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, 2006

|_|   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                                 84-0925128
  (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 |_|

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

Number of shares of common stock outstanding as of July 31, 2006: 3,785,664

Transitional Small Business Disclosure Format: Yes |_| No |X|


                                       1
<PAGE>

                                MARWICH II, LTD.

                                   FORM 10-QSB

                                      INDEX


                                                                           PAGE
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........................     2
PART I. FINANCIAL INFORMATION............................................     4
Item 1.   Financial Statements...........................................     4
          Unaudited Condensed Balance Sheets as of July 31, 2006 and
            January 31, 2006.............................................     4
          Unaudited Condensed Statements of Operations for the Three
            Months ended July 31, 2006 and 2005..........................     5
          Unaudited Condensed Statements of Operations for the Six Months
            ended July 31, 2006 and 2005 and for the period from
            October 13, 2004 (date of development stage inception)
            through July 31, 2006........................................     6
          Unaudited Condensed Statements of Cash Flows for the Six Months
             ended July 31, 2006 and 2005 and for the period from
             October 13, 2004 (date of development stage inception)
             through July 31, 2006.......................................     7
          Notes to the Unaudited Condensed Financial Statements..........     8
Item 2.   Management's Discussion and Analysis of Financial Condition and
            Results of Operations........................................    10
Item 3.   Controls and Procedures........................................    14
PART II. OTHER INFORMATION...............................................    15
Item 1.       Legal proceedings..........................................    15
Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds    15
Item 3.       Defaults Upon Senior Securities............................    15
Item 4.       Submission of Matters to a Vote of Security Holders........    15
Item 5.       Other Information..........................................    15
Item 6.       Exhibits...................................................    15
SIGNATURES...............................................................    16

               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.


                                       2
<PAGE>

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
<PAGE>


PART I - FINANCIAL INFORMATION

(1)      ITEM 1 - FINANCIAL STATEMENTS

                                MARWICH II, LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                       UNAUDITED CONDENSED BALANCE SHEETS
                    AS OF JULY 31, 2006 AND JANUARY 31, 2006

<TABLE>
<CAPTION>
                                                  ASSETS

                                                                    July 31,      January 31,
                                                                      2006           2006
                                                                   -----------    -----------

<S>                                                                <C>            <C>
Current Assets, cash                                               $        --    $    10,794
                                                                   -----------    -----------

  Total Assets                                                     $        --    $    10,794
                                                                   ===========    ===========

                            LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable, related parties                                $        --    $     1,200
                                                                   -----------    -----------

  Total Current Liabilities                                                 --          1,200
                                                                   -----------    -----------

Stockholders' Equity:
  Preferred stock, $.01 par value;
    1,000,000 shares authorized, none
    issued and outstanding                                                  --             --
  Common stock, no par value,
    100,000,000 shares authorized,
    3,785,464 shares issued and
    outstanding                                                        333,567        333,567
  Additional paid in capital                                             3,000             --
  Accumulated (deficit)                                               (303,567)      (303,567)
  Accumulated (deficit)
    during the development stage                                       (33,000)       (20,406)
                                                                   -----------    -----------
                                                                            --          9,594
                                                                   -----------    -----------
Total Liabilities and Stockholders'
Equity                                                             $        --    $    10,794
                                                                   ===========    ===========
</TABLE>


The accompanying notes are an integral part of the unaudited condensed
financial statements


                                       4
<PAGE>

                                MARWICH II, LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS ENDED JULY 31, 2006 AND 2005

                                                   Three months ended
                                                 July 31,       July 31,
                                                   2006           2005
                                                -----------    -----------

Revenues                                        $        --    $        --
                                                -----------    -----------

Operating expenses:
  Professional fees                                   6,200          2,790
  Administrative and other                            2,609             --
                                                -----------    -----------
                                                      8,809          2,790
                                                -----------    -----------
Income tax expense                                       --             --
                                                -----------    -----------

Net (loss)                                      $    (8,809)   $    (2,790)
                                                ===========    ===========

Loss per share                                  $     (0.00)   $     (0.00)
                                                ===========    ===========

Weighted average number of shares outstanding     3,785,664        946,616
                                                ===========    ===========

The accompanying notes are an integral part of the unaudited condensed
financial statements

                                       5
<PAGE>

                                MARWICH II, LTD.
                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
               FOR THE SIX MONTHS ENDED JULY 31, 2006 AND 2005 AND
                      FOR THE PERIOD FROM OCTOBER 13, 2004
                     (DATE OF DEVELOPMENT STAGE INCEPTION)
                              THROUGH JULY 31, 2006

<TABLE>
<CAPTION>
                                                                                 For the period from
                                                                                  October 13, 2004
                                                                                (date of development
                                                    Six months ended          stage inception) through
                                                 July 31,       July 31,               July 31,
                                                   2006           2005                  2006
                                                -----------    -----------    -------------------------

<S>                                             <C>            <C>            <C>
Revenues                                        $        --    $        --    $                      --
                                                -----------    -----------    -------------------------

Operating expenses:
  Professional fees                                   9,760          6,720                       28,200
  Administrative and other                            2,834            997                        4,800
                                                -----------    -----------    -------------------------
                                                     12,594          7,717                       33,000
                                                -----------    -----------    -------------------------

Income tax expense                                       --             --                           --
                                                -----------    -----------    -------------------------

Net (loss)                                      $   (12,594)   $    (7,717)   $                 (33,000)
                                                ===========    ===========    =========================

Loss per share                                  $     (0.00)   $     (0.01)   $                   (0.02)
                                                ===========    ===========    =========================

Weighted average number of shares outstanding     3,785,664        946,616                    1,707,383
                                                ===========    ===========    =========================
</TABLE>

The accompanying notes are an integral part of the unaudited condensed
financial statements


                                       6
<PAGE>

                                MARWICH II, LTD.
                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JULY 31, 2006 AND 2005 AND
                      FOR THE PERIOD FROM OCTOBER 13, 2004
                     (DATE OF DEVELOPMENT STAGE INCEPTION)
                              THROUGH JULY 31, 2006

<TABLE>
<CAPTION>
                                                                            For the period from
                                                                              October 13, 2004
                                                                            (date of development
                                                Six months ended          stage inception) through
                                             July 31,       July 31,              July 31,
                                               2006           2005                 2006
                                            -----------    -----------    ------------------------

<S>                                         <C>            <C>            <C>
Cash Flows from Operating  Activities:
         Net (loss)                         $   (12,594)   $    (7,717)   $                (33,000)
         Adjustments to reconcile net
           (loss) to net cash used by
           operating activities:

         (Decrease) in accounts payable          (1,200)          (648)                         --
                                            -----------    -----------    ------------------------


Net cash used by operating activities           (13,794)        (8,365)                    (33,000)
                                            -----------    -----------    ------------------------


Cash flows from investing activities                 --             --                          --
                                            -----------    -----------    ------------------------

Cash flows from financing activities

         Common stock issued for cash                --             --                      30,000

         Contributions of capital                 3,000             --                       3,000
                                            -----------    -----------    ------------------------


Net cash provided by financing activities         3,000             --                      33,000
                                            -----------    -----------    ------------------------


Increase (decrease) in cash                     (10,794)        (8,365)                         --


Cash, Beginning of period                        10,794         19,931                          --
                                            -----------    -----------    ------------------------


Cash, End of period                         $        --    $    11,566    $                     --
                                            ===========    ===========    ========================


Interest paid                               $        --    $        --    $                     --
                                            ===========    ===========    ========================


Income taxes paid                           $        --    $        --    $                     --
                                            ===========    ===========    ========================
</TABLE>

The accompanying notes are an integral part of the unaudited condensed
financial statements


                                       7
<PAGE>

                                MARWICH II, LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

(1)   UNAUDITED FINANCIAL STATEMENTS

The balance sheet as of July 31, 2006,  the  statements  of  operations  and the
statements of cash flows for the three and six month periods ended July 31, 2006
and 2005 and the  period  from  October  13,  2004  (date of  development  stage
inception)  through July 31, 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.  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, 2006 and for all  periods  presented,  have been
made.

It is suggested that these  statements be read in  conjunction  with the January
31, 2006 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.

(2)   BASIS OF PRESENTATION - GOING CONCERN

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.  However,  the
Company has limited  working capital and no active  business  operations,  which
raises substantial doubt about its ability to continue as a going concern.

On June 23, 2006 American  Ethanol,  Inc.  ("American")  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 two
members of American's  management,  Timothy Morris, its Chief Executive Officer,
and William Maender,  its Chief Financial  Officer,  were named to the Company's
Board of Directors.

Effective  as of June  23,  2006,  the  Company  and  American  entered  into an
Agreement  and Plan of Merger (the  "Merger  Agreement"),  pursuant to which (i)
American has agreed to merge with and into the Company,  with the Company  being
the  surviving  company and (ii)  effective  upon the Merger,  the Company  will
change its name to American  Ethanol,  Inc.  Pursuant  to the  Merger,  (i) each
issued and outstanding  share of American Common Stock  (including  Common Stock
issued  upon  conversion  of  American  Series A  Preferred  Stock,  which  will
automatically  convert into Common Stock immediately prior to the closing of the
Merger) will be converted into the right to receive one share of Common Stock of
the Company, and (ii) each issued and outstanding warrant exercisable for common
stock of American will be assumed and converted into a warrant  exercisable  for
common stock of the Company,  in a transaction to be accounted for as a "reverse
merger." The exercise  prices and other terms of the  outstanding  warrants will
remain unchanged.

Prior to the  consummation  of the Merger,  the  Company  intends to adopt a new
management and employee incentive equity/stock option plan pursuant to which the
Company  will be  entitled  to grant  options to  purchase  shares of its common
stock.

The  Company   currently  has  3,785,664  shares  of  common  stock  issued  and
outstanding,  of which  American  owns 88.3% or  3,343,200  shares.  Assuming no
shareholder of either American 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 (i) all of the shares of the Company held by American will
be cancelled, and (ii) the Company will issue to the shareholders of American in
the aggregate  approximately 84.6 million shares of common stock in exchange for
all the  currently  issued  and  outstanding  shares of  American  common  stock
(including  common  stock  issued  upon  conversion  of the  American  Series  A
Preferred Stock, which will automatically  convert into common stock immediately
prior to the  closing  of the  Merger)  and the  Company  will  assume  warrants
exercisable  for an  additional  970,000  shares of common  stock.  As a result,
immediately following the Merger, on a fully-diluted basis the Company will have
approximately 86 million shares of common stock  outstanding.  After the Merger,
the original  shareholders of the Company will hold less than 0.5% of the issued
and outstanding shares of the Company's common stock on a fully diluted basis.


                                       8
<PAGE>

The Merger Agreement has been approved by the boards of directors of each of the
Company  and  American  and must be  submitted  to the  shareholders  of each of
American and the Company for their  approval.  American  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.

Conditions to the Merger

The  Company  and  American  have  each  agreed to  continue  to  operate  their
respective  businesses  in the ordinary  course  prior to the Merger.  Under the
Merger Agreement,  each of American and the Company agreed to do certain things,
some of  which  are  conditions  to the  Merger  transaction.  Each  company  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.

Accounting Treatment

The Merger is expected to be accounted for as a "reverse merger." As a result of
the reverse  merger,  for accounting  purposes,  Amercian will be considered the
accounting  acquirer  and will be treated  as the  successor  to the  historical
operations of the Company.  Accordingly, the historical finanacial statements of
American will be treated as the financial statements of the Company.

Regulatory Approval

No  specific  federal or state  regulatory  approvals  must be  obtained  by the
Company or  American  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,  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,  (ii) by either
party 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  presently
knows of any reason why the Merger might be abandoned.


                                       9
<PAGE>


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 change its name to American Ethanol, 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 was reinstated as an active company by
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 quarter  ended July 31, 2006 or
during the period from October 13, 2004 through  July 31, 2006,  and  management
does not anticipate that the Company will generate any revenues until the Merger
is consummated.

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

At  July  31,  2006,  the  Company  had  no  material  commitments  for  capital
expenditures.

Merger With American Ethanol, Inc.

On June  23,  2006,  American  acquired  approximately  88.3%  of the  Company's
outstanding common stock from three principal shareholders for $675,000 in cash.
In connection with this transaction, the Company's three directors resigned from
the  Company's  Board of  Directors  and two members of  American's  management,
Timothy Morris,  its Chief Executive  Officer,  and William  Maender,  its Chief
Financial Officer, were named to the Company's Board of Directors.

Effective  as of June  23,  2006,  the  Company  and  American  entered  into an
Agreement and Plan of Merger pursuant to which American agreed to merge with the
Company,  with the Company being the surviving entity. After consummation of the
Merger,  the Company will change its name to American Ethanol,  Inc. Pursuant to
the Merger,  (i) the shares of the Company's  common stock held by American will
be cancelled,  (ii) each issued and  outstanding  share of American common stock
(including common stock issued upon conversion of outstanding  American Series A
Preferred Stock, which will automatically  convert into common stock immediately
prior to the closing of the Merger) will be converted  into the right to receive
one share of the Company's  common stock,  and (iii) each issued and outstanding
warrant and option  exercisable for common stock of American will be assumed and
converted into a warrant and option  exercisable for the Company's common stock.
The exercise prices and other terms of the outstanding options and warrants will
remain unchanged.

The Company currently has 3,785,664 shares of common stock outstanding, of which
American  owns 88.3% or  3,343,200  shares.  Pursuant  to the Merger  Agreement,
assuming no  shareholder  of either the Company or American  elects  dissenters'
rights and that the  capitalization  of either  company does not change prior to
the closing of the Merger, (i) all of the shares of the Company held by American
will be  cancelled,  and (ii) the  Company  will  issue to the  shareholders  of
American in the aggregate  approximately  84.6 million shares of common stock in
exchange for all the currently issued and outstanding  shares of American common
stock  (including  common stock issued upon  conversion of the American Series A
Preferred Stock, which will automatically  convert into common stock immediately
prior to the  closing of the Merger)  and the  Company  will assume  options and
warrants  exercisable  for an additional  970,000  shares of common stock.  As a
result,  immediately  following the Merger, on a fully-diluted basis the Company
will have approximately 86 million shares of common stock outstanding.  Assuming
the foregoing,  after the Merger, the original  shareholders of the Company will
hold  less than  0.5% of the  issued  and  outstanding  shares  of the  combined
company's common stock on a fully diluted basis.


                                      10
<PAGE>

The Merger Agreement has been approved by the boards of directors of each of the
Company and American and must be  submitted to the  shareholders  of each of the
Company and American for their  approval.  American  currently owns 88.3% of the
Company's  outstanding  voting shares, 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  intends  to
reincorporate from the State of Colorado to the State of Nevada.

RISK FACTORS

Risks Related to the Merger With American

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 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  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.


                                      11
<PAGE>

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.  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.

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  currently  owns  approximately  88.3%  of our  voting  stock,  and the
officers and  directors of the Company are  affiliates  of American,  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  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.


                                      12
<PAGE>

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 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,
interest rates,  general economic conditions and those specific to the industry,
developments  with regard to American'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.


                                      13
<PAGE>

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.


                                       14
<PAGE>


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.   EXHIBITS

2.1*  Agreement and Plan of Merger by and between  Marwich II, Ltd. and American
      Ethanol, Inc. dated June 23, 2006.

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.

----------------------
* Incorporated by reference from the Company's Report on Form 8-K filed with the
SEC on June 26, 2006.


                                      15
<PAGE>


                                   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: September 14, 2006                    By:  /s/ William J. Maender
                                                 ------------------------
                                                 Chief Financial Officer
                                                 (Principal Financial and
                                                 Accounting Officer)



                                      16