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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-KSB
 
 þ
    
    Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal year ended September 30, 2007
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period fromto
 Commission file number 333-130663
 FIRST UNITED ETHANOL, LLC
 
 Georgia
(State or other jurisdiction of 
incorporation or organization)
    
    20-2497196
(I.R.S. Employer Identification No.)
 4615 Back Nine Road, Pelham, Georgia 31779
 (229) 522-2822
 o
  þ o
 þ
 o þ
 None
   o þ




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##### 



INDEX
 PagePART I
    
    
    4ITEM 1. DESCRIPTION OF BUSINESS
    
    
    4ITEM 1A. RISK FACTORS
    
    
    18ITEM 2. DESCRIPTION OF PROPERTY
    
    
    24ITEM 3. LEGAL PROCEEDINGS
    
    
    24ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    24PART II
    
    
    25ITEM 5. MARKET FOR COMMON EQUITY AND RELATED MEMBER MATTERS
    
    
    25ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
    
    
    25ITEM 7. FINANCIAL STATEMENTS
    
    
    34ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
    
    
    48ITEM 8A. CONTROLS AND PROCEDURES
    
    
    48ITEM 8B. OTHER INFORMATION
    
    
    48PART III
    
    
    48ITEM 9. DIRECTORS; EXECUTIVE OFFICERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
    
    
    48ITEM 10. EXECUTIVE COMPENSATION
    
    
    50ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER
MATTERS
    
    
    53ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    54ITEM 13. EXHIBITS
    
    
    55ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    56SIGNATURES
    
    
    57Exhibit 10.49Exhibit 10.50Exhibit 10.51Exhibit 10.52Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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FORWARD LOOKING STATEMENTS
    
    
    Changes in our business strategy, capital improvements or development plans;
    
    Increases in the price of corn as the corn market becomes increasingly competitive;
    
    Our anticipated inelastic demand for corn, as it is the only available feedstock for
our plant;
    
    Changes in the environmental regulations or in our ability to comply with the
environmental regulations that apply to our plant site and our anticipated operations;
    
    Changes in general economic conditions or the occurrence of certain events causing
an economic impact in the agriculture, oil or automobile industries;
    
    Changes in the availability and price of natural gas and corn, and the market for
distillers grains;
    
    Changes in federal and/or state laws (including the elimination of any federal
and/or state ethanol tax incentives);
    
    Overcapacity within the ethanol industry and decreases in the price of ethanol;
    
    Difficulties we may encounter during the construction of our plant;
    
    Changes and advances in ethanol production technology that may make it more
difficult for us to compete with other ethanol plants utilizing such technology; and
    
    Competition in the ethanol industry and from other alternative fuel additives.
  AVAILABLE INFORMATION
 www.firstunitedethanol.com
  3




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PART I
 
 Item 1. DESCRIPTION OF BUSINESS.
 Business Development
     Principal Products and Markets
 Ethanol
    4




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Distillers Grains
  Local Ethanol and Distillers Grains Markets
 Distribution of Principal Products
 Regional Ethanol Markets
  National Ethanol Markets
    5




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Distribution of Principal Products
  Ethanol Distribution
  Distillers Grains Distribution
   6




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New Products and Services
  Governmental Regulation and Federal Ethanol Supports
 Federal Ethanol Supports
  th
    7




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Effect of Governmental Regulation
    8




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Competition
    most
 U.S. FUEL ETHANOL BIOREFINERIES AND PRODUCTION CAPACITY
million gallons per year (mmgy)
 UnderConstruction/Current Capacity
    
    
    expansionsCOMPANY
    
    LOCATION
    
    FEEDSTOCK
    
    (mmgy)
    
    
    (mmgy)Abengoa Bioenergy Corp.
    
    York, NE
    
    Corn/milo
    
    
    55Colwich, KS
    
    
    
    
    25Portales, NM
    
    
    
    
    30Ravenna, NE
    
    
    
    
    88Aberdeen Energy*
    
    Mina, SD
    
    Corn
    
    
    
    
    
    
    100Absolute Energy, LLC*
    
    St. Ansgar, IA
    
    Corn
    
    
    
    
    
    
    100ACE Ethanol, LLC
    
    Stanley, WI
    
    Corn
    
    
    41Adkins Energy, LLC*
    
    Lena, IL
    
    Corn
    
    
    40Advanced Bioenergy
    
    Fairmont, NE
    
    Corn
    
    
    100AGP*
    
    Hastings, NE
    
    Corn
    
    
    52Agri-Energy, LLC*
    
    Luverne, MN
    
    Corn
    
    
    21Al-Corn Clean Fuel*
    
    Claremont, MN
    
    Corn
    
    
    35
    
    
    
    15Amaizing Energy, L.L.C.*
    
    Denison, IA
    
    Corn
    
    
    48Atlantic, IA
    
    Corn
    
    
    
    
    
    
    110Archer Daniels Midland
    
    Decatur, IL
    
    Corn
    
    
    1,070
    
    
    
    550Cedar Rapids, IA
    
    CornClinton, IA
    
    CornColumbus, NE
    
    CornMarshall, MN
    
    CornPeoria, IL
    
    CornWallhalla, ND
    
    Corn/barley
  9




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UnderConstruction/Current Capacity
    
    
    expansionsCOMPANY
    
    LOCATION
    
    FEEDSTOCK
    
    (mmgy)
    
    
    (mmgy)Arkalon Energy, LLC
    
    Liberal, KS
    
    Corn
    
    
    
    
    
    
    110Aventine Renewable Energy, Inc.
    
    Pekin, IL
    
    Corn
    
    
    207
    
    
    
    226Aurora, NE
    
    CornMt. Vernon, IN
    
    CornBadger State Ethanol, LLC*
    
    Monroe, WI
    
    Corn
    
    
    48Big River Resources, LLC *
    
    West Burlington, IA
    
    Corn
    
    
    52BioFuel Energy  Pioneer Trail
Energy, LLC
    
    Wood River, NE
    
    Corn
    
    
    
    
    
    
    115BioFuel Energy  Buffalo Lake
Energy, LLC
    
    Fairmont, MN
    
    Corn
    
    
    
    
    
    
    115Blue Flint Ethanol
    
    Underwood, ND
    
    Corn
    
    
    50Bonanza Energy, LLC
    
    Garden City, KS
    
    Corn/milo
    
    
    55Bushmills Ethanol, Inc.*
    
    Atwater, MN
    
    Corn
    
    
    40Cardinal Ethanol
    
    Harrisville, IN
    
    Corn
    
    
    
    
    
    
    100Cargill, Inc.
    
    Blair, NE
    
    Corn
    
    
    85Eddyville, IA
    
    Corn
    
    
    35Cascade Grain
    
    Clatskanie, OR
    
    Corn
    
    
    
    
    
    
    108Castle Rock Renewable Fuels, LLC
    
    Necedah, WI
    
    Corn
    
    
    
    
    
    
    50Celunol
    
    Jennings, LA
    
    Sugar cane bagasse
    
    
    
    
    
    
    1.5Center Ethanol Company
    
    Sauget, IL
    
    Corn
    
    
    
    
    
    
    54Central Indiana Ethanol, LLC
    
    Marion, IN
    
    Corn
    
    
    40Central Illinois Energy, LLC
    
    Canton, IL
    
    Corn
    
    
    
    
    
    
    37Central MN Ethanol Coop*
    
    Little Falls, MN
    
    Corn
    
    
    21.5Chief Ethanol
    
    Hastings, NE
    
    Corn
    
    
    62Chippewa Valley Ethanol Co.*
    
    Benson, MN
    
    Corn
    
    
    45Cilion Ethanol
    
    Keyes, CA
    
    Corn
    
    
    50Commonwealth Agri-Energy, LLC*
    
    Hopkinsville, KY
    
    Corn
    
    
    33Corn, LP*
    
    Goldfield, IA
    
    Corn
    
    
    50Cornhusker Energy Lexington, LLC
    
    Lexington, NE
    
    Corn
    
    
    40Corn Plus, LLP*
    
    Winnebago, MN
    
    Corn
    
    
    44Coshoctan Ethanol, OH
    
    Coshoctan, OH
    
    Corn
    
    
    
    
    
    
    60Dakota Ethanol, LLC*
    
    Wentworth, SD
    
    Corn
    
    
    50DENCO, LLC*
    
    Morris, MN
    
    Corn
    
    
    21.5E Energy Adams, LLC
    
    Adams, NE
    
    Corn
    
    
    50E Caruso (Goodland Energy Center)
    
    Goodland, KS
    
    Corn
    
    
    
    
    
    
    20East Kansas Agri-Energy, LLC*
    
    Garnett, KS
    
    Corn
    
    
    35Elkhorn Valley Ethanol, LLC
    
    Norfolk, NE
    
    Corn
    
    
    40ESE Alcohol Inc.
    
    Leoti, KS
    
    Seed corn
    
    
    1.5Ethanol Grain Processors, LLC
    
    Obion, TN
    
    Corn
    
    
    
    
    
    
    100First United Ethanol, LLC
    
    Mitchell Co., GA
    
    Corn
    
    
    
    
    
    
    100Front Range Energy, LLC
    
    Windsor, CO
    
    Corn
    
    
    40Gateway Ethanol
    
    Pratt, KS
    
    Corn
    
    
    55Glacial Lakes Energy, LLC*
    
    Watertown, SD
    
    Corn
    
    
    100Global Ethanol/Midwest Grain
Processors
    
    Lakota, IA
    
    Corn
    
    
    95Riga, MI
    
    Corn
    
    
    57Golden Cheese Company of California*
    
    Corona, CA
    
    Cheese whey
    
    
    5Golden Grain Energy L.L.C.*
    
    Mason City, IA
    
    Corn
    
    
    110
    
    
    
    50Golden Triangle Energy, LLC*
    
    Craig, MO
    
    Corn
    
    
    20Grand River Distribution
    
    Cambria, WI
    
    Corn
    
    
    
    
    
    
    40Grain Processing Corp.
    
    Muscatine, IA
    
    Corn
    
    
    20Granite Falls Energy, LLC
    
    Granite Falls, MN
    
    Corn
    
    
    52Greater Ohio Ethanol, LLC
    
    Lima, OH
    
    Corn
    
    
    
    
    
    
    54Green Plains Renewable Energy
    
    Shenandoah, IA
    
    Corn
    
    
    50Superior, IA
    
    Corn
    
    
    
    
    
    
    50
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UnderConstruction/Current Capacity
    
    
    expansionsCOMPANY
    
    LOCATION
    
    FEEDSTOCK
    
    (mmgy)
    
    
    (mmgy)Hawkeye Renewables, LLC
    
    Iowa Falls, IA
    
    Corn
    
    
    105Fairbank, IA
    
    Corn
    
    
    115Menlo, IA
    
    Corn
    
    
    
    
    
    
    100Shell Rock, IA
    
    Corn
    
    
    
    
    
    
    110Heartland Corn Products*
    
    Winthrop, MN
    
    Corn
    
    
    100Heartland Grain Fuels, LP*
    
    Aberdeen, SD
    
    Corn
    
    
    9Huron, SD
    
    Corn
    
    
    12
    
    
    
    18Heron Lake BioEnergy, LLC
    
    Heron Lake, MN
    
    Corn
    
    
    
    
    
    
    50Holt County Ethanol
    
    ONeill, NE
    
    Corn
    
    
    
    
    
    
    100Husker Ag, LLC*
    
    Plainview, NE
    
    Corn
    
    
    26.5Idaho Ethanol Processing
    
    Caldwell, ID
    
    Potato Waste
    
    
    4Illinois River Energy, LLC
    
    Rochelle, IL
    
    Corn
    
    
    50Indiana Bio-Energy
    
    Bluffton, IN
    
    Corn
    
    
    
    
    
    
    101Iroquois Bio-Energy Company, LLC
    
    Rensselaer, IN
    
    Corn
    
    
    40KAAPA Ethanol, LLC*
    
    Minden, NE
    
    Corn
    
    
    40Kansas Ethanol, LLC
    
    Lyons, KS
    
    Corn
    
    
    
    
    
    
    55Land O Lakes*
    
    Melrose, MN
    
    Cheese whey
    
    
    2.6Levelland/Hockley County Ethanol, LLC
    
    Levelland, TX
    
    Corn
    
    
    
    
    
    
    40Lifeline Foods, LLC
    
    St. Joseph, MO
    
    Corn
    
    
    40Lincolnland Agri-Energy, LLC*
    
    Palestine, IL
    
    Corn
    
    
    48Lincolnway Energy, LLC*
    
    Nevada, IA
    
    Corn
    
    
    50Little Sioux Corn Processors, LP*
    
    Marcus, IA
    
    Corn
    
    
    52Marquis Energy, LLC
    
    Hennepin, IL
    
    Corn
    
    
    
    
    
    
    100Marysville Ethanol, LLC
    
    Marysville, MI
    
    Corn
    
    
    
    
    
    
    50Merrick & Company
    
    Golden, CO
    
    Waste beer
    
    
    3MGP Ingredients, Inc.
    
    Pekin, IL
    
    Corn/wheat starch
    
    
    78Atchison, KSMid America Agri Products/Wheatland
    
    Madrid, NE
    
    Corn
    
    
    
    
    
    
    44Mid-Missouri Energy, Inc.*
    
    Malta Bend, MO
    
    Corn
    
    
    45Midwest Renewable Energy, LLC
    
    Sutherland, NE
    
    Corn
    
    
    25Minnesota Energy*
    
    Buffalo Lake, MN
    
    Corn
    
    
    18NEDAK Ethanol
    
    Atkinson, NE
    
    Corn
    
    
    
    
    
    
    44New Energy Corp.
    
    South Bend, IN
    
    Corn
    
    
    102North Country Ethanol, LLC*
    
    Rosholt, SD
    
    Corn
    
    
    20Northeast Biofuels
    
    Volney, NY
    
    Corn
    
    
    
    
    
    
    114Northwest Renewable, LLC
    
    Longview, WA
    
    Corn
    
    
    
    
    
    
    55Otter Tail Ag Enterprises
    
    Fergus Falls, MN
    
    Corn
    
    
    
    
    
    
    57.5Pacific Ethanol
    
    Madera, CA
    
    Corn
    
    
    35Boardman, OR
    
    Corn
    
    
    35Burley, ID
    
    Corn
    
    
    
    
    
    
    50Stockton, CA
    
    Corn
    
    
    
    
    
    
    50Imperial, CA
    
    Corn
    
    
    
    
    
    
    50Panda Ethanol
    
    Hereford, TX
    
    Corn/milo
    
    
    
    
    
    
    115Parallel Products
    
    Louisville, KY
    
    Beverage Waste
    
    
    5.4R. Cucamonga, CAPatriot Renewable Fuels, LLC
    
    Annawan, IL
    
    Corn
    
    
    
    
    
    
    100Penford Products
    
    Cedar Rapids, IA
    
    Corn
    
    
    
    
    
    
    45Phoenix Biofuels
    
    Goshen, CA
    
    Corn
    
    
    25Pinal Energy, LLC
    
    Maricopa, AZ
    
    Corn
    
    
    55Pine Lake Corn Processors, LLC*
    
    Steamboat Rock, IA
    
    Corn
    
    
    20Plainview BioEnergy, LLC
    
    Plainview, TX
    
    Corn
    
    
    
    
    
    
    100Platinum Ethanol, LLC
    
    Arthur, IA
    
    Corn
    
    
    
    
    
    
    110
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UnderConstruction/Current Capacity
    
    
    expansionsCOMPANY
    
    LOCATION
    
    FEEDSTOCK
    
    (mmgy)
    
    
    (mmgy)Plymouth Ethanol, LLC
    
    Merrill, IA
    
    Corn
    
    
    
    
    
    
    50Poet*
    
    Sioux Falls, SD
    
    
    
    
    1,110
    
    
    
    375Alexandria, IN
    
    CornAshton, IA
    
    CornBig Stone, SD
    
    CornBingham Lake, MN
    
    CornCaro, MI
    
    CornChancellor, SD
    
    CornCoon Rapids, IA
    
    CornCorning, IA
    
    CornEmmetsburg, IA
    
    CornFostoria, OH
    
    CornGlenville, MN
    
    CornGowrie, IA
    
    CornGroton, SD
    
    CornHanlontown, IA
    
    CornHudson, SD
    
    CornJewell, IA
    
    CornLaddonia, MO
    
    CornLake Crystal, MN
    
    CornLeipsic, OH
    
    CornMacon, MO
    
    CornMarion, OH
    
    CornMitchell, SD
    
    CornNorth Manchester, IN
    
    CornPortland, IN
    
    CornPreston, MN
    
    CornScotland, SD
    
    CornPrairie Horizon Agri-Energy, LLC
    
    Phillipsburg, KS
    
    Corn
    
    
    40Quad-County Corn Processors*
    
    Galva, IA
    
    Corn
    
    
    27Red Trail Energy, LLC
    
    Richardton, ND
    
    Corn
    
    
    50Redfield Energy, Inc.
    
    Redfield, SD
    
    Corn
    
    
    50Reeve Agri-Energy
    
    Garden City, KS
    
    Corn/milo
    
    
    12Renew Energy
    
    Jefferson Junction, WI
    
    Corn
    
    
    
    
    
    
    130Siouxland Energy & Livestock Coop*
    
    Sioux Center, IA
    
    Corn
    
    
    25
    
    
    
    35Siouxland Ethanol, LLC
    
    Jackson, NE
    
    Corn
    
    
    50Southwest Iowa Renewable Energy, LLC*
    
    Council Bluffs, IA
    
    Corn
    
    
    
    
    
    
    110Sterling Ethanol, LLC
    
    Sterling, CO
    
    Corn
    
    
    42Tate & Lyle
    
    Loudon, TN
    
    Corn
    
    
    67
    
    
    
    38Ft. Dodge, IA
    
    Corn
    
    
    
    
    
    
    105The Andersons Albion Ethanol LLC
    
    Albion, MI
    
    Corn
    
    
    55The Andersons Clymers Ethanol, LLC
    
    Clymers, IN
    
    Corn
    
    
    110The Andersons Marathon Ethanol, LLC
    
    Greenville, OH
    
    Corn
    
    
    
    
    
    
    110Tharaldson Ethanol
    
    Casselton, ND
    
    Corn
    
    
    
    
    
    
    110Trenton Agri Products, LLC
    
    Trenton, NE
    
    Corn
    
    
    40United Ethanol
    
    Milton, WI
    
    Corn
    
    
    52United WI Grain Producers, LLC*
    
    Friesland, WI
    
    Corn
    
    
    49US BioEnergy Corp.
    
    Albert City, IA
    
    Corn
    
    
    310
    
    
    
    440Woodbury, MI
    
    CornHankinson, ND
    
    CornOrd, NE
    
    CornCentral City, NE
    
    CornDyersville, IA
    
    CornJanesville, MN
    
    CornMarion, SD
    
    Corn
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UnderConstruction/Current Capacity
    
    
    expansionsCOMPANY
    
    LOCATION
    
    FEEDSTOCK
    
    (mmgy)
    
    
    (mmgy)U.S. Energy Partners, LLC (White
Energy)
    
    Russell, KS
    
    Milo/wheat starch
    
    
    48Utica Energy, LLC
    
    Oshkosh, WI
    
    Corn
    
    
    48VeraSun Energy Corporation
    
    Aurora, SD
    
    Corn
    
    
    560
    
    
    
    330Ft. Dodge, IA
    
    CornCharles City, IA
    
    CornLinden, IN
    
    CornWelcome, MN
    
    CornHartley, IA
    
    CornAlbion, NE
    
    CornBloomingburg, OH
    
    CornWestern New York Energy, LLC
    
    Shelby, NY
    
    Corn
    
    
    50Western Plains Energy, LLC*
    
    Campus, KS
    
    Corn
    
    
    45Western Wisconsin Renewable Energy,
LLC*
    
    Boyceville, WI
    
    Corn
    
    
    40White Energy
    
    Hereford, TX
    
    Corn/Milo
    
    
    
    
    
    
    100Wind Gap Farms
    
    Baconton, GA
    
    Brewery Waste
    
    
    0.4Renova Energy
    
    Torrington, WY
    
    Corn
    
    
    5Hyaburn, ID
    
    Corn
    
    
    
    
    
    
    20Xethanol BioFuels, LLC
    
    Blairstown, IA
    
    Corn
    
    
    5Yuma Ethanol
    
    Yuma, CO
    
    Corn
    
    
    40Total Current Capacity at
135 ethanol biorefineries
    
    
    
    
    
    
    7,415.4Total Under Construction (65)/
Expansions (9)
    
    
    
    
    
    
    
    
    
    
    6,056.9Total Capacity
    
    
    
    
    
    
    13,472.3
 *       locally-owned
    
    Renewable Fuels Association,

Updated: December 18, 2007
 Competition from Alternative Fuels
    13




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Distillers Grains Competition
    14




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Sources and Availability of Raw Materials
 Corn Supply
        15




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Utilities
     Research and Development
  Dependence on One or a Few Major Customers
   16




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Costs and Effects of Compliance with Environmental Laws
 Permitting and Regulatory Activities
   Alcohol Fuel Producers Permit.
 SPCC and RMP.
  Air Permits.
  17




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Water Permits.
   Employees
  
 ITEM 1A. RISK FACTORS.
 You should carefully read and consider the risks and uncertainties below and the other information
contained in this report. The risks and uncertainties described below are not the only ones we may
face. The following risks, together with additional risks and uncertainties not currently known to
us or that we currently deem immaterial could impair our financial condition and results of
operations.
  18




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Risks Relating to Our Business
 We have no operating history, which could result in errors in management and operations
causing a reduction in the value of your investment.
 We have little to no experience in the ethanol industry and our directors do not dedicate
their efforts to our project on a full time basis, which may affect our ability to build and
operate the ethanol plant.
 We will depend on Fagen, Inc. for expertise in beginning the operation of our ethanol facility
and any loss of this relationship could cause us delay and added expense, placing us at a
competitive disadvantage.
 We have a significant amount of debt, and our existing debt financing agreements contain, and
our future debt financing agreements may contain, restrictive covenants that limit distributions
and impose restrictions on the operation of our business.
 Our financial performance will be significantly dependent on corn and natural gas prices and
generally we will not be able to pass on increases in input prices to our customers.
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Risks Relating to Our Business  We expect to engage in hedging transactions which
involve risks that can harm our business
 The spread between ethanol and corn prices can vary significantly and we do not expect the
spread to remain at the high levels recently experienced by the ethanol industry.
 Our exclusive reliance on Palmetto to coordinate the supply of corn to our plant could damage
our profitability if Palmetto is unable to locate a sufficient corn supply at competitive prices
and we have to find an alternative method of sourcing corn.
 Our revenues will be greatly affected by the price at which we can sell our ethanol and
distillers grains.
  Our business will be highly dependent on commodity prices, which are subject to significant
volatility and uncertainty, so our results could fluctuate significantly.
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We will sell all of the ethanol we produce to EcoEnergy, and we will be dependent upon
EcoEnergys ability to effectively market our ethanol.
 Changes and advances in ethanol production technology could require us to incur costs to
update our plant or could otherwise hinder our ability to compete in the ethanol industry or
operate profitably.
 Disruptions to infrastructure, or in the supply of fuel, natural gas or water, could
materially and adversely affect our business.
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Risks Related to the Production of Ethanol
 The corrosive nature of ethanol currently make it impossible to ship our ethanol via
pipelines; therefore, we expect to be heavily dependent on rail as our primary mode of transporting
our product to distribution terminals.
 The expansion of domestic ethanol production in combination with state bans on Methyl Tertiary
Butyl Ether (MTBE) and/or state renewable fuels standards may place strains on destination terminal
and blender infrastructure such that our ethanol cannot be marketed and shipped to the blending
terminals that would otherwise provide us the best cost advantages.
 Risks Related to Ethanol Industry
 Overcapacity within the ethanol industry could cause an oversupply of ethanol and a decline in
ethanol prices.
 Competition for qualified personnel in the ethanol industry is intense and we may not be able
to hire and retain qualified personnel to operate our ethanol plant.
 We expect to operate in a competitive industry and compete with larger, better financed
entities which could impact our ability to operate profitably.
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The inability of retailers to obtain pump certifications and availability of flex fuel
vehicles for use by consumers could prevent retailers from selling E85, which could decrease the
overall demand for ethanol.
  Risks Related to Regulation and Governmental Action
 A change in government policies favorable to ethanol may cause demand for ethanol to decline.
 The use of and demand for ethanol and its supply are highly dependent on various federal and
state legislation and regulation, and any changes in legislation or regulation could cause the
demand for ethanol to decline or its supply to increase, which could have a material adverse effect
on our business, results of operations and financial condition, once our plant is constructed and
producing ethanol.
  23




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##### Table of Contents



Government incentives for ethanol production, including federal tax incentives, may be
eliminated in the future, which could hinder our ability to operate at a profit .
 
 Item 2. DESCRIPTION OF PROPERTY.
   Item 6  Managements Discussion and Analysis of
Financial Condition and Plan of Operation
 
 Item 3. LEGAL PROCEEDINGS.
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
   24




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##### Table of Contents



PART II
 
 Item 5. MARKET FOR COMMON EQUITY AND RELATED MEMBER MATTERS.
   Item 6  Managements Discussion and Analysis or Plan of
Operations.
  1 4
 Item 11  Security Ownership of Certain Beneficial Owners and Management and Related
Party Matters
 
 Item 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
 This report contains forward-looking statements that involve significant risks and
uncertainties. The following discussion, which focuses on our plan of operation through the
commencement of operations of the plant, consists almost entirely of forward-looking information
and statements. Actual events or results may differ materially from those indicated or
anticipated, as discussed in the section entitled Forward Looking Statements. This may occur as
a result of many factors, including those set forth in Item 1, Description of BusinessRisk
Factors. The following discussion of our financial condition and plan of operation should also be
read in conjunction with our financial statements and notes to financial statements contained in
this report.
 Overview
   25




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Plan of Operations for the Next 12 Months
  Plant construction and start-up of plant operations
    26




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27




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##### Table of Contents



Permitting and Regulatory Activities
  Permits, Approvals, and DocumentsPermit, Approval or Document
    
    Responsible Agency
    
    StatusFEDERALAlcohol Fuel Producers Permit
    
    Tax and Trade Agency (TTB)
    
    Not yet obtained.Section 10/404 Nationwide
General Permit
    
    Army Corps of Engineers
    
    CompleteFish and Wildlife
Coordination Act and the
Endangered Species Act
Compliance
    
    US Dept. of the Interior,
Fish and Wildlife Services
(USFWS)
    
    Analysis not yet complete.Section 112(r) Risk
Management Plan (RMP)
    
    EPA/EPD
    
    Not yet filed.Process Safety Management
Plan (PSM)
    
    OSHA
    
    Not yet filed.Spill Prevention Control and
Countermeasure (SPCC) Plan
    
    EPA/EPD
    
    Not yet complete.Emergency Planning and
Community Right-to-Know
Notification
    
    EPA/EPD
    
    Report not yet submitted.STATEAir Quality Permit (Air
Permit)
    
    Georgia EPD
    
    Issued November 29, 2006NPDES Industrial Discharge
Permit
    
    EPD or City (Pelham)
    
    Tentative approval
requested from EPD;
application is not yet
submittedNPDES Storm Water General
Permit for Construction
    
    EPD
    
    Notice of Intent
submitted December 4,
2006NPDES Storm Water Discharge
Permit for Operation
    
    EPD
    
    Not yet obtained.Storm Water Pollution
Prevention Plan (SWPPP)
    
    EPD
    
    SWPPP for construction
activities submitted
December 4, 2006. SWPPP
for operations is to be
developed.Permit to Use Groundwater
    
    EPD
    
    Received July 18, 2007Non-Community Public Water
system permit
    
    EPD
    
    Preliminary. Permission
to Drill received June
20, 2007.Historical/Archeological
Recommendations
    
    Mitchell County Development
Authority
    
    Phase I archeological
survey completed by
Southwest Archeological
Services July 31, 2006.LOCALBuilding Permits
    
    Mitchell County, Georgia
    
    To be obtained by
Design-Build Contractor.
  28




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Trends and Uncertainties Impacting the Ethanol Industry and Our Future Operations
     29




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Technology Developments
  Trends and Uncertainties Impacting the Corn and Natural Gas Markets and Our Future Cost of Goods
Sold
     Liquidity and Capital Resources
 Financial Results
   30




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Project Capitalization
     Estimated Sources of Funds
  Sources of Funds (1)
    

    
        
    PercentOffering Proceeds (2)
    
    $
    74,010,000
    
    
    
    38.04
    %Seed Capital Proceeds (3)
    
    $
    1,200,000
    
    
    
    0.62
    %Senior Debt Financing (4)
    
    $
    100,000,000
    
    
    
    51.40
    %Operating Line of Credit (5)
    
    $
    15,000,000
    
    
    
    7.71
    %Interest Income
    
    $
    4,330,000
    
    
    
    2.23
    %Total Sources of Funds
    
    $
    194,540,000
    
    
    
    100.00
    %
 (1)
    
    The amount of equity offering proceeds and current senior debt financing.(2)
    
    At September 30, 2007, we had raised from investors approximately $74,010,000
through our registered offering.(3)
    
    We have issued a total of 2,000 units to our seed capital investors at a price of
$500.00 per unit. In addition, we have issued 600 units to our founders at a price of
$333.33 per unit. We have issued a total of 2,600 units in our two private placements in
exchange for proceeds of $1,200,000.(4)
    
    As of December 6, 2007, we had substantially completed our debt financing
arrangement with WestLB as the lead lender for approximately $100,000,000 in long term
debt.(5)
    
    As of December 6, 2007, we had substantially completed our arrangement with WestLB
for a revolving letter of credit in the amount of approximately$15,000,000.
  31




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Estimated Uses of Proceeds
   Estimate of Costs as of the Date of this Report
 Percent ofUse of Proceeds
    
    Amount
    
    
    TotalPlant construction
    
    $
    125,903,700
    
    
    
    64.72
    %Dryer
    
    
    1,000,000
    
    
    
    0.51
    %CCI Contingencies
    
    
    4,574,000
    
    
    
    2.35
    %Land cost
    
    
    1,005,000
    
    
    
    0.52
    %Site development costs*
    
    
    11,604,000
    
    
    
    5.96
    %Construction contingency
    
    
    2,240,000
    
    
    
    1.15
    %Construction performance bond
    
    
    676,700
    
    
    
    0.35
    %Construction insurance costs
    
    
    464,800
    
    
    
    0.24
    %Administrative building
    
    
    500,000
    
    
    
    0.26
    %Office equipment
    
    
    100,000
    
    
    
    0.05
    %Computers, Software, Network
    
    
    180,000
    
    
    
    0.09
    %Railroad
    
    
    4,850,000
    
    
    
    2.49
    %Rolling stock
    
    
    500,000
    
    
    
    0.26
    %Railcars (lease)
    
    
    1,040,000
    
    
    
    0.53
    %Capitalized interest
    
    
    9,771,000
    
    
    
    5.02
    %Start up costs:Financing costs
    
    
    4,855,600
    
    
    
    2.50
    %Debt Service Reserve
    
    
    7,671,200
    
    
    
    3.94
    %Organization and pre production costs
    
    
    4,501,300
    
    
    
    2.31
    %Inventory  working capital
    
    
    3,880,000
    
    
    
    1.99
    %Inventory  corn
    
    
    3,200,000
    
    
    
    1.64
    %Inventory  chemicals and ingredients
    
    
    420,000
    
    
    
    0.22
    %Inventory  Ethanol
    
    
    3,000,000
    
    
    
    1.54
    %Inventory  DDGS
    
    
    500,000
    
    
    
    0.26
    %Legal/Consulting
    
    
    502,700
    
    
    
    0.26
    %Paving
    
    
    650,000
    
    
    
    0.33
    %Wells
    
    
    450,000
    
    
    
    0.23
    %Spare parts  process equipment
    
    
    500,000
    
    
    
    0.26
    %Total
    
    $
    194,540,000
    
    
    
    100.00
    %
 *
    
    includes site development, fire protection and water treatment
   32




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Critical Accounting Estimates
  Employees
   # Full-TimePosition
    
    PersonnelProduction Supervisors
    
    
    4Operating Workers
    
    
    17Compliance Officers
    
    
    3Maintenance/Repair Workers
    
    
    3Welders
    
    
    3Electrical/Electronic Engineering Technicians
    
    
    2Lab Manager
    
    
    1Lab Assistant
    
    
    2Laborers
    
    
    10General Manager
    
    
    1Plant/Commodity Managers
    
    
    2Accounting
    
    
    1Office Clerk
    
    
    1TOTAL
    
    
    50
 Off-Balance Sheet Arrangements
  Employees
 DESCRIPTION OF BUSINESS  Employees.
  33




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Item 7. FINANCIAL STATEMENTS.
  
     
  34




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FIRST UNITED ETHANOL, LLC   BALANCE SHEET
 September 30, 2007ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    3,667,431Restricted cash and cash equivalents (Note 6)
    
    
    82,933,902Accrued interest receivable
    
    
    378,501Total current assets
    
    
    86,979,834PROPERTY AND EQUIPMENT, at costOffice furniture and equipment
    
    
    92,636Land
    
    
    1,005,000Construction in progress (Note 3)
    
    
    66,320,839Less accumulated depreciation
    
    
    (11,562
    )67,406,913OTHER ASSETS
    
    
    699,313RESTRICTED CASH AND CASH EQUIVALENTS
    
    
    17,774,540DEFERRED DEBT FINANCING COSTS, net of amortization
    
    
    2,449,772$
    175,310,372LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESNotes payable (Note 6)
    
    $
    82,500,000Accounts payable and accrued expenses
    
    
    10,106,372Accrued interest
    
    
    1,631,242Total current liabilities
    
    
    94,237,614DEFERRED GRANT PROCEEDS
    
    
    50,000SUBORDINATED DEBT
    
    
    10,000,000COMMITMENTS AND CONTINGENCIES (Note 3)MEMBERS EQUITYMembership contributions, 76,610 units issued and outstanding
    
    
    75,005,340Deficit accumulated during the development stage
    
    
    (3,982,582
    )71,022,758$
    175,310,372
 See Notes to Financial Statements.
  35




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FIRST UNITED ETHANOL, LLC   STATEMENTS OF OPERATIONS
 For the period fromMarch 9, 2005Year ending
    
    
    Year ending
    
    
    (inception) throughSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2007Revenues
    
    $
    
    
    
    $
        
    
    
    $
        Operating expensesOrganizational expenses
    
    
        
    
    
    
    
    
    
    
    25,145Start-up expenses
    
    
    740,000
    
    
    
    109,398
    
    
    
    979,966General and administrative expenses
    
    
    2,077,528
    
    
    
    410,294
    
    
    
    2,491,276Total
    
    
    2,817,528
    
    
    
    519,692
    
    
    
    3,496,387Operating loss
    
    
    (2,817,528
    )
    
    
    (519,692
    )
    
    
    (3,496,387
    )Other income (expense)Other income
    
    
        
    
    
    
    16,000
    
    
    
    16,000Interest expense
    
    
    (6,801,987
    )
    
    
    
    
    
    
    (6,801,987
    )Interest income
    
    
    6,066,135
    
    
    
    233,657
    
    
    
    6,299,792(735,852
    )
    
    
    249,657
    
    
    
    (486,195
    )Net loss
    
    $
    (3,553,380
    )
    
    $
    (270,035
    )
    
    $
    (3,982,582
    )Net loss per unit (Basic and Diluted)
    
    $
    (56.87
    )
    
    $
    (103.86
    )
    
    $
    (155.93
    )Weighted average units outstanding
    
    
    62,484
    
    
    
    2,600
    
    
    
    25,541
 See Notes to Financial Statements.
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FIRST UNITED ETHANOL, LLC   STATEMENTS OF CASH FLOWS
 For the period from
March 9, 2005Year ending
    
    
    Year ending
    
    
    (inception) throughSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2007CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (3,553,380
    )
    
    $
    (270,035
    )
    
    $
    (3,982,581
    )Adjustments to reconcile net loss to net
cash used in operating activities:Contribution of services
    
    
    
    
    
    
    9,000
    
    
    
    9,000Depreciation expense
    
    
    6,835
    
    
    
    2,876
    
    
    
    9,711Amortization of prepaid interest expense and deferred financing costs
    
    
    879,779
    
    
    
    
    
    
    
    879,779Non-cash compensation expense
    
    
    42,491
    
    
    
    
    
    
    
    42,491Changes in assets and liabilities:Increase in accrued interest receivable
    
    
    (2,310,861
    )
    
    
    (224,432
    )
    
    
    (2,535,293
    )Increase in other assets
    
    
    (560,980
    )
    
    
    
    
    
    
    (560,980
    )Increase in accounts payable and
accrued expenses
    
    
    660,218
    
    
    
    97,830
    
    
    
    791,474Increase in accrued interest
    
    
    1,631,242
    
    
    
    
    
    
    
    1,631,242Increase in deferred grant proceeds
    
    
    
    
    
    
    20,000
    
    
    
    50,000Net cash used in operating activities
    
    
    (3,204,656
    )
    
    
    (364,761
    )
    
    
    (3,665,157
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment
    
    
    (57,932,393
    )
    
    
    (167,399
    )
    
    
    (58,106,726
    )Net cash used in investing activities
    
    
    (57,932,393
    )
    
    
    (167,399
    )
    
    
    (58,106,726
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of members equity
    
    
    74,012,000
    
    
    
    
    
    
    
    75,212,000Funding of restricted cash balance
    
    
    (7,671,150
    )
    
    
    
    
    
    
    (7,671,150
    )Expenditures for debt financing and equity offering costs
    
    
    (1,841,118
    )
    
    
    (241,738
    )
    
    
    (2,101,536
    )Net cash provided by (used in) financing activities
    
    
    64,499,732
    
    
    
    (241,738
    )
    
    
    65,439,314Increase (decrease) in cash and cash equivalents
    
    
    3,362,683
    
    
    
    (773,898
    )
    
    
    3,667,431Cash and cash equivalents, beginning of period
    
    
    304,748
    
    
    
    1,078,646
    
    
    
    Cash and cash equivalents, end of period
    
    $
    3,667,431
    
    
    $
    304,748
    
    
    $
    3,667,431Supplemental cash flow informationCash paid for interest
    
    $
    5,170,745
    
    
    $
    
    
    
    $
    5,170,745Non-cash investing and financing activitiesContribution of services from Directors
    
    $
    
    
    
    $
    9,000
    
    
    $
    9,000Proceeds from notes payable received by Bond Trustee
    
    $
    92,500,000
    
    
    $
    
    
    
    $
    92,500,000
 See Notes to Financial Statements.
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FIRST UNITED ETHANOL, LLC
 STATEMENTS OF CHANGES IN MEMBERS EQUITY
 Units
    
    
    Members EquityBalance, March 9, 2005
    
    
    
    
    
    $
    Contributed capital for 600 units at $333.33 per unit, March 2005
    
    
    600
    
    
    
    200,000Contributed capital for 2000 units at $500.00 per unit, September 2005
    
    
    2,000
    
    
    
    1,000,000Cost related to contributed capital
    
    
    
    
    
    
    (13,692
    )Net loss for the period ending September 30, 2005
    
    
    
    
    
    
    (159,166
    )Members equity at September 30, 2005
    
    
    2,600
    
    
    $
    1,027,142Contribution of services from Directors
    
    
    
    
    
    
    9,000Subscribed units, 66,810 units
    
    
    
    
    
    
    66,812,000Net loss for the year ending September 30, 2006
    
    
    
    
    
    
    (270,035
    )Members equity at September 30, 2006
    
    
    2,600
    
    
    $
    67,578,107Issuance of subscribed units, 66,810 units
    
    
    66,810
    
    
    
    Contributed capital for 7,200 units at $1,000 per unit
    
    
    7,200
    
    
    
    7,200,000Cost related to contributed capital
    
    
    
    
    
    
    (244,460
    )Unit-based compensation expense for unit options to employees
    
    
    
    
    
    
    42,491Net loss for the year ending September 30, 2007
    
    
    
    
    
    
    (3,553,380
    )Members equity at September 30, 2007
    
    
    76,610
    
    
    $
    71,022,758
 See Notes to Financial Statements.
  38




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FIRST UNITED ETHANOL, LLC
 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Nature of Business
   Basis of Presentation
  Use of Estimates
  Revenue Recognition
  Deferred Debt Financing Costs
  Property and Equipment
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FIRST UNITED ETHANOL, LLC
 Grant Proceeds
  Organization and Start-up Costs
  Income Taxes
  September 302007Financial statement basis of assets
    
    $
    175,310,372Organization and start-up costs capitalized for tax purposes
    
    
    1,529,630Income tax basis of assets
    
    $
    176,840,002
  Net Income or Loss per Membership Unit
  Recently Issued Accounting Pronouncements
   40




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FIRST UNITED ETHANOL, LLC
 Accounting for Uncertainty in Income Taxes -
an interpretation of FASB Statement No. 109 (FIN 48).
  NOTE 2. MEMBERSHIP EQUITY
      NOTE 3. COMMITMENTS AND CONTINGENCIES
 Development Stage Operations and Liquidity
   41




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FIRST UNITED ETHANOL, LLC
 Consulting Agreements:
 Transaction with Thompson, Hoffman & Company
  
    
    $5,000 per month for 11 months;
    
    $100 per hour after the date which is twelve months from the date of
the agreement;
    
    $25,000 upon completion of the equity drive, which was paid in
November 2006;
    
    $25,000 upon completion of the ethanol plants construction;
    
    within 30 days after the ethanol plants second year of production, an
amount equal to one percent of EBITDA; and
    
    within 30 days after the ethanol plants third full year of
production, an amount equal to .5% of EBITDA generated by the ethanol
plant.
 Design Build Agreement
  Permits
  Land Option
   42




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FIRST UNITED ETHANOL, LLC
 Agreement with Director
  Agreements with Officers
   Purchase Commitments
     43




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FIRST UNITED ETHANOL, LLC
      NOTE 4. RELATED PARTIES
   44




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FIRST UNITED ETHANOL, LLC
    NOTE 5. UNIT OPTION PLAN
  Share-Based Payments.
    2007Expected volatility
    
    
    66
    %Expected dividends
    
    
    Expected term (in years)
    
    
    6Risk-free rate
    
    
    5.12
    %
  45




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##### Table of Contents



FIRST UNITED ETHANOL, LLC
  Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Units
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at October 1, 2006
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $Granted
    
    
    957
    
    
    
    1,000
    
    
    
    10
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    Outstanding at September 30, 2007
    
    
    957
    
    
    $
    1,000
    
    
    
    9.25
    
    
    $
    Exercisable at September 30, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
  NOTE 6. DEBT FINANCING ARRANGEMENT
      46




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FIRST UNITED ETHANOL, LLC
  NOTE 7. SUBSEQUENT EVENTS
     47




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Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 Item 8A. CONTROLS AND PROCEDURES.
 Management of First United Ethanol is responsible for establishing and maintaining adequate internal control over
financial reporting and for the assessment of the effectiveness of internal controls over financial reporting. Our
internal control system over financial reporting is a process designed under the supervision of our Chief Executive
Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of the financial statements in accordance with U.S. generally accepted accounting principles. All
internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions. First United Ethanols management, primarily First United Ethanols Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of First United Ethanols disclosure controls and procedures as required by Rule
13a-15(b) of the Exchange Act as of the end of the period covered by this quarterly report. Based on their evaluation
of our disclosure controls and procedures, they have concluded that, due to the material weaknesses described below,
our disclosure controls and procedures are not effective to ensure that information required to be disclosed in the
reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time
periods required by the forms and rules of the Securities and Exchange Commission; and to ensure that the information
required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and
communicated to our management including our Chief Executive and Chief Financial Officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management and the audit committee have concluded that during the period covered by this report, there were
deficiencies that existed in the design or operation of our internal control over financial reporting that adversely
affected our disclosure controls and that are be considered to be material weaknesses. Specifically, the flow of
information and documentation to our accounting department and management was not sufficient to ensure a timely review
and appropriate accounting. There were several adjustments related to the financial statements that were proposed and
recorded, as well as revisions that were made, due to items that were not identified by our disclosure controls and
procedures. These included adjustments required to the financial statements related to the recording of the promissory
notes signed in conjunction with the Companys Senior and Subordinated credit facilities and the related proceeds held
in Bond Trustee accounts, the interest expense and interest income associated with these notes and proceeds, and to
expense certain costs previously capitalized as deferred debt financing costs. Although each such proposed adjustment
or revision, when taken alone, would likely not be considered to be a material weakness, we have determined that the
number of changes and the nature of the items, when taken together, are considered to be a material weakness. Our audit committee will increase its review of our disclosure controls and procedures. Additionally, as a result
of the material weaknesses identified, management has increased its review of financial information relative to its
financing arrangements. The material weakness will not be considered remediated until the applicable remedial controls
operate for a sufficient period of time and management has concluded that these controls are operating effectively. 
 Item 8B. OTHER INFORMATION.
  
 PART III.
 
 ITEM 9. DIRECTORS; EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
 Identification of Directors, Executive Officers and Significant Employees
  Murray Campbell, Chairman and Director.
 Tommy L. Hilliard, Vice Chairman and Director.
 Steve Collins, Treasurer and Director.
 Miley Adams, Vice President of Marketing and Director.
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Bryant Campbell, Secretary and Director.
 Thomas H. Dollar, II, Vice President of Operations and Director.
 John B. Bubba Johnson, Director.
 J. Harris Morgan, Jr., Director.
 Donald Shirah, Director.
 Kenneth J. Hunnicutt, Director.
 Robert L. Holden, Sr., Director.
 Michael W. Harrell, Director.
 Anthony J. Flagg, Chief Executive Officer.
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##### Table of Contents



Lawrence Kamp, Chief Financial Officer.
 Adoption of Code of Ethics
   Audit Committee
  
 ITEM 10. EXECUTIVE COMPENSATION
 General
  Employment Agreements
  Employment Agreement with Tony Flagg.
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##### Table of Contents



Employment Agreement with Lawrence Kamp. 1 4
  Summary Compensation Table.
 Non-EquityName and
    
    
    
    
    
    
    
    
    
    
    
    Incentive PlanPrincipal
    
    
    
    
    
    
    
    
    
    
    
    Compensation
    
    
    All OtherPosition
    
    Year
    
    Salary
    
    
    Option Awards
    
    
    Earnings(3)
    
    
    Compensation
    
    
    TotalAnthony J. Flagg,
Chief Executive
Officer
    
    Fiscal Year 2007
    
    $
    175,000
    
    
    $
    34,010
    (4)
    
    $
    0
    
    
    $
    0
    
    
    $
    209,010Fiscal Year 2006
    
    $
    5,833

    (1)
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    5,833Lawrence Kamp
Chief Financial
Officer
    
    Fiscal Year 2007
    
    $
    67,231
    (2)
    
    $
    8,481
    (4)
    
    $
    0
    
    
    $
    0
    
    
    $
    75,712Fiscal Year 2006
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
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##### Table of Contents



(1)
    
    Includes all compensation paid to Mr. Flagg between September 25, 2006, the
date he signed the employment agreement with First United, and the end of the last
fiscal year, September 30, 2006.(2)
    
    Includes all compensation paid to Mr. Kamp between March 6, 2007, the date he
signed the employment agreement with First United, and the end of the most recent
fiscal year, September 30, 2007.(3)
    
    Mr. Flagg and Mr. Kamp are each eligible for an annual performance bonus.
However, both executives and the board of directors have agreed that performance
bonuses will not be paid until the ethanol plant is operational.(4)
    
    Includes a pro rata portion of amounts recognized for financial reporting
purposes for the 2007 fiscal year. The Company estimated future non-vested option
forfeitures at 0% as of September 30, 2007. Valuation of the fair value of the options
and forfeitures were determined in accordance with SFAS 123R. Please see Note 5 to our
financial statements for a discussion of the assumptions used in the valuation of our
options.
 Option Plan and Option Agreements
  1 4
 Director Compensation
  Name
    
    Fees Earned orPaid in Cash
    
    
    TotalMurray Campbell
    
    $
    65,000
    (1)
    
    $
    65,000
 (1)
    
    Paid pursuant to the project development and consulting agreement dated April
28, 2006.
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##### Table of Contents



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER
MATTERS
  Number of
    
    
    Number ofSecurities
    
    
    SecuritiesUnderlying
    
    
    UnderlyingUnexercised
    
    
    Unexercised
    
    
    Per UnitName and
    
    Options
    
    
    Options
    
    
    OptionPrincipal Position
    
    Exercisable
    
    
    Unexercisable
    
    
    Exercise Price
    
    
    Option Expiration DateAnthony J. Flagg,
Chief Executive Officer
    
    
    766
    (1)
    
    
    0
    
    
    $
    1,000
    
    
    June 8, 2017Lawrence Kamp
Chief Financial Officer
    
    
    191
    (1)
    
    
    0
    
    
    $
    1,000
    
    
    June 8, 2017
 (1)
    
    As of September 30, 2007, none of the option units were vested. No units will become
vested until 2008. Under the terms of the option agreements, any exercise remains subject
to a repurchase option held by the Company unless and until they become vested units.
 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
  Name and Address of
    
    Amount and Nature ofTitle of Class
    
    Beneficial Owner
    
    Beneficial Ownership
    
    Percent of ClassMembership Units
    
    Ethanol Capital Group, LLC
5151 E. Broadway Ste. 510
Tucson, AZ 85711
    

    5,000 units
    
    
    6.45
    %Membership Units
    
    Green Capital, LLC
8501 E. Willow Ridge
Sioux Falls, SD 57110
    
    5,000 units
    
    
    6.45
    %
 (2)
    
    Beneficial ownership is determined in accordance with SEC rules and generally includes
holding voting and investment power with respect to the securities. The percentage of class is
calculated based on the total number of units currently outstanding plus the number of units for
which options may be exercised.
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##### Table of Contents



SECURITY OWNERSHIP OF MANAGEMENT
  Name of
    
    Amount and Nature
    
    Percent of ClassTitle of Class
    
    Beneficial Owner(1)
    
    of Beneficial Owner
    
    at 2007 Year EndMembership Units
    
    Murray Campbell
    
    380 units
    
    
    0.49
    %Membership Units
    
    Tommy L. Hilliard
    
    250 units
    
    
    0.32
    %Membership Units
    
    Steve Collins
    
    155units
    
    
    0.20
    %Membership Units
    
    Terry Hart
    
    40 units
    
    
    0.05
    %Membership Units
    
    Miley Adams
    
    200 units
    
    
    0.26
    %Membership Units
    
    Bryant Campbell
    
    250 units
    
    
    0.32
    %Membership Units
    
    John B. Johnson
    
    180 units
    
    
    0.23
    %Membership Units
    
    J. Harris Morgan
    
    400 units
    
    
    0.52
    %Membership Units
    
    Donald Shirah
    
    150 units
    
    
    0.20
    %Membership Units
    
    Kenneth J. Hunnicutt
    
    100 units
    
    
    0.13
    %Membership Units
    
    Robert L. Holden, Sr.
    
    250 units
    
    
    0.32
    %Membership Units
    
    Thomas H. Dollar, II (2)
    
    1,300 units
    
    
    1.68
    %Membership Units
    
    Michael W. Harrell (3)
    
    600 units
    
    
    0.77
    %Membership Units
    
    Anthony J. Flagg, CEO (4)
    
    766 units
    
    
    0.99
    %Membership Units
    
    Lawrence Kamp, CFO (5)
    
    191 units
    
    
    0.25
    %Totals:
    
    5,212 units
    
    
    6.73
    %
 
      
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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##### Table of Contents



ITEM 13. EXHIBITS
  Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing10.37
    
    Sitework Contract with Folsom Construction Co. dated January 17, 2007
    
    110.38
    
    Natural Gas Facilities Agreement
with the City of Camilla, Georgia dated January 23, 2007
    
    210.39
    
    Natural Gas Supply and Capacity
Agreement with the City of Camilla, Georgia dated January 26, 2007
    
    210.40
    
    Ethanol Marketing Contract with Eco-Energy, Inc. dated December 29, 2006
    
    310.41
    
    Employment Agreement with Larry Kamp dated March 6, 2007
    
    410.42
    
    2007 Membership Unit Option Plan adopted on April 11, 2007
    
    510.43
    
    Change Order #1 to Sitework Contract dated May 11, 2007
    
    610.44
    
    Letter Agreement for Design and
Construction of the Water Pre-Treatment System and Fire Protection System dated June 13, 2007 with Fagen, Inc.
    
    710.45
    
    Contract with Southern Concrete Construction Company dated May 31, 2007
    
    710.46
    
    Risk Management Agreement with FCStone dated July 9, 2007.+
    
    810.47
    
    Contract with Railworks Track Systems, Inc. dated September 12, 2007
    
    910.48
    
    Railroad Car Lease Agreement with
Trinity Industries Leasing Company dated November 5, 2007.
    
    1010.49
    
    Pledge and Security Agreement with WestLB dated November 20, 2007.
    
    *10.50
    
    Senior Credit Agreement with WestLB dated November 20, 2007.
    
    *10.51
    
    Membership Unit Option Agreement with Mr. Flagg dated December 18, 2007
    
    *10.52
    
    Membership Unit Option Agreement with Mr. Kamp dated December 18, 2007
    
    *31.1
    
    Certificate pursuant to 17 CFR 240 15d-14(a)
    
    *31.2
    
    Certificate pursuant to 17 CFR 240 15d-14(a)
    
    *32.1
    
    Certificate pursuant to 18 U.S.C. Section 1350
    
    *32.2
    
    Certificate pursuant to 18 U.S.C. Section 1350
    
    *
 
 (1)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on January 23, 2007.(2)
    
    Incorporated by reference to Exhibit 99.1 and Exhibit 99.2 in Form 8-K filed on January 31,
2007.(3)
    
    Incorporated by reference to the exhibit of the same number in Form 10-QSB filed on February
14, 2007.(4)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on March 12, 2007.(5)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on April 17, 2007.(6)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on May 16, 2007.(7)
    
    Incorporated by reference to the exhibit of the same number in Form 10-QSB filed on August
14, 2007.(8)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on September 13, 2007.(9)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on September 18, 2007.(10)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on November 16, 2007.(*)
    
    Filed herewith.(+)
    
    Material has been omitted pursuant to a request for confidential treatment and such materials
have been filed separately with the Securities and Exchange Commission.
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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Category
    
    Year
    
    FeesAudit Fees
    
    2007
    
    $
    90,0002006
    
    $
    39,4552005
    
    $
    30,000Audit-Related Fees
    
    2007
    
    
    02006
    
    $
    11,9602005
    
    
    0Tax Fees
    
    2007
    
    
    02006
    
    
    02005
    
    
    0All Other Fees
    
    2007
    
    
    02006
    
    
    02005
    
    
    0
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##### Table of Contents



SIGNATURES
  FIRST UNITED ETHANOL, LLCDate:
    
    December 28, 2007
    
    
    
    /s/ Anthony Flagg

Anthony FlaggChief Executive OfficerDate:
    
    December 28, 2007
    
    
    
    /s/ Lawrence Kamp

Lawrence KampChief Financial Officer
  Date:
    
    December 28, 2007
    
    
    
    /s/ Anthony J. Flagg

Anthony J. FlaggChief Executive OfficerDate:
    
    December 28, 2007
    
    
    
    /s/ Lawrence Kamp

Lawrence KampChief Financial OfficerDate:
    
    December 28, 2007
    
    
    
    /s/ Murray Campbell

Murray Campbell, Chairman and DirectorDate:
    
    December 28, 2007
    
    
    
    /s/ Miley Adams

Miley Adams, VP of Marketing and DirectorDate:
    
    December 28, 2007
    
    
    
    /s/ Steve Collins

Steve Collins, Treasurer and DirectorDate:
    
    December 28, 2007
    
    
    
    /s/ Bryant Campbell

Bryant Campbell, Secretary and DirectorDate:
    
    December 28, 2007
    
    
    
    Donald Shirah, DirectorDate:
    
    December 28, 2007
    
    
    
    /s/ J. Harris Morgan, Jr.

J. Harris Morgan, Jr., DirectorDate:
    
    December 28, 2007
    
    
    
    Tommy Hilliard, Vice Chairman and DirectorDate:
    
    December 28, 2007
    
    
    
    John B. Johnson, DirectorDate:
    
    December 28, 2007
    
    
    
    /s/ Thomas H. Dollar, II

Thomas H. Dollar, II, VP of Operations and DirectorDate:
    
    December 28, 2007
    
    
    
    /s/ Mike Harrell

Mike Harrell, DirectorDate:
    
    December 28, 2007
    
    
    
    /s/ Robert L. Holden, Sr.

Robert L. Holden, Sr., DirectorDate:
    
    December 28, 2007
    
    
    
    /s/ Kenneth Jack Hunnicutt

Kenneth Jack Hunnicutt, Director
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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description10.49
    
    Pledge and Security Agreement with WestLB dated November 20, 2007.10.50
    
    Senior Credit Agreement with WestLB dated November 20, 2007.10.51
    
    Membership Unit Option Agreement for Mr. Flagg dated December 18, 200710.52
    
    Membership Unit Option Agreement for Mr. Kamp dated December 18, 200731.1
    
    Certificate pursuant to 17 CFR 240 15d-14(a)31.2
    
    Certificate pursuant to 17 CFR 240 15d-14(a)32.1
    
    Certificate pursuant to 18 U.S.C. Section 135032.2
    
    Certificate pursuant to 18 U.S.C. Section 1350
  58