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

As of November 12, 2021,May 16, 2022, we had 64,560 membership units outstanding.

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the year ended December 31, 2020,2021, contained in the Company's annual report on Form 10-K for 2020.2021.

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 (an Iowa Limited Liability Company) is located near Lawler, Iowa and was organized to pool investors for a 100 million gallon ethanol plant with distribution primarily throughout the United States. The Company has capacity to produce in excess of 190 million gallons annually and sells distillers dried grains and corn oil as byproducts of ethanol production.

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.Principles ("GAAP"). 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.

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"). This investment is being accounted for under the equity method of accounting, as the Company 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 ASU, 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

customers. When 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 expenses 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 services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

All revenue recognized in the statement of operations is considered 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 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 has concluded that no impairment is necessary as of March 31, 2022 and December 31, 2021.

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 (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 per unit is computed by dividing net income 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 ninethree months ended September 30, 2021,March 31, 2022, ethanol sales averaged approximately 76% of total revenues, while approximately 17%16% of revenues were generated from the sale of distiller grains. Corn oil sales attributed approximately 7%8% of revenues during this time period. For the ninethree months ended September 30, 2021,March 31, 2022, corn costs averaged approximately 83%68% 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.programs, global political or economic issues, including but not limited to the war in Ukraine including sanctions associated therewith, or global damaging growing conditions, such as plant disease or adverse weather, including drought, increased fertilizer costs as well as global conflicts. The Company's risk management program is used to protect against the price volatility of these commodities.

On January 30, 2020, the World Health Organization declared the coronavirus outbreak (COVID-19) a "Public Health Emergency of International Concern" and on March 11, 2020, declared COVID-19 a pandemic. The impact of COVID-19 has negatively impacted the Company’s operations, suppliers or other vendors, and customer base. Any future quarantines, labor shortages or other disruptions to the Company's operations, or those of their customers, may adversely impact the Company's revenues, ability to provide its services and operating results. In addition, a significant outbreak of epidemic, pandemic or contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, including the geographical area in which the Company operates, resulting in an economic downturn that could affect demand for its goods and services. The extent to which the coronavirus continues to impact the Company's results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others.

Inventory consisted of the following as of September 30, 2021March 31, 2022 and December 31, 2020:2021:

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. The Company currently has 2 loans with Home Federal, a term revolving loan and a revolving line of credit.

Under the terms of the Second Amended and Restated Second Supplement to the Master Loan Agreement, dated November 6, 2020, the Company has a $50 million term revolving loan which has a maturity date of November 6, 2025. Interest on the term revolving loan is due monthly and accrues at a rate equal to the Prime Rate less 60 basis points, 2.65%2.90% on September 30, 2021. ThereMarch 31, 2022. On March 31, 2022 there was approximately $11.7 million outstanding on the term revolving loan and approximately $38.3 million available to be drawn on. On December 31, 2021 there was no balance outstanding on the term revolving loan and $50 million available to be drawn as of September 30, 2021 and December 31, 2020.on.

Under the terms of the Third Amended and Restated Second Supplement to the Master Loan Agreement, dated July 22, 2021, the Company cancould borrow up to $50 million pursuant to the revolving line of credit. The amount available under the revolving line of credit decreasesdecreased to $40 million on December 31, 2021 and decreases again to $30 million on May 31, 2022. Interest on the revolving line of credit accrues at athe Prime Rate less 30 basis points, 2.95%3.20% on September 30, 2021.March 31, 2022. There is a fee on the

unused portion of the revolving loanline of credit equal to 0.30%. The maturity date of this revolving loanline of credit is November 6, 2025. There was 0 balance outstanding on the revolving line of credit as of September 30,March 31, 2022 or December 31, 2021.

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 financial covenants as of September 30, 2021.March 31, 2022.

The Company has purchased corn and materials from members of its Board of Directors who own or manage elevators or are local producers of corn. Purchases during the three and nine months ended September 30,March 31, 2022 and March 31, 2021 totaled approximately $675,000$2,434,000 and $3,145,000, respectively and during the three and nine months ended September 30, 2020 totaled approximately $644,000 and $1,815,000,$2,036,000, respectively. Amounts due to these members were approximately $80,000$6,500 and $28,000none at September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.

The Company has entered into a marketing agreement with RPMG, a related party, to sell all denatured fuel ethanol produced at the plant at a mutually agreed on price, less commission and transportation charges. As of September 30, 2021,March 31, 2022, the Company had no commitments to sell approximately 6 millionany of its produced gallons of ethanol at fixed prices and 42approximately 45 million of its produced gallons of ethanol at basis price levels indexed against exchanges for delivery through SeptemberJune 30, 2021.2022.

The Company has entered into a marketing agreement with RPMG to sell all industrial alcohol produced at the plant at a mutually agreed on price, less commission and transportation charges. As of September 30, 2021, the Company had no commitments to sell any gallons of industrial alcohol.

The Company has entered into a marketing agreement with RPMG to sell all corn oil produced at the plant at a mutually agreed on price, less marketing fees and transportation charges. As of September 30, 2021,March 31, 2022, the Company had commitments to sell approximately 5 million pounds of corn oil at various fixed and basis price levels indexed against exchanges for delivery through October 31, 2021.June 30, 2022.

The Company also has an investment in RPMG, included in other assets, totaling approximately $2,620,000$3,095,000 and $2,527,000$2,990,000 as of September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.

Sales and marketing fees related to the agreements in place for the three and nine months ended September 30,March 31, 2022 and 2021 and 2020 were approximately as follows:

At September 30, 2021,March 31, 2022, the Company had approximately $31,143,000$44,913,000 in outstanding priced corn purchase commitments for bushels at various prices and approximately 3,304,0003,993,000 bushels of basis contracts through December 20222023 accounted for under the normal purchase exclusion.

The Company has commitments for minimum purchases of various utilities such as natural gas and electricity over the next 12 monthsthrough April 2023 totaling approximately $2,928,000$3,405,000 accounted for under the normal purchase exclusion.

As of September 30, 2021,March 31, 2022, the Company had approximately 360,000593,000 decatherms of natural gas locked in at fixed prices through March 2022. As of September 30, 2020, approximately 966,000 decatherms of natural gas was locked into place at fixed prices through December 31, 2020April 2023 accounted for under the normal purchase exclusion.

A lease exists when a contract conveys to a party the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company recognizedrecognizes a lease liability at the lease commencement date, as the present value of future lease payments, using an estimated rate of interest that the Company would pay to borrow equivalent funds on a collateralized basis. A lease asset is recognized based on the lease liability value and adjusted for any prepaid lease payments, initial direct costs, or lease incentive amounts. The lease term at the commencement date includes any renewal options or termination options when it is reasonably certain that the Company will exercise or not exercise those options, respectively.

The Company leases rail cars and rail moving equipment with original terms up to 7 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 nine months ended September 30, 2021March 31, 2022 was approximately $485,000 and $1,438,000, respectively$487,000 and for the same periodsperiod in 20202021 was approximately $442,000 and $1,330,000, respectively.$461,000. The lease agreements have maturity dates ranging from MarchMay 2022 to October 2025.May 2027. The weighted average remaining life of the lease term for these leases was 1.142.77 years as of September 30, 2021.March 31, 2022.

The discount raterates used in determining the lease liability for each individual lease was the Company's estimated incremental borrowing raterates of 4.79% and 2.90%. The right-of-useright of use asset operating lease, included in other assets, and operating lease liability, included in current and long term liabilities was approximately $1,895,903$6,444,318 and $3,116,941$1,479,064 as of September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.

At September 30, 2021,March 31, 2022, the Company had the following approximate minimum rental commitments under non-cancelable operating leases for the twelve month period ended September 30:March 31:

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.

The Company uses futures or options contracts to fix the purchase price of anticipated volumes of corn to be purchased and processed in a future month. The Company's plant will grind approximately 65 million bushels of corn per year.  Over the next twelve months, the Company has hedged and anticipates hedging between 5% and 28% of its anticipated annual grind.  At September 30, 2021,March 31, 2022, the Company has hedged portions of its anticipated monthly purchases for corn averaging approximately 14%22% of its anticipated monthly grind over the next twelve months.

The following table represents the approximate amount of realized/unrealized gains (losses) and changes in fair value recognized in earnings on commodity contracts for the three and nine months ending September 30,March 31, 2022 and 2021 and 2020 and the fair value of derivatives as of September 30, 2021March 31, 2022 and December 31, 2020:2021:

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:

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2021March 31, 2022 and December 31, 2020,2021, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

The Company's financial assets and liabilities not recorded at fair value, for which carrying value approximates fair value, consists of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and term revolver debt.

    This report contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases you can identify forward-looking statements by the use of words such as "may," "will," "should," "anticipate," "believe," "expect," "plan," "future," "intend," "could," "estimate," "predict," "hope," "potential," "continue," or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties.uncertainties, including the current crisis in Ukraine. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the reasons described in this report or in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2021. We are not under any duty to update the forward-looking statements contained in this report. We cannot guarantee future results, levels of activity, performance or achievements. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits, completely and with the understanding that our actual future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements.

    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 190 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 September 30, 2021March 31, 2022 and 2020:2021:

    Our total revenue for our thirdfirst quarter of 20212022 was approximately 72%37% more than our total revenue for our thirdfirst quarter of 20202021 due primarily to increased average prices for our products.

    The average price per gallon we received for our ethanol during our thirdfirst quarter of 20212022 was approximately 74%38% more than the average price we received for our ethanol during our thirdfirst quarter of 2020.2021. Management attributes this increase in the

average price we received for our ethanol with higher market gasoline prices, which impacts ethanol prices, during our thirdfirst quarter of 20212022 compared to the same period of 2020. Management believes that the COVID-19 pandemic impacted gasoline demand during the 2020 period. Management anticipates that the impact of the COVID-19 pandemic may continue for the rest of our 2021 fiscal year.2021.

    We sold approximately 2% fewermore gallons of ethanol during our thirdfirst quarter of 20212022 compared to the same period of 2020.2021. Management attributes this decreaseincrease to increased total production during the timing of unit trains at the end of the 2021 quarter.2022 period.

    

    Our total distiller grains revenue was approximately 51%13% more during our thirdfirst quarter of 20212022 compared to the same period of 2020,2021, primarily due to an increased average price of distiller grains sold, offset by slightly fewer dried distiller grains sold. We sold approximately 3%1% fewer tons of distiller grains during our thirdfirst quarter of 20212022 compared to the same period of 2020 due to a partial unit train on hand at the 2021 quarter end.2021. We primarily sell our distillers grains in the dried form. The average price we received for our dried distiller grains was approximately 56%13% higher during our thirdfirst quarter of 20212022 compared to the same period of 2020.2021. Management anticipates that distiller grains prices will remain steady during the rest of our 20212022 fiscal year due to anticipated stable distiller grains demand.

    Our total corn oil revenue was approximately 178%85% higher for our thirdfirst quarter of 20212022 compared to the same period of 20202021 due to an increased demand and higher average selling price per pound of corn oil during the 20212022 period. We sold approximately 14%19% more pounds of corn oil during our thirdfirst quarter of 20212022 compared to the same period of 20202021 primarily because of increased corn oil extraction efficiencydemand during the 20212022 period. The average price we received for our corn oil was approximately 143%54% higher during our thirdfirst quarter of 20212022 compared to the same period of 20202021 due to increased demand in the corn oil market. Management anticipates that corn oil prices will remain elevated for the rest of our 20212022 fiscal year since biodiesel and renewable diesel production is seeing an increase in demand and corn oil is frequently used as the feedstock to produce biodiesel.

    Our total cost of goods sold was approximately 70%47% more for our thirdfirst quarter of 20212022 compared to the same period of 2020.2021. Our cost of goods sold related to corn, without taking into account derivative instruments, was approximately 116%31% more during our thirdfirst quarter of 20212022 compared to our thirdfirst quarter of 20202021 due to higher average corn costs per bushel, along with slightly more bushels of corn ground. We used approximately 5%8% more bushels of corn during our thirdfirst quarter of 20212022 compared to the same period of 20202021 due to increased overall production at the ethanol plant. Our average cost per bushel of corn was approximately 105%21% higher during our thirdfirst quarter of 20212022 compared to our thirdfirst quarter of 20202021 due primarily to increased corn demand. Management anticipates that corn costs will remain higher unless current market demand conditions change and corn demandor there is lower due to increased corn supply from new crop corn.

    We experienced increased natural gas costs during our thirdfirst quarter of 20212022 compared to the same period of 20202021 primarily due to higher average costs per MMBtu of natural gas used, along with slightly increased usage during the 20212022 period. During our thirdfirst quarter of 2021,2022, our average delivered cost per MMBtu of natural gas was approximately 71%101% higher compared to the same period of 2020.2021. In addition, we used approximately 6%5% more MMBtu of natural gas during our thirdfirst quarter of 20212022 compared to our thirdfirst quarter of 20202021 due to increased production at the ethanol plant.

    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 thirdfirst quarter of 2021, we experienced combined realized and unrealized gains of approximately $11 million related to our corn and natural gas derivative instruments which decreased our cost of goods sold. During our third quarter of 2020, we had combined realized and unrealized losses of approximately $741,000 which increased our cost of goods 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.

    We had less interest expense during our nine months ended September 30, 2021first quarter of 2022 compared to the same period of 20202021 due to having less outstanding debt. We had lessmore other income during our nine months ended September 30, 2021first quarter of 2022 compared to the same period of 20202021 due to fewermore gains on our equity method investments in the 2021 period primarily due to investments liquidated in 2020.

    Our accounts payable was less at September 30, 2021March 31, 2022 compared to December 31, 20202021 due primarily to having less deferred corn payments at September 30, 2021.March 31, 2022. Our accrued expenses were moreless at September 30, 2021March 31, 2022 compared to December 31, 20202021 due to lower payroll related liabilities at DecemberMarch 31, 2020.2022.

The following table shows cash flows for the ninethree months ended September 30, 2021March 31, 2022 and 2020:2021:

    Our operations providedused more cash during our first ninethree months of 20212022 compared to the same period of 20202021 due primarily to increaseddecreased net income and prepaids offsetas well as by changes in accounts receivable, inventory, and accounts payable during the 20212022 period.

    Our investing activities used moreless cash during the 20212022 period primarily because of the lack of sales of trading securities during the 2021 period compared to the 2020 period, partially offset by less cash used for equipment and construction in progress induring the 2022 period compared to the 2021 period.

    Our financing activities provided no change inless cash forduring the 2021 period.2022 period because we used fewer proceeds from long term borrowings.

    We have a $50 million term revolving loan which has a maturity date of November 6, 2025. Interest on the Revolving Loan accrues at the Prime Rate less 60 basis points. We are required to make monthly payments of interest until the maturity date on November 6, 2025, on which date the unpaid principal balance of the Revolving Loan becomes due. We agreed to pay a fee of 30 basis points on a per annum basis on the unused portion of the Revolving Loan payable on a quarterly basis. As of September 30, 2021,March 31, 2022, we had nothing$11.7 million outstanding on the Revolving Loan and approximately $50$38.3 million available to be drawn. Interest accruedaccrues on the Revolving Loan as of September 30, 2021March 31, 2022 at a rate of 2.65%2.90% per year.

    In connection with the Master Loan Agreement, we are required to comply with certain debt covenants and financial ratios. We agreed to a debt service coverage ratio of 1:15 to 1:00 and a minimum working capital covenant of $30 million.  We are permitted to pay distributions to our members up to 100% of our net income for the year in which the distributions are paid provided that immediately prior to the distribution and after giving effect to the distribution, no default exists and we are in compliance with all of our loan covenants, including compliance with the financial covenants.  The maximum capital expenditure covenant was increased to $17.5 million in 2020, unless working capital exceeds $40 million, then there is no limit on capital expenditure.

    As of September 30, 2021,March 31, 2022, we were in compliance with all of our debt covenants and financial ratios. Management anticipates that we will be in compliance with all of our debt covenants and financial ratios for at least the next 12 months.

    Failure to comply with the loan covenants or to maintain the required financial ratios may cause acceleration of any future outstanding principal balances on the loans and/or the imposition of fees, charges or penalties. Any acceleration of the

    Should we default on any of our obligations pursuant to the Home Federal loans, Home Federal may terminate its commitment to provide us funds and declare any future unpaid principal balance of the loans, plus accrued interest, immediately due and payable. Events of default include the failure to make payments when due, our insolvency, any material adverse change in our financial condition or the breach of any of the covenants, representations or warranties we have made in the loan agreements.

    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. 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 revenues in the accompanying financial statements. The fair values of all contracts with the same counter-party are presented net on the accompanying balance sheet as derivative instruments net of cash due from/to broker.

    Revenue from the sale of the Company's products is recognized at the time control transfer to the customers. This generally occurs upon shipment, loading of the goods or when the customer picks up the goods. Interest income is recognized

as earned. 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.

    We are exposed to the impact of market fluctuations associated with commodity prices as discussed below. We have no exposure to foreign currency risk as all of our business is conducted in U.S. Dollars. We use derivative financial instruments as part of an overall strategy to manage market risk. We use cash, futures and option contracts to hedge changes to the commodity prices of corn, natural gas and ethanol. We do not enter into these derivative financial instruments for trading or speculative purposes, nor do we designate these contracts as hedges for accounting purposes.

    We seek to minimize the risks from fluctuations in the prices of raw material inputs, such as corn and natural gas, and finished products, such as ethanol and distiller grains, through the use of hedging instruments. These risks may be heightened due to the current crisis in Ukraine of which we cannot anticipate. In practice, as markets move, we actively manage our risk and adjust hedging strategies as appropriate. Although we believe our hedge positions accomplish an economic hedge against our future purchases and sales, management has chosen not to use hedge accounting, which would match the gain or loss on our hedge positions to the specific commodity purchase being hedged. We are using fair value accounting for our hedge positions, which means as the current market price of our hedge positions changes, the realized or unrealized gains and losses are immediately recognized in our cost of goods sold or as an offset to revenues. The immediate recognition of hedging gains and losses under fair value accounting can cause net income to be volatile from quarter to quarter due to the timing of the change in value of the derivative instruments relative to the cost and use of the commodity being hedged.

    As of September 30, 2021,March 31, 2022, we had price protection in place for approximately 9%22% of our anticipated corn needs, 7%11% of our natural gas needs and 2%none of our ethanol sales for the next 12 months. A sensitivity analysis has been prepared to estimate our exposure to ethanol, corn and natural gas price risk. Market risk related to these factors is estimated as the potential change in income resulting from a hypothetical 10% adverse change in the average cost of our corn and natural gas prices and average ethanol price as of September 30, 2021,March 31, 2022, net of the forward and future contracts used to hedge our market risk for corn and natural gas usage requirements. The volumes are based on our expected use and sale of these commodities for a one year period from September 30, 2021.March 31, 2022. The results of this analysis, which may differ from actual results, are as follows:

    We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures.

    For the fiscal quarter ended September 30, 2021,March 31, 2022, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

    On August 14, 2013, the Company filed a lawsuit against Steve Retterath in the Iowa state court located in Polk County, Iowa. The purpose of the lawsuit was to enforce the terms of the repurchase agreement the Company executed with Mr. Retterath on June 13, 2013. In February 2020, the Iowa Supreme Court ruled that the repurchase agreement is valid and enforceable. In April 2020, we closed the repurchase transaction. Now that the first part of the case is resolved, the additional matters Mr. Retterath added to the case in 2016 will be resolved by the court.

    None.

    (a)    The following exhibits are filed as part of this report.