##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the quarter ended September 30, 2007
 OR
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period fromto
 Commission file number 000-52617
 WESTERN DUBUQUE BIODIESEL, LLC
  
 Iowa
(State or other jurisdiction of 
incorporation or organization)
    
    20-3857933
(I.R.S. Employer Identification No.)
 904 Jamesmeier Rd.
P.O. Box 82
Farley, IA 52046
 (563) 744-3554
 þ o
 o þ
   o þ




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INDEX
 Page No.PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis or Plan of Operations
    
    
    14Item 3. Controls and Procedures
    
    
    23PART II. OTHER INFORMATION
    
    
    23Item 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 3. Defaults Upon Senior Securities
    
    
    25Item 4. Submission of Matters to Security Holders
    
    
    25Item 5. Other Information
    
    
    25Item 6. Exhibits
    
    
    26SIGNATURES
    
    
    26Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 WESTERN DUBUQUE BIODIESEL, LLC
BALANCE SHEET
September 30, 2007
 ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    397,411Margin deposits
    
    
    1,234,518Accounts receivable  related party
    
    
    479,474Inventory
    
    
    834,943Prepaid expenses
    
    
    154,387Total current assets
    
    
    3,100,733PROPERTY, PLANT AND EQUIPMENTLand and land improvements
    
    
    3,086,862Office building and equipment
    
    
    406,389Plant and process equipment
    
    
    37,901,532Construction in progress
    
    
    861Total, at cost
    
    
    41,395,644Less accumulated depreciation
    
    
    374,636Total property, plant and equipment
    
    
    41,021,008OTHER ASSETSLoan origination fees, net of amortization
    
    
    499,585TOTAL ASSETS
    
    $
    44,621,326LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESAccounts payable:Trade
    
    $
    617,950Related party
    
    
    217,079Construction  related party
    
    
    2,519,733Derivative instruments
    
    
    363,036Current portion of long-term debt
    
    
    866,905Accrued interest
    
    
    136,431Accrued liabilities
    
    
    74,249Total current liabilities
    
    
    4,795,383LONG-TERM LIABILITIESLong-term debt, less current portion above
    
    
    18,113,917Total liabilities
    
    
    22,909,300MEMBERS EQUITYMember contributions, net of costs related to capital contributions,
27,279 units outstanding at September 30, 2007
    
    
    26,230,096Less subscriptions receivable
    
    
    (2,500,000
    )Accumulated deficit
    
    
    (2,018,070
    )Total members equity
    
    
    21,712,026TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    44,621,326
   3




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WESTERN DUBUQUE BIODIESEL, LLC
STATEMENTS OF OPERATIONS
 Three Months
    
    
    Nine Months
    
    
    Three Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2007
    
    
    2006
    
    
    2006TOLLING SERVICE AND BYPRODUCT
REVENUES  RELATED PARTY
    
    $
    1,991,747
    
    
    $
    1,991,747
    
    
    $
    
    
    
    $
    COST OF SALESTolling service
    
    
    1,625,892
    
    
    
    1,625,892
    
    
    
    
    
    
    
    Net losses on derivative instruments
    
    
    471,574
    
    
    
    471,574
    
    
    
    
    
    
    
    2,097,466
    
    
    
    2,097,466
    
    
    
    
    
    
    
    Gross profit (loss)
    
    
    (105,719
    )
    
    
    (105,719
    )
    
    
    
    
    
    
    OPERATING EXPENSESConsulting and professional fees
    
    
    99,909
    
    
    
    238,859
    
    
    
    85,972
    
    
    
    532,161Office and administrative expenses
    
    
    264,696
    
    
    
    509,963
    
    
    
    240,215
    
    
    
    489,808Total operating expenses
    
    
    364,605
    
    
    
    748,822
    
    
    
    326,187
    
    
    
    1,021,969OTHER INCOME (EXPENSE)Interest income
    
    
    7,666
    
    
    
    9,571
    
    
    
    314,063
    
    
    
    325,016Net losses on derivative instruments
    
    
    (76,776
    )
    
    
    (945
    )
    
    
    
    
    
    
    Other income
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    25,000Interest expense
    
    
    (274,141
    )
    
    
    (274,141
    )
    
    
    
    
    
    
    Total other income (expense)
    
    
    (343,251
    )
    
    
    (264,515
    )
    
    
    314,063
    
    
    
    350,016NET LOSS
    
    $
    (813,575
    )
    
    $
    (1,119,056
    )
    
    $
    (12,124
    )
    
    $
    (671,953
    )BASIC AND DILUTED LOSS PER UNIT
    
    $
    (29.82
    )
    
    $
    (41.13
    )
    
    $
    (0.47
    )
    
    $
    (50.74
    )WEIGHTED AVERAGE UNITS OUTSTANDING,
BASIC AND DILUTED
    
    
    27,279
    
    
    
    27,208
    
    
    
    25,979
    
    
    
    13,243
   4




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WESTERN DUBUQUE BIODIESEL, LLC
STATEMENTS OF CASH FLOWS
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2007
    
    
    September 30, 2006CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (1,119,056
    )
    
    $
    (671,953
    )Adjustments to reconcile net loss to net cash
provided by (used in) operating activitiesDepreciation
    
    
    374,117
    
    
    
    318Amortization
    
    
    15,680
    
    
    
    Non cash consulting services
    
    
    
    
    
    
    250,000Equity based compensation
    
    
    
    
    
    
    445,000Effects of changes in operating assets and liabilitiesMargin deposits
    
    
    (1,234,518
    )
    
    
    Receivables
    
    
    (479,474
    )
    
    
    Inventory
    
    
    (834,943
    )
    
    
    Prepaid expenses
    
    
    (154,387
    )
    
    
    Prepaid legal costs
    
    
    
    
    
    
    25,000Derivative instruments
    
    
    363,036
    
    
    
    Accounts payable
    
    
    588,981
    
    
    
    Accrued liabilities
    
    
    74,249
    
    
    
    18,176Net cash provided by (used in) operating activities
    
    
    (2,406,315
    )
    
    
    66,541CASH FLOWS FROM INVESTING ACTIVITIESPurchase of land and land options
    
    
    
    
    
    
    (603,773
    )Proceeds from the sale of property
    
    
    25,000
    
    
    
    Payments for office equipment,
office building and construction in progress
    
    
    (16,753,671
    )
    
    
    (6,764,728
    )Net cash used in investing activities
    
    
    (16,728,671
    )
    
    
    (7,368,501
    )CASH FLOWS FROM FINANCING ACTIVITIESLoan origination fees
    
    
    
    
    
    
    (50,000
    )Cost of raising capital
    
    
    
    
    
    
    (207,276
    )Proceeds from long-term debt
    
    
    18,605,822
    
    
    
    400,000Payments on long-term debt
    
    
    (20,000
    )
    
    
    Capital contributions
    
    
    650,000
    
    
    
    22,229,000Net cash provided by financing activities
    
    
    19,235,822
    
    
    
    22,371,724NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    100,836
    
    
    
    15,069,764CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    79,316
    
    
    
    112,466CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    180,152
    
    
    $
    15,182,230
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WESTERN DUBUQUE BIODIESEL, LLC
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates in Preparing Financial Statements
  Basis of Accounting
    Revenue Recognition
  Cash and Cash Equivalents
  Accounts Receivable
  Derivative Instruments and Hedging Activities
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WESTERN DUBUQUE BIODIESEL, LLC
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
    Inventories
  Property and Equipment
   YearsLand improvements
    
    
    20  40Office equipment
    
    
    5  10Office building
    
    
    30Plant and process equipment
    
    
    10  40
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WESTERN DUBUQUE BIODIESEL, LLC
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
 Loan Origination Fees
  Other Income
  Stock-Based Compensation
 Share-Based
Payment Accounting for Stock Issued to Employees,
  Income Taxes
   8




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WESTERN DUBUQUE BIODIESEL, LLC
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
 Earnings Per Unit
  Cost of Sales
  Shipping and Handling Costs
  Environmental Liabilities
  Reclassifications
  NOTE 2  INVENTORY
  Raw material
    
    $
    355,434Work in progress
    
    
    367,678Finished goods
    
    
    111,831Total
    
    $
    834,943
 NOTE 3  LONG-TERM DEBT AND FINANCING
  Note payable to Marshall BankFirst for construction loan
- see details below
    
    $
    18,605,822Note payable to the Iowa Department of Economic
Development - see details below
    
    
    375,000Total
    
    
    18,980,822Less current portion
    
    
    866,905Long-term portion
    
    $
    18,113,917
  9




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WESTERN DUBUQUE BIODIESEL, LLC
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
  2008
    
    $
    866,9052009
    
    
    1,366,0682010
    
    
    1,530,1612011
    
    
    1,658,5122012
    
    
    1,718,916Thereafter
    
    
    11,840,260Total
    
    $
    18,980,822
    NOTE 4  MEMBERS EQUITY
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WESTERN DUBUQUE BIODIESEL, LLC
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
     NOTE 5  CONCENTRATION OF CREDIT RISK
  NOTE 6  CASH FLOW DISCLOSURES
  Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30, 2007
    
    
    September 30, 2006Cash paid for interest,
net of capitalized
interest of $446,869
    
    $
    137,710
    
    
    $
    Services provided for
units previously
issued, costs included
in start-up expenses
    
    $
    
    
    
    $
    250,000Construction in progress
in accounts payable
and accrued interest
    
    $
    2,519,733
    
    
    $
    3,189,224Cost of raising capital in accounts payable
    
    $
    
    
    
    $
    207,276
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WESTERN DUBUQUE BIODIESEL, LLC
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
 NOTE 7  RELATED PARTY TRANSACTIONS
      NOTE 8  COMMITMENTS AND CONTINGENCIES
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WESTERN DUBUQUE BIODIESEL, LLC
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2007
   NOTE 9  FAIR VALUE OF FINANCIAL INSTRUMENTS
   13




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Item 2. Managements Discussion and Analysis or Plan of Operations
 Forward Looking Statements
  
    
    Overcapacity within the biodiesel industry resulting in increased competition and costs
for feedstock and/or decreased prices for our biodiesel and glycerin;
    
    Continued higher than average prices of vegetable oils, particularly soybean oil and/or
increases in the prices of other feedstock;
    
    Decreased availability of soybean oil or other feedstock for any reason, including
reduction in soybean production due to increased corn production to service the ethanol
industry;
    
    Our ability to locate alternative feedstock to replace soybean oil (such as refined
animal fats) if desirable or necessary, particularly since we lack pretreatment
capabilities to enable us to process raw animal fats at our plant.
    
    Our ability to market our products and our reliance on our marketer to market our
products;
    
    Our ability to enter into toll manufacturing agreements or other arrangements that shift
responsibility for feedstock procurement and costs to other parties;
    
    Changes in or elimination of governmental laws, tariffs, trade or other controls or
enforcement practices such as national, state or local energy policy; federal biodiesel tax
incentives; or environmental laws and regulations that apply to our plant operations and
their enforcement; and the ability of the biodiesel industry to successfully lobby for
mandates or other legislation beneficial to the biodiesel industry;
    
    Total U.S. consumption of diesel and biodiesel and consumer attitudes regarding the use
of biodiesel;
    
    Changes in plant production capacity or technical difficulties in operating the plant
for any reason, including changes due to events beyond our control or as a result of
intentional reductions in production or plant shutdowns;
    
    Changes in interest rates or the availability of credit needed to continue our
operations in the event that income from operations is insufficient for us to continue
biodiesel production;
    
    Our ability to generate free cash flow to invest in our business and service our debt;
    
    Changes and advances in biodiesel production technology, including the ability of our
competitors to process raw animal fats or other feedstock which we are unable to process;
    
    Competition from alternative fuels; and
    
    Other factors described elsewhere in this report.
  14




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Overview
     Plan of Operations for the Next 12 Months
  Completion of Plant Construction and Start-up of Plant Operations
    15




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Plant Management, Feedstock Procurement and Marketing
   Toll Manufacturing Agreement
   Distribution of Principal Products
  Administration and Employees
   16




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Job Title
    
    Number of EmployeesProcess Operator
    
    
    16Accounting Manager
    
    
    1Maintenance
    
    
    2Shipping/Receiving
    
    
    4Operations Supervisor
    
    
    2Quality Assurance Manager
    
    
    1Lab Assistant
    
    
    1Office Manager
    
    
    1Office Administrative Assistant
    
    
    1Total
    
    
    29
 Permitting and Costs and Effects of Compliance with Environmental Laws
  Permit:
    
    Status:Spill, Prevention, Control and
Countermeasures Plan
    
    We have a draft of our Spill,
Prevention, Control and
Countermeasures (SPCC) Plan in place
and expect to have the final plan in
place within the time period
required.Tier II Report
    
    Because we were not operational in
2006, we were not required to file a
Tier II Report for 2006. We will,
however, be required to file a Tier
II Report prior to March 1, 2008 for
year 2007. We have a process in
place for filing this report.Superfund Amendments and
Reauthorization Act (SARA) Section
313 Form R
    
    Because we were not operational in
2006, we are not required to file
Form R for 2006. We will, however,
be required to file Form R prior to
July 1, 2008 for year 2007. We have
a process in place for filing this
report.Resource Conservation and Recovery
Act (RCRA) Hazardous Materials ID
Number
    
    We have applied for the Hazardous
Materials ID Number and are
currently waiting for the RCRA Form
Subtitle C.
  Trends and Uncertainties Impacting the Biodiesel Industry and Our Future Operations
   17




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Increased Prices and Decreased Production of Feedstock
   Growth and Increased Competition in the Biodiesel Industry
  YEAR
    
    PRODUCTION (GALLONS)2005
    
    
    75,000,0002006
    
    
    250,000,0002007 (est.)
    
    
    300,000,000
     18




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Changes in Government Programs
 
  19




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Development of Infrastructure
  
    
    additional rail capacity;
    
    additional storage facilities for biodiesel;
    
    increases in truck fleets capable of transporting biodiesel within localized
markets;
    
    expansion in refining and blending facilities to handle biodiesel; and
    
    growth in service stations equipped to handle biodiesel fuels.
  Critical Accounting Estimates
  Off-Balance Sheet Arrangements
  Liquidity and Capital Resources
  Sources of Funds
  PercentSource of Funds
    
    
    
    
    
    of TotalMember Equity, Intrastate Offering ($1,000 per unit)
    
    $
    19,279,000
    
    
    
    31.38
    %Member Equity, Directors Exercised Options
    
    $
    650,000
    
    
    
    1.06
    %Member Equity, Seed Capital ($500 per unit)
    
    $
    3,100,000
    
    
    
    5.05
    %Member Equity, Final Construction Loan Payment ($1,000 per unit)
    
    $
    2,500,000
    
    
    
    4.07
    %Debt Financing
    
    $
    35,500,000
    
    
    
    57.80
    %Loan/Grant Funding (IDED)
    
    $
    400,000
    
    
    
    .65
    %Total Sources of Funds(1)
    
    $
    58,929,000
    
    
    
    100.00
    %
 
 (1)
    
    This amount excludes non-cash equity compensation recognized by our company in connection
with the units paid to The Biodiesel Group as compensation under their consulting agreement
with the company and its directors unit option plan.  20




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Equity Financing
   Debt Financing
 The Wall Street Journal The Wall Street Journal The Wall Street Journal
    21




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Government Programs and Grants
  Use of Proceeds
  Research and Development
   22




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Item 3. Controls and Procedures
      
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
   23




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We have a history of losses and may not ever operate profitably
 We are in competition with REG, our design-builder and manager, which could place us at a
competitive disadvantage and cause a conflict of interest for our manager.
 The decreasing availability and increasing price of soybean oil may hinder our ability to
profitably produce biodiesel and may result in plant shutdowns and decreased revenues.
 Declines in the prices of biodiesel and its primary co-product have a significant negative
impact on our financial performance and the value of our units.
  24




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If we are forced to temporarily cease operating our biodiesel plant for any reason, we might
not be able to meet our current liabilities or our profits may be reduced.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults upon Senior Securities.
   
 Item 4. Submission of Matters to Security Holders.
  
 Item 5. Other Information.
   25




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Item 6. Exhibits
  Method ofExhibit No.
    
    Description
    
    Filing10.18
    
    
    Toll Manufacturing Agreement between Renewable Energy Group,
Inc. and Western Dubuque Biodiesel, LLC dated July 9, 2007+
    
    
    131.1
    
    
    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
    
    
    *99.1
    
    
    Renewable Energy Group, Inc. Press Release dated August 8, 2007
    
    
    2
 
 (*)
    
    Filed herewith.(1)
    
    Incorporated by reference to the exhibit of the same number on our Amendment No. 1 to
Registration Statement on Form 10-SB, No.000-52617, originally filed on August 10, 2007.(2)
    
    Incorporated by reference to the exhibit of the same number on our Quarterly Report on Form
10-QSB filed on August 14, 2007.(+)
    
    Confidential Treatment Requested 
 SIGNATURES
  WESTERN DUBUQUE BIODIESEL, LLCDate: November 14, 2007
    /s/ Bruce KlostermannBruce KlostermannVice Chairman and Director
(Principal Executive Officer) Date:  November 14, 2007
    /s/ George DavisGeorge DavisTreasurer and Director

(Principal Financial and Accounting Officer)  26




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EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    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 135032.2
    
    Certificate pursuant to 18 U.S.C. Section 1350
  27