
LAKE AREA CORN PROCESSORS, LLC
(Exact name of registrant as specified in its charter)

South Dakota		46-0460790
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

46269 SD Highway 34		Wentworth,	SD
P.O. Box 100		57075
		(Zip Code)
(Address of principal executive offices)


(605)	483-2676
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller Reporting Company	o
		Emerging Growth Company	o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			o


		March 31, 2022		December 31, 2021*			September 30, 2022		December 31, 2021*
ASSETS	ASSETS	(unaudited)				ASSETS	(unaudited)

CURRENT ASSETS	CURRENT ASSETS					CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	192,320	$	37,995,310	Cash and cash equivalents	$	9,765,084	$	37,995,310
Accounts receivable	Accounts receivable	1,006,716		876,949		Accounts receivable	807,887		876,949
Accounts receivable (related party)	Accounts receivable (related party)	2,583,679		1,032,541		Accounts receivable (related party)	8,165,209		1,032,541

Inventory	Inventory	19,589,089		16,410,437		Inventory	9,643,964		16,410,437
Derivative financial instruments	Derivative financial instruments	5,669,859		2,886,831		Derivative financial instruments	3,554,362		2,886,831
Prepaid expenses	Prepaid expenses	583,402		733,189		Prepaid expenses	205,462		733,189
Total current assets	Total current assets	29,625,065		59,935,257		Total current assets	32,141,968		59,935,257

PROPERTY AND EQUIPMENT	PROPERTY AND EQUIPMENT					PROPERTY AND EQUIPMENT
Land	Land	874,473		874,473		Land	874,473		874,473
Land improvements	Land improvements	8,738,063		8,738,063		Land improvements	8,751,733		8,738,063
Buildings	Buildings	9,316,576		9,316,576		Buildings	9,316,576		9,316,576
Equipment	Equipment	96,425,915		96,159,927		Equipment	99,868,211		96,159,927
Construction in progress	Construction in progress	3,909,289		1,669,148		Construction in progress	6,950,903		1,669,148
		119,264,316		116,758,187			125,761,896		116,758,187
Less accumulated depreciation	Less accumulated depreciation	(59,919,035)		(58,706,491)		Less accumulated depreciation	(62,279,776)		(58,706,491)
Net property and equipment	Net property and equipment	59,345,281		58,051,696		Net property and equipment	63,482,120		58,051,696

OTHER ASSETS	OTHER ASSETS					OTHER ASSETS
Goodwill	Goodwill	10,395,766		10,395,766		Goodwill	10,395,766		10,395,766
Investments	Investments	18,003,298		20,504,842		Investments	16,141,909		20,504,842
Other	Other	61,304		65,302		Other	2,720,308		65,302
Total other assets	Total other assets	28,460,368		30,965,910		Total other assets	29,257,983		30,965,910

TOTAL ASSETS	TOTAL ASSETS	$	117,430,714	$	148,952,863	TOTAL ASSETS	$	124,882,071	$	148,952,863


		March 31, 2022		December 31, 2021*			September 30, 2022		December 31, 2021*
LIABILITIES AND MEMBERS’ EQUITY	LIABILITIES AND MEMBERS’ EQUITY	(unaudited)				LIABILITIES AND MEMBERS’ EQUITY	(unaudited)

CURRENT LIABILITIES	CURRENT LIABILITIES					CURRENT LIABILITIES
Outstanding checks in excess of bank balance	Outstanding checks in excess of bank balance	$	1,921,969	$	2,228,284	Outstanding checks in excess of bank balance	$	2,706,757	$	2,228,284
Accounts payable	Accounts payable	6,540,525		25,855,071		Accounts payable	10,958,544		25,855,071
Accrued liabilities	Accrued liabilities	514,518		914,994		Accrued liabilities	738,312		914,994
Derivative financial instruments	Derivative financial instruments	1,380,083		1,490,510		Derivative financial instruments	620,123		1,490,510

Current portion of notes payable	Current portion of notes payable	1,000,000		1,000,000		Current portion of notes payable	1,000,000		1,000,000

Total current liabilities	Total current liabilities	11,357,095		31,488,859		Total current liabilities	16,023,736		31,488,859

LONG-TERM LIABILITIES	LONG-TERM LIABILITIES					LONG-TERM LIABILITIES
Notes payable	Notes payable	5,995,722		3,995,139		Notes payable	2,997,792		3,995,139

Total long-term liabilities	Total long-term liabilities	5,995,722		3,995,139		Total long-term liabilities	2,997,792		3,995,139

MEMBERS' EQUITY (29,620,000 units issued and outstanding)	MEMBERS' EQUITY (29,620,000 units issued and outstanding)	100,077,897		113,468,865		MEMBERS' EQUITY (29,620,000 units issued and outstanding)	105,860,543		113,468,865

TOTAL LIABILITIES AND MEMBERS' EQUITY	TOTAL LIABILITIES AND MEMBERS' EQUITY	$	117,430,714	$	148,952,863	TOTAL LIABILITIES AND MEMBERS' EQUITY	$	124,882,071	$	148,952,863


		Three Months Ended March 31, 2022		Three Months Ended March 31, 2021			Three Months Ended September 30, 2022		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021

REVENUES	REVENUES	$	64,450,894	$	48,615,653	REVENUES	$	74,210,499	$	63,794,494	$	214,098,692	$	176,648,273

COSTS OF REVENUES	COSTS OF REVENUES	61,758,095		41,658,434		COSTS OF REVENUES	66,808,651		54,753,379		195,168,386		151,181,885

GROSS PROFIT	GROSS PROFIT	2,692,799		6,957,219		GROSS PROFIT	7,401,848		9,041,115		18,930,306		25,466,388

OPERATING EXPENSES	OPERATING EXPENSES	1,247,879		1,251,134		OPERATING EXPENSES	1,268,468		1,249,243		3,668,362		3,776,472

INCOME FROM OPERATIONS	INCOME FROM OPERATIONS	1,444,920		5,706,085		INCOME FROM OPERATIONS	6,133,380		7,791,872		15,261,944		21,689,916

OTHER INCOME (EXPENSE)	OTHER INCOME (EXPENSE)					OTHER INCOME (EXPENSE)
Interest and other income	Interest and other income	254,548		362,179		Interest and other income	61,607		21,723		1,559,100		1,328,326

Equity in net income (loss) of investments		(1,543)		753,429
Equity in net income of investments						Equity in net income of investments	315,273		1,135,138		2,542,068		3,072,697
Interest expense	Interest expense	(32,726)		(286,163)		Interest expense	(568)		(136,176)		(65,247)		(684,200)
Total other income	Total other income	220,279		829,445		Total other income	376,312		1,020,685		4,035,921		3,716,823

NET INCOME	NET INCOME	$	1,665,199	$	6,535,530	NET INCOME	$	6,509,692	$	8,812,557	$	19,297,865	$	25,406,739

BASIC AND DILUTED EARNINGS PER UNIT	BASIC AND DILUTED EARNINGS PER UNIT	$	0.06	$	0.22	BASIC AND DILUTED EARNINGS PER UNIT	$	0.22	$	0.30	$	0.65	$	0.86

WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING FOR THE CALCULATION OF BASIC & DILUTED EARNINGS PER UNIT	WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING FOR THE CALCULATION OF BASIC & DILUTED EARNINGS PER UNIT	29,620,000		29,620,000		WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING FOR THE CALCULATION OF BASIC & DILUTED EARNINGS PER UNIT	29,620,000		29,620,000		29,620,000		29,620,000

DISTRIBUTIONS DECLARED PER UNIT	DISTRIBUTIONS DECLARED PER UNIT	$	0.51	$	—	DISTRIBUTIONS DECLARED PER UNIT	$	0.40	$	0.10	$	0.91	$	0.10


	Members' Equity

Balance - December 31, 2020	$	65,268,579

Net income for the three-month period ended March 31, 2021	6,535,530



Balance - March 31, 2021	$71,804,109

Net income for the three-month period ended June 30, 2021	~~71,804,109~~10,058,652



Balance - June 30, 2021	81,862,761

Net income for the three-month period ended September 30, 2021	8,812,557

Member Distributions	(2,962,000)

Balance - September 30, 2021	$	87,713,318


	Members' Equity

Balance - December 31, 2021	$	113,468,865

Net income for the three-month period ended March 31, 2022	1,665,199

Member ~~distributions~~Distributions	(15,056,167)

Balance - March 31, 2022	$100,077,897

Net income for the three-month period ended June 30, 2022	~~100,077,897~~11,122,974



Balance - June 30, 2022	111,200,871

Net income for the three-month period ended September 30, 2022	6,509,692

Member Distributions	(11,850,020)

Balance - September 30, 2022
$
105,860,543


		Three Months Ended March 31, 2022		Three Months Ended March 31, 2021			Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021

OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	1,665,199	$	6,535,530	Net income	$	19,297,865	$	25,406,739
Adjustments to reconcile net income to cash (used in) operating activities
Adjustments to reconcile net income to cash provided by operating activities						Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization	Depreciation and amortization	1,222,429		1,422,959		Depreciation and amortization	3,716,018		4,169,044
Distributions in excess of earnings (earnings in excess of distributions) from investments	Distributions in excess of earnings (earnings in excess of distributions) from investments	2,501,543		(103,429)		Distributions in excess of earnings (earnings in excess of distributions) from investments	4,362,932		(372,697)

(Gain) on disposal of property and equipment		(125,400)		—
Loss on disposal of property and equipment						Loss on disposal of property and equipment	49,842		—

(Increase) decrease in	(Increase) decrease in					(Increase) decrease in
Accounts receivable	Accounts receivable	819,094		(1,617,758)		Accounts receivable	(7,063,606)		(2,630,718)
Inventory	Inventory	(3,178,651)		(4,468,766)		Inventory	6,766,473		(2,836,912)
Prepaid expenses	Prepaid expenses	149,788		131,451		Prepaid expenses	527,727		445,707
Derivative financial instruments	Derivative financial instruments	(2,893,456)		(2,404,240)		Derivative financial instruments	(1,537,918)		(1,167,238)

Increase (decrease) in	Increase (decrease) in					Increase (decrease) in
Accounts payable	Accounts payable	(21,814,546)		(13,295,337)		Accounts payable	(15,670,376)		(6,353,567)
Accrued and other liabilities	Accrued and other liabilities	(400,476)		40,471		Accrued and other liabilities	(176,682)		72,397
NET CASH (USED IN) OPERATING ACTIVITIES		(22,054,476)		(13,759,119)
NET CASH PROVIDED BY OPERATING ACTIVITIES						NET CASH PROVIDED BY OPERATING ACTIVITIES	10,272,275		16,732,755

INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES

Natural gas transportation prepayment						Natural gas transportation prepayment	(2,667,000)		—
Purchase of property and equipment	Purchase of property and equipment	(2,386,032)		(14,544)		Purchase of property and equipment	(8,408,787)		(340,540)

NET CASH USED IN INVESTING ACTIVITIES	NET CASH USED IN INVESTING ACTIVITIES	(2,386,032)		(14,544)		NET CASH USED IN INVESTING ACTIVITIES	(11,075,787)		(340,540)

FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Increase (decrease) in outstanding checks in excess of bank balance		(306,315)		1,998,867
Increase in outstanding checks in excess of bank balance						Increase in outstanding checks in excess of bank balance	478,473		3,037,816
Borrowings on notes payable	Borrowings on notes payable	3,000,000		8,000,000		Borrowings on notes payable	13,498,000		20,229,600
Payments on notes payable	Payments on notes payable	(1,000,000)		(13,000,000)		Payments on notes payable	(14,497,000)		(52,000,000)

Distributions paid to members	Distributions paid to members	(15,056,167)		—		Distributions paid to members	(26,906,187)		(2,962,000)
NET CASH USED IN FINANCING ACTIVITIES	NET CASH USED IN FINANCING ACTIVITIES	(13,362,482)		(3,001,133)		NET CASH USED IN FINANCING ACTIVITIES	(27,426,714)		(31,694,584)

NET DECREASE IN CASH AND CASH EQUIVALENTS	NET DECREASE IN CASH AND CASH EQUIVALENTS	(37,802,990)		(16,774,796)		NET DECREASE IN CASH AND CASH EQUIVALENTS	(28,230,226)		(15,302,369)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	37,995,310		18,637,811		CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	37,995,310		18,637,811

CASH AND CASH EQUIVALENTS AT END OF PERIOD	CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	192,320	$	1,863,015	CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	9,765,084	$	3,335,442

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION					SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest, net of capitalized interest of $26,844 and $586 in 2022 and 2021, respectively.		$	50,316	$	237,064
Cash paid during the period for interest, net of capitalized interest of $87,847 and $1,291 in 2022 and 2021, respectively.						Cash paid during the period for interest, net of capitalized interest of $87,847 and $1,291 in 2022 and 2021, respectively.	$	92,619	$	753,728
Capital expenditures in accounts payable	Capital expenditures in accounts payable	37,561		23,815		Capital expenditures in accounts payable	773,849		—

The unaudited financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America although the Company believes that the disclosures are adequate to make the information not misleading.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying financial statements. All adjustments are of a normal and recurring nature. The results of operations for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 are not necessarily indicative of the results to be expected for a full year.

ASC Topic 606, Revenue from Contracts with Customers requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The Company generally recognizes revenue at aone point in ~~time.~~time, as more thoroughly described below. The Company's contracts with customers generally have one performance obligation and a contract duration of one year or less.

We recognize revenue is when control of the promised goods or services under our contracts ~~with our customers~~ are transferred to our customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. Generally, ethanol and related products are shipped free on board ("FOB") and the control of the goods is transferred to our customers either when the


		Three Months Ended March 31				Three Months Ended September 30				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021

Revenues ethanol	Revenues ethanol	$	48,205,895	$	37,043,659		Revenues ethanol	$	56,385,702	$	49,995,030	$	162,164,019	$	136,992,923
Revenues distillers grains	Revenues distillers grains	12,124,702		9,091,251			Revenues distillers grains	12,922,675		9,731,338		37,962,783		29,806,883
Revenues distillers corn oil	Revenues distillers corn oil	4,120,297		2,480,743			Revenues distillers corn oil	4,902,122		4,068,126		13,971,890		9,848,467
		$	64,450,894	$	48,615,653			$	74,210,499	$	63,794,494	$	214,098,692	$	176,648,273

The Company receives payments from customers based ~~upon~~on contractual billing ~~schedules;~~schedules and accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract.

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker or decision making group in deciding how to allocate resources and in assessing performance. The Company has determined that it has six (6) operating segments that give rise to two (2) reportable segments. See "Note 3 - Segments" in our Notes to Consolidated Financial ~~Statements included elsewhere in this report for financial information about our segment reporting.~~Statements.

Through the BioFuel Producer Program, the United States Department of Agriculture (the "USDA") is making up to $700,000,000.00 in direct payment available for biofuel producers who faces unexpected market losses due to the COVID-19 pandemic. On May 23, 2022, the Company received a payment from the USDA Biofuel Producer Program in the amount of approximately $1,200,000 that was recorded in interest and other income on the statement of operations during the nine months ended September 30, 2022.

Inventories are generally valued using methods which approximate the lower of cost (first-in, first-out) or net realizable value. In the valuation of inventories and purchase commitments, net realizable value is based on estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation.

Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within fifteen days from the invoice date. Unpaid accounts receivable with invoice dates over thirty days old bear interest at 1.5% per month. Accounts receivable are stated at the amount billed to the customer. 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 carrying amount of trade receivables is reduced by an allowance for doubtful accounts 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, estimates the portion, if any, of the balance that will not be collected. The allowance was $0 as of ~~March 31,~~September 30, 2022 and December 31, 2021.

The Company is exposed to certain risks related to its ongoing business ~~operations. The primary risks that the Company manages by using forward or derivative instruments are~~operations including price risks on anticipated purchases of corn, ~~and~~ natural gas, ~~and~~ the sale of ethanol, distillers grains and distillers corn oil. The Company manages these risks by using forward or derivative instruments.

The Company is subject to market risk with respect to the price and availability of corn, the principal raw material the Company uses to produce ethanol and ethanol by-products. In general, unfavorable market conditions result from rising corn ~~prices result in lower profit margins and, therefore, represent unfavorable market conditions.~~prices. This is especially true when market conditions do not allow us to pass along increased corn costs to our customers. The availability and price of corn are subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply. ~~The~~Additionally, the recent crisis in Ukraine may effect the price of corn, and by extension, our business.

Certain contracts that meet the definition of a derivative may be ~~exempted~~exempt from derivative accounting as normal purchases or normal sales. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from the accounting and reporting requirements of derivative accounting.

The Company does not apply the normal purchase and sales exemption for forward corn purchase contracts. As of ~~March 31,~~September 30, 2022, the Company was committed to purchasing approximately ~~7.5~~5.2 million bushels of corn on a forward contract basis with an average price of ~~$6.62~~$6.33 per bushel. The total corn purchase contracts represent approximately ~~25%~~17% of the annual projected plant corn usage.

The Company enters into firm-price purchase commitments with natural gas suppliers under which the Company agrees to buy natural gas at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price decrease in the market price of natural gas between the time the price is fixed and the time the natural gas is delivered. At ~~March 31,~~September 30, 2022, the Company is committed to purchasing approximately ~~1,556,000~~1,385,000 MMBtus of natural gas with an

The Company enters into firm-price sales commitments with distillers grains customers under which the Company agrees to sell distillers grains at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price increase in the market price of distillers grain between the time the price is fixed and the time the distillers grains are delivered. At ~~March 31,~~September 30, 2022, the Company was committed to selling approximately ~~26,000~~69,000 dry equivalent tons of distillers grains with an average price of ~~$224~~$234 per ton. The Company accounts for these transactions as normal sales, and accordingly, does not mark these transactions to market. The distillers grains sales represent approximately ~~12%~~32% of the projected annual plant production.

The Company enters into firm-price sales commitments with distillers corn oil customers under which the Company agrees to sell distillers corn oil at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price increase in the market price of distillers corn oil between the time the price is fixed and the time the distillers corn oil is delivered. At ~~March 31,~~September 30, 2022, the Company was committed to selling approximately ~~2.8~~2.7 million pounds of distillers corn oil with an average price of ~~$0.75~~$0.76 per pound. The Company accounts for these transactions as normal sales, and accordingly, does not mark these transactions to market. The distillers corn oil sales represent approximately 12% of the projected annual plant production.

The Company enters into short-term forward, option and futures contracts for corn and natural gas as a means of managing exposure to changes in commodity and energy prices. All of the Company's derivatives are designated as non-hedge derivatives, and accordingly are recorded at fair value with changes in fair value recognized in net income. Although the contracts are considered economic hedges of specified risks, they are not designated as and accounted for as hedging instruments.

Derivatives not designated as hedging instruments at ~~March 31,~~September 30, 2022 and December 31, 2021 were as follows:


		Balance Sheet Classification	March 31, 2022		December 31, 2021*			Balance Sheet Classification	September 30, 2022		December 31, 2021*

Forward contracts in gain position	Forward contracts in gain position		$	3,036,215	$	892,509	Forward contracts in gain position		$	2,103,381	$	892,509
Futures contracts in gain position	Futures contracts in gain position		13,713		140,863		Futures contracts in gain position		126,400		140,863
Futures contracts in loss position	Futures contracts in loss position		(2,926,638)		(1,238,560)		Futures contracts in loss position		(459,363)		(1,238,560)
Total forward, futures and options contracts	Total forward, futures and options contracts		123,290		(205,188)		Total forward, futures and options contracts		1,770,418		(205,188)
Cash held by broker	Cash held by broker		5,546,569		3,092,019		Cash held by broker		1,783,944		3,092,019
		Current Assets	$	5,669,859	$	2,886,831		Current Assets	$	3,554,362	$	2,886,831

Forward contracts in loss position	Forward contracts in loss position	Current Liabilities	$	(1,380,083)	$	(1,490,510)	Forward contracts in loss position	Current Liabilities	$	(620,123)	$	(1,490,510)


		Statement of Operations	Three Months Ended March 31,						Statement of Operations	Three Months Ended September 30,
		Classification	2022		2021				Classification	2022		2021
Net realized and unrealized gains (losses) related to purchase contracts:	Net realized and unrealized gains (losses) related to purchase contracts:							Net realized and unrealized gains (losses) related to purchase contracts:
Futures contracts	Futures contracts	Cost of Revenues	$	(8,560,524)	$	(3,018,618)		Futures contracts	Cost of Revenues	$	(1,940,249)	$	2,017,814
Forward contracts	Forward contracts	Cost of Revenues	4,207,196		3,453,945			Forward contracts	Cost of Revenues	1,405,821		(1,774,753)

							Statement of Operations		Nine Months Ended September 30,
									Classification	2022		2021

Net realized and unrealized gains (losses) related to purchase contracts:								Net realized and unrealized gains (losses) related to purchase contracts:
Futures contracts								Futures contracts	Cost of Revenues	$	(7,342,878)	$	(9,208,060)
Forward contracts								Forward contracts	Cost of Revenues	2,796,694		8,329,573

The Company has investment interests in 5five (5) companies in related industries. All of these interests are at ownership shares less than 20%. These investments are flow-through entities and are being accounted for by the equity method of accounting under which the Company's share of net income of the underlying five (5) companies is recognized as income in the Company's statements of operations and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data.

Annually, as well as when an event triggering impairment may have occurred, the Company performs an impairment test on goodwill, which compares the fair value of the reporting unit with its carrying amount. An impairment charge is recognized, if necessary, for the amount by which the carrying value exceeds the fair value up to the amount of the goodwill attributed to the reporting unit. The Company performs the annual analysis as of December 31 of each fiscal year. The Company determined that there was no impairment of goodwill at December 31, 2021 or through ~~March 31,~~September 30, 2022 on the basis that no triggering events were noted.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the fair value of derivative financial instruments, lower of cost or net realizable value accounting for inventory, and goodwill impairment evaluation.

The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three months ended ~~March 31,~~September 30, 2022, ethanol sales averaged approximately ~~75%~~76% of total revenues, while approximately ~~19%~~17% of revenues were generated from the sale of distillers

grains and 7% of revenues were generated from the sale of corn oil. For the nine months ended September 30, 2022, ethanol sales averaged approximately 76% of total revenues, while approximately 18% of revenues were generated from the sale of distiller grains and 6% of revenues were generated from the sale of corn oil. ~~For the three months ended March 31, 2022, corn costs averaged approximately 86% of cost of goods sold.~~

The Company's operating and financial performance is largely driven by the prices at which it sells ethanol and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, unleaded gasoline and the petroleum markets, government programs, global political or economic issues, including but not limited to, the war in Ukraine including sanctions associated therewith, shortages, export prices, crude oil prices, currency valuations and government policies in the United States and around the world, over which we have no control. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol.

On January 30, 2020, the World Health Organization declared the coronavirus outbreak (COVID-19) a “Public Health Emergency of International Concern” and on March 11, 2020, declared COVID-19 a pandemic. Quarantines, labor shortages, and other disruptions to the Company’s operations, and those of its customers, adversely impacted the Company’s revenues, ability to provide its services and operating results. Any future quarantines, labor shortages, or other disruptions to the Company's operations, or those of its customers may adversely impact the Company's revenues, ability to provide its services and operating results. Like the COVID-19 pandemic, any significant outbreak of epidemic, pandemic or contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, including the geographical area in which the Company operates, resulting in an economic downturn that could affect demand for its goods and services. The extent to which COVID-19 will impact the Company’s long-term results will depend on future developments, which are highly uncertain and cannot be predicted, including but not limited to, new developments regarding continued distribution of the COVID-19 vaccine and boosters, new information which may emerge concerning the severity of the coronavirus, prevalence of new COVID-19 cases and variants and actions taken to contain the coronavirus or its ~~impact, among others.~~impact.

The Company reports its financial and operating performance in 2two segments: (1) production, which includes the manufacturing and marketing of fuel-grade ethanol and co-products of the ethanol production process and (2) ethanol producing equity method investments, which consists of the aggregation of the Company's two equity method operating segments of investment in Guardian Hankinson, LLC and investment in Ring-neck Energy & Feed, LLC. The Company discloses its other identified operating segments in an all other category ("All Other"), which consists of the Company's investments in RPMG, LLC, Lawrenceville Tank, LLC, and Guardian Energy Management, LLC.

The Company’s 2two reportable segments have been identified based on their unique characteristics. Our production segment is the Company’s ethanol plant that is operated in a manner chosen by our chief decision making team. The ethanol producing equity method segment consists of aggregated operating segments investments that have exceeded the quantitative thresholds for reportable segments which have similar economic characteristics but our chief decision making team does not have input into the daily operations of those entities. The ~~all other category~~All Other is comprised of investments that fall below the quantitative thresholds for reporting segments and the Company's chief decision making team has no input into their daily operations. Production includes the core operating drivers of the Company’s consolidated financial statements which consist of the production and sale of ethanol and its co-products. Ethanol producing equity method investments derive their revenues from the production and sale of ethanol and its co-products. The ~~all other category~~All Other receives its revenues from marketing fees, management fees, and storage fees. The reconciliation item is necessary due to reportable segments not being consolidated in the financial statements, but rather are reflected as equity method investments.


		Three Months Ended				Three Months Ended				Nine Months Ended
		March 31, 2022		March 31, 2021				September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
		unaudited		unaudited				unaudited		unaudited		unaudited		unaudited
Net Sales	Net Sales						Net Sales
Production	Production	$	64,450,894	$	48,615,653		Production	$	74,210,499	$	63,794,494	$	214,098,692	$	176,648,273
Ethanol Producing Equity Method Investments	Ethanol Producing Equity Method Investments	170,128,327		128,321,129			Ethanol Producing Equity Method Investments	180,869,554		146,800,703		545,640,321		439,148,984
All Other	All Other	4,409,009		3,988,973			All Other	4,553,075		4,140,757		13,334,531		12,356,312
Total	Total	238,988,230		180,925,755			Total	259,633,128		214,735,954		773,073,544		628,153,569
Reconciliation	Reconciliation	(174,537,336)		(132,310,102)			Reconciliation	(185,422,629)		(150,941,460)		(558,974,852)		(451,505,296)
Consolidated	Consolidated	$	64,450,894	$	48,615,653		Consolidated	$	74,210,499	$	63,794,494	$	214,098,692	$	176,648,273

Gross Profit (Loss):
Gross Profit:							Gross Profit:
Production	Production	$	2,692,799	$	6,957,219		Production	$	7,401,848	$	9,041,115	$	18,930,306	$	25,466,388
Ethanol Producing Equity Method Investments	Ethanol Producing Equity Method Investments	4,158,879		12,800,241			Ethanol Producing Equity Method Investments	7,747,126		15,674,893		31,919,797		42,997,910
All Other	All Other	2,935,856		2,625,075			All Other	2,982,259		2,537,782		8,922,437		7,790,640
Total	Total	9,787,534		22,382,535			Total	18,131,233		27,253,790		59,772,540		76,254,938
Reconciliation	Reconciliation	(7,094,735)		(15,425,316)			Reconciliation	(10,729,385)		(18,212,675)		(40,842,234)		(50,788,550)
Consolidated	Consolidated	$	2,692,799	$	6,957,219		Consolidated	$	7,401,848	$	9,041,115	$	18,930,306	$	25,466,388

Net Income (Loss):
Net Income:							Net Income:
Production	Production	$	1,665,199	$	6,535,530		Production	$	6,509,692	$	8,812,557	$	19,297,865	$	25,406,739
Ethanol Producing Equity Method Investments	Ethanol Producing Equity Method Investments	(1,472,217)		7,128,994			Ethanol Producing Equity Method Investments	1,863,817		10,584,904		21,973,160		27,888,935
All Other	All Other	1,131,978		853,458			All Other	1,384,948		747,045		3,625,905		3,407,283
Total	Total	1,324,960		14,517,982			Total	9,758,457		20,144,506		44,896,930		56,702,957
Reconciliation	Reconciliation	340,239		(7,982,452)			Reconciliation	(3,248,765)		(11,331,949)		(25,599,065)		(31,296,218)
Consolidated	Consolidated	$	1,665,199	$	6,535,530		Consolidated	$	6,509,692	$	8,812,557	$	19,297,865	$	25,406,739


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		unaudited		audited			unaudited		audited
Total Assets	Total Assets					Total Assets
Production	Production	$	117,430,714	$	148,952,863	Production	$	124,882,071	$	148,952,863
Ethanol Producing Equity Method Investments	Ethanol Producing Equity Method Investments	250,748,259		261,642,408		Ethanol Producing Equity Method Investments	227,125,159		261,642,408
All Other	All Other	311,758,950		283,835,871		All Other	319,515,750		283,835,871
Total	Total	679,937,923		694,431,142		Total	671,522,980		694,431,142
Reconciliation	Reconciliation	(562,507,209)		(545,478,279)		Reconciliation	(546,640,909)		(545,478,279)
Consolidated	Consolidated	$	117,430,714	$	148,952,863	Consolidated	$	124,882,071	$	148,952,863


		March 31, 2022		December 31, 2021*			September 30, 2022		December 31, 2021*
Raw materials	Raw materials	$	9,809,315	$	7,278,381	Raw materials	$	4,247,941	$	7,278,381
Finished goods	Finished goods	6,576,086		6,195,222		Finished goods	2,067,174		6,195,222
Work in process	Work in process	1,412,532		1,779,170		Work in process	1,767,207		1,779,170
Parts inventory	Parts inventory	1,791,156		1,157,664		Parts inventory	1,561,642		1,157,664
		$	19,589,089	$	16,410,437		$	9,643,964	$	16,410,437

Dakota Ethanol has a 5% investment interest in the Company’s ethanol marketer, Renewable Products Marketing Group, LLC ~~(RPMG)~~("RPMG"). The net income, which is reported in the Company’s income statement for RPMG, is based on RPMG’s ~~December 31, 2021~~June 30, 2022 unaudited interim results. The carrying amount of the Company’s investment was approximately ~~$1,685,000~~$1,747,000 and $1,709,000 as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively.

Dakota Ethanol has a 10% investment interest in Lawrenceville Tanks, LLC ~~(LT)~~("LT"), a partnership ~~to operate~~which operates an ethanol storage terminal in Georgia. The net income, which is reported in the Company’s income statement for LT, is based on LT’s ~~March 31,~~September 30, 2022 unaudited interim results. The carrying amount of the Company’s investment was approximately ~~$286,000~~$250,000 and $215,000 as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively.

Lake Area Corn Processors has a 10% investment interest in Guardian Hankinson, LLC ~~(GH)~~("GH"), a partnership ~~to operate~~which operates an ethanol plant in North Dakota. The net income, which is reported in the Company’s income statement for GH, is based on GH’s ~~March 31,~~September 30, 2022 unaudited interim results. The carrying amount of the Company’s investment was approximately ~~$3,169,000~~$1,286,000 and $5,714,000 as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively.

Lake Area Corn Processors has a 17% investment interest in Guardian Energy Management, LLC ~~(GEM)~~("GEM"), a partnership to provide management services to ethanol plants. The net income, which is reported in the Company’s income statement for GEM, is based on GEM’s ~~March 31,~~September 30, 2022 unaudited interim results. The carrying amount of the Company’s investment was approximately $90,000 ~~and $90,000~~ as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively.

Lake Area Corn Processors has an 11% investment interest in Ring-neck Energy and Feeds, LLC ~~(REF)~~("REF"), a partnership ~~to operate~~which operates an ethanol plant in South Dakota. The net income, which is reported in the Company’s income statement for REF, is based on REF’s ~~March 31,~~September 30, 2022 unaudited interim results. The carrying amount of the Company’s investment was approximately ~~$12,773,000~~$12,770,000 and $12,778,000 as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively. ~~REF commenced operations during 2019.~~ The carrying amount of the investment exceeds the underlying equity in net assets by approximately ~~$985,000.~~$957,000. The excess is comprised of a basis adjustment of approximately ~~$404,000~~$393,000 and capitalized interest of ~~$581,000.~~$564,000. The excess is amortized over 20 years from May 2019, the time the plant became operational.


Balance Sheet	Balance Sheet	March 31, 2022		December 31, 2021			Balance Sheet	September 30, 2022		December 31, 2021
Current Assets	Current Assets	$	389,554,690	$	370,470,221		Current Assets	$	384,975,099	$	370,470,221
Other Assets	Other Assets	172,952,519		179,230,853			Other Assets	161,665,810		179,230,853
Current Liabilities	Current Liabilities	303,175,878		308,504,144			Current Liabilities	326,459,139		308,504,144
Long-term Liabilities	Long-term Liabilities	81,900,443		44,248,272			Long-term Liabilities	65,890,393		44,248,272
Members' Equity	Members' Equity	177,430,889		196,948,658			Members' Equity	154,291,377		196,948,658

		Three Months Ended						Three Months Ended
Income Statement	Income Statement	March 31, 2022		March 31, 2021			Income Statement	September 30, 2022		September 30, 2021
Revenue	Revenue	$	174,537,336	$	132,310,102		Revenue	$	185,422,629	$	150,941,460
Gross Profit	Gross Profit	7,094,735		15,425,316			Gross Profit	10,729,385		18,212,675
Net Income	Net Income	(340,239)		7,982,452			Net Income	3,248,765		11,331,949

						Nine Months Ended

Income Statement							Income Statement	September 30, 2022		September 30, 2021
Revenue							Revenue	$	558,974,852	$	451,505,296
Gross Profit							Gross Profit	40,842,234		50,788,550
Net Income (Loss)							Net Income (Loss)	25,599,065		31,296,218


Balance Sheet	Balance Sheet	March 31, 2022		December 31, 2021			Balance Sheet	September 30, 2022		December 31, 2021
Current Assets	Current Assets	$	52,850,158	$	43,793,006		Current Assets	$	39,446,104	$	43,793,006
Other Assets	Other Assets	50,320,381		54,451,233			Other Assets	42,469,659		54,451,233
Current Liabilities	Current Liabilities	20,480,219		34,990,527			Current Liabilities	31,068,150		34,990,527
Long-term Liabilities	Long-term Liabilities	51,002,692		6,115,092			Long-term Liabilities	37,987,741		6,115,092
Members' Equity	Members' Equity	31,687,628		57,138,620			Members' Equity	12,859,872		57,138,620

		Three Months Ended						Three Months Ended
Income Statement	Income Statement	March 31, 2022		March 31, 2021			Income Statement	September 30, 2022		September 30, 2021
Revenue	Revenue	$	109,398,742	$	89,540,898		Revenue	$	120,022,746	$	102,483,876
Gross Profit	Gross Profit	370,244		5,879,483			Gross Profit	708,454		9,516,911
Net Income		(450,990)		4,908,868
Net Income (Loss)							Net Income (Loss)	(761,923)		8,458,155

						Nine Months Ended

Income Statement							Income Statement	September 30, 2022		September 30, 2021
Revenue							Revenue	$	358,507,931	$	297,952,764
Gross Profit							Gross Profit	13,596,079		20,060,049
Net Income							Net Income	16,721,254		18,143,266

Balance Sheet March 31, 2022 December 31, 2021
Current Assets $ 26,752,296 $ 44,893,050
Other Assets 120,825,424 122,727,914
Current Liabilities 11,939,582 23,595,688
Long-term Liabilities 30,897,751 38,133,180
Members' Equity 104,740,388 105,892,096
Three Months Ended
Income Statement March 31, 2022 March 31, 2021
Revenue $ 60,729,585 $ 38,780,231
Gross Profit 3,788,635 6,920,758
Net Income (1,021,227) 2,220,126


Balance Sheet	September 30, 2022		December 31, 2021
Current Assets	$	27,628,293	$	44,893,050
Other Assets	117,581,103		122,727,914
Current Liabilities	17,620,815		23,595,688
Long-term Liabilities	27,902,652		38,133,180
Members' Equity	99,685,929		105,892,096

	Three Months Ended
Income Statement	September 30, 2022		September 30, 2021
Revenue	$	60,846,808	$	44,316,827
Gross Profit	7,038,672		6,157,982
Net Income	2,625,740		2,126,749

	Nine Months Ended
Income Statement	September 30, 2022		September 30, 2021
Revenue	$	187,132,390	$	141,196,220
Gross Profit	18,323,718		22,937,861
Net Income	5,251,906		9,745,669

The Company recorded equity in net income ~~(loss)~~of investment at approximately $2,542,000 and $3,073,000 from our investments for the nine months ended September 30, 2022, and 2021, respectively. The Company recorded equity in net income of approximately ~~$(1,500)~~$315,000 and ~~$753,000~~$1,135,000 from our investments for the three months ended ~~March 31,~~September 30, 2022, and 2021, respectively.

On February 6, 2018, Dakota Ethanol executed a revolving promissory note with Farm Credit Services of America ~~(FCSA)~~("FCSA") in the amount up to $10,000,000 or the amount available in accordance with the borrowing base calculation, whichever is less. Dakota Ethanol amended the note agreement with FCSA in June of 2020 and October of 2021. Under the amendments, the available credit under the revolving operating note was reduced to $2,000,000. There is a non-use fee of 0.25% per annum on the unused portion of the $2,000,000 availability. The note is collateralized by substantially all of the assets of the Company. The note expires on November 1, 2023. Interest on the outstanding principal balance will accrue at 305 basis points above the Secured Overnight Financing 30-day Average Rate ("SOFR ~~30-day average rate.~~30"). The interest rate is not subject to a floor. The rate was ~~3.10%~~5.35% at ~~March 31,~~September 30, 2022. On ~~March 31,~~September 30, 2022, Dakota Ethanol had no balance outstanding and approximately $2,000,000 available to be drawn on the revolving promissory note.

On August 1, 2017, Dakota Ethanol executed a term note from FCSA in the amount of $8,000,000. Dakota Ethanol agreed to make monthly interest payments starting September 1, 2017 and annual principal payments of $1,000,000 starting on August 1, 2018. The annual principal payment on August 1, 2020 was deferred after the note was amended with FCSA and is now due on August 1, 2025. The note matures on August 1, 2025. Interest on the outstanding principal balance will accrue at 330 basis points above the SOFR ~~30-day average rate.~~30. The interest rate is not subject to a floor. The rate was ~~3.35%~~5.60% at ~~March 31,~~September 30, 2022. On ~~March 31,~~September 30, 2022, Dakota Ethanol had ~~$5,000,000~~$4,000,000 outstanding on the note.

amended the note agreement with FCSA in June of 2020. The amendment increased the available credit on the reducing revolving note to $48,000,000. The amount Dakota Ethanol can borrow on the note decreases by $1,750,000 semi-annually starting on July 1, 2021 until the maximum balance reaches $32,250,000 on July 1, 2025. The note matures on January 1, 2026. Interest on the outstanding principal balance will accrue at 330 basis points above the SOFR ~~30-day average rate.~~30. The interest rate is not subject to a floor. The rate was ~~3.35%~~5.60% at ~~March 31,~~September 30, 2022. The note contains a non-use fee of 0.50% per annum on the unused portion of the note. The loan was amended with FCSA on October 11, 2021 and the amendment was filed with the Securities Exchange Commission as Exhibit 10.1 to the Company's Form 10-Q on November 12, 2021. Under the amendment, the interest accrual will be measured using the ~~Secured Overnight Financing Rate (SOFR) 30-Day Average Rate.~~SOFR 30. On ~~March 31,~~September 30, 2022, Dakota Ethanol had ~~$2,000,000~~$1,000 outstanding and ~~$42,500,000~~$42,749,000 available to be drawn on the note.

As part of the ~~note~~notes payable agreement, Dakota Ethanol is subject to certain restrictive covenants establishing financial reporting requirements, distribution and capital expenditure limits, minimum debt service coverage ratios, net worth and working capital requirements. The note is collateralized by substantially all assets of the Company. The note payable agreement was amended in October 2021 with modifications to the requirements. The working capital covenant was increased to $13,500,000 and the net worth covenant was increased to $28,000,000.


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Notes Payable - FCSA	Notes Payable - FCSA	$	7,000,000	$	5,000,000	Notes Payable - FCSA	$	4,001,000	$	5,000,000

Less unamortized debt issuance costs	Less unamortized debt issuance costs	(4,278)		(4,861)		Less unamortized debt issuance costs	(3,208)		(4,861)
		6,995,722		4,995,139			3,997,792		4,995,139
Less current portion	Less current portion	(1,000,000)		(1,000,000)		Less current portion	(1,000,000)		(1,000,000)
		$	5,995,722	$	3,995,139		$	2,997,792	$	3,995,139
*Derived from audited financial statements	*Derived from audited financial statements					*Derived from audited financial statements


Periods Ending March 31,		Principal
Periods Ending September 30,				Periods Ending September 30,	Principal
2023	2023	$	1,000,000	2023	$	1,000,000
2024	2024	1,000,000		2024	1,000,000
2025	2025	1,000,000		2025	2,001,000
2026		4,000,000

		$	7,000,000
					$	4,001,000

The Company’s balance sheet contains derivative financial instruments that are recorded at fair value on a recurring basis. Fair value measurements and disclosures require that assets and liabilities carried at fair value be classified and disclosed according to the process for determining fair value. There are three levels of determining fair value.

Derivative financial instruments. Commodity futures contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the Chicago Board of Trade ("CBOT") and New York Mercantile Exchange ("NYMEX") markets. Over-the-counter commodity options contracts are reported at fair value utilizing Level 2 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the over-the-counter markets. Forward purchase contracts are reported at fair value utilizing Level 2 inputs. For these contracts, the Company obtains fair value measurements from local grain terminal bid values. The fair value measurements consider observable data that may include live trading bids from local elevators and processing plants which are based off the CBOT markets.


		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
March 31, 2022
September 30, 2022										September 30, 2022

Assets:	Assets:									Assets:
Derivative financial instruments, futures and options contracts	Derivative financial instruments, futures and options contracts	$	13,713	$	13,713	$	—	$	—	Derivative financial instruments, futures and options contracts	$	126,400	$	126,400	$	—	$	—
Forward contracts	Forward contracts	$	3,036,215	$	—	$	3,036,215	$	—	Forward contracts	$	2,103,381	$	—	$	2,103,381	$	—

Liabilities:	Liabilities:									Liabilities:
Derivative financial instruments, futures and options contracts	Derivative financial instruments, futures and options contracts	$	2,926,638	$	2,926,638	$	—	$	—	Derivative financial instruments, futures and options contracts	$	459,363	$	459,363	$	—	$	—
Forward contracts	Forward contracts	$	1,380,083	$	—	$	1,380,083	$	—	Forward contracts	$	620,123	$	—	$	620,123	$	—

December 31, 2021*	December 31, 2021*									December 31, 2021*

Assets:	Assets:									Assets:
Derivative financial instruments, futures and options contracts	Derivative financial instruments, futures and options contracts	$	140,863	$	140,863	$	—	$	—	Derivative financial instruments, futures and options contracts	$	140,863	$	140,863	$	—	$	—
Forward contracts	Forward contracts	$	892,509	$	—	$	892,509	$	—	Forward contracts	$	892,509	$	—	$	892,509	$	—

Liabilities:	Liabilities:									Liabilities:
Derivative financial instruments, futures and options contracts	Derivative financial instruments, futures and options contracts	$	1,238,560	$	1,238,560	$	—	$	—	Derivative financial instruments, futures and options contracts	$	1,238,560	$	1,238,560	$	—	$	—
Forward contracts	Forward contracts	$	1,490,510	$	—	$	1,490,510	$	—	Forward contracts	$	1,490,510	$	—	$	1,490,510	$	—

Disclosure requirements for fair value of financial instruments require disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above.

The carrying amount of long-term obligations (level 3) at ~~March 31,~~September 30, 2022 of ~~$7,000,000~~$4,001,000 had an estimated fair value of approximately ~~$7,000,000~~$4,001,000 based on estimated interest rates for comparable debt. The carrying amount of long-term obligations at December 31, 2021 of ~~$5,000,000~~$4,000,000 had an estimated fair value of approximately ~~$5,000,000.~~$4,000,000.

Dakota Ethanol has a 5% interest in RPMG, and Dakota Ethanol has entered into marketing agreements for the exclusive rights to market, sell and distribute the entire ethanol, dried distiller's grains and corn oil inventories produced by Dakota Ethanol. The marketing fees are included in net revenues. The Company also purchases denaturant from RPMG.


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021

Revenues ethanol	Revenues ethanol	$	48,282,029	$	37,107,397		Revenues ethanol	$	56,461,839	$	50,058,768	$	162,392,421	$	137,184,137
Revenues distillers dried grains	Revenues distillers dried grains	3,361,155		2,384,468			Revenues distillers dried grains	4,969,228		3,422,681		12,353,408		9,758,249
Revenues corn oil	Revenues corn oil	4,134,608		2,493,906			Revenues corn oil	4,917,518		4,082,593		14,015,718		9,889,836
Marketing fees ethanol	Marketing fees ethanol	(76,134)		(63,738)			Marketing fees ethanol	76,137		63,738		228,402		191,214
Marketing fees distillers dried grains	Marketing fees distillers dried grains	(16,919)		(13,272)			Marketing fees distillers dried grains	22,103		15,848		54,784		47,558
Marketing fees corn oil	Marketing fees corn oil	(14,311)		(13,163)			Marketing fees corn oil	15,396		14,468		43,829		41,369
Denaturant purchases	Denaturant purchases	686,120		795,340			Denaturant purchases	552,843		914,355		1,871,487		2,547,836

		March 31, 2022		December 31, 2021*				September 30, 2022		December 31, 2021*
Amounts due to RPMG	Amounts due to RPMG	$	39,062	$	79,909		Amounts due to RPMG	$	71,646	$	79,909

The Company purchased corn and services from members of its Board of Managers that farm and operate local businesses. Corn purchases from these related parties during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021 totaled approximately ~~$159,000~~$1,657,000 and ~~$248,000,~~$1,506,000, respectively. Corn purchases from these related parties during the three months ended September 30, 2022 and 2021 totaled approximately $1,093,000 and $1,037,000, respectively. As of ~~March 31,~~September 30, 2022 and December 31, 2021, the Company had no outstanding obligations to these related parties.

Dakota Ethanol has committed to a contract for the design and construction of a new 2 million gallon ethanol storage tank. The value of the construction is approximately $2.2 million, of which approximately ~~$1.0 million~~$0 is outstanding as of ~~March 31,~~September 30, 2022. The ~~project~~2 million gallon ethanol storage tank is expected to be ~~completed during~~placed into service in the fourth quarter of 2022. The Company has committed to a contract for the design and construction of an eighth fermentor. The value of the construction is approximately $3.1 million, of which approximately $1.4 million is outstanding as of March 31, 2022. The project is expected to be completed during the third quarter of 2022.quarter. The Company has also committed to a contract for the design and construction of an additional grain storage bin. The value of the contracted construction is approximately ~~$5.6~~$5.8 million, of which approximately ~~$3.3~~$1.6 million is outstanding as of ~~March 31,~~September 30, 2022. The additional grain storage bin project is expected to be completed during the fourth quarter of 2022.

On June 24, 2022, Dakota Ethanol, LLC, entered into the Precedent Agreement West Leg 2023 Expansion between Northern Natural Gas Company and the Dakota Ethanol (the "West Leg Agreement"). Pursuant to the West Leg Agreement, Dakota Ethanol will receive additional firm commitment natural gas transportation services. In order to secure these firm commitment natural gas transportation services, Dakota Ethanol agrees to pay Northern Natural Gas Company a contribution to the cost of constructing certain additional natural gas pipeline and storage facilities. Dakota Ethanol's contribution is estimated to be $8,890,000, of which $6,223,000 is outstanding as of September 30, 2022. Additional payments of 30% and 40% of the total contribution are scheduled to be made on December 31, 2022 and March 31, 2023, respectively. For a period of five years beginning on November 1, 2023, Dakota Ethanol is entitled to a firm natural gas commitment of 7,000 decatherms per day during the winter months (between November 1 and March 31 each year), and firm commitment of 4,340 decatherms per day during the summer months.

We prepared the following discussion and analysis to help you better understand our financial condition, changes in our financial condition, and results of operations for the three and nine month ~~period~~periods ended ~~March 31,~~September 30, 2022, compared to the same period of the prior year. This discussion should be read in conjunction with the consolidated financial statements and the Management's Discussion and Analysis section for the fiscal year ended December 31, 2021, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2021 which was filed with the SEC on March 3, 2022.

This report contains historical information, as well as forward-looking statements that involve known and unknown risks, including the growing ~~crisiss~~crisis in Ukraine, and relate to future events, our future financial performance, or our expected future operations and actions. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "future," "intend," "could," "hope," "predict," "target," "potential," "continue" or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions based on current information and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the reasons described in this report and our annual report on Form 10-K for the fiscal year ended December 31, 2021.

The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no duty to update these forward-looking statements, even though our situation may change in the future. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements.

Lake Area Corn Processors, LLC is a South Dakota limited liability company that owns and manages its wholly-owned subsidiary, Dakota Ethanol, LLC. Dakota Ethanol, LLC owns and operates an ethanol plant located near Wentworth, South Dakota that has a nameplate production capacity of 90 million gallons of ethanol per year. Lake Area Corn Processors, LLC is referred to in this report as "LACP," the ~~"company,~~"Company," "we," or "us." Dakota Ethanol, LLC is referred to in this report as "Dakota Ethanol" or the "ethanol plant."

Our revenue is derived from the sale and distribution of our ethanol, distillers grains and corn oil. Corn is supplied to us primarily from our members who are local agricultural producers and from purchases of corn on the open market. We have engaged Renewable Products Marketing Group, Inc. ("RPMG, Inc.") to market all of the ethanol and corn oil that we produce at the ethanol plant. Further, RPMG, Inc. markets all of the distillers grains that we produce that we do not market internally to local customers.


		2022			2021				2022			2021
Income Statement Data	Income Statement Data	Amount		%	Amount		%	Income Statement Data	Amount		%	Amount		%
Revenues	Revenues	$	64,450,894	100.0	$	48,615,653	100.0	Revenues	$	74,210,499	100.0	$	63,794,494	100.0

Cost of Revenues	Cost of Revenues	61,758,095		95.8	41,658,434		85.7	Cost of Revenues	66,808,651		90.0	54,753,379		85.8

Gross Profit	Gross Profit	2,692,799		4.2	6,957,219		14.3	Gross Profit	7,401,848		10.0	9,041,115		14.2

Operating Expense	Operating Expense	1,247,879		2.0	1,251,134		2.6	Operating Expense	1,268,468		1.7	1,249,243		2.0

Income from Operations	Income from Operations	1,444,920		2.2	5,706,085		11.7	Income from Operations	6,133,380		8.3	7,791,872		12.2

Other Income (Expense)	Other Income (Expense)	220,279		0.3	829,445		1.7	Other Income (Expense)	376,312		0.5	1,020,685		1.6

Net Income	Net Income	$	1,665,199	2.5	$	6,535,530	13.4	Net Income	$	6,509,692	8.8	$	8,812,557	13.8

Revenue from ~~ethanol~~ sales increased by approximately ~~30.1%~~16.3% during the three months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021 due to increased ~~average~~ prices that we received for our ethanol during the 2022 ~~period.~~period along with increased gallons of ethanol sold. Revenue from distillers grains sales increased by approximately ~~33.4%~~32.8% during the three months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021 due primarily to increased ~~average~~ prices that we received for our distillers grains ~~and increased~~along with more tons of distillers grains sold. Revenue from corn oil sales increased by approximately ~~66.1%~~20.5% during the three months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021 due primarily to increased ~~average~~ prices that we received for corn oil sold during the 2022 ~~period.~~period along with more pounds of corn oil sold.

Our ethanol revenue was approximately ~~$11.2~~$6.4 million higher during our three months ended ~~March 31,~~September 30, 2022 compared to the three months ended ~~March 31,~~September 30, 2021, an increase of approximately ~~30.1%~~12.8%. This increase in ethanol revenue was due primarily to an increase in the ~~average~~gallons sold and price that we received per gallon of ethanol sold during the three months ended ~~March 31,~~September 30, 2022 compared to the three months ended ~~March 31,~~September 30, 2021. We sold approximately 3.3% more gallons of ethanol during the three months ended March 31, 2022 compared to the same period of 2021, an increase of approximately 725,000 gallons. The increase is due primarily to increased sales of ethanol inventory during the three months ended March 31, 2022.

compared to the three months ended ~~March 31,~~September 30, 2021, an increase of approximately ~~26.0%~~4.8%. Management attributes this increase in ethanol prices during the three months ended ~~March 31, 2021~~September 30, 2022 to higher gasoline prices ~~along with increasing gasoline demand.~~generally which increases the price of ethanol. Since ethanol is blended with gasoline, when gasoline price and demand are higher it has a corresponding impact on ethanol price and demand. Management also believes that higher corn prices during the 2022 period had an impact on ethanol prices.

We sold approximately 7.6% more gallons of ethanol during the three months ended September 30, 2022 compared to the same period of 2021, an increase of approximately 1,673,000 gallons. The increase is due primarily to increased production and sales of ethanol inventory during the three months ended September 30, 2022. Management expects relatively stable ethanol production for the rest of our 2022 fiscal year.

grain sold. The average price we received for our dried distillers grains was approximately ~~15.2%~~9.7% higher during the three months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021, an increase of approximately ~~$26.13~~$19.71 per ton. Management attributes the increase in dried distillers grains prices during the three months ended ~~March 31,~~September 30, 2022 to increases in the domestic price of ~~corn and natural gas.~~corn. The average price we received for our modified/wet distillers grains ~~on a dry-equivalent basis,~~ was approximately ~~21.5%~~10.4% higher for the three months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021, an increase of approximately ~~$39.16~~$22.47 per ton. Management attributes this increase in modified/wet distillers grains prices with higher corn prices in the ~~market~~market.

Our total corn oil revenue was approximately ~~66.1%~~20.5% higher during the three months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021 due primarily to increased prices received for our corn oil. The average price per pound we received for our corn oil was higher by approximately 15.9% for the three months ended September 30, 2022 compared to the same period of 2021 due primarily to demand from the renewable diesel industry for corn oil along with higher soybean oil prices.

Our average cost per bushel of corn increased by approximately 13.0% for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. We consumed approximately 10.0% more bushels of corn during the three months ended September 30, 2022 compared to the same period of 2021 that contributed to higher corn cost. Management attributes the increased corn cost per bushel to significantly higher market corn prices and decreased corn availability during our 2022 fiscal period. Management anticipates corn prices to remain higher into our 2023 fiscal year due to drought conditions in the area that surrounds our plant and global uncertainty in the commodities markets.

Our cost of revenues related to natural gas increased by approximately $529,000, an increase of approximately 24.9%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This increase was due to higher natural gas costs per MMBtu during the three months ended September 30, 2022 compared to the same period of 2021.

Our average cost per MMBtu of natural gas during the three months ended September 30, 2022 was approximately 20.0% more compared to the cost per MMbtu for the three months ended September 30, 2021. Management attributes this increase in our average natural gas costs to higher market natural gas prices due to high export demand and supply shortages caused by the Russian invasion of Ukraine.

Our other income decreased during the three months ended September 30, 2022 compared to the same period of 2021 due primarily to decreased income from our investments. We had more interest income during the three months ended September 30, 2022 compared to the same period of 2021 due to having more cash on hand during the 2022 period. We had less income from our investments during the three months ended September 30, 2022 compared to the same period of 2021 due to decreased profitability in the ethanol sector. We had less interest expense during the three months ended September 30, 2022 compared to the same period of 2021 due to the capitalization of interest expense on current construction projects.


	2022			2021
Income Statement Data	Amount		%	Amount		%
Revenues	$	214,098,692	100.0	$	176,648,273	100.0

Cost of Revenues	195,168,386		91.2	151,181,885		85.6

Gross Profit	18,930,306		8.8	25,466,388		14.4

Operating Expense	3,668,362		1.7	3,776,472		2.1

Income from Operations	15,261,944		7.1	21,689,916		12.3

Other Income (Expense)	4,035,921		1.9	3,716,823		2.1

Net Income	$	19,297,865	9.0	$	25,406,739	14.4

Revenue from ethanol sales increased by approximately 18.4% during the nine months ended September 30, 2022 compared to the same period of 2021 due to increased prices that we received for our ethanol during the 2022 period along with an increase in the gallons of ethanol we sold. Revenue from distillers grains sales increased by approximately 27.4% during the nine months ended September 30, 2022 compared to the same period of 2021 due primarily to increased prices that we received for our distillers grains and increased tons of distillers grains sold. Revenue from corn oil sales increased by approximately 41.9% during the nine months ended September 30, 2022 compared to the same period of 2021 due primarily to increased prices that we received for corn oil sold during the 2022 period along with more pounds of corn oil sold.

Our ethanol revenue was approximately $25 million higher during our nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, an increase of approximately 18.4%. This increase in ethanol revenue was due primarily to an increase in the price that we received per gallon of ethanol sold and increased gallons of ethanol sold during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

The average price we received for our ethanol was approximately $0.27 higher per gallon during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, an increase of approximately 12.9%. Management attributes this increase in ethanol prices during the nine months ended September 30, 2022 to higher oil prices. Management also believes that higher corn prices during the 2022 period had an impact on ethanol prices.

The average price we received for our dried distillers grains was approximately 15.0% higher during the nine months ended September 30, 2022 compared to the same period of 2021, an increase of approximately $29.20 per ton. Management attributes the increase in dried distillers grains prices during the nine months ended September 30, 2022 to increases in the domestic price of corn. The average price we received for our modified/wet distillers grains was approximately 17.4% higher for the nine months ended September 30, 2022 compared to the same period of 2021, an increase of approximately $35.36 per ton. Management attributes this increase in modified/wet distillers grains prices with higher corn prices in the market.

Our total corn oil revenue was approximately 41.9% higher during the nine months ended September 30, 2022 compared to the same period of 2021 due primarily to increased prices received for our corn oil along with increased pounds of corn oil sold. Our total pounds of corn oil sold increased by approximately 3.5% during the nine months ended September 30, 2022 compared to the same period of 2021, an increase of approximately 686,000 pounds. We produced more corn oil due to increased oil extraction proficiency during the 2022 period compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2021.

Our average cost per bushel of corn increased by approximately ~~43.2%~~21.7% for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2021. We consumed approximately ~~1.7%~~7.9% more bushels of corn during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021 that ~~resulted in slightly less production at the ethanol plant.~~contributed to higher corn cost. Management attributes the increased corn cost per bushel to significantly higher market corn prices and decreased corn availability during our 2022 fiscal period. Management anticipates corn prices to remain higher ~~until the harvest of 2022 begins. After harvest, corn prices are expected to remain stable for the remainder of~~into our ~~2022~~2023 fiscal year.

Our cost of revenues related to natural gas increased by approximately ~~$414,000,~~$1,963,000, an increase of approximately ~~20.8%~~35.7%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2021. This increase was due to higher natural gas costs per MMBtu ~~offset partially by less natural gas usage~~ during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021.

Our average cost per MMBtu of natural gas during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 was approximately ~~22.8% more~~32.6% higher compared to the cost per MMbtu for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. Management attributes this increase in our average natural gas costs to higher market natural gas prices due to high demand and supply shortages.

Our other income ~~decreased~~increased during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021 due primarily to less interest expense and the USDA Biofuel Producer Relief Program payment awarded during the nine months ended September 30, 2022. We had more interest income during the nine months ended September 30, 2022 compared to the same period of 2021 due to ~~lower income~~having more cash on ~~investments~~hand during the ~~three months ended March 31, 2022.~~2022 period. We had less income from our investments

during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021 due to ~~lower~~decreased profitability in the ethanol sector. We had less interest expense during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021 due to lower carrying balances on outstanding debt.

Our cash on hand at ~~March 31,~~September 30, 2022 was less compared to December 31, 2021 due to deferred corn payments and member distribution ~~payments which we made in January 2022.~~payments. We had ~~greater~~more accounts receivable at ~~March 31,~~September 30, 2022 compared to December 31, 2021 due to the timing of our quarter end and the payments received related to the shipments of our products. The value of our inventory was ~~greater~~less at ~~March 31,~~September 30, 2022 compared to December 31, 2021 due to ~~more corn inventory on hand as well as higher~~decreased quantities of corn and ~~ethanol prices which increase the value of our~~finished goods inventory. The asset value of our derivative instruments was greater at ~~March 31,~~September 30, 2022 compared to December 31, 2021 ~~primarily because we had more cash in~~due to recent corn price changes which impacted our ~~margin account as of March 31, 2022 compared to December 31, 2021.~~derivative instruments. We had less prepaid expenses at ~~March 31,~~September 30, 2022 compared to December 31, 2021 due to amortization of our insurance premiums.

The value of our property and equipment was ~~more~~higher at ~~March 31,~~September 30, 2022 compared to December 31, 2021 primarily as a result of the new construction of an additional fermentor as well as construction currently in progress for an additional grain bin and ethanol storage ~~tank, and additional fermentor.~~tank.

The value of our investments was lower at ~~March 31,~~September 30, 2022 compared to December 31, 2021 due to distributions in excess of earnings from our investments during the ~~three~~nine months ended ~~March~~September 30, 2022. We had significantly more other assets at September 30, 2022 compared to December 31, ~~2022.~~2021 due primarily to the prepayment for the firm commitment on natural gas transportation with Northern Natural Gas.

We had ~~less~~more outstanding checks in excess of bank balances at ~~March 31,~~September 30, 2022 compared to December 31, ~~2021.~~2021 due to the timing of our quarter end and payments issued. We use our revolving loan to pay any checks that are presented for payment which exceed the cash we have available in our accounts. Our accounts payable were lower at ~~March 31,~~September 30, 2022 compared to December 31, 2021 due primarily to decreased corn payables at ~~March 31,~~September 30, 2022 compared to December 31, 2021 as the deferred payments were paid during the first quarter of 2022. Our derivative instrument liability was lower at ~~March 31,~~September 30, 2022 compared to December 31, 2021 due to corn price changes, which impacted our derivative instruments. The current portion of our notes payable was unchanged at ~~March 31,~~September 30, 2022 compared to December 31, 2021.

Our main sources of liquidity are cash from our continuing operations, distributions we receive from our investments and amounts we have available to draw on our revolving credit facilities. Management does not anticipate that we will need to raise additional debt or equity financing in the next twelve months and management believes that our current sources of liquidity will be sufficient to continue our operations during that time period. We anticipate that any capital expenditures we undertake will be paid out of cash from operations and existing loans and will not require any additional debt or equity financing.

Currently, we have two revolving loans, which allow us to borrow funds for working capital. These loans are described in greater detail below in the section entitled "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Indebtedness." As of ~~March 31,~~September 30, 2022, we had ~~$2,000,000~~$1,000 outstanding and ~~$44,500,000~~$44,749,000 available to be drawn on our revolving loans, after taking into account the borrowing base calculation. Management anticipates that this is sufficient to maintain our liquidity and continue our operations for the next twelve months.


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021
Net cash (used in) operating activities		$	(22,054,476)	$	(13,759,119)
Net cash provided by operating activities						Net cash provided by operating activities	$	10,272,275	$	16,732,755
Net cash (used in) investing activities	Net cash (used in) investing activities	(2,386,032)		(14,544)		Net cash (used in) investing activities	(11,075,787)		(340,540)
Net cash (used in) financing activities	Net cash (used in) financing activities	(13,362,482)		(3,001,133)		Net cash (used in) financing activities	(27,426,714)		(31,694,584)

Cash Flow From Operations. Our operating activities ~~used more~~provided less cash during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021, due primarily to decreased net income, a larger increase in accounts receivable, and ~~more cash used by~~a larger decrease in accounts payable during the 2022 period partially offset by andistributions in excess of earnings on investments and a decrease in ~~accounts receivable during the 2022 period.~~inventory.

Cash Flow From Investing Activities. Our investing activities used more cash during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021, due to the construction of an additional grain bin, ethanol storage tank, and additional ~~fermentor.~~fermentor as well as prepayment for our natural gas transportation services agreement.

Cash Flow From Financing Activities. Our financing activities used ~~more~~less cash during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the same period of 2021, due primarily to less payments on long-term debt partially offset by increased distributions paid to members during the 2022 period.

In the next 12 months, the Company plans to reinvest its cash into current business operations and to use cash for the design and construction of an ~~eighth fermentor and the design and construction of an~~ additional grain storage bin. The Company will also use its cash for ~~Dakota Ethanol's design~~prepayments for the firm commitment of natural gas transportation from Northern Natural Gas and ~~construction of a 2 million gallon ethanol storage tank.~~may provide further distributions to its members. In the long term, the Company plans to reinvest its cash into current business operations and may provide further distributions to its members.

On October 11, 2021, we entered into a Fourth Amendment to the credit agreement (the "Fourth Amendment"). Under the Fourth Amendment, the operating ~~lines's~~lines' maturity date was extended to November 1, 2023. Interest on the outstanding principal balance of the operating line will accrue at the ~~Secured Overnight Financing Rate ("SOFR") 30-Day Average Rate~~SOFR 30 plus 305 basis points. The available credit on the reducing revolving note is ~~$44,500,000.~~$42,749,000. Interest on the outstanding principal balance of the revolving loan and term loan will accrue at the SOFR ~~30-Day Average Rate~~30 plus 330 basis points. The working

capital covenant was increased to $13,500,000, and the net worth covenant was increased to $28,000,0000. Dakota Ethanol may make distributions in an amount up to 75% of our prior year's net income, so long as the Company's working capital stays above $18,000,000 post distribution. The combined distributions for 2021 and 2022 shall also be limited to 75% of the combined net income of 2020 and 2021.

Dakota Ethanol has a revolving promissory note from FCSA in an amount up to $2,000,000 or the amount available in accordance with the borrowing base calculation, whichever is less. Interest on the outstanding principal balance will accrue at 305 basis points above the SOFR ~~30-Day Average Rate~~30 and is not subject to a floor. The rate was ~~3.1%~~5.35% at ~~March 31,~~September 30, 2022. There is a non-use fee of 0.25% per anuum on the unused portion of the ~~$2,000,000~~ availability. The note is collateralized by substantially all assets of the Company. The note expires on November 1, 2023. On ~~March 31,~~September 30, 2022, Dakota Ethanol had $0 outstanding and $2,000,000 available to be drawn on the revolving promissory note under the borrowing base.

Dakota Ethanol has a reducing revolving promissory note from FCSA in the amount up to $46,250,000 or the amount available in accordance with the borrowing availability under the credit agreement. The amount Dakota Ethanol can borrow on the note decreases by $1,750,000 semi-annually starting on July 1, 2021 until the maximum balance reaches $32,250,000 on July 1, 2025. The note matures on January 1, 2026. Interest on the outstanding principal balance will accrue at the SOFR ~~30-Day Average Rate~~30 plus 330 basis points. The interest rate is not subject to a floor. The rate was ~~3.35%~~5.60% at ~~March 31,~~September 30, 2022. The note contains a non-use fee of 0.5% per annum on the unused portion of the note. On ~~March 31,~~September 30, 2022, Dakota Ethanol had ~~$2,000,000~~$1,000 outstanding and ~~$44,500,000~~$42,749,000 available to be drawn on the note.

On August 1, 2017, Dakota Ethanol executed a term note with FCSA in the amount of $8 million. Dakota Ethanol agreed to make monthly interest payments starting September 1, 2017 and annual principal payments of $1,000,000 starting on August 1, 2018. The payment that was due in August 2020 was deferred to August 2025. The notes matures on August 1, 2025. Interest on the outstanding principal balance will accrue at 330 basis points above the SOFR ~~30-Day Average Rate~~30 and is not subject to a floor. The rate was ~~3.35%~~5.60% at ~~March 31,~~September 30, 2022. On ~~March 31,~~September 30, 2022, Dakota Ethanol had ~~$5,000,000~~$4,000,000 outstanding on the note.

Our credit facilities with FCSA are subject to various loan covenants. If we fail to comply with these loan covenants, FCSA can declare us to be in default of our loans. The material loan covenants applicable to our credit facilities are our working capital covenant, local net worth covenant and our debt service coverage ratio. We are required to maintain working capital (current assets minus current liabilities plus availability on our revolving loan) of at least $13.5 million. We are required to maintain local net worth (total assets minus total liabilities minus the value of certain investments) of at least $28 million. We are required to maintain a debt service coverage ratio of at least 1.25:1.00. Dakota Ethanol may make distributions in an amount up to 75% of prior year's net income, so long as the Company's working capital stays above $18,000,000 post distribution. The combined distributions for 2021 and 2022 shall also be limited to 75% of the combined net income of 2020 and 2021.

As of ~~March 31,~~September 30, 2022, we were in compliance with our financial covenants under the FCSA loans. Management's current financial projections indicate that we will be in compliance with our financial covenants for the next 12 months and we expect to remain in compliance thereafter. Management does not believe that it is reasonably likely that we will fall out of compliance with our material loan covenants in the next 12 months. If we fail to comply with the terms of our credit agreements with FCSA, and FCSA refuses to waive the non-compliance, FCSA may require us to immediately repay all amounts outstanding on our loans.

Management uses estimates and assumptions in preparing our consolidated 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 consolidated financial statements, we believe that the following are the most critical:

We enter into short-term forward option and futures contracts as a means of securing corn for the ethanol plant and managing exposure to changes in commodity prices. We enter into short-term forward, option and futures contracts for sales of ethanol to manage exposure to changes in commodity prices. All of our derivatives are designated as non-hedge derivatives, and accordingly are recorded at fair value with changes in fair value recognized in net income or treated as normal purchases and sales contracts and analyzed for inherent losses. Although the contracts are considered economic hedges of specified risks, they are not designated as nor accounted for as hedging instruments.

Unrealized gains and losses related to derivative contracts for corn and natural gas purchases are included as a component of cost of revenues and derivative contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements. The fair values of derivative contracts are presented on the accompanying balance sheets as derivative financial instruments.

Annually, as well as when an event triggering impairment may have occurred, the Company performs an impairment test on goodwill which compares the fair value of the reporting unit with its carrying amount. An impairment charge is recognized, if necessary, for the amount by which the carrying value exceeds the fair value up to the amount of the goodwill attributed to the reporting unit. The Company performs the annual analysis as of December 31 of each fiscal year.

The Company generally recognizes revenue at a point in time when performance obligations are satisfied. Revenue from the production of ethanol and related products is recorded when control transfers to customers. Generally, ethanol and related products are shipped FOB shipping point, based on written contract terms between Dakota Ethanol and its customers. Collectability of revenue is reasonably assured based on historical evidence of collectability between Dakota Ethanol and its customers. Interest income is recognized as earned.

financial instruments as part of an overall strategy to manage market risk. We use cash, futures and option contracts to hedge changes to the commodity prices of corn and natural gas. We do not enter into these derivative financial instruments for trading or speculative purposes, nor do we designate these contracts as hedges for accounting purposes.

We are exposed to market risk from changes in interest rates. Exposure to interest rate risk results primarily from holding loans which bear variable interest rates. As of ~~March 31,~~September 30, 2022, we had ~~$7,000,000~~$4,001,000 outstanding on our variable interest rate loans with interest accruing at a rate of ~~3.35%~~5.60%. Our variable interest rates are calculated by adding a set basis to the SOFR ~~30-Day Average Rate.~~30. If we were to experience a 10% increase in the SOFR ~~30-Day Average Rate,~~30, the annual effect such change would have on our income statement, based on the amount we had outstanding on our variable interest rate loans as of ~~March 31,~~September 30, 2022, would be approximately ~~$350.~~$9,200.

We are exposed to market risk from changes in commodity prices. Exposure to commodity price risk results from our dependence on corn and natural gas in the ethanol production process. We seek to minimize the risks from fluctuations in the prices of corn and natural gas through the use of hedging instruments. In practice, as markets move, we actively manage our risk and adjust hedging strategies as appropriate. Although we believe our hedge positions accomplish an economic hedge against our future purchases, they are not designated as such for hedge accounting purposes, which would match the gain or loss on our hedge positions to the specific commodity purchase being hedged. We are marking to market our hedge positions, which means as the current market price of our hedge positions changes, the gains and losses are immediately recognized in our cost of revenues. Our exposure to commodity price risk may be heightened due to the crisis in Ukraine.

The immediate recognition of hedging gains and losses can cause net income to be volatile from quarter to quarter due to the timing of the change in value of the derivative instruments relative to the cost and use of the commodity being hedged. We recorded a combined increase to our cost of revenues of approximately ~~$4,389,000~~$534,000 related to derivative instruments for the quarter ended ~~March 31,~~September 30, 2022. We recorded a combined decrease to our cost of revenues of approximately ~~$435,000~~$243,000 related to derivative instruments for the quarter ended ~~March 31,~~September 30, 2021. There are several variables that could affect the extent to which our derivative instruments are impacted by price fluctuations in the cost of corn or natural gas. However, it is likely that commodity cash prices will have the greatest impact on the derivatives instruments with delivery dates nearest the current cash price.

As of ~~March 31,~~September 30, 2022, we were committed to purchasing approximately ~~1,556,000~~1,385,000 MMBtus of natural gas with an average price of ~~$3.57~~$4.49 per MMBtu. Under these arrangements, the Company assumes the risk of a price decrease in the market price of natural gas between the time the price is fixed and the time the natural gas is delivered. The Company accounts for these transactions as normal purchases, and accordingly, does not mark these transactions to market. The natural gas purchases represent approximately ~~77%~~68% of the projected annual plant requirements.

A sensitivity analysis has been prepared to estimate our exposure to corn, natural gas and ethanol price risk. Market risk related to these factors is estimated as the potential change in income resulting from a hypothetical 10% adverse change in the average cost of our corn and natural gas prices and average ethanol price as of ~~March 31,~~September 30, 2022, net of the forward and future contracts used to hedge our market risk for corn and natural gas usage requirements. The volumes are based on our expected use and sale of these commodities for a one year period from ~~March 31,~~September 30, 2022. The results of this analysis, which may differ from actual results, are as follows:


		Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price		Approximate Adverse Change to Income			Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price		Approximate Adverse Change to Income
Ethanol	Ethanol	92,000,000	Gallons	10	%	$	16,560,000	Ethanol	92,000,000	Gallons	10	%	$	22,080,000
Corn	Corn	28,610,522	Bushels	10	%	$	15,712,898	Corn	30,666,667	Bushels	10	%	$	14,741,103
Natural Gas	Natural Gas	1,980,000	MMBTU	10	%	$	516,384	Natural Gas	2,070,000	MMBTU	10	%	$	730,014

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures.

Our management, including our Chief Executive Officer (the principal executive officer), Scott Mundt, along with our Chief Financial Officer (the principal financial officer), Rob Buchholtz, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of ~~March 31,~~September 30, 2022. Based on this review and evaluation, these officers believe that our disclosure controls and procedures are effective in ensuring that material information related to us is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission.

From time to time in the ordinary course of business, Dakota Ethanol or Lake Area Corn Processors may be named as a defendant in legal proceedings related to various issues, including, worker's compensation claims, tort claims, or contractual disputes. We are not currently involved in any material legal proceedings, directly or indirectly, and we are not aware of any claims pending or threatened against us or any of the managers that could result in the commencement of material legal proceedings.

The following risk factors are provided due to material changes from the risk factors previously disclosed in our annual report on Form 10-K for the fiscal year ended December 31, 2021. The risk factors set forth below should be read in conjunction with the risk factors section and the Management's Discussion and Analysis section included in our annual report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities Exchange Commission on March 3, 2021.

In late February of 2022, Russia initiated a military operation in Ukraine. The Black Sea region is a key international grain and fertilizer export market and the conflict between Russia and Ukraine could continue to disrupt supply and logistics, cause volatility in prices, and impact global margins due to increased commodity, energy, and input costs. The Company currently does not purchase products directly from this region, however, the impact to the global supply could put the Company’s ability to secure product at risk over time.

To the extent the conflict between Russia and Ukraine adversely affects our business, it may also have the effect of heightening other risks disclosed in Part I, “Item 1A. Risk Factors” in the Company's 2021 Annual Report on Form 10-K, any of which could materially and adversely affect the Company's financial condition and results of operations. However, due to the continually evolving nature of the conflict, the potential impact that the conflict could have on such risk factors, and others that cannot yet be identified, remains uncertain. The Company continues to monitor the conflict and assess alternatives to mitigate these risks.

Ukraine is the third largest exporter of grain in the world. Russia is one of the largest producers of natural gas and oil and is the largest exporter of fertilizers. The commodity price impact of the war in Ukraine has been a sharp and sustained rise in grain and energy prices, including corn and natural gas. In addition, the war in Ukraine has adversely affected and may continue to adversely affect global supply chains resulting in further commodity price inflation for our production inputs. Lower fertilizer supplies may also impact future growing seasons, further impacting grain supplies and prices. Also, given high global grain prices, U.S. farmers may prefer to lock in prices and export additional volumes, reducing domestic grain supplies and resulting in further inflationary pressures.

The Organization of Petroleum Exporting Countries and their allies (collectively, OPEC+), is an intergovernmental organization that seeks to manage the price and supply of oil on the global energy market. Actions taken by OPEC+ members, including those taken alongside other oil exporting nations, have a significant impact on global oil supply and pricing. For example, OPEC+ and certain other oil exporting nations have previously agreed to take measures, including production cuts, to support crude oil prices. In March 2020, members of OPEC+ considered extending and potentially increasing these oil production cuts, however these negotiations were unsuccessful. As a result, Saudi Arabia announced an immediate reduction in export prices and Russia announced that all previously agreed oil production cuts expired on April 1, 2020. These actions led to an immediate and steep decrease in oil prices. Conversely, sanctions imposed on Russia in the last few months have increased prices. There can be no assurance that OPEC+ members and other oil exporting nations will agree to future production cuts or other actions to support and stabilize oil prices, nor can there be any assurance that sanctions or other global conflicts will not further impact oil prices. Uncertainty regarding future sanctions or actions to be taken by OPEC+ members or other oil exporting countries could lead to increased volatility in the price of oil and natural gas, which could adversely affect our business, future financial condition and results of operations.


Exhibit No.			Exhibit
31.1			Certificate Pursuant to 17 CFR 240.13a-14(a)*
31.2			Certificate Pursuant to 17 CFR 240.13a-14(a)*
32.1			Certificate Pursuant to 18 U.S.C. Section 1350*
32.2			Certificate Pursuant to 18 U.S.C. Section 1350*
101.INS*			XBRL Instance Document
101.SCH*			XBRL Schema Document
101.CAL*			XBRL Calculation Document
101.LAB*			XBRL Labels Linkbase Document
101.PRE*			XBRL Presentation Linkbase Document
101.DEF*			XBRL Definition Linkbase Document


x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended
~~March 31,~~September 30, 2022
or
o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to

	Commission file number:	000-50254


			Page No.
Part I FINANCIAL INFORMATION			3
Item 1. Financial Statements (Unaudited)			3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2122
Item 3. Quantitative and Qualitative Disclosures About Market Risk			2731
Item 4. Controls and Procedures			2933

Part II OTHER INFORMATION			2933
Item 1. Legal Proceedings			2933
Item 1A. Risk Factors			3033
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3134
Item 3. Defaults Upon Senior Securities			3134
Item 4. Mine Safety Disclosures			3135
Item 5. Other Information			3135
Item 6. Exhibits			3135
Signatures			3236


		LAKE AREA CORN PROCESSORS, LLC

Date:	~~May 16,~~November 14, 2022	/s/ Scott Mundt
		Scott Mundt
		President and Chief Executive Officer (Principal Executive Officer)

Date:	~~May 16,~~November 14, 2022	/s/ Robbi Buchholtz
		Robbi Buchholtz
		Chief Financial Officer (Principal Financial and Accounting Officer)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered