On August 26, 2020, Highwater Ethanol, LLC (the "Company") and Nelson Baker Biotech Inc. ("Nelson Baker") executed an agreement (the “Construction Agreement”) for the installation of a system to produce 20MGY Hydrous USP Grade Ethanol (the “Project”) which is used in the sanitizer market. The Construction Agreement provides for a fixed price which includes design, engineering and construction management. Nelson Baker will issue monthly applications for payment based on progress. Final payment is due upon final completion of the work. Nelson Baker warrants construction, materials and workmanship to be free from material defects for one year. Highwater may suspend work for a period of not more than 60 days, subject to a potential adjustment in price and contract time, and may terminate for cause after notice and opportunity to cure. Nelson Baker may stop work or terminate if Highwater suspends work for more than 60 days or if Highwater fails to make a payment when due after notice and opportunity to cure. Disputes are subject to mediation and binding arbitration. Highwater expects that construction will commence before the end of this fiscal year and the Project will be completed during the second fiscal quarter of 2021.