exv10w2



 






EXHIBIT
10.2




[Christianson & Associates, PLLP Logo]




May 23, 2005




Red River Energy, LLC

1600 Mapleton Ave

Bismark ND 58503

Attn: Randy Schneider




	 	 	 	 	 
	Cell:

	 	701-223-6142
	 	 
	Phone:

	 	701-222-4100	 	 
	Email:

	 	randy@sengercpa.com	 	 






Re: Forecasted Financial Statements




Dear Mr. Schneider:



You are pursuing an exciting project. I enjoyed learning more about your project from our
discussions and reviewing your project with your fellow board members.



Our firm would be pleased to provide consulting services and to help you plan through your
development stage. We are confident that our firm has the ability and experience in the ethanol
industry to provide top quality efficient accounting and consulting services to your company. Our
firm works with more ethanol plants that any other accounting firm. Our goal is to be a value
added resource for your company.



I will summarize some of the accounting and consulting services available to your organization as
you choose. Services available to Red Rive Energy, LLC would include the following:





	 	1.	 	Entity analysis and organization consulting.
	 
	 	2.	 	Preparation of financial statement forecasts.
	 
	 	3.	 	Entity governess planning.
	 
	 	4.	 	Strategic planning with board of directors.
	 
	 	5.	 	Financing proposal documentation.
	 
	 	6.	 	Preparation of audited financial statements for:






	 	a.	 	Development stage
	 
	 	b.	 	Construction stage




 









 






	 	c.	 	Operating years






	 	7.	 	Income tax planning
	 
	 	8.	 	Preparation of income tax returns federal and state.
	 
	 	9.	 	General ledger software implementation.






	 	a.	 	Development stage accounting
	 
	 	b.	 	Construction period accounting
	 
	 	c.	 	Operations accounting
	 
	 	d.	 	Grain accounting






	 	10.	 	Quarterly ethanol production audits for state producer
payments.
	 
	 	11.	 	Small producer ethanol tax credit analysis
	 
	 	12.	 	Provide consulting as a resource for industry comparisons of
operating efficiencies and cost analysis of plant.




My understanding is that Red River Energy, LLC is proposed to be organized as a Limited Liability
Company (LLC) in the State of Minnesota or North Dakota. The financial information requirements
for the confidential disclosure statement would include information from a complied forecasted
financial statement for the first five years of operations.



The fees for our services will be based upon hours of work performed at hourly rates plus
reimbursement of out of pocket expenditures. Hourly rates for accounting staff are dependent upon
experience and abilities of the staff. Non CPA accounting staff rates range from $35-$55 per hour.
CPA accounting staff rates range from $85-$120 per hour and fees for my services are at a rate of
$175 per hour. We are confident that we can provide accounting and consulting services very
efficiently based upon our experience in the ethanol industry. We understand ethanol production
facilities.



We could also set up a general ledger system that we would transfer onto your computer system to
allow you to continue to maintain the general ledger during the development stage. We can easily
update flies between systems via the internet.



I would estimate the fees for preparation of complied financial statement forecasts to be $20,000.
The financial forecasts have multiple functions and would be a component of the business plan, and
financing proposal documentation. Other services would be performed based upon hours of work
performed at hourly rates. We could make estimates of the cost of each project as we




 









 







define the
scope of these projects in the future. Our travel time in compensated for at our hourly rates and
we do anticipate that we would bill monthly for services rendered.



We are currently engaged to provide auditing or consulting services to over thirty five ethanol
production facilities in fourteen mid-western states. Ethanol plant client references are
available upon request. Our firm has experience working in the ethanol production industry and
would enjoy working with Red River Energy, LLC as well.



You have an exciting project and I look forward to working with you in the future. If you have any
questions or need additional information, please feel free to contact me.




	 	 	 
	Sincerely,
	 	 
	 
	 	 
	/s/ John O Christianson
	 	 
	 
	 	 
	John O Christianson, CPA
	 	 
	 
	 	 
	Acceptance of terms:
	 	 
	 
	 	 
	   /s/ Les Nesvig

	 	[Handwritten: 5/24/05]
	 	 	 
	Red River Energy, LLC

	 	Date