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As filed with the Securities and Exchange Commission on February 2, 2016

File No. [    ]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES

PURSUANT TO SECTION 12(b) OR 12(g)

OF THE SECURITIES EXCHANGE ACT OF 1934

244 Madison Avenue, PMB #358

New York, NY 1001 6

(Address of Principal Executive Offices, including zip code)

(212) 883-0083

(Registrant’s telephone number, including area code)

Copies of all correspondence regarding this Form 10 should be directed to the following:

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

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

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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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The statements included in this Form 10 regarding future financial performance, results and conditions and other statements that are not historical facts, including, among others, the statements regarding competition, the Company’s intention to retain earnings for use in the Company’s business operations, the Company’s ability to continue to fund its operations and service its indebtedness, the adequacy of the Company’s accrual for tax liabilities, management’s projection of continued taxable income, and the Company’s ability to offset future income against net operating loss carryovers, constitute forward-looking statements. The words “can,” “could,” “may,” “will,” “would,” “plan,” “future,” “believes,” “intends,” “expects,” “anticipates,” “projects,” “estimates,” and similar expressions are also intended to identify forward-looking statements. These forward-looking statements are based on current expectations and are subject to risks and uncertainties. Actual results or events could differ materially from those set forth or implied by such forward-looking statements and related assumptions due to certain important factors, including, without limitation, the risks set forth under the caption “Risk Factors” below, which are incorporated herein by reference. Some, but not all, of the forward-looking statements contained in this Form 10 include, among other things, statements about the following:

The Company is also subject to general business risks, including results of tax audits, adverse state, federal or foreign legislation and regulation, changes in general economic factors, the Company’s ability to retain and attract key employees, acts of war or global terrorism and unexpected natural disasters. Any forward-looking statements included in this Form 10 are made as of the date hereof, based on information available to the Company as of the date hereof, and, the Company assumes no obligation to update any forward-looking statements.

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Overview

ALJ Regional Holdings, Inc. (“ALJ,” or “we”) is a holding company that operates three wholly owned subsidiaries. We purchased Faneuil, Inc. (“Faneuil”) on October 18, 2013; Floors-N-More, LLC, dba Carpets N’ More, (“Carpets”) on March 31, 2014; and Phoenix Color Corp. (“Phoenix”) on August 8, 2015. As a result, we have organized our business and corporate structure into three business segments: Faneuil, Carpets, and Phoenix.

With several members of senior management and our Board of Directors coming from long careers in the professional service industry, ALJ is focused on acquiring and operating exceptional customer service-based businesses.

Faneuil

Background

Faneuil is a Delaware corporation with headquarters in Hampton, VA. We acquired Faneuil from Harland Clarke Holdings Corp, a wholly owned subsidiary of MacAndrews & Forbes Holdings Inc. for aggregate consideration of $53.0 million in 2013. For additional information regarding this transaction, see “Item 7. Certain Relationships and Related Transactions, and Director Independence.”

Faneuil is a nationally recognized leader in technology-enabled in-person and automated service delivery, particularly in regulated, highly complex environments.

Services

Faneuil provides business processing solutions for an extensive client portfolio that includes both commercial and government entities across several verticals, including transportation, government services, utilities and healthcare. Utilizing advanced applications and a team of approximately 3,300 service professionals, Faneuil delivers broad outsourcing support, ranging from customer contact centers, fulfillment operations and information technology services, to manual and electronic toll collection, violation processing and medical device tracking, with the goal of building its clients’ brands by providing exemplary customer service.

Faneuil’s core competencies include:

Faneuil’s customer contact employees undergo intensive training and development, followed by structured monitoring and assessments before they are certified to process customer contacts. Faneuil’s customer contact employees provide service delivery through multiple communication channels, including telephone, fax, email, web chat and face-to-face interaction. Additionally, Faneuil provides multi-lingual representatives to accommodate the communication needs of non-English-speaking customers, as well as the hearing-impaired.

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Employees

Faneuil had approximately 3,300 employees as of September 30, 2015. None of Faneuil’s employees are subject to any collective bargaining agreements. Faneuil considers its employee relations good.

Customers

Faneuil’s client portfolio includes both government and commercial entities nationwide, including several toll authorities, state agencies, municipalities, a publicly owned utility, two health benefit exchanges, an agency that operates the major airports serving the Washington, D.C. area and several other public and private entities.

For the year ended September 30, 2015, Faneuil had three customers associated with five contracts that accounted for approximately 34.2%, 12.6%, and 11.4% of its net revenue, of which approximately $5.8 million, $1.9 million, and $0, respectively were included in accounts receivable at September 30, 2015.

Many of Faneuil’s customers are government agencies subject to contractual budgetary ceilings. State and local funding for these agencies are approved by the respective state legislature(s) each year. Depending on budgetary constraints, the contract values may be subject to change based upon ongoing legislative approval.

Competition

Faneuil’s primary competitors are other large providers of toll services, such as Xerox, AEComm and TransCore, Inc., as well as contact center operators such as Xerox, Maximus and Alberta Health Services. In many cases, Faneuil is smaller and has less financial and personnel resources than its competitors. If Faneuil cannot compete effectively to win new business and retain existing clients, its operating results will be negatively affected. To remain competitive, Faneuil must continuously implement new technologies, expand its portfolio of outsourced services and may have to make occasional strategic adjustments to its pricing for its services.

Properties

Faneuil leases all its properties with various locations throughout the United States for customer contact centers, walk-in retail, and administration. Corporate headquarters are located in Hampton, VA. Faneuil’s leased facilities comprise an aggregate of approximately 230,000 square feet with leases that expire at various dates through December 2020. Faneuil believes the facilities under lease will be adequate for at least the next 12 months. For additional information regarding Faneuil’s obligations under property leases, see Note 15 of Notes to Consolidated Financial Statements, included in Item 15 of this Report.

Backlog

Faneuil’s backlog represents multi-year contract deliverables, which totaled $290.2 million and $110.1 million as of September 30, 2015 and 2014, respectively.

Seasonality

Faneuil experiences seasonality within its various lines of business. For example, during the end of the calendar year through the end of the first calendar quarter, Faneuil generally experiences higher revenues in the healthcare markets as the contact centers increase operations during the enrollment periods of the healthcare exchanges. Faneuil’s revenue generally decreases in the healthcare sector during the remaining portion of the year after the enrollment period. Seasonality is less prevalent in the transportation segments though there is typically an increase in volume during the summer months.

Governmental Regulation

Faneuil’s business is subject to many legal and regulatory requirements in the United States, covering such matters as data privacy, consumer protection, health care requirements, labor relations, taxation, internal and disclosure control obligations, governmental affairs and immigration. For example, Faneuil is subject to state and federal laws and regulations regarding the protection of consumer information commonly referred to as “non-public personal information.” For instance, the collection of patient data through Faneuil’s contact center services and medical

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device tracking services is subject to the Health Insurance Portability and Accountability Act of 1996, commonly known as HIPAA, which protects the privacy of patient data. These laws, regulations and agreements require Faneuil to develop and implement policies to protect non-public personal information and to disclose these policies to consumers before a customer relationship is established and periodically after that. These laws, regulations, and agreements limit Faneuil’s ability to use or disclose non-public personal information for other than the purposes originally intended. Many of these regulations, including those related to data privacy, are frequently changing and sometimes conflict with existing ones amongst the various jurisdictions in which Faneuil provides services. Violations of these laws and regulations could result in liability for damages, fines, criminal prosecution, unfavorable publicity and restrictions on Faneuil’s ability to operate. Faneuil’s failure to adhere to or successfully implement processes in response to changing regulatory requirements in this area could result in legal liability or impairment to Faneuil’s reputation in the marketplace, which could have a material adverse effect on Faneuil’s business, results of operations and financial condition. Also, because a substantial portion of Faneuil’s operating costs consists of labor costs, changes in governmental regulations relating to wages, healthcare and healthcare reform and other benefits or employment taxes could have a material adverse effect on Faneuil’s business, results of operations or financial condition.

Management

Faneuil is led by our board member Anna Van Buren, who has served as Faneuil’s President and Chief Executive Officer since 2009, and previously served in executive roles at Faneuil since 2004. For additional information regarding Ms. Van Buren, see “Item 5. Directors and Executive Officers.”

Carpets N’ More

Background

Carpets was originally organized in Nevada in 2007. We acquired Carpets from Levine Leichtman in 2014 for aggregate consideration of $5.25 million. For additional information regarding this transaction, see “Item 7. Certain Relationships and Related Transactions, and Director Independence.”

Carpets is one of the largest floor covering retailers in Las Vegas, Nevada, and a provider of multiple products for the commercial, retail and home builder markets, including flooring, countertops, cabinets, window coverings and garage/closet organizers. In addition to a stone and solid surface fabrication facility, Carpets has five retail locations in the Las Vegas area, where it provides multiple products for the commercial, retail and homebuilder markets.

Products and Services

Floor Coverings . Carpets provides various floor coverings to home builders, commercial and retail customers including carpet, hardwood, laminate, tile, ceramic, porcelain, natural stone, vinyl plank, vinyl tile, area rugs and specialty flooring including bamboo, leather, cork and large format tile.

Countertops and Surrounds . Carpets provides countertop and surrounds, primarily for bathrooms and kitchens, including natural stone, granite, ceramic, porcelain, solid surface, quartz and piedrafina.

Cabinets and Other Products . Carpets provides kitchen, bathroom, and garage cabinets; closet and closet organizers; and window coverings including blinds, shutters, and shades.

Customers and Vendors

Carpets sells to a variety of customers, including home owners and home builders as well as to owners and operators of commercial buildings. Carpets’ home building customers include some of the largest home builders in the United States, along with local builders in and around Las Vegas, Nevada. Carpets’ commercial customers include general contractors, real estate investment firms/funds and commercial entities such as casinos and other companies looking to improve their office space. Carpets’ retail customers include the general public interested in making home improvements.

Carpets bids directly with home builders on residential developments and is awarded flooring, countertops and surrounds and/or cabinet contracts. These contracts involve installing the base level products in each of the

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residential homes within the awarded development and, when requested, providing upgraded materials and services to the base level products. Carpets also bids on commercial work and is awarded contracts generally on a fixed price basis. These projects generally involve high-rise condos, office buildings, tenant improvements, off-strip casinos and general contractors. Carpets’ marketing activities include billboards, Internet search engine optimization, banner advertising, car wraps, affiliate websites and radio and television advertising.

For the year ended September 30, 2015, Carpets received 58.4% of its revenue from three customers which accounted for 27.3%, 25.6%, and 5.5% of Carpets revenues, respectively, of which $0.5 million, $1.2 million, and $0.5 million, respectively, were included in accounts receivable as of September 30, 2015.

For the year ended September 30, 2015, Carpets had four suppliers that accounted for approximately 19.3%, 18.7%, 14.9% and 10.4% of its inventory purchases, respectively. Carpets has negotiated agreements with various other suppliers for similar products as well.

Competition

Carpets’ primary competitors are other flooring, countertop and surround and cabinet providers in the Las Vegas area, such as Interior Specialist Inc. and Classic Flooring, as well as large box stores like Lowes, Home Depot and RC Willey. Carpets believes that its competitive advantages include a comprehensive and high-end quality solution for home builders for flooring, surrounds and cabinets, which provides them with a single point of accountability. Carpets also competes with discounted flooring companies like Cloud Carpet and Carpets Galore.

Seasonality

Carpets generally experiences seasonality within the home building business as the number of houses sold during the winter months are generally lower than other times during the year. Conversely, the number of houses sold and delivered during the remaining portion of the year increases in comparison.

Employees

Carpets had 112 employees as of September 30, 2015. None of its employees are subject to any collective bargaining agreements. Carpets considers its employee relations good.

Properties

Carpets leases and operates five retail locations in and around Las Vegas, NV. Carpets’ corporate offices are also located in Las Vegas, NV. Carpets’ leased facilities comprise an aggregate of approximately 90,000 square feet with leases that expire at various dates through September 2019. Carpets believes the facilities under lease will be adequate for at least the next 12 months. For additional information regarding our obligations under property leases, see Note 15 of Notes to Consolidated Financial Statements, included in Item 15 of this Report.

Management

Carpets is led by Steve Chesin, who has served as its Chief Executive Officer since 2007. For additional information about Mr. Chesin, see “Item 5. Directors and Executive Officers.”

Phoenix Color Corp.

Background

Phoenix was originally incorporated in New York in 1979 and reincorporated in Delaware in 1996. We acquired Phoenix from Visant Corporation in 2015 for aggregate consideration of $88.3 million. For additional information regarding this transaction, see “Item 7. Certain Relationships and Related Transactions, and Director Independence.”

Phoenix is a premier full-service, full-color printer with over 35 years of superior print experience. Drawing on a broad spectrum of materials and decorative technologies, Phoenix produces memorable, value-added components,

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heavily illustrated books, and specialty commercial products. Book publishers generally design book components to enhance the sales appeal of their books. The production of book components requires specialized equipment, materials, and finishes and often demands high-quality, intricate work. As a result, many leading publishers rely on specialty printers such as Phoenix to supply high-quality book components. This same philosophy applies to labels, packaging, and specialty commercial products, where Phoenix’s customers require the knowledge and expertise of a printer that can enhance their products for sale into the commercial marketplace. Phoenix has been servicing the publishing industry within the United States since 1979 and has formed lasting relationships with many of the biggest names in book publishing.

As a domestic manufacturer, Phoenix offers extensive, in-house digital pre-press capabilities and its technologically advanced UV printing platform supports an array of printing and finishing options. Phoenix’s innovative special effects include foil stamping, UV embellishments and laminations, as well as its trademarked products LithoFoil ^® , MetalTone™, Look of Leather™ and VibraColor™.

Products and Services

Books and Components

Phoenix offers several products for books and components, which represents 96.5% of Phoenix’s revenue.

Phoenix is a leader in providing distinctive cover components and high-quality, heavily illustrated and multi-colored books for all markets. With its technologically advanced prepress and press operations as well as an array of finishing applications and innovative special effects, Phoenix is committed to producing memorable, value-added products.

Labels and Packaging

In recent years, Phoenix has expanded into the label and packaging markets to leverage its unique printing and finishing capabilities as well as its trademarked special effects and extensive offerings of finishes and coatings. In 2014, Phoenix acquired the Brady Palmer Company, establishing its presence in the cut and stack label market. Phoenix is continuing to pursue growth in the folding carton and box wrap markets as well, and has invested in additional manufacturing capabilities and sales and marketing personnel to support these efforts.

Employees

Phoenix had 335 employees as of September 30, 2015. None of its employees are subject to any collective bargaining agreements. Phoenix considers its employee relations good.

Customers and Vendors

Phoenix’s customers include many of the leading publishing companies.

For the period ended September 30, 2015, Phoenix had three customers that accounted for approximately 27.0%, 15.6%, and 13.2%, of its revenues, respectively, of which $2.6 million, $1.2 million, and $1.0 million, respectively, were included in accounts receivable as of September 30, 2015.

For the period ended September 30, 2015, Phoenix had two suppliers that accounted for approximately 26.3% and 16.5% of its inventory purchases. Phoenix maintains accounts with other vendors to ensure that there are no business interruptions resulting from an inability to source materials timely or at all.

Backlog

Phoenix generally completes all jobs within a 30-day timeframe from the date of request, and, therefore, does not have any significant backlog. Contract volume commitments are generally defined as a percentage of a customer’s book component business; thus, there is not a fixed dollar value in most of our agreements with our customers.

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Seasonality

There is seasonality to Phoenix’s business. Education book component sales (school and college) traditionally peak in the first and second quarters of the calendar year. Other book components sales traditionally peak in the third quarter of the calendar year. Book sales also traditionally peak in the third quarter of the calendar year. The fourth quarter of the calendar year traditionally has been the Phoenix’s weakest quarter. These seasonal factors are not significant.

Competition

The printing industry in general, and the printing and manufacturing of books in particular, is extremely competitive. Over the past several years, there has been significant consolidation in the publishing industry, such that fewer publishers control a greater share of the market. Although there are still many small, independent publishers, they do not wield the leverage held by major publishing houses. Additionally, the printing industry has experienced a reduction in demand for trade books due to the impact of the e-book market and a reduction in textbooks due to lower state government funding, alternative product formats and digital distribution of content.

Phoenix’s primary competitors in the printing and manufacturing of books and book components include, but are not limited to, R.R. Donnelley, Coral Graphics, Quad Graphics, and Worzalla. There is no reliable industry data available to determine Phoenix’s market share and position versus that of its competitors. With respect to book components, a portion of the products is produced by the book manufacturers and a portion by component printers. The dollar value of book components manufactured by the book manufacturers or by other component printers is unknown. Phoenix and Coral Graphics are the two primary trade book component manufacturers used by major publishers in the U.S. market. Most high-quality, heavily-illustrated and multi-colored books sold in the U.S. are produced outside of the U.S. Phoenix competes with Worzalla and several domestic book manufacturers for that portion that is produced domestically.

Properties

Phoenix owns its principal properties for corporate offices and production located in Hagerstown, MD. Phoenix’s owned facilities comprise an aggregate of approximately 276,000 square feet. Phoenix believes the facilities will be adequate for at least the next 12 months. For additional information regarding Phoenix’s obligations under property leases, see Note 15 of Notes to Consolidated Financial Statements, included in Item 15 of this Report.

Management

Phoenix is led by our board member Marc Reisch, who serves as its Chairman and previously served as its Chief Executive Officer from 2008 to 2015. For additional information regarding Mr. Reisch, see “Item 5. Directors and Executive Officers.”

Additional Information About ALJ and its Subsidiaries

ALJ was originally incorporated in the State of Delaware under the name Nuparent, Inc. on June 22, 1999. The Company’s name was changed to YouthStream Media Networks, Inc. on June 24, 1999, and that name was used through October 23, 2006. The Company’s name was changed to ALJ Regional Holdings, Inc. on October 23, 2006.

As of September 30, 2015, ALJ had two employees, its Executive Chairman and its Chief Financial Officer, performing services dedicated primarily to general corporate and administrative matters. None of the employees of ALJ, Faneuil, Carpets or Phoenix are represented by a labor union.

Intellectual Property

We rely on copyright, trademark, and trade secret laws as well as contractual restrictions to protect our proprietary information and intellectual property rights. We control access to our proprietary information and intellectual property, in part, by entering into confidentiality and invention assignment agreements with our employees,

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contractors, and business partners. We also control the use of our proprietary information and intellectual property through provisions in our client agreements and distribution partner agreements.

We have seven registered trademarks and one registered copyright in the United States as well as a number of common law trademarks and trade names. We rely substantially on unpatented proprietary technology. We do not consider the success of our business, as a whole, to be dependent on our intellectual property.

The following risk factors and other information included in this Form 10 should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business, financial condition and operating results could be significantly harmed.

Risks Related to Faneuil

Economic downturns and reductions in government funding could have a negative effect on Faneuil’s business.

Demand for the services offered by Faneuil has been, and is expected to continue to be, subject to significant fluctuations due to a variety of factors beyond its control, including economic conditions. During economic downturns, the ability of both private and governmental entities to make expenditures may decline significantly. We cannot be certain that economic or political conditions will be generally favorable or that there will not be significant fluctuations adversely affecting Faneuil’s industry as a whole, or key industry segments targeted by Faneuil. In addition, Faneuil’s operations are, in part, dependent upon state government funding. Significant changes in the level of state government funding could have an unfavorable effect on Faneuil’s business, financial position, results of operations and cash flows.

Faneuil’s business involves many program-related and contract-related risks.

Faneuil’s business is subject to a variety of program-related risks, including changes in political and other circumstances, particularly since contracts for major programs are performed over extended periods of time. These risks include changes in personnel at government authorities, the failure of applicable government authorities to take necessary actions, opposition by third parties to particular programs and the failure by customers to obtain adequate financing for particular programs. Due to these factors, losses on a particular contract or contracts could occur, and Faneuil could experience significant changes in operating results on a quarterly or annual basis.

Delays in the government budget process or a government shutdown may adversely affect Faneuil’s cash flows and operating results.

Faneuil derives a significant portion of its revenue from state government contracts and programs. Any delay in the state government budget process or a state government shutdown may result in Faneuil’s incurrence of substantial labor or other costs without reimbursement under customer contracts, or the delay or cancellation of key programs in which Faneuil is involved, which could materially adversely affect Faneuil’s cash flows and operating results.

Faneuil faces intense competition. If Faneuil does not compete effectively, its business may suffer.

Faneuil faces intense competition from numerous competitors. Faneuil primarily competes on the basis of quality, performance, innovation, technology, price, applications expertise, system and service flexibility and established customer service capabilities, as its services relate to toll collection, customer contact centers and employee staffing. Faneuil may not be able to compete effectively on all of these fronts or with all of its competitors. In addition, new competitors may emerge, and service offerings may be threatened by new technologies or market trends that reduce the value of the services Faneuil provides. To remain competitive, Faneuil must respond to new technologies and enhance its existing services, and we anticipate that it may have to adjust the pricing for its services to stay competitive on future responses to proposals. If Faneuil does not compete effectively, its business, financial position, results of operations and cash flows could be materially adversely affected.

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Faneuil’s dependence on one or a few contracts could adversely affect its business or results of operations.

One or a few contracts have in the past, and may, in the future, contribute a significant portion of Faneuil’s consolidated net revenue in one year, or over a period of several consecutive years. For the year ended September 30, 2015, the Company’s Faneuil segment had eight contracts that each independently accounted for more than 5% of its total net revenue. In the aggregate, these contracts accounted for $119.9 million, or 80.1% of Faneuil’s total net revenue for the year ended September 30, 2015. Three of these contracts independently accounted for more than 10% of its net revenue for the same period, at 19.7%, 12.6%, and 11.4%, respectively. Faneuil has long-standing relationships with many of its significant customers. However, because Faneuil’s customers generally contract for specific projects or programs with a finite duration, Faneuil may lose these customers if funding for their respective programs is discontinued, or if their projects end and the contracts are not renewed or replaced. The loss or reduction of, or failure to renew or replace, any significant contracts with any of these customers could materially reduce Faneuil’s revenue and cash flows. Additionally, many of Faneuil’s customers are government entities, which can unilaterally terminate or modify the existing contracts with Faneuil without cause and penalty to such government entities in many situations. If Faneuil does not replace them with other customers or other programs, the loss of business from any one of such customers could have a material adverse effect on its business or results of operations.

Faneuil’s ability to recover capital investments in connection with its contracts is subject to risk.

In order to attract and retain large outsourcing contracts, Faneuil sometimes makes significant capital investments to perform its services under the contract, such as purchases of information technology equipment and costs incurred to develop and implement software. The net book value of such assets, including a portion of Faneuil’s intangible assets, could be impaired, and Faneuil’s earnings and cash flow could be materially adversely affected in the event of the early termination of all or a part of such a contract, reduction in volumes and services thereunder for reasons including, but not limited to, a client’s merger or acquisition, divestiture of assets or businesses, business failure or deterioration, or a client’s exercise of contract termination rights.

Faneuil’s business could be adversely affected if Faneuil’s clients are not satisfied with its services.

Faneuil’s business model depends in large part on its ability to attract new work from its base of existing clients. Faneuil’s business model also depends on relationships it develops with its clients with respect to understanding its clients’ needs and delivering solutions that are tailored to those needs. If a client is not satisfied with the quality of work performed by Faneuil or a subcontractor or with the type of services or solutions delivered, Faneuil could incur additional costs to address the situation, the profitability of that work might be impaired and the client’s dissatisfaction with Faneuil’s services could lead to the termination of that work or damage Faneuil’s ability to obtain additional work from that client. Also, negative publicity related to Faneuil’s client relationships, regardless of its accuracy, may further damage Faneuil’s business by affecting its ability to compete for new contracts with current and prospective clients.

Faneuil’s dependence on subcontractors and equipment manufacturers could adversely affect it.

In some cases, Faneuil relies on and partners with third party subcontractors as well as third-party equipment manufacturers to provide services under its contracts. To the extent that Faneuil cannot engage subcontractors or acquire equipment or materials, Faneuil’s ability to perform according to the terms of its contracts with its customers may be impaired. If the amount Faneuil is required to pay for subcontracted services or equipment exceeds the amount Faneuil has estimated in bidding for fixed prices or fixed unit price contracts, it could experience reduced profit or losses in the performance of these contracts with its customers. Also, if a subcontractor or a manufacturer is unable to deliver its services, equipment or materials according to the negotiated terms for any reason, including the deterioration of its financial condition, Faneuil may be required to purchase the services, equipment or materials from another source at a higher price. This may reduce the expected profit or result in a loss on a customer contract for which the services, equipment or materials were needed.

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Faneuil’s dependence on primary contractors could adversely affect its ability to secure new projects and derive a profit from its existing projects.

In some cases, Faneuil partners as a subcontractor with third parties who are the primary contractors. In these cases, Faneuil is largely dependent on the judgments of the primary contractors in bidding for new projects and negotiating the primary contracts, including establishing the scope of services and service levels to be provided. Furthermore, even if projects are secured, if a primary contractor is unable to deliver its services according to the negotiated terms of the primary contract for any reason, including the deterioration of its financial condition, the customer may terminate or modify the primary contract, which may reduce Faneuil’s profit or cause losses in the performance of the contract.

If Faneuil or a primary contractor guarantees to a customer the timely implementation or performance standards of a program, Faneuil could incur additional costs to meet its guaranteed obligations or liquidated damages if it fails to perform as agreed.

In certain instances, Faneuil or its primary contractor guarantees a customer that it will implement a program by a scheduled date. At times, they also provide that the program will achieve or adhere to certain performance standards or key performance indicators. Although Faneuil generally provides input to its primary contractors regarding the scope of services and service levels to be provided, it is possible that a primary contractor may make commitments without Faneuil’s input or approval. If Faneuil or the primary contractor subsequently fails to implement the program as scheduled, or if the program subsequently fails to meet the guaranteed performance standards, Faneuil may be held responsible for costs to the client resulting from any delay in implementation, or the costs incurred by the program to achieve the performance standards. In most cases where Faneuil or the primary contractor fails to meet contractually defined performance standards, Faneuil may be subject to agreed-upon liquidated damages. To the extent that these events occur, the total costs for the program would exceed Faneuil’s original estimates, and it could experience reduced profits or in some cases a loss for that program.

Adequate bonding is necessary for Faneuil to win new contracts.

In line with industry practice, Faneuil is often required, primarily in its toll and transportation programs, to provide performance and surety bonds to customers in conjunction with its contracts. These bonds indemnify the customer should Faneuil fail to perform its obligations under the contracts. If a bond is required for a particular program and Faneuil is unable to obtain an appropriate bond, Faneuil cannot pursue that program. The issuance of a bond is at the surety’s sole discretion. Moreover, due to events that affect the insurance and bonding markets generally, bonding may be more difficult to obtain in the future or may only be available at significant additional costs. There can be no assurance that bonds will continue to be available on reasonable terms, or at all. Any inability to obtain adequate bonding and, as a result, to bid on new work could harm Faneuil’s business.

Interruption of Faneuil’s data centers and customer contact centers could negatively impact Faneuil’s business.

If Faneuil were to experience a temporary or permanent interruption at one or more of Faneuil’s data or customer contact centers due to natural disaster, casualty, operating malfunction, cyber-attack, sabotage or any other cause, Faneuil may be unable to provide the services it is contractually obligated to deliver. This could result in Faneuil being required to pay contractual damages to some clients or to allow some clients to terminate or renegotiate their contracts. Notwithstanding disaster recovery and business continuity plans and precautions instituted to protect Faneuil’s clients and Faneuil from events that could interrupt delivery of services, there is no guarantee that such interruptions would not result in a prolonged interruption in Faneuil’s ability to provide services to its clients or that such precautions would adequately compensate Faneuil for any losses it may incur as a result of such interruptions.

Any business disruptions due to political instability, armed hostilities, acts of terrorism or natural disasters could adversely affect Faneuil’s financial performance.

If terrorist activities, armed conflicts, political instability or natural disasters occur in the United States or other locations, such events may negatively affect Faneuil’s operations, cause general economic conditions to deteriorate or cause demand for Faneuil’s services, many of which depend on travel, to decline. A prolonged economic slowdown or recession could reduce the demand for Faneuil’s services, and consequently, negatively affect

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Faneuil’s future sales and profits. Any of these events could have a significant effect on Faneuil’s business, financial condition or results of operations.

Faneuil is subject to uncertainties regarding healthcare reform that could materially and adversely affect our business.

On March 23, 2010, President Obama signed the Affordable Care Act (the “Affordable Care Act”) into law, which has effected comprehensive health insurance reform, including the creation of health insurance exchanges, among other reforms. A portion of Faneuil’s healthcare business relates to providing services to health insurance exchanges in various states and Faneuil believes that there may be significant opportunities for growth in this area. However, as has been widely publicized, the Affordable Care Act has been fraught with challenges. Given these challenges, there is uncertainty about continued developments with respect to healthcare reform. Significant changes to, or repeal of, the Affordable Care Act could materially and adversely affect our business.

Faneuil’s business is subject to many regulatory requirements, and current or future regulation could significantly increase Faneuil’s cost of doing business.

Faneuil’s business is subject to many laws and regulatory requirements in the United States, covering such matters as data privacy, consumer protection, health care requirements, labor relations, taxation, internal and disclosure control obligations, governmental affairs and immigration. For example, Faneuil is subject to state and federal laws and regulations regarding the protection of consumer information commonly referred to as “non-public personal information.” For instance, the collection of patient data through Faneuil’s contact center services and medical device tracking services is subject to the Health Insurance Portability and Accountability Act of 1996, commonly known as HIPAA, which protects the privacy of patients’ data. These laws, regulations and agreements require Faneuil to develop and implement policies to protect non-public personal information and to disclose these policies to consumers before a customer relationship is established and periodically after that. These laws, regulations, and agreements limit Faneuil’s ability to use or disclose non-public personal information for purposes other than the ones originally intended. Many of these regulations, including those related to data privacy, are frequently changing and sometimes conflict with existing ones among the various jurisdictions in which Faneuil provides services. Violations of these laws and regulations could result in Faneuil’s liability for damages, fines, criminal prosecution, unfavorable publicity and restrictions on Faneuil’s ability to operate. Faneuil’s failure to adhere to or successfully implement processes in response to changing regulatory requirements in this area could result in legal liability or impairment to Faneuil’s reputation in the marketplace, which could have a material adverse effect on Faneuil’s business, results of operations and financial condition. In addition, because a substantial portion of Faneuil’s operating costs consist of labor costs, changes in governmental regulations relating to wages, healthcare and healthcare reform and other benefits or employment taxes could have a material adverse effect on Faneuil’s business, results of operations or financial condition.

A failure to attract and retain necessary personnel, skilled management, and qualified subcontractors may have an adverse impact on Faneuil’s business.

Because Faneuil operates in intensely competitive markets, its success depends to a significant extent upon its ability to attract, retain and motivate highly skilled and qualified personnel and to subcontract with qualified, competent subcontractors. If Faneuil fails to attract, develop, motivate, retain, and effectively utilize personnel with the desired levels of training or experience, or is unable to contract with qualified, competent subcontractors, Faneuil’s business will be harmed. Experienced and capable personnel remain in high demand, and there is continual competition for their talents. Additionally, regarding the labor-intensive business of Faneuil, quality service depends on Faneuil’s ability to retain employees and control personnel turnover. Any increase in the employee turnover rate could increase recruiting and training costs and could decrease operating effectiveness and productivity. Faneuil may not be able to continue to hire, train and retain a sufficient number of qualified personnel to adequately staff new client projects. Faneuil’s business is driven in part by the personal relationships of Faneuil’s senior management team, and its success depends on the skills, experience and performance of members of Faneuil’s senior management team. Despite executing an employment agreement with Faneuil’s CEO, she or other members of the management team may discontinue service with Faneuil and Faneuil may not be able to find individuals to replace them at the same cost, or at all. Faneuil has not obtained “key person” insurance for any member of its senior management team. The loss or interruption of the services of any key employee or the loss of a key subcontractor relationship could hurt Faneuil’s business, financial condition, cash flow, results of operations and prospects.

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Risks Related to Carpets

The floor covering industry is highly dependent on national and regional economic conditions, such as consumer confidence and income, corporate and individual spending, interest rate levels, availability of credit and demand for housing. A decline in residential or commercial construction activity or remodeling and refurbishment in Las Vegas could have a material adverse effect on our business.

The floor covering industry is highly dependent on construction activity, including new construction, which is cyclical in nature and recently experienced a downturn. The downturn in the U.S. and global economies, along with the residential and commercial markets in such economies, particularly in Las Vegas, negatively impacted the floor covering industry and Carpets’ business. Although the impact of a decline in new construction activity is typically accompanied by an increase in remodeling and replacement activity, these activities lagged during the downturn. Although these difficult economic conditions have improved, there may be additional downturns that could cause the industry to deteriorate in the future. A significant or prolonged decline in residential/commercial remodeling or new construction activity could have a material adverse effect on the Company’s business and results of operations.

Carpets faces intense competition in the floor covering industry that could decrease demand for its products or force it to lower prices, which could have a material adverse effect on our business.

The floor covering industry is highly competitive. Carpets competes with a number of home improvement stores, building materials supply houses and lumber yards, specialty design stores, showrooms, discount stores, local, regional and national hardware stores, mail order firms, warehouse clubs, independent building supply stores and other retailers, as well as with installers. Also, it faces growing competition from online and multichannel retailers as its customers increasingly use computers, tablets, smart phones and other mobile devices to shop online and compare prices and products in real time. Intense competitive pressures from one or more of Carpets’ competitors or its inability to adapt effectively and quickly to a changing competitive landscape could affect its prices, its margins or demand for its products and services. If it is unable to respond timely and appropriately to these competitive pressures, including through maintaining competitive locations of stores, customer service, quality and price of merchandise and services, in-stock levels, and merchandise assortment and presentation, its market share and its financial performance could be adversely affected.

Carpets may not timely identify or effectively respond to consumer needs, expectations or trends, which could adversely affect its relationship with customers, its reputation, demand for its products and services and its market share.

Carpets operates in a market sector where demand is strongly influenced by rapidly changing customer preferences as to product design and features. Carpets’ success depends on its ability to anticipate and react to changing consumer demands promptly. All of its products are subject to changing consumer preferences that cannot be predicted with certainty. Also, long lead times for certain of its products may make it hard for it to respond quickly to changes in consumer demands. Consumer preferences could shift rapidly to different types of products or away from the types of products Carpets carries altogether, and its future success depends, in part, on its ability to anticipate and respond to these changes. Failure to anticipate and respond promptly to changing consumer preferences could lead to, among other things, lower sales and excess inventory levels, which could have a material adverse effect on its financial condition.

Carpets relies on third-party suppliers for its products. If it fails to identify and develop relationships with a sufficient number of qualified suppliers, or if its suppliers experience financial or operational difficulties, its ability to timely and efficiently access products that meet its standards could be adversely affected.

Carpets sources, stocks and sells products from vendors, and its ability to fulfill their orders reliably and efficiently is critical to its business success. Its ability to continue to identify and develop relationships with qualified suppliers who can satisfy its standards for quality and the need to access products in a timely, efficient and cost-effective manner is a significant challenge. Carpets’ ability to access products can also be adversely affected by political instability, the financial instability of suppliers, suppliers’ noncompliance with applicable laws, trade restrictions, tariffs, currency exchange rates, supply disruptions, weather conditions, natural disasters, shipping or logistical interruptions or costs and other factors beyond its control. If these vendors fail or are unable to perform as expected

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and Carpets is unable to replace them quickly, its business could be adversely affected, at least temporarily, until it can do so, and potentially, in some cases, permanently.

Failure to achieve and maintain a high level of product and service quality could damage Carpets’ image with customers and negatively impact its sales, profitability, cash flows and financial condition.

Product and service quality issues could result in a negative impact on customer confidence in Carpets and the Carpets brand image. As a result, Carpets’ reputation as a retailer of high-quality products and services could suffer and impact customer loyalty. Additionally, a decline in product and service quality could result in product recalls, product liability and warranty claims. Carpets generally provides a one-year warranty on the installation of any of its products. Warranty work related directly to installation is repaired at the cost to Carpets, and product defects are generally charged back to the manufacturer.

If Carpets is unable to manage its installation service business effectively, it could suffer lost sales and be subject to fines, lawsuits and a damaged reputation.

Carpets acts as a general contractor to provide installation services to its customers. As such, it is subject to regulatory requirements and risks applicable to general contractors, which include management of licensing, permitting and the quality of its installers. If Carpets fails to effectively manage these processes or provide proper oversight of these services, it could suffer lost sales, fines and lawsuits, as well as damage to its reputation, which could adversely affect its business.

Carpets’ business is dependent on estimating fixed price projects correctly and completing the installations within budget. Carpets could suffer losses associated with installations on fixed price projects.

Most of Carpets’ business consists of fixed price projects that are bid for and contracted based on estimated costs. The estimating process includes budgeting for the appropriate amount of materials, labor and overhead. At times, this work can be substantial and as a result Carpets’ ability to estimate costs correctly and its ability to complete the project within budget or satisfaction without material defect is essential. If Carpets is unable to estimate a project properly or unable to complete the project within budget or without material defect, it may suffer losses, which could adversely affect its reputation, business, and financial condition.

Carpets’ success depends upon its ability to attract, train and retain highly qualified associates while also controlling its labor costs.

Carpets’ customers expect a high level of customer service and product knowledge from its associates. To meet the needs and expectations of its customers, it must attract, train and retain a large number of highly qualified associates while at the same time controlling labor costs. Its ability to control labor costs is subject to numerous external factors, including prevailing wage rates and health and other insurance costs, as well as the impact of legislation or regulations governing labor relations or healthcare benefits. Also, Carpets competes with other retail businesses for many of its associates in hourly positions, and it invests significant resources in training and motivating them to maintain a high level of job satisfaction. These positions have historically had high turnover rates, which can lead to increased training and retention costs. There is no assurance that Carpets will be able to attract or retain highly qualified associates in the future.

Risks Related to Phoenix

Phoenix faces intense competition in the printing industry that could decrease demand for its products or force it to lower prices.

The printing industry is highly competitive. Phoenix competes directly or indirectly with a number of established book and book component manufacturers. New distribution channels such as digital formats, the internet and online retailers and growing delivery platforms ( e.g ., tablets and e-readers), combined with the concentration of retailer power, pose threats and provide opportunities to traditional consumer publishing models, potentially impacting both sales volumes and pricing.

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Competitive pressures or the inability to adapt effectively and quickly to a changing competitive landscape could affect Phoenix’s prices, its margins or demand for its products and services. If Phoenix is unable to respond timely and appropriately to these competitive pressures, from existing or new competitors, its business could be adversely affected.

Economic weakness and uncertainty, as well as the effects of these conditions on Phoenix’s customers and suppliers, could reduce demand for or Phoenix’s ability to provide its products and services.

Economic conditions and, in particular, conditions in Phoenix’s customers’ and suppliers’ businesses, could affect its business and results of operations. Phoenix has experienced and may continue to experience reduced demand for certain of its products and services. As a result of uncertainty about global economic conditions, including factors such as unemployment, bankruptcies, financial market volatility, sovereign debt issues, government budget deficits and other factors which continue to affect the global economy, Phoenix’s customers and suppliers may experience further deterioration of their businesses, suffer cash flow shortages or file for bankruptcy. In turn, existing or potential customers may delay or decline to purchase Phoenix’s products and related services, and Phoenix’s suppliers and customers may not be able to fulfill their obligations to it in a timely fashion.

Phoenix’s educational textbook cover and component sales depend on continued government funding for educational spending, which impacts demand by its customers, and may be affected by changes in or continued restrictions on local, state and/or federal funding and school budgets. As a result, a reduction in consumer discretionary spending or disposable income and/or adverse trends in the general economy (and consumer perceptions of those trends) may affect Phoenix more significantly than other businesses in other industries.

In addition, customer difficulties could result in increases in bad debt write-offs and increases to Phoenix’s allowance for doubtful accounts receivable. Further, Phoenix’s suppliers may experience similar conditions as its customers, which may impact their viability and their ability to fulfill their obligations to it. Negative changes in these or related economic factors could materially adversely affect Phoenix’s business.

A substantial decrease or interruption in business from Phoenix’s significant customers or suppliers could adversely affect its business.

Phoenix has significant customer and supplier concentration. Any significant cancellation, deferral or reduction in the quantity or type of products sold to these principal customers or a significant number of smaller customers, including as a result of our failure to perform, the impact of economic weakness and challenges to their businesses, a change in buying habits, further industry consolidation or the impact of the shift to alternative methods of content delivery, including digital distribution and printing, to customers, could have a material adverse effect on Phoenix’s business. Further, if Phoenix’s major customers, in turn, are not able to secure large orders, they will not be able to place orders with Phoenix. A substantial decrease or interruption in business from Phoenix’s significant customers could result in write-offs or the loss of future business and could have a material adverse effect on Phoenix’s business.

Additionally, Phoenix purchases certain limited grades of paper for the production of their book and component products. If our suppliers reduce their supplies or discontinue these grades of paper, we may be unable to fulfill our contract obligations, which could have a material adverse effect on Phoenix’s business.

Fluctuations in the cost and availability of raw materials could increase Phoenix’s cost of sales.

Phoenix is dependent upon the availability of raw materials to produce its products. Phoenix primarily uses paper, ink and adhesives, and the price and availability of these raw materials are affected by numerous factors beyond Phoenix’s control. These factors include:

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Any material increase in the price of key raw materials could adversely impact Phoenix’s cost of sales or result in the loss of availability of such materials at reasonable prices. When these fluctuations result in significantly higher raw material costs, Phoenix’s operating results are adversely affected to the extent it is unable to pass on these increased costs to its customers or to the extent they materially affect customer buying habits. Significant fluctuations in prices for paper, ink and adhesives could, therefore, have a material adverse effect on Phoenix’s business.

Any disruption at Phoenix’s production facility could adversely affect its results of operations.

Phoenix is dependent on certain key production facilities and certain specialized machines. Any disruption of production capabilities due to unforeseen events, including mechanical failures, labor disturbances, weather or other force majeure events, at any of its principal facilities could adversely affect its business, results of operations, cash flows, and financial condition. Further, if any of the specialized equipment that Phoenix relies upon to make its products becomes inoperable, Phoenix may experience delays in its ability to fulfill customer orders, which could harm its relationships with its customers.

Phoenix is subject to environmental obligations and liabilities that could impose substantial costs upon Phoenix.

Phoenix’s operations are subject to a variety of federal, state, local and foreign laws and regulations governing emissions to air, discharge to water, the generation, handling, storage, transportation, treatment and disposal of hazardous substances and other materials, and employee health and safety matters. As an owner and operator of real property and a generator of hazardous substances, Phoenix may be subject to environmental cleanup liability, regardless of fault, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act or analogous state laws, as well as to claims for harm to health or property or for natural resource damages arising out of contamination or exposure to hazardous substances. Some of Phoenix’s current or past operations have involved metalworking and plating, printing and other activities that have resulted in or could result in environmental conditions giving rise to liabilities. If Phoenix incurs significant expenses related to environmental cleanup or damages stemming from harm or alleged harm to health, property or natural resources arising from contamination or exposure to hazardous substances, Phoenix’s business may be materially and adversely affected.

Risks Related to our Businesses Generally and our Common Stock

Our ability to engage in some business transactions may be limited by the terms of our debt.

Our financing documents contain affirmative and negative financial covenants restricting ALJ, Faneuil, Carpets and Phoenix. Specifically, our loan facilities include covenants restricting ALJ’s, Faneuil’s, Carpets’ and Phoenix’s ability to:

ALJ’s, Faneuil’s, Carpets’ and Phoenix’s respective abilities to borrow under our loan arrangements depend upon their respective abilities to comply with certain covenants and borrowing base requirements. Our and our subsidiaries’ abilities to meet these covenants and requirements may be affected by events beyond our control, and we or they may not meet these obligations. The failure of any of us or our subsidiaries to comply with these covenants and requirements could result in an event of default under our loan arrangements that, if not cured or waived, could terminate such party’s ability to borrow further, permit acceleration of the relevant debt (and other indebtedness based on cross-default provisions) and permit foreclosure on any collateral granted as security under

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the loan arrangements, which includes substantially all of our assets. Accordingly, any default under our loan facilities could also result in a material adverse effect on us that may result in our lenders seeking to recover from us or against our assets. There can also be no assurance that the lenders will grant waivers on covenant violations if they occur. Any such event of default would have a material adverse effect on us.

We have substantial indebtedness and our ability to generate cash to service our indebtedness depends on factors that are beyond our control.

We currently have, and will likely continue to have, a substantial amount of indebtedness. Our indebtedness could, among other things, make it more difficult for us to satisfy our debt obligations, require us to use a large portion of our cash flow from operations to repay and service our debt or otherwise create liquidity problems, limit our flexibility to adjust to market conditions and place us at a competitive disadvantage. We expect to obtain the money to pay our expenses and pay the principal and interest on our indebtedness from cash flow from our operations and potentially from debt or equity offerings. Accordingly, our ability to meet our obligations depends on our future performance and capital raising activities, which will be affected by financial, business, economic and other factors, many of which are beyond our control. If our cash flow and capital resources prove inadequate to allow us to pay the principal and interest on our debt and meet our other obligations, we could face substantial liquidity problems and might be required to dispose of material assets or operations, restructure or refinance our debt, which we may be unable to do on acceptable terms, or forgo attractive business opportunities.

Changes in interest rates may increase our interest expense.

A portion of our current borrowings, namely the Cerberus Term Loan and Cerberus/PNC Revolver, $103 million and $21,411, respectively as of September 30, 2015, and potential future borrowings, are and may continue to be at variable rates of interest, tied to LIBOR or the Prime Rate of interest, thus exposing us to interest rate risk. As recently announced by the Federal Reserve Board, the federal funds rate is expected to increase in the near term, which may also have an impact on long-term rates. If interest rates do increase, our debt service obligations on our variable rate indebtedness could increase even if the amount borrowed remained the same, resulting in a decrease in our net income. For example, if interest rates increased in the future by 100 basis points, based on our current borrowings as of September 30, 2015, we would incur approximately an additional $1.0 million per annum in interest expense.

Account data breaches involving stored data or the misuse of such data could adversely affect our reputation, performance, and financial condition.

We provide services that involve the storage of non-public information. Cyber attacks designed to gain access to sensitive information are constantly evolving, and high profile electronic security breaches leading to unauthorized releases of sensitive information have occurred recently at a number of major U.S. companies, including several large retailers, despite widespread recognition of the cyber-attack threat and improved data protection methods. Any breach of the systems on which sensitive data and account information are stored or archived and any misuse by our employees, by employees of data archiving services or by other unauthorized users of such data could lead to damage to our reputation, claims against us and other potential increases in costs. If we are unsuccessful in defending any lawsuit involving such data security breaches or misuse, we may be forced to pay damages, which could materially and adversely affect our profitability and financial condition. Also, damage to our reputation stemming from such breaches could adversely affect our prospects. As the regulatory environment relating to companies’ obligations to protect such sensitive data becomes stricter, a material failure on our part to comply with applicable regulations could subject us to fines or other regulatory sanctions.

We may not be able to consummate additional acquisitions and dispositions on acceptable terms or at all. Furthermore, we may not be able to integrate acquisitions successfully and achieve anticipated synergies, or the acquisitions and dispositions we pursue could disrupt our business and harm our financial condition and operating results.

As part of our business strategy, we intend to continue to pursue acquisitions and dispositions. Acquisitions and dispositions could involve a number of risks and present financial, managerial and operational challenges, including:

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We may not be able to consummate acquisitions or dispositions on favorable terms or at all. Our ability to consummate acquisitions will be limited by our ability to identify appropriate acquisition candidates, to negotiate acceptable terms for purchase and our access to financial resources, including available cash and borrowing capacity. In addition, we could experience financial or other setbacks if we are unable to realize, or are delayed in realizing, the anticipated benefits resulting from an acquisition, if we incur greater than expected costs in achieving the anticipated benefits or if any business that we acquire or invest in encounters problems or liabilities which we were not aware of or were more extensive than believed.

Our net operating loss carry-forwards could be substantially limited if we experience an “ownership change,” as defined in Section 382 of the Internal Revenue Code.

Our ability to utilize net operating losses (“NOLs”) and built in losses under Section 382 of the Code and tax credit carry-forwards to offset our future taxable income and/or to recover previously paid taxes would be limited if we were to undergo an “ownership change” within the meaning of Section 382 of the Code.

Section 382 of the Code contains rules that limit the ability of a company that undergoes an “ownership change,” which is generally any change in ownership of more than 50% of its stock over a three-year period, to utilize its NOLs and certain built-in losses recognized in years after the ownership change. These rules generally operate by focusing on ownership changes among stockholders owning directly or indirectly 5% or more of the stock of a company and any change in ownership arising from a new issuance of stock by the company.

If we undergo an ownership change for purposes of Section 382 as a result of future transactions involving our common stock, including purchases or sales of stock between 5% stockholders, our ability to use our NOLs and to recognize certain built-in losses would be subject to the limitations of Section 382. Depending on the resulting limitation, a significant portion of our NOLs could expire before we would be able to use them. At September 30, 2015, we had an NOL carryforward for federal income tax purposes of approximately $162 million that expires from 2020 through 2028. Approximately $140 million of the carryforward expires in 2022. Our inability to utilize our NOLs would have a negative impact on our financial position and results of operations.

We do not believe we have experienced an “ownership change” as defined by Section 382 in the last three years. However, whether a change in ownership occurs in the future is largely outside of our control, and there can be no assurance that such a change will not occur.

In May 2009, we announced that our Board of Directors adopted a shareholder rights plan (the “Rights Plan”) designed to preserve stockholder value and the value of certain tax assets primarily associated with NOLs and built-in losses under Section 382 of the Code. We also amended our certificate of incorporation to add certain restrictions on transfers of our stock that may result in an ownership change under Section 382.

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Our internal controls and procedures may be deficient.

Our internal controls and procedures, including the internal controls and procedures of our subsidiaries, may be subject to deficiencies or weaknesses. Remedying and monitoring internal controls and procedures distracts our management from its operations, planning, oversight and performance functions, which could harm our operating results. Additionally, any failure of our internal controls or procedures could harm our operating results or cause us to fail to meet our obligations to maintain adequate public information or to file periodic reports with the SEC, as applicable.

We are an “emerging growth company” and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.”

We qualify as an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We shall continue to be deemed an emerging growth company until the earliest of:

(a) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more;

(b) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement;

(c) the date on which we have issued more than $1 billion in non-convertible debt, during the previous 3-year period, issued; or

(d) the date on which we are deemed to be a large accelerated filer.

As an emerging growth company we will be subject to reduced public company reporting requirements. As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.

As an emerging growth company we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

An active trading market for our common stock may never develop or be sustained.

We intend to apply for the listing of our common stock on a national stock exchange under the symbol “ALJJ.” However we cannot assure you that an active trading market for our common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you that a liquid trading market will exist, that you will be able to sell your shares of our common stock when you wish, or that you will obtain your desired price for your shares of our common stock.

We cannot assure you that our common stock will become listed on any securities exchange.

Although we intend to list our common stock on a national securities exchange, we cannot assure you that we will be able to meet the initial listing standards, including the minimum per share price and minimum capitalization requirements, or that we will be able to maintain a listing of our common stock on any such trading venue. Until such time as we qualify for listing on an exchange, our common stock will continue to be quoted on the Pink Sheets, which may make it more difficult for an investor to dispose of shares or obtain accurate quotations as to the market value of our common stock.

Our stock is a penny stock and, as a result, our stockholders are more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices in connection with the sale of penny stocks, or low-priced securities other than securities registered on certain exchanges, to persons other than established customers and institutional accredited investors. Because our securities currently constitute penny stocks within the meaning of the rules, the rules apply to us and our securities. For transactions covered by these rules, prior to effecting a transaction in a penny stock, a broker-dealer must, among other things: (a) make a special suitability determination for the purchaser; (b) deliver a standardized risk disclosure document to the customer; (c) receive written acknowledgement of the receipt of the disclosure statement; (d) provide to customers current bids and offers, including the number of shares to which such bid and offer prices apply; (e) disclose to customers the broker-dealer and sales representation compensation; and (f) receive the purchaser’s written consent to the transaction prior to the sale. These suitability requirements and disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock. If and when we list our common stock on a national securities exchange, our stock will no longer be a penny stock.

The market price of our common stock is volatile.

The market price of our common stock could fluctuate substantially in the future in response to a number of factors, including the following:

Also, the stock market has experienced extreme price and volume fluctuations recently. This volatility has had a significant impact on the market prices of securities issued by many companies for reasons unrelated to their operating performance. These broad market fluctuations may materially adversely affect our stock price, regardless of our operating results.

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We do not currently plan to pay dividends to holders of our common stock.

We do not currently anticipate paying cash dividends to the holders of our common stock. Accordingly, holders of our common stock must rely on price appreciation as the sole method to realize a gain on their investment. There can be no assurances that the price of our common stock will ever appreciate in value.

The anti-takeover provisions of our stockholders rights plan may have the effect of delaying or preventing beneficial takeover bids by third parties.

We have a stockholder rights plan designed to preserve the value of certain tax assets primarily associated with our NOLs and built-in losses under Section 382. At September 30, 2015, we had approximately $162 million in NOLs and the use of such losses to offset federal income tax would be limited if we experience an “ownership change” under Section 382. This would occur if stockholders owning (or deemed under Section 382 to own) 5% or more of our stock by value increase their collective ownership of the aggregate amount of our stock by more than 50 percentage points over a defined period. The Rights Plan was adopted to reduce the likelihood of an “ownership change” occurring as defined by Section 382.

In connection with the Rights Plan, we declared a dividend of one preferred share purchase right for each share of its common stock outstanding as of the close of business on May 21, 2009. Pursuant to the Rights Plan, any stockholder or group that acquires beneficial ownership of 4.9 percent or more of our outstanding stock (an “Acquiring Person”) without the approval of our Board of Directors would be subjected to significant dilution of its holdings. Any existing stockholder holding 4.9% or more of our stock will not be considered an Acquiring Person unless such stockholder acquires additional stock; provided that existing stockholders actually known to us to hold 4.9% or more of its stock as of April 30, 2009 are permitted to purchase up to an additional 5% of our stock without triggering the Rights Plan. In addition, in its discretion, the Board of Directors may exempt certain persons whose acquisition of securities is determined by the Board of Directors not to jeopardize our deferred tax assets and may also exempt certain transactions. The Rights Plan will continue in effect until May 13, 2019, unless it is terminated or the preferred share purchase rights are redeemed earlier by the Board of Directors.

While the Rights Plan is intended to protect our NOLs and built-in losses under Section 382, it may also have the effect of delaying or preventing beneficial takeover bids by third parties.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with (i) the consolidated audited financial statements and the related notes of ALJ Regional Holdings, Inc., (ii) the audited financial statements of Phoenix Color Corp., and the unaudited pro forma condensed combined financial statements, included elsewhere in this Form 10. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in “Risk Factors” and in other parts of this annual report.

Overview

ALJ Regional Holdings, Inc. (“ALJ,” or “we”) is a holding company that operates Faneuil, Inc., or Faneuil, Floors-N-More, LLC, dba Carpets N’ More, or Carpets, and Phoenix Color Corp., or Phoenix. With several members of senior management and our Board of Directors coming from long careers in the professional service industry, ALJ is focused on acquiring and operating exceptional customer service-based businesses.

Consolidated Results of Operations for the Years Ended September 30, 2015 and 2014

Effective October 18, 2013, ALJ acquired substantially all of the capital stock of Faneuil. Effective April 1, 2014, ALJ acquired all of the limited liability company interests of Carpets. Effective August 9, 2015, ALJ acquired all of the capital stock of Phoenix. ALJ included the results of operations in its consolidated financial statements for

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Faneuil since October 19, 2013, for Carpets since April 1, 2014, and for Phoenix from August 9, 2015 through September 30, 2015.

Concentrations

The Company maintains its cash balances in accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes there is little or no exposure to any significant credit risk.

Faneuil

For the year ended September 30, 2015, Faneuil had three customers associated with five contracts that accounted for approximately 34.2%, 12.6%, and 11.4% of net revenue, of which approximately $5.8 million, $1.9 million, and $0, respectively, were included in accounts receivable at September 30, 2015. For the year ended September 30, 2014, Faneuil had one customer that accounted for approximately 37.4% of net sales, of which approximately $6.7 million was included in accounts receivable at September 30, 2014.

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For the year ended September 30, 2015, Faneuil had eight contracts in which each contract independently contributed to more than 5% of total revenue. In the aggregate, these contracts accounted for $119.9 million, or 80.1% of total revenue. Three of these contracts independently contributed to more than 10% of Faneuil revenue, at 19.7%, 12.6%, and 11.4% for each contract.

For the year ended September 30, 2014, Faneuil had seven contracts in which each contract independently contributed to more than 5% of total revenue. In the aggregate, these contracts accounted for $110.7 million, or 83.3% of total Faneuil revenue. Two of these contracts independently contributed to more than 10% of revenue, at 23.0% and 16.6% for each contract.

Carpets

For the year ended September 30, 2015, Carpets received 58.4% of its revenue from three customers which accounted for 27.3%, 25.6%, and 5.5% of Carpets revenues, respectively, of which $0.5 million, $1.2 million, and $0.5 million, respectively, were included in accounts receivable as of September 30, 2015.

For the year ended September 30, 2014, Carpets received 72.6% of its revenue from four customers which accounted for 27.9%, 18.9%, 15.1% and 10.7% of Carpets revenues, respectively, of which $1.2 million, $0.7 million, $0.5 million, and $0.5 million, respectively, were included in accounts receivable as of September 30, 2014.

For the year ended September 30, 2015, Carpets had four suppliers that accounted for 19.3%, 18.7%, 14.9% and 10.4% of its inventory purchases, of which approximately $0.5 million, $1.1 million, $0.2 million and $0.1 million, respectively, were included in accounts payable at September 30, 2015. The Company has negotiated agreements with various suppliers for similar products as well.

For the year ended September 30, 2014, Carpets had three suppliers that accounted for approximately 26.0%, 16.6% and 13.2% of its inventory purchases, of which approximately $0.6 million, $0.4 and $0.4 million, respectively, were included in accounts payable at September 30, 2014.

Phoenix

For the period ended September 30, 2015, Phoenix had three customers that accounted for approximately 27.0%, 15.6%, and 13.2%, of its revenues, respectively, of which $2.6 million, $1.2 million, and $1.0 million, respectively, were included in accounts receivable as of September 30, 2015.

For the period ended September 30, 2015, Phoenix had two suppliers that accounted for approximately 26.3% and 16.5% of its inventory purchases, of which approximately $0.3 million and $0.4 million, respectively, were included in accounts payable at September 30, 2015.

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Faneuil Net Revenue

Faneuil’s net revenue for the year ended September 30, 2015, was $149.6 million, an increase of $16.7 million, or 12.6%, over net revenue of $132.9 million for the year ended September 30, 2014. The increase in net revenue was attributable to $17.6 million in new and expanded contracts, and $5.8 million due to an additional 18 days of Faneuil’s operating results included in the later period because of the timing of ALJ’s acquisition of Faneuil. This increase was partially offset by a $4.0 million decrease in implementation revenue recognized over the contract term and a $2.6 million reduction resulting from customer contracts that concluded in 2015.

Carpets Net Revenue

Carpets’ net revenue for the year ended September 30, 2015 was $44.6 million, an increase of $27.8 million, or 166.1%, over net revenue of $16.8 million for the period from April 1, 2014 to September 30, 2014. The increase in net revenue was attributable to $20.0 million due to an additional six months of Carpet’s operating results due to the timing of the acquisition and $7.5 million of higher revenue to builder clients, including revenue related to sales of new cabinet products of $4.4 million.

Phoenix Net Revenue

Phoenix’s Net revenue for the period from August 9, 2015 to September 30, 2015 was $15.8 million. Phoenix experiences fluctuations in its revenue throughout the year. The revenue reflected during this short period is not indicative of the annual revenue as the short period represents higher than typical revenues on an annualized basis.

Cost of Revenue

Faneuil Cost of Revenue

Faneuil’s cost of revenue for the year ended September 30, 2015 was $118.1 million, an increase of $16.0 million, or 15.7%, over cost of revenue of $102.1 million for the year ended September 30, 2014. The increase was attributable to $14.7 million of costs related to new and expanded customer contracts and $4.8 million due to an additional 18 days of Faneuil’s operating results included in the later period because of the timing of ALJ’s acquisition of Faneuil. This increase was partially offset by a $0.4 million decrease

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in implementation costs recognized over the contract term, and a $3.1 million reduction resulting from customer contracts that concluded in 2015. Cost of revenue as a percentage of revenue was 78.9% and 76.8% for the years ended September 30, 2015 and 2014, respectively. The increase in cost of revenue as a percentage of revenue was a result of the reduction of higher margin implementation revenues for the year ended September 30, 2015 compared to the year ended September 30, 2014.

Carpet Cost of Revenue

Carpets’ cost of revenue for the year ended September 30, 2015 was $37.0 million, an increase of $23.2 million, or 168.1%, over cost of revenue of $13.8 million for the period from April 1, 2014 to September 30, 2014. The increase in cost of revenue was attributable to $16.8 million due to an additional six months of Carpet’s operating results due to the timing of the acquisition and $6.2 million of higher cost of revenue related to higher revenues to builder clients. Cost of revenue as a percentage of revenue remained relatively consistent at 83.1% and 82.5% for the year ended September 30, 2015 and for the period from April 1, 2014 to September 30, 2014, respectively.

Phoenix Cost of Revenue

Phoenix’s cost of revenue for the period from August 9, 2015 to September 30, 2015 was $10.1 million, which included $0.5 million in depreciation and amortization expense.

Selling, General and Administrative Expense

Faneuil Selling, General and Administrative Expense

Fanueil’s selling, general and administrative expense for the year ended September 30, 2015 was $17.1 million, an increase of $4.9 million, or 40.2% over selling, general and administrative expense of $12.2 million for the year ended September 30, 2014. The net increases of $4.9 million was primarily attributable to an increase of $2.1 million in facility expenses, $0.9 million in professional/consulting services, $0.6 million in communications expenses, $0.4 million related to the loss on sale of assets, $0.3 million in licenses and fees, $0.2 million in travel expenses and $0.2 million in technology expenses.

Carpets Selling, General and Administrative Expense

Carpets’ selling, general and administrative expense for the year ended September 30, 2015 was $7.2 million, an increase of $3.9 million, or 118.2% over selling, general and administrative expense of $3.3 million for the period from April 1, 2014 to September 30, 2014. The increase was primarily attributable to $3.1 million due to an additional six months of Carpet’s operating results due to the timing of the acquisition and $0.7 million in salaries related to increases in headcount related to our cabinet division and supporting higher revenues.

Phoenix Selling, General and Administrative Expense

Phoenix’s selling, general and administrative expense for the period from August 9, 2015 to September 30, 2015 was $1.5 million.

ALJ Selling, General and Administrative Expense

ALJ’s selling, general and administrative expense for the year ended September 30, 2015 was $3.2 million, an increase of $2.2 million, or 220% over selling, general and administrative expense of $1.0 million for the year ended September 30, 2014. The increase was primarily attributable to an increase to non-cash stock-based compensation expenses of $1.2 million and professional fees associated with the acquisition of Phoenix of $0.8 million. The Company expects to continue to recognize non-cash stock-based compensation expenses associated with the prior issuance of stock options and restricted stock.

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Depreciation – Selling, General and Administrative

Faneuil Depreciation

Faneuil’s depreciation and amortization expense for the year ended September 30, 2015 was $5.6 million, an increase of $1.4 million, or 33.3% over depreciation and amortization expense of $4.2 million for the year ended September 30, 2014. The increase was primarily attributable to Faneuil’s expanded business and the additional 18 days during the year ended September 30, 2015.

Carpets Depreciation

Carpets’ depreciation and amortization expense for the year ended September 30, 2015 was $0.7 million, an increase of $0.4 million, or 101.8% over depreciation and amortization expense of $0.3 million for the period from April 1, 2014 to September 30, 2014. The increase was primarily attributable to an additional six months of Carpet’s operating results due to the timing of the acquisition.

Phoenix Depreciation

Phoenix’s depreciation and amortization expense for the period from August 9, 2015 to September 30, 2015 was $0.4 million.

Interest Expense

Interest expense for the year ended September 30, 2015 was $2.2 million, an increase of $0.9 million, or 69.2% over for the interest expense of $1.3 million for the year ended September 30, 2014. The increase was primarily attributable to the interest expense accrued and partially paid on the Cerberus $105.0 million term loan and the amortization of the related debt issuance costs. We expect our interest expense to increase as we have substantially increased our average outstanding borrowings and our borrowing rates.

Income Taxes

Income tax benefit for the year ended September 30, 2015 was $5.5 million, an increase of $1.0 million, or 22.2%, compared to income tax benefit of $4.5 million for the year ended September 30, 2014. The change was primarily attributable to a decrease in the valuation allowance related to the recording of a deferred tax asset for the partial recognition of the Company’s net operating losses. To the extent that we continue to recognize taxable income, we expect to utilize our net operating losses and continue to recognize a decrease in our valuation allowance.

The Company recognized net income of $12.3 million for the year ended September 30, 2015 and generated cash from operating activities of $11.4 million and from financing activities of $78.9 million, offset by cash used in investing activities of $95.3 million.

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The Company recognized net income of $15.9 million for the year ended September 30, 2014 and generated cash from operating activities of $14.3 million, offset by cash used in investing activities of $28.6 million and financing activities of $3.4 million for the year ended September 30, 2014.

On July 11, 2015, ALJ entered into a stock purchase agreement with Visant Corporation to acquire 100% of the common stock of Phoenix, effective August 9, 2015. The aggregate consideration for the acquisition, subject to certain closing adjustments, was $88.3 million.

On August 14, 2015, ALJ entered into a financing agreement with Cerberus Business Finance, LLC (“Cerberus”), to borrow $105.0 million in a term loan (“Cerberus Term Loan”) and have available up to $30.0 million in a revolver (“Cerberus/PNC Revolver”), of which $2.2 million was drawn at the close of the stock purchase of Phoenix. The proceeds of these facilities were used together with cash on hand plus the proceeds from the sale of ALJ stock described below to fund the acquisition and refinance the outstanding obligations of ALJ, Faneuil and Carpets and to provide working capital facilities to ALJ and all three of its subsidiaries.

On July 10, 2015, Marc Reisch, the Chairman of Phoenix purchased 400,000 shares of common stock and Kevin Hayden, the Chief Operating Officer of Phoenix purchased 50,000 shares of common stock of ALJ in a private placement for an aggregate consideration of $1.7 million.

On August 14, 2015, ALJ refinanced its outstanding borrowings and agreements with M&T Bank, including the Faneuil Term Loan for $15.9 million, Carpets Revolver for $2.2 million, ALJ Revolver for $0.3 million and Faneuil Revolver for $0, with Cerberus and PNC.

Since October 1, 2014, ALJ has used $1.2 million to repurchase 290,787 shares of its common stock under its repurchase program at an average price of $4.02 per share.

Operating Activities

Cash provided by operations of $11.4 million during the year ended September 30, 2015 was primarily a result of our $12.3 million net income, $2.7 million of net non-cash expenses, and $3.6 million net cash used by changes in operating assets and liabilities.

Cash provided by operations of $14.3 million during the year ended September 30, 2014 was primarily a result of our $15.9 million net income, $1.5 million of net non-cash expenses, and $3.1 million net cash used by changes in operating assets and liabilities.

Investing Activities

For the year ended September 30, 2015, we used $95.3 million in investing activities, primarily attributable to the $88.3 million acquisition of Phoenix and $7.1 million of capital equipment purchases.

For the year ended September 30, 2014, we used $28.6 million in investing activities, primarily attributable to the $19.1 million acquisition of Faneuil, $5.2 million acquisition of Carpets and $4.3 million acquisition of capital equipment purchases.

Financing Activities

For the year ended September 30, 2015, financing activities provided for $78.9 million in financing activities, primarily related to proceeds from the $105.0 million term note from Cerberus and $1.7 million from the sale of ALJ stock, partially offset by payments of $19.0 million to retire the term note with M&T Bank at Faneuil and $2.0 million to retire the term note with M&T Bank at ALJ, $3.8 million in debt issuance costs associated with the Cerberus Term Note, $2.0 million of principal payment towards the Cerberus Term Note, and $1.2 million related to the repurchase of our stock.

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For the year ended September 30, 2014, we used $3.4 million in financing activities, primarily attributable to repayments on the Harland Clarke Note of $25.0 million by Faneuil, partially offset by $21.0 million proceeds from a term loan and $2.2 million for the sale of ALJ common stock.

Cash and Working Capital Requirements

We believe that current cash and other sources of liquidity are sufficient to fund normal operations for the next 12 months. However, to the extent that our estimates are inaccurate or our assumptions are incorrect, we may not have sufficient cash resources to fund our operations. In such event, we may have to seek additional financing for the business.

⁽¹⁾ Effective August 14, 2015, ALJ entered into a financing agreement with Cerberus Business Finance, LLC (“Cerberus”), to borrow $105.0 million in a term loan (“Cerberus Term Loan”) and have available up to $30.0 million in a revolver (“Cerberus/PNC Revolver” and collectively “Cerberus Debt”). All borrowings under the Cerberus Debt are secured by substantially all of our assets, and are subject to certain other terms. The Cerberus Debt includes limitations on the ability, among other things, to incur debt, to grant liens, to make certain investments, to make certain restricted payments such as dividend payments, and to dispose of assets, as well as requirements to meet some affirmative and negative covenants. Our borrowings under the Cerberus Term Loan are limited to eligible accounts receivable (as defined in the agreement).

The Cerberus Term Loan accrues interest at a rate equal to either LIBOR plus 6.5% or the Reference Rate (as defined in the agreement), at our discretion. For the year ended September 30, 2015, the Cerberus Term Loan accrued interest at a rate of 7.5%. Interest payments are due in arrears on the first day of each month and a quarterly principal payment against the Cerberus Term Loan is due on the last day of each fiscal quarter, commencing September 30, 2015 in the amount of approximately $2.0 million, with a balloon payment due on the maturity date of August 14, 2020. We must pay an annual excess cash flow principal payment against the Cerberus Term Loan equal to 75% of our excess cash flow, as defined in the loan documents, commencing the year ended September 30, 2016, without penalty. There is a prepayment penalty equal to 3%, 2% and 1% of any amounts prepaid within the first, second and third years of the loan, respectively. We may make a one-time payment against the loan with no penalty up to $10 million.

The Cerberus/PNC Revolver accrues interest on the outstanding balance at a rate equal to either LIBOR plus 6.5% or our Reference Rate (as defined in the Cerberus Term Loan agreement), at our discretion. Interest payments are due in arrears on the first day of each month. We have the option to prepay (and re-borrow) the outstanding balance of the Cerberus/PNC Revolver, without penalty. Each of our subsidiaries can borrow up to $30.0 million in the aggregate up to an amount equal to 85% of eligible receivables. The Cerberus/PNC Revolver carries an unused fee of 0.5%. Additionally, the Cerberus/PNC Revolver provides for a sub limit for letters of credit up to $15.0 million. Faneuil had a $1.0 million letter of credit under the agreement as of September 30, 2015. In

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November 2015, we increased the letter of credit by $1.2 million to $2.2 million. The Cerberus/PNC Revolver has a final maturity date of August 14, 2020.

At September 30, 2015, we were not required to test compliance with any covenants under the Loan Agreement. After September 30, 2015, these covenants include a quarterly fixed charge coverage ratio and a leverage ratio that we are required to maintain. Effective December 31, 2015, we will be required to test our loan covenants quarterly.

⁽²⁾ Amounts represent future cash payments to satisfy our workers’ compensation reserve and other long-term liabilities recorded on our consolidated balance sheets, including the short-term portion of our workers’ compensation reserve.

Off-Balance Sheet Arrangements

As of September 30, 2015, we had two types of off-balance sheet arrangements:

Surety Bonds

As part of our normal course of operations, one of our insurers issues surety bonds for us that are required by certain of our customers. We are obligated to reimburse our insurer for any of those surety bonds that are paid by the insurer. As of September 30, 2015 the total face amount of those surety bonds was approximately $19.0 million.

Letter of Credit

As of September 30, 2015, Faneuil had a $1.0 million letter of credit. The letter of credit increased to $2.2 million on November 15, 2015.

Critical Accounting Policies and Estimates

The methods, estimates and judgments we use in applying our accounting policies have a significant impact on the results we report in our financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often resulting from the need to make estimates on matters that are inherently uncertain.

We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements:

Impairment of Goodwill, Other Indefinite-Lived Assets and Long-Lived Assets

Goodwill and other indefinite-lived intangible assets are tested annually for impairment and in interim periods if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and we determine that the fair value of a reporting unit or indefinite-lived intangible asset is more likely than not ( i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment test will be performed. If goodwill is quantitatively assessed for impairment, a two-step approach is applied. First, we compare the estimated fair value of the reporting unit in which the goodwill resides to its carrying value. The second step, if necessary, measures the amount of impairment, if any, by comparing the implied fair value of goodwill to its carrying value. Other indefinite-lived intangible assets are quantitatively assessed for impairment, if necessary, by comparing their estimated fair values to their carrying values. If the carrying value exceeds the fair value, the difference is recorded as an impairment.

Long-lived assets, such as property, plant and equipment and intangible assets subject to amortization, are reviewed for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. Long-lived assets to be disposed of by sale are

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reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated.

Revenue Recognition

Faneuil . Revenues associated with outsourcing services are generally recognized by Faneuil during the period in which the services are rendered. Revenues from time and material contracts are recognized at the contracted rates as labor hours and direct expenses are incurred and charged to costs of revenue. Revenue for call center contracts is recognized at the time calls are received based on the contracted rate per call. Revenues are generally based on staff hours, call time, call volume or number of transactions processed, and are presented net of any allowance or discounts. Payments for development activities are recognized as revenue when earned, over the period of effort.

Revenues from non-refundable up-front payments attributable to contract implementation, though not tied to achieving a specific performance milestone, are recognized over the initial term of the contract. At-risk milestone payments, which are based on achieving a specific performance milestone, are recognized as revenue when the milestone is achieved and the related payment is due, providing there is no future service obligation associated with that milestone.

Deferred revenue represents amounts billed to the customer in excess of amounts earned. In situations where Faneuil receives payment in advance of the performance of services, such amounts are recorded as deferred revenue and recognized as revenue during the period in which the related services are performed.

Receipt of funding under grant agreements are evaluated for appropriate recognition as revenue, based on the specific terms of the related grant or agreement. Grant funding received in advance of compliance with the grant conditions is recorded as deferred revenue. Faneuil recognizes grant income once it has complied with the conditions attached to the grant received.

Carpets. Carpets recognizes revenue and invoices customers upon completion of installation of product. Carpets is not obligated to perform significant activities after installation is complete. Payments received by customers prior to installation are recorded as customer deposits. Sales taxes collected and remitted are recorded on a net basis.

For commercial projects, Carpets recognizes revenue based on the cost-to-cost method under the percentage of completion method. Under the cost-to-cost method, the Company analyzes the contract cost incurred to date to the total expected contract cost. For contracts with anticipated losses at completion, a provision is recorded when the loss becomes known.

Phoenix. Revenue is recognized (1) when products are shipped (if shipped “FOB” shipping point) (2) when products are delivered (if shipped “FOB” destination), and (3) as services are performed as determined by contractual arrangement, but in all cases only when risk of loss has transferred to the customer and Phoenix has no further performance obligations.

Income Taxes

We use the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax-credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amount of assets and liabilities and their tax bases. Deferred tax assets are reduced by the valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Our judgments relative to the current provision for income taxes take into account current tax laws, our interpretation of current tax laws and possible outcomes of current and future audits conducted by tax authorities. We file income tax returns in the U.S. federal jurisdictions and various state jurisdictions and are subject to U.S. federal tax and state tax examinations for years post June 2011 and certain other years. Our judgments relative to the value of deferred tax assets and liabilities take into account estimates of the amount of future taxable income. Actual operating results and the underlying amount of income in future years could render current estimates of recoverable net deferred taxes inaccurate. Any of the judgments mentioned above could cause

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actual income tax obligations to differ from our estimates, thus materially impacting the our financial position and results of operations.

If we take a recognized tax position or have taken a recognized tax position on a tax return that more likely than not would be sustained upon examination by tax authorities, then we will recognize the potential asset or liability in the financial statements. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. We believe that we have appropriate support for the income tax positions taken and to be taken on its tax returns and that our accruals for tax liabilities are adequate for all open years on assessment of many factors including past experience and interpretation of tax law applied to the facts of each matter.

Insurance Reserves

Faneuil. Faneuil maintains general liability insurance coverage, which is subject to certain deductibles. Faneuil is self-insured for workers’ compensation claims up to $250,000 per incident, and maintains insurance coverage for costs above the specified limit. Faneuil is self-insured for health insurance claims up to $150,000 per incident, and maintains insurance coverage for costs above the specified limit.

Phoenix. Before the acquisition of Phoenix by ALJ, Phoenix was self-insured for worker’s compensation under its parent company for claims up to $500,000 per incident, and maintains coverage for costs above the specified limit. After the acquisition, the Phoenix changed to a fully insured plan.

Reserves have been provided for worker’s compensation and health claims based upon management’s judgment of insurance coverages and third party actuarial analysis.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Although actual results could differ from those estimates, such estimates are developed based on the best information available to management and management’s best judgments at the time. Significant estimates and assumptions by management are used for, but are not limited to, determining the fair value of assets and liabilities, including intangible assets acquired and allocation of purchase price, useful lives, carrying values and recoverability of long-lived and intangible assets, the recoverability of goodwill, the realizability of deferred tax assets, stock-based compensation, the allowance for doubtful accounts and inventory reserves, and calculation of insurance reserves.

Stock-Based Compensation

We recognize compensation expense for our equity awards on a straight-line basis over the requisite service period of the award based on the estimated portion of the award that is expected to vest and applies estimated forfeiture rates based on analyses of historical data, including termination patterns and other factors. We use the quoted closing market price of our common stock on the grant date to measure the fair value of restricted stock awards and the Black-Scholes option pricing model to measure the fair value of stock option awards. The expected volatility is based on historical volatilities of our common stock over the most recent period commensurate with the estimated expected term of the awards. Where volatility was not available, we use comparable companies with the estimated expected term. The expected term of an award is equal to the midpoint between the vesting date and the end of the contractual term of the award. The risk-free interest rate is based on the rate on U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. We have not paid dividends and do not anticipate paying a cash dividend in the foreseeable future and, accordingly, we use an expected dividend yield of zero. Stock-based compensation cost for restricted stock awards and restricted stock units are measured based on the fair market value of our common stock at the date of grant.

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ALJ’s corporate mailing address is 244 Madison Avenue, PMB 358, New York, NY 10016. ALJ does not maintain any physical corporate offices. For additional information about the properties of each of ALJ’s operating subsidiaries, see “Item 1. Business.”

The following table sets forth, as of December 31, 2015, the beneficial ownership of common stock with respect to (i) each person who was known by the Company to own beneficially more than 5% of the outstanding shares of common stock, (ii) each director, (iii) each of the Company’s current executive officers and (iv) all directors and executive officers as a group. As of December 31, 2015, the Company had 35,088,666 shares of common stock issued and outstanding, which was the only class of voting securities outstanding.

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* Denotes holders of less than 1%.

(1) Consistent with regulations of the U.S. Securities and Exchange Commission, shares of common stock issuable upon exercise of derivative securities by their terms exercisable within 60 days of December 31, 2015 are deemed outstanding for purposes of computing the percentage ownership of the person holding such securities but are not deemed outstanding for computing the percentage ownership of any other person. Unless otherwise indicated below, to the knowledge of the Company, the persons and entities named in this table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable.

(2) Includes 5,288,751 shares held by the Exemption Trust under the Ravich Revocable Trust of 1989 and 5,913,301 shares held by the Ravich Revocable Trust of 1989 and 1,350,000 shares issuable upon exercise of currently vested options.

(3) Includes 431,088 shares held by The Ravich Children Permanent Trust, for which Mr. Fritz is the sole trustee. Mr. Fritz disclaims all economic ownership of such shares.

(4) Includes 316,667 shares issuable upon exercise of currently vested options.

(5) Includes 134,000 shares issuable upon exercise of currently vested options and 10,014 restricted shares held by the Hal Byer and Marihelene Byer Revocable Trust.

(6) Includes 100,000 shares issuable upon exercise of currently vested options.

(7) Includes 1,900,667 shares issuable upon exercise of currently vested options.

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The Company’s Board of Directors is divided into three classes, with one class being elected each year and members of each class holding office for a three-year term. All of the directors serve until their terms expire and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal.

In July 2015, the Company re-elected Michael Borofsky, Jess M. Ravich and Anna Van Buren as Class III directors with terms expiring in 2018. The Class I and Class II directors’ terms expire in 2016 and 2017, respectively.

Effective November 25, 2015, Margarita Paláu Hernández was appointed to the Board of Directors as a Class II director with a term expiring in 2017.

The following is a brief summary of the backgrounds of the Company’s directors and executive officers.

Jess M. Ravich . Mr. Ravich has served as a director of the Company since June 26, 2006 and the Chairman of the Board of Directors since August 31, 2006 and has served as the Executive Chairman and senior executive officer of the Company since February 20, 2013. Mr. Ravich joined The TCW Group as Group Managing Director in December 2012. Prior to that, Mr. Ravich was Managing Director at Houlihan Lokey since December 2009. Prior to that, Mr. Ravich was Chairman and Chief Executive Officer of Libra Securities, LLC (“Libra Securities”), a Los Angeles-based investment banking firm that focused on capital raising and financial advisory services for middle market corporate clients and the sales and trading of debt and equity securities for institutional investors. Prior to founding Libra Securities in 1991, Mr. Ravich was an Executive Vice President at Jefferies & Co., Inc. and a Senior Vice President at Drexel Burnham Lambert. Mr. Ravich has served on the Board of Directors of Cherokee Inc. (Nasdaq GS: CHKE) since May 1995 and as Chairman of the Board of Directors of Cherokee Inc. since January 2011. Mr. Ravich has also served on the Board of Directors of A-Mark International since 2014 and Unwired Planet since November 2015. In addition to his professional responsibilities, Mr. Ravich has also served on the Undergraduate Executive Board of the Wharton School and the Board of Trustees of the Archer School for Girls. Mr. Ravich has both a B.S and M.S. from the Wharton School and a J.D. from Harvard University.

T. Robert Christ . Mr. Christ has served as the Chief Financial Officer and Secretary of the Company since July 2008. Mr. Christ also serves as Executive Vice President for Aristotle International Inc., a political software company and age and identity verification company (“Aristotle”). Mr. Christ was previously Chief Financial Officer for Electronic Recyclers International, Inc., a nationwide recycler of e-waste. From 1999 to 2006, Mr. Christ served as Chief Operating Officer and Chief Financial Officer for Aristotle. From 1997 to 1999, Mr. Christ served as Chief Financial Officer for Pulsar Data Systems, a government contractor that merged with Litronic Inc. and went public in 1999. From 1994 to 1997, Mr. Christ served as controller for the Centech Group Inc., a government contractor, and from 1991 to 1993, Mr. Christ held various positions with Rubino and McGeehin, Chtd. a public accounting firm. Mr. Christ holds a B.B.A. degree in Accounting from James Madison University and passed the C.P.A. exam in 1991.

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Hal G. Byer . Mr. Byer has served as a director of the Company since January 30, 2003. Mr. Byer joined Houlihan Lokey as a Senior Vice President in their Financial Sponsors Coverage Group in December 2009. From May 2001 to November 2009, Mr. Byer was a Senior Vice President of Libra Securities, a broker-dealer registered with the Securities and Exchange Commission and an NASD member. From 1995 to 2003, Mr. Byer was Chief Executive Officer of Byer Distributing Co., a snack food distribution company. From 2000 to 2003, Mr. Byer was also the Chief Operating Officer of eGreatcause.com, an internet start-up involved in fundraising for charitable and non-profit organizations that is no longer active.

Robert Scott Fritz . Mr. Fritz has served as a director of the Company since January 30, 2003. Since May 1982, Mr. Fritz has served as the President of Robert Fritz and Sons Sales Company, a food broker and paper distributor that he owns in New Jersey. Mr. Fritz holds a B.S. in Business from Fairleigh Dickinson University.

Rae Ravich . Ms. Ravich has served as a director of the Company since June 4, 2014. Ms. Ravich is an Associate in the direct lending group at TCW Financial Planning LLC. Previously, Ms. Ravich was a Financial Analyst at Houlihan Lokey, which she joined in July 2013. Ms. Ravich has dual B.S. degrees from the Wharton School and the Nursing School at the University of Pennsylvania. Ms. Ravich is the daughter of Jess Ravich, the Company’s Executive Chairman.

John Scheel . Mr. Scheel has served as a director of the Company since September 13, 2006. From August 31, 2006 to February 20, 2013, Mr. Scheel was the President and Chief Executive Officer of the Company. Mr. Scheel is a principal of and also currently serves as the Chief Operating Officer of Pinnacle Steel, and pursuant to a management agreement, he served as the plant manager for the Company’s former subsidiary Kentucky Electric Steel’s (“KES”) steel mini-mill in Ashland, Kentucky (the “Mill”) and managed the operations of KES on our behalf from January 2004 until its sale to Optima on February 5, 2013. Following such sale, Mr. Scheel not only has continued to manage the Mill for Optima as its general manager, but also managed the melt shop and caster for Warren Steel Holdings EAF in Warren, Ohio, which is also managed by Optima. Prior to joining Pinnacle, Mr. Scheel held various positions of increased responsibility at AK Steel, Nucor Corporation and Birmingham Steel Management. Mr. Scheel holds both B.S. and M.S. degrees in Metallurgical Engineering from Purdue University and a Master of Business Administration in Finance and International Business from Xavier University.

Anna Van Buren . Ms. Van Buren has served as a director of the Company since November 2013. Ms. Van Buren was appointed President and Chief Executive Officer of Faneuil, in April 2009, after previously serving as President and Chief Operating Officer from 2007 to 2009, as Vice President and Managing Director of Faneuil’s Government Services Division from 2005 to 2007, and as its Vice President of Business Development from 2004 to 2005. Prior to her association with Faneuil, Ms. Van Buren founded Capital Initiatives, a consulting service for clients seeking visibility among federal lawmakers with the objective of encouraging legislative action, and operated numerous government services and marketing companies. Ms. Van Buren has served in leadership roles for many civic and business organizations including chairmanship of the United Way of the Virginia Peninsula, the Peninsula Chamber of Commerce and the NASA Aeronautics Support Team. She is the recipient of numerous awards including the Women in Business Achievement Award by Inside Business Magazine, the Presidential Citizenship Award from Hampton University and the NCCJ Humanitarian Award. Ms. Van Buren holds a degree from Hollins University and the University of Virginia Executive School.

Michael Borofsky . Mr. Borofsky has served as a director of the Company since September 27, 2013. Mr. Borofsky is Senior Vice President of MacAndrews & Forbes. Prior to joining MacAndrews & Forbes in 2003, Mr. Borofsky was with the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, where he specialized in mergers & acquisitions, and before that he was an analyst at Goldman Sachs. Mr. Borofsky has a B.A. from Yale University and a J.D. from Columbia University School of Law.

Marc Reisch . Mr. Reisch was appointed Chairman of Phoenix in August 2015 and has served as a director of the Company since that time. Mr. Reisch has served as Chairman of the Board, Chief Executive Officer and President of Visant and Visant Holding Corp. from October 2004 to November 2015. Prior to joining Visant, he served as Senior Advisor to Kohlberg Kravis Roberts & Co. and has over 35 years of experience in the printing and publishing industries. Mr. Reisch holds a Bachelor of Science Degree and a Master of Business Administration degree from Cornell University.

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Margarita Paláu Hernández . Ms. Paláu Hernández has served as a director of the Company since November 25, 2015. Ms. Paláu Hernández is a Principal and Founding Partner of Hernández Ventures, a privately held entity engaged in the acquisition and management of a variety of business interests. She has served in this capacity since 1988. Prior to founding Hernández Ventures, Ms. Paláu Hernández was an attorney with the law firm of McCutcheon, Black, Verleger & Shea, where she focused on domestic and international business and real estate transactions. Ms. Paláu Hernández has a B.A. from University of San Diego and a J.D. from UCLA School of Law.

Other Key Employees

Steve Chesin . Mr. Chesin, age 54, has served as the Chief Executive Officer of Carpets since August 2007. From 2002 to 2007, Mr. Chesin served as the Executive Vice President of Carpets. From 1995 to 2001, Mr. Chesin served as the Senior Vice President and the Chief Operating Officer of Carpet Barn Inc., a subsidiary of Nations Flooring Inc. Mr. Chesin attended University of Nevada, Las Vegas.

Board of Director’s Composition

Director Independence

In connection with the filing of this Registration Statement on Form 10 and the registration of our common stock under Exchange Act, we intend to list our common stock on the             . Under the rules of the             , independent directors must comprise a majority of a listed company’s Board of Directors. In addition, the rules of the require that, subject to specified exceptions, each member of a listed company’s audit committee and compensation, nominating and corporate governance committee be independent. Under the rules of the             , a director will only qualify as an ‘‘independent director’’ if, in the opinion of that company’s Board of Directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our Board of Directors consists of nine directors. Based upon a review of the independence of each director and consideration of whether any director has a material relationship with us that could compromise such director’s ability to exercise independent judgment in carrying out his or her responsibilities, our Board of Directors has determined that each of Messrs. Byer, Borofsky, Fritz and Scheel and Ms. Paláu Hernández will qualify as an ‘‘independent director’’ as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of the              at the time of our listing.

Our restated certificate of incorporation provides for a three class Board of Directors, with each class of directors standing for election every three years. Our restated certificate of incorporation also provides that the number of authorized directors will be determined from time to time by resolution of the Board of Directors and any vacancies in our Board of Directors and new created directorships may be filled by the Board of Directors.

Committees of the Board of Directors

The Board of Directors has a standing audit committee and compensation, nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the Board of Directors.

The composition and functioning of the Board of Directors and all of our committees will comply with all applicable requirements of the Sarbanes-Oxley Act, and              and SEC rules and regulations. The audit committee and the compensation, nominating and corporate governance committee both operate under a written charter approved by the Board of Directors. Each committee will review and reassess the adequacy of its charter at least annually. The charters of both committees will be available in the Investor Relations section of the Company’s website, www.aljregionalholdings.com .

Audit Committee

Our audit committee consists of Messrs. Scheel, Borofsky and Fritz, with Mr. Scheel chairing this committee. All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the             . Our Board of Directors has determined that Mr. Scheel is an “audit committee financial expert” as defined under the applicable rules

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of the SEC and has the requisite financial sophistication as defined under the applicable rules and regulations of the             . All the members of our audit committee are independent directors as defined under the applicable rules and regulations of the SEC and the             . The audit committee operates under a written charter that satisfies the applicable standards of the SEC and the            .

The audit committee’s responsibilities include, among other responsibilities:

Compensation, Nominating and Corporate Governance Committee

Our compensation, nominating and corporate governance committee consists of Messrs. Borofsky and Byer and Ms. Palau Hernandez, with Mr. Borofsky chairing this committee. All members of this committee will meet the requirements for independence under the applicable rules and regulations of the SEC, the and the Internal Revenue Code of 1986, as amended, or the Code, including the rules application to members of a listed company’s compensation committee.

The committee’s responsibilities include:

As well as:

Our executive compensation program, consists of a three-part compensation strategy that includes base salary, annual discretionary cash bonuses and equity incentive compensation, is designed to (i) pay for performance to encourage both Company and individual achievement; (ii) encourage efficient use of stockholder resources; and (iii) provide market competitive compensation to attract and retain highly qualified individuals who are capable of making significant contributions to the long-term success of the Company.

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We do not adopt express formulae for weighting different elements of compensation or for allocating between long-term and short-term compensation but strive to develop comprehensive packages that are competitive with those offered by other companies with which we compete to attract and retain talented executives. Under our compensation practices, cash compensation consists of an annual base salary and discretionary bonuses and equity-based compensation is primarily stock options.

Employment Agreements

(1) Mr. Ravich has served as our Executive Chairman since February 20, 2013. In the year ended September 30, 2015, Mr. Ravich received $125,000 in compensation for his services as our Executive Chairman and options to purchase 350,000 shares of our common stock at a price of $4.00 per share, which were fully vested upon grant and will expire on August 3, 2022, as compensation for the additional services that he performed in connection with our acquisition of Phoenix. In the year ended September 30, 2014, Mr. Ravich received $125,000 in compensation for his services as our Executive Chairman, of which he elected to take 100% as stock compensation resulting in 53,648 shares valued at $3.04 per share. Mr. Ravich received $35,000 and $45,664 as director compensation for each of the years ended September 30, 2015 and 2014, respectively, of which $35,000 was paid in cash for 2015 and $0 was paid in cash for 2014. In the year ended September 30, 2014, Mr. Ravich received 100% of his director compensation in shares of restricted stock valued at $3.04 per share.

In December 2015, the Board of Directors reviewed and reconsidered the compensation for our Executive Chairman and approved an executive chairman compensation package comprised of (i) an annual retainer of $125,000 in cash and (ii) an annual grant of restricted stock units with a value of $100,000. Following the adoption of this policy, Mr. Ravich will only receive compensation as our Executive Chairman and will no longer receive additional compensation for his services as our director.

(2) For the nine months ended September 30, 2015, Mr. Christ’s annual salary was $90,000. For the fifteen months before Mr. Christ was earning an annual salary of $60,000. For the year ended September 30, 2015, Mr. Christ received options to purchase 50,000 shares of common stock at a price of $4.00 per share, which were fully vested upon issuance and will expire on August 3, 2022. For the year ended September 30, 2015, Mr. Christ received a bonus

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of $25,000. For the year ended September 30, 2014, Mr. Christ received a bonus of $75,000 and options to purchase 100,000 shares of common stock at a price of $1.60 per share, which vest over 3 years.

(3) On October 18, 2013, concurrent with ALJ’s acquisition of Faneuil, Faneuil entered into an employment agreement with Ms. Van Buren. The term of Ms. Van Buren’s employment under the employment agreement will continue until December 31, 2018. Pursuant to her employment agreement, Ms. Van Buren receives an annual salary of $520,000 and is eligible to earn an annual bonus equal to ten percent (10%) of Faneuil’s defined EBITDA, before any bonus amount owed to Ms. Van Buren, in excess of $5,000,000. If Ms. Van Buren’s employment is terminated without cause or by Ms. Van Buren for good reason, Ms. Van Buren will be eligible to receive: (i) her base salary for the greater of one year or one-half of the remaining term of the employment agreement, and (ii) the full annual bonus for the year in which such termination occurs if Ms. Van Buren would have been otherwise entitled to the bonus for such year had she still been employed when such bonus would have been paid. On July 10, 2015, Ms. Van Buren exchanged her 32,857 shares of common stock of Faneuil for 1,500,000 shares of common stock of ALJ using an exchange ratio of 45.65 shares of ALJ common stock for each share of Faneuil common stock. In addition, on July 10, 2015, Ms. Van Buren entered into an amended and restated employment agreement with Faneuil and waived her option to purchase 60,000 shares of Faneuil’s common stock. For the year ended September 30, 2015, Ms. Van Buren received 100% of her $35,000 in director compensation in cash.

(4) On April 14, 2014, concurrent with ALJ’s acquisition of Carpets, Carpets entered into an employment agreement with Mr. Chesin. The term of Mr. Chesin’s employment under the employment agreement will continue until December 31, 2017. Pursuant to his employment agreement, Mr. Chesin receives (i) an annual salary of $300,000 and is eligible to earn an annual bonus at the direction of the Board of Directors of Carpets, (ii) 750,000 Class B Preferred Units with a preference amount equal to $750,000, (iii) 75,000 Common Units, and (iv) 40,000 Equity Award Units of Carpets. If Mr. Chesin’s employment is terminated without cause or by Mr. Chesin for good reason, Mr. Chesin will be eligible to receive his base salary for the greater of (i) one-half of the remaining term of the employment agreement, or (ii) six months plus an additional $3,000 per month for each month in the six-month period. For the period from April 14, 2014 to September 30, 2015, Mr. Chesin received $300,000 in compensation for his services as the President and the Chief Executive Officer of Carpets. On July 10, 2015, Mr. Chesin exchanged his 750,000 Class B Preferred Units, 75,000 Common Units and 40,000 Equity Award Units of Carpets for 150,000 shares of common stock of ALJ.

(5) On August 14, 2015, concurrent with ALJ’s acquisition of Phoenix, ALJ entered into an employment agreement with Mr. Reisch. The term of Mr. Reisch’s employment under the employment agreement will continue until December 31, 2018. Pursuant to his employment agreement, Mr. Reisch receives (i) an annual salary of $200,000 and is eligible to earn an annual bonus equal to five percent (5%) of the defined EBITDA of Phoenix in excess of $20,000,000, before any bonus amount owed to Mr. Reisch and the Chief Operating Officer of Phoenix, (ii) an option to purchase 250,000 shares of ALJ’s common stock, and (iii) an additional option to purchase 100,000 shares of ALJ’s common stock. The exercise price for such options is $4.27 per share and the options expire on August 13, 2025. If Mr. Reisch’s employment is terminated without cause or by Mr. Reisch for good reason, Mr. Reisch will be eligible to receive (i): his base salary for the greater of one year or one-half of the remaining term of the employment agreement, (ii) the full annual bonus for the year in which such termination occurs, if Mr. Reisch would have been otherwise entitled to a bonus for such year had he still been employed, and (iii) the full annual bonus for the year prior to the year in which Mr. Reisch is so terminated, if at the time of termination Mr. Reisch has otherwise earned a full annual bonus for such prior year and has not yet been paid such bonus due to such termination. For the period from August 14, 2015 to September 30, 2015, Mr. Reisch received $25,000 in compensation for his services as the Chairman of Phoenix.

(6) This column represents the aggregate grant date fair value of stock options.

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In December 2015, the Board of Directors reviewed and considered our outside director compensation and approved a director compensation package comprised of (i) an annual retainer of $40,000 in cash, (ii) an annual grant of restricted stock units with a value of $40,000, (iii) an additional $12,500 for the chair or $5,000 for each other member of the audit committee, and (iv) an additional $10,000 for the chair or $4,000 for each other member of the compensation, nominating and corporate governance committee.

Pursuant to the director compensation program adopted in July 2014, each member of the Board of Directors received annual compensation of $35,000 to be made up of either cash, restricted common stock or a combination of both, at the director’s election. We issued 80,099 restricted shares on July 21, 2014, with a fair market value of approximately $239,000.

On August 3, 2015, the Board granted fully vested options to purchase 100,000 shares of our common stock to Ms. Ravich in consideration of her efforts related to the Phoenix acquisition. The exercise price for such option is $4.00 and the option expires on August 3, 2022.

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Executive employment agreements have been described above in Item 6 - Executive Compensation under Employment Agreements.

Harland Clarke has contracted with Faneuil to provide call center services to support Harland Clarke’s banking-related products and managed print services. Under these two contracts, Faneuil has recognized $2.2 million and $0.4 million in revenue, respectively, for the year ended September 30, 2015 and $1.9 million and $0.4 million in revenue respectively, for the year ended September 30, 2014.

The board of directors approved a compensation package to Jess Ravich, our Executive Chairman, his salary in a lump sum payment of $125,000 beginning in 2015. As of September 30, 2015, the Company had recorded a prepaid expense of $31,250 related to this transaction.

On August 14, 2015, the Board granted options to purchase 100,000 shares of our common stock to Kevin Hayden, Phoenix’s COO. The exercise price for such option is $4.27 and the option vests in three equal annual installments on October 1 of each of 2016, 2017, and 2018, subject to continued service; provided, however, vesting accelerates upon certain involuntary terminations. The option expires on August 13, 2025.

On August 14, 2015, the Board granted options to purchase 250,000 shares of our common stock to Marc Reisch, Phoenix’s Chairman. The exercise price for such option is $4.27 and the option vests in three equal annual installments on October 1 of each of 2016, 2017, and 2018, subject to continued service; provided, however, vesting accelerates upon certain involuntary terminations. The option expires on August 13, 2025.

On August 3, 2015, the Board granted fully vested options to purchase 350,000, 100,000 and 50,000 shares of our common stock to Jess Ravich, our Executive Chairman, Rae Ravich, a Director, and Rob Christ, our CFO in consideration of their efforts related to the Phoenix acquisition. The exercise price for such option is $4.00 and expires on August 3, 2022.

On July 10, 2015, Anna Van Buren, the Chief Executive Officer of Faneuil, and Tarsha Leherr, the Vice President of Operations of Faneuil, exchanged their 32,857 and 3,286 shares of common stock of Faneuil, respectively, for 1,500,000 shares and 150,000 shares of common stock of ALJ, respectively, using an exchange ratio of 45.65 shares of ALJ common stock for each share of Faneuil common stock. The Company evaluated the terms of the shares exchange and estimated the fair value of the ALJ shares exchanged for the equity of Faneuil and Carpets and recorded stock-based compensation expense of approximately $200,000. Ms. Van Buren forfeited 60,000 stock options as a result of this transaction.

On July 10, 2015, Steve Chesin, the Chief Executive Officer of Carpets, exchanged his 750,000 Class B Preferred Units with a preference amount equal to $750,000, 75,000 Common Units and 40,000 Equity Award Units of Carpets for 150,000 shares of common stock of ALJ.

On July 10, 2015, Marc Reisch and Kevin Hayden purchased 400,000 and 50,000 shares of common stock of ALJ in a private placement for an aggregate consideration of $1,520,000 and $190,000, respectively.

Also on October 18, 2013, the board of directors of Faneuil granted Ms. Van Buren, a director of the Company and Faneuil, an option to purchase 60,000 shares of Faneuil’s common stock under the Plan. Such option was canceled on July 10, 2015.

On April 7, 2014, ALJ entered into a $2.0 million promissory note payable from Libra Securities Holdings, LLC, a related party. The Promissory Note, which was approved by the disinterested directors on the board of directors of ALJ, carried a 5-year maturity with a balloon payment due April 2019 and a 10% annual interest rate. Interest was payable quarterly but may be capitalized by ALJ at its election. The Promissory Note was paid in full on September 30, 2014.

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Certain Additional Transactions Related to Acquisition of Faneuil

We acquired 96.43%, and Ms. Van Buren acquired 3.57% of Faneuil’s outstanding stock from Harland Clarke, a wholly owned subsidiary of MacAndrews & Forbes Holdings Inc., pursuant to a stock purchase agreement, dated October 18, 2013, by and among ALJ, Anna Van Buren, Faneuil’s Chief Executive Officer, as an individual purchaser, and Harland Clarke. The aggregate consideration for the purchase was $53.0 million, consisting of $25.0 million in cash, a contribution of $500,000 in cash for working capital purposes, 3.0 million shares of ALJ common stock valued at $2.5 million and a seller note for $25.0 million (the “Harland Clarke Note”). Following the closing of such transactions, we sold 3,286 shares of Faneuil’s common stock to Tarsha Leherr, Faneuil’s Vice President of Operations. On July 10, 2015, Ms. Van Buren and Ms. Leherr exchanged 32,857 and 3,286 shares of Faneuil’s common stock, respectively, for 1,500,000 shares and 150,000 shares of common stock of ALJ, respectively. As a result, as of July 10, 2015, we now own 100% of the outstanding stock of Faneuil.

The Harland Clarke Note provided for a two-year maturity with interest in the first year at 5% and interest in the second year at 7.5%. The Harland Clarke Note had mandatory payments of $1.0 million per quarter with an annual cash flow sweep based on a defined free cash calculation. Faneuil’s obligations under the Harland Clarke Note were secured by a pledge of the Faneuil stock held by ALJ, subject to certain limitations. A Subordination and Intercreditor Agreement was also signed on October 18, 2013, by and among Faneuil and Harland Clarke Holdings Corp. (Harland Clarke), pursuant to which the Harland Clarke Note was subordinated to the Faneuil’s $5 million senior credit facility. This agreement was terminated with the pay-off of the Harland Clarke Note on September 30, 2014.

In connection with our acquisition of Faneuil, we signed a Voting and Investor Rights Agreement on October 18, 2013, by and among ALJ, Harland Clarke, Faneuil, Ms. Van Buren and Mr. Ravich, in his capacity as a stockholder of ALJ, which provides: (i) Harland Clarke certain rights to nominate a director to ALJ’s Board of Directors, (ii) that Mr. Ravich shall vote his shares of ALJ common stock in favor of such nominee, (iii) certain rights of first refusal, co-sale and piggyback registration with respect to ALJ’s shares of common stock held by Harland Clarke, and (iv) certain information rights with respect to Faneuil. Additionally, a Separation Agreement was signed on October 18, 2013, by and among ALJ, Harland Clarke, Faneuil and Scantron Corporation (“Scantron”), which agreement unwound certain affiliate arrangements between Faneuil, on the one hand, and Harland Clarke and Scantron, on the other hand, and provided for certain transition services to be provided by Scantron to Faneuil.

In connection with the acquisition of Faneuil, our Board of Directors was expanded from five to seven members. Ms. Van Buren was appointed to the Board of Directors as a Class III director. In addition, Michael Borofsky, a representative of Harland Clarke, was appointed to the Board of Directors as a Class III director.

Our subsidiaries are from time to time defendants in actions for matters arising out of normal business operations. Faneuil is also named as a defendant in a proposed class action filed in the United States District Court for the Eastern District of Virginia. The case, styled Brown, et. al., v. Transurban USA, Inc., et. al., was filed on April 15, 2015. The Company’s initial assessment concludes that the risk of a material adverse impact is remote. The Company concluded as of December 31, 2015 that no legal proceedings then pending or threatened will have a material adverse effect on our business, consolidated financial position, results of operations or cash flows.

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As of September 30, 2015, there were 147 holders of record of our common stock. Since June 24, 2005, our common stock has traded on the “Pink Sheets.” Our common stock was traded under the symbol “YSTM.PK” from June 24, 2005 through December 7, 2006. On December 8, 2006, our common stock began trading under the symbol “ALJJ.PK.” Prior to June 24, 2005, our common stock traded on the OTC Bulletin Board under the symbol “YSTM.” The following table sets forth the high and low closing bid prices for our common stock as provided by Pinksheets.com. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

As of January 29, 2016, the closing price of our common stock as reported by Pink Sheets was $4.85 per share.

To date, we have not declared or paid any cash dividends on its common stock. Our Board of Directors does not intend to declare any dividends in the foreseeable future.

On July 10, 2015, Anna Van Buren, the Chief Executive Officer of Faneuil, and Tarsha Leherr, the Vice President of Operations of Faneuil, exchanged their 32,857 and 3,286 shares of common stock of Faneuil, respectively, for 1,500,000 shares and 150,000 shares of common stock of ALJ, respectively, using an exchange ratio of 45.65 shares of ALJ common stock for each share of Faneuil common stock.

On July 10, 2015, Steve Chesin, the Chief Executive Officer of Carpets, exchanged his 750,000 Class B Preferred Units with a preference amount equal to $750,000, 75,000 Common Units and 40,000 Equity Award Units of Carpets for 150,000 shares of common stock of ALJ.

On July 10, 2015, Marc Reisch, the Chairman of Phoenix purchased 400,000 shares of common stock of ALJ in a private placement for an aggregate consideration of $1,520,000.

On July 10, 2015, Kevin Hayden, the Chief Operating Officer of Phoenix purchased 50,000 shares of common stock of ALJ in a private placement for an aggregate consideration of $190,000.

Each of the foregoing transactions was exempt from the registration requirements under the Securities Act of 1933 pursuant to the exemption provided by Section 4(2) and Rule 506 thereunder.

The following is a summary of the material terms of our capital stock, which do not purport to be complete statements of the relevant provisions of the certificate of incorporation or of the bylaws, which you must read for complete information on the company’s capital stock. The certificate of incorporation and bylaws which will be included as exhibits to our registration statement on this Form 10. The summaries and descriptions below do not purport to be complete statements of the Delaware General Corporation Law (the “DGCL”).

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Of the 5,000,000 shares of preferred stock authorized, 1,000,000 shares have been designated as Series A Preferred Stock, none of which are currently issued and outstanding, and 550,000 shares have been designated as Series B Preferred Stock, none of which are currently issued and outstanding.

Common Stock

The holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders. The holders of our common stock do not have any cumulative voting rights. Holders of our common stock are entitled to receive ratably any dividends declared by the Board of Directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock. Our common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions.

In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred stock.

Preferred Stock

We have two classes of preferred stock, with one series designated as Series A Preferred Stock (the “Series A Preferred Stock”) and the other series designated as Series B Preferred Stock (the “Series B Preferred Stock”).

Series A Preferred Stock . The holders of Series A Preferred Stock are entitled to receive, when and as declared by the Board of Directors, cumulative preferential dividends in cash at the rate of 4% a year on an amount (the “Face Amount”) equal to the sum of $4.00 plus an amount equal to all accumulated and unpaid dividends per share for all dividend periods.

In the event of any dissolution, liquidation, or winding up, the holders of Series A Preferred Stock shall be entitled to receive the Face Amount before any payment or distribution shall be made on the preferred stock, the common stock or any other class or series of stock ranking junior to the Series A Preferred Stock upon liquidation.

Holders of shares of Series A Preferred Stock shall have no voting rights, except as otherwise required by law or in the exercise of certain protective provisions, in which they shall be entitled to one vote for each share held. The consent of two-thirds of the then-outstanding shares of Series A Preferred Stock is required in the following situations:

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The shares of Series A Preferred Stock shall not be entitled to the benefit of any sinking fund.

Series B Preferred Stock . The Units of Series B Preferred Stock and shares of Series B Preferred Stock shall rank junior to all other series of the Preferred Stock and any other class of Preferred Stock that may hereafter be issued by us, unless the terms of any such series or class shall provide otherwise. Subject to the prior and superior rights of the holders of any shares of any other series of Preferred Stock or other shares of stock ranking prior and superior to the shares of Series B Preferred Stock, each holder of one one-hundredth (1/100) of a share (a “Unit”) of Series B Preferred Stock shall be entitled to receive on a quarterly basis, when, as and if declared by the Board of Directors, an amount per Unit equal to (i) the greater of (A) $0.01 or (B) the aggregate per share amount of all cash dividends declared on shares of our common stock since the immediately preceding date on which quarterly dividends were paid and (ii) an amount per Unit equal to the aggregate per share amount of all non-cash dividends or other distributions declared on shares of our common stock.

In the event of any dissolution, liquidation, or winding up, no distribution shall be made to the holders of shares of junior stock until the holders of Series B Preferred Stock receive the greater of either (A) $1.00 per Unit plus and amount equal to the accrued and unpaid dividends and distributions thereon, or (B) the amount equal to the aggregate per share amount to be distributed to holders of shares of our common stock. The Units and shares of Series B Preferred Stock have no redemption rights.

Each Unit of Series B Preferred Stock shall entitle the holder thereof to one vote on all matters submitted to a vote of our stockholders. At any time when Units of Series B Preferred Stock are outstanding, the amendment of the certificate of incorporation in any manner which would materially alter or change the powers, preferences or special rights of the Units of Series B Preferred Stock so as to adversely affect them shall require the affirmative vote of the holders of a majority of the outstanding Units of Series B Preferred Stock, voting separately as a class.

Anti-Takeover Effects of Various Provisions of Delaware Law and the Company’s Certificate of Incorporation, Bylaws and the Stockholder Rights Plan

We have a stockholder rights plan (the “Rights Plan”) designed to preserve the value of certain tax assets primarily associated with our NOLs and built in losses under Section 382. At September 30, 2015, we had approximately $162 million in NOLs and the use of such losses to offset federal income tax would be limited if we experience an “ownership change” under Section 382. This would occur if stockholders owning (or deemed under Section 382 to own) 5% or more of our stock by value increase their collective ownership of the aggregate amount of our stock by more than 50 percentage points over a defined period of time.

The Rights Plan was adopted to reduce the likelihood of an “ownership change” occurring as defined by Section 382. In connection with the Rights Plan, we declared a dividend of one preferred share purchase right for each share of our common stock outstanding as of the close of business on May 21, 2009. Pursuant to the Rights Plan, any stockholder or group that acquires beneficial ownership of 4.9 percent or more of our outstanding stock (an “Acquiring Person”) without the approval of our Board of Directors would be subjected to significant dilution of its holdings. Any existing stockholder holding 4.9% or more of our stock will not be considered an Acquiring Person unless such stockholder acquires additional shares of our stock; provided that existing stockholders actually known to us to hold 4.9% or more of its stock as of April 30, 2009 are permitted to purchase up to an additional 5% of our stock without triggering the Rights Plan. In addition, in its discretion, the Board of Directors may exempt certain persons whose acquisition of securities is determined by the Board of Directors not to jeopardize our deferred tax assets and may also exempt

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certain transactions. The Rights Plan will continue in effect until May 13, 2019, unless it is terminated or the preferred share purchase rights are redeemed earlier by the Board of Directors.

While the Rights Plan is intended to protect our NOLs and built-in losses under Section 382, it may also have an “anti-takeover” effect of delaying or preventing beneficial takeover bids by third parties.

Authorized but Unissued Shares

The Board of Directors is authorized to issue, without stockholder approval, any authorized but unissued shares of our common stock or Series B Preferred Stock. The issuance of any authorized but unissued shares of Series A Preferred Stock shall requires the consent of two-thirds of the then-outstanding shares of Series A Preferred Stock.

Listing

We intend to apply to have our common stock authorized for listing on a national exchange under the symbol ALJJ.

Section 102 of the DGCL, permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our Restated Certificate of Incorporation (as amended further by that certain First Amendment to Restated Certificate of Incorporation, the “Certificate of Incorporation”), provides that none of our directors will be personally liable to us or our stockholders for monetary damages for or with respect to any acts or omissions in the performance of such person’s duties as a director, except to the extent required by law.

Section 145 of the DGCL provides that a corporation has the power to indemnify a director, officer, employee, or agent of the corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in related capacities, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification will be made with respect to any claim, issue or matter as to which such person has been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court deems proper.

Our Certificate of Incorporation provides that we may indemnify, and advance expenses to, our directors and officers with respect to certain liabilities, expenses and other accounts imposed upon them because of having been a director or officer. We have also entered into individual indemnification agreements with each of our directors.

The information required by this item may be found beginning on page F-1 of this Form 10.

Not applicable.

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The financial statements required by this Item are included beginning at page F-1.

The following documents are filed as exhibits hereto:

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SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

ALJ Regional Holdings, Inc.

We have audited the accompanying consolidated balance sheets of ALJ Regional Holdings, Inc. and Subsidiaries (the “Company”) as of September 30, 2015 and 2014, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended September 30, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2015 and 2014, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2015, in conformity with accounting principles generally accepted in the United States of America.

/s/ Mayer Hoffman McCann P.C.

San Diego, California

December 31, 2015

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(continued)

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See accompanying notes to consolidated financial statements.

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See accompanying notes to consolidated financial statements.

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See accompanying notes to consolidated financial statements.

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