Results of Operations for the Years Ended September 30, 2020 and 2019



  The following table shows the results of our operations and the percentages of
revenues, cost of goods sold, general and administrative expenses and other
items to total revenues in our statements of operations for the years ended
September 30, 2020 and 2019:
                                                               Year Ended                                      Year Ended
                                                           September 30, 2020                              September 30, 2019
Statement of Operations Data                          Amount               

   %                      Amount                      %
Revenues                                         $  94,175,793                100.00          $       103,697,726                100.00
Cost of Goods Sold                                  90,134,689                 95.71                  104,690,474                100.96
Gross Profit (Loss)                                  4,041,104                  4.29                     (992,748)                (0.96)
General and Administrative Expenses                  4,329,824                  4.60                    3,135,825                  3.02
Operating (Loss)                                      (288,720)                (0.31)                  (4,128,573)                (3.98)
Other Income (Expense)                                 295,308                  0.31                      385,884                  0.37
Net Income (Loss)                                $       6,588                  0.01          $        (3,742,689)                (3.61)



  The following table shows additional data regarding production and price
levels for our primary inputs and products for the years ended September 30,
2020 and 2019:
                                                              Year Ended                   Year Ended
                                                          September 30, 2020           September 30, 2019
Production:
 Ethanol sold (gallons)                                             56,510,517                   63,401,876
 Industrial ethanol sold (gallons)                                   1,130,347                            -
 Dried distillers grains sold (tons)                                    91,073                       98,758
 Modified distillers grains sold (tons)                                109,691                      127,310
Corn oil sold (pounds)                                              15,385,430                   10,697,030

Revenues:


 Ethanol average price per gallon (net of
hedging)                                                $              1.20          $              1.27
 Industrial ethanol average price per gallon                           3.27                            -
 Dried distillers grains average price per ton                       128.63                       135.15
 Modified distillers grains average price per ton                     59.20                        52.73
Corn oil average price per pound                                       0.24                         0.23
Primary Inputs:
 Corn ground (bushels)                                           21,346,380                   22,641,392
Natural gas (MMBtu)                                               1,425,450                    1,630,853
Costs of Primary Inputs:
 Corn average price per bushel (net of hedging)         $              2.98          $              3.56
Natural gas average price per MMBtu (net of                            2.06                         2.42

hedging)

Other Costs (per gallon of ethanol sold):


 Chemical and additive costs                            $             0.077          $             0.080
 Denaturant cost                                                      0.030                        0.034
 Electricity cost                                                     0.042                        0.038
 Direct labor cost                                                    0.067                        0.062




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Revenue

  For our 2020 fiscal year, ethanol sales comprised approximately 76.1% of our
revenues, distillers grains sales comprised approximately 19.4% of our revenues
and corn oil sales comprised approximately 4.0% of our revenues. For our 2019
fiscal year, ethanol sales comprised approximately 77.7% of our revenues,
distillers grains sales comprised approximately 19.3% of our revenues and corn
oil sales comprised approximately 2.5% of our revenues.

  Our total revenue for our 2020 fiscal year was approximately 9.6% less
compared to our 2019 fiscal year, however, our cost of goods sold was less
during our 2020 fiscal year compared to our 2019 fiscal year which resulted in
positive net income during the 2020 period compared to a net loss during the
2019 period.

  Ethanol

  The average price we received per gallon of ethanol sold was approximately
5.5% less during our 2020 fiscal year compared to our 2019 fiscal year. The
ethanol industry struggled during both our 2020 fiscal year and 2019 fiscal year
with lower ethanol prices due to decreased domestic demand. This decreased
domestic demand was due to small refinery waivers from the ethanol use
requirements under the RFS granted by the EPA which reduced the volume of
ethanol which was required to be used in the United States. Early in 2020, lower
oil prices resulted in decreased gasoline and ethanol prices. In addition,
starting in March 2020, social distancing measures resulted in significant
decreases in ethanol demand. Many states instituted social distancing measures
which resulted in less gasoline demand as people stayed home to avoid infection.
While we were able to maintain production due to commitments we had in place
during our second quarter of 2020, we saw a 40% decrease in ethanol demand and a
32% decrease in ethanol price during that time due to the COVID-19 pandemic.
While gasoline demand rebounded during our fourth quarter of 2020, management
expects that recent increases in COVID-19 infections will result in decreased
gasoline demand early in our 2021 fiscal year until an effective vaccine is
widely available. As a result of the decreased gasoline demand, many ethanol
producers have reduced production or have started to diversify their product
offerings. Approximately 3.9% of our ethanol sales were from industrial alcohol
sales made during our 2020 fiscal year due to shortages experienced early in the
COVID-19 pandemic. These shortages may return during our 2021 fiscal year due to
the resurgence of the COVID-19 pandemic. Management expects that these
circumstances will result in additional uncertainty and volatility in the
ethanol market during our 2021 fiscal year.

  We sold approximately 11.1% fewer gallons of ethanol during our 2020 fiscal
year compared our 2019 fiscal year due to significantly lower gasoline demand
due to the COVID-19 social distances measures which were implemented during our
2020 fiscal year. While gasoline demand rebounded later in our 2020 fiscal year,
with recent increases in COVID-19 infections, management anticipates that
gasoline demand will decrease which will have a correspondence impact on ethanol
demand. These factors are expected to result in volatility during our 2021
fiscal year.

  We experienced a gain of approximately $383,000 related to our ethanol
derivative instruments during our 2020 fiscal year which increased our revenue.
We had no soybean oil derivative instruments during our 2020 fiscal year. We
held no ethanol or soybean oil derivative instruments during our 2019 fiscal
year.

  Distillers Grains

  The average price we received for our dried distillers grains during our 2020
fiscal year was approximately 4.8% less than the average price we received
during our 2019 fiscal year primarily due to lower average corn prices during
our 2020 fiscal year which typically impacts distillers grains prices. The
average price we received from our modified distillers grains during our 2020
fiscal year was approximately 12.3% more compared to our 2019 fiscal year due to
stronger local demand for distillers grains. Our modified distillers grains are
primarily sold in our local market. Management anticipates higher distillers
grains prices during our 2021 fiscal year due to the decreased bushels of corn
harvested in the fall of 2020 which is anticipated to result in higher market
corn prices during our 2021 fiscal year. Further, if export demand for
distillers grains increases during our 2021 fiscal year, it could result in
significantly higher distillers grains prices.

  We produced approximately 7.0% fewer tons of dried distillers grains and
approximately 16.4% fewer tons of modified distillers grains during our 2020
fiscal year compared to our 2019 fiscal year due to decreased overall production
during our 2020 fiscal year because of market disruptions from COVID-19. We
significantly reduced production during March and April 2020 which negatively
impacted our production for the year. In addition, we produced more corn oil
during the 2020 period which resulted in a net decrease in the total distillers
grains we produced during the 2020 fiscal year. When we produce more corn oil,
it results in fewer tons of distillers grains produced. We decide whether to
produce dried distillers grains versus modified/wet distillers grains based on
market conditions and the relative cost of producing each form of distillers
grains.
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Management anticipates that distillers grains production will remain at its current mix during our 2021 fiscal year unless distillers grains exports increase significantly which could favor producing more dried distillers grains.

Corn Oil



  The average price we received for our corn oil was approximately 4.0% greater
during our 2020 fiscal year compared to our 2019 fiscal year primarily due to
additional corn oil demand from the biodiesel industry. In addition, due to
reductions in the amount of ethanol produced during our 2020 fiscal year, the
supply of corn oil in the market was lower during our 2020 fiscal year. On
December 17, 2019, Congress renewed the biodiesel blenders' credit retroactively
for 2019 and for a total of five years. This certainty for the biodiesel
blenders' credit has positively impacted demand for corn oil during that time
period which has supported market corn oil prices.

  Our corn oil sales increased by approximately 37.2% during our 2020 fiscal
year compared to our 2019 fiscal year due to increased corn oil production per
bushel of corn we ground. This increase in the amount of corn oil we produced
per bushel of corn we ground was due to a change in chemicals used during the
production process which resulted in more corn oil being extracted. Management
anticipates that corn oil production will continue to be higher during our 2021
fiscal year.

Cost of Goods Sold

  Our cost of goods sold is primarily made up of corn and energy expenses. Our
total cost of goods sold was approximately 14.0% less for our 2020 fiscal year
compared to our 2019 fiscal year due primarily to lower corn and natural gas
costs during our 2020 fiscal year.

Corn Costs



Our cost of goods sold related to corn was approximately 22.5% lower during our
2020 fiscal year compared to our 2019 fiscal year due to lower average corn
costs per bushel along with slightly fewer bushels of corn used during our 2020
fiscal year. Our average cost per bushel of corn used, without including our
derivative instrument gains and losses, was approximately 16.3% lower during our
2020 fiscal year compared to our 2019 fiscal year. Management attributes this
decrease in corn costs to lower corn demand from the ethanol industry during our
2020 fiscal year. However, following the end of our 2020 fiscal year, corn
prices have been increasing due to less corn harvested in the fall of 2020 which
management expects will negatively impact corn prices during our 2021 fiscal
year. Management believes that there will be sufficient corn in our local market
to continue to operate the ethanol plant at capacity during our 2021 fiscal year
but we may experience higher prices in order to purchase the corn we need. Our
corn use decreased by approximately 5.7% during our 2020 fiscal year compared to
our 2019 fiscal year due to decreased overall production at the ethanol plant.
Management anticipates that we will use a comparable amount of corn in the
future provided operating margins remain favorable.

From time to time we enter into forward purchase contracts for our commodity
purchases and sales. At September 30, 2020, we had forward corn purchase
contracts for various delivery periods through March 2021 for a total commitment
of approximately $9.42 million for a total of approximately 2.8 million bushels
of corn. We had a loss of approximately $455,000 related to our corn derivative
instruments which increased our cost of goods sold during our 2020 fiscal year.
We had a gain of approximately $4.4 million related to our corn derivative
instruments during our 2019 fiscal year which decreased our cost of goods sold.
We recognize the gains or losses that result from the changes in the value of
our derivative instruments from corn in cost of goods sold as the changes
occur.  As corn prices fluctuate, the value of our derivative instruments is
impacted, which affects our financial performance.

Natural Gas Costs



  Our total natural gas costs to operate the ethanol plant were lower for our
2020 fiscal year compared to our 2019 fiscal year due primarily to decreased
natural gas costs per MMBtu during the 2020 period. Our average cost per MMBtu
of natural gas was approximately 14.9% lower during our 2020 fiscal year
compared to our 2019 fiscal year. Management believes this decrease in natural
gas costs during our 2020 fiscal year was due to lower energy prices generally
during our 2020 fiscal year. We used approximately the same amount of natural
gas during both our 2020 fiscal year and our 2019 fiscal year. Management
expects that natural gas prices will remain steady during our 2021 fiscal year
unless we experience supply disruptions which impact the amount of natural gas
available in the market, particularly during the winter months when natural gas
demand for heating needs is higher.


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General and Administrative Expenses



  Our general and administrative expense was higher during our 2020 fiscal year
and our 2019 fiscal year due to increased labor and consulting costs related to
the carbon capture and storage project which is designed to decrease the carbon
intensity of our ethanol, making it more valuable in the California fuel market.

Other Income/Expense



  We had more interest income during our 2020 fiscal year compared to our 2019
fiscal year due to having more cash on hand during the 2020 period. Our other
income was lower during our 2020 fiscal year compared to our 2019 fiscal year
due to a lower capital account distribution from RPMG, our marketer.

Results of Operations for the Years Ended September 30, 2019 and 2018



  The following table shows the results of our operations and the percentages of
revenues, cost of goods sold, general and administrative expenses and other
items to total revenues in our statements of operations for the years ended
September 30, 2019 and 2018:
                                                                  Year Ended                                         Year Ended
                                                              September 30, 2019                                 September 30, 2018
Statement of Operations Data                             Amount                      %                      Amount                      %
Revenues                                         $       103,697,726                100.00          $       103,577,061                100.00
Cost of Goods Sold                                       104,690,474                100.96                  106,713,199                103.03
Gross Loss                                                  (992,748)                (0.96)                  (3,136,138)                (3.03)
General and Administrative Expenses                        3,135,825                  3.02                    2,557,189                  2.47
Operating Loss                                            (4,128,573)                (3.98)                  (5,693,327)                (5.50)
Other Income (Expense)                                       385,884                  0.37                      554,156                  0.54
Net Loss                                         $        (3,742,689)                (3.61)         $        (5,139,171)                (4.96)




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  The following table shows additional data regarding production and price
levels for our primary inputs and products for the years ended September 30,
2019 and 2018:
                                                              Year Ended                   Year Ended
                                                          September 30, 2019           September 30, 2018
Production:
 Ethanol sold (gallons)                                             63,401,876                   61,901,487
 Dried distillers grains sold (tons)                                    98,758                      110,497
 Modified distillers grains sold (tons)                                127,310                      107,533
Corn oil sold (pounds)                                              10,697,030                   12,591,310

Revenues:


 Ethanol average price per gallon (net of
hedging)                                                $              1.27          $              1.27
 Dried distillers grains average price per ton                       135.15                       132.62
 Modified distillers grains average price per ton                     52.73                        61.29
Corn oil average price per pound                                       0.23                         0.25
Primary Inputs:
 Corn ground (bushels)                                           22,641,392                   22,088,221
Natural gas (MMBtu)                                               1,630,853                    1,635,138
Costs of Primary Inputs:
 Corn average price per bushel (net of hedging)         $              3.56          $              3.35
Natural gas average price per MMBtu (net of                            2.42                         2.36

hedging)

Other Costs (per gallon of ethanol sold):


 Chemical and additive costs                            $             0.080          $             0.108
 Denaturant cost                                                      0.034                        0.040
 Electricity cost                                                     0.038                        0.043
 Direct labor cost                                                    0.062                        0.066



Revenue

  For our 2019 fiscal year, ethanol sales comprised approximately 78% of our
revenues, distillers grains sales comprised approximately 19% of our revenues
and corn oil sales comprised approximately 3% of our revenues. For our 2018
fiscal year, ethanol sales comprised approximately 76% of our revenues,
distillers grains sales comprised approximately 21% of our revenues and corn oil
sales comprised approximately 3% of our revenues.

  Our total revenue for our 2019 fiscal year was comparable to our 2018 fiscal
year, however, our cost of goods sold was less during our 2019 fiscal year
compared to our 2018 fiscal year which resulted in a smaller net loss during the
2019 period. The ethanol industry continued to struggle with ethanol demand
destruction from EPA policies which limited domestic demand for ethanol along
with foreign trade policies which impacted global distillers grains demand.

Ethanol



  The average price we received per gallon of ethanol sold was the same during
both our 2019 fiscal year and our 2018 fiscal year. The ethanol industry
struggled during both our 2018 fiscal year and 2019 fiscal year with lower
ethanol prices due to decreased domestic demand. This decreased domestic demand
was due to small refinery waivers from the ethanol use requirements under the
RFS granted by the EPA which reduced the volume of ethanol which was required to
be used in the United States.

  Brazil increased its quota of ethanol that can be imported from the United
States before a tariff is imposed which resulted in some additional export
demand. However, China maintained its high ethanol tariffs which essentially
eliminated China as an export market for United States ethanol.

  We sold approximately 2% more gallons of ethanol during our 2019 fiscal year
compared our 2018 fiscal year due to fewer unplanned shutdowns during our 2019
fiscal year.
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We held no ethanol or soybean oil derivative instruments during our 2019 fiscal year. We experienced a gain of approximately $1,800 in our soybean oil derivative instruments during our 2018 fiscal year which increased our revenue.

Distillers Grains



  The average price we received for our dried distillers grains during our 2019
fiscal year was approximately 2% greater than the average price we received
during our 2018 fiscal year primarily due to increased corn prices during our
2019 fiscal year. The average price we received from our modified distillers
grains during our 2019 fiscal year was approximately 14% less compared to our
2018 fiscal year due to weaker local demand for distillers grains. Our modified
distillers grains were primarily sold in our local market.

  We produced approximately 11% fewer tons of dried distillers grains and
approximately 18% more tons of modified distillers grains during our 2019 fiscal
year compared to our 2018 fiscal year due to market factors favoring more
modified distillers grains. We also produced less corn oil which resulted in a
net increase in the total distillers grains we produced during the 2019 fiscal
year. When we produce less corn oil, it results in additional tons of distillers
grains that we produce. We decide whether to produce dried distillers grains
versus modified/wet distillers grains based on market conditions and the
relative cost of producing each form of distillers grains.

Corn Oil



  The average price we received for our corn oil was approximately 8% less
during our 2019 fiscal year compared to our 2018 fiscal year primarily due to
additional corn oil supplies in the market along with less corn oil demand from
the biodiesel industry.

  Our corn oil sales decreased by approximately 15% during our 2019 fiscal year
compared to our 2018 fiscal year due to decreased corn oil production per bushel
of corn we ground. This decrease in the amount of corn oil we produced per
bushel of corn we ground was due to a change in chemicals used during the
production process which resulted in less corn oil being extracted.

Cost of Goods Sold

Our total cost of goods sold was approximately 2% less for our 2019 fiscal year compared to our 2018 fiscal year due primarily to lower chemical and ingredient costs associated with our production during our 2019 fiscal year along with lower electricity, denaturant and labor expense.

Corn Costs



Our cost of goods sold related to corn was approximately 9% greater during our
2019 fiscal year compared to our 2018 fiscal year due to increased corn bushels
used, partially offset by derivative gains which decreased our corn cost per
bushel used after hedging gains and losses during our 2019 fiscal year. Our
average cost per bushel of corn used, without including our derivative
instrument gains and losses, was approximately 6% greater during our 2019 fiscal
year compared to our 2018 fiscal year. Management attributes this increase in
corn costs to late planting and unfavorable weather conditions which impacted
the corn market during our 2019 fiscal year. Our corn use increased by
approximately 3% during our 2019 fiscal year compared to our 2018 fiscal year
due to increased overall production at the ethanol plant.

From time to time we enter into forward purchase contracts for our commodity
purchases and sales. At September 30, 2019, we had forward corn purchase
contracts for various delivery periods through March 2020 for a total commitment
of approximately $8.19 million for a total of approximately 2.2 million bushels
of corn. We had a gain of approximately $4.4 million related to our corn
derivative instruments which decreased our cost of goods sold during our 2019
fiscal year. We had a loss of approximately $2 million related to our corn
derivative instruments during our 2018 fiscal year which increased our cost of
goods sold. We recognize the gains or losses that result from the changes in the
value of our derivative instruments from corn in cost of goods sold as the
changes occur.  As corn prices fluctuate, the value of our derivative
instruments is impacted, which affects our financial performance.

Natural Gas Costs



  Our total natural gas costs to operate the ethanol plant were higher for our
2019 fiscal year compared to our 2018 fiscal year due primarily to increased
natural gas costs per MMBtu during the 2019 period. Our average cost per MMBtu
of natural
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gas was approximately 3% greater during our 2019 fiscal year compared to our
2018 fiscal year. Management believes this increase in natural gas costs during
our 2019 fiscal year was due to a basis change off the CIG Rockies Natural Gas
Basis Futures which increased the price per MMBtu we had to pay. We used
approximately the same amount of natural gas during both our 2019 fiscal year
and our 2018 fiscal year.

General and Administrative Expenses



  Our general and administrative expense was higher during our 2019 fiscal year
and our 2018 fiscal year due to increased consulting fees and meeting expense.
We entered into a research agreement with the University of North Dakota Energy
and Environmental Research Center to explore the feasibility of injecting CO2
from the fermentation process into a saline formation to lower the carbon
intensity value of our ethanol.

Other Income/Expense



  We had more interest income during our 2019 fiscal year compared to our 2018
fiscal year due to having more cash on hand during the 2019 period. Our other
income was lower during our 2019 fiscal year compared to our 2018 fiscal year
due to a loss on sale of corn that could not be used in the production process.
Changes in Financial Condition for the Year Ended September 30, 2020 and 2019

  Current Assets. We had more cash and equivalents on our balance sheet at
September 30, 2020 compared to September 30, 2019 due to increased deferred corn
payments at September 30, 2020 compared to September 30, 2019. We had less
restricted cash at September 30, 2020 compared to September 30, 2019 as a result
of having less cash deposited in our margin account with our commodities broker
related to our risk management positions. We had less accounts receivable at
September 30, 2020 compared to September 30, 2019 due primarily to the timing of
payments from our product marketers at the end of our 2020 fiscal year compared
to the end of our 2019 fiscal year. We had more inventory on hand at
September 30, 2020 compared to September 30, 2019 due to more corn and finished
goods inventory at September 30, 2020. Our increased finished goods inventory
was higher due to the timing of ethanol shipments at the end of our 2020 fiscal
year.

  Property, Plant and Equipment. The gross value of our property, plant and
equipment was higher at September 30, 2020 compared to September 30, 2019 due
primarily to the start of construction on our carbon capture and storage project
during our 2020 fiscal year. The carbon capture and storage project will inject
CO2 from the fermentation process into a saline formation to lower the carbon
intensity value of our ethanol so it qualifies for the west coast clean fuels
programs. The net value of our property, plant and equipment was lower at
September 30, 2020 compared to September 30, 2019 due to depreciation.

  Other Assets. Our other assets were higher at September 30, 2020 than at
September 30, 2019 due primarily to an accounting change we made for our lease
agreements due to ASU No. 2016-02. ASU No. 2016-02 requires a lessee to
recognize a right to use asset and a lease liability on its balance sheet for
all leases with terms of twelve months or greater, therefore we now include an
asset value for our leases along with a liability related to future lease
payments.

  Current Liabilities. Our accounts payable was comparable at September 30, 2020
and at September 30, 2019. Our accrued expenses were higher at September 30,
2020 compared to September 30, 2019 due to having more accrued corn payables at
September 30, 2020 compared to September 30, 2019. We had a larger accrued loss
on our firm corn purchase commitments at September 30, 2020 compared to
September 30, 2019. The current maturities of our long-term debt was higher at
September 30, 2020 compared to September 30, 2019 due to increased borrowing for
our carbon sequestration project. We received a loan pursuant to the Paycheck
Protection Program ("PPP") a portion of which was included in our current
liabilities. Due to a change in accounting treatment of leases, we included a
liability related to the current portion of our operating leases at
September 30, 2020 compared to September 30, 2019.

  Long-term Liabilities. We had more long-term liabilities at September 30, 2020
compared to September 30, 2019 due to borrowing for our carbon sequestration
project and the PPP loan. Due to the different accounting treatment for leases,
we had a long-term liability related to operating leases at September 30, 2020
compared to September 30, 2019.


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Critical Accounting Policies

  Management uses estimates and assumptions in preparing our financial
statements in accordance with generally accepted accounting principles. These
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Of the significant accounting policies described in the notes to
our financial statements, we believe that the following are the most critical.

Inventory



  Corn is the primary raw material and, along with other raw materials and
supplies, is stated at the lower of cost or net realizable value on a first-in,
first-out (FIFO) basis.  Work in process and finished goods, which consists of
ethanol, distillers grains and corn oil produced, is stated at the lower of
average cost or net realizable value.  Spare parts inventory is valued at lower
of cost or net realizable value on a FIFO basis.

Allowance for Doubtful Accounts



  Management's estimate of the Allowance for Doubtful Accounts is based on
management's estimate of the collectability of identified receivables, as well
as the aging of customer accounts. A 10% change in management's estimate
regarding the Allowance for Doubtful Accounts as of September 30, 2020 could
impact net income by approximately $43,000 for our 2021 fiscal year.

Revenue Recognition



  The Company sells ethanol and related products pursuant to marketing
agreements. The Company recognizes revenue from sales of ethanol and co-products
at the point in time when the performance obligations in the contract are met,
which is when the customer obtains control of such products and typically occurs
upon shipment depending on the terms of the underlying contracts. Revenue is
measured as the amount of consideration expected to be received in exchange for
transferring goods or providing services. In some instances, the Company enters
into contracts with customers that contain multiple performance obligations to
deliver volumes of co-products over a contractual period of less than 12 months.
The Company allocates the transaction price to each performance obligation
identified in the contract based on relative standalone selling prices and
recognizes the related revenue as control of each individual product is
transferred to the customer in satisfaction of the corresponding performance
obligation. Revenues are shown net of any fees incurred under the terms of the
Company's agreements for the marketing and sale of ethanol and related products.

Long Lived Assets



  Property, plant, and equipment are stated at cost. Depreciation is provided
over estimated useful lives by use of the straight line method. Maintenance and
repairs are expensed as incurred. Major improvements and betterments are
capitalized. The present values of finance lease obligations are classified as
long-term debt and the related assets are included in property, plant and
equipment. Amortization of equipment under finance leases is included in
depreciation expense. Management does not believe it is reasonably likely that
the valuation of its property, plant and equipment will change in any material
manner in future estimates.

Liquidity and Capital Resources



  Based on financial forecasts performed by our management, we anticipate that
we will have sufficient cash from our expected credit facilities and cash from
our operations to continue to operate the ethanol plant for the next 12 months.
Should we experience unfavorable operating conditions in the future, we may have
to secure additional debt or equity sources for working capital or other
purposes. We do not have any planned capital projects for which we anticipate
requiring additional borrowing.


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The following table shows cash flows for the years ended September 30, 2020 and 2019:


                                                                2020

2019


  Net cash provided by operating activities                $  3,292,949

$ 378,740


  Net cash (used in) investing activities                    (8,871,441)

(725,559)

Net cash provided by (used in) financing activities 6,168,912

(4,451)


  Net increase (decrease) in cash                          $    590,420

$ (351,270)


  Cash and equivalents, end of period                      $ 11,112,489      $ 10,522,069



Cash Flow from Operations

Our operations provided more cash during our 2020 fiscal year compared to our
2019 fiscal year due to net income we generated during the 2020 period compared
to a net loss during the 2019 period. Our derivative instruments, accounts
receivable and accounts payable positively impacted the cash generated by our
operating activities during our 2020 fiscal year.

Cash Flow from Investing Activities



We used more cash for capital expenditures during our 2020 fiscal year compared
to our 2019 fiscal year. During our 2020 fiscal year, we had capital
expenditures primarily related to our carbon sequestration project. During our
2019 fiscal year, we had capital expenditures primarily related to improvements
to our centrifuges and heat exchangers.

Cash Flow from Financing Activities

Our financing activities provided cash during our 2020 fiscal year due to increased cash from our debt instruments. We used cash during our 2019 fiscal year for lease repayments.



Our liquidity, results of operations and financial performance will be impacted
by many variables, including the market price for commodities such as, but not
limited to, corn, ethanol and other energy commodities, as well as the market
price for any co-products generated by the facility and the cost of labor and
other operating costs.  Assuming future relative price levels for corn, ethanol
and distillers grains remain consistent, we expect operations to generate
adequate cash flows to maintain operations.

The following table shows cash flows for the years ended September 30, 2019 and 2018:


                                                            2019

2018

Net cash provided by operating activities $ 378,740 $ 6,914,549


       Net cash (used in) investing activities             (725,559)

(947,746)


       Net cash (used in) financing activities               (4,451)

(4,223,472)


       Net increase (decrease) in cash                 $   (351,270)

1,743,331


       Cash and equivalents, end of period             $ 10,522,069      $

10,873,339



Cash Flow from Operations

Our operations provided less cash during our 2019 fiscal year compared to our
2018 fiscal year. Changes in our inventory accounts receivable positively
impacted the cash generated by our operating activities during the 2019 fiscal
year.

Cash Flow from Investing Activities



We used less cash for capital expenditures during our 2019 fiscal year compared
to our 2018 fiscal year. During our 2019 fiscal year we had capital projects
related to the addition of a hammer mill and upgrades to the centrifuges. During
our 2018 fiscal year we had capital expenditures related to a project to expand
the cooling capacity of our beer mash exchangers.

Cash Flow from Financing Activities



We used less cash for financing activities during our our 2019 fiscal year
compared to our 2018 fiscal year due to fewer distributions made during the 2019
fiscal year compared to the 2018 fiscal year. We used approximately $3 million
during our 2019 fiscal year for distributions to our members compared to
approximately $5 million during our 2018 fiscal year.
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Capital Expenditures

We had approximately $9.8 million in construction in progress as of September 30, 2020 related to our carbon capture and storage project. During the fiscal year ended September 30, 2020, we placed in service approximately $332,000 in capital projects.

Capital Resources

On January 22, 2020, we entered into a series of loans with Cornerstone Bank ("Cornerstone"), described below.

Revolving Loan



On January 22, 2020, we entered into a new $10 million revolving loan (the
"Revolving Loan") with Cornerstone. Interest accrues on any outstanding balance
on the Revolving Loan at a rate of 1.2% less than the prime rate as published by
the Wall Street Journal, adjusted monthly. The Revolving Loan has a minimum
interest rate of 3.0%. The maturity date of the Revolving Loan is January 21,
2021. The Revolving Loan is secured by a lien on all of our assets. At
September 30, 2020, we had $10 million available on the Revolving Loan. The
variable interest rate on September 30, 2020 was 3.00%.

Construction Loan



On January 22, 2020, we entered into a new $7 million construction loan (the
"Construction Loan") with Cornerstone to finance our carbon capture and storage
project. Interest accrues on any outstanding balance on the Construction Loan at
a rate of 1.2% less than the prime rate as published by the Wall Street Journal,
adjusted monthly. The maturity date of the Construction Loan is June 1, 2021.
The Construction Loan is secured by a lien on all of our assets. At
September 30, 2020, we had $7 million available on the Construction Loan. The
variable interest rate on September 30, 2020 was 3.00%.

Paycheck Protection Program Loan



On April 16, 2020, we entered into a new $873,400 Paycheck Protection Program
Loan (the "PPP Loan) with Cornerstone. Interest accrues on any outstanding
balance on the PPP Loan at a rate of 1.0%. The maturity date of the PPP Loan is
April 16, 2022. Under the terms of the loan, we may apply for forgiveness for
all or a portion of the loan as designated under the PPP regulations. While we
may apply for forgiveness of the PPP Loan in accordance with the requirements
and limitations under the CARES Act and the SBA regulations and requirements, no
assurance can be given that any portion of the PPP Loan will be forgiven. The
Company believes that it used the entire PPP Loan amount for qualifying expenses
and applied for forgiveness on October 31, 2020.

Ethanol Recovery Program



On July 13, 2020, we entered into a loan with the Bank of North Dakota Ethanol
Recovery Program and Cornerstone for $5.41 million. The Ethanol Recovery Program
was developed by the North Dakota Ethanol Producers Association and the Bank of
North Dakota to use the existing Biofuels Pace program and value-added loan
guarantee program to help ethanol production facilities weather the pandemic
economic challenges. Ethanol producers could qualify for up to $15 million
dollars of a low interest loan of 1% based on the amount of annual corn grind.
The maturity date of the loan is July 13, 2025. The fixed interest rate as of
September 30, 2020 was 3.75% with an interest rate buy down through the Bank of
North Dakota to 1%. We make monthly payments of approximately $74,000 per month
with the balance outstanding on September 30, 2020 of approximately $5,300,000.


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Contractual Obligations and Commercial Commitments

We have the following contractual obligations as of September 30, 2020:


   Contractual Obligations:          Total          Less than 1 Yr        1-3 Years       3-5 Years

   Corn purchases *              $  9,420,534      $     9,420,534
   Water purchases                  2,332,000              424,000        1,272,000        636,000
   Operating lease obligations      1,008,677              364,862          643,815
   Finance leases                      18,917                4,508           13,729            680
   Total                         $ 12,780,128      $    10,213,904      $ 1,929,544      $ 636,680

* - Amounts determined assuming prices, including freight costs, at which corn had been contracted for cash corn contracts and current market prices as of September 30, 2020 for basis contracts that had not yet been fixed.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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