Document and Entity Information
Document and Entity Information Document | 9 Months Ended |
Jun. 30, 2021shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | RED TRAIL ENERGY, LLC |
Entity Central Index Key | 0001359687 |
Current Fiscal Year End Date | --09-30 |
Entity Filer Category | Non-accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2021 |
Entity File Number | 000-52033 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Document Quarterly Report | true |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 40,148,160 |
Entity Incorporation, State or Country Code | ND |
Entity Tax Identification Number | 76-0742311 |
Entity Address, Address Line One | 3682 Highway 8 South |
Entity Address, Address Line Two | P.O. Box 11 |
Entity Address, City or Town | Richardton |
Entity Address, State or Province | ND |
Entity Address, Postal Zip Code | 58652 |
City Area Code | 701 |
Local Phone Number | 974-3308 |
Document Transition Report | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Current Assets | ||
Cash and equivalents | $ 7,829,688 | $ 9,304,638 |
Restricted cash - margin account | 3,824,172 | 1,807,851 |
Accounts receivable, primarily related party | 2,920,313 | 1,963,236 |
Derivative Asset, Current | 582,410 | 42,005 |
Inventory | 9,749,318 | 10,137,872 |
Prepaid expenses | 648,387 | 371,283 |
Total current assets | 25,554,288 | 23,626,885 |
Property, Plant and Equipment | ||
Land | 1,333,681 | 1,333,681 |
Land improvements | 4,465,311 | 4,465,311 |
Buildings | 8,135,994 | 8,135,994 |
Plant and equipment | 88,763,119 | 88,442,644 |
Construction in progress | 23,843,159 | 9,805,770 |
Gross property, plant and equipment | 126,541,264 | 112,183,400 |
Less accumulated depreciation | 71,471,600 | 67,855,740 |
Net property, plant and equipment | 55,069,664 | 44,327,660 |
Other Assets | ||
Right of use operating lease assets, net | 854,328 | 1,008,677 |
Investment in RPMG | 605,000 | 605,000 |
Patronage equity | 4,540,963 | 4,540,963 |
Deposits | 40,000 | 40,000 |
Total other assets | 6,040,291 | 6,194,640 |
Total Assets | 86,664,243 | 74,149,185 |
Current Liabilities | ||
Accounts payable | 3,206,996 | 4,299,764 |
Accrued expenses | 2,563,208 | 1,937,555 |
Accrued loss on firm purchase commitments (see notes 3 and 7) | 0 | 130,000 |
Other Liabilities, Current | 7,334 | 0 |
Current maturities of notes payable | 716,918 | 1,276,256 |
Current portion of operating lease liabilities | 370,150 | 364,862 |
Total current liabilities | 6,864,606 | 8,008,437 |
Long-Term Liabilities | ||
Notes payable | 4,081,439 | 4,916,081 |
Long-term operating lease liabilities | 484,178 | 643,815 |
Total long-term liabilities | 4,565,617 | 5,559,896 |
Stockholders' Equity Attributable to Parent | 75,234,020 | 60,580,852 |
Total Liabilities and Members’ Equity | $ 86,664,243 | $ 74,149,185 |
Membership units outstanding | 40,148,160 |
Condensed Balance Sheets Parent
Condensed Balance Sheets Parenthetical | Jun. 30, 2021shares |
Statement of Financial Position [Abstract] | |
Membership units outstanding | 40,148,160 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenues, primarily related party | $ 42,741,846 | $ 22,670,742 | $ 104,563,490 | $ 72,649,799 |
Cost of Goods Sold | ||||
Cost of goods sold | 32,371,643 | 19,220,909 | 84,150,555 | 71,726,947 |
Lower of cost or net realizable value adjustment | 0 | 0 | 263,777 | 241,294 |
Loss on firm purchase commitments | 0 | 0 | 0 | 100,000 |
Total Cost of Goods Sold | 32,371,643 | 19,220,909 | 84,414,332 | 72,068,241 |
Gross Profit | 10,370,203 | 3,449,833 | 20,149,158 | 581,558 |
General and Administrative Expenses | 854,179 | 1,272,698 | 3,173,878 | 3,096,666 |
Operating Income (Loss) | 9,516,024 | 2,177,135 | 16,975,280 | (2,515,108) |
Other Income (Expense) | ||||
Interest income | (615) | 18,369 | 40,016 | 86,758 |
Other income | 2,587 | 9,099 | 888,316 | 145,178 |
Interest expense | (12,562) | (39) | (38,588) | (171) |
Total other income (expense), net | (10,590) | 27,429 | 889,744 | 231,765 |
Net Income (Loss) | $ 9,505,434 | $ 2,204,564 | $ 17,865,024 | $ (2,283,343) |
Weighted Average Units Outstanding, Basic | 40,148,160 | 40,148,160 | 40,148,160 | 40,148,160 |
Weighted Average Units Outstanding, Diluted | 40,148,160 | 40,148,160 | 40,148,160 | 40,148,160 |
Net Income (Loss) Per Unit, Basic | $ 0.24 | $ 0.05 | $ 0.44 | $ (0.06) |
Net Income (Loss) Per Unit, Diluted | $ 0.24 | $ 0.05 | $ 0.44 | $ (0.06) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ 17,865,024 | $ (2,283,343) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 3,615,860 | 3,568,154 |
Gain (Loss) on Disposition of Property Plant Equipment | 0 | (8,212) |
Change in fair value of derivative instruments | (540,405) | (39,716) |
Lower of cost of net realizable value adjustment | (263,777) | (241,294) |
Loss on firm purchase commitments | 0 | 100,000 |
Paycheck Protection Program Loan Forgiveness | (873,400) | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | (957,077) | 769,411 |
Inventory | 124,776 | (1,566,996) |
Prepaid expenses | (277,104) | (443,571) |
Increase (Decrease) in Customer Deposits | 7,334 | 0 |
Accounts payable | (1,214,371) | (2,749,658) |
Accrued expenses | 625,653 | 6,806,799 |
Accrued purchase commitment losses | (130,000) | (55,000) |
Net cash provided by operating activities | 18,510,067 | 4,339,162 |
Proceeds from disposal of fixed assets | 0 | 8,212 |
Cash Flows from Investing Activities | ||
Capital expenditures | (14,236,260) | (6,062,324) |
Net cash (used in) investing activities | (14,236,260) | (6,054,112) |
Dividends and Interest Paid | (3,211,856) | 0 |
Proceeds from Issuance of Debt | 0 | 873,400 |
Cash Flows from Financing Activities | ||
Debt repayments | 520,580 | 3,386 |
Net cash provided by (used in) financing activities | (3,732,436) | 870,014 |
Net Change in Cash, Cash Equivalents and Restricted Cash | 541,371 | (844,936) |
Cash, Cash Equivalents and Restricted Cash - Beginning of Period | 11,112,489 | 10,522,069 |
Cash, Cash Equivalents and Restricted Cash - End of Period | 11,653,860 | 9,677,133 |
Cash and equivalents | 7,829,688 | 8,065,941 |
Restricted Cash and Cash Equivalents | 3,824,172 | 1,611,192 |
Cash, cash equivalents and restricted cash | 11,653,860 | 9,677,133 |
Supplemental Disclosure of Cash Flow Information | ||
Interest paid | 38,588 | 12 |
Noncash Investing and Financing Activities | ||
Finance lease asset acquired | 0 | 23,173 |
Operating lease asset acquired | 81,729 | 168,300 |
Capital expenditures in accounts payable | $ 121,604 | $ 8,891 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Red Trail Energy, LLC, a North Dakota limited liability company (the “Company”), owns and operates a 50 million gallon annual name-plate production ethanol plant near Richardton, North Dakota (the “Plant”). Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenues and expenses. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, inventory and allowance for doubtful accounts. Actual results could differ from those estimates. Net Income Per Unit Net income per unit is calculated on a basic and fully diluted basis using the weighted average units outstanding during the period. Recently Adopted Accounting Pronouncements Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “ Measurement of Credit Losses on Financial Instruments .” ASU 2016-13 adds a current expected credit loss (“ CECL ”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Effective October 1, 2020, the Company adopted ASU 2016-13 using the modified retrospective approach. As of June 30, 2021 there has been no impact of adoption for the fiscal year ended September 30, 2021. The Company expects the impact of adopting the new standard to be immaterial on an ongoing basis. Lease Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, "Leases (topic 842)" which requires a lessee to recognize a right to use asset and a lease liability on its balance sheet for all leases with terms of twelve months or greater. This guidance is effective for fiscal years beginning after December 15, 2018, included interim periods within those years with early adoption permitted. Effective October 1, 2019 the Company adopted ASU No. 2016-02 using the modified retrospective approach. See note 7 for current operating and financing lease commitments. |
Nature of Operations | Nature of Business |
Revenue
Revenue | 9 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Revenue Recognition The Company recognizes revenue from sales of ethanol and co-products at the point in time when the performance obligations in the contract are met, which is when the customer obtains control of such products and typically occurs upon shipment depending on the terms of the underlying contracts. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. In some instances, the Company enters into contracts with customers that contain multiple performance obligations to deliver specified volumes of co-products over a contractual period of less than 12 months. In such instances, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices and recognizes the related revenue as control of each individual product is transferred to the customer in satisfaction of the corresponding performance obligation. Revenue by Source The following table disaggregates revenue by major source for the three and nine months ended June 30, 2021 and 2020. Revenues For the three months ended June 30, 2021 (unaudited) For the three months ended June 30, 2020 (unaudited) For the nine months ended June 30, 2021 (unaudited) For the nine months ended June 30, 2020 (unaudited) Ethanol, E85 and Industrial Alcohol $ 32,583,227 $ 17,529,809 $ 80,799,293 $ 55,630,844 Distillers Grains 7,932,798 4,176,444 18,618,186 13,906,736 Syrup 476,873 59,274 877,630 253,344 Corn Oil 1,706,942 868,578 4,131,184 2,726,614 Other 42,006 36,637 137,197 132,261 Total revenue from contracts with customers $ 42,741,846 $ 22,670,742 $ 104,563,490 $ 72,649,799 Shipping and Handling Costs We account for shipping and handling activities related to contracts with customers as costs to fulfill our promises to transfer the associated products. Accordingly, we record customer payments associated with shipping and handling costs as a component of revenue, and classify such costs as a component of cost of goods sold. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Commodity Contracts As part of its hedging strategy, the Company may enter into ethanol, soybean, soybean oil, natural gas and corn commodity-based derivatives in order to protect cash flows from fluctuations caused by volatility in commodity prices in order to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sales, corn oil sales, and corn purchase commitments where the prices are set at a future date. These derivatives are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change. Ethanol derivative fair market value gains or losses are included in the results of operations and are classified as revenue, and corn derivative changes in fair market value are included in cost of goods sold. As of: June 30, 2021 (unaudited) September 30, 2020 Contract Type # of Contracts Notional Amount (Qty) Fair Value # of Contracts Notional Amount (Qty) Fair Value Corn futures — — bushels $ — 30 1,260,000 bushels $ 104,068 Corn options 100 500,000 bushels $ (75,625) 83 415,000 bushels $ (62,063) Ethanol futures 35 1,470,000 gal $ 658,035 — — gal $ — Total fair value $ 582,410 $ 42,005 Amounts are combined on the balance sheet - negative numbers represent liabilities The following tables provide details regarding the Company's derivative financial instruments at June 30, 2021 and September 30, 2020: Derivatives not designated as hedging instruments: Balance Sheet - as of June 30, 2021 (unaudited) Asset Liability Commodity derivative instruments, at fair value $ 582,410 $ — Total derivatives not designated as hedging instruments for accounting purposes $ 582,410 $ — Balance Sheet - as of September 30, 2020 Asset Liability Commodity derivative instruments, at fair value $ 42,005 $ — Total derivatives not designated as hedging instruments for accounting purposes $ 42,005 $ — Statement of Operations Income/(Expense) Location of gain (loss) in fair value recognized in income Amount of gain (loss) recognized in income during the three months ended June 30, 2021 (unaudited) Amount of gain (loss) recognized in income during the three months ended June 30, 2020 (unaudited) Amount of gain (loss) recognized in income during the nine months ended June 30, 2021 (unaudited) Amount of gain (loss) recognized in income during the nine months ended June 30, 2020 (unaudited) Corn derivative instruments Cost of Goods Sold $ 567,691 $ (270,925) $ 1,266,401 $ (539,099) Ethanol derivative instruments Revenue 493,764 233,372 1,288,915 258,836 Natural gas derivative instruments Cost of Goods Sold — — 1,410 — Total $ 1,061,455 $ (37,553) $ 2,556,726 $ (280,263) |
Inventory
Inventory | 9 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | INVENTORY Inventory is valued at the lower of cost or net realizable value. Inventory values as of June 30, 2021 and September 30, 2020 were as follows: June 30, 2021 September 30, 2020 Raw materials, including corn, chemicals and supplies $ 5,032,919 $ 4,031,086 Work in process 1,072,680 765,673 Finished goods, including ethanol and distillers grains 2,091,975 3,914,117 Spare parts 1,551,744 1,426,996 Total inventory $ 9,749,318 $ 10,137,872 Lower of cost or net realizable value adjustments for the three and nine months ended June 30, 2021 and 2020 were as follows: For the three months ended June 30, 2021 (unaudited) For the three months ended June 30, 2020 (unaudited) For the nine months ended June 30, 2021 (unaudited) For the nine months ended June 30, 2020 (unaudited) Loss on firm purchase commitments $ — $ — $ — $ 100,000 Loss on lower of cost or net realizable value adjustment for inventory on hand $ — $ — $ 263,777 $ 241,294 Total loss on lower of cost or net realizable value adjustments $ — $ — $ 263,777 $ 341,294 The Company has entered into forward corn purchase contracts under which it is required to take delivery at the contract price. At the time the contracts were created, the price of the contract approximated market price. Subsequent changes in market conditions could cause the contract prices to become higher or lower than market prices. As of June 30, 2021, the average price of corn purchased under certain fixed price contracts, that had not yet been delivered, approximated market price. Based on this information, the Company has no estimated loss on firm purchase commitments for the nine months ended June 30, 2021 and a $100,000 estimated loss on firm purchase commitments for the nine months ended June 30, 2020. The loss is recorded in “Loss on firm purchase commitments” on the statement of operations and "Accrued loss on firm purchase commitments" on the balance sheet. The amount of the potential loss was determined by applying a methodology similar to that used in the impairment valuation with respect to inventory. Given the uncertainty of future ethanol prices, future losses on the outstanding purchase commitments could be recorded in future periods. |
Bank Financing
Bank Financing | 9 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Bank Financing | BANK FINANCING On July 13, 2020, we received a $5.41 million loan through the Bank of North Dakota's Ethanol Recovery Program and Cornerstone Bank ("Cornerstone"). The Ethanol Recovery Program was developed by the North Dakota Ethanol Producers Association and the Bank of North Dakota to use the existing Biofuels Partnership in Assisting Community Expansion ("PACE") program and Value-added Guarantee Loan program to help ethanol production facilities weather the economic challenges caused by the COVID-19 pandemic. Ethanol producers could qualify for up to $15 million of a low interest loan of 1% based on the amount of such producers' annual corn grind. The outstanding balance as of June 30, 2021 is $4.78 million. The maturity date of the loan is July 13, 2025. The fixed interest rate on June 30, 2021 was 3.75% with an interest rate buy down through the Bank of North Dakota to 1%. On February 1, 2021 we renewed our $10 million revolving loan (the "Revolving Loan") with Cornerstone. The maturity date of the Revolving Loan is January 31, 2022. At June 30, 2021, we had $10 million available under the Revolving Loan. The variable interest rate on June 30, 2021 was 3.00%. On January 22, 2020, we entered into a $7 million construction loan (the "Construction Loan") with Cornerstone. The original maturity date of the Construction Loan was June 1, 2021. On June 3, 2021 we extended the maturity date to February 1, 2022. At June 30, 2021, we had $7 million available under the Construction Loan. The variable interest rate on June 30, 2021 was 3.00%. On February 1, 2021 we entered into a $28 million construction loan (the "CCS Construction Loan") with Cornerstone for the carbon capture and storage project. The maturity date of the CCS Construction Loan is January 31, 2022. At June 30, 2021 we had $28 million available under the CCS Construction Loan. The variable interest rate on June 30, 2021 was 3.00%. On April 16, 2020, the Company received a Paycheck Protection Program Loan (the "PPP Loan") for $873,400 with Cornerstone. The maturity date of the PPP Loan was April 16, 2022. The fixed interest rate was 1.00%. Under the terms of the PPP Loan, the Company applied for forgiveness of the entire amount of the PPP Loan on October 31, 2020, in accordance with PPP regulations, which provided for the possibility of loan forgiveness because the Company used all proceeds of the PPP Loan for qualifying expenses in accordance with PPP requirements. The entire amount of the PPP Loan was forgiven on January 20, 2021. The forgiven amount was recorded as other income. The Company's loans are secured by a lien on substantially all of the assets of the Company. Schedule of debt maturities for the twelve months ending June 30 Totals 2021 $ 716,918 2022 745,002 2023 772,869 2024 800,130 2025 1,763,438 Total $ 4,798,357 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The following table provides information on those liabilities that are measured at fair value on a recurring basis as of June 30, 2021 and September 30, 2020, respectively. Fair Value Measurement Using Carrying Amount as of June 30, 2021 (unaudited) Fair Value as of June 30, 2021 (unaudited) Level 1 Level 2 Level 3 Assets Commodities derivative instruments $ 582,410 $ 582,410 $ 582,410 $ — $ — Total $ 582,410 $ 582,410 $ 582,410 $ — $ — Fair Value Measurement Using Carrying Amount as of September 30, 2020 Fair Value as of September 30, 2020 Level 1 Level 2 Level 3 Assets Commodities derivative instruments $ 42,005 $ 42,005 $ 42,005 $ — $ — Total $ 42,005 $ 42,005 $ 42,005 $ — $ — |
Leases
Leases | 9 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases | LEASES Effective October 1, 2019, the Company adopted the provisions of ASU No. 2016-02, "Leases (topic 842)" using the modified retrospective approach which applies the provisions of ASU No. 2016-02 upon adoption, with no change to prior periods. This adoption resulted in the Company recognizing initial right of use assets and lease liabilities of $1,418,000. The adoption did not have a significant impact on the Company's statement of operations. Upon the initial adoption of ASU No. 2016-02, the Company elected the following practical expedients allowable under the guidance: not to reassess whether any expired or existing contracts are or contain leases; not to reassess the lease classification for any expired or existing leases; not to reassess initial direct costs for any existing leases; not to separately identify lease and nonlease components; and not to evaluate historical land easements. Additionally, the Company elected the short-term lease exemption policy, applying the requirements of ASU No. 2016-02 to only long-term (greater than one year) leases. The Company leases railcar and plant equipment. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the nine months ended June 30, 2021, the Company's estimated discount rate was 3.00%. Operating lease expense is recognized on a straight-line basis over the lease term. The Company determines if an arrangement is a lease or contains a lease at inception. The Company's existing leases have remaining lease terms of approximately one year to four years, which may include options to extend the leases when it is reasonably certain the Company will exercise those options. At June 30, 2021 the weighted average remaining lease term was two years. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The Company does not have any sublease agreements. The Company is generally responsible for maintenance, taxes, and utilities for leased equipment. Rent expense for operating leases was approximately $506,900 and $570,000 for the nine months ended June 30, 2021 and 2020, respectively. Equipment under financing leases consists of office equipment and plant equipment. At June 30, 2021 and September 30, 2020, equipment under financing leases was as follows: June 30, 2021 September 30, 2020 Equipment $ 493,414 $ 493,414 Less accumulated amortization (190,528) (172,944) Net equipment under financing lease $ 302,886 $ 320,470 At June 30, 2021, the Company had the following minimum commitments, which at inception had non-cancellable terms of more than one year. Amounts shown below are for the 12 month periods ending June 30: Operating Leases Financing Leases 2021 $ 370,150 $ 4,534 2022 350,220 4,568 2023 133,958 4,602 2024 — 1,836 Thereafter — — Total minimum lease commitments $ 854,328 15,540 Less amount representing interest — Present value of minimum lease commitments included in notes payable on the balance sheet $ 15,540 |
Leases | LEASES Effective October 1, 2019, the Company adopted the provisions of ASU No. 2016-02, "Leases (topic 842)" using the modified retrospective approach which applies the provisions of ASU No. 2016-02 upon adoption, with no change to prior periods. This adoption resulted in the Company recognizing initial right of use assets and lease liabilities of $1,418,000. The adoption did not have a significant impact on the Company's statement of operations. Upon the initial adoption of ASU No. 2016-02, the Company elected the following practical expedients allowable under the guidance: not to reassess whether any expired or existing contracts are or contain leases; not to reassess the lease classification for any expired or existing leases; not to reassess initial direct costs for any existing leases; not to separately identify lease and nonlease components; and not to evaluate historical land easements. Additionally, the Company elected the short-term lease exemption policy, applying the requirements of ASU No. 2016-02 to only long-term (greater than one year) leases. The Company leases railcar and plant equipment. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the nine months ended June 30, 2021, the Company's estimated discount rate was 3.00%. Operating lease expense is recognized on a straight-line basis over the lease term. The Company determines if an arrangement is a lease or contains a lease at inception. The Company's existing leases have remaining lease terms of approximately one year to four years, which may include options to extend the leases when it is reasonably certain the Company will exercise those options. At June 30, 2021 the weighted average remaining lease term was two years. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The Company does not have any sublease agreements. The Company is generally responsible for maintenance, taxes, and utilities for leased equipment. Rent expense for operating leases was approximately $506,900 and $570,000 for the nine months ended June 30, 2021 and 2020, respectively. Equipment under financing leases consists of office equipment and plant equipment. At June 30, 2021 and September 30, 2020, equipment under financing leases was as follows: June 30, 2021 September 30, 2020 Equipment $ 493,414 $ 493,414 Less accumulated amortization (190,528) (172,944) Net equipment under financing lease $ 302,886 $ 320,470 At June 30, 2021, the Company had the following minimum commitments, which at inception had non-cancellable terms of more than one year. Amounts shown below are for the 12 month periods ending June 30: Operating Leases Financing Leases 2021 $ 370,150 $ 4,534 2022 350,220 4,568 2023 133,958 4,602 2024 — 1,836 Thereafter — — Total minimum lease commitments $ 854,328 15,540 Less amount representing interest — Present value of minimum lease commitments included in notes payable on the balance sheet $ 15,540 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Firm Purchase Commitments for Corn To ensure an adequate supply of corn to operate the Plant, the Company enters into contracts to purchase corn from local farmers and elevators. At June 30, 2021, the Company had various fixed price contracts for the purchase of approximately 0.7 million bushels of corn. Using the stated contract price for the fixed price contracts, the Company had commitments of approximately $3.5 million related to the 0.7 million bushels under contract. Water On April 21, 2015, we entered into a ten Profit and Cost Sharing Agreement The Company entered into a Profit and Cost Sharing Agreement with Bismarck Land Company, LLC, which became effective on November 1, 2016. The Profit and Cost Sharing Agreement provides that the Company will share 70% of the net revenue generated by the Company from business activities which are brought to the Company by Bismarck Land Company, LLC and conducted on the real estate purchased from the Bismarck Land Company, LLC. The real estate was initially purchased in exchange for 2 million membership units of the Company at $1.66 per unit. This obligation will terminate ten years after the real estate closing date of October 11, 2016 or after Bismarck Land Company, LLC receives $10 million in proceeds from the agreement. In addition, the Profit and Cost Sharing Agreement provides that the Company will pay Bismarck Land Company, LLC 70% of any net proceeds received by the Company from the sale of the subject real estate if a sale were to occur prior to termination of this obligation in accordance with the $10 million cap or the ten Carbon Capture and Storage Project On July 30, 2018, the Company entered into a research agreement with the University of North Dakota Energy and Environmental Research Center to explore the feasibility of injecting carbon dioxide ("CO2") from the fermentation process into a saline formation to lower the carbon intensity value of our ethanol. The Company committed to fund up to $950,000 for this research. The Company had incurred $949,631 through the third quarter of the 2020 fiscal year which is recorded as consulting services under general and administrative expenses. The commitment was fully paid as of June 30, 2021. On October 1, 2020, the Company entered into an agreement with Salof LTD, Inc. for the design, engineering, fabrication and start up of the CO2 capture and liquefaction facility for the carbon capture and storage project. The price of the system including all equipment and services is $11,845,000. The Company has paid $5,922,500 as of June 30, 2021 which is recorded as construction in progress. On May 6, 2021, the Company entered into an agreement with Direct Automation for the DCS Computer System for the carbon capture and storage project. The price of the system including all equipment and installation is $800,992. The Company has paid $342,825 as of June 30, 2021 which is recorded as construction in progress. Industrial Alcohol Project On October 6, 2020, the Company entered into an agreement with Praj Industries Limited to purchase a 25 million gallon per year Eco-Smart Distillation unit to produce United States Pharmacopeia ("USP") grade alcohol. The price of the system is $2,659,500, of which the Company had paid $2,659,500 as of June 30, 2021 which is recorded as construction in progress. On April 13, 2021, the Company entered into an agreement with Tooz Construction, Inc. for the construction of the building foundation for the new distillation building for the Eco-Smart Distillation unit. The price of materials and labor is $178,057. The Company has paid $27,382 as of June 30, 2021 which is recorded as construction in progress. As of June 30, 2021 the Company has paid a total of $4.3 million towards the Industrial Alcohol Project and a total of $15.1 million towards the Carbon Capture and Storage Project, which are both recorded as construction in progress. The remaining cost to complete the Industrial Alcohol Project is roughly $1.9 million and the remaining cost to complete the Carbon Capture and Storage Project is roughly $14 million. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONSThe Company has balances and transactions in the normal course of business with various related parties for the purchase of corn, sale of distillers grains and sale of ethanol. The related parties include unit holders, members of the board of governors of the Company, and RPMG, Inc. (“RPMG”). Significant related party activity affecting the financial statements is as follows: June 30, 2021 September 30, 2020 Balance Sheet Accounts receivable $ 2,701,564 $ 1,777,576 Accounts payable 121,374 188,457 Accrued expenses 448,758 650,833 For the three months ended June 30, 2021 (unaudited) For the three months ended June 30, 2020 (unaudited) For the nine months ended June 30, 2021 (unaudited) For the nine months ended June 30, 2020 (unaudited) Statement of Operations Revenues $ 39,664,319 $ 19,128,595 $ 95,934,627 $ 64,823,447 Cost of goods sold 533,438 260,158 1,605,195 1,551,865 General and administrative 109,447 30,286 169,910 105,444 Other income — 119,825 — 239,650 Inventory Purchases $ 4,842,958 $ 6,449,514 $ 10,504,616 $ 14,852,088 |
Uncertainties Impacting the Eth
Uncertainties Impacting the Ethanol Industry and Our Future Operations | 9 Months Ended |
Jun. 30, 2021 | |
Uncertainties Impacting the Ethanol Industry and Our Future Operations [Abstract] | |
Uncertainties Impacting the Ethanol Industry and Our Future Operations | UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS During volatile market conditions, the Company experiences certain risks and uncertainties, which could have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distillers grains to customers primarily located in the United States. Corn for the production process is supplied to the Plant primarily from local agricultural producers and from purchases on the open market. The Company's operating and financial performance is largely driven by prices at which the Company sells ethanol and distillers grains and by the cost at which it is able to purchase corn for operations. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets, although since 2005 the prices of ethanol and gasoline began a divergence with ethanol, which has generally been selling for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities. The Company's financial performance is highly dependent on the Federal Renewable Fuels Standard ("RFS"), which requires that a certain amount of renewable fuels must be used each year in the United States. Corn based ethanol, such as the ethanol the Company produces, can be used to meet a portion of the RFS requirement. In November 2013, the EPA issued a proposed rule which would reduce the RFS for 2014, including the RFS requirement related to corn based ethanol. The EPA proposed rule was subject to a comment period which expired in January 2014. On November 30, 2015, the EPA released its final ethanol use requirements for 2014, 2015 and 2016, which were lower than the statutory requirements in the RFS. However, the final RFS for 2017 equaled the statutory requirement which was also the case for the 2018, 2019 and 2020 RFS final rules. No final RFS has been established for 2021. |
Member's Equity
Member's Equity | 9 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Member's Equity | MEMBER'S EQUITY Changes in member's equity for the nine months ended June 30, 2021 and 2020. Class A Member Units Additional Paid in Capital Accumulated Deficit/Retained Earnings Treasury Units Total Member Equity Balances - September 30, 2020 $ 39,044,595 $ 75,541 $ 21,620,256 $ (159,540) $ 60,580,852 Net income (loss) 2,265,694 2,265,694 Balances December 31, 2020 $ 39,044,595 $ 75,541 $ 23,885,950 $ (159,540) $ 62,846,546 Distribution (3,211,856) (3,211,856) Net income (loss) 6,093,896 6,093,896 Balances - March 31, 2021 $ 39,044,595 $ 75,541 $ 26,767,990 $ (159,540) $ 65,728,586 Net income (loss) $ 9,505,434 $ 9,505,434 Balances - June 30, 2021 $ 39,044,595 $ 75,541 $ 36,273,424 $ (159,540) $ 75,234,020 Class A Member Units Additional Paid in Capital Accumulated Deficit/Retained Earnings Treasury Units Total Member Equity Balances - September 30, 2019 $ 39,044,595 $ 75,541 $ 21,613,668 $ (159,540) $ 60,574,264 Net income (loss) (1,251,913) (1,251,913) Balances - December 31, 2019 $ 39,044,595 $ 75,541 $ 20,361,755 $ (159,540) $ 59,322,351 Distribution $ — $ — Net income (loss) $ (3,235,994) $ (3,235,994) Balances - March 31, 2020 $ 39,044,595 $ 75,541 $ 17,125,761 $ (159,540) $ 56,086,357 Net income (loss) — — 2,204,564 — 2,204,564 Balances - June 30, 2020 $ 39,044,595 $ 75,541 $ 19,330,325 $ (159,540) $ 58,290,921 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENTSManagement evaluated all other activity of the Company and concluded that no subsequent events have occurred that would require recognition in the condensed financial statements or disclosure in the notes to the condensed financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Accounting Estimates | Accounting Estimates |
Net Income Per Unit | Net Income Per UnitNet income per unit is calculated on a basic and fully diluted basis using the weighted average units outstanding during the period. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “ Measurement of Credit Losses on Financial Instruments .” ASU 2016-13 adds a current expected credit loss (“ CECL ”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Effective October 1, 2020, the Company adopted ASU 2016-13 using the modified retrospective approach. As of June 30, 2021 there has been no impact of adoption for the fiscal year ended September 30, 2021. The Company expects the impact of adopting the new standard to be immaterial on an ongoing basis. Lease Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, "Leases (topic 842)" which requires a lessee to recognize a right to use asset and a lease liability on its balance sheet for all leases with terms of twelve months or greater. This guidance is effective for fiscal years beginning after December 15, 2018, included interim periods within those years with early adoption permitted. Effective October 1, 2019 the Company adopted ASU No. 2016-02 using the modified retrospective approach. See note 7 for current operating and financing lease commitments. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates revenue by major source for the three and nine months ended June 30, 2021 and 2020. Revenues For the three months ended June 30, 2021 (unaudited) For the three months ended June 30, 2020 (unaudited) For the nine months ended June 30, 2021 (unaudited) For the nine months ended June 30, 2020 (unaudited) Ethanol, E85 and Industrial Alcohol $ 32,583,227 $ 17,529,809 $ 80,799,293 $ 55,630,844 Distillers Grains 7,932,798 4,176,444 18,618,186 13,906,736 Syrup 476,873 59,274 877,630 253,344 Corn Oil 1,706,942 868,578 4,131,184 2,726,614 Other 42,006 36,637 137,197 132,261 Total revenue from contracts with customers $ 42,741,846 $ 22,670,742 $ 104,563,490 $ 72,649,799 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments Commodity Contracts | As of: June 30, 2021 (unaudited) September 30, 2020 Contract Type # of Contracts Notional Amount (Qty) Fair Value # of Contracts Notional Amount (Qty) Fair Value Corn futures — — bushels $ — 30 1,260,000 bushels $ 104,068 Corn options 100 500,000 bushels $ (75,625) 83 415,000 bushels $ (62,063) Ethanol futures 35 1,470,000 gal $ 658,035 — — gal $ — Total fair value $ 582,410 $ 42,005 Amounts are combined on the balance sheet - negative numbers represent liabilities |
Derivatives Not Designated As Hedging Instruments, Balance Sheet | The following tables provide details regarding the Company's derivative financial instruments at June 30, 2021 and September 30, 2020: Derivatives not designated as hedging instruments: Balance Sheet - as of June 30, 2021 (unaudited) Asset Liability Commodity derivative instruments, at fair value $ 582,410 $ — Total derivatives not designated as hedging instruments for accounting purposes $ 582,410 $ — Balance Sheet - as of September 30, 2020 Asset Liability Commodity derivative instruments, at fair value $ 42,005 $ — Total derivatives not designated as hedging instruments for accounting purposes $ 42,005 $ — |
Derivatives Not Designated as Hedging Instruments, Statement of Operations | Statement of Operations Income/(Expense) Location of gain (loss) in fair value recognized in income Amount of gain (loss) recognized in income during the three months ended June 30, 2021 (unaudited) Amount of gain (loss) recognized in income during the three months ended June 30, 2020 (unaudited) Amount of gain (loss) recognized in income during the nine months ended June 30, 2021 (unaudited) Amount of gain (loss) recognized in income during the nine months ended June 30, 2020 (unaudited) Corn derivative instruments Cost of Goods Sold $ 567,691 $ (270,925) $ 1,266,401 $ (539,099) Ethanol derivative instruments Revenue 493,764 233,372 1,288,915 258,836 Natural gas derivative instruments Cost of Goods Sold — — 1,410 — Total $ 1,061,455 $ (37,553) $ 2,556,726 $ (280,263) |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory is valued at the lower of cost or net realizable value. Inventory values as of June 30, 2021 and September 30, 2020 were as follows: June 30, 2021 September 30, 2020 Raw materials, including corn, chemicals and supplies $ 5,032,919 $ 4,031,086 Work in process 1,072,680 765,673 Finished goods, including ethanol and distillers grains 2,091,975 3,914,117 Spare parts 1,551,744 1,426,996 Total inventory $ 9,749,318 $ 10,137,872 |
Long-term Purchase Commitment | Lower of cost or net realizable value adjustments for the three and nine months ended June 30, 2021 and 2020 were as follows: For the three months ended June 30, 2021 (unaudited) For the three months ended June 30, 2020 (unaudited) For the nine months ended June 30, 2021 (unaudited) For the nine months ended June 30, 2020 (unaudited) Loss on firm purchase commitments $ — $ — $ — $ 100,000 Loss on lower of cost or net realizable value adjustment for inventory on hand $ — $ — $ 263,777 $ 241,294 Total loss on lower of cost or net realizable value adjustments $ — $ — $ 263,777 $ 341,294 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | The Company's loans are secured by a lien on substantially all of the assets of the Company. Schedule of debt maturities for the twelve months ending June 30 Totals 2021 $ 716,918 2022 745,002 2023 772,869 2024 800,130 2025 1,763,438 Total $ 4,798,357 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides information on those liabilities that are measured at fair value on a recurring basis as of June 30, 2021 and September 30, 2020, respectively. Fair Value Measurement Using Carrying Amount as of June 30, 2021 (unaudited) Fair Value as of June 30, 2021 (unaudited) Level 1 Level 2 Level 3 Assets Commodities derivative instruments $ 582,410 $ 582,410 $ 582,410 $ — $ — Total $ 582,410 $ 582,410 $ 582,410 $ — $ — Fair Value Measurement Using Carrying Amount as of September 30, 2020 Fair Value as of September 30, 2020 Level 1 Level 2 Level 3 Assets Commodities derivative instruments $ 42,005 $ 42,005 $ 42,005 $ — $ — Total $ 42,005 $ 42,005 $ 42,005 $ — $ — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Schedule of Capital Leased Assets | quipment under financing leases was as follows: June 30, 2021 September 30, 2020 Equipment $ 493,414 $ 493,414 Less accumulated amortization (190,528) (172,944) Net equipment under financing lease $ 302,886 $ 320,470 |
Schedule of Future Minimum Payments for Capital Leases | At June 30, 2021, the Company had the following minimum commitments, which at inception had non-cancellable terms of more than one year. Amounts shown below are for the 12 month periods ending June 30: Operating Leases Financing Leases 2021 $ 370,150 $ 4,534 2022 350,220 4,568 2023 133,958 4,602 2024 — 1,836 Thereafter — — Total minimum lease commitments $ 854,328 15,540 Less amount representing interest — Present value of minimum lease commitments included in notes payable on the balance sheet $ 15,540 |
Schedule of Future Minimum Payments for Operating Leases | At June 30, 2021, the Company had the following minimum commitments, which at inception had non-cancellable terms of more than one year. Amounts shown below are for the 12 month periods ending June 30: Operating Leases Financing Leases 2021 $ 370,150 $ 4,534 2022 350,220 4,568 2023 133,958 4,602 2024 — 1,836 Thereafter — — Total minimum lease commitments $ 854,328 15,540 Less amount representing interest — Present value of minimum lease commitments included in notes payable on the balance sheet $ 15,540 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Significant related party activity affecting the financial statements is as follows: June 30, 2021 September 30, 2020 Balance Sheet Accounts receivable $ 2,701,564 $ 1,777,576 Accounts payable 121,374 188,457 Accrued expenses 448,758 650,833 For the three months ended June 30, 2021 (unaudited) For the three months ended June 30, 2020 (unaudited) For the nine months ended June 30, 2021 (unaudited) For the nine months ended June 30, 2020 (unaudited) Statement of Operations Revenues $ 39,664,319 $ 19,128,595 $ 95,934,627 $ 64,823,447 Cost of goods sold 533,438 260,158 1,605,195 1,551,865 General and administrative 109,447 30,286 169,910 105,444 Other income — 119,825 — 239,650 Inventory Purchases $ 4,842,958 $ 6,449,514 $ 10,504,616 $ 14,852,088 |
Member's Equity (Tables)
Member's Equity (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of Changes in Member's Equity | Changes in member's equity for the nine months ended June 30, 2021 and 2020. Class A Member Units Additional Paid in Capital Accumulated Deficit/Retained Earnings Treasury Units Total Member Equity Balances - September 30, 2020 $ 39,044,595 $ 75,541 $ 21,620,256 $ (159,540) $ 60,580,852 Net income (loss) 2,265,694 2,265,694 Balances December 31, 2020 $ 39,044,595 $ 75,541 $ 23,885,950 $ (159,540) $ 62,846,546 Distribution (3,211,856) (3,211,856) Net income (loss) 6,093,896 6,093,896 Balances - March 31, 2021 $ 39,044,595 $ 75,541 $ 26,767,990 $ (159,540) $ 65,728,586 Net income (loss) $ 9,505,434 $ 9,505,434 Balances - June 30, 2021 $ 39,044,595 $ 75,541 $ 36,273,424 $ (159,540) $ 75,234,020 Class A Member Units Additional Paid in Capital Accumulated Deficit/Retained Earnings Treasury Units Total Member Equity Balances - September 30, 2019 $ 39,044,595 $ 75,541 $ 21,613,668 $ (159,540) $ 60,574,264 Net income (loss) (1,251,913) (1,251,913) Balances - December 31, 2019 $ 39,044,595 $ 75,541 $ 20,361,755 $ (159,540) $ 59,322,351 Distribution $ — $ — Net income (loss) $ (3,235,994) $ (3,235,994) Balances - March 31, 2020 $ 39,044,595 $ 75,541 $ 17,125,761 $ (159,540) $ 56,086,357 Net income (loss) — — 2,204,564 — 2,204,564 Balances - June 30, 2020 $ 39,044,595 $ 75,541 $ 19,330,325 $ (159,540) $ 58,290,921 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Nature of Business (Details) gal in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)gal | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Product Information [Line Items] | ||||||
Net cash provided by operating activities | $ 18,510,067 | $ 4,339,162 | ||||
Cash, cash equivalents and restricted cash | $ 11,653,860 | $ 9,677,133 | 11,653,860 | 9,677,133 | $ 11,112,489 | $ 10,522,069 |
Loss on firm purchase commitments | $ 0 | $ 0 | $ 0 | $ 100,000 | ||
Ethanol | ||||||
Product Information [Line Items] | ||||||
Annual production capacity | gal | 50 |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | $ 42,741,846 | $ 22,670,742 | $ 104,563,490 | $ 72,649,799 |
Ethanol, E85 and Industrial Alcohol | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 32,583,227 | 17,529,809 | 80,799,293 | 55,630,844 |
Distillers Grains | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 7,932,798 | 4,176,444 | 18,618,186 | 13,906,736 |
Syrup | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 476,873 | 59,274 | 877,630 | 253,344 |
Corn Oil | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | 1,706,942 | 868,578 | 4,131,184 | 2,726,614 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue from contracts with customers | $ 42,006 | $ 36,637 | $ 137,197 | $ 132,261 |
Derivative Instruments - Commod
Derivative Instruments - Commodity Contracts (Details) | Jun. 30, 2021USD ($)contractgalbu | Sep. 30, 2020USD ($)bucontractgal |
Commodity Contract | Commodity | ||
Derivative [Line Items] | ||
Fair Value | $ (582,410) | $ (42,005) |
Corn | Commodity | ||
Derivative [Line Items] | ||
Number of Contracts | contract | 0 | 30 |
Notional Amount (Qty) | bu | 0 | 1,260,000 |
Fair Value | $ 0 | $ (104,068) |
Corn | Corn options | ||
Derivative [Line Items] | ||
Number of Contracts | contract | 100 | 83 |
Notional Amount (Qty) | bu | 500,000 | 415,000 |
Fair Value | $ 75,625 | $ (62,063) |
Ethanol | Commodity | ||
Derivative [Line Items] | ||
Number of Contracts | contract | 35 | 0 |
Notional Amount (Qty) | gal | 1,470,000 | 0 |
Fair Value | $ 658,035 | |
Fair Value | $ 0 |
Derivative Instruments - Balanc
Derivative Instruments - Balance Sheet (Details) - Commodity Contract - Not Designated as Hedging Instrument - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 582,410 | $ 42,005 |
Derivative Liability, Fair Value, Gross Liability | 0 | 0 |
Fair Value | 582,410 | 42,005 |
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | $ 0 | $ 0 |
Derivative Instruments - Income
Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Corn | Cost of Goods Sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | $ 567,691 | $ (270,925) | $ 1,266,401 | $ (539,099) |
Ethanol | Revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | 493,764 | 233,372 | 1,288,915 | 258,836 |
Natural gas | Cost of Goods Sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | 0 | 0 | 1,410 | 0 |
Commodity Contract | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | $ 1,061,455 | $ (37,553) | $ 2,556,726 | $ (280,263) |
- Narrative (Details)
- Narrative (Details) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials, including corn, chemicals and supplies | $ 5,032,919 | $ 4,031,086 |
Work in process | 1,072,680 | 765,673 |
Finished goods, including ethanol and distillers grains | 2,091,975 | 3,914,117 |
Spare parts | 1,551,744 | 1,426,996 |
Inventory | $ 9,749,318 | $ 10,137,872 |
Inventory - Total Loss on Lower
Inventory - Total Loss on Lower of Cost or Market Adjustment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | ||||
Loss on firm purchase commitments | $ 0 | $ 0 | $ 0 | $ 100,000 |
Lower of cost or market inventory adjustment | 0 | 0 | 263,777 | 241,294 |
Total loss on lower of cost or market adjustments | $ 0 | $ 0 | $ 263,777 | $ 341,294 |
Bank Financing - Narrative (Det
Bank Financing - Narrative (Details) - USD ($) | Apr. 16, 2020 | Jun. 30, 2021 | Feb. 01, 2021 | Jul. 13, 2020 | Jan. 22, 2020 |
Debt Instrument [Line Items] | |||||
Long-term Debt | $ 4,798,357 | ||||
Long-Term Debt, Maturity, Year One | 716,918 | ||||
Long-Term Debt, Maturity, Year Two | 745,002 | ||||
Long-Term Debt, Maturity, Year Three | 772,869 | ||||
Long-Term Debt, Maturity, Year Four | 800,130 | ||||
Long-Term Debt, Maturity, Year Five | $ 1,763,438 | ||||
construction loan, interest rate | 300.00% | ||||
PPP Loan, CARES Act | |||||
Debt Instrument [Line Items] | |||||
Proceeds from Lines of Credit | $ 873,400 | ||||
PPP loan, fixed interest rate (as a percent) | 1.00% | ||||
Revolving loan | Revolving loan | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 10,000,000 | ||||
Line of Credit Facility, Interest Rate at Period End | 3.00% | ||||
Bank of North Dakota Ethanol Recovery Progrm | (3.75%) | ||||
Bank of North Dakota Ethanol Recovery Program, Rate after Buy Down | 1.00% | ||||
Long term debt, revolving loan | $ 10,000,000 | ||||
Revolving loan | Construction Loans [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 7,000,000 | ||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 7,000,000 | ||||
Line of Credit Facility, Interest Rate at Period End | 3.00% | ||||
Revolving loan | Bank of North Dakota and Cornerstone Bank | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt | $ 5,410,000 | ||||
debt instrument, outstanding amount | $ 4,780,000 | ||||
Revolving loan | Carbon Capture and Storage | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 28 | ||||
Construction Loan, Available Balance | $ 28 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Assets - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commodities derivative instruments | $ 582,410 | $ 42,005 |
Assets | 582,410 | 42,005 |
Financial Instruments, Owned, Physical Commodities At Carrying Amount | 582,410 | 42,005 |
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Carrying Amount | 582,410 | 42,005 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commodities derivative instruments | 582,410 | 42,005 |
Assets | 582,410 | 42,005 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commodities derivative instruments | 0 | 0 |
Assets | 0 | 0 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commodities derivative instruments | 0 | 0 |
Assets | $ 0 | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 9 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | Oct. 01, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Right of use assets | $ 854,328 | $ 1,008,677 | ||
Discount rate (percentage) | 3.00% | |||
Weighted average remaining lease term | 2 years | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease terms | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease terms | 4 years | |||
Accounting Standards Update 2016-02 [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Right of use assets | $ 1,418,000 | |||
Transportation Equipment | ||||
Lessee, Lease, Description [Line Items] | ||||
Rent expense for operating leases | $ 506,900 | $ 570,000 |
Leases - Schedule of Capital Le
Leases - Schedule of Capital Leased Assets (Details) - USD ($) | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | |
Transportation Equipment | |||
Capital Leased Assets [Line Items] | |||
Rent expense for operating leases | $ 506,900 | $ 570,000 | |
Equipment | |||
Capital Leased Assets [Line Items] | |||
Equipment | 493,414 | $ 493,414 | |
Less accumulated amortization | (190,528) | (172,944) | |
Net equipment under capital lease | $ 302,886 | $ 320,470 |
- Schedule of Future Minimum Pa
- Schedule of Future Minimum Payments (Details) | Jun. 30, 2021USD ($) |
Operating Leases | |
2020 | $ 370,150 |
2021 | 350,220 |
2022 | 133,958 |
2023 | 0 |
Total minimum lease commitments | 854,328 |
Financing Leases | |
2020 | 4,534 |
2021 | 4,568 |
2022 | 4,602 |
2023 | 1,836 |
Thereafter | 0 |
Total minimum lease commitments | 15,540 |
Less amount representing interest | 0 |
Present value of minimum lease commitments included in notes payable on the balance sheet | 15,540 |
Thereafter | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ / shares in Units, shares in Millions, bu in Millions | Nov. 01, 2016USD ($)$ / sharesshares | Oct. 11, 2016 | Jun. 30, 2021USD ($)bugal | Sep. 30, 2020USD ($) |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Accrued payments | $ 448,758 | $ 650,833 | ||
Commitment to fund research (up to) | 950,000 | |||
Amount paid | 949,631 | |||
CO2 liquefaction facility [Member] | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
capital project, commitment | 11,845,000 | |||
capital project, balance paid to date | 5,922,500 | |||
Distillation Unit [Member] | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
capital project, commitment | 2,659,500 | |||
capital project, balance paid to date | $ 2,659,500 | |||
Capital Equipment Project, Project Size | gal | 25,000,000 | |||
DCS Computer System | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
capital project, commitment | $ 800,992 | |||
capital project, balance paid to date | 342,825 | |||
Distillation Building | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
capital project, commitment | 178,057 | |||
capital project, balance paid to date | 27,382 | |||
industrial alcohol project | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
capital project, balance paid to date | 4,300,000 | |||
Capital Project, Remaining Balance | 1,900,000 | |||
Carbon Capture and Storage | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
capital project, balance paid to date | 15,100,000 | |||
Capital Project, Remaining Balance | 14,000,000 | |||
Profit and Cost Sharing Agreement | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Percent Of Net Revenue Generated From Business Activities Conducted On Purchased Real Estate | 70.00% | |||
Stock Issued During Period, Shares, Purchase of Assets | shares | 2 | |||
Shares Issued, Price Per Share | $ / shares | $ 1.66 | |||
Length Of Contract | 10 years | 10 years | ||
Payments for (Proceeds from) Other Real Estate Partnerships | $ 10,000,000 | |||
Guarantor Obligations, Liquidation Proceeds, Percentage | 70.00% | |||
Proceeds from Sale of Real Estate | $ 28,315 | |||
Bushels of corn | Fixed price contract | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Notional amount, volume | bu | 0.7 | |||
Commitments | $ 3,500,000 | |||
Raw water | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Contract term | 10 years | |||
Minimum purchase, volume | gal | 160,000,000 | |||
Minimum estimated liability | $ 424,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |||||
Accounts receivable | $ 2,701,564 | $ 2,701,564 | $ 1,777,576 | ||
Accounts payable | 121,374 | 121,374 | 188,457 | ||
Accrued payments | 448,758 | 448,758 | $ 650,833 | ||
Revenues | 39,664,319 | $ 19,128,595 | 95,934,627 | $ 64,823,447 | |
Cost of goods sold | 533,438 | 260,158 | 1,605,195 | 1,551,865 | |
General and administrative | 109,447 | 30,286 | 169,910 | 105,444 | |
Other income | 0 | 119,825 | 0 | 239,650 | |
Inventory Purchases | $ 4,842,958 | $ 6,449,514 | $ 10,504,616 | $ 14,852,088 |
Member's Equity - Schedule of C
Member's Equity - Schedule of Changes in Member's Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | $ 65,728,586 | $ 62,846,546 | $ 60,580,852 | $ 56,086,357 | $ 59,322,351 | $ 60,574,264 | $ 60,580,852 | $ 60,574,264 |
Net income (loss) | 9,505,434 | 6,093,896 | 2,265,694 | 2,204,564 | (3,235,994) | (1,251,913) | 17,865,024 | (2,283,343) |
Ending balance | 75,234,020 | 65,728,586 | 62,846,546 | 58,290,921 | 56,086,357 | 59,322,351 | 75,234,020 | 58,290,921 |
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid | 3,211,856 | 0 | ||||||
Class A Member Units | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 |
Ending balance | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 | 39,044,595 |
Additional Paid in Capital | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | 75,541 | 75,541 | 75,541 | 75,541 | 75,541 | 75,541 | 75,541 | 75,541 |
Ending balance | 75,541 | 75,541 | 75,541 | 75,541 | 75,541 | 75,541 | 75,541 | 75,541 |
Accumulated Deficit/Retained Earnings | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | 26,767,990 | 23,885,950 | 21,620,256 | 17,125,761 | 20,361,755 | 21,613,668 | 21,620,256 | 21,613,668 |
Net income (loss) | 9,505,434 | 6,093,896 | 2,265,694 | 2,204,564 | (3,235,994) | (1,251,913) | ||
Ending balance | 36,273,424 | 26,767,990 | 23,885,950 | 19,330,325 | 17,125,761 | 20,361,755 | 36,273,424 | 19,330,325 |
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid | 3,211,856 | 0 | ||||||
Treasury Units | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Beginning balance | (159,540) | (159,540) | (159,540) | (159,540) | (159,540) | (159,540) | (159,540) | (159,540) |
Ending balance | $ (159,540) | $ (159,540) | $ (159,540) | $ (159,540) | $ (159,540) | $ (159,540) | $ (159,540) | $ (159,540) |