##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2009
 Commission file number: 000-52421
 ADVANCED BIOENERGY, LLC
 (Exact name of Registrant as Specified in its Charter)
 Delaware
    
    20-2281511(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)
 10201 Wayzata Boulevard, Suite 250
Minneapolis, Minnesota 55305
(763) 226-2701
 (Address, including zip code, and telephone number,
including area code, of Registrants Principal Executive Offices)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ(Do not check if a smaller reporting
company)
    
    Smaller reporting company o
 o þ




---



##### 



ADVANCED BIOENERGY, LLC
FORM 10-Q
Index
 PagePart I. Financial Information
    
    
    1Item 1. Financial Statements
    
    
    1Condensed Consolidated Balance Sheets
    
    
    1Condensed Consolidated Statements of Operations
    
    
    2Condensed Consolidated Statement of Changes in Members Equity
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4T. Controls and Procedures
    
    
    24Part II. Other Information
    
    
    24Item 1. Legal Proceedings
    
    
    24Item 1A. Risk Factors
    
    
    24Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3. Defaults Upon Senior Securities
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    26Signatures
    
    
    27Exhibit IndexEX-31.1EX-31.2EX-32




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
 June 30,
    
    
    September 30,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    8,632
    
    
    $
    12,655Accounts receivable:Trade accounts receivable
    
    
    6,628
    
    
    
    4,889Due from broker
    
    
    
    
    
    
    1,283Inventories
    
    
    10,191
    
    
    
    8,101Prepaid expenses
    
    
    1,722
    
    
    
    1,715Current portion of restricted cash
    
    
    2,656
    
    
    
    2,731Assets held for sale (Note 3)
    
    
    130,770
    
    
    
    152,363Total current assets
    
    
    160,599
    
    
    
    183,737Property and equipment, net
    
    
    114,711
    
    
    
    123,849Other assets:Restricted cash
    
    
    1,164
    
    
    
    1,156Deferred financing costs, net
    
    
    845
    
    
    
    954Other assets
    
    
    193
    
    
    
    10Total Assets
    
    $
    277,512
    
    
    $
    309,706LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,595
    
    
    $
    2,497Accrued expenses
    
    
    4,531
    
    
    
    3,621Derivative financial instruments
    
    
    
    
    
    
    1,242Liabilities held for sale (Note 3)
    
    
    130,770
    
    
    
    125,496Current portion of long-term debt
    
    
    23,405
    
    
    
    20,055Total current liabilities
    
    
    160,301
    
    
    
    152,911Deferred income
    
    
    6,586
    
    
    
    6,732Long-term debt
    
    
    74,834
    
    
    
    82,638Members equity:Members capital
    
    
    153,684
    
    
    
    153,516Retained deficit
    
    
    (117,893
    )
    
    
    (84,305
    )Accumulated other comprehensive loss
    
    
    
    
    
    
    (1,786
    )Total members equity
    
    
    35,791
    
    
    
    67,425Total liabilities and members equity
    
    $
    277,512
    
    
    $
    309,706




---



##### Table of Contents



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations
(Dollars in thousands, except per unit data)
(Unaudited)
 Quarter Ended
    
    
    Nine Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Ethanol and related product revenues
    
    $
    48,607
    
    
    $
    66,587
    
    
    $
    159,275
    
    
    $
    159,324Cost of goods sold
    
    
    47,353
    
    
    
    61,396
    
    
    
    155,603
    
    
    
    140,274Gross profit
    
    
    1,254
    
    
    
    5,191
    
    
    
    3,672
    
    
    
    19,050Selling, general and administrative
    
    
    1,635
    
    
    
    2,523
    
    
    
    4,943
    
    
    
    7,699Operating income (loss)
    
    
    (381
    )
    
    
    2,668
    
    
    
    (1,271
    )
    
    
    11,351Management services
    
    
    395
    
    
    
    395
    
    
    
    1,185
    
    
    
    918Other income
    
    
    15
    
    
    
    137
    
    
    
    581
    
    
    
    327Interest income
    
    
    48
    
    
    
    88
    
    
    
    158
    
    
    
    417Interest expense
    
    
    (1,747
    )
    
    
    (3,458
    )
    
    
    (5,641
    )
    
    
    (11,018
    )Income (loss) from continuing operations
    
    $
    (1,670
    )
    
    $
    (170
    )
    
    $
    (4,988
    )
    
    $
    1,995Discontinued operations (Note 3):Loss from Heartland Grain Fuels, LP
    
    
    
    
    
    
    (9,426
    )
    
    
    (28,600
    )
    
    
    (15,226
    )Net loss
    
    $
    (1,670
    )
    
    $
    (9,596
    )
    
    $
    (33,588
    )
    
    $
    (13,231
    )Income (loss) per unit basic and diluted:From continuing operations
    
    
    (0.13
    )
    
    
    (0.02
    )
    
    
    (0.40
    )
    
    
    0.20From discontinued operations
    
    
    
    
    
    
    (0.95
    )
    
    
    (2.31
    )
    
    
    (1.54
    )Net loss
    
    $
    (0.13
    )
    
    $
    (0.97
    )
    
    $
    (2.71
    )
    
    $
    (1.34
    )Basic weighted average units outstanding
    
    
    12,643,542
    
    
    
    9,893,526
    
    
    
    12,395,677
    
    
    
    9,864,074Diluted weighted average units outstanding
    
    
    12,643,542
    
    
    
    9,893,526
    
    
    
    12,395,677
    
    
    
    9,864,074
  2




---



##### Table of Contents



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Condensed Consolidated Statement of Changes in Members Equity
For the Nine Months Ended June 30, 2009
(Dollars in thousands)
(Unaudited)
 AccumulatedOtherMember
    
    
    Member
    
    
    Retained
    
    
    ComprehensiveUnits
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    TotalMEMBERS EQUITY  September 30, 2008
    
    
    9,919,162
    
    
    $
    153,516
    
    
    $
    (84,305
    )
    
    $
    (1,786
    )
    
    $
    67,425Issuance of previously subscribed units
    
    
    2,750,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unit compensation expense, net of
contingently returned units
    
    
    (10,000
    )
    
    
    186
    
    
    
    
    
    
    
    
    
    
    
    186Put options exercised
    
    
    (7,200
    )
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    (18
    )Interest rate swap obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,786
    
    
    
    1,786Net loss
    
    
    
    
    
    
    
    
    
    
    (33,588
    )
    
    
    
    
    
    
    (33,588
    )MEMBERS EQUITY  June 30, 2009
    
    
    12,651,962
    
    
    $
    153,684
    
    
    $
    (117,893
    )
    
    $
    
    
    
    $
    35,791
  3




---



##### Table of Contents



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
 Nine Months EndedJune 30,
    
    
    June 30,2009
    
    

2008Cash flows from operating activitiesNet loss
    
    $
    (33,588
    )
    
    $
    (13,231
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    16,178
    
    
    
    15,649Amortization of deferred financing costs
    
    
    562
    
    
    
    752Amortization of debt discount
    
    
    
    
    
    
    1,695Impairment of IRF purchase intangible
    
    
    
    
    
    
    750Impairment of HGF assets
    
    
    13,564
    
    
    
    Unit compensation expense
    
    
    186
    
    
    
    580Change in risk management activities
    
    
    (1,242
    )
    
    
    1,620Changes in working capital components:Receivables
    
    
    863
    
    
    
    (13,004
    )Inventories
    
    
    (854
    )
    
    
    (10,752
    )Prepaid expenses
    
    
    (505
    )
    
    
    (2,420
    )Accounts payable
    
    
    (3,029
    )
    
    
    6,752Accrued expenses
    
    
    10,497
    
    
    
    3,015Net cash provided by (used in) operating activities
    
    
    2,632
    
    
    
    (8,954
    )Cash flows from investing activitiesPurchase of property and equipment
    
    
    (834
    )
    
    
    64Purchase of Heartland Grain Fuels, LP net of cash acquired
    
    
    
    
    
    
    (51,707
    )Change in other assets
    
    
    (303
    )
    
    
    (10,858
    )Increase in restricted cash held in escrow
    
    
    (500
    )Net cash used in investing activities
    
    
    (1,637
    )
    
    
    (62,501
    )Cash flows from financing activitiesPayments on debt
    
    
    (8,000
    )
    
    
    (62,114
    )Proceeds from long-term debt
    
    
    3,000
    
    
    
    130,592Repurchase of units
    
    
    (18
    )
    
    
    (467
    )Net cash provided by (used in) financing activities
    
    
    (5,018
    )
    
    
    68,011Net increase in cash and cash equivalents
    
    
    (4,023
    )
    
    
    (3,084
    )Beginning cash and cash equivalents
    
    
    12,655
    
    
    
    7,111Ending cash and cash equivalents
    
    $
    8,632
    
    
    $
    4,027Supplemental disclosure of non cash transactionsDeferred financing cost paid from long term debt proceeds
    
    $
    
    
    
    $
    5,984Accounts payable incurred for construction in process
    
    
    
    
    
    
    200Unrealized loss on interest rate swaps
    
    
    
    
    
    
    1,588Financing costs amortized to construction in progress
    
    
    
    
    
    
    154Promissory notes and accrued interest converted into membership units
    
    
    
    
    
    
    30,318Warrants issued in connection with debt
    
    
    
    
    
    
    2,260Supplemental disclosure of cash flow information:Cash paid for interest, net of capitalized interest of $2,394 in 2008
    
    $
    7,080
    
    
    $
    18,373
  4




---



##### Table of Contents



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2009 and 2008
(Unaudited)
 1. Organization and Significant Accounting Policies
 Accounting for the Impairment or Disposal of Long-Lived Assets
  Cash and Cash Equivalents
  Fair Value of Financial Instruments
  Inventories
  5




---



##### Table of Contents



Property and Equipment
  Buildings
    
    40 YearsProcess equipment
    
    10 YearsOffice equipment
    
    5-7 Years
  Revenue Recognition
  Shipping Costs
  Income (Loss) Per Unit
  Accounting Estimates
  Risks and Uncertainties
  New Accounting Pronouncements
 6




---



##### Table of Contents



Subsequent Events
 2. Going Concern
    3. Discontinued Operations
 Accounting for the Impairment
or Disposal of Long-Lived Assets
 7




---



##### Table of Contents



Quarter Ended
    
    
    Nine months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net revenues
    
    $
    36,850
    
    
    $
    51,157
    
    
    $
    111,462
    
    
    $
    113,285Loss from operations before impairment charge
    
    
    
    
    
    
    (9,426
    )
    
    
    (15,035
    )
    
    
    (15,226
    )Property and equipment and deferred financing costs impairment
    
    
    
    
    
    
    
    
    
    
    (13,565
    )
    
    
    Net loss from discontinued operations
    
    $
    
    
    
    $
    (9,426
    )
    
    $
    (28,600
    )
    
    $
    (15,226
    )
  June 30,
    
    
    September 30,2009
    
    
    2008Assets:Cash and cash equivalents
    
    $
    6,764
    
    
    $
    9,082Trade accounts receivable
    
    
    4,831
    
    
    
    5,711Inventories
    
    
    4,250
    
    
    
    5,736Property, plant and equipment, net
    
    
    112,967
    
    
    
    131,331Goodwill
    
    
    
    
    
    
    29,148Other
    
    
    1,958
    
    
    
    9,788Total assets from discontinued operations
    
    $
    130,770
    
    
    $
    190,796Liabilities:Current debt
    
    $
    114,079
    
    
    $
    115,840Trade accounts payable and accrued expenses
    
    
    16,691
    
    
    
    10,596Total liabilities of discontinued operations
    
    $
    130,770
    
    
    $
    126,436
 4. Inventories
  June 30,
    
    
    September 30,2009
    
    
    2008Corn
    
    $
    6,157
    
    
    $
    843Chemicals
    
    
    309
    
    
    
    192Work in process
    
    
    1,169
    
    
    
    2,292Ethanol
    
    
    933
    
    
    
    2,250Distillers grain
    
    
    990
    
    
    
    1,871Supplies and parts
    
    
    633
    
    
    
    653Total
    
    $
    10,191
    
    
    $
    8,101
 5. Property and Equipment
  June 30,
    
    
    September 30,2009
    
    
    2008Land
    
    $
    2,333
    
    
    $
    2,333Buildings
    
    
    11,423
    
    
    
    11,354Process equipment
    
    
    120,756
    
    
    
    120,480Office equipment
    
    
    1,085
    
    
    
    1,085Construction in process
    
    
    16
    
    
    
    116135,613
    
    
    
    135,368Accumulated depreciation
    
    
    (20,902
    )
    
    
    (11,519
    )Property and equipment, net
    
    $
    114,711
    
    
    $
    123,849
 8




---



##### Table of Contents



6. Debt
  June 30,
    
    
    June 30,
    
    
    September 30,2009
    
    
    2009
    
    
    2008Interest Rate
    
    
    Principal Amount
    
    
    Principal AmountABE Fairmont senior credit facility
    
    
    3.71  7.53
    %
    
    $
    78,050
    
    
    $
    85,500ABE Fairmont seasonal line
    
    
    3.71
    %
    
    
    3,000
    
    
    
    ABE Fairmont subordinate exempt facilities bonds
    
    
    6.75
    %
    
    
    7,000
    
    
    
    7,000Advanced BioEnergy secured term loan
    
    
    12.00
    %
    
    
    10,000
    
    
    
    10,000Other
    
    
    7.50
    %
    
    
    189
    
    
    
    193Total outstanding
    
    
    
    
    
    
    98,239
    
    
    
    102,693Less: Amounts due within one year
    
    
    
    
    
    
    (23,405
    )
    
    
    (20,055
    )Long-term debt
    
    
    
    
    
    $
    74,834
    
    
    $
    82,638
  2010
    
    $
    23,4052011
    
    
    11,2212012
    
    
    11,2212013
    
    
    11,3872014
    
    
    12,265Thereafter
    
    
    28,740Total debt
    
    $
    98,239
 Senior Credit Facility for the Fairmont Plant
     9




---



##### Table of Contents



Fillmore County Subordinate Exempt Facilities Revenue Bonds for the Fairmont plant
  Secured Term Loan Note
   Subordinated Convertible Debt Financing
  7. Members Equity
 Convertible Notes
  10




---



##### Table of Contents



Restricted Unit Agreements
  Employment Agreements
   Warrants
   8. Major Customers
   June 30,
    
    June 30,2009
    
    2008Nine month revenues
    
    $
    127,980
    
    
    $
    Receivable balance
    
    
    7,069
    
    
    
    
 11




---



##### Table of Contents



9. Risk Management
  Commodity
    
    Quantity
    
    Amount
    
    Period CoveredCorn
    
    bushels
    
    
    2,624
    
    
    December 2009Ethanol
    
    gallons
    
    
    5,839
    
    
    June 2009Dried Distiller Grains (Equivalents)
    
    tons
    
    
    49
    
    
    June 2009
  Quarter Ended
    
    Nine months EndedJune 30,
    
    June 30,
    
    June 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Ethanol related losses
    
    $
    
    
    
    $
    (3,273
    )
    
    $
    
    
    
    $
    (3,442
    )Corn gains (losses)
    
    
    
    
    
    
    1,752
    
    
    
    (3,158
    )
    
    
    2,112
 Accounting for Derivative
Instruments and Hedging Activities
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Information Regarding Forward-Looking Statements
  COMPANY OVERVIEW
  12




---



##### Table of Contents



Accounting for the Impairment or Disposal of Long-Lived Assets
  FACILITIES
   PLAN OF OPERATION THROUGH JUNE 2010
  RESULTS OF CONTINUING OPERATIONS
 Quarter Ended June 30, 2009 Compared to Quarter Ended June 30, 2008 (Continuing Operations)
  Quarter Ended
    
    Quarter EndedJune 30, 2009
    
    June 30, 2008Sold/Consumed
    
    Average
    
    Sold/Consumed
    
    Average(In thousands)
    
    Net Price/Cost
    
    (In thousands)
    
    Net Price/CostEthanol (gallons)
    
    
    26,468
    
    
    $
    1.49
    
    
    
    24,623
    
    
    $
    2.35Dried distiller grains (tons)
    
    
    55
    
    
    
    117.54
    
    
    
    58
    
    
    
    133.76Modified distiller grains (tons)
    
    
    41
    
    
    
    66.03
    
    
    
    33
    
    
    
    74.86Corn (bushels)
    
    
    9,537
    
    
    $
    3.88
    
    
    
    8,681
    
    
    $
    5.33Gas (mmbtus)
    
    
    702
    
    
    
    2.83
    
    
    
    706
    
    
    
    9.87
 Net Sales
  13




---



##### Table of Contents



Cost of Goods Sold
   Gross Profit
  Selling, General, and Administrative Expenses
  Interest Expense
  Nine Months Ended June 30, 2009 Compared to Nine Months Ended June 30, 2008 (Continuing operations)
  14




---



##### Table of Contents



Nine months Ended
    
    
    Nine months EndedJune 30, 2009
    
    
    June 30, 2008Sold/Consumed
    
    
    Average
    
    
    Sold/Consumed
    
    
    Average(In thousands)
    
    
    Net Price/Cost
    
    
    (In thousands)
    
    
    Net Price/CostEthanol (gallons)
    
    
    80,172
    
    
    $
    1.57
    
    
    
    62,087
    
    
    $
    2.13Dried distiller
grains (tons)
    
    
    183
    
    
    
    131.90
    
    
    
    171
    
    
    
    124.97Modified distiller
grains (tons)
    
    
    134
    
    
    
    68.24
    
    
    
    42
    
    
    
    68.84Corn (bushels)
    
    
    29,518
    
    
    $
    3.98
    
    
    
    23,328
    
    
    $
    4.41Gas (mmbtus)
    
    
    2,155
    
    
    
    3.70
    
    
    
    1,922
    
    
    
    7.98
 Net Sales
   Cost of Goods Sold
   Gross Profit
  Selling, General, and Administrative Expenses
  15




---



##### Table of Contents



Interest Expense
  DISCONTINUED OPERATIONS
   Accounting for the Impairment or Disposal of Long-Lived Assets
  TRENDS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS
 Overview
   16




---



##### Table of Contents



Legislation
  The Renewable Fuels Standard
   RFS RequirementTotal Renewable
    
    Cellulosic
    
    Biodiesel
    
    
    
    
    
    That Can Be MadeFuel
    
    Ethanol Minimum
    
    Minimum
    
    Advanced
    
    With Corn BasedYear
    
    Requirement
    
    Requirement
    
    Requirement
    
    Biofuel
    
    Ethanol2009
    
    
    11.10
    
    
    
    
    
    
    
    .50
    
    
    
    0.10
    
    
    
    10.502010
    
    
    12.95
    
    
    
    .10
    
    
    
    .65
    
    
    
    0.20
    
    
    
    12.002011
    
    
    13.95
    
    
    
    .25
    
    
    
    .80
    
    
    
    0.30
    
    
    
    12.602012
    
    
    15.20
    
    
    
    .50
    
    
    
    1.00
    
    
    
    0.50
    
    
    
    13.202013
    
    
    16.55
    
    
    
    1.00
    
    
    
    
    
    
    
    1.75
    
    
    
    13.802014
    
    
    18.15
    
    
    
    1.75
    
    
    
    
    
    
    
    2.00
    
    
    
    14.402015
    
    
    20.50
    
    
    
    3.00
    
    
    
    
    
    
    
    2.50
    
    
    
    15.002016
    
    
    22.25
    
    
    
    4.25
    
    
    
    
    
    
    
    3.00
    
    
    
    15.002017
    
    
    24.00
    
    
    
    5.50
    
    
    
    
    
    
    
    3.50
    
    
    
    15.002018
    
    
    26.00
    
    
    
    7.00
    
    
    
    
    
    
    
    4.00
    
    
    
    15.002019
    
    
    28.00
    
    
    
    8.50
    
    
    
    
    
    
    
    4.50
    
    
    
    15.002020
    
    
    30.00
    
    
    
    10.50
    
    
    
    
    
    
    
    4.50
    
    
    
    15.002021
    
    
    33.00
    
    
    
    13.50
    
    
    
    
    
    
    
    4.50
    
    
    
    15.002022
    
    
    36.00
    
    
    
    16.00
    
    
    
    
    
    
    
    5.00
    
    
    
    15.00
  California Low Carbon Fuel Standard
    17




---



##### Table of Contents



The Clean Air Act and Oxygenated Gasoline Program
  The Volumetric Ethanol Excise Tax Credit
  Tariffs on Imported Ethanol
   COMPETITION
 Our Primary Competition
   18




---



##### Table of Contents



Competition from Alternative Fuels
  Competition for Co-Products
  LIQUIDITY AND CAPITAL RESOURCES
 Financing and Existing Debt Obligations
  Advanced BioEnergy
     19




---



##### Table of Contents



ABE Fairmont
      20




---



##### Table of Contents



CREDIT ARRANGEMENTS
  June 30,
    
    
    June 30,
    
    
    September 30,2009
    
    
    2009
    
    
    2008Interest Rate
    
    
    Principal Amount
    
    
    Principal AmountABE Fairmont senior credit facility
    
    
    3.71  7.53
    %
    
    $
    78,050
    
    
    $
    85,500ABE Fairmont seasonal line
    
    
    3.71
    %
    
    
    3,000
    
    
    
    ABE Fairmont subordinate exempt facilities bonds
    
    
    6.75
    %
    
    
    7,000
    
    
    
    7,000Advanced BioEnergy secured term loan
    
    
    12.00
    %
    
    
    10,000
    
    
    
    10,000Other
    
    
    7.50
    %
    
    
    189
    
    
    
    193Total outstanding
    
    
    
    
    
    
    98,239
    
    
    
    102,693Less: Amounts due within one year
    
    
    
    
    
    
    (23,405
    )
    
    
    (20,055
    )Long-term debt
    
    
    
    
    
    $
    74,834
    
    
    $
    82,638
  2010
    
    $
    23,4052011
    
    
    11,2212012
    
    
    11,2212013
    
    
    11,3872014
    
    
    12,265Thereafter
    
    
    28,740Total debt
    
    $
    98,239
 Summary of Critical Accounting Policies and Estimates
  Revenue Recognition
  Inventories
  Long-Lived Asset Impairment
  21




---



##### Table of Contents



Subsequent Events
 Subsequent Events
 OFF-BALANCE SHEET ARRANGEMENTS
  GOVERNMENT PROGRAMS, TAX CREDITS AND TAX INCREMENT FINANCING
   
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    22




---



##### Table of Contents



Estimated
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change in Annualat Risk
    
    
    
    
    
    Hypothetical
    
    
    
    
    
    OperatingVolume(1)
    
    
    
    
    
    Change in
    
    Spot
    
    Income(In millions)
    
    Units
    
    Price
    
    Price(2)
    
    (In millions)Ethanol
    
    
    82.7
    
    
    gallons
    
    
    10.0
    %
    
    $
    1.64
    
    
    $
    13.6Distiller grains
    
    
    .1
    
    
    tons
    
    
    10.0
    %
    
    
    117.00
    
    
    
    1.2Corn
    
    
    34.2
    
    
    bushels
    
    
    10.0
    %
    
    
    3.48
    
    
    
    11.9Natural gas
    
    
    2.8
    
    
    btus
    
    
    10.0
    %
    
    
    3.84
    
    
    
    1.1
 
 (1)
    
    The volume of ethanol at risk is based on the assumption that we
will enter into contracts for 22% of our expected annual 106
million gallons of production capacity. The volume of distiller
grains at risk is based on the assumption that we will enter into
contracts for 59% of our expected annual distillers grain
production of 334,000 tons. The volume of corn is based on the
assumption that we will enter into forward contracts for 13% of
our estimated current 39.3 million bushel annual requirement. The
volume of natural gas at risk is based on the assumption that we
will continue to lock in one months gas usage.(2)
    
    Current spot prices include the CBOT price per gallon of ethanol
and the price per bushel of corn, the NYMEX price per mmbtu of
natural gas and our listed local advertised dried distiller grain
price per ton as of June 30, 2009.
 INTEREST RATE/FOREIGN EXCHANGE RISK
   IMPACT OF INFLATION
  23




---



##### Table of Contents



Item 4T.
    
    Controls and Procedures
  
 PART II. OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  HGF is currently not in compliance with its debt financing agreement with its lenders and we
anticipate that our equity interest in HGF will be lost.
  Our anticipated revenues of $960,000 per year from our management of HGF following foreclosure on
our equity interest in HGF may not be received.
  24




---



##### Table of Contents



We may not be able to meet the requirements of our Forbearance Agreement with PJC Capital.
  Our directors have other business and management responsibilities that may cause conflicts of
interest in the allocation of their time and services to our business.
  Our dependence on revenue from a single plant could result in adverse operating results.
  Access to certain funds held in escrow may be delayed or prohibited which could materially impact
our ability to repay PJC Capital under the terms of the restructured note.
  The State of Nebraska may not reimburse us for the tax incentives laid out in our Nebraska
Advantage Act contract.
  25




---



##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults Upon Senior Securities
     Heartland Grain Fuels
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
  
 Item 5.
    
    Other Information
  
 Item 6.
    
    Exhibits
  26




---



##### Table of Contents



SIGNATURES
  ADVANCED BIOENERGY, LLCDate: August 13, 2009
    By:
    /s/ Richard R. PetersonRichard R. PetersonPresident, Chief Executive

Officer, Chief Financial Officer 27




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description
    
    Method of Filing3.1
    
    Certificate of Formation
    
    Incorporated by
reference to
Exhibit 2.1 to the
Registrants
Current Report on
Form 8-K, filed on
November 8, 2006
(File No.
000-52421).3.2
    
    Third Amended and Restated Operating
Agreement of the Registrant
    
    Incorporated herein
by reference to
Exhibit 2.2 to the
Registrants
Current Report on
Form 8-K, filed on
November 8, 2006
(File No.
000-52421).10.1
    
    Forbearance Agreement made and
entered into as of June 1, 2009 by
and between Advanced BioEnergy, LLC
and PJC Capital LLC
    
    Incorporated herein
by reference to
Exhibit 10.2 to the
Registrants
Current Report on
Form 8-K, filed on
June 4, 2009 (File
No. 000-52421).10.2
    
    Amendment to the Master Loan
Agreement effective as of May 12,
2009 between Farm Credit Services of
America, FLCA and ABE Fairmont, LLC
    
    Incorporated herein
by reference to
Exhibit 10.5 to the
Registrants
Current Report on
Form 8-K, filed on
June 5, 2009 (File
No. 000-52421).10.3
    
    Amendment to the Construction and
Term Loan Supplement effective as of
May 12, 2009 between Farm Credit
Services of America, FLCA and ABE
Fairmont, LLC
    
    Incorporated herein
by reference to
Exhibit 10.6 to the
Registrants
Current Report on
Form 8-K, filed on
June 4, 2009 (File
No. 000-52421).10.4
    
    Unit holder letter dated July 2, 2009
    
    Incorporated herein
by reference to
Exhibit 99.1 to the
Registrants
Current Report on
Form 8-K, filed on
August 10, 2009
(File No.
000-52421).31.1
    
    Rule 13a-14(a)/15d-14(a)
Certification by Principal Executive
Officer
    
    Filed Electronically31.2
    
    Rule 13a-14(a)/15d-14(a)
Certification by Principal Financial
and Accounting Officer
    
    Filed Electronically32
    
    Section 1350 Certifications
    
    Filed Electronically
 28