Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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 December 31, 2023

			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 February 8, 2024, there were 14,606 membership units outstanding.

Table of Contents

INDEX


			Page Number
PART I. FINANCIAL INFORMATION			3
Item 1. Consolidated Financial Statements			3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures about Market Risk			39
Item 4. Controls and Procedures			41
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			41
Item 5. Other Information			42
Item 6. Exhibits			42
SIGNATURES			43

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Consolidated Condensed Balance Sheets


ASSETS	December 31, 2023		September 30, 2023
	(Unaudited)
Current Assets
Cash and cash equivalents	$	89,906,473	$	69,859,066
Restricted cash	13,362,078		13,425,343

Investments in available-for-sale debt securities	—		12,407,939
Trade accounts receivable	8,167,126		18,407,126
Miscellaneous receivables	575,681		478,069
Inventories	30,611,452		15,103,440
Prepaid and other current assets	5,020,278		298,635
Futures and options derivatives	803,337		352,464
Forward purchase/sales derivatives	258,150		66,825
Total current assets	148,704,575		130,398,907










Property, Plant, and Equipment, Net	95,312,667		92,323,559

Other Assets
Operating lease right of use asset, net	9,167,780		3,012,582
Investments	8,569,474		7,033,199
Total other assets	17,737,254		10,045,781

Total Assets	$	261,754,496	$	232,768,247

LIABILITIES AND MEMBERS' EQUITY

Current Liabilities
Advances from customer	$	3,000,000	$	—
Due to broker	1,058,324		1,232,522
Accounts payable	8,380,795		3,171,886
Accounts payable - grain	27,283,995		11,005,387
Accrued expenses	3,901,294		4,695,515
Futures and options derivatives	4,893,868		3,817,921
Forward purchase/sales derivatives	275,009		356,177
Operating lease liability current	3,237,081		2,611,799

Current maturities of long-term debt	1,980,218		1,136,681
Total current liabilities	54,010,584		28,027,888

Long-Term Liabilities
Long-term debt, net of current maturities	28,588,740		29,432,277
Operating lease long-term liabilities	5,933,067		416,931
Liability for railcar rehabilitation costs	2,434,349		2,358,134
Other long-term liabilities	5,846		—
Total long-term liabilities	36,962,002		32,207,342

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
Accumulated other comprehensive loss	—		(10,671)
Retained earnings	99,869,697		101,631,475
Total members' equity	170,781,910		172,533,017


Total Liabilities and Members’ Equity	$	261,754,496	$	232,768,247

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

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Consolidated Condensed Statements of Operations (Unaudited)


	Three Months Ended
	December 31, 2023		December 31, 2022

Revenues	$	69,111,595	$	134,948,119

Cost of Goods Sold	63,588,559		117,009,175

Gross Profit	5,523,036		17,938,944

Operating Expenses	2,639,366		2,272,604

Operating Income	2,883,670		15,666,340

Other Income (Expense)
Interest income	1,200,510		421,732
Miscellaneous income (expense)	(1,250,433)		48,699


Loss on equity method investment	(113,725)		(231,106)
Total	(163,648)		239,325

Net Income	$	2,720,022	$	15,905,665

Weighted Average Units Outstanding - basic and diluted	14,606		14,606

Net Income Per Unit - basic and diluted	$	186	$	1,089

Distributions Per Unit	$	300	$	500

Unrealized gain (loss) on available-for-sale debt securities	10,671		(7,706)
Total comprehensive loss	10,671		(7,706)
Net Comprehensive Income	$	2,730,693	$	15,897,959

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

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows (Unaudited)


	Three Months Ended		Three Months Ended
	December 31, 2023		December 31, 2022

Cash Flows from Operating Activities
Net income	$	2,720,022	$	15,905,665
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	1,961,505		2,881,483
Change in fair value of commodity derivative instruments	352,581		351,460
Loss on disposal of asset	1,303,832		—

Earnings on available-for-sale debt securities	(81,390)		(48,794)
Non-cash lease expense	—		14,780
Loss from equity method investment	113,725		231,106
Change in operating assets and liabilities:

Trade accounts receivable	10,240,000		(3,754,322)
Miscellaneous receivables	(97,612)		496,436
Inventories	(15,508,012)		(12,893,018)
Prepaid and other current assets	(4,721,643)		(1,026,425)

Due to broker	(174,198)		180,419


Accounts payable	206,243		(926,821)
Accounts payable - grain	16,278,608		34,379,511
Accrued expenses	1,400,278		(606,738)
Liability for railcar rehabilitation costs	76,215		74,375

Advances from customers	3,000,000		—
Net cash provided by operating activities	17,070,154		35,259,117

Cash Flows from Investing Activities

Proceeds from maturities of availalable-for-sale debt securities	12,500,000		—
Payments for construction in progress	(2,054,212)		(8,468,015)
Purchases of investments in debt securities	—		(10,754,664)
Investment in Cardinal One Carbon Holdings, LLC	(1,650,000)		—
Net cash provided by (used for) investing activities	8,795,788		(19,222,679)

Cash Flows from Financing Activities

Distributions paid	(5,881,800)		(7,303,000)
Proceeds from revolving credit loan	10,650,750		—
Payments on revolving credit loan	(10,650,750)		—

Proceeds from long-term debt	—		7,185,919

Net cash used for financing activities	(5,881,800)		(117,081)

Net Increase in Cash, Cash Equivalents, and Restricted Cash	19,984,142		15,919,357

Cash, Cash Equivalents, and Restricted Cash – Beginning of Period	83,284,409		63,239,614

Cash, Cash Equivalents, and Restricted Cash – End of Period	$	103,268,551	$	79,158,971

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

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Consolidated Condensed Statements of Cash Flows (Unaudited)


	Three Months Ended		Three Months Ended
	December 31, 2023		December 31, 2022
Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and Cash Equivalents - Balance Sheet	$	89,906,473	$	68,622,409
Restricted Cash - Balance Sheet	13,362,078		10,536,562
Cash, Cash Equivalents, and Restricted Cash	$	103,268,551	$	79,158,971

Supplemental Cash Flow Information
Interest paid	$	655,655	$	131,741

Supplemental Disclosure of Non-cash Investing and Financing Activities



Construction in progress included in accrued expenses and accounts payable	$	5,053,021	$	5,720
Construction period interest capitalized in property, plant and equipment	$	663,291	$	225,014

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

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Consolidated Condensed Statements of Changes in Members' Equity (Unaudited)














































	Member Contributions		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total

Balance September 30, 2022	$	70,912,213	$	76,358,279	$	—	$	147,270,492

Net Income	—		15,905,665		—		15,905,665

Member Distributions	—		(7,303,000)		—		(7,303,000)

Unrealized loss on available-for-sale debt securities	—		—		(7,706)		(7,706)

Balance December 31, 2022	$	70,912,213	$	84,960,944	$	(7,706)	$	155,865,451
















	Member Contributions		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total

Balance September 30, 2023	$	70,912,213	$	101,631,475	$	(10,671)	$	172,533,017

Net Income	—		2,720,022		—		2,720,022

Member Distributions	—		(4,481,800)		—		(4,481,800)

Unrealized gain on available-for-sale debt securities	—		—		10,671		10,671

Balance December 31, 2023	$	70,912,213	$	99,869,697	$	—	$	170,781,910

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

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated condensed financial statements (the "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, 2023, 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 and Subsidiaries (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 three months ended December 31, 2023 and 2022, the Company produced approximately 20,423,000 and 34,254,000 gallons of ethanol, respectively.

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

Basis of Accounting

The Company prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the operations, assets and liabilities of the Company. In the opinion of the Company's management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying consolidated financial statements.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Cardinal Ethanol, LLC and its wholly owned subsidiaries, Cardinal Ethanol Export Sales, Inc., Cardinal One Carbon Holdings, LLC, and Cardinal Colwich, LLC (collectively, the Company). Cardinal Ethanol Export Sales, Inc. is an Interest Charge Domestic to International Sales Company ("IC-DISC") designed to take advantage of certain tax incentives for export sales to other countries. Cardinal One Carbon Holdings, LLC was formed to hold the partnership interest for the investigation and pursuit of carbon dioxide capture and sequestration. Cardinal Colwich, LLC was formed to purchase the assets of an ethanol plant in Colwich, Kansas. During the quarter, the Company made an initial down payment required by the asset purchase agreement for $3,250,000, which is recorded in prepaid and other current assets on the consolidated balance sheet. All inter-company balances and transactions have been eliminated in consolidation.

On January 31, 2024, the purchase transaction was completed. The transaction was funded by a $22,000,000 loan from the Company's primary lender and the remaining $22,000,000 was funded by operations. Additionally, the Company paid approximately $1,025,000 in additional fees, expenditures to cure liabilities associated with contracts the Company was assuming and to fund the purchase of necessary equipment owned by third parties. These amounts came from the Company's cash reserves. The transaction will be reported as an asset purchase under regulation SX rule 11-01(d) as the plant was idled since April 2023. The prior owner is defunct, and the assets turned over to a receiver from whom the Company purchased them. The Company will establish its own producer base, customer base and employee base to establish this subsidiary as a business.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

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 consolidated financial statements in accordance with U.S. GAAP. 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, valuation of inventories, the assumptions used in the analysis of the impairment of long lived assets, allowance for credit losses, 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, allowance for credit losses, 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 consolidated 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 Cash Equivalents

The Company maintains its accounts primarily at three financial institutions. At times throughout the year the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash equivalents represent money market funds or short-term investments with original maturities of three months or less from the date of purchase, except for those amounts that are held in the investment portfolio for long-term investment. There were no cash equivalents at December 31, 2023. At September 30, 2023, cash equivalents were approximately $33,229,000 and consisted of investments in treasury bills.

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.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

Investments in Available-for-Sale Debt Securities

The Company holds funds in short-term investments in debt securities, such as U.S. treasury bills or treasury notes. As some of the investments in debt securities have an original maturity date greater than three months, these investments are classified as available-for-sale. The Company holds these short-term investments until maturity or for sale in the event cash is needed. Unrealized gains and losses on the Company's investments classified as available-for-sale are recognized in other comprehensive income (loss) until realized.

Investments in Held-to-Maturity Debt Securities

The Company holds funds in short-term investments in debt securities, such as U.S. treasury bills or treasury notes. Some of the investments in debt securities have an original maturity date greater than three months and are being held until maturity in the hedge accounts as collateral for initial margin requirements, these investments are classified as held-to-maturity. The Company has the ability and intent to hold until maturity and the classification was determined at the time of purchase. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization of accretion of premiums and discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security using a straight-line method. At December 31, 2023, the Company did not have any held-to-maturity investments.

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. The Company maintains an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are included as a component of operating expenses in the consolidated statements of operations. The Company assesses collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, the Company considers historical collectibility based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions. At December 31, 2023 and September 30, 2023, the Company determined that an allowance for credit losses 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 December 31, 2023 and September 30, 2023. 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 is planning various capital projects scheduled for the 2024 fiscal year in order to make certain improvements to the ethanol plant and maintain the facility. These improvements include updates to the grain probe and scale system, an additional cooling tower pump, drainage work, and other small miscellaneous projects. The Company recently installed a high

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

protein feed system, costing approximately $50,000,000, including recent change orders. The project was funded from operations and from our current credit facilities as amended. Installation of the system was completed during this quarter ended December 31, 2023. The system is operating and the Company and the manufacturer are testing and modifying the installation to meet guaranteed and optimal rates. This project was placed into service in December 2023.

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 three months ended December 31, 2023 and 2022.

Investments

Investments consist of the capital stock and patron equities of the Company's distillers grains marketer. The investment is 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 consolidated statements of operations.

The Company has also created certain subsidiaries to achieve some of its varying business interests that are not directly related to ethanol production or trading of grain. One has been formed as a corporation, while the other has been formed as a limited liability company (LLC) to hold interests in affiliated companies for carbon capture and underground sequestration (CCS). Through its LLC, the company owns a fifty percent interest in a joint venture which is accounted for as an equity method investment as described in detail in Note 12 - Equity Method Investments.

Passthrough Entity Tax

The Company records Indiana passthrough entity tax in accordance with ASC 740 and has elected to account for the payments as an equity transaction through member distributions. At December 31, 2023, accrued distributions for Indiana passthrough entity tax was $700,000. The Company paid approximately $1,500,000 for 2023 taxes during the three months ended December 31, 2023.

Economic Development Fund

In September 2007, the Company entered into a development agreement with Randolph County Redevelopment Commission (“the Commission”) to promote economic development in the area. Under the terms of this agreement, beginning in January 2008 through December 2028, the money paid towards property tax 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. The Company does not have title to or control over the funds in the acquisition account.

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects 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

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

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.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

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 the consolidated 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 per Unit

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

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.

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 months ended December 31, 2023 and 2022:

Three Months Ended December 31, 2023 (Unaudited)


	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	42,220,110	$	—	$	42,220,110
Distillers Grains	8,742,453		—		8,742,453
Corn Oil	3,297,205		—		3,297,205
Carbon Dioxide	72,316		—		72,316


Total revenues from contracts with customers	54,332,084		—		54,332,084

Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and Other Grains	—		14,779,511		14,779,511
Total revenues from contracts accounted for as derivatives	—		14,779,511		14,779,511
Total Revenues	$	54,332,084	$	14,779,511	$	69,111,595

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

Three Months Ended December 31, 2022 (Unaudited)


	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	86,311,246	$	—	$	86,311,246
Distillers Grains	15,363,951		—		15,363,951
Corn Oil	8,029,640		—		8,029,640
Carbon Dioxide	121,094		—		121,094


Total revenues from contracts with customers	109,825,931		—		109,825,931

Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and Other Grains	—		25,122,188		25,122,188
Total revenues from contracts accounted for as derivatives	—		25,122,188		25,122,188
Total Revenues	$	109,825,931	$	25,122,188	$	134,948,119

(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. The Company recorded advances from customers for $3,000,000 at December 31, 2023. There were no advances from customers as of September 30, 2023.

3. CONCENTRATIONS

Two major customers accounted for approximately 93% and 86% of the outstanding accounts receivable balance at December 31, 2023 and September 30, 2023, respectively. These same two customers accounted for approximately 74% and 75% of revenue for the three months ended December 31, 2023 and December 31, 2022, respectively.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

4. INVENTORIES

Inventories consist of the following as of:


	December 31, 2023 (Unaudited)		September 30, 2023
Ethanol Division:
Raw materials	$	11,659,174	$	3,517,682
Work in progress	1,695,470		1,848,663
Finished goods	3,288,813		4,638,966
Spare parts	5,192,585		4,789,021
Ethanol Division Subtotal	$	21,836,042	$	14,794,332
Trading Division:
Grain inventory	$	8,775,410	$	309,108
Trading Division Subtotal	8,775,410		309,108
Total Inventories	$	30,611,452	$	15,103,440

The Company had a net realizable value write-down of $1,152,000 and $872,000 for ethanol inventory for the three months ended December 31, 2023 and 2022, respectively.

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 December 31, 2023, the Company had forward corn purchase contracts at various fixed prices for various delivery periods through December 2025 for approximately 5% of expected production needs for the next 24 months. Approximately 2% 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 the Company recognized a write-down of $1,337,000 at December 31, 2023 and recognized no impairment at September 30, 2023. 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 December 31, 2023, the Ethanol Division had no forward dried distiller grains sales contracts. At December 31, 2023, the Company had forward corn oil contracts for approximately 62% of expected production for the next month at various fixed prices for delivery through January 2024. Additionally, at December 31, 2023, the Trading Division had forward soybean purchase contracts for approximately 8% of expected origination for various delivery periods through December 2025. Approximately 16% 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.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

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, soybean oil, and soybean derivative instruments are included as a component of cost of goods sold.

At December 31, 2023, the Ethanol Division had a net short (selling) position of 3,195,000 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 and other markets as of December 31, 2023 and are forecasted to settle for various delivery periods through December 2025. The Ethanol Division had a net long (buying) position of 2,352,000 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 2024. The Ethanol Division had a net long (buying) position of 600,000 pounds of soybean oil under derivative contracts as of December 31, 2023. These soybean oil derivatives are traded on the Chicago Board of Trade and are forecasted to settle through March 2024. At December 31, 2023, the Ethanol Division had a net long (buying) position of 372,801 mmbtus of natural gas under derivative contracts used to hedge its forward natural gas purchase contracts. These natural gas derivatives are traded on the New York Mercantile Exchange and other markets and are forecasted to settle for various delivery periods through April 2024. At December 31, 2023, the Trading Division had a net short (selling) position of 685,000 bushels of soybeans under derivative contracts used to hedge its forward soybean purchase contracts. These soybean derivatives are traded on the Chicago Board of Trade and are, as of December 31, 2023, forecasted to settle for various delivery periods through January 2025. 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 December 31, 2023:


Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures and Options Derivatives	$	—	$	4,540,957
Corn Futures and Options Contracts	Futures and Options Derivatives	$	668,950	$	—
Soybean Oil Futures and Options Contracts	Futures and Options Derivatives	$	—	$	30,354
Natural Gas Futures and Options Contracts	Futures and Options Derivatives	$	—	$	322,557
Soybean Futures and Options Contracts	Futures and Options Derivatives	$	134,387	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	258,150	$	275,009

As of December 31, 2023, the Company had approximately $13,362,000 of cash collateral (restricted cash) related to ethanol, corn, soybean oil, natural gas, and soybean derivatives held by three brokers.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2023:


Instrument	Balance Sheet Location	Assets		Liabilities

Ethanol Futures and Options Contracts	Futures and Options Derivatives	$	—	$	3,513,693
Corn Futures and Options Contracts	Futures and Options Derivatives	$	—	$	29,108
Natural Gas Futures and Options Contracts	Futures and Options Derivatives	$	—	$	253,586
Soybean Oil Futures and Options Contracts	Futures and Options Derivatives	$	—	$	21,534
Soybean Futures and Options Contracts	Futures and Options Derivatives	$	352,464	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	66,825	$	356,177

As of September 30, 2023, the Company had approximately $13,425,000 of cash collateral (restricted cash) related to ethanol, corn, soybean oil, natural gas, and soybean derivatives held by three brokers.

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


Instrument	Statement of Operations Location	Three Months Ended December 31, 2023		Three Months Ended December 31, 2022
Corn Futures and Options Contracts	Cost of Goods Sold	$	2,685,316	$	2,145,852
Ethanol Futures and Options Contracts	Revenues	(132,497)		2,411,665
Natural Gas Futures and Options Contracts	Cost of Goods Sold	(540,659)		(776,052)
Soybean Oil Futures and Options Contracts	Cost of Goods Sold	(8,820)		(16,927)
Soybean Futures and Options Contracts	Cost of Goods Sold	(204,521)		(1,552,337)
Soybean Forward Purchase and Sales Contracts	Cost of Goods Sold	405,506		550,043
Totals		$	2,204,325	$	2,762,244

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

6. FAIR VALUE MEASUREMENTS

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of December 31, 2023:


Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	668,950	$	668,950	$	668,950	$	—	$	—
Ethanol Futures and Options Contracts	$	(4,540,957)	$	(4,540,957)	$	(4,540,957)	$	—	$	—
Soybean Oil Futures and Options Contracts	$	(30,354)	$	(30,354)	$	(30,354)	$	—	$	—
Natural Gas Futures and Options Contracts	$	(322,557)	$	(322,557)	(387,281)		$	64,724	$	—
Soybean Futures and Options Contracts	$	134,387	$	134,387	$	134,387	$	—	$	—
Soybean Forward Purchase Contracts	$	(16,859)	$	(16,859)	$	—	$	(16,859)	$	—
Soybean Inventory	$	8,775,479	$	8,775,479	$	—	$	8,775,479	$	—
Accounts Payable	$	(12,354,031)	$	(12,354,031)	$	—	$	(12,354,031)	$	—

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2023:


Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	(29,108)	$	(29,108)	$	(60,637)	$	31,529	$	—
Ethanol Futures and Options Contracts	$	(3,513,693)	$	(3,513,693)	$	(3,513,693)	$	—	$	—
Natural Gas Futures and Options Contracts	$	(253,586)	$	(253,586)	$	(39,300)	$	(214,286)	$	—
Soybean Oil Futures and Options Contracts	$	(21,534)	$	(21,534)	$	(21,534)	$	—	$	—
Soybean Futures and Options Contracts	$	352,464	$	352,464	$	352,464	$	—	$	—
Soybean Forward Purchase Contracts	$	(289,352)	$	(289,352)	$	—	$	(289,352)	$	—
Soybean Inventory	$	309,108	$	309,108	$	—	$	309,108	$	—
Accounts Payable	$	(3,908,868)	$	(3,908,868)	$	—	$	(3,908,868)	$	—
Treasury Bills (classified as cash equivalents)	$	12,407,939	$	12,407,939	$	12,407,939	$	—	$	—

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 treasury bills utilizing Level 1 inputs by obtaining fair value measurements from an independent pricing service. The fair value measurements consider observable data based on quoted market prices in active markets.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

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 December 31, 2023 and September 30, 2023.

Accounts payable is generally stated at historical amounts, with the exception of approximately $12,354,000 and $3,909,000 at December 31, 2023 and September 30, 2023, 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.

The Company believes the fair value of its long-term debt to be the carrying value of approximately $30,569,000 at December 31, 2023 and September 30, 2023, respectively. The Company considers this to be a Level 2 input. The fair values and carrying values consider the terms of the related debt and exclude the impacts of discounts and derivative/hedging activity.

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. On January 31, 2024, the Company and Cardinal Colwich amended the loan agreement. The primary purpose of the amendment was to provide additional financing to Cardinal Colwich to fund a portion of the funds needed to complete the purchase of an ethanol plant in Colwich, Kansas, permit the Company to use funds from the Revolving Credit Loan to support Cardinal Colwich's working capital needs and capital expenditures and to allow the Company to request an additional $10,000,000 of maximum available credit on the Revolving Credit Loan.

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 $39,000,000 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 8.45% at December 31, 2023 and September 30, 2023. 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 May 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. The Company had borrowings outstanding of approximately $30,569,000 on the Declining Loan at December 31, 2023 and September 30, 2023.

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 8.25% at December 31, 2023 and September 30, 2023. There were no borrowings outstanding on the Revolving Credit Loan at December 31, 2023 and September 30, 2023. The Revolving Credit Loan was set to mature on February 28, 2024. The amendment provides that the Company may request a $10,000,000 increase in the maximum

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

commitment under the Revolving Credit Loan, subject to approval of the lender, and may use funds from the Revolving Credit Loan to support Cardinal Colwich's working capital needs and capital expenditures. The borrowing base calculation used to determine the amount available under the Revolving Credit Loan has also been amended to include Cardinal Colwich's corn, ethanol, dried distillers grain, corn oil and soybean inventories, eligible accounts receivable and commodity trading account excess margin funds. The amendment extends the termination date of the Revolving Credit Loan to February 28, 2025.

Term Loan

The amendment provides for a new $22,000,000 Term Loan to Cardinal Colwich with an interest rate based on the prime rate plus twenty-five basis points (.25%) subject to a floor of 3.25%. Cardinal Colwich is required to make monthly interest payments on the Term Loan until June 1, 2024. Commencing on July 1, 2024, the Term Loan is to be repaid by Cardinal Colwich in fifty-nine equal monthly installments based on a seven year amortization until March 1, 2029, when the outstanding principal balance together with accrued and unpaid interest will be due.

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 $6,000,000 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 amendment modifies these covenants to provide for a consolidated minimum working capital requirement of $25,000,000, and a capital expenditures covenant that allows the Company and Cardinal Colwich $10,000,000, in the aggregate, of expenditures per year without prior approval. There is also a requirement to maintain a minimum consolidated fixed charge coverage ratio of no less than 1.15:1.0 measured quarterly. A consolidated 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 consolidated working capital is equal to or more than $35,000,000.

The estimated maturities of long-term debt at December 31, 2023 are as follows:


January 1, 2024 - December 31, 2024	$	1,980,218
January 1, 2025 - December 31, 2025	3,553,260
January 1, 2026 - December 31, 2026	3,869,920
January 1, 2027 - December 31, 2027	4,214,803
January 1, 2028 - December 31, 2028	4,586,362
Thereafter	12,364,395
Total long-term debt	$	30,568,958

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. As of December 31, 2023, the Company’s weighted average discount rate was 7.98%. 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 1 year to 5 years, which may include options to extend the lease when it is reasonably certain the Company will exercise those options. As of December 31, 2023, the weighted average remaining lease term was 4.04 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.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

The following table summarizes the remaining maturities of the Company’s operating lease liabilities as of December 31, 2023:


For the Fiscal Year Ending September 30,
2024	$	3,833,390
2025	1,772,100
2026	1,772,100
2027	1,772,100
2028	1,624,425
Totals	10,774,115
Amount representing interest	(1,603,967)
Lease liabilities	$	9,170,148

For the three months ended December 31, 2023, the Company recorded operating lease costs of approximately $917,000 in cost of goods sold in the Company’s statement of operations. Cash paid for the operating leases was approximately $917,000 for the three months ended December 31, 2023.

9. COMMITMENTS AND CONTINGENCIES

Marketing Agreement

The Company entered into an agreement with an unrelated company for the purpose of marketing and selling all the distillers grains the Company is expected to produce. The buyer agrees to remit a fixed percentage rate of the actual selling price to the Company for distillers dried grain solubles and wet distiller grains. The agreement may be terminated by either party at its unqualified option, by providing written notice of not less than 120 days to the other party.

The Company entered into an agreement with an unrelated company to sell all of the ethanol the Company produces at the plant. The Company agrees to pay a commission of a fixed percent of the net purchase price for marketing and distribution. In July 2009, the initial term of the agreement was extended to eight years and the commission increased in exchange for reducing the payment terms from 14 days to 7 days after shipment. In November 2012, the Company amended this agreement to extend the initial term of the agreement to eleven years, expiring in 2019, in exchange for capping the commissions at $1,750,000 per year. Effective November 18, 2018, the two companies amended the marketing agreement. The amendment added a renewal term to the initial agreement that extended the contract until November 30, 2022. It provided for the payment of the commission to Murex to be calculated on each net gallon of ethanol taken under the agreement. It modified how the cost of rail car shipments are charged to the Company, moving from a per gallon fee to requiring that the marketer provide a minimum 225 rail cars to the Company on a per car per month lease basis as described in Note 8. Finally, it reduced the delivery to payment period. On September 14, 2022, the Company executed an amendment to extend the term until December 31, 2024, subject to automatic renewals thereafter for one-year periods unless either party gives notice of non-renewal at least 90 days prior to the end of the current term. The agreement may also be terminated due to the insolvency or intentional misconduct of either party or upon the default of one of the parties as set forth in the agreement. In addition, the amendment added a provision that allows the Company to terminate the agreement on 90 days prior written notice upon a "Material Change in Control". Upon termination of the agreement for any reason, the Company may be obligated to continue to deliver ethanol for a period of time to cover certain contractual commitments for which the Company gave prior written approval. The amendment also provides for certain adjustments to the purchase price for sales made to the marketer for its own account or for sales of exported ethanol. If this adjusted price can not be finalized at time of payment, the parties may agree upon a provisional price which shall be trued up later. The amendment was effective on December 1, 2022.

Rail Car Rehabilitation Costs

The Company leased 180 hopper rail cars under a multi-year agreement which ended in November 2023. The Company executed a renewal to lease 179 hopper rail cars under a multi-year agreement effective December 2023 and ending in

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

November 2028. 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 December 31, 2023, to be approximately $2,434,000. During the three months ended December 31, 2023, the Company has recorded a corresponding expense in cost of goods sold of approximately $89,000. 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 was expected to cost approximately $50,000,000, including change orders, and be funded from operations and from our current credit facilities as amended. This project was placed into service in December 2023 and is currently operating successfully. ICM and the Company are in the process of making adjustments to optimize production to meet guarantees and specifications within the contract. There was no high protein product sold during the period ended December 31, 2023.

Asset Purchase Agreement

On October 23, 2023, Cardinal Colwich, LLC ("Cardinal Colwich"), a wholly owned subsidiary of the Company, entered into an Asset Purchase Agreement (the "APA") with Element, LLC ("Seller") by and through Creative Planning Business Alliance, LLC (the "Receiver") acting in its capacity as the court-appointed receiver. The APA provides for the purchase of substantially all of the assets of Seller used in connection with the production of ethanol, high protein distillers grains and corn oil as set forth in more detail in the APA (the "Purchased Assets") free and clear of any claims, restrictions, mortgages, security interest, demands, charges and encumbrances. The facility was constructed by ICM, Inc. with a name plate capacity to produce 70 million gallons of ethanol annually and is located in Colwich, Kansas. The cash purchase price for the Purchased Assets is $44,000,000. In addition, Cardinal Colwich will assume certain liabilities specified in the APA. On January 31, 2024, the transaction was completed. The transaction was funded by a $22,000,000 loan from the Company's primary lender and the remaining $22,000,000 was funded by operations. Additionally, the Company paid approximately $1,025,000 in additional fees, expenditures to cure liabilities associated with contracts the Company was assuming, and to fund the purchase of necessary equipment owned by third parties. These amounts came from the Company's cash reserves.

In connection with the acquisition, Cardinal Colwich assumed certain material contracts. On January 31, 2024, Cardinal Colwich assumed a license agreement which provides a revocable, royalty-free, non-assignable, non-exclusive license to use certain proprietary technologies and information in connection with the ownership, operation and maintenance of the facility in Kansas. The license agreement may be terminated if Cardinal Colwich uses the proprietary property for any unauthorized purpose or in violation of the license agreement, makes an unauthorized disclosure of the proprietary property or breaches the license agreement and fails to cure as provided.

On January 31, 2024, Cardinal Colwich also assumed a water sharing agreement to permit it to use water for operations at the facility in Kansas from a water right owned by an unrelated party subject to certain restrictions on rates of diversion and consumption and cumulative amounts used. Cardinal Colwich will be required pay certain costs, expenses, fees, assessments and charges and pay an annual fee for the use of the water. The water sharing agreement as amended, provides that it can be terminated by the owner of the water right after an initial period upon written notice to Cardinal Colwich of a specified time before such termination goes into effect. In addition, if the owner of the water right needs the water for its operations, it can also recall the water or reduce the amounts Cardinal Colwich can use after an initial period upon written notice to Cardinal Colwich of a specified time before such recall or reduction goes into effect. The water sharing agreement may also be terminated upon Cardinal Colwich's breach of, and failure to cure, as provided therein.

10. RISKS AND 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 three months ended December 31, 2023, ethanol sales averaged approximately 61% of total revenues and corn costs averaged 57% of total cost of goods sold.

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

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 during the quarter were good, but not as robust as in the past two years. Good corn crops contributed to lower input costs. The high margin environment that pervaded in the industry leading up to the quarter provided incentive to ethanol refiners to produce at high levels, reducing ethanol prices. These contributed to somewhat lower margins in the quarter. Natural gas prices have been volatile as well during the quarter and to the date of this report. 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.

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:

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023



	Three Months Ended
	December 31, 2023		December 31, 2022
Revenue:	(unaudited)		(unaudited)
Ethanol division	$	54,332,084	$	109,825,931
Trading division	14,779,511		25,122,188
Total Revenue	$	69,111,595	$	134,948,119

	Three Months Ended
	December 31, 2023		December 31, 2022
Gross Profit:	(unaudited)		(unaudited)
Ethanol division	$	4,746,308	$	17,571,180
Trading division	776,728		367,764
Total Gross Profit	$	5,523,036	$	17,938,944

	Three Months Ended
	December 31, 2023		December 31, 2022
Operating Income (Loss):	(unaudited)		(unaudited)
Ethanol division	$	2,424,186	$	15,615,819
Trading division	459,484		50,521
Total Operating Income	$	2,883,670	$	15,666,340


	December 31, 2023		September 30, 2023
Grain Inventories:	(unaudited)
Ethanol division	$	11,659,174	$	3,517,682
Trading division	8,775,410		309,108
Total Grain Inventories	$	20,434,584	$	3,826,790

	December 31, 2023		September 30, 2023
Total Assets:	(unaudited)
Ethanol division	$	249,082,505	$	234,913,852
Trading division	12,671,991		(2,145,605)
Total Assets	$	261,754,496	$	232,768,247

12. EQUITY METHOD INVESTMENTS

The Company, through its wholly owned subsidiary, Cardinal One Carbon Holdings, LLC, owns a fifty percent interest in a limited partnership. That partnership was formed as a joint venture with another unrelated investor to investigate and pursue carbon dioxide capture and underground sequestration. The Company accounts for this investment using joint venture accounting and, therefore, under the equity method. Cardinal One Carbon Holdings, LLC was formed on June 22, 2022 to hold the partnership interest in the limited partnership and began its administrative operations on September 1, 2022.

The Company's policy related to investments in both common stock and in-substance common stock that give the Company the ability to exercise significant influence over the operating and financial polices of an entity in which it invests even though the

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CARDINAL ETHANOL, LLC AND SUBSIDIARIES

Notes to Consolidated Condensed Unaudited Financial Statements

December 31, 2023

Company holds 50% or less of the common stock or in-substance common stock (or both common and in-substance common stock) is to account for such investment under the equity method. The Company considers its financial position and results of operations in evaluating the extent of disclosures of the financial position and results of operations of an entity in which the Company invests.

As the Company owns a fifty percent interest in the limited partnership, an investment in affiliate of approximately $7,187,000 and $5,651,000 was reflected on the balance sheet as of December 31, 2023, and September 30, 2023, respectively. Losses on equity method investment of approximately $114,000 was reflected on the statement of operations for the three months ended December 31, 2023.

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

We prepared the following discussion and analysis to help you better understand our financial condition, changes in our financial condition, and results of operations for the three month period ended December 31, 2023, compared to the same period of the prior fiscal year. This discussion should be read in conjunction with the consolidated condensed financial statements (the "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, 2023. References to “we,” “us,” “our,” “Cardinal Ethanol” and the “Company” refer to Cardinal Ethanol, LLC.

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, distillers 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 pandemics, including COVID-19;

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

•Decreases in our plant production rates due to installation of our high protein feed system.

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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 "EPC 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 EPC Agreement and subsequent adjustments due to change orders executed by the parties, we expect to pay approximately $50,000,000, including recent change orders, 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™, a high protein feed product, 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 began installation of the system during the fourth quarter of our fiscal year 2022 and the system was placed into service in December 2023. We did not have any sale of high protein during the three months ended December 31, 2023. We experienced a shutdown of our plant during the three months ended December 31, 2023 in connection with the installation of our high protein feed system which resulted in a reduction in gallons of ethanol, tons of distillers grains and pounds of corn oil produced during the period. We also expect that there will be a period of time of up to three months before our production rates of ethanol and corn oil production will return to historic levels. In addition, our distillers grains production is transitioning and is expected to be replaced with a high protein feed product and fiber meal once the project ramps up to expected rates. However, the overall reduction in production of our products caused by the installation of the system may be significant and could adversely impact our profitability.

We have engaged with an unrelated third party 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"). On January 16, 2023, Cardinal One Carbon Holdings, LLC, a wholly owned subsidiary of Cardinal Ethanol, LLC, entered into a Partnership Agreement (the "LPA") with Vault CCS Holdings LP pursuant to which Cardinal One Carbon Holdings, LLC and Vault CCS Holdings LP formed a joint venture operating under the name of One Carbon Partnership Holdings LP (the "Limited Partnership") to pursue the CCS Project. The LPA governs the rights, duties and responsibilities of the parties in connection with the ownership of the Limited Partnership. In addition, on the same date, Cardinal One Carbon Holdings, LLC and Vault CCS Holdings LP entered into an Amended and Restated Limited Liability Company Agreement of One Carbon Partnership GP LLC (the "GP"). The purpose of the GP is to serve as the general partner of the Limited Partnership. The CCS Project is still in its early stages and is subject to many variables that could have a material effect on its feasibility and the parties' ability to complete the CCS Project. Please refer to Item 1 - Financial Statements - Note 12 - Equity Method Investments for more information.

On October 23, 2023, Cardinal Colwich, LLC ("Cardinal Colwich"), a wholly owned subsidiary of Cardinal Ethanol, LLC, entered into an Asset Purchase Agreement with Element, LLC ("Seller") by and through Creative Planning Business Alliance, LLC (the "Receiver") acting in its capacity as the court-appointed receiver (the "APA"). The APA provides for the purchase of substantially all of the assets of Seller used in connection with the production of ethanol, high protein distillers grains and corn oil as set forth in more detail in the APA (the "Purchased Assets") free and clear of any claims, restrictions, mortgages, security interest, demands, charges and encumbrances. The facility was constructed by ICM, Inc. with a name plate capacity to produce 70 million gallons of ethanol annually and is located in Colwich, Kansas. The cash purchase price for the Purchased Assets is $44,000,000. In addition, Cardinal Colwich will assume certain liabilities specified in the APA. On January 31, 2024, the purchase transaction was completed. The transaction was funded by a $22,000,000 loan from Cardinal

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Ethanol's primary lender and the remaining $22,000,000 was funded by operations. Additionally, Cardinal Colwich paid approximately $1,025,000 in additional fees, expenditures to cure liabilities associated with assumed contracts, and to fund the purchase of necessary equipment owned by third parties. These amounts came from cash reserves.

On November 21, 2023, the board of directors declared a cash distribution of $300 per membership unit to the holders of units of record at the close of business on November 21, 2023 for a total distribution of $4,381,800. We paid the distribution on November 29, 2023.

On January 31, 2024, Cardinal Ethanol and Cardinal Colwich entered into a Second Amended and Restated Construction Loan Agreement (the "Second Amended Credit Agreement"), which amends and restates the First Amended and Restated Construction Loan Agreement dated June 10, 2013, as amended (the "First Amended Credit Agreement"), with First National Bank of Iowa ("FNBO"). The primary purpose of the Second Amended Credit Agreement was to provide additional financing to Cardinal Colwich to fund a portion of the funds needed to complete the acquisition of the Purchased Assets, permit Cardinal Ethanol to use funds from the Revolving Credit Loan to support Cardinal Colwich's working capital needs and capital expenditures and to allow Cardinal Ethanol to request an additional $10,000,000 of maximum available credit on the Revolving Credit Loan. Please refer to Item 1 - Financial Statements - Note 7 - Bank Financing for more information.

In connection with the acquisition, Cardinal Colwich assumed, certain material contracts. On January 31, 2024, Cardinal Colwich assumed the Owner's License Agreement dated March 2, 2018 between Element, LLC and ICM, Inc. as amended on December 16, 2020 and March 25, 2022 (collectively, the "License Agreement"). The License Agreement provides a revocable, royalty-free, non-assignable, non-exclusive license by ICM, Inc. to use certain proprietary technologies and information as defined in the License Agreement to produce ethanol, RINS, carbon credits, corn oil, feed products and other products in connection with the ownership, operation maintenance and repair of the Kansas Plant. ICM may terminate the License Agreement if Cardinal Colwich uses the proprietary property for any unauthorized purpose or in violation of the License Agreement, discloses the proprietary property to anyone other than permitted by the License Agreement or upon Cardinal Colwich's breach of and failure to cure the License Agreement as provided.

On January 31, 2024, Cardinal Colwich also assumed the Water Sharing Agreement dated February 28, 2018 between Element, LLC and Kansas Gas & Electric Company, now Evergy Kansas South, Inc. ("Evergy"), as amended on January 31, 2024 (collectively, the "Water Sharing Agreement"). The Water Sharing Agreement provides Cardinal Colwich with the right to use water for operations at the Kansas Plant from a Water Right owned by Evergy, subject to certain restrictions on rates of diversion and consumption and cumulative amounts used. As amended, the Water Sharing Agreement provides that Evergy can terminate the Water Sharing Agreement after an initial period upon written notice to Cardinal Colwich of a specified time before such termination goes into effect. In addition, if Evergy needs the water for its operations, it can recall the water (a "Temporary Total Restriction") or reduce the amounts Cardinal Colwich can use (a "Temporary Partial Restriction") after an initial period upon written notice to Cardinal Colwich of a specified time before such recall or reduction goes into effect. In exchange for the use of the water, Cardinal Colwich will reimburse Evergy for certain, costs, expenses, fees, assessments and charges and pay an annual fee. Evergy may also terminate the Water Sharing Agreement upon Cardinal Colwich's breach of, and failure to cure, the Water Sharing Agreement as provided therein. Cardinal Colwich has the responsibility to maintain and repair the wells, pipes and related equipment and report the volume of water used from the Water Right to Evergy.

We record Indiana passthrough entity tax in accordance with ASC 740 and have elected to account for the payments as an equity transaction through member distributions. At December 31, 2023, accrued distributions for passthrough entity tax was $700,000 and cash payments made for distributions for passthrough entity tax was $1,500,000.

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 December 31, 2023 and 2022

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the three months ended December 31, 2023 and 2022:


	2023			2022
Statement of Operations Data	Amount		%	Amount		%
Revenue	$	69,111,595	100.0	$	134,948,119	100.0
Cost of Goods Sold	63,588,559		92.0	117,009,175		86.7
Gross Profit	5,523,036		8.0	17,938,944		13.3
Operating Expenses	2,639,366		3.8	2,272,604		1.7
Operating Income	2,883,670		4.2	15,666,340		11.6
Other Income (Expense)	(163,648)		(0.2)	239,325		0.2
Net Income	$	2,720,022	4.0	$	15,905,665	11.8

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 now that the system is operating, however, no high protein was sold during the three months ended December 31, 2023. 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 statements of operations for the three months ended December 31, 2023 and 2022:


	2023				2022
Revenue:	Amount		% of Total Revenues		Amount		% of Total Revenues
Ethanol division	$	54,332,084	78.6	%	$	109,825,931	81.4	%
Trading division	14,779,511		21.4	%	25,122,188		18.6	%
Total Revenue	$	69,111,595	100.0	%	$	134,948,119	100.0	%

Ethanol Division

The following table shows the sources of our revenues from our Ethanol Division for the three months ended December 31, 2023 and 2022:

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	2023				2022
Revenue Source	Amount		% of Revenues		Amount		% of Revenues
Ethanol	$	42,220,110	77.7	%	$	86,311,246	78.6	%
Distillers Grains	8,742,453		16.1		15,363,951		14.0
Corn Oil	3,297,205		6.1		8,029,640		7.3
Carbon Dioxide	72,316		0.1		121,094		0.1

Total Revenues	$	54,332,084	100.0	%	$	109,825,931	100.0	%

Ethanol

Our revenues from ethanol decreased in the three months ended December 31, 2023 as compared to the the same period in 2022. This decrease in revenues is primarily the result of lower ethanol prices and a decrease in gallons of ethanol sold during the period which largely results from the shutdown associated with the installation of the high protein feed system. 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 December 31, 2023 was approximately 18% lower than the average price per gallon of ethanol sold for the same period in 2022. Ethanol market prices were lower, particularly towards the end of the current period, due to a decrease in corn prices due primarily to favorable growing conditions for the corn crop for fall of 2023. In addition, wholesale gasoline prices also declined during the quarter. Ethanol prices are typically directionally consistent with the price of corn meaning that lower corn prices can lead to volatility and have a significant negative effect on ethanol prices. They may also be heavily influenced by the price of gasoline, tending to dampen prices on an initial decline and then encourage higher ethanol prices later as more motorists take advantage of low gasoline products. Another significant factor was that many ethanol producers have increased production during the past several months. This greater amount of production has increased supplies nationwide as well as internationally, also resulting in lower ethanol prices.

Management believes that ethanol prices will continue to be influenced by corn and energy prices, inventory levels, global economics and inflationary factors. If corn prices further decrease that would likely contribute to lower ethanol prices and our profitability. Industry over-production due to a period of positive operating margins could also continue to have a negative effect on ethanol prices. However, foreign demand could increase if other countries move to higher blends of ethanol which may contribute to higher ethanol prices.

We experienced a decrease in ethanol gallons sold of approximately 40% for the three months ended December 31, 2023 as compared to the same period in 2022 resulting primarily from decreased ethanol production rates for the period. The plant was shutdown for approximately four weeks during the three months ended December 31, 2023 in connection with the installation of our high protein feed system which resulted in a reduction in production and sales of ethanol during the period. In addition, we expect that there will be a period of time of up to three months before our ethanol production rates will return to historic levels. This overall reduction in gallons of ethanol produced could be significant and have an adverse effect on our profitability. In addition, 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 decreased in the three months ended December 31, 2023 as compared to the same period in 2022. This decrease in revenues is primarily the result of lower distillers grains prices and a decrease in distillers grains sold for the period ended December 31, 2023 as compared to the same period in 2022.

The average price per ton of distillers grains sold for the three months ended December 31, 2023 was approximately 12% lower than the average price per ton of distillers grains sold for the same period in 2022. This decrease in the market price

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of distillers grains is primarily due to lower corn and soybean meal prices for the current period as well as a seasonal decrease in the ration of distillers grains in livestock feed.

Management anticipates that distillers grains prices will continue to be affected by the price of corn and soybean meal. We also typically experience some seasonal decline in prices during warmer months as cattle feeders turn more to grazing their herds. 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.

We sold approximately 36% less tons of distillers grains in the three months ended December 31, 2023 as compared to the same period in 2022 resulting primarily from decreased ethanol production levels due to our plant shut down which resulted in decreased distillers grains production and sales for the period. Our distillers grains production is now transitioning with completion of the installation of our high protein feed system and will eventually be replaced with a high protein feed product and a high fiber meal product. However, we expect that there will be a period of time up to three months before we are able to ramp up production of high protein feed.

Corn Oil

Our revenues from corn oil sales decreased in the three months ended December 31, 2023 as compared to the same period in 2022 which was mainly the result of lower corn oil prices and a decrease in corn oil sales. The average price per pound of corn oil was approximately 15% lower for the three months ended December 31, 2023 as compared to the same period in 2022. Decreased soybean oil prices along with decreased biodiesel production had a negative effect on corn oil prices for the period. Soybean oil is the primary competitor with distillers corn oil. However, the supply of used cooking oil has also become more prevalent and competes with distillers corn oil in the market.

Management anticipates that corn oil prices will continue to follow soybean oil prices. Corn oil prices are also affected by industry changes in corn oil supply due to operating conditions. 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. However, an increase in the supply of used cooking oil could have a negative effect on corn oil prices.

We also sold approximately 51% less pounds of corn oil in the three months ended December 31, 2023 as compared to the same period in 2022 resulting primarily from decreased ethanol production levels due to our plant shut down which resulted in decreased corn oil production and sales for the period. In addition, we expect that there will be a period of time of up to three months before our corn oil production rates will return to historic levels. This overall reduction in corn oil produced could be significant and have an adverse effect on our profitability.

Trading Division

The following table shows the sources of our revenues from our Trading Division for the three months ended December 31, 2023 and 2022:


	2023				2022
Revenue Source	Amount		% of Revenues		Amount		% of Revenues
Soybean Sales	$	14,779,511	100.0	%	$	25,122,188	100.0	%

Total Revenues	$	14,779,511	100.0	%	$	25,122,188	100.0	%

Soybeans

During the three months ended December 31, 2023 revenues from our Trading Division were derived from transporting and selling soybeans. Our revenues from soybeans sales decreased in the three months ended December 31, 2023 as compared to the same period in 2022. This decrease in revenues is the result of a decrease in the bushels of soybeans sold of approximately 34% for the three months ended December 31, 2023 as compared to the same period in 2022. The reduction was primarily due to less conducive market conditions for selling for the three months ended December 31, 2023. There has also been reduced export demand for U.S product because South America has experienced good crops and is competing in the world

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market. The average price per bushel of soybeans sold for the three months ended December 31, 2023 decreased by approximately 10% compared to the same period in 2022 primarily due to an increase in national supply of soybeans resulting in lower soybean prices. 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 91% for the three months ended December 31, 2023 as compared to approximately 84% for the same period in 2022. This increase in cost of goods sold as a percentage of revenues was the result of volatility in the prices of ethanol and corn for the three months ended December 31, 2023 as compared to the same period in 2022. 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 December 31, 2023, we used approximately 40% less bushels of corn to produce our ethanol, distillers grains and corn oil as compared to the same period in 2022 due to lower ethanol production levels for the period. During the three months ended December 31, 2023, our average price paid per bushel of corn was approximately 20% lower as compared to the same period in 2022 due to favorable growing conditions for the corn crop for fall of 2023 and lower prices and export demand because South America has had good crops, increasing supply worldwide.

Weather, world supply and demand, current and anticipated stocks, agricultural policy and other factors can contribute to volatility in corn prices. Higher corn prices and increased volatility would 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 lower during the three months ended December 31, 2023 as compared to the same period in 2022. This decrease in cost of natural gas for the three months ended December 31, 2023 as compared to the same period in 2022 was primarily the result of decreased prices for the period. Our average price per MMBTU of natural gas, excluding hedging activity, was approximately 32% lower during the three months ended December 31, 2023 due to a mild winter, a decrease in the price of crude oil and less volatility in prices. The use of natural gas for the three months ended December 31, 2023 was approximately 37% less as compared to the same period in 2022 due to decreased dried distillers grains production for period.

Management expects that natural gas prices will be dependent upon government policy and seasonal weather conditions. 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 could have a negative effect on natural gas prices.

Rail Car Rehabilitation Costs

We lease 179 hopper rail cars under a multi-year agreement which runs through November 2028. 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 December 31, 2023, we have recorded an expense in cost of goods sold of approximately $89,000. We accrue the estimated cost per railcar damages of $29,714 per

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month over the term of the lease. The accrued liability for these rehabilitation costs is approximately $2,434,000 at December 31, 2023.

Trading Division

The following table shows the costs incurred to procure various agricultural commodities for our Trading Division for the three months ended December 31, 2023 and 2022:


	2023				2022
	Amount		% of Revenues		Amount		% of Revenues
Soybeans	$	14,002,783	94.7	%	$	24,754,424	98.5	%
Total Cost of Goods Sold	$	14,002,783	94.7	%	$	24,754,424	98.5	%

Soybeans

During the three months ended December 31, 2023, our cost was primarily the procurement of soybeans sold. During the three months ended December 31, 2023, our average price paid per bushel of soybeans was approximately 36% lower as compared to the same period in 2022 due to decreased concerns over the carryout of soybean inventory from the 2023 harvest, both nationally and worldwide. We also purchased approximately 2% less bushels of soybeans in the three months ended December 31, 2023 compared to 2022 because of our four week shutdown during the period in connection with the installation of our high protein feed project. We normally fill an extra bin with soybeans, which is otherwise used for corn most of the year so that we can hold those beans to achieve profits from the normal carry/contango in the soybean market at harvest. This year that bin was full of corn due to reduced ethanol production.

Derivatives

We enter into hedging instruments to minimize price fluctuations in the prices of our finished products and inputs. As the current market price of our hedge positions change, 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 4% and 2% for the three months ended December 31, 2023 and 2022, 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 for the three months ended December 31, 2023 compared to the same period in 2022. 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.

Operating Income

Our income from operations for the three months ended December 31, 2023 was approximately 4% of revenues as compared to 12% of revenues for the same period in 2022. The decrease for the three months ended December 31, 2023 was primarily the result of weakened ethanol to corn margins, volatile commodity prices, and lower ethanol, distillers grains and corn oil production and sales for the period.

Other Income (Expense)

Our other expense was approximately (0.2)% and other income was approximately 0.2% of revenues for the three months ended December 31, 2023 and 2022, respectively. Our other expense consisted primarily of the interest income received

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during the three months ended December 31, 2023 offset by the loss on decommissioning assets that were replaced by the high protein feed project installation. Other income for the three months ended December 31, 2022 consisted primarily of the interest income received.

Changes in Financial Condition for the Three Months Ended December 31, 2023

The following table highlights the changes in our financial condition:


	December 31, 2023 (Unaudited)		September 30, 2023
Current Assets	$	148,704,575	$	130,398,907
Long-Term Assets	$	113,049,921	$	102,369,340
Current Liabilities	$	54,010,584	$	28,027,888
Long-Term Liabilities	$	36,962,002	$	32,207,342
Members' Equity	$	170,781,910	$	172,533,017

We experienced an increase in our current assets at December 31, 2023 as compared to September 30, 2023. This increase was primarily driven by an increase in cash and inventory at December 31, 2023 as compared to September 30, 2023 due to deferred farmer payments which improved cash balances, coupled with increased grain inventories from reduced ethanol production during the period.

We experienced an increase in our long term assets at December 31, 2023 as compared to September 30, 2023. The increase is attributed to placing the high protein feed project into service, netted with the decommissioned assets it replaced. This was coupled with an increase in the operating lease right-of-use asset resulting from the renewal of our lease of one hundred seventy-nine hopper rail cars that we use for moving distillers grains, corn and soybeans.

We experienced an increase in our total current liabilities at December 31, 2023 as compared to September 30, 2023. This increase was primarily due to an increase in our accounts payable grain because our farmer producers deferred more bushels for payment until subsequent periods at December 31, 2023 as compared to September 30, 2023. This increase can also be attributed to the receipt of an advance payment from a customer during the period ended December 31, 2023 for corn oil.

We experienced an increase in our long-term liabilities as of December 31, 2023 as compared to September 30, 2023 primarily attributed to the increase in the operating lease liabilities due to the renewal of the hopper car lease in December 2023 that is scheduled to mature in November 2028.

Liquidity and Capital Resources

We engaged ICM, Inc. to install a system to produce high protein feed which is currently expected to cost approximately $50,000,000, including recent change orders. The agreement called for a down payment and scheduled payments at key points during the construction and installation process, which began during the fourth quarter of fiscal 2022. This project was installed and placed into service in December 2023.

The prices of ethanol, corn, natural gas and soybeans have been volatile 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 volatility in commodity prices continues, we may explore options with our primary lender to expand the funding of our working capital.

Based on financial forecasts performed by our management, we anticipate that we will have sufficient cash from our credit facilities and cash from our operations to continue to operate the ethanol plant for the next 12 months. However, should operating conditions in the ethanol industry deteriorate or continue for a prolonged period, we could have difficulty maintaining our liquidity and may need to rely on our revolving lines of credit or seek to increase our limits for operations.

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The following table shows cash flows for the three months ended December 31, 2023 and 2022:


	2023		2022
Net cash provided by operating activities	$	17,070,154	$	35,259,117
Net cash provided by (used for) investing activities	8,795,788		(19,222,679)
Net cash used for financing activities	(5,881,800)		(117,081)
Net increase in Cash, Cash Equivalents, and Restricted Cash	19,984,142		15,919,357
Cash, Cash Equivalents, and Restricted Cash, beginning of period	83,284,409		63,239,614
Cash, Cash Equivalents, and Restricted Cash, end of period	$	103,268,551	$	79,158,971

Cash Flow provided by Operating Activities

We experienced a decrease in our cash flow from operating activities for the three months ended December 31, 2023 as compared to the same period in 2022. This decrease was primarily due to weakened margins on our primary products volatile commodity prices, and lower ethanol, distillers grains and corn oil production and sales because of the shutdown to install the high protein feed project for the three months ended December 31, 2023 as compared to the same period in 2022.

Cash Flow used for Investing Activities

We used less cash in investing activities for the three months ended December 31, 2023 as compared to the same period in 2022. This decrease was primarily the result of allowing our investments in U.S. treasury bonds to mature without renewal in preparation for the purchase by our subsidiary of the plant in Colwich, Kansas during the three months ended December 31, 2023 as compared with the same period in 2022.

Cash Flow used for Financing Activities

We used more cash for financing activities for the three months ended December 31, 2023 as compared to the same period in 2022. This increase was primarily because we did not borrow on our loan facility for the high protein project during the three months ended December 31, 2023 whereas we borrowed for an installment due on that project in the same period in 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, and assignment of material contracts. On January 31, 2024, the Company and Cardinal Colwich amended the loan agreement. The primary purpose of the amendment was to provide additional financing to Cardinal Colwich to fund a portion of the funds needed to complete the purchase of an ethanol plant in Colwich, Kansas, permit Cardinal Ethanol to use funds from the Revolving Credit Loan to support Cardinal Colwich's working capital needs and capital expenditures and to allow the Company to request an additional $10,000,000 of maximum available credit on the Revolving Credit Loan. Please refer to Item 1 - Financial Statements, Note 7 - Bank Financing for additional details.

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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 $39,000,000 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 8.45% at December 31, 2023 and September 30, 2023. We will be required to make monthly interest payments on the Declining Loan during the draw period. The principal balance of the Declining Loan was expected to be converted to term debt on or before May 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 borrowings outstanding of approximately $30,569,000 on the Declining Loan at December 31, 2023 and September 30, 2023.

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 8.25% at December 31, 2023 and September 30, 2023. There were no borrowings outstanding at December 31, 2023 and September 30, 2023. The Revolving Credit Loan was set to mature on February 28, 2024. The amendment provides that Cardinal Ethanol may request a $10,000,000 increase in the maximum commitment under the Revolving Credit Loan, subject to approval of the lender, and may use funds from the Revolving Credit Loan to support Cardinal Colwich's working capital needs and capital expenditures. The borrowing base calculation used to determine the amount available under the Revolving Credit Loan has also been amended to include Cardinal Colwich's corn, ethanol, dried distillers grain, corn oil and soybean inventories, eligible accounts receivable and commodity trading account excess margin funds. The amendment extends the termination date of the Revolving Credit Loan to February 28, 2025.

Term Loan

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 $6,000,000. 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.

The amendment modifies these covenants to provide for a consolidated minimum working capital requirement of $25,000,000, and a capital expenditures covenant that allows Cardinal Ethanol and Cardinal Colwich $10,000,000, in the aggregate, of expenditures per year without prior approval. There is also a requirement to maintain a minimum consolidated fixed charge coverage ratio of no less than 1.15:1.0 measured quarterly. A consolidated debt service charge coverage ratio of

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no less than 1.25:1.0 in lieu of the fixed charge coverage ratio will apply for any reporting period that consolidated working capital is equal to or more than $35,000,000.

We are complying with our financial covenants and the other terms of our loan agreements at December 31, 2023. 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.

Capital Improvements

We are planning various capital projects scheduled for the 2024 fiscal year in order to make certain improvements to the ethanol plant and maintain the facility. These improvements include updates to the grain probe and scale system, an additional cooling tower pump, drainage work, and other small miscellaneous projects which are expected to cost approximately $3,500,000 and be funded from operations and our current credit facilities.

We also engaged ICM, Inc. to install a system to produce high protein feed which is currently expected to cost approximately $50,000,000, including recent change orders, and be funded from operations 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. Installation of the system commenced during the fourth quarter of our 2022 fiscal year. This project was placed into service during December 2023. We are currently making adjustments to the equipment to optimize production to meet guarantees and specifications within the contract.

CCS Project

We engaged with an unrelated third party 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 performed an initial study and assessment of the technical and economic feasibility of the CCS Project and optimal commercial structure.

On January 16, 2023, Cardinal One Carbon Holdings, LLC, our wholly owned subsidiary, entered into a Partnership Agreement (the "LPA") with Vault CCS Holdings LP pursuant to which Cardinal One Carbon Holdings, LLC and Vault CCS Holdings LP formed a joint venture operating under the name of One Carbon Partnership Holdings LP (the "Limited Partnership") to pursue the CCS Project. Cardinal One Carbon Holdings, LLC owns a 50% limited partnership interest in the Limited Partnership. The LPA contemplates that Cardinal One Carbon Holdings, LLC and Vault CCS Holdings LP will make capital contributions to fund the Project and receive distributions in accordance with their respective ownership interests. As of December 31, 2023, Cardinal One Carbon Holdings, LLC has invested approximately $7,725,000 into the CCS project. It is currently expected that the CCS Project will require Cardinal One Carbon Holdings, LLC to invest up to $18,000,000 to reach commercial operations.

In addition, Cardinal One Carbon Holdings, LLC and Vault CCS Holdings LP have formed One Carbon Partnership GP LLC (the "GP") to serve as the general partner of the Limited Partnership. Cardinal One Carbon Holdings, LLC and Vault CCS Holdings LP each own 50% of the GP and each has the right to appoint three directors to the board of directors of the GP. Such directors may only be removed or replaced by the member that appointed them. Actions taken by the board of directors must be approved by a majority of the directors. Vault CCS Holdings LP or its affiliate will be responsible for management of construction of the Project and day-to-day operations. Certain material actions require approval by the board of directors of the GP.

We have taken certain steps towards implementing the CCS Project including filing the application for the necessary permitting and acquiring rights from landowners that will be needed in order to complete the CCS Project. In addition, we have

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granted rights to the joint venture including a surface easement and a lease of pore space below the surface of our property for use in sequestration if the CCS Project is successful. We have also ordered some of the equipment that will be needed for the Project. However, the CCS Project is still in its early stages and is subject to many variables that could have a material effect on its feasibility and the parties' ability to complete the CCS Project. Please refer to Item 1 - Financial Statements - Note 12 - Equity Method Investments for more information.

Asset Purchase Agreement

On October 23, 2023, Cardinal Colwich entered into an Asset Purchase Agreement with Element, LLC ("Seller") by and through Creative Planning Business Alliance, LLC (the "Receiver") acting in its capacity as the court-appointed receiver (the "APA"). The APA provides for the purchase of substantially all of the assets of Seller used in connection with the production of ethanol, high protein distillers grains and corn oil as set forth in more detail in the APA (the "Purchased Assets") free and clear of any claims, restrictions, mortgages, security interest, demands, charges and encumbrances. The facility was constructed by ICM, Inc. with a name plate capacity to produce 70 million gallons of ethanol annually and is located in Colwich, Kansas. The cash purchase price for the Purchased Assets is $44,000,000. In addition, Cardinal Colwich will assume certain liabilities specified in the APA. On January 31, 2024, the purchase transaction was completed. The transaction was funded by a $22,000,000 loan from Cardinal Ethanol's primary lender and the remaining $22,000,000 was funded by operations. Additionally, Cardinal Colwich paid approximately $1,025,000 in additional fees, expenditures to cure liabilities associated with assumed contracts, and to fund the purchase of necessary equipment owned by third parties. These amounts came from cash reserves.

Passthrough Entity Tax

We record Indiana passthrough entity tax in accordance with ASC 740 and have elected to account for the payments as an equity transaction through member distributions. At December 31, 2023, accrued distributions for passthrough entity tax was $700,000 and estimated distributions paid was $1,500,000 for the three months ended December 31, 2023.

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.

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 credit losses; 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, 2023. 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 three months ended December 31, 2023.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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

Interest Rate Risk

We are exposed to market risk from changes in interest rates. Exposure to interest rate risk results primarily from our Declining Loan and Revolving Credit Loan which bear variable interest rates. There were borrowings in the amount of approximately $30,569,000 outstanding on the Declining Loan and the applicable interest rate was 8.45% at December 31, 2023. There were no borrowings outstanding on the Revolving Credit Loan at December 31, 2023. The specifics of the Declining Loan and Revolving Credit Loan are discussed in greater detail above. If we were to experience a 10% adverse change in the applicable interest rate, the annual effect of such change would have on our statement of operations, based on the amount we had outstanding on our variable interest rate loans at December 31, 2023, would be approximately $260,000.

Commodity Price Risk

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

We seek to minimize the risks from fluctuations in the prices of raw material inputs, such as corn and natural gas, and finished products, such as ethanol and 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.

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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 months ended December 31, 2023 and 2022:


	Three Months Ended December 31, 2023		Three Months Ended December 31, 2022
Corn Derivative Contracts	$	2,685,316	$	2,145,852
Ethanol Derivative Contracts	(132,497)		2,411,665
Natural Gas Derivative Contracts	(540,659)		(776,052)
Soybean Oil Derivative Contracts	(8,820)		(16,927)
Soybean Derivative Contracts	(204,521)		(1,552,337)
Soybean Forward Purchase and Sales Contracts	405,506		550,043
Totals	$	2,204,325	$	2,762,244

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.

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 December 31, 2023 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 December 31, 2023. 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 December 31, 2023	Approximate Adverse Change to Income
Natural Gas	602,000	MMBTU	10%	$	150,000
Ethanol	138,000,000	Gallons	10%	$	20,976,000
Corn	41,908,000	Bushels	10%	$	18,911,000
DDGs	307,000	Tons	10%	$	5,368,000
Corn Oil	41,674,000	Pounds	10%	$	2,000,000
Soybeans - Sale	4,799,000	Bushels	10%	$	6,230,000
Soybeans - Purchase	4,617,000	Bushels	10%	$	5,863,000

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

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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 December 31, 2023. Based on this review and evaluation, these officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission; and to ensure that the information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our first quarter ended of our 2024 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

None.

Item 1A. Risk Factors

None.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

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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:	February 8, 2024	/s/ Jeffrey Painter
		Jeffrey Painter
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	February 8, 2024	/s/ William Dartt
		William Dartt
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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:	February 8, 2024	/s/ Jeffrey Painter
		Jeffrey Painter, Chief Executive Officer (President and Principal Executive Officer)

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;

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:	February 8, 2024	/s/ William Dartt
		William Dartt, Chief Financial Officer (Principal Financial Officer)

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 December 31, 2023, 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:			February 8, 2024

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 December 31, 2023, 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:			February 8, 2024

Cover - shares	3 Months Ended
Cover - shares	Dec. 31, 2023	Feb. 08, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
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	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

Consolidated Condensed Balance Sheets - USD ($)	Dec. 31, 2023	Sep. 30, 2023
Current Assets
Cash and cash equivalents	$ 89,906,473	$ 69,859,066
Restricted cash	13,362,078	13,425,343
Investments in available-for-sale debt securities	0	12,407,939
Trade accounts receivable	8,167,126	18,407,126
Miscellaneous receivables	575,681	478,069
Inventories	30,611,452	15,103,440
Prepaid and other current assets	5,020,278	298,635
Total current assets	148,704,575	130,398,907
Property, Plant, and Equipment, Net	95,312,667	92,323,559
Other Assets
Operating lease right of use asset, net	9,167,780	3,012,582
Investments	8,569,474	7,033,199
Total other assets	17,737,254	10,045,781
Total Assets	261,754,496	232,768,247
Current Liabilities
Advances from customer	3,000,000	0
Due to broker	1,058,324	1,232,522
Accounts payable	8,380,795	3,171,886
Accounts payable - grain	27,283,995	11,005,387
Accrued expenses	3,901,294	4,695,515
Operating lease liability current	3,237,081	2,611,799
Current maturities of long-term debt	1,980,218	1,136,681
Total current liabilities	54,010,584	28,027,888
Long-Term Liabilities
Long-term debt, net of current maturities	28,588,740	29,432,277
Operating lease long-term liabilities	5,933,067	416,931
Liability for railcar rehabilitation costs	2,434,349	2,358,134
Other long-term liabilities	5,846	0
Total long-term liabilities	36,962,002	32,207,342
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
Accumulated other comprehensive loss	0	(10,671)
Retained earnings	99,869,697	101,631,475
Total members' equity	170,781,910	172,533,017
Total Liabilities and Members’ Equity	261,754,496	232,768,247
Futures and options derivatives
Current Assets
Derivatives	803,337	352,464
Current Liabilities
Derivatives	4,893,868	3,817,921
Forward purchase/sales derivatives
Current Assets
Derivatives	258,150	66,825
Current Liabilities
Derivatives	$ 275,009	$ 356,177

Consolidated Condensed Balance Sheets (Parenthetical) - shares	Dec. 31, 2023	Sep. 30, 2023
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

Consolidated Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Statement [Abstract]
Revenues	$ 69,111,595	$ 134,948,119
Cost of Goods Sold	63,588,559	117,009,175
Gross Profit	5,523,036	17,938,944
Operating Expenses	2,639,366	2,272,604
Operating Income	2,883,670	15,666,340
Other Income (Expense)
Interest income	1,200,510	421,732
Miscellaneous income (expense)	(1,250,433)	48,699
Loss on equity method investment	(113,725)	(231,106)
Total	(163,648)	239,325
Net Income	$ 2,720,022	$ 15,905,665
Weighted Average Units Outstanding - basic (in shares)	14,606	14,606
Weighted Average Units Outstanding - diluted (in shares)	14,606	14,606
Net Income Per Unit - basic (in dollars per shares)	$ 186	$ 1,089
Net Income Per Unit - diluted (in dollars per shares)	186	1,089
Distributions Per Unit (in dollars per shares)	$ 300	$ 500
Unrealized gain (loss) on available-for-sale debt securities	$ 10,671	$ (7,706)
Total comprehensive loss	10,671	(7,706)
Net Comprehensive Income	$ 2,730,693	$ 15,897,959

Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash Flows from Operating Activities
Net income	$ 2,720,022	$ 15,905,665
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	1,961,505	2,881,483
Change in fair value of commodity derivative instruments	352,581	351,460
Loss on disposal of asset	1,303,832	0
Earnings on available-for-sale debt securities	(81,390)	(48,794)
Non-cash lease expense	0	14,780
Loss from equity method investment	113,725	231,106
Change in operating assets and liabilities:
Trade accounts receivable	10,240,000	(3,754,322)
Miscellaneous receivables	(97,612)	496,436
Inventories	(15,508,012)	(12,893,018)
Prepaid and other current assets	(4,721,643)	(1,026,425)
Due to broker	(174,198)	180,419
Accounts payable	206,243	(926,821)
Accounts payable - grain	16,278,608	34,379,511
Accrued expenses	1,400,278	(606,738)
Liability for railcar rehabilitation costs	76,215	74,375
Advances from customers	3,000,000	0
Net cash provided by operating activities	17,070,154	35,259,117
Cash Flows from Investing Activities
Proceeds from maturities of availalable-for-sale debt securities	12,500,000	0
Payments for construction in progress	(2,054,212)	(8,468,015)
Purchases of investments in debt securities	0	(10,754,664)
Net cash provided by (used for) investing activities	8,795,788	(19,222,679)
Cash Flows from Financing Activities
Distributions paid	(5,881,800)	(7,303,000)
Proceeds from revolving credit loan	10,650,750	0
Payments on revolving credit loan	(10,650,750)	0
Proceeds from long-term debt	0	7,185,919
Net cash used for financing activities	(5,881,800)	(117,081)
Net Increase in Cash, Cash Equivalents, and Restricted Cash	19,984,142	15,919,357
Cash, Cash Equivalents, and Restricted Cash – Beginning of Period	83,284,409	63,239,614
Cash, Cash Equivalents, and Restricted Cash – End of Period	103,268,551	79,158,971
Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash and Cash Equivalents - Balance Sheet	89,906,473	68,622,409
Restricted Cash - Balance Sheet	13,362,078	10,536,562
Cash, Cash Equivalents, and Restricted Cash	103,268,551	79,158,971
Supplemental Cash Flow Information
Interest paid	655,655	131,741
Supplemental Disclosure of Non-cash Investing and Financing Activities
Construction in progress included in accrued expenses and accounts payable	5,053,021	5,720
Construction period interest capitalized in property, plant and equipment	663,291	225,014
Cardinal One Carbon Holding LLC
Cash Flows from Investing Activities
Investment in Cardinal One Carbon Holdings, LLC	$ (1,650,000)	$ 0

Consolidated Condensed Statements of Changes in Members' Equity (Unaudited) - USD ($)	Total	Member Contributions	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Sep. 30, 2022	$ 147,270,492	$ 70,912,213	$ 76,358,279	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	15,905,665		15,905,665
Member Distributions	(7,303,000)		(7,303,000)
Unrealized gain on available-for-sale debt securities	(7,706)			(7,706)
Ending balance at Dec. 31, 2022	155,865,451	70,912,213	84,960,944	(7,706)
Beginning balance at Sep. 30, 2023	172,533,017	70,912,213	101,631,475	(10,671)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	2,720,022		2,720,022
Member Distributions	(4,481,800)		(4,481,800)
Unrealized gain on available-for-sale debt securities	10,671			10,671
Ending balance at Dec. 31, 2023	$ 170,781,910	$ 70,912,213	$ 99,869,697	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Dec. 31, 2023
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated condensed financial statements (the "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, 2023, 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 and Subsidiaries (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 three months ended December 31, 2023 and 2022, the Company produced approximately 20,423,000 and 34,254,000 gallons of ethanol, respectively. In addition, the Company procures, transports, and sells grain commodities through grain operations. Basis of Accounting The Company prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the operations, assets and liabilities of the Company. In the opinion of the Company's management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying consolidated financial statements. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Cardinal Ethanol, LLC and its wholly owned subsidiaries, Cardinal Ethanol Export Sales, Inc., Cardinal One Carbon Holdings, LLC, and Cardinal Colwich, LLC (collectively, the Company). Cardinal Ethanol Export Sales, Inc. is an Interest Charge Domestic to International Sales Company ("IC-DISC") designed to take advantage of certain tax incentives for export sales to other countries. Cardinal One Carbon Holdings, LLC was formed to hold the partnership interest for the investigation and pursuit of carbon dioxide capture and sequestration. Cardinal Colwich, LLC was formed to purchase the assets of an ethanol plant in Colwich, Kansas. During the quarter, the Company made an initial down payment required by the asset purchase agreement for $3,250,000, which is recorded in prepaid and other current assets on the consolidated balance sheet. All inter-company balances and transactions have been eliminated in consolidation. On January 31, 2024, the purchase transaction was completed. The transaction was funded by a $22,000,000 loan from the Company's primary lender and the remaining $22,000,000 was funded by operations. Additionally, the Company paid approximately $1,025,000 in additional fees, expenditures to cure liabilities associated with contracts the Company was assuming and to fund the purchase of necessary equipment owned by third parties. These amounts came from the Company's cash reserves. The transaction will be reported as an asset purchase under regulation SX rule 11-01(d) as the plant was idled since April 2023. The prior owner is defunct, and the assets turned over to a receiver from whom the Company purchased them. The Company will establish its own producer base, customer base and employee base to establish this subsidiary as a business. 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 consolidated financial statements in accordance with U.S. GAAP. 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, valuation of inventories, the assumptions used in the analysis of the impairment of long lived assets, allowance for credit losses, 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, allowance for credit losses, 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 consolidated 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 Cash Equivalents The Company maintains its accounts primarily at three financial institutions. At times throughout the year the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash equivalents represent money market funds or short-term investments with original maturities of three months or less from the date of purchase, except for those amounts that are held in the investment portfolio for long-term investment. There were no cash equivalents at December 31, 2023. At September 30, 2023, cash equivalents were approximately $33,229,000 and consisted of investments in treasury bills. 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. Investments in Available-for-Sale Debt Securities The Company holds funds in short-term investments in debt securities, such as U.S. treasury bills or treasury notes. As some of the investments in debt securities have an original maturity date greater than three months, these investments are classified as available-for-sale. The Company holds these short-term investments until maturity or for sale in the event cash is needed. Unrealized gains and losses on the Company's investments classified as available-for-sale are recognized in other comprehensive income (loss) until realized. Investments in Held-to-Maturity Debt Securities The Company holds funds in short-term investments in debt securities, such as U.S. treasury bills or treasury notes. Some of the investments in debt securities have an original maturity date greater than three months and are being held until maturity in the hedge accounts as collateral for initial margin requirements, these investments are classified as held-to-maturity. The Company has the ability and intent to hold until maturity and the classification was determined at the time of purchase. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization of accretion of premiums and discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security using a straight-line method. At December 31, 2023, the Company did not have any held-to-maturity investments. 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. The Company maintains an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are included as a component of operating expenses in the consolidated statements of operations. The Company assesses collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, the Company considers historical collectibility based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions. At December 31, 2023 and September 30, 2023, the Company determined that an allowance for credit losses 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 December 31, 2023 and September 30, 2023. 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 is planning various capital projects scheduled for the 2024 fiscal year in order to make certain improvements to the ethanol plant and maintain the facility. These improvements include updates to the grain probe and scale system, an additional cooling tower pump, drainage work, and other small miscellaneous projects. The Company recently installed a high protein feed system, costing approximately $50,000,000, including recent change orders. The project was funded from operations and from our current credit facilities as amended. Installation of the system was completed during this quarter ended December 31, 2023. The system is operating and the Company and the manufacturer are testing and modifying the installation to meet guaranteed and optimal rates. This project was placed into service in December 2023. 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 three months ended December 31, 2023 and 2022. Investments Investments consist of the capital stock and patron equities of the Company's distillers grains marketer. The investment is 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 consolidated statements of operations. The Company has also created certain subsidiaries to achieve some of its varying business interests that are not directly related to ethanol production or trading of grain. One has been formed as a corporation, while the other has been formed as a limited liability company (LLC) to hold interests in affiliated companies for carbon capture and underground sequestration (CCS). Through its LLC, the company owns a fifty percent interest in a joint venture which is accounted for as an equity method investment as described in detail in Note 12 - Equity Method Investments. Passthrough Entity Tax The Company records Indiana passthrough entity tax in accordance with ASC 740 and has elected to account for the payments as an equity transaction through member distributions. At December 31, 2023, accrued distributions for Indiana passthrough entity tax was $700,000. The Company paid approximately $1,500,000 for 2023 taxes during the three months ended December 31, 2023. Economic Development Fund In September 2007, the Company entered into a development agreement with Randolph County Redevelopment Commission (“the Commission”) to promote economic development in the area. Under the terms of this agreement, beginning in January 2008 through December 2028, the money paid towards property tax 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. The Company does not have title to or control over the funds in the acquisition account. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects 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 the consolidated 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 per Unit Basic net income per unit is computed by dividing net income by the weighted average number of members' units outstanding during the period. Diluted net income per unit is computed by dividing net income by the weighted average number of members' units and members' unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company's basic and diluted net income per unit are the same.

REVENUE

3 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

Revenue Recognition

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 months ended December 31, 2023 and 2022:

Three Months Ended December 31, 2023 (Unaudited)


	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	42,220,110	$	—	$	42,220,110
Distillers Grains	8,742,453		—		8,742,453
Corn Oil	3,297,205		—		3,297,205
Carbon Dioxide	72,316		—		72,316


Total revenues from contracts with customers	54,332,084		—		54,332,084

Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and Other Grains	—		14,779,511		14,779,511
Total revenues from contracts accounted for as derivatives	—		14,779,511		14,779,511
Total Revenues	$	54,332,084	$	14,779,511	$	69,111,595

Three Months Ended December 31, 2022 (Unaudited)


	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	86,311,246	$	—	$	86,311,246
Distillers Grains	15,363,951		—		15,363,951
Corn Oil	8,029,640		—		8,029,640
Carbon Dioxide	121,094		—		121,094


Total revenues from contracts with customers	109,825,931		—		109,825,931

Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and Other Grains	—		25,122,188		25,122,188
Total revenues from contracts accounted for as derivatives	—		25,122,188		25,122,188
Total Revenues	$	109,825,931	$	25,122,188	$	134,948,119

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

Contract Liabilities

CONCENTRATIONS	3 Months Ended
CONCENTRATIONS	Dec. 31, 2023
Risks and Uncertainties [Abstract]
CONCENTRATIONS	CONCENTRATIONSTwo major customers accounted for approximately 93% and 86% of the outstanding accounts receivable balance at December 31, 2023 and September 30, 2023, respectively. These same two customers accounted for approximately 74% and 75% of revenue for the three months ended December 31, 2023 and December 31, 2022, respectively.

INVENTORIES

3 Months Ended

Dec. 31, 2023

Inventory Disclosure [Abstract]

INVENTORIES

Inventories consist of the following as of:


	December 31, 2023 (Unaudited)		September 30, 2023
Ethanol Division:
Raw materials	$	11,659,174	$	3,517,682
Work in progress	1,695,470		1,848,663
Finished goods	3,288,813		4,638,966
Spare parts	5,192,585		4,789,021
Ethanol Division Subtotal	$	21,836,042	$	14,794,332
Trading Division:
Grain inventory	$	8,775,410	$	309,108
Trading Division Subtotal	8,775,410		309,108
Total Inventories	$	30,611,452	$	15,103,440

The Company had a net realizable value write-down of $1,152,000 and $872,000 for ethanol inventory for the three months ended December 31, 2023 and 2022, respectively.

DERIVATIVE INSTRUMENTS

3 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

Commodity Contracts

The following table provides balance sheet details regarding the Company's derivative financial instruments at December 31, 2023:


Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures and Options Derivatives	$	—	$	4,540,957
Corn Futures and Options Contracts	Futures and Options Derivatives	$	668,950	$	—
Soybean Oil Futures and Options Contracts	Futures and Options Derivatives	$	—	$	30,354
Natural Gas Futures and Options Contracts	Futures and Options Derivatives	$	—	$	322,557
Soybean Futures and Options Contracts	Futures and Options Derivatives	$	134,387	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	258,150	$	275,009

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2023:


Instrument	Balance Sheet Location	Assets		Liabilities

Ethanol Futures and Options Contracts	Futures and Options Derivatives	$	—	$	3,513,693
Corn Futures and Options Contracts	Futures and Options Derivatives	$	—	$	29,108
Natural Gas Futures and Options Contracts	Futures and Options Derivatives	$	—	$	253,586
Soybean Oil Futures and Options Contracts	Futures and Options Derivatives	$	—	$	21,534
Soybean Futures and Options Contracts	Futures and Options Derivatives	$	352,464	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	66,825	$	356,177

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 December 31, 2023		Three Months Ended December 31, 2022
Corn Futures and Options Contracts	Cost of Goods Sold	$	2,685,316	$	2,145,852
Ethanol Futures and Options Contracts	Revenues	(132,497)		2,411,665
Natural Gas Futures and Options Contracts	Cost of Goods Sold	(540,659)		(776,052)
Soybean Oil Futures and Options Contracts	Cost of Goods Sold	(8,820)		(16,927)
Soybean Futures and Options Contracts	Cost of Goods Sold	(204,521)		(1,552,337)
Soybean Forward Purchase and Sales Contracts	Cost of Goods Sold	405,506		550,043
Totals		$	2,204,325	$	2,762,244

FAIR VALUE MEASUREMENTS

3 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of December 31, 2023:


Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	668,950	$	668,950	$	668,950	$	—	$	—
Ethanol Futures and Options Contracts	$	(4,540,957)	$	(4,540,957)	$	(4,540,957)	$	—	$	—
Soybean Oil Futures and Options Contracts	$	(30,354)	$	(30,354)	$	(30,354)	$	—	$	—
Natural Gas Futures and Options Contracts	$	(322,557)	$	(322,557)	(387,281)		$	64,724	$	—
Soybean Futures and Options Contracts	$	134,387	$	134,387	$	134,387	$	—	$	—
Soybean Forward Purchase Contracts	$	(16,859)	$	(16,859)	$	—	$	(16,859)	$	—
Soybean Inventory	$	8,775,479	$	8,775,479	$	—	$	8,775,479	$	—
Accounts Payable	$	(12,354,031)	$	(12,354,031)	$	—	$	(12,354,031)	$	—

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2023:


Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	(29,108)	$	(29,108)	$	(60,637)	$	31,529	$	—
Ethanol Futures and Options Contracts	$	(3,513,693)	$	(3,513,693)	$	(3,513,693)	$	—	$	—
Natural Gas Futures and Options Contracts	$	(253,586)	$	(253,586)	$	(39,300)	$	(214,286)	$	—
Soybean Oil Futures and Options Contracts	$	(21,534)	$	(21,534)	$	(21,534)	$	—	$	—
Soybean Futures and Options Contracts	$	352,464	$	352,464	$	352,464	$	—	$	—
Soybean Forward Purchase Contracts	$	(289,352)	$	(289,352)	$	—	$	(289,352)	$	—
Soybean Inventory	$	309,108	$	309,108	$	—	$	309,108	$	—
Accounts Payable	$	(3,908,868)	$	(3,908,868)	$	—	$	(3,908,868)	$	—
Treasury Bills (classified as cash equivalents)	$	12,407,939	$	12,407,939	$	12,407,939	$	—	$	—

BANK FINANCING

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

BANK FINANCING

Declining Loan

Revolving Credit Loan

Term Loan

The estimated maturities of long-term debt at December 31, 2023 are as follows:


January 1, 2024 - December 31, 2024	$	1,980,218
January 1, 2025 - December 31, 2025	3,553,260
January 1, 2026 - December 31, 2026	3,869,920
January 1, 2027 - December 31, 2027	4,214,803
January 1, 2028 - December 31, 2028	4,586,362
Thereafter	12,364,395
Total long-term debt	$	30,568,958

LEASES

3 Months Ended

Dec. 31, 2023

Leases [Abstract]

LEASES

The following table summarizes the remaining maturities of the Company’s operating lease liabilities as of December 31, 2023:


For the Fiscal Year Ending September 30,
2024	$	3,833,390
2025	1,772,100
2026	1,772,100
2027	1,772,100
2028	1,624,425
Totals	10,774,115
Amount representing interest	(1,603,967)
Lease liabilities	$	9,170,148

COMMITMENTS AND CONTINGENCIES	3 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Marketing Agreement The Company entered into an agreement with an unrelated company for the purpose of marketing and selling all the distillers grains the Company is expected to produce. The buyer agrees to remit a fixed percentage rate of the actual selling price to the Company for distillers dried grain solubles and wet distiller grains. The agreement may be terminated by either party at its unqualified option, by providing written notice of not less than 120 days to the other party. The Company entered into an agreement with an unrelated company to sell all of the ethanol the Company produces at the plant. The Company agrees to pay a commission of a fixed percent of the net purchase price for marketing and distribution. In July 2009, the initial term of the agreement was extended to eight years and the commission increased in exchange for reducing the payment terms from 14 days to 7 days after shipment. In November 2012, the Company amended this agreement to extend the initial term of the agreement to eleven years, expiring in 2019, in exchange for capping the commissions at $1,750,000 per year. Effective November 18, 2018, the two companies amended the marketing agreement. The amendment added a renewal term to the initial agreement that extended the contract until November 30, 2022. It provided for the payment of the commission to Murex to be calculated on each net gallon of ethanol taken under the agreement. It modified how the cost of rail car shipments are charged to the Company, moving from a per gallon fee to requiring that the marketer provide a minimum 225 rail cars to the Company on a per car per month lease basis as described in Note 8. Finally, it reduced the delivery to payment period. On September 14, 2022, the Company executed an amendment to extend the term until December 31, 2024, subject to automatic renewals thereafter for one-year periods unless either party gives notice of non-renewal at least 90 days prior to the end of the current term. The agreement may also be terminated due to the insolvency or intentional misconduct of either party or upon the default of one of the parties as set forth in the agreement. In addition, the amendment added a provision that allows the Company to terminate the agreement on 90 days prior written notice upon a "Material Change in Control". Upon termination of the agreement for any reason, the Company may be obligated to continue to deliver ethanol for a period of time to cover certain contractual commitments for which the Company gave prior written approval. The amendment also provides for certain adjustments to the purchase price for sales made to the marketer for its own account or for sales of exported ethanol. If this adjusted price can not be finalized at time of payment, the parties may agree upon a provisional price which shall be trued up later. The amendment was effective on December 1, 2022. Rail Car Rehabilitation Costs The Company leased 180 hopper rail cars under a multi-year agreement which ended in November 2023. The Company executed a renewal to lease 179 hopper rail cars under a multi-year agreement effective December 2023 and ending in November 2028. 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 December 31, 2023, to be approximately $2,434,000. During the three months ended December 31, 2023, the Company has recorded a corresponding expense in cost of goods sold of approximately $89,000. 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 was expected to cost approximately $50,000,000, including change orders, and be funded from operations and from our current credit facilities as amended. This project was placed into service in December 2023 and is currently operating successfully. ICM and the Company are in the process of making adjustments to optimize production to meet guarantees and specifications within the contract. There was no high protein product sold during the period ended December 31, 2023. Asset Purchase Agreement On October 23, 2023, Cardinal Colwich, LLC ("Cardinal Colwich"), a wholly owned subsidiary of the Company, entered into an Asset Purchase Agreement (the "APA") with Element, LLC ("Seller") by and through Creative Planning Business Alliance, LLC (the "Receiver") acting in its capacity as the court-appointed receiver. The APA provides for the purchase of substantially all of the assets of Seller used in connection with the production of ethanol, high protein distillers grains and corn oil as set forth in more detail in the APA (the "Purchased Assets") free and clear of any claims, restrictions, mortgages, security interest, demands, charges and encumbrances. The facility was constructed by ICM, Inc. with a name plate capacity to produce 70 million gallons of ethanol annually and is located in Colwich, Kansas. The cash purchase price for the Purchased Assets is $44,000,000. In addition, Cardinal Colwich will assume certain liabilities specified in the APA. On January 31, 2024, the transaction was completed. The transaction was funded by a $22,000,000 loan from the Company's primary lender and the remaining $22,000,000 was funded by operations. Additionally, the Company paid approximately $1,025,000 in additional fees, expenditures to cure liabilities associated with contracts the Company was assuming, and to fund the purchase of necessary equipment owned by third parties. These amounts came from the Company's cash reserves. In connection with the acquisition, Cardinal Colwich assumed certain material contracts. On January 31, 2024, Cardinal Colwich assumed a license agreement which provides a revocable, royalty-free, non-assignable, non-exclusive license to use certain proprietary technologies and information in connection with the ownership, operation and maintenance of the facility in Kansas. The license agreement may be terminated if Cardinal Colwich uses the proprietary property for any unauthorized purpose or in violation of the license agreement, makes an unauthorized disclosure of the proprietary property or breaches the license agreement and fails to cure as provided. On January 31, 2024, Cardinal Colwich also assumed a water sharing agreement to permit it to use water for operations at the facility in Kansas from a water right owned by an unrelated party subject to certain restrictions on rates of diversion and consumption and cumulative amounts used. Cardinal Colwich will be required pay certain costs, expenses, fees, assessments and charges and pay an annual fee for the use of the water. The water sharing agreement as amended, provides that it can be terminated by the owner of the water right after an initial period upon written notice to Cardinal Colwich of a specified time before such termination goes into effect. In addition, if the owner of the water right needs the water for its operations, it can also recall the water or reduce the amounts Cardinal Colwich can use after an initial period upon written notice to Cardinal Colwich of a specified time before such recall or reduction goes into effect. The water sharing agreement may also be terminated upon Cardinal Colwich's breach of, and failure to cure, as provided therein.

RISKS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS	3 Months Ended
	Dec. 31, 2023
Risks and Uncertainties [Abstract]
RISKS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS	RISKS AND 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 three months ended December 31, 2023, ethanol sales averaged approximately 61% of total revenues and corn costs averaged 57% 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 during the quarter were good, but not as robust as in the past two years. Good corn crops contributed to lower input costs. The high margin environment that pervaded in the industry leading up to the quarter provided incentive to ethanol refiners to produce at high levels, reducing ethanol prices. These contributed to somewhat lower margins in the quarter. Natural gas prices have been volatile as well during the quarter and to the date of this report. 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.

BUSINESS SEGMENTS

3 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

BUSINESS SEGMENTS

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
	December 31, 2023		December 31, 2022
Revenue:	(unaudited)		(unaudited)
Ethanol division	$	54,332,084	$	109,825,931
Trading division	14,779,511		25,122,188
Total Revenue	$	69,111,595	$	134,948,119

	Three Months Ended
	December 31, 2023		December 31, 2022
Gross Profit:	(unaudited)		(unaudited)
Ethanol division	$	4,746,308	$	17,571,180
Trading division	776,728		367,764
Total Gross Profit	$	5,523,036	$	17,938,944

	Three Months Ended
	December 31, 2023		December 31, 2022
Operating Income (Loss):	(unaudited)		(unaudited)
Ethanol division	$	2,424,186	$	15,615,819
Trading division	459,484		50,521
Total Operating Income	$	2,883,670	$	15,666,340


	December 31, 2023		September 30, 2023
Grain Inventories:	(unaudited)
Ethanol division	$	11,659,174	$	3,517,682
Trading division	8,775,410		309,108
Total Grain Inventories	$	20,434,584	$	3,826,790

	December 31, 2023		September 30, 2023
Total Assets:	(unaudited)
Ethanol division	$	249,082,505	$	234,913,852
Trading division	12,671,991		(2,145,605)
Total Assets	$	261,754,496	$	232,768,247

EQUITY METHOD INVESTMENTS	3 Months Ended
EQUITY METHOD INVESTMENTS	Dec. 31, 2023
Equity Method Investments and Joint Ventures [Abstract]
EQUITY METHOD INVESTMENTS	EQUITY METHOD INVESTMENTS The Company, through its wholly owned subsidiary, Cardinal One Carbon Holdings, LLC, owns a fifty percent interest in a limited partnership. That partnership was formed as a joint venture with another unrelated investor to investigate and pursue carbon dioxide capture and underground sequestration. The Company accounts for this investment using joint venture accounting and, therefore, under the equity method. Cardinal One Carbon Holdings, LLC was formed on June 22, 2022 to hold the partnership interest in the limited partnership and began its administrative operations on September 1, 2022. The Company's policy related to investments in both common stock and in-substance common stock that give the Company the ability to exercise significant influence over the operating and financial polices of an entity in which it invests even though the Company holds 50% or less of the common stock or in-substance common stock (or both common and in-substance common stock) is to account for such investment under the equity method. The Company considers its financial position and results of operations in evaluating the extent of disclosures of the financial position and results of operations of an entity in which the Company invests. As the Company owns a fifty percent interest in the limited partnership, an investment in affiliate of approximately $7,187,000 and $5,651,000 was reflected on the balance sheet as of December 31, 2023, and September 30, 2023, respectively. Losses on equity method investment of approximately $114,000 was reflected on the statement of operations for the three months ended December 31, 2023.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2023
Accounting Policies [Abstract]
Basis of Accounting	The accompanying unaudited consolidated condensed financial statements (the "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, 2023, contained in the Company's annual report on Form 10-K. Basis of Accounting The Company prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the operations, assets and liabilities of the Company. In the opinion of the Company's management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to fairly present the accompanying consolidated financial statements.
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include the accounts of Cardinal Ethanol, LLC and its wholly owned subsidiaries, Cardinal Ethanol Export Sales, Inc., Cardinal One Carbon Holdings, LLC, and Cardinal Colwich, LLC (collectively, the Company). Cardinal Ethanol Export Sales, Inc. is an Interest Charge Domestic to International Sales Company ("IC-DISC") designed to take advantage of certain tax incentives for export sales to other countries. Cardinal One Carbon Holdings, LLC was formed to hold the partnership interest for the investigation and pursuit of carbon dioxide capture and sequestration. Cardinal Colwich, LLC was formed to purchase the assets of an ethanol plant in Colwich, Kansas. During the quarter, the Company made an initial down payment required by the asset purchase agreement for $3,250,000, which is recorded in prepaid and other current assets on the consolidated balance sheet. All inter-company balances and transactions have been eliminated in consolidation. On January 31, 2024, the purchase transaction was completed. The transaction was funded by a $22,000,000 loan from the Company's primary lender and the remaining $22,000,000 was funded by operations. Additionally, the Company paid approximately $1,025,000 in additional fees, expenditures to cure liabilities associated with contracts the Company was assuming and to fund the purchase of necessary equipment owned by third parties. These amounts came from the Company's cash reserves. The transaction will be reported as an asset purchase under regulation SX rule 11-01(d) as the plant was idled since April 2023. The prior owner is defunct, and the assets turned over to a receiver from whom the Company purchased them. The Company will establish its own producer base, customer base and employee base to establish this subsidiary as a business.
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 consolidated financial statements in accordance with U.S. GAAP. 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, valuation of inventories, the assumptions used in the analysis of the impairment of long lived assets, allowance for credit losses, 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, allowance for credit losses, 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 consolidated 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 Cash Equivalents	Cash and Cash Equivalents The Company maintains its accounts primarily at three financial institutions. At times throughout the year the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. Cash equivalents represent money market funds or short-term investments with original maturities of three months or less from the date of purchase, except for those amounts that are held in the investment portfolio for long-term investment. There were no cash equivalents at December 31, 2023. At September 30, 2023, cash equivalents were approximately $33,229,000 and consisted of investments in treasury bills. 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.
Investments in Available-for-Sale Debt Securities	Investments in Available-for-Sale Debt Securities The Company holds funds in short-term investments in debt securities, such as U.S. treasury bills or treasury notes. As some of the investments in debt securities have an original maturity date greater than three months, these investments are classified as available-for-sale. The Company holds these short-term investments until maturity or for sale in the event cash is needed. Unrealized gains and losses on the Company's investments classified as available-for-sale are recognized in other comprehensive income (loss) until realized. Investments in Held-to-Maturity Debt Securities The Company holds funds in short-term investments in debt securities, such as U.S. treasury bills or treasury notes. Some of the investments in debt securities have an original maturity date greater than three months and are being held until maturity in the hedge accounts as collateral for initial margin requirements, these investments are classified as held-to-maturity. The Company has the ability and intent to hold until maturity and the classification was determined at the time of purchase. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization of accretion of premiums and discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security using a straight-line method. At December 31, 2023, the Company did not have any held-to-maturity investments. Investments Investments consist of the capital stock and patron equities of the Company's distillers grains marketer. The investment is 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 consolidated statements of operations. The Company has also created certain subsidiaries to achieve some of its varying business interests that are not directly related to ethanol production or trading of grain. One has been formed as a corporation, while the other has been formed as a limited liability company (LLC) to hold interests in affiliated companies for carbon capture and underground sequestration (CCS). Through its LLC, the company owns a fifty percent interest in a joint venture which is accounted for as an equity method investment as described in detail in Note 12 - Equity Method Investments.
Trade Accounts Receivable	Trade Accounts Receivable Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral. The Company maintains an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are included as a component of operating expenses in the consolidated statements of operations. The Company assesses collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectibility issues. In determining the amount of the allowance for credit losses, the Company considers historical collectibility based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions. At December 31, 2023 and September 30, 2023, the Company determined that an allowance for credit losses was not necessary.
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 December 31, 2023 and September 30, 2023. 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 Property, plant, and equipment are stated at cost. Depreciation is provided over estimated useful lives by use of the straight-line depreciation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in progress expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service.
Long-Lived Assets	Long-Lived Assets The Company reviews its long-lived assets, such as property, plant and equipment and financing costs, subject to depreciation and amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.
Passthrough Entity Tax	Passthrough Entity Tax The Company records Indiana passthrough entity tax in accordance with ASC 740 and has elected to account for the payments as an equity transaction through member distributions. At December 31, 2023, accrued distributions for Indiana passthrough entity tax was $700,000. The Company paid approximately $1,500,000 for 2023 taxes during the three months ended December 31, 2023.
Economic Development Fund	Economic Development Fund In September 2007, the Company entered into a development agreement with Randolph County Redevelopment Commission (“the Commission”) to promote economic development in the area. Under the terms of this agreement, beginning in January 2008 through December 2028, the money paid towards property tax 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. The Company does not have title to or control over the funds in the acquisition account.
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 the Company expects 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. 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. The Company recorded advances from customers for $3,000,000 at December 31, 2023. There were no advances from customers as of September 30, 2023.
Operating Expenses	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	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 the consolidated 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 per Unit	Net Income per Unit Basic net income per unit is computed by dividing net income by the weighted average number of members' units outstanding during the period. Diluted net income per unit is computed by dividing net income by the weighted average number of members' units and members' unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company's basic and diluted net income per unit are the same.

REVENUE (Tables)

3 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following tables disaggregate revenue by major source for the three months ended December 31, 2023 and 2022:

Three Months Ended December 31, 2023 (Unaudited)


	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	42,220,110	$	—	$	42,220,110
Distillers Grains	8,742,453		—		8,742,453
Corn Oil	3,297,205		—		3,297,205
Carbon Dioxide	72,316		—		72,316


Total revenues from contracts with customers	54,332,084		—		54,332,084

Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and Other Grains	—		14,779,511		14,779,511
Total revenues from contracts accounted for as derivatives	—		14,779,511		14,779,511
Total Revenues	$	54,332,084	$	14,779,511	$	69,111,595

Three Months Ended December 31, 2022 (Unaudited)


	Ethanol Division		Trading Division		Total
Revenues from contracts with customers under ASC Topic 606
Ethanol	$	86,311,246	$	—	$	86,311,246
Distillers Grains	15,363,951		—		15,363,951
Corn Oil	8,029,640		—		8,029,640
Carbon Dioxide	121,094		—		121,094


Total revenues from contracts with customers	109,825,931		—		109,825,931

Revenues from contracts accounted for as derivatives under ASC Topic 815 (1)
Soybeans and Other Grains	—		25,122,188		25,122,188
Total revenues from contracts accounted for as derivatives	—		25,122,188		25,122,188
Total Revenues	$	109,825,931	$	25,122,188	$	134,948,119

INVENTORIES (Tables)

3 Months Ended

Dec. 31, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories consist of the following as of:


	December 31, 2023 (Unaudited)		September 30, 2023
Ethanol Division:
Raw materials	$	11,659,174	$	3,517,682
Work in progress	1,695,470		1,848,663
Finished goods	3,288,813		4,638,966
Spare parts	5,192,585		4,789,021
Ethanol Division Subtotal	$	21,836,042	$	14,794,332
Trading Division:
Grain inventory	$	8,775,410	$	309,108
Trading Division Subtotal	8,775,410		309,108
Total Inventories	$	30,611,452	$	15,103,440

DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Dec. 31, 2023

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 December 31, 2023:


Instrument	Balance Sheet Location	Assets		Liabilities
Ethanol Futures and Options Contracts	Futures and Options Derivatives	$	—	$	4,540,957
Corn Futures and Options Contracts	Futures and Options Derivatives	$	668,950	$	—
Soybean Oil Futures and Options Contracts	Futures and Options Derivatives	$	—	$	30,354
Natural Gas Futures and Options Contracts	Futures and Options Derivatives	$	—	$	322,557
Soybean Futures and Options Contracts	Futures and Options Derivatives	$	134,387	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	258,150	$	275,009

The following table provides balance sheet details regarding the Company's derivative financial instruments at September 30, 2023:


Instrument	Balance Sheet Location	Assets		Liabilities

Ethanol Futures and Options Contracts	Futures and Options Derivatives	$	—	$	3,513,693
Corn Futures and Options Contracts	Futures and Options Derivatives	$	—	$	29,108
Natural Gas Futures and Options Contracts	Futures and Options Derivatives	$	—	$	253,586
Soybean Oil Futures and Options Contracts	Futures and Options Derivatives	$	—	$	21,534
Soybean Futures and Options Contracts	Futures and Options Derivatives	$	352,464	$	—
Soybean Forward Purchase and Sales Contracts	Forward Purchase/Sales Derivatives	$	66,825	$	356,177

Schedule of 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 December 31, 2023		Three Months Ended December 31, 2022
Corn Futures and Options Contracts	Cost of Goods Sold	$	2,685,316	$	2,145,852
Ethanol Futures and Options Contracts	Revenues	(132,497)		2,411,665
Natural Gas Futures and Options Contracts	Cost of Goods Sold	(540,659)		(776,052)
Soybean Oil Futures and Options Contracts	Cost of Goods Sold	(8,820)		(16,927)
Soybean Futures and Options Contracts	Cost of Goods Sold	(204,521)		(1,552,337)
Soybean Forward Purchase and Sales Contracts	Cost of Goods Sold	405,506		550,043
Totals		$	2,204,325	$	2,762,244

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Dec. 31, 2023

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 December 31, 2023:


Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	668,950	$	668,950	$	668,950	$	—	$	—
Ethanol Futures and Options Contracts	$	(4,540,957)	$	(4,540,957)	$	(4,540,957)	$	—	$	—
Soybean Oil Futures and Options Contracts	$	(30,354)	$	(30,354)	$	(30,354)	$	—	$	—
Natural Gas Futures and Options Contracts	$	(322,557)	$	(322,557)	(387,281)		$	64,724	$	—
Soybean Futures and Options Contracts	$	134,387	$	134,387	$	134,387	$	—	$	—
Soybean Forward Purchase Contracts	$	(16,859)	$	(16,859)	$	—	$	(16,859)	$	—
Soybean Inventory	$	8,775,479	$	8,775,479	$	—	$	8,775,479	$	—
Accounts Payable	$	(12,354,031)	$	(12,354,031)	$	—	$	(12,354,031)	$	—

The following table provides information on those assets and liabilities measured at fair value on a recurring basis as of September 30, 2023:


Instruments	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Corn Futures and Options Contracts	$	(29,108)	$	(29,108)	$	(60,637)	$	31,529	$	—
Ethanol Futures and Options Contracts	$	(3,513,693)	$	(3,513,693)	$	(3,513,693)	$	—	$	—
Natural Gas Futures and Options Contracts	$	(253,586)	$	(253,586)	$	(39,300)	$	(214,286)	$	—
Soybean Oil Futures and Options Contracts	$	(21,534)	$	(21,534)	$	(21,534)	$	—	$	—
Soybean Futures and Options Contracts	$	352,464	$	352,464	$	352,464	$	—	$	—
Soybean Forward Purchase Contracts	$	(289,352)	$	(289,352)	$	—	$	(289,352)	$	—
Soybean Inventory	$	309,108	$	309,108	$	—	$	309,108	$	—
Accounts Payable	$	(3,908,868)	$	(3,908,868)	$	—	$	(3,908,868)	$	—
Treasury Bills (classified as cash equivalents)	$	12,407,939	$	12,407,939	$	12,407,939	$	—	$	—

BANK FINANCING (Tables)

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Maturities of Long-Term Debt

The estimated maturities of long-term debt at December 31, 2023 are as follows:


January 1, 2024 - December 31, 2024	$	1,980,218
January 1, 2025 - December 31, 2025	3,553,260
January 1, 2026 - December 31, 2026	3,869,920
January 1, 2027 - December 31, 2027	4,214,803
January 1, 2028 - December 31, 2028	4,586,362
Thereafter	12,364,395
Total long-term debt	$	30,568,958

LEASES (Tables)

3 Months Ended

Dec. 31, 2023

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 December 31, 2023:


For the Fiscal Year Ending September 30,
2024	$	3,833,390
2025	1,772,100
2026	1,772,100
2027	1,772,100
2028	1,624,425
Totals	10,774,115
Amount representing interest	(1,603,967)
Lease liabilities	$	9,170,148

BUSINESS SEGMENTS (Tables)

3 Months Ended

Dec. 31, 2023

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
	December 31, 2023		December 31, 2022
Revenue:	(unaudited)		(unaudited)
Ethanol division	$	54,332,084	$	109,825,931
Trading division	14,779,511		25,122,188
Total Revenue	$	69,111,595	$	134,948,119

	Three Months Ended
	December 31, 2023		December 31, 2022
Gross Profit:	(unaudited)		(unaudited)
Ethanol division	$	4,746,308	$	17,571,180
Trading division	776,728		367,764
Total Gross Profit	$	5,523,036	$	17,938,944

	Three Months Ended
	December 31, 2023		December 31, 2022
Operating Income (Loss):	(unaudited)		(unaudited)
Ethanol division	$	2,424,186	$	15,615,819
Trading division	459,484		50,521
Total Operating Income	$	2,883,670	$	15,666,340


	December 31, 2023		September 30, 2023
Grain Inventories:	(unaudited)
Ethanol division	$	11,659,174	$	3,517,682
Trading division	8,775,410		309,108
Total Grain Inventories	$	20,434,584	$	3,826,790

	December 31, 2023		September 30, 2023
Total Assets:	(unaudited)
Ethanol division	$	249,082,505	$	234,913,852
Trading division	12,671,991		(2,145,605)
Total Assets	$	261,754,496	$	232,768,247

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) gal in Thousands		3 Months Ended
	Jan. 31, 2024 USD ($)	Dec. 31, 2023 USD ($) institution segment gal	Dec. 31, 2022 USD ($) gal	Sep. 30, 2023 USD ($)
Product Information [Line Items]
Proceeds from revolving credit loan		$ 10,650,750	$ 0
Number of reportable segments \| segment		2
Number of operating segments \| segment		2
Number of financial reporting segment \| segment		1
Number of financial institutions \| institution		3
Impairment loss		$ 0	$ 0
Distribution payable		700,000
Cash distributions paid		1,500,000
Asset Purchase Agreement
Product Information [Line Items]
Asset purchase agreement, initial down payment		$ 3,250,000
Asset Purchase Agreement \| Subsequent Event
Product Information [Line Items]
Proceeds from revolving credit loan	$ 22,000,000
Payments to acquire productive assets	22,000,000
Additional fees and expenditures	$ 1,025,000
Limited Partnership
Product Information [Line Items]
Equity method investment, ownership percentage		50.00%
High Protein Feed System
Product Information [Line Items]
Additional liquefaction tank and fermenter cost		$ 50,000,000
Treasury Bills
Product Information [Line Items]
Cash equivalents				$ 33,229,000
Ethanol
Product Information [Line Items]
Annual production \| gal		20,423	34,254

REVENUE - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
REVENUE - Disaggregation of Revenue (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	$ 54,332,084	$ 109,825,931
Total revenues from contracts accounted for as derivatives	14,779,511	25,122,188
Total Revenues	69,111,595	134,948,119
Ethanol
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	42,220,110	86,311,246
Distillers Grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	8,742,453	15,363,951
Corn Oil
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	3,297,205	8,029,640
Carbon Dioxide
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	72,316	121,094
Soybeans and Other Grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts accounted for as derivatives	14,779,511	25,122,188
Ethanol Division
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	54,332,084	109,825,931
Total revenues from contracts accounted for as derivatives	0	0
Total Revenues	54,332,084	109,825,931
Ethanol Division \| Ethanol
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	42,220,110	86,311,246
Ethanol Division \| Distillers Grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	8,742,453	15,363,951
Ethanol Division \| Corn Oil
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	3,297,205	8,029,640
Ethanol Division \| Carbon Dioxide
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	72,316	121,094
Ethanol Division \| Soybeans and Other Grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts accounted for as derivatives	0	0
Trading Division
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Total revenues from contracts accounted for as derivatives	14,779,511	25,122,188
Total Revenues	14,779,511	25,122,188
Trading Division \| Ethanol
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Trading Division \| Distillers Grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Trading Division \| Corn Oil
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Trading Division \| Carbon Dioxide
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Trading Division \| Soybeans and Other Grains
Disaggregation of Revenue [Line Items]
Total revenues from contracts accounted for as derivatives	$ 14,779,511	$ 25,122,188

REVENUE - Narrative (Details)	3 Months Ended
REVENUE - Narrative (Details)	Dec. 31, 2023
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

CONCENTRATIONS (Details) - Customer Concentration Risk - Two Major Customers	3 Months Ended		12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Accounts Receivable
Concentration Risk [Line Items]
Concentration risk	93.00%		86.00%
Sales Revenue, Goods, Net
Concentration Risk [Line Items]
Concentration risk	74.00%	75.00%

INVENTORIES - Schedule of Inventory (Details) - USD ($)	Dec. 31, 2023	Sep. 30, 2023
Inventory [Line Items]
Raw materials	$ 20,434,584	$ 3,826,790
Total Inventories	30,611,452	15,103,440
Ethanol Division
Inventory [Line Items]
Raw materials	11,659,174	3,517,682
Work in progress	1,695,470	1,848,663
Finished goods	3,288,813	4,638,966
Spare parts	5,192,585	4,789,021
Total Inventories	21,836,042	14,794,332
Trading Division
Inventory [Line Items]
Raw materials	8,775,410	309,108
Total Inventories	$ 8,775,410	$ 309,108

INVENTORIES - Narrative (Details) - USD ($)	3 Months Ended		12 Months Ended
INVENTORIES - Narrative (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Ethanol Division
Inventory [Line Items]
Inventory written down	$ 1,152,000	$ 872,000
Ethanol Division \| Corn
Inventory [Line Items]
Expected production needed	5.00%
Number of months of coverage	24 months
Ethanol Division \| Corn \| Affiliated Entity
Inventory [Line Items]
Expected production needed	2.00%
Ethanol Division \| Corn Oil
Inventory [Line Items]
Expected production needed	62.00%
Trading Division
Inventory [Line Items]
Inventory written down	$ 1,337,000		$ 0
Trading Division \| Forward Soybean Purchase Contract
Inventory [Line Items]
Expected production needed	8.00%
Trading Division \| Forward Soybean Purchase Contract \| Affiliated Entity
Inventory [Line Items]
Expected production needed	16.00%

DERIVATIVE INSTRUMENTS - Narrative (Details)	3 Months Ended
DERIVATIVE INSTRUMENTS - Narrative (Details)	Dec. 31, 2023 USD ($) broker lb gal MMcf bu	Sep. 30, 2023 USD ($) broker
Derivative [Line Items]
Cash collateral \| $	$ 13,362,000	$ 13,425,000
Number of brokers, cash collateral \| broker	3	3
Ethanol Division \| Corn \| Short \| Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, volume (in bushels or gallons)	3,195,000
Ethanol Division \| Ethanol \| Short \| Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, volume (in bushels or gallons) \| gal	2,352,000
Ethanol Division \| Soybean Oil \| Long \| Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, mass (in pounds) \| lb	600,000
Ethanol Division \| Natural Gas \| Long \| Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, volume (in bushels or gallons) \| MMcf	372,801
Trading Division \| Soybean \| Short \| Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, nonmonetary notional amount, volume (in bushels or gallons)	685,000

DERIVATIVE INSTRUMENTS - Balance Sheet (Details) - Not Designated as Hedging Instrument - USD ($)	Dec. 31, 2023	Sep. 30, 2023
Futures and Options Contracts \| Ethanol \| Futures and Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	$ 0	$ 0
Liabilities	4,540,957	3,513,693
Futures and Options Contracts \| Corn \| Futures and Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	668,950	0
Liabilities	0	29,108
Futures and Options Contracts \| Soybean \| Futures and Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	134,387	352,464
Liabilities	0	0
Futures and Options Contracts \| Soybean Oil \| Futures and Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	0	0
Liabilities	30,354	21,534
Futures and Options Contracts \| Natural Gas \| Futures and Options Derivatives
Derivatives, Fair Value [Line Items]
Assets	0	0
Liabilities	322,557	253,586
Forward Contracts \| Soybean \| Forward Purchase/Sales Derivatives
Derivatives, Fair Value [Line Items]
Assets	258,150	66,825
Liabilities	$ 275,009	$ 356,177

DERIVATIVE INSTRUMENTS - Income Statement (Details) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	$ 2,204,325	$ 2,762,244
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Corn
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	2,685,316	2,145,852
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Corn \| Futures and options derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Assets	668,950		$ 0
Liabilities	0		29,108
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Ethanol
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	(132,497)	2,411,665
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Ethanol \| Futures and options derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Assets	0		0
Liabilities	4,540,957		3,513,693
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Natural Gas
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	(540,659)	(776,052)
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Natural Gas \| Futures and options derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Assets	0		0
Liabilities	322,557		253,586
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Soybean Oil
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	(8,820)	(16,927)
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Soybean Oil \| Futures and options derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Assets	0		0
Liabilities	30,354		21,534
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Soybean
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	(204,521)	(1,552,337)
Futures and Options Contracts \| Not Designated as Hedging Instrument \| Soybean \| Futures and options derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Assets	134,387		352,464
Liabilities	0		$ 0
Forward Contracts \| Not Designated as Hedging Instrument \| Soybean
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income	$ 405,506	$ 550,043

FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($)	Dec. 31, 2023	Sep. 30, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Payable	$ (12,354,031)	$ (3,908,868)
Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts Payable	(12,354,031)	(3,908,868)
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	(12,354,031)	(3,908,868)
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	8,775,479	309,108
Soybean \| Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	8,775,479	309,108
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	8,775,479	309,108
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
Futures and Options Contracts \| Corn
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	668,950	(29,108)
Futures and Options Contracts \| Corn \| Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	668,950	(29,108)
Futures and Options Contracts \| Corn \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	668,950	(60,637)
Futures and Options Contracts \| Corn \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	31,529
Futures and Options Contracts \| 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
Futures and Options Contracts \| Ethanol
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(4,540,957)	(3,513,693)
Futures and Options Contracts \| Ethanol \| Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(4,540,957)	(3,513,693)
Futures and Options Contracts \| Ethanol \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(4,540,957)	(3,513,693)
Futures and Options Contracts \| 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
Futures and Options Contracts \| 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
Futures and Options Contracts \| Soybean Oil
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(30,354)	(21,534)
Futures and Options Contracts \| 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	(30,354)	(21,534)
Futures and Options Contracts \| Soybean Oil \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(30,354)	(21,534)
Futures and Options Contracts \| 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
Futures and Options Contracts \| 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
Futures and Options Contracts \| Natural Gas
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(322,557)	(253,586)
Futures and Options Contracts \| Natural Gas \| Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(322,557)	(253,586)
Futures and Options Contracts \| Natural Gas \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(387,281)	(39,300)
Futures and Options Contracts \| Natural Gas \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	64,724	(214,286)
Futures and Options Contracts \| Natural Gas \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Futures and Options Contracts \| Soybean
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	134,387	352,464
Futures and Options 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	134,387	352,464
Futures and Options Contracts \| Soybean \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	134,387	352,464
Futures and Options Contracts \| Soybean \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	0	0
Futures and Options 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
Forward Contracts \| Soybean
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net	(16,859)	(289,352)
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	(16,859)	(289,352)
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	(16,859)	(289,352)
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
Treasury Bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net		12,407,939
Treasury Bills \| Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net		12,407,939
Treasury Bills \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net		12,407,939
Treasury Bills \| Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net		0
Treasury Bills \| Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets (liabilities), at fair value, net		$ 0

FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)	3 Months Ended
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrealized gain on available-for-sale debt securities	$ 10,671	$ (7,706)
Debt instrument, fair value disclosure	30,569,000		$ 30,569,000
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts payable	12,354,031		3,908,868
Reported Value Measurement \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Accounts payable	$ 12,354,031		$ 3,908,868

BANK FINANCING - Narrative (Details)		3 Months Ended
BANK FINANCING - Narrative (Details)	Jan. 31, 2024 USD ($) monthlyInstallment	Dec. 31, 2023 USD ($) loan monthlyInstallment	Sep. 30, 2023 USD ($)	Feb. 27, 2022 USD ($)
Debt Instrument [Line Items]
Number of loans \| loan		2
Long-term debt, net of current maturities		$ 28,588,740	$ 29,432,277
Revolving Credit Loan
Debt Instrument [Line Items]
Working capital requirement		23,000,000
Revolving Credit Loan \| Subsequent Event
Debt Instrument [Line Items]
Working capital requirement	$ 35,000,000
Term Loan \| Subsequent Event
Debt Instrument [Line Items]
Floor interest rate	3.25%
Debt term	7 years
Principal amount	$ 22,000,000
Number of installment payments \| monthlyInstallment	59
Prime Rate \| Term Loan \| Subsequent Event
Debt Instrument [Line Items]
Basis spread on variable rate	0.25%
Revolving Credit Facility \| Declining Loan
Debt Instrument [Line Items]
Maximum availability		$ 39,000,000	$ 5,000,000	$ 5,000,000
Interest rate		8.45%	8.45%
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
Long-term debt, net of current maturities		30,569,000	$ 30,569,000
Revolving Credit Facility \| Revolving Credit Loan
Debt Instrument [Line Items]
Maximum availability		$ 20,000,000
Floor interest rate		2.75%
Interest rate		8.25%	8.25%
Borrowings outstanding		$ 0	$ 0
Working capital requirement		15,000,000
Covenant, maximum capital expenditures per year without prior approval		$ 6,000,000
Minimum fixed charge coverage ratio		1.15
Minimum debt service charge coverage ratio		1.25
Revolving Credit Facility \| Revolving Credit Loan \| Subsequent Event
Debt Instrument [Line Items]
Maximum availability	$ 10,000,000
Working capital requirement	25,000,000
Covenant, maximum capital expenditures per year without prior approval	$ 10,000,000
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%

BANK FINANCING - Schedule of Debt Maturities (Details)	Dec. 31, 2023 USD ($)
Debt Disclosure [Abstract]
January 1, 2024 - December 31, 2024	$ 1,980,218
January 1, 2025 - December 31, 2025	3,553,260
January 1, 2026 - December 31, 2026	3,869,920
January 1, 2027 - December 31, 2027	4,214,803
January 1, 2028 - December 31, 2028	4,586,362
Thereafter	12,364,395
Total long-term debt	$ 30,568,958

LEASES - Narrative (Details)	3 Months Ended
LEASES - Narrative (Details)	Dec. 31, 2023 USD ($)
Operating Leased Assets [Line Items]
Operating lease weighted average discount rate	7.98%
Operating lease weighted average remaining lease term	4 years 14 days
Operating lease cost	$ 917,000
Cash paid for operating leases	$ 917,000
Minimum
Operating Leased Assets [Line Items]
Remaining lease term	1 year
Maximum
Operating Leased Assets [Line Items]
Remaining lease term	5 years

LEASES - Schedule of Future Minimum Payments for Operating Leases (Details)	Dec. 31, 2023 USD ($)
Leases [Abstract]
2024	$ 3,833,390
2025	1,772,100
2026	1,772,100
2027	1,772,100
2028	1,624,425
Totals	10,774,115
Amount representing interest	(1,603,967)
Lease liabilities	$ 9,170,148

COMMITMENTS AND CONTINGENCIES (Details) gal in Millions				1 Months Ended		3 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) gal in Millions	Jan. 31, 2024 USD ($)	Oct. 23, 2023 USD ($)	Jun. 30, 2009	Nov. 30, 2012	Jul. 31, 2009	Dec. 31, 2023 USD ($) tank_car hopper_rail_car gal	Dec. 31, 2022 USD ($)	Jan. 20, 2022 USD ($)
Loss Contingencies [Line Items]
Marketing agreement, previous termination period						120 days
Marketing agreement, extended contract term				11 years		8 years
Marketing agreement, payment terms			14 days		7 days
Operating leases, number of tank cars leased \| tank_car						225
Marketing agreement, automatic renewal term						1 year
Marketing agreement, termination period						90 days
Number of hopper cars leased \| hopper_rail_car						180
Number of hopper cars lease renewed \| hopper_rail_car						179
Cost of goods sold						$ 63,588,559	$ 117,009,175
Equipment purchase and installation agreement accrual								$ 50,000,000
Annual production capacity (in gallons) \| gal						70
Proceeds from revolving credit loan						$ 10,650,750	$ 0
Asset Purchase Agreement
Loss Contingencies [Line Items]
Cash purchase price		$ 44,000,000
Asset purchase agreement, initial down payment						3,250,000
Asset Purchase Agreement \| Subsequent Event
Loss Contingencies [Line Items]
Proceeds from revolving credit loan	$ 22,000,000
Payments to acquire productive assets	22,000,000
Additional fees and expenditures	$ 1,025,000
Maximum
Loss Contingencies [Line Items]
Sales commissions and fees						1,750,000
Rail Car Rehabilitation Cost Liability
Loss Contingencies [Line Items]
Estimated rehabilitation costs						2,434,000
Cost of goods sold						$ 89,000

RISKS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS (Details) - Geographic Concentration Risk - UNITED STATES	3 Months Ended
	Dec. 31, 2023
Revenue
Concentration Risk [Line Items]
Concentration risk	61.00%
Cost of Goods Sold
Concentration Risk [Line Items]
Concentration risk	57.00%

BUSINESS SEGMENTS - Narrative (Details)	3 Months Ended
BUSINESS SEGMENTS - Narrative (Details)	Dec. 31, 2023 segment
Segment Reporting [Abstract]
Number of reportable segments	2
Number of operating segments	2

BUSINESS SEGMENTS - Schedule of Business Segments (Details) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue:	$ 69,111,595	$ 134,948,119
Gross Profit:	5,523,036	17,938,944
Operating Income (Loss):	2,883,670	15,666,340
Grain Inventories:	20,434,584		$ 3,826,790
Total Assets:	261,754,496		232,768,247
Ethanol division
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue:	54,332,084	109,825,931
Gross Profit:	4,746,308	17,571,180
Operating Income (Loss):	2,424,186	15,615,819
Grain Inventories:	11,659,174		3,517,682
Total Assets:	249,082,505		234,913,852
Trading division
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenue:	14,779,511	25,122,188
Gross Profit:	776,728	367,764
Operating Income (Loss):	459,484	$ 50,521
Grain Inventories:	8,775,410		309,108
Total Assets:	$ 12,671,991		$ (2,145,605)

EQUITY METHOD INVESTMENTS (Details) - USD ($)	3 Months Ended
EQUITY METHOD INVESTMENTS (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Schedule of Equity Method Investments [Line Items]
Loss from equity method investment	$ 113,725	$ 231,106
Limited Partnership
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage	50.00%
Equity method investments	$ 7,187,000		$ 5,651,000
Loss from equity method investment	$ 114,000

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