UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022


¨			☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

☒ COMMISSION FILE NO. 000-50253


~~South Dakota Soybean Processors,~~SOUTH DAKOTA SOYBEAN PROCESSORS LLC
(Exact name of registrant as specified in its charter)


~~South Dakota~~SD						46-0462968
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

100 Caspian ~~Avenue;~~Ave; PO Box 500 Volga, ~~South Dakota~~SD						57071
(Address of Principal Executive Offices						(Zip Code)


(605) 627-9240
(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.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x ~~Yes~~No ¨

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

Emerging Growth Company

(do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for company with an new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

¨ Yes x No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: On May 12, ~~2021,~~2022, the registrant had 30,419,000 capital units outstanding.

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

South Dakota Soybean Processors, LLC

Condensed Financial Statements

March 31, ~~2021~~2022 and ~~2020~~2021

South Dakota Soybean Processors, LLC

Condensed Balance Sheets


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	3,833,044	$	3,650,950	Cash and cash equivalents	$	603,997	$	833,738
Trade accounts receivable	Trade accounts receivable	28,219,622		28,990,655		Trade accounts receivable	42,789,397		36,571,001
Inventories	Inventories	96,563,212		69,593,473		Inventories	122,891,120		95,066,385
Commodity derivative instruments	Commodity derivative instruments	33,438,012		28,417,680		Commodity derivative instruments	25,774,065		11,933,759
Margin deposits	Margin deposits	0		6,018,001		Margin deposits	9,471,104		2,099,626
Prepaid expenses	Prepaid expenses	2,081,924		2,093,622		Prepaid expenses	1,964,002		2,692,338
Total current assets	Total current assets	164,135,814		138,764,381		Total current assets	203,493,685		149,196,847

Property and equipment	Property and equipment	123,875,225		122,195,099		Property and equipment	134,646,463		133,919,053
Less accumulated depreciation	Less accumulated depreciation	(59,151,319)		(57,963,905)		Less accumulated depreciation	(62,770,208)		(61,386,445)
Total property and equipment, net	Total property and equipment, net	64,723,906		64,231,194		Total property and equipment, net	71,876,255		72,532,608

Other assets	Other assets					Other assets
Investments in related parties	Investments in related parties	9,327,890		9,327,890		Investments in related parties	10,764,310		10,764,310
Investments in cooperatives	Investments in cooperatives	1,559,800		1,539,293		Investments in cooperatives	1,705,549		1,559,800
Right-of-use lease asset, net	Right-of-use lease asset, net	11,285,215		11,960,289		Right-of-use lease asset, net	13,763,312		11,232,558
Total other assets	Total other assets	22,172,905		22,827,472		Total other assets	26,233,171		23,556,668

Total assets	Total assets	$	251,032,625	$	225,823,047	Total assets	$	301,603,111	$	245,286,123

(continued on following page)

South Dakota Soybean Processors, LLC

Condensed Balance Sheets (continued)


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
Liabilities and Members' Equity	Liabilities and Members' Equity					Liabilities and Members' Equity
Current liabilities	Current liabilities					Current liabilities
Excess of outstanding checks over bank balance	Excess of outstanding checks over bank balance	$	13,487,522	$	8,263,020	Excess of outstanding checks over bank balance	$	7,484,051	$	10,698,239
Current maturities of long-term debt	Current maturities of long-term debt	4,000,000		0		Current maturities of long-term debt	4,000,000		2,902,473
Note payable - seasonal loan	Note payable - seasonal loan	37,283,162		0		Note payable - seasonal loan	57,816,612		—
Current operating lease liabilities	Current operating lease liabilities	5,656,417		5,846,456		Current operating lease liabilities	2,146,048		1,958,707
Accounts payable	Accounts payable	1,645,652		1,506,779		Accounts payable	1,315,754		1,931,911

Accrued commodity purchases	Accrued commodity purchases	30,984,546		44,962,904		Accrued commodity purchases	42,883,204		60,892,294
Commodity derivative instruments	Commodity derivative instruments	36,324,870		41,940,744		Commodity derivative instruments	43,529,726		27,644,858
Margin deposit deficit		3,522,041		0

Accrued expenses	Accrued expenses	2,634,875		3,083,591		Accrued expenses	3,959,923		4,305,749
Accrued interest	Accrued interest	119,285		40,564		Accrued interest	171,620		67,126
Deferred liabilities - current	Deferred liabilities - current	2,566,578		1,728,407		Deferred liabilities - current	3,396,250		1,347,409
Total current liabilities	Total current liabilities	138,224,948		107,372,465		Total current liabilities	166,703,188		111,748,766

Long-term liabilities	Long-term liabilities					Long-term liabilities
Long-term debt, net of current maturities and unamortized debt issuance costs	Long-term debt, net of current maturities and unamortized debt issuance costs	15,987,797		17,499,868		Long-term debt, net of current maturities and unamortized debt issuance costs	11,992,678		13,991,458
Long-term operating lease liabilities	Long-term operating lease liabilities	5,628,798		6,113,834		Long-term operating lease liabilities	8,533,335		6,130,994

Total long-term liabilities	Total long-term liabilities	21,616,595		23,613,702		Total long-term liabilities	20,526,013		20,122,452

Commitments and contingencies (Notes 5, 6, 7, and 12)	Commitments and contingencies (Notes 5, 6, 7, and 12)	0		0		Commitments and contingencies (Notes 5, 6, 7, and 12)	0		0

Members' equity	Members' equity					Members' equity
Class A Units, no par value, 30,419,000 units issued and outstanding at March 31, 2021 and December 31, 2020		91,191,082		94,836,880
Class A Units, no par value, 30,419,000 units issued and outstanding at March 31, 2022 and December 31, 2021						Class A Units, no par value, 30,419,000 units issued and outstanding at March 31, 2022 and December 31, 2021	114,373,910		113,414,905

Total liabilities and members' equity	Total liabilities and members' equity	$	251,032,625	$	225,823,047	Total liabilities and members' equity	$	301,603,111	$	245,286,123

The accompanying notes are an integral part of these condensed financial statements.

South Dakota Soybean Processors, LLC

Condensed Statements of Operations (Unaudited)

For the Three-Month Periods Ended March 31, ~~2021~~2022 and ~~2020~~2021


		2021		2020			2022		2021

Net revenues	Net revenues	$	123,627,541	$	98,723,412	Net revenues	$	171,724,126	$	123,627,541

Cost of revenues:	Cost of revenues:					Cost of revenues:
Cost of product sold	Cost of product sold	99,264,660		80,200,506		Cost of product sold	132,866,162		99,264,660
Production	Production	7,363,387		7,423,370		Production	8,997,876		7,363,387
Freight and rail	Freight and rail	10,198,191		9,211,835		Freight and rail	10,879,590		10,198,191
Brokerage fees	Brokerage fees	172,092		163,238		Brokerage fees	170,393		172,092
Total cost of revenues	Total cost of revenues	116,998,330		96,998,949		Total cost of revenues	152,914,021		116,998,330

Gross profit (loss)		6,629,211		1,724,463
Gross profit						Gross profit	18,810,105		6,629,211

Operating expenses:	Operating expenses:					Operating expenses:
Administration	Administration	1,117,842		1,024,729		Administration	1,398,466		1,117,842

Operating income (loss)		5,511,369		699,734
Operating income						Operating income	17,411,639		5,511,369

Other income (expense):	Other income (expense):					Other income (expense):
Interest expense	Interest expense	(317,152)		(349,987)		Interest expense	(387,560)		(317,152)
Other non-operating income (expense)	Other non-operating income (expense)	224,728		(322,217)		Other non-operating income (expense)	574,161		224,728
Patronage dividend income	Patronage dividend income	365,147		195,553		Patronage dividend income	699,595		365,147
Total other income (expense)	Total other income (expense)	272,723		(476,651)		Total other income (expense)	886,196		272,723

Income (loss) before income taxes		5,784,092		223,083

Income tax benefit (expense)		0		0

Net income (loss)		$	5,784,092	$	223,083

Net income						Net income	$	18,297,835	$	5,784,092



Basic and diluted earnings (loss) per capital unit		$	0.19	$	0.01
Basic and diluted earnings per capital unit						Basic and diluted earnings per capital unit	$	0.60	$	0.19

Weighted average number of capital units outstanding for calculation of basic and diluted earnings (loss) per capital unit		30,419,000		30,419,000
Weighted average number of capital units outstanding for calculation of basic and diluted earnings per capital unit						Weighted average number of capital units outstanding for calculation of basic and diluted earnings per capital unit	30,419,000		30,419,000

The accompanying notes are an integral part of these condensed financial statements.

South Dakota Soybean Processors, LLC

Condensed Statements of Changes in Members' Equity (Unaudited)

For the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021


		Class A Units				Class A Units
		Units	Amount			Units	Amount

Balances, December 31, 2019		30,419,000	$	85,947,333
Net income		—	223,083
Distribution to members		—	(6,692,180)
Balances, March 31, 2020		30,419,000	$	79,478,236

Balances, December 31, 2020	Balances, December 31, 2020	30,419,000	$	94,836,880	Balances, December 31, 2020	30,419,000	$	94,836,880
Net income	Net income	—	5,784,092		Net income	—	5,784,092
Distribution to members	Distribution to members	—	(9,429,890)		Distribution to members	—	(9,429,890)
Balances, March 31, 2021	Balances, March 31, 2021	30,419,000	$	91,191,082	Balances, March 31, 2021	30,419,000	$	91,191,082

Balances, December 31, 2021					Balances, December 31, 2021	30,419,000	$	113,414,905
Net income					Net income	—	18,297,835
Distribution to members					Distribution to members	—	(17,338,830)
Balances, March 31, 2022					Balances, March 31, 2022	30,419,000	$	114,373,910

The accompanying notes are an integral part of these condensed financial statements.

South Dakota Soybean Processors, LLC

Condensed Statements of Cash Flows (Unaudited)

For the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021


		2021		2020			2022		2021
Operating activities	Operating activities					Operating activities
Net income (loss)		$	5,784,092	$	223,083
Net income						Net income	$	18,297,835	$	5,784,092

Charges and credits to net income not affecting cash:	Charges and credits to net income not affecting cash:					Charges and credits to net income not affecting cash:
Depreciation and amortization	Depreciation and amortization	1,270,770		1,188,309		Depreciation and amortization	1,386,716		1,270,770
Net (gain) loss recognized on derivative activities	Net (gain) loss recognized on derivative activities	5,816,260		(5,138,750)		Net (gain) loss recognized on derivative activities	7,263,904		5,816,260
Gain on sales of property and equipment		1,905		0
Loss on sale of property and equipment						Loss on sale of property and equipment	4,381		1,905

Non-cash patronage dividends	Non-cash patronage dividends	(75,411)		(43,405)		Non-cash patronage dividends	(145,749)		(75,411)
Forgiveness of Paycheck Protection Program loan	Forgiveness of Paycheck Protection Program loan	(10,000)		0		Forgiveness of Paycheck Protection Program loan	—		(10,000)
Change in current assets and liabilities	Change in current assets and liabilities	(46,470,743)		(10,946,028)		Change in current assets and liabilities	(62,664,425)		(46,470,743)

Net cash provided by (used for) operating activities	Net cash provided by (used for) operating activities	(33,683,127)		(14,716,791)		Net cash provided by (used for) operating activities	(35,857,338)		(33,683,127)

Investing activities	Investing activities					Investing activities
Purchase of investments		0		(404,329)

Retirement of patronage dividends	Retirement of patronage dividends	54,904		66,210		Retirement of patronage dividends	—		54,904

Purchase of property and equipment	Purchase of property and equipment	(1,764,167)		(1,864,856)		Purchase of property and equipment	(733,524)		(1,764,167)

Net cash provided by (used for) investing activities	Net cash provided by (used for) investing activities	(1,709,263)		(2,202,975)		Net cash provided by (used for) investing activities	(733,524)		(1,709,263)

Financing activities	Financing activities					Financing activities
Change in excess of outstanding checks over bank balances	Change in excess of outstanding checks over bank balances	5,224,502		(2,615,647)		Change in excess of outstanding checks over bank balances	(3,214,188)		5,224,502
Net proceeds (payments) from seasonal borrowings	Net proceeds (payments) from seasonal borrowings	37,283,162		17,972,775		Net proceeds (payments) from seasonal borrowings	57,816,612		37,283,162
Distributions to members	Distributions to members	(9,429,890)		(6,692,180)		Distributions to members	(17,338,830)		(9,429,890)
Payments for debt issue costs		0		(10,000)

Proceeds from long-term debt	Proceeds from long-term debt	11,839,877		10,000,000		Proceeds from long-term debt	4,224,724		11,839,877
Principal payments on long-term debt	Principal payments on long-term debt	(9,343,167)		(2,000,000)		Principal payments on long-term debt	(5,127,197)		(9,343,167)
Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	35,574,484		16,654,948		Net cash provided by (used for) financing activities	36,361,121		35,574,484

Net change in cash and cash equivalents	Net change in cash and cash equivalents	182,094		(264,818)		Net change in cash and cash equivalents	(229,741)		182,094

Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	3,650,950		624,681		Cash and cash equivalents, beginning of period	833,738		3,650,950

Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	3,833,044	$	359,863	Cash and cash equivalents, end of period	$	603,997	$	3,833,044

Supplemental disclosures of cash flow information	Supplemental disclosures of cash flow information					Supplemental disclosures of cash flow information
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest	Interest	$	238,431	$	300,888	Interest	$	283,066	$	238,431

Income taxes	Income taxes	$	0	$	0	Income taxes	$	—	$	—

The accompanying notes are an integral part of these condensed financial statements.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Note 1 - Principal Activity and Significant Accounting Policies

The unaudited condensed financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although South Dakota Soybean Processors, LLC (the “Company”, “LLC”, “we”, “our”, or “us”) believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included in the accompanying condensed financial statements. The results of operations and cash flows for interim periods are not necessarily indicative of results for a full year due in part to the seasonal nature of some of the Company’s businesses. The balance sheet data as of December 31, ~~2020~~2021 has been derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

These statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, ~~2020,~~2021, included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March ~~31, 2021.~~18, 2022 and amended on Form 10-K/A filed with the SEC on April 27, 2022.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue

The Company accounts for all of its revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers.

The Company principally generates revenue from merchandising and transporting manufactured agricultural products used as ingredients in food, feed, energy and industrial products. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any amounts collected on behalf of third parties (e.g. - taxes). The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product to a customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms). Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of revenues. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Payments received in advance to the transfer of goods, or "contract liabilities", are included in "Deferred liabilities - current" on the Company's condensed balance sheets. These customer prepayments totaled ~~$2,566,578~~$3,396,250 and ~~$1,728,407~~$1,347,409 as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Of the ~~$1,728,407~~$1,347,409 balance as of December 31, ~~2020, contract liabilities~~2021, the Company recognized $1,340,132 as revenues ~~were $392,984~~ for the three months ended March 31, ~~2021.~~2022. Of the ~~$313,347~~$1,728,407 customer prepayments as of December 31, ~~2019,~~2020, the Company recognized ~~$224,655~~$392,984 of contract liabilities as revenues during the three months ended March 31, ~~2020.~~2021.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

The following table presents a disaggregation of revenue from contracts with customers for the three month periods ended March 31, ~~2021~~2022 and ~~2020,~~2021, by product type:


		2021		2020			2022		2021

Soybean meal and hulls	Soybean meal and hulls	$	79,223,026	$	62,692,880	Soybean meal and hulls	$	87,424,050	$	79,223,026
Soybean oil and oil byproducts	Soybean oil and oil byproducts	44,404,515		36,030,532		Soybean oil and oil byproducts	84,300,076		44,404,515

Totals	Totals	$	123,627,541	$	98,723,412	Totals	$	171,724,126	$	123,627,541

Recent accounting pronouncements

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

Note 2 - Accounts Receivable

Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms, which is generally 30 days from invoice date. Accounts considered uncollectible are written off. The Company’s estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any.

The following table presents the aging analysis of trade receivables as of March 31, ~~2021~~2022 and December 31, ~~2020:~~2021:


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Past due:	Past due:					Past due:
Less than 30 days past due	Less than 30 days past due	$	4,022,668	$	4,827,150	Less than 30 days past due	$	6,667,297	$	11,431,358
30-60 days past due	30-60 days past due	424,009		85,177		30-60 days past due	998,355		693,286
60-90 days past due	60-90 days past due	0		11,366		60-90 days past due	78,866		56,831
Greater than 90 days past due	Greater than 90 days past due	20		43,524		Greater than 90 days past due	—		144,572
Total past due	Total past due	4,446,697		4,967,217		Total past due	7,744,518		12,326,047
Current	Current	23,772,925		24,023,438		Current	35,044,879		24,244,954

Totals	Totals	$	28,219,622	$	28,990,655	Totals	$	42,789,397	$	36,571,001

The following table provides information regarding the Company's allowance for doubtful accounts receivable as of March 31, 2022 and December 31, 2021:


	March 31, 2022		December 31, 2021

Balances, beginning of period	$	—	$	—
Amounts charged (credited) to costs and expenses	(113,708)		258,747
Additions (deductions)	113,708		(258,747)

Balances, end of period	$	—	$	—

In general, cash received is applied to the oldest outstanding invoice first, unless payment is for a specified invoice. The Company, on a case by case basis, may charge a late fee of 1.5% per month on past due receivables.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Note 3 - Inventories

The Company’s inventories consist of the following at March 31, ~~2021~~2022 and December 31, ~~2020:~~2021:


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Finished goods	Finished goods	$	48,286,682	$	35,502,780	Finished goods	$	68,917,593	$	60,233,567
Raw materials	Raw materials	48,025,892		33,824,265		Raw materials	53,567,016		34,501,561
Supplies & miscellaneous	Supplies & miscellaneous	250,638		266,428		Supplies & miscellaneous	406,511		331,257

Totals	Totals	$	96,563,212	$	69,593,473	Totals	$	122,891,120	$	95,066,385

Finished goods and raw materials are valued at estimated market value, which approximates net realizable value. Supplies and other inventories are stated at the lower of cost or net realizable value.

~~South Dakota Soybean Processors, LLC~~

~~Notes to Condensed Financial Statements~~

Note 4 - Property and Equipment

The following is a summary of the Company's property and equipment at March 31, ~~2021~~2022 and December 31, ~~2020:~~2021:


		2021						2020			2022						2021
		Cost		Accumulated Depreciation		Net		Net			Cost		Accumulated Depreciation		Net		Net
Land	Land	$	516,326	$	0	$	516,326	$	516,326	Land	$	516,326	$	—	$	516,326	$	516,326
Land improvements	Land improvements	2,406,915		(797,325)		1,609,590		1,647,052		Land improvements	2,538,645		(950,100)		1,588,545		1,628,203
Buildings and improvements	Buildings and improvements	22,443,026		(10,193,289)		12,249,737		12,391,726		Buildings and improvements	25,996,808		(10,792,183)		15,204,625		15,361,423
Machinery and equipment	Machinery and equipment	88,433,579		(46,888,448)		41,545,131		41,674,080		Machinery and equipment	91,225,151		(49,526,568)		41,698,583		42,737,783
Railroad cars	Railroad cars	5,852,292		(177,270)		5,675,022		5,704,283		Railroad cars	10,679,356		(318,451)		10,360,905		5,587,237
Company vehicles	Company vehicles	151,682		(96,243)		55,439		59,613		Company vehicles	151,682		(112,936)		38,746		42,919
Furniture and fixtures	Furniture and fixtures	1,387,880		(998,744)		389,136		408,288		Furniture and fixtures	1,387,880		(1,069,970)		317,910		335,665
Construction in progress	Construction in progress	2,683,525		0		2,683,525		1,829,826		Construction in progress	2,150,615		—		2,150,615		6,323,052

Totals	Totals	$	123,875,225	$	(59,151,319)	$	64,723,906	$	64,231,194	Totals	$	134,646,463	$	(62,770,208)	$	71,876,255	$	72,532,608

Depreciation of property and equipment was ~~$1,269,550~~$1,385,495 and ~~$1,187,316~~$1,269,550 for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Note 5 - Note Payable – Seasonal Loan

Prior to the ~~amendments~~amendment described in Note 13, the Company ~~had~~has entered into a revolving credit agreement with CoBank which expires December 1, ~~2021.~~2022. The purpose of the credit agreement is to finance the operating needs of the Company. Under this agreement, the Company could borrow up to ~~$45~~$70 million, and advances on the revolving credit agreement are secured. Interest accrues at a variable rate ~~(2.31%~~(2.65% at March 31, ~~2021)~~2022). The Company pays a 0.20% annual commitment fee on any funds not borrowed. There were advances outstanding of ~~$37,283,162~~$57,816,612 and $0 at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The remaining available funds to borrow under the terms of the revolving credit agreement were ~~$7.7~~$12.2 million as of March 31, ~~2021.~~2022.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Note 6 - Long-Term Debt

The following is a summary of the Company's long-term debt at March 31, ~~2021~~2022 and December 31, ~~2020:~~2021:

March 31,
2021 December 31,
2020
Revolving term loan from CoBank, interest at variable rates (2.56% and 2.60% at March 31, 2021 and December 31, 2020, respectively), secured by substantially all property and equipment. Loan matures September 20, 2023. $ 20,000,000 $ 17,503,291
Note payable to U.S. Small Business Authority, due in monthly principal and interest installments, interest rate at 1.00%, unsecured. Note matures July 20, 2022. 0 10,000
Total debt before debt issuance costs 20,000,000 17,513,291
Less current maturities (4,000,000) 0
Less debt issuance costs, net of amortization of $11,797 and $10,577 as of March 31, 2021 and December 31, 2020, respectively (12,203) (13,423)
Total long-term debt $ 15,987,797 $ 17,499,868


	March 31, 2022		December 31, 2021
Revolving term loan from CoBank, interest at variable rates (2.9% and 2.56% at March 31, 2022 and December 31, 2021, respectively), secured by substantially all property and equipment. Loan matures March 20, 2026.	$	16,000,000	$	16,902,473

Less current maturities	(4,000,000)		(2,902,473)
Less debt issuance costs, net of amortization of $16,678 and $15,458 as of March 31, 2022 and December 31, 2021, respectively	(7,322)		(8,542)

Total long-term debt	$	11,992,678	$	13,991,458

The Company entered into an agreement as of ~~January 28, 2020~~December 14, 2021 with CoBank to amend and restate its Credit Agreement, which includes both the revolving term and seasonal loans. Under the terms and conditions of the Credit Agreement, CoBank agreed to make advances to the Company for up to ~~$26,000,000~~$18,000,000 on the revolving term

~~South Dakota Soybean Processors, LLC~~

~~Notes to Condensed Financial Statements~~

loan with a variable effective interest rate of ~~2.56%~~2.90%. The amount available for borrowing on the revolving term loan ~~however,~~ will decrease by $2,000,000 every six months ~~beginning on~~starting March 20, ~~2020, with a scheduled balloon payment for the remaining balance on~~2022 until the loan's maturity date of ~~September~~March 20, ~~2023.~~2026. The Company pays a 0.40% annual commitment fee on any funds not borrowed. The debt issuance costs of $24,000 paid by the Company ~~on this amendment~~ will be amortized over the term of loan. The principal balance outstanding on the revolving term loan was ~~$20,000,000~~$16,000,000 and ~~$17,503,291~~$16,902,473 as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. There were 0no remaining commitments available to borrow on the revolving term loan as of March 31, ~~2021.~~2022.

Under this agreement, the Company is subject to compliance with standard financial covenants and the maintenance of certain financial ratios. The Company was in compliance with all covenants and conditions with CoBank as of March 31, ~~2021.~~

On April 20, 2020, the Company entered into an unsecured promissory note for $1,215,700 under the U.S. Small Business Administration's Paycheck Protection Program (“PPP Loan“), a loan program created under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act“). The PPP Loan is being made through First Bank & Trust, N.A. The PPP Loan was scheduled to mature on July 20, 2022 and had a 1% interest rate. The Company submitted to the SBA a loan forgiveness application on November 20, 2020, with the amount which may be forgiven equal to the sum of qualifying expenses such as payroll, rent obligations, and covered utility payments. The forgiveness application was approved by the SB for $1,205,700 on November 25, 2020 and $10,000 on February 19, 2021.2022.

The following are minimum principal payments on long-term debt obligations for the twelve-month periods ended March 31:


2022		$	4,000,000
2023	2023	4,000,000		2023	$	4,000,000
2024	2024	12,000,000		2024	4,000,000

2025				2025	4,000,000
2026				2026	4,000,000


Total	Total	$	20,000,000	Total	$	16,000,000

Note 7 - Operating Leases

The Company has several operating leases for railcars. These leases have terms ranging from 3-18 years and most do not have renewal terms provided. The leases require the Company to maintain the condition of the railcars, restrict the use of the railcars to specified products, such as soybean meal, hulls or oil, limit usage to the continental United States, Canada or Mexico, require approval to sublease to other entities, and require the Company's submission of its financial statements. Lease expense for all railcars was ~~$760,961~~$664,488 and ~~$783,210~~$760,961 for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively.

~~The following is a schedule of the Company's operating leases for railcars as of March 31, 2021:~~

Lessor Quantity of
Railcars Commencement
Date Maturity
Date Monthly
Payment
American Railcar Leasing 30 7/1/2015 6/30/2021 $ 30,780
Andersons Railcar Leasing Co. 10 7/1/2018 6/30/2023 5,000
Andersons Railcar Leasing Co. 20 7/1/2019 6/30/2026 11,300
Farm Credit Leasing 87 9/1/2020 8/31/2032 34,929
GATX Corporation 14 7/1/2020 6/30/2024 4,200
Midwest Railcar Corporation 64 1/1/2015 12/31/2021 27,200
Trinity Capital 29 11/1/2020 10/31/2023 17,255
Trinity Capital 20 11/1/2020 10/31/2023 11,900
Wells Fargo Rail 112 8/1/2017 7/31/2022 52,557

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Lessor Quantity of
Railcars Commencement
Date Maturity
Date Monthly
Payment
Wells Fargo Rail 107 1/1/2018 12/31/2022 35,845
Wells Fargo Rail 7 1/1/2004 12/31/2021 2,926
Wells Fargo Rail 15 1/1/2004 12/31/2021 5,850
Wells Fargo Rail 8 1/1/2015 12/31/2021 3,600
523 $ 243,342
The following is a schedule of the Company's operating leases for railcars as of March 31, 2022:


Lessor	Quantity of Railcars	Commencement Date	Maturity Date	Monthly Payment

American Railcar Leasing	13	6/1/2021	5/31/2024	$	7,150
Andersons Railcar Leasing Co.	10	7/1/2018	6/30/2023	5,000
Andersons Railcar Leasing Co.	20	7/1/2019	6/30/2026	11,300
Andersons Railcar Leasing Co.	15	11/1/2021	10/31/2026	8,250
Farm Credit Leasing	87	9/1/2020	8/31/2032	34,929
Farm Credit Leasing	8	6/1/2021	5/31/2033	5,966
Farm Credit Leasing	9	10/1/2021	9/30/2033	4,624
GATX Corporation	14	7/1/2020	6/30/2024	4,200
Trinity Capital	29	11/1/2020	10/31/2023	17,255
Trinity Capital	20	11/1/2020	10/31/2023	11,900
Trinity Capital	2	6/1/2021	5/31/2026	980
Wells Fargo Rail	109	3/1/2022	2/28/2027	51,775
Wells Fargo Rail	107	1/1/2018	12/31/2022	35,845
Wells Fargo Rail	7	5/1/2022	4/30/2027	2,765
Wells Fargo Rail	15	5/1/2022	4/30/2027	5,925

	465			$	207,864

The Company also has a number of other operating leases for machinery and equipment. These leases have terms ranging from 3-7 years; however, most of these leases have automatic renewal terms. These leases require monthly payments of $3,779. Rental expense under these other operating leases was ~~$9,741~~$46,416 and ~~$7,681~~$9,741 for the three-month periods ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

On March 19, 2020, the Company entered into an agreement with an entity in the western United States to provide storage and handling services for the Company's soybean meal. The Company ~~will pay~~paid the entity $3,300,000 ~~which is included in current operating lease liabilities on the Company's balance sheet,~~ after the entity's construction of additional storage and handling facilities. The agreement began May 1, 2021 and will mature ~~seven years after completion of the construction~~on April 30, 2027 but includes an additional ~~seven-year~~seven-year renewal period at the sole discretion of the Company. Rental expense under this agreement was $58,929 and $0 for the three months ended March 31, 2022 and 2021, respectively.

Operating leases are included in right-to-use lease assets, current operating lease liabilities, and long-term lease liabilities on the Company's condensed balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company's secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the condensed balance sheet.

Lease expense for these operating leases is recognized on a straight-line basis over the lease terms. The components of lease costs recognized within our condensed statements of operations for the three-month ~~and three-month~~ periods ended March 31, ~~2021~~2022 and ~~2020~~2021 were as follows:

2021 2020
Cost of revenues - Freight and rail $ 760,961 $ 783,210
Cost of revenues - Production 7,608 4,364
Administration expenses 2,133 3,317
Total operating lease costs $ 770,702 $ 790,891

~~The following summarizes the supplemental cash flow information for the three-month periods ended March 31, 2021 and 2020:~~

2021 2020
Cash paid for amounts included in measurement of lease liabilities $ 740,385 $ 777,143
Supplemental non-cash information:
Right-of-use assets obtained in exchange for lease liabilities $ 0 $ 3,300,000



	2022		2021

Cost of revenues - Freight and rail	$	664,488	$	760,961
Cost of revenues - Production	40,085		7,608
Administration expenses	6,331		2,133

Total operating lease costs	$	710,904	$	770,702

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

The following summarizes the supplemental cash flow information for the three-month periods ended March 31, 2022 and 2021:



	2022		2021

Cash paid for amounts included in measurement of lease liabilities	$	749,933	$	762,199

Supplemental non-cash information:
Right-of-use assets obtained in exchange for lease liabilities	$	3,386,523	$	—

The following summarizes the weighted-average remaining lease term and weighted-average discount ~~rate:~~rate as of March 31, 2022:


	~~March 31, 2021~~

Weighted-average remaining lease-term - operating leases (in years)	~~9.1~~7.3

Weighted-average discount rate - operating leases	~~3.2~~3.0	%

The following is a maturity analysis of the undiscounted cash flows of the operating lease liabilities as of March 31, ~~2021:~~2022:


		Railcars		Other		Total			Railcars		Other		Total
Twelve-month periods ended March 31:	Twelve-month periods ended March 31:							Twelve-month periods ended March 31:
2022	2022	$	2,471,800	$	3,341,488	$	5,813,288	2022	$	2,386,915	$	277,622	$	2,664,537
2023	2023	1,600,398		41,907		1,642,305		2023	1,873,449		266,167		2,139,616
2024	2024	824,233		30,453		854,686		2024	1,545,064		253,026		1,798,090
2025	2025	567,348		17,312		584,660		2025	1,518,164		237,778		1,755,942
2026	2026	554,748		2,064		556,812		2026	1,313,639		235,886		1,549,525
Thereafter	Thereafter	2,723,432		1,032		2,724,464		Thereafter	3,081,206		1,905,357		4,986,563
Total lease payments	Total lease payments	8,741,959		3,434,256		12,176,215		Total lease payments	11,718,437		3,175,836		14,894,273
Less amount of lease payments representing interest	Less amount of lease payments representing interest	(880,321)		(10,679)		(891,000)		Less amount of lease payments representing interest	(1,125,420)		(5,541)		(1,130,961)

Total present value of lease payments	Total present value of lease payments	$	7,861,638	$	3,423,577	$	11,285,215	Total present value of lease payments	$	10,593,017	$	3,170,295	$	13,763,312

Note 8 - Member Distribution

On February ~~2, 2021,~~1, 2022, the Company’s Board of Managers approved a cash distribution of approximately ~~$9.4~~$17.3 million, or ~~31.0¢~~57.0¢ per capital unit. The distribution was paid in accordance with the Company’s operating agreement and distribution policy on February ~~4, 2021.~~3, 2022.

Note 9 - Derivative Instruments and Hedging Activities

In the ordinary course of business, the Company enters into contractual arrangements as a means of managing exposure to changes in commodity prices and, occasionally, foreign exchange and interest rates. The Company’s derivative instruments primarily consist of commodity futures, options and forward contracts, and interest rate swaps, caps and floors. Although these contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments. These contracts are recorded on the Company’s condensed balance sheets at fair value as discussed in Note 10, Fair Value.

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the value of the Company’s open futures, options and forward contracts was approximately ~~$(2,886,858)~~$(17,755,661) and ~~$(13,523,064)~~$(15,711,099), respectively.

As of March 31, 2021
Balance Sheet Classification Asset Derivatives Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts Current Assets $ 33,384,458 $ 35,814,167
Foreign exchange contracts Current Assets 53,554 22,594
Interest rate caps and floors Current Liabilities 0 488,109
Totals $ 33,438,012 $ 36,324,870

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements


			As of December 31, 2020						As of March 31, 2022
		Balance Sheet Classification	Asset Derivatives		Liability Derivatives			Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:						Derivatives not designated as hedging instruments:
Commodity contracts	Commodity contracts	Current Assets	$	28,365,908	$	41,196,628	Commodity contracts	Current Assets/Liabilities	$	25,025,966	$	43,082,814
Foreign exchange contracts	Foreign exchange contracts	Current Assets	50,979		48,539		Foreign exchange contracts	Current Assets/Liabilities	27,720		153,747
Interest rate caps and floors	Interest rate caps and floors	Current Liabilities	793		695,577		Interest rate caps and floors	Current Assets/Liabilities	720,379		293,165

Totals	Totals		$	28,417,680	$	41,940,744	Totals		$	25,774,065	$	43,529,726


		As of December 31, 2021
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets/Liabilities	$	11,584,595	$	27,141,888
Foreign exchange contracts	Current Assets/Liabilities	58,673		68,683
Interest rate caps and floors	Current Assets/Liabilities	290,491		434,287

Totals		$	11,933,759	$	27,644,858

During the three-month periods ended March 31, ~~2021~~2022 and ~~2020,~~2021, net realized and unrealized gains (losses) on derivative transactions were recognized in the condensed statements of operations as follows:


		2021		2020			2022		2021
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:					Derivatives not designated as hedging instruments:
Commodity contracts	Commodity contracts	$	(6,042,326)	$	5,626,229	Commodity contracts	$	(7,832,140)	$	(6,042,326)
Foreign exchange contracts	Foreign exchange contracts	19,226		(67,997)		Foreign exchange contracts	(2,228)		19,226
Interest rate swaps, caps and floors	Interest rate swaps, caps and floors	206,840		(419,482)		Interest rate swaps, caps and floors	570,464		206,840

Totals	Totals	$	(5,816,260)	$	5,138,750	Totals	$	(7,263,904)	$	(5,816,260)

The Company recorded gains (losses) ~~of $(5,816,260) and $5,138,750~~ in cost of goods sold related to its commodity derivative instruments of $(7,263,904) and $(5,816,260) for the three-month periods ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Note 10 - Fair Value

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, this guidance establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. The three levels of hierarchy and examples are as follows:

•Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange and commodity derivative contracts listed on the Chicago Board of Trade (“CBOT”).

•Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs, such as commodity prices using forward future prices.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

•Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

The following tables set forth financial assets and liabilities measured at fair value in the condensed balance sheets and the respective levels to which fair value measurements are classified within the fair value hierarchy as of March 31, ~~2021~~2022 and December 31, ~~2020:~~2021:

~~South Dakota Soybean Processors, LLC~~


	Fair Value as of March 31, 2022
	Level 1		Level 2		Level 3		Total
Financial assets:
Inventory	$	—	$	122,271,193	$	—	$	122,271,193
Commodity derivative instruments	$	—	$	(17,755,661)	$	—	$	(17,755,661)
Margin deposits (deficits)	$	9,471,104	$	—	$	—	$	9,471,104

~~Notes to Condensed Financial Statements~~

Fair Value as of March 31, 2021
Level 1 Level 2 Level 3 Total
Financial assets:
Inventory $ 0 $ 96,049,664 $ 0 $ 96,049,664
Commodity derivative instruments $ 0 $ (2,886,858) $ 0 $ (2,886,858)
Margin deposits (deficits) $ (3,522,041) $ 0 $ 0 $ (3,522,041)


		Fair Value as of December 31, 2020									Fair Value as of December 31, 2021
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Financial assets:	Financial assets:									Financial assets:
Inventory	Inventory	$	0	$	69,127,700	$	0	$	69,127,700	Inventory	$	—	$	94,508,520	$	—	$	94,508,520
Commodity derivative instruments	Commodity derivative instruments	$	0	$	(13,523,064)	$	0	$	(13,523,064)	Commodity derivative instruments	$	—	$	(15,711,099)	$	—	$	(15,711,099)
Margin deposits	Margin deposits	$	6,018,001	$	0	$	0	$	6,018,001	Margin deposits	$	2,099,626	$	—	$	—	$	2,099,626

The Company enters into various commodity derivative instruments, including futures, options, swaps and other agreements. The fair value of the Company’s commodity derivatives is determined using unadjusted quoted prices for identical instruments on the CBOT. The Company estimates the fair market value of their finished goods and raw materials inventories using the market price quotations of similar forward future contracts listed on the CBOT and adjusts for the local market adjustments derived from other grain terminals in our area.

The Company considers the carrying amount of significant classes of financial instruments on the balance sheets, including cash, accounts receivable, and accounts payable, to be reasonable estimates of fair value due to their length or maturity. The fair value of the Company’s long-term debt approximates the carrying value. The interest rates on the long-term debt are similar to rates the Company would be able to obtain currently in the market.

The Company has patronage investments in other cooperatives and common and preferred stock holdings in privately held entities. There is no market for their patronage credits or the entity’s common and preferred holdings, and it is impracticable to estimate the fair value of the Company’s investments. These investments are carried on the balance sheet at original cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

Note 11 - Related Party Transactions

The Company has equity investments in Prairie AquaTech, LLC, Prairie AquaTech Manufacturing, LLC and Prairie AquaTech Investments, LLC. The Company sold soybean products to Prairie AquaTech, LLC and Prairie AquaTech Manufacturing, LLC totaling ~~$1,502,827~~$3,755,756 and ~~$2,806~~$1,502,827 during the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, Prairie AquaTech, LLC and Prairie AquaTech Manufacturing, LLC owed the Company $0$1,739,551 and ~~$339,967, respectively.~~

The Company has entered into agreements with Prairie AquaTech Manufacturing, LLC to perform various management services and to serve as the owner's representative during the construction of its new manufacturing facility adjacent to the Company's plant in Volga, South Dakota. The Company received a total of $1.72 million in compensation for those services, which was recorded in deferred liabilities on the Company's condensed balance sheet. The Company recognized revenues from management services of $0 and $85,833 during the three months ended March 31, 2021 and 2020,$776,767, respectively.

Note 12 - Commitments and Contingencies

As of March 31, ~~2021,~~2022, the Company had unpaid commitments of approximately ~~$2.1 million~~$1,790,000 for construction and acquisition of property and equipment, all of which is expected to be incurred by December 31, ~~2021.~~2023.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

From time to time in the ordinary course of our business, the Company may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual dispute. The Company carries insurance that provides protection against general commercial liability claims, claims against our directors, officer and employees, business interruption, automobile liability, and workers'

~~South Dakota Soybean Processors, LLC~~

~~Notes to Condensed Financial Statements~~

compensation. The Company is not currently involved in any material legal proceedings and are not aware of any potential claims.

Note 13 - Subsequent Event

~~The~~Except for the event listed below, the Company evaluated all of its activities and ~~except for the events listed below,~~ concluded that no subsequent events have occurred that would require recognition in its financial statements or disclosed in the notes to its financial statements.

On April ~~5, 2021,~~27, 2022, the Company entered into an amendment of the seasonal and revolving term loan ~~agreement~~agreements with CoBank. The maximum amount that the Company may borrow under the seasonal loan is increased from ~~$45.0~~$70.0 million to ~~$60.0~~$85.0 million until the loan matures on December 1, ~~2021. All other material items and conditions~~2022. Borrowings under the seasonal loan ~~agreement remain unchanged following this amendment.~~

~~On April 30, 2021, the Company entered into an amendment of the seasonal loan agreement with CoBank. The maximum amount that the Company may borrow~~will now accrue interest at 2.25% plus Daily Simple SOFR, and borrowings under the ~~seasonal loan~~revolving term note will accrue interest at 2.55% plus Daily Simple SOFR. Daily Simple SOFR is ~~increased from $60.0 million to $70.0 million until the loan matures on December 1, 2021.~~defined under both notes. All other material items and conditions under the seasonal loan agreement remain unchanged following this amendment.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

The information in this quarterly report on Form 10-Q for the three-month period ended March 31, ~~2021,~~2022, (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contains “forward-looking statements” that deal with future results, expectations, plans and performance, and should be read in conjunction with the financial statements and Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. Forward-looking statements involve numerous assumptions, risks and uncertainties. Actual results or actual business or other conditions may differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are identified in our Form 10-K for the year ended December 31, ~~2020.~~2021.

We are not under any duty to update the forward-looking statements contained in this report, nor do we guarantee future results or performance or what future business conditions will be like. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report.

Executive Overview and Summary

We ~~recorded~~had a record profit during the first quarter of 2022, recording a net income of ~~$5.8~~$18.3 million, compared to ~~$0.2~~$5.8 million during the ~~same period in 2020. The $5.6 million improvement in profit is largely~~first quarter of 2021. Net income increased due to ~~improved weather conditions within our soybean procurement area along with increased~~strong processing margins which continued from the 4th quarter of 2021. Soybean oil continued to drive profitability, as strong demand for soybean oil. While adverse weather in the spring of 2019 significantly reduced the quantity and quality of soybeans in our area, conditions during the 2020 crop year vastly improved, in turn yielding a large soybean crop with improved quality. In addition, oil ~~demand surged significantly due to increased demand~~ from the ~~renewable diesel~~food, fuel and ~~food retail~~export sectors ~~that continue~~increased margins to ~~recover following the COVID-19 pandemic.~~

~~Although~~record levels. Soybean meal demand, though not as dynamic as soybean oil, remained solid during the first quarter, ~~results~~being supported by a strong domestic demand and an active export program. Steady soybean supply and delivery to both our plants also contributed to a strong three months. Following reduced production in South Dakota last year, basis values paid for soybeans were ~~very good,~~at historically high levels, reflecting processor desire to secure supplies.

Looking ahead, we anticipate above-average processing margins for the remainder of 2022 and into 2023. New renewable diesel plants in the Western U.S. are ~~less certain about the remaining quarters of 2021. Results may~~scheduled to begin production in 2022 which is anticipated to keep soybean oil demand well above historical levels. Margins, however, could be affected by the ~~uncertainty with~~local soybean ~~supply until this fall's harvest which may be~~supply. Until a ~~difficult challenge for us. Due to a strong export demand and increased processing~~new soybean crop arrives in the U.S., soybean supply is expected to decrease dramatically during the summer. This shortfall, along with the anticipated higher soybean prices, may force us to slow production in August and September. Although a large fall, ~~harvest would provide relief, we~~continuing drought conditions are ~~unable~~making it difficult to forecast the ~~harvest at this time. To alleviate risk,~~quantity and pricing of soybeans available for purchase.

Long term, we ~~have begun construction~~continue to study the feasibility and planning of ~~additional storage facilities to help us capture~~ a ~~greater number of~~ new ~~crop soybeans when available this fall. In addition, we may receive lower prices for meal as U.S. soybean processors increase production due to a surging demand for oil, resulting in lower margins.~~crushing plant near Mitchell, South Dakota.

RESULTS OF OPERATIONS

Comparison of the three months ended March 31, ~~2021~~2022 and ~~2020~~2021


		Three Months Ended March 31, 2021			Three Months Ended March 31, 2020				Three Months Ended March 31, 2022			Three Months Ended March 31, 2021
		$		% of Revenue	$		% of Revenue		$		% of Revenue	$		% of Revenue
Revenue	Revenue	$	123,627,541	100.0	$	98,723,412	100.0	Revenue	$	171,724,126	100.0	$	123,627,541	100.0
Cost of revenues	Cost of revenues	(116,998,330)		(94.6)	(96,998,949)		(98.3)	Cost of revenues	(152,914,021)		(89.0)	(116,998,330)		(94.6)
Gross profit	Gross profit	6,629,211		5.4	1,724,463		1.7	Gross profit	18,810,105		11.0	6,629,211		5.4
Operating expenses	Operating expenses	(1,117,842)		(0.9)	(1,024,729)		(1.0)	Operating expenses	(1,398,466)		(0.8)	(1,117,842)		(0.9)

Interest expense	Interest expense	(317,152)		(0.3)	(349,987)		(0.4)	Interest expense	(387,560)		(0.2)	(317,152)		(0.3)
Other non-operating income (expense)	Other non-operating income (expense)	589,875		0.5	(126,664)		(0.1)	Other non-operating income (expense)	1,273,756		0.7	589,875		0.5

Net income	Net income	$	5,784,092	4.7	$	223,083	0.2	Net income	$	18,297,835	10.7	$	5,784,092	4.7

Revenue – Revenue increased ~~$24.9~~$48.1 million, or ~~25.2%~~38.9%, for the three-month period ended March 31, ~~2021,~~2022, compared to the same period in ~~2020.~~2021. The increase in revenues iswas primarily due to ~~increases~~an increase in the average

sales ~~prices~~price of ~~all~~refined soybean ~~products. Soybean prices soared due to a very strong demand~~oil. The average sales price of soybean oil increased approximately 62% in the ~~soybean export sector,~~three months ended March 31, 2022 from the same period in 2021, resulting ~~in increased meal and oil prices. Oil prices were further affected by~~from surging demand ~~for soybean oil~~ from the renewable diesel ~~sector.~~and food sectors.

Gross Profit/Loss – Gross profit increased ~~$4.9~~$12.2 million, or 183.7%, for the three months ended March 31, ~~2021,~~2022, compared to the same period in ~~2020.~~2021. The increase in gross profit iswas primarily due to ~~an improvement in the quantity and quality of soybeans grown in the U.S., especially in our local procurement area. In addition,~~increased demand for oil ~~surged~~ from the renewable diesel sector as more diesel plants ~~are~~were opened.

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased approximately ~~$93,000,~~$281,000, or ~~9.1%~~25.1%, during the three-month period ended March 31, ~~2021,~~2022, compared to the same period in ~~2020.~~2021. The increase iswas primarily due to ~~an increase~~increases in personnel ~~costs.~~costs and professional fees.

Interest Expense – Interest expense ~~decreased $33,000,~~increased $70,000, or ~~9.4%~~22.2%, during the three months ended March 31, ~~2021,~~2022, compared to the same period in ~~2020.~~2021. The ~~decrease~~increase in interest expense iswas due ~~primarily~~ to ~~a decrease~~increases in interest rates on our senior debt with ~~CoBank.~~CoBank and borrowings from our lines of credit. As of March 31, ~~2021,~~2022, the interest rate on our revolving long-term loan was ~~2.56%~~2.90%, compared to ~~3.44%~~2.56% as of March 31, ~~2020. Partially offsetting the decrease in rates is an increase in borrowings from our lines of credit, as we borrowed more due to higher commodity prices and to pay for capital improvements.~~2021. The average debt level, in addition, increased from $47.8 million during the three-month period ended March 31, 2021 ~~was approximately $47.8 million, compared~~ to ~~$36.6~~$54.7 million for the same period in ~~2020.~~2022 due to higher commodity prices and payments for capital improvements.

Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, ~~improved $717,000~~increased $684,000 during the three-month period ended March 31, ~~2021,~~2022, compared to the same period in ~~2020.~~2021. The increase in other non-operating income iswas due to a ~~$626,000 improvement~~$363,000 increase in gains ~~(losses)~~ on our interest rate hedge ~~instruments.~~instruments and a $335,000 increase in patronage dividend income. During the three-month period ended March 31, ~~2021,~~2022, gains on interest rate hedges totaled ~~$207,000,~~$570,000, compared to ~~losses of $419,000~~$207,000 during the same period in ~~2020.~~2021. We also received $700,000 in patronage distributions from CoBank, a cooperative lender of which we are a member, during the quarter ended March 31, 2022, compared to $365,000 during the same period in 2021.

Net Income/Loss – During the three-month period ended March 31, ~~2021,~~2022, we generated a net income of ~~$5.8~~$18.3 million, compared to ~~$0.2~~$5.8 million for the same period in ~~2020.~~2021. The ~~$5.6~~$12.5 million ~~decrease is~~increase was primarily attributable to an increase in gross profit and other non-operating income.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash provided by operations and borrowings under our two revolving lines of credit which are discussed below under “Indebtedness.” On March 31, ~~2021,~~2022, we had working capital, defined as current assets less current liabilities, of approximately ~~$25.9~~$36.8 million, compared to ~~$18.7~~$25.9 million on March 31, ~~2020.~~2021. Working capital increased ~~$7.2~~$10.9 million between periods primarily due to increases in net income during that period. Based on ~~our~~ current plans, ~~we believe that~~ we will continue funding our capital and operating needs from cash from operations and revolving lines of credit.

Comparison of the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021


		2021		2020			2022		2021
Net cash provided by (used for) operating activities	Net cash provided by (used for) operating activities	$	(33,683,127)	$	(14,716,791)	Net cash provided by (used for) operating activities	$	(35,857,338)	$	(33,683,127)
Net cash provided by (used for) investing activities	Net cash provided by (used for) investing activities	(1,709,263)		(2,202,975)		Net cash provided by (used for) investing activities	(733,524)		(1,709,263)
Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	35,574,484		16,654,948		Net cash provided by (used for) financing activities	36,361,121		35,574,484

Cash Flows Used For Operations

The ~~$19.0~~$2.2 million increase in cash flows used for operating activities iswas due to ~~a $19.8 million~~an increase in inventories and a $12.2 million decrease in accrued commodity purchases. During the three-month period ended March 31, 2021, we increased inventories by $27.0 million, compared to $7.2 million during the same period in 2020. Accrued commodity purchases decreased by $14.0 million during the three months ended March 31, 2021, compared to $1.8 million during the same period in 2020. Partially offsetting the changes in inventories and accrued commodity purchasesaccounts receivable which was a $5.8 million net loss on derivative activities in 2021, compared to a $5.1 million net gain during the same period in 2020. The changes in inventories, accrued commodity purchases and net gains (losses) on derivative activities arelargely the result of increased commodity prices in our industry. During the three-month period ended March 31, 2022, our accounts receivable increased by $6.2 million, compared to a $0.7 million decrease during the same period in 2021. Partially offsetting the increase in accounts receivable were various changes in other current assets and liabilities.

Cash Flows Used For Investing Activities

The ~~$0.5~~$1.0 million decrease in cash flows used for investing activities during the three-month period ended March 31, ~~2021,~~2022, compared to the same period in ~~2020, is~~2021, was due to aan $1.1 million decrease in ~~investment purchases.~~capital improvements. During the three months ended March 31, ~~2021,~~2022, we ~~made no new investments in Prairie AquaTech Manufacturing, LLC,~~spent $0.7 million on capital improvements, compared to ~~$0.4~~$1.8 million during the same period in ~~2020.~~2021.

Cash Flows Provided By (Used For) Financing Activities

The ~~$18.9~~$0.8 million increase in cash flows provided by financing activities iswas principally due to a ~~$21.6~~$17.1 million increase in net proceeds on borrowings. During the three months ended March 31, ~~2021,~~2022, net proceeds on borrowings increased ~~$45.0~~$56.9 million, compared to ~~$23.4~~$39.8 million during the same period in ~~2020.~~2021. Partially offsetting the increase in net borrowings was an $8.4 million decrease in outstanding checks-over-bank balance and a ~~$2.7~~$7.9 million increase in cash distributions to our members during the three-month period ended March 31, ~~2021,~~2022, compared to the same period in ~~2020.~~2021.

Indebtedness

We have two lines of credit with CoBank, our primary lender, to meet the short and long-term needs of our operations. The first credit line is a revolving long-term loan. Under this loan, we may borrow funds as needed up to the credit line maximum, or ~~$26.0~~$16.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line. ~~On March 20, 2020, the~~The available credit line ~~decreased~~decreases by $2.0 million ~~and decreases continually by the same amount~~ every six months until the credit line’s maturity on ~~September~~March 20, ~~2023 at which time we will be required to make a balloon payment for the remaining balance.~~2026. We pay a 0.40% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan ~~is $20.0~~was $16.0 million and ~~$17.5~~$16.9 million as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively. Under this loan, there were no additional funds available to borrow as of March 31, ~~2021.~~2022.

The second credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance our operating needs. Prior to the amendments described below, the maximum we could borrow under this ~~credit~~ line was ~~$45.0~~$70.0 million until the loan's maturity on December 1, ~~2021.~~2022. We pay a 0.20% annual commitment fee on any

funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of March 31, ~~2021~~2022 and December 31, ~~2020, there were advances~~2021, the principal balance outstanding on ~~the seasonal loan of $37.3~~this credit line was $57.8 million and $0, ~~respectively. Under this loan, $7.7~~respectively, allowing us to borrow an additional $12.2 million ~~was available to be borrowed~~ as of March 31, ~~2021.~~2022.

On April ~~5, 2021 and April 30, 2021,~~27, 2022, we amended our seasonal ~~loan~~and revolving term loans with CoBank. Under the amendments, the principal amount that we may borrow under the seasonal loan is increased from ~~$45.0~~$70.0 million to ~~$60.0~~$85.0 million until the loan's maturity ondate of December 1, ~~2021.~~2022. Borrowings under the seasonal loan will now accrue interest at 2.25% plus Daily Simple SOFR, and borrowings under the revolving term note will accrue interest at 2.55% plus Daily Simple SOFR. Daily Simple SOFR is defined under both notes. All other material items and conditions under the credit agreement, and subsequent amendments to such agreement, remain the same following ~~this amendment.~~the amendments.

Both the revolving and seasonal loans with CoBank are set up with a variable rate option. The variable rate is set by CoBank and changes weekly on the first business day of each week. We also have a fixed rate option on both loans allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the revolving term loan iswas 2.90% and 2.56% ~~and 2.60%~~ as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the interest rate on the seasonal loan iswas 2.65% and 2.31% ~~and 2.35%~~, respectively. We were in compliance with all covenants and conditions ~~with CoBank~~under the loans as of March 31, ~~2021.~~

On April 20, 2020, we entered into an unsecured promissory note for $1,215,700 under the U.S. Small Business Administration's Paycheck Protection Program (“PPP Loan“), a loan program created under the Coronavirus Aid, Relief and Economic Security (the "CARES Act"). The PPP Loan was made through First Bank & Trust, N.A., Brookings, South Dakota. The PPP Loan was scheduled to mature on July 20, 2022 and had a 1.0% interest rate. In November 2020, we submitted to the SBA an application for loan forgiveness equal to the sum of qualifying expenses such as payroll costs, rent obligations, and covered utility payments. The forgiveness application was approved by the SBA on November 25, 2020 for $1,205.700 and the remaining $10,000 in February 2021.2022.

OFF BALANCE SHEET FINANCING ARRANGEMENTS

We do not utilize variable interest entities or other off-balance sheet financial arrangements.

Contractual Obligations

The following table shows our contractual obligations for the periods presented:


		Payment due by period											Payment due by period
CONTRACTUAL OBLIGATIONS	CONTRACTUAL OBLIGATIONS	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		CONTRACTUAL OBLIGATIONS	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations (1)	Long-Term Debt Obligations (1)	$	21,145,000	$	4,495,000	$	16,650,000	$	—	$	—	Long-Term Debt Obligations (1)	$	17,085,000	$	4,455,000	$	8,560,000	$	4,070,000	$	—

Operating Lease Obligations	Operating Lease Obligations	12,176,000		5,813,000		2,497,000		1,141,000		2,725,000		Operating Lease Obligations	14,894,000		2,665,000		3,938,000		3,305,000		4,986,000

Totals	Totals	$	33,321,000	$	10,308,000	$	19,147,000	$	1,141,000	$	2,725,000	Totals	$	31,979,000	$	7,120,000	$	12,498,000	$	7,375,000	$	4,986,000

(1) Represents principal and interest payments on our notes payable, which are included on our Balance Sheet.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of our Financial Statements under Part I, Item 1, for a discussion on the impact, if any, of the recently pronounced accounting standards.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting policies and estimates from those set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Commodities Risk & Risk Management. To reduce the price change risks associated with holding fixed price commodity positions, we generally take opposite and offsetting positions by entering into commodity futures contracts (either a straight or options futures contract) on a regulated commodity futures exchange, the Chicago Board of Trade. While hedging activities reduce the risk of loss from changing market prices, such activities also limit the gain potential which otherwise could result from these significant fluctuations in market prices. Our policy is generally to maintain a hedged position within limits, but we can be long or short at any time. Our profitability is primarily derived from margins on soybeans processed, not from hedging transactions. Our management does not anticipate that hedging activities will have a significant impact on future operating results or liquidity. Hedging arrangements do not protect against nonperformance of a cash contract.

At any one time, our inventory and purchase contracts for delivery to our facility may be substantial. We have risk management policies and procedures that include net position limits. They are defined by commodity, and include both trader and management limits. This policy and procedure triggers a review by management when any trader is outside of position limits. The position limits are reviewed at least annually with the board of managers. We monitor current market conditions and may expand or reduce the limits in response to changes in those conditions.

An adverse change in market prices would not materially affect our profitability since we generally take opposite and offsetting positions by entering into commodity futures and forward contracts as economic hedges of price risk.

Foreign Currency Risk. We conduct essentially all of our business in U.S. dollars and have minimal direct risk regarding foreign currency fluctuations. Foreign currency fluctuations do, however, impact the ability of foreign buyers to purchase U.S. agricultural products and the competitiveness of and demand for U.S. agricultural products compared to the same products offered by foreign suppliers.

Interest Rate Risk. We manage exposure to interest rate changes by using variable rate loan agreements with fixed rate options. Long-term loan agreements can utilize the fixed option through maturity; however, the revolving ability to pay down and borrow back would be eliminated once the funds were fixed.

As of March 31, ~~2021,~~2022, we had $0 in fixed rate debt outstanding and ~~$65.0~~$86.0 million of variable rate lines of credit. Interest rate changes impact the amount of our interest payments and, therefore, our future earnings and cash flows. Assuming other variables remain constant, a 1.0% increase in interest rates on our variable rate debt could have an estimated impact on profitability of approximately ~~$650,000~~$860,000 per year.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Control Over Financial Reporting. There were no changes to our internal controls over financial reporting that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting during the quarter ended March 31, ~~2021.~~2022.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time in the ordinary course of our business, we may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual dispute. We carry insurance that provides protection against general commercial liability claims, claims against our

directors, officer and employees, business interruption, automobile liability, and workers' compensation. We are not currently involved in any material legal proceedings and are not aware of any potential claims.

Item 1A. Risk Factors.

During the quarter ended March 31, ~~2021,~~2022, there were no material changes to the Risk Factors disclosed in Item 1A (Part I) of our ~~2020~~2021 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.


Exhibit Number						Description
3.1(i)						Articles of Organization (1)
3.1(ii)						Operating Agreement, as amended (2)
3.1(iii)						Articles of Amendment to Articles of Organization (3)
4.1						Form of Class A Unit Certificate (4)
10.1						~~Amendment to~~Amended and Restated Revolving Credit ~~Agreement with CoBank~~Promissory Note dated April ~~5, 2021~~27, 2022
10.2						Amended and Restated Revolving ~~Credit~~Term Promissory Note dated April ~~5, 2021~~
~~10.3~~						~~Amended and Restated Revolving Credit Promissory Note dated April 30, 2021~~27, 2022
31.1						Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer
31.2						Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer
32.1						Section 1350 Certification by Chief Executive Officer
32.2						Section 1350 Certification by Chief Financial Officer

(1) Incorporated by reference from Appendix B to the information statement/prospectus filed as a part of the issuer’s Registration Statement on Form S-4 (File No. 333-75804).

(2) Incorporated by reference from the same numbered exhibit to the issuer’s Form 8-K filed on June 22, 2017.

(3) Incorporated by reference from the same numbered exhibit to the issuer’s Form 10-Q filed on August 14, 2002.

(4) Incorporated by reference from the same numbered exhibit to the issuer’s Registration Statement on Form S-4 (File No. 333-75804).

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			SOUTH DAKOTA SOYBEAN PROCESSORS, LLC

Dated:	May 12, ~~2021~~2022	By	/s/ Thomas Kersting
			Thomas Kersting, Chief Executive Officer
			(Principal Executive Officer)

Dated:	May 12, ~~2021~~2022	By	/s/ Mark Hyde
			Mark Hyde, Chief Financial Officer
			(Principal Financial Officer)

2423


			Page

Part I.	FINANCIAL INFORMATION		43

	Item I.	Financial Statements (Unaudited)	43

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1918

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2221

	Item 4.	Controls and Procedures	2322

Part II.	OTHER INFORMATION		2322

	Item 1.	Legal Proceedings	2322

	Item 1A.	Risk Factors	2422

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2422

	Item 3.	Defaults among Senior Securities	2422

	Item 4.	Mine Safety Disclosures	2422

	Item 5.	Other Information	2422

	Item 6.	Exhibits	2423

Signatures			2523


		As of March 31, 2021
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	33,384,458	$	35,814,167
Foreign exchange contracts	Current Assets	53,554		22,594
Interest rate caps and floors	Current Liabilities	0		488,109

Totals		$	33,438,012	$	36,324,870


	Fair Value as of March 31, 2021
	Level 1		Level 2		Level 3		Total
Financial assets:
Inventory	$	0	$	96,049,664	$	0	$	96,049,664
Commodity derivative instruments	$	0	$	(2,886,858)	$	0	$	(2,886,858)
Margin deposits (deficits)	$	(3,522,041)	$	0	$	0	$	(3,522,041)