AVALON HOLDINGS CORP

Net Loss

Net loss attributable to Avalon Holdings Corporation common shareholders was $1.8 million in 2023 compared to net loss attributable to Avalon Holdings Corporation common shareholders of $0.6 million in 2022. Avalon recorded a state income tax provision in both 2023 and 2022, 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 net deferred tax assets, the overall effective tax rate in both years reflects taxes owed in certain U.S state jurisdictions. Avalon’s income tax provision (benefit) on the 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.