**U.S.
      Securities and Exchange Commission**






**Washington,
      D.C. 20549**






**FORM
      10-QSB**






x
      QUARTERLY REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly
      period ended July 31, 2007




o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition
      period from____________ to________




Commission
      file number: 00-51354




**MARWICH
      II, LTD.**


(Exact
      name of small business issuer as specified in its charter)


Colorado
              84-0925
                  128(State
                  or other jurisdiction of
              (IRS
                  Employer identification No.)incorporation
                  or organization)




203
      N.
      LaSalle Street, Suite 2100


Chicago,
      IL 60601


(Address
      of principal executive offices)




(312)
      264
      -2682


(Issuer's
      telephone number)




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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. Yes x No o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes x No o




Number
      of
      shares of common stock outstanding as of July 31, 2007: 3,785,664




Transitional
      Small Business Disclosure Format: Yes o No x




1





**MARWICH
      II, LTD.**


**FORM
      10-QSB**


**INDEX**


**SPECIAL
                NOTE REGARDING FORWARD-LOOKING STATEMENTS**
              **PART
                I. FINANCIAL INFORMATION**
            **Page**
              3Item
                1.
            Financial
                StatementsBalance
                Sheets as of July 31, 2007 (unaudited) and January 31,
                2007
            4Unaudited
                Statements of Operations for Three and Six Months ended July 31,
                2007 and
                2006
            5Unaudited
                Statements of Cash Flows for the Six Months ended July 31, 2007 and
                2006
            6Notes
                to the Unaudited Financial Statements
            7Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            10Item
                3.
            Controls
                and Procedures
            12**PART
                II. OTHER INFORMATION**
            13Item
                6.
            Exhibits
            16**SIGNATURES**
            
            17




2





**SPECIAL
      NOTE REGARDING FORWARD—LOOKING STATEMENTS**




On
      one or
      more occasions, we may make forward-looking statements in this Quarterly Report
      on Form 10-QSB regarding our assumptions, projections, expectations, targets,
      intentions or beliefs about future events. Words or phrases such as
“anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,”
“intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,”
“will continue” or similar expressions identify forward-looking statements.
      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 elsewhere in this report
      and our other Securities and Exchange Commission filings.




Forward-looking
      statements involve risks and uncertainties which could cause actual results
      or
      outcomes to differ materially from those expressed. We caution that while
      we make
      such statements in good faith and believe such statements are based on
      reasonable assumptions, including without limitation, management’s examination
      of historical operating trends, data contained in records and other data
      available from third parties, we cannot assure you that our projections will
      be
      achieved.




We
      have
      attempted to identify, in context, certain of the factors that we believe may
      cause actual future experience and results to differ materially from our current
      expectation regarding the relevant matter or subject area. In addition to the
      items specifically discussed above, our business and results of operations
      are
      subject to the uncertainties described under the caption “Risk Factors” which is
      a part of the disclosure included in Item 2 of this Report entitled
“Management’s Discussion and Analysis of Financial Condition and Results of
      Operations.”




From
      time
      to time, oral or written forward-looking statements are also included in our
      reports on Forms 10-KSB, 10-QSB and 8-K, Proxy Statements on Schedule 14A,
      press
      releases, analyst and investor conference calls, and other communications
      released to the public. Although we believe that at the time made, the
      expectations reflected in all of these forward-looking statements are and will
      be reasonable, any or all of the forward-looking statements in this quarterly
      report on Form 10-QSB, our reports on Forms 10-KSB and 8-K, our Proxy Statements
      on Schedule 14A and any other public statements that are made by us may prove
      to
      be incorrect. This may occur as a result of inaccurate assumptions or as a
      consequence of known or unknown risks and uncertainties. Many factors discussed
      in this Quarterly Report on Form 10-QSB, certain of which are beyond our
      control, will be important in determining our future performance. Consequently,
      actual results may differ materially from those that might be anticipated from
      forward-looking statements. In light of these and other uncertainties, you
      should not regard the inclusion of a forward-looking statement in this Quarterly
      Report on Form 10-QSB or other public communications that we might make as
      a
      representation by us that our plans and objectives will be achieved, and you
      should not place undue reliance on such forward-looking statements.




We
      undertake no obligation to publicly update or revise any forward-looking
      statements, whether as a result of new information, future events or otherwise.
      However, your attention is directed to any further disclosures made on related
      subjects in our subsequent annual and periodic reports filed with the SEC on
      Forms 10-KSB, 10-QSB and 8-K and Proxy Statements on Schedule 14A.




*Unless
      the context requires otherwise, references to “we,” “us,” “our” the “Company”
and “the Company” refer specifically to Marwich II, Ltd.*




3


**PART
      I - FINANCIAL INFORMATION**




(1)  **Item
      1 - Financial Statements**





**Marwich
                  II, Ltd.****BALANCE
                  SHEETS**as
                  of July 31, 2007 and January 31, 2007(unaudited)**ASSETS**July
                  31,
              
              January
                  31,2007
              
              2007(unaudited)Current
                  Assets
              
              $
              -
              
              $
              -**Total
                  Assets**
              
              **$**
              **-**
              
              **$**
              **-****LIABILITIES
                  AND STOCKHOLDERS' EQUITY**Current
                  Liabilities:Accounts
                  payable, related parties
              
              $
              121,934
              
              $
              91,189Total
                  Current Liabilities
              
              
              121,934
              
              
              91,189Stockholders'
                  Equity:Preferred
                  stock, $.01 par value;1,000,000
                  shares authorized, noneissued
                  and outstanding
              
              
              -
              
              
              -Common
                  stock, no par value,100,000,000
                  shares authorized,3,785,664
                  shares issued andoutstanding
              
              
              333,567
              
              
              333,567Additional
                  paid in capital
              
              
              3,000
              
              
              3,000Accumulated
                  deficit
              
              
              (458,501
              )
              
              (427,756
              )(121,934
              )
              
              (91,189
              )**Total
                  Liabilities and Stockholders' Equity**
              
              **$**
              **-**
              
              **$**
              **-**The
                  accompanying notes are an integral part of the financial
                  statements.
  4
  **Marwich
                  II, Ltd.****STATEMENTS
                  OF OPERATIONS**For
                  the six and three months ended July 31, 2007 and 2006(unaudited)For
                  the six months ended
              
              For
                  the three months endedJuly
                  31,
              
              July
                  31,
              
              July
                  31,
              
              July
                  31,2007
              
              2006
              
              2007
              
              2006Revenues
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Operating
                  expenses:Professional
                  fees
              
              
              28,148
              
              
              9,760
              
              
              16,398
              
              
              6,200Administrative
                  and other
              
              
              2,597
              
              
              2,834
              
              
              1,300
              
              
              2,60930,745
              
              
              12,594
              
              
              17,698
              
              
              8,809Net
                  loss
              
              $
              (30,745
              )
              $
              (12,594
              )
              $
              (17,698
              )
              $
              (8,809
              )Per
                  share
              
              $
              (0.00
              )
              $
              (0.00
              )
              $
              (0.00
              )
              $
              (0.00
              )Weighted
                  average number of shares outstanding
              
              
              3,785,664
              
              
              3,785,664
              
              
              3,785,664
              
              
              3,785,664The
                  accompanying notes are an integral part of the financial
                  statements.


5


**Marwich
                  II, Ltd.****STATEMENTS
                  OF CASH FLOWS**For
                  the six months ended July 31, 2007 and 2006(unaudited)For
                  the six months endedJuly
                  31,
              
              July
                  31,2007
              
              2006**Cash
                  flows from operating activities:**Net
                  loss
              
              $
              (30,745
              )
              $
              (12,594
              )Adjustments
                  to reconcile netloss
                  to net cash used byoperating
                  activities:Increase
                  (decrease) in accounts payable
              
              
              30,745
              
              
              (1,200
              )**Net
                  cash used by operating activities**
              
              
              **-**
              
              
              **(13,794**
              **)****Cash
                  flows from investing activities**
              
              
              **-**
              
              
              **-**Cash
                  flows from financing activitiesContributions
                  of capital
              
              
              -
              
              
              3,000**Net
                  cash provided by financing activities**
              
              
              **-**
              
              
              **3,000**Increase
                  (decrease) in cash
              
              
              -
              
              
              (10,794
              )Cash,
                  Beginning of period
              
              
              -
              
              
              10,794**Cash,
                  End of period**
              
              **$**
              **-**
              
              **$**
              **-**


6


**MARWICH
      II, LTD.**


**NOTES
      TO UNAUDITED FINANCIAL STATEMENTS**




**(1)**  **Unaudited
      Financial Statements**




The
      balance sheets as of July 31, 2007, the statements of operations and the
      statements of cash flows for the three and six month periods ended July 31,
      2007
      and 2006, have been prepared by Marwich II, Ltd. (the “Company”) without audit,
      pursuant to the rules and regulations of the Securities and Exchange Commission.
      Certain information and footnote disclosures, normally included in the financial
      statements prepared in accordance with accounting principles generally accepted
      in the United States of America, have been condensed or omitted as allowed
      by
      such rules and regulations, and the Company believes that the disclosures are
      adequate to make the information presented not misleading. Certain
      reclassifications have been made to the 2006 figures to conform to the 2007
      presentation. In the opinion of management, all adjustments (which include
      only
      normal recurring adjustments) necessary to present fairly the financial
      position, results of operations and changes in financial position at July 31,
      2007 and for all periods presented, have been made.




It
      is
      suggested that these statements be read in conjunction with the January 31,
      2007
      audited financial statements and the accompanying notes included in the
      Company's Annual Report on Form 10-KSB, filed with the Securities and Exchange
      Commission on April 10, 2007.




**(2)**  **Basis
      of Presentation - Ability to continue as a Going Concern**




Marwich
      II, Ltd. (the "registrant" or "Company") was incorporated under the laws of
      the
      State of Colorado on August 16, 1983.




The
      Company ceased active business operations and was administratively dissolved
      by
      the Colorado Secretary of State effective January 1, 1991. The Company was
      reinstated by the Colorado Secretary of State effective October 13,
      2004.




Marwich
      has an authorized capitalization of 100,000,000 shares of common stock, no
      par
      value per share and 1,000,000 shares of preferred stock, $.01 par
      value per share. On June 2, 2006, the Company effected a three-for-one common
      stock dividend on the Company's common stock. All references to share numbers
      reflect this stock dividend.




In
      October 2004, the Company’s Board of Directors, appointed three new directors
      and three new officers, all of whom were shareholders of the firm Pride
      Equities, Inc. (Pride). Management then secured the services of Pride, a
      consulting firm to assist the Company in its efforts to salvage value for the
      benefit of its shareholders. Pride contributed $30,000 as paid in capital to
      the
      Company and the Company issued Pride 1,920,000 shares of its common
      stock. The paid-in capital was used to pay for professional services, including
      accounting services in order to enable the Company to make all necessary filings with the Securities and Exchange Commission.




The
      Company is a "shell" company, whose sole purpose at this time, is to consummate
      the Merger with American Ethanol, Inc. (“American Ethanol”) described
      below.




The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles in the United States of America, which
      contemplates continuation of the Company as a going concern.




The
      Company has limited working capital and no active business operations, which
      raises substantial doubt about its ability to continue as a going concern.
      Management resumed the filing of Securities and Exchange Commission reporting
      in
      2004 and in 2006 began to seek a business combination. Management believes that this plan provides an opportunity for the Company
      to
      continue as a going concern. As a result, the Company’s ability to continue as a
      going concern is dependent upon the Company's ability to successfully consummate
      a business combination.




7


On
      June
      23, 2006, American Ethanol acquired approximately 88.3% of the outstanding
      common stock of the Company from three principal shareholders and directors
      of
      the Company for $675,000. In connection with this transaction, the three
      directors of the Company resigned from the board and members of American
      Ethanol’s management were named to the Company’s Board of Directors and as
      officers of the Company.




Effective
      as of June 23, 2006, Marwich-Colorado and American Ethanol entered into an
      Agreement and Plan of Merger, pursuant to which American Ethanol agreed to
      merge
      with and into Marwich-Colorado, with Marwich-Colorado being the surviving
      company. On July 19, 2007, Marwich-Colorado, Marwich II, Ltd., a Nevada
      corporation (“Marwich-Nevada”), AE Biofuels, Inc., a Nevada corporation and
      wholly owned subsidiary of Marwich-Nevada (“Merger Sub”), and American Ethanol
      entered into an Amended and Restated Agreement and Plan of Merger (the “Amended
      Merger Agreement”). The Amended Merger Agreement superseded the Agreement and
      Plan of Merger entered into with American Ethanol on June 23, 2006 as disclosed
      in our current report on Form 8-K filed on that date, adds Marwich Nevada and
      Merger Sub as parties to the agreement and further amends the former agreement
      to (i) amend Article II to provide that Merger Sub will merge with and into
      American Ethanol with American Ethanol being the surviving corporation; (ii)
      provide that the name of Marwich-Nevada be changed to AE Biofuels, Inc.
      effective upon the consummation of the merger; (iii) add a covenant that
      Marwich-Nevada will authorize a new series of Series B Convertible Preferred
      with rights, preferences and privileges substantially similar to the rights,
      preferences and privileges of the American Ethanol Series B Preferred (the
      “Marwich-Nevada Series B Preferred”); (iv) amend Article III to provide that (a)
      each issued and outstanding share of American Ethanol common stock (including
      shares of American Ethanol Series A Preferred Stock, which will automatically
      convert into common on the Effective Date of the merger) will be automatically
      canceled and converted into the right to receive one share of Marwich-Nevada
      common stock; (b) each issued and outstanding share of American Ethanol’s Series
      B Preferred will be automatically canceled and converted into the right to
      receive one share of Marwich-Nevada Series B Preferred; and (c) each issued
      and
      outstanding American Ethanol option and warrant will be assumed by
      Marwich-Nevada and become an option or warrant to purchase Marwich-Nevada’s
      common stock or Marwich-Nevada Series B Preferred as applicable on the same
      terms and conditions; and (v) add as a condition to American Ethanol’s
      obligation to complete the Merger that the Reincorporation be completed. The
      Amended and Restated Agreement and Plan of Merger, is herein referred to as
      the
“Merger Agreement”.




Based
      on
      the foregoing, assuming that American Ethanol does not issue any additional
      shares prior to the Merger, Marwich-Nevada would issue 83,914,998 shares of
      common stock in exchange for all the outstanding American Ethanol common stock
      and Series A Preferred Stock, 8,447,440 shares of Series B Preferred Stock
      in
      exchange for the same number of shares of American Ethanol Series B Preferred
      Stock, and would assume option and warrants exercisable for an additional
      1,747,000 shares of common stock and 902,310 shares of Series B Preferred Stock.
      The exercise prices and other terms of the outstanding options and warrants
      will
      remain unchanged. In addition, the shares of Marwich-Colorado common stock
      held
      by American Ethanol would be cancelled. If the Merger is completed, the
      directors and the officers of American Ethanol would become the directors and
      officers of Marwich-Nevada and Marwich-Nevada will change its name to AE
      Biofuels, Inc. Upon the closing of the Merger, shareholders of American Ethanol
      would own approximately 99.5% of the common stock of Marwich-Nevada and current
      shareholders of Marwich-Colorado will hold approximately 0.5% of Marwich-Nevada
      common stock.




The
      Merger Agreement has been approved by the boards of directors of each of the
      Company and American Ethanol and must be submitted to the shareholders of each
      of American Ethanol
      and the Company for their approval. American Ethanol currently owns 88.3% of
      the
      outstanding voting shares of the Company, a sufficient number to ensure approval
      of the Merger.
      However, the Merger closing is still subject to the satisfaction of the normal
      closing conditions in transactions of this kind, and the SEC must still approve
      the form and
      content of the proxy or information statement to be mailed by the Company to
      its
      shareholders. No assurance can be given that the Merger will be consummated,
      or
      if consummated, that the terms will not change from those currently contained
      in
      the Merger Agreement.




In
      addition, immediately prior to the Merger, the Company currently intends to
      reincorporate from the State of Colorado to the State of Nevada.




**Effective
      Date**




The
      Merger will become effective upon the satisfaction of various conditions,
      including the approval of the Merger by the shareholders of both the Company
      and
      American Ethanol. It is currently anticipated that the merger will occur during
      the third quarter of 2007.




8


**Conditions
      to the Merger**




The
      Company and American Ethanol have each agreed to continue to operate their
      respective businesses in the ordinary course prior to the Merger. Under the
      Merger Agreement, each of the parties agreed to do certain things, some of
      which
      are conditions to the Merger transaction. Each party is obligated to (a) obtain
      all necessary approvals for various aspects of the transaction, (b) give the
      other access to the records and personnel to complete due diligence review,
      and
      (c) proceed expeditiously to undertake all actions so as to be able to
      consummate the Merger. Consummation of the Merger is also contingent upon (i)
      preparation, filing and distribution to the Company’s shareholders of a proxy or
      information statement related to the approval of the Merger by the Company’s
      shareholders, and (ii) continued quotation of the Company’s common stock on the
      OTC Bulletin Board. The representations and warranties of the parties to the
      Merger Agreement generally do not survive the closing of the
      Merger.




**Regulatory
      Approval**




No
      specific federal or state regulatory approvals must be obtained by the parties
      to the Merger Agreement in order to consummate the Merger, other than general
      compliance with applicable corporation laws and state and federal securities
      laws and obtaining the SEC’s approval of the proxy or information statement if
      the SEC elects to review the proxy or information statement.




**Termination**




At
      any
      time prior to the Merger closing, notwithstanding the approval of the Merger
      Agreement by the shareholders of both the Company and American Ethanol, the
      Merger Agreement may be terminated and the Merger abandoned by (i) the mutual
      consent of the boards of directors of the Company and American Ethanol, (ii)
      by
      either the Company or American Ethanol if the Merger is prohibited by issuance
      of an order, decree or ruling, or (iii) by either party if the other is in
      material breach of any representation, warranty, covenant or agreement. Neither
      the Company nor American Ethanol presently knows of any reason why the Merger
      might be abandoned.


9


**Change
      of Domicile/Corporate Name**




Immediately
      prior to the Merger, the Company currently intends to reincorporate from the
      State of Colorado to the State of Nevada and upon consummation of the Merger
      to
      change its name to AE Biofuels, Inc.




**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF
      OPERATIONS.**




The
      Company was incorporated under the laws of the state of Colorado on August
      16,
      1983 and was organized to engage in the acquisition of assets and properties
      which management
      believed had good business potential. On January 1, 1991, the Company was
      dissolved by administrative action of the Colorado Secretary of State as a
      result of the
      failure to file required documents with the State of Colorado and at that time
      became dormant.




Effective
      October 13, 2004, the Company filed article of reinstatement with the Colorado
      Secretary of State and over the next few months became current with respect
      to
      its  SEC
      reporting requirements as a publicly traded company. The Company’s stated
      purpose was to identify, evaluate and investigate various companies with the
      intent that, if such
      investigation warranted, a reverse merger transaction be negotiated and
      completed pursuant to which the Company would acquire a target company with
      an
      operating business with the intent of continuing the acquired company's business
      as a publicly held entity.




The
      Company generated no revenues during the three and six months ended July 31,
      2007, and management does not anticipate that the Company will generate any
      revenues until the Merger
      is consummated.




Expenses
      reported in the Company’s financial statements included herewith are costs
      related to being a public entity. Since American Ethanol acquired an 88.3%
      interest in the Company it has been advancing funds for such expenses to the
      Company. Such advances are reflected in “Accounts Payable to Related Parties” on
      the Company’s Balance Sheet at the reporting date. It is anticipated that
      American Ethanol will continue to advance funds until such time as the Merger
      is
      completed.




The
      Company has no capital. The Company anticipates operational costs will be
      limited until such time as the Merger is consummated.


10


At
      July
      31, 2007, the Company had no material commitments for capital
      expenditures.




**Merger
      with American Ethanol, Inc.**




On
      June
      23, 2006 American Ethanol acquired approximately 88.3% of the outstanding common
      stock of the Company from three principal shareholders and
      directors of the Company for $675,000. In connection with this transaction,
      the
      three directors of the Company resigned from the board and American
      Ethanol’s Chief
      Executive Officer, and Chief Financial Officer, were named to the Company’s
      Board of Directors.




Effective
      as of June 23, 2006, Marwich-Colorado and American Ethanol entered into an
      Agreement and Plan of Merger, pursuant to which American Ethanol agreed to
      merge
      with and into Marwich-Colorado, with Marwich-Colorado being the surviving
      company. On July 19, 2007, Marwich-Colorado, Marwich II, Ltd., a Nevada
      corporation (“Marwich-Nevada”), AE Biofuels, Inc., a Nevada corporation and
      wholly owned subsidiary of Marwich-Nevada (“Merger Sub”), and American Ethanol
      entered into an Amended and Restated Agreement and Plan of Merger (the “Amended
      Merger Agreement”). The Amended Merger Agreement superseded the Agreement and
      Plan of Merger entered into with American Ethanol on June 23, 2006 as disclosed
      in our current report on Form 8-K filed on that date, adds Marwich Nevada and
      Merger Sub as parties to the agreement and further amends the former agreement
      to (i) amend Article II to provide that Merger Sub will merge with and into
      American Ethanol with American Ethanol being the surviving corporation; (ii)
      provide that the name of Marwich-Nevada be changed to AE Biofuels, Inc.
      effective upon the consummation of the merger; (iii) add a covenant that
      Marwich-Nevada will authorize a new series of Series B Convertible Preferred
      with rights, preferences and privileges substantially similar to the rights,
      preferences and privileges of the American Ethanol Series B Preferred (the
      “Marwich-Nevada Series B Preferred”); (iv) amend Article III to provide that (a)
      each issued and outstanding share of American Ethanol common stock (including
      shares of American Ethanol Series A Preferred Stock, which will automatically
      convert into common on the Effective Date of the merger) will be automatically
      canceled and converted into the right to receive one share of Marwich-Nevada
      common stock; (b) each issued and outstanding share of American Ethanol’s Series
      B Preferred will be automatically canceled and converted into the right to
      receive one share of Marwich-Nevada Series B Preferred; and (c) each issued
      and
      outstanding American Ethanol option and warrant will be assumed by
      Marwich-Nevada and become an option or warrant to purchase Marwich-Nevada’s
      common stock or Marwich-Nevada Series B Preferred as applicable on the same
      terms and conditions; and (v) add as a condition to American Ethanol’s
      obligation to complete the Merger that the Reincorporation be completed. The
      Amended and Restated Agreement and Plan of Merger, is herein referred to as
      the
“Merger Agreement”.




The
      Company currently has 3,785,664 shares of common stock issued and outstanding,
      of which American Ethanol owns 3,343,200 shares (or 88.3%). Assuming no
      shareholder of either American Ethanol or the Company elects dissenters' rights
      and that the capitalization of either company does not change prior to the
      closing of the Merger, in the Merger based on the foregoing, assuming that
      American Ethanol does not issue any additional shares prior to the Merger,
      Marwich-Nevada would issue 83,914,998 shares of common stock in exchange for
      all
      the outstanding American Ethanol common stock and Series A Preferred stock,
      8,447,440 shares of Series B Preferred Stock in exchange for the same number
      of
      shares of American Ethanol Series B Preferred Stock, and would assume option
      and
      warrants exercisable for an additional 1,747,000 shares of common stock and
      902,310 shares of Series B Preferred Stock. The exercise prices and other terms
      of the outstanding options and warrants will remain unchanged. In addition,
      the
      shares of Marwich-Colorado common stock held by American Ethanol would be
      cancelled. If the Merger is completed, the directors and the officers of
      American Ethanol would become the directors and officers of Marwich-Nevada
      and
      Marwich-Nevada will change its name to AE Biofuels, Inc. Upon the closing of
      the
      Merger, shareholders of American Ethanol would own approximately 99.5% of the
      common stock of Marwich-Nevada and current shareholders of Marwich-Colorado
      will
      hold approximately 0.5% of Marwich-Nevada common stock.


11


**ITEM
      3. CONTROLS AND PROCEDURES**




The
      Company maintains disclosure controls and procedures that are designed to ensure
      that information required to be disclosed in its Exchange Act reports is
      recorded, processed, summarized and reported within the time periods specified
      in the Securities and Exchange Commission's rules and forms, and that such
      information is accumulated and communicated to its management, including its
      Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
      timely decisions regarding required disclosure based closely on the definition
      of "disclosure controls and procedures" in Rules 13(a)-15(e) under the
      Securities Exchange Act of 1934, as amended. In designing and evaluating the
      disclosure controls and procedures, management recognized that any controls
      and
      procedures, no matter how well designed and operated, can provide
      only reasonable assurance of achieving the desired control objectives, and
      management necessarily was required to apply its judgment in evaluating the
      cost-benefit relationship of possible controls and procedures.




As
      of the
      end of the period covered by this report, we carried out an evaluation, under
      the supervision and with the participation of our Chief Executive Officer and
      Chief Financial Officer, of the effectiveness of the design and operation of
      our
      disclosure controls and procedures. Based on this evaluation, the Company's
      Chief Executive Officer and Chief Financial Officer concluded that as of the
      end
      of the period covered by this report the Company's disclosure controls and
      procedures are effective in timely alerting them to material information
      required to be included in the Company's periodic Securities and Exchange
      Commission reports.




There
      has
      been no change in our internal control over financial reporting during the
      most
      recent fiscal quarter that has materially affected, or is reasonably likely
      to
      materially affect, our internal control over financial reporting.


12


**RISK
      FACTORS**




**Risks
      Related to the Merger with American Ethanol**




*We
      may not consummate the Merger in the near future, or at all.*




It
      is our
      intention to effect the Merger; however no assurance can be given that the
      Merger will occur, or that if it does occur that it will occur in the near
      future. Under Colorado state corporate law, the Company will have to obtain
      shareholder approval for the Merger, which will require us to mail a proxy
      or
      information statement to our shareholders. As a public company, the proxy or
      information statement must be filed with the SEC before it can be mailed to
      our
      shareholders. The proxy or information statement may not be mailed to our
      shareholders until (i) ten days after it has been filed if the SEC elects not
      to
      review the proxy or information statement, or (ii) if the




SEC
      elects to review the proxy or information statement, until the SEC has approved
      of its use. The proxy or information statement is a lengthy document that is
      currently being
      prepared, but that has not yet been filed. Accordingly, it is not known when
      the
      proxy or information statement will be filed, whether the SEC will review the
      proxy or information statement, and if it does what effect the review will have on the
      timing and outcome of the Company’s shareholder meeting and on the Merger. If
      the SEC does review the proxy or information statement, depending on the SEC’s
      comments and the Company’s ability to satisfactorily address all of the SEC’s
      comments, the review process could delay the mailing of the proxy or information
      statement for a lengthy period of time, which period could last several months
      or more. In addition, the SEC’s comments may require that we and American
      Ethanol make changes to the terms and structure of the Merger. For example,
      the
      SEC or certain state securities agencies may require that the shares issued
      by
      the Company in the Merger be registered in accordance with the Securities Act
      or, that additional steps be taken by either the Company or American Ethanol
      before the Merger can be completed, any of which could make the Merger
      impractical or undesirable. In addition, our ability to complete the Merger,
      or
      the desirability of completing the Merger, may be affected by other regulatory
      issues related to our business, by future business conditions, by the state
      of
      the stock market, or by other events that we cannot currently predict.
      Accordingly, no assurance can be given that the Merger will occur.




*The
      Merger may fail to enhance shareholder value.*




While
      our
      goal is to maximize shareholder value, there can be no guarantees that the
      Merger will not impair shareholder value. If the Merger is effected, our
      business will be that of
      American Ethanol. Moreover, the Merger may require us to incur non-recurring
      or
      other charges and may pose significant integration challenges and/or management
      and business disruptions, any of which could harm our results of operation
      and
      business prospects.


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*There
      may be possible litigation in connection with the Merger.*




The
      Merger may also be challenged in court by various parties, including our
      existing shareholders. Our board did not seek or obtain an independent
      evaluation or opinion of the fairness of the Merger to our shareholders. Since
      American Ethanol currently owns approximately 88.3% of our voting stock, and
      the
      officers and directors of the Company are affiliates of American Ethanol, the
      Merger could be challenged on the grounds, among others, that the transaction
      is
      not being completed on arms’ length terms and conditions. Any
      such
      legal challenge to the Merger could delay the Merger or make the consummation
      of
      the Merger undesirable. Conversely, if the Merger is not consummated for
      any reason,
      including due to no fault of our own, lawsuits may be filed against us by third
      parties, for a variety of reasons, including, but not limited to, for failing
      to
      consummate the Merger. Such litigation, if it occurs, could harm our business,
      our prospects and our reputation.




*Our
      current and future shareholders will be diluted by the Merger.*




Our
      current and future shareholders will be diluted as a result of the issuance
      of
      our shares to the American Ethanol shareholders in the Merger. In addition,
      our
      shareholders may be diluted
      by future issuances of shares to satisfy our working capital needs. We
      anticipate that our current shareholders will own less than 0.5% of the
      outstanding shares of the combined entity, if the Merger is consummated under
      the current terms.




*There
      can be no assurance that a liquid public market for our common stock will exist
      after the Merger.*




Although
      the Company’s shares of common stock are eligible for quotation on the OTC
      Bulletin Board electronic over-the-counter trading system, a very limited number
      of shares
      trade on a regular basis and there may not be a significant market in such
      stock
      after the Merger. In addition, there can be no assurance that a regular and
      established market will be developed and maintained for the securities upon
      completion of the Merger. There can also be no assurance as to the strength
      or
      liquidity of any market for the Company’s common stock or the prices at which
      holders may be able to sell the shares.




14


*It
        is
        likely that there will be significant volatility in the trading
        price.*


In
      the
      event that a public market for our common stock is created or maintained after
      the Merger, market prices for the common stock will be influenced by many
      factors and
      will
      be subject to significant fluctuations in response to variations in operating
      results of American Ethanol and other factors. Factors that could affect our
      future stock price, and create
      volatility in our stock price, include the price and demand for ethanol, the
      price and availability of oil and gasoline, the political situation in the
      Middle East, U.S. energy
      policies, federal and state regulatory changes that affect the price of ethanol,
      the existence or discontinuation of legislative incentives for renewable fuels,
      the trading price of
      the stock of our competitors, investor perceptions of American Ethanol, interest
      rates, general economic conditions and those specific to the industry,
      developments with regard to American Ethanol’s operations and activities, our
      future financial condition, and changes in our management.




*Risks
      relating to low priced stocks.*




Although
      the Company’s common stock currently is quoted and traded on the OTC Bulletin
      Board, the price at which the stock will trade after the consummation of the
      Merger cannot currently be estimated. If the Company’s common stock trades below
      $5.00 per share, trading in the common stock may be subject to the requirements
      of certain
      rules promulgated under the Exchange Act of 1934, as amended (the “Exchange
      Act”), which require additional disclosure by broker-dealers in connection with
      any trades
      involving a stock defined as a penny stock (generally, any non-Nasdaq equity
      security that has a market price share of less than $5.00 per share, subject
      to
      certain exceptions)
      and a two business day “cooling off period” before broker and dealers can effect
      transactions in penny stocks. For these types of transactions, the
      broker-dealer  must
      make
      a special suitability determination for the purchaser and have received the
      purchaser’s written consent to the transaction prior to the sale. The
      broker-dealer also must
      disclose the commissions payable to the broker-dealer, current bid and offer
      quotations for the penny stock and, if the broker-dealer is the sole
      market-maker, the broker-dealer must disclose this fact and the broker-dealer’s
      presumed control over the market. These, and the other burdens imposed upon
      broker-dealers by the penny stock requirements, could discourage broker-dealers
      from effecting transactions in the common stock which could severely limit
      the
      market liquidity of the common stock and the ability of holders of the common
      stock to sell it.


15


**PART
      II - OTHER INFORMATION**




**Item
      6. Exhibits**




31.1
      Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities
      Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.




31.2
      Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities
      Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the
      Sarbanes- Oxley Act of 2002.




32.1
      Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002.




32.2
      Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002.




16


**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      Report on Form 10-QSB to be signed on its behalf by the undersigned, thereunto
      duly authorized.




MARWICH
              II, LTD. (Registrant)Date: August
              15, 2007
            By:
            /s/ William
              J. MaenderChief
              Financial Officer(Principal
              Financial and Accounting Officer)


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