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 ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting ~~company,”~~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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~August~~February 1, ~~2019,~~2020, the number of outstanding units was ~~25,410,851.~~25,610,851.

	June 30,			September 30,			December 31,			September 30,
	2019			2018			2019			2019
	(unaudited)						(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,294		$	12,727		$	12,575		$	5,423
Accounts receivable:
Trade accounts receivable		4,242			4,198			676			3,451
Other receivables		246			192			878			174
Inventories		5,647			4,922			-			4,871
Prepaid expenses		832			732			-			217
Restricted cash								4,750			-
Total current assets		13,261			22,771			18,879			14,136
Property and equipment, net		35,558			32,211			-			35,662
Other assets		452			452			902			902

Total assets	$	49,271		$	55,434		$	19,781		$	50,700
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Accounts payable	$	5,517		$	4,635		$	890		$	3,908
Accrued expenses		1,645			2,615			1,806			2,326
Current portion of long-term debt (stated principal amount of $22,379 and $1,000 at June 30, 2019 and September 30, 2018, respectively)		22,160			905
Current portion of long-term debt (stated principal amount of $0 and $29,812 at December 31, 2019 and September 30, 2019, respectively)								-			29,593
Total current liabilities		29,322			8,155			2,696			35,827
Other liabilities		1,004			23			14			1,027
Long-term debt (stated principal amount of $0 and $19,000 at June 30, 2019 and September 30, 2018, respectively)		-			18,833
Total liabilities		30,326			27,011			2,710			36,854
Members' equity:
Members' capital, no par value, 25,410,851 units issued and outstanding		44,826			44,826			44,826			44,826
Accumulated deficit		(25,881	)		(16,403	)		(27,755	)		(30,980	)
Total members' equity		18,945			28,423			17,071			13,846
Total liabilities and members' equity	$	49,271		$	55,434		$	19,781		$	50,700

	Three Months Ended						Nine Months Ended						Three Months Ended
	June 30,			June 30,			June 30,			June 30,			December 31,			December 31,
	2019			2018			2019			2018			2019			2018
Net sales
Ethanol and related products	$	31,052		$	36,171		$	96,123		$	100,438		$	29,491		$	31,952
Total net sales		31,052			36,171			96,123			100,438			29,491			31,952
Cost of goods sold		33,805			35,991			102,612			100,737			30,088			34,226
Gross profit (loss)		(2,753	)		180			(6,489	)		(299	)
Gross margin														(597	)		(2,274	)
Selling, general and administrative expenses		872			620			2,438			2,060			1,558			764
Operating loss		(3,625	)		(440	)		(8,927	)		(2,359	)		(2,155	)		(3,038	)
Other income, net		12			56			159			187
Other income														-			130
Interest income		1			1			3			4			-			1
Interest expense		(260	)		(187	)		(713	)		(584	)		(734	)		(201	)
Net loss	$	(3,872	)	$	(570	)	$	(9,478	)	$	(2,752	)
Loss from operations													$	(2,889	)	$	(3,108	)
Gain on sale of business														6,114			-
Net income (loss)													$	3,225		$	(3,108	)
Weighted average units outstanding - basic and diluted		25,411			25,411			25,411			25,411			25,411			25,411
Loss per unit - basic and diluted	$	(0.15	)	$	(0.02	)	$	(0.37	)	$	(0.11	)
Income (loss) per unit - basic and diluted													$	0.13		$	(0.12	)

~~For the Nine Months and Three Months Ended June 30, 2019 and June 30, 2018~~(Going Concern Basis)

Nine Months Ended

Member

Members'

Accumulated

Units

Capital

Deficit

Total

MEMBERS' EQUITY - September 30, 2018

25,410,851

44,826

(16,403
)

28,423

Net loss

-

-

(9,478
)

(9,478
)
MEMBERS' EQUITY - June 30, 2019

25,410,851

$
44,826

$
(25,881
)

$
18,945

Three Months Ended

Member

Members'

Accumulated

Units

Capital

Deficit

Total

MEMBERS' EQUITY - March 31, 2019

25,410,851

$
44,826

$
(22,009
)

$
22,817

Net loss

-

-

(3,872
)

(3,872
)
MEMBERS' EQUITY - June 30, 2019

25,410,851

$
44,826

$
(25,881
)

$
18,945

Nine Months Ended

Member

Members'

Accumulated

Units

Capital

Deficit

Total

MEMBERS' EQUITY - September 30, 2017

25,410,851

$
44,826

$
(13,346
)

$
31,480

Net loss

-

-

(2,752
)

(2,752
)
MEMBERS' EQUITY - June 30, 2018

25,410,851

$
44,826

$
(16,098
)

$
28,728

Three Months Ended

Member

Members'

Accumulated

Units

Capital

Deficit

Total

MEMBERS' EQUITY - March 31, 2018

25,410,851

$
44,826

$
(15,528
)

$
29,298

Net loss

-

-

(570
)

(570
)
MEMBERS' EQUITY - June 30, 2018

25,410,851

$
44,826

$
(16,098
)

$
28,728

	Three Months Ended
	Member		Members'		Accumulated
	Units		Capital		Deficit			Total
MEMBERS' EQUITY - September 30, 2019		25,410,851	$	44,826	$	(30,980	)	$	13,846
Net income		-		-		3,225			3,225
MEMBERS' EQUITY - December 31, 2019		25,410,851	$	44,826	$	(27,755	)	$	17,071


	Three Months Ended
	Member		Members'		Accumulated
	Units		Capital		Deficit			Total

MEMBERS' EQUITY - September 30, 2018		25,410,851	$	44,826	$	(16,403	)	$	28,423
Net loss		-		-		(3,108	)		(3,108	)
MEMBERS' EQUITY - December 31, 2018		25,410,851	$	44,826	$	(19,511	)	$	25,315

	Nine Months Ended						Three Months Ended
	June 30,			June 30,			December 31,			December 31,
	2019			2018			2019			2018
Cash flows from operating activities:
Net loss	$	(9,478	)	$	(2,752	)
Adjustments to reconcile net loss to operating activities cash flows:
Net income (loss)							$	3,225		$	(3,108	)
Adjustments to reconcile net income (loss) to operating activities cash flows:
Depreciation		2,883			2,899			960			959
Amortization of deferred financing costs		82			72			219			24
Amortization of deferred rent		(6	)		(6	)		(2	)		(2	)
Gain on disposal of assets		(1	)		-
Loss of sale of property and equipment								16			-
Gain on sale of business								(6,114	)		-
Change in working capital components:
Trade accounts receivable		(44	)		(320	)		2,775			1,036
Other receivables		(54	)		517			(704	)		(85	)
Inventories		(725	)		(562	)		950			(973	)
Prepaid expenses		(100	)		(174	)		84			(312	)
Accounts payable		828			453			(2,356	)		771
Accrued expenses		17			83			(520	)		(223	)
Net cash provided by (used in) operating activities		(6,598	)		210
Other liabilities								25			-
Net cash used in operating activities								(1,442	)		(1,913	)

Cash flows from investing activities:
Purchase of property and equipment		(6,222	)		(1,582	)		(956	)		(2,995	)
Proceeds from sale of assets		47			-
Change in other assets		-			304
Net cash used in investing activities		(6,175	)		(1,278	)
Proceeds from sale of business								44,112			-
Net cash provided by (used in) investing activities								43,156			(2,995	)
Cash flows from financing activities:
Payments on debt		(1,000	)		(3,638	)		(30,500	)		(1,000	)
Proceeds from debt		3,379			-			688			900
Payment of deferred financing costs		(39	)		(46	)
Net cash provided by (used in) financing activities		2,340			(3,684	)
Net decrease in cash, cash equivalents and restricted cash		(10,433	)		(4,752	)
Net cash used in financing activities								(29,812	)		(100	)
Net increase (decrease) in cash, cash equivalents and restricted cash								11,902			(5,008	)
Beginning cash, cash equivalents and restricted cash		12,727			19,804			5,423			12,727
Ending cash, cash equivalents and restricted cash	$	2,294		$	15,052		$	17,325		$	7,719
Supplemental disclosure of cash flow information:
Cash paid for interest	$	699		$	613
Cash paid for interest, net of capitalized interest of $80 thousand and $43 thousand in the three months ended December 31, 2019 and December 31, 2018, respectively							$	448		$	165
Supplemental disclosure of non-cash financing and investing activities:
Accounts payable and accrued expenses related to fixed assets	$	747		$	32		$	-		$	468

The consolidated financial statements include the accounts of Advanced BioEnergy, LLC (“ABE” or the “Company”) and its wholly owned subsidiary, ABE South Dakota, LLC (“ABE South Dakota”). ~~Substantially all of the assets of the Company’s ABE Fairmont, LLC subsidiary were sold in December 2012 and ABE Fairmont, LLC has been liquidated and dissolved.~~ All intercompany balances and transactions have been eliminated in consolidation.

Advanced BioEnergy, LLC is organized as a Delaware limited liability company. Members’ liability is limited pursuant to the Delaware Limited Liability Company Act. As noted below, the Company has adopted a Plan of Liquidation and has been dissolved under Delaware law.

The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP, for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2018. The financial information as of June 30, 2019 and the results of operations for the three and nine months ended June 30, 2019 are not necessarily indicative of the results for the fiscal year ending September 30, 2019. In the opinion of management, the interim financial statements reflect all normal recurring adjustments necessary for fair presentation.

Until December 19, 2019, the Company ~~currently owns~~owned two ethanol production facilities in Aberdeen and Huron, South Dakota with a combined production capacity of 80 million gallons per year.On August 1, 2019, the Company and ABE South Dakota entered into an asset purchase agreement (the “Asset Purchase Agreement ”) with Glacial Lakes Energy, LLC (“GLE”), under which ABE South Dakota agreed to sell its Aberdeen and Huron, South Dakota ethanol plants and related businesses to GLE (the “Asset Sale”). On December 19, 2019, Advanced BioEnergy, ABE South Dakota and GLE closed the Asset Sale. At the closing, ABE South Dakota sold to GLE substantially all of the assets related to its business of producing ethanol and co-products, including wet, modified and dried distillers’ grains and corn oil, through its plants located in Aberdeen, South Dakota and Huron, South Dakota.

Under the Asset Purchase Agreement, the purchase price was $47.5 million, plus the value of the Company’s inventory at closing, which was approximately $2.3 million. At the closing, Buyer paid to ABE South Dakota a total of $8.3 million in cash, which reflects the purchase price, less the approximately $31.0 million to repay the AgCountry Master Credit Agreement obligations, less the amount of certain accrued contract liabilities, and less $4.75 million of the purchase price that was deposited into an indemnity escrow account. The indemnity escrow account will be used to satisfy any of Buyer’s claims for indemnification under the Asset Purchase Agreement and any amounts remaining after the eighteen (18)-month anniversary of the closing will be released to the Company. The Company also paid approximately $0.7 million in transaction expenses at closing

At a Special Meeting of Members held on September 19, 2019, the Company’s members approved a Plan of Liquidation and Dissolution (the “Plan of Liquidation”) for the voluntary liquidation and dissolution of the Company following the consummation of the Asset Sale to GLE.Upon the closing of the Asset Sale, the Company commenced its liquidation in accordance with the Plan of Liquidation.

As a result of the approval of the Plan of Liquidation and Dissolution and the consummation of the Asset Sale on December 19, 2019, the Company adopted the Liquidation Basis of Accounting, using a convenience date of December 31, 2019. This basis of accounting is considered appropriate when, among other things, liquidation of the Company is imminent, as defined in ASC 205-30 “Presentation of Financial Statements – Liquidation Basis of Accounting.” The consolidated statement of net assets in liquidation is the principal financial statement presented under the Liquidation Basis of Accounting. A statement of changes in net assets in liquidation was not required due to the adoption of the Liquidation Basis of Accounting using a convenience date of December 31, 2019. A reconciliation of the effects of adopting the Liquidation Basis of Accounting and estimated costs during liquidation are provided in Notes 2 and 3 to the Consolidated Financial Statements, respectively.

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s cash balances are maintained in bank depositories and periodically exceed federally insured limits. The Company has not experienced losses in these accounts. Restricted cash at December 31, 2019 included an amount in and indemnity escrow account as

part of the Asset Sale of the Company by Glacial Lakes Energy (“GLE”) as noted above. The Company does not expect any indemnification claims and expects the full amount to be available for distribution upon its release.

The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheet that sum to the total of the same such amounts in the consolidated statement of cash flows (in thousands):

Financial instruments include cash, cash equivalents and restricted cash, accounts receivable, accounts payable, accrued expenses, and long-term debt. The fair value of the long-term debt is estimated based on level 3 inputs based on current anticipated interest ~~rate~~rates that management believes would currently be available to the Company for similar debt, taking into account the current credit risk of the Company and other market factors. Based on these factors, the fair value of the long-term debt ~~is currently~~carried at September 30, 2019 was estimated at carrying value. Excluding cash and cash equivalents, the fair value of the other financial instruments ~~are~~is estimated to approximate carrying value due to the short-term nature of these instruments, ~~and are considered~~which the Company considers to be Level 3 inputs.

Deferred financing costs are recorded at cost and include expenditures related to secure debt financing. Deferred financing costs at September 30, 2019 are shown as contra debt and were being amortized into interest expense over the term of the agreement using the straight-line method, which approximates the effective interest method. Upon the closing of the Asset Sale On December 19, 2019, the Company’s outstanding debt was paid in full and all remaining deferred financing costs were expensed.

Credit sales are made to a relatively small number of customers with no collateral required. Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and considering a customer’s financial condition, credit history and current economic conditions. Receivables are written off if deemed uncollectible. Recoveries of receivables previously written off are recorded when received. There was no allowance for doubtful accounts recorded at ~~June 30,~~December 31, 2019 or September 30, ~~2018.~~2019.

Ethanol inventory, raw materials, work-in-process and parts inventory are valued using methods that approximate the lower of cost (first-in, first-out) or net realizable value ~~(“NRV”)~~(NRV). Distillers grains and related products are stated at NRV. In the valuation of inventories and purchase and sale commitments, the Company determines NRV by estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Property and equipment is carried at cost less accumulated depreciation computed using the straight-line method over the estimated useful lives:

Interest capitalized in property and equipment was ~~$235,000~~$80,000 and $0$43,000 for the ~~nine~~three months ended ~~June 30,~~December 31, 2019 and 2018, respectively.

Maintenance and repairs are charged to expense as incurred; major improvements and betterments are capitalized. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group. An impairment loss is measured by the amount by which the carrying value of the asset group exceeds the estimated fair value on that date.

The Company ~~enters~~entered into forward sales contracts for ethanol, distillers and corn oil, and purchase contracts for corn and natural gas. The Company ~~classifies~~classified these sales and purchase contracts as normal sales and purchase contracts and accordingly these contracts ~~are~~were not marked to market. These contracts ~~provide~~provided for the sale or purchase of an item other than a financial instrument or derivative instrument ~~that will~~to be delivered in quantities expected to be sold or used over a reasonable period in the normal course of business.

In addition, certain derivative financial instruments that meet the criteria for derivative accounting treatment also qualify for a scope exception to derivative accounting, as they are considered normal purchases and sales. The availability of this exception iswas based on the assumption that the Company ~~has~~had the ability and it iswas probable that it ~~will~~would deliver or take delivery of the underlying item. Derivatives that are considered to be normal purchases and sales are exempt from derivative accounting treatment, and are accounted for under accrual accounting.

Effective October 1, 2018, the Company adopted the new guidance of ~~Accounting Standard Codification (“ASC”)~~ASC Topic 606, ~~“Revenue~~Revenue from Contracts with ~~Customers”~~Customers (Topic 606) using the modified retrospective approach. Topic 606 requires the Company to recognize revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which ABE expects to be entitled in exchange for those goods or services. The new guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The Company generally recognizes revenue at a point in time. The majority of the Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The adoption of this new guidance did not result in any change to our recognition of revenue.

The following is a description of principal activities from which we ~~generate~~generated revenue. Revenues from contracts with customers are recognized when control of the promised goods isare services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those ~~goods.~~goods or services.

We disclose disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, in Note 5.7.

Basic and diluted ~~loss per-unit~~income (loss) per unit is computed using the weighted-average number of vested units outstanding during the period.

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. Actual results could differ from those estimates.

The Company has elected to be treated as a partnership for tax purposes and generally does not incur income taxes. Instead, the Company’s earnings and losses are included in the income tax returns of ~~the~~its members. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. The Company files income tax returns in the U.S. federal and various state jurisdictions.

In February 2016, the ASC was amended and a new accounting standard, ASC Topic 842, “Leases,” was issued to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ToIn order to meet that objective, the new standard requires recognition of the assets and liabilities that arise from leases. Accordingly, a lessee will recognize a right-of-use ~~(“ROU”)~~(ROU) asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. The lease liability will initially be measured at the present value of the future minimum lease payments over the lease term. The ROU asset will initially be measured as the sum of the initial lease liability, initial costs directly attributable to negotiating and arranging the lease, and ~~any~~ payments made by ~~the~~a lessee to the lessor at or before the lease commencement date less any lease incentives received. Lessees can make an accounting policy election by class of underlying asset not to recognize a ROU asset and corresponding lease liability for leases with a term of 12 months or less. Accounting by lessors will remain largely unchanged from current U.S. GAAP. ~~There~~In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients ~~which~~that companies may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases, leveraged leases, and amounts previously recognized in accordance with the business combinations guidance for leases. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. ~~We have not completed~~The Company sold substantially all of its assets on December 19, 2019 in the ~~evaluation~~Asset Sale described above. When the Company adopted the ASU 842 guidance, a right-of-use asset and related liability of approximately $9.0 million were created. However, due to the Asset Sale, the ending effect ~~this standard will have on our financial statements, but we believe that~~of adopting this standard ~~may~~did not have a material ~~effect~~impact on ~~our assets and liabilities due to the recognition of right-of-use assets and liabilities on our consolidated~~ ~~balance sheet. The Company is continuing its assessment, which may identify additional effects that adoption of this standard may have on its~~these consolidated financial statements and related disclosures.

As a result of the member approval of the Plan of Liquidation and ~~Subsequent Event~~

~~The Company has experienced an extended period~~Dissolution and the consummation of ~~depressed margins which has resulted in a significant decrease in working capital and cash over~~ the ~~past several months. In~~Asset Sale on December 2018, the Company was able to obtain covenant waivers from its lender to cure Events of Default related to covenant compliance and to modify future covenant requirements to allow it to remain in compliance until the margin environment improved. On February 26,19, 2019, the Company ~~announced that it had retained a financial advisory firm to explore strategic alternatives and help evaluate~~adopted the ~~opportunities and options available to~~Liquidation Basis of Accounting, effective December 31, 2019.

Under the ~~Company, which could include the sale~~Liquidation Basis of one or both of its ethanol plants. The margin environment did not improve in the ensuing months. As a result, pressure on working capital and cash increased, and the Company was required to seek additional waivers for Events of Default at June 30, 2019 and July 31, 2019. These factors raised substantial doubt as to the Company’s ability to continue as a going concern for the next 12 months. Management believed these factors to be significant due to a lack of liquidity and uncertainty regarding the Company’s ability to meet its financial obligations without additional financing or equity infusion. On August 1, 2019, the Company entered into an Asset Purchase Agreement with Glacial Lakes Energy (“GLE”) under which the Company agreed to sell both its ethanol plants to GLE for a price of $47.5 million plus the value of the inventory at closing. On August 7, 2019, ABE South Dakota then entered into the Fifth Supplement to the Master Credit Agreement described elsewhere in this Form 10-Q, which provided the Company with adequate capital resources to meet its obligations. The Company currently expects the transaction to close in the third or fourth calendar quarter of 2019. Due to management’s plans to sell substantiallyAccounting, all of the Company’s assets ~~and~~have been stated at the ~~ability~~amounts expected to be collected. All liabilities of the Company have been stated at their contractual value or estimated settlement amount. The estimated costs associated with implementing the Plan of Liquidation and Dissolution have been stated at their estimated settlement amounts.

On January 14, 2020 the Company’s Board of Directors declared a distribution of $7.8 million or $0.31 per unit. The distribution was paid to ~~settle~~ all ~~outstanding~~ members of record as of January 24, 2020. The Company ~~obligations~~expects to distribute its remaining cash in June 2021 subsequent to the release of $4.8 million in cash held in escrow in connection with the ~~proceeds~~Asset Sale and anticipates the final dissolution of the ~~sale, management believes~~Company will be complete on or about July 31, 2021. The Company expects the ~~substantial doubt regarding~~Final Distribution of cash will be approximately $0.30 per unit.

The valuation of assets at the amounts expected to be collected and liabilities at their contractual value or estimated settlement amount represent estimates, based on present facts and circumstances, of the value of the assets and the costs associated with completing the Plan of Liquidation and Dissolution. The actual values and costs associated with completing the Plan of

Liquidation and Dissolution may differ from amounts reflected in the accompanying financial statements because of the Plan’s inherent uncertainty.

The Liquidation Basis of Accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the Plan of Liquidation and Dissolution. These amounts can vary significantly due to, among other things, the costs of retaining personnel and others to oversee the liquidation, the cost of insurance, the timing and amounts associated with discharging known and contingent liabilities and the costs associated with cessation of the Company’s ~~ability~~operations, including an estimate of costs subsequent to ~~continue as~~that date. As a ~~going concern has been alleviated. Although~~result, the Company ~~believes there is a high likelihood~~has accrued the ~~transaction will close, in~~projected costs, including corporate overhead and specific liquidation costs of severance, professional fees, and other miscellaneous wind down costs expected to be incurred during the ~~event~~projected period and required to complete the ~~transaction does not close, unless margins improve significantly,~~liquidation of the Company’s remaining assets.

These accruals may be adjusted from time to time as projections and assumptions change. These costs are anticipated to be paid throughout the liquidation period. Based on the transition to the Liquidation Basis of Accounting on December 31, 2019, the Company ~~would~~accrued the following expenses expected to be ~~required to seek additional debt waivers~~incurred during liquidation and ~~possible additional financing while it pursued other strategic alternatives.~~dissolution period (in thousands):

	June 30,							September 30,
	2019	June 30,			September 30,			2019	December 31,			September 30,
	Interest Rate	2019			2018			Interest Rate	2019			2019
ABE South Dakota:
Senior debt principal - fixed	6.32%	$	9,000		$	-		6.32%	$	-		$	9,000
Senior debt principal - variable	5.95%		13,379			20,000		5.70%		-	��		14,312
Short term revolving line								6.20%		-			6,500
Deferred financing costs	N/A		(219	)		(262	)	N/A		-			(219	)
Total outstanding		$	22,160		$	19,738
Total outstanding (stated principal)									$	-		$	29,593

~~2015 Senior~~AgCountry Master Credit Agreement ~~for the South Dakota Plants~~

On December 19, 2019, all amounts outstanding under the Master Credit Agreement dated December 29, 2015, as amended (“Master Credit Agreement”) between ABE South Dakota ~~entered into a Master Credit Agreement (“2015 Credit Agreement”) with~~as borrower and AgCountry Farm Credit Services, PCA as lender (“AgCountry”) ~~to refinance its existing 2010 Senior Credit Agreement. On December 29, 2015,~~were repaid in full. The total amount repaid was approximately $31.0 million, which was repaid from the ~~Company also entered into (i) a First Supplement to~~purchase price from the ~~2015 Credit Agreement covering a $10.0~~Asset Sale described above. The $31.0 million ~~Revolving Term Facility and (ii) a Second Supplement covering a $20.0 million Term Loan. The transaction funded on December 30, 2015.~~

The $20.0 million Term Loan has a fixed interest rate (“Fixed Rate”) at June 30, 2019. On October 26, 2018, the Company elected to lock in a fixed rate of 6.4%, rather than a variable rate, on the remaining balancepayment consisted of the ~~Term Loan. On January 2, 2019, the Company entered into an Interest Rate Conversation Agreement with AgCountry, under which the Fixed Rate of 6.4% was reduced to 6.32% for the remainder~~following amounts outstanding as of the ~~loan term. The Company may elect one or more fixed or adjustable interest rates, rather than a variable rate, based on AgCountry’s cost of funds at the time~~closing date of the ~~election, plus the margin of 350 basis points. Any election must apply to $1.0~~Asset Sale: $30.5 million plus accrued interest, on the Term Loan. The Term Loan was originally scheduled to be fully amortized over five years with the final payment on January 1, 2021. As described below, the payments originally due in ~~January, April and July 2019 have been deferred and are now due at the end of the term, or January 1, 2021. At June 30, 2019, the balance of the Term Loan was $9.0 million.~~

~~The $10.0~~principal, $0.4 million Revolving Term Facility has a variable rate (“Variable Rate”) equal to the one-month LIBOR rate plus an initial Margin of 350 basis points. At June 30, 2019, the Variable Rate was equal to the one-month LIBOR rate of 2.45% plus a Margin of 350 basis points. Borrowings under the Revolving Term Facility may be advanced, repaid and re-borrowed during the term. The Company is required to make quarterly interest payments on the Revolving Term Facility, with the full principal amount outstanding due on January 1, 2021. Under the Revolving Term Facility, the Company is required to pay unused commitment fees of 50 basis points. At June 30, 2019, the balance of the Revolving Term Facility was $10.0 million.

The Margin will (i) decrease to 3.25% when the aggregate principal balance of all outstanding loans and the unfunded commitment level is $20.0 million or less, and (ii) decrease to 3.00% when this amount is $15.0 million or less. At June 30, 2019, the principal balance of all outstanding loans was $22.2 million, and the unfunded commitment level was $1.6 million.

ABE South Dakota also entered into a Security Agreement with AgCountry under which borrowings under the 2015 Credit Agreement are secured by substantially all of ABE South Dakota’s assets. AgCountry holds a first priority securityin interest and ~~mortgage~~$0.1 million in ~~all inventory, accounts receivable, intangibles, equipment, fixtures, buildings, and a first mortgage in land owned or leased by ABE South Dakota.~~

The 2015 Credit Agreement also includes customary financial and non-financial covenants that limit capital expenditures, distributions and debt and require minimum working capital, current ratio, debt to EBITDA, and fixed charge coverage ratios.

On March 13, 2018, ABE South Dakota entered into the Fourth Supplement to the 2015 Credit Agreement (“2018 Term Loan”) with AgCountry to finance a grain storage and receiving facility at the Aberdeen plant. The agreement provides for a $5.0 million multiple advance credit facility. The loan has a variable interest rate equal to the one-month LIBOR rate plus a “Margin” of 350 basis points. During the construction period, the Company will make quarterly interest payments in arrears on the first day of each quarter. Upon completion of construction, the Company will be required to make quarterly principal payments in the amount of $250,000 per quarter, plus accrued interest. The 2018 Term Loan will be fully amortized over five years, with the final payment due on July 1, 2024. At June 30, 2019, $3.4 million had been drawn on the 2018 Term Loan, and $47,000 in loan fees and ~~closing costs had been incurred, which have been classified as deferred financing costs. These deferred financing costs will be amortized as interest expense over~~expenses. Effective upon the ~~term of the 2018 Term Loan.~~

~~On August 7, 2019, ABE South Dakota entered into the Fifth Supplement to~~repayment, the Master Credit Agreement ~~(“2019 Revolving Loan”),~~and all related documents were terminated in accordance with their terms and AgCountry ~~to provide for a $6.5 million short-term revolving credit loan. The 2019 Revolving Loan will be used to finance working capital needs through the closing~~released its security interest in, and liens and mortgages on, all of the ~~sale~~properties, rights and assets of ~~the~~ ABE South Dakota assets pursuant to the Asset Purchase Agreement as described in Part II, Item 5 of this Form 10-Q and in Item 1.01 of the August 7, 2019 Current Report on Form 8-K, as well as the purchase of approximately 800,000 bushels of corn. The 2019 Revolving Loan has a variable interest rate equal to the one-month LIBOR rate plus a Margin of 400 basis points. Borrowings under the Revolving Loan may be advanced, repaid and re-borrowed during the term, except during an outstanding Event of Default. The Company is required to make monthly interest payments on the Revolving Loan beginning September 1, 2019, with the full principal amount outstanding due on the earlier of November 1, 2019 or the date on which the obligations have been declared or have automatically become due and payable, whether by acceleration or otherwise.Dakota.

As a result of a depressed margin environment in the first nine months of fiscal 2019 and in fiscal 2018, ABE South Dakota requested waivers for certain specific Events of Default at June 30, 2019 and September 30, 2018, and requested covenant amendments for specific future covenants for which ABE South Dakota projected possible non-compliance. Although ABE South Dakota’s lender, AgCountry Farm Credit Services, PCA, granted the waivers and covenant amendments via two Limited Waiver Agreements and the Third and Fourth Amendments to the 2015 Credit Agreement, as discussed below, we cannot project with certainty that we will meet all covenant obligations, as amended, if depressed margins continue for an extended period of time. If ABE South Dakota is unable to comply with the amended covenants, we cannot ensure that our lender will grant us future waivers, which could result in a material adverse effect upon our business, results of operations and financial condition.

On October 19, 2018, ABE South Dakota entered into a Limited Waiver and Third Amendment to the 2015 Credit Agreement (“Third Amendment”) to waive certain Events of Default related to covenant compliance as of September 30, 2018 and temporarily amend certain future covenants. The Third Amendment included the following covenant waiver and amendments: (i) the Fixed Charge Coverage Ratio was waived as of September 30, 2018, reduced to a ratio of 1.00:1.00 as of September 30, 2019, and reverts back to 1.15:1.00 at September 30, 2020, (ii) the Working Capital Covenant was reduced to $10 million at September 30, 2018 and December 31, 2018, $9 million at March 31, 2019 and June 30, 2019, then increased to $10 million at September 30, 2019 and $12 million at September 30, 2020 and all times thereafter, (iii) the Capital Expenditures covenant was increased to $8.0 million for the year ending September 30, 2019, and reverts back to $2.0 million for all subsequent years, and (iv) the outstanding Debt to EBITDA Ratio was waived at September 30, 2018 and will revert back to the requirement that it be less than 4:00:1:00 on the last day of each fiscal year end beginning September 30, 2019.

On December 28, 2018, ABE South Dakota entered into a Limited Waiver and Deferral Agreement and Fourth Amendment to the 2015 Credit Agreement (“Fourth Amendment”) to defer three future principal payments and waive and temporarily amend certain future covenants. The Fourth Amendment included the following covenant waivers and amendments:

On July 17, 2019, ABE South Dakota entered into a Limited Waiver Agreement to the 2015 Credit Agreement (“Limited Waiver”) to waive the Event of Default related to compliance with the Working Capital Covenant at May 31, 2019 and June 30, 2019. As a condition to AgCountry granting the Limited Waiver, ABE South Dakota’s parent company, Advanced BioEnergy, LLC was required to make a cash investment not less than $300,000 to be available for ABE South Dakota’s working capital needs.

On August 7, 2019, ABE South Dakota entered into a Second Limited Waiver Agreement to the 2015 Credit Agreement (“Second Limited Waiver”) to waive outstanding and expected Events of Default related to compliance with the Working Capital Covenant at July 31, 2019 and August 31, 2019, and the Current Ratio Covenant at June 30, 2019, July 31, 2019 and August 31, 2019.

In light of the difficult margin environment and the Waivers and Amendments described above, ABE South Dakota evaluated projected covenant compliance for the 12 month period following June 30, 2019. Based on this evaluation, ABE South Dakota determined compliance over the next 12 month period is not reasonably possible and, as a result, has recognized all debt as current on its financial statements.

ABE South Dakota ~~has~~had ethanol marketing agreements with NGL ~~Crude Logistics LLC~~Energy Partners, LP (“NGL”), a diversified energy business. These ethanol marketing agreements ~~require~~required that we sell to NGL all of the denatured fuel-grade ethanol produced at the South Dakota plants. The term of these ethanol marketing agreements were originally set to expire on June 30, 2019. On April 1, 2019, the agreements were amended to change the term to ~~month to month,~~month-to-month, with three months written notice by either party required to terminate the agreement. On September 27, 2019, the Company provided notice of termination due to the Asset Sale. The agreements terminated on December 31, 2019.

ABE South Dakota iswas party to a co-product marketing agreement with Dakotaland Feeds, LLC (“Dakotaland Feeds”), under which Dakotaland Feeds ~~markets~~marketed the local sale of wet ~~distillers~~distillers’ grains produced at the ABE South Dakota Huron plant and modified ~~distillers~~distillers’ produced at the Aberdeen plant to third parties for an agreed-upon commission. ABE South Dakota ~~has~~had a marketing agreement with Gavilon ~~Ingredients, LLC (“Gavilon”)~~ to market the dried ~~distillers~~distillers’ grains produced at the Aberdeen and Huron ~~plants through~~plants. This agreement was originally set to expire on July 31, 2019. On May 8, 2019, the agreement was amended so the term would continue until either party gave no less than sixty days written notice. On September 30, 2019, the Company provided notice of termination due to the Asset Sale. The agreement terminated on November 30, 2019. The Company continued to sell dried distillers’ to Gavilon through the closing of the Asset Sale. ABE South Dakota ~~self-markets~~self-marketed its wet and a small portion of modified ~~distillers~~distillers’ grains produced at the Aberdeen plant.

ABE South Dakota iswas party to an agreement with Gavilon to market all of the corn oil produced by the Huron and Aberdeen plants through November 30, 2019 and September 30, 2019, respectively. On July 6, 2019, a notice of termination for the Huron plant was delivered to Gavilon terminating the contract as of October 20, 2019. The Company continued to sell corn oil to Gavilon through the closing of the Asset Sale. On August 21, 2019, a termination notice for the Aberdeen plant was delivered to Gavilon whereby the agreement terminated on the closing date of the Asset Sale.

Sales and receivables from the ABE South Dakota’s major customers through December 18, 2019, the date prior to the Asset Sale were as follows (in thousands):

	As of and for the Three and Nine Months Ending		As of and for the Three and Nine Months Ending		As Of		As of and for the Quarter Ending		As of and for the Quarter Ending		As Of
	June 30,		June 30,		September 30,		December 31,		December 31,		September 30,
	2019		2018		2018		2019		2018		2019
NGL Energy - Ethanol
Three months revenues	$	24,538	$	27,194			$	23,096	$	23,704
Nine months revenues		72,867		76,657
Receivable balance at period end		3,303		2,547	$	3,274		168		1,880	$	2,342
Gavilon - Corn Oil & Distillers Grains
Three months revenues	$	3,629	$	4,982			$	3,847	$	4,663
Nine months revenues		12,613		12,426
Receivable balance at period end		502		1,104	$	385		502		427	$	408
Dakotaland Feeds - Distillers Grains
Three months revenues	$	2,571	$	3,625			$	2,501	$	3,399
Nine months revenues		9,796		10,035
Receivable balance at period end		313		509	$	499		-		759	$	465
Other Various Small Customers - Distillers Grains
Three months revenues							$	47	$	186
Receivable balance at period end								6		96	$	129

The Company is exposed to a variety of market risks, including the effects of changes in commodity prices and interest rates. These financial exposures are monitored and managed by the Company as an integral part of its overall risk management program. The Company’s risk management program seeks to reduce the potentially adverse effects that the volatility of these markets may have on its current and future operating results. To reduce these effects, the Company generally attempts to fix corn purchase prices and related sale prices of ethanol, distillers grains and corn oil, with forward purchase and sale contracts to lock in future operating margins. The Company had entered into the following fixed price forward contracts at June 30, 2019:

Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales” and therefore are not marked to market in the financial statements.

The following financial information represents the unconsolidated financial statements of Advanced BioEnergy, LLC (“ABE”) as of June 30, 2019 and September 30, 2018, and for the nine months ended June 30, 2019 and 2018. ABE’s ability to receive distributions from ABE South Dakota is based on the terms and conditions in ABE South Dakota 2015 Credit Agreement. Under the 2015 Credit Agreement, ABE South Dakota is allowed to make equity distributions of up to 40% of its net income and may distribute up to 100% of its net income if it achieves and maintains an owner’s equity ratio of at least 60% and working capital of at least $15 million. There were no distributions from ABE South Dakota during the last three fiscal years.

June 30,

September 30,

2019

2018

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$
570

$
1,220

Prepaids

27

-

Total current assets

597

1,220

Property and equipment, net

19

25

Other assets:

Investment in ABE South Dakota

18,478

27,303

Other assets

32

32

Total assets

$
19,126

$
28,580

LIABILITIES AND MEMBERS' EQUITY

Liabilities:

Accounts payable

$
14

$
-

Accrued expenses

149

134

Other liabilities

18

23

Total liabilities

181

157

Members' equity:

Members' capital, no par value, 25,410,851 units issued and outstanding

44,826

44,826

Accumulated deficit

(25,881
)

(16,403
)
Total members' equity

18,945

28,423

Total liabilities and members' equity

$
19,126

$
28,580

Three Months Ended

Nine Months Ended

June 30,

June 30,

June 30,

June 30,

2019

2018

2019

2018

Equity in losses of consolidated subsidiary

$
(3,703
)

$
(466
)

$
(8,825
)

$
(2,358
)

Selling, general and administrative expenses

(170
)

(105
)

(655
)

(428
)

Operating loss

(3,873
)

(571
)

(9,480
)

(2,786
)

Other income

-

-

-

30

Interest income

1

1

2

4

Net loss

$
(3,872
)

$
(570
)

$
(9,478
)

$
(2,752
)

Nine Months Ended

June 30,

June 30,

2019

2018

Cash flows from operating activities:

Net loss

$
(9,478
)

$
(2,752
)
Adjustments to reconcile net loss to operating activities cash flows:

Depreciation

6

22

Equity in losses of consolidated subsidiaries

8,825

2,358

Amortization of deferred revenue and rent

(5
)

(6
)
Change in working capital components:

Prepaid expenses

(27
)

(25
)
Accounts payable

14

3

Accrued expenses

15

(15
)
Net cash used in operating activities

(650
)

(415
)
Cash flows from investing activities:

Net cash used in investing activities

-

-

Cash flows from financing activities:

Net cash used in financing activities

-

-

Net decrease in cash, cash equivalents and restricted cash

(650
)

(415
)
Beginning cash, cash equivalents and restricted cash

1,220

1,725

Ending cash, cash equivalents and restricted cash

$
570

$
1,310

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

This Quarterly Report on Form 10-Q for the quarter ended December 31, 2019 should be read in light of the recent events described below under “Overview.”

This Quarterly Report on Form 10-Q contains forward-looking statements regarding our business, financial condition, results of operations, performance and prospects. All statements that are not historical or current facts are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended September 30, ~~2018~~2019 and in this Form 10-Q. ~~These risks and uncertainties include, but are not limited to, the following:~~

In addition, if we are unable to successfully complete the closing of the sale of our Aberdeen and Huron South Dakota ethanol plants in a timely manner, we will continue to face the following risks and uncertainties:

You can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,”�� “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events, are based on assumptions, and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed from time to time with the U.S. Securities and Exchange Commissions, which we refer to as the SEC, that advise interested parties of the risks and factors that may affect our business.

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements included herewith and notes to the consolidated financial statements thereto.

Advanced BioEnergy, LLC ~~(“Company,~~(the “Company,” “we,” “our,” “Advanced BioEnergy” or “ABE”) was formed in 2005 as a Delaware limited liability company. Our business ~~consists~~is carried out primarily through our wholly-owned subsidiary, ABE South Dakota, LLC (“ABE South Dakota”).

On August 1, 2019, Advanced BioEnergy and ABE South Dakota entered into an asset purchase agreement (the “Asset Purchase Agreement ”) with Glacial Lakes Energy, LLC (“GLE”), under which ABE South Dakota agreed to sell its Aberdeen and Huron South Dakota ethanol plants and related businesses to GLE (the “Asset Sale”). The Asset Purchase Agreement and Asset Sale, which constitutes the sale of substantially all of the assets of the Company, was unanimously approved by the Company’s Board of Directors.

At a Special Meeting of Members held on September 19, 2019, the Company’s members approved the Asset Purchase Agreement and the Asset Sale. Also at the Special Meeting of Members, the members approved a Plan of Liquidation and Dissolution (the “Plan of Liquidation”) for the voluntary liquidation and dissolution of the Company.

On December 19, 2019, Advanced BioEnergy, ABE South Dakota and GLE closed the Asset Sale. At the closing, ABE South Dakota sold to GLE substantially all of the assets related to its business of producing ethanol and co-products, including wet, modified and dried distillers’ grains and corn oil. Ethanol is a renewable, environmentally clean fuel source that is produced at numerous facilities in the U.S., mostly in the Midwest. In the U.S., ethanol is produced primarily from corn and then blended with unleaded gasoline in varying percentages. The ethanol industry in the U.S. has grown significantly as the use of ethanol reduces harmful auto emissions, enhances octane ratings of the gasoline with which it is blended, offers consumers a cost-effective choice, and decreases the amount of crude oil, ~~the U.S. needs to import from foreign sources.~~

To execute our business plan, in November 2006 we acquired ABE South Dakota, LLC (f/k/a Heartland Grain Fuels, LP), which owned existing ethanol production facilities in Aberdeen and Huron, South Dakota. We commenced construction of our expansion facilitythrough its plants located in Aberdeen, South Dakota in April 2007, and commenced operations in January 2008. Our production operations are carried out primarily through our operating subsidiary ABE South Dakota, which owns and operates ethanol facilities in Aberdeen and Huron, South Dakota.

~~Operating segments are defined~~Under the Asset Purchase Agreement, the purchase price was $47.5 million, plus the value of the Company’s inventory at closing, which was approximately $2.3 million. At the closing, Buyer paid to ABE South Dakota a total of $8.3 million in cash, which reflects the purchase price, less the approximately $31.0 million to repay the AgCountry Master Credit Agreement obligations, less the amount of certain accrued contract liabilities, and less $4.75 million of the purchase price that was deposited into an indemnity escrow account. The indemnity escrow account will be used to satisfy any of Buyer’s claims for indemnification under the Asset Purchase Agreement and any amounts remaining after the eighteen (18)-month anniversary of the closing will be released to the Company. The Company also paid approximately $0.7 million in transaction expenses at closing.

Upon the closing of the Asset Sale, the Company commenced its liquidation in accordance with the Plan of Liquidation. In connection with the Company’s liquidation in accordance with the Plan of Liquidation, the Company’s Board of Directors determined that the Company’s transfer records will be closed from and after the close of business on December 19, 2019. The Board of Directors will not consider and the Company will not record or recognize any transfer of the Company’s units occurring after the close of business on December 19, 2019.

As a result of the December 19, 2019 Effective Date under the Plan of Liquidation, the Company is not engaged in any business operations other than to satisfy its obligations to dissolve, wind up and liquidate under the Plan of Liquidation or, to the limited extent necessary, to preserve or enhance the value of assets in connection with their sale. Under the Delaware Limited Liability Act and the Company’s operating agreement, the Company was immediately dissolved when the Board implemented the Plan of Reorganization. The Company plans to dispose of its remaining assets and resolve any remaining claims, whether known, contingent or unknown, as ~~components~~promptly as reasonably practical.

The Company’s Board of ~~an enterprise for which separate financial information is available that is evaluated regularly by~~Directors met in January 2020 and declared a distribution of $7.8 million or $0.31 per unit based on 25,410,851 units outstanding. The distribution was paid to all members of record as of January 24, 2020. The Company expects to make a final distribution shortly after release of the ~~chief operating decision maker~~indemnity escrow account in ~~deciding how to allocate resources~~June 2021.

Except as otherwise reported herein, this Quarterly Report on Form 10-Q presents the Company’s business, assets, and ~~in assessing performance. Based on the related business nature and expected~~ financial results and position as they occurred during the ~~Company’s plants are aggregated into one reporting segment.~~

~~Dry mill ethanol plants produce ethanol primarily by processing corn. Other possible feeds are grain sorghum, or other cellulosic materials. The corn is conveyed directly from Agtegra Cooperative~~quarter beginning September 30, 2019 and ending December 31, 2019. Following the December 19, 2019 closing date, the Company has not engaged and will not engage in any business activities except to the ~~plant where it is weighed~~extent necessary to preserve the value of its assets, wind up its business affairs and ~~transferred~~distribute its assets in accordance with the Plan of Liquidation. Accordingly, our financial position or financial performance for any period prior to December 19, 2019 will be of limited value to a scalper to remove rocks, cobs, and other debris. The corn is then fed to a hammer mill where it is ground into flour and conveyed into a slurry tank. Water, heat and enzymes are added to the flour in the slurry tank to start the process of converting starch from the corn into sugar. The slurry is pumped to a liquefaction tank where additional enzymes are added. These enzymes continue the starch-to-sugar conversion. The grain slurry is pumped into fermenters, where yeast is added to begin the batch-fermentation process. Fermentation is the processmember’s understanding of the ~~yeast converting the sugar into alcohol~~timing and carbon dioxide. After the fermentation is complete, a vacuum distillation system removes the alcohol from the corn mash. The 95% (190-proof) alcohol from the distillation process is then transported to a molecular sieve system, where it is dehydrated to 100% alcohol (200 proof). The 200-proof alcohol is then pumped to storage tanks and blended with a denaturant, usually natural gasoline. The 200-proof alcohol and 2.0-2.5% denaturant constitute denatured fuel ethanol.

Corn mash left over from distillation is pumped into a centrifuge for dewatering. The liquid from the centrifuge, known as thin stillage, is then pumped from the centrifuges to an evaporator, where it is concentrated into a syrup. The solids that exit the centrifuge,

known as the wet cake, are conveyed to the dryer system. Syrup is added to the wet cake as it enters the dryer, where moisture is removed. The process produces distillers’ grains with solubles, which is used as a high-protein/fat animal-feed supplement. Dry-mill ethanol processing creates three formsamount of distillers’ grains: wet distillers’ grains with solubles, known as wet distillers’ grains; modified wet distillers’ grains with solubles, known as modified distillers’ grains; and dry distillers’ grains with solubles, known as dry distillers’ grains. Wet and modified distillers’ grains have been dried to approximately 65% and 50% moisture levels, respectively, and are predominately sold to nearby markets. Dried distillers’ grains have been dried to 11% moisture, have an almost indefinite shelf life and may be sold and shipped to more distant markets.

Corn oil is produced by processing evaporated thin stillage through a disk stack style centrifuge. Corn oil has a lower density than water or solids that make up the syrup. The centrifuges separate the relatively light oil from the heavier components of the syrup, eliminating the need for significant retention time. De-oiled syrup is returned to the process for blending into wet, modified, or dry distillers’ grains. The corn oil is then pumped into storage tanks before being loaded onto trucks for sale.potential distributions during liquidation.

The table below provides a summary of our ethanol plants in operation ~~as of June 30,~~until the Asset Sale on December 19, 2019:

Estimated

Annual

Estimated

Annual

Estimated

Annual

Distillers

Annual

Distillers

Annual

Ethanol

Grains

Corn Oil

Corn

Primary

Ethanol

Grains

Corn Oil

Corn

Primary

Location

Opened

Production (3)

Production(1)

Processed

Energy Source

Opened

Production (1)

Production(2)

Processed

Energy Source

(Million gallons)

(000's Tons)

(000's lbs)

(Million bushels)

(Million gallons)

(000's Tons)

(000's lbs)

(Million bushels)

Aberdeen, SD~~(2)~~

January 2008

134

11,561

15.7

Natural Gas

January 2008

134

11,561

15.7

Natural Gas

Huron, SD

September 1999

5,717

11.4

Natural Gas

September 1999

5,717

11.4

Natural Gas

Consolidated

231

17,278

27.1

231

17,278

27.1

In October 2015, we amended the existing lease agreement for our corporate headquarters. Under the amended lease, we agreed to lease approximately 4,400 square feet for our corporate and administrative staff in Bloomington, Minnesota, through September 2021. The base rent is ~~$19.00~~$20.50 per square foot, or approximately ~~$7,000~~$7,500 per month for the twelve month period beginning July 1, ~~2018,~~2019, with annual increases of $.50 per square foot. We believe this space will be sufficient for our needs until the end of the lease period.

We believe that our plants are in adequate condition to meet our current and future production goals. We believe that the plants are adequately insured for replacement cost plus related disruption expenditures.

Under the ABE South Dakota security agreement with AgCountry (defined below), AgCountry holds a first priority security interest and mortgage in all inventory, accounts receivable, intangibles, equipment, fixtures, buildings, and a first mortgage in land owned or leased by ABE South Dakota.

~~On August 1, 2019,~~As described above, the Company and ABE South Dakota entered into an asset purchase agreement with Glacial Lakes Energy (“GLE”), LLC, under which ABE South Dakota agreed to sell its Aberdeen and Huron, South Dakota ethanol plants and related businesses to GLE. We expectCompany’s members approved the ~~transaction to close later this year. Once the transaction has closed, we will begin to implement a~~ Plan of Liquidation ~~under which~~at a Special Meeting of Members on September 19, 2019. Upon the closing of the Asset Sale, the Company ~~will be liquidated and the proceeds of the sale will be distributed to Unit holders, after payment of the Company’s outstanding debt, transaction–related expenses and other expenses related to~~commenced its liquidation in accordance with the Plan of Liquidation. ~~Until~~Following the December 19, 2019 closing date, the Company has not engaged and will not engage in any business activities except to the extent necessary to preserve the value of ~~the transaction, we will continue our focus on operational improvements at our South Dakota operating facilities, including completion of the grain storage~~its assets, wind up its business affairs and receiving facility we are constructing at our Aberdeen plant. These operational improvements include exploring methods to improve ethanol yield per bushel and increasing production output at each of our plants, continuing emphasis on safety and environmental regulation, reducing our operating costs, and optimizing our margin opportunities through prudent risk-management policies. Additional information regarding the asset sale anddistribute its assets in accordance with the Plan of Liquidation will be contained in a Proxy Statement for a Special Meeting of members that the Company will file with the United States Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.Liquidation.

Results of Operations for the Quarter Ended ~~June 30,~~December 31, 2019 Compared to Quarter Ended ~~June 30,~~December 31, 2018

The following ~~tables reflect~~table reflects quantities of our products sold at average net prices as well as bushels of corn ground and therms of natural gas burned at average costs for three months ended ~~June 30,~~December 31, 2019 and 2018 for our South Dakota plants:

Net sales for the quarter ended ~~June 30,~~December 31, 2019 were ~~$31.1~~$29.5 million, compared to ~~$36.2~~$32.0 million for the quarter ending ~~June 30,~~December 31, 2018, ana decrease of ~~$5.1~~$2.5 million or ~~14%~~8%. ~~Lower net sales~~Ethanol gallons sold decreased by 18% as a result of fewer selling days in the quarter due to the Asset Sale on December 19, 2019, while ethanol prices increased 19% for the quarter ended ~~June 30, 2019 reflect a decrease in ethanol gallons sold of 7% compared to the prior quarter ended June 30, 2018, along with a decrease in ethanol prices of 3% for the quarter ended June 30,~~December 31, 2019, compared to the prior quarter ended ~~June 30,~~December 31, 2018. As a percentage of net sales, ethanol sales were ~~79%~~78% and ~~75%; distillers~~74% and distillers’ sales were ~~18%~~19% and 22%~~; and corn oil sales were 3% and 3%~~, for the quarters ending ~~June 30,~~December 31, 2019 and ~~June 30,~~December 31, 2018, respectively.

~~We have no international sales. Substantially all of our purchases are denominated in U.S. dollars.~~

Cost of goods sold for the quarter ended ~~June 30,~~December 31, 2019 was ~~$33.8~~$30.1 million, compared to ~~$36.0~~$34.2 million for the quarter ended ~~June 30,~~December 31, 2018, a decrease of ~~$2.2~~$4.1 million. Our primary costs in the production of ethanol and related co-products are corn and natural gas. A ~~$1.4~~$2.2 million decrease in corn costs, ~~as a result of decreased bushels consumed~~ and a ~~$0.3~~$1.0 million decrease in natural gas costs along with various expenses related to the Asset Sale represented a majority of the decrease in cost of goods sold in the quarter ended ~~June 30,~~December 31, 2019. Corn costs represented ~~75%~~76% and 73% of cost of sales for ~~both~~the quarters ended ~~June 30,~~December 31, 2019 and ~~2018.~~2018, respectively. Corn prices ~~per bushel~~ increased 2%13% during the three-month period ending ~~June 30,~~December 31, 2019 compared to the prior year quarter. We used 7%16% less corn in the three-month period ending ~~June 30,~~December 31, 2019, compared to the three months ended ~~June 30,~~December 31, 2018.

Natural gas costs represented 4% and 7% of total cost of sales for ~~both~~the quarters ending ~~June 30,~~December 31, 2019 and ~~2018.~~2018, respectively. The cost of natural gas per mmbtu decreased by ~~14%~~47% to ~~$2.58~~$2.61 for the quarter ended ~~June 30,~~December 31, 2019 compared to the previous quarter. Prices were lower in the current year ~~quarter.~~quarter in part due to warmer temperatures, causing a decrease in the price per mmbtu. Our natural gas consumption decreased by 7%16% due to ~~lower~~fewer production days as a result of the Asset Sale on December 19, 2019, in the quarter ending ~~June 30,~~December 31, 2019 ~~versus~~compared to the quarter ending ~~June 30,~~December 31, 2018.

Selling, general and administrative expenses are comprised primarily of recurring administrative personnel compensation, legal, technology, consulting, insurance and accounting fees.

Overall selling, general and administrative costs for the ~~quarter~~quarters ended ~~June 30,~~December 31, 2019 and 2018 were ~~$0.9~~$1.6 million ~~compared~~and $0.8 million, respectively. The $0.8 million increase was primarily the result of increased costs related to ~~$0.6 million for~~ the ~~previous quarter.~~Asset Sale. As a percentage of net sales, selling, general and administrative expenses were ~~2.8%~~5% and ~~1.7%~~2% of net sales, for the ~~quarters~~quarter ending ~~June 30,~~December 31, 2019 and 2018 respectively.

Interest expense for the quarter ~~ended June 30,~~December 31, 2019 was ~~$260,000~~$734,000 compared to ~~$187,000~~$201,000 for the quarter ending ~~June 30,~~December 31, 2018. ~~The~~Interest expense in the current year quarter was higher ~~interest expense was the result of more interest bearing debt outstanding and a higher interest rate compared to~~than in the prior year quarter.

~~Results of Operations for the Nine Months Ended June 30, 2019 Compared to Nine Months Ended June 30, 2018~~

The ~~following tables reflect quantities of our products sold at average net prices as well as bushels of corn ground~~overall debt level and ~~therms of natural gas burned at average costs for the nine months ended June 30, 2019 and 2018 for our South Dakota plants only:~~

~~Net sales for the nine months ended June 30, 2019~~interest rates were $96.1 million, compared to $100.4 million for the nine months ending June 30, 2018 a decrease of $4.3 million or 4%. Ethanol gallons sold increased by 1% for the nine months ended June 30, 2019, compared to the prior nine months ended June 30, 2018. As a percentage of net sales, ethanol sales were 76% and 77%; distillers sales were 21%; and corn oil sales were 3% for both nine months ending June 30, 2019 and 2018.

~~We have no international sales. Substantially all of our purchases are denominated in U.S. dollars.~~

Cost of goods sold for the nine months ended June 30, 2019 was $102.6 million, compared to $100.7 million for the nine months ended June 30, 2018, an increase of $1.9 million. Our primary costs in the production of ethanol and related co-products are corn and natural gas. A $4.9 million increase in corn costs offset by a $1.0 million decrease in natural gas costs, $0.4 million credit for DOT 117 rail cars used, $0.3 million less R&M costs, $0.2 million less in denaturant costs, $0.1 million less in electricity costs, and various other smaller reductions in costs represented a majority of the increase in cost of goods sold in the nine months ended June 30, 2019. Corn costs represented 74% and 71% of cost of sales for the nine months ended June 30, 2019 and 201, respectively. Corn prices per bushel increased 6% during the nine-month period ending June 30, 2019 compared to the prior year nine months. We used 1% more corn in the nine month period ending June 30, 2019, compared to the nine months ended June 30, 2018 as a result of decreased production efficiencies.

Natural gas costs represented 6% and 7% of total cost of goods sold for the nine months ended June 30, 2019 and 2018, respectively. The cost of natural gas per mmbtu decreased by $0.58 per mmbtu, or 14% for the nine months ending June 30, 2019 compared to the prior year period. Prices were lowerhigher in the current year ~~due to higher than normal natural gas production with an anticipation~~quarter. There was also $80,000 of ~~stocks to reach five~~interest capitalized in the current year ~~average levels ahead~~quarter. All outstanding debt was paid in full on December 19, 2019 at the closing of the ~~winter season. Natural gas consumption decreased 1% for the nine months ending June 30, 2019 compared to the prior year period.~~Asset Sale.

~~Selling, general and administrative expenses are comprised primarily of recurring administrative personnel compensation, legal, technology, consulting, insurance and accounting fees.~~

Overall selling, general and administrative costs for the nine months ended June 30, 2019 were $2.4 million compared to $2.1 million for the prior year nine months. As a percentage of net sales, selling, general and administrative expenses for the nine months ending June 30, 2019 decreased to 2.5%, compared to 2.1% for the nine months ended June 30, 2018.

Interest expense for the nine months ending June 30, 2019 was $713,000, compared to $584,000 for the prior year period. The higher interest expense for the current nine months was the result of more interest bearing debt outstanding and a higher interest rate compared to the prior nine months.

Changes in Financial Position for the ~~Nine~~Three Months ended ~~June 30,~~December 31, 2019

The ~~$9.5~~$4.3 million ~~decrease~~increase in current assets at ~~June 30,~~December 31, 2019 compared to September 30, ~~2018~~2019 was primarily due to ~~a decrease in cash due to~~the gain from the Asset Sale offset by negative operating margins and transaction expenses related to the Asset Sale in the ~~nine~~three months ended ~~June 30, 2019 and partially offset by a $0.8 million increase in inventory and prepaids, mostly due to timing differences.~~December 31, 2019.

The ~~$3.3~~$35.7 million ~~increase~~decrease in property, plant and equipment at ~~June 30,~~December 31, 2019 compared to September 30, ~~2018,~~2019, was ~~primarily due~~directly related to ~~$6.2 million of capital expenditures offset by recognizing $2.9 million depreciation expense year to date fiscal 2019.~~the Asset Sale.

Accounts payable and accrued expenses ~~were approximately the same for the nine months ended June 30,~~decreased by $3.5 million at December 31, 2019 compared to September 30, ~~2018 .~~2019 primarily due to consummation of the Asset Sale, which resulted in the discontinuation of on-going business operations.

The current portion of long-term debt ~~increased~~decreased by ~~$21.2~~$29.6 million ~~June 30,~~at December 31, 2019 compared to September 30, ~~2018.~~2019. The ~~increase~~decrease was ~~due to~~the result of the Asset Sale and all debt being ~~recognized as current due to compliance issues as a result of the poor margin environment.~~paid in full.

~~Long-term debt decreased by $18.8 million at June 30, 2019 compared to September 30, 2018. This decrease was due to all debt being recognized as current as noted above.~~

~~TRENDS AND UNCERTAINTIES AFFECTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS~~

Ethanol is currently blended with gasoline to meet regulatory standards as a clean air additive, an octane enhancer, a fuel extender and a gasoline alternative. According to the Renewable Fuels Association (“RFA”), as of January 2019, current annualized U.S. ethanol production capacity in operation was approximately 16.0 billion gallons per year, with actual annualized production around 15.7 billion gallons per year. The demand for ethanol is affected by what is commonly referred to as the “blending wall,” which is a regulatory cap on the amount of ethanol that can be blended into gasoline. The blend wall affects the demand for ethanol, and as industry production capacity reaches the blend wall, the supply of ethanol in the market may surpass the demand. Assuming current gasoline usage in the U.S. at 142.86 billion gallons per year and a blend rate of 10% ethanol and 90% gasoline, the current blend wall is approximately 14.3 billion gallons of ethanol per year.

Ethanol is most commonly sold as E10, the 10 percent blend of ethanol that can be used in all American automobiles. Increasingly, ethanol is also available as E15, which is a higher octane fuel with a 15 percent blend of ethanol. In June 2012, the EPA approved E15 for use in vehicles with model years 2001 and later. According to the RFA, this group of approved vehicles makes up 90 percent of all vehicles on the road today. Although regulatory issues remain in many states, E15 is now available in limited locations in 29 states. Ethanol is also available as E85, a higher percentage ethanol blend for use in flexible fuel vehicles.

Our operations are highly dependent on commodity prices, especially prices for corn, ethanol, distillers’ grains and natural gas. As a result of price volatility for these commodities, our operating results may fluctuate substantially. The price and availability of corn are subject to significant fluctuations depending upon a number of factors that affect commodity prices in general, including crop conditions, weather, federal policy and foreign trade. Because the market price of ethanol is not always directly related to corn prices, at times ethanol prices may lag movements in corn prices and compress the overall margin structure at the plants. As a result, operating margins may become negative and we may be forced to shut down our plants.

We focus on locking in margins based on a cash flows model that continually monitors market prices of corn, natural gas and other input costs against prices for ethanol and distillers grains at each of our production facilities. We create offsetting positions by using a combination of derivative instruments, fixed-price purchases and sales, or a combination of strategies to manage risk associated with commodity price fluctuations. Our primary focus is not to manage general price movements, for example minimize the cost of corn consumed, but rather to lock in favorable margins whenever possible. In the quarter ended June 30, 2019, the average Chicago OPIS Spot Ethanol Assessment was $1.41 per gallon and the average NYMEX RBOB spot gasoline price was $1.94 per gallon, or approximately $0.53 per gallon above ethanol prices.

Federal policy has a significant impact on ethanol market demand. Ethanol blenders previously benefited from incentives that encouraged usage and a tariff on imported ethanol that supported the domestic industry, both of which have now expired. Additionally, the Environmental Protection Agency’s Renewable Fuels Standard (“RFS”) mandates increased level of usage of both

corn-based and cellulosic ethanol. Any adverse ruling on, or legislation affecting, RFS mandates in the future could have an adverse impact on short-term ethanol prices and our financial performance in the future.

The ethanol industry and our business depend upon continuation of the federal and state ethanol supports such as the RFS. We believe the ethanol industry expanded due to these federal mandates, policies, and incentives. These government mandates have supported a market for ethanol that might disappear without these programs. Alternatively, the government mandates may be continued at lower levels than those at which they currently exist. In addition, state regulatory activity may also negatively affect the consumption of corn-based ethanol in certain domestic markets such as California, due to low-carbon fuel standards that take into consideration the effects caused by indirect land use.

The RFS is a national program that imposes requirements with respect to the amount of renewable fuel produced and used in the U.S. The RFS was revised by the EPA in July 2010 (“RFS2”) and applies to refineries, blenders, distributors and importers. We believe the RFS2 program has and will continue to increase the market for renewable fuels, such as ethanol, as a substitute for petroleum-based fuels. The RFS2 required that 16.55 billion gallons be sold or dispensed in 2013, increasing to 36.0 billion gallons by 2022, representing 7% of the anticipated gasoline and diesel consumption in 2022. In 2013, RFS2 required refiners and importers to blend renewable fuels totaling at least 9.74% of total fuel volume, of which 8.12% of total fuel volume, or 13.8 billion gallons, could be derived from corn-based ethanol. The remainder of the requirement is to be met by non-corn related advanced renewable fuels such as cellulosic ethanol and biomass-based biodiesel. The RFS requirement for corn-based ethanol was capped at 15.0 billion gallons starting in 2015.

As of October 2018, current annualized ethanol production is approximately 16.2 billion gallons per the RFA. On November 30, 2017 the EPA announced the final rule for the 2018 Renewable Volume Obligations (“RVO”s), which was set at 15.0 billion gallons for corn-based ethanol. This rule is also set at 100% of the original conventional biofuel requirement of 15.0 billion gallons, but has a reduction in the amount of advanced biofuels required. On June 26, 2018 the EPA announced proposed RVOs for 2019, which include 15.0 billion gallons for corn-based ethanol, consistent with both the 2018 RVOs and the original statutory volumes. On November 30, 2018 the EPA announced the final RVOs for 2019. The final RVOs for 2019 were consistent with the volumes proposed in June, with an increase only in advanced biofuel volumes to 4.92 billion gallons from the proposed 4.88 billion gallons. The 15.0 billion gallons that can be met with corn-based ethanol remains the same as of June 2018 proposal and the original statutory volumes. On July 5, 2019 the EPA announced RVOs for 2020, which include 15.0 billion gallons for corn-based ethanol, consistent with both the 2018 RVOs and the original statutory volumes.

~~The following chart illustrates the potential United States ethanol demand based on the schedule of minimum usage established by the RFS2 program through the year 2022 (in billions of gallons).~~

Cellulosic

RFS Requirement

Total Renewable

Ethanol

Biodiesel

That Can Be Met

Fuel

Minimum

Minimum

Advanced

With Corn-Based

Year

Requirement

Requirement

Requirement

Biofuel

Ethanol

2018 (2)

19.29

0.29

2.10

4.29

15.00

2019 (1)

28.00

8.50

-

13.00

15.00

2019 (3)

19.92

0.42

2.10

4.92

15.00

2020 (1)

30.00

10.50

2.43

15.00

15.00

2020 (4)

20.00

0.54

-

5.04

15.00

2021

33.00

13.50

-

18.00

15.00

2022

36.00

16.00

-

21.00

15.00

The RFS2 went into effect on July 1, 2010 and requires certain gas emission reductions for the entire lifecycle, including production of fuels. The greenhouse gas reduction requirement generally does not apply to facilities that commenced construction prior to December 2007. If this changes and our plants must meet the standard for emissions reduction, it may impact the way we procure feed stock and modify the way we market and transport our products.

On December 22, 2017, H.R. 1, originally known as the Tax Cuts and Jobs Act (the “2017 Tax Reform Act”), was signed into law. The 2017 Tax Reform Act includes significant changes to the taxation of business entities, including a permanent reduction to the

federal corporate income tax rate from 35% to 21% effective in 2018 and changes to deductibility of interest on debt obligation. The impact of the 2017 Tax Reform Act on the Company is minimal because the Company is a pass-through entity.

The ethanol we produce is similar to ethanol produced by other plants. The RFA reports that as of January 2019, current annualized U.S. ethanol production capacity in operation was approximately 16.0 billion gallons per year, with current annualized production around 15.7 billion gallons per year. On a national level, there are numerous other production facilities with which we are in direct competition, many of whom have greater resources than we do. As of January 2019, South Dakota had 15 ethanol plants producing an aggregate of 1.1 billion gallons of ethanol per year.

The largest ethanol producers include: Archer Daniels Midland Company; Cargill, Inc.; Flint Hills Resources, LP; Green Plains Renewable Energy, Inc.; POET, LLC and Valero Renewable Fuels. Producers of this size may have an advantage over us from economies of scale and stronger negotiating positions with purchasers. We market our ethanol primarily on a regional and national basis. We believe that we are able to reach the best available markets through the use of experienced ethanol marketers and by the rail delivery methods we use. Our plants compete with other ethanol producers on the basis of price, and, to a lesser extent, delivery service. We believe that we can compete favorably with other ethanol producers due to our proximity to ample grain, natural gas, electricity and water supplies at favorable prices.

Alternative fuels and alternative ethanol production methods are continually under development. The major oil companies have significantly greater resources than we have to develop alternative products and to influence legislation and public perception of ethanol. New ethanol products or methods of ethanol production developed by larger and better-financed competitors could provide them competitive advantages and harm our business.

ABE South Dakota has ethanol marketing agreements with NGL Crude Logistics LLC (“NGL”), a diversified energy business. These ethanol marketing agreements require that we sell to NGL all of the denatured fuel-grade ethanol produced at the South Dakota plants. These ethanol marketing agreements by their terms were set to expire on June 30, 2019. On April 1, 2019, the agreements were amended to change the term to month to month, with three months written notice by either party required to terminate the agreement.

Sales of distillers’ grains have represented 18% and 22% of our revenues for the quarters ended June 30, 2019 and 2018, respectively. When the plants are operating at capacity, they produce approximately 231,000 tons of dried distillers’ grains equivalents per year, approximately 15-16 pounds per bushel of corn used. Distillers grains are a high-protein, high-energy animal feed supplement primarily marketed to the dairy and beef industry, but also to the poultry and swine markets. Dry mill ethanol processing creates three forms of distillers grains: wet distillers grains with solubles, known as wet distillers grains; modified wet distillers grains with solubles, known as modified distillers grains; and dry distillers grains with solubles. Wet and modified distillers grains have been dried to approximately 65% and 50% moisture levels, respectively, and are predominately sold to nearby markets. Dried distillers grains have been dried to 11% moisture, have an almost indefinite shelf life and may be sold and shipped to more distant markets. In this Form 10-Q, we sometimes refer to these products as “distillers grains” or “distillers.”

We installed corn oil extraction technology at our Aberdeen plant in 2012 and at our Huron plant in October 2016. Corn oil systems are designed to extract non-edible corn oil during the thin stillage evaporation process immediately prior to production of distillers grains. Corn oil is produced by processing evaporated thin stillage through a disk stack style centrifuge. Corn oil has a lower density than the water or solids that make up the syrup. The centrifuges separate the relatively light oil from the heavier components of the syrup, eliminating the need for significant retention time. De-oiled syrup is returned to the process for blending into wet, modified, or dry distillers grains.

Industrial uses for corn oil include feedstock for biodiesel, livestock feed additives, rubber substitutes, rust preventatives, inks, textiles, soaps and insecticides. Our corn oil is primarily sold by truck to biodiesel manufacturers.

In the sales of distillers’ grains, we compete with other ethanol producers, as well as a number of large and smaller suppliers of competing animal feed. We believe the principal competitive factors are price, proximity to purchasers and product quality. Currently we derive 64% of our distillers’ grain revenues from the sale of dried distillers’ grains, which have an indefinite shelf life and can be transported by truck or rail, and 36% from the sale of modified or wet distillers’ grains, which have a shorter shelf life and are typically sold in local markets via truck.

~~We compete with other ethanol producers in the sale of corn oil. We ship all of the corn oil at our facilities via truck. Many ethanol producers have added corn oil technology to their facilities.~~

ABE South Dakota has a marketing agreement with Dakotaland Feeds, LLC (“Dakotaland Feeds”) for marketing wet distillers grains produced at the Huron plant and modified distillers produced at the Aberdeen plant. ABE South Dakota has a marketing agreement with Gavilon Ingredients, LLC, (“Gavilon”) for dried distillers grains produced at the Huron and Aberdeen plants that became effective July 1, 2013. The marketing agreement requires Gavilon to use commercially reasonable efforts to purchase substantially all of the dried distillers grains produced at the Huron and Aberdeen plants through July 31, 2019. The Aberdeen plant self-markets it wet and a small portion of modified distillers grains.

~~ABE South Dakota is party to an agreement with Gavilon to market all the corn oil produced by the Huron and Aberdeen plants through November 30, 2019 and September 30, 2019, respectively.~~

During the quarter ended ~~June 30,~~December 31, 2019, we conducted our business activities, ~~and~~ plant operations, and initial wind-down activities subsequent to the Asset Sale through the parent company, Advanced BioEnergy, and its operating subsidiary ABE South Dakota. The liquidity and capital resources for ~~ABE South Dakota is~~each entity are based on ~~its~~the entity’s existing financing arrangements and capital structure. Advanced BioEnergy iswas highly restricted in its ability to use the cash and other financial resources of ABE South Dakota for the benefit of Advanced BioEnergy, with the exception of allowable distributions under the 2015 Credit Agreement with ~~AgCountry.~~AgCountry, which was paid off in December 2019.

ABE had cash and cash equivalents of ~~$0.6~~$0.1 million on hand at ~~June 30,~~December 31, 2019. ABE did not have any debt outstanding as of ~~June 30,~~December 31, 2019.

From time to time, ABE may also receive certain allowable distributions from ABE South Dakota, subject to compliance with the terms and conditions of the 2015 Credit Agreement. ABE will not receive any distribution from ABE South Dakota for its fiscal 2018 financial results and has not received any in fiscal 2019.

In connection with the execution of a rail car sublease, the Company, as parent of ABE South Dakota, agreed to post a $2.5 million irrevocable and non-transferable standby letter of credit in May 2012 for the benefit of NGL Crude Logistics, LLC (“NGL” f/k/a Gavilon) as security for the payment obligations of ABE South Dakota under certain agreements with NGL. The Company deposited $2.5 million in a restricted account as collateral for this letter of credit and classified it as restricted cash. Effective May 15, 2014, the letter of credit and corresponding deposit of collateral was decreased by $1.0 million in conjunction with an amendment to the rail car sublease. Effective June 27, 2016, the letter of credit and corresponding deposit of collateral was decreased by $0.5 million in conjunction with an amendment to the rail car sublease. Effective July 31, 2018, the letter of credit was terminated and the corresponding collateral requirement was eliminated.

We believe ABE has sufficient financial resources available to fund ~~current operations~~the winding up and ~~capital expenditure requirements for at least~~dissolution of the ~~next 12 months.~~Company in accordance with the Plan of Liquidation and Dissolution.

During the quarter ended March 31, 2018, ABE Fairmont completed its obligations to Flint Hills Resources, LLC with respect to post-closing matters, including completing the transfer of certain railway lines. ABE Fairmont had no cash or cash equivalents on hand at June 30, 2019 and has been liquidated and dissolved.

ABE South Dakota had cash and cash equivalents of ~~$1.7~~$17.2 million on hand at December 31, 2019. Of the total cash on hand, $4.75 million is restricted cash being held in an indemnity escrow account until June ~~30, 2019.~~19, 2021, as noted above. As of ~~June 30,~~December 31, 2019, ABE South Dakota had no interest-bearing ~~term~~ debt ~~outstanding of $22.0 million, which is summarized below.~~outstanding.

On December 19, 2019, all amounts outstanding under the Master Credit Agreement dated December 29, 2015, as amended (“Master Credit Agreement”) between ABE South Dakota ~~entered into a Master Credit Agreement (“2015 Credit Agreement”) with~~as borrower and AgCountry Farm Credit Services, PCA as lender (“AgCountry”) ~~to refinance its existing 2010 Senior Credit Agreement. On December 29, 2015,~~were repaid in full. The total amount repaid was approximately $31.0 million, which was repaid from the ~~Company also entered into (i) a First Supplement to~~purchase price from the ~~2015 Credit Agreement covering a $10.0~~Asset Sale described above. The $31.0 million ~~Revolving Term Facility and (ii) a Second Supplemental covering a $20.0 million Term Loan. The transaction funded on December 30, 2015.~~

The $20.0 million Term Loan has a fixed interest rate (“Fixed Rate”) at June 30, 2019. On October 26, 2018, the Company elected to lock in a fixed rate of 6.4%, rather than a variable rate, on the remaining balancepayment consisted of the ~~Term Loan. On January 2, 2019, the Company entered into an Interest Conversation Agreement with AgCountry, under which the Fixed Rate of 6.4% was reduced to 6.32% for the remainder~~following amounts outstanding as of the ~~loan term. The Company may elect one or more fixed or adjustable interest rates, rather than the variable rate, based on AgCountry’s cost of funds at the time~~closing date of the ~~election, plus the margin of 350 basis points. Any election must apply to $1.0~~Asset Sale: $30.5 million plus accrued interest, on the Term Loan. The Term Loan was originally schedule to be fully amortized over five years with the final payment on January 1, 2021. As described below, the payments originally due in ~~January, April and July 2019 have been deferred and are now at the end of the term, or January 1, 2021. At June 30, 2019, the balance of the Term Loan was $9.0 million.~~

~~The $10.0~~principal, $0.4 million Revolving Term Facility has a variable Rate (“Variable Rate”) equal to the one-month LIBOR rate plus an initial Margin of 350 basis points. At June 30, 2019, the Variable Rate was equal to the one-month LIBOR rate of 2.45% plus a Margin of 350 basis points. Borrowings under the Revolving Term Facility may be advanced, repaid and re-borrowed during the term. The Company is required to make quarterly interest payments on the Revolving Term Facility, with the full principal amount outstanding due on January 1, 2021. Under the Revolving Term Facility, the Company is required to pay unused commitment fees of 50 basis points. At June 30, 2019, the balance of the Revolving Term Facility was $10.0 million.

The Margin will (i) decrease to 3.25% when the aggregate principal balance of all outstanding loans and the unfunded commitment level is $20.0 million or less, and (ii) decrease to 3.00% when this amount is $15.0 million or less. At June 30, 2019 the principal balance of all outstanding loans was $22.2 million, and the unfunded commitment level was $1.6 million.

ABE South Dakota, LLC also entered into a Security Agreement with AgCountry under which borrowings under the 2015 Credit Agreement are secured by substantially all of ABE South Dakota’s assets. AgCountry holds a first priority securityin interest and ~~mortgage~~$0.1 million in ~~all inventory, accounts receivable, intangibles, equipment, fixtures, buildings, and a first mortgage in land owned or leased by ABE South Dakota.~~

On March 13, 2018, ABE South Dakota entered into the Fourth Supplement to the 2015 Credit Agreement (“2018 Term Loan”) with AgCountry to finance a grain storage and receiving facility at the Aberdeen plant. The agreement provides for a $5.0 million multiple advance credit facility. The loan has a variable interest rate equal to the one-month LIBOR rate plus a “Margin” of 350 basis points. During the construction period, the Company will make quarterly interest payments in arrears on the first day of each quarter. Upon completion of construction, the Company will begin making quarterly principal payments in the amount of $250,000 per quarter, plus accrued interest. The 2018 Term Loan will be fully amortized over five years, with the final payment on July 1, 2024. At June 30, 2019, $3.4 million had been drawn on the 2018 Term Loan, and $47,000 in loan fees and ~~closing costs had been incurred, which have been classified as deferred financing costs. These deferred financing costs will be amortized as interest expense over~~expenses. Effective upon the ~~term of the 2018 Term Loan.~~

month LIBOR rate plus a Margin of 400 basis points. Borrowings under the Revolving Loan may be advanced, repaid and re-borrowed during the term, except during an outstanding Event of Default. The Company is required to make monthly interest payments on the Revolving Loan beginning September 1, 2019, with the full principal amount outstanding due on the earlier of November 1, 2019 or the date on which the obligations have been declared or have automatically become due and payable, whether by acceleration or otherwise.

As a result of a depressed margin environment in the first nine months of fiscal 2019 and in fiscal 2018, ABE South Dakota requested waivers for certain specific Events of Default at June 30, 2019 and September 30, 2018, and requested covenant amendments for specific future covenants for which ABE South Dakota projected possible non-compliance. Although ABE South Dakota’s lender, AgCountry Farm Credit Services, PCA, granted the waivers and covenant amendments via a Limited Waiver Agreement and the Third and Fourth Amendments to the 2015 Credit Agreement, as discussed below, we cannot project with certainty that we will meet all covenant obligations, as amended, if depressed margins continue for an extended period of time. If ABE South Dakota is unable to comply with the amended covenants, we cannot ensure that our lender will grant us future waivers, which could result in a material adverse effect upon our business, results of operations and financial condition.

The following table shows our cash flows for the ~~nine~~three months ended ~~June 30,~~December 31, 2019 and 2018:

Cash flows used in operating activities for the ~~nine~~three months ending ~~June 30,~~December 31, 2019 were approximately ~~$6.6~~$1.4 million compared to ~~$0.2~~$1.9 million ~~provided by~~used in the prior year period, ~~an increase~~a decrease of ~~$7.8~~$0.5 million. Lower operating margins ~~driven by negative margins in the nine months fiscal 2019,~~ accounted for the majority of the overall ~~increase~~decrease in cash flows from operating activities.

Cash flows ~~used in~~provided by investing activities for the ~~nine~~three months ending ~~June 30,~~December 31, 2019 were approximately ~~$6.2~~$43.2 million compared to ~~$1.3~~$3.0 million used ~~in investing activities~~ for the prior year period. The current year ~~nine~~three months included ~~$6.2~~$42.7 million in proceeds from the Asset Sale offset by $0.9 million in additions. The prior three months included $3.0 million in additions, primarily related to ~~property and equipment. The prior year nine months included a $1.6 million in additions to property and equipment offset by $0.3 million of patronage income.~~the grain storage project at the Aberdeen facility.

Cash flows ~~provided by~~used in financing activities for the ~~nine~~three months ending ~~June 30,~~December 31, 2019 were ~~$2.3~~$29.8 million compared to ~~$3.7~~$0.1 million ~~used in~~ for the prior year period. The current year period included ~~long-term~~$30.5 million for payments on debt, offset by $0.7 million debt proceeds ~~of $3.4 million and~~from the construction loan used to finance the Aberdeen grain storage project. The three months ended December 31, 2018 included $1.0 million ~~of debt~~for payments on ~~the 2016 Term Loan. Cash used in financing activities in the prior year period included long-term~~ debt, ~~payments of $3.0 million on the 2015 Credit Agreement and $0.6~~offset by $0.9 million debt ~~payments on~~proceeds from the ~~2016 Term Loan.~~construction loan.

June 30,

2019

June 30,

September 30,

Interest Rate

2019

2018

ABE South Dakota:

Senior debt principal - fixed

6.32%

$
9,000

$
-

Senior debt principal - variable

5.95%

13,379

20,000

Deferred financing costs

N/A

(219
)

(262
)
Total outstanding

$
22,160

$
19,738

	September 30,
	2019	December 31,		September 30,
	Interest Rate	2019		2019
ABE South Dakota:
Senior debt principal – fixed	6.32%	$	-	$	9,000
Senior debt principal – variable	5.70%		-		14,312
Short term revolving line	6.20%		-		6,500
Deferred financing costs	N/A		-		(219	)
Total outstanding (stated principal)		$	-	$	29,593

Note 1 to our consolidated financial statements contains a summary of our significant accounting policies, many of which require the use of estimates and assumptions. Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. We used our knowledge and experience about past events and certain future assumptions to make estimates and judgments involving matters that are inherently uncertain and that affect the carrying value of our assets and liabilities. We believe that of our significant accounting policies, the following are noteworthy because changes in these estimates or assumptions could materially affect our financial position and results of operations:

promised goods or services to customers in an amount that reflects the consideration to which ~~ABE~~the entity expects to be entitled in exchange for those goods or services. The new guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The Company generally recognizes revenue at a point in time. The majority of the Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The adoption of this new guidance did not result in any change to our recognition of revenue.

We disclose disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, in Note 5.7.

Ethanol inventory, raw materials, work-in-process and parts inventory are valued using methods that approximate the lower of cost (first-in, first-out) or net realizable value (“NRV”). Distillers grains and related products are stated at NRV. In the valuation of inventories and purchase and sale commitments, the Company determines NRV by estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

The Company ~~enters~~entered into forward sales contracts for ethanol, distillers and corn oil, and purchase contracts for corn and natural gas. The Company ~~classifies~~classified these sales and purchase contracts as normal sales and purchase contracts and accordingly these contracts ~~are~~were not marked to market. These contracts provide for the sale or purchase of an item other than a financial instrument or derivative instrument that will be delivered in quantities expected to be sold or used over a reasonable period in the normal course of business.

On occasion, the Company has entered into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn purchases and forecasted ethanol sales. Accounting for derivative contracts requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction.

Although the Company believes its derivative positions are economic hedges, it has not designated any of these positions as hedges for accounting purposes and has recorded its derivative positions on its balance sheet at their fair value, with changes in fair value recognized in current period earnings.

In addition, certain derivative financial instruments that meet the criteria for derivative accounting treatment also qualify for a scope exception to derivative accounting, as they are considered normal purchases and sales. The availability of this exception is based on the assumption that the Company has the ability and it is probable that it will deliver or take delivery of the underlying item. Derivatives that are considered to be normal purchases and sales are exempt from derivative accounting treatment, and are accounted for under accrual accounting.

Property and equipment is carried at cost less accumulated depreciation computed using the straight-line method over the estimated useful lives:

Maintenance and repairs are charged to expense as incurred; major improvements and betterments are capitalized. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount on the asset group may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group. An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the estimated fair value.

~~Our future earnings may~~Because we are in liquidation and all of our available funds will be ~~affected by~~invested in short-term interest bearing securities, we do not believe changes in interest ~~rates due to the impact those changes~~rate will have a significant effect on our interest expense on borrowings under our credit facility. As of June 30, 2019, we had $22.0 million of outstanding borrowings with variable interest rates. With each 1% increase in interest rates we will incur additional annual interest charges of $0.22 million.

~~We have no international sales. Substantially all of our purchases are denominated in U.S. dollars.~~financial condition.

We believe that inflation has not had a material impact on our results of operations since inception. ~~We cannot ensure~~Because we are in liquidation, we do not believe that inflation will ~~not~~ have an adverse impact on our ~~operating results and~~ financial condition in ~~future periods.~~the future.

We consider market risk to be the impact of adverse changes in market prices on our results of operations. We are subject to significant market risk with respect to the price of ethanol and corn. For the quarter ended June 30, 2019, sales of ethanol represented 77% of our total revenues and corn costs represented 75% of total cost of goods sold. In general, ethanol prices are affected by the supply and demand for ethanol, the cost of ethanol production, the availability of other fuel oxygenates, the regulatory climate and the cost of alternative fuels such as gasoline. The price of corn is affected by weather conditions and other factors affecting crop yields, farmer planting decisions and general economic, market and regulatory factors. At June 30, 2019, the price per gallon of ethanol and the price per bushel of corn on the CBOT were $1.51 and $4.20 respectively.

We are also subject to market risk on the selling prices of our distillers’ grains, which represented 18% of our total revenues for the quarter ended June 30, 2019. These prices fluctuate seasonally when the price of corn or other cattle feed alternatives fluctuate in price. The average dried distillers grains spot price for local customers was $131 per ton at June 30, 2019.

We are also subject to market risk with respect to our supply of natural gas that we consume in the ethanol production process. Natural gas costs represented 3.7% of total cost of sales for the quarter ended June 30, 2019. The price of natural gas is affected by overall supply, weather conditions and general economic, market and regulatory factors. At June 30, 2019, the price of natural gas on the NYMEX was $2.31 per mmbtu.

To reduce price risk caused by market fluctuations in the cost and selling prices of related commodities, we have entered into forward purchase/sale contracts. We entered into forward sales contracts that guaranteed prices on 13% of our ethanol gallons sold through July 2019. At June 30, 2019 we had entered into forward sale contracts representing 86% of our expected distillers grains production output through July 2019.

The following represents a sensitivity analysis that estimates our annual exposure to market risk with respect to our current corn and natural gas requirements and ethanol sales. Market risk is estimated as the potential impact on operating income resulting from a hypothetical 10% change in the fair value of our current corn and natural gas requirements and ethanol sales, net of corn and natural gas forward contracts used to hedge market risk with respect to our current corn and natural gas requirements. The results of this analysis, which may differ from actual results, are as follows:None.

Change in

Estimated at

Hypothetical

Annual

Risk

Change in

Spot

Operating

Volume (1)

Units

Price

Price(2)

Income

(In millions)

(In millions)

Ethanol

72.0

gallons

10.0
%

$
1.51

$
10.9

Distillers grains

0.2

tons

10.0
%

131.00

2.6

Corn

27.1

bushels

10.0
%

4.20

11.4

Natural gas

2.1

mmbtus

10.0
%

2.31

0.5

~~Our future earnings may~~Because we are in liquidation and all of our available funds will be ~~affected by~~invested in short-term interest bearing securities, we do not believe changes in interest rates ~~due to the impact those changes~~will have a significant effect on our interest expense on borrowings under our credit facility. As of June 30, 2019, we had $22.0 million of outstanding borrowings with variable interest rates. With each 1% increase in interest rates we will incur additional annual interest charges of $0.22 million.financial condition.

~~We have no international sales. Substantially all of our purchased are denominated in U.S. dollars.~~

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer, who is also our chief financial officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, our chief executive officer, who is also our chief financial officer, concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in ~~the~~ Securities and Exchange Commission rules and forms and to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officer, to allow timely decisions regarding required disclosures.

There were no changes in our internal controls over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There are no material changes from risk factors as previously discussed in our September 30, ~~2018~~2019 Annual Report on Form 10-K.

On August 1, 2019, Advanced BioEnergy, LLC (the “Company”) and its wholly-owned subsidiary ABE South Dakota, LLC (“ABE South Dakota”), entered into an asset purchase agreement (the “Asset Purchase Agreement ”) with Glacial Lakes Energy, LLC, (“GLE”), under which ABE South Dakota agreed to sell to GLE substantially all of the assets of ABE South Dakota’s ethanol and related distillers and non-food grade corn oil businesses located in Aberdeen and Huron, South Dakota (the “Acquired Assets”). The purchase price for the Acquired Assets is $47.5 million, plus the value of ABE South Dakota’s inventory at closing. The Company expects the inventory value to be approximately $2.5 to $3.0 million at closing.

The transaction is subject to customary closing conditions and indemnification obligations. The indemnification obligations of the Company and ABE South Dakota under the Asset Purchase Agreement will be secured by a $4.75 million third party escrow, with a scheduled release date on the 18-month anniversary of closing. In addition, approximately $750,000 will be placed in a separate escrow account to ensure the completion of the grain storage facilities that the Company is constructing at its Aberdeen plant, unless the construction is completed and certified prior to closing. The Company expects the transaction to close in the 2019 third or fourth quarter.

Additional information regarding the Asset Purchase Agreement and the Company’s plans following the closing of this transaction can be found in Item 1.01 of the August 1, 2019 Current Report on Form 8-K filed on August 7, 2019, as well as in the Proxy Statement pertaining to unit holder approval of the Asset Purchase Agreement that the Company will file with the United States Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

The Audit Committee of the Company’s Board of Directors, with the assistance of independent legal and accounting advisors, completed its internal investigation of the Company’s administration of its travel and expense policy (“T&E Policy”). As a result of its investigation, the Board of Directors took steps to strengthen the administration of the Company’s T&E Policy and the Company concluded that there were no material adjustments needed to any of the Company’s SEC disclosures. The Company also concluded that the failure to strictly comply with the T&E Policy did not constitute a material weakness in the Company’s internal controls.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Page
Part I. Financial Information
Item 1. Financial Statements	3
Consolidated Balance Sheets (Going Concern Basis)	3
Consolidated Statement of Net Assets in Liquidation (Liquidation Basis)	4
Consolidated Statements of Operations (Going Concern Basis)	45
Consolidated Statement of Changes in Members’ Equity (Going Concern Basis)	56
Consolidated Statements of Cash Flows (Going Concern Basis)	67
Notes to Consolidated Financial Statements	78
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1815
Item 3. Quantitative and Qualitative Disclosures About Market Risk	3121
Item 4. Controls and Procedures	3221
Part II. Other Information
Item 1. Legal Proceedings	3322
Item 1A. Risk Factors	3322
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	3322
Item 3. Defaults Upon Senior Securities	3322
Item 4. Mine Safety Disclosure	3322
Item 5. Other Information	3322
Item 6. Exhibits	3422
Exhibit Index	23
Signatures	3524

Office equipment		3-7 Years
Other equipment		1-5 Years
Process equipment		15 Years
Buildings		40 Years

Effects of Adopting Liquidation Basis of Accounting (in thousands)

Members' Equity as of December 31, 2019, pre-liquidation basis	$	17,071
Effects of adopting the liquidation basis of accounting:
Change in estimated proceeds of prepaids and other current assets below cost		22
Change in estimated settlement amount of other non-current assets		(420	)
Estimated liquidation and operating costs during liquidation		(1,336	)
Total effects of adopting the liquidation basis of accounting	$	(1,734	)

Net assets in liquidation, post adoption of liquidation basis	$	15,337

	December 31,
	2019

Severance and employment related costs	$	488
General overhead costs		525
Professional fees		175
Other dissolution costs		148
Liability for estimated costs during liquidation and dissolution	$	1,336

	June 30,		September 30,		December 31,		September 30,
	2019		2018		2019		2019
Chemicals	$	834	$	783	$	-	$	507
Work in process		808		677		-		757
Ethanol		1,713		1,261		-		1,320
Distillers grain		429		416		-		146
Supplies and parts		1,863		1,785		-		1,859
Corn						-		282
Total	$	5,647	$	4,922	$	-	$	4,871

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☐
Emerging growth company	☐

	Senior Debt		Deferred
Due By June 30:	Principal		Financing Costs			Total
2020	$	22,379	$	(219	)	$	22,160
Total debt	$	22,379	$	(219	)	$	22,160

Commodity	Type	Quantity	Amount (in 000's)		Period Covered Through
Ethanol	Sale	858,600 gallons	$	1,194	July 31, 2019
Distillers grains	Sale	16,634 tons		1,220	July 31, 2019
Corn oil	Sale	300,000 lbs		68	July 31, 2019

	Three Months				Three Months				Three Months				Three Months
	June 30, 2019				June 30, 2018				December 31, 2019				December 31, 2018
	Quantity		Average Price		Quantity		Average Price		Quantity		Average Price		Quantity		Average Price
Product Sales Information	(In thousands)				(In thousands)				(In thousands)				(In thousands)
Ethanol (gallons)		19,877	$	1.23		21,350	$	1.27		17,794	$	1.30		21,736	$	1.09
Distillers grains (tons)		49	$	112.96		53	$	147.67		43	$	130.26		55	$	126.00
Corn Oil (pounds)		4,458	$	0.22		5,544	$	0.20		3,731	$	0.19		5,805	$	0.22

Product Cost Information	Quantity		Average Cost		Quantity		Average Cost		Quantity		Average Cost		Quantity		Average Cost
Corn (bushels)		6,924	$	3.68		7,481	$	3.59		6,120	$	3.69		7,607	$	3.26
Natural Gas (therms)		484	$	2.58		518	$	3.00		458	$	2.61		543	$	4.13

	Nine Months				Nine Months
	June 30, 2019				June 30, 2018
	Quantity		Average Price		Quantity		Average Price
Product Sales Information	(In thousands)				(In thousands)
Ethanol (gallons)		63,030	$	1.16		62,247	$	1.24
Distillers grains (tons)		154	$	129.14		157	$	131.82
Corn Oil (pounds)		15,178	$	0.22		14,662	$	0.19

			Cellulosic						RFS Requirement
	Total Renewable		Ethanol		Biodiesel				That Can Be Met
	Fuel		Minimum		Minimum		Advanced		With Corn-Based
Year	Requirement		Requirement		Requirement		Biofuel		Ethanol
2018 (2)		19.29		0.29		2.10		4.29		15.00
2019 (1)		28.00		8.50		-		13.00		15.00
2019 (3)		19.92		0.42		2.10		4.92		15.00
2020 (1)		30.00		10.50		2.43		15.00		15.00
2020 (4)		20.00		0.54		-		5.04		15.00
2021		33.00		13.50		-		18.00		15.00
2022		36.00		16.00		-		21.00		15.00

	Nine Months Ended June 30
	2019			2018
	(In thousands)
Net cash provided by (used in) operating activities	$	(6,598	)	$	210
Net cash used in investing activities		(6,175	)		(1,278	)
Net cash provided by (used in) financing activities		2,340			(3,684	)

	Three Months Ended December 31
	2019			2018
	(In thousands)
Net cash used in operating activities	$	(1,442	)	$	(1,913	)
Net cash provided by (used in) investing activities		43,156			(2,995	)
Net cash used in financing activities		(29,812	)		(100	)

									Change in
	Estimated at			Hypothetical					Annual
	Risk			Change in			Spot		Operating
	Volume (1)		Units	Price			Price(2)		Income
	(In millions)								(In millions)
Ethanol		72.0	gallons		10.0	%	$	1.51	$	10.9
Distillers grains		0.2	tons		10.0	%		131.00		2.6
Corn		27.1	bushels		10.0	%		4.20		11.4
Natural gas		2.1	mmbtus		10.0	%		2.31		0.5


Exhibit	~~Exhibit~~
No.		Description	Method of Filing


31		Rule 13a-14(a)/15d-14(a) Certification by Principal Executive Officer, ~~Principal~~ Financial and Accounting Officer.	Filed Electronically

32		Section 1350 Certifications.	Filed Electronically

~~99.1~~		~~Limited Waiver Agreement, dated as of July 17, 2019, between ABE South Dakota, LLC and AgCountry Farm Credit Services, PCA as lender.~~

101		The following materials from Advanced BioEnergy’s Quarterly Report on Form 10-Q for the quarter ended ~~June 30,~~December 31, 2019, formatted in XBRL: (i) Consolidated Balance Sheets at ~~June 30,~~December 31, 2019 and September 30, ~~2018~~2019 ; (ii) Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~June 30,~~December 31, 2019 and ~~June 30,~~December 31, 2018; (iii) Consolidated Statements of Changes in Member’s Equity for the three ~~and nine~~ months ended ~~June 30, 2019 and 2018;~~December 31, 2019; (iv) Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~June 30,~~December 31, 2019 and 2018; and (v) Notes to the Consolidated Financial Statements.	Filed Electronically

	ADVANCED BIOENERGY, LLC

Date: ~~August~~February 14, ~~2019~~2020	By:	/s/ Richard R. Peterson
		Richard R. Peterson
		Chief Executive Officer and President, Chief Financial Officer (Duly authorized signatory and Principal Financial Officer)