10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
	For the quarterly period ended June 30, 2022.
	OR
☐	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)

Securities registered pursuant to 12(b) of the Act: None.

Title of each class Trading Symbol(s) Name of each exchange on which registered

Securities registered pursuant to Section 12(g) of the Act: Membership Units.

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 every Interactive Data File required to be submitted 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 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, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	x	Smaller Reporting Company	☐
		Emerging Growth Company	☐

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).

☐ Yes     x No

As of August 4, 2022, 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	23
Item 3. Quantitative and Qualitative Disclosures about Market Risk	38
Item 4. Controls and Procedures	40
PART II. OTHER INFORMATION	41
Item 1. Legal Proceedings	41
Item 1A. Risk Factors	41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3. Defaults Upon Senior Securities	41
Item 4. Mine Safety Disclosures	42
Item 5. Other Information	42
Item 6. Exhibits	42
SIGNATURES	43

2

PART I.        FINANCIAL INFORMATION

Item 1. Financial Statements

CARDINAL ETHANOL, LLC

Condensed Balance Sheets

ASSETS	June 30, 2022		September 30, 2021
	(Unaudited)
Current Assets
Cash	$	29,929,343	$	25,798,906
Restricted cash	8,419,989		8,097,041
Trade accounts receivable	24,624,227		13,386,410
Miscellaneous receivables	573,890		404,273
Inventories	38,337,108		26,587,032
Prepaid and other current assets	571,488		212,261
Futures & options derivatives	7,918,725		964,418
Forward purchase/sales derivatives	1,273,242		988,919
Total current assets	111,648,012		76,439,260
Property, Plant, and Equipment, Net	70,620,993		69,399,645
Other Assets
Operating lease right of use asset, net	2,661,350		4,840,250
Investment	1,259,770		1,259,770
Total other assets	3,921,120		6,100,020
Total Assets	$	186,190,125	$	151,938,925
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Due to broker	$	104,311	$	—
Accounts payable	4,359,417		3,564,614
Accounts payable - grain	12,574,716		11,942,723
Accrued expenses	1,898,478		2,111,295
Futures & options derivatives	3,952,736		2,331,889
Forward purchase/sales derivatives	167,947		658,283
Operating lease liability current	2,199,795		3,132,242
Total current liabilities	25,257,400		23,741,046
Long-Term Liabilities
Operating lease long-term liabilities	492,455		1,709,621
Liability for railcar rehabilitation costs	1,966,537		1,750,680
Total long-term liabilities	2,458,992		3,460,301
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	87,561,520		53,825,365
Total members' equity	158,473,733		124,737,578
Total Liabilities and Members’ Equity	$	186,190,125	$	151,938,925

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				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Revenues	$	133,261,052	$	117,272,974	$	417,490,683	$	308,424,904
Cost of Goods Sold	104,607,396		107,665,033		343,766,849		289,525,280
Gross Profit	28,653,656		9,607,941		73,723,834		18,899,624
Operating Expenses	1,920,790		1,758,914		6,104,500		5,408,684
Operating Income	26,732,866		7,849,027		67,619,334		13,490,940
Other Income (Expense)
Interest expense	(3,893)		(61,884)		(3,993)		(137,959)
Miscellaneous income (expense)	7,444,754		(41,393)		7,382,764		202,356
Total	7,440,861		(103,277)		7,378,771		64,397
Net Income	$	34,173,727	$	7,745,750	$	74,998,105	$	13,555,337
Weighted Average Units Outstanding - basic and diluted	14,606		14,606		14,606		14,606
Net Income Per Unit - basic and diluted	$	2,340	$	530	$	5,135	$	928
Distributions Per Unit	$	675	$	200	$	2,825	$	450

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

4

CARDINAL ETHANOL, LLC

Condensed Statements of Cash Flows (Unaudited)

	Nine Months Ended		Nine Months Ended
	June 30, 2022		June 30, 2021
Cash Flows from Operating Activities
Net income	$	74,998,105	$	13,555,337
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	8,502,992		8,436,814
Change in fair value of commodity derivative instruments	(6,108,119)		4,604,890
Loss on sale of equipment	—		906,785
Forgiveness of Paycheck Protection Program loan	—		(856,665)
Change in operating assets and liabilities:
Trade accounts receivable	(11,237,817)		(10,100,285)
Miscellaneous receivables	(169,617)		92,701
Inventories	(11,750,076)		(6,109,172)
Prepaid and other current assets	(359,227)		(285,104)
Due to broker	104,311		(15,000)
Accounts payable	804,714		(287,924)
Accounts payable - grain	631,993		1,180,496
Accrued expenses	(188,965)		(194,925)
Liability for railcar rehabilitation costs	215,857		223,560
Net cash provided by operating activities	55,444,151		11,151,508
Cash Flows from Investing Activities
Payments for construction in progress	(9,728,816)		(3,483,402)
Net cash used for investing activities	(9,728,816)		(3,483,402)
Cash Flows from Financing Activities
Distributions paid	(41,261,950)		(6,572,700)
Proceeds from revolving credit loan	9,841,117		106,024,134
Payments on revolving credit loan	(9,841,117)		(106,024,134)
Proceeds from long-term debt	—		1,222,417
Net cash used for financing activities	(41,261,950)		(5,350,283)
Net Increase in Cash and Restricted Cash	4,453,385		2,317,823
Cash and Restricted Cash – Beginning of Period	33,895,947		16,913,982
Cash and Restricted Cash – End of Period	$	38,349,332	$	19,231,805

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

5

CARDINAL ETHANOL, LLC

Condensed Statements of Cash Flows (Unaudited)

	Nine Months Ended		Nine Months Ended
	June 30, 2022		June 30, 2021
Reconciliation of Cash and Restricted Cash
Cash - Balance Sheet	$	29,929,343	$	7,695,998
Restricted Cash - Balance Sheet	8,419,989		11,535,807
Cash and Restricted Cash	$	38,349,332	$	19,231,805
Supplemental Cash Flow Information
Interest paid	$	3,993	$	126,365
Supplemental Disclosure of Non-cash Investing and Financing Activities
Construction in process included in accrued expenses and accounts payable	$	19,580	$	220,736

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

6

CARDINAL ETHANOL, LLC

Condensed Statements of Changes in Members' Equity (Unaudited)

	Member Contributions		Retained Earnings		Total
Balance September 30, 2020	$	70,912,213	$	38,035,137	$	108,947,350
Net Loss	—		(1,055,854)		(1,055,854)
Member Distributions	—		(1,460,600)		(1,460,600)
Balance December 31, 2020	$	70,912,213	$	35,518,683	$	106,430,896
Net Income	—		6,865,441		6,865,441
Member Distributions	—		(2,190,900)		(2,190,900)
Balance March 31, 2021	$	70,912,213	$	40,193,224	$	111,105,437
Net Income	—		7,745,750		7,745,750
Member Distributions	—		(2,921,200)		(2,921,200)
Balance June 30, 2021	$	70,912,213	$	45,017,774	$	115,929,987
	Member Contributions		Retained Earnings		Total
Balance September 30, 2021	$	70,912,213	$	53,825,365	$	124,737,578
Net Income	—		32,395,164		32,395,164
Member Distributions	—		(9,493,900)		(9,493,900)
Balance December 31, 2021	$	70,912,213	$	76,726,629	$	147,638,842
Net Income	—		8,429,214		8,429,214
Member Distributions	—		(21,909,000)		(21,909,000)
Balance March 31, 2022	$	70,912,213	$	63,246,843	$	134,159,056
Net Income	—		34,173,727		34,173,727
Member Distributions	—		(9,859,050)		(9,859,050)
Balance June 30, 2022	$	70,912,213	$	87,561,520	$	158,473,733

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

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CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

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, 2021, 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. During the nine months ended June 30, 2022 and 2021, the Company produced approximately 101,534,000 and 100,050,000 gallons of ethanol, respectively.

In addition, the Company procures, transports, and sells grain commodities through grain operations.

Reportable Segments

Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.   Based on the related business nature and expected financial results criteria set forth in ASC 280, the Company has two reportable operating segments for financial reporting purposes.

•Ethanol Division. Based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plant, including the production and sale of ethanol and its co-products, are aggregated into one financial reporting segment.

•Trading Division. The Company has a grain loading facility within the Company's single site to buy, hold and sell inventories of agricultural grains, primarily soybeans. The Company performs no additional processing of these grains, unlike the corn inventory the Company holds and uses in ethanol production. The activities of buying, selling and holding of grains other than for ethanol and co-product production comprise this financial reporting segment.

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 Ethanol Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, inventories, the assumptions used in the analysis of the impairment of long lived assets, railcar rehabilitation costs, and inventory purchase commitments.

The Trading Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, the valuation of inventory purchase and sale commitment derivatives and inventory at market.

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. Actual results could differ materially from those estimates.

8

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

Cash

The Company maintains its accounts primarily at two financial institutions. At times throughout the year the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

Restricted Cash

As a part of its commodities hedging activities, the Company is required to maintain cash balances with its 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, the Company records the cash maintained with the traders in the margin accounts as restricted cash. Since this cash is immediately available upon request when there is a margin excess, the Company considers 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. At June 30, 2022 and September 30, 2021, the Company determined that an allowance for doubtful accounts was not necessary.

Inventories

Ethanol Division (see Reportable Segments) inventories consist of raw materials, work in process, finished goods and spare 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 selling costs.

Trading Division (see Reportable Segments) inventories consist of grain. Soybeans were the only grains held and traded at June 30, 2022 and September 30, 2021. These inventories are stated at market value less estimated selling costs, which may include reductions for quality.

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.

The Company has various capital projects scheduled for the 2022 fiscal year in order to make certain improvements to the ethanol plant and maintain the facility. These improvements include updates to the grain pits, yeast props, economizers, cyber security, and other small miscellaneous projects. The Company also invested in an ethanol recovery system, costing approximately $2,400,000. The project was funded through operations and was completed and placed into service during the first quarter of fiscal year 2022. The Company has plans to install a high protein feed system, costing approximately $46,570,000, which is payable in installments and is subject to adjustments pursuant to change orders. The Company expects to fund the project from operations and from current credit facilities as amended.

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

9

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

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. Management evaluated and determined no impairment write-downs were considered necessary for the nine months ended June 30, 2022 and 2021.

Investment

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 and cash equity redemptions received. Non cash patronage dividends are recognized when received and included within revenue in the condensed statements of operations.

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The Company's contracts primarily consist of agreements with marketing companies and other customers as described below. The Company's performance obligations consist of the delivery of ethanol, distillers' grains, corn oil, soybeans and carbon dioxide to its customers. The consideration the Company receives for these products is fixed based on current observable market prices at the Chicago Mercantile Exchange, generally, and adjusted for local market differentials. The Company's contracts have specific delivery modes, rail or truck, and dates. Revenue is recognized when the Company delivers the products to the mode of transportation specified in the contract, at the transaction price established in the contract, net of commissions, fees, and freight. The Company sells each of the products via different marketing channels as described below.

•Ethanol. The Company sells its ethanol via a marketing agreement with Murex, LLC. Murex markets one hundred percent of the Company's ethanol production based on agreements with end users at prices agreed upon mutually among the end user, Murex and the Company. Murex then provides a schedule of deliveries required and an order for each rail car or tankers needed to fulfill their commitment with the end user. These are individual performance obligations of the Company. The marketing agreement calls for control and title to pass when the delivery vehicle is filled. Revenue is recognized then at the price in the agreement with the end user, net of commissions, freight, and insurance.

•Distillers grains. The Company engages another third-party marketing company, CHS, Inc, to market one hundred percent of the distillers grains it produces at the plant. The process for selling the distillers grains is like that of ethanol, except that CHS takes title and control once a rail car is released to the railroad or a truck is released from the Company's scales. Prices are agreed upon among the three parties, and CHS provides schedules and orders representing performance obligations. Revenue is recognized net of commissions, freight, and fees.

•Distillers corn oil (corn oil). The Company sells its production of corn oil directly to commercial customers. The customer is provided with a delivery schedule and pick up orders representing performance obligations. These are fulfilled when the customer’s driver picks up the scheduled load. The price is agreed upon at the time each contract is made, and the Company recognizes revenue at the time of delivery at that price.

•Carbon dioxide. The Company sells a portion of the carbon dioxide it produces to a customer that maintains a plant on-site for a set price per ton. Delivery is defined as transference of the gas from the Company's stream to their plant.

•Soybeans and other grains. The Company sells soybeans exclusively to commercial mills, processors or grain traders. Contracts are negotiated directly with the parties at prices based on negotiated prices.

10

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

Cost of Goods Sold

Cost of goods sold include corn, trading division grains, natural gas and other components which includes processing ingredients, electricity, railcar lease, railcar maintenance, depreciation of ethanol production fixed assets and wages, salaries and benefits of production personnel.

Operating Expenses

Operating expenses include wages, salaries and benefits of administrative employees at the plant, insurance, professional fees, depreciation of trading division fixed assets, property taxes and similar costs.

Derivative Instruments

From time to time the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives in the balance sheet at fair value.

In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in the statement of operations, depending on the item being hedged.

Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting and reporting requirements, and therefore, are not marked to market in our financial statements.

The Company has elected for its Ethanol Division to apply the normal purchase normal sale exemption to all forward commodity contracts. For the Trading Division, the Company has elected not to apply the normal purchase normal sale exemption to its forward purchase and sales contracts and therefore, marks these derivative instruments to market.

Net Income (Loss) per Unit

Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units outstanding during the period. Diluted net income (loss) per unit is computed by dividing net income (loss) 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 (loss) per unit are the same.

2.  REVENUE

Revenue Recognition

Revenue is recognized at a single point in time when the Company satisfies its performance obligation under the terms of a contract with a customer. Generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration expected, as specified in the contract with a customer, to be received in exchange for transferring goods or providing services.

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CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

Revenue by Source

All revenues from contracts with customers under ASC Topic 606 are recognized at a point in time.

The following tables disaggregate revenue by major source for the three and nine months ended June 30, 2022 and 2021:

Three Months Ended June 30, 2022 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	84,706,603	$	—	$	84,706,603
Distillers' grains	18,261,386		—		18,261,386
Corn Oil	7,796,800		—		7,796,800
Carbon Dioxide	120,531		—		120,531
Other Revenue	13,450		15,900		29,350
Total revenues from contracts with customers	110,898,770		15,900		110,914,670
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		22,346,382		22,346,382
Total revenues from contracts accounted for as derivatives	—		22,346,382		22,346,382
Total Revenues	$	110,898,770	$	22,362,282	$	133,261,052

Nine Months Ended June 30, 2022 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	272,527,573	$	—	$	272,527,573
Distillers' grains	47,450,158		—		47,450,158
Corn Oil	20,177,097		—		20,177,097
Carbon Dioxide	347,126		—		347,126
Other Revenue	73,800		82,556		156,356
Total revenues from contracts with customers	340,575,754		82,556		340,658,310
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		76,832,373		76,832,373
Total revenues from contracts accounted for as derivatives	—		76,832,373		76,832,373
Total Revenues	$	340,575,754	$	76,914,929	$	417,490,683

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CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

Three Months Ended June 30, 2021 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	79,943,407	$	—	$	79,943,407
Distillers' grains	14,701,286		—		14,701,286
Corn Oil	4,977,755		—		4,977,755
Carbon Dioxide	121,288		—		121,288
Other Revenue	14,650		14,875		29,525
Total revenues from contracts with customers	99,758,386		14,875		99,773,261
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		17,499,713		17,499,713
Total revenues from contracts accounted for as derivatives	—		17,499,713		17,499,713
Total Revenues	$	99,758,386	$	17,514,588	$	117,272,974

Nine Months Ended June 30, 2021 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	182,551,687	$	—	$	182,551,687
Distillers' grains	43,552,750		—		43,552,750
Corn Oil	12,030,379		—		12,030,379
Carbon Dioxide	368,038		—		368,038
Other Revenue	41,425		119,850		161,275
Total revenues from contracts with customers	238,544,279		119,850		238,664,129
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		69,760,775		69,760,775
Total revenues from contracts accounted for as derivatives	—		69,760,775		69,760,775
Total Revenues	$	238,544,279	$	69,880,625	$	308,424,904

(1) Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC Topic 606), where the company recognizes revenue when control of the inventory is transferred within the meaning of ASC Topic 606 as required by ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets.

13

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

Payment Terms

The Company has contractual payment terms with each respective marketer that sells ethanol and distillers grains. These terms are generally 7 - 14 days after the week of the transfer of control.

The Company has standard payment terms of net 10 days for its sale for corn oil.

The Company has standard payments terms due upon delivery for its sale of soybeans.

The contractual terms with the carbon dioxide customer calls for an annual settlement.

Shipping and Handling Costs

Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of goods sold. Accordingly, amounts billed to customers for such costs are included as a component of revenue.

Contract Liabilities

The Company records unearned revenue when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of its contracts with customers.

3. CONCENTRATIONS

Two major customers accounted for approximately 84% and 90% of the outstanding accounts receivable balance at June 30, 2022 and September 30, 2021, respectively. These same two customers accounted for approximately 77% of revenue for the nine months ended June 30, 2022 and 73% of revenue for the nine months ended June 30, 2021.

4.  INVENTORIES

Inventories consist of the following as of:

	June 30, 2022 (Unaudited)		September 30, 2021
Ethanol Division:
Raw materials	$	24,475,078	$	2,995,914
Work in progress	1,555,309		2,331,419
Finished goods	2,985,976		12,431,375
Spare parts	3,966,847		3,978,193
Ethanol Division Subtotal	$	32,983,210	$	21,736,901
Trading Division:
Grain inventory	$	5,353,898	$	4,850,131
Trading Division Subtotal	5,353,898		4,850,131
Total Inventories	$	38,337,108	$	26,587,032

The Company did not have a net realizable value write-down of ethanol inventory for the nine months ended June 30, 2022. The Company had a net realizable write-down of ethanol inventory of approximately $57,000 for the nine months ended June 30, 2021.

14

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

In the ordinary course of its ethanol business, the Company enters into forward purchase contracts for its commodity purchases and sales. Certain contracts for the ethanol division that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales. At June 30, 2022, the Company had forward corn purchase contracts at various fixed prices for various delivery periods through March 2024 for approximately 11% of expected production needs for the next 21 months. Approximately 6% of the forward corn purchases were with related parties. Given the uncertainty of future commodity prices, the Company could incur a loss on the outstanding purchase contracts in future periods. Management has evaluated these forward contracts using the lower of cost or net realizable value evaluation, and has determined that no impairment loss existed at June 30, 2022 and September 30, 2021. The Company has elected not to apply the normal purchase and sale exemption to its forward soybean contracts of the trading division and therefore, treats them as derivative instruments.

At June 30, 2022, the Ethanol Division had forward dried distiller grains sales contracts for approximately 32% of expected production for the next 2 months at various fixed prices for delivery periods through August 2022. At June 30, 2022, the Company had forward corn oil contracts for approximately 78% of expected production for the next month at various fixed prices for delivery through July 2022. Additionally, at June 30, 2022, the Trading Division had forward soybean purchase contracts for approximately 14% of expected origination for various delivery periods through January 2024. Approximately 11% of the forward soybean purchases were with related parties.

5. DERIVATIVE INSTRUMENTS

The Company enters into corn, ethanol, natural gas, soybean oil 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.

Commodity Contracts

The Company enters into commodity-based derivatives, for corn, ethanol, natural gas, soybean oil and soybeans in order to protect cash flows from fluctuations caused by volatility in commodity prices and 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 June 30, 2022, the Ethanol Division had a net short (selling) position of 11,630,000 bushels of corn under derivative contracts used to hedge its forward corn purchase contracts, corn inventory and ethanol sales. These corn derivatives are traded on the Chicago Board of Trade as of June 30, 2022 and are forecasted to settle for various delivery periods through December 2023. The Ethanol Division had a net short (selling) position of 29,190,000 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 December 2022. The Ethanol Division also had a net long (buying) position of 6,600,000 gallons of soybean oil under derivative contracts used to hedge its future soybean oil sales. These soybean oil derivatives are traded on the Chicago Board of Trade and are, as of June 30, 2022, forecasted to settle for various delivery periods through August 2022. At June 30, 2022, the Trading Division also had a net short (selling) position of 1,010,000 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 June 30, 2022, forecasted to settle for various delivery periods through November 2023. These derivatives have not been designated as effective hedges for accounting purposes.

15

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

The following table provides balance sheet details regarding the Company's derivative financial instruments at June 30, 2022:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures & Options Derivatives	$	—	$	3,362,278
Corn Futures and Options Contracts	Futures & Options Derivatives	$	7,918,725	$	—
Soybean Oil Futures and Options Contracts	Futures & Options Derivatives	$	—	$	207,888
Soybean Futures and Options Contracts	Futures & Options Derivatives	$	—	$	382,570
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	1,273,242	$	167,947

As of June 30, 2022, the Company had approximately $8,420,000 of cash collateral (restricted cash) related to ethanol, corn, soybean oil, and soybean derivatives held by four brokers.

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2021:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures & Options Derivatives	$	150,339	$	—
Corn Futures and Options Contracts	Futures & Options Derivatives	$	—	$	2,331,889
Soybean Oil Futures and Options Contracts	Futures & Options Derivatives	$	84,474	$	—
Soybean Futures and Options Contracts	Futures & Options Derivatives	$	729,605	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	988,919	$	658,283

As of September 30, 2021, the Company had approximately $8,100,000 of cash collateral (restricted cash) related to ethanol, corn, soybean oil, and soybean derivatives held by two brokers.

16

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

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:

Instrument	Statement of Operations Location	Three Months Ended June 30, 2021		Nine Months Ended June 30, 2021		Three Months Ended June 30, 2022		Nine Months Ended June 30, 2022
Corn Futures and Options Contracts	Cost of Goods Sold	$	(11,918,847)	$	(25,309,021)	$	13,126,371	$	(3,762,026)
Ethanol Futures and Options Contracts	Revenues	493,042		647,795		2,410,473		(7,500,787)
Natural Gas Futures and Options Contracts	Cost of Goods Sold	—		(836)		—		(39,039)
Soybean Oil Futures and Options Contracts	Cost of Goods Sold	664,729		1,947,061		47,541		131,871
Soybean Futures and Options Contracts	Cost of Goods Sold	(2,625,108)		(8,513,405)		(866,771)		(4,871,604)
Soybean Forward Purchase and Sales Contracts	Cost of Goods Sold	(166,197)		1,376,887		(349,129)		1,044,353
Totals		$	(13,552,381)	$	(29,851,519)	$	14,368,485	$	(14,997,232)

6. FAIR VALUE MEASUREMENTS

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of June 30, 2022:

Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	7,918,725	$	7,918,725	$	7,923,305	$	—	$	—
Ethanol Futures and Options Contracts	$	(3,362,278)	$	(3,362,278)	$	(3,362,278)	$	—	$	—
Soybean Oil Futures and Options Contracts	$	(207,888)	$	(207,888)	$	(207,888)	$	—	$	—
Soybean Futures and Options Contracts	$	(382,570)	$	(382,570)	$	(382,570)	$	—	$	—
Soybean Forward Purchase Contracts	$	1,105,295	$	1,105,295	$	—	$	1,105,295	$	—
Soybean Inventory	$	5,353,898	$	5,353,898	$	—	$	5,353,898	$	—
Accounts Payable	$	(6,828,861)	$	(6,828,861)	$	—	$	(6,828,861)	$	—

17

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2021:

Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	(2,331,889)	$	(2,331,889)	$	(1,424,775)	$	(907,114)	$	—
Ethanol Futures and Options Contracts	$	150,339	$	150,339	$	150,339	$	—	$	—
Soybean Oil Futures and Options Contracts	$	84,474	$	84,474	$	84,474	$	—	$	—
Soybean Futures and Options Contracts	$	729,605	$	729,605	$	1,066,775	$	(337,170)	$	—
Soybean Forward Purchase Contracts	$	330,637	$	330,637	$	—	$	330,637	$	—
Soybean Inventory	$	4,850,131	$	4,850,131	$	—	$	4,850,131	$	—
Accounts Payable	$	(6,391,350)	$	(6,391,350)	$	—	$	(6,391,350)	$	—

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 futures and options Level 2 instruments by model-based techniques in which all significant inputs are observable in the markets noted above. Soybean forward purchase and sale contracts are reported at fair value using Level 2 inputs from current contract prices that are being issued by the Company.

Soybean inventory held in the trading division is reported at fair value using Level 2 inputs which are based on purchases and sales transactions that occurred on or near June 30, 2022 and September 30, 2021.

Accounts payable is generally stated at historical amounts, with the exception of approximately $6,829,000 and $6,391,000 at June 30, 2022 and September 30, 2021, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices. These payables are hybrid financial instruments for which the Company has elected the fair value option.

7.  BANK FINANCING

The Company has a loan agreement consisting of two loans, the Declining Revolving Loan (Declining Loan) and the Revolving Credit 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. The loan agreement assigns an interest rate based upon the U.S. prime rate published in the Wall Street Journal to each of the individual loans. The interest rates on each of the loans changes daily.

Declining Loan

The maximum availability of the Declining Loan was formerly $5,000,000 and such amount was to be available for working capital purposes. However, the maximum availability of the Declining Loan was increased from $5,000,000 to $36,000,000 in order to provide financing to fund the construction and installation of a high protein feed system at the plant. The interest rate on the Declining Loan is currently based on the prime rate minus five basis points (.05%) subject to a floor of 2.85%. The interest rate was 4.70% and 3.10% at June 30, 2022 and September 30, 2021, respectively. The Company is required to make monthly interest payments on the Declining Loan during the draw period. The principal balance of the Declining Loan is expected to be converted to term debt on or before February 1, 2024, to be repaid in 60 equal monthly installments based on a

18

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

ten year amortization period. In addition, the Company will be required to make mandatory annual prepayments on the term debt within 120 days following the end of each fiscal year beginning with the fiscal year ended September 30, 2024. The annual prepayment will be in the amount of the lesser of 40% of excess cash flow or $7,200,000, up to an aggregate amount paid of $18,000,000. There were no borrowings outstanding on the Declining Loan at June 30, 2022 or September 30, 2021.

Revolving Credit Loan

The Revolving Credit Loan has a limit of $20,000,000 supported by a borrowing base made up of the Company's corn, ethanol, dried distillers grain, corn oil and soybean 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 the prime rate minus twenty-five basis points (.25%) and is subject to a floor of 2.75%. The interest rate was 4.50% and 3.00% at June 30, 2022 and September 30, 2021, respectively. There were no borrowings outstanding on the Revolving Credit Loan at June 30, 2022 and September 30, 2021. The Revolving Credit Loan is set to mature on February 28, 2023.

These loans are subject to protective covenants, which require the Company to maintain various financial ratios. The covenants include a working capital requirement of $15,000,000, and a capital expenditures covenant that allows the Company $5,000,000 of expenditures per year without prior approval. The cost of the high protein feed system is excluded from the capital expenditures calculation until the principal balance of the Declining Loan converts to term debt. There is also a requirement to maintain a minimum fixed charge coverage ratio of no less than 1.15:1.0 measured quarterly. A debt service charge coverage ratio of no less than 1.25:1.0 in lieu of the fixed charge coverage ratio will apply for any reporting period that working capital is equal to or more than $23,000,000.

The Company had no long-term debt as of June 30, 2022 and September 30, 2021.

8. LEASES

The Company leases rail cars for its facility to transport ethanol and dried distillers grains to its end customers. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the three and nine months ended June 30, 2022, the Company’s weighted average discount rate was 3.68%. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of approximately 0.4 years to 1.4 years, which may include options to extend the lease when it is reasonably certain the Company will exercise those options. For the three and nine months ended June 30, 2022, the weighted average remaining lease term was 1.02 years. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The Company does not have any material finance lease obligations nor sublease agreements.

The following table summarizes the remaining maturities of the Company’s operating lease liabilities as of June 30, 2022:

For the Fiscal Year Ending September 30,
2022	$	927,639
2023	1,611,501
2024	198,000
Totals	2,737,140
Amount representing interest	(44,890)
Lease liabilities	$	2,692,250

19

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

For the three months ended June 30, 2022, the Company recorded operating lease costs of approximately $1,221,000 in cost of goods sold in the Company’s statement of operations. For the nine months ended June 30, 2022, the Company recorded operating lease costs of approximately $2,874,000 in costs of goods sold in the Company's statement of operations.

9. COMMITMENTS AND CONTINGENCIES

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 is 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. The rulings have since been affirmed on appeal and on February 22, 2021 the U.S. Supreme Court declined to review the decision. On March 3, 2022, the United States District Court ruled on attorney fees to be awarded to the defendants.

Rail Car Rehabilitation Costs

The Company leases 180 hopper rail cars under a multi-year agreement which ends in November 2023. Under the agreement, the Company is required to pay to rehabilitate each car for "damage" that is considered to be other than normal wear and tear upon turn in of the car(s) at the termination of the lease.

Company management has estimated total costs to rehabilitate the cars at June 30, 2022, to be approximately $1,967,000. During the nine months ended June 30, 2022, the Company has recorded a corresponding expense in cost of goods sold of approximately $227,000. The Company accrues the estimated cost of railcar damages over the term of the lease.

High Protein System Installation Agreement

On January 20, 2022, the Company contracted with ICM, Inc. to install a system to produce high protein feed which is expected to cost approximately $47,716,000, including recent change orders, and be funded from operations and from our current credit facilities as amended.

10. 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 primarily 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. During the nine months ended June 30, 2022, ethanol sales averaged approximately 65% of total revenues and corn costs averaged 66% 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 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.

20

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

Economic conditions for the ethanol industry have been favorable during fiscal year 2022. However, the military invasion of Ukraine by Russia in the second quarter of fiscal year 2022 and sanctions imposed by other countries as a result have created global economic uncertainty and contributed to increased inflation, significant market disruptions and increased volatility in commodity prices such as corn, oil and natural gas. The economic impact of this war and the potential effects on the Company's operating and financial performance is currently unknown. Additionally, there have been economic indicators that the United States could be facing a possible recession which have primarily resulted in interest rate hikes by the Federal Reserve in an attempt to reduce inflation. The Company continues to monitor economic conditions that might affect our profitability. The Company believes that its cash on hand and available debt from its lender will provide sufficient liquidity to meets its anticipated working capital, debt service and other liquidity needs through the next twelve months. If market conditions worsen affecting the Company's ability to profitably operate the plant or if the Company is unable to transport ethanol, it may be forced to further reduce the ethanol production rate or even temporarily shut down ethanol production altogether.

On May 23, 2022, the Company received an award of approximately $7,652,000 from the United States Department of Agriculture ("USDA") under the Biofuel Producer Program. The Biofuel Producer Program was created as part of the Coronavirus Aid Relief and Economic Security Act. The USDA announced that the funds were made available to provide economic relief to biofuels producers who faced unexpected market losses due to the COVID-19 pandemic and support a significant market for agricultural producers who supply products used in biofuel production.

This award was unconditional and was recognized as a component of other income on the statement of operations during the three and nine months ended June 30, 2022.

11. BUSINESS SEGMENTS

The Company has two reportable operating segments. Segment reporting is intended to give financial statement users a better view of how the Company manages and evaluates its businesses. The accounting policies for each segment are the same as those described in the summary of significant accounting policies. Segment income or loss does not include any allocation of shared-service costs.  Segment assets are those that are directly used in or identified with segment operations. Inter-segment balances and transactions have been eliminated.

The following tables summarize financial information by segment and provide a reconciliation of segment revenue, gross profit, grain inventories, operating income, and total assets:

21

CARDINAL ETHANOL, LLC

Notes to Condensed Unaudited Financial Statements

June 30, 2022

	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Revenue:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	110,898,770	$	99,758,386	$	340,575,754	$	238,544,279
Trading division	22,362,282		17,514,588		76,914,929		69,880,625
Total Revenue	$	133,261,052	$	117,272,974	$	417,490,683	$	308,424,904
	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Gross Profit:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	27,966,708	$	9,783,375	$	70,627,287	$	16,594,643
Trading division	686,948		(175,434)		3,096,547		2,304,981
Total Gross Profit	$	28,653,656	$	9,607,941	$	73,723,834	$	18,899,624
	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Operating Income:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	26,363,161	$	8,341,704	$	65,474,516	$	12,137,688
Trading division	369,705		(492,677)		2,144,818		1,353,252
Total Operating Income	$	26,732,866	$	7,849,027	$	67,619,334	$	13,490,940

	June 30, 2022		September 30, 2021
Grain Inventories:	(unaudited)
Ethanol division	$	24,475,078	$	2,995,914
Trading division	5,353,898		4,850,131
Total Grain Inventories	$	29,828,976	$	7,846,045
	June 30, 2022		September 30, 2021
Total Assets:	(unaudited)
Ethanol division	$	180,800,938	$	143,145,441
Trading division	5,389,187		8,793,484
Total Assets	$	186,190,125	$	151,938,925

22

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 nine month periods ended June 30, 2022, 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, 2021.

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, natural gas and other grains;

•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, corn oil and other grains;

•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;

•Competition from the increased use of electric vehicles;

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

•Volatile commodity and financial markets;

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

•Decreases in export demand due to the imposition of tariffs by foreign governments on ethanol, distillers grains and soybeans produced in the United States;

•Use by the EPA of small refinery exemptions;

•A slowdown in global and regional economic activity, demand for our products and the potential for labor shortages and shipping disruptions resulting from COVID-19; and

•Global economic uncertainty, inflation, market disruptions and increased volatility in commodity prices caused by the Russian invasion of Ukraine and resulting sanctions by the United States and other countries.

23

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 operating an ethanol plant in east central Indiana near Union City, Indiana. We began producing ethanol, distillers grains and corn oil at the plant in November 2008. In addition, we procure, transport and sell grain commodities through our grain trading business which began operations at the end of our fourth fiscal quarter of 2017.

On January 20, 2022, we entered into an Equipment Purchase and Installation Agreement (the "Agreement") with ICM, Inc. pursuant to which ICM has agreed to engineer, procure, construct, and install its high protein feed system and license to us its proprietary, patent-protected technology to use, operate and maintain the system. Pursuant to the Agreement and subsequent adjustments due to change orders executed by the parties, we expect to pay approximately $46,570,000, which is payable in installments. This price is subject to further adjustment in the event additional change orders are executed. We will also pay license fees of $10 per ton of PROTOMAX™ produced by the system for a period of 10 years. We expect to fund the project from operations and from our current credit facilities as amended. We currently anticipate installation to begin during the fourth quarter of our fiscal year 2022.

On May 17, 2022, our board of directors declared a cash distribution of $675 per membership unit to the holders of units of record at the close of business on May 17, 2022 for a total distribution of $9,859,050. The distribution was paid on May 31, 2022.

On May 23, 2022, we received an award from the USDA Biofuel Producer Program of approximately $7,652,000.

We have engaged with Vault 44.01 (USA) LLC ("Vault") to pursue the possible joint development of integrated carbon dioxide facilities, transportation infrastructure and a carbon sequestration site for the carbon dioxide emissions produced by our plant (the "CCS Project"). We have performed an initial study and assessment of the technical and economic feasibility of the CCS Project and optimal commercial structure and have taken certain steps towards implementing the CCS Project including filing the application for the necessary permitting. However, the CCS Project is still in its preliminary stages and is subject to many variables that could have a material effect on its feasibility and our ability to construct and complete the CCS Project.

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. If market conditions worsen affecting our ability to profitably operate the plant or if we are unable to transport ethanol, we may be forced to further reduce our ethanol production rate or even temporarily shut down ethanol production altogether.

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Results of Operations for the Three Months Ended June 30, 2022 and 2021

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 month ended June 30, 2022 and 2021:

	2022			2021
Statement of Operations Data	Amount		%	Amount		%
Revenue	$	133,261,052	100.0	$	117,272,974	100.0
Cost of Goods Sold	104,607,396		78.5	107,665,033		91.8
Gross Profit	28,653,656		21.5	9,607,941		8.2
Operating Expenses	1,920,790		1.4	1,758,914		1.5
Operating Income	26,732,866		20.1	7,849,027		6.7
Other Income (Expense)	7,440,861		5.6	(103,277)		(0.1)
Net Income	$	34,173,727	25.7	$	7,745,750	6.6

Revenue

Operating Segments

    Operating segments are defined as components of an enterprise for which separate financial information is available that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Based on the nature of the products, services and operations and the expected financial results, we review our operations within the two operating segments-the Ethanol Division and the Trading Division. Our revenues from operations from our Ethanol Division come from three primary sources: sales of fuel ethanol, distillers grains and corn oil. Revenues from operations of our Trading Division are derived from procuring, transporting and selling grain commodities.

    Our current lines of business and sources of revenue are the sale of ethanol, distillers grains, corn oil and and the trading of agricultural grains. We expect that PROTOMAX™, a high protein feed product, will become a significant new source of revenue once the installation of a system to manufacture high protein feed is complete and the system is operating.  Please refer to Item 1 - Financial Statements - Note 11 - Business Segments for more financial information about our financial reporting segments. Ethanol revenues in the ethanol division also include net gains or losses from derivatives. Net derivative gains or losses for corn, natural gas, and corn oil are included in cost of goods sold in the ethanol division and soybean gains or losses from derivatives are included in cost of goods sold in the trading division.

    The following table shows the sources of our total revenue from the two segments and the approximate percentage of revenues to total revenues in our unaudited condensed statements of operations for the three months ended June 30, 2022 and 2021:

	2022				2021
Revenue:	Amount		% of Total Revenues		Amount		% of Total Revenues
Ethanol division	$	110,898,770	83.2	%	$	99,758,386	85.1	%
Trading division	22,362,282		16.8	%	17,514,588		14.9	%
Total Revenue	$	133,261,052	100.0	%	$	117,272,974	100.0	%

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Ethanol Division

    The following table shows the sources of our revenues from our Ethanol Division for the three months ended June 30, 2022 and 2021:

	2022				2021
Revenue Source	Amount		% of Revenues		Amount		% of Revenues
Ethanol	$	84,706,603	76.4	%	$	79,943,407	80.2	%
Distillers Grains	18,261,386		16.5		14,701,286		14.7
Corn Oil	7,796,800		7.0		4,977,755		5.0
Carbon Dioxide	120,531		0.1		121,288		0.1
Other Revenue	13,450		—		14,650		—
Total Revenues	$	110,898,770	100.0	%	$	99,758,386	100.0	%

    Ethanol

    Our revenues from ethanol increased in the three months ended June 30, 2022 as compared to the the same period in 2021. This increase in revenues is primarily the result of an increase in the price per gallon of ethanol sold for the three months ended June 30, 2022 as compared to the same period in 2021. Revenue also includes the net gains or losses from derivatives related to the commodities purchased.

    The average price per gallon of ethanol sold for the three months ended June 30, 2022 was approximately 18% higher than the average price per gallon of ethanol sold for the same period in 2021. Ethanol market prices have been higher due to an increase in corn and oil prices for the current period compared to the same period in 2021 and strong foreign demand. However, corn and oil prices decreased towards the end of the current period primarily due to increasing concerns of an economic slowdown.

Management believes that ethanol prices will continue to be influenced by corn and energy prices, over-production, and inflationary factors. If corn and oil prices continue to decrease that would likely contribute to lower ethanol prices. Industry over-production due to positive operating margins could also have a negative effect on ethanol prices unless foreign or domestic demand reduce inventory levels. In addition, the Russian invasion of Ukraine and resulting sanctions by the United States and other countries have led to significant market disruptions and volatility in commodity prices. The impact of this volatility along with signs of a global economic slowdown on ethanol prices is difficult to predict.

    We experienced a decrease in ethanol gallons sold of approximately 9% for the three months ended June 30, 2022 as compared to the same period in 2021 resulting primarily from decreased ethanol production rates for the period due to scheduled maintenance resulting in down time at the plant. Our new ethanol recovery system became fully operational during the first quarter of fiscal year 2022 and we anticipate that equipment will result in an increase in efficiencies allowing us to achieve higher ethanol production rates going forward. However, installation of the high protein feed system is likely to require certain periods of down time in the future which could have a negative effect on ethanol production rates. We currently anticipate that installation will begin during the fourth quarter of fiscal year 2022. Management continues to monitor economic conditions carefully. If market conditions worsen affecting our ability to profitably operate the plant, we may be forced to reduce our ethanol production rate or even temporarily shut down ethanol production altogether.     

Distillers Grains

    Our revenues from distillers grains increased in the three months ended June 30, 2022 as compared to the same period in 2021. This increase in revenues is primarily the result of an increase in the average price per ton of distillers grains sold for the period ended June 30, 2022 as compared to the same period in 2021.

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    The average price per ton of distillers grains sold for the three months ended June 30, 2022 was approximately 25% higher than the average price per ton of distillers grains sold for the same period in 2021. This increase in the market price of distillers grains is primarily due to higher corn and soybean meal prices for the current period which resulted in end users seeking out distillers grains as the lower cost alternative. However, towards the end of the current period, corn and soybean prices decreased due to increasing concerns of an economic slowdown.

    Management anticipates that distillers grains prices will continue to be affected by the price of corn and soybean meal. A plentiful corn crop in the fall or an oversupply of soybean meal could lead to lower corn and soybean prices having a negative effect on distillers grains prices. Trade disputes with foreign countries, such as China, will continue to have a negative effect on distillers grains prices unless additional demand can be sustained from domestic or other foreign markets. In addition, the impact of the Russian invasion of Ukraine coupled with signs of a global economic slowdown on commodity prices is difficult to predict.

    We sold approximately 1% less tons of distillers grains in the three months ended June 30, 2022 as compared to the same period in 2021 resulting primarily from lower ethanol production levels for the period which resulted in decreased distillers grains production. An increase or decrease in ethanol production rates in the future would result in a corresponding change in distillers grains production.

Corn Oil

    Our revenues from corn oil sales increased in the three months ended June 30, 2022 as compared to the same period in 2021 which was mainly the result of an increase in the average price per pound for corn oil. The average price per pound of corn oil was approximately 62% higher for the three months ended June 30, 2022 as compared to the same period in 2021. Higher soybean oil prices along with increased biodiesel production had a positive effect on corn oil prices for the period as soybean oil is the primary competitor with distillers corn oil. However, towards the end of the current period, corn oil prices decreased due to increasing concerns of an economic slowdown.

    Management anticipates that corn oil prices will continue to follow soybean oil prices. Corn oil prices are also likely to be negatively affected by an industry increase in corn oil supply due to improved operating conditions. However, the extension of the biodiesel tax credit by Congress is likely to continue to have a positive impact on demand from biodiesel producers and corn oil prices. In addition, the impact of the Russian invasion of Ukraine coupled with signs of a global economic slowdown on commodity prices is difficult to predict.

    We also sold approximately 4% less pounds of corn oil in the three months ended June 30, 2022 as compared to the same period in 2021. An increase or decrease in ethanol production rates in the future would result in a corresponding change in corn oil production.

Trading Division

    The following table shows the sources of our revenues from our Trading Division for the three months ended June 30, 2022 and 2021:

	2022				2021
Revenue Source	Amount		% of Revenues		Amount		% of Revenues
Soybean Sales	$	22,346,382	99.9	%	$	17,499,713	99.9	%
Other Revenue	15,900		0.1		14,875		0.1
Total Revenues	$	22,362,282	100.0	%	$	17,514,588	100.0	%

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Soybeans

    During the three months ended June 30, 2022 revenues from our Trading Division were derived primarily from transporting and selling soybeans. Our revenues from soybeans sales increased in the three months ended June 30, 2022 as compared to the same period in 2021. This increase in revenues is the result of an increase in the average price per bushel of soybeans sold of approximately 6% due to a comparatively short national supply of soybeans resulting in higher futures prices for the three months ended June 30, 2022 as compared to the same period in 2021. We also sold approximately 20% more bushels during the three months ended June 30, 2022 as compared to the same period in 2021. The increase is attributable to capitalizing on the carry in the market to move soybeans. Management anticipates that soybean sales over the remainder of the fiscal year will be consistent with recent fiscal years.

Cost of Goods Sold

Ethanol Division

Our cost of goods sold for this division as a percentage of its total revenues was approximately 75% for the three months ended June 30, 2022 as compared to approximately 92% for the same period in 2021. This decrease in cost of goods sold as a percentage of revenues was the result of a substantially improved relationship between the prices of ethanol and corn, offset by increased natural gas costs for the three months ended June 30, 2022 as compared to the same period in 2021. 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 commodity purchases as well as our additional expense for our estimate of our rail car rehabilitation expense described below.

Corn

Our largest cost associated with the production of ethanol, distillers grains and corn oil is corn cost. During the three months ended June 30, 2022, we used approximately 1% less bushels of corn to produce our ethanol, distillers grains and corn oil as compared to the same period in 2021 due to lower ethanol production levels for the period. During the three months ended June 30, 2022, our average price paid per bushel of corn was approximately 2% higher as compared to the same period in 2021 due primarily to a smaller crop carryout in some areas from the 2021 harvest and concerns regarding predictions of the corn crop for fall of 2022. In addition, global economic uncertainty, market disruptions and increased volatility in commodity prices due to the Russian invasion of Ukraine and resulting sanctions by other countries have contributed to higher corn prices. However, towards the end of the current period, corn prices decreased due to a more favorable outlook for the size of the 2022 crop and increasing concerns of an economic slowdown.

Weather, world supply and demand, current and anticipated stocks, agricultural policy and other factors can contribute to volatility in corn prices. The impact on ethanol prices by the Russian military action in Ukraine and actions taken in response to the invasion is difficult to predict. Rising corn prices 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 June 30, 2022 as compared to the same period in 2021. This increase in cost of natural gas for the three months ended June 30, 2022 as compared to the same period in 2021 was primarily the result of an increase in natural gas prices. Our average price per MMBTU of natural gas was approximately 136% higher during the three months ended June 30, 2022 due to increased demand, an increase in the price of crude oil and increased volatility in prices due to the Russian invasion of Ukraine. However, towards the end of the current period, natural gas prices decreased due to increasing concerns of an economic slowdown. The increase in our cost of natural gas was partially offset by the use of approximately 3% less natural gas for the three months ended June 30, 2022 as compared to the same period in 2021 due to lower ethanol production for the period.

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    Management expects that natural gas prices will be dependent upon government policy and the severity of the winter weather. If the nation were to experience a recession this could also influence natural gas prices. In addition, natural gas supply shortages due to a catastrophic weather event or sanctions related to the Russian invasion of Ukraine could result in higher natural gas prices.

Rail Car Rehabilitation Costs

We lease 180 hopper rail cars under a multi-year agreement which ends in November 2023. Under the agreement, we are required to pay to rehabilitate each car for "damage" that is considered to be other than normal wear and tear upon turn in of each car at the termination of the lease. We have evaluated the condition of the cars and believe that it is probable that we may be assessed for damages incurred. During the three months ended June 30, 2022, we have recorded an expense in cost of goods sold of approximately $90,000. We accrue the estimated cost per railcar damages of $30,060 per month over the term of the lease. The accrued liability for these rehabilitation costs is approximately $1,967,000 at June 30, 2022.

Trading Division

    The following table shows the costs incurred to procure various agricultural commodities for our Trading Division for the three months ended June 30, 2022 and 2021:

	2022				2021
	Amount		% of Revenues		Amount		% of Revenues
Soybeans	$	21,675,334	96.9	%	$	17,690,022	101.0	%
Total Cost of Goods Sold	$	21,675,334	96.9	%	$	17,690,022	101.0	%

Soybeans

    During the three months ended June 30, 2022, our cost was primarily the procurement of soybeans sold. During the three months ended June 30, 2022, our average price paid per bushel of soybeans was approximately 13% higher as compared to the same period in 2021 due to concerns over a smaller carryout of soybean inventory from the 2021 harvest and increased demand from China. We also purchased approximately 47% more bushels of soybeans in the three months ended June 30, 2022 compared to 2021 due mostly to a cash price that was conducive to producer selling.

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 was approximately 1% for the three months ended June 30, 2022 and 2021, respectively. Operating expenses include salaries and benefits of administrative employees, insurance, taxes, professional fees, depreciation of trading division fixed assets, property taxes and other general administrative costs. Operating expenses on a per gallon basis increased somewhat for the three months ended June 30, 2022 compared to the same period in 2021. We have seen rises in the cost of salaries due to shortages in the local labor market and increases in insurance rates for property and casualty.

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Operating Income

    Our income from operations for the three months ended June 30, 2022 was approximately 20% of revenues as compared to 7% of revenues for the same period in 2021. The increase for the three months ended June 30, 2022 was primarily the result of positive ethanol to corn margins.

Other Income (Expense)

    Our other income was approximately 6% of revenues for the three months ended June 30, 2022 as compared to other expense of approximately (0.1)% of revenues for the three months ended June 30, 2021. Our other income consisted primarily of the receipt of an award from the USDA Biofuel Producer Program during the three months ended June 30, 2022.

Results of Operations for the Nine Months Ended June 30, 2022 and 2021

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 nine months ended June 30, 2022 and 2021:

	2022			2021
Condensed Statement of Operations Data (unaudited)	Amount		%	Amount		%
Revenue	$	417,490,683	100.0	$	308,424,904	100.0
Cost of Goods Sold	343,766,849		82.3	289,525,280		93.9
Gross Profit	73,723,834		17.7	18,899,624		6.1
Operating Expenses	6,104,500		1.5	5,408,684		1.8
Operating Income	67,619,334		16.2	13,490,940		4.3
Other Income	7,378,771		1.8	64,397		—
Net Income	$	74,998,105	18.0	$	13,555,337	4.3

Revenue

Operating Segments

    Operating segments are defined as components of an enterprise for which separate financial information is available that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Based on the nature of the products, services and operations and the expected financial results, we review our operations within the two operating segments-the Ethanol Division and the Trading Division. Our revenues from operations from our Ethanol Division come from three primary sources: sales of fuel ethanol, distillers grains and corn oil. Revenues from operations of our Trading Division are derived from procuring, transporting and selling grain commodities.

    Our current lines of business and sources of revenue are the sale of ethanol, distillers grains, corn oil and and the trading of agricultural grains. We expect that PROTOMAX™, a high protein feed product, will become a significant new source of revenue once the installation of a system to manufacture high protein feed is complete and the system is operating.  Please refer to Item 1 - Financial Statements - Note 11 - Business Segments for more financial information about our financial reporting segments. Ethanol revenues in the ethanol division also include net gains or losses from derivatives. Net derivative gains or losses for corn, natural gas, and corn oil are included in cost of goods sold in the ethanol division and soybean gains or losses from derivatives are included in cost of goods sold in the trading division.

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The following table shows the sources of our total revenue from the two segments and the approximate percentage of revenues to total revenues in our unaudited condensed statements of operations for the nine months ended June 30, 2022 and 2021:

	2022				2021
Revenue:	Amount		% of Total Revenues		Amount		% of Total Revenues
Ethanol division	$	340,575,754	81.6	%	$	238,544,279	77.3	%
Trading division	76,914,929		18.4		69,880,625		22.7
Total Revenue	$	417,490,683	100.0	%	$	308,424,904	100.0	%

Ethanol Division

    The following table shows the sources of our revenues from our Ethanol Division for the nine months ended June 30, 2022 and 2021:

	2022				2021
Revenue Source	Amount		% of Revenues		Amount		% of Revenues
Ethanol	$	272,527,573	80.0	%	$	182,551,687	76.5	%
Distillers Grains	47,450,158		13.9		43,552,750		18.3
Corn Oil	20,177,097		5.9		12,030,379		5.0
Carbon Dioxide	347,126		0.1		368,038		0.2
Other Revenue	73,800		0.1		41,425		—
Total Revenues	$	340,575,754	100.0	%	$	238,544,279	100.0	%

    Ethanol

    Our revenues from ethanol increased in the nine months ended June 30, 2022 as compared the to the same period in 2021. This increase in revenues is primarily the result of an increase in the price per gallon of ethanol sold and an increase in gallons of ethanol sold for the nine months ended June 30, 2022 as compared to the same period in 2021. Revenue also includes the net gains or losses from derivatives related to the commodities purchased.

    The average price per gallon of ethanol sold for the nine months ended June 30, 2022 was approximately 45% higher than the average price per gallon of ethanol sold for the same period in 2021. An increase in foreign and domestic demand, shipping disruptions attributed to labor shortages, and higher corn and oil prices have contributed to higher ethanol market prices for the current period. These increases were partially offset by higher ethanol production levels due to positive operating margins. In addition, corn and oil prices decreased towards the end of the period primarily due to increasing concerns of an economic slowdown having a negative effect on ethanol prices.

Management believes that ethanol prices will continue to be influenced by corn and energy prices, over-production, and inflationary factors. If corn and oil prices continue to decrease that would likely contribute to lower ethanol prices. Industry over-production due to positive operating margins could also have a negative effect on ethanol prices unless foreign or domestic demand reduce inventory levels. In addition, the Russian invasion of Ukraine and resulting sanctions by the United States and other countries have led to significant market disruptions and volatility in commodity prices. The impact of this volatility along with signs of a global economic slowdown on ethanol prices is difficult to predict.

We experienced an increase in ethanol gallons sold of approximately 3% for the nine months ended June 30, 2022 as compared to the same period in 2021 resulting primarily from increased ethanol production rates for the period. Our new ethanol recovery system became fully operational during the first quarter of fiscal year 2022 and we anticipate that equipment will result in an increase in efficiencies allowing us to achieve higher ethanol production rates going forward. However, installation of the high protein feed system is likely to require certain periods of down time in the future which could have a

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negative effect on ethanol production rates. Management continues to monitor economic conditions carefully. If market conditions worsen affecting our ability to profitably operate the plant, we may be forced to reduce our ethanol production rate or even temporarily shut down ethanol production altogether.     

Distillers Grains

    Our revenues from distillers grains increased in the nine months ended June 30, 2022 as compared to the same period in 2021. This increase in revenues is primarily the result of an increase in the average price per ton of distillers grains sold for the period ended June 30, 2022 as compared to the same period in 2021.

    The average price per ton of distillers grains sold for the nine months ended June 30, 2022 was approximately 9% higher than the average price per ton of distillers grains sold for the same period in 2021. Distillers' grains prices, while lower during the first three months of the period compared to 2021, have increased substantially since January 2022. This increase in the market price of distillers grains is primarily due to higher corn and soybean meal prices which resulted in end users seeking out distillers grains as the lower cost alternative. However, towards the end of the current period, corn and soybean prices decreased due to increasing concerns of an economic slowdown.

    Management anticipates that distillers grains prices will continue to be affected by the price of corn and soybean meal. A plentiful corn crop in the fall or an oversupply of soybean meal could lead to lower corn and soybean prices having a negative effect on distillers grains prices. Trade disputes with foreign countries, such as China, will continue to have a negative effect on distillers grains prices unless additional demand can be sustained from domestic or other foreign markets. In addition, the impact of the Russian invasion of Ukraine coupled with signs of a global economic slowdown on commodity prices is difficult to predict.

    We sold 0.37% more tons of distillers grains in the nine months ended June 30, 2022 as compared to the same period in 2021 resulting primarily from higher ethanol production levels for the period which resulted in increased distillers grains production. An increase or decrease in ethanol production rates in the future would result in a corresponding change in distillers grains production.

Corn Oil

    Our revenues from corn oil sales increased in the nine months ended June 30, 2022 as compared to the same period in 2021 which was mainly the result of an increase in the average price per pound for corn oil. The average price per pound of corn oil was approximately 68% higher for the nine months ended June 30, 2022 as compared to the same period in 2021. Higher soybean oil prices along with increased biodiesel production had a positive effect on corn oil prices for the period. Soybean oil is the primary competitor with distillers corn oil. However, towards the end of the current period, corn oil prices decreased due to increasing concerns of an economic slowdown.

    Management anticipates that corn oil prices will continue to follow soybean oil prices. Corn oil prices are also likely to be negatively affected by an industry increase in corn oil supply due to improved operating conditions. However, the extension of the biodiesel tax credit by Congress is likely to continue to have a positive impact on demand from biodiesel producers and corn oil prices. In addition, the impact of the Russian invasion of Ukraine coupled with signs of a global economic slowdown on commodity prices is difficult to predict.

    We also sold approximately the same amount of corn oil in the nine months ended June 30, 2022 as compared to the same period in 2021. An increase or decrease in ethanol production rates in the future would result in a corresponding change in distillers grains production.

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Trading Division

    The following table shows the sources of our revenues from our Trading Division for the nine months ended June 30, 2022 and 2021:

	2022				2021
Revenue Source	Amount		% of Revenues		Amount		% of Revenues
Soybean Sales	$	76,832,373	99.9	%	$	69,760,775	99.8	%
Other Revenue	82,556		0.1		119,850		0.2
Total Revenues	$	76,914,929	100.0	%	$	69,880,625	100.0	%

Soybeans

    During the nine months ended June 30, 2022 revenues from our Trading Division were derived primarily from transporting and selling soybeans. Our revenues from soybeans sales increased in the nine months ended June 30, 2022 as compared the to the same period in 2021. This increase in revenues is the result of an increase in the average price per bushel of soybeans sold of approximately 15% due to a comparatively short national supply of soybeans resulting in higher futures prices for the nine months ended June 30, 2022 as compared to the same period in 2021. This increase in price was partially offset by a decrease in bushels sold during the period of approximately 4% during the nine months ended June 30, 2022 as compared to the same period in 2021. The decrease is attributable to the short national supply of soybeans. Management anticipates that soybean sales over the remainder of the fiscal year will be consistent with recent fiscal years.

Cost of Goods Sold

Ethanol Division

    Our cost of goods sold for this division as a percentage of its total revenues was approximately 79% for the nine months ended June 30, 2022 as compared to approximately 94% for the same period in 2021. This decrease in cost of goods sold as a percentage of revenues was the result of a substantially improved relationship between the prices of ethanol and corn, offset by increased natural gas costs for the nine months ended June 30, 2022 as compared to the same period in 2021. 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 as well as our additional expense for our estimate of our rail car rehabilitation expense described below.

Corn

Our largest cost associated with the production of ethanol, distillers grains and corn oil is corn cost. During the nine months ended June 30, 2022, we used approximately 1% more bushels of corn to produce our ethanol, distillers grains and corn oil as compared to the same period in 2021 due to higher ethanol production levels for the period. During the nine months ended June 30, 2022, our average price paid per bushel of corn was approximately 23% higher as compared to the same period in 2021 due primarily to a smaller crop carryout in some areas from the 2021 harvest, concerns regarding predictions of the corn crop for fall of 2022 and increased export demand from China. In addition, global economic uncertainty, market disruptions and increased volatility in commodity prices due to the Russian invasion of Ukraine and resulting sanctions by other countries have contributed to higher corn prices towards the end of the current period. However, towards the end of the current period, corn prices decreased due to a more favorable outlook for the size of the 2022 crop and increasing concerns of an economic slowdown.

Weather, world supply and demand, current and anticipated stocks, agricultural policy and other factors can contribute to volatility in corn prices. The impact on ethanol prices by the Russian military action in Ukraine and actions taken in response to the invasion is difficult to predict. Rising corn prices have a negative effect on our operating margins unless the

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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 nine months ended June 30, 2022 as compared to the same period in 2021. This increase in cost of natural gas for the nine months ended June 30, 2022 as compared to the same period in 2021 was primarily the result of increased natural gas prices of approximately 71% for the nine months ended June 30, 2022 as compared to the same period in 2021. Our average price per MMBTU of natural gas was approximately 71% higher during the nine months ended June 30, 2022 as compared to the same period in 2021 primarily due to increased demand, an increase in the price of crude oil and increased volatility in prices due to the Russian invasion of Ukraine. However, towards the end of the current period, natural gas prices decreased due to increasing concerns of an economic slowdown.

    Management expects that natural gas prices will be dependent upon government policy and the severity of the winter weather. If the nation were to experience a recession this could also influence natural gas prices. In addition, natural gas supply shortages due to a catastrophic weather event or sanctions related to the Russian invasion of Ukraine could result in higher natural gas prices.

Rail Car Rehabilitation Costs

    We lease 180 hopper rail cars under a multi-year agreement which ends in November 2023. Under the agreement, we are required to pay to rehabilitate each car for "damage" that is considered to be other than normal wear and tear upon turn in of each car at the termination of the lease. We have evaluated the condition of the cars and believe that it is probable that we may be assessed for damages incurred. During the nine months ended June 30, 2022, we have recorded an expense in cost of goods sold of approximately $227,000. We accrue the estimated cost per railcar damages of $30,060 per month over the term of the lease. The accrued liability for these rehabilitation costs is approximately $1,967,000 at June 30, 2022.

Trading Division

    The following table shows the costs incurred to procure various agricultural commodities for our Trading Division for the nine months ended June 30, 2022 and 2021:

	2022				2021
	Amount		% of Revenues		Amount		% of Revenues
Soybeans	$	73,818,382	96.0	%	$	67,575,644	96.7	%
Total Cost of Goods Sold	$	73,818,382	96.0	%	$	67,575,644	96.7	%

    Soybeans

    During the nine months ended June 30, 2022, our cost was primarily the procurement of soybeans sold. During the nine months ended June 30, 2022, our average price paid per bushel of soybeans was approximately 15% higher as compared to the same period in 2021 due to concerns over a smaller carryout of soybean inventory from the 2021 harvest and increased demand from China. We also purchased approximately 4% less bushels of soybeans in the nine months ended June 30, 2022 compared to 2021 due mostly to a cash price that was conducive to producer selling.

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.

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Operating Expense

    Our operating expenses as a percentage of revenues was approximately 1% for the nine months ended June 30, 2022 as compared to operating expenses of approximately 2% of revenues for the same period in 2021. Operating expenses include salaries and benefits of administrative employees, insurance, taxes, professional fees, depreciation of trading division fixed assets, property taxes and other general administrative costs. Operating expenses on a per gallon basis increased slightly for the nine months ended June 30, 2022 compared to the same period in 2021. The primary reasons for this increase was an a rise in salaries because of the tight labor market locally and because of increases in property and casualty insurance rates. For the nine months ended June 30, 2021, we saw a rise in ethanol production, limiting the rise in these operating costs on a per gallon basis.

Operating Income

    Our income from operations for the nine months ended June 30, 2022 was approximately 16% of revenues as compared to operating income of approximately 4% of revenues for the same period in 2021. The increase in operating income for the nine months ended June 30, 2022 was primarily the result of positive ethanol to corn margins.

Other Income

    Our other income was approximately 2% of revenues for the nine months ended June 30, 2022 as compared to other income of 0.02% of revenues for the nine months ended June 30, 2021. Our other income consisted primarily of the receipt of an award from the USDA Biofuel Producer Program during the nine months ended June 30, 2022.

Changes in Financial Condition for the Nine Months Ended June 30, 2022

    The following table highlights the changes in our financial condition:

	June 30, 2022 (Unaudited)		September 30, 2021
Current Assets	$	111,648,012	$	76,439,260
Long Term Assets	$	74,542,113	$	75,499,665
Current Liabilities	$	25,257,400	$	23,741,046
Long-Term Liabilities	$	2,458,992	$	3,460,301
Members' Equity	$	158,473,733	$	124,737,578

    We experienced an increase in our current assets at June 30, 2022 as compared to September 30, 2021. This increase was primarily driven by an increase in cash, inventory, receivables and derivative accounts at June 30, 2022 due primarily to increased commodity prices at June 30, 2022 as compared to September 30, 2021. These higher prices raised the value of receivables and inventory, while increased profit margins improved cash balances.

    We experienced a decrease in our long term assets at June 30, 2022 as compared to September 30, 2021. Fluctuation was largely attributed to depreciation of plant, property and equipment and amortization of leased assets.

    We experienced an increase in our total current liabilities at June 30, 2022 as compared to September 30, 2021. This increase was primarily due to an increase in our accounts payable and derivative accounts due to higher commodity prices at June 30, 2022 as compared to September 30, 2021.

    We experienced a decrease in our long-term liabilities as of June 30, 2022 as compared to September 30, 2021 primarily as a result of the declining life on leases.

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Liquidity and Capital Resources

We have engaged ICM, Inc. to install a system to produce high protein feed which is currently expected to cost approximately $46,570,000 and be funded from operations and from additional financing from our lender. The agreement calls for a down payment and scheduled payments at key points during the construction and installation process, which we expect to begin during the fourth quarter of this fiscal year. We expect to fund the project from operations and from our current credit facilities as amended.

The prices of ethanol, corn, natural gas and soybeans have risen substantially over the last several months. We believe that we have sufficient cash and credit facilities to provide liquidity over the next twelve months. However, if the prices continue to rise, we may explore options with our primary lender to expand the funding of our working capital.

The following table shows cash flows for the nine months ended June 30, 2022 and 2021:

	2022		2021
Net cash provided by operating activities	$	55,444,151	$	11,151,508
Net cash used for investing activities	(9,728,816)		(3,483,402)
Net cash used for financing activities	(41,261,950)		(5,350,283)
Net increase in Cash and Restricted Cash	4,453,385		2,317,823
Cash and Restricted Cash, beginning of period	33,895,947		16,913,982
Cash and Restricted Cash, end of period	$	38,349,332	$	19,231,805

Cash Flow provided by Operating Activities

We experienced an increase in our cash flow from operating activities for the nine months ended June 30, 2022 as compared to the same period in 2021. This increase was primarily due to improved margins on our primary products for the nine months ended June 30, 2022 as compared to the same period in 2021.

Cash Flow used for Investing Activities

We used more cash in investing activities for the nine months ended June 30, 2022 as compared to the same period in 2021. This increase was primarily the result of increased amounts paid for construction in progress during the period ended June 30, 2022 as compared with the same period in 2021. The primary expenditure was a down payment on the ICM APP high protein project.

Cash Flow used for Financing Activities

We used more cash for financing activities for the nine months ended June 30, 2022 as compared to the same period in 2021. This increase was primarily the results of payments to our investors in the form of distributions coupled with decreased net borrowings during the nine months ended June 30, 2022.

    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, soybeans 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.  We expect operations to generate adequate cash flows to maintain operations.

Short and Long Term Debt Sources

We have a loan agreement consisting of two loans, the Declining Revolving Loan ("Declining Loan") and the Revolving Credit 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,

36

and assignment of material contracts. Please refer to Item 1 - Financial Statements, Note 7 - Bank Financing for additional details.

Declining Loan

    The maximum availability of the Declining Loan was formerly $5,000,000 and such amount was to be available for working capital purposes. However, the maximum availability of the Declining Loan was increased from $5,000,000 to $36,000,000 in order to provide financing to fund the construction and installation of a new high protein feed system at the plant. The interest rate on the Declining Loan is currently based on the prime rate minus five basis points (.05%) subject to a floor of 2.85%. The interest rate was 4.70% and 3.10% at June 30, 2022 and September 30, 2021, respectively. We will be required to make monthly interest payments on the Declining Loan during the draw period. The principal balance of the Declining Loan is expected to be converted to term debt on or before February 1, 2024, to be repaid in 60 equal monthly installments based on a ten year amortization period. In addition, we will be required to make mandatory annual prepayments on the term debt within 120 days following the end of each fiscal year beginning with the fiscal year ended September 30, 2024. The annual prepayment will be in the amount of the lesser of 40% of excess cash flow or $7,200,000, up to an aggregate amount paid of $18,000,000. There were no borrowings outstanding on the Declining Loan at June 30, 2022 or September 30, 2021.

Revolving Credit Loan

The Revolving Credit Loan has a limit of $20,000,000 supported by a borrowing base made up of our corn, ethanol, dried distillers grain, corn oil and soybean 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 the prime rate minus twenty-five basis points (.25%) and is subject to a floor of 2.75%. The interest rate was 4.50% and 3.00% at June 30, 2022 and September 30, 2021, respectively. There were no borrowings outstanding at June 30, 2022 and September 30, 2021. The Revolving Credit Loan is set to mature on February 28, 2023.

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 $23,000,000, 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. The cost of the high protein feed system is excluded from the capital expenditures calculation until the principal balance of the Declining Loan converts to term debt.

We are complying with our financial covenants and the other terms of our loan agreements at June 30, 2022. 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 for the next twelve months. 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.

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Capital Improvements

    We are planning various capital projects scheduled for the 2022 fiscal year in order to make certain improvements to the ethanol plant and maintain the facility. These improvements include updates to the grain pits, yeast props, economizers, cyber security, and other small miscellaneous projects. We have also invested in an ethanol recovery system, costing approximately $2,400,000. The project was funded through operations and was completed and placed into service during the first quarter of fiscal year 2022.

We have also engaged ICM, Inc. to install a system to produce high protein feed which is currently expected to cost approximately $46,570,000, including recent change orders, and be funded from operations and from and our current credit facilities as amended. We will also license from ICM technology to use, operate and maintain the system and expect to pay license fees of $10 per ton of PROTOMAX™ produced for a period of 10 years. We currently anticipate that installation will commence during the fourth quarter of our 2022 fiscal year.

Development Agreement

    In September 2007, we 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 we pay 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 our direction, for the plant. We do 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.

Grants

On May 23, 2022, we received an award from the USDA Biofuel Producer Program of approximately $7,652,000. The Biofuel Producer Program was created as part of the Coronavirus Aid Relief and Economic Security Act. The USDA announced that the funds were made available to provide economic relief to biofuels producers who faced unexpected market losses due to the COVID-19 pandemic and support a significant market for agricultural producers who supply products used in biofuel production.

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; inventories; long-lived assets, railcar rehabilitation costs and inventory purchase commitments.  The Ethanol Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, inventories, patronage dividends, long lived assets, railcar rehabilitation costs, and inventory purchase commitments. The Trading Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, the valuation of inventory purchase and sale commitments derivatives and inventory at market. An in-depth description of these can be found in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021.  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 nine months ended June 30, 2022.

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

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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 Declining Loan and Revolving Credit Loan which bear variable interest rates. There were no borrowings outstanding on the Declining Loan or on the Revolving Credit Loan at June 30, 2022.

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 distillers 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.

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.

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 nine months ended June 30, 2022 and 2021:

	Three Months Ended June 30, 2022		Nine Months Ended June 30, 2022		Three Months Ended June 30, 2021		Nine Months Ended June 30, 2021
Corn Derivative Contracts	$	13,126,371	$	(3,762,026)	$	(11,918,847)	$	(25,309,021)
Ethanol Derivative Contracts	2,410,473		(7,500,787)		493,042		647,795
Natural Gas Derivative Contracts	—		(39,039)		—		(836)
Soybean Oil Derivative Contracts	47,541		131,871		664,729		1,947,061
Soybean Derivative Contracts	(866,771)		(4,871,604)		(2,625,108)		(8,513,405)
Soybean Forward Purchase and Sales Contracts	(349,129)		1,044,353		(166,197)		1,376,887
Totals	$	14,368,485	$	(14,997,232)	$	(13,552,381)	$	(29,851,519)

These soybean forward purchase 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. 

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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, natural gas and soybeans 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, corn oil and soybeans prices as of June 30, 2022 net of the forward and future contracts used to hedge our market risk. The volumes are based on our expected use, purchase and sale of these commodities for a one year period from June 30, 2022. The results of this analysis, which may differ from actual results, are approximately as follows:

	Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price as of June 30, 2022	Approximate Adverse Change to Income
Natural Gas	1,093,000	MMBTU	10%	$	592,000
Ethanol	138,000,000	Gallons	10%	$	35,397,000
Corn	37,495,000	Bushels	10%	$	26,397,000
DDGs	306,000	Tons	10%	$	7,044,000
Corn Oil	41,074,000	Pounds	10%	$	2,875,000
Soybeans	4,666,000	Bushels	10%	$	7,890,000

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), Jeffrey 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 June 30, 2022.  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

40

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 third quarter ended of our 2022 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 Cardinal's operation of the oil recovery system manufactured and installed by ICM, Inc. infringes a patent claimed by GS CleanTech. GS CleanTech subsequently filed actions against others for infringement of its patent rights, adding several additional patents and successfully petitioned for the cases to be joined in a multi-district litigation. ICM, Inc. agreed to indemnify Cardinal and defend the lawsuit at no expense to Cardinal. On October 23, 2014, the United States District Court (the "Court") granted summary judgment finding that all of the patents claimed by GS CleanTech were invalid and that Cardinal had not infringed. In addition, on September 15, 2016, the 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. These rulings were subsequently affirmed on appeal and on February 22, 2021, the U.S. Supreme Court declined to review the decision. On March 3, 2022, the United States District Court ruled on attorney fees to be awarded to the defendants.

Item 1A.    Risk Factors

    The following risk factor is provided due to material changes from the risk factors previously disclosed in our annual report on Form 10-K for the fiscal year ended September 30, 2021. The risk factor set forth below should be read in conjunction with the risk factors section and the Management's Discussion and Analysis section included in our annual report on Form 10-K

for the fiscal year ended September 30, 2021.

    The invasion of Ukraine by Russia and resulting sanctions by the United States, European Union and other countries have contributed to inflation, market disruptions and increased volatility in commodity prices in the United States and could lead to a slowdown in global economic growth. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. In response to the attacks on Ukraine, sanctions and other penalties have been levied by the United States, European Union and other countries and additional sanctions and penalties have been proposed. The invasion by Russia and resulting sanctions have created global economic uncertainty and resulted in increased inflation, significant market disruptions and increased volatility in commodity prices such as corn, oil and natural gas. Although the duration and extent of the ongoing military conflict is highly unpredictable and the magnitude of the potential economic impact is currently unknown, Russian military actions and resulting sanctions could have a negative effect on our financial condition and operating results.

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

None.

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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.

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.*
101.INS	Inline XBRL Instance Document - the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	Inline XBRL Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101).

*    Filed herewith.

**    Furnished herewith.

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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:	August 4, 2022	/s/ Jeffrey Painter
		Jeffrey Painter
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:	August 4, 2022	/s/ William Dartt
		William Dartt
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EX-31.1

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

(SECTION 302 CERTIFICATION)

I, Jeffrey 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:	August 4, 2022	/s/ Jeffrey Painter
		Jeffrey 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:	August 4, 2022	/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 June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey 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/ Jeffrey Painter
Jeffrey Painter, Chief Executive Officer
(President and Principal Executive Officer)
Dated:	August 4, 2022

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 June 30, 2022, 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:	August 4, 2022

XML

Cover - shares	9 Months Ended
	Jun. 30, 2022	Aug. 04, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	000-53036
Entity Registrant Name	CARDINAL ETHANOL, LLC
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	20-2327916
Entity Address, Address Line One	1554 N. County Road 600 E.
Entity Address, City or Town	Union City
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	47390
City Area Code	765
Local Phone Number	964-3137
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,606
Entity Central Index Key	0001352081
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Balance Sheets - USD ($)	Jun. 30, 2022	Sep. 30, 2021
Current Assets
Cash	$ 29,929,343	$ 25,798,906
Restricted cash	8,419,989	8,097,041
Trade accounts receivable	24,624,227	13,386,410
Miscellaneous receivables	573,890	404,273
Inventories	38,337,108	26,587,032
Prepaid and other current assets	571,488	212,261
Total current assets	111,648,012	76,439,260
Property, Plant, and Equipment, Net	70,620,993	69,399,645
Other Assets
Operating lease right of use asset, net	2,661,350	4,840,250
Investment	1,259,770	1,259,770
Total other assets	3,921,120	6,100,020
Total Assets	186,190,125	151,938,925
Current Liabilities
Due to broker	104,311	0
Accounts payable	4,359,417	3,564,614
Accounts payable - grain	12,574,716	11,942,723
Accrued expenses	1,898,478	2,111,295
Operating lease liability current	2,199,795	3,132,242
Total current liabilities	25,257,400	23,741,046
Long-Term Liabilities
Operating lease long-term liabilities	492,455	1,709,621
Liability for railcar rehabilitation costs	1,966,537	1,750,680
Total long-term liabilities	2,458,992	3,460,301
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	87,561,520	53,825,365
Total members' equity	158,473,733	124,737,578
Total Liabilities and Members’ Equity	186,190,125	151,938,925
Futures & options derivatives
Current Assets
Derivatives	7,918,725	964,418
Current Liabilities
Derivatives	3,952,736	2,331,889
Forward purchase/sales derivatives
Current Assets
Derivatives	1,273,242	988,919
Current Liabilities
Derivatives	$ 167,947	$ 658,283

XML

Condensed Balance Sheets (Parenthetical) - shares	Jun. 30, 2022	Sep. 30, 2021
Statement of Financial Position [Abstract]
Capital units, authorized (in shares)	14,606	14,606
Capital units, issued (in shares)	14,606	14,606
Capital units, outstanding (in shares)	14,606	14,606

XML

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Revenues	$ 133,261,052	$ 117,272,974	$ 417,490,683	$ 308,424,904
Cost of Goods Sold	104,607,396	107,665,033	343,766,849	289,525,280
Gross Profit	28,653,656	9,607,941	73,723,834	18,899,624
Operating Expenses	1,920,790	1,758,914	6,104,500	5,408,684
Operating Income	26,732,866	7,849,027	67,619,334	13,490,940
Other Income (Expense)
Interest expense	(3,893)	(61,884)	(3,993)	(137,959)
Miscellaneous income (expense)	7,444,754	(41,393)	7,382,764	202,356
Total	7,440,861	(103,277)	7,378,771	64,397
Net Income	$ 34,173,727	$ 7,745,750	$ 74,998,105	$ 13,555,337
Weighted Average Units Outstanding - basic (in shares)	14,606	14,606	14,606	14,606
Weighted Average Units Outstanding - diluted (in shares)	14,606	14,606	14,606	14,606
Net Income Per Unit - basic (in dollars per shares)	$ 2,340	$ 530	$ 5,135	$ 928
Net Income Per Unit - diluted (in dollars per shares)	2,340	530	5,135	928
Distributions Per Unit (in dollars per shares)	$ 675	$ 200	$ 2,825	$ 450

XML

Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash Flows from Operating Activities
Net income	$ 74,998,105	$ 13,555,337
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	8,502,992	8,436,814
Change in fair value of commodity derivative instruments	(6,108,119)	4,604,890
Loss on sale of equipment	0	906,785
Forgiveness of Paycheck Protection Program loan	0	(856,665)
Change in operating assets and liabilities:
Trade accounts receivable	(11,237,817)	(10,100,285)
Miscellaneous receivables	(169,617)	92,701
Inventories	(11,750,076)	(6,109,172)
Prepaid and other current assets	(359,227)	(285,104)
Due to broker	104,311	(15,000)
Accounts payable	804,714	(287,924)
Accounts payable - grain	631,993	1,180,496
Accrued expenses	(188,965)	(194,925)
Liability for railcar rehabilitation costs	215,857	223,560
Net cash provided by operating activities	55,444,151	11,151,508
Cash Flows from Investing Activities
Payments for construction in progress	(9,728,816)	(3,483,402)
Net cash used for investing activities	(9,728,816)	(3,483,402)
Cash Flows from Financing Activities
Distributions paid	(41,261,950)	(6,572,700)
Proceeds from revolving credit loan	9,841,117	106,024,134
Payments on revolving credit loan	(9,841,117)	(106,024,134)
Proceeds from long-term debt	0	1,222,417
Net cash used for financing activities	(41,261,950)	(5,350,283)
Net Increase in Cash and Restricted Cash	4,453,385	2,317,823
Cash and Restricted Cash – Beginning of Period	33,895,947	16,913,982
Cash and Restricted Cash – End of Period	38,349,332	19,231,805
Reconciliation of Cash and Restricted Cash
Cash - Balance Sheet	29,929,343	7,695,998
Restricted Cash - Balance Sheet	8,419,989	11,535,807
Cash and Restricted Cash	38,349,332	19,231,805
Supplemental Cash Flow Information
Interest paid	3,993	126,365
Supplemental Disclosure of Non-cash Investing and Financing Activities
Construction in process included in accrued expenses and accounts payable	$ 19,580	$ 220,736

XML

Condensed Statements of Changes in Members' Equity (Unaudited) - USD ($)	Total	Member Contributions	Retained Earnings
Beginning balance at Sep. 30, 2020	$ 108,947,350	$ 70,912,213	$ 38,035,137
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	(1,055,854)	0	(1,055,854)
Member Distributions	(1,460,600)	0	(1,460,600)
Ending balance at Dec. 31, 2020	106,430,896	70,912,213	35,518,683
Beginning balance at Sep. 30, 2020	108,947,350	70,912,213	38,035,137
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	13,555,337
Ending balance at Jun. 30, 2021	115,929,987	70,912,213	45,017,774
Beginning balance at Dec. 31, 2020	106,430,896	70,912,213	35,518,683
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	6,865,441	0	6,865,441
Member Distributions	(2,190,900)	0	(2,190,900)
Ending balance at Mar. 31, 2021	111,105,437	70,912,213	40,193,224
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	7,745,750	0	7,745,750
Member Distributions	(2,921,200)	0	(2,921,200)
Ending balance at Jun. 30, 2021	115,929,987	70,912,213	45,017,774
Beginning balance at Sep. 30, 2021	124,737,578	70,912,213	53,825,365
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	32,395,164	0	32,395,164
Member Distributions	(9,493,900)	0	(9,493,900)
Ending balance at Dec. 31, 2021	147,638,842	70,912,213	76,726,629
Beginning balance at Sep. 30, 2021	124,737,578	70,912,213	53,825,365
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	74,998,105
Ending balance at Jun. 30, 2022	158,473,733	70,912,213	87,561,520
Beginning balance at Dec. 31, 2021	147,638,842	70,912,213	76,726,629
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	8,429,214	0	8,429,214
Member Distributions	(21,909,000)	0	(21,909,000)
Ending balance at Mar. 31, 2022	134,159,056	70,912,213	63,246,843
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	34,173,727	0	34,173,727
Member Distributions	(9,859,050)	0	(9,859,050)
Ending balance at Jun. 30, 2022	$ 158,473,733	$ 70,912,213	$ 87,561,520

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Jun. 30, 2022

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, 2021, 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. During the nine months ended June 30, 2022 and 2021, the Company produced approximately 101,534,000 and 100,050,000 gallons of ethanol, respectively.

In addition, the Company procures, transports, and sells grain commodities through grain operations.

Reportable Segments

Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.   Based on the related business nature and expected financial results criteria set forth in ASC 280, the Company has two reportable operating segments for financial reporting purposes.

•Ethanol Division. Based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plant, including the production and sale of ethanol and its co-products, are aggregated into one financial reporting segment.

•Trading Division. The Company has a grain loading facility within the Company's single site to buy, hold and sell inventories of agricultural grains, primarily soybeans. The Company performs no additional processing of these grains, unlike the corn inventory the Company holds and uses in ethanol production. The activities of buying, selling and holding of grains other than for ethanol and co-product production comprise this financial reporting segment.

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 Ethanol Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, inventories, the assumptions used in the analysis of the impairment of long lived assets, railcar rehabilitation costs, and inventory purchase commitments.

The Trading Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, the valuation of inventory purchase and sale commitment derivatives and inventory at market.

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. Actual results could differ materially from those estimates.

Cash

The Company maintains its accounts primarily at two financial institutions. At times throughout the year the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

Restricted Cash

As a part of its commodities hedging activities, the Company is required to maintain cash balances with its 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, the Company records the cash maintained with the traders in the margin accounts as restricted cash. Since this cash is immediately available upon request when there is a margin excess, the Company considers 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. At June 30, 2022 and September 30, 2021, the Company determined that an allowance for doubtful accounts was not necessary.

Inventories

Ethanol Division (see Reportable Segments) inventories consist of raw materials, work in process, finished goods and spare 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 selling costs.

Trading Division (see Reportable Segments) inventories consist of grain. Soybeans were the only grains held and traded at June 30, 2022 and September 30, 2021. These inventories are stated at market value less estimated selling costs, which may include reductions for quality.

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.

The Company has various capital projects scheduled for the 2022 fiscal year in order to make certain improvements to the ethanol plant and maintain the facility. These improvements include updates to the grain pits, yeast props, economizers, cyber security, and other small miscellaneous projects. The Company also invested in an ethanol recovery system, costing approximately $2,400,000. The project was funded through operations and was completed and placed into service during the first quarter of fiscal year 2022. The Company has plans to install a high protein feed system, costing approximately $46,570,000, which is payable in installments and is subject to adjustments pursuant to change orders. The Company expects to fund the project from operations and from current credit facilities as amended.

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. Management evaluated and determined no impairment write-downs were considered necessary for the nine months ended June 30, 2022 and 2021.

Investment

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 and cash equity redemptions received. Non cash patronage dividends are recognized when received and included within revenue in the condensed statements of operations.

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The Company's contracts primarily consist of agreements with marketing companies and other customers as described below. The Company's performance obligations consist of the delivery of ethanol, distillers' grains, corn oil, soybeans and carbon dioxide to its customers. The consideration the Company receives for these products is fixed based on current observable market prices at the Chicago Mercantile Exchange, generally, and adjusted for local market differentials. The Company's contracts have specific delivery modes, rail or truck, and dates. Revenue is recognized when the Company delivers the products to the mode of transportation specified in the contract, at the transaction price established in the contract, net of commissions, fees, and freight. The Company sells each of the products via different marketing channels as described below.

•Ethanol. The Company sells its ethanol via a marketing agreement with Murex, LLC. Murex markets one hundred percent of the Company's ethanol production based on agreements with end users at prices agreed upon mutually among the end user, Murex and the Company. Murex then provides a schedule of deliveries required and an order for each rail car or tankers needed to fulfill their commitment with the end user. These are individual performance obligations of the Company. The marketing agreement calls for control and title to pass when the delivery vehicle is filled. Revenue is recognized then at the price in the agreement with the end user, net of commissions, freight, and insurance.

•Distillers grains. The Company engages another third-party marketing company, CHS, Inc, to market one hundred percent of the distillers grains it produces at the plant. The process for selling the distillers grains is like that of ethanol, except that CHS takes title and control once a rail car is released to the railroad or a truck is released from the Company's scales. Prices are agreed upon among the three parties, and CHS provides schedules and orders representing performance obligations. Revenue is recognized net of commissions, freight, and fees.

•Distillers corn oil (corn oil). The Company sells its production of corn oil directly to commercial customers. The customer is provided with a delivery schedule and pick up orders representing performance obligations. These are fulfilled when the customer’s driver picks up the scheduled load. The price is agreed upon at the time each contract is made, and the Company recognizes revenue at the time of delivery at that price.

•Carbon dioxide. The Company sells a portion of the carbon dioxide it produces to a customer that maintains a plant on-site for a set price per ton. Delivery is defined as transference of the gas from the Company's stream to their plant.

•Soybeans and other grains. The Company sells soybeans exclusively to commercial mills, processors or grain traders. Contracts are negotiated directly with the parties at prices based on negotiated prices.

Cost of Goods Sold

Cost of goods sold include corn, trading division grains, natural gas and other components which includes processing ingredients, electricity, railcar lease, railcar maintenance, depreciation of ethanol production fixed assets and wages, salaries and benefits of production personnel.

Operating Expenses

Operating expenses include wages, salaries and benefits of administrative employees at the plant, insurance, professional fees, depreciation of trading division fixed assets, property taxes and similar costs.

Derivative Instruments

From time to time the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives in the balance sheet at fair value.

In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in the statement of operations, depending on the item being hedged.

Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting and reporting requirements, and therefore, are not marked to market in our financial statements.

The Company has elected for its Ethanol Division to apply the normal purchase normal sale exemption to all forward commodity contracts. For the Trading Division, the Company has elected not to apply the normal purchase normal sale exemption to its forward purchase and sales contracts and therefore, marks these derivative instruments to market.

Net Income (Loss) per Unit

Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units outstanding during the period. Diluted net income (loss) per unit is computed by dividing net income (loss) 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 (loss) per unit are the same.

XML

REVENUE

9 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Revenue Recognition

Revenue is recognized at a single point in time when the Company satisfies its performance obligation under the terms of a contract with a customer. Generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration expected, as specified in the contract with a customer, to be received in exchange for transferring goods or providing services.

Revenue by Source

All revenues from contracts with customers under ASC Topic 606 are recognized at a point in time.

The following tables disaggregate revenue by major source for the three and nine months ended June 30, 2022 and 2021:

Three Months Ended June 30, 2022 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	84,706,603	$	—	$	84,706,603
Distillers' grains	18,261,386		—		18,261,386
Corn Oil	7,796,800		—		7,796,800
Carbon Dioxide	120,531		—		120,531
Other Revenue	13,450		15,900		29,350
Total revenues from contracts with customers	110,898,770		15,900		110,914,670
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		22,346,382		22,346,382
Total revenues from contracts accounted for as derivatives	—		22,346,382		22,346,382
Total Revenues	$	110,898,770	$	22,362,282	$	133,261,052

Nine Months Ended June 30, 2022 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	272,527,573	$	—	$	272,527,573
Distillers' grains	47,450,158		—		47,450,158
Corn Oil	20,177,097		—		20,177,097
Carbon Dioxide	347,126		—		347,126
Other Revenue	73,800		82,556		156,356
Total revenues from contracts with customers	340,575,754		82,556		340,658,310
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		76,832,373		76,832,373
Total revenues from contracts accounted for as derivatives	—		76,832,373		76,832,373
Total Revenues	$	340,575,754	$	76,914,929	$	417,490,683

Three Months Ended June 30, 2021 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	79,943,407	$	—	$	79,943,407
Distillers' grains	14,701,286		—		14,701,286
Corn Oil	4,977,755		—		4,977,755
Carbon Dioxide	121,288		—		121,288
Other Revenue	14,650		14,875		29,525
Total revenues from contracts with customers	99,758,386		14,875		99,773,261
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		17,499,713		17,499,713
Total revenues from contracts accounted for as derivatives	—		17,499,713		17,499,713
Total Revenues	$	99,758,386	$	17,514,588	$	117,272,974

Nine Months Ended June 30, 2021 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	182,551,687	$	—	$	182,551,687
Distillers' grains	43,552,750		—		43,552,750
Corn Oil	12,030,379		—		12,030,379
Carbon Dioxide	368,038		—		368,038
Other Revenue	41,425		119,850		161,275
Total revenues from contracts with customers	238,544,279		119,850		238,664,129
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		69,760,775		69,760,775
Total revenues from contracts accounted for as derivatives	—		69,760,775		69,760,775
Total Revenues	$	238,544,279	$	69,880,625	$	308,424,904

(1) Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC Topic 606), where the company recognizes revenue when control of the inventory is transferred within the meaning of ASC Topic 606 as required by ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets.

Payment Terms

The Company has contractual payment terms with each respective marketer that sells ethanol and distillers grains. These terms are generally 7 - 14 days after the week of the transfer of control.

The Company has standard payment terms of net 10 days for its sale for corn oil.

The Company has standard payments terms due upon delivery for its sale of soybeans.

The contractual terms with the carbon dioxide customer calls for an annual settlement.

Shipping and Handling Costs

Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of goods sold. Accordingly, amounts billed to customers for such costs are included as a component of revenue.

Contract Liabilities

The Company records unearned revenue when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of its contracts with customers.

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CONCENTRATIONS

9 Months Ended

Jun. 30, 2022

Risks and Uncertainties [Abstract]

CONCENTRATIONS

CONCENTRATIONSTwo major customers accounted for approximately 84% and 90% of the outstanding accounts receivable balance at June 30, 2022 and September 30, 2021, respectively. These same two customers accounted for approximately 77% of revenue for the nine months ended June 30, 2022 and 73% of revenue for the nine months ended June 30, 2021.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 primarily 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. During the nine months ended June 30, 2022, ethanol sales averaged approximately 65% of total revenues and corn costs averaged 66% 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 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.

Economic conditions for the ethanol industry have been favorable during fiscal year 2022. However, the military invasion of Ukraine by Russia in the second quarter of fiscal year 2022 and sanctions imposed by other countries as a result have created global economic uncertainty and contributed to increased inflation, significant market disruptions and increased volatility in commodity prices such as corn, oil and natural gas. The economic impact of this war and the potential effects on the Company's operating and financial performance is currently unknown. Additionally, there have been economic indicators that the United States could be facing a possible recession which have primarily resulted in interest rate hikes by the Federal Reserve in an attempt to reduce inflation. The Company continues to monitor economic conditions that might affect our profitability. The Company believes that its cash on hand and available debt from its lender will provide sufficient liquidity to meets its anticipated working capital, debt service and other liquidity needs through the next twelve months. If market conditions worsen affecting the Company's ability to profitably operate the plant or if the Company is unable to transport ethanol, it may be forced to further reduce the ethanol production rate or even temporarily shut down ethanol production altogether.

On May 23, 2022, the Company received an award of approximately $7,652,000 from the United States Department of Agriculture ("USDA") under the Biofuel Producer Program. The Biofuel Producer Program was created as part of the Coronavirus Aid Relief and Economic Security Act. The USDA announced that the funds were made available to provide economic relief to biofuels producers who faced unexpected market losses due to the COVID-19 pandemic and support a significant market for agricultural producers who supply products used in biofuel production.

This award was unconditional and was recognized as a component of other income on the statement of operations during the three and nine months ended June 30, 2022.

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INVENTORIES

9 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Inventories consist of the following as of:

	June 30, 2022 (Unaudited)		September 30, 2021
Ethanol Division:
Raw materials	$	24,475,078	$	2,995,914
Work in progress	1,555,309		2,331,419
Finished goods	2,985,976		12,431,375
Spare parts	3,966,847		3,978,193
Ethanol Division Subtotal	$	32,983,210	$	21,736,901
Trading Division:
Grain inventory	$	5,353,898	$	4,850,131
Trading Division Subtotal	5,353,898		4,850,131
Total Inventories	$	38,337,108	$	26,587,032

The Company did not have a net realizable value write-down of ethanol inventory for the nine months ended June 30, 2022. The Company had a net realizable write-down of ethanol inventory of approximately $57,000 for the nine months ended June 30, 2021.

In the ordinary course of its ethanol business, the Company enters into forward purchase contracts for its commodity purchases and sales. Certain contracts for the ethanol division that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales. At June 30, 2022, the Company had forward corn purchase contracts at various fixed prices for various delivery periods through March 2024 for approximately 11% of expected production needs for the next 21 months. Approximately 6% of the forward corn purchases were with related parties. Given the uncertainty of future commodity prices, the Company could incur a loss on the outstanding purchase contracts in future periods. Management has evaluated these forward contracts using the lower of cost or net realizable value evaluation, and has determined that no impairment loss existed at June 30, 2022 and September 30, 2021. The Company has elected not to apply the normal purchase and sale exemption to its forward soybean contracts of the trading division and therefore, treats them as derivative instruments.At June 30, 2022, the Ethanol Division had forward dried distiller grains sales contracts for approximately 32% of expected production for the next 2 months at various fixed prices for delivery periods through August 2022. At June 30, 2022, the Company had forward corn oil contracts for approximately 78% of expected production for the next month at various fixed prices for delivery through July 2022. Additionally, at June 30, 2022, the Trading Division had forward soybean purchase contracts for approximately 14% of expected origination for various delivery periods through January 2024. Approximately 11% of the forward soybean purchases were with related parties.

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DERIVATIVE INSTRUMENTS

9 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

The Company enters into corn, ethanol, natural gas, soybean oil 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.

Commodity Contracts

The Company enters into commodity-based derivatives, for corn, ethanol, natural gas, soybean oil and soybeans in order to protect cash flows from fluctuations caused by volatility in commodity prices and 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 June 30, 2022, the Ethanol Division had a net short (selling) position of 11,630,000 bushels of corn under derivative contracts used to hedge its forward corn purchase contracts, corn inventory and ethanol sales. These corn derivatives are traded on the Chicago Board of Trade as of June 30, 2022 and are forecasted to settle for various delivery periods through December 2023. The Ethanol Division had a net short (selling) position of 29,190,000 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 December 2022. The Ethanol Division also had a net long (buying) position of 6,600,000 gallons of soybean oil under derivative contracts used to hedge its future soybean oil sales. These soybean oil derivatives are traded on the Chicago Board of Trade and are, as of June 30, 2022, forecasted to settle for various delivery periods through August 2022. At June 30, 2022, the Trading Division also had a net short (selling) position of 1,010,000 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 June 30, 2022, forecasted to settle for various delivery periods through November 2023. These derivatives have not been designated as effective hedges for accounting purposes.

The following table provides balance sheet details regarding the Company's derivative financial instruments at June 30, 2022:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures & Options Derivatives	$	—	$	3,362,278
Corn Futures and Options Contracts	Futures & Options Derivatives	$	7,918,725	$	—
Soybean Oil Futures and Options Contracts	Futures & Options Derivatives	$	—	$	207,888
Soybean Futures and Options Contracts	Futures & Options Derivatives	$	—	$	382,570
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	1,273,242	$	167,947

As of June 30, 2022, the Company had approximately $8,420,000 of cash collateral (restricted cash) related to ethanol, corn, soybean oil, and soybean derivatives held by four brokers.

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2021:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures & Options Derivatives	$	150,339	$	—
Corn Futures and Options Contracts	Futures & Options Derivatives	$	—	$	2,331,889
Soybean Oil Futures and Options Contracts	Futures & Options Derivatives	$	84,474	$	—
Soybean Futures and Options Contracts	Futures & Options Derivatives	$	729,605	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	988,919	$	658,283

As of September 30, 2021, the Company had approximately $8,100,000 of cash collateral (restricted cash) related to ethanol, corn, soybean oil, and soybean derivatives held by two 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:

Instrument	Statement of Operations Location	Three Months Ended June 30, 2021		Nine Months Ended June 30, 2021		Three Months Ended June 30, 2022		Nine Months Ended June 30, 2022
Corn Futures and Options Contracts	Cost of Goods Sold	$	(11,918,847)	$	(25,309,021)	$	13,126,371	$	(3,762,026)
Ethanol Futures and Options Contracts	Revenues	493,042		647,795		2,410,473		(7,500,787)
Natural Gas Futures and Options Contracts	Cost of Goods Sold	—		(836)		—		(39,039)
Soybean Oil Futures and Options Contracts	Cost of Goods Sold	664,729		1,947,061		47,541		131,871
Soybean Futures and Options Contracts	Cost of Goods Sold	(2,625,108)		(8,513,405)		(866,771)		(4,871,604)
Soybean Forward Purchase and Sales Contracts	Cost of Goods Sold	(166,197)		1,376,887		(349,129)		1,044,353
Totals		$	(13,552,381)	$	(29,851,519)	$	14,368,485	$	(14,997,232)

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FAIR VALUE MEASUREMENTS

9 Months Ended

Jun. 30, 2022

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 June 30, 2022:

Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	7,918,725	$	7,918,725	$	7,923,305	$	—	$	—
Ethanol Futures and Options Contracts	$	(3,362,278)	$	(3,362,278)	$	(3,362,278)	$	—	$	—
Soybean Oil Futures and Options Contracts	$	(207,888)	$	(207,888)	$	(207,888)	$	—	$	—
Soybean Futures and Options Contracts	$	(382,570)	$	(382,570)	$	(382,570)	$	—	$	—
Soybean Forward Purchase Contracts	$	1,105,295	$	1,105,295	$	—	$	1,105,295	$	—
Soybean Inventory	$	5,353,898	$	5,353,898	$	—	$	5,353,898	$	—
Accounts Payable	$	(6,828,861)	$	(6,828,861)	$	—	$	(6,828,861)	$	—

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2021:

Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	(2,331,889)	$	(2,331,889)	$	(1,424,775)	$	(907,114)	$	—
Ethanol Futures and Options Contracts	$	150,339	$	150,339	$	150,339	$	—	$	—
Soybean Oil Futures and Options Contracts	$	84,474	$	84,474	$	84,474	$	—	$	—
Soybean Futures and Options Contracts	$	729,605	$	729,605	$	1,066,775	$	(337,170)	$	—
Soybean Forward Purchase Contracts	$	330,637	$	330,637	$	—	$	330,637	$	—
Soybean Inventory	$	4,850,131	$	4,850,131	$	—	$	4,850,131	$	—
Accounts Payable	$	(6,391,350)	$	(6,391,350)	$	—	$	(6,391,350)	$	—

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 futures and options Level 2 instruments by model-based techniques in which all significant inputs are observable in the markets noted above. Soybean forward purchase and sale contracts are reported at fair value using Level 2 inputs from current contract prices that are being issued by the Company.

Soybean inventory held in the trading division is reported at fair value using Level 2 inputs which are based on purchases and sales transactions that occurred on or near June 30, 2022 and September 30, 2021.

Accounts payable is generally stated at historical amounts, with the exception of approximately $6,829,000 and $6,391,000 at June 30, 2022 and September 30, 2021, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices. These payables are hybrid financial instruments for which the Company has elected the fair value option.

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BANK FINANCING

9 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

BANK FINANCING

BANK FINANCING

The Company has a loan agreement consisting of two loans, the Declining Revolving Loan (Declining Loan) and the Revolving Credit 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. The loan agreement assigns an interest rate based upon the U.S. prime rate published in the Wall Street Journal to each of the individual loans. The interest rates on each of the loans changes daily.

Declining Loan

The maximum availability of the Declining Loan was formerly $5,000,000 and such amount was to be available for working capital purposes. However, the maximum availability of the Declining Loan was increased from $5,000,000 to $36,000,000 in order to provide financing to fund the construction and installation of a high protein feed system at the plant. The interest rate on the Declining Loan is currently based on the prime rate minus five basis points (.05%) subject to a floor of 2.85%. The interest rate was 4.70% and 3.10% at June 30, 2022 and September 30, 2021, respectively. The Company is required to make monthly interest payments on the Declining Loan during the draw period. The principal balance of the Declining Loan is expected to be converted to term debt on or before February 1, 2024, to be repaid in 60 equal monthly installments based on a

ten year amortization period. In addition, the Company will be required to make mandatory annual prepayments on the term debt within 120 days following the end of each fiscal year beginning with the fiscal year ended September 30, 2024. The annual prepayment will be in the amount of the lesser of 40% of excess cash flow or $7,200,000, up to an aggregate amount paid of $18,000,000. There were no borrowings outstanding on the Declining Loan at June 30, 2022 or September 30, 2021.

Revolving Credit Loan

The Revolving Credit Loan has a limit of $20,000,000 supported by a borrowing base made up of the Company's corn, ethanol, dried distillers grain, corn oil and soybean 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 the prime rate minus twenty-five basis points (.25%) and is subject to a floor of 2.75%. The interest rate was 4.50% and 3.00% at June 30, 2022 and September 30, 2021, respectively. There were no borrowings outstanding on the Revolving Credit Loan at June 30, 2022 and September 30, 2021. The Revolving Credit Loan is set to mature on February 28, 2023.

These loans are subject to protective covenants, which require the Company to maintain various financial ratios. The covenants include a working capital requirement of $15,000,000, and a capital expenditures covenant that allows the Company $5,000,000 of expenditures per year without prior approval. The cost of the high protein feed system is excluded from the capital expenditures calculation until the principal balance of the Declining Loan converts to term debt. There is also a requirement to maintain a minimum fixed charge coverage ratio of no less than 1.15:1.0 measured quarterly. A debt service charge coverage ratio of no less than 1.25:1.0 in lieu of the fixed charge coverage ratio will apply for any reporting period that working capital is equal to or more than $23,000,000.

The Company had no long-term debt as of June 30, 2022 and September 30, 2021.

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LEASES

9 Months Ended

Jun. 30, 2022

Leases [Abstract]

LEASES

LEASES

The Company leases rail cars for its facility to transport ethanol and dried distillers grains to its end customers. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the three and nine months ended June 30, 2022, the Company’s weighted average discount rate was 3.68%. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s leases have remaining lease terms of approximately 0.4 years to 1.4 years, which may include options to extend the lease when it is reasonably certain the Company will exercise those options. For the three and nine months ended June 30, 2022, the weighted average remaining lease term was 1.02 years. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The Company does not have any material finance lease obligations nor sublease agreements.

The following table summarizes the remaining maturities of the Company’s operating lease liabilities as of June 30, 2022:

For the Fiscal Year Ending September 30,
2022	$	927,639
2023	1,611,501
2024	198,000
Totals	2,737,140
Amount representing interest	(44,890)
Lease liabilities	$	2,692,250

For the three months ended June 30, 2022, the Company recorded operating lease costs of approximately $1,221,000 in cost of goods sold in the Company’s statement of operations. For the nine months ended June 30, 2022, the Company recorded operating lease costs of approximately $2,874,000 in costs of goods sold in the Company's statement of operations.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

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 is 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. The rulings have since been affirmed on appeal and on February 22, 2021 the U.S. Supreme Court declined to review the decision. On March 3, 2022, the United States District Court ruled on attorney fees to be awarded to the defendants.

Rail Car Rehabilitation Costs

The Company leases 180 hopper rail cars under a multi-year agreement which ends in November 2023. Under the agreement, the Company is required to pay to rehabilitate each car for "damage" that is considered to be other than normal wear and tear upon turn in of the car(s) at the termination of the lease.

Company management has estimated total costs to rehabilitate the cars at June 30, 2022, to be approximately $1,967,000. During the nine months ended June 30, 2022, the Company has recorded a corresponding expense in cost of goods sold of approximately $227,000. The Company accrues the estimated cost of railcar damages over the term of the lease.

High Protein System Installation Agreement

On January 20, 2022, the Company contracted with ICM, Inc. to install a system to produce high protein feed which is expected to cost approximately $47,716,000, including recent change orders, and be funded from operations and from our current credit facilities as amended.

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UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS

9 Months Ended

Jun. 30, 2022

Risks and Uncertainties [Abstract]

UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS

CONCENTRATIONSTwo major customers accounted for approximately 84% and 90% of the outstanding accounts receivable balance at June 30, 2022 and September 30, 2021, respectively. These same two customers accounted for approximately 77% of revenue for the nine months ended June 30, 2022 and 73% of revenue for the nine months ended June 30, 2021.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 primarily 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. During the nine months ended June 30, 2022, ethanol sales averaged approximately 65% of total revenues and corn costs averaged 66% 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 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.

Economic conditions for the ethanol industry have been favorable during fiscal year 2022. However, the military invasion of Ukraine by Russia in the second quarter of fiscal year 2022 and sanctions imposed by other countries as a result have created global economic uncertainty and contributed to increased inflation, significant market disruptions and increased volatility in commodity prices such as corn, oil and natural gas. The economic impact of this war and the potential effects on the Company's operating and financial performance is currently unknown. Additionally, there have been economic indicators that the United States could be facing a possible recession which have primarily resulted in interest rate hikes by the Federal Reserve in an attempt to reduce inflation. The Company continues to monitor economic conditions that might affect our profitability. The Company believes that its cash on hand and available debt from its lender will provide sufficient liquidity to meets its anticipated working capital, debt service and other liquidity needs through the next twelve months. If market conditions worsen affecting the Company's ability to profitably operate the plant or if the Company is unable to transport ethanol, it may be forced to further reduce the ethanol production rate or even temporarily shut down ethanol production altogether.

On May 23, 2022, the Company received an award of approximately $7,652,000 from the United States Department of Agriculture ("USDA") under the Biofuel Producer Program. The Biofuel Producer Program was created as part of the Coronavirus Aid Relief and Economic Security Act. The USDA announced that the funds were made available to provide economic relief to biofuels producers who faced unexpected market losses due to the COVID-19 pandemic and support a significant market for agricultural producers who supply products used in biofuel production.

This award was unconditional and was recognized as a component of other income on the statement of operations during the three and nine months ended June 30, 2022.

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BUSINESS SEGMENTS

9 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

BUSINESS SEGMENTS

BUSINESS SEGMENTS

The Company has two reportable operating segments. Segment reporting is intended to give financial statement users a better view of how the Company manages and evaluates its businesses. The accounting policies for each segment are the same as those described in the summary of significant accounting policies. Segment income or loss does not include any allocation of shared-service costs.  Segment assets are those that are directly used in or identified with segment operations. Inter-segment balances and transactions have been eliminated.

The following tables summarize financial information by segment and provide a reconciliation of segment revenue, gross profit, grain inventories, operating income, and total assets:

	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Revenue:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	110,898,770	$	99,758,386	$	340,575,754	$	238,544,279
Trading division	22,362,282		17,514,588		76,914,929		69,880,625
Total Revenue	$	133,261,052	$	117,272,974	$	417,490,683	$	308,424,904
	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Gross Profit:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	27,966,708	$	9,783,375	$	70,627,287	$	16,594,643
Trading division	686,948		(175,434)		3,096,547		2,304,981
Total Gross Profit	$	28,653,656	$	9,607,941	$	73,723,834	$	18,899,624
	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Operating Income:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	26,363,161	$	8,341,704	$	65,474,516	$	12,137,688
Trading division	369,705		(492,677)		2,144,818		1,353,252
Total Operating Income	$	26,732,866	$	7,849,027	$	67,619,334	$	13,490,940

	June 30, 2022		September 30, 2021
Grain Inventories:	(unaudited)
Ethanol division	$	24,475,078	$	2,995,914
Trading division	5,353,898		4,850,131
Total Grain Inventories	$	29,828,976	$	7,846,045
	June 30, 2022		September 30, 2021
Total Assets:	(unaudited)
Ethanol division	$	180,800,938	$	143,145,441
Trading division	5,389,187		8,793,484
Total Assets	$	186,190,125	$	151,938,925

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Accounting

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, 2021, contained in the Company's annual report on Form 10-K.

Reportable Segments

Reportable Segments

Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.   Based on the related business nature and expected financial results criteria set forth in ASC 280, the Company has two reportable operating segments for financial reporting purposes.

•Ethanol Division. Based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plant, including the production and sale of ethanol and its co-products, are aggregated into one financial reporting segment.

•Trading Division. The Company has a grain loading facility within the Company's single site to buy, hold and sell inventories of agricultural grains, primarily soybeans. The Company performs no additional processing of these grains, unlike the corn inventory the Company holds and uses in ethanol production. The activities of buying, selling and holding of grains other than for ethanol and co-product production comprise this financial reporting segment.

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 Ethanol Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, inventories, the assumptions used in the analysis of the impairment of long lived assets, railcar rehabilitation costs, and inventory purchase commitments.

The Trading Division uses estimates and assumptions in accounting for the following significant matters, among others; the useful lives of fixed assets, the valuation of inventory purchase and sale commitment derivatives and inventory at market.

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. Actual results could differ materially from those estimates.

Cash and Restricted Cash

Cash

The Company maintains its accounts primarily at two financial institutions. At times throughout the year the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

Restricted Cash

As a part of its commodities hedging activities, the Company is required to maintain cash balances with its 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, the Company records the cash maintained with the traders in the margin accounts as restricted cash. Since this cash is immediately available upon request when there is a margin excess, the Company considers this restricted cash to be a current asset.

Trade Accounts Receivable

Trade Accounts ReceivableCredit 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

Ethanol Division (see Reportable Segments) inventories consist of raw materials, work in process, finished goods and spare 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 selling costs.

Trading Division (see Reportable Segments) inventories consist of grain. Soybeans were the only grains held and traded at June 30, 2022 and September 30, 2021. These inventories are stated at market value less estimated selling costs, which may include reductions for quality.

Property, Plant and Equipment

Property, Plant and EquipmentProperty, 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.

Investment

Investment

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 and cash equity redemptions received. Non cash patronage dividends are recognized when received and included within revenue in the condensed statements of operations.

Revenue Recognition

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The Company's contracts primarily consist of agreements with marketing companies and other customers as described below. The Company's performance obligations consist of the delivery of ethanol, distillers' grains, corn oil, soybeans and carbon dioxide to its customers. The consideration the Company receives for these products is fixed based on current observable market prices at the Chicago Mercantile Exchange, generally, and adjusted for local market differentials. The Company's contracts have specific delivery modes, rail or truck, and dates. Revenue is recognized when the Company delivers the products to the mode of transportation specified in the contract, at the transaction price established in the contract, net of commissions, fees, and freight. The Company sells each of the products via different marketing channels as described below.

•Ethanol. The Company sells its ethanol via a marketing agreement with Murex, LLC. Murex markets one hundred percent of the Company's ethanol production based on agreements with end users at prices agreed upon mutually among the end user, Murex and the Company. Murex then provides a schedule of deliveries required and an order for each rail car or tankers needed to fulfill their commitment with the end user. These are individual performance obligations of the Company. The marketing agreement calls for control and title to pass when the delivery vehicle is filled. Revenue is recognized then at the price in the agreement with the end user, net of commissions, freight, and insurance.

•Distillers grains. The Company engages another third-party marketing company, CHS, Inc, to market one hundred percent of the distillers grains it produces at the plant. The process for selling the distillers grains is like that of ethanol, except that CHS takes title and control once a rail car is released to the railroad or a truck is released from the Company's scales. Prices are agreed upon among the three parties, and CHS provides schedules and orders representing performance obligations. Revenue is recognized net of commissions, freight, and fees.

•Distillers corn oil (corn oil). The Company sells its production of corn oil directly to commercial customers. The customer is provided with a delivery schedule and pick up orders representing performance obligations. These are fulfilled when the customer’s driver picks up the scheduled load. The price is agreed upon at the time each contract is made, and the Company recognizes revenue at the time of delivery at that price.

•Carbon dioxide. The Company sells a portion of the carbon dioxide it produces to a customer that maintains a plant on-site for a set price per ton. Delivery is defined as transference of the gas from the Company's stream to their plant.

•Soybeans and other grains. The Company sells soybeans exclusively to commercial mills, processors or grain traders. Contracts are negotiated directly with the parties at prices based on negotiated prices.

Cost of Goods Sold

Cost of goods sold include corn, trading division grains, natural gas and other components which includes processing ingredients, electricity, railcar lease, railcar maintenance, depreciation of ethanol production fixed assets and wages, salaries and benefits of production personnel.

Operating Expenses

Operating expenses include wages, salaries and benefits of administrative employees at the plant, insurance, professional fees, depreciation of trading division fixed assets, property taxes and similar costs.

Payment Terms

The Company has contractual payment terms with each respective marketer that sells ethanol and distillers grains. These terms are generally 7 - 14 days after the week of the transfer of control.

The Company has standard payment terms of net 10 days for its sale for corn oil.

The Company has standard payments terms due upon delivery for its sale of soybeans.

The contractual terms with the carbon dioxide customer calls for an annual settlement.

Shipping and Handling Costs

Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of goods sold. Accordingly, amounts billed to customers for such costs are included as a component of revenue.

Contract Liabilities

The Company records unearned revenue when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of its contracts with customers.

Derivative Instruments

Derivative Instruments

From time to time the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives in the balance sheet at fair value.

In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in the statement of operations, depending on the item being hedged.

Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting and reporting requirements, and therefore, are not marked to market in our financial statements.

The Company has elected for its Ethanol Division to apply the normal purchase normal sale exemption to all forward commodity contracts. For the Trading Division, the Company has elected not to apply the normal purchase normal sale exemption to its forward purchase and sales contracts and therefore, marks these derivative instruments to market.

Net Income (Loss) per Unit

Net Income (Loss) per Unit

Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units outstanding during the period. Diluted net income (loss) per unit is computed by dividing net income (loss) 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 (loss) per unit are the same.

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REVENUE (Tables)

9 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables disaggregate revenue by major source for the three and nine months ended June 30, 2022 and 2021:

Three Months Ended June 30, 2022 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	84,706,603	$	—	$	84,706,603
Distillers' grains	18,261,386		—		18,261,386
Corn Oil	7,796,800		—		7,796,800
Carbon Dioxide	120,531		—		120,531
Other Revenue	13,450		15,900		29,350
Total revenues from contracts with customers	110,898,770		15,900		110,914,670
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		22,346,382		22,346,382
Total revenues from contracts accounted for as derivatives	—		22,346,382		22,346,382
Total Revenues	$	110,898,770	$	22,362,282	$	133,261,052

Nine Months Ended June 30, 2022 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	272,527,573	$	—	$	272,527,573
Distillers' grains	47,450,158		—		47,450,158
Corn Oil	20,177,097		—		20,177,097
Carbon Dioxide	347,126		—		347,126
Other Revenue	73,800		82,556		156,356
Total revenues from contracts with customers	340,575,754		82,556		340,658,310
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		76,832,373		76,832,373
Total revenues from contracts accounted for as derivatives	—		76,832,373		76,832,373
Total Revenues	$	340,575,754	$	76,914,929	$	417,490,683

Three Months Ended June 30, 2021 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	79,943,407	$	—	$	79,943,407
Distillers' grains	14,701,286		—		14,701,286
Corn Oil	4,977,755		—		4,977,755
Carbon Dioxide	121,288		—		121,288
Other Revenue	14,650		14,875		29,525
Total revenues from contracts with customers	99,758,386		14,875		99,773,261
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		17,499,713		17,499,713
Total revenues from contracts accounted for as derivatives	—		17,499,713		17,499,713
Total Revenues	$	99,758,386	$	17,514,588	$	117,272,974

Nine Months Ended June 30, 2021 (Unaudited)

	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	182,551,687	$	—	$	182,551,687
Distillers' grains	43,552,750		—		43,552,750
Corn Oil	12,030,379		—		12,030,379
Carbon Dioxide	368,038		—		368,038
Other Revenue	41,425		119,850		161,275
Total revenues from contracts with customers	238,544,279		119,850		238,664,129
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and other grains	—		69,760,775		69,760,775
Total revenues from contracts accounted for as derivatives	—		69,760,775		69,760,775
Total Revenues	$	238,544,279	$	69,880,625	$	308,424,904

(1) Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC Topic 606), where the company recognizes revenue when control of the inventory is transferred within the meaning of ASC Topic 606 as required by ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets.

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INVENTORIES (Tables)

9 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories consist of the following as of:

	June 30, 2022 (Unaudited)		September 30, 2021
Ethanol Division:
Raw materials	$	24,475,078	$	2,995,914
Work in progress	1,555,309		2,331,419
Finished goods	2,985,976		12,431,375
Spare parts	3,966,847		3,978,193
Ethanol Division Subtotal	$	32,983,210	$	21,736,901
Trading Division:
Grain inventory	$	5,353,898	$	4,850,131
Trading Division Subtotal	5,353,898		4,850,131
Total Inventories	$	38,337,108	$	26,587,032

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DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The following table provides balance sheet details regarding the Company's derivative financial instruments at June 30, 2022:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures & Options Derivatives	$	—	$	3,362,278
Corn Futures and Options Contracts	Futures & Options Derivatives	$	7,918,725	$	—
Soybean Oil Futures and Options Contracts	Futures & Options Derivatives	$	—	$	207,888
Soybean Futures and Options Contracts	Futures & Options Derivatives	$	—	$	382,570
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	1,273,242	$	167,947

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2021:

Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures & Options Derivatives	$	150,339	$	—
Corn Futures and Options Contracts	Futures & Options Derivatives	$	—	$	2,331,889
Soybean Oil Futures and Options Contracts	Futures & Options Derivatives	$	84,474	$	—
Soybean Futures and Options Contracts	Futures & Options Derivatives	$	729,605	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	988,919	$	658,283

Derivatives Not Designated as Hedging Instruments

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:

Instrument	Statement of Operations Location	Three Months Ended June 30, 2021		Nine Months Ended June 30, 2021		Three Months Ended June 30, 2022		Nine Months Ended June 30, 2022
Corn Futures and Options Contracts	Cost of Goods Sold	$	(11,918,847)	$	(25,309,021)	$	13,126,371	$	(3,762,026)
Ethanol Futures and Options Contracts	Revenues	493,042		647,795		2,410,473		(7,500,787)
Natural Gas Futures and Options Contracts	Cost of Goods Sold	—		(836)		—		(39,039)
Soybean Oil Futures and Options Contracts	Cost of Goods Sold	664,729		1,947,061		47,541		131,871
Soybean Futures and Options Contracts	Cost of Goods Sold	(2,625,108)		(8,513,405)		(866,771)		(4,871,604)
Soybean Forward Purchase and Sales Contracts	Cost of Goods Sold	(166,197)		1,376,887		(349,129)		1,044,353
Totals		$	(13,552,381)	$	(29,851,519)	$	14,368,485	$	(14,997,232)

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Jun. 30, 2022

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 June 30, 2022:

Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	7,918,725	$	7,918,725	$	7,923,305	$	—	$	—
Ethanol Futures and Options Contracts	$	(3,362,278)	$	(3,362,278)	$	(3,362,278)	$	—	$	—
Soybean Oil Futures and Options Contracts	$	(207,888)	$	(207,888)	$	(207,888)	$	—	$	—
Soybean Futures and Options Contracts	$	(382,570)	$	(382,570)	$	(382,570)	$	—	$	—
Soybean Forward Purchase Contracts	$	1,105,295	$	1,105,295	$	—	$	1,105,295	$	—
Soybean Inventory	$	5,353,898	$	5,353,898	$	—	$	5,353,898	$	—
Accounts Payable	$	(6,828,861)	$	(6,828,861)	$	—	$	(6,828,861)	$	—

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2021:

Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	(2,331,889)	$	(2,331,889)	$	(1,424,775)	$	(907,114)	$	—
Ethanol Futures and Options Contracts	$	150,339	$	150,339	$	150,339	$	—	$	—
Soybean Oil Futures and Options Contracts	$	84,474	$	84,474	$	84,474	$	—	$	—
Soybean Futures and Options Contracts	$	729,605	$	729,605	$	1,066,775	$	(337,170)	$	—
Soybean Forward Purchase Contracts	$	330,637	$	330,637	$	—	$	330,637	$	—
Soybean Inventory	$	4,850,131	$	4,850,131	$	—	$	4,850,131	$	—
Accounts Payable	$	(6,391,350)	$	(6,391,350)	$	—	$	(6,391,350)	$	—

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LEASES (Tables)

9 Months Ended

Jun. 30, 2022

Leases [Abstract]

Schedule of Future Minimum Payments for Operating Leases

The following table summarizes the remaining maturities of the Company’s operating lease liabilities as of June 30, 2022:

For the Fiscal Year Ending September 30,
2022	$	927,639
2023	1,611,501
2024	198,000
Totals	2,737,140
Amount representing interest	(44,890)
Lease liabilities	$	2,692,250

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BUSINESS SEGMENTS (Tables)

9 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following tables summarize financial information by segment and provide a reconciliation of segment revenue, gross profit, grain inventories, operating income, and total assets:

	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Revenue:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	110,898,770	$	99,758,386	$	340,575,754	$	238,544,279
Trading division	22,362,282		17,514,588		76,914,929		69,880,625
Total Revenue	$	133,261,052	$	117,272,974	$	417,490,683	$	308,424,904
	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Gross Profit:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	27,966,708	$	9,783,375	$	70,627,287	$	16,594,643
Trading division	686,948		(175,434)		3,096,547		2,304,981
Total Gross Profit	$	28,653,656	$	9,607,941	$	73,723,834	$	18,899,624
	Three Months Ended				Nine Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Operating Income:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Ethanol division	$	26,363,161	$	8,341,704	$	65,474,516	$	12,137,688
Trading division	369,705		(492,677)		2,144,818		1,353,252
Total Operating Income	$	26,732,866	$	7,849,027	$	67,619,334	$	13,490,940

	June 30, 2022		September 30, 2021
Grain Inventories:	(unaudited)
Ethanol division	$	24,475,078	$	2,995,914
Trading division	5,353,898		4,850,131
Total Grain Inventories	$	29,828,976	$	7,846,045
	June 30, 2022		September 30, 2021
Total Assets:	(unaudited)
Ethanol division	$	180,800,938	$	143,145,441
Trading division	5,389,187		8,793,484
Total Assets	$	186,190,125	$	151,938,925

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) gal in Thousands	9 Months Ended
	Jun. 30, 2022 USD ($) segment gal	Jun. 30, 2021 USD ($) gal
Product Information [Line Items]
Number of reportable segments | segment	2
Number of operating segments | segment	2
Impairment loss	$ 0	$ 0
High Protein Feed System
Product Information [Line Items]
Additional liquefaction tank and fermenter cost	$ 46,570,000
Ethanol
Product Information [Line Items]
Annual production | gal	101,534	100,050
Ethanol | Ethanol Recovery System
Product Information [Line Items]
Additional liquefaction tank and fermenter cost	$ 2,400,000

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REVENUE - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	$ 110,914,670	$ 99,773,261	$ 340,658,310	$ 238,664,129
Total revenues from contracts accounted for as derivatives	22,346,382	17,499,713	76,832,373	69,760,775
Total Revenues	133,261,052	117,272,974	417,490,683	308,424,904
Ethanol
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	84,706,603	79,943,407	272,527,573	182,551,687
Distillers' grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	18,261,386	14,701,286	47,450,158	43,552,750
Corn Oil
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	7,796,800	4,977,755	20,177,097	12,030,379
Carbon Dioxide
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	120,531	121,288	347,126	368,038
Other Revenue
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	29,350	29,525	156,356	161,275
Soybeans and other grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts accounted for as derivatives	22,346,382	17,499,713	76,832,373	69,760,775
Ethanol Division
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	110,898,770	99,758,386	340,575,754	238,544,279
Total revenues from contracts accounted for as derivatives	0	0	0	0
Total Revenues	110,898,770	99,758,386	340,575,754	238,544,279
Ethanol Division | Ethanol
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	84,706,603	79,943,407	272,527,573	182,551,687
Ethanol Division | Distillers' grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	18,261,386	14,701,286	47,450,158	43,552,750
Ethanol Division | Corn Oil
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	7,796,800	4,977,755	20,177,097	12,030,379
Ethanol Division | Carbon Dioxide
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	120,531	121,288	347,126	368,038
Ethanol Division | Other Revenue
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	13,450	14,650	73,800	41,425
Ethanol Division | Soybeans and other grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts accounted for as derivatives	0	0	0	0
Trading Division
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	15,900	14,875	82,556	119,850
Total revenues from contracts accounted for as derivatives	22,346,382	17,499,713	76,832,373	69,760,775
Total Revenues	22,362,282	17,514,588	76,914,929	69,880,625
Trading Division | Ethanol
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0	0	0
Trading Division | Distillers' grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0	0	0
Trading Division | Corn Oil
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0	0	0
Trading Division | Carbon Dioxide
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0	0	0
Trading Division | Other Revenue
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	15,900	14,875	82,556	119,850
Trading Division | Soybeans and other grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts accounted for as derivatives	$ 22,346,382	$ 17,499,713	$ 76,832,373	$ 69,760,775

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REVENUE - Narrative (Details)	9 Months Ended
	Jun. 30, 2022
Corn Oil
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, payment terms	10 days
Minimum | Ethanol And Distillers' Grains
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, payment terms	7 days
Maximum | Ethanol And Distillers' Grains
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, payment terms	14 days

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CONCENTRATIONS (Details) - Customer Concentration Risk - Two Major Customers	9 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Sep. 30, 2021
Accounts Receivable
Concentration Risk [Line Items]
Concentration risk	84.00%		90.00%
Sales revenue, goods, net
Concentration Risk [Line Items]
Concentration risk	77.00%	73.00%

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INVENTORIES - Schedule of Inventory (Details) - USD ($)	Jun. 30, 2022	Sep. 30, 2021
Inventory [Line Items]
Raw materials	$ 29,828,976	$ 7,846,045
Total Inventories	38,337,108	26,587,032
Ethanol Division
Inventory [Line Items]
Raw materials	24,475,078	2,995,914
Work in progress	1,555,309	2,331,419
Finished goods	2,985,976	12,431,375
Spare parts	3,966,847	3,978,193
Total Inventories	32,983,210	21,736,901
Trading Division
Inventory [Line Items]
Raw materials	5,353,898	4,850,131
Total Inventories	$ 5,353,898	$ 4,850,131

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INVENTORIES - Narrative (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Ethanol Division
Inventory [Line Items]
Inventory written down	$ 0	$ 57
Ethanol Division | Corn
Inventory [Line Items]
Expected production needed	11.00%
Number of months of coverage	21 months
Ethanol Division | Corn | Affiliated Entity
Inventory [Line Items]
Expected production needed	6.00%
Ethanol Division | Distillers' grains
Inventory [Line Items]
Expected production needed	32.00%
Number of months of coverage	2 months
Ethanol Division | Corn Oil
Inventory [Line Items]
Expected production needed	78.00%
Trading Division | Forward Soybean Purchase Contract
Inventory [Line Items]
Expected production needed	14.00%
Trading Division | Forward Soybean Purchase Contract | Affiliated Entity
Inventory [Line Items]
Expected production needed	11.00%

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DERIVATIVE INSTRUMENTS - Narrative (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2022 USD ($) broker gal bu	Sep. 30, 2021 USD ($) broker
Derivative [Line Items]
Cash collateral | $	$ 8,420	$ 8,100
Number of brokers, cash collateral | broker	4	2
Ethanol Division | Corn | Short | Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, volume (in bushels or gallons)	11,630,000
Ethanol Division | Ethanol | Short | Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, volume (in bushels or gallons)	29,190,000
Ethanol Division | Soybean Oil | Long | Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, volume (in bushels or gallons) | gal	6,600,000
Trading Division | Soybean | Short | Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, volume (in bushels or gallons)	1,010,000

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DERIVATIVE INSTRUMENTS - Balance Sheet (Details) - Not Designated as Hedging Instrument - USD ($)	Jun. 30, 2022	Sep. 30, 2021
Future | Ethanol | Futures & Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	$ 0	$ 150,339
Liabilities	3,362,278	0
Future | Corn | Futures & Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	7,918,725	0
Liabilities	0	2,331,889
Future | Soybean Oil | Futures & Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	0	84,474
Liabilities	207,888	0
Future | Soybean | Futures & Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	0	729,605
Liabilities	382,570	0
Forward Contracts | Soybean | Forward Purchase/Sales Derivatives
Derivatives, Fair Value [Line Items]
Assets	1,273,242	988,919
Liabilities	$ 167,947	$ 658,283

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DERIVATIVE INSTRUMENTS - Income Statement (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	$ 14,368,485	$ (13,552,381)	$ (14,997,232)	$ (29,851,519)
Future | Not Designated as Hedging Instrument | Corn
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	13,126,371	(11,918,847)	(3,762,026)	(25,309,021)
Future | Not Designated as Hedging Instrument | Ethanol
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	2,410,473	493,042	(7,500,787)	647,795
Future | Not Designated as Hedging Instrument | Natural Gas
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	0	0	(39,039)	(836)
Future | Not Designated as Hedging Instrument | Soybean Oil
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	47,541	664,729	131,871	1,947,061
Future | Not Designated as Hedging Instrument | Soybean
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	(866,771)	(2,625,108)	(4,871,604)	(8,513,405)
Forward Contracts | Not Designated as Hedging Instrument | Soybean
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	$ (349,129)	$ (166,197)	$ 1,044,353	$ 1,376,887

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FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring - USD ($)	Jun. 30, 2022	Sep. 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Payable	$ (6,828,861)	$ (6,391,350)
Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Payable	(6,828,861)	(6,391,350)
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Payable	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Payable	(6,828,861)	(6,391,350)
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Payable	0	0
Soybean
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	5,353,898	4,850,131
Soybean | Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	5,353,898	4,850,131
Soybean | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Soybean | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	5,353,898	4,850,131
Soybean | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Future | Corn
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	7,918,725	(2,331,889)
Future | Corn | Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	7,918,725	(2,331,889)
Future | Corn | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	7,923,305	(1,424,775)
Future | Corn | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	(907,114)
Future | Corn | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Future | Ethanol
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(3,362,278)	150,339
Future | Ethanol | Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(3,362,278)	150,339
Future | Ethanol | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(3,362,278)	150,339
Future | Ethanol | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Future | Ethanol | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Future | Soybean Oil
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(207,888)	84,474
Future | Soybean Oil | Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(207,888)	84,474
Future | Soybean Oil | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(207,888)	84,474
Future | Soybean Oil | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Future | Soybean Oil | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Future | Soybean
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(382,570)	729,605
Future | Soybean | Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(382,570)	729,605
Future | Soybean | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(382,570)	1,066,775
Future | Soybean | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	(337,170)
Future | Soybean | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Forward Contracts | Soybean
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	1,105,295	330,637
Forward Contracts | Soybean | Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	1,105,295	330,637
Forward Contracts | Soybean | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Forward Contracts | Soybean | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	1,105,295	330,637
Forward Contracts | Soybean | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	$ 0	$ 0

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BANK FINANCING (Details)	9 Months Ended
	Jun. 30, 2022 USD ($) loan monthlyInstallment	Feb. 28, 2022 USD ($)	Feb. 27, 2022 USD ($)	Sep. 30, 2021 USD ($)
Debt Instrument [Line Items]
Number of loans | loan	2
Long-term debt	$ 0			$ 0
Revolving Credit Loan
Debt Instrument [Line Items]
Working capital requirement	$ 23,000,000
Revolving Credit Facility | Declining Loan
Debt Instrument [Line Items]
Maximum availability		$ 36,000,000	$ 5,000,000
Interest rate	4.70%			3.10%
Repaid equal monthly installments | monthlyInstallment	60
Debt term	10 years
Mandatory annual prepayments term	120 days
Annual Prepayment Percentage	40.00%
Annual prepayment	$ 7,200,000
Aggregate amount paid	18,000,000
Borrowings outstanding	0			$ 0
Revolving Credit Facility | Revolving Credit Loan
Debt Instrument [Line Items]
Maximum availability	$ 20,000,000
Floor interest rate	2.75%
Interest rate	4.50%			3.00%
Borrowings outstanding	$ 0			$ 0
Working capital requirement	15,000,000
Covenant, maximum capital expenditures per year without prior approval	$ 5,000,000
Minimum fixed charge coverage ratio	1.15
Minimum debt service charge coverage ratio	1.25
Revolving Credit Facility | Prime Rate | Declining Loan
Debt Instrument [Line Items]
Interest rate subtracted from U.S. Prime Rate	0.05%
Floor interest rate	2.85%
Revolving Credit Facility | Prime Rate | Revolving Credit Loan
Debt Instrument [Line Items]
Interest rate subtracted from U.S. Prime Rate	0.25%

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LEASES - Narrative (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)
Operating Leased Assets [Line Items]
Operating lease weighted average discount rate	3.68%	3.68%
Operating lease weighted average remaining lease term	1 year 7 days	1 year 7 days
Cost of Goods Sold | Ethanol Division
Operating Leased Assets [Line Items]
Operating lease cost	$ 1,221	$ 2,874
Minimum
Operating Leased Assets [Line Items]
Remaining lease term	4 months 24 days	4 months 24 days
Maximum
Operating Leased Assets [Line Items]
Remaining lease term	1 year 4 months 24 days	1 year 4 months 24 days

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LEASES - Schedule of Future Minimum Payments for Operating Leases (Details)	Jun. 30, 2022 USD ($)
Leases [Abstract]
2022	$ 927,639
2023	1,611,501
2024	198,000
Totals	2,737,140
Amount representing interest	(44,890)
Lease liabilities	$ 2,692,250

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COMMITMENTS AND CONTINGENCIES (Details)	3 Months Ended		9 Months Ended
	Jun. 30, 2022 USD ($) hopper_rail_car	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) hopper_rail_car	Jun. 30, 2021 USD ($)	Jan. 20, 2022 USD ($)
Loss Contingencies [Line Items]
Hopper rail cars leased | hopper_rail_car	180		180
Cost of goods sold	$ 104,607,396	$ 107,665,033	$ 343,766,849	$ 289,525,280
Equipment purchase and installation agreement accrual					$ 47,716,000
Rail Car Rehabilitation Cost Liability
Loss Contingencies [Line Items]
Estimated rehabilitation costs	$ 1,967,000		1,967,000
Cost of goods sold			$ 227,000

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UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2022	May 23, 2022
Concentration Risk [Line Items]
Award received		$ 7,652
Sales revenue, goods, net | Geographic Concentration Risk | UNITED STATES
Concentration Risk [Line Items]
Concentration risk	65.00%
Cost of goods sold | Geographic Concentration Risk | UNITED STATES
Concentration Risk [Line Items]
Concentration risk	66.00%

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BUSINESS SEGMENTS - Narrative (Details)	9 Months Ended
	Jun. 30, 2022 segment
Segment Reporting [Abstract]
Number of reportable segments	2
Number of operating segments	2

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BUSINESS SEGMENTS - Schedule of Business Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Sep. 30, 2021
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue:	$ 133,261,052	$ 117,272,974	$ 417,490,683	$ 308,424,904
Gross Profit:	28,653,656	9,607,941	73,723,834	18,899,624
Operating Income:	26,732,866	7,849,027	67,619,334	13,490,940
Grain Inventories:	29,828,976		29,828,976		$ 7,846,045
Total Assets:	186,190,125		186,190,125		151,938,925
Ethanol division
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue:	110,898,770	99,758,386	340,575,754	238,544,279
Gross Profit:	27,966,708	9,783,375	70,627,287	16,594,643
Operating Income:	26,363,161	8,341,704	65,474,516	12,137,688
Grain Inventories:	24,475,078		24,475,078		2,995,914
Total Assets:	180,800,938		180,800,938		143,145,441
Trading division
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue:	22,362,282	17,514,588	76,914,929	69,880,625
Gross Profit:	686,948	(175,434)	3,096,547	2,304,981
Operating Income:	369,705	$ (492,677)	2,144,818	$ 1,353,252
Grain Inventories:	5,353,898		5,353,898		4,850,131
Total Assets:	$ 5,389,187		$ 5,389,187		$ 8,793,484