10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
	For the quarterly period ended March 31, 2017.
	OR
o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
For the transition period from               to               .
COMMISSION FILE NUMBER 000-53036

CARDINAL ETHANOL, LLC

(Exact name of registrant as specified in its charter)

Indiana	20-2327916
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1554 N. County Road 600 E., Union City, IN 47390
(Address of principal executive offices)
(765) 964-3137
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes     o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes     o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer o	Accelerated Filer  o
Non-Accelerated Filer x	Smaller Reporting Company o
	Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes     x No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 

As of May 8, 2017, there were 14,606 membership units outstanding.

1

INDEX

	Page Number
PART I. FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures about Market Risk	25
Item 4. Controls and Procedures	27
PART II. OTHER INFORMATION	27
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3. Defaults Upon Senior Securities	28
Item 4. Mine Safety Disclosures	28
Item 5. Other Information	28
Item 6. Exhibits	28
SIGNATURES	29

2

PART I        FINANCIAL INFORMATION

Item 1. Financial Statements

CARDINAL ETHANOL, LLC

Condensed Balance Sheets

ASSETS	March 31, 2017		September 30, 2016
	(Unaudited)
Current Assets
Cash	$	13,101,228	$	23,002,139
Restricted cash	831,313		1,460,772
Trade accounts receivable	11,872,592		11,574,847
Miscellaneous receivables	141,260		135,517
Inventories	20,115,081		12,093,469
Prepaid and other current assets	417,720		248,999
Commodity derivative instruments	396,786		14,100
Total current assets	46,875,980		48,529,843
Property, plant, and equipment, net	105,422,964		104,461,078
Other Assets
Investment	1,096,237		938,251
Total other assets	1,096,237		938,251
Total Assets	$	153,395,181	$	153,929,172

LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable	$	3,605,002	$	2,472,212
Accounts payable-corn	5,364,998		4,761,547
Accrued expenses	1,684,505		1,213,753
Commodity derivative instruments	514,049		341,050
Current maturities of long-term debt	2,915,171		2,888,290
Total current liabilities	14,083,725		11,676,852
Long-Term Debt, net of current maturities	10,476,663		11,932,063
Commitments and Contingencies
Members’ Equity
Members' contributions, net of cost of raising capital, 14,606 units authorized, issued and outstanding	70,912,213		70,912,213
Retained earnings	57,922,580		59,408,044
Total members' equity	128,834,793		130,320,257
Total Liabilities and Members’ Equity	$	153,395,181	$	153,929,172

Notes to Condensed Unaudited Financial Statements are an integral part of this Statement.

3

CARDINAL ETHANOL, LLC

Condensed Statements of Operations (Unaudited)

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	March 31, 2017			March 31, 2016			March 31, 2017			March 31, 2016
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	59,473,502		$	51,589,923		$	117,528,266		$	109,134,959
Cost of Goods Sold	55,018,000			48,600,758			104,468,176			102,994,832
Gross Profit	4,455,502			2,989,165			13,060,090			6,140,127
Operating Expenses	1,434,866			1,486,206			2,621,623			2,855,811
Operating Income	3,020,636			1,502,959			10,438,467			3,284,316
Other Expense
Interest income	—			250			—			250
Interest expense	(134,427		)	(84,475		)	(270,467		)	(143,567		)
Miscellaneous income	15,089			3,440			31,335			25,309
Total	(119,338		)	(80,785		)	(239,132		)	(118,008		)
Net Income	$	2,901,298		$	1,422,174		$	10,199,335		$	3,166,308
Weight Average Units Outstanding - basic and diluted	14,606			14,606			14,606			14,606
Net Income Per Unit - basic and diluted	$	199		$	97		$	698		$	217
Distributions Per Unit	$	200		$	300		$	800		$	800

Notes to Condensed Unaudited Financial Statements are an integral part of this Statement.

4

CARDINAL ETHANOL, LLC

Condensed Statements of Cash Flows (Unaudited)

	Six Months Ended			Six Months Ended
	March 31, 2017			March 31, 2016
Cash Flows from Operating Activities
Net income	$	10,199,335		$	3,166,308
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	5,142,156			4,566,053
Change in fair value of commodity derivative instruments	(2,034,778		)	(2,965,860		)
Non-cash dividend income	(157,986		)	(114,757		)
Change in operating assets and liabilities:
Restricted cash	629,459			1,211,476
Trade accounts receivables	(297,745		)	(17,220		)
Miscellaneous receivable	(5,743		)	218,276
Inventories	(8,021,612		)	(6,400,048		)
Prepaid and other current assets	(168,721		)	103,590
Commodity derivative instruments	1,825,091			1,594,408
Accounts payable	1,132,791			(487,270		)
Accounts payable-corn	603,451			536,663
Accrued expenses	(733,262		)	(537,023		)
Net cash provided by operating activities	8,112,436			874,596
Cash Flows from Investing Activities
Capital expenditures	(1,155,175		)	(4,736,918		)
Payments for construction in progress	(3,744,854		)	—
Net cash used for investing activities	(4,900,029		)	(4,736,918		)
Cash Flows from Financing Activities
Distributions paid	(11,684,799		)	(11,684,801		)
Proceeds from long-term debt	—			6,516,964
Payments on long-term debt	(1,428,519		)	—
Net cash used for financing activities	(13,113,318		)	(5,167,837		)
Net Decrease in Cash	(9,900,911		)	(9,030,159		)
Cash – Beginning of Period	23,002,139			20,827,614
Cash – End of Period	$	13,101,228		$	11,797,455

Notes to Condensed Unaudited Financial Statements are an integral part of this Statement.

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CARDINAL ETHANOL, LLC

Condensed Statements of Cash Flows (Unaudited)

	Six Months Ended		Six Months Ended
	March 31, 2017		March 31, 2016
Supplemental Cash Flow Information
Interest paid	$	267,796	$	115,067
Supplemental Disclosure of Noncash Investing and Financing Activities
Construction in process included in accrued expenses and accounts payable	$	1,270,578	$	795,642

Notes to Condensed Unaudited Financial Statements are an integral part of this Statement.

6

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

March 31, 2017

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the year ended September 30, 2016, contained in the Company's annual report on Form 10-K.

In the opinion of management, the interim condensed financial statements reflect all adjustments considered necessary for fair presentation.

Nature of Business

Cardinal Ethanol, LLC, (the “Company”) is an Indiana limited liability company currently producing fuel-grade ethanol, distillers grains, corn oil and carbon dioxide near Union City, Indiana and sells these products throughout the continental United States. The Company's plant has an approximate annual production capacity exceeding 120 million gallons.

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. The Company uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, allowance for doubtful accounts, the valuation of basis and delay price contracts on corn purchases, derivatives, inventory, patronage dividends, long-lived assets and inventory purchase commitments. Actual results may differ from previously estimated amounts, and such differences may be material to the financial statements. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made.

Restricted Cash

As a part of its commodities hedging activities, the Company is required to maintain cash balances with our commodities trading companies for initial and maintenance margins on a per futures contract basis. Changes in the market value of contracts may increase these requirements. As the futures contracts expire, the margin requirements also expire. Accordingly, we record the cash maintained with the traders in the margin accounts as restricted cash. Since this cash is immediately available to us upon request when there is a margin excess, we consider this restricted cash to be a current asset.

Trade Accounts Receivable

Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of

its customers' financial condition and, generally, requires no collateral. Accounts receivable are recorded at their estimated net

realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's

credit terms. Amounts considered uncollectible are written off. The Company's estimate of the allowance for doubtful accounts

is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any.

Inventories

Inventories consist of raw materials, work in process, finished goods and parts. Corn is the primary raw material. Finished goods consist of ethanol, dried distiller grains and corn oil. Inventories are stated at the lower of weighted average cost or net realizable value. Net realizable value is the estimated selling prices in the normal course of business, less reasonably predictable costs.

Property, Plant and Equipment

Property, plant, and equipment are stated at cost. Depreciation is provided over estimated useful lives by use of the straight line depreciation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized.

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CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

March 31, 2017

Construction in progress expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service.

Long-Lived Assets

The Company reviews its long-lived assets, such as property, plant and equipment and financing costs, subject to depreciation and amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Investments

Investments consist of the capital stock and patron equities of the Company's distillers grains marketer. The investments are stated at the lower of cost or fair value and adjusted for non cash patronage equities received. Patronage dividends are recognized when received and included within revenue in the condensed statements of operations.

Revenue Recognition

The Company generally sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. The Company believes that there are no ethanol sales, during any given month, which should be considered contingent and recorded as deferred revenue. The Company's products are sold Free on Board (FOB) shipping point.

In accordance with the Company's agreements for the marketing and sale of ethanol and related products, marketing fees, commissions and freight due to the marketers are deducted from the gross sales price at the time incurred. Revenue is recorded net of these commissions and freight as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products.

Net Income per Unit

Basic net income per unit is computed by dividing net income by the weighted average number of members' units outstanding during the period. Diluted net income per unit is computed by dividing net income by the weighted average number of members' units and members' unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company's basic and diluted net income per unit are the same.

Recently Issued Accounting Pronouncements

Restricted Cash (Evaluating)

In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-18, Restricted Cash, which amended Statement of Cash Flows (Topic 230) of the Accounting Standards Codification. The new guidance will require amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments will be effective for the Company beginning October 1, 2018. The Company is currently evaluating the impact that adoption of this guidance will have on its financial statements.

2. CONCENTRATIONS

Two major customers accounted for approximately 95.6% of the outstanding accounts receivable balance at March 31, 2017 and 93.7% at September 30, 2016. These same two customers accounted for approximately 96.2% of revenue for the three and six month periods ended March 31, 2017 and 96.0% for the three and six month period ended March 31, 2016.

8

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

March 31, 2017

3.  INVENTORIES

Inventories consist of the following as of:

	March 31, 2017 (Unaudited)		September 30, 2016
Raw materials	$	12,848,954	$	4,677,336
Work in progress	1,210,618		1,252,919
Finished goods	3,303,513		3,638,427
Spare parts	2,751,996		2,524,787
Total	$	20,115,081	$	12,093,469

In the ordinary course of business, the Company enters into forward purchase contracts for its commodity purchases and sales. Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales. At March 31, 2017, the Company had forward corn purchase contracts at various fixed prices for various delivery periods through December 2018 for approximately 2.4% of expected production needs for the next twenty-one months. Approximately 11.0% of the forward corn purchases were with related parties. Given the uncertainty of future ethanol and corn prices, the Company could incur a loss on the outstanding corn purchase contracts in future periods. Management has evaluated these forward contracts using a methodology similar to that used in the lower of cost or net realizable value evaluation with respect to inventory valuation, and has determined that no impairment existed at March 31, 2017 or September 30, 2016. The Company has elected not to apply the normal purchase and sale exemption to its forward soybean contracts and therefore treats them as derivative instruments.

At March 31, 2017, the Company had forward dried distiller grains sales contracts for approximately 36.4% of expected production for the next two months at various fixed prices for delivery periods through May 2017. At March 31, 2017, the Company had forward corn oil contracts at various prices for delivery through April 2017, which approximates 76.9% of expected production for that time period. Also, at March 31, 2017, the Company had forward natural gas contracts for approximately 40.1% of expected purchases for the next twenty-four months at various prices for various delivery periods through March 2019. Additionally, at March 31, 2017, the Company had forward soybean purchase contracts for various delivery periods through March 2018 related to our current construction project which is intended to add grain receiving and train loading facilities and additional rail spurs, track and grain storage to provide the flexibility to receive and ship additional grain commodities.

4. DERIVATIVE INSTRUMENTS

The Company enters into corn, ethanol, natural gas and soybean derivative instruments, which are required to be recorded as either assets or liabilities at fair value in the balance sheet. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the derivative instrument and the related change in value of the underlying hedged item. The Company must designate the hedging instruments based upon the exposure being hedged as a fair value hedge, a cash flow hedge or a hedge against foreign currency exposure. The Company formally documents, designates, and assesses the effectiveness of transactions that receive hedge accounting initially and on an on-going basis.

Commodity Contracts

The Company enters into commodity-based derivatives, for corn, ethanol, natural gas and soybeans in order to protect cash flows from fluctuations caused by volatility in commodity prices. This is also done to protect gross profit margins from potentially adverse effects of market and price volatility on commodity based 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. The changes in the fair market value of ethanol derivative instruments are included as a component of revenue.  The changes in the fair market value of corn, natural gas, and soybean derivative instruments are included as a component of cost of goods sold.

At March 31, 2017, the Company had a net short (selling) position of 3,464,700 bushels of corn under derivative contracts used to hedge its forward corn contracts, corn inventory and ethanol sales. These corn derivatives are traded on the Chicago Board of Trade as of March 31, 2017 and are forecasted to settle for various delivery periods through March 2018. At March 31, 2017, the Company had a net long (buying) position of 1,890,000 gallons of ethanol under derivative contracts used to hedge its future

9

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

March 31, 2017

ethanol sales. These ethanol derivatives are traded on the New York Mercantile Exchange and are forecasted to settle for various delivery periods through September 2017. At March 31, 2017, the Company also had a net short (selling) position of 245,000 bushels of soybeans under derivative contracts used to hedge its forward soybean contract purchases. These soybean derivatives are traded on the Chicago Board of Trade and are as of March 31, 2017 forecasted to settle for various delivery periods through January 2018. These derivatives have not been designated as an effective hedge for accounting purposes.

The following table provides balance sheet details regarding the Company's derivative financial instruments at March 31, 2017:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol derivative contracts	Commodity Derivative Instruments - Current	$	—	$	322,077
Corn derivative contracts	Commodity Derivative Instruments - Current	$	221,417	$	—
Soybean derivative contracts	Commodity Derivative Instruments - Current	$	175,369	$	191,972

As of March 31, 2017 the Company had approximately $831,000 cash collateral (restricted cash) related to ethanol, corn, natural gas and soybean derivatives.

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2016:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol derivative contracts	Commodity Derivative Instruments - Current	$	—	$	188,475
Corn derivative contracts	Commodity Derivative Instruments - Current	$	—	$	152,575
Natural gas derivative contracts	Commodity Derivative Instruments - Current	$	14,100	$	—

As of September 30, 2016 the Company had approximately $1,461,000 of cash collateral (restricted cash) related to ethanol and corn derivatives held by three brokers.

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the three months ended March 31, 2017:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	162,724
Ethanol Derivative Contracts	Revenues	1,384,770
Natural Gas Derivative Contracts	Cost of Goods Sold	62,845
Soybean Derivative Contracts	Cost of Good Sold	(2,208		)
Totals		$	1,608,131

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the three months ended March 31, 2016:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	828,182
Ethanol Derivative Contracts	Revenues	301,107
Natural Gas Derivative Contracts	Cost of Goods Sold	(176,481		)
Totals		$	952,808

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CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

March 31, 2017

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the six months ended March 31, 2017:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	556,596
Ethanol Derivative Contracts	Revenues	1,346,560
Natural Gas Derivative Contracts	Cost of Goods Sold	133,830
Soybean Derivative Contracts	Cost of Goods Sold	(2,208		)
Totals		$	2,034,778

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the six months ended March 31, 2016:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	3,006,696
Ethanol Derivative Contracts	Revenues	221,901
Natural Gas Derivative Contracts	Cost of Goods Sold	(262,737		)
Totals		$	2,965,860

5. FAIR VALUE MEASUREMENTS

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of March 31, 2017:

Derivatives	Carrying Amount			Fair Value			Level 1			Level 2			Level 3
Corn Derivative Contracts	$	221,417		$	221,417		$	215,312		$	6,105		—
Ethanol Derivative Contracts	$	(322,077	)	$	(322,077	)	$	(322,077	)	—			—
Soybean Derivative Contracts	$	(16,603	)	$	(16,603	)	$	146,769		$	(163,372	)	—

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2016:

Derivatives	Carrying Amount			Fair Value			Level 1			Level 2		Level 3
Corn Derivative Contracts	$	(152,575	)	$	(152,575	)	$	174,969		(327,544	)	—
Ethanol Derivative Contracts	$	(188,475	)	$	(188,475	)	$	(188,475	)	—		—
Natural Gas Derivative Contracts	$	14,100		$	14,100		$	14,100		—		—

We determine the fair value of commodity futures derivative instruments utilizing Level 1 inputs by obtaining fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the Chicago Board of Trade market and New York Mercantile Exchange. We determine the fair value of corn and soybean Level 2 instruments by model-based techniques in which all significant inputs are observable in the markets noted above.

6.  BANK FINANCING

The Company has a loan agreement consisting of four loans, the Term Loan, Declining Revolving Loan (Declining Loan), the Revolving Credit Loan and the Construction Loan in exchange for liens on all property (real and personal, tangible and intangible)

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CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

March 31, 2017

which include, among other things, a mortgage on the property, a security interest on commodity trading accounts and assignment of material contracts.

On March 23, 2017, we executed the Tenth Amendment of First Amended and Restated Construction Loan Agreement to be effective as of February 28, 2017, which amends the First Amended and Restated Construction Loan Agreement dated June 10, 2013 (the "Amendment"). The primary purpose of the Amendment is to provide additional financing to fund a construction project which is expected to add grain receiving and train loading facilities and additional rail spurs, track and grain storage to provide the flexibility to receive and ship additional grain commodities (the Construction Loan). In connection therewith, we also executed a Disbursing Agreement, Construction Note and a Third Amendment of First Amended and Restated Construction Loan Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement.

The Amendment provides for a construction loan in the maximum principal amount of $10,000,000 with an interest rate equal to the 3-month LIBOR plus two hundred ninety basis points. The financing is secured by a mortgage on all of our real property and a security interest in all other assets, both tangible and intangible. The Amendment provides for monthly interest payments on the Construction Note during the draw period and then the principal balance of the construction advances is expected to be converted, on or before October 31, 2017, to term debt amortized over approximately seven years with a final maturity date of February 28, 2023. The Amendment provides for a minimum fixed charge coverage ratio of no less than 1.15:1.0 measured quarterly on a rolling four quarter average basis if our working capital is less than $25,000,000 for any reporting period. The Amendment also provides for a new debt service charge coverage ratio of no less than 1.25:1.0 measured quarterly on a rolling four quarter average basis, in lieu of the fixed charge coverage ratio, if our working capital is equal to or more that $25,000,000. The minimum $15,000,000 working capital requirement remains in place from a prior amendment as well. The Amendment modifies the capital expenditures covenant to limit those expenditures to $7,000,000 during the 2017 fiscal year, returning the limit to $5,000,000 for subsequent fiscal years. The grain loading and shipping project is excluded from the calculation. Finally, the Amendment extends the termination date of the Revolving Credit Loan from February 28, 2017 to February 28, 2018 and amends the mortgage to add the additional 64 acres of land purchased in October 2016.

Term Loan

The interest rate on the Term Loan is based on the 3-month LIBOR plus two hundred ninety basis points. The interest rate on the Term Loan at March 31, 2017 was 3.90% and at September 30, 2016 was 3.75%. There were borrowings in the amount of approximately $13,391,000 outstanding on the Term Loan at March 31, 2017 and approximately $14,820,000 outstanding at September 30, 2016. The Term Loan requires monthly installment payments of principal and interest of approximately $282,700 which commenced on September 1, 2016, with a final maturity date of February 28, 2021.

Declining Note

The maximum availability of the Declining Loan is $5,000,000 with such amount to be available for working capital purposes. The interest rate on the Declining Loan is 3-month LIBOR plus two hundred ninety basis points. The interest rate on the Declining Loan at March 31, 2017 was 3.90% and at September 30, 2016 was 3.75%. There were no borrowings outstanding on the Declining Loan at March 31, 2017 or at September 30, 2016.

Revolving Credit Loan

The Revolving Credit Loan has a limit of $15,000,000 supported by a borrowing base made up of the Company's corn, ethanol, dried distillers grain and corn oil inventories reduced by accounts payable associated with those inventories having a priority. It is also supported by the eligible accounts receivable and commodity trading account excess margin funds. The interest rate on the Revolving Credit Loan is based on the 1-month LIBOR plus two hundred ninety basis points. The interest rate at March 31, 2017 was 3.89% and at September 30, 2016 was 3.44%. There were no borrowings outstanding on the Revolving Credit Loan at March 31, 2017.

Construction Loan

The Construction Loan has a limit of $10,000,000. The interest rate on the Construction Loan is based on the 3-month LIBOR plus two hundred ninety basis points and at March 31, 2017 was 3.90%. There were no borrowings on the Construction Loan at March 31, 2017.

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CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

March 31, 2017

Long-term debt, as discussed above, consists of the following at March 31, 2017:

Term note	$	13,391,834
Less amounts due within one year	2,915,171
Net long-term debt	$	10,476,663

The estimated maturities of long-term debt at March 31, 2017 are as follows:

April 1, 2017 to March 31, 2018	$	2,915,171
April 1, 2018 to March 31, 2019	3,032,553
April 1, 2019 to March 31, 2020	3,154,169
April 1, 2020 to March 31, 2021	3,281,669
April 1, 2021 to March 31, 2022	1,008,272
Total long-term debt	$	13,391,834

7. LEASES

At March 31, 2017, the Company had the following operating lease minimum commitments for payments of rentals under leases which at inception had a non-cancellable term of more than one year:

	Total
April 1, 2017 to March 31, 2018	$	1,172,964
April 1, 2018 to March 31, 2019	682,588
Total minimum lease commitments	$	1,855,552

8. COMMITMENTS AND CONTINGENCIES

Capital Projects

The board of directors has approved a management proposal of capital projects for fiscal year 2017 to add a fermenter, an additional cooling tower cell and a beer-degasser. The projects are expected to cost approximately $5,000,000. In connection with the projects, the Company has executed construction contracts. The projects are expected to be complete by the September 30, 2017.

The board of directors has also approved a project to add grain loading facilities and additional rail track and grain storage. This project is expected to cost approximately $9,300,000. These additions are intended to provide the flexibility to receive and ship additional grain commodities if desired. The Company obtained construction financing providing up to $10,000,000 in funding for this project. See Note 6 for more disclosure regarding the Construction Loan.

Legal Proceedings

In February 2010, a lawsuit against the Company was filed by an unrelated party claiming the Company's operation of the oil separation system in a patent infringement. In connection with the lawsuit, in February 2010, the agreement for the construction and installation of the tricanter oil separation system was amended. In this amendment the manufacturer and installer of the tricanter oil separation system indemnifies the Company against all claims of infringement of patents, copyrights or other intellectual property rights from the Company's purchase and use of the tricanter oil system and agrees to defend the Company in the lawsuit

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CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

March 31, 2017

filed at no expense to the Company. On October 23, 2014, the court granted summary judgment finding that all of the patents claimed were invalid and that the Company had not infringed. In addition, on September 15, 2016, the United States District Court granted summary judgment finding that the patents were invalid due to inequitable conduct before the US Patent and Trademark Office by the inventors and their attorneys. We expect that GS CleanTech will appeal the rulings on the motions for summary judgment. The manufacturer has, and the Company expects it will continue, to vigorously defend itself and the Company in these lawsuits and in any appeal filed.

If the ruling was to be successfully appealed, the Company estimates that damages sought in this litigation if awarded would be

based on a reasonable royalty to, or lost profits of, the plaintiff. If the court deems the case exceptional, attorney's fees may be awarded and are likely to be $1,000,000 or more. The manufacturer has also agreed to indemnify the Company for these fees. However, in the event that damages are awarded, if the manufacturer is unable to fully indemnify the Company for any reason, the Company could be liable. In addition, the Company may need to cease use of its current oil separation process and seek out a replacement or cease oil production altogether.

9. UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS

The Company has certain risks and uncertainties that it experiences during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol, distillers grains and corn oil to customers primarily located in the U.S. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. Ethanol sales average approximately 83% of total revenues and corn costs average 78% of total cost of goods sold.

The Company's operating and financial performance is largely driven by prices at which the Company sells ethanol, distillers grains and corn oil, and the related cost of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and the unleaded gasoline and the petroleum markets, although, since 2005, the prices of ethanol and gasoline began a divergence with ethanol 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.

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

We prepared the following discussion and analysis to help you better understand our financial condition, changes in our financial condition, and results of operations for the three and six month periods ended March 31, 2017, compared to the same period of the prior fiscal year. This discussion should be read in conjunction with the condensed financial statements and notes and the information contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2016.

Forward Looking Statements

This report contains forward-looking statements that involve future events, our future performance and our expected future operations and actions.  In some cases you can identify forward-looking statements by the use of words such as "may," "will," "should," "anticipate," "believe," "expect," "plan," "future," "intend," "could," "estimate," "predict," "hope," "potential," "continue," or the negative of these terms or other similar expressions.  These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties, including, but not limited to those listed below and those business risks and factors described elsewhere in this report and our other Securities and Exchange Commission filings. 

• Reduction, delay, or elimination of the Renewable Fuel Standard;

• Changes in the availability and price of corn and natural gas;

• Our inability to secure credit or obtain additional equity financing we may require in the future to continue our operations;

• Decreases in the price we receive for our ethanol, distiller grains and corn oil;

• Our ability to satisfy the financial covenants contained in our credit agreements with our senior lender;

• Our ability to profitably operate the ethanol plant and maintain a positive spread between the selling price of our products and our raw material costs;

• Negative impacts that our hedging activities may have on our operations;

• Ethanol and distiller grains supply exceeding demand and corresponding price reductions;

• Our ability to generate free cash flow to invest in our business and service our debt;

• Changes in the environmental regulations that apply to our plant operations;

• Changes in our business strategy, capital improvements or development plans;

• Changes in plant production capacity or technical difficulties in operating the plant;

• Changes in general economic conditions or the occurrence of certain events causing an economic impact in the agriculture, oil or automobile industries;

• Lack of transport, storage and blending infrastructure preventing our products from reaching high demand markets;

• Changes in federal and/or state laws;

• Changes and advances in ethanol production technology;

• Competition from alternative fuel additives;

• Changes in interest rates or the lack of credit availability;

• Changes in legislation benefiting renewable fuels;

• Our ability to retain key employees and maintain labor relations;

• Volatile commodity and financial markets; and

• Limitations and restrictions contained in the instruments and agreements governing our indebtedness.

The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no duty to update these forward-looking statements even though our situation may change in the future.  We cannot guarantee future results, levels of activity, performance or achievements.  We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report.  You should read this report and the documents that we reference in this report and have filed as exhibits, completely and with the understanding that our actual future results may be materially different from what we currently expect.  We qualify all of our forward-looking statements with these cautionary statements.

Overview

Cardinal Ethanol, LLC is an Indiana limited liability company currently operating a 100 million gallon per year nameplate capacity ethanol plant in east central Indiana near Union City, Indiana. We began producing ethanol and distillers grains at the plant in November 2008. We are currently operating above our 100 million gallons per year nameplate capacity and expect to continue to operate above our nameplate capacity into the near future.

Our revenues are primarily derived from the sale of our ethanol, distillers grains and corn oil. We market and sell our products primarily in the continental United States using third party marketers. Murex, LLC markets all of our ethanol. Our

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distillers grains are marketed by CHS, Inc. We market and distribute all of the corn oil we produce directly to end users and third party brokers.    

We have recently completed projects to add storage capacity to our plant and increase annual production capacity to approximately 135 million gallons. These projects were substantially complete at September 30, 2016 for a total cost of approximately $16,500,000. We continue to work to improve process efficiencies and reduce bottlenecks and expect to reach our goal of operating at an annual ethanol production rate of approximately 135 million gallons during our fiscal year ending September 30, 2017.

The board of directors has approved capital projects for fiscal year 2017 to add a fermenter, an additional cooling tower cell, a beer-degasser and miscellaneous de-bottlenecking. The projects are expected to cost approximately $5,000,000. The projects are expected to be complete by the end of the fiscal year ended September 30, 2017.

The board of directors has also approved a construction project which is expected to add grain receiving and train loading facilities and additional rail spurs, track and grain storage to provide the flexibility to receive and ship additional grain commodities This project is expected to cost approximately $9,300,000. To provide funding for this project, we executed a Tenth Amendment of First Amended and Restated Construction Loan Agreement with our primary lender, First National Bank of Omaha, to be effective as of February 28, 2017, which amends the First Amended and Restated Construction Loan Agreement dated June 10, 2013. In connection therewith, we also executed a Disbursing Agreement, Construction Note and a Third Amendment of First Amended and Restated Construction Loan Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement. Please refer toItem 1 - Financial Statements, Note 6 - Bank Financing for additional details regarding the terms of our construction financing.

On February 14, 2017, the board of directors declared a cash distribution. The date and amount is listed in the table below:

Date Declared	Distribution Declared Per Unit		Total Distribution Amount		Month Distribution Paid
February 14, 2017	$	200	$	2,921,200	February 2017

In the past, China has been the world's largest importer of distillers grains produced in the U.S. However, last year, China began an anti-dumping and countervailing duty investigation related to distillers grains imported from the United States which contributed to a decline in distillers grains shipped to China. Last fall, China issued a preliminary ruling imposing immediate anti-dumping and anti-subsidy duties on distillers grains that are produced in the United States. On January 10, 2017, China then announced a final ruling increasing anti-dumping duties to a range of 42.2% to 53.7%, up from 33.8% in its preliminary decision. Anti-subsidy duties will range from 11.2% to 12.0%, up from 10.0% to 10.7% in its preliminary decision. The imposition of these duties are expected to result in a further decline in demand from this top importer requiring United States producers to seek out alternative markets.

We expect to fund our operations during the next 12 months using cash flow from our continuing operations and our current credit facilities as amended. However, should we experience unfavorable operating conditions in the ethanol industry that prevent us from profitably operating the ethanol plant, we may need to seek additional funding.

Results of Operations for the Three Months Ended March 31, 2017 and 2016

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the three months ended March 31, 2017 and 2016:

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	2017					2016
Statement of Operations Data	Amount			%		Amount			%
Revenue	$	59,473,502		100.00		$	51,589,923		100.00
Cost of Goods Sold	55,018,000			92.51		48,600,758			94.21
Gross Profit	4,455,502			7.49		2,989,165			5.79
Operating Expenses	1,434,866			2.41		1,486,206			2.88
Operating Income	3,020,636			5.08		1,502,959			2.91
Other Expense, Net	(119,338		)	(0.20	)	(80,785		)	(0.16	)
Net Income	$	2,901,298		4.88		$	1,422,174		2.75

Revenues

Our revenues from operations come from three primary sources: sales of fuel ethanol, distillers grains and corn oil. Revenues also include net gains or losses from derivatives related to products sold. The following table shows the sources of our revenue for the three months ended March 31, 2017 and 2016:

	2017				2016
Revenue Source	Amount		% of Revenues		Amount		% of Revenues
Ethanol Sales	$	49,525,748	83.27	%	$	39,473,367	76.51	%
Distillers Grains Sales	7,675,673		12.91		9,822,215		19.04
Corn Oil Sales	1,949,748		3.28		1,896,130		3.68
Carbon Dioxide Sales	123,377		0.21		206,950		0.40
Other Revenue	198,956		0.33		191,261		0.37
Total Revenues	$	59,473,502	100.00	%	$	51,589,923	100.00	%

Ethanol

Our revenues from ethanol increased for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. This increase in revenues is the result of an increase in the average market price per gallon of ethanol sold and an increase in gallons of ethanol sold during the three months ended March 31, 2017 as compared to the same period in 2016.

The average price per gallon of ethanol sold for the three months ended March 31, 2017 was approximately 12.6%higher than our average price per gallon of ethanol sold for the same period in 2016. This increase in average market price for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016 is due to increased domestic driving demand and export demand, particularly from Brazil, which put upward pressure on ethanol prices. In 2016, lower crude oil and unleaded gasoline prices and an increase in national ethanol supply had a negative effect on ethanol prices during the three months ended March 31, 2016.

Management anticipates that ethanol prices will continue to change in relation to changes in corn and energy prices. If corn, crude oil and gasoline prices decrease, that could have a significant negative impact on the market price of ethanol and our profitability, particularly should ethanol stocks grow because of expansion of production capacity in the industry or other factors. A decline in U.S. ethanol exports would also likely contribute to higher ethanol stocks unless additional demand could be created domestically.

We experienced an increase in ethanol gallons sold of approximately 11.8% for the three months ended March 31, 2017 as compared to the same period in 2016 resulting primarily from increased ethanol demand and production rates. We are currently operating at approximately 29% to 32% above our nameplate capacity. Management anticipates that the gallons of ethanol sold by our plant will increase due to our plans to increase our annual ethanol production rate to approximately 135 million gallons during our fiscal year ended September 30, 2017.

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Distillers Grains

Our revenues from distillers grains decreased in the three months ended March 31, 2017 as compared to the same period in 2016. This decrease in revenues is the result of a decrease in the average market price per ton of distillers grains sold for the period ended March 31, 2017 as compared to the same period in 2016.

The average price per ton of distillers grains sold for the three months ended March 31, 2017 was approximately 32.4%lower than the average price per ton of distillers grains sold for the same period in 2016. This decline in the market price of distillers grains is due to lower domestic demand and lower export demand, particularly from China, which has resulted in a decline in the price of distillers grains as a percentage of corn values.

China has been a significant consumer of exported distillers grains particularly since December 2014 following the resolution of a dispute related to China's objection to the presence of an unapproved genetically modified organism in some U.S. shipments. However, an anti-dumping investigation began by the Chinese government on January 12, 2016 into distillers grains produced in the U.S. and the recent imposition by China of anti-dumping and anti-subsidy duties on U.S. imports has had a negative effect on export demand from China resulting in lower distillers grains prices. Last fall, China issued a preliminary ruling imposing immediate anti-dumping and anti-subsidy duties on distillers grains that are produced in the United States. On January 10, 2017, China then announced a final ruling increasing anti-dumping and anti-subsidy duties. The imposition of these duties are expected to result in a further decline in demand from this top importer and distillers grains prices could remain low unless additional demand can be created from other foreign markets or domestically. Domestic demand for distillers grains could also remain low due to expansion of production capacity in the ethanol industry and end-users switching to lower priced alternatives.

We sold approximately 15.8%more tons of distillers grains in the three months ended March 31, 2017 as compared to the same period in 2016 due primarily to an increase in ethanol production rates resulting in higher distillers grains production. Management anticipates that the distillers grains sold by our plant will increase due to our plans to increase our annual ethanol production rate to approximately 135 million gallons during our fiscal year ended September 30, 2017.

Corn Oil

Our revenues from corn oil sales increased approximately 2.8% in the three months ended March 31, 2017 as compared to the same period in 2016 which was primarily a result of an increase in the price of corn oil sold in the three months ended March 31, 2017 as compared to the same period in 2016. The average price per pound of corn oil was approximately 12.0%higher for the three months ended March 31, 2017 as compared to the same period in 2016 due to increased demand from the feed industry. We sold approximately 9.1%fewer tons of corn oil in the three months ended March 31, 2017 as compared to the same period in 2016 due primarily to decreased oil extraction rates per bushel of corn.

Management expects corn oil prices will remain relatively steady in the near term. However, corn oil prices may be negatively affected if the biodiesel tax credit that expired on December 31, 2016 is not renewed by Congress. Corn oil prices may also decrease if biodiesel plants switch to lower priced alternatives such as soybean oil. Management expects its corn oil production will increase due to our plans to increase our annual ethanol production rate to approximately 135 million gallons during our fiscal year ended September 30, 2017 which would also increase our corn oil production.

Cost of Goods Sold

Our cost of goods sold as a percentage of revenues was approximately 92.5% for the three months ended March 31, 2017 as compared to approximately 94.2% for the same period in 2016. This decrease in cost of goods sold as a percentage of revenues was the result of the widening of the margin between ethanol prices relative to the cost of corn for the three months ended March 31, 2017 as compared to the same period in 2016. Our two largest costs of production are corn and natural gas. Cost of goods sold also includes net gains or losses from derivatives related to our commodities purchases.

Corn

Our largest cost associated with the production of ethanol, distillers grains and corn oil is corn cost. During the three months ended March 31, 2017, we used approximately 10.4%more bushels of corn to produce our ethanol, distillers grain and corn oil as compared to the same period in 2016. During the three months ended March 31, 2017, our average price paid per bushel of corn was approximately 2.4%higher as compared to the same period in 2016. Corn prices have been fairly steady throughout our second fiscal quarter. Corn supplies have been sufficient locally and we have had no difficulty sourcing corn during our second fiscal quarter.

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Weather, world supply and demand, current and anticipated stocks, agricultural policy and other factors can contribute to volatility in corn prices. If corn prices rise, it will have a negative effect on our operating margins unless the price of ethanol and distillers grains out paces rising corn prices. Volatility in the price of corn could significantly impact our cost of goods sold.

Natural Gas

Our natural gas cost after hedging was higher during the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. This increase in cost of natural gas for the three months ended March 31, 2017 as compared to the same period in 2016 was primarily the result of an increase of approximately 13.5% in the average price per MMBTU of natural gas due to increased demand and lower production which have used up natural gas stocks built up in 2015. We also used approximately 7.5%more natural gas for the three months ended March 31, 2017 as compared to the same period in 2016 because of higher ethanol production.

Natural gas prices are expected to increase in the future due to producers shutting down wells resulting in lower natural gas production and to the conversion of power plants across the U.S. from coal to natural gas. If the nation were to experience a catastrophic weather event causing problems related to the supply of natural gas, this could result in higher natural gas prices.

Derivatives

We enter into hedging instruments to minimize price fluctuations in the prices of our finished products and inputs. As the current market price of our hedge positions changes, the realized or unrealized gains and losses are immediately recognized in our revenues and our cost of goods sold. These commodity-based derivatives are not designated as effective hedges for accounting purposes. Please refer to Item 3 - Quantitative and Qualitative Disclosures About Market Risk-Commodity Price Risk for information on our derivatives.

Operating Expense

Our operating expenses as a percentage of revenues were approximately 2.4% for the three months ended March 31, 2017 as compared to operating expenses of approximately 2.9% of revenues for the same period in 2016. Operating expenses include salaries and benefits of administrative employees, insurance, taxes, professional fees and other general administrative costs. Our efforts to optimize efficiencies and maximize production may result in a decrease in our operating expenses on a per gallon basis. However, because these expenses generally do not vary with the level of production at the plant, we expect our operating expenses to remain relatively steady throughout the remainder of the 2017 fiscal year.

Operating Income

Our income from operations for the three months ended March 31, 2017 was approximately 5.1% of our revenues as compared to operating income of approximately 2.9% of revenues for the same period in 2016. The increase in operating income for the three months ended March 31, 2017 was primarily the result of increased ethanol prices relative to the price of corn.

Other Income (Expense)

Our other expense for the three months ended March 31, 2017 and for the same period in 2016 was minimal. Our other expense for the three months ended March 31, 2017 and March 31, 2016 consisted primarily of interest expense.

Results of Operations for the Six Months Ended March 31, 2017 and 2016

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the six months ended March 31, 2017 and 2016:

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	2017					2016
Statement of Operations Data	Amount			%		Amount			%
Revenue	$	117,528,266		100.00		$	109,134,959		100.00
Cost of Goods Sold	104,468,176			88.89		102,994,832			94.37
Gross Profit	13,060,090			11.11		6,140,127			5.63
Operating Expenses	2,621,623			2.23		2,855,811			2.62
Operating Income	10,438,467			8.88		3,284,316			3.01
Other Expense	(239,132		)	(0.20	)	(118,008		)	(0.11	)
Net Income	$	10,199,335		8.68		$	3,166,308		2.90

Revenues

Our revenues from operations come from three primary sources: sales of fuel ethanol, distillers grains and corn oil. Revenues also include net gains or losses from derivatives related to products sold. The following table shows the sources of our revenue for the six months ended March 31, 2017 and 2016:

	2017				2016
Revenue Source	Amount		% of Revenues		Amount		% of Revenues
Ethanol Sales	$	97,805,477	83.22	%	$	85,412,493	78.26	%
Distillers Grains Sales	15,193,586		12.93		19,480,561		17.85
Corn Oil Sales	4,056,484		3.45		3,782,459		3.47
Carbon Dioxide Sales	235,150		0.20		268,185		0.25
Other Revenue	237,569		0.20		191,261		0.17
Total Revenues	$	117,528,266	100.00	%	$	109,134,959	100.00	%

Ethanol

Our revenues from ethanol increased for the six months ended March 31, 2017 as compared to the six months ended March 31, 2016. This increase in revenues is the result of an increase in the average market price per gallon of ethanol sold and an increase in gallons of ethanol sold during the six months ended March 31, 2017 as compared to the same period in 2016.

The average price per gallon of ethanol sold for the six months ended March 31, 2017 was approximately 10.00%higher than our average price per gallon of ethanol sold for the same period in 2016. This increase in average market price for the six months ended March 31, 2017 as compared to the six months ended March 31, 2016 is due to increased domestic driving demand and export demand which put upward pressure on ethanol prices. In 2016, lower crude oil and unleaded gasoline prices and an increase in national supply had a negative effect on ethanol prices during the six months ended March 31, 2016.

We experienced an increase in ethanol gallons sold of approximately 4.2% for the six months ended March 31, 2017 as compared to the same period in 2016 resulting primarily from increased ethanol production rates. We are currently operating at approximately 29% to 32% above our nameplate capacity.

Distillers Grains

Our revenues from distillers grains decreased in the six months ended March 31, 2017 as compared to the same period in 2016. This decrease in revenues is the result of a decrease in the average market price per ton of distillers grains sold for the period ended March 31, 2017 as compared to the same period in 2016.

The average price per ton of distillers grains sold for the six months ended March 31, 2017 was approximately 26.4%lower than the average price per ton of distillers grains sold for the same period in 2016. This decline in the market price of distillers grains is due to lower domestic demand and lower export demand, particularly from China.

We sold approximately 6.0%more tons of distillers grains in the six months ended March 31, 2017 as compared to the same period in 2016 due primarily to an increase in ethanol production rates and timing of distillers grains shipments.

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Corn Oil

Our revenues from corn oil sales increased approximately 7.2% in the six months ended March 31, 2017 as compared to the same period in 2016 which was primarily a result of an increase in the price of corn oil sold in the three months ended March 31, 2017 as compared to the same period in 2016. The average price per pound of corn oil was approximately 26%higher for the six months ended March 31, 2017 as compared to the same period in 2016 due to increased demand from the feed industry. We sold approximately 7.9%fewer tons of corn oil in the six months ended March 31, 2017 as compared to the same period in 2016 due primarily to decreased oil extraction rates per bushel of corn.

Cost of Goods Sold

Our cost of goods sold as a percentage of revenues was approximately 88.9% for the six months ended March 31, 2017 as compared to approximately 94.4% for the same period in 2016. This decrease in cost of goods sold as a percentage of revenues was the result of the widening of the margin between ethanol price relative to the cost of corn for the six months ended March 31, 2017 as compared to the same period in 2016. Our two largest costs of production are corn and natural gas. Cost of goods sold also includes net gains or losses from derivatives related to our commodities purchases.

Corn

Our largest cost associated with the production of ethanol, distillers grains and corn oil is corn cost. During the six months ended March 31, 2017, we used approximately 4.8%more bushels of corn to produce our ethanol, distillers grain and corn oil as compared to the same period in 2016. During the six months ended March 31, 2017, our average price paid per bushel of corn was approximately 6.2% lower as compared to the same period in 2016. Corn prices have trended lower due to the plentiful 2016 harvest, compared to the 2015 crop year where wetter weather lowered corn yields locally. Corn supplies have been sufficient locally and we have had no difficulty sourcing corn during our second fiscal quarter.

Natural Gas

Our natural gas cost after hedging was higher during the six months ended March 31, 2017 as compared to the six months ended March 31, 2016. This increase in cost of natural gas for the six months ended March 31, 2017 as compared to the same period in 2016 was primarily the result of an increase of approximately 14.2% in the average price per MMBTU of natural gas due to increased demand and lower production which have used up natural gas stocks built up in 2015. We also used approximately 5.3%more natural gas for the six months ended March 31, 2017 as compared to the same period in 2016 because of higher ethanol production.

Derivatives

We enter into hedging instruments to minimize price fluctuations in the prices of our finished products and inputs. As the current market price of our hedge positions changes, the realized or unrealized gains and losses are immediately recognized in our revenues and our cost of goods sold. These commodity-based derivatives are not designated as effective hedges for accounting purposes. Please refer to Item 3 - Quantitative and Qualitative Disclosures About Market Risk-Commodity Price Risk for information on our derivatives.

Operating Expense

Our operating expenses as a percentage of revenues were approximately 2.2% for the six months ended March 31, 2017 as compared to operating expenses of approximately 2.6% of revenues for the same period in 2016. Operating expenses include salaries and benefits of administrative employees, insurance, taxes, professional fees and other general administrative costs. Our efforts to optimize efficiencies and maximize production may result in a decrease in our operating expenses on a per gallon basis. However, because these expenses generally do not vary with the level of production at the plant, we expect our operating expenses to remain relatively steady throughout the remainder of the 2017 fiscal year.

Operating Income

Our income from operations for the six months ended March 31, 2017 was approximately 8.9% of our revenues as compared to operating income of approximately 3.0% of revenues for the same period in 2016. The increase in operating income for the six months ended March 31, 2017 was primarily the result of increased ethanol prices relative to the price of corn.

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Other Income (Expense)

Our other expense for the six months ended March 31, 2017 and for the same period in 2016 was minimal. Our other expense for the six months ended March 31, 2017 and March 31, 2016 consisted primarily of interest expense.

Changes in Financial Condition for the Six Months Ended March 31, 2017

The following table highlights the changes in our financial condition:

	March 31, 2017 (Unaudited)		September 30, 2016
Current Assets	$	46,875,980	$	48,529,843
Current Liabilities	$	14,083,725	$	11,676,852
Long-Term Liabilities	$	10,476,663	$	11,932,063
Member's Equity	$	128,834,793	$	130,320,257

We experienced a decrease in our current assets at March 31, 2017 as compared to September 30, 2016. This decrease was primarily driven by a decrease in our cash at March 31, 2017 as compared to September 30, 2016 due primarily to increased cash outlays for ongoing capital projects. This decrease was partially offset by an increase in our inventories at March 31, 2017 compared to September 30, 2016 due to increased corn inventories as the crop has come into storage from the 2016 harvest.

We experienced an increase in our total current liabilities at March 31, 2017 as compared to September 30, 2016. This increase was primarily due to an increase in our accounts payable at March 31, 2017 as compared to September 30, 2016 due to ongoing capital projects. We also experienced an increase in accounts payable corn at March 31, 2017 as compared to September 30, 2016 due to an increase in corn deliveries.

We experienced a decrease in our long-term liabilities as of March 31, 2017 as compared to September 30, 2016. At March 31, 2017, we had $10,476,663 of outstanding borrowings in the form of long-term loans as compared to $11,932,063 at September 30, 2016. The decrease is due to monthly principal payments on the long-term debt.

Liquidity and Capital Resources

Based on financial forecasts performed by our management, we anticipate that we will have sufficient cash from our current credit facilities and cash from our operations to continue to operate the ethanol plant for the next 12 months. We do not anticipate seeking additional equity financing during our 2017 fiscal year. Operating margins were steady during our first two fiscal quarters and are expected to continue to be positive during our next fiscal quarter. However, should we experience unfavorable operating conditions in the ethanol industry that prevent us from profitably operating the ethanol plant, we could have difficulty maintaining our liquidity and may need to rely on our revolving lines of credit for operations.

The following table shows cash flows for the six months ended March 31, 2017 and 2016:

	2017			2016
Net cash provided by operating activities	$	8,112,436		$	874,596
Net cash used for investing activities	$	(4,900,029	)	$	(4,736,918	)
Net cash used for financing activities	$	(13,113,318	)	$	(5,167,837	)
Net decrease in cash	$	(9,900,911	)	$	(9,030,159	)
Cash, beginning of period	$	23,002,139		$	20,827,614
Cash, end of period	$	13,101,228		$	11,797,455

Cash Flow from Operations

We experienced an increase in our cash flow from operations for the six months ended March 31, 2017 as compared to the same period in 2016. This was primarily the result of increased net income as a result of increased ethanol prices relative to the cost of corn for the six months ended March 31, 2017 compared with the same period in 2016.

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Cash Flow used for Investing Activities

We used more cash in investing activities for the six months ended March 31, 2017 as compared to the same period in 2016. Cash used in investing activities was used for payments for construction in progress due to our capital projects described below in Capital Improvements.

Cash Flow used for Financing Activities

We used more cash in financing activities for the six months ended March 31, 2017 as compared to the same period in 2016. This increase was the result of our making payments on our long term debt for the six months ended March 31, 2017 compared to receiving proceeds from long term debt for the period ended March 31, 2016.

Our liquidity, results of operations and financial performance will be impacted by many variables, including the market price for commodities such as, but not limited to, corn, ethanol and other energy commodities, as well as the market price for any co-products generated by the facility and the cost of labor and other operating costs.  Assuming future relative price levels for corn, ethanol and distillers grains remain consistent with the relative price levels as of March 31, 2017, we expect operations to generate adequate cash flows to maintain operations.

Short and Long Term Debt Sources

We have a loan agreement consisting of four loans, the Term Loan, the Declining Revolving Loan ("Declining Loan"), the Revolving Credit Loan and a Construction Loan. In exchange for these loans, we granted liens on all property (real and personal, tangible and intangible) which include, among other things, a mortgage on the property, a security interest on commodity trading accounts, and assignment of material contracts. On March 23, 2017, we executed a Tenth Amendment of First Amended and Restated Construction Loan Agreement to be effective as of February 28, 2017, which amends the First Amended and Restated Construction Loan Agreement dated June 10, 2013 (the "Amendment"). The primary purpose of the Amendment was to provide an additional $10,000,000 in financing to fund a construction project which is expected to add grain receiving and train loading facilities and additional rail spurs, track and grain storage to provide the flexibility to receive and ship additional grain commodities (the "Construction Loan"). The Amendment also extends the termination date of the Revolving Credit Loan from February 28, 2017 to February 28, 2018 and amends the mortgage to add an additional 64 acres of land purchased in October 2016. Please refer toItem 1 - Financial Statements, Note 6 - Bank Financing for additional details regarding the Amendment.

Term Loan

The interest rate on the Term Loan is based on the 3-month London Interbank Offered Rate ("LIBOR") plus two hundred ninety basis points. The interest rate at March 31, 2017 was 3.90%. The Term Loan requires monthly installment payments of approximately $282,700 commencing on September 1, 2016, with a final maturity date of February 28, 2021. There was approximately $13,392,000 outstanding on the Term Loan at March 31, 2017 and approximately $14,820,000 outstanding on the Term Loan at September 30, 2016.

Declining Loan

The maximum availability of the Declining Loan is $5,000,000 with such amount to be available for working capital purposes. The interest rate on the Declining Loan is based on the 3-month LIBOR plus two hundred ninety basis points. The interest rate at March 31, 2017 was 3.90%. There was no balance outstanding on the Declining Loan at March 31, 2017 or September 30, 2016.

Revolving Credit Loan

The Revolving Credit Loan has a limit of $15,000,000 supported by a borrowing base made up of our corn, ethanol, dried distillers grain and corn oil inventories reduced by accounts payable associated with those inventories having a priority. It is also supported by the eligible accounts receivable and commodity trading account excess margin funds. The interest rate on the Revolving Credit Loan is based on the 1-month LIBOR plus two hundred ninety basis points. The interest rate at March 31, 2017 was 3.89%. There were no borrowings outstanding on the Revolving Credit Note at March 31, 2017 or September 30, 2016.

23

Construction Loan

The Construction Loan has a limit of $10,000,000. The interest rate on the Construction Loan is based on the 3-month LIBOR plus two hundred ninety basis points and at March 31, 2017 was 3.90%. There were no borrowings on the Construction Loan at March 31, 2017 or at September 30, 2016.

Covenants

During the term of the loans, we will be subject to certain financial covenants. Our minimum working capital is $15,000,000, which is calculated as our current assets plus the amount available for drawing under our long term revolving note, less current liabilities. Our minimum fixed charge coverage ratio is no less than 1.15:1.0 measured on a rolling four quarter average basis. However, for any reporting period, if our working capital is equal to or more than $25,000,000, we will be subject to maintaining a debt service charge coverage ratio of no less than 1.25:1.0 in lieu of the fixed charge coverage ratio.

Our loan agreement also requires us to obtain prior approval from our lender before making, or committing to make, capital expenditures exceeding an aggregate amount of $5,000,000 in any single fiscal year except for the 2017 fiscal year when we are allowed $7,000,000 of expenditures without prior approval excluding the grain loading and receiving project from the calculation.

We are meeting our liquidity needs and complying with our financial covenants and the other terms of our loan agreements at March 31, 2017. Based on current management projections, we anticipate that future operations will be sufficient to generate enough cash flow to maintain operations, service any new debt and comply with our financial covenants and other terms of our loan agreements through March 31, 2018. Should market conditions deteriorate in the future, circumstances may develop which could result in us violating the financial covenants or other terms of our loan agreements. Should we violate the terms or covenants of our loan or fail to obtain a waiver of any such term or covenant, our primary lender could deem us in default of our loans and require us to immediately repay a significant portion or possibly the entire outstanding balance of our loans if we have a balance outstanding. In that event, our lender could also elect to proceed with a foreclosure action on our plant.

Development Agreement

In September 2007, the Company entered into a development agreement with Randolph County Redevelopment Commission (“the Commission”) to promote economic development in the area. Under the terms of this agreement, beginning in January 2008 through December 2028, the money the Company pays toward property tax expense is allocated to an expense and an acquisition account. The funds in the acquisition account can be used by the Commission to purchase equipment, at the Company's direction, for the plant. The Company does not have title to or control over the funds in the acquisition account, no amounts have been recorded in the balance sheet relating to this account.

Tax Abatement

In October 2006, the real estate that our plant was constructed on was determined to be an economic revitalization area, which qualified us for tax abatement. The abatement period is for a ten year term, with an effective date beginning calendar year end 2009 for the property taxes payable in calendar year 2010. The program allows for 100% abatement of property taxes beginning in year 1, and then decreases on a ratable scale so that in year 11 the full amount of property taxes are due and payable. We must apply annually and meet specified criteria to qualify for the abatement program.

Capital Improvements

We have recently completed projects to add storage capacity to our plant and increase annual production capacity to approximately 135 million gallons. These projects were substantially complete at September 30, 2016, for a total cost of approximately $16,500,000. We continue to work to improve process efficiencies and reduce bottlenecks and expect to reach our goal of operating at an annual production rate of approximately 135 million gallons during the fiscal year ending September 30, 2017.

The board of directors has approved capital projects for fiscal year 2017 to add a fermenter, an additional cooling tower cell, a beer-degasser and miscellaneous de-bottlenecking. The projects are expected to cost approximately $5,000,000. In connection with the construction of these projects, we have an agreement with Nelson Engineering, Inc. The projects are expected to be complete by the end of the fiscal year ended September 30, 2017. The board of directors has also approved a project to add grain loading facilities and additional rail track and grain storage. These additions are intended to provide the flexibility to receive

24

and ship additional grain commodities if desired and is expected to cost approximately $9,300,000. Please refer toItem 1 - Financial Statements, Note 6 - Bank Financing for additional details regarding the terms of our construction financing for this project.

Critical Accounting Estimates

Management uses various estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Our most critical accounting estimates, which require the greatest use of judgment by management, are designated as critical accounting estimates and include policies related to the useful lives of fixed assets; allowance for doubtful accounts; the valuation of basis and delay price contracts on corn purchases; derivatives; inventory; patronage dividends, long-lived assets and inventory purchase commitments.  An in-depth description of these can be found in our Annual Report on Form 10-K for the fiscal year ended September 30, 2016.  Management has not changed the method of calculating and using estimates and assumptions in preparing our condensed financial statements in accordance with generally accepted accounting principles.  There have been no changes in the policies for our accounting estimates for the six months ended March 31, 2017.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to the impact of market fluctuations associated with interest rates and commodity prices as discussed below. We have no exposure to foreign currency risk as all of our business is conducted in U.S. Dollars. We use derivative financial instruments as part of an overall strategy to manage market risk. We use cash, futures and option contracts to hedge changes to the commodity prices of corn and natural gas. We do not enter into these derivative financial instruments for trading or speculative purposes, nor do we designate these contracts as hedges for accounting purposes.

Interest Rate Risk

We are exposed to market risk from changes in interest rates. Exposure to interest rate risk results primarily from our Term Loan, Declining Loan, Revolving Credit Loan and Construction Loan which bear variable interest rates.  The interest rate for the Term Loan is the 3-month LIBOR rate plus 290 basis points with no minimum. There were borrowings in the amount of $13,391,000 outstanding on the Term Loan and the applicable interest rate was 3.90% at March 31, 2017. The interest rate on the Declining Loan is the 3-month LIBOR plus 290 basis points with no minimum. There were no borrowings outstanding on the Declining Loan and the applicable interest rate was 3.90% at March 31, 2017. The interest rate for the Revolving Credit Note is the 1-month LIBOR rate plus 290 basis points with no minimum. There were no outstanding balances on the Revolving Credit Note at March 31, 2017 and the applicable interest rate was 3.89%. The interest rate on the Construction Loan is the 3-month LIBOR plus 290 basis points with no minimum. There were no borrowings outstanding on the Construction Loan and the applicable interest rate was 3.90% at March 31, 2017. The specifics of the Term Loan, Declining Loan, the Revolving Credit Loan and the Construction Loan are discussed in greater detail above. If we were to experience a 10% adverse change in LIBOR, the annual effect such change would have on our statement of operations, based on the amount we had outstanding on our variable interest rate loans at March 31, 2017, would be approximately $14,000.

Commodity Price Risk

We expect to be exposed to market risk from changes in commodity prices.  Exposure to commodity price risk results from our dependence on corn in the ethanol production process and the sale of ethanol.

We seek to minimize the risks from fluctuations in the prices of raw material inputs, such as corn and natural gas, and finished products, such as ethanol and distiller's grains, through the use of hedging instruments. In practice, as markets move, we actively manage our risk and adjust hedging strategies as appropriate. Although we believe our hedge positions accomplish an economic hedge against our future purchases and sales, management has chosen not to use hedge accounting, which would match the gain or loss on our hedge positions to the specific commodity purchase being hedged. We are using fair value accounting for our hedge positions, which means as the current market price of our hedge positions changes, the realized or unrealized gains and losses are immediately recognized in our cost of goods sold or as an offset to revenues. The immediate recognition of hedging gains and losses can cause net income to be volatile from quarter to quarter due to the timing of the change in value of the derivative instruments relative to the cost and use of the commodity being hedged.

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We enter into forward contracts for our commodity purchases and sales on a regular basis.  It is our intent that, as we enter in to these contracts, we will use various hedging instruments to maintain a near even market position.  For example, if we have 1 million bushels of corn under fixed price contracts we would generally expect to enter into a short hedge position to offset our price risk relative to those bushels we have under fixed price contracts.  Because our ethanol marketing company is selling substantially all of the gallons it markets on a spot basis we also include the corn bushel equivalent of the ethanol we have produced that is inventory but not yet priced as bushels that need to be hedged.

At March 31, 2017, we had a net long (buying) position of 1,890,000 gallons of ethanol under derivative contracts used to hedge our future ethanol sales for various delivery periods through September 2017, a net short (selling) position of 3,464,700 bushels of corn under derivative contracts used to hedge our forward corn contracts, corn inventory and ethanol sales for various delivery periods through March 2018, and no MMBTUs of natural gas under derivative contracts used to hedge our forward natural gas purchases. Also at March 31, 2017, the Company also had a net short (selling) position of 245,000 bushels of soybeans under derivative contracts used to hedge its forward soybean contract purchases forecasted to settle for various delivery periods through January 2018. These derivatives have not been designated as an effective hedge for accounting purposes. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding as disclosed above. The following table provides details regarding the gains and (losses) from our derivative instruments in the statements of operations, none of which are designated as hedging instruments, for the three and six months ended March 31, 2017 and 2016:

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	March 31, 2017			March 31, 2016			March 31, 2017			March 31, 2016
Corn Derivative Contracts	$	162,724		$	828,182		$	556,596		$	3,006,696
Ethanol Derivative Contracts	1,384,770			301,107			1,346,560			221,901
Natural Gas Derivative Contracts	62,845			(176,481		)	133,830			(262,737		)
Soybean Derivative Contracts	(2,208		)	—			(2,208		)	—
Totals	$	1,608,131		$	952,808		$	2,034,778		$	2,965,860

At March 31, 2017, we had forward corn purchase contracts at various fixed prices for various delivery periods through December 2018 for approximately 2.4% of our expected production needs for the next 21 months, forward dried distiller grains sales contracts at various fixed prices for various delivery periods through May 2017 for approximately 36.4% of expected production for the next 2 months and forward corn oil contracts at various prices for various delivery periods through April 2017 for approximately 76.9% of expected production for the next 1 month.

Also, at March 31, 2017, we had forward natural gas contracts for approximately 40.1% of expected purchases for the next 24 months at various prices for various delivery periods through March 2019. As contracts are delivered, any gains or losses realized will be recognized in our gross margin. Additionally, March 31, 2017, the Company had forward soybean purchase contracts for various period for delivery through March 2018. These soybean contracts will be marked to market as the contract periods expire. This means that any gains or losses realized will be recognized in our gross margin at each month end until they are delivered upon.  Due to the volatility and risk involved in the commodities market, we cannot be certain that these gains or losses will be realized. 

As corn prices move in reaction to market trends and information, our income statement will be affected depending on the impact such market movements have on the value of our derivative instruments. Depending on market movements, crop prospects and weather, these price protection positions may cause immediate adverse effects, but are expected to produce long-term positive growth for us.

A sensitivity analysis has been prepared to estimate our exposure to ethanol, distillers grains, corn oil, corn and natural gas price risk. Market risk related to these factors is estimated as the potential change in income resulting from a hypothetical 10% adverse change in the average cost of our corn and natural gas and average ethanol, distillers grains and corn oil prices as of March 31, 2017 net of the forward and future contracts used to hedge our market risk. The volumes are based on our expected use and sale of these commodities for a one year period from March 31, 2017. The results of this analysis, which may differ from actual results, are approximately as follows:

26

	Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price as of March 31, 2017		Approximate Adverse Change to Income
Natural Gas	1,516,000	MMBTU	10	%		$	484,000
Ethanol	132,000,000	Gallons	10	%		$	21,120,000
Corn	39,734,000	Bushels	10	%		$	14,344,000
DDGs	296,000	Tons	10	%		$	2,722,000
Corn Oil	29,202,000	Pounds	10	%		$	818,000

Liability Risk

We participate in a captive reinsurance company (the “Captive”).  The Captive re-insures losses related to worker's compensation, commercial property and general liability.  Premiums are accrued by a charge to income for the period to which the premium relates and is remitted by our insurer to the captive re-insurer.  The Captive re-insures catastrophic losses in excess of a predetermined amount.  Our premiums are structured such that we have made a prepaid collateral deposit estimated for losses related to the above coverage.  The Captive insurer has estimated and collected an amount in excess of the estimated losses but less than the catastrophic loss limit insured by the Captive. We cannot be assessed in excess of the amount in the collateral fund.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

Our management is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.

Our management, including our Chief Executive Officer (the principal executive officer), Jeff Painter, along with our Chief Financial Officer (the principal financial officer), William Dartt, have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of March 31, 2017.  Based on this review and evaluation, these officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission; and to ensure that the information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our second quarter of our 2017 fiscal year that have materially affected, or are likely to materially affect, our internal control over financial reporting.

PART II.     OTHER INFORMATION

Item 1. Legal Proceedings

Patent Infringement

On June 27, 2008, we entered into a Tricanter Purchase and Installation Agreement with ICM, Inc. for the construction and installation of a Tricanter Oil Separation System. On February 12, 2010, GS CleanTech Corporation ("GS CleanTech") filed a lawsuit in the United States District Court for the Southern District of Indiana, claiming that the Company's operation of the oil recovery system manufactured and installed by ICM, Inc. infringes a patent claimed by GS CleanTech. GS CleanTech sought royalties and damages associated with the alleged infringement, as well as attorney's fees from the Company. GS CleanTech subsequently filed actions against at least fourteen other ethanol producing companies for infringement of its patent rights, adding several additional patents. GS CleanTech successfully petitioned for the cases to be joined in a multi-district litigation ("MDL")

27

which was assigned to the United States District Court for the Southern District of Indiana (Case No. 1:10-ml-02181). We subsequently answered and counterclaimed that the patent claims at issue are invalid and that the Company is not infringing.

Motions for summary judgment were filed by the defendants, including the Company, and GS CleanTech. Meanwhile, GS Cleantech filed suit against another group of defendants which were joined with the MDL. On October 23, 2014, the United States District Court granted summary judgment finding that all of the patents claimed by GS CleanTech were invalid and that the Company had not infringed. In addition, on September 15, 2016, the United States District Court granted summary judgment finding that the patents were invalid due to inequitable conduct before the US Patent and Trademark Office by the inventors and their attorneys. We expect that GS CleanTech will appeal the rulings on the motions for summary judgment.

On February 16, 2010, ICM, Inc. agreed to indemnify the Company from and against all claims, demands, liabilities, actions, litigations, losses, damages, costs and expenses, including reasonable attorney's fees arising out of any claim of infringement of patents, copyrights or other intellectual property rights by reason of our purchase and use of the oil recovery system and agrees to defend the Company. Several of the other defendants also use equipment and processes provided by ICM, Inc. ICM, Inc. has, and we expect it will continue, to vigorously defend itself and the Company in this lawsuit and in any appeal filed by GS CleanTech. If GS CleanTech were to be successful in any appeal filed and allowed to continue to pursue its claims, we estimate that damages, if awarded, would be based on a reasonable royalty to, or lost profits of, GS CleanTech. Because of its rulings, it seems unlikely that the District Court would deem the case exceptional. However, in the event it would be deemed to be exceptional, attorney's fees may be awarded and are likely to be $1,000,000 or more. ICM, Inc. has also agreed to indemnify us. However, in the event that damages were to be awarded, if ICM, Inc. does not fully indemnify us for any reason, we could be liable and could also be required to cease use of our oil separation process and seek out a replacement or cease oil production altogether.

Item 1A.    Risk Factors

There have been no material changes in the risks that we face since the date when we filed our Annual Report on Form 10-K.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

None.

Item 5.Other Information

None.

Item 6. Exhibits.

(a) The following exhibits are filed as part of this report.

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Exhibit No.	Exhibit
31.1	Certificate Pursuant to 17 CFR 240.13a-14(a).*
31.2	Certificate Pursuant to 17 CFR 240.13a-14(a).*
32.1	Certificate Pursuant to 18 U.S.C. Section 1350.*
32.2	Certificate Pursuant to 18 U.S.C. Section 1350.*
10.1	Tenth Amendment of First Amended and Restated Construction Loan Agreement with First National Bank of Omaha dated effective February 28, 2017.*
10.2	Disbursing Agreement with First National Bank of Omaha dated effective February 28, 2017.*
10.3	Construction Note with First National Bank of Omaha dated effective February 28, 2017.*
10.4	Third Amendment of First Amended and Restated Construction Loan Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement with First National Bank of Omaha dated effective February 28, 2017.*
101	The following financial information from Cardinal Ethanol, LLC's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Balance Sheets as of March 31, 2017 and September 30, 2016, (ii) Condensed Statements of Operations for the three and six months ended March, 2017 and 2016, (iii) Condensed Statements of Cash Flows for the six months ended March 31, 2017 and 2016, and (iv) the Notes to Condensed Unaudited Financial Statements.**

*    Filed herewith.

**    Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CARDINAL ETHANOL, LLC
Date:	May 8, 2017	/s/ Jeff Painter
		Jeff Painter
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:	May 8, 2017	/s/ William Dartt
		William Dartt
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EX-10.1

TENTH AMENDMENT OF

FIRST AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT

THIS TENTH AMENDMENT OF FIRST AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT (“Amendment”) is made as of the 28^th day of February, 2017 between FIRST NATIONAL BANK OF OMAHA, a national banking association ("Lender") and CARDINAL ETHANOL, LLC, an Indiana limited liability company (“Borrower”). This Amendment amends that certain First Amended and Restated Construction Loan Agreement dated June 10, 2013 between Lender and Borrower (as amended, the "Loan Agreement”).

WHEREAS, pursuant to the Loan Agreement and the other Loan Documents, Lender extended the Loans described in the Loan Agreement to Borrower;

WHEREAS, pursuant to that certain First Amendment of First Amended and Restated Construction Loan Agreement dated October 8, 2013, the date on which the Declining Revolving Credit Loan began to revolve was amended from April 8, 2014 to October 8, 2013, the Maximum Availability of the Declining Revolving Credit Loan was modified and the Loan Agreement was otherwise modified as provided for therein;

WHEREAS, pursuant to that certain Second Amendment of First Amended and Restated Construction Loan Agreement dated February 27, 2014, the Maximum Availability of the Declining Revolving Credit Loan was fixed at $5,000,000, the Reduction Dates applicable to the Declining Revolving Credit Loan were deleted, the Fixed Charge Coverage Ratio covenant was deleted, the distribution covenant was deleted, the Termination Date of the Revolving Credit Loan was extended to February 28, 2015 and the Loan Agreement was otherwise amended as provided for therein; and

WHEREAS, pursuant to that certain Third Amendment of First Amended and Restated Construction Loan Agreement dated February 28, 2015, the Termination Date of the Revolving Credit Loan was extended to March 31, 2015;

WHEREAS, pursuant to that certain Fourth Amendment of First Amended and Restated Construction Loan Agreement dated March 31, 2015, the Termination Date of the Revolving Credit Loan was extended to February 28, 2016 and the interest rate and Non-Use Fee applicable to the Revolving Credit Loan were modified;

WHEREAS, pursuant to that certain Fifth Amendment of First Amended and Restated Construction Loan Agreement dated July 23, 2015 (the “Fifth Amendment”), the maximum principal amount of the Declining Revolving Credit Loan was increased to finance the Improvements and permit Construction Advances up to May 31, 2016 to fund such Improvements, the Termination Date of the Declining Revolving Credit Loan was extended to February 28, 2021, the interest rate applicable to the Declining Revolving Credit Loan was modified, the Fixed Charge Coverage Ratio was modified, the Capital Expenditures covenant was modified and the Loan Agreement was otherwise amended as provided for therein;

21S995803.3

WHEREAS, pursuant to that certain Sixth Amendment of First Amended and Restated Construction Loan Agreement dated February 28, 2016, the Termination Date of the Revolving Credit Loan was extended to February 28, 2017;

WHEREAS, pursuant to that certain Seventh Amendment of First Amended and Restated Construction Loan Agreement dated May 6, 2016, the Completion Date was extended to July 31, 2016, the definition of Permitted Liens was modified and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, pursuant to that certain Eighth Amendment of First Amended and Restated Construction Loan Agreement dated July 31, 2016, the Construction Advances were converted to amortizing term debt, the maximum principal amount of the Declining Revolving Credit Loan was reduced to $5,000,000 and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, pursuant to that certain Ninth Amendment of First Amended and Restated Construction Loan Agreement dated September 1, 2016, the repayment terms of the Term Loan were modified as provided for therein;

WHEREAS, Borrower desires to construct a soybean receiving and train loading facility on the Project (the “Soybean Facility”) and has requested that Lender extend construction and permanent financing in the maximum principal amount of $10,000,000 to Borrower to finance the Soybean Facility;

WHEREAS, Borrower and Lender desire to modify the Loan Agreement as provided for in this Amendment to provide for a construction loan in the maximum principal amount of $10,000,000 to finance the construction of the Soybean Facility, converting to a term loan in the maximum principal amount of such construction loan on the date it converts to such term loan; and

WHEREAS, in addition to the extension of the construction and term loan described above, Borrower and Lender desire to amend the Loan Agreement to extend the Termination Date of the Revolving Credit Loan from February 28, 2017 to February 28, 2018, modify the Fixed Charge Coverage Ratio and add a Debt Service Coverage Ratio, to modify the capital expenditures covenant and otherwise amend the Loan Agreement as provided for in this Amendment;

NOW, THEREFORE, in consideration of the amendments of the Loan Agreement set forth below, the mutual covenants herein and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree to amend the Loan Agreement as follows:

2

21S995803.3

1.Capitalized terms used in this Amendment which are defined in the Loan Agreement shall have the meanings given to them in the Loan Agreement, as such definitions may be amended by this Amendment.

2.The fourth Recital to the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

WHEREAS, under the terms and conditions of this Agreement, Lender has approved and is extending to Borrower (i) a revolving line of credit in the maximum principal amount of $15,000,000 (the “Revolving Credit Loan”), (ii) a revolving credit loan in the maximum principal amount of $5,000,000 (the “Declining Revolving Credit Loan”), (iii) a Term Loan in the original principal amount of $15,000,000 (the “Term Loan”) and (iv) a construction loan in the maximum principal amount of $10,000,000 (the “Construction Loan”) converting to a term loan in the principal amount of the Construction Loan outstanding on the date of conversion (the “Soybean Facility Term Loan”).

3.Exhibit A of the Loan Agreement referencing the Commitments is hereby deleted in its entirety and the Exhibit A attached to this Amendment is inserted in lieu thereof.

4.The defined term “Termination Date” in Section 1.01 of the Loan Agreement is hereby amended by deleting the reference to February 28, 2017 as the Termination Date of the Revolving Credit Loan and inserting in lieu thereof February 28, 2018.

5.Section 2.01(a) of the Loan Agreement is hereby amended by inserting new subsection (v) thereto as follows:

(v)Construction Loan. During the Soybean Facility Construction Period, Lender agrees, subject to the terms and conditions of this Agreement, to make Soybean Facility Construction Advances to the Borrower to be used to pay or reimburse Borrower for Soybean Facility Improvements from time to time in accordance with the Soybean Facility Construction Advance procedures provided for in this Agreement and the Soybean Facility Disbursing Agreement to and including October 31, 2017 up to a maximum principal amount at any time outstanding equal to the Construction Loan Commitment; provided, however, that Lender shall not be obligated to make such a Soybean Facility Construction Advance if: (1) the aggregate amount of all Soybean Facility Construction Advances then outstanding exceeds, or would exceed if the requested Soybean Facility Construction Advance were to be made, the Construction Loan Commitment, (2) the then applicable conditions to the making of such Soybean Facility Construction Advance have not been satisfied or waived, or (3) any Default or Event of Default exists or would result from the making of such Soybean Facility Construction Advance.

3

21S995803.3

The Construction Loan is not revolving and the Borrower may not borrow, repay and re-borrow under the Construction Loan.

6.The first sentence of Section 2.01(a)(iv) of the Loan Agreement is hereby amended by inserting the following at the end thereof:

“and (5) Soybean Facility Construction Advances shall be used to fund or reimburse Borrower for the construction of the Soybean Facility Improvements in accordance with the Soybean Facility Budget approved by the Lender.

7.Section 2.02 of the Loan Agreement is hereby amended by inserting new subsection (iii) to the end of such Section 2.02:

(iii)Construction Loan.

(a) Soybean Facility Construction Advances. Borrower will submit to Lender for Lender’s approval, the Soybean Facility Plans, Soybean Facility Budget and the Soybean Facility Construction Schedule. If the Borrower desires to reallocate funds from one budget category to another or modify, amend or supplement the Soybean Facility Budget, in either case in excess of $100,000.00 individually or in excess of $500,000.00 when aggregated with all other reallocations or modifications, then Borrower shall notify the Lender of such reallocation or modification of the Soybean Facility Budget by submitting to the Lender for the Lender’s approval a Budget Variance Report showing the details of such reallocation, modification, amendment or supplement. The Lender may approve or disapprove of such Budget Variance Report in the Lender’s discretion, but the Lender’s approval shall not be unreasonably withheld. Notwithstanding the foregoing, the Borrower agrees that all cost over runs on the Soybean Facility Improvements shall be paid solely by the Borrower. Borrower will be entitled to apply any previously achieved savings in any completed category of the Soybean Facility Budget to pay for any such cost over runs. In addition, the Borrower may from time to time request that the contingency fund line item in the Soybean Facility Budget be reallocated to pay needed costs of the Soybean Facility Improvements. Such requests shall be subject to the Lender’s written approval in its reasonable discretion, which shall not be unreasonably withheld; however, the Borrower will be entitled to advances from the contingency fund line item in the Soybean Facility Budget so long as at all times there are sufficient funds remaining from all sources identified in the sources and uses of funds in the Soybean Facility Budget to complete the construction of the Soybean Facility Improvements in the reasonable discretion of the Lender.

During the Soybean Facility Construction Period, Borrower may request a Soybean Facility Construction Advance to be used to pay or

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reimburse Borrower for the cost of Soybean Facility Improvements by submitting to the Lender and Title Company a draw request set forth on AIA forms G702 and G703 or in another form approved by the Lender and the Title Company (each, a "Draw Request"). Each Draw Request shall be signed by a duly authorized officer of Borrower, shall show the percentage of completion of construction of the Soybean Facility Improvements and shall set forth by Soybean Facility Budget category and in such detail as may be required by the Lender the amounts expended and/or costs incurred for work done and materials incorporated into the Soybean Facility Improvements in accordance with the Soybean Facility Budget and Soybean Facility Construction Schedule. Each Draw Request will be reviewed by the Construction Inspector and must be submitted to the Lender and Title Company at least five (5) Business Days prior to the requested funding date of the Soybean Facility Construction Advance, which must be a Business Day. Each Draw Request will constitute a certification, representation and warranty that the conditions precedent for Soybean Facility Construction Advances set forth in this Agreement and the Soybean Facility Disbursing Agreement have been satisfied. Soybean Facility Construction Advances shall not be made more frequently than twice per month and are subject to the conditions precedent set forth in this Agreement.

Each Draw Request shall be limited to amounts equal to (i) the total of costs actually incurred and paid or owing by the Borrower to the date of such Draw Request for work performed, services provided or materials and equipment incorporated in the Soybean Facility Improvements as described in the Soybean Facility Budget, plus (ii) the cost of materials and equipment not incorporated in the Soybean Facility Improvements, but delivered to and suitably stored at the Project site, plus (iii) prepayments for materials and equipment when prepayment is required by the manufacturer or supplier or, with the Lender’s prior written approval, when such prepayment results in a material financial benefit to the Borrower; plus (iv) any other hard or soft costs which are consistent with the Soybean Facility Budget approved by the Lender, as modified or supplemented by any Budget Variance Report approved by the Lender, for which a Soybean Facility Construction Advance is available under this Agreement and as demonstrated in the Soybean Facility Budget; less, (v) prior disbursements for such costs and from the Construction Loan or the Borrower’s own funds for such costs.

Soybean Facility Construction Advances will be delivered to the Borrower under the terms of the Disbursing Agreement, the terms and conditions of which are hereby incorporated by reference. Unless otherwise authorized by the Lender, each Soybean Facility Construction Advance shall be disbursed by wire transfer from the Lender to the Title Company in an account established by the Title Company for the sole

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purpose of funding the cost of Soybean Facility Improvements. All Soybean Facility Construction Advances will be considered and deemed received by the Borrower upon receipt by the Title Company. The Borrower irrevocably assigns to the Lender and grants to the Lender a security interest in, as additional security for the performance of the Obligations, its interest in all funds held by the Title Company pursuant to this Agreement and the Soybean Facility Disbursing Agreement, whether or not disbursed, all funds deposited by the Borrower with the Lender under this Agreement, all reserves, including deferred payments, deposits, refunds, cost savings, and payments of any kind relating to the construction of the Soybean Facility Improvements and, to the extent assignable, all Permits obtained for the lawful construction of the Soybean Facility Improvements.

8.Section 2.03 of the Loan Agreement is hereby amended by inserting new subsection (d) as follows:

(d)The Construction Loan shall be evidenced by a promissory note payable to Lender in the maximum amount of the Construction Loan Commitment (as amended, renewed, restated, replaced, consolidated or otherwise modified from time to time, the “Construction Note”).

9.Section 2.04 of the Loan Agreement is hereby amended by inserting new subsection (e) as follows:

(e)Construction Loan.

(i) Accrued and unpaid interest on the Construction Loan will be paid monthly, in arrears, on the first (1st) day of each month until the Soybean Facility Completion Date, when all accrued but unpaid interest on the Construction Loan is due and payable in full;

(ii) Subject to Soybean Facility Loan Conversion, the outstanding principal balance the Construction Loan is due and payable in full on the Soybean Facility Completion Date. On or before the Soybean Facility Completion Date and as conditions precedent to Soybean Facility Loan Conversion, Borrower shall provide the following to the Lender:

(1) a certificate from a duly authorized officer of the Borrower certifying Substantial Completion of the Soybean Facility Improvements, along with such supporting evidence as the Lender may require;

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(2) copies of all Permits relating to the Soybean Facility Improvements;

(3) Borrower has paid the Lender all of the Obligations which have accrued to such date, and any other fees and expenses provided for in this Agreement which have not been previously paid and are due under the terms of this Agreement;

(4) Borrower has paid all accrued and outstanding interest on the outstanding principal balance of the Construction Loan as of the Soybean Facility Loan Conversion;

(5) Borrower has submitted to the Lender and the Title Company final lien waivers from each Contractor related to the Soybean Facility Improvements with invoices which exceed $20,000.00; and

(6) such other documents, instruments, and certificates as the Lender may reasonably request.

Upon the Lender’s determination that each of the foregoing is in form and substance satisfactory to the Lender in its sole discretion or is waived by Lender in writing, and provided no Default or Event of Default has occurred and is continuing, the aggregate principal balance the Construction Loan then outstanding will be converted into amortizing term debt (the “Soybean Facility Term Loan”) by Lender and repaid in equal monthly principal installments calculated on a seven (7) year amortization schedule (with such principal amount and installment amount to be established by amendment to this Agreement acceptable to Lender and evidenced by a term note (the “Soybean Facility Term Note”) acceptable to Lender), commencing on the first day of the month following the Soybean Facility Loan Conversion to February 28, 2023 (the “Soybean Facility Term Loan Maturity Date”), the maturity date of the term note evidencing such principal when such principal balance then outstanding, together with accrued and unpaid interest, will be due and payable in full. During such amortizing period, accrued interest will be paid in arrears, on the same dates that the principal installments are due. Borrower may prepay in full or in part principal on such amortizing term debt without penalty or premium, provided that partial prepayments will be applied to the principal installments due in the inverse order of their due dates. The date the outstanding principal balance of the Construction Loan converts to amortizing term debt is called the “Soybean Facility Loan Conversion”.

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10.The defined term "Applicable Margin" in Section 1.01 of the Loan Agreement is hereby amended by inserting new subsections (e) and (f) at the end thereof as follows:

“, (e) in the case of the Construction Loan, 2.9%, and (f) in the case of the Soybean Facility Term Loan, 2.9%.

11.The defined term "Loans" in Section 1.01 of the Loan Agreement is hereby amended by inserting the following at the end thereof:

“, the Construction Loan and Soybean Facility Construction Advances thereunder and, if extended, the Soybean Facility Term Loan.

12.The defined term "Notes" in Section 1.01 of the Loan Agreement is hereby amended by inserting “, and the Construction Note, and if the Soybean Facility Term Loan is extended, the Soybean Facility Term Note” after “Declining Revolving Credit Note”.

13.The defined term "Project" in Section 1.01 of the Loan Agreement is hereby amended by inserting “, and the soybean receiving and train loading facility to be constructed on the Real Estate with the proceeds of the Construction Loan” after “ethanol plant constructed on the Real Estate”.

14.The definition of the term “LIBOR Rate” in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

“LIBOR Rate” means the London Interbank Offered Rate for U.S. Dollar deposits published in The Wall Street Journal as the Three (3) Month LIBOR Rate with respect to the Construction Loan, Declining Revolving Credit Loan, Term Loan and Soybean Facility Term Loan and as the One (1) Month LIBOR Rate with respect to the Revolving Credit Loan. The LIBOR Rate will be adjusted and determined without notice to the Borrower as set forth herein, as of the date of the Revolving Credit Note, Term Note, Construction Note, Soybean Facility Term Note and Declining Revolving Credit Note, and on the first (1st) day of every third calendar month thereafter with respect to the Declining Revolving Credit Note, Construction Note, Soybean Facility Term Note and Term Note and on the first day of each calendar month thereafter with respect to the Revolving Credit Note (each such date, an “Interest Rate Change Date”) to the Three (3) Month LIBOR Rate with respect to the Declining Revolving Credit Note, Construction Note, Soybean Facility Term Note and Term Note and to the One (1) Month LIBOR Rate with respect to the Revolving Credit Note, which is published in The Wall Street Journal as the reported rate for the date that is two London Banking Days prior to each Interest Rate Change Date. The published LIBOR Rate will be rounded upwards to the next higher one one hundredth (1/100th) of one percent (1%). If the initial Advance under the Revolving Credit

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Note or the initial funding of the Declining Revolving Credit Note, Construction Note, Soybean Facility Term Note and Term Note occurs on any day other than the first London Banking Day of a month, the initial LIBOR Rate to be in effect until the beginning of the next succeeding month shall be that Three (3) Month LIBOR Rate or One (1) Month LIBOR Rate, as applicable, in effect on the date that is two London Banking Days prior to the first day of the month in which the Revolving Credit Note, Term Note, Construction Note, Soybean Facility Term Note and Declining Revolving Credit Note are dated. If for any reason the LIBOR Rate published by The Wall Street Journal is no longer available and/or the Lender is unable to determine the LIBOR Rate for any Interest Rate Change Date, the Lender may, in its sole discretion, select an alternate source to determine the LIBOR Rate and will provide notice to Borrower of the source selected. The LIBOR Rate determined as set forth above shall be referred to herein as the “Index”. The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of the Loans, the Lender and Borrower will agree upon a substitute index. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate change will not occur more often than each month on the first (1st) day of each month with respect to the Revolving Credit Loan and once every three months on the first (1st) day of the applicable month with respect to the Declining Revolving Credit Loan, Construction Loan, Soybean Facility Term Loan and Term Loan. Borrower understands that Lender may make loans based on other rates as well. The Index for the one month LIBOR Rate currently is .78% per annum and the Index for the three month LIBOR Rate currently is 1.04% per annum. If at any time the Index is less than zero, then it shall be deemed zero for purposes of calculating the interest rate on the Loans.

15.The definition of the term “Budget Variance Report” in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

"Budget Variance Report" means a report submitted by the Borrower to the Lender requesting a reallocation of funds from one budget category in the Soybean Facility Budget to another or a modification, amendment or supplement the Soybean Facility Budget, in either case in excess of $100,000.00 individually or $500,000 in the aggregate. Each Budget Variance Report shall include the details of such reallocation, modification, amendment or supplement.

16.The definition of the term “Construction Inspector” in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

"Construction Inspector" means a Person appointed or designated by the Lender from time to time to inspect the progress of the construction of the

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Soybean Facility Improvements and the conformity of the construction of the Soybean Facility Improvements with the Soybean Facility Budget and the Soybean Facility Construction Schedule, and to perform such other acts and duties for such purposes or other reasonable purposes as the Lender may from time to time deem appropriate or as may be required by the terms of this Agreement.

17.The definition of the term “Contractor” in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

“Contractor” means each Person who has provided or will provide labor and/or materials to the construction of the Soybean Facility Improvements, including all Persons who have the right to file any Lien against the Project arising out of the Soybean Facility Improvements.

18.The definition of the term “Substantial Completion” in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

"Substantial Completion" means the occurrence of all of the following events with respect to the Soybean Facility Improvements: (a) all Soybean Facility Improvements are completed other than minor punch list items, are paid for in full free of all mechanic’s, labor, materialmen’s and other similar Lien claims, and the Lender has received a complete and total lien waiver from each Contractor of the Soybean Facility Improvements whose charges exceed $20,000.00 for all labor, materials and services on the Soybean Facility Improvements or Project; (b) said completion has been certified by the applicable Contractor, Construction Inspector and the Borrower, and no material punch-list items remain to be completed; (c) all applicable requirements, rules, orders and regulations of any Governmental Authority, including zoning, land use, building and environmental requirements, rules and regulations, and all private restrictions and covenants, have been complied with or satisfied and that unconditional certificates of occupancy (if required by a Governmental Authority) for all of such Soybean Facility Improvements have been issued; (d) Borrower has obtained all Permits, and entered into all agreements necessary or appropriate to operate the Soybean Facility Improvements at maximum capacity; and (e) all insurance required pursuant to the Loan Documents is in full force and effect.

19.Section 2.07 of the Loan Agreement is hereby amended by inserting new subsection (e) at the end thereof as follows:

(e)Borrower may prepay in full or in part principal on the Soybean Facility Term Loan without penalty or premium, provided that partial prepayments will be applied to the principal installments due in the inverse order of their due dates.

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20.Section 2.14 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

Section 2.14Allocation of Collateral Proceeds. Lender and the Borrower acknowledge and agree that the Collateral secures the Obligations on a cross-collateralization basis. However, the Borrower and Lender agree that the proceeds from any realization on the Mortgaged Property (other than inventory and accounts receivable and the proceeds thereof) as defined in the Mortgage, equipment and fixtures will be first applied to the Lender's costs and expenses payable by Borrower pursuant to Section 7.05 and any other costs and expenses of foreclosure or otherwise realizing on such Mortgaged Property, equipment and fixtures, next to the Borrower’s obligations to Lender under the Construction Loan, next to Borrower’s obligations under the Term Loan, next to Borrower’s obligations under the Soybean Facility Term Loan, next to Borrower’s obligations to Lender under the Declining Revolving Credit Loan, next to the Borrower’s obligations to Lender under the Revolving Credit Loan and last to any other Obligations which remain outstanding. Proceeds from any realization on such Mortgaged Property, equipment and fixtures will only be applied to the Revolving Credit Loan and such other Obligations if any proceeds remain after the full and indefeasible payment of the Construction Loan, Term Loan, Soybean Facility Term Loan and Declining Revolving Credit Loan. In addition, the Borrower and Lender acknowledge and agree that the proceeds from any realization on Collateral consisting of inventory, accounts receivable, Margin Account Equity and the products and proceeds thereof will be applied first to the Lender's costs and expenses payable by Borrower pursuant to Section 7.05 and any other costs and expenses of foreclosure or otherwise realizing on such inventory, accounts receivable and Margin Account Equity Collateral, next to the Borrower’s obligations to Lender under the Revolving Credit Loan, next to the Borrower’s obligations to Lender under the Declining Revolving Credit Loan, next to the Borrower’s obligations to Lender under the Construction Loan, next to Borrower’s obligations to Lender under the Term Loan, next to Borrower’s obligations to Lender under the Soybean Facility Term Loan and last to any other Obligations which remain outstanding. With respect to the proceeds of any other Collateral not specified in this Section above, the proceeds of such Collateral will be applied first to the Lender's costs and expenses payable by Borrower pursuant to Section 7.05 and any other costs and expenses of foreclosure or otherwise realizing on such Collateral and next to the Obligations in such order and priority as is determined by Lender or required by applicable law.

21.The Loan Agreement is hereby amended by inserting new Section 2.15 into the Loan Agreement as follows:

2.15Additional Soybean Facility Construction Advance Procedures.

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(a) Initial Soybean Facility Construction Advance. As a condition to Borrower submitting the initial Draw Request and Lender’s obligation to make the initial Soybean Facility Construction Advance, the Lender shall be furnished with the following documents or instruments or satisfaction of the following conditions:

(i) interim lien waivers or other evidence of payment acceptable to the Lender and/or the Title Company from all Persons who have furnished labor, materials and/or services to the construction of the Soybean Facility Improvements whose invoices are in excesses of $20,000, covering work performed, materials and equipment supplied and services rendered to the date of the initial Draw Request;

(ii) Borrower has obtained and been issued all Permits, including, but not limited to, building permits, required for the construction of the Soybean Facility Improvements;

(iii) Borrower has submitted to Lender, and Lender has approved, the Soybean Facility Budget, Soybean Facility Construction Schedule, and the Soybean Facility Plans; and

(iv) Borrower has submitted to the Lender a Draw Request in the form and with the supporting detail required in this Agreement.

(b) Requirements for All Soybean Facility Construction Advances. As a condition to Borrower submitting any Draw Request and Lender’s obligation to make the requested Soybean Facility Construction Advance, with each Draw Request the Borrower shall furnish to the Lender the following documents or instruments or shall satisfy the following conditions:

(i) Borrower has submitted to the Lender a Draw Request in the form and with the supporting detail required in this Agreement and signed by the Borrower;

(ii) Borrower shall submit written Lien waivers from the applicable Contractor for work done, materials furnished and/or services provided by them which were paid for by the immediately preceding Draw Request

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and whose invoices exceed $20,000, along with all supporting invoices;

(iii) supporting invoices for the work done, materials furnished and/or services provided to be paid with the requested Soybean Facility Construction Advance;

(iv) if required by Lender or the Title Company, approval of the Draw Request by the Construction Inspector;

(v) the terms and conditions with respect to Soybean Facility Construction Advances contained in the Soybean Facility Disbursing Agreement have been satisfied; and

(vi) such other documents and matters as are reasonably required by the Lender.

The Lender may approve Soybean Facility Construction Advances for stored materials or equipment required for construction of the Soybean Facility Improvements, provided that such materials or equipment are securely stored, properly inventoried and marked to indicate they are the property of the Borrower, if stored offsite are stored in a bonded warehouse or facility where the Person who has control of such facility bears the risk of loss until delivery to the Project and comply with such other reasonable requirements as may be imposed by the Lender.

22.Section 3.01(w) of the Loan Agreement is hereby by inserting the following at the end thereof:

To the best of the Borrower's knowledge, neither the construction of the Soybean Facility Improvements nor the operation thereof violates or will upon completion violate any building or other Permit or license necessary for the construction and/or operation of the Soybean Facility Improvements or any condition, easement, right-of-way, covenant or restriction affecting the Real Estate or any portion thereof. All utilities and services necessary for the construction and operation of the Soybean Facility Improvements are available to the Project or will be brought to the Project in connection with the construction of the Soybean Facility Improvements. The Real Estate is duly and validly zoned to permit the construction and operation of the Soybean Facility Improvements. In addition, Borrower has obtained all agreements, consents and approvals necessary to construct and operate any railroad tracks, spurs or other improvements constructed or installed as part of the Soybean Facility Improvements from all railroads necessary to construct, access and operate on such tracks.

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23.Section 3.01 of the Loan Agreement is hereby further amended by inserting new subsections (z) and (aa) at the end thereof:

(z)The Soybean Facility Budget sets forth all expenses and costs incurred or estimated to be incurred and reserves to be established and maintained in connection with the construction and completion of the Soybean Facility Improvements, including a sources and uses of funds. The Soybean Facility Budget further identifies all costs and expenses of the Soybean Facility Improvements which may be funded with the Construction Loan. To the best of the Borrower's knowledge and belief, the Soybean Facility Budget is accurate and complete.

(aa)All contracts relating to the construction of the Soybean Facility Improvements are each in full force and effect and no material default thereunder has occurred or will occur upon the giving of notice, the passage of time or both. The Borrower shall perform all of its obligations under all contracts relating to the construction and operation of the Soybean Facility Improvements. The Borrower hereby collaterally assigns to the Lender Soybean Facility Plans and all other contracts relating to the construction and operation of the Soybean Facility Improvements.

24.Section 4.02 of the Loan Agreement is hereby amended by inserting the following at the end thereof:

“The Borrower will further permit, and will cooperate with the Lender in arranging, inspections from time to time of the Soybean Facility Improvements by the Construction Inspector or other representatives of the Lender. The Borrower acknowledges that any Construction Inspector Reports, or other reports and inspections conducted or generated by the Lender or its agents or representatives, shall be made for the sole benefit of the Lender and not for the benefit of the Borrower or any third party, and the Lender does not assume any liability, responsibility or obligation to the Borrower or any third party by reason of such Construction Inspector Reports, inspections or reports, and the Borrower may not rely on any such Construction Inspector Reports, inspections or reports. The costs and expenses of such Construction Inspector Reports, audits and inspections made by the Lender shall be paid or reimbursed by the Borrower.”

25.The Loan Agreement is hereby amended by inserting the following as a new paragraph at the end of Section 4.07 of the Loan Agreement:

The Borrower shall also diligently construct the Soybean Facility Improvements in material compliance with applicable Permits, the Soybean Facility Plans, and all approvals, consents and agreements relating thereto. The Borrower shall, at its own expense, remedy in a manner satisfactory to the Lender such portions or aspects of the construction of the Soybean Facility Improvements as the Lender may reasonably determine are not in compliance (in any material

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respect) with such Permits, Soybean Facility Plans, approvals, consents or agreements, or any applicable laws or regulations. The Borrower will operate the Project and Soybean Facility Improvements in accordance with the Permits, approvals, consents, agreements and applicable law. The Borrower will permit the Lender, Construction Inspector and any other representative of the Lender to review all Change Orders relating to the Soybean Facility Improvements, to inspect all work and materials relating to the Soybean Facility Improvements for which payment is required, to submit progress inspection reports relating to the Soybean Facility Improvements, and to discuss its affairs, finances and accounts with any of its officers and with its independent certified public accountants, all at the expense of the Borrower and at such reasonable times and as often as the Lender may reasonably request. The Borrower will promptly notify Lender of any default or imminent default under any material contract relating to the construction or operation of the Soybean Facility Improvements.

26.Section 4.09 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

Section 4.09.Fixed Charge Coverage Ratio/Debt Service Coverage Ratio.For any reporting period, if Borrower’s Working Capital is less than $25,000,000 after giving effect to all distributions permitted in this Agreement made during such reporting period, the Borrower must maintain a Fixed Charge Coverage Ratio, measured at the end of each full applicable fiscal quarter on a rolling four quarter average basis, of no less than 1.15:1.0. However, for any reporting period, if Borrower’s Working Capital is equal to or more than $25,000,000 after giving effect to all distributions permitted in this Agreement made during such reporting period, the Borrower must maintain a Debt Service Charge Coverage Ratio, measured at the end of each full applicable fiscal quarter on a rolling four quarter average basis, of no less than 1.25:1.0 in lieu of the Fixed Charge Coverage Ratio. The foregoing Fixed Charge Coverage Ratio or Debt Service Coverage Ratio, as applicable, shall be tested by the Lender quarterly on a fiscal quarter rolling four quarter average basis.

27.Section 4.10 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

Section 4.10.Capital Expenditures. During the Borrower’s 2017 fiscal year, the Borrower shall not make any expenditures for fixed or capital assets if, after giving effect thereto, the aggregate of all such expenditures by the Borrower exceeds $7,000,000 during such 2017 fiscal year and during any fiscal year thereafter, the Borrower shall not make any expenditures for fixed or capital assets if, after giving effect thereto, the aggregate of all such expenditures by the Borrower exceeds $5,000,000 during such fiscal year, in all cases unless agreed to in advance by the Lender in writing; provided, however, that the cost of Soybean Facility Improvements shall be excluded from the calculation of capital expenditures until the Soybean Facility Loan Conversion.

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28.Exhibit D of the Loan Agreement containing the Compliance Certificate form is hereby deleted in its entirety and the Exhibit D attached to this Amendment is inserted in lieu thereof.

29.Section 4.14 of the Loan Agreement entitled “Redemptions; Distributions” is hereby reinserted into the Loan Agreement at Section 4.14 as follows:

Section 4.14.Redemptions; Distributions. The Borrower shall not purchase or acquire units or shares of its outstanding membership interests without the prior written consent of Lender. Further, the Borrower may not make or pay without the prior written consent of Lender distributions or dividends to its members or shareholders if (i) an Event of Default has occurred and is continuing, or (ii) the Borrower is not in compliance with the financial covenants contained in Sections 4.08 and 4.09 of this Agreement, both before and after giving effect to the payment of such distribution or dividend.

30.Section 6.01(c) of the Loan Agreement is hereby amended by reinserting Sections 4.09 and 4.14 to such Section 6.01(c).

31.The Loan Agreement is hereby amended by inserting the following as a new paragraph at the end of Section 4.18 of the Loan Agreement:

No extra work, materials or equipment shall be ordered or allowed and no change or amendment shall be made to the contracts relating to the construction of the Soybean Facility Improvements (all such extra work, equipment or materials and changes or amendments being referred to in this Agreement as "Change Orders") without the prior written consent of the Lender, which consent shall not be unreasonably withheld, except that such consent shall not be required with respect to individual Change Orders involving a cost of $100,000 or less until the aggregate cost of Change Orders not required to be consented to by the Lender exceeds $500,000. Upon Lender’s request, the Borrower will furnish the Lender with copies of all Change Orders, regardless of amount. In addition, whenever Borrower or Lender determines that the sum of the undisbursed portion of the Construction Loan and other funds available to Borrower will not be sufficient to fully complete the Soybean Facility Improvements in accordance with the Soybean Facility Plans, whether such deficiency is the result of changes in the Soybean Facility Plans or otherwise, Borrower will deposit in an escrow fund to be established with the Lender an amount equal to the amount of the deficiency as determined by the Lender. Borrower will deposit such funds within three days after demand by Lender. No further Soybean Facility Construction Advances will be disbursed until those funds are deposited by Borrower in the escrow fund. If Borrower can demonstrate to the reasonable satisfaction of the Lender that the total cost to complete the Soybean Facility Improvements has decreased or that Borrower has obtained or has available sufficient funds to again complete the Soybean Facility Improvements in accordance with the Soybean Facility Plans and Soybean Facility Budget, and provided no Event of Default has

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occurred and is continuing, then the Lender will release such funds contained in the escrow account which exceed the funds necessary to fully complete construction of the Soybean Facility Improvements in accordance with the Soybean Facility Plans.

32.Section 6.01 of the Loan Agreement is hereby amended by inserting new subsections (w), (x) and (y) as follows:

(w)The Borrower fails in any material respect to comply with, keep or perform any of its obligations, covenants, warranties, agreements or undertakings under any contract relating to or governing the construction of the Soybean Facility Improvements, or the Borrower suffers any condition to exist which would provide a basis for any other party to any such contract to terminate its obligations thereunder or to declare a default thereunder, and such failure or conditions continues to exist beyond any applicable grace and/or notice and cure period; or

(x)The Soybean Facility Improvements are not completed by the Soybean Facility Completion Date or the Soybean Facility Loan Conversion fails to occur on or before the end of the Soybean Facility Construction Period; or

(y)The Project or Soybean Facility Improvements are materially destroyed by fire or other casualty and the loss, in the reasonable judgment of the Lender, is not adequately covered by insurance actually collected or in the process of collection.

33.Section 6.02 of the Loan Agreement is hereby amended by inserting the following at the end thereof as a new paragraph:

In addition, upon the occurrence of a Default or Event of Default, the Lender may enter upon the Real Estate along with the Lender’s contractors and their equipment, if allowed under applicable law, and take possession thereof, together with the Project and the Soybean Facility Improvements then in the course of construction, and proceed either in its own name or in the name of the Borrower, as the attorney-in-fact of the Borrower (which authority is coupled with an interest and is irrevocable by the Borrower) to complete or cause to be completed the Soybean Facility Improvements, at the cost and expense of the Borrower. If the Lender elects to complete or cause to be completed the Soybean Facility Improvements, it may do so according to the Soybean Facility Plans or any other plans in Lender’s possession or according to such changes, alterations or modifications in and to such plans as the Lender may reasonably deem appropriate; and the Lender may enforce or cancel any contracts let by the Borrower relating to construction of the Soybean Facility Improvements, and/or let other contracts which in the Lender’s reasonable judgment, the Lender deems advisable; and the Borrower shall forthwith turn over and duly assign to the Lender, as the Lender may from time to time require, contracts not already

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assigned to the Lender relating to construction of the Soybean Facility Improvements, blueprints, shop drawings, bonds, building permits, bills and statements of accounts pertaining to the Soybean Facility Improvements, whether paid or not, and any other instruments or records in the possession of Borrower pertaining to the Soybean Facility Improvements and/or the Project. In addition, the Lender and its contractors and agents may utilize all or any part of the labor, materials, equipment, fixtures and articles of personal property contracted for by the Borrower, whether or not previously incorporated into the Soybean Facility Improvements or Project, and the Lender may pay, settle or compromise all bills or claims which may become a Lien against the Real Estate and/or the Project or Soybean Facility Improvements, or any portion thereof. The Borrower shall be liable under this Agreement to pay to the Lender, on demand, any amount or amounts reasonably expended by the Lender in so completing the Soybean Facility Improvements together with any reasonable costs, charges, or expenses incident thereto or resulting therefrom (including reasonable attorneys’ fees and costs), all of which shall be secured by the Loan Documents. In the event that a proceeding is instituted against the Borrower for recovery and reimbursement of any moneys expended by the Lender in connection with the completion of the Soybean Facility Improvements, a statement of such expenditures, verified by the affidavit of an officer of the Lender, shall be prima facie evidence of the amounts so expended and of the appropriateness and advisability of such expenditures; and the burden of proving to the contrary shall be upon the Borrower. The Lender shall have the right to apply any funds which it agrees to disburse hereunder to bring about the completion of the Soybean Facility Improvements or to protect any Collateral or the perfection or priority thereof, and to pay the costs thereof; and if such money so agreed to be disbursed is insufficient, in the sole judgment of the Lender, to complete the Soybean Facility Improvements or protect such Collateral, the Borrower agrees to promptly deliver and pay to the Lender such sum or sums of money as the Lender may from time to time demand for the purpose of completing the Soybean Facility Improvements, protecting the Collateral or of paying any liability, charge or expense which may have been incurred or assumed by the Lender under or in performance of this Agreement or any other Loan Document, or for the purpose of completing the Soybean Facility Improvements or protecting any Collateral. The Lender may apply the undisbursed amount of the Construction Loan Commitment to bring about the completion of construction of the Soybean Facility Improvements, and/or protect any Collateral and to pay the costs thereof; and if such funds are insufficient, in the sole judgment of the Lender, to complete construction of the Soybean Facility Improvements or protect any Collateral, the Borrower agrees to promptly deliver and pay to the Lender such sum or sums of money as the Lender may from time to time demand for the purpose of completing construction of the Soybean Facility Improvements, protecting any Collateral or of paying any liability, charge or expense which may have been incurred or assumed by the Lender under or in performance of this Agreement, or for the purpose of completing construction of the Soybean Facility Improvements. However, it is expressly understood and agreed that in no event shall the Lender be obligated, or liable in any way to

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complete the Soybean Facility Improvements, protect any Collateral or to pay for the costs of construction thereof.

34.Section 1.01 of the Loan Agreement is hereby amended by inserting the following definitions, in the appropriate alphabetical order:

“Construction Loan Commitment” means the amount set opposite Lender’s name under the column entitled “Construction Loan Commitment” on Exhibit A to this Agreement.

“Construction Note” has the meaning provided in Section 2.03(d) of this Agreement.

“Debt Service Coverage Ratio” means, for any period, the ratio derived when comparing (a) EBITDA to (b) Borrower’s scheduled payments of principal and interest on the Loans during the applicable reporting period.

"Soybean Facility Budget" means the schedule of values and breakdown of hard costs, soft costs and other costs for construction of the Soybean Facility Improvements in the Soybean Facility Budget attached to this Agreement as Schedule 2.02(ii)(1)(A), as the same may be revised from time to time with the written approval of the Lender.

"Soybean Facility Completion Date" means October 31, 2017, or such other date as is approved in writing by the Lender.

"Soybean Facility Construction Advance" means an advance on the Construction Loan pursuant to the applicable terms of this Agreement.

“Soybean Facility Construction Period” means the period from February 28, 2017 to the Soybean Facility Completion Date during which time the Soybean Facility Improvements will be constructed and Soybean Facility Construction Advances will be available to Borrower.

"Soybean Facility Construction Schedule" means the schedule for commencement and completion of the construction of the Soybean Facility Improvements attached to this Agreement as Schedule 2.02(ii)(2)(A) approved by the Lender as the same may be revised from time to time with the written approval of the Lender.

“Soybean Facility Disbursing Agreement” means the Disbursing Agreement among the Lender, Borrower and the Title Company, as amended, restated, supplemented or otherwise modified from time to time, relating to the disbursement of Soybean Facility Construction Advances to the Borrower.

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"Soybean Facility Improvements" means the construction, equipping and installation of a soybean receiving and train loading facility on the Real Estate and related improvements, including but not limited to railroad spurs and tracks.

“Soybean Facility Loan Conversion” has the meaning given to such term in Section 2.04(e) of this Agreement.

“Soybean Facility Plans” means the final working plans for completion of the Soybean Facility Improvements set forth in any agreement with any architect and/or in the Soybean Facility General Contract, including all drawings, specifications, materials listings, details and manuals thereunder.

“Soybean Facility Term Loan” has the meaning given to such term in Section 2.04(e) of this Agreement.

“Soybean Facility Term Note” has the meaning given to such term in Section 2.04(e) of this Agreement.

“Soybean Facility Term Loan Maturity Date” means the earliest to occur of the following: (a) February 28, 2023, or (b) such earlier date upon which the outstanding balance of the Soybean Facility Term Loan becomes due and payable in full, whether by acceleration or otherwise.

35.Pursuant to that certain Warranty Deed dated October 28, 2016, Borrower acquired the real estate described therein (the “Additional Land”) from Melinda K. Carpenter. In further consideration of the amendments provided for in this Amendment, Borrower and Lender desire to amend the Mortgage to include the Additional Land to the definition of Land and Mortgaged Property encumbered by the Mortgage.

36.This Amendment shall not be effective until Lender has received each of the following (each in form and substance acceptable to Lender) or the following conditions have been satisfied:

(a) This Amendment, duly executed by Borrower and Lender;

(b) The Construction Note required in this Amendment above executed and delivered by Borrower in favor of Lender;

(c) A Third Amendment of First Amended and Restated Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement executed and delivered by Borrower in favor of Lender, which includes the encumbrance of the Additional Land;

(d) The Soybean Facility Disbursing Agreement, in form and substance acceptable to Lender, duly executed and delivered by Borrower, Lender and the Title Company;

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21S995803.3

(e) A Secretary’s Certificate and resolutions in form and substance acceptable to Lender;

(f) A true, complete and accurate copy of the Soybean Facility Plans;

(g) A true, complete and accurate copy of the Soybean Facility Budget and Soybean Facility Construction Schedule, all in form and substance acceptable to Lender; and

(h) Such other documents and matters as are reasonably required by Lender.

37.In consideration of the amendments to the Loan Agreement provided for in this Amendment, Borrower shall pay to the Lender a fee equal to $20,000. Such fee will be deemed fully earned and nonrefundable as the closing of this Amendment. This fee shall compensate Lender for the costs associated with the origination, structuring, processing, approving and closing of the transactions contemplated by this Amendment, including, but not limited to, administrative and general overhead costs, but not including any out-of-pocket or other costs, fees or expenses for which Borrower has agreed to reimburse Lender or any other persons pursuant to any other provision of this Amendment or the other Loan Documents.

38.Except as modified in this Amendment, all other terms, provisions, conditions and obligations imposed under the terms of the Loan Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified, affirmed and certified by Borrower and Lender. Borrower hereby ratifies and affirms the accuracy and completeness of all representations and warranties contained in the Loan Documents. Borrower represents and warrants to the Lender that the representations and warranties set forth in the Loan Agreement, and each of the other Loan Documents, are true and complete on the date hereof as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, such representation or warranty shall be true and correct as of such specific date), and as if each reference in the Loan Agreement to “this Agreement” included references to this Amendment. Borrower represents, warrants and confirms to the Lender that no Default or Events of Default is now existing under the Loan Documents and that no event or condition exists which would constitute a Default or an Event of Default under the Loan Agreement or any other Loan Document. Nothing contained in this Amendment either before or after giving effect thereto, will cause or trigger a Default or an Event of Default under any Loan Document. To the extent necessary, the Loan Documents are hereby amended consistent with the amendments provided for in this Amendment.

39.This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. This

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21S995803.3

Amendment shall be governed by and construed in accordance with the laws of the State of Nebraska, exclusive of its choice of laws rules.

40.The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided in this Amendment, operate as a waiver of any right, power or remedy of the Lender under any of the Loan Documents, nor, except as expressly provided in this Amendment, constitute a waiver or amendment of any provision of any of the Loan Documents. Upon and after the execution of this Amendment by each of the parties hereto, each reference in the Loan Agreement to “this Agreement”, “hereunder”, “hereof” or words or phrases of like import referring to the Loan Agreement, and each reference in the other Loan Documents to the “Loan Agreement”, “thereunder”, “thereof” or words or phrases of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as modified by this Amendment. This Amendment and the rights evidenced by this Amendment shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto, and shall be enforceable by any such successors and assigns. Borrower will pay on demand all costs and expenses incurred by Lender in connection with the preparation, execution, delivery, filing, and administration of this Amendment (including, without limitation, legal fees incurred in connection with the preparation of this Amendment and advising Lender as to its rights, and the cost of any credit verification reports or field examinations of Borrower's properties or books and records). Borrower's obligations to Lender under this Section shall survive the termination of this Amendment or the Loan Agreement and the repayment of Borrower's Obligations to Lender under the Loan Agreement and other Loan Documents.

[SIGNATURE PAGE FOLLOWS]

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21S995803.3

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment on the date first written above.

FIRST NATIONAL BANK OF OMAHA, a national banking association

By:/s/ Amos Alstrom        

Title:    Vice President            

CARDINAL ETHANOL, LLC, an Indiana limited liability company

By:/s/ William Dartt        

Title:CFO                

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21S995803.3

Exhibit A

COMMITMENTS

Lender	Revolving Credit Loan Commitment	Declining Revolving Credit Loan Commitment	Term Loan Commitment*	Construction Loan Commitment
First National Bank of Omaha	$15,000,000	$5,000,000.00	$15,000,000	$10,000,000

*The Term Loan Commitment represents the original commitment amount of the Term Loan

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21S995803.3

Exhibit D

COMPLIANCE CERTIFICATE

This Compliance Certificate, dated as of ______________ (the “Certificate”), is delivered pursuant to Section 4.12(f) of the First Amended and Restated Construction Loan Agreement, dated as of June 10, 2013 (the “Credit Agreement”), between Cardinal Ethanol, LLC (the "Borrower") and First National Bank of Omaha (the "Lender"), as the same may be amended from time to time. Capitalized terms used but not defined in this Certificate have the meanings given to them in the Credit Agreement.

The undersigned certifies as follows:

1.The undersigned is the President, controller or treasurer of the Borrower and is authorized to execute and deliver this certificate on its behalf.

2.Attached are the financial statements of the Borrower as of and for the period and for the fiscal year-to-date ended on __________________ (the "Current Financials").

3.The Current Financials have been prepared in accordance with GAAP and otherwise in accordance with the terms of the Credit Agreement.

4.Events of Default (check one):

___ The undersigned does not have knowledge of the occurrence of a Default or Event of Default under the Credit Agreement.

___ The undersigned has knowledge of the occurrence of a Default or Event of Default under the Credit Agreement and attached hereto is a statement of the facts with respect thereto.

5.Financial Covenants:

(a) Pursuant to Section 4.08 of the Credit Agreement, as of __________, the Borrower's Working Capital was $____________, which [satisfies] [does not satisfy] the requirement in such Section that, beginning on ____________, 20__, and at all times thereafter, the Borrower maintains an excess of current assets over current liabilities (plus the Maximum Availability at such time) of not less than $15,000,000.

(b) Pursuant to Section 4.09 of the Credit Agreement as of the fiscal quarter ending ___________, Borrower’s Working Capital is $__________________, and the [Fixed Charge Coverage

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21S995803.3

Ratio/Debt Service Coverage Ratio], for the fiscal quarter then ended, was ___ to 1, which [satisfies] [does not satisfy] the requirement in such Section that such ratio not exceed 1.15 to 1 if the Fixed Charge Coverage Ratio is applicable and 1.25 to 1 if the Debt Service Coverage Ratio is applicable.

(c) Pursuant to Section 4.10 of the Credit Agreement, for the fiscal year-to-date period ending _________, the Borrower has made capital expenditures in an aggregate amount of $________, which [satisfies] [does not satisfy] the requirement in such Section that the Borrower not make any expenditures for fixed or capital assets if, after giving effect thereto, the aggregate of all such expenditures by the Borrower exceeds $7,000,000 during the Borrower’s 2017 fiscal year and $5,000,000 during any fiscal year thereafter.

(d) Pursuant to Section 4.13 of the Credit Agreement the Borrower is restricted from incurring any Debt other than the Permitted Debt. Subsection (e) of the definition of Permitted Debt permits Debt for Borrowed Money in an aggregate principal amount outstanding at any time not to exceed $250,000. The Borrower has Debt for Borrowed Money under Subsection (e) of the definition of Permitted Debt outstanding in the sum of $____________ which is [in compliance with] [is not in compliance with] such Subsection as of the fiscal quarter ending ___________.

6.Attached hereto are all relevant facts in reasonable detail to evidence, and the computations of the financial covenants referred to above. These computations were made in accordance with GAAP applied on a basis consistent with the accounting principles reflected in the annual financial statements delivered to the Lender dated as of ______________.

7.Borrower [is in compliance with] [is not in compliance with] Borrower's Risk Management Policy approved by the Lender. [If not in compliance, add: Attached hereto is a statement of the facts with respect to Borrower's noncompliance with such Risk Management Policy and the plans Borrower has developed to rectify such noncompliance.]

8.This Certificate may be conclusively relied upon by the Lender. This Certificate may be validly executed and delivered by fax or other electronic means, and by use of multiple counterpart signature pages.

[signature page(s) to follow]

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21S995803.3

IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate as of the date first written above.

CARDINAL ETHANOL, LLC

By: ________________________________

Name:

Title:

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21S995803.3

EX-10.2

DISBURSING AGREEMENT

THIS DISBURSING AGREEMENT (“Agreement”) is made and entered into as of February 28, 2017 by and among Cardinal Ethanol, LLC, an Indiana limited liability company (“Borrower”); First National Bank of Omaha, a national banking association (“Lender”) and Stewart Title Company (“Title Company”).

RECITALS:

A.    Borrower and Lender have entered into a First Amended and Restated Construction Loan Agreement dated June 10, 2013 (as amended, the “Credit Agreement”) as amended by that certain Tenth Amendment of First Amended and Restated Construction Loan Agreement of even date with this Agreement between Borrower and Lender (the “Tenth Amendment”), pursuant to which the Lender will extend the Construction Loan (“Loan”) in the total maximum amount of $10,000,000.00 which Borrower may use to draw Soybean Facility Construction Advances for the construction of the Soybean Facility Improvements to the Project upon the Real Estate described on Exhibit A attached hereto (“Property”), and Lender will extend to Borrower the other financial accommodations described in the Credit Agreement.

B.    Title Company has endorsed Lender’s current title policy (the policy, as endorsed, referred to herein as the “Title Policy”) relating to Lender’s Mortgage on the Property as Collateral Agent for the Lenders as Policy No. M9702 - 798048.

C.    Title Company has underwritten the Title Policy and the endorsements.

D.    Borrower and Lender have requested the Title Company to supervise the disbursement of Soybean Facility Construction Advances under the Credit Agreement, in accordance with the terms thereof and of this Agreement.

AGREEMENT:

In consideration of the above recitals, of the Lender’s agreement to lend funds to Borrower under the Credit Agreement, and of the mutual agreements set forth below, the parties agree as follows:

1.     All capitalized terms not otherwise defined in this Agreement have the meanings given to them in the Credit Agreement. As used in this Agreement, the term “Advance” shall mean a Soybean Facility Construction Advance under the Construction Loan used to pay for Soybean Facility Improvements or other sources shown in the Soybean Facility Budget referenced below, and Contractor shall collectively mean any Person supplying labor or materials to or with respect to the Soybean Facility Improvements, their successors and permitted assigns.

2.    Borrower shall submit to the Title Company a copy of the Soybean Facility Budget. If requested by the Title Company, Borrower shall also furnish to the Title Company a

21T0035

copy of the Borrower's construction contract for the construction of the Soybean Facility Improvements with any Contractor (collectively, the “Construction Contract”) and the contracts of any other Contractor known to Borrower. Borrower shall keep the Title Company and Lender advised at all times of the names of all Contractors, and of the type of work, materials or services and of the dollar amount covered by each of their respective contracts relating to the Soybean Facility Improvements to the extent known to Borrower. It is understood that only Contractors whose names, contract descriptions and, after a request therefor, contracts have been furnished to Lender and Title Company shall be entitled to receive Advances under this Agreement. It is understood that each Contractor will be responsible for directly paying all subcontractors and material suppliers such Contractor employs in connection with the construction of the Soybean Facility Improvements.

3.    Borrower may obtain Advances for disbursement to Contractors in an amount not to exceed (a) the total of approved construction costs actually incurred and paid or owing by Borrower to the date of the applicable Draw Request for work performed and materials and equipment incorporated in the Soybean Facility Improvements, plus (b) the cost of materials or equipment not incorporated in the Soybean Facility Improvements but delivered to and suitably stored at the Project site in accordance with the terms of the Credit Agreement, plus (c) prepayments for materials or equipment for the Soybean Facility Improvements in accordance with the terms of the Credit Agreement, less (d) prior Advances for such approved construction costs from the Construction Loan or the Borrower’s equity for such approved construction costs and less (e) any retainage required or permitted to be withheld by Borrower in connection with an Advance pursuant to the Construction Contract and the Credit Agreement. Lender shall not be required to make the final Advance for the payment of the full amount of each Contractor’s contract until Lender, in its reasonable discretion, is satisfied that all of the work covered by such contract has been completed, and all requirements set forth in the Credit Agreement have been complied with in all material respects, including the delivery of a certificate of completion and final lien waivers to Lender, Borrower and Title Company.

4.    Lender agrees that it will deliver the executed amendment of the Mortgage required in the Tenth Amendment, when received by Lender, to the Title Company for recording. Lender also agrees that it will Advance under the Credit Agreement through the Title Company as provided in this Agreement, except for Advances made directly to Borrower, any of which shall be made consistently with terms of the Credit Agreement.

5.    Whenever Borrower desires to obtain an Advance, Borrower shall submit to Lender a signed Draw Request, in the form and with the detail and other items required in the Credit Agreement (for the purposes of collecting lien waivers and providing the title insurance provided for in this Agreement), with copies to the Construction Inspector and to Title Company, at least five (5) Business Days prior to the date on which the requested Advance is to be made (“Advance Date”), and complete any other preconditions to extension of an Advance contained in the Credit Agreement, or any other Loan Document. The Draw Request must be signed by Borrower’s authorized representative. Borrower shall also simultaneously submit to the Lender and Title Company the following:

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(a)    A written lien waiver from each Contractor for work done and materials supplied by it which were paid for pursuant to the next preceding Draw Request and whose invoices are in excess of $20,000.00 along with copies of all invoices supporting the Draw Request, in the form required by Lender and/or the Title Company. Such waivers shall be accompanied by a schedule listing all disbursements made from the preceding Advance and the recipients thereof.

(b)    Invoices, Budget Variance Report and such other documents as may be reasonably requested by Lender or the Title Company to establish the cost or value of the Soybean Facility Improvements for which Advances are to be and have been made, and the progress of construction of the Improvements, or as may be required by the Credit Agreement.

The Title Company shall search the appropriate real estate records. The Title Company shall give Lender written notice if any intervening liens, including, but not limited to mechanics’ liens, are disclosed (other than those expressly listed in the Title Policy or subsequent amendments thereto previously given to Lender). If any such intervening liens or other matters, which in Lender’s reasonable judgment jeopardize or adversely affect the Lenders’ security interest in the Project, are disclosed, the Title Company shall refrain from making further disbursements until Lender notifies the Title Company that such intervening liens or other matters have been waived by Lender, satisfied or insured over by the Title Company in a manner acceptable to Lender. Upon demand of Lender, Borrower shall cause any such liens or other matters to be satisfied of record, as provided in the Credit Agreement. The Title Company shall promptly notify Lender if the Title Company believes any Advance has been made without effective lien waivers from the Contractor or Contractors providing for such goods or services as the Advance is intended to make payment.

On each Advance Date, if all the terms and conditions of the Credit Agreement and this Agreement have been complied with by Borrower, to the reasonable satisfaction of Lender, if no Event of Default exists under the Credit Agreement, and if Lender has approved the Draw Request, Lender shall advance to the Title Company, in a manner satisfactory to the Title Company and Lender, the principal amount of the requested Advance (less any required retainage and less amounts payable to and advanced by Lender to itself). The Title Company shall, as promptly as possible thereafter, if all of the conditions of this Agreement have been complied with in a manner satisfactory to the Title Company and Lender, and if the Title Company has not received notice from Lender that an Event of Default exists under the Credit Agreement, disburse the proceeds so received from Lender by delivering to the applicable Contractor entitled to receive such proceeds, by check, wire transfer, or automated clearinghouse transfer, the amounts set forth in such Draw Request.

6.    The provisions of this Agreement specified in paragraph 5 shall not apply with respect to Construction Loan proceeds to be disbursed for the items listed below, which may be disbursed in fullupon submission of a Draw Request listing such items signed by Borrower or Lender, and/or the following special documentation, if any, to Lender and the Title Company (unless said disbursement is made to Lender), or as otherwise provided by the Credit Agreement:

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ITEM SPECIAL DOCUMENTATION	SPECIAL DOCUMENTATION
Lender charges (interest, fees, etc.) Attorneys’ fees (including Lender’s counsel) and Construction Inspector fees Real estate taxes on the Project and Project Site Insurance Premiums Other indirect (non-construction) items	None Copy of Statement Copy of Bill Copy of Statement As specified by Lender and/or Title Company

If Borrower directly pays certain costs of construction, and Lender and Title Company approve, the Title Company may disburse an Advance, advanced for payment of such construction costs, directly to Borrower, as a reimbursement for such payment; provided that all of the other requirements of this Agreement, including but not limited to the presentation of waivers of lien with respect thereto and other conditions in the Credit Agreement, are fulfilled.

If Borrower requires funds for operations and those funds are not for an expense subject to a mechanic’s lien, Borrower may request an Advance of such funds directly from the Lender. Borrower shall provide the Title Company with a copy of each Draw Request submitted directly to Lender.

7.    The Title Company shall keep records showing the names of all Contractors and other payees to whom Advances are made by the Title Company, the date of each disbursement, and the amount of each disbursement, which records may be inspected by Borrower, Title Company and Lender. After completion of the Soybean Facility Improvements, the Title Company will provide to Lender copies of all original lien waivers and any other documentation related to the Draw Request not previously provided to Lender.

8.    If the Title Company shall determine, in its reasonable judgment, that proper documentation to support a given disbursement, as required by this Agreement, has not been furnished, the Title Company shall withhold payment of all or such portion of such disbursement as shall not be so supported by proper documentation, and shall promptly notify Borrower and Lender of the discrepancy in or omission of such documentation. Until such time as such discrepancy or omission is corrected to the satisfaction of the Title Company, it shall withhold such amount. In the event that such discrepancy or omission is not corrected within a reasonable time, the Title Company shall, upon demand of Lender, return such withheld funds to Lender, and the indebtedness of Borrower to Lender under the Credit Agreement shall be credited with the amount of such funds. Such returned funds shall remain available for readvancement under the Credit Agreement, if the requirements thereof and hereof with respect thereto are later met.

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The Title Company shall not be liable for determining, calculating, or confirming any amounts due, or for the failure to determine, calculate, or confirm the above amounts. Further, the Title Company shall not be liable to any party to this Agreement for any interest on undisbursed funds.

9.    Borrower shall be responsible for making inspections of the Soybean Facility Improvements during the course of construction, and shall determine to its own satisfaction that the work done or material supplied by the Contractors to whom disbursements are to be made out of each Advance has been properly done or supplied in accordance with applicable contracts with such Contractors. The Title Company and Lender shall not be required to conduct any inspection of the Soybean Facility Improvements or Project. In addition, any inspection of the Soybean Facility Improvements or Project conducted by or on behalf of the Title Company or Lender shall be for the benefit of the Title Company or Lender, and Borrower shall not be entitled to rely on the results of any such inspection.

10.    It is expressly understood and agreed that neither Lender nor the Title Company assumes any liability or responsibility for the satisfactory completion of the Soybean Facility Improvements, for the adequacy of funds advanced or disbursed by any of them pursuant hereto and to the Credit Agreement to complete the Improvements, for inspections during construction, or for any acts on the part of Borrower or any Contractor to be performed in the construction of the Soybean Facility Improvements.

11.    Any notice required or permitted to be given by any party hereto to any other party hereto under the terms of this Agreement shall be deemed to have been given on the day two (2) business days after the same is deposited with an overnight courier or in the United States mail, registered or certified, return receipt requested, postage prepaid, addressed to the party to which the notice is to be given at the address set forth opposite its name below, or to any other address specified in a notice given by such party to the others not less than ten (10) days prior to the effective date of the address change, or on the day sent if sent by confirmed facsimile:

If to Borrower: Cardinal Ethanol, LLC

1554 North 600 E

Union City, Indiana 47930

Attention: Jeff Painter

If to Lender:                First National Bank of Omaha

1620 Dodge Street, Stop 1029

Omaha, Nebraska 68197-1029

Attention: Amos Alstrom

Facsimile: (402) 633-3519

If to Title Company:            Stewart Title Company

20 East 91^st Street

Indianapolis, Indiana 46240

Attn.: Lisa Ingram

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Facsimile: (317) 818-2410

    12.     All documents required to be delivered by Borrower to Lender or the Title Company pursuant to this Agreement shall be in form and content reasonably acceptable to Lender or the Title Company, as the case may be.

13.     The Title Company agrees that it is the “closer” for the transaction described in this Agreement, and that it will disburse all payments to Contractors or others required by this Agreement, and that for the purposes of the information reporting requirements to the Internal Revenue Service, shall file any informational returns and any other documentation required by the Internal Revenue Code and any regulations and revenue rulings issued by the Internal Revenue Service, and any state information returns required by the applicable state revenue agency relating to the closing of transactions and disbursing Advances. The Title Company agrees to provide copies of such documentation to Lender and other records relating to the disclosure requirements of this paragraph upon written request of Lender. The Title Company agrees to save, indemnify, defend, and hold Lender harmless from any losses, claims, damages, or costs of any kind and nature relating to the Title Company’s failure to comply with the requirements of this paragraph. This indemnity shall be effective notwithstanding any other indemnification provision or exculpation provisions of this Agreement releasing Title Company from responsibilities for actions or omissions of the Title Company in connection with this Agreement.

14.    Borrower agrees to pay the Title Company $200.00 for each disbursement it makes, and an update search of $175 for each disbursement as compensation for its services as described in this Agreement. Additionally, Borrower will pay the Title Company a fee of $10.00 for each check and lien waiver paid to and collected from a Contractor or a contractor employed directly by Borrower.

15.    All of Lender’s rights herein are in addition to, and not substitution of, Lender’s

other rights under the Credit Agreement and other Loan Documents as Agent or a Lender. No parties shall have been deemed to have waived any right hereunder, unless such waiver is in writing signed by the party to be charged thereby. This Agreement shall be governed by the laws of the State of Nebraska, without regard to its conflicts or choice of law provisions. Provided, however, that the law applicable to all questions of lien validity, priority, and satisfaction shall be determined by the substantive law of the State of Indiana. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof.

16.    This Agreement may be executed in any number of counterparts, and by any party on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

BORROWER:

CARDINAL ETHANOL, LLC

By:    /s/ William Dartt            

Title:    CFO                    

LENDER:

FIRST NATIONAL BANK OF OMAHA

By:    /s/ Amos Alstrom            

Title:    Vice President                

TITLE COMPANY:

STEWART TITLE COMPANY

By:    /s/ Lisa L. Ingram            

Title:    Commercial Manager            

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EXHIBIT A

Legal Description:

Tract I, containing 207.623 acres

Situated in the Northeast and Southeast Quarters, both being in Section 17, Township 20 North, Range 15 East, Wayne Township, Randolph County, Indiana, being more particularly described as follows:

Beginning at a mag nail found at the southeast corner of the Southeast Quarter in Indiana State Highway No. 32;

Thence North 89°50’43” West 1993.12 feet (bearing base established from State Plan Coordinates) along the south line of said Southeast Quarter, Indiana State Highway No. 32, to a mag nail set, witness an iron rod set North 00°09’17” East 30.00 feet (all iron rods set are 5/8” rebar with plastic cap stamped “RLS 20400025”);

Thence North 00°09’17” East 332.46 feet, to an iron rod set;

Thence North 89°50’43” West 298.90 feet, to an iron rod set;

Thence South 00°09’17” West 332.46 feet, to a mag nail set on the south line of said Southeast Quarter, witness an iron rod set North 00°09’17” East 30.00 feet;

Thence North 89°50’43” West 502.27 feet, along said south line, in said highway, to a mag nail found at said southwest corner of said Southeast Quarter, witness a concrete post found North 01°31’35” East 30.52 feet;

Thence North 01°31’35” East 2649.53 feet along the west line of said Southeast Quarter, to an iron rod set at the northwest corner of said Quarter (all iron rods set are 5/8” rebar with plastic cap stamped “RLS 20400025”);

Thence North 01°31’35” East 378.81 feet along the west line of said Northeast Quarter, to an iron rod set on the south right-of-way of the New York Central Lines Railroad;

Thence North 77°15’15” East 2775.43 feet along said south right-of-way, to a mag nail set on the east line of said Northeast Quarter, in Randolph County Road 600 East, witness a concrete end post found South 77°15’15” West 21.33 feet;

Thence South 00°40’05” West 1012.22 feet along the east line of said Northeast Quarter, in said County Road to an iron rod found at the southeast corner of said Northeast Quarter;

Thence South 00°23’58” West 2635.04 feet along the east line of said Southeast Quarter, in said road, to the point of beginning, containing 207.623 acres, more or less, there being 43.128 acres, more or less, in the Northeast Quarter and 164.495 acres, more or less, in the Southeast Quarter.

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Tract II, containing 87.598 acres

Situated in the Northwest and Southwest Quarters, both in Section 17, Township 20 North, Range 15 East, Wayne Township, Randolph County, Indiana, being more particularly described as follows:

Beginning at a mag nail found at the southeast corner of the Southwest Quarter, in Indiana State Highway No.32, witness a concrete end post found North 01°31’35” East 30.52 feet;

Thence North 89°42’11” West 1320.67 feet (bearing base established from State Plan Coordinates) along the south line of said Southwest Quarter, in said State Highway, to a mag nail set at the Southeast corner of a 63.39 acre tract as recorded in Instrument 0002247, witness a concrete end post found North 01°12’42” East 30.49 feet;

Thence North 01°12’42” East 2652.77 feet along the east line of said 63.39 acre tract, to an iron rod set on the North line of said Southwest Quarter;

Thence North 01°12’42” East 64.26 feet, entering into the Northwest Quarter, to an iron rod set on the south right-of-way of the New York Central Lines Railroad (all iron rods set with plastic cap stamped 7955);

Thence North 77°15’15” East 1377.82 feet along said right-of-way, to an iron rod set on the east line of said Northwest Quarter;

Thence South 01°31’35” West 378.81 feet along the east line of said Northwest Quarter, to an iron rod set at the southeast corner of said Quarter;

Thence South 01°31’35” West 2649.53 feet along the east line of said Southwest Quarter, to the point of beginning, containing 87.598 acres, more or less, there being 80.807 acres, more or less, in the Southwest Quarter and 6.791 acres, more or less, in the Northwest Quarter.

Tract III, containing 65.25 acres

Situated in the Southwest Quarter, Section 17, Township 20 North, Range 15 East, Wayne Township, Randolph County, Indiana, being part of a 65.25 acre tract, all of a 1½ acre tract and all of two (2) 1 acre tracts, all being described in Instrument No. 20154971, as recorded in the Randolph County Recorder’s Office, being more particularly described as follows:

Beginning at an iron rod found in the southwest corner of said Southwest Quarter, in the intersection of Randolph County Road 500 East and Randolph County Road 125 North;

Thence North 01 degrees 06 minutes 01 seconds East (bearings are based upon GPS Coordinates, Projection Set: USA/NAD83/Indiana East) 1,628.08 feet along the west line of said Quarter, in said Randolph County Road 500 East, to a point, witness an iron rod set South 88 degrees 51 minutes 24 seconds East 20.00 feet (all iron rods set are 5/8” rebar with a plastic cap stamped “Beals-Moore RLS 20400025”);

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Thence South 88 degrees 51 minutes 24 seconds East 444.50 feet along the south line of a 1.5 acre tract, as described in Deed Record Book 268, Page 7, to an iron rod set;

Thence North 01 degrees 06 minutes 01 seconds East 753.56 feet along the east line of said 1.5 acre tract and the east line of a 12 foot Alley, to an iron rod set at the east terminus of the north right of way line of Mill Street;

Thence North 77 degrees 17 minutes 31 seconds East 20.77 feet on the extension of said north right of way line, to an iron rod set on the west line of a 3.577 acre tract, as described in Instrument No. 20063915;

Thence South 01 degrees 06 minutes 01 seconds West 63.40 feet along said west line and the west line of a 0.612 acre tract, as described in Instrument No. 20141086, to an iron rod found with cap stamped “Bergman - 900018”;

Thence North 77 degrees 17 minutes 10 seconds East 888.37 feet along the south line of said 0.612 acre tract, to an iron rod found with cap stamped “Bergman - 900018” on the west line of an 87.598 acre tract, as described in Instrument No. 20066053;

Thence South 01 degrees 13 minutes 04 seconds West 2,516.54 feet along said west line, to the sound line of said Quarter, in Indiana State Highway No. 32, witness a concrete post North 01 degrees 13 minutes 04 seconds East 30.50 feet;

Thence North 89 degrees 41 minutes 58 seconds West 1,322.31 feet along said south line, in said Highway and said Randolph County Road 125 North, to the point of beginning, containing 65.387 acres, more or less, as shown on Drawing No. C-3518, dated 28 October 2016, being subject to the right-of-way of Randolph County Road 500 East, Randolph County Road 125 North and Indiana State Highway No. 32 and to all legal easements of record.

And

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Commencing 40 rods South of the Northwest corner of the Southwest Quarter of Section 17, Township 20 North, Range 15 East, at the southwest corner of Lot 5 in

Alexander’s Addition to Harrisville, Indiana, thence east 29 rods and 2 feet, thence north to the north line of Mill Street, thence northeastwardly with the line of the C.C.C. St. L. Railway to the east line of the west half of the Southwest Quarter, aforesaid; thence south to the south line of said Section 17, thence west 55 rods, thence north 10 rods 10 ½ feet, thence west 15 rods and 14 feet, thence north to a point 41 ½ rods north of the south line of said section, thence west to the section line of said Section 17, thence north 76 2/3 rods to the place of beginning, containing 65.25 acres, in Wayne Township, Randolph County, Indiana.

ALSO, commencing nine and one-fourth (9¼) rods east of the southwest corner of the west half of the west half of the Southwest Quarter of Section Seventeen (17), Township Twenty (20) North, Range Fifteen (15) East, thence east fifteen (15) rods fourteen and one-half (14½) feet; thence north ten (10) rods ten and one-half (10½) feet, thence west fifteen (15) rods fourteen and one-half (14½) feet, thence south ten (10) rods ten and one-half (10½) feet to the place of beginning, containing one (1) acre, more or less.

ALSO, commencing twenty-six (26) rods north of the southwest corner of the West half of the Southwest Quarter of Section Seventeen (17), Township Twenty (20) North, of Range Fifteen (15) East, thence east nine and one-fourth (9¼) rods, thence north seventeen and one-third (171/3) rods; thence west nine and one-fourth (9¼) rods, thence south seventeen and one-third (171/3) rods to the place of beginning, containing one (1) acre more or less.

EXCEPTING THEREFROM: Beginning at the Southwest corner of the Southwest Quarter of Section Seventeen (17), Township Twenty (20) North, Range Fifteen (15) East, thence north on the west section line one thousand five hundred ninety-six (1,596) feet for a beginning point; thence north approximately three hundred eighty (380) feet on the west section line to a point 40 rods south of the Northwest corner of the Southwest Quarter of Section Seventeen (17), Township Twenty (20) North, Range Fifteen (15) East, thence east parallel with the north section line four hundred forty-two (442) feet, thence south parallel with the west section line approximately three hundred eighty (380) feet, thence west parallel with the north section line four hundred forty-two (442) feet, to the place of beginning, containing 3.86 acres, more or less, in Wayne Township, Randolph County, Indiana, including the 1.5 acres, previously deeded in Deed Record 222 at page 515 in the office of the Recorder of Randolph County, Indiana.

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EX-10.3

CONSTRUCTION NOTE

$10,000,000.00      Omaha, Nebraska

February 28, 2017

FOR VALUE RECEIVED, the undersigned, Cardinal Ethanol, LLC, an Indiana limited liability company (“Borrower”), hereby promises to pay to the order of First National Bank of Omaha (together with any subsequent holder hereof, “Lender”) at its offices in Omaha, Nebraska or at such other place as directed by the holder of this Construction Note, on the Soybean Facility Completion Date as defined in the First Amended and Restated Construction Loan Agreement dated as of June 10, 2013, (as the same may be amended, restated, supplemented or otherwise modified from time to time, including, but not limited to that certain Tenth Amendment of First Amended and Restated Construction Loan Agreement of even date with this Construction Note (the “Tenth Amendment”), the “Credit Agreement”), between Borrower and Lender, the aggregate unpaid principal amount of up to Ten Million and No/100 Dollars ($10,000,000.00) or the amount of advances hereunder made by Lender to Borrower under the Construction Loan pursuant to the Credit Agreement, in lawful money of the United States of America in immediately available funds, and to pay interest from the date hereof on the principal amount thereof from time to time outstanding, in like funds, at said office, at the rate or rates per annum and payable on such dates as provided in the Credit Agreement. Borrower may take advances on this Construction Note as provided for in the Tenth Amendment and otherwise in the Credit Agreement and as provided for in the Soybean Facility Disbursing Agreement referenced in the Tenth Amendment.

Borrower promises to pay interest at the post maturity or default rate of interest provided for in the Credit Agreement, on demand, on the terms and conditions set forth in the Credit Agreement. To the extent permitted by law, should legal action or an attorney be utilized to collect any amount due hereunder, Borrower further promises to pay all costs of collection, including the reasonable attorneys’ fees of Lender.

All borrowings evidenced by this Construction Note and all payments and prepayments of the principal hereof and the date thereof will be recorded by Lender in its internal records; provided, that the failure of Lender to make such a notation or any error in such notation will not affect the obligations of Borrower to make the payments of principal and interest in accordance with the terms of this Construction Note and the Credit Agreement.

The aggregate unpaid principal amount hereof plus interest shall become immediately due and payable without demand or further action on the part of Lender upon the occurrence of an Event of Default as set forth under the Credit Agreement or any other Loan Document. If the maturity date of this Construction Note is accelerated as a consequence of an Event of Default, then Lender shall have all the rights and remedies provided for in the Credit Agreement, the other Loan Documents or otherwise available at law or in equity. The rights, powers, privileges, options and remedies of Lender provided in the Credit Agreement, the other Loan Documents or otherwise available at law or in equity shall be cumulative and concurrent, and may be pursued singly, successively or together at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur. No delay or discontinuance in the exercise of any right, power,     

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privilege, option or remedy shall be deemed a waiver of such right, power, privilege, option or remedy, nor shall the exercise of any right, power, privilege, option or remedy be deemed an election of remedies or a waiver of any other right, power, privilege, option or remedy. Without limiting the generality of the foregoing, Lender's waiver of an Event of Default shall not constitute a waiver of acceleration in connection with any future Event of Default. Lender may rescind any acceleration of this Construction Note without in any way waiving or affecting any acceleration of this Construction Note in the future as a consequence of an Event of Default. Lender's acceptance of partial payment or partial performance shall not in any way affect or rescind any acceleration of this Construction Note made by Lender.

All makers and endorsers hereby waive presentment, demand, protest and notice of dishonor, consent to any number of extensions and renewals for any period without notice; and consent to any substitution, exchange or release of collateral, and to the addition or releases of any other party primarily or secondarily liable.

This Construction Note is issued in connection with, is governed by, and is entitled to the benefits of, the Credit Agreement which, among other things, provides for the acceleration of the maturity hereof upon the happening of certain events and collateral securing this Construction Note, all upon the terms and conditions therein specified. Capitalized terms used but not defined in this Construction Note shall have the meaning given to such terms in the Credit Agreement.

THIS CONSTRUCTION NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEBRASKA.

CARDINAL ETHANOL, LLC,

an Indiana limited liability company

By:/s/ William J. Dartt                

Title:CFO                        

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EX-10.4

[CROSS REFERENCE INSTRUMENT NUMBERS 20066145 and 20132845]

THIRD AMENDMENT OF FIRST AMENDED AND RESTATED CONSTRUCTION LOAN MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FINANCING STATEMENT

This THIRD AMENDMENT OF FIRST AMENDED AND RESTATED CONSTRUCTION LOAN MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FINANCING STATEMENT (this “Amendment”) is dated as of February 28, 2017, is by and between CARDINAL ETHANOL, LLC (“Mortgagor”), an Indiana limited liability company whose address is 1554 North 600 E, Union City, Indiana 47390 and FIRST NATIONAL BANK OF OMAHA, a national banking association (“Mortgagee”), whose address is 1620 Dodge St., Stop 1029, Omaha, Nebraska 68197, Attention: Brad Brummund and amends that certain First Amended and Restated Construction Loan Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated June 10, 2013 (as amended, the "Mortgage") to and for the benefit of Mortgagee, encumbering certain property in Randolph County, Indiana legally described on Exhibit A attached hereto and made a part hereof, which Mortgage was recorded with the Randolph County Recorder on June 11, 2013 as Instrument #20132845 and which Mortgage was amended by that certain First Amendment of First Amended and Restated Construction Loan Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated July 23, 2015 and recorded August 12, 2015 as Instrument #20152956 and by that certain Second Amendment of First Amended and Restated Construction Loan Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated July 31, 2016 and recorded November 7, 2016 as Instrument #20164856.

W I T N E S S E T H:

WHEREAS, Mortgagor and Mortgagee have entered into a Tenth Amendment of First Amended and Restated Construction Loan Agreement dated of even date herewith (the “Amendment”) which amends that certain First Amended and Restated Construction Loan

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Agreement dated June 10, 2013 (as amended, the "Loan Agreement") and extends the Construction Loan to Borrower in the maximum principal amount of $10,000,000;

WHEREAS, Mortgagor executed the Mortgage to secure the Obligations (as defined in the Mortgage), which included, without limitation, the repayment of Loans under the Loan Agreement;

WHEREAS, pursuant to that certain Warranty Deed dated October 28, 2016 and recorded on November 1, 2016 with the Randolph County, Indiana Recorder as Instrument Number 20164796, Mortgagor acquired from Melinda K. Carpenter the real estate described therein and legally described in this Amendment in Exhibit A attached hereto as Tract III (the “Additional Land”);

WHEREAS, Mortgagor and Mortgagee desire to include the Construction Loan, and if extended, the Soybean Facility Term Loan which will refinance the Construction Loan as Obligations secured by the Mortgage and to include the Additional Land in the definition of Land and Mortgaged Property encumbered by the Mortgage.

NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Each of the recitals set forth above are incorporated herein as if set forth verbatim.

2.The term “Mortgage”, as defined in the Mortgage, shall be deemed to mean the Mortgage as amended by this Amendment, as the same may be hereafter further amended, supplemented, restated or modified from time to time. Capitalized terms not otherwise defined herein shall have the meaning given to such terms in the Loan Agreement.

3.The first sentence of Recital A of the Mortgage is hereby amended by inserting new subsection (vi) after the end of subsection (v) after the clause “a Term Loan in the principal amount of $15,000,000.00” as follows: “and (vi) a Construction Loan in the maximum principal amount of $10,000,000.00, which upon the Soybean Facility Loan Conversion will convert to the Soybean Facility Term Loan in the principal amount of the Construction Loan outstanding on the date of the Soybean Facility Loan Conversion”. The defined terms “Loans” and “Obligations” in the Mortgage are hereby amended to include the Construction Loan and Soybean Facility Term Loan.

4.Recital B of the Mortgage is hereby amended to delete the reference to February 28, 2021 as the Maturity Date and inserting in lieu thereof February 28, 2023. All other references in the Mortgage or other Loan Documents which refer to the Maturity Date provided for in the Mortgage are hereby amended consistent with the foregoing.

5.The reference to the maximum principal amount of the Loans and Obligations secured by the Mortgage in the paragraph following Recital D to the Mortgage is hereby amended by deleting the reference to $43,889,410.44 and inserting in lieu thereof $44,319,289.00. All other references in the Mortgage to the maximum principal amount secured,

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or any references in the other Loan Documents to the maximum principal amount secured by the Mortgage, are hereby amended consistent with the foregoing.

6.The definitions of the terms “Land” and “Mortgaged Property” in the NOW, THEREFORE paragraph of the Mortgage are hereby amended to include the Additional Land legally described as Tract III in Exhibit A attached to this Mortgage and incorporated herein by reference. The Exhibit A attached to the Mortgage is hereby amended to include the legal description of the Additional Land, which is the legal description titled Tract III in Exhibit A attached to this Amendment.

7.The Mortgage, as amended by this Amendment, shall remain in full force and effect as originally executed and delivered by Mortgagor, except as expressly modified and amended herein. Mortgagor hereby confirms and reaffirms all of its obligations under the Mortgage, as modified and amended by this Amendment.

8.In the event any provision of this Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

9.This Amendment may be executed in any number of counterparts with the same effect as if all of the parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one instrument.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, Mortgagor and Mortgagee have executed and delivered this Amendment as of the date first written above.

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.

MORTGAGOR:

CARDINAL ETHANOL, LLC, an Indiana limited liability company

By: /s/ William Dartt                

Title: Chief Financial Officer            

FIRST NATIONAL BANK OF OMAHA

By: /s/ Amos Alstrom                

Title: Vice President                    

Prepared by and after recording return to:

James M. Pfeffer

Dvorak Law Group, LLC

13625 California St., Suite 110

Omaha, Nebraska 68154

I affirm, under penalties for perjury that I have taken reasonable care to redact each Social Security Number in this document, unless required by law.

__________________________

James M. Pfeffer

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CERTIFICATE OF ACKNOWLEDGMENT

STATE OF INDIANA)

) ss.

COUNTY OF RANDOLPH)

Before me, the undersigned, a Notary Public in and for the county aforesaid, on this 28^th day of February, 2017, personally appeared William Dartt , to me known personally, and who, being by me duly sworn, deposes and says that he is the CFO of CARDINAL ETHANOL, LLC, an Indiana limited liability company, and that said instrument was signed on behalf of said limited liability company by authority of its board of directors and members, and said officer acknowledged said instrument to be the free act and deed of said limited liability company.

/s/ Heather A. Craig                 

Notary Public

My commission expires:

February 1, 2024    

My County of Residence:     Wayne    

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CERTIFICATE OF ACKNOWLEDGMENT

STATE OF NEBRASKA)

) ss.

COUNTY OF LANCASTER)

Before me, the undersigned, a Notary Public in and for the county aforesaid, on this 28^th day of February, 2017, personally appeared Amos Alstrom, to me known personally, and who, being by me duly sworn, deposes and says that he is a Vice President of First National Bank of Omaha, a national banking association, and that said instrument was signed on behalf of said association by authority of its board of directors, and said Vice President acknowledged said instrument to be the free act and deed of said association.

/s/ Lisa D. Colberg                

Notary Public

My commission expires:

7/16/2019    

My County of Residence: Lancaster        

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EXHIBIT A

LEGAL DESCRIPTION

Tract I, containing 207.623 acres

Situated in the Northeast and Southeast Quarters, both being in Section 17, Township 20 North, Range 15 East, Wayne Township, Randolph County, Indiana, being more particularly described as follows:

Beginning at a mag nail found at the southeast corner of the Southeast Quarter in Indiana State Highway No. 32;

Thence North 89°50’43” West 1993.12 feet (bearing base established from State Plan Coordinates) along the south line of said Southeast Quarter, Indiana State Highway No. 32, to a mag nail set, witness an iron rod set North 00°09’17” East 30.00 feet (all iron rods set are 5/8” rebar with plastic cap stamped “RLS 20400025”);

Thence North 00°09’17” East 332.46 feet, to an iron rod set;

Thence North 89°50’43” West 298.90 feet, to an iron rod set;

Thence South 00°09’17” West 332.46 feet, to a mag nail set on the south line of said Southeast Quarter, witness an iron rod set North 00°09’17” East 30.00 feet;

Thence North 89°50’43” West 502.27 feet, along said south line, in said highway, to a mag nail found at said southwest corner of said Southeast Quarter, witness a concrete post found North 01°31’35” East 30.52 feet;

Thence North 01°31’35” East 2649.53 feet along the west line of said Southeast Quarter, to an iron rod set at the northwest corner of said Quarter (all iron rods set are 5/8” rebar with plastic cap stamped “RLS 20400025”);

Thence North 01°31’35” East 378.81 feet along the west line of said Northeast Quarter, to an iron rod set on the south right-of-way of the New York Central Lines Railroad;

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Thence North 77°15’15” East 2775.43 feet along said south right-of-way, to a mag nail set on the east line of said Northeast Quarter, in Randolph County Road 600 East, witness a concrete end post found South 77°15’15” West 21.33 feet;

Thence South 00°40’05” West 1012.22 feet along the east line of said Northeast Quarter, in said County Road to an iron rod found at the southeast corner of said Northeast Quarter;

Thence South 00°23’58” West 2635.04 feet along the east line of said Southeast Quarter, in said road, to the point of beginning, containing 207.623 acres, more or less, there being 43.128 acres, more or less, in the Northeast Quarter and 164.495 acres, more or less, in the Southeast Quarter.

Tract II, containing 87.598 acres

Situated in the Northwest and Southwest Quarters, both in Section 17, Township 20 North, Range 15 East, Wayne Township, Randolph County, Indiana, being more particularly described as follows:

Beginning at a mag nail found at the southeast corner of the Southwest Quarter, in Indiana State Highway No.32, witness a concrete end post found North 01°31’35” East 30.52 feet;

Thence North 89°42’11” West 1320.67 feet (bearing base established from State Plan Coordinates) along the south line of said Southwest Quarter, in said State Highway, to a mag nail set at the Southeast corner of a 63.39 acre tract as recorded in Instrument 0002247, witness a concrete end post found North 01°12’42” East 30.49 feet;

Thence North 01°12’42” East 2652.77 feet along the east line of said 63.39 acre tract, to an iron rod set on the North line of said Southwest Quarter;

Thence North 01°12’42” East 64.26 feet, entering into the Northwest Quarter, to an iron rod set on the south right-of-way of the New York Central Lines Railroad (all iron rods set with plastic cap stamped 7955);

Thence North 77°15’15” East 1377.82 feet along said right-of-way, to an iron rod set on the east line of said Northwest Quarter;

Thence South 01°31’35” West 378.81 feet along the east line of said Northwest Quarter, to an iron rod set at the southeast corner of said Quarter;

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Thence South 01°31’35” West 2649.53 feet along the east line of said Southwest Quarter, to the point of beginning, containing 87.598 acres, more or less, there being 80.807 acres, more or less, in the Southwest Quarter and 6.791 acres, more or less, in the Northwest Quarter.

Tract III, containing 65.25 acres

Situated in the Southwest Quarter, Section 17, Township 20 North, Range 15 East, Wayne Township, Randolph County, Indiana, being part of a 65.25 acre tract, all of a 1½ acre tract and all of two (2) 1 acre tracts, all being described in Instrument No. 20154971, as recorded in the Randolph County Recorder’s Office, being more particularly described as follows:

Beginning at an iron rod found in the southwest corner of said Southwest Quarter, in the intersection of Randolph County Road 500 East and Randolph County Road 125 North;

Thence North 01 degrees 06 minutes 01 seconds East (bearings are based upon GPS Coordinates, Projection Set: USA/NAD83/Indiana East) 1,628.08 feet along the west line of said Quarter, in said Randolph County Road 500 East, to a point, witness an iron rod set South 88 degrees 51 minutes 24 seconds East 20.00 feet (all iron rods set are 5/8” rebar with a plastic cap stamped “Beals-Moore RLS 20400025”);

Thence South 88 degrees 51 minutes 24 seconds East 444.50 feet along the south line of a 1.5 acre tract, as described in Deed Record Book 268, Page 7, to an iron rod set;

Thence North 01 degrees 06 minutes 01 seconds East 753.56 feet along the east line of said 1.5 acre tract and the east line of a 12 foot Alley, to an iron rod set at the east terminus of the north right of way line of Mill Street;

Thence North 77 degrees 17 minutes 31 seconds East 20.77 feet on the extension of said north right of way line, to an iron rod set on the west line of a 3.577 acre tract, as described in Instrument No. 20063915;

Thence South 01 degrees 06 minutes 01 seconds West 63.40 feet along said west line and the west line of a 0.612 acre tract, as described in Instrument No. 20141086, to an iron rod found with cap stamped “Bergman - 900018”;

Thence North 77 degrees 17 minutes 10 seconds East 888.37 feet along the south line of said 0.612 acre tract, to an iron rod found with cap stamped “Bergman - 900018” on the west line of an 87.598 acre tract, as described in Instrument No. 20066053;

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Thence South 01 degrees 13 minutes 04 seconds West 2,516.54 feet along said west line, to the sound line of said Quarter, in Indiana State Highway No. 32, witness a concrete post North 01 degrees 13 minutes 04 seconds East 30.50 feet;

Thence North 89 degrees 41 minutes 58 seconds West 1,322.31 feet along said south line, in said Highway and said Randolph County Road 125 North, to the point of beginning, containing 65.387 acres, more or less, as shown on Drawing No. C-3518, dated 28 October 2016, being subject to the right-of-way of Randolph County Road 500 East, Randolph County Road 125 North and Indiana State Highway No. 32 and to all legal easements of record.

And

Commencing 40 rods South of the Northwest corner of the Southwest Quarter of Section 17, Township 20 North, Range 15 East, at the southwest corner of Lot 5 in

Alexander’s Addition to Harrisville, Indiana, thence east 29 rods and 2 feet, thence north to the north line of Mill Street, thence northeastwardly with the line of the C.C.C. St. L. Railway to the east line of the west half of the Southwest Quarter, aforesaid; thence south to the south line of said Section 17, thence west 55 rods, thence north 10 rods 10 ½ feet, thence west 15 rods and 14 feet, thence north to a point 41 ½ rods north of the south line of said section, thence west to the section line of said Section 17, thence north 76 2/3 rods to the place of beginning, containing 65.25 acres, in Wayne Township, Randolph County, Indiana.

ALSO, commencing nine and one-fourth (9¼) rods east of the southwest corner of the west half of the west half of the Southwest Quarter of Section Seventeen (17), Township Twenty (20) North, Range Fifteen (15) East, thence east fifteen (15) rods fourteen and one-half (14½) feet; thence north ten (10) rods ten and one-half (10½) feet, thence west fifteen (15) rods fourteen and one-half (14½) feet, thence south ten (10) rods ten and one-half (10½) feet to the place of beginning, containing one (1) acre, more or less.

ALSO, commencing twenty-six (26) rods north of the southwest corner of the West half of the Southwest Quarter of Section Seventeen (17), Township Twenty (20) North, of Range Fifteen (15) East, thence east nine and one-fourth (9¼) rods, thence north seventeen and one-third (171/3) rods; thence west nine and one-fourth (9¼) rods, thence south seventeen and one-third (171/3) rods to the place of beginning, containing one (1) acre more or less.

EXCEPTING THEREFROM: Beginning at the Southwest corner of the Southwest Quarter of Section Seventeen (17), Township Twenty (20) North, Range Fifteen (15) East, thence north on the west section line one thousand five hundred ninety-six (1,596) feet for a beginning point; thence north approximately three hundred eighty (380) feet on the west section line to a point 40 rods south of the Northwest corner of the Southwest Quarter of Section Seventeen (17), Township Twenty (20) North, Range Fifteen (15) East, thence east parallel with the north section line four

10

21T0030.2

hundred forty-two (442) feet, thence south parallel with the west section line approximately three hundred eighty (380) feet, thence west parallel with the north section line four hundred forty-two (442) feet, to the place of beginning, containing 3.86 acres, more or less, in Wayne Township, Randolph County, Indiana, including the 1.5 acres, previously deeded in Deed Record 222 at page 515 in the office of the Recorder of Randolph County, Indiana.

This is to certify that the above description was taken from that certain Warranty Deed dated October 28, 2016 from Melinda K. Carpenter to Cardinal Ethanol, LLC recorded on November 1, 2016 as Instrument No. 20164796 which states that such legal description was prepared on October 28, 2016, from a recent survey, and was true and correct to the best of the drafter’s knowledge and belief.

11

21T0030.2

EX-31.1

CERTIFICATION PURSUANT TO 17 CFR 240.13(a)-14(a)

(SECTION 302 CERTIFICATION)

I, Jeff Painter, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cardinal Ethanol, LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 8, 2017	/s/ Jeff Painter
		Jeff Painter, Chief Executive Officer (President and Principal Executive Officer)

EX-31.2

CERTIFICATION PURSUANT TO 17 CFR 240.13(a)-14(a)

(SECTION 302 CERTIFICATION)

I, William Dartt, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cardinal Ethanol, LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 8, 2017	/s/ William Dartt
		William Dartt, Chief Financial Officer (Principal Financial Officer)

EX-32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q in accordance with Rule 15(d)-2 of the Securities Exchange Act of 1934 of Cardinal Ethanol, LLC (the “Company”) for the fiscal quarter ended March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeff Painter, President and Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jeff Painter
Jeff Painter, President and
Principal Executive Officer
Dated:	May 8, 2017

EX-32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q in accordance with Rule 15(d)-2 of the Securities Exchange Act of 1934 of Cardinal Ethanol, LLC (the “Company”) for the fiscal quarter ended March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William Dartt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William Dartt
William Dartt, Chief Financial Officer
(Principal Financial Officer)
Dated:	May 8, 2017

XML

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2017	May 08, 2017
Entity Information [Line Items]
Entity Registrant Name	Cardinal Ethanol LLC
Entity Central Index Key	0001352081
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		14,606

XML

Balance Sheets - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Current Assets
Cash	$ 13,101,228	$ 23,002,139
Restricted cash	831,313	1,460,772
Trade accounts receivable	11,872,592	11,574,847
Miscellaneous receivables	141,260	135,517
Inventories	20,115,081	12,093,469
Prepaid and other current assets	417,720	248,999
Commodity derivative instruments	396,786	14,100
Total current assets	46,875,980	48,529,843
Property, Plant, and Equipment
Property, plant, and equipment, net	105,422,964	104,461,078
Other Assets
Investment	1,096,237	938,251
Total other assets	1,096,237	938,251
Total Assets	153,395,181	153,929,172
Current Liabilities
Accounts payable	3,605,002	2,472,212
Accounts payable- corn	5,364,998	4,761,547
Accrued expenses	1,684,505	1,213,753
Commodity derivative instruments	514,049	341,050
Current maturities of long-term debt	2,915,171	2,888,290
Total current liabilities	14,083,725	11,676,852
Long-Term Debt, net of current maturities	10,476,663	11,932,063
Commitments and Contingencies
Members’ Equity
Members' contributions, net of cost of raising capital,14,606 units authorized, issued and outstanding	70,912,213	70,912,213
Retained earnings	57,922,580	59,408,044
Total members' equity	128,834,793	130,320,257
Total Liabilities and Members’ Equity	$ 153,395,181	$ 153,929,172

XML

Balance Sheets (Parenthetical) - shares	Mar. 31, 2017	Sep. 30, 2016
Members' contributions, units issued and outstanding	14,606	14,606

XML

Condensed Statements of Operations and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Revenues	$ 59,473,502	$ 51,589,923	$ 117,528,266	$ 109,134,959
Cost of Goods Sold	55,018,000	48,600,758	104,468,176	102,994,832
Gross Profit	4,455,502	2,989,165	13,060,090	6,140,127
Operating Expenses	1,434,866	1,486,206	2,621,623	2,855,811
Operating Income	3,020,636	1,502,959	10,438,467	3,284,316
Other Expense
Interest income	0	250	0	250
Interest expense	(134,427)	(84,475)	(270,467)	(143,567)
Miscellaneous income	15,089	3,440	31,335	25,309
Total	(119,338)	(80,785)	(239,132)	(118,008)
Net Income	$ 2,901,298	$ 1,422,174	$ 10,199,335	$ 3,166,308
Weight Average Units Outstanding - basic and diluted	14,606	14,606	14,606	14,606
Net Income Per Unit - basic and diluted	$ 199	$ 97	$ 698	$ 217
Distributions Per Unit	$ 200	$ 300	$ 800	$ 800

XML

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities
Net Income	$ 10,199,335	$ 3,166,308
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	5,142,156	4,566,053
Change in fair value of commodity derivative instruments	(2,034,778)	(2,965,860)
Non-cash dividend income	(157,986)	(114,757)
Change in operating assets and liabilities:
Restricted cash	629,459	1,211,476
Trade accounts receivables	(297,745)	(17,220)
Miscellaneous receivable	(5,743)	218,276
Inventories	(8,021,612)	(6,400,048)
Prepaid and other current assets	(168,721)	103,590
Commodity derivative instruments	1,825,091	1,594,408
Accounts payable	1,132,791	(487,270)
Accounts payable-corn	603,451	536,663
Accrued expenses	(733,262)	(537,023)
Net cash provided by operating activities	8,112,436	874,596
Cash Flows from Investing Activities
Capital expenditures	(1,155,175)	(4,736,918)
Payments for construction in progress	(3,744,854)	0
Net cash used for investing activities	(4,900,029)	(4,736,918)
Cash Flows from Financing Activities
Distributions paid	(11,684,799)	(11,684,801)
Proceeds from long-term debt	0	6,516,964
Payments on long-term debt	(1,428,519)	0
Net cash used for financing activities	(13,113,318)	(5,167,837)
Net Decrease in Cash	(9,900,911)	(9,030,159)
Cash – Beginning of Period	23,002,139	20,827,614
Cash – End of Period	13,101,228	11,797,455
Supplemental Cash Flow Information
Interest paid	267,796	115,067
Supplemental Disclosure of Noncash Investing and Financing Activities
Construction in process included in accrued expenses and accounts payable	$ 1,270,578	$ 795,642

XML

Summary of Significant Accounting Policies

6 Months Ended

Mar. 31, 2017

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the year ended September 30, 2016, contained in the Company's annual report on Form 10-K.

In the opinion of management, the interim condensed financial statements reflect all adjustments considered necessary for fair presentation.

Nature of Business

Cardinal Ethanol, LLC, (the “Company”) is an Indiana limited liability company currently producing fuel-grade ethanol, distillers grains, corn oil and carbon dioxide near Union City, Indiana and sells these products throughout the continental United States. The Company's plant has an approximate annual production capacity exceeding 120 million gallons.

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. The Company uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, allowance for doubtful accounts, the valuation of basis and delay price contracts on corn purchases, derivatives, inventory, patronage dividends, long-lived assets and inventory purchase commitments. Actual results may differ from previously estimated amounts, and such differences may be material to the financial statements. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made.

Restricted Cash

As a part of its commodities hedging activities, the Company is required to maintain cash balances with our commodities trading companies for initial and maintenance margins on a per futures contract basis. Changes in the market value of contracts may increase these requirements. As the futures contracts expire, the margin requirements also expire. Accordingly, we record the cash maintained with the traders in the margin accounts as restricted cash. Since this cash is immediately available to us upon request when there is a margin excess, we consider this restricted cash to be a current asset.

Trade Accounts Receivable

Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of

its customers' financial condition and, generally, requires no collateral. Accounts receivable are recorded at their estimated net

realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's

credit terms. Amounts considered uncollectible are written off. The Company's estimate of the allowance for doubtful accounts

is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any.

Inventories

Inventories consist of raw materials, work in process, finished goods and parts. Corn is the primary raw material. Finished goods consist of ethanol, dried distiller grains and corn oil. Inventories are stated at the lower of weighted average cost or net realizable value. Net realizable value is the estimated selling prices in the normal course of business, less reasonably predictable costs.

Property, Plant and Equipment

Property, plant, and equipment are stated at cost. Depreciation is provided over estimated useful lives by use of the straight line depreciation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in progress expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service.

Long-Lived Assets

The Company reviews its long-lived assets, such as property, plant and equipment and financing costs, subject to depreciation and amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Investments

Investments consist of the capital stock and patron equities of the Company's distillers grains marketer. The investments are stated at the lower of cost or fair value and adjusted for non cash patronage equities received. Patronage dividends are recognized when received and included within revenue in the condensed statements of operations.

Revenue Recognition

The Company generally sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. The Company believes that there are no ethanol sales, during any given month, which should be considered contingent and recorded as deferred revenue. The Company's products are sold Free on Board (FOB) shipping point.

In accordance with the Company's agreements for the marketing and sale of ethanol and related products, marketing fees, commissions and freight due to the marketers are deducted from the gross sales price at the time incurred. Revenue is recorded net of these commissions and freight as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products.

Net Income per Unit

Basic net income per unit is computed by dividing net income by the weighted average number of members' units outstanding during the period. Diluted net income per unit is computed by dividing net income by the weighted average number of members' units and members' unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company's basic and diluted net income per unit are the same.

Recently Issued Accounting Pronouncements

Restricted Cash (Evaluating)

In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-18, Restricted Cash, which amended Statement of Cash Flows (Topic 230) of the Accounting Standards Codification. The new guidance will require amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments will be effective for the Company beginning October 1, 2018. The Company is currently evaluating the impact that adoption of this guidance will have on its financial statements.

XML

Concentrations

6 Months Ended

Mar. 31, 2017

Concentrations [Abstract]

Concentrations

CONCENTRATIONS

Two major customers accounted for approximately 95.6% of the outstanding accounts receivable balance at March 31, 2017 and 93.7% at September 30, 2016. These same two customers accounted for approximately 96.2% of revenue for the three and six month periods ended March 31, 2017 and 96.0% for the three and six month period ended March 31, 2016.

XML

Inventories

6 Months Ended

Mar. 31, 2017

Inventory Disclosure [Abstract]

Inventories

INVENTORIES

Inventories consist of the following as of:

	March 31, 2017 (Unaudited)		September 30, 2016
Raw materials	$	12,848,954	$	4,677,336
Work in progress	1,210,618		1,252,919
Finished goods	3,303,513		3,638,427
Spare parts	2,751,996		2,524,787
Total	$	20,115,081	$	12,093,469

In the ordinary course of business, the Company enters into forward purchase contracts for its commodity purchases and sales. Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales. At March 31, 2017, the Company had forward corn purchase contracts at various fixed prices for various delivery periods through December 2018 for approximately 2.4% of expected production needs for the next twenty-one months. Approximately 11.0% of the forward corn purchases were with related parties. Given the uncertainty of future ethanol and corn prices, the Company could incur a loss on the outstanding corn purchase contracts in future periods. Management has evaluated these forward contracts using a methodology similar to that used in the lower of cost or net realizable value evaluation with respect to inventory valuation, and has determined that no impairment existed at March 31, 2017 or September 30, 2016. The Company has elected not to apply the normal purchase and sale exemption to its forward soybean contracts and therefore treats them as derivative instruments.

At March 31, 2017, the Company had forward dried distiller grains sales contracts for approximately 36.4% of expected production for the next two months at various fixed prices for delivery periods through May 2017. At March 31, 2017, the Company had forward corn oil contracts at various prices for delivery through April 2017, which approximates 76.9% of expected production for that time period. Also, at March 31, 2017, the Company had forward natural gas contracts for approximately 40.1% of expected purchases for the next twenty-four months at various prices for various delivery periods through March 2019. Additionally, at March 31, 2017, the Company had forward soybean purchase contracts for various delivery periods through March 2018 related to our current construction project which is intended to add grain receiving and train loading facilities and additional rail spurs, track and grain storage to provide the flexibility to receive and ship additional grain commodities.

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Derivative Instruments

6 Months Ended

Mar. 31, 2017

Derivative Instruments [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

The Company enters into corn, ethanol, natural gas and soybean derivative instruments, which are required to be recorded as either assets or liabilities at fair value in the balance sheet. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the derivative instrument and the related change in value of the underlying hedged item. The Company must designate the hedging instruments based upon the exposure being hedged as a fair value hedge, a cash flow hedge or a hedge against foreign currency exposure. The Company formally documents, designates, and assesses the effectiveness of transactions that receive hedge accounting initially and on an on-going basis.

Commodity Contracts

The Company enters into commodity-based derivatives, for corn, ethanol, natural gas and soybeans in order to protect cash flows from fluctuations caused by volatility in commodity prices. This is also done to protect gross profit margins from potentially adverse effects of market and price volatility on commodity based 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. The changes in the fair market value of ethanol derivative instruments are included as a component of revenue.  The changes in the fair market value of corn, natural gas, and soybean derivative instruments are included as a component of cost of goods sold.

At March 31, 2017, the Company had a net short (selling) position of 3,464,700 bushels of corn under derivative contracts used to hedge its forward corn contracts, corn inventory and ethanol sales. These corn derivatives are traded on the Chicago Board of Trade as of March 31, 2017 and are forecasted to settle for various delivery periods through March 2018. At March 31, 2017, the Company had a net long (buying) position of 1,890,000 gallons of ethanol under derivative contracts used to hedge its future ethanol sales. These ethanol derivatives are traded on the New York Mercantile Exchange and are forecasted to settle for various delivery periods through September 2017. At March 31, 2017, the Company also had a net short (selling) position of 245,000 bushels of soybeans under derivative contracts used to hedge its forward soybean contract purchases. These soybean derivatives are traded on the Chicago Board of Trade and are as of March 31, 2017 forecasted to settle for various delivery periods through January 2018. These derivatives have not been designated as an effective hedge for accounting purposes.

The following table provides balance sheet details regarding the Company's derivative financial instruments at March 31, 2017:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol derivative contracts	Commodity Derivative Instruments - Current	$	—	$	322,077
Corn derivative contracts	Commodity Derivative Instruments - Current	$	221,417	$	—
Soybean derivative contracts	Commodity Derivative Instruments - Current	$	175,369	$	191,972

As of March 31, 2017 the Company had approximately $831,000 cash collateral (restricted cash) related to ethanol, corn, natural gas and soybean derivatives.

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2016:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol derivative contracts	Commodity Derivative Instruments - Current	$	—	$	188,475
Corn derivative contracts	Commodity Derivative Instruments - Current	$	—	$	152,575
Natural gas derivative contracts	Commodity Derivative Instruments - Current	$	14,100	$	—

As of September 30, 2016 the Company had approximately $1,461,000 of cash collateral (restricted cash) related to ethanol and corn derivatives held by three brokers.

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the three months ended March 31, 2017:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	162,724
Ethanol Derivative Contracts	Revenues	1,384,770
Natural Gas Derivative Contracts	Cost of Goods Sold	62,845
Soybean Derivative Contracts	Cost of Good Sold	(2,208		)
Totals		$	1,608,131

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the three months ended March 31, 2016:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	828,182
Ethanol Derivative Contracts	Revenues	301,107
Natural Gas Derivative Contracts	Cost of Goods Sold	(176,481		)
Totals		$	952,808

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the six months ended March 31, 2017:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	556,596
Ethanol Derivative Contracts	Revenues	1,346,560
Natural Gas Derivative Contracts	Cost of Goods Sold	133,830
Soybean Derivative Contracts	Cost of Goods Sold	(2,208		)
Totals		$	2,034,778

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the six months ended March 31, 2016:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	3,006,696
Ethanol Derivative Contracts	Revenues	221,901
Natural Gas Derivative Contracts	Cost of Goods Sold	(262,737		)
Totals		$	2,965,860

XML

Fair Value Instruments

6 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of March 31, 2017:

Derivatives	Carrying Amount			Fair Value			Level 1			Level 2			Level 3
Corn Derivative Contracts	$	221,417		$	221,417		$	215,312		$	6,105		—
Ethanol Derivative Contracts	$	(322,077	)	$	(322,077	)	$	(322,077	)	—			—
Soybean Derivative Contracts	$	(16,603	)	$	(16,603	)	$	146,769		$	(163,372	)	—

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2016:

Derivatives	Carrying Amount			Fair Value			Level 1			Level 2		Level 3
Corn Derivative Contracts	$	(152,575	)	$	(152,575	)	$	174,969		(327,544	)	—
Ethanol Derivative Contracts	$	(188,475	)	$	(188,475	)	$	(188,475	)	—		—
Natural Gas Derivative Contracts	$	14,100		$	14,100		$	14,100		—		—

We determine the fair value of commodity futures derivative instruments utilizing Level 1 inputs by obtaining fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the Chicago Board of Trade market and New York Mercantile Exchange. We determine the fair value of corn and soybean Level 2 instruments by model-based techniques in which all significant inputs are observable in the markets noted above.

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Bank Financing

6 Months Ended

Mar. 31, 2017

Bank Financing [Abstract]

Bank Financing

BANK FINANCING

The Company has a loan agreement consisting of four loans, the Term Loan, Declining Revolving Loan (Declining Loan), the Revolving Credit Loan and the Construction Loan in exchange for liens on all property (real and personal, tangible and intangible) which include, among other things, a mortgage on the property, a security interest on commodity trading accounts and assignment of material contracts.

On March 23, 2017, we executed the Tenth Amendment of First Amended and Restated Construction Loan Agreement to be effective as of February 28, 2017, which amends the First Amended and Restated Construction Loan Agreement dated June 10, 2013 (the "Amendment"). The primary purpose of the Amendment is to provide additional financing to fund a construction project which is expected to add grain receiving and train loading facilities and additional rail spurs, track and grain storage to provide the flexibility to receive and ship additional grain commodities (the Construction Loan). In connection therewith, we also executed a Disbursing Agreement, Construction Note and a Third Amendment of First Amended and Restated Construction Loan Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement.

The Amendment provides for a construction loan in the maximum principal amount of $10,000,000 with an interest rate equal to the 3-month LIBOR plus two hundred ninety basis points. The financing is secured by a mortgage on all of our real property and a security interest in all other assets, both tangible and intangible. The Amendment provides for monthly interest payments on the Construction Note during the draw period and then the principal balance of the construction advances is expected to be converted, on or before October 31, 2017, to term debt amortized over approximately seven years with a final maturity date of February 28, 2023. The Amendment provides for a minimum fixed charge coverage ratio of no less than 1.15:1.0 measured quarterly on a rolling four quarter average basis if our working capital is less than $25,000,000 for any reporting period. The Amendment also provides for a new debt service charge coverage ratio of no less than 1.25:1.0 measured quarterly on a rolling four quarter average basis, in lieu of the fixed charge coverage ratio, if our working capital is equal to or more that $25,000,000. The minimum $15,000,000 working capital requirement remains in place from a prior amendment as well. The Amendment modifies the capital expenditures covenant to limit those expenditures to $7,000,000 during the 2017 fiscal year, returning the limit to $5,000,000 for subsequent fiscal years. The grain loading and shipping project is excluded from the calculation. Finally, the Amendment extends the termination date of the Revolving Credit Loan from February 28, 2017 to February 28, 2018 and amends the mortgage to add the additional 64 acres of land purchased in October 2016.

Term Loan

The interest rate on the Term Loan is based on the 3-month LIBOR plus two hundred ninety basis points. The interest rate on the Term Loan at March 31, 2017 was 3.90% and at September 30, 2016 was 3.75%. There were borrowings in the amount of approximately $13,391,000 outstanding on the Term Loan at March 31, 2017 and approximately $14,820,000 outstanding at September 30, 2016. The Term Loan requires monthly installment payments of principal and interest of approximately $282,700 which commenced on September 1, 2016, with a final maturity date of February 28, 2021.

Declining Note

The maximum availability of the Declining Loan is $5,000,000 with such amount to be available for working capital purposes. The interest rate on the Declining Loan is 3-month LIBOR plus two hundred ninety basis points. The interest rate on the Declining Loan at March 31, 2017 was 3.90% and at September 30, 2016 was 3.75%. There were no borrowings outstanding on the Declining Loan at March 31, 2017 or at September 30, 2016.

Revolving Credit Loan

The Revolving Credit Loan has a limit of $15,000,000 supported by a borrowing base made up of the Company's corn, ethanol, dried distillers grain and corn oil inventories reduced by accounts payable associated with those inventories having a priority. It is also supported by the eligible accounts receivable and commodity trading account excess margin funds. The interest rate on the Revolving Credit Loan is based on the 1-month LIBOR plus two hundred ninety basis points. The interest rate at March 31, 2017 was 3.89% and at September 30, 2016 was 3.44%. There were no borrowings outstanding on the Revolving Credit Loan at March 31, 2017.

Construction Loan

The Construction Loan has a limit of $10,000,000. The interest rate on the Construction Loan is based on the 3-month LIBOR plus two hundred ninety basis points and at March 31, 2017 was 3.90%. There were no borrowings on the Construction Loan at March 31, 2017.

Long-term debt, as discussed above, consists of the following at March 31, 2017:

Term note	$	13,391,834
Less amounts due within one year	2,915,171
Net long-term debt	$	10,476,663

The estimated maturities of long-term debt at March 31, 2017 are as follows:

April 1, 2017 to March 31, 2018	$	2,915,171
April 1, 2018 to March 31, 2019	3,032,553
April 1, 2019 to March 31, 2020	3,154,169
April 1, 2020 to March 31, 2021	3,281,669
April 1, 2021 to March 31, 2022	1,008,272
Total long-term debt	$	13,391,834

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Leases

6 Months Ended

Mar. 31, 2017

Leases [Abstract]

Leases

LEASES

At March 31, 2017, the Company had the following operating lease minimum commitments for payments of rentals under leases which at inception had a non-cancellable term of more than one year:

	Total
April 1, 2017 to March 31, 2018	$	1,172,964
April 1, 2018 to March 31, 2019	682,588
Total minimum lease commitments	$	1,855,552

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Capital Projects

The board of directors has approved a management proposal of capital projects for fiscal year 2017 to add a fermenter, an additional cooling tower cell and a beer-degasser. The projects are expected to cost approximately $5,000,000. In connection with the projects, the Company has executed construction contracts. The projects are expected to be complete by the September 30, 2017.

The board of directors has also approved a project to add grain loading facilities and additional rail track and grain storage. This project is expected to cost approximately $9,300,000. These additions are intended to provide the flexibility to receive and ship additional grain commodities if desired. The Company obtained construction financing providing up to $10,000,000 in funding for this project. See Note 6 for more disclosure regarding the Construction Loan.

Legal Proceedings

In February 2010, a lawsuit against the Company was filed by an unrelated party claiming the Company's operation of the oil separation system in a patent infringement. In connection with the lawsuit, in February 2010, the agreement for the construction and installation of the tricanter oil separation system was amended. In this amendment the manufacturer and installer of the tricanter oil separation system indemnifies the Company against all claims of infringement of patents, copyrights or other intellectual property rights from the Company's purchase and use of the tricanter oil system and agrees to defend the Company in the lawsuit filed at no expense to the Company. On October 23, 2014, the court granted summary judgment finding that all of the patents claimed were invalid and that the Company had not infringed. In addition, on September 15, 2016, the United States District Court granted summary judgment finding that the patents were invalid due to inequitable conduct before the US Patent and Trademark Office by the inventors and their attorneys. We expect that GS CleanTech will appeal the rulings on the motions for summary judgment. The manufacturer has, and the Company expects it will continue, to vigorously defend itself and the Company in these lawsuits and in any appeal filed.

If the ruling was to be successfully appealed, the Company estimates that damages sought in this litigation if awarded would be

based on a reasonable royalty to, or lost profits of, the plaintiff. If the court deems the case exceptional, attorney's fees may be awarded and are likely to be $1,000,000 or more. The manufacturer has also agreed to indemnify the Company for these fees. However, in the event that damages are awarded, if the manufacturer is unable to fully indemnify the Company for any reason, the Company could be liable. In addition, the Company may need to cease use of its current oil separation process and seek out a replacement or cease oil production altogether.

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Uncertainties Impacting the Ethanol Industry and Our Future Operations

6 Months Ended

Mar. 31, 2017

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

The Company has certain risks and uncertainties that it experiences during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol, distillers grains and corn oil to customers primarily located in the U.S. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. Ethanol sales average approximately 83% of total revenues and corn costs average 78% of total cost of goods sold.

The Company's operating and financial performance is largely driven by prices at which the Company sells ethanol, distillers grains and corn oil, and the related cost of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and the unleaded gasoline and the petroleum markets, although, since 2005, the prices of ethanol and gasoline began a divergence with ethanol 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.

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Accounting Policies

6 Months Ended

Mar. 31, 2017

Summary of Significant Accounting Policies [Abstract]

Accounting Estimates

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. The Company uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, allowance for doubtful accounts, the valuation of basis and delay price contracts on corn purchases, derivatives, inventory, patronage dividends, long-lived assets and inventory purchase commitments. Actual results may differ from previously estimated amounts, and such differences may be material to the financial statements. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made.

Restricted Cash

Restricted Cash

As a part of its commodities hedging activities, the Company is required to maintain cash balances with our commodities trading companies for initial and maintenance margins on a per futures contract basis. Changes in the market value of contracts may increase these requirements. As the futures contracts expire, the margin requirements also expire. Accordingly, we record the cash maintained with the traders in the margin accounts as restricted cash. Since this cash is immediately available to us upon request when there is a margin excess, we consider this restricted cash to be a current asset.

Trade Accounts Receivable

Trade Accounts Receivable

Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of

its customers' financial condition and, generally, requires no collateral. Accounts receivable are recorded at their estimated net

realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's

credit terms. Amounts considered uncollectible are written off. The Company's estimate of the allowance for doubtful accounts

is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any.

Inventories

Inventories

Inventories consist of raw materials, work in process, finished goods and parts. Corn is the primary raw material. Finished goods consist of ethanol, dried distiller grains and corn oil. Inventories are stated at the lower of weighted average cost or net realizable value. Net realizable value is the estimated selling prices in the normal course of business, less reasonably predictable costs.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant, and equipment are stated at cost. Depreciation is provided over estimated useful lives by use of the straight line depreciation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in progress expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service.

Long-Lived Assets

Long-Lived Assets

The Company reviews its long-lived assets, such as property, plant and equipment and financing costs, subject to depreciation and amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Investments

Investments

Investments consist of the capital stock and patron equities of the Company's distillers grains marketer. The investments are stated at the lower of cost or fair value and adjusted for non cash patronage equities received. Patronage dividends are recognized when received and included within revenue in the condensed statements of operations.

Revenue Recognition

Revenue Recognition

The Company generally sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. The Company believes that there are no ethanol sales, during any given month, which should be considered contingent and recorded as deferred revenue. The Company's products are sold Free on Board (FOB) shipping point.

In accordance with the Company's agreements for the marketing and sale of ethanol and related products, marketing fees, commissions and freight due to the marketers are deducted from the gross sales price at the time incurred. Revenue is recorded net of these commissions and freight as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products.

Net Income per Unit

Net Income per Unit

Basic net income per unit is computed by dividing net income by the weighted average number of members' units outstanding during the period. Diluted net income per unit is computed by dividing net income by the weighted average number of members' units and members' unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company's basic and diluted net income per unit are the same.

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

Recently Issued Accounting Pronouncements

Restricted Cash (Evaluating)

In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-18, Restricted Cash, which amended Statement of Cash Flows (Topic 230) of the Accounting Standards Codification. The new guidance will require amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments will be effective for the Company beginning October 1, 2018. The Company is currently evaluating the impact that adoption of this guidance will have on its financial statements.

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Inventories (Tables)

6 Months Ended

Mar. 31, 2017

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories consist of the following as of:

	March 31, 2017 (Unaudited)		September 30, 2016
Raw materials	$	12,848,954	$	4,677,336
Work in progress	1,210,618		1,252,919
Finished goods	3,303,513		3,638,427
Spare parts	2,751,996		2,524,787
Total	$	20,115,081	$	12,093,469

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Derivative Instruments (Tables)

6 Months Ended

Mar. 31, 2017

Derivative [Line Items]

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position

The following table provides balance sheet details regarding the Company's derivative financial instruments at March 31, 2017:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol derivative contracts	Commodity Derivative Instruments - Current	$	—	$	322,077
Corn derivative contracts	Commodity Derivative Instruments - Current	$	221,417	$	—
Soybean derivative contracts	Commodity Derivative Instruments - Current	$	175,369	$	191,972

As of March 31, 2017 the Company had approximately $831,000 cash collateral (restricted cash) related to ethanol, corn, natural gas and soybean derivatives.

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2016:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol derivative contracts	Commodity Derivative Instruments - Current	$	—	$	188,475
Corn derivative contracts	Commodity Derivative Instruments - Current	$	—	$	152,575
Natural gas derivative contracts	Commodity Derivative Instruments - Current	$	14,100	$	—

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the three months ended March 31, 2017:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	162,724
Ethanol Derivative Contracts	Revenues	1,384,770
Natural Gas Derivative Contracts	Cost of Goods Sold	62,845
Soybean Derivative Contracts	Cost of Good Sold	(2,208		)
Totals		$	1,608,131

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the three months ended March 31, 2016:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	828,182
Ethanol Derivative Contracts	Revenues	301,107
Natural Gas Derivative Contracts	Cost of Goods Sold	(176,481		)
Totals		$	952,808

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the six months ended March 31, 2017:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	556,596
Ethanol Derivative Contracts	Revenues	1,346,560
Natural Gas Derivative Contracts	Cost of Goods Sold	133,830
Soybean Derivative Contracts	Cost of Goods Sold	(2,208		)
Totals		$	2,034,778

The following table provides details regarding the gains and (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments for the six months ended March 31, 2016:

Instrument	Statement of Operations Location	Amount
Corn Derivative Contracts	Cost of Goods Sold	$	3,006,696
Ethanol Derivative Contracts	Revenues	221,901
Natural Gas Derivative Contracts	Cost of Goods Sold	(262,737		)
Totals		$	2,965,860

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Fair Value Instruments (Tables)

6 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of March 31, 2017:

Derivatives	Carrying Amount			Fair Value			Level 1			Level 2			Level 3
Corn Derivative Contracts	$	221,417		$	221,417		$	215,312		$	6,105		—
Ethanol Derivative Contracts	$	(322,077	)	$	(322,077	)	$	(322,077	)	—			—
Soybean Derivative Contracts	$	(16,603	)	$	(16,603	)	$	146,769		$	(163,372	)	—

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2016:

Derivatives	Carrying Amount			Fair Value			Level 1			Level 2		Level 3
Corn Derivative Contracts	$	(152,575	)	$	(152,575	)	$	174,969		(327,544	)	—
Ethanol Derivative Contracts	$	(188,475	)	$	(188,475	)	$	(188,475	)	—		—
Natural Gas Derivative Contracts	$	14,100		$	14,100		$	14,100		—		—

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Bank Financing Schedule of Long Term Debt (Tables)

6 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

Long-term debt, as discussed above, consists of the following at March 31, 2017:

Term note	$	13,391,834
Less amounts due within one year	2,915,171
Net long-term debt	$	10,476,663

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Bank Financing Schedule of Maturities of Long Term Debt (Tables)

6 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Schedule of Maturities of Long-term Debt [Table Text Block]

The estimated maturities of long-term debt at March 31, 2017 are as follows:

April 1, 2017 to March 31, 2018	$	2,915,171
April 1, 2018 to March 31, 2019	3,032,553
April 1, 2019 to March 31, 2020	3,154,169
April 1, 2020 to March 31, 2021	3,281,669
April 1, 2021 to March 31, 2022	1,008,272
Total long-term debt	$	13,391,834

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Leases (Tables)

6 Months Ended

Mar. 31, 2017

Leases [Abstract]

Schedule of Future Minimum Payments for Capital and Operating Leases

At March 31, 2017, the Company had the following operating lease minimum commitments for payments of rentals under leases which at inception had a non-cancellable term of more than one year:

	Total
April 1, 2017 to March 31, 2018	$	1,172,964
April 1, 2018 to March 31, 2019	682,588
Total minimum lease commitments	$	1,855,552

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Summary of Significant Accounting Policies Nature of Business (Details) gal in Millions	6 Months Ended
	Mar. 31, 2017 gal
Ethanol [Member]
Product Information [Line Items]
Annual Production Capacity	120

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Concentrations (Details) - Customer Concentration Risk [Member]	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			95.60%		93.70%
Sales Revenue, Goods, Net [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	96.20%	96.00%	96.20%	96.00%

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Inventories (Details) - USD ($)	12 Months Ended
	Sep. 30, 2016	Mar. 31, 2017
Inventory [Line Items]
Raw materials	$ 4,677,336	$ 12,848,954
Work in progress	1,252,919	1,210,618
Finished goods	3,638,427	3,303,513
Spare parts	2,524,787	2,751,996
Total	$ 12,093,469	$ 20,115,081
Corn [Member]
Inventory [Line Items]
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage		2.40%
Long-term Purchase Commitment, Period	21 months
Distillers Grains [Member]
Inventory [Line Items]
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage		36.40%
Long-term Purchase Commitment, Period	2 months
Corn Oil [Member] [Member]
Inventory [Line Items]
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage		76.90%
Natural Gas [Member]
Inventory [Line Items]
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage		40.10%
Long-term Purchase Commitment, Period	24 months
Related Party [Member] | Corn [Member]
Inventory [Line Items]
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage		11.00%

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Derivative Instruments (Details) - Short [Member] - Not Designated as Hedging Instrument [Member]	6 Months Ended
	Mar. 31, 2017 bu gal
Corn [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volume	(3,464,700)
Ethanol [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volume | gal	(1,890,000)
Soybean [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount, Volume	(245,000)

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Derivative Instruments - Balance Sheet (Details) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Derivatives, Fair Value [Line Items]
Restricted Cash and Cash Equivalents, Current	$ 831,313	$ 1,460,772
Commodity Contract [Member]
Derivatives, Fair Value [Line Items]
Restricted Cash and Cash Equivalents, Current	831,000	1,461,000
Commodity Derivative Instruments - Current [Member] | Not Designated as Hedging Instrument [Member] | Ethanol [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Net	0	0
Derivative Liability, Fair Value, Net	322,077	188,475
Commodity Derivative Instruments - Current [Member] | Not Designated as Hedging Instrument [Member] | Corn [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Net	221,417	0
Derivative Liability, Fair Value, Net	0	152,575
Commodity Derivative Instruments - Current [Member] | Not Designated as Hedging Instrument [Member] | Natural Gas [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Net		14,100
Derivative Liability, Fair Value, Net		$ 0
Commodity Derivative Instruments - Current [Member] | Not Designated as Hedging Instrument [Member] | Soybean [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Net	175,369
Derivative Liability, Fair Value, Net	$ 191,972

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Derivative Instruments - Income Statement (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net			$ (1,825,091)	$ (1,594,408)
Gain (Loss) on Price Risk Derivative Instruments Not Designated as Hedging Instruments	$ 1,608,131	$ 952,808	2,034,778	2,965,860
Not Designated as Hedging Instrument [Member] | Corn [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	162,724	828,182	556,596	3,006,696
Not Designated as Hedging Instrument [Member] | Ethanol [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	1,384,770	301,107	1,346,560	221,901
Not Designated as Hedging Instrument [Member] | Natural Gas [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	62,845	$ (176,481)	133,830	$ (262,737)
Not Designated as Hedging Instrument [Member] | Soybean [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ (2,208)		$ (2,208)

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Fair Value Instruments (Details) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Corn [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	$ 221,417	$ (152,575)
Corn [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	221,417	(152,575)
Corn [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	215,312	174,969
Corn [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	6,105	(327,544)
Corn [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	0	0
Ethanol [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	(322,077)	(188,475)
Ethanol [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	(322,077)	(188,475)
Ethanol [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	(322,077)	(188,475)
Ethanol [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	0	0
Ethanol [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	0	0
Soybean [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	(16,603)
Soybean [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	(16,603)
Soybean [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	146,769
Soybean [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	(163,372)
Soybean [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)	$ 0
Natural Gas [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)		14,100
Natural Gas [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)		14,100
Natural Gas [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)		14,100
Natural Gas [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)		0
Natural Gas [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Assets (Liabilities)		$ 0

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Bank Financing - Debt Instruments (Details)	1 Months Ended		3 Months Ended			6 Months Ended
	Mar. 31, 2017 USD ($)	Sep. 30, 2016 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Mar. 31, 2017 USD ($)	Jun. 30, 2016 a
Debt Instrument [Line Items]
Long-term Line of Credit		$ 0			$ 0
Long-term Construction Loan	$ 10,000,000		$ 10,000,000			$ 10,000,000
Debt Instrument, Term			7 years
Declining Note [Member]
Debt Instrument [Line Items]
Long-term Line of Credit	0		$ 0			0
Line of Credit Facility, Maximum Borrowing Capacity		5,000,000			5,000,000
Term Loan [Member]
Debt Instrument [Line Items]
Long-term Debt, Maturities, Repayments of Principal in Next Rolling Twelve Months	2,915,171		2,915,171			2,915,171
Long-term Line of Credit	13,391,834	$ 14,820,000	13,391,834		$ 14,820,000	13,391,834
Debt Instrument, Periodic Payment						282,700
Line of Credit, Current	2,915,171		2,915,171			2,915,171
Long-term Line of Credit, Noncurrent	10,476,663		10,476,663			10,476,663
Line of Credit Facility, Fair Value of Amount Outstanding	13,391,000		13,391,000			13,391,000
Long-term Debt, Maturities, Repayments of Principal in Year Two	3,032,553		3,032,553			3,032,553
Long-term Debt, Maturities, Repayments of Principal in Rolling Year Three	3,154,169		3,154,169			3,154,169
Long-term Debt, Maturities, Repayments of Principal in Rolling Year Four	3,281,669		3,281,669			3,281,669
Long-term Debt, Maturities, Repayments of Principal in Rolling Year Five	1,008,272		1,008,272			1,008,272
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Line of Credit	0		0			0
Line of Credit Facility, Maximum Borrowing Capacity	$ 15,000,000		$ 15,000,000			$ 15,000,000
Debt Instrument, Interest Rate, Effective Percentage	3.89%	3.44%	3.89%		3.44%	3.89%
Declining Note [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate					0.85%	1.00%
Long-term Debt		$ 0			$ 0
Debt Instrument, Interest Rate, Effective Percentage	3.90%	3.75%	3.90%		3.75%	3.90%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.99%	0.54%
Term Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate					0.85%	1.00%
Debt Instrument, Interest Rate, Effective Percentage	3.90%	3.75%	3.90%		3.75%	3.90%
Mortgages [Member]
Debt Instrument [Line Items]
Area of Land | a							64
Construction Loans [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate						1.00%
Debt Instrument, Interest Rate, Effective Percentage	3.90%		3.90%			3.90%
Line of Credit Facility, Fair Value of Amount Outstanding	$ 0		$ 0			$ 0
Working Capital requirement [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Covenant, Working Capital	15,000,000		15,000,000	$ 25,000,000		15,000,000
debt service charge [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Covenant Terms				1.25:1.0
Fixed Charge Coverage Ratio [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Covenant Terms				1.15:1.0
Annual Capital Expenditures [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Covenant, Maximum Capital Expenditures Per Year Without Prior Approval	5,000,000		5,000,000			5,000,000
Annual Capital Expenditures [Member] | Construction Loans [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Covenant, Maximum Capital Expenditures Per Year Without Prior Approval	$ 7,000,000		$ 7,000,000			$ 7,000,000

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Leases (Details) - Transportation Equipment [Member]	Mar. 31, 2017 USD ($)
Operating Leased Assets [Line Items]
Operating Leases, Payments Due July 1, 2016 to June 31, 2017	$ 1,172,964
Operating Leases, Payments Due July 1, 2017 to June 31, 2018	682,588
Operating Leases, Future Minimum Payments Due	$ 1,855,552

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Commitments and Contingencies (Details)	Mar. 31, 2017 USD ($)
Pending Litigation [Member]
Loss Contingencies [Line Items]
Estimated Litigation Liability	$ 1,000,000

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Commitments and Contingencies Other Contingencies (Details) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Other Commitments [Line Items]
Long-term Construction Loan	$ 10,000,000
Cooling tower cell and beer-degasser [Member]
Other Commitments [Line Items]
Estimated Plant Expansion Costs		$ 5,000,000
Grain loading facilities, rail track, grain storage [Member]
Other Commitments [Line Items]
Estimated Plant Expansion Costs	9,300,000
Long-term Construction Loan	$ 10,000,000

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Uncertainties Impacting the Ethanol Industry and Our Future Operations (Details)	6 Months Ended
	Mar. 31, 2017
Sales Revenue, Goods, Net [Member] | Ethanol [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	83.00%
Cost of Goods, Segment [Member] | Corn [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	78.00%