UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB


                     Annual report pursuant to section 13 or
                  15(d) of the Securities Exchange Act of 1934.


                  For the fiscal year ended December 31, 2003.
                                            ------------------

                        Commission file number: 333-74982
                                                ---------


                          WESTERN PLAINS ENERGY, L.L.C.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Kansas                                          48-1247506
---------------------------------                   ---------------------------
(State or other jurisdiction                        (I.R.S. Identification No.)
of incorporation or organization)


    3022 County Road 18, Oakley, KS                                     67748
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(Address of principle executive offices)                             (Zip Code)


                                 (785) 672-8810
                ------------------------------------------------
                (Issuer's telephone number, including area code)


         Securities registered under Section 12 (b) of the Exchange Act:
                                      None

         Securities registered under Section 12 (g) of the Exchange Act:
                                      None

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. [X]Yes  [ ]No

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB [ X ].

State issuer's revenues for its most recent fiscal year: None

                      DOCUMENTS INCORPORATED BY REFERENCE:

The Definitive  Information  Statement of the Company dated February 17, 2004 is
incorporated by reference into Part III of this report.

Transitional Small Business Disclosure Format:   [  ] Yes  [ X ] No


<PAGE>

                                TABLE OF CONTENTS


PART I....................................................................     1

   ITEM 1.  DESCRIPTION OF BUSINESS.......................................     1
   ITEM 2.  DESCRIPTION OF PROPERTY.......................................     9
   ITEM 3.  LEGAL PROCEEDINGS.............................................    10
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........    10

PART II...................................................................    10

   ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS......    10
   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.....    11
   ITEM 7.  FINANCIAL STATEMENTS..........................................    20
   ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE.......................    21
   ITEM 8A.  CONTROLS AND PROCEDURES......................................    21

PART III..................................................................    22

   ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE
                EXCHANGE ACT..............................................    22
   ITEM 10.  EXECUTIVE COMPENSATION.......................................    22
   ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT AND RELATED STOCKHOLDER MATTERS................    22
   ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............    22
   ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.............................    23
   ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.......................    23

SIGNATURES................................................................    24

PART F/S..................................................................   F-1

                                       ii
<PAGE>



                             Additional Information

     Descriptions  in this report are  qualified by reference to the contents of
any  contract,  agreement  or  other  document  described  herein  and  are  not
necessarily  complete.  Reference  is made to each such  contract,  agreement or
document filed as an exhibit to this report, or incorporated herein by reference
as permitted by  regulations of the  Securities  and Exchange  Commission.  (See
"Item 13. Exhibits and Reports on Form 8-K.")

                Special Note Regarding Forward-Looking Statements

     Please see the note under "Item 6.  Managements  Discussion and Analysis or
Plan of Operation," for a description of special factors  potentially  affecting
forward-looking statements included in this report.

                                       iii
<PAGE>

                                     PART I

Item 1.   Description of Business

History and Organization

     Western Plains Energy,  L.L.C.  ("we" or "Company") is a limited  liability
company  organized  under the laws of the State of Kansas on July 10,  2001.  We
completed  our  initial  public  offering on March 26, 2003 and have been filing
reports  periodically with the United States Securities and Exchange  Commission
("SEC") since that date. We currently have  approximately 550 members.  There is
presently no trading market for our membership  units, and it is not anticipated
that one will develop in the future.

     Our Company was  organized to finance,  develop,  construct  and operate an
ethanol production plant. To that end, we commenced construction of our plant in
May 2003 and commenced production of fuel grade ethanol in January 2004.

Ethanol Production

     Our ethanol plant,  located 6 miles east of Oakley,  Kansas,  produces fuel
grade  ethanol  by  processing  corn  and  milo.(1)  The  grain is  received  by
semitrailer truck, weighed and cleaned of rocks and debris before it is conveyed
to one of two concrete  storage silos. The grain is then transported to a hammer
mill or grinder  where it is ground into flour and  conveyed  into a slurry tank
for processing.  We add water, heat and enzymes to break the ground grain into a
mash. The mash is heat sterilized and pumped into a tank where other enzymes are
added to convert the starches into glucose sugars. Next, the mash is pumped into
one of three  fermenters,  where  yeast is added to begin a 48 to 50 hour  batch
fermentation  process.  A  distillation  process  vaporizes the alcohol from the
mash.  The alcohol is further  dried in a rectifier  and  molecular  sieve.  The
resulting 200 proof-alcohol is then pumped to shift tanks and blended to achieve
a mixture  consisting  of 95%  gasoline  and 5%  ethanol,  as it is pumped  into
denatured ethanol storage tanks.

     Grain mash exiting the  distillation  process is pumped into one of several
centrifuges. Water from the centrifuges, called thin stillage, in condensed into
a thicker syrup called condensed  solubles.  The solids that exit the centrifuge
are called  distiller's wet grains.  These wet grains are subsequently dried and
mixed with condensed solubles to produce distiller's grains with solubles, which
may be used as animal feed. (See "Our Products and Their Markets," below.)

--------
(1)  Our  activities  during  2003  were  limited  to  organizational   efforts,
     completing our financing and constructing our plant.  Production of ethanol
     did not commence until early 2004.

                                        1
<PAGE>


Our Products and their Markets

     Ethanol

     Ethanol is ethyl alcohol,  which has many industrial uses. At our plant, we
produce ethanol to be used as a fuel component that serves as:

     o    An octane enhancer in fuels;

     o    An oxygenated  fuel additive that can reduce carbon  monoxide  vehicle
          emissions; and

     o    A non-petroleum-based gasoline extender.

     Ethanol in its  primary  form is mostly  used for  blending  with  unleaded
gasoline and other fuel products.  The  implementation  of the Federal Clean Air
Act has made ethanol fuels an important domestic  renewable fuel additive.  Used
as a fuel oxygenate,  ethanol provides a means to reduce carbon monoxide vehicle
emissions.  The  principal  purchasers  of ethanol are generally the refined and
wholesale  gasoline  marketer  or  blender.  The  principal  end markets for our
ethanol are expected to be petroleum terminals in Wichita,  Denver, Kansas City,
St. Louis and the west coast of the United  States.  We expect a majority of our
revenue for 2004 and in the future will be derived from the sale of ethanol.

     Our plant was  constructed  to  produce a name  plate  value of 30  million
gallons of ethanol per year. Since we only recently commenced production, we are
unable to predict with any degree of certainty  whether  that  capacity  will be
reached in 2004.  As of the date of filing this report,  our plant was producing
ethanol at capacity.

     Distiller's Grains

     A principal  by-product of the ethanol  production  process is  distiller's
grains, a high-protein, high-energy animal feed supplement primarily marketed to
the dairy and beef  industry.  Our plant uses a dry mill ethanol  process with a
dryer  system that  allows  production  of two  moisture  levels of  distiller's
grains:  distiller's  wet grains and distiller's  dried grains.  Distiller's wet
grains  are   processed   grain  mash  and   condensed   solubles  that  contain
approximately 65% moisture.  It has a shelf life slightly longer than three days
and is often sold to nearby markets.  Distiller's dried grains are mash that has
been dried to 10% moisture.  It has an almost  indefinite  shelf life and may be
sold and shipped via truck or railcar to any market  regardless  of its vicinity
to our ethanol  plant.  We expect  that a minority of our revenue  from 2004 and
beyond will be derived from the sale of distiller's grains.

Customers

     We essentially  sell all of our products to two marketing  firms,  which in
turn sell to other purchasers. We have executed an exclusive marketing agreement
with Ethanol Products LLC ("Ethanol Products") of Wichita,  Kansas to market the
ethanol produced at our plant. The agreement is effective for an initial term of
five years beginning January 2004 and is automatically  renewable for subsequent

                                        2
<PAGE>


five-year terms unless  terminated by either party prior to expiration.  Ethanol
Products  has agreed to  purchase  all of the  ethanol  that is  produced at our
plant. Ethanol Products will be solely responsible for determining the price and
terms at which the ethanol  acquired  from our plant will be sold and to whom it
will be sold.  In the event  that our  relationship  with  Ethanol  Products  is
interrupted  for any reason,  we believe that we would be able to locate another
entity to market  our  ethanol.  However,  any  interruption  could  temporarily
disrupt the sale of our principal product and adversely effect our operations.

     We also have executed an exclusive  agreement with ICM  Marketing,  Inc. to
market all of the  distiller's  grains  produced  at our  plant.  The rights and
obligations of ICM under that agreement were subsequently assigned to United Bio
Energy, LLC ("UBE"), an affiliate of ICM. The initial term of the agreement with
UBE is three years  expiring  October 1, 2004 and will  automatically  renew for
additional  one-year  terms  unless  terminated  by us or UBE  following 90 days
advance written notice. As with the marketing arrangement with Ethanol Products,
any  interruption  in our  relationship  with UBE could  temporarily  affect our
business,  although we believe that we could find  another  entity to market our
grains. For additional  information about the financial terms of our arrangement
with both Ethanol  Products and UBE, see "Item 6.  Management's  Discussion  and
Analysis or Plan of Operation."

Subsidies and Supports

Federal Ethanol Supports

     Ethanol sales have been favorably  affected by the Clean Air Act Amendments
of 1990,  particularly  the  Federal  Oxygen  Program,  which  became  effective
November 1, 1992.  The Federal  Oxygen  Program  requires the sale of oxygenated
motor  fuels  during the fall and winter  months in certain  major  metropolitan
areas to reduce carbon monoxide pollution. Ethanol use also has increased due to
a second Clean Air Act program, the Reformulated  Gasoline Program. This program
became effective January 1, 1995, and requires the sale of reformulated gasoline
in  certain  major  urban  areas to  reduce  pollutants,  including  those  that
contribute to ground level ozone, better known as smog.

     The use of  ethanol  as an  oxygenate  to blend  with fuel to  comply  with
federal  mandates also has been aided by federal tax policy.  The Energy Tax Act
of 1978 exempted ethanol blended gasoline from the federal gas tax as a means of
stimulating  the development of a domestic  ethanol  industry and mitigating the
United  State's  dependence  on foreign oil. As amended,  the federal tax credit
currently  allows  the market  price of  ethanol  to  compete  with the price of
domestic gasoline.  Although the federal tax credit is not directly available to
us, it allows us to sell our ethanol at prices that are  competitive  with other
less  expensive  additives and gasoline.  The credit for an ethanol blend is the
equivalent of providing a per gallon "equalization" payment that allows blenders
to pay more for ethanol  than the  wholesale  price of gasoline and still retain
the same profit margins. Under current legislation,  the federal gasoline tax is
$0.184 per gallon and the tax on gasoline  blended with 10% ethanol is $0.13 per
gallon,  providing a $0.054 difference.  Smaller credits of $0.0408 and $0.0302,
are available for gasoline blended with 7.7% and 5.7% ethanol, respectively. The
federal tax on a gallon of 10% ethanol blended gasoline will gradually  increase
to $.133 by 2005,  dropping the  difference  to $.051 per gallon.  By 2007,  the
federal tax credit for ethanol blended gasoline will expire, and it is scheduled
to be taxed at the standard federal gasoline tax rate.

                                        3
<PAGE>

     Fuel grade  ethanol  prices  traditionally  have varied  directly  with the
wholesale  price of  gasoline.  However,  in some  states,  fuel  grade  ethanol
typically sells for a higher price per gallon than wholesale gasoline because of
the  aforementioned  excise tax  incentives.  Historically,  fuel grade  ethanol
prices also have  reflected a premium due to the oxygenate and octane  enhancing
properties of this motor fuel additive.

     During the year  2005,  we may be  eligible  to  participate  in the United
States  Department  of  Agriculture  Commodity  Credit  Corporation's  Bioenergy
Program.  The  purpose of the program is to  encourage  increased  purchases  of
eligible  commodities  for the purpose of expanding the production of commercial
fuel grade ethanol and commercial  biodiesel and support new production capacity
for such  bioenergy.  Under the program,  we may be  reimbursed  for part of our
costs of  eligible  commodities  used for the  purpose of  producing  fuel grade
ethanol.  In order to be eligible for the  program,  the general rule is that we
must apply to the Commodity Credit Corporation during the 30 day sign-up period,
which  begins on August 1, 2004 for the 2005 fiscal year.  In addition,  we must
provide certain required documentation to the Commodity Credit Corporation.  The
Commodity  Credit  Corporation  then uses  conversion  factors  to  convert  the
eligible  bioenergy  products into units of the commodity on which  payments are
made. A payment  limitation  currently  exists and restricts the amount of funds
any single  producer  may obtain  annually  under the program to 5% of available
funding. For fiscal year 2003, each producer was limited to receive $7.5 million
in funding.  It is uncertain what the  reimbursement cap will be for fiscal year
2005.

State Ethanol Supports

     In  addition  to  federal  incentives,  the  State of  Kansas  provides  an
incentive  production  payment to ethanol  producers.  The production  incentive
available to Kansas  ethanol  producers that commence  production  after July 1,
2001 and sell at least 5 million gallons,  consists of a direct payment of $.075
per gallon for up to 15  million  gallons  per year.  Accordingly,  the  maximum
amount a Kansas ethanol producer can currently  receive in a year is $1,125,000.
These incentive  payments are available for the first seven years of production.
The available  statewide funding for these incentive  payments is $1,500,000 per
year for 2002-2004 and $3,500,000 per year for 2005-2011 plus any excess balance
carried over from the prior year's current production account.  Any shortfall in
the available funds will result in a pro rata decrease in the incentives paid to
the individual  ethanol  producers.  Because the number of ethanol producers who
will qualify for the  incentives  is not known,  we cannot  predict  whether the
funds designated will be sufficient to fully fund the program in the future.

     We are unable to predict what effect, if any,  expiration or termination of
federal and state  subsidies  will have on the market or price for the  ethanol.
However, either event may adversely affect our business.

                                        4
<PAGE>


Corn and Milo Procurement

     While we  expect  to have a ready and  consistent  source of grain,  we may
enter into hedging  transactions in an effort to stabilize the price that we pay
for such grain.  Hedging involves  purchasing futures contracts for the delivery
of grain.

     We expect that the location of our plant in Gove County, Kansas, will allow
us  accessibility  to corn and milo at necessary  levels.  We expect to purchase
approximately  11 million bushels of corn and milo to produce 30 million gallons
of ethanol during 2004. According to the Kansas Agricultural Statistics Service,
in 2002, approximately 40 million bushels of corn and over 11 million bushels of
milo were produced in the northwest and west central  portions of Kansas,  where
our plant is located.  These  production  levels were  significantly  lower than
prior years due to the drought conditions in western Kansas in 2002. In addition
to its  proximity to Kansas  grain,  the plant is located only 60 miles from the
Nebraska state border and 75 miles from the Colorado state border, and we expect
to purchase some of our corn and milo from producers in these areas.

     We  anticipate  that our Class A members  will  choose to enter  into grain
delivery agreements with us. However, if necessary, we plan to purchase grain on
the open market,  directly from local farmers, grain brokers and grain elevators
in order to meet our grain needs.  We do not  anticipate  that the prices on the
open market will be  materially  different  than the price we will likely pay to
our Class A members.

     All of the corn and milo we  purchase  will be  tested  and must  meet high
quality control standards to ensure the efficient operation and quality products
of our plant. We will use the United States  Department of  Agriculture's  grade
requirements  for U.S. Number Two Corn and U.S.  Number Two Grain Sorghum.  From
time to time, we may also decide to accept grain that does not meet the criteria
for U.S.  Number  Two Corn or U.S.  Number  Two Grain  Sorghum  or is  otherwise
substandard.  If we do, we will  discount the price or make other  allowances to
account for the lesser grade quality or condition at delivery.

     Drought and other  environmental  occurrences  could  adversely  effect the
production and  availability of corn, milo and other grain products.  Because of
its relative  aridity,  the western United States is more susceptible to drought
than certain other areas of the country.  The drought experienced in the western
United States during 2002 was partially  mitigated  during 2003, but there is no
assurance that the  conditions  during 2002 will not repeat.  In that event,  we
anticipate  that our grain  requirements  could be satisfied from other parts of
the country,  although  transportation costs would be significantly  higher. Any
increase in the cost of the grain or  transportation  expenses  would  adversely
effect our business.

Other Raw Materials

     The other critical raw materials in the production of ethanol are water and
natural gas. Water is mixed with the processed  grain to begin the  fermentation
process.  Natural gas is used to heat the resulting  mixture in conjunction with
the fermentation process.

                                        5
<PAGE>

     An adequate  supply of water is important to our ethanol  business.  Toward
that end, we entered into an agreement that granted us the right to obtain water
from, and construct a well on, property located approximately two miles north of
our plant site.  The agreement also granted us an easement for a water line from
the well site to our  plant.  We  drilled  the well in June of 2003,  which will
supply  about  85% of our  water  requirements.  We  have  paid  $15,000  to the
landowners  under this  agreement  for the easement  and right to construct  the
well.  In  addition,  we will pay a pumping  fee of $350 per month for 15 years,
contingent  on our actually  pumping  water.  The fee will be  renegotiated  for
subsequent years. The initial term of our pumping agreement is for a twenty-year
period and will  automatically  renew for  successive  five-year  periods unless
terminated  by us with 60 days written  notice.

     We have  constructed  a waterline  from the well site to our plant site. As
part of our land exchange agreement for the plant site, we received the right to
install a  waterline  in the parcel of land  between the well site and the plant
site and have done so.

     We will obtain the additional  water that we need from the existing well on
our plant site. Management believes that we have sufficient water to operate our
plant.  We  intend to apply  for all  necessary  permits  and  believe  that we
currently  are  operating  in  compliance  with all  regulations  of the  Kansas
Department of Agriculture, Division of Water Resources.

     We also have acquired the water appropriation  rights for two wells located
on the land we purchased  one and a half miles east of our proposed  plant site.
We will need to apply to the Kansas Department of Agriculture, Division of Water
Resources to change the type of water use from  agricultural  use to  industrial
use if we need to utilize these wells. We only anticipate using water from these
two wells if we expand our plant capacity.

     In order to be assured of a steady source of natural gas, we entered into a
Natural Gas Service Agreement with Midwest Energy, Inc. ("Midwest") in September
2003. This agreement  supplements a previous agreement with Kinder Morgan Energy
Partners and Kinder Morgan Interstate Gas Transmission LLC to deliver the gas to
Midwest.  In  exchange  for our  agreement  not to  bypass  Midwest's  local gas
distribution  system,  it agreed to install and maintain a gas main  directly to
our property in Gove County, Kansas. We pay a monthly charge based on the amount
of gas utilized each month.  The rates are fixed through  December 31, 2008, and
are subject to change  thereafter based on increases or decreases  applicable to
distribution  services generally and subject to review by the Kansas Corporation
Commission. Our contract with Midwest extends through December 31, 2013.

     We also contract with Post Rock Gas, LLC ("PRG") to acquire the gas that is
transported  by Kinder  Morgan and Midwest to our plant.  The contract  with PRG
extends to December 2004. Thereafter, the price will be renegotiated. We believe
our agreements  with PRG, Kinder Morgan and Midwest will provide an ample supply
of natural gas for the foreseeable future.

                                        6
<PAGE>

Transportation and Delivery

     The grain that we receive is delivered by trucks.  Due to our  proximity to
Interstate 70, transportation to and from the plant is efficient.

     Our products  will be shipped to market by  semitrucks  and railroad  cars.
Ethanol is shipped to market via tanker  truck and  railroad,  depending  on the
relative  cost of the two modes of  delivery.  Tanker  trucks are  utilized  for
relatively shorter distances,  while railroad tankers are more cost effective in
shipping liquids over long distances.  To accommodate rail delivery,  a railroad
siding was installed in  conjunction  with  construction  of our plant.  Ethanol
Products,  our exclusive  ethanol  marketer,  will make all decisions  regarding
shipment and delivery of our ethanol.

     Distiller's  grains are transported  exclusively by semitruck.  UBE, as our
exclusive purchaser of distiller's grains, will select the carrier.

Competition

     We are in direct competition with numerous other ethanol producers, many of
which have greater resources than we do. We also expect that additional  ethanol
producers will enter the market if the demand for ethanol continues to increase.
Our ethanol plant  competes  with other ethanol  producers on the basis of price
and, to a lesser extent,  delivery service.  We believe we can compete favorably
with  other  ethanol  producers  due to our  proximity  to  ample  corn and milo
supplies at favorable prices.

     The ethanol  industry has grown to 72  production  facilities in the United
States.  Industry  authorities  estimate  that these  facilities  are capable of
producing  over 3 billion  gallons  of ethanol  per year.  The  largest  ethanol
producers  include  Archer Daniels  Midland,  Cargill,  Midwest Grain,  Williams
Energy Service, New Energy Corporation and High Plains Corporation, all of which
are capable of producing  more  ethanol than we expect to produce.  In addition,
there are several regional  farmer-owned  entities  recently  formed,  or in the
process of formation, of a similar size and with similar resources to ours. Most
ethanol plants also produce distiller's grains.

     In addition, new plants are under construction and plans to expand existing
plants have been announced, which would increase the ethanol production capacity
of our  competitors.  We are  unable to  determine  the  number  and  production
capacity  of plants  that  ultimately  may be  constructed,  the  timing of such
construction or the effect of resulting  production upon the demand or price for
our ethanol.

     We may also have to  compete  with  international  ethanol  producers  from
countries  such as Brazil,  who may have lower  production  costs and comparable
transportation costs to coastal markets.

                                        7
<PAGE>



     We also compete with  producers of methyl  tertiary  butyl ether  (commonly
referred as "MTBE"),  a petrochemical  derived from methanol which costs less to
produce than ethanol.  MTBE is a commonly used oxygenate in fuels for compliance
with Federal Clean Air Act mandates,  and is a major competitor of ethanol. Many
major oil  companies  produce MTBE,  and strongly  support its use because it is
petroleum based.  These companies have significant  resources to market MTBE and
to influence  legislation  and public  perception of MTBE.  These companies also
have sufficient  resources to begin  production of ethanol should they choose to
do so.

     Alternative fuels,  gasoline  oxygenates and ethanol production methods are
continually  under  development  by ethanol and oil  companies  with far greater
resources  than we have.  Development  of new  products  and  methods of ethanol
production by larger and financially more viable  competitors could provide them
with  significant  competitive  advantages  over  us and  thus  could  harm  our
business.

Regulation

     The  construction of our plant required  various state and local permits to
comply  with  existing   governmental   regulations   designed  to  protect  the
environment  and worker  safety.  While we are also  subject to  regulations  on
emissions of the United States Environmental  Protection Agency ("EPA"), current
EPA rules do not require us to obtain any  permits or  approvals  in  connection
with the construction and operation of our business.  However, state and federal
rules can and do change,  and such changes  could  result in greater  regulatory
burdens on us.

     Our ethanol  production  will  require us to emit a  significant  amount of
carbon dioxide into the air.  Current  Kansas law regulating  emissions does not
restrict or prevent us from emitting  carbon  dioxide gas into the air, but this
could  change in the  future.  We could  also be  subject  to  environmental  or
nuisance claims from adjacent  property owners or residents in the area based on
foul smells or other air or water discharges from the plant.

     We obtained  what we believe are all the necessary air and water permits to
operate  our  plant  before  we  commenced  operations,  including  a permit  to
discharge wastewater from our plant. Under normal conditions, our plant utilizes
a closed system and will not  discharge  process  wastewater,  but we obtained a
permit to discharge  wastewater in case of emergency  failure of our  wastewater
treatment  equipment.  We also obtained a permit to discharge  water used in our
cooling tower and boiler.

     In addition to the foregoing  regulations  affecting air and water quality,
we are subject to regulation for our fuel storage tanks. If we are found to have
violated  federal,  state or local  environmental  regulations in the future, we
could incur liability for clean-up  costs,  damage claims from third parties and
civil or criminal penalties that could adversely affect our business.

                                        8
<PAGE>


Employees

     As of the date of filing this report, we have 29 full-time employees. These
include the Chief Executive  Officer/General  Manager,  a production  manager to
oversee plant operations and production,  a commodities manager to oversee grain
acquisition and risk management, a safety director, a lab manager, a maintenance
manager, an office manager and an administrative assistant. The remainder of our
employees include administrative, operational and maintenance support personnel.
None of our employees are the subject of collective  bargaining by labor unions,
and we believe that we enjoy excellent relations with our employees.

     From time to time,  we also retain the services of outside  consultants  to
supplement the services  provided by our employees.  These include  engineering,
construction,  legal,  accounting and financial advisors. We believe that we can
obtain the services of all personnel necessary to operate our business.

Item 2. Description of Property

     We currently  have an interest in 190 acres of real  property.  We acquired
53.5  acres of  partially  developed  land in Gove  County  for the  purpose  of
constructing  our  plant.  However,  in October  2003,  we  completed  a taxable
industrial  revenue  bond  financing  with Gove County that will provide us with
property tax savings on our plant site. As part of the  financing,  title to our
plant site and all of our  facilities  have been  transferred  to Gove County as
security  for the  repayment  of the bonds.  We are leasing back the site for an
amount that is equal to the amount of the principal and interest that is payable
on the  bonds.  The term of the  lease is 30 years or as long as the  bonds  are
outstanding.  Since we are presently the owner of all the bonds,  we have waived
the payment of rent through March 1, 2004.  Also,  under the terms of the lease,
we can repurchase the site for a nominal amount upon repayment of the bonds.

     During the year ended  December  31,  2003,  we spent  approximately  $32.5
million  (less  retainage)  on the  construction  of our plant,  acquisition  of
machinery  and  equipment  and  capital   improvements   necessary  to  commence
operation.  Our facilities include an ethanol production plant, piping, blending
and storage tanks for the ethanol,  storage for the raw grain,  truck scales and
an administrative services building. We believe that our plant has been designed
and constructed  with the latest  available  technologies and should not require
significant  renovation or improvement in the foreseeable  future.  However,  we
will evaluate our  operations in the future and make additions or renovations as
necessary.  We believe our plant and  facilities  are  adequately  insured in an
amount sufficient to compensate for any unanticipated loss.

     We also own  approximately 137 acres of land located one and one-half miles
east of the 53 acres on  which  our  plant is  located.  When we  acquired  this
property,  we also acquired water appropriation  rights for two wells located on
the property.  We will need to apply to the Kansas  Department  of  Agriculture,
Division of Water  Resources  to change the type of water use from  agricultural
irrigation  use to  industrial  use if we need to utilize  these wells.  We only
anticipate using water from these wells if we expand our plant capacity. We have
agreed to lease the  property  back to one of the  sellers  for a period of five
years with the amount of rent based on the  portion of the land that is dry land
acres  and the  portion  that is  irrigated  acres,  with the  seller  expressly
recognizing that the water available for irrigation may be dramatically reduced,
and possibly  eliminated,  if we use the water from this property in our ethanol
plant operations.

                                        9

<PAGE>


     All of our property  serves as the  collateral  for our debt financing with
AgCountry Farm Credit  Services,  FLCA,  which is described below under "Item 6.
Management's Discussion and Analysis or Plan of Operation."

Item 3.  Legal Proceedings

     From time to time we may be subject to litigation that is incidental to our
business. However, we are not currently a party to any pending legal proceedings
that are not routine litigation incidental to our business.

Item 4.  Submission of Matters to a Vote of Security Holders

     We did not submit any matter to a vote of our security  holders through the
solicitation of proxies or otherwise during the fourth quarter of the 2003 year.
Our annual meeting of members is scheduled for March 27, 2004.

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

     There is no public trading  market for our capital units.  Article 4 of our
Third  Amended  and  Restated  Operating  Agreement  provides a number of strict
restrictions regarding the transfer of capital units by our members. In essence,
any proposed transfer must be approved by our Board of Managers.

     In addition to the  restrictions  on transfer  contained  in our  operating
agreement,  we are also subject to limitations  imposed by the Internal  Revenue
Code ("Code").  In order to maintain our status as a partnership  for income tax
purposes,  we must not be  treated  as a  "publicly  traded  partnership"  under
relevant  provisions of the Code.  Generally,  the Code provides that a publicly
traded partnership will be taxed as a corporation. In order to comply with these
rules,  we do not intend to list any of our capital units on a stock exchange or
apply for quotations in any electronic trading system. Accordingly,  transfer of
capital units will generally be limited to the following:

     o    Gifts;

     o    Transfers by reason of death;

     o    Transfers between members of a family; and

     o    "Block" transfers.

                                       10
<PAGE>

     A block  transfer  is a transfer  by a member and any  related  person,  as
defined in the Code, of membership interests  representing in the aggregate more
than 2% of the total  interest  in  company  capital  or  profits in one or more
transactions during any 30 calendar day period.

     As of March 1, 2004, there were 2,286 Class A capital units,  1,744 Class B
capital  units and 50 Class C  capital  units  outstanding,  owned by a total of
approximately 550 members.

     Under the terms of our Third Amended and Restated Operating  Agreement,  we
are required to make an annual  distribution  to our members of a minimum of 20%
of the net cash we earn from operations, as defined in the Agreement, as long as
net cash  from  operations  exceeds  $500,000  for that  year.  However,  we are
prohibited  from  making any  distributions  if it would  violate or cause us to
default  under  any  of the  terms  of any of  our  credit  facilities  or  debt
instruments.

Item 6.  Management's Discussion and Analysis or Plan of Operation

     The following  discussion  highlights our liquidity and capital position at
December 31, 2003, compares our financial condition at year end 2003 to year end
2002 and describes our plan of operations for the coming year.  Through December
31, 2003,  we were  considered a development  stage  enterprise  for  accounting
purposes,  and did not report any revenue from operations.  Reference is made to
the financial  statements appearing elsewhere in this report in conjunction with
this discussion.

Plan of Operation

     We completed construction of our plant sufficient to commence operations in
January 2004.(2) We utilized the proceeds from our initial public  offering,  as
well as proceeds  of certain  debt  financing,  to finance  construction  of the
facility, acquisition of our initial inventory of grain, chemicals and other raw
materials  and  to  cover  our  operating   costs  until  we  begin   collecting
receivables.  The contract for  construction  of our plant  requires  payment of
approximately  $35.5 million,  as described therein. As of December 31, 2003, we
had been billed  approximately $32.5 million, 90% of which has been paid and the
remaining  10% is held as  retainage  pursuant  to the  terms  of the  contract.
Remaining  construction is relatively  minimal,  primarily  consisting of "punch
list" items. (See "Liquidity and Capital Resources," below.)

     During the first week of March 2004,  immediately  preceding preparation of
this  report,  our plant was  operating  at  capacity,  producing  approximately
580,000  gallons of ethanol per week, or 30 million  gallons on an annual basis.
Since we have no operating  history,  there is no assurance  that the plant will
continue to operate at capacity through 2004.

--------
2 While the plant is presently  operational,  minor additional work is necessary
to complete construction to our satisfaction.

                                       11
<PAGE>


     Pursuant to our marketing agreement with Ethanol Products,  we expect to be
paid weekly for all ethanol  invoiced by it between 13 and 19 days prior to that
date,  which has been paid by our customers.  These payments will consist of the
gross sales  receipts for all ethanol  sold during that time,  less the costs of
transportation  and storage and an  administrative  fee of $.01 per gallon to be
paid  to  Ethanol  Products.  We  bear  the  risk  of any  uncollected  accounts
receivable.

     We believe that the demand for ethanol might be higher in the late fall and
winter  months  because  of air  quality  regulations  imposed  by  the  federal
government,  and  concurrently  lower in the spring and summer  months  when the
restrictions are not in effect. These restrictions require the use of oxygenated
fuels, such as those containing ethanol,  during these fall and winter months to
help reduce air pollution in certain  metropolitan areas. This might allow us to
command higher prices for our ethanol during the winter months and require us to
accept  lower  prices in the others.  However,  because of our lack of operating
history, we cannot predict with any degree of certainty whether that will be the
case.  However,  we do not believe that any increased  demand for ethanol during
these  months or  reduced  demand  during  the  summer  months  will  affect our
production, since we are a relatively small producer.

     UBE will pay us 98% of the selling price, less applicable freight,  for all
distiller's   grains  produced  by  our  plant.   Upon  receipt  of  appropriate
documentation from us, UBE also will pay an additional .5% of the selling price,
less applicable  freight, on all products sold to our Class A members subject to
a distiller's grains purchase agreement. Pursuant to the terms of our agreement,
UBE will be  responsible  for  invoicing  all  sales,  receiving  payments  from
customers and paying  freight when  necessary.  All accounts  receivable  losses
arising from the sales of distiller's grains will be the sole  responsibility of
UBE, unless such losses are related to the substandard  quality of products that
we have provided.

     Cash  flow  from the sale of  ethanol,  together  with  our  other  capital
resources,  will be used to pay operating  expenses of the plant and service our
debt. Of our anticipated operating expenses, we expect that our most significant
expenses  will  include  inventory  (acquisition  of raw  grain),  energy  costs
(primarily natural gas) and employee salaries and benefits. We intend to rely on
the proceeds from our debt financing to pay these  expenses,  pending receipt of
sufficient cash flow.

     Debt  Financing.
     ----------------
     To assist  in  financing  construction  of our  plant  and  acquisition  of
necessary  machinery  and  equipment,  we entered into a credit  agreement  with
AgCountry Farm Credit Services, FLCA ("AgCountry") on July 29, 2003. Pursuant to
that  agreement,   we  established  a  maximum  $22  million   multiple  advance
construction  loan  facility  that will be converted  either to a term loan or a
revolving credit facility when  construction of our plant is complete.  Pursuant
to the terms of the agreement,  AgCountry agreed to loan us the lesser of 55% of
the cost of constructing  our plant or $22 million.  As of December 31, 2003, we
had borrowed  approximately  $11.2 million and had remaining available under the
agreement  approximately $8 million. Much of the amount remaining under the loan
was drawn down subsequent to year-end to finance the completion of the plant and
commencement of operations.

                                       12
<PAGE>

     During the  construction  period,  we are obligated to pay monthly interest
based on the average daily balance of the loan during the related monthly period
at an annual  floating  interest  rate equal to LIBOR plus 4%. The loan  expires
August 1, 2004,  by which time it must either be repaid or  converted  to a term
loan pursuant to the terms of the agreement.

     Within 60 days of  completion  of our plant,  and upon  delivery of certain
documents to AgCountry,  the  construction  loan will convert to a term loan. We
will be  required  to repay  the term  loan in 40  quarterly  payments  equal to
one-fortieth of the original principal amount of the loan plus accrued interest.
We have the option to select from  varying  interest  calculations,  including a
variable rate, a multi-year adjustable rate or a fixed rate, each equal to LIBOR
plus 4%.

     After the  construction  loan has been  converted  to a term loan and until
April 1, 2014, we may elect to convert  between $1 million and $5 million of the
principal  amount  of the term  loan  into a  revolving  loan.  Interest  on the
revolving loan will be payable monthly based on the average daily balance of the
loan during the applicable  month at an annual  floating  interest rate equal to
LIBOR plus 4%. In  addition,  we must pay at least 10% of the  principal  amount
converted  to the  revolving  loan  by  each  anniversary  of  the  construction
completion date for our plant.  Each payment will permanently  reduce the amount
we may borrow under the revolving credit facility.  The term loan and any amount
converted to the revolving  credit facility are due and payable in full on April
1, 2014.

     In addition to other payments due under the credit  agreement,  we must pay
AgCountry  25% of our free cash flow (as that term is defined in the  agreement)
each quarter,  not to exceed $2 million in any fiscal year. We may prepay any of
our borrowings under the agreement at any time.

     Our repayment  obligations under the credit agreement are secured by all of
our tangible and intangible real and personal property.  In addition,  the bonds
acquired from Gove County,  described  below,  have been pledged to AgCountry to
secure  our  borrowing.  As part of the credit  agreement,  we agreed to certain
affirmative,  negative and financial  covenants,  which  potentially  effect our
operations, including, but not limited to, the following:

     o    We must provide AgCountry with audited annual and unaudited  quarterly
          financial statements,  annual budgetary and business plan information,
          notice of changes in  construction  costs in excess of $1  million,  a
          revised construction schedule under certain conditions and a notice of
          the occurrence of an event of default and other material events.

     o    We must  permit  AgCountry  representatives  to visit and  inspect our
          properties,  conduct audits of the  collateral,  examine our books and
          records and review documents related to construction of our plant.

     o    With certain  exceptions,  we may not incur  additional  indebtedness,
          allow our real or personal properties to be used as collateral for any
          other obligations or make any other investments of any kind.

                                       13
<PAGE>

     o    We  may  not  make  distributions  to  our  members  except  for  such
          distributions  payable in our  membership  interests or  distributions
          that do not exceed 40% of the  excess of our net income  over  amounts
          payable to AgCountry under the credit agreement.

     o    We must maintain certain financial ratios, beginning at various times,
          including a fixed charge  coverage  ratio,  leverage ratio and current
          ratio and we must meet  minimum  net worth  requirements.  We also may
          not, after  completion of construction of the plant,  make any capital
          expenditures  in excess of  $400,000  during any fiscal  year  without
          AgCountry's prior written approval.

     After payment of operating  expenses,  debt service and any reserves deemed
necessary and  appropriate by our management,  distributions  may be made to the
members. Pursuant to the terms of our operating agreement,  distributions of any
available cash, as defined  therein,  will be made not less than annually with a
minimum of 20% to be distributed to members so long as net cash from  operations
exceeds $500,000,  and so long as such proposed distribution does not violate or
cause the Company to default  under the terms of our credit  facilities  or debt
instruments.

     Bond  Financing.
     ----------------
     In an  effort  to  reduce  our  property  taxes,  we  completed  a  taxable
industrial  revenue bond  financing in October  2003.  The  transaction  did not
actually  provide us any cash,  but has the potential to reduce or eliminate our
property tax for the next 10 years.  We essentially  exchanged our plant and the
underlying  real estate for a maximum of $32 million of taxable  bonds issued by
Gove County, Kansas. As of December 31, 2003, approximately $18.6 million of the
bonds had been issued.  Additional amounts may be issued subsequent to year-end,
upon  completion  of the plant and  submission  of  additional  paperwork to the
issuer. We presently own all the bonds,  subject to a lien in favor of AgCountry
to secure  our debt,  but have the  option to resell  the bonds  with the Bank's
approval.

     The  bonds  have an  initial  term of 30  years,  mature  in 2033  and bear
interest  at a fixed  rate of 3.5%  per  annum.  Under  the  terms  of the  bond
indenture,  we have the right to convert the interest to a variable rate,  which
we would do only if we decided to resell the bonds to a third party. Interest is
payable on March 1 and September 1 of each year, but since we own the bonds,  we
have waived the payment of interest through March 1, 2004.  Notwithstanding  the
30-year term, we expect that the bonds will be  surrendered in 10 years when the
property tax credit expires.

     Government  Grants.
     -------------------
     We also may receive grant money from state or federal  government  programs
designed to  stimulate  production  of  environmentally  friendly  fuels such as
ethanol.  Any of these grant funds would be used to supplement our cash flow and
debt financing in order to offset operating expenses and debt service. The State
of Kansas provides direct payments of up to $.075 per gallon of ethanol produced
during the first year and $.05 thereafter, up to a maximum of 15 million gallons
in any  year.  Since the  amount  of funds  available  for this  program  is not
presently  known,  it is  impossible  to  predict  whether  and how much we will
receive from the program.  However, we intend to make application and pursue any
incentives that are available.

                                       14
<PAGE>

Liquidity and Capital Resources

     At December 31, 2003, our current  liabilities  exceeded our current assets
by almost $16 million.  However, our current liabilities are comprised primarily
of two items, each of which has been or will be satisfied by the proceeds of the
debt financing discussed above.  Amounts payable to our construction  contractor
and included in current  liabilities  have been paid subsequent to year-end from
the  construction  loan  discussed  above.  The amount  payable to AgCountry and
presently classified as a current liability will be reclassified as long term in
2004 if the loan is converted to a term loan and/or  revolving  credit facility,
which we expect to occur sometime before August 2004.  Excluding amounts payable
to our  construction  contractor  and  pursuant  to the  credit  agreement  with
AgCountry,  our working  capital at  December  31,  2003  totaled  approximately
$545,000.  With amounts remaining available under our construction and revolving
credit  facility,  together  with  cash on hand,  we  believe  we have  adequate
liquidity and sufficient working capital for 2004.

     We have relied entirely on equity  contributions and debt financing for our
cash  flow  since  the  inception  of  our  business.  During  2003,  we  raised
approximately $19.5 million from the sale of our membership interests, all but a
small  portion of which was received in our initial  public  offering.  From our
public offering, we received  approximately $10.6 million from the sale of Class
A capital units and approximately  $8.7 million from the sale of Class B capital
units,  all  of  which  was  used  to  construct  our  plan.  We  also  borrowed
approximately $11.2 million under the construction facility discussed above.

     We  anticipate  converting a portion of the  construction  commitment  with
AgCountry to a revolving credit facility to aid in cash flow during 2004. Due to
our status as a new company with no operating history,  we are unable to predict
our cash flow  with any  degree  of  certainty  during  the  coming  12  months.
Accordingly,  we expect to rely on the revolving  credit  facility to supplement
cash from operations  where necessary.  Even assuming  operation of our plant at
maximum  capacity during the coming year, we expect to experience  negative cash
flow, taking into account our operating expenses and debt service.  However,  we
expect the  available  borrowing  under our  revolving  credit  facility will be
sufficient to meet those cash needs.

     Financing costs  associated with debt financing and capital  formation were
significant  during 2003.  Costs incurred in connection  with our initial public
offering  totaled almost $205,000.  We paid an additional  $202,000 of financing
fees and $362,000 in loan  origination  fees  associated  with our debt and bond
financing. While our credit agreement with Agcountry requires payment of certain
administrative  fees on an ongoing basis, we do not expect to incur  significant
additional financing fees during 2004.

                                       15
<PAGE>


2003 Expenses

     Our expenses  during 2003  totaled  approximately  $830,000,  a majority of
which were  general  and  administrative  expenses.  Offsetting  that amount was
approximately $298,000 of other income,  resulting in a net loss of $532,031 for
the year.  This  compares to a net loss of $305,021  for 2002.  As with 2003,  a
majority of our expenses in 2002 were general and administrative expenses. Since
inception, we have accumulated a net loss of $990,422.

     Significant  general  and  administrative  expenses  during  2003  included
professional and consulting fees of $209,600,  salaries and benefits of $78,609,
legal fees of $51,916 and insurance  expenses of $108,598.  The professional and
consulting  fees were  paid to  companies  that  assisted  in our  organization,
development and start-up. In addition to general and administrative expenses, we
incurred  approximately  $122,000 in production testing expenses associated with
starting our ethanol plant.

     Total other income of  approximately  $298,000 for 2003  included  interest
expense of approximately  $63,000,  interest income of $125,517 and grant income
of $223,473.

     We expect our expenses to increase dramatically during 2004 concurrent with
commencement of operation of our plant.  Offsetting those greater  expenses,  we
expect revenue from the sale of our products.

Critical Accounting Policies and Estimates

     Preparation of our financial statements  necessarily requires estimates and
judgments  to be made that affect the amounts of assets,  liabilities,  revenues
and expenses  reported.  Such decisions include the selection of the appropriate
accounting  principles  to be  applied  and the  assumptions  on  which  to base
accounting estimates. Our management continually evaluates these estimates based
on assumptions it believes to be reasonable under the circumstances.

     The  difficulty in applying  these  policies  arises from the  assumptions,
estimates  and  judgments  that must be made  currently  about  matters that are
inherently uncertain, such as future economic conditions,  operating results and
valuations,  as well as management intentions. As the uncertainty increases, the
level of precision decreases, meaning that actual results can, and probably will
be, different from those currently estimated.

     Of the  significant  accounting  policies  described  in the  notes  to the
financial statements,  we believe that the following may involve a higher degree
of estimates, judgments and complexity:


                                       16
<PAGE>



Allocation of Costs Between Organizational, Operating and Offering Costs

     During our start-up and development, legal, consulting and other costs were
and will be incurred relating to organizational costs, operating costs and costs
related to the  offering  of our capital  units.  As part of our  procedures  to
determine the  allocation of these costs to the  appropriate  category,  we must
establish the definition of  organizational,  operating and offering costs,  and
apply  the  facts  and  circumstances  surrounding  each  cost  incurred  to the
applicable  definition.  As part of this process,  we make judgments about costs
incurred,  and, in turn, how those costs are allocated to the  applicable  area.
Since the criteria  related to the definition of these costs is  subjective,  if
different  assumptions  were used to define the above costs, the amounts charged
to  operations  or as an  offering  cost  could be  different  than the  amounts
reported.  However,  management  does not believe the  likelihood  of materially
different  results  would occur if different  assumptions  were applied to these
allocations.

Classification of Assets and Liabilities

     Our  assets  are  classified  as  current  or  long-term  in our  financial
statements  based on our estimates of the time frames  related to the conversion
of these assets compared to other operating assets or cash, or  reclassification
of the asset to  another  classification  based on the  definition  of the asset
during our operating cycle.

     Long-term  assets  are  evaluated  for usage  during the  ensuing  12-month
period, and management makes estimates  regarding the conversion of the asset to
a current asset or to another  long-term  asset.  Our long-term  assets  include
prepaid  engineering  costs that will be included  in the cost of the  completed
plant.  Contract  deposits and land options are  convertible to other  long-term
assets upon their exercise  based on  management's  intentions  related to these
contracts.  In the event management's  assumptions and expectations  change with
regard to the intended use or usefulness of the rights and privileges related to
these contracts, these amounts may be forfeited and become an expense for us.

     Based  on   management's   current  plan  of  operation,   we  believe  the
classification  of these assets is reasonable  based on current  conditions  and
circumstances.  However,  if the conditions and  circumstances  related to these
assets are not achieved,  the impact of these  adjustments would have a material
effect on the  amounts  recorded  as  assets,  members'  equity  and  results of
operations.

Commitments and Contingencies

     Contingencies,  by their  nature,  relate  to  uncertainties  that  require
management  to  exercise  judgment  both  in  assessing  the  likelihood  that a
liability  has  been  incurred,  as  well as in  estimating  the  amount  of the
potential expense. In conformity with accounting  principles  generally accepted
in the United States,  we accrue an expense when it is probable that a liability
has been incurred and the amount can be reasonably estimated.

                                       17
<PAGE>


Long-Lived Assets

     Depreciation and amortization of our property,  plant and equipment will be
provided on the  straight-line  method by charges to  operations  at rates based
upon the  expected  useful  lives of  individual  or groups of assets  placed in
service.   Economic  circumstances  or  other  factors  may  cause  management's
estimates  of  expected  useful  lives to differ from the actual  useful  lives.
Differences  between  estimated lives and actual lives may be  significant,  but
management does not expect events that occur during the normal  operation of our
plant related to estimated useful lives to have a significant  effect on results
of operations.

     Long-lived assets, including property, plant and equipment and investments,
are evaluated for  impairment on the basis of  undiscounted  cash flows whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.  An impaired asset is written down to its estimated fair
market value based on the best information  available.  Considerable  management
judgment is necessary  to estimate  future cash flows and may differ from actual
cash flows.  Management does not expect an impairment of assets will exist based
on their  assessment of the risks and rewards  related to the ownership of these
assets and the expected cash flows generated from the operation of the plant.

Forward-Looking Statements

     This Form 10-KSB  contains or  incorporates  by reference  "forward-looking
statements,"  as that  term  is  used in  federal  securities  laws,  about  our
financial  condition,  results of  operations  and  business.  These  statements
include, among others:

          - statements  concerning  the benefits that we expect will result from
     our business  activities and certain  transactions  that we have completed,
     such as increased  revenues,  decreased  expenses and avoided  expenses and
     expenditures; and

          -  statements  of  our   expectations,   beliefs,   future  plans  and
     strategies,  anticipated  developments  and  other  matters  that  are  not
     historical facts.

     These  statements  may  be  made  expressly  in  this  document  or  may be
incorporated by reference to other documents that we will file with the SEC. You
can find many of these  statements  by  looking  for words  such as  "believes,"
"expects," "anticipates," "estimates" or similar expressions used in this report
or incorporated by reference in this report.

     These forward-looking statements are subject to numerous assumptions, risks
and uncertainties  that may cause our actual results to be materially  different
from any future results expressed or implied by us in those statements.  Because
the statements are subject to risks and uncertainties, actual results may differ
materially  from those  expressed  or  implied.  We caution you not to put undue
reliance on these  statements,  which speak only as of the date of this  report.
Further,  the information  contained in this document or incorporated  herein by
reference is a statement of our present intention, is based on present facts and
assumptions  and may change at any time and without  notice  based on changes in
such facts or assumptions.

                                       18
<PAGE>


     A  few  of  the   uncertainties   that  could   affect  the   accuracy   of
forward-looking  statements,  besides the  specific  "Risk  Factors"  identified
below, include:

     a. The state of the United States economy and how it affects the desire for
automobile travel;

     b. The relative price of gasoline and other competing fuels;

     c. Changes in government regulations for air and water quality or subsidies
for production of ethanol;

     d. Technological advances in the process for producing ethanol; and

     e. Drought and other environmental conditions.

Risk Factors

     We may encounter  defective material and workmanship in the construction of
our plant,  which could negatively  impact our business.  Under the terms of the
design/build  agreement  pursuant  to  which  our  plant  was  constructed,  the
contractor  warranted  for  one-year  all defects in material  and  workmanship.
However,  any defects in material or workmanship  may cause  interruption in the
production of ethanol.  Such interruption,  in turn, may have a material adverse
effect on our financial performance and financial condition.

     Higher than anticipated operating costs could reduce our profitability.  In
addition  to general  market  fluctuations  and  economic  conditions,  we could
experience  significant cost increases  associated with the ongoing operation of
the plant caused by a variety of factors,  many of which are beyond our control.
These cost increases  could arise from  inadequate  supplies and resulting price
increases  for  grain  and/or  natural  gas.  Labor  costs  also  can  increase,
particularly if there is any shortage of labor or persons with skills  necessary
to operate the plant. We believe our operations will be particularly susceptible
to fluctuations in the price of corn and milo, since acquisition of grain is the
largest  component of our projected  operating  costs.  A small  increase in the
price of grain could dramatically affect our operating results due to the volume
of corn and milo that we will  require  for annual  operation  of our plant.  To
guard  against  that  potential,  we may  engage in hedging  activities  to help
stabilize  the  price of grain,  but there is no  assurance  that  hedging  will
prevent the adverse effects of an increase in grain prices.

     Low gasoline  prices could reduce  profitability.  The price of ethanol has
some relation to the price for gasoline.  The price of ethanol tends to increase
as the price of gasoline increases,  and the price for ethanol tends to decrease
as the price of gasoline decreases.  Any lowering of gasoline prices will likely
also lead to lower  prices  for  ethanol  and  adversely  effect  our  operating
results.

                                       19
<PAGE>



     Increases  in the  production  of ethanol  could  result in lower prices of
ethanol and have other adverse  effects.  We expect that many  existing  ethanol
plants will  construct  additions  to  increase  their  production  and that new
fuel-grade  ethanol  plants will be  constructed  as well. We cannot provide any
assurance or guarantee that there will be any material or significant  increases
for the demand for ethanol,  so the increased  production of ethanol may lead to
lower  prices.  The  increased  production  of ethanol  could have other adverse
effects  as well.  For  example,  the  increased  production  also  will lead to
increased  supplies of  co-products,  such as grain  solubles.  Those  increased
supplies  could in turn lead to lower prices for these  co-products.  Also,  the
increased  production of ethanol  could result in increased  demand for corn and
milo  which,  in turn,  could in turn lead to higher  prices  for these  grains,
resulting in higher costs for production and lower profits.

     Hedging transactions involve risks that could harm our profitability. In an
attempt to  minimize  the  effects of the  volatility  of corn and milo costs on
operating  profits,  we will  likely  take  hedging  positions  in corn and milo
futures  markets.  Hedging means  protecting  the price at which we buy corn and
milo and the price at which we sell our  products in the future.  It is a way to
attempt to reduce the risk caused by price  fluctuation.  The  effectiveness  of
such hedging  activities is dependent upon, among other things, the cost of corn
and milo and our  ability  to sell  sufficient  amounts  of  ethanol  and  grain
solubles to utilize all of the grain subject to futures  contracts.  Although we
will attempt to link hedging  activities to sales plans and pricing  activities,
such hedging activities can themselves result in cost because price movements in
grain  contracts are highly  volatile and  influenced by many factors beyond our
control.  Losses  related  to  hedging  activity  could be  high,  since a small
movement  in the price of grain or other  commodities  can be  magnified  in the
futures markets.

     The  technology  that we use to  produce  ethanol  may become  obsolete  if
current  research  efforts to produce ethanol from  cellulose-based  biomass are
successful.  Although  ethanol also can be produced  from milo,  most ethanol is
currently  produced from corn,  especially in the midwest.  The current trend in
ethanol  production  research  is to develop an  efficient  method of  producing
ethanol from cellulose-based biomass such as agricultural waste, forest residue,
municipal  solid waste and energy  crops.  This trend is driven by the fact that
cellulose-based  biomass is generally  cheaper than corn and  producing  ethanol
from biomass  would create  opportunities  to produce  ethanol in areas that are
unable to grow corn. Although current technology is sufficiently efficient to be
competitive,   the  federal   government   anticipates   these  new   conversion
technologies  will become viable ethanol  production  methods in the future.  If
these  competing  technologies  are  developed,  we may not be  able to  compete
effectively. We do not believe it will be cost effective to convert our existing
plant to a plant that will use cellulose-based biomass to produce ethanol.

Item 7.  Financial Statements

     Reference is made to the Index of Financial  Statements  following Part III
of this Report for a listing of the  Company's  financial  statements  and notes
thereto.

                                       20
<PAGE>



Item 8.  Changes  in  and  Disagreements  With  Accountants  on  Accounting  and
         Financial Disclosure

     On October 15, 2003, our Board of Managers dismissed Eide Bailly LLP ("Eide
Bailly") as our independent public accountants.

     The audit reports of Eide Bailly on our financial  statements  for the year
ended  December  31, 2002 and for the period from July 10, 2001  (inception)  to
December 31, 2001 did not contain any adverse  opinion or disclaimer of opinion,
nor were they qualified or modified as to uncertainty, audit scope or accounting
principles.

     During the year ended  December 31, 2002, for the period from July 10, 2001
(inception)  to December 31, 2001 and from  January 1, 2003 through  October 15,
2003, there were no  disagreements  with Eide Bailly on any matter of accounting
principle or practice,  financial  statement  disclosure,  or auditing  scope or
procedure  which,  if not  resolved to Eide  Bailly's  satisfaction,  would have
caused Eide Bailly to make reference to the subject matter of such  disagreement
in connection  with Eide Bailly's  report on our financial  statements  for such
year and period.

     Eide Bailly's  letters to our Board of Managers  dated January 24, 2002 and
January 14, 2003,  respectively,  advised that, in Eide Bailly's judgment, there
were reportable conditions related to our internal controls. Our Audit Committee
has discussed these matters with Eide Bailly, and, in response, we have recently
employed additional  bookkeeping staff, which began working on or about November
3, 2003, and intends to implement additional appropriate internal controls.

     On October 15, 2003, our Board of Managers engaged Stark Winter Schenkein &
Co.,  LLP to audit our  balance  sheet as of  December  31,  2003,  and  related
statements of operations, changes in members' equity and cash flows for the year
then ended.

Item 8A.  Controls and Procedures

     We  maintain  a system of  controls  and  procedures  designed  to  provide
reasonable assurance as to the reliability of the financial statements and other
disclosures  included  in this  report.  As of  December  31,  2003,  under  the
supervision and with the  participation of our Chief Executive Officer and Chief
Financial Officer,  management has evaluated the effectiveness of the design and
operation of our disclosure  controls and procedures.  Based on that evaluation,
the Chief Executive  Officer and the Chief Financial  Officer concluded that our
disclosure controls and procedures were effective in timely alerting them to the
requirements  to be included in our periodic filing with the SEC. No significant
changes were made to internal controls or other factors that could significantly
affect those controls subsequent to the date of their evaluation.


                                       21
<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        With Section 16(a) of the Exchange Act

     Our Definitive  Information Statement dated February 17, 2004 as filed with
the SEC is incorporated herein by reference.

     Our Board of  Managers  has  determined  that we have at least  one  "audit
committee  financial expert" on our audit committee,  as that term is defined by
SEC rule. That individual is Jeff Torluemke. Our Board of Managers also believes
that Mr. Torluemke is  "independent" of our management,  as that term is defined
in relevant  rules  applicable to companies  whose  securities are quoted in the
Nasdaq Stock Market.

     We have not adopted a formal ethics policy for our chief executive  officer
or senior financial  officers,  due to our status as a new company and our focus
on the commencement of our business.  However,  we believe that an ethics policy
is important and intend to consider adopting such a policy in the future.

Item 10.  Executive Compensation

     Our Definitive  Information Statement dated February 17, 2004 as filed with
the SEC is incorporated herein by reference.

Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters

     Our Definitive  Information Statement dated February 17, 2004 as filed with
the SEC is incorporated herein by reference.

Item 12.  Certain Relationships and Related Transactions

     Our Definitive  Information Statement dated February 17, 2004 as filed with
the SEC is incorporated herein by reference.

     In addition to the information contained in our Information  Statement,  we
paid or incurred  approximately  $33 million in costs and expenses to ICM during
2003  under  the  terms  of our  construction  contract  with  that  entity  for
construction of our plant.  We also borrowed  $250,000 from ICM in January 2003,
which  amount was repaid with  interest  of $4,192 in April of that year.  David
Vander Griend, a nominee to our Board of Managers, is also the president,  chief
executive officer and a principal shareholder of ICM, which also owns 11.15 % of
our Class B capital units.  At the time the  construction  contract with ICM was
approved by our Board,  Mr.  Vander  Griend did not own any units in our Company
and was only recently nominated to our Board.  Nevertheless,  our Board believes
that the terms of the  transactions  with ICM were no less  favorable than could
have been obtained from an unaffiliated third party.

                                       22
<PAGE>


Item 13.  Exhibits and Reports on Form 8-K

     The  following  exhibits  are  filed as part  of,  or are  incorporated  by
reference into, this report:

     (a)  Exhibits.  See Exhibit  Index  following  the  signature  page of this
          report.

     (b)  Reports on Form 8-K.

          (i)  The  Company  filed a  Current  Report  dated  October  23,  2003
               reporting a change in Registrant's certifying accountant.

Item 14.  Principal Accountant Fees and Services

     Our Definitive  Information Statement dated February 17, 2004 as filed with
the SEC is incorporated herein by reference.

                                       23
<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this Report to be signed on its
behalf by the  undersigned  thereunto duly  authorized in Oakley,  Kansas on the
19th day of March 2004.


                                WESTERN PLAINS ENERGY, L.L.C.


                                By:  /s/ Michael Erhart
                                     ----------------------------------------
                                     Michael Erhart, Chief Executive Officer,
                                     General Manager


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been  signed by the  following  persons in the  capacities  and on the dates
indicated.

      Signatures                   Title                             Date
      ----------                   -----                             ----


/s/ Jeff Torluemke           President, Manager                  March 19, 2004
-----------------------
Jeff Torluemke

/s/ Richard Sterrett         Vice President,                     March 19, 2004
-----------------------      Chief Financial Officer, Chief
Richard Sterrett             Accounting Officer, Manager


/s/ Ben Dickman              Manager                             March 19, 2004
-----------------------
Ben Dickman

/s/ Gary Johnson             Manager                             March 19, 2004
-----------------------
Gary Johnson

/s/ Ken Krien                Manager                             March 19, 2004
-----------------------
Ken Krien

/s/ David Mann               Manager                             March 19, 2004
-----------------------
David Mann

/s/ Brian Baalman            Manager                             March 19, 2004
-----------------------
Brian Baalman

/s/ Ronald Blaesi            Manager                             March 19, 2004
-----------------------
Ronald Blaesi


/s/ Robert Casper            Manager                             March 19, 2004
-----------------------
Robert Casper

                                       24
<PAGE>


                         REPORT OF INDEPENDENT AUDITORS



Members and Board of Managers
Western Plains Energy, LLC


We have audited the accompanying  balance sheet of Western Plains Energy, LLC (a
development  stage company) as of December 31, 2003, and the related  statements
of  operations,  changes in members'  equity,  and cash flows for the year ended
December 31, 2003.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant estimates by management, as well as evaluating the overall financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Western Plains Energy, LLC (a
development  stage  company) as of  December  31,  2003,  and the results of its
operations,  and its  cash  flows  for  the  year  ended  December  31,  2003 in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Stark, Winter, Schenkein & Co., LLP
---------------------------------------------
Stark  o  Winter  o  Schenkein & Co., LLP
Denver, Colorado
February 26, 2004

                                       F-1
<PAGE>


                           WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                DECEMBER 31, 2003


ASSETS

CURRENT ASSETS
Cash                                                   $        578,726
Prepaid expenses                                                 40,800
                                                       -----------------
  Total current assets                                          619,526
                                                       -----------------

PROPERTY AND EQUIPMENT
Land                                                            378,903
Grain handling equipment                                          4,690
Office equipment and furniture                                   94,392
Construction in progress                                     33,637,295
                                                       -----------------
                                                             34,115,280
                                                       -----------------

OTHER ASSETS
Available-for-sale securities                                     1,000
Investment in Industrial Revenue Bonds                       18,633,290
Financing fees, net                                             199,795
Loan origination fees, net                                      351,690
                                                       -----------------
                                                             19,185,775
                                                       -----------------

                                                       $     53,920,581
                                                       =================


LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                       $         23,913
Accounts payable - related party                                  3,750
Accounts payable - construction - related party               5,203,890
Accrued liabilities                                              46,759
Notes payable                                                11,198,366
                                                       -----------------
  Total current liabilities                                  16,476,678
                                                       -----------------

LONG-TERM LIABILITIES
Capital lease obligation                                     18,633,290
                                                       -----------------

COMMITMENTS AND CONTINGENCIES

MEMBERS' EQUITY
Class A Capital Units, 2,286 issued                          10,910,140
Class B Capital Units, 1,744 issued                           8,640,895
Class C Capital Units, 50 issued                                250,000
(Deficit) accumulated during development stage                 (990,422)
                                                       -----------------
                                                             18,810,613
                                                       -----------------

                                                       $     53,920,581
                                                       =================

           Please refer to accompanying Notes to Financial Statements

                                       F-2
<PAGE>

<TABLE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 2003
       AND THE PERIOD FROM JULY 10, 2001 (INCEPTION) TO DECEMBER 31, 2003
<CAPTION>

                                                                         Inception to
                                                     2003              December 31, 2003
                                                ------------------     -----------------
<S>                                             <C>                    <C>
REVENUE                                         $               -      $              -
                                                ------------------     -----------------

EXPENSES
Organizational                                             10,323                73,813
Production testing                                        121,908               121,908
General and administrative                                697,901             1,096,742
                                                ------------------     -----------------
Total expenses                                            830,132             1,292,463
                                                ------------------     -----------------

(Loss) from start-up activities                          (830,132)           (1,292,463)
                                                ------------------     -----------------

OTHER INCOME (EXPENSE)
Interest expense                                          (62,835)              (70,186)
Interest income                                           125,517               125,517
Grant income                                              223,473               223,473
Other income                                               11,946                23,237
                                                ------------------     -----------------

Total other income                                        298,101               302,041
                                                ------------------     -----------------

NET (LOSS)                                      $        (532,031)     $       (990,422)
                                                ==================     =================

NET (LOSS) PER UNIT
BASIC and DILUTED                               $         (190.15)     $        (805.88)
                                                ==================     =================

WEIGHTED AVERAGE UNITS OUTSTANDING
BASIC and DILUTED                                           2,798                 1,229
                                                ==================     =================

</TABLE>

           Please refer to accompanying Notes to Financial Statements.

                                       F-3
<PAGE>

<TABLE>
                          Western Plains Energy, L.L.C.
                          (A Development Stage Company)
                     Statement of Changes in Members' Equity
                 July 10, 2001 (Inception) to December 31, 2003

<CAPTION>



                              Class A                   Class B              Class C          Class D
                               Units        Amount       Units     Amount     Units   Amount   Units    Amount
                               ------    ------------    -----   -----------    --   --------   ---    ---------
<S>                            <C>       <C>             <C>     <C>           <C>   <C>       <C>     <C>
Balance, Inception,
  July 10, 2001                  --      $       --       --     $      --      --   $   --     --     $    --

Additional Paid in Capital       --              --       --            --      --       --     --          --

Class C units subscribed         --              --       --            --      50    250,000   --          --

Class D units issued             --              --       --            --      --       --      83      415,000

Net (loss)                       --              --       --            --      --       --     --          --
                               ------    ------------    -----   -----------    --   --------   ---    ---------

Balance, December 31, 2001       --              --       --            --      50    250,000    83      415,000

Net (loss)                       --              --       --            --      --       --     --          --
                               ------    ------------    -----   -----------    --   --------   ---    ---------

Balance, December 31, 2002       --              --       --            --      50    250,000    83      415,000

Beneficial conversion option      166         415,000     --            --      --       --     (83)    (415,000)

Units subscribed                2,122      10,610,000    1,744     8,720,000    --       --     --          --

Subscriptions forfeited            (2)        (10,000)    --            --      --       --     --          --

Offering costs                   --          (104,860)    --         (79,105)   --       --     --          --

Subscriptions paid               --              --       --            --      --       --     --          --

Net (loss)                       --              --       --            --      --       --     --          --
                               ------    ------------    -----   -----------    --   --------   ---    ---------

Balance December 31, 2003       2,286    $ 10,910,140    1,744   $ 8,640,895    50   $250,000   --     $    --
                               ======    ============    =====   ===========    ==   ========   ===    =========
</TABLE>

                              TABLE CONTINUED BELOW


<TABLE>
                          Western Plains Energy, L.L.C.
                          (A Development Stage Company)
                     Statement of Changes in Members' Equity
                 July 10, 2001 (Inception) to December 31, 2003
<CAPTION>

                                    CONTINUED
                                    ---------
                                                                              (Deficit)
                                                                             Accumulated
                                                                              During the
                                 Additional     Subscription   Discount on   Development
                                Paid In Capital  Receivable    Class D Units   Stage          Total
                                   ---------    ------------    ---------    ---------    ------------
<S>                                <C>          <C>             <C>          <C>          <C>
Balance, Inception,
  July 10, 2001                    $    --      $       --      $    --      $    --      $       --

Additional Paid in Capital            19,500            --           --           --            19,500

Class C units subscribed                --          (225,000)        --           --            25,000

Class D units issued                 415,000            --       (415,000)        --           415,000

Net (loss)                              --              --           --       (153,370)       (153,370)
                                   ---------    ------------    ---------    ---------    ------------

Balance, December 31, 2001           434,500        (225,000)    (415,000)    (153,370)        306,130

Net (loss)                              --              --           --       (305,021)       (305,021)
                                   ---------    ------------    ---------    ---------    ------------

Balance, December 31, 2002           434,500        (225,000)    (415,000)    (458,391)          1,109

Beneficial conversion option        (415,000)           --        415,000         --              --

Units subscribed                        --       (17,212,000)        --           --         2,118,000

Subscriptions forfeited                1,000           9,000         --           --              --

Offering costs                       (20,500)           --           --           --          (204,465)

Subscriptions paid                      --        17,428,000         --           --        17,428,000

Net (loss)                              --              --           --       (532,031)       (532,031)
                                   ---------    ------------    ---------    ---------    ------------

Balance December 31, 2003          $    --      $       --      $    --      $(990,422)   $ 18,810,613
                                   =========    ============    =========    =========    ============
</TABLE>

           Please refer to accompanying Notes to Financial Statements.

                                       F-4

<PAGE>

<TABLE>
                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 2003
       AND THE PERIOD FROM JULY 10, 2001 (INCEPTION) TO DECEMBER 31, 2003
<CAPTION>

                                                                                                    Inception to
                                                                                   2003           December 31, 2003
                                                                             ----------------    ------------------
<S>                                                                          <C>                  <C>
OPERATING ACTIVITIES
  Net (loss)                                                                 $       (532,031)    $        (990,422)
  Amortization                                                                         12,662                12,662
Changes in assets and liabilities
  Deposits                                                                             32,500                     -
  Prepaid legal services                                                               12,494                     -
  Prepaid  expenses                                                                   228,114               (40,800)
  Accounts payable and accrued liabilities                                           (129,547)               70,672
  Accounts payable - related party                                                      3,750                 3,750
  Accounts payable - construction -related party                                    5,203,890             5,203,890
                                                                             ----------------    ------------------
    NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                             4,831,832             4,259,752
                                                                             ----------------    ------------------

INVESTING ACTIVITIES
  Engineering costs paid                                                                    -                     -
  Purchase of land                                                                   (196,138)             (378,903)
  Option to purchase land and water rights                                              6,000                     -
  Purchase of grain handling equipment                                                 (4,690)               (4,690)
  Purchase of office equipment and furniture                                          (94,392)              (94,392)
  Construction in progress                                                        (33,637,295)          (33,637,295)
                                                                             ----------------    ------------------
    NET CASH (USED IN) INVESTING ACTIVITIES                                       (33,926,515)          (34,115,280)
                                                                             ----------------    ------------------

FINANCING ACTIVITIES
  Payment of financing fees                                                          (202,040)             (202,040)
  Payment of loan origination fees                                                   (362,107)             (362,107)
  Net proceeds from line of credit                                                          -               100,000
  Payment on line of credit                                                          (100,000)             (100,000)
  Proceeds from notes payable                                                      11,198,366            11,417,366
  Payment of notes payable                                                           (219,000)             (219,000)
  Cash paid for class A capital units                                              10,600,000            10,600,000
  Cash paid for class B capital units                                               8,720,000             8,720,000
  Cash paid for class C capital units                                                 225,000               250,000
  Cash paid for class D capital units                                                       -               415,000
  Additional paid in capital received                                                       -                19,500
  Offering costs paid for sale of capital units                                      (204,465)             (204,465)
                                                                             ----------------    ------------------
    NET CASH PROVIDED BY FINANCING ACTIVITIES                                      29,655,754            30,434,254
                                                                             ----------------    ------------------

NET INCREASE (DECREASE) IN CASH                                                       561,071               578,726

CASH - BEGINNING OF PERIOD                                                             17,655                     -
                                                                             ----------------    ------------------

CASH - END OF PERIOD                                                         $        578,726    $          578,726
                                                                             =================   ===================


SUPPLEMENTAL CASH FLOW INFORMATION
  Cash paid for income taxes                                                 $              -    $                -
                                                                             =================   ===================
  Cash paid for interest                                                     $         58,962    $           58,962
                                                                             =================   ===================

Non-cash Investing and Financing Activities
Available-for-sale securities received with note payable                     $              -    $            1,000
                                                                             =================   ===================
Investment in industrial revenue bonds                                       $     18,633,290    $       18,633,290
                                                                             =================   ===================
Lease obligation                                                             $     18,633,290    $       18,633,290
                                                                             =================   ===================
Deposit received in escrow for Class C Units                                 $              -    $           25,000
                                                                             =================   ===================
Engineering costs incurred                                                   $              -    $  $        36,800
                                                                             =================   ===================
</TABLE>

           Please refer to accompanying Notes to Financial Statements.

                                       F-5

<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


NOTE 1 - NATURE OF OPERATIONS

Principal Business Activity

Western  Plains Energy,  L.L.C.  (a Kansas  limited  liability  company with its
principal  place of business in Gove  County,  Kansas) was  organized  to obtain
equity  ownership and debt financing to construct,  own and operate a 30 million
gallon ethanol plant. Western Plains Energy,  L.L.C. (the Company) was organized
on  July  10,  2001.  Prior  to July  10,  2001,  costs  occurred  related  to a
feasibility study and other organizational  activities.  The Company has assumed
the expenses and other agreement related to these activities,  and has reflected
the effects of these transactions in the accompanying financial statements.

As of  December  31,  2003,  the  Company is in the  development  stage with its
current efforts being principally  devoted to construction,  organizational  and
financing activities.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Revenue from the  production  of ethanol and related  products  will be recorded
upon delivery to customers. Interest income is recognized as earned. Income from
government grant programs is recognized as costs are incurred.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

Land Option and Engineering Services

Costs  incurred  for the  purchase  of land or for land  option  agreements  are
capitalized. Engineering costs that relate to future acquisition of property and
equipment are  capitalized.  Depreciation or  amortization of engineering  costs
occurs over the  estimated  useful  life of the  related  asset when the related
assets are placed in service.

Property and Equipment

Property and equipment is recorded at cost.  Depreciation  of assets is computed
using the straight-line method over the following estimated useful lives:

         Plant and equipment                   5 - 31.5 years
         Office equipment and furniture               7 years
         Grain handling equipment                 5 - 7 years


                                       F-6
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


There was no depreciation  expense recorded in 2003, as the plant was not placed
into service until January 2004.

Long-Lived Assets

The Company reviews the value of its non-current assets for impairment  whenever
events indicate that the carrying amount of the asset may not be recoverable. An
impairment  loss is recorded  when the sum of the future cash flows is less than
the  carrying  amount of the  asset.  The  amount of the loss is  determined  by
comparing  the fair  market  value of the  asset to the  carrying  amount of the
asset.  Such  assessments  did not  result  in any  adjustment  to the  value of
non-current assets.

Organizational and Start-Up Costs

Organizational and start-up costs are expensed as incurred. Organizational costs
consist of amounts  related to the  formation  of the  Company.  Start-up  costs
consist  of  amounts  incurred  during  the  development  stage  related  to the
operation and  management of the Company,  which do not qualify as a capitalized
cost.

Offering Costs

Costs  incurred  related to the initial  public  offering of Class A and Class B
capital units are recorded as prepaid offering costs until the subscriptions for
Class A and Class B capital  units related to the offering have been accepted by
the  Company.  Prepaid  offering  costs  are  allocated  to  members'  equity in
proportion  to the  number of units  issued  versus  the  total  number of units
issuable  from the  Company's  offering.  Offering  costs  include  direct costs
related to the offering such as legal fees,  registration costs and other direct
costs associated with the offering.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amount of  assets  and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the financial  statements and revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Concentration of Credit Risk

The Company's cash balances are maintained in bank depositories and periodically
exceed federally  insured limits.  At December 31, 2003, the Company's  balances
exceeded insured limits by $391,801.

                                       F-7
<PAGE>
                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003



Available-for-Sale Securities

Investments  are recorded at cost,  as there are no quoted market prices for the
securities held by the Company.

Fair Value of Financial Instruments

Fair value estimates  discussed herein are based upon certain market assumptions
and pertinent  information  available to management as of December 31, 2003. The
respective  carrying  value of certain  on-balance-sheet  financial  instruments
approximated  their fair  values.  These  financial  instruments  include  cash,
prepaid expenses, accounts payable, accrued liabilities, and notes payable. Fair
values  were  assumed  to  approximate   carrying  values  for  these  financial
instruments  because  they are short term in nature and their  carrying  amounts
approximate  fair values.  The carrying  value of the  Company's  capital  lease
obligation  approximated  its fair value based on the current market  conditions
for similar debt instruments.

Income Taxes

The Company is organized as a limited  liability  company  under state law. As a
limited  liability  company that has elected to be taxed as a  partnership,  the
Company's  earnings  pass  through  to the  members  and are taxed at the member
level. Accordingly, no income tax provision has been included in these financial
statements.  Differences between the financial statement basis of assets and the
tax  basis  of  assets  is  related  to   capitalization   and  amortization  of
organization  and  start-up  costs for tax  purposes,  whereas  these  costs are
expensed for financial statement purposes.

Earnings Per Capital Unit

For purposes of  calculating  basic  earnings per capital  unit,  capital  units
subscribed  for and issued by the  Company  are  considered  outstanding  on the
effective date of issuance.

Segment Information

The Company follows SFAS 131,  "Disclosures  about Segments of an Enterprise and
Related Information".  Certain information is disclosed,  per SFAS 131, based on
the  way  management  organizes  financial   information  for  making  operating
decisions and assessing performance.  The Company currently operates in a single
segment and will  evaluate  additional  segment  disclosure  requirements  as it
expands its operations.

Comprehensive Income

The Company reports comprehensive income in accordance with SFAS 131, "Reporting
Comprehensive  Income,"  which  requires the  reporting of all changes in equity
during  a  period,   except  those  resulting  from  investment  by  owners  and
distribution  to owners,  in a financial  statement for the period in which they
are   recognized.   This   encompasses   unrealized   gains  and   losses   from
available-for-sale  securities held. There was no comprehensive  income recorded
during the period, as there was no change in the fair value of investments.

                                       F-8
<PAGE>
                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003



Recently Issued Accounting Pronouncements

In May 2003, the Financial  Accounting Standards Board ("FASB") issued SFAS 150,
"Accounting  for Certain  Financial  Instruments  with  Characteristics  of both
Liabilities  and Equity." SFAS 150 changes the  accounting  guidance for certain
financial  instruments  that,  under previous  guidance,  could be classified as
equity or "mezzanine" equity by now requiring those instruments to be classified
as liabilities (or assets in some circumstances) on the balance sheet.  Further,
SFAS 150  requires  disclosure  regarding  the  terms of those  instruments  and
settlement  alternatives.  SFAS 150 is  generally  effective  for all  financial
instruments  entered  into or  modified  after May 31,  2003,  and is  otherwise
effective at the beginning of the first interim period  beginning after June 15,
2003.  The  adoption  of SFAS 150 in the first  quarter  of  fiscal  2004 is not
expected  to have any  material  impact  on the  Company's  financial  position,
results of operations or cash flows.

In April  2003,  the FASB issued SFAS No. 149,  Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities.  SFAS 149 amends  SFAS 133 to
clarify  the   definition  of  a  derivative   and   incorporate   many  of  the
implementation  issues  cleared  as a result of the  Derivatives  Implementation
Group  process.  This  statement  is  effective  for  contracts  entered into or
modified  after June 30, 2003,  and should be applied  prospectively  after that
date. The adoption of SFAS 149 is not expected to have a material  effect on the
financial statements.

In July 2002, the FASB issued SFAS 146,  "Accounting  for Costs  Associated with
Exit or Disposal  Activities." SFAS 146 provides new guidance on the recognition
of costs  associated  with exit or disposal  activities.  The standard  requires
companies to recognize costs  associated  with exit or disposal  activities when
they are incurred  rather than at the date of  commitment to an exit or disposal
plan.  SFAS 146 supercedes  previous  accounting  guidance  provided by the EITF
Issue No. 94-3 "Liability  Recognition for Certain Employee Termination Benefits
and Other  Costs to Exit an  Activity  (including  Certain  Costs  Incurred in a
Restructuring)."  EITF Issue No. 94-3 required  recognition of costs at the date
of  commitment  to an  exit  or  disposal  plan.  SFAS  146  is  to  be  applied
prospectively to exit or disposal activities  initiated after December 31, 2002.
Early  application is permitted.  The adoption of SFAS 146 by the Company is not
expected to have a material impact on the Company's financial position,  results
of operations, or cash flows.

In April 2002, the FASB issued SFAS 145,  "Rescission of FASB  Statements No. 4,
44, and 64,  Amendment of FASB  Statement  No. 13, and  Technical  Corrections."
Among other things,  this statement  rescinds FASB  Statement No. 4,  "Reporting
Gains and Losses  from  Extinguishment  of Debt"  which  required  all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an  extraordinary  item, net of related income tax effect.  As a result,  the
criteria  in APB  Opinion  No.  30,  "Reporting  the  Results of  Operations  --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," will now be used to
classify  those  gains and  losses.  The  provisions  of SFAS 145 related to the
classification  of debt  extinguishment  are effective for years beginning after
May 15, 2002.  The adoption of SFAS 145 by the Company is not expected to have a
material impact on the Company's financial position,  results of operations,  or
cash flows.

                                       F-9
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


NOTE 3 - LAND

In February 2002, the Company purchased land and water appropriation  rights for
$182,765,  including closing costs and previously paid deposits. The Company has
entered into an agreement  to lease back  approximately  137 acres to one of the
sellers under a five-year operating lease.

The Company  entered  into an option to purchase a tract of land for the greater
of $1,000 per acre or $100,000.  The agreement required payment of $1,000,  with
the balance due upon exercise of the option and exchange of the properties.  The
option to purchase was exercised on February 12, 2003. In  conjunction  with the
option to purchase land,  the Company  entered into an agreement to exchange the
property  subject to the above  agreement plus $50,000 for water line,  well and
easements. Closing and other costs totaled $2,638.

During the year  ended  December  31,  2003,  the  Company  exercised  an option
purchase land and water rights for a total of $43,500.


NOTE 4 - MEMBERS' EQUITY

As specified in the Company's  Third Amended and Restated  Operating  Agreement,
the Company has four classes of membership  capital units:  Class A, B, C and D.
Capital units of each class are issued in denominations of $5,000.

Class A and Class B capital units were offered for sale in the public  offering.
A total of 3,967 Class A and B capital  units were  offered at a price of $5,000
per unit pursuant to a  registration  statement  filed with the  Securities  and
Exchange Commission,  with a minimum of $15,735,000 and a maximum of $19,835,000
raised  from  such  offering  of units.  Upon the  execution  of a  subscription
agreement  for Class A Capital  Units,  a Person who  purchased  Class A Capital
Units submitted (i) 10% of the total purchase price of the Person's subscription
amount to the Company, which was deposited into the Company's Escrow Account for
the Offering and (ii) an executed promissory note in the amount of the remaining
90% balance of such Person's subscription amount.  Payments of amounts due under
the  promissory  notes  were  subject  to the  call of the  Board  of  Managers.
Committed  Capital due under the promissory note was contributed  within 30 days
from the date of call, during the year ended December 31, 2003.

                                      F-10
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


Upon default on certain  obligations of members  related to capital  units,  the
Company  has the right to redeem the  member's  interest  at 10% of the price at
which the Company  originally offered the Capital Units for sale. If an investor
defaults on the payment of the  purchase  price  pursuant to a  promissory  note
referenced  above, the Company will have the right to retain all amounts paid by
the investor as liquidated damages.

The  Company's  Class  A  capital  units  were  offered  only  to  producers  of
agricultural products,  with a minimum purchase of two (2) Class A Capital Units
per  investor.  The Company  also  offered to sell Class B capital  units with a
minimum purchase of seven (7) Class B capital units per investor.  For the first
45 days of the  offering,  Class B capital units were only offered to purchasers
of Class A capital units.

The  offering  was  competed  in the Spring of 2003 with 2,122 Class A and 1,744
Class B units sold for total proceeds of $19,330,000.

For Class C capital units subscribed in a private  placement prior to the public
offering, 10% of the offering price was due upon subscription with the remaining
amount  executed  as a  promissory  note due subject to the call of the Board of
Managers.  The Company  received a subscription  for 50 Class C Units,  totaling
$250,000,  from  Ethanol  Products,  LLC. In  accordance  with the  subscription
agreement,  a  nonrefundable  $25,000 was received by the Company and  deposited
into an escrow  account  during the year ended  December 31, 2001. The remaining
$225,000 of the  subscription  was received  during the year ended  December 31,
2003.

Class D capital  units were  offered for sale prior to the public  offering at a
price of $5,000 per unit to the  members of the board of  managers  and  certain
others.  Upon completion of the public  offering,  which occurred in March 2003,
the Class D units  automatically  converted  into two (2) Class A capital units.
Total equity raised from the sale of Class D units was $415,000  during the year
ended December 31, 2001.

The Company must approve all transfers or other dispositions of capital units.

Voting rights are one vote per member for Class A and D capital  units,  and one
vote per unit for Class B and Class C capital units.  Members elect the Board of
Managers,  and members  must  approve any merger or  consolidation  with another
business entity,  sale of substantially all of the Company's assets or voluntary
dissolution. The Board of Managers decides all other matters regarding operation
and management of the Company, including amendment of the Operating Agreement.

                                      F-11
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003



Income and losses are allocated to members based on their respective  percentage
of membership  interest.  Distributions  to members shall be no less than 20% of
net cash from  operations,  as defined in the Operating  Agreement,  if net cash
from  operations is in excess of $500,000 on an annual basis,  provided that any
such  distribution  does not  constitute  or cause a  default  under  any of the
Company's loan documents or credit facilities.

Upon  dissolution  of the  Company,  and  after  the  payment  of all  debts and
liabilities of the Company,  the assets shall be distributed to the unit holders
ratably  in  proportion  to the  credit  balances  in their  respective  capital
accounts for all classes of units.

Operating Agreement

During  July  2003,  the  Board of  Managers  amended  the  Company's  operating
agreement.  The amendment  includes,  among other things,  provisions  whereby a
bankrupt  member's  interest  may be redeemed at 90% of the fair market value of
the units at the option of the Company.


NOTE 5 - ACCUMULATED DEFICIT PER CAPITAL UNIT

For purposes of  calculating  basic  earnings  (loss) per capital unit,  capital
units subscribed for and issued by the Company are considered outstanding on the
effective  date of issuance.  The  computation  of diluted  earnings  (loss) per
capital  unit did not  include  the  total  number  of Class D units on an as-if
converted basis and Class C units subscribed for but not issued.  These dilutive
securities  are not included in the  computation  of  outstanding  capital units
because the inclusion of these units would have an  anti-dilutive  effect on the
computation of earnings (loss) per capital unit.


NOTE 6 - FINANCING ARRANGEMENTS

Line of Credit

On August 26, 2002, the Company  established a $100,000 revolving line of credit
with the First National Bank of Quinter,  Kansas. The outstanding  balances bear
interest at the bank's prime rate plus 2%. Interest is due on a quarterly basis.
All  outstanding  balances  were due at the  maturity  date of August 26,  2003.
Certain assets of the Company secured the line. The Line was paid in full during
the year ended December 31, 2003.


                                      F-12

<PAGE>
                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003




Advance payable

During January 2003, the Company  received an advance of $250,000 from ICM, Inc.
The advance was due on demand;  bears interest at 6% and is secured by property.
The advance was repaid on April 11, 2003 with interest of $4,192.

Notes Payable

The Company had an  outstanding  loan of $100,000 from the Kansas  Department of
Commerce and Housing.  The loan was non-interest  bearing through the later of 7
days  following  the release  from  escrow of  proceeds  of the  initial  public
offering to the Company or September  1, 2003.  In the event the proceeds of the
offering  were not released  from escrow by  September  1, 2003,  the loan bears
interest at 7.75% from September 1, 2003 through repayment, due 7 days after the
release of the offering proceeds from escrow.  The Company repaid the balance of
this note on April 28, 2003.

In February  2002,  the Company  entered into a 5% note payable with Farm Credit
Services  for  $120,000.  The note was due in annual  installments  of  $27,717,
including  interest,  with the final  installment  due on March 1, 2007, and was
secured  by land.  As a  portion  of the  proceeds  from the note,  the  Company
received 200 shares of Farm Credit  Services  stock at a cost of $1,000.  During
the year ended December 31, 2003 the note was repaid in full.

Construction and permanent financing commitment

During July 2003,  the Company  entered into a credit  agreement with Ag Country
Farm Credit Services, FLCA (AgCountry) that established a $22,000,000 (or 55% of
construction   costs,   whichever  is  less)   multiple-advance,   non-revolving
construction  loan for construction of the ethanol plant. The construction  note
has an expiration date of August 1, 2004, with the amount outstanding  converted
into a  permanent  term  loan  to be  amortized  over a 10  year  period.  Up to
$5,000,000  of this note may be  converted  to a  revolving  credit  facility to
reduce  interest  costs  and  to  aid  cash  management.   During  construction,
interest-only  payments  equal  to  LIBOR  plus  4% will  be due  monthly.  Upon
completion  of  construction,  the term  loan  will be  repaid  in 40  quarterly
principal payments plus accrued interest based on the applicable  interest rate.
The revolving  credit facility will have annual  step-downs  equal to 10% of the
note's  original  commitment.  The terms  also  require  additional  payment  of
principal  equal to 40% of  annual  free  cash  flow as  defined  by the  credit
agreement,  not to exceed  $2,000,000  annually.  The note is subject to certain
restrictive  covenants,  and requires payment of origination,  participation and
other fees totaling $337,107 and an annual  administrative  fee of $25,000.  The
$362,107  of  financing  costs will be  amortized  over the live of the loan (10
years),  commencing  with the loan's  conversion  into a permanent loan no later
than August 1, 2004. The annual  administrative  fee is amortized over 12 months
and $10,417 was expensed  during the year ended  December 31, 2003.  Pursuant to
this credit agreement the Company was advanced  $11,152,964 through December 31,
2003. Accrued interest at December 31, 2003 was $45,402.

                                      F-13
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003



NOTE 7 - COMMITMENTS, CONTINGENCIES AND AGREEMENTS

The  Board of  Managers  has  entered  into  various  agreements  regarding  the
formation,  operation and management of the Company.  Significant agreements are
as follows:

Consulting Agreement

The  Company  has entered  into a  consulting  agreement  with  Val-Add  Service
Corporation  (Val-Add).  The  consulting  agreement  provides  for a base fee of
$5,000  per  month  plus  expenses  and a travel  allowance  for  assistance  in
negotiating  and  financing  the ethanol  plant.  This  agreement  also includes
provisions   whereby  Val-Add  is  eligible  for  bonuses  totaling  $60,000  at
completion of duties  outlined in the agreement.  Either party may terminate the
agreement with 10 days notice.

A separate agreement with Val-Add provides for certain administrative  services.
The fee for these services is $25 per hour, plus a flat monthly fee of $50, plus
out of pocket  expenses.  Either party with 10 days advance notice may terminate
the  agreement.  The  Company  recognized  approximately  $13,000 of  consulting
expenses related to this agreement for the year ended December 31, 2003.

Both agreements were terminated during the year ended December 31, 2003.

Energy Management Services

The Company has entered into an agreement  with U.S.  Energy  Service,  Inc. for
energy  management and engineering  services.  The initial term of the agreement
expired  on  August  31,  2003,  and is  renewable  for  one-year  terms  unless
terminated by either party with 30 days advance notice.  The agreement  provides
for fees of $2,800 per month.

Sales Service Agreement

The Company has entered into an agreement with ICM Marketing, Inc., for the sale
of the bulk feed grade products  (distiller's  grains)  produced from the plant.
The agreement expires October 1, 2004, and is automatically renewed for one-year
terms unless either party provides written notice 90 days prior to expiration of
the  agreement.  Under the terms of the  agreement,  ICM  Marketing,  Inc. would
purchase  all  products  at a price  equal  to 98% of the  selling  price,  less
applicable freight. If the product is sold to members of the Company,  the price
is set at 98.5% of the selling price,  less applicable  freight.  ICM Marketing,
Inc. is responsible  for billing and account  servicing of the product sales and
for losses related to non-payment unless such non-payment relates to substandard
products.  This agreement was subsequently assigned to United Bio Energy, LLC an
affiliate of ICM Marketing, Inc.

                                      F-14
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003



Ground Water Services

The Company  entered into an agreement to secure  rights to ground water for the
ethanol plant.  The agreement  requires a payment of $15,000 for the rights;  of
which $7,500 was payable upon  execution of the  agreement  and the remainder is
payable 7 days prior to  commencement  of the  drilling of the water well by the
Company.  In addition,  the  agreement  requires  payments of $1,050 per quarter
during the first 15 years of the agreement, commencing with pumping of the well,
with the parties renegotiating the quarterly fee after the first 15 years of the
agreement. The agreement has a 20-year term commencing with pumping of the well,
with renewal for  successive  5-year  periods  unless notice of  termination  is
provided 60 days prior to expiration of the agreement.  Minimum payments related
to pumping water from the well are $4,200 per year,  with a total  commitment of
$63,000 during the first 15 years of the agreement.

Marketing Agreements

The Company  entered  into an  agreement  with  Ethanol  Products,  LLC, for the
marketing of the  Company's  ethanol and certain  administrative  services.  The
agreement has a term of 5 years and commences upon start of ethanol  production,
with a fee of $.01 per gallon of ethanol  produced.  The  agreement is renewable
for 5-year terms unless  notice of  termination  has been  delivered at least 90
days prior to expiration.


NOTE 8 - RELATED PARTY TRANSACTIONS

The Company has reimbursed members of the Board of Managers for certain expenses
incurred by the Company and paid by the members of the Board of Managers  during
the development  stage.  Expense  reimbursements for the year ended December 31,
2003 totaled $21,750 of which $3,500 was unpaid at December 31, 2003.

A principal  owner of Val-Add is also one of the initial  Class D members of the
Company.  Ethanol Products, LLC owns all 50 Class C capital units, purchased for
$250,000.

ICM,  Inc.,  the  general  contractor  for the plant,  advanced  $250,000 to the
Company  in the first  quart of 2003;  the  amount was repaid in April 2003 with
$4,192 of accrued interest (See Note 6).

The  President  of ICM owns or is the  beneficial  owner of 200  Class B capital
units.

                                      F-15
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003



A company  controlled by Richard  Sterrett,  CFO of the Company  received office
rent of $1,000 per month from August 2002 to November 2003.


NOTE 9 - GRANT

In January 2003, the Company received a value-added  agricultural product market
development  grant from the  United  States  Department  of  Agriculture,  Rural
Development.  The grant  provides  matching  funds not to  exceed  $290,610  for
working capital  expenses.  During the year ended December 31, 2003 $223,473 was
applied for and received under this grant.


NOTE 10 - SALE / LEASEBACK TRANSACTION

On October 3, 2003, the Company  completed an industrial  revenue bond financing
with Gove County,  Kansas that will provide property tax savings for 10 years on
the  plant  site.  As  part  of the  financing,  title  to the  plant  site  and
improvements have been transferred to Gove County, as security for the repayment
of the bonds,  and the  Company is  leasing  back the site in an amount  that is
equal to the amount of interest to be paid on the Gove County  bonds.  AgCountry
consented to this  transaction,  and the bonds have been pledged to AgCountry as
security for any obligations  under the AgCountry Credit  Agreement.  As part of
the financing, the Company paid the bond underwriter,  W.R. Taylor, $160,000 and
agreed  to pay an  additional  $40,000  only if the  bonds  are  converted  to a
variable rate and remarketed by W.R. Taylor. The maximum principal amount of the
bonds is $32,000,000. The bonds were initially issued in the principal amount of
$15,256,282,  which is the amount of the Company's  expenditures on the plant as
of August 31, 2003.  An  additional  $3,377,008  of bonds was issued in November
2003. Additional project costs of $15,004,005 were expended through December 31,
2003 for which  $13,366,710  is eligible to be submitted to the bond trustee for
additional bond issuances.

The $160,000 of financing fees paid to the bond underwriter and $42,040 of legal
and other cost  associated  with the bond  closing  will be  amortized  over the
30-year life of the bonds. $2,245 of amortization  expense was recognized during
the year ended December 31, 2003.

The Company,  as holder of the industrial revenue bonds, is due interest at 3.5%
per annum with interest  payable  semi-annually  on March 1st and September 1st.
This interest income is directly offset by the lease payments on the plant. Both
the bond and the corresponding lease have terms of 30 years. The lease qualifies
as a capital lease.  Interest income recognized on the Industrial  Revenue Bonds
for the year ended  December 31, 2003 was  $85,234.  This amount is equal to the
lease expense of the plant.

                                      F-16
<PAGE>
                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003



NOTE 11 - CONCENTRATION OF CUSTOMERS

The Company will sell essentially all of its products to two marketers, which in
turn sell to other purchasers.  The Company has executed an exclusive  marketing
agreement with Ethanol Products LLC ("Ethanol  Products") of Wichita,  Kansas to
market the ethanol  produced at our plant.  The  agreement is  effective  for an
initial term of five years beginning January 2004 and is automatically renewable
for  subsequent  five-year  terms  unless  terminated  by either  party prior to
expiration.  Ethanol  Products has agreed to purchase all of the ethanol that is
produced  at  the  plant.  Ethanol  Products  will  be  solely  responsible  for
determining  the price and terms at which the  ethanol  acquired  from the plant
will be sold and to whom it will be sold.  In the  event  that the  relationship
with Ethanol  Products is interrupted for any reason,  the Company believes that
it would be able to locate  another entity to market the ethanol.  However,  any
interruption  could  temporarily  disrupt  the sale of the  Company's  principal
product and adversely affect its operations.

The Company also has executed an exclusive agreement with ICM Marketing, Inc. to
market all of the  distiller's  grains  produced  at the  plant.  The rights and
obligations of ICM under that agreement were subsequently assigned to United Bio
Energy,  LLC ("UBE").  The initial term of the agreement with UBE is three years
expiring October 1, 2006 and will  automatically  renew for additional  one-year
terms unless  terminated by the Company or UBE following 90 days advance written
notice.  As  with  the  marketing   arrangement  with  Ethanol   Products,   any
interruption in the relationship with UBE could temporarily affect the Company's
business,  although it is believed that the Company could find another entity to
market the grains.


NOTE 12 - REGULATION

The construction of the plant required various state and local permits to comply
with existing  governmental  regulations designed to protect the environment and
worker  safety.  While the Company is subject to regulations on emissions of the
United States Environmental  Protection Agency ("EPA"), current EPA rules do not
require  us  to  obtain  any  permits  or  approvals  in  connection   with  the
construction and operation of the Company's business. However, state and federal
rules can and do change,  and such changes  could  result in greater  regulatory
burdens on the Company.

The ethanol  production will require the Company to emit a significant amount of
carbon dioxide into the air.  Current  Kansas law regulating  emissions does not
restrict or prevent the Company from emitting  carbon  dioxide gas into the air,
but this could change in the future.

                                      F-17
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2003


The Company obtained what is believed all the necessary air and water permits to
operate the plant, including a permit to discharge wastewater from the plant.

In addition to the foregoing  regulations  affecting air and water quality,  the
Company is subject to regulation for fuel storage tanks. If the Company is found
to have  violated  federal,  state or  local  environmental  regulations  in the
future, the Company could incur liability for clean-up costs, damage claims from
third parties and civil or criminal  penalties that could  adversely  affect its
business.

                                      F-18
<PAGE>

                          WESTERN PLAINS ENERGY, L.L.C.

                              FINANCIAL STATEMENTS
                              FOR THE PERIODS ENDED
                           DECEMBER 31, 2002 AND 2001



WESTERN PLAINS ENERGY, L.L.C.

Table of Contents

--------------------------------------------------------------------------------


                                                                            Page
                                                                            ----

INDEPENDENT AUDITOR'S REPORT.................................................1

FINANCIAL STATEMENTS
     Balance Sheets..........................................................2
     Statements of Operations................................................3
     Statements of Changes in Members' Equity................................4
     Statements of Cash Flows................................................5
     Notes to Financial Statements...........................................6

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT
--------------------------------------------------------------------------------



The Board of Managers
Western Plains Energy, L.L.C.
Quinter, Kansas


We have  audited  the  accompanying  balance  sheets of Western  Plains  Energy,
L.L.C., (a development stage limited liability  company) as of December 31, 2002
and 2001, and the related  statements of operations,  changes in members' equity
and cash flows for the year ended  December 31,  2002,  for the period from July
10, 2001 (inception)  through  December 31, 2001 and the cumulative  period from
July 10, 2001 (inception) through December 31, 2002. These financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Western Plains Energy,  L.L.C.
as of December  31, 2002 and 2001,  and the results of its  operations  and cash
flows for the year ended  December  31,  2002,  and for the period from July 10,
2001 (inception)  through  December 31, 2001 and for the cumulative  period from
July 10,  2001  (inception)  through  December  31,  2002,  in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ Eide Bailly LLP
-----------------------
Bloomington, Minnesota
January 14, 2003

                                        1
<PAGE>

<TABLE>
WESTERN PLAINS ENERGY, L.L.C.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 2002 AND 2001
-------------------------------------------------------------------------------------
<CAPTION>


                                                                 2002         2001
                                                               ---------    ---------
<S>                                                            <C>          <C>
ASSETS

CURRENT ASSETS
  Cash                                                         $  17,655    $ 243,031
  Prepaid offering costs                                         215,305       64,043
  Prepaid legal services                                          12,494       59,990
  Prepaid expenses                                                 3,500       27,250
  Deposits for Class C Units in escrow                            25,000       25,000
  Deposits for land                                                 --         17,837
                                                               ---------    ---------
    Total current assets                                         273,954      437,151
                                                               ---------    ---------

LAND                                                             182,765         --
                                                               ---------    ---------

OTHER ASSETS
  Prepaid engineering costs                                       50,109        9,200
  Contract deposits                                                7,500        7,500
  Land options                                                     6,000        6,000
  Available-for-sale securities                                    1,000         --
                                                               ---------    ---------
                                                               ---------    ---------
                                                                  64,609       22,700
                                                               ---------    ---------

TOTAL ASSETS                                                   $ 521,328    $ 459,851
                                                               =========    =========

LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                             $ 148,204    $  43,321
  Accounts payable - related party                                  --            100
  Accrued liabilities                                             50,160       10,300
  Deferred rent                                                    1,855         --
  Line of credit                                                 100,000         --
  Current portion of notes payable                               121,700      100,000
                                                               ---------    ---------
    Total current liabilities                                    421,919      153,721
                                                               ---------    ---------

NOTES PAYABLE, LESS CURRENT MATURITIES                            98,300         --
                                                               ---------    ---------

COMMITMENTS AND CONTINGENCIES (Note 7)

MEMBERS' EQUITY
  Class C Capital Units, 50 authorized and 0 outstanding         250,000      250,000
      Less:  Subscription for Class C Units                     (225,000)    (225,000)
  Class D Capital Units, 83 units authorized and outstanding     415,000      415,000
      Less:  Discount on Class D Units                          (415,000)    (415,000)
  Additional Paid In Capital                                     434,500      434,500
  Deficit accumulated during development stage                  (458,391)    (153,370)
                                                               ---------    ---------
    Total members' equity                                          1,109      306,130
                                                               ---------    ---------

TOTAL LIABILITIES AND MEMBERS' EQUITY                          $ 521,328    $ 459,851
                                                               =========    =========
</TABLE>

                        See Notes to Financial Statements

                                        2
<PAGE>

<TABLE>
WESTERN PLAINS ENERGY, L.L.C.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS

------------------------------------------------------------------------------------------------
<CAPTION>
                                                            Period From          Period From
                                                            July 10, 2001        July 10, 2001
                                     For Year Ended        (Inception) to       (Inception) to
                                    December 31, 2002     December 31, 2001    December 31, 2002
                                    -----------------     -----------------    -----------------
<S>                                 <C>                   <C>                  <C>
REVENUE                             $            --       $            --      $            --
                                    -----------------     -----------------    -----------------

EXPENSES
Organizational expenses                        21,232                42,258               63,490
Start-up expenses                             287,729               111,112              398,841
                                    -----------------     -----------------    -----------------
         Total expenses                       308,961               153,370              462,331
                                    -----------------     -----------------    -----------------

LOSS FROM
     Start-up activities                     (308,961)             (153,370)            (462,331)

     Other income (expense)
         Interest expense                      (7,351)                 --                 (7,351)
         Other income                          11,291                  --                 11,291
                                    -----------------     -----------------    -----------------

             Total other income                 3,940                  --                  3,940
                                    -----------------     -----------------    -----------------

DEFICIT ACCUMULATED DURING
     DEVELOPMENT STAGE              $        (305,021)    $        (153,370)   $        (458,391)
                                    =================     =================    =================

DEFICIT ACCUMULATED PER UNIT
     BASIC AND DILUTED              $          (3,675)    $         (15,337)
                                    =================     =================

WEIGHTED AVERAGE UNITS
     OUTSTANDING
     BASIC AND DILUTED                             83                    10
                                    =================     =================
</TABLE>

                        See Notes to Financial Statements

                                        3
<PAGE>

<TABLE>
WESTERN PLAINS ENERGY, L.L.C.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN MEMBERS' EQUITY

(TABLE SPLIT - SEE BELOW)
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                                    Capital Units
                              -----------------------------------------------------------------------------------------------------
                                      Class A                  Class B                     Class C                  Class D
                              -----------------------  -----------------------     -----------------------  -----------------------
                                Units         Amount     Units        Amount         Units        Amount      Units         Amount
                              ---------     ---------  ---------     ---------     ---------     ---------  ---------     ---------
<S>                           <C>           <C>         <C>          <C>           <C>           <C>        <C>           <C>
Balance, July 10, 2001,
  Inception                        --       $    --         --       $    --            --       $    --         --       $    --

Additional paid in
  capital received                 --            --         --            --            --            --         --            --

Class C units subscribed           --            --         --            --            --         250,000       --            --

Class D units issued with
  2 for 1 conversion feature       --            --         --            --            --            --           83       415,000

Deficit accumulated during
  the development stage            --            --         --            --            --            --         --            --
                              ---------     ---------  ---------     ---------     ---------     ---------  ---------     ---------

Balance, December 31, 2001                                  --       $    --            --       $ 250,000         83     $ 415,000

Deficit accumulated during
  the development stage            --            --         --            --            --            --         --            --
                              ---------     ---------  ---------     ---------     ---------     ---------  ---------     ---------

Balance, December 31, 2002         --       $    --         --       $      --          --       $ 250,000         83     $ 415,000
                              =========     =========  =========     =========     =========     =========  =========     =========
</TABLE>

(continued below)

<TABLE>
WESTERN PLAINS ENERGY, L.L.C.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN MEMBERS' EQUITY

(TABLE SPLIT - CONTINUED)

<CAPTION>
-------------------------------------------------------------------------------------------------------------------

                                                                                Deficit
                                                  Class C                     Accumulated
                                  Additional        Unit        Discount on     During The
                                   Paid In      Subscription      Class D      Development       Total
                                   Capital       Receivable       Units         Stage           Amount
                                  ---------      ---------      ---------      ---------      ---------
<S>                               <C>            <C>            <C>            <C>            <C>
Balance, July 10, 2001,
  Inception                       $    --        $    --        $    --        $    --        $    --

Additional paid in
  capital received                   19,500           --             --             --           19,500

Class C units subscribed               --         (225,000)          --             --           25,000

Class D units issued with
  2 for 1 conversion feature        415,000           --         (415,000)          --          415,000

Deficit accumulated during
  the development stage                --             --             --         (153,370)      (153,370)
                                  ---------      ---------      ---------      ---------      ---------

Balance, December 31, 2001        $ 434,500      $(225,000)     $(415,000)     $(153,370)     $ 306,130

Deficit accumulated during
  the development stage                --             --             --         (305,021)      (305,021)
                                  ---------      ---------      ---------      ---------      ---------

Balance, December 31, 2002        $ 434,500      $(225,000)     $(415,000)     $(458,391)     $   1,109
                                  =========      =========      =========      =========      =========
</TABLE>

                        See Notes to Financial Statements

                                        4
<PAGE>

<TABLE>
WESTERN PLAINS ENERGY, L.L.C.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS

-------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                 Period From            Period From
                                                                                July 10, 2001          July 10, 2001
                                                         For Year Ended        (Inception) to         (Inception) to
                                                       December 31, 2002      December 31, 2001      December 31, 2002
                                                       -----------------      -----------------      -----------------
<S>                                                    <C>                    <C>                    <C>
OPERATING ACTIVITIES
     Deficit accumulated during development stage      $        (305,021)     $        (153,370)     $        (458,391)
     Changes in assets and liabilities
         Prepaid legal services                                   47,496                (59,990)               (12,494)
         Prepaid expenses                                        (11,159)               (27,250)               (45,609)
         Accounts payable and accrued liabilities                146,498                 46,521                200,219
                                                       -----------------      -----------------      -----------------

NET CASH USED FOR OPERATING
   ACTIVITIES                                                   (122,186)              (194,089)              (316,275)
                                                       -----------------      -----------------      -----------------

INVESTING ACTIVITIES
     Contract deposits                                              --                   (7,500)                (7,500)
     Engineering costs paid                                       (6,000)                (2,000)                (8,000)
     Deposits for land                                              --                  (17,837)               (17,837)
     Purchase of land                                           (164,928)                  --                 (164,928)
     Option to purchase land and water rights                       --                   (6,000)                (6,000)
                                                       -----------------      -----------------      -----------------

NET CASH USED FOR INVESTING
   ACTIVITIES                                                   (170,928)               (33,337)              (204,265)
                                                       -----------------      -----------------      -----------------

FINANCING ACTIVITIES
     Borrowings on line of credit                                100,000                   --                  100,000
     Proceeds from note payable                                  119,000                100,000                219,000
     Class D units issued                                           --                  415,000                415,000
     Offering costs paid                                        (151,262)               (64,043)              (215,305)
     Additional paid in capital received                            --                   19,500                 19,500
                                                       -----------------      -----------------      -----------------

NET CASH PROVIDED BY FINANCING
     ACTIVITIES                                                   67,738                470,457                538,195
                                                       -----------------      -----------------      -----------------

NET INCREASE (DECREASE) IN CASH                                 (225,376)               243,031                 17,655

CASH - beginning of period                                       243,031                   --                     --
                                                       -----------------      -----------------      -----------------

CASH - end of period                                   $          17,655      $         243,031      $          17,655
                                                       =================      =================      =================

SUPPLEMENTAL DISCLOSURES OF
  NON-CASH INVESTING AND FINANCING
  ACTIVITIES
     Deposits received in escrow for Class C Units     $            --        $          25,000      $          25,000
                                                       =================      =================      =================
     Engineering costs incurred                        $          27,600      $           9,200      $          36,800
                                                       =================      =================      =================

     Securities received in conjunction with
       proceeds from bank note payable                 $           1,000      $            --        $           1,000
                                                       =================      =================      =================
</TABLE>

                        See Notes to Financial Statements

                                        5
<PAGE>


WESTERN PLAINS ENERGY, L.L.C.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

Note 1 - NATURE OF OPERATIONS

Principal Business Activity

Western  Plains Energy,  L.L.C.  (a Kansas  Limited  Liability  Company with its
principal place of business to be located in Gove County,  Kansas) was organized
to obtain equity ownership and debt financing to construct, own and operate a 30
million gallon ethanol plant.  Western Plains Energy,  L.L.C.  (the Company) was
organized on July 10, 2001.  Prior to July 10, 2001, costs occurred related to a
feasibility study and other organizational  activities occurred. The Company has
assumed the expenses and other agreements  related to these activities,  and has
reflected  the  effects  of these  transactions  in the  accompanying  financial
statements.

As of  December  31,  2002,  the  Company is in the  development  stage with its
current  efforts  being  principally  devoted to  organizational  and  financing
activities.  On June 11, 2002, the Company  registered the offer and sale of its
Class A and B capital units with the  Securities  and Exchange  Commission as an
initial  public  offering.  The Company is offering  Class A and Class B capital
units to raise a minimum of $15,735,000 and a maximum of $19,835,000.


Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Revenue from the  production  of ethanol and related  products  will be recorded
upon delivery to customers. Interest income is recognized as earned.

Land Option and Engineering Services

Costs  incurred  for the  purchase  of land or for land  option  agreements  are
capitalized. Engineering costs that relate to future acquisition of property and
equipment are  capitalized.  Depreciation or  amortization of engineering  costs
occurs over the  estimated  useful  life of the  related  asset when the related
assets are placed in service.

Long-Lived Assets

The Company reviews the value of its non-current assets for impairment  whenever
events indicate that the carrying amount of the asset may not be recoverable. An
impairment  loss is recorded  when the sum of the future cash flows is less than
the  carrying  amount of the  asset.  The  amount of the loss is  determined  by
comparing  the fair  market  value of the  asset to the  carrying  amount of the
asset.  Such  assessments  did not  result  in any  adjustment  to the  value of
non-current assets.

Organizational and Start-Up Costs

Organizational and start-up costs are expensed as incurred. Organizational costs
consist of amounts  related to the  formation  of the  Company.  Start-up  costs
consist  of  amounts  incurred  during  the  development  stage  related  to the
operation  and  management  of the Company which do not qualify as a capitalized
cost.

                                        6
(continued on next page)
<PAGE>


NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

Offering Costs

Costs  incurred  related to the initial  public  offering of Class A and Class B
capital units are recorded as prepaid offering costs until the subscriptions for
Class A and Class B capital  units related to the offering have been accepted by
the  Company.  Prepaid  offering  costs  are  allocated  to  members'  equity in
proportion  to the  number of units  issued  versus  the  total  number of units
issuable  from the  Company's  offering.  Offering  costs  include  direct costs
related to the offering such as legal fees,  registration costs and other direct
costs associated with the offering.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amount of  assets  and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the financial  statements and revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Concentration of Credit Risk

The Company's cash balances are maintained in bank depositories and periodically
exceed federally insured limits.

Available-for Sale Securities

Investments  are recorded at cost as there are no quoted  market  prices for the
securities held by the Company.

Fair Value of Financial Instruments

Unless  otherwise  disclosed,  the  carrying  amounts of  financial  instruments
approximate fair value at December 31, 2002 and 2001,  because of the relatively
short maturity or variable rates of these instruments.  Investments are recorded
at cost as there are no quoted market prices for the securities by the Company.

Income Taxes

The Company is organized as a limited  liability  company  under state law. As a
limited  liability  company that has elected to be taxed as a  partnership,  the
Company's  earnings  pass  through  to the  members  and are taxed at the member
level. Accordingly, no income tax provision has been included in these financial
statements.  Differences between the financial statement basis of assets and the
tax  basis  of  assets  is  related  to   capitalization   and  amortization  of
organization  and  start-up  costs for tax  purposes,  whereas  these  costs are
expensed for financial statement purposes.

Additional Paid In Capital

The Company  received  amounts  from  various  entities to assist in funding the
Company's formation and development. The Company is under no obligation to issue
capital  units  related to these  receipts  and has  recorded  these  amounts as
additional paid-in capital.

                                        7
(continued on next page)

<PAGE>


NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

Earnings Per Capital Unit

For purposes of  calculating  basic  earnings per capital  unit,  capital  units
subscribed  for and issued by the  Company  are  considered  outstanding  on the
effective  date of issuance.  For purposes of calculating  diluted  earnings per
capital unit, units subscribed for but not issued by the Company are included in
the computation of outstanding  capital units. As of December 31, 2002 and 2001,
there were no units  includable in basic or diluted earnings per capital unit as
there were no units subscribed for or accepted at that date.

Recently Issued Accounting Pronouncements

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations" (SFAS No. 143). This statement addresses  financial  accounting and
reporting for obligations  associated with the retirement of tangible long-lived
assets and the associated asset retirement costs.

In July 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or  Disposal  Activities,"  (SFAS No.  146).  The  statement  requires
companies to recognize costs  associated  with exit or disposal  activities when
they are incurred rather than at the date of a commitment to an exit or disposal
plan.  Statement  146  is  to be  applied  prospectively  to  exit  or  disposal
activities initiated after December 31, 2002.

Management  does not expect the adoption of the above  pronouncements  to have a
material impact on the Company.


Note 3 - LAND

In February 2002, the Company purchased land and water appropriation rights, for
$182,765,  including closing costs and previously paid deposits. The Company has
entered into an agreement  to lease back  approximately  137 acres to one of the
sellers under a five-year operating lease.


Note 4 - MEMBERS' EQUITY

As specified in the Company's  Operating  Agreement,  the Company will initially
have four  classes of  membership  capital  units:  Class A, B, C and D. Capital
units of each class are issued in denominations of $5,000.

Class D capital  units will  automatically  convert into two (2) Class A capital
units upon  completion  of the public  offering  of Class A and B capital  units
described  below.  The conversion  feature is reflected as a discount on Class D
shares  on the  accompanying  balance  sheets.  At the  date of  conversion  the
discount  will be removed  from the  balance  sheet and receive  treatment  as a
dividend.

Class A and  Class B capital  units  have been  offered  for sale in the  public
offering.  No more than 3,967  Class A and B capital  units will be offered at a
price of $5,000 per unit pursuant to a  registration  statement to be filed with
the Securities  and Exchange  Commission,  with a minimum of  $15,735,000  and a
maximum of  $19,835,000  raised from such  offering  of units.  In the event the
minimum of $15,735,000 is not raised,  amounts received from  subscriptions will
be returned to the purchaser without interest.

For Class A and Class B capital  units,  10% of the  offering  price is due upon
subscription,  with the  remaining  amount  executed  as a  promissory  note due
subject to call of the Board of Managers.

                                        8
(continued on next page)

<PAGE>


NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

The Company is  initially  offering  Class A capital  units only to producers of
agricultural products,  with a minimum purchase of two (2) Class A Capital Units
per investor.  The Company is also offering to sell Class B capital units with a
minimum purchase of seven (7) Class B capital units per investor.

When the Board of Managers calls amounts due on promissory notes for Class A and
Class B capital  units,  subscribers  are obligated to make payment on the notes
within 30 days of call.

For Class C capital units subscribed in a private  placement prior to the public
offering, 10% of the offering price was due upon subscription with the remaining
amount  executed  as a  promissory  note due subject to the call of the Board of
Managers.  The Company  received a subscription  for 50 Class C Units,  totaling
$250,000,  from  Ethanol  Products,  LLC. In  accordance  with the  subscription
agreement,  a  nonrefundable  $25,000 was received by the Company and  deposited
into an escrow  account.  The remaining  $225,000 of the  subscription is due in
accordance with the terms of the note executed with the  subscription  agreement
which requires payment within 30 days of a call by the Company.

Upon default on certain  obligations of members  related to capital  units,  the
Company  has the right to redeem the  member's  interest  at 10% of the price at
which the Capital Units were originally  offered for sale by the Company.  If an
investor  defaults on the payment of the purchase price pursuant to a promissory
note  referenced  above,  the Company  will have the right to retain all amounts
paid by the investor as liquidated damages.

The Company must approve all transfers or other dispositions of capital units.

Voting rights are one vote per member for Class A and D capital  units,  and one
vote per unit for Class B and Class C capital  units.  The Board of  Managers is
elected by members,  and members must approve any merger or  consolidation  with
another  business entity,  sale of substantially  all of the Company's assets or
voluntary  dissolution.  All other matters regarding operation and management of
the Company,  including amendment of the Operating Agreement, are decided by the
Board of Managers.

Income and losses are allocated to members based on their respective  percentage
of membership  interest.  Distributions  to members shall be no less than 20% of
net cash from  operations,  as defined in the Operating  Agreement,  if net cash
from  operations is in excess of $500,000 on an annual basis,  provided that any
such  distribution  does not  constitute  or cause a  default  under  any of the
Company's loan documents or credit facilities.

Upon  dissolution  of the  Company,  and  after  the  payment  of all  debts and
liabilities of the Company,  the assets shall be distributed to the unit holders
ratably  in  proportion  to the  credit  balances  in their  respective  capital
accounts for all classes of units.

Subscribers  of Class A and Class B capital  units are required to pay an amount
equal to 10 percent of the purchase price of the capital units  subscribed  for.
These funds are  excluded  from the balance  sheet and held in escrow until such
time the  minimum  offering  is sold.  As of December  31,  2002,  approximately
$665,000 was held in escrow.


Note 5 - ACCUMULATED DEFICIT PER CAPITAL UNIT

For purposes of  calculating  basic  earnings per capital  unit,  capital  units
subscribed  for and issued by the  Company  are  considered  outstanding  on the
effective date of issuance.  In the computation of diluted  earnings per capital
unit,  the total number of Class D units was not included on an as-if  converted
basis  and  Class C units  subscribed  for but not  issued.  As a result  of the
registration  for the offer and sale of Class A and Class B capital  units as of
December 31, 2002, approximately 922 Class A and 408 Class B were subscribed for
but not issued. These dilutive securities are not included in the computation of
outstanding  capital  units  because the  inclusion of these units would have an
antidilutive effect on the computation of earnings per share.

                                        9
(continued on next page)

<PAGE>

NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------


Note 6 - FINANCING ARRANGEMENTS

Line of Credit

On August 26, 2002, the Company  established a $100,000 revolving line of credit
with the First National Bank of Quinter,  Kansas. The outstanding  balances bear
interest at the bank's prime rate plus 2% (6.25% at December 31, 2002). Interest
is due on a quarterly  basis.  All outstanding  balances are due at the maturity
date of August 26, 2003.  The line is secured by certain  assets of the Company.
There was no availability  under the revolving line of credit as of December 31,
2002.

Notes Payable

The Company has an  outstanding  loan of $100,000 from the Kansas  Department of
Commerce and Housing.  The loan is  non-interest  bearing through the later of 7
days  following  the release  from  escrow of  proceeds  of the  offering to the
Company or September 1, 2003.  In the event the proceeds of the offering are not
released from escrow by September 1, 2003, the loan bears interest at 7.75% from
September  1,  2003  through  repayment,  due 7 days  after the  release  of the
offering proceeds from escrow.  In the event escrow is not broken,  repayment is
not required as long as the proceeds were used in  accordance  with the terms of
the  agreement.  Based on  management's  plans and the  terms of the  agreement,
management  estimates  repayment  of the  loan by June  30,  2003.  Based on the
borrowing rates currently available for loans with similar terms and maturities,
the fair value of the note is approximately $96,915 at December 31, 2002.

In February  2002,  the Company  entered into a 5% note payable with Farm Credit
Services  for  $120,000.  The note is due in  annual  installments  of  $27,717,
including  interest,  with the final  installment  due on March 1, 2007,  and is
secured  by land.  As a  portion  of the  proceeds  from the note,  the  Company
received 200 shares of Farm Credit Services stock at a cost of $1,000.

Long-term notes payable maturities are as follows:

                          Year Ending
                          December 31,            Amount
                                                ----------
                             2003               $ 121,700
                             2004                  22,802
                             2005                  23,942
                             2006                  25,139
                             2007                  26,417
                                                ----------
                                                  220,000
                Less current maturities          (121,700)
                                                ----------

                                                $  98,300
                                                ==========

                                       10
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<PAGE>

NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------


Note 7 - INCOME TAXES

The differences between the financial statement basis and tax basis of assets as
of December 31, is as follows:

                                                2002         2001
                                              --------     --------
      Financial statement basis of assets     $521,293     $459,851
      Plus organization and startup cost,
           net of tax amortization             444,101      153,370
                                              --------     --------

           Tax basis of assets                $965,394     $613,221
                                              ========     ========


There were no differences between the financial statement basis and tax basis of
the Company's liabilities.


Note 8 - COMMITMENTS, CONTINGENCIES AND AGREEMENTS

The  Board of  Managers  has  entered  into  various  agreements  regarding  the
formation,  operation and management of the Company.  Significant agreements are
as follows:

Consulting Agreement

The  Company  has entered  into a  consulting  agreement  with  Val-Add  Service
Corporation  (Val-Add).  The  consulting  agreement  provides  for a base fee of
$5,000  per  month  plus  expenses  and a travel  allowance  for  assistance  in
negotiating  and  financing  the ethanol  plant.  This  agreement  also includes
provisions   whereby  Val-Add  is  eligible  for  bonuses  totaling  $60,000  at
completion of duties outlined in the agreement.  The agreement may be terminated
with 10 days notice by either party.

A separate  agreement  with  Val-Add  Service  Corporation  provides for certain
administrative services. The fee for these services is $25 per hour, plus a flat
monthly fee of $50, plus out of pocket expenses. The agreement may be terminated
by  either  party  with  10  days  advance   notice.   The  Company   recognized
approximately  $79,000  and  $56,000  of  consulting  expenses  related  to this
agreement for the periods ended December 31, 2002 and 2001, respectively.

Energy Management Services

The Company has entered into an agreement with U.S.  Energy  Service,  Inc., for
energy management and engineering services.  The agreement expires on August 31,
2003, and is renewable for one year terms unless terminated by either party with
30 days advance  notice.  The  agreement  provides for fees of $2,800 per month,
with  $2,300  of this fee  contingent  upon  completion  of the  initial  public
offering  and  release to the  Company of the  proceeds  of the  offering to the
Company. Fees included in the balance sheet as prepaid engineering costs related
to this  agreement  as of December  31, 2002 and 2001,  were $44,800 and $9,200,
respectively.

Land Option Agreements

The Company  entered  into an option to purchase a tract of land for the greater
of $1,000 per acre or $100,000. The agreement required a payment of $1,000, with
the balance due upon exercise of the option and exchange of the properties.  The
option to purchase expires March 1, 2003.


                                       11
(continued on next page)

<PAGE>

NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

Sales Service Agreement

The Company has entered into an agreement with ICM Marketing, Inc., for the sale
of the bulk feed grade products  (distiller's  grains)  produced from the plant.
The agreement expires October 1, 2004, and is automatically renewed for one year
terms unless either party provides written notice 90 days prior to expiration of
the  agreement.  Under the terms of the  agreement,  ICM  Marketing,  Inc. would
purchase  all  products  at a price  equal  to 98% of the  selling  price,  less
applicable freight. If the product is sold to members of the Company,  the price
is set at 98.5% of the selling price,  less applicable  freight.  ICM Marketing,
Inc. is responsible  for billing and account  servicing of the product sales and
for losses related to non payment unless such non payment relates to substandard
products.

Ground Water Services

The Company  entered into an agreement to secure  rights to ground water for the
ethanol plant.  The agreement  requires a payment of $15,000 for the rights,  of
which $7,500 was payable upon  execution of the  agreement  and the remainder is
payable 7 days prior to  commencement  of the  drilling of the water well by the
Company.  In addition,  the  agreement  requires  payments of $1,050 per quarter
during the first 15 years of the agreement, commencing with pumping of the well,
with the parties renegotiating the quarterly fee after the first 15 years of the
agreement. The agreement has a 20 year term commencing with pumping of the well,
with renewal for  successive  5 year periods  unless  notice of  termination  is
provided 60 days prior to expiration of the agreement.  Minimum payments related
to pumping water from the well are $4,200 per year,  with a total  commitment of
$63,000 during the first 15 years of the agreement.

Management Agreement

The  Company  has  entered  into a letter of  understanding  that  outlines  the
anticipated terms regarding a Management  Placement Agreement with ICM, Inc. for
placement  of a manager  at the  ethanol  plant.  As  outlined  in the letter of
understanding,  the  agreement  will  have  a  term  of two  years,  and  begins
approximately  3 to 6 months prior to plant startup.  ICM will provide the plant
manager and other  technical  assistance  for a fee of $250,000  per year,  plus
certain  out of pocket  expenses,  for a total  minimum  commitment  of $500,000
during the term of the  agreement.  The Company will have the option to hire the
manager  upon  expiration  of the  agreement  at a salary  similar to the salary
provided by ICM, or employ  outside  management  with six months  advance notice
provided to ICM prior to the expiration of the agreement.

Marketing Agreement

The Company  entered  into an  agreement  with  Ethanol  Products,  LLC, for the
marketing of the  Company's  ethanol and certain  administrative  services.  The
agreement has a term of 5 years and commences upon start of ethanol  production,
with a fee of $.01 per gallon of ethanol  produced.  The  agreement is renewable
for 5 year terms unless  notice of  termination  has been  delivered at least 90
days prior to expiration.

Construction Contract

During  April  2002,  the Company  entered  into an  agreement  with ICM for the
construction  of  the  dry  mill  ethanol  plant  at  a  cost  of  approximately
$35,500,000  subject  to  the  terms  of  the  agreement.  The  construction  is
contingent upon, among other things, the Company securing financial  commitments
sufficient  to  fund  the  project  to  the  satisfaction  of  ICM.   Management
anticipates that the financing will be obtained by March 31, 2003.


                                       12
(continued on next page)

<PAGE>

NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------


Note 9 - COMPREHENSIVE INCOME

The  Company  reports  comprehensive  income in  accordance  with SFAS No.  131,
"Reporting Comprehensive Income," which requires the reporting of all changes in
equity during a period,  except those  resulting  from  investment by owners and
distribution  to owners,  in a financial  statement for the period in which they
are   recognized.   This   encompasses   unrealized   gains  and   losses   from
available-for-sale  securities held. There was no comprehensive  income recorded
during the period as there was no change in the fair value of investments.


Note 10 - RELATED PARTY TRANSACTIONS

The Company has reimbursed members of the Board of Managers for certain expenses
incurred by the Company and paid by the members of the Board of Managers  during
the development stage. Expense reimbursements for the periods ended December 31,
2002 and 2001, totaled $144 and $7,955, respectively of which $100 was unpaid at
December 31, 2001.

A principal  owner of Val-Add is also one of the initial  Class D members of the
Company.


Note 11 - SUBSEQUENT EVENTS

In January 2003, the Company received a value-added  agricultural product market
development  grant from the  United  States  Department  of  Agriculture,  Rural
Development.  The grant  provides  matching  funds not to  exceed  $290,610  for
certain allowable expenses during the development of the ethanol plant.

In  January  2003,  the  Company  entered  into a 6% note  payable  with ICM for
$250,000 that is secured by property that was purchased  subsequent to year-end.
This  property  was  previously  under  option  for  purchase  (See Note 8). The
outstanding balance is due on demand.

                                       13
<PAGE>

<TABLE>
<CAPTION>
                                INDEX TO EXHIBITS

------------- ------------------------------------ ----------- -------------------------------------------------------
Exhibit No.   Description                            Filed     Incorporated Herein by Reference
                                                    Herewith
------------- ------------------------------------ ----------- -------------------------------------------------------
<S>           <C>                                  <C>         <C>
3.1(i)        Articles of Organization                         Appendix A to the Issuer's Prospectus filed with the
                                                               Commission pursuant to Rule 424(b)(3) on June 11,
                                                               2002 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
3.1(ii)       Third Amended and Restated                       Exhibit 3 to the Issuer's Form 10-QSB for the quarter
              Operating Agreement                              ended June 30, 2003

------------- ------------------------------------ ----------- -------------------------------------------------------
4.1           Form of Class A Capital Unit                     Exhibit 4.1 to the  Issuer's  Form SB-2 filed with the
              Certificate                                      Commission on December 12, 2001 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
4.2           Form or Class B Capital Unit                     Exhibit 4.2 to the  Issuer's  Form SB-2 filed with the
              Certificate                                      Commission on December 12, 2001 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
4.3           Form of Class C Capital Unit                     Exhibit 4.3 to the  Issuer's  Form SB-2 filed with the
              Certificate                                      Commission on December 12, 2001 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
4.4           Form of Class D Capital Unit                     Exhibit 4.4 to the  Issuer's  Form SB-2 filed with the
              Certificate                                      Commission on December 12, 2001 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
4.5           Form of Subscription Agreement                   Appendix C to the Issuer's  Prospectus  filed with the
              (Classes A and B)                                Commission  pursuant  to Rule  424(b)(3)  on June  11,
                                                               2002 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
4.6           Form of Subscription Agreement                   Exhibit 4.6 to the Issuer's Form SB-2 filed with the
              (Class D)                                        Commission  on December  12,  2001 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
10.1          Credit Agreement with AgCountry                  Exhibit  10.1  to the  Issuer's  Form  10-QSB  for the
              Farm Credit Services, FLCA, dated                quarter ended June 30, 2003
              July 29, 2003

------------- ------------------------------------ ----------- -------------------------------------------------------
10.2          Letter of Understanding with ICM,                Exhibit  10.2  to the  Issuer's  Form  10-QSB  for the
              Inc., dated November 16, 2001                    quarter ended June 30, 2003

------------- ------------------------------------ ----------- -------------------------------------------------------
10.3          Service Agreement with Val-Add                   Exhibit 10.3 to the Issuer's Form SB-2 filed with the
              Service Corporation,  dated                      Commission on December 12, 2001 (File No. 333-74982)
              November 1, 2001
------------- ------------------------------------ ----------- -------------------------------------------------------
10.4          Consulting  Agreement  with  Val-Add             Exhibit 10.4 to the Issuer's Form  SB-2  filed  with
              Service Corporation, dated June                  the Commission on December 12, 2001 (File No. 333-74982)
              27, 2001
------------- ------------------------------------ ----------- -------------------------------------------------------
10.5          DDGS/DWGS Marketing Agreement with               Exhibit 10.5 to the Issuer's  Form SB-2 filed with the
              ICM Marketing, Inc., dated October               Commission on December 12, 2001 (File No. 333-74982)
              1, 2001
------------- ------------------------------------ ----------- -------------------------------------------------------
</TABLE>

                                       26
<PAGE>

<TABLE>
<CAPTION>

------------- ------------------------------------ ----------- -------------------------------------------------------
Exhibit No.   Description                            Filed     Incorporated Herein by Reference
                                                    Herewith
------------- ------------------------------------ ----------- -------------------------------------------------------
<S>           <C>                                  <C>         <C>
10.6          Ethanol  Marketing and Services                  Exhibit 10.6 to the Issuer's Form SB-2 filed with the
              Agreement with Ethanol Products,                 Commission on December 12, 2001 (File No. 333-74982)
              LLC, dated October 31, 2001
------------- ------------------------------------ ----------- -------------------------------------------------------
10.7          U.S. Energy Services Agreement,                  Exhibit 10.7 to the Issuer's  Form SB-2 filed with the
              dated September 12, 2001                         Commission on December 12, 2001 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
10.9          Land Exchange  Agreement,  dated                 Exhibit 10.9 to the Issuer's Form SB-2 filed with the
              November 23, 2001                                Commission  on December 12, 2001 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
10.10         Real Estate Purchase Agreement,                  Exhibit  10.10 to the  Issuer's  Form SB-2  filed with
              dated December 21, 2001                          the Commission on May 1, 2002 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
10.11         Well Construction and Pumping                    Exhibit  10.11 to the  Issuer's  Form SB-2  filed with
              Agreement, dated November 19, 2001               the   Commission   on  December  12,  2001  (File  No.
                                                               333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
10.12         Design/Build Agreement with ICM,                 Exhibit  10.12 to the  Issuer's  Form SB-2  filed with
              Inc., dated April 4, 2002                        the Commission on May 1, 2002 (File No. 333-74982)

------------- ------------------------------------ ----------- -------------------------------------------------------
31.1          Certifications pursuant to Rule         X
              13a-14(a) or 15d-14(a) under the
              Securities Exchange Act of 1934,
              as amended.
------------- ------------------------------------ ----------- -------------------------------------------------------
31.2          Certifications pursuant to Rule         X
              13a-14(a) or 15d-14(a) under the
              Securities Exchange Act of 1934,
              as amended.
------------- ------------------------------------ ----------- -------------------------------------------------------
32.1          Certifications pursuant to 18           X
              U.S.C. Section 1350, as adopted
              pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002
------------- ------------------------------------ ----------- -------------------------------------------------------
</TABLE>

                                       27