##### Table of Contents



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, 2008
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from  to
 Commission file number 000-53039
 FIRST UNITED ETHANOL, LLC
  Georgia
(State or other jurisdiction of 
incorporation or organization)
    
    20-2497196
(I.R.S. Employer Identification No.)4433 Lewis B. Collins Road, Pelham, Georgia
(Address of principal executive offices)
    
    31779
(Zip Code)
 (229) 522-2822
 o
  þ o
 þ
 o þ
 None
   o þ
 DOCUMENTS INCORPORATED BY REFERENCE




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##### 



INDEX
 PagePART I
    
    
    4ITEM 1. DESCRIPTION OF BUSINESS
    
    
    4ITEM 1A. RISK FACTORS
    
    
    18ITEM 2. DESCRIPTION OF PROPERTY
    
    
    19ITEM 3. LEGAL PROCEEDINGS
    
    
    20ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    20PART II
    
    
    20ITEM 5. MARKET FOR COMMON EQUITY, RELATED MEMBER MATTERS AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES
    
    
    20ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
    
    
    21ITEM 7. FINANCIAL STATEMENTS
    
    
    28ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    45ITEM 8A(T). CONTROLS AND PROCEDURES
    
    
    45ITEM 8B. OTHER INFORMATION
    
    
    45PART III
    
    
    46ITEM
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
    
    
    46ITEM 10. EXECUTIVE COMPENSATION
    
    
    46ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER MATTERS
    
    
    46ITEM
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
    
    
    46ITEM 13. EXHIBITS
    
    
    46ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    47SIGNATURES
    
    
    48Exhibit 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;
 
    
    Volatility of corn, natural gas, ethanol, unleaded gasoline, distillers grain and
other commodities prices;
 
    
    Limitations and restrictions contained in the instruments and agreements governing
our indebtedness;
 
    
    Our ability to generate sufficient liquidity to fund our operations, debt service
requirements and capital expenditures;
 
    
    The results of our hedging transactions and other risk management strategies;
 
    
    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 operations;
 
    
    The effects of mergers or consolidations in the ethanol industry;
 
    
    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 of credit to support the level of liquidity necessary to
implement our risk management activities;
 
    
    Changes in or elimination of federal and/or state laws (including the elimination of
any federal and/or state ethanol tax incentives);
 
    
    Overcapacity within the ethanol industry;
 
    
    Difficulties or disruptions we may encounter during the initial operating period at
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;
 
    
    Our reliance on key management personnel;
 
    
    The development of infrastructure related to the sale and distribution of ethanol;
and
 
    
    Competition in the ethanol industry and from other alternative fuel additives.
   3




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AVAILABLE INFORMATION
 www.firstunitedethanol.com
 
 PART I
 
 Item 1. DESCRIPTION OF BUSINESS.
 Business Development
  Item 6. Managements Discussion and
Analysis or Plan of Operation  Liquidity and Capital Resources
 Principal Products and Markets
 Ethanol
     4




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Distillers Grains
  Carbon Dioxide
  Ethanol and Distillers Grains Markets
 Distribution of Principal Products
    5




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##### Table of Contents



Distribution of Principal Products
  Ethanol Distribution
  Distillers Grains Distribution
  New Products and Services
  Governmental Regulation and Federal Ethanol Supports
 Federal Ethanol Supports
    6




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##### Table of Contents



Effect of Governmental Regulation
    Competition
   7




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##### Table of Contents



most
 U.S. FUEL ETHANOL BIOREFINERIES AND PRODUCTION CAPACITY
million gallons per year (mmgy)
 Operating
    
    
    ExpansionCapacity
    
    
    Capacity
    
    
    Under ConstructionCompany
    
    Location
    
    Feedstock
    
    (mgy)
    
    
    (mgy)
    
    
    Capacity (mgy)Abengoa Bioenergy Corp. (Total)
    
    
    
    
    
    
    168.0
    
    
    
    
    
    
    
    176.0Abengoa Bioenergy Corp.
    
    Madison, IL
    
    cornAbengoa Bioenergy Corp.
    
    Mt. Vernon, IN
    
    cornAbengoa Bioenergy Corp.
    
    Colwich, KS
    
    corn/miloAbengoa Bioenergy Corp.
    
    Ravenna, NE
    
    CornAbengoa Bioenergy Corp.
    
    York, NE
    
    CornAbsolute Energy, LLC*
    
    St. Ansgar, IA
    
    Corn
    
    
    100.0ACE Ethanol, LLC
    
    Stanley, WI
    
    Corn
    
    
    41.0Adkins Energy, LLC*
    
    Lena, IL
    
    Corn
    
    
    40.0Advanced Bioenergy
    
    Fairmont, NE
    
    Corn
    
    
    100.0Ag Energy Resources, Inc.
    
    Benton, IL
    
    corn
    
    
    
    
    
    
    
    
    
    
    5.0AGP*
    
    Hastings, NE
    
    Corn
    
    
    52.0Agri-Energy, LLC*
    
    Luverne, MN
    
    Corn
    
    
    21.0Al-Corn Clean Fuel*
    
    Claremont, MN
    
    Corn
    
    
    42.0Amaizing Energy, LLC*
    
    Atlantic, IA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    110.0Amaizing Energy, LLC*
    
    Denison, IA
    
    Corn
    
    
    48.0Archer Daniels Midland (Total)
    
    
    
    
    
    
    1,070.0
    
    
    
    550.0Archer Daniels Midland
    
    Cedar Rapids, IA
    
    CornArcher Daniels Midland
    
    Clinton, IA
    
    CornArcher Daniels Midland
    
    Decatur, IL
    
    Corn
  8




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Operating
    
    
    ExpansionCapacity
    
    
    Capacity
    
    
    Under ConstructionCompany
    
    Location
    
    Feedstock
    
    (mgy)
    
    
    (mgy)
    
    
    Capacity (mgy)Archer Daniels Midland
    
    Peoria, IL
    
    CornArcher Daniels Midland
    
    Marshall, MN
    
    CornArcher Daniels Midland
    
    Wallhalla, ND
    
    Corn/barleyArcher Daniels Midland
    
    Columbus, NE
    
    CornArkalon Energy, LLC
    
    Liberal, KS
    
    Corn
    
    
    110.0Aventine Renewable Energy, LLC (Total)
    
    
    
    
    
    
    207.0Aventine Renewable Energy, LLC
    
    Pekin, IL
    
    CornAventine Renewable Energy, LLC
    
    Aurora, NE
    
    CornBadger State Ethanol, LLC*
    
    Monroe, WI
    
    Corn
    
    
    48.0Big River Resources, LLC*
    
    West Burlington, IA
    
    Corn
    
    
    52.0BioEnergy International
    
    Clearfield, PA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    110.0BioFuel Energy  Buffalo Lake Energy, LLC
    
    Fairmont, MN
    
    Corn
    
    
    115.0BioFuel Energy  Pioneer Trail Energy, LLC
    
    Wood River, NE
    
    Corn
    
    
    115.0Blue Flint Ethanol
    
    Underwood, ND
    
    Corn
    
    
    50.0Bonanza Energy, LLC
    
    Garden City, KS
    
    Corn/milo
    
    
    55.0Bunge-Ergon Vicksburg
    
    Vicksburg, MS
    
    corn
    
    
    54.0Bushmills Ethanol, Inc.*
    
    Atwater, MN
    
    Corn
    
    
    40.0Calgren Renewable Fuels, LLC
    
    Pixley, CA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    55.0Cardinal Ethanol
    
    Union City, IN
    
    Corn
    
    
    100.0Cargill, Inc.
    
    Eddyville, IA
    
    Corn
    
    
    35.0Cargill, Inc.
    
    Blair, NE
    
    Corn
    
    
    85.0Cascade Grain
    
    Clatskanie, OR
    
    Corn
    
    
    108.0Castle Rock Renewable Fuels, LLC
    
    Necedah, WI
    
    Corn
    
    
    50.0Center Ethanol Company
    
    Sauget, IL
    
    Corn
    
    
    54.0Central Indiana Ethanol, LLC
    
    Marion, IN
    
    Corn
    
    
    40.0Central MN Ethanol Coop*
    
    Little Falls, MN
    
    Corn
    
    
    21.5Chief Ethanol
    
    Hastings, NE
    
    Corn
    
    
    62.0Chippewa Valley Ethanol Co.*
    
    Benson, MN
    
    Corn
    
    
    45.0Cilion Ethanol
    
    Keyes, CA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    50.0Clean Burn Fuels, LLC
    
    Raeford, NC
    
    Corn
    
    
    
    
    
    
    
    
    
    
    60.0Commonwealth Agri-Energy, LLC*
    
    Hopkinsville, KY
    
    Corn
    
    
    33.0Corn Plus, LLP*
    
    Winnebago, MN
    
    Corn
    
    
    44.0Corn, LP*
    
    Goldfield, IA
    
    Corn
    
    
    50.0Cornhusker Energy Lexington, LLC
    
    Lexington, NE
    
    Corn
    
    
    40.0Coshocton Ethanol, OH
    
    Coshocton, OH
    
    Corn
    
    
    60.0Dakota Ethanol, LLC*
    
    Wentworth, SD
    
    Corn
    
    
    50.0
  9




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Operating
    
    
    ExpansionCapacity
    
    
    Capacity
    
    
    Under ConstructionCompany
    
    Location
    
    Feedstock
    
    (mgy)
    
    
    (mgy)
    
    
    Capacity (mgy)DENCO, LLC
    
    Morris, MN
    
    Corn
    
    
    21.5Didion Ethanol
    
    Cambria, WI
    
    Corn
    
    
    40.0E Caruso (Goodland Energy Center)
    
    Goodland, KS
    
    Corn
    
    
    
    
    
    
    
    
    
    
    20.0E Energy Adams, LLC
    
    Adams, NE
    
    Corn
    
    
    50.0East Kansas Agri-Energy, LLC*
    
    Garnett, KS
    
    Corn
    
    
    35.0Elkhorn Valley Ethanol, LLC
    
    Norfolk, NE
    
    Corn
    
    
    40.0ESE Alcohol Inc.
    
    Leoti, KS
    
    Seed corn
    
    
    1.5Ethanol Grain Processors, LLC
    
    Obion, TN
    
    Corn
    
    
    100.0Front Range Energy, LLC
    
    Windsor, CO
    
    Corn
    
    
    40.0Glacial Lakes Energy, LLC*
    
    Watertown, SD
    
    Corn
    
    
    100.0Global Ethanol/Midwest Grain Processors
    
    Lakota, IA
    
    Corn
    
    
    95.0Global Ethanol/Midwest Grain Processors
    
    Riga, MI
    
    Corn
    
    
    57.0Golden Cheese Company of California*
    
    Corona, CA
    
    Cheese whey
    
    
    5.0Golden Grain Energy, LLC*
    
    Mason City, IA
    
    Corn
    
    
    110.0
    
    
    
    50.0Golden Triangle Energy, LLC*
    
    Craig, MO
    
    Corn
    
    
    20.0Grain Processing Corp.
    
    Muscatine, IA
    
    Corn
    
    
    20.0Granite Falls Energy, LLC*
    
    Granite Falls, MN
    
    Corn
    
    
    52.0Greater Ohio Ethanol, LLC
    
    Lima, OH
    
    Corn
    
    
    54.0Green Plains Renewable Energy
    
    Shenandoah, IA
    
    Corn
    
    
    50.0Green Plains Renewable Energy
    
    Superior, IA
    
    Corn
    
    
    50.0Hawkeye Renewables, LLC
    
    Fairbank, IA
    
    Corn
    
    
    115.0Hawkeye Renewables, LLC
    
    Iowa Falls, IA
    
    Corn
    
    
    105.0Hawkeye Renewables, LLC
    
    Menlo, IA
    
    Corn
    
    
    110.0Hawkeye Renewables, LLC
    
    Shell Rock, IA
    
    Corn
    
    
    110.0Heartland Corn Products*
    
    Winthrop, MN
    
    Corn
    
    
    100.0Heartland Grain Fuels, LP*
    
    Aberdeen, SD
    
    Corn
    
    
    9.0Heartland Grain Fuels, LP*
    
    Huron, SD
    
    Corn
    
    
    12.0
    
    
    
    18.0Heron Lake BioEnergy, LLC
    
    Heron Lake, MN
    
    Corn
    
    
    50.0Homeland Energy
    
    New Hampton, IA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    100.0Husker Ag, LLC*
    
    Plainview, NE
    
    Corn
    
    
    26.5Idaho Ethanol Processing
    
    Caldwell, ID
    
    Potato Waste
    
    
    4.0Illinois River Energy, LLC
    
    Rochelle, IL
    
    Corn
    
    
    50.0Indiana Bio-Energy
    
    Bluffton, IN
    
    Corn
    
    
    101.0Iroquois Bio-Energy Company, LLC
    
    Rensselaer, IN
    
    corn
    
    
    40.0KAAPA Ethanol, LLC*
    
    Minden, NE
    
    Corn
    
    
    40.0Kansas Ethanol, LLC
    
    Lyons, KS
    
    Corn
    
    
    55.0KL Process Design Group
    
    Upton, WY
    
    Wood waste
    
    
    1.5
  10




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Operating
    
    
    ExpansionCapacity
    
    
    Capacity
    
    
    Under ConstructionCompany
    
    Location
    
    Feedstock
    
    (mgy)
    
    
    (mgy)
    
    
    Capacity (mgy)Land O Lakes*
    
    Melrose, MN
    
    Cheese whey
    
    
    2.6Levelland/Hockley County Ethanol, LLC
    
    Levelland, TX
    
    Corn
    
    
    40.0Lifeline Foods, LLC
    
    St. Joseph, MO
    
    Corn
    
    
    40.0Lincolnland Agri-Energy, LLC*
    
    Palestine, IL
    
    Corn
    
    
    48.0Lincolnway Energy, LLC*
    
    Nevada, IA
    
    Corn
    
    
    50.0Little Sioux Corn Processors, LP*
    
    Marcus, IA
    
    Corn
    
    
    52.0Marquis Energy, LLC
    
    Hennepin, IL
    
    Corn
    
    
    100.0Marysville Ethanol, LLC
    
    Marysville, MI
    
    Corn
    
    
    50.0Merrick & Company
    
    Aurora, CO
    
    Waste beer
    
    
    3.0MGP Ingredients, Inc.
    
    Pekin, IL
    
    Corn/wheat starch
    
    
    78.0MGP Ingredients, Inc.
    
    Atchison, KSMid America Agri Products/Horizon
    
    Cambridge, NE
    
    Corn
    
    
    44.0Mid America Agri Products/Wheatland
    
    Madrid, NE
    
    Corn
    
    
    44.0Mid-Missouri Energy, Inc.*
    
    Malta Bend, MO
    
    Corn
    
    
    45.0Midwest Renewable Energy, LLC
    
    Sutherland, NE
    
    Corn
    
    
    25.0Minnesota Energy*
    
    Buffalo Lake, MN
    
    Corn
    
    
    18.0NEDAK Ethanol
    
    Atkinson, NE
    
    Corn
    
    
    
    
    
    
    
    
    
    
    44.0New Energy Corp.
    
    South Bend, IN
    
    Corn
    
    
    102.0North Country Ethanol, LLC*
    
    Rosholt, SD
    
    Corn
    
    
    20.0Northeast Biofuels
    
    Volney, NY
    
    Corn
    
    
    114.0Northwest Renewable, LLC
    
    Longview, WA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    55.0Otter Tail Ag Enterprises
    
    Fergus Falls, MN
    
    Corn
    
    
    57.5Pacific Ethanol
    
    Madera, CA
    
    Corn
    
    
    40.0Pacific Ethanol
    
    Stockton, CA
    
    Corn
    
    
    60.0Pacific Ethanol
    
    Burley, ID
    
    Corn
    
    
    50.0Pacific Ethanol
    
    Boardman, OR
    
    Corn
    
    
    40.0Panda Ethanol
    
    Hereford, TX
    
    Corn/milo
    
    
    
    
    
    
    
    
    
    
    115.0Parallel Products
    
    Rancho Cucamonga, CAParallel Products
    
    Louisville, KY
    
    Beverage waste
    
    
    5.4Patriot Renewable Fuels, LLC
    
    Annawan, IL
    
    Corn
    
    
    100.0Penford Products
    
    Cedar Rapids, IA
    
    Corn
    
    
    45.0Phoenix Biofuels
    
    Goshen, CA
    
    Corn
    
    
    31.5Pinal Energy, LLC
    
    Maricopa, AZ
    
    Corn
    
    
    55.0Pine Lake Corn Processors, LLC*
    
    Steamboat Rock, IA
    
    Corn
    
    
    20.0Platinum Ethanol, LLC*
    
    Arthur, IA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    110.0Plymouth Ethanol, LLC*
    
    Merrill, IA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    50.0
  11




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Operating
    
    
    ExpansionCapacity
    
    
    Capacity
    
    
    Under ConstructionCompany
    
    Location
    
    Feedstock
    
    (mgy)
    
    
    (mgy)
    
    
    Capacity (mgy)POET Biorefining  Alexandria
    
    Alexandria, IN
    
    Corn
    
    
    68.0POET Biorefining  Ashton
    
    Ashton, IA
    
    Corn
    
    
    56.0POET Biorefining  Big Stone
    
    Big Stone City, SD
    
    Corn
    
    
    79.0POET Biorefining  Bingham Lake
    
    Bingham Lake, MN
    
    
    
    
    35.0POET Biorefining  Caro
    
    Caro, MI
    
    Corn
    
    
    53.0POET Biorefining  Chancellor
    
    Chancellor, SD
    
    Corn
    
    
    110.0POET Biorefining  Coon Rapids
    
    Coon Rapids, IA
    
    Corn
    
    
    52.0POET Biorefining  Corning
    
    Corning, IA
    
    Corn
    
    
    65.0POET Biorefining  Emmetsburg
    
    Emmetsburg, IA
    
    Corn
    
    
    55.0POET Biorefining  Fostoria
    
    Fostoria, OH
    
    Corn
    
    
    68.0POET Biorefining  Glenville
    
    Albert Lea, MN
    
    Corn
    
    
    42.0POET Biorefining  Gowrie
    
    Gowrie, IA
    
    Corn
    
    
    69.0POET Biorefining  Hanlontown
    
    Hanlontown, IA
    
    Corn
    
    
    56.0POET Biorefining  Hudson
    
    Hudson, SD
    
    Corn
    
    
    56.0POET Biorefining  Jewell
    
    Jewell, IA
    
    Corn
    
    
    69.0POET Biorefining  Laddonia
    
    Laddonia, MO
    
    Corn
    
    
    50.0POET Biorefining  Lake Crystal
    
    Lake Crystal, MN
    
    Corn
    
    
    56.0POET Biorefining  Leipsic
    
    Leipsic, OH
    
    Corn
    
    
    68.0POET Biorefining  Macon
    
    Macon, MO
    
    Corn
    
    
    46.0POET Biorefining  Marion
    
    Marion, OH
    
    Corn
    
    
    
    
    
    
    
    
    
    
    65.0POET Biorefining  Mitchell
    
    Mitchell, SD
    
    Corn
    
    
    68.0POET Biorefining  North Manchester
    
    North Manchester, IN
    
    Corn
    
    
    68.0POET Biorefining  Portland
    
    Portland, IN
    
    Corn
    
    
    68.0POET Biorefining  Preston
    
    Preston, MN
    
    Corn
    
    
    46.0POET Biorefining  Scotland
    
    Scotland, SD
    
    Corn
    
    
    11.0POET Biorefining- Groton
    
    Groton, SD
    
    Corn
    
    
    53.0Prairie Horizon Agri-Energy, LLC
    
    Phillipsburg, KS
    
    Corn
    
    
    40.0Quad-County Corn Processors*
    
    Galva, IA
    
    Corn
    
    
    27.0Range Fuels
    
    Soperton, GA
    
    Wood waste
    
    
    
    
    
    
    
    
    
    
    20.0Red Trail Energy, LLC
    
    Richardton, ND
    
    Corn
    
    
    50.0Redfield Energy, LLC *
    
    Redfield, SD
    
    Corn
    
    
    50.0Reeve Agri-Energy
    
    Garden City, KS
    
    Corn/milo
    
    
    12.0Renew Energy
    
    Jefferson Junction, WI
    
    Corn
    
    
    130.0Renova Energy
    
    Torrington, WY
    
    Corn
    
    
    5.0Riverland Biofuels
    
    Canton, IL
    
    corn
    
    
    37.0Show Me Ethanol
    
    Carrollton, MO
    
    Corn
    
    
    55.0
  12




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Operating
    
    
    ExpansionCapacity
    
    
    Capacity
    
    
    Under ConstructionCompany
    
    Location
    
    Feedstock
    
    (mgy)
    
    
    (mgy)
    
    
    Capacity (mgy)Siouxland Energy & Livestock Coop*
    
    Sioux Center, IA
    
    Corn
    
    
    60.0Siouxland Ethanol, LLC
    
    Jackson, NE
    
    Corn
    
    
    50.0Southwest Georgia Ethanol, LLC
    
    Mitchell Co., GA
    
    Corn
    
    
    100.0Southwest Iowa Renewable Energy, LLC *
    
    Council Bluffs, IA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    110.0Sterling Ethanol, LLC
    
    Sterling, CO
    
    Corn
    
    
    42.0Tate & Lyle
    
    Ft. Dodge, IA
    
    Corn
    
    
    
    
    
    
    
    
    
    
    105.0Tate & Lyle
    
    Loudon, TN
    
    Corn
    
    
    67.0
    
    
    
    38.0Tharaldson Ethanol
    
    Casselton, ND
    
    Corn
    
    
    
    
    
    
    
    
    
    
    110.0The Andersons Albion Ethanol LLC
    
    Albion, MI
    
    Corn
    
    
    55.0The Andersons Clymers Ethanol, LLC
    
    Clymers, IN
    
    Corn
    
    
    110.0The Andersons Marathon Ethanol, LLC
    
    Greenville, OH
    
    Corn
    
    
    110.0Trenton Agri Products, LLC
    
    Trenton, NE
    
    Corn
    
    
    40.0United Ethanol
    
    Milton, WI
    
    Corn
    
    
    52.0United WI Grain Producers, LLC*
    
    Friesland, WI
    
    Corn
    
    
    49.0Utica Energy, LLC
    
    Oshkosh, WI
    
    Corn
    
    
    48.0VeraSun Energy Corporation (Total)
    
    
    
    
    
    
    1,310.0
    
    
    
    
    
    
    
    110.0VeraSun Energy Corporation
    
    Albert City, IA
    
    CornVeraSun Energy Corporation
    
    Charles City, IA
    
    CornVeraSun Energy Corporation
    
    Ft. Dodge, IA
    
    CornVeraSun Energy Corporation
    
    Hartley, IA
    
    CornVeraSun Energy Corporation
    
    Linden, IN
    
    CornVeraSun Energy Corporation
    
    Lake Odessa, MI
    
    CornVeraSun Energy Corporation
    
    Welcome, MN
    
    CornVeraSun Energy Corporation
    
    Hankinson, ND
    
    CornVeraSun Energy Corporation
    
    Albion, NE
    
    CornVeraSun Energy Corporation
    
    Central City, NE
    
    CornVeraSun Energy Corporation
    
    Ord, NE
    
    CornVeraSun Energy Corporation
    
    Bloomingburg, OH
    
    CornVeraSun Energy Corporation
    
    Aurora, SD
    
    CornVeraSun Energy Corporation
    
    Marion, SD
    
    Corn
  13




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##### Table of Contents



Operating
    
    
    ExpansionCapacity
    
    
    Capacity
    
    
    Under ConstructionCompany
    
    Location
    
    Feedstock
    
    (mgy)
    
    
    (mgy)
    
    
    Capacity (mgy)Verenium
    
    Jennings, LA
    
    Sugar Cane bagasse
    
    
    1.5Western New York Energy LLC
    
    Shelby, NY
    
    
    
    
    50.0Western Plains Energy, LLC*
    
    Campus, KS
    
    Corn
    
    
    45.0Western Wisconsin Renewable Energy, LLC*
    
    Boyceville, WI
    
    Corn
    
    
    40.0White Energy
    
    Russell, KS
    
    Milo/wheat starch
    
    
    48.0White Energy
    
    Hereford, TX
    
    Corn/Milo
    
    
    100.0White Energy
    
    Plainview, TX
    
    Corn
    
    
    100.0Wind Gap Farms
    
    Baconton, GA
    
    Brewery waste
    
    
    0.4Xethanol BioFuels, LLC
    
    Blairstown, IA
    
    Corn
    
    
    5.0Yuma Ethanol
    
    Yuma, CO
    
    Corn
    
    
    40.0TOTALS
    
    
    
    
    
    
    11,051.4
    
    
    
    656.0
    
    
    
    1,580.0mgy for
    
    mgy for
    
    mgy for180
    
    
    expanding
    
    
    21operating refineries
    
    refineries
    
    
    refineries under construction
 *
    
    locally owned Last updated: November 21, 2008
 Competition from Alternative Fuels
     14




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Distillers Grains Competition
   Sources and Availability of Raw Materials
 Corn Supply
       15




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##### Table of Contents



Utilities
 Natural Gas
 Electricity
 Water
  Research and Development
  Employees
   16




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##### Table of Contents



Dependence on One or a Few Major Customers
  Costs and Effects of Compliance with Environmental Laws
  Alcohol Fuel Producers Permit.
 SPCC and RMP.
  Air Permits.
 Water Permits.
   17




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##### Table of Contents



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 operation.
 Risks Relating to Our Business
 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 prices and generally we will
not be able to pass on increases in input prices to our customers.
  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 revenues will be greatly affected by the price at which we can sell our ethanol and
distillers grains.
  18




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##### Table of Contents



We expect to engage in hedging transactions which involve risks that can harm our business.
 Risks Related to Ethanol Industry
 Overcapacity within the ethanol industry could cause an oversupply of ethanol and a decline in
ethanol prices.
 We expect to operate in a competitive industry and compete with larger, better financed
entities which could impact our ability to operate profitably.
 
 Item 2. DESCRIPTION OF PROPERTY.
  
    
    A process building, which contains processing equipment, laboratories, a control
room and offices;
 
    
    A water treatment building containing equipment for water supply and treatment;
 
    
    A grain receiving and shipping building; and
 
    
    An administrative building, along with furniture and fixtures, office equipment
and computer and telephone systems.
  Item 6  Managements Discussion and Analysis of
Financial Condition and Plan of Operation
  19




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##### Table of Contents



Item 3. LEGAL PROCEEDINGS.
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
   
 PART II
 
 Item 5. MARKET FOR COMMON EQUITY AND RELATED MEMBER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF
EQUITY SECURITIES.
    20




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##### Table of Contents



Number of securitiesremaining availablefor future issuanceNumber of securities to
    
    
    Weighted-average
    
    
    under equitybe issued upon exercise
    
    
    exercise price of
    
    
    compensation plansof outstanding options,
    
    
    outstanding options,
    
    
    (excluding securitieswarrants and rights
    
    
    warrants and rights
    
    
    reflected in column (a))(a)
    
    
    (b)
    
    
    (c)Equity compensation
plans approved by
security holders
    
    
    0
    
    
    
    0
    
    
    
    0Equity compensation
plans not approved
by security holders
    
    
    573
    
    
    $
    1,000
    
    
    
    659Total
    
    
    573
    
    
    $
    1,000
    
    
    
    659
 Item 6  Managements Discussion and Analysis or Plan of
Operations.
 
 Item 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
 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.
  21




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Overview
  Plan of Operations for the Next 12 Months
  Trends and Uncertainties Impacting the Ethanol Industry and Our Company
   Economic
Downturn
  Corn Prices
    22




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##### Table of Contents



Natural Gas
  Ethanol Supply and Demand
   Ethanol Industry Competition
  Ethanol Marketing
   23




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##### Table of Contents



Distillers Grains Marketing
   Derivatives
  Technology Developments
   Government Legislation and Regulations
   24




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##### Table of Contents



Liquidity and Capital Resources
 Financial Results
  Project Capitalization
   Senior Credit Facility
      25




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##### Table of Contents



Subordinated Debt
  Other Notes Payable
  Project Cost
   26




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##### Table of Contents



Critical Accounting Estimates
  Employees
   # Full-TimePosition
    
    PersonnelCEO
    
    
    1Communications Director
    
    
    1General Manager
    
    
    1Director of Grains and Marketing
    
    
    1CFO
    
    
    1Production Supervisors
    
    
    4Superintendent
    
    
    1Engineer
    
    
    1Lab Assist
    
    
    1Maintenance
    
    
    10Plant Technicians
    
    
    26Accounting
    
    
    3Operations Assist
    
    
    1Logistics Manager
    
    
    1TOTAL
    
    
    53
 Off-Balance Sheet Arrangements
   27




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Item 7. FINANCIAL STATEMENTS.
  
     HEIN & ASSOCIATES LLP
 
  28




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY   CONSOLIDATED BALANCE SHEET
 September 30, 2008ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    7,685,978Inventory
    
    
    4,542,099Other current assets
    
    
    1,242,410Total current assets
    
    
    13,470,487PROPERTY AND EQUIPMENT, at costOffice furniture and equipment
    
    
    935,869Land
    
    
    1,005,000Construction in progress
    
    
    156,115,623Less accumulated depreciation
    
    
    (40,208
    )158,016,284RESTRICTED CASH AND CASH EQUIVALENTS
    
    
    2,144,094DEFERRED DEBT FINANCING COSTS, net of amortization
    
    
    5,485,738TOTAL ASSETS
    
    $
    179,116,603LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESRevolving line of credit
    
    $
    11,900,000Current portion of long term debt and capital lease obligation
    
    
    3,239,850Current portion of derivative instruments
    
    
    129,739Accounts payable and accrued expenses
    
    
    12,648,499Accrued interest
    
    
    1,680,318Total current liabilities
    
    
    29,598,406DEFERRED GRANT PROCEEDS
    
    
    50,000DERIVATIVE INSTRUMENTS
    
    
    501,588CAPITAL LEASE OBLIGATIONS
    
    
    126,327LONG-TERM DEBT
    
    
    88,063,418TOTAL
LIABILITIES
    
    
    118,339,739COMMITMENTS AND CONTINGENCIES (Note 3 and 4)MEMBERS EQUITYMembership contributions, 76,610 units issued and outstanding
    
    
    75,042,636Deficit accumulated during the development stage
    
    
    (14,265,772
    )Total members equity
    
    
    60,776,864TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    179,116,603
 See Notes to Consolidated Financial Statements.
  29




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY   CONSOLIDATED STATEMENTS OF OPERATIONS
 For the period fromYear ending
    
    
    Year ending
    
    
    March 9, 2005 (inception)September 30, 2008
    
    
    September 30, 2007
    
    
    through September 30, 2008Revenues
    
    $
    
    
    
    $
    
    
    
    $
    Operating expensesOrganizational expenses
    
    
    
    
    
    
    
    
    
    
    25,145Start-up expenses
    
    
    
    
    
    
    740,000
    
    
    
    979,966General and administrative expenses
    
    
    5,068,196
    
    
    
    2,077,528
    
    
    
    7,559,472Total
    
    
    5,068,196
    
    
    
    2,817,528
    
    
    
    8,564,583Operating loss
    
    
    (5,068,196
    )
    
    
    (2,817,528
    )
    
    
    (8,564,583
    )Other income (expense)Other income
    
    
    426,611
    
    
    
    
    
    
    
    442,611Unrealized loss on derivative instrument
    
    
    (631,327
    )
    
    
    
    
    
    
    (631,327
    )Interest expense
    
    
    (5,556,156
    )
    
    
    (6,801,987
    )
    
    
    (12,358,143
    )Interest income
    
    
    545,878
    
    
    
    6,066,135
    
    
    
    6,845,670(5,214,994
    )
    
    
    (735,852
    )
    
    
    (5,701,189
    )Net loss
    
    $
    (10,283,190
    )
    
    $
    (3,553,380
    )
    
    $
    (14,265,772
    )Net loss per unit (Basic and Diluted)
    
    $
    (134.23
    )
    
    $
    (56.87
    )
    
    $
    (384.37
    )Weighted average units outstanding
    
    
    76,610
    
    
    
    62,484
    
    
    
    39,908
 See Notes to Consolidated Financial Statements.
  30




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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
    
    
    $
    71,022,758Unit-based compensation expense for unit options to employees
    
    
    
    
    
    
    37,296Net loss for the year ending September 30, 2008
    
    
    
    
    
    
    (10,283,190
    )Members equity at September 30, 2008
    
    
    76,610
    
    
    $
    60,776,864
 See Notes to Consolidated Financial Statements.
  31




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY   CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the period fromYear ending
    
    
    Year ending
    
    
    March 9, 2005 (inception)September 30, 2008
    
    
    September 30, 2007
    
    
    through September 30, 2008CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (10,283,190
    )
    
    $
    (3,553,380
    )
    
    $
    (14,265,772
    )Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:Contribution of services
    
    
    
    
    
    
    
    
    
    
    9,000Depreciation expense
    
    
    34,368
    
    
    
    6,835
    
    
    
    44,079Amortization of prepaid interest expense and deferred financing costs
    
    
    3,413,306
    
    
    
    879,779
    
    
    
    4,293,085Non-cash compensation expense
    
    
    37,296
    
    
    
    42,491
    
    
    
    79,787Unrealized losses on derivative instruments
    
    
    631,327
    
    
    
    
    
    
    
    631,327Changes in assets and liabilities:Increase in inventory
    
    
    (4,542,099
    )
    
    
    
    
    
    
    (Increase) decrease in accrued interest receivable
    
    
    245,774
    
    
    
    (2,310,861
    )
    
    
    (2,289,519
    )(Increase) in other assets
    
    
    (830,751
    )
    
    
    (560,980
    )
    
    
    (1,391,730
    )Increase (decrease) in accounts payable and
accrued expenses
    
    
    11,857,025
    
    
    
    660,218
    
    
    
    12,648,499Increase in accrued interest
    
    
    1,260,873
    
    
    
    1,631,242
    
    
    
    2,892,115Increase in deferred grant proceeds
    
    
    
    
    
    
    
    
    
    
    50,000Net cash provided by (used in) operating activities
    
    
    1,823,929
    
    
    
    (3,204,656
    )
    
    
    2,700,871CASH FLOWS FROM INVESTING ACTIVITIESPurchase of certificates of deposit
    
    
    (200,000
    )Purchase of property and equipment
    
    
    (91,650,508
    )
    
    
    (57,932,393
    )
    
    
    (149,757,234
    )Net cash used in investing activities
    
    
    (91,850,508
    )
    
    
    (57,932,393
    )
    
    
    (149,757,234
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of members equity
    
    
    
    
    
    
    74,012,000
    
    
    
    75,212,000Proceeds from issuance of notes payable
    
    
    81,011,368
    
    
    
    
    
    
    
    81,011,368Repayment of long-term debt and capital lease obligations
    
    
    (8,973
    )
    
    
    Proceeds from revolving line of credit
    
    
    11,900,000
    
    
    
    Release (funding) of restricted cash balance
    
    
    7,022,799
    
    
    
    (7,671,150
    )
    
    
    (648,351
    )Expenditures for debt financing and equity offering costs
    
    
    (5,880,068
    )
    
    
    (1,841,118
    )
    
    
    (7,981,604
    )Net cash provided by financing activities
    
    
    94,045,126
    
    
    
    64,499,732
    
    
    
    147,593,413Increase (decrease) in cash and cash equivalents
    
    
    4,018,547
    
    
    
    3,362,683
    
    
    
    537,050Cash and cash equivalents, beginning of period
    
    
    3,667,431
    
    
    
    304,748
    
    
    
    Cash and cash equivalents, end of period
    
    $
    7,685,978
    
    
    $
    3,667,431
    
    
    $
    537,050Supplemental cash flow informationCash paid for interest
    
    $
    4,980,004
    
    
    $
    5,170,745
    
    
    $
    10,150,749Non-cash investing and financing activitiesEquipment financed through notes payable and capital lease obligations
    
    $
    427,200
    
    
    $
    
    
    
    $
    427,200Contribution of services from Directors
    
    $
    
    
    
    $
    
    
    
    $
    9,000Proceeds from notes payable received by Bond Trustee
    
    $
    
    
    
    $
    92,500,000
    
    
    $
    92,500,000Repayment of notes payable paid by Bond Trustee
    
    $
    82,500,000
    
    
    $
    
    
    
    $
    82,500,000
 See Notes to Consolidated Financial Statements.
  32




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Nature of Business
   Basis of Presentation
  Principles of consolidation
  Use of Estimates
  Revenue Recognition
  Cash and Cash Equivalents
  Inventories
  Deferred Debt Financing Costs
   33




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
 Property and Equipment
   Grant Proceeds
  Organization and Start-up Costs
  Income Taxes
  Fair Value of Financial Instruments
  Investment in Commodities Contracts, Derivative Instruments and Hedging Activities
   34




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##### Table of Contents



FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
    Net Income or Loss per Membership Unit
  Recently Issued Accounting Pronouncements
   Business Combinations
  35




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##### Table of Contents



FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
 Noncontrolling Interests in Consolidated Financial
Statementsan amendment of Accounting Research Bulletin No. 51
  NOTE 2. MEMBERSHIP EQUITY
     NOTE 3. COMMITMENTS AND CONTINGENCIES
 Development Stage Operations and Liquidity
   36




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
 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
  Agreement with Director
   37




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
 Agreements with Officers
    Interest Rate Swap
  Air Liquide Litigation
  Purchase Commitments
    38




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
       39




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##### Table of Contents



FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
 NOTE 4. RELATED PARTIES
   NOTE 5. UNIT OPTION PLAN
 Share-Based Payments.
    2008
    
    
    2007Expected volatility
    
    
    66
    %
    
    
    66
    %Expected dividends
    
    
    
    
    
    
    Expected term (in years)
    
    
    6
    
    
    
    6Risk-free rate
    
    
    3.97
    %
    
    
    5.12
    %
  40




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##### Table of Contents



FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
  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
    
    
    $
    Granted
    
    
    382
    
    
    
    1,000
    
    
    
    10
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (766
    )
    
    
    1,000
    
    
    
    
    
    
    
    Outstanding at September 30, 2008
    
    
    573
    
    
    
    1,000
    
    
    
    9.25
    
    
    
    Exercisable at September 30, 2008
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  NOTE 6. LEASES
  2008De Lage Landen Financial services, 60 months,
interest rate of 7.5%.
    
    $
    153,747Less current portion
    
    
    (27,420
    )$
    126,327
  41




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
  Year ending September 30:2009
    
    $
    38,0212010
    
    
    38,0212011
    
    
    38,0212012
    
    
    38,0212013
    
    
    31,684Total minimum lease payments
    
    
    183,768Amounts representing interest
    
    
    (30,021
    )Present value of net minimum
lease payments
    
    $
    153,747
 NOTE 7. DEBT FINANCING ARRANGEMENTS
 Southwest Georgia Farm Credit Arrangement  Senior Debt
    West LB Construction Loan, variable interest rates from 6.54% to 7.75%, described below
    
    $
    81,011,368Subordinated debt facility, interest rate of 7.5%, described below
    
    
    10,000,000Notes payable John Deere Credit, interest rate of 5.3%, described below
    
    
    264,48091,275,848Less current portion
    
    
    (3,212,430
    )$
    88,063,418
  42




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
  Year ending September 30:2009
    
    $
    3,212,4302010
    
    
    6,665,8062011
    
    
    6,704,3662012
    
    
    6,596,8782013
    
    
    6,570,000Thereafter
    
    
    61,526,368Total
    
    $
    91,275,848
 West LB Credit Arrangement  Senior Debt
        43




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FIRST UNITED ETHANOL, LLC AND SUBSIDIARY
  Subordinated Debt
  Other notes payable
   44




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Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 Item 8A(T). CONTROLS AND PROCEDURES.
 Disclosure Controls and
Procedures Management of First
United Ethanol is responsible for maintaining disclosure controls and
procedures that are designed to ensure that information required to be
disclosed in the reports that the Company files or submits under the Securities
Exchange Act of 1934 (the “Exchange Act”) is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms. In addition, the disclosure
controls and procedures must ensure that such information is accumulated and
communicated to the Company’s management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required financial and other required disclosures. Our management,
including our Chief Executive Officer, Murray Campbell, along with our Chief
Financial Officer, Larry Kamp, have reviewed and evaluated the effectiveness of
our disclosure controls and procedures (as defined in Rule 13a – 15(e)
under the Exchange Act of 1934, as amended) as of September 30, 2008.
Based upon this review and evaluation, these officers have concluded that our
disclosure controls and procedures are 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 principal
executive and principal financial officers, or person performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure. Management’s Annual
Report on Internal Control over Financial Reporting Our management is
responsible for establishing and maintaining adequate internal control over our
financial reporting. Internal control over financial reporting is a process
designed to provide reasonable assurance to our management and board of
directors regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. generally
accepted accounting principles. Our internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance
of records that in reasonable detail accurately and fairly reflect our
transactions; (ii) provide reasonable assurance that transactions are
recorded as necessary for preparation of our financial statements;
(iii) provide reasonable assurance that receipts and expenditures of
company assets are made in accordance with management authorization; and
(iv) provide reasonable assurance that unauthorized acquisition, use or
disposition of company assets that could have a material effect on our
financial statements would be prevented or detected on a timely basis. Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because changes in conditions may occur or the degree of compliance with the
policies or procedures may deteriorate. Management assessed
the effectiveness of our internal control over financial reporting as of
September 30, 2008. This assessment is based on the criteria for effective
internal control described in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this assessment, our management concluded that, as of
September 30, 2008, our internal control over financial reporting is
effective based on those criteria. As of our fiscal
year ended September 30, 2007, management had identified a material
weakness in our internal controls related to the design or operation of our
disclosure controls and procedures and our internal controls over financial
reporting. Our management worked with our Audit Committee to identify and
implement corrective actions where required to improve our internal controls,
including the enhancement of our reporting systems and procedures.
Specifically, we have implemented a more sophisticated accounting software
system to track our financial activities and we have dedicated personnel to
operate the system. In addition, we have developed reconciliation procedures
for financial transactions and our accounting systems and we are presenting the
information generated from these reconciliations to our board of directors on a monthly
basis. We have hired additional personnel qualified in the areas of accounting
and financial management to assist our Chief Financial Officer. As of our
fiscal year ended September 30, 2008, we believe these actions have
remediated the material weakness by focusing additional attention and resources
in our internal accounting functions. This annual report
does not include an attestation report of the company’s registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the company’s
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the company to provide only
management’s report in this annual report. Except as noted
above, there were no changes in our internal control over financial reporting
that occurred during the period covered by this quarterly report that have
materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting. 
 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
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ITEM 10. EXECUTIVE COMPENSATION
  
 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER
MATTERS
  
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 13. EXHIBITS
  Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing10.51
    
    
    Termination of Employment Agreement with Anthony Flagg dated January 22, 2008
    
    
    110.52
    
    
    Employment Agreement with Murray L. Campbell dated March 21, 2008
    
    
    210.53
    
    
    Design Build Agreement with C. Terry Hunt Industries, Inc. d/b/a Advanced
Vessel and Alloy dated February 20, 2008
    
    
    310.54
    
    
    First Amendment to Design Build Agreement with C. Terry Hunt Industries, Inc.
d/b/a Advanced Vessel and Alloy dated March 26, 2008
    
    
    310.55
    
    
    Carbon Dioxide Supply Agreement with Airgas Carbonic, Inc. dated June 27, 2008
    
    
    410.56
    
    
    Amended and Restated Non-Qualified Membership Unit Option Agreement with
Larry Kamp dated August 7, 2008
    
    
    510.57
    
    
    Paving Agreement with The Scruggs Company dated August 19, 2008
    
    
    631.1
    
    
    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 31, 2008.(2)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on March 26, 2008.(3)
    
    Incorporated by reference to Exhibit 99.1 and Exhibit 99.2 in Form 8-K filed on April 1,
2008.(4)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on July 9, 2008.(5)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on August 12, 2008.(6)
    
    Incorporated by reference to Exhibit 99.1 in Form 8-K filed on August 26, 2008.(*)
    
    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.  46




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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
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SIGNATURES
  FIRST UNITED ETHANOL, LLCDate: December 22, 2008
    
    /s/ Murray CampbellMurray Campbell
Chief Executive Officer and DirectorDate: December 22, 2008
    
    /s/ Lawrence KampLawrence Kamp
Chief Financial Officer
  Date: December 22, 2008
    
    /s/ Murray CampbellMurray CampbellChief Executive Officer and DirectorDate: December 22, 2008
    
    /s/ Lawrence KampLawrence KampChief Financial OfficerDate: December 22, 2008
    
    /s/ Miley AdamsMiley Adams, DirectorDate: December 22, 2008
    
    /s/ Steve CollinsSteve Collins, Treasurer and DirectorDate: December 22, 2008
    
    /s/ Bryant CampbellBryant Campbell, Secretary and DirectorDate: December 22, 2008
    
    /s/ Donald ShirahDonald Shirah, DirectorDate: December 22, 2008
    
    /s/ Tommy HilliardTommy Hilliard, Vice Chairman and DirectorDate: December 22, 2008
    
    /s/ John B. JohnsonJohn B. Johnson, DirectorDate: December 22, 2008
    
    /s/ Thomas H. Dollar, IIThomas H. Dollar, II, Chairman and DirectorDate: December 22, 2008
    
    /s/ Robert L. Holden, Sr.Robert L. Holden, Sr., DirectorDate: December 22, 2008
    
    /s/ Kenneth Jack HunnicuttKenneth Jack Hunnicutt, Director
  48




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EXHIBIT INDEX
 ExhibitNo.
    
    Description31.1
    
    
    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
  49