Alto Ingredients Inc (ALTO)

[Rule_62]

The most important statement in that filing would appear to be the following . . .

The current and noncurrent components of our deferred tax balances are generally based on the balance sheet classification of the asset or liability creating the temporary difference. If the deferred tax asset or liability is not based on a component of a balance of our balance sheet, such as our state net operating loss (“NOL”) carryforwards, the classification is presented based on the expected reversal date of the temporary difference. Our valuation allowance has been classified as current and noncurrent based on the percentages of current and noncurrent deferred tax assets to total deferred tax assets.

A debtor is not required to include gain on the discharge of debt in income if the debt discharge occurs in bankruptcy. However, IRC Section 108 requires that the debtor’s NOL, capital and credit carryovers first be reduced and then tax basis in assets be reduced. The Company expects to recognize approximately $52 million of cancellation of debt income resulting from the Plan related to the Company’s bankruptcy reorganization that will reduce available current year tax losses, capital loss carryforwards, and the tax basis in other assets. After consideration of this reduction, the Company expects to have no NOL carryforwards available to offset future federal taxable income.

However, there may well be NOL's that have accumulated since the restructuring . . .