Recent Developments and Current Proposed Manchester, Iowa, Ethanol Plant.

Purchase of Land. In March 2007, our subsidiary, ALL Energy Company, through its subsidiary, ALL Energy Manchester, LLC, acquired approximately 150 acres of real property located near Manchester, Iowa. It is our intention to construct a 100 million gallon (per year) ethanol production facility on this land. We refer to this proposed ethanol production facility as “the Manchester facility”.

Annexation. The 150 acres on which we propose to build the Manchester facility, a 100 million gallon per year ethanol production facility, was recently annexed by the City of Manchester, Iowa. Because of this annexation, it is expected that we would be able to secure important tax credits from local and Iowa state agencies.

Economic Incentives. We have received in excess of $17 million in infrastructure improvements, tax credits and property tax abatements from the City of Manchester, Iowa, and the State of Iowa in support of the Manchester facility. The City has agreed to provide us with sewer service to the Manchester 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 us a sales and use tax credit in an amount in excess of $10.4 million for High Quality Job Creation.

Air Quality Construction Permit. In May 2007, the Iowa Department of Natural Resources issued the final Air Quality Construction Permit relating to the Manchester facility. We have engaged Yaggy-Colby to consult on air-related environmental matters relating to the Manchester facility.

Ground Water Quality Permit Application. We have engaged Natural Resources Group (NRG) to consult on water-related environmental matters relating to the Manchester facility. With NRG, we have made significant progress towards compliance with applicable water-related regulations, having filed our initial water-quality-related permit application.

Project Feasibility Study. We commissioned BBI to perform a project feasibility study relating to the Manchester facility, which included an analysis of the availability of corn and energy, as well as the surrounding transportation infrastructure. BBI’s report indicates that there are ample corn supplies in close proximity to the Manchester facility to satisfy our feedstock needs, that there are adequate supplies of energy available at reasonable cost with which to operate the Manchester facility and that the surrounding transportation infrastructure is capable of handling the anticipated truck and rail traffic associated with the Manchester facility. We obtained this feasibility study, inasmuch as funding sources familiar to our management require such a study as a condition to financing.

Project Engineering Firm. We have engaged the project engineering firm, to provide project engineering services with respect to the Manchester facility. With the project-engineering firm, we have made a significant progress towards completing the necessary preliminary engineering work relating to the Manchester facility. Once we complete this preliminary engineering work, we will be in a position to put the construction of the Manchester facility up for bid.

Proposed Purchases of Existing Ethanol Production Facilities. In July 2007, our company and Ace Ethanol, LLC, the operator of an ethanol production facility in Stanley, Wisconsin, with a design capacity of 30 million gallons per year (currently producing approximately 46 million gallons annually), signed a letter of intent with respect to the proposed purchase by us of 100% of Ace Ethanol. We are currently negotiating the definitive acquisition agreement and, thereafter, the final approval of the Ace Ethanol members.

We have secured letters of intent for over $119 million in funding needed to acquire Ace Ethanol. We may not obtain final funding agreements based on these letters of intent.

In addition, we are currently negotiating the acquisition of one or more additional existing ethanol production facilities. We cannot make assurances that we will be successful in these efforts.

It is currently anticipated that the capital required to complete the purchase of any existing ethanol production facility will be obtained in the form of debt financing or a combination of debt financing and equity. However, we have not obtained a financing commitment and there is no assurance that we will ever obtain the financing needed to complete any proposed acquisition.