SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported) September 30, 2007
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AMCON DISTRIBUTING COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 1-15589 47-0702918
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7405 Irvington Road, Omaha, NE 68122
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(Address of principal executive offices) (Zip Code)
(402) 331-3727
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
Written communications pursuant to Rule 425 under the Securities Act
---(17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
---(17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
--- Act(17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
--- Act (17 CFR 240.13e-4(c))
ITEM 1.01 Entry into a Material Definitive Agreement.
On September 30, 2007, AMCON Distributing Company (the "Company") and its
consolidated subsidiary, Trinity Springs, Inc. ("TSI"), entered into a Mutual
Release and Settlement Agreement (the "Settlement Agreement") with Crystal
Paradise Holdings, Inc. ("CPH"), under which the parties settled a lawsuit
pending in the Fourth Judicial District of the State of Idaho (Case No. CV
06-1034). The lawsuit arose out of disputes relating to the sale of
substantially all of the assets of TSI pursuant to an Asset Purchase
Agreement between the parties dated April 24, 2004, as amended (the "Purchase
Agreement").
Pursuant to the terms of the Settlement Agreement:
- The parties agreed to mutually release all claims arising out of the
lawsuit and the Purchase Agreement.
- CPH was granted an eleven month option to purchase substantially all
of TSI's assets at a purchase price equal to the amount owed under the
New Note (as defined below), including interest accrued up to the time
CPH exercises such option. CPH may extend its option period up to an
additional seven months.
- The parties mutually agreed to terminate the Purchase Agreement and to
restructure their respective obligations previously owed under the
Purchase Agreement. CPH canceled and discharged the Company and TSI
from their obligations under the water royalty and two promissory
notes related to the Purchase Agreement.
- TSI issued a new promissory note to CPH in the principal amount of
$5,000,000, with interest accruing at 5% per year, compounded
annually, and with principal and accrued interest being due and
payable on September 30, 2012 (the "New Note").
- The Company entered into an amended guaranty and suretyship agreement
under which the Company guaranteed payment in full of the New Note
(the "Guaranty").
The descriptions of the Settlement Agreement, the New Note and the Guaranty
contained in this report do not purport to be complete and are qualified in
their entirety by reference to the full text of the applicable agreement and
instrument.
ITEM 1.02 Termination of a Material Definitive Agreement.
As described above in Item 1.01, on September 30, 2007 the Purchase Agreement
was terminated and the two promissory notes were canceled and discharged. We
refer you to the discussion in Item 1.01 for more information.
ITEM 8.01 Other Events.
On October 4, 2007, the Company issued a press release announcing that it had
entered into the Settlement Agreement with CPH under which the parties
settled a lawsuit. A copy of the press release is attached to this report as
Exhibit 99.1 and is incorporated herein by reference.
ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits
EXHIBIT NO. DESCRIPTION
99.1 Company Press Release dated October 4, 2007,
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: October 4, 2007 By : Andrew C. Plummer
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Name: Andrew C. Plummer
Title: Vice President & Chief
Financial Officer
EXHIBIT 99.1
AMCON DISTRIBUTING COMPANY SETTLES TRINITY SPRINGS LITIGATION
NEWS RELEASE
Chicago, IL, October 4, 2007 - AMCON Distributing Company ("AMCON")
(AMEX:DIT), an Omaha, Nebraska based consumer products company is pleased to
announce that on September 30, 2007 it entered into a settlement agreement
with Crystal Paradise Holdings, Inc. ("CPH") in connection with the purchase
and litigation surrounding the assets at AMCON's Trinity Springs Inc.
subsidiary. "We are delighted that this litigation process has come to a
close. We appreciate the good faith effort made by all the parties to bring
this to an amicable resolution. Now that we have put this litigation and the
associated uncertainties in the past we can devote management's full
resources and energy into growing AMCON's two core businesses" said
Christopher Atayan, AMCON's Chief Executive Officer.
CPH has been granted an eleven month option to purchase the assets of Trinity
Springs Inc. from AMCON. Under the terms of the settlement, both parties
have mutually released their litigation claims and AMCON will restructure and
reduce its obligations originating from the 2004 purchase transaction;
including the notes payable, the water royalty due to CPH and their minority
interest in TSI, into a $5.0 million note due in five years with interest
accruing at 5%. The eleven month purchase option has been granted to CPH for
a price equivalent to the amount of the $5.0 million note plus accrued
interest. The purchase option can also be extended an additional seven
months.
"This litigation has been a large component of our legal expense and we
expect to realize considerable legal cost savings as a result of this
settlement" said Andrew Plummer, AMCON's Chief Financial Officer.
AMCON is a leading wholesale distributor of consumer products, including
beverages, candy, tobacco, groceries, food service, frozen and chilled foods,
and health and beauty care products with distribution centers in Illinois,
Missouri, Nebraska, North Dakota and South Dakota. Chamberlin's Natural
Foods, Inc. and Health Food Associates, Inc., both wholly-owned subsidiaries
of The Healthy Edge, Inc., operate health and natural product retail stores
in central Florida (6), Kansas, Missouri, Nebraska and Oklahoma (4). The
retail stores operate under the names Chamberlin's Market & Cafe and Akins
Natural Foods Market.
This news release contains forward-looking statements that are subject to
risks and uncertainties and which reflect management's current beliefs and
estimates of future economic circumstances, industry conditions, Company
performance and financial results. A number of factors could affect the
future results of the Company and could cause those results to differ
materially from those expressed in the Company's forward-looking statements
including, without limitation, availability of sufficient cash resources to
conduct its business and meet its capital expenditures needs. Moreover, past
financial performance should not be considered a reliable indicator of future
performance. Accordingly, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995 with respect to all such forward-looking
statements.
Visit AMCON Distributing Company's web site at: www.amcon.com
For Further Information Contact:
Christopher H. Atayan
AMCON Distributing Company
Ph 312-327-1770
Fax: 312-527-3964
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