DEBT FINANCING

Long-term debt consists of the following at:



	October 31, 2019			October 31, 2018
Variable Rate Term Loan (Compeer)	$	3,500,000		$	6,500,000

Term Revolving Loan (Compeer)	6,499,000			3,500,000

Total	9,999,000			10,000,000

Less debt issuance costs	(25,137		)	(62,193		)

Less amounts due within one year	(2,729,739		)	(2,715,436		)

Net long-term debt	$	7,244,124		$	7,222,371

Bank Financing

On January 22, 2016, the Company entered into a Second Amended and Restated Credit Agreement with Compeer, as administrative agent for several financial institutions which amended the Amended and Restated Credit Agreement dated September 22, 2014. The Second Amended and Restated Credit Agreement decreased the Term Loan to $15,000,000, increased the Term Revolving Loan to $15,000,000 and eliminated the Revolving Line of Credit. Effective April 20, 2018, the Company executed a First Amendment to Second Amended and Restated Credit Agreement with Compeer which increased the availability under the Term Revolving Loan to $20,000,000.

Variable Rate Term Loan

The Variable Rate Term Loan is for $15,000,000 with a variable interest rate based on the greater of the 30-day LIBOR rate plus 325 basis points with no minimum interest rate. The applicable interest rate at October 31, 2019 was 5.30%. Monthly principal payments are due on the Term Loan of approximately $250,000 plus accrued interest. Payments of all amounts outstanding are due on January 22, 2021. The outstanding balance on this note was $3,500,000 at October 31, 2019. The Company may convert the Term Loan to a fixed rate loan, subject to certain conditions as described in the Amended and Restated Credit Agreement and with the consent of Compeer.

Term Revolving Loan

The Term Revolving Loan was for up to $15,000,000 with a variable interest rate that is based on the 30-day LIBOR rate plus 325 basis points with no minimum interest rate. The applicable interest rate at October 31, 2019 was 5.30%. Effective April 20, 2018, the availability under the Term Revolving Loan was increased to $20,000,000. The Term Revolving Loan may be advanced, repaid and re-borrowed during the term. Monthly interest payments are due on the Term Revolving Loan. Payment of all amounts outstanding is due on January 22, 2023. The outstanding balance was $6,499,000 at October 31, 2019. The Company is also required to pay unused commitment fees for the Term Revolving Loan as defined in the Second Amended and Restated Credit Agreement.

Debt Issuance Costs

Costs associated with the issuance of debt are recorded as debt issuance costs and are amortized over the term of the related debt by use of the effective interest method.

Covenants and other Miscellaneous Terms

The loan facility is secured by substantially all business assets. The Company executed a mortgage creating a first lien on its real estate and plant and a security interest in all personal property located on the premises and assigned all rents and leases to property, marketing contracts, risk management services contract, and natural gas, electricity, water service and grain procurement agreements.

The Company is also subject to various financial and non-financial covenants that limit distributions and debt and require minimum debt service coverage and working capital requirements. The debt service coverage ratio is no less than 1.25:1.00 and is measured annually by comparing adjusted EBITDA to scheduled payments of principal and interest. The minimum working capital is $8,250,000, which is calculated as current assets plus the amount available for drawing under our Term Revolving Loan, and undrawn amounts on outstanding letters of credit less current liabilities, and is measured quarterly.

The Company is limited to annual capital expenditures of $5,000,000 without prior approval, incurring additional debt over certain amounts without prior approval, and making additional investments as described in the Second Amended and Restated Credit Agreement without prior approval. The Company is allowed to make distributions to members as frequently as monthly in an amount equal to 75% of net income if working capital is greater than or equal to $8,250,000, or 100% of net income if working capital is greater than or equal to $11,000,000, or an unlimited amount if working capital is greater than or equal to $11,000,000 and the outstanding balance on the Term Loan is $0. As of October 31, 2019, the Company violated the debt service coverage ratio requirement of 1.25:1.00. Subsequent to the fiscal year end, on December 17, 2019, Compeer waived the Company's violation, at October 31, 2019, of the minimum debt services coverage ratio requirement of 1.25:1.00.

The estimated maturities of the long-term debt at October 31, 2019 are as follows:



Fiscal Year	Principal		Debt Issuance Costs			Total
2020	$	2,750,000	$	(20,261	)	$	2,729,739
2021	750,000		(4,876		)	745,124
2022	—		—			—
2023	6,499,000		—			6,499,000

Long-term debt	$	9,999,000	$	(25,137	)	$	9,973,863