First Proposed Ethanol Production Facility Construction

We have purchased approximately 150 acres of real property located near Manchester, Iowa, on which to build the Manchester facility. This property has the following characteristics:

Property Location:
   Adjacent to Manchester, Iowa, midway between Waterloo and Dubuque, Iowa.

Property Size:
   Approximately 150 acres.

Purchase Price:
   $954,000.

Ingress/Egress:
   Easy access to Iowa State Highway 20.

Market Availability:
   Highway access for trucking ethanol and DDGS; situated in Northeast Iowa with close proximity to feed markets for Wet Distillers Grain with Soluables (WDGS).

Power Supply:
   Electricity supply is ample for the proposed production facility and there are two nearby natural gas pipelines.

Water Supply:
   Well water is available, with back-up water supply available from the City of Manchester.

Sewer:
   Available, if needed, from the City of Manchester.

Corn Availability:
   Our commissioned project feasibility study indicates that there are ample corn supplies in close proximity to the Manchester facility, as proposed.

Annexation:
   In March 2007, this property was annexed by the City of Manchester. As a result of the completion of this annexation, approximately $17,000,000 of Iowa state and local tax credits have been awarded to us.

Local Government:
   We have entered into a Development Agreement with the City of Manchester whereby we have been granted tax abatements and infrastructure improvements in and around the Manchester facility site. Specifically, the City of Manchester has agreed to provide the Manchester facility with sewer service to the facility site, roadway improvements in and around the Manchester facility site and a 10-year property tax abatement, a total incentive package in excess of $6.6 million. In addition, the Iowa Department of Economic Development has awarded a sales and use tax credit in an amount in excess of $10.4 million for High Quality Job Creation.

We require approximately $250,000,000 in financing, either debt, equity or a combination thereof, to construct the Manchester facility. We cannot assure you that we will be able to construct the Manchester facility, as proposed, as we have not obtained any commitment for any such funding. Should we obtain needed financing, the Manchester facility is expected to have the following characteristics:

Annual Ethanol Production Capacity:
   Design capacity of 100 million gallons per year, with an anticipated annual ethanol production rate of 124 million gallons.

Ownership: 100%.
Production Process: Dry Milling.
Primary Energy Source: Natural Gas.
Estimated DDGS Production (Dry) per Year: 381,000 tons.
Estimated Corn Processed per Year: 42.4 million bushels.

The Manchester facility is to be the first ethanol production facility that is part of our five-plant project development agreement with our project engineering firm. Under the development agreement, the project engineering firm is to provide design engineering services. It is intended that Pacesetter Management Group, LLC, a company affiliated with the project engineering firm, will manage five of our ethanol production facilities, including the Manchester facility. However, we have not yet executed a formal agreement with Pacesetter in this regard. Our management has begun the process of selecting the construction firm that will be hired by us to build the Manchester facility. As of the date hereof, we have not entered into any contract with any such construction firm. However, with the respect to the Manchester facility, we have entered into working relationships with two construction firms, one based in Minnesota, the other in Wisconsin, as we continue the process of completing the design of the Manchester facility.