Table of Contents





|                                  
|----------------------------------
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|                                  
|Washington, D.C. 20549            
|                                  
|                                  
|FORM 10-Q                         
|                                  

|                                                 |                                                                                    
|------------------------------------------------ | -----------------------------------------------------------------------------------
|x                                                | Quarterly report under Section 13
 or 15(d) of the Securities Exchange Act of 1934.
|                                                 |                                                                                    
|For the quarterly period ended January 31,
 2009
|                                                 |                                                                                    
|OR                                              
|                                                
|o                                                | Transition report under Section 13
 or 15(d) of the Exchange Act.                  

|                                                                 
|-----------------------------------------------------------------
|For the transition period from ________ to ___________           
|                                                                 
|Commission file number 000-53112                                 
|                                                                 
|                                                                 
|SOY ENERGY, LLC                                                  
|                                                                 
|(Exact name of small business issuer as specified in its charter)

|                                |  |                                     
|------------------------------- |  | ------------------------------------
|Iowa                            |  | 20-4026473                          
|(State or other jurisdiction of |  | (I.R.S. Employer Identification No.)
|incorporation or organization)  |  |                                     

222 N. MAIN STREET, P. O. BOX 663, MARCUS,
IOWA 51035(Address of principal executive offices)

(712) 376-2081(Issuers telephone number)

---

Indicate by check mark whether the registrant: (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
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

x Yes
           o No

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of large accelerated filer, accelerated filer
and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

| |                                                                         |  |                            |  
| | ----------------------------------------------------------------------- |  | -------------------------- | -
| | Large
 accelerated filer o                                              |  | Accelerated
 filer         | o
| |                                                                         |  |                            |  
| | Non-accelerated
 filer o (Do not
 check if a smaller reporting company) |  | Smaller
 reporting company | x

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

o Yes          
x No

As of March
17, 2009, we had 33,018 units outstanding.

1





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Table of Contents

|           |                                                                                       |    |   
|---------- | ------------------------------------------------------------------------------------- | -- | --
|PART 1.    | FINANCIAL INFORMATION                                                                 |    | 3 
|Item 1.    | Financial
Statements                                                                  |    | 3 
|Item 2.    | Managements Discussion
 and Analysis of Financial Condition and Results of Operation |    | 9 
|Item 3.    | Quantitative and
 Qualitative Disclosures about Market Risks                          |    | 16
|Item 4.    | Controls and
Procedures                                                               |    | 17
|PART II.   | OTHER INFORMATION                                                                     |    | 17
|Item 1.    | Legal
Proceedings                                                                     |    | 17
|Item 1A.   | Risk Factors                                                                          |    | 17
|Item 2.    | Unregistered Sales of
 Equity Securities and Use of Proceeds                          |    | 17
|Item 3.    | Defaults Upon Senior
 Securities                                                      |    | 18
|Item 4T.   | Submission of Matters to
 a Vote of Security Holders                                  |    | 18
|Item 5.    | Other
Information                                                                     |    | 18
|Item 6.    | Exhibits                                                                              |    | 18
|SIGNATURES |                                                                                       | 19

2

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Table of Contents

|        |                      
|------- | ---------------------
|PART 1. | FINANCIAL INFORMATION

Item 1. Financial Statements

SOY ENERGY, LLC(A Development Stage Company)

Condensed Balance Sheets

|                                               |  |                   |            |                   |   |            |  
|---------------------------------------------- |  | ----------------- | ---------- | ----------------- | - | ---------- | -
|                                               |  |                   |            |                   |  
|ASSETS                                         |  | January 31,
 2009 |            | October 31,
 2008 |  
|                                               |  |                   |            |                   |  
|                                               |  | (Unaudited)       |            |                   |  
|Current Assets                                 |  |                   |            |                   |   |            |  
|Cash and equivalents                           |  | $                 | 20,539,227 |                   | $ | 20,803,450 |  
|Accrued interest receivable                    |  |                   | 13,570     |                   |   | 30,575     |  
|Prepaid expenses                               |  |                   | 37,445     |                   |   | 38,545     |  
|                                               |  |                   |            |                   |   |            |  
|Total current assets                           |  |                   | 20,590,242 |                   |   | 20,872,570 |  
|                                               |  |                   |            |                   |   |            |  
|Equipment                                      |  |                   |            |                   |   |            |  
|Equipment                                      |  |                   | 8,873      |                   |   | 8,873      |  
|Accumulated depreciation                       |  |                   | (2,936     | )                 |   | (2,492     | )
|                                               |  |                   |            |                   |   |            |  
|Net equipment                                  |  |                   | 5,937      |                   |   | 6,381      |  
|                                               |  |                   |            |                   |   |            |  
|Assets held for sale                           |  |                   | 3,557,061  |                   |   | 3,557,061  |  
|                                               |  |                   |            |                   |   |            |  
|                                               |  |                   |            |                   |   |            |  
|Total Assets                                   |  | $                 | 24,153,240 |                   | $ | 24,436,012 |  
|                                               |  |                   |            |                   |   |            |  
|                                               |  |                   |            |                   |   |            |  
|LIABILITIES AND MEMBERS EQUITY                |  |                   |            |                   |   |            |  
|                                               |  |                   |            |                   |   |            |  
|Current Liabilities                            |  |                   |            |                   |   |            |  
|Accounts payable                               |  | $                 | 270,502    |                   | $ | 442,825    |  
|Accrued expenses                               |  |                   | 11,143     |                   |   | 7,909      |  
|                                               |  |                   |            |                   |   |            |  
|Total current liabilities                      |  |                   | 281,645    |                   |   | 450,734    |  
|                                               |  |                   |            |                   |   |            |  
|Members Equity                                |  |                   |            |                   |   |            |  
|Member contributions, 33,018 units
outstanding |  |                   | 31,031,572 |                   |   | 31,031,572 |  
|Deficit accumulated during development
 stage  |  |                   | (7,159,977 | )                 |   | (7,046,294 | )
|                                               |  |                   |            |                   |   |            |  
|Total members equity                          |  |                   | 23,871,595 |                   |   | 23,985,278 |  
|                                               |  |                   |            |                   |   |            |  
|                                               |  |                   |            |                   |   |            |  
|Total Liabilities and Members
Equity          |  | $                 | 24,153,240 |                   | $ | 24,436,012 |  
|                                               |  |                   |            |                   |   |            |  

Notes to
Unaudited Condensed Financial Statements are an integral part of this
Statement.

3

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Table of Contents

SOY ENERGY, LLC(A Development Stage Company)

Condensed Statements of Operations

|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|------------------------------------------------------ |  | -------------------------------------- | -------- | -------------------------------------- | - | --------------------------------------------------------- | - | - | ---------- | -
|                                                       |  |                                        |          |                                        |   |                                                           |  
|                                                       |  | Three Months
 Ended
 January 31,
 2009 |          | Three Months
 Ended
 January 31,
 2008 |   | From Inception
 (December 15,
 2005) to
 January 31, 2009 |  
|                                                       |  |                                        |          |                                        |   |                                                           |  
|                                                       |  | (Unaudited)                            |          | (Unaudited)                            |   | (Unaudited)                                               |  
|                                                       |  |                                        |          |                                        |   |                                                           |  
|Revenues                                               |  | $                                      |         |                                        | $ |                                                          |   | $ |           |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Operating Expenses                                     |  |                                        |          |                                        |   |                                                           |   |   |            |  
|General and administrative                             |  |                                        | 59,727   |                                        |   | 64,221                                                    |   |   | 727,404    |  
|Professional fees                                      |  |                                        | 120,748  |                                        |   | 49,634                                                    |   |   | 787,814    |  
|Impairment expense                                     |  |                                        |         |                                        |   |                                                          |   |   | 6,922,625  |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Total operating expenses                               |  |                                        | 180,475  |                                        |   | 113,855                                                   |   |   | 8,437,843  |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Operating Loss                                         |  |                                        | (180,475 | )                                      |   | (113,855                                                  | ) |   | (8,437,843 | )
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Other Income                                           |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Interest income                                        |  |                                        | 66,792   |                                        |   | 263,475                                                   |   |   | 1,264,842  |  
|Other income                                           |  |                                        |         |                                        |   |                                                          |   |   | 13,024     |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Total other income                                     |  |                                        | 66,792   |                                        |   | 263,475                                                   |   |   | 1,277,866  |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Net (Loss) Income                                      |  | $                                      | (113,683 | )                                      | $ | 149,620                                                   |   | $ | (7,159,977 | )
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Weighted Average Units Outstanding - Basic and Diluted |  |                                        | 33,018   |                                        |   | 33,768                                                    |   |   | 18,495     |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Net (Loss) Income Per Unit - Basic and Diluted         |  | $                                      | (3.44    | )                                      | $ | 4.43                                                      |   | $ | (387.13    | )
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  

Notes to
Unaudited Condensed Financial Statements are an integral part of this
Statement.

4

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Table of Contents

SOY ENERGY, LLC(A Development Stage Company)
Condensed Statements of Cash Flows

|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|---------------------------------------------------------------------------------------------------- |  | -------------------------------------- | ---------- | -------------------------------------- | - | --------------------------------------------------------- | - | - | ----------- | -
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|                                                                                                     |  | Three Months
 Ended
 January 31,
 2009 |            | Three Months
 Ended
 January 31,
 2008 |   | From Inception
 (December 15,
 2005) to
 January 31, 2009 |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |  
|                                                                                                     |  | (Unaudited)                            |            | (Unaudited)                            |   | (Unaudited)                                               |  
|Cash Flows from Operating Activities                                                                 |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Net (loss) income                                                                                    |  | $                                      | (113,683   | )                                      | $ | 149,620                                                   |   | $ | (7,159,977  | )
|Adjustments to reconcile net (loss) income
 to net cash (used for) provided by operating activities: |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Depreciation                                                                                         |  |                                        | 444        |                                        |   | 443                                                       |   |   | 2,936       |  
|Impairment of long-lived assets                                                                      |  |                                        |           |                                        |   |                                                          |   |   | 6,922,625   |  
|Write off of construction services related
 to terminated agreement                                  |  |                                        |           |                                        |   |                                                          |   |   | 50,000      |  
|Write off of loan commitment fees                                                                    |  |                                        |           |                                        |   |                                                          |   |   | 25,000      |  
|Non-cash interest income                                                                             |  |                                        |           |                                        |   |                                                          |   |   | (30,000     | )
|Changes in operating assets and
 liabilities:                                                        |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Accrued interest receivable                                                                          |  |                                        | 17,005     |                                        |   | (77,397                                                   | ) |   | (13,570     | )
|Prepaid expenses                                                                                     |  |                                        | 1,100      |                                        |   | 1,135                                                     |   |   | (37,445     | )
|Accounts payable                                                                                     |  |                                        | 22,788     |                                        |   | 24,727                                                    |   |   | 270,502     |  
|Accrued expenses                                                                                     |  |                                        | 3,234      |                                        |   | 8,538                                                     |   |   | 11,143      |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Net cash (used for) provided by operating
activities                                                 |  |                                        | (69,112    | )                                      |   | 107,066                                                   |   |   | 41,214      |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Cash Flows from Investing Activities                                                                 |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Capital expenditures                                                                                 |  |                                        | (195,111   | )                                      |   | (1,778,016                                                | ) |   | (10,783,559 | )
|Proceeds from disposal of property and
 equipment                                                    |  |                                        |           |                                        |   |                                                          |   |   | 1,725,000   |  
|Payments for design services deposit                                                                 |  |                                        |           |                                        |   |                                                          |   |   | (5,450,000  | )
|Refund of design services deposit                                                                    |  |                                        |           |                                        |   |                                                          |   |   | 3,300,000   |  
|Payments for construction deposit                                                                    |  |                                        |           |                                        |   |                                                          |   |   | (2,500,000  | )
|Refund of construction deposit                                                                       |  |                                        |           |                                        |   |                                                          |   |   | 2,450,000   |  
|Payments for certificates of deposit                                                                 |  |                                        |           |                                        |   | (100,000                                                  | ) |   | (1,950,000  | )
|Proceeds from maturing certificates of
 deposit                                                      |  |                                        |           |                                        |   |                                                          |   |   | 1,950,000   |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Net cash used for investing activities                                                               |  |                                        | (195,111   | )                                      |   | (1,878,016                                                | ) |   | (11,258,559 | )
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Cash Flows from Financing Activities                                                                 |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Loan commitment fees                                                                                 |  |                                        |           |                                        |   |                                                          |   |   | (25,000     | )
|Members contributed capital                                                                         |  |                                        |           |                                        |   |                                                          |   |   | 31,968,000  |  
|Payments for offering costs                                                                          |  |                                        |           |                                        |   |                                                          |   |   | (186,428    | )
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Net cash provided by financing activities                                                            |  |                                        |           |                                        |   |                                                          |   |   | 31,756,572  |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Net (Decrease) Increase in Cash and Equivalents                                                      |  |                                        | (264,223   | )                                      |   | (1,770,950                                                | ) |   | 20,539,227  |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Cash and Equivalents at Beginning of Period                                                          |  |                                        | 20,803,450 |                                        |   | 16,244,811                                                |   |   |            |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Cash and Equivalents at End of Period                                                                |  | $                                      | 20,539,227 |                                        | $ | 14,473,861                                                |   | $ | 20,539,227  |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Supplemental Cash Flow Information                                                                   |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Capitalized interest paid                                                                            |  | $                                      |           |                                        | $ |                                                          |   | $ | 133,556     |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Supplemental Schedule of Noncash Investing
 and Financing Activities                                 |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Construction-in-progress included in
 accounts payable                                               |  | $                                      |           |                                        | $ | 1,085,208                                                 |   | $ |            |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Construction-in-progress applied against
 design services deposit                                    |  | $                                      |           |                                        | $ | 48,675                                                    |   | $ | 963,675     |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Design services deposit applied against
 accounts payable to related party                           |  | $                                      |           |                                        | $ |                                                          |   | $ | 431,696     |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Property and equipment returned for member
 units                                                    |  | $                                      |           |                                        | $ |                                                          |   | $ | 750,000     |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  
|Property and equipment reclassified to
 assets held for sale                                         |  | $                                      |           |                                        | $ |                                                          |   | $ | 3,557,061   |  
|                                                                                                     |  |                                        |            |                                        |   |                                                           |   |   |             |  

Notes to
Unaudited Condensed Financial Statements are an integral part of this
Statement.

5

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Table of Contents

SOY ENERGY, LLC(A Development Stage
Company)
Notes to Unaudited Condensed Financial Statements
January 31, 2009

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The
accompanying unaudited condensed interim financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted as permitted by such rules and regulations. These financial statements
and related notes should be read in conjunction with the financial statements
and notes thereto included in the Companys audited financial statements for
the year ended October 31, 2008, contained in the Companys Form 10-KSB.

In
the opinion of management, the interim condensed financial statements reflect
all adjustments, consisting of only normal recurring adjustments, considered
necessary for fair presentation of the Companys financial position as of
January 31, 2009 and the results of operations and cash flows for all periods
present.

Nature of
Business

Soy
Energy, LLC (a development stage Iowa limited liability company) was organized
to develop, own and operate a 30 million gallon per year (MGY) production
biodiesel facility between Cleghorn and Marcus, Iowa in Cherokee County. The
Company was formed December 15, 2005 to have a perpetual life. As of
January 31, 2009, Soy Energy is in the development stage and is
considering the purchase of or investment in an existing biodiesel facility.

Accounting
Estimates

Management
uses estimates and assumptions in preparing financial statements in accordance
with generally accepted accounting principles. Those estimates and assumptions
affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities, and reported revenues and expenses. Significant
estimates include long-lived asset impairment analysis. Actual results may
differ from previously estimated amounts and such differences may be material
to the financial statements.

Property,
Plant and Equipment

Equipment
is stated at cost and is depreciated over estimated service lives of related
assets, five years, using the straight-line method of accounting. Ordinary
maintenance and repairs are expensed as incurred. Cost of renewals and
betterments are capitalized in appropriate property and equipment accounts and
depreciated as discussed above.

Long-Lived
Assets

The
Company reviews property and equipment and other long-lived assets for
impairment in accordance with Statement of Financial Accounting Standards No.
144 (SFAS No. 144), Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed of.

Long-lived
assets, such as property, plant, and equipment, and other long-term intangible
assets, are reviewed for impairment whenever events or changes in circumstances
indicate the carrying amount of an asset may not be recoverable. If
circumstances require a long-lived asset be tested for possible impairment, the
Company first compares undiscounted cash flows expected to be generated by an
asset to the carrying value of the asset. If the carrying value of the
long-lived asset is not recoverable on an undiscounted cash flow basis,
impairment is recognized to the extent that the carrying value exceeds its fair
value. Fair value is determined through various valuation techniques including
discounted cash flow models, quoted market values and third-party independent
appraisals, as considered necessary.

6

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Table of Contents

SOY ENERGY, LLC(A Development Stage
Company)
Notes to Unaudited Condensed Financial Statements
January 31, 2009

2. LIQUIDITY

The
Company is a developmental stage company and has no operating revenues. The
Company has determined it is not currently feasible to build a biodiesel
facility with the available cash on hand. The Company is currently considering purchasing or investing in an
existing biodiesel facility. The Companys current cash reserves are sufficient
to fund operations without additional financing through 2010 if it does not
build or purchase a biodiesel plant.

The
Company may return a portion of the equity proceeds, net of any outstanding
obligations to its members, if it does not build or invest in an existing
biodiesel facility, which amount would be less than members original investment.

3. FAIR VALUE MEASUREMENTS

Effective
November 1, 2008, the Company adopted Statement of Financial Accounting
Standard No. 157, Fair Value
Measurements (SFAS 157), as it applies to our financial instruments,
and Statement of Financial Accounting Standard No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
(SFAS 159). SFAS 157 defines fair value, outlines a framework for measuring
fair value, and details the required disclosures about fair value measurements.
SFAS 159 permits companies to irrevocably choose to measure certain financial
instruments and other items at fair value. SFAS 159 also establishes
presentation and disclosure requirements designed to facilitate comparison
between entities that choose different measurement attributes for similar types
of assets and liabilities.

Under
SFAS 157, fair value is defined as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date in the principal or most advantageous
market. SFAS 157 establishes a hierarchy in determining the fair value of an
asset or liability. The fair value hierarchy has three levels of inputs, both
observable and unobservable. SFAS 157 requires the utilization of the lowest
possible level of input to determine fair value. Level 1 inputs include quoted
market prices in an active market for identical assets or liabilities. Level 2
inputs are market data, other than Level 1, that are observable either directly
or indirectly. Level 2 inputs include quoted market prices for similar assets
or liabilities, quoted market prices in an inactive market, and other
observable information that can be corroborated by market data. Level 3 inputs
are unobservable and corroborated by little or no market data.

Except
for those assets and liabilities which are required by authoritative accounting
guidance to be recorded at fair value in our balance sheets, the Company has
elected not to record any other assets or liabilities at fair value, as
permitted by SFAS 159. No events occurred during the quarter ended January 31,
2009 would require adjustment to the recognized balances of assets or
liabilities which are recorded at fair value on a nonrecurring basis.

The
following table provides information on those assets measured at fair value on
a recurring basis.

|                 |  |                                     |            |                               |         |            |         |   |   |  |   |   | 
|---------------- |  | ----------------------------------- | ---------- | ----------------------------- | ------- | ---------- | ------- | - | - |  | - | - | 
|                 |  |                                     |            | Fair
 Value Measurement Using |        
|                 |  | Fair
 Value as of
 January 31, 2009 |            |                               |        
|                 |  |                                     | Level 1    |                               | Level 2 |            | Level 3 |  
|                 |  |                                     |            |                               |         |            |         |   |  
|Cash equivalents |  | $                                   | 18,745,596 |                               | $       | 18,745,596 |         | $ |  |  | $ |  | 

The fair value of cash
equivalents, which includes money market funds, are based on quoted market
prices in an active market.

4. ASSETS HELD FOR SALE

The
Company is actively working to sell the assets held for sale. These assets have
been recorded at their estimated fair value, less estimated selling
costs. The fair value of these assets was determined based on recent sales of
similar equipment.

7

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Table of Contents

SOY ENERGY, LLC(A Development Stage
Company)
Notes to Unaudited Condensed Financial Statements
January 31, 2009

Amounts included in assets
held for sale are as follows:

|                                            |  |                    |           |                     |   |           | 
|------------------------------------------- |  | ------------------ | --------- | ------------------- | - | --------- | 
|                                            |  | January
 31,
 2009 |           | October
 31,
 2008* |  
|                                            |  |                    |           |                     |  
|Land                                        |  | $                  | 250,262   |                     | $ | 250,262   | 
|Equipment                                   |  |                    | 3,306,799 |                     |   | 3,306,799 | 
|                                            |  |                    |           |                     |   |           | 
|                                           
|                                            |  | $                  | 3,557,061 |                     | $ | 3,557,061 | 
|                                            |  |                    |           |                     |   |           | 
|*Derived from audited
 financial statements |  |                    |           |                     |   |           | 

5. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The
Company is subject to legal proceedings and claims which arise in the ordinary
course of business. Accordingly, management recorded a liability relating to
the probable future settlement of a claim as of October 31, 2008 which
remains unsettled at January 31, 2009. In the opinion of management, the
remaining matters are adequately covered by insurance, or if not covered, are
without merit, are of such a nature, or involve such amounts, as would not
materially affect the financial position or results of operations of the
Company. Nevertheless, due to uncertainties in the settlement process, it is at
least reasonably possible that managements view of the outcomes will change in
the near term.

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Table of Contents

Item 2. Managements Discussion and Analysis
of Financial Condition and Results of Operation

Forward Looking Statements

This
report contains forward-looking statements that involve future events, our
future performance and our expected future operations and actions. In some
cases you can identify forward-looking statements by the use of words such as
may, will, should, anticipate, believe, expect,
plan, future,
intend, could, estimate, predict, hope, potential,
continue, or
the negative of these terms or other similar expressions. These forward-looking
statements are only our predictions and involve numerous assumptions, risks and
uncertainties, including, but not limited to, those business risks and factors
described elsewhere in this report, in our other Securities and Exchange
Commission filings, as well as those listed below.

| |   |                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Overcapacity
 within the biodiesel industry;                                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | The
 ability of any company we may invest in or merge with to effectively operate
 its plant and manage its business;                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes
 in our business strategy, capital improvements or development plans;                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Lack
 of member approval to merge with or invest in another company that owns an
 existing biodiesel plant;                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Lack
 of definitive documents to merge with or invest in another company that owns
 an existing biodiesel plant;                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Availability
 and costs of feedstock, particularly soy oil, animal fats and corn oil;                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes
 in the price and market for biodiesel and glycerin;                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Our
 ability to successfully complete a merger with or investment in a plant which
 owns an existing biodiesel plant;                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes
 in or elimination of governmental laws, tariffs, trade or other controls or
 enforcement practices such as national, state or local energy policy; federal
 biodiesel tax incentives; or environmental laws and regulations that apply to
 the plant operations of any company we may invest in or merge with and their
 enforcement;
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes
 in general economic conditions impacting the availability and price of
 vegetable oils and animal fats;                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Total
 U.S. consumption of diesel;                                                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Weather
 changes, strikes, transportation or production problems causing supply
 interruptions or shortages affecting the availability and price of feedstock;                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes
 in interest rates or the availability of credit;                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Our
 ability to generate free cash flow to invest in our business;                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Our
 potential liability resulting from future litigation;                                                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | General
 economic conditions;                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes
 and advances in biodiesel production technology;                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Competition
 from other alternative fuels; and                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Other
 factors described elsewhere in this report.                                                                                                                                                                                                                                                                                            

We
undertake no duty to update these forward looking statements, even though our
situation may change in the future. Furthermore, we cannot guarantee future
results, events, levels of activity, performance or achievements. We caution
you not to put undue reliance on any forward-looking statements which speak
only as of the date of this report. You should read this report completely and
with the understanding that our actual future results may be materially different
from what we currently expect. We qualify all of our forward looking statements
by these cautionary statements.

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Table of Contents

Overview

Soy
Energy, LLC was organized as an Iowa limited liability company by filing
articles of organization with the Iowa Secretary of State on December 15, 2005.
We anticipated constructing a biodiesel plant with a production capacity of 15
million gallons per year using technology provided by Best Energies, Inc.
(Best Energies) in Marcus, Iowa. However, given the current downturn in
economic and market conditions combined with Best Energies inability to make a
$5,000,000 equity contribution, Management determined in October 2008 that
obtaining the financing to construct our plant would not likely be feasible.
Management is now exploring its options to negotiate a plan to invest in or
merge with a company that owns an existing biodiesel plant. Currently, our
principal place of business is located at P.O. Box 663, 222 N. Main St.,
Marcus, Iowa 51035.

We
previously entered into a Phase 2 Agreement and an Agreement for
Pre-Construction Services with Renewable Energy Group, Inc. of Ames, Iowa
(REG). Our board of directors determined it was in the best interest of the
company to change our design-builder to Bratney Companies (Bratney). We paid
REG $2,500,000 under our Phase 2 and Pre-Construction Services Agreements. We
requested that REG immediately refund $2,200,000 and provide us an itemized
list of performed services for the remaining $300,000. We immediately received
$2,200,000 and subsequently received $250,000 back from REG. We paid $1,500,000
of the refunded amount to Bratney, as a deposit, under our Phase I Design
Services Agreement.

In
June 2007, we signed a design-build agreement with Bratney for the design and
construction of a 30 million gallon per year biodiesel facility. We agreed to a
guaranteed maximum price of $48,855,000 to construct the plant. On March 6,
2008, we gave notice to Bratney that we were terminating our design-build
agreement with them, as Management believed that the biodiesel plant as designed
would not be profitable to operate due to the high cost of soybean oil and
increasing costs of animal fats. Management decided to pursue a different
biodiesel plant design utilizing Best Energies technology in order to reduce
construction and future operating costs of our biodiesel plant. We paid Bratney
approximately $13,659,000 for design and construction related services
associated with the biodiesel plant. On July 25, 2008, we executed a
termination agreement which settled certain issues we had with Bratney
regarding the termination of the design-build agreement. In the termination
agreement, Bratney agreed to refund $4,500,000, including amounts for
construction assets returned, previously paid under the design-build agreement
and to provide certain documents and information necessary for us to continue
developing our project. We received the $4,500,000 from Bratney on July 25,
2008. Additionally, we executed a redemption agreement with Bratney pursuant to
which Bratney agreed to return its 750 membership units for cash and a non-cash
settlement of approximately $750,000 of construction-in-progress as part of the
termination agreement. At the time of termination, we analyzed the Bratney assets
under construction and determined that only a portion of the assets could be sold. We recognized impairment
of approximately $6,923,000 related to these assets during 2008.

On
April 10, 2008, we held our 2008 annual member meeting, at which our members
approved pursuing the use of Best Energies technology for the biodiesel plant
and reducing the initial production capacity of the biodiesel plant from 30
million gallons per year to 15 million gallons per year. We believed that the
cost to construct the Best Energies biodiesel plant would be approximately
$32,334,000. We have never entered into a definitive agreement with Best
Energies, and we no longer intend to construct our own biodiesel plant.

Because
we no longer plan to construct our plant, any funds we have expended in our
construction and plant development efforts will be deemed a loss. From our
inception to January 31, 2009, we have incurred accumulated losses of
approximately $7,160,000 including the impairment of approximately $6,923,000 discussed above. Since we have not commenced any operations, we do not
yet have comparable income, production or sales data.

Liquidity and Capital Resources

Plan
of Operations

We
expect to spend the next 12 months focused primarily on negotiating terms of an agreement with companies
that own an existing biodiesel plant for a merger or investment, obtaining
member approval of such terms when agreed upon, filing the necessary reports with the Securities and Exchange
Commission and closing on a merger or investment in such a company. Until we have a more definitive plan to merge with
or invest in another company, we do not have an estimate of the costs for this
new business plan.

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Table of Contents

We
raised $1,300,000 of equity in our private placement offerings to fund our
development, organizational and offering expenses. This includes $500,000 we
raised in our founders offering and $800,000 we raised in our seed capital
offering. In our Iowa intrastate offering, we raised $30,668,000 in equity.

On
June 7, 2007, we received a contingent loan commitment from AgStar Financial
Services agreeing to provide us with approximately $33,487,000 in financing to
capitalize the biodiesel plant. The AgStar loan commitment was contingent on
AgStar securing the participating lenders required to fund the loan commitment,
other to be determined conditions required by AgStars legal counsel, and
conditions that may have been required by any participating lenders. Based on
this contingent loan commitment, we satisfied all of the requirements of our
escrow agreement to release the equity funds from escrow.

AgStar
did not secure the participating lenders to fund the debt financing we required
for our biodiesel plant. Given the current global economic conditions and
notification from Best Energies that it will not be able to contribute a
$5,000,000 equity investment, Management determined in October 2008 it will not
likely be able to obtain the necessary financing to construct a biodiesel
plant. We are now in the process of exploring our options to invest in or merge
with a constructed biodiesel plant and may present a plan to our members for
approval in the event we are able to negotiate a viable option in this regard.

Of
the $30,668,000 we raised in equity, we have total assets remaining of
approximately $24,153,000 as of January 31, 2009, consisting primarily of
approximately $20,539,000 of cash and equivalents and assets held for sale of
approximately $3,557,000. We are currently working to sell the assets held for
sale, which include two boilers and three centrifuges. Because we do not have
any definitive agreements and are currently still exploring our options to
enter into a merger or investment with a company that owns an existing
biodiesel plant, we are uncertain of what amount of resources we will need to
go forward with this business plan. We do anticipate, however, that any merger
or investment we may enter into will result in transferring the large majority
of our assets as a result of such transaction.

Sources
and Uses of Funds

Below
is a table showing our sources of funds and our estimated use of proceeds on
our attempts to construct our own plant. We anticipate that any remaining funds
will be used to invest in our merge with a company that owns any existing
biodiesel plant, although we do not have member approval and have not executed
definitive documents regarding such a transaction.

ESTIMATED USE OF PROCEEDS

|                                                                                                         |  |        |            |    
|-------------------------------------------------------------------------------------------------------- |  | ------ | ---------- | ---
|Use of Proceeds                                                                                          |  | Amount |           
|                                                                                                         |  |        |           
|Equity Proceeds Raised                                                                                   |  | $      | 31,782,000 | (1)
|Estimated Proceeds Used in Development and Partial Construction of
a
 Biodiesel Facility in Marcus, Iowa |  |        | 11,513,275 | (2)
|Estimated Proceeds
Remaining to Invest in or Merge with another company                                  |  | $      | 20,268,725 | (3)

|                                                                                                                                                                                                                                                                                                                   | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|(1) This
 amount is our total equity proceeds less the redemption agreement for 750
 units we executed with Bratney and our offering costs of approximately
 $186,000. The primary costs we incurred in raising capital included legal
 fees, accounting fees, printing and distribution costs, and meeting costs.
|                                                                                                                                                                                                                                                                                                                   | 
|(2) We
 believe these amounts represent a reasonable estimate of the proceeds we used
 on construction, building and facilities, purchase and installation of
 machinery and equipment and purchases of real estate related to our attempt
 to construct a biodiesel facility in Marcus, Iowa.                    
|                                                                                                                                                                                                                                                                                                                   | 
|(3) This
 amount is our current cash and equivalents, less our accounts payable. If we
 sell some of the assets we have held for sale, then this will increase the
 proceeds remaining to invest in or merge with another company.                                                                                

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Site
Acquisition and Development

We
purchased approximately 35 acres for our plant site near Marcus, Iowa in
Cherokee County. In August 2007, we commenced construction of our biodiesel
plant. In November 2007, we suspended all construction related activities on
our plant while we sought the debt financing we need to complete construction
of the plant. To date, we have completed approximately 10% of the construction
of our biodiesel plant. In October 2008, Management determined that it would
not likely be feasible to complete construction of the biodiesel plant. We may
be unable to sell the site and the construction completed at a profit, or at
all, and we may be unable to transfer such equipment and land as a part of any
investment or merger we may complete. Due to the significant changes we made to
our project, we recorded an impairment charge during our quarter ended October
31, 2008 in the value of constructed and construction in process assets of
approximately $6,923,000, a portion of which is from the site we purchased.

Plant
Construction and Start-Up of Plant Operations

Plant
Construction Activity

Construction
of the plant in Marcus, Iowa was approximately 10% complete when Management
determined completion of the construction was no longer feasible. In October
2008 we terminated our agreement with Best Energies because it notified us it
was no longer able to commit a $5,000,000 equity contribution to the project.
As a result of this and the current economic downturn, Management determined
that obtaining financing to complete construction was not likely feasible and
began exploring its options to invest in or merge with a company that owns an existing biodiesel plant.

Permitting
and Costs and Effects of Compliance with Environmental Laws

Stanley
Consultants, Inc. assisted us in obtaining our required permits. We previously
obtained or were in the process of obtaining all of the required air, water,
construction and other permits necessary to construct the plant and to operate
the plant. Because we no longer anticipate completing the plant, we will likely
lose any resources we have invested in applying for such permits.

Feedstock
Procurement and Sale of Biodiesel

We
previously entered into corn oil supply agreements with Little Sioux Corn
Processors and Siouxland Ethanol, each of which is an ethanol production
company, however; we have allowed these agreements to expire in connection with
Managements determination that it was not feasible for us to obtain the
financing necessary to construct our own plant. We anticipate that we will
either: 1) merge with or invest in a company that owns an existing biodiesel
plant that has the technology to process corn oil; or 2) require any company we
merge with or invest in to agree to install corn oil processing technology as a
part of such transaction.

We
previously entered into a biodiesel marketing agreement with Eco Energy, Inc.,
however; Eco Energy, Inc. has terminated this agreement with us as of January
22, 2009. We anticipate that any company we may invest in or merge with will
have a biodiesel marketing agreement in place and we may not have any input as
to the terms of such agreement or we may not have the ability to change such
terms. If any company we invest in or merge with does not have a biodiesel
marketing agreement in place, such lack of a marketer may reduce the companys
profitability and we may be unable to find a marketer or execute a marketing
agreement on favorable terms.

We
anticipate that any plant we invest in or merge with will be complete and
capable of operating. Given the current economic downturn, lack of demand for
biodiesel and high feedstock prices, many biodiesel plants are not currently
operating at full capacity or have shut down temporarily or permanently. Therefore,
any plant we may merge with or invest in may not be operating at full capacity,
or at all, at the time our transaction with any such company is complete.

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Trends and Uncertainties Impacting the Biodiesel Industry and
Our Future Operations

Any
company we may invest in or merge with will be subject to industry-wide factors
that affect its operation of its biodiesel plant and financial performance.
These factors include, but are not limited to, the available supply and cost of
feedstock from which the biodiesel and glycerin will be processed; dependence
on a biodiesel marketer and glycerin marketer to market and distribute its
products, in the event such company utilizes outside marketers; the competitive
nature of the biodiesel industry; possible legislation at the federal, state
and/or local level; changes in federal tax incentives; the cost of complying
with extensive environmental laws that regulate the biodiesel industry; the
risk of decreased demand from European markets; and the biodiesel industrys
lack of market share and instability in the renewable fuels industry as a
whole.

We
anticipate the revenues of any company we may merge with or invest in will
consist of sales of biodiesel and glycerin. We expect biodiesel sales to
constitute the bulk of its revenues. Although the price of diesel fuel has
increased over the last several years, diesel fuel prices
per gallon remain at levels below or equal to the price of biodiesel. In
addition, other more cost-efficient domestic alternative fuels may be developed
and displace biodiesel as an environmentally-friendly alternative. If diesel
prices do not continue to increase or a new fuel is developed to compete with
biodiesel, it may be difficult to market biodiesel, which could result in the
loss of some or all of the value of our units. Further, if the supply of
biodiesel increases from new biodiesel plants scheduled to begin production, or
from current plants beginning to operate at larger percentages of their capacities,
then we do not expect current biodiesel prices to be sustainable in the long
term and the industry will need to continue to grow demand to offset the
increased supply brought to the market place by additional production.

We
also expect any company we invest in or merge with to benefit from federal and
state biodiesel supports and tax incentives, however, these benefits may be
subject to the structure of any such company and the applicability of such
supports and tax incentives to the company with which we may merge with or
invest in. The most significant of these are the Volumetric Ethanol Excise Tax
Credit (VEETC) and the Renewable Fuels Standard (RFS). VEETC provides a tax
credit of $1.00 per gallon of biodiesel. VEETC may be claimed in both taxable
and nontaxable markets, including exempt fleet fuel programs and off-road
diesel markets. The desired effect of VEETC is to streamline the use of
biodiesel and encourage petroleum blenders to blend biodiesel as far upstream
as possible, which will allow more biodiesel to be used in the marketplace.
VEETC also streamlines the tax refund system for below-the-rack blenders to
allow a tax refund of the biodiesel tax credit on each gallon of biodiesel
blended with diesel (dyed or undyed) to be paid within 20 days of blending.
Below-the-rack blenders are those blenders that market fuel that is for ground
transportation engines and is not in the bulk transfer system. VEETC was set to
expire on December 31, 2008, but was extended until December 31, 2009 as part
of the Emergency Economic Stabilization Act of 2008 (EESA). The VEETC, as
extended by the EESA, contains a few significant changes. The law closes the
so-called splash and dash loophole, which refers to the instances where
biodiesel produced in foreign countries was transported to the United States,
blended with a small percentage of diesel to claim the tax incentive, and then
shipped to a third country for sale and use. Pursuant to EESA, biodiesel
produced outside the United States will no longer qualify for the biodiesel tax
incentive. The law also reduces the credit for biodiesel co-processed with
petroleum feedstock from $1.00 to 50 cents per gallon. Although VEETC was
recently extended for an additional year, it is now set to expire on December
31, 2009, and there can be no assurance that it will be renewed again in the
future.

The
Energy Policy Act of 2005 created the Renewable Fuel Standard (RFS) which
required refiners to use 7.5 billion gallons of renewable fuels by 2012. The
Energy Independence and Security Act of 2007 (EISA) expanded the existing RFS
to require the use of 9 billion gallons of renewable fuel in 2008, increasing
to 36 billion gallons of renewable fuel by 2022. The EISA requires that 600
million gallons of renewable fuel used in 2009 must come from advanced biofuels
other than corn-based ethanol, such as ethanol derived from cellulose, sugar or
crop residue and biomass-based diesel (which includes biodiesel and renewable
diesel), increasing to 21 billion gallons in 2022. The EISA further includes a
requirement that 500 million gallons of biodiesel and biomass-based diesel fuel
be blended into the national diesel pool in 2009, gradually increasing to one
billion gallons by 2012. However, in November 2008, the EPA announced that the
RFS program in 2009 will continue to be applicable to producers and importers
of gasoline only. This means that the 500 million gallons of biomass-based
diesel required by the RFS, as amended by the EISA, does not have to be blended
into U.S. fuel supplies in 2009. This is due to the fact that the regulatory
structure of the original RFS program does not provide a mechanism for
implementing the EISA requirement for the use of 500 million gallons of
biomass-based diesel. The EPA intends to propose options and develop mechanisms
for implementing the EISA biomass-diesel requirements.

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We
anticipate that the RFS may increase demand for biodiesel in the long-term, as
it sets a minimum usage requirement for biodiesel and other types of
biomass-based diesel. However, there can be no assurances that demand for
biodiesel will be increased by the RFS. As of September 29, 2008, the most
recently released report, the National Biodiesel Board estimated that national
biodiesel production capacity was approximately 2.61 billion gallons per year,
which already exceeds the 2012 biodiesel and biomass-based diesel use mandate
contained in the EISA. Accordingly, there is no assurance that additional
production of biodiesel and biomass-based diesel will not continually outstrip
any additional demand for biodiesel that might be created by this law.
Furthermore, any additional delays in the EPAs implementation of the EISA
biomass-based diesel requirements could hinder the stimulation of additional
biodiesel demand. If the RFS does not significantly increase demand compared to
increases in supply, the RFS will not likely lead to an increase in biodiesel
demand. We also anticipate that the expanded RFS will be primarily satisfied by
ethanol, including both corn-based and other types of ethanol. The amount of
corn-based ethanol that may be used to satisfy the RFS requirements is capped
at 15 million gallons starting in 2015 and, accordingly, other types of
ethanol, including cellulose-based ethanol, will likely be used to satisfy any
requirements over and above the 15 million gallon corn-based ethanol cap.

In
May 2008, Congress passed the Food and Energy Conservation Act of 2008 (the
Farm Bill). The Farm Bill reauthorizes the CCC Bioenergy Program which was
created to promote sustained increases in bioenergy production and related
industrial agricultural commodities, as well as to help improve the environment
through the production and use of cleaner burning fuels. Under the program, the
USDA makes payments through the Commodity Credit Corporation to eligible
producers to encourage increased purchases of eligible commodities for the
purpose of expanding production of bioenergy and supporting new production
capacity. The Farm Bill authorized $300 million in mandatory funding for the
program over the 5 year duration of the Farm Bill and authorizes an additional
$25 million in funding each year from fiscal year 2009 through fiscal year
2012, subject to Congress annual appropriations process. Most importantly,
ethanol produced from corn will not qualify under the program, which means more
of the benefits of this program could go to biodiesel producers.

The
applicability of such supports and incentives may also be dependent upon how any
merger or investment we may enter into is structured and may not result in our
members receiving direct benefits. Changes to these supports or incentives
could significantly impact demand for biodiesel.

Biodiesel
production continues to grow as additional plants become operational. The
National Biodiesel Board estimates that in 2007, biodiesel production reached
450 million gallons. In September 2008, the most recently reported data, the
National Biodiesel Board estimated there were 176 active plants with an annual
production capacity of 2.61 billion gallons annually, with another 39 plants
and 1 expansion in construction. The biodiesel industry is becoming more
competitive nationally as a result of the substantial construction and
expansion that has occurred in the industry. We believe this increase in
biodiesel supply, as well as high soybean oil prices, have forced some biodiesel
producers to cut back production or cease production altogether. The
combination of additional supply and stagnant or reduced demand may damage our
ability to successfully execute our current business plan, or may damage the
ability of any company we may invest in or merge with to operate profitably.

In
recent months the global equity markets have been disrupted and have
experienced significant volatility. The U.S. stock markets have tumbled since
September 2008 upon the collapse of multiple major financial institutions, the
federal governments takeover of two major mortgage companies, Freddie Mac and
Fannie Mae, and the enactment of several government bailout plans pursuant to
which the federal government has directly invested in troubled financial
institutions. Financial institutions across the country have lost billions of
dollars due to the extension of credit for the purchase and refinance of
over-valued real property. The collapse of these financial institutions and the
continued volatility in the credit market may significantly decrease the
availability of any credit we may need to fund our project. The U.S. economy is
also in the midst of a recession, with increasing unemployment rates and
decreasing retail sales. A recession is expected to decrease availability of
equity investment monies for our business as well.

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The
European Union (EU) is currently conducting antisubsidy and antidumping
investigations on U.S. biodiesel imports into Europe. Based on complaints from
the European Biodiesel Board (EBB), the European Commission claims that U.S.
biodiesel producers, after claiming maximum U.S. subsidies for B99 biodiesel,
have been dumping biodiesel in the European market, where it may also be
eligible for European subsidies. The European Commission
states that these factors have adversely affected the European biodiesel
industry, causing adverse effects on the prices and market share of European
biodiesel producers. The EBB claims that subsidized B99 exports are a trade
practice that breaches World Trade Organization rules. If the findings of the
investigation indicate that taking action is justified, the European Commission
would likely impose duties or tariffs on biodiesel imported into the EU. Much
of the demand for biodiesel from U.S. producers comes from Europe and any
decrease in demand or profitability from sales to that market would likely have
a negative impact on the industry. In addition, this could have a negative
impact on the ability of any company we may invest in or merge with to compete
with European biodiesel producers in the future.

The
ethanol industry enjoys over 6 billion gallons of annual domestic demand and a
vast existing production, marketing, and transportation network servicing
substantial demand. Conversely, in 2007, according to the National Biodiesel
Board, United States demand for biodiesel was only approximately 450 million
gallons. The entire diesel fuel market constitutes only about one-third of the
gasoline market as a whole. Acceptance of biodiesel by consumers has been slow,
and the biodiesel industry has faced opposition from the trucking industry and
others in regard to legislative mandates for its use.

The
ethanol industry has historically enjoyed substantially more governmental
support than the biodiesel industry on both the federal and state levels.
Although the Energy Policy Act of 2005 enacted or extended certain tax credits
for the biodiesel industry, such incentives had been previously available to
the ethanol industry. Further, despite the fact that the Energy Independence
and Security Act of 2007 provided for a special carve out of the RFS
specifically for biodiesel, it still remains a small percentage of the total
RFS requirement, which will predominantly be fulfilled by ethanol. In addition,
various states offer other ethanol production subsidies which may make ethanol
production more profitable.

Quarterly Financial Results

At
January 31, 2009, we had total assets of approximately $24,153,000 consisting
primarily of cash and equivalents and assets held for sale. At January 31,
2009, we had current liabilities of approximately $282,000 consisting of our
accounts payable and other accrued expenses. Total members equity at January
31, 2009, was approximately $23,872,000. Since our inception, we have generated
no revenue from operations. For the three months ended January 31, 2009, we had
a net loss of approximately $114,000.

Based
upon our recent determination that building the plant would not likely be
feasible, we have begun to explore our options for using our funds to invest in
or merge with a plant that owns an existing biodiesel plant. We have not yet
entered into any definitive documents and are therefore unable to determine
what the total cost of this new business plan will be, and we do not currently
have a capitalization plan in place for any merger or investment. We anticipate
as we begin to negotiate definitive documents and narrow our options for an
investment or merger, we will be able to develop a budget and estimated project
cost for this new option.

Sources of
Funds

In
December 2005, we sold a total of 1,500 units to our founding members at a
price of $333.33 per unit and received aggregate proceeds of $500,000. In
addition, in April 2006, we issued 1,600 units to our seed capital members at a
price of $500 per unit and received aggregate proceeds of $800,000. We sold
30,668 units at a price of $1,000 per unit in our Iowa registered offering and
received aggregate proceeds of $30,668,000. We broke escrow on our Iowa
registered offering in June 2007. We incurred costs of raising capital of approximately
$186,000 related to the equity proceeds raised. These costs primarily consisted
of legal fees, professional fees and printing costs. We executed a redemption
agreement with Bratney pursuant to which Bratney agreed to return its 750
membership units.

We
determined the offering price for our founding members, seed capital and
general offering units based upon the capitalization requirements necessary to
fund our development, organization and financing activities as a
development-stage company with plans to construct and operate a biodiesel
plant. We did not rely upon any independent valuation, book value or other
valuation criteria in determining the founding member, seed capital and general
offering sales price per unit, and we have experienced a change in our business plan since determining these offering prices.

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Debt Financing

During
May 2006, we obtained loans with Farmers State Bank in Marcus, Iowa, totaling
$1,999,000, a portion of which we used to pay REG under our pre-construction
services agreement. Upon termination of our relationship with REG, we received a
refund of a portion of the funds paid to REG under our Phase 2 and
pre-construction services agreement. We paid Bratney $1,500,000 under our Phase
I Design Services Agreement and we paid an additional deposit in June 2007 of
$3,950,000. When we broke escrow on our Iowa registered intrastate offering in
June 2007, we repaid the entire amount of our loans with Farmers State Bank.

On
June 7, 2007, we received a contingent loan commitment from AgStar Financial
Services agreeing to provide us with $33,486,540 in financing to capitalize
construction of the biodiesel plant. The AgStar loan commitment was contingent
on AgStar securing the participating lenders required to fund the loan
commitment, other to be determined conditions required by AgStars legal
counsel, and conditions that may have been required by any participating
lenders. Based on this contingent loan commitment, we satisfied all of the
requirements of our escrow agreement to release the equity funds from escrow.
AgStar failed to secure the participating lenders to fund the debt financing we
required to construct a biodiesel plant.

In
July 2008, we entered into an agreement with Piper Jaffray to act as our debt
placement agent to structure and market senior debt participants in a total
amount of approximately $9,000,000. In exchange for these services, we would
pay Piper Jaffray 1.5% of the aggregate amount of senior debt participants
raised by Piper Jaffray at financial close. We have not, however, taken further
action on this agreement and it is unlikely that Piper Jaffray will be able to
obtain senior debt participants for us. Therefore, we do not expect to make any
payments to Piper Jaffray under this agreement.

In
October 2008, Management determined it would not likely be feasible to obtain
the necessary debt financing to complete construction of our biodiesel plant.
We have therefore begun to explore opportunities to invest in or merge with a
company that owns an existing biodiesel plant. We are still exploring our options
and have not entered into any definitive agreements and therefore are uncertain
what debt financing, if any, will be necessary to complete a merger with or
investment in a company that owns a biodiesel plant.

Grants and
Government Programs

Currently,
there are limited numbers of grants, loans and forgivable loan programs
available to biodiesel producers. We are uncertain what grants, loans and
forgivable loan programs, if any, will be available and utilized by any company
we may invest in or merge with. Some combinations of programs are mutually
exclusive. Funds that we have expended in applying for grants, loans and
forgivable loan programs will likely be a loss, unless we can transfer those
benefits as a result of any merger or investment we enter into, which is not
likely. Any benefits we may have already received may have to be repaid because
we no longer plan to complete construction of our plant.

Critical Accounting Estimates

Management
uses estimates and assumptions in preparing our financial statements in
accordance with generally accepted accounting principles. Those
estimates and assumptions affect reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities, and reported revenues and expenses.
Significant estimates include long-lived asset impairment analysis and the fair value determined for assets held for sale.

Off-Balance Sheet Arrangements

We do not
have any off-balance sheet arrangements.

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Item 3. Quantitative and
Qualitative Disclosures about Market Risks

The
Company is not required to provide the information required by this item
because it is a smaller reporting company.

Item 4T. Controls and Procedures

Our
management, including our Chief Executive Officer (the principal executive
officer), along with our Chief Financial Officer (the principal financial
officer), have reviewed and evaluated the effectiveness of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934, as amended) as of January 31, 2009. Based upon
this review and evaluation, these officers have concluded that our disclosure
controls and procedures were not effective due to the material weaknesses
discussed below.

Due to the
current operations and size of the Company, there is a lack of segregation of
duties in certain functions. The Company is in the process of strengthening
internal controls including enhancing our internal control systems and
procedures to assure that this weakness is corrected and remediated.
Accordingly, our executive officers and management believe that the financial
statements included in this report present fairly in all material respects our
financial condition, results of operations and cash flows for the periods
presented.

Changes in Internal Control over Financial Reporting

Our
management, including our principal executive officer and principal financial
officer, have reviewed and evaluated any changes in our internal control over
financial reporting that occurred as of January 31, 2009 and there has been no
change that has materially affected or is reasonably likely to materially
affect our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From
time to time in the ordinary course of business, we may be named as a defendant
in legal proceedings related to various issues, including without limitation,
workers compensation claims, tort claims, or contractual disputes. We are not
currently subject to any material legal proceeding or claims. Management does
not believe that there are currently any material unasserted claims against us.

Item 1A. Risk Factors.

The
Company is not required to provide the information required by this item
because it is a smaller reporting company.

Item 2. Unregistered Sales
of Equity Securities and Use of Proceeds

During
the past three years we have sold the following units which were not registered
under the Securities Act of 1933:

In
the spring of 2006, we sold 1,600 of our membership units to our seed capital
investors at a price of $500 per unit and received aggregate proceeds of
$800,000. We claimed exemption from federal registration with respect to our
unit sales in our seed capital offering due to the application of Section 3(a)(11)
of the Securities Act of 1933 (regarding intrastate offerings). We also claimed
exemptions from registration in the state of Iowa pursuant to the private
placement and accredited investor exemptions of the Iowa Uniform Securities
Act. We only sold our units in this offering to accredited investors who
represented that they were residents of the state of Iowa.

Commencing
in December 2006, we conducted a registered offering in the state of Iowa, but
were exempt from federal registration of the securities under Section 3(a)(11)
of the Securities Act of 1933. We registered a minimum of 25,000 units and a
maximum of 39,000 units at an offering price of $1,000 per unit. The offering
commenced on December 1, 2006 in the state of Iowa and closed on December 1,
2007. We sold 30,668 units at a price of $1,000 per unit. From our unit sales
we received total aggregate proceeds of $30,668,000. We incurred approximately
$186,000 of offering costs that offset equity proceeds raised. The primary
costs we incurred in raising capital included legal fees, accounting fees,
printing and distribution costs, and meeting costs. Additionally, we executed a redemption agreement with Bratney pursuant to which
Bratney agreed to return its 750 membership units for cash and a non-cash
settlement of approximately $750,000 of construction-in-progress as part of the
termination agreement.

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We were
able to rely on Section 3(a)(11) for the seed capital offering and Iowa
registered offering, because we sold units only to residents of the State of
Iowa and the recipients of securities in each transaction represented their
intention to acquire the securities for investment only and not with a view to,
or for sale in connection with, any distribution thereof, and appropriate
legends were affixed to unit certificates and instruments issued in such
transactions. We gave each investor information about us and gave them
opportunities to ask questions regarding the terms and conditions of the
offering. Our directors and officers sold the units on a best efforts basis and
received no compensation for services related to the offer and sale.

When our
fiscal year ended October 31, 2007, we had total assets exceeding $10,000,000
and more than 500 unit holders; as a result, we were required to file a
registration statement on Form 10 to register our securities under the
Securities Exchange Act of 1934. On February 28, 2008 we filed a Form 10 to
register our securities under the Securities Exchange Act of 1934. Our
registration statement on Form 10 became effective on May 28, 2008.

|                                                     |  |   |             |     
|---------------------------------------------------- |  | - | ----------- | ----
|Net Proceeds                                         |  | $ | 31,782,000  | (1) 
|Capital Expenditures and Construction
 Related Costs |  |   | (11,259,000 | )   
|Project Development Costs                            |  |   | (1,500,000  | )(2)
|Balance                                              |  | $ | 19,023,000  |     

(1) This
 amount is our total equity proceeds less the redemption agreement for 750
 units we executed with Bratney and our offering costs of approximately
 $186,000. The primary costs we incurred in raising capital included legal
 fees, accounting fees, printing and distribution costs, and meeting costs.

(2) This amount only reflects the funds we have expended on project development costs
and does not include the approximately $1,263,000 we have received from
interest on investments. The amount we have received from interest has offset
the amount we expended, as reflected on our statement of cash flows and in the
table Estimated Use of Proceeds above.

Item 3. Defaults Upon Senior
Securities

None.

Item 4T. Submission of
Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits

| |     |                                                                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------
| | (a) | The following exhibits are filed as part of this report. Exhibits
 previously filed are incorporated by reference, as noted.

|                                                                                                                                         |  |                                                                                             
|---------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------
|Exhibit No.                                                                                                                              |  | Exhibit                                                                                     
|                                                                                                                                         |  |                                                                                             
|10.6                                                                                                                                     |  | Design Build Agreement between The Ken Bratney Company and Soy Energy
 dated June 20, 2007.*
|                                                                                                                                         |  |                                                                                             
|31.1                                                                                                                                     |  | Certificate
 Pursuant to 17 CFR 240.13a-14(a).                                              
|                                                                                                                                         |  |                                                                                             
|31.2                                                                                                                                     |  | Certificate
 Pursuant to 17 CFR 240.13a-14(a).                                              
|                                                                                                                                         |  |                                                                                             
|32.1                                                                                                                                     |  | Certificate
 Pursuant to 18 U.S.C. § 1350.                                                  
|                                                                                                                                         |  |                                                                                             
|32.2                                                                                                                                     |  | Certificate
 Pursuant to 18 U.S.C. § 1350.                                                  
|                                                                                                                                         |  |                                                                                             
|* Confidential Treatment Requested.
 Originally filed as Exhibit of the same number on Soy Energys Form 10 filed on February
 28, 2008.

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SIGNATURES

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

|      |                 |  |                                       
|----- | --------------- |  | --------------------------------------
|      |                 |  | SOY ENERGY, LLC                       
|      |                 |  |                                       
|Date  | March 17,
 2009 |  | /s/ Charles
 Sand                     
|      |                 |  |                                       
|      |                 |  | Charles Sand                          
|      |                 |  | President
 and Chief Executive Officer
|      |                 |  | (Principal
 Executive Officer)        
|      |                 |  |                                       
|Date: | March 17,
 2009 |  | /s/ Dallas
 Thompson                  
|      |                 |  |                                       
|      |                 |  | Dallas
 Thompson                      
|      |                 |  | Treasurer
 and Chief Financial Officer

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