates for Essex’s cranes and attachments.

The following table outlines utilization rates (calculated using the “days” and “hits” methods) and average monthly rental rates for the crawler crane fleet for the years ended December 31, 2008, 2009 and 2010:

											Avg.
			Avg. Crane						Avg.		Attachment
	Avg. Crane		Utilization Rate						Attachment		Utilization Rate
Year	Rental Rate		Days			Hits			Rental Rate		Days			Hits
2008	$	21,382		72.5	%		77.0	%	$	16,051		42.0	%		44.2	%
2009	$	21,081		43.6	%		48.2	%	$	18,776		18.0	%		20.2	%
2010	$	16,391		37.5	%		41.3	%	$	13,114		16.9	%		18.1	%

Lattice boom crawler cranes have long useful economic lives, often up to 50 years or more. This is longer than other types of cranes and equipment in the lifting market space. Our management believes this is due to the relatively high value of the crane’s structural steel (including its boom) as it relates to the total value of the crane. These structural steel items are complex fabrications with high replacement value made from high tensile strength steel. When properly maintained, these components retain their value over the life of the crane with minimal maintenance costs.

The following table outlines utilization rates (calculated using the “days” method) for the Coast Crane rental fleet assets for the month of December 2010:

Rough terrain cranes	60.4	%
Boom trucks	50.8	%
Tower cranes	32.0	%
Forklifts and other equipment	42.2	%

At the conclusion of each rental, the rented equipment is thoroughly inspected in accordance with requirements set by the original equipment manufacturer and Occupational Safety and Health Administration (OSHA). If maintenance or repairs are required, they are scheduled and completed prior to the next rental. At the start of the next rental, another inspection is made to ensure that the equipment is in a rent ready condition and compliant with the inspection requirements. We have extensive capabilities to perform major repair and reconditioning of the cranes and attachments. This type of activity is done on an as-needed basis to ensure that the equipment provides a high level of availability (uptime) when on rent.

We maintain a direct relationship with Manitowoc, Liebherr, Tadano, Mantis, Little Giant, Manitex and Lull, our principal suppliers, and have developed strong long-term relationships with them.

Sales and Marketing

Over its operating history, Essex has expanded its infrastructure of service centers and storage yards to key geographical locations across the United States in order to serve customers in a timely and efficient manner. Essex significantly expanded its reach into the Western and Northwestern United States, Alaska, Hawaii and Guam with the Coast Acquisition. Essex currently operates approximately 20 service centers and storage yards giving it the ability to service customers throughout North America. Essex employs a sales and marketing team across the country, each of whom covers a specific geographic region and reports directly to a senior management executive. Rather than segmenting the fleet by geography or salesperson, the fleet is allocated based upon factors such as rental financial return, customer mix and project mix. As such, each salesperson is highly incentivized to optimize fleet’s financial returns and sales mix.

We market our business to potential customers through advertising, promotion, membership in construction trade associations and attendance at various meetings and trade shows. In addition Essex Crane’s and Coast Crane’s web sites are designed with the goal of being very useful to engineers and designers who determine how a construction project will be built, as well as equipment and project managers who are responsible for the selection of the cranes that will be used to complete the project. Essex’s management believes that Essex Crane’s and Coast Crane’s web sites accomplish this goal by providing more comprehensive information regarding our equipment and the capacities and specifications of that equipment than may be readily available from other sources.

Essex Crane’s and Coast Crane’s sales teams use their extensive relationships with customers and potential users of cranes and other construction equipment to identify potential rental opportunities. This, combined with Essex Crane’s and Coast Crane’s reputations and brand value, contributes significantly to their sales activity.

In recent years, Essex Crane has enhanced this traditional method of lead generation with two lead-generation sales systems. The lead generation systems used by Essex Crane to collect information regarding construction activity from a variety of public records, including building permits. This information is then electronically sorted and filtered, using Essex Crane’s input to focus on jobs that most likely will require a large lattice boom crawler crane. This output is sent directly to the regional sales manager on the Essex Crane sales team who is responsible for the geographic area in which the project will be built. Essex Crane’s management believes that these methods provide a high degree of market visibility and awareness to Essex Crane’s sales team and management. Essex intends to incorporate these lead generation sales systems at Coast Crane during 2011.

Essex Crane operates a customized rental information management system through which detailed operational and financial information is available on a real time basis. The system is also used to maintain a detailed database of quoting activity for projects on which crawler crane equipment will be required. Management and sales personnel use this information to closely monitor business activity by piece of equipment, looking at customer trends and proactively responding to changes in the heavy lift marketplace. Essex Crane believes that its disciplined fleet management process, with its focus on project duration and lead time, as well as customer demand, enables Essex Crane to maximize utilization and rental rates. Essex also intends to incorporate its customized rental information management system at Coast Crane during 2011.

Customers and end markets

We serve a variety of customers throughout North America, many of which are large engineering and construction firms focused on large infrastructure and infrastructure-related projects that require significant lifting capacity and high mechanical reliability. For the year ended December 31, 2010, Essex Crane generated approximately 27%, 22%, 16% and 16% of total revenue from the transportation, industrial/marine, petrochemical, and levee construction end markets, respectively. Because of the scale and duration of these projects, rental agreement periods for equipment with heavier lifting capacities range from 4-18 months and average approximately 7 months. This provides us with better future revenue visibility and project lead generation times than our competitors. Our revenue generation model has been significantly expanded to lower lifting capacity cranes and other construction equipment that is commonly rented for shorter periods of time and generally serve residential and smaller commercial construction projects. We generated approximately $0.5 million and $3.0 million of our total revenue from foreign countries for the years ended December 31, 2010 and 2009.

Our end-markets incorporate construction and repair and maintenance projects in the following key sub-sectors:

industrial /marine – offshore facilities, marine facilities and other industrial facilities;

power – power plants, cogeneration power and wind power;

Transportation and infrastructure – airports, port facilities, bridges, roads, levees and canals;

petrochemicals – offshore platforms, refineries, petrochemical plants and pipelines;

sewer and water – sewers, treatment plants and pumping plants; and

general building - sports arenas, hospitals, commercial and residential.

Many of the market sectors we serve have been adversely affected by the weakening economy and difficult commercial credit environment. Management believes that, in the long-term, our strong niche market position and improvements in our fleet due to investment in new cranes combined with the diversification in our overall fleet of rental equipment and the addition of new lines of business, such as retail equipment and spare parts sales achieved by the Coast Acquisition will provide opportunities for future growth. Management bases such belief on the assumption that, in the long-term, there will be improvements in our customers’ ability to obtain financing, including credit, for infrastructure projects. We cannot assure you that our customers’ access to financing for infrastructure projects, including credit, will improve.

After experiencing increasing revenues from 2004 through 2008, 2009 and 2010 results were significantly lower and negatively impacted by uncertainty in the end markets in which Essex Crane’s customers operate caused by declining economic conditions and available credit. Total revenues for the years ended December 31, 2010 and 2009 were $41.5 and $52.1 million, respectively; a significant decline from the pro forma revenues of $85.9 million for the year ended December 31, 2008. As of December 31, 2010, Essex Crane’s estimated 12 month backlog stood at approximately $12.0 million. In light of the recent completion of the Coast Acquisition, and the fact that Coast Crane’s predecessor had been operating in bankruptcy for two months prior to the Coast Acquisition, we have not estimated a 12 month backlog for our operations through Coast Crane.

Strategy

Our management anticipates that the following longer-term market trends will increase demand for cranes, attachments and other construction equipment in the future and over longer periods:

increased levels of infrastructure spending, including the construction of major bridges, airports and water treatment facilities;

increased demand for electric power will require construction of additional power plants, potentially including nuclear power plants;

continued higher energy costs will increase construction activity to improve and expand efficiencies and capacities at refineries, offshore production suppliers, and petrochemical facilities;

increased environmental awareness will increase demand for construction of alternative energy sources such as wind and solar power, and clean air requirements including SO2 scrubbers and ash precipitators;

continued tendency for contractors to rent lattice boom crawler cranes, rough terrain cranes, tower cranes and boom trucks rather than own their own equipment; and

modular construction methods, including pre-fabrication, which generally require greater use of cranes, will continue to increase because of potential cost savings and site efficiencies.

Increase market share and pursue profitable growth opportunities. Through our fleet size, geographically dispersed service centers and storage yards, which allow us to provide equipment for projects throughout the United States and, to a lesser extent, Canada, Mexico, Guam and the South Pacific and track record of customer service, we intend to take advantage of these trends in order to maximize the opportunities for profitable growth within the North American crane and construction equipment rental market by:

optimizing fleet allocation across geographic regions, customers and end-markets to maximize utilization and rental rates;

focusing on superior customer service and providing a superior fleet of cranes and attachments as compared to our competitors;

leveraging our leading fleet size and composition across the country to increase our customer base and share of its existing customer base’s spending in the sector;

expanding our rental products by offering other crane types that can be rented “bare”;

increase our opportunities to engage with customers through distribution sales of new and used cranes and parts and service;

continuing to align incentives for local sales people and managers with both profit and growth targets;

pursuing additional selected acquisitions of other smaller, more regionally focused crane rental fleets or companies complementary to existing operations;

expanding used equipment sales by positioning used cranes for refurbishment and re-sale; and

establishing and maintaining existing relationships with international market players and crane manufacturers for future equipment purchase and sale opportunities.

Further drive profitability, cash flow and return on capital . Our management believes there are significant opportunities to further increase the profitability of our operations by:

continuing to re-position the fleet by selling older, lighter tonnage cranes and purchasing newer, heavier lifting capacity cranes that command higher margins and are in greater demand due to their ability to service large infrastructure-related projects;

actively managing the quality, reliability and availability of our fleet and offering superior customer service in order to support a competitive pricing strategy;

evaluating each new potential rental contract opportunity based on strict return guidelines and allocating its fleet accordingly;

using our size and national market presence to achieve economies of scale in capital investment; and

leveraging our extensive customer relationships at Essex Crane and Coast Crane to aid in the rental of equipment and selling of new and used equipment.

Competition

The heavy lift equipment rental industry is highly fragmented throughout North America, with a variety of smaller companies, many of which are family-owned, operating on a regional or local scale. Companies that have a national focus generally provide heavy lift rental services across a spectrum of crane types such as all-terrain, truck and tower cranes as well as crawlers. With a fleet of over 1,000 cranes and other construction equipment and unparalleled customer service and support, Essex supplies a wide variety of innovative lifting solutions for construction projects related to power generation, petro-chemical, refineries, water treatment and purification, bridges, highways, hospitals, shipbuilding, offshore oil fabrication and industrial plants, and commercial and residential construction. Our fleet of equipment is one of the largest fleets in North America, which allows us to develop greater expertise in comparison to our competitors, but still allows for economies of scale advantages with regard to purchasing power and allocation of rental equipment resources to the market. Our principal competitors include ALL Erection & Crane Rental, Bigge Crane and Rigging, Co., Lampson International, Maxim Crane Works, M.D., Morrow Equipment Rental and AmQuip Crane Corp. Some of these competitors operate nationally and others are regional.

We believe that there are six key factors differentiating us from our competitors:

heavy lifting equipment focus – We are primarily focused on heavy lift mobile and tower cranes dedicated to infrastructure and other large construction projects. Other companies also focus on other crane types with lower lift capacities and smaller types of construction rental equipment. Although the Company acquired some smaller types of construction rental equipment (such as personnel carriers and other lift equipment) in conjunction with the acquisition of Coast Crane’s assets, these smaller types of construction rental equipment account for less than 5% of the total fleet value;

national capabilities – some competitors offer national service capabilities, however most are regional players. Our management believes that a national presence provides the ability to fully service engineering and construction firms with a similar national footprint;

“bare” rental – We do not rent our equipment with an operator. While some other rental companies also rent equipment bare, generally equipment is rented with an operator. Renting equipment on a bare rental basis minimizes liability for the Company, provides a more efficient operating platform and business model;

our distribution business at Coast Crane provides the opportunity to provide product support for contractor owned cranes, which may lead to the opportunity to either sell or rent them additional cranes in the future;

outsourced transport – unlike many of our competitors, we do not operate an in-house transport department. In management’s view, this allows us to focus on core competencies and removes the need for capital investment in truck fleets and associated infrastructure; and

publicly traded company listed on the NASDAQ Capital Market with access to public capital to fund our growth.

Competition in the heavy lift equipment rental segment is strong and is defined by equipment availability, reliability, service and price. Our management believes that our extensive crane and attachment fleet, national presence and sales force, client relationships and equipment allocation and management systems provide us with a good scale and competitive positioning within the industry relative to our peers.

Risk of Loss and Insurance

The operation of lattice boom crawler cranes, tower cranes and rough terrain cranes includes risks such as a mechanical and structural failures, physical damage, property damage, operator overload or error, equipment loss, or business interruptions. We primarily rent our cranes and attachments on a “bare” lease and seldom supply the operator or perform the routine scheduled maintenance on the equipment. We require the lessee to supply a primary insurance policy covering the loss of the equipment and general liability for claims initiated by an accident, storm, fire or theft for most rental agreements. We also require that Essex be named as an additional insured and the loss payee on the lessee’s insurance policy. Our lease agreement also requires the lessee to indemnify us for any injury, damage and business interruption caused by the crane or the attachment while it is being leased. We maintain secondary insurance coverage for any claim not covered by the lessee’s insurance, however, we cannot guarantee that our insurance or the insurance of our customers will cover all claims or risks or that any specific claim will be paid by an insurer.

Government Regulation

Federal, state and local authorities subject our facilities and operations to requirements relating to environmental protection, occupational safety and health and many other subjects. These requirements, which can be expected to change and expand in the future, impose significant capital and operating costs on our business.

The environmental laws and regulations govern, among other things, the discharge of substances into the air, water and land, the handling, storage, use and disposal of hazardous materials and wastes and the cleanup of properties affected by pollutants. Environmental laws also impose obligations and liability for the investigation and cleanup of properties affected by hazardous substance spills or releases. We can be subject to liability for the disposal of substances which we generate and for substances disposed of on property which we own or operate, even if such disposal occurred before our ownership or occupancy. Accordingly, we may become liable, either contractually or by operation of law, for investigation, remediation and monitoring costs even if the contaminated property is not presently owned or operated by us, or if the contamination was caused by third parties during or prior to our ownership or operation of the property. In addition, because environmental laws frequently impose joint and several liability on all responsible parties, we may be held liable for more than our proportionate share of environmental investigation and cleanup costs. Contamination and exposure to hazardous substances can also result in claims for damages, including personal injury, property damage, and natural resources damage claims. Some of our properties contain, or previously contained, above-ground or underground storage tanks and/or oil-water separators. Given the nature of our operations (which involve the use and disposal of petroleum products, solvents and other hazardous substances for fueling and maintaining our cranes, attachments, equipment and vehicles) and the historical operations at some of our properties, we may incur material costs associated with soil or groundwater contamination. Under environmental and safety laws, we may be liable for, among other things, (i) the costs of investigating and remediating contamination at our sites as well as sites to which we sent hazardous wastes for disposal or treatment regardless of fault and (ii) fines and penalties for non-compliance. We incur ongoing expenses associated with the performance of appropriate investigation and remediation activities at certain of our locations.

Our operations are also subject to federal, state and local laws and regulations pertaining to occupational safety and health, most notably standards promulgated by OSHA. We are subject to various OSHA regulations that primarily deal with maintaining a safe work-place environment. OSHA regulations require us, among other things, to maintain documentation of work-related injuries, illnesses and fatalities and files for recordable events, complete workers compensation loss reports and review the status of outstanding worker compensation claims, and complete certain annual filings and postings. We may be involved from time to time in administrative and judicial proceedings and investigation with these governmental agencies, including inspections and audits by the applicable agencies related to our compliance with these requirements. During 2010 and 2009, we did not incur material expenses related to environmental investigations or remediation activities, and management does not expect to incur such expenses in the near term. There can be no assurance, however, that we will not incur such expenditures in the future.

Climate Change

To the extent that climate change does occur, we may experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage or a decrease in demand for rental equipment located in or potentially rented in these areas affected by these conditions. Should the impact of climate change be material in nature, including destruction of our rental equipment assets or property, plant and equipment, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected.

In addition, developments in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our rental equipment without a corresponding increase in revenue.

Customers

Our customer base is highly diversified and ranges from Fortune 500 companies to small businesses. Our largest customer accounted for less than 10% of our revenues in 2010 and our top 5 customers accounted for less than 21% of our revenues in 2010. Historically, Essex Crane has typically retained over 40% of our customer base year-over-year while adding new customers as we attempt to grow the business.

Our customer base varies by branch and is determined by several factors, including the equipment mix and marketing focus of the particular branch as well as the business composition of the local economy. Our customers include:

•

construction companies that use equipment for constructing and renovating commercial buildings, warehouses, industrial and manufacturing plants, office parks, airports, residential developments and other facilities;

•

industrial companies—such as manufacturers, refineries, chemical companies, paper mills, railroads, ship builders, off-shore fabricators and utilities, including wind farms - that use equipment for plant maintenance, upgrades, expansion and construction;

•

municipalities that require equipment for a variety of purposes; and

•

contractors performing repair and maintenance to major renovation projects for owners of commercial and industrial facilities, such as power companies.

Suppliers

Our strategic approach with respect to our suppliers is to maintain the minimum number of suppliers per category of equipment that can satisfy our anticipated volume, location and business requirements. This approach is designed to ensure the terms we negotiate are competitive and that there is sufficient product available to meet anticipated customer demand. We utilize a comprehensive selection process to determine our equipment vendors. We consider product capabilities and industry position, product liability history and financial strength.

We have been making ongoing efforts to consolidate our vendor base in order to further increase our purchasing power. We estimate that our largest supplier accounted for approximately 31.0% of our 2010 total purchases, including equipment for rental, and that our 2 largest suppliers accounted for approximately 35.4% of such purchases. We believe we have sufficient alternative sources of supply available for each of our equipment categories.

Seasonality

Although our business is not significantly impacted by seasonality, the demand for our rental equipment tends to be lower during the winter months. The level of equipment rental activities are directly related to commercial and industrial construction and maintenance activities. Therefore, equipment rental performance will be correlated to the levels of current construction activities. The severity of weather conditions can have a temporary impact on the level of construction activities.

Employees

As of December 31, 2010, we had 276 employees, 6 of which are senior management. Approximately 6 of our staff are affiliated with trade unions. Neither Essex Crane nor Coast Crane has in the past 12 years experienced any work stoppage as a result of issues with labor or with unions and believes that this fact is a testament to our relationship with our employees. To our knowledge there is no current campaign by any union to organize additional employees of Essex Crane or Coast Crane.

Availability of Information

The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (the “Exchange Act”). The Company therefore files periodic reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). Such reports may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549, or by calling the SEC at (800) SEC-0330. In addition, the SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other information. Financial and other information can also be accessed on the Investor Relations section of the Company’s website at http://www.essexcrane.com. The Company makes available through its website, free of charge, copies of its annual report on Form 10-K/A, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. Also posted on Essex Crane’s website are the Company’s corporate governance documents, the charters of the Audit Committee, Nominating Committee and Compensation Committee. The reference to our website is textual in reference only, and information on the Company’s website is not incorporated into this Form 10-K/A or the Company’s other securities filings and is not a part of them.

Item 1A.

Risk Factors

Our business may be adversely affected by changing economic conditions beyond our control, including decreases in construction or industrial activities.

The crane rental and distribution industry’s revenue is closely tied to conditions in the end markets in which our customers operate and more broadly to general economic conditions. Our products are used primarily in infrastructure-related projects and other construction projects in a variety of industries (including the power, transportation infrastructure, petrochemical, municipal construction and industrial and marine industries). Consequently, the economic downturn, and particularly the weakness in our end markets may lead to a significant decrease in demand for our equipment or depress equipment rental and utilization rates and the sales prices for equipment we sell. During periods of expansion in Essex Crane’s and Coast Crane’s respective end markets, Essex Crane and Coast Crane generally have benefited from increased demand for their products. Conversely, during recessionary periods in Essex Crane’s and Coast Crane’s end markets, they have been adversely affected by reduced demand for their products. Weakness in Essex Crane’s or Coast Crane’s end markets, such as a decline in non-residential construction, infrastructure projects or industrial activity, may in the future lead to a decrease in the demand for our equipment or the rental rates or prices we can charge. Factors that may cause weakness in our end markets include but are not limited to:

slowdowns in construction in the geographic regions in which we operate;

reductions in residential and commercial building construction;

reductions in corporate spending for plants, factories and other facilities; and

reductions in government spending on highways and other infrastructure projects.

Future declines in construction, infrastructure projects and industrial activity could adversely affect our operating results by decreasing revenues and profit margins. Continued weakness or further deterioration in the construction and industrial sectors caused by these or other factors could have a material adverse effect on our financial position, results of operations and cash flows in the future and may also have a material adverse effect on residual values realized on the disposition of our rental fleet. Declines in our order backlog should be considered as an indication of a decline in the strength of the non-residential construction markets.

Fluctuations in the stock market, as well as general economic and market conditions, may impact the market price of our securities.

The market price of our securities have been and may be subject to significant fluctuations in response to general economic changes and other factors including, but not limited to:

variations in our quarterly operating results or results that vary from investor expectations;

changes in the strategy and actions taken by our competitors, including pricing changes;

securities analysts’ elections to not cover our common stock, or, if analysts do elect to cover our common stock, changes in financial estimates by analysts, or a downgrade of our common stock or of our sector by analysts;

announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

loss of a large supplier;

investor perceptions of us and the equipment rental and distribution industry;

our ability to successfully integrate acquisitions and consolidations; and

national or regional catastrophes or circumstances and natural disasters, hostilities and acts of terrorism.

Broad market and industry factors may materially reduce the market price of our securities, regardless of our operating performance. In addition, the stock market in recent years has experienced price and volume fluctuations that often have been unrelated or disproportionate to the operating performance of companies. These fluctuations, as well as general economic and market conditions, including to those listed above and others, may affect the market price of our securities.

We are dependent upon key personnel whose loss may adversely impact our business and our results of operations.

We depend on the expertise, experience and continued services of our senior management employees, especially Ronald Schad, our President and Chief Executive Officer, and Martin Kroll, our Chief Financial Officer and Senior Vice President, as well as senior management employees of our operating subsidiaries. Mr. Schad has acquired specialized knowledge and skills with respect to Essex Rental Corp. and its subsidiaries’ operations and most decisions concerning the business of Essex Rental Corp. are made or significantly influenced by him. The loss of any of the foregoing individuals or other senior management employees, without a proper succession plan, or an inability to attract or retain other key individuals, could materially adversely affect us. We seek to compensate and incentivize our key executives, as well as other employees, through competitive salaries and bonus plans, but there can be no assurance that these programs will allow us to retain key employees or hire new key employees. As a result, if Messrs. Schad, Kroll, or other senior executives of our operating subsidiaries were to leave, we could face substantial difficulty in hiring qualified successors and could experience a loss in productivity while any such successors obtain the necessary training and experience. In connection with the acquisition of Essex Crane, we entered into three-year employment agreements with each of Messrs. Schad, Kroll, Erwin and O’Rourke. However, these contracts expire in October 2011. As of the date of this filing, we have not entered into employment agreements with any other members of senior management.

Our dependence on a small number of crane manufacturers poses a significant risk to our business and prospects.

Essex Crane’s crane fleet has historically been comprised of only Manitowoc and Liebherr crawler cranes. Similarly, Coast Crane’s fleet of cranes available for rent has been comprised primarily of cranes provided by Manitowoc subsidiaries, including Potain, Grove and National. In addition, Coast Crane serves as a distributor of Tadano, Manitex, Broderson and JLG lifting equipment. Coast Crane’s crane and equipment distribution business depends upon its exclusive dealer partnerships with leading crane and equipment manufacturing companies and many of such relationships can typically be terminated on short notice. Given Essex Crane’s reliance on two manufacturers for its entire fleet of crawler cranes and Coast Crane’s reliance on a limited number of manufacturers for a majority of its rental fleet and distribution activities, and limited alternative sources of cranes, if any of these manufacturers were unable to meet expected manufacturing timeframes due to, for example, natural disasters or labor strikes, we may experience a significant increase in lead times to acquire new equipment or may be unable to acquire such equipment at all. Any inability to acquire the model types or quantities of new equipment on a timely basis to replace older, less utilized equipment could adversely impact our future financial condition or results of operations.

In addition, Essex Crane has developed strong relationships with Manitowoc and Liebherr and Coast Crane has developed strong relationships with its strategic partners. There can be no assurance that Essex Crane or Coast Crane will be able to maintain their relationships with these suppliers. Termination of Essex Crane’s or Coast Crane’s relationship with these suppliers could materially and adversely affect our business, financial condition or results of operations if such termination resulted in Essex Crane or Coast Crane being unable to obtain adequate rental and sales equipment from other sources in a timely manner or at all.

The cost of new equipment we use in our rental fleet may increase, which may cause us to spend significantly more for replacement equipment, and in some cases we may not be able to procure equipment at all due to supplier constraints.

Our business model is capital intensive and requires significant continual investment in new cranes and equipment to meet customer demand. As a result, our financial condition and results of operations may be significantly impacted by a material change in the pricing of new cranes and equipment that we acquire. Such changes may be driven by a number of factors which include, but are not limited to:

steel prices – due to the high tensile steel component of the cranes, significant changes in the price of steel can materially change the cost of acquiring a crane;

global demand – the market for crawler cranes is global and significant growth in overseas demand for cranes could materially increase the cost of new cranes regardless of US economic conditions;

inflation – overall inflationary conditions in the US may impact the operating costs of one of our key suppliers and therefore impact crane or other lifting equipment for customers such as Essex Crane and Coast Crane; and

currency fluctuations – as one of Essex Crane’s principal suppliers is based in Europe, devaluation of the US dollar (as compared to the Euro) may materially increase the cost of acquiring cranes and attachments; conversely, inflation of the value of the US dollar may adversely affect Essex Crane’s revenues from international sales of used cranes and attachments and adversely affect Coast Crane’s revenues from sales of new and used cranes, spare parts and related equipment to the extent that inflation allows foreign suppliers to offer competing products on more attractive terms.

While we can manage the size and aging of our fleet generally over time, eventually we must replace older equipment in our fleet with newer models. We would be adversely impacted if we were unable to procure cranes to allow us to replace our older and, in the case of Essex Crane, smaller capacity crawler cranes over time as anticipated.

If we are unable to obtain additional capital as required, we may be unable to fund the capital outlays required for the success of our business, including those relating to purchasing equipment and to acquiring new rental locations.

Although we intend to market each of Essex Crane and Coast Crane under separate trade names for the foreseeable future, our ability to compete, sustain our growth and expand our operations through new locations largely depends on access to capital. If the cash we generate from the operations of Essex Crane and Coast Crane, together with cash on hand and cash that we may borrow under their respective credit facilities, or short-term debt obtained by either Essex, Essex Finance or Coast Crane is not sufficient to implement our growth strategy and meet our capital needs, we will require additional financing. However, we may not succeed in obtaining additional financing on terms that are satisfactory to us or at all. In addition, our ability to obtain additional financing collateralized by the assets of Essex Crane and Coast Crane and our ability to obtain additional financing on a secured or unsecured basis are restricted by Essex Crane’s and Coast Crane’s respective credit facilities. If we are unable to obtain sufficient additional capital in the future, we may be unable to fund the capital outlays required for the success of our business, including those relating to purchasing crane attachments and other lifting equipment and to new service locations or storage yards. Furthermore, any additional indebtedness that we do incur may make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures.

If we are successful in our efforts to expand our operations, through new locations, acquisitions or additional equipment, such expansion may result in risks and costs associated with business start-up and integration.

The opening of new service locations or storage yards or the completion of any future acquisitions of other equipment rental companies may result in significant start-up or transaction expenses and risks associated with entering new markets in which we have limited or no experience. New service locations and storage yards require significant up-front capital expenditures and may require a significant investment of our management’s time to successfully commence operations. New locations may also require a significant amount of time to provide an adequate return on capital invested, if any. In addition, in the event that Essex Crane or Coast Crane were to acquire different types of cranes, attachments or other lifting equipment than those they currently rent, or different classes of rental equipment, there can be no assurance that our customers would choose to rent such items from us or would do so at such rates or on such terms, that would be acceptable to us.

Our ability to realize the expected benefits from the Coast Crane acquisition or any future acquisitions of other equipment rental companies depends in large part on our ability to integrate and consolidate the new operations with our existing operations in a timely and effective manner and to otherwise implement our business plan for the combined business. In addition, we may fail or be unable to discover certain liabilities of any acquired business, including liabilities relating to noncompliance with environmental and occupational health and safety laws and regulations. Any significant diversion of management’s attention from our existing operations, the loss of key employees or customers of any acquired business, or any major difficulties encountered in opening new locations or integrating new operations, including, but not limited to those arising from inconsistencies in controls, procedures or company policies, could have an adverse effect on our business, financial condition or results of operations.

The crane rental, distribution and repair service industries are competitive.

The crane rental and distribution industries are highly fragmented. The crane rental industry is served by companies who focus almost exclusively on crane and lifting equipment rental. Essex Crane and Coast Crane compete directly with regional, and local crane rental companies and a limited number of national crane rental companies (including ALL Erection & Crane, Lampson International, Morrow Equipment Rental, Amquip Crane Corp., Maxim Crane Works and Biggie Crane). There can be no assurance that we will not encounter increased competition from existing competitors or new market entrants (including a newly-formed competitor created by consolidating several existing regional competitors) that may be significantly larger and have greater financial and marketing resources.

Our management believes that rental rates, fleet availability and size and quality are the primary competitive factors in the crane rental industry. Our management also believes that price, equipment mix and the quality and availability of post-sale repair and spare part services are the primary competitive factors in the crane distribution industry. From time to time, we or our competitors may attempt to compete aggressively by lowering rental rates or prices or offering more favorable rental or sale terms. Competitive pressures could adversely affect our revenues and operating results by decreasing our market share or depressing the rental rates or sale prices for our equipment. To the extent we lower rental rates or sale prices, offer different rental or sale terms or increase our fleet in order to retain or increase market share, our operating margins would be adversely impacted.

Our status as a public company may be a competitive disadvantage.

We are and will continue to be subject to the disclosure and reporting requirements of applicable US securities laws and rules promulgated by The NASDAQ Stock Market. Many of our principal competitors are not subject to these disclosure and reporting requirements or the NASDAQ rules. As a result, we may be required to disclose certain information and expend funds on disclosure and financial and other controls that may put us at a competitive disadvantage to our principal competitors.

We may encounter substantial competition in our efforts to expand our operations.

An element of our growth strategy is to continue to expand by opening new service centers and equipment storage yards. The success of our growth strategy depends in part on identifying sites for new locations at attractive prices. Zoning restrictions may in the future prevent us from being able to open new service centers or storage yards at sites we have identified. We may also encounter substantial competition in our efforts to acquire other crane rental companies, which may limit the number of acquisition opportunities and lead to higher acquisition costs.

The crane rental industry has inherent operational risks that may not be adequately covered by our insurance.

We may not be adequately insured against all risks and there can be no assurance that our insurers will pay a particular claim. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement crane in the event of a loss. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. Our insurance policies will also contain deductibles, limitations and exclusions which, although management believes are standard in the heavy lift crane rental industry, may nevertheless increase our costs. Moreover, certain accidents or other occurrences may result in intangible damages (such as damage to our reputation) for which insurance may not provide an adequate remedy.

We may not be able to renew our insurance coverage on terms favorable to us that could lead to increased costs in the event of future claims.

When our current insurance policies expire, we may be unable to renew such coverage upon terms acceptable to us, if at all. If we are able to renew our coverage we expect that the premium rates and deductibles may increase as a result of general rate increases for this type of insurance as well as Essex Crane’s and Coast Crane’s historical claims experience and that of our competitors in the industry. If we cannot obtain insurance coverage, it could adversely affect our business by increasing our costs with respect to any claims. Additionally, existing or future claims may exceed the level of our present insurance, and our insurance may not continue to be available on economically reasonable or desirable terms, if at all.

We may not be able to generate sufficient cash flows to meet our debt service obligations.

Our ability to make payments on our indebtedness will depend on our ability to generate cash from future operations. As of December 31, 2010, Essex Crane has a revolving credit facility which provides for an aggregate borrowing capacity of $190.0 million of which $158.3 million was outstanding, Coast Crane has a revolving credit facility which provides for an aggregate borrowing capacity of $75.0 million, of which $53.9 million was outstanding and Coast Crane Ltd. has a revolving credit facility which provides for an aggregate borrowing capacity of $5.0 million, of which $2.8 million was outstanding. Each facility is secured by a first priority lien on all of the applicable borrower’s assets and, in the event of default; the lenders generally would be entitled to seize the collateral. We also have approximately $8.6 million of other term debt, $4.9 million of which is unsecured while the remaining amount is secured by specific equipment.

In the event of a prolonged economic downturn, our business may not generate sufficient cash flow from operations or from other sources to enable it to repay its indebtedness and to fund its other liquidity needs, including capital expenditure requirements and may not be able to refinance any of its indebtedness on commercially reasonable terms, or at all. If we cannot service or refinance our indebtedness, we may have to take actions such as asset divestitures, seeking additional equity or reducing or delaying capital expenditures, any of which could have an adverse effect on our operations. Additionally, we may not be able to effect such actions, if necessary, on commercially reasonable terms, or at all.

In the event we or any of our subsidiaries incur further debt obligations in relation to acquisitions, or for any other purpose, the exposure to the risks outlined above will increase accordingly.

Decreases in the appraised value of our rental fleet and other assets securing our revolving credit facilities may result in an inability to meet our financial obligations.

The amounts available for borrowing under our revolving credit facilities are determined based on the value of assets securing those obligations, including rental equipment, company vehicles, parts and equipment inventories and accounts receivables. The value of rental equipment and company vehicles are determined based on the opinion of an independent appraisal firm engaged by the respective financial institutions. A decline in the appraised value of these assets would directly impact our liquidity and as a result, we may not be able to meet our financial obligations.

Our revolving credit facilities contain restrictive covenants that will limit our corporate activities.

The revolving credit facilities of Essex Crane and Coast Crane impose operating and financial restrictions that will limit, among other things, their ability to:

create additional liens on their assets;

make investments and capital expenditures above a certain threshold;

incur additional indebtedness;

engage in mergers or acquisitions;

pay dividends or redeem outstanding capital stock;

sell any of their respective cranes or any other assets outside the ordinary course of business; and

change their respective businesses.

Essex Crane and Coast Crane will need to seek permission from their respective lenders in order for Essex Crane or Coast Crane, as applicable, to engage in some corporate actions. Essex Crane’s and Coast Crane’s lender’s interests may be different from those of Essex Crane or Coast Crane, and no assurance can be given that Essex Crane or Coast Crane will be able to obtain their lender’s permission when needed. This may prevent Essex Crane or Coast Crane from taking certain actions that are in their best interests.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our operating results could be harmed.

We have identified a material weakness in our internal control over financial reporting which pertains to controls relating to the process of accounting for state income taxes. See “Item 9A—Controls and Procedures—Management’s Report on Internal Control Over Financial Reporting.” As of the date of this annual report on Form 10-K, we have implemented remedial measures related to the identified material weakness. The requirements of Section 404 of the Sarbanes-Oxley Act are ongoing and also apply to future years. We expect that our internal control over financial reporting will continue to evolve as our business develops. Although we are committed to continue to improve our internal control processes and we will continue to diligently and vigorously review our internal control over financial reporting in order to ensure compliance with the Section 404 requirements, any control system, regardless of how well designed, operated and evaluated, can provide only reasonable, not absolute, assurance that its objectives will be met. Therefore, we cannot be certain that in the future additional material weaknesses or significant deficiencies will not exist or otherwise be discovered. If our efforts to remediate the weakness identified are not successful or if other deficiencies occur, these weaknesses or deficiencies could result in misstatements of our results of operations, additional restatements of our consolidated financial statements, a decline in our stock price and investor confidence, or other material effects on our business, reputation, results of operations, financial condition or liquidity.

We are subject to numerous environmental laws and regulations that may result in us incurring unanticipated liabilities, which could have an adverse effect on our operating performance.

Federal, state and local authorities subject our facilities and operations to requirements relating to environmental protection. These requirements can be expected to change and expand in the future, and may impose significant capital and operating costs on our business.

Environmental laws and regulations govern, among other things, the discharge of substances into the air, water and land, the handling, storage, use and disposal of hazardous materials and wastes and the cleanup of properties affected by pollutants. If either Essex Crane or Coast Crane violates environmental laws or regulations, it may be required to implement corrective actions and could be subject to civil or criminal fines or penalties. There can be no assurance that Essex Crane and/or Coast Crane will not have to make significant capital expenditures in the future in order to remain in compliance with applicable laws and regulations or that Essex Crane and/or Coast Crane will comply with applicable environmental laws at all times. Such violations or liability could have an adverse effect on our business, financial condition and results of operations. Environmental laws also impose obligations and liability for the investigation and cleanup of properties affected by hazardous substance spills or releases. Essex Crane or Coast Crane can be subject to liability for the disposal of substances which it generates and for substances disposed of on property which it owns or operates, even if such disposal occurred before its ownership or occupancy. Accordingly, Essex Crane or Coast Crane may become liable, either contractually or by operation of law, for investigation, remediation and monitoring costs even if the contaminated property is not presently owned or operated by Essex Crane or Coast Crane, or if the contamination was caused by third parties during or prior to Essex Crane’s or Coast Crane’s ownership or operation of the property. In addition, because environmental laws frequently impose joint and several liability on all responsible parties, Essex Crane or Coast Crane may be held liable for more than its proportionate share of environmental investigation and cleanup costs. Contamination and exposure to hazardous substances can also result in claims for damages, including personal injury, property damage, and natural resources damage claims. Some of the properties of Essex Crane and Coast Crane contain, or previously contained, above-ground or underground storage tanks and/or oil-water separators. Given the nature of the operations of Essex Crane and Coast Crane (which involve the use and disposal of petroleum products, solvents and other hazardous substances for fueling and maintaining its cranes, attachments and vehicles) and the historical operations at some of its properties, Essex Crane and/or Coast Crane may incur material costs associated with soil or groundwater contamination. Future events, such as changes in existing laws or policies or their enforcement, or the discovery of currently unknown contamination, may give rise to remediation liabilities or other claims that may be material.

Environmental requirements may become stricter or be interpreted and applied more strictly in the future. In addition, Essex Crane or Coast Crane may be required to indemnify other parties for adverse environmental conditions that are now unknown to us. These future changes or interpretations, or the indemnification for such adverse environmental conditions, could result in environmental compliance or remediation costs not anticipated by us, which could have a material adverse effect on our business, financial condition or results of operations.

We are subject to numerous occupational health and safety laws and regulations that may result in us incurring unanticipated liabilities, which could have an adverse effect on our operating performance.

Our operations are subject to federal, state and local laws and regulations pertaining to occupational safety and health, most notably standards promulgated by the Occupational, Safety and Health Administration, or OSHA. Essex Crane and Coast Crane are subject to various OSHA regulations that primarily deal with maintaining a safe work-place environment. OSHA regulations require Essex Crane and Coast Crane, among other things, to maintain documentation of work-related injuries, illnesses and fatalities and files for recordable events, complete workers compensation loss reports and review the status of outstanding worker compensation claims, and complete certain annual filings and postings. Essex Crane or Coast Crane may be involved from time to time in administrative and judicial proceedings and investigation with these governmental agencies, including inspections and audits by the applicable agencies related to its compliance with these requirements.

To date, compliance by Essex Crane and Coast Crane with these and other applicable safety regulations has not had a material effect on our results of operations or financial condition. However, the failure of either Essex Crane or Coast Crane to comply with these and other applicable requirements in the future could result in fines and penalties to Essex Crane or Coast Crane and require us to undertake certain remedial actions or be subject to a suspension of business, which, if significant, could materially adversely affect our business or results of operations. Moreover, the involvement by either Essex Crane or Coast Crane in any audits and investigations or other proceedings could result in substantial financial cost to us and divert our management’s attention. Several recent highly-publicized accidents involving cranes (none of which involved cranes or attachments provided by Essex Crane or Coast Crane) could result in more stringent enforcement of work-place safety regulations, especially with respect to companies which rent older cranes and attachments. Additionally, future events, such as changes in existing laws and regulations, new laws or regulations or the discovery of conditions not currently known to us, may give rise to additional compliance or remedial costs that could be material.

Safety requirements may become stricter or be interpreted and applied more strictly in the future. These future changes or interpretations could have a material adverse effect on our business, financial condition or results of operations.

There are a substantial number of shares of our common stock available for resale in the future that may cause a decrease in the market price of our common stock.

In connection with our acquisition of Essex Crane, Holdings issued its Class A Membership Interests to members of Essex Crane’s senior management. Such membership interests may be exchanged for up to an aggregate of 632,911 shares of our common stock, subject to certain adjustments. We have granted registration rights to Essex Crane’s senior management with respect to the shares of our common stock issuable upon exchange of the Retained Interests, which entitle Essex Crane’s senior management to file a registration statement with respect to such shares under certain circumstances. We also granted registration rights with respect to 3,294,700 shares of our common stock held by Kirtland Capital Company III LLC and Kirtland Capital Partners III LP.

In addition, warrants to purchase an aggregate of 13,295,781 shares of our common stock issued to our initial stockholders, purchasers in our initial public offering and EarlyBirdCapital, Inc. (excluding 1,741,719 shares of our common stock that would have been issuable upon exercise of warrants repurchased by us between November 1, 2008 and December 31, 2009) became exercisable upon the closing of the acquisition of Essex Crane. All of our common stock issuable upon exercise of the warrants was available for resale upon exercise. Lastly, 2,812,500 shares of our common stock purchased by our initial stockholders prior to our initial public offering were released from escrow in November 2009 and are eligible for resale in the public market subject to compliance with applicable law. Our initial stockholders are entitled to demand that we register the resale of their shares of common stock at any time after the date on which their shares are released from escrow. As of December 31, 2010, there were 4,059,556 warrants outstanding that had an expiration date of March 4, 2011. Prior to expiration, the Company received proceeds of approximately $19.8 million for the exercise of 3,955,603 warrants. 103,953 warrants expired worthless on March 4, 2011.

On November 24, 2010, we completed a private placement of 3,300,000 shares of our common stock to six accredited investors and used the proceeds to satisfy a portion of the purchase price for the Coast Crane acquisition. On November 29, 2010, we issued 90,000 warrants to a group of related investors in a private transaction associated with the exercise of assumed debt into the unsecured promissory notes. Such warrants have an exercise price of $0.01 per share, subject to adjustment. If the unsecured promissory notes are repaid in full on or before May 29, 2011, the number of warrants will be reduced to 30,000. The issuance of these shares and warrants resulted in dilution to our existing stockholders.

The presence of this additional number of shares of common stock eligible for trading in the public market may have an adverse effect on the market price of our common stock. In addition, upon exercise of options and warrants to purchase our common stock, the equity interests of our stockholders, as a percentage of the total number of the outstanding shares of common stock, and the net book value of the shares of our common stock will be significantly diluted.

We may issue shares of our common stock and preferred stock to raise additional capital, including to complete a future business combination, which would reduce the equity interest of our stockholders.

Our amended and restated certificate of incorporation authorizes the issuance of up to 40,000,000 shares of common stock, par value $.0001 per share, and 1,000,000 shares of preferred stock, par value $.0001 per share. We currently have 12,639,736 authorized but unissued shares of our common stock available for issuance (after appropriate reservation for the issuance of shares upon full exercise of our outstanding warrants (net of repurchases), employee stock options and unit purchase options, and the number of shares issuable upon exchange of the Retained Interests) and all of the 1,000,000 shares of preferred stock available for issuance. Although we currently have no other commitments to issue any additional shares of our common or preferred stock, we may in the future determine to issue additional shares of our common or preferred stock to raise additional capital for a variety of purposes, including to complete a future acquisition. The issuance of additional shares of our common stock or preferred stock may significantly reduce the equity interest of stockholders and may adversely affect prevailing market prices for our common stock.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Essex Crane leases its headquarters at 1110 Lake Cook Road, Suite 220, Buffalo Grove, Illinois 60089, which consists of 6,680 square feet of office space. Also, Essex Crane currently owns the following properties:

A service center located at 2039 Fulton Springs Road, Alabaster, Shelby County, Alabama 35007. Land area totals 400,752 square feet and building area totals 28,575 feet.

A satellite service center located at 14133 Weld County Road 9.5 Longmont, Weld County, Colorado. The land area of the property totals 409,900 square feet and building area totals 16,000 square feet.

A service center located at 5315 Causeway Boulevard Tampa, Hillsborough County, Florida 33619. Gross land area totals 204,732 square feet and building area totals 18,604 square feet.

A service center located at 303 Peach Lane Arcola, Fort Bend County, Texas 77583. Gross land area totals 710,681 square feet and building area totals 36,342 square feet.

In addition, Essex Crane leases the following properties throughout the United States:

A satellite service center comprising 33,500 square feet of outside storage space located at 6048 193rd Avenue SW, Rochester, WA 98579.

A satellite service center comprising 74,476 square feet of outside storage space located at 1072 Harrisburg Pike, Carlisle, PA 17103.

A service Center comprising 6,000 square feet of warehouse space and approximately three acres of outside storage space located at 15060 Ceres Avenue Fontana, CA 92335.

Essex Crane also has agreements which allow it to store equipment at two additional storage yards located strategically in the United States.

Coast Crane leases the following properties:

A service center comprising 30,000 square feet of space located at 1601 N.E. Columbia Blvd., Portland, Oregon ;

A service center comprising 10,000 square feet of space located at 4680 W. Capital Ave., West Sacramento, CA 95691;

A storage yard comprising 53,260 square feet of space located at 4300 W. Capital Ave., West Sacramento, CA 95691;

A service center comprising 18,500 square feet of space located at 19062 San Jose Ave., City of Industry, CA 91748;

A service center comprising 14,935 square feet of space located at 14951 Catalina St., San Leandro, CA 94577;

A service center comprising 9,450 square feet of space located at 6615 Rosedale Highway, Bakersfield, CA 93308;

A service center comprising 16,232 square feet of space located at 8250 5 th Avenue South, Seattle, WA 98108;

A storage yard comprising 2,500 square feet of space located at 500 South Sullivan Avenue, Seattle, WA 98108;

A service center comprising 9,862 square feet of space located at 114 St. Paul Avenue, Tacoma, WA 98421;

A service center comprising 10,050 square feet of space located at 3920 E. Boone Avenue, Spokane, WA 99202;

A service center comprising 8,000 square feet of space located at 525 S Oregon Avenue, Pasco, WA 99301;

A service center comprising 11,408 square feet of space located at 8900 King Street, Anchorage, AK 99515;

A service center comprising 5,720 square feet of space located at 12570 Slaughterhouse Canyon Road, Lakeside, CA 92040;

A service center comprising 4,000 square feet of space located at 422 East Emporia Street, Ontario, CA 91761;

A service center comprising 8,500 square feet of space located at 91-505 Awakumoku Place, Kapolei, HI 96707; and

A service center comprising 9,934 square feet of space located at 9538 195 th Street, Surrey, BC V4N 4E5, Canada.

Our growth strategy includes the establishment of service and storage centers across the United States, with a particular emphasis on new facilities in areas of the United States which our management from time to time believes present growth opportunities for our business. Our management currently believes that growth opportunities exist in the Northeast and Mid-Atlantic regions and intends to investigate potential additional facilities in those regions. We have not identified specific locations for any such new facilities.

We also maintain shared offices at 500 Fifth Avenue, 50th Floor, New York, New York 10110 pursuant to an agreement with ProChannel Management LLC, an affiliate of Laurence S. Levy, Chairman of our Board of Directors. Such office is primarily used by our corporate Secretary, Carol Zelinski, and Laurence S. Levy and Edward Levy, each of whom serves on our Board of Directors.

We consider our current facilities adequate for our current operations.

ITEM 3.

LEGAL PROCEEDINGS

From time to time, the Company is party to various legal actions in the normal course of our business. Management believes that the Company is not party to any litigation that, if adversely determined, would have a material adverse effect on our business, financial condition, result of operations or cash flows.

ITEM 4.

RESERVED

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Effective January 13, 2010, our common stock commenced trading, and is currently traded, on the NASDAQ Capital Market under the symbol ESSX. Effective January 13, 2010 until the expiration of certain of our warrants on March 4, 2011, our units and warrants were traded on the NASDAQ Capital Market under the symbols ESSXU and ESSXW, respectively. Our warrants and units ceased trading upon the expiration of certain of our warrants. The following table sets forth the high and low sale prices for the units, common stock and warrants for each quarterly period within the two most recent fiscal years.

	Units				Common Stock				Warrants
	High		Low		High		Low		High		Low

Year ended December 31, 2010
First Quarter	$	8.00	$	5.96	$	7.25	$	5.00	$	1.85	$	0.70
Second Quarter		7.01		5.95		7.65		5.44		2.95		1.45
Third Quarter (1)		n/a		n/a		6.00		4.19		1.85		0.04
Fourth Quarter		5.41		5.41		5.71		4.35		0.53		0.10
Year ended December 31, 2009
First Quarter	$	3.81	$	3.80	$	4.50	$	3.00	$	1.05	$	0.32
Second Quarter		6.60		3.80		6.60		3.65		1.61		0.51
Third Quarter		5.00		5.00		6.30		5.00		1.39		0.90
Fourth Quarter		5.00		5.00		6.20		5.00		1.10		0.45

(1)

Note that for the third quarter of 2010 there were no trades in our warrants and therefore the high and low are not applicable.

As of March 3, 2011, there were approximately 136 holders of record of our common stock, nine holders of record of warrants and one holder of record of our Units.

Dividend Policy

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends in the near future. The payment of cash dividends in the future will be contingent upon our revenues, earnings, if any, capital requirements and general financial condition. In addition, we are a holding company and conduct all of our operations through Essex Crane and Coast Crane. As a result, we rely on dividends and distributions to us from our subsidiaries, Essex Crane, Coast Crane and Holdings. Essex Crane’s and Coast Crane’s existing credit facilities limit Essex Crane’s, Coast Crane’s and Holdings’ ability to declare and pay dividends or make distributions on account of their capital stock and membership interests, and any debt instruments that the Company or its subsidiaries may enter into in the future may limit our subsidiaries’ ability to pay dividends to us and our ability to pay dividends to our stockholders. Payment of dividends is within the discretion of our board of directors. It is the present intention of our board of directors to retain all earnings for liquidity management (through debt reduction), dilution management (through continued warrant and common stock repurchases), to invest in additional rental equipment and use in business operations. Accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future on our common stock.

Recent Sales of Unregistered Securities and Use of Proceeds

On October 29, 2010, we entered into subscription agreements providing for the sale of an aggregate of 3,300,000 shares of our common stock at a price of $4.30 per share, or $14,190,000 in the aggregate, in a private offering (the “Private Placement”). The closing of the Private Placement and issuance of shares of common stock pursuant to the subscriptions occurred upon the closing of the Coast Acquisition on November 24, 2010. The proceeds of the Private Placement were used to fund the cash portion of the purchase price in the Coast Acquisition.

Essex paid a fee of $638,550, plus expenses, to CJS Securities for placement agent services rendered to Essex in connection with the Private Placement.

The securities issued in the Private Placement were offered and sold without registration under the Securities Act of 1933, as amended (the “Act”), in reliance on the exemption from registration provided in Section 4(2) of the Act, based in part on representations made to the Company by each investor in the Private Placement that such investor is an accredited investor and the fact that no general solicitation was involved in the Private Placement.

Purchases of Equity Securities by the Issuer

There were no purchases of equity securities by the Company during the fourth quarter of 2010.

Equity Compensation Plans

For information regarding equity compensation plans, see Item 12 of this annual report on Form 10-K/A.

Item 6.

Selected Financial Data

The following table sets forth selected consolidated financial data of the Company as of and for the years ended December 31, 2010, 2009, 2008, 2007 and 2006. The following table also sets forth selected consolidated financial data of the Predecessor as of and for the ten month period ended October 31, 2008 and as of and for the years ended December 31, 2007 and 2006.

The information in the following table should be read together with the Company’s consolidated financial statements and accompanying notes as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008, the Predecessor’s audited consolidated financial statements and accompanying notes as of and for the ten month period ended October 31, 2008 and for the year ended December 31, 2007 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included under Item 7 of this report. These historical results are not necessarily indicative of the results to be expected in the future.

																Essex Holdings, LLC (Predecessor)
																For the Ten
	Essex Rental Corp. (Successor)															Months Ended			For the Years Ended
	For the Years Ended December 31,															October 31,			December 31,
	2010			2009			2008			2007			2006			2008			2007			2006
	(Restated)
Operations Summary

Total revenue	$	41,531,460		$	52,084,392		$	14,872,789		$	-		$	-		$	70,978,557		$	78,122,079		$	63,515,355
Cost of revenues		35,403,917			32,900,942			7,055,992			-			-			29,545,082			38,757,886			33,438,156

Gross profit		6,127,543			19,183,450			7,816,797			-			-			41,433,475			39,364,193			30,077,199

Selling, general, administrative and other expenses		13,919,489			11,329,156			4,185,375			456,661			1,550			13,762,884			9,244,998			8,860,953
Goodwill impairment		-			-			23,895,733			-			-						-			-

Income (loss ) from operations		(7,791,946	)		7,854,294			(20,264,311	)		(456,661	)		(1,550	)		27,670,591			30,119,195			21,216,246

Interest and Other Income		72,278			643			1,405,637			2,543,781			1,148			-			-			-
Interest Expense (1)		(7,209,449	)		(6,681,740	)		(1,124,398	)								(8,190,438	)		(14,961,069	)		(11,429,235	)

Income (loss ) before taxes		(14,931,588	)		1,173,197			(19,983,072	)		2,087,120			(402	)		19,480,153			15,158,126			9,787,011
Net income (loss)	$	(11,408,486	)	$	1,195,806		$	(11,917,121	)	$	1,699,120		$	(402	)	$	11,417,074		$	11,216,856		$	9,283,424

Weighted average shares outstanding
Basic		16,102,339			14,110,789			13,517,010			13,224,144			2,812,500
Diluted		16,102,339			15,805,191			13,517,010			13,224,144			2,812,500

Earnings (loss) per share
Basic	$	(0.71	)	$	0.08		$	(0.88	)	$	0.13		$	(0.00	)
Diluted	$	(0.71	)	$	0.08		$	(0.88	)	$	0.13		$	(0.00	)

Other Operating Data

Depreciation	$	12,723,951		$	11,210,472		$	1,809,623		$	-		$	-		$	6,908,980		$	8,034,011		$	7,758,332
Other depreciation and amortization	$	954,602		$	781,751		$	139,943		$	-		$	-		$	110,019		$	133,124		$	128,687

Year-end Financial Position

Cash held in trust fund	$	-		$	-		$	-		$	100,927,634		$	-		$	-		$	-		$	-
Rental equipment, net		330,378,792			260,767,678			255,692,116			-			-			133,172,649			124,950,463			121,081,185
Total assets		383,046,958			286,463,157			289,998,510			102,569,184			169,441			169,397,016			149,081,546			141,454,333

Current liabilities		15,454,192			15,146,529			13,883,446			2,526,315			144,843			16,966,002			12,586,433			9,793,667
Short-term debt obligations		783,243			5,170,614			-			-			-			-			-			-
Other long-term debt obligations		7,921,531			-			-			-			-			-			-			15,528,133
Revolving credit facilities		214,959,971			131,919,701			137,377,921			-			-			129,895,169			129,862,723			78,370,611
Total liabilities		304,736,667			212,325,126			217,952,753			2,526,315			144,843			160,690,875			151,989,341			105,613,724

Common stock, subject to conversion		-			-			-			19,932,029			-			-			-			-
Paid in capital (Members' equity)		101,052,367			84,589,119			84,383,579			78,410,547			24,719			40,270,000			40,270,000			40,270,000
Total stockholders' equity	$	78,310,291		$	74,138,031		$	72,045,757		$	80,110,840		$	24,598		$	(8,706,141	)	$	(2,907,795	)	$	35,840,609

(1) Includes the impact of undesignated interest rate swaps.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ESSEX RENTAL CORP. AND ESSEX HOLDINGS LLC (PREDECESSOR)

The following discussion has been restated to reflect the restatement of the consolidated balance sheet and consolidated statements of operations, stockholders’ equity and cash flows for the year ended December 31, 2010 and should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K/A. The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties (see discussion of “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K/A). Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those factors set forth under Item 1A—Risk Factors of this Annual Report on Form 10-K/A.

Restatement of Financial Statements

We have restated:

Our consolidated statement of operations for the year ended December 31, 2010 by decreasing the benefit for income taxes by $1.8 million.

Overview

History

Essex Rental was formed on August 21, 2006 as Hyde Park Acquisition Corp. to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating company. Essex Rental consummated its initial public offering on March 13, 2007. All activity from August 21, 2006 (inception) through March 13, 2007 relates to Essex Rental Corp’s (formerly Hyde Park Acquisition Corp.) formation and initial public offering. From March 13, 2007 through October 31, 2008, the Company’s activities were limited to identifying prospective target businesses to acquire and complete a business combination. On October 31, 2008, the Company consummated the acquisition of Holdings and its wholly-owned subsidiary, Essex Crane, and, as a result, is no longer in the development stage. In August 2009, the Company formed a new subsidiary, Essex Finance Corp., to facilitate the acquisition of rental equipment. In November 2010, the Company acquired substantially all of the assets of Coast Crane Company, a Delaware corporation (“Coast Crane”) through a newly formed subsidiary CC Bidding Corp. The assets acquired in the acquisition of Coast Crane consisted of all of the assets used in the operation of its specialty lifting solutions and crane rental services business, including cranes and related heavy lifting machinery and equipment and spare parts, inventory, accounts receivable, rights under executory contracts, other tangible and intangible assets and all of the outstanding shares of capital stock of Coast Crane Ltd., a British Columbia corporation, through which Coast Crane conducted its operations in Canada.

For more information regarding our acquisition of Holdings and Essex Crane as well as Coast Crane Company, see note 1 to our consolidated financial statements.

Business

Essex Crane is a leading provider of lattice-boom crawler crane and attachment rental services and possesses one of the largest fleets of such equipment in the United States. Over approximately 50 years of operation, since its founding in 1960, Essex Crane has steadily grown from a small, family-owned crane rental company to a private equity owned professionally managed company that today is a public company and one of the leading players in the industry offering lattice boom crawler rental services to a variety of customers, industries and regions mainly throughout the United States and Canada.

Over the past several years, we have been focused on reinvesting capital into our rental fleet. Specifically, we have sold lower lifting capacity cranes for better utilized heavier lifting capacity cranes. During the years ended December 31, 2010, 2009 and 2008, the Company invested approximately $2.7 million, $19.8 million and $20.8 million, respectively into new cranes and attachments for our rental fleet.

These investment decisions contributed greatly to the repositioning our fleet to maximize its utilization rates and average rental rates. Although we believe the repositioning of the fleet has maximized utilization rates and average rental rates, the economic downturn has significantly adversely impacted our business activity levels. During the periods reported:

utilization rates of crawler cranes decreased to 37.5% (or 41.3%, if calculated using the “hits” method) in 2010 from 72.5% (or 77.0%, if calculated using the “hits” method) in 2008 on a pro forma basis;

average crawler crane rental rates decreased to $16,391 in 2010 from $21,382 in 2008 on a pro forma basis, and average attachment rental rates decreased to $13,114 in 2010 from $16,051 in 2008 on a pro forma basis; and

utilization rates of crawler crane attachments decreased to 16.9% (or 18.1% if calculated using the “hits” method) in 2010 from 42.0% (or 44.2% if calculated using the “hits” method) in 2008 on a pro forma basis.

Coast Crane’s predecessor was founded in 1970 and the Coast Crane business has grown to become a market leader for innovative lifting solutions throughout Western North America, Alaska, Hawaii, Guam and the South Pacific. Coast Crane provides both new and used and new equipment including rough terrain cranes, boom trucks, tower cranes and other lifting equipment. Products are rented and sold through a regional network including 13 branch locations.

The impact of the economic downturn is also reflected in the Company’s operating results and cash flow. During the period from December 31, 2008 through December 31, 2010:

revenue decreased by 51.6% to $41.5 million in 2010, of which $5.4 million was related to the operations of Coast Crane in the post-acquisition period, from $85.9 million in 2008 on a pro forma basis and equipment rental revenue decreased by 59.5% to $25.0 million in 2010 from $61.8 million in 2008 on a pro forma basis;

cost of revenues decreased by 8.0% to $35.4 million (of which $4.9 million was related to the operations of Coast Crane in the post-acquisition period) in 2010 from $38.4 million in 2008 on a pro forma basis but increased as a percentage of total revenue to 85.1% from 44.8%;

selling, general, administrative and other expenses decreased by 25.7% or $4.8 million to $13.9 million in 2010 from $18.7 million in 2008 on a pro forma basis primarily due to consulting and environmental expenses incurred in 2008 associated with the acquisition of Holdings that year. As a percentage of total revenue these costs increased to 37.6% from 21.8%;

Results of Operations

Year ended December 31, 2010 compared to years ended December 31, 2009 and 2008

The Company had a net loss of $11.4 million for the year ended December 31, 2010. Total revenue, cost of revenues and gross profit were $41.5 million, $35.4 million and $6.1 million, respectively, for the year ended December 31, 2010. Selling, general, administrative and other expenses of $13.9 million was composed primarily of salaries, payroll taxes benefits, sales and marketing, insurance, professional fees, rent, travel, depreciation and amortization expenses. Interest expense related to borrowings under our revolving credit facilities and other debt obligations was $7.4 million for the year ended December 31, 2010. The Company had an income tax benefit of $3.5 million for the year ended December 31, 2010 related to loss before income taxes of $14.9 million.

The Company had a net income of $1.2 million for the year ended December 31, 2009. Total revenue, cost of revenues and gross profit were $52.1 million, $32.9 million and $19.2 million, respectively, for the year ended December 31, 2009. Selling, general, administrative and other expenses of $11.3 million was composed primarily of salaries, payroll taxes benefits, sales and marketing, insurance, professional fees, rent, travel, depreciation and amortization expenses. Interest expense related to borrowings under Essex Crane’s revolving credit facility was $6.7 million for the year ended December 31, 2009. The Company had an income tax benefit of $23,000 for the year ended December 31, 2009 related to income before income taxes of $1.2 million.

Essex Rental had a net loss of $11.9 million for the year ended December 31, 2008, including an after-tax charge related to goodwill impairment of approximately $14.8 million ($23.9 million gross). Absent that item, net income would have been approximately $2.9 million. Essex Rental’s financial results for the year ended 2008 included the operations of Essex Crane for the two month post acquisition period. Total revenue, cost of revenues and gross profit were $14.9 million, $7.1 million and $7.8 million, respectively. Selling general, administrative and other expenses of $4.2 million was composed primarily of salaries, payroll taxes benefits, sales and marketing, insurance, professional fees, rent and travel expenses and included $1.2 million of acquisition related transaction costs. Interest income from cash held in trust was $1.4 million while interest expense related to borrowings under Essex Crane’s revolving credit facility was $1.1 million for the year ended December 31, 2008. Essex Rental had a tax benefit of $8.1 million for the year ended December 31, 2008 primarily related to the net loss before income taxes of $20.0 million.

Year ended December 31, 2010 compared to year ended December 31, 2009

	Year Ended December 31,
	2010			2009
	(Restated)

Revenue	$	41,531,460		$	52,084,392
Cost of revenues		35,403,917			32,900,942
Gross profit		6,127,543			19,183,450
Selling, general, administrative and other operating expenses		13,919,489			11,329,156
Income from operations		(7,791,946	)		7,854,294
Other income (expense), net		(7,139,642	)		(6,681,097	)
Income (loss) before income taxes		(14,931,588	)		1,173,197
Provision (benefit) for income taxes		(3,523,102	)		(22,609	)
Net (loss) income	$	(11,408,486	)	$	1,195,806

For the year ended December 31, 2010, we had net loss of $11.4 million compared to a net income of $1.2 million for the year ended December 31, 2009. The $12.6 million decrease in net income was primarily due to a $10.6 million decrease in revenue, a $2.5 million increase in cost of revenues, an increase in selling, general, administrative and other operating expenses of $2.6 million partially as a result of $1.2 million of acquisition related transaction costs incurred in 2010, and $0.5 million higher interest expense primarily associated with the additional debt entered into and assumed in the Coast Crane acquisition. The decrease in gross profit, increase on selling, general and administrative costs and increase in interest expense were offset by an increase in the provision benefit for income taxes of $3.5 million.

	Year Ended December 31,
	2010		2009
REVENUE
Equipment rentals	$	25,049,779	$	34,556,696
New equipment sales		1,238,722	$	-
Used rental equipment sales		4,255,761		6,478,197
Retail part sales		1,184,042		-
Transportation		4,766,328		4,909,346
Equipment repairs and maintenance		5,036,828		6,140,153
Total revenue	$	41,531,460	$	52,084,392

Revenue for the year ended December 31, 2010 was $41.5 million, a 20.3% decrease compared to revenue of $52.1 million for the year ended December 31, 2009. Revenue was comprised of the following components:

Equipment rentals revenue, which represented 60.3% of total revenue, was $25.0 million for the year ended December 31, 2010, a 27.5% decrease from $34.6 million for the year ended December 31, 2009. This decrease was first driven by a decrease in crane utilization to 37.5% under the “days” method (or 41.3% if calculated using the “hits” method) for the year ended December 31, 2010 from 43.6% under the “days” method (or 48.2% if calculated using the “hits” method) for the year ended December 31, 2009. The decrease in utilization was a result of excess market supply of rental equipment compared to the demand brought on by the weakened economy and a difficult commercial credit environment. Second, the Company also experienced the associated decrease in the average crane rental rate of 22.2% to $16,391 (per crane per rental month) for the year ended December 31, 2010 relative to $21,081 for the year ended December 31, 2009. The decrease in the average rental rate is due to the expiration of rental agreements executed at higher rental rates in the prior years. Additionally, utilization on a “days” method increased to 44.7% for the three months ended December 31, 2010 from 30.0% for the three months ended March 31, 2010. We expect the average rental rates will continue to improve in 2011 as utilization rates continue to recover.

New equipment sales revenue, which represented 3.0% of total revenue, was $1.2 million for the year ended December 31, 2010 and relates to new equipment sales by our Coast Crane subsidiary acquired in November 2010.

Used rental equipment sales revenue, which represented 10.2% of total revenue, was $4.3 million for the year ended December 31, 2010, a 34.3% decrease from $6.5 million for the year ended December 31, 2009. These used equipment sales have presented Essex Crane with opportunities to further enhance its combination of cranes and attachments by providing an additional cash flow source for purchasing additional new rental equipment. Five lower lifting capacity crawler cranes and attachments were sold for the year ended December 31, 2010 which was a decrease from thirteen for the year ended December 31, 2009. In both periods the market presented opportunities to sell a number of the lower utilization units which have lower rental rates, and Essex Crane reinvested the proceeds of such sales into a smaller number of larger cranes and attachments which yield higher utilization rates and higher relative rental rates on the capital costs and enable Essex Crane to improve the strategic position of its rental fleet for the future. The average lifting capacity of five cranes sold was 197 tons and 158 tons for the years ended December 31, 2010 and 2009, respectively, compared to 440 tons and 256 tons for cranes purchased during the same periods, respectively. Cranes sold during the year ended December 31, 2010 were sold at an average price in excess of 120% of Orderly Liquidation Value (“OLV”). OLV is determined for collateral measurement purposes by an independent appraiser on behalf of the lead lender for the Company’s asset based revolving credit facility;

Retail part sales revenue, which represented 2.9% of total revenue, was $1.2 million for the year ended December 31, 2010 and relates to retail part sales from our Coast Crane subsidiary acquired in November 2010.

Transportation revenue, which represented 11.5% of total revenues was $4.8 million for the year ended December 31, 2010, a 2.9% decrease from $4.9 million for the year ended December 31, 2009. This decrease is primarily a result of lower average crane rental utilization and was impacted by the combination of cranes and attachments rented and the specific distances that equipment had to move for various rentals; and

Equipment repairs and maintenance revenue (including rigging and other services), which represented 12.1% of total revenue, was $5.0 million for the year ended December 31, 2010, an 18.0% decrease from $6.1 million for the year ended December 31, 2009. This decrease is attributed to a lower demand for repairs, maintenance and other services resulting from lower average crane rental utilization.

	Year Ended December 31,
	2010		2009
COST OF REVENUES

Salaries, payroll taxes and benefits	$	5,905,279	$	6,006,715
Depreciation expense (a)		12,723,951		11,210,472
Cost of new equipment sold		994,119		-
Book value of equipment sold		3,551,891		5,584,784
Cost of retail parts sold		775,338		-
Transportation		4,236,326		3,743,595
Equipment repairs and maintenance		5,833,945		4,873,005
Yard operating expenses		1,383,068		1,482,371
Total cost of revenues	$	35,403,917	$	32,900,942

Cost of revenues for the year ended December 31, 2010 was $35.4 million, a 7.6% increase from $32.9 million for the year ended December 31, 2009. Cost of revenues was 85.2% of total revenue for the year ended December 31, 2010, relative to 63.3% for the year ended December 31, 2009. The increase in cost of revenues resulted primarily from the items described below.

Salary, payroll tax and benefit expenses decreased 1.7% to $5.9 million for the year ended December 31, 2010 from $6.0 million for the year ended December 31, 2009. The decrease was a direct result of a 10% salary reduction on certain operations managers which was implemented midway through 2009, reduced hours, lower overtime, some headcount reduction and reduced bonus expense. These decreases in salary, payroll tax and benefit expenses were partially offset by $0.5 million of expenses incurred in the operations of Coast Crane during the post-acquisition period.

Depreciation expense related to rental equipment increased 13.5% to $12.7 million for the year ended December 31, 2010 compared to $11.2 million for the year ended December 31, 2009. $1.1 million of the increase in depreciation expense is related to the Coast Crane equipment acquired in November 2010.

Cost of new equipment sold was $1.0 million for the year ended December 31, 2010 and relates to new equipment cost of sales by our Coast Crane subsidiary acquired in November 2010.

Net book value of rental equipment sold decreased 36.4% to $3.6 million for the year ended December 31, 2010, from $5.6 million for the year ended December 31, 2009. The decrease in net book value of equipment sold was primarily from a decrease in the number of cranes sold.

Cost of retail parts sold was $0.8 million for the year ended December 31, 2010 and relates to cost of retail parts sold by our Coast Crane subsidiary in the post-acquisition operations of 2010.

Transportation expenses increased 13.2% to $4.2 million for the year ended December 31, 2010, from $3.7 million for the year ended December 31, 2009. Approximately $0.1 million of the increase was related to costs incurred from the post-acquisition operations of Coast Crane in 2010. The remaining difference in transportation expenses incurred is due to differences in the combination of cranes and attachments rented and the specific distances that equipment had to move for various rentals.

Equipment repairs and maintenance expenses increased 19.7% to $5.8 million for the year ended December 31, 2010, from $4.9 million for the year ended December 31, 2009. Approximately $1.0 million of the increase was related to cost incurred from the post-acquisition operations of Coast Crane in 2010.

Yard operating expense decreased by 6.7% to $1.4 million for the year ended December 31, 2010, from $1.5 million for the year ended December 31, 2009. The slight decrease was primarily related to lower average crane rental utilization.

Essex Crane’s gain on the sale of used rental equipment was $0.7 million (16.5% margin, calculated by dividing the gain on the sale divided by the revenue from such sale) for the year ended December 31, 2010 compared to $0.9 million (13.8% margin) for the year ended December 31, 2009. The lower level of gains on sales was due to due to the lower level of used rental equipment sales in the current period.

	Year Ended December 31,
	2010		2009
SELLING, GENERAL, ADMINISTRATIVE
AND OTHER OPERATING EXPENSES

Selling, general and administrative	$	12,964,887	$	10,547,405
Non-rental depreciation and amortization		954,602		781,751
Total selling, general, administrative and other operating expenses	$	13,919,489	$	11,329,156

Total Selling, general, administrative and other operating expenses for the year ended December 31, 2010 was $13.9 million, a $2.6 million or 22.7% increase from $11.3 million for the year ended December 31, 2009.

Total selling, general, administrative and other expenses increased due to costs associated with the post-acquisition operations of Coast Crane, approximately $1.2 million of acquisition related transaction expenses incurred an 2010 and in increase in legal and professional fees. Other components of administrative expenses include: salaries, payroll taxes and benefits, insurance and selling and marketing expenses.

	Year Ended December 31,
	2010			2009
OTHER INCOME (EXPENSES), NET

Other income (expense)	$	72,278		$	643
Interest expense		(7,368,904	)		(6,681,740	)
Foreign exchange loss		(2,471	)		-
Interest rate swap		159,455			-
Total other income (expenses), net	$	(7,139,642	)	$	(6,681,097	)

Interest expense of $7.4 million for the year ended December 31, 2010 increased by $0.7 million or 10.6% from $6.7 million primarily due to an increase in the balance of debt outstanding as a result of the Coast Crane acquisition in November 2010.

Income tax benefit was approximately $3.5 million for the year ended December 31, 2010, compared to a $23,000 tax benefit for the year ended December 31, 2009. The higher income tax benefit for the year ended December 31, 2010 is primarily due to a loss before income taxes of $14.9 million. The effective tax rates were 23.6% and (1.9%) for the year ended December 31, 2010 and 2009, respectively. The Company’s effective rate for the year ended December 31, 2010 was lower than the statutory tax rate primarily due to state and local taxes. The decrease in the effective tax rate related to the increase in state deferred tax rates at Essex Crane as a result of the acquisition of Coast Crane and an additional state NOL valuation allowance, which were partially offset by the reduction in unrecognized benefit associated with the effective settlement of uncertain tax positions. The Essex Crane state deferred tax rates increased due to an increase in apportionment into higher tax rate states which Coast Crane operates due to unitary filing requirements. The effective rate was lower than the statutory federal tax rate for the year ended December 31, 2009 due to 2008 tax return to provision differences, an increase in uncertain tax positions and state and local taxes including a change in estimate of $0.6 million associated with the Company’s state income tax apportionments and rates.

Essex had 276 full-time employees as at December 31, 2010 compared to 111 full-time employees at December 31, 2009. The increase in the number of employees is due to the acquisition of Coast Crane in November 2010.

Year ended December 31, 2009 compared to unaudited pro-forma year ended December 31, 2008 operating results

As previously discussed, we acquired Holdings and its operating subsidiary Essex Crane on October 31, 2008. As a result, our consolidated operating results only include Essex Crane’s results of operations since the acquisition date. The following financial information provides a comparison of the Company’s results of operations for the year ended December 31, 2009 to the unaudited pro forma results of operations for the year ended December 31, 2008 as if we had acquired Holdings (and Essex Crane) on January 1, 2008. Management believes that such pro forma comparison provides a more meaningful comparison of our business’s results of operations for the year ended December 31, 2008. The following unaudited pro forma operating results of our business are not intended to be, and not indicative of, the consolidated results of operations of the Company that would have been reported had the acquisition of Holdings (and Essex Crane) been completed as of the dates presented, and are not necessarily indicative of the results to be expected going forward. The unaudited pro forma financial information should be read in conjunction with our historical financial statements and the historical financial statements of Holdings included elsewhere in this annual report on Form 10-K/A.

				Unaudited
	Successor			Pro Forma
	Year Ended December 31,
	2009			2008
Revenue	$	52,084,392		$	85,851,346
Cost of revenues		32,900,942			38,444,438
Gross profit		19,183,450			47,406,908
Selling, general, administrative
and other operating expenses		11,329,156			18,693,621
Goodwill impairment		-			23,895,733
Income from operations		7,854,294			4,817,554
Other income (expense), net		(6,681,097	)		(9,524,943	)
Income (loss) before income taxes		1,173,197			(4,707,389	)
Provision (benefit) for income taxes		(22,609	)		(1,068,388	)
Net income (loss)	$	1,195,806		$	(3,639,001	)

For the year ended December 31, 2009, we had net income of $1.2 million compared to a pro forma net loss of $3.6 million for the year ended December 31, 2008. The $4.8 million increase in net income was primarily due to a $23.9 million ($14.8 million net of tax) goodwill impairment charge recorded in 2008, a decrease in selling, general, administrative and other operating expenses of $7.4 million as a result of $6.2 million of transaction costs not eligible for capitalization incurred in 2008 and $2.8 million lower interest expense associated with lower market interest rates on our debt. The decrease in expenses were offset by a decrease in revenues of $33.8 million (39.3%) and gross profit of $28.2 million (59.5%), respectively, resulting primarily from lower equipment rental revenue of $27.3 million and lower transportation revenue of $3.3 million.

			Unuadited
	Successor		Pro Forma
	Year Ended December 31,
	2009		2008
REVENUE
Equipment rentals	$	34,556,696	$	61,823,678
Used rental equipment sales		6,478,197		8,439,805
Transportation		4,909,346		8,163,171
Equipment repairs and maintenance		6,140,153		7,424,692
Total revenue	$	52,084,392	$	85,851,346

Revenue for the year ended December 31, 2009 was $52.1 million, a 39.3% decrease compared to pro forma revenue of $85.9 million for the year ended December 31, 2008. Revenue and pro forma revenue were comprised of the following components:

Equipment rentals revenue, which represented 66.4% of total revenue, was $34.6 million for the year ended December 31, 2009, a 44.1% decrease from $61.8 million on a pro forma basis for the year ended December 31, 2008. This decrease was primarily driven by a decrease in crane utilization to 43.6% under the “days” method (or 48.2% if calculated using the “hits” method) for the year ended December 31, 2009 from 72.5% under the “days” method (or 77.0% if calculated using the “hits” method) on a pro forma basis for the year ended December 31, 2008. The decrease in utilization was a result of excess market supply of rental equipment compared to the demand brought on by the weakening economy and a difficult commercial credit environment. The Company also experienced a decrease in the average crane rental rate of 1.4% to $21,081 (per crane per rental month) for the year ended December 31, 2009 relative to $21,382 on a pro forma basis for the year ended December 31, 2008. The slight decrease in the average rental rate is due to the expiration of rental agreements executed at higher rental rates in the prior year and new agreements being entered into at lower average rental rates. As more rental agreements expire, we expect the average rental rates will continue to decline further in 2010 until utilization rates recover.

Used rental equipment sales revenue, which represented 12.4% of total revenue, was $6.5 million for the year ended December 31, 2009, a 23.2% decrease from pro forma used rental equipment sales revenue of $8.4 million for the year ended December 31, 2008. These used equipment sales have presented Essex with opportunities to further enhance its combination of cranes and attachments by providing an additional cash flow source for purchasing additional new rental equipment. Thirteen lower lifting capacity cranes and attachments were sold for the year ended December 31, 2009 which was a decrease from twenty two for the year ended December 31, 2008. In both periods the market presented opportunities to sell a number of the lower utilization units which have lower rental rates, and Essex reinvested the proceeds of such sales into a smaller number of larger cranes and attachments which yield higher utilization rates and higher relative rental rates on the capital costs and enable Essex to improve the strategic position of its rental fleet for the future. The average lifting capacity of cranes sold was 158 tons and 153 tons for the years ended December 31, 2009 and 2008, respectively, compared 256 tons and 295 tons for cranes purchased during the same periods, respectively. Cranes sold during the year ended December 31, 2009 were sold at an average price in excess of 120% of Orderly Liquidation Value (“OLV”). OLV is determined for collateral measurement purposes by an independent appraiser on behalf of the lead lender for the Company’s asset based revolving credit facility;

Transportation revenue, which represented 9.4% of total revenues was $4.9 million for the year ended December 31, 2009, a 39.9% decrease from pro forma transportation revenue of $8.2 million for the year ended December 31, 2008. This decrease is primarily a result of lower crane rental utilization and was impacted by the combination of cranes and attachments rented and the specific distances that equipment had to move for various rentals; and

Equipment repairs and maintenance revenue (including rigging and other services), which represented 11.8% of total revenue, was $6.1 million for the year ended December 31, 2009, a 17.3% decrease from pro forma repair and maintenance revenue of $7.4 million for the year ended December 31, 2008. This decrease is attributed to a lower demand for repairs, maintenance and other services resulting from lower crane rental utilization.

			Unaudited
	Successor		Pro Forma
	Year Ended December 31,
	2009		2008
COST OF REVENUES

Salaries, payroll taxes and benefits	$	6,006,715	$	8,041,998
Depreciation expense (a)		11,210,472		10,561,967
Book value of equipment sold		5,584,784		4,625,783
Transportation		3,743,595		6,727,663
Equipment repairs and maintenance		4,873,005		6,647,754
Yard operating expenses		1,482,371		1,839,273
Total cost of revenues	$	32,900,942	$	38,444,438

(a)

A pro forma adjustment to depreciation expense of $1.8 million is reflected for the year ended December 31, 2008 based on the fair value purchase price allocation to the rental equipment which was significantly in excess of the historical carrying amount of Holdings, thereby increasing depreciation expense.

Cost of revenues for the year ended December 31, 2009 was $32.9 million, a 14.4% decrease from the pro forma cost of revenues of $38.4 million for the year ended December 31, 2008. Cost of revenues was 63.3% of total revenue for the year ended December 31, 2009, relative to 44.8% for the year ended December 31, 2008. The decrease in cost of revenues resulted from decreases in salaries, payroll taxes and benefits, transportation expenses and equipment repairs and maintenance partially offset by increases in depreciation expense and in the net book value of equipment sold as described below.

Salary, payroll tax and benefit expenses decreased 25.3% to $6.0 million for the year ended December 31, 2009 from $8.0 million on a pro forma basis for the year ended December 31, 2008. The decrease was a direct result of a 10% salary reduction on certain operations managers, reduced hours, lower overtime, some headcount reduction and reduced bonus expense.

Depreciation expense related to rental equipment increased 6.1% to $11.2 million for the year ended December 31, 2009 compared to $10.6 million on a pro forma basis for the year ended December 31, 2008. The increase in depreciation expense is primarily related to equipment purchased during 2009.

Net book value of rental equipment sold increased 20.7% to $5.6 million for the year ended December 31, 2009, from $4.6 million on a pro forma basis for the year ended December 31, 2008. The increase in net book value of equipment sold was driven by a higher relative asset basis for the sales occurring after the fair value acquisition accounting resulting in a step-up in basis to fair market value recorded on October 31, 2008 partially offset by a decrease in the number of cranes sold.

Transportation expenses decreased 44.4% to $3.7 million for the year ended December 31, 2009, from $6.7 million for the year ended December 31, 2008. The decrease was related primarily to lower crane rental utilization.

Equipment repairs and maintenance expenses decreased 26.7% to $4.9 million for the year ended December 31, 2009, from $6.6 million for the year ended December 31, 2008. The decrease was primarily related to lower crane rental utilization and also related to improved cost productivity and lower parts expense.

Yard operating expense decreased by 19.4% to $1.5 million for the year ended December 31, 2009, from $1.8 million for the year ended December 31, 2008. The decrease was primarily related to lower crane rental utilization.

Our gain on the sale of used rental equipment was $0.9 million (13.8% margin, calculated by dividing the gain on the sale divided by the revenue from such sale) for the year ended December 31, 2009 compared to a pro forma gain of $3.8 million (45.2% margin) for the year ended December 31, 2008. The lower level of gains on sales was due to the increase in book value of equipment driven by a higher relative asset basis resulting from the fair value acquisition accounting recorded on October 31, 2008 and also due to the lower levels of used equipment sales in the current period. The pro forma gain on sale of equipment included in these pro forma financial results for the year ended December 31, 2008, presented consistently with that used in the Company’s Definitive Proxy Statement, filed with the SEC on October 8, 2008, will not be indicative of future results since the rental equipment was adjusted to fair value as of the closing date of the acquisition, thereby reducing potential future gains on sale.

			Unaudited
	Successor		Pro Forma
	Year Ended December 31,
	2009		2008
SELLING, GENERAL, ADMINISTRATIVE AND OTHER OPERATING EXPENSES

Selling, general and administrative	$	10,547,405	$	17,698,297
Goodwill impairment		-		23,895,733
Non-rental depreciation and amortization (a)		781,751		995,324
Total selling, general, administrative and other operating expenses	$	11,329,156	$	42,589,354

(a)

A pro forma adjustment to non-rental depreciation amortization expense of $0.9 million was recorded for the year ended December 31, 2008 for the amortization of the customer list and trademark acquired in the Holdings acquisition.

Total Selling, general, administrative and other operating expenses for the year ended December 31, 2009 was $11.3 million, a $31.3 million or 73.4% decrease from $42.6 million on a pro forma basis for the year ended December 31, 2008. Total selling, general, administrative and other expenses decreased primarily due to the $23.9 million goodwill impairment charge recorded in 2008 as well as $6.2 million of transaction related expenses not eligible for capitalization incurred in 2008, partially offset by higher operating costs associated with being a public company including fees related to the Company’s board of directors, audit, legal, insurance and investor relations. Selling, general, administrative and other operating expenses also decreased due to a compensation expense decrease of $1.4 million primarily due to a reduction in bonus expense and the temporary salary reduction program pursuant to which our chief executive officer, members of our executive management and other key managers receiving salaries elected to reduce the amount of their salaries paid in cash in exchange for fully vested common shares that are temporarily restricted from sale valued at approximately 42% of the reduced cash compensation. Other components of administrative expenses include: salaries, payroll taxes and benefits, insurance and selling and marketing expenses.

				Unaudited
	Successor			Pro Forma
	Year Ended December 31,
	2009			2008
OTHER INCOME (EXPENSES), NET

Other income (expense)	$	643		$	-
Interest expense		(6,681,740	)		(9,524,943	)
Total other income (expenses), net	$	(6,681,097	)	$	(9,524,943	)

Interest expense of $6.7 million for the year ended December 31, 2009 decreased by $2.8 million or 29.9% from $9.5 million on a pro forma basis primarily due to lower market interest rates on the Company’s debt and a decrease in the balance of debt outstanding.

Income tax benefit was approximately $23,000 for the year ended December 31, 2009, compared to a $1.1 million pro forma tax benefit for the year ended December 31, 2008. The lower income tax benefit for the year ended December 31, 2009 is primarily due to an increase of income before income taxes of $5.9 million. The effective tax rates were (1.9%) and 22.7% for the year ended December 31, 2009 and 2008, respectively. The effective rate was lower than the statutory federal tax rate for the year ended December 31, 2009 due to 2008 tax return to provision differences, an increase in uncertain tax positions and state and local taxes including a change in estimate of $0.6 million associated with the Company’s state income tax apportionments and rates. The effective tax rate was lower than the statutory federal tax rate for the year ended December 31, 2008 due to state and local taxes.

We had 111 full-time employees as at December 31, 2009 compared to 129 full-time employees at December 31, 2008.

Liquidity and Capital Resources

The Company has typically had substantial liquidity from its operating cash flows despite the significant downturn in the construction industry. However, the Company had negative net cash flows from operations for the year ended December 31, 2010 due primarily to a net loss of $9.6 million and a decrease in accounts payable and accrued expenses. Combined cash flows provided by operating activities of the Successor and Predecessor for all three years presented were approximately $36.9 million. As of December 31, 2010, the Company had total debt obligations outstanding of approximately $223.5 million and had an additional $39.7 million available on our revolving credit facilities. We believe the Essex Crane and Coast Crane credit facilities will provide sufficient liquidity through October 2013 and November 2014, respectively. We believe that the sources of cash from operations and the revolving credit facility should adequately fund the investment needs of the business for the foreseeable future.

Our Essex Crane subsidiary has a $100.0 million interest rate swap agreement in place that locks this portion of its debt based upon LIBOR of 2.71% plus 225 basis points. Our Coast Crane subsidiary has three interest rate swap agreements in place with an aggregate notional amount of $21.0 million that locks this portion of its debt based upon a fixed rate of 5.62%. Management believes this cost of interest is more than sufficient to cover the rental revenue it generates since rental rates are established as a percentage of the values of the underlying equipment. The weighted average interest rate on all debt obligations outstanding as of December 31, 2010 including the impact of the interest rate swaps was 4.83%

Cash Flow from Operating Activities

The Company’s cash used in operating activities for the year ended December 31, 2010 was $5.4 million. This was primarily the result of net loss of $11.4 million, which, when adjusted for non-cash expense items, such as depreciation and amortization of $14.2 million, gains on the sale of rental equipment of $0.7 million, deferred income taxes of $1.6 million, change in fair value of interest rate swap of $0.2 million and stock-based compensation expense of $1.2 million, provided positive cash flows of approximately $1.5 million. The cash flows from operating activities were also decreased by a $8.5 million reduction in accounts payable and accrued expenses and a $1.0 increase in prepaid expenses and other assets, offset by a $1.4 million increase in unearned rental revenue, a $0.2 million decrease in retail equipment inventory, a $0.3 million decrease in receivables and a $0.6 million decrease in spare parts inventory. Much of the cash used by operating activities related to the change in accounts payable and accrued expenses is due to liabilities assumed by the Company in conjunction with the Coast Acquisition.

The Company’s cash provided by operating activities for the year ended December 31, 2009 was $15.1 million. This was primarily the result of net income of $1.2 million, which, when adjusted for non-cash expense items, such as depreciation and amortization of $12.5 million, gains on the sale of rental equipment of $0.9 million, deferred income taxes of $0.1 million and stock-based compensation expense of $0.6 million, provided positive cash flows of approximately $13.4 million. The cash flows from operating activities were also increased by a $5.9 million reduction in receivables and reduced by a $0.3 million increase in spare parts inventory, a $2.5 million decrease in accounts payable and accrued expenses and a $1.4 million decrease in unearned rental revenue.

The Company’s cash used in operating activities for the year ended December 31, 2008 was $0.7 million. This is primarily the result of a net loss of $11.9 million, which, when adjusted for non-cash expense items, such as goodwill impairment of $23.9 million, depreciation and amortization of $2.0 million, deferred income taxes of $9.9 million, stock-based compensation expense of $0.1 million, and gains on the sale of rental equipment of $0.3 million, provided positive cash flows of approximately $3.9 million for the two month post-acquisition period. The cash flows from operating activities were also reduced by $1.7 million of interest earned from the trust fund, an increase in receivables of $1.5 million, a decrease of $0.4 million in accounts payable and accrued expenses, and a $0.4 million increase in unearned rental revenue.

The Predecessor’s cash provided by operating activities for the ten months ended October 31, 2008, the date Holdings was acquired, was approximately $27.7 million. This was primarily the result of net income of $11.4 million, which when adjusted for non-cash expense items such as depreciation and amortization, gains on sales of rental equipment, deferred income taxes, stock-based compensation expense and the change in fair value of the interest rate swap, provided positive cash flows of approximately $23.1 million. The cash flows from operating activities were also increased by a $1.1 million decrease in accounts receivable, a $4.0 million increase in accounts payable and accrued expenses and a $0.4 million increase in unearned rental revenue. These increases were partially offset by decreases in operating cash flows as a result of a $0.8 million increase in prepaid expenses and other assets and a $0.1 million increase in spare parts inventory.

Cash Flow from Investing Activities

For the year ended December 31, 2010, cash used in investing activities was approximately $28.7 million. This was primarily the result of net cash payments of $31.8 million for the purchase of Coast Crane, purchases of rental equipment of $0.2 million (excluding the $2.6 million of rental equipment purchases made directly through short-term obligations) and purchases of property and equipment of $1.0 million. These investing activity uses of cash were partially offset by $4.3 million in proceeds received for the sale of rental equipment.

For the year ended December 31, 2009, cash used in investing activities was approximately $11.8 million. This was primarily the result of purchases of rental equipment of $17.2 million, purchases of property and equipment of $1.0 million and an increase in accounts receivables related to the sale of rental equipment of $0.1 million. These investing activity uses of cash were partially offset by $6.5 million in proceeds received for the sale of rental equipment.

For the year ended December 31, 2008, cash provided by investing activities was approximately $23.7 million. This is primarily the result of the use of all the cash held in the Trust Fund ($102.6 million), the majority of which was used to fund the acquisition of Holdings, and since the acquisition of Holdings on October 31, 2008, the purchase of $2.8 million rental equipment and $0.2 million in property and equipment, partially offset by proceeds from the sale of rental equipment of $1.7 million.

The Predecessor’s cash used in investing activities for the ten months ended October 31, 2008, the date Holdings was acquired, was approximately $23.5 million. This was primarily the result of $18.0 million in purchases in rental equipment, $3.0 million in purchases of property and equipment and a $9.9 million purchase of Hyde Park common stock. These investing uses of cash were partially offset by a $0.7 million decrease in accounts receivables from rental equipment sales and proceeds from the sale of rental equipment of $6.7 million.

Cash flow from financing activities

Cash provided by financing activities was approximately $37.4 million for the year ended December 31, 2010. This is primarily due to net proceeds from the issuance of common stock of $13.6 million, proceeds from the exercise of warrants of $2.4 million and a net increase in total debt obligations of $22.9 million. Total borrowings for the year under the short-term debt obligations and revolving credit facilities were $74.6 million and total payments on the revolving credit facilities were $43.9 million. The Company also used $0.9 million to repurchase warrants. The proceeds from the issuance of common stock and net borrowings for the year were primarily used to fund the Coast Acquisition. In conjunction with the Coast Acquisition, the Company also assumed total additional indebtedness of approximately $61.4 million.

Cash used in financing activities was approximately $3.3 million for the year ended December 31, 2009. This is primarily due to a net decrease in total debt obligations of $2.9 million. Total borrowings for the year under the short-term debt obligations and revolving credit facility were $60.7 million and total payments on the revolving credit facility were $63.6 million. The Company also used $0.4 million to repurchase warrants.

Cash used in financing activities was approximately $24.0 million for the year ended December 31, 2008. This is primarily due to $18.7 million in payments made to reacquire and retire common stock for those parties that did not vote in favor of the business combination and $1.8 million paid for the repurchase of common stock and warrants. Since the October 31, 2008 acquisition of Holdings, total borrowings under the revolving credit facility were $12.2 million and total payments were $14.9 million. The Company also paid $0.8 million of deferred financing costs in connection with amending the revolving credit facility assumed in the acquisition of Holdings.

The Predecessor’s cash used in financing activities for the ten months ended October 31, 2008, the date Holdings was acquired, was approximately $3.5 million. Total borrowings and payments during the ten months under the Predecessor’s revolving credit facility were $78.0 million. The Company also paid $0.2 million of deferred financing costs and $3.3 million to terminate an interest rate swap.

Revolving Credit Facilities

The following information discusses significant events during the year ended December 31, 2010 and 2009 that relate to the revolving credit facility assumed in the acquisition of Holdings and the new credit facility entered into to finance the acquisition of Coast Crane. Also see note 8 to the consolidated financial statements for further information related to our credit facilities.

Essex Crane Revolving Credit Facility

In conjunction with the acquisition of Holdings on October 31, 2008, Essex Crane amended its asset-based senior secured revolving line of credit facility, which permits it to borrow up to $190.0 million. . Essex Crane may borrow up to an amount equal to the sum of 85% of eligible net receivables and 75% of the net orderly liquidation value of eligible rental equipment. The revolving credit facility is scheduled to mature in October 2013 and is collateralized by a first security interest in substantially all of Essex Crane’s assets.

The maximum amount that could be borrowed under the Essex Crane revolving credit facility, net of letters of credit, interest rate swaps and other reserves was approximately $186.0 million at December 31, 2010, which was limited by the eligible borrowing base. The Company’s available borrowing under the revolving credit facility was $27.7 million at December 31, 2010. As of December 31, 2010 and for the year then ended, the Company was in compliance with its covenants and other provisions of the revolving line of credit facility. Some of the financial covenants including a fixed charge coverage ratio and rental equipment utilization ratio do not become active unless the available borrowing falls below the $20.0 million threshold. The Company’s available borrowing base of approximately $27.7 million comfortably exceeded the threshold at December 31, 2010. Additionally, the Company had $5.8 million of collateral in excess of the $190.0 million limit as of December 31, 2010. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on the Company’s liquidity and operations.

Coast Crane Revolving Credit Facility

In conjunction with the acquisition of Coast Crane on November 24, 2010, our Coast Crane subsidiary entered into a secured revolving credit facility, which permits it to borrow up to $75 million. Coast Crane may borrow, repay and reborrow up to an amount equal to the sum of (a) 85% of eligible net receivables, (b) the lesser of 50% of eligible inventory and $5 million and (c) the lesser of 95% of the lesser of (x) the net orderly liquidation value and (y) the invoice cost , of eligible new equipment inventory and $15 million and (d) 85% of net orderly liquidation value of eligible other equipment net of reserves established by the lender and the liquidity reserve. The revolving credit facility is scheduled to mature in November 2014 and is collateralized by a first security interest in substantially all of the Coast Crane’s assets.

The maximum amount that could be borrowed under the Coast Crane revolving credit facility, net of letters of credit and other reserves was approximately $65.9 million at December 31, 2010, which was limited by the eligible borrowing base. The Company’s available borrowing under the revolving credit facility is $12.0 million at December 31, 2010. As of December 31, 2010 and for the year then ended, the Company was in compliance with its covenants and other provisions of the revolving line of credit facility. Some of the financial covenants including a fixed charge coverage ratio, commencing the first quarter of 2011, do not become active unless the available borrowing falls below the $8.0 million threshold. The Company’s available borrowing base of approximately $12.0 million well exceeded the threshold at December 31, 2010. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on the Company’s liquidity and operations.

Our management believes that cash generated from operations, together with amounts available under the revolving credit facilities, will be adequate to permit us to meet our debt service obligations, ongoing costs of operations, working capital needs and capital expenditure requirements for the foreseeable future. Also, substantially all of our rental equipment and all its other assets are subject to liens under its revolving credit facilities. None of such assets may be available to satisfy the claims of its general creditors. Our future financial and operating performance, ability to service or refinance its debt and ability to comply with covenants and restrictions contained in its debt agreements will be subject to future economic conditions and to financial, business and other factors, many of which are beyond its control.

Coast Crane Canadian Revolving Credit Facility

Under a Canadian Credit Facility assumed in conjunction with the acquisition of Coast Crane Ltd’s assets, the Company may borrow up to $5.0 million depending upon the availability of its borrowing base collateral, consisting of eligible trade receivables, inventories, property and equipment, and other assets located in Canada. As of December 31, 2010, there was no additional availability under the Canadian Credit Facility.

Other Long-term Debt Obligations

In November 2010, the Company entered into an agreement with the holders of certain Coast Crane indebtedness pursuant to which such holders agreed, in consideration of the assumption of such indebtedness by the Company, to exchange such indebtedness of $5.2 million for unsecured promissory notes issued by the Company in the aggregate principal amount of $5.2 million. As additional consideration, we issued warrants to purchase up to 90,000 shares of Essex common stock at $0.01 per share. If the unsecured promissory notes are paid in full on or before May 29, 2011, the number of warrants will be reduced to 30,000. The unsecured promissory notes mature in December 2013. The holders of the unsecured promissory notes are related parties to the Company as they own a significant amount of the Company’s outstanding shares of common stock.

The Company acquired amortizing purchase money security interest debt of $3.8 million in November 2010 in conjunction with the Coast Acquisition, the collateral for which relates seven pieces of equipment acquired from Coast Crane. The remaining balance at December 31, 2010 was $3.8 million. Monthly principal and interest payments are required through the various maturity dates ranging from September 2015 to February 2016.

Short-term Debt Obligations

Essex Finance entered into two short-term debt obligations of $2,554,637 and $2,615,977 with a vendor related to the acquisition of two cranes and related attachments during the year ended December 31, 2009, which matured on October 20, 2010 and November 20, 2010 respectively, and were paid in full in September 2010. The Company also entered into a new short-term debt obligation for $2,560,847 in 2010 which was subsequently paid in full later in September 2010. These short-term obligations were interest free for six months and then accrued interest at 3.0% for an additional six months and are collateralized by the respective cranes and attachments purchased. On the six month anniversary of the origination of each obligation, a 10% principal payment was due and paid.

Capitalized Expenditures

The Company’s capitalization criteria is to capitalize costs in the period they are incurred related to projects with total costs in excess of $20,000 when the projects extend the useful lives or enhance the crane’s capabilities. These capital projects are depreciated using the straight line method over an estimated useful life of 7 years. Individual rental equipment items and property, plant and equipment items purchased with costs in excess of $5,000 are also capitalized and are depreciated over the useful life of the respective item purchased.

The following table provides quantitative information regarding the amount and types of costs capitalized during 2010 and 2009:

	For the years Ended December 31,
	2010		2009		2008

Purchases of rental equipment	$	2,632,831	$	19,588,468	$	2,782,879
Deposits made to purchase rental equipment		-		5,513		-
Costs to prepare cranes for sale		170,036		191,909		12,127
Purchases of property, plant & equipment		54,844		195,676		158,721
Capitalized crane repair costs		755,461		443,149		-
Capitalized internally developed software costs		201,880		372,543		-

Total capitalized expenditures	$	3,815,052	$	20,797,258	$	2,953,727

During the years ended December 31, 2010 and 2009, Essex expensed repair and maintenance costs of approximately $5.8 million and $4.9 million, respectively. The Company expects to capitalize costs of approximately $28.6 million during the year ended December 31, 2011. Approximately $26.5 million of the total is for the purchase of rental equipment, a portion of which will be funded from proceeds from the sales of older and lighter lifting rental equipment.

Off Balance Sheet Arrangements

Options and warrants issued in conjunction with our initial public offering and to members of Essex Crane’s senior management are equity linked derivatives and accordingly represent off-balance sheet arrangements. The options and warrants meet the scope exception within the applicable accounting guidance and are accordingly not accounted for as derivatives, but instead are accounted for as equity. In addition, the Company has operating leases that are not accounted for on the balance sheet.

Contractual Obligations

The following table summarizes the Company’s contractual obligations for the next five years and thereafter as of December 31, 2010:

	Payments Due by Period
Contractual Obligations	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total

Revolving Credit Facilities
Principal		-		161,050,945		53,909,026		-	$	214,959,971
Interest (a)		10,711,497		18,202,797		2,633,905		-		31,548,199

Other debt obligations
Principal		783,243		6,505,097		1,398,134		18,300		8,704,774
Interest		614,332		1,144,779		48,215		327		1,807,653

Operating Leases:
Minimum lease payments		2,415,129		3,019,080		888,965		-