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 July 31, 2009                      
|                                                                  
|OR                                                                
|                                                                   |                                                                                    
|o                                                                  | Transition report under Section 13
 or 15(d) of the Exchange Act.                  
|                                                                   |                                                                                    
|For the transition period from _______ to _________               
|                                                                   |                                                                                    
|Commission file number 000-53112                                  
|                                                                   |                                                                                    
|                                                                  
|                                                                  
|SOY ENERGY, LLC                                                   
|                                                                   |                                                                                    
|(Exact
 name of small business issuer as specified in its charter)

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

|                                                     
|-----------------------------------------------------
|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.

x Yes
          o No

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).

o Yes
          x No

State
the number of shares outstanding for each of the issuers classes of common
equity as of the latest practicable date: As of September 14, 2009, 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 |  | 11
|Item 3.    | Quantitative and Qualitative Disclosures about Market Risk                            |  | 17
|Item 4T.   | Controls and Procedures                                                               |  | 17
|PART II.   | OTHER INFORMATION                                                                     |  | 18
|Item 1.    | Legal Proceedings                                                                     |  | 18
|Item 1A.   | Risk Factors                                                                          |  | 18
|Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 18
|Item 3.    | Defaults Upon Senior Securities                                                       |  | 18
|Item 4.    | Submission of Matters to a Vote of Security Holders                                   |  | 19
|Item 5.    | Other Information                                                                     |  | 19
|Item 6.    | Exhibits                                                                              |  | 19
|SIGNATURES |                                                                                       |  | 19

2

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Table of Contents

|                               |                       
|------------------------------ | ----------------------
|PART 1.                        | FINANCIAL
 INFORMATION
|                               |                       
|Item 1.
 Financial Statements 
|                               |                       
|SOY ENERGY, LLC               
|(A
 Development Stage Company)
|                               |                       
|Condensed
 Balance Sheets     

|                                               |  |                 |            |                    |   |            |  
|---------------------------------------------- |  | --------------- | ---------- | ------------------ | - | ---------- | -
|                                               |  |                 |            |                    |  
|ASSETS                                         |  | July
 31,
 2009 |            | October
 31,
 2008 |  
|                                               |  |                 |            |                    |   |           
|                                               |  | (Unaudited)     |            |                    |   |           
|Current
 Assets                                |  |                 |            |                    |   |            |  
|Cash and equivalents                           |  | $               | 20,114,626 |                    | $ | 20,803,450 |  
|Accrued interest receivable                    |  |                 | 8,155      |                    |   | 30,575     |  
|Prepaid expenses                               |  |                 | 7,079      |                    |   | 38,545     |  
|                                               |  |                 |            |                    |   |            |  
|Total current assets                           |  |                 | 20,129,860 |                    |   | 20,872,570 |  
|                                               |  |                 |            |                    |   |            |  
|Equipment                                      |  |                 |            |                    |   |            |  
|Equipment                                      |  |                 | 8,873      |                    |   | 8,873      |  
|Accumulated depreciation                       |  |                 | (3,823     | )                  |   | (2,492     | )
|                                               |  |                 |            |                    |   |            |  
|Net equipment                                  |  |                 | 5,050      |                    |   | 6,381      |  
|                                               |  |                 |            |                    |   |            |  
|Assets
 held for sale                          |  |                 | 3,557,061  |                    |   | 3,557,061  |  
|                                               |  |                 |            |                    |   |            |  
|                                               |  |                 |            |                    |   |            |  
|Total Assets                                   |  | $               | 23,691,971 |                    | $ | 24,436,012 |  
|                                               |  |                 |            |                    |   |            |  
|                                               |  |                 |            |                    |   |            |  
|LIABILITIES
 AND MEMBERS EQUITY               |  |                 |            |                    |   |            |  
|                                               |  |                 |            |                    |   |            |  
|Current
 Liabilities                           |  |                 |            |                    |   |            |  
|Accounts payable                               |  | $               | 158,784    |                    | $ | 442,825    |  
|Accrued expenses                               |  |                 | 11,069     |                    |   | 7,909      |  
|                                               |  |                 |            |                    |   |            |  
|Total current liabilities                      |  |                 | 169,853    |                    |   | 450,734    |  
|                                               |  |                 |            |                    |   |            |  
|Members
 Equity                               |  |                 |            |                    |   |            |  
|Member contributions, 33,018 units
outstanding |  |                 | 31,031,572 |                    |   | 31,031,572 |  
|Deficit accumulated during development
stage   |  |                 | (7,509,454 | )                  |   | (7,046,294 | )
|                                               |  |                 |            |                    |   |            |  
|Total members equity                          |  |                 | 23,522,118 |                    |   | 23,985,278 |  
|                                               |  |                 |            |                    |   |            |  
|                                               |  |                 |            |                    |   |            |  
|Total Liabilities and Members
Equity          |  | $               | 23,691,971 |                    | $ | 24,436,012 |  
|                                               |  |                 |            |                    |   |            |  

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

3

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Table of Contents

SOY ENERGY, LLC
(A Development Stage Company)

Condensed Statements of Operations

|                                                        |  |                                      |          |                                      |   |            |  
|------------------------------------------------------- |  | ------------------------------------ | -------- | ------------------------------------ | - | ---------- | -
|                                                        |  |                                      |          |                                      |  
|                                                        |  | Three
 Months
 Ended
 July 31,
 2009 |          | Three
 Months
 Ended
 July 31,
 2008 |  
|                                                        |  |                                      |          |                                      |  
|                                                        |  | (Unaudited)                          |          | (Unaudited)                          |  
|                                                        |  |                                      |          |                                      |   |            |  
|Revenues                                                |  | $                                    |         |                                      | $ |           |  
|                                                        |  |                                      |          |                                      |   |            |  
|Operating
 Expenses                                     |  |                                      |          |                                      |   |            |  
|General and administrative                              |  |                                      | 59,461   |                                      |   | 90,644     |  
|Professional fees                                       |  |                                      | 200,724  |                                      |   | 268,013    |  
|Impairment expense                                      |  |                                      |         |                                      |   | 1,920,000  |  
|                                                        |  |                                      |          |                                      |   |            |  
|Total operating expenses                                |  |                                      | 260,185  |                                      |   | 2,278,657  |  
|                                                        |  |                                      |          |                                      |   |            |  
|                                                        |  |                                      |          |                                      |   |            |  
|Operating
 Loss                                         |  |                                      | (260,185 | )                                    |   | (2,278,657 | )
|                                                        |  |                                      |          |                                      |   |            |  
|Other
 Income                                           |  |                                      |          |                                      |   |            |  
|Interest income                                         |  |                                      | 25,449   |                                      |   | 122,674    |  
|                                                        |  |                                      |          |                                      |   |            |  
|Total other income                                      |  |                                      | 25,449   |                                      |   | 122,674    |  
|                                                        |  |                                      |          |                                      |   |            |  
|                                                        |  |                                      |          |                                      |   |            |  
|Net Loss                                                |  | $                                    | (234,736 | )                                    | $ | (2,155,983 | )
|                                                        |  |                                      |          |                                      |   |            |  
|                                                        |  |                                      |          |                                      |   |            |  
|Weighted
 Average Units Outstanding - Basic and Diluted |  |                                      | 33,018   |                                      |   | 33,710     |  
|                                                        |  |                                      |          |                                      |   |            |  
|                                                        |  |                                      |          |                                      |   |            |  
|Net Loss
 Per Unit - Basic and Diluted                  |  | $                                    | (7.11    | )                                    | $ | (63.96     | )
|                                                        |  |                                      |          |                                      |   |            |  

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

|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|------------------------------------------------------ |  | ---------------------------------- | -------- | ---------------------------------- | - | ------------------------------------------------------ | - | - | ---------- | -
|                                                       |  |                                    |          |                                    |   |                                                        |  
|                                                       |  | Nine Months
 Ended
 July 31,
 2009 |          | Nine Months
 Ended
 July 31,
 2008 |   | From Inception
 (December 15,
 2005) to
 July 31, 2009 |  
|                                                       |  |                                    |          |                                    |   |                                                        |  
|                                                       |  | (Unaudited)                        |          | (Unaudited)                        |   | (Unaudited)                                            |  
|                                                       |  |                                    |          |                                    |   |                                                        |  
|Revenues                                               |  | $                                  |         |                                    | $ |                                                       |   | $ |           |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Operating Expenses                                     |  |                                    |          |                                    |   |                                                        |   |   |            |  
|General and administrative                             |  |                                    | 183,389  |                                    |   | 204,213                                                |   |   | 851,066    |  
|Professional fees                                      |  |                                    | 404,374  |                                    |   | 434,001                                                |   |   | 1,071,440  |  
|Impairment expense                                     |  |                                    |         |                                    |   | 5,920,000                                              |   |   | 6,922,625  |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Total operating expenses                               |  |                                    | 587,763  |                                    |   | 6,558,214                                              |   |   | 8,845,131  |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Operating Loss                                         |  |                                    | (587,763 | )                                  |   | (6,558,214                                             | ) |   | (8,845,131 | )
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Other Income                                           |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Interest income                                        |  |                                    | 124,603  |                                    |   | 514,890                                                |   |   | 1,322,653  |  
|Other income                                           |  |                                    |         |                                    |   |                                                       |   |   | 13,024     |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Total other income                                     |  |                                    | 124,603  |                                    |   | 514,890                                                |   |   | 1,335,677  |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Net Loss                                               |  | $                                  | (463,160 | )                                  | $ | (6,043,324                                             | ) | $ | (7,509,454 | )
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Weighted Average Units Outstanding - Basic and Diluted |  |                                    | 33,018   |                                    |   | 33,749                                                 |   |   | 20,481     |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  
|Net Loss Per Unit - Basic and Diluted                  |  | $                                  | (14.03   | )                                  | $ | (179.07                                                | ) | $ | (366.65    | )
|                                                       |  |                                    |          |                                    |   |                                                        |   |   |            |  

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

|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|------------------------------------------------------------------------------------------- |  | ----------------------------------- | ---------- | ----------------------------------- | - | ------------------------------------------------------- | - | - | ----------- | -
|                                                                                            |  |                                     |            |                                     |   |                                                         |  
|                                                                                            |  | Nine
 Months
 Ended
 July 31,
 2009 |            | Nine
 Months
 Ended
 July 31,
 2008 |   | From
 Inception
 (December 15,
 2005) to
 July 31, 2009 |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |  
|                                                                                            |  | (Unaudited)                         |            | (Unaudited)                         |   | (Unaudited)                                             |  
|Cash Flows
 from Operating Activities                                                       |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Net loss                                                                                    |  | $                                   | (463,160   | )                                   | $ | (6,043,324                                              | ) | $ | (7,509,454  | )
|Adjustments to reconcile net loss to net cash (used for) provided by
 operating activities: |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Depreciation                                                                                |  |                                     | 1,331      |                                     |   | 1,330                                                   |   |   | 3,823       |  
|Impairment of long-lived assets                                                             |  |                                     |           |                                     |   | 5,920,000                                               |   |   | 6,922,625   |  
|Write off of construction services related to terminated agreement                          |  |                                     |           |                                     |   |                                                        |   |   | 50,000      |  
|Write off of loan commitment fees                                                           |  |                                     |           |                                     |   | 25,000                                                  |   |   | 25,000      |  
|Non-cash interest income                                                                    |  |                                     |           |                                     |   | (30,000                                                 | ) |   | (30,000     | )
|Changes in operating assets and liabilities:                                                |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Accrued interest receivable                                                                 |  |                                     | 22,420     |                                     |   | (16,684                                                 | ) |   | (8,155      | )
|Prepaid expenses                                                                            |  |                                     | 31,466     |                                     |   | (39,341                                                 | ) |   | (7,079      | )
|Accounts payable                                                                            |  |                                     | (88,930    | )                                   |   | 303,560                                                 |   |   | 158,784     |  
|Accrued expenses                                                                            |  |                                     | 3,160      |                                     |   | 8,699                                                   |   |   | 11,069      |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Net
 cash (used for) provided by operating activities                                       |  |                                     | (493,713   | )                                   |   | 129,240                                                 |   |   | (383,387    | )
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Cash Flows from Investing Activities                                                        |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Capital expenditures                                                                        |  |                                     | (195,111   | )                                   |   | (2,330,397                                              | ) |   | (10,783,559 | )
|Proceeds from disposal of property and equipment                                            |  |                                     |           |                                     |   | 1,200,000                                               |   |   | 1,725,000   |  
|Payments for design services deposit                                                        |  |                                     |           |                                     |   |                                                        |   |   | (5,450,000  | )
|Refund of design services deposit                                                           |  |                                     |           |                                     |   | 3,300,000                                               |   |   | 3,300,000   |  
|Payments for construction deposit                                                           |  |                                     |           |                                     |   |                                                        |   |   | (2,500,000  | )
|Refund of construction deposit                                                              |  |                                     |           |                                     |   |                                                        |   |   | 2,450,000   |  
|Payments for certificates of deposit                                                        |  |                                     |           |                                     |   | (100,000                                                | ) |   | (1,950,000  | )
|Proceeds from maturing certificates of deposit                                              |  |                                     |           |                                     |   | 1,950,000                                               |   |   | 1,950,000   |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Net
 cash (used for) provided by investing activities                                       |  |                                     | (195,111   | )                                   |   | 4,019,603                                               |   |   | (11,258,559 | )
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Cash Flows from Financing Activities                                                        |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Loan commitment fees                                                                        |  |                                     |           |                                     |   |                                                        |   |   | (25,000     | )
|Members contributed capital                                                                |  |                                     |           |                                     |   |                                                        |   |   | 31,968,000  |  
|Payments for offering costs                                                                 |  |                                     |           |                                     |   | (6,329                                                  | ) |   | (186,428    | )
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Net
 cash (used for) provided by financing activities                                       |  |                                     |           |                                     |   | (6,329                                                  | ) |   | 31,756,572  |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Net (Decrease) Increase in Cash and Equivalents                                             |  |                                     | (688,824   | )                                   |   | 4,142,514                                               |   |   | 20,114,626  |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Cash and Equivalents at Beginning of Period                                                 |  |                                     | 20,803,450 |                                     |   | 16,244,811                                              |   |   |            |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Cash and Equivalents at End of Period                                                       |  | $                                   | 20,114,626 |                                     | $ | 20,387,325                                              |   | $ | 20,114,626  |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Supplemental Cash Flow Information                                                          |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Capitalized interest paid                                                                   |  | $                                   |           |                                     | $ |                                                        |   | $ | 133,556     |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Supplemental Schedule of Noncash Investing and
 Financing Activities                        |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Construction-in-progress included in accounts payable                                       |  | $                                   |           |                                     | $ | 101,131                                                 |   | $ |            |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Construction-in-progress applied against design services deposit                            |  | $                                   |           |                                     | $ | 48,675                                                  |   | $ | 963,675     |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Design services deposit applied against accounts payable to related
 party                  |  | $                                   |           |                                     | $ | 431,696                                                 |   | $ | 431,696     |  
|                                                                                            |  |                                     |            |                                     |   |                                                         |   |   |             |  
|Property and equipment returned for member units                                            |  | $                                   |           |                                     | $ | 750,000                                                 |   | $ | 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

July 31, 2009

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed interim financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted as permitted by such rules and regulations. These
financial statements and related notes should be read in conjunction with the
financial statements and notes thereto included in the Companys audited
financial statements for the year ended October 31, 2008, contained in the
Companys Form 10-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 July 31, 2009 and the results of operations and cash
flows for all periods presented.

Nature of Business

Soy Energy, LLC, a development stage Iowa limited liability company,
(the Company) was originally organized to develop, own and operate a 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 July 31,
2009, the Company is in the development stage. However, given the current
downturn in the economy and market conditions, management determined in October
2008 that obtaining financing to construct the plant would not likely be
feasible. On July 29, 2009, the Company entered into an Asset Purchase Agreement
and a Unit Purchase Agreement (Agreements) to acquire an existing biodiesel
facility from Freedom Fuels LLC (Freedom Fuels), currently a debtor in possession in bankruptcy in Mason City, Iowa.

Accounting Estimates

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

Equipment

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

Long-Lived Assets

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

7

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Table of Contents

SOY ENERGY, LLC
(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements

July 31, 2009

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

Management has determined that the projected future undiscounted cash flows for assets held for sale exceed their carrying value at
 July 31, 2009; therefore, no impairment loss was indicated or recognized.  In determining the projected future undiscounted cash flows, the Company has made assumptions
 concerning the future of the renewable fuels industry and the potential uses of the property. Given the uncertainties in the renewable fuels industry, should management be required
to adjust the carrying value of these assets at some future point in time, the adjustment could be significant and could significantly impact the Companys financial position
 and results of operations.  No adjustment has been made to these financial statements for this uncertainty.

Financial Instruments

The Company believes the carrying value of cash and cash equivalents approximate fair value.

Subsequent Events

The Company has evaluated subsequent events through September 14,
2009, the date which the financial statements were available to be issued.

Recently Adopted Accounting Pronouncements

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial
Instruments. FSP FAS 107-1 and APB 28-1 require disclosures about
fair value of financial instruments for interim reporting periods as well as in
annual financial statements. This new accounting standard was adopted for our
financial statements as of and for the three months ending July 31, 2009. The
adoption of FSP FAS 107-1 and APB 28-1 did not have a material impact on our
financial statements.

In May 2009, the FASB issued Statement of Financial Accounting
Standards No. 165 (SFAS 165), Subsequent
Events. SFAS 165 establishes the general standards of accounting for
and disclosure of subsequent events. In addition, it requires disclosure of the
date through which an entity has evaluated subsequent events and the basis for
that date. This new accounting standard was adopted for our financial
statements as of and for the three months ending July 31, 2009. The adoption of
SFAS 165 did not have a material impact on our financial statements.

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. On July 29, 2009, the
Company entered into Agreements to acquire substantially all of the assets of
Freedom Fuels, LLC, currently a debtor in possession in bankruptcy.  The Companys current cash reserves are
sufficient to fund operations without additional financing through 2010 if it
does not purchase the existing biodiesel facility. The Company is working to secure financing to complete the
acquisition of the biodiesel facility without which the Company will not close on the Agreements.

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, which amount would be less than members original
investment.

3. FAIR VALUE MEASUREMENTS

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

8

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Table of Contents

SOY ENERGY, LLC
(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements

July 31, 2009

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

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

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

|                  |  |                                 |            |  |                              |            |         |   |   |  |   |   | 
|----------------- |  | ------------------------------- | ---------- |  | ---------------------------- | ---------- | ------- | - | - |  | - | - | 
|                  |  |                                 |            |  | Fair Value Measurement Using |           
|                  |  | Fair Value as of
 July 31, 2009 |            |  |                             
|                  |  |                                 | Level 1    |  | Level 2                      |            | Level 3 |  
|                  |  |                                 |            |  |                              |            |         |   |   | 
|                 
|Cash
 equivalents |  | $                               | 16,790,339 |  | $                            | 16,790,339 |         | $ |  |  | $ |  | 
|                  |  |                                 |            |  |                              |            |         |   |   |  |   |   | 

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

4. ASSETS HELD FOR SALE

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

Amounts
included in assets held for sale are as follows:

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

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Table of Contents

SOY ENERGY, LLC
(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements

July 31, 2009

5.  ACQUISITION OF FREEDOM FUELS, LLC



Asset Purchase Agreement



On July 29, 2009, the Company entered into an Asset Purchase Agreement with Freedom Fuels pursuant to which the Company will acquire substantially all of Freedom Fuels' assets and thereafter operate the biodiesel facility currently owned by Freedom Fuels, an assignment agreement assigning to Freedom Fuels all of the Company's right, title and interest in the debtor in possession loans and an assignment agreement assigning 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 shall not assume or be liable for any liabilities of Freedom Fuels.



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



The Company and Freedom Fuels anticipate the Transaction will close no later than December 31, 2009, and either party may elect to terminate the Asset Purchase Agreement after that date, or either party may extend the Asset Purchase Agreement for an additional 90 days, or such longer time as the parties may mutually agree.  In the event the Asset Purchase Agreement is terminated by Freedom Fuels or the Company due to the sale of or agreement to sell substantially all of Freedom Fuels assets to a third party within twelve months of the date, and the sale price equals or exceeds $9,750,000, the Company will be paid a fee equal to $750,000 from the proceeds of the transaction.  Freedom Fuels may not sell substantially all of its assets to a third party for a purchase price less than $9,750,000. Any payment not promptly made at the closing of the sale to the third party shall accrue interest at
Citibank's Prime Lending Rate plus 2% commencing the date such Termination Fee became due.



Unit Purchase 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 will issue 8,254 membership units of the Company to New Equity, which will represent a 20% ownership interest in the Company after the issuance in consideration for a note for $2,000,000 called the dividend cash flow note and debtor in possession financing New Equity provided to Freedom Fuels while in bankruptcy.  The dividend cash note will require New Equity to repay the note with distributions from the Company.  The repayment schedule requires that after the first $1,000,000 of distributions, 50% of the distributions New Equity receives thereafter will be remitted back to the Company until the note is repaid.  The dividend cash flow note does not bear interest.



Closing on the UPA is conditioned upon the Company obtaining its members' approval of amendments to its Operating Agreement to provide for New Equity to appoint four directors to the Company's Board of Directors, subject to certain conditions and limitations, and upon closing of the Asset Purchase Agreement.  If the closing on the UPA has not occurred by March 15, 2010, either party may terminate the UPA.



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Table of Contents

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-month and nine-month periods ended July 31, 2009. 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, 2008.

Forward Looking Statements

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

| |   |                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Overcapacity
 within the biodiesel industry;                                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Our ability
 to obtain member approval and regulatory consent required to acquire
 substantially all of Freedom Fuels assets;                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Our ability
 to obtain debt financing to modify Freedom Fuels existing biodiesel plant so
 that it can process corn oil;                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Our ability
 to close the transaction to acquire substantially all of Freedom Fuels
 assets;                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Availability
 and costs of feedstock, particularly soy oil, animal fats and corn oil;                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes in
 the price and market for biodiesel and glycerin;                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes in
 our business strategy, capital improvements or development plans;                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes in
 or elimination of governmental laws, tariffs, trade or other controls or
 enforcement practices such as national, state or local energy policy; federal
 biodiesel tax incentives; or environmental laws and regulations that apply to
 the plant operations of any company we may invest in or merge with and their
 enforcement;
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes in
 general economic conditions impacting the availability and price of vegetable
 oils and animal fats;                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Total U.S.
 consumption of diesel;                                                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Continuing
 decrease in the demand for biodiesel;                                                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes in
 soy-based biodiesels qualification under the Renewable Fuels Standard as a
 result of the Environmental Protection Agencys preliminary tests indicating
 soy-based biodiesels failure to satisfy the required reduction of greenhouse
 gas emissions;                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Weather
 changes, strikes, transportation or production problems causing supply
 interruptions or shortages affecting the availability and price of feedstock;                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Changes in
 interest rates or the availability of credit;                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Our ability
 to generate free cash flow to invest in our business;                                                                                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Our
 potential liability resulting from future litigation;                                                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | General
 economic conditions;                                                                                                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Existence of
 and changes and advances in biodiesel production technology allowing us to
 profitably process corn oil by attaching a module to Freedom Fuels plant;                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Continued imposition of tariffs;                                                                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Competition
 from other alternative fuels; and                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                               
| |  | Other
 factors described elsewhere in this report.                                                                                                                                                                                                                                                                                            

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

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Table of Contents

Overview

Soy Energy, LLC was organized as an Iowa limited liability company by
filing articles of organization with the Iowa Secretary of State on December
15, 2005. We anticipated constructing a biodiesel plant with a production
capacity of 15 million gallons per year using technology provided by Best
Energies, Inc. (Best Energies) in Marcus, Iowa. However, given the current
downturn in economic and market conditions, combined with Best Energies
inability to make a $5,000,000 equity contribution, Management determined in
October 2008 that obtaining the financing to construct our plant would not
likely be feasible. Consequently, Management began exploring its options to
acquire, invest in or merge with a company that owns a constructed biodiesel
plant and decided to purchase certain assets of Freedom Fuels, LLC, an
Iowa limited liability company currently in Chapter 11 bankruptcy. Currently,
our principal place of business is located at P.O. Box 663, 222 N. Main St.,
Marcus, Iowa 51035.

Because we no longer plan to construct our plant, any funds we have
expended in our construction and plant development efforts were deemed a loss.
From our inception to July 31, 2009, we have incurred accumulated losses of
approximately $7,509,000. Since we have not commenced any operations, we do not
yet have comparable income, production or sales data.

On July 29, 2009, we entered into an Asset Purchase Agreement (APA)
with Freedom Fuels, LLC, an Iowa limited liability company and debtor in
possession (Freedom Fuels) pursuant to which we will acquire substantially
all of Freedom Fuels assets free and clear of all liens, claims and interests and thereafter operate
the biodiesel production facility currently owned by Freedom Fuels in exchange for $9,000,000 in
cash, an assignment agreement assigning to Freedom Fuels all of our right,
title and interest in the debtor in possession loans and an assignment
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
(the Transaction). The key agreements governing the Transaction are described
in further detail below.

Asset Purchase Agreement

Pursuant to
the APA, we will acquire substantially all the assets of Freedom Fuels,
including without limitation, all inventory and tangible personal property used
in Freedom Fuels business, all intellectual property, deposits and all rights
of Freedom Fuels under its contracts that we assume. We will not be assuming
any liabilities arising out of or relating to any aspect of Freedom Fuels
business on or before the closing date of the Transaction, which shall be no
later than 3 business days following satisfaction of the various conditions to
closing.

Among other
conditions, the closing of the Transaction is conditioned upon the receipt of
certain regulatory approvals and approval and confirmation from the Bankruptcy
Court of Freedom Fuels plan of reorganization, which will include the
Transaction. Our obligation to close the Transaction is also conditioned on us
obtaining a small business loan in the amount of $4 million and obtaining a $10
million USDA loan guarantee and a loan in the approximate amount of $7 million
to construct and operate a corn oil pretreatment facility that will enable
Freedom Fuels plant to process and refine feedstocks other than soy oil, such
as crude corn oil. Further, unless a majority of our unit holders approve the
APA and the transactions contemplated therein, we are not obligated to
consummate the Transaction.

According
to the APA, pending closing of the Transaction, Freedom Fuels shall conduct its
business only in the ordinary course and it shall use commercially reasonable
efforts to preserve its present business operations. Freedom Fuels shall also
use its best efforts to obtain approval of the APA by the Bankruptcy Court.
Freedom Fuels plan of reorganization was filed with the Bankruptcy Court
for the Northern District of Iowa on September 11, 2009 providing for the
Transaction shortly. We can terminate the APA if there has been a material
adverse effect to the business of Freedom Fuels or if Freedom Fuels has breached
or failed to perform any of its representations or warranties as set forth in
the APA and such breach or failure to perform are not timely cured. Finally,
either party may terminate the APA if the Transaction does not close by December
31, 2009. This termination date may be extended by either party for a maximum of
90 days, as long as the sole reason for closing not having occurred is that
required governmental approvals have not been approved. The parties may also
mutually agree to extend the closing date.

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Table of Contents

Unit Purchase Agreement

On July 29, 2009 we entered
into a Unit Purchase Agreement with New Equity, LLC, an Iowa limited liability
company (the UPA) pursuant to which we will 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 has been designated as
the Freedom Fuels Debtor In Possession Lender in the plan of reorganization of
Freedom Fuels to be filed with the Bankruptcy Court. New Equity and Freedom
Fuels have entered into a loan agreement and promissory note for New Equity to
make advances to Freedom Fuels up to $1,000,000 (the Debtor In Possession
Loan). Pursuant to this loan agreement, New Equity will pay to BANKFIRST,
Freedom Fuels senior lender, cash in an amount equal to $1,000,000, less all
advances actually made to Freedom Fuels by New Equity.

As
consideration for the units issued under the UPA, New Equity will: assign to us
all of its interest in the Debtor In Possession Loan and provide us with a
promissory note for $2,000,000 (the Dividend Cash Flow Note). The Debtor In
Possession Loan and the Dividend Cash Flow Note will be assigned to Freedom
Fuels as a part of the APA. The UPA anticipates the units will be issued
through a private placement and we will prepare an offering document to be
presented to New Equity no less than two weeks prior to closing of the UPA.
Closing of the UPA is conditioned upon New Equitys review of the offering
documents, and upon the Bankruptcy Courts approval of the APA.

Both
parties have made customary representations, warranties and covenants in the
UPA. The closing of the UPA is conditioned upon us obtaining our members
approval of amendments to our Operating Agreement to provide for New Equity to
appoint four directors to our board of directors and to issue our units to New
Equity. The closing of the UPA is also conditioned upon closing of the APA and
if the closing on the UPA has not occurred by March 15, 2010, either party may
terminate the UPA.

Liquidity and Capital Resources

Plan
of Operations

We expect
to spend the next 12 months focused primarily on obtaining government and
member approval, filing the necessary reports with the Securities and Exchange
Commission, obtaining the requisite debt financing, and closing on an
acquisition of substantially all the assets of Freedom Fuels, LLC, and
modifying the biodiesel facility to incorporate corn oil as a feedstock. There
can be no assurance that we will obtain the necessary member or regulatory
approval or debt financing required to close the Transaction.

Of the $30,668,000
we raised in equity during our offering registered with the State of Iowa, we
have total assets remaining of approximately $23,692,000 as of July 31, 2009,
consisting primarily of approximately $20,115,000 of cash and equivalents and
assets held for sale of approximately $3,557,000. We are currently working to
sell the assets held for sale, which include two boilers and three centrifuges,
which were acquired in our earlier efforts to construct a biodiesel plant.

Sources
and Uses of Funds

Below
is a table showing our sources of funds and our estimated use of proceeds
assuming we are able to successfully close the Transaction, although we have
not obtained member or regulatory approval in this regard.

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Table of Contents

ESTIMATED USE OF PROCEEDS

|                                                                                                                                              |  |        |            |    
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | ---------- | ---
|Use of Proceeds                                                                                                                               |  | Amount |           
|                                                                                                                                              |  |        |           
|Equity Proceeds Raised                                                                                                                        |  | $      | 31,782,000 | (1)
|Estimated Proceeds Used in Development and
 Partial Construction of a Biodiesel Facility in Marcus, Iowa and Continuing
 Administrative Costs |  |        | 11,859,000 | (2)
|Proceeds required to purchase substantially
 all of Freedom Fuels assets                                                                     |  | $      | 9,000,000  | (3)
|                                                                                                                                              |  |        |            |    
|Estimated proceeds remaining for start-up
 of Freedom Fuels plant and related expenditures                                                   |  | $      | 10,923,000 | (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 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 July 31, 2009 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 the Transaction closes and we obtain the numerous
approvals required.

(4)
This number is our current cash and equivalents, less our accounts
payable. If we sell some of the assets we have held for sale, then this will
increase the proceeds remaining to invest in or merge with another company.
Additionally, this figure does not include the debt financing that we intend to
obtain.

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. 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 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 year 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.

Freedom
Fuels biodiesel plant is located in Mason City, Iowa and has a capacity of 30
million gallons per year. The plant site is subject to two mortgages held by
BankFirst both of which will be released pursuant to the plan of reorganization
to be filed by Freedom Fuels. Thus, it is expected that we will obtain Freedom
Fuels plant site free and clear of all liens.

Plant Construction
and Start-Up of Plant Operations

Plant
Construction Activity

Construction
of the plant in Marcus, Iowa was approximately 10% complete when Management
determined completion of the construction was no longer feasible. In October
2008 we terminated our agreement with Best Energies because it notified us it
was no longer able to commit a $5,000,000 equity contribution to the project.
As a result of this and the current economic downturn, Management determined
that obtaining financing to complete construction was not likely feasible and
began exploring its options to acquire, invest in, or merge with a company that
owns a constructed biodiesel plant. Consequently, we recently executed an Asset
Purchase Agreement with Freedom Fuels, LLC for its biodiesel plant in Mason
City, Iowa. Freedom Fuels plant was operational and produced approximately 20
million gallons of biodiesel before Freedom Fuels filed for bankruptcy.

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Table of Contents

Permitting
and Costs and Effects of Compliance with Environmental Laws

We
anticipate that all the permits of Freedom Fuels current biodiesel plant will
be transferred to us. We may need to obtain additional permits for the module
we intend to attach to the plant to enable us to process corn oil; however, we
are yet to apply for any such permits at this time and we can provide no
assurance or guarantees that we will obtain such permits.

Feedstock
Procurement and Sale of Biodiesel

We
anticipate obtaining corn oil for processing at the biodiesel plant we intend
to acquire from ethanol plants situated nearby. We have had preliminary
discussions with numerous ethanol plants but have only reached non-binding and
informal understandings in this regard. We are yet to enter into any contracts with
any entity to supply us with corn oil.

We
anticipate entering into an agreement with a biodiesel marketer to sell the
biodiesel produced at the plant we intend to acquire. We are currently
discussing marketing arrangements with several different marketers, but are yet
to enter into any definitive agreements in this regard. We anticipate that any
biodiesel marketing contract we may enter into will require that we will be
paid for the biodiesel upon shipment from the plant, thus limiting our risk.
However, we have not entered into an agreement with any biodiesel marketer, and
we may not be able to enter into such an agreement on favorable terms or at
all.

Freedom
Fuels biodiesel plant

Freedom
Fuels plant is designed to run on soybean oil. Since the plant was not
profitable processing soybean oil, we intend to attach a module on the front
end of the plant to enable the plant to also process corn oil. This corn oil
module is expected to cost approximately $7 million dollars and we intend to
obtain debt financing for this project. We are in the process of applying for a
USDA loan guarantee in connection with obtaining this debt financing; however,
we may be unable to obtain the debt financing or the loan guarantee and this may
hinder our ability to purchase the necessary equipment. It is expected that
construction and installation of the corn oil module shall take between six to
eight months. We are yet to definitively decide which design-builder will
construct the corn oil module.

Trends and
Uncertainties Impacting the Biodiesel Industry and Our Future Operations

Freedom
Fuels was not profitable and it therefore filed for bankruptcy protection.
While we anticipate that the corn oil module will improve profit margins of the
plant that we intend to acquire, given the numerous industry-wide factors that
affect the operation of biodiesel plants and their financial performance, we
cannot provide any assurances that the plant will become profitable under our
management. We expect to require debt financing in the approximate amount of $7
million for construction and installation of the corn oil module; however,
given our lack of operational history and adverse industry conditions, we
cannot provide any guarantee or assurances that we will obtain this debt
financing. These factors include, but are not limited to, the available supply
and cost of feedstock from which the biodiesel and glycerin will be processed;
dependence on a biodiesel marketer and glycerin marketer to market and
distribute our products; the competitive nature of the biodiesel industry;
possible legislation at the federal, state and/or local level; changes in
federal tax incentives; the cost of complying with extensive environmental laws
that regulate the biodiesel industry; the risk of decreased demand from
European markets; and the biodiesel industrys lack of market share and
instability in the renewable fuels industry as a whole. If we are unable to
obtain the requisite debt financing, we will not be obligated to close the
Transaction.

We
anticipate our revenues from the biodiesel plant that we intend to acquire will
consist of sales of biodiesel and glycerin. 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, if the supply of biodiesel increases
from new biodiesel plants scheduled to begin production or from current plants
beginning to operate at larger percentages of their capacities, then we do not
expect current biodiesel prices to be sustainable in the long term and the
industry will need to continue to grow demand to offset the increased supply
brought to the market place by additional production.

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Management
believes that the current U.S. economic recession, the global economic downturn
and the recent financial crisis that led to a collapse of a variety of major
U.S. financial institutions and the federal governments passage of bailout
plans may also place downward pressure on the demand for fuel, including
biodiesel. These factors have caused significant upheaval in the financial
markets and economy of the United States, as well as abroad. Credit markets
have tightened and lending requirements have become more stringent. The U.S.
economy is in the midst of a recession, with increasing unemployment rates and
decreasing retail sales. Commodity markets tumbled as a result of the economic
turmoil, causing oil and other commodity prices to drop significantly.
Management expects that these conditions may lead to a decline in biodiesel
demand and it is uncertain for how long and to what extent these financial
troubles may negatively affect biodiesel demand in the future.

In
addition, demand could be depressed as a result of anti-dumping and
anti-subsidy tariffs imposed by the European Commission on all biodiesel
produced in the United States. On March 12, 2009 the European Commission
applied temporary tariffs on imports of biodiesel from the United States, while
it continues to investigate the evidence of unfair subsidies and dumping of United
States biodiesel imports into the European Union. These tariffs went into
effect March 13, 2009. In July 2009, the European Commission decided
to extend these tariffs beyond their initial July 2009 expiration date
until 2014. Our product will likely face increased competition for sales of its
biodiesel and international demand for its product will likely decrease as a
result of these tariffs. If demand for biodiesel continues to decline, this
could have a negative effect on the ability of Freedom Fuels plant we intend
to acquire to operate profitably.

We
expect that our results of operations if the Transaction is consummated will
benefit from federal and state biodiesel supports and tax incentives. 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 Volumetric Ethanol
Excise Tax Credit (VEETC), and the RFS, as amended by the Energy Independence
and Security Act of 2007 (the Energy Independence Act). The VEETC creates a
tax credit of $1.00 per gallon of biodiesel blended with petroleum diesel, but
is set to expire on December 31, 2009. The amended RFS requires the use of
9 billion gallons of renewable fuel in 2008, increasing to 36 billion
gallons of renewable fuel by 2022. The RFS further requires 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. We anticipate that the RFS may increase demand for biodiesel in the
long-term, as it sets a minimum usage requirement for biodiesel and other types
of biomass-based diesel. However, the EPA recently issued preliminary findings
that soy-based biodiesel fails to meet targets for reducing greenhouse
emissions, as required under the RFS. The RFS requires that biodiesel reduce
greenhouse gas emissions by 40 to 50% when compared to conventional diesel in
order to count towards the RFS mandate. The EPA found soy-based biodiesel to
reduce greenhouse gas emissions by only 22%. Biodiesel produced from animal
fats were found to meet this greenhouse gas emissions reduction requirement.
Thus, Management anticipates there may be increased demand for biodiesel
produced from animal fats in order to contribute to the RFS mandate. There can
be no assurance, however, that demand for biodiesel will be increased by the RFS,
as amended by the Energy Independence Act. It is already estimated that
national biodiesel production capacity far exceeds the 2012 biodiesel and
biomass-based diesel use RFS 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 RFS. We also anticipate that the majority of the renewable fuels
utilized to satisfy the RFS will be primarily satisfied by corn-based ethanol
and other types of ethanol, including cellulose-based ethanol.

Quarterly Financial
Results

At
July 31, 2009, we had total assets of approximately $23,692,000 consisting
primarily of cash and equivalents and assets held for sale. At July 31, 2009,
we had current liabilities of approximately $170,000 consisting of our accounts
payable and other accrued expenses. Total members equity at July 31, 2009, was
approximately $23,522,000. Since our inception, we have generated no revenue from
operations. For the three months ended July 31, 2009, we had a net loss of
approximately $235,000.

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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 and general
offering sales price 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 therefore entered into the APA with Freedom Fuels to purchase substantially
all its assets including its biodiesel plant in Mason City, Iowa. Closing of
the Transaction is conditioned on us obtaining debt financing to allow us to
attach a module on the front end of the plant to enable the plant to run on
corn oil.

Grants and Government Programs

Currently,
there are limited numbers of grants, loans and forgivable loan programs
available to biodiesel producers. We intend to apply for a USDA loan guarantee
to assist us in obtaining the debt financing necessary to construct and install
a corn oil module on Freedom Fuels plant that we intend to acquire. We can
offer no assurances or guarantees that we will obtain the loan guarantee or
that it will be of the amount that we desire.

Critical Accounting
Estimates

Management
uses estimates and assumptions in preparing our financial statements in
accordance with Generally Accepted Accounting Principles. Those estimates and
assumptions affect reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities, and reported revenues and expenses.
Significant estimates include long-lived asset and assets held for sale
impairment analysis.

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

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 July 31, 2009. Based upon this review and evaluation, these officers have
concluded that our disclosure controls and procedures were not effective due to
the material weaknesses in internal control over financial reporting discussed
below.

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Table of Contents

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

Changes in Internal Control Over Financial
Reporting

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

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors.

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

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

We
did not sell any membership units during the three months ended July 31, 2009.
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 July 31, 2009. The following table
sets forth our approximate use of proceeds until the present time:

|                                                     |  |   |             |     
|---------------------------------------------------- |  | - | ----------- | ----
|Net Proceeds                                         |  | $ | 31,782,000  | (1) 
|Capital Expenditures and Construction
 Related Costs |  |   | (11,259,000 | )   
|Project Development Costs                            |  |   | (1,923,000  | )(2)
|                                                     |  |   |             |     
|Balance                                              |  | $ | 18,600,000  |     

(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 July 31, 2009 on project development costs and does not
include the approximately $1,323,000 we have received from interest on cash and
equivalents and 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.

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|                                                            |                                                                                                                               |             |  |                                               
|----------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ----------- |  | ----------------------------------------------
|Item 4. Submission of Matters to a Vote of Security Holders
|                                                            |                                                                                                                              
|None.                                                      
|                                                            |                                                                                                                              
|Item
 5. Other
 Information                                
|                                                            |                                                                                                                              
|None.                                                      
|                                                            |                                                                                                                              
|Item 6. Exhibits                                           
|                                                            |                                                                                                                               |             |  |                                               
|(a)                                                         | The
 following exhibits are filed as part of this report. Exhibits previously
 filed are incorporated by reference, as noted.
|                                                            |                                                                                                                               |             |  |                                               
|                                                            |                                                                                                                               | Exhibit No. |  | Exhibit                                       
|                                                            |                                                                                                                               |             |  |                                               
|                                                            |                                                                                                                               | 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: | September 14,
 2009 |  | /s/ Charles Sand                      
|      |                     |  |                                       
|      |                     |  | Charles Sand                          
|      |                     |  | President
 and Chief Executive Officer
|      |                     |  | (Principal
 Executive Officer)        
|      |                     |  |                                       
|Date: | September 14,
 2009 |  | /s/ Dallas Thompson                   
|      |                     |  |                                       
|      |                     |  | Dallas
 Thompson                      
|      |                     |  | Treasurer
 and Chief Financial Officer

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