Lincolnway Energy, LLC - FORM 10-K/A - January 8, 2021

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A
Amendment No. 2
 (Mark One)

☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended September 30, 2020
OR
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __________ to ______________

Commission File Number: 000-51764

 LINCOLNWAY ENERGY, LLC
(Exact name of registrant as specified in its charter)
 
Iowa
  
20-1118105
(State or other jurisdiction of incorporation or organization)
  
(IRS Employer Identification No.)
 
59511 W. Lincoln Highway, Nevada, Iowa 50201
 
(Address of principal executive offices, Zip Code)
 
Registrant’s telephone number, including area code: (515) 232-1010

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Limited Liability Company Units

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ☐   No  ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ☐  No   ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑   No  ☐

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ☑

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:

Large accelerated filer
 ☐
Accelerated filer
☐
Non-accelerated filer
☑
Smaller reporting company
☐
   
Emerging growth company
☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐   No      ☑

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

The aggregate market value of the units held by non-affiliates of the registrant was approximately $29,854,648 as of September 30, 2020. The units are not listed on an exchange or otherwise publicly traded.  The value of the units for this purpose has been based upon the $310 book value per-unit as of September 30, 2020.  In determining this value, the registrant has assumed that all of its directors and its president are affiliates, but this assumption shall not apply to or be conclusive for any other purpose.

The number of units outstanding as of December 1, 2020 was 105,122 units consisting of 42,049 Common Units, 56,086 Class A Units and 6,987 Class B Units.

DOCUMENTS INCORPORATED BY REFERENCE:  Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission with respect to the 2021 annual meeting of the members of the registrant are incorporated by reference into Part III of this Form 10-K.

EXPLANATORY NOTE

The purpose of this Amendment No. 2 (the “Amendment No. 2”) to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 filed with the Securities and Exchange Commission (the “SEC”) on December 23, 2020 (the “Original Filing”) as amended by Amendment No. 1 filed with the SEC on January 6, 2021 (“Amendment No. 1”) is solely to correct a technological scrivener error on the Auditors’ Opinion Letter filed with Amendment No. 1 which was incorrectly dated January 6, 2021. The correct date on the Auditors’ Opinion Letter filed with Amendment No. 1 should have been December 23, 2020 (the “Original Filing Date”).  In accordance with SEC requirements, this Amendment No. 2 amends and restates in its entirety Item 8 of Part II of the Original Filing solely to include the correctly dated Auditors’ Opinion Letter.

In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, new certifications by the registrant’s principal executive officer and principal financial officer are being filed/furnished as exhibits to this Amendment No. 2 and we have updated Item 15(a)(3) of Part IV accordingly.

Except as expressly described above and as set forth herein, this Amendment No. 2 does not modify the Original Filing or Amendment No. 1 in any way, including, without limitation, to reflect events occurring after the date of, or update any of the disclosures included in, the Original Filing. Furthermore, this Amendment No. 2 does not change any previously reported financial results.  Accordingly, this Amendment No. 2 should be read in conjunction with Amendment No. 1 and the Original Filing included therewith and the Company’s other filings with the SEC.

TABLE OF CONTENTS

PART II
    
Item 8.
1
     
PART IV
    
     
Item 15.
20
     
21

PART II

Item 8.
Financial Statements and Supplementary Data.

Contents

2
   
Financial Statements
  
   
3
5
6
7
9

Report of Independent Registered Public Accounting Firm

To the Members and the Board of Directors
of Lincolnway Energy, LLC

Opinion on the Financial Statements
We have audited the accompanying balance sheets of Lincolnway Energy, LLC (the Company) as of September 30, 2020 and 2019, the related statements of operations, members’ equity and cash flows for each of the three years in the period ended September 30, 2020, and the related notes to the financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2020, in conformity with accounting principles generally accepted in the United States of America.
 
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ RSM US LLP

We have served as the Company’s auditor since 2006.

Des Moines, Iowa
December 23, 2020

Lincolnway Energy, LLC

Balance Sheets
September 30, 2020 and 2019
 
   
2020
    
2019
  
ASSETS
            
CURRENT ASSETS
            
Cash and cash equivalents
  
$
7,201,372
    
$
260,858
  
Derivative financial instruments (Notes 8 and 9)
    
300,476
      
188,694
  
Trade and other accounts receivable (Note 7)
    
4,602,150
      
3,259,768
  
Inventories (Note 3)
    
7,245,700
      
6,440,716
  
Prepaid expenses and other
    
304,244
      
308,184
  
Total current assets
    
19,653,942
      
10,458,220
  
                 
PROPERTY AND EQUIPMENT
                
Land and land improvements
    
7,156,465
      
7,156,465
  
Buildings and improvements
    
7,558,860
      
7,548,308
  
Plant and process equipment
    
86,274,048
      
86,110,958
  
Construction in progress
    
6,796,507
      
6,806,549
  
Office furniture and equipment
    
441,332
      
455,129
  
 
    
108,227,212
      
108,077,409
  
Accumulated depreciation
    
(70,352,374
)
    
(65,685,719
)
     
37,874,838
      
42,391,690
  
                 
OTHER ASSETS
                
Right of use asset operating lease, net of accumulated amortization (Note 7)
    
7,179,272
      
—
  
Other assets, net
    
1,102,850
      
864,082
  
     
8,282,122
      
864,082
  
   
$
65,810,902
    
$
53,713,992
  

See Notes to Financial Statements.

Lincolnway Energy, LLC

Balance Sheets (Continued)
September 30, 2020 and 2019

   
2020
    
2019
  
LIABILITIES AND MEMBERS’ EQUITY
            
CURRENT LIABILITIES
            
Accounts payable
  
$
1,858,459
    
$
1,794,431
  
Accounts payable, related party (Note 6)
    
439,424
      
375,394
  
Accrued loss on firm purchase commitments
    
—
      
67,591
  
Accrued expenses
    
713,462
      
776,385
  
Current maturities of long-term debt (Note 5)
    
505,700
      
25,000,000
  
Revolving credit loan (Note 4)
    
—
      
300,000
  
Current portion of operating lease liability (Note 7)
    
2,164,720
      
—
  
Total current liabilities
    
5,681,765
      
28,313,801
  
                 
NONCURRENT LIABILITIES
                
Long-term debt, less current maturities (Note 5)
    
21,700,000
      
—
  
Operating lease liability (Note 7)
    
5,014,552
      
—
  
Other
    
844,217
      
649,799
  
Total noncurrent liabilities
    
27,558,769
      
649,799
  
                 
COMMITMENTS AND CONTINGENCY (Notes 5 and 7)
    
—
      
—
  
                 
MEMBERS’ EQUITY (Note 2)
                
Member contributions, 105,122 and 42,049 units issued and outstanding as of September 30, 2020 and 2019, respectively
    
46,490,105
      
38,990,105
  
Retained (deficit)
    
(13,919,737
)
    
(14,239,713
)
     
32,570,368
      
24,750,392
  
   
$
65,810,902
    
$
53,713,992
  

Lincolnway Energy, LLC

Statements of Operations
Years Ended September 30, 2020, 2019 and 2018

   
2020
    
2019
    
2018
  
Revenues (Notes 1 and 7)
  
$
105,156,552
    
$
97,386,340
    
$
102,050,976
  
                         
Cost of goods sold (Notes 6 and 7)
    
101,072,011
      
105,075,962
      
102,333,910
  
                         
Gross profit (loss)
    
4,084,541
      
(7,689,622
)
    
(282,934
)
                         
General and administrative expenses
    
3,333,321
      
3,484,570
      
3,236,616
  
Bad debt expense
    
—
      
4,385,009
      
—
  
Operating income (loss)
    
751,220
      
(15,559,201
)
    
(3,519,550
)
                         
Other income (expense):
                        
Interest income
    
13,290
      
10,579
      
8,403
  
Interest expense
    
(1,125,048
)
    
(800,867
)
    
(19,390
)
Other income
    
680,514
      
3,100,683
      
583,322
  
Total other income (expense)
    
(431,244
)
    
2,310,395
      
572,335
  
                         
Net income (loss)
  
$
319,976
    
$
(13,248,806
)
  
$
(2,947,215
)
                         
Weighted average units outstanding
    
70,082
      
42,049
      
42,049
  
                         
Net income (loss)  per unit - basic and diluted
  
$
4.57
    
$
(315.08
)
  
$
(70.09
)

See Notes to Financial Statements.

Lincolnway Energy, LLC

Statements of Members’ Equity
Years Ended September 30, 2020, 2019 and 2018

   
Member Contributions
    
Retained Earnings (Deficit)
    
Total
  
Balance, September 30, 2017
  
$
38,990,105
    
$
3,007,533
    
$
41,997,638
  
Net income (loss)
    
—
      
(2,947,215
)
    
(2,947,215
)
Distributions ($25 per unit)
    
—
      
(1,051,225
)
    
(1,051,225
)
Balance, September 30, 2018
    
38,990,105
      
(990,907
)
    
37,999,198
  
Net (loss)
    
—
      
(13,248,806
)
    
(13,248,806
)
Balance, September 30, 2019
    
38,990,105
      
(14,239,713
)
    
24,750,392
  
Issuance of 63,073 membership units
    
7,500,000
      
—
      
7,500,000
  
Net income
    
—
      
319,976
      
319,976
  
Balance, September 30, 2020
  
$
46,490,105
    
$
(13,919,737
)
  
$
32,570,368
  

See Notes to Financial Statements.

Lincolnway Energy, LLC

Statements of Cash Flows
Years Ended September 30, 2020, 2019 and 2018
 
   
2020
    
2019
    
2018
  
CASH FLOWS FROM OPERATING ACTIVITIES
                  
Net income (loss)
  
$
319,976
    
$
(13,248,806
)
  
$
(2,947,215
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
                        
Depreciation and amortization
    
4,776,308
      
5,320,846
      
4,477,811
  
Loss on sale or disposal of property and equipment
    
—
      
232,981
      
43,693
  
Bad dept expense
    
—
      
4,385,009
      
—
  
Accrued loss on firm purchase commitments
    
(67,591
)
    
(298,577
)
    
366,168
  
Changes in working capital components:
                        
Trade and other accounts receivable
    
(1,342,382
)
    
(473,270
)
    
442,976
  
Inventories
    
(804,984
)
    
(1,884,013
)
    
1,128,026
  
Prepaid expenses and other
    
(40,410
)
    
64,812
      
108,963
  
Accounts payable
    
51,528
      
(558,535
)
    
(801,762
)
Accounts payable, related party
    
64,030
      
(281,739
)
    
14,407
  
Accrued expenses
    
(50,423
)
    
(195,782
)
    
(118,268
)
Deferred revenue
    
—
      
(296,296
)
    
(148,148
)
Derivative financial instruments
    
(111,782
)
    
366,433
      
(126,461
)
Net cash provided by operating (used in) activities
    
2,794,270
      
(6,866,937
)
    
2,440,190
  
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                        
Purchase of property and equipment
    
(270,023
)
    
(3,667,661
)
    
(13,611,022
)
Proceeds from sale of property and equipment
    
10,567
      
27,000
      
—
  
Net cash (used in) investing activities
    
(259,456
)
    
(3,640,661
)
    
(13,611,022
)
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                        
Member distributions
    
—
      
—
      
(1,051,225
)
Proceeds from issuance of membership units
    
7,500,000
      
—
      
—
  
Net proceeds/(payments) from/(to) revolving credit loan
    
(300,000
)
    
300,000
      
—
  
Proceeds from short-term borrowings
    
505,700
      
—
      
—
  
Payments on short-term borrowings
    
(25,000,000
)
    
—
      
—
  
Proceeds from long-term borrowings
    
27,000,000
      
68,250,000
      
69,550,000
  
Payments on long-term borrowings
    
(5,300,000
)
    
(58,450,000
)
    
(57,350,000
)
Net cash provided by financing activities
    
4,405,700
      
10,100,000
      
11,148,775
  
 
                        
Net increase (decrease) in cash and cash equivalents
    
6,940,514
      
(407,598
)
    
(22,057
)
                         
CASH AND CASH EQUIVALENTS
                        
Beginning
    
260,858
      
668,456
      
690,513
  
Ending
  
$
7,201,372
    
$
260,858
    
$
668,456
  

(Continued)

Lincolnway Energy, LLC

Statements of Cash Flows (Continued)
Years Ended September 30, 2020, 2019 and 2018

   
2020
    
2019
    
2018
  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
                  
Cash paid for interest, including capitalized interest of none, $304,947 and $515,242
  
$
1,169,512
    
$
1,190,553
    
$
535,402
  
                         
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES
                        
Construction in progress included in accounts payable
  
$
—
    
$
60,973
    
$
86,928
  
Establishment of lease liability and right of use asset
    
6,691,675
      
—
      
—
  

See Notes to  Financial Statements.

Lincolnway Energy, LLC

Notes to Financial Statements

Note 1.
Nature of Business and Significant Accounting Policies

Principal business activity:  Lincolnway Energy, LLC (the “Company”), located in Nevada, Iowa, was formed in May 2004 to pool investors to build a 50 million gallon annual production dry mill corn-based ethanol plant.  The Company began making sales on May 30, 2006 and became operational during the quarter ended June 30, 2006.  The Company is directly influenced by commodity markets and the agricultural and energy industries and, accordingly, its results of operations and financial condition may be significantly affected by cyclical market trends and the regulatory, political and economic conditions in these industries.

A summary of significant accounting policies follows:

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Risks and Uncertainties: The COVID-19 pandemic is currently impacting countries, communities, supply chains and commodities markets, in addition to the global financial markets.  This pandemic has resulted in social distancing, travel bans, governmental stay-at-home orders, and quarantines, and these may limit access to our facilities, customers, suppliers, management, support staff and professional advisors.  At this time it is not possible to fully assess the impact of the COVID-19 pandemic on the Company’s operations and capital requirements, but the aforementioned factors, among other things, may impact our operations, financial condition and demand for our products, as well as our overall ability to react timely and mitigate the impact of this event.  Depending on its severity and longevity, the COVID-19 pandemic may have a material adverse effect on our business, customers, and members.

Cash and cash equivalents:  The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Although the Company maintains its cash accounts in one bank, the Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

Trade accounts receivable:  Trade accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis.  Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering customers financial condition, credit history and current economic conditions.  Receivables are written off when deemed uncollectible.  Recoveries of receivables written off are recorded when received.  A receivable is considered past due if any portion of the receivable is outstanding more than 90 days.   There is no allowance for doubtful accounts as of both September 30, 2020 and September 30, 2019.

Note receivable:  On March 28, 2019, the Company recorded a note receivable totaling $4,080,000 for a component of the construction in progress (the dryer) that failed to meet required specifications.  The vendor issued a promissory note to the Company, which is personally guaranteed by principals of the vendor.  The full amount of the note receivable plus interest is currently due and payable.  During the year ended September 30, 2019, management determined based on communication from the vendor and lack of payment that the note receivable, including interest of $60,809, should be fully reserved at June 30, 2019.  Bad debt expense of $0, $4,385,009, and $0 was recorded during the years ended September 30, 2020, 2019, and 2018, respectively.

Deferred revenue: Deferred revenue represents fees received under a service agreement in advance of services being performed.  The related revenue was deferred and recognized as the services were performed over the 10 year agreement.  On December 17, 2018, the Company entered into a settlement agreement in connection with the early termination of the contract.  The settlement totaled approximately $3,000,000 and was included in other income and the remaining deferred revenue of approximately $420,000 was recognized during the year ended September 30, 2019.

Inventories:  Inventories are generally valued at the lower of net realizable value or actual cost using the first-in, first-out method.  In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation.  For the fiscal years ended September 30, 2020 and September 30, 2019 the Company recognized a reserve and resulting loss of approximately $0 and $76,000, respectively, for a lower of net realizable value or cost inventory adjustment.

Property and equipment:  Property and equipment is stated at cost.  Construction in progress is comprised of costs related to the projects that are not completed.  Depreciation is computed using the straight-line method over the following estimated useful lives:
 
   
Minimum Years
    
Maximum Years
  
Land improvements
          
20
  
Buildings and improvements
          
40
  
Plant and process equipment
    
5
      
20
  
Office furniture and equipment
    
3
      
7
  

Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized.  When circumstances or events arise that questions an asset’s usefulness, the asset is evaluated for future use and appropriate carrying value.

The Company evaluates the carrying value of long-lived tangible assets when events or changes in circumstances indicate that the carrying value may not be recoverable. Such events and circumstances include, but are not limited to, significant decreases in the market value of the asset, adverse changes in the extent or manner in which the asset is being used, significant changes in business climate, or current or projected cash flow losses associated with the use of the assets. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from such assets are separately identifiable and are less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. For long-lived assets to be held for use in future operations and for fixed (tangible) assets, fair value is determined primarily using either the projected cash flows discounted at a rate commensurate with the risk involved or an appraisal. For long-lived assets to be disposed of by sale or other than sale, fair value is determined in a similar manner, except that fair values are reduced for disposal costs.

Derivative financial instruments:  The Company periodically enters into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn needs, forward corn purchase contracts and ethanol sales.  The Company does not typically enter into derivative instruments other than for hedging purposes.  All the derivative contracts are recognized on the balance sheet at their fair market value.  Although the Company believes its derivative positions are economic hedges, none have been designated as a hedge for accounting purposes.   Accordingly, any realized or unrealized gain or loss related to corn and natural gas derivatives is recorded in the statement of operations as a component of cost of goods sold.  Any realized or unrealized gain or loss related to ethanol derivative instruments is recorded in the statement of operations as a component of revenue.  The Company reports all contracts with the same counter party on a net basis on the balance sheet.  Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales”, and therefore are not marked to market in the Company’s financial statements.  Forward contracts with delivery dates with 30 days that can be reasonably estimated are subject to a lower of cost or net realizable value assessment.  The Company recognized a reserve and resulting accrued loss on purchase commitments of approximately $0 and $67,591 as of September 30, 2020 and 2019, respectively.

Revenue recognition:  The Company adopted Accounting Standards Update (ASU) 2014-09,  Revenue from Contracts with Customers (Topic 606), October 1, 2019, using the modified retrospective method.  Topic 606 requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The Company generally recognized revenue at a point and time.  The implementation of the new standard did not result in any changes to the measurement or recognition of revenue for prior periods, however, additional disclosures have been added in accordance with the ASU.

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.

 •
sales of ethanol

•
sales of distillers grains

•
sales of corn oil

Shipping costs incurred by the Company in the sale of ethanol, distillers grains and corn oil are not specifically identifiable and as a result, are recorded based on the net selling price.  Railcar lease costs incurred by the Company in the sale of its products are included in the cost of goods sold.

Revenue from the sale of the Company’s ethanol and distillers grains is recognized at the time title, control and all risks of ownership transfer to the marketing company.  This generally occurs upon the loading of the product.  For ethanol, title and control passes at the time the product crosses the loading flange in either a railcar or truck.  For distillers grain, title and control passes upon the loading into trucks or railcars.    Corn oil is marketed internally.  Revenue is recognized when title and control of ownership transfers, upon loading.  Shipping and handling costs incurred by the Company for the sale of  distillers grain are included in costs of goods sold. Ethanol revenue is reported free on board (FOB) and all shipping and handling costs are incurred by the ethanol marketer.   Commissions for the marketing and sale of ethanol and distiller grains are included in costs of goods sold.

Revenue by product is as follows:
 
(In thousands)
2020
    
2019
    
2018
  
Ethanol
  
$
80,106
    
$
75,224
    
$
77,709
  
Distillers Grain
    
19,196
      
15,329
      
16,821
  
Corn Oil
    
4,616
      
5,487
      
5,545
  
Other
    
1,238
      
1,346
      
1,975
  

Income taxes:  The Company is organized as a partnership for federal and state income tax purposes and generally does not incur income taxes.  Instead, the Company’s earnings and losses are included in the income tax returns of the members.  Therefore, no provision or liability for federal or state income taxes has been included in these financial statements.  Management has evaluated the Company’s material tax positions and determined there were no uncertain tax positions that require adjustment to the financial statements.  The Company does not currently anticipate significant changes in its uncertain tax positions over the next twelve months.

Earnings per unit:  Basic and diluted net income (loss) per unit have been computed on the basis of the weighted average number of units outstanding during each period presented.  On March 31, 2020, 42,049 new Class A Units were issued, which Class A Units are a separate class of unit than the units issued to existing members which have been renamed “Common Units”. On May 28, 2020, the Company issued an additional 14,037 Class A Units and 6,987 new Class B Units. The combined issuance of Class A Units is 56,086 units and the total issuance of Class B Units is 6,987 units. There are also 42,049 Common Units outstanding for an aggregate number of 105,122 units outstanding comprised of Class A Units, Class B Units and Common Units. The weighted average number of units is based on days outstanding for the reporting period. The Class A Units and Class B Units have a liquidation preference which provides that in the event of a liquidation or deemed liquidation, the Class A and Class B members will receive the return of their capital contributions, reduced by the amount of distributions received, prior to the holders of Common Units receiving any proceeds.

Fair value of financial instruments:  The carrying amounts of cash and cash equivalents, derivative financial instruments, trade  and other accounts receivable, accounts payable and accrued expenses approximate fair value.    These instruments are considered Level 1 measurements under the fair value hierarchy.  Long term debt approximates fair value and commensurate with the market as the agreement was recently amended in the current year.  The inputs for long term debt are considered a Level 3.

Recently Issued Accounting Pronouncements: In February 2016, Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-02 “Leases” (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous Generally Accepted Accounting Principles (“GAAP”). ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases): (1) a lease liability, which is a lessee’s obligation to make lease payments arising from the lease, measured on a discounted cash flow basis; and (2) a “right of use” asset, which is an asset that represents the lessee’s right to use the specified asset for the lease term. The Company adopted this accounting standard effective October 1, 2019. Upon adoption, the Company elected a practical expedient which allows existing leases to retain their classification as operating leases. Additionally, the Company has elected to account for lease and related non-lease components as a single lease component. The Company elected the option to apply the transition provisions at adoption date instead of the earliest comparative period presented in the financial statements. Due to this election, the Company is not required to retrospectively apply the standard to the previous periods presented. See additional disclosure in Note 7.
 
Note 2.
Members’ Equity

As of September 30, 2020 and 2019 there were 105,122 and 42,049 outstanding member units, respectively as indicated in the following table.

   
2020
    
2019
    
2018
  
Class A Units
    
56,086
      
—
      
—
  
Class B Units
    
6,987
      
—
      
—
  
Common Units
    
42,049
      
42,049
      
42,049
  
Total
    
105,122
      
42,049
      
42,049
  

Income and losses are allocated to all members based on their pro rata ownership interest. All unit transfers are effective the last day of the month.  Units may be issued or transferred only to persons eligible to be members of the Company and only in compliance with the provisions of the Company’s operating agreement and unit assignment policy.

The Company is organized as an Iowa limited liability company.  Members’ liability is limited as specified in the Company’s operating agreement and pursuant to the Iowa Limited Liability Company Act.  The duration of the Company shall be perpetual unless dissolved as provided in the operating agreement.

Note 3.
Inventories

Inventories consist of the following as of September 30:
 
   
2020
    
2019
  
Raw materials, including corn, chemicals, parts and supplies
  
$
5,292,339
    
$
4,902,526
  
Work in process
    
653,680
      
900,459
  
Ethanol and distillers grain
    
1,299,681
      
637,731
  
Total
  
$
7,245,700
    
$
6,440,716
  

Note 4.
Revolving Credit Loan

The Company entered into a Revolving Credit Promissory Note dated June 23, 2019 which provides for loans not to exceed $4,000,000 at any time. The loan originally matured on January 1, 2020 but the Company received an extension on December 24, 2019 extending the maturity date to June 1, 2020. Effective as of May 29, 2020, the Company and the bank amended the revolving credit loan to extend the maturity date of the revolving credit loan until January 1, 2021. Interest accrues at a variable interest rate (adjusted on a weekly basis)  based upon the one-month LIBOR index rate plus 3.75% (3.90% as of September 30, 2020).

The Company will also pay a commitment fee on the average daily unused portion of the loan at the rate of .25% per annum, payable monthly.  The loan is secured by substantially all assets of the Company and subject to certain financial and nonfinancial covenants as defined in the master loan agreement.  There was an outstanding balance of $0 and $300,000 on the revolving credit loan as of September 30, 2020 and 2019, respectively.

Note 5.
Long-Term Debt

The Company has a revolving term loan, with a bank, available for up to $25,000,000.  Effective May 29, 2020, the Company and the bank amended the revolving term loan to modify the step-down reduction of available borrowing capacity to defer the initial step-down reduction of $5,000,000 originally scheduled for October 20, 2020 to October 20, 2021. As amended, available borrowings will be reduced by $5,000,000 each year starting October 20, 2021 until October 1, 2024 when the term loan matures.  The Company will pay interest on the unpaid balance at a variable interest rate (adjusted on a weekly basis) based upon the one-month LIBOR index rate plus 3.75% (3.90% as of September 30, 2020).  The Company will also pay a commitment fee on the average daily unused portion of the loan at the rate of 0.50% per annum, payable monthly.  The loan is secured by substantially all assets of the Company and subject to certain financial and nonfinancial covenants as defined in the master loan agreement.   At September 30, 2020 and 2019 the outstanding balance on the revolving term loan was $21,700,000 and $25,000,000, respectively.

As noted above, the Company and the bank amended the revolving term loan to defer the initial step-down reduction of available borrowing capacity so that the new maximum commitment amount reduction schedule is as follows:

Maximum Commitment Amount
From
Up to and Including
$20,000,000
October 20, 2021
October 19, 2022
$15,000,000
October 20, 2022
October 19, 2023
$10,000,000
October 20, 2023
October 1, 2024

In connection with the revolving term loan, the Company entered into an Amended and Restated Letter of Credit Promissory Note.  The maximum amount of the letter of credit commitment is $1,307,525.  As of September 30, 2020 and 2019, the outstanding amount available to the Company under the Restated Letter of Credit Note was $1,307,525 and $1,518,450, respectively.

The payment of distributions is also subject to the Company’s compliance with the various covenants and requirements of the Company’s credit and loan agreements, and it is possible that those covenants and requirements will at times prevent the Company from paying a distribution to its members if the Company fails to meet certain financial metrics or is in default under the provisions of the credit and loan agreements. During the 2019 fiscal year the Company was not in compliance with certain financial covenants under its master credit agreement and therefore the debt under this credit agreement was classified as current liability as of September 30, 2019.  During the 2020 fiscal year the Company received cash for the issuance of additional units and amended master credit agreements with the bank. Due to this and improved operating margins, the Company is in compliance with financial covenants as of September 30, 2020 and is expected to stay in compliance for the next 12 months.

On April 13, 2020, the Company received a loan in the amount of $505,700 under the new Paycheck Protection Program (the “PPP Loan”) legislation administered by the U.S. Small Business Administration. The PPP Loan may be forgiven based upon various factors, including, without limitation, our payroll cost and certain other approved expenses over an eight to twenty-four week period starting upon our receipt of the funds. Expenses for payroll costs, lease payments on agreements before February 15, 2020, utility payments under agreements before February 1, 2020 and certain other specified costs can be utilized from these funds and eligible for payment forgiveness by the federal government. At least 60% of the proceeds must be used for approved payroll costs, and no more than 40% on non-payroll expenses. Management believes our use of our PPP Loan proceeds for the approved expense categories will generally be fully forgiven if we satisfy certain employee headcount and compensation conditions. The PPP loan has a maturity date of April 13, 2022 and management currently believes this loan will be forgiven before maturity. The stated interest rate on this loan is 1% if not forgiven.

Note 6.
Related-Party Transactions

 The Company had the following related-party activity with members as of or during the year ending September 30:
 
     
2020
    
2019
    
2018
  
Member A
Corn purchased for fiscal year
  
$
9,906,905
    
$
8,626,906
    
$
17,960,954
  
 
Corn forward purchase commitment
  
$
140,348
    
$
—
    
$
6,647
  
 
Basis corn commitment - bushels
    
800,000
      
80,000
      
400,000
  
 
Miscellaneous purchases
  
$
—
    
$
1,617
    
$
2,579
  
 
Amount due at fiscal year end
  
$
198,557
    
$
2,707
    
$
65,387
  
                           
Member B
Corn purchased for fiscal year
  
$
21,712,272
    
$
12,527,197
    
$
11,818,241
  
 
Corn forward purchase commitment
  
$
115,714
    
$
376,000
    
$
14,103
  
 
Basis corn commitment - bushels
    
—
      
—
      
150,000
  
 
Amount due at fiscal year end
  
$
162,225
    
$
52,486
    
$
98,179
  
                           
Member C
Corn purchased for fiscal year
  
$
5,412,716
    
$
14,400,120
    
$
5,146,781
  
 
Corn forward purchase commitment
  
$
69,200
    
$
22,080
    
$
34,366
  
 
Basis corn commitment - bushels
    
—
      
—
      
205,000
  
 
Amount due at fiscal year end
  
$
—
    
$
37,652
    
$
234,238
  
                           
Other Members
Corn purchased for fiscal year
  
$
17,419,742
    
$
9,070,359
    
$
7,614,288
  
 
Corn forward purchase commitment
  
$
122,748
    
$
1,822,111
    
$
1,761,514
  
 
Amount due at fiscal year end
  
$
67,635
    
$
132,737
    
$
259,329
  

On January 15, 2020, the Company entered into a Management Services Agreement with Husker Ag, LLC (“Husker Ag”) for management services pertaining to the Company’s ethanol facility. Effective April 1, 2020, the Company entered into an Amended and Restated Management Services Agreement (the “Management Agreement”) with HALE, LLC, an affiliate of Husker Ag (“HALE”), which replaced and superseded the original Management Services Agreement between the Company and Husker Ag. Pursuant to the terms of the Management Agreement, HALE now provides management services to the Company’s ethanol facility, including providing the Company with individuals to (a) serve as General Manager, Environmental and Safety Manager, Commodity Risk Manager, and to fill such other positions as may be necessary from time to time; and (b) perform the respective management services for each such position. For the year ended September 30, 2020, 2019 and 2018 Lincolnway Energy incurred expenses of $432,717, $0 and $0 respectively, due to Husker Ag LLC for services and out-of-pocket travel expenses. At September 30, 2020 and 2019 $2,096  and $0 was included in accrued expenses on the balance sheet, respectively.

Effective March 31, 2020, the Company and HALE entered into a Preferred Membership Unit Purchase Agreement (the “MUPA”) pursuant to which HALE purchased 42,049 new Class A Units of the Company for an aggregate price of $5,000,000. Effective on May 28, 2020, in accordance with the terms of the MUPA, HALE purchased an additional 14,037 Class A Units for an aggregate price of $1,669,176. As a result, HALE holds a total of 56,086 new Class A Units. In connection with the investment by HALE in the Company and pursuant to the terms of the MUPA and the Company’s current operating agreement, HALE has the right to appoint four of the Company’s seven directors (the “Class A Directors”). The Class A Directors serve until they resign or HALE removes them. The remaining three directors are elected by the members holding Common Units and Class B Units.

The Company entered into a management services agreement with Flag Leaf Financial Management, Inc. (“Flag Leaf”) during July 2019. Pursuant to the agreement, the Company incurred expense of $175,338, $45,544 and $0, respectively for the years ending September 30, 2020, 2019 and 2018.  At September 30, 2020 and 2019 there was $8,910 and $10,581 respectively, included as accrued expenses on the balance sheet.  LKPK Holdings, LLC (“LKPK”) purchased 165 Class B units during May 2020.  LKPK is owned 100% by Flag Leaf.

Note 7.
Commitments and Major Customers

The Company has an agreement with an unrelated entity for marketing, selling and distributing all of the ethanol produced by the Company.  Revenues with this customer were approximately $80,097,000, $75,203,000, and $77,736,000 for the years ended September 30, 2020, 2019 and 2018, respectively. Trade accounts receivable of  approximately $3,255,000 and $2,447,000 was due from the customer as of  September 30, 2020 and 2019, respectively. As of September 30, 2020, the Company has ethanol sales commitments with the unrelated entity of 14.4 million unpriced gallons through December 2021.

The Company also has an agreement with an unrelated entity for marketing, selling and distributing the distillers grains.  Revenues with this customer, including both distillers grains and corn oil, were $19,196,000, $15,329,000 and $16,933,000 for the years ended September 30, 2020, 2019 and 2018 , respectively. Trade accounts receivable of $685,000 and $541,000 was due from the customer as of September 30, 2020 and 2019, respectively.  The Company has distillers grain sales commitments with the unrelated entity of  approximately 16,000 tons for a total sales commitment of approximately $2 million less marketing fees through December 2021.

As of  September 30, 2020, the Company had approximate purchase commitments for corn cash forward contracts with various unrelated parties, totaling $1,292,000, representing 384,000 bushels.  These contracts mature at various dates through January 2021.  The Company did not have any basis contract purchase commitments with unrelated parties as of September 30, 2020.

The Company has an agreement with an unrelated party for the transportation of natural gas to the Company’s ethanol plant.   Under the agreement, the Company committed to future monthly fees totaling approximately $3.6 million over the 10 year term, commencing November 2014.  On June 2, 2016, the Company assigned an irrevocable standby letter of credit to the counter-party to stand as security for the Company’s obligation under the agreement.   The letter of credit will be reduced over time as the Company makes payments under the agreement.  On July 3, 2017, in conjunction with the amended revolving credit loan agreement, the Company amended the letter of credit and extended the maturity to May 2021.  At September 30, 2020, the remaining commitment was approximately $1.2 million.

As of September 30, 2020, the Company had purchase commitments for natural gas forward contracts with an unrelated party for a total commitment of approximately $138,000.  The Company had purchase commitments for natural gas basis contracts with an unrelated party totaling approximately 82,000 MMBtu’s.  These contracts mature at various dates through October 2020.

Effective October 1, 2019, the Company adopted ASU 2016-02 regarding Leases. The Company elected the short-term lease exception provided for in the standard and therefore only recognized right-of-use assets and lease liabilities for leases with a term greater than one year.

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 recognized a lease liability equal to the present value of future lease payments based on an estimated interest rate commensurate with the rate the Company would pay to borrow equivalent funds. A lease asset was recognized based on the lease liability value and adjusted for any prepaid lease payments or lease incentives. 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 railcars and is obligated to pay costs of insurance, taxes, repairs and maintenance pursuant to the terms of the leases.  Rent expense for the operating leases during the year ended September 30, 2020, 2019 and 2018 was approximately $2,157,528, $2,102,000 and $2,156,000, respectively. The lease agreements have maturity dates ranging from June 2021 to September 2025.

The discount rate used in determining the lease liability ranged from 3.68% to 6.23% and was determined by incremental borrowing rates at the time the lease commenced. The right of use asset and liability at September 30, 2020 was approximately $7,179,000.

At September 30, 2020, the Company had the following approximately future minimum rental commitments through September 30 of each year:

2021
  
$
2,272,104
  
2022
    
1,999,704
  
2023
    
1,704,210
  
2024
    
1,399,875
  
2025
    
707,750
  
Thereafter
    
174,000
  
Total
  
$
8,257,643
  

A reconciliation of undiscounted future payments in the schedule above and the lease liability recognized in the balance sheet as of September 30, 2020 is shown below:

Undiscounted future payments
  
$
8,257,643
  
Discount effect
    
1,078,371
  
Total
  
$
7,179,272
  

Note 8.
Risk Management

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 commodity markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results.

The Company maintains a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market fluctuations.  The Company’s specific goal is to protect the Company from large moves in the commodity costs.

To reduce price risk caused by market fluctuations, the Company generally follows a policy of using exchange-traded futures and options contracts to minimize its net position of merchandisable agricultural commodity inventories and forward purchases and sales contracts.

Exchange traded futures and options contracts are designated as non-hedge derivatives and are valued at market price with changes in market price recorded in operating income through cost of goods sold for corn and natural gas derivatives and through revenue for ethanol derivatives.

Derivatives not designated as hedging instruments as of September 30 are as follows:

   
2020
    
2019
  
Derivative assets - corn contracts
  
$
675
    
$
531,875
  
Derivative assets - ethanol contracts
    
33,107
      
—
  
Derivative liabilities - corn contracts
    
(243,825
)
    
(93,650
)
Derivative liabilities - ethanol contracts
    
(93,335
)
    
—
  
Cash due from (due to) broker
    
603,854
      
(249,531
)
Total
  
$
300,476
    
$
188,694
  

The effects on operating income from derivative activities for the years ending September 30, are as follows:
 
   
2020
    
2019
    
2018
  
Gains (losses) in revenue due to derivatives related to ethanol sales:
                  
Realized gain (loss)
  
$
69,624
    
$
21,525
    
$
(26,649
)
Unrealized (loss)
    
(60,228
)
    
—
      
—
  
Total effect on revenues
    
9,396
      
21,525
      
(26,649
)
                         
Gains (losses) in cost of goods sold due to derivatives related to corn costs:
                        
Realized gain
    
1,587,758
      
1,014,033
      
1,332,317
  
Unrealized gain (loss)
    
(878,500
)
    
(359,450
)
    
325,878
  
Total effect on corn costs
    
709,258
      
654,583
      
1,658,195
  
                         
Gains (losses) in cost of goods sold due to derivatives related to natural gas costs:
                        
Realized gain
    
—
      
13,660
      
65,769
  
Unrealized gain
    
—
      
3,460
      
3,940
  
Total effect on natural gas costs
    
—
      
17,120
      
69,709
  
Total effect on cost of goods sold
  
$
709,258
    
$
671,703
    
$
1,727,904
  
Total gain to operating income due to derivative activities
  
$
718,654
     $
693,228
    
$
1,701,255
  

Note 9.
Fair Value Measurements

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.  These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value.

Derivative financial instruments:  Commodity futures and exchange-traded commodity options contracts are reported at fair value utilizing Level 1 inputs.  For these contracts, the Company obtains fair value measurements from an independent pricing service.  The fair value measurements consider observable data that may include dealer quotes and live trading levels from the CME and NYMEX markets.  The fair value measurements consider observable data that may include dealer quotes and live trading levels from the over-the-counter markets.

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and 2019, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

 
2020
  
 
Total
  
Level 1
  
Level 2
  
Level 3
  
Assets, derivative financial instruments
  
$
33,782
    
$
33,782
    
$
—
    
$
—
  
Liabilities, derivative financial instruments
  
$
(337,160
)
  
$
(337,160
)
  
$
—
    
$
—
  

 
2019
  
 
Total
  
Level 1
  
Level 2
  
Level 3
  
Assets, derivative financial instruments
  
$
531,875
    
$
531,875
    
$
—
    
$
—
  
Liabilities, derivative financial instruments
  
$
(93,650
)
  
$
(93,650
)
  
$
—
    
$
—
  

Note 10.
Employee Benefit Plan

The Company adopted a 401(k) plan covering substantially all employees.  The Company provides matching contributions of 50% for up to 6% of employee compensation.  Company contributions and plan expenses for the years ended September 30, 2020, 2019 and 2018 totaled $40,395, $54,670 and $58,112, respectively.

Note 11.
Quarterly Financial Data (Unaudited)

The following table presents summarized quarterly financial data for the years ended September 30, 2020 and 2019.

   
12/31/2019
    
3/31/2020
    
6/30/2020
    
9/30/2020
  
Revenue
  
$
29,002,735
    
$
24,376,894
    
$
20,136,749
    
$
31,640,174
  
Gross profit (loss)
    
1,109,377
      
(2,087,314
)
    
1,320,605
      
3,741,873
  
Operating income (loss)
    
298,839
      
(3,041,935
)
    
554,526
      
2,939,790
  
Net income (loss)
    
(24,218
)
    
(3,129,698
)
    
303,248
      
3,170,644
  
Basic & diluted earnings (loss) per unit
    
(0.58
)
    
(73.64
)
    
3.30
      
30.16
  

   
12/31/2018
    
3/31/2019
    
6/30/2019
    
9/30/2019
  
Revenue
  
$
20,371,692
    
$
24,333,321
    
$
26,488,313
    
$
26,193,014
  
Gross (loss)
    
(3,923,425
)
    
(571,870
)
    
(1,649,179
)
    
(1,545,148
)
Operating (loss)
    
(4,784,408
)
    
(1,455,824
)
    
(7,062,296
)
    
(2,256,673
)
Net (loss)
    
(1,836,126
)
    
(1,430,642
)
    
(7,394,842
)
    
(2,587,196
)
Basic & diluted (loss) per unit
    
(43.67
)
    
(34.03
)
    
(175.87
)
    
(61.53
)

PART IV
 
Item 15.
Exhibits and Financial Statement Schedules.
 
(a)(1)
Financial Statements
 
The financial statements are set forth in Item 8 of this annual report.

(a)(2)
Financial Statement Schedules.

Financial statement schedules have been omitted because they are not required or are not applicable, or the information is otherwise included in this annual report.

(a)(3)
Exhibits.

The following exhibits are filed herewith, furnished or incorporated by reference as set forth below:

Exhibit No.
  
Description of Exhibit
 
Certification of Principal Executive Officer, pursuant to Rule 13a‑14(a)/15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
 
Certification of Principal Financial Officer, pursuant to Rule 13a‑14(a)/15d‑14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
 
Certification of Principal Executive Officer, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).
 
Certification of Principal Financial Officer, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).

*
This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference

SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

January 8, 2021
/s/ Seth Harder
 
Seth Harder, President and Chief Executive Officer (Principal Executive Officer)
   
January 8, 2021
/s/ Jeff Kistner
 
Jeff Kistner, Interim Chief Financial Officer (Principal Financial Officer)
 

21

Lincolnway Energy, LLC Reports