**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**Amendment No. 1 to**

 

**FORM 10-KSB/A**

 

**ý****         ****Annual report under Section 13 or 15(d) of theSecurities Exchange Act of 1934.**

 

**For the year ended December 31, 2003**

 

**OR**

 

**o****         ****Transition report under Section 13 or 15(d) ofthe Exchange Act.**

 

**For the transition periodfrom     to     **

 

**Commission file number 333-92188**

 

**UNITED WISCONSIN GRAIN PRODUCERS, LLC**

(Exact name of small business issuer asspecified 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)                                |

 

Securitiesregistered under Section 12(b) of the Exchange Act:  **None**

 

Securitiesregistered under Section 12(g) of the Exchange Act:  **None**

 

Checkwhether the issuer:  (1) filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act during the past 12 months (or forsuch shorter period that the registrant was required to file such reports), and(2) has been subject to such filing requirements for the past 90days.     Yes     o     No     o

 

Check ifthere is no disclosure of delinquent filers in response to Item 405 ofRegulation S-B is not contained in this form, and no disclosure will becontained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form10-KSB or any amendment to this Form 10-KSB. o

 

State issuer’s revenues for its most recent fiscalyear.    **None**

 

As of March 18, 2004, the aggregate market value of the membershipunits held by non-affiliates (computed by reference to the most recent offeringprice of such membership units) was $27,090,000.

 

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

 

DOCUMENTS INCORPORATED BYREFERENCE    **None**.

 

TransitionalSmall Business Disclosure Format (Check one):     o Yes     o No

 

 

----

 

**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

----

 

**Explanatory Note Regarding Amendment No. 1**

 

This Amendment No. 1 to the Annual Report on Form 10-KSB of UnitedWisconsin Grain Producers, LLC, (the “Company”) for the year endedDecember 31, 2003, is being filed for the purpose of amending andrestating Items 6 and 7 to account for a correction of an overstatement ofconstruction in progress and the related payable which had no effect on thestatement of members’ equity and the statement of operations   In accordance with Rule 12b-15 under theSecurities and Exchange Act of 1934, the complete text of such Items, asamended, are set forth herein.  In addition to the filing of thisAmendment No. 1 and pursuant to Rule 12b-15, the Company is including certaincurrently dated certifications.  The remainder of the Company’s Form10-KSB is unchanged and is reproduced in its entirety in this Amendment No.1.  This report speaks as of the original filing date of the Form 10-KSBand has not been updated to reflect events occurring subsequent to the originalreporting date.

 

**PART I.**

 

**ITEM 1.****                            ****DESCRIPTION OF BUSINESS.**

 

United Wisconsin Grain Producers, LLC was formed as a Wisconsin limitedliability company on November 2, 2001.  References to “we”, “us”, “our”and the “Company” refer to United Wisconsin Grain Producers, LLC.  We area start-up company in the development stage.  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.

 

**PrincipalProducts and Markets**

 

We have commenced construction of the ethanol plant in the township ofRandolph, just outside the village of Friesland in Columbia County, Wisconsin insouth central Wisconsin.  The project site is located  withinone-half mile of the state highway 33 and two miles east of state highway73.  The Union Pacific Railroad is expected to provide rail service to thesite.  We commenced construction in November 2003 and estimate thatconstruction will be completed approximately April 2005.  We selectedthis site because of its location to existing grain production, accessibilityto road and rail transportation and availability of utilities.

 

The principal products we expect to produce at the ethanol plant areethanol and distillers grain.  Ethanol is ethyl alcohol, a fuel componentmade primarily from corn and various other grains, and can be used as: (i) anoctane enhancer in fuels; (ii) an oxygenated fuel additive for the purpose ofreducing ozone and carbon monoxide vehicle emissions; and (iii) anon-petroleum-based gasoline substitute.  Approximately 95% of all ethanolis used in its primary form for blending with unleaded gasoline and other fuelproducts.  The implementation of the Federal Clean Air Act has madeethanol fuels an important domestic renewable fuel additive.  Used as afuel oxygenate, ethanol provides a means to control carbon monoxide emissionsin large metropolitan areas.  The principal purchasers of ethanol aregenerally the wholesale gasoline marketer or blender.  We expect theprincipal markets for our ethanol to be petroleum terminals in the Midwest.

 

A principal by-product of the ethanol production process is distillersgrains, a high protein, high-energy animal feed supplement primarily marketedto the dairy and beef industry.  Distillers grains contain bypass proteinthat is superior to other protein supplements such as cottonseed meal andsoybean meal.  Bypass proteins are more digestible to the animal, thusgenerating greater lactation in milk cows and greater weight gain in beefcattle.  Dry mill ethanol processing creates three forms of distillersgrains:  Distillers Wet Grains (“DWS”), Distillers Modified Wet Grains(“DMWGS”), and Distillers Dried Grains with Solubles (“DDGS”).  DWS isprocessed corn mash that contains approximately 70% moisture.  DWS has ashelf life of approximately three days and can be sold only to farms within theimmediate vicinity of an ethanol plant.  DMWGS is DWS that with syrupadded and dried to approximately 50% moisture.  DMWGS have a slightlylonger shelf life of approximately ten days and are often sold to nearbymarkets.  DDGS is DWS that has been dried to 10% to 12% moisture. DDGS have an almost indefinite shelf life and may be sold and shipped to anymarket regardless of its vicinity to an ethanol plant.  We intend tomarket DDGS and may explore possibilities of local demand for DMWGS andDWS to market at least a portion of our distillers grains in these forms.

 

3

----

 

We currently have no plans to market or distribute the carbon dioxidethat will be produced at the plant as a by-product of our ethanol production.

 

*LocalEthanol Markets*

 

Local markets will be limited and must be evaluated on a case-by-casebasis.  Although local markets will be the easiest to service, they may beoversold, which depresses the ethanol price.

 

*RegionalEthanol Markets*

 

Typically a regional market is one that is outside of the local market,yet within the neighboring states.  This market will likely be serviced byrail, and is within a 450-mile radius of the plant.  We intend toconstruct a railroad spur to our plant so that we may reach regional andnational markets with our products.  Because ethanol use results in lessair pollution than regular gasoline, regional markets typically include largecities that are subject

 

toanti-smog measures as either carbon monoxide or ozone non-attainment areas,such as: Minneapolis, Chicago, and St. Louis.

 

Generally, the regional market is a good business to develop.  Thefreight is reasonable, the competition, while aggressive, is not too severe,and the turn-around time on the rail cars is an advantage.  We intend toobtain letters of intent to purchase product from regional buyers rather thanfrom national buyers.  Regional pricing tends to follow nationalpricing less the freight difference.  As with national markets, the use ofa group-marketing program or a broker is advantageous, especially in the firstone to three years of operation.

 

Occasionally there are opportunities to obtain backhaul rates fromlocal trucking companies.  These are rates that are reduced since thetruck is loaded both ways.  Normally the trucks drive to the refined fuelsterminals empty and load gasoline product for delivery.  A backhaul is theopportunity to load the truck with ethanol to drive to the terminal.

 

*NationalEthanol Markets*

 

Recently, California has been the focus of a major ethanol campaign asMTBE is now being phased out.  MTBE is a commonly used oxygenate used infuels for compliance with Federal Clean Air Act mandates, and is a majorcompetitor of ethanol.  California banned the use of MTBE beginningJanuary 1, 2004.  Ethanol is the most readily available substitutefor MTBE in this market.  MTBE is still used in significant quantitiesthroughout the state, but ethanol use is expected to increase now that the banis in effect.  Most California fuel refiners and blenders have alreadyvoluntarily removed MTBE from their terminals based on preparations for anearlier deadline.  California represents a market of about one billiongallons annually due to the oxygenate requirement for RFG.  The recentdenial of the California RFG oxygenate waiver request has resulted inCalifornia litigating against the EPA in an effort to overturn the denial.

 

While there is a great deal of focus on California, the Northeast hasemerged as another national ethanol market, according to the Renewable FuelsAssociation.  As in California, the primary drivers are the health andwater concerns surrounding the use of MTBE.  For example, beginningJanuary 1, 2004, New York and Connecticut have banned the use ofMTBE.  Fifteen other state legislatures have phased out MTBE.  Weexpect ethanol to replace MTBE as the oxygenate in the Reformulated Gasoline(“RFG”) program and generate markets of approximately 200 million gallons peryear in New York and approximately 50 million gallons per year in Connecticut,however, other MTBE replacements may capture a portion or all of thesepotential markets. The ultimate size of the California and Northeast marketswill depend on how the RFG oxygenate and MTBE debate plays out in the politicalarena.

 

Illinois, Ohio and Minnesota are by far the largest ethanolmarkets.  In addition to California and the Northeast, there are alsoother significant national ethanol market opportunities such as Arizona,Colorado, Texas, Michigan, Wisconsin, Washington, and North Carolina.

 

4

----

 

| **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 of TransportationHighway Statistics 2002

 

**DistributionMethods**

 

We intend to sell and market the ethanol and distillers grains producedat the plant through normal and established markets, including the local,regional and national markets described above.  We hope to market all ofthe ethanol produced with the assistance of one ethanol re-distributor but wehave not yet entered into any agreement regarding the sale of ourethanol.  We anticipate selling all of our distillers grains throughdistillers grain marketing firms but have not yet entered into any agreementregarding the sale of our distillers grains.  We may engage one marketingfirm for the purpose of marketing our distillers grains locally and a differentmarketing firm to market our distillers grains outside the local markets.

 

We do not plan to hire or establish a sales organization to market anyof the products we produce.  Consequently, we will be extremely dependentupon the marketing agents we engage to market our ethanol and distillers grain.

 

**Competition**

 

We expect to be in direct competition with other ethanol producers,many of who have greater resources than we do.  We expect that additionalethanol producers will enter the market as the demand for ethanol increases.

 

Our ethanol plant will compete with other ethanol producers on thebasis of price and, to a lesser extent, delivery service. We expect to competefavorably with other ethanol producers due to our proximity to ample grainsupplies and multiple modes of transportation.  We believe our plant’slocation offers an advantage over other ethanol producers in that it has readyaccess by rail to growing ethanol markets, which we expect to reduce our costof sales.

 

Currently, Wisconsin has three other operating ethanol plants and oneethanol plant in the development stage.  Badger State Ethanol hasconstructed a 40 million gallon per year ethanol plant in Monroe, Wisconsin,which is approximately 70 miles from our plant site.  Ace Ethanol operatesa 15 million gallon per year ethanol plant in Stanley, Wisconsin, which isapproximately 125 miles from our plant site.  Utica Energy in Oshkosh,Wisconsin, produces 24 million gallons of ethanol per year.  Utica Energyis approximately 50 miles from our plant site and may overlap the northeasternedge of our expected corn supply area.  Western Wisconsin Renewable EnergyCooperative is a 40 million gallon per year development-stage ethanol plant inBoyceville, Wisconsin, which is approximately 150 miles from our plantsite.  There are also numerous other producer and privately owned ethanolplants planned and operating throughout the Midwest and elsewhere in the UnitedStates.

 

5

----

 

The largest ethanol producers include Archer Daniels Midland, Cargill,Midwest Grain, Aventine Renewable Energy, Inc., VeraSun Energy Corporation andAbengoa Bioenergy Corp., all of which are capable of producing many times theamount of ethanol we expect to produce. In addition, there are several regionalentities recently formed, or in the process of formation, of a similar size andwith similar resources to us.

 

The ethanol industry has grown to over 74 production facilities in the UnitedStates.  Industry authorities estimate that these facilities are capableof producing approximately 3.1 billion gallons of ethanol per year.  Plansto construct new plants or to expand existing plans have been announced whichwould increase capacity by approximately 492 million gallons per year.  Wecannot determine the effect of this type of an increase upon the demand orprice of ethanol.  The following table sets forth the current and plannedmajor ethanol production facilities in the United States, according to theRenewable Fuels Association, U.S. Fuel Ethanol Production CapacityMarch 2004 Report.

 

**U.S. FUEL ETHANOL PRODUCTION CAPACITY**million gallons 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                            |       |                                         |       |

 

6

----

 
| 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     |   |   |   |
| 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     |   |   |   |

 

7

----

 
| Sioux River Ethanol, LLC*^               |   | Hudson, SD      |   | Corn              |   |   |   | 45     |   |
|------------------------------------------|--------|-----------------|--------|-------------------|--------|--------|--------|--------|--------|
| Tall Corn Ethanol, LLC*                  |   | Coon Rapids, IA |   | Corn              |   | 45     |   |   |   |
| 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**      |   |              |   |

 

----

*farmer-owned

 

^ underconstruction

 

LastUpdated: March 2004

 

The ethanol industry is very competitive.  While the ethanolindustry has been growing, there is significant competition among ethanolproducers.  Nationally, ethanol production is concentrated in a few largecompanies. Our ethanol plant will face a competitive challenge from largerfactories, from plants that can produce a wider range of products than ourplant, and from other plants similar to our planned ethanol plant.

 

Our ethanol plant will be in direct competition with other ethanolproducers, many of which have greater resources than we currently have or willhave in the future.  Large ethanol producers such as Archer DanielsMidland and Cargill, among others, are capable of producing significantlygreater quantities than the amount of ethanol we expect to produce. Inaddition, there are several Minnesota, Iowa and other mid-western regionalethanol producers, as well as others on the east and west coasts and the southernUnited States, which have recently formed, are in the process of forming, orare under consideration, which are or would be of a similar size and havesimilar resources to us. In light of such competition, there is no assurancethat we can successfully construct and operate the ethanol plant.

 

Our ethanol plant will also compete with producers of other gasolineadditives having similar octane and oxygenate values as ethanol, such asproducers of MTBE, a petrochemical derived from methanol that costs less toproduce than ethanol. Although currently the subject of a federal ban, manymajor oil companies can produce MTBE and because it is petroleum-based, its useis strongly supported by major oil companies. Alternative fuels, gasolineoxygenates and alternative ethanol production methods are also continuallyunder development. The major oil companies have significantly greater resourcesthan we have to market MTBE and other additives, to develop alternativeproducts, and to influence legislation and public perception of MTBE andethanol. These companies also have sufficient resources to begin production ofethanol should they choose to do so.

 

Alternative fuels, gasoline oxygenates and ethanol production methodsare continually under development by ethanol and oil companies with far greaterresources that we have. New products or methods of ethanol production developedby larger better-financed competitors could provide them competitive advantagesover us and harm our business.

 

**Sourcesof Raw Materials - Corn Feedstock Supply**

 

We anticipate that our plant will need approximately 15 million bushelsof grain per year or 42,000 bushels per day as the feedstock for its drymilling process.  We anticipate establishing ongoing businessrelationships with

 

8

----

 

localcorn elevators to acquire the corn needed for the project, although we expectto acquire some corn directly from local farmers.  We expect to becomelicensed as a Wisconsin grain dealer, which will allow us to contract topurchase Wisconsin grains.  We have identified a number of elevators aspotential sources of corn in Wisconsin and discussions are in progress forfuture corn delivery.  We have no contracts, agreements or understandingswith any grain producers in the area, although we anticipate procuring cornfrom these sources.

 

Although the area surrounding the plant produces a significant amountof corn and we do not anticipate problems sourcing grain, there is no assurancethat a shortage will not develop, particularly if there were an extendeddrought or other production problem.  In addition, our financialprojections assume that we can purchase grain for prices near the ten-yearaverage for corn in the area of the plant.  However, there is no assurancethat we will be able to purchase grain for these prices.  Grain prices areprimarily dependent on world feedstuffs supply and demand and on U.S. andglobal corn crop production, which can be volatile as a result of a number offactors, the most important of which are weather, current and anticipatedstocks and prices, export prices and supports and the government’s current andanticipated agricultural policy.   The price of grain has fluctuatedsignificantly in the past and may fluctuate significantly in the future.Currently, local corn prices are approximately $2.90 per bushel.  Becausethe market price of ethanol is not related to corn prices, ethanol producersare generally not able to compensate for increases in the cost of cornfeedstock through adjustments in prices charged for their ethanol.  Wetherefore anticipate that our plant’s profitability will be negatively impactedduring periods of high corn prices.  We have determined that the averageprice for corn over the last ten years in our corn supply area has been $2.27per bushel.

 

We intend to hire a commodities manager to ensure the consistentscheduling of corn deliveries and to establish and fill forward contractsthrough the grain elevators.  The commodities manager will coordinate corndeliveries between the railroad and the participating elevators.** **Alternatively,we may contract with a third party, such as a grain elevator, to originate orsource our grain.  We intend to buy as much grain as possible from localproducers, members as well as non-members, and from local elevators.  Wemay purchase additional grain from outside of our trade area as need and pricedictates.

 

Due to fluctuations in the price of corn, we intend to utilize forwardcontracting and hedging strategies to manage our commodity risk exposure andoptimize finished product pricing.  We anticipate that most of our grainwill be acquired in this manner.  We intend to do this to help guardagainst price movements that often occur in corn markets.  Hedging meansprotecting the price at which we buy corn and the price at which we will sellour products in the future.  It is a way to attempt to reduce the riskcaused by price fluctuation.  The effectiveness of such hedging activitiesis dependent upon, among other things, the cost of corn and our ability to sellsufficient amounts of ethanol and distillers dried grains.  Although wewill attempt to link hedging activities to sales plans and pricing activities,such hedging activities can themselves result in costs because price movementsin corn contracts are highly volatile and are influenced by many factors thatare beyond our control.  We may incur such costs and they may besignificant.

 

**Utilities**

 

The plant will require a significant and uninterrupted supply ofelectricity, natural gas and water to operate.

 

*NaturalGas*

 

To access sufficient supplies of natural gas to operate the plant, aconnection to a distribution pipeline located underground at our site will berequired.  A pipeline owned by Alliant Energy is approximately one andone-half mile from our plant location and connects 3.5 miles away to aninterstate pipeline owned by ANR.  We anticipate that natural gas will beprocured from one or more suppliers.  We are in the process of negotiatingwith a natural gas supplier but have not yet entered into any agreements forour natural gas supply.  We will need to construct a pipeline at our plantsite to link to the Alliant Energy pipeline.  We are currently negotiatingwith Alliant Energy with respect to the construction, ownership and operationof this pipeline.  We have not yet entered into any agreements for theconstruction and operation of the connecting pipeline.  The pipeline willbe connected into a long-haul transportation pipeline to transport natural gasfrom various production areas, such as the Gulf of Mexico, Canada,Mid-Continent, etc.  We have engaged U.S. Energy Services to providenatural gas management services including assistance with negotiation of ournatural gas supply and transportation.

 

9

----

 

*Electricity*

 

In October 2003, we entered into an agreement with Adams-ColumbiaElectric Cooperative for the provision of all electrical energy required by theplant.  We will purchase electricity at the Cooperative’s power supplyrates then in effect, which will be applied 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 and operate a substation at our plant site tofacilitate electrical distribution to our plant.  The estimated cost ofthese facilities is $725,000.  Under the agreement, we are required tomake a non-refundable payment of $253,750 in aid of construction for thefacilities the Cooperative will install for our benefit.  The aid toconstruction payment will be invoiced to us as the Cooperative makesconstruction commitments for our plant site.  At December 31, 2003,our aid in construction payment totaled $60,000.  This payment may beadjusted if there is a change in the scope of the facilities installed by theCooperative.  The agreement is for a period of 3 years commencing from thedate electric service is first provided.  At each anniversary date of thefirst date service is provided, the agreement is automatically extended foranother 3 year period unless either party gives written notice of intent not toextend.

 

*Water*

 

We will require a significant supply of water.  Water requirementsfor a 40 million gallon per year plant are approximately 307 gallons perminute.  That is approximately 442,787 gallons per day.  In theFriesland area, approximately 650 feet of hydraulic head are available in theaquifer under the plant site according to the Wisconsin Geological and NaturalHistory Survey (1978).  This means the aquifer could sustain wells capableof yielding 1,000 gallons per minute.  We have drilled one 500 gallon perminute well at our plant site and we are in the process of drilling anadditional 500 gallon per minute well at the site to ensure adequate watersupply.

 

**Dependenceon One or a Few Major Customers**

 

As discussed above, we intend to enter into marketing agreements forthe purposes of marketing and distributing our ethanol and distillersgrains.  We will rely on these marketing agents for the sale anddistribution of all of our products.  Therefore, we will be highlydependent on these marketing agents for the successful marketing of ourproducts.

 

**Design-BuildContract**

 

On October 8, 2003, we executed a design-build contract withFagen, Inc., under which Fagen, Inc., will serve as our design-builder of theethanol plant.  We expect to complete construction of the proposed plantand commence operations in April 2005, assuming constant availability ofsupplies and labor and assuming reasonable weather conditions.  Fagen,Inc., is currently serving as the design-builder for approximately nine otherethanol plants.  Fagen, Inc.’s involvement with other ethanol projects maydelay the progress of construction on our ethanol plant and commencement ofplant operations.  Any delay in construction of our plant and/orcommencement of plant operations could further delay our ability to generaterevenue and distributions of any profits to our members.

 

Under the terms of the design-build contract, we will pay Fagen, Inc.$45,575,000 to design and construct the plant, subject to any change orders weapprove.  All drawings, specifications and other construction relateddocuments will belong to Fagen, Inc.  We have a limited license to usesuch drawings, specifications and related documents in connection with ouroccupancy of the plant.  If the contract is terminated by us without causeor by Fagen, Inc. for cause, such as failure to pay undisputed amounts whendue, we are required to pay Fagen, Inc. a fee of $1,000,000 if we resumeconstruction of the plant through our own employees or third parties.

 

We make payments to Fagen, Inc. on a progress billing basis, based uponmonthly applications for payment submitted to us by Fagen, Inc. for all workperformed as of the date of the application.  We retain 10% of the amountsubmitted in each application for payment.  When at least 50% of the workhas been completed, we are required to pay the full amount of each applicationfor payment.  When the plant is substantially completed and Fagen, Inc.,has met the performance guarantee criteria, we will pay Fagen, Inc. all amountswe have retained less an

 

10

----

 

amountfor any incomplete items still remaining.  If we do not pay all due andunpaid amounts within five days after the due date, we will be charged interestat a rate of approximately 18% per year.

 

*DutiesUnder the Design-Build Contract*

 

Under the terms of the design-build contract, Fagen, Inc. isresponsible for the following:

 

•                  Providing all necessary design services, suchas architectural, engineering and other professional design services,consistent with applicable law and provided by licensed design professionalseither employed by Fagen, Inc. or qualified independent licensed designconsultants;

 

•                  Providing to us a warranty that the workperformed for us is of good quality, conforms to all contract and constructiondocuments, and is free of defect in materials and workmanship;

 

•                  For a period of one year after substantialcompletion, correcting any defects in materials and workmanship and commencingcorrection of defects within seven days of receipt of notice from us that thework performed was defective; and

 

•                  Indemnifying, defending and holding us, ourofficers, directors, agents and employees harmless against any claims, losses,damages, liabilities, including attorney’s fees and expenses, for any bodilyinjury, sickness, death or damage or destruction of property if such arisesfrom the negligent acts or omissions of Fagen, Inc., its consultants, agents oremployees.

 

Under the terms of the design-build contract, we are responsible forthe following:

 

•                  Providing the plant site and sitepreparation, electricity, natural gas, water, roads, railroad access, certainmaintenance power and equipment and an administration building;

 

•                  Obtaining and maintaining liability insuranceto protect us from any claim that may arise from performance of ourresponsibilities;

 

•                  Obtaining and maintaining property insurancefor the full insurable value of the plant, including professional fees,overtime premiums and all other expenses incurred to replace or repair theethanol plant; and

 

•                  Indemnifying, defending and holding Fagen,Inc., its officers, directors, agents and employees harmless against anyclaims, losses, damages, liabilities, including attorney’s fees and expenses,for any bodily injury, sickness, death or damage or destruction of property dueto 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 reasonablyadjust the time completion of the plant and the contract price if any of thefollowing occurs:

 

•                  We do not provide reasonable evidenceindicating that we have adequate funds to fulfill all our contractualobligations or do not pay amounts properly due according to the progresspayments, and we do not cure within seven days after we receive notice fromFagen, Inc. and work on the plant has stopped;

 

•                  Any acts, omissions, conditions, events orcircumstances beyond its control, if the act or omission was not caused byFagen, Inc. or anyone for whom they are responsible.  If Fagen, Inc.’s delayin performance is caused by us or those under our control, then the contractprice may be appropriately adjusted;

 

•                  The presence of any hazardous conditions atthe construction site.  Upon receiving notice of a hazardous condition, wemust immediately proceed to correct the condition.  After the condition iscorrected and our experts provide written certification that the hazardouscondition has been corrected and all necessary

 

11

----

 

governmental approvals have been obtained, Fagen, Inc. should resumework 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;

 

•                  Differing conditions at the site.  Ifconcealed physical conditions at the site materially differ from thoseindicated in the contact or from the conditions ordinarily encountered, Fagen,Inc. must provide us with prompt notice of the condition.  Fagen, Inc. maybe entitled to an adjustment in the contract time and price to the extent thatits cost or time of performance are adversely impacted by the differing sitecondition;

 

•                  Work on the plant has stopped for 60consecutive days, or more than 90 days total, because of any order from us or acourt or governmental authority, so long as such stoppage is not because of anyact or omission of Fagen, Inc. or because we failed to provide Fagen, Inc. withinformation, permits or approvals for which we will be responsible. Fagen, Inc. may terminate the design-build contract if we do not begin tocorrect the above within seven days after receipt of Fagen, Inc.’s terminationnotice.

 

We have the right to terminate the design-build contract for anyreason; but if our termination is without cause, then we are required toprovide Fagen, Inc. with 10 days prior written notice.  In addition, weare required to pay Fagen, Inc. for the following:

 

•                  All work completed and any proven loss, costor expense incurred in connection with such work;

 

•                  Reasonable costs and expenses attributable tothe termination, including demobilization costs and amounts due to settleterminated contracts with subcontractors and consultants; and

 

•                  Overhead and profit in the amount of 15% ofthe sum of the above payments.

 

There is no assurance that defects in materials and/or workmanship inthe plant will not occur.  Under the terms of the design-build contract,Fagen, Inc. warrants that the material and equipment furnished to build the plantis new, of good quality, and free from material defects in material orworkmanship at the time of delivery.  Though the design-build contractrequires Fagen, Inc. to correct all defects in material or workmanship for aperiod of one year after substantial completion of the plant, material defectsin material or workmanship may still occur.  Such defects could cause usto delay the commencement of operations of the plant, or, if such defects arediscovered after 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.

 

*Limitationof Consequential Damages and Early Completion Bonus*

 

The design-build contract provides that we may be entitled toreceive  liquidated damages in the event Fagen, Inc. fails tosubstantially complete the plant within 30 to 90 days after the scheduledsubstantial completion date.  The design-build contract provides forliquidated damages in lieu of consequential damagesfor any losses we may incursuch as loss of use, profits, business, reputation or financing..  Underthe terms of the design-build contract, the scheduled substantial completiondate is April 21, 2005.  If Fagen, Inc., fails to substantially completethe plant within 30 to 90 days from the substantial completion date, Fagen,Inc., will pay us liquidated damages for each day that substantial completionremains outstanding.  If the plant is substantially completed prior to thesubstantial completion date of April 21, 2005, we will pay Fagen, Inc., anearly performance bonus for each day that substantial completion is achievedprior to April 21, 2005.

 

*InsuranceRequirements*

 

We have obtained and must maintain liability, property and casualty andother policies of insurance during the period of construction of the plant andonce plant operations commence.   Any failure by us to maintainadequate insurance, with adequate policy limits and/or self-retention limits,may have a material adverse effect on our operations, cash flows and financialperformance.

 

12

----

 

**SiteGrading Contract**

 

On October 23, 2003, we entered into a site work grading contractwith Iverson & Son’s LLC.  Under this contract, Iverson & Son’s,LLC, will provide Phase I Civil and site work grading at our plant site for atotal contract price of $570,710.  At December 31, 2003, we hadincurred costs of $328,378 under this contract.

 

**Effectof Governmental Regulation**

 

Ethanol has important applications, primarily as a high quality octaneenhancer and an oxygenate capable of reducing air pollution and improvingautomobile performance. The ethanol industry is heavily dependent, however, onseveral economic incentives to produce ethanol, including federal ethanolsupports.

 

Ethanol sales have been favorably affected by the Clean Air Actamendments of 1990, particularly the Federal Oxygen Program which becameeffective November 1, 1992. The Federal Oxygen Program requires the saleof oxygenated motor fuels during the winter months in certain majormetropolitan areas to reduce carbon monoxide pollution. Ethanol use hasincreased due to a second Clean Air Act program, the Reformulated GasolineProgram. This program became effective January 1, 1995, and requires thesale of reformulated gasoline in nine major urban areas to reduce pollutants,including those that contribute to ground level ozone, better known as smog.Increasingly stricter EPA regulations are expected to increase the number ofmetropolitan areas deemed in non-compliance with Clean Air Standards, whichcould increase the demand for ethanol.

 

The use of ethanol as an oxygenate to blend with fuel to comply withfederal mandates also has been aided by federal tax policy. The Energy Tax Actof 1978 exempted ethanol blended gasoline from the federal gas tax as a meansof stimulating the development of a domestic ethanol industry and mitigatingthe country’s dependence on foreign oil. As amended, the federal tax exemptioncurrently allows the market price of ethanol to compete with the price ofdomestic gasoline. The exemption for a 10% ethanol blend is the equivalent ofproviding a per gallon “equalization” payment that allows blenders to pay morefor ethanol than the wholesale price of gasoline and still retain profitmargins equal to those received upon the sale of gasoline that is not blendedwith ethanol. 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 is currently considering amending the present excise taxstructure 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, the existing ethanol excise tax exemptionwould be eliminated, thereby allowing the full federal excise tax of 18.4 centsper gallon of gasoline to be collected and allocated to the highway trustfund.  This would add approximately $1.4 billion to the highway trust fundrevenue annually.  In place of the current exemption, the bill creates anew volumetric ethanol excise tax credit (VEETC) of 5.2 cents per gallon ofethanol blended.  Refiners and gasoline blenders would apply for thiscredit on the same tax form as before only it would be a credit from generalrevenue, not the highway trust fund.  Based on volume, the VEETC may allowgreater refinery flexibility in blending ethanol because the new system isapplicable to the volume of ethanol used and it eliminates the volumelimitations that are currently in place.

 

A bill (S. 791, 108th Cong.) including provisions known asthe Renewable Fuels Standard has been introduced in the United StatesSenate.  It would revise the current method in which fuel ethanol use isrequired.  The proposed legislation would determine the specific volume ofethanol to be used in gasoline on a nationwide basis.  The anticipatedvolumes would begin in the year 2004 at 2.3 billion gallons and grow at a rateof approximately 300 million gallons per year to a volume of 5 billion gallonsin 2012.  However, consideration of the bill has been postponedindefinitely.

 

The ethanol industry and our business will depend upon continuation ofthe federal ethanol supports discussed above.  These incentives havesupported a market for ethanol that might disappear without theincentives.  Alternatively, the incentives may be continued at lowerlevels than at which they currently exist.  The elimination or reductionof such federal ethanol supports would make it more costly for us to produceand sell our ethanol.

 

13

----

 

**Costsand Effects of Compliance with Environmental Laws**

 

We will be subject to extensive air, water and other environmentalregulations and we will be required to obtain a number of environmental permitsto construct and operate the plant.  In the fall of 2003, we received anair pollution construction permit, a pollutant discharge elimination systemgeneral permit, a storm water discharge permit and water withdrawalpermit.  We still need to obtain an alcohol fuel producer’s permit, whichwe anticipate receiving shortly prior to commencement of operations.  Inaddition, we will be required to complete a spill prevention control andcountermeasures plan prior to commencement of plant operations.  Weanticipate incurring costs and expenses of approximately $240,000 in complyingwith environmental laws, including the cost of obtaining permits.  Even ifwe are successful in obtaining all of the permits currently required, anyretroactive change in environmental regulations, either at the federal or statelevel, could require us to obtain additional or new permits or spendconsiderable resources on complying with such regulations.

 

We have engaged RMT, Inc., of Madison, Wisconsin to provideenvironmental consulting, engineering and analytical services in connectionwith the construction and operation of our plant.  At December 31,2003, we had paid approximately $200,000 for services under the agreement.

 

We are subject to oversight activities by the EPA. There is always arisk that the EPA may enforce certain rules and regulations differently thanWisconsin’s environmental administrators.  Wisconsin and EPA rules aresubject to change, and any such changes could result in greater regulatoryburdens on plant operations.  We could also be subject to environmental ornuisance claims from adjacent property owners or residents in the area arisingfrom possible foul smells or other air or water discharges from theplant.  Such claims may result in an adverse result in court if we aredeemed to engage in a nuisance that substantially impairs the fair use andenjoyment of real estate.

 

**Employees**

 

We currently have one full-time employee and one part-timeemployee.  In November 2003 we engaged Wave Zeal, Ltd., as anindependent contractor to provide consulting services in connection with plantconstruction and start-up operations.  Upon completion of the ethanolplant, we intend to hire approximately 34 additional full-time employees. We have entered into an employee recruiting agreement with Richard A. Johnsonof Bloomington, Minnesota.  For each employee recruited by Mr. Johnson, wewill pay a fee of 20% of the recruited employee’s first year’s salary.

 

**ITEM 2.****                            ****DESCRIPTION OF PROPERTY.**

 

The ethanol plant is being constructed on an undeveloped 115-acre sitelocated on state highway 33 and two miles east of state highway 73.  Theplant’s address is W1231 Tessman Road, Cambria, Wisconsin 53923.

 

We obtained two real estate options for potential plant sites.  Wepurchased one option from Doug and Heather Tessmann for a price of$10,000.  The Tessmann option granted us the right to purchase 115 acreswith buildings for $8,395 per acre for a total purchase price of$1,000,000.  Doug and Heather Tessmann are not affiliated with theCompany, our officers or directors.  On September 22, 2003, we gave noticeof our intent to exercise the option to purchase the 115-acre parcel.  OnOctober 16, 2003, we closed on part of the Tessmann parcel by purchasing105 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 cashpurchase price of $690,000.  We expect to close on the remaining 10 acres,including the buildings, sometime in June 2004.  We will pay thebalance of the purchase price, which is $300,000, at that closing.

 

We located the Tessmann parcel with the assistance of a buyer’s agent,RW Wisconsin Real Estate, Inc., which was paid a fee of 2% of the totalpurchase price 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 uncleof our President, Kevin M. Roche.

 

We had also purchased a real estate option on a different potentialplant site from Jung Seed Genetics for a price of $3,000.  This optiongrants us the right to purchase 59 acres at a price of $4,000 per acre for atotal purchase

 

14

----

 

price of$236,000.  The option expires on March 31, 2004 and we intend to letit expire since we have exercised the Tessmann option and plant constructionhas been started on that parcel.

 

Subsequent to the period covered by this report, we executed a mortgagein favor of AgStar Financial Services, PCA, creating a first lien on our realestate and the construction-in-process and a security interest in all personalproperty located on our property.  The mortgage and security interestsecure the construction loan of $33,024,200, which was executed simultaneous tothe mortgage.  Upon completion of construction, the construction loan of$33,024,200 will be converted into a term loan equal to the lesser of$29,024,200 or 55% of the total project cost and a revolving line of credit of$4,000,000.

 

**ITEM 3.****                            ****LEGAL PROCEEDINGS.**

 

None.

 

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

 

None.

 

**PART II**

 

**ITEM 5.****                            ****MARKET FOR MEMBERSHIP UNITS AND RELATED MEMBER MATTERS.**

 

There is no public trading market for our membership units.  AtMarch 18, 2004, there are approximately 870 holders of our units.

 

Distributions are payable at the discretion of our board of directors,subject to the provisions of the Wisconsin Limited Liability Company Act andour operating agreement.  The board has no obligation to distributeprofits, if any to members.  We have not declared or paid anydistributions on our units.  In addition, distributions are restricted bycertain loan covenants in our construction loan and revolving credit financingagreements.

 

The Securities and Exchange Commission declared our registrationstatement on Form SB-2 (SEC Registration No. 333-92188) effective on May 14,2003.  We commenced our public offering shortly thereafter.

 

The following is a breakdown of the membership units registered andsold 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 |   |
|                        |            |                                               |            |                 |            |                                                    |            |  |  |

 

----

(1)          As of March 18, 2004.

 

As of March 18, 2004, we have sold 25,810 units in the registeredoffering and have received aggregate offering proceeds of $25,810,000.  Wesold the Units without the assistance of an underwriter.  The offeringremains open and we are continuing the sale of our Units.  The offeringexpiration date is May 14, 2004.

 

On October 15, 2003, we released funds from escrow because we hadraised equity in excess of the minimum of $19,250,000 and had received awritten debt financing commitment sufficient to carry out our businessplan.  As of October 15, 2003, we had received subscriptions for23,275 Units for subscription proceeds of $23,275,000.  Upon release offunds from escrow, we issued 23,275 Units to our members.  AtDecember 31, 2003, we had sold a total of 24,325 Units for aggregateoffering proceeds of $24,325,000.  At December 31, 2003, we hadoffering expenses of $354,523, which we netted against the aggregatesubscription proceeds.  No offering expenses were paid to relatedparties.  Our net offering proceeds at December 31, 2003, are$23,970,477.

 

15

----

 

The following table describes our use of our net offering proceeds asof 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 |   |

 

----

(1) Other costs consist of organizational cost, directors’ fees, projectcoordinator fees and other general and administrative costs.  No singleexpenditure in any of the foregoing cost categories exceeded $100,000.

 

**ITEM 6.****                            ****MANAGEMENT’S DISCUSSION AND ANALYSIS.**

 

This report contains forward-looking statements that involve futureevents, our future performance and our expected future operations andactions.  In some cases you can identify forward-looking statements by theuse of words such as “may,” “will,” “should,” “anticipate,” “believe,”“expect,” “plan,” “future,” “intend,” “could,” “estimate,” “predict,” “hope,”“potential,” “continue,” or the negative of these terms or other similarexpressions.  These forward-looking statements are only our predictionsand involve numerous assumptions, risks and uncertainties.  Our actualresults or actions may differ materially from these forward-looking statementsfor many reasons, including the reasons described in this report.  We arenot under any duty to update the forward-looking statements contained in thisreport.  We cannot guarantee 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 and the documents that we referencein this report and have filed as exhibits, completely and with theunderstanding that our actual future results may be materially different fromwhat we currently expect.  We qualify all of our forward-lookingstatements by these cautionary statements.

 

**Applicationof Critical Accounting Policies**

 

Management uses estimates and assumptions in preparing our financialstatements, in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets andliabilities, the disclosure of contingent assets and liabilities, and thereported revenues and expenses.

 

**Overview**

 

United Wisconsin Grain Producers, LLC was formed as a Wisconsin limitedliability company on November 2, 2001, for the purpose of constructing andoperating a 40 million gallon per year ethanol plant near Friesland,Wisconsin.  We expect that the project will cost approximately $59.3million.

 

We raised equity by a public offering registered with the Securitiesand Exchange Commission on Form SB-2, which was declared effective on May 14,2003.  The offering is for a minimum of 19,250 units and a maximum of27,500 units at a purchase price of $1,000 per unit.  Our equity drivebegan on June 1, 2003. On October 15, 2003, we released funds fromescrow based upon deposits of subscription proceeds in excess of $19,250,000and our receipt of a written debt financing commitment consisting of a termloan of $32,462,500 from AgStar Financial Services, PCA.

 

At December 31, 2003, we had sold 24,325 Units for aggregateoffering proceeds of $24,325,000.  Subsequent to December 31, 2003,we have sold an additional 1,485 Units for additional offering proceeds of$1,485,000.  The offering remains open and we are continuing the sale ofour Units.  If we are successful in selling the maximum number of Units,which is 27,500, we will terminate 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 we will be able to sell the maximumnumber of Units.

 

16

----

 

We expect that it will take approximately 14 to 16 months from the datewe gave Fagen, Inc., notice to proceed which occurred in December 2003, toconstruct the ethanol plant and commence start-up operations.   Ouranticipated date of substantial completion is currently April 2005.

 

**Planof Operations for the Next 12 Months**

 

We expect to spend the next 12 months constructing the ethanolplant and commencing start-up operations. We expect to have sufficient cashavailable to cover our costs over the next 12 months, including construction,staffing, office, audit, legal, compliance costs and start up working capitalcosts. The following is our estimate of our costs and expenditures for the next12 months. These estimates are based upon our design-builder, primesubcontractor and financial advisor’s experience with other businesses. It is only an estimate and our actual expenses could be much higher due to avariety of factors described in our Form SB-2 registration statement under thesection entitled “Risk Factors.”

 
| 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 the plant to be $59,325,000,which includes $45,575,000 to build the plant and $13,750,000 for other projectdevelopment costs including land, site development, utilities, start-up costs,capitalized fees and interest, inventories and working capital.  The totalproject 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 recuperative thermaloxidizer rather than a standard thermal oxidizer.  The recuperativethermal oxidizer will allow us to operate at maximum capacity while continuingto satisfy certain emissions standards.

 

We estimate that we will need approximately $45,575,000 to constructthe plant and a total of approximately $59,325,000 to cover all capitalexpenditures necessary to complete the project, make the plant operational andproduce revenue.  Based upon offering proceeds as of March 18, 2004,of $25,810,000, the senior credit facility of $33,024,200 and grant financingof $800,000, we will have approximately $59,634,200 of capital available, whichmeans we expect to have sufficient cash on hand to cover construction andrelated start-up costs necessary to make the plant operational.  Ouroffering remains open and we are continuing the sale of our Units, which meanswe may have additional capital available from these Unit sales.  There isno assurance, however, that we will be able to sell additional Units.

 

In October 2003 we began site grading and dirt work at the plantsite.  Construction began in November 2003.  As of the date ofthis report, construction of the facility is progressing according toschedule.  Phase I of the construction process consisting of site grading,concrete and dirt work have been completed.  Phase II of the constructionprocess has been started.  Phase II work includes installation of theutilities infrastructure, including the water distribution system.  Weanticipate that construction will continue on schedule barring anyunforeseen delays resulting from weather conditions or other events.

 

17

----

 

We are discussing the terms and conditions of an ethanol marketingagreement with a potential ethanol re-distributor.  We anticipate enteringinto an ethanol marketing agreement prior to substantial completion ofconstruction of the ethanol plant.  We are also discussing the terms andconditions of a distillers grains marketing agreement with potential distillersgrains marketing firms.  We anticipate entering into a distillers grainsmarketing agreement prior to substantial completion of plant construction.

 

We expect to identify a risk management services firm and beginnegotiating a risk management services agreement that will be executed prior tosubstantial completion of plant construction.  The purpose of the riskmanagement services agreement will be to achieve price protection for our cornand natural gas supplies.

 

**Employees**

 

Upon completion of the ethanol plant, we intend to hire approximately34 full-time employees. Approximately eleven of our employees will be involvedprimarily in management and administration and the remainder will be involvedprimarily in plant operations.

 

The following table represents some of the anticipated positions withinthe plant and the minimum number of individuals we intend to employ for eachposition:

 
| **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**         |       |

 

**Liquidityand Capital Resources**

 

As of December 31, 2003, we had cash and cash equivalents of$20,150,071 and total assets of $25,546,721.  As of October 15, 2003,when we issued units in the offering, we netted deferred offering costs of$354,523 against the subscription proceeds received.  We raised a total of$602,500 in seed capital, which we have used to fund our organization andoperation to date.  As of December 31, 2003, we had currentliabilities of $1,834,004, which consists primarily of our constructionaccounts payable.  Since our inception through December 31, 2003, wehave an accumulated deficit of $803,964.  Total members’ equity as ofDecember 31, 2003 was $23,710,419.  Since our inception, we havegenerated no revenue from operations.

 

Subsequent to the period covered by this report, we entered into asenior credit facility consisting of a $33,024,200 single constructionloan with AgStar Financial Services, PCA.  We had previously received adebt financing commitment from AgStar Financial Services, PCA for a term loanof $32,462,500.  Subsequent to our receipt of the debt financingcommitment, we negotiated the final terms of the senior credit facility andexecuted debt financing agreements for the single construction loan of$33,024,200.  The credit facility is secured by substantially all of ourassets. During construction, which is expected to be for a period of up to 16months, we will make interest only payments on the principal balance of$33,024,200 at an interest rate equal to the one-month LIBOR (the LondonInterbank Offered Rate) plus 3.75%.  This interest rate may be adjusteddownward depending on the level of owners’ equity as reported in our monthlyfinancial statements.  If owners’ equity is between 50% and 54.99%, theinterest rate will be at the monthly LIBOR plus 3.25%.  If owners’ equityexceeds 55%, the interest rate will be equal to the monthly LIBOR plus 2.75%.

 

18

----

 

When the ethanol plant is complete and operating, the construction loanwill be converted into two loans.  The first will be a term loan equal tothe lesser of $29,024,200 or 55% of the total project cost. The second will bea $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 onthe converted term loan will be paid in monthly installments includingprincipal and interest.  Interest on the converted term loan will be at arate equal to the monthly LIBOR plus 3.75%.  This interest rate may beadjusted downward in exactly the manner as the interest rate on ourconstruction loan, depending on our level of owners’ equity as reported in ourmonthly financial statements.  Interest on the revolving loan will accrueat a rate equal to the monthly LIBOR plus 3.75%.  However, this interestrate may be adjusted downward in exactly the same manner as the interest rateon our construction loan, depending on our level of owners’ equity.

 

The construction loan, converted term loan and line of creditagreements contain restrictions and financial covenants to which the Companywill be subject during the term of the agreements.  If the project suffersdelays, we may not be able to timely repay the loan.  If interest ratesincrease, we will have higher interest payments, which could adversely affectour business.

 

On October 29, 2003, we received a Community Development BlockGrant of $271,000 to be used for infrastructure improvements.  Subsequentto the period covered by this report, we received a Value-Added AgriculturalProduct Market Development Grant of $450,000 from the USDA, which is a matchinggrant to be used for start-up costs.  We also received, subsequent to theperiod covered by this report, a Transportation Economic Assistance grant of$160,000 to be used for transportation improvements.

 

We will be applying for a grant from the USDA’s Commodity CreditCorporation. Under the grant program, the Commodity Credit Corporation willreimburse eligible ethanol producers of less than 65 million gallons ofbioenergy one bushel of corn for every two and one-half bushels of corn usedfor the increased production of ethanol. No eligible producer may receive morethan $7.5 million under the program. Because we expect to be an eligibleproducer and to annually utilize 15 million bushels of corn in theincreased production of ethanol, we expect to potentially receive the maximumaward of $7.5 million. However, the Commodity Credit Corporation may awardonly $150 million annually fiscal years 2003 through 2006, and any awardwe received may be reduced based upon the volume of applications from othereligible producers.   In addition, payments under the program in anyone fiscal year may be less if Congress does not fully fund the program forthat fiscal year (funding for the program is subject to an annual appropriation). We expect to be eligible to receive an award under the program only once duringthe life of our project.  However, to the extent that our start-up periodcovers more than one fiscal year of the U.S. government, we may apply twice andreceive more than one award under the program.  The Commodity CreditCorporation Bioenergy Program is scheduled to expire on September 30,2006.  The grants available under the CCC program may not continue beyondtheir scheduled expiration date or if they do continue, the grants may not beat the same level.  If our ethanol plant is not operational by theexpiration of the CCC program or has not had substantial operations, we may notbe eligible for the grants or may receive a reduced amount.

 

The following schedule sets forth our estimated sources as of thedate of this report.    This schedule could change in thefuture depending on whether 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 execution of the written debt financing agreements for the seniorcredit facility described above, and in accordance with the terms of ourconsulting agreement with Value Add Ventures, LLC, we paid Value Add Ventures,LLC, a one-time bonus of $75,000.  Value Add Ventures, LLC, is notaffiliated with us, our directors or officers.

 

19

----

 

We previously obtained an operating line of credit in the amount of$320,000, which was guaranteed by members of our board of directors and theirspouses.  Borrowings against this line accrue interest at the floatingone-month LIBOR rate plus 3%.  The line expires in May 2004.  AtDecember 31, 2003, there were no outstanding borrowings against this lineof credit.

 

**Off-BalanceSheet Arrangements**

 

We do not have any off-balance sheet arrangements.  The Companyhas purchase commitments as described in Note 10 to our Financial Statements.

 

20

----

 

**ITEM 7.****                            ****FINANCIAL STATEMENTS.**

 

REPORT OF INDEPENDENT AUDITORS

 

Board ofDirectors

UnitedWisconsin Grain Producers, LLC

Friesland,Wisconsin

 

We haveaudited the accompanying balance sheets of United Wisconsin Grain Producers,LLC (a development stage company), as of December 31, 2003 and 2002, andthe related statements of operations, changes in members’ equity, and cashflows for the years ended December 31, 2003 and 2002, and from inception(November 2, 2001) to December 31, 2003. These financial statementsare the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with auditing standards generally acceptedin the United States of America. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of United Wisconsin Grain Producers,LLC,  (a development stage company) as of December 31, 2003 and 2002,and the results of its operations and its cash flows for the years endedDecember 31, 2003 and 2002 and from inception to December 31, 2003 inconformity with accounting principles generally accepted in the United Statesof America.

 

Asdiscussed in Note 2 to the financial statements, certain errors resulting in anoverstatement of construction in progress and construction accounts payablewere discovered by management of the Company during the current year.  Accordingly, the 2003 financial statementshave been revised to correct the error.

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

 

 

Minneapolis,Minnesota

February 18, 2004, except Note 2 as towhich thedate is April 24, 2004

 

21

----

 

**UNITED WISCONSIN GRAIN PRODUCERS, LLC**(A Development StageCompany)

 

Balance Sheets

 
| **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            |       | 4,568,043                  |       | —                     |       |
| Total property and equipment       |       | 5,294,662                  |       | 1,240                      |       |
| Less accumulated depreciation      |       | (1,113                     | )          | (41                        | )          |
| Net property and equipment         |       | 5,293,549                  |       | 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**                   |       | $                          | 25,546,721 |                       | $          | 351,237 |   |

 

Notes toFinancial Statements are an integral part of this Statement.

 

22

----

 

**UNITED WISCONSIN GRAIN PRODUCERS, LLC**(A Development StageCompany)

 

Balance Sheets

 
| **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                                        |       | 1,655,911                   |           | —                      |       |
| Accrued liabilities                                                  |       | 9,209                       |           | —                      |       |
| Other payables                                                       |       | 15,000                      |           | 15,000                      |       |
| Total current liabilities                                            |       | 1,834,004                   |           | 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**                      |       | **$**                       | **25,546,721** | ** **                  | **$**      | **351,237** |   |

 

23

----

 

**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 | ) |

 

24

----

 

**UNITED WISCONSIN GRAIN PRODUCERS, LLC**(A Development StageCompany)

 

Statement of Changes 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 toFinancial Statements are an integral part of this Statement.

 

25

----

 

**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 |   |

 

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

 

26

----

 
| ** **                                                  | ** ** | **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                |       | $                                       | 1,655,911  |                                    | $          | —                                                                  |       | $ | 1,655,911 |   |
|                                                        |       |                                    |       |                                    |       |                                                                    |       |
| Debt issuance costs in accounts payable                     |       | $                                       | 75,000     |                                    | $          | —                                                                  |       | $ | 75,000 |   |
|                                                        |       |                                    |       |                                    |       |                                                                    |       |
| Deposits applied for purchased land                         |       | $                                       | 10,000     |                                    | $          | —                                                                  |       | $ | 10,000 |   |

 

27

----

 

**UNITED WISCONSIN GRAIN PRODUCERS, LLC**(A Development StageCompany)

 

Notes to Financial Statements

 

December 31, 2003 and 2002

 

**1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

*Natureof Business*

 

TheCompany was organized to pool investors, some of whom intend to provide a cornsupply, for a 40 million gallon ethanol plant to be located near the town ofFriesland in the township of Randolph, Wisconsin, with distribution to upperMidwest states. In addition, the Company intends to produce and sell distillersdried grains and carbon dioxide as co-products of ethanol production.  TheCompany began construction of its ethanol plant in November 2003.  Asof December 31, 2003, the Company is in the development stage with itsefforts principally devoted to construction activities.

 

*FiscalReporting Period*

 

TheCompany has adopted a fiscal year ending December 31 for reportingfinancial operations.

 

*AccountingEstimates*

 

Managementuses estimates and assumptions in preparing these financial statements inaccordance with generally accepted accounting 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 differ from those estimates.

 

In 2002,significant estimates included the deferral of expenditures for landdevelopment and offering costs which were dependent upon successful financingand project development, as discussed below.  It was at least reasonablypossible that these estimates could change in the near term.  There are nosignificant estimates in the 2003 financial statements.

 

*Cashand Cash Equivalents*

 

At timesthroughout the year, the Company’s cash balances may exceed amounts insured bythe Federal Deposit Insurance Corporation (FDIC).  The Company considersall highly liquid investments with maturity of three months or less to be cashequivalent.  At December 31, 2003, cash and cash equivalents of$18,539,195 were not insured by the FDIC.  At December 31, 2002, allcash and cash equivalents were insured by the FDIC.

 

*Property,Plant and Equipment*

 

Property,plant and equipment is stated at the lower of cost or estimated fairvalue.  Depreciation is provided by use of the straight-line method overthe estimated useful lives of 5 years for office equipment.  Depreciationexpense for the years ended December 31, 2003 and 2002 was $1,072 and $41,respectively.  Costs relating to the construction of the Company’s ethanolplant are capitalized and included in construction in progress.  Uponplacing the ethanol plant in service, the Company will begin to depreciated thecosts related to the construction of the ethanol plant over their estimateduseful lives.  The present value of the capital lease is classified aslong-term debt and the related asset is included in property, plant, andequipment.  Amortization of equipment under capital lease is included indepreciation expense.  Maintenance and repairs are expensed as incurred;major improvements and betterments are capitalized.

 

28

----

 

*FairValue of Financial Instruments*

 

The fairvalue of the Company’s cash and cash equivalents approximates its carryingvalue.  It is not currently practicable to estimate the fair value oflong-term debt since this agreement contains unique terms, conditions, andrestrictions, which were negotiated at arm’s length.

 

*Depositson Land*

 

Prior to2003, the Company made deposits on land options for 59 and 115 acres for itsfacility. Upon the purchase of these parcels, the deposits will be applied tothe payment of $236,000 and $1,000,000, respectively.  These costs havebeen stated at the lower of cost or estimated fair value.  DuringSeptember 30, 2003, the Company exercised its option to purchase the 115acre parcel.  At December 31, 2003, the total of all deposits on landis $3,000 and relates solely to the 59 acre land option, which expires onMarch 31, 2004.  As of December 31, 2003, it has not beenexercised.  If this option expires or management does not intend toexecute the option, the deposit will be written off when such a determinationis made.

 

*DeferredOffering Costs*

 

TheCompany defers the costs incurred to raise equity financing until thatfinancing occurs.  At such time that the issuance of new equity unitsoccurs, these costs are netted against the proceeds received; or if thefinancing does not occur, they are expensed.  The initial issuance of newequity occurred October 15, 2003 and total costs of $354,523 weretransferred to cost of raising capital and charged against members’ equity.

 

*Debtissuance costs*

 

Costsrelating to obtaining the Company’s debt financing have been capitalized asincurred.  Upon the conversion of the Company’s construction line ofcredit to a term note, the Company will begin to amortize the debt issuancecosts using the effective interest rate method.

 

*Grants*

 

TheCompany will recognize grant income as other income for reimbursement ofexpenses incurred upon complying with the conditions of the grant.  Forreimbursements of capital expenditures, the grants are recognized as areduction of the basis of the asset upon complying with the conditions of thegrant.

 

*IncomeTaxes*

 

TheCompany is treated as a partnership for federal and state income tax purposesand is generally not subject to either federal or state income taxes. Instead, its earnings and losses are included in the income tax returns of themembers.  Therefore, no provision or liability for federal or state incometaxes has been included in these financial statements.

 

*RecentlyIssued Accounting Pronouncements*

 

TheFinancial Accounting Standards Board (FASB) has issued Statement No. 149,“Amendment of Statement 133 on Derivative Instruments and HedgingActivities.”  The Statement amends and clarifies accounting for derivativeinstruments, including certain derivative instruments embedded in othercontracts, and for hedging activities under Statement 133.

 

29

----

 

TheFinancial Accounting Standards Board (FASB) has issued Statement No. 150,“Accounting for Certain Financial Instruments with Characteristics of bothLiabilities and Equity*.*”  The Statement establishes standards forhow an issuer classifies and measures certain financial instruments.

 

Managementdoes not expect the implementation of these pronouncements to have asignificant effect on the Company’s financial statements.

 

*Reclassification*

 

Certainamounts in the Statement of Operations for 2002 and inception to date have beenreclassified to conform to 2003 classifications.  These reclassificationshad no effect on net loss as previously reported.

 

**2.  CORRECTION OF ERROR**

 

On April 24,2004, certain errors resulting in an overstatement of construction in progessand construction accounts payable were discovered by management.  The error had no effect on members’ equity,net loss, net loss per unit or cash flows as previously reported.  Accordingly, the 2003 financial statementshave been restated to correct the error.

 

**3. DEVELOPMENT STAGE ENTERPRISE**

 

TheCompany was formed on November 2, 2001 to have a perpetual life.  TheCompany was initially capitalized by contributions from its founding membersand later by additional seed capital investors. The ten founders contributed anaggregate of $117,500 for 235 units.  Forty-six members, including nine ofthe founders, contributed an additional aggregate of $485,000 for 485 unitsthat were issued in January 2002.

 

EffectiveApril 1, 2002, the 720 units purchased by the founding members and seedcapital investors were split on a two-for-one basis resulting in 1,440 sharesoutstanding.

 

EffectiveOctober 16, 2002, the Company redeemed a total of 160 units from two boardmembers for $35,000, of which $20,000 has been paid by the Company.  Theremaining $15,000, which is included in other payables, will be paid when theCompany obtains all debt financing for the project.  In the event of theCompany’s liquidation or dissolution prior to obtaining the debt financing forthe project, this payable will become subordinate to the rights of theCompany’s members.

 

InOctober through December 2003, the Company accepted subscriptionagreements from its equity offering drive of 24,325 units at $1,000 perunit.  At December 31, 2003 and 2002, the Company had 25,605 and1,280 units outstanding, respectively.

 

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

 

**4. BANK FINANCING**

 

InSeptember 2003, the Company executed a revolving bank line ofcredit.  The new agreement permits the Company to borrow up to $320,000 atthe floating one-month LIBOR rate of interest plus 3% and expires May2004.  The line is secured by certain assets of the Company.  Inaddition, the line is guaranteed by members of the Board of Directors of theCompany and their spouses.  As of December 31, 2003, there is nooutstanding balance.

 

30

----

 

OnOctober 15, 2003, the Company received a non-binding senior loancommitment from a financial institution.  This commitment is for a singleconstruction loan for $32,462,500 and converts, within sixty days post constructionupon certification of completion and attainment of the engineer’s productionguarantee, into two loans with the first loan a $4 million revolving loan andthe second with a $28,462,500 term loan.  The term of the loans is fiveyears with a ten-year amortization.  The loan commitment offers a variableand fixed interest rate option.  The variable interest rate option has avariable base rate at the thirty-day LIBOR plus 375 basis points.  Theconstruction period is

 

16 monthsfrom loan closing not to exceed 60 days from initial plant start-up.  Thefixed rate quote option is subject to change weekly and is available at theconversion of the construction loan to the term loan.  The final term notecan be segmented between a fixed portion and a variable portion.

 

The loanfees consist of underwriting fees, participation fee, and annual facilityfee.  The underwriting fees are $100,000 of which $20,000 is due and waspaid upon acceptance of the term sheet and $80,000 is due at loanclosing.  There is a 75 basis point participation fee on the entire creditfacility due at loan closing.  This fee will be shared pro rata with thesenior 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 ispaid in its entirety, prepayment penalties of 3%, 2% and 1% will apply in thefirst, second and third year, respectively.

 

Theseloans are subject to protective covenants requiring the Company to maintainvarious financial ratios, are secured by all business assets, and requireadditional loan payments based on excess cash flow.  These loans would besecured by substantially all the Company’s assets.  The Company closed onthese loans in February 2004.

 

**5. LONG TERM DEBT**

 

InApril 2003, the Company entered into a capital lease agreement for officeequipment for $5,631 with accumulated depreciation at December 31, 2003 of$824.  The lease calls for thirty-six monthly payments of $160 includinginterest 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      |   |

 

**6. MEMBERS’ EQUITY**

 

Asspecified in the Company’s operating agreement, the Company will have one classof membership units. The Company is authorized to issue up to 28,000 membershipunits.

 

TheCompany prepared and filed, on Form SB-2, a Registration Statement with theSecurities and Exchange Commission (SEC).  The Offering is for up to27,500 membership units at $1,000 per unit.  As of May 14, 2003, theRegistration Statement was declared effective.  In October 2003, theCompany had raised the minimum of $19,250,000 through the Offering as discussedin Note 3, obtained and accepted a written debt financing commitment through alender as discussed in Note 3, and, as a result, accepted subscriptions for23,275 units which were being held in escrow.  At December 31, 2003,the Offering is open, and the Company is accepting subscriptions for units asit receives the required subscription proceeds from the investor.  If theOffering is highly

 

31

----

 

effective,the Company will have to obtain the approval of its members to issue units inexcess of 28,000 units the Company is authorized to issue.

 

Incomeand losses are allocated to all members based upon their respective percentageunits held.

 

**7. RELATED PARTY TRANSACTIONS**

 

ThroughDecember 31, 2003, the Company had incurred $19,375 in project coordinatorfees to three current members and one former member.  At December 31,2002, $8,375 of these costs were included in accounts payable to three currentmembers and one former member.  At December 31, 2003, there were norelated accounts payable balance relating to these costs.

 

ThroughDecember 31, 2003, the Company has also incurred $91,806 in director feesand related expense, of which $29,401 is all included in accounts payable atDecember 31, 2003 to eight members.  At December 31, 2002, therewere no related party accounts payable balances relating to these costs.

 

**8. GRANTS**

 

InOctober 2003, the Wisconsin Department of Commerce approved a grant for$271,000 in funds to reimburse the Company for infrastructure costs.  AtDecember 31, 2003, the Company had not incurred any costs associated withthis grant.

 

InJanuary 2004, the Company was approved for a matching grant from theUnited States Department of Agriculture for $450,000.

 

InFebruary 2004, the Company was approved for a matching TransportationEconomic Assistance grant from the Wisconsin Department of Transportation for$160,000.

 

**9. INCOME TAXES**

 

Thedifferences between financial statement basis and tax basis of assets are asfollows at December 31:

 
| ** **                                         | ** ** | **2003** | ** ** | **2002** | ** ** |
|----------------------------------------------------|------------|----------|------------|----------|------------|
| Financial statement basis of  total assets         |       | $        | 25,546,721 |     | $          | 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          |       | $        | 26,510,035 |     | $          | 578,642 |   |

 

Therewere no differences between the financial statement basis and tax basis of theCompany’s liabilities.

 

**10. COMMITMENTS AND CONTINGENCIES**

 

TheCompany has revised it estimate of total costs of the project from $59,050,000to $59,325,000.  The Company anticipates funding the development of theethanol plant by using approximately $800,000 of grants, the proceeds it raisesthrough the close of the Offering, and utilizing debt financing for theremainder of the costs.

 

32

----

 

InFebruary 2002, the Company executed a master environmental servicesagreement with an organization that will provide environmental consulting,engineering, and analytical services.  The Company will submit workauthorization requests on a project-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.

 

InMarch 2002, the Company executed a contract with a railroad engineeringfirm in order to provide a conceptual, schematic railroad layout for theirplant.  The estimated commitment for railroad engineering is approximately$12,500.  The actual amount that the Company incurred was $11,530.

 

InApril 2002, the Company executed a consulting agreement with a firm thatis engaged to assist the Company in its equity marketing efforts and securingdebt financing.  The Company paid the consulting firm a maximum of $3,000per month, until the Company was legally authorized to sell its member units,at which time the fees increased to 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, the Company has incurred costs of$129,222 relating to this agreement, of which $75,000 is included in accountspayable which constitutes a significant portion (55%) of the accounts payablebalance.

 

InNovember 2002, the Company executed a contract with an energy managementorganization in order to provide pipeline consulting services.  Theestimated commitment for this agreement is approximately $24,000.  As ofDecember 31, 2003 and 2002, the Company has incurred $8,000 and $2,000,respectively of these costs.

 

InMarch 2003, the Company executed a contract with an insurance consultingfirm.  The estimated commitment for this agreement is $9,000.  As ofDecember 31, 2003, the Company has incurred $9,000 of these costs.

 

TheCompany entered an agreement in March 2002, with a railroad engineeringfirm to complete a Preliminary Rail Design and the required documentationcovering a Transportation Economic Assistance grant. The TEA grant may fund upto fifty percent of the project costs relating to transportation improvements.The estimated commitment for this agreement is approximately $64,400.  Asof December 31, 2003, the Company has incurred $29,915 of thesecosts.  This grant was awarded to the Company as discussed in Note 8.

 

InJanuary 2003, subsequently amended through July 2003, the Companyexecuted a consulting agreement with a firm that is engaged to assist theCompany in performing a Preliminary Road Design and assist with a CommunityDevelopment Block Grant Application.  The estimated commitment for thisagreement is $20,950.  As of December 31, 2003, the Company hadincurred $20,987 of these costs.  This grant was awarded to the Company asdiscussed in Note 8.

 

InJuly 2003, the Company signed an agreement with an employee recruitmentfirm.  The Company will pay a fee based on a percentage of the first yearof the employees’ salary.

 

InSeptember 2003, the Company entered into an agreement with an architectfirm to design an office facility.  The Company will pay a total of $8,891for these services.  Optional services under the agreement are plumbingdesign, HVAC design and electrical design and could total an additional $6,900in services.  The Company has incurred $10,331 in costs under thisagreement.

 

TheCompany gave a notice of intent to exercise the option to purchase the 115acres on September 22, 2003.  The closing will be done in twoseparate transactions. The real estate parcel excluding the existing buildingswas closed

 

33

----

 

onOctober 16, 2003 for $700,000.  The Company paid $690,000 in cash andapplied a $10,000 deposit at the closing.  The ten acres with the existingbuildings will be closed on between June 4, 2004 and June 30, 2004for $300,000.

 

InOctober 2003, the Company entered into an agreement with an electriccooperative to provide electrical service.  The Company is required tomake a non-refundable payment in aid of construction for the facilities theelectrical cooperative will install for the benefit of the Company.  Theamount of this aid of construction shall be $253,750, unless there are changesin the scope of the facilities and the amount may be adjustedaccordingly.  As of December 31, 2003, the Company has made an aid ofconstruction payment of $60,000.

 

InOctober 2003, the Company entered into an agreement with a contractor forwork site grading.  Work site grade work began in October 2003. The total amount to be paid for the work should approximate $570,710.  AtDecember 31, 2003, $328,378 of cost has been incurred and is included inconstruction in process.

 

OnOctober 8, 2003, the Company entered into an agreement with a relatedparty, Fagen, Inc., to perform all design and construction services, provideall material, equipment, tools and labor, necessary to build a 40 milliongallon dry grind ethanol plant for $45,575,000.  The design-build contractprovides that the Company may be entitled to receive liquidated damages in theevent Fagen, Inc. fails to substantially complete the plant within 30 to 90days after the scheduled completion date.  These liquidated damages are inlieu of consequential damages for any losses we may incur, such as loss of use,profits, business, reputation, or financing.  If Fagen, Inc. does notcomplete the plant within specified dates, they will pay the Company for eachday that substantial completion remains outstanding.  If the plant issubstantially completed 30 to 90 days prior to substantial completion date, theCompany will pay Fagen, Inc. an early performance bonus for each day thatsubstantial completion is achieved prior to specified date.  If thecontract 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$4,017,375 in costs related to this contract and $1,317,375 is included inconstruction accounts payable.

 

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

 

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

 

InNovember 2003, the Company entered into an agreement for consultingservices from November 17, 2003 to February 17, 2004.  Fees areto be $500 per day with a minimum of 18 days and a maximum of 22 days permonth.  As of December 31, 2003, the Company has incurred and paid$12,675 of these costs.

 

InNovember 2003, the Company entered into an agreement to construct a welland pump.  The estimated cost of the project is $42,430.  The projectwas started and completed in January 2004.

 

34

----

 

**ITEM8.****                            ****CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURES.**

 

Boulay, Heutmaker, Zibell & Co., P.L.L.P. has been our independentauditor since the Company’s inception and is the Company’s independent auditorat the present time.  The Company has had no disagreements with itsauditors.

 

**ITEM 8A.****                   ****CONTROLS AND PROCEDURES.**

 

Our management, including our President (the principal executiveofficer), Kevin M. Roche, and our Treasurer (the principal financial officer),Robert J. Miller, have reviewed and evaluated the effectiveness of ourdisclosure controls and procedures as of the end of the period covered by thisreport.  Based upon this review and evaluation, these officers believethat our disclosure controls and procedures are effective in ensuring thatmaterial information related to us is recorded, processed, summarized andreported within the time periods required by the forms and rules of theSecurities and Exchange Commission.

 

Our management, including our principal executive officer and principalfinancial officer, have reviewed and evaluated any changes in our internalcontrol over financial reporting that occurred as of the end of the periodcovered by this report and there has been no change that has materiallyaffected or is reasonably likely to materially affect our internal control overfinancial reporting.

 

**PART III**

 

**ITEM 9.****                             DIRECTORS,EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES.**

 

**Identificationof Directors, Executive Officers and Significant Employees**

 

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

 

*Kevin M. Roche, Chairman,President and Director – Age 36*

 

Mr.Roche has served as Chairman, President and a director on the board of theCompany since its inception.  For thepast five years, Mr. Roche has operated a 4,000 acre corn, soybean and wheatfarming operation in partnership with his father and brother.  He also owns and operates Roche Farms, Inc.,which runs a 1,200 head cattle feeding operation.

 

Mr. Roche currently serves as the Company’s Chairman andPresident.  Mr. Roche is anticipated to continue serving as a director andin the offices of Chairman and President until the first annual members meetingfollowing substantial completion of the plant and until a successor is electedand qualified.

 

*William R. Herrmann, Vice Chairman, Vice President and Director – Age61*

 

Mr. Herrmann has served as Vice Chairman and Vice President sinceAugust 29, 2002 and as a director on the board of the Company since itsinception.  For the past five years, Mr. Herrmann has operated a 1,500acre crop farming enterprise.

 

Mr. Herrmann currently serves as the Company’s Vice Chairman and VicePresident.  Mr. Herrmann is anticipated to continue serving as a directorand in the offices of Vice Chairman and Vice President until the first annualmembers meeting following substantial completion of the plant and until asuccessor is elected and qualified.

 

*Robert Lange, Secretary and Director – Age 53*

 

Mr. Lange has served as Secretary since August 29, 2002 and as adirector on the board of the Company since its inception.  For the pastfive years, Mr. Lange has operated a cow/calf operation.  Prior to 2001,Mr. Lange operated a 1,500 head cattle feedlot and a 1,800 corn, soybean andwheat farm.

 

35

----

 

Mr. Lange currently serves as the Company’s Secretary.  Mr. Langeis anticipated to continue serving as a director and in the office of Secretaryuntil the first annual members meeting following substantial completion of theplant and until a successor is elected and qualified.

 

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

 

Mr. Miller has served as Treasurer and a director on the board of theCompany since its inception.  For the past five years, Mr. Miller hasoperated a 3,000 acre farming enterprise.

 

Mr. Miller currently serves as the Company’s Treasurer.  Mr.Miller is anticipated to continue serving as a director and in the office ofTreasurer until the first annual members meeting following substantialcompletion of the plant and until a successor is elected and qualified.

 

*Carl T. Benck, Director – Age 43*

 

Mr. Benck has served as a director on the board of the Company sinceits inception.  For the past five years, Mr. Benck has operated a 1,700corn, soybean and wheat farm.

 

Mr. Benck is anticipated to continue serving as a director until thefirst annual members meeting following substantial completion of the plant anduntil a successor is elected and qualified.

 

*Jerry H. Franz, Director – Age 69*

 

Mr. Franz has served as a director on the board of the Company sinceits inception.  For the past five years, Mr. Franz has operated a FranzFamily Farms, Inc., which runs a 1,800 acre corn, soybean and wheat farm.

 

Mr. Franz is anticipated to continue serving as a director until thefirst annual members meeting following substantial completion of the plant anduntil a successor is elected and qualified.

 

*Cal Dalton, Director – Age 46*

 

Mr. Dalton has served as a director on the board of the Company sinceits inception.  For the past five years, Mr. Dalton has operated a 2,100acre corn, soybean, wheat and hay farm.

 

Mr. Dalton is anticipated to continue serving as a director until thefirst annual members meeting following substantial completion of the plant anduntil a successor is elected and qualified.

 

*Berwyn G. Westra, Director – Age 58*

 

Mr. Westra has served as a director on the board of the Company sinceits inception.  For the past five years, Mr. Westra has been an accountantwith the firm of Westra, Tillema & O’Connor, CPAs, L.L.C., which he foundedin 1987.

 

Mr. Westra is anticipated to continue serving as a director until thefirst annual members meeting following substantial completion of the plant anduntil a successor is elected and qualified.

 

*Lawrence Lagowski, Director – Age 51*

 

Mr. Lagowski has served as a director on the board of the Company sinceOctober 28, 2003 when he was appointed by the current board of directorsto fill a vacant board seat.  For the past five years, Mr. Lagowski hasserved as Chief Financial Officer of Indeck Energy Services, Inc.

 

Mr. Lagowski is anticipated to continue serving as a director until thefirst annual members meeting following substantial completion of the plant anduntil a successor is elected and qualified.

 

36

----

 

*Wayne Mitchell, Director – Age 48*

 

Mr. Mitchell has served as a director on the board of the Company sinceOctober 28, 2003 when he was appointed by the current board of directorsto fill a vacant board seat.  Mr. Mitchell is currently the Senior VicePresident, Technology and Business Development for Fagen, Inc., and has beenemployed by Fagen, Inc., since June 2000.  Prior to joining Fagen,Inc., he served as Process Team Leader for Reilly Industries, Inc., where hedirected multi-disciplinary teams engaged in chemical process research and development. Mr. Mitchell serves as a director for two other publicly reportingcompanies.  He is a director on the boards of directors of Husker Ag, LLC,an ethanol plant in Plainview, Nebraska and Badger State Ethanol, LLC, anethanol plant in Monroe, Wisconsin.

 

Mr. Mitchell is anticipated to continue serving as a director until thefirst annual members meeting following substantial completion of the plant anduntil a successor is elected and qualified.

 

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

 

**AuditCommittee Financial Expert**

 

The Board of Directors has determined that we have at least one auditcommittee financial expert serving on our audit committee.  Berwyn G.Westra is our audit committee financial expert.  He is independent asdefined by the NASDAQ rules.

 

**Adoptionof Code of Ethics**

 

Our Board of Directors has adopted a code of ethics that applies to ourPresident and principal executive officer, Kevin M. Roche, our Vice-President,William R. Herrmann, our Treasurer and principal financial officer, Robert J.Miller, and our Secretary, Robert Lange.  Each of these individuals signedan acknowledgment of his receipt of our code of ethics.  We are filing acopy of our code of ethics with the Securities and Exchange Commission byincluding the code of ethics as Exhibit 14.1 to this report.

 

**Identificationof Audit Committee**

 

The Company has an audit committee.  The members of the auditcommittee are the following directors: Berwyn G. Westra, Robert J. Miller andLawrence Lagowski.

 

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

 

In calendar year 2003, our President and Chief Executive Officer, KevinM. Roche, received compensation of $14,288.  We reimburse our officers forexpenses incurred relating to services rendered on the Company’s behalf. We do not have any employment agreements with any officer or director.

 

**ITEM11.****                     ****SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBERMATTERS.**

 

**SecurityOwnership of Certain Beneficial Owners**

 

As ofDecember 31, 2003, the following beneficial owners owned or held 5% ormore 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                     | %          |

 

37

----

 

**SecurityOwnership of Management**

 

As ofDecember 31, 2003, members of our board of directors own units as follows:

 
| **(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                      | %          |

 

----

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

(2)          Robert J. Miller owns and controls L&NM Enterprises, LLC, whichowns 500 Units.  These 500 Units are included in Robert J. Miller’sownership total.

 

**ITEM 12.****                     ****CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**

 

As of December 31, 2003, we have engaged in the followingtransactions with related parties.

 

*Fagen, Inc.*

 

Fagen, Inc., beneficially owns 2,000 of our Units.  AtDecember 31, 2003, we had 25,605 Units outstanding.  Fagen, Inc.’sownership of 2,000 Units means that it owns a 7.82% membership interest in the

 

38

----

 

Company. We entered into a design-build contract with Fagen, Inc., for the purpose ofproviding design, development and construction services to us in connectionwith our ethanol plant.  Pursuant to the design-build contract, Fagen,Inc., has agreed to design, develop and construct a 40 million gallon per yearethanol plant for an amount not to exceed approximately $45,575,000, subject tochange orders approved by us.  The amount we expect to pay Fagen, Inc.,for construction of the ethanol plant is comparable to that of an arms-length transaction.

 

*Indeck Energy Services, Inc.*

 

Indeck Energy Services, Inc. beneficially owns 2,000 of ourUnits.  At December 31, 2003, we had 25,605 Units outstanding. Indeck Energy Services, Inc.’s ownership of 2,000 Units meaning that it owns a7.82% membership interest in the Company.  Indeck Energy Services, Inc.,as a subcontractor under the design-build contract, is expected to provide uswith a recuperative thermal oxidizer in connection with the development andconstruction of our ethanol plant.  We expect the recuperative thermaloxidizer to decrease our emission of any volatile organic compounds and easeour regulatory compliance.  The cost of the thermal oxidizer is estimatedat $2,100,000 and is included in the design-build contract price of $45,575,000. The amount 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.****                     ****EXHIBITS AND REPORTS ON FORM 8-K.**

 

(a)                                  The following exhibits are included herein:

 

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

 

The following exhibits are filed as part of this report.  Exhibitspreviously 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.                                      |

 

39

----

 
| 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. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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.                                                                                                                                                                                                                                    |

 

----

*Previously submitted and filed with Form 10-KSB for the fiscal year endingDecember 31, 2003 and not duplicated in this Amendment No. 1 to Form10-KSB/A.

 

**Material has been omitted pursuant to a request for confidential treatment andsuch materials have been filed separately with the Securities and ExchangeCommission.

 

(b)                                 Reports on Form 8-K.

 

None.

 

40

----

 

**ITEM 14.****                     ****PRINCIPALACCOUNTANT 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          |   |

 

----

(1)          Audit-related fees include consultation onaccounting rules related to derivative accounting in accordance with Statementon Financial Accounting Standard 133, as amended, and consultation on rulesrelated to consolidation.

 

Consistent with the Securities and Exchange Commission requirementsregarding auditor independence, it is the Audit Committee’s policy topre-approve on a case-by-case basis the audit and permissible non-auditservices provided by the independent auditor prior to the commencement of thespecified service.  All services provided by our independent auditor,Boulay, Heutmaker, Zibell & Co., have been pre-approved by the AuditCommittee.

 

41

----

 

**SIGNATURES**

 

In accordance with Section 13 or 15(d) of the Exchange Act, theregistrant caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 

 
|   | UNITED  WISCONSIN GRAIN PRODUCERS, LLC        |
|--------|-----------------------------------------------|
|   |                                          |
| Date:  | May 17,  2004                                 |   | /s/ | Kevin  M. Roche |   |
|   | Kevin  M. Roche                               |
|   | Chairman  and President                       |
|   | (Principal  Executive Officer)                |
|   |                                          |
| Date:  | May 17,  2004                                 |   | /s/ | Robert  J. Miller |   |
|   | Robert  J. Miller                             |
|   | Treasurer                                     |
|   | (Principal  Financial and Accounting Officer) |

 

In accordance with the Exchange Act, this report has been signed belowby the following persons on behalf of the registrant and in the capacities andon the dates indicated.

 

 
| Date:  May 17, 2004 |                                               | /s/  Kevin M. Roche      |   |
|---------------------|----------------------------------------------------|--------------------------|--------|
|                | Kevin  M. Roche, President and Director            |
|                |                                               |
| Date:  May 17, 2004 |                                               | /s/ William  R. Herrmann |   |
|                | William  R. Herrmann, Vice-President and  Director |
|                |                                               |
| Date:  May 17, 2004 |                                               | /s/  Robert J. Miller    |   |
|                | Robert  J. Miller, Treasurer and Director          |
|                |                                               |
| Date:  May 17, 2004 |                                               | /s/   Robert Lange  |   |
|                | Robert  Lange, Secretary and Director              |
|                |                                               |
| Date:  May 17, 2004 |                                               |                     |   |
|                | Carl  Benck, Director                              |
|                |                                               |
| Date:  May 17, 2004 |                                               |                     |   |
|                | Cal  Dalton, Director                              |
|                |                                               |
| Date:  May 17, 2004 |                                               | /s/  Jerry H. Franz      |   |
|                | Jerry  H. Franz, Director                          |
|                |                                               |
| Date:  May 17, 2004 |                                               |                     |   |
|                | Berwyn  G. Westra, Director                        |
|                |                                               |
| Date:  May 17, 2004 |                                               | /s/  Lawrence Lagowski   |   |
|                | Lawrence  Lagowski, Director                       |
|                |                                               |
| Date:  May 17, 2004 |                                               |                     |   |
|                | Wayne  Mitchell, Director                          |

 

42

----