##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal quarter ended June 30, 2009.
 OR
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from  to .
 COMMISSION FILE NUMBER 00051965
 WESTERN IOWA ENERGY, LLC
  Iowa
    
    41-2143913(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 1220 S. Center Street, P.O. Box 399
Wall Lake, Iowa 51466
 (712) 664-2173
(Issuers telephone number)
 þ o
 o Yes o No
 o Yes þ No
    Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer þ
    
    Smaller Reporting Company o




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##### 



INDEX
 PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis or Plan of Operation
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risks
    
    
    26Item 4T. Controls and Procedures
    
    
    28PART II  OTHER INFORMATION
    
    
    28Item 1. Legal Proceedings
    
    
    28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3. Defaults Upon Senior Securities
    
    
    30Item 4. Submission of Matters to a Vote of Security Holders
    
    
    30Item 5. Other Information
    
    
    30Item 6. Exhibits
    
    
    30Exhibit 2.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 WESTERN IOWA ENERGY, LLC
BALANCE SHEETS
 June 30,
    
    
    December 31,2009
    
    
    2008(UNAUDITED)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    92,344
    
    
    $
    66,400Margin deposits
    
    
    787,234
    
    
    
    285,295Derivative instruments
    
    
    
    
    
    
    61,360Trade accounts receivable  related party
    
    
    2,877,771
    
    
    
    1,428,521Other receivables
    
    
    146,383
    
    
    
    163,470Incentive receivables
    
    
    822,567
    
    
    
    312,019Inventory
    
    
    4,895,139
    
    
    
    4,510,457Prepaid expenses
    
    
    1,074,946
    
    
    
    222,476Total current assets
    
    
    10,696,384
    
    
    
    7,049,998PROPERTY, PLANT AND EQUIPMENTLand and land improvements
    
    
    1,364,842
    
    
    
    1,364,842Office building and equipment
    
    
    645,542
    
    
    
    645,542Plant and process equipment
    
    
    33,689,782
    
    
    
    33,683,185Construction in progress
    
    
    49,281
    
    
    
    17,513Total, at cost
    
    
    35,749,447
    
    
    
    35,711,082Less accumulated depreciation
    
    
    6,558,635
    
    
    
    5,451,621Total property, plant and equipment
    
    
    29,190,812
    
    
    
    30,259,461OTHER ASSETSLand options
    
    
    596
    
    
    
    596Other investments
    
    
    107,198
    
    
    
    80,895Loan origination fees, net of amortization
    
    
    78,403
    
    
    
    87,451Total other assets
    
    
    186,197
    
    
    
    168,942TOTAL ASSETS
    
    $
    40,073,393
    
    
    $
    37,478,401LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESAccounts payable:Trade
    
    $
    2,213,022
    
    
    $
    794,345Related party
    
    
    34,531
    
    
    
    28,480Current portion of long-term debt
    
    
    1,909,722
    
    
    
    2,729,110Derivative instruments
    
    
    210,146
    
    
    
    Accrued interest
    
    
    31,597
    
    
    
    33,372Accrued wages and benefits
    
    
    95,707
    
    
    
    71,570Accrued payroll taxes
    
    
    4,972
    
    
    
    4,059Accrued expenses  related party
    
    
    
    
    
    
    117,620Other current liabilities
    
    
    46,079
    
    
    
    46,079Total current liabilities
    
    
    4,545,776
    
    
    
    3,824,635LONG-TERM LIABILITIESLong-term debt, less current portion above
    
    
    9,488,333
    
    
    
    6,725,056Total liabilities
    
    
    14,034,109
    
    
    
    10,549,691MEMBERS EQUITYContributed capital
    
    
    23,516,376
    
    
    
    23,516,376Retained earnings
    
    
    2,522,908
    
    
    
    3,412,334Total members equity
    
    
    26,039,284
    
    
    
    26,928,710TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    40,073,393
    
    
    $
    37,478,401
   3




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WESTERN IOWA ENERGY, LLC
STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Three Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30, 2009
    
    
    June 30, 2008
    
    
    June 30, 2009
    
    
    June 30, 2008REVENUESRelated parties
    
    $
    9,751,660
    
    
    $
    24,355,790
    
    
    $
    12,821,728
    
    
    $
    39,257,659Incentive funds
    
    
    1,148,325
    
    
    
    3,245,492
    
    
    
    2,044,394
    
    
    
    6,373,165Total revenues
    
    
    10,899,985
    
    
    
    27,601,282
    
    
    
    14,866,122
    
    
    
    45,630,824COST OF SALES
    
    
    10,530,856
    
    
    
    25,133,535
    
    
    
    14,791,624
    
    
    
    41,378,763Gross profit
    
    
    369,129
    
    
    
    2,467,747
    
    
    
    74,498
    
    
    
    4,252,061OPERATING EXPENSESConsulting and professional fees
    
    
    248,257
    
    
    
    62,363
    
    
    
    374,636
    
    
    
    165,585Office and administrative expenses
    
    
    296,696
    
    
    
    508,438
    
    
    
    630,427
    
    
    
    943,275Total operating expenses
    
    
    544,953
    
    
    
    570,801
    
    
    
    1,005,063
    
    
    
    1,108,860OTHER INCOME (EXPENSE)Interest income
    
    
    944
    
    
    
    3,052
    
    
    
    1,352
    
    
    
    4,779Interest expense
    
    
    (85,054
    )
    
    
    (224,780
    )
    
    
    (176,947
    )
    
    
    (501,173
    )Grant income
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    Patronage dividends
    
    
    
    
    
    
    
    
    
    
    116,734
    
    
    
    156,404Total other income (expense)
    
    
    (84,110
    )
    
    
    (221,728
    )
    
    
    41,139
    
    
    
    (339,990
    )NET INCOME (LOSS)
    
    $
    (259,934
    )
    
    $
    1,675,218
    
    
    $
    (889,426
    )
    
    $
    2,803,211BASIC AND DILUTED EARNINGS (LOSS) PER UNIT
    
    $
    (9.83
    )
    
    $
    63.34
    
    
    $
    (33.63
    )
    
    $
    105.99WEIGHTED AVERAGE UNITS OUTSTANDING, BASIC AND DILUTED
    
    
    26,447
    
    
    
    26,447
    
    
    
    26,447
    
    
    
    26,447
   4




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WESTERN IOWA ENERGY, LLC
STATEMENTS OF CASH FLOWS
 Six Months Ended
    
    
    Six Months EndedJune 30, 2009
    
    
    June 30, 2008CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
    
    $
    (889,426
    )
    
    $
    2,803,211Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activitiesDepreciation and amortization
    
    
    1,116,062
    
    
    
    1,101,066Provision for bad debts
    
    
    
    
    
    
    36,750Non cash portion of patronage dividends
    
    
    (26,303
    )
    
    
    (47,085
    )Non cash forgiveness of debt
    
    
    (100,000
    )
    
    
    Effects of changes in operating assets and liabilitiesMargin deposits
    
    
    (501,939
    )
    
    
    1,143,177Trade accounts receivable  related party
    
    
    (1,449,250
    )
    
    
    2,224,007Other receivables
    
    
    17,087
    
    
    
    (144,284
    )Incentive receivables
    
    
    (510,548
    )
    
    
    (1,089,647
    )Inventory
    
    
    (384,682
    )
    
    
    1,534,904Derivative instruments
    
    
    271,506
    
    
    
    (1,955,212
    )Prepaid expenses and other assets
    
    
    (852,470
    )
    
    
    (31,709
    )Accounts payable
    
    
    1,424,728
    
    
    
    (809,007
    )Accrued interest
    
    
    (1,775
    )
    
    
    (35,544
    )Accrued wages and benefits
    
    
    24,137
    
    
    
    23,517Accrued payroll taxes
    
    
    913
    
    
    
    12,243Accrued expenses  related party
    
    
    (117,620
    )
    
    
    12,862Other current liabilities
    
    
    
    
    
    
    178,928Net cash provided by (used in) operating activities
    
    
    (1,979,580
    )
    
    
    4,958,177CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment, including
construction in progress
    
    
    (38,365
    )
    
    
    (28,315
    )Net cash used in investing activities
    
    
    (38,365
    )
    
    
    (28,315
    )CASH FLOWS FROM FINANCING ACTIVITIESNet payments on revolving line of credit
    
    
    
    
    
    
    (3,800,000
    )Proceeds from long-term debt
    
    
    7,927,000
    
    
    
    (956,112
    )Payments on long-term debt
    
    
    (5,883,111
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    2,043,889
    
    
    
    (4,756,112
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    25,944
    
    
    
    173,750CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    66,400
    
    
    
    32,048CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    92,344
    
    
    $
    205,798
   5




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates in Preparing Financial Statements
  Basis of Accounting
    Revenue Recognition
  Cash and Cash Equivalents
   Accounts Receivable
    6




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 Derivative Instruments and Hedging Activities
  Inventories
  Property, Plant, and Equipment
   YearsLand improvements
    
    
    20-40Office building
    
    
    5-40Office equipment
    
    
    5-20Plant and process equipment
    
    
    10-40
  Loan Origination Fees
  Other Investments
  Other Income
   7




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 Income Taxes
  Earnings (Loss) Per Unit
  Cost of Sales
  Shipping and Handling Costs
  Environmental Liabilities
  Fair Value of Financial Instruments
  Current assets and current liabilities
 Long-term debt
 New Accounting Standards
 , Disclosures about Derivative Instruments and Hedging
Activities
  8




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 Date of FASB
Statement No. 157 Fair Value Measurements
 Interim Disclosure about Fair Value of Financial Instruments Disclosures about Fair Value of Financial Instruments Interim Financial Reporting
 Subsequent Events
 The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles  a replacement of FASB Statement No. 162
 NOTE 2  INCENTIVE PAYMENTS AND RECEIVABLE
  NOTE 3  INVENTORY
  June 30,
    
    
    December 31,2009
    
    
    2008Raw material
    
    $
    1,392,276
    
    
    $
    496,028Work in process
    
    
    263,583
    
    
    
    541,530Finished goods
    
    
    3,239,280
    
    
    
    3,472,899Total
    
    $
    4,895,139
    
    
    $
    4,510,457
  9




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 4  LAND OPTION
  NOTE 5  DEBT AND FINANCING
 Long-Term Debt
  June 30,
    
    
    December 31,2009
    
    
    2008Note payable to Farm Credit Services of America and
CoBank under term note agreement  see details
below
    
    $
    3,250,000
    
    
    $
    4,150,000Note payable to Farm Credit Services of America and
CoBank under reducing revolving credit note 
see details below
    
    
    7,350,000
    
    
    
    4,350,000Note payable to the Iowa Department of Economic Development  see details below
    
    
    222,500
    
    
    
    337,500Note payable to Glidden Rural Electric Cooperative  see details below
    
    
    575,555
    
    
    
    616,666Total
    
    
    11,398,055
    
    
    
    9,454,166Less current portion
    
    
    1,909,722
    
    
    
    2,729,110Long-term portion
    
    $
    9,488,333
    
    
    $
    6,725,056
  2010
    
    $
    1,909,7222011
    
    
    1,562,2222012
    
    
    1,912,2222013
    
    
    2,017,2222014
    
    
    1,882,223Thereafter
    
    
    2,114,444Total
    
    $
    11,398,055
  10




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
     NOTE 6  MEMBERS EQUITY
  NOTE 7  CASH FLOW DISCLOSURES
  Six
    
    
    SixMonths
    
    
    MonthsEnded
    
    
    EndedJune 30, 2009
    
    
    June 30, 2008Cash paid for interest
    
    $
    178,722
    
    
    $
    536,717
  11




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 8  RELATED PARTY TRANSACTIONS
     NOTE 9  LEASE COMMITMENTS
  2010
    
    $
    35,6272011
    
    
    35,6272012
    
    
    8,907Total
    
    $
    80,161
  NOTE 10  RETIREMENT AND SAVINGS PLAN
   12




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 NOTE 11  FAIR VALUE OF FINANCIAL INSTRUMENTS
  
    
    Level 1Unadjusted quoted prices for identical assets and liabilities in active
markets;
    
    Level 2Quoted prices for similar assets and liabilities in active markets (other
than those included in Level 1) which are observable for the asset or liability, either
directly or indirectly; and
 
    
    Level 3Valuations derived from valuation techniques in which one or more
significant inputs or significant value drivers are unobservable.
  SignificantQuoted Prices in
    
    
    Other
    
    
    SignificantActive Markets for
    
    
    Observable
    
    
    UnobservableIdentical Assets
    
    
    Input
    
    
    InputsJune 30, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Financial assets:Cash equivalents
    
    $
    132,598
    
    
    $
    132,598
    
    
    $
    
    
    
    $
    Financial liabilities:Commodity derivatives
    
    $
    (210,146
    )
    
    $
    (210,146
    )
    
    $
    
    
    
    $
    
  NOTE 12  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 Disclosures about Derivative Instruments and Hedging Activities Accounting for
Derivative Instruments and Hedging Activities
 Objectives and Strategies for Holding Derivative Instruments
   13




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
 Commodity Risk Management
  Accounting for Derivative Instruments and Hedging Activities
   Fair Value of Derivative Instruments
 Balance Sheet
    
    
    Asset Derivatives
    
    
    Liability DerivativesClassification
    
    
    June 30, 2009
    
    
    June 30, 2009Derivatives not designated
as hedging under SFAS 133:Commodity contracts 
Heat Oil options and swaps
    
    Current liabilities
    
    $
    
    
    
    $
    210,146
  Location of net loss
    
    
    Net income (loss)recognized in
    
    
    recognized in income onearnings on
    
    
    derivativederivative activities
    
    
    activitiesDerivatives not designated as hedging instruments under SFAS 133Commodity contracts 
Soybean oil futures and
Heat Oil options and swaps
    
    Cost of sales
    
    $
    (806,067
    )
  NOTE 13  UNCERTAINTIES
   14




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
   NOTE 14  GAIN CONTINGENCY
  NOTE 15  ASSET PURCHASE AGREEMENT
     15




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WESTERN IOWA ENERGY, LLC
Wall Lake, Iowa
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
   NOTE 16  SUBSEQUENT EVENTS
   16




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations.
  Cautionary Statements Regarding Forward Looking Statements
  
    
    Overcapacity within the biodiesel industry resulting in increased competition and
costs for feedstock and/or decreased prices for our biodiesel and glycerin;
 
    
    Competition with other manufacturers in the biodiesel industry;
 
    
    The availability and adequacy of our cash flow to meet our requirements;
 
    
    Results of our hedging strategies;
 
    
    Changes in interest rates and the availability of credit to support capital
improvements, development, expansion, and operations;
 
    
    Decrease in the demand for biodiesel;
 
    
    Changes in plant production capacity or technical difficulties in operating the
plant;
 
    
    Actual biodiesel and glycerin production varying from expectations;
 
    
    Availability and cost of products and raw materials, particularly soybean oil and
animal fats;
 
    
    Changes in the price and market for biodiesel and its co-products;
 
    
    Our ability to market and our reliance on third parties to market our products;
 
    
    Fluctuations in petroleum prices;
 
    
    Competition from alternative fuels and alternative fuel additives;
 
    
    Changes in our business strategy, capital improvement, or development plans;
 
    
    Consequences of the domestic and global economic downturn and recent financial
crisis;
 
    
    Our ability to generate free cash flow to invest in our business and service our
debt;
 
    
    Changes in general economic conditions or the occurrence of certain events causing
an economic impact in the agriculture, oil, or transportation industries;
 
    
    Changes in the environmental regulations or in our ability to comply with the
environmental regulations that apply to our plant operations;
 
    
    Changes and advances in biodiesel production technology;
 
    
    Our ability to continue to export our biodiesel;
 
    
    Changes in federal, state, or local incentives for biodiesel production;
 
    
    Changes to the rules related to the Renewable Fuels Standard;
 
    
    The imposition of tariffs or other duties on biodiesel imported into Europe;
 
    
    Our ability to comply with the financial covenants in our loan agreements;
 
    
    The closing, or the failure to close, of the transaction contemplated by the asset
purchase agreement entered into by the Companys board of directors with REG and other
parties affiliated with REG; and
 
    
    Other factors described elsewhere in this report.
  17




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Overview
   Liquidity and Capital Resources  Proposed
Asset Purchase Transaction with Renewable Energy Group, Inc .
      18




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Results of Operations for the Three Months Ended June 30, 2009 and 2008
  Three Months Ended
    
    
    Three Months EndedJune 30, 2009
    
    
    June 30, 2008(Unaudited)
    
    
    (Unaudited)Statement of Operations Data
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Revenues
    
    $
    10,899,985
    
    
    
    100.00
    %
    
    $
    27,601,282
    
    
    
    100.00
    %Cost of Sales
    
    $
    10,530,856
    
    
    
    96.61
    %
    
    $
    25,133,535
    
    
    
    91.06
    %Gross Profit (Loss)
    
    $
    369,129
    
    
    
    3.39
    %
    
    $
    2,467,747
    
    
    
    8.94
    %Operating Expenses
    
    $
    544,953
    
    
    
    5.00
    %
    
    $
    570,801
    
    
    
    2.07
    %Other Income (Expense)
    
    $
    (84,110
    )
    
    
    (0.77
    %)
    
    $
    (221,728
    )
    
    
    (0.80
    %)Net Income (Loss)
    
    $
    (259,934
    )
    
    
    (2.38
    %)
    
    $
    1,675,218
    
    
    
    6.07
    %
 Revenues
  Three Months Ended
    
    
    Three Months EndedJune 30, 2009
    
    
    June 30, 2008% of
    
    
    
    
    
    
    % ofRevenue Sources
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesBiodiesel Sales
    
    $
    10,419,976
    
    
    
    95.6
    %
    
    $
    26,644,958
    
    
    
    96.5
    %Glycerin Sales
    
    $
    251,206
    
    
    
    2.3
    %
    
    $
    639,240
    
    
    
    2.3
    %Fatty Acid Sales
and Soapstock Sales
    
    $
    228,803
    
    
    
    2.1
    %
    
    $
    317,084
    
    
    
    1.1
    %Total Revenues
    
    $
    10,899,985
    
    
    
    100.0
    %
    
    $
    27,601,282
    
    
    
    100
    %
  19




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rd th
   20




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Cost of Sales
     Operating Expense
  Other Income (Expenses)
   21




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Results of Operations for the Six Months Ended June 30, 2009 and 2008
  Six Months Ended
    
    
    Six Months EndedJune 30, 2009
    
    
    June 30, 2008(Unaudited)
    
    
    (Unaudited)Statement of Operations Data
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Revenues
    
    $
    14,866,122
    
    
    
    100.00
    %
    
    $
    45,630,824
    
    
    
    100.00
    %Cost of Sales
    
    $
    14,791,624
    
    
    
    99.50
    %
    
    $
    41,378,763
    
    
    
    90.68
    %Gross Profit (Loss)
    
    $
    74,498
    
    
    
    0.50
    %
    
    $
    4,252,061
    
    
    
    9.32
    %Operating Expenses
    
    $
    1,005,063
    
    
    
    6.76
    %
    
    $
    1,108,860
    
    
    
    2.43
    %Other Income (Expense)
    
    $
    41,139
    
    
    
    0.28
    %
    
    $
    (339,990
    )
    
    
    (0.75
    %)Net Income (Loss)
    
    $
    (889,426
    )
    
    
    (5.98
    %)
    
    $
    2,803,211
    
    
    
    6.14
    %
 Revenues
  Six Months Ended
    
    
    Six Months EndedJune 30, 2009
    
    
    June 30, 2008% of
    
    
    
    
    
    
    % ofRevenue Sources
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesBiodiesel Sales
    
    $
    14,229,055
    
    
    
    95.7
    %
    
    $
    43,899,438
    
    
    
    96.2
    %Glycerin Sales
    
    $
    339,209
    
    
    
    2.3
    %
    
    $
    1,271,603
    
    
    
    2.8
    %Fatty Acid Sales and Soapstock Sales
    
    $
    297,858
    
    
    
    2.0
    %
    
    $
    459,783
    
    
    
    1.0
    %Total Revenues
    
    $
    14,866,122
    
    
    
    100.0
    %
    
    $
    45,630,824
    
    
    
    100
    %
  Cost of Sales
   22




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##### Table of Contents



Operating Expense
  Other Income (Expenses)
  Changes in Financial Condition for the Six Months Ended June 30, 2009
  June 30,
    
    
    December 31,2009
    
    
    2008Current Assets
    
    $
    10,696,384
    
    
    $
    7,049,998Current Liabilities
    
    $
    4,545,776
    
    
    $
    3,824,635Long-Term Debt
    
    $
    9,488,333
    
    
    $
    6,725,056Members Equity
    
    $
    26,039,284
    
    
    $
    26,928,710
 Current Assets
 Current Liabilities
 Long-Term Debt
 Members Equity
  23




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##### Table of Contents



Liquidity and Capital Resources
 Cash Flows
  2009
    
    
    2008Net cash provided by (used in) operating activities
    
    $
    (1,979,580
    )
    
    $
    4,958,177Net cash used in investing activities
    
    $
    (38,365
    )
    
    $
    (28,315
    )Net cash provided by (used in) financing activities
    
    $
    2,043,889
    
    
    $
    (4,756,112
    )Net increase in cash and equivalents
    
    $
    25,944
    
    
    $
    173,750
 Operating Cash Flows
  Investing Cash Flows
  Financing Cash Flows
  Indebtedness
 Short-Term Debt Sources
   Long-Term Debt Sources
   24




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##### Table of Contents



Amended and Restated Asset Purchase Agreement with Renewable Energy Group, Inc.
     25




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##### Table of Contents



Critical Accounting Estimates
  Inventories.
 Long-Lived Assets.
  Off-Balance Sheet Arrangements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risks.
 Accounting for Derivative Instruments
and Hedging Activities
  Interest Rate Risk
 Item 2 
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  Liquidity
and Capital Resources, Indebtedness.
   26




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##### Table of Contents



Outstanding Variable
    
    Interest Rate at
    
    
    Adverse 10% Change in
    
    
    Annual Adverse ChangeRate Debt at 6/30/09
    
    June 30, 2009
    
    
    Interest Rates
    
    
    to Income$3,250,000
    
    
    4.0
    %
    
    
    4.4
    %
    
    $
    13,000$7,350,000
    
    
    4.0
    %
    
    
    4.4
    %
    
    $
    29,400
 Commodity Price Risk
      Effect ofHypotheticalAdverse Change Fair Value

    
    
    Market RiskJune 30, 2009
    
    $
    7,950,329
    
    
    $
    795,032June 30, 2008
    
    $
    3,896,059
    
    
    $
    389,606
  27




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##### Table of Contents



Item 4.
    
    Controls and Procedures.
 Disclosure Controls and Procedures
   Changes in Internal Controls
  
 PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings.
  Item 1A.
    
    Risk Factors
 MANAGEMENTS DISCUSSION AND ANALYSIS
 REGs termination of the MOSA could cause a material adverse effect on our ability to produce,
sell, and market biodiesel.
  28




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##### Table of Contents



The asset purchase agreement entered into by the Companys board of directors, REG, and
certain other REG affiliates is subject to a variety of closing conditions and may not close.
 Even if the transactions contemplated by the asset purchase agreement are consummated, the
combined company may not successfully integrate the businesses of REG, CIE, WIE, and Blackhawk and
may not realize the anticipated benefits of the consolidation.
 
    
    demonstrating to the customers of REG, CIE, WIE, and Blackhawk that the consolidation
will not result in adverse changes in biodiesel quality, customer service standards, or
business focus;
 
    
    consolidating and rationalizing corporate administrative infrastructures;
 
    
    coordinating sales and marketing efforts to effectively communicate the expanded
capabilities of the combined company;
 
    
    coordinating the supply chains; and
 
    
    preserving important relationships and resolving potential conflicts that may arise.
  The EPAs recent finding that soy-based biodiesel does not meet the requirements under the RFS
to reduce greenhouse emissions could reduce demand for soy-based biodiesel and reduce our
profitability.
  29




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3.
    
    Defaults Upon Senior Securities.
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders.
  
 Item 5.
    
    Other Information.
  
 Item 6.
    
    Exhibits.The following exhibits are included herein:
 Exhibit No.
    
    Exhibit2.1
    
    
    Amended and Restated Asset Purchase Agreement between WIE and REG31.1
    
    
    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. § 1350.32.2
    
    
    Certificate Pursuant to 18 U.S.C. § 1350.
 
 SIGNATURES
  WESTERN IOWA ENERGY, LLCDate:  August 19, 2009
    /s/ William J. HoranWilliam J. HoranChairman, President and Director(Principal Executive Officer)Date:  August 19, 2009
    /s/ Joe NepplJoe NepplChief Financial Officer(Principal Financial and Accounting Officer)  30