##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB
 þ
    
    Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal year ended September 30, 2008
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from  to
 Commission file number 000-51965
 CENTRAL IOWA ENERGY, LLC
  Iowa
    
    71-0988301(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)3426 EAST 28TH STREET 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
    
    
    28ITEM 2. DESCRIPTION OF PROPERTY
    
    
    42ITEM 3. LEGAL PROCEEDINGS
    
    
    42ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    42PART II
    
    
    42ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES
OF EQUITY SECURITIES
    
    
    42ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
    
    
    44ITEM 7. FINANCIAL STATEMENTS
    
    
    59ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    72ITEM 8AT. CONTROLS AND PROCEDURES
    
    
    72ITEM 8B. OTHER INFORMATION
    
    
    72PART III
    
    
    73ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
16(A) OF THE EXCHANGE ACT
    
    
    73ITEM 10. EXECUTIVE COMPENSATION
    
    
    73ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
    
    
    73ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    73ITEM 13. EXHIBITS
    
    
    74ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    74SIGNATURES
    
    
    75Exhibit 10.1Exhibit 10.2Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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AVAILABLE INFORMATION
  
 PART I
 
 ITEM 1. Description of Business.
 Business Development
     3




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
    
    Raising equity through one
or more private placement offerings or a state
registered offering of the Companys membership units;
    
    Seeking additional sources
of short-term debt financing and credit facilities;
    
    Refinancing our current debt financing and credit facilities; or
    
    Seeking strategic business
opportunities, including with other biodiesel plants.
     4




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Principal Products
  Biodiesel
    Primary Co-Product  Crude Glycerin
   5




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General Demand
     Sources and Availability of Raw Materials
 Feedstock Cost and Supply
   6




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Soybean Oil
  U.S. Soybean Oil Prices for the Past 10 Years
 Marketing Year
    
    Price (cents)1998/99
    
    
    19.901999/00
    
    
    15.602000/01
    
    
    14.152001/02
    
    
    16.462002/03
    
    
    22.042003/04
    
    
    29.972004/05
    
    
    23.012005/06
    
    
    23.412006/07
    
    
    31.022007/08
    
    
    52.03
    (1)2008/2009
    
    
    31.0-35.0
    (1)
 U.S. Soybean Oil Prices for 2007-2008 Marketing Year
 Month
    
    Price (cents)November
    
    
    42.68December
    
    
    45.16January
    
    
    49.77February
    
    
    56.68March
    
    
    57.27April
    
    
    56.58May
    
    
    58.27June
    
    
    62.43July
    
    
    60.54August
    
    
    50.78September
    
    
    46.09October
    
    
    35.50November
    
    
    31.55
    (1)
 (1)
    
    Preliminary Price  7




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Data provided by USDA, Oil Crops Outlook Report, December 12, 2008
   Animal Fats and Other Alternative Feedstocks
   Lard & Edible Tallow Prices for Past Ten Years
 Marketing Year
    

Lard(cents)
    
    

EdibleTallow(cents)1998/99
    
    
    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
    
    
    40.85
    
    
    
    41.682008/2009
    
    
    27.5-31.5
    (1)
    
    
    20.0-24.0
    (1)
 Lard & Edible Tallow Prices for 2007-2008 Marketing Year
 Month
    

Lard(cents)
    
    

EdibleTallow(cents)November
    
    
    33.78
    
    
    
    36.88December
    
    
    32.66
    
    
    
    35.28January
    
    
    33.01
    
    
    
    38.53February
    
    
    38.33
    
    
    
    44.33March
    
    
    46.00
    
    
    
    48.39April
    
    
    43.04
    
    
    
    44.25May
    
    
    42.27
    
    
    
    41.88June
    
    
    44.93
    
    
    
    46.61July
    
    
    52.82
    
    
    
    48.61August
    
    
    46.50
    
    
    
    41.94September
    
    
    41.73
    
    
    
    39.53October
    
    
    37.07
    
    
    
    26.97November(1)
    
    
    20.00
    (1)
    
    
    24.00
    (1)
 (1)
    
    Preliminary Prices  8




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Data provided by USDA, Oil Crops Outlook Report, December 12, 2008
   Feedstock Cold Flow Properties
  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
  Hedging
  Pretreatment Costs
   9




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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;
    
    Provide analysis and audit of bulk transportation providers;
    
    Perform due diligence requirements for investigation of suppliers of the
chemical inputs;
    
    Provide analysis and audit of chemical 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, Energy & Infrastructure
  Electricity.
 Water
 Natural Gas
  10




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Sewer.
 Energy Management.
 Biodiesel Markets
    11




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Wholesale Market/Biodiesel Marketers
  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.
  International Markets
  Government/Public Sector
   12




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The Effect of Cold Flow on Biodiesel Markets
  Glycerin Markets and Demand
    Distribution of Principal Products
  
    
    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.
   13




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Patent, Trademarks and Licenses.
  Government Regulation and Federal Biodiesel Supports
  Renewable Fuels Standard
    14




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th
   Federal Biodiesel Supports and Programs
    15




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The Clean Air Act Amendment
  State Legislation
     16




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Effect of Government Incentives and Regulation
   Competition with Other Biodiesel Producers
     17




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
    
    Ag Processing Inc. (AGP) in Sergeant Bluff. This facility produces biodiesel from
refined bleached and deodorized soybean oil produced at its solvent extraction processing
plant in Eagle Grove, Iowa. AGP has completed an expansion of its plant, increasing its
production capacity to 30 million gallons per year.
    
    Cargill Inc., located in Iowa Falls. Cargills facility has an annual production
capacity of 37.5 million gallons. Cargill uses soybean oil as its primary feedstock and is
located adjacent to its soybean crush facility.
    
    Clinton County BioEnergy, L.L.C., located in Clinton, Iowa. This facility has capacity
to produce 10 million gallons of biodiesel annually and uses soybean oil as its primary
feedstock.
    
    East Fork Biodiesel, LLC, finished construction on its 60 million gallon per year plant
in Algona, Iowa, currently making it the largest biodiesel producer in Iowa. However, this
plant is not currently operating, and according to its most recent SEC filing, does not
anticipate commencing regular operations until it is able to acquire sufficient amounts of
working capital. This biodiesel plant was constructed by and is currently managed by REG
and can only process refined soybean oil into biodiesel.
  18




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
    
    Freedom Fuels, LLC, located near Mason City, Iowa. The facility has capacity to produce
30 million gallons of biodiesel per year. This plant, however, filed for Chapter 11
bankruptcy reorganization in November 2008 and operations at the plant have been suspended.
    
    Iowa Renewable Energy, LLC, located in Washington, Iowa. The facility has capacity to
produce 30 million gallons of biodiesel per year, from either vegetable oil or animal fat.
This biodiesel plant was constructed by REG and is currently managed by REG.
    
    Tri-City Energy, LLC, located in Keokuk, Iowa. The facility has capacity to produce 5
million gallons of biodiesel annually and uses soybean oil as its primary feedstock.
    
    Riksch Biofuels L.L.C., located in Crawfordsville, Iowa, is capable of producing 10
million gallons of biodiesel each year.
    
    Sioux Biochemical, Inc., located in Sioux Center, Iowa, is capable of producing 1.5
million gallons of biodiesel each year.
    
    Soy Solutions of Iowa, LLC, located in Milford, Iowa. This is a stand-alone facility
that purchases soybean oil from the market. The facility has capacity to produce
approximately 2 million gallons of biodiesel annually, and utilizes virgin soybean oil as
its sole feedstock.
    
    Western Dubuque Biodiesel, LLC, located near Farley, Iowa. Western Dubuque Biodiesel
has the capacity to produce 30 million gallons of biodiesel per year. It primarily utilizes
soybean oil and is not capable of pretreating animal fats for use in the production process.
This biodiesel plant was constructed by REG and is currently managed by REG.
    
    Western Iowa Energy, LLC, located near Wall Lake, Iowa. Western Iowa Energy has the
capacity to produce 30 million gallons of biodiesel per year and utilizes both vegetable
oil and animal fats as its feedstock. This biodiesel plant was constructed by REG and is
currently managed by REG.
   19




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most
 Commercial Biodiesel Production Plants (September 29, 2008)
 
   AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockALAllied Renewable Energy, LLC
    
    Birmingham
    
    
    15,000,000
    
    
    SoyAthens Biodiesel, LLC
    
    AthensEagle Biodiesel, Inc.
    
    Bridgeport
    
    
    30,000,000Green River Biodiesel, Inc.
    
    Moundville
    
    
    
    
    
    SoyPerihelion Global, Inc.
    
    Opp
    
    
    10,000,000
    
    
    Multi FeedstockARArkansas Soy Energy Group
    
    DeWitt
    
    
    10,000,000
    
    
    Soy*
    
    Future Fuel Chemical Company
    
    Batesville
    
    
    24,000,000
    
    
    Multi FeedstockPinnacle Biofuels, Inc.
    
    Crossett
    
    
    10,000,000
    
    
    Multi FeedstockAZAmereco Arizona, LLC
    
    Arlington
    
    
    15,000,000
    
    
    Multi FeedstockCABlue Sky Bio-Fuels, Inc.
    
    Oakland
    
    
    
    
    
    Multi FeedstockCommunity Fuels
    
    Stockton
    
    
    10,000,000
    
    
    Multi FeedstockEnergy Alternative Solutions, Inc.
    
    Gonzales
    
    
    1,000,000
    
    
    Multi Feedstock*
    
    Imperial Western Products
    
    Coachella
    
    
    8,000,000
    
    
    Multi FeedstockRenewable Energy Products, LLC
    
    Santa Fe Springs
    
    
    10,000,000
    
    
    Multi FeedstockWright Biofuels, Inc.
    
    San Jacinto
    
    
    5,500,000
    
    
    Multi FeedstockYokayo Biofuels, Inc.
    
    Ukiah
    
    
    350,000
    
    
    Recycled Cooking Oil
  20




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockCTBioDiesel One Ltd
    
    Southington
    
    
    4,000,000
    
    
    Recycled Cooking OilBio-Pur Inc.
    
    Bethlehem
    
    
    1,000,000
    
    
    Multi FeedstockFLAgri-Source Fuels, Inc.
    
    Dade City
    
    
    30,000,000
    
    
    Multi Feedstock*
    
    World Energy Alternatives, LLC
    
    Lakeland
    
    
    18,000,000
    
    
    Soy, Animal Fats, Yellow GreaseGAAlterra Bioenergy of Middle Georgia, LLC
    
    Gordon
    
    
    15,000,000
    
    
    Multi FeedstockBullDog BioDiesel
    
    Ellenwood
    
    
    18,000,000
    
    
    Multi FeedstockECO Solutions, LLC
    
    Chatsworth
    
    
    25,000,000
    
    
    Multi FeedstockGeorgia Biofuels Corp.
    
    Loganville
    
    
    1,000,000
    
    
    Multi FeedstockMiddle Georgia Biofuels
    
    East Dublin
    
    
    1,500,000
    
    
    Poultry Fat, Tallow*
    
    Peach State Labs
    
    Rome
    
    
    
    
    
    SoySeminole Biodiesel
    
    Bainbridge
    
    
    10,000,000
    
    
    Multi FeedstockSunshine BioFuels, LLC
    
    Camilla
    
    
    6,000,000
    
    
    SoyUS Biofuels Inc.
    
    Rome
    
    
    10,000,000
    
    
    Multi FeedstockHIPacific Biodiesel
    
    Kahului
    
    
    500,000
    
    
    Multi FeedstockPacific Biodiesel
    
    Honolulu
    
    
    1,000,000
    
    
    Multi FeedstockIA*
    
    AGP
    
    Sergeant Bluff
    
    
    30,000,000
    
    
    Soy*
    
    Cargill
    
    Iowa Falls
    
    
    37,500,000
    
    
    Soy*
    
    Central Iowa Energy, LLC
    
    Newton
    
    
    30,000,000
    
    
    Multi FeedstockEast Fork Biodiesel, LLC
    
    Algona
    
    
    60,000,000
    
    
    Refined Vegetable Oils*
    
    Freedom Fuels, LLC
    
    Mason City
    
    
    30,000,000
    
    
    Soy*
    
    Iowa Renewable Energy, LLC
    
    Washington
    
    
    30,000,000
    
    
    Multi Feedstock*
    
    REG Ralston, LLC
    
    Ralston
    
    
    12,000,000
    
    
    Multi FeedstockRiksch BioFuels, LLC
    
    Crawfordsville
    
    
    10,000,000
    
    
    Multi FeedstockSioux Biochemical, Inc.
    
    Sioux Center
    
    
    2,000,000
    
    
    Corn, SoySoy Solutions
    
    Milford
    
    
    2,000,000
    
    
    SoyTri-City Energy
    
    Keokuk
    
    
    5,000,000
    
    
    Soy*
    
    Western Dubuque Biodiesel
    
    Farley
    
    
    30,000,000
    
    
    Vegetable Oils*
    
    Western Iowa Energy
    
    Wall Lake
    
    
    30,000,000
    
    
    Multi FeedstockIDBlue Sky Biodiesel, LLC
    
    New Plymouth
    
    
    10,000,000
    
    
    SoyPleasant Valley Biofuels, LLC
    
    American FallsILDiamond Biofuels
    
    Maxon
    
    
    500,000
    
    
    Animal Fats, Recycled Cooking OilHeartland Biodiesel, Inc.
    
    Marion
    
    
    3,000,000
    
    
    SoyIncobrasa Industries, Ltd.
    
    Gilman
    
    
    31,000,000
    
    
    SoyMidwest Biodiesel Products, Inc.
    
    South Roxanna
    
    
    30,000,000
    
    
    Multi Feedstock*
    
    Stephan Company
    
    Millsdale
    
    
    22,000,000
    
    
    Multi FeedstockINe-biofuels, LLC
    
    Middletown
    
    
    25,000,000
    
    
    Multi FeedstockEvergreen Renewables
    
    Hammond
    
    
    5,000,000
    
    
    SoyIndiana Flex Fuels
    
    LaPorte
    
    
    5,000,000
    
    
    Multi FeedstockIntegrity Biofuels
    
    Morristown
    
    
    10,000,000
    
    
    SoyLouis Dreyfus Agricultural Industries, LLC
    
    Claypool
    
    
    80,000,000
    
    
    SoyKSHealy Biodiesel, Inc.
    
    Sedgwick
    
    
    1,000,000
    
    
    Recycled Cooking OilKrystal Clean Biofuels
    
    Kansas City
    
    
    
    
    
    Multi FeedstockKY*
    
    Griffin Industries
    
    Butler
    
    
    1,750,000
    
    
    Multi FeedstockOwnesboro Grain
    
    Ownesboro
    
    
    50,000,000
    
    
    SoyUnion County Biodiesel Company, LLC
    
    Stugis
    
    
    5,000,000
    
    
    SoyLAVanguard Synfuels, LLC
    
    Pollock
    
    
    12,000,000
    
    
    Multi Feedstock
  21




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockMAMPB Bioenergy, LLC
    
    Attleboro
    
    
    500,000
    
    
    Recycled Cooking OilMDEagle Creek Fuel Services, LLC
    
    Baltimore
    
    
    1,000,000Greenlight Biofuels, LLC
    
    Princess Anne
    
    
    4,000,000
    
    
    Multi FeedstockMaryland Biodiesel
    
    Berlin
    
    
    1,000,000
    
    
    SoyMIAg Solutions, Inc.
    
    Gladstone
    
    
    5,000,000
    
    
    Multi FeedstockMichigan Biodiesel, LLC
    
    Bangor
    
    
    10,000,000
    
    
    Multi FeedstockNextDiesel
    
    Adrian
    
    
    20,000,000
    
    
    Multi Feedstock, Corn OilTPA Inc.
    
    Warren
    
    
    20,000,000
    
    
    Multi FeedstockMN*
    
    FUMPA BioFuels
    
    Redwood Falls
    
    
    3,000,000
    
    
    Multi FeedstockGreen Range Renewable Energy
    
    Ironton
    
    
    150,000
    
    
    Recycled Cooking Oil*
    
    Minnesota Soybean Processors
    
    Brewster
    
    
    30,000,000
    
    
    SoyMOAGP
    
    St. Joseph
    
    
    29,900,000
    
    
    SoyGlobal 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
    
    
    SoyNatural Biodiesel Plant, LLC
    
    Hayti
    
    
    5,000,000
    
    
    Multi FeedstockPaseo Cargill Energy, LLC
    
    Kansas City
    
    
    37,500,000
    
    
    Soy, Animal FatsPrairie Pride
    
    Deerfield
    
    
    30,000,000
    
    
    SoyMSCFC Transportation, Inc.
    
    Columbus
    
    
    1,500,000
    
    
    Multi FeedstockDelta Biofuels, Inc.
    
    Natchez
    
    
    80,000,000
    
    
    Multi FeedstockNorth Mississippi Biodiesel
    
    New Albany
    
    
    7,000,000
    
    
    SoyScott Petroleum Corporation
    
    Greenville
    
    
    20,000,000
    
    
    Multi FeedstockMTEarl Fisher Bio Fuels
    
    ChesterNCBlue Ridge Biofuels
    
    Asheville
    
    
    1,000,000
    
    
    Multi FeedstockCarolina Biodiesel, LLC
    
    DurhamEvans Environmental Energies, Inc.
    
    Wilson
    
    
    3,000,000Foothills Bio-Energies, LLC
    
    Lenoir
    
    
    5,000,000
    
    
    Multi FeedstockGortman Biofuel, LLC
    
    Winston Salem
    
    
    100,000Leland Organic Corporation
    
    Leland
    
    
    30,000,000
    
    
    Multi FeedstockNorth Carolina BioFuels, LLC
    
    Seaboard
    
    
    1,000,000
    
    
    Multi Feedstock*
    
    Piedmont Biofuels
    
    Pittsboro
    
    
    4,000,000
    
    
    Multi FeedstockTriangle Biofuels Industries, Inc.
    
    Wilson
    
    
    3,000,000
    
    
    Multi FeedstockNDADM
    
    Velva
    
    
    85,000,000
    
    
    CanolaNEHorizon Biofuels, Inc.
    
    Arlington
    
    
    400,000
    
    
    Animal FatNortheast Nebraska Biodiesel, LLC
    
    Scribner
    
    
    5,000,000
    
    
    SoyWyobraska Biodiesel, LLC
    
    Gering
    
    
    10,000,000
    
    
    SoyNJFuel Bio One, LLC
    
    Elizabeth
    
    
    50,000,000
    
    
    Multi FeedstockInnovation Fuels
    
    Newark
    
    
    40,000,000
    
    
    Multi FeedstockNMRio Valley Biofuels, LLC
    
    Anthony
    
    
    750,000
    
    
    Multi FeedstockNVBently Biofuels
    
    Minden
    
    
    1,000,000
    
    
    Multi FeedstockBiodiesel of Las Vegas
    
    Las Vegas
    
    
    8,000,000
    
    
    Multi FeedstockNYBuffalo Biodiesel, Inc.
    
    Tonawanda
    
    
    1,500,000
    
    
    Recycled Cooking OilNorthern Biodiesel, Inc.
    
    Ontario
    
    
    
    
    
    Soy
  22




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockOHAgrifuels, LLC
    
    Breman
    
    
    1,000,000
    
    
    Multi FeedstockAmerican Ag Fuels, LLC
    
    Definance
    
    
    7,000,000
    
    
    Multi FeedstockAmerican Made Fuels, Inc.
    
    Canton
    
    
    5,000,000
    
    
    Multi FeedstockArlington Energy, LLC
    
    Mansfield
    
    
    4,000,000
    
    
    Multi FeedstockCenter Alternative Energy Company
    
    Cleveland
    
    
    5,000,000
    
    
    Soy, Choice White GreaseJatrodiesel, Inc.
    
    Miamisburg
    
    
    5,000,000
    
    
    Multi Feedstock*
    
    Peter Cremer
    
    Cincinnati
    
    
    30,000,000
    
    
    SoyPK Biodiesel
    
    Woodstock
    
    
    5,000,000
    
    
    Multi FeedstockOKHigh Plains Bioenergy
    
    Guymon
    
    
    30,000,000
    
    
    Multi FeedstockTulsa Biofuels, LLC
    
    TulsaORGreen Fuels of Oregon, Inc.
    
    Klamath Falls
    
    
    1,000,000
    
    
    CanolaSeQuential-Pacific Biodiesel, LLC
    
    Salem
    
    
    5,000,000
    
    
    Multi FeedstockPABiodiesel of Pennsylvania, Inc.
    
    White Deer
    
    
    1,500,000
    
    
    Soybean OilKeystone BioFuels, Inc.
    
    Shiremanstown
    
    
    
    
    
    Multi FeedstockLake Erie Biofuels
    
    Erie
    
    
    45,000,000
    
    
    SoyMiddletown Biofuels, LLC
    
    Middletown
    
    
    5,000,000
    
    
    SoySoy Energy, Inc.
    
    New Oxford
    
    
    1,500,000
    
    
    SoyUnited Biofuels, Inc.
    
    York
    
    
    3,000,000
    
    
    Multi FeedstockUnited Oil Company
    
    Pittsburgh
    
    
    5,000,000
    
    
    Multi FeedstockRIMason Biodiesel, LLC
    
    Westerly
    
    
    2,500,000
    
    
    Recycled Cooking OilNewport Biodiesel, LLC
    
    Newport
    
    
    300,000
    
    
    Recycled Cooking OilSCCarbon Neutral Solutions, LLC
    
    Maldin*
    
    Carolina Biofuels, LLC
    
    Greenville
    
    
    50,000,000
    
    
    SoyEcogy Biofuels, LLC
    
    Estill
    
    
    30,000,000
    
    
    SoySoutheast BioDiesel, LLC
    
    N. Charleston
    
    
    8,000,000
    
    
    Multi FeedstockSDMidwest BioDiesel Producers, LLC
    
    Alexandria
    
    
    7,000,000
    
    
    Multi FeedstockTNBlue Sky Biodiesel, Inc.
    
    Kingstong
    
    
    3,000,000
    
    
    Multi FeedstockMemphis Biofuels, LLC
    
    Memphis
    
    
    50,000,000
    
    
    Multi FeedstockMilagro Biofuels of Memphis
    
    Memphis
    
    
    5,000,000
    
    
    Multi FeedstockNu-Energie, LLC
    
    Surgoinsville
    
    
    5,000,000
    
    
    Multi FeedstockNuOil
    
    Counce
    
    
    1,500,000
    
    
    Multi FeedstockSunsOil, LLC
    
    Athens
    
    
    1,500,000
    
    
    Multi FeedstockTXAgribiofuels, LLC
    
    Dayton
    
    
    12,000,000
    
    
    Multi FeedstockAgriMax Fuels, LLC
    
    Channelview
    
    
    3,000,000
    
    
    Soy*
    
    Beacon Energy
    
    Cleburne
    
    
    12,000,000
    
    
    Multi FeedstockBiodiesel of Texas, Inc.
    
    DentonBioSelect Fuels (GBBLP)
    
    Galveston
    
    
    30,000,000
    
    
    Multi FeedstockBrownfield Biodiesel, LLC
    
    Ralls
    
    
    2,000,000
    
    
    Cottonseed, Soy, CanolaCentral Texas Biofuels
    
    Giddings
    
    
    600,000
    
    
    Waste Vegetable OilDirect Fuels
    
    Euless
    
    
    10,000,000
    
    
    Multi FeedstockDouble Diamond Biofuels, Inc.
    
    Dimmitt
    
    
    8,000,000
    
    
    Multi FeedstockFuel & Lube, LLC
    
    Richmond
    
    
    1,000,000
    
    
    Recycled Cooking OilGeoGreen Fuels
    
    Gonzales
    
    
    3,000,000
    
    
    Multi FeedstockGreen Earth Fuels of Houston, LLC
    
    Galena Park
    
    
    90,000,000
    
    
    Multi FeedstockGreenHunter BioFuels, Ltd.
    
    Houston
    
    
    105,000,000
    
    
    Multi FeedstockGreenlight Biofuels, Ltd.
    
    Littlefield
    
    
    5,000,000
    
    
    Multi Feedstock*
    
    Huish Detergents
    
    Pasadena
    
    
    15,000,000
    
    
    Palm*
    
    Johann Haltermann Ltd
    
    Houston
    
    
    12,000,000
    
    
    Multi FeedstockMomentum Biofuels, Inc.
    
    Pasadena
    
    
    20,000,000
    
    
    Multi FeedstockNew Energy Fuels, Inc.
    
    Waller
    
    
    5,000,000
    
    
    Multi FeedstockNew Fuel Company
    
    Dallas
    
    
    250,000
    
    
    Multi Feedstock*
    
    Organic Fuels, LLC
    
    Galena Park
    
    
    45,000,000
    
    
    Multi FeedstockPacific Biodiesel Texas
    
    Hillsboro
    
    
    2,500,000
    
    
    Multi FeedstockRed River Biodiesel, Ltd.
    
    New Boston
    
    
    15,000,000
    
    
    Multi FeedstockREG Houston, LLC
    
    Seabrook
    
    
    35,000,000
    
    
    Refined Vegetable OilsSAFE Renewable Corp.
    
    Conroe
    
    
    30,000,000
    
    
    Multi FeedstockValco Bioenergy
    
    Harlingen
    
    
    3,000,000
    
    
    Recycled Cooking Oil
  23




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockVACheasapeake Custom Chemical
    
    Ridgeway
    
    
    5,500,000
    
    
    Multi FeedstockRECO Biodiesel, LLC
    
    Richmond
    
    
    10,000,000
    
    
    Multi FeedstockRed Birch Energy, Inc.
    
    Bassett
    
    
    2,500,000
    
    
    Multi FeedstockVirginia Biodiesel Refinery
    
    West Point
    
    
    7,000,000
    
    
    Multi FeedstockWACentral Washington Biodiesel, LLC
    
    Ellensburg
    
    
    
    
    
    Multi FeedstockGen-X Energy Group, Inc.
    
    Burbank
    
    
    15,000,000
    
    
    Multi FeedstockImperium Grays Harbor
    
    Hoquiam
    
    
    100,000,000
    
    
    Multi Feedstock*
    
    Seattle Biodiesel
    
    Seattle
    
    
    5,000,000
    
    
    Soy, CanolaWIBest Biodiesel, Inc.
    
    Cashton
    
    
    10,000,000Sanimax Energy Inc.
    
    Deforest
    
    
    20,000,000
    
    
    Multi FeedstockWalsh Bio Diesel, LLC
    
    Mauston
    
    
    5,000,000
    
    
    Multi FeedstockWYAC & S, Inc.
    
    Nitro
    
    
    3,000,000
    
    
    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 and Additives
    24




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Glycerin Competition
   Research and Development
  Dependence on One or a Few Major Customers
 Feedstock Procurement
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Costs and Effects of Compliance with Environmental Laws
    Employees
  JOB TITLE
    
    NUMBER EMPLOYEESProcess Operator
    
    
    16Accounting Manager
    
    
    1Mechanic
    
    
    1Electrician
    
    
    1Administrative Assistant
    
    
    1Shipping/Receiving
    
    
    4Operations Supervisor
    
    
    1Quality Assurance Manager
    
    
    1Laboratory Technician
    
    
    1Accounting Assistant
    
    
    1Total
    
    
    28
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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.
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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.
 
    
    effectively manage our business and operations;
    
    recruit and retain key personnel;
    
    develop new products that complement our existing business; and
    
    obtain sufficient amounts of credit and capital to support our business operations.
  We have a history of losses and may not ever operate profitably
 Several biofuels companies throughout the country have recently filed for Chapter 1l
bankruptcy due to industry and economic conditions, and we may also be forced to consider filing
for bankruptcy protection in the event that economic conditions and our liquidity problems do not
improve.
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Our business is not diversified.
 Our business is sensitive to demand for biodiesel and glycerin.
 Our business is sensitive to feedstock costs. Changes in the prices and availability of our
feedstock may hinder our ability to generate revenue.
  We are in competition with REG, our plant manager and product marketer, which could place us
at a competitive disadvantage and cause a conflict of interest for REG.
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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 to manage our plant, procure our inputs and market our products
could damage our profitability if REG fails to perform its obligations under the MOSA.
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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.
   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.
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Risks Related to Biodiesel Industry
 The recent downturn in the U.S. economy has caused demand for biodiesel to decline, which may
adversely affect our ability to generate revenues.
 The recent decline in crude oil and diesel prices may affect our ability to sell biodiesel at
profitable prices.
 An investigation by the European Commission into whether the U.S. biodiesel industry has been
engaging in unfair trade practices could lead to the imposition of duties or tariffs on biodiesel
imported into Europe, which could cause a significant decrease in our revenues.
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The EPAs delay in implementing the RFS requirement that 500 million gallons of biomass-based
diesel be blended into the national diesel pool in 2009 may hinder stimulation of demand for
biodiesel that may have
otherwise been created by the 2007 amendments to the RFS program.
 Two of our customers have defaulted on their contracts for the purchase of our biodiesel,
which could cause significant decreases in our revenues and exacerbate our liquidity problems.
 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
 Declines in the demand for and prices of biodiesel and its primary co-product will have a
significant negative impact on our financial performance.
   Because of volatile soybean oil prices, we are attempting to use alternative feedstocks, such
as corn oil, to produce our biodiesel, which may have risks and disadvantages of which we are not
yet fully aware.
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The decreasing availability and volatile price of feedstock may hinder our ability to
profitably produce biodiesel and may result in plant shut downs and decreased revenues.
 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.
 If it is necessary to temporarily cease operating our biodiesel plant for sustained periods of
time 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.
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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.
  Automobile manufacturers and other industry groups have expressed reservations regarding the
use of biodiesel, which could negatively impact our ability to market our biodiesel.
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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.
 Risks Related to Our Financing Plan
 We are experiencing liquidity issues which could require us to cease operations.
 The recent downturn in the U.S. economy may affect our ability to obtain additional
financing.
 The loan agreements under which we obtained financing for the construction of our biodiesel
plant contain restrictive covenants, including those with which we have failed to comply for the
year ended September 30, 2008.
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We may be unable to raise the additional equity capital necessary to cure our default under
our loan agreements.
 There are 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 and current market
conditions may make it difficult to raise any desired capital in the future.
 We may be unable to obtain additional credit facilities.
 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.
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Risks Related to Conflicts of Interest
 We may have conflicts of interest with REG, which may cause difficulty in enforcing claims
against REG.
  Risks Related to Tax Issues in a Limited Liability Company
 We expect to continue 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.
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ITEM 2. DESCRIPTION OF PROPERTY.
   
    
    Principal office building
    
    Processing building
    
    Pretreatment building
    
    Loading/receiving building
    
    Storage warehouse
    
    Storage tank farm
  
 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
   42




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Unit Holders
  Distributions
  Equity Compensation Plans
  Sale of Unregistered Securities
  Repurchases of Equity Securities
   43




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ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
 Cautionary Statements Regarding Forward Looking Statements
  
    
    Changes in interest rates or the availability of credit;
 
    
    Our ability to raise additional equity capital proceeds;
 
    
    Overcapacity within the biodiesel industry resulting in increased competition and costs for
feedstock and/or decreased prices for our biodiesel and glycerin;
 
    
    Our ability to obtain additional debt financing;
 
    
    Decrease in the demand for biodiesel;
 
    
    Our lenders election to exercise any one or more remedies to which it is entitled in the event of
our default under our financing agreements;
 
    
    Actual biodiesel and glycerin production varying from expectations;
 
    
    Economic consequences of the domestic and global economic downturn and recent financial crisis;
 
    
    Availability and cost of products and raw materials, particularly soybean oil, animal fats,
natural gas 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 and state 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 and diesel prices;
 
    
    Changes in plant production capacity or technical difficulties in operating the plant;
 
    
    Changes in our business strategy, capital improvements or development plans;
 
    
    Results of our hedging strategies;
 
    
    Competition with other manufacturers in the biodiesel industry;
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
    
    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;
 
    
    Continued failure to comply with loan covenants contained in our financing agreements;
 
    
    Our ability to continue to export our biodiesel;
 
    
    The imposition of tariffs or other duties on biodiesel imported into Europe;
 
    
    Global and domestic economic conditions;
 
    
    Our ability to generate profits; and
 
    
    Other factors described elsewhere in this report
  Overview
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Results of Operations
 Comparison of Fiscal Years Ended September 30, 2008 and September 30, 2007
  Fiscal Year Ended
    
    
    Fiscal Year EndedSeptember 30, 2008
    
    
    September 30, 2007Income Statement DataRevenues
    
    $
    84,562,559
    
    
    
    100.00
    %
    
    $
    35,887,943
    
    
    
    100.00
    %Cost of Goods Sold
    
    $
    82,373,776
    
    
    
    97.41
    %
    
    $
    36,528,293
    
    
    
    101.78
    %Gross Profit (Loss)
    
    $
    2,188,783
    
    
    
    2.59
    %
    
    $
    (640,350
    )
    
    
    (1.78
    )%Operating Expenses
    
    $
    2,420,758
    
    
    
    2.86
    %
    
    $
    1,322,924
    
    
    
    3.69
    %Operating (Loss)
    
    $
    (231,975
    )
    
    
    (0.27
    )%
    
    $
    (1,963,274
    )
    
    
    (5.47
    )%Other Income (Expense)
    
    $
    (2,182,463
    )
    
    
    (2.59
    )%
    
    $
    (1,083,096
    )
    
    
    (3.02
    )%Net Income (Loss)
    
    $
    (2,414,438
    )
    
    
    (2.86
    )%
    
    $
    (3,046,370
    )
    
    
    (8.49
    )%
  46




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Revenues
  Fiscal Year Ended
    
    
    Fiscal Year EndedSeptember 30, 2008
    
    
    September 30, 2007Revenue Source
    
    Amount
    
    
    % of Revenues
    
    
    Amount
    
    
    % of RevenuesBiodiesel Sales
    
    $
    80,635,593
    
    
    
    95
    %
    
    $
    35,401,220
    
    
    
    99
    %Glycerin Sales
    
    $
    2,348,931
    
    
    
    3
    %
    
    $
    418,049
    
    
    
    1
    %Fatty Acids and
Soapstock Sales
    
    $
    1,578,035
    
    
    
    2
    %
    
    $
    68,674
    
    
    
    Total Revenues
    
    $
    84,562,559
    
    
    
    100
    %
    
    $
    35,887,943
    
    
    
    100
    %
     47




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48




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Cost of Goods Sold
   49




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Operating Expenses
  Other Income (Expenses)
  Changes in Financial Condition
  September 30,
    
    
    September 30,2008
    
    
    2007Current Assets
    
    $
    10,476,632
    
    
    $
    11,267,545Current Liabilities
    
    $
    29,787,038
    
    
    $
    30,714,046Members Equity
    
    $
    17,443,124
    
    
    $
    19,857,562
 Current Assets
 Current Liabilities
 Members Equity
  52




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Liquidity and Capital Resources
 Cash Flow from Operating Activities .
 Cash Flow from Investing Activities .
 Cash Flow from Financing Activities .
 Short Term and Long-Term Debt Sources
  th Wall Street Journal
   53




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
    
    Our failure to pay any installments of principal or interest, fees, expenses charges
or other amounts payable under the financing agreements or to make any deposit of funds
required under the financing agreements;
 
    
    The failure of any representation or warranty made by the Company or its agents in
connection with the financing agreements to be correct in any material respect when
made;
 
    
    Our failure to perform or observe any term, covenant or agreement contained in the
financing agreements;
 
    
    Taking any action prohibited by the financing agreements;
 
    
    Failure to deliver financial statements, compliance certificates or other documents
required to be submitted under the financing agreements within the applicable
timeframes;
 
    
    Our inability to pay our debts as such debts become due, or we admit in writing our
inability to pay our debts generally;
 
    
    An assignment for the general benefit of creditors, or the institution, with respect
to the Company, of any bankruptcy or insolvency proceedings or any proceeding seeking
the liquidation, winding up, reorganization or similar relief, and the failure of any
such proceedings instituted against the Company to be dismissed within a period of 30
days or our authorization of any of these actions;
 
    
    Our dissolution, suspension or discontinuation of doing business; or
 
    
    Our breach or default under, or the termination of, a material contract of the
Company.
  Failure to Comply with Loan Covenants
  th
  55




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th
  
    
    acceleration of the unpaid principal balance under the loan agreements and all
accrued interest thereon and all other amounts payable thereunder;
 
    
    withholding of any one or more advances to which the Company may otherwise be
entitled under the financing agreements, or termination of the lenders obligation to
make any advances under the financing agreements;
 
    
    appointment of a receiver to take possession of the collateral securing the loans
from our lender, including without limitation, our real estate, plant, and equipment;
 
    
    requiring the Company to pledge to the lender as additional security immediately
available funds equal to the maximum amount available to be drawn under all outstanding
letters of credit under our financing agreements;
 
    
    foreclosure on the lenders mortgage on and security interest in the Companys
property securing our loans, including our real estate, improvements, equipment and
other assets and personal property; and
 
    
    any and all other rights and remedies afforded to the Lender under applicable law or
equity.
    Additional
Equity Capital And
Debt Financing
  
    
    Raising equity through one
or more private placement offerings or a state
registered offering of the Companys membership units;
 
    
    Seeking additional sources of short-term debt financing and credit facilities
 
    
    Refinancing our current debt financing and credit facilities; or
 
    
    Seeking strategic business
opportunities, including with other biodiesel plants.
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Government Programs and Grants
 
  57




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Critical Accounting Estimates
  Revenue Recognition
  Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and
Hedging Activities
 Commodity Price Risk Protection
   Off-Balance Sheet Arrangements
   58




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




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CENTRAL IOWA ENERGY, LLC
  September 30,
    
    
    September 30,2008
    
    
    2007ASSETSCurrent AssetsCash and equivalents
    
    $
    690,509
    
    
    $
    2,268,725Due from broker
    
    
    218,680
    
    
    
    326,072Trade accounts receivable  related party
    
    
    1,200,587
    
    
    
    1,159,184Federal incentive receivable
    
    
    457,218
    
    
    
    1,049,262Sales tax refund receivable
    
    
    
    
    
    
    461,517Prepaid expenses
    
    
    62,610
    
    
    
    86,033Derivative instruments
    
    
    70,556
    
    
    
    Inventories
    
    
    7,776,472
    
    
    
    5,916,752Total current assets
    
    
    10,476,632
    
    
    
    11,267,545Property and EquipmentLand and improvements
    
    
    7,680,111
    
    
    
    7,680,111Office equipment
    
    
    40,603
    
    
    
    40,603Office building
    
    
    629,300
    
    
    
    629,300Plant and process equipment
    
    
    32,593,225
    
    
    
    32,563,620Construction in process
    
    
    47,083
    
    
    
    40,990,322
    
    
    
    40,913,634Less accumulated depreciation
    
    
    3,798,838
    
    
    
    1,248,326Net property and equipment
    
    
    37,191,484
    
    
    
    39,665,308Other AssetsFinancing costs, net of amortization
    
    
    307,046
    
    
    
    383,755Total Assets
    
    $
    47,975,162
    
    
    $
    51,316,608LIABILITIES AND EQUITYCurrent LiabilitiesCurrent maturities of long-term debt
    
    $
    24,811,856
    
    
    $
    26,641,539Revolving line of credit
    
    
    3,000,000
    
    
    
    1,600,000Derivative instruments
    
    
    
    
    
    
    719,482Accounts payable
    
    
    1,111,983
    
    
    
    1,096,370Accounts payable  related party
    
    
    423,041
    
    
    
    365,125Accrued interest payable
    
    
    162,146
    
    
    
    204,092Accrued expenses
    
    
    278,012
    
    
    
    87,438Total current liabilities
    
    
    29,787,038
    
    
    
    30,714,046Long-Term Debt, less current maturities
    
    
    
    
    
    
    Deferred Grant Financing
    
    
    745,000
    
    
    
    745,000Commitments and ContingenciesMembers EquityMember contributions, net of costs related to capital contributions,
26,672 units outstanding
    
    
    23,849,120
    
    
    
    23,849,120Deficit accumulated
    
    
    (6,405,996
    )
    
    
    (3,991,558
    )Total members equity
    
    
    17,443,124
    
    
    
    19,857,562Total Liabilities and Members Equity
    
    $
    47,975,162
    
    
    $
    51,316,608
   60




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CENTRAL IOWA ENERGY, LLC
  Year Ended
    
    
    Year EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007RevenuesSales to related party
    
    $
    75,113,873
    
    
    $
    31,403,001Federal incentives
    
    
    9,448,686
    
    
    
    4,484,94284,562,559
    
    
    
    35,887,943Cost of Goods Sold
    
    
    82,373,776
    
    
    
    36,528,293Gross Profit (Loss)
    
    
    2,188,783
    
    
    
    (640,350
    )Operating ExpensesProfessional fees
    
    
    271,915
    
    
    
    197,723General and administrative
    
    
    2,148,843
    
    
    
    1,125,201Total
    
    
    2,420,758
    
    
    
    1,322,924Operating (Loss)
    
    
    (231,975
    )
    
    
    (1,963,274
    )Other Income (Expenses)Interest income
    
    
    38,945
    
    
    
    59,964Interest (expense)
    
    
    (2,221,408
    )
    
    
    (1,143,060
    )Total
    
    
    (2,182,463
    )
    
    
    (1,083,096
    )Net (Loss)
    
    $
    (2,414,438
    )
    
    $
    (3,046,370
    )Weighted Average Units Outstanding
    
    
    26,672
    
    
    
    25,794Net (Loss) Per Unit  Basic and Diluted
    
    $
    (90.52
    )
    
    $
    (118.10
    )
   61




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CENTRAL IOWA ENERGY, LLC
  MembershipMember
    
    
    Units Earned But
    
    
    Retained
    
    
    Total MembersMember units
    
    
    Contributions
    
    
    Not Issued
    
    
    (Deficit)
    
    
    EquityBalance  September 30, 2006
    
    $
    24,434
    
    
    $
    22,216,120
    
    
    $
    23,000
    
    
    $
    (945,188
    )
    
    $
    21,293,932Exercise of stock options
    
    
    1,200
    
    
    
    600,000
    
    
    
    
    
    
    
    
    
    
    
    600,000Members units earned but not issued
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    10,000Issued 38 units for 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
    )
    
    
    19,857,562Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,414,438
    )
    
    
    (2,414,438
    )Balance  September 30, 2008
    
    
    26,672
    
    
    $
    23,849,120
    
    
    $
    
    
    
    $
    (6,405,996
    )
    
    $
    17,443,124
   62




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CENTRAL IOWA ENERGY, LLC
  Year Ended
    
    
    Year EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007Cash Flows from Operating ActivitiesNet (loss)
    
    $
    (2,414,438
    )
    
    $
    (3,046,370
    )Adjustments to reconcile net (loss) to net cash used in operating activities:Depreciation and amortization
    
    
    2,627,221
    
    
    
    1,266,989Membership units earned but not issued
    
    
    
    
    
    
    10,000Change in assets and liabilitiesDue from broker
    
    
    107,392
    
    
    
    (326,072
    )Accounts receivable
    
    
    (41,403
    )
    
    
    (1,159,184
    )Other receivable
    
    
    592,044
    
    
    
    (1,049,262
    )Inventories
    
    
    (1,859,720
    )
    
    
    (5,896,934
    )Prepaid expenses
    
    
    23,423
    
    
    
    (105,263
    )Derivative instruments
    
    
    (790,038
    )
    
    
    719,482Accounts payable
    
    
    73,529
    
    
    
    1,421,764Accrued expenses
    
    
    190,574
    
    
    
    87,438Accrued interest payable
    
    
    (41,946
    )
    
    
    204,092Net cash used in operating activities
    
    
    (1,533,362
    )
    
    
    (7,873,320
    )Cash Flows from Investing ActivitiesCapital expenditures
    
    
    (76,688
    )
    
    
    (11,543,906
    )Sales tax refund from equipment purchases
    
    
    461,517
    
    
    
    Purchase of land
    
    
    
    
    
    
    (6,711,169
    )Net cash provided by (used in) investing activities
    
    
    384,829
    
    
    
    (18,255,075
    )Cash Flows from Financing Activities(Decrease) in checks drawn in excess of bank balance
    
    
    
    
    
    
    (216,613
    )Proceeds on revolving line of credit
    
    
    1,400,000
    
    
    
    1,600,000Proceeds from long-term debt
    
    
    400,000
    
    
    
    27,000,000Payments for long-term debt
    
    
    (2,229,683
    )
    
    
    (473,461
    )Payments for financing costs
    
    
    
    
    
    
    (82,806
    )Member contributions
    
    
    
    
    
    
    600,000Other
    
    
    
    
    
    
    (30,000
    )Net cash provided by (used in) financing activities
    
    
    (429,683
    )
    
    
    28,397,120Net Increase (Decrease) in Cash
    
    
    (1,578,216
    )
    
    
    2,268,725Cash and cash equivalents  Beginning of Period
    
    
    2,268,725
    
    
    
    Cash and cash equivalents  End of Period
    
    $
    690,509
    
    
    $
    2,268,725Supplemental Disclosure of Cash Flow Information,cash payments for interest, net of amount capitalized
    
    $
    2,186,645
    
    
    $
    938,968Supplemental Disclosure of Noncash Investing and Financing ActivitiesMembership units issued for capital expenditures
    
    $
    
    
    
    $
    1,000,000Capital lease obligations incurred for use of equipment
    
    $
    
    
    
    $
    115,000Land improvements financed by grants
    
    $
    
    
    
    $
    745,000Amortization of financing costs included in construction in progress
    
    $
    
    
    
    $
    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 yearsOffice building
    
    10-20 yearsOffice equipment
    
    5 yearsPlant and process equipment
    
    10-20 years
  FINANCING COSTS 
 FAIR VALUE OF FINANCIAL INSTRUMENTS 
    65




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
     Total
    
    
    Quoted
    
    
    SignificantCarrying
    
    
    Prices in
    
    
    Other
    
    
    SignificantValue at
    
    
    Active
    
    
    Observable
    
    
    UnobservableSeptember 30,
    
    
    Markets
    
    
    Inputs
    
    
    Inputs2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsDerivative financial instruments assets
    
    $
    70,556
    
    
    $
    70,556
    
    
    $
    
    
    
    $
    
  DEFERRED GRANT FINANCING 
 INCOME TAXES 
  66




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS 
 RECLASSIFICATIONS 
 NOTE B: INVENTORIES
  2008
    
    
    2007Raw materials
    
    $
    1,895,423
    
    
    $
    2,440,066Work in process
    
    
    140,398
    
    
    
    118,597Finished goods
    
    
    5,740,651
    
    
    
    3,358,089Total
    
    $
    7,776,472
    
    
    $
    5,916,752
 NOTE C: MEMBERS EQUITY
    NOTE D: RELATED PARTY TRANSACTIONS
    67




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
  NOTE E: REVOLVING LINE OF CREDIT
  NOTE F: LONG-TERM DEBT
  2008
    
    
    2007Mortgage Term Note payable to F & M Bank  Iowa  See
details below
    
    $
    19,361,401
    
    
    $
    21,529,081Iowa Department of Economic Development  See details below
    
    
    370,000
    
    
    
    Term Revolving Note payable to F & M Bank  Iowa  See
details below
    
    
    5,000,000
    
    
    
    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
    
    
    80,455
    
    
    
    112,458$
    24,811,856
    
    
    $
    26,641,539
   68




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
  2009
    
    $
    2,328,7232010
    
    
    2,339,7482011
    
    
    2,294,0082012
    
    
    17,719,3772013
    
    
    30,000Thereafter
    
    
    100,000Total long-term debt
    
    $
    24,811,856
        NOTE G: RETIREMENT PLAN
   69




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




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CENTRAL IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
     
    
    Raising equity through one or more private placement offerings or state
registered offering of the Companys membership units;
    
    Seeking additional sources of short-term debt financing and credit facilities
    
    Refinancing the current debt financing and credit facilities; or
    
    Seeking strategic business opportunities, including with other biodiesel plants;
     71




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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 8AT. CONTROLS AND PROCEDURES.
 Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
  
    
    Pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the Company;
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with Generally Accepted Accounting
Principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company; and
    
    Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Companys assets that could have a
material effect on the financial statements.
   Changes in Internal Control Over Financial Reporting
  
 ITEM 8B. OTHER INFORMATION.
   72




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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.
   73




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ITEM 13. EXHIBITS.
  Exhibit No.
    
    Description
    
    Method of Filing10.1
    
    First Amendment to the Amended and Restated
Master Loan Agreement between F & M Bank 
Iowa and Central Iowa Energy, LLC dated
October 14, 2008.
    
    *10.2
    
    Second 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 14,
2008.
    
    *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. 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
   74




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SIGNATURES
  CENTRAL IOWA ENERGY, LLCDate: 12/17/08
    /s/ John Van ZeeJohn Van ZeePresident and Director
(Principal Executive Officer) Date: 12/17/08
    /s/ Kimberly SmithKimberly Smith(Principal Financial and Accounting Officer)  Date:
    
    12/17/08
    
    
    
    /s/ John Van ZeeJohn Van Zee, President and Director
(Principal Executive Officer)Date:
    
    12/17/08
    
    
    
    /s/ Jim JohnstonJim Johnston, Chairman and DirectorDate:
    
    12/17/08
    
    
    
    /s/ Scot FarverScot Farver, DirectorDate:
    
    12/17/08
    
    
    
    /s/ Jeremie ParrJeremie Parr, Secretary and DirectorDate:
    
    12/17/08
    
    
    
    /s Warren L. BushWarren L. Bush, DirectorDate:
    
    12/17/08
    
    
    
    /s/ Craig HamiltonCraig Hamilton, DirectorDate:
    
    12/19/08
    
    
    
    /s/ William J. HoranWilliam J. Horan, DirectorDate:
    
    12/17/08
    
    
    
    /s/ Don HuyserDon Huyser, Treasurer and DirectorDate:
    
    12/17/08
    
    
    
    /s/ Dean LaneDean Lane, DirectorDate:
    
    12/17/08
    
    
    
    /s/ Denny MauserDenny Mauser, DirectorDate:
    
    12/17/08
    
    
    
    /s/ William J. TalsmaWilliam J. Talsma, Director
  75




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EXHIBIT
INDEX
 Exhibit No.
    
    Description
    
    Method of Filing10.1
    
    First Amendment to the Amended and Restated
Master Loan Agreement between F & M Bank 
Iowa and Central Iowa Energy, LLC dated
October 14, 2008.
    
    *10.2
    
    Second 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 14,
2008.
    
    *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