Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


⌧	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended June 30, 2023


◻	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ___________to _________

Commission File Number 1-15589

(Exact name of registrant as specified in its charter)


Delaware		47-0702918
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

7405 Irvington Road, Omaha NE		68122
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (402) 331-3727

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	DIT	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ◻	Accelerated filer ◻	Non-accelerated filer ⌧

Smaller reporting company ⌧	Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ◻ No ⌧

The Registrant had 608,689 shares of its $.01 par value common stock outstanding as of July 17, 2023.

Table of Contents

Form 10-Q

3rd Quarter

INDEX


June 30, 2023	PAGE

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements:

Condensed consolidated balance sheets at June 30, 2023 (unaudited) and September 30, 2022	3

Condensed consolidated unaudited statements of operations for the three and nine months ended June 30, 2023 and 2022	4

Condensed consolidated unaudited statements of shareholders’ equity for the three and nine months ended June 30, 2023 and 2022	5

Condensed consolidated unaudited statements of cash flows for the nine months ended June 30, 2023 and 2022	6

Notes to condensed consolidated unaudited financial statements	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3. Quantitative and Qualitative Disclosures About Market Risk	24

Item 4. Controls and Procedures	24

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	25

Item 1A. Risk Factors	25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3. Defaults Upon Senior Securities	25

Item 4. Mine Safety Disclosures	25

Item 5. Other Information	25

Item 6. Exhibits	26

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Balance Sheets

June 30, 2023 and September 30, 2022


	June		September
	2023		2022
	(Unaudited)
ASSETS
Current assets:
Cash	$	739,013	$	431,576
Accounts receivable, less allowance for doubtful accounts of $2.5 million at both June 2023 and September 2022		78,640,187		62,367,888
Inventories, net		162,567,117		134,654,637
Income taxes receivable		—		819,595
Prepaid expenses and other current assets		13,630,317		12,702,084
Total current assets		255,576,634		210,975,780

Property and equipment, net		78,872,876		48,085,520
Operating lease right-of-use assets, net		19,739,321		19,941,009
Goodwill		5,778,325		5,277,950
Other intangible assets, net		5,419,361		2,093,113
Other assets		3,320,838		2,751,155
Total assets	$	368,707,355	$	289,124,527

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	51,853,159	$	39,962,363
Accrued expenses		15,960,945		14,446,210
Accrued wages, salaries and bonuses		7,799,903		7,811,207
Income taxes payable		752,658		—
Current operating lease liabilities		6,300,102		6,454,473
Current maturities of long-term debt		2,738,524		1,595,309
Current mandatorily redeemable non-controlling interest		1,641,612		1,712,095
Total current liabilities		87,046,903		71,981,657

Credit facilities		143,375,961		91,262,438
Deferred income tax liability, net		3,138,204		2,328,588
Long-term operating lease liabilities		13,737,167		13,787,721
Long-term debt, less current maturities		12,229,486		7,384,260
Mandatorily redeemable non-controlling interest, less current portion		7,976,499		9,446,460
Other long-term liabilities		289,672		103,968

Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized		—		—
Common stock, $.01 par value, 3,000,000 shares authorized, 608,689 shares outstanding at June 2023 and 584,789 shares outstanding at September 2022		9,431		9,168
Additional paid-in capital		30,175,977		26,903,201
Retained earnings		102,000,218		96,784,353
Treasury stock at cost		(31,272,163)		(30,867,287)
Total shareholders’ equity		100,913,463		92,829,435
Total liabilities and shareholders’ equity	$	368,707,355	$	289,124,527

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

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AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and nine months ended June 30, 2023 and 2022


	For the three months ended June				For the nine months ended June
	2023		2022		2023		2022
Sales (including excise taxes of $153.7 million and $129.2 million, and $414.9 million and $315.5 million, respectively)	$	696,489,427	$	550,584,152	$	1,847,472,782	$	1,365,043,621
Cost of sales		649,623,651		516,907,540		1,724,504,862		1,277,757,425
Gross profit		46,865,776		33,676,612		122,967,920		87,286,196
Selling, general and administrative expenses		36,851,520		25,862,325		99,227,695		70,168,415
Depreciation and amortization		2,103,429		912,501		4,982,068		2,514,968
		38,954,949		26,774,826		104,209,763		72,683,383
Operating income		7,910,827		6,901,786		18,758,157		14,602,813

Other expense (income):
Interest expense		2,385,842		655,811		6,249,540		1,222,829
Change in fair value of mandatorily redeemable non-controlling interest		698,571		705,392		864,684		705,392
Other (income), net		(931,765)		(2,417,252)		(1,159,021)		(2,518,320)
		2,152,648		(1,056,049)		5,955,203		(590,099)
Income from operations before income taxes		5,758,179		7,957,835		12,802,954		15,192,912
Income tax expense		1,813,800		2,221,000		4,164,000		4,811,000
Equity method investment earnings, net of tax		—		307,973		—		1,670,133
Net income available to common shareholders	$	3,944,379	$	6,044,808	$	8,638,954	$	12,052,045

Basic earnings per share available to common shareholders	$	6.74	$	10.61	$	14.78	$	21.25
Diluted earnings per share available to common shareholders	$	6.59	$	10.38	$	14.56	$	20.72

Basic weighted average shares outstanding		585,625		569,689		584,359		567,026
Diluted weighted average shares outstanding		598,590		582,370		593,480		581,578

Dividends paid per common share	$	0.18	$	0.18	$	5.54	$	5.54

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

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AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Shareholders’ Equity

for the three and nine months ended June 30, 2023 and 2022


							Additional
	Common Stock			Treasury Stock			Paid-in		Retained
	Shares	Amount		Shares	Amount		Capital		Earnings		Total
THREE MONTHS ENDED JUNE 2022
Balance, April 1, 2022	917,009	$	9,168	(332,220)	$	(30,867,287)	$	26,555,046	$	86,336,525	$	82,033,452
Dividends on common stock, $0.18 per share	—		—	—		—		—		(108,596)		(108,596)
Compensation expense related to equity-based awards	—		—	—		—		174,078		—		174,078
Net income available to common shareholders	—		—	—		—		—		6,044,808		6,044,808
Balance, June 30, 2022	917,009	$	9,168	(332,220)	$	(30,867,287)	$	26,729,124	$	92,272,737	$	88,143,742

THREE MONTHS ENDED JUNE 2023
Balance, April 1, 2023	943,272	$	9,431	(332,220)	$	(30,867,287)	$	29,766,566	$	98,167,058	$	97,075,768
Dividends on common stock, $0.18 per share	—		—	—		—		—		(111,219)		(111,219)
Compensation expense related to equity-based awards	—		—	—		—		409,411		—		409,411
Committed repurchase of treasury stock	—		—	(2,363)		(404,876)		—		—		(404,876)
Net income available to common shareholders	—		—	—		—		—		3,944,379		3,944,379
Balance, June 30, 2023	943,272	$	9,431	(334,583)	$	(31,272,163)	$	30,175,977	$	102,000,218	$	100,913,463


							Additional
	Common Stock			Treasury Stock			Paid-in		Retained
	Shares	Amount		Shares	Amount		Capital		Earnings		Total
NINE MONTHS ENDED JUNE 2022
Balance, October 1, 2021	883,589	$	8,834	(332,220)	$	(30,867,287)	$	24,918,781	$	83,552,298	$	77,612,626
Dividends on common stock, $5.54 per share	—		—	—		—		—		(3,331,606)		(3,331,606)
Compensation expense and settlement of equity-based awards	33,420		334	—		—		1,810,343		—		1,810,677
Net income available to common shareholders	—		—	—		—		—		12,052,045		12,052,045
Balance, June 30, 2022	917,009	$	9,168	(332,220)	$	(30,867,287)	$	26,729,124	$	92,272,737	$	88,143,742

NINE MONTHS ENDED JUNE 2023
Balance, October 1, 2022	917,009	$	9,168	(332,220)	$	(30,867,287)	$	26,903,201	$	96,784,353	$	92,829,435
Dividends on common stock, $5.54 per share	—		—	—		—		—		(3,423,089)		(3,423,089)
Compensation expense and settlement of equity-based awards	26,263		263	—		—		3,272,776		—		3,273,039
Committed repurchase of treasury stock	—		—	(2,363)		(404,876)		—		—		(404,876)
Net income available to common shareholders	—		—	—		—		—		8,638,954		8,638,954
Balance, June 30, 2023	943,272	$	9,431	(334,583)	$	(31,272,163)	$	30,175,977	$	102,000,218	$	100,913,463

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

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AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the nine months ended June 30, 2023 and 2022


	June		June
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income available to common shareholders	$	8,638,954	$	12,052,045
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities:
Depreciation		4,701,316		2,486,613
Amortization		280,752		28,355
Equity method investment earnings, net of tax		—		(1,670,133)
Gain on re-valuation of equity method investment to fair value		—		(2,387,411)
(Gain) loss on sales of property and equipment		(133,159)		(133,639)
Equity-based compensation		1,940,631		1,903,884
Deferred income taxes		809,616		1,231,012
Provision for losses on doubtful accounts		(7,697)		83,000
Inventory allowance		442,603		688,902
Change in fair value of mandatorily redeemable non-controlling interest		864,684		705,392
Changes in assets and liabilities, net of effects of business acquisition:
Accounts receivable		(8,026,950)		(1,215,238)
Inventories		(12,294,118)		(4,674,292)
Prepaid and other current assets		(745,490)		(2,986,167)
Equity method investment distributions		—		1,095,467
Other assets		(569,683)		(728,596)
Accounts payable		10,360,228		1,313,711
Accrued expenses and accrued wages, salaries and bonuses		1,487,971		1,926,479
Other long-term liabilities		185,704		(690,693)
Income taxes payable and receivable		1,572,253		(1,890,449)
Net cash flows from (used in) operating activities		9,507,615		7,138,242

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(6,759,929)		(13,940,428)
Proceeds from sales of property and equipment		151,307		145,500
Principal payment received on note receivable		—		175,000
Cash acquired in business combination		—		7,958
Acquisition of Henry's (See Note 2)		(54,865,303)		—
Net cash flows from (used in) investing activities		(61,473,925)		(13,611,970)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		1,863,027,754		1,393,048,057
Repayments under revolving credit facilities		(1,810,914,231)		(1,381,508,745)
Proceeds from borrowings on long-term debt		7,000,000		—
Principal payments on long-term debt		(1,011,559)		(524,874)
Proceeds from exercise of stock options		—		173,590
Dividends on common stock		(3,423,089)		(3,331,606)
Settlement and withholdings of equity-based awards		—		(1,280,749)
Redemption and distributions to non-controlling interest		(2,405,128)		(20,600)
Net cash flows from (used in) financing activities		52,273,747		6,555,073
Net change in cash		307,437		81,345
Cash, beginning of period		431,576		519,591
Cash, end of period	$	739,013	$	600,936

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	5,824,144	$	1,201,073
Cash paid during the period for income taxes, net of refunds		1,780,000		5,468,488

Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable	$	1,622,224	$	123,801
Effect of business acquisition		—		23,308,624
Committed repurchase of treasury stock		404,876		—
Issuance of common stock in connection with the vesting and exercise of equity-based awards		2,044,805		2,280,783

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

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AMCON Distributing Company and Subsidiaries

Notes to Condensed Consolidated Unaudited Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

AMCON Distributing Company and Subsidiaries (“AMCON” or the “Company”) operate two business segments:

●

Our wholesale distribution segment (“Wholesale Segment”) distributes consumer products and provides a full range of programs and services to our customers that are focused on helping them manage their business and increase their profitability. We serve customers in 31 states and primarily operate in the Central, Rocky Mountain, Mid-South and Mid-Atlantic regions of the United States.

●

Our retail health food segment (“Retail Segment”) operates 17 health food retail stores located throughout the Midwest and Florida.

WHOLESALE SEGMENT

Our Wholesale Segment is one of the largest wholesale distributors in the United States, serving approximately 6,800 retail outlets including convenience stores, grocery stores, liquor stores, drug stores, and tobacco shops. We currently distribute over 17,000 different consumer products, including cigarettes and tobacco products, candy and other confectionery products, beverages, groceries, paper products, health and beauty care products, frozen and refrigerated products and institutional foodservice products. Convenience stores represent our largest customer category. In December 2022, Convenience Store News ranked us as the sixth (6th) largest convenience store distributor in the United States based on annual sales.

Our Wholesale Segment offers retailers the ability to take advantage of manufacturer- and Company-sponsored sales and marketing programs, merchandising and product category management services, and the use of information systems and data services that are focused on minimizing retailers’ investment in inventory, while seeking to maximize their sales and profits. In addition, our wholesale distribution capabilities provide valuable services to both manufacturers of consumer products and convenience retailers. Manufacturers benefit from our broad retail coverage, inventory management, efficiency in processing small orders, and frequency of deliveries. Convenience retailers benefit from our distribution capabilities by gaining access to a broad product line, inventory optimization and merchandising expertise, information systems, and accessing trade credit.

Our Wholesale Segment operates eight distribution centers located in Illinois, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Tennessee and West Virginia. These distribution centers, combined with cross-dock facilities, include approximately 1.1 million square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kellogg’s, Kraft Heinz, and Mars Wrigley. We also market private label lines of water, candy products, batteries, and other products. We do not maintain any long-term purchase contracts with our suppliers.

As further described in Note 2, on February 3, 2023, the Company closed on its acquisition of Henry’s Foods, Inc. (“Henry’s”), purchasing substantially all of Henry’s operating assets for approximately $54.9 million.

RETAIL SEGMENT

Our Retail Segment, through our Healthy Edge Retail Group subsidiary, is a specialty retailer of natural/organic groceries and dietary supplements that focuses on providing high quality products at affordable prices, with an exceptional level of customer service and nutritional consultation. All of the products carried in our stores must meet strict quality and ingredient guidelines, and include offerings such as gluten-free and antibiotic-free groceries and meat products, as well as products containing no artificial colors, flavors, preservatives, or partially hydrogenated oils. We design our retail sites in an efficient and flexible small-store format, which emphasizes a high energy and shopper-friendly environment.

We operate within the natural products retail industry, which is a subset of the United States grocery industry. This industry includes conventional, natural, gourmet and specialty food markets, mass and discount retailers, warehouse clubs, health food stores, dietary supplement retailers, drug stores, farmers markets, mail order and online retailers, and multi-level marketers.

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Our Retail Segment operates 17 retail health food stores as Chamberlin’s Natural Foods, Akin’s Natural Foods, and Earth Origins Market. These stores carry over 35,000 different national and regionally branded and private label products including high-quality natural, organic, and specialty foods consisting of produce, baked goods, frozen foods, nutritional supplements, personal care items, and general merchandise.

FINANCIAL STATEMENTS

The Company’s fiscal year ends on September 30^th, except for one non-wholly owned subsidiary whose fiscal year ends on the last Friday of September. The results for the interim period included with this Quarterly Report may not be indicative of the results which could be expected for the entire fiscal year. All significant intercompany transactions and balances have been eliminated in consolidation. Certain information and footnote disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted. In the opinion of management, the accompanying condensed consolidated unaudited financial statements (“financial statements”) contain all adjustments necessary to fairly present the financial information included herein. The Company believes that although the disclosures contained herein are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the Company’s annual audited consolidated financial statements for the fiscal year ended September 30, 2022, as filed with the Securities and Exchange Commission on Form 10-K. For purposes of this report, unless the context indicates otherwise, all references to “we”, “us”, “our”, the “Company”, and “AMCON” shall mean AMCON Distributing Company and its consolidated subsidiaries. Additionally, the three month fiscal periods ended June 30, 2023 and June 30, 2022 have been referred to throughout this Quarterly Report as Q3 2023 and Q3 2022, respectively. The fiscal balance sheet dates as of June 30, 2023 and September 30, 2022 have been referred to as June 2023 and September 2022, respectively.

ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models, and methods for estimating expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2022 (fiscal 2024 for the Company) with early adoption permitted. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements.

2. ACQUISITION

On February 3, 2023, the Company, through its wholly owned subsidiary, LOL Foods, Inc., paid approximately $54.9 million in cash to acquire substantially all of the operating assets of Henry’s, a wholesale distributor to convenience stores and other retail formats operating in Minnesota, North Dakota, South Dakota, Iowa, and Wisconsin. In connection with the transaction, the Company also assumed certain operating liabilities totaling approximately $1.2 million, including approximately $0.2 million of operating leases. The transaction was funded with borrowings from the Company’s existing bank group. Costs to effectuate the acquisition were not significant and were expensed as incurred. Strategically, the acquisition expands the Company’s footprint in the North Central portion of the United States and enhances the product and service offerings available to its customer base.

The Company paid cash consideration for the net acquired assets and their related values as of the acquisition date, measured in accordance with FASB Accounting Standards Codification (“ASC”) 805 – Business Combinations. In valuing identifiable intangible assets, the Company has estimated the fair value using the discounted cash flows methodology with the assistance of an independent valuation advisor. Inputs and projections used to measure the fair value as of the acquisition date included, but were not limited to, sales growth, gross profit estimates, royalty and customer retention rates, economic and industry conditions, working capital requirements and various other operational considerations.

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The following purchase price allocation reflects the Company’s provisional (preliminary) estimates and analyses and is subject to change during the measurement period, which is generally one year from the acquisition date. During Q3 2023, certain non-contingent components of the total purchase price were updated, which resulted in a reduction of the total purchase price by approximately $0.1 million. This reduction was recorded as an adjustment to goodwill. All amounts are provisional and incomplete at the reporting date and may change materially in subsequent reporting periods during the measurement period while additional information is obtained, particularly as it relates to certain accounts receivable, property and equipment, inventory, other intangible assets and certain liability balances while final appraisal and valuation work is completed. Accordingly, any changes to the Company’s provisional recording of the transaction may materially impact its financial statements, including but not limited to its consolidated balance sheets, statements of operations, shareholders’ equity and cash flows, and related disclosures. All assets acquired and operating liabilities assumed have been recorded as a component of our Wholesale Segment.

Provisional (preliminary) amounts of identifiable assets and liabilities assumed:


Accounts receivable	$	8,237,652
Inventories		16,060,965
Prepaid and other assets		400,964
Property and equipment		27,216,323
Other intangible assets		3,607,000
Liabilities assumed		(1,157,976)
Total identifiable net assets	$	54,364,928

Total identifiable net assets	$	54,364,928
Goodwill		500,375
Consideration transferred	$	54,865,303

Accounts receivable were recorded at their fair value representing the amount we expect to collect, which also approximated the gross contractual values of such receivables at the acquisition date. Goodwill totaling approximately $0.5 million arose from the acquisition and primarily represents synergies and economies of scale generated through reductions in selling, general, and administrative expenses. This goodwill has been assigned to the Company’s Wholesale Segment and is expected to be deductible for tax purposes.

The provisional (preliminary) value of other intangible assets acquired consisted of the following:


	Acquisition-Date		Useful Life
Other Intangible Asset	Fair Value		(Years)
Customer list	$	2,010,000		15
Non-competition agreement		95,000		5
Trade name		1,502,000		7
	$	3,607,000

The following table sets forth the unaudited supplemental financial data for Henry’s from the acquisition date through June 2023, which is included in the Company’s consolidated results for the nine months ended June 2023.


Revenue	$	131,563,988
Net income available to common shareholders	$	1,288,462

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The following table presents unaudited supplemental pro forma information assuming the Company acquired Henry’s on October 1, 2021, in addition to holding a 64% interest in Team Sledd, LLC (“Team Sledd”) on October 1, 2021. These pro forma amounts do not purport to be indicative of the actual results that would have been obtained had the acquisitions occurred at that time.


	For the three months ended June 2023		For the three months ended June 2022		For the nine months ended June 2023		For the nine months ended June 2022
Revenue	$	696,489,427	$	700,311,723	$	1,951,264,477	$	1,988,702,611
Net income available to common shareholders	$	3,944,379	$	6,202,533	$	8,838,866	$	15,484,735

3. INVENTORIES

Inventories in our Wholesale Segment consisted of finished goods and are stated at the lower of cost or net realizable value, utilizing FIFO and average cost methods. Inventories in our Retail Segment consisted of finished goods and are stated at the lower of cost or market using the retail method. The wholesale distribution and retail health food segment inventories consist of finished products purchased in bulk quantities to be redistributed to the Company’s customers or sold at retail. Finished goods included total reserves of approximately $1.7 million at June 2023 and $1.1 million at September 2022. These reserves include the Company’s obsolescence allowance, which reflects estimated unsalable or non-refundable inventory based upon an evaluation of slow-moving and discontinued products.

4. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill at June 2023 and September 2022 was as follows:


	June		September
	2023		2022
Wholesale Segment	$	5,778,325	$	5,277,950

Other intangible assets at June 2023 and September 2022 consisted of the following:


	June		September
	2023		2022
Customer lists (Wholesale Segment) (less accumulated amortization of $0.2 million at June 2023 and less than $0.1 million at September 2022)	$	3,284,013	$	1,401,945
Non-competition agreements (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023 and less than $0.1 million at September 2022)		222,753		191,168
Tradename (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023)		1,412,595		—
Trademarks and tradenames (Retail Segment)		500,000		500,000
	$	5,419,361	$	2,093,113

Goodwill and the trademarks and tradenames for our Retail Segment are considered to have indefinite useful lives and therefore no amortization has been recorded on these assets. Goodwill recorded on the Company’s consolidated balance sheets represent amounts allocated to its wholesale reporting unit which totaled approximately $5.8 million and $5.3 million at June 2023 and September 2022, respectively. The Company performs its annual impairment testing during the fourth fiscal quarter of each year or as circumstances change or necessitate. There have been no material changes to the Company’s impairment assessments since its fiscal year ended September 2022.

At June 2023, identifiable intangible assets considered to have finite lives were represented by customer lists which are being amortized over 15 years, a non-competition agreement which is being amortized over three years, a non-competition agreement which is being amortized over five years, and a tradename in our Wholesale Segment that is being amortized over seven years. These intangible assets are evaluated for accelerated attrition or amortization adjustments if warranted. Amortization expense related to these assets was approximately $0.1 million and $0.3 million for the three and nine month periods ended June 2023, respectively.

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Estimated future amortization expense related to identifiable intangible assets with finite lives was as follows at June 2023:


	June
	2023
Fiscal 2023 (1)	$	134,425
Fiscal 2024		537,701
Fiscal 2025		506,869
Fiscal 2026		463,703
Fiscal 2027		463,703
Fiscal 2028 and thereafter		2,812,960
	$	4,919,361

(1)	Represents amortization for the remaining three months of Fiscal 2023.

5. DIVIDENDS

The Company paid cash dividends on its common stock totaling $0.1 million and $3.4 million for the three and nine month periods ended June 2023, respectively, and $0.1 million and $3.3 million for the three and nine month periods ended June 2022, respectively.

6. EARNINGS PER SHARE

Basic earnings per share available to common shareholders is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding for each period. Diluted earnings per share available to common shareholders is calculated by dividing net income available to common shareholders by the sum of the weighted average number of common shares outstanding and the weighted average dilutive equity awards.


	For the three months ended June
	2023				2022
	Basic		Diluted		Basic		Diluted
Weighted average number of common shares outstanding		585,625		585,625		569,689		569,689
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)		—		12,965		—		12,681
Weighted average number of shares outstanding		585,625		598,590		569,689		582,370
Net income available to common shareholders	$	3,944,379	$	3,944,379	$	6,044,808	$	6,044,808

Net earnings per share available to common shareholders	$	6.74	$	6.59	$	10.61	$	10.38

(1)	Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive.


	For the nine months ended June
	2023				2022
	Basic		Diluted		Basic		Diluted
Weighted average number of common shares outstanding		584,359		584,359		567,026		567,026
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)		—		9,121		—		14,552
Weighted average number of shares outstanding		584,359		593,480		567,026		581,578
Net income available to common shareholders	$	8,638,954	$	8,638,954	$	12,052,045	$	12,052,045

Net earnings per share available to common shareholders	$	14.78	$	14.56	$	21.25	$	20.72

(1)Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive.

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7. DEBT

The Company primarily finances its operations through three credit facility agreements (the “AMCON Facility”, the “Team Sledd Facility” and the “Henry’s Facility”, and together, the “Facilities”) and long-term debt agreements with banks. In Q3 2023, the Company amended the Team Sledd Facility, increasing its aggregate borrowing capacity from $70.0 million to $80.0 million, extending the maturity date to March 2028, and adding certain real estate property as eligible borrowing collateral under the agreement.

At June 2023, the Facilities had a total combined borrowing capacity of $300.0 million, including provisions for up to $30.0 million in credit advances for certain inventory purchases, which are limited by accounts receivable and inventory qualifications, and the value of certain real estate collateral. The Henry’s Facility matures in February 2026, the AMCON Facility matures in June 2027 and the Team Sledd Facility matures in March 2028, each without a penalty for prepayment. Obligations under the Facilities are collateralized by substantially all of the Company’s respective equipment, intangibles, inventories, accounts receivable, and certain real estate. The Facilities each feature an unused commitment fee and springing financial covenants. Borrowings under the Facilities bear interest at either the bank’s prime rate or the Secured Overnight Financing Rate (“SOFR”), plus any applicable spreads.

The amount available for use from the Facilities at any given time is subject to a number of factors, including eligible accounts receivable and inventory balances that fluctuate day-to-day, as well as the value of certain real estate collateral. Based on the collateral and loan limits as defined in the Facility agreements, the credit limit of the combined Facilities at June 2023 was $249.9 million, of which $143.4 million was outstanding, leaving $106.5 million available.

The average interest rate of the Facilities was 6.75% at June 2023. For the nine months ended June 2023, the peak borrowings under the Facilities was $159.7 million, and the average borrowings and average availability under the Facilities was $124.3 million and $83.8 million, respectively.

LONG-TERM DEBT

In addition to the Facilities, the Company also had the following long-term obligations at June 2023 and September 2022.


	June 2023		September 2022
Unsecured note payable, interest payable at a fixed rate of 4.50% with quarterly installments of principal and interest of $49,114 through June 2023 with remaining principal due September 2023		852,642		968,589
Note payable, interest payable at a fixed rate of 4.10% with monthly installments of principal and interest of $53,361 through June 2033 with remaining principal due July 2033, collateralized by Team Sledd's principal office and warehouse		5,280,076		5,572,766
Note payable, interest payable at a fixed rate of 3.25% with monthly installments of principal and interest of $17,016 through August 2034 with remaining principal due September 2034, collateralized by Team Sledd's principal office and warehouse		1,927,167		2,052,327
Note payable with monthly installments of principal and interest of $7,934 through February 2025 with remaining principal due March 2025, and an effective variable rate of 7.28% at June 2023, collateralized by certain of Team Sledd's equipment		312,040		385,887
Note payable, interest payable at a fixed rate of 6.04% with monthly installments of principal and interest of $135,469 through February 2028, collateralized by certain of Henry's equipment		6,596,085		—
		14,968,010		8,979,569
Less current maturities		(2,738,524)		(1,595,309)
	$	12,229,486	$	7,384,260

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The aggregate minimum principal maturities of the long-term debt for each of the next five fiscal years are as follows:


Fiscal Year Ending
2023 (1)	$	1,295,972
2024		1,957,369
2025		2,166,686
2026		2,073,198
2027		2,187,857
2028 and thereafter		5,286,928
	$	14,968,010

(1)Represents payments for the remaining three months of Fiscal 2023.

Cross Default and Co-Terminus Provisions

Team Sledd’s three notes payable and the Team Sledd Facility contain cross default provisions. There were no such cross defaults at June 2023. The Company was in compliance with all of its financial covenants under the Facilities at June 2023.

Other

The Company has issued a letter of credit for $0.5 million to its workers’ compensation insurance carrier as part of its self-insured loss control program.

8. INCOME TAXES

The change in the Company’s effective income tax rate for the three and nine month periods ended June 2023 as compared to the respective prior year periods, was primarily related to non-deductible compensation expense in relation to the amount of income from operations before income tax expense and higher effective state income tax rates between the comparative periods.

9. MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST

Mandatorily redeemable non-controlling interest (“MRNCI”) recorded on the Company’s condensed consolidated balance sheet represents the non-controlling interest in the Company’s strategic investment in Team Sledd. During April 2023, Team Sledd redeemed certain membership interests from its non-controlling interest, which increased the Company’s ownership interest to approximately 64% as of June 2023. The Company owned approximately 56% of Team Sledd as of September 2022. The Company has elected to present the MRNCI liability at fair value under ASC 825 – Financial Instruments (“ASC 825”) as it believes this best represents the potential future liability and cash flows. As such, the MRNCI balance at June 2023 represents the fair value of the remaining future membership interest redemptions and other amounts due to noncontrolling interest holders through April 2026. The Company calculates the estimated fair value of the MRNCI based on a discounted cash flow valuation technique using the best information available at the reporting date, and records changes in the fair value of the MRNCI as a component of other expense (income) in the Condensed Consolidated Statements of Operations. The Company estimates the probability and timing of future redemptions and earnings of Team Sledd based on management’s knowledge and assumptions of certain events as of each reporting date, including the timing of any future redemptions and an appropriate discount rate. At June 2023, the difference between the contractual amount due under the MRNCI and the fair value was approximately $0.7 million. The MRNCI is classified as Level 3 because of the Company’s reliance on unobservable assumptions. The following table presents changes in the fair value of the MRNCI since September 2022:


Fair value of MRNCI as of September 2022	$	11,158,555
Redemption of non-controlling interests		(1,812,558)
Distributions to non-controlling interest		(592,570)
Change in fair value		864,684
Fair value of MRNCI as of June 2023	$	9,618,111
Less current portion at fair value		(1,641,612)
	$	7,976,499

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10. BUSINESS SEGMENTS

The Company has two reportable business segments: the wholesale distribution of consumer products which includes Team Sledd and Henry’s (the Wholesale Segment), and the retail sale of health and natural food products (the Retail Segment). The aggregation of the Company’s business operations into these business segments was based on a range of considerations, including but not limited to the characteristics of each business, similarities in the nature and type of products sold, customer classes, methods used to sell the products and economic profiles. Included in the “Other” column are intercompany eliminations, equity method investment earnings, net of tax and assets held and charges incurred and income earned by our holding company. The segments are evaluated on revenues, gross margins, operating income (loss), and income (loss) from operations before taxes. Certain amounts in prior periods have been reclassified to conform with the current presentation.


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED JUNE 2023
External revenue:
Cigarettes	$	429,431,319	$	—	$	—	$	429,431,319
Tobacco		124,894,734		—		—		124,894,734
Confectionery		46,624,371		—		—		46,624,371
Health food		—		10,745,108		—		10,745,108
Foodservice & other		84,793,895		—		—		84,793,895
Total external revenue		685,744,319		10,745,108		—		696,489,427
Depreciation		1,690,452		278,552		—		1,969,004
Amortization		134,425		—		—		134,425
Operating income (loss)		11,772,692		(297,795)		(3,564,070)		7,910,827
Interest expense		—		—		2,385,842		2,385,842
Income (loss) from operations before taxes		11,148,619		559,473		(5,949,913)		5,758,179
Total assets		349,564,773		18,008,597		1,133,985		368,707,355
Capital expenditures		5,082,997		405,694		—		5,488,691


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED JUNE 2022
External revenue:
Cigarettes	$	364,771,496	$	—	$	—	$	364,771,496
Tobacco		93,957,495		—		—		93,957,495
Confectionery		32,541,090		—		—		32,541,090
Health food		—		11,350,797		—		11,350,797
Foodservice & other		47,963,274		—		—		47,963,274
Total external revenue		539,233,355		11,350,797		—		550,584,152
Depreciation		602,770		281,376		—		884,146
Amortization		28,355		—		—		28,355
Operating income (loss)		9,432,660		241,225		(2,772,099)		6,901,786
Interest expense		—		—		655,811		655,811
Income (loss) from operations before taxes		8,732,244		256,392		(1,030,801)		7,957,835
Equity method investment earnings, net of tax		—		—		307,973		307,973
Total assets		278,824,259		18,656,853		814,291		298,295,403
Capital expenditures		12,074,922		985,835		—		13,060,757

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	Wholesale		Retail
	Segment		Segment		Other		Consolidated
NINE MONTHS ENDED JUNE 2023
External revenue:
Cigarettes	$	1,161,352,954	$	—	$	—	$	1,161,352,954
Tobacco		339,356,268		—		—		339,356,268
Confectionery		115,820,426		—		—		115,820,426
Health food		—		32,354,992		—		32,354,992
Foodservice & other		198,588,142		—		—		198,588,142
Total external revenue		1,815,117,790		32,354,992		—		1,847,472,782
Depreciation		3,884,128		817,188		—		4,701,316
Amortization		280,752		—		—		280,752
Operating income (loss)		28,934,860		(392,963)		(9,783,740)		18,758,157
Interest expense		—		—		6,249,540		6,249,540
Income (loss) from operations before taxes		28,321,283		514,952		(16,033,281)		12,802,954
Total assets		349,564,773		18,008,597		1,133,985		368,707,355
Capital expenditures		7,499,029		791,468		—		8,290,497


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
NINE MONTHS ENDED JUNE 2022
External revenue:
Cigarettes	$	900,677,466	$	—	$	—	$	900,677,466
Tobacco		229,765,009		—		—		229,765,009
Confectionery		79,691,881		—		—		79,691,881
Health food		—		35,695,298		—		35,695,298
Foodservice & other		119,213,967		—		—		119,213,967
Total external revenue		1,329,348,323		35,695,298		—		1,365,043,621
Depreciation		1,589,102		897,511		—		2,486,613
Amortization		28,355		—		—		28,355
Operating income (loss)		23,174,638		1,448,878		(10,020,703)		14,602,813
Interest expense		—		—		1,222,829		1,222,829
Income (loss) from operations before taxes		22,513,900		1,469,705		(8,790,693)		15,192,912
Equity method investment earnings, net of tax		—		—		1,670,133		1,670,133
Total assets		278,824,259		18,656,853		814,291		298,295,403
Capital expenditures		12,718,606		1,217,373		—		13,935,979

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

BUSINESS UPDATE

Our businesses continue to be impacted by a number of macroeconomic factors including ongoing disruptions to supply chains which have impacted product and equipment availability. These factors, combined with a highly inflationary operating environment, have resulted in cost pressures across both of our business segments as product, labor, fuel, interest and other costs have all increased markedly while at the same time pressuring consumer demand trends.

We continue to closely monitor proposals from governmental and regulatory bodies, including the United States Food and Drug Administration (“FDA”), which are evaluating the possible prohibition and/or limitations on the sale of certain cigarette, tobacco and vaping products, including menthol. If such regulations were to be implemented, they would have a negative impact on the Company’s financial results.

Integration work related to the Company’s recent purchase of Henry’s Foods, Inc. (“Henry’s”) remains ongoing. The acquisition of Henry’s has expanded the Company’s geographic footprint and has provided access to an industry- leading foodservice distribution platform.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections, contains forward-looking statements that are subject to risks and uncertainties and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results. Forward-looking statements include information concerning the possible or assumed future results of operations of the Company and those statements preceded by, followed by or that include the words “future,” “position,” “anticipate(s),” “expect(s),” “believe(s),” “see,” “plan,” “further improve,” “outlook,” “should” or similar expressions. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions.

It should be understood that the following important factors, in addition to those discussed elsewhere in this document, could affect the future results of the Company and could cause those results to differ materially from those expressed in our forward-looking statements:

●

risks associated with higher interest rates and the related impact on profitability and cash flows for both the Company and its customer base, particularly as it relates to variable interest rate borrowings, as well as risk that such borrowings may not be renewed in the future on favorable terms or at all,

●	risks associated with any systemic pressures in the banking system, particularly as they relate to customer credit risk and any resulting impact on our cash flow and our ability to collect on our receivables,

●	risks associated with an inflationary operating environment, particularly as it relates to wages, fuel, interest, and commodity prices, which impact our operating cost structure and could impact food ingredient costs and demand for many of the products we sell,

●

regulations, potential bans and/or litigation related to the manufacturing, distribution, and sale of certain cigarette, tobacco, and vaping products imposed by the FDA, state or local governmental agencies, or other parties, including proposed forthcoming regulations around the manufacture and distribution of certain menthol and flavored tobacco products,

●

risks associated with the threat or occurrence of epidemics or pandemics (such as COVID-19 or its variants) or other public health issues, including the continued health of our employees and management, the reduced demand for our goods and services or increased credit risk from customer credit defaults resulting from an economic downturn,

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●	risks associated with the imposition of governmental orders restricting our operations and the operations of our suppliers and customers, in particular, disruptions to our supply chain or our ability to procure products or fulfill orders due to labor shortages in our warehouse operations,

●	risks associated with the Company’s business model which experienced both higher sales volumes and labor costs during the COVID-19 pandemic, and the risk of sales returning to pre-pandemic levels without the Company being able to offset increases in its cost structure,

●

risks associated with the acquisition of assets, new businesses or equity investments by either of our business segments including, but not limited to, risks associated with consummating such transactions on expected terms or timing, purchase price and business valuation and recording risks, and risks related to the assumption of certain liabilities or obligations,

●	risks associated with the integration of new businesses or equity investments by either of our business segments including, but not limited to, risks associated with vendor and customer retention, technology integration, and the potential loss of any key management personnel or employees,

●	increasing competition and market conditions in our wholesale and retail health food businesses and any associated impact on the carrying value and any potential impairment of assets (including intangible assets) within those businesses,

●	risk that our repositioning strategy for our retail business will not be successful,

●	risks associated with opening new retail stores,

●	if online shopping formats such as Amazon™ continue to grow in popularity and further disrupt traditional sales channels, it may present a significant direct risk to our brick and mortar retail business and potentially to our wholesale distribution business,

●	the potential impact that ongoing, decreasing, or changing trade tariff and trade policies may have on our product costs or on consumer disposable income and demand,

●	increasing product and operational costs resulting from ongoing supply chain disruptions, an intensely competitive labor market with a limited pool of qualified workers, and higher incremental costs associated with the handling and transportation of certain product categories such as foodservice,

●	increases in state and federal excise taxes on cigarette and tobacco products and the potential impact on demand, particularly as it relates to current legislation under consideration which could significantly increase such taxes,

●	risks associated with disruptions to our technology systems or those of third parties upon which we rely, including security breaches, cyber and ransomware attacks, malware, or other methods by which such information systems could or may have been compromised or impacted,

●	increases in inventory carrying costs and customer credit risks,

●	changes in pricing strategies and/or promotional/incentive programs offered by cigarette and tobacco manufacturers,

●	changing demand for the Company’s products, particularly cigarette, tobacco and vaping products,

●	risks that product manufacturers may begin selling directly to convenience stores and bypass wholesale distributors,

●	changes in laws and regulations and ongoing compliance related to health care and associated insurance,

●	increasing health care costs for both the Company and consumers and their potential impact on discretionary consumer spending,

●	decreased availability of capital resources,

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●	domestic regulatory and legislative risks,

●	poor weather conditions, and the adverse effects of climate change,

●	consolidation trends within the convenience store, wholesale distribution, and retail health food industries,

●	natural disasters, domestic/political unrest and incidents of violence, or any restrictions, regulations, or security measures implemented by governmental bodies in response to these items, and

●	other risks over which the Company has little or no control, and any other factors not identified herein.

Changes in these factors could result in significantly different results. Consequently, future results may differ from management’s expectations. Moreover, past financial performance should not be considered a reliable indicator of future performance. Any forward-looking statement contained herein is made as of the date of this document. Except as required by law, the Company undertakes no obligation to publicly update or correct any of these forward-looking statements in the future to reflect changed assumptions, the occurrence of material events or changes in future operating results, financial conditions or business over time.

CRITICAL ACCOUNTING ESTIMATES

Certain accounting estimates used in the preparation of the Company’s condensed consolidated unaudited financial statements (“financial statements”) require us to make judgments and estimates and the financial results we report may vary depending on how we make these judgments and estimates. Our critical accounting estimates are set forth in our annual report on Form 10-K for the fiscal year ended September 30, 2022, as filed with the Securities and Exchange Commission. There have been no significant changes with respect to these estimates and related policies during the nine months ended June 2023.

THIRD FISCAL QUARTER 2023 (Q3 2023)

The following discussion and analysis includes the Company’s results of operations for the three and nine months ended June 2023 and June 2022:

Wholesale Segment

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Retail Segment

Our Retail Segment, through our Healthy Edge Retail Group subsidiary, is a specialty retailer of natural/organic groceries and dietary supplements which focuses on providing high quality products at affordable prices, with an exceptional level of customer service and nutritional consultation. All of the products carried in our stores must meet strict quality and ingredient guidelines, and include offerings such as gluten-free and antibiotic-free groceries and meat products, as well as products containing no artificial colors, flavors, preservatives, or partially hydrogenated oils. We design our retail sites in an efficient and flexible small-store format, which emphasizes a high energy and shopper-friendly environment.

RESULTS OF OPERATIONS – THREE MONTHS ENDED JUNE:


	2023			2022			Incr (Decr)		% Change
CONSOLIDATED:
Sales (1)	$	696,489,427		$	550,584,152		$	145,905,275	26.5
Cost of sales		649,623,651			516,907,540			132,716,111	25.7
Gross profit		46,865,776			33,676,612			13,189,164	39.2
Gross profit percentage		6.7	%		6.1	%

Operating expense	$	38,954,949		$	26,774,826		$	12,180,123	45.5
Operating income		7,910,827			6,901,786			1,009,041	14.6
Interest expense		2,385,842			655,811			1,730,031	263.8
Change in fair value of mandatorily redeemable non-controlling interest		698,571			705,392			(6,821)	(1.0)
Income tax expense		1,813,800			2,221,000			(407,200)	(18.3)
Equity method investment earnings, net of tax		—			307,973			(307,973)	(100.0)
Net income available to common shareholders		3,944,379			6,044,808			(2,100,429)	(34.7)

BUSINESS SEGMENTS:
Wholesale
Sales	$	685,744,319		$	539,233,355		$	146,510,964	27.2
Gross profit		43,093,210			29,442,578			13,650,632	46.4
Gross profit percentage		6.3	%		5.5	%
Retail
Sales	$	10,745,108		$	11,350,797		$	(605,689)	(5.3)
Gross profit		3,772,566			4,234,034			(461,468)	(10.9)
Gross profit percentage		35.1	%		37.3	%

(1)	Sales are reported net of costs associated with incentives provided to retailers. These incentives totaled $10.9 million in Q3 2023 and $9.0 million in Q3 2022.

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SALES

Changes in sales are primarily driven by:

(i)

changes to selling prices, which are largely controlled by our product suppliers, and excise taxes imposed on cigarettes and tobacco products by various states;

(ii)

changes in the volume and mix of products sold to our customers, either due to a change in purchasing patterns resulting from consumer preferences or the fluctuation in the comparable number of business days in our reporting period; and

(iii) acquisitions.

SALES – Q3 2023 vs. Q3 2022

Sales in our Wholesale Segment increased $146.5 million during Q3 2023 as compared to Q3 2022. Significant items impacting sales during Q3 2023 included a $50.3 million increase in comparative sales related to the acquisition of a controlling interest in Team Sledd, LLC (“Team Sledd”) during Q3 2022, a $87.6 million increase in sales related to the acquisition of Henry’s during Q2 2023, a $28.0 million increase in sales related to price increases implemented by cigarette manufacturers, and a $14.4 million increase in sales related to higher sales volumes in our tobacco, confectionery, foodservice, and other categories (“Other Products”), partially offset by a $33.8 million decrease in sales related to the volume and mix of cigarette cartons sold. Sales in our Retail Segment decreased $0.6 million during Q3 2023 as compared to Q3 2022. This decrease was due to approximately $0.7 million related to the temporary closure of our Port Charlotte store due to damage from Hurricane Ian and approximately $0.4 million related to the closure of two stores between the comparative periods, partially offset by a $0.5 million increase related to higher sales volumes in our existing stores.

GROSS PROFIT – Q3 2023 vs. Q3 2022

Our gross profit does not include fulfillment costs and costs related to the distribution network, which are included in selling, general and administrative costs, and may not be comparable to those of other entities. Some entities may classify such costs as a component of cost of sales. Cost of sales, a component used in determining gross profit, for the wholesale and retail segments includes the cost of products purchased from manufacturers, less incentives we receive which are netted against such costs.

Gross profit in our Wholesale Segment increased $13.7 million during Q3 2023 as compared to Q3 2022. Significant items impacting gross profit during Q3 2023 included an $3.0 million increase in comparative gross profit related to the acquisition of a controlling interest in Team Sledd during Q3 2022, a $10.1 million increase in gross profit related to the acquisition of Henry’s in Q2 2023, a $1.1 million increase in gross profit related to higher sales volumes and promotions in our Other Products category, partially offset by a $0.5 million decrease in gross profit due to the timing and related benefits of cigarette manufacturer price increases and the volume and mix of cigarette cartons sold between the comparative periods. Gross profit in our Retail Segment decreased $0.5 million during Q3 2023 as compared to Q3 2022. This change was primarily related to a $0.3 million decrease related to the temporary closure of our Port Charlotte store due to damage from Hurricane Ian, a $0.1 million decrease related to the closure of two stores between the comparative periods and a $0.1 million decrease in realized margins in our existing stores.

OPERATING EXPENSE – Q3 2023 vs. Q3 2022

Operating expense includes selling, general and administrative expenses and depreciation. Selling, general, and administrative expenses primarily consist of costs related to our sales, warehouse, delivery and administrative departments, including purchasing and receiving costs, warehousing costs and costs of picking and loading customer orders. Our most significant expenses relate to costs associated with employees, facility and equipment leases, transportation, fuel, and insurance. Our Q3 2023 operating expenses increased $12.2 million as compared to Q3 2022. Significant items impacting operating expenses during Q3 2023 included a $2.2 million increase in comparative operating expenses related to the acquisition of a controlling interest in Team Sledd during Q3 2022, a $7.5 million increase in operating expenses related to the acquisition of Henry’s during Q2 2023, a $1.2 million increase related to employee compensation and benefit costs, a $0.9 million increase in insurance costs, a $0.6 million increase in other Wholesale Segment operating expenses, a $0.3

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million increase in customer bad debt expense, and a $0.1 million increase in operating expenses in our Retail Segment, partially offset by a $0.6 million decrease in fuel costs.

INTEREST EXPENSE – Q3 2023 vs. Q3 2022

Interest expense increased $1.7 million in Q3 2023 as compared to Q3 2022, primarily related to higher interest rates and higher outstanding debt balances in the current period related to the acquisition of a controlling interest in Team Sledd in Q3 2022 and the acquisition of Henry’s in Q2 2023.

OTHER INCOME – Q3 2023 vs. Q3 2022

The change in other income between the comparative periods was primarily related to a non-cash gain of approximately $2.4 million in the prior year period (Q3 2022) related to the consolidation of Team Sledd, partially offset by an insurance recovery in the current year period.

INCOME TAX EXPENSE – Q3 2023 vs. Q3 2022

The change in the Q3 2023 income tax rate as compared to Q3 2022 was primarily related to non-deductible compensation expense in relation to the amount of income from operations before income tax expense and higher effective state income tax rates between the comparative periods.

RESULTS OF OPERATIONS – NINE MONTHS ENDED JUNE:


	2023			2022			Incr (Decr)		% Change
CONSOLIDATED:
Sales(1)	$	1,847,472,782		$	1,365,043,621		$	482,429,161	35.3
Cost of sales		1,724,504,862			1,277,757,425			446,747,437	35.0
Gross profit		122,967,920			87,286,196			35,681,724	40.9
Gross profit percentage		6.7	%		6.4	%

Operating expense	$	104,209,763		$	72,683,383		$	31,526,380	43.4
Operating income		18,758,157			14,602,813			4,155,344	28.5
Interest expense		6,249,540			1,222,829			5,026,711	411.1
Change in fair value of mandatorily redeemable non-controlling interest		864,684			705,392			159,292	22.6
Income tax expense		4,164,000			4,811,000			(647,000)	(13.4)
Equity method investment earnings, net of tax		—			1,670,133			(1,670,133)	(100.0)
Net income available to common shareholders		8,638,954			12,052,045			(3,413,091)	(28.3)

BUSINESS SEGMENTS:
Wholesale
Sales	$	1,815,117,790		$	1,329,348,323		$	485,769,467	36.5
Gross profit		111,464,919			73,761,372			37,703,547	51.1
Gross profit percentage		6.1	%		5.5	%
Retail
Sales	$	32,354,992		$	35,695,298		$	(3,340,306)	(9.4)
Gross profit		11,503,001			13,524,824			(2,021,823)	(14.9)
Gross profit percentage		35.6	%		37.9	%

(1)	Sales are reported net of costs associated with incentives provided to retailers. These incentives totaled $30.1 million for the nine months ended June 2023 and $24.2 million for the nine months ended June 2022.

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SALES – Nine months ended June 2023

Sales in our Wholesale Segment increased $485.8 million for the nine months ended June 2023 as compared to the same prior year period. Significant items impacting sales during the period included a $362.4 million increase in comparative sales related to the acquisition of a controlling interest in Team Sledd during Q3 2022, a $131.6 million increase in sales related to the acquisition of Henry’s during Q2 2023, a $69.6 million increase in sales related to price increases implemented by cigarette manufacturers and a $32.5 million increase in sales related to higher sales volumes in our Other Products category, partially offset by a $110.3 million decrease in sales related to the volume and mix of cigarette cartons sold. Sales in our Retail Segment decreased $3.3 million for the nine months ended June 2023 as compared to the same prior year period. Significant items impacting sales in our Retail Segment included a decrease of $2.4 million related to the temporary closure of our Port Charlotte store due to damage from Hurricane Ian and a decrease of $1.5 million related to the closure of two stores between the comparative periods, partially offset by a $0.6 million increase related to higher sales volumes in our existing stores.

GROSS PROFIT – Nine months ended June 2023

Gross profit in our Wholesale Segment increased $37.7 million for the nine months ended June 2023 as compared to the same prior year period. Significant items impacting gross profit during the period included a $20.8 million increase in comparative gross profit related to the acquisition of a controlling interest in Team Sledd during Q3 2022, a $14.9 million increase in gross profit related to the acquisition of Henry’s in Q2 2023, a $3.1 million increase in gross profit related to higher sales volumes and promotions in our Other Products category, partially offset by a $1.1 million decrease in the net impact of cigarette manufacturer promotions and the volume and mix of cigarette cartons sold. Gross profit in our Retail Segment decreased $2.0 million for the nine months ended June 2023 as compared to the same prior year period. This change was primarily related to a $0.9 decrease related to the temporary closure of our Port Charlotte store due to damage from Hurricane Ian, a $0.5 million decrease related to the closure of two stores between the comparative periods and a $0.6 million decrease in realized margins in our existing stores.

OPERATING EXPENSE – Nine months ended June 2023

Operating expenses increased $31.5 million during the nine months ended June 2023 as compared to the same prior year period. Significant items impacting operating expenses during the period included a $16.0 million increase in comparative operating expenses related to the acquisition of a controlling interest in Team Sledd during Q3 2022, a $12.1 million increase in operating expenses related to the acquisition of Henry’s during Q2 2023, a $2.4 million increase in other Wholesale Segment operating expenses including employee compensation and benefit costs, and a $1.2 million increase in insurance costs, partially offset by a $0.2 million decrease in our Retail Segment operating expenses.

INTEREST EXPENSE – Nine months ended June 2023

Interest expense increased $5.0 million for the nine months ended June 2023 as compared to the same prior year period, primarily related to higher interest rates and higher outstanding debt balances in the current year period related to the acquisition of a controlling interest in Team Sledd in Q3 2022 and the acquisition of Henry’s in Q2 2023.

OTHER INCOME – Nine months ended June 2023

The change in other income between the comparative periods was primarily related to a non-cash gain of approximately $2.4 million in the nine month period ended June 2022 related to the consolidation of Team Sledd, partially offset by an insurance recovery in the current year period.

INCOME TAX EXPENSE – Nine months ended June 2023

The change in the Company’s effective income tax rate during the nine month period ended June 2023 as compared to the respective prior year period was primarily related to higher non-deductible compensation and higher effective state income tax rates during the current year period.

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LIQUIDITY AND CAPITAL RESOURCES

Overview

The Company’s variability in cash flows from operating activities is dependent on the timing of inventory purchases and seasonal fluctuations. For example, periodically we have inventory “buy-in” opportunities which offer more favorable pricing terms. As a result, we may have to hold inventory for a period longer than the payment terms. This generates a cash outflow from operating activities that we expect to reverse in later periods. Additionally, during our peak time of operations in the warm weather months, we generally carry higher amounts of inventory to ensure high fill rates and customer satisfaction.

At June 2023, the Facilities had a total combined borrowing capacity of $300.0 million, including provisions for up to $30.0 million in credit advances for certain inventory purchases, which are limited by accounts receivable and inventory qualifications, and the value of certain real estate collateral. The Henry’s Facility matures in February 2026, the AMCON Facility matures in June 2027, and the Team Sledd Facility matures in March 2028, each without a penalty for prepayment. Obligations under the Facilities are collateralized by substantially all of the Company’s respective equipment, intangibles, inventories, accounts receivable, and certain real estate. The Facilities each feature an unused commitment fee and springing financial covenants. Borrowings under the Facilities bear interest at either the bank’s prime rate or the Secured Overnight Financing Rate (“SOFR”), plus any applicable spreads.

Cross Default and Co-Terminus Provisions

Dividend Payments

Other

The Company has issued a letter of credit for $0.5 million to its workers’ compensation insurance carrier as part of its self-insured loss control program.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

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Liquidity Risk

The Company’s liquidity position is significantly influenced by its ability to maintain sufficient levels of working capital. For our Company and our industry in general, customer credit risk and ongoing access to bank credit heavily influence liquidity positions.

The Company does not currently hedge its exposure to interest rate risk or fuel costs. Accordingly, significant price movements in these areas can and do impact the Company’s profitability.

While the Company believes its liquidity position going forward will be adequate to sustain operations in both the short- and long-term, a precipitous change in operating environment could materially impact the Company’s future revenue streams as well as its ability to collect on customer accounts receivable or secure bank credit.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act, an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2023 was made under the supervision and with the participation of our senior management, including our principal executive officer and principal financial officer. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures will prevent all errors and fraud. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Further, the design of a control system must reflect the fact that there are resource constraints, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control Over Financial Reporting

Other than the ongoing implementation of internal controls over financial reporting related to the acquisition of Henry’s, there were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended June 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There have been no material changes to the Company’s risk factors as previously disclosed in Item 1A “Risk Factors” of the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

(a) Exhibits



	10.1	Fourth Amendment to Credit Agreement dated April 27, 2023 between Team Sledd, LLC and First National Bank of Pennsylvania

	31.1	Certification by Christopher H. Atayan, Chief Executive Officer and Chairman, pursuant to section 302 of the Sarbanes-Oxley Act

	31.2	Certification by Charles J. Schmaderer, Vice President, Chief Financial Officer and Secretary, pursuant to section 302 of the Sarbanes-Oxley Act

	32.1	Certification by Christopher H. Atayan, Chief Executive Officer and Chairman, furnished pursuant to section 906 of the Sarbanes-Oxley Act

	32.2	Certification by Charles J. Schmaderer, Vice President, Chief Financial Officer and Secretary, furnished pursuant to section 906 of the Sarbanes-Oxley Act

	101	Interactive Data File (filed herewith electronically)

	104	Cover Page Interactive Data File – formatted in Inline XBRL and included as Exhibit 101

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMCON DISTRIBUTING COMPANY
	(registrant)

Date: July 18, 2023	/s/ Christopher H. Atayan
	Christopher H. Atayan,
	Chief Executive Officer and Chairman

Date: July 18, 2023	/s/ Charles J. Schmaderer
	Charles J. Schmaderer,
	Vice President, Chief Financial Officer and Secretary
	(Principal Financial and Accounting Officer)

Exhibit 10.1

FOURTH AMENDMENT TO CREDIT AGREEMENT

This FOURTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of April 27, 2023, to be effective April 27, 2023, is made by and among TEAM SLEDD, LLC, a Delaware limited liability company (the "Borrower"), the financial institutions party hereto (together with their respective successors and assigns, the "Lenders"), and FIRST NATIONAL BANK OF PENNSYLVANIA (in its individual capacity, "FNB"), as administrative agent for the Lenders (in its capacity as "Administrative Agent").

RECITALS

WHEREAS, reference is made to that certain Credit Agreement, dated as of March 27, 2020, by and among the Borrower, the guarantors from time to time party thereto (together with the Borrower, each a "Loan Party" and collectively, the "Loan Parties"), the Lenders from time to time party thereto and the Administrative Agent, as amended by that First Amendment to Credit Agreement dated as of April 9, 2021, as further amended by that Second Amendment to Credit Agreement dated as of October 4, 2021, and as further amended by that Third Amendment to Credit Agreement dated as of October 3, 2022, to be effective as of September 30, 2022 (as may be further amended, restated, amended and restated, modified or supplemented, the "Credit Agreement");

WHEREAS, the applicable parties under the Credit Agreement desire to replace the Loans bearing interest at the London interbank offered rate for U.S. dollars ("LIBOR", and such Loans, "Libor-Rate Loans") with Loans bearing interest at the SOFR Rate Option (as defined in the Credit Agreement after giving effect to this Amendment) (the "SOFR Transition"); and

WHEREAS, the Borrower has requested that the Lenders (i) amend the Credit Agreement to the reflect the SOFR Transition, (ii) extend the Expiration Date, (iii) increase the Commitments, and (iv) make certain other modifications to the Credit Agreement.

NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements hereinafter set forth, and intending to be legally bound hereby, covenant and agree as follows:

AGREEMENT

1.Definitions. All capitalized terms used and not defined herein shall have the meanings given to them in the Credit Agreement and the rules of construction set forth on Schedule One, Part II of the Credit Agreement shall apply to this Amendment.

2.Libor-Rate Loans. Notwithstanding any provision of the Credit Agreement or any other Loan Document to the contrary, from and after the date hereof, whether or not LIBOR is operational or reported or otherwise available in the market as of such date: (a) no new Libor-Rate Loan shall be available, requested or made, and (b) any request for a new Loan as, or to convert an existing Loan to, or to continue an existing Libor-Rate Loan as, a Libor-Rate Loan shall be ineffective.

3.Existing Libor-Rate Loans. All Libor-Rate Loans requested, made and in effect prior to the date hereof shall be converted on the date hereof to Loans based upon the SOFR Rate Option, with all Loans being converted to Loans bearing the SOFR Rate Option. Accrued and unpaid interest and fees for all Loans shall be due and payable by Borrower on the date hereof. No breakage fees shall be payable by any party with respect to Loans that are so converted.

4.Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows:

(a)The Credit Agreement and certain corresponding exhibits and schedules are hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined blue text (indicated textually in the same manner as the following example: double-underlined text) as set forth on the version of the Credit Agreement attached hereto as Exhibit A, which is hereby made a part hereof (the "Composite Credit Agreement").

(b)Exhibit A – Notice of Borrowing, Exhibit B – Borrowing Base Certificate, and Exhibit C – Notice of Continuation/Conversion of the Credit Agreement are hereby amended and restated in their entirety in the forms attached hereto as Exhibit B, respectively.

(c)Schedules 5.05, 5.13, and 11.13 of the Credit Agreement are hereby amended and restated in their entirety in the forms attached hereto as Exhibit C, respectively.

(d)Schedule A of the Patent, Trademark and Copyright Security Agreement is hereby amended and restated in its entirety in the form attached hereto as Exhibit D.

5.Conditions of Effectiveness. The effectiveness of this Amendment is expressly conditioned upon satisfaction of each of the following conditions precedent:

(a)Execution and Delivery. Each Loan Party and each Lender shall have executed and delivered to the Administrative Agent and each Lender this Amendment. The Borrower shall have executed and delivered to FNB an amended and restated Revolving Credit Note in favor of FNB.

(b)No Violation of Laws, No Actions or Proceedings. The execution of this Amendment shall not contravene any law applicable to any Loan Party, the Administrative Agent or any Lender. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of this Amendment or the consummation of the transactions contemplated hereby, which in the Administrative Agent's sole discretion, would make it inadvisable to consummate the transactions contemplated by this Amendment, or any of the other Loan Documents.

(c)Legal Details; Counterparts. All legal details and proceedings in connection with the transactions contemplated by this Amendment shall be in form and substance satisfactory to the Administrative Agent and the Lenders; the Administrative Agent shall have received from each Loan Party and all Lenders an executed original of this Amendment; and the Administrative Agent shall have received all such other counterpart originals or certified or other copies of such documents and proceedings in connection with such transactions, in form and substance satisfactory to the Administrative Agent and the Lenders. If an executed original signature page is not delivered on or before the Fourth Amendment Effective Date, the Loan Parties covenant to deliver such original not later than the fifth (5th) Business Day thereafter.

(d)Secretary's Certificates. There shall be delivered to the Administrative Agent a certificate dated as of the Fourth Amendment Effective Date and signed by a Responsible Officer of each of the Loan Parties, certifying as appropriate as to: (i) all action taken by such Loan Party in connection with this Amendment, the Agreement and the other Loan Documents; (ii) the names of the Responsible Officers authorized to sign this Amendment and their true signatures; and (iii) copies of its Organization Documents as in effect on the Fourth Amendment Effective Date certified by the appropriate state official where such documents are filed in a state office. Each Loan Party shall also deliver certificates from the appropriate state officials as to the continued existence and good standing of each Loan Party in each state where organized or qualified to do business.

(e)Lien Searches. The Administrative Agent shall have received lien searches in acceptable scope and with acceptable results.

(f)Closing Agenda. The Administrative Agent shall have received all items set forth on the closing agenda, a copy of which was provided by the Administrative Agent to the Borrower with respect to this Amendment.

(g)Other. There shall be delivered to the Administrative Agent such other documents in connection with this Amendment as the Administrative Agent or its counsel may reasonably request.

6.Fees and Expenses. The Borrower shall pay or cause to be paid (a) to the Administrative Agent, an amendment fee equal to $25,000, and (b) the reasonable costs and expenses of the Administrative Agent and the Lenders and the reasonable fees of the Administrative Agent's counsel in connection with this Amendment.

7.Representations and Warranties; No Defaults. The Loan Parties, by executing this Amendment, hereby certify and confirm, on a joint and several basis, that as of the date hereof and after giving effect to this Amendment: (a) the execution, delivery and performance of this Amendment and any and all other documents executed and/or delivered in connection herewith have been authorized by all requisite action on the part of such Loan Party and will not violate such Loan Party's Organization Documents, the JV Documents or the AMCON Loan Documents, as applicable; (b) the representations and warranties of such Loan Party contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on the date hereof with the same effect as though such representations and warranties had been made on and as of such date (except representations and warranties which relate solely to an earlier date or time, which representations and warranties shall be true and correct in all material respects on and as of the specific dates or times referred to therein); (c) no Event of Default or Potential Default under the Credit Agreement has occurred and is continuing or exists which will not be cured or expressly waived hereunder by the execution and effectiveness of this Amendment; and (d) the Credit Agreement (as amended by this Amendment), the AMCON Subordination Agreement, the FNB Intercreditor Agreement and all other Loan Documents are and remain legal, valid, binding and enforceable obligations in accordance with the terms thereof, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors' rights generally and to general principles of equity.

8.Consents and Approvals. The Loan Parties represent and warrant that, to the extent any consent, approval, order or authorization or registration, declaration or filing with any governmental authority or other person or legal entity is required in connection with the valid execution and delivery by any Loan Party of this Amendment or the carrying out or performance of any of the transactions required or contemplated by this Amendment, all such consents, approvals, orders or authorizations shall have been obtained or all such registrations, declarations or filings shall have been accomplished prior to the consummation of this Amendment.

9.Effect of Amendment. Except as provided in this Amendment, all of the terms and conditions of the Credit Agreement shall remain in full force and effect.

10.Counterparts. This Amendment may be executed in counterparts, each of which when so executed shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument, and delivery of executed signature pages hereof by telecopy or other electronic transmission from one party to another shall constitute effective and binding execution and delivery, respectively, of this Amendment by such party.

11.Force and Effect. Except as expressly modified by this Amendment, the Credit Agreement, the Intercreditor Agreement and the other Loan Documents are hereby ratified and confirmed by each Loan Party and shall remain in full force and effect after the date hereof. The parties hereto do not amend or waive any provisions of the Credit Agreement, the Intercreditor Agreement or any of the other Loan Documents except as expressly set forth herein. Each of the Administrative Agent and the Lenders expressly reserves any and all rights and remedies available to it under the Credit Agreement (except solely to the extent expressly waived hereby), the Intercreditor Agreement, the other Loan Documents, or any other agreement, or at law or in equity, or otherwise; and, except as expressly provided herein, no other waiver, consent, or amendment is made or implied hereby.

12.Governing Law. This Amendment shall be construed in accordance with the internal laws of the Commonwealth of Pennsylvania without giving effect to its conflict of laws principles including matters of construction, performance and enforcement.

13.Release; Indemnification.

(a)Release. In further consideration of the Administrative Agent's and the Lenders' execution of this Amendment, each Loan Party, individually and on behalf of its respective successors (including any trustees acting on behalf of such Loan Party, and any debtor-in-possession with respect to such Loan Party), assigns, subsidiaries and affiliates, hereby forever releases the Administrative Agent and each Lender and their respective successors, assigns, parents, subsidiaries, and affiliates and their respective officers, employees, directors, agents and attorneys (collectively, the "Releasees") from any and all debts, claims, demands, liabilities, responsibilities, disputes, causes, damages, actions and causes of actions (whether at law or in equity), and obligations of every nature whatsoever, whether liquidated or unliquidated, whether matured or unmatured, whether fixed or contingent that such Loan Party has or may have against the Releasees, or any of them, which arise from or relate to any actions which the Releasees, or any of them, have or may have taken or omitted to take in connection with the Credit Agreement or the other Loan Documents prior to the Fourth Amendment Effective Date (including with respect to the Obligations, any Collateral and any third parties liable in whole or in part for the Obligations). This provision shall survive and continue in full force and effect whether or not the Loan Parties shall satisfy all other provisions of the Credit Agreement (as amended or modified by this Amendment) or the other Loan Documents.

(b)Related Indemnity. Each Loan Party hereby agrees that its release of the Releasees set forth in Section 13(a) shall include an obligation to indemnify and hold the Releasees, or any of them, harmless with respect to any and all liabilities, obligations, losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as a result of or arising from or relating to any proceeding by, or on behalf of any Person, including officers, directors, agents, trustees, creditors, partners or shareholders of such Loan Party or any parent, subsidiary or affiliate of such Loan Party, whether threatened or initiated, asserting any claim for legal or equitable remedy under any statutes, regulation, common law principle or otherwise arising from or in connection with the negotiation, preparation, execution, delivery, performance, administration and enforcement of this Amendment or any other document executed in connection herewith; provided, that no Loan Party shall be liable for any indemnification to a Releasee to the extent that any such liability, obligation, loss, penalty, action, judgment, suit, cost, expense or disbursement results from the applicable Releasee's bad faith, gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction. The foregoing indemnity shall survive the payment in full of the Obligations and the termination of the Credit Agreement (as amended by this Amendment) and the other Loan Documents.

14.Amendment as Loan Document. The parties hereto acknowledge and agree that this Amendment constitutes a Loan Document.

[SIGNATURE PAGES FOLLOW]

[SIGNATURE PAGE TO Fourth AMENDMENT TO CREDIT AGREEMENT]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written to be effective on the Fourth Amendment Effective Date with the intention that this Amendment shall constitute a sealed instrument.

BORROWER:

TEAM SLEDD, LLC,

a Delaware limited liability company

By: /s/ S. Randall Emanuelson (SEAL)
Name: S. Randall Emanuelson
Title:Vice President

[SIGNATURE PAGE TO Fourth AMENDMENT TO CREDIT AGREEMENT]

ADMINISTRATIVE AGENT AND LENDER:

FIRST NATIONAL BANK OF PENNSYLVANIA,
as Administrative Agent and as a Lender

By: /s/ Paul Palacios
Name:Paul Palacios
Title: Vice President

EXHIBIT A –Fourth Amendment to Credit Agreement

CREDIT AGREEMENT

DATED MARCH 27, 2020

BY AND AMONG

TEAM SLEDD, LLC,
as the Borrower

AND

THE GUARANTORS PARTY HERETO

AND

THE LENDERS PARTY HERETO

AND

FIRST NATIONAL BANK OF PENNSYLVANIA, as the Administrative Agent

As amended by that:
First Amendment to Credit Agreement dated as of April 9, 2021
Second Amendment to Credit Agreement dated as of October 4, 2021
Third Amendment to Credit Agreement dated as of October 3, 2022, effective as of September 30, 2022
Fourth Amendment to Credit Agreement dated as of April 27, 2023, effective as of April 27, 2023

TABLE OF CONTENTS

Article I DEFINITIONS AND INTERPRETATIONS‌1

Section 1.01 Defined Terms and Interpretations.‌1

Section 1.02 Accounting Matters; Changes in GAAP.‌1

Section 1.03 Conflict in Loan Documents.‌2

Section 1.04 Legal Representation of Parties.‌2

Section 1.05 Benchmark Replacement Notification.‌2

Article II THE CREDIT FACILITIES.‌2

Section 2.01 Revolving Credit Loans.‌2

Section 2.02 The Revolving Credit Note.‌2

Section 2.03 Repayment of the Revolving Credit Loans; Nature of Lenders' Obligations with respect to Revolving Credit Loans.‌2

Section 2.04 Voluntary Reduction of the Revolving Credit Commitment.‌3

Section 2.05 Borrowing Procedures for Loans.‌4

Section 2.06 Unused Revolving Credit Commitment Fee.‌6

Section 2.07 Payments.‌6

Section 2.08 Administrative Agent's Records.‌7

Section 2.09 Letter of Credit Subfacility.‌8

Section 2.10 Issuance, Amendment and Renewal of Letters of Credit.‌9

Section 2.11 Drawings and Reimbursements.‌11

Section 2.12 Role of the Issuing Lender.‌12

Section 2.13 Obligations Absolute.‌13

Section 2.14 Cash Collateral.‌14

Section 2.15 Letter of Credit Fees; Indemnity.‌15

Section 2.16 Defaulting Lenders.‌15

Section 2.17 Pro Rata Treatment of Lenders.‌17

Section 2.18 Sharing of Payments by Lenders.‌17

Section 2.19 Presumptions by Administrative Agent.‌18

Section 2.20 Additional Payments.‌18

Article III INTEREST AND GENERAL LOAN PROVISIONS‌18

Section 3.01 Interest.‌18

Section 3.02 Continuation and Conversion of Loans.‌20

Section 3.03 Prepayments.‌21

Section 3.04 Rate Unascertainable; Increased Costs; Illegality.‌23

Section 3.05 Benchmark Replacement Setting.‌24

Section 3.06 Increased Costs.‌26

Section 3.07 Taxes.‌27

Section 3.08 Indemnity.‌31

Section 3.09 Survival.‌31

Section 3.10 Security.‌32

Article IV CONDITIONS OF LENDING‌32

Section 4.01 Initial Conditions.‌32

Section 4.02 Subsequent Conditions.‌33

Article V REPRESENTATIONS AND WARRANTIES‌34

Section 5.01 Organization, Subsidiaries and Authority.‌34

Section 5.02 Consent.‌35

Section 5.03 Litigation.‌35

Section 5.04 Financial Statements and Solvency.‌35

Section 5.05 Ownership and Management.‌36

Section 5.06 Adverse Occurrences.‌36

Section 5.07 Indebtedness.‌36

Section 5.08 Information.‌36

Section 5.09 Assets, Liens and Insurance.‌36

Section 5.10 Contractual Obligations.‌37

Section 5.11 Taxes.‌37

Section 5.12 Margin Stock; Investment Company.‌37

Section 5.13 Intellectual Property Rights.‌38

Section 5.14 Environmental Laws.‌38

Section 5.15 Collateral Documents.‌39

Section 5.16 Bankruptcy; Insolvency.‌39

Section 5.17 Compliance with Laws.‌39

Section 5.18 Locations.‌39

Section 5.19 ERISA Plans.‌40

Section 5.20 Eligible Accounts.‌40

Section 5.21 Eligible Inventory.‌40

Section 5.22 Eligible Cigarette Inventory.‌40

Section 5.23 Business Operations.‌41

Section 5.24 Labor Relations.‌41

Section 5.25 Contemporaneous Exchange.‌41

Section 5.26 Disclosure.‌41

Section 5.27 Anti-Terrorism Laws.‌41

Section 5.28 Updates to Schedules.‌42

Section 5.29 Certificate of Beneficial Ownership.‌42

Section 5.30 [Reserved].‌42

Article VI AFFIRMATIVE COVENANTS‌42

Section 6.01 Use of Proceeds.‌42

Section 6.02 Financial Information and Compliance Certificates.‌42

Section 6.03 Books and Records; Visitation; Collateral Examinations and Monitoring Fee.‌44

Section 6.04 Compliance with Laws.‌45

Section 6.05 Notices.‌45

Section 6.06 Insurance.‌47

Section 6.07 Taxes.‌48

Section 6.08 ERISA Compliance.‌48

Section 6.09 Maintenance of Properties.‌48

Section 6.10 Maintenance of Existence.‌48

Section 6.11 Environmental Matters.‌49

Section 6.12 Reimbursable Costs and Expenses.‌50

Section 6.13 Cash Management System; Borrower's Account.‌50

Section 6.14 Payment of Liabilities.‌51

Section 6.15 True Disclosures.‌51

Section 6.16 Security Interests.‌52

Section 6.17 Further Assurances.‌53

Section 6.18 Keepwell.‌53

Section 6.19 Anti-Terrorism Laws; International Trade Compliance.‌54

Section 6.20 Certificates of Beneficial Ownership; Other Additional Information.‌54

Section 6.21 AMCON Transactions.‌54

Article VII NEGATIVE COVENANTS‌55

Section 7.01 Financial Covenants‌55

Section 7.02 Fundamental Changes.‌55

Section 7.03 Restricted Payments.‌56

Section 7.04 Indebtedness.‌56

Section 7.05 Liquidations, Mergers, Consolidations.‌56

Section 7.06 Investments, Acquisitions, Loans and Advances.‌57

Section 7.07 Liens.‌57

Section 7.08 Affiliated Transactions.‌59

Section 7.09 Business and Accounting Changes.‌59

Section 7.10 Documents.‌59

Section 7.11 Hazardous Materials.‌59

Section 7.12 Disposition of Assets.‌59

Section 7.13 Guarantees.‌60

Section 7.14 Rentals.‌60

Section 7.15 ERISA Compliance.‌60

Section 7.16 Changes in Organization Documents or JV Documents.‌60

Section 7.17 Subsidiaries, Partnerships and Joint Ventures.‌60

Section 7.18 Negative Pledge.‌61

Article VIII EVENTS OF DEFAULT‌61

Section 8.01 Failure to Make Payments.‌61

Section 8.02 Representations and Warranties.‌61

Section 8.03 Covenants and Agreements.‌61

Section 8.04 Defaults on Other Obligations.‌62

Section 8.05 Insolvency and Other Related Events.‌62

Section 8.06 Final Judgments.‌62

Section 8.07 Execution on Properties.‌62

Section 8.08 ERISA Events.‌63

Section 8.09 Suspension of Operations.‌63

Section 8.10 The Collateral.‌63

Section 8.11 Termination of Loan Documents.‌63

Section 8.12 Criminal Activities.‌63

iii

Section 8.13 Change of Control.‌63

Section 8.14 Anti-Terrorism Laws.‌64

Section 8.15 Default on Other Indebtedness.‌64

Section 8.16 Cure.‌64

Article IX REMEDIES‌65

Section 9.01 Rights of the Administrative Agent and the Lenders Upon Default.‌65

Section 9.02 Cumulative Remedies.‌66

Section 9.03 Waiver of Right to Marshal.‌67

Section 9.04 Application of Proceeds.‌67

Article X ADMINISTRATIVE AGENT‌68

Section 10.01 Appointment and Authority.‌68

Section 10.02 Rights as a Lender.‌68

Section 10.03 Exculpatory Provisions.‌68

Section 10.04 Reliance by Administrative Agent.‌69

Section 10.05 Delegation of Duties.‌70

Section 10.06 Resignation of Administrative Agent.‌70

Section 10.07 Non-Reliance on Administrative Agent and Other Lenders.‌71

Section 10.08 Authorization to Release Collateral and Guarantors.‌71

Section 10.09 No Reliance on Administrative Agent's Customer Identification Program.‌72

Section 10.10 National Flood Insurance Reform Act of 1994.‌72

Section 10.11 Erroneous Payments.‌72

Article XI MISCELLANEOUS‌74

Section 11.01 Automatic Debits of Fees.‌74

Section 11.02 Rights in Property held by the Administrative Agent.‌75

Section 11.03 Collateral.‌75

Section 11.04 No Third Party Rights.‌75

Section 11.05 Construction.‌75

Section 11.06 Waiver.‌75

Section 11.07 Indemnification by the Loan Parties.‌75

Section 11.08 Marshaling; Payments Set Aside.‌77

Section 11.09 Waiver of Jury Trial.‌77

Section 11.10 Consent to Jurisdiction.‌77

Section 11.11 Survival.‌78

Section 11.12 Disclosure of Information.‌78

Section 11.13 Notices.‌78

Section 11.14 Limitation of Liability.‌79

Section 11.15 Sale and Participation.‌79

Section 11.16 Applicable Law.‌81

Section 11.17 Binding Effect and Assignment.‌81

Section 11.18 Counterparts.‌81

Section 11.19 Headings.‌81

Section 11.20 Severability.‌82

Section 11.21 Entire Agreement.‌82

Section 11.22 Sealed Document.‌82

Section 11.23 Modifications, Amendments or Waivers.‌82

Section 11.24 Reimbursement by Lenders.‌83

Section 11.25 Assignments by Lenders.‌84

Section 11.26 Register.‌85

Section 11.27 Payments.‌85

Section 11.28 Holidays.‌85

Section 11.29 USA Patriot Act Notice.‌86

Section 11.30 No Advisory or Fiduciary Responsibility.‌86

Section 11.31 Acknowledgement and Consent to Bail-In of Affected Financial Institutions.‌87

Section 11.32 Certain ERISA Matters.‌87

SCHEDULES AND EXHIBITS

EXHIBITS

Exhibit ANotice of Borrowing

Exhibit BBorrowing Base Certificate

Exhibit CNotice of Continuation/Conversion

Exhibit DMonthly Collateral Recap

Exhibit EAccounts Receivable Reconciliation

Exhibit FApplicable Margins

Exhibit GCompliance Certificate

Exhibit HForm of Assignment and Assumption Agreement

Exhibit IForm of Collateral Assignment of Contracts

Exhibit JReserved

Exhibit KForm of Indemnity Agreement

Exhibit LForm of East Cove Property (68 and 100) Deed of Trust

Exhibit MForm of Patent, Trademark and Copyright Security Agreement

Exhibit NForm of Revolving Credit Note

Exhibit OForm of Security Agreement

Exhibit P(1)

U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Exhibit P(2)

U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Exhibit P(3)

U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Exhibit P(4)

U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Exhibit QForm of East Cove Property (70) Deed of Trust

Exhibit R

Officer's Certificate (Annual Financial Statement)

SCHEDULES

ScheduleOneDefinitions

ScheduleTwoConditions Precedent

Schedule ThreeCommitments of Lenders

Schedule5.01Organization, Subsidiaries and Authority

Schedule5.03Litigation

Schedule5.05Ownership

Schedule5.09Assets and Insurance

Schedule5.13Intellectual Property Rights

Schedule5.14Environmental Matters

Schedule5.15Filing Offices

Schedule5.18Locations

Schedule5.19ERISA Plans

Schedule5.20Eligible Accounts

Schedule6.01Use of Proceeds

Schedule7.04Permitted Indebtedness

Schedule7.06Investments

Schedule7.07Permitted Liens

Schedule7.08Affiliate Transactions

Schedule7.13Guarantees

Schedule7.14Rentals

Schedule11.13Notices

vii

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this "Agreement"), made effective as of the 27^th day of March, 2020, is by and among TEAM SLEDD, LLC, a Delaware limited liability company (the "Borrower"), the GUARANTORS (as hereinafter defined) from time to time party hereto, the LENDERS (as hereinafter defined) from time to time party hereto, and FIRST NATIONAL BANK OF PENNSYLVANIA, as administrative agent for the Lenders under this Agreement (in such capacity, the "Administrative Agent").

WITNESSETH:

WHEREAS, the Borrower has requested the Lenders make available to it a revolving credit facility, and the Lenders are willing to make such credit facilities available to the Borrower upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and intending to be legally bound hereby, the parties hereto covenant and agree as follows:

Article I DEFINITIONS AND INTERPRETATIONS

Section 1.01 Defined Terms and Interpretations. In addition to other words and terms defined elsewhere in this Agreement (including the preamble), when used in this Agreement and in the exhibits and schedules to this Agreement, the capitalized words and terms set forth in Schedule One attached hereto and incorporated herein by reference thereto shall have the meanings set forth in Part I of Schedule One unless otherwise defined herein or the context otherwise clearly requires. In addition, the provisions of Part II of Schedule One shall, unless otherwise specified in this Agreement, apply to the interpretation of the words and terms used herein.

Section 1.02 Accounting Matters; Changes in GAAP. (a) For purposes of this Agreement and each of the other Loan Documents, all accounting and financial terms used herein or therein shall be interpreted, all accounting determinations and computations hereunder or thereunder shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared, in accordance with GAAP.

(b)In the event that any accounting changes relating to GAAP or other accounting principles and policies occur after the Closing Date and such changes result in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Loan Parties, the Lenders and the Administrative Agent agree to enter into good-faith negotiations in order to amend such provisions of this Agreement to compensate for the effect of such changes so that the restrictions, limitations and performance standards effectively imposed by such covenants, as so amended, are substantially identical to the restrictions, limitations and performance standards imposed by such covenants as in effect on the Closing Date, subject to the approval of the Required Lenders, provided, if the parties are unable to agree on an amendment within a reasonable period of time, then calculation of compliance by the Loan Parties with the covenants contained in this Agreement shall be determined in accordance with GAAP as in effect immediately prior to such change.

Section 1.03 Conflict in Loan Documents. If there is any conflict between this Agreement and any other Loan Document, this Agreement and such other Loan Document shall be interpreted and construed, if possible, so as to avoid or minimize such conflict but, to the extent (and only to the extent) of such conflict, this Agreement shall prevail and control.

Section 1.04 Legal Representation of Parties. This Agreement and the other Loan Documents were negotiated by the parties with the benefit of legal representation and any rule of construction or interpretation otherwise requiring this Agreement or any other Loan Document to be construed or interpreted against any party shall not apply to any construction or interpretation hereof or thereof.

Section 1.05 Benchmark Replacement Notification. Section 3.05 of this Agreement provides a mechanism for determining an alternative rate of interest in the event that Term SOFR is no longer available or in certain other circumstances. The Administrative Agent does not warrant or accept any responsibility for and shall not have any liability with respect to, the administration, submission or any other matter related to Term SOFR or with respect to any alternative or successor rate thereto, or replacement rate therefor.

Article IITHE CREDIT FACILITIES.

Section 2.01 Revolving Credit Loans. Subject to the conditions and on the terms set forth in this Agreement, and in reliance upon the representations and warranties of the Loan Parties contained in Article V, each Lender severally agrees to make revolving credit loans to the Borrower (each of such loans being a "Revolving Credit Loan" and collectively being the "Revolving Credit Loans") from time to time on any Business Day during the period from the Closing Date up to the Expiration Date, provided, however, (a) the Total Credit Availability shall not at any time be less than zero, (b) Revolving Credit Availability shall not at any time be less than zero, and (c) Cigarette Buy-In Availability shall not at any time be less than zero. If the Total Credit Availability shall at any time be less than zero, then the Borrower shall immediately repay to the Administrative Agent for the account of the Lenders’ Revolving Credit Loans in an amount as may be necessary to ensure that Total Credit Availability is greater than or equal to zero. Subject to the foregoing limitations and the other terms and provisions of this Agreement, the Borrower may, from time to time, borrow, repay and reborrow Revolving Credit Loans. Notwithstanding anything to the contrary contained herein, during a Cigarette Buy-In Election Period, Revolving Credit Loans shall first be deemed to be allocated as Cigarette Buy-In Loans in an amount equal to the lesser of (x) total Revolving Credit Loans outstanding, (y) the Cigarette Buy-In Credit Commitment and (z) the Cigarette Buy-In Borrowing Base.

Section 2.02 The Revolving Credit Note. The Revolving Credit Loans shall be evidenced by the Revolving Credit Note, appropriately completed, dated the Closing Date and signed by the Borrower. Interest shall accrue on the outstanding principal balance of the Revolving Credit Loans at the rates and on the terms specified in Article III.

Section 2.03 Repayment of the Revolving Credit Loans; Nature of Lenders' Obligations with respect to Revolving Credit Loans. (a) Commencing on the Closing Date, interest accrued on the Revolving Credit Loans shall be due and payable in monthly installments, as set forth in more detail herein. The aggregate outstanding principal amount of the

Revolving Credit Loans and all accrued and unpaid interest and other charges thereon shall be due and payable in full on the Expiration Date (if not sooner paid as provided for in the Loan Documents), without demand or notice of any kind whatsoever. Borrower shall repay in full the outstanding principal amount of the Revolving Credit Loans together with all outstanding interest thereon and all fees and other amounts owing under any of the Loan Documents relating thereto on the Expiration Date or upon the earlier termination of the Commitments in connection with the terms of this Agreement. No Lender shall have further obligation to make Revolving Credit Loans from and after the Expiration Date. So long as no Event of Default has occurred and is continuing, the Administrative Agent will credit toward payment of the aggregate outstanding principal amount of the Revolving Credit Loans all Collections and Remittances received through the lockbox and cash management system established and maintained pursuant to the terms and conditions of the Security Agreement.

(b)Each Lender shall be obligated to participate in each request for Revolving Credit Loans pursuant to Section 2.05 in accordance with its Ratable Share. The aggregate of each Lender's Revolving Credit Loans outstanding hereunder to the Borrower at any time shall never exceed its Commitment minus its Ratable Share of the L/C Obligations. The obligations of each Lender hereunder are several. The failure of any Lender to perform its obligations hereunder shall not affect the Obligations of the Borrower to any other party nor shall any other party be liable for the failure of such Lender to perform its obligations hereunder.

(c)The Borrower recognizes that the amounts evidenced by checks, notes, drafts or any other items of payment relating to and/or proceeds of Collateral may not be collectible by the Administrative Agent on the date received. In consideration of Administrative Agent's agreement to conditionally credit Borrower's Account as of the Business Day on which the Administrative Agent receives those items of payment, Borrower agrees that, in computing the charges under this Agreement, all items of payment shall be deemed applied by the Administrative Agent on account of the Obligations on the Business Day after (i) the Business Day the Administrative Agent receives such payments via wire transfer or electronic depository check or (ii) in the case of payments received by the Administrative Agent in any other form, the Business Day such payment constitutes good funds in the Administrative Agent's account. In addition, the Borrower shall at all times maintain a balance in the Borrower's Account equal to or in excess of the Float Reserve. The Administrative Agent is not, however, required to credit Borrower's Account for the amount of any item of payment which is unsatisfactory to the Administrative Agent and the Administrative Agent may charge Borrower's Account for the amount of any item of payment which is returned to the Administrative Agent unpaid. The blocked account maintained with the Administrative Agent (pursuant to Section 6.13) will be cleared by the Administrative Agent daily as to funds in excess of the Float Reserve, and such funds will be applied to the principal balance of and accrued interest on the Revolving Credit Loans, at the election of the Administrative Agent.

Section 2.04 Voluntary Reduction of the Revolving Credit Commitment. The Borrower may from time to time upon not less than five (5) Business Days prior written notice to the Administrative Agent, permanently reduce the Revolving Credit Commitment (ratably among the Lenders in proportion to their Ratable Shares) provided that (i) any such reductions shall be in a minimum amount of One Million Dollars ($1,000,000.00) and integral multiples of Five Hundred Thousand Dollars ($500,000.00) in excess of such amount, and

Exhibit 31.1

CERTIFICATION

I, Christopher H. Atayan, certify that:

1. I have reviewed this report on Form 10-Q of AMCON Distributing Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants’ fiscal fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July
Date: July 18, 2023	/s/ Christopher H. Atayan
	Christopher H. Atayan,
	Chief Executive Officer and Chairman

Exhibit 31.2

CERTIFICATION

I, Charles J. Schmaderer, certify that:

1. I have reviewed this report on Form 10-Q of AMCON Distributing Company;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 18, 2023

/s/ Charles J. Schmaderer

Charles J. Schmaderer,

Vice President, Chief Financial Officer and Secretary

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q (the “Report”) of AMCON Distributing Company (the “Company”) for the fiscal quarter ended June 30, 2023, I, Christopher H. Atayan, Chief Executive Officer and Principal Executive Officer of the Company, hereby certify that, to the best of my knowledge and belief:

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Ju
Date: July 18, 2023	/s/ Christopher H. Atayan
	Christopher H. Atayan
	Title: Chief Executive Officer and Chairman

A signed original of this written statement required by Section 906 has been provided to AMCON Distributing Company and will be retained by AMCON Distributing Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q (the “Report”) of AMCON Distributing Company (the “Company”) for the fiscal quarter ended June 30, 2023, I, Charles J. Schmaderer, Vice President, Chief Financial Officer and Secretary of the Company, hereby certify that, to the best of my knowledge and belief:

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 18, 2023	/s/ Charles J. Schmaderer
	Charles J. Schmaderer
	Title: Vice President, Chief Financial Officer and Secretary

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Jun. 30, 2023	Jul. 17, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	1-15589
Entity Registrant Name	AMCON DISTRIBUTING CO
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-0702918
Entity Address, Address Line One	7405 Irvington Road
Entity Address, City or Town	Omaha
Entity Address, State or Province	NE
Entity Address, Postal Zip Code	68122
City Area Code	402
Local Phone Number	331-3727
Title of 12(b) Security	Common Stock, $0.01 Par Value
Trading Symbol	DIT
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		608,689
Entity Central Index Key	0000928465
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Current assets:
Cash	$ 739,013	$ 431,576
Accounts receivable, less allowance for doubtful accounts of $2.5 million at both June 2023 and September 2022	78,640,187	62,367,888
Inventories, net	162,567,117	134,654,637
Income taxes receivable		819,595
Prepaid expenses and other current assets	13,630,317	12,702,084
Total current assets	255,576,634	210,975,780
Property and equipment, net	78,872,876	48,085,520
Operating lease right-of-use assets, net	19,739,321	19,941,009
Goodwill	5,778,325	5,277,950
Other intangible assets, net	5,419,361	2,093,113
Other assets	3,320,838	2,751,155
Total assets	368,707,355	289,124,527
Current liabilities:
Accounts payable	51,853,159	39,962,363
Accrued expenses	15,960,945	14,446,210
Accrued wages, salaries and bonuses	7,799,903	7,811,207
Income taxes payable	752,658
Current operating lease liabilities	6,300,102	6,454,473
Current maturities of long-term debt	2,738,524	1,595,309
Current mandatorily redeemable non-controlling interest	1,641,612	1,712,095
Total current liabilities	87,046,903	71,981,657
Credit facilities	143,375,961	91,262,438
Deferred income tax liability, net	3,138,204	2,328,588
Long-term operating lease liabilities	13,737,167	13,787,721
Long-term debt, less current maturities	12,229,486	7,384,260
Mandatorily redeemable non-controlling interest, less current portion	7,976,499	9,446,460
Other long-term liabilities	289,672	103,968
Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized
Common stock, $.01 par value, 3,000,000 shares authorized, 608,689 shares outstanding at June 2023 and 584,789 shares outstanding at September 2022	9,431	9,168
Additional paid-in capital	30,175,977	26,903,201
Retained earnings	102,000,218	96,784,353
Treasury stock at cost	(31,272,163)	(30,867,287)
Total shareholders' equity	100,913,463	92,829,435
Total liabilities and shareholders' equity	$ 368,707,355	$ 289,124,527

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2023	Sep. 30, 2022
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 2.5	$ 2.5
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	3,000,000	3,000,000
Common stock, shares outstanding (in shares)	608,689	584,789

Condensed Consolidated Unaudited Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Condensed Consolidated Unaudited Statements of Operations
Sales (including excise taxes of $153.7 million and $129.2 million, and $414.9 million and $315.5 million, respectively)	$ 696,489,427	$ 550,584,152	$ 1,847,472,782	$ 1,365,043,621
Cost of sales	649,623,651	516,907,540	1,724,504,862	1,277,757,425
Gross profit	46,865,776	33,676,612	122,967,920	87,286,196
Selling, general and administrative expenses	36,851,520	25,862,325	99,227,695	70,168,415
Depreciation and amortization	2,103,429	912,501	4,982,068	2,514,968
Total operating expenses	38,954,949	26,774,826	104,209,763	72,683,383
Operating income	7,910,827	6,901,786	18,758,157	14,602,813
Other expense (income):
Interest expense	2,385,842	655,811	6,249,540	1,222,829
Change in fair value of mandatorily redeemable non-controlling interest	698,571	705,392	864,684	705,392
Other (income), net	(931,765)	(2,417,252)	(1,159,021)	(2,518,320)
Total other expenses (income)	2,152,648	(1,056,049)	5,955,203	(590,099)
Income from operations before income taxes	5,758,179	7,957,835	12,802,954	15,192,912
Income tax expense	1,813,800	2,221,000	4,164,000	4,811,000
Equity method investment earnings, net of tax		307,973		1,670,133
Net income available to common shareholders	$ 3,944,379	$ 6,044,808	$ 8,638,954	$ 12,052,045
Basic earnings per share available to common shareholders	$ 6.74	$ 10.61	$ 14.78	$ 21.25
Diluted earnings per share available to common shareholders	$ 6.59	$ 10.38	$ 14.56	$ 20.72
Basic weighted average shares outstanding	585,625	569,689	584,359	567,026
Diluted weighted average shares outstanding	598,590	582,370	593,480	581,578
Dividends paid per common share	$ 0.18	$ 0.18	$ 5.54	$ 5.54

Condensed Consolidated Unaudited Statements of Operations (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Condensed Consolidated Unaudited Statements of Operations
Sales, excise taxes	$ 153.7	$ 129.2	$ 414.9	$ 315.5

Condensed Consolidated Unaudited Statements of Shareholders' Equity - USD ($)	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Total
Balance at Sep. 30, 2021	$ 8,834	$ (30,867,287)	$ 24,918,781	$ 83,552,298	$ 77,612,626
Balance (in shares) at Sep. 30, 2021	883,589
Balance (in shares) at Sep. 30, 2021		(332,220)
Increase (Decrease) in Stockholders' Equity
Dividends on common stock				(3,331,606)	(3,331,606)
Compensation expense and settlement of equity-based awards	$ 334		1,810,343		1,810,677
Compensation expense and settlement of equity-based awards (in shares)	33,420
Net income available to common shareholders				12,052,045	12,052,045
Balance at Jun. 30, 2022	$ 9,168	$ (30,867,287)	26,729,124	92,272,737	88,143,742
Balance (in shares) at Jun. 30, 2022	917,009
Balance (in shares) at Jun. 30, 2022		(332,220)
Balance at Mar. 31, 2022	$ 9,168	$ (30,867,287)	26,555,046	86,336,525	82,033,452
Balance (in shares) at Mar. 31, 2022	917,009
Balance (in shares) at Mar. 31, 2022		(332,220)
Increase (Decrease) in Stockholders' Equity
Dividends on common stock				(108,596)	(108,596)
Compensation expense and settlement of equity-based awards			174,078		174,078
Net income available to common shareholders				6,044,808	6,044,808
Balance at Jun. 30, 2022	$ 9,168	$ (30,867,287)	26,729,124	92,272,737	88,143,742
Balance (in shares) at Jun. 30, 2022	917,009
Balance (in shares) at Jun. 30, 2022		(332,220)
Balance at Sep. 30, 2022	$ 9,168	$ (30,867,287)	26,903,201	96,784,353	$ 92,829,435
Balance (in shares) at Sep. 30, 2022	917,009				584,789
Balance (in shares) at Sep. 30, 2022		(332,220)
Increase (Decrease) in Stockholders' Equity
Dividends on common stock				(3,423,089)	$ (3,423,089)
Compensation expense and settlement of equity-based awards	$ 263		3,272,776		3,273,039
Compensation expense and settlement of equity-based awards (in shares)	26,263
Net income available to common shareholders				8,638,954	8,638,954
Committed repurchase of treasury stock		$ (404,876)			(404,876)
Committed repurchase of treasury stock (in shares)		(2,363)
Balance at Jun. 30, 2023	$ 9,431	$ (31,272,163)	30,175,977	102,000,218	$ 100,913,463
Balance (in shares) at Jun. 30, 2023	943,272				608,689
Balance (in shares) at Jun. 30, 2023		(334,583)
Balance at Mar. 31, 2023	$ 9,431	$ (30,867,287)	29,766,566	98,167,058	$ 97,075,768
Balance (in shares) at Mar. 31, 2023	943,272
Balance (in shares) at Mar. 31, 2023		(332,220)
Increase (Decrease) in Stockholders' Equity
Dividends on common stock				(111,219)	(111,219)
Compensation expense and settlement of equity-based awards			409,411		409,411
Net income available to common shareholders				3,944,379	3,944,379
Committed repurchase of treasury stock		$ (404,876)			(404,876)
Committed repurchase of treasury stock (in shares)		(2,363)
Balance at Jun. 30, 2023	$ 9,431	$ (31,272,163)	$ 30,175,977	$ 102,000,218	$ 100,913,463
Balance (in shares) at Jun. 30, 2023	943,272				608,689
Balance (in shares) at Jun. 30, 2023		(334,583)

Condensed Consolidated Unaudited Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Condensed Consolidated Unaudited Statements of Shareholders' Equity
Dividends on common stock	$ 0.18	$ 0.18	$ 5.54	$ 5.54

Condensed Consolidated Unaudited Statements of Cash Flows - USD ($)	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income available to common shareholders	$ 8,638,954	$ 12,052,045
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities:
Depreciation	4,701,316	2,486,613
Amortization	280,752	28,355
Equity method investment earnings, net of tax		(1,670,133)
Gain on re-valuation of equity method investment to fair value		(2,387,411)
(Gain) loss on sales of property and equipment	(133,159)	(133,639)
Equity-based compensation	1,940,631	1,903,884
Deferred income taxes	809,616	1,231,012
Provision for losses on doubtful accounts	(7,697)	83,000
Inventory allowance	442,603	688,902
Change in fair value of mandatorily redeemable non-controlling interest	864,684	705,392
Changes in assets and liabilities, net of effects of business acquisition:
Accounts receivable	(8,026,950)	(1,215,238)
Inventories	(12,294,118)	(4,674,292)
Prepaid and other current assets	(745,490)	(2,986,167)
Equity method investment distributions		1,095,467
Other assets	(569,683)	(728,596)
Accounts payable	10,360,228	1,313,711
Accrued expenses and accrued wages, salaries and bonuses	1,487,971	1,926,479
Other long-term liabilities	185,704	(690,693)
Income taxes payable and receivable	1,572,253	(1,890,449)
Net cash flows from (used in) operating activities	9,507,615	7,138,242
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(6,759,929)	(13,940,428)
Proceeds from sales of property and equipment	151,307	145,500
Principal payment received on note receivable		175,000
Cash acquired in business combination		7,958
Acquisition of Henry's (See Note 2)	(54,865,303)
Net cash flows from (used in) investing activities	(61,473,925)	(13,611,970)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities	1,863,027,754	1,393,048,057
Repayments under revolving credit facilities	(1,810,914,231)	(1,381,508,745)
Proceeds from borrowings on long-term debt	7,000,000
Principal payments on long-term debt	(1,011,559)	(524,874)
Proceeds from exercise of stock options		173,590
Dividends on common stock	(3,423,089)	(3,331,606)
Settlement and withholdings of equity-based awards		(1,280,749)
Redemption and distributions to non-controlling interest	(2,405,128)	(20,600)
Net cash flows from (used in) financing activities	52,273,747	6,555,073
Net change in cash	307,437	81,345
Cash, beginning of period	431,576	519,591
Cash, end of period	739,013	600,936
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	5,824,144	1,201,073
Cash paid during the period for income taxes, net of refunds	1,780,000	5,468,488
Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable	1,622,224	123,801
Effect of business acquisition		23,308,624
Committed repurchase of treasury stock	404,876
Issuance of common stock in connection with the vesting and exercise of equity-based awards	$ 2,044,805	$ 2,280,783

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

9 Months Ended

Jun. 30, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

AMCON Distributing Company and Subsidiaries (“AMCON” or the “Company”) operate two business segments:

●

Our retail health food segment (“Retail Segment”) operates 17 health food retail stores located throughout the Midwest and Florida.

WHOLESALE SEGMENT

RETAIL SEGMENT

FINANCIAL STATEMENTS

ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements

ACQUISITION

9 Months Ended

Jun. 30, 2022

ACQUISITION

ACQUISITION

2. ACQUISITION

Provisional (preliminary) amounts of identifiable assets and liabilities assumed:


Accounts receivable	$	8,237,652
Inventories		16,060,965
Prepaid and other assets		400,964
Property and equipment		27,216,323
Other intangible assets		3,607,000
Liabilities assumed		(1,157,976)
Total identifiable net assets	$	54,364,928

Total identifiable net assets	$	54,364,928
Goodwill		500,375
Consideration transferred	$	54,865,303

The provisional (preliminary) value of other intangible assets acquired consisted of the following:


	Acquisition-Date		Useful Life
Other Intangible Asset	Fair Value		(Years)
Customer list	$	2,010,000		15
Non-competition agreement		95,000		5
Trade name		1,502,000		7
	$	3,607,000


Revenue	$	131,563,988
Net income available to common shareholders	$	1,288,462


	For the three months ended June 2023		For the three months ended June 2022		For the nine months ended June 2023		For the nine months ended June 2022
Revenue	$	696,489,427	$	700,311,723	$	1,951,264,477	$	1,988,702,611
Net income available to common shareholders	$	3,944,379	$	6,202,533	$	8,838,866	$	15,484,735

INVENTORIES

9 Months Ended

Jun. 30, 2023

INVENTORIES

INVENTORIES

3. INVENTORIES

GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Jun. 30, 2023

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

4. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill at June 2023 and September 2022 was as follows:


	June		September
	2023		2022
Wholesale Segment	$	5,778,325	$	5,277,950

Other intangible assets at June 2023 and September 2022 consisted of the following:


	June		September
	2023		2022
Customer lists (Wholesale Segment) (less accumulated amortization of $0.2 million at June 2023 and less than $0.1 million at September 2022)	$	3,284,013	$	1,401,945
Non-competition agreements (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023 and less than $0.1 million at September 2022)		222,753		191,168
Tradename (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023)		1,412,595		—
Trademarks and tradenames (Retail Segment)		500,000		500,000
	$	5,419,361	$	2,093,113

Estimated future amortization expense related to identifiable intangible assets with finite lives was as follows at June 2023:


	June
	2023
Fiscal 2023 (1)	$	134,425
Fiscal 2024		537,701
Fiscal 2025		506,869
Fiscal 2026		463,703
Fiscal 2027		463,703
Fiscal 2028 and thereafter		2,812,960
	$	4,919,361

(1)	Represents amortization for the remaining three months of Fiscal 2023.

DIVIDENDS

9 Months Ended

Jun. 30, 2023

DIVIDENDS

DIVIDENDS

5. DIVIDENDS

EARNINGS PER SHARE

9 Months Ended

Jun. 30, 2023

EARNINGS PER SHARE

EARNINGS PER SHARE

6. EARNINGS PER SHARE


	For the three months ended June
	2023				2022
	Basic		Diluted		Basic		Diluted
Weighted average number of common shares outstanding		585,625		585,625		569,689		569,689
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)		—		12,965		—		12,681
Weighted average number of shares outstanding		585,625		598,590		569,689		582,370
Net income available to common shareholders	$	3,944,379	$	3,944,379	$	6,044,808	$	6,044,808

Net earnings per share available to common shareholders	$	6.74	$	6.59	$	10.61	$	10.38

(1)	Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive.


	For the nine months ended June
	2023				2022
	Basic		Diluted		Basic		Diluted
Weighted average number of common shares outstanding		584,359		584,359		567,026		567,026
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)		—		9,121		—		14,552
Weighted average number of shares outstanding		584,359		593,480		567,026		581,578
Net income available to common shareholders	$	8,638,954	$	8,638,954	$	12,052,045	$	12,052,045

Net earnings per share available to common shareholders	$	14.78	$	14.56	$	21.25	$	20.72

(1)Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive.

DEBT

9 Months Ended

Jun. 30, 2023

DEBT

DEBT

7. DEBT

LONG-TERM DEBT

In addition to the Facilities, the Company also had the following long-term obligations at June 2023 and September 2022.


	June 2023		September 2022
Unsecured note payable, interest payable at a fixed rate of 4.50% with quarterly installments of principal and interest of $49,114 through June 2023 with remaining principal due September 2023		852,642		968,589
Note payable, interest payable at a fixed rate of 4.10% with monthly installments of principal and interest of $53,361 through June 2033 with remaining principal due July 2033, collateralized by Team Sledd's principal office and warehouse		5,280,076		5,572,766
Note payable, interest payable at a fixed rate of 3.25% with monthly installments of principal and interest of $17,016 through August 2034 with remaining principal due September 2034, collateralized by Team Sledd's principal office and warehouse		1,927,167		2,052,327
Note payable with monthly installments of principal and interest of $7,934 through February 2025 with remaining principal due March 2025, and an effective variable rate of 7.28% at June 2023, collateralized by certain of Team Sledd's equipment		312,040		385,887
Note payable, interest payable at a fixed rate of 6.04% with monthly installments of principal and interest of $135,469 through February 2028, collateralized by certain of Henry's equipment		6,596,085		—
		14,968,010		8,979,569
Less current maturities		(2,738,524)		(1,595,309)
	$	12,229,486	$	7,384,260

The aggregate minimum principal maturities of the long-term debt for each of the next five fiscal years are as follows:


Fiscal Year Ending
2023 (1)	$	1,295,972
2024		1,957,369
2025		2,166,686
2026		2,073,198
2027		2,187,857
2028 and thereafter		5,286,928
	$	14,968,010

(1)Represents payments for the remaining three months of Fiscal 2023.

Cross Default and Co-Terminus Provisions

Other

The Company has issued a letter of credit for $0.5 million to its workers’ compensation insurance carrier as part of its self-insured loss control program.

INCOME TAXES

9 Months Ended

Jun. 30, 2023

INCOME TAXES

INCOME TAXES

8. INCOME TAXES

MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST

9 Months Ended

Jun. 30, 2023

MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST

MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST

9. MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST


Fair value of MRNCI as of September 2022	$	11,158,555
Redemption of non-controlling interests		(1,812,558)
Distributions to non-controlling interest		(592,570)
Change in fair value		864,684
Fair value of MRNCI as of June 2023	$	9,618,111
Less current portion at fair value		(1,641,612)
	$	7,976,499

BUSINESS SEGMENTS

9 Months Ended

Jun. 30, 2023

BUSINESS SEGMENTS

BUSINESS SEGMENTS

10. BUSINESS SEGMENTS


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED JUNE 2023
External revenue:
Cigarettes	$	429,431,319	$	—	$	—	$	429,431,319
Tobacco		124,894,734		—		—		124,894,734
Confectionery		46,624,371		—		—		46,624,371
Health food		—		10,745,108		—		10,745,108
Foodservice & other		84,793,895		—		—		84,793,895
Total external revenue		685,744,319		10,745,108		—		696,489,427
Depreciation		1,690,452		278,552		—		1,969,004
Amortization		134,425		—		—		134,425
Operating income (loss)		11,772,692		(297,795)		(3,564,070)		7,910,827
Interest expense		—		—		2,385,842		2,385,842
Income (loss) from operations before taxes		11,148,619		559,473		(5,949,913)		5,758,179
Total assets		349,564,773		18,008,597		1,133,985		368,707,355
Capital expenditures		5,082,997		405,694		—		5,488,691


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED JUNE 2022
External revenue:
Cigarettes	$	364,771,496	$	—	$	—	$	364,771,496
Tobacco		93,957,495		—		—		93,957,495
Confectionery		32,541,090		—		—		32,541,090
Health food		—		11,350,797		—		11,350,797
Foodservice & other		47,963,274		—		—		47,963,274
Total external revenue		539,233,355		11,350,797		—		550,584,152
Depreciation		602,770		281,376		—		884,146
Amortization		28,355		—		—		28,355
Operating income (loss)		9,432,660		241,225		(2,772,099)		6,901,786
Interest expense		—		—		655,811		655,811
Income (loss) from operations before taxes		8,732,244		256,392		(1,030,801)		7,957,835
Equity method investment earnings, net of tax		—		—		307,973		307,973
Total assets		278,824,259		18,656,853		814,291		298,295,403
Capital expenditures		12,074,922		985,835		—		13,060,757


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
NINE MONTHS ENDED JUNE 2023
External revenue:
Cigarettes	$	1,161,352,954	$	—	$	—	$	1,161,352,954
Tobacco		339,356,268		—		—		339,356,268
Confectionery		115,820,426		—		—		115,820,426
Health food		—		32,354,992		—		32,354,992
Foodservice & other		198,588,142		—		—		198,588,142
Total external revenue		1,815,117,790		32,354,992		—		1,847,472,782
Depreciation		3,884,128		817,188		—		4,701,316
Amortization		280,752		—		—		280,752
Operating income (loss)		28,934,860		(392,963)		(9,783,740)		18,758,157
Interest expense		—		—		6,249,540		6,249,540
Income (loss) from operations before taxes		28,321,283		514,952		(16,033,281)		12,802,954
Total assets		349,564,773		18,008,597		1,133,985		368,707,355
Capital expenditures		7,499,029		791,468		—		8,290,497


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
NINE MONTHS ENDED JUNE 2022
External revenue:
Cigarettes	$	900,677,466	$	—	$	—	$	900,677,466
Tobacco		229,765,009		—		—		229,765,009
Confectionery		79,691,881		—		—		79,691,881
Health food		—		35,695,298		—		35,695,298
Foodservice & other		119,213,967		—		—		119,213,967
Total external revenue		1,329,348,323		35,695,298		—		1,365,043,621
Depreciation		1,589,102		897,511		—		2,486,613
Amortization		28,355		—		—		28,355
Operating income (loss)		23,174,638		1,448,878		(10,020,703)		14,602,813
Interest expense		—		—		1,222,829		1,222,829
Income (loss) from operations before taxes		22,513,900		1,469,705		(8,790,693)		15,192,912
Equity method investment earnings, net of tax		—		—		1,670,133		1,670,133
Total assets		278,824,259		18,656,853		814,291		298,295,403
Capital expenditures		12,718,606		1,217,373		—		13,935,979

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies)

9 Months Ended

Jun. 30, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

WHOLESALE SEGMENT AND RETAIL SEGMENT

AMCON Distributing Company and Subsidiaries (“AMCON” or the “Company”) operate two business segments:

●

Our retail health food segment (“Retail Segment”) operates 17 health food retail stores located throughout the Midwest and Florida.

WHOLESALE SEGMENT

RETAIL SEGMENT

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

ACCOUNTING PRONOUNCEMENTS

ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements

ACQUISITION (Tables)

9 Months Ended

Jun. 30, 2023

ACQUISITION

Schedule of identifiable assets and liabilities assumed


Accounts receivable	$	8,237,652
Inventories		16,060,965
Prepaid and other assets		400,964
Property and equipment		27,216,323
Other intangible assets		3,607,000
Liabilities assumed		(1,157,976)
Total identifiable net assets	$	54,364,928

Total identifiable net assets	$	54,364,928
Goodwill		500,375
Consideration transferred	$	54,865,303

Schedule of other intangible assets acquired


	Acquisition-Date		Useful Life
Other Intangible Asset	Fair Value		(Years)
Customer list	$	2,010,000		15
Non-competition agreement		95,000		5
Trade name		1,502,000		7
	$	3,607,000

Schedule of unaudited supplemental financial data


Revenue	$	131,563,988
Net income available to common shareholders	$	1,288,462

Schedule of unaudited supplemental pro forma information


	For the three months ended June 2023		For the three months ended June 2022		For the nine months ended June 2023		For the nine months ended June 2022
Revenue	$	696,489,427	$	700,311,723	$	1,951,264,477	$	1,988,702,611
Net income available to common shareholders	$	3,944,379	$	6,202,533	$	8,838,866	$	15,484,735

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Jun. 30, 2023

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of goodwill


	June		September
	2023		2022
Wholesale Segment	$	5,778,325	$	5,277,950

Schedule of other intangible assets


	June		September
	2023		2022
Customer lists (Wholesale Segment) (less accumulated amortization of $0.2 million at June 2023 and less than $0.1 million at September 2022)	$	3,284,013	$	1,401,945
Non-competition agreements (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023 and less than $0.1 million at September 2022)		222,753		191,168
Tradename (Wholesale Segment) (less accumulated amortization of $0.1 million at June 2023)		1,412,595		—
Trademarks and tradenames (Retail Segment)		500,000		500,000
	$	5,419,361	$	2,093,113

Schedule of estimated future amortization expense related to identifiable intangible assets with finite lives

Estimated future amortization expense related to identifiable intangible assets with finite lives was as follows at June 2023:


	June
	2023
Fiscal 2023 (1)	$	134,425
Fiscal 2024		537,701
Fiscal 2025		506,869
Fiscal 2026		463,703
Fiscal 2027		463,703
Fiscal 2028 and thereafter		2,812,960
	$	4,919,361

(1)	Represents amortization for the remaining three months of Fiscal 2023.

EARNINGS PER SHARE (Tables)

9 Months Ended

Jun. 30, 2023

EARNINGS PER SHARE

Schedule of net earnings per share available to common shareholders


	For the three months ended June
	2023				2022
	Basic		Diluted		Basic		Diluted
Weighted average number of common shares outstanding		585,625		585,625		569,689		569,689
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)		—		12,965		—		12,681
Weighted average number of shares outstanding		585,625		598,590		569,689		582,370
Net income available to common shareholders	$	3,944,379	$	3,944,379	$	6,044,808	$	6,044,808

Net earnings per share available to common shareholders	$	6.74	$	6.59	$	10.61	$	10.38

(1)	Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive.


	For the nine months ended June
	2023				2022
	Basic		Diluted		Basic		Diluted
Weighted average number of common shares outstanding		584,359		584,359		567,026		567,026
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)		—		9,121		—		14,552
Weighted average number of shares outstanding		584,359		593,480		567,026		581,578
Net income available to common shareholders	$	8,638,954	$	8,638,954	$	12,052,045	$	12,052,045

Net earnings per share available to common shareholders	$	14.78	$	14.56	$	21.25	$	20.72

(1)Diluted earnings per share calculation includes all equity-based awards deemed to be dilutive.

DEBT (Tables)

9 Months Ended

Jun. 30, 2023

DEBT

Schedule of long-term obligations


	June 2023		September 2022
Unsecured note payable, interest payable at a fixed rate of 4.50% with quarterly installments of principal and interest of $49,114 through June 2023 with remaining principal due September 2023		852,642		968,589
Note payable, interest payable at a fixed rate of 4.10% with monthly installments of principal and interest of $53,361 through June 2033 with remaining principal due July 2033, collateralized by Team Sledd's principal office and warehouse		5,280,076		5,572,766
Note payable, interest payable at a fixed rate of 3.25% with monthly installments of principal and interest of $17,016 through August 2034 with remaining principal due September 2034, collateralized by Team Sledd's principal office and warehouse		1,927,167		2,052,327
Note payable with monthly installments of principal and interest of $7,934 through February 2025 with remaining principal due March 2025, and an effective variable rate of 7.28% at June 2023, collateralized by certain of Team Sledd's equipment		312,040		385,887
Note payable, interest payable at a fixed rate of 6.04% with monthly installments of principal and interest of $135,469 through February 2028, collateralized by certain of Henry's equipment		6,596,085		—
		14,968,010		8,979,569
Less current maturities		(2,738,524)		(1,595,309)
	$	12,229,486	$	7,384,260

Schedule of minimum principal maturities of the long-term debt


Fiscal Year Ending
2023 (1)	$	1,295,972
2024		1,957,369
2025		2,166,686
2026		2,073,198
2027		2,187,857
2028 and thereafter		5,286,928
	$	14,968,010

(1)Represents payments for the remaining three months of Fiscal 2023.

MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST (Tables)

9 Months Ended

Jun. 30, 2023

MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST

Schedule of mandatorily redeemable non-controlling interest


Fair value of MRNCI as of September 2022	$	11,158,555
Redemption of non-controlling interests		(1,812,558)
Distributions to non-controlling interest		(592,570)
Change in fair value		864,684
Fair value of MRNCI as of June 2023	$	9,618,111
Less current portion at fair value		(1,641,612)
	$	7,976,499

BUSINESS SEGMENTS (Tables)

9 Months Ended

Jun. 30, 2023

BUSINESS SEGMENTS

Schedule of segment information


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED JUNE 2023
External revenue:
Cigarettes	$	429,431,319	$	—	$	—	$	429,431,319
Tobacco		124,894,734		—		—		124,894,734
Confectionery		46,624,371		—		—		46,624,371
Health food		—		10,745,108		—		10,745,108
Foodservice & other		84,793,895		—		—		84,793,895
Total external revenue		685,744,319		10,745,108		—		696,489,427
Depreciation		1,690,452		278,552		—		1,969,004
Amortization		134,425		—		—		134,425
Operating income (loss)		11,772,692		(297,795)		(3,564,070)		7,910,827
Interest expense		—		—		2,385,842		2,385,842
Income (loss) from operations before taxes		11,148,619		559,473		(5,949,913)		5,758,179
Total assets		349,564,773		18,008,597		1,133,985		368,707,355
Capital expenditures		5,082,997		405,694		—		5,488,691


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED JUNE 2022
External revenue:
Cigarettes	$	364,771,496	$	—	$	—	$	364,771,496
Tobacco		93,957,495		—		—		93,957,495
Confectionery		32,541,090		—		—		32,541,090
Health food		—		11,350,797		—		11,350,797
Foodservice & other		47,963,274		—		—		47,963,274
Total external revenue		539,233,355		11,350,797		—		550,584,152
Depreciation		602,770		281,376		—		884,146
Amortization		28,355		—		—		28,355
Operating income (loss)		9,432,660		241,225		(2,772,099)		6,901,786
Interest expense		—		—		655,811		655,811
Income (loss) from operations before taxes		8,732,244		256,392		(1,030,801)		7,957,835
Equity method investment earnings, net of tax		—		—		307,973		307,973
Total assets		278,824,259		18,656,853		814,291		298,295,403
Capital expenditures		12,074,922		985,835		—		13,060,757


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
NINE MONTHS ENDED JUNE 2023
External revenue:
Cigarettes	$	1,161,352,954	$	—	$	—	$	1,161,352,954
Tobacco		339,356,268		—		—		339,356,268
Confectionery		115,820,426		—		—		115,820,426
Health food		—		32,354,992		—		32,354,992
Foodservice & other		198,588,142		—		—		198,588,142
Total external revenue		1,815,117,790		32,354,992		—		1,847,472,782
Depreciation		3,884,128		817,188		—		4,701,316
Amortization		280,752		—		—		280,752
Operating income (loss)		28,934,860		(392,963)		(9,783,740)		18,758,157
Interest expense		—		—		6,249,540		6,249,540
Income (loss) from operations before taxes		28,321,283		514,952		(16,033,281)		12,802,954
Total assets		349,564,773		18,008,597		1,133,985		368,707,355
Capital expenditures		7,499,029		791,468		—		8,290,497


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
NINE MONTHS ENDED JUNE 2022
External revenue:
Cigarettes	$	900,677,466	$	—	$	—	$	900,677,466
Tobacco		229,765,009		—		—		229,765,009
Confectionery		79,691,881		—		—		79,691,881
Health food		—		35,695,298		—		35,695,298
Foodservice & other		119,213,967		—		—		119,213,967
Total external revenue		1,329,348,323		35,695,298		—		1,365,043,621
Depreciation		1,589,102		897,511		—		2,486,613
Amortization		28,355		—		—		28,355
Operating income (loss)		23,174,638		1,448,878		(10,020,703)		14,602,813
Interest expense		—		—		1,222,829		1,222,829
Income (loss) from operations before taxes		22,513,900		1,469,705		(8,790,693)		15,192,912
Equity method investment earnings, net of tax		—		—		1,670,133		1,670,133
Total assets		278,824,259		18,656,853		814,291		298,295,403
Capital expenditures		12,718,606		1,217,373		—		13,935,979

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details) ft² in Millions, $ in Millions		1 Months Ended	9 Months Ended
	Feb. 03, 2023 USD ($)	Dec. 31, 2022 item	Jun. 30, 2023 ft² state item segment
Number of business segments \| segment			2
Henry's
Payments to acquire stores \| $	$ 54.9
Wholesale Segment
Number of states served \| state			31
Number of retail outlets served			6,800
Number of products sold or distributed			17,000
Rank assigned by Convenience Store News		6
Number of distribution centers			8
Floor space occupied by distribution centers (in square feet) \| ft²			1.1
Retail Segment
Number of operating health food retail stores			17
Number of products sold or distributed			35,000

ACQUISITION - Additional Information (Details) - USD ($)		3 Months Ended	9 Months Ended
	Feb. 03, 2023	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022	Oct. 01, 2021
EQUITY METHOD INVESTMENT
Goodwill		$ 5,778,325		$ 5,277,950
Remeasurement gain			$ 2,387,411
Henry's
EQUITY METHOD INVESTMENT
Payment to acquire	$ 54,900,000
Liabilities assumed	1,157,976
Operating leases	200,000
Reduction of the total purchase price recorded as an adjustment to goodwill		$ (100,000)
Goodwill	$ 500,375
Team Sledd
EQUITY METHOD INVESTMENT
Controlling interest (as a percent)		64.00%		56.00%	64.00%

ACQUISITION - Identifiable Assets and Liabilities and Goodwill (Details) - USD ($)	Jun. 30, 2023	Feb. 03, 2023	Sep. 30, 2022
Provisional (preliminary) amounts of identifiable assets and liabilities at fair value:
Goodwill	$ 5,778,325		$ 5,277,950
Henry's
Provisional (preliminary) amounts of identifiable assets and liabilities at fair value:
Accounts receivable		$ 8,237,652
Inventories		16,060,965
Prepaid and other assets		400,964
Property and equipment		27,216,323
Other intangible assets		3,607,000
Liabilities assumed		(1,157,976)
Total identifiable net assets		54,364,928
Goodwill		500,375
Consideration transferred		$ 54,865,303

ACQUISITION - Other Intangible Asset Acquired (Details) - Henry's	Feb. 03, 2023 USD ($)
Intangible assets
Acquisition-Date Fair Value	$ 3,607,000
Customer lists
Intangible assets
Acquisition-Date Fair Value	$ 2,010,000
Useful Life (Years)	15 years
Non-competition agreements
Intangible assets
Acquisition-Date Fair Value	$ 95,000
Useful Life (Years)	5 years
Trade Names
Intangible assets
Acquisition-Date Fair Value	$ 1,502,000
Useful Life (Years)	7 years

ACQUISITION - Unaudited Supplemental Financial Data (Details) - Henry's	5 Months Ended
	Jun. 30, 2023 USD ($)
Business Acquisition [Line Items]
Revenue	$ 131,563,988
Net income available to common shareholders	$ 1,288,462

ACQUISITION - Unaudited Supplemental Pro Forma Information (Details) - Henry's - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Acquisition [Line Items]
Revenue	$ 696,489,427	$ 700,311,723	$ 1,951,264,477	$ 1,988,702,611
Net income available to common shareholders	$ 3,944,379	$ 6,202,533	$ 8,838,866	$ 15,484,735

INVENTORIES (Details) - USD ($) $ in Millions	Jun. 30, 2023	Sep. 30, 2022
INVENTORIES
Total reserves on finished goods	$ 1.7	$ 1.1

GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Goodwill by reporting segment
Goodwill	$ 5,778,325	$ 5,277,950
Wholesale Segment
Goodwill by reporting segment
Goodwill	$ 5,778,325	$ 5,277,950

GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Other intangible assets, net	$ 5,419,361	$ 2,093,113
Trademarks and tradenames \| Retail Segment
Other intangible assets, net	500,000	500,000
Customer lists \| Wholesale Segment
Other intangible assets, net	3,284,013	1,401,945
Accumulated amortization	200,000
Customer lists \| Wholesale Segment \| Maximum
Accumulated amortization		100,000
Non-competition agreements \| Wholesale Segment
Other intangible assets, net	222,753	191,168
Accumulated amortization	100,000
Non-competition agreements \| Wholesale Segment \| Maximum
Accumulated amortization		$ 100,000
Tradename \| Wholesale Segment
Other intangible assets, net	1,412,595
Accumulated amortization	$ 100,000

GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) - USD ($)	3 Months Ended	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Sep. 30, 2022
Goodwill	$ 5,778,325	$ 5,778,325	$ 5,277,950
Amortization expense related to finite-lived intangible assets	100,000	$ 300,000
Customer lists
Amortization period (in years)		15 years
Non-competition agreements \| Minimum
Amortization period (in years)		3 years
Non-competition agreements \| Maximum
Amortization period (in years)		5 years
Wholesale Segment
Goodwill	$ 5,778,325	$ 5,778,325	$ 5,277,950
Wholesale Segment \| Tradename
Amortization period (in years)		7 years

GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense (Details)	Jun. 30, 2023 USD ($)
Estimated future amortization expense related to identifiable intangible assets with finite lives
Fiscal 2023	$ 134,425
Fiscal 2024	537,701
Fiscal 2025	506,869
Fiscal 2026	463,703
Fiscal 2027	463,703
Fiscal 2028 and thereafter	2,812,960
Total	$ 4,919,361

DIVIDENDS (Details) - USD ($)	3 Months Ended		9 Months Ended
DIVIDENDS (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
DIVIDENDS
Dividend paid	$ 100,000	$ 100,000	$ 3,423,089	$ 3,331,606

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
EARNINGS PER SHARE (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
EARNINGS PER SHARE
Weighted average number of common shares outstanding, Basic	585,625	569,689	584,359	567,026
Weighted average of net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock	12,965	12,681	9,121	14,552
Weighted average number of shares outstanding, Diluted	598,590	582,370	593,480	581,578
Net income available to common shareholders, Basic	$ 3,944,379	$ 6,044,808	$ 8,638,954	$ 12,052,045
Net income available to common shareholders, Diluted	$ 3,944,379	$ 6,044,808	$ 8,638,954	$ 12,052,045
Net earnings per share available to common shareholders, Basic (in dollars per share)	$ 6.74	$ 10.61	$ 14.78	$ 21.25
Net earnings per share available to common shareholders, Diluted (in dollars per share)	$ 6.59	$ 10.38	$ 14.56	$ 20.72

DEBT - Credit Facilities (Details) $ in Millions	9 Months Ended
DEBT - Credit Facilities (Details) $ in Millions	Jun. 30, 2023 USD ($) item	Mar. 31, 2023 USD ($)
Revolving credit facility
Number of credit facility agreements \| item	3
Facilities
Revolving credit facility
Borrowing capacity	$ 300.0
Maximum credit advances for certain inventory purchases under the facilities	30.0
Credit limit	249.9
Outstanding borrowings	143.4
Credit available	$ 106.5
Average interest rate	6.75%
Peak borrowings	$ 159.7
Average borrowings	124.3
Average availability	83.8
Team Sledd Facility
Revolving credit facility
Borrowing capacity	$ 80.0	$ 70.0

DEBT - Long-Term Debt (Details) - USD ($)	9 Months Ended	12 Months Ended
DEBT - Long-Term Debt (Details) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Long-term obligations
Long-term debt	$ 14,968,010	$ 8,979,569
Less current maturities	(2,738,524)	(1,595,309)
Long-term debt less current maturities	12,229,486	7,384,260
4.50% Unsecured Note Payable
Long-term obligations
Long-term debt	$ 852,642	$ 968,589
Fixed interest rate (as a percent)	4.50%	4.50%
Periodic installments of principal and interest	$ 49,114	$ 49,114
4.10% Note Payable
Long-term obligations
Long-term debt	$ 5,280,076	$ 5,572,766
Fixed interest rate (as a percent)	4.10%	4.10%
Periodic installments of principal and interest	$ 53,361	$ 53,361
3.25% Note Payable
Long-term obligations
Long-term debt	$ 1,927,167	$ 2,052,327
Fixed interest rate (as a percent)	3.25%	3.25%
Periodic installments of principal and interest	$ 17,016	$ 17,016
7.28% Note payable
Long-term obligations
Long-term debt	312,040	385,887
Periodic installments of principal and interest	$ 7,934	$ 7,934
Variable rate	7.28%
6.04% Note Payable
Long-term obligations
Long-term debt	$ 6,596,085
Fixed interest rate (as a percent)	6.04%
Periodic installments of principal and interest	$ 135,469

DEBT - Aggregate Minimum Principal Maturities (Details) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Minimum principal maturities
2023	$ 1,295,972
2024	1,957,369
2025	2,166,686
2026	2,073,198
2027	2,187,857
2028 and thereafter	5,286,928
Long-term debt	$ 14,968,010	$ 8,979,569

DEBT - Cross Default and Co-Terminus Provisions and Other (Details) $ in Millions	9 Months Ended
	Jun. 30, 2023 USD ($) item
DEBT
Number of notes payable containing cross default provisions	3
Number of cross defaults	0
Letter of credit issued for worker's compensation insurance carrier as part of the entity's self-insured loss control program \| $	$ 0.5

MANDATORILY REDEEMABLE NON-CONTROLLING INTEREST (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022	Oct. 01, 2021
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Difference between the contractual amount due and the fair value	$ 700,000		$ 700,000
Fair value of MRNCI as of September 2022			11,158,555
Redemption of non-controlling interests			(1,812,558)
Distributions to non-controlling interest			(592,570)
Change in fair value	698,571	$ 705,392	864,684	$ 705,392
Fair value of MRNCI as of June 2023	9,618,111		9,618,111
Less current portion at fair value	(1,641,612)		(1,641,612)		$ (1,712,095)
Noncurrent portion at fair value	$ 7,976,499		$ 7,976,499
Team Sledd
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Interest own (as a percent)	64.00%		64.00%		56.00%	64.00%

BUSINESS SEGMENTS (Details)	3 Months Ended		9 Months Ended
BUSINESS SEGMENTS (Details)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) segment	Jun. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)
Information by business segments
Number of reportable business segments \| segment			2
Total external revenue	$ 696,489,427	$ 550,584,152	$ 1,847,472,782	$ 1,365,043,621
Depreciation	1,969,004	884,146	4,701,316	2,486,613
Amortization	134,425	28,355	280,752	28,355
Operating income (loss)	7,910,827	6,901,786	18,758,157	14,602,813
Interest expense	2,385,842	655,811	6,249,540	1,222,829
Income (loss) from operations before taxes	5,758,179	7,957,835	12,802,954	15,192,912
Equity method investment earnings, net of tax		307,973		1,670,133
Total assets	368,707,355	298,295,403	368,707,355	298,295,403	$ 289,124,527
Capital expenditures	5,488,691	13,060,757	8,290,497	13,935,979
Cigarettes
Information by business segments
Total external revenue	429,431,319	364,771,496	1,161,352,954	900,677,466
Tobacco
Information by business segments
Total external revenue	124,894,734	93,957,495	339,356,268	229,765,009
Confectionery
Information by business segments
Total external revenue	46,624,371	32,541,090	115,820,426	79,691,881
Health food
Information by business segments
Total external revenue	10,745,108	11,350,797	32,354,992	35,695,298
Foodservice & other
Information by business segments
Total external revenue	84,793,895	47,963,274	198,588,142	119,213,967
Other
Information by business segments
Operating income (loss)	(3,564,070)	(2,772,099)	(9,783,740)	(10,020,703)
Interest expense	2,385,842	655,811	6,249,540	1,222,829
Income (loss) from operations before taxes	(5,949,913)	(1,030,801)	(16,033,281)	(8,790,693)
Equity method investment earnings, net of tax		307,973		1,670,133
Total assets	1,133,985	814,291	1,133,985	814,291
Wholesale Segment \| Segments
Information by business segments
Total external revenue	685,744,319	539,233,355	1,815,117,790	1,329,348,323
Depreciation	1,690,452	602,770	3,884,128	1,589,102
Amortization	134,425	28,355	280,752	28,355
Operating income (loss)	11,772,692	9,432,660	28,934,860	23,174,638
Income (loss) from operations before taxes	11,148,619	8,732,244	28,321,283	22,513,900
Total assets	349,564,773	278,824,259	349,564,773	278,824,259
Capital expenditures	5,082,997	12,074,922	7,499,029	12,718,606
Wholesale Segment \| Segments \| Cigarettes
Information by business segments
Total external revenue	429,431,319	364,771,496	1,161,352,954	900,677,466
Wholesale Segment \| Segments \| Tobacco
Information by business segments
Total external revenue	124,894,734	93,957,495	339,356,268	229,765,009
Wholesale Segment \| Segments \| Confectionery
Information by business segments
Total external revenue	46,624,371	32,541,090	115,820,426	79,691,881
Wholesale Segment \| Segments \| Foodservice & other
Information by business segments
Total external revenue	84,793,895	47,963,274	198,588,142	119,213,967
Retail Segment \| Segments
Information by business segments
Total external revenue	10,745,108	11,350,797	32,354,992	35,695,298
Depreciation	278,552	281,376	817,188	897,511
Operating income (loss)	(297,795)	241,225	(392,963)	1,448,878
Income (loss) from operations before taxes	559,473	256,392	514,952	1,469,705
Total assets	18,008,597	18,656,853	18,008,597	18,656,853
Capital expenditures	405,694	985,835	791,468	1,217,373
Retail Segment \| Segments \| Health food
Information by business segments
Total external revenue	$ 10,745,108	$ 11,350,797	$ 32,354,992	$ 35,695,298

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