þ | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934. |
o | Transition report under Section 13 or 15(d) of the Exchange Act. |
Indiana
(State or other jurisdiction of incorporation or organization) |
20-2327916
(I.R.S. Employer Identification No.) |
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Exhibit 10.31 | ||||||||
Exhibit 10.32 | ||||||||
Exhibit 10.33 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Table of Contents
Three Months Ended
Three Months Ended
From Inception
March 31,
March 31,
(February 7, 2005)
2007
2006
to March 31, 2007
(Unaudited)
(Unaudited)
(Unaudited)
$
$
$
66,389
50,543
625,975
134,188
29,114
576,709
200,577
79,657
1,202,684
(200,577
)
(79,657
)
(1,202,684
)
461,280
63,699
561,280
765,392
12,348
1,363,371
450
18,450
(50
)
(712
)
50
1,227,122
75,997
1,942,439
$
1,026,545
$
(3,660
)
$
739,755
14,601
568
2,435
$
70.31
$
(6.44
)
$
303.80
Table of Contents
Six Months Ended
Six Months Ended
March 31,
March 31,
2007
2006
(Unaudited)
(Unaudited)
$
$
289,178
62,569
278,312
45,764
567,490
108,333
(567,490
)
(108,333
)
461,280
63,699
1,327,074
17,882
450
(810
)
50
1,788,854
80,771
$
1,221,364
$
(27,562
)
9,432
385
$
129.49
$
(71.59
)
Table of Contents
Six Months Ended
Six Months Ended
From Inception
March 31,
March 31,
(February 7, 2005)
2007
2006
to March 31, 2007
(Unaudited)
(Unaudited)
(Unaudited)
$
1,221,364
$
(27,562
)
$
739,755
2,669
773
4,624
810
712
(50
)
(50
)
16,800
(135,854
)
(6,801
)
(137,146
)
(130,410
)
(63,699
)
(130,410
)
19,551
1,395
(5,642
)
(319,500
)
(319,500
)
(69,525
)
5,194
63,205
4,004
1,173
7,860
592,249
(88,717
)
240,208
(32,827
)
(7,177
)
(49,860
)
(2,647,484
)
(2,647,484
)
(8,265,133
)
(8,265,133
)
(16,800
)
(26,800
)
65,763
(712
)
(10,945,444
)
41,786
(10,989,989
)
(25,209
)
(102,505
)
(613,135
)
(756,119
)
(776,119
)
(24,652
)
(24,652
)
70,190,000
1,240,000
71,550,000
69,408,672
1,112,843
70,136,094
59,055,477
1,065,912
59,386,313
330,836
5,295
$
59,386,313
$
1,071,207
$
59,386,313
$
2,092,187
$
$
2,092,187
$
$
19,747
$
$
613,135
$
$
637,787
$
10,000
$
$
10,000
$
193,635
$
$
193,635
Table of Contents
Table of Contents
(A Development Stage Company)
Notes to Condensed Financial Statements
Table of Contents
(A Development Stage Company)
Notes to Condensed Financial Statements
Table of Contents
(A Development Stage Company)
Notes to Condensed Financial Statements
Table of Contents
(A Development Stage Company)
Notes to Condensed Financial Statements
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
# Full-Time
Position
Personnel
1
1
1
1
1
2
3
4
1
1
6
23
45
Sources of Funds
(1)
Percent
$
70,190,000
44.90
%
$
1,360,000
0.87
%
$
775,000
0.50
%
$
1,000,000
0.64
%
$
83,000,000
53.09
%
$
156,325,000
100.00
%
(1)
(2)
(3)
(4)
(5)
Table of Contents
Percent of
Use of Proceeds
Amount
Total
$
105,997,000
67.81
%
4,800,000
3.07
%
2,700,000
1.73
%
5,470,000
3.50
%
6,363,000
4.07
%
300,000
0.19
%
200,000
0.13
%
500,000
0.32
%
100,000
0.06
%
190,000
0.12
%
5,500,000
3.52
%
960,000
0.61
%
6,345,000
4.06
%
1,750,000
1.12
%
800,000
0.51
%
1,500,000
0.96
%
850,000
0.54
%
5,000,000
3.20
%
3,000,000
1.92
%
500,000
0.32
%
3,000,000
1.92
%
500,000
0.32
%
$
156,325,000
100.00
%
Table of Contents
Aggregate Price of the
Aggregate price of the
Amount Registered
amount registered
Amount sold
amount sold
$82,000,000
14,038
$70,190,000
Table of Contents
$
69,576,865.00
(1)
(2,647,484.00
)
(8,265,133.00
)
(732,291.48
)
(126,000.00
)
(319,500.00
)
(266,328.44
)
$
57,220,128.08
Exhibit
Method of
No.
Description
Filing
10.31
*
10.32
*
10.33
*
31.1
*
31.2
*
32.1
*
32.2
*
(*)
Table of Contents
CARDINAL ETHANOL, LLC
Date: May 15, 2007
/s/ Troy Prescott
Troy Prescott
Chairman and President (Principal Executive Officer)
Date: May 15, 2007
/s/ Dale Schwieterman
Dale Schwieterman
Treasurer (Principal Financial and Accounting Officer)
Table of Contents
Exhibit
No.
Description
10.31
10.32
10.33
31.1
31.2
32.1
32.2
1. |
Customer shall, upon the later of execution of this Agreement or by March 19,
2007, submit to Company payment in the amount of ONE HUNDRED FIFTY-NINE THOUSAND, SEVEN
HUNDRED FIFTY DOLLARS ($159,750.00). Companys receipt of such payment shall be
considered as Customers official request for Company to proceed with the engineering,
planning and right-of-way acquisition phases of the project.
|
2. |
Company shall, upon execution of this Agreement and receipt of the payment set
forth in 1. above, commence planning for the required modifications to, and extension
of, its existing facilities as necessary to provide the desired natural gas
transportation service to Customers proposed facility.
|
3. |
Customer shall, on or before April 2, 2007, submit to Company additional
payment in the amount of ONE HUNDRED FIFTY-NINE THOUSAND SEVEN HUNDRED FIFTY DOLLARS
($159,750.00) to allow for Companys ordering of, and payment for, materials required
to complete the required modifications to, and extension of, its existing facilities to
provide the desired natural gas transportation service to Customers proposed facility.
|
4. |
Customer shall, on or before July 1, 2007, submit to Company final payment in
the amount of THREE HUNDRED NINETEEN THOUSAND, FIVE HUNDRED
DOLLARS ($319,500.00) to allow for Companys completion of the required
modifications to, and extension of, its existing facilities and the required
installation to Customers proposed facility.
|
5. |
Company shall use its best efforts to complete the required modifications to,
and extension of, its existing facilities on or before May 1, 2008 in order to meet the
aforementioned anticipated in-service date.
|
6. |
All monies paid by Customer to Company as set forth above shall be considered
refundable to Customer in accordance with the following
|
a. |
Upon Customers payment to Company of each monthly billing for
services rendered, the Company shall refund to Customer an amount equal to
one-half (1/2) of the amount paid in throughput charges as set forth in the
Long-Term Transportation Service Contract for Redelivery of Natural Gas, which
Contract will, upon its execution, be incorporated into this Agreement by
reference.
|
||
b. |
This refund process shall continue until all monies paid
hereunder have been refunded to Customer by Company as set forth above, or for
the first three (3) years of service commencing with the actual in-service
date, whichever period is shorter.
|
||
c. |
If, at the end of the three (3) year refund period set forth
above, all pre-paid amounts have not been refunded to Customer, the Company
shall have the option, at its sole discretion, of either continuing the refund
process for up on one (1) additional year, or retaining any such remaining
pre-paid amount as a non-refundable contribution-in-aid-of-construction.
|
CUSTOMER
|
COMPANY | |||
Cardinal Ethanol, LLC
|
Ohio Valley Gas Corporation | |||
|
||||
/s/ Troy Prescott
|
/s/ Ronald L. Loyd
|
|||
President
|
Vice President and General Manager |
a. |
All of the natural gas requirements of Customer up to a maximum of 100,000
therms per purchase gas day, and;
|
||
b. |
Customers estimated annual natural gas requirements of 34,000,000 therms.
|
c. |
Customer has met all applicable regulatory requirements and has the means
(including, but not limited to third party arrangements) for delivering said gas (of
specified quality, quantity, pressure, etc.) to the agreed on Company receipt point(s);
and,
|
||
d. |
Customer has the means (including, but not limited to third pasty arrangements)
for receiving and accepting said gas at the agreed to Company delivery point(s).
|
|
Throughput Rate: |
For the first five (5) years (i.e. the first sixty (60) billing cycles) of the
Term of Contract, $0.03138 per therm for all gas received, transported and redelivered to
Customers meter, and for the ensuing five (5) years (i.e. the next sixty (60) billing
cycles), $0.0138 increased by the compounded inflation rate over the first five (5) years
of the Term of Contract as established and determined by the U.S. Consumer Price Index All
Urban Consumers (CPI-U) for Transportation (Series CUUR000SAT). In no case shall the
throughput rate for any renewal contract period be less than the rate for the immediately
preceding period.
|
||
|
||||
|
Service Charge: |
For the first five (5) years (i.e. the first sixty (60) billing cycles) of the
Term of Contract, $750.00 per delivery meter per billing cycle per month., and for the
ensuing five (5) years (i.e. the next sixty (60) billing cycles), $750.00 increased by the
compounded inflation rate over the first five (5) years of the Term of Contract as
established and determined by the U.S. Consumer Price Index All Urban Consumers (CPI-U)
for Transportation (Series CUUROOOSAT), In no case shall the monthly service charge for any
renewal contract period be less than it was for the immediately
preceding period.
|
a. |
After notification by Company to not exceed its Daily Nomination, Customer
exceeds its Daily Nomination;
|
||
b. |
The interstate pipelines Electronic Bulletin Board (EBB) reports Customers
supply quantity is less than as nominated to Company;
|
c. |
Accident, breakage or other causes of disruption of natural gas delivery into the
interstate pipeline system occur which preclude the delivery of Customers natural gas
supply to Company; or,
|
||
d. |
Accident, breakage or other causes of disruption of natural gas delivery to
Customer on Companys distribution system is beyond Companys control.
|
a. |
Authorized Overrun
|
(1) |
Each twenty-four (24) hour purchase gas day, Company will allow Customer
an allowable tolerance on their Daily Nomination, without additional charge.
|
||
(2) |
if the difference between Customers actual take for a twenty-four (24)
hour purchase gas day, and its Daily Nomination, as on file with the Companys gas
supply department for the applicable twenty-four (24) hour purchase gas day, is not
within the allowable tolerance, those quantities beyond the allowable tolerance,
assuming no curtailment action has been imposed, shall be considered an Authorized
Overrun and shall be subject to a Daily Balancing Charge.
|
b. |
Daily Nominations
|
||
Customer agrees to provide Company with written Daily Nominations in a format acceptable
to Company. All Daily Nominations are due in Companys gas supply department by the
25th
day of each calendar month for the upcoming months quantities, in therms, and shall be
detailed by calendar day. All written changes to the Daily Nominations, when received in
Companys gas supply department by
12:00 p.m. Eastern Time
on a scheduled Company
working day, shall become effective the next twenty-four (24) hour purchase gas day, or
such later twenty-four (24) hour purchase gas day specified
|
by the Customer. All written changes to the Daily Nominations shall be in effect for the
remaining calendar days of the applicable month. For the purpose of this Contract,
facsimile transmissions or emails to Companys gas supply department will be deemed
written notice upon receipt by Company. Only those volumes applicable to Customer as
shown on the interstate pipeline companys Electronic Bulletin Board (EBB) will be
recognized when billing Customer and determining Daily Balancing and Cash Out of Monthly
Imbalance charges.
|
|||
Customer agrees that it is the responsibility of Customer and its agent to ensure that
the correct quantities of natural gas are properly nominated to the applicable receipt
and delivery points utilized by Company. Company assumes no responsibility or liability
for the accuracy of nominations by Customer.
|
|||
c. |
Allowable Tolerance
|
d. |
Daily Balancing Charge
|
e. |
Unauthorized Overrun
|
(1) |
If Customer has been informed by Company to stay within its Daily
Nomination (plus allowable tolerance), and then uses a quantity of natural gas
which is greater than its Daily Nomination (plus allowable tolerance) without prior
written or verbal approval of Company, the excess shall constitute an Unauthorized
Overrun and Customer shall pay Company a penalty of $3.00 per therm for all natural
gas used in excess of the Daily Nomination (plus allowable tolerance) for the
applicable twenty-four (24) hour purchase gas day. This penalty shall be in
addition to all other applicable charges, including, but not limited to any
interstate pipeline penalties.
|
||
(2) |
The payment of a penalty for unauthorized overrun shall not, under any
circumstances, be considered as giving Customer the right to take unauthorized
overruns. Further, such payment shall not be considered a substitute for any other
remedies available to Company or any of Companys other customers for failure to
respect its obligation to adhere to the provisions of this Contract.
|
(3) |
Company shall have the right, without obligation, to waive the penalty for any
unauthorized overrun, provided Companys other customers or its pipeline operations
were not adversely affected.
|
||
(4) |
Company shall waive any penalty for an unauthorized overrun when such
overrun occurred due to circumstances beyond the control of Customer due to
emergency conditions on Companys facilities; or when such overrun is due to
accident or breakage of pipelines, machinery, or equipment of the Customer if such
overrun does not result in penalties being imposed on Company by the interstate
pipeline. However, Customer shall promptly take such action as may be necessary to
repair or remedy any such situation and shall furnish Company satisfactory evidence
that such accident or breakage was not due to Customers negligent action or
inaction.
|
Net Aggregate | Percentage of | |||
Monthly | Company City | |||
Imbalance | Gate Station | |||
> 0% not > 2-1/2 %
|
100 | % | ||
> 2-1/2 % not > 5%
|
110 | % | ||
> 5% not >7-112%
|
120 | % | ||
>7-1/2% not >10%
|
130 | % | ||
>10% not >12-1/2%
|
140 | % | ||
>12-1/2%
|
150 | % |
Net Aggregate | Percentage of OVGC City | ||||
Monthly Imbalance Percentage | Gate Station Average Price** | ||||
> 0% not > 2-1/2 %
|
100 | % | |||
> 2-1/2 % not > 5%
|
90 | % | |||
>5% not > 7-1/2%
|
80 | % | |||
>7-1/2% not >10%
|
70 | % | |||
>10% not >12-1/2%
|
60 | % | |||
>12-1/2%
|
50 | % |
** |
City Gate Station Average Price: Companys average gas cost (demand and commodity) per therm,
based on gas purchases for the applicable month.
|
Notices to Company shall be addressed to
|
Ohio Valley Gas Corporation | |
|
Attn: General Manager | |
|
P.O. Box 469 | |
|
Winchester, Indiana 47394-0469. | |
|
||
Notices to Customer shall be addressed to:
|
Cardinal Ethanol, LLC | |
|
Attn: General Manager | |
|
2 OMCO Square, Suite 201 | |
|
PO Box 501 | |
|
Winchester, IN 47394 |
Executed
3/20/07
|
OHIO VALLEY GAS CORPORATION (COMPANY) | |||||
(DATE)
|
||||||
|
||||||
/s/ (illegible)
|
By: |
R.L. Loyd
|
||||
|
||||||
Executed 3/20/07
|
CARDINAL ETHANOL, LLC (CUSTOMER) | |||||
(DATE)
|
||||||
|
||||||
/s/ (illegible)
|
By: |
/s/ Troy A. Prescott
|
Indiana Michigan Power Company | Cardinal Ethanol, LLC | |||||
|
||||||
By:
|
/s/ Ronald Kalie | By: | /s/ Troy Prescott | |||
|
||||||
Ronald Kalie | Troy Prescott | |||||
|
||||||
Title: Manager | Title: President | |||||
Date: 5/2/2007 | Date: April 23, 2007 | |||||
Account Number |
1. |
I have reviewed this quarterly report on Form 10-QSB of Cardinal Ethanol, LLC in accordance
with Rule 15(d)-2 of the Securities Exchange Act of 1934;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the small business issuer, as of, and for, the periods presented
in this report;
|
4. |
The small business issuers other certifying officers and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the small business issuer, and have:
|
a) |
Designed such disclosure controls and procedures or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the small business issuer, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;
|
b) |
Designed such internal
control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the small business issuers disclosure controls
and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d) |
Disclosed in this report any changes in the small business issuers internal
control over financial reporting that occurred during the small business issuers most
recent fiscal year that has materially affected, or is reasonably likely to materially
affect, the small business issuers internal control over financial reporting.
|
5. |
The small business issuers other certifying officers and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the small business issuers
auditors and the audit committee of the small business issuers board of directors (or persons
performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the small business issuers ability to record, process, summarize and report
financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the small business issuers internal controls over
financial reporting.
|
Date: May 15, 2007 | /s/ Troy Prescott | |||
Troy Prescott,
(President and Principal Executive Officer) |
1. |
I have reviewed this quarterly report on Form 10-QSB of Cardinal Ethanol, LLC in accordance
with Rule 15(d)-2 of the Securities Exchange Act of 1934;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the small business issuer, as of, and for, the periods presented
in this report;
|
4. |
The small business issuers other certifying officers and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the small business issuer, and have:
|
a) |
Designed such disclosure controls and procedures or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the small business issuer, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;
|
b) |
Designed such internal
control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the small business issuers disclosure controls
and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d) |
Disclosed in this report any changes in the small business issuers internal
control over financial reporting that occurred during the small business issuers most
recent fiscal year that has materially affected, or is reasonably likely to materially
affect, the small business issuers internal control over financial reporting.
|
5. |
The small business issuers other certifying officers and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the small business issuers
auditors and the audit committee of the small business issuers board of directors (or persons
performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the small business issuers ability to record, process, summarize and report
financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the small business issuers internal controls over
financial reporting.
|
Date: May 15, 2007 | /s/ Dale Schwieterman | |||
Dale Schwieterman,
(Principal Financial Officer) |
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and
|
2. |
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
|
/s/ Troy Prescott | ||||
Troy Prescott,
President and Principal Executive Officer |
||||
Dated: May 15, 2007 |
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and
|
2. |
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
|
/s/ Dale Schwieterman | ||||
Dale Schwieterman,
Treasurer and Principal Financial and Accounting Officer |
||||
Dated: May 15, 2007 |