Red Trail Energy (REGX) 10-Q 14 Feb 23 2023 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	3 Months Ended
	Dec. 31, 2022	Feb. 13, 2023
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	Dec. 31, 2022
Entity File Number	000-52033
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
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 ($)	Dec. 31, 2022	Sep. 30, 2022
Current Assets
Cash and equivalents	$ 19,851,325	$ 6,366,990
Restricted cash - margin account	4,030,506	4,785,025
Accounts receivable, primarily related party	5,409,870	4,879,011
Derivative Asset	150,737	0
Inventory	15,544,211	12,544,033
Prepaid expenses	1,096,412	512,770
Total current assets	46,083,061	29,087,829
Property, Plant and Equipment
Land	1,333,681	1,333,681
Land improvements	17,662,538	17,662,538
Buildings	15,320,492	14,930,003
Plant and equipment	121,396,856	121,465,514
Construction in progress	1,662,059	1,191,290
Gross property, plant and equipment	157,375,626	156,583,026
Less accumulated depreciation	78,487,639	77,104,977
Net property, plant and equipment	78,887,987	79,478,049
Other Assets
Operating Lease, Right-of-Use Asset	301,133	405,631
Investment in RPMG	940,642	605,000
Patronage equity	5,399,515	5,399,515
Deposits	40,000	40,000
Total other assets	6,681,290	6,450,146
Total Assets	131,652,338	115,016,024
Current Liabilities
Accounts payable	14,898,730	6,885,442
Accrued expenses	1,679,356	1,531,123
Derivative Liability	353,500	1,162,273
Accrued loss on firm purchase commitments (see notes 3 and 7)	473,000	9,000
Other Liabilities, Current	280,790	10,636
Current maturities of notes payable	3,544,381	18,751,634
Current portion of operating lease liabilities	192,579	271,968
Total current liabilities	21,422,336	28,622,076
Long-Term Liabilities
Notes payable	22,415,098	419,150
Long-term operating lease liabilities	108,554	133,663
Total long-term liabilities	$ 22,523,652	$ 552,813
Common Unit, Outstanding	40,148,160	40,148,160
Common Unit, Issued	40,148,160	40,148,160
Stockholders' Equity Attributable to Parent	$ 87,706,350	$ 85,841,135
Total Liabilities and Members’ Equity	$ 131,652,338	$ 115,016,024

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
Revenues, primarily related party	$ 44,498,440	$ 60,827,197
Cost of Goods Sold
Cost of goods sold	40,645,203	42,817,783
Loss on firm purchase commitments	464,000	200,000
Total Cost of Goods Sold	41,109,203	43,017,783
Gross Profit	3,389,237	17,809,414
General and Administrative Expenses	1,240,310	1,097,179
Operating Income (Loss)	2,148,927	16,712,235
Other Income (Expense)
Interest income	13,073	16,620
Other income	(17,511)	2,654,228
Interest expense	(279,274)	(11,537)
Total other income (expense), net	(283,712)	2,659,311
Net Income (Loss)	$ 1,865,215	$ 19,371,546
Weighted Average Units Outstanding, Basic	40,148,160	40,148,160
Weighted Average Units Outstanding, Diluted	40,148,160	40,148,160
Net Income (Loss) Per Unit, Basic	$ 0.05	$ 0.48
Net Income (Loss) Per Unit, Diluted	$ 0.05	$ 0.48

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash Flows from Operating Activities
Net income	$ 1,865,215	$ 19,371,546
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,577,279	1,369,521
Gain (Loss) on Disposition of Other Assets	19,759	0
Change in fair value of derivative instruments	(959,510)	38,919
Loss on firm purchase commitments	464,000	200,000
Paycheck Protection Program Loan Forgiveness	0	(2,650,773)
Change in operating assets and liabilities:
Accounts receivable	(530,859)	(3,071,646)
Inventory	(3,464,178)	(8,909,234)
Prepaid expenses	(583,641)	(475,526)
Increase (Decrease) in Contract with Customer, Liability	270,154	84,718
Accounts payable	8,013,288	1,758,516
Accrued expenses	148,233	(172,572)
Accrued purchase commitment losses	464,000	200,000
Net cash provided by operating activities	7,283,740	7,743,469
Investment in RPMG	(335,642)	0
Proceeds from disposal of fixed assets	23,000	0
Cash Flows from Investing Activities
Capital expenditures	(1,029,977)	(6,731,717)
Net cash used in investing activities	(1,342,619)	(6,731,717)
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid	0	(1,343,608)
Proceeds from Notes Payable	6,789,836	0
Cash Flows from Financing Activities
Debt repayments	(1,141)	(178,490)
Net cash provided by (used in) financing activities	6,788,695	(1,522,098)
Net Change in Cash, Cash Equivalents and Restricted Cash	12,729,816	(510,346)
Cash, Cash Equivalents and Restricted Cash - Beginning of Period	11,152,015	5,215,244
Cash, Cash Equivalents and Restricted Cash - End of Period	23,881,831	4,704,898
Cash and equivalents	19,851,325	1,753,655
Restricted Cash and Cash Equivalents	4,030,506	2,951,243
Cash, cash equivalents and restricted cash	23,881,831	4,704,898
Supplemental Disclosure of Cash Flow Information
Interest paid	279,274	11,537
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	0	173,914
Noncash Investing and Financing Activities
Capital expenditures in accounts payable	$ 0	$ 315,410

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Dec. 31, 2022
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
Nature of Operations	Nature of Business

Revenue

Revenue	3 Months Ended
	Dec. 31, 2022
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 when 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 months ended December 31, 2022 and 2021. Revenues For the three months ended December 31, 2022 (unaudited) For the three months ended December 31, 2021 (unaudited) Ethanol, E85 and Industrial Alcohol $ 31,751,619 $ 49,251,582 Distillers Grains 9,536,527 8,654,420 Syrup 150,122 349,641 Corn Oil 3,009,481 2,508,851 Other 50,691 62,703 Total revenue from contracts with customers $ 44,498,440 $ 60,827,197 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. Customer Deposits Customer deposits are contract liabilities for payments in excess of revenue recognized. Customer deposits are recognized when modified distillers grains customers make prepayments on their contracts. The ending balances for accounts receivable and customer deposits were as follows for the three months ended December 31, 2022 and 2021. For the period ended December 31, 2022 (unaudited) For the period ended December 31, 2021 (unaudited) Accounts receivable $ 5,409,870 $ 4,540,167 Customer deposits 280,790 95,726

Derivative Instruments

Derivative Instruments	3 Months Ended
	Dec. 31, 2022
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: December 31, 2022 (unaudited) September 30, 2022 Contract Type # of Contracts Notional Amount (Qty) Fair Value # of Contracts Notional Amount (Qty) Fair Value Corn futures 155 775,000 bushels $ 150,737 — — bushels $ — Corn options 540 2,700,000 bushels $ (353,500) 1,080 5,400,000 bushels $ (1,144,000) Soybean oil options — — gal $ — 48 28,800 gal $ (18,273) Total fair value $ (202,763) $ (1,162,273) Amounts are combined on the balance sheet - negative numbers represent liabilities The following tables provide details regarding the Company's derivative financial instruments at December 31, 2022 and September 30, 2022: Derivatives not designated as hedging instruments: Balance Sheet - as of December 31, 2022 (unaudited) Asset Liability Commodity derivative instruments, at fair value $ — $ 202,763 Total derivatives not designated as hedging instruments for accounting purposes $ — $ 202,763 Balance Sheet - as of September 30, 2022 Asset Liability Commodity derivative instruments, at fair value $ — $ 1,162,273 Total derivatives not designated as hedging instruments for accounting purposes $ — $ 1,162,273 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 December 31, 2022 (unaudited) Amount of gain (loss) recognized in income during the three months ended December 31, 2021 (unaudited) Corn derivative instruments Cost of Goods Sold $ 1,183,562 $ 350,518 Ethanol derivative instruments Revenue 21,429 165,303 Natural gas derivative instruments Cost of Goods Sold — (310,220) Total $ 1,204,991 $ 205,601

Inventory

Inventory	3 Months Ended
	Dec. 31, 2022
Inventory Disclosure [Abstract]
Inventory	INVENTORY Inventory is valued at the lower of cost or net realizable value. Inventory values as of December 31, 2022 and September 30, 2022 were as follows: December 31, 2022 September 30, 2022 Raw materials, including corn, chemicals and supplies $ 5,799,390 $ 6,887,201 Work in process 1,671,255 1,340,059 Finished goods, including ethanol and distillers grains 6,478,612 2,702,129 Spare parts 1,594,954 1,614,644 Total inventory $ 15,544,211 $ 12,544,033 Lower of cost or net realizable value adjustments for the three months ended December 31, 2022 and 2021 were as follows: For the three months ended December 31, 2022 (unaudited) For the three months ended December 31, 2021 (unaudited) Loss on firm purchase commitments $ 464,000 $ 200,000 Total loss on lower of cost or net realizable value adjustments $ 464,000 $ 200,000 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 December 31, 2022, the average

Bank Financing

Bank Financing	3 Months Ended
	Dec. 31, 2022
Debt Disclosure [Abstract]
Bank Financing	BANK FINANCING Ethanol Recovery Program 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. On December 3, 2021 we received forgiveness of $2.65 million of the loan. The forgiveness was recorded as other income. The outstanding balance as of December 31, 2022 was $0.95 million. The maturity date of the loan is July 13, 2025. The fixed interest rate on December 31, 2022 was 3.75% with an interest rate buy down through the Bank of North Dakota to 1%. Revolving Loan On February 3, 2022 we renewed our $10 million revolving loan (the "Revolving Loan") with Cornerstone. On February 3, 2022 the maturity date was extended to March 31, 2022. On April 8, 2022 the Revolving Loan was renewed. The new maturity date is April 7, 2023. At December 31, 2022, we had $10 million available under the Revolving Loan. The variable interest rate on December 31, 2022 was 6.750%. Construction Loans On January 22, 2020, we entered into a $7 million construction loan (the "First 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. On April 8, 2022 the Construction Loan was renewed and the maturity date was extended to October 8, 2022. On October 28, 2022, the First Construction Loan was consolidated and replaced with the Consolidated Loan (below). On February 1, 2021 we entered into a $28 million construction loan (the "Second Construction Loan") with Cornerstone for the carbon capture and storage project. The maturity date of the Second Construction Loan was January 31, 2022. On February 17, 2022 the maturity date was extended to March 15, 2022. On April 8, 2022 we renewed the CCS Construction Loan and the maturity date was extended to October 8, 2022. On October 28, 2022, the Second Construction loan was consolidated and replaced with the Consolidated Loan (below). On October 28, 2022, we entered into a $25 million loan to replace the First Construction Loan and Second Construction Loan (the "Consolidated Loan"). The maturity date of the Consolidated Loan is January 31, 2032. The fixed interest rate is 4.65% Each of 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 December 31 Totals 2023 $ 3,539,796 2024 2,228,214 2025 2,128,215 2026 2,229,313 2027 15,825,215 Total $ 25,950,753

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Dec. 31, 2022
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 December 31, 2022 and September 30, 2022, respectively. Fair Value Measurement Using Carrying Amount as of December 31, 2022 (unaudited) Fair Value as of December 31, 2022 (unaudited) Level 1 Level 2 Level 3 Liabilities Commodities derivative instruments $ 202,763 $ 202,763 $ 202,763 $ — $ — Total $ 202,763 $ 202,763 $ 202,763 $ — $ — Fair Value Measurement Using Carrying Amount as of September 30, 2022 Fair Value as of September 30, 2022 Level 1 Level 2 Level 3 Liabilities Commodities derivative instruments $ 1,162,273 $ 1,162,273 $ 1,162,273 $ — $ — Total $ 1,162,273 $ 1,162,273 $ 1,162,273 $ — $ —

Leases

Leases	3 Months Ended
	Dec. 31, 2022
Leases [Abstract]
leases disclosure text block	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 three months ended December 31, 2022, the Company's estimated discount rate was 6.75%. 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 five years, which may include options to extend the leases when it is reasonably certain the Company will exercise those options. At December 31, 2022 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 $300,000 and $227,000 for the three months ended December 31, 2022 and 2021, respectively. Equipment under financing leases consists of office equipment and plant equipment. At December 31, 2022 and September 30, 2022, equipment under financing leases was as follows: December 31, 2022 September 30, 2022 Equipment $ 493,414 $ 493,414 Less accumulated amortization (225,694) (219,833) Net equipment under financing lease $ 267,720 $ 273,581 At December 31, 2022, 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 December 31: Operating Leases Financing Leases 2023 $ 192,579 $ 4,585 2024 41,741 4,141 2025 35,988 — 2026 30,825 — 2027 — — Total minimum lease commitments $ 301,133 8,726 Less amount representing interest — Present value of minimum lease commitments included in notes payable on the balance sheet $ 8,726

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Dec. 31, 2022
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 December 31, 2022, the Company had various fixed price contracts for the purchase of approximately 5.4 million bushels of corn. Using the stated contract price for the fixed price contracts, the Company had commitments of approximately $37.3 million related to the 5.4 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 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 $779,895 as of December 31, 2022 which is recorded as construction in progress.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Dec. 31, 2022
Related Party Transactions [Abstract]
Related Party Transactions	RELATED PARTY TRANSACTIONS The 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: December 31, 2022 September 30, 2022 Balance Sheet Accounts receivable $ 3,940,104 $ 4,086,689 Accounts payable 2,174,233 60,412 Accrued expenses — 7,645 For the three months ended December 31, 2022 (unaudited) For the three months ended December 31, 2021 (unaudited) Statement of Operations Revenues $ 40,400,856 $ 56,480,653 Cost of goods sold 1,011,858 1,008,328 Inventory Purchases $ 4,656,486 $ 9,451,613

Uncertainties Impacting the Eth

Uncertainties Impacting the Ethanol Industry and Our Future Operations	3 Months Ended
	Dec. 31, 2022
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, and government programs, global political or economic issues, including but not limited to the war in Ukraine and sanctions associated therewith, or global damaging growing conditions, such as plant disease or adverse weather, including drought, increased fertilizer costs as well as global conflicts. 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, 2020, 2021, and 2022 RFS final rules. The final RFS for 2022 was significantly larger than 2021, with a final volume requirement of 20.63 billion gallons and a supplemental standard of .25 billion gallons. On January 30, 2020, the World Health Organization declared the coronavirus outbreak (COVID-19) a “Public Health Emergency of International Concern” and on March 11, 2020, declared COVID-19 a pandemic. Quarantines, labor shortages, and other disruptions to the Company’s operations, and those of its customers, adversely impacted the Company’s revenues, ability to provide its services and operating results. Any future quarantines, labor shortages, or other disruptions to the Company's operations, or those of its customers may adversely impact the Company's revenues, ability to provide its services and operating results. Like the COVID-19 pandemic, any significant outbreak of epidemic, pandemic or contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, including the geographical area in which the Company operates, resulting in an economic downturn that could affect demand for its goods and services. The extent to which COVID-19 will impact the Company’s long-term results will depend on future developments, which are highly uncertain and cannot be predicted, including new developments regarding continued distribution of the COVID-19 vaccines, new information which may emerge concerning the severity of the coronavirus, prevalence of new COVID-19 cases and actions taken to contain the coronavirus or its impact, among others.

Member's Equity

Member's Equity	3 Months Ended
	Dec. 31, 2022
Equity [Abstract]
Member's Equity	MEMBER'S EQUITY Changes in member's equity for the three months ended December 31, 2022 and 2021. Class A Member Units Additional Paid in Capital Accumulated Deficit/Retained Earnings Treasury Units Total Member Equity Balances - September 30, 2021 $ 39,044,595 $ 75,541 $ 31,034,079 $ (159,540) $ 69,994,675 Net income — — 19,371,546 — 19,371,546 Balances December 31, 2021 $ 39,044,595 $ 75,541 $ 50,405,625 $ (159,540) $ 89,366,221 Class A Member Units Additional Paid in Capital Accumulated Deficit/Retained Earnings Treasury Units Total Member Equity Balances - September 30, 2022 $ 39,044,595 $ 75,541 $ 46,880,539 $ (159,540) $ 85,841,135 Net income — — 1,865,215 — 1,865,215 Balances - December 31, 2022 $ 39,044,595 $ 75,541 $ 48,745,754 $ (159,540) $ 87,706,350

Subsequent Event

Subsequent Event	3 Months Ended
	Dec. 31, 2022
Subsequent Events [Abstract]
Subsequent Event	SUBSEQUENT EVENTSOn February 8, 2023 the board of directors declared a cash distribution of $0.15 per membership unit to the holders of units of record at the close of business on January 31, 2023, for a total distribution of $6,022,224.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Dec. 31, 2022
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

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	The following table disaggregates revenue by major source for the three months ended December 31, 2022 and 2021. Revenues For the three months ended December 31, 2022 (unaudited) For the three months ended December 31, 2021 (unaudited) Ethanol, E85 and Industrial Alcohol $ 31,751,619 $ 49,251,582 Distillers Grains 9,536,527 8,654,420 Syrup 150,122 349,641 Corn Oil 3,009,481 2,508,851 Other 50,691 62,703 Total revenue from contracts with customers $ 44,498,440 $ 60,827,197
Deposit Liabilities, Type	The ending balances for accounts receivable and customer deposits were as follows for the three months ended December 31, 2022 and 2021. For the period ended December 31, 2022 (unaudited) For the period ended December 31, 2021 (unaudited) Accounts receivable $ 5,409,870 $ 4,540,167 Customer deposits 280,790 95,726

Derivative Instruments (Tables)

Derivative Instruments (Tables)	3 Months Ended
	Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments Commodity Contracts	As of: December 31, 2022 (unaudited) September 30, 2022 Contract Type # of Contracts Notional Amount (Qty) Fair Value # of Contracts Notional Amount (Qty) Fair Value Corn futures 155 775,000 bushels $ 150,737 — — bushels $ — Corn options 540 2,700,000 bushels $ (353,500) 1,080 5,400,000 bushels $ (1,144,000) Soybean oil options — — gal $ — 48 28,800 gal $ (18,273) Total fair value $ (202,763) $ (1,162,273) 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 December 31, 2022 and September 30, 2022: Derivatives not designated as hedging instruments: Balance Sheet - as of December 31, 2022 (unaudited) Asset Liability Commodity derivative instruments, at fair value $ — $ 202,763 Total derivatives not designated as hedging instruments for accounting purposes $ — $ 202,763 Balance Sheet - as of September 30, 2022 Asset Liability Commodity derivative instruments, at fair value $ — $ 1,162,273 Total derivatives not designated as hedging instruments for accounting purposes $ — $ 1,162,273
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 December 31, 2022 (unaudited) Amount of gain (loss) recognized in income during the three months ended December 31, 2021 (unaudited) Corn derivative instruments Cost of Goods Sold $ 1,183,562 $ 350,518 Ethanol derivative instruments Revenue 21,429 165,303 Natural gas derivative instruments Cost of Goods Sold — (310,220) Total $ 1,204,991 $ 205,601

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Dec. 31, 2022
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventory is valued at the lower of cost or net realizable value. Inventory values as of December 31, 2022 and September 30, 2022 were as follows: December 31, 2022 September 30, 2022 Raw materials, including corn, chemicals and supplies $ 5,799,390 $ 6,887,201 Work in process 1,671,255 1,340,059 Finished goods, including ethanol and distillers grains 6,478,612 2,702,129 Spare parts 1,594,954 1,614,644 Total inventory $ 15,544,211 $ 12,544,033
Long-term Purchase Commitment	Lower of cost or net realizable value adjustments for the three months ended December 31, 2022 and 2021 were as follows: For the three months ended December 31, 2022 (unaudited) For the three months ended December 31, 2021 (unaudited) Loss on firm purchase commitments $ 464,000 $ 200,000 Total loss on lower of cost or net realizable value adjustments $ 464,000 $ 200,000

Debt (Tables)

Debt (Tables)	3 Months Ended
	Dec. 31, 2022
Debt Disclosure [Abstract]
Schedule of Maturities of Long-term Debt	ach of 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 December 31 Totals 2023 $ 3,539,796 2024 2,228,214 2025 2,128,215 2026 2,229,313 2027 15,825,215 Total $ 25,950,753

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Dec. 31, 2022
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 December 31, 2022 and September 30, 2022, respectively. Fair Value Measurement Using Carrying Amount as of December 31, 2022 (unaudited) Fair Value as of December 31, 2022 (unaudited) Level 1 Level 2 Level 3 Liabilities Commodities derivative instruments $ 202,763 $ 202,763 $ 202,763 $ — $ — Total $ 202,763 $ 202,763 $ 202,763 $ — $ — Fair Value Measurement Using Carrying Amount as of September 30, 2022 Fair Value as of September 30, 2022 Level 1 Level 2 Level 3 Liabilities Commodities derivative instruments $ 1,162,273 $ 1,162,273 $ 1,162,273 $ — $ — Total $ 1,162,273 $ 1,162,273 $ 1,162,273 $ — $ —

Leases, Codification Topic 840

Leases, Codification Topic 840 (Tables)	3 Months Ended
	Dec. 31, 2022
Leases [Abstract]
Schedule of Capital Leased Assets	Equipment under financing leases consists of office equipment and plant equipment. At December 31, 2022 and September 30, 2022, equipment under financing leases was as follows: December 31, 2022 September 30, 2022 Equipment $ 493,414 $ 493,414 Less accumulated amortization (225,694) (219,833) Net equipment under financing lease $ 267,720 $ 273,581
Schedule of Future Minimum Payments for Capital Leases	At December 31, 2022, 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 December 31: Operating Leases Financing Leases 2023 $ 192,579 $ 4,585 2024 41,741 4,141 2025 35,988 — 2026 30,825 — 2027 — — Total minimum lease commitments $ 301,133 8,726 Less amount representing interest — Present value of minimum lease commitments included in notes payable on the balance sheet $ 8,726

Related Party Transactions (Tab

Related Party Transactions (Tables)	3 Months Ended
	Dec. 31, 2022
Related Party Transactions [Abstract]
Schedule of Related Party Transactions	Significant related party activity affecting the financial statements is as follows: December 31, 2022 September 30, 2022 Balance Sheet Accounts receivable $ 3,940,104 $ 4,086,689 Accounts payable 2,174,233 60,412 Accrued expenses — 7,645 For the three months ended December 31, 2022 (unaudited) For the three months ended December 31, 2021 (unaudited) Statement of Operations Revenues $ 40,400,856 $ 56,480,653 Cost of goods sold 1,011,858 1,008,328 Inventory Purchases $ 4,656,486 $ 9,451,613

Member's Equity (Tables)

Member's Equity (Tables)	3 Months Ended
	Dec. 31, 2022
Equity [Abstract]
Schedule of Changes in Member's Equity	Changes in member's equity for the three months ended December 31, 2022 and 2021. Class A Member Units Additional Paid in Capital Accumulated Deficit/Retained Earnings Treasury Units Total Member Equity Balances - September 30, 2021 $ 39,044,595 $ 75,541 $ 31,034,079 $ (159,540) $ 69,994,675 Net income — — 19,371,546 — 19,371,546 Balances December 31, 2021 $ 39,044,595 $ 75,541 $ 50,405,625 $ (159,540) $ 89,366,221 Class A Member Units Additional Paid in Capital Accumulated Deficit/Retained Earnings Treasury Units Total Member Equity Balances - September 30, 2022 $ 39,044,595 $ 75,541 $ 46,880,539 $ (159,540) $ 85,841,135 Net income — — 1,865,215 — 1,865,215 Balances - December 31, 2022 $ 39,044,595 $ 75,541 $ 48,745,754 $ (159,540) $ 87,706,350

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Nature of Business (Details) gal in Millions	3 Months Ended
	Dec. 31, 2022 USD ($) gal	Dec. 31, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Product Information [Line Items]
Net cash provided by operating activities	$ 7,283,740	$ 7,743,469
Cash, cash equivalents and restricted cash	23,881,831	4,704,898	$ 11,152,015	$ 5,215,244
Loss on firm purchase commitments	$ 464,000	$ 200,000
Ethanol
Product Information [Line Items]
Annual production capacity | gal	50

Revenue (Details)

Revenue (Details) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 44,498,440	$ 60,827,197
Accounts receivable, primarily related party	5,409,870	4,540,167	$ 4,879,011
Other Liabilities, Current	280,790	95,726	$ 10,636
Ethanol, E85 and Industrial Alcohol
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	31,751,619	49,251,582
Distillers Grains
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	9,536,527	8,654,420
Syrup
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	150,122	349,641
Corn Oil
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	3,009,481	2,508,851
Other
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 50,691	$ 62,703

Derivative Instruments - Commod

Derivative Instruments - Commodity Contracts (Details)	Dec. 31, 2022 USD ($) contract bu gal	Sep. 30, 2022 USD ($) contract gal bu
Commodity Contract | Commodity
Derivative [Line Items]
Liabilities	$ (202,763)	$ 1,162,273
Corn | Commodity
Derivative [Line Items]
Number of Contracts | contract	155	0
Notional Amount (Qty) | bu	775,000	0
Liabilities	$ 150,737	$ 0
Corn | Corn options
Derivative [Line Items]
Number of Contracts | contract	540	1,080
Notional Amount (Qty) | bu	2,700,000	5,400,000
Liabilities	$ (353,500)	$ (1,144,000)
Soybean Oil | Corn options
Derivative [Line Items]
Number of Contracts | contract	0	48
Notional Amount (Qty) | gal	0	28,800
Liabilities	$ 0	$ (18,273)

Derivative Instruments - Balanc

Derivative Instruments - Balance Sheet (Details) - Commodity Contract - Not Designated as Hedging Instrument - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 0	$ 0
Derivative Liability, Fair Value, Gross Liability	202,763	1,162,273
Fair Value	0	0
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	$ 202,763	$ 1,162,273

Derivative Instruments - Income

Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Corn | Cost of Goods Sold
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ 1,183,562	$ 350,518
Ethanol | Revenue
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	21,429	165,303
Natural gas | Cost of Goods Sold
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	0	(310,220)
Commodity Contract
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ 1,204,991	$ 205,601

- Narrative (Details)

- Narrative (Details) - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Inventory Disclosure [Abstract]
Raw materials, including corn, chemicals and supplies	$ 5,799,390	$ 6,887,201
Work in process	1,671,255	1,340,059
Finished goods, including ethanol and distillers grains	6,478,612	2,702,129
Spare parts	1,594,954	1,614,644
Inventory	$ 15,544,211	$ 12,544,033

Inventory - Total Loss on Lower

Inventory - Total Loss on Lower of Cost or Market Adjustment (Details) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Loss on firm purchase commitments	$ 464,000	$ 200,000
Total loss on lower of cost or market adjustments	$ 464,000	$ 200,000

Bank Financing - Narrative (Det

Bank Financing - Narrative (Details) - USD ($)		3 Months Ended
	Dec. 03, 2021	Dec. 31, 2022	Feb. 01, 2021	Jul. 13, 2020	Jan. 22, 2020
Debt Instrument [Line Items]
Long-term Debt		$ 25,950,753
Long-Term Debt, Maturity, Year One		3,539,796
Long-Term Debt, Maturity, Year Two		2,228,214
Long-Term Debt, Maturity, Year Three		2,128,215
Long-Term Debt, Maturity, Year Four		2,229,313
Long-Term Debt, Maturity, Year Five		15,825,215
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		6.75%
Bank of North Dakota Ethanol Recovery Progrm		(3.75%)
Bank of North Dakota Ethanol Recovery Program, Rate after Buy Down		1%
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
Revolving loan | Bank of North Dakota and Cornerstone Bank
Debt Instrument [Line Items]
Long-term Debt				$ 5,410,000
debt instrument, outstanding amount		$ 950,000
Gain (Loss) on Extinguishment of Debt	$ 2.65
Revolving loan | Carbon Capture and Storage
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 25,000,000	$ 28
Revolving loan | consolidated loan
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End		4.65%
Bank of North Dakota and Cornerstone Bank | Revolving loan
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 15
Line of Credit Facility, Interest Rate at Period End		100%

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Assets - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments	$ 202,763	$ 1,162,273
Liabilities	202,763	1,162,273
Financial Instruments, Owned, Physical Commodities At Carrying Amount	202,763	1,162,273
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Carrying Amount	202,763	1,162,273
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments	202,763	1,162,273
Liabilities	202,763	1,162,273
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments	0	0
Liabilities	0	0
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments	0	0
Liabilities	$ 0	$ 0

Leases, Codification Topic 84_2

Leases, Codification Topic 840 (Details) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2022
Capital Leased Assets [Line Items]
Discount rate (percentage)	6.75%
Operating Leased Assets [Line Items]
Current Year	$ 192,579
Year One	41,741
Year Two	35,988
Year Three	30,825
Year Four	0
Total minimum lease commitments	301,133
Current Year	4,585
Year One	4,141
Year Two	0
Year Three	0
Year Four	0
Finance Lease, Liability, Undiscounted Excess Amount	0
Total minimum lease commitments	8,726
Finance Lease, Liability	$ 8,726
Weighted average remaining lease term	2 years
Minimum
Operating Leased Assets [Line Items]
Lease terms	1 year
Maximum
Operating Leased Assets [Line Items]
Lease terms	5 years
Equipment [Member]
Capital Leased Assets [Line Items]
Finance Lease, Right-of-Use Asset, before Accumulated Amortization	$ 493,414		$ 493,414
Finance Lease, Right-of-Use Asset, Accumulated Amortization	225,694		219,833
Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total	267,720		$ 273,581
Transportation Equipment
Capital Leased Assets [Line Items]
Rent expense for operating leases	$ 300,000	$ 227,000

Commitments and Contingencies (

Commitments and Contingencies (Details) $ / shares in Units, shares in Millions, gal in Millions, bu in Millions			3 Months Ended
	Nov. 01, 2016 USD ($) $ / shares shares	Oct. 11, 2016	Dec. 31, 2022 USD ($) bu gal	Sep. 30, 2022 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Accrued payments			$ 0	$ 7,645
DCS Computer System
Derivative Instruments and Hedging Activities Disclosures [Line Items]
capital project, commitment			800,992
capital project, balance paid to date			779,895
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%
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%
Proceeds from Sale of Real Estate			$ 1,047,581
Bushels of corn | Fixed price contract
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount, volume | bu			5.4
Commitments			$ 37,300,000
Raw water
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contract term			10 years
Minimum purchase, volume | gal			160
Minimum estimated liability			$ 424,000

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2022
Related Party Transactions [Abstract]
Accounts receivable	$ 3,940,104		$ 4,086,689
Accounts payable	2,174,233		60,412
Accrued payments	0		$ 7,645
Revenues	40,400,856	$ 56,480,653
Cost of goods sold	1,011,858	1,008,328
Inventory Purchases	$ 4,656,486	$ 9,451,613

Member's Equity - Schedule of C

Member's Equity - Schedule of Changes in Member's Equity (Details) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 85,841,135	$ 69,994,675
Net income	1,865,215	19,371,546
Ending balance	87,706,350	89,366,221
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid	0	(1,343,608)
Class A Member Units
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	39,044,595	39,044,595
Ending balance	39,044,595	39,044,595
Additional Paid in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	75,541	75,541
Ending balance	75,541	75,541
Accumulated Deficit/Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	46,880,539	31,034,079
Net income	1,865,215	19,371,546
Ending balance	48,745,754	50,405,625
Treasury Units
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(159,540)	(159,540)
Ending balance	$ (159,540)	$ (159,540)

Subsequent Event (Details)

Subsequent Event (Details) - Subsequent Event	Feb. 08, 2023 USD ($) $ / shares
Subsequent Event [Line Items]
Dividends Payable | $	$ 6,022,224
Dividends Payable, Amount Per Share | $ / shares	$ 0.15