XML 25 R14.htm IDEA: XBRL DOCUMENT

Agreements

9 Months Ended

Sep. 30, 2021

8. Agreements

Working Capital Arrangement. Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company agreed to procure whole yellow corn and grain sorghum, primarily from J.D. Heiskell. The Company has the ability to obtain grain from other sources subject to certain conditions; however, in the past all the Company’s grain purchases have been from J.D. Heiskell. Title and risk of loss of the corn pass to the Company when the corn is deposited into the Keyes Plant weigh bin. The term of the Corn Procurement and Working Capital Agreement expires on December 31, 2021 and the term can be automatically renewed for additional one-year terms. J.D. Heiskell further agrees to sell all WDG the Company produces to A.L. Gilbert. The Company markets and sells DCO to A.L. Gilbert and other third parties under the J.D. Heiskell Purchasing Agreement. The Company’s relationships with J.D. Heiskell, and A.L. Gilbert are well established, and the Company believes that the relationships are beneficial to all parties involved in utilizing the distribution logistics, reaching out to widespread customer base, managing inventory, and building working capital relationships. These agreements are ordinary purchase and sale agency agreements for the Keyes Plant. On May 13, 2020, J.D. Heiskell and the Company entered into Amendment No.1 to the J.D. Heiskell Purchasing Agreement to remove J.D. Heiskell’s obligations to purchase ethanol from the Company under the J.D. Heiskell Purchasing Agreement.

The J.D. Heiskell sales and purchases activity associated with the J.D. Heiskell Purchase Agreement and J.D. Heiskell Procurement Agreement during the three and nine months ended September 30, 2021 and 2020 were as follows:

	As of and for the three months ended September 30,				As of and for the nine months ended September 30,
	2021		2020		2021		2020
Ethanol sales	$	-	$	-	$	-	$	26,049
Wet distiller's grains sales		8,919		7,143		30,584		22,983
Corn oil sales		1,515		827		4,252		2,806
Corn purchases		39,058		25,513		119,217		77,268
Accounts receivable		88		161		88		161
Accounts payable		307		1,978		307		1,978

Ethanol and Wet Distillers Grains Marketing Arrangement. The Company entered into an Ethanol Marketing Agreement with Kinergy and a Wet Distillers Grains Marketing Agreement with A.L. Gilbert. Under the terms of the agreements the Wet Distillers Grains Marketing Agreement matures on December 31, 2021 with automatic one-year renewals thereafter. We terminated the Ethanol Marketing Agreement with Kinergy as of September 30, 2021. Effective October 1, 2021, we entered into Fuel Ethanol Purchase and Sale Agreement with Murex LLC. Under the terms of the agreement, the initial term matures on October 31, 2023 with automatic one-year renewals thereafter. For the three months ended September 30, 2021 and 2020, the Company expensed marketing costs of $0.7 million and $0.6 million respectively, under the terms of each agreement. For the nine months ended September 30, 2021 and 2020, the Company expensed marketing costs of $2.1 million and $1.7 million for each period respectively, under the terms of each agreement.

As of September 30, 2021, the Company has no forward sales commitments.