-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UAsYQzHHWrEh1h1EbSPUQ2NYVOYO6RHqzxQhM2OkrwOQf8N0CHMvXIrB0qVxEnd9 dhsjoMVInFgTqfesuPbrHw== 0000928465-04-000048.txt : 20041021 0000928465-04-000048.hdr.sgml : 20041021 20040831173844 ACCESSION NUMBER: 0000928465-04-000048 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040617 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20040831 DATE AS OF CHANGE: 20041021 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMCON DISTRIBUTING CO CENTRAL INDEX KEY: 0000928465 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & GENERAL LINE [5141] IRS NUMBER: 470702918 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-15589 FILM NUMBER: 041009366 BUSINESS ADDRESS: STREET 1: 7405 IRVINGTON ROAD STREET 2: POST OFFICE BOX 641940 (68164-7940) CITY: OMAHA STATE: NE ZIP: 68122 BUSINESS PHONE: 4023313727 MAIL ADDRESS: STREET 1: 7405 IRVINGTON ROAD STREET 2: POST OFFICE BOX 641940 (68164-7940) CITY: OMAHA STATE: NE ZIP: 68122 8-K/A 1 form8katrinity08312004.txt 8-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934 Date of Report (Date of earliest event reported) June 17, 2004 ------------------------------------------------------------------- AMCON DISTRIBUTING COMPANY -------------------------- (Exact name of registrant as specified in its charter) DELAWARE 0-24708 47-0702918 - ------------------------------------------------------------------------------ (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 7405 Irvington Road, Omaha, NE 68122 ------------------------------------ (Address of principal executive offices) (Zip Code) (402) 331-3727 -------------- (Registrant's telephone number, including area code) Not Applicable -------------- (Former name or former address, if changed since last report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On June 17, 2004, a newly formed subsidiary of AMCON Distributing Company (AMCON or the Company), TSL Acquisition Corp. (which subsequently changed its name to Trinity Springs, Inc.) acquired the tradename, water rights, customer list and substantially all of the operating assets of Trinity Springs, Ltd., which subsequently changed its name to Crystal Paradise Holdings, Inc. (the Seller). The Seller, headquartered in Sun Valley/Ketchum, Idaho, once bottled and sold a geothermal bottled water and a natural mineral supplement. The purchase price was paid through a combination of $2.1 million in cash, $3.3 million in notes which were issued by Trinity Springs, Inc. and guaranteed by AMCON; the assumption of approximately $0.2 million of liabilities and the issuance of common stock representing 15% ownership Trinity Springs, Inc. The Trinity Springs, Inc. stock is convertible into 16,666 shares of AMCON common stock at the option of the Seller which had a fair value of $0.4 million. Included in the $2.1 million paid in cash are transaction costs totaling approximately $0.7 million that were incurred to complete the acquisition and consist primarily of fees and expenses for attorneys and investment bankers. In addition, Trinity Springs, Inc. will pay an annual water royalty to the Seller in perpetuity in an amount equal to the greater of $0.03 per liter of water extracted from the source or 4% of water revenues (as defined by the purchase agreement) which is guaranteed by AMCON up to a maximum of $5 million, subject to a floor of $206,400 for the first year and $288,000 annually thereafter. The promissory notes referred to above and the water royalty are secured by a first priority security and mortgage on the acquired assets, other than inventory and accounts receivable. The Seller retains the right to receive any water royalty payment for the first five years in shares of AMCON common stock up to a maximum of 41,666 shares. The water royalty can be cancelled after ten years have elapsed following the closing of the sale of assets of Trinity Springs, Inc., if the business of Trinity Springs, Inc. is sold to an unaffiliated third party, in which case the Seller would be entitled to receive the appraised fair market value of the water royalty but not less than $5 million. The Company's Chairman has in turn guaranteed AMCON for these payments as well as the promissory notes referred to above. In order to facilitate the transaction, AMCON completed a $2.5 million private placement of Series A Convertible Preferred Stock representing 100,000 shares at $25 per share. 1 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The accompanying unaudited condensed consolidated financial statements include the accounts of Trinity Springs, Ltd. as of March 26, 2004 and September 26, 2003. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the financial information included therein, such adjustments consisting of normal recurring items. It is suggested that these financial statements be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2003 and 2002. Results for the interim period are not necessarily indicative of results to be expected for the entire year.
TRINITY SPRINGS, LTD CONDENDSED BALANCE SHEETS March 26, 2004 and September 26, 2003 (Unaudited) - ---------------------------------------------------------------------------------------- March 26, September 26, 2004 2003 ------------ -------------- ASSETS Current assets: Cash $ 69,472 $ 397,409 Accounts receivable 396,183 326,170 Inventories 333,618 320,486 Other - 78,786 ----------- ----------- Total current assets 799,273 1,122,851 Fixed assets, net 2,904,310 3,017,427 Other assets 90,434 210,759 ----------- ----------- $ 3,794,017 $ 4,351,037 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 308,111 $ 370,343 Interest payable 8,173 376,431 Accrued expenses 81,024 102,925 Current portion of long-term debt 893,947 3,270,836 Other current liabilities 49,760 51,227 ----------- ----------- Total current liabilities 1,341,015 4,171,762 ----------- ----------- Long-term debt, less current portion 98,408 947,340 Shareholders' equity: Common stock 26,186 30,877 Preferred stock 12,864 444 Additional paid-in capital 22,326,411 17,681,566 Retained earnings (deficit) (20,010,867) (18,480,952) ----------- ----------- Total shareholders' equity 2,354,594 (768,065) ----------- ----------- $ 3,794,017 $ 4,351,037 =========== ===========
2
TRINITY SPRINGS, LTD Condensed Statements of Operations for the six months ended March 26, 2004 and March 28, 2003 (Unaudited) - --------------------------------------------------------------------------------------- 2004 2003 ------------ ------------- Sales $ 1,501,262 $ 1,530,819 Cost of sales 1,152,155 1,216,320 ------------ ------------ Gross profit 349,107 314,499 Selling, general and administrative expenses 1,475,158 1,691,990 Depreciation and amortization 223,889 218,500 ------------ ------------ Income (loss) from operations (1,349,940) (1,595,991) ------------ ------------ Interest expense 179,975 137,689 ------------ ------------ Net income (loss) $ (1,529,915) $ (1,733,680) ============ ============
3
TRINITY SPRINGS, LTD Statements of Cash Flows for the six month periods ended March 2004 and 2003 (Unaudited) - --------------------------------------------------------------------------------- 2004 2003 ------------ ------------ Net cash flows from operating activities $ (1,317,649) $ (1,100,538) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets (24,264) (276,251) Increase in other assets (14,252) - Proceeds from sale of fixed assets - - ------------ ------------ Net cash used by investing activities (38,516) (276,251) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock - - Proceeds from issuance of preferred stock 1,104,051 - Principal payments on long-term debt and lease obligations (75,823) (93,837) Proceeds from other borrowings - 450,000 ------------ ------------ Net cash provided by financing activities 1,028,228 356,163 ------------ ------------ Net increase (decrease) in cash (327,937) (1,020,626) Cash, beginning of year 397,409 1,235,761 ------------ ------------ Cash, end of year $ 69,472 $ 215,135 ============ ============ SUPPLEMENTAL INFORMATION: Noncash investing and financing transactions: Conversion of debt and accrued interest to preferred stock $ 3,626,992 $ - Conversion of common stock to preferred stock $ 470,000 $ - Accrued expenses offset by reduction in note receivable $ 75,000 $ -
4 Financial Statements TRINITY SPRINGS, LTD December 31, 2003 and 2002 TABLE OF CONTENTS Page No. INDEPENDENT AUDITORS REPORT 6 FINANCIAL STATEMENTS Balance Sheets 7 Statements of Operations 8 Statements of Stockholders Deficit 9 Statements of Cash Flows 10 Notes to Financial Statements 11 5 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders Trinity Springs, LTD Ketchum, Idaho We have audited the accompanying balance sheets of Trinity Springs, Ltd. (a corporation) as of December 31, 2003 and 2002, and the related statements of operations, stockholders' deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Trinity Springs, Ltd. as of December 31, 2003 and 2002, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. BALUKOFF LINDSTROM & CO., P.A. Boise, Idaho July 28, 2004 6
TRINITY SPRINGS, LTD BALANCE SHEETS December 31, 2003 and 2002 - ---------------------------------------------------------------------------------------- 2003 2002 ------------ -------------- ASSETS Current assets: Cash $ 136,159 $ 671,748 Accounts receivable, net of allowance for doubtful accounts of $72,862 and $0 in 2003 and 2002, respectively 215,815 248,830 Inventories 298,770 288,472 Prepaid expenses 22,800 51,570 ------------- ------------- Total current assets 673,544 1,260,620 Property, plant and equipment: Land and land improvements 458,209 458,209 Buildings 1,922,029 1,852,390 Leasehold improvements - 87,827 Furniture and equipment 2,556,149 2,546,010 ------------- ------------- 4,936,387 4,944,436 Accumulated depreciation and amortization (1,945,983) (1,702,739) ------------- ------------- 2,990,404 3,241,697 Other assets: Loans to stockholders - 75,000 Deposits 20,501 25,469 Other assets, net of amortization 60,783 121,247 ------------- ------------- $ 3,745,232 $ 4,724,033 ============= ============= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 225,383 $ 474,402 Interest payable 266,687 230,493 Accrued expenses 147,886 290,234 Notes payable, current portion 3,407,607 2,588,943 ------------- ------------- Total current liabilities 4,047,563 3,584,072 ------------- ------------- Long-term debt 140,735 1,610,801 Stockholders' deficit: Preferred Series A Stock, $0.01 par value, 15,000,000 authorized, 531,473 issued and outstanding liquidation preference as disclosed in Note G 5,315 - Common Stock, $0.01 par value, 30,000,000 shares authorized, 2,618,523 and 2,437,723 shares and outstanding in 2003 and 2002, respectively 26,185 24,377 Additional paid-in capital 18,936,618 16,188,512 Accumulated deficit (19,411,184) (16,683,729) ------------- ------------- (443,066) (470,840) ------------- ------------- $ 3,745,232 $ 4,724,033 ============= ============= See accompanying notes
7
TRINITY SPRINGS, LTD STATEMENTS OF OPERATIONS Years ended December 31, 2003 and 2002 - --------------------------------------------------------------------------------------------------------- 2003 2002 ------------- ------------- Sales $ 3,332,340 $ 3,023,107 Cost of sales 2,479,639 2,410,024 ------------- ------------- Gross profit 852,701 613,083 ------------- ------------- Operating expenses: Depreciation and amortization 420,065 420,476 Selling, general and administrative expenses 2,799,209 2,869,814 ------------- ------------- 3,219,274 3,290,290 ------------- ------------- Loss from operations (2,366,573) (2,677,207) ------------- ------------- Other expense: Interest expense 360,882 209,511 ------------- ------------- Net loss $ (2,727,455) $ (2,886,718) ============= ============= See accompanying notes
8 TRINITY SPRINGS, LTD STATEMENTS OF STOCKHOLDERS' DEFICIT Years ended December 31, 2003 and 2002
- ---------------------------------------------------------------------------------------------------------- Common Stock Preferred Stock Additional -------------- --------------- Paid in Accumulated Shares Amount Shares Amount Capital Deficit Total - ---------------------------------------------------------------------------------------------------------- BALANCE, December 31, 2001 2,431,556 $ 24,316 - $ - $ 16,096,069 $(13,797,011) $2,323,374 Net loss - - - - - (2,886,718) (2,886,718) Issuance of common stock 6,167 61 - - 92,443 - 92,504 --------- -------- ------- ------- ----------- ------------ ---------- BALANCE, December 31, 2002 2,437,723 24,377 - - 16,188,512 (16,683,729) (470,840) Net loss - - - - - (2,727,455) (2,727,455) Issuance of common stock 650,000 6,500 - - 1,293,500 - 1,300,000 Stock issued for services 800 8 - - 3,592 - 3,600 Issuance of Preferred Stock - - 134,333 1,343 603,155 - 604,498 Conversion of Common Stock to Series A Preferred (470,000) (4,700) 208,896 2,090 2,643 - 33 Conversion of convertible debt to Series A Preferred - - 188,244 1,882 845,216 - 847,098 --------- -------- ------- ------- ----------- ------------ ---------- BALANCE, December 31, 2003 2,618,523 $ 26,185 531,473 $ 5,315 $18,936,618 $(19,411,184) $ (443,066) ========= ======== ======= ======= =========== ============ ========== See accompanying notes
9
TRINITY SPRINGS, LTD STATEMENTS OF CASH FLOWS Years ended December 31, 2003 and 2002 - --------------------------------------------------------------------------------- 2003 2002 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,727,455) $ (2,886,718) Adjustments to reconcile net loss to net cash used by operating activities Depreciation 359,601 363,993 Amortization 60,464 56,483 (Gain) loss on disposal of assets 1,054 (163) Stock issued for professional services 3,600 - Change in operating assets and liabilities Accounts receivable 33,015 (112,022) Inventory (10,298) 101,950 Prepaid expenses 28,770 8,029 Deposits 4,968 - Accounts payable (249,019) 201,401 Accrued expenses (67,348) 60,880 Interest payable 233,292 93,034 ------------ ------------ Net cash used by operating activities $ (2,329,356) $ (2,113,133) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets (129,362) (815,008) Increase in other assets - (31,288) Proceeds from sale of fixed assets 20,000 701 ------------ ------------ Net cash used by investing activities (109,362) (845,595) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 1,300,000 92,504 Proceeds from issuance of preferred stock 604,531 - Principal payments on long-term debt and lease obligations (106,541) (141,016) Proceeds from other borrowings 105,139 3,329,998 ------------ ------------ Net cash provided by financing activities 1,903,129 3,281,486 ------------ ------------ Net increase (decrease) in cash (535,589) 322,758 Cash, beginning of year 671,748 348,990 ------------ ------------ Cash, end of year $ 136,159 $ 671,748 ============ ============ SUPPLEMENTAL INFORMATION: Interest paid $ 324,689 $ 116,477 Noncash investing and financing transactions: Conversion of debt and accrued interest to preferred stock $ 847,098 $ - Conversion of common stock to preferred stock $ 470,000 $ - Accrued expenses offset by reduction in note receivable $ 75,000 $ - See accompanying notes
10 TRINITY SPRINGS, LTD NOTES TO FINANCIAL STATEMENTS December 31, 2003 and 2002 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Trinity Springs, Ltd., located in Ketchum, Idaho, is principally engaged in the production and distribution of bottled water. Trinity Springs, Ltd. was incorporated in Idaho on December 12, 1990. The Company bottles and markets geothermal spring water primarily through distribution channels directly related to the consumer bottled water market. Cash and Cash Equivalents For the purpose of the statement of cash flows, the Company considers all investment instruments purchased with a maturity of three months or less to be cash equivalents. Credit Risk The Company's bank accounts are insured by federal depository insurance up to $100,000. At various times during the year the bank balance exceeded the insured limit. Use of Estimates Management uses estimates and assumptions in preparing financial statements. These estimates and assumptions affect the reported amounts and assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Accounts Receivable The Company provides credit in the normal course of business to its customers and performs ongoing credit evaluations of those customers. It maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information. Credit losses, when realized, have been within the range of the Company's expectations and, historically, have not been significant. Inventories Inventories are stated at lower of cost or market on a first in, first out basis. Raw materials totaled $99,560 and $10,922 as of December 31, 2003 and 2002, respectively. Finished goods, including labor and allocable overhead, totaled $199,210 and $277,550 as of December 31, 2003 and 2002, respectively. Property and Equipment Property and equipment is stated at cost. Depreciation has been computed using straight-line method, based on the estimated useful lives of the assets. 11 Other Assets Other assets, including software, designs and trademarks, are being amortized on a straight-line basis over the estimated useful life of the related asset. Stock Based Compensation The Company accounts for its stock options under Accounting Principles Board (APB) Opinion No. 25 using the intrinsic value method. The Company has elected not to adopt the provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based Compensation" (FAS 123). Compensation cost calculated using FAS 123 assumptions is not considered to be material. NOTE B - CONVERTIBLE DEBENTURES Pursuant to the Note Purchase Agreement, dated August 7, 2002 and amended by the First Amendment to the Note Purchase Agreement, dated May 23, 2003, and the Second Amendment to the Note Purchase Agreement, dated October 31, 2003 and the Third Amendment dated December 31, 2003, during 2002 and early 2003, the Company issued Promissory Notes ("Bridge Notes") in the amount of $3,149,998. At December 31, 2003, the balance outstanding was $2,499,998. These Notes carry a variable interest rate equal to the Prime Rate, plus 3% (7% at December 31, 2003). Each Bridge Noteholder received a convertible promissory note (a "Bridge Note") and two warrants. One warrant (each, a "Primary Warrant") is for 50% coverage of the pro rata principal provided by the Bridge Noteholder with a strike price to be set at the time the Bridge Noteholder converts the Bridge Note (or at a base price of $2.50 if the Bridge Note is not converted as described below). The other warrant (each, a "Secondary Warrant") is for 25% coverage of the pro rata principal with a set strike price of $1.00. The Bridge Notes are secured by the business assets (both real and personal) of the Company (the "Collateral"). Prior to December 31, 2003, all of the outstanding Bridge Notes were purchased by one of the Company's stockholders, pursuant to the terms of a commitment letter dated July 17, 2002, restated August 26, 2003, and amended October 31, 2003 and December 31, 2003, whereby the stockholder guaranteed the purchase of any of the Bridge Notes which were called. Under the terms of the commitment, the stockholder has committed to convert the outstanding principal and accrued interest into Series A preferred shares, first opened on September 29, 2003, at the same price and terms offered in this Series A Offering. The Company has extended the due date for the Notes and required deadline for conversion until March 31, 2004 ("Maturity Date"); however the Company may demand conversion at any time. Upon conversion, the Primary Warrant will be for Shares with a strike price of $4.50 per Share. The strike price of the Secondary Warrant is set at $1.00 per Share. The strike price of the Primary and the Secondary Warrant shall be proportionally adjusted to reflect the issuance of the Share Dividends. 12 Prior to the Maturity Date of the Bridge Notes, each Bridge Noteholder has the option to convert the outstanding principal and interest accrued under his Bridge Note into Common Stock at the same price and terms offered to the Unit subscribers in the Unit Offering, first opened to stockholders on April 17, 2003. In order to exercise this option to convert to Units, the Bridge Noteholder must give the Company written notice of his intention to exercise ten (10) days prior to the Maturity Date (i.e. on or before March 21, 2004). If a Bridge Noteholder converts as part of the Unit Offering, the Primary Warrant will be for shares of Common Stock with a strike price of $2.00 per share of Common Stock. The Secondary Warrant strike price is set at $1.00 per share of Common Stock. NOTE C - NOTES PAYABLE
2003 2002 ----------------------- ----------------------- Long Long Current Term Current Term ---------- ---------- ---------- ---------- Note payable to a stockholder in monthly installments of $3,600 including interest at 2.5%, through February, 2005, unsecured $ 25,040 $ 7,613 $ - $ 32,653 Note payable to an individual in annual installments of $22,802 including interest at 9%, through February, 2003, secured by real property - - 9,480 - Note payable to an individual in annual installments of $22,800 including interest at 9%, through August, 2003, secured by real property - - 21,003 - Note payable to a bank, payable in annual installments of $49,619 including interest at 9% through January, 2007, secured by real property 35,320 125,431 35,206 124,665 Note payable to Merrill Lynch with interest calculated at Libor plus 1.25%, payable monthly. Principal payment due November, 2004, secured by personal assets of a principal stockholder 776,919 - - 736,205 Convertible debentures 2,499,998 - 2,449,998 650,000 Capital leases payable 70,330 7,691 73,256 67,278 ---------- ---------- ---------- ---------- Total $3,407,607 $ 140,735 $2,588,943 $1,610,801 ========== ========== ========== ==========
13 Maturities of long-term debt, including notes payable, convertible debt and capital lease obligations are as follows: 2004 $3,407,607 2005 49,285 2006 45,361 2007 46,089 ---------- Total $3,548,342 ========== NOTE D - WARRANTS On January 15, 1998, the Company issued a warrant for the purchase of 75,000 shares to William D. Johnson, then Chairman of the Board of Directors of Trinity Springs, Ltd., in conjunction with the pledge of his personal assets to secure a loan for the Company. The warrant allows the holder to purchase common stock at a price of $7.50 per share and expires on January 15, 2006. In addition, the Company has agreed to grant Mr. Johnson additional warrants in the amount of 43,162 at a strike price of $4.50 if certain conditions relating to the extension of the Merrill Lynch Loan are met. In February and March of 2002, the Company authorized the issuance of 6,167 stock warrants to investors who provided emergency working capital. The warrants allow the holders to purchase common stock at a price of $16.00 per share and expire March 1, 2007. On April 17, 2003, the Company opened a rights offering to its stockholders pursuant to the Private Placement Memorandum, dated the same date. On May 31, 2003, this Unit Offering was extended to outside investors. In the Unit Offering, the Company offered Units at $4.00 per Unit. Each Unit consisted of two shares of Common Stock, plus 50% warrant coverage for five years with a strike price of $2.00 per share. A total of $1,300,000 and 325,000 units were issued in the Unit Offering. Under the terms and conditions of a Series A Preferred Offering first opened on September 29, 2003, the Company offered each investor who participated in the Unit Offering, a one-time option to exchange the Units purchased in the Unit Offering, including the warrants, for Series A Preferred Shares at an equivalent subscription value. The Unit investor option expired on October 21, 2003. The total amount converted was $940,000 and 470,000 Unit Shares. The Company has issued Primary Warrants and Secondary warrants to the Bridge Note Holders, as more fully described in Note B above. These Warrants may be for either Common Stock or Series A Preferred Stock, depending on the conversion options exercised by the Note Holders. The Company has issued 143,000 Warrants to purchase common stock with a strike price of $2.00 in connection with the conversion of convertible debentures into Series A Preferred shares. 14 NOTE E - STOCK OPTIONS The Company adopted a stock option plan on April 18, 1996, which was approved by the stockholders on July 12, 1996, pursuant to which the Company was authorized to grant options to officers, key employees, consultants, advisors or directors of the Company for the purchase of up to 200,000 shares of common stock of the company. On July 28, 1998, the Board amended the Plan to increase the number of shares authorized to 500,000, which was approved by the stockholders on July 23, 1999. On May 13, 2003, the Board amended the Plan to increase the number of shares authorized to 2,000,000, which was approved by the stockholders on May 30, 2003. At December 31, 2003, there are non- statutory options for the purchase of 185,870 shares, and incentive stock options for the purchase of 581,500 shares. The exercise prices of the options range from $2.00 to $6.10 and an option's maximum term is 10 years. Number of option shares 2003 2002 ------- ------- Beginning of year 235,370 270,720 Granted 572,000 - Expired - 35,350 Outstanding at end of year 807,370 235,370 Exercisable at end of year 368,703 235,370 NOTE F - INCOME TAXES The Company has a federal net operating loss carry forward at December 31, 2003 of approximately $18,500,000 available to offset future federal taxable income. The net operating loss carry forwards, if not used, will expire at various dates through the year 2017. No deferred tax asset has been reported in the 2003 or 2002 financial statements, however, because the Company believes there is at least a 50% chance that the carryforward will expire unused. Accordingly, the tax benefit of the loss carryforward of $6,300,000 and $5,400,000 in 2003 and 2002, respectively, has been offset by a valuation allowance of the same amount. As time passes, management will be able to better assess the amount of tax benefit it will realize from using the carryforward. The expected tax benefit of $927,000 that would result from applying federal statutory tax rates to the pretax loss of $2,727,000 differs from amounts reported in the financial statements because of the increase in the valuation allowance. NOTE G - PREFERRED STOCK Holders of preferred shares are entitled to receive a 15% stock dividend compounded annually until the sooner of (i) when the Company has experienced two consecutive quarters of positive cash flow from operations or (ii) five years. There are no dividends in arrears. The preferred stock can be converted at any time into shares of common stock at the rate of one share preferred to one share common. The preferred stock will automatically convert to common if 1) at least 2/3 of the shares consent to conversion 2) upon the closing of a firmly underwritten public offering, 15 and 3) after the Company achieves four consecutive quarters of positive cash flow from operations. The preferred stock has a liquidation preference equal to 150% of the original subscription price of the shares which amount shall increase 15% per annum up to 200% of the subscription price. Each share of preferred stock is entitled to vote with common stock on all matters. NOTE H - SIGNIFICANT CUSTOMERS AND VENDORS The Company recorded revenue from products provided to customers that exceeded 10 percent of total revenues as follows: 2003 2002 -------- -------- United Natural Foods, Inc. $575,666 $437,977 Natures Best 542,756 475,240 Mountain Peoples Warehouse 417,306 302,252 The Company recorded expense from purchases to vendors that exceeded 10 percent of total expenses as follows: 2003 2002 -------- -------- West Coast Container, Inc. $705,085 $695,204 NOTE I - SUBSEQUENT EVENTS On June 17, 2004, the Company agreed to sell the brand name and substantially all of the operating assets (excluding cash and accounts receivable) to a newly formed, wholly-owned subsidiary of AMCON Distributing Company (AMCON) named TSL Acquisition Corp. (TSL). TSL subsequently changed its name to Trinity Springs, Inc. The selling price consisted of a combination of cash and notes totaling $2.1 million and $3.3 million; respectively, the assumption of approximately $0.2 million of liabilities and the issuance of common stock in Trinity Springs, Inc. representing 15% of ownership that has a fair value of approximately $408,000. In addition, AMCON will pay an annual water royalty equal to the greater of $0.03 per liter of water extracted from the source or 4% of water revenues (as defined by the purchase agreement), subject to a floor of $206,400 for the first year and $288,000 annually thereafter. The Company retains the right to receive any water royalty payment in shares of AMCON stock up to a maximum of 41,666 shares. Should AMCON sell the water royalty, AMCON has guaranteed a termination payment related to the water royalty of $5.0 million. Subsequent to the sale to AMCON, a minority stockholder group filed a suit against AMCON, TSL and certain Board members to unwind the sale. Management intends to vigorously defend the sale agreement with AMCON. The ultimate outcome of this lawsuit is not known. Subsequent to year end, the Company changed its name from Trinity Springs, LTD. to Crystal Paradise Holdings, Inc. 16 AMCON Distributing Company and Subsidiaries Pro Forma Financial Data The accompanying unaudited pro forma balance sheet and statements of operations give effect to the purchase of the geothermal water bottling and nature mineral supplement business and related net assets of Trinity Springs, Ltd. (Trinity). The unaudited pro forma balance sheet is based on the individual historical balance sheets of AMCON and Trinity Springs, Ltd. and has been prepared to reflect the acquisition of Trinity as of March 26, 2004. The unaudited pro forma statements of operations are based on the individual historical statements of AMCON and Trinity Springs, Ltd. and combine the results of operations of AMCON and Trinity Springs, Ltd. for the year ended September 26, 2003 and the six months ended March 26, 2004 as if the acquisition of Trinity's net assets had occurred on October 1, 2002. The pro forma financial data is not necessarily indicative of future results or the results that would have occurred had these transactions actually occurred on the dates specified. It is suggested that this financial data be read in conjunction with the Company's annual report for the years ended September 26, 2003 and 2002, respectively, and the Company's quarterly report for the nine months ended June 25, 2004. The historical financial information for Trinity Springs, Ltd. is as of March 26, 2004, and for the 52 weeks ended September 26, 2003 and the 26 weeks ended March 26, 2004. The asset acquisition has been recorded on the Company's books using the purchase method of accounting. The estimated purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The Company is in the process of obtaining a valuation of certain assets acquired in the transaction. As a result, the following information summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition based on a preliminary allocation of the purchase price and are subject to refinement. 17 AMCON Distributing Company and Subsidiaries Pro Forma Combined Balance Sheet March 26, 2004 (Unaudited)
AMCON Trinity Pro Forma Pro Forma Historical Historical Adjustments (A) Combined ------------ ---------- ------------ ----------- ASSETS Current assets: Cash $ 445,546 $ 69,472 $ 430,528 $ 945,546 Available-for-sale investments 92,250 - - 92,250 Accounts receivable 25,982,129 396,183 (191,729) 26,186,583 Inventories 28,955,831 333,618 140,032 29,429,481 Income tax receivable 944,622 - - 944,622 Deferred income taxes 1,568,476 - - 1,568,476 Other 623,733 - - 623,733 ------------ ----------- ----------- ------------ Total current assets 58,612,587 799,273 378,831 59,790,691 Fixed assets, net 16,757,226 2,904,310 59,352 19,720,888 Goodwill 6,091,397 - - 6,091,397 Other intangible assets 11,535,389 - 7,763,466 19,298,855 Other assets 1,035,629 90,434 (26,198) 1,099,865 ------------ ----------- ----------- ------------ $ 94,032,228 $ 3,794,017 $ 8,175,451 $106,001,696 ============ =========== =========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $16,888,996 $ 316,284 $ (52,351) $17,152,929 Accrued expenses 3,952,951 - 666,284 4,619,235 Accrued wages, salaries and bonuses 933,145 81,024 (81,024) 933,145 Current liabilities of discontinued operations 122,976 - - 122,976 Current portion of long-term debt 10,472,601 893,947 (606,344) 10,760,204 Current portion of subordinated debt 7,692,666 - - 7,692,666 Other current liabilities - 49,760 (49,760) - ------------ ----------- ----------- ------------ Total current liabilities 40,063,335 1,341,015 (123,195) 41,281,155 ------------ ----------- ----------- ------------ Deferred income taxes 1,223,853 - - 1,223,853 Long-term debt, less current portion 35,479,553 98,408 5,098,703 40,676,664 Subordinated debt, less current portion 976,220 - - 976,220 Other liabilities - - 5,146,551 5,146,551 Shareholders' equity: Common stock 31,692 26,186 (26,186) 31,692 Preferred stock - 12,864 (12,864) - Additional paid-in capital 5,998,497 22,326,411 (21,918,425) 6,406,483 Accumulated other comprehensive income, net of tax of ($0.01) million (14,324) - - (14,324) Retained earnings (deficit) 10,273,402 (20,010,867) 20,010,867 10,273,402 ------------ ----------- ----------- ------------ Total shareholders' equity 16,289,267 2,354,594 (1,946,608) 16,697,253 ------------ ----------- ----------- ------------ $ 94,032,228 $ 3,794,017 $ 8,175,451 $106,001,696 ============ =========== =========== ============ - ------------------- (A) See components of the pro forma adjustment summarized in the notes to the unaudited pro forma consolidated condensed combined balance sheet.
18 Balance Sheet Pro Forma Adjustments March 26, 2004
As of March 26, Balance sheet component Note Adjustment 2004 - ------------------------ ---- ---------------------------------------- ------------ Cash [1] Cash not acquired $ (69,472) [5] Capital infusion in newly formed subsidiary in which funds were borrowed from bank 500,000 ------------ 430,528 ------------ Accounts receivable [1] Accounts receivable not purchased (396,183) [5] Accounts receivable for funds remaining in escrow 204,454 ------------ (191,729) ------------ Inventories [2] Step-up inventory to fair value 140,032 ------------ Fixed assets, net [3] Step-up fixed assets to fair value 59,352 ------------ Other intangible assets [4] Customer list purchased 394,280 [4] Tradename purchased 2,123,211 [4] Water rights purchased 5,245,975 ------------ 7,763,466 ------------ Other assets [1] Other assets not purchased (26,198) ------------ Accounts payable [1] Accounts payable not assumed (316,284) [6] Payable to former owners for inventory purchased 164,509 [4] Current portion of minimum water royalty 99,424 ------------ (52,351) ------------ Accrued expenses [4] Transaction costs accrued 666,284 ------------ Accrued wages, salaries, bonuses [1] Liabilities not assumed (81,024) ------------ Current portion of [1] Debt not assumed (830,000) long-term debt Reclass current portion of long-term debt 223,656 ------------ (606,344) ------------ Other current liabilities [1] Liabilities not assumed (49,760) ------------ Long-term debt, less [1] Debt not assumed (6,081) current portion [4] Note payable issued for purchase of fixed assets 2,828,440 [4] Note payable issued for portion of purchase price 500,000 [5] Incremental debt incurred in connection with purchase 2,000,000 [4] Reclass current portion (223,656) ------------ 5,098,703 ------------ 19 Other liabilities [4] Present value of future water royalty payments and water rights guarantee 5,146,551 ------------ Common stock [1] Trinity Springs, Ltd common stock not purchased (net asset purchase) (26,186) ------------ Preferred stock [1] Trinity Springs, Ltd preferred stock not purchased (net asset purchase) (12,864) ------------ Additional paid in capital [1] Trinity Springs, Ltd additional paid-in capital not purchased (net asset purchase) (22,326,411) [4] Convertible feature of Trinity Springs, Inc. minority interest 407,986 ------------ (21,918,425) ------------ Retained earnings [1] Trinity Springs, Ltd retained deficit not purchased (net asset purchase) 20,010,867 ------------
20 AMCON Distributing Company and Subsidiaries Pro Forma Combined Statement of Income for the six months ended March 26, 2004 (Unaudited)
AMCON Trinity Pro Forma Pro Forma Historical Historical(A) Adjustments (B) Combined ------------- ------------ ------------- ------------ Sales $386,454,415 $ 1,501,262 $ - $387,955,677 Cost of sales 357,785,991 1,152,155 - 358,938,146 ------------ ------------ ------------ ------------ Gross profit 28,668,424 349,107 - 29,017,531 Selling, general and administrative expenses 27,382,204 1,475,158 - 28,857,362 Depreciation and amortization 1,128,450 223,889 49,087 1,401,426 ------------ ------------ ------------ ------------ Income (loss) from operations 157,770 (1,349,940) (49,087) (1,241,257) ------------ ------------ ------------ ------------ Other expense (income): Interest expense 1,603,141 179,975 73,943 1,857,059 Other income, net (446,866) - - (446,866) ------------ ------------ ------------ ------------ Income (loss) before income taxes (998,505) (1,529,915) (123,030) (2,651,450) Income tax expense (benefit) (411,000) - (628,000) (1,039,000) ------------ ------------ ------------ ------------ Net income (loss) $ (587,505) $ (1,529,915) $ 504,970 $ (1,612,450) ============ ============ ============ ============ Earnings (loss) per common and common equivalent share attributable to common shareholders: Basic $ (1.11) $ (3.05) ============ ============ Diluted $ (1.11) $ (3.05) ============ ============ Weighted average shares outstanding: Basic 528,179 528,179 ============ ============ Diluted 528,179 528,179 ============ ============ - ------------------- (A) Trinity Springs, Ltd. financial information for the six months ended March 26, 2004 includes the operating results for the three months of October 2003 through December 2003, representing sales and pre-tax loss of $545,273 and $(930,232), respectively. The activity for this three month period is also included in Trinity Springs, Ltd. historical information included in Item 2 for the year ended December 31, 2003. (B) See components of the pro forma adjustments summarized in the notes to the unaudited pro forma consolidated condensed combined statements of operations.
21 AMCON Distributing Company and Subsidiaries Pro Forma Combined Statement of Income for the year ended September 26, 2003 (Unaudited)
AMCON Trinity Pro Forma Pro Forma Historical Historical(A) Adjustments (B) Combined ------------- ------------ ------------- ------------ Sales $772,135,351 $ 3,326,799 $ - $ 775,462,150 Cost of sales 711,974,154 2,484,112 77,832 714,536,098 ------------ ------------ ------------ ------------ Gross profit 60,161,197 842,687 (77,832) 60,926,052 Selling, general and administrative expenses 53,049,723 2,896,774 - 55,946,497 Depreciation and amortization 2,284,608 415,484 98,173 2,798,265 ------------ ------------ ------------ ------------ Income (loss) from operations 4,826,866 (2,469,571) (176,005) 2,181,290 ------------ ------------ ------------ ------------ Other expense (income): Interest expense 3,269,777 305,902 208,796 3,784,475 Other (income) expense, net (98,384) - - (98,384) ------------ ------------ ------------ ------------ Income (loss) before income taxes 1,655,473 (2,775,473) (384,801) (1,504,801) Income tax expense (benefit) 629,000 - (1,201,000) (572,000) ------------ ------------ ------------ ------------ Net income (loss) $ 1,026,473 $ (2,775,473) 816,199 (932,801) ============ ============ ============ ============ Earnings (loss) per common and common equivalent share attributable to common shareholders: Basic $ 1.95 $ (1.77) ============ ============ Diluted $ 1.91 $ (1.77) ============ ============ Weighted average shares outstanding: Basic 527,699 527,699 ============ ============ Diluted 537,042 527,699 ============ ============ - ------------------- (A) Trinity Springs, Ltd. financial information for the six months ended March 26, 2004 includes the operating results for the three month of October 2003 through December 2003, representing sales and pre-tax loss of $545,273 and $(930,232), respectively. The activity for this three month period is also included in Trinity Springs, Ltd. historical information included in Item 2 for the year ended December 31, 2003. (B) See components of the pro forma adjustments summarized in the notes to the unaudited pro forma consolidated condensed combined statements of operations.
22 AMCON Distributing Company and Subsidiaries Combined Statement of Operations Pro Forma Adjustments For the six months ended March 26, 2004 and for the year ended September 26, 2003 (Unaudited)
For the For the six months year ended ended Statement of Operations March 26, September 26, Component Note Adjustment 2004 2003 - ----------------------------- ---- ------------------------------------ ------------ ------------ Cost of sales [1] Write up of finished goods inventory $ - $ 77,832 ------------ ----------- Depreciation and amortization [2] Amortization of purchased customer list 39,428 78,856 [3] Depreciation on step up of fixed assets 9,659 19,317 ------------ ----------- 49,087 98,173 ------------ ----------- Interest expense [4] Trinity Springs, Ltd. historical (174,975) (295,902) interest expense [5] Interest expense on bank debt incurred to purchase Trinity Springs, Ltd. assets 40,000 80,000 [6] Interest expense on the notes issued in connection with purchase of net 76,416 161,342 assets [7] Interest expense in connection with minimum water royalty and water rights guarantee 132,502 263,356 ------------ ----------- 73,943 208,796 ------------ ----------- Pre-tax income (loss) impact (123,030) (384,801) [8] To adjust tax expense for the net pro forma adjustments and the combined pro forma results (628,000) (1,201,000) ----------- ----------- Net income (loss) impact of pro forma adjustments $ 504,970 $ 816,199 =========== ===========
23 AMCON Distributing Company Notes to Unaudited Pro Forma Consolidated Condensed Combined Balance Sheet: [1] To eliminate Trinity Springs, Ltd. assets, liabilities and equity (purchase of net assets as opposed to stock) not purchased or assumed under the Asset Purchase Agreement. [2] To record purchased inventory at its estimated fair value, represented by its selling price, less costs of disposal and estimate selling profit. [3] To record fixed assets at its estimated fair value. [4] In purchasing the net assets of Trinity Springs, Ltd., AMCON recorded the following preliminary purchase price allocation: Assets: Cash for equity infusion $ 500,000 Accounts receivable for funds in escrow 204,454 Inventory 473,650 Prepaid expenses and deposits 64,236 Fixed assets 2,963,662 Customer list 394,280 Water rights 5,245,975 Tradename 2,123,211 ------------ $ 11,969,468 ============ Liabilities/Equity: Notes payable issued to former shareholders' $ 3,328,440 Incremental debt incurred to fund transaction 2,000,000 Accrued expenses for transaction costs 666,284 Payable to former shareholders' 164,509 Capital lease and debt obligations assumed 156,274 Water rights liability 5,245,975 Adjustment to paid-in capital resulting from convertible feature of minority interest in Trinity Springs, Inc. 407,986 ----------- $ 11,969,468 =========== The purchase price was paid through a combination of $2,166,284 million in cash, $3,328,440 million in notes which were issued by Trinity Springs, Inc. and guaranteed by AMCON; the assumption of $156,275 of liabilities and the issuance of common stock representing 15% ownership Trinity Springs, Inc. The Trinity Springs, Inc. stock is convertible into 16,666 shares of AMCON common stock at the option of the Seller which had a fair value of $407,986. Included in the $2,166,284 paid in cash are transaction costs totaling $666,284 that were incurred to complete the acquisition and consist primarily of fees and expenses for attorneys and investment bankers. In addition, Trinity Springs, Inc. will pay an annual water royalty to the Seller in 24 perpetuity in an amount equal to the greater of $0.03 per liter of water extracted from the source or 4% of water revenues (as defined by the purchase agreement) which is guaranteed by AMCON up to a maximum of $5 million, subject to a floor of $206,400 for the first year and $288,000 annually thereafter. The Company has recorded a $5,245,975 ($99,424 current, $5,146,551 long-term) liability for the present value the $2.8 million future minimum water royalty payments and the $5.0 million cancellation payment related to water rights as discussed below. The promissory notes referred to above and the water royalty are secured by a first priority security and mortgage on the acquired assets, other than inventory and accounts receivable. The Seller retains the right to receive any water royalty payment for the first five years in shares of AMCON common stock up to a maximum of 41,666 shares. The water royalty can be cancelled after ten years have elapsed following the closing of the sale of assets of Trinity Springs, Inc., if the business of Trinity Springs, Inc. is sold to an unaffiliated third party, in which case the Seller would be entitled to receive the appraised fair market value of the water royalty but not less than $5 million. The Company's Chairman has in turn guaranteed AMCON for these payments as well as the promissory notes referred to above. In order to facilitate the transaction, AMCON completed a $2.5 million private placement of Series A Convertible Preferred Stock representing 100,000 shares at $25 per share. [5] To fund the purchase AMCON borrowed $2,000,000 from its line of credit. AMCON lent $1,500,000 to Trinity Springs, Inc. and infused $500,000 as equity. Of the $1,500,000 lent to Trinity Springs, $204,454 was placed in escrow and will be returned to Trinity Springs and as such is recorded here as a pro forma receivable. [6] As part of the acquisition of Trinity Springs, Ltd. AMCON acquired 100% of its inventory. However, at the date of acquisition, AMCON only paid a percentage of the inventory at the closing date. The remainder of $165,508 represents the difference between the estimated fair value of the inventory and the amount paid at the date of closing. This has been recorded as accounts payable and will be paid to the Trinity Springs, Ltd. shareholders. Notes to Unaudited Pro Forma Consolidated Condensed Combined Statements of Operations: [1] To record pro forma cost of sales associated with the write-up of finished goods on hand when the acquisition was consummated. [2] To record pro forma amortization on the customer list of $394,280 for the six months ended March 26, 2004 and the year ended September 26, 2003 of $39,428 and $78,856, respectively. [3] To record pro forma depreciation expense on the $135,222 step-up of fixed assets of $9,659 and $19,317 for the six months ended March 26, 2004 and September 26, 2003, respectively. 25 [4] To eliminate 100% of Trinity Springs, Ltd. interest expense with the exception of the interest incurred on debt that was assumed by AMCON. [5] To record the incremental debt incurred to purchase the net assets of Trinity Springs, Ltd. Pro forma interest expense on the incremental debt at 4.0% for the six months ended March 26, 2004 and the year ended September 26, 2003 is $40,000 and $80,000, respectively. [6] To record interest expense on notes issued in connection with the acquisition. [7] To record interest expense associated with the $5.2 million liability recorded in purchase accounting representing the present value of the $2.8 million future minimum water royalty payments and the $5.0 million cancellation payment related to water rights. [8] The net impact of the pro forma adjustments have been tax-effected at the Company's historical effective tax rate of 38%. Due to the fact that Trinity Springs, Ltd. had unused federal net operating losses where there was at least a 50% chance that they would expire unused, no income tax expense (benefit) was recorded in its historical results for the six months ended March 26, 2004 or for the year ended September 26, 2003. Accordingly, the pro forma tax adjustments include amounts to tax-effect the pro forma consolidated condensed combined pre-tax results for the six months ended March 26, 2004 and the year ended September 26, 2003 at the Company's effective tax rate of 38%. EXHIBIT INDEX - -------------- EXHIBIT DESCRIPTION 2.8 Asset Purchase Agreement, dated April 24, 2004, between TSL Acquisition Corp., AMCON Distributing Company and Trinity Springs, Ltd. (incorporated by reference to Exhibit 2.8 of AMCON's Quarterly Report on Form 10-Q filed on August 9, 2004) 2.9 First Amendment to Asset Purchase Agreement dated June 17, 2004 between TSL Acquisition Corp., AMCON Distributing Company and Trinity Springs, Ltd. (incorporated by reference to Exhibit 2.9 of AMCON's Quarterly Report on Form 10-Q filed on August 9, 2004) 10.15 Promissory Note ($2,828,440), dated as of June 17, 2004 between the Company and Trinity Springs, Ltd. (incorporated by reference to Exhibit 10.15 of AMCON's Quarterly Report on Form 10-Q filed on August 9, 2004) 10.16 Promissory Note ($500,000), dated as of June 17, 2004 between the Company and Trinity Springs, Ltd. (incorporated by reference to Exhibit 10.16 of AMCON's Quarterly Report on Form 10-Q filed on August 9, 2004) 26 10.17 Security Agreement, dated June 17, 2004 by and between TSL Acquisition Corp., AMCON Distributing Company and Trinity Springs, Ltd. (incorporated by reference to Exhibit 10.17 of AMCON's Quarterly Report on Form 10-Q filed on August 9, 2004) 10.18 Shareholders Agreement, dated June 17,2004, by and between TSL Acquisition Corp, AMCON Distributing Company and Trinity Springs, Ltd. (incorporated by reference to Exhibit 10.18 of AMCON's Quarterly Report on Form 10-Q filed on August 9, 2004) 10.19 Guaranty and Suretyship Agreement, dated June 17, 2004, by and between AMCON Distributing Company and Trinity Springs, Ltd. (incorporated by reference to Exhibit 10.19 of AMCON's Quarterly Report on Form 10-Q filed on August 9, 2004) 10.20 Mortgage, dated June 17, 2004, by and between TSL Acquisition Corp., AMCON Distributing Company and Trinity Springs, Ltd.(incorporated by reference to Exhibit 10.20 of AMCON's Quarterly Report on Form 10-Q filed on August 9, 2004) 99.1 Press release, dated June 17, 2004, issued by AMCON Distributing Company (incorporated by reference to AMCON's Current Report on Form 8-K filed on June 18, 2004) SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AMCON DISTRIBUTING COMPANY (Registrant) Date: August 31, 2004 By : /s/ Michael D. James ------------------------- Name: Michael D. James Title: Vice President & Chief Financial Officer 27 -----END PRIVACY-ENHANCED MESSAGE-----