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Use of Proceeds We estimate that our net proceeds from the sale of shares of our common stock in this offering will be approximately $ million, after deducting underwriting discounts and commissions and our estimated offering expenses. This estimate assumes a public offering price of $ per share, which is the mid-point of the offering price range indicated on the cover of this prospectus. Each $1 increase (decrease) in the public offering price per share would increase (decrease) our net proceeds, after deducting estimated underwriting discounts and commissions, by $ (assuming no exercise of the underwriters' over-allotment option). We will not receive any of the proceeds from any sale of shares of our common stock by the selling stockholders. We intend to use approximately $195 million of the net proceeds we receive from this offering to finance a portion of the construction costs of our planned ethanol plants to be built in Mt. Vernon, Indiana, Tipton, Indiana and McLeansboro, Illinois. The amounts and timing of these expenditures will depend on numerous factors, including the federal, state and local permitting and licensing process, the construction schedules of our contractors, the delivery of goods and equipment by our suppliers and various other considerations typically associated with large-scale construction projects. We expect that the remainder of the construction costs of our planned ethanol plants to be built in Mt. Vernon, Indiana, Tipton, Indiana and McLeansboro, Illinois will be funded through future debt funding arrangements. We intend to use approximately $66 million of the net proceeds we receive in this offering to redeem subordinated notes issued to ACSAB, LLC, Laminar Direct Capital L.P. and USRG ASA, LLC, which are three of our current stockholders, or their affiliates in the amounts of , and respectively. In February 2006, we obtained a $62.5 million commitment to purchase subordinated notes which total amount was dedicated to financing a portion of the construction costs of our planned Linden, Albion and Bloomingburg plants. (The remainder of the amount necessary to fund the construction costs of our planned Linden, Albion and Bloomingburg plants will come from equity contributions from our existing equity holders and borrowings under our senior credit facility. See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.") As of September 30, 2006, we had issued an aggregate principal amount of $41.4 million of subordinated notes and used the proceeds thereof to fund the continuing construction of such plants. We anticipate that at the completion of this offering, we will have issued an aggregate principal amount of $62.5 million of subordinated notes. The subordinated notes bear interest at 17% and mature in February 2015. The subordinated notes may be prepaid at our option at a price equal to the principal amount of such subordinated note, plus the accrued interest on the amount prepaid, plus a prepayment fee on the principal amount of the subordinated notes so prepaid of 4% until February 6, 2007, declining by 1% on each anniversary of such date until February 6, 2011. We expect that we will repay these subordinated notes at the closing of this offering and will, therefore, be subject to such redemption premium. Upon redemption, the commitment to purchase subordinated notes will terminate and we will no longer be able to borrow funds under this commitment. For more information about the subordinated notes, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources." We intend to use approximately $11 million of the net proceeds we receive from this offering to make payments to ACSAB, LLC, Laminar Direct Capital L.P., USRG ASA, LLC and ASAlliances Holdings, LP, which are four of our current stockholders, or their affiliates in the amounts of , , and , respectively, in connection with the termination of agreements relating to the payment of annual management fees and development fees. These payments will be recorded as a selling, general and administrative expense in our financial statements. In February 2006, we entered into a fee agreement which provided for the payment to ACSAB, LLC, Laminar Direct Capital L.P. and USRG ASA, LLC or their affiliates of an annual management fee of $1.65 million for the first six years and $750,000 thereafter. In addition, in February 2006 we entered into a fee agreement with ASAlliances Holdings, LP which provides for the payment to such stockholder of an annual $750,000 development fee for a period of five years. We have agreed to terminate these agreements at the closing of this offering in return for an $11 million payment to such stockholders or their affiliates. We intend to use approximately $8 million of the net proceeds we receive from this offering to repay certain outstanding indebtedness related to bridge notes we have issued to ACSAB, LLC, Laminar Direct Capital L.P., USRG ASA, LLC, Fagen, Inc. and ASAlliances Holdings, LP, which are five of our current stockholders, or their affiliates in the amounts of , , , , and respectively. In September 2006, we obtained a commitment to purchase up to $7.5 million of bridge notes from such stockholders or their affiliates. As of , 2006, we have issued $ million in aggregate principal amount of notes and used the proceeds thereof primarily to fund the continuing development of our planned Mt. Vernon, Tipton and McLeansboro plants. In addition, we used a small portion of such proceeds to fund certain offering-related expenses. The notes bear interest on the outstanding principal amount at a rate of 12% per annum. Upon repayment of the notes, we are required to make an additional interest payment in order to make the interest paid by us equal to an amount that will generate a 35% annualized internal rate of return on the notes. We anticipate that as of the closing of the offering, we will have issued $7.5 million in aggregate principal amount of bridge notes. The notes mature in September 2007. We intend to use approximately $ million of the net proceeds we receive from this offering to repay all outstanding promissory notes that we will issue to the holders of our Class A and Class B units in the Conversion. Payments will be made to ACSAB, LLC, USRG ASA, LLC, Cargill Biofuels Investments, LLC, D. E. Shaw Laminar Portfolios, L.L.C., FDC Ethanol, LLC and Midwest First Financial, Inc. in the amounts of , , , , and , respectively, for the repayment of such notes. The notes to be issued to the holders of Class A units will bear interest at 10% per annum and mature on . The notes to be issued to the holders of Class B units will bear no interest and mature on . The remainder of the net proceeds from this offering, if any, will be used for general corporate purposes. Pending such uses, we will invest the net proceeds of this offering in investment grade, interest bearing securities.