Revolving Line of Credit & Long Term Debt

12 Months Ended

Oct. 31, 2012

REVOLVING LINE OF CREDIT AND LONG-TERM DEBT

The Company had a loan agreement with a bank. Under this agreement, the Company has a revolving line of credit with a maximum of $6,000,000 available through April 2012 and was secured by substantially all of the Company's assets. At October 31, 2011, the Company had no outstanding balance on this line of credit. In August 2012, the Company terminated this revolving line of credit.

The Company has subsequently established two new credit facilities with a new lender. The first is a seasonal revolving operating loan facility in the amount of $6,000,000. The second is a revolving term loan facility in the amount of $8,000,000. The interest rates for both facilities are based on the bank's "One Month LIBOR Index Rate," plus 265 and 290 basis points on the seasonal and revolving term commitments, respectively. The outstanding balance on the revolving term loan on October 31, 2012 was $4,891,952. The Company currently has not made any advances on the seasonal revolving operating loan facility.

The credit facilities require the Company to comply with certain financial covenants, including (i) maintaining working capital of at least $10,000,000, (ii) maintaining local net worth, defined as total assets, minus total liabilities, minus investments by the Company in other entities, of at least $45,000,000, and (iii) achieving a debt service coverage ratio of at least 2.0 to 1.0. The debt service coverage ratio is calculated as follows: (1) net income, plus depreciation and amortization, minus extraordinary gains (plus extraordinary losses), minus gain on asset sales (plus loss on asset sales); (2) divided by $2,000,000. As of October 31, 2012, the Company was in compliance with these financial covenants.

The credit facilities are secured by substantially all assets of the Company. There are no savings account balance collateral requirements as part of this new credit facility.

At October 31, 2012, the Company also had letters of credit totaling $386,928 with the bank as part of a credit requirement of Northern Natural Gas. These letters of credit reduce the amount available under the seasonal revolving operating loan to approximately $5,613,000. Subsequent to year end the letters of credit amount was reduced by $49,000.

Long-term debt consists of the following:



	October 31, 2012			October 31, 2011
Shuttlewagon Railcar Mover Loan (5 year term at 3.875%)	$	497,636		$	—
Long Term Revolver	$	4,891,952		$	—
Less: Current Maturities	$	(114,718	)	$	—

Total Long-Term Debt	$	5,274,870		$	—

The estimated maturities of long-term debt at October 31, 2012 are as follows:



November 1, 2012 to October 31, 2013		$	114,718
November 1, 2013 to October 31, 2014	119,233
November 1, 2014 to October 31, 2015	2,015,877
November 1, 2015 to October 31, 2016	2,128,801
November 1, 2016 to October 31, 2017	1,010,959
Total debt		$	5,389,588

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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