Proxy Statement (definitive) (def 14a)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant ( X )

Filed by a Party other than the Registrant ( )

Check the appropriate box:

( )Preliminary Proxy Statement

( )Confidential, for Use of the Commission Only (as permitted by

Rule 14a-6(e)(2))

(X)Definitive Proxy Statement

( )Definitive Additional Materials

( )Soliciting Material Pursuant to Section 240.14a-11(c) or

Section 240.14a-12

ALJ Regional Holdings, Inc.

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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

(X)No fee required.

( )Fee computed on table below per Exchange Act Rules 14a-6(i) and O-11.

1)Title of each class of securities to which transaction applies:

2)Aggregate number of securities to which transaction applies:

3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule O-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

4)Proposed maximum aggregate value of transaction:

5)Total fee paid:

( )Fee paid previously with preliminary materials.

( )Check box if any part of the fee is offset as provided by Exchange Act Rule O-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1)Amount Previously Paid:

2)Form, Schedule or Registration State No.:

3)Filing Party:

4)Date Filed:

ALJ Regional Holdings, Inc.

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 21, 2020

July 9, 2020

Dear Stockholder:

You are invited to attend the Annual Meeting of Stockholders of ALJ Regional Holdings, Inc. (the “Company”, “we” or “our”), which will be held at the offices of Shearman & Sterling LLP, 1460 El Camino Real, Floor 2, Menlo Park, CA 94025 on August 21, 2020 at 9:00 a.m. Pacific Time. We discuss the matters to be acted upon at the meeting in more detail in the attached notice of annual meeting and proxy statement (the “Proxy Statement”). There are two specific items for which you are being asked to vote:

To elect Michael C. Borofsky, Jess M. Ravich, Anna Van Buren, Robert Scott Fritz, Hal G. Byer, Rae G. Ravich and John Scheel as directors to hold office until the Company’s 2021 Annual Meeting of Stockholders or until their respective successors are elected and duly qualified, or until their respective earlier resignation or removal.

To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2020.

Our Board of Directors recommends that you vote:

“FOR” the seven (7) individuals nominated for election to the Board of Directors.

“FOR” ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2020.

We encourage you to read our annual report for the year ended September 30, 2019 on Form 10-K (the “Annual Report”) filed with the SEC on December 23, 2019, which may be found on the SEC’s EDGAR database at www.sec.gov. It includes our audited financial statements and information about our operations, markets and products.

You can vote by following the instructions included in the Proxy Statement and the enclosed proxy card. Please read these instructions carefully.

We hope that you can attend the Annual Meeting. You may be requested to present valid, government issued photo identification to gain admission to the Annual Meeting. Whether or not you plan to attend, you can be sure that your shares are represented at the meeting by promptly voting by one of the methods provided. Any record stockholder attending the Annual Meeting may vote in person, even if that stockholder has returned a proxy or voted by telephone or the Internet. Your vote is important, whether you own a few shares or many. Thank you for your continued support of ALJ Regional Holdings, Inc.

Very truly yours,

/s/ Jess Ravich

Jess Ravich, Chief Executive Officer

This document is dated July 9, 2020 and is being first mailed to stockholders of ALJ Regional Holdings, Inc. on or about July 9, 2020.

244 Madison Avenue, PMB #358

New York, NY 10016

Telephone: (888) 486-7775

www.aljregionalholdings.com

ALJ Regional Holdings, Inc.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON aUGUST 21, 2020

TO THE STOCKHOLDERS OF ALJ REGIONAL HOLDINGS, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of ALJ Regional Holdings, Inc., a Delaware corporation (the “Company”, “we” or “our”), will be held on August 21, 2020 at 9:00 a.m. Pacific Time (the “Annual Meeting”) at the offices of Shearman & Sterling LLP, 1460 El Camino Real, Floor 2, Menlo Park CA 94025 for the following purposes:

1.To elect Michael C. Borofsky, Jess M. Ravich, Anna Van Buren, Robert Scott Fritz, Hal G. Byer, Rae G. Ravich and John Scheel as directors to hold office until the Company’s 2021 Annual Meeting of Stockholders or until their respective successors are elected and duly qualified, or until their r espective earlier resignation or removal.

2.To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2020.

3.To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this notice (the “Proxy Statement”).

The Board of Directors of the Company has fixed the close of business on July 6, 2020 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof. For ten days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder, for any purpose relating to the Annual Meeting, during ordinary business hours at the offices of Shearman & Sterling LLP, 1460 El Camino Real, Floor 2, Menlo Park CA 94025.

All stockholders are cordially invited to attend the Annual Meeting in person. Whether or not you expect to attend the Annual Meeting in person, please vote as promptly as possible by following the instructions included in the Proxy Statement and the enclosed proxy card in order to ensure your representation and the presence of a quorum at the Annual Meeting. If you send in your proxy card or vote by telephone or the Internet, you may still decide to attend the Annual Meeting and vote your shares in person.

By Order of the Board of Directors,

/s/ Jess M. Ravich

Chief Executive Officer and Chairman of the Board

Los Angeles, CA

July 9, 2020

PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held on AUGUST 21, 2020

INFORMATION CONCERNING SOLICITATION AND VOTING

General

The Board of Directors (the “Board”) of ALJ Regional Holdings, Inc., a Delaware corporation (the “Company”), is soliciting proxies for use at the Annual Meeting of Stockholders to be held on August 21, 2020 at 9:00 a.m. Pacific Time (the “Annual Meeting”), or at any adjournment or postponement thereof, for the purposes set forth in this proxy statement (the “Proxy Statement”) and in the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at the offices of Shearman & Sterling LLP, 1460 El Camino Real, Floor 2, Menlo Park CA 94025.

Important Notice Regarding the Availability of Proxy Materials for the Stockholders’ Meeting to Be Held on August 21, 2020

Our Annual Report and Proxy Statement are available at www.voteproxy.com, the SEC’s EDGAR database at www.sec.gov and www.aljregionalholdings.com. You are encouraged to access and review all of the important information contained in the proxy materials before voting.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING


Q:	What is the purpose of the Annual Meeting?

A:	To vote on the following proposals:
	•Proposal 1: To elect Michael C. Borofsky, Jess M. Ravich, Anna Van Buren, Robert Scott Fritz, Hal G. Byer, Rae G. Ravich and John Scheel as directors to hold office until the Company’s 2021 Annual Meeting of Stockholders or until their respective successors are elected and duly qualified, or until their respective earlier resignation or removal. •Proposal 2: To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2020. •To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

Q:	What are the Board’s recommendations?

A:	The Board recommends a vote:

	•“FOR” the seven (7) individuals nominated for election to the Board. •“FOR” ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2020.

Q:	Who is entitled to vote at the meeting?


A:	Stockholders Entitled to Vote. Stockholders who our records show owned shares of the Company as of the close of business on July 6, 2020 (the “Record Date”) may vote at the Annual Meeting. On the Record Date, we had a total of 42,172,791 shares of common stock issued and outstanding, which were held of record by 125 stockholders. The stock transfer books will not be closed between the Record Date and the date of the Annual Meeting. Each share of the Company’s common stock is entitled to one vote.
Q:	What is the difference between record stockholders and street name stockholders?

	Record Stockholders. If, as of the Record Date, your shares are registered directly in your name with American Stock Transfer & Trust Company, LLC, our transfer agent, you are considered, with respect to those shares, the stockholder of record, and the proxy materials are being sent to you by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote by telephone or the Internet as instructed on the proxy card or in person at the Annual Meeting.
	Street Name Stockholders. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered, with respect to those shares, the beneficial owner of shares held in street name. The proxy materials are being forwarded to you by your broker or nominee, who is considered, with respect to those shares, the record holder. As the beneficial owner, you have the right to direct your broker or nominee how to vote, and you are also invited to attend the Annual Meeting. However, since you are not the record holder, you may not vote these shares in person at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy. Your broker or nominee will provide a voting instruction card for you to use.

Q:	Can I attend the meeting in person?

A:	You are invited to attend the Annual Meeting if you are a record stockholder or a street name stockholder as of July 6, 2020. You may be required to present photo identification, such as a driver’s license or passport, to gain admission to the Annual Meeting.

Q:	How can I vote my shares?

A:	Record Stockholders: Record stockholders may vote in person at the Annual Meeting or by one of the following methods:
	•By Mail. If you received printed proxy materials, you may submit your vote by marking, dating, signing and mailing the enclosed proxy card in the prepaid envelope. Giving a proxy will not affect your right to vote your shares if you attend the Annual Meeting and want to vote in person. The shares represented by the proxies received in response to this solicitation and not properly revoked will be voted at the Annual Meeting in accordance with the instructions therein. •By Telephone or over the Internet. You may vote your shares by telephone or via the Internet by following the instructions provided in the proxy materials. If you vote by telephone or via the Internet, you do not need to return a proxy card by mail. Telephone and Internet voting are available 24 hours a day. Votes submitted by telephone or through the Internet must be received by 11:59 p.m. Eastern Time on August 20, 2020. •In person at the Annual Meeting. You may vote your shares in person at the Annual Meeting. Even if you plan to attend the Annual Meeting in person, we recommend that you also submit your proxy card or vote by telephone or via the Internet by the applicable deadline so that your vote will be counted if you later decide not to attend the meeting.
	Street Name Stockholders: If your shares are held by a broker, bank or other nominee, you must follow the instructions on the form you receive from your broker, bank or other nominee in order for your shares to be voted. Please follow their instructions carefully. Also, please note that if the holder of record of your shares is a broker, bank or other nominee and you wish to vote in person at the Annual Meeting, you must request a legal proxy from the bank, broker or other nominee that holds your shares and present that proxy and proof of identification at the Annual Meeting to vote your shares.


	Based on the instructions provided by the broker, bank or other holder of record of their shares, street name stockholders may generally vote by one of the following methods:
	•By Mail. You may vote by signing, dating and returning your voting instruction card in the enclosed pre-addressed envelope.
	•By Methods Listed on the Voting Instruction Card. Please refer to your voting instruction card or other information forwarded by your bank, broker or other holder of record to determine whether you may vote by the Internet, telephone, mail or fax, and follow the instructions on the voting instruction card or other information provided by the record holder.
	•In Person with a Legal Proxy from the Record Holder. A street name stockholder who wishes to vote at the Annual Meeting will need to obtain a legal proxy from his or her bank or brokerage firm. Please consult the voting instruction card sent to you by your bank or broker to determine how to obtain a legal proxy in order to vote in person at the Annual Meeting.
Q:	If I sign a proxy, how will it be voted?

A:	When proxies are properly delivered, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. However, if no specific instructions are given, the shares will be voted in accordance with the above recommendations of our Board. If any matters not described in the Proxy Statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote your shares. If the Annual Meeting is adjourned, the proxy holders can vote your shares on the new meeting date as well, unless you have revoked your proxy instructions, as described below under “Can I change my vote?”

Q:	What should I do if I get more than one set of voting materials?

A:	Stockholders may receive more than one set of voting materials, including multiple voting instruction cards. For example, stockholders who hold shares in more than one brokerage account may receive a separate voting instruction card for each brokerage account in which shares are held. Stockholders of record whose shares are registered in more than one name will receive more than one set of voting materials. You should vote in accordance with the instructions in each set of voting materials you receive relating to our Annual Meeting to ensure that all of your shares are voted.

Q:	Can I change my vote?

A:	Record Stockholders: You may change your vote at any time prior to the vote at the Annual Meeting. Your vote may be revoked by filing with the Company’s counsel, Shearman & Sterling LLP, located at 1460 El Camino Real, 2^nd Floor, Menlo Park, CA 94025, Attention: Christopher M. Forrester, a written notice of revocation, or it may be revoked by a later-dated vote, by mail, by Internet or by telephone, or by attending the meeting and voting in person. Only a stockholder’s latest proxy received by 11:59 p.m. Eastern Time on August 20, 2020 will be counted. Attendance at the meeting will not, by itself, revoke a proxy. Street Name Stockholders: If you hold your shares through a broker, bank or other nominee, please follow the instructions provided by your broker, bank or other nominee as to how you may change your vote or obtain a “legal proxy” to vote your shares if you wish to cast your vote in person at the Annual Meeting.

Q:	What happens if I decide to attend the Annual Meeting but I have already voted or submitted a proxy covering my shares?


A:	You may attend the meeting and vote in person even if you have already voted or submitted a proxy. Please be aware that attendance at the Annual Meeting will not, by itself, revoke a proxy. If a bank, broker or other nominee holds your shares and you wish to attend the Annual Meeting and vote in person, you must obtain a “legal proxy” from the record holder of the shares giving you the right to vote the shares.
Q:	What is the voting requirement to approve each of the proposals?

A:	•Proposal No. 1: Directors are elected by a plurality vote. The seven (7) nominees for director who receive the most votes cast in their favor will be elected to serve as directors. •Proposal No. 2: Must be approved by the affirmative vote of the holders of at least a majority of the shares having voting power present in person or represented by proxy at the Annual Meeting.
Q:	What are “broker non-votes?”
A:	A broker non-vote occurs when a broker submits a proxy card with respect to shares of common stock held in street name but declines to vote on a particular matter because the broker has not received voting instructions from the beneficial owner. Under the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such shares on certain routine matters, but not on non-routine matters. Proposal Two (ratification of auditor) is considered a routine matter. Proposal One (election of directors) is considered non-routine. Thus, if you hold your shares in street name and you do not instruct your broker how to vote on Proposal One, no votes will be cast on your behalf for such matter. Your broker will, however, have discretion to vote any uninstructed shares on the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2020.
Q:	How are abstentions and broker non-votes counted?
	Abstentions and broker non-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting and will be counted for purposes of determining whether proposals requiring approval by the affirmative vote of the holders of at least a majority of the shares having voting power present in person or represented by proxy at the Annual Meeting. Thus, an abstention will be counted as a vote “AGAINST” Proposal 2. Any shares not voted due to abstention or broker non-vote will not affect the election of directors.

Q:	What constitutes a quorum?

A:	A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the Company’s outstanding shares entitled to vote are represented at the Annual Meeting, either in person or by proxy.

Q:	How are votes counted?

A:	All votes will be tabulated by the inspector of elections appointed for the Annual Meeting by the Company, who will tabulate affirmative and negative votes, abstentions and broker non-votes. Votes for and against, abstentions and broker non-votes will each be counted for determining the presence of a quorum.

Q:	Who is making this solicitation?

A:	This proxy is being solicited on behalf of the Board of ALJ Regional Holdings, Inc.

Q:	Who pays for the proxy solicitation process?


A:	We will pay the cost of preparing, assembling, printing, mailing, distributing and making available these proxy materials and soliciting votes. We may, on request, reimburse brokerage firms and other nominees for their expenses in forwarding or making available proxy materials to beneficial owners. In addition to soliciting proxies by mail, we expect that our directors, officers and employees may solicit proxies in person, by phone or by other electronic means. None of these individuals will receive any additional or special compensation for doing this, although we will reimburse these individuals for their reasonable out-of-pocket expenses.

Q:	May I propose actions for consideration at next year’s annual meeting of stockholders or nominate individuals to serve as directors?

A:	You may present proposals for action at a future meeting only if you comply with the requirements of the proxy rules established by the SEC and our bylaws. In order for a stockholder proposal to be included in our Proxy Statement and form of Proxy relating to the meeting for our 2021 Annual Meeting of Stockholders under Rule 14a-8 adopted under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”), the proposal must be received by us no later than 5:00 p.m. (Eastern Time) on the 90th day, and not earlier than on the 120th day, prior to the first anniversary of the mailing of the notice for the preceding year’s annual meeting. If the date of our 2021 Annual Meeting of Stockholders is more than 30 days from August 21, 2020, we will publicly announce a different submission deadline from that set forth above, in compliance with SEC rules. Any stockholder proposals (other than those proposals seeking to nominate directors) that are intended to be presented at our 2021 Annual Meeting of Stockholders but are not included in our proxy materials must comply with the advance notice provision in Section 2.2 of our bylaws. If we call the 2021 Annual Meeting of Stockholders for a date between July 22, 2021 and September 21, 2021, we must receive notice of the proposals on or after March 9, 2021 and on or before April 9, 2021. If we call the 2021 Annual Meeting of Stockholders for any other date, then notice by the stockholder must be received by the Corporate Secretary of the corporation not later than the close of business on the later of (x) the ninetieth (90th) day prior to such annual meeting and (y) the seventh (7th) day following the day on which public announcement of the date of such meeting is first made. Any stockholder director nominations for election at our 2021 Annual Meeting of Stockholders must comply with the advance notice provision in Section 3.1 of our bylaws. To be timely, a stockholder’s notice shall be delivered by a nationally recognized courier service or mailed by first class United States mail, postage or delivery charges prepaid, and received by our Corporate Secretary not earlier than fifty (50) days nor more than eighty (80) days in advance of the scheduled date of the 2021 Annual Meeting of Stockholders, regardless of any postponement, deferral or adjournment of that meeting to a later date; provided, however, that, if fewer than sixty (60) days’ notice or prior public disclosure of the date of the 2021 Annual Meeting of Stockholders is given or made to stockholders, notice by the stockholder to be timely must be so delivered or mailed and received not later than the close of business on the tenth (10th) day following the earlier of (a) the day on which such notice of the date of the 2021 Annual Meeting of Stockholders was mailed or (b) the day on which such public disclosure was made. Our bylaws require that certain information and acknowledgments with respect to the proposal and the stockholder making the proposal be set forth in the notice, including (i) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the bylaws of the Company, the language of the proposed amendment), and the reasons for conducting such business at the annual meeting, (ii) the name and record address of the stockholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made, (iii) the class, series and number of shares of the Company that are owned beneficially and of record by the stockholder and such beneficial owner, (iv) any material interest of the stockholder in such business, and (v) any other information that is required to be provided by the stockholder pursuant to Section 14 of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder in such stockholder’s capacity as a proponent of a stockholder proposal. A copy of the relevant bylaw provision is available upon written request to us at Corporate Secretary at 244 Madison Avenue, PMB #358, New York, NY 10016. You can also access our SEC filings, including our Annual Report, on the SEC’s website at www.sec.gov and our website at www.aljregionalholdings.com. The information on our website is not a part of this Proxy Statement.


Q:	How do I obtain a separate set of proxy materials or request a single set for my household?

A:	We have adopted a procedure approved by the SEC called “householding.” Under this procedure, if you share an address with another stockholder, have the same last name, and do not participate in electronic delivery of proxy materials, you will receive only one set of proxy materials (including our Annual Report and Proxy Statement). If you wish to receive a separate set of proxy materials at this time, please request the additional copy by contacting our transfer agent, American Stock Transfer & Trust Company, LLC, by telephone at (800) 937-5449. You may also request to receive a separate Annual Report and a separate Proxy Statement by contacting our Corporate Secretary at (888) 486-7775, or by writing to Corporate Secretary at 244 Madison Avenue, PMB #358, New York, NY 10016.

Q:	What if I have questions about lost stock certificates or need to change my mailing address?

A:	You may contact our transfer agent, American Stock Transfer & Trust Company, LLC, by telephone at (800) 937-5449 if you have lost your stock certificate or need to change your mailing address.

IMPORTANT

Whether or not you expect to attend the Annual Meeting in person, please vote as promptly as possible by following the instructions included in this Proxy Statement and the enclosed proxy card. This will not limit your rights to attend or vote at the Annual Meeting.

PROPOSAL 1
ELECTION OF DIRECTORS

The number of directors constituting the entire Board is currently fixed at nine (9), with two (2) vacancies.

At the Annual Meeting, seven (7) directors will be elected by the stockholders to serve until the 2021 Annual Meeting of Stockholders or until their respective successors are elected and duly qualified, or until their respective earlier resignation or removal. Michael C. Borofsky, Jess M. Ravich, Anna Van Buren, Robert Scott Fritz, Hal G. Byer, Rae G. Ravich and John Scheel have been nominated by the Board for election as directors. If any nominee is unable or unwilling to serve as a director, proxies may be voted for a substitute nominee designated by the present Board. The Board has no reason to believe that the nominees will be unable or unwilling to serve as a nominee or as a director if elected. Proxies received will be voted “FOR” the election of the nominees unless otherwise directed.

Directors are elected by a plurality vote. The seven (7) director nominees who receive the most votes cast in their favor will be elected to serve as directors. If no contrary indication is made, proxies in the accompanying form are to be voted for the election of Michael C. Borofsky, Jess M. Ravich, Anna Van Buren, Robert Scott Fritz, Hal G. Byer, Rae G. Ravich and John Scheel as the Board’s nominees or, in the event any such nominee is not a candidate or is unable to serve as a director at the time of the election (which is not currently expected), for any nominee who shall be designated by the Board to fill such vacancy.

Information Regarding Directors

Biographical information concerning each of the directors whose term as director will continue after the Annual Meeting and the director nominees as of the date of this Proxy Statement is set forth below.


Name	Age	Position
Robert Scott Fritz	63	Director and Nominee
John Scheel	65	Director, Nominee and Vice Chairman of the Board
Michael C. Borofsky	48	Director and Nominee
Jess M. Ravich	62	Chairman of the Board, Chief Executive Officer and Nominee
Anna Van Buren	62	Director and Nominee
Hal G. Byer	63	Director and Nominee
Rae G. Ravich	29	Director and Nominee

Jess M. Ravich. Mr. Ravich has served as a director of the Company since June 26, 2006 and the Chairman of the Board since August 31, 2006. Mr. Ravich served as the Executive Chairman and senior executive officer of the Company from February 20, 2013 until July 29, 2019, at which time he was appointed Chief Executive Officer of the Company. Mr. Ravich served as Group Managing Director of The TCW Group from December 2012 to June 2019 and as a member of its board of directors from December 2017 to October 2018. 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 Apex Global Brands Inc. (formerly known as Cherokee Inc.) since May 1995 and the board of directors of A-Mark International since 2014. 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. Among other qualifications, Mr. Ravich brings to the Board executive leadership experience, experience serving on the board of a public company, extensive financial expertise and a financial services industry background.

Hal G. Byer. Mr. Byer has served as a director of the Company since January 30, 2003. Mr. Byer was formerly a Director at Houlihan Lokey in their Financial Sponsors Coverage Group until his retirement in 2017. From May

2001 to November 2009, Mr. Byer was a Senior Vice President of Libra Securities, a broker-dealer registered with the SEC 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. Mr. Byer brings to the board executive leadership experience, financial expertise and a background in corporate strategy and operations.

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. Mr. Fritz brings to the Board executive leadership experience, along with financial expertise and industry knowledge.

Rae G. Ravich. Ms. Ravich has served as a director of the Company since June 4, 2014. Ms. Ravich has been running a startup in the health and wellness space since July 2016. From July 2015 to July 2016, Ms. Ravich was an Associate in the direct lending group at TCW Financial Planning LLC. From July 2013 to July 2015, Ms. Ravich was a Financial Analyst at Houlihan Lokey. 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 Chief Executive Officer and Chairman of the Board. Ms. Ravich brings to the Board her experience and background in the financial services industry.

John Scheel. Mr. Scheel has served as a director of the Company since September 13, 2006 and Vice Chairman of the Board since December 16, 2016. From August 31, 2006 to February 20, 2013, Mr. Scheel was the President and Chief Executive Officer of the Company. 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 continued to manage the Mill for Optima as its general manager, but also managed the melt shop and caster for Warren Steel Holdings in Warren, Ohio, which was also managed by Optima. In 2016, Mr. Scheel joined Keystone Consolidated Industries as the plant manager of its Keystone Bar Products, Inc. mill. Following a sale of the company, he continues as the Vice President and General Manager of Liberty Bar Products, Inc. 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. Mr. Scheel’s executive management experience and expertise in the manufacturing industry provides valuable insight to our Board in evaluating potential acquisitions and operating our subsidiaries.

Anna Van Buren. Ms. Van Buren has served as a Director of the Company since November 2013. She was appointed President and Chief Executive Officer of Faneuil, Inc. (“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 National Conference for Community and Justice Humanitarian Award. A graduate of Hollins University and the University of Virginia Executive School, she brings to the Board extensive executive leadership and industry expertise.

Michael C. Borofsky. Mr. Borofsky has served as a director since September 2013. Mr. Borofsky was formerly Senior Vice President of MacAndrews & Forbes. Prior to that, Mr. Borofsky worked for Skadden, Arps, Slate, Meagher & Flom LLP, where he specialized in mergers & acquisitions, and was an analyst at Goldman Sachs. Mr. Borofsky earned a B.A. from Yale University and a J.D. from Columbia University School of Law. Mr. Borofsky brings to the Board a valuable perspective due to his dual background in business and law.

Board Independence

The Board has determined that the below directors have met the requirements for independence under the applicable rules and regulations of the SEC and the NASDAQ Global Market (“NASDAQ”), as applicable:

Hal G. Byer

Michael Borofsky

Robert Scott Fritz

John Scheel

Board Leadership Structure

Our Board retains flexibility to select its Chairman of the Board and our Chief Executive Officer in the manner that it believes is in the best interests of our stockholders. Accordingly, the Chairman of the Board and the Chief Executive Officer positions may be filled by one individual or two. The Board currently believes that having Mr. Ravich serve as both Chief Executive Officer and Chairman of the Board is in the best interests of the stockholders given Mr. Ravich’s extensive knowledge of, years of service to and experience with, the Company. The Board does not currently have a lead independent director, but has appointed Mr. Scheel, an independent director, as Vice Chairman of the Board.

Board Committees

The Board has a standing audit committee (the “Audit Committee”) and compensation, nominating and corporate governance committee (the “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.

The Board has determined that the composition and functioning of the Board and all of our committees comply with all applicable requirements of the Sarbanes-Oxley Act, and NASDAQ and SEC rules and regulations. The Audit Committee and the Compensation, Nominating and Corporate Governance Committee each operate under a written charter approved by the Board. Each committee will review and reassess the adequacy of its charter periodically. The charters of both committees are available in the Corporate Governance section of the Company’s website, www.aljregionalholdings.com.

The following chart details the current membership of each committee:

Name of Director	Audit Committee	Compensation, Nominating and Corporate Governance Committee
Hal G. Byer		M
Michael Borofsky	M	C
Robert Scott Fritz	M
John Scheel	C*
M = Member
C = Chair * = Audit Committee Financial Expert

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 NASDAQ. Our Board has determined that Mr. Scheel is an “audit committee

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

The Audit Committee’s responsibilities include, among other responsibilities:

●

appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;

●

pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;

●

reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

●

coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;

●

establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns; and

●

preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement.

AUDIT COMMITTEE REPORT

The following is the report of the Audit Committee of the Board.

Notwithstanding anything to the contrary set forth in any of the Company’s previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate filings made by the Company, including this Proxy Statement, in whole or in part, the following Audit Committee Report shall not be deemed to be “soliciting material” or to be incorporated by reference into any prior or future filings made by the Company.

The Audit Committee has reviewed and discussed with management the Company’s audited financial statements for the fiscal year ended September 30, 2019. In addition, the Audit Committee has discussed with the Company’s independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (Communications with Audit Committee). The Audit Committee also has received the written disclosures and the letter as required by the Public Company Accounting Oversight Board Rule 3526 “Communications with Audit Committees Concerning Independence” and the Audit Committee has discussed with the independent auditors the independence of that firm.

Based on the Audit Committee’s review of the matters noted above and its discussions with the Company’s independent auditors and management, the Audit Committee recommended to the Board that the financial statements be included in the Company’s Annual Report.

Respectfully submitted by:

Members of the Audit Committee

John Scheel (Chair)

Michael Borofsky

Robert Scott Fritz

Compensation, Nominating and Corporate Governance Committee

Our Compensation, Nominating and Corporate Governance Committee consists of Messrs. Borofsky and Byer, with Mr. Borofsky chairing this committee. All members of this committee meet the requirements for independence under the applicable rules and regulations of the SEC, NASDAQ and the Internal Revenue Code of 1986, as amended (the “Code”), including the rules applicable to members of a listed company’s compensation committee. The Compensation, Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ.

The committee’s responsibilities include:

●

reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer;

●

evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of our chief executive officer;

●

determining the compensation of all our other officers and reviewing periodically the aggregate amount of compensation payable to such officers;

●

overseeing and making recommendations to the Board with respect to our incentive-based compensation and equity plans; and

●

reviewing and making recommendations to the Board with respect to director compensation.

As well as:

●

developing and recommending to the Board the criteria for selecting board and committee membership;

●

establishing procedures for identifying and evaluating director candidates including nominees recommended by stockholders;

●

identifying individuals qualified to become board members;

●

recommending to the Board the persons to be nominated for election as directors and to each of the Board’s committees; and

●

overseeing the evaluation of the Board, its committees and management.

Board’s Role in Risk Oversight

Both the full Board and its committees oversee the various risks faced by the Company. Management is responsible for the day-to-day management of the Company’s risks and provides periodic reports to the Board and its committees relating to those risks and risk-mitigation efforts.

Board oversight of risk is conducted primarily through the standing committees of the Board, the members of which are independent directors. The Audit Committee takes a lead role on overseeing financial risks and in interfacing with management on significant risks or exposures and assessing the steps management has taken to minimize such risks. The Audit Committee also is charged with, among other tasks, oversight of management on the Company’s guidelines and policies with respect to risk monitoring, assessment and management. Members of the Company’s management periodically report to the Audit Committee regarding risks overseen by the Audit Committee, including quarterly reports with respect to the Company’s internal controls over financial reporting.

Director Nominations

The Compensation, Nominating and Corporate Governance Committee evaluates and recommends to the Board director nominees for each election of directors.

In fulfilling its responsibilities, the Compensation, Nominating and Corporate Governance Committee considers the following factors:

•

the appropriate size of the Board;

•

the needs of the Company with respect to the particular talents and experience of its directors;

•

the knowledge, skills and experience of nominees, including experience in business, finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;

•

experience with accounting rules and practices;

•

applicable regulatory and securities exchange/association requirements; and

•

a balance between the benefit of continuity and the desire for a fresh perspective provided by new members.

The Compensation, Nominating and Corporate Governance Committee’s goal is to assemble a group of directors that brings to the Company a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Compensation, Nominating and Corporate Governance Committee also considers candidates with appropriate non-business backgrounds.

Other than the foregoing factors, there are no stated minimum criteria for director nominees. However, the Compensation, Nominating and Corporate Governance Committee may also consider such other factors as it may deem are in the best interests of the Company and its stockholders.

The Compensation, Nominating and Corporate Governance Committee identifies nominees by first evaluating the willingness of the current members of the Board to continue in service. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board up for re-election at an upcoming annual meeting of stockholders does not wish to continue in service, the Compensation, Nominating and Corporate Governance Committee identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the Board will be polled for suggestions as to individuals meeting the criteria of the Board. Research may also be performed to identify qualified individuals. If the Compensation, Nominating and Corporate Governance Committee believes that it requires additional candidates for nomination, the Compensation, Nominating and Corporate Governance Committee may explore alternative sources for identifying additional candidates. This may include engaging, as appropriate, a third party search firm to assist in identifying qualified candidates.

The Compensation, Nominating and Corporate Governance Committee will evaluate any recommendation for a director nominee proposed by a stockholder who gives timely written notice to the Corporate Secretary of the Company. In order to be timely, the notice must be delivered by a nationally recognized courier service or mailed by first class United States mail, postage or delivery charges prepaid, and received by the Company at 244 Madison Avenue, PMB #358, New York, NY 10016 not less than fifty (50) days or more than eighty (80) days prior to the scheduled date of the annual meeting, provided, however, that if fewer than sixty (60) days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so delivered or mailed and received not later than the close of business on the tenth (10th) day following the earlier of (a) the day on which such notice of the date of the meeting was mailed or (b) the day on which such public disclosure was made. Additionally, the Company’s bylaws require that all stockholder notices for director nominations contain the following information:

•

As to each person whom the stockholder proposes to nominate for election or reelection as a director:

the name, age, business address and residence address of the person;

the principal occupation or employment of the person;

the class, series and number of shares of capital stock of the Company that are owned beneficially by the person on the date of such stockholder’s notice;

a statement as to the person’s citizenship; and

any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, including, without limitation, such person’s written consent to being named in the Proxy Statement as a nominee and to serving as a director if elected.

•

As to the stockholder giving the notice:

the name and address, as such information appears on the Company’s books, of such stockholder and any other stockholders known by such stockholder to be supporting such nominee(s);

the class, series and number of shares of capital stock of the Company that are owned beneficially by the stockholder and each other stockholder known by such stockholder to be supporting such nominee(s) on the date of such stockholder’s notice; and

a representation that the stockholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice.

•

A description of all arrangements or understandings between the stockholder and each nominee and other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder.

The Board will evaluate recommendations for director nominees submitted by directors, management or qualifying stockholders in the same manner, using the criteria stated above.

All directors and director nominees will submit a completed form of directors’ and officers’ questionnaire as part of the nominating process. The process may also include interviews and additional background and reference checks for non-incumbent nominees, at the discretion of the Board.

Board Meetings

During the fiscal year ended September 30, 2019, the Board met seven times and took action by written consent on one occasion. During the fiscal year ended September 30, 2019, all directors attended at least 75% of the aggregate number of meetings of the Board. The Board encourages the directors to attend the annual meetings of stockholders.

Communications with Directors

If a stockholder wishes to communicate with the Board, they may send their communication in writing to: Corporate Secretary, ALJ Regional Holdings, Inc., 244 Madison Avenue, PMB #358, New York, NY 10016. Such stockholder must include their name and address in the written communication and indicate whether they are a stockholder of the Company. The Corporate Secretary will review any communication received from a stockholder, and all material communications from stockholders will be forwarded to the appropriate director or directors or the Board based on the subject matter.

Director Compensation

In December 2015, the Board approved a non-employee director compensation package comprised of (i) an annual retainer of $40,000 in cash, (ii) an annual grant of common stock with a value of $40,000, (iii) an additional $12,500 for the chair and $5,000 for each other member of the Audit Committee, and (iv) an additional $10,000 for the chair and $4,000 for each other member of the Compensation, Nominating and Corporate Governance Committee. Effective July 1, 2017, each non-employee director was given the option of how to allocate the payment between cash and common stock.

The following table provides information regarding all compensation awarded to, earned by or paid to each person who served as a non-employee director of the Company for the year ended September 30, 2019. Other than as set forth in the table and described more fully below, the Company did not pay any fees, make any equity or non-equity awards, or pay any other compensation, to its non-employee directors. All compensation paid to its employee directors is set forth in the tables summarizing executive officer compensation below.


Name	Fees Earned or Paid in Cash ($)	Stock Awards(1) ($)	Option Awards(1) ($)	Non-Equity Incentive Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All other compensation ($)	Total ($)
Hal G. Byer	$84,000	-	-	-	-	-	$84,000
Robert Scott Fritz	$70,000	$15,000	-	-	-	-	$85,000
Rae G. Ravich	$42,500	$37,500	-	-	-	-	$80,000
John Scheel	$52,500	$40,000	-	-	-	-	$92,500
Michael Borofsky	$55,000	$40,000	-	-	-	-	$95,000
Margarita Paláu-Hernández⁽¹⁾	$33,000	$30,000	-	-	-	-	$63,000

(1) Resigned effective October 3, 2019.

(1)

The following table shows the number of shares subject to outstanding and unexercised stock and option awards held by each non-employee director as of September 30, 2019:

Name	Number of Shares Subject to Outstanding Option Awards	Number of Shares Subject to Outstanding Stock Awards
Hal G. Byer	134,000	30,684
Robert Scott Fritz	-	42,806
Rae G. Ravich	100,000	37,890
John Scheel	-	55,108
Michael Borofsky	-	47,598

Required Vote

The seven (7) director nominees receiving the highest number of affirmative votes of the shares present and voting at the Annual Meeting in person or by proxy will be elected as directors. Each proxy cannot be voted for a greater number of persons than seven.

the BOARD RECOMMENDS A VOTE
“FOR” the election of each nominee listed above.

Proposal 2

RATIFICATION OF Appointment OF

Independent Registered Public Accounting Firm

The Audit Committee of the Board has engaged Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ended September 30, 2020. The Audit Committee regularly reviews and determines whether any non-audit services provided by Deloitte potentially affects its independence with respect to the Company. The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by Deloitte. Pre-approval is generally provided by the Audit Committee for up to one year, is detailed as to the particular service or category of services to be rendered and is generally subject to a specific budget. The Audit Committee may also pre-approve additional services or specific engagements on a case-by-case basis. Management provides annual updates to the Audit Committee regarding the extent of any services provided in accordance with this pre-approval. To date, all services performed by Deloitte have been pre-approved by the Audit Committee in accordance with this policy.

Prior to August 21, 2019, the Audit Committee had engaged Mayer Hoffman McCann P.C. (“MHM”) as the independent registered public accounting firm for the Company. As previously disclosed, on August 21, 2019, the Audit Committee formally appointed Deloitte, and formally dismissed MHM, as the Company’s independent registered public accounting firm.

The reports of MHM on the consolidated financial statements of the Company and subsidiaries as of and for the fiscal year ended September 30, 2018 and the subsequent interim period through August 21, 2019 did not contain any adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.

During the fiscal year ended September 30, 2018 and the subsequent interim period through August 21, 2019, there were (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K between the Company and MHM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which, if not resolved to MHM’s satisfaction, would have caused MHM to make reference thereto in their reports, and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K. It is not expected that representatives of Deloitte or MHM will be present at the Annual Meeting.

The following table sets forth the aggregate fees billed, or expected to be billed, by Deloitte with respect to audit services for the Company during the fiscal year ended September 30, 2019, and the aggregate fees billed by MHM with respect to audit and non-audit services for the Company during the fiscal years ended September 30, 2019 and 2018, and the subsequent interim periods in 2019 before the change in auditors became effective. As part of its duties, the Audit Committee considers whether the provision of services, other than audit services, by MHM is compatible with maintaining the auditor’s independence. All audit fees, including audit fees associated with the audit by Deloitte and MHM of the Company’s consolidated financial statements for the years ended September 30, 2019 and 2018, audit-related fees that were billed by Deloitte and MHM, and all other fees that were billed by MHM were approved by the Audit Committee in accordance with SEC requirements.

		2019	2018
Audit Fees (1)	$	762,565	$	711,000

Audit-Related Fees (2)	$	72,078	$	0

Tax Fees	$	0	$	0

All Other Fees (3)	$	120,000	$	0

Total Fees	$	954,643	$	711,000

(1)	Consists of fees billed for professional services rendered for the audit of our consolidated financial statements and review of our interim consolidated financial statements included in quarterly reports and services that are normally provided in connection with statutory and regulatory filings or engagements, including post-effective amendments to previously filed registration statements.
(2)	Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services include employee benefit plan audits, accounting consultations in connection with acquisitions, attest services that are not required by statute or regulation, and consultations concerning financial accounting and reporting standards.
(3)	Consists of transition services fees.

The decision to appoint Deloitte as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ended September 30, 2020 was approved by the Audit Committee. Stockholder ratification of the appointment of Deloitte as the independent registered public accounting firm for the Company and its subsidiaries is not required by the Company’s bylaws or otherwise. However, the Audit Committee is submitting the appointment of Deloitte to the stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify the appointment of Deloitte, the Audit Committee will reconsider whether or not to retain Deloitte or engage a different firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.

Audit Committee’s Pre-Approval Policies and Procedures

Consistent with policies of the SEC regarding auditor independence and the Audit Committee Charter, the Audit Committee has the responsibility for appointing, setting compensation and overseeing the work of the registered independent public accounting firm (the “Firm”). The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the Firm. Pre-approval is detailed as to the particular service to category of services and is generally subject to a specific budget. The Audit Committee may also pre-approve particular services on a case-by-case basis. In assessing request for services by the Firm, the Audit Committee considers whether such services are consistent with the Firm’s independence, whether the Firm is likely to provide the most effective and efficient service based upon their familiarity with the Company, and whether the service could enhance the Company’s ability to manage or control risk or improve audit quality.

Required Vote

The affirmative vote of at least a majority of the votes cast at the meeting at which a quorum is present, either in person or by proxy, is required to approve Proposal 2.

THE BOARD RECOMMENDS A VOTE “FOR” the ratification of the appointment of DELOITTE & TOUCHE LLP as the independent registered public accounting firm for the COMPANY AND ITS SUBSIDIARIES for the fiscal year ending September 30, 2020.

EXECUTIVE COMPENSATION

Named Executive Officers and Other Key Employees

The following table sets forth the name and position of our named executive officers and other key employees for the fiscal year ended September 30, 2019.

Name		Principal Position

Named Executive Officers
Jess M. Ravich		Chief Executive Officer

Anna Van Buren		President and Chief Executive Officer, Faneuil

Brian Hartman		Chief Financial Officer

Other Key Employees
Marc Reisch		Chairman, Phoenix

Steve Chesin		President and Chief Executive Officer, Carpets

The information provided below is biographical information about our non-director Named Executive Officers and other key employees. For information concerning our named executive officers who are also our directors, see “Information Regarding Directors” above.

Brian Hartman. Mr. Hartman has served as Chief Financial Officer since August 2017. Previously, Mr. Hartman was the Senior Vice President, Chief Financial Officer of Arcade Beauty, a manufacturer of sampling solutions for the beauty, fragrance and skincare segments, having served in such role since March 2012. From April 2005 to March 2012, Mr. Hartman was the Vice President, Corporate Controller of Visant Corporation, a specialty printing and marketing services enterprise. From January 1996 to April 2005, Mr. Hartman was the Controller for Metallurg Inc, a producer and distributor of specialty metals. Prior to this, Mr. Hartman held various accounting and auditing positions at Witco Chemical Corp., a manufacturer of specialty chemicals and Deloitte & Touche, LLP. Mr. Hartman is a certified public accountant and received a Bachelor of Business Administration degree in public accounting and a Master of Business Administration in financial management from Pace University.

Marc Reisch. Mr. Reisch was appointed Chairman of Phoenix in August 2015 and served as a director of the Company from that time until his resignation effective October 24, 2019. Mr. Reisch 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.

Steve Chesin. Mr. Chesin 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.

Each executive officer is chosen by the Board and holds office until a successor has been elected and qualified or until such officer’s earlier death, resignation or removal.

Summary Compensation Table

The following table sets forth the total compensation paid or accrued by the Company to the named executive officers and other key employees for services rendered during the last two fiscal years ended September 30, 2019

and 2018. No other executive officers received total annual compensation exceeding $100,000 during such fiscal years.

Name and Principal Position	Year Ended September 30,	Salary ($)			Bonus ($)			Stock Awards ⁽¹⁾ ($)		Option⁽²⁾ Awards ($)			Non-equity Incentive Plan Compensation ($)		All other Compensation ($)			Total ($)

Named Executive Officers
Jess Ravich	2019		37,500	⁽³⁾		-			187,500⁽³⁾		-		-			11,136⁽⁴⁾			236,136
Chief Executive Officer	2018		-			-			225,000⁽³⁾		-		-			-			225,000

Anna Van Buren	2019		520,000			250,000⁽⁵⁾			-		-		341,275	⁽⁶⁾		31,153	⁽⁷⁾		1,142,428
President and Chief Executive Officer, Faneuil	2018		520,000			-			-		-		330,380	⁽⁶⁾		31,147	⁽⁷⁾		881,527

Brian Hartman	2019		350,000			276,000	⁽⁸⁾		-		-		-			-			626,000
Chief Financial Officer	2018		307,222			191,000	⁽⁸⁾		-		161,659	⁽⁹⁾	-			-			659,881

Other Key Employees
Marc Reisch	2019		200,000			-			-		-		80,000	⁽¹⁰⁾		-			280,000
Chairman, Phoenix	2018		200,000			-			-		-		294,442	⁽¹⁰⁾		-			494,442
Steve Chesin	2019		300,000			-			-		-		21,131	⁽¹¹⁾		12,907	⁽¹²⁾		334,038
President and Chief Executive Officer, Carpets	2018		300,000			-			-		-		-			46,582	⁽¹³⁾		346,582

(1)

This column represents the aggregate fair value of common stock awards calculated in accordance with Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation” (“ASC Topic 718”). Fair value is the closing price of the common stock as listed on the NASDAQ Global Market on the issuance date.

(2)

This column represents the aggregate grant date fair value of option awards calculated in accordance with ASC Topic 718. Assumptions used in the calculation of this amount are included in Note 2, Summary of Significant Accounting Policies, of the Consolidated Financial Statements in “Part IV, Item 15. Exhibits, Financial Statement Schedules.”

(3)

During the last two fiscal years, Mr. Ravich has received total annual compensation of $225,000. From October 2017 through July 2019, Mr. Ravich elected to receive his entire annual compensation in ALJ common stock. Beginning in August 2019, the Compensation, Nominating, and Corporate Governance Committee elected to pay Mr. Ravich his entire annual compensation in cash.

(4)

Out-of-policy business expenses, which are allowed up to $117,000 under the terms of Mr. Ravich’s employment agreement.

(5)

Represents a discretionary bonus, which was approved by the Compensation, Nominating, and Corporate Governance Committee.

(6)

Represents an annual bonus amount equal to 10% of Faneuil EBITDA, before any bonus amount owed to Ms. Van Buren, in excess of $7.5 million. Ms. Van Buren’s bonus is based on a calendar year. The amounts included in the table above are estimates based on ALJ fiscal year and are subject to adjustments.

(7)

Represents health care insurance premiums.

(8)

Represents performance bonus according to the terms of Mr. Hartman’s employment agreement.

(9)

Represents an option to purchase 150,000 shares of ALJ common stock at an exercise price of $2.10 per share. Options vest in three equal annual installments on August 8, 2019, August 8, 2020, and August 8, 2021.

(10)

Represents an annual bonus amount equal to 10% of Phoenix pre-bonus EBITDA, in excess of $20.0 million, with a step down to 5% in excess of $27.0 million. Mr. Reisch’s bonus is based on a calendar year. The amounts included in the table above are estimates based on ALJ’s fiscal year and are subject to adjustments.

	(11)	Represents an annual bonus amount equal to 5% of Carpets pre-bonus EBITDA in excess of $1.0 million.
	(12)	Represents car allowance and lease payments.
	(13)	Represents health care insurance premiums of $3,848, personal time off payouts of $28,248, and car lease payments and other of $14,486.

Employment Arrangements with Named Executive Officers and Other Key Employees

Named Executive Officers

Jess M. Ravich. On July 29, 2019, the Company entered into an employment agreement with Mr. Ravich. Prior to entering into the Employment Agreement, Mr. Ravich served as the Company’s Executive Chairman. On June 21, 2020, the Company entered into an amended and restated employment agreement with Mr. Ravich to amend certain terms (as amended, the “Ravich Employment Agreement”). Pursuant to the Ravich Employment Agreement, Mr. Ravich assumed full-time responsibilities as the Company’s Chief Executive Officer until September 30, 2022 (the “Initial Term”), subject to subsequent automatic two-year renewals. Mr. Ravich will continue to serve as the Company’s Chairman of the Board.

Additional material terms of the Ravich Employment Agreement include:

(i) Base salary is $225,000 per year;

(ii) A stipend of $300,000 during the Initial Term for Mr. Ravich’s use in connection with out of policy business expenses;

(iii) Incentive bonus structure includes (a) an annual bonus in the amount of 10% of the difference between (1) the Company’s pre-bonus consolidated EBITDA less actual cash interest paid during the trailing twelve month measurement period (“Company Adjusted EBITDA”) and (2) a bonus threshold of $7,500,000, subject to adjustment from time to time; provided, that if Company Adjusted EBITDA is in excess of $37,500,000, the annual bonus shall equal the sum of $3,000,000 and 5% of such excess amount and (b) a one-time realization bonus for any sale of a business of the Company in an amount equal to: (1) for a sale of Faneuil, 2.5% of the first $25,000,000 of profit from such sale, less growth capital expenditures (“Profit”), and 5% of any Profit in excess of $25,000,000; (2) for a sale of any other subsidiary, 5% of the Profit;

(iv) A standstill provision, pursuant to which (a) Mr. Ravich, without the approval of a majority of the independent directors of the Board, shall not acquire additional shares that will result in more than 45% of the outstanding stock of the Company to be held by Mr. Ravich and his affiliates, and (b) any stock held by Mr. Ravich or any of his affiliates in excess of 40% of the outstanding stock of the Company shall be subject to that certain voting agreement by and between Mr. Ravich and the Company, dated September 6,

2019, pursuant to which such shares will be automatically voted with the majority of all other outstanding stock of the Company; and

(v) A clawback provision in the event of (a) a material restatement, revision or change to the Company’s financial statements requiring a recalculation of EBITDA for any particular fiscal year of the Company or (b) a breach by Mr. Ravich of his fiduciary obligation owed to the Company or commission by Mr. Ravich of an act of fraud, embezzlement, disloyalty or defalcation, or usurpation of a Company opportunity.

If Mr. Ravich’s employment is terminated by ALJ without cause, or by Mr. Ravich for good reason, Mr. Ravich is entitled to receive as severance: (i) the lesser of one-year base salary or pro-rated base salary for the remaining term; (ii) continuation of group health plan benefits, with the cost of the regular premium for such benefits paid in full by Faneuil; and (iii) annual bonus prorated for the period of Mr. Ravich’s service during the year of termination and calculated based on actual EBITDA (as defined in the Ravich Employment Agreement) for the year of termination equal to full annual bonus for the year of termination if otherwise entitled to receive the bonus.

Anna Van Buren. In October 2013, concurrent with ALJ’s acquisition of Faneuil, Faneuil entered into an employment agreement with Ms. Van Buren through December 2018. In August 2017, Faneuil and Ms. Van Buren entered into an amended employment agreement (the “Van Buren Amended Employment Agreement”), which extended the term to December 2021. Pursuant to the Van Buren Amended Employment Agreement, Ms. Van Buren receives an annual base salary of $520,000 and is eligible to earn an incentive bonus equal to 10% of Faneuil EBITDA, as defined in the Van Buren Amended Employment Agreement, before any bonus amount owed to Ms. Van Buren, in excess of $6,250,000 for calendar year 2017 and $7,500,000 thereafter, subject to further adjustment by ALJ Compensation, Nominating and Corporate Governance Committee from time to time in its discretion, with a step down to 5% of pre-bonus Faneuil EBITDA at $2,000,000 total compensation.

If Ms. Van Buren’s employment is terminated by Faneuil without cause, or by Ms. Van Buren for good reason, Ms. Van Buren is entitled to receive: (i) the lesser of one-year base salary or pro-rated base salary for the remaining term; (ii) continuation of group health plan benefits, with the cost of the regular premium for such benefits paid in full by Faneuil; (iii) full annual bonus for the year of termination if otherwise entitled to receive the bonus; and (iv) the annual bonus for the previous year if such bonus has been earned but not yet paid at time of termination.

Brian Hartman. In connection with ALJ’s appointment of Mr. Hartman to serve as its Chief Financial Officer in August 2017, ALJ entered into an employment agreement with Mr. Hartman through August 2018, subject to one-year renewals. Pursuant to the employment agreement, Mr. Hartman received an annual base salary of $300,000, a one-time sign-on bonus of $75,000, a cash bonus of $100,000 for the calendar year 2017, and an individual bonus target of 50% of annual base salary effective January 2018. In August 2019, the Company entered into the Second Amended and Restated Employment Agreement (the “A&R Employment Agreement”) with Mr. Hartman. The A&R Employment Agreement amended and restated the Employment Agreement, dated August 8, 2017, as amended by the First Amended and Restated Employment Agreement dated August 2, 2018, between Mr. Hartman and the Company, which term expired in August 2019. Pursuant to the A&R Employment Agreement, Mr. Hartman will serve as the Company’s Chief Financial Officer until September 30, 2021, subject to further one-year or two-year renewals, as determined by the Chief Executive Officer of the Company. Additional material terms changed by the A&R Employment Agreement include: (i) an increase in base salary from $350,000 to $375,000 effective October 2019, and (ii) Mr. Hartman’s incentive bonus structure, which was amended to include an annual bonus target of (a) up to 50% of his annual base salary based on the general quality and success of his efforts during the immediately preceding fiscal year and (b) up to 25% of his annual base salary based on certain goals agreed between the Chief Executive Officer and Mr. Hartman for the applicable fiscal year.

If Mr. Hartman’s employment is terminated by ALJ without cause, or by Mr. Hartman for good reason, Mr. Hartman is entitled to receive: (i) eight months of base salary; (ii) continuation of group health plan benefits with the cost of the regular premium for such benefits shared in the same relative proportion by ALJ and Mr. Hartman as in effect on the date of termination; (iii) full annual bonus for the year of termination if otherwise entitled to receive the bonus; and (iv) the annual bonus for the previous year if such bonus has been earned but not yet paid at time of termination.

Other Key Employees

Marc Reisch. In August 2015, concurrent with ALJ’s acquisition of Phoenix, Phoenix entered into an employment agreement with Mr. Reisch through December 2018. In March 2018, Phoenix entered into a new employment agreement with Mr. Reisch (the “New Reisch Employment Agreement”), which superseded and terminated the August 2015 employment agreement, and extended the term to December 2021. Under the New Reisch Employment Agreement, Mr. Reisch receives an annual base salary of $200,000 and is eligible to earn an annual bonus equal to 10% of any pre-bonus EBITDA of Phoenix in excess of $20,000,000, with a step down to 5% of any pre-bonus EBITDA of Phoenix in excess of $27,000,000, in each case before any bonus amount owed to Mr. Reisch and the Chief Operating Officer of Phoenix. In the event of a material restatement, revision, or change to Phoenix’s financial statements requiring a recalculation of EBITDA for any particular fiscal year, the Compensation, Nominating and Corporate Governance Committee of ALJ may require reimbursement from Mr. Reisch of any excess bonus paid to Mr. Reisch as a result of the recalculated EBITDA for such particular fiscal year.

If Mr. Reisch’s employment is terminated by Phoenix without cause, or by Mr. Reisch for good reason, Mr. Reisch is entitled to receive, for each calendar year remaining during the employment term, an annual bonus calculated and paid in the same manner as if Mr. Reisch’s employment had continued.

Steve Chesin. During April 2014, concurrent with ALJ’s acquisition of Carpets, Carpets entered into an employment agreement with Mr. Chesin through December 2017. In December 2017, Carpets and Mr. Chesin entered into the first amended employment agreement. Effective January 2019, Carpets and Mr. Chesin entered into the second amended employment agreement (the “New Chesin Employment Agreement”), which extended the term to December 2020. Under the New Chesin Employment Agreement, Mr. Chesin receives an annual base salary of $300,000 and is eligible to earn an annual bonus equal to 5% of any pre-bonus EBITDA of Carpets in excess of $1,000,000.

If Mr. Chesin’s employment is terminated by Carpets without cause, or by Mr. Chesin for good reason, Mr. Chesin is entitled to receive: (i) one year of base salary; (ii) continuation of group health plan benefits, with the cost of the regular premium for such benefits paid in full by Carpets; (iii) full annual bonus for the year of termination if otherwise entitled to receive the bonus; and (iv) the annual bonus for the previous year if such bonus has been earned but not yet paid at time of termination.

Outstanding Equity Awards at Fiscal 2019 Year-End

The following table sets forth certain information regarding outstanding equity awards as of September 30, 2018 by the named executive officers and other key employees.


Option Awards
Name	Option Grant Date	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Total Number of Securities Underlying Unexercised Options		Option Exercise Price		Option Expiration Date
Named Executive Officer:
Jess M. Ravich, CEO	8/3/2015		350,000		—			350,000	$	4.00	8/3/2022
Anna Van Buren, President and CEO, Faneuil	8/11/2017		100,000		50,000	⁽¹⁾		150,000	$	3.33	8/9/2027
Brian Hartman, CFO	8/8/2017		100,000		50,000	⁽²⁾		150,000	$	3.26	8/8/2027
	8/9/2018		50,000		100,000	⁽³⁾		150,000	$	2.10	8/9/2028
Other Key Employees:
Marc Reisch, Chairman, Phoenix	8/14/2015		250,000		—			250,000	$	4.27	8/13/2025
Steve Chesin, President and CEO, Carpets	12/7/2017		3,333		6,667	⁽⁴⁾		10,000	$	3.21	12/7/2027

(1)	Vests on August 11, 2020.
(2)	Vests on August 8, 2020.
(3)	Vests in two equal annual installments on August 9, 2020 and August 9, 2021.
(4)	Vests in two annual installments on December 7, 2019 and December 7, 2020.

Compensation Committee Report

The Compensation, Nominating and Corporate Governance Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management, and based on that review and discussion, the Compensation, Nominating and Corporate Governance recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders.

Respectfully submitted,

Members of the Compensation, Nominating and Corporate Governance Committee

Michael Borofsky (Chair)

Hal G. Byer

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the Record Date, 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 the Record Date, the Company had 42,172,791 shares of common stock issued and outstanding, which was the only class of voting securities outstanding. Unless otherwise indicated, the address for each stockholder listed in the following table is c/o ALJ Regional Holdings, Inc., 244 Madison Avenue, PMB #358, New York, NY 10016.


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership (1)	Percent of Class

Executive Officers and Directors
Jess M. Ravich, Chief Executive Officer and Chairman of the Board	25,810,213 (2)	49.7%

Anna Van Buren, Director c/o Faneuil, Inc. 2 Eaton Street, Suite 1002 Hampton, VA 23669	1,689,076 (3)	4.0%

Robert Scott Fritz, Director	953,780 (4)	2.2%

John Scheel, Director and Vice Chairman of the Board	885,127	2.1%

Hal G. Byer, Director	164,684 (5)	*%

Rae G. Ravich, Director	164,206 (6)	*%

Brian Hartman, Chief Financial Officer	150,000 (7)	*%

Michael C. Borofsky, Director	73,914	*%

Other Key Employees
Marc Reisch, Director c/o Phoenix Color Corp. 16^th Floor, 350 7^th Ave New York, NY 10001	750,000 (8)		1.8%

Steve Chesin, Chief Executive Officer, Carpets c/o Carpets N’ More 4580 West Teco Avenue Las Vegas, NV 89118	156,667 (9)		*%

All current directors, executive officers and other key employees as a group	30,797,667 (10)		58.1%

5% Stockholders
William Montgomery Elizabeth Glazer 2012 Trust 825 West End Ave 15 C New York, NY 10025	3,907,920 (11)	8.6%

Harland Clarke Holdings Corp. 10931 Laureate Drive San Antonio, Texas 78249	3,000,000	7.1%

* Denotes holders of less than 1%.

(1) Consistent with SEC regulations, shares of common stock issuable upon exercise of derivative securities by their terms exercisable within 60 days of the Record Date 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 7,592,030 shares of common stock underlying the convertible junior participation interests, 4,853,804 shares held by the Exemption Trust under the Ravich Revocable Trust of 1989, 350,000 shares of common stock issuable upon exercise of currently vested options, and 519,480 shares of common stock issuable upon exercise of currently vested warrants.

(3) Includes 100,000 shares of common stock issuable upon exercise of currently vested options, and 18,500 shares of common stock issuable upon exercise of currently vested warrants.

(4) 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.

(5) Includes 134,000 shares of common stock 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 of common stock issuable upon exercise of currently vested options.

(7) Includes 150,000 shares of common stock issuable upon exercise of currently vested options.

(8) Includes 250,000 shares of common stock issuable upon exercise of currently vested options.

(9) Includes 6,667 shares of common stock issuable upon exercise of options that vest within 60 days from the date hereof.

(10) Includes 1,628,647 shares of common stock issuable upon the exercise of options that are either vested or will vest within 60 days from the date hereof.

(11) Includes 2,777,572 shares of common stock underlying the convertible junior participation interests and 260,406 shares of common stock issuable upon exercise of currently vested warrants.

Equity Compensation Plan Information

On July 11, 2016, ALJ shareholders approved ALJ’s Omnibus Equity Incentive Plan (the “2016 Plan”), which allows ALJ and its subsidiaries to grant securities of ALJ to officers, employees, directors or consultants. ALJ believes that equity-based compensation is fundamental to attracting, motivating and retaining highly-qualified

dedicated employees who have the skills and experience required to achieve business goals. Further, ALJ believes the 2016 Plan aligns the compensation of directors, officers, and employees with shareholder interest.

The 2016 Plan is administered by ALJ’s Compensation, Nominating and Corporate Governance Committee. The maximum aggregate number of common stock shares that may be granted under the 2016 Plan is 2,000,000. The 2016 Plan generally provides for the grant of qualified or nonqualified stock options, restricted stock and restricted stock units, unrestricted stock, stock appreciation rights, performance awards and other awards. The Compensation, Nominating, and Corporate Governance Committee has full discretion to set the vesting criteria. The exercise price of a stock option may not be less than 100% of the fair market value of ALJ’s common stock on the date of grant. The 2016 Plan prohibits the repricing of outstanding stock options without prior shareholder approval. The term of stock options granted under the 2016 Plan may not exceed ten years. Awards are subject to accelerated vesting upon a change in control in the event the acquiring company does not assume the awards. The Board may amend, alter, or discontinue the 2016 Plan, but shall obtain shareholder approval of any amendment as required by applicable law or stock exchange listing requirements.

The following table sets forth certain information concerning shares of our common stock authorized for issuance under the Company’s existing equity compensation plans as of September 30, 2019:

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		720,000	$	3.02		1,280,000
Equity compensation plans not approved by security holders		934,000		3.67		—
Total		1,654,000	$	3.39		1,280,000

Certain Relationships and Related Transactions

Harland Clarke Holdings Corp. (“Harland Clarke”), a stockholder who owns ALJ shares in excess of five percent, was a counterparty to Faneuil in two contracts. One contract provides call center services to support Harland Clarke’s banking-related products and completed in March 2019. The other contract provided managed print services and concluded in September 2018. Faneuil recognized revenue from Harland Clarke totaling $0.1 million and $0.3 million for the years ended September 30, 2019 and 2018, respectively. The associated cost of revenue was $0.1 million and $0.3 million for the years ended September 30, 2019 and 2018, respectively. All revenue from Harland Clarke contained similar terms and conditions as for other transactions of this nature entered into by ALJ. Total accounts receivable from Harland Clarke was $0 and less than $0.1 million at September 30, 2019 and 2018, respectively.

On November 28, 2018, in connection with the Fourth Amendment to the Company’s Financing Agreement, the Company entered into a Backstop Letter Agreement (the “Backstop Letter Agreement”) with Jess Ravich, the Company’s Chief Executive Officer and Chairman of the Board. Pursuant to the Backstop Letter Agreement, Mr. Ravich will provide a “backstop” that would enable the Company to satisfy the Alternative Financing Requirement by agreeing, if the Company is unable to locate alternative financing on terms, conditions and timing reasonably acceptable to it, and if required by the Collateral Agent. In consideration of Mr. Ravich entering into such backstop arrangement, the Company’s Audit Committee and independent directors reviewed, approved and agreed to a backstop fee package, pursuant to which the Company would (i) pay to Mr. Ravich’s trust a one-time backstop fee of $0.1 million, and (ii) if the purchase of such subordinated debt is required by the Collateral Agent and the Company has failed to secure a financing alternative more advantageous to the Company, issue to Mr. Ravich’s trust a five-year warrant (the “Warrant”) to purchase 1.5 million shares of ALJ common

stock at an exercise price equal to the average closing price of the Company’s common stock as reported on The Nasdaq Stock Market for the 30 trading days preceding the warrant issuance date. On February 28, 2019, the Company determined the conditions set forth in the Backstop Letter Agreement requiring the issuance of the Warrant by the Company to Mr. Ravich’s trust were not met and that the Company shall have no further obligations under the Backstop Letter Agreement with regards to the Warrant.

In July 2019, ALJ sold 3.9 million shares of common stock at $1.80 per share for total cash proceeds of $7.0 million. Of the common shares sold, 2.2 million shares were to unaffiliated investors, 1.6 million shares were to Mr. Ravich, and 0.1 million were to Anna Van Buren, Faneuil’s President and Chief Executive Officer. In connection with such purchase and sale, each investor thereto, including ALJ’s CEO and Faneuil’s President and CEO, received 33% warrant coverage with a two-year term to purchase ALJ common stock at $1.80 per share.

On December 17, 2019, in connection with the Sixth Amendment to the Company’s Financing Agreement, certain trusts and other entities formed for the benefit of, or otherwise affiliated with, Mr. Ravich (the “Ravich Entities”), entered into a Junior Participation Agreement (the “Junior Participation Agreement”) with Cerberus Business Finance, LLC (“Cerberus”), pursuant to which the Ravich Entities agreed to purchase $4.1 million in junior participation interests in the Term B loan under the Financing Agreement (the “Junior Participation” and such interests, the “Junior Participation Interests”). The Junior Participation Interests are junior and subordinate to the Cerberus Term Loan in all respects, have no quarterly payments, and accrue interest under the financing agreement (i) in cash, accrued at the same rate per annum as the Cerberus Term Loan and paid monthly, and (ii) in kind, accrued at 4.00% per annum, payable on the Maturity Date. In addition, on December 17, 2019 (the “Issuance Date”), in consideration of the Ravich Entities agreeing to enter into the Junior Participation, the Company agreed to issue the Ravich Entities fully vested warrants to purchase 1.23 million shares of the Company’s common stock, with a five-year term and an exercise price equal to the lesser of the 30 day trailing average closing price of the Company’s common stock as traded on the NASDAQ Stock Market on (i) the Issuance Date, or (ii) the six month anniversary of the Issuance Date. The 30 day trailing average closing price of the Company’s common stock on the Issuance Date was $1.20.

On March 26, 2020, in connection with the Eighth Amendment to the Company’s Financing Agreement, the Ravich Entities entered into the First Amendment to the Junior Participation Agreement (“First Amendment to Junior Participation Agreement”). The amended terms under the First Amendment to Junior Participation Agreement include:

•

Interest earned on Term B Loan to be 100% in kind, at a rate equal to the Cerberus Term Loan plus 4.00%, until Cerberus Term Loan is paid in full instead of a mixture of cash and in kind; and

•

Interest earned on the Backstop Letter Agreement to be 100% in kind until Cerberus Term Loan is paid in full instead of a mixture of cash and in kind.

In connection with the First Amendment to Junior Participation Agreement, the Company issued fully vested warrants to purchase 0.4 million shares of the Company’s common stock to the Ravich Entities, with a five year term and an exercise price equal to the lesser of the 10-day trailing average closing price of the Company’s common stock as traded on the Nasdaq Stock Market on (i) March 26, 2020 or (ii) six months from March 26, 2020. The 10-day trailing average closing price of the Company’s common stock on the issuance date was $0.72.

On May 12, 2020, in connection with, and as a condition to, the Ninth Amendment to the Company’s Financing Agreement, certain stockholders of the Company (“Term C Loan Junior Participants”), including Mr. Ravich, entered into or amended certain Junior Participation Agreements (collectively, “Term C Loan Junior Participation Agreements”) with Cerberus. Pursuant to the Term C Loan Junior Participation Agreements, the Term C Loan Junior Participants acquired junior participation interests in Term C Loan in an aggregate amount of $5.6 million on May 13, 2020 (“Term C Loan”). Additionally, Mr. Ravich agreed to acquire additional junior participation interests in the Term B Loan in an aggregate amount of (i) $2.5 million on December 31, 2020 and (ii) $2.5 million on March 31, 2021. The $5.6 million Term C Loan is convertible, at the option of the Term C Loan Junior Participants, into shares of the Company’s common stock, at a conversion price equal to 120% of the trailing ten business day closing price of the Company’s common stock prior to the transaction date or the six-month anniversary thereof, whichever is lower.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports they file. Based upon a review of those forms and representations regarding the need for filing Forms 5, we believe that each of our directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements. In making this statement, we have relied upon examination of the copies of Forms 3, 4 and 5, and amendments thereto, provided to us and the written representations of our directors and executive officers.

OTHER MATTERS

If any other matters are properly brought before the meeting, it is the intention of the persons named in the proxy to vote on such matters in accordance with their best judgment.

All stockholders are urged to vote by following the instructions included in this Proxy Statement and the enclosed proxy card.

By Order of the Board of Directors,

/s/ Jess M. Ravich

Chief Executive Officer and Chairman of the Board

July 9, 2020

ANNUAL MEETING OF STOCKHOLDERS OF ALJ REGIONAL HOLDINGS, INC. August21,2020PROXYVOTINGINSTRUCTIONS INTERNET -Access “www.voteproxy.com”and followtheon-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE -Call toll-free 1-800-PROXIES (1-800-776-9437) in theUnitedStatesor1-718-921-8500 fromforeigncountriesfromany touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM EST the day before the meeting. MAIL -Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PERSON -You may vote your shares in person by attending the Annual Meeting. GO GREEN -e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. COMPANY NUMBER ACCOUNT NUMBER NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS: The Notice of Meeting, Proxy Statement, Proxy Card andAnnual Report on Form 10-K are available at http://www.astproxyportal.com/ast/10808/ Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 20730000000000001000 4 082120 THEBOARDOFDIRECTORSRECOMMENDSAVOTE"FORALLNOMINEES"INPROPOSAL1,AND"FOR"PROPOSAL2. PLEASESIGN,DATEANDRETURNPROMPTLYINTHEENCLOSEDENVELOPE.PLEASEMARKYOURVOTEINBLUEORBLACKINKASSHOWNHEREx FOR AGAINST ABSTAIN 1. ToelectMichaelC. Borofsky,JessM. Ravich,AnnaVanBuren,RobertScottFritz,HalG. Byer,RaeG. Ravich, 2. To ratify the appointment of Deloitte & Touche LLP as the Company’s respectivesuccessorsareelectedanddulyqualified,oruntiltheirrespectiveearlierresignationorremoval. andJohnScheelasdirectorstoholdofficeuntiltheCompany’s2021AnnualMeetingofStockholdersoruntiltheir independent registered public accounting firm for the fiscal year ending September30,2020. NOMINEES: FOR ALL NOMINEES O Michael C. Borofsky 3. TotransactsuchotherbusinessasmayproperlycomebeforetheAnnualMeetingoranyadjournment O Jess M. Ravich orpostponementthereof. WITHHOLD AUTHORITY O Anna Van Buren FOR ALL NOMINEES O Robert Scott Fritz Intheirdiscretion,theproxiesareauthorizedtovoteuponsuchotherbusinessasmayproperlycome O Hal G. Byer beforetheAnnualMeeting.Thisproxywhenproperlyexecutedwillbevotedasdirectedhereinbythe FOR ALL EXCEPT O Rae G. Ravich undersignedshareholder. If nodirectionismade,thisproxywillbevotedFORALLNOMINEES (See instructions below) O John Scheel in Proposal 1, and FOR Proposal 2. INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changestotheregisteredname(s)ontheaccountmaynotbesubmittedviathis method. Signature of Stockholder Date: Signature of Stockholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

0 ALJ REGIONAL HOLDINGS, INC. Proxy for Annual Meeting of Stockholders on August 21, 2020 This Proxy is Solicited on Behalf of the BOARD OF DIRECTORS As an alternative to completing this form, you may enter your voting instructions by telephone at 1-800-PROXIES, or via the Internet at WWW.VOTEPROXY.COM and follow the simple instructions. Use the Company Number and Account Number shown on your proxy card. The undersigned hereby appoints Jess M. Ravich, Chief Executive Officer, with full power of substitution, as proxy to vote all the shares of Common Stock which the undersigned would be entitled to vote if personally present and acting at theAnnual Meeting of Stockholders ofALJ Regional Holdings, Inc., to be held on August 21, 2020 at 9:00 a.m. Pacific Time at the offices of Shearman & Sterling LLP, 1460 El Camino Real, Floor 2, Menlo Park, CA 94025, and at any adjournments or postponements thereof, as follows: (Continued and to be signed on the reverse side) 1.1 14475