Long-Term Debt

Long-term debt consists of the following as of:



	June 30, 2012			September 30, 2011

Construction term loan. (A)	$	1,500,000		$	1,500,000

Construction/revolving term loan. (B)	225,000			1,000,000

Note payable to contractor (C)	—			1,250,000

Note payable to Iowa Department of Economic Development. (D)	—			152,500

Note payable to Iowa Department of Transportation. (E)	238,021			287,930

	1,963,021			4,190,430
Less current maturities	(1,525,350		)	(1,452,409		)
	$	437,671		$	2,738,021

(A)

The Company has a construction and term loan with a financial institution. Borrowings under the term loan include a variable interest rate based on the one-month LIBOR index rate plus 3.30%. The rate will be reset automatically without notice to the Company, on the first “US Banking Day” of each succeeding week, and each change shall be applicable to all outstanding balances as of that date. The agreement requires principal payments of $1,250,000 per quarter commencing in December 2006 through March 2013. The agreement requires the maintenance of certain financial and nonfinancial covenants. Borrowings under this agreement are collateralized by substantially all of the Company's assets. As of June 30, 2012, the Company has made principal payments of $37,500,000, since the inception of the loan, which under the terms of the agreement have been applied to scheduled payments in order of their maturity. The Company's next scheduled payment under the agreement is due in December 2012.

(B)

The Company has a $10,000,000 construction/revolving term credit facility with a financial institution which expires on September 1, 2015. Borrowings under the credit facility agreement include a variable interest rate based on the one-month LIBOR index rate plus 3.30%. The rate will be reset automatically without notice to the Company, on the first “US Banking Day” of each succeeding week, and each change shall be applicable to all outstanding balances as of that date. Borrowings are subject to borrowing base restrictions as defined in the agreement. The credit facility and revolving credit agreement require the maintenance of certain financial and nonfinancial covenants. Borrowings under this agreement are collateralized by substantially all of the Company's assets.


(C)	The Company had a $1,125,000 subordinated note payable dated May 22, 2006 to an unrelated third party. The note payable was paid in full during the quarter ended December 31, 2011.

(D)

The Company also had a $300,000 loan agreement with the Iowa Department of Economic Development (IDED). The loan was noninterest-bearing and due in monthly payments of $2,500 beginning December 2006 and a final payment of $152,500 due November 2011. Borrowings under this agreement were collateralized by substantially all of the Company's assets and subordinate to the above financial institution debt and construction and revolving loan/credit agreements included in (A) and (B). On October 5, 2011 the final payment of $152,500 was made by the Company.

(E) The Company entered into a $500,000 loan agreement with the Iowa Department of Transportation (IDOT) in February 2005. The proceeds were disbursed upon submission of paid invoices. Interest at 2.11% began accruing on January 1, 2007. Principal payments will be due semiannually through July 2016. The loan is secured by all rail track material constructed as part of the plant construction. The debt is subordinate to the above financial institution debt and construction and revolving loan/credit agreements included in (A) and (B).