Financial Analysis

6. DEBT The Company primarily finances its operations through three credit facility agreements (a) a facility that is an obligation of AMCON Distributing Company (the AMCON Facility), (b) a facility that is an obligation of Team Sledd (the Team Sledd Facility) and (c) a facility that is an obligation of Henrys (the Henrys Facility) (collectively, the Facilities) and long-term debt agreements with banks. The Team Sledd Facility and the Henrys Facility are non-recourse to AMCON Distributing Company, are not guaranteed by AMCON Distributing Company and have no cross default provisions applicable to AMCON Distributing Company. At March 2026, the Facilities had a total combined borrowing capacity of $305.0 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 AMCON Facility matures in June 2027, the Henrys Facility matures in February 2028, 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 Companys 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 the Secured Overnight Financing Rate (SOFR), plus any applicable s …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

8. FAIR VALUE DISCLOSURES Mandatorily Redeemable Non-Controlling Interest Mandatorily redeemable non-controlling interest (MRNCI) recorded on the Companys condensed consolidated balance sheets represents the fair value of the non-controlling interest in the Companys strategic investment in Team Sledd. The Company owned approximately 92% of Team Sledd as of both March 2026 and September 2025. The Company has elected to present the MRNCI liability at fair value under FASB Accounting Standards Codification (ASC) 825 Financial Instruments as it believes this best represents the potential future liability and cash flows. As such, the MRNCI balance at March 2026 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 MRNCI is classified as Level 3 because of the Companys reliance on unobservable assumptions. The Company estimates the probability and timing of future redemptions and earnings of Team Sledd based on managements knowledge and assumptions of certain events as of each reporting date, including the timing of any future redemptions and an appropriate di …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

3. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at March 2026 and September 2025 was as follows: March September 2026 2025 Wholesale Segment $ 5,778,325 $ 5,778,325 Other intangible assets at March 2026 and September 2025 consisted of the following: March September 2026 2025 Customer lists (Wholesale Segment) (less accumulated amortization of $0.8 million at March 2026 and $0.7 million at September 2025) $ 2,651,150 $ 2,766,216 Non-competition agreements (Wholesale Segment) (less accumulated amortization of $0.3 million at March 2026 and $0.3 million at September 2025) 34,833 44,333 Tradename (Wholesale Segment) (less accumulated amortization of $0.7 million at March 2026 and $0.6 million at September 2025) 822,524 929,810 Trademarks and tradenames (Retail Segment) 500,000 500,000 $ 4,008,507 $ 4,240,359 Goodwill and Retail Segment trademarks and tradenames are considered to have indefinite useful lives and therefore no amortization has been taken on these assets. Goodwill recorded on the Companys consolidated balance sheets represent amounts allocated to its Wholesale Segment, which totaled approximately $5.8 million at both March 2026 and September 2025. 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 Companys impairment assessments since its fiscal year ended September 2025. At March 2026, identifiable intangible assets considered to have …

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7. INCOME TAXES The change in the Companys effective income tax rate for the three- and six-month periods ended March 2026 as compared to the respective prior year periods was primarily related to non-deductible expenses in relation to the amount of income (loss) from operations before income tax expense (benefit) and variances in the average effective state income tax rates between the comparative periods. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. This guidance is effective for annual periods beginning after December 15, 2024 (fiscal 2026 for the Company), with early adoption permitted. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures, which improves disclosure requirements and provides more detailed information about an entitys expenses, specifically amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses, along with qualitative descriptions of certain other types of expenses. This guidance is effective for fiscal years beginning after December 15, 2026 (fiscal 2028 for the Company), and interim periods within fiscal years beginning after December 15, 2027 (fiscal 2029 for the Company), with early adoption permitted. The Company is currently reviewing …

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9. BUSINESS SEGMENTS The Company has two reportable business segments: the wholesale distribution of consumer products (the Wholesale Segment), and the retail sale of health and natural food products (the Retail Segment). The Companys chief operating decision maker (CODM) is the chief executive officer, who utilizes operating income (loss) to evaluate the Companys business operations and allocate the Companys resources to these business segments, which are aggregated 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 and assets held, charges incurred and income earned by our holding company. Wholesale Retail Segment Segment Other Consolidated THREE MONTHS ENDED MARCH 2026 External revenue: Cigarettes $ 459,801,727 $ $ $ 459,801,727 Tobacco 131,247,180 131,247,180 Confectionery 42,851,576 42,851,576 Health food 11,753,463 11,753,463 Foodservice & other 69,998,495 69,998,495 Total external revenue 703,898,978 11,753,463 715,652,441 Cost of sales 664,560,772 7,602,470 672,163,242 Selling, general and administrative expenses 34,887,958 3,841,312 2,654,178 41,383,448 Depreciation 2,158,987 215,558 2,374,545 Amortization 115,926 115,926 Operating income (loss) 2,175,335 94,123 (2,654,178) (384,720) Interest expense 2,228,039 2,228,039 Income ( …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing