##### 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 December 31, 2006
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from 
to
 Commission file number 000-51965
 WESTERN IOWA ENERGY, LLC
  Iowa
    
    41-2143913(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)1220 S. Center Street, P.O. Box 399, Wall Lake, Iowa
    
    51466(Address of principal executive offices)
    
    (Zip Code)
 (712) 664-2173
  None
  26,447
 o
 þ o
 þ
  o þ
 $31,991,876
 
     o þ




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##### 



Table of Contents
 PART I
    
    
    3ITEM 1. DESCRIPTION OF BUSINESS
    
    
    3ITEM 1A. RISK FACTORS
    
    
    22ITEM 2. DESCRIPTION OF PROPERTY
    
    
    27ITEM 3. LEGAL PROCEEDINGS
    
    
    28ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    28PART II
    
    
    28ITEM 5. MARKET FOR COMMON EQUITY, RELATED MEMBER MATTERS AND SMALL BUSINESS ISSUER PURCHASES
OF EQUITY SECURITIES
    
    
    28ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
    
    
    30ITEM 7. FINANCIAL STATEMENTS
    
    
    39ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    56ITEM 8A. CONTROLS AND PROCEDURES
    
    
    56ITEM 8B. OTHER INFORMATION
    
    
    56PART III
    
    
    56ITEM
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION
16(A) OF THE EXCHANGE ACT
    
    
    56ITEM 10. EXECUTIVE COMPENSATION
    
    
    56ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER
MATTERS
    
    
    56ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    56ITEM 13. EXHIBITS
    
    
    56ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    58SIGNATURES
    
    
    59Amendment to Management and Operations AgreementCode of EthicsSection 302 CertificationSection 302 CertificationSection 1350 CertificationSection 1350 Certification
  2




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AVAILABLE INFORMATION
  
 PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS.
 Business Development
      3




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General Demand
      4




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Principal Products and Markets
   Biodiesel
   Primary Co-product  Glycerin
    Biodiesel Markets
  5




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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.
  Government/Public Sector
  Distribution of Principal Products
  6




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Sales and Marketing
  
    
    Market analysis of biodiesel supply and demand;
    
    Market access to REG, Inc. developed biodiesel distribution channels;
    
    Analysis and audit of biodiesel customers including creditworthiness;
    
    Marketing specialists and sales representatives to attain and establish sales
opportunities and relationships for our products;
    
    Use of the name of Soy Power brand in marketing our biodiesel;
    
    Arrangements for transportation, logistics and scheduling of biodiesel shipments;
    
    Where advantageous, arrange for leased tankers for rail shipments;
    
    Analyze and audit bulk transportation providers;
    
    Oversee reconciliation of shipments, invoicing and payments on a weekly basis; and
    
    Provide invoicing and accounts receivable management for biodiesel shipments.
   Sources and Availability of Raw Materials
 Feedstock Supply
   7




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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
    Feedstock Procurement
  8




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
    
    Provide analysis and audit of feed stock suppliers;
    
    Purchase feed stocks at competitive prices meeting specifications and in adequate
quantities to fill the production schedule of our plant;
    
    Review on a monthly basis the average prices we pay for feedstock, including comparisons
to industry averages;
    
    Provide us with the specifications for feedstock being required of suppliers;
    
    Negotiate for discounts where obtainable on feedstock;
    
    Arrange for transportation, logistics, and scheduling of feedstock deliveries; and
    
    Provide analysis and audit of bulk transportation providers.
  Chemical Inputs Procurement
  
    
    Perform due diligence requirements for investigation of suppliers of the chemical inputs;
    
    Provide analysis and audit of chemical suppliers;
    
    Provide us with the specifications for chemical inputs being required of suppliers;
    
    Purchase chemical inputs at competitive prices meeting specifications for use in our plant;
    
    Review on a monthly basis the average prices we paid for chemical inputs, including
comparisons to industry averages;
    
    Negotiate for discounts where obtainable on chemicals;
    
    Procure adequate chemical inputs to meet our production schedules;
    
    Provide analysis and audit of bulk transportation suppliers; and
    
    Arrange for transportation, logistics, and scheduling services for chemical input deliveries by suppliers.
  Utilities
  Electricity.
  Water.
  9




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Natural Gas
  New Products and Services
  Government Regulation and Federal Biodiesel Supports
 Federal Biodiesel Supports
  Renewable Fuels Standard
    Biodiesel Tax Credit
  10




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##### Table of Contents



State Legislation
    
    
    An Iowa RFS starting at 10% in 2009 and increasing to 25% by 2019;
    
    A retail tax credit for biodiesel blends of $0.03 per gallon for retailers who sell
more than 50% biodiesel blends; and
    
    An expanded infrastructure program designed to help retailers and wholesalers offset
the cost of bringing E85 and biodiesel blends to customers.
 Effect of Government Regulation
  Competition
  11




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12




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##### Table of Contents



AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockALAlabama Biodiesel Corporation
    
    Moundville
    
    
    
    
    
    Soybean OilAllied Renewable Energy, LLC
    
    Birmingham
    
    
    15,000,000
    
    
    Soybean OilAR*
    
    FutureFuel Chemical Company
    
    Batesville
    
    
    24,000,000
    
    
    Multi FeedstockPatriot Biofuels
    
    Stuttgart
    
    
    3,000,000
    
    
    Multi FeedstockCABiodiesel Industries of Port Hueneme
    
    Port Hueneme
    
    
    3,000,000
    
    
    Multi FeedstockBlue Sky Bio-Fuels, Inc.
    
    Oakland
    
    
    
    
    
    Multi FeedstockEnergy Alternative Solutions, Inc.
    
    Gonzales
    
    
    500,000
    
    
    Multi FeedstockEvergreen Biodiesel
    
    Big Oak Flat
    
    
    50,000
    
    
    Recycled Cooking Oil*
    
    Imperial Western Products
    
    Coachella
    
    
    8,000,000
    
    
    Multi FeedstockSo Cal Biofuels, Inc.
    
    Anaheim
    
    
    1,100,000
    
    
    Yellow GreaseYokayo Biofuels, Inc.
    
    Ukiah
    
    
    200,000
    
    
    Recycled Cooking OilCOAmerican Agri-diesel LLC
    
    Burlington
    
    
    6,000,000
    
    
    Soybean OilBio Energy of America
    
    Commerce City
    
    
    10,000,000
    
    
    Soybean Oil
 13




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockBio Energy of America
    
    Denver
    
    
    8,000,000
    
    
    Soybean OilRocky Mountain Biodiesel Industries, LLC
    
    Berthoud
    
    
    3,000,000
    
    
    Multi FeedstockCTBio-Pur Inc.
    
    BethlehemDEMid-Atlantic Biodiesel
    
    Clayton
    
    
    6,500,000
    
    
    Multi FeedstockFL*
    
    Purada Processing, LLC
    
    Lakeland
    
    
    18,000,000
    
    
    Soybean OilGAMiddle Georgia Biofuels
    
    East Dublin
    
    
    2,500,000
    
    
    Multi FeedstockPeach State Labs
    
    Rome
    
    
    
    
    
    Soybean OilSunshine BioFuels, LLC
    
    Camilla
    
    
    6,000,000
    
    
    Soybean OilUS Biofuels Inc.
    
    Rome
    
    
    10,000,000
    
    
    Multi FeedstockHIPacific Biodiesel
    
    Kahului
    
    
    200,000
    
    
    Recycled Cooking OilPacific Biodiesel
    
    Honolulu
    
    
    1,000,000
    
    
    Recycled Cooking OilIA*
    
    AGP
    
    Sergeant Bluff
    
    
    30,000,000
    
    
    Soybean Oil*
    
    Cargill
    
    Iowa Falls
    
    
    37,500,000
    
    
    Soybean OilClinton County BioEnergy
    
    Clinton
    
    
    10,000,000
    
    
    Soybean Oil*
    
    Renewable Energy Group, Inc.
    
    Ralston
    
    
    12,000,000
    
    
    Soybean OilRiksch BioFuels, LLC
    
    Crawfordsville
    
    
    10,000,000
    
    
    Multi FeedstockSioux Biochemical, Inc.
    
    Sioux Center
    
    
    2,000,000
    
    
    Corn OilSoy Solutions
    
    Milford
    
    
    2,000,000
    
    
    Soybean OilTri-City Energy
    
    Keokuk
    
    
    5,000,000
    
    
    Soybean OilWestern Iowa Energy
    
    Wall Lake
    
    
    30,000,000
    
    
    Multi FeedstockILIncobrasa Industries, Ltd.
    
    Gilman
    
    
    31,000,000
    
    
    Soybean OilStephan Company
    
    Millsdale
    
    
    22,000,000
    
    
    Soybean OilINEvergreen Renewables
    
    Hammond
    
    
    5,000,000
    
    
    Soybean OilHeartland Biofuel
    
    Flora
    
    
    450,000
    
    
    Soybean OilIntegrity Biofuels
    
    Morristown
    
    
    10,000,000
    
    
    Soybean OilKY*
    
    Griffin Industries
    
    Butler
    
    
    2,000,000
    
    
    Multi FeedstockUnion County Biodiesel Company, LLC
    
    Stugis
    
    
    5,000,000
    
    
    Soybean OilMAMPB Bioenergy, LLC
    
    Bridgewater
    
    
    500,000
    
    
    Recycled Cooking OilMDMaryland Biodiesel
    
    Berlin
    
    
    1,000,000
    
    
    Soybean OilMIAg Solutions, Inc.
    
    Gladstone
    
    
    5,000,000
    
    
    Multi FeedstockMichigan Biodiesel, LLC
    
    Bangor
    
    
    10,000,000
    
    
    Soybean OilMN*
    
    FUMPA BioFuels
    
    Redwood Falls
    
    
    3,000,000
    
    
    Multi Feedstock
 14




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockGreen Range Renewable Energy
    
    Ironton
    
    
    150,000
    
    
    Recycled Cooking Oil*
    
    Minnesota Soybean Processors
    
    Brewster
    
    
    30,000,000
    
    
    Soybean Oil*
    
    Soymor
    
    Albert Lee
    
    
    30,000,000
    
    
    Soybean OilMOMid America Biofuels, LLC
    
    Mexico
    
    
    30,000,000
    
    
    Soybean OilMissouri Better Bean
    
    Bunceton
    
    
    15,000,000
    
    
    Multi FeedstockMissouri Bio-Products, Inc.
    
    Bethel
    
    
    2,000,000
    
    
    Multi FeedstockMSCFC Transportation, Inc.
    
    Columbus
    
    
    1,500,000
    
    
    Multi FeedstockChannel Chemical Corporation
    
    Gulfport
    
    
    5,000,000
    
    
    Soybean OilNCBlue Ridge Biofuels
    
    Asheville
    
    
    2,000,000
    
    
    Multi FeedstockFoothills Bio-Energies, LLC
    
    Lenoir
    
    
    5,000,000Gortman Biofuel, LLC
    
    Winston Salem
    
    
    100,000Piedmont Biofuels
    
    Pittsboro
    
    
    1,000,000
    
    
    Multi FeedstockNJEastern Biofuels, LLC
    
    Newark
    
    
    24,000,000
    
    
    Soybean OilNMRio Valley Biofuels, LLC
    
    Anthony
    
    
    
    
    
    Multi FeedstockNVBently Biofuels
    
    Minden
    
    
    1,000,000
    
    
    Multi FeedstockBiodiesel of Las Vegas
    
    Las Vegas
    
    
    5,000,000
    
    
    Multi FeedstockNYNorth American Biofuels Company, Inc.
    
    Bohemia
    
    
    2,500,000
    
    
    Multi FeedstockOHAmerican Ag Fuels, LLC
    
    Definance
    
    
    1,500,000
    
    
    Multi FeedstockPEC Biofuels
    
    Hicksville
    
    
    7,500,000
    
    
    Soybean Oil*
    
    Peter Cremer
    
    Cincinnati
    
    
    30,000,000
    
    
    Soybean OilOKEarth Biofuels, Inc.
    
    Durant
    
    
    10,000,000
    
    
    Multi FeedstockGreen Country Biodiesel, Inc.
    
    Chelsea
    
    
    2,500,000
    
    
    Soybean OilORSeQuential-Pacific Biodiesel, LLC
    
    Salem
    
    
    1,000,000
    
    
    Multi FeedstockPAKeystone BioFuels, Inc.
    
    Shiremanstown
    
    
    
    
    
    Soybean OilUnited Biofuels, Inc.
    
    York
    
    
    1,500,000
    
    
    Soybean OilUnited Oil Company
    
    Pittsburgh
    
    
    2,000,000
    
    
    Multi FeedstockSCCarolina Biofuels, LLC
    
    Taylor
    
    
    30,000,000
    
    
    Soybean OilSoutheast BioDiesel, LLC
    
    Charleston
    
    
    6,000,000
    
    
    Multi FeedstockSDMidwest BioDiesel Producers, LLC
    
    Alexandria
    
    
    7,000,000
    
    
    Soybean OilTNAgri-Energy, Inc.
    
    Louisburg
    
    
    5,000,000
    
    
    Soybean OilBIG Biodiesel, LLC
    
    Pulaski
    
    
    250,000
    
    
    Soybean Oil
 15




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AnnualProductionState
    
    Company
    
    City
    
    Capacity
    
    Primary FeedstockBlue Sky Biodiesel, Inc.
    
    Wartburg
    
    
    3,000,000
    
    
    Multi FeedstockMemphis Biofuels, LLC
    
    Memphis
    
    
    50,000,000
    
    
    Multi FeedstockMilagro Biofuels of Memphis
    
    Memphis
    
    
    5,000,000
    
    
    Soybean OilNuOil
    
    Counce
    
    
    1,500,000
    
    
    Soybean OilTN Bio Energy
    
    ManchesterTXBiodiesel Industries of GreaterDallas-Fort Worth
    
    Denton
    
    
    3,000,000
    
    
    Multi FeedstockBrownfield Biodiesel, LLC
    
    Ralls
    
    
    2,000,000
    
    
    Cottonseed OilCentral Texas Biofuels
    
    Giddings
    
    
    1,500,000
    
    
    Soybean OilGeoGreen Fuels
    
    Gonzales
    
    
    3,000,000
    
    
    Multi Feedstock*
    
    Huish Detergents
    
    Pasadena
    
    
    15,000,000*
    
    Johann Haltermann Ltd
    
    Houston
    
    
    20,000,000
    
    
    Soybean OilKemlink Energy, Inc.
    
    Pasadena
    
    
    2,500,000
    
    
    Multi FeedstockNew Fuel Company
    
    Dallas
    
    
    250,000
    
    
    Multi FeedstockNMM, Ltd
    
    Channelview
    
    
    1,000,000
    
    
    Multi Feedstock*
    
    Organic Fuels, LLC
    
    Galena Park
    
    
    30,000,000
    
    
    Multi FeedstockPacific Biodiesel Texas
    
    Hillsboro
    
    
    2,000,000
    
    
    Multi FeedstockSAFE Fuels, Inc.
    
    Conroe
    
    
    18,000,000
    
    
    Soybean OilSmithfield Bioenergy LLC
    
    Cleburne
    
    
    12,000,000
    
    
    Multi FeedstockSMS Envirofuels
    
    Poteet
    
    
    6,000,000
    
    
    Soybean OilSouth Texas Blending
    
    Laredo
    
    
    5,000,000
    
    
    TallowUTDomestic Energy Partners
    
    Spanish Fork
    
    
    9,000,000
    
    
    Multi FeedstockVACheasapeake Custom Chemical
    
    Ridgeway
    
    
    5,000,000
    
    
    Soybean OilRECO Biodiesel, LLC
    
    Richmond
    
    
    10,000,000
    
    
    Soybean OilRenroh Environmental Company
    
    South Boston
    
    
    80,000Virginia Biodiesel Refinery
    
    New Kent
    
    
    7,000,000
    
    
    Soybean OilWACentral Washington BIodiesel, LLC
    
    Ellensburg
    
    
    
    
    
    Soybean OilSeattle Biodiesel
    
    Seattle
    
    
    5,000,000
    
    
    Multi FeedstockWIRenewable Alternatives
    
    Manitowoc
    
    
    
    
    
    Soybean OilWRR Environmental Services
    
    Eau Claire
    
    
    
    
    
    Multi Feedstock
 
 *
    
    Denotes BQ-9000 Accredited Producers   16




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Annual
    
    
    
    TargetProduction
    
    
    
    CompletionState
    
    Company
    
    City
    
    Capacity
    
    Primary Feedstock
    
    DateALIndependence Renewable Energy Corp
    
    Perdue Hill
    
    
    40,000,000
    
    
    Multi Feedstock
    
    March 2007ARAg Bio Energy
    
    McGehee
    
    
    
    
    
    Soybean Oil
    
    March 2007Delta American Fuel, LLC
    
    Helena
    
    
    40,000,000
    
    
    Multi Feedstock
    
    June 2007AZOptimum Biofuels, LLC
    
    Coolidge
    
    
    2,000,000
    
    
    Soybean Oil
    
    March 2007CABay Biodiesel, LLC
    
    Martinez
    
    
    2,500,000
    
    
    Soybean Oil
    
    February 2007E
    
    Biodiesel Industries of Port Hueneme
    
    Port Hueneme
    
    
    12,000,000
    
    
    Multi Feedstock
    
    May 2007LC Biofuels
    
    Richmond
    
    
    365,000
    
    
    Multi Feedstock
    
    Sept 2007Noil Energy Group
    
    Commerce
    
    
    5,000,000
    
    
    Multi Feedstock
    
    May 2007Silicon Valley Biodiesel, LLC
    
    Sanger
    
    
    7,000,000
    
    
    Multi Feedstock
    
    April 2007COGreat White Bottling, Inc.
    
    Denver
    
    
    4,000,000
    
    
    Soybean Oil
    
    February 2007
 17




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##### Table of Contents



Annual
    
    
    
    TargetProduction
    
    
    
    CompletionState
    
    Company
    
    City
    
    Capacity
    
    Primary Feedstock
    
    DateE
    
    Rocky Mountain Biodiesel
Industries, LLC
    
    Berthoud
    
    
    7,000,000
    
    
    Multi Feedstock
    
    Dec 2007FLXenerga, Inc.
    
    Kissimmee
    
    
    5,000,000
    
    
    Recycled Cooking Oil
    
    March 2007GAEco Solutions, LLC
    
    Chatsworth
    
    
    25,000,000
    
    
    Multi Feedstock
    
    May 2007IACentral Iowa Energy
    
    Newton
    
    
    30,000,000
    
    
    Multi Feedstock
    
    April 2007East Fork Biodiesel, LLC
    
    Algona
    
    
    60,000,000
    
    
    Multi Feedstock
    
    Oct 2007Freedom Fuels, LLC
    
    Mason City
    
    
    30,000,000
    
    
    Multi Feedstock
    
    March 2007Iowa Renewable Energy, LLC
    
    Washington
    
    
    30,000,000
    
    
    Multi Feedstock
    
    July 2007Western Dubuque Biodiesel
    
    Farley
    
    
    30,000,000
    
    
    Soybean Oil
    
    June 2007IDPremier Fuel Company, Inc.
    
    Rupert
    
    
    
    
    
    Multi Feedstock
    
    Feb 2007ILHeartland Biodiesel, Inc.
    
    Marion
    
    
    5,000,000
    
    
    Soybean Oil
    
    Jan 2007Midwest Biodiesel Products
    
    South Roxanna
    
    
    30,000,000
    
    
    Soybean Oil
    
    March 2007INe-biofuels, LLC
    
    Middletown
    
    
    25,000,000
    
    
    Soybean Oil
    
    May 2007Louis Dreyfus Agricultural
Industries, LLC
    
    Claypool
    
    
    80,000,000
    
    
    Soybean Oil
    
    Oct 2007SNEBio, LLC
    
    Newburgh
    
    
    15,000,000
    
    
    Soybean Oil
    
    Feb 2007KYOwensboro Grain
    
    Owensboro
    
    
    50,000,000
    
    
    Soybean Oil
    
    June 2007MIAdrian Biofuels
    
    Adrian
    
    
    20,000,000
    
    
    Multi Feedstock
    
    June 2007Biodiesel Industries of Detroit
    
    Detroit
    
    
    
    
    
    Multi Feedstock
    
    Sept 2007MOAGP
    
    St. Joseph
    
    
    30,000,000
    
    
    Soybean Oil
    
    Sept 2007Global Fuels, LC
    
    Dexter
    
    
    3,000,000
    
    
    Multi Feedstock
    
    Feb 2007Great River Soy Processing
Cooperative
    
    Lilbourn
    
    
    5,000,000
    
    
    Soybean Oil
    
    April 2007High Hill Biodiesel, Inc.
    
    High Hill
    
    
    5,000,000
    
    
    Multi Feedstock
    
    June 2007Natural Biodiesel Plant, LLC
    
    Hayti
    
    
    5,000,000
    
    
    Multi Feedstock
    
    March 2007Prairie Pride
    
    Deerfield
    
    
    30,000,000
    
    
    Soybean Oil
    
    Dec 2007MSDelta Biofuels, Inc.
    
    Natchez
    
    
    72,000,000
    
    
    Multi Feedstock
    
    March 2007North Mississippi Biodiesel
    
    New Albany
    
    
    7,000,000
    
    
    Soybean Oil
    
    March 2007NCAmerican Distillation, Inc.
    
    Leland
    
    
    5,000,000
    
    
    Soybean Oil
    
    April 2007Evans Environmental Energies, Inc,
    
    Wilson
    
    
    6,000,000
    
    
    
    
    Feb 2007Filter Specialty Bioenergy LLC
    
    Autryville
    
    
    1,600,000
    
    
    Multi Feedstock
    
    June 2007North Carolina BioFuels, LLC
    
    Seaboard
    
    
    1,000,000
    
    
    Soybean Oil
    
    March 2007Triangle Biofuels Industries, Inc.
    
    Wilson
    
    
    5,000,000
    
    
    Multi Feedstock
    
    June 2007
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##### Table of Contents



Annual
    
    
    
    TargetProduction
    
    
    
    CompletionState
    
    Company
    
    City
    
    Capacity
    
    Primary Feedstock
    
    DateNDADM
    
    Velva
    
    
    85,000,000
    
    
    Canola Oil
    
    April 2007All American Biodiesel
    
    York
    
    
    2,000,000
    
    
    Soybean Oil
    
    April 2007NEBeatrice Biodiesel, LLC
    
    Beatrice
    
    
    50,000,000
    
    
    Soybean Oil
    
    Sept 2007Horizon Biofuels, Inc.
    
    Fremont
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Aug 2007Northeast Biodiesel
    
    Scribner
    
    
    
    
    
    Soybean Oil
    
    April 2007NVE
    
    Biodiesel of Las Vegas
    
    Las Vegas
    
    
    55,000,000
    
    
    Multi Feedstock
    
    Nov 2007NYNextGen Fuel, Inc.
    
    Fulton
    
    
    5,000,000
    
    
    Soybean Oil
    
    Feb 2007OHAgrifuels, LLC
    
    Bremen
    
    
    4,000,000
    
    
    Soybean Oil
    
    March 2007E
    
    American Ag Fuels, LLC
    
    Defiance
    
    
    5,500,000
    
    
    Multi Feedstock
    
    May 2007Center Alterative Energy Company
    
    Cleveland
    
    
    5,000,000
    
    
    Soybean Oil
    
    March 2007Jatrodiesel Inc.
    
    Miamisburg
    
    
    5,000,000
    
    
    Multi Feedstock
    
    March 2007OKBest Energy Solutions, LLC
    
    Tulsa
    
    
    1,000,000
    
    
    Soybean Oil
    
    March 2007High Plains Bioenergy
    
    Guymon
    
    
    30,000,000
    
    
    Multi Feedstock
    
    Sept 2007ORGreen Fuels of Oregon, Inc.
    
    Klamath Falls
    
    
    
    
    
    
    
    March 2007E
    
    SeQuential-Pacific Biodiesel, LLC
    
    Salem
    
    
    4,000,000
    
    
    Multi Feedstock
    
    Nov 2007PABiodiesel of Pennsylvania, Inc.
    
    White Deer
    
    
    1,500,000
    
    
    Soybean Oil
    
    March 2007Choice FuelCorp Inc.
    
    South Williamsport
    
    
    2,000,000
    
    
    Multi Feedstock
    
    May 2007E
    
    Keystone BioFuels, Inc.
    
    Shiremanstown
    
    
    
    
    
    Soybean Oil
    
    May 2007Lake Erie Biofuels
    
    Erie
    
    
    45,000,000
    
    
    Soybean Oil
    
    Aug 2007PA Biofuels, LLC
    
    Pittsburgh
    
    
    5,000,000
    
    
    Multi Feedstock
    
    June 2007Soy Energy, Inc.
    
    New Oxford
    
    
    1,500,000
    
    
    Soybean Oil
    
    Feb 2007RIMason Biodiesel, LLC
    
    Westerly
    
    
    2,500,000
    
    
    Soybean Oil
    
    March 2007SCFarms & Truckers Biodiesel, LLC
    
    Warrenville
    
    
    5,000,000
    
    
    Soybean Oil
    
    May 2007TNFreedom Biofuels, Inc.
    
    Madison
    
    
    12,000,000
    
    
    Soybean Oil
    
    Feb 2007TXAg Fuels Ltd
    
    Sealy
    
    
    3,600,000
    
    
    Multi Feedstock
    
    June 2007AgriMax Fuels, LLC
    
    Channelview
    
    
    3,000,000
    
    
    Soybean Oil
    
    Feb 2007E
    
    Biodiesel Industries of Greater
Dallas-Fort Worth
    
    Denton
    
    
    7,000,000
    
    
    Multi Feedstock
    
    Dec 2007Bio-Renewable Technologies, LLC
    
    Converse
    
    
    1,000,000
    
    
    Multi Feedstock
    
    June 2007BioSelect Fuels (GBBLP)
    
    Galveston
    
    
    21,000,000
    
    
    Multi Feedstock
    
    March 2007Direct Fuels
    
    Euless
    
    
    10,000,000
    
    
    Multi Feedstock
    
    July 2007ECO Friendly Products, Inc.
    
    Channelview
    
    
    
    
    
    Multi Feedstock
    
    March 2007Fuel & Lube, LLC
    
    Richmond
    
    
    5,000,000
    
    
    Multi Feedstock
    
    Feb 2007
 19




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##### Table of Contents



Annual
    
    
    
    TargetProduction
    
    
    
    CompletionState
    
    Company
    
    City
    
    Capacity
    
    Primary Feedstock
    
    DateGreen Diesel, LLC
    
    Houston
    
    
    
    
    
    Soybean Oil
    
    March 2007Green Earth Fuels, LLC
    
    Houston
    
    
    43,000,000
    
    
    Multi Feedstock
    
    July 2007Momentum Biofuels, Inc.
    
    League City
    
    
    20,000,000
    
    
    Soybean Oil
    
    March 2007E
    
    SAFE Fuels, inc.
    
    Conroe
    
    
    12,000,000
    
    
    Multi Feedstock
    
    March 2007WAImperium Grays Harbor
    
    Grays Harbor
    
    
    100,000,000
    
    
    Multi Feedstock
    
    July 2007Olympic Biofuels
    
    Poulsbo
    
    
    500,000
    
    
    Multi Feedstock
    
    Feb 2007WIBadger Biodiesel Inc.
    
    Clyman
    
    
    5,000,000
    
    
    Multi Feedstock
    
    April 2007North Prairie Productions LLC
    
    Evansville
    
    
    45,000,000
    
    
    Soybean Oil
    
    Dec 2007Sanimax Energy
    
    Deforest
    
    
    20,000,000
    
    
    Multi Feedstock
    
    Jan 2007
  20




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Competition from Other Fuel Sources
 Biodiesel Competition
   Glycerin Competition
    Research and Development
  Dependence on One of a Few Major Customers
  21




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##### Table of Contents



DESCRIPTION OF BUSINESS 
Distribution of Principal Products
 Costs and Effects of Compliance with Environmental Laws
    Employees
  
 ITEM 1A. RISK FACTORS.
 You should carefully read and consider the risks and uncertainties below and the other information
contained in this report. The risks and uncertainties described below are not the only ones we may
face. The following risks, together with additional risks and uncertainties not currently known to
us or that we currently deem immaterial could impair our financial condition and results of
operations.
 Risks Related to Our Business
 We have a limited operating history.
 
    
    effectively manage our business and operations;
    
    recruit and retain key personnel; and
 22




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##### Table of Contents




    
    develop new products that complement our existing business.
  Our business is not diversified.
 Our business is
sensitive to demand for biodiesel and glycerin.
 Our business is sensitive to feedstock prices. Changes in the prices and availability of our
feedstock may hinder our ability to generate revenue.
  Increases in the price of natural gas could reduce our profitability.
  Our exclusive reliance on REG, Inc. to manage our plant, procure our inputs and market our
products could damage our profitability if REG, Inc. fails to perform its obligations under the
agreement.
  23




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We engage in hedging transactions which involve risks that can harm our business.




Technological advances could significantly decrease the cost of producing biodiesel or result
in the production of higher-quality biodiesel, and if we are unable to adopt or incorporate
technological advances into our operations, our plant could become uncompetitive or obsolete.


Risks Related to Biodiesel Industry


If demand for biodiesel fails to grow at the same rate as planned supply, the excess
production capacity will adversely impact our financial condition. 24




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##### Table of Contents



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 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 prices of biodiesel and its co-products will have a significant negative
impact on our financial performance.
 25




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##### Table of Contents



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.
 26




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##### Table of Contents



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 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 reduce our
profitability.
 
 ITEM 2. DESCRIPTION OF PROPERTY.
   27




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
    
    Principal office building;
    
    Maintenance building;
    
    Processing building;
    
    Pretreatment building; and
    
    Storage tank farm.
  MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
 
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY, RELATED MEMBER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF
EQUITY SECURITIES.
 Market Information
  Unit Holders
  28




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##### Table of Contents



Distributions
   Sale of Unregistered Securities
      29




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##### Table of Contents



ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
 Cautionary Statements Regarding Forward Looking Statements
  
    
    Changes in our business strategy, management, capital improvement and development plans;
    
    Changes in plant production capacity or technical difficulties in operating the plant;
    
    Overcapacity within the biodiesel industry leading to a decline in biodiesel prices;
    
    Changes in the availability and price of feedstock;
    
    Increases or decreases in the supply and demand for biodiesel, including anticipated
significant increases in supply from new biodiesel plants and expansions of existing
biodiesel plants;
    
    Changes in environmental regulations that apply to our plant operations;
    
    Changes in general economic conditions or the occurrence of certain events causing an
economic impact in the agriculture, oil or automobile industries;
    
    Changes in the availability and price of natural gas;
    
    Increases or decreases in the supply and demand for glycerin leading to a decline in prices; and
    
    Changes and advances in biodiesel production technology.
  Overview
  DESCRIPTION OF BUSINESS  Distribution of Principal Products
 30




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Plan of Operations for the Next 12 Months
  Plant
Operations
    DESCRIPTION OF
BUSINESS 
 31




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##### Table of Contents





Distribution
of Principal Products



    
    General Manager and Operations Manager Pre-Production Fee.$14,000 per month for
the General Managers services and $11,000 per month for the Operations Managers services
during pre-production. We did not have an Operations Manger during pre-production and did
not pay the monthly fee for an operations manager.
    
    General Manager and Operations Manager. We pay $0.0133 per gallon of biodiesel
produced per month from the plant during the month for which the fee is computed.
    
    Feedstock Procurement Fee. We pay 1/10 of $0.01 per pound of feedstock procured payable monthly.
    
    Chemical Procurement Fee. We pay 1/5 of $0.01 per gallon of biodiesel produced payable monthly.
    
    Biodiesel Marketing Fees. We pay $0.01 for each gallon of biodiesel marketed.
    
    Glycerin and Fatty Acids Marketing Fee. We pay 1/5 of $0.01 for each gallon of
biodiesel marketed as a glycerin and fatty acids marketing fee.
    
    Net Income Bonus. We pay a yearly income bonus equal to 6% of our net income
as defined in the agreement.






Completion
of Construction






Operating
Budget and Financing of Plant Operations


32




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##### Table of Contents



Operating Costs:Feedstock and Utilities Costs
    
    $
    59,689,500General and administrative costs
    
    $
    2,724,900Other Production Costs
    
    $
    7,926,550Total operating costs
    
    $
    70,340,900
  Administration
and Employees
  Trends
and Uncertainties Impacting the Biodiesel Industry and Our Future
Operations
      33




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##### Table of Contents










    
    additional rail capacity and rail cars;
    
    additional storage facilities for biodiesel;
    
    increases in truck fleets capable of transporting biodiesel within localized markets;
    
    expansion in refining and blending facilities to handle biodiesel; and
    
    growth in service stations equipped to handle biodiesel fuels.




Commodity
Price Risk Protection






34




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##### Table of Contents







Permitting and Regulatory Activities


DESCRIPTION OF BUSINESS  Costs and Effects of
Compliance with Environmental Laws.


Employees




Liquidity and Capital Resources




Distribution
to Unit Holders




Sources
of Funds




Short-Term and Long-Term Debt Sources




35




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##### Table of Contents



Issuance of Additional Units
  Grants and Government Programs
  
    
    Authority to receive a property tax abatement from the City of Wall Lake at
85% of the tax on the property without the abatement for 10 years followed by
an abatement at 75% of the tax on the property with the abatement for 5 years.
    
    An investment tax credit equal to $2,990,400 (this Iowa tax credit may be
passed through to unit holders and carried forward for up to 7 years by them
until depleted);
    
    Funding for training new employees through a supplemental new jobs
withholding credit equal to one and one-half percent (1.5%) of the gross wages
of the new jobs created by the project; and
    
    A refund of one hundred percent (100%) of the sales, service and use taxes
paid to contractors and subcontractors during the construction phase of the
project (excluding local option sales taxes on intangible property, furniture
and furnishings).
   36




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##### Table of Contents



Results of Operations
 Financial
Summary and Analysis of the Fiscal Year Ended December 31,
2006
  Fiscal Year EndedDecember 31, 2006Income Statement Data
    
    Amount
    
    
    PercentRevenues
    
    $
    31,991,876
    
    
    
    100.0
    %Cost of Sales
    
    $
    23,715,252
    
    
    
    74.12
    %Gross Profit
    
    $
    8,276,624
    
    
    
    25.88
    %Operating Expenses
    
    $
    1,606,516
    
    
    
    5.02
    %Other Income (Expense)
    
    $
    (337,583
    )
    
    
    (1.05
    )%Net Income
    
    $
    6,332,525
    
    
    
    19.80
    %
  Revenues
   Cost of Sales
  37




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##### Table of Contents



Operating Expenses
  Other Income (Expenses)
  Critical Accounting Estimates
  Off-Balance Sheet Arrangements
  38




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##### Table of Contents



ITEM 7. FINANCIAL STATEMENTS.
 WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
 FINANCIAL STATEMENTS
December 31, 2006 and 2005
 39




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
    
 
 
 40




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##### Table of Contents



WESTERN
IOWA ENERGY, LLCBALANCE SHEETSDecember 31, 2006 and 2005
 2006
    
    
    2005ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    28,322
    
    
    $
    4,935,695Margin deposits
    
    
    267,260
    
    
    
    Trade accounts receivable  related party
    
    
    4,331,349
    
    
    
    Incentive receivable
    
    
    597,878
    
    
    
    Inventory
    
    
    7,796,183
    
    
    
    Derivative instruments
    
    
    1,267,749
    
    
    
    Prepaid expenses and other assets
    
    
    33,207
    
    
    
    Total current assets
    
    
    14,321,948
    
    
    
    4,935,695PROPERTY, PLANT AND EQUIPMENTLand and land improvements
    
    
    1,299,384
    
    
    
    78,354Office building and equipment
    
    
    641,799
    
    
    
    17,486Plant and process equipment
    
    
    33,537,541
    
    
    
    Vehicle
    
    
    
    
    
    
    42,000Construction in progress
    
    
    
    
    
    
    21,329,249Total, at cost
    
    
    35,478,724
    
    
    
    21,467,089Less accumulated depreciation
    
    
    1,095,538
    
    
    
    10,334Total property, plant and equipment
    
    
    34,383,186
    
    
    
    21,456,755OTHER ASSETSLand options
    
    
    596
    
    
    
    596Other investments
    
    
    2,000
    
    
    
    2,000Loan origination fees, net of accumulated amortization of $14,253 and $-0-
at December 31, 2006 and 2005
    
    
    123,643
    
    
    
    135,589Total other assets
    
    
    126,239
    
    
    
    138,185TOTAL ASSETS
    
    $
    48,831,373
    
    
    $
    26,530,635LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESAccounts payable:Trade
    
    $
    1,237,721
    
    
    $
    262Related Party
    
    
    104,935
    
    
    
    Construction
    
    
    
    
    
    
    68,431Construction  related party
    
    
    848,426
    
    
    
    3,960,085Current portion of long-term debt
    
    
    3,386,789
    
    
    
    9,343Accrued interest
    
    
    115,964
    
    
    
    Accrued wages and benefits
    
    
    46,561
    
    
    
    Accrued payroll taxes
    
    
    33,519
    
    
    
    1,039Accrued expenses  related party
    
    
    392,651
    
    
    
    Total current liabilities
    
    
    6,166,566
    
    
    
    4,039,160LONG-TERM LIABILITIESLong-term debt, less current portion above
    
    
    12,851,239
    
    
    
    10,432Total liabilities
    
    
    19,017,805
    
    
    
    4,049,592MEMBERS EQUITYContributed capital
    
    
    23,516,376
    
    
    
    22,516,376Retained earnings (accumulated deficit)
    
    
    6,297,192
    
    
    
    (35,333
    )Total members equity
    
    
    29,813,568
    
    
    
    22,481,043TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    48,831,373
    
    
    $
    26,530,635
 
 41




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
STATEMENTS OF OPERATIONS
Years Ended December 31, 2006 and 2005
 2006
    
    
    2005REVENUESRelated parties
    
    $
    26,178,438
    
    
    $
    Incentive funds
    
    
    5,813,438
    
    
    
    31,991,876
    
    
    
    COST OF SALES
    
    
    23,715,252
    
    
    
    Gross profit
    
    
    8,276,624
    
    
    
    OPERATING EXPENSESOrganization costs
    
    
    
    
    
    
    44,267Consulting and professional fees
    
    
    252,929
    
    
    
    139,124Office and administrative expenses
    
    
    1,353,587
    
    
    
    98,858Total operating expenses
    
    
    1,606,516
    
    
    
    282,249OTHER INCOME (EXPENSE)Interest and dividend income
    
    
    50,379
    
    
    
    320,074Interest expense
    
    
    (406,062
    )
    
    
    (647
    )Gain on sale of asset
    
    
    2,800
    
    
    
    Other income
    
    
    15,300
    
    
    
    5,000Total other income (expense)
    
    
    (337,583
    )
    
    
    324,427NET INCOME
    
    $
    6,332,525
    
    
    $
    42,178BASIC AND DILUTED EARNINGS
PER UNIT
    
    $
    246.65
    
    
    $
    2.74WEIGHTED AVERAGE UNITS
OUTSTANDING, BASIC
AND DILUTED
    
    
    25,674
    
    
    
    15,405
 
 42




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
STATEMENTS OF CHANGES IN MEMBERS EQUITY
Years Ended December 31, 2006 and 2005
 Retained EarningsContributed
    
    
    (AccumulatedUnits
    
    
    Capital
    
    
    Deficit)
    
    
    TotalBALANCE, DECEMBER 31, 2004
    
    
    1,690
    
    
    $
    840,638
    
    
    $
    (77,511
    )
    
    $
    763,127Additional units issued (seed capital), 1,546 units at
$500 per unit
    
    
    1,546
    
    
    
    773,000
    
    
    
    
    
    
    
    773,000Capital contributions from public offering, 22,081
units at $950 per unit
    
    
    22,081
    
    
    
    20,976,950
    
    
    
    
    
    
    
    20,976,950Units issued in exchange for land, 81 units at $950
per unit
    
    
    81
    
    
    
    76,950
    
    
    
    
    
    
    
    76,950Units issued in exchange for services, 49 units at
$950 per unit
    
    
    49
    
    
    
    46,550
    
    
    
    
    
    
    
    46,550Cost of raising capital
    
    
    
    
    
    
    (197,712
    )
    
    
    
    
    
    
    (197,712
    )Net income for the year ended December 31, 2005
    
    
    
    
    
    
    
    
    
    
    42,178
    
    
    
    42,178BALANCE, DECEMBER 31, 2005
    
    
    25,447
    
    
    
    22,516,376
    
    
    
    (35,333
    )
    
    
    22,481,043Units issued in exchange for reduction in construction payable,
1,000 units at $1,000 per unit (See Note 5)
    
    
    1,000
    
    
    
    1,000,000
    
    
    
    
    
    
    
    1,000,000Net income for the year ended December 31, 2006
    
    
    
    
    
    
    
    
    
    
    6,332,525
    
    
    
    6,332,525BALANCE, DECEMBER 31, 2006
    
    
    26,447
    
    
    $
    23,516,376
    
    
    $
    6,297,192
    
    
    $
    29,813,568
 
 43




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
STATEMENTS OF CASH FLOWS
Years Ended December 31, 2006 and 2005
 2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    6,332,525
    
    
    $
    42,178Adjustments to reconcile net income to net cash
provided by (used in) operating activitiesDepreciation
    
    
    1,105,452
    
    
    
    10,334Gain on sale of asset
    
    
    (2,800
    )
    
    
    Member units issued for services included in startup expenses
    
    
    
    
    
    
    38,000Effects of changes in operating assets and liabilitiesMargin deposits
    
    
    (267,260
    )
    
    
    Trade accounts receivable  related party
    
    
    (4,331,349
    )
    
    
    Incentive receivable
    
    
    (597,878
    )
    
    
    Inventory
    
    
    (7,796,183
    )
    
    
    Derivative instruments
    
    
    (1,267,749
    )
    
    
    Prepaid expenses and other assets
    
    
    (33,207
    )
    
    
    25,235Accounts payable
    
    
    1,342,394
    
    
    
    (23,236
    )Accrued interest
    
    
    115,964
    
    
    
    Accrued wages
    
    
    46,561
    
    
    
    Accrued payroll taxes
    
    
    32,480
    
    
    
    1,039Accrued expenses  related party
    
    
    392,651
    
    
    
    Net cash provided by (used in) operating
activities
    
    
    (4,928,399
    )
    
    
    93,550CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment,
including construction in progress
    
    
    (16,228,520
    )
    
    
    (17,260,219
    )Proceeds from sale of asset
    
    
    33,600
    
    
    
    Purchase of land options
    
    
    
    
    
    
    (1,000
    )Purchase of capital stock of lenders
    
    
    
    
    
    
    (2,000
    )Net cash used in investing activities
    
    
    (16,194,920
    )
    
    
    (17,263,219
    )CASH FLOWS FROM FINANCING ACTIVITIESLoan origination fees
    
    
    (2,307
    )
    
    
    (135,589
    )Cost of raising capital
    
    
    
    
    
    
    (189,162
    )Proceeds from long-term debt
    
    
    18,640,528
    
    
    
    28,105Payments on long-term debt
    
    
    (2,422,275
    )
    
    
    (8,330
    )Capital contributions
    
    
    
    
    
    
    21,749,950Net cash provided by financing activities
    
    
    16,215,946
    
    
    
    21,444,974NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (4,907,373
    )
    
    
    4,275,305CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    4,935,695
    
    
    
    660,390CASH AND CASH EQUIVALENTS, END OF YEAR
    
    $
    28,322
    
    
    $
    4,935,695
 
 44




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
December 31, 2006 and 2005
  USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
  BASIS OF ACCOUNTING
  REVENUE RECOGNITION
  CASH AND CASH EQUIVALENTS
  ACCOUNTS RECEIVABLE
   DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
  45




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WESTERN IOWA ENERGY, LLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
December 31, 2006 and 2005
 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
    INVENTORIES
  PROPERTY, PLANT, AND EQUIPMENT
   YearsLand improvements
    
    2040Office building
    
    540Office equipment
    
    520Plant and process equipment
    
    1040
  46




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WESTERN IOWA ENERGY, LLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
December 31, 2006 and 2005
 PROPERTY, PLANT, AND EQUIPMENT
   LOAN ORIGINATION FEES
  OTHER INVESTMENTS
  OTHER INCOME
  INCOME TAXES
  EARNINGS PER UNIT
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WESTERN IOWA ENERGY, LLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
December 31, 2006 and 2005
 COST OF SALES
  SHIPPING AND HANDLING COSTS
  ENVIROMENTAL LIABILITIES
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 NOTE 1  INCENTIVE PAYMENTS AND RECEIVABLE
   NOTE 2  INVENTORY
  2006
    
    
    2005Raw material
    
    $
    1,284,002
    
    
    $
    Work in progress
    
    
    2,752,701
    
    
    
    Finished goods
    
    
    3,759,480
    
    
    
    Total
    
    $
    7,796,183
    
    
    $
    
 NOTE 3  LAND OPTION
  NOTE 4  LONG-TERM DEBT AND FINANCING
  2006
    
    
    2005Note payable to Farm Credit Services of America
and CoBank under term note agreement  see
details below.
    
    $
    9,550,000
    
    
    $
    Note payable to Farm Credit Services of America
and CoBank under reducing revolving credit note 
see details below.
    
    
    5,550,528
    
    
    
    Note payable to the Iowa Department of Economic
Development  see details below.
    
    
    397,500
    
    
    
    Note payable to Glidden Rural Electric Cooperative
 see details below.
    
    
    740,000
    
    
    
    
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 NOTE 4  LONG-TERM DEBT AND FINANCING
 2006
    
    
    2005Note payable to Ford Credit  see details below.
    
    
    
    
    
    
    19,775Total
    
    
    16,238,028
    
    
    
    19,775Less current portion
    
    
    3,386,789
    
    
    
    9,343Long-term portion
    
    $
    12,851,239
    
    
    $
    10,432
  2007
    
    $
    3,386,7892008
    
    
    1,914,2372009
    
    
    1,928,9892010
    
    
    1,930,4712011
    
    
    963,906Thereafter
    
    
    6,113,636Total
    
    $
    16,238,028
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 NOTE 4  LONG-TERM DEBT AND FINANCING
    NOTE 5  MEMBERS EQUITY
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 NOTE 5  MEMBERS EQUITY
  NOTE 6  INCOME TAXES
  NOTE 7  CONCENTRATION OF CREDIT RISK
  NOTE 8  CASH FLOW DISCLOSURES
  2006
    
    
    2005Cash paid for interest, net of capitalized interest of
$552,233 and $-0- for the years ended December 31,
2006 and 2005, respectively
    
    $
    289,534
    
    
    $
    647
  2006
    
    
    2005Units issued for land purchase
    
    $
    
    
    
    $
    76,950Units issued for services included in costs of capital
    
    $
    
    
    
    $
    8,550Units issued in exchange for reduction in construction payable
    
    $
    1,000,000
    
    
    $
    Construction in progress in accounts payable
    
    $
    848,426
    
    
    $
    4,028,516
 NOTE 9  RELATED PARTY TRANSACTIONS
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 NOTE 9  RELATED PARTY TRANSACTIONS
    NOTE 10  COMMITMENTS AND CONTINGENCIES
    
    
    $14,000 per month in pre-production fees for the General Manager and $11,000
for the Operations Manager beginning three months prior to the estimated start up date for
production and ceasing after payment of the fees for the month in which product is produced
for sale.
    
    Management fees equal to one and one-third cents per gallon of biodiesel
produced.
    
    Feed stock procurement fees equal to one-tenth of a cent per pound of feed
stock procured for production.
    
    Chemical input procurement fee equal to one-fifth of a cent per gallon of biodiesel produced.
    
    Biodiesel marketing fees equal to one cent per each gallon of biodiesel sold.
    
    Glycerin and fatty acids fee equal to one-fifth cent per gallon of biodiesel sold.
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 NOTE 10  COMMITMENTS AND CONTINGENCIES
 
    
    A yearly net income bonus equal to six percent of the Companys adjusted net income.
Adjusted net income is defined as the Companys net income for the fiscal year before any
deduction or allowance for income taxes, determined in accordance with generally accepted
accounting principles. Net income is also adjusted to exclude the following: the receipt
of government payments under bioenergy and related programs, gains or losses realized on
the sale or disposition of capital assets and any reduction for the income bonus paid or
accrued to REG, Inc. as part of the agreement. The cost of soybean oil purchased during
the year and used in the production of bio-diesel is a component in calculating net income.
The fluctuation between the market price and the contract price prior to delivery of
soybean oil on a contract does not affect the calculation of the income bonus to REG, Inc.
  NOTE 11  LEASE COMMITMENTS
  2007
    
    $
    35,6272008
    
    
    35,6272009
    
    
    35,6272010
    
    
    35,6272011
    
    
    17,813Total
    
    $
    160,321
  NOTE 12  RETIREMENT AND SAVINGS PLAN
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2006 and 2005
 NOTE 13  FAIR VALUE OF FINANCIAL INSTRUMENTS
  NOTE 14  SUBSEQUENT EVENT
  55




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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 8A. CONTROLS AND PROCEDURES.
    
 ITEM 8B. OTHER INFORMATION.
  
 PART III
 
 ITEM
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION
16(A) OF THE EXCHANGE ACT.
  
 ITEM 10. EXECUTIVE COMPENSATION.
  
 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER
MATTERS.
  
 ITEM
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
  
 ITEM 13. EXHIBITS.
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Exhibit No.
    
    Description
    
    Method of Filing3.1
    
    Articles of Organization of Western Iowa Energy, LLC.
    
    
    13.2
    
    Amended and Restated Operating Agreement of Western Iowa Energy, LLC
    
    
    110.1
    
    Water Supply and Storage Agreement between the Incorporated City of
Wall Lake, Iowa and Western Iowa Energy, LLC.
    
    
    110.2
    
    Master Loan Agreement between Farm Credit Services of America and Western Iowa Energy, LLC.
    
    
    110.3
    
    Construction and Term Loan Supplement between Farm Credit Services
of America and Western Iowa Energy, LLC.
    
    
    110.4
    
    Construction and Revolving Term Loan Supplement between Farm Credit
Services of America and Western Iowa Energy, LLC.
    
    
    110.5
    
    Administrative Agency Agreement between Farm Credit Services of America and Western Iowa Energy, LLC.
    
    
    110.6
    
    Design/Build Agreement between Renewable Energy Group and Western Iowa Energy.
    
    
    110.7
    
    Management and Operational Services Agreement between West Central Cooperative and Western Iowa Energy, LLC.
    
    
    110.8
    
    Letter from CoBank regarding term extension for the Construction
and Term Loan Supplement (exhibit 10.3) between Farm Credit
Services of America and Western Iowa Energy, LLC.
    
    
    110.9
    
    Iowa Department of Economic Development VAAPFAP Loan/Forgivable Loan Agreement and Promissory Note.
    
    
    110.10
    
    Statused Revolving Credit Supplement Agreement between Farm Credit
Services, FLCA and Western Iowa Energy, LLC dated August 3, 2006.
    
    
    210.11
    
    Industry Track Agreement between Chicago Central and Pacific
Railroad Company and Western Iowa Energy, LLC dated June 5, 2006.
    
    
    210.12
    
    Assignment and Pledge Agreement
    
    
    210.13
    
    Letter Agreement between Renewable Energy Group, LLC and Western
Iowa Energy, LC regarding the issuance of 1,000 membership units to
Renewable Energy Group, LLC
    
    
    210.14
    
    Rural Development Loan Agreement between Glidden Rural Electric
Cooperative and Western Iowa Energy, LLC.
    
    
    310.15
    
    Amendment to Management and Operations Agreement between Renewable
Energy Group, Inc. and Western Iowa Energy, LLC.
    
    
    *14.1
    
    Code of Ethics
    
    
    *31.1
    
    Certificate Pursuant to 17 CFR 240 15d-14(a)
    
    
    *31.2
    
    Certificate Pursuant to 17 CFR 240 15d-14(a)
    
    
    *
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Exhibit No.
    
    Description
    
    Method of Filing32.1
    
    Certificate Pursuant to 18 U.S.C. Section 1350
    
    
    *32.2
    
    Certificate Pursuant to 18 U.S.C. Section 1350
    
    
    *
 
 (1)
    
    Incorporated by reference as filed on our Registration Statement on Form 10-SB, No.
000-51965, originally filed on May 2, 2006.(2)
    
    Incorporated by reference as filed on our Quarterly Report on Form 10-QSB filed on August 18,
2006.(3)
    
    Incorporated by reference as filed on our Quarterly Report on Form 10-QSB filed on November 14,
2006.(*)
    
    Filed herewith. 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
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SIGNATURES
  WESTERN IOWA ENERGY, LLCDate: 3/6/07
    /s/ William J. HoranWilliam J. HoranChairman, President and Director
(Principal Executive Officer) Date: 3/6/07
    /s/ Denny MauserDenny MauserTreasurer and Director
(Principal Financial and Accounting Officer)  Date: 3/6/07
    /s/ William J. HoranWilliam J. Horan, Chairman, President,Director (Principal Executive Officer)Date: 3/6/07
    /s/ Denny MauserDenny Mauser, Treasurer, Director(Principal Financial and Accounting Officer)Date: 3/6/07
    /s/ Kevin J. RossKevin J. Ross, Secretary and DirectorDate: 3/7/07
    /s/ John GeakeJohn Geake, Vice-Chairman and DirectorDate: 3/7/07
    /s Warren L. BushWarren L. Bush, DirectorDate: 3/6/07
    /s/ Wayne SeamanWayne Seaman, DirectorDate: 3/6/07
    /s/ Nile RamsbottomNile Ramsbottom, Director 59