**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-KSB**

 
| **ý**                                                                                        |   | **Annual  report under Section 13 or 15(d) of the Securities Exchange Act of 1934.** |
|---------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|
|                                                                                              |
| **For the year ended December 31, 2003**                                                     |
|                                                                                              |
| **OR**                                                                                            |
|                                                                                              |
| **o**                                                                                             |   | **Transition  report under Section 13 or 15(d) of the Exchange Act.**                |
|                                                                                              |
| **For the transition period  from     to     ** |
|                                                                                              |
| **Commission file number 333-92188**                                                              |

 

| **UNITED  WISCONSIN GRAIN PRODUCERS, LLC**                           |
|----------------------------------------------------------------------|
| (Exact name  of small business issuer as specified in its charter)   |
|                                                                 |   |   |
| **Wisconsin**                                                        |   | **39-2032455** |
| **(State  or other jurisdiction of  incorporation or organization)** |   | **(I.R.S.  Employer Identification No.)** |
|                                                                 |   |   |
| **W1231 Tessman Road, Cambria, Wisconsin  53923**                    |
| (Address of  principal executive offices)                            |
|                                                                 |   |   |
| **(920) 348-5016**                                                   |
| (Issuer’s  telephone number)                                    |

 

Securities registered under Section 12(b) of the ExchangeAct:  **None**

 

Securities registered under Section 12(g) of the ExchangeAct:  **None**

 

Check whether the issuer:  (1)filed all reports required to be filed by Section 13 or 15(d) of theExchange Act during the past 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90days.     Yes     ý     No     o

 

Check if there is no disclosure of delinquent filers in response toItem 405 of Regulation S-B is not contained in this form, and no disclosurewill be contained, to the best of registrant’s knowledge, in definitive proxyor information statements incorporated by reference in Part III of this Form10-KSB or any amendment to this Form 10-KSB. ý

 

State issuer’s revenues for its most recentfisal year.    None 

 

As of March 18, 2004, the aggregatemarket value of the membership units held by non-affiliates (computed byreference to the most recent offering price of such membership units) was$27,090,000.

 

As of March 18, 2004, there were 27,090membership units outstanding.

 

DOCUMENTS INCORPORATED BYREFERENCE    None.

 

Transitional Small Business Disclosure Format (Checkone):     o Yes     ý No

 

 

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**INDEX**

 
| **PART I**     |                                                                                                                  |   |
|----------------|-----------------------------------------------------------------------------------------------------------------------|--------|
|           |                                                                                                                  |   |
| **ITEM 1.**    | **DESCRIPTION OF  BUSINESS**                                                                                          |   |
| **ITEM 2.**    | **DESCRIPTION OF  PROPERTY**                                                                                          |   |
| **ITEM 3.**    | **LEGAL PROCEEDINGS**                                                                                                 |   |
| **ITEM  4.**   | **SUBMISSION  OF MATTERS TO A VOTE OF SECURITY HOLDERS**                                                              |   |
|           |                                                                                                                  |   |
| **PART II**    |                                                                                                                  |   |
|           |                                                                                                                  |   |
| **ITEM  5.**   | **MARKET  FOR MEMBERSHIP UNITS AND RELATED MEMBER MATTERS**                                                           |   |
| **ITEM 6.**    | **MANAGEMENT’S  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**                                                   |   |
| **ITEM 7.**    | **FINANCIAL STATEMENTS**                                                                                              |   |
| **ITEM  8.**   | **CHANGES  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES**                            |   |
| **ITEM 8A.**   | **CONTROLS AND  PROCEDURES**                                                                                          |   |
|           |                                                                                                                  |   |
| **PART III**   |                                                                                                                  |   |
|           |                                                                                                                  |   |
| **ITEM 9.**    | **DIRECTORS,  EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES; COMPLIANCE WITH  SECTION 16(a) OF THE EXCHANGE ACT** |   |
| **ITEM 11.**   | **SECURITY OWNERSHIP OF CERTAIN BENEFICIAL  OWNERS AND MANAGEMENT AND RELATED MEMBER MATTERS**                        |   |
| **ITEM 12.**   | **CERTAIN RELATIONSHIPS AND RELATED  TRANSACTIONS**                                                                   |   |
| **ITEM 13.**   | **EXHIBITS AND REPORTS ON FORM 8-K**                                                                                  |   |
| **ITEM 14.**   | **PRINCIPAL ACCOUNTANT FEES AND SERVICES**                                                                            |   |
|           |                                                                                                                  |
| **SIGNATURES** |                                                                                                                  |

 

2

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**PART I.**

 

**ITEM 1.****                                                     DESCRIPTIONOF BUSINESS.**

 

United Wisconsin Grain Producers, LLC wasformed as a Wisconsin limited liability company on November 2, 2001.  References to “we”, “us”, “our” and the“Company” refer to United Wisconsin Grain Producers, LLC.  We are a start-up company in the developmentstage.  We are building a 40 milliongallon per-year corn-based ethanol plant near the village of Friesland in thetownship of Randolph, Wisconsin, that will produce ethanol, distillers grainsand carbon dioxide.

 

**Principal Products and Markets**

 

We havecommenced construction of the ethanol plant in the township of Randolph, justoutside the village of Friesland in Columbia County, Wisconsin in south centralWisconsin.  The project site is located  within one-half mile of the state highway 33and two miles east of state highway 73. The Union Pacific Railroad is expected to provide rail service to thesite.  We commenced construction inNovember 2003 and estimate that construction will be completed approximatelyApril 2005.  We selected this site because ofits location to existing grain production, accessibility to road and railtransportation and availability of utilities.

 

The principalproducts we expect to produce at the ethanol plant are ethanol and distillersgrain.  Ethanol is ethyl alcohol, a fuelcomponent made primarily from corn and various other grains, and can be usedas: (i) an octane enhancer in fuels; (ii) an oxygenated fuel additive for thepurpose of reducing ozone and carbon monoxide vehicle emissions; and (iii) anon-petroleum-based gasoline substitute. Approximately 95% of all ethanol is used in its primary form forblending with unleaded gasoline and other fuel products.  The implementation of the Federal Clean AirAct has made ethanol fuels an important domestic renewable fuel additive.  Used as a fuel oxygenate, ethanol provides ameans to control carbon monoxide emissions in large metropolitan areas.  The principal purchasers of ethanol aregenerally the wholesale gasoline marketer or blender.  We expect the principal markets for our ethanol to be petroleumterminals in the Midwest.

 

A principalby-product of the ethanol production process is distillers grains, a highprotein, high-energy animal feed supplement primarily marketed to the dairy andbeef industry.  Distillers grainscontain bypass protein that is superior to other protein supplements such ascottonseed meal and soybean meal. Bypass proteins are more digestible to the animal, thus generatinggreater lactation in milk cows and greater weight gain in beef cattle.  Dry mill ethanol processing creates threeforms of distillers grains:  DistillersWet Grains (“DWS”), Distillers Modified Wet Grains (“DMWGS”), and DistillersDried Grains with Solubles (“DDGS”). DWS is processed corn mash that contains approximately 70%moisture.  DWS has a shelf life ofapproximately three days and can be sold only to farms within the immediatevicinity of an ethanol plant.  DMWGS isDWS that with syrup added and dried to approximately 50% moisture.  DMWGS have a slightly longer shelf life ofapproximately ten days and are often sold to nearby markets.  DDGS is DWS that has been dried to 10% to12% moisture.  DDGS have an almostindefinite shelf life and may be sold and shipped to any market regardless ofits vicinity to an ethanol plant.  Weintend to market  DDGS and may explorepossibilities of local demand for DMWGS and DWS to market at least a portion ofour distillers grains in these forms.

 

We currentlyhave no plans to market or distribute the carbon dioxide that will be producedat the plant as a by-product of our ethanol production.

 

*Local Ethanol Markets*

 

Local marketswill be limited and must be evaluated on a case-by-case basis.  Although local markets will be the easiestto service, they may be oversold, which depresses the ethanol price.

 

*Regional Ethanol Markets*

 

Typically aregional market is one that is outside of the local market, yet within theneighboring states.  This market will likely be serviced by rail, and iswithin a 450-mile radius of the plant.  We intend to construct a railroadspur to our plant so that we may reach regional and national markets with ourproducts.  Because ethanol use results in less air pollution than regulargasoline, regional markets typically include large cities that are subject

 

3

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to anti-smog measures as either carbonmonoxide or ozone non-attainment areas, such as: Minneapolis, Chicago, and St.Louis.

 

Generally, theregional market is a good business to develop.  The freight is reasonable,the competition, while aggressive, is not too severe, and the turn-around timeon the rail cars is an advantage.  We intend to obtain letters of intentto purchase product from regional buyers rather than from nationalbuyers.  Regional pricing tends to follow national pricing less thefreight difference.  As with national markets, the use of agroup-marketing program or a broker is advantageous, especially in the firstone to three years of operation.

 

Occasionallythere are opportunities to obtain backhaul rates from local truckingcompanies.  These are rates that are reduced since the truck is loadedboth ways.  Normally the trucks drive tothe refined fuels terminals empty and load gasoline product for delivery. A backhaul is the opportunity to load the truck with ethanol to drive to theterminal.

 

*National Ethanol Markets*

 

Recently,California has been the focus of a major ethanol campaign as MTBE is now beingphased out.  MTBE is a commonly used oxygenate used in fuels forcompliance with Federal Clean Air Act mandates, and is a major competitor ofethanol.  California banned the use of MTBE beginning January 1,2004.  Ethanol is the most readily available substitute for MTBE in thismarket.  MTBE is still used in significant quantities throughout thestate, but ethanol use is expected to increase now that the ban is ineffect.  Most California fuel refinersand blenders have already voluntarily removed MTBE from their terminals basedon preparations for an earlier deadline.  California represents a marketof about one billion gallons annually due to the oxygenate requirement forRFG.  The recent denial of the California RFG oxygenate waiver request hasresulted in California litigating against the EPA in an effort to overturn thedenial.

 

While there isa great deal of focus on California, the Northeast has emerged as anothernational ethanol market, according to the Renewable Fuels Association.  Asin California, the primary drivers are the health and water concernssurrounding the use of MTBE.  For example, beginning January 1, 2004,New York and Connecticut have banned the use of MTBE.  Fifteen other state legislatures have phased out MTBE.  We expect ethanol to replace MTBE as theoxygenate in the Reformulated Gasoline (“RFG”) program and generate markets ofapproximately 200 million gallons per year in New York and approximately 50million gallons per year in Connecticut, however, other MTBE replacements maycapture a portion or all of these potential markets. The ultimate size of theCalifornia and Northeast markets will depend on how the RFG oxygenate and MTBEdebate plays out in the political arena.

 

Illinois, Ohioand Minnesota are by far the largest ethanol markets.  In addition toCalifornia and the Northeast, there are also other significant national ethanolmarket opportunities such as Arizona, Colorado, Texas, Michigan, Wisconsin,Washington, and North Carolina. 

 

| **State**      |   | **Total  Ethanol  Consumed in  Thousands  of Gallons  (2002)** |   |
|----------------|--------|----------------------------------------------------------------|--------|
|           |   |                                                           |   |
| Arizona        |   | 21,626                                                         |   |
| California     |   | 82,282                                                         |   |
| Colorado       |   | 73,493                                                         |   |
| Illinois       |   | 294,055                                                        |   |
| Minnesota      |   | 213,409                                                        |   |
| Michigan       |   | 52,043                                                         |   |
| North Carolina |   | 48,615                                                         |   |
| Ohio           |   | 185,356                                                        |   |
| Texas          |   | 59,029                                                         |   |
| Washington     |   | 21,697                                                         |   |
| Wisconsin      |   | 74,396                                                         |   |

 

Source: U.S. Department ofTransportation Highway Statistics 2002

 

4

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**Distribution Methods**

 

We intend tosell and market the ethanol and distillers grains produced at the plant throughnormal and established markets, including the local, regional and nationalmarkets described above.  We hope tomarket all of the ethanol produced with the assistance of one ethanolre-distributor but we have not yet entered into any agreement regarding thesale of our ethanol.  We anticipateselling all of our distillers grains through distillers grain marketing firmsbut have not yet entered into any agreement regarding the sale of ourdistillers grains.  We may engage onemarketing firm for the purpose of marketing our distillers grains locally and adifferent marketing firm to market our distillers grains outside the localmarkets.

 

We do notplan to hire or establish a sales organization to market any of the products weproduce.  Consequently, we will beextremely dependent upon the marketing agents we engage to market our ethanoland distillers grain.

 

**Competition**

 

We expect tobe in direct competition with other ethanol producers, many of who have greaterresources than we do.  We expect thatadditional ethanol producers will enter the market as the demand for ethanolincreases.

 

Our ethanolplant will compete with other ethanol producers on the basis of price and, to alesser extent, delivery service. We expect to compete favorably with otherethanol producers due to our proximity to ample grain supplies and multiplemodes of transportation.  We believe ourplant’s location offers an advantage over other ethanol producers in that ithas ready access by rail to growing ethanol markets, which we expect to reduceour cost of sales.

 

Currently,Wisconsin has three other operating ethanol plants and one ethanol plant in thedevelopment stage.  Badger State Ethanolhas constructed a 40 million gallon per year ethanol plant in Monroe,Wisconsin, which is approximately 70 miles from our plant site.  Ace Ethanol operates a 15 million gallon peryear ethanol plant in Stanley, Wisconsin, which is approximately 125 miles fromour plant site.  Utica Energy inOshkosh, Wisconsin, produces 24 million gallons of ethanol per year.  Utica Energy is approximately 50 miles fromour plant site and may overlap the northeastern edge of our expected cornsupply area.  Western WisconsinRenewable Energy Cooperative is a 40 million gallon per year development-stageethanol plant in Boyceville, Wisconsin, which is approximately 150 miles fromour plant site.  There are also numerousother producer and privately owned ethanol plants planned and operatingthroughout the Midwest and elsewhere in the United States.

 

The largestethanol producers include Archer Daniels Midland, Cargill, Midwest Grain,Aventine Renewable Energy, Inc., VeraSun Energy Corporation and AbengoaBioenergy Corp., all of which are capable of producing many times the amount ofethanol we expect to produce. In addition, there are several regional entitiesrecently formed, or in the process of formation, of a similar size and withsimilar resources to us.

 

The ethanolindustry has grown to over 74 production facilities in the United States.  Industry authorities estimate that thesefacilities are capable of producing approximately 3.1 billion gallons ofethanol per year.  Plans to constructnew plants or to expand existing plans have been announced which would increasecapacity by approximately 492 million gallons per year.  We cannot determine the effect of this typeof an increase upon the demand or price of ethanol.  The following table sets forth the current and planned majorethanol production

 

5

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facilities in the United States, accordingto the Renewable Fuels Association, U.S. Fuel Ethanol Production CapacityMarch 2004 Report.

 

**U.S.FUEL ETHANOL PRODUCTION CAPACITY**

milliongallons per year (mmgy)

 
| **COMPANY**                            |   | **LOCATION**        |   | **FEEDSTOCK** |   | **Current  Capacity  (mmgy)** |   | **Under  Construction/  Expansions  (mmgy)** |   |
|----------------------------------------|--------|---------------------|--------|---------------|--------|-------------------------------|--------|----------------------------------------------|--------|
| Abengoa  Bioenergy Corp.               |   | York, NE            |   | Corn/milo     |   | 50                            |   |                                         |   |
|                                   |   | Colwich, KS         |   |          |   | 20                            |   |                                         |   |
|                                   |   | Portales, NM        |   |          |   | 15                            |   |                                         |   |
| ACE Ethanol                            |   | Stanley, WI         |   | Corn          |   | 15                            |   |                                         |   |
| Adkins  Energy, LLC*                   |   | Lena, IL            |   | Corn          |   | 40                            |   |                                         |   |
| A. E.  Stanley                         |   | Loudon, TN          |   | Corn          |   | 65                            |   |                                         |   |
| AGP*                                   |   | Hastings, NE        |   | Corn          |   | 52                            |   |                                         |   |
| Agra  Resources Coop. d/b/a EXOL*      |   | Albert Lea, MN      |   | Corn          |   | 38                            |   |                                         |   |
| Agri-Energy,  LLC*                     |   | Luverne, MN         |   | Corn          |   | 21                            |   |                                         |   |
| Alchem Ltd.  LLLP                      |   | Grafton, ND         |   | Corn          |   | 10.5                          |   |                                         |   |
| Al-Corn  Clean Fuel*                   |   | Claremont, MN       |   | Corn          |   | 30                            |   |                                         |   |
| Archer  Daniels Midland                |   | Decatur, IL         |   | Corn          |   | 1070                          |   |                                         |   |
|                                   |   | Cedar  Rapids, IA   |   | Corn          |   |                          |   |                                         |   |
|                                   |   | Clinton, IA         |   | Corn          |   |                          |   |                                         |   |
|                                   |   | Columbus, NE        |   | Corn          |   |                          |   |                                         |   |
|                                   |   | Marshall, MN        |   | Corn          |   |                          |   |                                         |   |
|                                   |   | Peoria, IL          |   | Corn          |   |                          |   |                                         |   |
|                                   |   | Wallhalla,  ND      |   | Corn/barley   |   |                          |   |                                         |   |
| Aventine  Renewable Energy, Inc.       |   | Pekin, IL           |   | Corn          |   | 100                           |   |                                         |   |
|                                   |   | Aurora, NE          |   | Corn          |   | 35                            |   |                                         |   |
| Badger State  Ethanol, LLC*            |   | Monroe, WI          |   | Corn          |   | 48                            |   |                                         |   |
| Big River  Resources, LLC*^            |   | West Burlington, IA |   | Corn          |   |                          |   | 40                                           |   |
| Broin  Enterprises, Inc.               |   | Scotland, SD        |   | Corn          |   | 9                             |   |                                         |   |
| Cargill,  Inc.                         |   | Blair, NE           |   | Corn          |   | 83                            |   |                                         |   |
|                                   |   | Eddyville,  IA      |   | Corn          |   | 35                            |   |                                         |   |
| Central  Illinois Energy Cooperative*^ |   | Canton, IL          |   | Corn          |   |                          |   | 30                                           |   |
| Central MN  Ethanol Coop*              |   | Little Falls, MN    |   | Corn          |   | 20                            |   |                                         |   |
| Central  Wisconsin Alcohol             |   | Plover, WI          |   | Seed corn     |   | 4                             |   |                                         |   |
| Chief  Ethanol                         |   | Hastings, NE        |   | Corn          |   | 62                            |   |                                         |   |
| Chippewa  Valley Ethanol Co.*          |   | Benson, MN          |   | Corn          |   | 42                            |   |                                         |   |
| Commonwealth  Agri-Energy, LLC*        |   | Hopkinsville, KY    |   | Corn          |   | 20                            |   |                                         |   |
| Cornhusker  Energy Lexington, LLC*^    |   | Lexington, NE       |   | Corn          |   |                          |   | 42                                           |   |
| Corn Plus,  LLP*                       |   | Winnebago, MN       |   | Corn          |   | 44                            |   |                                         |   |
| Dakota  Ethanol, LLC*                  |   | Wentworth, SD       |   | Corn          |   | 48                            |   |                                         |   |
| DENCO, LLC*                            |   | Morris, MN          |   | Corn          |   | 21.5                          |   |                                         |   |
| ESE Alcohol  Inc.                      |   | Leoti, KS           |   | Seed Corn     |   | 1.5                           |   |                                         |   |
| Ethanol2000,  LLP*                     |   | Bingham Lake, MN    |   | Corn          |   | 30                            |   |                                         |   |
| Glacial  Lakes Energy, LLC*            |   | Watertown, SD       |   | Corn          |   | 48                            |   |                                         |   |

 

6

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| Golden  Cheese Company of California*   |   | Corona, CA         |   | Cheese whey            |   | 5      |   |   |   |
|-----------------------------------------|--------|--------------------|--------|------------------------|--------|--------|--------|--------|--------|
| Golden Grain  Energy, LLC*^             |   | Mason City, IA     |   | Corn                   |   |   |   | 40     |   |
| Golden  Triangle Energy, LLC*           |   | Craig, MO          |   | Corn                   |   | 20     |   |   |   |
| Gopher State  Ethanol                   |   | St. Paul, MN       |   | Corn/Beverage  Waste   |   | 15     |   |   |   |
| Grain  Processing Corp.                 |   | Muscatine, IA      |   | Corn                   |   | 10     |   |   |   |
| Great Plains  Ethanol, LLC*             |   | Chancellor, SD     |   | Corn                   |   | 42     |   |   |   |
| Heartland  Corn Products*               |   | Winthrop, MN       |   | Corn                   |   | 36     |   |   |   |
| Heartland  Grain Fuels, LP*             |   | Aberdeen, SD       |   | Corn                   |   | 8      |   |   |   |
| Huron, SD                               |   | Corn               |   | 14                     |   |   |   |   |   |
| Husker Ag,  LLC*                        |   | Plainview, NE      |   | Corn                   |   | 23     |   |   |   |
| Iowa  Ethanol, LLC*                     |   | Hanlontown, IA     |   | Corn                   |   | 45     |   |   |   |
| James Valley  Ethanol, LLC              |   | Groton, SD         |   | Corn                   |   | 45     |   |   |   |
| J.R. Simplot                            |   | Caldwell, ID       |   | Potato waste           |   | 6      |   |   |   |
| KAAPA  Ethanol, LLC*                    |   | Minden, NE         |   | Corn                   |   | 40     |   |   |   |
| Land O’  Lakes*                    |   | Melrose, MN        |   | Cheese whey            |   | 2.6    |   |   |   |
| Lincolnland  Agri-Energy, LLC*^         |   | Robinson, IL       |   | Corn                   |   |   |   | 40     |   |
| Little Sioux  Corn Processors, LP*      |   | Marcus, IA         |   | Corn                   |   | 46     |   |   |   |
| Merrick/Coors                           |   | Golden, CO         |   | Waste beer             |   | 1.5    |   |   |   |
| Michigan  Ethanol, LLC                  |   | Caro, MI           |   | Corn                   |   | 45     |   |   |   |
| MGP  Ingredients, Inc.                  |   | Pekin, IL          |   | Corn/wheat  starch     |   | 78     |   |   |   |
|                                    |   | Atchison, KS       |   |                   |   |   |   |   |   |
| Mid-Missouri  Energy, LLC*^             |   | Malta Bend, MO     |   | Corn                   |   |   |   | 40     |   |
| Midwest  Grain Processors*              |   | Lakota, IA         |   | Corn                   |   | 45     |   |   |   |
| Midwest  Renewables^                    |   | Iowa Falls, IA     |   | Corn                   |   |   |   | 40     |   |
| Miller  Brewing Co.                     |   | Olympia, WA        |   | Brewery  waste         |   | 0.7    |   |   |   |
| Minnesota  Energy*                      |   | Buffalo Lake, MN   |   | Corn                   |   | 18     |   |   |   |
| New Energy  Corp.                       |   | South Bend, IN     |   | Corn                   |   | 95     |   |   |   |
| Northeast  Missouri Grain, LLC*         |   | Macon, MO          |   | Corn                   |   | 40     |   |   |   |
| Northern  Lights Ethanol, LLC*          |   | Big Stone City, SD |   | Corn                   |   | 45     |   |   |   |
| Otter Creek  Ethanol, LLC*^             |   | Ashton, IA         |   | Corn                   |   |   |   | 45     |   |
| Parallel  Products                      |   | Louisville, KY     |   | Beverage  waste        |   | 4      |   |   |   |
|                                    |   | R.  Cucamonga, CA  |   |                   |   | 4      |   |   |   |
| Permeate  Refining                      |   | Hopkinton, IA      |   | Sugars &  starches |   | 1.5    |   |   |   |
| Pine Lake  Corn Processors, LLC*^       |   | Steamboat Rock, IA |   | Corn                   |   |   |   | 20     |   |
| Platte  Valley Fuel Ethanol, LLC^       |   | Central City, NE   |   | Corn                   |   |   |   | 40     |   |
| Pro-Corn, LLC*                          |   | Preston, MN        |   | Corn                   |   | 40     |   |   |   |
| Quad-County  Corn Processors*           |   | Galva, IA          |   | Corn                   |   | 23     |   |   |   |
| Reeve  Agri-Energy                      |   | Garden City, KS    |   | Corn/milo              |   | 12     |   |   |   |
| Siouxland  Energy & Livestock Coop* |   | Sioux Center, IA   |   | Corn                   |   | 18     |   |   |   |
| Sioux River  Ethanol, LLC*^             |   | Hudson, SD         |   | Corn                   |   |   |   | 45     |   |
| Tall Corn  Ethanol, LLC*                |   | Coon Rapids, IA    |   | Corn                   |   | 45     |   |   |   |

 

7

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| Trenton Agri  Products, LLC^             |       | Trenton, NE    |       | Corn               |       |   |   | 30     |   |
|------------------------------------------|------------|----------------|------------|--------------------|------------|--------|--------|--------|--------|
| Tri-State  Ethanol Co, LLC*              |       | Rosholt, SD    |       | Corn               |       | 18     |   |   |   |
| United  Wisconsin Grain Producers, LLC*^ |       | Friesland, WI  |       | Corn               |       |   |   | 40     |   |
| U.S. Energy  Partners, LLC               |       | Russell, KS    |       | Milo/wheat  starch |       | 40     |   |   |   |
| Utica  Energy, LLC                       |       | Oshkosh, WI    |       | Corn               |       | 24     |   |   |   |
| VeraSun  Energy Corporation              |       | Aurora, SD     |       | Corn               |       | 100    |   |   |   |
| Western Plains  Energy, LLC*             |       | Campus, KS     |       | Corn               |       | 30     |   |   |   |
| Wyoming  Ethanol                         |       | Torrington, WY |       | Corn               |       | 5      |   |   |   |
| **Total Existing Capacity**              | ** ** | **3165.8**     | ** ** |               | ** ** |
| **Total Under Construction/Expansions**  | ** ** |           | ** ** | **492.0**          | ** ** |
| **TOTAL CAPACITY**                       | ** ** | **3657.8**     | ** ** |               | ** ** |

 

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* farmer-owned

 

^ under construction

 

Last Updated: March 2004

 

The ethanolindustry is very competitive.  While theethanol industry has been growing, there is significant competition amongethanol producers.  Nationally, ethanolproduction is concentrated in a few large companies. Our ethanol plant willface a competitive challenge from larger factories, from plants that canproduce a wider range of products than our plant, and from other plants similarto our planned ethanol plant.

 

Our ethanolplant will be in direct competition with other ethanol producers, many of whichhave greater resources than we currently have or will have in the future.  Large ethanol producers such as ArcherDaniels Midland and Cargill, among others, are capable of producingsignificantly greater quantities than the amount of ethanol we expect toproduce. In addition, there are several Minnesota, Iowa and other mid-westernregional ethanol producers, as well as others on the east and west coasts andthe southern United States, which have recently formed, are in the process offorming, or are under consideration, which are or would be of a similar sizeand have similar resources to us. In light of such competition, there is noassurance that we can successfully construct and operate the ethanol plant.

 

Our ethanolplant will also compete with producers of other gasoline additives havingsimilar octane and oxygenate values as ethanol, such as producers of MTBE, apetrochemical derived from methanol that costs less to produce than ethanol.Although currently the subject of a federal ban, many major oil companies canproduce MTBE and because it is petroleum-based, its use is strongly supportedby major oil companies. Alternative fuels, gasoline oxygenates and alternativeethanol production methods are also continually under development. The majoroil companies have significantly greater resources than we have to market MTBEand other additives, to develop alternative products, and to influencelegislation and public perception of MTBE and ethanol. These companies also havesufficient resources to begin production of ethanol should they choose to doso.

 

Alternativefuels, gasoline oxygenates and ethanol production methods are continually underdevelopment by ethanol and oil companies with far greater resources that wehave. New products or methods of ethanol production developed by largerbetter-financed competitors could provide them competitive advantages over usand harm our business.

 

**Sources of Raw Materials - Corn Feedstock Supply**

 

Weanticipate that our plant will need approximately 15 million bushels of grainper year or 42,000 bushels per day as the feedstock for its dry millingprocess.  We anticipateestablishing ongoing business relationships with local corn elevators toacquire the corn needed for the project, although we expect to acquire somecorn directly from local farmers.  We expect to become licensed as aWisconsin grain dealer, which will allow us to contract to purchase Wisconsingrains.  We have identified a number of elevators as potential sources ofcorn in Wisconsin and

 

8

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discussions are in progress for future corn delivery.  We have nocontracts, agreements or understandings with any grain producers in the area,although we anticipate procuring corn from these sources.

 

Although the area surrounding the plantproduces a significant amount of corn and we do not anticipate problemssourcing grain, there is no assurance that a shortage will not develop,particularly if there were an extended drought or other productionproblem.  In addition, our financial projections assume that we canpurchase grain for prices near the ten-year average for corn in the area of theplant.  However, there is no assurance that we will be able to purchasegrain for these prices.  Grain prices are primarily dependent on worldfeedstuffs supply and demand and on U.S. and global corn crop production, whichcan be volatile as a result of a number of factors, the most important of whichare weather, current and anticipated stocks and prices, export prices andsupports and the government’s current and anticipated agricultural policy.  The price of grain has fluctuated significantly in the past and mayfluctuate significantly in the future. Currently, local corn prices are approximately$2.90 per bushel.  Because the marketprice of ethanol is not related to corn prices, ethanol producers are generallynot able to compensate for increases in the cost of corn feedstock throughadjustments in prices charged for their ethanol.  We therefore anticipatethat our plant’s profitability will be negatively impacted during periods ofhigh corn prices.  We have determinedthat the average price for corn over the last ten years in our corn supply areahas been $2.27 per bushel.

 

We intend to hire a commodities manager toensure the consistent scheduling of corn deliveries and to establish and fillforward contracts through the grain elevators.  The commodities managerwill coordinate corn deliveries between the railroad and the participating elevators.** **Alternatively, we may contract witha third party, such as a grain elevator, to originate or source ourgrain.  We intend to buy as much grain as possible from local producers,members as well as non-members, and from local elevators.  We may purchaseadditional grain from outside of our trade area as need and price dictates.

 

Due to fluctuations in the price of corn, weintend to utilize forward contracting and hedging strategies to manage ourcommodity risk exposure and optimize finished product pricing.  Weanticipate that most of our grain will be acquired in this manner.  Weintend to do this to help guard against price movements that often occur incorn markets.  Hedging means protecting the price at which we buy corn andthe price at which we will sell our products in the future.  It is a wayto attempt to reduce the risk caused by price fluctuation.  Theeffectiveness of such hedging activities is dependent upon, among other things,the cost of corn and our ability to sell sufficient amounts of ethanol anddistillers dried grains.  Although we will attempt to link hedgingactivities to sales plans and pricing activities, such hedging activities canthemselves result in costs because price movements in corn contracts are highlyvolatile and are influenced by many factors that are beyond our control. We may incur such costs and they may be significant.

 

**Utilities**

 

The plantwill require a significant and uninterrupted supply of electricity, natural gasand water to operate.

 

*Natural Gas*

 

To access sufficientsupplies of natural gas to operate the plant, a connection to a distributionpipeline located underground at our site will be required.  A pipeline owned by Alliant Energy isapproximately one and one-half mile from our plant location and connects 3.5miles away to an interstate pipeline owned by ANR.  We anticipate that natural gas will be procured from one or moresuppliers.  We are in the process ofnegotiating with a natural gas supplier but have not yet entered into anyagreements for our natural gas supply. We will need to construct a pipeline at our plant site to link to theAlliant Energy pipeline.  We arecurrently negotiating with Alliant Energy with respect to the construction,ownership and operation of this pipeline. We have not yet entered into any agreements for the construction andoperation of the connecting pipeline. The pipeline will be connected into a long-haul transportation pipelineto transport natural gas from various production areas, such as the Gulf ofMexico, Canada, Mid-Continent, etc.  Wehave engaged U.S. Energy Services to provide natural gas management servicesincluding assistance with negotiation of our natural gas supply andtransportation.

 

*Electricity*

 

InOctober 2003, we entered into an agreement with Adams-Columbia ElectricCooperative for the provision of all electrical energy required by theplant.  We will purchase electricity atthe Cooperative’s power

 

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supply rates then in effect, which will beapplied to our metered usage.  Inaddition, we expect to pay a monthly charge of $700 plus a monthly facilitysurcharge for the substation and monthly distribution costs of $3,358.  The Cooperative will install, own andoperate a substation at our plant site to facilitate electrical distribution toour plant.  The estimated cost of thesefacilities is $725,000.  Under theagreement, we are required to make a non-refundable payment of $253,750 in aidof construction for the facilities the Cooperative will install for ourbenefit.  The aid to constructionpayment will be invoiced to us as the Cooperative makes constructioncommitments for our plant site.  AtDecember 31, 2003, our aid in construction payment totaled $60,000.  This payment may be adjusted if there is achange in the scope of the facilities installed by the Cooperative.  The agreement is for a period of 3 yearscommencing from the date electric service is first provided.  At each anniversary date of the first dateservice is provided, the agreement is automatically extended for another 3 yearperiod unless either party gives written notice of intent not to extend.

 

*Water*

 

We willrequire a significant supply of water. Water requirements for a 40 million gallon per year plant areapproximately 307 gallons per minute. That is approximately 442,787 gallons per day.  In the Friesland area, approximately 650 feet of hydraulic headare available in the aquifer under the plant site according to the WisconsinGeological and Natural History Survey (1978). This means the aquifer could sustain wells capable of yielding 1,000gallons per minute.  We have drilled one500 gallon per minute well at our plant site and we are in the process ofdrilling an additional 500 gallon per minute well at the site to ensure adequatewater supply.

 

**Dependence on One or a Few Major Customers**

 

As discussedabove, we intend to enter into marketing agreements for the purposes ofmarketing and distributing our ethanol and distillers grains.  We will rely on these marketing agents forthe sale and distribution of all of our products.  Therefore, we will be highly dependent on these marketing agentsfor the successful marketing of our products.

 

**Design-Build Contract**

 

On October 8, 2003, we executed adesign-build contract with Fagen, Inc., under which Fagen, Inc., will serve asour design-builder of the ethanol plant. We expect to complete construction of the proposed plant and commenceoperations in April 2005, assuming constant availability of supplies andlabor and assuming reasonable weather conditions.  Fagen, Inc., is currently serving as the design-builder forapproximately nine other ethanol plants. Fagen, Inc.’s involvement with other ethanol projects may delay theprogress of construction on our ethanol plant and commencement of plantoperations.  Any delay in constructionof our plant and/or commencement of plant operations could further delay ourability to generate revenue and distributions of any profits to our members.

 

Under theterms of the design-build contract, we will pay Fagen, Inc. $45,575,000 todesign and construct the plant, subject to any change orders we approve. All drawings, specifications and other construction related documents willbelong to Fagen, Inc.  We have a limited license to use such drawings,specifications and related documents in connection with our occupancy of theplant.  If the contract is terminated by us without cause or by Fagen,Inc. for cause, such as failure to pay undisputed amounts when due, we arerequired to pay Fagen, Inc. a fee of $1,000,000 if we resume construction ofthe plant through our own employees or third parties.

 

We makepayments to Fagen, Inc. on a progress billing basis, based upon monthlyapplications for payment submitted to us by Fagen, Inc. for all work performedas of the date of the application.  We retain 10% of the amount submittedin each application for payment.  When at least 50% of the work has beencompleted, we are required to pay the full amount of each application forpayment.  When the plant is substantially completed and Fagen, Inc., hasmet the performance guarantee criteria, we will pay Fagen, Inc. all amounts wehave retained less an amount for any incomplete items still remaining.  Ifwe do not pay all due and unpaid amounts within five days after the due date,we will be charged interest at a rate of approximately 18% per year.

 

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*Duties Under the Design-Build Contract*

 

Under theterms of the design-build contract, Fagen, Inc. is responsible for the following:

 

•                  Providing allnecessary design services, such as architectural, engineering and otherprofessional design services, consistent with applicable law and provided bylicensed design professionals either employed by Fagen, Inc. or qualifiedindependent licensed design consultants;

 

•                  Providing to usa warranty that the work performed for us is of good quality, conforms to allcontract and construction documents, and is free of defect in materials andworkmanship;

 

•                  For a period ofone year after substantial completion, correcting any defects in materials andworkmanship and commencing correction of defects within seven days of receiptof notice from us that the work performed was defective; and

 

•                  Indemnifying,defending and holding us, our officers, directors, agents and employeesharmless against any claims, losses, damages, liabilities, including attorney’sfees and expenses, for any bodily injury, sickness, death or damage ordestruction of property if such arises from the negligent acts or omissions ofFagen, Inc., its consultants, agents or employees.

 

Under theterms of the design-build contract, we are responsible for the following:

 

•                  Providing theplant site and site preparation, electricity, natural gas, water, roads,railroad access, certain maintenance power and equipment and an administrationbuilding;

 

•                  Obtaining andmaintaining liability insurance to protect us from any claim that may arisefrom performance of our responsibilities;

 

•                  Obtaining andmaintaining property insurance for the full insurable value of the plant,including professional fees, overtime premiums and all other expenses incurredto replace or repair the ethanol plant; and

 

•                  Indemnifying,defending and holding Fagen, Inc., its officers, directors, agents andemployees harmless against any claims, losses, damages, liabilities, includingattorney’s fees and expenses, for any bodily injury, sickness, death or damageor destruction of property due to the negligent act or omission of ourselves,our officers, directors, employees, or any separate contractors we hire.

 

Fagen, Inc.has the right to stop or postpone work and to reasonably adjust the timecompletion of the plant and the contract price if any of the following occurs:

 

•                  Wedo not provide reasonable evidence indicating that we have adequate funds tofulfill all our contractual obligations or do not pay amounts properly dueaccording to the progress payments, and we do not cure within seven days afterwe receive notice from Fagen, Inc. and work on the plant has stopped;

 

•                  Anyacts, omissions, conditions, events or circumstances beyond its control, if theact or omission was not caused by Fagen, Inc. or anyone for whom they areresponsible.  If Fagen, Inc.’s delay in performance is caused by us orthose under our control, then the contract price may be appropriately adjusted;

 

•                  Thepresence of any hazardous conditions at the construction site.  Uponreceiving notice of a hazardous condition, we must immediately proceed tocorrect the condition.  After the condition is corrected and our expertsprovide written certification that the hazardous condition has been correctedand all necessary governmental approvals have been obtained, Fagen, Inc. shouldresume work in the effected area.  Fagen, Inc. may be entitled to an adjustmentin price and time for completion of the plant if its price and time forperformance has been adversely affected by the hazardous condition;

 

•                  Differingconditions at the site.  If concealedphysical conditions at the site materially differ from those indicated in thecontact or from the conditions ordinarily encountered, Fagen, Inc. must

 

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provide us with prompt notice of thecondition.  Fagen, Inc. may be entitledto an adjustment in the contract time and price to the extent that its cost ortime of performance are adversely impacted by the differing site condition;

 

•                  Workon the plant has stopped for 60 consecutive days, or more than 90 days total,because of any order from us or a court or governmental authority, so long assuch stoppage is not because of any act or omission of Fagen, Inc. or becausewe failed to provide Fagen, Inc. with information, permits or approvals forwhich we will be responsible.  Fagen, Inc. may terminate the design-buildcontract if we do not begin to correct the above within seven days afterreceipt of Fagen, Inc.’s termination notice.

 

We have theright to terminate the design-build contract for any reason; but if ourtermination is without cause, then we are required to provide Fagen, Inc. with10 days prior written notice.  In addition, we are required to pay Fagen,Inc. for the following:

 

•                  Allwork completed and any proven loss, cost or expense incurred in connection withsuch work;

 

•                  Reasonable costsand expenses attributable to the termination, including demobilization costsand amounts due to settle terminated contracts with subcontractors andconsultants; and

 

•                  Overhead andprofit in the amount of 15% of the sum of the above payments.

 

There is noassurance that defects in materials and/or workmanship in the plant will notoccur.  Under the terms of the design-build contract, Fagen, Inc. warrantsthat the material and equipment furnished to build the plant is new, of goodquality, and free from material defects in material or workmanship at the timeof delivery.  Though the design-build contract requires Fagen, Inc. tocorrect all defects in material or workmanship for a period of one year aftersubstantial completion of the plant, material defects in material orworkmanship may still occur.  Such defects could cause us to delay thecommencement of operations of the plant, or, if such defects are discoveredafter operations have commenced, to halt or discontinue the plant’soperation.  Any such event may have a material adverse effect on ouroperations, cash flows and financial performance.

 

*Limitation of Consequential Damages and Early Completion Bonus*

 

Thedesign-build contract provides that we may be entitled to receive  liquidated damages in the event Fagen, Inc.fails to substantially complete the plant within 30 to 90 days after thescheduled substantial completion date. The design-build contract provides for liquidated damages in lieu ofconsequential damagesfor any losses we may incur such as loss of use, profits,business, reputation or financing.. Under the terms of the design-build contract, the scheduled substantialcompletion date is April 21, 2005. If Fagen, Inc., fails to substantially complete the plant within 30 to90 days from the substantial completion date, Fagen, Inc., will pay usliquidated damages for each day that substantial completion remainsoutstanding.  If the plant issubstantially completed prior to the substantial completion date of April 21,2005, we will pay Fagen, Inc., an early performance bonus for each day thatsubstantial completion is achieved prior to April 21, 2005.

 

*Insurance Requirements*

 

We haveobtained and must maintain liability, property and casualty and other policiesof insurance during the period of construction of the plant and once plantoperations commence.   Any failureby us to maintain adequate insurance, with adequate policy limits and/orself-retention limits, may have a material adverse effect on our operations,cash flows and financial performance.

 

**SiteGrading Contract**

 

OnOctober 23, 2003, we entered into a site work grading contract withIverson & Son’s LLC.  Under thiscontract, Iverson & Son’s, LLC, will provide Phase I Civil and site workgrading at our plant site for a total contract price of $570,710.  At December 31, 2003, we had incurredcosts of $328,378 under this contract.

 

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**Effect of Governmental Regulation**

 

Ethanol hasimportant applications, primarily as a high quality octane enhancer and anoxygenate capable of reducing air pollution and improving automobileperformance. The ethanol industry is heavily dependent, however, on severaleconomic incentives to produce ethanol, including federal ethanol supports.

 

Ethanolsales have been favorably affected by the Clean Air Act amendments of 1990,particularly the Federal Oxygen Program which became effective November 1,1992. The Federal Oxygen Program requires the sale of oxygenated motor fuelsduring the winter months in certain major metropolitan areas to reduce carbonmonoxide pollution. Ethanol use has increased due to a second Clean Air Actprogram, the Reformulated Gasoline Program. This program became effectiveJanuary 1, 1995, and requires the sale of reformulated gasoline in ninemajor urban areas to reduce pollutants, including those that contribute toground level ozone, better known as smog. Increasingly stricter EPA regulationsare expected to increase the number of metropolitan areas deemed innon-compliance with Clean Air Standards, which could increase the demand forethanol.

 

The use ofethanol as an oxygenate to blend with fuel to comply with federal mandates alsohas been aided by federal tax policy. The Energy Tax Act of 1978 exemptedethanol blended gasoline from the federal gas tax as a means of stimulating thedevelopment of a domestic ethanol industry and mitigating the country’sdependence on foreign oil. As amended, the federal tax exemption currentlyallows the market price of ethanol to compete with the price of domesticgasoline. The exemption for a 10% ethanol blend is the equivalent of providinga per gallon “equalization” payment that allows blenders to pay more forethanol than the wholesale price of gasoline and still retain profit marginsequal to those received upon the sale of gasoline that is not blended withethanol. Under current legislation, the federal gasoline tax is $0.184 pergallon and the tax on a 10% ethanol blend is $0.132 per gallon, providing a$0.052 difference. The exemption will gradually drop to 5.1 cents in 2005. Thisfederal tax exemption is scheduled to expire in 2007.

 

Congress iscurrently considering amending the present excise tax structure described above(S. 1548 and H.R. 3971).  Currently,ethanol-blended fuel is taxed at a lower rate than regular gasoline (5.2 centson a 10% blend).  If enacted, theexisting ethanol excise tax exemption would be eliminated, thereby allowing thefull federal excise tax of 18.4 cents per gallon of gasoline to be collectedand allocated to the highway trust fund. This would add approximately $1.4 billion to the highway trust fundrevenue annually.  In place of thecurrent exemption, the bill creates a new volumetric ethanol excise tax credit(VEETC) of 5.2 cents per gallon of ethanol blended.  Refiners and gasoline blenders would apply for this credit on thesame tax form as before only it would be a credit from general revenue, not thehighway trust fund.  Based on volume,the VEETC may allow greater refinery flexibility in blending ethanol becausethe new system is applicable to the volume of ethanol used and it eliminatesthe volume limitations that are currently in place.

 

A bill (S.791, 108th Cong.) including provisions known as the Renewable FuelsStandard has been introduced in the United States Senate.  It would revise the current method in whichfuel ethanol use is required.  Theproposed legislation would determine the specific volume of ethanol to be usedin gasoline on a nationwide basis.  Theanticipated volumes would begin in the year 2004 at 2.3 billion gallons andgrow at a rate of approximately 300 million gallons per year to a volume of 5billion gallons in 2012.  However,consideration of the bill has been postponed indefinitely.

 

The ethanolindustry and our business will depend upon continuation of the federal ethanolsupports discussed above.  Theseincentives have supported a market for ethanol that might disappear without theincentives.  Alternatively, the incentivesmay be continued at lower levels than at which they currently exist.  The elimination or reduction of such federalethanol supports would make it more costly for us to produce and sell ourethanol.

 

**Costs and Effects of Compliance withEnvironmental Laws**

 

We will besubject to extensive air, water and other environmental regulations and we willbe required to obtain a number of environmental permits to construct andoperate the plant.  In the fall of 2003,we received an air pollution construction permit, a pollutant discharge eliminationsystem general permit, a storm water discharge permit and water withdrawalpermit.  We still need to obtain analcohol fuel producer’s permit, which we anticipate receiving shortly prior tocommencement of operations.  Inaddition, we will be required to complete a spill prevention control andcountermeasures plan prior to commencement of plant operations.  We anticipate incurring costs and expensesof approximately $240,000 in complying with environmental laws, including thecost of

 

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obtaining permits.  Even if we are successful in obtaining allof the permits currently required, any retroactive change in environmentalregulations, either at the federal or state level, could require us to obtainadditional or new permits or spend considerable resources on complying withsuch regulations.

 

We haveengaged RMT, Inc., of Madison, Wisconsin to provide environmental consulting,engineering and analytical services in connection with the construction andoperation of our plant.  AtDecember 31, 2003, we had paid approximately $200,000 for services underthe agreement.

 

We aresubject to oversight activities by the EPA. There is always a risk that the EPAmay enforce certain rules and regulations differently than Wisconsin’senvironmental administrators.  Wisconsinand EPA rules are subject to change, and any such changes could result ingreater regulatory burdens on plant operations.  We could also be subject to environmental or nuisance claims fromadjacent property owners or residents in the area arising from possible foulsmells or other air or water discharges from the plant.  Such claims may result in an adverse resultin court if we are deemed to engage in a nuisance that substantially impairsthe fair use and enjoyment of real estate.

 

**Employees**

 

We currently have one full-time employee andone part-time employee.  InNovember 2003 we engaged Wave Zeal, Ltd., as an independent contractor toprovide consulting services in connection with plant construction and start-upoperations.  Upon completion of theethanol plant, we intend to hire approximately 34 additional full-timeemployees.  We have entered into anemployee recruiting agreement with Richard A. Johnson of Bloomington,Minnesota.  For each employee recruitedby Mr. Johnson, we will pay a fee of 20% of the recruited employee’s firstyear’s salary.

 

**ITEM 2.****                                                     DESCRIPTIONOF PROPERTY.**

 

The ethanol plant is beingconstructed on an undeveloped 115-acre site located on state highway 33 and twomiles east of state highway 73.  Theplant’s address is W1231 Tessman Road, Cambria, Wisconsin 53923.

 

Weobtained two real estate options for potential plant sites.  We purchased one option from Doug andHeather Tessmann for a price of $10,000. The Tessmann option granted us the right to purchase 115 acres withbuildings for $8,395 per acre for a total purchase price of $1,000,000.  Doug and Heather Tessmann are not affiliatedwith the Company, our officers or directors. On September 22, 2003, we gave notice of our intent to exercise theoption to purchase the 115-acre parcel. On October 16, 2003, we closed on part of the Tessmann parcel bypurchasing 105 acres, excluding buildings, of the 115-acre parcel.  At this closing, we paid a purchase price of$700,000 and applied our $10,000 deposit for a cash purchase price of$690,000.  We expect to close on theremaining 10 acres, including the buildings, sometime in June 2004.  We will pay the balance of the purchaseprice, which is $300,000, at that closing.

 

Welocated the Tessmann parcel with the assistance of a buyer’s agent, RWWisconsin Real Estate, Inc., which was paid a fee of 2% of the total purchaseprice or $20,000 when we closed on the real estate transaction.  The agent of RW Wisconsin Real Estate, Inc.,is John F. Roche, who is the uncle of our President, Kevin M. Roche.

 

Wehad also purchased a real estate option on a different potential plant sitefrom Jung Seed Genetics for a price of $3,000. This option grants us the right to purchase 59 acres at a price of$4,000 per acre for a total purchase price of $236,000.  The option expires on March 31, 2004and we intend to let it expire since we have exercised the Tessmann option andplant construction has been started on that parcel.

 

Subsequentto the period covered by this report, we executed a mortgage in favor of AgStarFinancial Services, PCA, creating a first lien on our real estate and theconstruction-in-process and a security interest in all personal propertylocated on our property.  The mortgageand security interest secure the construction loan of $33,024,200, which wasexecuted simultaneous to the mortgage. Upon completion of construction, the construction loan of $33,024,200will be converted into a term loan equal to the lesser of $29,024,200 or 55% ofthe total project cost and a revolving line of credit of $4,000,000.

 

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**ITEM 3.****                                                     LEGALPROCEEDINGS.**

 

None.

 

**ITEM 4.****                                                     SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS.**

 

None.

 

**PART II**

 

**ITEM 5.****                                                     MARKETFOR MEMBERSHIP UNITS AND RELATED MEMBER MATTERS.**

 

There is no public trading market for ourmembership units.  At March 18,2004, there are approximately 870 holders of our units.

 

Distributionsare payable at the discretion of our board of directors, subject to theprovisions of the Wisconsin Limited Liability Company Act and our operatingagreement.  The board has no obligationto distribute profits, if any to members. We have not declared or paid any distributions on our units.  In addition, distributions are restricted bycertain loan covenants in our construction loan and revolving credit financingagreements.

 

The Securitiesand Exchange Commission declared our registration statement on Form SB-2 (SECRegistration No. 333-92188) effective on May 14, 2003.  We commenced our public offering shortlythereafter.

 

The followingis a breakdown of the membership units registered and sold in the offering:

 
| **Amount  Registered** |   | **Aggregate price of the  amount registered** |       | **Amount Sold** |   | **Aggregate price of the  amount sold to date(1)** |   |
|------------------------|--------|-----------------------------------------------|------------|-----------------|--------|----------------------------------------------------|--------|
| 27,500                 |   | $                                             | 27,500,000 |            | 25,810 |                                               | $      | 25,810,000 |   |
|                        |        |                                               |            |                 |        |                                                    |        |  |  |

 

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(1)          Asof March 18, 2004.

 

As ofMarch 18, 2004, we have sold 25,810 units in the registered offering andhave received aggregate offering proceeds of $25,810,000.  We sold the Units without the assistance ofan underwriter.  The offering remainsopen and we are continuing the sale of our Units.  The offering expiration date is May 14, 2004.

 

OnOctober 15, 2003, we released funds from escrow because we had raisedequity in excess of the minimum of $19,250,000 and had received a written debtfinancing commitment sufficient to carry out our business plan.  As of October 15, 2003, we had receivedsubscriptions for 23,275 Units for subscription proceeds of $23,275,000.  Upon release of funds from escrow, we issued23,275 Units to our members.  AtDecember 31, 2003, we had sold a total of 24,325 Units for aggregateoffering proceeds of $24,325,000.  AtDecember 31, 2003, we had offering expenses of $354,523, which we nettedagainst the aggregate subscription proceeds. No offering expenses were paid to related parties.  Our net offering proceeds atDecember 31, 2003, are $23,970,477.

 

The followingtable describes our use of our net offering proceeds as of December 31,2003:

 
| TOTAL PLANT CONSTRUCTION COST: |   | $       | 2,912,132 |   |
|--------------------------------|--------|---------|-----------|--------|
| LAND AND SITE DEVELOPMENT      |   | $       | 710,000   |   |
| OTHER COSTS(1)                 |   | 220,410 |      |
| PAY-OFF LINE OF CREDIT         |   | $       | 232,494   |   |
| PROFESSIONAL FEES              |   | $       | 145,100   |   |
| TOTAL                          |   | $       | 4,220,136 |   |

 

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(1)  Other costs consist of organizational cost,directors’ fees, project coordinator fees and other general and administrativecosts.  No single expenditure in any ofthe foregoing cost categories exceeded $100,000.

 

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**ITEM 6.****                                                     MANAGEMENT’SDISCUSSION AND ANALYSIS.**

 

This report contains forward-lookingstatements that involve future events, our future performance and our expectedfuture operations and actions.  In somecases you can identify forward-looking statements by the use of words such as“may,” “will,” “should,” “anticipate,” “believe,” “expect,” “plan,” “future,”“intend,” “could,” “estimate,” “predict,” “hope,” “potential,” “continue,” orthe negative of these terms or other similar expressions.  These forward-looking statements are onlyour predictions and involve numerous assumptions, risks and uncertainties.  Our actual results or actions may differmaterially from these forward-looking statements for many reasons, includingthe reasons described in this report. We are not under any duty to update the forward-looking statementscontained in this report.  We cannotguarantee future results, levels of activity, performance or achievements.  We caution you not to put undue reliance onany forward-looking statements, which speak only as of the date of thisreport.  You should read this report andthe documents that we reference in this report and have filed as exhibits,completely and with the understanding that our actual future results may bematerially different from what we currently expect.  We qualify all of our forward-looking statements by these cautionarystatements.

 

**Application of Critical Accounting Policies**

 

Management uses estimates and assumptions inpreparing our financial statements, in accordance with generally acceptedaccounting principles.  These estimatesand assumptions affect the reported amounts of assets and liabilities, thedisclosure of contingent assets and liabilities, and the reported revenues andexpenses.

 

**Overview**

 

United Wisconsin Grain Producers, LLC wasformed as a Wisconsin limited liability company on November 2, 2001, forthe purpose of constructing and operating a 40 million gallon per year ethanolplant near Friesland, Wisconsin.  Weexpect that the project will cost approximately $59.3 million.

 

We raised equity by a public offeringregistered with the Securities and Exchange Commission on Form SB-2, which wasdeclared effective on May 14, 2003.  Theoffering is for a minimum of 19,250 units and a maximum of 27,500 units at apurchase price of $1,000 per unit.  Ourequity drive began on June 1, 2003. On October 15, 2003, we releasedfunds from escrow based upon deposits of subscription proceeds in excess of$19,250,000 and our receipt of a written debt financing commitment consistingof a term loan of $32,462,500 from AgStar Financial Services, PCA.

 

At December 31, 2003, we had sold 24,325Units for aggregate offering proceeds of $24,325,000.  Subsequent to December 31, 2003, we have sold an additional1,485 Units for additional offering proceeds of $1,485,000.  The offering remains open and we arecontinuing the sale of our Units.  If weare successful in selling the maximum number of Units, which is 27,500, we willterminate the offering and stop selling Units. Even if we do not sell the maximum number of Units, we may terminate theoffering at any time prior to the offering expiration date of May 14,2004.  There is no assurance that wewill be able to sell the maximum number of Units.

 

We expect that it will take approximately 14to 16 months from the date we gave Fagen, Inc., notice to proceed whichoccurred in December 2003, to construct the ethanol plant and commencestart-up operations.   Our anticipateddate of substantial completion is currently April 2005.

 

**Plan of Operations for the Next 12 Months**

 

We expect tospend the next 12 months constructing the ethanol plant and commencingstart-up operations. We expect to have sufficient cash available to cover ourcosts over the next 12 months, including construction, staffing, office,audit, legal, compliance costs and start up working capital costs. The followingis our estimate of our costs and expenditures for the next 12 months.These estimates are based upon our design-builder, prime subcontractor andfinancial advisor’s experience with other businesses.  It is only an estimate and our actual expenses could be muchhigher due to a variety of factors described in our Form SB-2 registrationstatement under the section entitled “Risk Factors.”

 

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| TOTAL PLANT CONSTRUCTION COST:                   |   | $      | 45,575,000 |   |
|--------------------------------------------------|--------|--------|------------|--------|
| LAND AND SITE DEVELOPMENT                        |   | $      | 5,900,000  |   |
| CONSTRUCTION CONTINGENCY                         |   | $      | 600,000    |   |
| CONSTRUCTION INSURANCE                           |   | $      | 100,000    |   |
| PERMITS                                          |   | $      | 240,000    |   |
| OFFERING EXPENSES                                |   | $      | 256,000    |   |
| CAPITALIZED INTEREST                             |   | $      | 800,000    |   |
| ORGANIZATIONAL COSTS                             |   | $      | 569,000    |   |
| FINANCING COSTS                                  |   | $      | 430,000    |   |
| START-UP COSTS:                                  |   |   |       |
| Pre-production period costs                      |   | $      | 660,000    |   |
| Inventory - Corn                                 |   | $      | 960,000    |   |
| Inventory - Chemicals, Yeast, Denaturant         |   | $      | 200,000    |   |
| Inventory - Ethanol and Distillers Dried  Grains |   | $      | 750,000    |   |
| Spare Parts                                      |   | $      | 260,000    |   |
| Working Capital                                  |   | $      | 2,025,000  |   |
| TOTAL                                            |   | $      | 59,325,000 |   |

 

We expect the total funding required for theplant to be $59,325,000, which includes $45,575,000 to build the plant and$13,750,000 for other project development costs including land, sitedevelopment, utilities, start-up costs, capitalized fees and interest,inventories and working capital.  The total project cost has increased by$275,000 from $59,050,000 to $59,325,000. The increase of $275,000 includes the cost of installing a recuperativethermal oxidizer rather than a standard thermal oxidizer.  The recuperative thermal oxidizer will allowus to operate at maximum capacity while continuing to satisfy certain emissionsstandards.

 

We estimate that we will need approximately$45,575,000 to construct the plant and a total of approximately $59,325,000 tocover all capital expenditures necessary to complete the project, make theplant operational and produce revenue. Based upon offering proceeds as of March 18, 2004, of $25,810,000,the senior credit facility of $33,024,200 and grant financing of $800,000, wewill have approximately $59,634,200 of capital available, which means we expectto have sufficient cash on hand to cover construction and related start-upcosts necessary to make the plant operational. Our offering remains open and we are continuing the sale of our Units,which means we may have additional capital available from these Unitsales.  There is no assurance, however,that we will be able to sell additional Units.

 

InOctober 2003 we began site grading and dirt work at the plant site.  Construction began inNovember 2003.  As of the date ofthis report, construction of the facility is progressing according to schedule.  Phase I of the construction processconsisting of site grading, concrete and dirt work have been completed.  Phase II of the construction process hasbeen started.  Phase II work includesinstallation of the utilities infrastructure, including the water distributionsystem.    We anticipate thatconstruction will continue on schedule barring any unforeseen delaysresulting from weather conditions or other events.

 

17

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We arediscussing the terms and conditions of an ethanol marketing agreement with apotential ethanol re-distributor.  Weanticipate entering into an ethanol marketing agreement prior to substantialcompletion of construction of the ethanol plant.  We are also discussing the terms and conditions of a distillersgrains marketing agreement with potential distillers grains marketingfirms.  We anticipate entering into adistillers grains marketing agreement prior to substantial completion of plantconstruction.

 

We expect toidentify a risk management services firm and begin negotiating a riskmanagement services agreement that will be executed prior to substantialcompletion of plant construction.  Thepurpose of the risk management services agreement will be to achieve priceprotection for our corn and natural gas supplies.

 

**Employees**

 

Uponcompletion of the ethanol plant, we intend to hire approximately 34 full-timeemployees. Approximately eleven of our employees will be involved primarily inmanagement and administration and the remainder will be involved primarily inplant operations.

 

The following table represents some of theanticipated positions within the plant and the minimum number of individuals weintend to employ for each position:

 

| **Position**            |   | **# Employed** |       |
|-------------------------|--------|----------------|------------|
| General  Manager        |   | 1              |       |
| Plant  Manager          |   | 1              |       |
| Commodities  Manager    |   | 1              |       |
| Controller              |   | 1              |       |
| Lab Manager             |   | 1              |       |
| Lab  Technician         |   | 2              |       |
| Secretary/Clerical      |   | 4              |       |
| Shift  Supervisors      |   | 4              |       |
| Maintenance  Supervisor |   | 1              |       |
| Maintenance  Craftsmen  |   | 4              |       |
| Plant  Operators        |   | 14             |       |
| **TOTAL**               |   | **34**         | ** ** |

 

**Liquidity and Capital Resources**

 

As ofDecember 31, 2003, we had cash and cash equivalents of $20,150,071 andtotal assets of $29,162,359.  As ofOctober 15, 2003, when we issued units in the offering, we netted deferredoffering costs of $354,523 against the subscription proceeds received.  We raised a total of $602,500 in seedcapital, which we have used to fund our organization and operation todate.  As of December 31, 2003, wehad current liabilities of $5,449,642, which consists primarily of ourconstruction accounts payable.  Sinceour inception through December 31, 2003, we have an accumulated deficit of$803,964.  Total members’ equity as ofDecember 31, 2003 was $23,710,419. Since our inception, we have generated no revenue from operations.

 

Subsequent tothe period covered by this report, we entered into a senior credit facilityconsisting of a $33,024,200 single construction loan with AgStar FinancialServices, PCA.  We had previouslyreceived a debt financing commitment from AgStar Financial Services, PCA for aterm loan of $32,462,500.  Subsequent toour receipt of the debt financing commitment, we negotiated the final terms ofthe senior credit facility and executed debt financing agreements for thesingle construction loan of $33,024,200. The credit facility is secured by substantially all of our assets.During construction, which is expected to be for a period of up to 16 months,we will make interest only payments on the principal balance of $33,024,200 atan interest rate equal to the one-month LIBOR (the London Interbank OfferedRate) plus 3.75%.  This interest ratemay be adjusted downward depending on the level of owners’ equity as reportedin our monthly financial statements.  Ifowners’ equity is between 50% and 54.99%, the interest rate will be at themonthly LIBOR plus 3.25%.  If owners’equity exceeds 55%, the interest rate will be equal to the monthly LIBOR plus2.75%.

 

18

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When theethanol plant is complete and operating, the construction loan will beconverted into two loans.  The firstwill be a term loan equal to the lesser of $29,024,200 or 55% of the totalproject cost. The second will be a $4,000,000 revolving loan.  The term loan of $29,024,200 or 55% of totalproject cost is for five years with a ten-year amortization.  Payments on the converted term loan will bepaid in monthly installments including principal and interest.  Interest on the converted term loan will beat a rate equal to the monthly LIBOR plus 3.75%.  This interest rate may be adjusted downward in exactly the manneras the interest rate on our construction loan, depending on our level ofowners’ equity as reported in our monthly financial statements.  Interest on the revolving loan will accrueat a rate equal to the monthly LIBOR plus 3.75%.  However, this interest rate may be adjusted downward in exactlythe same manner as the interest rate on our construction loan, depending on ourlevel of owners’ equity.

 

Theconstruction loan, converted term loan and line of credit agreements containrestrictions and financial covenants to which the Company will be subjectduring the term of the agreements.  Ifthe project suffers delays, we may not be able to timely repay the loan.  If interest rates increase, we will havehigher interest payments, which could adversely affect our business.

 

On October 29, 2003, we received aCommunity Development Block Grant of $271,000 to be used for infrastructureimprovements.  Subsequent to the periodcovered by this report, we received a Value-Added Agricultural Product MarketDevelopment Grant of $450,000 from the USDA, which is a matching grant to beused for start-up costs.  We alsoreceived, subsequent to the period covered by this report, a TransportationEconomic Assistance grant of $160,000 to be used for transportationimprovements.

 

We will beapplying for a grant from the USDA’s Commodity Credit Corporation. Under thegrant program, the Commodity Credit Corporation will reimburse eligible ethanolproducers of less than 65 million gallons of bioenergy one bushel of cornfor every two and one-half bushels of corn used for the increased production ofethanol. No eligible producer may receive more than $7.5 million under theprogram. Because we expect to be an eligible producer and to annually utilize15 million bushels of corn in the increased production of ethanol, weexpect to potentially receive the maximum award of $7.5 million. However,the Commodity Credit Corporation may award only $150 million annuallyfiscal years 2003 through 2006, and any award we received may be reduced basedupon the volume of applications from other eligible producers.   In addition, payments under the program inany one fiscal year may be less if Congress does not fully fund the program forthat fiscal year (funding for the program is subject to an annualappropriation).  We expect to beeligible to receive an award under the program only once during the life of ourproject.  However, to the extent thatour start-up period covers more than one fiscal year of the U.S. government, wemay apply twice and receive more than one award under the program.  The Commodity Credit Corporation BioenergyProgram is scheduled to expire on September 30, 2006.  The grants available under the CCC programmay not continue beyond their scheduled expiration date or if they do continue,the grants may not be at the same level. If our ethanol plant is not operational by the expiration of the CCCprogram or has not had substantial operations, we may not be eligible for thegrants or may receive a reduced amount.

 

The following schedule sets forth ourestimated sources as of the date of this report.    This schedule could change in the future depending onwhether we receive additional offering proceeds and grants.

 
| **Source of Funds**        |   | **25,810 Units  Sold(1)** |           | **Percent of Total** |       |
|----------------------------|--------|---------------------------|----------------|----------------------|------------|
| Offering Proceeds          |   | $                         | 25,810,000     |                 | 43.28      | % |
| Term Debt                  |   | $                         | 33,024,200     |                 | 55.38      | % |
| Grants                     |   | $                         | 800,000        |                 | 1.34       | % |
|                       |   |                      |           |                 |       |
| **Total Sources of Funds** |   | **$**                     | **59,634,200** | ** **           | **100.00** | **%** |

 

----

(1)  As of March 18, 2004.

 

Upon executionof the written debt financing agreements for the senior credit facilitydescribed above, and in accordance with the terms of our consulting agreementwith Value Add Ventures, LLC, we paid Value Add Ventures, LLC, a one-time bonusof $75,000.  Value Add Ventures, LLC, isnot affiliated with us, our directors or officers.

 

We previously obtained an operating line ofcredit in the amount of $320,000, which was guaranteed by members of our boardof directors and their spouses. Borrowings against this line accrue interest at the floating one-month

 

19

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LIBOR rate plus 3%.  The lineexpires in May 2004.  AtDecember 31, 2003, there were no outstanding borrowings against this lineof credit.

 

**Off-BalanceSheet Arrangements**

 

We do not haveany off-balance sheet arrangements.  TheCompany has purchase commitments as described in Note 9 to our FinancialStatements.

 

**ITEM 7.****                                                     FINANCIALSTATEMENTS.**

 

REPORT OF INDEPENDENT AUDITORS

 

Board of Directors

United Wisconsin GrainProducers, LLC

Friesland, Wisconsin

 

We have audited theaccompanying balance sheets of United Wisconsin Grain Producers, LLC (adevelopment stage company), as of December 31, 2003 and 2002, and the relatedstatements of operations, changes in members' equity, and cash flows for theyears ended December 31, 2003 and 2002, and from inception (November 2, 2001)to December 31, 2003. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits inaccordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financialstatements referred to above present fairly, in all material respects, thefinancial position of United Wisconsin Grain Producers, LLC,  (a development stage company) as of December31, 2003 and 2002, and the results of its operations and its cash flows for theyears ended December 31, 2003 and 2002 and from inception to December 31, 2003in conformity with accounting principles generally accepted in the United Statesof America.

 
| /s/    | Boulay,  Heutmaker, Zibell & Co. P.L.L.P. |
|--------|-----------------------------------------------|
|   | Certified  Public Accountants                 |

 

 

Minneapolis, Minnesota

February 18, 2004

 

20

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**UNITED WISCONSIN GRAIN PRODUCERS,LLC**

(A Development Stage Company)

 

BalanceSheets

 
| **ASSETS**                        |   | **December 31,  2003** |       | **December 31,  2002** |   |
|-----------------------------------|--------|-----------------------------|------------|-----------------------------|--------|
|                              |   |                        |       |                        |   |
| **Current Assets**                |   |                        |       |                        |   |
| Cash and cash equivalents         |   | $                           | 20,150,071 |                        | $      | 163,779 |   |
| Prepaid expenses                  |   | 5,101                       |       | 8,125                       |   |
| Total current assets              |   | 20,155,172                  |       | 171,904                     |   |
|                              |   |                        |       |                        |   |
| **Property, Plant and Equipment** |   |                        |       |                        |   |
| Land                              |   | 719,748                     |       | —                      |   |
| Office equipment                  |   | 6,871                       |       | 1,240                       |   |
| Construction in Process           |   | 8,183,681                   |       | —                      |   |
| Total property and equipment      |   | 8,910,300                   |       | 1,240                       |   |
| Less accumulated depreciation     |   | (1,113                      | )          | (41                         | )      |
| Net property and equipment        |   | 8,909,187                   |       | 1,199                       |   |
|                              |   |                        |       |                        |   |
| **Other Assets**                  |   |                        |       |                        |   |
| Deposits on land                  |   | 3,000                       |       | 13,000                      |   |
| Deferred offering costs           |   | —                      |       | 165,134                     |   |
| Debt issuance costs               |   | 95,000                      |       | —                      |   |
| Total other assets                |   | 98,000                      |       | 178,134                     |   |
|                              |   |                        |       |                        |   |
| **Total Assets**                  |   | $                           | 29,162,359 |                        | $      | 351,237 |   |

 

Notes to Financial Statements are an integral part of this Statement.

 

21

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**UNITED WISCONSIN GRAIN PRODUCERS,LLC**

(A Development StageCompany)

 

BalanceSheets

 
| **LIABILITIES AND MEMBERS’  EQUITY**                           |   | **December 31,  2003** |       | **December 31,  2002** |   |
|---------------------------------------------------------------------|--------|-----------------------------|------------|-----------------------------|--------|
|                                                                |   |                        |       |                        |   |
| **Current Liabilities**                                             |   |                        |       |                        |   |
| Current maturities of long-term debt                                |   | $                           | 1,700      |                        | $      | — |   |
| Accounts payable                                                    |   | 152,184                     |       | 74,171                      |   |
| Construction accounts payable                                       |   | 5,271,549                   |       | —                      |   |
| Accrued liabilities                                                 |   | 9,209                       |       | —                      |   |
| Other payables                                                      |   | 15,000                      |       | 15,000                      |   |
| Total current liabilities                                           |   | 5,449,642                   |       | 89,171                      |   |
|                                                                |   |                        |       |                        |   |
| **Commitments and Contingencies**                                   |   |                        |       |                        |   |
|                                                                |   |                        |       |                        |   |
| **Long-Term Debt, less current maturities**                         |   | 2,298                       |       | —                      |   |
|                                                                |   |                        |       |                        |   |
| **Members’ Equity**                                            |   |                        |       |                        |   |
| Member contributions, net of costs related to capital contributions |   | 24,514,383                  |       | 543,905                     |   |
| Deficit accumulated during development stage                        |   | (803,964                    | )          | (281,839                    | )      |
| Total members’ equity                                          |   | 23,710,419                  |       | 262,066                     |   |
|                                                                |   |                        |       |                        |   |
| **Total Liabilities and Members’ Equity**                      |   | $                           | 29,162,359 |                        | $      | 351,237 |   |

 

22

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**UNITED WISCONSIN GRAIN PRODUCERS,LLC**

(A Development StageCompany)

 

Statements of Operations

 
|                                                                                            |   | **Year Ended  December 31,  2003** |     | **Year Ended  December 31,  2002** |   | **From Inception  (November 2, 2001)  to December 31, 2003** |   |
|-------------------------------------------------------------------------------------------------|--------|-----------------------------------------|----------|-----------------------------------------|--------|------------------------------------------------------------------------|--------|
|                                                                                            |   |                                    |     |                                    |   |                                                                   |   |
| **Revenues**                                                                                    |   | $                                       | —   |                                    | $      | —                                                                 |   | $ | — |   |
|                                                                                            |   |                                    |     |                                    |   |                                                                   |   |
| **Operating Expenses**                                                                          |   |                                    |     |                                    |   |                                                                   |   |
| Project coordinator                                                                             |   | 54,222                                  |     | 36,455                                  |   | 100,473                                                                |   |
| Organization costs                                                                              |   | 20,547                                  |     | 20,166                                  |   | 59,271                                                                 |   |
| Consulting and professional fees                                                                |   | 171,613                                 |     | 177,161                                 |   | 348,774                                                                |   |
| Administrative                                                                                  |   | 319,307                                 |     | 36,068                                  |   | 359,986                                                                |   |
| Totals                                                                                          |   | 565,689                                 |     | 269,850                                 |   | 868,504                                                                |   |
|                                                                                            |   |                                    |     |                                    |   |                                                                   |   |
| **Operating Loss**                                                                              |   | (565,689                                | )        | (269,850                                | )      | (868,504                                                               | )      |
|                                                                                            |   |                                    |     |                                    |   |                                                                   |   |
| **Other Income (Expense)**                                                                      |   |                                    |     |                                    |   |                                                                   |   |
| Interest income                                                                                 |   | 41,670                                  |     | 4,200                                   |   | 45,870                                                                 |   |
| Interest expense                                                                                |   | (3,005                                  | )        | —                                  |   | (3,005                                                                 | )      |
| Miscellaneous                                                                                   |   | 4,900                                   |     | 10,775                                  |   | 21,675                                                                 |   |
| Total other income                                                                              |   | 43,565                                  |     | 14,975                                  |   | 64,540                                                                 |   |
|                                                                                            |   |                                    |     |                                    |   |                                                                   |   |
| **Net Loss**                                                                                    |   | $                                       | (522,124 | )                                       | $      | (254,875                                                               | )      | $ | (803,964 | ) |
|                                                                                            |   |                                    |     |                                    |   |                                                                   |   |
| **Net Loss Per Unit**(3,071, 1,398 and 3,698 weighted average  units outstanding, respectively) |   | $                                       | (170.02  | )                                       | $      | (182.31                                                                | )      | $ | (217.41 | ) |

 

23

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**UNITEDWISCONSIN GRAIN PRODUCERS, LLC**

(A DevelopmentStage Company)

 

Statement ofChanges in Members’ Equity

 
| **Balance - November 2, 2001**                                                                            |   | $          | —     |   |
|----------------------------------------------------------------------------------------------------------------|--------|------------|------------|--------|
|                                                                                                           |   |       |       |
| Initial capital contributions,  December 4, 2001 for 235 membership units at $500 per unit                |   | 117,500    |       |
|                                                                                                           |   |       |       |
| Net loss for the period from  November 2, 2001 (Date of Inception) through December 31, 2001         |   | (26,964    | )          |
|                                                                                                           |   |       |       |
| **Balance - December 31, 2001**                                                                           |   | 90,536     |       |
|                                                                                                           |   |       |       |
| Capital contributions, January 4, 2002  for 485 membership units at $1,000 per unit                       |   | 485,000    |       |
|                                                                                                           |   |       |       |
| Costs related to capital contributions                                                                         |   | (23,595    | )          |
|                                                                                                           |   |       |       |
| Membership unit redemption,  October 16, 2002 of 160 membership units at $218.75 per unit                 |   | (35,000    | )          |
|                                                                                                           |   |       |       |
| Net loss for the year ended  December 31, 2002                                                            |   | (254,875   | )          |
|                                                                                                           |   |       |       |
| **Balance - December 31, 2002**                                                                           |   | 262,066    |       |
|                                                                                                           |   |       |       |
| Capital contributions, October through  December 2003 for 24,325 membership units at $1,000 per unit |   | 24,325,000 |       |
|                                                                                                           |   |       |       |
| Costs related to capital contributions                                                                         |   | (354,523   | )          |
|                                                                                                           |   |       |       |
| Net loss for the year ended  December 31, 2003                                                            |   | (522,124   | )          |
|                                                                                                           |   |       |       |
| **Balance - December 31, 2003**                                                                           |   | $          | 23,710,419 |   |

 

Notes to Financial Statements are an integral part of this Statement.

 

24

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**UNITED WISCONSIN GRAIN PRODUCERS,LLC**

(A Development StageCompany)

Statements of Cash Flows

 
|                                                              |   | **Year Ended  December 31,  2003** |       | **Year Ended  December 31,  2002** |   | **From Inception  (November 2, 2001)  to December 31, 2003** |   |
|-------------------------------------------------------------------|--------|-----------------------------------------|------------|-----------------------------------------|--------|------------------------------------------------------------------------|--------|
| **Cash Flows from Operating Activities**                          |   |                                    |       |                                    |   |                                                                   |   |
| Net loss                                                          |   | $                                       | (522,124   | )                                       | $      | (254,875                                                               | )      | $ | (803,964 | ) |
| Adjustments to reconcile net loss to net cash used in operations: |   |                                    |       |                                    |   |                                                                   |   |
| Depreciation                                                      |   | 1,072                                   |       | 41                                      |   | 1,113                                                                  |   |
| Prepaid expenses                                                  |   | 3,024                                   |       | (8,125                                  | )      | (5,101                                                                 | )      |
| Other payable                                                     |   | —                                  |       | (2,000                                  | )      | —                                                                 |   |
| Accounts payable                                                  |   | 27,470                                  |       | 47,378                                  |   | 77,184                                                                 |   |
| Accrued liabilities                                               |   | 9,209                                   |       | —                                  |   | 9,209                                                                  |   |
| Net cash used in operating activities                             |   | (481,349                                | )          | (217,581                                | )      | (721,559                                                               | )      |
|                                                              |   |                                    |       |                                    |   |                                                                   |   |
| **Cash Flows from Investing Activities**                          |   |                                    |       |                                    |   |                                                                   |   |
| Land                                                              |   | (709,748                                | )          | —                                  |   | (709,748                                                               | )      |
| Capital expenditures                                              |   | —                                  |       | (1,240                                  | )      | (1,240                                                                 | )      |
| Capital expenditures for construction in process                  |   | (2,912,132                              | )          | —                                  |   | (2,912,132                                                             | )      |
| Deposits on land                                                  |   | —                                  |       | (9,400                                  | )      | (13,000                                                                | )      |
| Net cash used in investing activities                             |   | (3,621,880                              | )          | (10,640                                 | )      | (3,636,120                                                             | )      |
|                                                              |   |                                    |       |                                    |   |                                                                   |   |
| **Cash Flows from Financing Activities**                          |   |                                    |       |                                    |   |                                                                   |   |
| Member contributions                                              |   | 24,325,000                              |       | 485,000                                 |   | 24,927,500                                                             |   |
| Payments for long term debt                                       |   | (1,633                                  | )          | —                                  |   | (1,633                                                                 | )      |
| Payments for debt issuance costs                                  |   | (20,000                                 | )          | —                                  |   | (20,000                                                                | )      |
| Payments for costs of raising capital                             |   | (213,846                                | )          | (145,756                                | )      | (378,117                                                               | )      |
| Payments for membership unit redemption                           |   | —                                  |       | (20,000                                 | )      | (20,000                                                                | )      |
| Net cash provided by financing activities                         |   | 24,089,521                              |       | 319,244                                 |   | 24,507,750                                                             |   |
|                                                              |   |                                    |       |                                    |   |                                                                   |   |
| **Net Increase in Cash**                                          |   | 19,986,292                              |       | 91,023                                  |   | 20,150,071                                                             |   |
| **Cash and cash equivalents**- Beginning of Period                |   | 163,779                                 |       | 72,756                                  |   | —                                                                 |   |
| **Cash and cash equivalents**- End of Period                      |   | $                                       | 20,150,071 |                                    | $      | 163,779                                                                |   | $ | 20,150,071 |   |

 

- Continued -

 

Notes to Financial Statements are an integral part of this Statement.

 

25

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**UNITED WISCONSIN GRAIN PRODUCERS,LLC**

(A Development StateCompany)

 

Statements of Cash Flows

 
|                                                        |   | **Year Ended  December 31,  2003** |      | **Year Ended  December 31,  2002** |   | **From Inception  (November 2, 2001)  to December 31, 2003** |   |
|-------------------------------------------------------------|--------|-----------------------------------------|-----------|-----------------------------------------|--------|------------------------------------------------------------------------|--------|
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| **Supplemental Cash Flow Information**                      |   |                                    |      |                                    |   |                                                                   |   |
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| Cash paid during the year for: Interest                     |   | $                                       | 3,005     |                                    | $      | —                                                                 |   | $ | 3,005 |   |
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| **Noncash Investing and Financing Activities**              |   |                                    |      |                                    |   |                                                                   |   |
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| Deferred offering costs in accounts payable                 |   | $                                       | —    |                                    | $      | 24,457                                                                 |   | $ | — |   |
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| Capital expenditures funded by long-term debt               |   | $                                       | 5,631     |                                    | $      | —                                                                 |   | $ | 5,631 |   |
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| Membership units redeemed through issuance of other payable |   | $                                       | —    |                                    | $      | 15,000                                                                 |   | $ | 15,000 |   |
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| Construction in progress in accounts payable                |   | $                                       | 5,271,549 |                                    | $      | —                                                                 |   | $ | 5,271,549 |   |
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| Debt issuance costs in accounts payable                     |   | $                                       | 75,000    |                                    | $      | —                                                                 |   | $ | 75,000 |   |
|                                                        |   |                                    |      |                                    |   |                                                                   |   |
| Deposits applied for purchased land                         |   | $                                       | 10,000    |                                    | $      | —                                                                 |   | $ | 10,000 |   |

 

26

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**UNITEDWISCONSIN GRAIN PRODUCERS, LLC**

(A Development Stage Company)

 

Notes to Financial Statements

 

December 31, 2003 and 2002

 

**1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

*Nature of Business*

 

The Company was organized topool investors, some of whom intend to provide a corn supply, for a 40 milliongallon ethanol plant to be located near the town of Friesland in the townshipof Randolph, Wisconsin, with distribution to upper Midwest states. In addition,the Company intends to produce and sell distillers dried grains and carbondioxide as co-products of ethanol production. The Company began construction of its ethanol plant inNovember 2003.  As ofDecember 31, 2003, the Company is in the development stage with itsefforts principally devoted to construction activities.

 

*Fiscal Reporting Period*

 

The Company has adopted a fiscal year endingDecember 31 for reporting financial operations.

 

*Accounting Estimates*

 

Management uses estimates and assumptions inpreparing these financial statements in accordance with generally acceptedaccounting principles.  Those estimatesand assumptions affect the reported amounts of assets and liabilities, thedisclosure of contingent assets and liabilities, and the reported revenues andexpenses.  Actual results could differfrom those estimates.

 

In 2002, significant estimatesincluded the deferral of expenditures for land development and offering costswhich were dependent upon successful financing and project development, asdiscussed below.  It was at leastreasonably possible that these estimates could change in the near term.  There are no significant estimates in the2003 financial statements.

 

*Cash and Cash Equivalents*

 

At times throughout the year,the Company’s cash balances may exceed amounts insured by the Federal DepositInsurance Corporation (FDIC).  TheCompany considers all highly liquid investments with maturity of three monthsor less to be cash equivalent.  AtDecember 31, 2003, cash and cash equivalents of $18,539,195 were notinsured by the FDIC.  At December 31,2002, all cash and cash equivalents were insured by the FDIC.

 

*Property, Plant and Equipment*

 

Property, plant and equipmentis stated at the lower of cost or estimated fair value.  Depreciation is provided by use of thestraight-line method over the estimated useful lives of 5 years for officeequipment.  Depreciation expense for theyears ended December 31, 2003 and 2002 was $1,072 and $41,respectively.  Costs relating to theconstruction of the Company’s ethanol plant are capitalized and included inconstruction in progress.  Upon placingthe ethanol plant in service, the Company will begin to depreciated the costsrelated to the construction of the ethanol plant over their estimated usefullives.  The present value of the capitallease is classified as long-term debt and the related asset is included inproperty, plant, and equipment. Amortization of equipment under capital lease is included indepreciation expense.  Maintenance andrepairs are expensed as incurred; major improvements and betterments arecapitalized.

 

*Fair Value of Financial Instruments*

 

The fair value of the Company’s cash and cash equivalents approximatesits carrying value.  It is not currentlypracticable to estimate the fair value of long-term debt since this agreementcontains unique terms, conditions, and restrictions, which were negotiated atarm’s length.

 

27

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**UNITEDWISCONSIN GRAIN PRODUCERS, LLC**

(A Development Stage Company)

 

Notes to Financial Statements

 

December 31, 2003 and 2002

 

*Deposits on Land*

 

Prior to 2003, the Company made deposits onland options for 59 and 115 acres for its facility. Upon the purchase of theseparcels, the deposits will be applied to the payment of $236,000 and$1,000,000, respectively.  These costshave been stated at the lower of cost or estimated fair value.  During September 30, 2003, the Companyexercised its option to purchase the 115 acre parcel.  At December 31, 2003, the total of all deposits on land is$3,000 and relates solely to the 59 acre land option, which expires onMarch 31, 2004.  As ofDecember 31, 2003, it has not been exercised.  If this option expires or management does not intend to executethe option, the deposit will be written off when such a determination is made.

 

*Deferred Offering Costs*

 

The Company defers the costsincurred to raise equity financing until that financing occurs.  At such time that the issuance of new equityunits occurs, these costs are netted against the proceeds received; or if thefinancing does not occur, they are expensed. The initial issuance of new equity occurred October 15, 2003 andtotal costs of $354,523 were transferred to cost of raising capital and chargedagainst members’ equity.

 

*Debt issuance costs*

 

Costs relating to obtaining the Company’s debt financing have beencapitalized as incurred.  Upon theconversion of the Company’s construction line of credit to a term note, theCompany will begin to amortize the debt issuance costs using the effectiveinterest rate method.

 

*Grants*

 

The Company will recognize grant income as other income forreimbursement of expenses incurred upon complying with the conditions of thegrant.  For reimbursements of capitalexpenditures, the grants are recognized as a reduction of the basis of theasset upon complying with the conditions of the grant.

 

*Income Taxes*

 

The Company is treated as apartnership for federal and state income tax purposes and is generally notsubject to either federal or state income taxes.  Instead, its earnings and losses are included in the income taxreturns of the members.  Therefore, noprovision or liability for federal or state income taxes has been included inthese financial statements.

 

*Recently Issued Accounting Pronouncements*

 

The Financial Accounting Standards Board (FASB) has issued StatementNo. 149, “Amendment of Statement 133 on Derivative Instruments and HedgingActivities.”  The Statement amends andclarifies accounting for derivative instruments, including certain derivativeinstruments embedded in other contracts, and for hedging activities underStatement 133.

 

The Financial Accounting Standards Board (FASB) has issued StatementNo. 150, “Accounting for Certain Financial Instruments with Characteristics ofboth Liabilities and Equity*.*” The Statement establishes standards for how an issuer classifies andmeasures certain financial instruments.

 

Management does not expect the implementation of these pronouncementsto have a significant effect on the Company’s financial statements.

 

28

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**UNITEDWISCONSIN GRAIN PRODUCERS, LLC**

(A Development Stage Company)

 

Notes to Financial Statements

 

December 31, 2003 and 2002

 

*Reclassification*

 

Certain amounts in theStatement of Operations for 2002 and inception to date have been reclassifiedto conform to 2003 classifications. These reclassifications had no effect on net loss as previouslyreported.

 

**2. DEVELOPMENT STAGE ENTERPRISE**

 

The Company was formed onNovember 2, 2001 to have a perpetual life.  The Company was initially capitalized by contributions from itsfounding members and later by additional seed capital investors. The tenfounders contributed an aggregate of $117,500 for 235 units.  Forty-six members, including nine of thefounders, contributed an additional aggregate of $485,000 for 485 units thatwere issued in January 2002.

 

Effective April 1, 2002, the 720 units purchased by the foundingmembers and seed capital investors were split on a two-for-one basis resultingin 1,440 shares outstanding.

 

Effective October 16, 2002, the Company redeemed a total of 160units from two board members for $35,000, of which $20,000 has been paid by theCompany.  The remaining $15,000, whichis included in other payables, will be paid when the Company obtains all debtfinancing for the project.  In the eventof the Company’s liquidation or dissolution prior to obtaining the debtfinancing for the project, this payable will become subordinate to the rightsof the Company’s members.

 

In October through December 2003, the Company accepted subscriptionagreements from its equity offering drive of 24,325 units at $1,000 perunit.  At December 31, 2003 and2002, the Company had 25,605 and 1,280 units outstanding, respectively.

 

The weighted average units and loss per unit computations have been adjustedretroactively to account for the aforementioned split.

 

**3. BANK FINANCING**

 

In September 2003, the Company executed a revolving bank line ofcredit.  The new agreement permits theCompany to borrow up to $320,000 at the floating one-month LIBOR rate ofinterest plus 3% and expires May 2004. The line is secured by certain assets of the Company.  In addition, the line is guaranteed bymembers of the Board of Directors of the Company and their spouses.  As of December 31, 2003, there is nooutstanding balance.

 

On October 15, 2003, the Company received a non-binding seniorloan commitment from a financial institution. This commitment is for a single construction loan for $32,462,500 andconverts, within sixty days post construction upon certification of completionand attainment of the engineer’s production guarantee, into two loans with thefirst loan a $4 million revolving loan and the second with a $28,462,500 termloan.  The term of the loans is fiveyears with a ten-year amortization.  Theloan commitment offers a variable and fixed interest rate option.  The variable interest rate option has avariable base rate at the thirty-day LIBOR plus 375 basis points.  The construction period is 16 months fromloan closing not to exceed 60 days from initial plant start-up.  The fixed rate quote option is subject tochange weekly and is available at the conversion of the construction loan tothe term loan.  The final term note canbe segmented between a fixed portion and a variable portion.

 

The loan fees consist of underwriting fees, participation fee, andannual facility fee.  The underwritingfees are $100,000 of which $20,000 is due and was paid upon acceptance of theterm sheet and $80,000 is due at loan closing. There is a 75 basis point participation fee on the entire creditfacility due at loan closing.  This feewill be shared pro rata with the senior debt participants.  There is an annual facility fee of $40,000beginning at the conversion of the construction loan to the facility term noteand upon each anniversary for five years. If any of the senior debt is paid in its entirety, prepayment penaltiesof 3%, 2% and 1% will apply in the first, second and third year, respectively.

 

29

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**UNITEDWISCONSIN GRAIN PRODUCERS, LLC**

(A Development Stage Company)

 

Notes to Financial Statements

 

December 31, 2003 and 2002

 

These loans are subject to protective covenants requiring the Companyto maintain various financial ratios, are secured by all business assets, andrequire additional loan payments based on excess cash flow.  These loans would be secured bysubstantially all the Company’s assets. The Company closed on these loans in February 2004.

 

**4. LONG TERM DEBT**

 

In April 2003, the Company entered into a capital lease agreementfor office equipment for $5,631 with accumulated depreciation atDecember 31, 2003 of $824.  Thelease calls for thirty-six monthly payments of $160 including interest at 7%,maturing March 2006 and secured by equipment.

 

Long-term debt maturities are as follows:

 

| **Years Ending December 31,** |   |   |   |
|------------------------------------|--------|--------|--------|
| 2004                               |   | $      | 1,700  |   |
| 2005                               |   | 1,822  |   |
| 2006                               |   | 476    |   |
|                               |   | $      | 3,998  |   |

 

**5. MEMBERS’ EQUITY**

 

As specified in the Company’soperating agreement, the Company will have one class of membership units. TheCompany is authorized to issue up to 28,000 membership units.

 

The Company prepared and filed,on Form SB-2, a Registration Statement with the Securities and ExchangeCommission (SEC).  The Offering is for up to 27,500 membership units at$1,000 per unit.  As of May 14, 2003, the Registration Statement wasdeclared effective.  In October 2003, the Company had raised theminimum of $19,250,000 through the Offering as discussed in Note 2, obtainedand accepted a written debt financing commitment through a lender as discussedin Note 3, and, as a result, accepted subscriptions for 23,275 units which werebeing held in escrow.  At December 31, 2003, the Offering is open,and the Company is accepting subscriptions for units as it receives therequired subscription proceeds from the investor.  If the Offering ishighly effective, the Company will have to obtain the approval of its membersto issue units in excess of 28,000 units the Company is authorized to issue.

 

Income and losses are allocatedto all members based upon their respective percentage units held.

 

**6. RELATED PARTY TRANSACTIONS**

 

Through December 31, 2003, the Company had incurred $19,375 inproject coordinator fees to three current members and one former member.  At December 31, 2002, $8,375 of thesecosts were included in accounts payable to three current members and one formermember.  At December 31, 2003,there were no related accounts payable balance relating to these costs.

 

Through December 31, 2003, the Company has also incurred $91,806in director fees and related expense, of which $29,401 is all included inaccounts payable at December 31, 2003 to eight members.  At December 31, 2002, there were norelated party accounts payable balances relating to these costs.

 

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**UNITEDWISCONSIN GRAIN PRODUCERS, LLC**

(A Development Stage Company)

 

Notes to Financial Statements

 

December 31, 2003 and 2002

 

**7. GRANTS**

 

In October 2003, theWisconsin Department of Commerce approved a grant for $271,000 in funds toreimburse the Company for infrastructure costs.  At December 31, 2003, the Company had not incurred any costsassociated with this grant.

 

In January 2004, the Company was approved for a matching grantfrom the United States Department of Agriculture for $450,000.

 

In February 2004, the Company was approved for a matchingTransportation Economic Assistance grant from the Wisconsin Department ofTransportation for $160,000.

 

**8. INCOME TAXES**

 

The differences between financial statement basis and tax basis ofassets are as follows at December 31:

 
|                                               |   | **2003** |       | **2002** |   |
|----------------------------------------------------|--------|----------|------------|----------|--------|
| Financial  statement basis of total assets         |   | **$**    | 29,162,359 |     | $      | 351,237 |   |
|                                               |   |     |       |     |   |
| Organizational  and start-up costs capitalized     |   | 458,345  |       | 227,426  |   |
| Syndication  costs not deductible for tax purposes |   | 506,501  |       |     |   |
| Accumulated  depreciation and amortization         |   | (1,532   | )          | (21      | )      |
|                                               |   |     |       |     |   |
| Taxable  income tax basis of total assets          |   | **$**    | 30,125,673 |     | $      | 578,642 |   |

 

There were no differences between the financial statement basis and taxbasis of the Company’s liabilities.

 

**9.  COMMITMENTS AND CONTINGENCIES**

 

The Company has revised itestimate of total costs of the project from $59,050,000 to $59,325,000. The Company anticipates funding the development of the ethanol plant by usingapproximately $800,000 of grants, the proceeds it raises through the close ofthe Offering, and utilizing debt financing for the remainder of the costs.

 

In February 2002, the Company executed a master environmentalservices agreement with an organization that will provide environmentalconsulting, engineering, and analytical services.  The Company will submit work authorization requests on aproject-by-project basis.  As ofDecember 31, 2003, the Company has incurred approximately $200,000 incosts related to this agreement that are included in professional fees.

 

In March 2002, the Company executed a contract with a railroadengineering firm in order to provide a conceptual, schematic railroad layoutfor their plant.  The estimatedcommitment for railroad engineering is approximately $12,500.  The actual amount that the Company incurredwas $11,530.

 

In April 2002, the Company executed a consulting agreement with afirm that is engaged to assist the Company in its equity marketing efforts andsecuring debt financing.  The Companypaid the consulting firm a maximum of $3,000 per month, until the Company waslegally authorized to sell its member units, at which time the fees increasedto a maximum of $6,000 per month.  Sincethe Company raised the necessary amount of equity and received a bindingcommitment from a prospective lender to provide the remaining financing, theCompany is obligated to pay a one-time bonus of $75,000 to the consultingfirm.  At December 31, 2003, theCompany has incurred costs of $129,222 relating to this agreement, of which$75,000 is included in accounts payable which constitutes a significant portion(55%) of the accounts payable balance.

 

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**UNITEDWISCONSIN GRAIN PRODUCERS, LLC**

(A Development Stage Company)

 

Notes to Financial Statements

 

December 31, 2003 and 2002

 

In November 2002, the Company executed a contract with an energymanagement organization in order to provide pipeline consulting services.  The estimated commitment for this agreementis approximately $24,000.  As ofDecember 31, 2003 and 2002, the Company has incurred $8,000 and $2,000,respectively of these costs.

 

In March 2003, the Company executed a contract with an insuranceconsulting firm.  The estimatedcommitment for this agreement is $9,000. As of December 31, 2003, the Company has incurred $9,000 of thesecosts.

 

The Company entered an agreement in March 2002, with a railroadengineering firm to complete a Preliminary Rail Design and the requireddocumentation covering a Transportation Economic Assistance grant. The TEAgrant may fund up to fifty percent of the project costs relating totransportation improvements. The estimated commitment for this agreement isapproximately $64,400.  As ofDecember 31, 2003, the Company has incurred $29,915 of these costs.  This grant was awarded to the Company asdiscussed in Note 7.

 

In January 2003, subsequently amended through July 2003, theCompany executed a consulting agreement with a firm that is engaged to assistthe Company in performing a Preliminary Road Design and assist with a CommunityDevelopment Block Grant Application. The estimated commitment for this agreement is $20,950.  As of December 31, 2003, the Companyhad incurred $20,987 of these costs. This grant was awarded to the Company as discussed in Note 7.

 

In July 2003, the Company signed an agreement with an employeerecruitment firm.  The Company will paya fee based on a percentage of the first year of the employees’ salary.

 

In September 2003, the Company entered into an agreement with anarchitect firm to design an office facility. The Company will pay a total of $8,891 for these services.  Optional services under the agreement areplumbing design, HVAC design and electrical design and could total anadditional $6,900 in services.  TheCompany has incurred $10,331 in costs under this agreement.

 

The Company gave a notice of intent to exercise the option to purchasethe 115 acres on September 22, 2003. The closing will be done in two separate transactions. The real estateparcel excluding the existing buildings was closed on October 16, 2003 for$700,000.  The Company paid $690,000 incash and applied a $10,000 deposit at the closing.  The ten acres with the existing buildings will be closed onbetween June 4, 2004 and June 30, 2004 for $300,000.

 

In October 2003, the Company entered into an agreement with anelectric cooperative to provide electrical service.  The Company is required to make a non-refundable payment in aidof construction for the facilities the electrical cooperative will install forthe benefit of the Company.  The amountof this aid of construction shall be $253,750, unless there are changes in thescope of the facilities and the amount may be adjusted accordingly.  As of December 31, 2003, the Companyhas made an aid of construction payment of $60,000.

 

In October 2003, the Company entered into an agreement with acontractor for work site grading.  Worksite grade work began in October 2003. The total amount to be paid for the work should approximate$570,710.  At December 31, 2003,$328,378 of cost has been incurred and is included in construction in process.

 

On October 8, 2003, the Company entered into an agreement with arelated party, Fagen, Inc., to perform all design and construction services,provide all material, equipment, tools and labor, necessary to build a 40million gallon dry grind ethanol plant for $45,575,000.  The design-build contract provides that theCompany may be entitled to receive liquidated damages in the event Fagen, Inc.fails to substantially complete the plant within 30 to 90 days after thescheduled completion date.  Theseliquidated damages are in lieu of consequential damages for any losses we mayincur, such as loss of use, profits, business, reputation, or financing.  If Fagen, Inc.

 

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**UNITEDWISCONSIN GRAIN PRODUCERS, LLC**

(A Development Stage Company)

 

Notes to Financial Statements

 

December 31, 2003 and 2002

 

does not complete the plant within specified dates, they will pay theCompany for each day that substantial completion remains outstanding.  If the plant is substantially completed 30to 90 days prior to substantial completion date, the Company will pay Fagen,Inc. an early performance bonus for each day that substantial completion isachieved prior to specified date.  Ifthe contract is terminated by the Company without cause or by Fagen, Inc. forcause, the Company is required to pay Fagen, Inc. a fee of $1,000,000 if theCompany resumes construction of the plant through their own employees or thirdparties.  As of December 31, 2003,the Company has incurred $7,633,013 in costs related to this contract and$4,933,013 is included in construction accounts payable.

 

In October 2003, the Company entered into an agreement for stormwater management.  The estimated cost ofthis work will be between $3,000 and $5,000. As of December 31, 2003, the Company has incurred and paid $2,985in costs under this agreement.

 

In October 2003, the Company entered into an agreement with anengineering firm for initial construction testing services.  The approximate cost is $16,290.  As of December 31, 2003, the Companyhas incurred and paid $9,915 of these costs.

 

In November 2003, the Company entered into an agreement forconsulting services from November 17, 2003 to February 17, 2004.  Fees are to be $500 per day with a minimumof 18 days and a maximum of 22 days per month. As of December 31, 2003, the Company has incurred and paid $12,675of these costs.

 

In November 2003, the Company entered into an agreement toconstruct a well and pump.  Theestimated cost of the project is $42,430. The project was started and completed in January 2004.

 

33

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**ITEM 8.****                                                     CHANGESIN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.**

 

Boulay,Heutmaker, Zibell & Co., P.L.L.P. has been our independent auditor sincethe Company’s inception and is the Company’s independent auditor at the presenttime.  The Company has had nodisagreements with its auditors.

 

**ITEM 8A.****                                            CONTROLSAND PROCEDURES.**

 

Our management, including our President (theprincipal executive officer), Kevin M. Roche, and our Treasurer (the principalfinancial officer), Robert J. Miller, have reviewed and evaluated theeffectiveness of our disclosure controls and procedures as of the end of theperiod covered by this report.  Basedupon this review and evaluation, these officers believe that our disclosurecontrols and procedures are effective in ensuring that material informationrelated to us is recorded, processed, summarized and reported within the timeperiods required by the forms and rules of the Securities and ExchangeCommission.

 

Our management, including our principalexecutive officer and principal financial officer, have reviewed and evaluatedany changes in our internal control over financial reporting that occurred asof the end of the period covered by this report and there has been no changethat has materially affected or is reasonably likely to materially affect ourinternal control over financial reporting.

 

**PART III**

 

**ITEM9.****                                                     DIRECTORS,EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES.**

 

**Identification of Directors, ExecutiveOfficers and Significant Employees**

 

As of December 31, 2003, our Board of Directors consists of thefollowing directors:

 

**Kevin M. Roche, Chairman, President andDirector – Age 36**

 

**Mr. Roche has served as Chairman, Presidentand a director on the board of the Company since its inception.  For the past five years, Mr. Roche hasoperated a 4,000 acre corn, soybean and wheat farming operation in partnershipwith his father and brother.  He also**ownsand operates Roche Farms, Inc., which runs a 1,200 head cattle feedingoperation.

 

Mr. Rochecurrently serves as the Company’s Chairman and President.  Mr. Roche is anticipated to continue servingas a director and in the offices of Chairman and President until the firstannual members meeting following substantial completion of the plant and untila successor is elected and qualified.

 

*William R. Herrmann, Vice Chairman, Vice Presidentand Director – Age 61*

 

Mr. Herrmannhas served as Vice Chairman and Vice President since August 29, 2002 andas a director on the board of the Company since its inception.  For the past five years, Mr. Herrmann hasoperated a 1,500 acre crop farming enterprise.

 

Mr. Herrmanncurrently serves as the Company’s Vice Chairman and Vice President.  Mr. Herrmann is anticipated to continueserving as a director and in the offices of Vice Chairman and Vice Presidentuntil the first annual members meeting following substantial completion of theplant and until a successor is elected and qualified.

 

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*Robert Lange, Secretary and Director – Age 53*

 

Mr. Lange hasserved as Secretary since August 29, 2002 and as a director on the boardof the Company since its inception.  Forthe past five years, Mr. Lange has operated a cow/calf operation.  Prior to 2001, Mr. Lange operated a 1,500head cattle feedlot and a 1,800 corn, soybean and wheat farm.

 

Mr. Langecurrently serves as the Company’s Secretary. Mr. Lange is anticipated to continue serving as a director and in theoffice of Secretary until the first annual members meeting followingsubstantial completion of the plant and until a successor is elected andqualified.

 

*Robert J. Miller, Treasurer and Director –Age 51*

 

Mr. Miller hasserved as Treasurer and a director on the board of the Company since itsinception.  For the past five years, Mr.Miller has operated a 3,000 acre farming enterprise.

 

Mr. Millercurrently serves as the Company’s Treasurer. Mr. Miller is anticipated to continue serving as a director and in theoffice of Treasurer until the first annual members meeting followingsubstantial completion of the plant and until a successor is elected and qualified.

 

*Carl T. Benck, Director – Age 43*

 

Mr. Benck hasserved as a director on the board of the Company since its inception.  For the past five years, Mr. Benck hasoperated a 1,700 corn, soybean and wheat farm.

 

Mr. Benck isanticipated to continue serving as a director until the first annual membersmeeting following substantial completion of the plant and until a successor iselected and qualified.

 

*Jerry H. Franz, Director – Age 69*

 

Mr. Franz hasserved as a director on the board of the Company since its inception.  For the past five years, Mr. Franz hasoperated a Franz Family Farms, Inc., which runs a 1,800 acre corn, soybean andwheat farm.

 

Mr. Franz isanticipated to continue serving as a director until the first annual membersmeeting following substantial completion of the plant and until a successor iselected and qualified.

 

*Cal Dalton, Director – Age 46*

 

Mr. Dalton hasserved as a director on the board of the Company since its inception.  For the past five years, Mr. Dalton hasoperated a 2,100 acre corn, soybean, wheat and hay farm.

 

Mr. Dalton isanticipated to continue serving as a director until the first annual membersmeeting following substantial completion of the plant and until a successor iselected and qualified.

 

*Berwyn G. Westra, Director – Age 58*

 

Mr. Westra hasserved as a director on the board of the Company since its inception.  For the past five years, Mr. Westra has beenan accountant with the firm of Westra, Tillema & O’Connor, CPAs, L.L.C.,which he founded in 1987.

 

Mr. Westra isanticipated to continue serving as a director until the first annual membersmeeting following substantial completion of the plant and until a successor iselected and qualified.

 

*Lawrence Lagowski, Director – Age 51*

 

Mr. Lagowskihas served as a director on the board of the Company since October 28,2003 when he was appointed by the current board of directors to fill a vacantboard seat.  For the past five years,Mr. Lagowski has served as Chief Financial Officer of Indeck Energy Services,Inc.

 

Mr. Lagowskiis anticipated to continue serving as a director until the first annual membersmeeting following substantial completion of the plant and until a successor iselected and qualified.

 

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*Wayne Mitchell, Director – Age 48*

 

Mr. Mitchellhas served as a director on the board of the Company since October 28, 2003when he was appointed by the current board of directors to fill a vacant boardseat.  Mr. Mitchell is currently theSenior Vice President, Technology and Business Development for Fagen, Inc., andhas been employed by Fagen, Inc., since June 2000.  Prior to joining Fagen, Inc., he served as Process Team Leaderfor Reilly Industries, Inc., where he directed multi-disciplinary teams engagedin chemical process research and development. Mr. Mitchell serves as a director for two other publicly reportingcompanies.  He is a director on theboards of directors of Husker Ag, LLC, an ethanol plant in Plainview, Nebraskaand Badger State Ethanol, LLC, an ethanol plant in Monroe, Wisconsin.

 

Mr. Mitchellis anticipated to continue serving as a director until the first annual membersmeeting following substantial completion of the plant and until a successor iselected and qualified.

 

All successor directors will be elected to staggered terms as providedin our operating agreement.

 

**Audit Committee Financial Expert**

 

The Board of Directors has determined that wehave at least one audit committee financial expert serving on our auditcommittee.  Berwyn G. Westra is ouraudit committee financial expert.  He isindependent as defined by the NASDAQ rules.

 

**Adoptionof Code of Ethics**

 

Our Board ofDirectors has adopted a code of ethics that applies to our President andprincipal executive officer, Kevin M. Roche, our Vice-President, William R.Herrmann, our Treasurer and principal financial officer, Robert J. Miller, andour Secretary, Robert Lange.  Each ofthese individuals signed an acknowledgment of his receipt of our code ofethics.  We are filing a copy of our codeof ethics with the Securities and Exchange Commission by including the code ofethics as Exhibit 14.1 to this report.

 

**Identificationof Audit Committee**

 

The Companyhas an audit committee.  The members ofthe audit committee are the following directors: Berwyn G. Westra, Robert J.Miller and Lawrence Lagowski.

 

**ITEM 10.****               EXECUTIVE COMPENSATION.**

 

In calendar year 2003, our President andChief Executive Officer, Kevin M. Roche, received compensation of $14,288.  We reimburse our officers for expenses incurredrelating to services rendered on the Company’s behalf.  We do not have any employment agreementswith any officer or director.

 

**ITEM 11.****               SECURITY OWNERSHIP OF CERTAINBENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER MATTERS.**

 

**Security Ownership of Certain BeneficialOwners**

 

As of December 31, 2003, the following beneficial owners owned or held5% or more of our outstanding units:

 
| **(1) Title of Class** |   | **(2) Name and Address of  Beneficial Owner**                                |   | **(3) Amount and Nature  of  Beneficial Ownership** |   | **(4) Percent of Class** |   |
|------------------------|--------|------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|--------------------------|--------|
| Membership Units       |   | Fagen, Inc.  501 W. Highway 212  P.O. Box 159  Granite Falls, MN  56241 |   | 2,000 Units                                         |   | 7.82                     | %      |
| Membership Units       |   | Indeck Energy Services, Inc.  600 North Grove Rd.  Buffalo, IL  60089   |   | 2,000 Units                                         |   | 7.82                     | %      |

 

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**Security Ownership of Management**

 

As of December 31, 2003, members of our board of directors own units asfollows:

 
| **(1) Title of Class** |   | **(2) Name and Address of  Beneficial Owner**                                                                |   | **(3) Amount and  Nature of  Beneficial  Ownership** |   | **(4) Percent of  Class** |   |
|------------------------|--------|--------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|---------------------------|--------|
| Membership Units       |   | Kevin Roche, Chairman, President and  Director (1)  N3432 Cty BB  Columbus, WI  53925                   |   | 152 Units                                            |   | 0.59                      | %      |
| Membership Units       |   | William R. Herrmann, Vice Chairman, Vice  President and Director  W2553 Duborg Rd.  Columbus, WI  53925 |   | 210 Units                                            |   | 0.82                      | %      |
| Membership Units       |   | Robert J. Miller, Treasurer and Director  (2)  N 68 W 35460 Hwy K  Oconomowoc, WI 53066                      |   | 1,086 Units                                          |   | 4.24                      | %      |
| Membership Units       |   | Robert Lange, Secretary and Director  W11715 Behan Rd.  Columbus, WI  53925                             |   | 120 Units                                            |   | 0.47                      | %      |
| Membership Units       |   | Carl T. Benck, Director  W772 Hwy Z  Fall River, WI  53932                                              |   | 70 Units                                             |   | 0.27                      | %      |
| Membership Units       |   | Jerry H. Franz, Director  N2775 Kroncke Rd.  Poynette, WI  53955                                        |   | 135 Units                                            |   | 0.53                      | %      |
| Membership Units       |   | Cal Dalton, Director  407 Lake St., P.O. Box 715  Pardeeville, WI  53954                                |   | 200 Units                                            |   | 0.78                      | %      |
| Membership Units       |   | Berwyn G. Westra, Director  N8693 Cty FW  Beaver Dam, WI  53916                                         |   | 125 Units                                            |   | 0.49                      | %      |
| Membership Units       |   | Wayne Mitchell, Director  2001 Country Club Drive NE  Willmar, MN  56201                                |   | 10 Units                                             |   | 0.03                      | %      |
| **TOTAL:**             |   |                                                                                                         |   | 2,108 Units                                          |   | 8.22                      | %      |

 

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(1)          Kevin Roche owns and controls the RocheFamily Fund, which owns 16 Units.  These16 Units are included in Kevin Roche’s ownership total.

(2)          Robert J. Miller owns and controls L&NMEnterprises, LLC, which owns 500 Units. These 500 Units are included in Robert J. Miller’s ownership total.

 

**ITEM 12.****               CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS.**

 

As of December 31, 2003, we have engaged inthe following transactions with related parties.

 

*Fagen,Inc.*

 

Fagen, Inc., beneficially owns 2,000 of ourUnits.  At December 31, 2003, we had25,605 Units outstanding.  Fagen, Inc.’sownership of 2,000 Units means that it owns a 7.82% membership interest in theCompany.  We entered into a design-buildcontract with Fagen, Inc., for the purpose of providing design, development andconstruction services to us in connection with our ethanol plant.  Pursuant to the design-build contract,Fagen, Inc., has agreed to design, develop and construct a 40 million gallonper year ethanol plant for an amount not to exceed approximately $45,575,000,subject to change orders approved by us. The amount we expect to pay Fagen, Inc., for construction of the ethanolplant is comparable to that of an arms-length transaction.

 

37

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*IndeckEnergy Services, Inc.*

 

Indeck Energy Services, Inc. beneficiallyowns 2,000 of our Units.  At December31, 2003, we had 25,605 Units outstanding. Indeck Energy Services, Inc.’s ownership of 2,000 Units meaning that itowns a 7.82% membership interest in the Company.  Indeck Energy Services, Inc., as a subcontractor under thedesign-build contract, is expected to provide us with a recuperative thermaloxidizer in connection with the development and construction of our ethanolplant.  We expect the recuperativethermal oxidizer to decrease our emission of any volatile organic compounds andease our regulatory compliance.  The costof the thermal oxidizer is estimated at $2,100,000 and is included in the design-buildcontract price of $45,575,000.  Theamount we expect to pay Indeck Energy Services, Inc., for the recuperativethermal oxidizer for our ethanol plant is comparable to that of an arms-lengthtransaction.

 

**ITEM 13.****               EXHIBITSAND REPORTS ON FORM 8-K.**

 

(a)           Thefollowing exhibits are included herein:

 

**Exhibits Filed as Part of this Report and Exhibits Incorporated byReference.**

 

The followingexhibits are filed as part of this report. Exhibits previously filed are incorporated by reference, as noted.

 
| **Exhibit No.** |   | **Exhibit**                                                                                                                                                                                                                                                                                                  |
|-----------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1             |   | Articles of Organization of  registrant.  Filed as Exhibit 3.1 to the registrant’s registration  statement on Form SB-2 (Commission File 333-92188) and incorporated by  reference herein.                                                                                                         |
|            |   |                                                                                                                                                                                                                                                                                                         |
| 3.2             |   | Operating Agreement of the registrant.  Filed as Exhibit 3.2 to  the registrant’s registrations statement on Form SB-2 (Commission File  333-92188) and incorporated by reference herein.                                                                                                          |
|            |   |                                                                                                                                                                                                                                                                                                         |
| 4.1             |   | Form of Subscription Agreement of Registrant.  File as Exhibit  4.1 to the Registrant’s registration statement on Form SB-2 (Commission File  333-92188) and incorporated by reference herein.                                                                                                     |
|            |   |                                                                                                                                                                                                                                                                                                         |
| 4.2             |   | Form of Membership Unit Certificate.   Filed as Exhibit 4.2 to the registrant’s registration statement on Form SB-2  (Commission File 333-92188) and incorporated by reference herein.                                                                                                             |
|            |   |                                                                                                                                                                                                                                                                                                         |
| 4.3             |   | Escrow Agreement dated June 18, 2002.   Filed as Exhibit 4.3 to the Registrant’s registration statement on Form SB-2  (Commission File 333-92188) and incorporated by reference herein.                                                                                                            |
|            |   |                                                                                                                                                                                                                                                                                                         |
| 10.1            |   | Letter of Intent by and between the BOC  Group, Inc. and United Wisconsin Grain Producers, LLC dated January 10,  2003.  Filed as Exhibit 10.9 to the  registrant’s registration statement on Form SB-2/A (Commission File  333-92188) filed May 8, 2003 and incorporated by reference herein.     |
|            |   |                                                                                                                                                                                                                                                                                                         |
| 10.2            |   | Agreement by and between Key Railroad  Development, LLC and United Wisconsin Grain Producers, LLC dated January 30,  2003.  Filed as Exhibit 10.10 to the  registrant’s registration statement on Form SB-2/A (Commission File  333-92188) filed May 8, 2003 and incorporated by reference herein. |
|            |   |                                                                                                                                                                                                                                                                                                         |
| 10.3            |   | Notice of Intent to Exercise Option to  Purchase dated September 22, 2003 (Tessman).   Filed as Exhibit 10.13 to registrant’s periodic report on Form 10-QSB  (Commission File 333-92188) filed November 11, 2003 and incorporated by  reference herein.                                           |
|            |   |                                                                                                                                                                                                                                                                                                         |
| 10.4            |   | Accepted Proposal for Provision of Services  by Key Engineering Group, Inc. dated June 10, 2003.  Filed as Exhibit 10.14 to registrant’s periodic report on Form  10-QSB (Commission File 333-92188) filed November 11, 2003 and incorporated  by reference herein.                                |

 

38

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| 10.5   |   | Change Order Request No. 1 by Key Railroad  Development, LLC dated July 21, 2003.   Filed as Exhibit 10.15 to registrant’s periodic report on Form 10-QSB  (Commission File 333-92188) filed November 11, 2003 and incorporated by  reference herein. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                            |
| 10.6   |   | Electric Service Agreement dated October 3,  2003 by and between Adams-Columbia Electric Cooperative of Friendship and  United Wisconsin Grain Producers, LLC.                                                                                                  |
|   |   |                                                                                                                                                                                                                                                            |
| 10.7   |   | Contract for Construction Services between  Iverson and Son’s LLC and United Wisconsin Grain Producers, LLC.                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                            |
| 10.8   |   | Design-Build Contract dated October 8, 2003  between Fagen, Inc. and United Wisconsin Grain Producers, LLC.*                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                            |
| 10.9   |   | Contract Change Order dated December 30,  2003 between Fagen, Inc. and United Wisconsin Grain Producers, LLC.*                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                            |
| 14.1   |   | Code of Ethics of United Wisconsin Grain  Producers, LLC adopted March 18, 2004.                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                            |
| 31.1   |   | Certificate pursuant to 17 CFR 240.15d-14(a).                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                            |
| 31.2   |   | Certificate pursuant to 17 CFR  240.15d-14(a).                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                            |
| 32.1   |   | Certificate pursuant to 18 U.S.C. Section  1350.                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                            |
| 32.2   |   | Certificate pursuant to 18 U.S.C. Section  1350.                                                                                                                                                                                                                |

 

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*Material has been omittedpursuant to a request for confidential treatment and such materials have beenfiled separately with the Securities and Exchange Commission.

 

(b)           Reports on Form 8-K.

 

None.

 

**ITEM 14.****  PRINCIPAL ACCOUNTANT FEES AND SERVICES**

 
| **Category**               |   | **Year** |   | **Fees** |   |
|----------------------------|--------|----------|--------|----------|--------|
| Audit Fees                 |   | 2003     |   | $        | 47,932 |   |
|                       |   | 2002     |   | $        | 48,944 |   |
| Audit–Related Fees(1) |   | 2003     |   | $        | 0      |   |
|                       |   | 2002     |   | $        | 0      |   |
| Tax Fees                   |   | 2003     |   | $        | 0      |   |
|                       |   | 2002     |   | $        | 0      |   |
| All Other Fees             |   | 2003     |   | $        | 0      |   |
|                       |   | 2002     |   | $        | 0      |   |

 

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(1)          Audit-related fees include consultation on accountingrules related to derivative accounting in accordance with Statement onFinancial Accounting Standard 133, as amended, and consultation on rulesrelated to consolidation.

 

Consistent with the Securities and ExchangeCommission requirements regarding auditor independence, it is the AuditCommittee’s policy to pre-approve on a case-by-case basis the audit andpermissible non-audit services provided by the independent auditor prior to thecommencement of the specified service. All services provided by our independent auditor, Boulay, Heutmaker,Zibell & Co., have been pre-approved by the Audit Committee.

 

39

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**SIGNATURES**

 

In accordancewith Section 13 or 15(d) of the Exchange Act, the registrant caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized.

 

 
|   |           |   | UNITED WISCONSIN GRAIN PRODUCERS, LLC                                                                                                                                                                                       |
|--------|----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |           |   |                                                                                                                                                                                                                        |
| Date:  | March 30, 2004 |   | /s/                                  Kevin  M. Roche   |
|   |           |   | Kevin M. Roche                                                                                                                                                                                                              |
|   |           |   | Chairman and President                                                                                                                                                                                                      |
|   |           |   | (Principal Executive Officer)                                                                                                                                                                                               |
|   |           |   |                                                                                                                                                                                                                        |
| Date:  | March 30, 2004 |   | /s/                                  Robert  J. Miller |
|   |           |   | Robert J. Miller                                                                                                                                                                                                            |
|   |           |   | Treasurer                                                                                                                                                                                                                   |
|   |           |   | (Principal Financial and Accounting Officer)                                                                                                                                                                                |

 

In accordancewith the Exchange Act, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the datesindicated.

 

 
| Date: March 30, 2004 | /s/ Kevin M. Roche                               |   |
|----------------------|--------------------------------------------------|--------|
|                 | Kevin M. Roche, President and Director           |   |
|                 |                                             |   |
| Date: March 30, 2004 | /s/ William R. Herrmann                          |   |
|                 | William R. Herrmann, Vice-President and Director |   |
|                 |                                             |   |
| Date: March 30, 2004 | /s/ Robert J. Miller                             |   |
|                 | Robert J. Miller, Treasurer and Director         |   |
|                 |                                             |   |
| Date: March 30, 2004 | /s/  Robert Lange                           |   |
|                 | Robert Lange, Secretary and Director             |   |
|                 |                                             |   |
| Date: March 30, 2004 | /s/ Carl Benck                                   |   |
|                 | Carl Benck, Director                             |   |
|                 |                                             |   |
| Date: March 30, 2004 | /s/ Cal Dalton                                   |   |
|                 | Cal Dalton, Director                             |   |
|                 |                                             |   |
| Date: March 30, 2004 | /s/Jerry H. Franz                                |   |
|                 | Jerry H. Franz, Director                         |   |
|                 |                                             |   |
| Date: March 30, 2004 | /s/ Berwyn G. Westra                             |   |
|                 | Berwyn G. Westra, Director                       |   |

 

40

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|                 |                        |   |
|----------------------|-----------------------------|--------|
| Date: March 30, 2004 | /s/ Lawrence Lagowski       |   |
|                 | Lawrence Lagowski, Director |   |
|                 |                        |   |
| Date: March 30, 2004 | /s/ Wayne Mitchell          |   |
|                 | Wayne Mitchell, Director    |   |

 

 

 

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