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8-K - FORM 8-K - FIRST UNITED ETHANOL LLC | c05155e8vk.htm |
EX-99.2 - EXHIBIT 99.2 - FIRST UNITED ETHANOL LLC | c05155exv99w2.htm |
Exhibit 99.1
For an extended amount of time, First United Ethanol, LLCs Board of Directors has been discussing
a decision to deregister as a public company with the U.S. Securities and Exchange Commission. As
an SEC reporting company, FUEL must report all of its financial and otherwise significant
information to the public. This information is available to our competitors which may be helpful
in challenging our business operations and market share. Terminating our Companys public
reporting obligations will help to protect this sensitive information. FUEL will also be relieved
from having to report possible but not probable issues the company could face, thereby eliminating
confusion regarding the stability of FUEL as a viable company. The companys annual cost of SEC
compliance and reporting is currently estimated at $400,000 per year, and continues to escalate.
The choice to deregister as an SEC company will save our company and its stockholders a significant
amount of money. It will reduce the burden on our management and employees which arises from
increasingly stringent SEC reporting requirements, thus allowing management to focus on effectively
managing the company. Most importantly, it will allow us to protect proprietary information that
will allow us to manage FUEL more efficiently.
The decision to deregister will be voted on by all stockholders. We will hold a specially
called members meeting this winter. Prior to the meeting, you will receive a proxy statement
explaining the proposed amendments to the companys operating agreement needed to effect this
deregistration. To deregister as a company, we must reclassify our units into significantly
different classes of stock. After much discussion and thought, FUELs Board of Directors met on
August 11, 2010 and approved the reclassification of FUELs membership units into three separate
classes. Within the next few days, you will receive a letter explaining the proposed classes of
stock. This letter will also explain your opportunity to make transfers prior to the
reclassification of units so that you may own the requisite number of units to be in your desired
class. In regards to potential future dividends, each unit of stock will receive its equal portion
of a declared dividend, regardless of its class of stock.
In the event the reclassification is approved by the stockholders, it is the intent of the
Board of Directors and management to continue to provide FUELs members with financial information
on a regular basis as well as to continue to distribute newsletters. The company will also
continue to provide members with the companys audited financial statements. We anticipate that future correspondence to our members will be at least as informative as the
information provided at this time, and may be even more meaningful because we will not be
restricted by SEC regulations as to what we may or may not disclose.
The letter you receive will explain the proposed changes in detail. After reading the letter,
you may contact Alicia Shirah, Director of Communications for FUEL, with any questions at
229-522-2822 or Alicia@firstunitedethanol.com.
Meet the Fuel Folks Josh Edwards is FUELs Superintendent in charge of production. He began working with FUEL on July
12. Prior to coming to FUEL, he worked with Western New York Energy, a 50 million gallon per year
ethanol plant located in Medina, New York. He served as production manager and shift supervisor
during his 21/2 years at this ethanol plant. Prior to working in ethanol production, Josh worked for
9 years at Eastman Kodak in Rochester, New York making photographic chemicals and pharmaceuticals.
Josh was born and raised in Orleans County, New York. He and his wife, Audrey, and their
children, Nick, 16, Justin, 14, and Katherine, 12, now live in Thomasville. Josh is an avid
outdoorsman with the distinction of being a 3 time New York State Duck Calling Champion.
Since July 22nd, FUEL has received 1.6 million bushels of local corn. According to Brad Kusterman,
Director of Grain Marketing and Feed Ingredient Sales, he and his staff have contracted over 1.7
million bushels of local corn, but he hopes to purchase over 2 million bushels during local
harvest.
Our grains employees have enjoyed a very busy harvest as we have averaged over 125 inbound corn
trucks per day. FUELs employees strive to provide excellent customer service with a focus on
getting corn trucks unloaded as quickly as possible. Our employees are constantly improving our
procedures in an effort to alleviate wait times. On August 9, 169 corn trucks passed over the
scales and proceeded to the unloading area in an average time of 4.6 minutes per truck. The
following day, 173 trucks delivered local corn to FUEL. While on the scales, the corn is probed
and tested for weight, moisture, damage and aflatoxin.
FUEL receives corn seven days a week during local harvest and offers extended hours, weather
permitting. Our experienced grain managers are accessible for pricing information and our daily
bids are posted on our website at www.firstunitedethanol.com.
This newsletter contains forward-looking statements that involve future events, our future
performance and our expected future operations and actions. In some cases you can identify
forward-looking statements by the use of words such as may, will, should, anticipate,
believe, expect, plan, future, intend, could, estimate, predict, hope,
potential, continue, or the negative of these terms or other similar expressions. These
forward-looking statements are only our predictions and involve numerous assumptions, risks and
uncertainties, including, but not limited to those listed below and those business risks and
factors described in our filings with the Securities and Exchange Commission (SEC).
Changes in federal and/or state laws (including the elimination of any federal and/or state
ethanol tax incentives);Limitations and restrictions contained in the instruments and
agreements governing our indebtedness; Our ability to generate sufficient liquidity to fund
our operations, debt service requirements and capital expenditures; Changes in the
availability of credit to support the level of liquidity necessary to implement our risk
management activities; Changes in general economic conditions or the occurrence of certain
events causing an economic impact in the agriculture, oil or automobile industries;
Difficulties or disruptions we may encounter during the initial operating period at our
plant; Changes in the environmental regulations that apply to our plant site and operations;
Changes in the availability and price of natural gas and corn, and the market for distillers
grains; Changes in our business strategy, capital improvements or development plans;
Overcapacity within the ethanol industry; Changes and advances in ethanol production
technology; and Competition from alternative fuel additives.
Our actual results or actions could and likely will differ materially from those anticipated in the
forward-looking statements for many reasons, including the reasons described in this communication.
We are not under any duty to update the forward-looking statements contained in this newsletter. We
cannot guarantee future results, levels of activity, performance or achievements. We caution you
not to put undue reliance on any forward-looking statements, which speak only as of the date of
this communication. You should read this newsletter with the understanding that our actual results
may be materially different from what we currently expect. We qualify all of our forward-looking
statements by these cautionary statements.