UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended	April 30, 2021
	OR
o	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:	000-51177

GOLDEN GRAIN ENERGY, LLC

(Exact name of registrant as specified in its charter)

Iowa	02-0575361
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1822 43rd Street SW, Mason City, IA 50401

(Address of principal executive offices)

(641) 423-8525

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

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.

x Yes     o 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

x Yes     o No

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	o	Accelerated Filer	o
Non-Accelerated Filer	x	Smaller Reporting Company	o
		Emerging Growth Company	o

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.

o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes     x No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 

As of June 11, 2021, there were 18,953,000 Class A membership units outstanding and 920,000 Class B membership units outstanding.

1

INDEX

	Page Number
PART I	4
Item 1. Financial Statements	4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	27
Item 4. Controls and Procedures	28
PART II	28
Item 1. Legal Proceedings	28
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3. Defaults Upon Senior Securities	29
Item 4. Mine Safety Disclosures	29
Item 5. Other Information	29
Item 6. Exhibits	29
SIGNATURES	30

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GOLDEN GRAIN ENERGY, LLC

Balance Sheets

ASSETS	April 30, 2021		October 31, 2020
	(Unaudited)
Current Assets
Cash and equivalents	$	7,112,501	$	17,582,312
Marketable securities	1,317,398		5,113,066
Accounts receivable	4,488,197		7,326,519
Other receivables	160,329		191,768
Derivative instruments	875,597		862,516
Inventory	14,709,445		8,346,764
Prepaid expenses and other	3,396,837		2,999,162
Total current assets	32,060,304		42,422,107
Property and Equipment
Land and land improvements	14,319,210		14,319,211
Building and grounds	33,719,636		33,719,636
Grain handling equipment	16,097,244		16,084,232
Office equipment	2,457,090		2,457,090
Plant and process equipment	123,455,866		122,038,667
Construction in progress	10,183,996		3,189,865
	200,233,042		191,808,701
Less accumulated depreciation	128,620,689		124,390,850
Net property and equipment	71,612,353		67,417,851
Other Assets
Investments	25,020,234		25,019,870
Right of use assets from operating leases	2,313,532		2,324,631
Other assets	1,885,550		1,904,482
Total other assets	29,219,316		29,248,983
Total Assets	$	132,891,973	$	139,088,941

Notes to the Financial Statements are an integral part of these Statements.

3

GOLDEN GRAIN ENERGY, LLC

Balance Sheets

LIABILITIES AND MEMBERS' EQUITY	April 30, 2021		October 31, 2020
	(Unaudited)
Current Liabilities
Accounts payable	$	6,422,686	$	6,798,427
Accrued expenses	3,125,299		2,930,479
Retainage payable	151,673		34,813
Current portion of long-term debt	419,271		430,250
Current portion operating lease liabilities	945,856		1,000,141
Total current liabilities	11,064,785		11,194,110
Long-term Liabilities
Deferred compensation	662,836		514,409
Operating lease liabilities, net of current portion	1,367,676		1,324,490
Long-term debt, net of current maturities	419,270		430,250
Other long-term liabilities	1,254,814		1,313,177
Total long-term liabilities	3,704,596		3,582,326
Commitments and Contingencies
Members' Equity (19,873,000 units issued and outstanding)	118,122,592		124,312,505
Total Liabilities and Members’ Equity	$	132,891,973	$	139,088,941

Notes to the Financial Statements are an integral part of these Statements.

4

GOLDEN GRAIN ENERGY, LLC

Statements of Operations (Unaudited)

	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	April 30, 2021		April 30, 2020		April 30, 2021		April 30, 2020
Revenues	$	59,659,528	$	35,154,653	$	113,104,185	$	92,586,855
Cost of Goods Sold	58,425,094		41,862,136		117,313,416		96,688,473
Gross Profit (Loss)	1,234,434		(6,707,483)		(4,209,231)		(4,101,618)
Operating Expenses	1,225,996		1,022,045		2,434,213		2,296,007
Operating Income (Loss)	8,438		(7,729,528)		(6,643,444)		(6,397,625)
Other Income (Expense)
Other income	(55,540)		364,523		236,508		372,970
Interest income (expense), net	(50,489)		28,242		(103,224)		86,840
Gain on Debt Extinguishment	—		—		860,500		—
Equity in net income of investments	874,866		(480,645)		3,434,347		1,534,625
Total Other Income (Loss)	768,837		(87,880)		4,428,131		1,994,435
Net Income (Loss)	$	777,275	$	(7,817,408)	$	(2,215,313)	$	(4,403,190)
Basic & diluted net income (loss) per unit	$	0.04	$	(0.39)	$	(0.11)	$	(0.22)
Weighted average units outstanding for the calculation of basic & diluted net income (loss) per unit	19,873,000		19,873,000		19,873,000		19,873,000
Distributions Per Unit for Class A & B	$	—	$	0.10	$	0.20	$	0.10

Notes to the Financial Statements are an integral part of these Statements.

5

GOLDEN GRAIN ENERGY, LLC

Statements of Changes in Members' Equity (Unaudited)

	Members' Equity
Balance - October 31, 2019	$	120,421,143
Net income for the three-month period ended January 31, 2020	3,414,218
Balance - January 31, 2020	123,835,361
Net loss for the three-month period ended April 30, 2020	(7,817,408)
Member distributions	(1,987,300)
Balance - April 30, 2020	$	114,030,653
	Members' Equity
Balance - October 31, 2020	$	124,312,505
Net (loss) for the three-month period ended January 31, 2021	(2,992,588)
Member distributions	(3,974,600)
Balance - January 31, 2021	117,345,317
Net income for the three-month period ended April 30, 2021	777,275
Balance - April 30, 2021	118,122,592

Notes to Financial Statements are an integral part of this Statement.

6

GOLDEN GRAIN ENERGY, LLC

Statements of Cash Flows (Unaudited)

	Six Months Ended		Six Months Ended
	April 30, 2021		April 30, 2020
Cash Flows from Operating Activities
Net loss	$	(2,215,313)	$	(4,403,190)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	4,266,866		4,438,899
Unrealized gain on securities	(217,413)		552,906
Gain on sale of property & equipment	—		(334,359)
Amortization of deferred revenue	148,427		—
Amortization of debt issuance costs	16,667		—
Accretion of interest on grant & note receivable	(104,224)		(17,323)
Distributions in excess of earnings from investments	(364)		1,804,467
Gain on extinguishment of long-term debt	(860,500)		—
Proceeds from insurance claims and business interruption	—		(34,965)
Change in assets and liabilities
Accounts receivable	2,838,322		1,389,846
Inventory	(6,362,681)		1,878,575
Prepaid expenses and other	(366,236)		(545,769)
Accounts payable	(1,244,369)		(864,832)
Accrued expenses	1,136,203		(41,162)
Operating Lease Liabilities	11,099		—
Net cash (used in) provided by operating activities	(2,953,516)		3,823,093
Cash Flows from Investing Activities
Capital expenditures	(8,380,236)		(3,256,774)
Purchase of marketable securities	—		(2,000,000)
Proceeds from sale of marketable securities	4,000,000		—
Proceeds on sale of property & equipment	—		334,359
Net cash used in investing activities	(4,380,236)		(4,922,415)
Cash Flows from Financing Activities
(Decrease) in outstanding checks in excess of bank balance
Proceeds from long-term debt	838,541		860,500
Distributions to members	(3,974,600)		(1,987,300)
Payments received on insurance claim receivable	—		34,965
Net cash used in financing activities	(3,136,059)		(1,091,835)
Net Decrease in Cash and Equivalents	(10,469,811)		(2,191,157)
Cash and Equivalents – Beginning of Period	17,582,312		15,937,266
Cash and Equivalents – End of Period	$	7,112,501	$	13,746,109
Supplemental Cash Flow Information
Cash paid for interest	$	135,539	$	25,572
Supplemental Disclosure of Noncash Operating, Investing & Financing Activities
Accounts payable related to construction in progress	$	1,756,598	$	245,703
Deferred revenue received through grant receivable	1,486,871		1,400,722
Initial Right-of-use asset and liability recorded	—		2,889,785

Notes to the Financial Statements are an integral part of these Statements.

7

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and notes 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 October 31, 2020, contained in the Company's annual report on Form 10-K for the year ended October 31, 2020.

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.

Nature of Business

Golden Grain Energy, LLC ("Golden Grain Energy" and "the Company") is an approximately 120 million gallon annual production ethanol plant near Mason City, Iowa. The Company sells its production of ethanol, distiller grains with solubles and corn oil primarily in the continental United States. The Company also holds several investments in various companies that focus on ethanol production, marketing and/or logistics.

Organization

Golden Grain Energy is organized as an Iowa limited liability company.  The members' liability is limited as specified in Golden Grain Energy's operating agreement and pursuant to the Iowa Revised Uniform Limited Liability Company Act. 

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Cash and Equivalents

The Company's cash balances are maintained in bank depositories and regularly exceed federally insured limits. The Company has not experienced any losses in connection with these balances. Also included in cash and 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 a maturity of three months or less.

Marketable Securities

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short term or long term on the balance sheet, based on contractual maturity date and are stated at cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings.

Marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds. For the periods ended April 30, 2021 and 2020, there was no other-than-temporary impairment recognized. Mutual funds are considered trading securities which are measured at fair value using prices obtained from pricing services. Any unrealized or realized gains and losses on the trading securities are recorded as part of other income. The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows:

8

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

	Three Months Ended April 30,				Six Months Ended April 30,
	2021		2020		2021		2020
Net earnings (losses) on marketable securities	$	(56,000)	$	(13,000)	$	56,000	$	(5,000)
	Marketable Securities
As of	Cost		Fair Market Value
April 30, 2021	$	1,013,000	$	1,317,000
October 31, 2020	$	4,835,000	$	5,113,000

Accounts Receivable

Credit sales are made primarily to one customer, 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.

Investments

The Company has less than a 20% investment interest in five companies in related industries. These investments are being accounted for by the equity method of accounting 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. Distributions or dividends received from the investments are treated as a reduction of the investment account. Distributions or dividends received in excess of the carrying value are recognized as income in the statement of operations. The investments are 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 fiscal years of Renewable Products Marketing Group, LLC ("RPMG") and Guardian Energy Janesville, LLC end on September 30 and the fiscal years of Absolute Energy, LLC, Homeland Energy Solutions, LLC and Lawrenceville Tank, LLC, end on December 31. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data. Therefore, the net income which is reported in the Company's statement of operations for the period ended April 30, 2021, for all investees, is based on the investees' results for the three and six months ended March 31, 2020.

Revenue and Cost Recognition

The Company records revenue in accordance with ASC Topic 606. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The Company has adopted the practical expedient related to the financing component of the contract. The Company applies the five-step method outlined in the guidance to all contracts with customers. The Company generally has a single performance obligation in its arrangements with 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 fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. The Company expenses contract costs when incurred because the amortization period is less than one year.

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. The principal activities from which we generate revenue include: sales of ethanol, sales of distiller grains and sales of corn oil.

All revenue recognized in the income statement 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, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs incurred by the Company in the sale and shipment of distiller grain products are included in cost of goods sold.

Based upon the timing of the transfer of control of our products to our customers, there were no contract assets or liabilities as of April 30, 2021.

9

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

Inventory

Inventories are generally valued at the lower of weighted average cost 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 reasonable predictable costs of completion, disposal and transportation.

Grant Receivable and Deferred Revenue

Grant receivables are recorded when the payments to be received can be estimated and when payment is reasonably assured. The Company recorded a grant receivable and corresponding deferred revenue of approximately $1,486,000 associated with an agreement approved in December 2019 for tax increment financing monies associated with the plant expansion that was completed in January 2020 to be received over a 10-year period for the tax increment financing monies. These grants were recorded at their net present value using a discount rate of approximately 5%. Related deferred revenue was recorded and is being amortized into income as a reduction of property taxes over the life of the grant. As of April 30, 2021 the grant receivable was approximately $1,486,000 and was included in long-term other assets and the long-term portions of deferred revenue was approximately $1,486,000.

Property & Equipment

Property and equipment are stated at historical cost. Significant additions and betterments are capitalized, while expenditures for maintenance and repairs are charged to operations when incurred. The Company uses the straight-line method of computing depreciation over the estimated useful lives between 3 and 40 years.

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 a long-lived asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an 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.

Income Taxes

The Company was formed under sections of the federal and state income tax laws which provide that, in lieu of corporate income taxes, the members separately account for their pro rata share of the Company’s items of income, deductions, losses and credits. As a result of this election, no income taxes have been recognized in the accompanying financial statements. The company is currently under a State of Iowa income tax examination. The Company received a letter in April 2021 that indicates the Iowa Department of Revenue has adjusted the Corporate tax return for 2017 and the Company will be issued an assessment for approximately $1 million. The Company intends to defend their position and protest the notice of assessment. The Company has also elected to conduct the protest and pay any resulting obligation at the corporate level on behalf of its shareholders.

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

The Company evaluates its contracts to determine whether the contracts are derivative instruments. Certain contracts that meet the definition of a derivative may be exempted from derivative accounting and treated as normal purchases or normal sales if documented as such. 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.

The Company enters into short-term cash, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. The Company may also enter into derivative contracts to hedge its exposure to price risk as it relates to ethanol sales. As part of its risk management process, the Company uses futures and option contracts through regulated commodity exchanges or through the over-the-counter market to manage its risk related to pricing of inventories. All of the Company's derivatives, other than those excluded under the normal purchases and sales exclusion, are designated as non-hedge derivatives, with changes in fair value recognized in net income. Although the contracts are economic hedges of specified risks, they are not designated or accounted for as hedging instruments.

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 contracts are presented on the accompanying balance sheet as derivative instruments net of cash due from/to broker.

10

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

Net Earnings (Loss) Per Unit

Basic and diluted earnings (loss) per unit are computed using the weighted-average number of Class A and B units outstanding during the period.

Fair Value

Financial instruments include cash and equivalents, marketable securities, receivables, accounts payable, accrued expenses, and derivative instruments. The fair value of marketable securities and derivative financial instruments is based on quoted market prices, as disclosed in Note 8. The fair value, determined using level 3 inputs, of all other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments.

Risks and Uncertainties

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 and distiller grains 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 six months ended April 30, 2021, ethanol sales accounted for approximately 75% of total revenue, distiller grains sales accounted for approximately 20% of total revenue, and corn oil sales accounted for approximately 5% of total revenue, while corn costs averaged approximately 90% 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 with ethanol selling, in general, for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities.

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. Quarantines, labor shortages, and other disruptions to the Company’s operations, and those of its customers, adversely impacted the Company’s revenues, ability to provide its services and operating results. 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. Like the COVID-19 pandemic, any 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 COVID-19 will impact the Company’s long-term results will depend on future developments, which are highly uncertain and cannot be predicted, including new developments regarding continued distribution of the COVID-19 vaccine, new information which may emerge concerning the severity of the coronavirus, prevalence of new COVID-19 cases and actions taken to contain the coronavirus or its impact, among others.

Recent Accounting Pronouncements

In August 2018, FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"). ASU 2018-13 changes some of the disclosure requirements related to fair value measurements related to the Level 1, 2 and 3 investments. ASU 2018-13 is effective for fiscal

years beginning after December 15, 2019, and for interim periods within that fiscal year. The Company has adopted ASU No. 2018-13 on the financial statement.

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018,

11

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

including interim periods within those fiscal years. Effective November 1, 2020, the Company adopted ASU 2016-13 using the modified retrospective approach. There was no impact of adoption for the period ended April 30, 2021. The Company expects the impact of adopting the new standard to be immaterial on an ongoing basis.

2.    INVENTORY

Inventory consisted of the following as of April 30, 2021 and October 31, 2020:

	April 30, 2021		October 31, 2020
Raw Materials	$	5,672,109	$	4,977,047
Work in Process	3,019,641		1,964,403
Finished Goods	6,017,695		1,405,314
Totals	$	14,709,445	$	8,346,764

3.    BANK FINANCING

The Company has a Credit Agreement (the "Credit Agreement") with its primary lender, Farm Credit. Pursuant to the Credit Agreement, the Company executed a $35 million reducing revolving loan (the "Reducing Revolving Loan"). The amount available pursuant to the Reducing Revolving Loan decreases by $5 million each year on the first day of August each year starting on August 1, 2021. The maturity date is August 1, 2023. Interest accrues on the Reducing Revolving Loan based on three options available to us. The Company agreed to pay an annual fee of 0.5% of the unused portion of the Reducing Revolving Loan. Interest on the term loan is payable monthly at 3.40% above the one-month LIBOR (3.51% as of April 30, 2021). The borrowings were secured by substantially all the assets of the Company. The credit agreements are subject to covenants, including requiring the Company to maintain various financial ratios, as well as certain distribution limitations. As of April 30, 2021, the Company was in compliance with all of the loan covenants. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of any outstanding principal balances on the loans and/or imposition of fees and penalties. As of April 30, 2021 and October 31, 2020, the Company had no outstanding borrowings under this agreement.

The Company entered into a loan agreement with the Small Business Association through Cresco Union Savings Bank ("CUSB") on April 7, 2020 for approximately $860,000 as part of the Paycheck Protection Program ("PPP") under Division A, Title I of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The loan matures in April 2022 and has an interest rate of 1%. Proceeds of the loan are restricted for use towards payroll costs and other allowable uses such as covered utilities for an eight-week period following the loan under the Paycheck Protection Program Rules. Provisions of the agreement allow for a portion of the loan to be forgiven if certain qualifications are met. On December 8, 2020, we were notified that this entire loan was forgiven. The company recorded the forgiveness as a gain on debt extinguishment in the statement of operations for approximately $860,000 for the six months ended April 30, 2021.

The Company entered into a second loan agreement with the Small Business Association through CUSB on February 9, 2021 for approximately $838,000 as part of the second round of PPP. The loan matures on February 8, 2026 and has an interest rate of 1%. Provisions of the agreement allow for a portion of the loan to be forgiven if certain qualifications are met.

4.    RELATED PARTY TRANSACTIONS

The Company purchases corn and materials from members of its Board of Directors or Risk Management Committee that own or manage elevators and construction companies (see Note 5). The Company also purchases ingredients from RPMG. Purchases from the related parties during the three and six months ended April 30, 2021 totaled approximately $11,798,000 and $23,788,281. Purchases from the related parties during the three and six months ended April 30, 2020 totaled approximately $9,130,000 and $20,172,000. As of April 30, 2021 and October 31, 2020, the amount owed to related parties was approximately $473,000 and $593,000, respectively (See Note 5).

12

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

5.    COMMITMENTS, CONTINGENCIES, AGREEMENTS AND RELATED PARTY

Ethanol, Distiller Grains and Corn Oil marketing agreements and major customers

The Company has entered into marketing agreements with a marketing company, in which the Company has an investment, for the exclusive rights to market, sell and distribute the entire ethanol, distiller grains and corn oil inventory produced by the Company. The marketing fees are presented net in revenues.

Approximate sales and marketing fees related to the agreements in place are as follows:

	Three Months Ended April 30,				Six Months Ended April 30,
	2021		2020		2021		2020
Sales ethanol	$	44,854,000	$	25,913,000	$	85,212,000	$	71,474,000
Sales distiller grains	12,345,000		7,557,000		22,669,000		17,498,000
Sales corn oil	3,139,000		1,413,000		5,506,000		3,633,000
Marketing fees-ethanol	$	64,000	$	40,000	$	127,000	$	100,000
Marketing fees-distiller grains	59,000		50,000		125,000		124,000
Marketing fees-corn oil	14,000		10,000		30,000		30,000
As of	April 30, 2021		October 31, 2020
Amount due from RPMG	$	4,488,000	$	7,326,000

The Company entered into a $13.3 million agreement for additional grain storage and receiving. As of April 30, 2021, $9,117,000 of costs had been incurred associated to this project. The estimated completion of this project is June 2021.

6.    LEASE OBLIGATIONS

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 recognizes a lease liability at the lease commencement date, for 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 5 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 six months ended April 30, 2021 was approximately $449,000 and $675,000, and for the same period in 2020 was approximately $365,000. and $719,000. The lease agreements have maturity dates ranging from May 2021 to May 2024. The weighted average remaining life of the lease term for these leases was 1.86 years as of April 30, 2021.

The discount rate used in determining the lease liability for each individual lease was the Company's estimated incremental borrowing rate of 4.95%. The right-of-use asset operating lease, included in other assets, and operating lease liabilities, included in current and long term liabilities was $2,313,532 as of April 30, 2021.

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GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

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

2021	$	1,123,310
2022	874,080
2023	445,500
2024	16,800
Total lease commitments	$	2,459,690

A reconciliation of the undiscounted future payments in the schedule above and the lease liabilities recognized in the consolidated balance sheet as of April 30, 2021, is shown below.

Undiscounted future payments	$	2,459,690
Discount effect	(146,158)
Discounted future payments	$	2,313,532

7.    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 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 contracts to reduce its net position of merchandisable agricultural commodity inventories and forward cash purchase and sales contracts and uses exchange traded futures contracts to reduce price risk. Exchange-traded futures contracts are valued at market price. Changes in market price of contracts related to corn and natural gas are recorded in cost of goods sold and changes in market prices of contracts related to sale of ethanol are recorded in revenues.

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GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity contracts for periods ended April 30, 2021 and 2020 and the fair value of derivatives as of April 30, 2021 and October 31, 2020:

	Income Statement Classification	Realized Gain (Loss)		Change in Unrealized Gain (Loss)		Total Gain (Loss)
Derivatives not designated as hedging instruments:
Commodity Contracts for the	Revenue	$	(210,000)	$	(453,000)	$	(663,000)
three months ended April 30, 2021	Cost of Goods Sold	(3,326,000)		(2,303,000)		(5,629,000)
	Total	$	(3,536,000)	$	(2,756,000)	$	(6,292,000)
Commodity Contracts for the	Revenue	$	601,000	$	(26,000)	$	575,000
three months ended April 30, 2020	Cost of Goods Sold	1,198,000		(384,000)		814,000
	Total	$	1,799,000	$	(410,000)	$	1,389,000
Commodity Contracts for the	Revenue	$	(210,000)	$	(542,000)	$	(752,000)
six months ended April 30, 2021	Cost of Goods Sold	(5,565,000)		(4,622,000)		(10,187,000)
	Total	$	(5,775,000)	$	(5,164,000)	$	(10,939,000)
Commodity Contracts for the	Revenue	$	163,000	$	377,000	$	540,000
six months ended April 30, 2020	Cost of Goods Sold	2,574,000		(1,470,000)		1,104,000
	Total	$	2,737,000	$	(1,093,000)	$	1,644,000

	Balance Sheet Classification	April 30, 2021		October 31, 2020
Futures and option contracts
In gain position		$	455,000	$	470,000
In loss position		(5,438,000)		(290,000)
Cash held by (due to) broker		5,859,000		683,000
	Current Asset	$	876,000	$	863,000

As of April 30, 2021, the Company had the following approximate outstanding purchase and sale commitments, of which all sales commitments and approximately $3,926,000 of the purchase commitments were with related parties.

	Commitments Through	Amount
Sale commitments
Corn Oil - fixed price	May 2021	$	1,594,000
Distiller Grains - fixed price	May 2021	3,816,000
Purchase commitments
Corn - fixed price	April 2022	$	20,780,000
Corn - basis contract	July 2021	6,354,000
Natural gas - fixed price	February 2022	2,915,000
Denaturant - fixed price	September 2021	1,172,000

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GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

As of April 30, 2021, the Company had fixed price futures and forward contracts in place for approximately 19% of its anticipated corn needs and 2% of its ethanol sales for the next 12 months with no open positions beyond that period. As of April 30, 2021, the Company had fixed price futures and forward contracts in place for approximately 7% of its natural gas needs for the next 12 months and approximately 3% of its natural gas needs for the next 24 months with no open positions beyond that period.

8.    FAIR VALUE MEASUREMENTS

Financial assets and liabilities carried at fair value are 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.

Marketable Securities: The Company's investments in short-term liquid investments (e.g. mutual funds), are classified within Level 1, carried at fair value based on the quoted market prices.

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 markets such as the Chicago Mercantile Exchange ("CME") and New York Mercantile Exchange ("NYMEX").  Crush swaps are bundled contracts or combined contracts that include a portion of corn, ethanol and natural gas rolled into a single trading instrument. These contracts are reported at fair value utilizing Level 2 inputs and are based on the various trading activity of the components of each segment of the bundled contract.

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

	Total		Level 1		Level 2		Level 3
Marketable securities:
Assets, April 30, 2021	$	1,317,000	$	1,317,000	$	—	$	—
Assets, October 31, 2020	5,113,000		5,113,000		—		—
Derivative financial instruments:
April 30, 2021
Assets	$	455,000	$	455,000	$	—	$	—
Liabilities	5,439,000		3,530,000		1,909,000		—
October 31, 2020
Assets	$	470,000	$	470,000	$	—	$	—
Liabilities	(290,000)		(149,000)		(141,000)		—

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GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

9. INVESTMENTS

Condensed, combined unaudited financial information of the Company’s investments in Absolute Energy, Homeland Energy Solutions, Guardian Energy, Lawrenceville Tank and RPMG is as follows (in 000’s):

Balance Sheet	March 31, 2021		September 30, 2020
Current Assets	$	378,693	$	285,395
Other Assets	241,777		246,389
Current Liabilities	238,043		168,842
Long-term Debt	68,126		47,529
Members’ Equity	314,301		315,413
	Three Months Ended March 31,				Six Months Ended March 31,
Income Statement	2021		2020		2021		2020
Revenue	$	261,557	$	177,082	$	471,255	$	394,124
Gross Profit (Loss)	23,690		(9,499)		52,620		13,753
Net Income (Loss)	21,065		(12,814)		36,205		8,248

The Company recorded equity in net income of approximately (in 000's):

	Three Months Ended April 30,				Six Months Ended April 30,
Equity in Net Income (Loss)	2021		2020		2021		2020
Absolute Energy	$	258	$	(329)	$	876	$	148
Guardian Energy	—		—		—		959
Homeland Energy Solutions	457		(386)		524		139
Other	125		235		187		289
Total	$	840	$	(480)	$	1,587	$	1,535

10. SEGMENT REPORTING

The Company reports its financial and operating performance in two reportable segments: (1) production (2) ethanol production investments. The production segment consists of the manufacturing of ethanol and related co-products from the ethanol production process. The ethanol production investment segment consists of aggregated ethanol production equity method investments. The Company discloses the remaining operating segments which do not meet the reportable segment criteria in the all other investments category.

The Company evaluates its operating segments for determination of reportable segments annually and determined that the ethanol production investments qualified as a separate reporting segment. The ethanol production investments reporting segment includes those equity method investment operating segments which the company's chief operating decision maker does not have operational decision authority, that meet the qualitative criteria for aggregation, have similar long-term economic characteristics, and have expected ongoing significance, which includes Absolute Energy, Guardian Energy, and Homeland Energy Solutions. All investments that are included in the segment derive their revenue from the manufacturing of ethanol and related co-products from the ethanol production process.

The reconciliation item is necessary due to reportable segments not being consolidated in the financial statements, but rather are reflected as equity method investments.

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GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2021

The following tables set forth certain financial data for the Company’s reportable segments:

	Three Months Ended April 30,
	2021		2020
Net Sales
Production	$	59,659,528	$	35,154,653
Ethanol production investments	257,580,236		173,106,497
All Others	3,976,566		3,976,043
Reconciliation	(261,556,802)		(177,082,540)
Total Net Sales	$	59,659,528	$	35,154,653
Net Income (Loss)
Production	$	(97,590)	$	(7,336,764)
Ethanol production investments	19,305,224		(13,581,164)
All Others	1,760,021		767,364
Reconciliation	(20,190,380)		12,333,156
Total Net Income (Loss)	$	777,275	$	(7,817,408)

The following table sets forth the Company’s total assets by operating segment:

	April 30, 2021		October 31, 2020
Total assets:
Production	$	107,871,741	$	114,069,070
Ethanol production investments	377,798,022		358,692,270
All Others	242,671,698		173,092,120
Reconciliation	(595,449,488)		(506,764,519)
	$	132,891,973	$	139,088,941

11. SUBSEQUENT EVENTS

On May 25, 2021 we applied for forgiveness of our second PPP Loan totaling $838,000.

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

Forward Looking Statements

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, including, but not limited to those listed below and those business risks and factors described elsewhere in this report and our other Securities and Exchange Commission filings. 

•Demand destruction and long lasting effects from the COVID-19 pandemic;

•Demand destruction from the small refinery exemptions to the Renewable Fuel Standard ("RFS") issued by the Environmental Protection Agency ("EPA");

•The impact the Chinese distiller grains and ethanol tariffs have on ethanol and distiller grains prices in the United States;

•The impact lower gasoline prices have on the market price of ethanol and our ability to profitably operate the ethanol plant;

•Changes in the availability and price of corn and natural gas;

•Any elimination or reduction of the renewable fuels use requirements under the RFS;

•The impact of the ethanol export and import markets;

•The impact of the Low Carbon Fuel Standard ("LCFS") in certain parts of the country;

•Positions the EPA takes on topics such as Renewable Value Obligation ("RVO"), Renewable Identification Numbers ("RINs"), and Small Refinery Exemptions ("SREs");

•Our ability to transport our finished goods in order to continue to operate our ethanol plant at capacity;

•Our ability to profitably operate the ethanol plant, including the sale of distiller grains and corn oil, and maintain a positive spread between the selling price of our products and our raw material costs;

•The ability of the ethanol industry to generate additional demand through higher level blends of ethanol, including E15 and E85;

•The effect our hedging activities have on our financial performance and cash flows;

•Ethanol, distiller grains and corn oil supply exceeding demand and corresponding price reductions;

•Our ability to generate free cash flow to invest in our business, service our debt and satisfy the financial covenants contained in our credit agreement with our lender;

•Changes in our business strategy, capital improvements or development plans;

•Changes in plant production capacity or technical difficulties in operating the plant;

•Changes in general economic conditions or the occurrence of certain events causing an economic impact in the agriculture, oil or automobile industries;

•Changes and advances in ethanol production technology;

•Changes in interest rates or the lack of credit availability; and

•Our ability to retain key employees and maintain labor relations.

Our actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including the reasons described in this report.  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 with these cautionary statements. Unless otherwise stated, references in this report to particular years or quarters refer to our fiscal years ended in October and the associated quarters of those fiscal years.

Overview

Golden Grain Energy, LLC ("we," "us," "our" and the "Company") was formed as an Iowa limited liability company on March 18, 2002, for the purpose of constructing, owning and operating a fuel-grade ethanol plant near Mason City in north central Iowa. Since December 2004, we have been engaged in the production of ethanol and distiller grains at the plant and have produced corn oil since February 2009. We have capacity to produce approximately 120 million gallons of ethanol per year.

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Our revenue is derived primarily from the sale and distribution of our ethanol, distiller grains and corn oil. We market our products through Renewable Products Marketing Group, Inc. ("RPMG"), a professional third party marketer. We are an equity owner of RPMG, LLC, the parent company of RPMG, which allows us to realize favorable marketing fees in the sale of our ethanol, distiller grains and corn oil.

We entered into a loan agreement with the Small Business Association through Cresco Union Savings Bank ("CUSB") on April 7, 2020 for approximately $860,000 as part of the Paycheck Protection Program under Division A, Title I of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). Provisions of the agreement allowed for the loan to be forgiven if certain qualifications were met. On December 8, 2020, we were notified that this entire loan was forgiven. The company recorded the forgiveness as a gain on debt extinguishment in the statement of operations for approximately $860,000 for the three months ended January 31, 2021.

We entered into a second loan agreement with the Small Business Association through CUSB on February 9, 2021 for approximately $838,000 as part of the second round of Paycheck protection Program ("PPP"). The loan matures on February 8, 2026 and has an interest rate of 1%. Provisions of the agreement allow for a portion of the loan to be forgiven if certain qualifications are met.

Results of Operations

Comparison of the Three Months Ended April 30, 2021 and 2020

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 April 30, 2021 and 2020:

	2021			2020
Statement of Operations Data	Amount		%	Amount		%
Revenues	$	59,659,528	100.0	$	35,154,653	100.0
Cost of Goods Sold	58,425,094		97.9	41,862,136		119.1
Gross Profit (Loss)	1,234,434		2.1	(6,707,483)		(19.1)
Operating Expenses	1,225,996		2.1	1,022,045		2.9
Operating Income (Loss)	8,438		—	(7,729,528)		(22.0)
Other Income	768,837		1.3	(87,880)		(0.2)
Net Income (Loss)	$	777,275	1.3	$	(7,817,408)	(22.2)

Revenues. Our total revenue was approximately 73% more for our second quarter of 2021 compared to the same period of 2020 due to increased ethanol, distiller grains and corn oil revenue. For our second quarter of 2021, ethanol sales accounted for approximately 75% of our total revenue, distiller grains sales accounted for approximately 20% of our total revenue, and corn oil sales accounted for approximately 5% of our total revenue. For our second quarter of 2020, ethanol sales accounted for approximately 75% of our total revenue, distiller grains sales accounted for approximately 21% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue.

The average price per gallon we received for our ethanol was approximately 79% higher for our second quarter of 2021 compared to the same period of 2020. Management attributes this increase in the average price we received for our ethanol with lower ethanol stocks and increased gasoline demand during our second quarter of 2021 compared to the same period of 2020. Management anticipates that ethanol demand will remain strong and that ethanol stocks will steadily increase which will likely stabilize ethanol prices.

We sold approximately 1% more gallons of ethanol during our second quarter of 2021 compared to the same period of 2020. Management attributes this increase in ethanol sales with increased production levels. This increase in ethanol production is due to a shorter yearly maintenance of downtime. Management anticipates that our ethanol sales will be greater during our third quarter of 2021 compared to our second quarter of 2021.

During our second quarter of 2021, we experienced combined realized and unrealized losses on our ethanol derivatives of approximately $663,000 which decreased our revenue. We experienced combined realized and unrealized gains of $575,000 on ethanol derivative instruments during the same period of 2020.

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The average price per ton we received for our dried distillers grains was approximately 57% higher for our second quarter of 2021 compared to the same period of 2020. In addition, the average price per ton we received for our modified/wet distillers grains was approximately 70% higher for our second quarter of 2021 compared to the same period of 2020.  Management attributes these stronger distiller grains prices to higher corn prices, which have an impact on distiller grains prices, along with strong distiller grains demand. Management anticipates that distiller grains prices will remain strong due to current corn values which will likely continue for the rest of our 2021 fiscal year.

We sold approximately 1% more tons of dried distiller grains during our second quarter of 2021 compared to the same period of 2020 due to increased overall production at the ethanol plant, which resulted in a corresponding increase in distiller grains production and sales. Management anticipates distiller grains production and sales will increase for the remaining quarters of our 2021 fiscal year due to anticipated increases in ethanol production.

We sold approximately 21% more pounds of corn oil during our second quarter of 2021 compared to the same period of 2020. This increase in corn oil sales is due to increased overall production at the ethanol plant during the second quarter of 2021. The average price per pound we received for our corn oil was approximately 91% higher for our second quarter of 2021 compared to the same period of 2020 due to increased demand from the biodiesel industry for corn oil, which is used to make biodiesel. The reintroduction of the biodiesel blenders' tax credit has provided certainty to the biodiesel industry, which has improved corn oil demand. Management anticipates that corn oil prices will remain at current levels during the remainder our 2021 fiscal year.

    Cost of Goods Sold. Our cost of goods sold was higher for our second quarter of 2021 compared to the same period of 2020 due primarily to an increase in our average cost per bushel of corn during the 2021 period.  Our average cost per bushel of corn was approximately 48% higher during our second quarter of 2021 compared to the same period of 2020 due to increased worldwide corn demand along with lower local corn supplies due to the amount of corn harvested in the fall of 2020 in our corn purchase area. Management anticipates that corn prices will remain high for the rest of our 2021 fiscal year and could continue into our 2022 fiscal year depending on the size of the corn crop harvested in the fall of 2021.

    We used approximately 5% more bushels of corn during our second quarter of 2021 compared to the same period of 2020 due to increased production during the 2021 period. Management anticipates increased corn consumption during the remaining quarters of our 2021 fiscal year provided we experience increased production at the ethanol plant.

    Our natural gas costs increased by approximately 2% during our second quarter of 2021 compared to the same period of 2020. Our usage was approximately 5% higher and the average price we paid per MMBtu of natural gas was approximately 3% lower during our second quarter of 2021 compared to the same period of 2020. Management attributes this increase in natural gas usage with higher ethanol production and the decrease in the natural gas price with having purchased our natural gas early. Management expects higher natural gas prices during the remaining quarters of our 2021 fiscal year due to current supply and demand levels.

We experienced combined realized and unrealized losses of approximately $5,450,000 for our second quarter of 2021 related to our corn and natural gas derivative instruments which increased our cost of goods sold. This change was primarily due to corn price increases during our second quarter of 2021. By comparison, we experienced approximately $814,000 of combined realized and unrealized gains for the same period of 2020 related to our corn and natural gas derivative instruments which increased our cost of goods sold. We recognize the gains or losses that result from the changes in the value of our derivative instruments from corn and natural gas in cost of goods sold as the changes occur.  As corn and natural gas prices fluctuate, the value of our derivative instruments is impacted, which affects our financial performance.

Operating Expenses. Our operating expenses were higher during our second quarter of 2021 compared to the same period of 2020 due to increased insurance expense and computer and software updates.

Other Income (Expense). We had more other income for our second quarter of 2021 compared to the same period of 2020, due to our investments being more profitable due to increased profitability in the ethanol industry compared to the same period of 2020. We had more interest expense during our second quarter of 2021 compared to the same period of 2020 due primarily to more borrowing for deferred corn payments during the 2021 period.

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Comparison of the Six Months Ended April 30, 2021 and 2020

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 six months ended April 30, 2021 and 2020:

	2021			2020
Statement of Operations Data	Amount		%	Amount		%
Revenues	113,104,185		100.0	$	92,586,855	100.0
Cost of Goods Sold	117,313,416		103.7	96,688,473		104.4
Gross Profit (Loss)	(4,209,231)		(3.7)	(4,101,618)		(4.4)
Operating Expenses	2,434,213		2.2	2,296,007		2.5
Operating Income (Loss)	(6,643,444)		(5.9)	(6,397,625)		(6.9)
Other Income	4,428,131		3.9	1,994,435		2.2
Net Income (Loss)	$	(2,215,313)	(2.0)	$	(4,403,190)	(4.8)

Revenues. Our total revenue was higher for our six months ended April 30, 2021 compared to the same period of 2020 due to higher average prices for our ethanol, distiller grains and corn oil. Our overall production was lower during our six months ended April 30, 2021 compared to the same period of 2020. For our six months ended April 30, 2021, ethanol sales accounted for approximately 75% of our total revenue, distiller grains sales accounted for approximately 20% of our total revenue, and corn oil sales accounted for approximately 5% of our total revenue. For our six months ended April 30, 2020, ethanol sales accounted for approximately 77% of our total revenue, distiller grains sales accounted for approximately 19% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue.

The average price per gallon we received for our ethanol was approximately 30% greater for our six months ended April 30, 2021 compared to the same period of 2020. Management attributes this increase in the average price we received for our ethanol with lower ethanol stocks, increased gasoline prices and increased corn prices. All of these factors impact market ethanol prices. We sold approximately 8% fewer gallons of ethanol during our six months ended April 30, 2021 compared to the same period of 2020. Management attributes this decrease in ethanol sales due to the timing of our sales.

During our six months ended April 30, 2021, we experienced combined realized and unrealized losses on our ethanol derivatives of approximately $753,000 which decreased our revenue. We experienced combined realized and unrealized gains of $541,000 on ethanol derivative instruments during the same period of 2020 which increased our revenue.

The average price per ton we received for our dried distillers grains was approximately 37% higher for our six months ended April 30, 2021 compared to the same period of 2020. In addition, the average price per ton we received for our modified/wet distillers grains was approximately 43% higher for our six months ended April 30, 2021 compared to the same period of 2020.  Management attributes these stronger distiller grains prices to higher corn prices which has an impact on distiller grains prices along with strong distiller grains demand.

We sold approximately 5% fewer tons of dried distiller grains during our six months ended April 30, 2021 compared to the same period of 2020 due to decreased overall production, which resulted in a corresponding decrease in distiller grains production and sales. We sold fewer tons of modified distiller grains during our six months ended April 30, 2021 compared to the same period of 2020 due to decreased overall production at the ethanol plant.

We sold approximately 5% fewer pounds of corn oil during our six months ended April 30, 2021 compared to the same period of 2020. This decrease in corn oil sales is due to reduced overall production at the ethanol plant during the six months ended April 30, 2021. The average price per pound we received for our corn oil was approximately 91% higher for our six months ended April 30, 2021 compared to the same period of 2020 due to demand from the biodiesel industry for corn oil which is used to make biodiesel along with higher soybean oil prices. The reintroduction of the biodiesel blenders' tax credit has provided certainty to the biodiesel industry which has improved corn oil demand.

    Cost of Goods Sold. Our cost of goods sold was higher for our six months ended April 30, 2021 compared to the same period of 2020 due primarily to an increase in our average cost per bushel of corn during the 2021 period.  Our average cost per bushel of corn was approximately 30% higher during our six months ended April 30, 2021 compared to the same period of 2020 due to increased worldwide corn demand along with lower local corn supplies due to the amount of corn harvested in the

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fall of 2020 in our corn purchase area. We used approximately 4% fewer bushels of corn during our six months ended April 30, 2021 compared to the same period of 2020 due to decreased production during the 2021 period.

    Our natural gas costs decreased by approximately 3% during our six months ended April 30, 2021 compared to the same period of 2020. Our natural gas usage was approximately 5% lower and the average price we paid per MMBtu of natural gas was approximately 1% greater during our six months ended April 30, 2021 compared to the same period of 2020. Management attributes this decrease in natural gas usage with lower ethanol production. The increase in our average cost of natural gas was due to cold winter weather which resulted in increased natural gas demand for heating needs.

We experienced combined realized and unrealized losses of approximately $10,186,000 for our six months ended April 30, 2021 related to our corn and natural gas derivative instruments which increased our cost of goods sold. This change was primarily due to corn price increases during our six months ended April 30, 2021. By comparison, we experienced approximately $1,104,000 of combined realized and unrealized gains for the same period of 2020 related to our corn and natural gas derivative instruments which decreased our cost of goods sold. We recognize the gains or losses that result from the changes in the value of our derivative instruments from corn and natural gas in cost of goods sold as the changes occur.  As corn and natural gas prices fluctuate, the value of our derivative instruments is impacted, which affects our financial performance.

Operating Expenses. Our operating expenses were higher during our six months ended April 30, 2021 compared to the same period of 2020 due to increased insurance expense and computer and software updates.

Other Income (Expense). We had more other income for our six months ended April 30, 2021 compared to the same period of 2020, due to our PPP loan which was forgiven during our first quarter of 2021. We had more interest expense during our six months ended April 30, 2021 compared to the same period of 2020 due primarily to more borrowing for deferred corn payments during the 2021 period. During our six months ended April 30, 2021, our investments were more profitable due to increased profitability in the ethanol industry compared to the same period of 2020.

Changes in Financial Condition for the Six Months Ended April 30, 2021

    Current Assets. We had less cash and equivalents at April 30, 2021 compared to October 31, 2020 due to deferred corn payments we made during our first quarter of 2021. The value of our accounts receivable were lower at April 30, 2021 compared to October 31, 2020 due to the timing of our quarter end and shipments of our products. The value of our inventory was higher at April 30, 2021 compared to October 31, 2020 due to the timing of our quarter end and additional raw material and finished goods inventory at the end of our second quarter of 2021. We had less other receivables at April 30, 2021 compared to October 31, 2020 due to timing of receiving payments. Prepaid expenses were higher at April 30, 2021 compared to October 31, 2020 due to payment of our annual insurance premiums in the beginning of our 2021 fiscal year.

    Property and Equipment. The net value of our property and equipment was higher at April 30, 2021 compared to October 31, 2020 due to the net effect of the value of our construction projects partially offset by regular depreciation of our assets. We had approximately $10.2 million in construction in progress at April 30, 2021 primarily related to plant improvement projects for our grain handling equipment.

    Other Assets. Our other assets were lower at April 30, 2021 compared to October 31, 2020 due to no new loan agreement costs. The value of our lease right of use assets was lower at April 30, 2021 compared to October 31, 2020 due to continued amortization of our leases.

    Current Liabilities. Our current liabilities at April 30, 2021 were lower compared to October 31, 2020 due to lower accrued liabilities at April 30, 2021. We had less accounts payables at April 30, 2021 compared to October 31, 2020 due to timing of payments. As of April 30, 2021 we no longer had an amount owed on our PPP loan because it was forgiven during the first quarter of our 2021 fiscal year. We had less current liabilities related to our leases as we continue to amortize the value and future lease payments for our leases.

    Long-term Liabilities. Our long-term liabilities associated with our deferred compensation was higher at April 30, 2021 compared to October 31, 2020 due to deferred bonus payables owed to our management team. At April 30, 2021 we had long-term debt related to the second PPP loan we received during our second quarter of 2021.

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Liquidity and Capital Resources

    Based on financial forecasts performed by our management, we anticipate that we will have sufficient cash from our current credit facilities and cash generated from our operations to continue to operate the ethanol plant at capacity for the next 12 months. However, additional funds may be necessary to fund plant projects if a negative margin environment returns for an extended period of time. As of April 30, 2021, we had $35 million available pursuant to our revolving term loan and approximately $8.4 million in cash and equivalents and marketable securities.

    We have a program of investing our excess cash in short-term liquid investments which allows us to access the cash when we need it and preserve our capital while limiting our loss exposure. Only a portion of our cash balances are federally insured when they are deposited with our bank. As a result, our plan is intended to decrease the risk we face when we were concentrating our cash balances with one financial institution.

The following table shows our cash flows for the six months ended April 30, 2021 and 2020:

	Six Months Ended April 30,
	2021		2020
Net cash provided by (used in) operating activities	$	(2,953,516)	$	3,823,093
Net cash (used in) investing activities	(4,380,236)		(4,922,415)
Net cash (used in) financing activities	(3,136,059)		(1,091,835)

Cash Flow From Operations 

Our cash flow from operations for the six months ended April 30, 2021 was less compared to the same period of 2020 due primarily to increased inventory for the six months ended April 30, 2021 compared to the same period of 2020.

Cash Flow From Investing Activities 

We used less cash for investing activities during our six months ended April 30, 2021 compared to the same period of 2020 primarily due to the net effect of more capital expenditures offset by proceeds from the sale of marketable securities during the 2021 period.

Cash Flow From Financing Activities.

During our six months ended April 30, 2021, we used more cash for financing activities compared to the same period of 2020 primarily due to a distribution we paid during the 2021 period.

Short-Term and Long-Term Debt Sources

We have a credit facility with Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA ("Farm Credit"). On September 1, 2020, we entered into a new Credit Agreement (the "Credit Agreement") with Farm Credit. Pursuant to the Credit Agreement, we executed a $35 million reducing revolving loan (the "Reducing Revolving Loan"). The amount available pursuant to the Reducing Revolving Loan decreases by $5 million on the first day of August each year starting on August 1, 2021. The maturity date is August 1, 2023. Interest accrues on the Reducing Revolving Loan based on three options available to us. We agreed to pay an annual fee of 0.5% of the unused portion of the Reducing Revolving Loan.

    In exchange for our credit facility with Farm Credit, we executed a mortgage in favor of Farm Credit covering all of our real property and granted Farm Credit a security interest in all of our equipment and other assets. In the event we default on our loans with Farm Credit, Farm Credit may foreclose on our assets, including both our real property and our machinery and equipment.

Reducing Revolving Loan

As of April 30, 2021, we had no outstanding balance on our Reducing Revolving Loan with an accrued interest rate of 3.4% in excess of the London Interbank Offered Rate ("LIBOR") which equaled 3.51% per year at April 30, 2021. As of April 30, 2021, we had $35 million available to be drawn on this loan.

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Administrative Agency Agreement

As part of the Farm Credit loan, we entered into an Administrative Agency Agreement with CoBank, ACP ("CoBank"). CoBank purchased a participation interest in the Farm Credit loan and was appointed the administrative agent for the purpose of servicing the loans. As a result, CoBank will act as the agent for Farm Credit with respect to our loans. We agreed to pay CoBank an annual fee of $5,000 as the agent for Farm Credit.

Covenants

Our credit agreements with Farm Credit are subject to numerous covenants including requiring us to maintain various financial ratios. As of April 30, 2021, we were in compliance with all of our loan covenants with Farm Credit. Based on current management projections, we anticipate that we will be in compliance with our loan covenants for the next 12 months and beyond.

Paycheck Protection Program Agreement

We entered into a loan agreement with the Small Business Association through Cresco Union Savings Bank ("CUSB") on April 7, 2020 for approximately $860,000 as part of the Paycheck Protection Program under Division A, Title I of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). The loan was scheduled to mature in April 2022 and had an interest rate of 1%. Proceeds of the loan were restricted for use towards payroll costs and other allowable uses such as covered utilities for an eight-week period following the loan under the Paycheck Protection Program Rules. Provisions of the agreement allowed for the loan to be forgiven if certain qualifications were met. On December 8, 2020, we were notified that this entire loan was forgiven.

We entered into a second loan agreement with the Small Business Association through CUSB on February 9, 2021 for approximately $838,000 as part of the second round of PPP. The loan matures on February 8, 2026 and has an interest rate of 1%. Provisions of the agreement allow for a portion of the loan to be forgiven if certain qualifications are met.

Grants and Government Programs

In December 2019, we entered into a Development Agreement with Cerro Gordo County, the county in which our ethanol plant is located, related to our plant expansion project. Pursuant to this Development Agreement, we were obligated to spend $23 million associated with our expansion project and in exchange, Cerro Gordo has agreed to refund 100% of the increased property taxes associated with the project up to a maximum benefit of $2 million. There is a 10 year term associated with this incentive subject to the cap.

Critical Accounting Policies

    Management uses estimates and assumptions in preparing our financial statements in accordance with U.S. generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Of the significant accounting policies described in the notes to our financial statements, we believe that the following are the most critical:

Revenue Recognition

    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. The principal activities which we generate revenue include: sales of ethanol, sales of distiller grains and sales of corn oil. Shipping costs we incurred in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs we incurred in the sale and shipment of distiller grain products are included in cost of goods sold.

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

    We evaluate contracts to determine whether the contracts are derivative instruments. Certain contracts that meet the definition of a derivative may be exempted from derivative accounting and treated as normal purchases or normal sales if

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documented as such. 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.

    We enter into short-term cash, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. We may also enter into derivative contracts to hedge our exposure to price risk as it relates to ethanol sales. As part of our risk management process, we use futures and option contracts through regulated commodity exchanges or through the over-the-counter market to manage our risk related to pricing of inventories. All of our derivatives, other than those excluded under the normal purchases and sales exclusion, are designated as non-hedge derivatives, with changes in fair value recognized in net income. Although the contracts are economic hedges of specified risks, they are not designated or accounted for as hedging instruments.

    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 contracts are presented on the accompanying balance sheet as derivative instruments.

Investments

    The Company has less than a 20% investment interest in five companies in related industries. These investments are being accounted for by the equity method of accounting under which the Company's share of net income is recognized as income in the Company's income statement and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. The investments are 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.

Off-Balance Sheet Arrangements.

We currently have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to the impact of market fluctuations associated with commodity prices as discussed below. We have limited exposure to interest rate changes as we did not have any amounts outstanding on our variable interest rate loans as of April 30, 2021. 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.

Commodity Price Risk

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. 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 April 30, 2021, we had price protection or delivery protection in place for approximately 19% of our anticipated corn needs, 7% of our natural gas needs and 2% of our ethanol sales for the next 12 months and approximately 3% of our natural gas needs for the next 24 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

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the average cost of our corn and natural gas prices and average ethanol price as of April 30, 2021, 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 April 30, 2021. The results of this analysis, which may differ from actual results, are as follows:

	Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price	Approximate Adverse Change to Income
Natural Gas	2,996,000	MMBTU	10%	$	794,000
Ethanol	118,110,000	Gallons	10%	21,260,000
Corn	32,409,000	Bushels	10%	17,760,000

For comparison, the results of this analysis for the one year period from April 30, 2020.

	Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price	Approximate Adverse Change to Income
Natural Gas	234,000	MMBTU	10%	$	64,000
Ethanol	112,860,000	Gallons	10%	11,399,000
Corn	37,555,000	Bushels	10%	13,858,000

Item 4.  Controls and Procedures

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.

Our management, including our President and Chief Executive Officer (the principal executive officer), Chad Kuhlers, along with our Chief Financial Officer (the principal financial officer), Brooke Peters, have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of April 30, 2021.  Based on this review and evaluation, these officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission; and to ensure that the information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

    For the six months ended April 30, 2021, there has been no change in our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

    There have been no material changes to the risk factors disclosed in our annual report on Form 10-K for the fiscal year ended October 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

    None.

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Item 3. Defaults Upon Senior Securities

    None.

Item 4. Mine Safety Disclosures.

    None.

Item 5. Other Information

    None.

Item 6. Exhibits.

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

Exhibit No.	Exhibit
31.1	Certificate Pursuant to 17 CFR 240.13a-14(a)*
31.2	Certificate Pursuant to 17 CFR 240.13a-14(a)*
32.1	Certificate Pursuant to 18 U.S.C. Section 1350*
32.2	Certificate Pursuant to 18 U.S.C. Section 1350*
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Document
101.LAB*	XBRL Labels Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document

*    Filed herewith.

**    Furnished herewith.

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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.

		GOLDEN GRAIN ENERGY, LLC
Date:	June 11, 2021	/s/ Chad Kuhlers
		Chad Kuhlers
		Chief Executive Officer
		(Principal Executive Officer)
Date:	June 11, 2021	/s/ Brooke Peters
		Brooke Peters
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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