FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended February 28, 2006
Commission File Number 333-121321
GREEN PLAINS RENEWABLE ENERGY, INC.
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(Exact name of registrant as specified in its charter)
Iowa 84-1652107
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7945 W. Sahara Ave., Suite 107, Las Vegas, Nevada 89117
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(Address of principal executive offices)
(702) 363.9307
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(Issuer's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition or
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act (Check one):
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of March 3, 2006
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Common Stock, $.001 par value 4,320,990 shares
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1: Consolidated, Condensed Financial Statements
Consolidated, Condensed Balance Sheet as of November 30, 2005 and
February 28, 2006 (Unaudited) 3
Consolidated, Condensed Statements of Operations
For the three months ended February 28, 2006 (Unaudited),
February 28, 2005 (Unaudited) and the period from Inception
on June 29, 2004 through February 28, 2006 4
Consolidated, Condensed Statements of Cash Flows
For the three months ended February 28, 2006 (Unaudited) 5
Notes to Consolidated, Condensed Financial Statements (Unaudited) 6
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
Item 3: Quantitative and Qualitative Disclosures About Market Risk 15
Item 4: Controls and Procedures 16
PART II - OTHER INFORMATION
Item 1: Legal Proceedings 17
Item 1A: Risk Factors 17
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3: Defaults upon Senior Securities 18
Item 4: Submission of Matters to a Vote of Security Holders 18
Item 5: Other Information 18
Item 6: Exhibits 18
Signatures 20
2
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
GREEN PLAINS RENEWABLE ENERGY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED, CONDENSED BALANCE SHEETS
ASSETS
November 30, February 28,
2005 2006
----------------- -----------------
(Unaudited)
CURRENT ASSETS
Cash and equivalents $ 5,794,936 $ 5,424,561
Securities 28,064,700 24,599,884
Prepaid expenses - 88,767
Deposits related to option agreements 3,000 14,000
----------------- -----------------
Total current assets 33,862,636 30,127,212
PROPERTY AND EQUIPMENT, net 786,846 848,670
OTHER ASSETS
Recoverable rail line costs - 3,500,000
Site development costs - 778,709
Loan fees - 355,150
----------------- -----------------
Total other assets 4,633,859
-
----------------- -----------------
Total assets $ 34,649,482 $ 35,609,741
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 170,701 $ 69,132
----------------- -----------------
Total current liabilities
170,701 69,132
----------------- -----------------
Total Liabilities 170,701 69,132
----------------- -----------------
Commitments and contingencies - -
STOCKHOLDERS' EQUITY
Common stock; $.001 par value, 25,000,000 shares authorized,
4,215,990 and 4,320,990 shares issued and outstanding, respectively 4,216 4,321
Additional paid-in capital 34,922,314 35,972,209
Accumulated deficit (447,749) (435,921)
----------------- -----------------
Total stockholders' equity 34,478,781 35,540,609
----------------- -----------------
Total liabilities and stockholders' equity $ 34,649,482 $ 35,609,741
================= =================
See accompanying notes to consolidated, condensed financial statements.
3
GREEN PLAINS RENEWABLE ENERGY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED, CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Period
From Inception
For the Three Months Ended On June 29, 2004
February 28, Through
-------------------------------------- February 28,
2006 2005 2006
--------------- --------------- ---------------
Revenues $ - $ - $ -
Operating expenses 123,811 110,714 903,662
--------------- --------------- ---------------
Loss from operations (123,811) (110,714) (903,662)
Other income
Interest income 135,639 1,223 467,741
--------------- --------------- ---------------
Income (loss) before provision
for income taxes 11,828 (109,491) (435,921)
Provision for income taxes - - -
--------------- --------------- ---------------
Net income (loss) $ 11,828 $ (109,491) $ (435,921)
=============== =============== ===============
Net income (loss) per common
share - basic and diluted $ 0.00 $ (0.14)
=============== ===============
Weighted average common
shares outstanding -
Basic and diluted 4,225,712 765,000
=============== ===============
See accompanying notes to consolidated, condensed financial statements.
4
GREEN PLAINS RENEWABLE ENERGY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED, CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Period
From Inception
On June 29,2004
For the Three Months Ended Through
February 28, February 28,
2006 2005 2006
--------------- --------------- ---------------
Cash flows from operating activities:
Net income (loss) $ 11,828 $ (109,491) $ (435,921)
Adjustments to reconcile net income (loss) to
net cash used by operating activities:
Stock based compensation 50,000 - 137,500
Depreciation 2,614 72 4,307
Changes in operating assets and liabilities:
Prepaid expenses (88,767) - (88,767)
Accounts payable and accrued expenses (101,569) 19,168 69,132
--------------- --------------- ---------------
Net cash used by operating activities (125,894) (90,251) (313,749)
Cash flows from investing activities:
Cash acquired in acquisition of subsidiary 210,291 - 210,291
Purchase of securities - - (28,064,700)
Payment of recoverable rail line costs (3,500,000) (3,500,000)
Purchase of property and equipment (64,438) (7,518) (852,977)
Deposits related to option agreements - - (3,000)
Sale of securities 3,464,816 - 3,464,816
--------------- --------------- ---------------
Net cash used by investing activities (110,669) (7,518) (28,745,570)
Cash flows from financing activities:
Payment of loan fees (355,150) - (355,150)
Proceeds from issuance of stock - - 34,839,030
--------------- --------------- ---------------
Net cash provided by (used by) financing
activities (355,150) - 34,483,880
--------------- --------------- ---------------
Net change in cash and equivalents (370,375) (97,769) 5,424,561
Cash and equivalents, at beginning of period 5,794,936 626,093 -
--------------- --------------- ---------------
Cash and equivalents, at end of period $ 5,424,561 $ 528,324 $ 5,424,561
=============== =============== ===============
Supplemental disclosures of cash flow:
Cash paid for income taxes $ - $ - $ -
=============== =============== ===============
Cash paid for interest $ - $ - $ -
=============== =============== ===============
Non Cash Investing and Financing Activities:
Common stock issued for subsidiary:
Deposits related to option agreement $ 11,000 $ - $ 11,000
Site development costs 778,709 - 778,709
--------------- --------------- ---------------
Total non-cash consideration $ 789,709 $ - $ 789,709
=============== =============== ===============
See accompanying notes to consolidated, condensed financial statements.
5
GREEN PLAINS RENEWABLE ENRERGY, INC.
(A DEVELOMENT STAGE COMPANY)
NOTES TO CONSOLIDATED, CONDENSED FINANCIAL STATEMENTS
(UNAUDTED)
1. DESCRIPTION OF BUSINESS
Green Plains Renewable Energy, Inc. (hereinafter referred to as the
"Company") is a development stage company incorporated on June 29, 2004 under
the laws of the state of Iowa. Green Plains Renewable Energy, Inc. was organized
to construct and operate a 50 million gallon, dry mill, fuel grade ethanol plant
in Shenandoah, Iowa (the "Plant").
The accompanying unaudited conslidated, condensed financial statements
have been prepared in accordance with Securities and Exchange Commission
requirements for interim financial statements. Therefore, they do not include
all of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. The financial
statements should be read in conjunction with the consolidated, condensed
financial statements included in our Form 10-K (the "Annual Report") as filed
with the Securities and Exchange Commission and notes thereto and the risk
factors contained therein for the fiscal year ended November 30, 2005.
The interim financial statements present the conslidated, condensed
balance sheet, statements of operations, stockholders' equity and cash flows of
Green Plains Renewable Energy, Inc. The financial statements have been prepared
in accordance with accounting principles generally accepted in the United
States.
The interim financial information is unaudited. In the opinion of
management, all adjustments necessary to present fairly the financial position
of the Company as of February 28, 2006, and the results of operations and cash
flows presented herein, have been included in the financial statements. Interim
results are not necessarily indicative of results of operations for the full
year.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
2. SUMMARY OF SIGNIFICANT POLICIES
Fixed assets - Fixed assets are stated at cost less accumulated
depreciation. Depreciation is provided principally on the straight-line method
over the estimated useful lives of the assets which is primarily 3 years. The
cost of repairs and maintenance is charged to expense as incurred. Expenditures
for property betterments and renewals are capitalized. Upon sale or other
disposition of a depreciable asset, cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected in operating income
or loss.
Recoverable rail line costs - The Company was required by the railroad
to pay the cost to renovate the spur rail line running from Red Oak, Iowa to
Shenandoah, Iowa and then to its plant. The Company's shipping contract with the
railroad provides that the railroad will rebate to the Company the cost of
renovating the spur line on a per rail car load basis. If the Company places
sufficient cars on the rail line it will be reimbursed $50 to $150 per rail car
up to a maximum of $3,500,000. This rebate will be recorded as a reduction of
the cost of the rail line until the full amount has been recovered. The
agreement also provides that if the rail line is sold by the railroad, the
Company will be repaid the unrecovered portion of the rail line costs.
The Company periodically evaluates whether events and circumstances
have occurred that may warrant revision of the estimated useful life of fixed
assets or whether the remaining balance of fixed assets should be evaluated for
possible impairment. The Company uses an estimate of the related undiscounted
cash flows over the remaining life of the fixed assets in measuring their
recoverability.
6
2. SUMMARY OF SIGNIFICANT POLICIES (CONTINUED)
Stock based compensation - The Company applies SFAS No. 123 Accounting
for Stock-Based Compensation for all compensation related to stock, options or
warrants. SFAS 123 requires the recognition of compensation cost using a fair
value based method whereby compensation cost is measured at the grant date based
on the value of the award and is recognized over the service period, which is
usually the vesting period. The Company uses the Black-Scholes pricing model to
calculate the fair value of options and warrants issued to both employees and
non-employees. Stock issued for compensation is valued using the market price of
the stock on the date of the related agreement.
Principles of consolidation - The accompanying financial statements
include the accounts of the Company and its wholly owned subsidiary, Superior
Ethanol, LLC from its acquisition on February 22, 2006.
The Company granted no warrants or options for compensation for the
period ended February 28, 2006.
3. STOCKHOLDERS' EQUITY
In July 2004, the Company issued 400,000 and 150,000 shares of common
stock to the founders of the Company for cash and services, respectively. The
shares were issued in consideration of cash and services totaling $100,000 and
$37,500, respectively.
In August, October and November 2004, the Company issued 73,000 shares
of common stock to directors for cash totaling $182,500.
In August, September, October and November 2004, the Company issued
142,000 shares of common stock to various non-related individuals and entities
for cash totaling $355,000.
In November 2005, the Company issued 3,445,990 shares of common stock
to various non-related individuals and entities for cash totaling $34,459,900.
In November 2005, the Company issued 5,000 shares of common stock to a
director for services valued at $50,000 or $10 per
share.
In January 2006, the Company issued 5,000 shares of common stock to an
engineering firm for services valued at $50,000 or $10 per share.
In February 2006, the Company issued 100,000 shares to a director in
exchange for 100% ownership in Superior Ethanol, LLC. Superior Ethanol, LLC has
cash of approximately $210,000 in its accounts, holds options on real estate,
property tax abatements and other assets in an area where the Company intends to
build an additional ethanol plant in Iowa.
4. COMMITMENTS AND CONTINGENCIES
In October 2005, the Company entered into an agreement with Fagen
Engineering for design services for the Phase I and II Pre Engineering work to
be done at the Plant site by the Company, prior to turning the site over to
Fagen, Inc. for the construction of the Plant itself. The Company agreed to pay
Fagen Engineering a lump sum fee for said engineering. However, said amount is
included as part of the total cost of the Plant itself, as outlined in the
Design Build Contract we have entered into with Fagen, Inc., which is
anticipated to be $55,881,454. Therefore, the cost of the pre-engineering will
be deducted from the total cost of Plant once we pay for the pre-engineering
work. All payments are due upon receipt, and the Company is to be billed as work
is completed. As of February 28, 2006, the Company had paid $27,750 of the total
amount to be billed.
7
4. COMMITMENTS AND CONTINGENCIES (CONTINUED)
In October 2005, the Company entered into an agreement with a company
for air permitting and a storm water runoff plan for $11,000. The Company later
hired the same consulting company to perform additional work in connection with
other permits and notices needed for construction for additional nominal
amounts. All payments are due upon receipt, and the Company is to be billed as
work is completed. As of February 28, 2006, the Company had paid $15,645 of the
total amount to be billed.
The Company entered into a construction agreement dated January 13,
2006, with Fagen Inc., under which Fagen, Inc. will provide all work and
services in connection with the engineering, design, procurement, construction
startup, performances tests, training for the operation and maintenance of its
Plant and provide all material, equipment, tools and labor necessary to complete
the Plant. As consideration for the services to be performed, Fagen, Inc. will
be paid $55,881,454, subject to adjustments. The Company is required to pay an
initial payment of $5,000,000, less retainage, at the time of the notice to
proceed. The Company is required to make payments to Fagen, Inc. based upon
monthly applications for payment.
On February 6, 2006, we entered into a Master Loan Agreement,
Construction and Term Loan Supplement, Construction and Revolving Term Loan
Supplement, Security Agreement and Real Estate Mortgage with Farm Credit
Services of America, FLCA whereby the lenders will loan up to $47,000,000. The
loan proceeds are to partially finance construction of the Plant and to provide
funding for working capital purposes. The Plant is to be in production by no
later than May 1, 2007 and construction costs are not to exceed an aggregate of
$71,000,000, net of refundable sales taxes. The loan is comprised of a
$30,000,000 amortizing term loan and a $17,000,000 revolving term facility. The
interest rate on the loan will be LIBOR plus 335 Basis Points. The rate of
interest can then be adjusted downward if certain performance provisions are
achieved under the terms of the loan agreement.
The amortizing term loan is available for advances until July 1, 2007.
Principal payments are to commence with $1,200,000 due November 20, 2007, and
each quarter thereafter with a final maturity on November 20, 2013 at the
latest. In addition, for fiscal years ending in 2007 and thereafter, we are also
required to make a special payment equal to 65% of the available (if any) free
cash flow from operations, not to exceed $2,000,000 per year, and provided,
however, that if such payments would result in a covenant default under the Loan
Agreements, the amount of the payments shall be reduced to an amount which would
not result in a covenant default. The free cash flow payments are discontinued
when the aggregate total received from such payments exceeds $8,000,000. The
interest rate on the loan will be LIBOR plus 335 Basis Points. The rate of
interest can then be adjusted downward if certain performance provisions are
achieved under the terms of the loan agreement. . The revolving term loan is
available for advances throughout the life of the commitment. This loan requires
semi-annual $2,400,000 payments or step-downs of the commitment to commence on
the first day of the month beginning approximately six months after repayment of
the term loan, by May 1, 2014 at the latest with a final maturity no later than
November 1, 2017.
In April of 2005, we were awarded a $300,000 zero interest loan, and a
$100,000 forgivable loan (grant) by the State of Iowa. We signed that agreement
in August of 2005. However, we could not receive the funds until the other
funding for the Plant had been secured (equity and debt financing). On March 8,
2006, the $400,000 was receipted into the accounts of the Company. We have
agreed to pay the $300,000 loan back in installments of $5,000 per month over a
60 month period. The first payment on the $300,000 loan is due on October 1,
2006.
In February of 2006, we entered into an agreement with Mathiowitz
Construction to do the grading and dirt work at the site in Shenandoah, Iowa to
prepare the site for Fagen so construction on the Plant could commence. That
contract was for approximately $1.75 million. We will be billed as the work
progresses.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of our
condensed results of operations and financial condition. The discussion contains
forward-looking statements that involve risks and uncertainties. Actual events
or results may differ materially from those indicated in such forward-looking
statements. The discussion should be read in conjunction with the financial
statements and accompanying notes included herewith, our Annual Report for the
year ended September 30, 2005, that was previously filed with the SEC, the
financial statements included therewith and notes thereto and the risk factors
contained therein.
Overview
We are a start-up company in development stage which was formed for the
purpose of building a plant to produce ethanol and animal feed products in
Shenandoah, Iowa (the "Plant"). We do not expect to operate at a profit before
the ethanol Plant is completely constructed and operational.
For the 3 month period ended February 28, 2006, we realized a net
income of $11,828.Our net income for the three months ended February 28, 2006
resulted from $135,639 in interest income earned from funds raised in our public
offering less $123,811 in operating expenses. Our operating expenses related
primarily to general and administrative costs, consulting costs, costs
associated with various permits needed to build the Plant, and payments made to
Fagen Engineering for the Phase I and II Pre-engineering work. We have incurred
an accumulated loss of $435,921 from inception (June 29, 2004) through February
28, 2006.
We believe we will incur significant losses from this time forward
until we are able complete construction of our proposed Plant in Shenandoah and
commence operations. We also have options to acquire property in Atlantic, Iowa
and Dickinson County, Iowa, where we considering constructing two additional
ethanol plants. We anticipate that these will both be 50 to 100 million gallon
plants. However, there is no assurance that we will be successful in our efforts
to build and operate an ethanol Plant in Shenandoah or elsewhere. Even if we
successfully meet all of these objectives and begin operations of an ethanol
Plant(s), there is no assurance that we will be able to operate profitably.
We raised gross proceeds of $34,459,900 in our initial public offering
that closed in November 2005. We expect that the Shenandoah project will cost
approximately $82.6 million. We raised approximately $637,500 in seed capital
prior to commencing our public offering. We entered into loan arrangements
whereby Farm Credit Services of America, FLCA and other participating lenders
have agreed to loan us up to $47,000,000 to use for construction costs and
working capital. Therefore, we have the necessary funding to commence
construction of the Shenandoah Plant. However, to build at the other sites, we
will need to raise additional capital. We intend to raise the needed equity
through public or private offerings of our securities and/or by borrowing
additional funds. There can be no assurance given that we will be able to
acquire the funding necessary for these additional projects at reasonable terms
or at all.
Representatives from Fagen Inc., our contractor, have informed the
Company that the 50 million gallon per year Plant that we intend to build in
Shenandoah will consume on an annual basis approximately 18 million bushels of
locally grown corn and annually produce approximately 50 million gallons of
fuel-grade, denatured ethanol, and approximately 160,000 tons of DDGS on a dry
basis. We have hired RPMG of Belle Plaine, MN, an independent broker to sell our
ethanol and plan to do the same to sell our DDGS. This Plant will be located in
Shenandoah, Iowa, an area where we believe there are over 200 hundred thousand
cattle on feeder lots within a 50 mile radius of the Plant. We believe we can
sell a portion of our distillers grains in a wet form because of this, which we
anticipate will save us a significant amount of money because we will not have
to dry the grain before selling it.
Additionally, in discussions with representatives from Fagen, Inc. we
have been informed that the Plant in Shenandoah will produce approximately 148
thousand tons of carbon dioxide that may be recovered on an annual basis. While
we intend to have discussions with several companies regarding construction of a
9
facility to capture raw carbon dioxide prior to completion of the Plant, we
presently have no agreement with any third party to capture or market the raw
carbon dioxide, and the market may be too saturated in Iowa to recover the
carbon dioxide profitably. We therefore may choose to vent off the C0(2) and may
have no market for it of any kind.
The Plant lies adjacent to a spur line of the BNSF Railway Company
(BNSF). However, the spur (the "SPUR") on which the Plant will be located is
currently closed and needs to be upgraded to meet HAZMAT (Hazardous Materials)
standards. Approximately 20 miles of the spur will need to be upgraded. On
January 26, 2006, we entered into an Allowance Contract (the "Allowance
Agreement") with BNSF which included our agreement with BNSF to renovate and
maintain approximately 20 miles of track on the SPUR.
Upon signing the Allowance Agreement, we paid $3.5 million to BNSF for
the SPUR renovation. The renovation work is to be done by BNSF, and BNSF will
own, operate and maintain the SPUR, as long as GPRE meets certain annual volume
thresholds (cars placed on the rail) as outlined in the Allowance Agreement. We
are entitled to receive refund payments from BNSF to reimburse us for this
expense, but only to the extent that our usage of the line meets the annual
volume thresholds. There can be no assurance that our usage will meet the annual
volume thresholds or that we will be reimbursed for all or any part of the
renovation costs. If BNSF were to ever sell the line to a third party
(short-line), we would be entitled to repayment by BNSF. However, in the future,
if there is any additional, major, renovation needed to be done to the SPUR, it
is GPRE's responsibility to pay for any such additional, major, renovation. The
Allowance Agreement is for a term expiring on September 14, 2015.
We entered into an agreement with RPMG of Belle Plaine, MN to sell our
ethanol production in February of 2006. We also anticipate that we will have an
agreement with an experienced marketer to sell our animal feed products. We will
be hiring staff to handle the direct operation of the Plant, and currently
expect to employ approximately 35 people. We do not intend to hire a sales staff
to market our products. Third-party marketing agents will coordinate all
shipping.
The following table describes our proposed use of proceeds, based upon
our current cash reserves and loan arrangements. The total use of proceeds is
estimated to be $82,587,384. The actual use of funds is based upon
contingencies, such as the estimated cost of Plant construction, the regulatory
permits required and inventory costs, which are driven by the market. Therefore,
the following figures are intended to be estimates only and the actual use of
funds may vary significantly from the descriptions given below depending on the
contingencies described above. However, we anticipate that any variation in our
use of proceeds will occur in the level of proceeds attributable to a particular
use (as set forth below) rather than a change from one of the uses set forth
below to a use not identified in this report.
Projected Uses and Sources of Funds
Estimated Use of Proceeds
-------------------------
Estimated Sources:
Share Proceeds $ 34,549,884
Zero Interest Loan and Grant from State of Iowa 400,000
Seed Capital 637,500
Term Debt Financing 47,000,000
-------------
Total Estimated Sources of Funds $ 82,587,384
=============
Estimated Uses of Funds:
Plant Construction and Misc. Costs $ 59,926,300
Estimated Site Costs 4,295,000
Estimated Railroad Costs 5,600,000
Estimated Fire Protection/Water Supply Costs 2,216,000
Estimated Rolling Stock Costs 240,000
Estimated Financing Costs and Capitalized Interest 1,402,500
Estimated Pre-Production Period Costs 710,000
Estimated Inventory & Working Capital Costs 8,827,584
-------------
Total Estimated Use of Funds $ 82,587,384
=============
10
The City of Shenandoah awarded us a 15 year property tax abatement that
we would be able to receive if the City annexed the Plant site into its
boundaries. We asked for voluntary annexation into the City limits and were
annexed into the City on February 15, 2006. It is anticipated that it will
result in significant long-term savings.
Plan for the Next 24 Months of Operations
We expect to spend the next 24 months in the design-development and
construction of the Plant at Shenandoah, and thereafter commence production of
ethanol and distillers grains at the Plant. We expect to have sufficient cash on
hand to cover all costs associated with construction of the project, including
but not limited to, utilities, construction, equipment acquisition and site
development. In addition, we expect to have enough cash to cover our costs
through this period, including staffing, office costs, audit, legal, compliance
and staff training. We estimate that we will need approximately $82,587,384 to
complete the project. We also anticipate spending considerable time in our
efforts to build two additional ethanol plants, one near Superior, Iowa and the
other near Atlantic, Iowa. When we acquired Superior Ethanol, it had
approximately $210,000 in cash that we intend to use to fund the work we will
need to do to build at the sites in Superior and Atlantic.
The tables above describing the estimated sources of funds and various
costs associated with the project in Shenandoah and also describe operations at
that site for the next 24 months. These tables are only estimates and actual
expenses could be higher or lower due to a variety of factors described in the
section of our Annual Report entitled "Risk Factors".
Proposed Superior, Iowa and Atlantic, Iowa Ethanol Plants
On February 22, 2006, we acquired all of the outstanding ownership
interest in Superior Ethanol, LLC. Superior has options to acquire at least 135
acres of property in Dickinson County, Iowa, has completed a feasibility study
relating to the construction of an ethanol plant on this site, the site is zoned
as "heavy industrial," the site has been awarded a property tax abatement from
Dickinson County, Iowa, and Superior had approximately $210,000 in cash at
closing. In consideration for the acquisition of Superior as a wholly owned
subsidiary of the Company, we issued 100,000 shares of our restricted common
stock to Brian Peterson, a director of the Company. Prior to the acquisition,
substantially all of Superior was owned by Mr. Peterson.
Operational plans continue to progress on the Superior ethanol plant
project with the builder, the rail engineers, and the utility consultants. We
intend to build a 50 to 100 million gallon ethanol plant at this site. The
location of the plant at the site has been determined, and it is anticipated
that an application for an air permit will be filed with the Iowa Department of
Natural Resources (IDNR) shortly. In Iowa, such approvals usually take 60 to 90
days once filed.
It is anticipated that Agra Construction, a division of Agra Industries
of Merrill, Wisconsin will be the design builder of the plant, although we have
not entered into any binding arrangements with Agra Construction. It is also
anticipated that Delta T will be the technology provider. If we were able to
secure necessary approvals, enter into binding arrangements with our builder and
obtain necessary funding by June 2006, of which there can be no assurance, it is
anticipated that construction could commence by mid to late summer of 2006 with
a completion date in the fall of 2007. It is anticipated that this project will
require approximately $94 million to fund a 50 million gallon plant, and we have
not secured any bank or other funding for this project and there can be no
assurance that we will obtain the necessary funding or approvals. The projected
cost for this plant is higher than the plant being built in Shenandoah because
we anticipate adding a bio-mass burner at the plant in Superior that will be
capable of burning distillers grains to run the plant. However, it will also be
able to operate on natural gas if need be. We believe that burning distillers
grains to operate the plant could result in significant savings to the Company.
11
Condition of Records
We recently hired an experienced general manager who will oversee Plant
construction and manage the Plant in Shenandoah once construction at the site
has been completed. In addition to our general manager, we currently have office
staff comprised of our president, an office worker that assists our president in
our Las Vegas office and an office worker that assists our general manager in
our Shenandoah office. We have also engaged an accountant on a part time basis
that has experience working with public companies, to help us keep our books and
records, with the assistance of our general manager, our president and our CFO.
We intend to hire and train additional staff well before the start of Plant
operations, and we have included an expense allocation for this in our budget.
However, there can be no assurance that we will be able to retain qualified
individuals. It is possible that accounting or other financing functions may not
be performed on time, if at all.
Operating Expenses
We will have operating expenses, such as salaries, for our president,
general manager and other office staff as they are hired. We commenced paying a
salary to our CEO on January 1, 2006 for his full time work on the project and
to our general manager in February, 2006. Along with operating expenses, we
anticipate that we will have significant expenses related to financing and
interest. We have allocated funds in our capital structure for these expenses.
However, there can be no assurance that the funds allocated are sufficient to
cover the expenses. We may need additional funding to cover these costs if
sufficient funds are not retained up-front or if costs are higher than expected.
Results of Operations
For the 3 month period ended February 28, 2006, we realized a net
income of $11,828 compared to a loss of $109,491 in the same quarter of 2005.
Our operating expenses were $123,811 for the 3 month period ended February 28,
2006 compared to $110,714 for the comparable period from the prior year. These
expenses related primarily to general and administrative costs, consulting
costs, costs associated with various permits needed to build the Plant and costs
associated with the Phase I and II Pre engineering work. The increase was
primarily due to increased general and administrative costs, costs associated
with obtaining the needed permits and the work required to prepare the site for
Fagen to commence construction. We expect to hire additional employees as
construction begins on the Plant as we will need a fully trained staff to
operate it once it goes on line. In 2006 our operating expenses were offset by
interest earned on the funds we have invested until they are used in the
construction of our Plant. We earned $135,639 of interest income in 2006
compared to $1,223 in 2005. This interest income will decrease as we pay for the
construction of the Plant. We have not had any revenues through February 28,
2006 and do not expect to have any revenues through the remainder of 2006.
Liquidity and Capital Resources
At February 28, 2006 we had $5,424,561 in cash and equivalents and
$24,599,884 in securities in the form of short-term US Government backed
securities. We anticipate that our working capital requirements for the next
twenty-four months will be as described above. We believe that we have secured
sufficient funding to complete construction and begin operating our Shenandoah
ethanol plant. We believe that we will need to secure approximately $84 million
in new funding to build the proposed ethanol plant in Superior, Iowa, and that
we would need to secure substantial additional funding in an undetermined amount
to build the proposed ethanol plant in Atlantic, Iowa. We have no funding
arrangements in place for the Superior or Atlantic projects and there can be no
assurance that we will obtain funding for these projects or that funding will be
available on advantageous terms.
In furtherance of our business plan, on February 6, 2006, we entered
into a Master Loan Agreement, Construction and Term Loan Supplement,
Construction and Revolving Term Loan Supplement, Security Agreement and Real
Estate Mortgage with Farm Credit Services of America, FLCA (individually and
collectively, the "Loan Agreements"). A participating interest under the Loan
Documents was transferred to CoBank, ACB. Under the Loan Agreements, the lenders
will loan up to $47,000,000. The loan proceeds are to partially finance
construction of the Plant and to provide funding for working capital purposes.
The Plant is to be in production by no later than May 1, 2007 and construction
costs are not to exceed an aggregate of $71,000,000, net of refundable sales
taxes.
12
Loan Commitments and Repayment Terms
The loan is comprised of a $30,000,000 amortizing term loan and a
$17,000,000 revolving term facility.
o Term Loan - This loan is available for advances until July 1,
2007. Principal payments are to commence with $1,200,000 due
November 20, 2007, and each quarter thereafter with a final
maturity on November 20, 2013 at the latest. In addition, for
fiscal years ending in 2007 and thereafter, we are also
required to make a special payment equal to 65% of the
available (if any) free cash flow from operations, not to
exceed $2,000,000 per year, and provided, however, that if
such payments would result in a covenant default under the
Loan Agreements, the amount of the payments shall be reduced
to an amount which would not result in a covenant default. The
free cash flow payments are discontinued when the aggregate
total received from such payments exceeds $8,000,000.
o Revolving Term - This loan is available for advances
throughout the life of the commitment. This loan requires
semi-annual $2,400,000 payments on/step-downs of the
commitment to commence on the first day of the month beginning
approximately six months after repayment of the term loan, by
May 1, 2014 at the latest with a final maturity no later than
November 1, 2017.
Availability of Advances, Interest Rates and Fees
Advances are subject to satisfaction of specified lending conditions.
Advances correlate to budget and construction timeline projections, with
verification of progress by a third-party engineer. The loans will bear interest
at the rate of LIBOR plus 3.35%. We paid a loan origination fee in the amount of
$352,500, there is an annual administration fee in the amount of $25,000,
beginning November 1, 2007, and there is an unused commitment fee equal to 1/2%
of the unused revolving term. Appraisal, inspecting engineer, and title company
insurance and disbursing fees are also at the Company's expense.
Security
As security for the loan, the lenders received a first-position lien on
all personal property and real estate owned by us, including an assignment of
all contracts and rights pertinent to construction and on-going operation of the
Plant.
Representations, Warranties and Covenants
The Loan Agreements contain representations, warranties, conditions
precedent, affirmative covenants (including financial covenants) and negative
covenants. One of these covenants requires that dividends or other distributions
to stockholders be limited to 40% of the profit net of income taxes for each
fiscal year and may be paid only where we are expected to remain in compliance
with all loan covenants, terms and conditions. Furthermore, with respect to the
fiscal years ending in 2008 and thereafter, an additional distribution may be
made to stockholders in excess of the 40% limit for such fiscal year if we have
made the required free cash flow payment for/based on such fiscal year, and will
thereafter remain in compliance with all loan covenants, terms and conditions on
a pro forma basis net of said potential additional payment. There can be no
assurance that we can remain in compliance with all loan covenants.
13
Contractual Obligations
Our contractual obligations as of February 28, 2006 were as follows:
Contractual Obligations Payments Due by Period
-------------------------------------------------------------
Less Than 1
Total Year 1-3 Years 3-5 Years Thereafter
----- ----------- --------- --------- ----------
Long-Term Debt Obligations $ 300,000 $300,000
Capital Lease Obligations
Operating Lease Obligations
Purchase Obligations
Other Long-Term Liabilities $57,631,454 $1,750,000(1) $55,881,454(2)
Total $57,931,454 $1,750,000 $55,881,454
-------------------
(1) Agreement with Mathiowitz Construction to do the grading and dirt work at
the site in Shenandoah, Iowa.
(2) Design Build Contract with Fagen, Inc. for the site in Shenandoah, Iowa.
This amount is anticipated to be paid over a twelve to sixteen month period
beginning in April 2006.
Critical Accounting Policies
The Company applies SFAS No. 123 Accounting for Stock-Based
Compensation for all compensation related to stock, options or warrants. SFAS
123 requires the recognition of compensation cost using a fair value based
method whereby compensation costs is measured at the grant date based on the
value of the award and is recognized over the service period, which is usually
the vesting period. The Company uses the Black-Scholes pricing model to
calculate the fair value of options and warrants issued to both employees and
non-employees. Stock issued for compensation is valued using the market price of
the stock on the date of the related agreement.
The Company granted no warrants or options for compensation for the
period ended February 28, 2006.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future material effect on our financial
condition, results of operations or liquidity.
Recent Accounting Pronouncements
The Company has not adopted any new accounting policies that would have
a material impact on the Company's financial condition, changes in financial
conditions or results of operations.
Grant and Government Programs
In April of 2005 we were awarded a $300,000 zero interest loan and a
$100,000 forgivable loan (grant) from the State of Iowa. These funds became
available to us once we closed on our financing, and were receipted into the
accounts of the Company in March of 2006. We believe that we are eligible for
and anticipate applying for other state and federal grant, loan and forgivable
loan programs. Most grants that may be awarded to us are considered paid-in
capital for tax purposes and are not taxable income. Although we may apply under
several programs simultaneously and may be awarded grants or other benefits from
more than one program, it must be noted that some combinations of programs are
mutually exclusive. Under some state and federal programs, awards are not made
to applicants in cases where construction on the project has started prior to
the award date. There is no guarantee that applications will result in awards of
grants or loans. With the exception of the $300,000 zero interest loan and the
$100,000 forgivable loan (grant) described above, we are not depending on the
award of any such grants as part of our funding of the Project. However, we may
be eligible to receive such grants. If we do, the amount of money we will have
to borrow may be reduced by that amount. There can be no assurance that we will
receive any funding under any federal or state funding initiative.
14
Forward-Looking Statements
Throughout this report, we make "forward-looking statements."
Forward-looking statements include the words "may," "will," "estimate,"
"continue," "believe," "expect" or "anticipate" and other similar words. These
forward-looking statements generally relate to our plans and objectives for
future operations and are based upon management's reasonable estimates of future
results or trends. Although we believe that our plans and objectives reflected
in or suggested by such forward-looking statements are reasonable, we may not
achieve such plans or objectives. Actual results may differ from projected
results due, but not limited, to unforeseen developments, including developments
relating to the following:
o The availability and adequacy of our cash flow to meet its
requirements, including payment of loans;
o Economic, competitive, demographic, business and other conditions in
our local and regional markets;
o Changes or developments in laws, regulations or taxes in the ethanol,
agricultural or energy industries;
o Actions taken or omitted to be taken by third parties including our
suppliers and competitors, as well as legislative, regulatory,
judicial and other governmental authorities;
o Competition in the ethanol industry;
o The loss of any license or permit;
o The loss of our plant due to casualty, weather, mechanical failure or
any extended or extraordinary maintenance or inspection that may be
required;
o Changes in our business strategy, capital improvements or development
plans;
o The availability of additional capital to support capital
improvements and development; and,
o Other factors discussed under "Risk Factors" in our Registration
Statement and prospectus.
You should read this report completely and with the understanding that
actual future results may be materially different from what we expect. The
forward looking statements specified in this report have been compiled as of the
date of this report and should be evaluated with consideration of any changes
occurring after the date of this report. We will not update forward-looking
statements even though our situation may change in the future and we assume no
obligation to update any forward-looking statements, whether as a result of new
information, future events or otherwise.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a start-up company in development stage, which was formed for
the purpose of building a Plant to produce ethanol and animal feed products in
southwestern Iowa, and anticipate locating other sites and building other plants
in other parts of Iowa or other states within the corn-belt. We also intend to
aggressively pursue that acquisition of existing ethanol plants that are already
in operation. However, we are not presently conducting operations and are not
presently subject to market risks. If and when we begin Plant operations, we
will be exposed to the impact of market fluctuations associated with commodity
prices and interest rates as discussed below. We do not expect to have exposure
to foreign currency risk as all of its business is expected to be conducted in
U.S. dollars.
15
Commodity Price Risk
We expect to produce ethanol and its co-product, distiller's dried
grains with solubles (DDGS), from corn, and our business will be sensitive to
changes in the price of corn. The price of corn is subject to fluctuations due
to unpredictable factors such as weather, total corn planted and harvested
acreage, changes in national and global supply and demand, and government
programs and policies. We also expect to use natural gas in the ethanol and DDGS
production process, and our business will be sensitive to changes in the price
of natural gas. The price of natural gas is influenced by such weather factors
as extreme heat or cold in the summer and winter, in addition to the threat of
hurricanes in the spring, summer and fall. Other natural gas price factors
include the U.S. domestic onshore and offshore rig count and the amount of U.S.
natural gas in underground storage during both the injection and withdrawal
seasons.
We anticipate that we will attempt to reduce the market risk associated
with fluctuations in the price of corn and natural gas by employing a variety of
risk management strategies. Strategies include the use of derivative financial
instruments such as futures and options initiated on the Chicago Board of Trade
and/or the New York Mercantile Exchange, as well as the daily cash management of
our total corn and natural gas ownership relative to monthly demand for each
commodity, which may incorporate the use of forward cash contracts or basis
contracts.
We may hedge corn with derivative instruments including futures and
options contracts offered through the Chicago Board of Trade. Forward cash corn
and basis contracts may also be utilized to minimize future price risk.
Similarly, natural gas is hedged with futures and options contracts offered
through the New York Mercantile Exchange. Basis contracts may also be utilized
to minimize future price risk.
Gains and losses on futures and options contracts used as economic
hedges of corn inventory, as well as on forward cash corn and basis contracts,
are recognized as a component of cost of revenues for financial reporting on a
monthly basis using month-end settlement prices for corn futures on the Chicago
Board of Trade. Corn inventories are marked to fair value using market based
prices so that gains or losses on the derivative contracts, as well as forward
cash corn and basis contracts are offset by gains or losses on inventories
during the same accounting period.
Gains and losses on futures and options contracts used as economic
hedges of natural gas, as well as basis contracts, are recognized as a component
of cost of revenues for financial reporting on a monthly basis using month-end
settlement prices for natural gas futures on the New York Mercantile Exchange.
The natural gas inventories hedged with these derivatives or basis contracts are
valued at the spot price of natural gas, plus or minus the gain or loss on the
futures or options positions relative to the month-end settlement price on the
New York Mercantile Exchange.
While our hedging activities may have a material effect on future
operating results or liquidity in a specific quarter of its fiscal year,
particularly prior to harvest, management does not believe that such activities
will have a material, long-term effect on future operating results or liquidity.
Item 4. Controls and Procedures
The Company has evaluated, with the participation of the Company's
Chief Executive Officer and Chief Financial Officer, the effectiveness of the
design and operation of the Company's disclosure controls and procedures as of
February 28, 2006, pursuant to Exchange Act Rule 13a-15. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective. There have
been no significant changes in internal controls or in other factors that could
significantly effect internal controls subsequent to the date of our most recent
evaluation.
16
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 1A. Rick Factors
There have been no material changes from the risk factors previously
disclosed in our annual report on Form 10-K for the year ended November 30,
2005.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuance of Securities
In November 2005, we issued 5,000 shares of restricted common stock to
Gary Thien for services rendered to the Company. Mr. Thien at that time was a
Director of the Company and its Vice President. He was, therefore, deemed a
sophisticated, accredited investor. Mr. Thien located the site in Shenandoah and
had spent a significant amount of his time working on the Company's behalf from
the later part of 2004 to the present. The shares were issued to Mr. Thien by
the Board for work Mr. Thien had done for and on behalf of the Company. The sale
of these shares of common stock was exempt from registration pursuant to Rules
504, 505 and 506 of Regulation D and Sections 4(2) and 4(6) of the Securities
Act of 1933, as amended. We did not use an underwriter or pay any commissions in
connection with this transaction. Mr. Thien's term as a director of the Company
expired at the 2006 annual shareholders meeting and he no longer is affiliated
with the Company except as a shareholder.
In January 2006, we issued 5,000 shares of restricted common stock to
Antioch International, Inc., an accredited and sophisticated investor, in lieu
of $50,000 (fifty thousand dollars) in fees that were owed to Antioch for
designing the rail layout that we will need to build at the Plant in Shenandoah,
which will allow us to effectively transport our ethanol and distillers grains.
The sale of these shares of common stock was exempt from registration pursuant
to Rules 504, 505 and 506 of Regulation D and Sections 4(2) and 4(6) of the
Securities Act of 1933, as amended. We did not use an underwriter or pay any
commissions in connection with this transaction.
On February 22, 2006, we issued 100,000 shares of common stock to Brian
Peterson in consideration for the acquisition of Superior Ethanol, LLC. Mr.
Peterson is a director of the Company. The sale of these shares of common stock
was exempt from registration pursuant to Rules 504, 505 and 506 of Regulation D
and Sections 4(2) and 4(6) of the Securities Act of 1933, as amended. We did not
use an underwriter or pay any commissions in connection with this transaction.
Use of Proceeds
The Securities and Exchange Commission declared our registration
statement on Form S-1 (SEC Registration No. 333-121321) effective on March 9,
2005. We commenced our initial public offering shortly thereafter. Our initial
public offering was for the sale of up to 3,800,000 shares of our common stock
at $10.00 per share. Each share purchased included a warrant to purchase 1/4 of
an additional share of common stock from the Company at a purchase price of
$30.00 per share. The offering ranged from a minimum aggregate offering amount
of $29,667,000 to a maximum aggregate offering amount of $38,000,000. Our
registered offering and escrow agreement required that we raise the $29,667,000
in proceeds by November 29, 2005 and secure a letter of commitment for debt
financing by November 29, 2005, both of which we timely accomplished.
On November 15, 2005, we closed the offering prior to the sale of the
maximum number of registered shares. The net proceeds to the Company from our
offering were approximately $34,532,408. This is the amount of money raised in
the offering, ($34,459,900), less $11,619 that was paid to the escrow agent for
their services, less $17,476 in federal and state filing fees, less $227,563 in
17
commissions (7%) paid to Smith Hayes Financial Services for the money raised by
them in the offering, plus $329,166 that was earned as interest while the money
was held in escrow. We sold the shares without the assistance of an underwriter.
The following is a breakdown of shares registered and shares sold in the
offering:
Number of Shares Aggregate Price of Aggregate Price
Registered for Sale Shares Offered Shares Sold of Shares Sold
------------------- -------------- ----------- --------------
3,800 $38,000,000 3,445,990 $34,459,900
On November 2005 we began releasing funds from escrow. The following
table describes our use of net offering proceeds through February 28, 2006:
Railroad $ 3,500,000
Real Property Acquisition $ 681,461
Debt Financing Fees $ 354,650
Miscellaneous Costs $ 225,889
-------------
Total $ 4,762,000
=============
All of the foregoing payments were direct or indirect payments
persons or entities other than our directors, officers, or unit holders owning
10% or more of our shares.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the security holders during the
quarterly period covered by this report.
Item 5. Other Information
We held our annual meeting of stockholders on March 27, 2006, at which
meeting five director nominees were submitted for approval by the shareholders.
At the annual meeting, Dave Hart and Wayne Hoovestol were nominated for election
to the class of directors whose term expires at the 2008 annual meeting of
shareholders and Dan Christensen, Steven Nicholson, and Robert Vavra were
nominated for election to the class of directors whose term expires at the 2009
annual meeting of shareholders. The shareholders elected Mr. Hart by a vote of
2,734,990 for and 26,000 withheld authority, Mr. Hoovestol by a vote of
2,731,990 for and 29,000 withheld authority, and Mr. Christensen by a vote of
2,743,490 for and 17,500 withheld authority, Mr. Nicholson by a vote of
2,734,990 for and 26,000 withheld authority, and Mr. Vavra by a vote of
2,739,490 for and 21,000 withheld authority. The terms of Barry Ellsworth, Brian
Peterson, and Hersch Patton, who were not up for election at the 2006 annual
meeting of shareholders, expire at the 2007 annual meeting of shareholders.
Item 6. Exhibits
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
3(i).1 Amended and Restated Articles of Incorporation of the Company
(Incorporated by reference to Exhibit 3(i).1 of the Company's
Registration Statement on Form S-1 filed December 16, 2004,
File No. 333-121321)
3(ii).1 Bylaws of the Company (Incorporated by reference to Exhibit
3(ii).1 of the Company's Registration Statement on Form S-1
filed December 16, 2004, File No. 333-121321)
18
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
10.1 Option Agreement on Hilger West Property, by and between the
Company and Alberta A. Bryon, dated November 12, 2004
(Incorporated by reference to Exhibit 10.1 of the Company's
Registration Statement on Form S-1 filed December 16, 2004,
File No. 333-121321)
10.2 Option Agreement on Hilger East Property, by and between the
Company and Alberta A. Bryon, dated October 20, 2004
(Incorporated by reference to Exhibit 10.2 of the Company's
Registration Statement on Form S-1 filed December 16, 2004,
File No. 333-121321)
10.3 Letter of Intent relating to the purchase of real property
from Shenandoah Chamber & Industry Association, dated November
12, 2004 (Incorporated by reference to Exhibit 10.3 of the
Company's Registration Statement on Form S-1 filed December
16, 2004, File No. 333-121321)
10.4 Letter Agreement by and between the Company and U.S. Energy,
Inc., dated October 5, 2004 (Incorporated by reference to
Exhibit 10.5 of the Company's Registration Statement on Form
S-1 filed December 16, 2004, File No. 333-121321)
10.5 Agreement to Extend Expiration Date by and between the Company
and Alberta A. Bryon, dated October 20, 2005 (Incorporated by
reference to Exhibit 10.6 of the Company's Registration
Statement on Form S-1/A filed February 4, 2005, File No.
333-121321)
10.6 Letter of Intent by and between the Company and the City of
Shenandoah, dated December 16, 2004 (Incorporated by reference
to Exhibit 10.7 of the Company's Registration Statement on
Form S-1/A filed February 4, 2005, File No. 333-121321)
10.7 Martin D. Ruikka, dba PRX Geographic(TM) Quotation, dated May
3, 2004 (Incorporated by reference to Exhibit 10.8 of the
Company's Registration Statement on Form S-1/A filed February
4, 2005, File No. 333-121321)
10.8 Martin D. Ruikka, dba PRX Geographic(TM) Invoice, dated
January 1, 2005 (Incorporated by reference to Exhibit 10.9 of
the Company's Registration Statement on Form S-1/A filed
February 4, 2005, File No. 333-121321)
10.9 Master Loan Agreement, dated January 30, 2006, by and between
the Company and Farm Credit Services of America, FLCA
(Incorporated by reference to Exhibit 10.1 of the Company's
Current Report on Form 8-K, dated February 6, 2006)
10.10 Construction and Term Loan Supplement, dated January 30, 2006,
by and between the Company and Farm Credit Services of
America, FLCA (Incorporated by reference to Exhibit 10.2 of
the Company's Current Report on Form 8-K, dated February 6,
2006)
10.11 Construction and Revolving Term Loan Supplement, dated January
30, 2006, by and between the Company and Farm Credit Services
of America, FLCA (Incorporated by reference to Exhibit 10.3 of
the Company's Current Report on Form 8-K, dated February 6,
2006)
10.12 Security Agreement, dated January 30, 2006, by and between the
Company and Farm Credit Services of America, FLCA
(Incorporated by reference to Exhibit 10.4 of the Company's
Current Report on Form 8-K, dated February 6, 2006)
10.13 Administrative Agency Agreement, dated January 30, 2006, by
and between the Company, Farm Credit Services of America, FLCA
and CoBank, ACB (Incorporated by reference to Exhibit 10.5 of
the Company's Current Report on Form 8-K, dated February 6,
2006)
10.14 Real Estate Mortgage and Financing Statement, dated January
30, by and between the Company and Farm Credit Services of
America, FLCA (Incorporated by reference to Exhibit 10.14 of
the Company's Annual Report on Form 10-K, dated November 30,
2005)
19
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
10.15 Lump Sum Design Build Agreement, dated January 13, 2006, by
and between the Company and Fagen, Inc. (Incorporated by
reference to Exhibit 10.15 of the Company's Annual Report on
Form 10-K, dated November 30, 2005)
10.16 Allowance Contract, by and between the Company and BNSF
Railway Company, dated January 26, 2006 (Incorporated by
reference to Exhibit 10.14 of the Company's Annual Report on
Form 10-K, dated November 30, 2005)
10.17 Share Exchange Agreement, dated February 22, 2006, by and
between the Company and the parties identified therein
(Incorporated by reference to Exhibit 10.14 of the Company's
Annual Report on Form 10-K, dated November 30, 2005)
31.1 Certification by Barry A. Ellsworth under Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification by Dan Christensen under Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of Barry A. Ellsworth pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Dan Christensen pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREEN PLAINS RENEWABLE ENERGY, INC.
Date: April 4, 2006 By /s/ Barry A. Ellsworth
---------------------------------
Barry A. Ellsworth
President
(Principal Executive Officer)
Date: April 4, 2006 By /s/ Dan Christensen
---------------------------------
Dan Christensen
Treasurer
(Principal Financial Officer)
20