Fog Cutter Capital Group Inc. Extends Stockholder Rights Plan to Preserve Use of Net Operating Losses

Fog Cutter Capital Group Inc. (OTC:FCCG) (the “Company”), the parent company of FAT Brands Inc. (Nasdaq:FAT), today announced that on February 2, 2017, its Board of Directors adopted an amendment to the Company’s Rights Agreement, originally adopted on October 18, 2002 (the “Rights Plan”), to extend the “Final Expiration Date” under the Rights Plan to October 28, 2019. The amendment was adopted to preserve the value of significant tax assets associated with the Company’s tax net operating loss carryforwards under Section 382 of the Internal Revenue Code. Under the Rights Plan, stock purchase rights were originally distributed to holders of the Company’s common stock at the rate of one right for each share of common stock held of record as of the close of business on October 28, 2002. The Company currently has 7,954,928 issued and outstanding shares of common stock.

“The Rights Plan was originally adopted by Fog Cutter as a means of protecting the potential tax benefits of the Company’s net operating loss carryforward ('NOL'),” said Donald J. Berchtold, President of the Company. “Under Federal tax rules, the NOL’s will be limited if the Company undergoes a significant change in ownership. The Rights Plan addresses the Board’s duty to protect the best interests of the Company and its stockholders by diluting any new 5% holder, or any existing 5% holder, that increases its stake by 1% or more, thereby preserving the Company’s NOL.”

Mr. Berchtold continued, “The extension of the Rights Plan was adopted in connection with planning for the initial public offering of FAT Brands, which was completed in October 2017. The preservation of Fog Cutter’s NOL is more important than ever, since Fog Cutter has entered into a written tax sharing agreement with FAT Brands in connection with the IPO.”

A copy of the original Rights Agreement, dated October 18, 2002, was publicly filed by the Company with the U.S. Securities and Exchange Commission. Although the Company’s securities are no longer registered under the Securities Exchange Act of 1934, as amended, a copy of the Rights Agreement continues to be available publicly through the EDGAR database of the SEC at www.sec.gov.

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Konnect AgencyEmily Johnston, [e-mail]