**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 September
      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, West


Richmond,
      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
            
            3Item
                1.
            Financial
                Statements (Unaudited)
            
            3Balance
                Sheet
            
            4Statements
                of Operations
            
            5Statements
                of Members’ Equity
            
            6Statements
                of Cash Flows
            
            7Notes
                to Unaudited Financial Statements
            
            8Item
                2.
            Plan
                of Operation
            
            17Item
                3.
            Controls
                and Procedures
            
            20PART
                II - OTHER INFORMATION
            
            21Item
                1.
            Legal
                Proceedings
            
            21Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            21Item
                3.
            Defaults
                Upon Senior Securities
            
            21Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            
            21Item
                5.
            Other
                Information
            
            21Item
                6.
            Exhibits
            
            23





2


**PART
      1 - FINANCIAL INFORMATION**





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




**REPORT
        OF**
 
 **SHOW
        ME ETHANOL, LLC**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 
 **SEPTEMBER
        30, 2007**
  3


**SHOW
      ME ETHANOL, LLC**


**(A
      DEVELOPMENT STAGE COMPANY)**





**BALANCE
      SHEET (UNAUDITED)**


**September
      30, 2007**





**ASSETS**CURRENT
                ASSETSCash
            
            $
            6,566,209Prepaid
                expenses
            
            
            109,989Total
                current assets
            
            
            6,676,198PROPERTY,
                PLANT AND EQUIPMENT, NET
            
            
            37,075,855OTHER
                ASSETS
            
            
            545,703RESTRICTED
                CASH
            
            
            3,287,770Total
                assets
            
            $
            47,585,526**LIABILITIES
                AND MEMBERS' EQUITY**CURRENT
                LIABILITIESAccounts
                payable
            
            $
            5,324,785Accrued
                expenses
            
            
            5,879Current
                portion of long-term debt
            
            
            19,238Total
                current liabilities
            
            
            5,349,902LONG-TERM
                DEBT
            
            
            9,192,116Total
                liabilities
            
            
            14,542,018MEMBERS'
                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
            
            
            567,425Total
                members' equity
            
            
            33,043,508Total
                liabilities and members' equity
            
            $
            47,585,526





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





4





**SHOW
      ME ETHANOL, LLC**


**(A
      DEVELOPMENT STAGE COMPANY)**





**STATEMENTS
      OF OPERATIONS**








Inception
            
            InceptionThree
            
            Nine
            
            Three
            
            (January 24,
            
            (January 24,Months Ended
            
            Months Ended
            
            Months Ended
            
            2006)
                to
            
            2006)
                toSeptember
                30,
            
            September
                30,
            
            September
                30,
            
            September 30,
            
            September 30,2007
            
            2007
            
            2006
            
            2006
            
            2007(unaudited)
            
            (unaudited)
            
            (unaudited)
            
            (unaudited)
            
            (unaudited)EXPENSESProfessional
                fees
            
            $
            45,613
            
            $
            169,929
            
            $
            11,245
            
            $
            116,077
            
            $
            300,715Salaries
                and wages
            
            
            68,028
            
            
            142,473
            
            
            10,618
            
            
            41,696
            
            
            194,782Consulting
            
            
            -
            
            
            298
            
            
            -
            
            
            37,285
            
            
            37,583Insurance
            
            
            3,850
            
            
            13,700
            
            
            4,137
            
            
            5,387
            
            
            22,423Managers'
                fees
            
            
            3,050
            
            
            8,450
            
            
            -
            
            
            -
            
            
            26,450Relocation
                expenses
            
            
            10,286
            
            
            10,286
            
            
            -
            
            
            -
            
            
            10,286Travel
            
            
            1,178
            
            
            3,697
            
            
            -
            
            
            -
            
            
            7,975Supplies
            
            
            401
            
            
            977
            
            
            1,170
            
            
            1,927
            
            
            3,040Postage
            
            
            -
            
            
            929
            
            
            661
            
            
            1,426
            
            
            2,989Utilities
            
            
            129
            
            
            2,629
            
            
            -
            
            
            -
            
            
            2,629Health
                insurance
            
            
            2,071
            
            
            2,071
            
            
            -
            
            
            -
            
            
            2,071Depreciation
            
            
            -
            
            
            1,772
            
            
            -
            
            
            -
            
            
            1,772Payroll
                taxes
            
            
            1,575
            
            
            1,575
            
            
            -
            
            
            -
            
            
            1,575Repairs
            
            
            6
            
            
            1,283
            
            
            -
            
            
            -
            
            
            1,283Dues
                and subscriptions
            
            
            30
            
            
            530
            
            
            -
            
            
            -
            
            
            530Printing
            
            
            24
            
            
            24
            
            
            -
            
            
            -
            
            
            528Other
                expenses
            
            
            40
            
            
            40
            
            
            108
            
            
            125
            
            
            165Total
                expenses
            
            
            136,281
            
            
            360,663
            
            
            27,939
            
            
            203,923
            
            
            616,796OTHER
                INCOME (EXPENSE)Grant
                income
            
            
            -
            
            
            -
            
            
            65,000
            
            
            65,000
            
            
            65,000Interest
                income
            
            
            124,575
            
            
            708,224
            
            
            122,167
            
            
            122,167
            
            
            1,119,221Net
                other income
            
            
            124,575
            
            
            708,224
            
            
            187,167
            
            
            187,167
            
            
            1,184,221Net
                (loss) income
            
            $
            (11,706
            )
            $
            347,561
            
            $
            159,228
            
            $
            (16,756
            )
            $
            567,425Net
                    (loss) income per unit - basic and diluted
            
            $
            (5.49
            )
            $
            162.94
            
            $
            1,712.13
            
            $
            (492.82
            )
            $
            -Weighted
                    average units outstanding - basic and diluted
            
            
            2,133
            
            
            2,133
            
            
            93
            
            
            34
            
            
            -





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





5





**SHOW
      ME ETHANOL, LLC**


**(A
      DEVELOPMENT STAGE COMPANY)**





**STATEMENTS
      OF MEMBERS' EQUITY (UNAUDITED)**


**For
      the Nine Months Ended September 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
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            347,561
            
            
            347,561Balance,
                September 30, 2007
            
            
            1,498
            
            $
            22,969,600
            
            
            422
            
            $
            6,317,365
            
            
            213
            
            $
            3,189,118
            
            $
            567,425
            
            $
            33,043,508





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





6





**SHOW
      ME ETHANOL, LLC**


**(A
      DEVELOPMENT STAGE COMPANY)**





**STATEMENTS
      OF CASH FLOWS**





Inception
            
            InceptionNine
            
            (January
                24,
            
            (January
                24,Months
                Ended
            
            2006)
                to
            
            2006)
                toSeptember
                30,
            
            September
                30,
            
            September
                30,2007
            
            2006
            
            2007(unaudited)
            
            (unaudited)
            
            (unaudited)CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                income (loss)
            
            $
            347,561
            
            $
            (16,756
            )
            $
            567,425Adjustments
                to reconcile net income (loss) to net cashprovided
                (used) by operating activities:Depreciation
                and amortization
            
            
            1,772
            
            
            -
            
            
            1,772Change
                in operating assets and liabilities:Prepaid
                expenses
            
            
            (101,389
            )
            
            (11,936
            )
            
            (109,989
            )Grant
                receivable
            
            
            -
            
            
            (101,250
            )
            
            -Accounts
                payable
            
            
            26,985
            
            
            9,964
            
            
            32,834Accrued
                expenses
            
            
            5,879
            
            
            -
            
            
            5,879Net
                  cash provided (used) byoperating activities
            
            
            280,808
            
            
            (119,978
            )
            
            497,921CASH
                FLOWS FROM INVESTING ACTIVITIESPurchase
                of property, plant and equipment
            
            
            (25,521,117
            )
            
            (4,073,878
            )
            
            (29,679,376
            )Purchase
                of available-for-sale security
            
            
            -
            
            
            (1,000
            )
            
            (1,000
            )Increase
                in restricted cash
            
            
            (3,287,770
            )
            
            -
            
            
            (3,287,770
            )Net
                cash (used) by investing activities
            
            
            (28,808,887
            )
            
            (4,074,878
            )
            
            (32,968,146
            )CASH
                FLOWS FROM FINANCING ACTIVITIESProceeds
                from issuance of long-term debt
            
            
            9,128,438
            
            
            -
            
            
            9,128,438Net
                short-term borrowing from member
            
            
            -
            
            
            -
            
            
            1,995,000Member
                units sold
            
            
            -
            
            
            25,687,000
            
            
            28,000,000Subscription
                fees received
            
            
            -
            
            
            550,000
            
            
            550,000Payment
                of loan financing costs
            
            
            (544,703
            )
            
            -
            
            
            (544,703
            )Principal
                payments on long-term debt
            
            
            (23,384
            )
            
            -
            
            
            (23,384
            )Cost
                of raising capital
            
            
            -
            
            
            (68,917
            )
            
            (68,917
            )Net
                  cash (used) provided by financingactivities
            
            
            8,560,351
            
            
            26,168,083
            
            
            39,036,434Net
                change in cash
            
            
            (19,967,728
            )
            
            21,973,227
            
            
            6,566,209Cash
                and equivalents, beginning of period
            
            
            26,533,937
            
            
            -
            
            
            -Cash
                and equivalents, end of period
            
            $
            6,566,209
            
            $
            21,973,227
            
            $
            6,566,209





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





7


**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 September 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 September 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 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
      consists 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.





8


*Capitalized
      interest:* Interest
      costs incurred on borrowings during the construction period are capitalized
      as
      part of the cost of the ethanol plant. Total interest capitalized during the
      nine months ended September 30, 2007 was $45,218 and from inception through
      September 30, 2007 was $82,062.





*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 sheet.





*Restricted
      cash:* Cash
      that is restricted or reserved for purposes other than funding operations is
      classified as restricted cash on the balance sheet.





*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 $89,150 at September 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 September 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.




9


*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.





*Fair
      value of financial instruments:* Fair
      value estimates discussed herein are based upon certain market assumptions
      and
      pertinent information available to management as of September 30, 2007. The
      respective carrying value of certain on-balance-sheet financial instruments
      approximated their fair values. These financial instruments include cash,
      prepaid expenses, accounts payable and long-term debt. Fair values were assumed
      to approximate carrying values for these financial instruments 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 September 30, 2006 and 2007
      totaled $574. From inception through September 30, 2007, the Company also paid
      managers’ fees to the members of the Board of Managers in the amount of $26,450
      and reimbursed travel expenses of $7,176. During the three months and nine
      months ended September 30, 2007, the Company paid managers’ fees of $3,050 and
      $8,450, and reimbursed travel expenses of $379 and $2,898, respectively. There
      were no managers’ fees paid or travel expenses reimbursed during the period
      ended September 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. $332,427 and accrued another $2,640
      of costs incurred on behalf of the Company from inception through September
      30,
      2007, $27,453 of which was incurred during the three months ended September
      30,
      2007 and $105,046 of which was incurred during the nine months ended September
      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.





10





**3.** **PROPERTY,
      PLANT AND EQUIPMENT**





Property,
      plant and equipment consists of the following at September 30,
      2007:





Land
            
            $
            2,000,000Equipment
            
            
            108,017Construction
                in progress
            
            
            34,980,240Total
                property, plant and equipment
            
            
            37,088,257Less
                accumulated depreciation
            
            
            12,402Net
                property, plant and equipment
            
            $
            37,075,855





Depreciation
      expense was $0 and $1,772 for the three months and nine months ended September
      30, 2007, respectively. There was no depreciation expense from inception through
      December 31, 2006. Depreciation expense during the nine months ended September
      30, 2007 of $10,630 was capitalized as part of the plant construction costs.





Most
      of
      the construction is being performed under contract agreements. As of September
      30, 2007, total retainage payable was $1,379,107 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.





11


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. As of September 30, 2007, the balance on this loan
      is
      $9,128,438. Of this amount, $3,287,770 was advanced but not expended for
      construction in progress until after September 30, 2007. This amount is shown
      as
      restricted cash on the balance sheet.





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 $544,703 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 September 30, 2007, the Company
      has not amortized any of this deferred cost.




12


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 September 30, 2007, the Company has
      paid
      $81,617 in unused commitment fees which were capitalized as other assets in
      these financial statements. $35,217 of that amount was paid during the three
      months ended September 30, 2007 and $81,617 was paid during the nine months
      ended September 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 September 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 September 30, 2007 is
      $1,036. Total accrued interest for the nine months ended September 30, 2007
      is
      $2,072 and is included in accounts payable in these financial statements. The
      interest expense has been capitalized as a part of construction in progress.





The
      estimated maturities of long-term debt during the years ending September 30,
      assuming the entire amount available under the construction financing is drawn
      on approximately September 1, 2008, when it is converted to a term loan are
      as
      follows:





2008
            
            $
            19,2382009
            
            
            4,820,2002010
            
            
            4,821,2092011
            
            
            4,822,2692012
            
            
            4,800,000Thereafter
            
            
            28,800,000Total
                long-term debt
            
            $
            48,082,916





On
      November 6, 2007, the Company entered into a revolving credit agreement with
      FCS
      for up to $5 million. Borrowings under the revolving credit agreement are
      subject to availability under a borrowing base calculation based on accounts
      receivable, inventory and accounts payable; however, up to $2 million may be
      requested without the requirement of a borrowing base. Each borrowing, at the
      option of the Company, can be a revolving base rate loan or a revolving LIBOR
      rate loan. The revolving loan will be secured by all of the Company’s real
      property and personal property now owned or hereafter acquired by the Company.
      The revolving credit agreement matures thirty-six months from the date of the
      initial disbursement under the agreement.





Under
      the
      terms of the revolving credit agreement, the Company may request that FCS issue
      one or more letters of credit, subject to borrowing availability. On November
      6,
      2007, a $480,000 letter of credit was issued by FCS on behalf of the Company
      in
      favor of a contractor working on the ethanol project. The letter of credit
      has a
      term of one year.





The
      revolving credit agreement includes a 0.50% closing fee, to be paid at closing
      on the entire amount of the revolving loan commitment and an unused commitment
      fee of 0.30% of the unused portion of the revolving loan commitment, payable
      monthly. The Company agrees to pay FCS a quarterly fee of 2.5% on the face
      amount of each letter of credit issued.





13





**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.





**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.




14




**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 $60,494 were paid under this agreement since inception
      through September 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. Effective October 1, 2007, the agreement has been
      terminated. 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 $179,974 from inception through September 30, 2007, including
      $53,220 during the three months ended September 30, 2007 and $127,665 during
      the
      nine months ended September 30, 2007. There was $0 expense for the three months
      and nine months ended September 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. As of September 30, 2007, the Company has entered into forward purchase
      contracts under this agreement for 150,000 bushels per month for May through
      August 2008.





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 September
      30,
      2007, the Company has paid the entire down payment of $6.2 million and it is
      included in construction in progress as of September 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. As of September 30, 2007, the Company has incurred
      costs under this contract of approximately $25.5 million. Of that amount,
      approximately $1.3 million is being held as retainage and is included in
      accounts payable in the balance sheet.





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 September 30, 2007, the Company has incurred
      approximately $2,042,000 under this contract. That entire amount has been
      capitalized as construction in progress but $495,718 is still in payables as
      of
      September 30, 2007. There will be additional costs associated with this facility
      that are not covered by this contract.





On
      July
      27, 2007, the Company entered into a contract to construct the administration
      building at the plant site. Total contract price is $245,733. Total cost
      incurred during the three months ended September 30, 2007 under this contract
      are $83,067, of which $69,969 is included in accounts payable at quarter end.





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.




15




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.





Subsequent
      to September 30, 2007, the Company entered into a contract for the construction
      of a water supply pipeline. The total contract price is $255,074.





**10.** **SUPPLEMENTAL
      CASH FLOW DISCLOSURES**





The
      following summarizes the supplemental statement of cash flow information for
      the
      nine months ended September 30, 2007 and for the periods from inception (January
      24, 2006) to September 30, 2006 and inception (January 24, 2006) to September
      30, 2007:





Nine
              Months Ended
              September
                30,
              2007
            
            Inception
              (January
                24,
              2006)
                to
              September
                30,
              2006
            
            Inception
              (January
                24,
              2006)
                to
              September
                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
            
            
            -
            
            
            -
            
            
            1,995,000Membership
                units issued with subscriptions receivable
            
            
            -
            
            
            6,308,000
            
            
            -Land
                  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
            
            
            -
            
            
            106,300Construction
                in progress included in accounts payable
            
            
            5,291,951
            
            
            3,045
            
            
            5,291,951





16




**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 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 are building and plan to 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.





17


***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 September
      30,
      2007 we have spent approximately $37 million on land, equipment and construction
      in progress.





On
      March
      7, 2007, we closed on a $48,000,000 construction loan (the “Term Loan”) pursuant
      to a Construction and Term Loan Agreement (the “Term Loan Agreement”) with FCS
      Financial, PCA serving as the administrative agent for the transaction. The
      participating banks in the Term 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 Term 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 Term Loan. Draws on the Term 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 Term Loan Agreement, the Term 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 Term Loan into a term loan, interest can accrue on the
      Term Loan, at our election, at fixed or variable interest rates.





In
      connection with the closing of the Term Loan, we paid closing fees to the Banks
      in the aggregate amount of $235,000. Until the conversion date of the Term
      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 Term Loan is secured by a first priority security interest in our real
      and
      personal property, including the ethanol project.





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





18




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 Term 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
      September 30, 2007, we had total assets of $47,585,526 consisting primarily
      of
      cash, prepaid expenses and property, plant and equipment. We had current
      liabilities of $5,349,902 consisting primarily of our accounts payable. Total
      members’ equity as of September 30, 2007, was $33,043,508. Since our inception,
      we have generated no revenue from operations.




19




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 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.
      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
      has developed a plan to remedy the material weakness.




20


**(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**





Effective
      August 13, 2007, the Company’s Board hired Greg Thomas as General Manager of the
      Company. Mr. Thomas is an at-will employee. As of August 13, 2007, Mr. Thomas
      functions as the Company’s Principal Executive Officer and Principal Financial
      Officer. Mr. Thomas is 52 years old and is paid an annual salary of $110,000.
      The Company intends to hire an additional employee to take over responsibility
      as the Principal Financial Officer.





On
      October 1, 2007, the Company terminated the Service Agreement dated November
      29,
      2006 with Ray-Carroll County Grain Growers, Inc. Pursuant to the agreement,
      Ray-Carroll County Growers, Inc. provided management, administrative,
      accounting, clerical and other services such as project management and
      operations management. Mr. Thomas and other employees of the Company will now
      perform these functions. The Services Agreement was filed as Exhibit 10.1 to
      the
      Company’s Form 10-SB on August 6, 2007.





On
      November 6, 2007, the Company as borrower entered into a revolving credit
      agreement with FCS Financial, PCA (“FCS”) as lender for a total borrowing up to
      $5 million (the “Revolving Credit Agreement”). The purposes of the Revolving
      Credit Agreement are to
      (i)
      fund proper corporate business purposes of the Company, (ii) fund the Company’s
      maintenance capital expenditures and (iii) to finance letters of credit.




21




Borrowings under
      the Revolving Credit Agreement are subject to availability under a borrowing
      base calculation based on accounts receivable, inventory and accounts payable;
      however, up to $2 million may be requested without the requirement of a
      borrowing base. Each borrowing, at the option of the Company, can be either
      a
      revolving base rate loan or a revolving LIBOR rate loan (in either case, a
      “Revolving Loan”). The Company may select interest periods of one, two, three or
      six months for LIBOR loans. The Revolving Loans will be secured by all of the
      Company’s real property and personal property now owned or hereafter acquired by
      the Company, secured
      equally and ratably with the Term Loan on the same lien priority
      basis .
      The
      Revolving Credit Agreement matures thirty-six months from the date of the
      initial disbursement under the agreement.





The
      Revolving Credit Agreement includes a 0.50% closing fee, to be paid at closing
      on the entire amount of the revolving loan commitment and an unused commitment
      fee of 0.30% of the unused portion of the revolving loan commitment, payable
      monthly. The Company agrees to pay FCS a quarterly fee of 2.5% on the face
      amount of each letter of credit issued.





The
      Revolving Credit Agreement contains affirmative and negative covenants customary
      of a loan of this type. The Revolving Credit Agreement also contains covenants
      that require the Company to maintain certain minimum financial standards,
      including net worth, debt service coverage ratio, working capital and equity
      to
      total assets percentage.





Under
      the
      terms of the Revolving Credit Agreement, the Company may request that FCS issue
      one or more letters of credit, subject to borrowing availability. On November
      6,
      2007, a $480,000 letter of credit was issued by FCS on behalf of the Company
      in
      favor of a contractor working on the ethanol project. The letter of credit
      has a
      term of one year.





The
      foregoing description is only a summary and is qualified in its entirety by
      the
      Revolving Credit Agreement, which is filed with this report as Exhibit 10.1
      and
      is incorporated by reference herein.




22




**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**10.1
            
            Revolving
                Credit Agreement dated November 6, 2007 between Show Me Ethanol,
                LLC and
                FCS Financial, PCA. *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.




23


**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:
                November 14 , 2007By:
            /s/
                Gregory E.
                ThomasPrinted
                name: Gregory E. ThomasTitle:
                General Manager




24





**EXHIBIT
      INDEX**





**Exhibit
                No.**
            
            **Description**
            
            **Reference**10.1
            
            Revolving
                Credit Agreement dated November 6, 2007 between Show Me Ethanol,
                LLC and
                FCS Financial, PCA. *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.




25