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 April 30, 2010                   
|                                                                  |                                                                                    
|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)                           
|                                                      
|                                                      

|                                                                                                                                                                                                                                                                                                                                                                                            |       |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ----
|Check whether the issuer: (1) filed all reports
 required to be filed by Section 13 or 15(d) of the Exchange Act during the
 past 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.                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                            | xYes  | oNo 
|                                                                                                                                                                                                                                                                                                                                                                                            |       |     
|Indicate by check mark
 whether the Registrant has submitted electronically and posted on its
 corporate Web site, if any, every Interactive Data File required to be
 submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
 chapter) during the preceding 12 months (or for such shorter period that the
 Registrant was required to submit and post such files).
|                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                            | Yes o | No o
|                                                                                                                                                                                                                                                                                                                                                                                            |       |     
|Indicate by
 check mark whether the registrant is a large accelerated filer, an
 accelerated filer, or a non-accelerated filer. See definition of accelerated
 filer and large accelerated filer 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).                                                                  
|                                                                                                                                                                                    
|                                                                                                                                                                                     | oYes | xNo
|                                                                                                                                                                                     |      |    
|State the number of shares
 outstanding for each of the issuers classes of common equity as of the
 latest practicable date: As of June 14, 2010, we had 33,018 units
 outstanding.







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 |    | 12
|Item 3.    | Quantitative
 and Qualitative Disclosures about Market Risk                           |    | 19
|Item 4T.   | Controls and
 Procedures                                                              |    | 19
|PART II.   | OTHER INFORMATION                                                                     |    | 20
|Item 1.    | Legal
 Proceedings                                                                    |    | 20
|Item 1A.   | Risk Factors                                                                          |    | 20
|Item 2.    | Unregistered
 Sales of Equity Securities and Use of Proceeds                          |    | 20
|Item 3.    | Defaults Upon
 Senior Securities                                                      |    | 20
|Item 4.    | [Reserved]                                                                            |    | 20
|Item 5.    | Other
 Information                                                                    |    | 20
|Item 6.    | Exhibits                                                                              |    | 21
|SIGNATURES |                                                                                       | 21

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                                                     |  | April 30,
 2010 |            | October 31,
 2009 |  
|                                                           |  |                 |            |                   |  
|                                                           |  | (Unaudited)     |            |                   |   |           
|Current Assets                                             |  |                 |            |                   |   |            |  
|Cash and equivalents                                       |  | $               | 19,447,559 |                   | $ | 19,826,065 |  
|Accrued interest receivable                                |  |                 | 4,680      |                   |   | 6,171      |  
|Prepaid expenses                                           |  |                 | 9,081      |                   |   | 4,441      |  
|                                                           |  |                 |            |                   |   |            |  
|Total current assets                                       |  |                 | 19,461,320 |                   |   | 19,836,677 |  
|                                                           |  |                 |            |                   |   |            |  
|Equipment                                                  |  |                 |            |                   |   |            |  
|Equipment                                                  |  |                 | 8,873      |                   |   | 8,873      |  
|Accumulated depreciation                                   |  |                 | (5,154     | )                 |   | (4,267     | )
|                                                           |  |                 |            |                   |   |            |  
|Net equipment                                              |  |                 | 3,719      |                   |   | 4,606      |  
|                                                           |  |                 |            |                   |   |            |  
|Other Assets                                               |  |                 |            |                   |   |            |  
|Assets held for sale                                       |  |                 | 2,920,637  |                   |   | 3,557,061  |  
|Loan fees                                                  |  |                 | 25,000     |                   |   |           |  
|                                                           |  |                 |            |                   |   |            |  
|Total other assets                                         |  |                 | 2,945,637  |                   |   | 3,557,061  |  
|                                                           |  |                 |            |                   |   |            |  
|                                                           |  |                 |            |                   |   |            |  
|Total Assets                                               |  | $               | 22,410,676 |                   | $ | 23,398,344 |  
|                                                           |  |                 |            |                   |   |            |  
|                                                           |  |                 |            |                   |   |            |  
|LIABILITIES AND MEMBERS EQUITY                            |  |                 |            |                   |   |            |  
|                                                           |  |                 |            |                   |   |            |  
|Current Liabilities                                        |  |                 |            |                   |   |            |  
|Accounts payable                                           |  | $               | 128,262    |                   | $ | 54,879     |  
|Accrued expenses                                           |  |                 | 8,016      |                   |   | 8,027      |  
|                                                           |  |                 |            |                   |   |            |  
|Total current liabilities                                  |  |                 | 136,278    |                   |   | 62,906     |  
|                                                           |  |                 |            |                   |   |            |  
|Members Equity                                            |  |                 |            |                   |   |            |  
|Member contributions, 33,018 units issued
 and outstanding |  |                 | 31,031,572 |                   |   | 31,031,572 |  
|Deficit accumulated during development
 stage              |  |                 | (8,757,174 | )                 |   | (7,696,134 | )
|                                                           |  |                 |            |                   |   |            |  
|Total members equity                                      |  |                 | 22,274,398 |                   |   | 23,335,438 |  
|                                                           |  |                 |            |                   |   |            |  
|                                                           |  |                 |            |                   |   |            |  
|Total Liabilities and Members Equity                      |  | $               | 22,410,676 |                   | $ | 23,398,344 |  
|                                                           |  |                 |            |                   |   |            |  

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
 April 30,
 2010 |          | Three Months
 Ended
 April 30, 
 2009 |  
|                                                        |  |                                      |          |                                       |  
|                                                        |  | (Unaudited)                          |          | (Unaudited)                           |  
|                                                        |  |                                      |          |                                       |   |          |  
|Revenues                                                |  | $                                    |         |                                       | $ |         |  
|                                                        |  |                                      |          |                                       |   |          |  
|Operating Expenses                                      |  |                                      |          |                                       |   |          |  
|General and administrative                              |  |                                      | 57,890   |                                       |   | 64,201   |  
|Professional fees                                       |  |                                      | 215,893  |                                       |   | 82,902   |  
|Impairment expense                                      |  |                                      | 630,863  |                                       |   |         |  
|                                                        |  |                                      |          |                                       |   |          |  
|Total operating expenses                                |  |                                      | 904,646  |                                       |   | 147,103  |  
|                                                        |  |                                      |          |                                       |   |          |  
|                                                        |  |                                      |          |                                       |   |          |  
|Operating Loss                                          |  |                                      | (904,646 | )                                     |   | (147,103 | )
|                                                        |  |                                      |          |                                       |   |          |  
|Other Income                                            |  |                                      |          |                                       |   |          |  
|Interest income                                         |  |                                      | 10,126   |                                       |   | 32,362   |  
|                                                        |  |                                      |          |                                       |   |          |  
|Total other income                                      |  |                                      | 10,126   |                                       |   | 32,362   |  
|                                                        |  |                                      |          |                                       |   |          |  
|                                                        |  |                                      |          |                                       |   |          |  
|Net Loss                                                |  | $                                    | (894,520 | )                                     | $ | (114,741 | )
|                                                        |  |                                      |          |                                       |   |          |  
|                                                        |  |                                      |          |                                       |   |          |  
|Weighted Average Units Outstanding - Basic
 and Diluted |  |                                      | 33,018   |                                       |   | 33,018   |  
|                                                        |  |                                      |          |                                       |   |          |  
|                                                        |  |                                      |          |                                       |   |          |  
|Net Loss Per Unit - Basic and Diluted                   |  | $                                    | (27.09   | )                                     | $ | (3.48    | )
|                                                        |  |                                      |          |                                       |   |          |  

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 Operations

|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|------------------------------------------------------- |  | ------------------------------ | ---------- | ----------------------------- | - | ------------------------------------------------- | - | - | ----------- | -
|                                                        |  |                                |            |                               |   |                                                   |  
|                                                        |  | Six months endedApril 30, 2010 |            | Six months endedApril 30,2009 |   | From Inception(December 15,2005) toApril 30, 2010 |  
|                                                        |  |                                |            |                               |   |                                                   |  
|                                                        |  | (Unaudited)                    |            | (Unaudited)                   |   | (Unaudited)                                       |  
|Revenues                                                |  | $                              |           |                               | $ |                                                  |   | $ |            |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|Operating Expenses                                      |  |                                |            |                               |   |                                                   |   |   |             |  
|General and administrative                              |  |                                | 111,492    |                               |   | 123,928                                           |   |   | 1,017,939   |  
|Professional fees                                       |  |                                | 341,950    |                               |   | 203,650                                           |   |   | 1,563,735   |  
|Impairment expense                                      |  |                                | 630,863    |                               |   |                                                  |   |   | 7,553,488   |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|Total operating expenses                                |  |                                | 1,084,305  |                               |   | 327,578                                           |   |   | 10,135,162  |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|Operating Loss                                          |  |                                | (1,084,305 | )                             |   | (327,578                                          | ) |   | (10,135,162 | )
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|Other Income                                            |  |                                |            |                               |   |                                                   |   |   |             |  
|Interest income                                         |  |                                | 23,265     |                               |   | 99,154                                            |   |   | 1,364,178   |  
|Other income                                            |  |                                |           |                               |   |                                                  |   |   | 13,810      |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|Total other income                                      |  |                                | 23,265     |                               |   | 99,154                                            |   |   | 1,377,988   |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|Net Loss                                                |  | $                              | (1,061,040 | )                             | $ | (228,424                                          | ) | $ | (8,757,174  | )
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|Weighted Average Units Outstanding - Basic
 and Diluted |  |                                | 33,018     |                               |   | 33,018                                            |   |   | 22,624      |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  
|Net Loss Per Unit - Basic and Diluted                   |  | $                              | (32.14     | )                             | $ | (6.92                                             | ) | $ | (387.07     | )
|                                                        |  |                                |            |                               |   |                                                   |   |   |             |  

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)

Condensed Statements of Cash Flows

|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|----------------------------------------------------------------------------- |  | ---------------------------------- | ---------- | ---------------------------------- | - | ------------------------------------------------------- | - | - | ----------- | -
|                                                                              |  |                                    |            |                                    |   |                                                         |  
|                                                                              |  | Six months
 Ended
 April 30,
 2010 |            | Six months
 Ended
 April 30,
 2009 |   | From Inception
 (December 15,
 2005) to
 April 30, 2010 |  
|                                                                              |  |                                    |            |                                    |   |                                                         |  
|                                                                              |  | (Unaudited)                        |            | (Unaudited)                        |   | (Unaudited)                                             |  
|Cash Flows from Operating Activities                                          |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Net loss                                                                      |  | $                                  | (1,061,040 | )                                  | $ | (228,424                                                | ) | $ | (8,757,174  | )
|Adjustments to reconcile net loss to net
 cash used for operating activities: |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Depreciation                                                                  |  |                                    | 887        |                                    |   | 888                                                     |   |   | 5,154       |  
|Impairment of long-lived assets                                               |  |                                    | 630,863    |                                    |   |                                                        |   |   | 7,553,488   |  
|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                                                   |  |                                    | 1,491      |                                    |   | 19,983                                                  |   |   | (4,680      | )
|Prepaid expenses                                                              |  |                                    | (4,640     | )                                  |   | 4,646                                                   |   |   | (9,081      | )
|Accounts payable                                                              |  |                                    | 73,383     |                                    |   | (91,612                                                 | ) |   | 128,262     |  
|Accrued expenses                                                              |  |                                    | (11        | )                                  |   | (453                                                    | ) |   | 8,016       |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Net cash used for operating activities                                        |  |                                    | (359,067   | )                                  |   | (294,972                                                | ) |   | (1,031,015  | )
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Cash Flows from Investing Activities                                          |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Capital expenditures                                                          |  |                                    |           |                                    |   | (195,111                                                | ) |   | (10,783,559 | )
|Proceeds from disposal of property and
 equipment                             |  |                                    |           |                                    |   |                                                        |   |   | 1,725,000   |  
|Proceeds from disposal of assets held for
 sale                               |  |                                    | 5,561      |                                    |   |                                                        |   |   | 5,561       |  
|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                                          |  |                                    |           |                                    |   |                                                        |   |   | (1,950,000  | )
|Proceeds from maturing certificates of
 deposit                               |  |                                    |           |                                    |   |                                                        |   |   | 1,950,000   |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Net cash provided by (used for) investing
 activities                         |  |                                    | 5,561      |                                    |   | (195,111                                                | ) |   | (11,252,998 | )
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Cash Flows from Financing Activities                                          |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Loan fees                                                                     |  |                                    | (25,000    | )                                  |   |                                                        |   |   | (50,000     | )
|Members contributed capital                                                  |  |                                    |           |                                    |   |                                                        |   |   | 31,968,000  |  
|Payments for offering costs                                                   |  |                                    |           |                                    |   |                                                        |   |   | (186,428    | )
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Net cash (used for) provided by financing
 activities                         |  |                                    | (25,000    | )                                  |   |                                                        |   |   | 31,731,572  |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|                                                                             
|Net (Decrease) Increase in Cash and
 Equivalents                              |  |                                    | (378,506   | )                                  |   | (490,083                                                | ) |   | 19,447,559  |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Cash and Equivalents at Beginning of Period                                   |  |                                    | 19,826,065 |                                    |   | 20,803,450                                              |   |   |            |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Cash and Equivalents at End of Period                                         |  | $                                  | 19,447,559 |                                    | $ | 20,313,367                                              |   | $ | 19,447,559  |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Supplemental Cash Flow Information                                            |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Capitalized interest paid                                                     |  | $                                  |           |                                    | $ |                                                        |   | $ | 133,556     |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|                                                                              |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Supplemental Schedule of Noncash Investing
 and Financing Activities          |  |                                    |            |                                    |   |                                                         |   |   |             |  
|Construction-in-progress applied against
 design services deposit             |  | $                                  |           |                                    | $ |                                                        |   | $ | 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.

6

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Table of Contents

|                                                 
|-------------------------------------------------
|SOY ENERGY, LLC                                  
|(A Development Stage Company)                    
|                                                 
|Notes to Unaudited Condensed Financial Statements
|                                                 
|April 30, 2010                                   

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 footnotes should be read in conjunction with
the financial statements and footnotes thereto included in the Companys audited
financial statements for the year ended October 31, 2009, contained in the
Companys Form 10-K.

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 April 30, 2010 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,
(the Company) was originally 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 April 30, 2010, the Company is in the development
stage and is considering the purchase of or investment in an existing biodiesel
facility instead of developing a biodiesel facility between Marcus and
Cleghorn, Iowa. On July 29, 2009, the Company entered into an Asset Purchase
Agreement to acquire an existing biodiesel facility from Freedom Fuels, LLC
(Freedom Fuels), a debtor in possession in bankruptcy in Mason City, Iowa. Due
to a change in the bankruptcy, the Company entered into an Asset Purchase
Agreement on April 2, 2010 to acquire the Mason City, Iowa biodiesel facility
from OSM-REO FF, LLC.

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 assets held for sale valuation and any
assumptions used in the impairment analysis of assets held for sale. Actual
results may differ from previously estimated amounts and such differences may
be material to the financial statements.

Equipment

Property, plant and equipment are stated at cost. Equipment is
depreciated over estimated service lives of related assets, five years, using
the straight-line method of accounting. Property, plant and equipment
undergoing development that is not in service is shown on the balance sheet as
construction-in-progress and is not depreciated.

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 its long-lived assets, such as property and
equipment and purchased intangible assets subject to amortization, 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, an 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. During the quarter ended April 30, 2010, the Company
recorded an impairment charge totaling approximately $631,000 related to assets
held for sale.

7

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|                                                 
|-------------------------------------------------
|SOY ENERGY, LLC                                  
|(A Development Stage Company)                    
|                                                 
|Notes to Unaudited Condensed Financial Statements
|                                                 
|April 30, 2010                                   

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. As further described in
Note 5, on April 2, 2010, the Company entered into an Asset Purchase Agreement
to acquire substantially all of the assets of Freedom Fuels, LLC assigned to
OSM-REO FF, LLC pursuant to a bankruptcy court order. The Companys current
cash reserves are sufficient to fund operations without additional financing
through 2011 if it does not purchase the existing biodiesel facility.

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

3. FAIR VALUE MEASUREMENTS

Effective November 1, 2008, the Company adopted FASB ASC 820-10, as it
applies to our financial instruments, and FASB ASC 825-10. FASB ASC 820-10
defines fair value, outlines a framework for measuring fair value, and details
the required disclosures about fair value measurements. FASB ASC 825-10 permits
companies to irrevocably choose to measure certain financial instruments and
other items at fair value. FASB ASC 825-10 also establishes presentation and
disclosure requirements designed to facilitate comparisons between entities
that choose different measurement attributes for similar types of assets and
liabilities.

Under FASB ASC 820-10, 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. FASB ASC 820-10 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. FASB ASC 820-10
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 FASB ASC 825-10. No events occurred during the six
months ended April 30, 2010 that would require adjustment to the recognized
balances of assets or liabilities which are recorded at fair value on a
nonrecurring basis.

As of April 30, 2010, the Company does not have any assets or
liabilities measured at fair value on a recurring or nonrecurring basis that
would require disclosure under this guidance.

The assets held for sale, with a carrying amount of approximately
$3,557,000 at April 30, 2010, were written down to fair value of approximately
$2,921,000 after completing the long-lived asset valuation analysis. The fair
value of the assets held for sale were based on third party information and
knowledge of sales of similar assets, which is considered a Level 2 input in
the valuation hierarchy. The resulting impairment charge of approximately
$631,000 was included in earnings for the quarter ended April 30, 2010.

8

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|                                                 
|-------------------------------------------------
|SOY ENERGY, LLC                                  
|(A Development Stage Company)                    
|                                                 
|Notes to Unaudited Condensed Financial Statements
|                                                 
|April 30, 2010                                   

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.

Amounts included in assets held for sale are as follows:

|          |  |                 |           |                    |   |           | 
|--------- |  | --------------- | --------- | ------------------ | - | --------- | 
|          |  | April 30,
 2010 |           | October 31,
 2009* |  
|          |  |                 |           |                    |  
|Land      |  | $               | 250,262   |                    | $ | 250,262   | 
|Equipment |  |                 | 2,670,375 |                    |   | 3,306,799 | 
|          |  |                 |           |                    |   |           | 
|          |  |                 |           |                    |   |           | 
|          |  | $               | 2,920,637 |                    | $ | 3,557,061 | 
|          |  |                 |           |                    |   |           | 

* Derived from
audited financial statements

5. COMMITMENTS AND CONTINGENCIES

Consulting Contract

During October 2009, the Company entered into an agreement with an
unrelated advisory service to assist the Company to obtain approximately
$6,000,000 debt financing. The agreement provides for the Company to pay a
non-refundable advisory fee of $10,000 and a $5,000 monthly fee through the
earlier of March 31, 2010, the closing of the loan, or written notice of
termination by the Company. Additionally, the Company agreed to pay the
advisory service at time of closing, a debt placement fee of 1% of the total
amount of committed debt provided advisory fees will be credited against the
debt placement fee.

On April 1, 2010, the consulting agreement was extended to renew
monthly until terminated by either party giving written notice of such
termination. The Company is continuing to pay the $5,000 monthly fee until the
agreement is terminated. As of April 30, 2010, the Company has paid a total of
$25,000 in advisory fees towards obtaining the debt financing.

Asset Purchase Agreements

On July 29, 2009, the Company entered into an Asset Purchase Agreement
with Freedom Fuels in Mason City, Iowa pursuant to which the Company would (a)
acquire substantially all of Freedom Fuels assets and thereafter operate the
biodiesel facility; (b) assign to Freedom Fuels all of the Companys right,
title and interest in the debtor in possession loans; and, (c) assign to
Freedom Fuels all of the Companys right, title and interest in the dividend
cash flow note, in exchange for $9,000,000 in cash (the Transaction). The
Company would not assume or be liable for any liabilities of Freedom Fuels.

The closing of the Transaction contemplated by the Asset Purchase
Agreement was conditioned upon the receipt of certain regulatory approvals.
Freedom Fuels subsequently filed a voluntary bankruptcy petition under Chapter
11 of Title 11 of the United States Code; accordingly, closing of the
Transaction was conditioned upon approval and confirmation from the Bankruptcy
Court of Freedom Fuels plan of reorganization, which included the Transaction.
The Asset Purchase Agreement also required that the Company obtain certain
additional financing which the Company is currently seeking.

The Company and Freedom Fuels anticipated the Transaction would be
complete by December 31, 2009; however, the closing was delayed as result of
Freedom Fuels transferring its assets to its bank, Outsource Services
Management, LLC and the bankruptcy proceedings transferring to Chapter 7.
Outsource Services Management, LLC subsequently transferred the assets to
OSM-REO FF, LLC.

9

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|                                                 
|-------------------------------------------------
|SOY ENERGY, LLC                                  
|(A Development Stage Company)                    
|                                                 
|Notes to Unaudited Condensed Financial Statements
|                                                 
|April 30, 2010                                   

On April 2, 2010, the Company entered into an Asset Purchase Agreement
with OSM-REO FF, LLC, a Minnesota limited liability company, pursuant to which
the Company will acquire substantially all of Freedom Fuels assets assigned to
OSM-REO FF, LLC and thereafter operate the biodiesel facility in exchange for a
total of $10,000,000 paid in cash and long-term debt. However, the purchase
price may be reduced up to $250,000 for expenses incurred by the Company to make
certain specified repairs. The asset will be transferred to the Company
as-is. The Company will not assume or be liable for any liabilities incurred
prior to the closing date of the Asset Purchase Agreement; however, the Company
may assume certain Freedom Fuels contracts or permits that may have
obligations that continue through and after the closing of the Asset Purchase
Agreement.

The Companys April 2, 2010 Asset Purchase Agreement with OSM-REO FF,
LLC provides for OSM-REO FF, LLC to loan the Company a total $6,077,595,
consisting of a $77,595 loan (Initial Loan), to retire certain OSM-REO FF,
LLC claims against New Equity, LLC, and a $6,000,000 loan (Acquisition Loan)
to acquire the Mason City, Iowa biodiesel facility.

The Initial Loan, a non-interest bearing note, is to mature during
2021.

The Acquisition Loan is to bear 5% interest to 2016 then the 5-year
LIBOR/swap rate plus 3.5%, but no less than 5%. The loan provides for interest
only payments for the first 12 months followed by 120 monthly principal and
interest payments sufficient to fully amortize the principal balance at
maturity in 2021. As part of the Acquisition Loan agreement, the loan
agreements will be secured by certain business assets and will be subject to
various financial and non-financial covenants that limit distributions, capital
expenditures, and debt.

The closing of the transaction contemplated by the Asset Purchase
Agreement is conditioned upon approval by regulatory authorities and by the
unitholders of the Company.

Settlement and Termination Agreement

On July 29, 2009, the Company entered into a Unit Purchase Agreement
(the UPA) with New Equity, LLC (New Equity) pursuant to which the Company
would issue 8,254 membership units of the Company to New Equity, representing a
20% ownership interest in the Company after the issuance. As consideration, New
Equity was to assign to the Company all of its interest in the debtor in
possession loan and provide a promissory note for $2,000,000 (Dividend Cash
Flow Note). The Dividend Cash Flow Note would have required New Equity to
repay the note with distributions from the Company. The repayment schedule
required that after the first $1,000,000 of distributions, 50% of the
distributions New Equity received thereafter would be remitted back to the
Company until the note was repaid. The dividend cash flow note did not bear
interest.

On March 31, 2010, the Company entered into an agreement with New
Equity, Outsource Services Management, LLC and OSM-REO FF, LLC to release
certain direct claims and to terminate the Unit Purchase Agreement. The
Agreement also provides for Soy Energy to pay New Equity up to $375,000,
reimbursement of certain costs and expenses incurred by New Equity related to
the Freedom Fuels biodiesel production facility and for certain other expenses
New Equity incurred since its formation. The Agreement is contingent upon
regulatory approval and upon approval of the Companys unitholders.

Construction Contract

On April 6, 2010, the Company entered into a Phase 1 Engineering
Services Agreement with an unrelated party totaling $125,000 to determine the
required and necessary modifications to the Mason City, Iowa biodiesel
production facility to allow for multiple feedstock capabilities.

10

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|                                                 
|-------------------------------------------------
|SOY ENERGY, LLC                                  
|(A Development Stage Company)                    
|                                                 
|Notes to Unaudited Condensed Financial Statements
|                                                 
|April 30, 2010                                   

The Company paid $62,500 as of April 30, 2010 and will pay an
additional $62,500 upon completion of the work. The total fee will be credited
against the maximum guaranteed price of the project.

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

We prepared
the following discussion and analysis to help you better understand our
financial condition, changes in our financial condition, and results of
operations for the three and six month periods ended April 30, 2010. This
discussion should be read in conjunction with the financial statements and
notes and the information contained in our annual report on Form 10-K for the
fiscal year ended October 31, 2009.

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.

| |   |                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our ability to close on financing from OSM-REO FF, LLC, a Minnesota
 limited liability company (OSM) to install corn oil processing equipment on
 the biodiesel plant we anticipate purchasing in Mason City (the Mason City
 biodiesel production facility);                                                                       
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Our ability to close on our agreement with OSM to purchase the Mason
 City biodiesel production facility;                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Our unitholders approval or disapproval of our proposed transaction
 with OSM;                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Overcapacity within the biodiesel industry;                                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Our ability to effectively operate the Mason City biodiesel
 production facility and manage its business;                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Changes in our business strategy, capital improvements or development
 plans;                                                                                                                                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | 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 have equipment installed on the Mason
 City biodiesel production facility to make the plant a multi-feedstock
 capable facility;                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Actual biodiesel and glycerin production varying from expectations;                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | 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 Mason City biodiesel production facility,
 including the blenders tax credit;
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Changes in the weather or 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 plant production capacity or technical difficulties in
 operating the Mason City biodiesel production facility;                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | 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;                                                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Outcome of recently instigated litigation regarding possible patent
 infringement on certain types of corn oil production technology, which may
 cause ethanol producers that are currently producing corn oil to cease
 production and limit our ability to obtain this type of feedstock;                                         
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | General economic conditions;                                                                                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | Ability to sell our assets held for sale at their carrying value
 minus selling costs;                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                     
| |  | 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.

12

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Overview

We are a
development stage Iowa limited liability company with no prior operating
history. We were organized as an Iowa limited liability company by filing articles
of organization with the Iowa Secretary of State on December 15, 2005. We were
in the process of developing a 15 million gallon per year biodiesel plant near
Marcus, Iowa in Cherokee County. We originally planned to construct a 30
million gallon per year biodiesel plant, but due to changes in our business
plan, our members voted to pursue construction of a smaller biodiesel plant.

When the
economy went into a recession, management determined in October 2008 that
obtaining the financing necessary to build even this smaller biodiesel plant
was not likely feasible. Therefore, we then began exploring possibilities to
use our assets to merge with or invest in a company that has already completed
construction of a biodiesel plant, rather than constructing our own plant.

On July 29,
2009, we entered into an Asset Purchase Agreement (APA) with Freedom Fuels,
LLC, an Iowa limited liability company which was in Chapter 11 bankruptcy and
owned a biodiesel plant in Mason City, Iowa (Freedom Fuels) pursuant to which
we would acquire substantially all of Freedom Fuels assets in exchange for
$9,000,000 in cash, an agreement assigning to Freedom Fuels all of our right,
title and interest in the debtor in possession loans and an agreement assigning
to Freedom Fuels all of the our right, title and interest in the dividend cash
flow note of $2 million issued by New Equity, LLC to us. On the same day, we
entered into a Unit Purchase Agreement with New Equity, LLC, an Iowa limited
liability company (New Equity) pursuant to which we would issue 8,254 of our
membership units to New Equity, representing a 20% ownership interest in Soy
Energy, LLC. New Equity, LLC is comprised of 19 members of Freedom Fuels. New
Equity was designated as the Freedom Fuels Debtor In Possession Lender in the
plan of reorganization of Freedom Fuels filed with the Bankruptcy Court. As
consideration for the units that were to be issued under the Unit Purchase
Agreement, New Equity was to assign to us all of its interest in the Debtor In
Possession Loan and provide us with a promissory note for $2,000,000.

However,
prior to closing on either of these agreements, it became clear that the
financing needed to close on this transaction would not be able to be obtained.
Freedom Fuels then transferred all of its assets to its bank and on February 2,
2010 the proceedings were converted from a Chapter 11 voluntary bankruptcy to a
Chapter 7 involuntary bankruptcy.

On April 2,
2010, we entered into an Asset Purchase Agreement with OSM. OSM was previously
assigned certain assets related to the biodiesel production facility of Freedom
Fuels, LLC, an Iowa limited liability company (Freedom Fuels) in connection with the bankruptcy prodeedings. Under the
Asset Purchase Agreement, Soy will pay OSM $10,000,000 to acquire the biodiesel
production facility and related assets (the Transaction). The assets are
being transferred to Soy as-is. However, the purchase price may be reduced up
to $250,000 for expenses incurred by Soy to make certain specified repairs. The
Asset Purchase Agreement provides that we will not assume liabilities of
Freedom Fuels or OSM, with the exception of certain taxes, certain liabilities
under contracts we assume, and obligations under existing confidentiality
agreements.

We and OSM
have made customary representations, warranties and covenants in the Asset
Purchase Agreement. Among other conditions, the closing of the Transaction is
conditioned upon a $6,000,000 loan to us from OSM to use to buy the assets. The
terms of the financing are described below. In addition, the Transaction is
subject to approval by our unitholders before the closing on the Transaction.

We and OSM
anticipate that the Transaction will close no later than 145 days after the
date of the Asset Purchase Agreement or three business days after we obtain the
approval of our unitholders. Either party may elect to terminate the Asset
Purchase Agreement after the 145-day deadline. The Asset Purchase Agreement may
also be terminated for several other reasons, including failure by Congress to
extend the blenders tax credit or our failure to obtain unitholder approval.

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Also on
March 31, 2010, we entered into a Settlement and Termination Agreement with OSM
and New Equity. The Settlement and Termination Agreement provides for the
termination of the Unit Purchase Agreement dated July 29, 2009 between New
Equity and us. In addition, the parties each agreed to release one or both of
the other parties from certain claims arising from the Unit Purchase Agreement,
the acquisition of the Mason City biodiesel production facility, and the
Freedom Fuels Bankruptcy. In exchange for the termination of the Unit Purchase
Agreement and the release, we agreed to pay New Equity an amount equal to
certain expenses that New Equity has incurred, up to an aggregate amount of
$375,000. The termination of the Unit Purchase Agreement, releases and payment
are conditioned on, and take effect upon, the closing of our acquisition of the
Mason City biodiesel production facility.

Construction
of the proposed 15 million gallon per year plant in Marcus, Iowa was
approximately 10% complete when management determined completion of the
construction was no longer feasible. Although we believe that we will be able
to sell our long-lived assets at their fair value, we may not be able to sell
them at a profit. If we do not sell these assets at the current carrying value
or at all, it may result in a material loss to the financial statements.
Because we do not anticipate constructing the Marcus, Iowa plant, all funds we
expended in our construction and plant development efforts were deemed a loss.
From our inception to April 30, 2010, we have incurred accumulated losses of
approximately $8,757,000, including impairment charges of approximately
$7,553,000.

To date, we
have not generated any revenues and we do not anticipate generating any
revenues unless we successfully purchase an existing biodiesel facility. 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 (i) closing on the APA and the Loan Agreements we
entered into with OSM on April 2, 2010 (the Loan Agreement), which provides
the terms on which OSM will provide us with certain debt financing to fund our
acquisition of the Freedom Fuels facility; (ii) installing equipment on the
Mason City biodiesel production facility to process corn oil; and (iii)
beginning our operations of the Mason City biodiesel production facility. We do
not anticipate raising additional equity capital in the next 12 months.
However, in the event our equity reserves are not adequate to recommence and
continue operations of the Mason City biodiesel production facility, we may be
forced to do so. We expect our equity reserves will be adequate for the
purchase of the Mason City biodiesel production facility, along with the debt
financing we anticipate receiving from OSM. We also plan to use approximately
$8,000,000 of our equity reserves to install the front end equipment on the
Mason City biodiesel production facility so that it will be multi-feedstock
capable. Should we be unsuccessful in completing the purchase of the Mason City
biodiesel production facility or in our operation of the plant, our project may
fail and we may be dissolved. If we are dissolved, our assets will be
distributed pursuant to our operating agreement.

On April 6,
2010, we entered into a Phase 1 Engineering Services Agreement (Phase 1
Agreement) with Ball Industrial Services, LLC (BIS). The Phase 1 Agreement
is related to the required and necessary modifications of the biodiesel
production facility to allow the biodiesel production facility to use 100% corn
stillage oil as a feedstock for the conversion to biodiesel (the Project).
The work to be provided under the Phase 1 Agreement is the necessary
preliminary engineering services for BIS to determine:

|  |                                                                       
|- | ----------------------------------------------------------------------
| | the
 guaranteed maximum price for the Project;                        
|  |                                                                       
| | the initial
 Project schedule; and                                    
|  |                                                                       
| | the cash
 flow requirements for the Project (collectively the Work).

In
consideration of the Work, we paid BIS $62,500 upon the execution of the Phase
1 Agreement and will pay an additional $62,500 upon the completion of the Work.
This total fee of $125,000 shall be included and credited against the
guaranteed maximum price of the Project. We may terminate the Phase 1 Agreement
for any reason upon fifteen (15) days written notice to BIS. If we terminate
without cause, BIS shall be entitled to receive payment for work completed
through the date of termination. Either party may terminate the Phase 1
Agreement if the other party breaches the Phase 1 Agreement, and such breach
has not been cured after fifteen (15) days written notice.

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We
anticipate the success of our operation of the Mason City biodiesel production
facility will be dependent upon several factors. First, we will be dependent
upon BIS to successfully install the front-end equipment on the Mason City
biodiesel production facility, so that we can effectively utilize a variety of
feedstocks, and specifically corn oil. We may have difficulties getting the
additional equipment to operate smoothly with the current plant technology.
Then we will need to be able to find an adequate and cost-effective supply of
corn oil to use to produce our biodiesel. We anticipate that we will be able to
obtain corn oil largely from local ethanol plants. However, this will require
us to enter into favorable agreements with such ethanol plants, as we do not
currently have any such agreements for corn oil procurement. Additionally,
ethanol plants that are presently producing corn oil as a by-product, may cease
such production in the future as a result of patent infringement litigation
related to the corn oil technology many ethanol plants are currently using. We
may decide to enter into joint ventures with ethanol plants to encourage them
to install corn oil equipment on their plants, but this means we will also
assume some of the risk. Finally, we will be dependent upon our marketer to
sell our biodiesel at profitable prices. We are currently in negotiations with
a marketing company and anticipate we will have an agreement in place for the marketing
of our biodiesel before we are ready to begin operating the Mason City
biodiesel production facility.

Sources
and Uses of Funds

We
anticipate that any remaining funds from our original intrastate offering will
be used to purchase the Mason City biodiesel production facility from OSM,
install additional feedstock processing equipment on the Mason City biodiesel
production facility, and the start-up of operations. We also anticipate
receiving approximately $6,000,000 in debt financing from OSM pursuant to the
Loan Agreement for a portion of the purchase price of the Mason City biodiesel
production facility in addition to the $77,595 in initial loan funds we have received from OSM.

ESTIMATED USE OF PROCEEDS

|                                                                                               |  |        |            |    
|---------------------------------------------------------------------------------------------- |  | ------ | ---------- | ---
|Use of Proceeds                                                                                |  | Amount |           
|                                                                                               |  |        |           
|Equity Proceeds Raised                                                                         |  | $      | 31,782,000 | (1)
|Estimated Proceeds Used in Development and
 Construction of biodiesel facility in Marcus, Iowa |  | $      | 12,410,000 | (2)
|Proceeds required to purchase the Mason
 City plant and complete related improvements          |  | $      | 18,000,000 | (3)
|Interest income earned on cash and
 equivalents                                                |  | $      | 1,364,000  |    
|                                                                                               |  |        |            |    
|Estimated proceeds remaining for start-up
 of Mason City plant and related expenditures        |  | $      | 2,736,000  | (4)
|                                                                                               |  |        |            |    

(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 offering 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 as of April 30, 2010 on construction, building and facilities, purchase of
machinery and equipment and purchases of real estate related to our attempt to
construct a biodiesel facility in Marcus, Iowa plus ongoing administrative
costs we have associated with operating our business until an acquisition,
investment or merger with another company is closed.

(3)
This amount assumes that we close on the asset purchase agreement with OSM and
we obtain the numerous approvals required. This
figure does not included the $6,000,000 we will obtain from OSM under the Loan
Agreement, assuming we close on the Loan Agreement, the $77,595 initial loan
from OSM, or the $375,000 paid to New Equity under the Settlement and Termination
Agreement.

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(4)
This number is our current cash and equivalents, less our accounts payable,
proceeds needed to purchase the Mason City plant and to install feedstock
processing equipment. If we sell some of the assets we have held for sale, then
this will increase the proceeds remaining to invest in the Mason City biodiesel
production facility. Additionally, this
figure does not include the $6,000,000 in debt financing that we intend to
obtain from OSM pursuant to the Loan Agreement, assuming we close on the Loan
Agreement, the $77,595 initial loan from OSM, or the $375,000 paid to New
Equity under the Settlement and Termination Agreement.

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 needed to complete construction
of the plant. On April 10, 2008 our members approved reducing the initial
production capacity of the biodiesel plant to 15 million gallons per year from
30 million gallons per year. Upon completing 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
due to current economic conditions and our lack of debt financing. We may be
unable to sell the site and the construction completed at a profit, or at all.
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. Additionally, as we have not
sold the assets being held, we recorded an additional impairment charge of
approximately $631,000 during the three months ended April 30, 2010.

Trends and Uncertainties Impacting the Biodiesel
Industry and Our Future Operations

We will be
subject to industry-wide factors that affect our anticipated operation of the
Mason City biodiesel production facility and financial performance. These
factors include, but are not limited to, the available supply and cost of
feedstock from which biodiesel and glycerin will be processed; dependence on a
biodiesel marketer and glycerin marketer to market and distribute our products,
in the event we utilize outside marketers; the competitive nature of the
biodiesel industry; possible legislation at the federal, state and/or local
level; changes in federal tax incentives; and the cost of complying with
extensive environmental laws that regulate the biodiesel industry.

We
anticipate our revenues will consist of sales of biodiesel and glycerin from
the Mason City production facility. We expect biodiesel sales to constitute the
bulk of our 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, many biodiesel production facilities have
ceased production due to lack of demand for biodiesel, and the industry will
need to continue to grow demand to offset the increased supply brought to the
market place if and when these facilities re-start production in the future.

We expect
to benefit from federal and state biodiesel supports and tax incentives,
however, these benefits may be subject to the applicability of such supports
and tax incentives to our operations of the Mason City biodiesel production
facaility. Biodiesel has generally been more expensive to produce than
petroleum-based diesel and, as a result, the biodiesel industry depends on such
incentives to be competitive. Changes to these supports or incentives could
significantly impact demand for biodiesel. The most significant of these are
the blenders tax credit and the RFS, as amended by the Energy Independence and
Security Act of 2007 (the EISA).

The
American Jobs Creation Act of 2004 originally created the biodiesel blenders
excise tax credit under the Volumetric Ethanol Excise Tax Credit (VEETC).
Known as the blenders tax credit, it provides a tax credit of $1.00 per gallon
for biodiesel. The blenders credit could be claimed in both taxable and
nontaxable markets, including exempt fleet fuel programs and off-road diesel
markets. The desired effect of the blenders tax credit was 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. The blenders tax credit also streamlined the tax refund system for
below-the-rack blenders allowed 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. The blenders tax credit 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) and as of the date of this report has not
been extended further. Without the blenders tax credit, many biodiesel
production facilities have been forced to cease operations, and if the blenders
tax credit is not reinstated prior to when we attempt to begin production at
the Mason City biodiesel production facility, we may face similar struggles.

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The amended
RFS, known as RFS2, required the use of 9 billion gallons of renewable fuel in
2008, increasing to 36 billion gallons of renewable fuel by 2022. The RFS
further required at least 500 million gallons of biodiesel and biomass-based
diesel fuel be blended into the national diesel pool in 2009, increasing to 1
billion gallons by 2012. However, in November 2008, the EPA announced that the
RFS program in 2009 would continue to be applicable to producers and importers
of gasoline only. This meant that the 500 million gallons of biomass-based
diesel required by RFS2 did 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. On February 3, 2010 the
EPA issued final rules under RFS2. The final rules addressed this issue by
combining the 2010 biomass-based diesel requirement of 650 million gallons with
the 2009 biomass-based diesel requirement of 500 million gallons to require
that obligated parties meet a combined 2009/2010 requirement of 1.15 billion
gallons by the end of the 2010 compliance year.

The RFS2
requires that biodiesel reduce greenhouse gas emissions by 50% when compared to
conventional diesel in order to count towards the RFS2 mandate. The EPA
preliminarily found soy-based biodiesel to reduce greenhouse gas emissions by
only 22%. However, biodiesel produced from animal fats was found to meet this
greenhouse gas emissions reduction requirement. Lastly, when the EPA issued its
final determinations under the RFS2, it found that soy oil complies with the
50% greenhouse gas emission reduction requirements.

Thus,
management anticipates that under the EPAs final RFS2 regulations, there may
be increased demand for biodiesel. There can be no assurance, however, that
demand for biodiesel will be increased by the RFS2, and any increase in demand
may be offset by the loss of the blenders tax credit. In addition, it is
already estimated that national biodiesel production capacity far exceeds the
2012 biodiesel and biomass-based diesel use RFS2 mandate. 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 the RFS2.

Biodiesel
production grew as additional plants become operational, until 2009 when
production reduced. In 2006 biodiesel production was approximately 250 million
gallons. The National Biodiesel Board estimates that in 2008, biodiesel
production reached 700 million gallons. Estimates for 2009 biodiesel production
however, were approximately 450 million gallons. This reduction was likely
largely related to the recession and the related credit crisis. In June 22,
2009, the most recently reported data, the National Biodiesel Board estimated
there were 173 active plants with an annual production capacity of 2.69 billion
gallons annually, with another 29 plants and 1 expansion in construction. We
believe this increase in biodiesel supply, reduction in demand, and the loss of
the blenders credit 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 generate revenue and
maintain positive cash flows should we reach the point where we begin operating
the Mason City biodiesel production facility.

Quarterly Financial Results

At
April 30, 2010, we had total assets of approximately $22,411,000 consisting
primarily of cash and equivalents and assets held for sale. At April 30, 2010,
we had current liabilities of approximately $136,000 consisting of our accounts
payable and other accrued expenses. Total members equity at April 30, 2010,
was approximately $22,274,000. Since our inception, we have generated no
revenue from operations. For the three and six months ended April 30, 2010, we
had a net loss of approximately $895,000 and $1,061,000, respectively.

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Based upon
the determination that building a biodiesel production facility would not
likely be feasible, we now anticipate purchasing the Mason City biodiesel
production facility from OSM for approximately $10,000,000 pursuant to the APA,
with $6,000,000 of such purchase price to be financed pursuant to the Loan
Agreement, and installing feedstock processing equipment on the plant for
approximately $8,000,000. If we cannot complete this transaction as
anticipated, we may be forced to dissolve our company, in which case, the
assets of the company will be distributed according to our operating agreement,
and may result in a loss of your investment.

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. In July 2008, 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 or general
offering sales prices per unit.

Debt Financing

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
now plan to purchase an existing biodiesel plant in Mason City, Iowa from OSM.
We plan to install additional feedstock equipment on this plant. We anticipate
we will receive approximately $6,000,000 in debt financing from OSM pursuant to
the Loan Agreement and to be used towards the purchase price of the Mason City
biodiesel production facility.

On April 2,
2010, we entered into a Loan Agreement with OSM. Subject to the terms of the
Loan Agreement, OSM agreed to lend us $6,000,000 to be used to acquire the
Mason City biodiesel production facility. The initial interest rate is 5%. In
2016, the interest rate will adjust to the 5-year LIBOR/swap rate plus 3.5%,
but will not be less than 5%. During the first year of the loan, we will be
required to only pay interest on outstanding amounts. Beginning after the first
year of the loan, we will make principal and interest payments amortized over a
ten-year period, with maturity of the note in 2021.

The Loan
Agreement requires us to adhere to various covenants which restrict our
operating flexibility. The Loan Agreement restricts our ability to make
distributions to our members, to further pledge our assets for other financing
that we might require, and to make payments on subordinated debt we acquire. In
addition, the Loan Agreement requires us to maintain certain financial ratios
and to obtain OSMs permission before taking certain actions affecting our
business and material contracts.

At closing,
we will execute a mortgage in favor of OSM creating a first lien on all of the
assets we acquire under the Asset Purchase Agreement and the proceeds from
those assets. As a result, we must obtain OSMs permission to sell these
assets, which could limit our operating flexibility.

The Loan
Agreement provides that certain actions will constitute defaults, which would
allow OSM to terminate its commitment to loan the funds, or if already
advanced, to demand immediate repayment of the entire loan amount and foreclose
its security interest in our property. Defaults include the following events:

|  |                                                                                            
|- | -------------------------------------------------------------------------------------------
| | our failure to make the required principal and interest payments;                          
|  |                                                                                            
| | if any representation or warranty made by us proves to be materially
 misleading or untrue;
|  |                                                                                            
| | our failure to comply with the terms of the Loan Agreement;                                
|  |                                                                                            
| | the destruction of the biodiesel plant;                                                    

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|  |                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------
| | cessation of making certain improvements to the biodiesel plant
 required by OSM;                                
|  |                                                                                                                  
| | our failure to comply with certain requirements of governmental
 bodies;                                         
|  |                                                                                                                  
| | if we have unsatisfied judgments against us that exceed $150,000 for
 30 days or more;                           
|  |                                                                                                                  
| | if we file for bankruptcy or cease to exist as a legal entity;                                                   
|  |                                                                                                                  
| | if we are unable to pay our debts when due;                                                                      
|  |                                                                                                                  
| | if we are in default under a material contract or lose a permit or
 material contract necessary for our business;
|  |                                                                                                                  
| | if we are in default under any agreement with OSM; or                                                            
|  |                                                                                                                  
| | if we are in default with respect to any other indebtedness.                                                     

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 if we complete the purchase
of the Mason City biodiesel production facility. Some combinations of programs
are mutually exclusive. Funds that we have expended in applying for grants,
loans and forgivable loan programs related to our construction of a facility in
Marcus, Iowa, will likely be a loss, unless we can transfer those benefits as a
result of our anticipated purchase of the Mason City biodiesel production
facility. 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. These estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. The assets held for sale valuation and any assumptions used in the
impairment analysis of assets held for sale included in significant estimates
is based on the ability to sell or utilize these assets.

Off-Balance Sheet Arrangements

We
do not have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about
Market Risk

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

Disclosure Controls and Procedures

Our
management, including our Chief Executive Officer (the principal executive
officer) Charles Sand, along with our Chief Financial Officer (the principal
financial officer) Dallas Thompson, 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 April
30, 2010. Based upon this review and evaluation, these officers have concluded
that our disclosure controls and procedures were effective.

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 during the period ended April 30, 2010 and
there has been no change that has materially affected or is reasonably likely
to materially affect our internal control over financial reporting.

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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

We did not
sell any membership units during the three months ended April 30, 2010. None of
our membership units were purchased by or on behalf of the Company or any
affiliated purchaser (as defined in Rule 10b-18(a)(3) of the Exchange Act) of
the Company during the three months ended April 30, 2010.

|                                                     |  |   |             |     
|---------------------------------------------------- |  | - | ----------- | ----
|Net Proceeds                                         |  | $ | 31,782,000  | (1) 
|Capital Expenditures and Construction
 Related Costs |  |   | (11,200,000 | )   
|Project Development Costs                            |  |   | (2,582,000  | )(2)
|                                                     |  |   |             |     
|Balance                                              |  | $ | 18,000,000  |     

(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 as of April 30, 2010 on project
development costs and does not include the approximately $1,364,000 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 4. [Reserved]

Item 5. Other Information

None.

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Item 6. Exhibits

| |             |                                                           |                                                | 
| | ----------- | --------------------------------------------------------- | ---------------------------------------------- | 
| | (a)         | The
 following exhibits are filed as part of this report.
| |             |                                                          
| | Exhibit No. |                                                           | Exhibit                                       
| |             |                                                           |                                               
| | 10.1        |                                                           | Asset
 Purchase Agreement                     
| |             |                                                           |                                               
| | 10.2        |                                                           | Loan
 Agreement                               
| |             |                                                           |                                               
| | 10.3        |                                                           | Phase I
 Engineering Agreement                
| |             |                                                           |                                               
| | 10.4        |                                                           | Termination
 and Settlement Agreement         
| |             |                                                           |                                               
| | 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.    

SIGNATURES

Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

|      |                |  |                                       
|----- | -------------- |  | --------------------------------------
|      |                |  | SOY ENERGY, LLC                       
|      |                |  |                                       
|Date  | June 14,
 2010 |  | /s/ Charles
 Sand                     
|      |                |  |                                       
|      |                |  | Charles Sand                          
|      |                |  | President
 and Chief Executive Officer
|      |                |  | (Principal
 Executive Officer)        
|      |                |  |                                       
|Date: | June 14,
 2010 |  | /s/ Dallas
 Thompson                  
|      |                |  |                                       
|      |                |  | Dallas
 Thompson                      
|      |                |  | Treasurer
 and Chief Financial Officer

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