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 ~~December~~March 31, ~~2025~~2026


◻	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 ~~650~~976,~~709~~028 shares of its $.01 par value common stock outstanding as of ~~January~~April 1617, 2026.

Table of Contents

Form 10-Q

~~1st~~2nd Quarter

INDEX

~~December~~March 31, ~~2025~~2026 PAGE PART I — FINANCIAL INFORMATION Item 1. Financial Statements: Condensed consolidated balance sheets at ~~December~~March 31, ~~2025~~2026 (unaudited) and September 30, 2025 3 Condensed consolidated unaudited statements of operations for the three and six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025 4 Condensed consolidated unaudited statements of shareholders’ equity for the three and six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025 5 Condensed consolidated unaudited statements of cash flows for the ~~three~~six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025 6 Notes to condensed consolidated unaudited financial statements 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 1415 Item 3. Quantitative and Qualitative Disclosures About Market Risk 2123 Item 4. Controls and Procedures 2124 PART II — OTHER INFORMATION Item 1. Legal Proceedings 2325 Item 1A. Risk Factors 2325 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 2325 Item 3. Defaults Upon Senior Securities 2325 Item 4. Mine Safety Disclosures 2325 Item 5. Other Information 2325 Item 6. Exhibits 2426

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Balance Sheets

~~December~~March 31, ~~2025~~2026 and September 30, 2025


	~~December~~March		September
	~~2025~~2026		2025
	(Unaudited)
ASSETS
Current assets:
Cash	$	~~778~~643,~~753~~064	$	744,613
Accounts receivable, less allowance for credit losses of $2.3 million at December 2025 and $2.4 million at September 2025		69,140,693		73,192,069
Accounts receivable, less allowance for credit losses of $2.4 million at March 2026 and $2.4 million at September 2025		72,803,828		73,192,069
Inventories, net		~~144~~150,~~398~~695,~~247~~783		153,276,545
Income taxes receivable		—30,156		140,986
Prepaid expenses and other current assets		1516,~~643~~060,~~754~~448		12,150,645
Total current assets		229,961,447		239,504,858
Assets held for sale		943,638		—
Total current assets		241,176,917		239,504,858

Property and equipment, net		~~106~~111,~~101~~781,~~670~~351		107,844,655
Operating lease right-of-use assets, net		2928,~~633~~527,~~198~~753		30,488,841
Goodwill		5,778,325		5,778,325
Other intangible assets, net		4,~~124~~008,~~433~~507		4,240,359
Other assets		3,~~110~~194,~~244~~416		3,231,488
Total assets	$	~~378~~394,~~709~~467,~~317~~269	$	391,088,526

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4869,~~459~~904,~~134~~304	$	69,532,355
Accrued expenses		1415,~~468~~552,~~462~~569		15,459,406
Accrued wages, salaries and bonuses		35,~~385~~155,~~796~~787		6,745,698
Income taxes payable		360,668		—
Current operating lease liabilities		7,361,830		7,862,117
Current operating lease liabilities		7,579,283		7,862,117
Current maturities of long-term debt		5,513,687		5,471,310
Current maturities of long-term debt		5,517,971		5,471,310
Current mandatorily redeemable non-controlling interest		7,459,135		7,020,895
Current mandatorily redeemable non-controlling interest		7,343,535		7,020,895
Total current liabilities		110,947,312		112,091,781
Total current liabilities		87,114,849		112,091,781

Credit facilities		~~140~~137,~~682~~063,~~183~~059		126,804,775
Deferred income tax liability, net		3,~~791~~251,~~416~~034		4,048,070
Long-term operating lease liabilities		2221,~~240~~340,~~107~~946		22,845,456
Long-term debt, less current maturities		98,~~624~~199,~~864~~693		11,033,949
Other long-term liabilities		1,~~141~~297,~~885~~832		1,193,081

Shareholders’ equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized		—		—
Common stock, $.01 par value, 3,000,000 shares authorized, 650,709 shares outstanding at December 2025 and 635,609 shares outstanding at September 2025		9,950		9,799
Common stock, $.01 par value, 3,000,000 shares authorized, 976,028 shares outstanding at March 2026 and 953,378 shares outstanding at September 2025		13,203		9,799
Additional paid-in capital		3738,~~539~~085,~~841~~548		36,991,031
Retained earnings		~~108~~106,~~969~~673,~~480~~900		108,475,842
Treasury stock at cost		(32,405,258)		(32,405,258)
Total shareholders’ equity		~~114~~112,~~114~~367,~~013~~393		113,071,414
Total liabilities and shareholders’ equity	$	~~378~~394,~~709~~467,~~317~~269	$	391,088,526

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

Table of Contents

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Operations

for the three and six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025


	For the three months ended ~~December~~March				For the six months ended March
	~~2025~~2026		~~2024~~2025		2026		2025
Sales (including excise taxes of $143.1 million and $143.4 million, respectively)	$	730,055,330	$	711,273,256
Sales (including excise taxes of $138.0 million and $126.1 million, and $281.1 and $269.5 million, respectively)	$	715,652,441	$	619,503,087	$	1,445,707,771	$	1,330,776,344
Cost of sales		~~682~~672,~~007~~163,~~003~~242		~~664~~576,~~379~~475,~~704~~202		1,354,170,245		1,240,854,907
Gross profit		4843,~~048~~489,~~327~~199		4643,~~893~~027,~~552~~885		91,537,526		89,921,437
Selling, general and administrative expenses		41,~~591~~383,~~659~~448		40,~~587~~107,~~630~~953		82,975,108		80,695,584
Depreciation and amortization		2,~~513~~490,~~773~~471		2,~~635~~458,~~601~~027		5,004,243		5,093,628
		4443,~~105~~873,~~432~~919		4342,~~223~~565,~~231~~980		87,979,351		85,789,212
Operating income		3,942,895		3,670,321
Operating income (loss)		(384,720)		461,905		3,558,175		4,132,225

Other expense (income):
Interest expense		2,~~661~~228,~~636~~039		2,~~846~~266,~~621~~407		4,889,675		5,113,028
Change in fair value of mandatorily redeemable non-controlling interest		~~322~~115,~~640~~599		~~194~~272,~~812~~856		438,240		467,668
Other (income), net		(79126,~~345~~877)		(~~111~~56,~~531~~398)		(206,223)		(167,930)
		2,~~904~~216,~~931~~761		2,~~929~~482,~~902~~865		5,121,692		5,412,766
Income from operations before income taxes		1,037,964		740,419
Income (loss) from operations before income taxes		(2,601,481)		(2,020,960)		(1,563,517)		(1,280,541)
Income tax expense		245,000		392,000
Income tax expense (benefit)		(427,000)		(431,000)		(182,000)		(39,000)
Net income available to common shareholders	$	792,964	$	348,419
Net income (loss) available to common shareholders	$	(2,174,481)	$	(1,589,960)	$	(1,381,517)	$	(1,241,541)

Basic earnings per share available to common shareholders	$	1.29	$	0.57
Basic earnings (loss) per share available to common shareholders	$	(2.34)	$	(1.72)	$	(1.49)	$	(1.35)
Diluted earnings per share available to common shareholders	$	1.28	$	0.57
Diluted earnings (loss) per share available to common shareholders	$	(2.34)	$	(1.72)	$	(1.49)	$	(1.35)

Basic weighted average shares outstanding		~~616~~930,~~788~~727		~~611~~922,~~322~~857		927,906		919,870
Diluted weighted average shares outstanding		~~618~~930,~~101~~727		~~613~~922,~~573~~857		927,906		919,870

Dividends paid per common share	$	0.1831	$	0.1831	$	0.43	$	0.43

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 six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025


							Additional
	Common Stock			Treasury Stock			Paid-in		Retained
	Shares	Amount		Shares	Amount		Capital		Earnings		Total
THREE MONTHS ENDED DECEMBER 2024
THREE MONTHS ENDED MARCH 2025
Balance, October 1, 2024	964,945	$	9,648	(334,583)	$	(31,272,163)	$	34,439,735	$	108,552,565	$	111,729,785
Balance, January 1, 2025	1,297,814	$	9,799	(329,656)	$	(31,272,163)	$	35,077,446	$	108,604,071	$	112,419,153
Dividends on common stock, $0.46 per share	—		—	—		—		—		(296,913)		(296,913)
Dividends on common stock, $0.12 per share	—		—	—		—		—		(116,183)		(116,183)
Compensation expense related to equity-based awards	~~15,100~~—		~~151~~—	—		—		637,~~711~~862		—		637,862
Net income available to common shareholders	—		—	—		—		—		348,419		348,419
Net loss available to common shareholders	—		—	—		—		—		(1,589,960)		(1,589,960)
Balance, December 31, 2024	980,045	$	9,799	(334,583)	$	(31,272,163)	$	35,077,446	$	108,604,071	$	112,419,153
Balance, March 31, 2025	1,297,814	$	9,799	(329,656)	$	(31,272,163)	$	35,715,308	$	106,897,928	$	111,350,872

THREE MONTHS ENDED DECEMBER 2025
THREE MONTHS ENDED MARCH 2026
Balance, October 1, 2025	980,045	$	9,799	(344,436)	$	(32,405,258)	$	36,991,031	$	108,475,842	$	113,071,414
Balance, January 1, 2026	1,320,464	$	9,950	(344,436)	$	(32,405,258)	$	37,539,841	$	108,969,480	$	114,114,013
Dividends on common stock, $0.46 per share	—		—	—		—		—		(299,326)		(299,326)
Dividends on common stock, $0.12 per share	—		—	—		—		—		(121,099)		(121,099)
Compensation expense related to equity-based awards	~~15,100~~—		~~151~~—	—		—		548,~~810~~960		—		548,~~961~~960
Net income available to common shareholders	—		—	—		—		—		792,964		792,964
Issuance of shares for stock split	—		3,253	—		—		(3,253)				—
Balance, December 31, 2025	995,145	$	9,950	(344,436)	$	(32,405,258)	$	37,539,841	$	108,969,480	$	114,114,013
Net loss available to common shareholders	—		—	—		—		—		(2,174,481)		(2,174,481)
Balance, March 31, 2026	1,320,464	$	13,203	(344,436)	$	(32,405,258)	$	38,085,548	$	106,673,900	$	112,367,393


												Additional
		Common Stock					Treasury Stock					Paid-in			Retained
		Shares		Amount			Shares		Amount			Capital			Earnings			Total
SIX MONTHS ENDED MARCH 2025
Balance, October 1, 2024		1,275,164		$	9,648		(329,656)		$	(31,272,163)		$	34,439,735		$	108,552,565		$	111,729,785
Dividends on common stock, $0.43 per share		—			—		—			—			—			(413,096)			(413,096)
Compensation expense and issuance of stock in connection with equity-based awards		22,650			151		—			—			1,275,573			—			1,275,724
Net loss available to common shareholders		—			—		—			—			—			(1,241,541)			(1,241,541)
Balance, March 31, 2025		1,297,814		$	9,799		(329,656)		$	(31,272,163)		$	35,715,308		$	106,897,928		$	111,350,872

SIX MONTHS ENDED MARCH 2026
Balance, October 1, 2025		1,297,814		$	9,799		(344,436)		$	(32,405,258)		$	36,991,031		$	108,475,842		$	113,071,414
Dividends on common stock, $0.43 per share		—			—		—			—			—			(420,425)			(420,425)
Compensation expense and issuance of stock in connection with equity-based awards		22,650			151		—			—			1,097,770			—			1,097,921
Issuance of shares for stock split		—			3,253		—			—			(3,253)			—			—
Net loss available to common shareholders		—			—		—			—			—			(1,381,517)			(1,381,517)
Balance, March 31, 2026		1,320,464		$	13,203		(344,436)		$	(32,405,258)		$	38,085,548		$	106,673,900		$	112,367,393

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

Table of Contents

AMCON Distributing Company and Subsidiaries

Condensed Consolidated Unaudited Statements of Cash Flows

for the ~~three~~six months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025


	~~December~~March		~~December~~March
	~~2025~~2026		~~2024~~2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income available to common shareholders	$	792,964	$	348,419
Net income (loss) available to common shareholders	$	(1,381,517)	$	(1,241,541)
Adjustments to reconcile net income available to common shareholders to net cash flows from (used in) operating activities:
Adjustments to reconcile net income (loss) available to common shareholders to net cash flows from (used in) operating activities:
Depreciation		24,~~397~~772,~~847~~391		24,~~501~~824,~~175~~777
Amortization		~~115~~231,~~926~~852		~~134~~268,~~426~~851
(Gain) loss on sales of property and equipment		4(94,~~869~~394)		(~~840~~44,229)
Equity-based compensation		~~548~~1,~~961~~097,921		~~637~~1,~~862~~275,724
Deferred income taxes		(~~256~~797,~~654~~036)		69(571,~~577~~672)
Provision for credit losses		~~(49~~4,000)		~~112~~(164,~~746~~616)
Inventory allowance		(8,~~538~~695)		2432,~~405~~688
Change in fair value of contingent consideration		—		(1,453,452)
Change in fair value of mandatorily redeemable non-controlling interest		~~322~~438,~~640~~240		~~194~~467,~~812~~668
Changes in assets and liabilities:
Changes in assets and liabilities, net of effects of business combinations:
Accounts receivable		4384,~~100,376~~241		~~(49~~5,~~572)~~749,877
Inventories		82,~~869~~589,~~760~~457		(3013,~~293~~324,~~089~~448)
Prepaid and other current assets		(3,~~493~~909,~~109~~803)		~~668~~(245,~~184~~028)
Other assets		~~121~~37,~~244~~072		(~~190~~50,~~306~~666)
Accounts payable		(2132,~~064,250~~480)		(62,~~911~~898,~~400)~~936
Accrued expenses and accrued wages, salaries and bonuses		(41,~~565~~540,~~585~~457)		(64,~~055~~490,~~070~~508)
Other long-term liabilities		~~(51~~104,~~196)~~751		71237,~~823~~652
Income taxes payable and receivable		~~501~~110,~~654~~830		~~322~~380,~~423~~354
Net cash flows from (used in) operating activities		~~(11~~2,~~695~~006,~~015)~~373		(395,~~867~~449,~~877~~633)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(~~678~~9,~~402~~328,436)		(36,~~453~~451,~~711~~773)
Proceeds from sales of property and equipment		9174,~~700~~534		1267,~~442~~208
Net cash flows from (used in) investing activities		(668,702)		(3,441,269)
Acquisition of Arrowrock Supply		—		(6,131,527)
Net cash flows from (used in) investing activities		(9,153,902)		(12,516,092)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities		~~699~~1,~~127~~369,~~269~~524,265		~~713~~1,~~853~~262,~~301~~647,310
Repayments under revolving credit facilities		(~~685~~1,~~249~~359,~~861~~265,981)		(~~669~~1,~~224~~241,~~693~~627,743)
Principal payments on long-term debt		(12,~~362~~791,~~424~~879)		(12,~~340~~627,~~204~~680)
Dividends on common stock		(~~117~~420,~~127~~425)		(~~116~~413,~~184~~096)
Net cash flows from (used in) financing activities		127,~~397~~045,~~857~~980		4317,~~172~~978,~~220~~791
Net change in cash		34(101,~~140~~549)		~~(136~~13,~~926)~~066
Cash, beginning of period		744,613		672,788
Cash, end of period	$	~~778~~643,~~753~~064	$	~~535~~685,~~862~~854

Supplemental disclosure of cash flow information:
Cash paid during the period for interest, net of amounts capitalized	$	24,~~635~~962,~~661~~484	$	25,~~815~~215,~~683~~092
Cash paid during the period for income taxes, net of refunds		499,080		151,318

Supplemental disclosure of non-cash information:
Equipment acquisitions classified in accounts payable	$	32445,~~413~~813	$	~~772~~841,~~820~~018
Dividends declared, not paid		182,199		180,729

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”) serves customers in 34 states through two business segments:

●

Our wholesale distribution segment (the “Wholesale Segment”), which includes our Team Sledd, LLC (“Team Sledd”) and Henry’s Foods, Inc. (“Henry’s”) subsidiaries, 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 primarily in the Central, Rocky Mountain, Great Lakes, Mid-South and Mid-Atlantic regions of the United States.

●

Our retail health food segment (the “Retail Segment”) operates 15 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 8,500 retail outlets including convenience stores, grocery stores, liquor stores, drug stores, and tobacco shops. We currently distribute over 20,000 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. We have licenses, and operate, in 34 states, and are the third (3rd) largest convenience store distributor by geographic territory served.

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.

During Q2 2026, we purchased a distribution facility in Ohio for $8.0 million using borrowings from the Company’s revolving credit facilities. Our Wholesale Segment now operates 1415 distribution centers located in Colorado, Idaho, Illinois, Indiana, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Tennessee and West Virginia. These distribution centers, combined with cross-dock facilities, include approximately 1.78 million square feet of permanent floor space. Our principal suppliers include Altria, RJ Reynolds, ITG Brands, Hershey, Kellanova, Kraft Heinz, Mars Wrigley, General Mills, Procter and Gamble, Ferrero and other major Consumer Packaged Goods and Foodservice suppliers. We also work closely with our customer base to source private label products on their behalf in a wide variety of categories. In addition, we market our own private label lines of water, candy products, batteries, and other products. We do not maintain any long-term purchase contracts with our suppliers. However, we do participate in a number of programs with our major vendors to support in-stock positions of our key products.

RETAIL SEGMENT

Market banners. 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. These stores carry over 32,000 different nationally 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.

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FINANCIAL STATEMENTS

The Company’s fiscal year ends on September 30th. 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, 2025, 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 ~~December~~March 31, ~~2025~~2026 and ~~December~~March 31, ~~2024~~2025 have been referred to throughout this Quarterly Report as Q1Q2 2026 and Q1Q2 2025, respectively. The fiscal balance sheet dates as of ~~December~~March 31, ~~2025~~2026 and September 30, 2025 have been referred to as ~~December~~March ~~2025~~2026 and September 2025, respectively. Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on previously reported net income or shareholders' equity.

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 entity’s 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 this ASU and its potential impact on our consolidated financial statements.

In August 2025, the FASB issued ASU No. 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which amended the guidance in Topic 326 to allow entities to elect a practical expedient to assume the current conditions as of the balance sheet date remain unchanged over the remaining life of an asset in developing reasonable and supportable forecasts as part of estimating expected credit losses. This amended guidance is effective for annual periods beginning after December 15, 2025 (fiscal 2027 for the Company), and interim periods within those annual periods, with early adoption permitted. The Company is currently reviewing this ASU and its potential impact on our consolidated financial statements.

2. 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 $0.9 million at both ~~December~~March ~~2025~~2026 and September 2025. 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.

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3. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill at ~~December~~March ~~2025~~2026 and September 2025 was as follows:


	~~December~~March		September
	~~2025~~2026		2025
Wholesale Segment	$	5,778,325	$	5,778,325

8Other intangible assets at March 2026 and September 2025 consisted of the following:

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Other intangible assets at December 2025 and September 2025 consisted of the following:


	~~December~~March		September
	~~2025~~2026		2025
Customer lists (Wholesale Segment) (less accumulated amortization of $0.7 million at December 2025 and $0.7 million at September 2025)	$	2,708,683	$	2,766,216
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 December 2025 and $0.3 million at September 2025)		39,583		44,333
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 $0.6 million at December 2025 and $0.6 million at September 2025)		876,167		929,810
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,~~124~~008,~~433~~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 Company’s consolidated balance sheets represent amounts allocated to its Wholesale Segment, which totaled approximately $5.8 million at both ~~December~~March ~~2025~~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 Company’s impairment assessments since its fiscal year ended September 2025.

At ~~December~~March ~~2025~~2026, 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 five years, and a tradename in our Wholesale Segment which 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 ~~for~~and ~~each~~$0.2 ofmillion for the three- and six-month periods ended ~~December~~March ~~2025~~2026, respectively, and ~~December~~approximately ~~2024~~$0.1 million and $0.3 million for the three- and six-month periods ended March 2025.

Estimated future amortization expense related to identifiable intangible assets with finite lives was as follows at ~~December~~March ~~2025~~2026:


	~~December~~March
	~~2025~~2026
Fiscal 2026 (1)	$	~~347~~231,~~777~~851
Fiscal 2027		463,703
Fiscal 2028		451,037
Fiscal 2029		444,703
Fiscal 2030		301,656
Fiscal 2031 and thereafter		1,615,557
	$	3,~~624~~508,~~433~~507

(1) Represents amortization for the remaining ~~nine~~six months of Fiscal 2026.

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4. DIVIDENDS

The Company paid cash dividends on its common stock totaling $0.13 million inand ~~each~~$0.4 ofmillion for the three- and six-month periods ended ~~December~~March ~~2025 and December 2024. During Q1~~ 2026, ~~the~~respectively, ~~Company~~and ~~declared a~~ $0.283 ~~per~~million ~~share~~and ~~special dividend totaling approximately~~ $0.24 million ~~that~~for ~~was included in accrued expenses on~~ the ~~condensed~~three- ~~consolidated balance sheet at December 2025~~ and ~~will~~six-month beperiods ~~paid~~ended inMarch ~~Q2 2026. During Q1~~ 2025, ~~the Company declared a $0~~respectively.~~28 per share special dividend totaling approximately $0.2 million that was paid in Q2 2025.~~

5On March 20, 2026, the Company effected a three-for-two stock split of its common stock, $.01 ~~EARNINGS~~par ~~PER~~value, ~~SHARE~~in the form of a 50% stock dividend on its issued and outstanding shares as of the record date of March 6, 2026. All share and per share data in the condensed consolidated financial statements and related footnotes contained in this report have been adjusted to give retroactive effect to the stock split for all periods presented.

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 period5. ~~Diluted~~EARNINGS ~~earnings~~(LOSS) ~~per~~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.SHARE

9Basic earnings (loss) per share available to common shareholders is calculated by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding for each period. Diluted earnings (loss) per share available to common shareholders is calculated by dividing net income (loss) available to common shareholders by the sum of the weighted average number of common shares outstanding and the weighted average dilutive equity awards.

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	For the three months ended December
	2025				2024
	Basic		Diluted		Basic		Diluted
Weighted average number of common shares outstanding		616,788		616,788		611,322		611,322
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)		—		1,313		—		2,251
Weighted average number of shares outstanding		616,788		618,101		611,322		613,573
Net income available to common shareholders	$	792,964	$	792,964	$	348,419	$	348,419

Net earnings per share available to common shareholders	$	1.29	$	1.28	$	0.57	$	0.57

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


		For the three months ended March
		2026						2025
		Basic			Diluted			Basic			Diluted
Weighted average number of common shares outstanding			930,727			930,727			922,857			922,857
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)			—			—			—			—
Weighted average number of shares outstanding			930,727			930,727			922,857			922,857
Net income (loss) available to common shareholders		$	(2,174,481)		$	(2,174,481)		$	(1,589,960)		$	(1,589,960)

Net earnings (loss) per share available to common shareholders		$	(2.34)		$	(2.34)		$	(1.72)		$	(1.72)

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


		For the six months ended March
		2026						2025
		Basic			Diluted			Basic			Diluted
Weighted average number of common shares outstanding			927,906			927,906			919,870			919,870
Weighted average net additional shares outstanding assuming dilutive options exercised and proceeds used to purchase treasury stock (1)			—			—			—			—
Weighted average number of shares outstanding			927,906			927,906			919,870			919,870
Net income (loss) available to common shareholders		$	(1,381,517)		$	(1,381,517)		$	(1,241,541)		$	(1,241,541)

Net earnings (loss) per share available to common shareholders		$	(1.49)		$	(1.49)		$	(1.35)		$	(1.35)

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

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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 Henry’s (the “Henry’s Facility”) ~~and,~~ (collectively, the “Facilities”) and long-term debt agreements with banks. The Team Sledd Facility and the Henry’s 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 ~~December~~March ~~2025~~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 Henry’s 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 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 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 ~~December~~March ~~2025~~2026 was $~~229~~234.49 million, of which $~~140~~137.71 million was outstanding, leaving $8897.78 million available.

The average interest rate of the Facilities was 5.2907% at ~~December~~March ~~2025~~2026. For the ~~three~~six months ended ~~December~~March ~~2025~~2026, the peak borrowings under the Facilities was $193.2 million, and the average borrowings and average availability under the Facilities was $~~163~~154.6 million and $7980.27 million, respectively.

Cross Default and Co-Terminus Provisions

The Team Sledd Facility and Team Sledd’s two notes payable contain cross default provisions. The Henry’s Facility and the Henry’s note payable also contain cross default provisions. There were no such cross defaults for either Team Sledd or Henry’s at ~~December~~March ~~2025~~2026. Additionally, the Team Sledd Facility and the Henry’s 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. The Company and its subsidiaries, including Team Sledd and Henry’s, were in compliance with all of the financial covenants under the respective Facilities at ~~December~~March ~~2025~~2026.

Other

The Company has issued letters of credit totaling $32.19 million to its workers’ compensation insurance carriers as part of its self-insured loss control program.

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7. INCOME TAXES

The change in the Company’s effective income tax rate for the three- and six-month ~~period~~periods ended ~~December~~March ~~2025~~2026 as compared to the respective prior year ~~period~~periods was primarily related to non-deductible ~~compensation~~expenses ~~expense~~ 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.

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8. FAIR VALUE DISCLOSURES

Mandatorily Redeemable Non-Controlling Interest

Mandatorily redeemable non-controlling interest (“MRNCI”) recorded on the Company’s condensed consolidated balance sheets represents the fair value of the non-controlling interest in the Company’s strategic investment in Team Sledd. The Company owned approximately 92% of Team Sledd as of both ~~December~~March ~~2025~~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 ~~December~~March ~~2025~~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 Company’s reliance on unobservable assumptions. 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, which was 13.2% at ~~December~~March ~~2025~~2026. At ~~December~~March ~~2025~~2026, ~~and~~the contractual amount due under the MRNCI was equal to its fair value. At September 2025, the difference between the contractual amount due under the MRNCI and its fair value was approximately $0.~~2 million and $0.~~3 million~~, respectively~~.

A summary of the MRNCI activity is as follows:


	For the Three Months Ended ~~December~~March 31,
	~~2025~~2026		~~2024~~2025
Fair value, beginning of period	$	7,~~020~~343,~~895~~536	$	8,~~211~~406,~~500~~312
Redemption of non-controlling interests		—		—
Change in fair value		115,599		272,856
Distributions to non-controlling interest		—		—
Fair value, end of period	$	7,459,135	$	8,679,168
Change in fair value		322,640		194,812
Fair value, end of period	$	7,343,535	$	8,406,312


	For the Six Months Ended March 31,
	2026		2025
Fair value, beginning of period	$	7,020,895	$	8,211,500
Change in fair value		438,240		467,668
Fair value, end of period	$	7,459,135	$	8,679,168

Contingent Consideration

In April 2024, the Company acquired substantially all of the net operating assets of Burklund Distributors, Inc. (“Burklund”). A portion of the consideration exchanged in the acquisition of Burklund was in the form of contingent consideration, which the Company recorded at fair value as of the acquisition date. At each reporting date, the Company reevaluates whether the achievement of the targets to trigger the minimum payout of any contingent consideration is probable. In Q1 2025, the Company determined that the achievement of the targets to trigger the minimum payout of any contingent consideration was not probable, and adjusted the fair value of its contingent consideration liability and recognized operating income of approximately $1.5 million, which was recorded as a reduction of selling, general and administrative expenses in the condensed consolidated statements of operations. At ~~December~~March ~~2025~~2026, the Company reaffirmed that the achievement of the targets to trigger the minimum payout of any contingent consideration was not probable.

9. EQUITY-BASED INCENTIVE AWARDS

The Company has two equity-based incentive plans, the 2018 Omnibus Incentive Plan and the 2022 Omnibus Incentive Plan (collectively, the “Omnibus Plans”), which provide for equity incentives to employees. Each Omnibus Plan is designed with the intent of encouraging employees to acquire a vested interest in the growth and performance of the Company. The Omnibus Plans together permit the issuance of up to 120,000 shares of the Company’s common stock in the form of stock options, restricted stock awards, restricted stock units, performance share awards as well as awards such 12

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~~as stock appreciation rights, performance units, performance shares, bonus shares, and dividend share awards payable in the form of common stock or cash~~9. ~~The~~BUSINESS ~~number~~SEGMENTS of shares issuable under the Omnibus Plans is subject to customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. At December 2025, awards with respect to a total of 98,407 shares, net of forfeitures, have been awarded pursuant to the Omnibus Plans, and awards with respect to another 21,593 shares may be awarded under the Omnibus Plans.

~~Restricted~~The ~~Stock~~Company ~~Awards~~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 Company’s chief operating decision maker (“CODM”) is the chief executive officer, who utilizes operating income (loss) to evaluate the Company’s business operations and allocate the Company’s 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.

At December 2025, the Compensation Committee of the Board of Directors had authorized and approved the following restricted stock awards to members of the Company’s management team pursuant to the provisions of the Company’s Omnibus Plans:


		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 (loss) from operations before taxes			2,158,609			122,127			(4,882,217)			(2,601,481)
Total assets			375,750,974			17,384,403			1,331,892			394,467,269
Capital expenditures (1)			8,936,661			126,772			—			9,063,433


	Restricted Stock Awards (1)		Restricted Stock Awards (2)		Restricted Stock Awards (3)
Date of award:		October 2023		October 2024		October 2025
Original number of awards issued:		15,100		15,100		15,100
Service period:		36 months		36 months		36 months
Estimated fair value of award at grant date:	$	2,762,000	$	2,069,000	$	1,757,000
Non-vested awards outstanding at December 2025:		5,034		10,067		15,100
Fair value of non-vested awards at December 2025 of approximately:	$	558,000	$	1,115,000	$	1,673,000

(1) Includes $8.0 million purchase of a distribution facility in Ohio.

(1) 10,066 of the restricted stock awards were vested as of December 2025. The remaining 5,034 restricted stock awards will vest in October 2026.


		Wholesale			Retail
		Segment			Segment			Other			Consolidated
THREE MONTHS ENDED MARCH 2025
External revenue:
Cigarettes		$	374,341,125		$	—		$	—		$	374,341,125
Tobacco			121,839,251			—			—			121,839,251
Confectionery			39,765,350			—			—			39,765,350
Health food			—			11,902,524			—			11,902,524
Foodservice & other			71,654,837			—			—			71,654,837
Total external revenue			607,600,563			11,902,524			—			619,503,087
Cost of sales			569,044,001			7,431,201			—			576,475,202
Selling, general and administrative expenses			33,319,064			3,773,571			3,015,318			40,107,953
Depreciation			2,056,696			266,906			—			2,323,602
Amortization			134,425			—			—			134,425
Operating income (loss)			2,821,616			430,846			(2,790,557)			461,905
Interest expense			—			—			2,266,407			2,266,407
Income (loss) from operations before taxes			2,582,199			453,806			(5,056,965)			(2,020,960)
Total assets			373,458,943			17,342,095			1,202,999			392,004,037
Capital expenditures			2,859,192			207,068			—			3,066,260

(2) 5,033 of the restricted stock awards were vested as of December 2025. 5,033 restricted stock awards will vest in October 2026 and 5,034 will vest in October 2027.

(3) The 15,100 restricted stock awards will vest in equal amounts in October 2026, October 2027 and October 2028.

There is no direct cost to the recipients of the restricted stock awards, except for any applicable taxes. The restricted stock awards provide that the recipients receive common stock in the Company, subject to certain restrictions, until such time as the awards vest. The recipients of the restricted stock awards are entitled to the customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. All cash dividends and/or distributions payable to restricted stock recipients will be held in escrow until all the conditions of vesting have been met. The compensation expense recorded in the Company’s Statement of Operations reflects the straight-line amortized fair value.

~~The following summarizes restricted stock award activity under the Omnibus Plans during Q1 2026:~~13


	Number	Weighted
	of	Average
	Shares	Fair Value
Nonvested restricted stock awards at September 2025	30,201	$	113.76
Granted	15,100		116.37
Vested	(15,100)		116.66
Expired	—		—
Nonvested restricted stock awards at December 2025	30,201	$	110.80

Income from operations before income taxes included compensation expense related to the amortization of the Company’s restricted stock awards of approximately $0.5 million and $0.6 million during Q1 2026 and Q1 2025, respectively. Total unamortized compensation expense related to these awards at December 2025 and September 2025 was approximately $3.5 million and $2.3 million, respectively.

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10. BUSINESS SEGMENTS


		Wholesale			Retail
		Segment			Segment			Other			Consolidated
SIX MONTHS ENDED MARCH 2026
External revenue:
Cigarettes		$	906,342,083		$	—		$	—		$	906,342,083
Tobacco			274,931,852			—			—			274,931,852
Confectionery			89,576,141			—			—			89,576,141
Health food			—			22,541,883			—			22,541,883
Foodservice & other			152,315,812			—			—			152,315,812
Total external revenue			1,423,165,888			22,541,883			—			1,445,707,771
Cost of sales			1,339,723,488			14,446,757			—			1,354,170,245
Selling, general and administrative expenses			69,845,098			7,783,479			5,346,531			82,975,108
Depreciation			4,321,240			451,151			—			4,772,391
Amortization			231,852			—			—			231,852
Operating income (loss)			9,044,210			(139,504)			(5,346,531)			3,558,175
Interest expense			—			—			4,889,675			4,889,675
Income (loss) from operations before taxes			8,757,782			(85,093)			(10,236,206)			(1,563,517)
Total assets			375,750,974			17,384,403			1,331,892			394,467,269
Capital expenditures (1)			9,512,260			220,605			—			9,732,865

~~The Company has two reportable business segments: the wholesale distribution of consumer products~~ (~~the Wholesale Segment~~1), ~~and~~Includes ~~the~~$8.0 ~~retail~~million ~~sale~~purchase of health and natural food products (the Retail Segment). The Company’s chief operating decision maker (“CODM”) is the chief executive officer, who utilizes operating income (loss) to evaluate the Company’s business operations and allocate the Company’s resources to these business segments, which are aggregated based on a ~~range~~distribution offacility ~~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~~Ohio. ~~Included in the “Other” column are intercompany eliminations and assets held and charges incurred and income earned by our holding company.~~

Wholesale

Retail

Segment

Other

Consolidated

THREE MONTHS ENDED DECEMBER 2025

SIX MONTHS ENDED MARCH 2025

External revenue:

Cigarettes

~~446~~812,~~540~~363,~~356~~123

—

~~446~~812,~~540~~363,~~356~~123

Tobacco

~~143~~257,~~684~~736,~~672~~729

—

~~143~~257,~~684~~736,~~672~~729

Confectionery

4683,~~724~~798,~~565~~529

—

4683,~~724~~798,~~565~~529

Health food

—

1022,~~788~~427,~~420~~859

—

1022,~~788~~427,~~420~~859

Foodservice & other

82154,~~317~~450,~~317~~104

—

82154,~~317~~450,~~317~~104

Total external revenue

~~719~~1,~~266~~308,~~910~~348,485

1022,~~788~~427,~~420~~859

—

~~730~~1,~~055,~~330,776,344

Cost of sales

~~675~~1,~~162~~226,~~716~~688,206

614,~~844~~166,~~287~~701

—

~~682~~1,~~007~~240,~~003~~854,907

Selling, general and administrative expenses

3466,~~957~~882,~~140~~445

37,~~942~~629,~~166~~538

26,~~692~~183,~~353~~601

4180,~~591~~695,~~659~~584

Depreciation

24,~~162~~293,~~254~~179

~~235~~531,~~593~~598

—

24,~~397~~824,~~847~~777

Amortization

~~115~~268,~~926~~851

—

~~115~~268,~~926~~851

Operating income (loss)

69,~~868~~373,~~875~~148

~~(233~~100,~~627)~~024

(25,~~692~~340,~~353~~947)

34,~~942~~132,~~895~~225

Interest expense

—

25,~~661~~113,~~636~~028

Income (loss) from operations before taxes

69,~~599~~027,~~173~~534

~~(207~~145,~~220)~~899

(510,~~353~~453,~~989~~974)

(1,~~037~~280,~~964~~541)

Total assets

~~360~~373,~~118~~458,~~018~~943

17,~~233~~342,~~732~~095

1,~~357~~202,~~567~~999

~~378~~392,~~709~~004,~~317~~037

Capital expenditures

~~575~~5,~~599~~968,999

93306,~~833~~844

—

~~669~~6,~~432~~275,843


	Wholesale		Retail
	Segment		Segment		Other		Consolidated
THREE MONTHS ENDED DECEMBER 2024
External revenue:
Cigarettes	$	438,021,998	$	—	$	—	$	438,021,998
Tobacco		135,897,478		—		—		135,897,478
Confectionery		44,033,179		—		—		44,033,179
Health food		—		10,525,335		—		10,525,335
Foodservice & other		82,795,266		—		—		82,795,266
Total external revenue		700,747,921		10,525,335		—		711,273,256
Cost of sales		657,644,205		6,735,499		—		664,379,704
Selling, general and administrative expenses		34,181,275		3,855,967		2,550,388		40,587,630
Depreciation		2,236,483		264,692		—		2,501,175
Amortization		134,426		—		—		134,426
Operating income (loss)		6,551,532		(330,822)		(2,550,389)		3,670,321
Interest expense		—		—		2,846,621		2,846,621
Income (loss) from operations before taxes		6,445,335		(307,907)		(5,397,009)		740,419
Total assets		386,653,248		16,815,247		1,200,775		404,669,270
Capital expenditures		3,109,807		99,776		—		3,209,583

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

BUSINESS UPDATE

Similar to other retail formats, the convenience retailing sector we service continues to operate in a challenging operating environment, impacted in part by weaker consumer spending. At the same time, the cost structures for wholesale distributors such as our Company have been impacted by the cumulative impact of inflation over a multi-year period. These inflationary pressures have increased operating costs in all areas of our business such as product costs, fuel, labor and employee benefits, equipment, and insurance.

We continue to closely monitor economic conditions, including the impact ~~that~~of ~~changes~~recent ingeopolitical ~~tariff~~events, ~~rates~~tariffs ~~may~~and ~~have~~constraints on ~~our~~global ~~operations~~shipping routes and supply chains. Additionally, we remain focused on proposals from regulatory bodies, including the United States Food and Drug Administration (“FDA”), which is evaluating potential limitations and/or prohibitions on the sale of certain products sold by our Company such as cigarettes (including menthol cigarettes), e-cigarettes, tobacco, and vaping products.

In ~~response~~recent ~~to this operating environment~~years, the Company has ~~made~~completed a number of forward-looking strategic investments to enhance its overall competitive position ~~over time~~. These ~~strategic~~ investments include ~~expanding~~acquisitions, ~~the~~opening ~~depth~~new ofdistribution ~~our~~facilities, ~~foodservice~~facility ~~programs~~upgrades, and ~~facilities,~~new ~~expansion~~investments ofin our ~~geographic~~foodservice ~~coverage~~and ~~footprint~~technology toplatforms. ~~enhance~~Our ~~services~~Company now ranks as the third (3rd) largest Convenience Distributor in the United States as measured by territory. We believe these targeted investments will be a competitive differentiator over time and will set the stage for future growth~~-oriented~~ ~~customers,~~as major manufacturers and ~~continued~~leading ~~investments~~convenience instore ~~proprietary~~chains are increasingly relying on large distributors who can both cover wide geographic footprints and deploy unique merchandising and technology solutions.

Our Company has made a number of forward-looking, targeted investments in recent years (acquisitions, the opening of new distribution centers, etc.) and now ranks as the third largest Convenience Distributor in the United States as measured by territory covered. We believe this geographic footprint will provide an attractive platform for growth in the coming years and positions the Company well with major consumer goods manufacturers who are increasingly relying on large distributors to drive market penetration and operational efficiencies.

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 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 to our business, customers, or employees associated with social unrest, labor disputes (strikes), natural disasters, domestic/political unrest and/or acts of violence, or any restrictions, regulations, or security measures implemented by governmental bodies in response to these items,

●

the potential impact that ongoing or proposed increases or fluctuations in trade tariffs and/or changes to trade policies may have on raw materials or finished goods sourced from abroad which could result in higher prices for the products we sell while also decreasing consumer disposable income and demand,

● risks associated with ~~new~~ tariffs, ordisruptions ~~other~~to ~~macroeconomic~~global ~~considerations~~shipping ~~such~~channels asand ~~changes~~supply chains, including those incident to ~~government~~wars ~~programs~~and blockades, or ~~funds~~other macroeconomic factors which may impact ~~discretionary~~our ~~consumer~~cost ~~spending,~~structure ~~operating costs,~~ and overall business risk, particularly asrelated itto ~~relates~~oil/fuel/energy tocosts, product and equipment costs, wages, ~~fuel,~~ interest, food ingredient and commodity prices, consumer demand and disposable income, customer credit risk, and ~~ultimately~~ our ability to ~~absorb the impact of these items or~~ pass ~~them~~ on ~~where~~higher ~~possible~~operating costs,

● risks associated with ~~continued~~ weakness in retail level demand within the convenience store industry including declining demand for cigarette products,

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●	risks associated with the emergence of artificial intelligence (AI) and how it may impact our industry, business, and/or ability to compete in the future,

●	risks associated with workforce availability and/or wage pressures which may be impacted by economic conditions, changes in governmental policies, or other changes in the operating environment which may impact our labor force,

●

risks associated with all forms of insurance renewals and the risk that the Company may not be able to renew various insurance with adequate levels of coverage, at favorable rates, or obtain insurance at all based upon market conditions within the insurance industry and/or because of the industry in which the Company operates,

●	risks associated with unrest in certain global regions which could further disrupt world supply chains, manufacturing centers, and shipping routes, impacting commodity/product availability and/or cost, as well as consumer demand trends,

●

risks associated with higher interest rates or prolonged periods of higher interest rates and the related impact on demand, customer credit risk, profitability and cash flows for both the Company and its customer base, particularly as it relates to variable interest rate borrowings, as well as the 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,

●

regulations, potential bans, limitations and/or litigation related to the manufacturing, distribution, and sale of certain cigarette, e-cigarette, tobacco, and vaping products imposed by the FDA, state or local governmental agencies, or other parties, including proposed and pending regulations and/or product approvals/authorizations related to the manufacturing, distribution, and sale of certain menthol, vaping, and flavored tobacco products, including proposed rules which would limit nicotine levels in certain cigarette and 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,

●	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 macroeconomic, black swan, or other similar events (e.g., stock market crashes, global unrest, supply chain disruptions, pandemics, etc.) that may impact the Company’s sales volumes and/or cost structure and for which the Company has limited ability within its business model to offset the related financial impact,

●

risks associated with the acquisition of businesses or assets, capital asset expenditure projects by either of our business segments such as the development of new facilities/locations or upgrades to distribution centers or retail stores, including, but not limited to, risks associated with consummating such transactions on expected terms or timing, purchase price and business valuation and recording risks, customer turnover and retention 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,

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●	risks associated with opening new, or closing unprofitable, retail stores,

●	risks to our brick and mortar retail business and potentially to our wholesale distribution business if online shopping formats such as Amazon™ continue to grow in popularity and further disrupt traditional sales channels,

●	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 human or artificial intelligence-generated 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 its potential impact on discretionary consumer spending,

●	decreased availability of capital resources and/or our access to credit to adequately fund our operations,

●	domestic regulatory and legislative risks,

●

adverse weather including the impact of climate change and/or other sudden and unanticipated changes in weather conditions that may materially impact our operations temporarily (e.g., wildfires, floods, wind storms, tornadoes, extreme temperature changes, ice storms, blizzards, or other violent storms),

●	consolidation trends within the convenience store, wholesale distribution, and retail health food industries, 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, 2025, as filed with the Securities and Exchange Commission. There have been no significant changes with respect to these estimates and related policies during the three months ended December 2025.17

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~~FIRST~~CRITICAL ~~FISCAL~~ACCOUNTING ~~QUARTER 2026 (Q1 2026)~~ESTIMATES

~~The~~Certain ~~following~~accounting ~~discussion~~estimates ~~and~~used ~~analysis~~in ~~includes~~the preparation of the Company’s condensed consolidated unaudited financial statements (“financial statements”) require us to make judgments and estimates and the financial results ofwe ~~operations~~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 ~~three~~fiscal ~~months~~year ended ~~December~~September 30, 2025, as filed with the Securities and ~~December~~Exchange ~~2024:~~Commission. There have been no significant changes with respect to these estimates and related policies during the six months ended March 2026.

SECOND FISCAL QUARTER 2026 (Q2 2026)

The following discussion and analysis includes the Company’s results of operations for the three and six months ended March 2026 and March 2025:

Wholesale Segment

Retail Segment

Our Retail Segment, through our Healthy Edge Retail Group subsidiary, is a specialty retailer of natural/organic groceries and operates 15 retail health food stores under the Chamberlin’s Natural Foods, Akin’s Natural Foods, and Earth Origins Market banners. 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. These stores carry over 32,000 different nationally 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.

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RESULTS OF OPERATIONS – THREE MONTHS ENDED ~~DECEMBER~~MARCH:


	~~2025~~2026			~~2024~~2025			Incr (Decr)		% Change
CONSOLIDATED:
Sales (1)	$	~~730~~715,~~055~~652,~~330~~441		$	~~711~~619,~~273~~503,~~256~~087		$	1896,~~782~~149,~~074~~354	215.65
Cost of sales		~~682~~672,~~007~~163,~~003~~242			~~664~~576,~~379~~475,~~704~~202			1795,~~627~~688,~~299~~040	216.76
Gross profit		4843,~~048~~489,~~327~~199			4643,~~893~~027,~~552~~885			1461,~~154,775~~314	21.51
Gross profit percentage		6.61	%		6.69	%

Operating expense	$	4443,~~105~~873,~~432~~919		$	4342,~~223~~565,~~231~~980		$	~~882~~1,~~201~~307,939	23.01
Operating income		3,942,895			3,670,321			272,574	7.4
Operating income (loss)		(384,720)			461,905			(846,625)	(183.3)
Interest expense		2,~~661~~228,~~636~~039			2,~~846~~266,~~621~~407			(~~184~~38,~~985~~368)	(61.57)
Change in fair value of mandatorily redeemable non-controlling interest		~~322~~115,~~640~~599			~~194~~272,~~812~~856			~~127~~(157,~~828~~257)	65(57.6)
Income tax expense		245,000			392,000			(147,000)	(37.5)
Income tax expense (benefit)		(427,000)			(431,000)			4,000	(0.9)
Net income available to common shareholders		792,964			348,419			444,545	127.6
Net income (loss) available to common shareholders		(2,174,481)			(1,589,960)			(584,521)	36.8

BUSINESS SEGMENTS:
Wholesale
Sales	$	~~719~~703,~~266~~898,~~910~~978		$	~~700~~607,~~747~~600,~~921~~563		$	1896,~~518~~298,~~989~~415	215.68
Gross profit		4439,~~104~~338,~~194~~206			4338,~~103~~556,~~716~~562			1781,~~000,478~~644	2.30
Gross profit percentage		65.16	%		6.23	%
Retail
Sales	$	1011,~~788~~753,~~420~~463		$	1011,~~525~~902,~~335~~524		$	~~263~~(149,~~085~~061)	2(1.53)
Gross profit		34,~~944~~150,~~133~~993			34,~~789~~471,~~836~~323			~~154~~(320,~~297~~330)	4(7.12)
Gross profit percentage		3635.63	%		3637.06	%

(1) Sales are reported net of costs associated with incentives provided to retailers. These incentives totaled $1012.5 million in Q1Q2 2026 and $109.02 million in Q1Q2 2025.

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; and

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

(iii) acquisitions.

SALES – Q1 2026 vs. Q1 2025

Sales in our Wholesale Segment increased $18.5 million during Q1 2026 as compared to Q1 2025. Significant items impacting sales during Q1 2026 included a $29.2 million increase in sales related to price increases implemented by cigarette manufacturers, and a $5.7 million increase in sales related to the volume and mix of products in our tobacco, confectionery, foodservice, and other categories (“Other Products”), partially offset by a $16.4 million decrease in sales related to the volume and mix of cigarette cartons sold. Sales in our Retail Segment increased approximately $0.3 million during Q1 2026 as compared to Q1 2025, primarily due to higher sales volumes in our existing stores.19

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SALES – Q2 2026 vs. Q2 2025

Sales in our Wholesale Segment increased $96.3 million during Q2 2026 as compared to Q2 2025. Significant items impacting sales during Q2 2026 included a $53.9 million increase in sales related to the volume and mix of cigarette cartons sold, a $31.6 million increase in sales related to price increases implemented by cigarette manufacturers, and a $10.8 million increase in sales related to the volume and mix of products in our tobacco, confectionery, foodservice, and other categories (“Other Products”). Sales in our Retail Segment decreased approximately $0.1 million during Q2 2026 as compared to Q2 2025, primarily due to lower sales volumes in our existing stores.

18GROSS PROFIT – Q2 2026 vs. Q2 2025

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GROSS PROFIT – Q1 2026 vs. Q1 2025

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 $1.0.8 million during Q1Q2 2026 as compared to Q1Q2 2025. Significant items impacting gross profit during Q1Q2 2026 included an increase of $1.21 million related to the volume and mix of cigarette cartons sold between the comparative periods and a $0.1 million increase related to the mix of volumes and promotions in our Other Products category, partially offset by a $0.24 million decrease in gross profit due to the timing and related benefits of cigarette manufacturer price increases. Gross profit in our Retail Segment ~~increased~~decreased approximately $0.23 million during Q1Q2 2026 as compared to Q1Q2 2025, primarily due to ana ~~increase~~decrease in gross profit related to same store sales.

OPERATING EXPENSE – Q1Q2 2026 vs. Q1Q2 2025

Operating expense includes selling, general and administrative expenses and depreciation and amortization. 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 Q1Q2 2026 operating expenses increased $01.93 million as compared to Q1Q2 2025. Significant items impacting operating expenses during Q1Q2 2026 included ~~the impact of~~ a ~~prior year (Q1 2025) reduction in operating expenses related to a~~ $1.53 million ~~contingent liability fair value adjustment, a $0.1 million~~ increase ~~related~~in toother ~~employee~~Wholesale ~~compensation~~Segment ~~and~~operating ~~benefit~~ costs, a $0.14 million increase in ~~other~~allowance ~~Wholesale~~for ~~Segment~~credit ~~operating costs~~losses, and a $0.1 million increase in ~~operating~~health ~~expense~~and ~~costs~~other ininsurance ~~our Retail Segment~~costs. These increases in operating expenses were partially offset by a $0.95 million decrease inrelated ~~health and other insurance costs. The increase in our Retail Segment was primarily due~~ to anemployee ~~increase~~compensation inand ~~costs~~benefit ~~associated with our existing stores~~costs.

INTEREST EXPENSE – Q1Q2 2026 vs. Q1Q2 2025

Interest expense decreased ~~$0.2 million~~ in Q1Q2 2026 as compared to Q1Q2 2025, primarily due to lower interest rates, ~~partially~~and ~~offset~~lower ~~by higher~~ average debt balances in the current period.

INCOME TAX EXPENSE – Q1Q2 2026 vs. Q1Q2 2025

The change in the Q1Q2 2026 income tax rate as compared to Q1Q2 2025 was primarily related to non-deductible ~~compensation~~expenses ~~expense~~ 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.

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RESULTS OF OPERATIONS – SIX MONTHS ENDED MARCH:


	2026			2025			Incr (Decr)		% Change
CONSOLIDATED:
Sales (1)	$	1,445,707,771		$	1,330,776,344		$	114,931,427	8.6
Cost of sales		1,354,170,245			1,240,854,907			113,315,338	9.1
Gross profit		91,537,526			89,921,437			1,616,089	1.8
Gross profit percentage		6.3	%		6.8	%

Operating expense	$	87,979,351		$	85,789,212		$	2,190,139	2.6
Operating income (loss)		3,558,175			4,132,225			(574,050)	(13.9)
Interest expense		4,889,675			5,113,028			(223,353)	(4.4)
Change in fair value of mandatorily redeemable non-controlling interest		438,240			467,668			(29,428)	(6.3)
Income tax expense (benefit)		(182,000)			(39,000)			(143,000)	366.7
Net income (loss) available to common shareholders		(1,381,517)			(1,241,541)			(139,976)	11.3

BUSINESS SEGMENTS:
Wholesale
Sales	$	1,423,165,888		$	1,308,348,485		$	114,817,403	8.8
Gross profit		83,442,400			81,660,279			1,782,121	2.2
Gross profit percentage		5.9	%		6.2	%
Retail
Sales	$	22,541,883		$	22,427,859		$	114,024	0.5
Gross profit		8,095,126			8,261,158			(166,032)	(2.0)
Gross profit percentage		35.9	%		36.8	%

(1)	Sales are reported net of costs associated with incentives provided to retailers. These incentives totaled $23.0 million for the six months ended March 2026 and $19.2 million for the six months ended March 2025.

SALES – Six months ended March 2026

Sales in our Wholesale Segment increased $114.8 million during the six months ended March 2026 as compared to the same prior year period. Significant items impacting sales during the current period included a $60.7 million increase in sales related to price increases implemented by cigarette manufacturers, a $37.5 million increase in sales related to the volume and mix of cigarette cartons sold, and a $16.6 million increase in sales related to the volume and mix of products in our Other Products category. Sales in our Retail Segment increased approximately $0.1 million during the six months ended March 2026 as compared to the same prior year period, primarily due to higher sales volumes in our existing stores.

GROSS PROFIT – Six months ended March 2026

Gross profit in our Wholesale Segment increased $1.8 million during the six months ended March 2026 as compared to the same prior year period. Significant items impacting gross profit during the current period included an increase of $1.4 million related to the mix of volumes and promotions in our Other Products category, and a $1.0 million increase in gross profit related to the volume and mix of cigarette cartons sold between the comparative periods, partially offset by a $0.6 million decrease in gross profit due to the timing and related benefits of cigarette manufacturer price increases. Gross profit in our Retail Segment decreased approximately $0.2 million during the six months ended March 2026 as compared to the same prior year period, primarily due to a decrease in gross profit related to same store sales.

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OPERATING EXPENSE – Six months ended March 2026

Operating expenses increased $2.2 million during the six months ended March 2026 as compared to the same prior year period. Significant items impacting operating expenses during the current period included the impact of a prior year (Q1 2025) reduction in operating expenses related to a $1.5 million contingent liability fair value adjustment, a $1.6 million increase in other Wholesale Segment operating costs, a $0.2 million increase in allowance for credit losses, and a $0.1 million increase in operating expense costs in our Retail Segment. These increases in operating expenses were partially offset by a $0.8 million decrease in health and other insurance costs and a $0.4 million decrease related to employee compensation and benefit costs. The increase in our Retail Segment was primarily due to an increase in costs associated with our existing stores.

INTEREST EXPENSE – Six months ended March 2026

Interest expense decreased $0.2 million during the six months ended March 2026 as compared to the same prior year period, primarily due to lower interest rates and lower average debt balances in the current period.

INCOME TAX EXPENSE – Six months ended March 2026

The change in the Company’s effective income tax rate during the six-month period ended March 2026 as compared to the respective prior year period 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.

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.

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, LLC (“Team Sledd” and, the “Team Sledd Facility”) and (c) a facility that is the obligation of Henry’s (the “Henry’s Facility”) (collectively, the “Facilities”) and long-term debt agreements with banks. The Team Sledd Facility and the Henry’s 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.

The average interest rate of the Facilities was 5.29% at December 2025. For the three months ended December 2025, the peak borrowings under the Facilities was $193.2 million, and the average borrowings and average availability under the Facilities was $163.6 million and $79.2 million, respectively.22

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The average interest rate of the Facilities was 5.07% at March 2026. For the six months ended March 2026, the peak borrowings under the Facilities was $193.2 million, and the average borrowings and average availability under the Facilities was $154.6 million and $80.7 million, respectively.

Cross Default and Co-Terminus Provisions

Dividend Payments

The Company paid cash dividends on its common stock totaling $0.13 million inand ~~each~~$0.4 ofmillion for the three- and six-month periods ended ~~December~~March ~~2025 and December 2024. During Q1~~ 2026, ~~the~~respectively, ~~Company~~and ~~declared a~~ $0.283 ~~per~~million ~~share~~and ~~special dividend totaling approximately~~ $0.24 million ~~that~~for ~~will~~the bethree- ~~paid~~and insix-month Q2periods ~~2026.~~ended ~~During~~March Q1 2025, ~~the Company declared a $0~~respectively.~~28 per share special dividend totaling approximately $0.2 million that was paid in Q2 2025.~~

20See Note 4 of Part I, Item 1 of this quarterly report on Form 10-Q for information regarding the Company’s March 2026 stock split.

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Other

The Company has issued letters of credit totaling $32.19 million to its workers’ compensation insurance carriers as part of its self-insured loss control program.

Off-Balance Sheet Arrangements

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

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.

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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 ~~December~~March 31, ~~2025~~2026 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.

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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

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended ~~December~~March ~~2025~~2026, 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, 2025.

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

The Company issued unregistered securities ~~to certain members of the Company’s management team~~ during the quarterly period ended ~~December~~March 31, ~~2025~~2026, in relation to the ~~vesting~~stock ~~and~~split ~~granting of equity awards~~ as described in Note 94 of Part I, Item 1 of this quarterly report on Form 10-Q. These issuances were exempt from registration under Section 43(a)(29) of the Securities Act of 1933 and Rule 236 thereunder.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended ~~December~~March 31, ~~2025~~2026, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits

(a) Exhibits



	10.1	~~Form~~Joinder ofand ~~Restricted~~Second ~~Stock~~Amendment ~~Award~~to Loan and Security Agreement, ~~under~~dated ~~the~~March ~~2018~~26, ~~Omnibus~~2026, ~~Incentive~~between ~~Plan~~LOL Foods, Inc., HF Real Estate, LLC, McKinley Logistics, LLC, and BMO BANK N.A.

	10.2	Form of Restricted Stock Award Agreement under the 2022 Omnibus Incentive Plan

	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	Inline XBRL Interactive Data File (filed herewith electronically)

	104	Cover Page Interactive Data File – formatted in Inline XBRL and included in 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: January 20, 2026	/s/ Christopher H. Atayan
Date: April 20, 2026	/s/ Christopher H. Atayan
	Christopher H. Atayan,
	Chief Executive Officer and Chairman

Date: January 20, 2026	/s/ Charles J. Schmaderer
Date: April 20, 2026	/s/ Charles J. Schmaderer
	Charles J. Schmaderer,
	Vice President, Chief Financial Officer and Secretary
	(Principal Financial and Accounting Officer)

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