Proposed Business and Implementation Strategy

In General. To achieve our goal of becoming a significant producer of ethanol in the U.S., that is, a producer of 500 million gallons per year of ethanol, we have developed a strategy that we intend to pursue. Our strategy, which is dependent on our ability to obtain significant additional capital, has the following important elements:

Low-cost production capacity. It is our intention to capitalize on the growing demand in the U.S. for ethanol by establishing increasing production capacity as quickly as possible over the next several years. In pursuing our expansion strategy, we will seek to build and/or acquire large-scale facilities with design elements that incorporate technology improvements and continue to build and/or acquire facilities in locations with access to multiple rail services. We believe that using similar facility designs will permit us to lower our costs relating to spare parts and to take advantage of our operations experience to be gained at other future facilities.

Focus on Cost Efficiency. Our corporate challenge will always be to seek greater economies of scale in our operations and to maximize energy efficiency and increase yield. Included in this challenge will be to purchase corn during peak supply periods to reduce our corn costs and to reduce our per-unit energy and transportation costs where possible.

Seek Beneficial Alternative Technologies. Our management intends to investigate the feasibility of implementing, at some time in the future, new technologies that would serve to augment or replace natural gas usage. It is expected that these technologies would allow us to reduce our energy costs. Capital costs and engineering issues must be adequately addressed prior to any implementation of any such technology.

Seek to Expand Market Demand for Ethanol. As our rate of growth and our access to capital permit, our management intends to take actions it believes will create additional demand for ethanol, including, investing in new technologies that use ethanol and employing institutional advertising that focuses on, and promotes the use of, ethanol.

Pursue Potential Acquisition Opportunities. Assuming that we have capital available, we believe that, as the ethanol industry matures, opportunities for expansion of our business through acquisitions will be available. Such an acquisition could involve additional ethanol production, storage or distribution facilities and related infrastructure, as well as potential facility sites under development. Our current efforts in acquiring ACE Ethanol, LLC is an example of this plan.