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

In the opinion of management, the interim condensed financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments.

Homeland Energy Solutions, LLC is organized as an Iowa limited liability company. The members' liability is limited as specified in Homeland Energy Solutions' operating agreement and pursuant to the Iowa Revised Uniform Limited Liability Company Act.

Management uses estimates and assumptions in preparing these financial statements in accordance with United States 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 maintains its accounts primarily at one financial institution. At various times, the Company's cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced losses in such accounts. Also included in cash and cash equivalents are highly liquid investments that are readily convertible into known amounts of cash, which are subject to an insignificant risk of change in value due to interest rate, quoted price or penalty on withdrawal and have an original maturity of three months or less.

Investments bought and held principally for the purpose of selling them in the near term are classified as trading securities. Trading securities are measured at fair value using prices obtained from pricing services. Any interest, dividends, and unrealized or realized gains and losses on the trading securities are recorded as part of other income.

At June 30, 2021 and December 31, 2016,2020, the Company held no trading securities consisted of corporate bonds and short term bond mutual funds with an approximate cost of $41,863,000 and fair value of $41,551,000. At September 30, 2017, trading securities consisted of corporate bonds, short term bond mutual funds and money market funds with an approximate cost of $35,043,000 and fair value of $34,879,000. Forsecurities. During the three and ninesix months ended SeptemberJune 30, 2017,2021, the Company recordedhad 0 interest, dividenddividends and net realized and unrealized gains and losses from these investments of approximately $165,000 and $628,000, respectively.trading securities. During the same time period of 2016,three and six months ended June 30, 2020, the Company recorded interest, dividends and net unrealized gains and losses from these investmentstrading securities of approximately $159,000$500,000 and $1,079,000$181,000, respectively.

The Board of Directors voted to set aside up to $30 million in trading securities that willto be used by the Company for the repurchase of 25,860 membership units per the terms of an agreement with Mr. Retterath entered into on June 13, 2013 with the Company. These trading securities were used in April 2020 to repurchase the 25,860 membership units from Mr. Retterath.

Credit sales are made primarily to two customers and no collateral is required. The Company carries these accounts receivable at original invoice amount with no allowance for doubtful accounts due to the historical collection rates on these accounts.

The Company has a less than 20% investment interest in Renewable Products Marketing Group, LLC (RPMG)("RPMG"). This investment is being accounted for under the equity method of accounting, as the companyCompany has significant influence, under which the Company's share of net income is recognized as income in the Company's statement of operations and added to the investment account. The investment balance is included in other assets and the income recognized as other income. The investment is evaluated for indications of impairment on a regular basis. A loss would be recognized when the fair value is determined to be less than the carrying value.

The Company recognizes Revenue from Contracts with Customers following Accounting Standards Update (ASU) 2014-09. Under the saleASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the Company's productsnature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company generally has a single performance obligation in its arrangements with customers. The Company believes for its contracts with customers, control is recognizedtransferred at thea point in time, title to the goods and all risks of ownership transfertypically upon delivery to the customers. ThisWhen the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. The Company generally occurs upon shipment, loadingexpenses sales commissions when incurred because the amortization period would have been less than one year.

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

All revenue recognized in the goods. Interest incomestatement of operations is recognizedconsidered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, is as earned. disclosed in Note 5.

Shipping costs incurred by the Company in the sale of ethanol and distiller grains are not specifically identifiable and as a result, revenue from the sale of ethanol and distiller grains is recorded based on the net selling price reported to the Company from the marketer. Rail car lease costs incurred by the Company in the sale and shipment of distiller grain products are included in the cost of goods sold.

Inventories are generally valued at the lower of cost (first-in, first-out) or net realizable value.  In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation.

The Company reviews its property and equipment for impairment whenever events indicate that the carrying amount of the asset group may not be recoverable. If circumstances require an asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by the asset group to the carrying value of the asset group. If the carrying value of the asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

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

The Company enters into short-term cash, option and futures contracts as a means of securing purchases of corn, natural gas and sales of ethanol for the plant and managing exposure to changes in commodity and energy prices. All of the Company's derivatives are designated as non-hedge derivatives for accounting purposes, with changes in fair value recognized in net income.income (loss). Although the contracts are economic hedges of specified risks, they are not designated as and accounted for as hedging instruments.

As part of its trading activity, the Company uses futures and option contracts through regulated commodity exchanges to manage its risk related to pricing of inventories. To reduce that risk, the Company generally takes positions using cash and futures contracts and options.

Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas are included as a component of cost of goods sold and derivative contracts related to ethanol are included as a component of revenue in the accompanying financial statements. The fair values of contracts entered through commodity exchanges are presented on the accompanying balance sheet as derivative instruments. All contracts with the same counter party are reported on a net basis.

Basic and diluted net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members' units and members' unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company's basic and diluted net income per unit are the same.

The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol, distiller grains and corn oil to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the ninesix months ended SeptemberJune 30, 2017,2021, ethanol sales averaged approximately 81%75% of total revenues, while approximately 14%19% of revenues were generated from the sale of distiller grains. Corn oil sales attributed approximately 5%6% of revenues during this time period. For the ninesix months ended SeptemberJune 30, 2017,2021, corn costs averaged approximately 77%78% of cost of goods sold.

The Company's operating and financial performance is largely driven by the prices at which ethanol is sold and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities.

Inventory consisted of the following as of SeptemberJune 30, 20172021 and December 31, 2016:2020:

On June 29, 2017, the Company amended and restated the Master Loan Agreement with Home Federal Savings Bank ("Home Federal"), amending the term revolving loan to provide funding to operate the plant and establishing a term loan to help fund the Company's $42 million expansion project. In return, the Company entered into agreements providing Home Federal a security interest in substantially all personal property located on Company property, including the current expansion project.property. The Company currently has two loans1 loan with Home Federal, a term revolving loan and a term loan.

During the term of the loans, the Company is subject to certain financial covenants at various times calculated monthly, quarterly or annually, including restriction of the payment of dividends and capital expenditures and maintenance of certain financial ratios including the minimum working capital and a fixed charge ratio as defined by the Master Loan Agreement. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of the outstanding principal balances on the loans and/or the imposition of fees, charges or penalties. The Company is in compliance with all debtfinancial covenants as of SeptemberJune 30, 2017.2021.

The Company has commitments for minimum purchases of various utilities such as natural gas and electricity over the next 2 years,12 months totaling approximately $516,000 accounted for under the normal purchase exclusion, which are anticipated to approximate the following for the twelve month periods ending September 30:exclusion.

The Company leases rail cars and rail moving equipment with original terms up to 57 years. The Company is obligated to pay costs of insurance, taxes, repairs and maintenance pursuant to the terms of the leases. These costs are in addition to regular lease payments and are not included in lease expense. Rent expense incurred for the operating leases during the three and ninesix months ended SeptemberJune 30, 20172021 was approximately $369,000$492,000 and $1,150,000,$953,000, respectively and for the same periodperiods in 20162020 was approximately $418,000$444,000 and $1,249,000,$888,000, respectively. The lease agreements have maturity dates ranging from March 2022 to October 2025. The weighted average remaining life of the lease term for these leases was 1.39 years as of June 30, 2021.

The discount rate used in determining the lease liability for each individual lease was the Company's estimated incremental borrowing rate of 4.79%. The right-of-use asset operating lease, included in other assets, and operating lease liability, included in current and long term liabilities was approximately $2,307,790 and $3,116,941 as of June 30, 2021 and December 31, 2020, respectively.

The Company's activities expose it to a variety of market risks, including the effects of changes in commodity prices. 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 focuses on the unpredictability of financial and commodities markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results.

To reduce price risk caused by market fluctuations, the Company generally follows a policy of using exchange traded futures and options contracts to reduce its net position of merchandisable agricultural commodity inventories and forward cash purchase and sales contracts and uses exchange traded futures and options contracts to reduce price risk. Exchange-traded futures contracts are valued at market price. Changes in market price of exchange traded futures and options contracts related to corn and natural gas are recorded in costs of goods sold and changes in market prices of contracts related to the sale of ethanol, if applicable, are recorded in revenues.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.

Level 3: Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth below:

In relation to the repurchase agreement discussed in Note 4, onOn August 1, 2013 Mr. Steve Retterath filed a lawsuit against the Company along with several directors, the Company's former CEO, former CFO, COO, a former director and the Company's outside legal counsel in Florida state court. In August 2016, this lawsuit was voluntarily dismissed without prejudice by the Retteraths. On August 14, 2013, the Company filed a lawsuit in Iowa state court to enforce the repurchase agreement the Company entered into with Mr. Retterath. No distributions have been paid to Mr. Retterath since the time of the original expected closing date of August 1, 2013. On June 15, 2017, the Iowa Court ruled in favor of Homeland that the repurchase agreement was valid and directed Mr. Retterath to perform his obligations under the repurchase agreement by August 1, 2017. Mr. Retterath subsequently filed various motions with the Iowa Court and was granted a stay regarding his obligation to perform the repurchase agreement while the court considered his post trial motions. On May 7, 2018, the Iowa Court denied Mr. Retterath's motions for a new trial and to reconsider the Iowa Court's prior ruling. In February 2020, the Iowa Supreme Court ruled in favor of the Company that the repurchase agreement was valid. In April 2020, the Company closed the repurchase of the membership units held by Mr. Retterath.

On August 9, 2013, GS Cleantech Corporation (GS Cleantech), a subsidiary of Greenshift Corporation, filed a complaint againstJuly 22, 2021, the Company alleging thatentered into an amendment to the Company's operation ofrevolving debt with Home Federal, creating a corn oil extraction process licensed bynew $50 million revolving loan in addition to existing debt instruments. The agreements Homeland entered into with Home Federal were: (i) a Third Amendment to Amended and Restated Master Loan Agreement (the “Loan Amendment”); (ii) a Third Amended and Restated Second Supplement to Master Loan Agreement (the “Term Loan Amendment”); (iii) a Revolving Promissory Note (the “Promissory Note”); and (iv) a Fifth Amended and Restated Mortgage (the “Amended Mortgage”).

Pursuant to the Loan Amendment, the Company infringes patent rights claimed by GS Cleantech. GS Cleantech seeks royalties, damagescan borrow up to $50 million pursuant to the revolving loan. The amount available pursuant to the revolving loan decreases to $40 million on December 31, 2021 and potentially triple damages associated withdecreases again to $30 million on May 31, 2022. Interest on the alleged infringement, as well as attorney's fees fromrevolving loan accrues at a rate of 30 basis points less than the Company.prime rate. There is a fee on the unused portion of the revolving loan equal to 0.30%. The Company filed a motion for summary judgment which was granted bymaturity date of the Court. The Company expects GS Cleantech will appeal this decision.revolving loan is November 6, 2025.

Homeland Energy Solutions, LLC (referred to herein as "we," "us," the "Company," or "Homeland") is an Iowa limited liability company. Homeland was formed on December 7, 2005 for the purpose of pooling investors for the development, construction and operation of a 100 million gallon per year ethanol plant located near Lawler, Iowa. We began producing ethanol and distiller grains at the plant in April 2009. We completed installation of corn oil extraction equipment and commenced selling corn oil during our fourth quarter of 2011. During our fourth quarter of 2017, we completed a plant expansion project. The ethanol plant is now capable of operating at a rate in excess of 160190 million gallons of ethanol per year.

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the three months ended SeptemberJune 30, 20172021 and 2016:2020:

    

Our total corn oil revenue was approximately 1% greater110% higher for our thirdsecond quarter of 20172021 compared to the same period of 20162020 due to higheran increased average selling price per pound of corn oil prices.during the 2021 period. We sold approximately 1% fewer13% more pounds of corn oil during our thirdsecond quarter of 20172021 compared to the same period of 20162020 primarily because of less ethanol production offset in part by increased efficiency extracting corn oil at the plant. We added additional corn oil extraction equipment which allows us to increaseefficiency during the amount of corn oil we can produce per bushel of corn.2021 period. The average price we received for our corn oil was approximately 2% greater86% higher during our thirdsecond quarter of 20172021 compared to the same period of 2016. This increase2020 due to increased demand in the corn oil market. Management anticipates that corn oil prices occurred, in part, due to increasedwill increase slightly for the rest of our 2021 fiscal year since biodiesel production is typically higher during the summer months and corn oil demand. Management anticipates lower demand for corn oil fromis frequently used as the biodiesel industry since certain proposed volume obligations infeedstock to produce biodiesel.

We engage in risk management activities that are intended to fix the purchase price of the corn and natural gas we require to produce ethanol, distiller grains and corn oil. During our thirdsecond quarter of 2017,2021, we had aexperienced combined realized gainand unrealized losses of approximately $2,278,000 and an unrealized gain of approximately $318,000$14.8 million related to our corn and natural gas derivative instruments.instruments which increased our cost of goods sold. During our thirdsecond quarter of 2016,2020, we had acombined realized gainand unrealized gains of approximately $4,712,000 and an unrealized loss$350 thousand which decreased our cost of approximately $2,626,000goods sold related to our corn and natural gas derivative instruments. We recognize

the gains or losses that result from changes in the value of our corn and natural gas derivative instruments in cost of goods sold as the changes occur. Until the expansion is fully implemented, our plant is expected to use approximately 63 million bushels of corn per year. As of September 30, 2017, the Company has hedged portions of its anticipated monthly purchases for corn averaging approximately 8% of its anticipated monthly grind for the next twelve months, not including our anticipated increased consumption following completion of the expansion project.

We had moreless interest incomeexpense during our thirdsecond quarter of 20172021 compared to the same period of 20162020 due to having more cash on hand during the 2017 period.less outstanding debt. We also had more interest expenseless other income during our thirdsecond quarter of 20172021 compared to the same period of 20162020 due to increased borrowingless gains on our new term debt.equity method investments in the 2021 period.

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the ninesix months ended SeptemberJune 30, 20172021 and 2016:2020: