**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**


(Mark
      One)




x QUARTERLY
      REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      quarterly period ended June
      30, 2007




o TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For
      the
      transition period from __________ to ____________.





Commission
      file number: 000-52614





**Show
      Me Ethanol, LLC**


(Exact
      name of small business issuer as specified in its charter)





Missouri
            
            20-4594551(State
                or other jurisdiction of
            
            (IRS
                Employerincorporation
                or organization)
            
            Identification
                No.)


Highway
                  10, WestRichmond,
                  Missouri 64085(Address
                  of principal executive
                  offices)




(816)
                  766-2291(Issuer’s
                  telephone number)




Check
      whether the small business issuer (1) filed all reports required to be filed
      by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
      12 months (or for such shorter period that the small business issuer was
      required to file such reports), and (2) has been subject to such filing
      requirements for the past 90 days.





Yes x   No o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).





Yes o   No x





As
      of
      October 1, 2007, the latest practicable date, 1,498 of the issuer’s Class A
      Membership Units, were issued and outstanding.





Transitional
      Small Business Disclosure Format (Check one):





Yes o   No x










**TABLE
      OF CONTENTS**





PagePART
                I -FINANCIAL INFORMATION
            
            1Item
                1.
            Financial
                Statements (Unaudited)
            
            1Balance
                Sheet
            
            1Statements
                of Operations
            
            2Statements
                of Members’ Equity
            
            3Statements
                of Cash Flows
            
            4Notes
                to Unaudited Financial Statements
            
            5Item
                2.
            Plan
                of Operation
            
            14Item
                3.
            Controls
                and Procedures
            
            17PART
                II - OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            
            18Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            18Item
                3.
            Defaults
                Upon Senior Securities
            
            18Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            
            18Item
                5.
            Other
                Information
            
            18Item
                6.
            Exhibits
            
            19









**PART
      1 - FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS (UNAUDITED)**




**SHOW
        ME ETHANOL, LLC**
 **(A
        DEVELOPMENT STAGE COMPANY)**
  **BALANCE
        SHEET (UNAUDITED)**
 **June
        30, 2007**
 
 **ASSETS**CURRENT
                  ASSETSCash
              
              $
              21,416,247Prepaid
                  expenses
              
              
              145,314Total
                  current assets
              
              
              21,561,561PROPERTY,
                  PLANT AND EQUIPMENT, NET
              
              
              16,002,699OTHER
                  ASSETS
              
              
              510,485Total
                  assets
              
              $
              38,074,745**LIABILITIES
                  AND MEMBERS' EQUITY**CURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              4,936,615Current
                  portion of long-term debt
              
              
              19,238Total
                  current liabilities
              
              
              4,955,853LONG-TERM
                  DEBT
              
              
              63,678Total
                  liabilities
              
              
              5,019,531MEMBERS'
                  EQUITYClass
                  A capital units, 1,498 issued
              
              
              22,969,600Class
                  B capital units, 422 issued
              
              
              6,317,365Class
                  C capital units, 213 issued
              
              
              3,189,118Retained
                  earnings
              
              
              579,131Total
                  members' equity
              
              
              33,055,214Total
                  liabilities and members' equity
              
              $
              38,074,745
  The
          notes
          to the unaudited financial statements are an integral part of these
          statements.
  1
 
 **SHOW
        ME ETHANOL, LLC**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **STATEMENTS
        OF OPERATIONS**
 
 Three
                  Months Ended
                June 30, 2007
              
              Six
                Months Ended
                  June 30, 2007
              
              Three
                Months Ended
                  June 30, 2006
              
              Inception
                  (January 24,
                2006)
                  to
                June 30, 2006
              
              Inception
                  (January 24,
                2006)
                  to
                June 30, 2007(unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)
              
              (unaudited)EXPENSESProfessional
                  fees
              
              $
              50,611
              
              $
              124,316
              
              $
              34,304
              
              $
              104,832
              
              $
              255,102Salaries
                  and wages
              
              
              43,645
              
              
              74,445
              
              
              29,378
              
              
              31,078
              
              
              126,754Consulting
              
              
              -
              
              
              298
              
              
              37,285
              
              
              37,285
              
              
              37,583Insurance
              
              
              4,690
              
              
              9,850
              
              
              1,250
              
              
              1,250
              
              
              18,573Managers'
                  fees
              
              
              1,500
              
              
              5,400
              
              
              -
              
              
              -
              
              
              23,400Utilities
              
              
              -
              
              
              2,500
              
              
              -
              
              
              -
              
              
              2,500Depreciation
              
              
              -
              
              
              1,772
              
              
              -
              
              
              -
              
              
              1,772Travel
              
              
              405
              
              
              2,519
              
              
              -
              
              
              -
              
              
              6,797Postage
              
              
              122
              
              
              929
              
              
              765
              
              
              765
              
              
              2,989Supplies
              
              
              282
              
              
              576
              
              
              757
              
              
              757
              
              
              2,639Repairs
              
              
              1,277
              
              
              1,277
              
              
              -
              
              
              -
              
              
              1,277Printing
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              504Dues
                  and subscriptions
              
              
              -
              
              
              500
              
              
              -
              
              
              -
              
              
              500Other
                  expenses
              
              
              -
              
              
              -
              
              
              17
              
              
              17
              
              
              125Total
                  expenses
              
              
              102,532
              
              
              224,382
              
              
              103,756
              
              
              175,984
              
              
              480,515OTHER
                  INCOME (EXPENSE)Grant
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              65,000Interest
                  income
              
              
              277,923
              
              
              583,649
              
              
              -
              
              
              -
              
              
              994,646Net
                  other income (expense)
              
              
              277,923
              
              
              583,649
              
              
              -
              
              
              -
              
              
              1,059,646Net
                  income (loss)
              
              $
              175,391
              
              $
              359,267
              
              $
              (103,756
              )
              $
              (175,984
              )
              $
              579,131Net
                    income (loss) per unit - basic and diluted
              
              $
              82.23
              
              $
              168.43
              
              $
              -
              
              $
              -
              
              $
              -Weighted
                    average units outstanding - basic and diluted
              
              
              2,133
              
              
              2,133
              
              
              -
              
              
              -
              
              
              -
  The
          notes
          to the unaudited financial statements are an integral part of these
          statements.
 2


**SHOW
        ME ETHANOL, LLC**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **STATEMENTS
        OF MEMBERS' EQUITY (UNAUDITED)**
 **For
        the Six Months Ended June 30, 2007 and the Period from Inception (January
        24,
        2006) to December 31, 2006**


Class
                  A
              
              Class
                  B
              
              Class
                  C
              
              RetainedUnits
              
              Amount
              
              Units
              
              Amount
              
              Units
              
              Amount
              
              Earnings
              
              TotalInception,
                  January 24, 2006
              
              
              -
              
              $
              -
              
              
              -
              
              $
              -
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -Units
                  subscribed
              
              
              1,498
              
              
              22,470,000
              
              
              422
              
              
              6,330,000
              
              
              213
              
              
              3,195,000
              
              
              -
              
              
              31,995,000Subscriptions
                  receivable
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,000,000
              )
              
              -
              
              
              -
              
              
              -
              
              
              (2,000,000
              )Cost
                  of raising capital
              
              
              -
              
              
              (48,400
              )
              
              -
              
              
              (13,635
              )
              
              -
              
              
              (6,882
              )
              
              -
              
              
              (68,917
              )Subscription
                  fees
              
              
              -
              
              
              548,000
              
              
              -
              
              
              1,000
              
              
              -
              
              
              1,000
              
              
              -
              
              
              550,000Net
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              219,864
              
              
              219,864Balance,
                  December 31, 2006
              
              
              1,498
              
              
              22,969,600
              
              
              422
              
              
              4,317,365
              
              
              213
              
              
              3,189,118
              
              
              219,864
              
              
              30,695,947Subscriptions
                  receivable
              
              
              -
              
              
              -
              
              
              -
              
              
              2,000,000
              
              
              -
              
              
              -
              
              
              -
              
              
              2,000,000Net
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              359,267
              
              
              359,267Balance,
                  June 30, 2007
              
              
              1,498
              
              $
              22,969,600
              
              
              422
              
              $
              6,317,365
              
              
              213
              
              $
              3,189,118
              
              $
              579,131
              
              $
              33,055,214


The
          notes
          to the unaudited financial statements are an integral part of these
          statements.


3


**SHOW
        ME ETHANOL, LLC**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **STATEMENTS
        OF CASH FLOWS**




Six
                
                Inception
                  (January 24,
                
                Inception(January 24,Months Ended
                
                2006)
                    to
                
                2006)
                    toJune
                    30,
                
                June
                    30,
                
                June
                    30,2007
                
                2006
                
                2007(unaudited)
                
                (unaudited)
                
                (unaudited)CASH
                    FLOWS FROM OPERATING ACTIVITIESNet
                    income (loss)
                
                
                
                
                $
                359,267
                
                $
                (175,984
                )
                $
                579,131Adjustments
                    to reconcile net income (loss) to net cash (used) provided by
                    operating
                    activities:Depreciation
                    and amortization
                
                
                
                
                
                1,772
                
                
                -
                
                
                1,772Change
                    in operating assets and liabilities:Prepaid
                    expenses
                
                
                
                
                
                (136,714
                )
                
                1,250
                
                
                (145,314
                )Accounts
                    payable
                
                
                
                
                
                34,430
                
                
                94,642
                
                
                40,279Net
                    cash (used) provided by operating activities
                
                
                
                
                
                258,755
                
                
                (80,092
                )
                
                475,868CASH
                    FLOWS FROM INVESTING ACTIVITIESPurchases
                    of property, plant and equipment
                
                
                
                
                
                (4,855,576
                )
                
                (2,000,000
                )
                
                (9,013,835
                )Purchase
                    of available-for-sale security
                
                
                
                
                
                -
                
                
                -
                
                
                (1,000
                )Net
                    cash (used) by investing activities
                
                
                
                
                
                (4,855,576
                )
                
                (2,000,000
                )
                
                (9,014,835
                )CASH
                    FLOWS FROM FINANCING ACTIVITIESDue
                    to related parties
                
                
                
                
                
                -
                
                
                2,080,075
                
                
                -Net
                    short-term borrowing from member
                
                
                
                
                
                -
                
                
                -
                
                
                1,995,000Member
                    units sold
                
                
                
                
                
                -
                
                
                -
                
                
                28,000,000Subscription
                    fees received
                
                
                
                
                
                -
                
                
                551,000
                
                
                550,000Payment
                    of loan financing costs
                
                
                
                
                
                (497,485
                )
                
                -
                
                
                (497,485
                )Principal
                    payments on long-term debt
                
                
                
                
                
                (23,384
                )
                
                -
                
                
                (23,384
                )Cost
                    of raising capital
                
                
                
                
                
                -
                
                
                -
                
                
                (68,917
                )Net
                    cash (used) provided by financing activities
                
                
                
                
                
                (520,869
                )
                
                2,631,075
                
                
                29,955,214Net
                    change in cash
                
                
                
                
                
                (5,117,690
                )
                
                550,983
                
                
                21,416,247Cash
                    and equivalents, beginning of period
                
                
                
                
                
                26,533,937
                
                
                -
                
                
                -Cash
                    and equivalents, end of period
                
                
                
                
                $
                21,416,247
                
                $
                550,983
                
                $
                21,416,247
  The
          notes to the unaudited financial statements are an
          integral part of these statements.
  4
 **SHOW
          ME ETHANOL, LLC**
 **(A
          DEVELOPMENT STAGE COMPANY)**
 
 **NOTES
          TO UNAUDITED FINANCIAL STATEMENTS**
  **1.**  **SIGNIFICANT
          ACCOUNTING POLICIES**
 
 *Description
          of business:* Show Me
          Ethanol, LLC is a limited liability company organized in the State of Missouri
          for the purpose of developing, owning and operating a 55 million gallon
          per year
          dry-mill ethanol plant and a related co-products processing facility in
          west
          central Missouri. Show Me Ethanol, LLC was organized on January 24, 2006.
          The
          financial statements are presented in accordance with generally accepted
          accounting principles in the United States of America.
 
 The
          Company is in the development stage and is subject to the risks and challenges
          similar to other companies in a comparable stage of development. The risks
          include, but are not limited to, dependence on key individuals, successful
          development and construction of the plant, and the ability to secure adequate
          financing to meet the minimum capital required to successfully complete
          the
          project. As of June 30, 2007, the Company is in the development stage with
          its
          efforts being principally devoted to construction activities.
 
 *Fiscal
          reporting period:* The
          Company has adopted a fiscal year ending December 31 for reporting financial
          operations. These financial statements are as of June 30, 2007.
 
 *Basis
          of accounting:* The
          Company uses the accrual basis of accounting in accordance with generally
          accepted accounting principles. Under this method, revenues are recognized
          when
          earned and expenses as incurred.
 
 The
          accompanying financial statements reflect all adjustments that are, in
          the
          opinion of the Company’s management, necessary to fairly present the financial
          position, results of operations and cash flows of the Company. Those adjustments
          consist only of normal recurring adjustments. The balance sheet as of December
          31, 2006 has been derived from the audited balance sheet of the Company
          as of
          that date. The results of operations for the period are not necessarily
          indicative of the results to be expected for the full year.
 
 *Management
          estimates:* Management
          uses estimates and assumptions in preparing these financial statements
          in
          accordance with U.S. generally accepted accounting principles. Those estimates
          and assumptions affect the reported amounts of assets and liabilities,
          the
          disclosures of contingent assets and liabilities, and the reported revenues
          and
          expenses. Actual results could vary from the estimates that were
          used.
 
 *Cash:* Cash
          consist of an interest bearing demand deposit account which exceeds the
          amount
          insured by the U.S. Federal Deposit Insurance Corporation (FDIC).
 
 *Land
          easement and engineering services:* Costs
          incurred for the purchase of the land easements are capitalized. Engineering
          costs that relate to future acquisition of property and equipment are
          capitalized. Depreciation or amortization of engineering costs occurs over
          the
          estimated useful life of the related assets when the assets are placed
          in
          service.
 
 *Property,
          plant and equipment* :
          Property, plant and equipment is stated at cost. Depreciation is computed
          using
          the straight-line method over their estimated useful lives.
  5
  *Capitalized
          interest:* Interest
          costs incurred on borrowings during the construction period are capitalized
          as
          part of the cost of the ethanol plant.
 
 *Available-for-sale
          security:* The
          Company has a $1,000 investment that is recorded at cost, as there is no
          quoted
          market price for the security held by the Company. The investment is included
          in
          other assets in the balance sheets.
 
 *Income
          taxes* :
          The
          Company is organized as a limited liability company under Missouri law.
          As a
          limited liability company that has elected to be taxed as a partnership,
          the
          Company’s earnings pass through to the members and are taxed at the member
          level. Accordingly, no income tax provision has been included in these
          financial
          statements. Differences between the financial statement basis of assets
          and the
          tax basis of assets is related to depreciation and the capitalization and
          amortization of organization and start-up costs for tax purposes, whereas
          these
          costs were expensed for financial statement purposes. The total assets
          of the
          Company have a difference in book and tax bases of $94,744 at June 30,
          2007.
 
 *Earnings
          per capital unit:* For
          purposes of calculating basic earnings per capital unit, capital units
          subscribed for and issued by the Company are considered outstanding on
          the
          effective date of issuance. For purposes of calculating diluted earnings
          per
          capital unit, subscribed units are included in the calculation of earnings
          per
          unit based on the treasury unit method. There were no differences between
          basic
          and diluted earnings per unit for the period ended June 30, 2007.
 
 *Segment
          information:* The
          Company follows SFAS 131, “Disclosures about Segments of an Enterprise and
          Related Information”. Certain information is disclosed, per SFAS 131, based on
          the way management organizes financial information for making operating
          decisions and assessing performance. The Company currently operates in
          a single
          segment and will evaluate additional segment disclosure requirements as
          it
          expands its operations.
 
 *Long-lived
          assets:* The
          Company reviews the value of its non-current assets for impairment whenever
          events indicate that the carrying amount of the asset may not be recoverable.
          An
          impairment loss is recorded when the sum of the future cash flows is less
          than
          the carrying amount of the asset. The amount of the loss is determined
          by
          comparing the fair value of the asset to the carrying amount of the asset.
          Such
          assessments did not result in any adjustment to the value of non-current
          assets.
 
 *Organizational
          costs and start up costs:* The
          Company expenses all organizational and start up costs as incurred.
          Organizational costs consist of amounts related to the formation of the
          Company.
          Start-up costs consists of amounts incurred during the development stage
          related
          to the operation and management of the Company, which do not qualify as
          a
          capitalized cost.
 
 *Cost
          of raising capital:* The
          Company has netted the cost of raising capital against the proceeds from
          the
          sale of membership units. The costs are allocated to members’ equity in
          proportion to the number of units issued by class. Offering costs include
          direct
          costs related to the offering such as legal fees, accounting fees and other
          direct costs associated with the offering.
 
 *Revenue
          recognition:* Revenue
          from the production of ethanol and related products will be recorded upon
          delivery to customers. Interest income is recognized as earned. Income
          from
          government grant programs is recognized as costs are incurred and requests
          for
          reimbursement are filed by the Company.
 
 *Comprehensive
          income:* The
          Company reports comprehensive income in accordance with SFAS 130, “Reporting
          Comprehensive Income”, which requires the reporting of all changes in members’
equity during a period, except those resulting from investment by members
          and
          distributions to members, in a financial statement for the period in which
          they
          are recognized. This encompasses unrealized gains and losses from
          available-for-sale securities held. There was no comprehensive income recorded
          during the period, as there was no change in the fair value of
          investments.
  6
  *Fair
          value of financial instruments:* Fair
          value estimates discussed herein are based upon certain market assumptions
          and
          pertinent information available to management as of June 30, 2007. The
          respective carrying value of certain on-balance-sheet financial instruments
          approximated their fair values. These financial instruments include cash,
          prepaid expenses and accounts payable. Fair values were assumed to approximate
          carrying values for these financial instruments because they are short
          term in
          nature and their carrying amounts approximate fair values. The carrying
          value of
          the available-for-sale security held by the Company is estimated to approximate
          its fair value as there is no market for the security and management is
          unaware
          of any impairment in the value of the security.
 
 *Recently
          issued accounting pronouncements:* There
          are no recently issued accounting pronouncements that have a material impact
          on
          the Company during its development stage.
  **2.**  **RELATED
          PARTIES**
 
 During
          June 2006, the Company borrowed $2,000,000 from a member. The borrowing
          was
          utilized to make an initial down payment on the contract for the construction
          of
          the ethanol plant. Upon completion of the Company’s equity drive, $1,995,000 of
          the borrowing was converted into 133 Class C membership units and $5,000
          was
          repaid to the member. Interest in the amount of $36,844 was paid to the
          member
          on the borrowing.
 
 The
          Company has reimbursed members of the Board of Managers, all of whom own
          membership units in the Company, for certain expenses incurred by the Company
          and paid by the members of the Board of Managers during the development
          stage.
          Expense reimbursements from inception through June 30, 2006 and 2007 totaled
          $574. Since inception through June 30, 2007, the Company also paid managers’
fees to the members of the Board of Managers in the amount of $23,400 and
          reimbursed travel expenses of $6,797. During the three months and six months
          ended June 30, 2007, the Company paid managers’ fees of $1,500 and $5,400, and
          reimbursed travel expenses of $405 and $2,519, respectively. There were
          no
          managers’ fees paid or travel expenses reimbursed during the period ended June
          30, 2006.
 
 Certain
          costs related to the organization and operation of the Company during the
          start-up phase were initially paid by Ray-Carroll County Grain Growers,
          Inc.,
          the holder of all Class B membership units issued by the Company. The Company
          paid Ray-Carroll County Grain Growers, Inc. $291,923 and accrued another
          $15,691
          of costs incurred on behalf of the Company from inception through June
          30, 2007,
          $45,639 of which was incurred during the three months ended June 30, 2007
          and
          $77,593 of which was incurred during the six months ended June 30,
          2007.
 
 On
          April
          30, 2007 the Company entered into an agreement of right of first purchase
          and
          right of first refusal with Ray-Carroll Grain Growers, Inc. (the “buy-sell
          agreement”). Pursuant to the buy-sell agreement, the Company has granted a right
          of first purchase and a right of first refusal to purchase all or any part
          of
          the property comprising the ethanol plant currently under construction.
          In
          exchange, Ray Carroll Grain Growers, Inc. has granted the Company a right
          of
          first purchase and a right of first refusal to purchase all or any part
          of
          certain grain elevator property. The buy-sell agreement’s term is through April
          30, 2027.
 
 The
          Company also has multiple agreements in place with Ray-Carroll County Grain
          Growers, Inc., as noted below in note 9.
  7
 
 **3.** **PROPERTY,
              PLANT AND EQUIPMENT**
 
 Property,
          plant and equipment consists of the following at June 30, 2007:
 Land
                  
                  $
                  2,000,000Equipment
                  
                  
                  106,300Construction
                      in progress
                  
                  
                  13,903,486Total
                      property, plant and equipment
                  
                  
                  16,009,786Less
                      accumulated depreciation
                  
                  
                  7,087Net
                      property, plant and equipment
                  
                  $
                  16,002,699
 
 Depreciation
          expense was $0 and $1,772 for the three months and six months ended June
          30,
          2007, respectively. There was no depreciation expense from inception through
          December 31, 2006. Depreciation expense during the three months ended June
          30,
          2007 was capitalized as part of the plant construction costs.
 
 Most
          of
          the construction is being performed under contract agreements. As of June
          30,
          2007, total retainage payable was $259,170 and is included in accounts
          payable
          in these financial statements.
  **4.** **MEMBERS’
              EQUITY**
 
 The
          Company was formed on January 24, 2006 to have a perpetual life. The Company
          has
          three classes of membership units (Classes A, B and C) with each unit
          representing a pro rata ownership interest in the Company’s capital, profits,
          losses and distributions. Generally, income and losses are allocated to
          all
          members in proportion to units held, regardless of class. Membership units
          are
          restricted securities under federal and state securities laws and will
          not be
          transferable unless certain conditions imposed by those laws and the Company’s
          operating agreement are met.
 
 Members
          of all classes vote on all matters reserved for member approval as detailed
          in
          the operating agreement in proportion to the percentage interest held in
          the
          Company as a whole. All classes of membership units have similar voting
          rights
          other than for electing the Board of Managers to represent their respective
          classes. Members vote as a class to elect managers, with Class A, B, and
          C
          members being entitled to vote for seven, two and one manager positions,
          respectively. The eleventh member of the Board of Managers shall be chosen
          by
          the ten managers elected by the members and shall not be a member of the
          Company
          or an employee of a member.
 
 Members
          must approve any substantial changes to the operating agreement, merger
          or
          consolidation with another business entity, sale of substantially all of
          the
          Company’s assets or voluntary dissolution. The Board of Managers decides all
          other matters regarding operation and management of the Company. With the
          exception of voting for managers as a class, all membership units are identical
          in their rights under the operating agreement.
 
 The
          Board
          of Managers must approve all transfers or other dispositions of membership
          units. Upon an event of withdrawal of a member, as defined in the operating
          agreement, the Board of Managers may, but is not required to, elect to
          cause the
          Company to purchase such members’ interest at a price equal to fair market value
          as agreed to among the members, including the selling member.
  8
  The
          Company issued a confidential disclosure statement dated June 1, 2006 for
          the
          sale of up to 2,000 Class A membership units, with a minimum of $12,825,000
          and
          a maximum of $30,000,000 raised from such offering of units. The private
          offering was available only to persons who were residents of the State
          of
          Missouri and investors were required to purchase a minimum of two (2) units,
          up
          to a maximum of thirty-four (34) units. Upon the execution of a subscription
          agreement for Class A units, a purchaser of Class A units was required
          to (i)
          pay a $1,000 subscription fee, (ii) pay 10% of the total purchase price
          of the
          Class A units subscribed, which was deposited into the Company’s escrow account
          for the offering, and (iii) deliver an executed promissory note in the
          amount of
          the remaining 90% balance of the subscription amount. Payments of amounts
          due
          under the promissory notes were subject to the call of the Board of Managers,
          with payment due within ten (10) days of the notice of the call. The units
          had
          an offering price of $15,000 per unit.
 
 The
          private offering for Class A units was closed in August 2006 with 1,498
          membership units being sold to 548 members for total proceeds of $23,018,000,
          including $548,000 of subscription fees.
 
 The
          Class
          B units authorized for issuance by the Company were reserved for sale to
          Ray-Carroll County Grain Growers, Inc. A total of 422 Class B units have
          been
          issued at a price of $15,000 per unit, for total cash proceeds of $4,331,000,
          including $1,000 in subscription fees, and $2,000,000 in land and easements.
          Title to the land and easements was transferred to the Company in January
          2007
          as settlement for the subscription receivable.
 
 The
          Class
          C units authorized for issuance by the Company were reserved for sale to
          a group
          of investors under a separate offering. A total of 213 Class C units have
          been
          issued at a price of $15,000 per unit, for total proceeds of $3,196,000,
          including $1,000 in subscription fees.
 
 All
          Class
          A, B, and C unit subscriptions were accepted on September 26, 2006.
  **5.** **FINANCING
              ARRANGEMENTS**
 On
          March
          1, 2007, the Company entered into a credit agreement with FCS Financial,
          PCA
          (FCS) under which FSC will perform agent and servicing responsibilities
          in the
          closing and funding of a $48 million construction and term loan agreement
          for
          the Company. Under the terms of the loan agreement, the Company is obligated
          to
          spend a minimum of $15,800,000 on the ethanol project using equity funds
          before
          requesting draws on the construction loan. The loan will be secured by
          all of
          the Company’s real property and personal property now owned or hereafter
          acquired by the Company. On August 31, 2007, the Company made the first
          draw on
          the construction loan in the amount of $5.8 million.
 
 Once
          the
          construction loan is converted to a term loan, the term loan shall be repaid
          over ten years starting on the conversion date. The Company will make quarterly
          principal payments, with interest payable monthly at either fixed or variable
          rates, to be determined by the Company at the conversion date. The Company
          will
          also be required to pay fifty percent of its excess cash flow, as defined
          in the
          loan agreement, on an annual basis to repay the loan until such time as
          $15,000,000 of excess cash flow has been used to reduce the principal balance
          of
          the loan.
 
 The
          Company incurred $509,485 in financing costs to secure the above financing.
          This
          cost has been capitalized (and is included in other non-current assets
          on the
          balance sheet) and will be amortized over the life of the loan once permanent
          financing is in place. From inception through June 30, 2007, the Company
          has not
          amortized any of this deferred cost.
  9
  In
          addition, the Company is required to pay an unused commitment fee on the
          average
          daily unused portion of the commitment by FCS at the rate of 0.30% per
          annum,
          payable monthly. From inception through June 30, 2007, the Company has
          paid
          $34,400 in unused commitment fees and accrued another $12,000, which were
          capitalized as other assets in these financial statements. $24,400 of that
          amount was paid during the three months ended June 30, 2007 and $34,400
          was paid
          during the six months ended June 30, 2007.
 
 In
          March
          2007, the Company purchased a piece of equipment for $106,300. The purchase
          was
          financed by the equipment manufacturer. The Company is required to make
          five
          annual payments of $23,383, including interest at 5.0% with the last payment
          being due in March 2011. As of June 30, 2007, the outstanding balance on
          this
          loan is $82,916. The Company is accruing interest on this loan. Total accrued
          interest payable for the three months ended June 30, 2007 is $1,036 and
          is
          included in accounts payable in these financial statements.
 
 Required
          future minimum debt payments during the years ending June 30 are as
          follows:
 
 2008
                
                $
                19,2382009
                
                
                20,2002010
                
                
                21,2092011
                
                
                22,269Total
                    long-term debt
                
                $
                82,916
  **6.**  **GRANT
          REVENUE**
 
 During
          2006, the Company received a value-added agricultural product market development
          grant from the Missouri Agriculture and Small Business Development Authority.
          The grant provides matching funds not to exceed $164,818 for working capital
          expenses. Since inception through June 30, 2007 the Company applied for
          and
          received $164,818 under this grant. Of this amount, $65,000 was recorded
          as
          grant revenue, $29,000 was netted against the costs of raising capital,
          and
          $70,818 was netted against construction in progress.
  **7.**  **CHAPTER
          100 BONDS**
 
 In
          September 2006, the Company entered into an Economic Development Agreement
          with
          the County of Carroll, Missouri to implement a tax abatement plan under
          Missouri
          Statutes Chapter 100. The plan provides for 100% abatement of real property
          taxes for twenty years (through December 2028 or twenty years from the
          construction and commercial operation of the plant, whichever is later)
          to
          improve the Company’s cash flow and savings of expenses. Under the plan, legal
          title of the Company’s real property will be transferred to the County. The
          County will issue bonds under Chapter 100 of the Missouri Revised Statutes
          in
          the aggregate amount of the total cost of the project, estimated to be
          $70
          million. The bonds will be issued to the Company, so no cash will exchange
          hands. The County will then lease the real estate back to the Company.
          The lease
          payments will be equal to the amount of the payments on the bonds. All
          of the
          Company’s right, title, and interest in the bonds are expected to be pledged to
          their finance company as additional security for the construction and term
          loan.
          At any time, the Company has the option to purchase the real property by
          paying
          off the bonds, paying the trustee fees, plus $1,000.
 
 In
          return
          for the abatement of property taxes by the County, the Company has agreed
          to pay
          the County an issuance fee of $10,000 at the time of the issuance of the
          bonds
          and an additional $10,000 on each anniversary date thereafter until the
          bonds
          are no longer outstanding. In addition, the Company has agreed to make
          annual
          grant payments in lieu of property taxes in the amount of $90,000 for twenty
          years, the expected term of the bonds. The Company also agrees to pay the
          fees
          of the bond counsel for the transaction and any financial advisor selected
          by
          the County.
 
 10
 
 **8.**  **REGULATION**
 
 The
          construction of the plant requires various state and local permits to comply
          with existing governmental regulations designed to protect the environment
          and
          worker safety. The Company is subject to regulation on emissions of the
          United
          States Environmental Protection Agency (EPA) which require the Company
          to obtain
          air, water and other permits or approvals in connection with the construction
          and operation of the Company’s business. State and federal rules can and do
          change and such changes could result in greater regulatory burdens on the
          Company.
 
 The
          ethanol production will require the Company to emit a significant amount
          of
          carbon dioxide into the air. Current Missouri law regulating emission does
          not
          restrict or prevent the Company from emitting carbon dioxide in to the
          air, but
          this could change in the future.
 
 The
          Company is in the process of obtaining the necessary air and water permits
          to
          construct and operate the plant, including a permit to discharge wastewater
          from
          the plant.
 
 In
          addition to the foregoing regulations affecting air and water quality,
          the
          Company is subject to regulation for fuel storage tanks. If the Company
          is found
          to have violated federal, state or local environmental regulations in the
          future, the Company could incur liability for clean-up costs, damage claims
          from
          third parties and civil and criminal penalties that could adversely affect
          its
          business.
  **9.**  **COMMITMENTS,
          CONTINGENCIES AND SUBSEQUENT EVENTS**
 
 The
          Company has taken assignment from Ray-Carroll County Grain Growers, Inc.
          of an
          agreement with U.S. Energy Services, Inc. for energy management and engineering
          services. The initial term of the agreement began on December 1, 2005 and
          will
          continue until twelve months after the plant’s completion date. After the
          initial term, the agreement will be month-to-month. The agreement provides
          for
          fees of $2,900 per month through December 1, 2006, then $3,016 per month
          for the
          next 12 months. There is an annual increase of 4% each year on the anniversary
          date. Total fees of $51,446 were paid under this agreement since inception
          through June 30, 2007.
 
 The
          Company has entered into an agreement with Ray-Carroll County Grain Growers,
          Inc. to perform management, administrative, accounting, clerical and other
          services such as project management and operations management. The agreement
          began on November 29, 2006 and will continue until terminated by either
          party.
          The agreement has a fee schedule attached, listing the per hour cost for
          each
          service. The Company incurred total expenses related to this service agreement
          of $126,754 since inception through June 30, 2007, including $43,645 during
          the
          three months ended June 30, 2007 and $74,445 during the six months ended
          June
          30, 2007. There was $0 expense for the three months and six months ended
          June
          30, 2006.
 
 In
          March
          2006, the Company entered into a grain supply agreement with Ray-Carroll
          County
          Grain Growers, Inc. Under the agreement, the Company agrees to purchase
          all corn
          needed to operate a 50-65 million gallon per year ethanol facility, up
          to
          twenty-two million bushels per year. The Company agreed to pay $0.116 per
          bushel
          over Ray-Carroll County Grain Growers, Inc.’s posted bid at their Carrollton
          facility, with the rate increasing annually by 3.0%. The term of this agreement
          is twenty years from the first delivery of the product by the supplier
          to the
          Company. No grain has been purchased by the Company through June 30,
          2007.
 
 On
          July
          14, 2006, the Company entered into a contract with ICM, Inc. to construct
          a
          dry-mill fuel-grade ethanol plant. The contract price is approximately
          $62.1
          million. A 10% down payment, approximately $6.2 million, was due on the
          contract, to be paid over time as certain events occurred. As of June 30,
          2007,
          the Company has paid the entire down payment of $6.2 million and it is
          included
          in construction in progress as of June 30, 2007. Construction of the plant
          has
          begun and is estimated to be completed by June 2008, with a total estimated
          project cost, including the above construction contract, of approximately
          $82
          million.
  11
  In
          February 2007, the Company contracted with a company to construct a 178,600
          bushel corn receiving/grinding facility on the site in Carrollton, Missouri.
          The
          contract is for $2.941 million and is expected to take approximately thirty-two
          weeks to construct. As of June 30, 2007, the Company has incurred approximately
          $655,000 under this contract. That entire amount has been capitalized as
          construction in progress but $268,912 is still in payables as of June 30,
          2007.
          There will be additional costs associated with this facility that are not
          covered by this contract.
 
 On
          April
          18, 2007, the Company entered into a contract for grain storage tank pile
          foundations at cost of $97,570. As of June 30, 2007, this entire amount
          has been
          capitalized to construction in progress and included in accounts payable
          in
          these financial statements.
 
 Subsequent
          to June 30, 2007, the Company entered into a contract to construct the
          administration building at the plant site. Total contract price is $245,733.
 
 The
          Company has entered into a marketing agreement with a marketing company
          for the
          exclusive rights to market, sell and distribute the entire ethanol inventory
          produced by the Company. The agreement extends for a period of five years
          from
          the time the Company originally ships ethanol. The Company pays the marketing
          company 1% per net gallon for each gallon of ethanol sold by the marketing
          company. Title to ethanol transfers to the marketing company upon loading
          at the
          plant site but the Company will be responsible for the cost of transportation
          of
          the ethanol. No fees have been incurred to date, since ethanol production
          has
          not yet begun.
 
 In
          August
          2007, the Company entered into a marketing agreement with Ray-Carroll Grain
          Growers, Inc. that specifies that Ray-Carroll will be the exclusive marketer
          of
          all distiller grain products produced by the Company. The Company agrees
          to pay
          a marketing fee to Ray-Carroll of 2.5% to 4.5% of the net price of the
          distiller
          grains, depending on type. This fee shall not be less than $1 per ton. The
          contract begins on the day the Company commences commercial scale production
          at
          the facility and has an initial term of three years.
  12
 
 **10.** **SUPPLEMENTAL
              CASH FLOW DISCLOSURES**
 
 The
          following summarizes the supplemental statement of cash flow information
          for the
          periods ended June 30, 2007 and for the periods from inception (January
          24,
          2006) to June 30, 2006 and inception (January 24, 2006) to June 30,
          2007:
  Six
                    Months Ended
                    June 30,
                    2007
                  
                  Inception
                    (January 24,
                    2006)to
                    June 30,
                    2006
                  
                  Inception
                    (January 24,
                    2006) to
                    June 30,
                    2007(unaudited)
                  
                  (unaudited)
                  
                  (unaudited)INTEREST
                      PAID, including $36,844 of capitalized interest
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  36,844NON-CASH
                      INVESTING AND FINANCING ACTIVITIESMembership
                      units issued for short-term borrowing from member
                  
                  
                  -
                  
                  
                  -
                  
                  
                  1,995,000Land
                      and easements received as settlement of subscriptions
                      receivable
                  
                  
                  2,000,000
                  
                  
                  -
                  
                  
                  2,000,000Purchase
                      of property, plant and equipment through issuance of long-term
                      debt
                  
                  
                  106,300
                  
                  
                  -
                  
                  
                  106,300Deferred
                      offering costs included in accounts payable
                  
                  
                  -
                  
                  
                  10,626
                  
                  
                  -Deferred
                      offering costs included in due to related party
                  
                  
                  -
                  
                  
                  64,666
                  
                  
                  -Prepaid
                      insurance included in due to related party
                  
                  
                  -
                  
                  
                  15,000
                  
                  
                  -Loan
                      financing costs included in accounts payable
                  
                  
                  12,000
                  
                  
                  -
                  
                  
                  12,000Construction
                      in progress included in account payable
                  
                  
                  4,884,336
                  
                  
                  51,393
                  
                  
                  4,884,336
 13




**ITEM
      2: PLAN OF OPERATION**





**Forward
      Looking Statements**





This
      Quarterly Report on Form 10-QSB contains forward-looking statements within
      the
      meaning of Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934. This Quarterly Report includes
      statements regarding our plans, goals, strategies, intent, beliefs or current
      expectations. These statements are expressed in good faith and based upon a
      reasonable basis when made, but there can be no assurance that these
      expectations will be achieved or accomplished. These forward looking statements
      can be identified by the use of terms and phrases such as “believe,” “plan,”
“intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or
      future-tense or conditional constructions (“will,” “may,” “could,” “should,”
etc.). Items contemplating or making assumptions about, actual or potential
      future sales, market size, collaborations, and trends or operating results
      also
      constitute such forward-looking statements.





Although
      forward-looking statements in this Quarterly Report reflect the good faith
      judgment of management, forward-looking statements are inherently subject to
      known and unknown risks, business, economic and other risks and uncertainties
      that may cause actual results to be materially different from those discussed
      in
      these forward-looking statements. Readers are urged not to place undue reliance
      on these forward-looking statements, which speak only as of the date of this
      Quarterly Report. We assume no obligation to update any forward-looking
      statements in order to reflect any event or circumstance that may arise after
      the date of this Quarterly Report, other than as may be required by applicable
      law or regulation. Readers are urged to carefully review and consider the
      various disclosures made by us in the our reports filed with the Securities
      and
      Exchange Commission which attempt to advise interested parties of the risks
      and
      factors that may affect our business, financial condition, results of operation
      and cash flows. This discussion should be read in conjunction with the
      consolidated financial statements including the related footnotes. If one or
      more of these risks or uncertainties materialize, or if the underlying
      assumptions prove incorrect, our actual results may vary materially from those
      expected or projected.





The
      following discussion should be read in conjunction with the accompanying
      unaudited financial statements and our 2006 audited financial statements
      included in the Company’s Form 10-SB. Those financial statements include
      additional information about our significant accounting policies and practices
      and the events that underlie our financial results. Except for the historical
      information contained herein, the matters discussed below are forward-looking
      statements that involve certain risks and uncertainties.





**Plan
      of Operation**





This
      Management’s Plan of Operations is a discussion of our plans for the project
      from the present to the start-up of our facility. This plan reflects our current
      assumptions and is subject to change as the project progresses.





***Overview***





Show
      Me
      Ethanol, LLC is a start-up company in the development stage, with no current
      operations or revenues. We plan to build and operate a 55 million gallons
      per year (mgpy) dry mill ethanol plant in west central Missouri that will
      process corn into fuel grade ethanol and distillers grains. We began
      construction of the plant in June 2007 and estimate that it will take
      approximately 12 months to complete construction of the plant.





We
      are
      building our proposed ethanol plant in Carroll County, Missouri. We estimate
      that the total cost of the project, including construction of the plant and
      start-up costs, will be approximately $82 million. The plant will have
      approximately 30 employees after we commence operations.





To
      date,
      our efforts have been devoted principally to developing our planned project
      and
      related activities. We will not generate revenue until we complete construction
      of our proposed plant.





14




***Background
      of the Project*** **





Following
      our organization as a limited liability company in January 2006, we commenced
      an
      offering of our Units to raise funds to support planning and development of
      the
      project. The private offering for Class A units was closed in August 2006 with
      1,498 membership units being sold to 548 members for total proceeds of
      $23,018,000, including $548,000 of subscription fees. The Class B units
      authorized for issuance by the Company were reserved for sale to Ray-Carroll
      County Grain Growers, Inc. A total of 422 Class B units have been issued at
      a
      price of $15,000 per unit, for total cash proceeds of $4,331,000, including
      $1,000 in subscription fees, and $2,000,000 in land and easements. The Class
      C
      units authorized for issuance by the Company were reserved for sale to a group
      of investors under a separate offering. A total of 213 Class C units have been
      issued at a price of $15,000 per unit, for total proceeds of $3,196,000,
      including $1,000 in subscription fees.





***Plan
      of Operations Until Plant Start-Up***





From
      the
      date of this filing to the date of our anticipated start-up, we will be actively
      involved in:  preparing our plant site, completing construction
      related agreements and securing necessary permits, constructing our plant,
      and
      arranging and negotiating agreements for the purchase of natural gas and other
      needs. We believe that we will have sufficient cash resources to cover all
      of
      our expenses associated with the construction and commencement of operations
      of
      the plant. We also believe that we will have sufficient operating capital to
      cover our staff, office, audit, legal, compliance, training and other start-up
      expenses during this period. We estimate that we will need approximately $82
      million to complete the project.





We
      expect
      to continue work principally on the development of our proposed ethanol plant,
      obtaining the necessary construction permits, and negotiating other
      contracts.





We
      expect
      to complete construction of the proposed plant and commence operations in June
      2008.





We
      estimate the cost of our project, including land, site development,
      organizational, financing, pre-production period and start-up expenses, will
      be
      approximately $82 million for a 55 mgpy gas-fired facility. As of June 30,
      2007
      we have spent approximately $16 million on land, equipment and construction
      in
      progress.





On
      March
      7, 2007, we closed on a $48,000,000 construction loan (the “Loan”) pursuant to a
      Construction and Term Loan Agreement (the “Loan Agreement”) with FCS Financial,
      PCA serving as the administrative agent for the transaction. The participating
      banks in the Loan include FCS Financial, PCA, AgriBank, FCB, Southwest Bank,
      CoBank, ACB, 1 st Farm
      Credit Services, FLCA, Bank Midwest, N.A. and Progressive FCS (collectively,
      the
“Banks”). Under the terms of the Loan Agreement, we are obligated to expend
      $15,800,000 on construction costs associated with the ethanol project before
      the
      Banks are obligated to fund any draws on the Loan. Draws on the Loan during
      the
      construction period for the ethanol project will bear interest at either “prime
      rate” plus 0.50% or LIBOR plus 3.00%. Following completion of construction of
      the ethanol project and satisfaction of other conditions set forth in the Loan
      Agreement, the Loan will be converted into a term loan having a maturity date
      that is 10 years from the conversion date. Following the conversion of the
      Loan
      into a term loan, interest can accrue on the Loan, at our election, at fixed
      or
      variable interest rates.





In
      connection with the closing of the loan, we paid closing fees to the Banks in
      the aggregate amount of $235,000. Until the conversion date of the Loan to
      a
      term loan, we are obligated to pay the Banks an unused commitment fee equal
      to
      0.30% annum calculated based on the undrawn proceeds of the loan.





Currently,
      the Loan is secured by a first priority security interest in our real and
      personal property, including the ethanol project.





Under
      the
      terms of the Loan Agreement, 50% of our Excess Cash Flow, as defined in the
      Loan
      Agreement, is to be applied on an annual basis to prepay the Loan until such
      time as $15,000,000 of our Excess Cash Flow has been used to prepay the
      Loan.




15




In
      September 2006, we entered into an Economic Development Agreement with the
      County of Carroll, Missouri to implement a tax abatement plan under Missouri
      law. The plan provides for 100% abatement of real property taxes for twenty
      years (through December 2028 or twenty years from the construction and
      commercial operation of the Ethanol Plant, whichever is later). Under this
      agreement, legal title of our real property will be transferred to Carroll
      County. The County will issue bonds under Chapter 100 of the Missouri Revised
      Statutes in the aggregate amount of the total cost of the project, estimated
      to
      be $70 million. The bonds will be issued to us so no cash will exchange hands.
      The County will then lease the real estate back to us. The lease payments will
      be equal to the amount of the payments on these bonds. The Banks, and agents
      under the Loan Agreement shall receive an assignment of the Chapter 100 Bonds
      and be given a first priority leasehold deed of trust on the ethanol project.
      We
      have an option to purchase the real property by paying off these bonds, paying
      the trustee fees, plus $1,000.




In
      return
      for the abatement of property taxes by the County, we have agreed to pay the
      County an issuance fee of $10,000 at the time of the issuance of the bonds
      and
      an additional $10,000 on each anniversary date thereafter until the bonds are
      no
      longer outstanding. In addition, we have agreed to make annual grant payments
      in
      lieu of property taxes in the amount of $90,000 for twenty years, the expected
      term of the bonds. We also agreed to pay the fees of the bond counsel for the
      transaction and any financial advisor selected by the County.





***Trends
      and Uncertainties Impacting the Ethanol Industry and Our Future
      Operations***





If
      we are
      able to build the plant and begin operations, we will be subject to
      industry-wide factors, as well as factors affecting the economy at large, that
      affect our operating and financial performance. The industry-wide factors
      include, but are not limited to, the available supply and cost of corn from
      which our ethanol and distillers grains will be processed; the cost of natural
      gas, which we will use in the production process; dependence on our ethanol
      marketer and distillers grains marketer to market and distribute our products;
      the intensely competitive nature of the ethanol industry; possible legislation
      at the federal, state and/or local level; changes in federal ethanol tax
      incentives and the cost of complying with extensive environmental laws that
      regulate our industry.





We
      expect
      ethanol sales to constitute the bulk of our future revenues. We expect to
      benefit from federal ethanol supports and federal tax incentives. Changes to
      these supports or incentives could significantly impact demand for ethanol.
      An
      increase in the number of new plants will bring an increase in the supply of
      ethanol. Thus future supply could outweigh the demand for ethanol in the future.
      This would have a negative impact on our earnings in the long term.





***Trends
      and Uncertainties Impacting the Corn and Natural Gas Markets and Our Future
      Cost
      of Goods Sold***





We
      expect
      our future cost of goods sold will consist primarily of costs relating to the
      corn and natural gas supplies necessary to produce ethanol and distillers grains
      for sale. Variables such as planting dates, rainfall, and temperatures will
      likely cause market uncertainty and create corn price volatility throughout
      the
      year. Although we do not expect to begin operations for some time, we expect
      these same factors will continue to cause volatility in the price of corn,
      which
      will significantly impact our cost of goods sold.





Natural
      gas is also an important input commodity to our manufacturing process. We
      estimate that our natural gas usage will be approximately 10% to 15% of our
      annual total production cost. Recently, the price of natural gas has risen
      along
      with other energy sources. We look for continued volatility in the natural
      gas
      market. Any ongoing increases in the price of natural gas will increase our
      cost
      of production and may negatively impact our future profit margins.





***Liquidity
      and Capital Resources***





As
      of
      June 30, 2007, we had total assets of $38,074,745 consisting primarily of cash,
      prepaid expenses and property, plant and equipment. We had current liabilities
      of $4,955,853 consisting primarily of our accounts payable. Total members’
equity as of June 30, 2007, was $33,055,214. Since our inception, we have
      generated no revenue from operations.




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Based
      on
      our business plan and current construction cost estimates, we believe the total
      project will cost approximately $82 million.





**Off-Balance
      Sheet Arrangements**





We
      have
      no off-balance sheet arrangements as described in Item 303(c) of Regulation
      S-B,
      promulgated by the SEC.





**ITEM
      3. CONTROLS AND PROCEDURES**





**(a)
      Evaluation of Disclosure Controls and Procedures**





The
      term
“disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e)
      of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This
      term refers to the controls and procedures of a company that are designed to
      ensure that information required to be disclosed by a company in the reports
      that it files under the Exchange Act is recorded, processed, summarized, and
      reported within the required time periods.





In
      addition, internal control over financial reporting is the process designed
      by,
      or under the supervision of, a company’s principal executive officer and
      principal financial officer, and effected by the issuer’s board of directors,
      management and other personnel, to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial statements
      for external purposes in accordance with generally accepted accounting
      principles and includes those policies and procedures that: (1) pertain to
      the
      maintenance of records that in reasonable detail accurately and fairly reflect
      the transactions and dispositions of the assets of the company; (2) provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the company are
      being made only in accordance with authorizations of management and directors
      of
      the company; and (3) provide reasonable assurance regarding prevention or timely
      detection of unauthorized acquisition, use or disposition of the company’s
      assets that could have a material effect on the financial
      statements.





Management
      has found four items to be significant deficiencies in our internal controls
      that in combination indicate a material weakness as it relates to our design
      or
      operation of internal control over financial reporting that is reasonably likely
      to adversely affect our ability to initiate, authorize, record, process and
      report financial data reliably in accordance with generally accepted accounting
      principles. Two items relate to management’s failure to make adequate estimates
      of costs, the third relates to properly capitalizing costs related to
      construction of the ethanol plant and the fourth relates to properly applying
      grant proceeds against the applicable area where expenditures were charged.
      We
      have made the necessary alterations to our financial statements prior to filing
      our financial statements with the Securities and Exchange Commission or
      disclosing them to outside investors.





Our
      principal executive officer and principal financial officer evaluated the
      effectiveness of the design and operation of our disclosure controls and
      procedures as of the end of the period covered by this report as required by
      Rule 13a-15 of the Exchange Act. Based on their evaluation of our disclosure
      controls and procedures (including internal controls over financial reporting),
      they have concluded that as of the end of the period covered by this report
      our
      disclosure controls and procedures are not effective in ensuring that material
      information required to be disclosed by us in the reports that we file or submit
      under the Exchange Act is recorded, processed, summarized, and reported within
      the time periods specified in the rules and forms of the SEC and that such
      information is accumulated and communicated to management as appropriate to
      allow timely decisions regarding required disclosure.





Management
      is currently working with its contract bookkeepers to develop a plan to remedy
      the material weakness.




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**(b)
      Changes in Internal Control over Financial Reporting**





No
      change
      in our internal control over financial reporting (as defined in Rules 13a-15(f)
      and 15d-15(f) under the Exchange Act) occurred during the period covered by
      this
      report that has materially affected, or is reasonably likely to materially
      affect, our internal control over financial reporting.





Section
      404 of the Sarbanes-Oxley Act of 2002 requires management’s review and
      evaluation of our internal controls beginning with our Annual Report on Form
      10-KSB for the fiscal year ending December 31, 2007 and an attestation of the
      effectiveness of these controls by our independent registered public accounting
      firm beginning with our Annual Report on Form 10-KSB for the fiscal year ending
      December 31, 2008. We plan to dedicate significant resources, including
      management time and effort, and to incur substantial costs in connection with
      our Section 404 assessment.





**PART
      II - OTHER INFORMATION**





**ITEM
      1.**  **LEGAL
      PROCEEDINGS**





None.





**Item
      2.**  **Unregistered
      Sales of Equity Securities & Use of Proceeds**





None.





**ITEM
      3.**  **DEFAULTS
      ON SENIOR SECURITIES**





None.





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





None.





**ITEM
      5.**  **OTHER
      INFORMATION**





On
      April
      30, 2007 the Company entered into an Agreement of Right of First Purchase and
      Right of First Refusal with Ray-Carroll Grain Growers, Inc (the “Buy-Sell
      Agreement”). Pursuant to the Buy-Sell Agreement the Company has granted a right
      of first purchase and a right of first refusal to purchase all or any part
      of
      the property comprising the ethanol plant currently under construction. In
      exchange, Ray-Carroll Grain Growers, Inc. has granted to the Company a right
      of
      first purchase and a right of first refusal to purchase all or any part of
      certain grain elevator property. The Buy-Sell Agreement’s term is through April
      30, 2027. A copy of this agreement is attached to this Form 10Q-SB filing as
      Exhibit 10.6.




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**ITEM
      6.**  **EXHIBITS**





The
      following exhibits are filed with or incorporated as part of this report as
      required by Item 601 of Regulation S-B:





**Exhibit
                No.**
            
            **Description**
            
            **Reference**3.1
            
            Articles
                of Organization. **3.2
            
            Operating
                Agreement. **4.1
            
            Form
                of Class A membership certificate. **10.1
            
            Services
                Agreement between Ray-Carroll County Grain Growers, Inc. and the
                Company
                dated November 29, 2006. **10.2
            
            Grain
                Supply Agreement between Ray-Carroll County Grain Growers, Inc. and
                the
                Company, dated March 1, 2006. **10.3
            
            Construction
                and Term Loan Agreement between the Company, FCS Financial, PCA,
                as
                administrative agent, and certain banks, dated March 7,
                2007. **10.4
            
            Agreement
                between ICM, Inc. and the Company dated July 14,
                2006. ** †10.5
            
            Ethanol
                Marketing Agreement by and between the Company and Eco-Energy, Inc.,
                dated
                May 4, 2007. **10.6
            
            Agreement
                of Right of First Purchase and Right of First Refusal by and between
                the
                Company and Ray-Carroll County Grain Growers, Inc., dated April 30,
                2007. *31.1
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002. *31.2
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002. *32.1
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.*32.2
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.*




*
            Filed
                herewith.**
            Incorporated
                by reference from Form 10-SB filed August 6, 2007.†
            Confidential
                treatment has been requested for portions of this agreement. An unredacted
                copy of the Agreement has been provided to the
                SEC.




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**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant has caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




SHOW
                ME ETHANOL, LLCDate:
                September 28, 2007By:/s/David
                DurhamPrinted
                name: David DurhamTitle:
                Chairman




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