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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-KSB
 þ
    
    Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal year ended September 30, 2007
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from  to
 Commission file number 000-51965
 CENTRAL IOWA ENERGY, LLC
  Iowa
    
    71-0988301(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)3426 EAST 28THSTREET N.NEWTON, IOWA
    
    50208(Address of principal executive offices)
    
    (Zip Code)
 (641) 791-1010
  None
  26,672
 þ o
 þ
 o þ
      o þ




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##### 



Table of Contents
 PART I
    
    
    3ITEM 1. DESCRIPTION OF BUSINESS
    
    
    3ITEM 1A. RISK FACTORS
    
    
    26ITEM 2. DESCRIPTION OF PROPERTY
    
    
    37ITEM 3. LEGAL PROCEEDINGS
    
    
    38ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    38PART II
    
    
    38ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    38ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
    
    
    40ITEM 7. FINANCIAL STATEMENTS
    
    
    59ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    72ITEM 8A. CONTROLS AND PROCEDURES
    
    
    72ITEM 8B. OTHER INFORMATION
    
    
    72PART III
    
    
    72ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
    
    
    72ITEM 10. EXECUTIVE COMPENSATION
    
    
    72ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    72ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    72ITEM 13. EXHIBITS
    
    
    73ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    74SIGNATURES
    
    
    75Exhibit 10.21Exhibit 10.22Exhibit 10.23Exhibit 10.24Exhibit 10.25Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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AVAILABLE INFORMATION
  
 PART I
 
 ITEM 1. Description of Business.
 Business Development
    MANAGEMENTS DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS  Plant Management, Feedstock Procurement and Marketing
  3




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MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS  Liquidity and Capital Resources
 MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS -
Liquidity and Capital Resources
   General Demand
      4




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Government Regulation and Federal Biodiesel Supports
  Principal Products and Markets
  Biodiesel
     5




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Primary Co-product  Glycerin
      6




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Biodiesel Markets
  Wholesale Market / Biodiesel Marketers
 Distribution of Principal Products Dependence on One or More Major Customers
 Retail Market
  
    
    additional rail capacity;
    
    additional storage facilities for biodiesel;
    
    increases in truck fleets capable of transporting biodiesel within localized
markets;
    
    expansion in refining and blending facilities to handle biodiesel; and
    
    growth in service stations equipped to handle biodiesel fuels.
  Government/Public Sector
   7




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Distribution of Principal Products
  Sales and Marketing
  
    
    Market analysis of biodiesel supply and demand;
    
    Market access to REGs developed biodiesel distribution channels;
    
    Analysis and audit of biodiesel customers, including for creditworthiness, and
bulk transportation providers;
    
    Marketing specialists and sales representatives to attain and establish sales
opportunities and relationships for our products;
    
    Arrangements for transportation, logistics, and scheduling of biodiesel
shipments;
    
    Arrangements for leased tankers for rail shipments, where advantageous;
    
    Oversight and reconciliation of shipments, invoicing and payments on a weekly
basis; and
    
    Provide invoicing and accounts receivable management for biodiesel shipments.
   Sources and Availability of Raw Materials
 Supply
    8




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U.S. Soybean Oil Prices for Past Ten YearsMarketing Year
    
    Price (cents)1997/98
    
    
    25.801998/99
    
    
    19.901999/00
    
    
    15.602000/01
    
    
    14.152001/02
    
    
    16.462002/03
    
    
    22.042003/04
    
    
    29.072004/05
    
    
    23.012005/06
    
    
    23.412006/07
    
    
    31.022007/08
    
    
    37.5-41.5
    (1)
 U.S. Soybean Oil Pricesfor 2006-2007Marketing YearMonth
    
    Price (cents)October
    
    
    24.80November
    
    
    27.64December
    
    
    27.63January
    
    
    28.00February
    
    
    28.94March
    
    
    29.74April
    
    
    31.06May
    
    
    32.90June
    
    
    34.01July
    
    
    35.74August
    
    
    34.87September
    
    
    36.89October
    
    
    38.10
    (1)
 (1)
    
    Preliminary Price
 Data provided by USDA, Oil Crops Outlook Report, November 14, 2007
    9




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Lard & Edible Tallow Prices for Past Ten YearsEdible TallowMarketing Year
    
    Lard (cents)
    
    
    (cents)1997/98
    
    
    19.46
    
    
    
    20.691998/99
    
    
    14.66
    
    
    
    15.141999/00
    
    
    13.64
    
    
    
    13.212000/01
    
    
    14.61
    
    
    
    13.432001/02
    
    
    13.55
    
    
    
    13.872002/03
    
    
    18.13
    
    
    
    17.802003/04
    
    
    26.13
    
    
    
    22.372004/05
    
    
    21.80
    
    
    
    18.482005/06
    
    
    21.74
    
    
    
    18.162006/07
    
    
    28.43
    
    
    
    27.322007/08(1)
    
    
    34.5-38.5
    
    
    
    33.5-37.5
 Lard & Edible Tallow Prices for 2006-2007Marketing YearEdible TallowMonth
    
    Lard (cents)
    
    
    (cents)October
    
    
    23.55
    
    
    
    19.86November
    
    
    20.78
    
    
    
    21.78December
    
    
    22.58
    
    
    
    23.23January
    
    
    23.00
    
    
    
    23.91February
    
    
    23.82
    
    
    
    23.25March
    
    
    30.75
    
    
    
    24.34April
    
    
    27.71
    
    
    
    26.22May
    
    
    28.60
    
    
    
    30.19June
    
    
    32.64
    
    
    
    34.50July
    
    
    36.00
    
    
    
    35.00August
    
    
    35.77
    
    
    
    32.85September
    
    
    36.00
    
    
    
    32.69October(1)
    
    
    35.09
    
    
    
    33.98
 (1)
    
    Preliminary Prices
 Data provided by USDA, Oil Crops Outlook Report, November 14, 2007
   Type of Fuel
    
    Pour PointSoy-based Biodiesel (B100)
    
    
    30oFTallow-based Biodiesel (B100)
    
    
    61oFNo. 2 Petro Diesel (B0)
    
    
    -30oFB2 Soy Blend with No. 2 Diesel
    
    
    -25oF
   10




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Hedging
 MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS  Commodity
Price Risk Protection
 Pretreatment Costs
   Management and Operational Services Agreement  Feedstock and Chemical Inputs Procurement
  Feedstock Procurement.
  
    
    Provide analysis and audit of feedstock suppliers;
    
    Purchase feedstock at competitive prices meeting specifications and in
quantities adequate to satisfy the production schedule of our plant;
    
    Negotiate for discounts on feedstock, where obtainable;
    
    Arrange for transportation, logistics, and scheduling of feedstock deliveries;
and
    
    Provide analysis and audit of bulk transportation providers.
  11




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Chemical Inputs Procurement
  
    
    Perform due diligence requirements for investigation of suppliers of the
chemical inputs;
    
    Provide analysis and audit of chemical suppliers and bulk transportation
suppliers;
    
    Purchase chemical inputs at competitive prices meeting specifications for use
in our plant;
    
    Negotiate for discounts on the purchase of chemical inputs, where obtainable;
    
    Procure adequate chemical inputs to meet our production schedules; and
    
    Arrange for transportation, logistics, and scheduling services for chemical
input deliveries by suppliers.
  Utilities & Infrastructure
  Electricity.
 Water
 Natural Gas
  Sewer.
  12




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New Products and Services
  Government Regulation and Federal Biodiesel Supports
 Federal Biodiesel Supports
  Renewable Fuels Standard
  th
     13




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Energy Independence and Security Act of 2007
  Small Agri-Biodiesel Producer Tax Credit
  Biodiesel Tax Credits
   14




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The Clean Air Act Amendment
   State Legislation
    
    
    An Iowa RFS starting at 10% in 2009 and increasing to 25% by 2019;
    
    A retail tax credit for biodiesel blends of 3 cents per gallon for retailers whose
diesel sales include 50% or greater biodiesel blends; and
    
    An expanded infrastructure program designed to help retailers and wholesalers offset
the cost of bringing E85 and biodiesel blends to customers.
  15




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Effect of Government Regulation
   Competition
      16




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MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS  Plant Management, Feedstock Procurement and Marketing Dependence on One or a Few Major Customers
     17




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most
  18




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Commercial Biodiesel Production Plants (September 7, 2007)
 
   AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockALAlabama Biodiesel Corporation
    
    Moundville
    
    
    
    
    
    SoyAllied Renewable Energy, LLC
    
    Birmingham
    
    
    15,000,000
    
    
    SoyEagle Biodiesel, Inc.
    
    Bridgeport
    
    
    30,000,000Independence Renewable Energy Corp
    
    Perdue Hill
    
    
    40,000,000
    
    
    Multi FeedstockAR*
    
    FutureFuel Chemical Company
    
    Batesville
    
    
    24,000,000
    
    
    Multi FeedstockPatriot Biofuels
    
    Stuttgart
    
    
    3,000,000
    
    
    Multi FeedstockAZAmereco Arizona, LLC
    
    Arlington
    
    
    15,000,000
    
    
    Multi FeedstockCABay Biodiesel, LLC
    
    San Jose
    
    
    3,000,000
    
    
    SoyBlue Sky Bio-Fuels, Inc.
    
    Oakland
    
    
    
    
    
    Multi FeedstockCentral Valley Biofuels, LLC
    
    Orange Cove
    
    
    
    
    
    Soy, CottonseedEnergy Alternative Solutions, Inc.
    
    Gonzales
    
    
    4,000,000
    
    
    Multi FeedstockEvergreen Biodiesel
    
    Big Oak Flat
    
    
    50,000
    
    
    Recycled Cooking Oil*
    
    Imperial Western Products
    
    Coachella
    
    
    8,000,000
    
    
    Multi FeedstockSo Cal Biofuels, Inc.
    
    Anaheim
    
    
    1,100,000
    
    
    Yellow GreaseYokayo Biofuels, Inc.
    
    Ukiah
    
    
    250,000
    
    
    Recycled Cooking Oil
  19




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockCOAmerican Agri-diesel LLC
    
    Burlington
    
    
    6,000,000
    
    
    SoyBio Energy of America
    
    Denver
    
    
    10,000,000
    
    
    SoyBio Energy of America
    
    Denver
    
    
    8,000,000
    
    
    SoyGreat White Bottling, Inc.
    
    Denver
    
    
    1,300,000
    
    
    SoyCTBio-Pur Inc.
    
    Bethlehem
    
    
    1,000,000
    
    
    Multi FeedstockDEMid-Atlantic Biodiesel
    
    Clayton
    
    
    6,500,000
    
    
    Multi FeedstockFLAgri-Source Fuels, Inc.
    
    Dade City
    
    
    30,000,000
    
    
    Multi Feedstock*
    
    Purada Processing, LLC
    
    Lakeland
    
    
    18,000,000
    
    
    SoyGAECO Solutions, LLC
    
    Chatsworth
    
    
    25,000,000
    
    
    Multi FeedstockFarmers & Truckers Biodiesel of Georgia, LLC
    
    Augusta
    
    
    5,000,000
    
    
    Poultry Fat Plant Oils,
AnimalGeorgia Biofuels Corp.
    
    Loganville
    
    
    1,000,000
    
    
    FatsMiddle Georgia Biofuels
    
    East Dublin
    
    
    2,500,000
    
    
    Multi Feedstock*
    
    Peach State Labs
    
    Rome
    
    
    
    
    
    SoySunshine BioFuels, LLC
    
    Camilla
    
    
    6,000,000
    
    
    SoyUS Biofuels Inc.
    
    Rome
    
    
    10,000,000
    
    
    Multi FeedstockHIPacific Biodiesel
    
    Kahului
    
    
    500,000
    
    
    Recycled Cooking OilPacific Biodiesel
    
    Honolulu
    
    
    1,000,000
    
    
    Recycled Cooking OilIA*
    
    AGP
    
    Sergeant Bluff
    
    
    30,000,000
    
    
    Soy*
    
    Cargill
    
    Iowa Falls
    
    
    37,500,000
    
    
    SoyCentral Iowa Energy, LLC
    
    Newton
    
    
    30,000,000
    
    
    Multi FeedstockClinton County BioEnergy
    
    Clinton
    
    
    10,000,000
    
    
    SoyFreedom Fuels, LLC
    
    Mason City
    
    
    30,000,000
    
    
    Soy*
    
    Renewable Energy Group, Inc.
    
    Ralston
    
    
    12,000,000
    
    
    SoyRiksch BioFuels, LLC
    
    Crawfordsville
    
    
    10,000,000
    
    
    Multi FeedstockSioux Biochemical, Inc.
    
    Sioux Center
    
    
    2,000,000
    
    
    Corn OilSoy Solutions
    
    Milford
    
    
    2,000,000
    
    
    SoyTri-City Energy
    
    Keokuk
    
    
    5,000,000
    
    
    SoyWestern Dubuque Biodiesel
    
    Farley
    
    
    30,000,000
    
    
    Soy*
    
    Western Iowa Energy
    
    Wall Lake
    
    
    30,000,000
    
    
    Multi FeedstockIDBlue Sky Biodiesel, LLC
    
    New Plymouth
    
    
    10,000,000
    
    
    SoyILIncobrasa Industries, Ltd.
    
    Gilman
    
    
    31,000,000
    
    
    SoyMidwest Biodiesel Products, Inc.
    
    South Roxanna
    
    
    30,000,000
    
    
    Soy*
    
    Stephan Company
    
    Millsdale
    
    
    22,000,000
    
    
    SoyINe-biofuels, LLC
    
    Middletown
    
    
    25,000,000
    
    
    SoyEvergreen Renewables
    
    Hammond
    
    
    5,000,000
    
    
    SoyHeartland Biofuel
    
    Flora
    
    
    450,000
    
    
    SoyIntegrity Biofuels
    
    Morristown
    
    
    10,000,000
    
    
    SoyP.E.C. Biofuels IN, Inc.
    
    ElkhartKSHealy Biodiesel, Inc.
    
    Sedgwick
    
    
    1,000,000
    
    
    Recycled Cooking OilKrystal Clean Biofuels
    
    Kansas City
    
    
    
    
    
    Multi FeedstockSalemby Resources
    
    Burden
    
    
    
    
    
    CanolaKY*
    
    Griffin Industries
    
    Butler
    
    
    2,000,000
    
    
    Multi FeedstockUnion County Biodiesel Company, LLC
    
    Stugis
    
    
    5,000,000
    
    
    SoyLAAllegro Biodiesel Corporation
    
    Pollock
    
    
    12,000,000
    
    
    SoyMAMPB Bioenergy, LLC
    
    West Bridgewater
    
    
    500,000
    
    
    Recycled Cooking Oil
  20




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockMDMaryland Biodiesel
    
    Berlin
    
    
    1,000,000
    
    
    SoyMEBio Renewable Fuels
    
    Fairfield
    
    
    10,000,000
    
    
    Yellow GreaseMIAg Solutions, Inc.
    
    Gladstone
    
    
    5,000,000
    
    
    Multi FeedstockMichigan Biodiesel, LLC
    
    Bangor
    
    
    10,000,000
    
    
    SoyNextDiesel
    
    Adrian
    
    
    20,000,000
    
    
    Multi FeedstockMN*
    
    FUMPA BioFuels
    
    Redwood Falls
    
    
    3,000,000
    
    
    Multi FeedstockGreen Range Renewable Energy
    
    Ironton
    
    
    150,000
    
    
    Recycled Cooking OilMidwest Renewable, LLC
    
    Menahga
    
    
    4,000,000
    
    
    Soy*
    
    Minnesota Soybean Processors
    
    Brewster
    
    
    30,000,000
    
    
    Soy*
    
    Soymor
    
    Albert Lee
    
    
    30,000,000
    
    
    SoyMOGlobal Fuels, LLC
    
    Dexter
    
    
    3,000,000
    
    
    Multi FeedstockHigh Hill Biodiesel, Inc.
    
    High Hill
    
    
    5,000,000
    
    
    Multi FeedstockMid America Biofuels, LLC
    
    Mexico
    
    
    30,000,000
    
    
    SoyMissouri Better Bean
    
    Bunceton
    
    
    15,000,000
    
    
    Multi FeedstockMissouri Bio-Products, Inc.
    
    Bethel
    
    
    2,000,000
    
    
    Multi FeedstockNatural Biodiesel Plant, LLC
    
    Hayti
    
    
    5,000,000
    
    
    Multi FeedstockMSCFC Transportation, Inc.
    
    Columbus
    
    
    1,500,000
    
    
    Multi FeedstockChannel Chemical Corporation
    
    Gulfport
    
    
    5,000,000
    
    
    SoyDelta Biofuels, Inc.
    
    Natchez
    
    
    80,000,000
    
    
    Multi FeedstockNorth Mississippi Biodiesel
    
    New Albany
    
    
    7,000,000
    
    
    SoyNCBlue Ridge Biofuels
    
    Asheville
    
    
    1,000,000
    
    
    Multi FeedstockEvans Environmental Energies, Inc.
    
    Wilson
    
    
    6,000,000Foothills Bio-Energies, LLC
    
    Lenoir
    
    
    5,000,000
    
    
    Multi FeedstockGortman Biofuel, LLC
    
    Winston Salem
    
    
    100,000North Carolina BioFuels, LLC
    
    Seaboard
    
    
    1,000,000
    
    
    SoyPiedmont Biofuels
    
    Pittsboro
    
    
    4,000,000
    
    
    Multi FeedstockSmoky Mountain Biofuels, Inc.
    
    DilsboroNDADM
    
    Velva
    
    
    85,000,000
    
    
    CanolaNEHorizon Biofuels, Inc.
    
    Arlington
    
    
    500,000
    
    
    Animal FatPioneer Biodiesel, LLC
    
    Gering
    
    
    2,000,000
    
    
    SoyWyobraska Biodiesel, LLC
    
    Gering
    
    
    10,000,000
    
    
    SoyNJEastern Biofuels, LLC
    
    Newark
    
    
    24,000,000
    
    
    SoyFuel Bio One, LLC
    
    Elizabeth
    
    
    50,000,000
    
    
    Multi FeedstockNMRio Valley Biofuels, LLC
    
    Anthony
    
    
    
    
    
    Multi FeedstockNVBently Biofuels
    
    Minden
    
    
    1,000,000
    
    
    Multi FeedstockBiodiesel of Las Vegas
    
    Las Vegas
    
    
    5,000,000
    
    
    Multi FeedstockNYTrap Grease, RecycleNorth American Biofuels Company, Inc.
    
    Bohemia
    
    
    2,500,000
    
    
    Cooking Oil SoySheppard Grain, Inc.
    
    Phelps
    
    
    
    
    
    SoyOHAgrifuels, LLC
    
    Breman
    
    
    3,000,000
    
    
    SoyAmerican Ag Fuels, LLC
    
    Definance
    
    
    1,500,000
    
    
    Multi FeedstockCenter Alternative Energy Company
    
    Cleveland
    
    
    5,000,000
    
    
    SoyJatrodiesel, Inc.
    
    Miamisburg
    
    
    5,000,000
    
    
    Multi FeedstockPEC Biofuels
    
    Hicksville
    
    
    7,500,000
    
    
    Soy*
    
    Peter Cremer
    
    Cincinnati
    
    
    30,000,000
    
    
    SoyOKEarth Biofuels, Inc.
    
    Durant
    
    
    10,000,000
    
    
    Multi Feedstock
  21




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockGreen Country Biodiesel, Inc.
    
    Chelsea
    
    
    2,500,000
    
    
    SoyORGreen Fuels of Oregon, Inc.
    
    Klamath Falls
    
    
    1,000,000
    
    
    CanolaSeQuential-Pacific Biodiesel, LLC
    
    Salem
    
    
    1,000,000
    
    
    Multi FeedstockPABiodiesel of Pennsylvania, Inc.
    
    White Deer
    
    
    1,500,000
    
    
    Soybean OilKeystone BioFuels, Inc.
    
    Shiremanstown
    
    
    
    
    
    SoyMiddletown Biofuels, LLC
    
    Middletown
    
    
    2,000,000
    
    
    SoySoy Energy, Inc.
    
    New Oxford
    
    
    1,500,000
    
    
    SoyUnited Biofuels, Inc.
    
    York
    
    
    1,500,000
    
    
    SoyUnited Oil Company
    
    Pittsburgh
    
    
    5,000,000
    
    
    Multi FeedstockRIMason Biodiesel, LLC
    
    Westerly
    
    
    2,500,000
    
    
    SoySC*
    
    Carolina Biofuels, LLC
    
    Greenville
    
    
    30,000,000
    
    
    SoySoutheast BioDiesel, LLC
    
    Charleston
    
    
    6,000,000
    
    
    Multi FeedstockSDMidwest BioDiesel Producers, LLC
    
    Alexandria
    
    
    7,000,000
    
    
    SoyTNAgri-Energy, Inc.
    
    Louisburg
    
    
    5,000,000
    
    
    SoyBIG Biodiesel, LLC
    
    Pulaski
    
    
    250,000
    
    
    SoyBiofuel of Tennessee, LLC
    
    Decaturville
    
    
    10,000,000
    
    
    SoyBlue Sky Biodiesel, Inc.
    
    Wartburg
    
    
    3,000,000
    
    
    Multi FeedstockMemphis Biofuels, LLC
    
    Memphis
    
    
    50,000,000
    
    
    Multi FeedstockMilagro Biofuels of Memphis
    
    Memphis
    
    
    5,000,000
    
    
    SoyNuOil
    
    Counce
    
    
    1,500,000
    
    
    SoyTN Bio Energy
    
    Summitville
    
    
    
    
    
    SoyTXAgribiofuels, LLC
    
    Dayton
    
    
    12,000,000
    
    
    Cottonseed, SoyAgriMax Fuels, LLC
    
    Channelview
    
    
    3,000,000
    
    
    SoyBiodiesel Industries of Greater Dallas-Fort Worth
    
    Denton
    
    
    3,000,000
    
    
    Multi FeedstockBioSelect Fuels (GBBLP)
    
    Galveston
    
    
    21,000,000
    
    
    Multi FeedstockCottonseed, Soy,Brownfield Biodiesel, LLC
    
    Ralls
    
    
    2,000,000
    
    
    CanolaCentral Texas Biofuels
    
    Giddings
    
    
    1,500,000
    
    
    SoyECO Friendly Products, Inc.
    
    Channelview
    
    
    3,000,000
    
    
    Multi FeedstockGeoGreen Fuels
    
    Gonzales
    
    
    3,000,000
    
    
    Multi FeedstockMulti FeedstockGreen Earth Fuels of Houston, LLC
    
    Galena Park
    
    
    86,000,000
    
    
    Cottonseed, Animal*
    
    Huish Detergents
    
    Pasadena
    
    
    15,000,000
    
    
    Palm*
    
    Johann Haltermann Ltd
    
    Houston
    
    
    20,000,000
    
    
    SoyKemlink Energy, Inc.
    
    Pasadena
    
    
    2,500,000
    
    
    Multi FeedstockMomentum Biofuels, Inc.
    
    Pasadena
    
    
    20,000,000
    
    
    Soy, tallowNew Fuel Company
    
    Dallas
    
    
    250,000
    
    
    Multi FeedstockNMM, Ltd
    
    Channelview
    
    
    1,000,000
    
    
    Multi Feedstock*
    
    Organic Fuels, LLC
    
    Galena Park
    
    
    30,000,000
    
    
    Multi FeedstockPacific Biodiesel Texas
    
    Hillsboro
    
    
    2,500,000
    
    
    Multi FeedstockSAFE Renewable Corp.
    
    Conroe
    
    
    30,000,000
    
    
    SoySmithfield Bioenergy LLC
    
    Cleburne
    
    
    12,000,000
    
    
    Multi FeedstockSMS Envirofuels
    
    Poteet
    
    
    6,000,000
    
    
    SoyValco Bioenergy
    
    Harlingen
    
    
    3,000,000
    
    
    CottonseedUTBetter Biodiesel
    
    Spanish Fork
    
    
    9,000,000
    
    
    Multi FeedstockDenali Industries, LLC
    
    American Fork
    
    
    3,800,000
    
    
    Multi FeedstockVACheasapeake Custom Chemical
    
    Ridgeway
    
    
    5,000,000
    
    
    SoyRECO Biodiesel, LLC
    
    Richmond
    
    
    10,000,000
    
    
    SoyRenroh Environmental Company
    
    South Boston
    
    
    80,000Virginia Biodiesel Refinery
    
    New Kent
    
    
    7,000,000
    
    
    SoyWACentral Washington Biodiesel, LLC
    
    Ellensburg
    
    
    
    
    
    Multi Feedstock
  22




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##### Table of Contents



AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockGen-X Energy Group, Inc.
    
    Burbank
    
    
    15,000,000
    
    
    Multi FeedstockImperium Grays Harbor
    
    Hoquiam
    
    
    100,000,000
    
    
    Multi FeedstockOlympic Biofuels, LLC
    
    Poulsbo
    
    
    200,000
    
    
    Multi Feedstock*
    
    Seattle Biodiesel
    
    Seattle
    
    
    5,000,000
    
    
    Multi FeedstockStandard Biodiesel USA Inc.
    
    Arlington
    
    
    5,000,000
    
    
    Waste Vegetable OilWIRenewable Alternatives
    
    Manitowoc
    
    
    
    
    
    SoySanimax Energy Inc.
    
    Deforest
    
    
    20,000,000
    
    
    Multi FeedstockWalsh Bio Diesel, LLC
    
    Mauston
    
    
    5,000,000
    
    
    SoyWYBlue Sky Biodiesel, LLC
    
    Cheyenne
    
    
    5,000,000
    
    
    Soy
 
 *
    
    Denotes BQ-9000 Accredited Producers(1)
    
    Annual Production Capacity only refers to the reported maximum production capability of the
facility. It does not represent how many gallons of biodiesel were actually produced at each
plant.(2)
    
    Includes the annual production capacity of plants which chose not to list their production.   Competition from Other Fuel Sources
 Biodiesel Competition
   23




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Glycerin Competition
   24




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Research and Development
  Dependence on One or a Few Major Customers
   DESCRIPTION OF BUSINESS  Competition RISK FACTORS DESCRIPTION OF BUSINESS 
Distribution of Principal Products MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
 Plant Management, Feedstock Procurement and Marketing
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Costs and Effects of Compliance with Environmental Laws
 MANAGEMENTS DISCUSSION
AND ANALYSIS OR PLAN OF OPERATIONS  Permitting
    Employees
 MANAGEMENTS DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS  Employees
 
 ITEM 1A. RISK FACTORS.
 You should carefully read and consider the risks and uncertainties below and the other information
contained in this report. The risks and uncertainties described below are not the only ones we may
face. The following risks, together with additional risks and uncertainties not currently known to
us or that we currently deem immaterial could impair our financial condition and results of
operations.
 Risks Related to Our Business
 We have a limited operating history.
  26




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
    
    effectively manage our business and operations;
    
    recruit and retain key personnel; and
    
    develop new products that complement our existing business.
  We have a history of losses and may not ever operate profitably
 Our business is not diversified.
 Our business is sensitive to demand for biodiesel and glycerin.
 Our business is sensitive to feedstock prices. Changes in the prices and availability of our
feedstock may hinder our ability to generate revenue.
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We are in competition with REG, our design-builder and manager, which could place us at a
competitive disadvantage and cause a conflict of interest for our manager.
 Increases in the price of natural gas could reduce our profitability.
  We have limited experience in the biodiesel industry, which increases the risk of our
inability to operate the biodiesel plant.
 Our exclusive reliance on REG, Inc. to manage our plant, procure our inputs and market our
products could damage our profitability if REG, Inc. fails to perform its obligations under the
agreement.
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We engage in hedging transactions which involve risks that can harm our business.
   Risks Related to Operation of the Biodiesel Plant
 We depend on key suppliers, whose failure to perform could force us to abandon business,
hinder our ability to operate profitably or decrease the value of our units.
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Technological advances could significantly decrease the cost of producing biodiesel or result
in the production of higher-quality biodiesel, and if we are unable to adopt or incorporate
technological advances into our operations, our plant could become uncompetitive or obsolete.
 Risks Related to Biodiesel Industry
 If demand for biodiesel fails to grow at the same rate as planned supply, the excess
production capacity will adversely impact our financial condition.
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Excess production of glycerin, a co-product of the biodiesel production process, may cause the
price of glycerin to decline, thereby adversely affecting our ability to generate revenue from the
sale of glycerin.
 The biodiesel manufacturing industry is a feedstock limited industry. As more plants are
developed and go into production there may not be an adequate supply of feedstock to supply the
demands of the industry, which could threaten the viability of our plant.
 The biodiesel industry is becoming increasingly competitive and we compete with some larger,
better financed entities which could impact our ability to operate profitably.
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As the production of biodiesel fuel increases there may not be an adequate supply of railroad
tank cars or trucks to distribute the biodiesel fuel produced by our plant.
 Risks Related to Biodiesel Production
 The decreasing availability and increasing price of soybean oil may hinder our ability to
profitably produce biodiesel and may result in plant shut downs and decreased revenues.
 Declines in the prices of biodiesel and its co-product will have a significant negative
impact on our financial performance.
   Our business is sensitive to feedstock costs and the availability of adequate supplies of
feedstock. Changes in the cost and availability of our feedstock may hinder our ability to generate
revenue and reduce the value of our units.
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If we are forced to temporarily cease operating our biodiesel plant for any reason, we might
not be able to meet our current liabilities or our losses may be increased.
 We are at a disadvantage in marketing our glycerin because our plant will not produce
pharmaceutical grade glycerin, thereby decreasing the market for the glycerin we produce.
 Competition from other sources of fuel may decrease the demand for our biodiesel.
 Asian soybean rust and other plant diseases may decrease our ability to obtain a sufficient
feedstock supply.
 Concerns about fuel quality may impact our ability to successfully market our biodiesel.
 Cold weather may cause biodiesel to gel, which could have an adverse impact on our ability to
successfully market our biodiesel.
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Our reliance upon third parties for feedstock supply may hinder our ability to profitably
produce our biodiesel.
 Automobile manufacturers and other industry groups have expressed reservations regarding the
use of biodiesel, which could negatively impact our ability to market our biodiesel.
  Competition from other diesel fuel lubricity additives for ultra low sulfur diesel may be a
less expensive alternative to our biodiesel, which would cause us to lose market share and
adversely affect our ability to generate revenues.
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Risks Related to Our Financing Plan
 The loans agreements under which we obtained financing for the construction of our biodiesel
plant contain restrictive covenants.
 MANAGEMENTS DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS  Liquidity and Capital Resources
 We may be unable to raise additional capital in the event our funds from operations and our
credit facilities are insufficient to fund our operations for the next twelve months.
  Our auditor has raised doubts about our ability to continue as a going concern and if we are
unable to continue our business, our units may have little or no value.
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Our auditors doubts about our ability to continue as a going concern may make it difficult to
raise any desired capital in the future.
  Risks Related to Regulation and Governmental Action
 Loss of or ineligibility for favorable tax benefits for biodiesel production could hinder our
ability to operate at a profit and reduce the value of our units.
 A change in environmental regulations or violations thereof could be expensive and increase
our losses.
 Risks Related to Conflicts of Interest
 We may have conflicts of interest with REG, which may cause difficulty in enforcing claims
against REG.
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Risks Related to Tax Issues in a Limited Liability Company
 We expect to be taxed as a partnership, however, if we are taxed as a corporation we would be
subject to corporate level taxes which would decrease our net income and decrease the amount of
cash available to distribute to our members.
 Members may be allocated a share of our taxable income that exceeds any cash distributions
received, therefore members may have to pay this tax liability using their personal funds.
 If we are audited by the IRS resulting in adjustments to our tax returns, this could cause the
IRS to audit members tax returns, which could lead to additional tax liability for our members.
 We do not anticipate declaring distributions to members in the foreseeable future.
 
 ITEM 2. DESCRIPTION OF PROPERTY.
 DESCRIPTION OF BUSINESS  Distribution of Principal Products
  
    
    Principal office building
    
    Processing building
    
    Pretreatment building
    
    Loading/receiving building
    
    Storage warehouse
    
    Storage tank farm
 MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS -
Liquidity and Capital Resources.
  37




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ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY, RELATED MEMBER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF
EQUITY SECURITIES.
 Market Information
  Unit Holders
  Distributions
 MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS  Liquidity and Capital Resources.
  38




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Equity Compensation Plans
  Sale of Unregistered Securities
         39




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Repurchases of Equity Securities
  
 ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
 Cautionary Statements Regarding Forward Looking Statements
 RISK FACTORS
 
    
    Competition with other manufacturers in the biodiesel industry;
 
    
    Overcapacity within the biodiesel industry;
 
    
    Decrease in the demand for biodiesel;
 
    
    Actual biodiesel and glycerin production varying from expectations;
 
    
    Availability and cost of products and raw materials, particularly soybean oil, animal fats, and methanol;
 
    
    Changes in the price and market for biodiesel and its co-products, such as glycerin;
 
    
    Our ability to market and our reliance on third parties to market our products;
 
    
    Changes in or elimination of governmental laws, tariffs, trade or other controls or enforcement
practices such as:
 
    
    national, state or local energy policy;
    
    federal biodiesel tax incentives;
    
    legislation establishing a renewable fuel standard or other legislation mandating the use of
biodiesel or other lubricity additives; or
    
    environmental laws and regulations that apply to our plant operations and their enforcement;
 
    
    Total U.S. consumption of diesel fuel;
 
    
    Fluctuations in petroleum prices;
 
    
    Changes in plant production capacity or technical difficulties in operating the plant;
  40




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
    
    Changes in our business strategy, capital improvements or development plans;
 
    
    Results of our hedging strategies;
 
    
    Changes in interest rates or the availability of credit;
 
    
    Our ability to generate free cash flow to invest in our business and service our debt;
 
    
    Our liability resulting from litigation;
 
    
    Our ability to retain key employees and maintain labor relations;
 
    
    Changes and advances in biodiesel production technology;
 
    
    Competition from alternative fuels and alternative fuel additives;
 
    
    Failure to comply with loan covenants contained in our financing agreements;
 
    
    Our ability to raise additional equity capital proceeds; and
 
    
    Other factors described elsewhere in this report.
  Overview
     41




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Plant Management, Feedstock Procurement and Marketing DESCRIPTION OF BUSINESS -
Distribution of Principal Products
 Liquidity and Capital Resources
 Liquidity and Capital Resources
    42




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Plan of Operations for the Next 12 Months
  Plant Operations
    43




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Plant Management, Feedstock Procurement and Marketing
  Feedstock Procurement
 
    
    Provide analysis and audit of feedstock suppliers;
    
    Purchase feedstocks at competitive prices meeting specifications and in
quantities adequate to satisfy the production schedule of our plant;
    
    Negotiate for discounts on feedstocks, where obtainable;
    
    Arrange for transportation, logistics, and scheduling of feedstock deliveries;
and
    
    Provide analysis and audit of bulk transportation providers.
 Chemical Inputs Procurement
 
    
    Perform due diligence requirements for investigation of suppliers of the
chemical inputs;
    
    Provide analysis and audit of chemical suppliers and bulk transportation
suppliers;
    
    Purchase chemical inputs at competitive prices meeting specifications for use
in our plant;
    
    Negotiate for discounts on the purchase of chemical inputs, where obtainable;
    
    Procure adequate chemical inputs to meet our production schedules; and
    
    Arrange for transportation, logistics, and scheduling services for chemical
input deliveries by suppliers.
 
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Sales and Marketing
 
    
    Market analysis of biodiesel supply and demand;
    
    Market access to REGs developed biodiesel distribution channels;
    
    Analysis and audit of biodiesel customers, including for creditworthiness, and
bulk transportation providers;
    
    Marketing specialists and sales representatives to attain and establish sales
opportunities and relationships for our products;
    
    Arrangements for transportation, logistics, and scheduling of biodiesel
shipments;
    
    Arrangements for leased tankers for rail shipments, where advantageous;
    
    Oversight and reconciliation of shipments, invoicing and payments on a weekly
basis; and
    
    Provide invoicing and accounts receivable management for biodiesel shipments.
 Administrative Services
 
    
    Accounting;
    
    Human Resources;
    
    Information Technology;
    
    Payroll; and
    
    Communications.
   
    
    Utilize his or her ongoing best efforts to successfully and profitably
manage the plant in our best interests;
    
    Develop an annual budget for presentation to and approval of our board;
    
    Attend meetings of our board and provide information upon its request;
    
    Insure that all raw product costs are minimized and that all finished
product revenues are maximized;
    
    Work with us to formulate our mission and goals;
    
    Manage the plants resources to efficiently achieve such mission and goals;
    
    Manage our duties and rights under agreements with third parties relating to
the plant;
    
    Assist with regulatory affairs monitoring and compliance;
    
    Hire, terminate and replace plant personnel as necessary and in all cases in
accordance with the policies of our board;
    
    Management of governmental relations, including the United States Department
of Agricultures biodiesel programs; and
    
    Perform such other duties as may be agreed upon.
   
    
    Plan and schedule biodiesel production to meet our needs and marketing
goals;
    
    Monitor and improve quality control;
    
    Oversee facility and equipment maintenance;
    
    Assist with budgeting and the monitoring of labor and other expenses in the
operation;
    
    Implement processing changes and new technologies as they evolve, and plan
for new projects relating to biodiesel production; and
    
    Perform such other duties as may be agreed upon.
  45




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
    
    Monthly Fee. For the first month in which our biodiesel is sold, which was
April 2007, and for six months thereafter (the initial period), we paid a monthly fee of
5.7 cents per gallon of biodiesel sold by REG. For the first month after the initial
period we paid 5.7 cents per gallon for any biodiesel that was produced but not sold
during the initial period in addition to 5.7 cents per gallon of biodiesel produced in the
first month following the initial period. Thereafter, we pay a monthly fee of 5.7 cents
per gallon of biodiesel produced at our plant.
    
    Net Income Bonus. We will pay an annual bonus to REG based on the amount of
our annual net income, as that term is defined in the agreement. REGs bonus may range
from 0% to 6% of our annual net income, depending on our performance, but will not exceed
the amount of $1,000,000.
  DESCRIPTION OF BUSINESS  Dependence on One or More Major Customers RISK FACTORS
 Energy Management
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Operating Budget and Financing of Plant Operations
  Operating Costs:Feedstock Costs
    
    $
    68,861,000Chemicals
    
    
    6,880,000Utilities
    
    
    973,000Other Production Costs
    
    
    3,399,000General and Administrative
    
    
    1,300,000Total operating costs
    
    $
    81,413,000
 RISK FACTORS Trends
and Uncertainties Impacting the Biodiesel Industry and Our Future Operations
 Liquidity and
Capital Resources
 Trends and Uncertainties Impacting the Biodiesel Industry and Our Future Operations
      47




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Vegetable Oil Prices
October 2004- October 2007
 
      48




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Cumulative Consumption of Soybean Oil for Biodiesel
 
      49




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DESCRIPTION OF BUSINESS  Government Regulation and Federal Biodiesel Supports
  
    
    additional rail capacity and rail cars;
    
    additional storage facilities for biodiesel;
    
    increases in truck fleets capable of transporting biodiesel within localized markets;
    
    expansion in refining and blending facilities to handle biodiesel; and
    
    growth in service stations equipped to handle biodiesel fuels.
  Commodity Price Risk Protection
    50




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Permitting and Regulatory Activities
 DESCRIPTION OF BUSINESS  Costs and Effects of Compliance
with Environmental Laws.
 Employees
  JOB TITLE
    
    NUMBER EMPLOYEESProcess Operator
    
    
    16Accounting Manager
    
    
    1Mechanic
    
    
    1Electrician
    
    
    1Administrative Assistant
    
    
    1Shipping/Receiving
    
    
    3Operations Supervisor
    
    
    1Quality Assurance Manager
    
    
    1Laboratory Technician
    
    
    1Accounting Assistant
    
    
    1Total
    
    
    27
   51




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
    
    Utilize his or her ongoing best efforts to successfully and profitably manage
the plant in our best interests;
    
    Develop an annual budget for presentation to and approval of our board;
    
    Attend meetings of our board and provide information upon its request;
    
    Insure that all raw product costs are minimized and that all finished product
revenues are maximized;
    
    Work with us to formulate our mission and goals;
    
    Manage the plants resources to efficiently achieve such mission and goals;
    
    Manage our duties and rights under agreements with third parties relating to
the plant;
    
    Assist with regulatory affairs monitoring and compliance;
    
    Hire, terminate and replace plant personnel as necessary and in all cases in
accordance with the policies of our board;
    
    Management of governmental relations, including USDAs biodiesel programs; and
    
    Such other duties as may be agreed upon.
  
    
    Planning and scheduling biodiesel production to meet our needs and marketing
goals;
    
    Monitor and improve quality control;
    
    Oversee facility and equipment maintenance;
    
    Assist with budgeting and the monitoring of labor and other expenses in the
operation;
    
    Implement processing changes and new technologies as they evolve, and plan for
new projects relating to biodiesel production; and
    
    Such other duties as may be agreed upon.
   52




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Liquidity and Capital Resources
  Sources of Funds
  Percent ofSource of Funds
    
    Amount
    
    
    TotalMember Equity, Intrastate Offering ($1,000 per unit)
    
    $
    19,154,000
    
    
    
    37.88
    %Member Equity, Seed Capital ($500 per unit)
    
    
    2,390,000
    
    
    
    4.73Member Equity, Final Construction Loan Payment ($1,000
per unit)
    
    
    1,000,000
    
    
    
    1.98Member Equity, Exercised Director Options ($500 per unit)
    
    
    600,000
    
    
    
    1.19Construction Loan
    
    
    27,000,000
    
    
    
    53.41Low/Zero Interest Loans
    
    
    400,000
    
    
    
    0.79Grant Income
    
    
    10,000
    
    
    
    0.02Total Sources of Funds
    
    $
    50,554,000
    (1)
    
    
    100
    %
 
 (1)
    
    This amount excludes non-cash equity-based compensation recognized by the Company in
connection with the units paid to The Biodiesel Group as compensation under a consulting
agreement with the Company.
 Equity Financing
  Debt Financing
   53




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th th
  th th
  55




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Government Programs and Grants
    Additional Capital
  Distribution to Unit Holders
   56




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Results of Operations
 Financial Summary and Analysis of the Fiscal Year Ended September 30, 2007
  Fiscal Year EndedSeptember 30, 2007Income Statement Data
    
    Amount

    
    PercentRevenues
    
    $
    36,052,541
    
    
    
    100.00
    %Cost of Sales
    
    $
    36,528,293
    
    
    
    101.32
    %Gross (Loss)
    
    $
    (475,752
    )
    
    
    (1.32
    )%Operating Expenses
    
    $
    1,487,522
    
    
    
    4.13
    %Operating (Loss)
    
    $
    (1,963,274
    )
    
    
    (5.45
    )%Other Income (Expense)
    
    $
    (1,083,096
    )
    
    
    (3.00
    )%Net (Loss)
    
    $
    (3,046,370
    )
    
    
    (8.45
    )%
  Revenues
  Cost of Goods Sold
 MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS  Commodity
Risk Protection
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Operating Expenses
  Other Income (Expenses)
  Critical Accounting Estimates
  Revenue Recognition
  Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and
Hedging Activities
 Off-Balance Sheet Arrangements
   58




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ITEM 7. FINANCIAL STATEMENTS.
  
 Report of Independent Registered Public Accounting Firm
 
     Davenport, Iowa   59




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CENTRAL
IOWA ENERGY, LLC
 September 30,
    
    
    September 30,2007
    
    
    2006ASSETSCurrent AssetsCash and equivalents
    
    $
    2,268,725
    
    
    $
    Margin deposits
    
    
    326,072
    
    
    
    Trade accounts receivable  related party
    
    
    1,159,184
    
    
    
    Federal incentives receivable
    
    
    1,049,262
    
    
    
    Sales tax refund receivable
    
    
    461,517
    
    
    
    Prepaid expenses
    
    
    105,851
    
    
    
    588Inventories
    
    
    5,896,934
    
    
    
    Total current assets
    
    
    11,267,545
    
    
    
    588Property and EquipmentLand and improvements
    
    
    7,680,111
    
    
    
    249,742Office equipment
    
    
    40,603
    
    
    
    5,787Office building
    
    
    629,300
    
    
    
    Plant and process equipment
    
    
    32,563,620
    
    
    
    Construction in process  related party
    
    
    
    
    
    
    26,429,77440,913,634
    
    
    
    26,685,303Less accumulated depreciation
    
    
    1,248,326
    
    
    
    1,299Net property and equipment
    
    
    39,665,308
    
    
    
    26,684,004Other AssetsFinancing costs, net of amortization
    
    
    383,755
    
    
    
    368,878Total Assets
    
    $
    51,316,608
    
    
    $
    27,053,470LIABILITIES AND MEMBERS EQUITYCurrent LiabilitiesCurrent maturities of long-term debt
    
    $
    26,641,539
    
    
    $
    Revolving line of credit
    
    
    1,600,000
    
    
    
    Checks drawn in excess of bank balance
    
    
    
    
    
    
    216,613Derivative Instruments
    
    
    719,482
    
    
    
    Accounts payable
    
    
    1,096,370
    
    
    
    91,182Accounts payable  related party
    
    
    365,125Membership payable
    
    
    
    
    
    
    30,000Construction payable  related party, including retainage of $1,302,521
    
    
    
    
    
    
    5,421,743Accrued interest payable
    
    
    204,092
    
    
    
    Other accrued expenses
    
    
    87,438
    
    
    
    Total current liabilities
    
    
    30,714,046
    
    
    
    5,759,538Long-Term Debt, less current maturities
    
    
    
    
    
    
    Deferred Grant Financing
    
    
    745,000
    
    
    
    Commitments and ContingenciesMembers EquityMember contributions, net of costs related to capital contributions,
26,672 and 24,434 units outstanding at September 2007 and 2006, respectively
    
    
    23,849,120
    
    
    
    22,216,120Membership units earned but not issued
    
    
    
    
    
    
    23,000Accumulated (deficit)
    
    
    (3,991,558
    )
    
    
    (945,188
    )Total members equity
    
    
    19,857,562
    
    
    
    21,293,932Total Liabilities and Members Equity
    
    $
    51,316,608
    
    
    $
    27,053,470
   60




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CENTRAL IOWA ENERGY, LLC
 Year Ended
    
    
    Year EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006RevenuesSales to related party
    
    $
    31,567,599
    
    
    $
    Federal incentives
    
    
    4,484,942
    
    
    
    36,052,541Cost of Goods Sold
    
    
    36,528,293
    
    
    
    Gross (Loss)
    
    
    (475,752
    )
    
    
    Operating ExpensesProfessional fees
    
    
    197,723
    
    
    
    180,167Project coordinator
    
    
    
    
    
    
    50,200General and administrative
    
    
    1,289,799
    
    
    
    73,769Equity based compensation
    
    
    
    
    
    
    600,000Total
    
    
    1,487,522
    
    
    
    904,136Operating (Loss)
    
    
    (1,963,274
    )
    
    
    (904,136
    )Other Income (Expense)Grant and other income
    
    
    
    
    
    
    10,100Interest income
    
    
    59,964
    
    
    
    403,314Interest expense
    
    
    (1,143,060
    )
    
    
    Total
    
    
    (1,083,096
    )
    
    
    413,414Net (Loss)
    
    $
    (3,046,370
    )
    
    $
    (490,722
    )Weighted Average Units Outstanding
    
    
    25,794
    
    
    
    16,825Net (Loss) Per Unit  Basic and Diluted
    
    $
    (118.10
    )
    
    $
    (29.17
    )
   61




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##### Table of Contents



CENTRAL
IOWA ENERGY, LLC
 MembershipMember
    
    
    Units Earned But
    
    
    Retained
    
    
    Total MembersMembers Units
    
    
    Contributions
    
    
    Not Issued
    
    
    (Deficit)
    
    
    EquityBalance  September 30, 2005
    
    
    760
    
    
    $
    380,000
    
    
    $
    2,000
    
    
    $
    (454,466
    )
    
    $
    (72,466
    )Member contributions, net of costs of $177,880
    
    
    23,674
    
    
    
    21,236,120
    
    
    
    
    
    
    
    
    
    
    
    21,236,120Members units earned but not issued
    
    
    
    
    
    
    
    
    
    
    21,000
    
    
    
    
    
    
    
    21,000Equity based compensation
    
    
    
    
    
    
    600,000
    
    
    
    
    
    
    
    
    
    
    
    600,000Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (490,722
    )
    
    
    (490,722
    )Balance  September 30, 2006
    
    
    24,434
    
    
    
    22,216,120
    
    
    
    23,000
    
    
    
    (945,188
    )
    
    
    21,293,932Exercise of unit options
    
    
    1,200
    
    
    
    600,000
    
    
    
    
    
    
    
    
    
    
    
    600,000Members units earned but not issued
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    10,000Issued 38 units earned but previously not issued
    
    
    38
    
    
    
    33,000
    
    
    
    (33,000
    )
    
    
    
    
    
    
    Equity units exchanged for services
    
    
    1,000
    
    
    
    1,000,000
    
    
    
    
    
    
    
    
    
    
    
    1,000,000Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,046,370
    )
    
    
    (3,046,370
    )Balance  September 30, 2007
    
    
    26,672
    
    
    $
    23,849,120
    
    
    $
    
    
    
    $
    (3,991,558
    )
    
    $
    19,857,562
   62




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CENTRAL
IOWA ENERGY, LLC
 Year Ended
    
    
    Year EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006Cash Flows from Operating ActivitiesNet (loss)
    
    $
    (3,046,370
    )
    
    $
    (490,722
    )Adjustments to reconcile net (loss) to net cash
provided by (used in) operations:Depreciation
    
    
    1,247,027
    
    
    
    1,139Amortization
    
    
    19,962
    
    
    
    Membership units earned for rent
    
    
    10,000
    
    
    
    21,000Equity based compensation
    
    
    
    
    
    
    600,000Change in assets and liabilities:Margin deposits
    
    
    (326,072
    )
    
    
    Accounts receivable
    
    
    (1,159,184
    )
    
    
    Other receivable
    
    
    (1,049,262
    )
    
    
    5,000Inventories
    
    
    (5,896,934
    )
    
    
    Prepaid expenses
    
    
    (105,263
    )
    
    
    7,561Derivative instruments
    
    
    719,482
    
    
    
    Accounts payable
    
    
    1,421,764
    
    
    
    (8,755
    )Other accrued expenses
    
    
    87,438
    
    
    
    Accrued interest payable
    
    
    204,092
    
    
    
    Net cash provided by (used in) operating activities
    
    
    (7,873,320
    )
    
    
    135,223Cash Flows from Investing ActivitiesCapital expenditures
    
    
    (11,543,906
    )
    
    
    (21,009,185
    )Purchase of land
    
    
    (6,711,169
    )
    
    
    (223,942
    )Net cash used in investing activities
    
    
    (18,255,075
    )
    
    
    (21,233,127
    )Cash Flows from Financing ActivitiesIncrease (decrease) in checks drawn in excess of bank balance
    
    
    (216,613
    )
    
    
    216,613Proceeds from long-term debt
    
    
    27,000,000
    
    
    
    Payments on long-term debt
    
    
    (473,461
    )
    
    
    Proceeds from revolving line of credit
    
    
    1,600,000
    
    
    
    Payments for financing costs
    
    
    (82,806
    )
    
    
    (343,227
    )Member contributions and exercise of unit options
    
    
    600,000
    
    
    
    21,414,000Costs related to capital contributions
    
    
    
    
    
    
    (165,936
    )Other
    
    
    (30,000
    )
    
    
    (55,000
    )Net cash provided by financing activities
    
    
    28,397,120
    
    
    
    21,066,450Net Increase (Decrease) in Cash
    
    
    2,268,725
    
    
    
    (31,454
    )Cash  Beginning of Period
    
    
    
    
    
    
    31,454Cash  End of Period
    
    $
    2,268,725
    
    
    $
    Supplemental Disclosure of Cash Flow Information, cash payments for interest, net of amount capitalized
    
    $
    938,968
    
    
    $
    Supplemental Disclosure of Noncash Investing and Financing Activities:Construction costs in accounts payable
    
    $
    
    
    
    $
    5,421,743Land purchase in accounts payable
    
    $
    
    
    
    $
    25,800Financing costs included in accounts payable
    
    $
    
    
    
    $
    25,651Membership units issued for capital expenditures
    
    $
    1,000,000
    
    
    $
    Capital lease obligations incurred for use of equipment
    
    $
    115,000
    
    
    $
    Land improvements financed by grants
    
    $
    745,000
    
    
    $
    Amortization of financing costs included in
construction in process
    
    $
    22,316
    
    
    $
    
   63




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
 NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 PRINCIPAL BUSINESS ACTIVITY 
 USE OF ESTIMATES 
 REVENUE RECOGNITION 
 FEDERAL INCENTIVE PAYMENTS AND RECEIVABLES 
 CASH AND EQUIVALENTS 
  ACCOUNTS RECEIVABLE
  INVENTORIES
 DERIVATIVE INSTRUMENTS  Accounting for Derivative Instruments and Hedging Activities
  64




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
  PROPERTY AND EQUIPMENT
 Land improvements
    
    
    15-20
    
    yearsPlant and process equipment
    
    
    10-20
    
    yearsOffice building
    
    
    10-20
    
    yearsOffice equipment
    
    
    5
    
    years
   FINANCING COSTS 
 FAIR VALUE OF FINANCIAL INSTRUMENTS
 DEFFERED GRANT FINANCING
 INCOME TAXES 
  65




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
 UNIT OPTIONS  Accounting for Stock Issued to Employees
 Accounting for Stock-Based Compensation
  Year EndedSeptember 30,2006Net (Loss):As reported
    
    $
    (490,722
    )Deduct additional stock-based compensation
expense
determined under minimum value based
method for all awards
    
    
    (19,875
    )Pro forma
    
    $
    (510,597
    )(Loss) per unit:As reported
    
    $
    (29.17
    )Pro forma
    
    $
    (30.35
    )
 Share-Based Payment
  66




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##### Table of Contents



CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS  Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 NOTE B: INVENTORIES
  Raw materials
    
    $
    2,420,248Work in process
    
    
    118,597Finished goods
    
    
    3,358,089Total
    
    $
    5,896,934
 NOTE C: MEMBERS EQUITY
        67




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##### Table of Contents



CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
 NOTE D: RELATED PARTY TRANSACTIONS
     NOTE E: REVOLVING LINE OF CREDIT
   68




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
 NOTE F: LONG-TERM DEBT
  Mortgage Term Note payable to F & M Bank  Iowa  See details below
    
    $
    21,529,081Term Revolving Note payable to F & M Bank  Iowa  See details below
    
    
    5,000,000Equipment capital lease, due in monthly installments of $3,345
through August 2010 with a final option payment of $11,500 for the
purchase of the equipment
    
    
    112,458$
    26,641,539
   2008
    
    $
    1,502,3862009
    
    
    1,639,7772010
    
    
    1,797,8222011
    
    
    1,912,3852012
    
    
    19,789,169Total long-term debt
    
    $
    26,641,539
       69




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##### Table of Contents



CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
  NOTE H: RETIREMENT PLAN
  NOTE I: COMMITMENTS AND CONTINGENCIES
 Purchase Contracts
  Utility Contracts
    NOTE J: GOING CONCERN
   70




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
    71




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##### Table of Contents



ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 8A. CONTROLS AND PROCEDURES.
    
 ITEM 8B. OTHER INFORMATION.
  
 PART III
 
 ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
  
 ITEM 10. EXECUTIVE COMPENSATION.
  
 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER MATTERS.
  
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
   72




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ITEM 13. EXHIBITS.
  Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing3.1
    
    Articles of Organization of Central Iowa Energy, LLC filed with the Iowa
Secretary of State on March 31, 2005.
    
    
    13.2
    
    Operating Agreement of the registrant dated August 4, 2005.
    
    
    110.1
    
    Design Build Agreement between Renewable Energy Group and Central Iowa Energy,
LLC dated March 10, 2006.
    
    
    110.2
    
    Letter Agreement with Renewable Energy Group dated August 3, 2006.
    
    
    110.3
    
    Management and Operational Services Agreement between Renewable Energy, Inc. and
Central Iowa Energy, LLC dated August 22, 2006.
    
    
    110.4
    
    Assignment of Management and Operational Services Agreement between F & M Bank -
Iowa and Central Iowa Energy, LLC dated September 26, 2006.
    
    
    110.5
    
    First Amendment to Management and Operational Services Agreement between
Renewable Energy Group, Inc. and Central Iowa Energy, LLC dated September 26,
2006.
    
    
    110.6
    
    Assignment of Design Build Agreement between F & M Bank  Iowa and Central Iowa
Energy, LLC dated September 26, 2006.
    
    
    110.7
    
    Master Loan Agreement between F & M Bank  Iowa and Central Iowa Energy, LLC
dated September 26, 2006.
    
    
    110.8
    
    First Supplement to the Master Loan Agreement between F & M Bank  Iowa and
Central Iowa Energy, LLC dated September 26, 2006.
    
    
    110.9
    
    Second Supplement to the Master Loan Agreement between F & M Bank  Iowa and
Central Iowa Energy, LLC dated September 26, 2006.
    
    
    110.10
    
    Third Supplement to the Master Loan Agreement between F & M Bank  Iowa and
Central Iowa Energy, LLC dated September 26, 2006.
    
    
    110.11
    
    Private Redevelopment Agreement between Jasper County, Iowa and Central Iowa
Energy, LLC dated November 21, 2006.
    
    
    110.12
    
    Preliminary Industrial New Jobs Training Agreement between Des Moines Area
Community College and Central Iowa Energy, LLC dated January 1, 2007.
    
    
    110.13
    
    Project Coordinator Agreement.
    
    
    110.14
    
    Consulting Agreement between The Biodiesel Group, LLC and Central Iowa Energy,
LLC dated July 7, 2005.
    
    
    210.15
    
    Lease between Farver Rental and Central Iowa Energy, LLC dated December 14, 2005.
    
    
    210.16
    
    Gas Sales Contract between Aquila, Inc. and Central Iowa Energy, LLC dated May
30, 2006.
    
    
    210.17
    
    Water Users Membership Agreement between Central Iowa Water Association and
Central Iowa Energy, LLC dated June 29, 2006.
    
    
    2
  73




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Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing10.18
    
    Industrial Track Agreement between Iowa Interstate Railroad, LTD and Central
Iowa Energy, LLC dated December 11, 2006.
    
    
    210.19
    
    Industrial New Jobs Training Agreement between Central Iowa Energy, LLC and Des
Moines Area Community College dated March 12, 2007
    
    
    310.20
    
    Energy Management Agreement between U.S. Energy Services, Inc. and Central Iowa
Energy, LLC dated June 12, 2007.
    
    
    410.21
    
    Large Volume Transportation Service Agreement between Aquila, Inc. and Central
Iowa Energy, LLC dated August 29, 2007.
    
    
    *10.22
    
    Amended and Restated Revolving Line of Credit Note between F & M Bank-Iowa and
Central Iowa Energy dated October 17, 2007.
    
    
    *10.23
    
    First Amendment to First Supplement to the Amended and Restated Master Loan
Agreement between F & M Bank-Iowa and Central Iowa Energy, LLC dated October 17,
2007.
    
    
    *10.24
    
    Amended and Restated Third Supplement to the Amended and Restated Master Loan
Agreement between F & M Bank-Iowa and Central Iowa Energy, LLC dated October 17,
2007.
    
    
    *10.25
    
    Amended and Restated Master Loan Agreement between F & M Bank-Iowa and Central
Iowa Energy, LLC dated October 17, 2007.
    
    
    *31.1
    
    Certificate Pursuant to 17 CFR 240 15d-14(a)
    
    
    *31.2
    
    Certificate Pursuant to 17 CFR 240 15d-14(a)
    
    
    *32.1
    
    Certificate Pursuant to 18 U.S.C. Section 1350
    
    
    *32.2
    
    Certificate Pursuant to 18 U.S.C. Section 1350
    
    
    *
 
 (1)
    
    Incorporated by reference to the exhibit of the same number on our Registration Statement on
Form 10-SB, No.000-52429, originally filed on January 29, 2007.(2)
    
    Incorporated by reference to the exhibit of the same number on our Pre-Effective Amendment #1
to our Registration Statement on Form 10-SB, No.000-52429, originally filed on March 29, 2007.(3)
    
    Incorporated by reference as filed on our Quarterly Report on Form 10-QSB filed on May 15,
2007.(4)
    
    Incorporated by reference as filed on our Quarterly Report on Form 10-QSB filed on August 14,
2007.(*)
    
    Filed herewith.
 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
   74




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SIGNATURES
  CENTRAL IOWA ENERGY, LLCDate: 12/27/07
    
    /s/ John Van ZeeJohn Van ZeePresident and Director(Principal Executive Officer)Date: 12/27/07
    
    /s/ Kimberly SmithKimberly Smith(Principal Financial and Accounting Officer)
  Date: 12/27/07
    
    /s/ John Van ZeeJohn Van Zee, President and Director(Principal Executive Officer)Date: 12/27/07
    
    /s/ Jim JohnstonJim Johnston, Chairman and DirectorDate: 12/27/07
    
    /s/ Scot FarverScot Farver, Treasurer and DirectorDate: 12/27/07
    
    /s/ Jeremie ParrJeremie Parr, Secretary and DirectorDate: 12/27/07
    
    /s Warren L. BushWarren L. Bush, DirectorDate: 12/27/07
    
    /s/ Craig HamiltonCraig Hamilton, DirectorDate: 12/27/07
    
    /s/ William J. HoranWilliam J. Horan, DirectorDate: 12/27/07
    
    /s/ Don HuyserDon Huyser, DirectorDate: 12/27/07
    
    /s/ Dean LaneDean Lane, DirectorDate: 12/27/07
    
    /s/ Denny MauserDenny Mauser, DirectorDate: 12/27/07
    
    /s/ Tom SchroederTom Schroeder, DirectorDate: 12/27/07
    
    /s/ William J. TalsmaWilliam J. Talsma, Director
  75




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EXHIBIT INDEX
 Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing10.21
    
    Large Volume Transportation Service Agreement
between Aquila, Inc. and Central Iowa Energy,
LLC dated August 29, 2007.
    
    *10.22
    
    Amended and Restated Revolving Line of Credit
Note between F & M Bank-Iowa and Central Iowa
Energy dated October 17, 2007.
    
    *10.23
    
    First Amendment to First Supplement to the
Amended and Restated Master Loan Agreement
between F & M Bank-Iowa and Central Iowa
Energy, LLC dated October 17, 2007.
    
    *10.24
    
    Amended and Restated Third Supplement to the
Amended and Restated Master Loan Agreement
between F & M Bank-Iowa and Central Iowa
Energy, LLC dated October 17, 2007.
    
    *10.25
    
    Amended and Restated Master Loan Agreement
between F & M Bank-Iowa and Central Iowa
Energy, LLC dated October 17, 2007.
    
    *31.1
    
    Certificate Pursuant to 17 CFR 240 15d-14(a)
    
    *31.2
    
    Certificate Pursuant to 17 CFR 240 15d-14(a)
    
    *32.1
    
    Certificate Pursuant to 18 U.S.C. Section 1350
    
    *32.2
    
    Certificate Pursuant to 18 U.S.C. Section 1350
    
    *
 
 (*)
    
    Filed herewith.
  76