Company: AWX
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001437749-25-025765
Chunk: 16

Company: AVALON HOLDINGS CORP
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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 in both the three and six month periods ended June 30, 2025 and 2024, which was related entirely to the waste management and brokerage operations. Due to the recording of a full valuation allowance against the Company’s federal and state net deferred tax assets, the overall effective tax rate in both periods reflects taxes owed in certain U. S state jurisdictions. Avalon’s income tax on the income (loss) before taxes was offset by a change in the valuation allowance. A valuation allowance is provided when it is more likely than not that deferred tax assets relating to certain federal and state loss carryforwards will not be realized. Avalon continues to maintain a valuation allowance against the majority of its deferred tax amounts until it is evident that the deferred tax asset will be utilized in the future.

The One Big Beautiful Bill Act (the “ OBBBA”) was signed into law on July 4, 2025. The OBBBA contains significant tax law changes with various effective dates after its enactment date. The Company does not expect the tax law changes will have a material impact on its financial position, results of operations or financial disclosure.

Note 11. Long-Term Incentive Plan

On April 25, 2019, at the Annual Meeting of Shareholders, the shareholders approved the Long-term Incentive Plan “ The Plan.” The Plan provides for the granting of options which are intended to be non-qualified stock options (“ NQSO’s”) for federal income tax purposes except for those options designated as incentive stock options (“ ISO’s”) which qualify under Section 422 of the Internal Revenue Code.

The Plan has1,300,000shares of Class A Common Stock available for stock options to employees and non-employee directors. Shares of stock covered by options granted pursuant to The Plan which terminate or expire prior to exercise or have been surrendered or canceled shall be available for further option grants under the Option Plan.

The purpose of The Plan is (a) to improve individual employee performance by providing long-term incentives and rewards to employees of Avalon, (b) to assist Avalon in attracting, retaining and motivating employees and non-employee directors with experience and ability, and (c) to associate the interests of such employees and directors with those of the Avalon shareholders.

NQSO’s may be granted with an exercise price which is not less than100% of the fair market value of the Class A Common Stock on the date of grant. Options designated as ISO’s shall not be less than110% of fair market value for