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Note 12 - Agreements

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Collaborative Arrangement Disclosure [Text Block]

12. Agreements

J.D. Heiskell Working Capital Agreements. Pursuant to a Corn Procurement and Working Capital Agreement with J.D. Heiskell, the Company procures whole yellow corn 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. Pursuant to a separate agreement entered in May 2023, J.D. Heiskell also purchases all of our ethanol, WDG, corn oil, and CDS and sells them to marketing companies designated by us. We have designated Murex to purchase and market ethanol and A.L. Gilbert to purchase and market WDG and corn oil. The Company’s relationships with J.D. Heiskell, Murex, 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 a widespread customer base, managing inventory, and providing working capital relationships.

The following table summarizes the J.D. Heiskell purchase and sales activity during the three months ended March 31, 2025 and 2024:

		*For the three months ended March 31,*
		*2025*				*2024*
Ethanol sales		$	28,059			$	25,385
Wet distiller's grains sales			8,001				9,213
Corn oil sales			1,454				1,292
CDS sales			9				21
Corn purchases			31,354				30,913

		*March 31, 2025*				*December 31, 2024*
Accounts receivable			27				25
Accounts payable			—				—

The agreements with J.D. Heiskell, Murex, and A.L. Gilbert include marketing and transportation services. For the three months ended March 31, 2025 and 2024, the Company expensed marketing costs of $0.6 million and $0.2 million, respectively, in connection with the marketing arrangements and these costs are included in Selling, General, and Administration. For the three months ended March 31, 2025, the Company expensed transportation costs of $1.2 million related to sales of ethanol and $1.4 million related to sales of WDG. For the three months ended March 31, 2024, the Company expensed transportation costs of $0.7 million related to sales of ethanol and $1.4 million related to sales of WDG. Transportation costs are included in costs of goods sold.

Supply Trade Agreement. On July 1, 2022, the Company entered into an operating agreement with Gemini Edibles and Fats India Private Limited (“Gemini”) pursuant to which Gemini supplies the Company with feedstock up to a credit limit of $12.7 million with collateral interest in inventories, current assets, and fixed assets. If the Company fails to pay an invoice within the ten-day credit period, the outstanding balance bears interest at 18%. The agreement lasts until June 2025, and either party can terminate the agreement by giving one month's notice in writing. As of March 31, 2025, and December 31, 2024, the Company had accounts payable of $6.3 million and $6.2 million respectively, under this agreement.

Forward Sale Commitments. As of March 31, 2025, we have no forward sale commitments.

Natural Gas Purchase Agreement. As of March 31, 2025, we have a forward purchase agreement in place to buy approximately 3,700 MMBtu of natural gas per day at a fixed price of $3.30 per MMBtu through October 2025. The Company has elected to apply the normal purchases and normal sales scope exception under ASC 815, hence the natural gas purchased under this agreement is accounted for and included as cost of goods sold in the Company's financial statements.