SOUTH DAKOTA SOYBEAN PROCESSORS LLC

Previous wording

The information in this quarterly report on Form 10-Q for the six-month period ended June 30, 2025, (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contains “forward-looking statements” that deal with future results, expectations, plans and performance, and should be read in conjunction with the financial statements and Annual Report on Form 10-K for the year ended December 31, 2024. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. Forward-looking statements involve numerous assumptions, risks and uncertainties. Actual results or actual business or other conditions may differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are identified in our Form 10-K for the year ended December 31, 2024.

Current wording

The information in this quarterly report on Form 10-Q for the nine-month period ended September 30, 2025, (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contains “forward-looking statements” that deal with future results, expectations, plans and performance, and should be read in conjunction with the financial statements and Annual Report on Form 10-K for the year ended December 31, 2024. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. Forward-looking statements involve numerous assumptions, risks and uncertainties. Actual results or actual business or other conditions may differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are identified in our Form 10-K for the year ended December 31, 2024.

Previous wording

During the six-months ended June 30, 2025, we recorded a $8.1 million decline in net income compared to the same period in 2024. The primary cause of the decline was weaker product values for both soybean meal and soybean oil.

Current wording

During the nine-months ended September 30, 2025, we recorded net income attributed to the Company of $14.1 million compared to $11.5 million for the same period in 2024. Although gross profit is up compared to the same period in 2024, processing margins has declined. The decline primarily reflects a continuation of trends in 2024, characterized by weaker product values for soybean meal and soybean oil.

Previous wording

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased by $0.2 million for the three months ended June 30, 2025, compared to the same period in 2024. The increase was primarily due to higher administrative costs related to our new High Plains Processing facility. Expenses increased due to increased in administrative costs resulting from getting closer to the facility's start up in October 2025.

Current wording

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased by $0.6 million for the three months ended September 30, 2025, compared to the same period in 2024. The increase was primarily due to higher administrative costs related to the High Plains Processing plant. Higher administrative expenses reflect intensified pre‑startup activities including staffing, administrative support, facility setup, and related overhead. We anticipate administrative expenses will continue to rise in the near term as the plant enter its commissioning and operational phase.

Previous wording

Interest Expense – Interest expense decreased by $692,000, or 36.1%, during the three months ended June 30, 2025, compared to the same period in 2024. The decrease in interest expense was principally due to a decrease in borrowings from our credit facilities (excluding loans by our subsidiary, High Plains Processing), with an average debt level of $61.3 million during the three months ended June 30, 2025, compared to $90.3 million during the same period in 2024. Additionally, approximately $2.3 million in interest costs related to the construction of the High Plains Processing facility were capitalized during the six months ended June 30, 2025, compared to $0 in the same period of 2024.

Current wording

Interest Expense – Interest expense decreased by $405,000, or 25.0%, during the three months ended September 30, 2025, compared to the same period in 2024. The decrease in interest expense was principally due to a decrease in borrowings from our credit facilities (excluding loans by our subsidiary, High Plains Processing), with an average debt level of $56.9 million during the three months ended September 30, 2025, compared to $72.9 million during the same period in 2024. Additionally, approximately $3.3 million in interest costs related to the construction of the High Plains Processing plant were capitalized during the three months ended September 30, 2025, compared to none in the same period of 2024.

Previous wording

Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, decreased $1.3 million during the three months ended June 30, 2025, compared to the same period in 2024. The decline was primarily driven by an approximate $1.3 million decrease in interest income earned on investment proceeds held by our subsidiaries in connection with the equity financing of the High Plains Processing plant.

Current wording

Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, decreased $0.8 million during the three months ended September 30, 2025, compared to the same period in 2024. The decline was primarily the result of a $0.9 million decrease in interest income earned on investment proceeds held by our subsidiaries in connection with the equity financing of the High Plains Processing plant.

Previous wording

Net Income/Loss – During the three-month period ended June 30, 2025, we generated a net loss attributed to the Company of $1.0 million compared to a net income of $6.0 million for the same period in 2024. The $7.0 million decrease was primarily attributable to decreased gross margins and interest income.

Current wording

Net Income/Loss – During the three-month period ended September 30, 2025, we generated a net income of $10.8 million compared to a net income of $23,000 for the same period in 2024. The $10.8 million increase was primarily attributable to an increase in gross margins.

Previous wording

Revenue – Revenue decreased by $69.4 million, or 23.3%, for the six-month period ended June 30, 2025, compared to the same period in 2024 due to decreases in the average sales price of soybean products and in production. The average soybean meal prices declined by 17.0% from 2024 due to an increase in U.S. soybean crushing capacity in 2024. The average price of soybean oil decreased 17.5% during the six months ended June 30, 2025, compared to the same period in 2024, due to a decrease in demand. Soybean oil demand from the energy sector dropped dramatically in 2024 as refining margins for biodiesel and renewable diesel producers came under intense pressure from overproduction which led to production slowdowns at some locations. In addition, imports of used cooking oil and other feedstocks flooded the market, contributing to an oversupply and adversely affecting soybean oil sales.

Current wording

Revenue – Revenue decreased by $70.2 million, or 16.4%, for the nine-month period ended September 30, 2025, compared to the same period in 2024 due a decrease in the average sales price of soybean products and in production. The average soybean meal price declined by 17.9% from 2024 due to an increase in U.S. soybean crushing capacity in 2024. The average price of soybean oil decreased 9.3% during the nine months ended September 30, 2025, compared to the same period in 2024, due to a decrease in demand. Soybean oil demand from the energy sector dropped dramatically in 2024 as refining margins for biodiesel and renewable diesel producers came under intense pressure from overproduction leading to production slowdowns at some locations. In addition, imports of used cooking oil and other feedstocks flooded the market, contributing to an oversupply and adversely affecting soybean oil sales.

Previous wording

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased approximately $269,000, or 8.6%, during the six-month period ended June 30, 2025, compared to the same period in 2024, due to an increase in professional and related costs associated with the start-up of the High Plains Processing plant.

Current wording

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased approximately $889,000, or 20.3%, during the nine-month period ended September 30, 2025, compared to the same period in 2024, due to an increase in professional and related costs associated with the start-up of the High Plains Processing plant.

Previous wording

Interest Expense – Interest expense decreased by $1.0 million, or 29.5%, during the six months ended June 30, 2025, compared to the same period in 2024. The decrease in interest expense was principally due to a decrease in borrowings from our credit facilities (excluding loans by our subsidiary, High Plains Processing), with an average debt level of $67.8 million during the three months ended June 30, 2025, compared to $82.1 million during the same period in 2024. Additionally, approximately $3.4 million in interest costs related to the construction of the High Plains Processing facility were capitalized during the six months ended June 30, 2025, compared to $0 in the same period of 2024.

Current wording

Interest Expense – Interest expense decreased by $1.4 million, or 28.0%, during the nine months ended September 30, 2025, compared to the same period in 2024. The decrease in interest expense was principally due to a decrease in borrowings from our credit facilities (excluding loans by our subsidiary, High Plains Processing), with an average debt level of $66.2 million during the nine-month period ended September 30, 2025, compared to $77.1 million during the same period in 2024. Additionally, approximately $6.7 million in interest costs related to the construction of the High Plains Processing plant were capitalized during the nine months ended September 30, 2025, compared to none in the same period of 2024.

Previous wording

Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, decreased $2.1 million during the six-month period ended June 30, 2025, compared to the same period in 2024. The increase in other non-operating income was due to a $2.2 million increase in interest income which we received from the deposit of investment proceeds received by our subsidiaries in connection with their equity financing of the High Plains Processing plant.

Current wording

Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, decreased $2.9 million during the nine-month period ended September 30, 2025, compared to the same period in 2024. The decrease in other non-operating income was due to a $3.5 million decrease in interest income which we received from the deposit of investment proceeds received by our subsidiaries in connection with their equity financing of the High Plains Processing plant.

Previous wording

Net Income/Loss – During the six-month period ended June 30, 2025, we generated a net income of $3.4 million, compared to $11.5 million for the same period in 2024. The $8.1 million decrease was primarily attributable to decreased gross margins and decrease in interest income.

Current wording

Net Income/Loss – During the nine-month period ended September 30, 2025, we generated a net income of $14.2 million, compared to $11.5 million for the same period in 2024. The $2.7 million increase was primarily attributable to an increase in gross margins, partially offset by a decrease in interest income.

Previous wording

Our primary sources of liquidity are cash generated from operations and borrowings from our two revolving lines of credit, which are discussed in the section titled “Indebtedness.” As of June 30, 2025, we had working capital, defined as current assets less current liabilities, of approximately $38.1 million, compared to $107.8 million on June 30, 2024. Working capital decreased between periods primarily due to expenditures related to the construction and development of the High Plains Processing plant, of which we have a controlling ownership interest through our subsidiaries.

Current wording

Our primary sources of liquidity are cash generated from operations and borrowings from our two revolving lines of credit, which are discussed in the section titled “Indebtedness.” As of September 30, 2025, we had working capital, defined as current assets less current liabilities, of approximately $34.2 million, compared to $59.1 million on September 30, 2024. Working capital decreased between periods primarily due to expenditures related to the construction and development of the High Plains Processing plant, of which we have a controlling ownership interest through our subsidiaries.

Previous wording

The $34.9 million decrease in cash flows used for operating activities was largely due to a $13.8 million increase in inventories, a decrease in contract liabilities of approximately $8.0 million and by a decrease in net income of approximately $11.1 million.

Current wording

The $38.3 million change in cash flows provided by (used for) operating activities was largely due to a $36.8 million increase in inventories and a decrease in contract liabilities of approximately $10.2 million, offset by a $14.6 million increase in accrued commodity purchases,

Previous wording

The $53.0 million increase in cash flows used for investing activities during the six-month period ended June 30, 2025, compared to the same period in 2024, was due to an increase in expenditures for purchases of various property and equipment used for the construction and development of the High Plains Processing plant.

Current wording

The $55.7 million increase in cash flows used for investing activities during the nine-month period ended September 30, 2025, compared to the same period in 2024, was due to an increase in expenditures for purchases of various property and equipment used for the construction and development of the High Plains Processing plant.

Previous wording

The $29.7 million increase in cash flows provided by financing activities was principally due to a decrease in proceeds from issuance of new capital units in our consolidated entities offset by an increase in borrowings with our lender. During the six months ended June 30, 2024, our subsidiaries received $57.5 million in investment proceeds in connection with their equity financing, which were subsequently contributed for the construction and development of the High Plains Processing plant. Net proceeds from seasonal borrowings and long-term debt were $141.5 million during the six months ended June 30, 2025, compared to $88.2 million during the same period in 2024. Partially offsetting the decrease was a $31.8 million reduction in cash distributions to members during the six months ended June 30, 2025, compared to the same period in 2024.

Current wording

The $80.7 million increase in cash flows provided by financing activities was principally due to an increase in borrowings with our lender and a decrease in distributions paid to our members, offset by a decrease in proceeds from issuance of new capital units in our consolidated entities. Net proceeds from seasonal borrowings and long-term debt were $151.9 million during the nine months ended September 30, 2025, compared to $55.0 million during the same period in 2024. There was a $31.8 million reduction in cash distributions to members during the nine months ended September 30, 2025, compared to the same period in 2024.This increase was partially offset by a decrease in proceeds from the issuance of new capital units in our consolidated entities in connection with the equity financing of the High Plains Processing plant. During the nine months ended September 30, 2024, our subsidiaries received $57.5 million in investment proceeds in connection with their equity financing, which were subsequently contributed for the construction and development of the new plant.

Previous wording

We hold various credit facilities with CoBank, our primary lender, to meet the short and long-term needs of our operations. The first credit line is a revolving long-term loan. Under this loan, we may borrow funds, as needed, up to the credit line maximum, or $65.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line. The available credit line decreases by $3.25 million every six months until the credit line’s maturity on March 20, 2030, at which time a balloon payment for the remaining balance is due. We pay a 0.40% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan was $61.8 million and $50.5 million as of June 30, 2025 and December 31, 2024, respectively. Under this loan, there were no additional funds available to borrow as of June 30, 2025.

Current wording

We hold various credit facilities with CoBank, our primary lender, to meet the short and long-term needs of our operations. The first credit line is a revolving long-term loan. Under this loan, we may borrow funds, as needed, up to the credit line maximum, or $65.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line. The available credit line decreases by $3.25 million every six months until the credit line’s maturity on March 20, 2030, at which time a balloon payment for the remaining balance is due. We pay a 0.40% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan was $34.6 million and $50.5 million as of September 30, 2025 and

Previous wording

The second credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance our operating needs. We may borrow up to $70.0 million until the loan's maturity on December 1, 2025. We pay a 0.20% annual commitment fee on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of June 30, 2025 and December 31, 2024, the principal balance outstanding on this credit line was $4.6 million and $0, respectively. Under this loan, there were $65.4 million of additional funds available to borrow as of June 30, 2025.

Current wording

The second credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance our operating needs. We may borrow up to $70.0 million until the loan's maturity on December 1, 2025. We pay a 0.20% annual commitment fee on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of September 30, 2025 and December 31, 2024, there were no principal balances outstanding on this credit line. Under this loan, $70.0 million of additional funds were available for borrowing as of September 30, 2025.

Previous wording

The third line of credit is a delayed-draw term loan. Under this loan, our subsidiary may borrow funds, as needed up to $254.0 million until March 31, 2026. Principal payments of $4.5 million are made quarterly beginning six months after the completion date of the High Plains Processing facility. The quarterly principal payments will increase by $1.0 million on the anniversary date and continue until the maturity date of December 31, 2029. Our subsidiary pays a 0.50% annual commitment fee on any funds not borrowed;. The principal balance outstanding on this note was $131.8 million and $18.7 million as of June 30, 2025 and December 31, 2024, respectively. Under this note, there were $122.2 million of funds available to borrow as of June 30, 2025.

Current wording

The third line of credit is a delayed-draw term loan. Under this loan, our subsidiary may borrow funds, as needed up to $254.0 million until March 31, 2026. Principal payments of $4.5 million are made quarterly beginning six months after the completion date of the High Plains Processing plant. The quarterly principal payments will increase by $1.0 million on the anniversary date and continue until the maturity date of December 31, 2029. Our subsidiary pays a 0.50% annual commitment fee on any funds not borrowed. The principal balance outstanding on this note was $171.3 million and $18.7 million as of September 30, 2025 and December 31, 2024, respectively. Under this note, $82.7 million of additional funds were available for borrowings as of September 30, 2025.

Previous wording

The fourth credit line is a revolving long-term loan. Under this loan, our subsidiary may borrow funds, as needed, up to the credit line maximum, or $40.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line until the credit line’s maturity on December 31, 2029 at which time a balloon payment for the remaining balance is due. Our subsidiary pays a 0.50% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan was $0 as of June 30, 2025 and December 31, 2024. Under this loan, there were $40.0 million of additional funds available to borrow as of June 30, 2025.

Current wording

The fourth credit line is a revolving long-term loan. Under this loan, our subsidiary may borrow funds, as needed, up to the credit line maximum, or $40.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line until the credit line’s maturity on December 31, 2029 at which time a balloon payment for the remaining balance is due. Our subsidiary pays a 0.50% annual commitment fee on any funds not borrowed. The principal balance outstanding on this revolving term loan was $0 as of September 30, 2025 and December 31, 2024. Under this loan, $40.0 million of additional funds were available for borrowings as of September 30, 2025.

Previous wording

The last credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance the operating needs of the High Plains Processing facility. Beginning July 1, 2025, our subsidiary may borrow up to $85.0 million until the loan's maturity on September 1, 2026. A 0.20% annual commitment fee is paid on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of June 30, 2025 and December 31, 2024, there was no principal balance outstanding on this credit line.

Current wording

The last credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance the operating needs of the High Plains Processing facility. Beginning July 1, 2025, our subsidiary may borrow up to $85.0 million until the loan's maturity on September 1, 2026. A 0.20% annual commitment fee is paid on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. The principal balance outstanding outstanding on this credit line was $2.7 million and $0 as of September 30, 2025 and December 31, 2024, respectively. Under this loan, $82.3 million of additional funds were available for borrowing as of September 30, 2025.

Previous wording

The revolving, seasonal and delayed-draw term loans with CoBank are set up with a variable rate option. The variable rate is set daily by CoBank. We also have a fixed rate option on all three loans, allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the loans was range between 6.54% and 7.44% as of June 30, 2025.

Current wording

The revolving, seasonal and delayed-draw term loans with CoBank are set up with a variable rate option. The variable rate is set daily by CoBank. We also have a fixed rate option on all five loans, allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the loans was between 6.37% and 7.27% as of September 30, 2025.

Previous wording

On March 19,2025, the State of South Dakota Department of Transportation agreed to loan the Davison Regional Railroad Authority $12.6 million for purposes of making improvements to the railway infrastructure at the operating facility near Mitchell, South Dakota. In consideration of this secured loan, agreed to provide a guarantee to the State of South Dakota Department of Transportation for the full amount of the loan, plus 2.0% interest. This guarantee was converted into a direct obligation of ours on May 27, 2025, when we received the entire loan proceeds and assumed responsibility for the annual principal and interest payments of $987,500, which begins on October 1, 2026. These payments will continue through October 1, 2032, at which time a final balloon payment will be due for the remaining unpaid principal and any accrued interest.

Current wording

In March 2025, the State of South Dakota Department of Transportation agreed to loan the Davison County Regional Railroad Authority $12.6 million for purposes of making improvements to the railway infrastructure at the High Plains Processing plant. In consideration of this secured loan, we agreed to provide a guarantee to the State of South Dakota Department of Transportation for the full amount of the loan, plus 2.0% interest. This guarantee was converted into a direct obligation of ours in May 2025, when we received the entire loan proceeds and assumed responsibility for the annual principal and interest payments of $987,500, which begins on October 1, 2026. These payments will continue through October 1, 2032, at which time a final balloon payment will be due for the remaining unpaid principal and any accrued interest.