South Dakota Soybean Processors LLC 10-Q for FY2021 Q1
South Dakota Soybean Processors LLC (SDSYA)
10-Q
2021-05-14
For: 2021-03-31
View Original
Added on
April 06, 2026
About this 10-Q
South Dakota Soybean Processors LLC filed this 10-Q on May 14, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).
Headline figures
Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $123.63M
- up 25.2% from $98.72M a year earlier
- Net income
- $5.78M
- up 2492.8% from net income of $223.08K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended March 31, 2021
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from to
COMMISSION FILE NO. 000-50253
| South Dakota Soybean Processors, LLC | ||
| (Exact name of registrant as specified in its charter) | ||
| South Dakota | 46-0462968 | |||||||
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
| 100 Caspian Avenue; PO Box 500 Volga, South Dakota | 57071 | |||||||
| (Address of Principal Executive Offices | (Zip Code) | |||||||
| (605) 627-9240 | ||
| (Registrant's telephone number, including area code) | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
¨ Large Accelerated Filer | ¨ Accelerated Filer | x Non-Accelerated Filer | ¨ Smaller Reporting Company | ¨ Emerging Growth Company | ||||||||||
| (do not check if a smaller reporting company) | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for company with an new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
¨ Yes x No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: On May 12, 2021, the registrant had 30,419,000 capital units outstanding.
Table of Contents
| Page | |||||||||||
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
South Dakota Soybean Processors, LLC
Condensed Financial Statements
March 31, 2021 and 2020
3
South Dakota Soybean Processors, LLC
Condensed Balance Sheets
| March 31, 2021 | December 31, 2020 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Trade accounts receivable | |||||||||||
| Inventories | |||||||||||
| Commodity derivative instruments | |||||||||||
| Margin deposits | |||||||||||
| Prepaid expenses | |||||||||||
| Total current assets | |||||||||||
| Property and equipment | |||||||||||
| Less accumulated depreciation | ( | ( | |||||||||
| Total property and equipment, net | |||||||||||
| Other assets | |||||||||||
| Investments in related parties | |||||||||||
| Investments in cooperatives | |||||||||||
| Right-of-use lease asset, net | |||||||||||
| Total other assets | |||||||||||
| Total assets | $ | $ | |||||||||
(continued on following page)
4
South Dakota Soybean Processors, LLC
Condensed Balance Sheets (continued)
| March 31, 2021 | December 31, 2020 | ||||||||||
| (Unaudited) | |||||||||||
| Liabilities and Members' Equity | |||||||||||
| Current liabilities | |||||||||||
| Excess of outstanding checks over bank balance | $ | $ | |||||||||
| Current maturities of long-term debt | |||||||||||
| Note payable - seasonal loan | |||||||||||
| Current operating lease liabilities | |||||||||||
| Accounts payable | |||||||||||
| Accrued commodity purchases | |||||||||||
| Commodity derivative instruments | |||||||||||
| Margin deposit deficit | |||||||||||
| Accrued expenses | |||||||||||
| Accrued interest | |||||||||||
| Deferred liabilities - current | |||||||||||
| Total current liabilities | |||||||||||
| Long-term liabilities | |||||||||||
| Long-term debt, net of current maturities and unamortized debt issuance costs | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Total long-term liabilities | |||||||||||
| Commitments and contingencies (Notes 5, 6, 7, and 12) | |||||||||||
| Members' equity | |||||||||||
| Class A Units, no par value, 30,419,000 units issued and outstanding at March 31, 2021 and December 31, 2020 | |||||||||||
| Total liabilities and members' equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed financial statements.
5
South Dakota Soybean Processors, LLC
Condensed Statements of Operations (Unaudited)
For the Three-Month Periods Ended March 31, 2021 and 2020
| 2021 | 2020 | |||||||||||||||||||||||||
| Net revenues | $ | $ | ||||||||||||||||||||||||
| Cost of revenues: | ||||||||||||||||||||||||||
| Cost of product sold | ||||||||||||||||||||||||||
| Production | ||||||||||||||||||||||||||
| Freight and rail | ||||||||||||||||||||||||||
| Brokerage fees | ||||||||||||||||||||||||||
| Total cost of revenues | ||||||||||||||||||||||||||
| Gross profit (loss) | ||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Administration | ||||||||||||||||||||||||||
| Operating income (loss) | ||||||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ||||||||||||||||||||||||
| Other non-operating income (expense) | ( | |||||||||||||||||||||||||
| Patronage dividend income | ||||||||||||||||||||||||||
| Total other income (expense) | ( | |||||||||||||||||||||||||
| Income (loss) before income taxes | ||||||||||||||||||||||||||
| Income tax benefit (expense) | ||||||||||||||||||||||||||
| Net income (loss) | $ | $ | ||||||||||||||||||||||||
| Basic and diluted earnings (loss) per capital unit | $ | $ | ||||||||||||||||||||||||
Weighted average number of capital units outstanding for calculation of basic and diluted earnings (loss) per capital unit | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
6
South Dakota Soybean Processors, LLC
Condensed Statements of Changes in Members' Equity (Unaudited)
For the Three Months Ended March 31, 2021 and 2020
| Class A Units | |||||||||||
| Units | Amount | ||||||||||
| Balances, December 31, 2019 | $ | ||||||||||
| Net income | — | ||||||||||
| Distribution to members | — | ( | |||||||||
| Balances, March 31, 2020 | $ | ||||||||||
| Balances, December 31, 2020 | $ | ||||||||||
| Net income | — | ||||||||||
| Distribution to members | — | ( | |||||||||
| Balances, March 31, 2021 | $ | ||||||||||
The accompanying notes are an integral part of these condensed financial statements.
7
South Dakota Soybean Processors, LLC
Condensed Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2021 and 2020
| 2021 | 2020 | ||||||||||
| Operating activities | |||||||||||
| Net income (loss) | $ | $ | |||||||||
| Charges and credits to net income not affecting cash: | |||||||||||
| Depreciation and amortization | |||||||||||
| Net (gain) loss recognized on derivative activities | ( | ||||||||||
| Gain on sales of property and equipment | |||||||||||
| Non-cash patronage dividends | ( | ( | |||||||||
| Forgiveness of Paycheck Protection Program loan | ( | ||||||||||
| Change in current assets and liabilities | ( | ( | |||||||||
| Net cash provided by (used for) operating activities | ( | ( | |||||||||
| Investing activities | |||||||||||
| Purchase of investments | ( | ||||||||||
| Retirement of patronage dividends | |||||||||||
| Purchase of property and equipment | ( | ( | |||||||||
| Net cash provided by (used for) investing activities | ( | ( | |||||||||
| Financing activities | |||||||||||
| Change in excess of outstanding checks over bank balances | ( | ||||||||||
| Net proceeds (payments) from seasonal borrowings | |||||||||||
| Distributions to members | ( | ( | |||||||||
| Payments for debt issue costs | ( | ||||||||||
| Proceeds from long-term debt | |||||||||||
| Principal payments on long-term debt | ( | ( | |||||||||
| Net cash provided by (used for) financing activities | |||||||||||
| Net change in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
| Supplemental disclosures of cash flow information | |||||||||||
| Cash paid during the period for: | |||||||||||
| Interest | $ | $ | |||||||||
| Income taxes | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed financial statements.
8
South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
Note 1 - Principal Activity and Significant Accounting Policies
The unaudited condensed financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although South Dakota Soybean Processors, LLC (the “Company”, “LLC”, “we”, “our”, or “us”) believes that the disclosures made are adequate to make the information not misleading.
In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included in the accompanying condensed financial statements. The results of operations and cash flows for interim periods are not necessarily indicative of results for a full year due in part to the seasonal nature of some of the Company’s businesses. The balance sheet data as of December 31, 2020 has been derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.
These statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2020, included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2021.
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Revenue
The Company accounts for all of its revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers.
The Company principally generates revenue from merchandising and transporting manufactured agricultural products used as ingredients in food, feed, energy and industrial products. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any amounts collected on behalf of third parties (e.g. - taxes). The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product to a customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms). Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of revenues. Accordingly, amounts billed to customers for such costs are included as a component of revenues.
Payments received in advance to the transfer of goods, or "contract liabilities", are included in "Deferred liabilities - current" on the Company's condensed balance sheets. These customer prepayments totaled $2,566,578 and $1,728,407 as of March 31, 2021 and December 31, 2020, respectively. Of the $1,728,407 balance as of December 31, 2020, contract liabilities recognized as revenues were $392,984 for the three months ended March 31, 2021. Of the $313,347 customer prepayments as of December 31, 2019, the Company recognized $224,655 of contract liabilities as revenues during the three months ended March 31, 2020.
9
South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
The following table presents a disaggregation of revenue from contracts with customers for the three month periods ended March 31, 2021 and 2020, by product type:
| 2021 | 2020 | ||||||||||||||||||||||
| Soybean meal and hulls | $ | $ | |||||||||||||||||||||
| Soybean oil and oil byproducts | |||||||||||||||||||||||
| Totals | $ | $ | |||||||||||||||||||||
Recent accounting pronouncements
Any recent accounting pronouncements are not expected to have a material impact on our condensed financial statements.
Note 2 - Accounts Receivable
Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms, which is generally 30 days from invoice date. Accounts considered uncollectible are written off. The Company’s estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any.
The following table presents the aging analysis of trade receivables as of March 31, 2021 and December 31, 2020:
| March 31, 2021 | December 31, 2020 | ||||||||||
| Past due: | |||||||||||
| Less than 30 days past due | $ | $ | |||||||||
| 30-60 days past due | |||||||||||
| 60-90 days past due | |||||||||||
| Greater than 90 days past due | |||||||||||
| Total past due | |||||||||||
| Current | |||||||||||
| Totals | $ | $ | |||||||||
In general, cash received is applied to the oldest outstanding invoice first, unless payment is for a specified invoice. The Company, on a case by case basis, may charge a late fee of 1.5 % per month on past due receivables.
Note 3 - Inventories
The Company’s inventories consist of the following at March 31, 2021 and December 31, 2020:
| March 31, 2021 | December 31, 2020 | ||||||||||
| Finished goods | $ | $ | |||||||||
| Raw materials | |||||||||||
| Supplies & miscellaneous | |||||||||||
| Totals | $ | $ | |||||||||
Finished goods and raw materials are valued at estimated market value, which approximates net realizable value. Supplies and other inventories are stated at the lower of cost or net realizable value.
10
South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
Note 4 - Property and Equipment
The following is a summary of the Company's property and equipment at March 31, 2021 and December 31, 2020:
| 2021 | 2020 | ||||||||||||||||||||||
| Cost | Accumulated Depreciation | Net | Net | ||||||||||||||||||||
| Land | $ | $ | $ | $ | |||||||||||||||||||
| Land improvements | ( | ||||||||||||||||||||||
| Buildings and improvements | ( | ||||||||||||||||||||||
| Machinery and equipment | ( | ||||||||||||||||||||||
| Railroad cars | ( | ||||||||||||||||||||||
| Company vehicles | ( | ||||||||||||||||||||||
| Furniture and fixtures | ( | ||||||||||||||||||||||
| Construction in progress | |||||||||||||||||||||||
| Totals | $ | $ | ( | $ | $ | ||||||||||||||||||
Depreciation of property and equipment was $1,269,550 and $1,187,316 for the three months ended March 31, 2021 and 2020, respectively.
Note 5 - Note Payable – Seasonal Loan
Note 6 - Long-Term Debt
The following is a summary of the Company's long-term debt at March 31, 2021 and December 31, 2020:
| March 31, 2021 | December 31, 2020 | ||||||||||
| Revolving term loan from CoBank, interest at variable rates (2.56% and 2.60% at March 31, 2021 and December 31, 2020, respectively), secured by substantially all property and equipment. Loan matures September 20, 2023. | $ | $ | |||||||||
| Note payable to U.S. Small Business Authority, due in monthly principal and interest installments, interest rate at 1.00%, unsecured. Note matures July 20, 2022. | |||||||||||
| Total debt before debt issuance costs | |||||||||||
| Less current maturities | ( | ||||||||||
| Less debt issuance costs, net of amortization of $11,797 and $10,577 as of March 31, 2021 and December 31, 2020, respectively | ( | ( | |||||||||
| Total long-term debt | $ | $ | |||||||||
The Company entered into an agreement as of January 28, 2020 with CoBank to amend and restate its Credit Agreement, which includes both the revolving term and seasonal loans. Under the terms and conditions of the Credit Agreement, CoBank agreed to make advances to the Company for up to $26,000,000 on the revolving term
11
South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
loan with a variable effective interest rate of 2.56 %. The amount available for borrowing on the revolving term loan, however, will decrease by $2,000,000 every six months beginning on March 20, 2020, with a scheduled balloon payment for the remaining balance on the loan's maturity date of September 20, 2023 . The Company pays a 0.40 % annual commitment fee on any funds not borrowed. The debt issuance costs of $24,000 paid by the Company on this amendment will be amortized over the term of loan. The principal balance outstanding on the revolving term loan was $20,000,000 and $17,503,291 as of March 31, 2021 and December 31, 2020, respectively. There were no remaining commitments available to borrow on the revolving term loan as of March 31, 2021.
Under this agreement, the Company is subject to compliance with standard financial covenants and the maintenance of certain financial ratios. The Company was in compliance with all covenants and conditions with CoBank as of March 31, 2021.
On April 20, 2020, the Company entered into an unsecured promissory note for $1,215,700 under the U.S. Small Business Administration's Paycheck Protection Program (“PPP Loan“), a loan program created under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act“). The PPP Loan is being made through First Bank & Trust, N.A. The PPP Loan was scheduled to mature on July 20, 2022 and had a 1 % interest rate. The Company submitted to the SBA a loan forgiveness application on November 20, 2020, with the amount which may be forgiven equal to the sum of qualifying expenses such as payroll, rent obligations, and covered utility payments. The forgiveness application was approved by the SB for $1,205,700 on November 25, 2020 and $10,000 on February 19, 2021.
The following are minimum principal payments on long-term debt obligations for the twelve-month periods ended March 31:
| 2022 | $ | ||||
| 2023 | |||||
| 2024 | |||||
| Total | $ | ||||
Note 7 - Operating Leases
The Company has several operating leases for railcars. These leases have terms ranging from 3 -18 years and do not have renewal terms provided. The leases require the Company to maintain the condition of the railcars, restrict the use of the railcars to specified products, such as soybean meal, hulls or oil, limit usage to the continental United States, Canada or Mexico, require approval to sublease to other entities, and require the Company's submission of its financial statements. Lease expense for all railcars was $760,961 and $783,210 for the three months ended March 31, 2021 and 2020, respectively.
The following is a schedule of the Company's operating leases for railcars as of March 31, 2021:
| Lessor | Quantity of Railcars | Commencement Date | Maturity Date | Monthly Payment | ||||||||||||||||||||||
| American Railcar Leasing | 7/1/2015 | 6/30/2021 | $ | |||||||||||||||||||||||
| Andersons Railcar Leasing Co. | 7/1/2018 | 6/30/2023 | ||||||||||||||||||||||||
| Andersons Railcar Leasing Co. | 7/1/2019 | 6/30/2026 | ||||||||||||||||||||||||
| Farm Credit Leasing | 9/1/2020 | 8/31/2032 | ||||||||||||||||||||||||
| GATX Corporation | 7/1/2020 | 6/30/2024 | ||||||||||||||||||||||||
| Midwest Railcar Corporation | 1/1/2015 | 12/31/2021 | ||||||||||||||||||||||||
| Trinity Capital | 11/1/2020 | 10/31/2023 | ||||||||||||||||||||||||
| Trinity Capital | 11/1/2020 | 10/31/2023 | ||||||||||||||||||||||||
| Wells Fargo Rail | 8/1/2017 | 7/31/2022 | ||||||||||||||||||||||||
12
South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
| Lessor | Quantity of Railcars | Commencement Date | Maturity Date | Monthly Payment | ||||||||||||||||||||||
| Wells Fargo Rail | 1/1/2018 | 12/31/2022 | ||||||||||||||||||||||||
| Wells Fargo Rail | 1/1/2004 | 12/31/2021 | ||||||||||||||||||||||||
| Wells Fargo Rail | 1/1/2004 | 12/31/2021 | ||||||||||||||||||||||||
| Wells Fargo Rail | 1/1/2015 | 12/31/2021 | ||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||
The Company also has a number of other operating leases for machinery and equipment. These leases have terms ranging from 3 -7 years; however, most of these leases have automatic renewal terms. These leases require monthly payments of $3,779 . Rental expense under these other operating leases was $9,741 and $7,681 for the three-month periods ended March 31, 2021 and 2020, respectively.
On March 19, 2020, the Company entered into an agreement with an entity in the western United States to provide storage and handling services for the Company's soybean meal. The Company will pay the entity $3,300,000 , which is included in current operating lease liabilities on the Company's balance sheet, after the entity's construction of additional storage and handling facilities. The agreement will mature seven years after completion of the construction but includes an additional -year renewal period at the sole discretion of the Company.
Operating leases are included in right-to-use lease assets, current operating lease liabilities, and long-term lease liabilities on the condensed balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company's secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the condensed balance sheet.
Lease expense for these operating leases is recognized on a straight-line basis over the lease terms. The components of lease costs recognized within our condensed statements of operations for the three-month and three-month periods ended March 31, 2021 and 2020 were as follows:
| 2021 | 2020 | ||||||||||||||||||||||
| Cost of revenues - Freight and rail | $ | $ | |||||||||||||||||||||
| Cost of revenues - Production | |||||||||||||||||||||||
| Administration expenses | |||||||||||||||||||||||
| Total operating lease costs | $ | $ | |||||||||||||||||||||
The following summarizes the supplemental cash flow information for the three-month periods ended March 31, 2021 and 2020:
| 2021 | 2020 | ||||||||||||||||||||||
| Cash paid for amounts included in measurement of lease liabilities | $ | $ | |||||||||||||||||||||
| Supplemental non-cash information: | |||||||||||||||||||||||
| Right-of-use assets obtained in exchange for lease liabilities | $ | $ | |||||||||||||||||||||
13
South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
The following summarizes the weighted-average remaining lease term and weighted-average discount rate:
| March 31, 2021 | ||||||||
| Weighted-average remaining lease-term - operating leases (in years) | ||||||||
| Weighted-average discount rate - operating leases | % | |||||||
The following is a maturity analysis of the undiscounted cash flows of the operating lease liabilities as of March 31, 2021:
| Railcars | Other | Total | ||||||||||||||||||
| Twelve-month periods ended March 31: | ||||||||||||||||||||
| 2022 | $ | $ | $ | |||||||||||||||||
| 2023 | ||||||||||||||||||||
| 2024 | ||||||||||||||||||||
| 2025 | ||||||||||||||||||||
| 2026 | ||||||||||||||||||||
| Thereafter | ||||||||||||||||||||
| Total lease payments | ||||||||||||||||||||
| Less amount of lease payments representing interest | ( | ( | ( | |||||||||||||||||
| Total present value of lease payments | $ | $ | $ | |||||||||||||||||
Note 8 - Member Distribution
Note 9 - Derivative Instruments and Hedging Activities
In the ordinary course of business, the Company enters into contractual arrangements as a means of managing exposure to changes in commodity prices and, occasionally, foreign exchange and interest rates. The Company’s derivative instruments primarily consist of commodity futures, options and forward contracts, and interest rate swaps, caps and floors. Although these contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments. These contracts are recorded on the Company’s condensed balance sheets at fair value as discussed in Note 10, Fair Value.
As of March 31, 2021 and December 31, 2020, the value of the Company’s open futures, options and forward contracts was approximately $(2,886,858 ) and $(13,523,064 ), respectively.
| As of March 31, 2021 | |||||||||||||||||
| Balance Sheet Classification | Asset Derivatives | Liability Derivatives | |||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||
| Commodity contracts | $ | $ | |||||||||||||||
| Foreign exchange contracts | |||||||||||||||||
| Interest rate caps and floors | |||||||||||||||||
| Totals | $ | $ | |||||||||||||||
14
South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
| As of December 31, 2020 | |||||||||||||||||
| Balance Sheet Classification | Asset Derivatives | Liability Derivatives | |||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||
| Commodity contracts | $ | $ | |||||||||||||||
| Foreign exchange contracts | |||||||||||||||||
| Interest rate caps and floors | |||||||||||||||||
| Totals | $ | $ | |||||||||||||||
During the three-month periods ended March 31, 2021 and 2020, net realized and unrealized gains (losses) on derivative transactions were recognized in the condensed statements of operations as follows:
| 2021 | 2020 | ||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Commodity contracts | $ | ( | $ | ||||||||||||||||||||
| Foreign exchange contracts | ( | ||||||||||||||||||||||
| Interest rate swaps, caps and floors | ( | ||||||||||||||||||||||
| Totals | $ | ( | $ | ||||||||||||||||||||
The Company recorded gains (losses) of $(5,816,260 ) and $5,138,750 in cost of goods sold related to its commodity derivative instruments for the three-month periods ended March 31, 2021 and 2020, respectively.
Note 10 - Fair Value
ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, this guidance establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. The three levels of hierarchy and examples are as follows:
•Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange and commodity derivative contracts listed on the Chicago Board of Trade (“CBOT”).
•Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs, such as commodity prices using forward future prices.
•Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
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South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
| Fair Value as of March 31, 2021 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||
| Inventory | $ | $ | $ | $ | |||||||||||||||||||
| Commodity derivative instruments | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Margin deposits (deficits) | $ | ( | $ | $ | $ | ( | |||||||||||||||||
| Fair Value as of December 31, 2020 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||
| Inventory | $ | $ | $ | $ | |||||||||||||||||||
| Commodity derivative instruments | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Margin deposits | $ | $ | $ | $ | |||||||||||||||||||
The Company enters into various commodity derivative instruments, including futures, options, swaps and other agreements. The fair value of the Company’s commodity derivatives is determined using unadjusted quoted prices for identical instruments on the CBOT. The Company estimates the fair market value of their finished goods and raw materials inventories using the market price quotations of similar forward future contracts listed on the CBOT and adjusts for the local market adjustments derived from other grain terminals in our area.
The Company considers the carrying amount of significant classes of financial instruments on the balance sheets, including cash, accounts receivable, and accounts payable, to be reasonable estimates of fair value due to their length or maturity. The fair value of the Company’s long-term debt approximates the carrying value. The interest rates on the long-term debt are similar to rates the Company would be able to obtain currently in the market.
The Company has patronage investments in other cooperatives and common and preferred stock holdings in privately held entities. There is no market for their patronage credits or the entity’s common and preferred holdings, and it is impracticable to estimate the fair value of the Company’s investments. These investments are carried on the balance sheet at original cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.
Note 11 - Related Party Transactions
The Company sold soybean products to Prairie AquaTech, LLC and Prairie AquaTech Manufacturing, LLC totaling $1,502,827 and $2,806 during the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, Prairie AquaTech, LLC and Prairie AquaTech Manufacturing, LLC owed the Company $0 and $339,967 , respectively.
The Company has entered into agreements with Prairie AquaTech Manufacturing, LLC to perform various management services and to serve as the owner's representative during the construction of its new manufacturing facility adjacent to the Company's plant in Volga, South Dakota. The Company received a total of $1.72 million in compensation for those services, which was recorded in deferred liabilities on the Company's condensed balance sheet. The Company recognized revenues from management services of $0 and $85,833 during the three months ended March 31, 2021 and 2020, respectively.
Note 12 - Commitments and Contingencies
As of March 31, 2021, the Company had unpaid commitments of approximately $2.1 million for construction and acquisition of property and equipment, all of which is expected to be incurred by December 31, 2021.
From time to time in the ordinary course of our business, the Company may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual dispute. The Company carries insurance that provides protection against general commercial liability claims, claims against our directors, officer and employees, business interruption, automobile liability, and workers'
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South Dakota Soybean Processors, LLC
Notes to Condensed Financial Statements
Note 13 - Subsequent Event
The Company evaluated all of its activities and, except for the events listed below, concluded that no subsequent events have occurred that would require recognition in its financial statements or disclosed in the notes to its financial statements.
On April 5, 2021, the Company entered into an amendment of the seasonal loan agreement with CoBank. The maximum amount that the Company may borrow under the seasonal loan is increased from $45.0 million to $60.0 million until the loan matures on December 1, 2021. All other material items and conditions under the seasonal loan agreement remain unchanged following this amendment.
On April 30, 2021, the Company entered into an amendment of the seasonal loan agreement with CoBank. The maximum amount that the Company may borrow under the seasonal loan is increased from $60.0 million to $70.0 million until the loan matures on December 1, 2021. All other material items and conditions under the seasonal loan agreement remain unchanged following this amendment.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
The information in this quarterly report on Form 10-Q for the three-month period ended March 31, 2021, (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contains “forward-looking statements” that deal with future results, expectations, plans and performance, and should be read in conjunction with the financial statements and Annual Report on Form 10-K for the year ended December 31, 2020. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. Forward-looking statements involve numerous assumptions, risks and uncertainties. Actual results or actual business or other conditions may differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are identified in our Form 10-K for the year ended December 31, 2020.
We are not under any duty to update the forward-looking statements contained in this report, nor do we guarantee future results or performance or what future business conditions will be like. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report.
Executive Overview and Summary
We recorded a net income of $5.8 million, compared to $0.2 million during the same period in 2020. The $5.6 million improvement in profit is largely due to improved weather conditions within our soybean procurement area along with increased demand for soybean oil. While adverse weather in the spring of 2019 significantly reduced the quantity and quality of soybeans in our area, conditions during the 2020 crop year vastly improved, in turn yielding a large soybean crop with improved quality. In addition, oil demand surged significantly due to increased demand from the renewable diesel and food retail sectors that continue to recover following the COVID-19 pandemic.
Although the first quarter results were very good, we are less certain about the remaining quarters of 2021. Results may be affected by the uncertainty with soybean supply until this fall's harvest which may be a difficult challenge for us. Due to a strong export demand and increased processing in the U.S., soybean supply is expected to decrease dramatically during the summer. This shortfall, along with the anticipated higher soybean prices, may force us to slow production in August and September. Although a large fall harvest would provide relief, we are unable to forecast the harvest at this time. To alleviate risk, we have begun construction of additional storage facilities to help us capture a greater number of new crop soybeans when available this fall. In addition, we may receive lower prices for meal as U.S. soybean processors increase production due to a surging demand for oil, resulting in lower margins.
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RESULTS OF OPERATIONS
Comparison of the three months ended March 31, 2021 and 2020
| Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | ||||||||||||||||||||||
| $ | % of Revenue | $ | % of Revenue | ||||||||||||||||||||
| Revenue | $ | 123,627,541 | 100.0 | $ | 98,723,412 | 100.0 | |||||||||||||||||
| Cost of revenues | (116,998,330) | (94.6) | (96,998,949) | (98.3) | |||||||||||||||||||
| Gross profit | 6,629,211 | 5.4 | 1,724,463 | 1.7 | |||||||||||||||||||
| Operating expenses | (1,117,842) | (0.9) | (1,024,729) | (1.0) | |||||||||||||||||||
| Interest expense | (317,152) | (0.3) | (349,987) | (0.4) | |||||||||||||||||||
| Other non-operating income (expense) | 589,875 | 0.5 | (126,664) | (0.1) | |||||||||||||||||||
| Net income | $ | 5,784,092 | 4.7 | $ | 223,083 | 0.2 | |||||||||||||||||
Revenue – Revenue increased $24.9 million, or 25.2%, for the three-month period ended March 31, 2021, compared to the same period in 2020. The increase in revenues is primarily due to increases in the average sales prices of all soybean products. Soybean prices soared due to a very strong demand in the soybean export sector, resulting in increased meal and oil prices. Oil prices were further affected by surging demand for soybean oil from the renewable diesel sector.
Gross Profit/Loss – Gross profit increased $4.9 million for the three months ended March 31, 2021, compared to the same period in 2020. The increase in gross profit is primarily due to an improvement in the quantity and quality of soybeans grown in the U.S., especially in our local procurement area. In addition, demand for oil surged from the renewable diesel sector as more plants are opened.
Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased approximately $93,000, or 9.1%, during the three-month period ended March 31, 2021, compared to the same period in 2020. The increase is primarily due to an increase in personnel costs.
Interest Expense – Interest expense decreased $33,000, or 9.4%, during the three months ended March 31, 2021, compared to the same period in 2020. The decrease in interest expense is due primarily to a decrease in interest rates on our senior debt with CoBank. As of March 31, 2021, the interest rate on our revolving long-term loan was 2.56%, compared to 3.44% as of March 31, 2020. Partially offsetting the decrease in rates is an increase in borrowings from our lines of credit, as we borrowed more due to higher commodity prices and to pay for capital improvements. The average debt level during the three-month period ended March 31, 2021 was approximately $47.8 million, compared to $36.6 million for the same period in 2020.
Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, improved $717,000 during the three-month period ended March 31, 2021, compared to the same period in 2020. The increase in other non-operating income is due to a $626,000 improvement in gains (losses) on our interest rate hedge instruments. During the three-month period ended March 31, 2021, gains on interest rate hedges totaled $207,000, compared to losses of $419,000 during the same period in 2020.
Net Income/Loss – During the three-month period ended March 31, 2021, we generated a net income of $5.8 million, compared to $0.2 million for the same period in 2020. The $5.6 million decrease is primarily attributable to an increase in gross profit and other non-operating income.
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LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are cash provided by operations and borrowings under our two lines of credit which are discussed below under “Indebtedness.” On March 31, 2021, we had working capital, defined as current assets less current liabilities, of approximately $25.9 million, compared to $18.7 million on March 31, 2020. Working capital increased $7.2 million between periods primarily due to net income during that period. Based on our current plans, we believe that we will continue funding our capital and operating needs from cash from operations and revolving lines of credit.
Comparison of the Three Months Ended March 31, 2021 and 2020
| 2021 | 2020 | ||||||||||
| Net cash provided by (used for) operating activities | $ | (33,683,127) | $ | (14,716,791) | |||||||
| Net cash provided by (used for) investing activities | (1,709,263) | (2,202,975) | |||||||||
| Net cash provided by (used for) financing activities | 35,574,484 | 16,654,948 | |||||||||
Cash Flows Used For Operations
The $19.0 million increase in cash flows used for operating activities is due to a $19.8 million increase in inventories and a $12.2 million decrease in accrued commodity purchases. During the three-month period ended March 31, 2021, we increased inventories by $27.0 million, compared to $7.2 million during the same period in 2020. Accrued commodity purchases decreased by $14.0 million during the three months ended March 31, 2021, compared to $1.8 million during the same period in 2020. Partially offsetting the changes in inventories and accrued commodity purchases was a $5.8 million net loss on derivative activities in 2021, compared to a $5.1 million net gain during the same period in 2020. The changes in inventories, accrued commodity purchases and net gains (losses) on derivative activities are the result of increased commodity prices in our industry.
Cash Flows Used For Investing Activities
The $0.5 million decrease in cash flows used for investing activities during the three-month period ended March 31, 2021, compared to the same period in 2020, is due to a decrease in investment purchases. During the three months ended March 31, 2021, we made no new investments in Prairie AquaTech Manufacturing, LLC, compared to $0.4 million during the same period in 2020.
Cash Flows Provided By (Used For) Financing Activities
The $18.9 million increase in cash flows provided by financing activities is principally due to a $21.6 million increase in net proceeds on borrowings. During the three months ended March 31, 2021, net proceeds on borrowings increased $45.0 million, compared to $23.4 million during the same period in 2020. Partially offsetting the increase in net borrowings was a $2.7 million increase in cash distributions to our members during the three-month period ended March 31, 2021, compared to the same period in 2020.
Indebtedness
We have two lines of credit with CoBank, our primary lender, to meet the short and long-term needs of our operations. The first credit line is a revolving long-term loan. Under this loan, we may borrow funds as needed up to the credit line maximum, or $26.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line. On March 20, 2020, the available credit line decreased by $2.0 million, and decreases continually by the same amount every six months until the credit line’s maturity on September 20, 2023 at which time we will be required to make a balloon payment for the remaining balance. We pay a 0.40% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan is $20.0 million and $17.5 million as of March 31, 2021 and December 31, 2020. Under this loan, there were no additional funds available to borrow as of March 31, 2021.
The second credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance our operating needs. Prior to the amendments described below, the maximum we could borrow under this credit line was $45.0 million until the loan's maturity on December 1, 2021. We pay a 0.20% annual commitment fee on any
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funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of March 31, 2021 and December 31, 2020, there were advances outstanding on the seasonal loan of $37.3 million and $0, respectively. Under this loan, $7.7 million was available to be borrowed as of March 31, 2021.
On April 5, 2021 and April 30, 2021, we amended our seasonal loan with CoBank. Under the amendments, the principal amount that we may borrow is increased from $45.0 million to $60.0 million until the loan's maturity on December 1, 2021. All other material items and conditions under the credit agreement, and subsequent amendments to such agreement, remain the same following this amendment.
Both the revolving and seasonal loans with CoBank are set up with a variable rate option. The variable rate is set by CoBank and changes weekly on the first business day of each week. We also have a fixed rate option on both loans, allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the revolving term loan is 2.56% and 2.60% as of March 31, 2021 and December 31, 2020, respectively. As of March 31, 2021 and December 31, 2020, the interest rate on the seasonal loan is 2.31% and 2.35%, respectively. We were in compliance with all covenants and conditions with CoBank as of March 31, 2021.
On April 20, 2020, we entered into an unsecured promissory note for $1,215,700 under the U.S. Small Business Administration's Paycheck Protection Program (“PPP Loan“), a loan program created under the Coronavirus Aid, Relief and Economic Security (the "CARES Act"). The PPP Loan was made through First Bank & Trust, N.A., Brookings, South Dakota. The PPP Loan was scheduled to mature on July 20, 2022 and had a 1.0% interest rate. In November 2020, we submitted to the SBA an application for loan forgiveness equal to the sum of qualifying expenses such as payroll costs, rent obligations, and covered utility payments. The forgiveness application was approved by the SBA on November 25, 2020 for $1,205.700 and the remaining $10,000 in February 2021.
OFF BALANCE SHEET FINANCING ARRANGEMENTS
We do not utilize variable interest entities or other off-balance sheet financial arrangements.
Contractual Obligations
The following table shows our contractual obligations for the periods presented:
| Payment due by period | ||||||||||||||||||||||||||||||||
| CONTRACTUAL OBLIGATIONS | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||||||||||||||
| Long-Term Debt Obligations (1) | $ | 21,145,000 | $ | 4,495,000 | $ | 16,650,000 | $ | — | $ | — | ||||||||||||||||||||||
| Operating Lease Obligations | 12,176,000 | 5,813,000 | 2,497,000 | 1,141,000 | 2,725,000 | |||||||||||||||||||||||||||
| Totals | $ | 33,321,000 | $ | 10,308,000 | $ | 19,147,000 | $ | 1,141,000 | $ | 2,725,000 | ||||||||||||||||||||||
(1) Represents principal and interest payments on our notes payable, which are included on our Balance Sheet.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1 of our Financial Statements under Part I, Item 1, for a discussion on the impact, if any, of the recently pronounced accounting standards.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes to our critical accounting policies and estimates from those set forth in our Annual Report on Form 10-K for the year ended December 31, 2020.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Commodities Risk & Risk Management. To reduce the price change risks associated with holding fixed price commodity positions, we generally take opposite and offsetting positions by entering into commodity futures contracts (either a straight or options futures contract) on a regulated commodity futures exchange, the Chicago Board of Trade. While hedging activities reduce the risk of loss from changing market prices, such activities also limit the gain potential which otherwise could result from these significant fluctuations in market prices. Our policy is generally to maintain a hedged position within limits, but we can be long or short at any time. Our profitability is primarily derived from margins on soybeans processed, not from hedging transactions. Our management does not anticipate that hedging activities will have a significant impact on future operating results or liquidity. Hedging arrangements do not protect against nonperformance of a cash contract.
At any one time, our inventory and purchase contracts for delivery to our facility may be substantial. We have risk management policies and procedures that include net position limits. They are defined by commodity, and include both trader and management limits. This policy and procedure triggers a review by management when any trader is outside of position limits. The position limits are reviewed at least annually with the board of managers. We monitor current market conditions and may expand or reduce the limits in response to changes in those conditions.
An adverse change in market prices would not materially affect our profitability since we generally take opposite and offsetting positions by entering into commodity futures and forward contracts as economic hedges of price risk.
Foreign Currency Risk. We conduct essentially all of our business in U.S. dollars and have minimal direct risk regarding foreign currency fluctuations. Foreign currency fluctuations do, however, impact the ability of foreign buyers to purchase U.S. agricultural products and the competitiveness of and demand for U.S. agricultural products compared to the same products offered by foreign suppliers.
An adverse change in market prices would not materially affect our profitability since we generally take opposite and offsetting positions by entering into commodity futures and forward contracts as economic hedges of price risk.
Interest Rate Risk. We manage exposure to interest rate changes by using variable rate loan agreements with fixed rate options. Long-term loan agreements can utilize the fixed option through maturity; however, the revolving ability to pay down and borrow back would be eliminated once the funds were fixed.
As of March 31, 2021, we had $0 in fixed rate debt outstanding and $65.0 million of variable rate lines of credit. Interest rate changes impact the amount of our interest payments and, therefore, our future earnings and cash flows. Assuming other variables remain constant, a 1.0% increase in interest rates on our variable rate debt could have an estimated impact on profitability of approximately $650,000 per year.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures. Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.
Changes in Internal Control Over Financial Reporting. There were no changes to our internal controls over financial reporting that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting during the quarter ended March 31, 2021.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time in the ordinary course of our business, we may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual dispute. We carry insurance that provides protection against general commercial liability claims, claims against our
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directors, officer and employees, business interruption, automobile liability, and workers' compensation. We are not currently involved in any material legal proceedings and are not aware of any potential claims.
Item 1A. Risk Factors.
During the quarter ended March 31, 2021, there were no material changes to the Risk Factors disclosed in Item 1A (Part I) of our 2020 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
| Exhibit Number | Description | |||||||
| 3.1(i) | ||||||||
| 3.1(ii) | ||||||||
| 3.1(iii) | ||||||||
| 4.1 | ||||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
| 10.3 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 32.2 | ||||||||
____________________________________________________________________________
(1) Incorporated by reference from Appendix B to the information statement/prospectus filed as a part of the issuer’s Registration Statement on Form S-4 (File No. 333-75804).
(2) Incorporated by reference from the same numbered exhibit to the issuer’s Form 8-K filed on June 22, 2017.
(3) Incorporated by reference from the same numbered exhibit to the issuer’s Form 10-Q filed on August 14, 2002.
(4) Incorporated by reference from the same numbered exhibit to the issuer’s Registration Statement on Form S-4 (File No. 333-75804).
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SOUTH DAKOTA SOYBEAN PROCESSORS, LLC | |||||||||||
| Dated: | May 12, 2021 | By | /s/ Thomas Kersting | ||||||||
| Thomas Kersting, Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
| Dated: | May 12, 2021 | By | /s/ Mark Hyde | ||||||||
| Mark Hyde, Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
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