##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 
 þ
    
    Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal year ended September 30, 2009
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from  to
 Commission file number 000-52428
 IOWA RENEWABLE ENERGY, LLC
  Iowa
    
    20-3386000(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)1701 East 7thStreet, Washington, Iowa
    
    52353(Address of principal executive offices)
    
    (Zip Code)
 (319) 653-2890
  None
  26,331
 o Yes þ No
 o Yes þ No
  þ o
 o Yes o No
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



Table of Contents
 PART I
    
    
    3ITEM 1. BUSINESS
    
    
    3ITEM 1A. RISK FACTORS
    
    
    26ITEM 2. PROPERTIES
    
    
    37ITEM 3. LEGAL PROCEEDINGS
    
    
    37ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    38PART II
    
    
    38ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED MEMBER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    38ITEM 6. SELECTED FINANCIAL DATA
    
    
    39ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    39ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    49ITEM 8. FINANCIAL STATEMENTS
    
    
    50ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    63ITEM 9AT. CONTROLS AND PROCEDURES
    
    
    63ITEM 9B. OTHER INFORMATION
    
    
    64PART III
    
    
    64ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
    
    
    64ITEM 11. EXECUTIVE COMPENSATION
    
    
    64ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER MATTERS
    
    
    64ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    64ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    64ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    
    
    64SIGNATURES
    
    
    65Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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AVAILABLE INFORMATION
  
 PART I
 
 ITEM 1. BUSINESS.
 Business Development
   
    
    Lack of biodiesel contracts at profitable margins;
    
    Our inability to obtain adequate amounts of feedstock in a timely manner;
    
    Our inability to obtain adequate amounts of feedstock at competitive costs;
    
    Lack of demand for biodiesel;
    
    Inadequate funds to obtain feedstock due to having to pay for feedstock
while waiting for payments from our biodiesel sales; and
    
    Insufficient working capital to operate our business.
    3




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General Demand
   4




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Principal Products and Markets
   Primary Product-Biodiesel
    Glycerin
   5




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Biodiesel Markets
   Wholesale Market/Biodiesel Marketers
  Retail Market
  
    
    additional storage facilities for biodiesel;
 
    
    expansion in refining and blending facilities to handle biodiesel; and
 
    
    growth in service stations equipped to handle biodiesel fuels.
  6




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International Markets
  Government/Public Sector
  Glycerin Markets and Demand
     7




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Distribution of Principal Products
    Sources and Availability of Raw Materials
 Feedstock Cost and Supply
    8




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Soybean Oil
  U.S.
Soybean Oil Average Prices for
the Past 10 Years
 Marketing Year
    
    Price (cents)1999/00
    
    
    15.602000/01
    
    
    14.152001/02
    
    
    16.462002/03
    
    
    22.042003/04
    
    
    29.972004/05
    
    
    23.012005/06
    
    
    23.412006/07
    
    
    31.022007/08
    
    
    52.032008/09
    
    
    32.162009/2010
    
    
    35.5-38.5
    (1)
 U.S. Soybean Oil Average Prices
for 2008-2009
Marketing Year
 Month
    
    Price (cents)October 2008
    
    
    35.50November 2008
    
    
    31.55December 2008
    
    
    29.30January 2009
    
    
    32.16February 2009
    
    
    28.93March 2009
    
    
    28.23April 2009
    
    
    32.76May 2009
    
    
    36.06June 2009
    
    
    35.66July 2009
    
    
    31.08August 2009
    
    
    33.69September 2009
    
    
    30.96October 2009
    
    
    33.15November 2009(1)
    
    
    36.59
 (1)
    
    Preliminary Price Data provided by USDA, Oil Crops Outlook Report, December 11, 2009
   Animal Fats and Other Alternative Feedstocks
   9




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Lard & Edible Tallow Average Prices for Past
Ten Years
 EdibleTallowMarketing Year
    
    Lard (cents)
    
    
    (cents)1999/00
    
    
    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
    
    
    
    41.682008/09
    
    
    26.72
    
    
    
    25.472009/2010
    
    
    27.5-31.5
    (1)
    
    
    29.5-32.5
    (1)
 Lard & Edible Tallow Average Prices for 2008-2009
Marketing Year
 EdibleTallowMonth
    
    Lard (cents)
    
    
    (cents)October 2008
    
    
    37.07
    
    
    
    26.97November 2008
    
    
    26.40
    
    
    
    18.13December 2008
    
    
    20.00
    
    
    
    17.50January 2009
    
    
    25.36
    
    
    
    23.36February 2009
    
    
    20.31
    
    
    
    21.40March 2009
    
    
    19.49
    
    
    
    19.42April 2009
    
    
    23.36
    
    
    
    23.77May 2009
    
    
    29.00
    
    
    
    28.92June 2009
    
    
    30.06
    
    
    
    30.14July 2009
    
    
    27.63
    
    
    
    27.64August 2009
    
    
    32.20
    
    
    
    34.14September 2009
    
    
    29.73
    
    
    
    34.21October 2009
    
    
    25.75
    
    
    
    27.63November 2009
    
    
    30.07
    (1)
    
    
    29.65
    (1)
 (1)
    
    Preliminary Prices Data provided by USDA, Oil Crops Outlook Report, December 11, 2009
    10




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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
    11




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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 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
  Electricity.
 Water and Sewer
 Natural Gas
 Rail.
 New Products and Services
  Government Regulation and Federal Biodiesel Supports
 Federal Biodiesel Supports
   12




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Renewable Fuels Standard
   Biodiesel Tax Credit
   13




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Commodity Credit Corporation Bioenergy Program
  Biofuels Interagency Working Group
  State Legislation
     14




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Future Legislation
  Competition with Other Biodiesel Producers
      15




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16




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Commercial Biodiesel Production Plants (December 7, 2009).
 Ann.Production
    
    
    
    
    StartCompany
    
    City
    
    State
    
    Capacity
    
    
    Feedstock
    
    date
    
    BQ9000Allied Renewable Energy, LLC
    
    Birmingham
    
    AL
    
    
    15,000,000
    
    
    Soy
    
    May-07Eagle Biodiesel, Inc.
    
    Bridgeport
    
    AL
    
    
    30,000,000
    
    
    Multi Feedstock
    
    Apr-07N.A.B. Energy Group, Inc.
    
    Florence
    
    ALDelta American Fuel, LLC
    
    Helena
    
    AR
    
    
    40,000,000
    
    
    Multi Feedstock
    
    Mar-09Amereco Biofuels Corp.
    
    Arlington
    
    AZ
    
    
    15,000,000
    
    
    Multi Feedstock
    
    Sep-07Environmental Development Group
    
    Tucson
    
    AZ
    
    
    1,500,000
    
    
    Recycled Cooking Oil
    
    Aug-09Grecycle Arizona, LLC
    
    Tucson
    
    AZ
    
    
    2,500,000
    
    
    Yellow Grease
    
    May-09Performance Biofuels, LLC
    
    Chandler
    
    AZ
    
    
    1,500,000
    
    
    Recycled Cooking Oil
    
    Dec-08Baker Commodities
    
    Los Angeles
    
    CA
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Dec-10Biodiesel Industries of Ventura, LLC
    
    Port Hueneme
    
    CA
    
    
    3,000,000
    
    
    Full Spectrum, including but not limited to yellow grease, jatropha & algae
    
    Aug-09Community Fuels
    
    Stockton
    
    CA
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Jun-08Crimson Renewable Energy, LP
    
    Bakersfield
    
    CA
    
    
    30,000,000
    
    
    Multi Feedstock
    
    3Q 2009Eco Energy Biodiesel, Inc.
    
    Adelanto
    
    CA
    
    
    1,000,000
    
    
    Multi Feedstock
    
    3Q 2009Enviro Fuels Enterprises, LLC
    
    Fresno
    
    CA
    
    
    
    
    
    
    
    3Q 2009GeoGreen Biofuels, LLC
    
    Vernon
    
    CA
    
    
    3,000,000
    
    
    Recycled Cooking Oil
    
    Apr-09Imperial Western Products
    
    Coachella
    
    CA
    
    
    8,000,000
    
    
    Multi Feedstock
    
    Oct-01
    
    *Manning Beef, LLC
    
    Pico Rivera
    
    CA
    
    
    
    
    
    Tallow
    
    3Q 2009New Leaf Biofuel, LLC
    
    San Diego
    
    CA
    
    
    
    
    
    
    
    Dec-08Noil Energy Group
    
    Commerce
    
    CA
    
    
    5,000,000
    
    
    Multi Feedstock
    
    2Q 2009Promethean Biofuels Cooperative Corporation
    
    Temecula
    
    CARenewable Energy Products, LLC
    
    Santa Fe Springs
    
    CA
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Jul-08Simple Fuels Biodiesel, Inc.
    
    Chilcoot
    
    CA
    
    
    
    
    
    
    
    3Q 2009Whole Energy Fuels
    
    Pacifica
    
    CA
    
    
    3,000,000
    
    
    Recycled Cooking Oil
    
    2Q 2009Wright Biofuels, Inc.
    
    San Jacinto
    
    CA
    
    
    5,500,000
    
    
    Multi Feedstock
    
    Sep-07Yokayo Biofuels, Inc.
    
    Ukiah
    
    CA
    
    
    350,000
    
    
    Recycled Cooking Oil
    
    Apr-06Hawaiian Islands Bioenergy, Inc.
    
    Parker
    
    CO
    
    
    1,000,000
    
    
    Multi Feedstock
    
    May-09BioDiesel One Ltd.
    
    Southington
    
    CT
    
    
    4,000,000
    
    
    Recycled Cooking Oil
    
    Feb-09BioPur Inc.
    
    Bethlehem
    
    CT
    
    
    1,000,000
    
    
    Multi Feedstock
    
    Jul-06Clayton
    
    Clayton
    
    DE`
    
    
    11,000,000
    
    
    Multi-Feedstock
    
    Jan-10
  17




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Ann.Production
    
    
    
    
    StartCompany
    
    City
    
    State
    
    Capacity
    
    
    Feedstock
    
    date
    
    BQ9000Agri-Source Fuels, Inc.
    
    Dade City
    
    FL
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Oct-07New Eden Energy, LLC
    
    St. Cloud
    
    FL
    
    
    1,000,000
    
    
    Recycled Cooking Oil
    
    Dec-08Smart Fuels, LLC
    
    Fruitland Park
    
    FL
    
    
    
    
    
    
    
    3Q 2009Southern Biodiesel Corporation
    
    Miami
    
    FL
    
    
    
    
    
    
    
    4Q 2009Alterra Bioenergy of Middle Georgia, LLC
    
    Gordon
    
    GA
    
    
    15,000,000
    
    
    Multi Feedstock
    
    Aug-07Alterra Bioenergy of Plains Georgia, LLC
    
    Plains
    
    GA
    
    
    30,000,000
    
    
    Soy
    
    4Q 2008BullDog BioDiesel
    
    Ellenwood
    
    GA
    
    
    18,000,000
    
    
    Multi Feedstock
    
    Jan-08Down to Earth Energy, Inc.
    
    Monroe
    
    GA
    
    
    2,000,000
    
    
    Multi Feedstock
    
    Aug-09ECO Solutions, LLC
    
    Chatsworth
    
    GA
    
    
    25,000,000
    
    
    Multi Feedstock
    
    Aug-07Middle Georgia Biofuels
    
    East Dublin
    
    GA
    
    
    1,500,000
    
    
    Poultry Fat, Tallow
    
    Apr-06Peach State Labs
    
    Rome
    
    GA
    
    
    
    
    
    Soy
    
    Jan-05
    
    *Perfect Circle Renewable Energy, LLC
    
    Atlanta
    
    GA
    
    
    
    
    
    Recycled Cooking Oil
    
    Jul-09Seminole Biodiesel
    
    Bainbridge
    
    GA
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Jan-08AGP
    
    Sergeant Bluff
    
    IA
    
    
    30,000,000
    
    
    Soy
    
    Aug-96
    
    *Cargill
    
    Iowa Falls
    
    IA
    
    
    37,500,000
    
    
    Soy
    
    Jun-06
    
    *Central Iowa Energy, LLC
    
    Newton
    
    IA
    
    
    30,000,000
    
    
    Multi Feedstock
    
    Apr-07
    
    *Energy Tec, LLC
    
    Maquoketa
    
    IA
    
    
    37,000
    
    
    
    
    Sep-08Iowa Renewable Energy, LLC
    
    Washington
    
    IA
    
    
    30,000,000
    
    
    Multi Feedstock
    
    Jul-07
    
    *Maple River Energy, LLC
    
    Galva
    
    IA
    
    
    5,000,000
    
    
    Soy
    
    May-09Nova Biosource Clinton County
    
    Clinton
    
    IA
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Apr-06REG Ralston, LLC
    
    Ralston
    
    IA
    
    
    12,000,000
    
    
    Multi Feedstock
    
    2002
    
    *Riksch BioFuels, LLC
    
    Crawfordsville
    
    IA
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Dec-06Sioux Biochemical, Inc.
    
    Sioux Center
    
    IA
    
    
    2,000,000
    
    
    Corn, Soy
    
    Dec-06Western Dubuque Biodiesel
    
    Farley
    
    IA
    
    
    30,000,000
    
    
    Crude or Refined Vegetable Oils
    
    Aug-07
    
    *Western Iowa Energy, LLC
    
    Wall Lake
    
    IA
    
    
    30,000,000
    
    
    Multi Feedstock
    
    Jun-06
    
    *BiofuelBox Corporation
    
    American Falls
    
    ID
    
    
    1,000,000
    
    
    Waste Vegetable Oil, Brown Grease
    
    Feb-09Blue Sky Biodiesel, LLC
    
    New Plymouth
    
    ID
    
    
    10,000,000
    
    
    Soy
    
    Jul-06Pleasant Valley Biofuels, LLC
    
    American Falls
    
    ID
    
    
    1,500,000
    
    
    Recycled Cooking Oil, Tallow
    
    Aug-08BioVantage Fuels, LLC
    
    Belvidere
    
    IL
    
    
    5,000,000
    
    
    Multi Feedstock
    
    3Q 2009
  18




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Ann.Production
    
    
    
    
    StartCompany
    
    City
    
    State
    
    Capacity
    
    
    Feedstock
    
    date
    
    BQ9000Blackhawk Biofuels, LLC
    
    Danville
    
    IL
    
    
    45,000,000
    
    
    Multi Feedstock
    
    Nov-08
    
    *Incobrasa Industries, Ltd.
    
    Gilman
    
    IL
    
    
    31,000,000
    
    
    Soy
    
    Jan-07Midwest Biodiesel Products, Inc.
    
    South Roxanna
    
    IL
    
    
    30,000,000
    
    
    Multi Feedstock
    
    May-07Nova Biosource Seneca
    
    Seneca
    
    IL
    
    
    60,000,000
    
    
    Multi Feedstock
    
    Apr-08
    
    *Stepan Company
    
    Millsdale
    
    IL
    
    
    22,000,000
    
    
    Multi Feedstock
    
    Jan-01
    
    *Alternative Fuel Solutions, LLC
    
    Huntington
    
    IN
    
    
    
    
    
    
    
    3Q 2009e-biofuels, LLC
    
    Middletown
    
    IN
    
    
    15,000,000
    
    
    Multi Feedstock
    
    Jun-07Integrity Biofuels
    
    Morristown
    
    IN
    
    
    10,000,000
    
    
    Soy
    
    Aug-06Kingsbury Energy Group, LLC
    
    La Porte
    
    IN
    
    
    
    
    
    Soy
    
    Dec-08Louis Dreyfus Agricultural Industries, LLC
    
    Claypool
    
    IN
    
    
    80,000,000
    
    
    Soy
    
    Jan-08
    
    *Healy Biodiesel, Inc.
    
    Sedgwick
    
    KS
    
    
    1,000,000
    
    
    Recycled Cooking Oil
    
    Jun-07REG Emporia, LLC
    
    Emporia
    
    KS
    
    
    60,000,000
    
    
    Multi Feedstock
    
    2Q 2010Griffin Industries
    
    Butler
    
    KY
    
    
    1,750,000
    
    
    Multi Feedstock
    
    Dec-98
    
    *Owensboro Grain
    
    Owensboro
    
    KY
    
    
    50,000,000
    
    
    Soy
    
    Jan-08REG New Orleans, LLC
    
    New Orleans
    
    LA
    
    
    60,000,000
    
    
    Multi Feedstock
    
    2Q 2010Baker Commodities
    
    Billerica
    
    MA
    
    
    15,000,000
    
    
    Multi Feedstock
    
    Dec-10Baystate Biofuels, LLC
    
    North Andover
    
    MA
    
    
    10,000,000
    
    
    Multi Feedstock
    
    3Q 2009Biofuels of New England, LLC
    
    Newburyport
    
    MA
    
    
    300,000
    
    
    Recycled Cooking Oil
    
    Nov-08MBP Bioenergy, LLC
    
    Attleboro
    
    MA
    
    
    500,000
    
    
    Recycled Cooking Oil
    
    Nov-06Eagle Creek Fuel Services, LLC
    
    Baltimore
    
    MD
    
    
    
    
    
    Recycled Cooking Oil, Multi Feedstock
    
    Aug-08Greenlight Biofuels, LLC
    
    Princess Anne
    
    MD
    
    
    4,000,000
    
    
    Multi Feedstock
    
    Oct-07Michigan Biodiesel, LLC
    
    Bangor
    
    MI
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Jan-07TPA Inc.
    
    Warren
    
    MI
    
    
    20,000,000
    
    
    Multi Feedstock
    
    Jul-08Ever Cat Fuels, LLC
    
    Isanti
    
    MN
    
    
    3,000,000
    
    
    Multi Feedstock
    
    Aug-09FUMPA BioFuels
    
    Redwood Falls
    
    MN
    
    
    3,000,000
    
    
    Multi Feedstock
    
    Dec-04Minnesota Soybean Processors
    
    Brewster
    
    MN
    
    
    30,000,000
    
    
    Soy
    
    Aug-05
    
    *AGP
    
    St. Joseph
    
    MO
    
    
    29,900,000
    
    
    Soy
    
    Sep-07
    
    *American Energy Producers, Inc.
    
    Carrollton
    
    MO
    
    
    50,000,000
    
    
    Soy
    
    4Q 2009
  19




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##### Table of Contents



Ann.Production
    
    
    
    
    StartCompany
    
    City
    
    State
    
    Capacity
    
    
    Feedstock
    
    date
    
    BQ9000Global Fuels, LLC
    
    Dexter
    
    MO
    
    
    3,000,000
    
    
    Multi Feedstock
    
    Apr-07Mid America Biofuels, LLC
    
    Mexico
    
    MO
    
    
    30,000,000
    
    
    Soy
    
    Dec-06
    
    *Paseo Cargill Energy, LLC
    
    Kansas City
    
    MO
    
    
    37,500,000
    
    
    Soy, Animal Fats
    
    Apr-08
    
    *Prairie Pride
    
    Deerfield
    
    MO
    
    
    30,000,000
    
    
    Soy
    
    Dec-07
    
    *Producers Choice Soy Energy LLC
    
    Moberly
    
    MO
    
    
    5,000,000
    
    
    Soy
    
    Jun-09Terra Bioenergy, LLC
    
    St. Joseph
    
    MO
    
    
    30,000,000
    
    
    Multi Feedstock
    
    4Q 2009Delta Biofuels, Inc.
    
    Natchez
    
    MS
    
    
    80,000,000
    
    
    Multi Feedstock
    
    May-07
    
    *GreenLight Biofuels, LLC
    
    Meridian
    
    MS
    
    
    
    
    
    
    
    Mar-09Scott Petroleum Corporation
    
    Greenville
    
    MS
    
    
    20,000,000
    
    
    Multi Feedstock
    
    Oct-07
    
    *Earl Fisher Bio Fuels
    
    Chester
    
    MT
    
    
    250,000
    
    
    Canola, Camelina, Safflower, Sunflower
    
    Apr-08Blue Ridge Biofuels
    
    Asheville
    
    NC
    
    
    1,000,000
    
    
    Multi Feedstock
    
    May-06Evans Environmental Energies, Inc.
    
    Wilson
    
    NC
    
    
    3,000,000
    
    
    
    
    May-07Foothills Bio-Energies, LLC
    
    Lenoir
    
    NC
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Sep-06Leland Organic Corporation
    
    Leland
    
    NC
    
    
    30,000,000
    
    
    Multi Feedstock
    
    Sep-08Patriot Biodiesel, LLC
    
    Greensboro
    
    NC
    
    
    1,500,000
    
    
    Multi Feedstock
    
    Dec-08Piedmont Biofuels
    
    Pittsboro
    
    NC
    
    
    4,000,000
    
    
    Multi Feedstock
    
    Nov-06
    
    *Triangle Biofuels Industries, Inc.
    
    Wilson
    
    NC
    
    
    3,000,000
    
    
    Multi Feedstock
    
    Jan-08ADM
    
    Velva
    
    ND
    
    
    85,000,000
    
    
    Canola
    
    Aug-07
    
    *Atlantic Biodiesel
    
    Salem
    
    NH
    
    
    3,000,000
    
    
    
    
    3Q 2009White Mountain Biodiesel, LLC
    
    North Haverhill
    
    NH
    
    
    
    
    
    
    
    3Q 2009Fuel Bio One, LLC
    
    Elizabeth
    
    NJ
    
    
    50,000,000
    
    
    Multi Feedstock
    
    Mar-07Innovation Fuels
    
    Newark
    
    NJ
    
    
    40,000,000
    
    
    Multi Feedstock
    
    Jul-04
    
    *ARFuels, LLC
    
    Clovis
    
    NM
    
    
    30,000,000
    
    
    Multi Feedstock
    
    3Q 2010Rio Valley Biofuels, LLC
    
    Anthony
    
    NM
    
    
    750,000
    
    
    Multi Feedstock
    
    Jul-06Bently Biofuels
    
    Minden
    
    NV
    
    
    1,000,000
    
    
    Multi Feedstock
    
    Nov-05Biodiesel of Las Vegas
    
    Las Vegas
    
    NV
    
    
    100,000,000
    
    
    Multi Feedstock
    
    4Q 2009Metro Fuel Oil Corp.
    
    Brooklyn
    
    NY
    
    
    
    
    
    
    
    2009Northern Biodiesel, Inc.
    
    Ontario
    
    NY
    
    
    20,000,000
    
    
    
    
    Jun-08
  20




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##### Table of Contents



Ann.Production
    
    
    
    
    StartCompany
    
    City
    
    State
    
    Capacity
    
    
    Feedstock
    
    date
    
    BQ9000TMT Biofuels, LLC
    
    Port Leyden
    
    NY
    
    
    250,000
    
    
    Recycled Cooking Oil
    
    Sep-08Agrifuels, LLC
    
    Bremen
    
    OH
    
    
    1,000,000
    
    
    Multi Feedstock
    
    Mar-07Ambiol Flex Fuels, LLC
    
    East Toledo
    
    OH
    
    
    2,000,000
    
    
    Soy
    
    Feb-08American Ag Fuels, LLC
    
    Defiance
    
    OH
    
    
    7,000,000
    
    
    Multi Feedstock
    
    Jul-05Arlington Energy, LLC
    
    Mansfield
    
    OH
    
    
    4,000,000
    
    
    Multi Feedstock
    
    Jul-08Center Alternative Energy Company
    
    Cleveland
    
    OH
    
    
    5,000,000
    
    
    Soy, Choice White Grease, yellow grease, tallow
    
    May-07Jatrodiesel Inc.
    
    Miamisburg
    
    OH
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Jun-07Peter Cremer NA
    
    Cincinnati
    
    OH
    
    
    30,000,000
    
    
    Soy
    
    Oct-02
    
    *PK Biodiesel
    
    Woodstock
    
    OH
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Aug-08Twin Rivers Technologies Natural Ingredients, LLC
    
    Cincinnati
    
    OH
    
    
    60,000,000
    
    
    Multiple Feedstocks
    
    Dec-06
    
    *High Plains Bioenergy
    
    Guymon
    
    OK
    
    
    30,000,000
    
    
    Multi Feedstock
    
    Mar-08
    
    *South East Oklahoma Biodiesel
    
    Valliant
    
    OK
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Nov-08Tulsa Biofuels, LLC
    
    Tulsa
    
    OK
    
    
    
    
    
    
    
    Nov-07Beaver Biodiesel, LLC
    
    Albany
    
    OR
    
    
    1,200,000
    
    
    Multi Feedstock
    
    Feb-09Green Fuels of Oregon, Inc.
    
    Klamath Falls
    
    OR
    
    
    1,000,000
    
    
    Canola, Waste Vegetable Oil
    
    Mar-07Biodiesel of Pennsylvania, Inc.
    
    White Deer
    
    PA
    
    
    1,500,000
    
    
    Multi Feedstock
    
    Mar-07Eagle Bio Diesel
    
    Kane
    
    PA
    
    
    
    
    
    
    
    2Q 2009Keystone BioFuels, Inc.
    
    Shiremanstown
    
    PA
    
    
    
    
    
    Multi Feedstock
    
    Mar-06Lake Erie Biofuels
    
    Erie
    
    PA
    
    
    45,000,000
    
    
    Soy
    
    Sep-07
    
    *Middletown Biofuels, LLC
    
    Middletown
    
    PA
    
    
    4,000,000
    
    
    Soy
    
    Jun-07Mother Earth Energy, Inc.
    
    Chester
    
    PA
    
    
    3,500,000
    
    
    Recycled Cooking Oil, Vegetable Oils
    
    3Q 2009Pennslyvania Biodiesel, Inc.
    
    Monaca
    
    PA
    
    
    25,000,000
    
    
    Multi Feedstocks
    
    Jul-09Soy Energy, Inc.
    
    New Oxford
    
    PA
    
    
    1,500,000
    
    
    Soy
    
    Feb-07United Biofuels, Inc.
    
    York
    
    PA
    
    
    3,000,000
    
    
    Multi Feedstock
    
    Apr-06United Oil Company
    
    Pittsburgh
    
    PA
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Dec-05US Alternative Fuels Corp.
    
    Johnstown
    
    PA
    
    
    
    
    
    
    
    4Q 2008Lantic Green Energy, LLC
    
    West Greenwich
    
    RI
    
    
    
    
    
    
    
    1Q 2009Newport Biodiesel, LLC
    
    Newport
    
    RI
    
    
    500,000
    
    
    Recycled Cooking Oil
    
    Jan-08
  21




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Ann.Production
    
    
    
    
    StartCompany
    
    City
    
    State
    
    Capacity
    
    
    Feedstock
    
    date
    
    BQ9000Cateechee Biofuels, LLC
    
    Central
    
    SC
    
    
    
    
    
    
    
    3Q 2009Ecogy Biofuels, LLC
    
    Estill
    
    SC
    
    
    30,000,000
    
    
    Soy
    
    Dec-07Green Valley Biofuels, LLC
    
    Warrenville
    
    SC
    
    
    10,000,000
    
    
    Multi Feedstock
    
    3Q 2009Greenlight Biofuels, LLC
    
    Laurens
    
    SC
    
    
    10,000,000
    
    
    Multi Feedstock
    
    4Q 2008Greenpath Biofuels of Myrtle Beach, Inc.
    
    Conway
    
    SC
    
    
    
    
    
    Recycled Cooking Oil
    
    4Q 2009Southeast BioDiesel, LLC
    
    North Charleston
    
    SC
    
    
    8,000,000
    
    
    Multi Feedstock
    
    Jan-07Midwest BioDiesel Producers, LLC
    
    Alexandria
    
    SD
    
    
    7,000,000
    
    
    Multi Feedstock
    
    Mar-06Milagro Biofuels of Memphis
    
    Memphis
    
    TN
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Oct-06Southern Alliance for Clean Energy
    
    Knoxville
    
    TN
    
    
    380,000
    
    
    Recycled Cooking Oil
    
    Jul-09SunsOil, LLC
    
    Athens
    
    TN
    
    
    1,500,000
    
    
    Multi Feedstock
    
    Oct-07Agribiofuels, LLC
    
    Dayton
    
    TX
    
    
    12,000,000
    
    
    Multi Feedstock
    
    Dec-06AgriMax Fuels, LLC
    
    Channelview
    
    TX
    
    
    3,000,000
    
    
    Soy
    
    Mar-07Beacon Energy
    
    Cleburne
    
    TX
    
    
    12,000,000
    
    
    Multi Feedstock
    
    Mar-06
    
    *Biodiesel of Texas, Inc.
    
    Denton
    
    TX
    
    
    360,000
    
    
    Multi Feedstock
    
    3Q 2009BioSelect Fuels (GBBLP)
    
    Galveston
    
    TX
    
    
    30,000,000
    
    
    Multi Feedstock
    
    May-07Brownfield Biodiesel, LLC
    
    Ralls
    
    TX
    
    
    2,000,000
    
    
    Cottonseed, Soy, Canola
    
    Apr-06Direct Fuels
    
    Euless
    
    TX
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Feb-08
    
    *Global Alternative Fuels, LLC
    
    El Paso
    
    TX
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Mar-09Green Earth Fuels of Houston, LLC
    
    Galena Park
    
    TX
    
    
    90,000,000
    
    
    Multi Feedstock
    
    Jul-07Greenlight Biofuels, Ltd.
    
    Littlefield
    
    TX
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Aug-07Hardin Fuels, Inc.
    
    Kountze
    
    TX
    
    
    
    
    
    
    
    Mar-08Mississippi Investment Petroleum Co., LLC
    
    Houston
    
    TX
    
    
    5,000,000
    
    
    Poultry Fat, Recycled Cooking Oil
    
    3Q 2009New Fuel Company
    
    Dallas
    
    TX
    
    
    250,000
    
    
    Multi Feedstock
    
    Apr-06Organic Fuels, LLC
    
    Galena Park
    
    TX
    
    
    45,000,000
    
    
    Multi Feedstock
    
    Jan-06
    
    *RBF Port Neches, LLC
    
    Port Neches
    
    TX
    
    
    180,000,000
    
    
    Multi Feedstock
    
    4Q 2008Red River Biodiesel Ltd.
    
    New Boston
    
    TX
    
    
    15,000,000
    
    
    Multi Feedstock
    
    May-08REG Houston, LLC
    
    Seabrook
    
    TX
    
    
    35,000,000
    
    
    Multi Feedstock
    
    Jul-08Texas Green Manufacturing, LLC
    
    Littlefield
    
    TX
    
    
    1,250,000
    
    
    Tallow
    
    Apr-09
  22




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Ann.Production
    
    
    
    
    StartCompany
    
    City
    
    State
    
    Capacity
    
    
    Feedstock
    
    date
    
    BQ9000The Sun Products Corp
    
    Pasadena
    
    TX
    
    
    15,000,000
    
    
    Palm
    
    Jun-05
    
    *TM Chemicals LP
    
    Deer Park
    
    TX
    
    
    7,000,000
    
    
    Tallow
    
    Dec-08Denali Industries, LLC
    
    American Fork
    
    UT
    
    
    3,800,000
    
    
    Multi Feedstock
    
    Jul-07Chesapeake Custom Chemical
    
    Ridgeway
    
    VA
    
    
    5,500,000
    
    
    Multi Feedstock
    
    Jan-06RECO Biodiesel, LLC
    
    Richmond
    
    VA
    
    
    10,000,000
    
    
    Multi Feedstock
    
    Dec-06Red Birch Energy, Inc.
    
    Bassett
    
    VA
    
    
    2,500,000
    
    
    Multi Feedstock
    
    Jun-08REVNOVA Biofuels, LLC
    
    Remington
    
    VA
    
    
    
    
    
    
    
    Oct-08Synergy Biofuels, LLC
    
    Pennington Gap
    
    VA
    
    
    3,000,000
    
    
    Multi Feedstock
    
    Dec-08Virginia Biodiesel Refinery
    
    West Point
    
    VA
    
    
    7,000,000
    
    
    Multi Feedstock
    
    Oct-03General Biodiesel Seattle LLC
    
    Seattle
    
    WA
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Jun-09General Biodiesel Seattle LLC
    
    Seattle
    
    WA
    
    
    5,000,000
    
    
    Multi Feedstock
    
    3Q 2009Gen-X Energy Group, Inc.
    
    Burbank
    
    WA
    
    
    15,000,000
    
    
    Multi Feedstock
    
    Jun-07Imperium Grays Harbor
    
    Hoquiam
    
    WA
    
    
    100,000,000
    
    
    Multi Feedstock
    
    Aug-07
    
    *Inland Empire Oilseeds, LLC
    
    Odessa
    
    WA
    
    
    8,000,000
    
    
    Canola, Soy, Camelina
    
    Nov-08Whole Energy Fuels
    
    Bellingham
    
    WA
    
    
    
    
    
    Recycled Cooking Oil
    
    1Q 2009Best Biodiesel, Inc.
    
    Cashton
    
    WI
    
    
    10,000,000
    
    
    Multi Feedstocks
    
    Jan-08Bio Blend Fuels Inc.
    
    Manitowoc
    
    WI
    
    
    2,600,000
    
    
    
    
    May-09Sun Power Biodiesel, LLC
    
    Cumberland
    
    WI
    
    
    3,000,000
    
    
    sunflower, canola
    
    Dec-09Walsh Bio Fuels, LLC
    
    Mauston
    
    WI
    
    
    5,000,000
    
    
    Multi Feedstock
    
    May-07AC & S, Inc.
    
    Nitro
    
    WV
    
    
    3,000,000
    
    
    Soy
    
    Dec-07
 Source: National Biodiesel Board*
    
    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.  23




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Competition from Other Fuel Sources
    Glycerin Competition
   24




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Research and Development
  Dependence on One of a Few Major Customers
    Costs and Effects of Compliance with Environmental Laws
   25




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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 are experiencing liquidity issues which could require us to cease operations.
 We
have a history of losses and may not ever operate profitably.
 We may be required to write down our long-lived assets and these impairment charges would
adversely affect our operating results.
  26




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Our business is not diversified.
 We are in competition with REG, our design-builder, manager and marketer, which could place us
at a competitive disadvantage and cause a conflict of interest for REG.
 We have limited experience in the biodiesel industry, which increases the risk of our
inability to operate the biodiesel plant.
 We engage in hedging transactions which involve risks that can harm our business.
   27




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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.
   Changes in production technology could require us to commit resources to updating the
biodiesel plant or could otherwise hinder our ability to compete in the biodiesel industry or to
operate at a profit.
 Because our natural gas provider will not allow us to enter into forward contracts for our
natural gas, we may pay higher prices for our natural gas than other biodiesel producers, which
puts us at a competitive disadvantage and may increase our losses .
 Risks Related to Biodiesel Industry
 The downturn in the U.S. economy has caused demand for biodiesel to decline, which may
adversely affect our ability to generate revenues.
  28




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Several
biofuels companies throughout the country have filed for Chapter 11 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.
 The decline in 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 has led to the imposition of tariffs on biodiesel imported into
Europe, which could result in further losses from our business.
  29




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If demand for biodiesel fails to grow at the same rate as planned supply, the excess
production capacity will adversely impact our financial condition.
  Excess production of glycerin, the primary 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.
  30




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The biodiesel industry is becoming increasingly competitive and we compete with some larger,
better financed entities which could impact our ability to operate
profitably.
 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.
  31




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The decreasing availability and volatile cost of feedstock may hinder our ability to
profitably produce biodiesel and may result in plant shut downs and decreased revenues.
 If we are forced to continue to have to temporarily cease operating our biodiesel plant, we
might not be able to meet our current liabilities and 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.
 Concerns about fuel quality may impact our ability to successfully market our biodiesel.
  32




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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.
   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.
 Our management and operational services agreement with REG does not address feedstock
allocation between REG and its other customers which could lead to insufficient feedstock to
operate our plant and negatively affect our financial condition.
  33




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Risks Related to Our Financing Plan
 We are experiencing liquidity issues which could require us to cease operations.
 The loan agreement under which we obtained financing for the construction of our biodiesel
plant contains restrictive covenants.
  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.
  34




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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.
 Risks Related to Regulation and Governmental Action
 Loss of or ineligibility for favorable tax benefits for biodiesel production could further
hinder our ability to operate at a profit and reduce the value of our units.
 A change in environmental regulations or violations thereof could result in the devaluation of
our units.
 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 and preliminary findings that soybean
oil-based biodiesel does not meet the RFS standards may hinder stimulation of demand for biodiesel
that may have otherwise been created by the 2007 amendments to the RFS program
  35




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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.
  Our directors may have relationships with individuals, companies or organizations with which
we do business which may result in conflicts of interest.
 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 could be
subject to corporate level taxes which could decrease our net income, if any, 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.
  36




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We do not anticipate declaring distributions to members in the foreseeable future.
 
 ITEM 2. PROPERTIES.
  
    
    Administrative building
 
    
    Processing building
 
    
    Pretreatment building
 
    
    Storage tank farm
   
 ITEM 3. LEGAL PROCEEDINGS.
   37




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED MEMBER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
 Market Information
   38




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Unit Holders
  Distributions
  Equity Compensation Plans
  Sale of Unregistered Securities
  Repurchases of Equity Securities
  
 ITEM 6. SELECTED FINANCIAL DATA.
  
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 Cautionary Statements Regarding Forward Looking Statements
           39




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
    
    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;
                  Overview
   40




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
    
    Our inability to obtain adequate amounts of feedstock in a timely manner;
 
    
    Our inability to obtain adequate amounts of feedstock at competitive costs;
 
    
    Lack of demand for biodiesel;
 
    
    Lack of biodiesel contracts at profitable margins; and
 
    
    Inadequate funds to obtain feedstock due to having to pay for feedstock while
waiting for payments from our biodiesel sales.
      41




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Plan of Operations for the Next 12 Months
 Plant Operations
  Results of Operations
 Comparison of Fiscal Years Ended September 30, 2009 and September 30, 2008
  Income Statement
    
    Fiscal Year Ended
    
    
    Fiscal Year EndedData
    
    September 30, 2009
    
    
    September 30, 2008Revenues
    
    $
    29,132,604
    
    
    
    100.00
    %
    
    $
    67,135,224
    
    
    
    100.00
    %Cost of Goods Sold
    
    $
    29,795,410
    
    
    
    102.28
    %
    
    $
    67,000,778
    
    
    
    99.80
    %Gross Profit (Loss)
    
    $
    (662,806
    )
    
    
    (2.28
    )%
    
    $
    134,446
    
    
    
    0.20
    %Operating Expenses
    
    $
    1,421,907
    
    
    
    4.88
    %
    
    $
    1,729,356
    
    
    
    2.58
    %Interest Income
    
    $
    36,579
    
    
    
    0.13
    %
    
    $
    91,762
    
    
    
    0.14
    %Interest (Expense)
    
    $
    (1,272,475
    )
    
    
    (4.37
    )%
    
    $
    (2,281,776
    )
    
    
    (3.40
    )%Net (Loss)
    
    $
    (3,320,609
    )
    
    
    (11.40
    )%
    
    $
    (3,784,924
    )
    
    
    (5.64
    )%
   42




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Revenues
 Fiscal Year Ended
    
    
    Fiscal Year EndedSeptember 30, 2009
    
    
    September 30, 2008Revenue Source
    
    Amount
    
    
    % of Revenues
    
    
    Amount
    
    
    % of RevenuesBiodiesel Sales
    
    $
    24,995,232
    
    
    
    86
    %
    
    $
    57,539,313
    
    
    
    86
    %Glycerin Sales
    
    $
    486,327
    
    
    
    2
    %
    
    $
    1,887,636
    
    
    
    3
    %Fatty Acids and
Soapstock Sales
    
    $
    424,978
    
    
    
    1
    %
    
    $
    901,617
    
    
    
    1
    %Federal Incentives
    
    $
    3,226,067
    
    
    
    11
    %
    
    
    6,806,658
    
    
    
    10
    %Total Revenues from Sales
    
    $
    29,132,604
    
    
    
    100
    %
    
    $
    67,135,224
    
    
    
    100
    %
      43




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Cost of Goods Sold
    44




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45




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Operating Expenses
  Other Income (Expenses)
  Changes in Financial Condition
  September 30,
    
    
    September 30,2009
    
    
    2008Current Assets
    
    $
    5,746,294
    
    
    $
    11,178,526Current Liabilities
    
    $
    31,016,570
    
    
    $
    35,640,464Members Equity
    
    $
    12,281,381
    
    
    $
    15,601,990
 Current Assets
 Current Liabilities
 Members Equity
  46




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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
 The Wall Street Journal
      47




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Grants and Government Programs
   Critical Accounting Estimates
  Revenue Recognition
  Derivative Instruments and Hedging Activities
 Accounting Standards Certification (ASC) Topic No. 815, Derivatives and Hedging Activities
  48




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##### Table of Contents



Commodity Price Risk Protection
    Impairment of long-lived assets
  Off-Balance Sheet Arrangements
  
 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   49




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ITEM 8. FINANCIAL STATEMENTS.
 
 Report of Independent Registered Public Accounting Firm
 
          50




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Iowa Renewable Energy, LLC
 Balance Sheets
September 30, 2009 and 2008
 2009
    
    
    2008AssetsCurrent Assets:Cash and cash equivalents
    
    $
    649,297
    
    
    $
    189,474Due from broker
    
    
    477,059
    
    
    
    82,182Accounts receivable, net of allowance for doubtful
accounts of 2009 $7,218; 2008 none
    
    
    1,090,753
    
    
    
    4,469,451Derivative financial instruments
    
    
    
    
    
    
    65,141Federal incentive receivable
    
    
    146,182
    
    
    
    747,741Inventory
    
    
    3,265,653
    
    
    
    5,580,906Prepaids and other assets
    
    
    117,350
    
    
    
    43,631Total current assets
    
    
    5,746,294
    
    
    
    11,178,526Property and Equipment:Land
    
    
    420,000
    
    
    
    420,000Plant and processing equipment
    
    
    40,742,442
    
    
    
    40,673,235Office building, furniture and fixtures
    
    
    572,769
    
    
    
    572,632Equipment and vehicles
    
    
    240,241
    
    
    
    226,42441,975,452
    
    
    
    41,892,291Accumulated depreciation
    
    
    (5,963,978
    )
    
    
    (3,313,970
    )36,011,474
    
    
    
    38,578,321Other Assets:Cash, restricted by loan agreement
    
    
    1,201,118
    
    
    
    1,044,817Financing costs, net
    
    
    339,065
    
    
    
    440,7901,540,183
    
    
    
    1,485,607$
    43,297,951
    
    
    $
    51,242,454Liabilities and Members EquityCurrent Liabilities:Current maturities of long-term debt
    
    $
    30,005,576
    
    
    $
    33,345,343Accounts payable and accrued expenses
    
    
    944,232
    
    
    
    2,295,121Derivative financial instruments
    
    
    66,762
    
    
    
    Total current liabilities
    
    
    31,016,570
    
    
    
    35,640,464Long-Term Debt
    
    
    
    
    
    
    CommitmentsMembers Equity:Member contributions, net of issuance costs, units
outstanding 2009 and 2008 26,331
    
    
    23,165,422
    
    
    
    23,165,422Accumulated (deficit)
    
    
    (10,884,041
    )
    
    
    (7,563,432
    )12,281,381
    
    
    
    15,601,990$
    43,297,951
    
    
    $
    51,242,454
   51




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Iowa Renewable Energy, LLC
 Statements of Operations
Years Ended September 30, 2009 and 2008
 2009
    
    
    2008Revenues:Sales
    
    $
    25,906,537
    
    
    $
    60,328,566Federal incentives
    
    
    3,226,067
    
    
    
    6,806,65829,132,604
    
    
    
    67,135,224Cost of sales
    
    
    29,795,410
    
    
    
    67,000,778Gross profit (loss)
    
    
    (662,806
    )
    
    
    134,446Operating expenses:General and administrative
    
    
    1,383,907
    
    
    
    1,691,356Depreciation
    
    
    38,000
    
    
    
    38,0001,421,907
    
    
    
    1,729,356(Loss) before other income (expense)
    
    
    (2,084,713
    )
    
    
    (1,594,910
    )Other income (expense):Interest income
    
    
    36,579
    
    
    
    91,762Interest expense
    
    
    (1,272,475
    )
    
    
    (2,281,776
    )Net (loss)
    
    $
    (3,320,609
    )
    
    $
    (3,784,924
    )Weighted average units outstanding
    
    
    26,331
    
    
    
    26,331Net (loss) per unit  basic and diluted
    
    $
    (126.11
    )
    
    $
    (143.74
    )
   52




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Iowa Renewable Energy, LLC
 Statements of Changes in Members Equity
Years Ended September 30, 2009 and 2008
 Member
    
    
    Accumulated
    
    
    Total MembersMember Units
    
    
    Contributions
    
    
    Deficit
    
    
    EquityBalance, September 30, 2007
    
    
    26,331
    
    
    $
    23,165,422
    
    
    $
    (3,778,508
    )
    
    $
    19,386,914Net (loss)
    
    
    
    
    
    
    
    
    
    
    (3,784,924
    )
    
    
    (3,784,924
    )Balance, September 30, 2008
    
    
    26,331
    
    
    
    23,165,422
    
    
    
    (7,563,432
    )
    
    
    15,601,990Net (loss)
    
    
    
    
    
    
    
    
    
    
    (3,320,609
    )
    
    
    (3,320,609
    )Balance, September 30, 2009
    
    
    26,331
    
    
    $
    23,165,422
    
    
    $
    (10,884,041
    )
    
    $
    12,281,381
   53




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Iowa Renewable Energy, LLC
 Statements of Cash Flows
Years Ended September 30, 2009 and 2008
 2009
    
    
    2008Cash Flows from Operating Activities:Net (loss)
    
    $
    (3,320,609
    )
    
    $
    (3,784,924
    )Adjustments to reconcile net (loss) to net cash
provided by operating activities:Depreciation
    
    
    2,650,008
    
    
    
    2,650,008Amortization
    
    
    101,725
    
    
    
    101,723Unrealized (gain) loss on derivative financial instruments
    
    
    131,903
    
    
    
    (575,388
    )Change in working capital components:(Increase) decrease in due from broker
    
    
    (394,877
    )
    
    
    1,255,678Decrease in accounts receivable
    
    
    3,980,257
    
    
    
    1,219,351(Increase) decrease in inventory
    
    
    2,315,253
    
    
    
    (1,765,184
    )(Increase) in prepaids and other assets
    
    
    (73,719
    )
    
    
    (6,599
    )Increase (decrease) in accounts payable and accrued expenses
    
    
    (1,350,889
    )
    
    
    920,410Net cash provided by operating activities
    
    
    4,039,052
    
    
    
    15,075Cash Flows from Investing Activities:Purchase and construction of property and equipment
    
    
    (83,161
    )
    
    
    (22,481
    )Sales tax and utitlity refund from construction of property and equipment
    
    
    
    
    
    
    813,390(Increase) in cash restricted
    
    
    (156,301
    )
    
    
    (1,044,817
    )Net cash used in investing activities
    
    
    (239,462
    )
    
    
    (253,908
    )Cash Flows from Financing Activities:Proceeds from long-term borrowings
    
    
    
    
    
    
    1,717,442Payment on long-term borrowings
    
    
    (3,339,767
    )
    
    
    (2,014,657
    )Net cash used in financing activities
    
    
    (3,339,767
    )
    
    
    (297,215
    )Net increase (decrease) in cash and cash equivalents
    
    
    459,823
    
    
    
    (536,048
    )Cash and cash equivalents:Beginning
    
    
    189,474
    
    
    
    725,522Ending
    
    $
    649,297
    
    
    $
    189,474Supplemental Disclosure of Cash Flow Information,
cash payments for interest
    
    $
    1,119,767
    
    
    $
    2,287,429
   54




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Iowa Renewable Energy, LLC
 Notes to Financial Statements
  Nature of business:
  Significant accounting policies:
 Use of estimates
 Concentrations of credit risk
 Cash and cash equivalents
 Restricted cash
 Accounts receivable
  Inventory
 2009
    
    
    2008Raw material
    
    $
    1,418,828
    
    
    $
    2,695,569Finished goods
    
    
    1,846,825
    
    
    
    2,885,337$
    3,265,653
    
    
    $
    5,580,906
  55




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Iowa Renewable Energy, LLC
 Notes to Financial Statements
 Organizational costs and startup costs : The Company expenses all organizational and
startup costs as incurred.
 Property and equipment
 YearsPlant and process equipment
    
    
    10  20Office building
    
    
    10  20Office equipment
    
    
    3  7Other equipment and vehicles
    
    
    3  7
   Offering costs
 Financing costs
 Derivative instruments Derivatives and Hedging
  2009
    
    
    2008Realized (gain) loss
    
    $
    (692,002
    )
    
    $
    2,211,551Change in unrealized (gain) loss
    
    
    131,903
    
    
    
    (575,388
    )Net (gain) loss
    
    $
    (560,099
    )
    
    $
    1,636,163
 Revenue recognition
  56




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Iowa Renewable Energy, LLC
 Notes to Financial Statements
 Federal incentive payments and receivables
 Cost of sales
 Cost of Sales
    
    2009 Dollars
    
    
    2009 Percentage
    
    
    2008 Dollars
    
    
    2008 PercentageInput costs (soy oil, chemicals, etc.)
    
    $
    24,580,763
    
    
    
    82.50
    %
    
    $
    58,780,600
    
    
    
    87.73
    %Plant wages and salaries
    
    
    733,760
    
    
    
    2.46
    
    
    
    824,139
    
    
    
    1.23Utilities and wastee disposal
    
    
    1,055,769
    
    
    
    3.4
    
    
    
    1,847,708
    
    
    
    2.76Fees-procurement
    
    
    142,591
    
    
    
    0.48
    
    
    
    253,547
    
    
    
    0.38(Gain) loss on derivative financial
instruments
    
    
    (560,099
    )
    
    
    (1.88
    )
    
    
    1,636,163
    
    
    
    2.44Depreciation
    
    
    2,612,008
    
    
    
    8.77
    
    
    
    2,612,008
    
    
    
    3.90Maint., supplies and other expenses
    
    
    1,230,618
    
    
    
    4.13
    
    
    
    1,046,613
    
    
    
    1.56Total cost of sales
    
    $
    29,795,410
    
    
    
    100.00
    %
    
    $
    67,000,778
    
    
    
    100.00
    %
  Shipping and handling costs
 Income taxes
 Earnings (loss) per unit
 Fair value of financial instruments
     57




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Iowa Renewable Energy, LLC
 Notes to Financial Statements
    Total Carrying
    
    
    
    
    
    
    Significant other
    
    
    SignificantValue at
    
    
    Quoted prices in
    
    
    observable
    
    
    unobservableSeptember 30,
    
    
    active markets
    
    
    inputs
    
    
    inputs2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)LiabilitiesDerivative financial instruments
liabilities
    
    $
    66,762
    
    
    $
    66,762
    
    
    $
    
    
    
    $
    
  Subsequent events
 Recently adopted accounting standards Interim Disclosures about Fair Value of Financial Instruments
 Subsequent
Events
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles  a replacement of SFAS No. 162
  58




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Iowa Renewable Energy, LLC
 Notes to Financial Statements
           59




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##### Table of Contents



Iowa Renewable Energy, LLC
 Notes to Financial Statements
    2009
    
    
    2008Note payable to Marshall Bank Group for construction loan (A)
    
    $
    29,505,098
    
    
    $
    32,760,343Note payable to the Iowa Department of Economic Development (B)
    
    
    225,000
    
    
    
    285,000Note payable to the Iowa Department of Transportation (C)
    
    
    275,478
    
    
    
    300,000$
    30,005,576
    
    
    $
    33,345,343
  (A)
    
    On October 26, 2006, the Company entered into a $34,715,000 construction-term loan agreement
which was used to complete the biodiesel project. The loan consisted of two phases: a
construction phase where the Company made periodic requests for fund advances to meet
construction obligations and at the completion of construction, the loan converted to a
senior debt instrument. The note bears interest at prime plus .25% (3.5% as of September 30,
2009 and 5.25% as of September 30, 2008) and is due in monthly principal and interest payments
of $373,000. The Company was in violation of the debt covenants at September 30, 2009 and on
April 2, 2009 received a written notice of default from the lender (See Note 6).
 Debt service reserve
 Capital improvements reserve
 Sinking fund
 (B)
    
    The Company has a $300,000 loan agreement and a $100,000 forgivable loan agreement with the
Iowa Department of Economic Development. The $300,000 loan is noninterest-bearing and due in
monthly payments of $5,000 beginning December 2006 for a term of 60 months with a balance as
of September 30, 2009 and 2008 of $125,000 and $185,000, respectively. Borrowings under this
agreement are collateralized by substantially all of the Companys assets and will be
subordinate to the $34,715,000 of financial institution debt. The $100,000 loan is forgivable
upon the completion of 36 months of the 60 month term.
 The $100,000 loan will be forgiven if the Company complies with certain employment and
production criteria defined in the agreement. In the event of noncompliance or default, the
loan will be repaid over a two-year period starting with the date of noncompliance,
including interest at 6%.
 (C)
    
    The Company has a $132,000 loan agreement and a $168,000 forgivable grant agreement with the
Iowa Department of Transportation. The $132,000 loan bears interest at 3.67% beginning June
2008 and is due in semi-annual payments of $14,569 beginning December 2008 for a term of 60
months. The balance at September 30, 2009 was $107,478. Borrowings under this agreement are
collateralized by substantially all of the Companys assets and is not subordinate to the
$34,715,000 of financial instrument debt. The $168,000 grant is forgivable upon completion of
the loan agreement.
  60




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Iowa Renewable Energy, LLC
 Notes to Financial Statements
 (D)
    
    In July 2009, the FDIC seized Marshall Bank First. Marshall Bank First had served as
Lead Bank for the
purposes of loan administration as described in item (A) above. In August the FDIC assigned
OSM as the
lead bank for administration of the Long-Term debt until a permanent lead bank could be
assigned. Management anticipates that Met Life will be assigned as the permanent lead bank
and that Bankers Trust will be assigned as the permanent administration bank, however, as of
the date of this filing, the Company has not been notified in writing regarding the
assignment of the permanent lead or permanent administration bank.
  Year ending September 30:2010
    
    $
    3,308,9772011
    
    
    3,316,8752012
    
    
    3,377,7512013
    
    
    20,001,973$
    30,005,576
    Year ending September 30:2010
    
    
    
    
    
    $

    3,3042011
    
    
    
    
    
    
    1,377$
    4,681
   61




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Iowa Renewable Energy, LLC
 Notes to Financial Statements
     62




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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9AT. 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.
    63




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##### Table of Contents




    
    We continue to provide training, oversight and guidance for our chief
financial officer; and
 
    
    We have hired external assistance with our financial reporting.
  Changes in Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION.
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
  
 ITEM 11. EXECUTIVE COMPENSATION.
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER
MATTERS.
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
  Method ofExhibit No.
    
    Description
    
    Filing31.1
    
    
    Certificate pursuant to 17 CFR 240 13a-14(a)
    
    *31.2
    
    
    Certificate pursuant to 17 CFR 240 13a-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.  64




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SIGNATURES
  IOWA RENEWABLE ENERGY, LLCDate: December 29, 2009
    /s/ Mike BohannanMike BohannanChairman and PresidentDate: December 29, 2009
    /s/ Todd WillsonTodd WillsonChief Financial Officer  Date: December 29, 2009
    /s/ Mike BohannanMike BohannanChairman and PresidentDate: December 29, 2009
    /s/ Mark CobbMark CobbVice Chairman and DirectorDate: December 29, 2009
    /s/ Dick GallagherDick GallagherSecretary and  DirectorDate: December 29, 2009
    /s/ Warren L. BushWarren L. Bush, DirectorDate: December 29, 2009
    /s/ William J. HoranWilliam J. Horan, DirectorDate: December 29, 2009
    /s/ Edwin J. HershbergerEdwin J. Hershberger, DirectorDate: December 29, 2009
    /s/ John HeisdorfferJohn Heisdorffer, DirectorDate: December 29, 2009
    /s/ William J. PimWilliam J. Pim, DirectorDate: December 29, 2009

/s/
Denny MauserDenny Mauser, Director  65