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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the quarterly period ended March 31, 2011
 OR
 o
    
    Transition report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the transition period from  to
 Commission file number 000-52617
 WESTERN DUBUQUE BIODIESEL, LLC
  Iowa
    
    20-3857933(State or other jurisdiction of organization)
    
    (I.R.S. Employer Identification No.)
 904 Jamesmeier Rd.
P.O. Box 82
Farley, IA 52046
 (563) 744-3554
 þ o
 o o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer o
    
    Smaller Reporting Company þ
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INDEX
 Page No.PART I. FINANCIAL INFORMATION
    
    
    1Item 1. Financial Statements
    
    
    1Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures about Market Risks
    
    
    18Item 4. Controls and Procedures
    
    
    18PART II. OTHER INFORMATION
    
    
    18Item 1. Legal Proceedings
    
    
    18Item 1A. Risk Factors
    
    
    18Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    18Item 3. Defaults Upon Senior Securities
    
    
    18Item 4. (Removed and Reserved)
    
    
    19Item 5. Other Information
    
    
    19Item 6. Exhibits
    
    
    19SIGNATURES
    
    
    20Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   ii




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PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 WESTERN DUBUQUE BIODIESEL, LLC
BALANCE SHEETS
 (UNAUDITED)March 31,
    
    
    December 31,2011
    
    
    2010ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    933,988
    
    
    $
    2,105,760Margin deposits
    
    
    33,494
    
    
    
    33,494Trade accounts receivable
    
    
    144,982
    
    
    
    Other receivables
    
    
    73,950
    
    
    
    12,904Inventory
    
    
    6,071,673
    
    
    
    417,963Utility deposits
    
    
    87,099
    
    
    
    87,099Prepaid feedstocks and expenses
    
    
    89,754
    
    
    
    113,615Total current assets
    
    
    7,434,940
    
    
    
    2,770,835PROPERTY, PLANT AND EQUIPMENTLand and land improvements
    
    
    3,091,093
    
    
    
    3,091,093Office building and equipment
    
    
    417,392
    
    
    
    417,392Plant and process equipment
    
    
    37,850,626
    
    
    
    37,850,626Vehicles
    
    
    42,537
    
    
    
    42,537Total, at cost
    
    
    41,401,648
    
    
    
    41,401,648Less accumulated depreciation
    
    
    8,029,723
    
    
    
    7,487,298Total property, plant and equipment
    
    
    33,371,925
    
    
    
    33,914,350OTHER ASSETSRestricted cash
    
    
    406,929
    
    
    
    406,929Loan origination fees, net of amortization
    
    
    166,528
    
    
    
    190,318Total other assets
    
    
    573,457
    
    
    
    597,247TOTAL ASSETS
    
    $
    41,380,322
    
    
    $
    37,282,432LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESAccounts payable:Trade
    
    $
    5,707,740
    
    
    $
    51,378Related party
    
    
    
    
    
    
    11,113Current portion of long-term debt
    
    
    23,240,949
    
    
    
    24,067,852Accrued liabilities
    
    
    82,108
    
    
    
    73,527Deferred rent
    
    
    24,150
    
    
    
    24,800Total current liabilities
    
    
    29,054,947
    
    
    
    24,228,670MEMBERS EQUITYContributed capital
    
    
    26,230,096
    
    
    
    26,230,096Accumulated deficit
    
    
    (13,904,721
    )
    
    
    (13,176,334
    )Total members equity
    
    
    12,325,375
    
    
    
    13,053,762TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    41,380,322
    
    
    $
    37,282,432
   1




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WESTERN DUBUQUE BIODIESEL, LLC
STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010REVENUESBiodiesel and by product sales:Unrelated parties
    
    $
    3,879,455
    
    
    $
    Related parties
    
    
    83,030
    
    
    
    Total revenues
    
    
    3,962,485
    
    
    
    COST OF SALESMaterials, labor and overhead
    
    
    4,269,466
    
    
    
    863,267Net losses on derivative instruments
    
    
    
    
    
    
    168,911Total cost of sales
    
    
    4,269,466
    
    
    
    1,032,178Gross loss
    
    
    (306,981
    )
    
    
    (1,032,178
    )OPERATING EXPENSESConsulting and professional fees
    
    
    91,937
    
    
    
    77,816Office and administrative expenses
    
    
    102,021
    
    
    
    62,983Total operating expenses
    
    
    193,958
    
    
    
    140,799OTHER INCOME (EXPENSE)Other income
    
    
    650
    
    
    
    650Interest income
    
    
    2,240
    
    
    
    10,018Interest expense
    
    
    (230,340
    )
    
    
    (246,694
    )Total other expense
    
    
    (227,450
    )
    
    
    (236,026
    )NET LOSS
    
    $
    (728,389
    )
    
    $
    (1,409,003
    )BASIC AND DILUTED LOSS PER UNIT
    
    $
    (24.46
    )
    
    $
    (47.32
    )WEIGHTED AVERAGE UNITS OUTSTANDING,
BASIC AND DILUTED
    
    $
    29,779
    
    
    
    29,779
   2




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WESTERN DUBUQUE BIODIESEL, LLC
STATEMENTS OF CASH FLOWS
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (728,389
    )
    
    $
    (1,409,003
    )Adjustments to reconcile net loss to net cash
(used in) operating activities:Depreciation
    
    
    542,425
    
    
    
    547,648Amortization
    
    
    23,790
    
    
    
    23,789Effects of changes in operating assets and liabilitiesMargin deposits
    
    
    
    
    
    
    (233,662
    )Accounts receivable
    
    
    (144,982
    )
    
    
    198,149Other receivables
    
    
    (61,046
    )
    
    
    (77,160
    )Incentive receivables
    
    
    
    
    
    
    3,494,322Inventory
    
    
    (5,653,710
    )
    
    
    (1,423,888
    )Utility deposits
    
    
    
    
    
    
    (87,099
    )Prepaid feedstocks and expenses
    
    
    23,861
    
    
    
    (1,220,616
    )Derivative instruments
    
    
    
    
    
    
    162,574Accounts payable
    
    
    5,645,249
    
    
    
    (1,337,578
    )Accrued liabilities
    
    
    8,581
    
    
    
    (13,390
    )Deferred rent
    
    
    (650
    )
    
    
    (650
    )Net cash (used in) operating activities
    
    
    (344,871
    )
    
    
    (1,376,564
    )CASH FLOWS FROM FINANCING ACTIVITIESNet borrowings under short-term financing with related party
    
    
    
    
    
    
    2,548,975Payments on long-term debt
    
    
    (826,901
    )
    
    
    (247,457
    )Net cash provided by (used in) financing activities
    
    
    (826,901
    )
    
    
    2,301,518NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (1,171,772
    )
    
    
    924,954CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    2,105,760
    
    
    
    3,379,382CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    933,988
    
    
    $
    4,304,336
 See accompanying notes to financial statements.
  3




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WESTERN DUBUQUE BIODIESEL, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2011
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates in Preparing Financial Statements
  Basis of Presentation
  Revenue Recognition
  Cash and Cash Equivalents
   Restricted Cash
  Accounts Receivable
   4




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WESTERN DUBUQUE BIODIESEL, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2011
  Derivative Instruments and Hedging Activities
 Derivatives and Hedging
 Inventories
  Property and Equipment
   YearsLand improvements
    
    
    20  40Office equipment
    
    
    5  10Office building
    
    
    30Plant and process equipment
    
    
    10  40Vehicles
    
    
    5  7
   Loan Origination Fees
  Income Taxes
   5




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WESTERN DUBUQUE BIODIESEL, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2011
 Loss Per Unit
  Cost of Sales
    Shipping and Handling Costs
  Environmental Liabilities
  Fair Value of Financial Instruments
  Current assets and current liabilities The carrying value approximates fair value due to the
short maturity of these items.
 Long-term debt The carrying amount of long-term obligations approximated fair value based on
estimated interest rates for comparable debt.
 NOTE 2  INCENTIVE PAYMENTS AND RECEIVABLE
   6




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WESTERN DUBUQUE BIODIESEL, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2011
  NOTE 3  INVENTORY
  UNAUDITEDMarch 31,
    
    
    December 31,2011
    
    
    2010Raw material
    
    $
    3,951,687
    
    
    $
    185,481Work in progress
    
    
    1,977,604
    
    
    
    106,328Finished goods
    
    
    142,382
    
    
    
    126,154Total
    
    $
    6,071,673
    
    
    $
    417,963
 NOTE 4  LONG-TERM DEBT AND FINANCING
  UNAUDITEDMarch 31,
    
    
    December 31,2011
    
    
    2010Note payable to Beal Bank  see details below
    
    $
    23,075,949
    
    
    $
    23,887,852Note payable to the Iowa Department of Economic
Development  see details below
    
    
    165,000
    
    
    
    180,000Total
    
    
    23,240,949
    
    
    
    24,067,852Less current portion
    
    
    23,240,949
    
    
    
    24,067,852Long-term portion
    
    $
    
    
    
    $
    
    7




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WESTERN DUBUQUE BIODIESEL, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2011
      NOTE 5  MEMBERS EQUITY
  NOTE 6  CASH FLOW DISCLOSURES
  UNAUDITED
    
    
    UNAUDITEDThree Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010Cash paid for interest
    
    $
    206,550
    
    
    $
    222,904
  8




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WESTERN DUBUQUE BIODIESEL, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2011
 NOTE 7  RELATED PARTY TRANSACTIONS
       NOTE 8  COMMITMENTS AND CONTINGENCIES
   2012
    
    $
    36,5482013
    
    
    36,5482014
    
    
    36,5482015
    
    
    36,5482016
    
    
    36,548Thereafter
    
    
    411,035Total
    
    $
    593,775
   9




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WESTERN DUBUQUE BIODIESEL, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2011
 NOTE 9  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 Derivatives and Hedging
 Objectives and Strategies for Holding Derivative Instruments
  Commodity Risk Management
  Accounting for Derivative Instruments and Hedging Activities
   UNAUDITED
    
    
    UNAUDITEDDerivative (Gain) Loss
    
    
    Derivative (Gain) LossThree Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010Statement of
    
    
    
    
    
    
    Statement ofOperations Location
    
    
    (Gain) Loss
    
    
    Operations Location
    
    
    (Gain) LossCommodity contracts 
Heat oil swaps
    
    Cost of sales
    
    $
    
    
    
    Cost of sales
    
    $
    168,911
 NOTE 10  LIQUIDITY, BASIS OF PRESENTATION AND MANAGEMENTS PLANS
   10




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WESTERN DUBUQUE BIODIESEL, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2011
   NOTE 11  SUBSEQUENT EVENTS
    11




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Cautionary Statements Regarding Forward-Looking Statements
  
    
    The status of the $1.00 per gallon blenders credit and other federal biodiesel
supports;
    
    Our ability to enter into toll manufacturing agreements or other arrangements that
shift responsibility for feedstock procurement and costs to other parties;
    
    Our ability to secure and retain service providers to procure feedstock for us and
to market our products;
    
    The availability and terms of credit or equity financing needed to continue
operations if our income from operations is insufficient for us to continue producing
biodiesel;
    
    Our ability to generate free cash flow to invest in our business and service our
debt;
    
    Our ability to negotiate reduced loan payments with our lender;
    
    Our ability to comply with our loan covenants and our lenders response to our
noncompliance with such covenants;
    
    Our ability to market our products and our reliance on others to market our
products;
    
    Fuel prices, diesel and biodiesel consumption and consumer attitudes regarding
biodiesel use;
    
    Prices of vegetable oils (particularly soybean oil), animal fats and other
feedstock;
    
    The continued imposition of tariffs or other duties on biodiesel exported to Europe;
    
    Overcapacity within the biodiesel industry resulting in increased competition and
costs for feedstock and/or decreased prices for our biodiesel and glycerin;
    
    Changes in soy-based biodiesels qualification under the Renewable Fuels Standard
(RFS and RFS2) and similar legislation;
    
    The availability of soybean oil, refined animal fat or other feedstock that we can
process at our plant;
    
    Our ability to locate alternative feedstock to respond to market conditions,
particularly since we lack the capability to pre-treat and process raw animal fats and
certain crude vegetable oils at our plant;
    
    Laws, tariffs, trade or other controls or enforcement practices such as: national,
state and local energy policy; federal biodiesel tax incentives; and environmental laws
and regulations;
    
    The biodiesel industrys ability to successfully lobby for legislation beneficial to
the biodiesel industry;
    
    Changes in plant production capacity or technical difficulties in operating the
plant, including changes
due to events beyond our control or due to intentional reductions or shutdowns;
    
    Changes and advances in biodiesel production technology, including our competitors
ability to process raw animal fats or other feedstock which we cannot process;
    
    Competition from alternative fuels; and
    
    Other factors described in this report.
  12




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Overview
      13




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Results of Operations for the Three Months Ended March 31, 2011
  Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010(Unaudited)
    
    
    (Unaudited)Income Statement Data
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentRevenues
    
    $
    3,962,485
    
    
    
    100.00
    %
    
    $
    0
    
    
    
    Cost of Sales
    
    
    4,269,466
    
    
    
    (107.75
    )%
    
    
    1,032,178
    
    
    
    Gross Profit (loss)
    
    
    (306,981
    )
    
    
    (7.75
    )%
    
    
    (1,032,178
    )
    
    
    Operating Expenses
    
    
    193,958
    
    
    
    4.89
    %
    
    
    140,799
    
    
    
    Other Income (Expense)
    
    
    (227,450
    )
    
    
    (5.74
    )%
    
    
    (236,023
    )
    
    
    Net Income (Loss)
    
    $
    (728,389
    )
    
    
    (18.38
    )%
    
    $
    (1,409,003
    )
    
    
    
 Revenues
    Cost of Sales
    14




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Operating Expenses
  Other Income (Expenses)
  Changes in Financial Condition for the Three Months Ended March 31, 2011
  March 31, 2011
    
    
    December 31, 2010Current Assets
    
    $
    7,434,940
    
    
    $
    2,770,835Current Liabilities
    
    $
    29,054,947
    
    
    $
    24,228,670Total Members Equity
    
    $
    12,325,375
    
    
    $
    13,053,762
 Current Assets
  Current Liabilities
   Members Equity
  Plan of Operations for the Next 12 Months
 Plant Operations
   15




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Operating Budget and Financing of Plant Operations
   Critical Accounting Estimates
  Revenue Recognition
  Derivative Instruments and Hedging Activities
  Liquidity and Capital Resources
 Cash Flows
 Cash Flow from Operating Activities.
 Cash Flow from Financing Activities.
  16




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Sources of Funds
 Equity Financing.
 Debt Financing
     Government Programs and Grants
   17




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Distribution to Unit Holders
  Off-Balance Sheet Arrangements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risks
  
 Item 4.
    
    Controls and Procedures
   
 PART II. OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults upon Senior Securities
   18




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Item 4.
    
    (Removed and Reserved)
 
 Item 5.
    
    Other Information
     
 Item 6.
    
    Exhibits
  Exhibit

    
    
    
    Method ofNo.

    
    Description
    
    Filing31.1
    
    
    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
    
    *
 
 (*)
    
    Filed herewith.  19




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SIGNATURES
  WESTERN DUBUQUE BIODIESEL, LLCDate:      May 16, 2011
    /s/ Bruce KlostermannBruce KlostermannVice Chairman and Director

(Principal Executive Officer)Date:      May 16, 2011
    /s/ George DavisGeorge DavisTreasurer and Director

(Principal Financial and Accounting Officer)  20