ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) Files An 8-K Entry into a Material Definitive Agreement

ITEM 1.01. Entry into a Material Definitive Agreement.

Asset Purchase Agreement

On May 15, 2017, Faneuil, Inc. (Faneuil), a wholly owned
subsidiary of ALJ Regional Holdings, Inc. (ALJ or the Company),
entered into an Asset Purchase Agreement (the Purchase Agreement)
by and among Faneuil, Vertex Business Services LLC (Vertex) and
the Company (solely with respect to certain sections of the
Purchase Agreement).

to the terms and subject to the conditions of the Purchase
Agreement, Faneuil will acquire certain assets and assume certain
liabilities from Vertex in respect of Vertexs BPO and contact
center operations. As consideration for the acquisition, Faneuil
will pay an aggregate purchase price of$13,000,000 consisting of
(i) $8,132,392 in cash consideration, subject to customary net
working capital adjustments at closing, and (ii) 1,466,667 shares
of the Companys common stock in stock consideration, valued using
the thirty-day weighted-average closing price of $3.32 per
share.Faneuil will place 391,566 shares of the Companys common
stock issued as stock consideration in an escrow account at
closing to secure any Vertex obligation to indemnify Faneuil for
breaches by Vertex of its representations and warranties and
covenants under the Purchase Agreement, or potentially in the
event of any working capital adjustment in favor of Faneuil.

The Purchase Agreement contains customary representations,
warranties and covenants, including covenants regarding acquiring
required consents prior to the closing. Faneuil and ALJ expect to
secure financing for the acquisition by entering into an
amendment to the financing agreement with Cerberus Business
Finance, LLC, to make certain adjustments to the covenants under
the financing agreement to allow for a one time waiver and to
reflect the consolidated business of ALJ following the
closing.The Purchase Agreement also contains customary
termination rights for each of Faneuil and Vertex prior to the
closing date.

The foregoing description of the Purchase Agreement is only a
summary, does not purport to be complete, and is qualified in its
entirety by reference to the full text of the Purchase Agreement,
which is filed as Exhibit 2.1 hereto, and is incorporated herein
by reference.

The representations, warranties, covenants and agreements of
Faneuil and Vertex contained in the Purchase Agreement have been
made (i) only for purposes of the Purchase Agreement, (ii) have
been qualified by confidential disclosures made to the other
party in disclosure schedules delivered in connection with the
Purchase Agreement, (iii) are subject to materiality
qualifications contained in the Purchase Agreement which may
differ from what may be viewed as material by investors, (iv)
were made only as of the date of the Purchase Agreement or such
other date as is specified in the Purchase Agreement, and (v)
have been included in the Purchase Agreement for the purpose of
allocating risk between the parties rather than establishing
matters as fact. Accordingly, the Purchase Agreement is included
as an exhibit to this Current Report on Form 8-K only to provide
investors with information regarding the terms of the Purchase
Agreement, and not to provide investors with any other factual
information regarding Vertex or Faneuil. Investors should not
rely on the representations, warranties, covenants and
agreements, or any descriptions thereof, as characterizations of
the actual state of facts or condition of Vertex, Faneuil or any
of its subsidiaries or affiliates. In addition, information
concerning the subject matter of the representations and
warranties may change after the date of the Purchase Agreement,
which subsequent information may or may not be fully reflected in
ALJs public disclosures.

ITEM 7.01. Regulation FD Disclosure.

On May 16, 2017, the Company and Faneuil issued a news release
announcing the Purchase Agreement. The full text of the news
release is furnished as Exhibit 99.1 and incorporated in its
entirety herein by reference.

The information under this Item 7.01 of this Current Report on
Form 8-K and Exhibit 99.1 hereto shall be deemed furnished and
not filed for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, and shall not be incorporated by
reference into any registration statement of the issuer, except
as shall be expressly set forth by specific reference in such
filing.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K includes statements regarding our
assumptions, projections, expectations, targets, intentions or
beliefs about future events or other statements that are not
historical facts. Words or phrases such as will, would, expects
or similar expressions are intended to identify forward-looking
statements. These statements include, but are not limited to,
statements regarding ALJs expectations regarding completion of
the acquisition and the business and operations of Faneuil. These
forward-looking statements are based on current assumptions and
predictions and are subject to numerous 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 factors, including, without
limitation, the risks set forth in our annual report on Form
10-K, quarterly reports on Form 10-Q and periodic reports filed
with the U.S. Securities and Exchange Commission and available
through EDGAR on the SECs website at www.sec.gov.

Any forward-looking statements included in this Form 8-K are made
as of the date hereof, based on information available to us as of
the date hereof, and we assume no obligation to update any
forward-looking statements.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

About ALJ Regional Holdings, Inc. (NASDAQ:ALJJ)

ALJ Regional Holdings, Inc. is a holding company. The Company’s segments include Faneuil, Carpets and Phoenix. The Faneuil segment offers clients customer relationship management; billing, payment and claims processing; data entry; document management; workforce and support analytics; quality assurance; system support and maintenance, and staffing services. The Carpets segment is a provider of multiple products for the commercial, retail and home builder markets, including all types of flooring, countertops, cabinets, window coverings and garage/closet organizers. The Carpets segment provides various floor coverings to commercial and retail customers, including carpet, ceramic, porcelain, natural stone, vinyl plank, vinyl tile, area rugs and specialty flooring, including bamboo, leather, cork and large format tile. The Phoenix segment is engaged in offering digital pre-press capabilities and its ultraviolet (UV) printing platform supports a range of printing and finishing options.

ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) Recent Trading Information

ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) closed its last trading session up +0.14 at 3.40 with 23,032 shares trading hands.