GOING CONCERN	9 Months Ended
Jul. 31, 2013
GOING CONCERN
GOING CONCERN	2. GOING CONCERN The financial statements have been prepared on a going-concern basis, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has previously disclosed losses related to operations related to difficult market conditions and operating performance. The Company has had instances of unwaived debt covenant violations and had been operating under forbearance agreements with AgStar Financial Services, PCA (“Agstar”). In addition, the Company’s working capital was at a lower level than desired. These conditions contributed to the long-term debt with Agstar being classified as current in previously filed financial statements. These factors and the continual volatile commodity prices raise substantial doubt about the Company’s ability to continue as a going concern. The Company has continued to make changes to plant operations, including converting from a coal-fired ethanol plant to a natural gas plant in October 2011 and the addition of corn oil separation in February 2012. These changes have improved the operating performance of the plant, and lead to lower operating costs. Additionally, market conditions have improved during the three months ended July 31, 2013. The Company raised additional equity of approximately $6.9 million as of July 31, 2013, as well as issued convertible secured debt as described in Note 8. As a result, the Company was able to reduce their debt obligations as of July 31, 2013 and is in compliance with their debt covenants as of July 31, 2013. The Company renegotiated its loans with AgStar into a Term Loan and a Revolving Term Loan and entered into a Sixth Amended and Restated Master Loan Agreement with AgStar on May 17, 2013. The Revolving Term Loan will be used by the Company to optimize its cash management. The additional equity raised was used to improve working capital availability by paying down the Revolving Term Loan and meeting the required $5 million payment obligation by July 31, 2013. The Company’s Board of Governors loaned the Company $1.4 million in convertible secured debt, which was used to bring the previous AgStar loans up to date. In addition, the Company is expecting to raise approximately $3.6 million, subsequent to July 31, 2013, in convertible secured debt, which will be released from escrow as described in Note 8. While the Company believes these changes will improve the operating performance of the plant, provide additional working capital, and reduce the effects on our plant of volatility in the industry, it is not yet certain as to whether these efforts and changes will be successful.

2. GOING CONCERN

The financial statements have been prepared on a going-concern basis, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company has previously disclosed losses related to operations related to difficult market conditions and operating performance. The Company has had instances of unwaived debt covenant violations and had been operating under forbearance agreements with AgStar Financial Services, PCA (“Agstar”). In addition, the Company’s working capital was at a lower level than desired. These conditions contributed to the long-term debt with Agstar being classified as current in previously filed financial statements. These factors and the continual volatile commodity prices raise substantial doubt about the Company’s ability to continue as a going concern.

The Company has continued to make changes to plant operations, including converting from a coal-fired ethanol plant to a natural gas plant in October 2011 and the addition of corn oil separation in February 2012. These changes have improved the operating performance of the plant, and lead to lower operating costs. Additionally, market conditions have improved during the three months ended July 31, 2013. The Company raised additional equity of approximately $6.9 million as of July 31, 2013, as well as issued convertible secured debt as described in Note 8. As a result, the Company was able to reduce their debt obligations as of July 31, 2013 and is in compliance with their debt covenants as of July 31, 2013.

The Company renegotiated its loans with AgStar into a Term Loan and a Revolving Term Loan and entered into a Sixth Amended and Restated Master Loan Agreement with AgStar on May 17, 2013. The Revolving Term Loan will be used by the Company to optimize its cash management. The additional equity raised was used to improve working capital availability by paying down the Revolving Term Loan and meeting the required $5 million payment obligation by July 31, 2013. The Company’s Board of Governors loaned the Company $1.4 million in convertible secured debt, which was used to bring the previous AgStar loans up to date. In addition, the Company is expecting to raise approximately $3.6 million, subsequent to July 31, 2013, in convertible secured debt, which will be released from escrow as described in Note 8.

While the Company believes these changes will improve the operating performance of the plant, provide additional working capital, and reduce the effects on our plant of volatility in the industry, it is not yet certain as to whether these efforts and changes will be successful.