ALJ Regional Holdings Inc. (fka ALJJ)

[Enterprising Investor]

[From the Department of Corrections]

At September 30, 2021, the Company has NOL carryforwards for federal income tax purposes of approximately $135.1 million that begin expiring in 2022. In addition, the use of this NOL in future years may be restricted under Section 382 of the IRC if there is a change of ownership.

ALJJ's fiscal year ends in September.

CFO Brian Hartman made the following comments on the Q4 earnings call.

As of September 30, 2021 we had approximately $135.1 million of net operating loss carry forwards available. As of June 30, 2022, approximately $109.1 million or 80% of these net operating loss carry forwards are set to expire. We anticipate a material gain on sale from Faneuil's transaction and that we will use a significant portion of our existing net operating loss carryforwards to offset federal taxes. We estimate that cash state taxes will approximate $4 million to $7 million for this transaction. Net proceeds after debt repayments, state cash taxes paid and transaction related expenses will be used to fund working capital and ongoing business operations.