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, 2024, 2023, and 2022

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, 2024 and 2023, and the related consolidated statements of operations, changes in members’ equity, and cash flows, for the years ended December 31, 2024, 2023, and 2022, 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, 2024 and 2023, and the results of its operations and its cash flows for the years ended December 31, 2024, 2023 and 2022, 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, 2 and 10 in the accompanying financial statements, the fair value measurements 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 adjustments. Fair values for sales contracts are adjusted for location and quality differences (basis adjustments) 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, 2024 for inventories was $45 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.

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 consolidated 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 28, 2025

December 31, 2024 and 2023

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.

Effective September 30, 2023, the Company began consolidating the financial accounts of High Plains Processing, LLC, HPP SD Holdings, LLC, and High Plains Partners, LLC—entities that were previously unconsolidated—into its financial statements. This consolidation followed the Company’s management agreement with the new processing facility and its ability to appoint a majority of the board members for each entity. Together with other investors, the Company has committed $244.0 million to construct a new multi-seed crush facility near Mitchell, South Dakota, with completion expected by late 2025.

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. All significant intercompany accounts and transactions have been eliminated in consolidation.

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.These cash balances regularly exceed amounts insured by the Federal Deposit Insurance Corporation; however, the Company does not believe it is exposed to any significant credit risk on these balances.

Receivables and Credit Policies

Trade accounts receivable are presented at original invoice amount, net of the allowance for credit losses. Trade accounts receivable are uncollateralized customer obligations due under normal trade terms generally requiring payment within thirty to sixty days from the invoice date. Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms. Payments of accounts receivable are allocated to the specific invoices identified on the customer's remittance advice or, if unspecified, are applied to the earliest unpaid invoices. The Company's accounts receivable as of January 1, 2023 was $43,517,754.

The carrying amount of trade receivables is reduced by an allowance for credit loss that reflects management's best estimate of the amounts that will not be collected. Management regularly reviews trade receivable balances and based on an assessment of current creditworthiness and historical write-off experience, adjusted for various industry and regional data and current expectations of future credit losses, estimates the portion, if any, of the balance that will not be collected. Recoveries of trade receivables previously written off are recognized when received. The valuation allowance was determined to be immaterial as of December 31, 2024 and 2023.

Inventories and commodity derivative instruments

The Company’s operating results can be impacted by fluctuations in commodity prices. When the Company enters into commodity purchase or sales commitments, it is exposed to risks related to price changes, as well as performance factors such as delivery, quality, quantity, and shipment timing. If market prices decrease, the Company may face losses on the market value of inventory and purchase contracts with fixed or partially fixed prices. To manage this risk, the Company uses futures and options contracts through regulated commodity exchanges as part of its trading strategy, typically taking offsetting positions to mitigate the risk.

The Company also uses interest rate swaps, caps, and floors through regulated commodity exchanges to manage the risk of loss from potential increases in interest rates on variable-rate debt. Unrealized gains and losses on these instruments are recognized in earnings immediately.

All of the Company’s derivatives are classified as non-hedge derivatives. While these instruments may serve as effective economic hedges for specific risks, they are not designated as, nor accounted for as, hedging instruments.

Commodity derivative transactions, as well as finished goods (soybean meal, oil, refined oil, and hulls) and raw materials (soybeans), are valued at estimated market value, which approximates net realizable value based on their commodity characteristics, widely available markets, and pricing mechanisms. These inventories and commodity derivative instruments are priced in active markets, can be sold without significant further processing, and have predictable and minimal disposal costs. Changes in the fair values of these inventories and commodity derivative instruments are recognized in earnings as part of the cost of products sold in the consolidated statements of operations. This accounting policy is consistent with the guidelines outlined in the 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 the lower of cost or net realizable value.

Investments

The Company measures its equity investments at cost less any impairment plus or minus observable price changes in orderly transactions since these investments do not have readily determinable fair values and does not have significant influence over the invested.

The Company invested $0 in cash and an additional $3,170,307, $1,436,420 and $1,436,420 of soybean meal in 2024, 2023, and 2022 respectively, to be used in the entity's operations.

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.

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 capitalized interest on major construction projects in progress of approximately $118,306, $0, and $0 for the years ending December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024 and 2023, the Company has approximately $15.7 million and $0, respectively, in payables related to the construction of the facility in Mitchell, South Dakota. These construction payables are classified as non-current liabilities due to management's intent and ability to settle these liabilities using the Company’s long-term credit facilities.

The Company reviews its long-lived assets for impairment whenever events indicate that the carrying amount of an asset group may not be recoverable. If impairment indicators are present and the undiscounted future cash flows is less than the carrying amount of the asset group, 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, 2024, 2023, and 2022.

Leases

The Company accounts for leases in accordance with ASC Section 842, Leases ("ASC 842"), which requires lessees to recognize the following at the commencement date for all leases (except short-term leases): (1) a lease liability, representing the lessee’s obligation to make lease payments, measured using a discounted cash flow approach; and (2) a “right of use” asset, which reflects the lessee’s right to use the specified asset for the lease term. For additional details, refer to Note 6.

Accrued commodity purchases

Accrued commodity purchases refer to commodities for which the Company has taken ownership and possession, but the final purchase price has not yet been fully determined. If the futures and basis components remain unpriced, this is classified as a delayed price payable. If the futures component is unpriced but the basis has been set, it is referred to as a basis payable. The unpriced portion of these payables is subject to changes in the fair value of the underlying commodity, which is based on quoted prices on commodity exchanges (or basis levels).

Debt issuance costs

Debt issuance costs represent the expenses incurred to secure debt financing, including all related fees. These costs are amortized as interest expense over the duration of the associated financing, using the straight-line method, which is an approximation of the effective interest rate method. The amortization of these deferred financing costs is included in interest expense in the consolidated statements of operations. As of December 31, 2024, unamortized deferred financing costs were approximately $2.5 million, recorded as a reduction of long-term debt in the consolidated balance sheets. As of December 31, 2023, unamortized deferred financing costs of approximately $2.5 million, were recorded as prepaid expenses and other assets on the consolidated balance sheets, due to the absence of outstanding long-term debt at that time.

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.

Contract liabilities

Contract liabilities relate to advance payments from customers for goods and services the Company has yet to provide. These customer prepayments totaled $10,524,222 and $737,503 as of December 31, 2024 and 2023, respectively. The Company recognized $667,558 of the $737,503 balance as of December 31, 2023 as revenue during the year ended December 31, 2024. All of the $1,074,059 balance as of December 31, 2022 was recognized as revenue during the year ended December 31, 2023.

Disaggregation of Revenues

The following table presents a disaggregation of revenue from contracts with customers for the years ended December 31, 2024, 2023, and 2022, by product type:

Revenue by geographic area for the years ended December 31, 2024, 2023, and 2022 are as follows:

Advertising costs

Advertising and promotion costs are expensed as incurred. The Company incurred $65,000, $115,000, and $96,000, of advertising costs in the years ended December 31, 2024, 2023, and 2022, 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.

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 files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Management has evaluated the Company's tax positions under the Financial Accounting Standards Board issued guidance on accounting for uncertainty in income taxes and concluded that the Company had taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. Generally, the Company is no longer subject to income tax examinations by the U.S. federal, state or local authorities beyond three years for jurisdictions in which they file. The Company will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred.

Segment Reporting

Operating segments are defined as parts of an organization for which distinct financial information is available and regularly reviewed by the chief operating decision maker (CODM) or the decision-making group to guide resource allocation and performance assessment. The Company has identified one reportable business segment: the production and marketing of meal and oil derived from the grain production process. The CODM, which is the Company's Chief Executive Officer, evaluates the overall financial performance of the Company when making operational decisions. Net income is used by the CODM to assess returns on segment assets and to determine whether profits should be reinvested into the segment, directed to other areas of the business (such as acquisitions), or distributed as dividends. Additionally, net income serves as a tool for monitoring budgeted versus actual results. The CODM also leverages net income for competitive analysis, comparing the Company’s performance to that of its competitors. Both the competitive analysis and the budget monitoring process are critical for evaluating segment performance and setting management compensation.

Recent accounting pronouncements

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

Note 2 -Inventories

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

Note 3 -Property and Equipment

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

Depreciation of property and equipment amounts to $6,479,614, $5,830,587, and $5,558,143 for the years ended December 31, 2024, 2023, and 2022, respectively.

As of December 31, 2024, the Company had unpaid commitments of approximately $156.9 million for construction and acquisition of property and equipment and is scheduled to be completed by the fourth quarter of 2025.

Note 4 -Notes Payable - Seasonal Loan

Prior to the amendment to the credit agreement as described in Note 13 - Subsequent events, the Company had entered into a revolving credit agreement with a lending institution which expires on March 15, 2025. 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 (6.56% at December 31, 2024). The Company pays a 0.20% annual commitment fee on any funds not borrowed. There wereno advances outstanding at December 31, 2024 and 2023. The remaining available funds to borrow under the terms of the revolving credit agreement were $85.0 million as of December 31, 2024.

Beginning July 1, 2025, the credit facilities agreement will provide the Company a revolving seasonal loan which expires on September 1, 2026. The purpose of the credit agreement is to finance the operating needs of High Plains Processing, LLC. Under this agreement, the Company could borrow up to $85.0 million, and advances on the revolving credit agreement are secured. Interest accrues at a variable rate (7.76% at December 31, 2024). The Company pays a 0.20% annual commitment fee on any funds not borrowed. There were no advances outstanding at December 31, 2024 and 2023.

Note 5 -Long-Term Debt

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

Prior to the amendment to the credit agreement as described in Note 13 - Subsequent events, the Company had a credit agreement with a lending institution that includes a revolving term loan, note payable, and seasonal loan. The credit agreements is secured by substantially all business assets of South Dakota Soybean Processors, LLC.

The revolving term loan was for up to $12.0 million and 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. Interest accrues under the agreement at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin. The interest rate as of December 31, 2024 was 6.56%. The Company pays a 0.40% annual commitment fee on any funds not borrowed. There were approximately $10.2 million in remaining commitments available to borrow on the revolving term loan as of December 31, 2024.

The note payable provided borrowing up to $90.0 million until October 1, 2024 to finance the Company's investment in High Plains Partners, LLC. The Company will make semi-annual payments of $4.5 million plus interest beginning October 20, 2024 until the note's maturity on March 20, 2028. Interest accrues under the agreement at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin. The interest rate as of December 31, 2024 was 6.56%.

The Company has a credit facilities agreement with a lending institution that includes a delayed-draw term loan, a revolving term loan, and a revolving seasonal loan. The credit facilities agreement is secured by substantially all business assets of the High Plains Processing, LLC.

The delayed-draw term loan provided borrowing up to $254.0 million until March 31, 2026 to finance the construction of the operating facility in Mitchell, South Dakota. The Company will make quarterly principal payments of $4.5 million plus interest beginning six months after the outside completion date as defined within the agreement. The quarterly principal payments will increase each year by $1.0 million on the anniversary date. The delayed-draw term loan matures on December 31, 2029. Interest accrues under the agreement at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin. The interest rate as of December 31, 2024 was 7.76%. The Company pays a 0.50% annual commitment fee on any funds not borrowed. There were approximately $235.3 million available to borrow on the delayed draw term loan as of December 31, 2024.

The revolving term loan was for up to $40.0 million. The revolving term loan matures on December 31, 2029. Interest accrues under the agreement at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin. The interest rate as of December 31, 2024 was 7.76%. The Company pays a 0.50% annual commitment fee on any funds not borrowed. There were $40.0 million in remaining commitments available to borrow on the revolving term loan as of December 31, 2024.

Under the agreements, the Company is subject to compliance with standard financial covenants and the maintenance of certain financial ratios that limits distributions.

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

Note 6 -Operating Leases

The Company has several operating leases for railcars, machinery and equipment, and storage facilities. 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.These leases have terms ranging from 3-12 years and may include renewal terms. The renewal options are not included in the measurement of the right of use assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods. The Company does not have lease arrangements with residual value guarantees, sale-leaseback terms or material restrictive covenants. The Company does not have any material finance lease obligations nor sublease agreements.

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, 2024, 2023, and 2022 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, 2024:

The following is a maturity analysis of the undiscounted cash flows of the operating lease liabilities as of December 31, 2024:

Note 7 -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 $256,000, $313,000, and $305,000 for the years ended December 31, 2024, 2023, and 2022, 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 $894,000, $3,521,000, and $3,246,000 for the years ended December 31, 2024, 2023, and 2022, 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 $82,000, $42,000 and $12,000 related to this agreement during the years ended December 31, 2024, 2023 and 2022, respectively, related to this agreement.

Note 8 -Cash Flow Information

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

Note 9 -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. Futures and options contracts, along with margin deposit, are with a single counterparty and are subject to a right of offset. As a result, these items are netted on the balance sheet, regardless of their position. In contrast, forward contracts are with multiple counterparties and do not have a right of offset. Therefore, these contracts are reported at their gross amounts on the balance sheet. These contracts are recorded on the Company’s consolidated balance sheets at fair value as discussed in Note 10, Fair Value.

Derivatives not designated as hedging instruments at December 31, 2024 and 2023 were as follows:

During the years ended December 31, 2024, 2023, and 2022, net realized and unrealized gains (losses) on derivative transactions were recognized in the consolidated statements of operations as follows:

Note 10 -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.

Estimated fair values of inventories and provisionally priced contracts stated at market are based on exchange-quoted prices, adjusted for differences in local markets and quality, referred to as basis. Market valuations for the Company’s inventories are adjusted for location and quality (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 basis adjustments are generally determined using inputs from competitor and broker quotations or market transactions and are considered observable. Basis adjustments are impacted by specific local supply and demand characteristics at each facility and the overall market. Factors such as substitute products, weather, fuel costs, contract terms, and futures prices also impact the movement of these basis adjustments.

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 11 -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.

Note 12 - Commitments and Contingencies

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 13 -Subsequent Events

Except for the events 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 February 4, 2025, the Company’s Board of Managers declared a cash distribution to its members of approximately $7.6 million. The distribution was issued and paid to members on February 6, 2025 in accordance with the Company's operating agreement and distribution policy.

On March 17, 2025, the Company entered into an Amended and Restated Credit Agreement ("Restated Credit Agreement") with our lender, CoBank, ACB of Greenwood Village, Colorado, which amends and restates our existing Credit Agreement dated September 20, 2023, our revolving term note dated March 2, 2023. The Restated Credit Agreement includes several key changes. The principal available on the seasonal loan decreases from $85.0 million to $70.0 million, and the maturity date is extended to December 1, 2025. The revolving term loan limit increases from $10.2 million to $65.0 million, and starting on March 20, 2025, the amount available for borrowing will be reduced by $3.25 million every six months until the loan matures on March 20, 2028. Additionally, the note payable for the Company’s investment in our subsidiary, High Plains Partners, LLC, the proceeds of which were contributed for the construction of the Mitchell facility, has been consolidated into the revolving term loan.

The Restated Credit Agreement also revises certain standard financial covenants, including the maintenance of specific financial ratios, limitations on certain investments, and restrictions on distributions.