LAKE AREA CORN PROCESSORS LLC - Quarter Report: 2018 September (Form 10-Q)

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 fiscal quarter ended September 30, 2018

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Commission file number 000-50254



LAKE AREA CORN PROCESSORS, LLC
(Exact name of registrant as specified in its charter)

South Dakota		46-0460790
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

46269 SD Highway 34 P.O. Box 100 Wentworth, South Dakota		57075
(Address of principal executive offices)		(Zip Code)

(605) 483-2676
(Registrant's telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act: Membership Units

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 and post 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, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer o		Accelerated filer o
Non-accelerated filer x		Smaller Reporting Company o
(Do not check if a smaller reporting company)		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 Act). o Yes x No

As of November 14, 2018, there are 29,620,000 membership units of the registrant outstanding.

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INDEX



	Page No.
Part I FINANCIAL INFORMATION	3
Item 1. Financial Statements (Unaudited)	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	25
Item 4. Controls and Procedures	27

Part II OTHER INFORMATION	27
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3. Defaults Upon Senior Securities	28
Item 4. Mine Safety Disclosures	28
Item 5. Other Information	28
Item 6. Exhibits	28
Signatures	30

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LAKE AREA CORN PROCESSORS, LLC

Consolidated Balance Sheets



	September 30, 2018			December 31, 2017*
ASSETS	(unaudited)

CURRENT ASSETS
Cash and cash equivalents	$	3,081,149		$	5,102,959
Accounts receivable	2,165,159			3,186,530
Other receivables	10,867			38,704
Inventory	6,841,794			5,526,094
Derivative financial instruments	1,365,319			862,840
Prepaid expenses	103,821			219,741
Total current assets	13,568,109			14,936,868

PROPERTY AND EQUIPMENT
Land	874,473			874,473
Land improvements	8,558,720			8,558,720
Buildings	8,999,467			8,955,206
Equipment	57,845,234			53,060,482
Construction in progress	21,600,033			8,475,840
	97,877,927			79,924,721
Less accumulated depreciation	(42,242,342		)	(39,955,791		)
Net property and equipment	55,635,585			39,968,930

OTHER ASSETS
Goodwill	10,395,766			10,395,766
Investments	17,438,237			18,739,259
Other	119,452			31,417
Total other assets	27,953,455			29,166,442

TOTAL ASSETS	$	97,157,149		$	84,072,240

* Derived from audited financial statements.

See Notes to Unaudited Consolidated Financial Statements.

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LAKE AREA CORN PROCESSORS, LLC

Consolidated Balance Sheets




	September 30, 2018		December 31, 2017*
LIABILITIES AND MEMBERS’ EQUITY	(unaudited)

CURRENT LIABILITIES
Outstanding checks in excess of bank balance	$	495,342	$	674,936
Accounts payable	6,284,214		6,123,995
Accrued liabilities	527,292		582,487
Derivative financial instruments	1,262,403		410,785
Current maturities of notes payable	1,000,000		1,000,000
Other	13,556		13,556
Total current liabilities	9,582,807		8,805,759

LONG-TERM LIABILITIES
Notes payable	19,084,347		6,971,944
Other	8,000		12,000
Total long-term liabilities	19,092,347		6,983,944

COMMITMENTS AND CONTINGENCIES (Note 9)

MEMBERS' EQUITY (29,620,000 units issued and outstanding)	68,481,995		68,282,537

TOTAL LIABILITIES AND MEMBERS' EQUITY	$	97,157,149	$	84,072,240

* Derived from audited financial statements.

See Notes to Unaudited Consolidated Financial Statements.

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LAKE AREA CORN PROCESSORS, LLC

Consolidated Statements of Income (Unaudited)



	Three Months Ended September 30, 2018			Three Months Ended September 30, 2017			Nine Months Ended September 30, 2018		Nine Months Ended September 30, 2017

REVENUES	$	18,796,356		$	19,479,798		$	58,677,962	$	63,806,023

COSTS OF REVENUES	18,078,236			17,511,118			53,282,450		57,594,260

GROSS PROFIT	718,120			1,968,680			5,395,512		6,211,763

OPERATING EXPENSES	872,053			834,459			2,847,557		2,711,909

INCOME (LOSS) FROM OPERATIONS	(153,933		)	1,134,221			2,547,955		3,499,854

OTHER INCOME (EXPENSE)
Interest and other income	2,228			12,944			53,533		52,575
Equity in net income (loss) of investments	(30,513		)	668,512			559,970		1,189,949
Interest expense	—			(330		)	—		(2,308		)
Total other income (expense)	(28,285		)	681,126			613,503		1,240,216

NET INCOME (LOSS)	$	(182,218	)	$	1,815,347		$	3,161,458	$	4,740,070

BASIC AND DILUTED EARNINGS (LOSS) PER UNIT	$	(0.01	)	$	0.06		$	0.11	$	0.16

WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING FOR THE CALCULATION OF BASIC & DILUTED EARNINGS (LOSS) PER UNIT	29,620,000			29,620,000			29,620,000		29,620,000

DISTRIBUTIONS DECLARED PER UNIT	$	—		$	—		$	0.10	$	0.10

See Notes to Unaudited Consolidated Financial Statements.

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LAKE AREA CORN PROCESSORS, LLC

Consolidated Statements of Cash Flows (Unaudited)



	Nine Months Ended September 30, 2018			Nine Months Ended September 30, 2017

OPERATING ACTIVITIES
Net income	$	3,161,458		$	4,740,070
Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization	2,323,713			2,237,618
Distributions in excess of earnings from investments	1,602,045			1,535,051
(Increase) decrease in
Accounts receivable	1,049,207			2,506,509
Inventory	(1,315,699		)	(1,250,853		)
Prepaid expenses	115,922			159,178
Derivative financial instruments	349,138			211,272
(Decrease) in
Accounts payable	(2,637,722		)	(2,914,330		)
Accrued and other liabilities	(59,195		)	(190,569		)
NET CASH PROVIDED BY OPERATING ACTIVITIES	4,588,867			7,033,946

INVESTING ACTIVITIES
Purchase of property and equipment	(15,171,559		)	(1,410,191		)
Purchase of investments	(301,024		)	(10,052,704		)
NET CASH (USED IN) INVESTING ACTIVITIES	(15,472,583		)	(11,462,895		)

FINANCING ACTIVITIES
Increase (decrease) in outstanding checks in excess of bank balance	(179,594		)	341,069
Notes payable issued	16,673,268			7,979,778
Principal payments on notes payable	(4,574,268		)	—
Financing costs paid	(95,500		)	—
Distributions paid to members	(2,962,000		)	(2,962,000		)
NET CASH PROVIDED BY FINANCING ACTIVITIES	8,861,906			5,358,847

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(2,021,810		)	929,898

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	5,102,959			9,993,335

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	3,081,149		$	10,923,233

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest, net of capitalized interest of $358,769 and $52,704 in 2018 and 2017, respectively.	$	—		$	2,306
Capital expenditures in accounts payable	2,909,331			135,003

See Notes to Unaudited Consolidated Financial Statements

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

NOTE 1 . NATURE OF OPERATIONS

Principal Business Activity

Lake Area Corn Processors, LLC and subsidiary (the "Company") is a South Dakota limited liability company.

The Company owns and manages Dakota Ethanol, LLC ("Dakota Ethanol"), a 40 million-gallon (annual nameplate capacity) ethanol plant, located near Wentworth, South Dakota. Dakota Ethanol sells ethanol and related products to customers located in North America.

In addition, the Company has investment interests in five companies in ethanol-related industries. See note 4 for further details.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America although the Company believes that the disclosures are adequate to make the information not misleading.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying financial statements. All adjustments are of a normal and recurring nature. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for a full year.

These financial statements should be read in conjunction with the financial statements and notes included in the Company’s audited financial statements for the year ended December 31, 2017, contained in the annual report on Form 10-K for 2017.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Dakota Ethanol. All significant inter-company transactions and balances have been eliminated in consolidation.

Revenue Recognition

Effective January 1, 2018, the Company adopted the new guidance of ASC Topic 606, Revenue from Contracts with Customers (Topic 606), using the modified retrospective approach. 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 new guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The Company generally recognizes revenue at a point in time. The majority of the Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The adoption of this new guidance did not result in any changes to the timing or amount of revenue recognized prior to January 1, 2018, but did result in expanded disclosures in our consolidated financial statements.

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 distillers corn oil

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

Disaggregation of revenue:

All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017

Revenues ethanol	$	14,599,385	$	15,406,881	$	45,970,750	$	50,732,864
Revenues distillers grains	3,630,835		3,328,614		11,056,256		10,773,882
Revenues distillers corn oil	566,136		744,303		1,650,956		2,299,277
	$	18,796,356	$	19,479,798	$	58,677,962	$	63,806,023

Contract assets and contract liabilities:

The Company has no significant contract assets or contract liabilities from contracts with customers.

The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract.

Shipping costs

Shipping costs incurred by the Company in the sale of ethanol, dried distillers grains and corn oil are not specifically identifiable and as a result, revenue from the sale of those products is recorded based on the net selling price reported to the Company from the marketer.

When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized.

Operating Segment

The Company uses the "management approach" for reporting information about segments in annual and interim financial statements. The management approach is based on the way the chief operating decision-maker organizes segments within a company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure and any other manner in which management disaggregates a company. Based on the "management approach" model, the Company has determined that its business is comprised of a single operating segment.

Cost of Revenues

The primary components of cost of revenues from the production of ethanol and related co-product are corn expense, energy expense (natural gas and electricity), raw materials expense (chemicals and denaturant), and direct labor costs.

Shipping costs on modified and wet distillers grains are included in cost of revenues.

Inventory Valuation

Inventories are generally valued using methods which approximate the lower of cost (first-in, first-out) or net realizable value. In the valuation of inventories and purchase commitments, net realizable value is based on estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation.

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

Receivables and Credit Policies

Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within fifteen days from the invoice date. Unpaid accounts receivable with invoice dates over thirty days old bear interest at 1.5% per month. Accounts receivable are stated at the amount billed to the customer. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

The carrying amount of trade receivables is reduced by a valuation allowance that reflects management’s best estimate of the amounts that will not be collected. Management regularly reviews trade receivable balances and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. The valuation allowance was $2,131 as of September 30, 2018 and December 31, 2017 respectively.

Investment in commodities contracts, derivative instruments and hedging activities

The Company is exposed to certain risks related to our ongoing business operations. The primary risks that the Company manages by using forward or derivative instruments are price risks on anticipated purchases of corn and natural gas and the sale of ethanol, distillers grains and distillers corn oil.

The Company is subject to market risk with respect to the price and availability of corn, the principal raw material the Company uses to produce ethanol and ethanol by-products. In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions. This is especially true when market conditions do not allow us to pass along increased corn costs to our customers. The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply.

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

The Company does not apply the normal purchase and sales exemption for forward corn purchase contracts. As of September 30, 2018, the Company is committed to purchasing approximately 3.4 million bushels of corn on a forward contract basis with an average price of $3.42 per bushel. The total corn purchase contracts represent 19% of the annual projected plant corn usage.

The Company enters into firm-price purchase commitments with natural gas suppliers under which the Company agrees to buy natural gas at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price decrease in the market price of natural gas between the time the price is fixed and the time the natural gas is delivered. At September 30, 2018, the Company is committed to purchasing approximately 620,000 MMBtu’s of natural gas on a forward contract basis with an average price of $2.52 per MMBtu. The Company accounts for these transactions as normal purchases, and accordingly, does not mark these transactions to market. The natural gas purchase contracts represent 53% of the annual plant requirements.

The Company enters into firm-price sales commitments with distillers grains customers under which the Company agrees to sell distillers grains at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price increase in the market price of distillers grain between the time the price is fixed and the time the distillers grains are delivered. At September 30, 2018, the Company is committed to selling approximately 36,000 dry equivalent tons of distillers grains with an average price of $123 per ton. The Company accounts for these transactions as normal sales, and accordingly, does not mark these transactions to market. The distillers grains sales represent approximately 25% of the projected annual plant production.

The Company enters into firm-price sales commitments with distillers corn oil customers under which the Company agrees to sell distillers corn oil at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price increase in the market price of distillers corn oil between the time the price is fixed and the time the distillers corn oil is

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

delivered. At September 30, 2018, the Company is committed to selling approximately 1 million pounds of distillers corn oil with an average price of $0.25 per pound. The Company accounts for these transactions as normal sales, and accordingly, does not mark these transactions to market. The distillers corn oil sales represent approximately 9% of the projected annual plant production.

The Company does not have any firm-priced sales commitments for ethanol as of September 30, 2018.

The Company enters into short-term forward, option and futures contracts for ethanol, corn and natural gas as a means of managing exposure to changes in commodity and energy prices. All of the Company's derivatives are designated as non-hedge derivatives, and accordingly are recorded at fair value with changes in fair value recognized in net income. Although the contracts are considered economic hedges of specified risks, they are not designated as and accounted for as hedging instruments.

As part of our trading activity, the Company uses futures and option contracts offered through regulated commodity exchanges to reduce risk of loss in the market value of inventories and purchase commitments. To reduce that risk, the Company generally takes positions using forward and futures contracts and options.

Derivatives not designated as hedging instruments at September 30, 2018 and December 31, 2017 were as follows:



	Balance Sheet Classification	September 30, 2018			December 31, 2017*

Forward contracts in gain position		$	1,090		$	3,856
Futures contracts in gain position		802,738			119,825
Futures contracts in loss position		—			(1,363		)
Total forward and futures contracts		803,828			122,318
Cash held by broker		561,491			740,522
	Current Assets	$	1,365,319		$	862,840

Forward contracts in loss position	(Current Liabilities)	$	(1,262,403	)	$	(410,785	)

*Derived from audited financial statements

Futures contracts and cash held by broker are all with one party and the right of offset exists. Therefore, on the balance sheet, these items are netted in one balance regardless of position.

Forward contracts are with multiple parties and the right of offset does not exist. Therefore, these contracts are reported at the gross amounts on the balance sheet.

Realized and unrealized gains and losses related to futures and options contracts related to corn and natural gas purchases are included as a component of cost of revenues and futures and options contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements. Realized and unrealized gains and losses related to forward contracts for corn are included as a component of cost of revenues.

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017



	Statement of Income	Three Months Ended September 30,
	Classification	2018			2017
Net realized and unrealized gains (losses) related to purchase contracts:
Futures contracts	Cost of Revenues	$	762,395		$	355,428
Forward contracts	Cost of Revenues	(844,490		)	(736,938		)

	Statement of Operations	Nine Months Ended September 30,
	Classification	2018			2017
Net realized and unrealized gains (losses) related to purchase contracts:
Futures contracts	Cost of Revenues	$	1,755,445		$	451,365
Forward contracts	Cost of Revenues	(1,498,835		)	(962,864		)

Investments

The Company has investment interests in five companies in related industries. All of these interests are at ownership shares less than 20%. These investments are all flow-through entities. Per ASC 323-30-S99-1, they 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 statements of income and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. The Company consistently follows the practice of recognizing the net income from investments based on the most recent reliable data.

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 amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the fair value of derivative financial instruments, lower of cost or net realizable value accounting for inventory and forward purchase contracts and goodwill impairment evaluation.

Recently Issued Accounting Pronouncements

In February 2016, FASB issued 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 GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The Company does not expect this standard to have a material impact on the Company's consolidated financial statements.

In January 2017, FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350)" (ASU 2017-04). ASU 2107-04 simplifies the test for goodwill impairment. It eliminates the two-step process of assessing goodwill impairment and replaces it with one step which compares the fair value of the reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the fair value up to the amount of the goodwill attributed to the reporting unit. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and for interim periods within that fiscal year. The Company does not expect this standard to have a material impact on the Company's consolidated financial statements.

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 2108-13 improves the effectiveness of the fair value disclosures in the financial statements. It adds, removes and modifies various disclosure requirements relating to the fair value

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

hierarchy. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, and for interim periods within that fiscal year. The Company does not expect this standard to have a material impact on the Company's consolidated financial statements.

NOTE 3. INVENTORY

Inventory consisted of the following as of September 30, 2018 and December 31, 2017:



	September 30, 2018		December 31, 2017*
Raw materials	$	4,295,084	$	2,466,493
Finished goods	834,513		1,193,552
Work in process	371,952		516,362
Parts inventory	1,340,245		1,349,687
	$	6,841,794	$	5,526,094

*Derived from audited financial statements.

NOTE 4. INVESTMENTS

Dakota Ethanol has a 6% investment interest in the Company’s ethanol marketer, Renewable Products Marketing Group, LLC (RPMG). The net income which is reported in the Company’s income statement for RPMG is based on RPMG’s March 31, 2018 unaudited interim results. The carrying amount of the Company’s investment was approximately $1,260,000 and $1,206,000 as of September 30, 2018 and December 31, 2017, respectively.

Dakota Ethanol has a 10% investment interest in Lawrenceville Tanks, LLC (LT), a partnership to operate an ethanol storage terminal in Georgia. The net income which is reported in the Company’s income statement for LT is based on LT’s September 30, 2018 unaudited interim results. The carrying amount of the Company’s investment was approximately $342,000 and $327,000 as of September 30, 2018 and December 31, 2017, respectively.

Lake Area Corn Processors has a 10% investment interest in Guardian Hankinson, LLC (GH), a partnership to operate an ethanol plant in North Dakota. The net income which is reported in the Company’s income statement for GH is based on GH’s September 30, 2018 unaudited interim results. The carrying amount of the Company’s investment was approximately $5,498,000 and $7,151,000 as of September 30, 2018 and December 31, 2017, respectively.

Lake Area Corn Processors has a 17% investment interest in Guardian Energy Management, LLC (GEM), a partnership to provide management services to ethanol plants. The net income which is reported in the Company’s income statement for GEM is based on GEM’s September 30, 2018 unaudited interim results. The carrying amount of the Company’s investment was approximately $33,000 as of September 30, 2018 and December 31, 2017.

Lake Area Corn Processors has an 11% investment interest in Ring-neck Energy and Feeds, LLC (REF), a partnership to operate an ethanol plant in South Dakota. The net income which is reported in the Company’s income statement for REF is based on REF’s September 30, 2018 unaudited interim results. The carrying amount of the Company’s investment was approximately $10,306,000 and $10,023,000 as of September 30, 2018 and December 31, 2017, respectively. 2017 was the initial year for the investment in REF and the ethanol plant is currently under construction. The carrying amount of the investment exceeds the underlying equity in net assets by approximately $920,000. The excess is comprised of a basis adjustment of approximately $474,000 and capitalized interest of $447,000. The excess will be amortized over 20 years when the plant becomes operational. The amortization will be recorded in equity in net income of investments.

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

Condensed, combined unaudited financial information of the Company’s investments in RPMG, LT, GH, GEM and REF is as follows:



Balance Sheet	September 30, 2018			December 31, 2017
Current Assets	$	188,042,901		$	212,154,680
Other Assets	202,375,431			164,254,183
Current Liabilities	173,090,709			131,152,747
Long-term Liabilities	45,310,984			54,754,437
Members' Equity	172,016,639			190,501,679

	Three Months Ended
Income Statement	September 30, 2018			September 30, 2017
Revenue	$	60,363,855		$	65,571,510
Gross Profit	3,772,673			9,661,047
Net Income (Loss)	(91,453		)	5,992,656

	Nine Months Ended
Income Statement	September 30, 2018			September 30, 2017
Revenue	$	190,895,421		$	190,698,705
Gross Profit	16,541,767			20,668,677
Net Income	6,472,358			11,491,803

The following table shows the condensed financial information of Guardian Hankinson:



Balance Sheet	September 30, 2018			December 31, 2017
Current Assets	$	20,455,312		$	22,771,808
Other Assets	106,647,533			117,344,930
Current Liabilities	30,414,613			17,619,748
Long-term Liabilities	42,088,108			51,352,566
Members' Equity	54,600,124			71,144,424

	Three Months Ended
Income Statement	September 30, 2018			September 30, 2017
Revenue	$	56,647,869		$	62,471,512
Gross Profit	1,620,076			7,782,145
Net Income (Loss)	(627,787		)	6,229,570

	Nine Months Ended
Income Statement	September 30, 2018			September 30, 2017
Revenue	$	180,415,511		$	180,821,741
Gross Profit	10,581,169			14,680,187
Net Income	5,455,699			10,369,094

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

The following table shows the condensed financial information of Ring-neck Energy & Feed:



Balance Sheet	September 30, 2018			December 31, 2017
Current Assets	$	335,438		$	50,000,088
Other Assets	92,687,569			42,640,650
Current Liabilities	6,160,030			4,716,781
Long-term Liabilities	3,222,876			3,230,871
Members' Equity	83,640,101			84,693,086

	Three Months Ended
Income Statement	September 30, 2018			September 30, 2017
Revenue	$	—		$	—
Gross Profit	—			—
Net (Loss)	(84,776		)	(753,203		)

	Nine Months Ended
Income Statement	September 30, 2018			September 30, 2017
Revenue	$	—		$	—
Gross Profit	—			—
Net (Loss)	(162,667		)	(847,243		)

The Company recorded equity in net income (loss) of approximately ($63,000) and $546,000 from GH for the three and nine months ended September 30, 2018, respectively. The Company recorded equity in net income of approximately $$623,000 and $1,037,000 from GH for the three and nine months ended September 30, 2017, respectively. The Company recorded equity in net (loss) of approximately ($11,000) and ($18,000) from REF for the three and nine months ended September 30, 2018, respectively. The Company recorded equity in net (loss) of approximately ($85,000) from REF for three and nine months ended September 30, 2017, respectively. The Company recorded equity in net income of approximately $43,000 and $80,000 from its other investments for the three and nine months ended September 30, 2018, respectively. The Company recorded equity in net income of approximately $45,000 and $153,000 from its other investments for the three and nine months ended September 30, 2017, respectively.

NOTE 5. REVOLVING OPERATING NOTE

On February 6, 2018, Dakota Ethanol executed a revolving promissory note from Farm Credit Services of America (FCSA) in the amount up to $10,000,000 or the amount available in accordance with the borrowing base calculation, whichever is less. Interest on the outstanding principal balance will accrue at 300 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.10% at September 30, 2018. There is a non-use fee of 0.25% on the unused portion of the $10,000,000 availability. The note is collateralized by substantially all assets of the Company. The note expires on November 1, 2019. On September 30, 2018, Dakota Ethanol had $0 outstanding and $4,353,000 available to be drawn on the revolving promissory note under the borrowing base.

NOTE 6. LONG-TERM NOTES PAYABLE

On August 1, 2017, Dakota Ethanol executed a term note from FCSA in the amount of $8,000,000. Dakota Ethanol agreed to make monthly interest payments starting September 1, 2017 and annual principal payments of $1,000,000 starting on August 1, 2018. The notes matures on August 1, 2025. Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.35% at September 30, 2018. On September 30, 2018, Dakota Ethanol had $7,000,000 outstanding on the note.

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.35% at September 30, 2018. The note contains a non-use fee of 0.50% on the unused portion of the note. On September 30, 2018, Dakota Ethanol had $13,100,000 outstanding and $16,900,000 available to be drawn on the note.

As part of the note payable agreement, Dakota Ethanol is subject to certain restrictive covenants establishing financial reporting requirements, distribution and capital expenditure limits, minimum debt service coverage ratios, net worth and working capital requirements. The note is collateralized by substantially all assets of the Company.

The balances of the notes payable are as follows:



	September 30, 2018			December 31, 2017*

Note Payable - FCSA	$	20,100,000		$	8,001,000
Less unamortized debt issuance costs	(15,653		)	(29,056		)
	20,084,347			7,971,944
Less current portion	(1,000,000		)	(1,000,000		)
	$	19,084,347		$	6,971,944
*Derived from audited financial statements

Principal maturities for the next five years are estimated as follows:




Years Ending September 30,	Principal
2019	$	1,000,000
2020	1,000,000
2021	1,000,000
2022	1,000,000
2023	1,000,000
thereafter	15,100,000

NOTE 7. FAIR VALUE MEASUREMENTS

The Company complies with the fair value measurements and disclosures standard which defines fair value, establishes a framework for measuring fair value, and expands disclosure for those assets and liabilities carried on the balance sheet on a fair value basis.

The Company’s balance sheet contains derivative financial instruments that are recorded at fair value on a recurring basis. Fair value measurements and disclosures require that assets and liabilities carried at fair value be classified and disclosed according to the process for determining fair value. There are three levels of determining fair value.

Level 1 uses quoted market prices in active markets for identical assets or liabilities.

Level 2 uses observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3 uses unobservable inputs that are not corroborated by market data.

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

Derivative financial instruments. Commodity futures and 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 CBOT and NYMEX markets. Over-the-

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

counter commodity options contracts are reported at fair value utilizing Level 2 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 over-the-counter markets. Forward purchase contracts are reported at fair value utilizing Level 2 inputs. For these contracts, the Company obtains fair value measurements from local grain terminal bid values. The fair value measurements consider observable data that may include live trading bids from local elevators and processing plants which are based off the CBOT markets.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 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
September 30, 2018

Assets:
Derivative financial instruments,
futures contracts	$	802,738		$	802,738		$	—		$	—
forward contracts	$	1,090		$	—		$	1,090		—

Liabilities:
Derivative financial instruments,
futures contracts	$	—		$	—		$	—		$	—
forward contracts	$	(1,262,403	)	$	—		$	(1,262,403	)	$	—

December 31, 2017*

Assets:
Derivative financial instruments,
futures contracts	$	119,825		$	119,825		$	—		$	—
forward contracts	$	3,856		$	—		$	3,856		—

Liabilities:
Derivative financial instruments,
futures contracts	$	(1,363	)	$	(1,363	)	$	—		$	—
forward contracts	$	(410,785	)	$	—		$	(410,785	)	$	—

*Derived from audited financial statements.

During the three and nine months ended September 30, 2018, the Company did not make any changes between Level 1 and Level 2 assets and liabilities. As of September 30, 2018 and December 31, 2017, the Company did not have any Level 3 assets or liabilities.

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets and financial liabilities measured at fair value on a non-recurring basis were not significant at September 30, 2018 and December 31, 2017.

Disclosure requirements for fair value of financial instruments require disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018 and 2017

basis or nonrecurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non recurring basis are discussed above.

The Company believes the carrying amount of cash and cash equivalents (level 1), accounts receivable (level 2), other receivables (level 2), accounts payable and accruals (level 2) and short-term debt (level 3) approximates fair value.

The carrying amount of long-term obligations (level 3) at September 30, 2018 of $20,100,000 had an estimated fair value of approximately $20,100,000 based on estimated interest rates for comparable debt. The carrying amount of long-term obligations at December 31, 2017 of $8,001,000 had an estimated fair value of approximately $8,001,000.

NOTE 8. RELATED PARTY TRANSACTIONS

Dakota Ethanol has a 6% interest in RPMG, and Dakota Ethanol has entered into marketing agreements for the exclusive rights to market, sell and distribute the entire ethanol, dried distillers grains and corn oil inventories produced by Dakota Ethanol. The marketing fees are included in net revenues.

Revenues and marketing fees related to the agreements are as follows:



	Three Months Ended September 30				Nine Months Ended September 30
	2018		2017		2018		2017

Revenues ethanol	$	14,670,012	$	15,468,141	$	46,132,851	$	50,916,644
Revenues distillers dried grains	1,072,862		1,010,769		1,687,934		3,786,652
Revenues corn oil	570,841		749,923		1,665,261		2,316,938
Marketing fees ethanol	65,865		61,260		197,595		183,780
Marketing fees distillers dried grains	8,115		6,642		11,853		28,986
Marketing fees corn oil	4,726		5,621		14,250		17,661

	September 30, 2018		December 31, 2017*
Amounts due included in accounts receivable	$	1,889,329	$	2,749,502

*Derived from audited financial statements.

The Company purchased corn and services from members of its Board of Managers that farm and operate local businesses. The Company also purchased ingredients from RPMG. Purchases during the three and nine months ended September 30, 2018 totaled approximately $319,000 and $1,181,000, respectively. Purchases during the three and nine months ended September 30, 2017 totaled approximately $212,000 and $898,000, respectively. As of September 30, 2018 and December 31, 2017, the amount we owed to related parties was approximately $20,000 and $45,000, respectively.

NOTE 9. COMMITMENTS

Dakota Ethanol entered into a design-build agreement with Nelson Engineering Co. for the design and construction of the plant expansion to increase its production capacity to approximately 90 million gallons of ethanol per year. The cost of the expansion is expected to be approximately $35.9 million. There is approximately $14.6 million remaining as of September 30, 2018. The expansion is currently under construction. The Company anticipates that the expansion will be complete during the Company's second quarter of 2019. The Company will pay for the project with cash flows from operations and the long-term revolving debt as amended on February 6, 2018.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We prepared the following discussion and analysis to help you better understand our financial condition, changes in our financial condition, and results of operations for the three and nine month periods ended September 30, 2018, compared to the same periods of the prior year. This discussion should be read in conjunction with the consolidated financial statements and the Management's Discussion and Analysis section for the fiscal year ended December 31, 2017, included in the Company's Annual Report on Form 10-K for 2017.

Disclosure Regarding Forward-Looking Statements

This report contains historical information, as well as forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance, or our expected future operations and actions. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "future," "intend," "could," "hope," "predict," "target," "potential," "continue" or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions based on current information and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the reasons described in this report and our annual report on Form 10-K for the fiscal year ended December 31, 2017.

The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no duty to update these forward-looking statements, even though our situation may change in the future. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements.

Overview

Lake Area Corn Processors, LLC is a South Dakota limited liability company that owns and manages its wholly-owned subsidiary, Dakota Ethanol, LLC. Dakota Ethanol, LLC owns and operates an ethanol plant located near Wentworth, South Dakota that has a nameplate production capacity of 40 million gallons of ethanol per year. Lake Area Corn Processors, LLC is referred to in this report as "LACP," the "company," "we," or "us." Dakota Ethanol, LLC is referred to in this report as "Dakota Ethanol" "we" "us" or the "ethanol plant."

Our revenue is derived from the sale and distribution of our ethanol, distillers grains and corn oil. The ethanol plant currently operates in excess of its nameplate capacity, producing approximately 50 million gallons of ethanol per year. Corn is supplied to us primarily from our members who are local agricultural producers and from purchases of corn on the open market. We have engaged Renewable Products Marketing Group, Inc. ("RPMG, Inc.") to market all of the ethanol and corn oil that we produce at the ethanol plant. Further, RPMG, Inc. markets all of the distillers grains that we produce that we do not market internally to local customers.

On November 30, 2017, Dakota Ethanol entered into a design-build agreement with Nelson Engineering Co. for the design and construction of the plant expansion to increase its production capacity to approximately 90 million gallons of ethanol per year. The cost of the expansion is expected to be approximately $36 million. The expansion is expected to be complete during the second quarter of 2019.

On February 6, 2018, Dakota Ethanol executed two different revolving promissory notes from Farm Credit Services of America. The first revolving promissory note, was for an amount of up to $10,000,000 to be used for working capital. This note expires on November 1, 2019. We also entered into an Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") with FCSA. Pursuant to the Amended and Restated Credit Agreement, we increased our total credit availability to $40 million to support our expansion project. Further, the maturity date of this increased credit availability under our Amended and Restated Credit Agreement was extended to January 1, 2026.

In recent years, the ethanol industry in the United States has increased exports of ethanol and distillers grains. In January 2017, the Chinese issued final tariffs on U.S. distillers grains. The Chinese distillers grains anti-dumping tariffs range from 42.2% to 53.7% and the anti-subsidy tariffs range from 11.2% to 12%. In addition, the Chinese government increased its ethanol import tariff from 5% to 30% as of January 1, 2017 and increased the tariff again in April 2018 from 30% to 45%. These tariffs have had

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a negative impact on market ethanol and distillers grains prices in the United States. Also, the European Union has imposed a tariff on imported ethanol. The anti-dumping tariff was scheduled to expire in 2018 which could have resulted in additional exports to the European Union during the 2018 fiscal year, however, the European Commission initiated an expiry review of the anti-dumping tariffs in February of 2018. As such, the anti-dumping tariffs will remain in place during the investigation, which is set to conclude within fifteen months.

Further, on August 23, 2017, Brazil imposed a twenty percent import tariff on ethanol imported from the United States.

Results of Operations

Comparison of the Fiscal Quarters Ended September 30, 2018 and 2017

The following table shows the results of our operations and the percentage of revenues, cost of revenues, operating expenses and other items to total revenues in our consolidated statements of income for the fiscal quarters ended September 30, 2018 and 2017:



	2018					2017
Income Statement Data	Amount			%		Amount		%
Revenues	$	18,796,356		100.0		$	19,479,798	100.0

Cost of Revenues	18,078,236			96.2		17,511,118		89.9

Gross Profit	718,120			3.8		1,968,680		10.1

Operating Expense	872,053			4.6		834,459		4.3

Income (Loss) from Operations	(153,933		)	(.8	)	1,134,221		5.8

Other Income (Expense)	(28,285		)	(0.2	)	681,126		3.5

Net Income (Loss)	$	(182,218	)	(1.0	)	$	1,815,347	9.3

Revenues

Revenue from ethanol sales decreased by approximately 5% during our third quarter of 2018 compared to the same period of 2017. Revenue from distillers grains sales increased by approximately 9% during our third quarter of 2018 compared to the same period of 2017. Revenue from corn oil sales decreased by approximately 24% during our third quarter of 2018 compared to the same period of 2017.

Ethanol

Our ethanol revenue was approximately $807,000 less during our third quarter of 2018 compared to our third quarter of 2017, a decrease of approximately 5%. This decrease in ethanol revenue was due to a decrease in the average price we received for the ethanol we sold during our third quarter of 2018 compared to our third quarter of 2017. We sold approximately 9% more gallons of ethanol during our third quarter of 2018 compared to the same period of 2017, an increase of approximately 984,000 gallons, due primarily to increased inventory sales of ethanol during the 2018 period. Management anticipates comparable ethanol production and sales during the remainder of our 2018 fiscal year.

The average price we received for our ethanol was lower on a per gallon basis during our third quarter of 2018 compared to our third quarter of 2017, with a decrease of approximately 13%. Management attributes this decrease in ethanol prices with increased market ethanol supplies which were not met by corresponding increases in demand during our third quarter of 2018.

Distillers Grains

Our total distillers grains revenue was approximately 9% greater during our third quarter of 2018 compared to the same period of 2017, due to increased market distillers grains prices due to increased export and domestic demand. We sold approximately 9% fewer total tons of distillers grains during our third quarter of 2018 compared to the same period of 2017 due to a higher ethanol yield and a lower distillers grain yield.

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The average price we received for our dried distillers grains was approximately 25% greater during our third quarter of 2018 compared to the same period of 2017, an increase of approximately $25 per ton. Management attributes the increase in dried distillers grains prices during the third quarter of 2018 with a stronger distillers grain market due to increased demand along with increased exports. The average price we received for our modified/wet distillers grains, on a dry-equivalent basis, was approximately 18% greater for our third quarter of 2018 compared to the same period of 2017, an increase of approximately $19 per ton. Management attributes this increase in modified/wet distillers grains prices with a stronger market due to increased demand along with increased exports. Management anticipates that distillers grains prices will remain stable for the near future, especially due to the strong demand for corn which has been influenced by increased export activity.

Corn Oil

Our total pounds of corn oil sold decreased by approximately 12% during our third quarter of 2018 compared to the same period of 2017, a decrease of approximately 313,000 pounds, primarily due to decreased extraction run time. Management anticipates that corn oil production will remain at current levels for the rest of our 2018 fiscal year and into our 2019 fiscal year.

The average price per pound we received for our corn oil was approximately 14% less for our third quarter of 2018 compared to the same period of 2017. The decrease in price is related to the increase of supply of corn oil. Corn oil is frequently used as a raw material in biodiesel production. Management expects corn oil prices to remain lower for the rest of our 2018 fiscal year and into our 2019 fiscal year as biodiesel production is typically lower during the winter months.

Cost of Revenues

The primary raw materials we use to produce ethanol and distillers grains are corn and natural gas.

Corn

Our cost of revenues relating to corn was approximately 4% greater for our third quarter of 2018 compared to the same period of 2017 due to increased corn bushels used, partially offset by decreased corn prices per bushel during the 2018 period.

Our average cost per bushel of corn decreased by approximately 1% for our third quarter of 2018 compared to our third quarter of 2017. Management attributes the decrease to increased corn supplies due to strong yields. Management anticipates that corn prices may be slightly increased during our fourth quarter due to increased export activity.

We consumed approximately 5% more bushels of corn during our third quarter of 2018 compared to the same period of 2017 due to increased production at the ethanol plant, partially offset by improved corn-to-ethanol conversion efficiency. Management anticipates that our corn consumption will be comparable in our final quarter.

Natural Gas

Our cost of revenues related to natural gas increased by approximately $17,000, an increase of approximately 2%, for our third quarter of 2018 compared to our third quarter of 2017. This increase was primarily due to increased natural gas consumption during our third quarter of 2018 compared to the same period of 2017 offset by stable natural gas prices per MMBtu during the 2018 period.

Our average cost per MMBtu of natural gas during our third quarter of 2018 was comparable to the cost per MMbtu for our third quarter of 2017. Management attributes this with stable natural gas supplies and relatively consistent natural gas demand.

The volume of natural gas we used increased by approximately 2% during our third quarter of 2018 compared to the same period of 2017 due primarily to increased production at the ethanol plant, partially offset by increased operating efficiency. Management anticipates comparable natural gas consumption during the remaining quarter of our 2018 fiscal year.

Operating Expenses

Our operating expenses were greater for our third quarter of 2018 compared to the same period of 2017 due primarily to increased salaries and benefit costs along with increased environmental compliance costs.

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Other Income and Expense

Our interest and other income was less for our third quarter of 2018 compared to the same period of 2017 due to less earnings from our investments which are companies involved in the ethanol industry. We had no interest expense during our third quarter of 2018 since we are capitalizing interest related to our expansion project until the expansion is complete.

Comparison of the Nine Months Ended September 30, 2018 and 2017



	2018			2017
Income Statement Data	Amount		%	Amount		%
Revenues	$	58,677,962	100.0	$	63,806,023	100.0

Cost of Revenues	53,282,450		90.8	57,594,260		90.3

Gross Profit	5,395,512		9.2	6,211,763		9.7

Operating Expense	2,847,557		4.9	2,711,909		4.3

Income from Operations	2,547,955		4.3	3,499,854		5.5

Other Income	613,503		1.0	1,240,216		1.9

Net Income	$	3,161,458	5.4	$	4,740,070	7.4

Revenues

Revenue from ethanol sales decreased by approximately 9% during the nine months ended September 30, 2018 compared to the same period of 2017. Revenue from distillers grains sales was slightly higher during the nine months ended September 30, 2018 and compared to the same period of 2017. Revenue from corn oil sales decreased by approximately 28% during the nine months ended September 30, 2018 compared to the same period of 2017.

Ethanol

Our ethanol revenue was approximately $4.76 million less during our nine months ended September 30, 2018 compared to the nine months ended September 30, 2017, a decrease of approximately 9%. This decrease in ethanol revenue was due primarily to a decrease in the volume of ethanol we sold, and a decrease in the average price we received per gallon of ethanol sold during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. We sold approximately 4% fewer gallons of ethanol during the nine months ended September 30, 2018 compared to the same period of 2017, a decrease of approximately 1,435,000 gallons, due to decreased production at the plant related to equipment limiting throughput.

The average price we received for our ethanol was approximately $0.08 less per gallon during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017, a decrease of approximately 6%. Management attributes this decrease in ethanol prices with excess ethanol supply in the market which was not met by corresponding increases in demand during the nine months ended September 30, 2018.

Distillers Grains

Our total distillers grains revenue was slightly higher during the nine months ended September 30, 2018 compared to the same period of 2017 due to increased demand, including higher export demand. We sold approximately 16% fewer total tons of distillers grains during the nine months ended September 30, 2018 compared to the same period of 2017, due to decreased overall production at the ethanol plant along with increased corn-to-ethanol conversion efficiency.

The average price we received for our dried distillers grains was approximately 44% greater during the nine months ended September 30, 2018 compared to the same period of 2017, an increase of approximately $42 per ton. Management attributes the increase in dried distillers grains prices during the nine months ended September 30, 2018 with a stronger distillers grain

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market due to increases in prices of soybean meal and distillers grains exports. The average price we received for our modified/wet distillers grains, on a dry-equivalent basis, was approximately 15% greater for the nine months ended September 30, 2018 compared to the same period of 2017, an increase of approximately $16 per ton. Management attributes this increase in modified/wet distillers grains prices with a stronger market due to increases in prices of soybean meal and distillers grains exports.

Corn Oil

Our total pounds of corn oil sold decreased by approximately 15% during the nine months ended September 30, 2018 compared to the same period of 2017, a decrease of approximately 1,285,000 pounds, primarily due to increased downtime for our corn oil extraction equipment and decreased overall production at the ethanol plant.

The average price per pound we received for our corn oil was approximately 15% less for the nine months ended September 30, 2018 compared to the same period of 2017. The decrease in price is related to the increase in the supply of soybean oil, which may be used as a substitute for corn oil in certain circumstances.

Cost of Revenues

Corn

Our cost of revenues relating to corn was approximately 7% less for the nine months ended September 30, 2018 compared to the same period of 2017 due to decreased corn bushels used.

Our average cost per bushel of corn decreased by approximately 0.2% for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. We consumed approximately 7% fewer bushels of corn during the nine months ended September 30, 2018 compared to the same period of 2017 due to decreased production at the ethanol plant.

Natural Gas

Our cost of revenues related to natural gas decreased by approximately $370,000, a decrease of approximately 12%, for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. This decrease was primarily due to decreased natural gas consumption, partially offset by higher natural gas prices per MMBtu during the nine months ended September 30, 2018 compared to the same period of 2017.

Our average cost per MMBtu of natural gas during the nine months ended September 30, 2018 was approximately 1% greater compared to the cost per MMbtu for the nine months ended September 30, 2017. Management attributes this slight increase in our average natural gas costs with generally stable natural gas prices in 2018, along with stable market demand for natural gas.

The volume of natural gas we used decreased by approximately 12% during the nine months ended September 30, 2018 compared to the same period of 2017 due primarily to decreased production of dried distillers grains and increased production of distillers grain in the modified/wet form.

Operating Expenses

Our operating expenses were greater for the nine months ended September 30, 2018 compared to the same period of 2017 due primarily to increased wages and benefits due to increased staffing at the ethanol plant.

Other Income and Expense

Our interest and other income was greater for the nine months ended September 30, 2018 compared to the same period of 2017. Our income related to our investments was less during the nine months ended September 30, 2018 compared to the same period of 2017 primarily due to depressed profits in the ethanol industry. We had no interest expense during the nine months ended September 30, 2018 compared to the same period of 2017, due to interest expense being capitalized during the 2018 period.

Changes in Financial Condition for the Nine Months Ended September 30, 2018

Current Assets

Our cash on hand at September 30, 2018 was less compared to December 31, 2017 due to the cash we used for capital projects during 2018. We had fewer accounts receivable at September 30, 2018 compared to December 31, 2017 due to the timing

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of our quarter end and shipments of our products. The value of our inventory was higher at September 30, 2018 compared to December 31, 2017 due to increased corn inventory.

Property and Equipment

The value of our property and equipment was higher at September 30, 2018 compared to December 31, 2017 as a result of capital expenditures for the RTO construction and plant expansion during our 2018 fiscal year.

Other Assets

The value of our investments was less at September 30, 2018 compared to December 31, 2017 due to cash distributions in excess of earnings from our investments.

Current Liabilities

We had fewer outstanding checks in excess of bank balances at September 30, 2018 compared to December 31, 2017. We use our revolving loan to pay any checks which are presented for payment which exceed the cash we have available in our accounts. Our accounts payable was slightly higher at September 30, 2018 compared to December 31, 2017 because of our expansion project. We had a larger liability associated with our unrealized losses on our derivative financial instruments at September 30, 2018 compared to December 31, 2017 due to changes in the corn market which impacts those derivative instrument positions.

Long-Term Liabilities

Our long-term liabilities were greater at September 30, 2018 compared to December 31, 2017 due to borrowing related to our plant expansion project.

Liquidity and Capital Resources

Our main sources of liquidity are cash from our continuing operations, distributions we receive from our investments and amounts we have available to draw on our revolving credit facilities. Management does not anticipate that we will need to raise additional debt or equity financing in the next twelve months and management believes that our current sources of liquidity will be sufficient to continue our operations during that time period. We anticipate that any capital expenditures we undertake related to our expansion project will be paid out of cash from operations and existing loans, and will not require any additional debt or equity financing.

Currently, we have two revolving loans which allow us to borrow funds for working capital. These loans are described in greater detail below in the section entitled "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Indebtedness." As of September 30, 2018, we had $13,100,000 outstanding and $21,253,000 available to be drawn on our revolving loans, after taking into account the borrowing base calculation. Management anticipates that this is sufficient to maintain our liquidity and continue our operations.

The following table shows cash flows for the nine months ended September 30, 2018 and 2017:



	Nine Months Ended September 30,
	2018			2017
Net cash provided by operating activities	$	4,588,867		$	7,033,946
Net cash (used in) investing activities	(15,472,583		)	(11,462,895		)
Net cash provided by financing activities	8,861,906			5,358,847

Cash Flow From Operations. Our operating activities provided less cash during the nine months ended September 30, 2018 compared to the same period of 2017, due primarily to reduced net income during the 2018 period.

Cash Flow From Investing Activities. Our investing activities used more cash during the nine months ended September 30, 2018 compared to the same period of 2017, due to our plant expansion project.

Cash Flow From Financing Activities. Our financing activities provided more cash during the nine months ended September 30, 2018 compared to the same period of 2017, due primarily to increased cash we received from our debt instruments.

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Indebtedness

We entered into a comprehensive credit facility with Farm Credit Services of America, PCA and Farm Credit Services of America, FLCA (collectively "FCSA"). We have a $10 million revolving operating line of credit (the "Operating Line") and a $40 million reducing revolving loan (the "Reducing Revolving Loan"). All of our assets, including the ethanol plant and equipment, its accounts receivable and inventory, serve as collateral for our loans with FCSA.

On August 1, 2017, we executed an amendment to our credit agreement to create a new $8 million term loan which we used to finance a portion of our investment in Ring-neck Energy & Feed, LLC.

On February 6, 2018, we executed an Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") with FCSA. Pursuant to the Amended and Restated Credit Agreement, we increased our total credit availability to $40 million to support our expansion project. Further, the maturity date of this increased credit availability under our Amended and Restated Credit Agreement was extended to January 1, 2026. Until February 1, 2023, interest will accrue pursuant to the Amended and Restated Credit Agreement on our increased credit availability at the one month London Interbank Offered Rate ("LIBOR") plus 3.25% per year. We agreed to pay a fee of 0.50% on the unused portion of the increased credit availability.

Operating Line

Reducing Revolving Loan

On February 6, 2018, Dakota Ethanol executed a reducing revolving promissory note from FCSA in the amount up to $40,000,000 or the amount available in accordance with the borrowing availability under the credit agreement. The amount Dakota Ethanol can borrow on the note decreases by $1,750,000 semi-annually starting on January 1, 2020 until the maximum balance reaches $26,000,000 on July 1, 2023. The note matures on January 1, 2026. Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.35% at March 31, 2018. The note contains a non-use fee of 0.50% on the unused portion of the note. On September 30, 2018, Dakota Ethanol had $13,100,000 outstanding and $16,900,000 available to be drawn on the note.

2017 Term Loan

On August 1, 2017, Dakota Ethanol executed a term note with FCSA in the amount of $8 million. Dakota Ethanol agreed to make monthly interest payments starting September 1, 2017 and annual principal payments of $1,000,000 starting on August 1, 2018. The notes matures on August 1, 2025. Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.35% at September 30, 2018. On September 30, 2018, Dakota Ethanol had $7,000,000 outstanding on the note.

Covenants

Our credit facilities with FCSA are subject to various loan covenants. If we fail to comply with these loan covenants, FCSA can declare us to be in default of our loans. The material loan covenants applicable to our credit facilities are our working capital covenant, local net worth covenant and our debt service coverage ratio. We are required to maintain working capital (current assets minus current liabilities plus availability on our revolving loan) of at least $13.5 million. We are required to maintain local net worth (total assets minus total liabilities minus the value of certain investments) of at least $28 million. We are required to maintain a debt service coverage ratio of at least 1.25:1.00.

As of September 30, 2018, we were in compliance with all of our loan covenants. Management's current financial projections indicate that we will be in compliance with our financial covenants for the next 12 months and we expect to remain in compliance thereafter. Management does not believe that it is reasonably likely that we will fall out of compliance with our

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material loan covenants in the next 12 months. If we fail to comply with the terms of our credit agreements with FCSA, and FCSA refuses to waive the non-compliance, FCSA may require us to immediately repay all amounts outstanding on our loans.

Application of Critical Accounting Policies

Management uses estimates and assumptions in preparing our consolidated financial statements in accordance with 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 consolidated financial statements, we believe that the following are the most critical:

Derivative Instruments

We enter into short-term forward, option and futures contracts for ethanol, corn and natural gas as a means of managing exposure to changes in commodity and energy prices. All of our derivatives are designated as non-hedge derivatives, and accordingly are recorded at fair value with changes in fair value recognized in net income. Although the contracts are considered economic hedges of specified risks, they are not designated as and accounted for as hedging instruments.

As part of our trading activity, we use futures and option contracts offered through regulated commodity exchanges to reduce our risk and we are exposed to risk of loss in the market value of inventories. To reduce that risk, we generally take positions using cash and futures contracts and options.

Realized and unrealized gains and losses related to futures and options contracts for corn and natural gas purchases are included as a component of cost of revenues and futures and options contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements. Realized and unrealized gains and losses related to forward contracts for corn are included as a component of cost of revenues. The fair values of derivative contracts are presented on the accompanying balance sheet as derivative financial instruments.

Goodwill

Annually, as well as when an event triggering impairment may have occurred, the Company performs an impairment test on goodwill. The Company performs a quantitative analysis that tests for impairment. The second step, if necessary, measures the impairment. The Company performs the annual analysis on December 31 of each fiscal year.

Inventory Valuation

Revenue Recognition

Revenue from the production of ethanol and related products is recorded when control transfers to customers. Generally, control transfers when ethanol and related products are shipped FOB shipping point, based on written contract terms between Dakota Ethanol and its customers. Collectability of revenue is reasonably assured based on historical evidence of collectability between Dakota Ethanol and its customers. Interest income is recognized as earned.

Off-Balance Sheet Arrangements

We do not have any 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 and interest rates as discussed below. We have no exposure to foreign currency risk as all of our business is conducted in U.S. Dollars. We have loans that are subject to variable interest rates. We use derivative financial instruments as part of an overall strategy to manage market risk. We

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use cash, futures and option contracts to hedge changes to the commodity prices of corn and natural gas. 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.

Interest Rate Risk

We are exposed to market risk from changes in interest rates. Exposure to interest rate risk results primarily from holding loans which bear variable interest rates. As of September 30, 2018, we had $20,100,000 outstanding on our variable interest rate loans with interest accruing at a rate of 5.35%. Our variable interest rates are calculated by adding a set basis to LIBOR. If we were to experience a 10% increase in LIBOR, the annual effect such change would have on our income statement, based on the amount we had outstanding on our variable interest rate loans as of September 30, 2018, would be approximately $42,000.

Commodity Price Risk

We are exposed to market risk from changes in commodity prices. Exposure to commodity price risk results from our dependence on corn and natural gas in the ethanol production process. We seek to minimize the risks from fluctuations in the prices of corn and natural gas 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, they are not designated as such for hedge accounting purposes, which would match the gain or loss on our hedge positions to the specific commodity purchase being hedged. We are marking to market our hedge positions, which means as the current market price of our hedge positions changes, the gains and losses are immediately recognized in our cost of revenues.

The immediate recognition of hedging gains and losses 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. We recorded a combined increase to our cost of revenues of approximately $82,000 related to derivative instruments for the quarter ended September 30, 2018. We recorded a combined increase to our cost of revenues of approximately $382,000 related to derivative instruments for the quarter ended September 30, 2017. There are several variables that could affect the extent to which our derivative instruments are impacted by price fluctuations in the cost of corn or natural gas. However, it is likely that commodity cash prices will have the greatest impact on the derivatives instruments with delivery dates nearest the current cash price.

As corn and natural gas prices move in reaction to market trends and information, our income statement will be affected depending on the impact such market movements have on the value of our derivative instruments. Depending on market movements, crop prospects and weather, these price protection positions may cause immediate adverse effects to our financial results, but are designed to produce long-term positive growth for us.

As of September 30, 2018, we were committed to purchasing approximately 3.4 million bushels of corn with an average price of $3.42 per bushel. These corn purchases represent approximately 19% of our project plant corn usage for the next 12 months.

As of September 30, 2018, we were committed to purchasing approximately 620,000 MMBtus of natural gas with an average price of $2.52 per MMBtu. Under these arrangements, the Company assumes the risk of a price decrease in the market price of natural gas between the time the price is fixed and the time the natural gas is delivered. The Company accounts for these transactions as normal purchases, and accordingly, does not mark these transactions to market. The natural gas purchases represent approximately 53% of the projected annual plant requirements.

As of September 30, 2018, we were committed to selling approximately 36,000 dry equivalent tons of distillers grains with an average price of $123 per ton. The distillers grains sales represent approximately 25% of the projected annual plant production.

As of September 30, 2018, we were committed to selling approximately 1.0 million pounds of distillers corn oil with an average price of $0.25 per pound. The distillers corn oil sales represent approximately 9% of the projected annual plant production.

We do not have any firm-priced sales commitments for ethanol as of September 30, 2018.

A sensitivity analysis has been prepared to estimate our exposure to corn, natural gas and ethanol price risk. Market risk related to these factors is estimated as the potential change in income resulting from a hypothetical 10% adverse change in the average cost of our corn and natural gas prices and average ethanol price as of September 30, 2018, 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

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and sale of these commodities for a one year period from September 30, 2018. 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
Ethanol	52,500,000	Gallons	10	%	$	5,985,000
Corn	16,296,308	Bushels	10	%	$	4,693,337
Natural Gas	561,250	MMBTU	10	%	$	151,538

For comparison purposes, our sensitivity analysis for our quarter ended September 30, 2017 is set forth below.



	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
Ethanol	52,500,000	Gallons	10	%	$	6,930,000
Corn	16,835,707	Bushels	10	%	$	4,865,519
Natural Gas	1,181,250	MMBTU	10	%	$	335,475

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 under 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 Chief Executive Officer (the principal executive officer), Scott Mundt, along with our Chief Financial Officer (the principal financial officer), Rob Buchholtz, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2018. Based on this review and evaluation, these officers believe that our disclosure controls and procedures are effective in ensuring that material information related to us is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission.

For the fiscal quarter ended September 30, 2018, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time in the ordinary course of business, Dakota Ethanol or Lake Area Corn Processors may be named as a defendant in legal proceedings related to various issues, including, worker's compensation claims, tort claims, or contractual disputes. We are not currently involved in any material legal proceedings, directly or indirectly, and we are not aware of any claims pending or threatened against us or any of the managers that could result in the commencement of material legal proceedings.

ITEM 1A. RISK FACTORS

The risk factors below should be read in conjunction with the risk factors previously discussed in our annual report on Form 10-K for the fiscal year ended December 31, 2017. Additional risks and uncertainties, including risks and uncertainties not presently known to us, or that we currently deem immaterial, could also have an adverse effect on our business, financial condition and/or results of operations.

Failures Of Our Information Technology Infrastructure Could Have A Material Adverse Effect On Operations. We utilize various software applications and other information technology that are critically important to our business operations. We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic and financial information, to manage a variety of business processes and activities, including production, manufacturing, financial, logistics,

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sales, marketing and administrative functions. We depend on our information technology infrastructure to communicate internally and externally with employees, customers, suppliers and others. We also use information technology networks and systems to comply with regulatory, legal and tax requirements. These information technology systems, some of which are managed by third parties, may be susceptible to damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, computer viruses, attacks by computer hackers or other cybersecurity risks, telecommunication failures, user errors, natural disasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, and our disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results of operations may be materially and adversely affected.

A Cyber Attack Or Other Information Security Breach Could Have A Material Adverse Effect On Our Operations and Result In Financial Losses. We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact. If we are unable to prevent cyber attacks and other information security breaches, we may encounter significant disruptions in our operations which could adversely impact our business, financial condition and results of operations or result in the unauthorized disclosure of confidential information. Such breaches may also harm our reputation, result in financial losses or subject us to litigation or other costs or penalties.

Government policies and regulations, particularly those affecting the agricultural sector and related industries, could adversely affect our operations and profitability. Agricultural commodity production and trade flows are significantly affected by government policies and regulations. Governmental policies affecting the agricultural industry, such as taxes, trade tariffs, duties, subsidies, import and export restrictions on commodities and commodity products, can influence industry profitability, the planting of certain crops, the location and size of crop production, whether unprocessed or processed commodity products are traded, and the volume and types of imports and exports. In addition, international trade disputes can adversely affect trade flows by limiting or disrupting trade between countries or regions. Future governmental policies, regulations or actions affecting our industry may adversely affect the supply of, demand for and prices of our products, restrict our ability to do business and cause our financial results to suffer.

We may experience negative impacts of higher ethanol tariffs and other disruptions to international agricultural trade related to current trade actions announced by the Trump administration and responsive actions announced by trading partners, including by China. In April of 2018, the Chinese government increased the tariff on U.S. ethanol imports into China from 30% to 45%. We cannot estimate the exact effect this tariff increase will have on the overall domestic ethanol market. However, the increased tariff is expected to reduce overall U.S. ethanol export demand, which could have a negative effect on U.S. domestic ethanol prices.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following exhibits are filed as part of this report.

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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		The following financial information from Lake Area Corn Processors, LLC's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017, (ii) Consolidated Statements of Income for the three and nine month periods ended September 30, 2018 and 2017, (iii) Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017, and (iv) the Notes to Unaudited Consolidated Financial Statements.**

* 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.



		LAKE AREA CORN PROCESSORS, LLC

Date:	November 14, 2018	/s/ Scott Mundt
		Scott Mundt
		President and Chief Executive Officer (Principal Executive Officer)

Date:	November 14, 2018	/s/ Robbi Buchholtz
		Robbi Buchholtz
		Chief Financial Officer (Principal Financial and Accounting Officer)