##### Table of Contents



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 June 30, 2006
 OR
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from               to                 .
 Commission file number 333-128902
 E ENERGY ADAMS, LLC
  Nebraska
(State or other jurisdiction of
incorporation or organization)
    
    20-2627531
(I.R.S. Employer Identification No.)
 
 (402) 988-4655
 þ £
 o þ
   £ þ




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##### Table of Contents



INDEX
 Page No.PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis and Plan of Operations
    
    
    13Item 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
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    23Item 5. Other Information
    
    
    23Item 6. Exhibits
    
    
    23SIGNATURES
    
    
    24Promissory NoteRedevelopment ContractStandard Form of AgreementContingency Staffing Services AgreementCertificationCertificationCertificationCertification
 2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 E ENERGY ADAMS, LLC
  June 30,2006(Unaudited)ASSETSCurrent AssetsCash and equivalents
    
    $
    674,340Prepaid and other
    
    
    27,313Total current assets
    
    
    701,653Property and EquipmentLand
    
    
    1,054,282Computers and office equipment
    
    
    12,167Leasehold improvements
    
    
    4,408Total property and equipment
    
    
    1,070,857Less accumulated depreciation
    
    
    2,311Net property and equipment
    
    
    1,068,546Other AssetsDeferred offering costs
    
    
    385,424Debt issuance costs
    
    
    27,500Total other assets
    
    
    412,924Total Assets
    
    $
    2,183,123LIABILITIES AND MEMBERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    148,419Accrued interest and other
    
    
    19,803Note payable
    
    
    2,000,000Total current liabilities
    
    
    2,168,222Commitments and ContingenciesMembers EquityMember contributions, net of costs related to capital contributions,
194 units outstanding at June 30, 2006
    
    
    952,808Deficit accumulated during development stage
    
    
    (937,907
    )Total members equity
    
    
    14,901Total Liabilities and Members Equity
    
    $
    2,183,123
  3




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##### Table of Contents



E ENERGY ADAMS, LLC
  Quarter
    
    
    QuarterEnded
    
    
    EndedJune 30,
    
    
    June 30,2006
    
    
    2005(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    
    
    
    $
    Operating ExpensesProfessional and consulting fees
    
    
    180,687
    
    
    
    53,385Project coordinator
    
    
    24,585
    
    
    
    General and administrative
    
    
    96,894
    
    
    
    49,563Total operating expenses
    
    
    302,166
    
    
    
    102,948Operating Loss
    
    
    (302,166
    )
    
    
    (102,948
    )Other Income (Expense)Interest income
    
    
    2,998
    
    
    
    1,958Interest expense
    
    
    (30,082
    )
    
    
    Total other income (expense)
    
    
    (27,084
    )
    
    
    1,958Net Loss
    
    $
    (329,250
    )
    
    $
    (100,990
    )Weighted Average Units Outstanding
    
    
    194
    
    
    
    93Net Loss Per Unit
    
    $
    (1,697
    )
    
    $
    (1,086
    )
  4




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E ENERGY ADAMS, LLC
  Nine Months
    
    
    Nine Months
    
    
    From InceptionEnded
    
    
    Ended
    
    
    (March 25, 2005)June 30,
    
    
    June 30,
    
    
    to June 30,2006
    
    
    2005
    
    
    2006(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    
    
    
    $
    
    
    
    $
    Operating ExpensesProfessional and consulting fees
    
    
    383,358
    
    
    
    68,313
    
    
    
    511,827Project coordinator
    
    
    76,585
    
    
    
    
    
    
    
    100,116General and administrative
    
    
    247,955
    
    
    
    55,038
    
    
    
    317,768Total operating expenses
    
    
    707,898
    
    
    
    123,351
    
    
    
    929,711Operating Loss
    
    
    (707,898
    )
    
    
    (123,351
    )
    
    
    (929,711
    )Other Income (Expense)Other income
    
    
    
    
    
    
    
    
    
    
    5,000Interest income
    
    
    9,924
    
    
    
    
    
    
    
    16,886Interest expense
    
    
    (30,082
    )
    
    
    
    
    
    
    (30,082
    )Total other income (expense)
    
    
    (20,158
    )
    
    
    
    
    
    
    (8,196
    )Net Loss
    
    $
    (728,056
    )
    
    $
    (123,351
    )
    
    $
    (937,907
    )Weighted Average Units Outstanding
    
    
    194
    
    
    
    87
    
    
    
    171Net Loss Per Unit
    
    $
    (3,753
    )
    
    $
    (1,418
    )
    
    $
    (5,485
    )
  5




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E ENERGY ADAMS, LLC
  Nine Months
    
    
    Nine Months
    
    
    From InceptionEnded
    
    
    Ended
    
    
    (March 25, 2005)June 30,
    
    
    June 30,
    
    
    to June 30,2006
    
    
    2005
    
    
    2006(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Cash Flows from Operating ActivitiesNet loss
    
    $
    (728,056
    )
    
    $
    (123,351
    )
    
    $
    (937,907
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation
    
    
    1,898
    
    
    
    
    
    
    
    2,311Assignment of land option
    
    
    
    
    
    
    
    
    
    
    (5,000
    )Changes in assets and liabilitiesPrepaid and other expenses
    
    
    (14,292
    )
    
    
    (28,465
    )
    
    
    (27,313
    )Accounts payable
    
    
    3,945
    
    
    
    12,856
    
    
    
    109,042Accrued interest and other
    
    
    19,803
    
    
    
    10,293
    
    
    
    19,803Net cash used in operating activities
    
    
    (716,702
    )
    
    
    (128,667
    )
    
    
    (839,064
    )Cash Flows from Investing ActivitiesLand
    
    
    (1,047,282
    )
    
    
    
    
    
    
    (1,047,282
    )Payment for land options
    
    
    
    
    
    
    
    
    
    
    (2,000
    )Capital expenditures
    
    
    (10,122
    )
    
    
    (730
    )
    
    
    (16,575
    )Net cash used in investing activities
    
    
    (1,057,404
    )
    
    
    (730
    )
    
    
    (1,065,857
    )Cash Flows from Financing ActivitiesDebt issuance costs
    
    
    (27,500
    )
    
    
    
    
    
    
    (27,500
    )Proceeds from loan
    
    
    2,000,000
    
    
    
    
    
    
    
    2,000,000Member contributions
    
    
    
    
    
    
    970,000
    
    
    
    970,000Payments for cost of raising capital
    
    
    
    
    
    
    (17,192
    )
    
    
    (17,192
    )Payments for deferred offering costs
    
    
    (261,107
    )
    
    
    (26,353
    )
    
    
    (346,047
    )Net cash provided by financing activities
    
    
    1,711,393
    
    
    
    926,455
    
    
    
    2,579,261Net Increase (Decrease) in Cash and Equivalents
    
    
    (62,713
    )
    
    
    797,058
    
    
    
    674,340Cash and
Equivalents  Beginning of Period
    
    
    737,053
    
    
    
    
    
    
    
    Cash and
Equivalents  End of Period
    
    $
    674,340
    
    
    $
    797,058
    
    
    $
    674,340Supplemental Cash Flow InformationCash paid during the period for:Interest
    
    $
    15,288
    
    
    $
    
    
    
    $
    15,288Supplemental Disclosure of Noncash Investing and Financing ActivitiesLand options exercised for land purchased
    
    $
    7,000
    
    
    $
    
    
    
    $
    7,000Deferred offering costs in accounts payable
    
    $
    39,377
    
    
    $
    
    
    
    $
    39,377
  6




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E ENERGY ADAMS, LLC
   1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   Nature of Business
  Fiscal Reporting Period
  Accounting Estimates
   Cash
  Property and Equipment
  7




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E ENERGY ADAMS, LLC
   Deferred Offering Costs
  Debt Issuance Costs
  Income Taxes
  Fair Value of Financial Instruments
  Recently Issued Accounting Pronouncements
  Reclassification
  2. DEVELOPMENT STAGE ENTERPRISE
   3. MEMBERS EQUITY
  8




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E ENERGY ADAMS, LLC
    4. BRIDGE LOAN
  5. COMMITMENTS AND CONTINGENCIES
 Design build letter of intent
  Construction contract
  Land contracts
  9




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E ENERGY ADAMS, LLC
       Consulting contracts
     10




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E ENERGY ADAMS, LLC
       Financing Contracts
   Utility Contracts
  11




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E ENERGY ADAMS, LLC
   Leases
  6. SUBSEQUENT EVENTS
 Utility contract
  12




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Item 2. Managements Discussion and Analysis and Plan of Operations.
 Forward Looking Statements
  
    
    Investors ability to pay the outstanding balances on promissory notes after the closing
of the offering;
    
    Our ability to obtain the debt financing necessary to construct and operate our plant;
    
    Our ability to enter into binding agreements with Fagen, Inc. and ICM, Inc. to build our
plant;
    
    Changes in our business strategy, capital improvements or development plans;
    
    Construction delays and technical difficulties in constructing the plant;
    
    Changes in the environmental regulations that apply to our plant site and operations;
    
    Ability to secure marketing services;
    
    Changes in general economic conditions or the occurrence of certain events causing an
economic impact in the agriculture, oil or automobile industries;
    
    Changes in the availability and price of natural gas and the market for distillers grains;
    
    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; and
    
    Competition from alternative fuel additives.
  Overview
  13




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Plan of Operations for the Next 12 Months
   Project Capitalization
  Seed Capital Offering
  Registered Offering
  14




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Bridge Loan
  Senior Debt Financing
   Tax Increment Financing (TIF)
  Plant Construction Activities
 Site Preparation
  Construction of the Plant
  15




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Real Estate
   Staffing Services
  Permitting and Regulatory Activities
   Trends and Uncertainties Impacting the Ethanol Industry and Our Future Operations
   16




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Technology Developments
 17




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Trends and Uncertainties Impacting the Corn and Natural Gas Markets and Our Future Cost of Goods
Sold
    Operating Expenses
  Liquidity and Capital Resources
 Estimated Sources of Funds
  Sources of Funds
    
    
    
    
    PercentOffering Proceeds (1)
    
    $
    49,390,000
    
    
    
    47.91
    %Seed Capital Proceeds (2)
    
    $
    970,000
    
    
    
    0.94
    %Senior Debt Financing (3)
    
    $
    49,500,000
    
    
    
    48.01
    %Tax Increment Financing (4)
    
    $
    3,062,000
    
    
    
    2.97
    %Interest on Escrow (5)
    
    
    178,000
    
    
    
    0.17
    %Total Sources of Funds
    
    $
    103,100,000
    
    
    
    100.00
    %
 18




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(1)
    
    We currently have funds from investors for approximately $49,390,000.(2)
    
    We have issued a total of 194 units to our seed capital investors at a price of
$5,000 per unit in our private placement in exchange for proceeds of $970,000.(3)
    
    We currently do not have a definitive loan agreement with a senior lender for debt
financing in the amount of $49,500,000. We do have a non-binding debt financing
commitment letter for proposed senior secured credit facilities consisting of a
$49,500,000 letter of credit. Definitive debt documents have not yet been finalized and
there is no assurance that they will be. Even if we do enter into final agreements, they
may not be upon the terms we expect.(4)
    
    We have entered into a Redevelopment Contract with the Village of Adams for the
redevelopment of our plant site. The Village will issue some form of TIF indebtedness to
assist the Company in the costs of redeveloping the site. The maximum amount of TIF real
estate valuation will be $20,000,000 with interest to be determined by the Company (but
not to exceed ten percent).(5)
    
    As of July 31, 2006, we have earned $178,000 in interest on our escrow account.  Estimated Use of Proceeds
    Table
1  Initial Estimate of Costs as of May 15, 2006.
 Percent ofUse of Proceeds
    
    Amount
    
    TotalPlant construction
    
    $
    65,525,848
    
    
    
    72.01
    %Road and ditch construction costs
    
    
    1,000,000
    
    
    
    1.20
    %Land cost
    
    
    970,000
    
    
    
    1.07
    %
 19




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Percent ofUse of Proceeds
    
    Amount
    
    TotalSite development costs
    
    
    3,970,000
    
    
    
    4.36
    %Construction contingency
    
    
    2,129,152
    
    
    
    2.34
    %Construction performance bond
    
    
    0
    
    
    
    0.00
    %Construction insurance costs
    
    
    120,000
    
    
    
    0.13
    %Administrative building
    
    
    300,000
    
    
    
    0.33
    %Office equipment
    
    
    75,000
    
    
    
    0.01Computers, Software, Network
    
    
    150,000
    
    
    
    0.16
    %Rail infrastructure
    
    
    2,220,000
    
    
    
    2.44
    %Rolling stock
    
    
    330,000
    
    
    
    0.36
    %Fire Protection / Water Supply
    
    
    950,000
    
    
    
    1.04
    %Water treatment system
    
    
    930,000
    
    
    
    1.02.
    %Capitalized interest
    
    
    2,000,000
    
    
    
    2.20
    %Start up costs:Financing costs
    
    
    630,000
    
    
    
    0.69
    %Organization costs
    
    
    1,250,000
    
    
    
    1.37
    %Pre production period costs
    
    
    750,000
    
    
    
    0.82
    %Inventory  working capital
    
    
    3,750,000
    
    
    
    4.12
    %Inventory  corn
    
    
    1,100,000
    
    
    
    1.21
    %Inventory  chemicals and ingredients
    
    
    350,000
    
    
    
    0.38
    %Inventory  work in process  Ethanol
    
    
    1,250,000
    
    
    
    1.37
    %Inventory  work in process  DDGS
    
    
    500,000
    
    
    
    0.55
    %Inventory spare parts  process equipment
    
    
    750,000
    
    
    
    0.82
    %Total
    
    $
    91,000,000
    
    
    
    100.00
    %
 Table 2  Revised Estimate of Costs as of the Date of this Report.
 Use of Proceeds
    
    Amount
    
    Percent of TotalPlant construction
    
    $
    65,900,000
    
    
    
    63.92
    %Road and ditch construction costs
    
    
    750,000
    
    
    
    0.73
    %Land cost
    
    
    1,100,000
    
    
    
    1.06
    %Site development costs
    
    
    5,278,000
    
    
    
    5.12
    %Construction contingency
    
    
    3,600,000
    
    
    
    3.50
    %Construction performance bond
    
    
    500,000
    
    
    
    0.48
    %Construction insurance costs
    
    
    120,000
    
    
    
    0.12
    %Administrative building
    
    
    400,000
    
    
    
    0.39
    %Office equipment
    
    
    75,000
    
    
    
    0.07
    %Computers, Software, Network
    
    
    150,000
    
    
    
    0.15
    %Rail infrastructure
    
    
    3,594,750
    
    
    
    3.49
    %Rolling stock
    
    
    515,000
    
    
    
    0.50
    %Fire Protection / Water Supply
    
    
    3,180,000
    
    
    
    3.08
    %Water treatment system
    
    
    1,500,000
    
    
    
    1.45
    %Capitalized interest
    
    
    2,000,000
    
    
    
    1.94
    %Grain Storage Facility
    
    
    3,000,000
    
    
    
    2.91
    %Start up costs:Financing costs
    
    
    506,250
    
    
    
    0.49
    %Organization costs
    
    
    1,300,000
    
    
    
    1.26
    %Pre production period costs
    
    
    1,345,000
    
    
    
    1.30
    %Inventory  working capital
    
    
    3,000,000
    
    
    
    2.91
    %Inventory  corn
    
    
    2,000,000
    
    
    
    1.94
    %Inventory  chemicals and ingredients
    
    
    150,000
    
    
    
    0.15
    %Inventory  work in process  Ethanol
    
    
    1,500,000
    
    
    
    1.45
    %Inventory  work in process  DDGS
    
    
    500,000
    
    
    
    0.48
    %Inventory spare parts  process equipment
    
    
    750,000
    
    
    
    0.73
    %Operating costs:Office labor, expense and equipment
    
    
    165,000
    
    
    
    0.16
    %
 20




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Use of Proceeds
    
    Amount
    
    Percent of TotalTelephone, Internet, Postage service
    
    
    25,500
    
    
    
    0.03
    %Directors Expense
    
    
    30,000
    
    
    
    0.03
    %Payroll Tax
    
    
    17,000
    
    
    
    0.02
    %Accounting and Legal Fees
    
    
    55,000
    
    
    
    0.05
    %Insurance D & O and Operations
    
    
    70,000
    
    
    
    0.07
    %Miscellaneous
    
    
    23,500
    
    
    
    0.02
    %Total
    
    $
    103,100,000
    
    
    
    100.00
    %
 Quarterly Financial Results
  Critical Accounting Estimates
  Employees
   21




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# Full-TimePosition
    
    PersonnelCEO
    
    
    1General Manager
    
    
    1Plant Manager
    
    
    1Commodities Manager
    
    
    1Controller
    
    
    1Lab Manager
    
    
    1Lab Technician
    
    
    2Secretary/Clerical
    
    
    2Shift Supervisors
    
    
    4Office Manager
    
    
    1Maintenance Supervisor
    
    
    1Maintenance Craftsmen
    
    
    4Plant Operators
    
    
    12TOTAL
    
    
    32
  Off Balance Sheet Arrangements
  
 Item 3. Controls and Procedures
   
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
 None.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  22




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
    
    Cash proceeds from unit sales deposited in the escrow account equals or exceeds the
minimum offering amount of $19,900,000, exclusive of interest;
    
    We obtain a written debt financing commitment for debt financing ranging from
$31,930,000 to $70,130,000 less any grants and/or tax increment financing we are
awarded;
    
    We elect, in writing, to terminate the escrow agreement;
    
    The escrow agent provides to each state securities department in which the Company
has registered its securities for sale an affidavit stating that the foregoing
requirements have been satisfied; and
    
    The state securities commissioners that require their consent have consented to
release of the funds on deposit.
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  10.1
    
    Promissory Note (Operating Loan) and Loan Agreement dated May
31, 2006 with Farm Credit Services of America, PCA.10.2
    
    Redevelopment Contract dated May 1, 2006 between the Village of
Adams and E Energy Adams, LLC.10.3
    
    Standard Form of Agreement dated June 26, 2006 between
Commercial Contractors Equipment, Inc. and E Energy Adams, LLC.10.4
    
    Contingency Staffing Services Agreement dated June 16, 2006
between BBI International and E Energy Adams, LLC.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. § 1350.32.2
    
    Certificate Pursuant to 18 U.S.C. § 1350.
 23




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SIGNATURES
  E ENERGY ADAMS, LLCDate: August 14, 2006
    /s/   Jack L. AldermanJack L. AldermanChairman and President (Principal Executive Officer)Date: August 14 , 2006
    /s/   Nicholas J. CusickNicholas J. CusickTreasurer  (Principal Financial and Accounting Officer) 24