GGROU 10-K & 10-Q changes, risk factors and insider trading

The following discussion should be read in conjunction with the Cooperative’s financial statements, the notes thereto and the other financial data included elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements. Such statements are based on assumptions by the Cooperative’s management as of the date of this report and are subject to risks and uncertainties, as discussed in the section entitled “Forward Looking Statements.” Readers should not place undue reliance on such forward-looking statements. PleaseManagement’s discussion focuses on 2025 financial results compared to 2024. For a discussion of 2024 financial results as compared with 2023, please refer to Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a comparative discussion of our financial results for the fiscal year ended December 31, 2023 as compared with the fiscal year ended December 31, 2022.2024.

The Cooperative sold approximately 15.5 million bushels of corn on behalf of its members in each of fiscal 20232024 and 2024.2025. The Cooperative recognized corn revenue of $61,998,000$62,279,000 in fiscal 20242025 as compared to $88,019,000$61,998,000 in fiscal 2023,2024, aan decreaseincrease of 29.6%0.5% due primarily to aan decreaseincrease in the price of corn sold. The Cooperative recognized corn expense of $62,293,000 in fiscal 2025 and $62,033,000 in fiscal 20242024, and $88,278,000 in fiscal 2023, a decreasean increase of 29.7%0.4% due primarily to aan decreaseincrease in the price of corn purchased.

In fiscal 2024,2025, the Cooperative’s members, on the Cooperative’s behalf, delivered to Cargill 4,123,0003,769,000 bushels of corn using Method A and 11,367,00011,721,000 bushels of corn using Method B. In fiscal 2023, 2024, the Cooperative’s members, on the Cooperative’s behalf, delivered to Cargill 4,262,0004,123,000 bushels of corn using Method A and 11,228,00011,367,000 bushels of corn using Method B. In fiscal year 2024,2025, the Cooperative recognized incentive fee expense of $206,000$188,000 and agency fee income of $231,000$234,000 for the period. In fiscal year 2023,2024, the Cooperative recognized incentive fee expense of $426,000$206,000 and agency fee income of $225,000.$231,000. Additionally, the Cooperative paid Cargill $60,000 in each of fiscal 20242025 and $63,000 in fiscal 20232024 for services as our agent in connection with the Cooperative’s corn marketing operation.

The Cooperative’s general and administrative expenses include salaries and benefits, professional fees and fees paid to our Board of Directors. The general and administrative expenses for fiscal 20242025 were $608,000, a$670,000, decreasean increase of $7,000$62,000 or 1%10% as compared to fiscal 2023. 2024. The decrease increase was due primarily to reducedincreased generallegal administrativeand costs.consulting expense.

Other income for the fiscal year ended December 31, 2024,2025, was $444,000$282,000 compared to $121,000$444,000 for the fiscal year ended December 31, 2023.2024. The increasedecrease was due primarily to increaseddecreased investment income. Realized gain(loss) on investments for the fiscal year ended December 31, 2024, was $0 as compared to ($266,000) for the same respective period in 2023.

The Cooperative’s working capital was $5,924,000 at December 31, 2025 and $8,729,000 at December 31, 2024 and $6,542,000 at December 31, 2023.2024. The increased decreased working capital in 20242025 as compared to 20232024 was primarily a result of timing increased ofmember maturities of certain investment securitiesdistributions in 20242025 compared to 2023.2024.

The Cooperative used operating cash flows of $396,000 for the fiscal year ended December 31, 20242025 and $281,000 $396,000 for the fiscal year ended December 31, 2023. The increased use of operating cash flows in 2024 compared to 2023 is primarily due to increased payments of accrued liabilities and payables.2024.

If approved by the Cooperative’s members atAt the 2025 Annual Member Meeting, the CooperativeCooperative’s willmembers implementapproved the a Plan of Liquidation and Dissolution as presented to the members. The Plan of Liquidation and Dissolution requires the Cooperative to fulfill its contractual obligations to Cargill and ProGold through December 31, 2026 and to take all actions necessary to complete the sale of the Cooperative’s 50% membership interest in ProGold to Cargill pursuantfor $81 million and to otherwise wrap up business. Per the terms of the ProGold Operating Operating AgreementAgreement, ProGold and tothe otherwiseCooperative windmust upenter into an agreement for the business.sale of the Cooperative’s membership interest to Cargill within 30 days following December 31, 2026. Following completion of the membership interest sale transaction (to be completed within 30 days following December 31, 2026 per the terms of the ProGold Operating Agreement),transaction, the Plan of Liquidation and Dissolution requires the Cooperative’s Board of Directors to establish a reasonable reserve for the payment of debts and credits, to allocate and distribute the remaining sale transaction proceeds and Cooperative assets to the members in accordance with the Bylaws, to pay all debts and credits, and finally to allocate and distribute the residue of the reserve following the payment of debts and credits.

To hold Units, a member is required to execute a Uniform Member Agreement that obligates the member to deliver corn to the Cooperative and an Annual Delivery Agreement by which each member annually elects the member’s method to deliver corn - either Method A or Method B, or a combination of both. Under Method A, a member is required to physically deliver the required bushels of corn to the Cooperative either at the facility or another location designated by the Cooperative. Under Method B, a member appoints the Cooperative as its agent to arrange for the acquisition and delivery of the required bushels of corn on the member’s behalf. The Cooperative appoints Cargill as its agent to arrange for the delivery of the corn by members who elect to deliver corn using Method A, and the Cooperative appoints Cargill as its agent to acquire corn on the Cooperative’s behalf for members who elect to deliver corn using Method B. If a member elects to deliver corn using Method B, B, the price per bushel the Cooperative pays to the member is equal to the price per bushel paid by Cargill to acquire the corn as its agent. Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery. Members who deliver corn under Method A alsoreceive receive from the Cooperative an incentive payment of $.05 per bushel on the corn that they deliver while members who elect Method B to deliver corn pay to the Cooperative a $.02 per bushel agency fee for the cost of having the Cooperative deliver corn on their behalf. The incentive payment for Method A deliveries and the agency fee for Method B deliveries are subject to annual adjustment at the sole discretion of the Cooperative’s Board of Directors. While the Cooperative is financially responsible for the various payments to the members for corn, Cargill, serving as the Cooperative’s administrative agent, issues payments to members for corn on the Cooperative’s behalf.

Annually, the Cooperative notifies Cargill of the number of bushels of Method A corn to be delivered by each member who has elected to deliver corn by Method A. Once the Cooperative provides notification to Cargill of the number of bushels of corn, Cargill then confirms the amount of corn with each member and notifies that member with respect to quality specifications, allowances, deductions and premiums to be applicable to that corn. The member with a Method A corn commitment then directly contracts with Cargill for corn delivered by Method A. At the end of each month, Cargill reports the number of Method A bushels delivered and the average daily price paid for corn that Cargill purchased from members on the Cooperative’s behalf. The product of the number of bushels delivered multiplied by the average monthly market price is reported as Method A corn expense. In the event a member who has elected to deliver corn by Method A delivers to Cargill more than its delivery commitment, any corn delivered in excess of that commitment is handled as a direct sale of corn to Cargill. In the event a member who has elected to deliver corn by Method A delivers to Cargill less than its committed amount of corn, the quantity of the shortfall is then purchased and delivered by Cargill on the Cooperative’sour behalf. The purchase price is equal to the average price reported for Method A corn for the final month of the year. In addition, the Method A member with a shortfall will be charged a purchased corn fee and agency fee determined by the Cooperative’s Board of Directors.

Cargill then purchases the remainder of the corn to be delivered by the Cooperative on behalf of the Method B delivering members at such time and in such quantities as it deems appropriate and in the best interest of the Cooperative and Cargill. The Cooperative notifies Cargill of the number of Method B bushels to be purchased during the quarter. Cargill will certify to the Cooperative that it has purchased the necessary Method B bushels. The price paid iswill be the weighted average price for for Method A corn during the quarter multiplied by the number of Method B bushels. bushels. Method B corn revenue iswill be equal to the price paid.

For the three-monththree periodand six-month periods ended March 31,June 30, 2026, the Cooperative sold approximately 4.63.8 and 8.4 million bushels of corn corn, respectively, compared to approximately 4.73.9 and 8.6 million bushels of corn sold during the three-month periodthree and six-month periods ended March 31,June 30, 2025. For the three-monththree periodand six-month periods ended March 31,June 30, 2026, the members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility approximately 1.70.9 and 2.5 million bushels of corn using Method A and 2.9 and 5.9 million bushels of corn using Method B. In the same periodrespective periods in 2025, its members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility 1.81.0 and 2.7 million bushels of corn using Method A and 2.9 and 5.9 million bushels of corn using Method B.

For the three-monththree periodand six-month periods ended March 31,June 30, 2026, the Cooperative recognized corn revenue of $14,863,000 $17,902,000and $32,765,000 compared to $20,088,000$16,222,000 and $36,310,000, during the same periodrespective periods in 2025, a decrease of 11%8% for the firstsecond quarter and a quarterdecrease of 10% year to date due primarily to a decrease in the price per bushel of corn sold year to date in 2026 compared to 2025.

Expenses. The Cooperative recognized corn expense of $17,918,000$14,879,000 and $20,105,000$32,797,000 for the three-month periodthree and six-month periods ended MarchJune 31,30, 20262026, respectively, compared to $16,239,000 and $36,344,000 2025during respectively,the same respective periods in 2025, with a decrease of 11% 8% for the first quartersecond quarter, and a decrease of 10% year to date due primarily to a decrease in the price per bushel of corn purchased in 2026 compared to 2025.

The Cooperative recognized expense of $15,000 and $30,000 for the three-monththree and six-month periods ended MarchJune 30, 31,2026, 2026respectively, and during the same respective periods in 2025 in connection with costs incurred to Cargill related to the Cooperative’s corn marketing operation.

Income from ProGold LLC. The Cooperative derived income from ProGold LLC for the three-monththree and six-month periods ended MarchJune 31,30, 2026 of $1,601,000 and 2025$3,231,000, respectively, compared to $1,562,000 and $3,350,000 during the same respective periods in 2025, an increase of $1,630,000 and $1,788,000, respectively, a decrease of 9%2% for the firstsecond quarter. The decrease is primarily due to a gain on a salequarter of a capital asset in 20252026 compared to 2026.2025 and a decrease of 4% year to date in 2026 compared to 2025. Decreased income year to date is primarily related to increased ProGold LLC operating expenses in 2026 compared to 2025.

General and Administrative Expenses. The Cooperative’s general and administrative expenses include salaries and benefits, professional fees and fees paid to its Board of Directors. The general and administrative expenses for the three-monththree period and six-month periods ended MarchJune 31,30, 2026 waswere $232,000,$144,000 and $376,000, respectively, compared to $258,000$138,000 and $396,000 during the same respective periodperiods in 2025. The decrease in general and administrative expenses for the six-month period ended June 30, 2026 compared to the six-month period ended June 30, 2025 is primarily due to decreased legal, consulting,reduced accounting and accountingconsulting expenses in 2026 compared to 2025.

Other Income. Interest income for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 was $40,000$35,000 and $75,000, respectively, compared to $82,000 $84,000 and $166,000 during the same respective periodperiods in 2025. The decrease inis otherprimarily income relatesdue to a reductiondecreased amount of investments in thecorporate Cooperative’s investments.bonds.

The Cooperative’s working capital at MarchJune 31,30, 2026 was $4,132,000$2,430,000 compared to $6,855,000$5,735,000 at MarchJune 31,30, 2025. The decreased working capital at the end of the firstsecond quarter of fiscal 2026 as compared to the end of the firstsecond quarter of fiscal 2025 is primarily related to a reduction inwas the Cooperative’sresult investments.of decreased Theinvestments Cooperative received cash distributions from ProGold LLC totaling $1,979,000 for the three-month period ended March 31,in 2026 compared to $1,994,000 for the three-month period ended March 31, 2025.

In fiscal year 2018, the Cooperative invested a portion of its cash reserves in bonds. To ensure that the Cooperative would have access to cash if needed before the maturity of the bonds, the Cooperative also established a $2,000,000 line of credit at a variable interest rate based on the prime rate. The line of credit will terminate on October 16, 2026. The line of credit is secured by the investment management agency account for the Cooperative maintained by Bell Bank. There was no outstanding balance as of MarchJune 31,30, 2026 or December 31, 2025.

The Cooperative had no long-term debt as of MarchJune 31,30, 2026 and MarchJune 31,30, 2025 and used operating cash flows of $42,000 $280,000 for the three-monthsix-month period ended MarchJune 31,30, 2026 compared to used operating cash flows of $150,000$235,000 for the three-monthsix-month period ended MarchJune 31, 30, 2025. The decreaseincrease in use of operating cash flows used for the three-monthsix-month period ended MarchJune 31,30, 2026 compared to the three-month six-month period ended MarchJune 31,30, 2025 is primarily due to decreased paymentsnet of payablesincome in 2026 compared to 2025.

Management believes that non-cash working capital levels, together with the Cooperative’s cash and cash equivalents, are appropriate in the current business environment and does not expect a significant increase or reduction of non-cash working capital in the next 12twelve months. Management expects that the Cooperative’s cash and cash equivalents, together with available borrowings under the line of credit, will be sufficient to fund its operations for the foreseeable future, including at least the next twelve months.

The Cooperative generally does not pay out Method A incentive payments or collect Method B agency fees until the end of its fiscal year. The total annual Method B agency fee was determinable once the members completed their delivery method determination prior to January 1, 2026. The quarterly Method B bushel delivery and agency fee revenue is calculated by allocating the portion of the total annual agency fee for that particular quarter or cumulating it for the particular period. The Cooperative tracks Method A corn deliveries throughout the year so it can report the bushels of corn delivered by its members as well as the corresponding Method A incentive fees earned. The final amounts owed by or due to Cargill and/or the Cooperative’s members who elect to deliver using Method A is not calculated until after December 31 in order to account for any failures to deliver, or over-deliveries, over-deliveries ofof, corn.