SOUTH DAKOTA SOYBEAN PROCESSORS LLC

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized:

Pursuant to the requirements of the Securities Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

December 31, 2023, 2022, and 2021

SOUTH DAKOTA SOYBEAN PROCESSORS, LLC

Index to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Managers and Members

Volga, South Dakota

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of South Dakota Soybean Processors, LLC (the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes in members’ equity, and cash flows, for the years ended December 31, 2023, 2022, and 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of South Dakota Soybean Processors, LLC as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Inventory Basis Adjustment

As discussed in Notes 1, 3 and 14 in the accompanying financial statements, fair value measurement for inventories carried at market value, which approximates net realizable value, are based on exchange-quoted prices adjusted for differences in local markets and/or quality, referred to as basis. Fair values for sales contracts are adjusted for location and quality differences (basis) because the exchange-quoted prices represent contracts that have standardized terms for commodity, quantity, future delivery period, delivery location, and commodity quality or grade. The reported fair value as of December 31, 2023 for inventories, was $72 million.

We identified the Inventory Basis Adjustment as a critical audit matter. Auditing these complex judgments and assumptions involves especially challenging auditor judgment due to the nature and extent of audit evidence and effort required to address these matters, including the extent of specialized skill or knowledge needed.

The primary procedures we performed to address this critical audit matter included:

•Gaining an understanding of management's process, controls, and methodology to develop the estimated fair values, including controls related to the identification and reasonableness of key assumptions and accuracy and completeness of the underlying data used in the determination of fair value.

•Testing and evaluation of management's process and methodology for determining and developing the estimated fair values of inventories carried at market value through evaluating (i) the reasonableness of the significant assumptions used by management including comparison of quoted commodity pricing to local and regional market conditions (ii) the historical adjustments to inventory balances as compared to the current year’s adjustment, and (iii) the completeness and accuracy of the underlying data supporting the basis adjustments.

•Evaluating whether the assumptions used were reasonable by considering comparable basis adjustments used by management to local grain elevators and recent trade prices, including recently executed transactions, and whether such assumptions were consistent with evidence obtained in other areas of the audit.

•Evaluating the adequacy of the financial statement disclosure related to the estimated fair value of inventories carried at market value.

/s/Eide Bailly LLP

We have served as the Company’s auditor since 2001 (such date incorporates the acquisition of certain assets of Gordon, Hughes & Banks, LLP by Eide Bailly LLP in 2008).

Denver. Colorado

March 21, 2024

December 31, 2023 and 2022

Consolidated Statements of Changes in Members’ Equity

Note 1 - Principal Activity and Significant Accounting Policies

Organization

South Dakota Soybean Processors, LLC (the “Company” or “LLC”) processes and sells soybean products, such as soybean meal, oil, and hulls. The Company’s principal operations are located where we have plants in Volga and Miller, South Dakota.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its controlled subsidiaries, High Plains Partners, LLC, HPP SD Holdings, LLC, and High Plains Processing, LLC, after elimination of all material intercompany accounts, transactions, and profits.

Cash and cash equivalents

The Company considers all highly liquid investment instruments with original maturities of three months or less at the time of acquisition to be cash equivalents.

Inventories

Finished goods (soybean meal, oil, refined oil, and hulls) and raw materials (soybeans) are valued at estimated market value, which approximates net realizable value. This accounting policy is in accordance with the guidelines described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 905, Agriculture (formerly AICPA Statement of Position No. 85-3, Accounting by Agricultural Producers and Agricultural Cooperatives). Supplies and other inventories are stated at lower of cost or net realizable value.

Investments

The Company measures its equity investments in Prairie AquaTech, LLC, Prairie AquaTech Manufacturing, LLC, and Prairie AquaTech Investments, LLC at cost less any impairment plus or minus observable price changes in orderly transactions since these investments do not have readily determinable fair values.

Investments in cooperatives are recorded in a manner similar to equity investments without readily determinable fair values, cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

Effective September 30, 2023, the Company began consolidating the accounts of High Plains Processing, LLC, HPP SD Holdings, LLC, and High Plains Partners, LLC, formerly unconsolidated entities, into its financial statements . The Company and other regional investors committed to investing a total of $192.0 million into High Plains Partners. In September 2023, High Plains Partners created a joint venture with another partner to create High Plains Processing, LLC, to build a new multi-seed crush facility near Mitchell, South Dakota. Construction of the facility is estimated to be completed in late 2025. The consolidation is due to the Company's entering into a management agreement with the new processing facility along with its ability to appoint a majority of the board members of each entity. The financial data for previous periods has not been restated to reflect the consolidation of the three entities as there is not a material impact on the financial position or results of operations for the periods presented and has no effect on previously reported net income. If the entities were consolidated in the December 31, 2022 financial statements, the impact would be a reduction in the investments in related parties and an increase construction in progress (property and equipment) of $2.4 million.

Property and equipment

Property and equipment is stated at cost. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense when incurred. When depreciable properties are sold or retired, the cost and accumulated depreciation are eliminated from the accounts and the resultant gain or loss is reflected in income.

Depreciation is provided for over the estimated useful lives of the individual assets using the straight-line method. The range of the estimated useful lives used in the computation of depreciation is as follows:

The Company reviews its long-lived assets for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. If impairment indicators are present and the future cash flows is less than the carrying amount of the assets, values are reduced to the estimated fair value of those assets. The Company did not recognize any impairment on property and equipment during the years ended December 31, 2023, 2022, and 2021.

Use of estimates

The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue

The Company accounts for all of its revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers.

The Company principally generates revenue from merchandising and transporting manufactured agricultural products used as ingredients in food, feed, energy and industrial products. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any amounts collected on behalf of third parties (e.g. - taxes). The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product to a customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms). Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of revenues. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Payments received in advance to the transfer of goods, or "contract liabilities", are included in "Deferred liabilities - current" on the Company's balance sheets. These customer prepayments totaled $737,503 and $1,074,059 as of December 31, 2023 and 2022, respectively. The Company recognized $1,032,253 of the $1,074,059 balance as of December 31, 2022 as revenue during the year ended December 31, 2023. All of the $1,347,409 balance as of December 31, 2021 was recognized as revenue during the year ended December 31, 2022.

The following table presents a disaggregation of revenue from contracts with customers for the years ended December initiated 31, 2023, 2022, and 2021, by product type:

Freight

The Company presents all amounts billed to the customer for freight as a component of net revenue. Costs incurred for freight are reported as a component of cost of revenue.

Advertising costs

Advertising and promotion costs are expensed as incurred. The Company incurred $115,000, $96,000, and $66,000, of advertising costs in the years ended December 31, 2023, 2022, and 2021, respectively.

Environmental remediation

It is management’s opinion that the amount of any potential environmental remediation costs will not be material to the Company’s financial condition, results of operations, or cash flows; therefore, no accrual has been recorded.

Accounting for derivative instruments and hedging activities

All of the Company’s derivatives are designated as non-hedge derivatives. The futures and options contracts, as well as the interest rate swaps, caps and floors, used by the Company are discussed below. Although the contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments.

The Company, as part of its trading activity, uses futures and option contracts offered through regulated commodity exchanges to reduce risk. The Company is exposed to risk of loss in the market value of inventories. To reduce that risk, the Company generally takes opposite and offsetting positions using futures contracts or options. Unrealized gains and losses on futures and options contracts used to hedge soybean, oil and meal inventories, as well as foreign exchange rates, are recognized as a component of net proceeds for financial reporting.

The Company uses interest rate swaps, caps and floors offered through regulated commodity exchanges. The Company is exposed to risk of loss resulting from potential increases in interest rates on their variable rate debt. To reduce that risk, the Company has purchased interest rate swaps, caps and floors. Unrealized gains and losses on interest rate swaps, caps and floors are reflected in current earnings immediately.

Earnings per capital unit

Earnings per capital unit are calculated based on the weighted average number of capital units outstanding. The Company has no other capital units or other member equity instruments that are dilutive for purposes of calculating earnings per capital unit.

Income taxes

As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership. Therefore, no provision or liability for income taxes has been included in the consolidated financial statements.

The Company has evaluated the provisions of FASB ASC 740-10 for uncertain tax positions. As of December 31, 2023 and 2022, the unrecognized tax benefit accrual waszero.

The Company will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred.

As of December 31, 2023, the book value of the Company’s net assets exceeds the tax basis of those assets by approximately $49.3 million.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are no longer subject to income tax examinations by U.S. federal and state tax authorities for years prior to 2019. We currently have no tax years under examination.

Recent accounting pronouncements

Any recent accounting pronouncements are not expected to have a material impact on our consolidated financial statements.

Note 2 -Accounts Receivable

Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms, which is generally 30 days from invoice date. Accounts considered uncollectible are written off. The Company’s estimate of the allowance for for credit losses is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any.

The following table presents the aging analysis of trade receivables as of December 31, 2023 and 2022:

The following table provides information regarding the Company’s allowance for credit losses as of December 31:

In general cash received is applied to the oldest outstanding invoice first, unless payment is for a specified invoice. The Company, on a case by case basis, may charge a late fee of 1.5% per month on past due receivables.

The Company's accounts receivable as of January 1, 2022 was $36,571,001.

Note 3 -Inventories

The Company’s inventories consist of the following as of December 31:

Finished goods and raw materials are valued at estimated market value, which approximates net realizable value. Supplies and other inventories are stated at lower of cost or net realizable value.

Note 4 -Margin Deposits

The Company has margin deposits with a commodity brokerage firm used to acquire futures and option contracts to manage the price volatility risk of soybeans, crude soybean oil and soybean meal. Consistent with its inventory accounting policy, these contracts are recorded at market value. At December 31, 2023, the Company’s futures contracts all mature within 12 months.

Note 5 -Investments in Related Parties

The Company's investment in related parties consists of the following at December 31:

The Company measures its investments in Prairie AquaTech, LLC, Prairie AquaTech Investments, LLC, Prairie AquaTech Manufacturing, LLC and High Plains Partners, LLC at their cost less any impairment plus or minus any observable price changes in orderly transactions since these equity investments do not have readily determinable fair values.

The Company invested in Prairie AquaTech Manufacturing, LLC $0, $0 and $404,329 in cash and an additional $1,436,420, $1,436,420 and $1,049,834 of soybean meal in 2023, 2022, and 2021 respectively, to be used in the entity's operations.

In February 2022, the Company announced its plans to construct a multi-seed processing plant near Mitchell, South Dakota. In September 2022, the Company entered into a capital contribution and commitment agreement with High Plains Partners, LLC. Per the agreement, the Company transferred to High Plains Partners, LLC all rights, title and interest to all of the tangible and intangible development rights, including engineering, permitting, studies, records, etc., totaling $5.0 million in value in exchange for 2,615 Class B units in High Plains Partners, LLC. The Company also committed to investing up to another $81.4 million for 19,454 Class B capital units in the entity. As of December 31, 2023, the Company had contributed $19.0 million towards the project.

Effective September 30, 2023, the Company began consolidating the accounts of High Plains Processing, LLC, HPP SD Holdings, LLC, and High Plains Partners, LLC, formerly unconsolidated entities, into its financial statements . The Company and other regional investors committed to investing a total of $192.0 million into High Plains Partners. In September 2023, High Plains Partners created a joint venture with another partner to create High Plains Processing, LLC, to build a new multi-seed crush facility near Mitchell, South Dakota. Construction of the facility is estimated to be completed in late 2025. The consolidation is due to the Company's entering into a management agreement with the new processing facility along with its ability to appoint a majority of the board members of each entity. The financial data for previous periods has not been restated to reflect the consolidation of the three entities as there is not a material impact on the financial position or results of operations for the periods presented and has no effect on previously reported net income. If the entities were consolidated in the December 31, 2022 financial statements, the impact would be a reduction in the investments in related parties and an increase construction in progress (property and equipment) of $2.4 million. As of December 31, 2023, High Plains Partners, HPP SD Holdings, and High Plains Processing, LLC received a total of $98.1 million in proceeds from the issuance from capital units.

Note 6 -Investments in Cooperatives

The Company’s investments in cooperatives consist of the following at December 31:

Note 7 -Property and Equipment

The following is a summary of property and equipment at December 31:

Depreciation of property and equipment amounts to $5,830,587, $5,558,143, and $5,087,987 for the years ended December 31, 2023, 2022, and 2021, respectively.

Note 8 -Notes Payable - Seasonal Loan

The Company has entered into a revolving credit agreement with CoBank which expires on October 1, 2024. The purpose of the credit agreement is to finance the operating needs of the Company. Under this agreement, the Company could borrow up to $85 million, and advances on the revolving credit agreement are secured. Interest accrues at a variable rate (7.55% at December 31, 2023). The Company pays a 0.20% annual commitment fee on any funds not borrowed. There were advances outstanding of $0 and $0.1 million at December 31, 2023 and 2022. The remaining available funds to borrow under the terms of the revolving credit agreement were $85.0 million as of December 31, 2023.

Note 9 -Long-Term Debt

The following is a summary of the Company's long-term debt at December 31:

The Company entered into an agreement as of September 20, 2023 with CoBank to amend and restate its Credit Agreement, which includes the revolving term loan, note payable, and seasonal loan. Under the terms and conditions of the Credit Agreement, CoBank agreed to make advances to the Company for up to $12.0 million on the revolving term loan with a variable effective interest rate of 7.85%. The amount available for borrowing on the revolving term loan will decrease by $600,000 every six months until the loan's maturity date of March 20, 2028. The Company pays a 0.40% annual commitment fee on any funds not borrowed. The debt issuance costs of $24,000 paid by the Company were amortized over the term of the loan. The principal balance outstanding on the revolving term loan was $0.0 million and $8.8 million as of December 31, 2023 and 2022, respectively. There were approximately $11.4 million in remaining commitments available to borrow on the revolving term loan as of December 31, 2023.

On September 20, 2023, the Company entered into a note payable to CoBank to borrow up to $90.0 million until August 1, 2024, the proceeds of which are to be used to finance the Company's investment in High Plains Partners, LLC. The Company will make semi-annual payments of $4.5 million beginning October 20, 2024 until the note's maturity on March 20, 2028. The principal balance outstanding on the note payable was $0 as of December 31, 2023 and 2022. There was $90.0 million available to borrow on the note payable as of December 31, 2023.

Under this agreement, the Company is subject to compliance with standard financial covenants and the maintenance of certain financial ratios. The Company was in compliance with all covenants and conditions with CoBank as of December 31, 2023.

The following are minimum principal payments on long-term debt obligations for the years ended December 31:

Note 10 -Operating Leases

The Company has several operating leases for railcars. These leases have terms ranging from 3-12 years and most do not have renewal terms provided. The leases require the Company to maintain the condition of the railcars, restrict the use of the railcars to specified products, such as soybean meal, hulls or oil, limit usage to the continental United States, Canada or Mexico, require approval to sublease to other entities, and require the Company's submission of its financial statements. Lease expense for all railcars was $4,264,107, $2,938,930, and $3,026,270 for the years ended December 31, 2023, 2022, and 2021, respectively.

The following is a schedule of the Company's operating leases for railcars as of December 31, 2023:

The Company also has a number of other operating leases for machinery and equipment. These leases have terms ranging from 3-7 years; however, most of these leases have automatic renewal terms. These leases require monthly payments of $3,824. Rental expense under these other operating leases was $54,633, $81,973, and $38,606, for the years ended December 31, 2023, 2022, and 2021, respectively.

On March 19, 2020, the Company entered into an agreement with an entity in the western United States to provide storage and handling services for the Company's soybean meal. The Company paid the entity $3,300,000 after the entity's construction of additional storage and handling facilities. The agreement began on May 1, 2021 and will mature on April 30, 2027 but includes an additional seven-year renewal period at the sole discretion of the Company. Rental expense under this agreement was $235,714, $235,714, and $157,143, for the years ended December 31, 2023, 2022, and 2021, respectively.

Operating leases are included in right-to-use lease assets, current operating lease liabilities, and long-term lease liabilities on the Company's consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company's secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the consolidate balance sheet.

Lease expense for these operating leases is recognized on a straight-line basis over the lease terms. The components of lease costs recognized within our consolidated statements of operations for the years ended December 31, 2023, 2022, and 2021 were as follows:

The following summarizes the supplemental cash flow information for the years ended December 31:

The following summarizes the weighted-average remaining lease term and weighted-average discount rate as of December 31, 2023:

The following is a maturity analysis of the undiscounted cash flows of the operating lease liabilities as of December 31, 2023:

Note 11 -Employee Benefit Plans

The Company maintains a Section 401(k) plan for employees who meet the eligibility requirements set forth in the plan documents. The Company matches a percentage of an employee's contributed earnings. The amounts charged to expense under this plan were approximately $313,000, $305,000, and $249,000 for the years ended December 31, 2023, 2022, and 2021, respectively.

The Company's Board of Managers approved the payment of a profit-based incentive bonus to be awarded to eligible employees following the close of each fiscal year. The Board has allocated approximately 4.7% of profits over $2 million to fund this benefit. Individual amounts are based upon criteria determined by a formula that considers current pay, level of responsibility, and impact on profits of each position. The amounts charged to expense under this incentive were approximately $3,521,000, $3,246,000, and $1,289,000 for the years ended December 31, 2023, 2022, and 2021, respectively.

In 2022, the Company entered into deferred compensation agreements with four key executives. The agreement provides for a monetary incentive, contingent on each individual's performance. These incentives will vest, ratable over eight years, at 12.5% per year. Vested amounts will then be paid in conjunction with retirement or post-separation, as specified by the executives upon the initial awards. The Company recognized expense of $42,062, $12,031 and $0 related to this agreement during the years ended December 31, 2023, 2022 and 2021, respectively, related to this agreement.

Note 12 -Cash Flow Information

The following is a schedule of changes in assets and liabilities used to determine cash from operating activities:

Note 13 -Derivative Instruments and Hedging Activities

In the ordinary course of business, the Company enters into contractual arrangements as a means of managing exposure to changes in commodity prices and, occasionally, foreign exchange and interest rates. The Company’s derivative instruments primarily consist of commodity futures, options and forward contracts, and interest rate swaps, caps and floors. Although these contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments. These contracts are recorded on the Company’s consolidated balance sheets at fair value as discussed in Note 14, Fair Value.

As of December 31, 2023 and 2022, the net value of the Company’s open futures, options and forward contracts was $4,394,994 and $(9,059,941), respectively.

During the years ended December 31, 2023, 2022, and 2021, net realized and unrealized gains (losses) on derivative transactions were recognized in the consolidated statements of operations as follows:

The Company recorded gains (losses) of $24,864,543, $(1,073,579), and $(10,042,360) in cost of goods sold related to its commodity derivative instruments for the years ended December 31, 2023, 2022, and 2021, respectively.

Note 14 -Fair Value

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a comprehensive framework for measuring fair value and expands disclosures that are required about fair value measurements. Specifically, this guidance establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. The three levels of hierarchy and examples are as follows:

•Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange and commodity derivative contracts listed on the Chicago Board of Trade (“CBOT”).

•Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs, such as commodity prices using forward future prices.

•Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

The following tables set forth financial assets and liabilities measured at fair value in the consolidated balance sheets and the respective levels to which fair value measurements are classified within the fair value hierarchy as of December 31:

The Company enters into various commodity derivative instruments, including futures, options, swaps and other agreements. The fair value of the Company’s commodity derivatives is determined using unadjusted quoted prices for identical instruments on the CBOT. The Company estimates the fair market value of their finished goods and raw materials inventories using the market price quotations of similar forward future contracts listed on the CBOT and adjusts for the local market adjustments derived from other grain terminals in the area.

The Company considers the carrying amount of significant classes of financial instruments on the consolidated balance sheets, including cash, accounts receivable, and accounts payable, to be reasonable estimates of fair value due to their length or maturity. The fair value of the Company’s long-term debt approximates the carrying value. The interest rates on the long-term debt are similar to rates the Company would be able to obtain currently in the market.

The Company has patronage investments in other cooperatives and common and preferred stock holdings in privately held entities. There is no market for their patronage credits or the entity’s common and preferred holdings, and it is impracticable to estimate the fair value of the Company’s investments. These investments are carried on the consolidated balance sheet at original cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

Note 15 -Related Party Transactions

The Company has equity investments in Prairie AquaTech, LLC, Prairie AquaTech Manufacturing, LLC and Priarie AquaTech Investments, LLC. The Company sold soybean products to Prairie AquaTech, LLC and Prairie AquaTech Manufacturing, LLC totaling $11,567,830, $17,583,144, and $7,333,479 during the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023 and 2022, Prairie AquaTech, LLC and Prairie AquaTech Manufacturing, LLC owed the Company $1,216,699 and $1,433,551, respectively.

Note 16 -Business Credit Risk and Concentrations

The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to certain limits. At December 31,

2023 and 2022, the Company had approximately $34,116,000 and $386,000, respectively, in excess of FDIC insured limits. The Company has not experienced any losses in such accounts.

The Company also grants credit to customers throughout the United States and Canada. The Company evaluates each customer’s credit worthiness on a case-by-case basis. Accounts receivable are generally unsecured. These receivables were $43,548,706 and $43,517,754 at December 31, 2023 and 2022, respectively.

Soybean meal sales accounted for approximately 51%,48%, and 55% of total revenues for the years ended December 31, 2023, 2022, and 2021, respectively. Soybean oil sales represented approximately 45%,49%, and 41% of total revenues for the years ended December 31, 2023, 2022, and 2021, respectively.

Net revenue by geographic area for the years ended December 31, 2023, 2022, and 2021 are as follows:

Note 17 -Members' Equity

A minimum of 2,500 capital units is required for an ownership interest in the Company. Such units are subject to certain transfer restrictions. The Company retains the right to redeem the units at the greater of $0.20 per unit or the original purchase price less cumulative distributions through the date of redemption in the event a member attempts to dispose of the units in a manner not in conformity with the Operating Agreement, if a member becomes a holder of less than 2,500 units, or if a member becomes an owner (directly or indirectly) of more than 10% of the issued and outstanding capital units. Earnings, losses and cash distributions are allocated to members based on their percentage of ownership in the Company.

On February 1, 2022, the Company's Board of Managers approved a cash distribution of approximately $36.5 million, or 120.0 cents per capital unit. The distribution was paid in accordance with the Company's operating agreement and distribution policy on February 4, 2022.

Note 18 - Commitments and Contingencies

As of December 31, 2023, the Company had unpaid commitments of approximately $237.2 million for construction and acquisition of property and equipment, all of which is expected to be incurred by December 2025.

From time to time in the ordinary course of our business, we may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual disputes. We carry insurance that provides protection against general commercial liability claims, claims against our directors, officers and employees, business interruption, automobile liability, and workers’ compensation claims. We are not currently involved in any material legal proceedings and are not aware of any potential claims.

Note 19 -Subsequent Events

Except for the event listed below, we evaluated all of our activity and concluded that no subsequent events have occurred that would require recognition in our consolidated financial statements or disclosed in the notes to our consolidated financial statements.

On January 30, 2024, the Company’s Board of Managers declared a cash distribution to its members of approximately $39.5 million. The distribution was issued and paid to members on February 1, 2024 in accordance with the Company's operating agreement and distribution policy.