##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED: June 30, 2008
 Commission File Number: 000-52421
 ADVANCED BIOENERGY, LLC
  Delaware
    
    10201 Wayzata Boulevard, Suite 250
    
    20-2281511Minneapolis, Minnesota 55305(763) 226-2701
 State or Other Jurisdiction of
    
    (Address, including zip code, and telephone number,
    
    (I.R.S. EmployerIncorporation or
    
    including area code, of Principal Executive Office)
    
    Identification No.)Organization)
 o þ
 o þ
  o þ




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##### 



ADVANCED BIOENERGY, LLC
FORM 10-QSB
Index
 PagePART I. FINANCIAL INFORMATION
    
    
    1Item 1.
    
    Financial Statements
    
    
    1Condensed Consolidated Balance Sheets
    
    
    1Condensed Consolidated Statements of Operations
    
    
    2Condensed Consolidated Statements of Changes in Members Equity
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis or Plan of Operation
    
    
    10Item 3A(T).
    
    Controls and Procedures
    
    
    21PART II. OTHER INFORMATION
    
    
    21Item 1.
    
    Legal Proceedings
    
    
    21Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 3.
    
    Defaults Upon Senior Securities
    
    
    21Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    21Item 5.
    
    Other Information
    
    
    22Item 6.
    
    Exhibits
    
    
    22SIGNATURES
    
    
    22Certification of Principal Executive OfficerCertification of Principal Financial and Accounting OfficerSection 1350 Certification
  ii




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
 (Dollars in thousands)
 June 30,
    
    
    September 30,2008
    
    
    2007(unaudited)AssetsCurrent assets
Cash and cash equivalents
    
    $
    4,027
    
    
    $
    7,111Accounts receivable:Trade accounts receivable
    
    
    16,179
    
    
    
    3,067Due from broker
    
    
    928
    
    
    
    1,036Inventories
    
    
    18,550
    
    
    
    7,798Prepaid expenses
    
    
    3,622
    
    
    
    1,202Current portion of restricted cash
    
    
    9,543
    
    
    
    1,778Total current assets
    
    
    52,849
    
    
    
    21,992Property and equipment, net
    
    
    258,171
    
    
    
    242,937Other assetsRestricted cash
    
    
    3,093
    
    
    
    Financing costs, net
    
    
    6,637
    
    
    
    1,559Goodwill
    
    
    29,148
    
    
    
    29,148Other assets
    
    
    1,135
    
    
    
    1,199Total assets
    
    $
    351,033
    
    
    $
    296,835Liabilities and members equityCurrent liabilities:Accounts payable
    
    $
    11,459
    
    
    $
    26,959Accrued expenses
    
    
    5,668
    
    
    
    5,768Derivative financial instruments
    
    
    2,792
    
    
    
    1,172Current portion of long-term debt
    
    
    41,882
    
    
    
    111,779Total current liabilities
    
    
    61,801
    
    
    
    145,678Long term liabilitiesDeferred income
    
    
    6,732
    
    
    
    6,732Other liabilities
    
    
    1,588
    
    
    
    Long-term debt
    
    
    169,336
    
    
    
    51,471Total liabilities
    
    
    239,457
    
    
    
    203,881Commitments and contingencies (Note 4)Members equityMembers capital, no par value,
authorized 20,000,000, 9,909,162 and
9,848,028 units issued and outstanding and 1,894,904 and 0 units subscribed for at June
30, 2008 and September 30, 2007,
respectively
    
    
    153,460
    
    
    
    120,019Retained deficit
    
    
    (40,296
    )
    
    
    (27,065
    )Other comprehensive loss
    
    
    (1,588
    )
    
    
    Total members equity
    
    
    111,576
    
    
    
    92,954Total liabilities and members equity
    
    $
    351,033
    
    
    $
    296,835
  1




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ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Condensed Consolidated Statements of Operations
 (Unaudited)
 (Dollars in thousands)
 Three Months Ended
    
    
    Nine Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net salesEthanol and related products
    
    $
    117,745
    
    
    $
    14,797
    
    
    $
    272,248
    
    
    $
    33,664Other
    
    
    
    
    
    
    2,965
    
    
    
    362
    
    
    
    6,288Total net sales
    
    
    117,745
    
    
    
    17,762
    
    
    
    272,610
    
    
    
    39,952Cost of goods sold
    
    
    116,925
    
    
    
    22,981
    
    
    
    260,836
    
    
    
    46,546Gross profit (loss)
    
    
    820
    
    
    
    (5,219
    )
    
    
    11,774
    
    
    
    (6,594
    )Selling, general and administrative
    
    
    4,690
    
    
    
    2,483
    
    
    
    10,493
    
    
    
    6,827Operating income (loss)
    
    
    (3,870
    )
    
    
    (7,702
    )
    
    
    1,281
    
    
    
    (13,421
    )Other income
    
    
    222
    
    
    
    
    
    
    
    768
    
    
    
    Interest income
    
    
    108
    
    
    
    256
    
    
    
    536
    
    
    
    805Interest expense
    
    
    (6,056
    )
    
    
    (343
    )
    
    
    (15,816
    )
    
    
    (1,302
    )Net loss before minority interest
    
    
    (9,596
    )
    
    
    (7,789
    )
    
    
    (13,231
    )
    
    
    (13,918
    )Minority interest
    
    
    
    
    
    
    (890
    )
    
    
    
    
    
    
    (1,770
    )Net loss
    
    $
    (9,596
    )
    
    $
    (8,679
    )
    
    $
    (13,231
    )
    
    $
    (15,688
    )Comprehensive loss
    
    $
    (7,582
    )
    
    $
    (8,679
    )
    
    $
    (14,819
    )
    
    $
    (15,688
    )Basic & diluted weighted average
units outstanding
    
    
    9,893,526
    
    
    
    9,131,338
    
    
    
    9,864,074
    
    
    
    8,501,482Loss per unit  basic & diluted
    
    $
    (0.97
    )
    
    $
    (0.95
    )
    
    $
    (1.34
    )
    
    $
    (1.84
    )
  2




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ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Condensed Consolidated Statements of Changes in Members Equity
 For the Nine Months Ended June 30, 2008
 (Unaudited)
 (Dollars in thousands)
 OtherMember
    
    
    Members
    
    
    Retained
    
    
    Comprehensive
    
    
    Total MembersUnits
    
    
    Capital
    
    
    Deficit
    
    
    Loss
    
    
    EquityMEMBERS EQUITY 
September 30, 2007
    
    
    9,848,028
    
    
    $
    120,019
    
    
    $
    (27,065
    )
    
    $
    
    
    
    $
    92,954Issuance of membership
units to officers
    
    
    132,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Units forfeited
    
    
    (25,463
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Units repurchased
    
    
    (45,403
    )
    
    
    (467
    )
    
    
    
    
    
    
    
    
    
    
    (467
    )Unit compensation expense
    
    
    
    
    
    
    1,330
    
    
    
    
    
    
    
    
    
    
    
    1,330Issued warrants in
connection with debt
financing
    
    
    
    
    
    
    2,260
    
    
    
    
    
    
    
    
    
    
    
    2,260Equity issued in
connection with debt
conversion
    
    
    
    
    
    
    30,318
    
    
    
    
    
    
    
    
    
    
    
    30,318Market rate change in
hedged interest rate
swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,588
    )
    
    
    (1,588
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (13,231
    )
    
    
    
    
    
    
    (13,231
    )MEMBERS EQUITY  June
30, 2008
    
    
    9,909,162
    
    
    $
    153,460
    
    
    $
    (40,296
    )
    
    $
    (1,588
    )
    
    $
    111,576
  3




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ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 (Dollars in thousands)
 Nine Months EndedJune 30,2008
    
    
    2007Cash used in operating activitiesNet loss
    
    $
    (13,231
    )
    
    $
    (15,688
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    15,649
    
    
    
    3,634Amortization of financing costs
    
    
    752
    
    
    
    Amortization of debt discount
    
    
    1,695
    
    
    
    Unit compensation related to Indiana Renewable Fuels, L.P. contingent units
    
    
    750
    
    
    
    Unit compensation expense
    
    
    580
    
    
    
    1,293Unrealized loss on derivative financial instruments
    
    
    1,620
    
    
    
    20,279Minority interest in net income
    
    
    
    
    
    
    1,771Changes in working capital componentsReceivables
    
    
    (13,004
    )
    
    
    (19,580
    )Inventories
    
    
    (10,752
    )
    
    
    (174
    )Prepaid expenses
    
    
    (2,420
    )
    
    
    13Accounts payable
    
    
    6,752
    
    
    
    2,713Accrued expenses
    
    
    3,015
    
    
    
    (26
    )Net cash used in operating activities
    
    
    (8,594
    )
    
    
    (5,765
    )Cash used in investing activitiesPurchase of other assets
    
    
    
    
    
    
    (486
    )Purchase of Heartland Grain Fuels, LP, net of cash acquired
    
    
    
    
    
    
    (15,204
    )Purchase of property and equipment
    
    
    (51,707
    )
    
    
    (104,915
    )Change in other assets
    
    
    64
    
    
    
    (Increase) decrease in restricted cash
    
    
    (10,858
    )
    
    
    30,505Net cash used in investing activities
    
    
    (62,501
    )
    
    
    (90,100
    )Cash flows from financing activitiesPayments on debt
    
    
    (62,114
    )
    
    
    (875
    )Distribution to members
    
    
    
    
    
    
    (623
    )Payment of deferred financing costs
    
    
    
    
    
    
    (200
    )Proceeds from long-term debt
    
    
    130,592
    
    
    
    107,798Repurchase of member units
    
    
    (467
    )
    
    
    Net cash provided by financing activities
    
    
    68,011
    
    
    
    106,100Net increase (decrease) in cash and cash equivalents
    
    
    (3,084
    )
    
    
    10,235Beginning cash and cash equivalents
    
    
    7,111
    
    
    
    10,814Ending cash and cash equivalents
    
    $
    4,027
    
    
    $
    21,049Supplemental disclosure of non cash investing and financing activitiesDeferred income incurred for deposits and deferred offering costs
    
    $
    
    
    
    $
    1,373Membership units issued for acquisition of asset
    
    
    
    
    
    
    52,632Accounts payable incurred for construction in process
    
    
    200
    
    
    
    12,815Deferred financing costs incurred for acquisition of debt
    
    
    5,984
    
    
    
    Unrealized loss on interest rate swaps
    
    
    1,588
    
    
    
    Financing costs amortized to construction in progress
    
    
    154
    
    
    
    106Promissory notes and accrued interest converted into membership units
    
    
    30,318
    
    
    
    Warrants issued in connection with debt
    
    
    2,260
    
    
    
    Supplemental disclosure of cash flow information:Cash paid for interest, net of capitalized of interest of $2,394 and $3,500
    
    $
    18,373
    
    
    $
    4,620
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ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Notes to Condensed Consolidated Financial Statements (unaudited)
 1. Organization and Significant Accounting Policies
     Interest Rate Swaps
  Revenue Recognition
  Unit Based Compensation
  Loss per Unit
  5




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Restricted Cash
  Accounting Estimates
  Reclassifications
  2. Inventories and Property and Equipment
  June 30,
    
    
    September 30,2008
    
    
    2007Corn
    
    $
    5,640
    
    
    $
    5,500Chemicals
    
    
    608
    
    
    
    164Work in process
    
    
    3,303
    
    
    
    552Ethanol
    
    
    5,655
    
    
    
    609Distiller grains
    
    
    1,465
    
    
    
    58Supplies and critical parts
    
    
    1,879
    
    
    
    915Total
    
    $
    18,550
    
    
    $
    7,798
 June 30,
    
    
    September 30,2008
    
    
    2007Land
    
    $
    3,884
    
    
    $
    2,428Buildings
    
    
    20,701
    
    
    
    7,178Process equipment
    
    
    251,131
    
    
    
    51,597Office equipment
    
    
    977
    
    
    
    590Construction in process
    
    
    1,619
    
    
    
    185,636Property and equipment, gross
    
    
    278,312
    
    
    
    247,429Accumulated depreciation
    
    
    (20,141
    )
    
    
    (4,492
    )Property and equipment, net
    
    $
    258,171
    
    
    $
    242,937
  3. Long Term Debt
  June 30, 2008
    
    
    June 30, 2008
    
    
    September 30, 2007Interest Rate
    
    
    Principal Amount
    
    
    Principal AmountHGF senior credit facility
    
    
    6.03  8.27
    %
    
    $
    89,339
    
    
    $
    42,000HGF working capital
    
    
    5.96  6.32
    %
    
    
    7,500
    
    
    
    HGF subordinated solid waste facilities revenue bonds
    
    
    8.25
    %
    
    
    19,000
    
    
    
    ABE Heartland note payable
    
    
    15
    %
    
    
    
    
    
    
    5,000ABE Fairmont senior credit facility
    
    
    5.50  7.53
    %
    
    
    78,750
    
    
    
    83,124ABE Fairmont seasonal line
    
    
    5.00
    %
    
    
    
    
    
    
    ABE Fairmont subordinate exempt facilities bonds
    
    
    6.75
    %
    
    
    7,000
    
    
    
    7,000Advanced BioEnergy convertible note
    
    
    15.865
    %
    
    
    
    
    
    
    25,929Advanced BioEnergy secured term loan
    
    
    13
    %
    
    
    9,435
    
    
    
    Other
    
    
    7.5
    %
    
    
    194
    
    
    
    197Total outstanding
    
    
    
    
    
    
    211,218
    
    
    
    163,250Less: amounts due within one year
    
    
    
    
    
    
    (41,882
    )
    
    
    (111,779
    )Long-term debt
    
    
    
    
    
    $
    169,336
    
    
    $
    51,471
 6




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2009
    
    $
    41,8822010
    
    
    14,4472011
    
    
    15,2632012
    
    
    15,2632013
    
    
    15,429Thereafter
    
    
    108,934Total debt
    
    $
    211,218
 Senior Credit Agreement for the South Dakota Plants
      Subordinate Solid Waste Facilities Revenue Bonds
    Senior Credit Facility for the Fairmont Plant
  7




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Secured Term Loan Note
    Subordinated Convertible Debt Financing
  4. Commitments and Contingencies
  5. Members Units
 Convertible Notes
  8




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Membership Unit Purchase
  6. Major Customers
      June 30,
    
    June 30,2008
    
    2007Gavilon  HGF EthanolNine month revenues
    
    $
    12,093
    
    
    $
    Receivable balance
    
    
    3,628
    
    
    
    RPMG  Fairmont EthanolNine month revenues
    
    
    128,715
    
    
    
    Receivable balance
    
    
    9,732
    
    
    
    Dakotaland  HGF Distiller GrainsNine month revenues
    
    
    10,260
    
    
    
    6,494Receivable balance
    
    
    883
    
    
    
    254CHS  Fairmont Distiller GrainsNine month revenues
    
    
    21,414
    
    
    
    Receivable balance
    
    
    387
    
    
    
    
 7. Risk Management
  9




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Three Months Ended
    
    Nine Months EndedJune 30,
    
    June 30,
    
    June 30,
    
    June 30,2008
    
    2007
    
    2008
    
    2007Ethanol related losses
    
    $
    (3,273
    )
    
    $
    (6,483
    )
    
    $
    (3,442
    )
    
    $
    (17,290
    )Corn gains (losses)
    
    
    1,752
    
    
    
    (3,332
    )
    
    
    2,112
    
    
    
    2,576
  Accounting for Derivative
Instruments and Hedging Activities
  8. Comprehensive Loss
  Three Months Ended
    
    
    Nine Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net loss as reported
    
    $
    (9,596
    )
    
    $
    (8,679
    )
    
    $
    (13,231
    )
    
    $
    (15,688
    )Unrealized gains (losses) on interest rate swaps
    
    
    2,014
    
    
    
    
    
    
    
    (1,588
    )
    
    
    Comprehensive loss
    
    $
    (7,582
    )
    
    $
    (8,679
    )
    
    $
    (14,819
    )
    
    $
    (15,688
    )
 
 ITEM 2. Managements Discussion and Analysis or Plan of Operation Information Regarding Forward-Looking Statements
  
    
    our operation results are subject to fluctuations in the prices of grain, utilities
and ethanol, which are affected by various factors including weather, production
levels, supply, demand, changes in technology and government support and regulations;
 10




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
    
    margins can be volatile and can evaporate, which may impact our ability to meet
current obligations and debt service requirements at our operating entities;
    
    our hedging transactions and mitigation strategies could materially harm our
results;
    
    cash distributions depend upon our future financial and operational performance and
will be affected by debt covenants, reserves and operating expenditures;
    
    current governmental mandated tariffs, credits and standards may be reduced or
eliminated;
    
    alternative fuel additives may be developed that are superior to or cheaper than
ethanol;
    
    transportation, storage and blending infrastructure may become impaired, preventing
ethanol from reaching markets;
    
    our operation facilities may experience technical difficulties and not produce the
gallons of ethanol as expected;
    
    our units are subject to a number of transfer restrictions and no public market
exists for our units and none is expected to develop.
  COMPANY OVERVIEW
   EstimatedEstimated
    
    AnnualAnnual
    
    Distillers
    
    EstimatedEthanol
    
    Grains
    
    Annual Corn
    
    Production
    
    PrimaryLocation
    
    Status
    
    Production
    
    Production (1)
    
    Processed
    
    Process
    
    Energy Source
    
    Builder(million gallons
    
    (tons)
    
    (millionper year)
    
    
    
    
    
    bushels)Fairmont, NE
    
    In operation
    
    
    110
    
    
    
    354,000
    
    
    
    39.3
    
    
    Dry-Mill
    
    Natural Gas
    
    FagenAberdeen, SD I
    
    In operation
    
    
    9
    
    
    
    29,000
    
    
    
    3.2
    
    
    Dry-Mill
    
    Natural Gas
    
    BroinAberdeen, SD II
    
    In operation
    (2)
    
    46
    
    
    
    148,000
    
    
    
    16.4
    
    
    Dry-Mill
    
    Natural Gas
    
    ICMHuron, SD
    
    In operation
    
    
    32
    
    
    
    103,000
    
    
    
    11.4
    
    
    Dry-Mill
    
    Natural Gas
    
    ICM
 
 (1)
    
    Our plants produce and sell a combination of wet, modified and dried
distiller grains. The stated quantities are on a fully dried basis
operating at production capacity.(2)
    
    The Aberdeen plant expansion commenced operations in January 2008. 11




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PLAN OF OPERATION THROUGH JUNE 2009
   RESULTS OF OPERATIONS
 Three Months Ended June 30, 2008 compared to the Three Months Ended June 30, 2007
  Three Months Ended
    
    Three Months EndedJune 30, 2008
    
    June 30, 2007Average
    
    
    
    
    
    AverageSold/Ground
    
    Net Price/Cost
    
    Sold/Ground
    
    Net Price/CostEthanol (gallons)
    
    
    43,944,004
    
    
    $
    2.31
    
    
    
    10,350,735
    
    
    $
    2.05Dried distiller grains (tons)
    
    
    82,746
    
    
    
    134.98
    
    
    
    6,690
    
    
    
    117.49Wet distiller grains (tons)
    
    
    115,612
    
    
    
    52.49
    
    
    
    68,158
    
    
    
    29.26Corn (bushels)
    
    
    15,826,751
    
    
    $
    5.50
    
    
    
    3,755,295
    
    
    $
    3.58Gas (mmbtus)
    
    
    1,242,943
    
    
    
    10.50
    
    
    
    290,179
    
    
    
    7.54
 Net Sales
  Cost of Goods Sold
    Gross Profit
  12




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Selling, General, and Administrative Expenses
  Interest Expense
  Nine Months Ended June 30, 2008 compared to the Nine Months Ended June 30, 2007
  Nine Months Ended
    
    Nine Months EndedJune 30, 2008
    
    June 30, 2007Average
    
    
    
    
    
    AverageSold/Ground
    
    Net Price/Cost
    
    Sold/Ground
    
    Net Price/CostEthanol (gallons)
    
    
    109,476,658
    
    
    $
    2.08
    
    
    
    26,204,131
    
    
    $
    1.94Dried distiller grains (tons)
    
    
    226,804
    
    
    
    125.0
    
    
    
    17,376
    
    
    
    95.47Wet distiller grains (tons)
    
    
    269,578
    
    
    
    41.38
    
    
    
    176,079
    
    
    
    27.09Corn (bushels)
    
    
    40,549,233
    
    
    
    4.66
    
    
    
    9,532,782
    
    
    
    3.54Gas (mmbtus)
    
    
    3,272,050
    
    
    
    8.42
    
    
    
    748,846
    
    
    
    8.57
 Net Sales
  Cost of Goods Sold
    Gross Profit
  13




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##### Table of Contents



Selling, General, and Administrative Expenses
  Interest Expenses
  Trends and Uncertainties Impacting the Ethanol Industry and our Future Operations
 Overview
   Legislation
  The Renewable Fuels Standard
   The Clean Air Act and Oxygenated Gasoline Program
  14




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##### Table of Contents



The Volumetric Ethanol Excise Tax Credit
   Clean-Fuel Vehicle Refueling Equipment Tax Credit
  Imported Ethanol Tariffs and Quotas
    Technology Developments
     15




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##### Table of Contents



COMPETITION
 Primary Competition
      Competition from Other Alternative Fuels
  Competition for Co-Products
  LIQUIDITY AND CAPITAL RESOURCES
 Cash Flows
 Cash Flows Used in Operating Activities.
 Cash Used in Investing Activities.
 Cash Provided by Financing Activities.
 16




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##### Table of Contents



ABE LLC
     ABE Fairmont
      17




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##### Table of Contents



HGF
 st
   Credit Arrangements
  June 30, 2008
    
    
    June 30, 2008
    
    
    September 30, 2007Interest Rate
    
    
    Principal Amount
    
    
    Principal AmountHGF senior credit facility
    
    
    6.03  8.27
    %
    
    $
    89,339
    
    
    $
    42,000HGF working capital
    
    
    5.96  6.32
    %
    
    
    7,500
    
    
    
    HGF subordinate solid waste facilities revenue bonds
    
    
    8.25
    %
    
    
    19,000
    
    
    
    ABE Heartland note payable
    
    
    15
    %
    
    
    
    
    
    
    5,000ABE Fairmont senior credit facility
    
    
    5.50  7.53
    %
    
    
    78,750
    
    
    
    83,124ABE Fairmont seasonal line
    
    
    5.00
    %
    
    
    
    
    
    
    ABE Fairmont subordinate exempt facilities bonds
    
    
    6.75
    %
    
    
    7,000
    
    
    
    7,000Advanced BioEnergy convertible note
    
    
    15.865
    %
    
    
    
    
    
    
    25,929Advanced BioEnergy secured term loan
    
    
    13
    %
    
    
    9,435
    
    
    
    Other
    
    
    7.5
    %
    
    
    194
    
    
    
    197Total outstanding
    
    
    
    
    
    
    211,218
    
    
    
    163,250Less: amounts due within one year
    
    
    
    
    
    
    (41,882
    )
    
    
    (111,779
    )Long-term debt
    
    
    
    
    
    $
    169,336
    
    
    $
    51,471
  18




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##### Table of Contents



2009
    
    $
    41,8822010
    
    
    14,4472011
    
    
    15,2632012
    
    
    15,2632013
    
    
    15,249Thereafter
    
    
    108,934Total debt
    
    $
    211,218
 Convertible Notes
   Summary of Critical Accounting Policies and Estimates
  Revenue Recognition
  Quantitative and Qualitative Disclosures about Market Risk for Our Current Operations
     19




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##### Table of Contents



EstimatedAt Risk
    
    
    
    
    
    Hypothetical
    
    
    
    
    
    Change in AnnualVolume(1)
    
    
    
    
    
    Change in
    
    Spot
    
    Operating Income(in millions)
    
    Units
    
    Price
    
    Price(2)
    
    (in millions)Ethanol
    
    
    160.7
    
    
    gallons
    
    
    10.0
    %
    
    $
    2.83
    
    
    $
    45.5Distiller grains
    
    
    0.42
    
    
    tons
    
    
    10.0
    %
    
    
    195
    
    
    
    8.3Corn
    
    
    58.4
    
    
    bushels
    
    
    10.0
    %
    
    
    7.25
    
    
    
    42.3Natural gas
    
    
    6.1
    
    
    btus
    
    
    10.0
    %
    
    
    13.53
    
    
    
    8.3
 
 (1)
    
    The volume of ethanol at risk is based on the assumption that we will
enter into contracts for 18.43% of our expected annual gallons
capacity of 197 million gallons at a 5% denaturant blend rate. The
volume of distiller grains at risk is based on the assumption that we
will enter into contracts for 33.1 % of our expected annual distiller
grain production of 634,000 tons. The volume of corn is based on the
assumption that we will enter into forward contracts for 17.0% of our
estimated current 70.3 million bushel annual requirement. The volume
of natural gas is based on the assumption that we will not enter into
any forward contracts for our estimated 6,107,000 mmbtu annual
requirements.(2)
    
    Current spot prices include the CBOT price per gallon of ethanol and
the price per bushel of corn and the New York Mercantile Exchange
price per mmbtu of natural gas as of June 30, 2008. Interest Rate
  Impact of Inflation
  Off-Balance Sheet Arrangements
  Government Programs, Tax Credits And Tax Increment Financing
   20




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##### Table of Contents



ITEM 3A(T). Controls and Procedures
  
 PART II. OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 2. Unregistered Sales of Equity Securities And Use Of Proceeds
  
 ITEM 3. Defaults Upon Senior Securities
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
  21




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##### Table of Contents



ITEM 5. Other Information
  
 ITEM 6. Exhibits
  
 SIGNATURES
  ADVANCED BIOENERGY, LLCDate: August 8, 2008
    By:
    /s/ Revis L. Stephenson IIIRevis L. Stephenson IIIChairman and Chief Executive
Officer (Principal Executive
Officer)Date: August 8, 2008
    By:
    /s/ Richard PetersonRichard PetersonVice President of Accounting and
Finance and Chief Financial
Officer (Principal Financial and
Accounting Officer) 22




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description
    
    Method of Filing3.1
    
    Certificate of Formation
    
    Incorporated herein by reference
to Exhibit 3.1
to the Registrants
Registration Statement on
Form SB-2, filed on
May 27, 2005 (File No.
333-125335).3.2
    
    Third Amended and Restated
Operating Agreement of the
Registrant
    
    Incorporated herein by
reference to Exhibit 3.2
to the Registrants Post
Effective Amendment No. 1
to Registration Statement
on Form SB-2, filed on
February 10, 2006 (File
No. 333-125335).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