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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal quarter ended March 31, 2008
 OR
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For
the transition period from  
to .
 Commission file number 000-52426
 E ENERGY ADAMS, LLC
  Nebraska
    
    20-2627531(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 13238 East Aspen Road
Adams, NE 68301
 (402) 988-4655
 þ o
 o þ
   o þ




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INDEX
 Page No.PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis and Plan of Operations
    
    
    14Item 3. Controls and Procedures
    
    
    22PART II. OTHER INFORMATION
    
    
    22Item 1. Legal Proceeding
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    23Item 5. Other Information
    
    
    23Item 6. Exhibits
    
    
    24SIGNATURES
    
    
    24Exhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 E ENERGY ADAMS, LLC
  March 31,2008(Unaudited)ASSETSCurrent AssetsCash and equivalents
    
    $
    4,547,799Restricted cash
    
    
    1,469,973Trade accounts receivable
    
    
    5,134,370Inventories
    
    
    11,386,921Prepaid and other
    
    
    1,213,369Total current assets
    
    
    23,752,432Property and EquipmentLand
    
    
    1,054,282Land improvements
    
    
    7,831,832Computers and office equipment
    
    
    896,366Buildings
    
    
    1,503,913Equipment
    
    
    76,622,613Railroad improvements
    
    
    5,420,982Total property and equipment
    
    
    93,329,988Less accumulated depreciation
    
    
    2,491,905Net property and equipment
    
    
    90,838,083Other AssetsRestricted cash
    
    
    520,983Investments and other
    
    
    94,823Debt issuance costs, net of amortization
    
    
    477,388Other intangibles, net of amortization
    
    
    979,166Total other assets
    
    
    2,072,360Total Assets
    
    $
    116,662,875LIABILITIES AND MEMBERS EQUITYCurrent LiabilitiesAdditional revolving loan
    
    $
    9,999,970Current maturities of long-term debt
    
    
    4,959,996Accounts payable
    
    
    2,049,153Construction and retainage payable
    
    
    116,539Construction and retainage payable  related party
    
    
    150,000Accrued expenses
    
    
    670,906Derivative instruments
    
    
    1,197,389Total current liabilities
    
    
    19,143,953Long-Term Debt, less current maturities
    
    
    52,130,081Note payable  related party
    
    
    1,000,000Members EquityMember contributions, net of costs related to capital contributions,
5,133 units outstanding at March 31, 2008 and September 30, 2007
    
    
    44,388,841Total members equity
    
    
    44,388,841Total Liabilities and Members Equity
    
    $
    116,662,875
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E ENERGY ADAMS, LLC
  Quarter
    
    
    QuarterEnded
    
    
    EndedMarch 31,
    
    
    March 31,2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    32,298,172
    
    
    $
    Cost of Goods Sold
    
    
    28,498,489
    
    
    
    Gross Profit (Loss)
    
    
    3,799,683
    
    
    
    Operating ExpensesProfessional and consulting fees
    
    
    156,104
    
    
    
    140,671General and administrative
    
    
    794,173
    
    
    
    219,699Total operating expenses
    
    
    950,277
    
    
    
    360,370Operating Income (Loss)
    
    
    2,849,406
    
    
    
    (360,370
    )Other Income (Expense)Other income
    
    
    106,488
    
    
    
    145,276Loss on derivative instruments
    
    
    
    
    
    
    (1,259,124
    )Interest income
    
    
    20,146
    
    
    
    223,658Interest expense
    
    
    (1,170,396
    )
    
    
    (6,725
    )Total other income (expense)
    
    
    (1,043,762
    )
    
    
    (896,915
    )Net Income (Loss)
    
    $
    1,805,644
    
    
    $
    (1,257,285
    )Weighted Average Units Outstanding  basic
and diluted
    
    
    5,133
    
    
    
    5,133Net Income (Loss) Per Unit  basic and diluted
    
    $
    351.77
    
    
    $
    (244.94
    )
   4




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E ENERGY ADAMS, LLC
  Six Months
    
    
    Six MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    49,263,451
    
    
    $
    Cost of Goods Sold
    
    
    47,720,126
    
    
    
    Gross Profit (Loss)
    
    
    1,543,325
    
    
    
    Operating ExpensesProfessional and consulting fees
    
    
    373,085
    
    
    
    291,728General and administrative
    
    
    1,599,742
    
    
    
    335,419Total operating expenses
    
    
    1,972,827
    
    
    
    627,147Operating Income (Loss)
    
    
    (429,502
    )
    
    
    (627,147
    )Other Income (Expense)Other income
    
    
    131,012
    
    
    
    145,276Loss on derivative instruments
    
    
    
    
    
    
    (1,259,124
    )Interest income
    
    
    39,774
    
    
    
    606,970Interest expense
    
    
    (1,944,484
    )
    
    
    (6,725
    )Total other income (expense)
    
    
    (1,773,698
    )
    
    
    (513,603
    )Net Income (Loss)
    
    $
    (2,203,200
    )
    
    $
    (1,140,750
    )Weighted Average Units Outstanding  basic and
diluted
    
    
    5,133
    
    
    
    5,133Net Income (Loss) Per Unit  basic and diluted
    
    $
    (429.22
    )
    
    $
    (222.24
    )
   5




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E ENERGY ADAMS, LLC
  Six Months
    
    
    Six MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)Cash Flows from Operating ActivitiesNet loss
    
    $
    (2,203,200
    )
    
    $
    (1,140,750
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    2,569,361
    
    
    
    5,709Dividend income
    
    
    
    
    
    
    (145,276
    )Change in fair value of derivative instruments
    
    
    1,181,700
    
    
    
    1,441,581Changes in assets and liabilitiesRestricted cash
    
    
    (1,130,465
    )
    
    
    (1,258,457
    )Accounts receivable
    
    
    (5,134,370
    )
    
    
    Prepaid and other
    
    
    (975,385
    )
    
    
    96,676Inventories
    
    
    (11,229,859
    )
    
    
    Accounts payable
    
    
    1,710,195
    
    
    
    (34,959
    )Accrued expenses
    
    
    278,241
    
    
    
    27,865Net cash used in operating activities
    
    
    (14,933,782
    )
    
    
    (1,007,611
    )Cash Flows from Investing ActivitiesProceeds from dividends
    
    
    
    
    
    
    52,840Payments for investments
    
    
    
    
    
    
    (1,000
    )Payments for other intangibles
    
    
    (571,080
    )
    
    
    Capital expenditures
    
    
    (17,640,491
    )
    
    
    (31,720,939
    )Net cash used in investing activities
    
    
    (18,211,571
    )
    
    
    (31,669,099
    )Cash Flows from Financing ActivitiesPayments for debt issuance costs
    
    
    (6,315
    )
    
    
    Proceeds from additional revolving loan
    
    
    14,500,000
    
    
    
    1,076,000Proceeds from term loans
    
    
    22,253,071
    
    
    
    Change in restricted cash
    
    
    175,487
    
    
    
    Net cash provided by financing activities
    
    
    36,922,243
    
    
    
    1,076,000Net Increase (Decrease) in Cash and Equivalents
    
    
    3,776,890
    
    
    
    (31,600,710
    )Cash and
Equivalents  Beginning of Period
    
    
    770,909
    
    
    
    40,916,036Cash and
Equivalents  End of Period
    
    $
    4,547,799
    
    
    $
    9,315,326Supplemental Cash Flow InformationCash paid during the period for:Interest
    
    
    1,728,974
    
    
    
    Capitalized interest
    
    
    249,671
    
    
    
    Total
    
    $
    1,978,645
    
    
    $
    Supplemental Disclosure of Noncash Investing and Financing ActivitiesConstruction costs in accounts payable
    
    $
    266,539
    
    
    $
    8,005,922Construction costs in Note payable, related party
    
    $
    1,000,000
    
    
    $
    Investment  dividend reinvestment
    
    $
    
    
    
    $
    92,436
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   Nature of Business
  Accounting Estimates
  Revenue Recognition
    7




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Cash and Equivalents
   Restricted Cash
  Accounts Receivable
   Property and Equipment
  Land improvements
    
    15 yearsOffice building
    
    20 yearsOffice equipment
    
    3-7 yearsPlant and process equipment
    
    7-20 years
  8




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Environmental Liabilities
  Fair Value of Financial Instruments
   Net Income (Loss) per Unit
   9




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2. INVENTORIES
  Raw materials
    
    $
    7,726,002Work in progress
    
    
    1,085,268Finished goods
    
    
    1,832,263Parts
    
    
    743,388Total
    
    $
    11,386,921
 3. DERIVATIVE INSTRUMENTS
   4. BANK FINANCING
   10




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Covenants
  Subordinated Debt
  Tax Increment Financing (TIF)
    11




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Note
Payable  Related party
   Term note
    
    $
    35,000,000Revolving loan
    
    
    14,500,000Tax increment financing
    
    
    5,035,000Note payable, related party
    
    
    1,000,000Subordinated debt
    
    
    2,500,000Capital lease
    
    
    55,077Totals
    
    
    58,090,077Less amounts due within one year
    
    
    4,959,996Net long-term debt
    
    $
    53,130,081
  2008
    
    $
    4,959,9962009
    
    
    5,155,6802010
    
    
    6,176,4122011
    
    
    5,634,5552012
    
    
    5,682,449After 2013
    
    
    30,480,985Total long-term debt
    
    $
    58,090,077
 5. COMMITMENTS AND CONTINGENCIES
 Design build agreement
   12




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Construction contracts
  Corn Contracts
  Consulting Contracts
  Employment Contracts
   13




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Item 2. Managements Discussion and Analysis and Plan of Operations.
 Forward Looking Statements
   
    
    Changes in the availability and price of corn;
 
    
    Lack of transport, storage and blending infrastructure preventing ethanol from reaching available markets;
 
    
    Fluctuation in U.S. petroleum prices and corresponding oil consumption;
 
    
    Ethanol supply exceeding demand and corresponding ethanol price reductions;
 
    
    Our ability to generate free cash flow to invest in our business, service our debt and pay our operating
expenses as they are incurred;
 
    
    Changes in the environmental regulations that apply to our plant operations;
 
    
    Changes in our business strategy, capital improvements or development plans;
 
    
    Changes in plant production capacity or technical difficulties in operating the plant;
 
    
    Changes in general economic conditions or the occurrence of certain events causing an economic impact in
the agriculture or automobile industries;
 
    
    Changes in federal and/or state laws (including the elimination of any federal and/or state ethanol tax
incentives);
 
    
    Changes and advances in ethanol production technology;
 
    
    Additional ethanol plants or expansions of ethanol plants built in close proximity to our ethanol
facility in south eastern Nebraska;
 
    
    Competition from alternative fuel additives;
 
    
    Changes in interest rates affecting our debt service payments;
 
    
    Our ability to retain key employees and maintain labor relations.
  14




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Available Information
 www.eenergyadams.com
 Overview
    Results of Operations for the Quarter Ended March 31, 2008
 Revenues
  Cost of Goods Sold
   15




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Operating Expenses
  Interest Expense and Interest Income
  Net Income (Loss)
  Results of Operations for the Six Months Ended March 31, 2008
  Six Months EndedMarch 31, 2008(Unaudited)Income Statement Data
    
    Amount
    
    
    %Revenues
    
    $
    49,263,451
    
    
    
    100.00Cost of Goods Sold
    
    $
    47,720,126
    
    
    
    96.87Gross Profit (Loss)
    
    $
    1,543,325
    
    
    
    3.13Operating Expenses
    
    $
    1,972,827
    
    
    
    4.00Operating Loss
    
    $
    (429,502
    )
    
    
    0.87Other Income
    
    $
    131,012
    
    
    
    0.27Interest Expense
    
    $
    (1,944,484
    )
    
    
    3.95Interest Income
    
    $
    39,774
    
    
    
    0.08Net Loss
    
    $
    (2,203,200
    )
    
    
    4.47
  16




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Revenues
     Cost of Goods Sold
     17




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Operating Expenses
  Interest Expense and Interest Income
  Net Income (Loss)
  Plan of Operations for the Next 12 Months
  Consulting Agreement
     18




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Permitting
  Marketing Agreements
  Commodity Price Risk Protection
    Employees
  Critical Accounting Estimates
   19




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Liquidity and Capital Resources
  Six Months Ended03/31/08(unaudited)Net cash used in operating activities
    
    $
    14,933,782Net cash used in investing activities
    
    $
    18,211,571Net cash provided by financing activities
    
    $
    36,922,243
 Cash Flow From Operations
  Cash Flow From Investing Activities
  Cash Flow From Financing Activities
  Short-Term and Long-Term Debt Sources
 Senior Credit Facility:
     20




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Subordinated Debt Financing.
 Tax Increment Financing.
  21




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Off-Balance Sheet Arrangements
  
 Item 3. 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
   22




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Item 4. Submission of Matters to a Vote of Security Holders
    For
    
    
    Against
    
    
    AbstainProposal One
    
    
    2,774
    
    
    
    117
    
    
    
    75Proposal Two
    
    
    2,752
    
    
    
    61
    
    
    
    153Proposal Three
    
    
    2,583
    
    
    
    179
    
    
    
    204Proposal Four
    
    
    2,751
    
    
    
    84
    
    
    
    131Dennis Boesiger
    
    
    2,357
    
    
    
    
    
    
    
    198Kenneth Brinkman
    
    
    2,358
    
    
    
    
    
    
    
    197Ron Miller
    
    
    2,364
    
    
    
    
    
    
    
    191Steven Dean
    
    
    2,389
    
    
    
    
    
    
    
    166David Lukens
    
    
    2,343
    
    
    
    
    
    
    
    212Tom Roode
    
    
    2,343
    
    
    
    
    
    
    
    212Jack L. Alderman
    
    
    2,404
    
    
    
    
    
    
    
    151Duane Wollenburg
    
    
    2,380
    
    
    
    
    
    
    
    175William Riechers
    
    
    2,362
    
    
    
    
    
    
    
    193
 
 Item 5. Other Information
 Distribution Policy
   23




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Item 6. Exhibits
  Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing10.1
    
    Promissory Note between E Energy Adams, LLC
and Fagen, Inc., dated February 12, 2008
    
    *10.2
    
    Third Amendment to Credit Agreement between E
Energy Adams, LLC and Farm Credit Services of
America, FLCA and Farm Credit Services of
America, PCA, dated March 11, 2008
    
    *10.3
    
    Engagement Letter between E Energy Adams, LLC
and Headwaters BD, LLC dated April 1, 2008
    
    *31.1
    
    Certificate
pursuant to 17 CFR 240 15d-14(a)
    
    *31.2
    
    Certificate pursuant to 17 CFR 240 15d-14(a)
    
    *32.1
    
    Certificate pursuant to 18 U.S.C. Section 1350
    
    *32.2
    
    Certificate pursuant to 18 U.S.C. Section 1350
    
    *
 
 (*)
    
    Filed herewith. 
 SIGNATURES
  E ENERGY ADAMS, LLCDate: May 14, 2008
    /s/ Carl D. SitzmannCarl D. SitzmannChief Executive Officer (Principal Executive Officer)Date: May 14, 2008
    /s/ Nicholas E. StovallNicholas E. StovallChief Financial Officer  (Principal Financial Officer)  24