SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


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

	For the quarterly period ended	~~June 30, 2022~~March 31, 2023

	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:	000-52033

(Exact name of registrant as specified in its charter)

3682 Highway 8 South, P.O. Box 11, Richardton, ND 58652

(Address of principal executive offices)

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

☒

Yes

☐

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.

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 ~~Yes~~ o No

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

As of ~~August~~May 15, ~~2022,~~2023, there were 40,148,160 Class A Membership Units issued and outstanding.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

RED TRAIL ENERGY, LLC

Condensed Balance Sheets

Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.

RED TRAIL ENERGY, LLC

Condensed Balance Sheets

Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.

RED TRAIL ENERGY, LLC

Condensed Statements of Operations (Unaudited)

Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.

RED TRAIL ENERGY, LLC

Condensed Statements of Cash Flows (Unaudited)

Notes to Unaudited Condensed Financial Statements are an integral part of this Statement.

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED ~~JUNE 30, 2022~~MARCH 31, 2023

The accompanying condensed unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the fiscal year ended September 30, ~~2021,~~2022, contained in the Company's Annual Report on Form 10-K.

In the opinion of management, the interim condensed unaudited financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, ~~2022.~~2023.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Red Trail Energy, LLC, a North Dakota limited liability company (the “Company”), owns and operates a 50 million gallon annual name-plate production ethanol plant near Richardton, North Dakota (the “Plant”).

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenues and expenses. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, inventory, and allowance for doubtful accounts. Actual results could differ from those estimates.

Net income per unit is calculated on a basic and fully diluted basis using the weighted average units outstanding during the period.

~~Recently Adopted Accounting Pronouncements~~

~~Measurement of Credit Losses on Financial Instruments~~

~~In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL~~”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Effective October 1, 2020, the Company adopted ASU 2016-13 using the modified retrospective approach, which had no impact upon adoption.

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~~RED TRAIL ENERGY, LLC~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED JUNE 30, 2022~~

~~2. RESTATEMENTS OF PRIOR FINANCIAL INFORMATION~~

This quarterly report on form 10-Q of the Company for the three and nine months ended June 30, 2022 includes the restatement of the Company’s previously filed unaudited statement of operations and cash flow statements for the three and nine months ended June 30, 2021 due to expenditures that should have been capitalized as construction in progress. The Company’s management has concluded these figures should be re-stated in the statements of operations and cash flows for comparative purposes in 2022 filings. Accordingly, the Company has determined that prior financial statements should be corrected. Furthermore, from a quantitative and qualitative perspective, the Company has determined that correcting the previously filed June 30, 2021 financial statements would not require previously filed reports to be amended.

Previously Reported Three Months Ended June 30, 2021 (unaudited) Adjustments Restated Three Months Ended June 30, 2021 (unaudited)
Statement of Operations
General and Administrative Expenses $ 854,179 $ (57,629) $ 796,550
Operating Income $ 9,516,024 $ 57,629 $ 9,573,653
Net Income $ 9,505,434 $ 57,629 $ 9,563,063

Previously Reported Nine Months Ended June 30, 2021 (unaudited) Adjustments Restated Nine Months Ended June 30, 2021 (unaudited)
Statement of Operations
General and Administrative Expenses $ 3,173,878 $ (917,373) $ 2,256,505
Operating Income $ 16,975,280 $ 917,373 $ 17,892,653
Net Income $ 17,865,024 $ 917,373 $ 18,782,397
Statement of Cash Flows
Net Income $ 17,865,024 $ 917,373 $ 18,782,397
Net cash provided by operating activities $ 18,510,067 $ 917,373 $ 19,427,440
Capital expenditures $ 14,236,260 $ 917,373 $ 15,153,633
Net cash used in investing activities $ 14,236,260 $ 917,373 $ 15,153,633

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

The following table disaggregates revenue by major source for the three and ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022.

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED ~~JUNE 30, 2022~~MARCH 31, 2023

Shipping and Handling Costs

We account for shipping and handling activities related to contracts with customers as costs to fulfill our promises to transfer the associated products. Accordingly, we record customer payments associated with shipping and handling costs as a component of revenue, and classify such costs as a component of cost of goods sold.

Customer deposits are contract liabilities for payments in excess of revenue recognized. Customer deposits are recognized when modified distillers grains customers make prepayments on their contracts. The ending balances for accounts receivable and customer deposits were as follows ~~as of October 1, 2021 and 2020 and~~ for the ~~nine~~periods six months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~March 31, 2022.

4.3. DERIVATIVE INSTRUMENTS

As part of its hedging strategy, the Company may enter into ethanol, soybean, soybean oil, natural gas and corn commodity-based derivatives in order to protect cash flows from fluctuations caused by volatility in commodity prices in order to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sales, corn oil sales, and corn purchase commitments where the prices are set at a future date. These derivatives are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change. Ethanol derivative fair market value gains or losses are included in the results of operations and are classified as revenue, and corn derivative changes in fair market value are included in cost of goods sold.

As of: June 30, 2022 (unaudited) September 30, 2021
Contract Type # of Contracts Notional Amount (Qty) Fair Value # of Contracts Notional Amount (Qty) Fair Value
Corn futures 140 700,000 bushels $ (591,425) — — bushels $ —
Corn options 200 1,000,000 bushels $ (372,500) — — bushels $ —
Total fair value $ (963,925) $ —
Amounts are combined on the balance sheet - negative numbers represent liabilities

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MARCH 31, 2023

The following tables provide details regarding the Company's derivative financial instruments at March 31, 2023 and September 30, 2022:

Inventory is valued at the lower of cost or net realizable value. Inventory values as of March 31, 2023 and September 30, 2022 were as follows:

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED ~~JUNE 30, 2022~~MARCH 31, 2023

~~Inventory is valued at the lower of cost or net realizable value. Inventory values as of June 30, 2022 and September 30, 2021 were as follows:~~

Lower of cost or net realizable value adjustments for the ~~three and nine~~six months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ were as follows:

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~~RED TRAIL ENERGY, LLC~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED JUNE 30, 2022~~

The Company has entered into forward corn purchase contracts under which it is required to take delivery at the contract price. At the time the contracts were created, the price of the contract approximated market price. Subsequent changes in market conditions could cause the contract prices to become higher or lower than market prices. As of ~~June 30, 2022,~~March 31, 2023, the average price of corn purchased under certain fixed price contracts, that had not yet been delivered, was greater than the approximated market price. Based on this information, the Company has ~~$885,000~~$464,000 estimated loss on firm purchase commitments for the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 compared to no$796,000 estimated loss on firm purchase commitments for the ~~nine~~six months ended ~~June 30, 2021.~~March 31, 2022. The loss is recorded in “Loss on firm purchase commitments” on the statement of operations and "Accrued loss on firm purchase commitments" on the balance sheet. The amount of the potential loss was determined by applying a methodology similar to that used in the impairment valuation with respect to inventory. Given the uncertainty of future ethanol prices, future losses on the outstanding purchase commitments could be recorded in future periods.

Ethanol Recovery Program

On July 13, 2020, we received a $5.41 million loan through the Bank of North Dakota's Ethanol Recovery Program and Cornerstone Bank ("Cornerstone"). The Ethanol Recovery Program was developed by the North Dakota Ethanol Producers Association and the Bank of North Dakota to use the existing Biofuels Partnership in Assisting Community Expansion ("PACE") program and Value-added Guarantee Loan program to help ethanol production facilities weather the economic challenges caused by the COVID-19 pandemic. Ethanol producers could qualify for up to $15 million of a low interest loan of 1% based on the amount of such producers' annual corn grind. On December 3, 2021 we received forgiveness of $2.65 million of the loan. The forgiveness was recorded as other income. The outstanding balance as of ~~June 30, 2022~~March 31, 2023 was ~~$1.37 million.~~$740,000. The maturity date of the loan is July 13, 2025. The fixed interest rate on ~~June 30, 2022~~March 31, 2023 was 3.75% with an interest rate buy down through the Bank of North Dakota to 1%.

On February 3, 2022 we renewed our $10 million revolving loan (the "Revolving Loan") with Cornerstone. On February 3, 2022 the maturity date was extended to March 31, 2022. On April 8, 2022 the Revolving Loan was renewed. The new maturity date iswas April 7, 2023. Subsequent to year end the Revolving Loan was renewed and now has a maturity date of April 4, 2024 (see note 12). At ~~June 30, 2022,~~March 31, 2023, we had $10 million available under the Revolving Loan. The variable interest rate on ~~June 30, 2022~~March 31, 2023 was ~~3.25%~~7.000%.

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MARCH 31, 2023

On January 22, 2020, we entered into a $7 million construction loan (the ~~"Construction~~"First Construction Loan") with Cornerstone. The original maturity date of the Construction Loan was June 1, 2021. On June 3, 2021 we extended the maturity date to February 1, 2022. On April 8, 2022 the Construction Loan was ~~renewed. The new~~renewed and the maturity date iswas extended to October 8, 2022. ~~At June 30,~~On October 28, 2022, ~~we had $7 million available under~~ the First Construction ~~Loan. The variable interest rate on June 30, 2022~~Loan was ~~3.00%~~consolidated and replaced with the Consolidated Loan (below).

On February 1, 2021 we entered into a $28 million construction loan (the ~~"CCS~~"Second Construction Loan") with Cornerstone for the carbon capture and storage project. The maturity date of the ~~CCS~~Second Construction Loan was January 31, 2022. On February 17, 2022 the maturity date was extended to March 15, 2022. On April 8, 2022 we renewed the CCS Construction ~~Loan. The new~~Loan and the maturity date iswas extended to October 8, 2022. ~~As of June 30,~~On October 28, 2022, ~~$18~~the Second Construction loan was consolidated and replaced with the Consolidated Loan (below).

On October 28, 2022, we entered into a $25 million ~~has been drawn on~~loan to replace the ~~CCS~~First Construction Loan ~~to finance construction~~and Second Construction Loan (the "Consolidated Loan"). The maturity date of the ~~carbon capture and storage project. Upon completion and final verification of the project the $18 million will be refinanced as long-term debt.~~Consolidated Loan is January 31, 2032. The ~~variable~~fixed interest rate ~~on June 30, 2022~~is 4.65%. The outstanding balance as of March 31, 2023, was ~~3.00%.~~$22.2 million.

Each of the Company's loans are secured by a lien on substantially all of the assets of the Company.


Schedule of debt maturities for the twelve months ending March 31	Totals
2023	$	2,774,809
2024	2,136,556
2025	2,229,314
2026	2,335,215
2027	2,446,147
Thereafter	11,043,853
Total	$	22,965,894

6. FAIR VALUE MEASUREMENTS

The following table provides information on those liabilities that are measured at fair value on a recurring basis as of March 31, 2023 and September 30, 2022, respectively.

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED ~~JUNE 30, 2022~~MARCH 31, 2023

Schedule of debt maturities and lease liabilities for the twelve months ending June 30 Totals
2022 $ 19,088,311
2023 714,755
2024 37,289
2025 36,531
2026 12,422
Total $ 19,889,308

~~7. FAIR VALUE MEASUREMENTS~~

~~The following table provides information on those liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and September 30, 2021, respectively.~~

The fair value of the corn, ethanol, soybean oil and natural gas derivative instruments is based on quoted market prices in an active market.

The Company leases railcar and plant equipment. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the ~~nine~~six months ended ~~June 30, 2022,~~March 31, 2023, the Company's estimated discount rate was ~~3.00%~~7.00%. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company determines if an arrangement is a lease or contains a lease at inception. The Company's existing leases have remaining lease terms of approximately one year to ~~five~~seven years, which may include options to extend the leases when it is reasonably certain the Company will exercise those options. At ~~June 30, 2022~~March 31, 2023 the weighted average remaining lease term was ~~two~~six years. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The Company does not have any sublease agreements.

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~~RED TRAIL ENERGY, LLC~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED JUNE 30, 2022~~

The Company is generally responsible for maintenance, taxes, and utilities for leased equipment. Rent expense for operating leases was approximately ~~$767,000~~$539,000 and ~~$506,900~~$475,000 for the ~~nine~~six months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

Equipment under financing leases consists of office equipment and plant equipment. At ~~June 30, 2022~~March 31, 2023 and September 30, ~~2021,~~2022, equipment under financing leases was as follows:

At ~~June 30, 2022,~~March 31, 2023, the Company had the following minimum commitments, which at inception had non-cancellable terms of more than one year. Amounts shown below are for the 12 month periods ending ~~June 30:~~March 31:

9.8. COMMITMENTS AND CONTINGENCIES

Firm Purchase Commitments for Corn

To ensure an adequate supply of corn to operate the Plant, the Company enters into contracts to purchase corn from local farmers and elevators. At ~~June 30, 2022,~~March 31, 2023, the Company had various fixed price contracts for the purchase of approximately 3.2 million bushels of corn. Using the stated contract price for the fixed price contracts, the Company had commitments of approximately ~~$22.8~~$21.9 million related to the 3.2 million bushels under contract.

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MARCH 31, 2023

On April 21, 2015, we entered into a ten-year contract to purchase raw water from Southwest Water Authority in order to meet the Plant's water requirements. Our contract requires us to purchase a minimum of 160 million gallons of water per year. The minimum estimated obligation for this contract is $424,000 per year.

Profit and Cost Sharing Agreement

The Company entered into a Profit and Cost Sharing Agreement with Bismarck Land Company, LLC, which became effective on November 1, 2016. The Profit and Cost Sharing Agreement provides that the Company will share 70% of the net revenue generated by the Company from business activities which are brought to the Company by Bismarck Land Company, LLC and conducted on the real estate purchased from the Bismarck Land Company, LLC. The real estate was initially purchased in exchange for 2 million membership units of the Company at $1.66 per unit. This obligation will terminate ten years after the real estate closing date of October 11, 2016 or after Bismarck Land Company, LLC receives $10 million in proceeds from the agreement. In addition, the Profit and Cost Sharing Agreement provides that the Company will pay Bismarck Land Company, LLC 70% of any net proceeds received by the Company from the sale of the subject real estate if a sale were to occur prior to termination of this obligation in accordance with the $10 million cap or the ten-year term of this obligation. The Company has paid Bismarck Land Company, LLC ~~$1,047,581~~$1,547,581 as of ~~June 30, 2022.~~

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~~RED TRAIL ENERGY, LLC~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED JUNE 30, 2022~~

~~Carbon Capture and Storage Project~~

On July 30, 2018, the Company entered into a research agreement with the University of North Dakota Energy and Environmental Research Center to explore the feasibility of injecting carbon dioxide ("CO2") from the fermentation process into a saline formation to lower the carbon intensity value of our ethanol. The Company committed to fund up to $950,000 for this research. The Company had incurred $949,631 in expenses through the second quarter of the 2022 fiscal year which is recorded as consulting services under general and administrative expenses. The commitment was fully paid as of June 30, 2022.

On October 1, 2020, the Company entered into an agreement with Salof LTD, Inc. for the design, engineering, fabrication and start up of the CO2 capture and liquefaction facility for the carbon capture and storage project. The price of the system including all equipment and services is $11,845,000. The Company had paid $11,262,856 as of June 30, 2022, which is recorded as construction in progress.

On May 6, 2021, the Company entered into an agreement with Direct Automation for the DCS Computer System for the carbon capture and storage project. The price of the system including all equipment and installation is $800,992. The Company has paid $779,895 as of June 30, 2022 which is recorded as construction in progress.

As of June 30, 2022 the Company has incurred a total of $37.1 million towards the Carbon Capture and Storage Project, which is recorded as construction in progress. The project was completed and placed into service on June 16, 2022. The remaining cost for completion of the Carbon Capture and Storage Project is roughly $0.5 million.

~~10.~~9. RELATED PARTY TRANSACTIONS

The Company has balances and transactions in the normal course of business with various related parties for the purchase of corn, sale of distillers grains and sale of ethanol. The related parties include unit holders, members of the board of governors of the Company, and RPMG, Inc. (“RPMG”). Significant related party activity affecting the financial statements is as follows:

~~11.~~10. UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS

During volatile market conditions, the Company experiences certain risks and uncertainties, which could have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distillers 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. The Company's operating and financial performance is largely driven by

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~~RED TRAIL ENERGY, LLC~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED JUNE 30, 2022~~

prices at which the Company sells ethanol and distillers grains and by the cost at which it is able to purchase corn for operations. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets, although since 2005 the prices of ethanol and gasoline began a

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MARCH 31, 2023

divergence with ethanol, which has generally been selling for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is ~~corn.The~~corn. The cost of corn is generally impacted by factors such as supply and demand, weather, and government programs, global political or economic issues, including but not limited to the war in Ukraine ~~including~~and sanctions associated therewith, or global damaging growing conditions, such as plant disease or adverse weather, including drought, increased fertilizer costs as well as global conflicts.

The Company's financial performance is highly dependent on the Federal Renewable Fuels Standard ("RFS"), which requires that a certain amount of renewable fuels must be used each year in the United States. Corn based ethanol, such as the ethanol the Company produces, can be used to meet a portion of the RFS requirement. In November 2013, the EPA issued a proposed rule which would reduce the RFS for 2014, including the RFS requirement related to corn based ethanol. The EPA proposed rule was subject to a comment period which expired in January 2014. On November 30, 2015, the EPA released its final ethanol use requirements for 2014, 2015 and 2016, which were lower than the statutory requirements in the RFS. However, the final RFS for 2017 equaled the statutory requirement which was also the case for the 2018, 2019, 2020, 2021, and ~~2021~~2022 RFS final rules. NoThe final RFS ~~has been established~~ for ~~2022.~~

~~On January 30, 2020, the World Health Organization declared the coronavirus outbreak (COVID-19)~~2022 was significantly larger than 2021, with a ~~“Public Health Emergency~~final volume requirement of ~~International Concern”~~20.63 billion gallons and ~~on March 11, 2020, declared COVID-19~~ a ~~pandemic. Quarantines, labor shortages, and other disruptions to the Company’s operations, and those~~supplemental standard 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 new developments regarding continued distribution of the COVID-19 vaccine, new information which may emerge concerning the severity of the coronavirus, prevalence of new COVID-19 cases and actions taken to contain the coronavirus or its impact, among others..25 billion gallons.

The Company anticipates that the results of operations during the remainder of fiscal year ~~2022~~2023 will continue to be affected by volatility in the commodity markets. The volatility is due to various factors, including uncertainty with respect to the availability and supply of corn, increased demand for grain from global and national markets, speculation in the commodity markets, and demand for corn from the ethanol industry.

~~12.~~11. MEMBER'S EQUITY

Changes in member's equity for the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022.

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	Class A Member Units		Additional Paid in Capital		Accumulated Deficit/Retained Earnings		Treasury Units		Total Member Equity
Balances - September 30, 2022	$	39,044,595	$	75,541	$	46,880,539	$	(159,540)	$	85,841,135
Net income	—		—		1,865,215		—		1,865,215
Balances December 31, 2022	$	39,044,595	$	75,541	$	48,745,754	$	(159,540)	$	87,706,350
Distribution	—		—		(6,024,235)		—		(6,024,235)
Net (loss)	—		—		(799,450)		—		(799,450)
Balances - March 31, 2023	$	39,044,595	$	75,541	$	41,922,069	$	(159,540)	$	80,882,665

~~RED TRAIL ENERGY, LLC~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~FOR THE PERIOD ENDED JUNE 30, 2022~~


	Class A Member Units		Additional Paid in Capital		Accumulated Deficit/Retained Earnings		Treasury Units		Total Member Equity
Balances - September 30, 2021	$	39,044,595	$	75,541	$	31,034,079	$	(159,540)	$	69,994,675
Net income	—		—		19,371,546		—		19,371,546
Balances - December 31, 2021	$	39,044,595	$	75,541	$	50,405,625	$	(159,540)	$	89,366,221
Distribution	—		—		(9,624,072)		—		(9,624,072)
Net income	—		—		4,439,004		—		4,439,004
Balances - March 31, 2022	$	39,044,595	$	75,541	$	45,220,557	$	(159,540)	$	84,181,153

~~13.~~12. SUBSEQUENT EVENTS

On ~~July 20, 2022 the Company paid the distribution payable to the shareholders.~~

April 8, 2023 we renewed our $10 million Revolving Loan with Cornerstone Bank. The new maturity date is April 5, 2024. (See note 5)

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

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~~six month periods ended ~~June 30, 2022,~~March 31, 2023, compared to the same periods of the prior fiscal year. This discussion should be read in conjunction with the financial statements, notes and information contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021.~~2022. Unless otherwise stated, references in this report to particular years, quarters, months, or periods refer to our fiscal years ended in September and the associated quarters, months, or periods of those fiscal years.

Forward Looking Statements

This report contains forward-looking statements that involve future events, our future performance and our future operations and actions. In some cases you can identify forward-looking statements by the use of words such as "may," "should," "anticipate," "believe," "expect," "plan," "future," "intend," "could," "estimate," "predict," "hope," "potential," "continue," or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions 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 following factors:

•Reductions in the corn-based ethanol use requirement in the Federal Renewable Fuels Standard;

•Increased inflation which can have an impact on the costs of our raw materials;

•Higher natural gas prices in the United States due to increased exports of natural gas to Europe;

•Market prices and availability of corn that we require to operate the ethanol plant;

•Continued economic impacts from the COVID-19 pandemic, including reduced gasoline demand;

•Continued economic impacts of the war in Ukraine, including increased commodities prices and effect of Sanctions;

•Lower oil prices which result in lower ethanol prices;

•Negative operating margins which result from lower ethanol prices;

•Lower distillers grains prices which result from the Chinese anti-dumping and countervailing duty tariffs;

•Lower ethanol prices due to the Chinese ethanol tariff and the Brazilian ethanol tariff;

•Logistics difficulties preventing us from delivering our products to our customers;

•Fluctuations in the price and market for ethanol, distillers grains and corn oil;

•Availability and costs of products and raw materials, particularly corn and natural gas;

•Changes in the environmental regulations that apply to our plant operations and our ability to comply with such regulations;

•Ethanol supply exceeding demand and corresponding ethanol price reductions impacting our ability to operate profitably and maintain a positive spread between the selling price of our products and our raw material costs;

•Our ability to generate and maintain sufficient liquidity to fund our operations and meet our necessary capital expenditures;

•Our ability to continue to meet our loan covenants;

•Limitations and restrictions contained in the instruments and agreements governing our indebtedness;

•Results of our hedging transactions and other risk management strategies;

•Changes and advances in ethanol production technology; and

•Competition from alternative fuels and alternative fuel additives.

Red Trail Energy, LLC, a North Dakota limited liability company (the "Company," "Red Trail," or "we," "our," or "us"), owns and operates a 50 million gallon annual name-plate production ethanol plant near Richardton, North Dakota. Our revenues are derived from the sale and distribution of our ethanol, distillers grains and corn oil primarily in the continental United States. Corn is our largest cost component and our profitability is highly dependent on the spread between the price of corn and the price of ethanol.

On April ~~8, 2022~~1, 2023, our board of governors voluntarily suspended trading of our membership units on the qualified matching service operated by FNC Ag Stock LLC. The board of governors decided to suspend trading on the qualified matching service indefinitely while we ~~renewed~~conduct due diligence on a potential transaction in order to protect the interests of our $10 million Revolving Loan with Cornerstone Bank and its new maturity date is October 8, 2022. Also on April 8, 2022, we renewed both our $7 million Construction Loan and our $28 million dollar CCS Construction Loan with Cornerstone Bank which both have maturity dates of October 8, 2022. Please see Note 6 - Bank Financing above for additional details.members.

On April 7, 2023, we entered into a revolving promissory note for a $10 million loan with our primary lender, Cornerstone Bank. The promissory note has a maturity date of April 5, 2024. Interest accrues on any outstanding balance on the promissory note at a rate of 1.0% less than the prime rate as published by the Wall Street Journal, adjusted monthly. The revolving loan has a minimum interest rate of 5.0%.

On April 24, 2023, we named Jodi Johnson, Chief Executive Officer of the Company and Joni Entz Chief Financial Officer of the Company. Jodi Johnson was previously serving as the Company's Chief Financial Officer. Gerald Bachmeier who served as CEO until April 24, 2023 will continue to serve as a consultant for the Company until September 30, 2023.

Results of Operations for the Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~

The following table shows the results of our operations and the percentages of revenues, cost of goods sold, general and administrative expenses and other items to total revenues in our unaudited statements of operations for the three months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:

The following table shows additional data regarding production and price levels for our primary inputs and products for the three months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022.

Three Months Ended June 30, 2022 (unaudited) Three Months Ended
June 30, 2021
(unaudited)
Production:
  Ethanol sold (gallons) 15,899,612 14,335,793
  Dried distillers grains sold (tons) 28,122 24,761
  Modified distillers grains sold (tons) 17,979 27,608
Corn oil sold (pounds) 4,336,920 3,660,850
Revenues:
  Fuel grade ethanol average price per gallon (net of hedging) $ 2.63 $ 2.28
  Dried distillers grains average price per ton 266.12 196.76
  Modified distillers grains average price per ton 151.64 110.86
Corn oil average price per pound 0.74 0.47
Primary Inputs:
  Corn ground (bushels) 5,535,187 4,925,520
Natural gas (MMBtu) 404,040 354,266
Costs of Primary Inputs:
  Corn average price per bushel (net of hedging) $ 7.43 $ 5.34
Natural gas average price per MMBtu (net of hedging) 6.59 2.59
Other Costs (per gallon of ethanol sold):
  Chemical and additive costs $ 0.085 $ 0.087
  Denaturant cost 0.054 0.038
  Electricity cost 0.057 0.048
  Direct labor cost 0.075 0.070

Our total revenue was higher in the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year primarily due to increased production by the ethanol plant during the second quarter of our 2023 fiscal year. During the second quarter of our 2023 fiscal year, approximately 75.2% of our total revenue was derived from ethanol sales, approximately 19.5% was from distillers grains sales, approximately 0.5% was from syrup sales, and approximately 4.8% was from corn oil sales. During the second quarter of our 2022 fiscal year, approximately 74.0% of our total revenue was derived from ethanol and industrial alcohol sales, approximately 18.5% was from distillers grains sales, approximately 1.1% was from syrup sales and approximately 6.3% was from corn oil sales.

The average price we received for our ethanol, without taking into account our hedge positions, was the same during both the second quarter of our 2023 fiscal year and the second quarter of our 2022 fiscal year. Management anticipates continued strong ethanol prices as a result of consistent demand for ethanol and gasoline prices. In addition, continued strong corn prices are expected to continue to support market ethanol prices.

We sold more gallons of ethanol during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to increased production at the ethanol plant during the 2023 period. Management attributes this increased production to improved corn to ethanol conversion efficiency. Management anticipates ethanol production to be consistent during the rest of our 2023 fiscal year to 2022 fiscal year levels provided market conditions allow us to continue to operate the ethanol plant at capacity. We anticipate continuing to focus on operating the ethanol plant as efficiently as possible in order to maximize our profitability.

From time to time we enter into forward sales contracts for our products. At March 31, 2023, we had no open ethanol futures contracts. At March 31, 2022, we had no open ethanol futures contracts. We realized a gain of approximately $259,000 on ethanol derivative instruments for the second quarter of our 2022 fiscal year which increased our revenue.

During the second quarter of our 2023 fiscal year, we sold fewer tons of distillers grains compared to the same period of our 2022 fiscal year due to improved corn to ethanol conversion efficiency which resulted in fewer tons of distillers grains produced. We sold a majority of our distiller grains during the 2023 period in the modified form due to local demand which favored this product. The average price we received for both our dried and modified distillers grains was higher during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to increased demand for distillers grains along with higher corn prices. Management believes prices for distillers grains have been strong due to higher corn prices and reduced worldwide corn supplies. Management anticipates distillers grains prices will remain higher than the 2022 fiscal year during the rest of our 2023 fiscal year. Management anticipates distillers grains production will remain at its current mix during the 2023 fiscal year.

The total pounds of corn oil we sold was slightly lower during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to improved corn to ethanol conversion efficiency which resulted in less bushels of corn used and ultimately less corn oil produced during the 2023 period compared to the 2022 period. Management anticipates that our corn oil production will remain at current levels for the remaining quarters of our 2023 fiscal year provided market conditions allow us to continue to operate the ethanol plant at capacity and provided the market price of corn oil remains at current levels. The average price we received for our corn oil during the second quarter of our 2023 fiscal year was the same as the price we received during the second quarter of our 2022 fiscal year. Corn oil is used for biodiesel and renewable diesel production which have increased recently, benefiting market corn oil prices.

The total gallons of syrup we sold was lower during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to decreased overall production. Management anticipates that our syrup production will remain at the current levels for the remaining quarters of our 2023 fiscal year provided that market conditions allow us to continue to operate the ethanol plant at capacity. The average price we received for our syrup during the second quarter of our 2023 fiscal year was lower compared to the average price we received during the second quarter of our 2022 fiscal year primarily due to a discounted pricing to ensure product moves in a timely manner.

Our cost of goods sold is primarily made up of corn and natural gas expenses. Our cost of goods sold was higher for the second quarter of our 2023 fiscal year as compared to the second quarter of our 2022 fiscal year due primarily to higher corn cost per bushel and higher natural gas costs per MMBtu partially offset by decreased corn consumption during the 2023 fiscal year.

Our cost of goods sold related to corn was higher for the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to increased average cost per bushel of corn, without taking derivative instrument positions into account, partially offset by decreased corn consumption. For the second quarter of our 2023 fiscal year, we used approximately 0.3% fewer bushels of corn compared to the second quarter of our 2022 fiscal year due to improved corn to ethanol conversion rates during the 2023 period. The average price we paid per bushel of corn, without taking into account our derivative instruments, was approximately 9.5% higher for the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to higher market corn prices during the second quarter of our 2023 fiscal year. In addition, during the second quarter of our 2023 fiscal year, we had a realized gain of approximately $480,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn. For the second quarter of our 2022 fiscal year, we had a realized gain of approximately $714,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn during that period. Management anticipates corn prices will remain higher during the rest of our 2023 fiscal year due to

increased corn demand in the market and uncertainty about corn supply resulting in part from the conflict in Ukraine which is a major agricultural producing nation.

We used approximately 3.1% more MMBtu of natural gas during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to increased overall production at the ethanol plant. Our average cost per MMBtu of natural gas was approximately 48.8% higher during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to higher energy prices compared to our 2022 fiscal year along with a loss on our natural gas derivative instruments. We had a realized loss on our natural gas derivative instruments of approximately $120,000 for the second quarter of our 2023 fiscal year compared to a gain of approximately $203,000 for the second quarter of our 2022 fiscal year. Management anticipates these natural gas prices will remain at current levels during the rest of our 2023 fiscal year and potentially into our 2024 fiscal year, especially if we experience increased natural gas exports to Europe due to uncertainty regarding the supply of natural gas from Russia during the winter of 2023/2024.

General and Administrative Expenses

Our general and administrative expenses were higher for the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to additional meeting expenses and consulting fees.

Other Income/Expense

We had less interest income during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to less cash on hand during our 2023 fiscal year. Our other income was higher during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to patronage dividends received from our electric cooperative. We had more interest expense during the second quarter of our 2023 fiscal year compared to the second quarter of our 2022 fiscal year due to increased borrowing on our loans.

Results of Operations for the Six Months Ended March 31, 2023 and 2022

The following table shows additional data regarding production and price levels for our primary inputs and products for the six months ended March 31, 2023 and 2022.

Our total revenue was ~~higher~~lower in the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 primarily due to ~~higher~~lower production by the ethanol plant along with lower average prices for our ~~products along with increased quantity~~ethanol during the six months ended March 31, 2023. During the six months ended March 31, 2023, approximately 73.5% of our total revenue was derived from ethanol sales, approximately 20.4% was from distillers grains sales, approximately 0.3% was from syrup sales, and approximately 5.7% was from corn oil ~~sold during the 2022 period.~~sales. During the ~~third quarter of our~~six months ended March 31, 2022, ~~fiscal year,~~ approximately ~~75.1%~~77.8% of our total revenue was derived from ethanol and industrial alcohol sales, approximately ~~18.3%~~16.2% was from distillers grains sales, approximately ~~1.1%~~0.7% was from syrup sales and approximately 5.8% was from corn oil sales. During the third quarter of our 2021 fiscal year, approximately 76.2% of our total revenue was derived from ethanol and industrial alcohol sales, approximately 18.6% was from distillers grains sales, approximately 0.8% was from syrup and approximately 4.0%5.1% was from corn oil sales.

The average price we received for our ethanol was ~~significantly higher~~lower during the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 compared to the ~~third quarter of our 2021 fiscal year.~~six months ended March 31, 2022. Management attributes the ~~increase~~decrease in the price we received for our ethanol during the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 to ~~higher~~lower gasoline prices ~~and~~during the 2023 period. Management anticipates that energy prices will remain higher ~~corn prices~~than in recent years but less than we experienced during the market. Management also believes that inflation has increased commodity prices, including ethanol. Gasoline prices have increased significantly recently, especially due to uncertainty caused by the war in Ukraine which has resulted in higher oil prices. In addition, corn prices have been higher which has resulted in higher market ethanol prices.six months ended March 31, 2022.

We sold ~~more~~fewer gallons of ethanol during the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 due to ~~increased~~decreased production at the ethanol plant during the ~~2022~~2023 period. Management attributes this ~~increased~~decreased production to ~~less~~additional plant downtime ~~during the third quarter of our 2022 fiscal year compared~~due to ~~the same period of our 2021 fiscal year.~~rail disruptions caused by adverse weather. Management anticipates ethanol production to ~~remain at current~~increase to 2022 fiscal year levels provided market conditions allow us to continue to operate the ethanol plant at capacity. We anticipate continuing to focus on operating the ethanol plant as efficiently as possible in order to maximize our profitability.

From time to time we enter into forward sales contracts for our products. At ~~June 30,~~March 31, 2023, we had no open ethanol futures contracts. At March 31, 2022, we had no open ethanol futures contracts. ~~At June 30, 2021, we had no open ethanol futures contracts.~~ We ~~had no~~ realized a gain ~~or loss~~ of approximately $425,000

on ethanol derivative instruments for the ~~third quarter of~~six months ended March 31, 2022 which increased our revenue during our 2022 fiscal year.

During the ~~third quarter of our 2022 fiscal year,~~six months ended March 31, 2023, we sold fewer tons of distillers grains compared to the same period of our ~~2021 fiscal year~~six months ended March 31, 2022 due to ~~increased corn oil production. As we produce more pounds of corn oil, it results in fewer tons of distillers grains production.~~lower overall production at the ethanol plant. We sold a majority of our distiller grains during the ~~2022~~2023 period in the ~~dried~~modified form due to ~~market conditions~~local demand which favored this product. The average price we received for both our dried and modified distillers grains was higher during the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 due to increased demand for distillers grains along with higher corn prices. Management believes prices for distillers grains have been strong due to higher corn prices and reduced worldwide corn supplies. Management anticipates distillers grains prices will remain higher than the ~~2021~~2022 fiscal year during the rest of our ~~2022 fiscal year. Further, depending on the number of bushels of corn which will be harvested in the fall of 2022, these higher distillers grains prices may continue into our~~ 2023 fiscal year. Management anticipates ~~relatively consistent~~ distillers grains production ~~throughout the remainder of our 2022~~will remain at its current mix during 2023 fiscal ~~year provided we can maintain favorable operating margins.~~year.

The total pounds of corn oil we sold was ~~higher~~lower during the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 due to ~~increased~~deceased overall production at the plant during the 2023 period. However, the decrease in corn oil production ~~during~~was less than the ~~2022 period. Due~~overall decrease in production due to ~~higher~~an increased focus on corn oil ~~prices during the 2022, we increased the amount of~~production due to current market trends benefiting corn oil ~~we were producing to maximize revenue.~~prices. Management anticipates that our corn oil production will remain at current levels for the remaining ~~quarter~~quarters of our ~~2022~~2023 fiscal year provided market conditions allow us to continue to operate the ethanol plant at capacity and provided the market price of corn oil remains at current levels. The average price we received for our corn oil during the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 was higher compared to the average price we received during the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 primarily due to increased corn oil demand and higher corn prices. ~~In 2019, the~~Corn oil is used for biodiesel ~~blenders' tax credit was renewed retroactively from January 1, 2018 through December 31, 2022. This extension of the tax credit has created greater certainty in the biodiesel industry,~~and renewable diesel production which ~~has resulted in~~have increased ~~demand for~~recently, benefiting market corn ~~oil. This increase in demand may not continue past December 31, 2022.~~

~~Table of Contents~~oil prices.

Syrup

The total gallons of syrup we sold was lower during the six months ended March 31, 2023 compared to the six months ended March 31, 2022 due to decreased overall production. Management anticipates that our syrup production will remain at the current levels for the remaining quarters of our 2023 fiscal year provided that market conditions allow us to continue to operate the ethanol plant at capacity. The average price we received for our syrup during the six months ended March 31, 2023 was lower compared to the average price we received during the six months ended March 31, 2022 primarily due to a discounted pricing to ensure product moves in a timely manner.

Cost of Goods Sold

Our cost of goods sold is primarily made up of corn and natural gas expenses. Our cost of goods sold was ~~greater~~higher for the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 as compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 due primarily to ~~increased~~the net effect of higher corn costs per bushel and ~~increased bushels of corn used along with increased~~higher natural gas costs ~~per MMBtu and increased natural gas~~partially offset by decreased corn usage ~~gas~~ during the ~~2022~~2023 fiscal year.

Corn Costs

Our cost of goods sold related to corn was higher for the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 due to ~~increased~~higher average ~~corn costs~~prices we paid per bushel of corn, without taking derivative instrument positions into account, ~~along with an increase in~~partially offset by decreased corn consumption during the ~~number of bushels of corn used to produce ethanol.~~six months ended March 31, 2023. For the ~~third quarter of our 2022 fiscal year,~~six months ended March 31, 2023, we used approximately ~~12.4% more~~4.31% fewer bushels of corn compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 due to ~~increased~~decreased ethanol production and ~~decreased~~increased corn to ethanol conversion efficiency. The average price we paid per bushel of corn, without taking into account our derivative instruments, was approximately ~~39.1%~~8.67% higher for the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 due to higher market corn prices during the ~~third quarter of our 2022 fiscal year.~~six months ended March 31, 2023. In addition, during the ~~third quarter of our 2022 fiscal year,~~six months ended March 31, 2023, we had a realized gain of approximately ~~$373,000~~$1,663,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn. For the ~~third quarter of our 2021 fiscal year,~~six months ended March 31, 2022, we had a realized gain of approximately ~~$568,000~~$1,065,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn during that period. Management anticipates corn prices will remain higher during the rest of our ~~2022~~2023 fiscal year due to increased corn demand in the market and uncertainty about ~~the number of bushels of~~ corn ~~that will be harvested~~supply resulting in ~~the fall of 2022 along with global uncertainty resulting for~~part from the conflict in Ukraine which is a major agricultural producing nation.

Table of Contents

Natural Gas Costs

We used approximately ~~14.0%~~0.24% more MMBtu of natural gas during the ~~third quarter of our 2022 fiscal year~~six months ended March 31, 2023 compared to the ~~third quarter of our 2021 fiscal year~~six months ended March 31, 2022 due to ~~increased overall~~an increase in the production ~~at the ethanol plant.~~of dried distillers grains which require more drying energy than modified distillers grains. Our average cost per MMBtu of natural gas was approximately ~~154.4%~~18.04% higher during the ~~third quarter of~~six months ended March 31, 2023 compared to the six months ended March 31, 2022 due to higher natural gas prices compared to our 2022 fiscal ~~year compared to the third quarter of our 2021 fiscal year due to higher energy prices generally.~~year. Management anticipates these ~~higher~~ natural gas prices will remain ~~higher~~at current levels during the rest of our ~~2022~~2023 fiscal year and potentially into our ~~2023~~2024 fiscal year, especially if we experience increased natural gas exports to Europe due to uncertainty regarding the supply of natural gas from Russia during the winter of ~~2022/2023.~~

~~General and Administrative Expenses~~

~~Our general and administrative expenses were comparable for the third quarter of our 2022 fiscal year compared to the third quarter of our 2021 fiscal year.~~

~~Other Income/Expense~~

We had more interest income during the third quarter of our 2022 fiscal year compared to the third quarter of our 2021 fiscal year due to having more cash on hand during our 2022 fiscal year. Our other income was significantly greater during the third quarter of our 2022 fiscal year compared to the third quarter of our 2021 fiscal year due to the $4m USDA Biofuels Producers Relief payment we received during our 2022 fiscal year. We had less interest expense during the third quarter of our 2022 fiscal year compared to the third quarter of our 2021 fiscal year due to decreased borrowing on our loans.

~~Results of Operations for the Nine Months Ended June 30, 2022 and 2021~~

~~Table of Contents~~

Nine Months Ended
June 30, 2022 (Unaudited) Nine Months Ended
June 30, 2021 (Unaudited)
Statement of Operations Data Amount % Amount %
Revenues $ 168,225,436 100.00 $ 104,563,490 100.00
Cost of Goods Sold 138,899,275 82.57 84,414,332 80.73
Gross Profit 29,326,161 17.43 20,149,158 19.27
General and Administrative Expenses 2,556,029 1.52 2,256,505 2.16
Operating Income 26,770,132 15.91 17,892,653 17.11
Other Income, net 6,961,490 4.14 889,744 0.85
Net Income $ 33,731,622 20.05 $ 18,782,397 17.96

~~The following table shows additional data regarding production and price levels for our primary inputs and products for the nine months ended June 30, 2022 and 2021.~~

Nine Months Ended June 30, 2022 (unaudited) Nine Months Ended
June 30, 2021
(unaudited)
Production:
  Ethanol sold (gallons) 50,354,306 47,275,959
  Dried distillers grains sold (tons) 65,216 57,012
  Modified distillers grains sold (tons) 108,593 112,300
Corn oil sold (pounds) 13,959,870 10,746,450
Revenues:
  Fuel grade ethanol average price per gallon (net of hedging) $ 2.56 $ 1.71
  Dried distillers grains average price per ton 237.55 176.05
  Modified distillers grains average price per ton 117.96 76.42
Corn oil average price per pound 0.64 0.38
Primary Inputs:
  Corn ground (bushels) 17,159,839 15,378,054
Natural gas (MMBtu) 1,193,681 1,087,727
Costs of Primary Inputs:
  Corn average price per bushel (net of hedging) $ 6.54 $ 4.18
Natural gas average price per MMBtu (net of hedging) 5.61 2.58
Other Costs (per gallon of ethanol sold):
  Chemical and additive costs $ 0.087 $ 0.079
  Denaturant cost 0.052 0.032
  Electricity cost 0.049 0.045
  Direct labor cost 0.067 0.064

~~Revenue~~

Our total revenue was higher in the nine months ended June 30, 2022 compared to the same period of our nine months ended June 30, 2021 primarily due to higher prices for our products along with increased quantity of ethanol and corn oil sold during the 2022 period. During the nine months ended June 30, 2022, approximately 76.9% of our total revenue was derived from ethanol and industrial alcohol sales, approximately 16.9% was from distillers grains sales, approximately 0.8% was from syrup sales and approximately 5.3% was from corn oil sales. During the nine months ended June 30, 2021, approximately 77.3% of our total revenue was derived from ethanol and industrial alcohol sales, approximately 17.8% was from distillers grains sales, approximately 0.06 from syrup sales and approximately 4.0% was from corn oil sales.

~~Table of Contents~~

~~Ethanol~~

The average price we received for our ethanol was significantly higher during the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021. Management attributes the increase in the price we received for our ethanol during the nine months ended June 30, 2022 to decreased ethanol stocks along with higher gasoline demand and prices and higher corn prices in the market. Gasoline demand increased during the nine months ended June 30, 2022 due to increased travel compared to the nine months ended June 30, 2021. Management anticipates gasoline demand will continue to increase, which management believes will positively impact ethanol prices. Management also believes that inflation has increased commodity prices, including ethanol. In addition, corn and energy prices have increased significantly which have resulted in higher market ethanol prices along with the uncertainty in Russia and Ukraine.

We sold more gallons of ethanol during the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021 due to increased production at the ethanol plant during the 2022 period. Management attributes this increased production to less plant downtime during the nine months ended June 30, 2022 compared to the same period of our nine months ended June 30, 2021. Management anticipates ethanol production to remain at current levels provided market conditions allow us to continue to operate the ethanol plant at capacity. We anticipate continuing to focus on operating the ethanol plant as efficiently as possible in order to maximize our profitability.

From time to time we enter into forward sales contracts for our products. For the nine months ended June 30, 2022, we experienced a realized gain of $424,770 related to our ethanol derivative instruments, which increased our revenue. For the nine months ended June 30, 2022, we had no open ethanol futures contracts. For the nine months ended June 30, 2021, we had no open ethanol futures contracts. We had a realized gain of approximately $1,289,000 on ethanol derivative instruments during the nine months ended June 30, 2021 which increased our revenue.

~~Distillers Grains~~

During the nine months ended June 30, 2022, we sold more tons of distillers grains compared to the same period of our nine months ended June 30, 2021 due to increased overall production. The average price we received for our modified distillers grains was higher during the nine months ended June 30, 2022 compared to the third quarter of our nine months ended June 30, 2021 due to increased demand for modified distillers grains along with higher corn prices. The average price we received for our dried distillers grains was higher during the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021 due to higher corn prices and increased export demand. Management believes prices for distillers grains have been strong due to higher corn prices and reduced worldwide corn supplies. Management anticipates distillers grains prices will remain higher than the 2021 fiscal year during the rest of our 2022 fiscal year. Further, depending on the number of bushels of corn which are harvested in the fall of 2022, these higher distillers grains prices may continue into our 2023 fiscal year. Management anticipates relatively consistent distillers grains production throughout the remainder of our 2022 fiscal year provided we can maintain favorable operating margins.

~~Corn Oil~~

The total pounds of corn oil we sold was higher during the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021 due to increased corn oil production during the 2022 period primarily due to increased overall production. Due to market corn oil prices, we have focused on increasing the amount of corn oil we produce. Management anticipates that our corn oil production will remain at current levels for the remaining quarter of our 2022 fiscal year provided market conditions allow us to continue to operate the ethanol plant at capacity. The average price we received for our corn oil during the nine months ended June 30, 2022 was higher compared to the average price we received during the nine months ended June 30, 2021 primarily due to increased corn oil demand and higher corn prices. In 2019, the biodiesel blenders' tax credit was renewed retroactively from January 1, 2018 through December 31, 2022. This extension of the tax credit has created greater certainty in the biodiesel industry, which has resulted in increased demand for corn oil.

~~Cost of Goods Sold~~

Our cost of goods sold is primarily made up of corn and natural gas expenses. Our cost of goods sold was greater for the nine months ended June 30, 2022 as compared to the nine months ended June 30, 2021 due primarily to increased corn costs per bushel and increased natural gas costs per MMBtu along with increased consumption of corn and natural gas during the nine months ended June 30, 2022.

~~Table of Contents~~

~~Corn Costs~~

Our cost of goods sold related to corn was higher for the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021 due to increased average corn costs per bushel, without taking derivative instrument positions into account, along with an increase in the number of bushels of corn used to produce ethanol. For the nine months ended June 30, 2022, we used approximately 11.59% more bushels of corn compared to the nine months ended June 30, 2021 due to increased ethanol production. The average price we paid per bushel of corn, without taking into account our derivative instruments, was approximately 56.46% higher for the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021 due to higher market corn prices during the nine months ended June 30, 2022. In addition, during the nine months ended June 30, 2022, we had a realized gain of approximately $1,438,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn. For the nine months ended June 30, 2021, we had a realized gain of approximately $1,266,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn during that period. Management anticipates corn prices will remain higher during the rest of our fiscal year.

~~Natural Gas Costs~~

We used approximately 9.74% more MMBtu of natural gas during the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021 due to increased overall production at the ethanol plant. Our average cost per MMBtu of natural gas was approximately 117.44% higher during the nine months ended June 30, 2022 compared to the nine months ended June 30, 2021 due to higher energy prices generally, and losses on our hedged MMBtus during our nine months ended June 30, 2022. Management anticipates these higher natural gas prices will continue during the rest of our nine months ended June 30, 2022.2023/2024.

General and Administrative Expenses

Our general and administrative expenses were higher for the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 compared to the ~~nine~~six months ended ~~June 30, 2021 primarily~~March 31, 2022 due to ~~an increase in professional~~additional bank fees related to the new loan and ~~permitting expenses needed to incorporate the CCS~~additional meeting and ~~USP projects into the current environmental and safety plans during the nine months ended June 30, 2022.~~consulting fees.

Other Income/Expense

We had ~~more~~less interest income during the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 compared to the ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 due to having ~~more~~less cash on hand during our ~~2022~~2023 fiscal year. Our other income was ~~greater~~significantly lower during the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 compared to the ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 due to the ~~forgiveness received for the~~$3 million Ethanol Recovery Loan ~~and the USDA Biofuels Producers Relief payment~~forgiveness we ~~received.~~received during our 2022 fiscal year. We had ~~less~~more interest expense during the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 compared to the ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 due to ~~decreased~~increased borrowing on our loans.

Changes in Financial Condition for the ~~Nine~~Six Months Ended ~~June 30, 2022~~March 31, 2023

Current Assets

We had ~~more~~less cash and cash equivalents at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021~~2022 primarily due to ~~net income we generated during our 2022 fiscal year plus the draw~~deferred corn payments we made ~~on the CCS Construction Loan.~~early in January each year. We had less restricted cash in our margin account at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021 because we had less cash in~~2022 due to changing values of our ~~margin account associated with our hedging transactions.~~derivative instrument positions. Due to ~~higher prices for our products,~~the timing of shipments the value of our accounts receivable was higher at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021.~~2022. We had more inventory on hand at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021~~2022 due primarily to ~~higher market prices for our finished goods and~~more raw ~~materials~~material inventory on hand at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021.~~2022. Our prepaid expenses were higher at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021~~2022 due to an increase in our insurance premiums paid for the year.

Property, Plant and Equipment

The value of our property, plant and equipment was ~~higher~~less at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021~~2022 due to ~~construction of our carbon capture and storage project and industrial alcohol project partially offset by~~ regular depreciation of our assets during the first ~~nine~~six months of our ~~2022~~2023 fiscal ~~year.~~

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year partially offset by capital projects which were completed and higher construction in progress at March 31, 2023 compared to September 30, 2022.

Other Assets

Our right of use operating lease assets at ~~June 30, 2022~~March 31, 2023 was ~~lower~~higher compared to September 30, ~~2021~~2022 due to the renewal of DDG railcar leases partially offset by amortization of our leases during our ~~2022~~2023 fiscal year. Our investment in RPMG increased due to a capital call during our 2023 fiscal year.

Current Liabilities

We had ~~less~~ disbursements in excess of our bank balances ~~due to~~at March 31, 2023 which is checks we have issued which have not yet been presented for payment which excess the ~~increase in~~ cash we ~~had on hand at the end at June 30, 2022 to cover~~have in our bank accounts. These checks ~~issued on~~are paid from our ~~accounts.~~revolving loans. Our accounts payable was less at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021~~2022 due to having fewer deferred corn payables at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021.~~2022. Our accrued expenses were higher at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021~~2022 due to ~~the~~higher accrued ~~distribution that was declared as of June 30, 2022 and interest accrued on the CCS Construction Loan at June 30, 2022.~~corn payables. We had a ~~larger loss on firm purchase commitments due to rising corn prices and the impact they have on~~smaller liability associated with our corn ~~contracts~~derivative instrument positions at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021.~~2022 due to changing market corn prices

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compared to our derivative instrument positions. We had a ~~larger~~smaller current maturity associated with our notes payable due to ~~amounts outstanding on~~renewals of our ~~CCS Construction Loan for our carbon capture project~~long-term debt as of ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021 along with the fact that these loans are schedule to mature in less than 12 months.~~2022. We had ~~less~~more current portion of operating leases liabilities at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021~~2022 due to the renewal of DDG railcar leases partially offset by amortization of our leases during our ~~2022~~2023 fiscal year.

Long-Term Liabilities

~~We had less~~Our notes payable balances were significantly more at ~~June 30, 2022~~March 31, 2023 compared to September 30, ~~2021~~2022 due to ~~payments we made~~consolidating the two construction loans which also extended the maturity dates of our debt, moving it to long-term debt and additional borrowing on our ~~long-term~~ loans ~~the Ethanol Recovery Program forgiveness we received~~ during the ~~second~~first fiscal quarter of ~~our 2022 fiscal year, and the PPP loan forgiveness we received during our 2021 fiscal year.~~2023. We had ~~less~~more long-term liabilities for our operating leases at ~~June 30, 2022~~March 31, 2023 due toadditional equipment leases partially offset by amortization of our long-term leases during our ~~2022~~2023 fiscal year.

Liquidity and Capital Resources

Based on financial forecasts performed by our management, we anticipate that we will have sufficient cash from our current credit facilities and cash from our operations to continue to operate the ethanol plant for the next 12 months and beyond. ~~We also anticipate refinancing the current CCS Construction Loan as long-term debt upon completion of the project.~~ Should we experience unfavorable operating conditions in the future, we may have to secure additional debt or equity sources for working capital or other purposes.

The following table shows cash flows for the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:

June 30, 2022
(unaudited) June 30, 2021
(unaudited)
Net cash provided by operating activities $ 29,620,520 $ 19,427,440
Net cash used in investing activities (17,763,824) (15,153,633)
Net cash provided by (used in) financing activities 6,429,720 (3,732,436)
Net increase in cash $ 18,286,416 $ 541,371
Cash, cash equivalents and restricted cash, end of period $ 23,501,660 $ 11,653,860


	March 31, 2023 (unaudited)		March 31, 2022 (unaudited)
Net cash (used in) provided by operating activities	$	(5,387,368)	$	10,784,017
Net cash used in investing activities	(1,890,577)		(12,501,437)
Net cash provided by financing activities	58,614		6,648,257
Net increase (decrease) in cash	$	(7,219,331)	$	4,930,837
Cash, cash equivalents and restricted cash, end of period	$	3,932,684	$	10,146,081

Cash Flow from Operations

Our operations provided ~~more~~less cash during the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 compared to the same period of our ~~2021~~2022 fiscal year due primarily to ~~increased~~decreased net income and payment of deferred corn payments during the ~~2022~~2023 period.

Cash Flow From Investing Activities

We used ~~more~~less cash for capital expenditures during the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 compared to the same period of our ~~2021~~2022 fiscal year. During the ~~2022~~2023 period, our primary capital expenditures were for renovations to retrofit the posidon tank for additional water storage and work to finalize our ~~carbon capture and storage project and our industrial alcohol~~CCS project.

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Cash Flow from Financing Activities

Our financing activities provided less cash during the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 compared to the same period of our ~~2021~~2022 fiscal year due to fewer proceeds we received from our debt instruments during the ~~2022~~2023 fiscal year. We had debt repayments and a distribution which was paid during the our 2023 fiscal year ~~partially offset by debt payments we have made. We also paid a larger distribution to our members~~which used cash during ~~the 2022 period compared to the 2021 period which decreased cash provided by our financing activities.~~that period.

Our liquidity, results of operations and financial performance will be impacted by many variables, including the market price for commodities such as, but not limited to, corn, ethanol and other energy commodities, as well as the market price for any co-products generated by the facility and the cost of labor and other operating costs. Assuming future relative price levels for corn, ethanol and distillers grains remain consistent, we expect operations to generate adequate cash flows to maintain operations for the next 12 months and beyond.

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Plans for Cash in the Short Term and in the Long Term

In the next 12 months, the Company plans to reinvest its cash into current business operations and to use the cash for the implementation of the new carbon capture and storage ~~project and the industrial alcohol~~ project. In the long term, the Company plans to reinvest its cash into current business operations and may provide further distributions to its members.

Capital Expenditures

The Company had approximately ~~$38~~$1.4 million in construction in progress as of ~~June 30, 2022~~March 31, 2023 primarily relating to ~~the~~our carbon capture and storage ~~project.~~project and renovations to retrofit the posidon tank for additional water storage. The Company ~~has secured two construction loans with Cornerstone Bank~~plans to finance ~~these projects whose maturity dates were recently extended o October 8, 2022 as described below under the section entitled "Capital Resources".~~this construction in progress using cash from current business operations.

Capital Resources

Revolving Loan

On January 22, 2020, we entered into a $10 million revolving loan (the "Revolving Loan") with Cornerstone Bank ("Cornerstone"). Interest accrues on any outstanding balance on the Revolving Loan at a rate of 1.2% less than the prime rate as published by the Wall Street Journal, adjusted monthly. The Revolving Loan has a minimum interest rate of 3.0%. The maturity date of the Revolving Loan was January 31, 2022. On February 3, 2022, the Revolving Loan was renewed, and the new maturity date was March 31, 2022. On April 8, 2022, the Revolving Loan maturity date was extended to April 7, 2023. On April 8, 2023 we renewed the Revolving Loan. The new maturity date is April 5, 2024. The Revolving Loan is secured by a lien on substantially all of our assets. At ~~June 30, 2022,~~March 31, 2023, we had $10 million available on the Revolving Loan. The variable interest rate on ~~June 30, 2022~~March 31, 2023 was ~~3.25%~~7.00%.

Construction Loans

On January 22, 2020, we entered into a new $7 million construction loan (the "First Construction Loan") with Cornerstone to finance our carbon capture and storage project. ~~Interest accrues on any outstanding balance on the First Construction Loan at a rate of 1.2% less than the prime rate as published by the Wall Street Journal, adjusted monthly.~~ The original maturity date of the First Construction Loan was June 1, 2021. On June 3, 2021 the maturity date was extended to February 1, 2022. On April 8, 2022, the First Construction Loan was extended to October 8, 2022. ~~At June 30,~~On October 28, 2022, ~~we had $7 million available under~~ the First Construction ~~Loan. The variable interest rate on June 30, 2022~~Loan was ~~3.00%~~consolidated with the Second Construction Loan (below).

On February 1, 2021, we entered into a $28 million construction loan (the "Second Construction Loan") with Cornerstone to finance our carbon capture and storage project. Interest accrues on any outstanding balance on the Second Construction Loan at a rate of 1.2% less than the prime rate as published by the Wall Street Journal, adjusted monthly. The Second Construction Loan has a minimum interest rate of 3.0%. The maturity date of the Second Construction Loan was January 31, 2022. On February 17, 2022, the Second Construction Loan was extended to March 15, 2022. On April 8, 2022, the Second Construction Loan was again extended to October 8, 2022. ~~The Second Construction Loan is secured by a lien on substantially all of our assets. At June 30,~~On October 28, 2022, ~~we had drawn $18 million on the loan and had $10 million available under~~ the Second Construction ~~Loan. The variable interest rate on June 30, 2022~~loan was ~~3.00%~~consolidated and replaced (below).

~~Table~~On October 28, 2022, we entered into a $25 million loan to replace the First Construction Loan and Second Construction Loan (the "Consolidated Loan"). The maturity date of ~~Contents~~the Consolidated Loan is January 31, 2032. The fixed interest rate is 4.65%.

Ethanol Recovery Program

On July 13, 2020, we entered into a $5.41 million loan through the Bank of North Dakota's Ethanol Recovery Program and Cornerstone. The Ethanol Recovery Program was developed by the North Dakota Ethanol Producers Association and the Bank of North Dakota to use the existing Biofuels Partnership in Assisting Community Expansion ("PACE") program and Value-added Guarantee Loan program to help ethanol production facilities weather the economic challenges caused by the COVID-19 pandemic. Ethanol producers could qualify for up to $15 million of a low interest loan of 1% based on the amount of such producers' annual corn grind. The maturity date of the loan is July 13, 2025. The fixed interest rate as of ~~June 30, 2022~~March 31, 2023 was 3.75% with an interest rate buy down through the Bank of North Dakota to 1%. We typically make monthly payments of approximately $74,000 per month. On December 3, 2021 we received forgiveness of $2.65 million of the loan, and the balance outstanding on ~~June 30, 2022~~March 31, 2023 was approximately ~~$1.37 million.~~$740,000.

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Significant Accounting Policies and Estimates

We describe our significant accounting policies in Note 1, Summary of Significant Accounting Policies, of the Notes to Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021.~~2022. We discuss our critical accounting estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021.~~2022. There has been no significant change in our critical accounting estimates since the end of our ~~2021~~2022 fiscal year. Effective October 1, 2020 the Company adopted ASU2016-13 using the modified retrospective approach.

~~Off-Balance Sheet Arrangements~~

Praj Industries Limited ("Praj") has provided the Company with a Standby Letter of Credit of $265,950 as a performance guarantee for the Eco-Smart Distillation unit purchased for the Industrial Alcohol Project. The Eco-Smart Distillation unit will allow the Company to produce up to 25 million gallons per year of USP grade industrial alcohol. The Standby Letter of Credit covers Praj's liability toward under-performance of the distillation unit based on daily plant capacity, steam consumption, and quality of USP grade alcohol produced. The Standby Letter of Credit is payable upon written demand by the Company of non-performance of the distillation unit during the performance trial run. The Standby Letter of Credit expired on March 31, 2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to the impact of market fluctuations associated with commodity prices and interest rates as discussed below. We use derivative 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 ethanol. 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 pursuant to the requirements of Generally Accepted Accounting Principles ("GAAP").

Interest Rate Risk

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, 2023, we had approximately $0 million outstanding on our variable interest rate loans, however we could have funds outstanding under our revolving loan which has a variable interest rate in the future. If we were to experience a 10% increase in the variable portion of our loans, 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, 2023, would be immaterial.

Commodity Price Risk

We expect to be 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 and the sale of ethanol. Our exposure to commodity price risk may be heightened due to the crisis in Ukraine.

We enter into fixed price contracts for corn purchases on a regular basis. It is our intent that, as we enter into these contracts, we will use various hedging instruments (puts, calls and futures) to maintain a near even market position. For example, if we have one million bushels of corn under fixed price contracts we would generally expect to enter into a short hedge position to offset our price risk relative to those bushels we have under fixed price contracts. Because our ethanol marketing company ("RPMG") is selling substantially all of the gallons it markets on a spot basis we also include the corn bushel equivalent of the ethanol we have produced that is inventory but not yet priced as bushels that need to be hedged.

Although we believe our hedge positions will accomplish an economic hedge against our future purchases, they are not designated as hedges for accounting purposes, which would match the gain or loss on our hedge positions to the specific commodity purchase being hedged. We use fair value accounting for 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 sales. The immediate

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recognition of hedging gains and losses under fair value accounting can cause net income to be volatile from quarter to quarter and year to year due to the timing of the change in value of derivative instruments relative to the cost of the commodity being hedged. 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 ~~June 30, 2022~~March 31, 2023 we had corn futures and option contracts for approximately ~~1,700,000~~2,855,000 bushels of corn. As of ~~June 30, 2022~~March 31, 2023 we had an unrealized loss of approximately ~~$964,000~~$296,000 related to our corn futures and options contracts.

It is the current position of our ethanol marketing company, RPMG, that under current market conditions, selling ethanol in the spot market will yield the best price for our ethanol. RPMG will, from time to time, contract a portion of the gallons they market with fixed price contracts. At ~~June 30, 2022,~~March 31, 2023, we had no fixed ethanol sales contracts and ethanol futures and option contracts. As of ~~June 30, 2022~~March 31, 2023 we had no unrealized gain or loss related to ethanol futures and option contracts.

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We estimate that our corn usage will be between 2118 million and 2320 million bushels per year for the production of approximately 59 million to 64 million gallons of ethanol. As corn prices move in reaction to market trends and information, our income statement will be affected depending on the impact such market movements have on the value of our derivative instruments.

A sensitivity analysis has been prepared to estimate our exposure to corn, natural gas and ethanol price risk. Market risk related to our corn, natural gas and ethanol prices 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, and our average ethanol sales price as of ~~June 30, 2022,~~March 31, 2023, net of the forward and future contracts used to hedge our market risk for corn, natural gas and ethanol. The volumes are based on our expected use and sale of these commodities for a one year period from ~~June 30, 2022.~~March 31, 2023. 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	63,900,000	Gallons	10	%	$	(15,975,000)	Ethanol	63,900,000	Gallons	10	%	$	(14,697,000)
Corn	Corn	22,821,000	Bushels	10	%	$	(12,327,000)	Corn	22,822,000	Bushels	10	%	$	(12,591,000)
Natural gas	Natural gas	1,664,000	MMBtu	10	%	$	(1,431,000)	Natural gas	1,664,000	MMBtu	10	%	$	(488,000)

For comparison purposes, our sensitivity analysis for our quarter ended ~~June 30, 2021~~March 31, 2022 is set forth below:

Item 4. Controls and Procedures

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 pursuant to 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 President and Chief Executive Officer (the principal executive officer), ~~Gerald Bachmeier,~~Jodi Johnson, along with our Chief Financial Officer, (the principal financial officer), ~~Jodi Johnson,~~Joni Entze, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of ~~June 30, 2022.~~March 31, 2023. Based on this review and evaluation, these officers believe that our disclosure controls and procedures were 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.

For the fiscal quarter ended ~~June 30, 2022,~~March 31, 2023, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time in the ordinary course of 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 disputes. We are not currently involved in any material legal proceedings.

Item 1A. Risk Factors

There have been no material changes to the risk factors which were previously disclosed in our annual report on Form 10-K for the fiscal year ended September 30, ~~2021 except as set forth below.~~2022.

The Company faces risks related to international conflicts, such as the ongoing conflict between Russia and Ukraine, that may adversely impact the Company's financial condition or results of operations.

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.

~~Inflation, including as a result of commodity price inflation or supply chain constraints due to the war in Ukraine, may adversely impact our results of operations.~~


Large Accelerated Filer	o	Accelerated Filer	o
Non-Accelerated Filer	x	Smaller Reporting Company	☐
		Emerging Growth Company	☐


			Page Number
PART I. FINANCIAL INFORMATION			3
Item 1. Financial Statements			3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			1715
Item 3. Quantitative and Qualitative Disclosures about Market Risk			2625
Item 4. Controls and Procedures			2726
PART II. OTHER INFORMATION			2826
Item 1. Legal Proceedings			2826
Item 1A. Risk Factors			2827
Item 2. Unregistered Sales of Equity Securities			2927
Item 3. Defaults Upon Senior Securities			2927
Item 4. Mine Safety Disclosures			2927
Item 5. Other Information			2927
Item 6. Exhibits			2927
SIGNATURES			3028


ASSETS	ASSETS	June 30, 2022		September 30, 2021		ASSETS	March 31, 2023		September 30, 2022
		(Unaudited)					(Unaudited)
Current Assets	Current Assets					Current Assets
Cash and equivalents	Cash and equivalents	$	19,122,569	$	508,521	Cash and equivalents	$	438,120	$	6,366,990
Restricted cash - margin account	Restricted cash - margin account	4,379,091		4,706,723		Restricted cash - margin account	3,494,564		4,785,025
Accounts receivable, net, primarily related party	Accounts receivable, net, primarily related party	3,793,322		1,468,521		Accounts receivable, net, primarily related party	11,299,801		4,879,011

Inventory	Inventory	15,034,811		11,546,842		Inventory	14,560,790		12,544,033
Prepaid expenses	Prepaid expenses	610,341		466,036		Prepaid expenses	924,829		512,770
Total current assets	Total current assets	42,940,134		18,696,643		Total current assets	30,718,104		29,087,829

Property, Plant and Equipment	Property, Plant and Equipment					Property, Plant and Equipment
Land	Land	1,333,681		1,333,681		Land	1,333,681		1,333,681
Land improvements	Land improvements	4,465,311		4,465,311		Land improvements	17,662,538		17,662,538
Buildings	Buildings	10,051,817		9,581,778		Buildings	15,320,492		14,930,003
Plant and equipment	Plant and equipment	100,304,819		91,666,322		Plant and equipment	121,432,181		121,465,514
Construction in progress	Construction in progress	37,918,571		29,154,711		Construction in progress	2,162,692		1,191,290
		154,074,199		136,201,803			157,911,584		156,583,026
Less accumulated depreciation	Less accumulated depreciation	76,095,307		72,777,271		Less accumulated depreciation	80,049,699		77,104,977
Net property, plant and equipment	Net property, plant and equipment	77,978,892		63,424,532		Net property, plant and equipment	77,861,885		79,478,049

Other Assets	Other Assets					Other Assets
Right of use operating lease assets, net	Right of use operating lease assets, net	509,334		762,847		Right of use operating lease assets, net	1,817,013		405,631
Investment in RPMG	Investment in RPMG	605,000		605,000		Investment in RPMG	940,642		605,000
Patronage equity	Patronage equity	4,924,123		4,924,123		Patronage equity	5,399,515		5,399,515
Deposits	Deposits	40,000		40,000		Deposits	40,000		40,000
Total other assets	Total other assets	6,078,457		6,331,970		Total other assets	8,197,170		6,450,146

Total Assets	Total Assets	$	126,997,483	$	88,453,145	Total Assets	$	116,777,159	$	115,016,024


LIABILITIES AND MEMBERS' EQUITY	LIABILITIES AND MEMBERS' EQUITY	June 30, 2022		September 30, 2021		LIABILITIES AND MEMBERS' EQUITY	March 31, 2023		September 30, 2022
		(Unaudited)					(Unaudited)
Current Liabilities	Current Liabilities					Current Liabilities
Disbursements in excess of bank balances	Disbursements in excess of bank balances	$	—	$	1,343,608	Disbursements in excess of bank balances	$	2,287,740	$	—
Accounts payable	Accounts payable	9,908,627		10,099,876		Accounts payable	5,818,757		6,885,442
Accrued expenses	Accrued expenses	1,061,771		1,435,117		Accrued expenses	2,316,830		1,531,123
Distribution payable		4,014,816		—
Commodities derivative instruments, at fair value (see note 4)		963,925		—
Accrued loss on firm purchase commitments (see notes 5 and 9)		1,069,000		184,000

Commodities derivative instruments, at fair value (see note 3)						Commodities derivative instruments, at fair value (see note 3)	306,566		1,162,273
Accrued loss on firm purchase commitments (see notes 4 and 8)						Accrued loss on firm purchase commitments (see notes 4 and 8)	357,000		9,000
Customer deposits	Customer deposits	13,960		11,008		Customer deposits	24,694		10,636
Current maturities of notes payable	Current maturities of notes payable	18,744,513		723,775		Current maturities of notes payable	2,774,809		18,751,634
Current portion of operating lease liabilities	Current portion of operating lease liabilities	343,798		372,986		Current portion of operating lease liabilities	350,217		271,968
Total current liabilities	Total current liabilities	36,120,410		14,170,370		Total current liabilities	14,236,613		28,622,076

Long-Term Liabilities	Long-Term Liabilities					Long-Term Liabilities
Notes payable	Notes payable	635,461		3,898,239		Notes payable	20,191,085		419,150
Long-term operating lease liabilities	Long-term operating lease liabilities	165,536		389,861		Long-term operating lease liabilities	1,466,796		133,663
Total long-term liabilities	Total long-term liabilities	800,997		4,288,100		Total long-term liabilities	21,657,881		552,813
Commitments and Contingencies (Notes 5, 6, 8 and 9)
Commitments and Contingencies (Notes 4, 5, 7 and 8)						Commitments and Contingencies (Notes 4, 5, 7 and 8)

Members’ Equity 40,148,160 Class A Membership Units issued and outstanding	Members’ Equity 40,148,160 Class A Membership Units issued and outstanding	90,076,076		69,994,675		Members’ Equity 40,148,160 Class A Membership Units issued and outstanding	80,882,665		85,841,135

Total Liabilities and Members’ Equity	Total Liabilities and Members’ Equity	$	126,997,483	$	88,453,145	Total Liabilities and Members’ Equity	$	116,777,159	$	115,016,024


		Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
		June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021			Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
				(Restated)				(Restated)			March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenues, primarily related party	Revenues, primarily related party	$	55,720,460	$	42,741,846	$	168,225,436	$	104,563,490	Revenues, primarily related party	$	54,652,822	$	51,677,779	$	99,151,262	$	112,504,976

Cost of Goods Sold	Cost of Goods Sold									Cost of Goods Sold
Cost of goods sold	Cost of goods sold	49,139,917		32,371,643		137,960,322		84,150,555		Cost of goods sold	53,690,124		46,002,623		94,261,328		88,820,405
Lower of cost or net realizable value adjustment	Lower of cost or net realizable value adjustment	53,953		—		53,953		263,777		Lower of cost or net realizable value adjustment	—		—		74,000		—
Loss on firm purchase commitments	Loss on firm purchase commitments	89,000		—		885,000		—		Loss on firm purchase commitments	—		596,000		464,000		796,000
Total Cost of Goods Sold	Total Cost of Goods Sold	49,282,870		32,371,643		138,899,275		84,414,332		Total Cost of Goods Sold	53,690,124		46,598,623		94,799,328		89,616,405

Gross Profit	Gross Profit	6,437,590		10,370,203		29,326,161		20,149,158		Gross Profit	962,698		5,079,156		4,351,934		22,888,571

General and Administrative Expenses	General and Administrative Expenses	798,990		796,550		2,556,029		2,256,505		General and Administrative Expenses	1,548,153		659,859		2,788,463		1,757,039

Operating Income		5,638,600		9,573,653		26,770,132		17,892,653
Operating Income (Loss)										Operating Income (Loss)	(585,455)		4,419,297		1,563,471		21,131,532

Other Income (Expense)	Other Income (Expense)									Other Income (Expense)
Interest income	Interest income	21,154		(615)		57,684		40,016		Interest income	16,952		19,910		30,025		36,530
Other income, net		4,265,190		2,587		6,923,733		888,316
Interest expense		(3,872)		(12,562)		(19,927)		(38,588)
Total other income, net		4,282,472		(10,590)		6,961,490		889,744
Other income (expense), net										Other income (expense), net	44,356		4,315		26,846		2,658,543
Interest (expense)										Interest (expense)	(275,303)		(4,518)		(554,577)		(16,055)
Total other income (expense), net										Total other income (expense), net	(213,995)		19,707		(497,706)		2,679,018

Net Income		$	9,921,072	$	9,563,063	$	33,731,622	$	18,782,397
Net Income (Loss)										Net Income (Loss)	$	(799,450)	$	4,439,004	$	1,065,765	$	23,810,550

Weighted Average Units Outstanding	Weighted Average Units Outstanding									Weighted Average Units Outstanding
Basic	Basic	40,148,160		40,148,160		40,148,160		40,148,160		Basic	40,148,160		40,148,160		40,148,160		40,148,160

Diluted	Diluted	40,148,160		40,148,160		40,148,160		40,148,160		Diluted	40,148,160		40,148,160		40,148,160		40,148,160

Net Income Per Unit
Net Income (Loss) Per Unit										Net Income (Loss) Per Unit
Basic	Basic	$	0.25	$	0.24	$	0.84	$	0.47	Basic	$	(0.02)	$	0.11	$	0.03	$	0.59

Diluted	Diluted	$	0.25	$	0.24	$	0.84	$	0.47	Diluted	$	(0.02)	$	0.11	$	0.03	$	0.59


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


	Previously Reported Three Months Ended June 30, 2021 (unaudited)		Adjustments		Restated Three Months Ended June 30, 2021 (unaudited)
Statement of Operations
General and Administrative Expenses	$	854,179	$	(57,629)	$	796,550
Operating Income	$	9,516,024	$	57,629	$	9,573,653
Net Income	$	9,505,434	$	57,629	$	9,563,063


	Previously Reported Nine Months Ended June 30, 2021 (unaudited)		Adjustments		Restated Nine Months Ended June 30, 2021 (unaudited)
Statement of Operations
General and Administrative Expenses	$	3,173,878	$	(917,373)	$	2,256,505
Operating Income	$	16,975,280	$	917,373	$	17,892,653
Net Income	$	17,865,024	$	917,373	$	18,782,397

Statement of Cash Flows
Net Income	$	17,865,024	$	917,373	$	18,782,397
Net cash provided by operating activities	$	18,510,067	$	917,373	$	19,427,440
Capital expenditures	$	14,236,260	$	917,373	$	15,153,633
Net cash used in investing activities	$	14,236,260	$	917,373	$	15,153,633


Revenues	Revenues	For the three months ended June 30, 2022 (unaudited)		For the three months ended June 30, 2021 (unaudited)		For the nine months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2021 (unaudited)		Revenues	For the three months ended March 31, 2023 (unaudited)		For the three months ended March 31, 2022 (unaudited)		For the six months ended March 31, 2023 (unaudited)		For the six months ended March 31, 2022 (unaudited)
Ethanol, E85 and Industrial Alcohol	Ethanol, E85 and Industrial Alcohol	$	41,848,981	$	32,583,227	$	129,429,510	$	80,799,293	Ethanol, E85 and Industrial Alcohol	$	41,088,724	$	38,328,946	$	72,840,342	$	87,580,529
Distillers Grains	Distillers Grains	10,210,240		7,932,798		28,377,801		18,618,186		Distillers Grains	10,671,682		9,513,142		20,208,210		18,167,561
Syrup	Syrup	412,504		476,873		1,335,627		877,630		Syrup	222,196		573,482		372,318		923,123
Corn Oil	Corn Oil	3,215,625		1,706,942		8,940,871		4,131,184		Corn Oil	2,613,649		3,216,395		5,623,130		5,725,246
Other	Other	33,110		42,006		141,627		137,197		Other	56,571		45,814		107,262		108,517
Total revenue from contracts with customers	Total revenue from contracts with customers	$	55,720,460	$	42,741,846	$	168,225,436	$	104,563,490	Total revenue from contracts with customers	$	54,652,822	$	51,677,779	$	99,151,262	$	112,504,976


		October 1, 2021		October 1, 2020		For the nine months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2021 (unaudited)			For the period ended March 31, 2023 (unaudited)		For the period ended March 31, 2022 (unaudited)
Accounts receivable	Accounts receivable	$	1,468,521	$	1,963,236	$	3,793,322	$	2,920,313	Accounts receivable	$	11,299,801	$	4,718,900
Customer deposits	Customer deposits	11,008		—		13,960		7,334		Customer deposits	24,694		2,104


As of:	June 30, 2022 (unaudited)					September 30, 2021
Contract Type	# of Contracts	Notional Amount (Qty)		Fair Value		# of Contracts	Notional Amount (Qty)		Fair Value
Corn futures	140	700,000	bushels	$	(591,425)	—	—	bushels	$	—
Corn options	200	1,000,000	bushels	$	(372,500)	—	—	bushels	$	—





Total fair value				$	(963,925)				$	—
Amounts are combined on the balance sheet - negative numbers represent liabilities


As of:	March 31, 2023 (unaudited)					September 30, 2022
Contract Type	# of Contracts	Notional Amount (Qty)		Fair Value		# of Contracts	Notional Amount (Qty)		Fair Value
Corn futures	100	500,000	bushels	$	(61,425)	—	—	bushels	$	—
Corn options	471	2,355,000	bushels	$	(234,431)	1,080	5,400,000	bushels	$	(1,144,000)
Soybean oil options	—	—	gal	$	—	48	28,800	gal	$	(18,273)


Natural gas futures	30	300,000	dk	$	12,090	—	—	dk	$	—
Natural gas options	30	300,000	dk	$	(22,800)	—	—	dk	$	—
Total fair value				$	(306,566)				$	(1,162,273)
Amounts are combined on the balance sheet - negative numbers represent liabilities


Derivatives not designated as hedging instruments:

Balance Sheet - as of March 31, 2023 (unaudited)	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	306,566
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	306,566

Balance Sheet - as of September 30, 2022	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	1,162,273
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	1,162,273


Statement of Operations Income/(Expense)	Location of gain (loss) in fair value recognized in income	Amount of gain (loss) recognized in income during the three months ended March 31, 2023 (unaudited)		Amount of gain (loss) recognized in income during the three months ended March 31, 2022 (unaudited)		Amount of gain (loss) recognized in income during the six months ended March 31, 2023 (unaudited)		Amount of gain (loss) recognized in income during the six months ended March 31, 2022 (unaudited)
Corn derivative instruments	Cost of Goods Sold	$	479,865	$	714,021	$	1,663,427	$	1,064,539
Ethanol derivative instruments	Revenue	—		259,467		—		424,770
Soybean oil derivative instruments	Revenue	—		—		21,429		—
Natural gas derivative instruments	Cost of Goods Sold	(119,610)		202,770		(119,610)		(107,450)
Total		$	360,255	$	1,176,258	$	1,565,246	$	1,381,859


Derivatives not designated as hedging instruments:

Balance Sheet - as of June 30, 2022 (unaudited)	Asset		Liability
Commodity derivative instruments, at fair value	0		$	963,925
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	963,925

Balance Sheet - as of September 30, 2021	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	—
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	—


		June 30, 2022 (unaudited)		September 30, 2021			March 31, 2023 (unaudited)		September 30, 2022
Raw materials, including corn, chemicals and supplies	Raw materials, including corn, chemicals and supplies	$	7,204,359	$	3,978,299	Raw materials, including corn, chemicals and supplies	$	9,364,213	$	6,887,201
Work in process	Work in process	1,594,160		1,321,862		Work in process	1,861,903		1,340,059
Finished goods, including ethanol and distillers grains	Finished goods, including ethanol and distillers grains	4,518,142		4,622,007		Finished goods, including ethanol and distillers grains	1,653,984		2,702,129
Spare parts	Spare parts	1,718,150		1,624,674		Spare parts	1,680,690		1,614,644
Total inventory	Total inventory	$	15,034,811	$	11,546,842	Total inventory	$	14,560,790	$	12,544,033


					Fair Value Measurement Using
	Carrying Amount as of March 31, 2023 (unaudited)		Fair Value as of March 31, 2023 (unaudited)		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	306,566	$	306,566	$	306,566	$	—	$	—
Total	$	306,566	$	306,566	$	306,566	$	—	$	—

					Fair Value Measurement Using
	Carrying Amount as of September 30, 2022		Fair Value as of September 30, 2022		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	1,162,273	$	1,162,273	$	1,162,273	$	—	$	—
Total	$	1,162,273	$	1,162,273	$	1,162,273	$	—	$	—


Schedule of debt maturities and lease liabilities for the twelve months ending June 30	Totals
2022	$	19,088,311
2023	714,755
2024	37,289
2025	36,531
2026	12,422
Total	$	19,889,308


					Fair Value Measurement Using
	Carrying Amount as of June 30, 2022 (unaudited)		Fair Value as of June 30, 2022 (unaudited)		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	963,925	$	963,925	$	963,925	$	—	$	—
Total	$	963,925	$	963,925	$	963,925	$	—	$	—

					Fair Value Measurement Using
	Carrying Amount as of September 30, 2021		Fair Value as of September 30, 2021		Level 1		Level 2		Level 3
Assets
Commodities derivative instruments	$	—	$	—	$	—	$	—	$	—
Total	$	—	$	—	$	—	$	—	$	—


		Operating Leases		Financing Leases			Operating Leases		Financing Leases
2022		$	343,798	$	4,568
2023	2023	81,130		4,602		2023	$	350,217	$	4,594
2024	2024	35,453		1,836		2024	280,336		2,989
2025	2025	36,531		—		2025	299,128		—
2026	2026	12,422		—		2026	303,530		—
2027						2027	583,802		—
Total minimum lease commitments	Total minimum lease commitments	$	509,334	11,006		Total minimum lease commitments	$	1,817,013	7,583
Less amount representing interest	Less amount representing interest			—		Less amount representing interest			—
Present value of minimum lease commitments included in notes payable on the balance sheet	Present value of minimum lease commitments included in notes payable on the balance sheet			$	11,006	Present value of minimum lease commitments included in notes payable on the balance sheet			$	7,583


		Three Months Ended June 30, 2022 (Unaudited)			Three Months Ended June 30, 2021 (Unaudited)				Three Months Ended March 31, 2023 (Unaudited)			Three Months Ended March 31, 2022 (Unaudited)
Statement of Operations Data	Statement of Operations Data	Amount		%	Amount		%	Statement of Operations Data	Amount		%	Amount		%
Revenues	Revenues	$	55,720,460	100.00	$	42,741,846	100.00	Revenues	$	54,652,822	100.00	$	51,677,779	100.00
Cost of Goods Sold	Cost of Goods Sold	49,282,870		88.45	32,371,643		75.74	Cost of Goods Sold	53,690,124		98.24	46,598,623		90.17
Gross Profit	Gross Profit	6,437,590		11.55	10,370,203		24.26	Gross Profit	962,698		1.76	5,079,156		9.83
General and Administrative Expenses	General and Administrative Expenses	798,990		1.43	796,550		1.86	General and Administrative Expenses	1,548,153		2.83	659,859		1.28
Operating Income		5,638,600		10.12	9,573,653		22.40
Other Income, net		4,282,472		7.69	(10,590)		(0.02)
Net Income		$	9,921,072	17.81	$	9,563,063	22.37
Operating Income (Loss)								Operating Income (Loss)	(585,455)		(1.07)	4,419,297		8.55
Other Income (Loss), net								Other Income (Loss), net	(213,995)		(0.39)	19,707		0.04
Net Income (Loss)								Net Income (Loss)	$	(799,450)	(1.46)	$	4,439,004	8.59


	Three Months Ended June 30, 2022 (unaudited)		Three Months Ended June 30, 2021 (unaudited)
Production:
Ethanol sold (gallons)	15,899,612		14,335,793

Dried distillers grains sold (tons)	28,122		24,761
Modified distillers grains sold (tons)	17,979		27,608
Corn oil sold (pounds)	4,336,920		3,660,850
Revenues:
Fuel grade ethanol average price per gallon (net of hedging)	$	2.63	$	2.28

Dried distillers grains average price per ton	266.12		196.76
Modified distillers grains average price per ton	151.64		110.86
Corn oil average price per pound	0.74		0.47
Primary Inputs:
Corn ground (bushels)	5,535,187		4,925,520
Natural gas (MMBtu)	404,040		354,266
Costs of Primary Inputs:
Corn average price per bushel (net of hedging)	$	7.43	$	5.34
Natural gas average price per MMBtu (net of hedging)	6.59		2.59
Other Costs (per gallon of ethanol sold):
Chemical and additive costs	$	0.085	$	0.087
Denaturant cost	0.054		0.038
Electricity cost	0.057		0.048
Direct labor cost	0.075		0.070


	Three Months Ended March 31, 2023 (unaudited)		Three Months Ended March 31, 2022 (unaudited)
Production:
Ethanol sold (gallons)	18,962,008		17,562,727

Dried distillers grains sold (tons)	20,474		15,437
Modified distillers grains sold (tons)	41,709		51,729
Corn oil sold (pounds)	4,131,960		5,104,330
Revenues:
Fuel grade ethanol average price per gallon (net of hedging)	$	2.17	$	2.17

Dried distillers grains average price per ton	260.89		234.12
Modified distillers grains average price per ton	127.79		114.04
Corn oil average price per pound	0.63		0.63
Primary Inputs:
Corn ground (bushels)	5,773,459		5,792,048
Natural gas (MMBtu)	399,792		384,838
Costs of Primary Inputs:
Corn average price per bushel (net of hedging)	$	6.79	$	6.20
Natural gas average price per MMBtu (net of hedging)	6.16		4.14
Other Costs (per gallon of ethanol sold):
Chemical and additive costs	$	0.061	$	0.082
Denaturant cost	0.044		0.052
Electricity cost	0.077		0.044
Direct labor cost	0.060		0.061


	Six Months Ended March 31, 2023 (Unaudited)			Six Months Ended March 31, 2022 (Unaudited)
Statement of Operations Data	Amount		%	Amount		%
Revenues	$	99,151,262	100.00	$	112,504,976	100.00
Cost of Goods Sold	94,799,328		95.61	89,616,405		79.66
Gross Profit	4,351,934		4.39	22,888,571		20.34
General and Administrative Expenses	2,788,463		2.81	1,757,039		1.56
Operating Income	1,563,471		1.58	21,131,532		18.78
Other Income, net	(497,706)		(0.50)	2,679,018		2.38
Net Income	$	1,065,765	1.07	$	23,810,550	21.16


	Six Months Ended March 31, 2023 (unaudited)		Six Months Ended March 31, 2022 (unaudited)
Production:
Ethanol sold (gallons)	32,420,822		34,454,694

Dried distillers grains sold (tons)	42,473		37,094
Modified distillers grains sold (tons)	75,478		90,614
Corn oil sold (pounds)	8,606,480		9,622,950
Revenues:
Fuel grade ethanol average price per gallon (net of hedging)	$	2.25	$	2.53

Dried distillers grains average price per ton	252.40		217.30
Modified distillers grains average price per ton	125.71		111.28
Corn oil average price per pound	0.65		0.59
Primary Inputs:
Corn ground (bushels)	11,123,357		11,624,652
Natural gas (MMBtu)	791,524		789,641
Costs of Primary Inputs:
Corn average price per bushel (net of hedging)	$	6.64	$	6.11
Natural gas average price per MMBtu (net of hedging)	6.02		5.10
Other Costs (per gallon of ethanol sold):
Chemical and additive costs	$	0.077	$	0.092
Denaturant cost	0.047		0.053
Electricity cost	0.090		0.048
Direct labor cost	0.075		0.067


	Nine Months Ended June 30, 2022 (Unaudited)			Nine Months Ended June 30, 2021 (Unaudited)
Statement of Operations Data	Amount		%	Amount		%
Revenues	$	168,225,436	100.00	$	104,563,490	100.00
Cost of Goods Sold	138,899,275		82.57	84,414,332		80.73
Gross Profit	29,326,161		17.43	20,149,158		19.27
General and Administrative Expenses	2,556,029		1.52	2,256,505		2.16
Operating Income	26,770,132		15.91	17,892,653		17.11
Other Income, net	6,961,490		4.14	889,744		0.85
Net Income	$	33,731,622	20.05	$	18,782,397	17.96


	Nine Months Ended June 30, 2022 (unaudited)		Nine Months Ended June 30, 2021 (unaudited)
Production:
Ethanol sold (gallons)	50,354,306		47,275,959

Dried distillers grains sold (tons)	65,216		57,012
Modified distillers grains sold (tons)	108,593		112,300
Corn oil sold (pounds)	13,959,870		10,746,450
Revenues:
Fuel grade ethanol average price per gallon (net of hedging)	$	2.56	$	1.71

Dried distillers grains average price per ton	237.55		176.05
Modified distillers grains average price per ton	117.96		76.42
Corn oil average price per pound	0.64		0.38
Primary Inputs:
Corn ground (bushels)	17,159,839		15,378,054
Natural gas (MMBtu)	1,193,681		1,087,727
Costs of Primary Inputs:
Corn average price per bushel (net of hedging)	$	6.54	$	4.18
Natural gas average price per MMBtu (net of hedging)	5.61		2.58
Other Costs (per gallon of ethanol sold):
Chemical and additive costs	$	0.087	$	0.079
Denaturant cost	0.052		0.032
Electricity cost	0.049		0.045
Direct labor cost	0.067		0.064


	June 30, 2022 (unaudited)		June 30, 2021 (unaudited)
Net cash provided by operating activities	$	29,620,520	$	19,427,440
Net cash used in investing activities	(17,763,824)		(15,153,633)
Net cash provided by (used in) financing activities	6,429,720		(3,732,436)
Net increase in cash	$	18,286,416	$	541,371
Cash, cash equivalents and restricted cash, end of period	$	23,501,660	$	11,653,860


Exhibit No.						Exhibits
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*						Inline XBRL Instance Document
101.SCH*						Inline XBRL Schema Document
101.CAL*						Inline XBRL Calculation Document
101.LAB*						Inline XBRL Labels Linkbase Document
101.PRE*						Inline XBRL Presentation Linkbase Document
101.DEF*						Inline XBRL Definition Linkbase Document
104						The cover page from this Quarterly Report on Form 10-Q formatted in Inline XBRL.


		RED TRAIL ENERGY, LLC

Date:	~~August~~May 15, ~~2022~~2023	/s/ ~~Gerald Bachmeier~~Jodi Johnson
		~~Gerald Bachmeier~~Jodi Johnson
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	~~August~~May 15, ~~2022~~2023	/s/ ~~Jodi Johnson~~Joni Entze
		~~Jodi Johnson~~Joni Entze
		Chief Financial Officer
		(Principal Financial and Accounting Officer)