v3.24.2.u1
LEASES
 9 Months Ended
Jul. 31, 2024
Leases [Abstract]  
LEASES LEASES
The Company leased rail cars for its facility to transport dried distillers grains to its end customers. We classified those identified assets as operating leases after assessing the terms under lease classification guidance. The rail car lease terminated on June 30, 2024.

The Company has a contract for use of a natural gas pipeline which transports natural gas from the Northern Natural Gas pipeline to the Company’s facility. This natural gas line has no alternate use and is specifically for the benefit of the Company. The contract has minimum volume requirements as well as a fixed monthly fee. This contract meets the definition of a lease and is classified as a finance lease.
The Company determines if an arrangement is a lease or contains a lease at inception. Right of use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used in determining the lease liability for each individual lease is the Company's estimated incremental borrowing rate at the time the lease is entered into. An incremental borrowing rate of 5.5% was utilized for each of the Company's leases.

The Company’s operating and finance leases have remaining lease terms of approximately 2 months and 5.5 years, respectively. These leases include options to extend the lease. When it is reasonably certain the Company will exercise those options, the Company will update the remaining terms of the leases. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants.

The following table summarizes the remaining maturities of the Company’s finance lease liabilities as of July 31, 2024:
For the Period Ending July 31,Finance Leases
2025$178,800 
2026178,800 
2027178,800 
2028178,800 
2029178,800 
Thereafter44,700 
Totals938,700 
Amount representing interest(124,978)
Lease liability$813,722 

Lease CostThree Months ended July 31, 2024Three Months ended July 31, 2023Nine Months ended July 31, 2024Nine Months ended July 31, 2023
Operating lease cost$22,080 $42,120 $112,320 $126,360 
Short term lease cost9,295 11,898 43,994 33,829 
Finance lease cost
Amortization of leased assets34,323 34,323 102,970 102,970 
Interest on lease liabilities11,494 13,267 35,832 41,079 
Net lease cost$77,192 $101,608 $295,116 $304,238 
LEASES LEASES
The Company leased rail cars for its facility to transport dried distillers grains to its end customers. We classified those identified assets as operating leases after assessing the terms under lease classification guidance. The rail car lease terminated on June 30, 2024.

The Company has a contract for use of a natural gas pipeline which transports natural gas from the Northern Natural Gas pipeline to the Company’s facility. This natural gas line has no alternate use and is specifically for the benefit of the Company. The contract has minimum volume requirements as well as a fixed monthly fee. This contract meets the definition of a lease and is classified as a finance lease.
The Company determines if an arrangement is a lease or contains a lease at inception. Right of use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used in determining the lease liability for each individual lease is the Company's estimated incremental borrowing rate at the time the lease is entered into. An incremental borrowing rate of 5.5% was utilized for each of the Company's leases.

The Company’s operating and finance leases have remaining lease terms of approximately 2 months and 5.5 years, respectively. These leases include options to extend the lease. When it is reasonably certain the Company will exercise those options, the Company will update the remaining terms of the leases. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants.

The following table summarizes the remaining maturities of the Company’s finance lease liabilities as of July 31, 2024:
For the Period Ending July 31,Finance Leases
2025$178,800 
2026178,800 
2027178,800 
2028178,800 
2029178,800 
Thereafter44,700 
Totals938,700 
Amount representing interest(124,978)
Lease liability$813,722 

Lease CostThree Months ended July 31, 2024Three Months ended July 31, 2023Nine Months ended July 31, 2024Nine Months ended July 31, 2023
Operating lease cost$22,080 $42,120 $112,320 $126,360 
Short term lease cost9,295 11,898 43,994 33,829 
Finance lease cost
Amortization of leased assets34,323 34,323 102,970 102,970 
Interest on lease liabilities11,494 13,267 35,832 41,079 
Net lease cost$77,192 $101,608 $295,116 $304,238