Table of Contents





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

|                                                                   |                                                                                    
|------------------------------------------------------------------ | -----------------------------------------------------------------------------------
|x                                                                  | Quarterly report under Section 13
 or 15(d) of the Securities Exchange Act of 1934.
|                                                                   |                                                                                    
|For the quarterly period ended January 31, 2010                   
|                                                                  
|OR                                                                
|                                                                   |                                                                                    
|o                                                                  | Transition report under Section 13
 or 15(d) of the Exchange Act.                  
|                                                                   |                                                                                    
|For the transition period from _______ to _________               
|                                                                  
|Commission file number 000-53112                                  
|                                                                  
|                                                                  
|                                                                  
|SOY ENERGY, LLC                                                   
|                                                                  
|(Exact
 name of small business issuer as specified in its charter)
|                                                                   |                                                                                    

|                                                                 |  |                                      
|---------------------------------------------------------------- |  | -------------------------------------
|Iowa                                                             |  | 20-4026473                           
|(State
 or other jurisdiction of
 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 March 17, 2010, we had 33,018 units outstanding.







Table of Contents

|           |                                                                                       |  |   
|---------- | ------------------------------------------------------------------------------------- |  | --
|PART 1.    | FINANCIAL INFORMATION                                                                 |  | 3 
|Item 1.    | Financial Statements                                                                  |  | 3 
|Item 2.    | Managements Discussion
 and Analysis of Financial Condition and Results of Operation |  | 9 
|Item 3.    | Quantitative and
 Qualitative Disclosures about Market Risk                           |  | 14
|Item 4T.   | Controls and Procedures                                                               |  | 14
|PART II.   | OTHER INFORMATION                                                                     |  | 15
|Item 1.    | Legal Proceedings                                                                     |  | 15
|Item 1A.   | Risk Factors                                                                          |  | 15
|Item 2.    | Unregistered Sales of
 Equity Securities and Use of Proceeds                          |  | 15
|Item 3.    | Defaults Upon Senior
 Securities                                                      |  | 15
|Item 4.    | [Reserved]                                                                            |  | 15
|Item 5.    | Other Information                                                                     |  | 16
|Item 6.    | Exhibits                                                                              |  | 16
|SIGNATURES |                                                                                       |  | 16

2

---



Table of Contents

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

|                                               |  |                    |            |                    |   |            |  
|---------------------------------------------- |  | ------------------ | ---------- | ------------------ | - | ---------- | -
|                                               |  |                    |            |                    |  
|ASSETS                                         |  | January
 31,
 2010 |            | October
 31,
 2009 |  
|                                               |  |                    |            |                    |  
|                                               |  | (Unaudited)        |            |                    |  
|Current
 Assets                                |  |                    |            |                    |   |            |  
|Cash and equivalents                           |  | $                  | 19,734,988 |                    | $ | 19,826,065 |  
|Accrued interest receivable                    |  |                    | 4,849      |                    |   | 6,171      |  
|Prepaid expenses                               |  |                    | 1,803      |                    |   | 4,441      |  
|                                               |  |                    |            |                    |   |            |  
|Total current assets                           |  |                    | 19,741,640 |                    |   | 19,836,677 |  
|                                               |  |                    |            |                    |   |            |  
|Equipment                                      |  |                    |            |                    |   |            |  
|Equipment                                      |  |                    | 8,873      |                    |   | 8,873      |  
|Accumulated depreciation                       |  |                    | (4,711     | )                  |   | (4,267     | )
|                                               |  |                    |            |                    |   |            |  
|Net equipment                                  |  |                    | 4,162      |                    |   | 4,606      |  
|                                               |  |                    |            |                    |   |            |  
|Assets
 held for sale                          |  |                    | 3,552,110  |                    |   | 3,557,061  |  
|                                               |  |                    |            |                    |   |            |  
|                                               |  |                    |            |                    |   |            |  
|Total
 Assets                                  |  | $                  | 23,297,912 |                    | $ | 23,398,344 |  
|                                               |  |                    |            |                    |   |            |  
|                                               |  |                    |            |                    |   |            |  
|LIABILITIES
 AND MEMBERS EQUITY               |  |                    |            |                    |   |            |  
|                                               |  |                    |            |                    |   |            |  
|Current
 Liabilities                           |  |                    |            |                    |   |            |  
|Accounts payable                               |  | $                  | 119,312    |                    | $ | 54,879     |  
|Accrued expenses                               |  |                    | 9,682      |                    |   | 8,027      |  
|                                               |  |                    |            |                    |   |            |  
|Total current liabilities                      |  |                    | 128,994    |                    |   | 62,906     |  
|                                               |  |                    |            |                    |   |            |  
|Members
 Equity                               |  |                    |            |                    |   |            |  
|Member contributions, 33,018 units outstanding |  |                    | 31,031,572 |                    |   | 31,031,572 |  
|Deficit accumulated during development stage   |  |                    | (7,862,654 | )                  |   | (7,696,134 | )
|                                               |  |                    |            |                    |   |            |  
|Total members equity                          |  |                    | 23,168,918 |                    |   | 23,335,438 |  
|                                               |  |                    |            |                    |   |            |  
|                                               |  |                    |            |                    |   |            |  
|Total Liabilities and Members Equity          |  | $                  | 23,297,912 |                    | $ | 23,398,344 |  
|                                               |  |                    |            |                    |   |            |  

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

3

---



Table of Contents

SOY ENERGY, LLC(A Development Stage Company)

Condensed Statements of Operations

|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|------------------------------------------------------ |  | -------------------------------------- | -------- | -------------------------------------- | - | --------------------------------------------------------- | - | - | ---------- | -
|                                                       |  |                                        |          |                                        |   |                                                           |  
|                                                       |  | Three months
 ended
 January 31,
 2010 |          | Three months
 ended
 January 31,
 2009 |   | From Inception
 (December 15,
 2005) to
 January 31, 2010 |  
|                                                       |  |                                        |          |                                        |   |                                                           |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Revenues                                               |  | $                                      |         |                                        | $ |                                                          |   | $ |           |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Operating Expenses                                     |  |                                        |          |                                        |   |                                                           |   |   |            |  
|General and administrative                             |  |                                        | 53,602   |                                        |   | 59,727                                                    |   |   | 960,049    |  
|Professional fees                                      |  |                                        | 126,057  |                                        |   | 120,748                                                   |   |   | 1,347,842  |  
|Impairment expense                                     |  |                                        |         |                                        |   |                                                          |   |   | 6,922,625  |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Total operating expenses                               |  |                                        | 179,659  |                                        |   | 180,475                                                   |   |   | 9,230,516  |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Operating Loss                                         |  |                                        | (179,659 | )                                      |   | (180,475                                                  | ) |   | (9,230,516 | )
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Other Income                                           |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Interest income                                        |  |                                        | 13,139   |                                        |   | 66,792                                                    |   |   | 1,354,052  |  
|Other income                                           |  |                                        |         |                                        |   |                                                          |   |   | 13,810     |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Total other income                                     |  |                                        | 13,139   |                                        |   | 66,792                                                    |   |   | 1,367,862  |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Net Loss                                               |  | $                                      | (166,520 | )                                      | $ | (113,683                                                  | ) | $ | (7,862,654 | )
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Weighted Average Units Outstanding - Basic and Diluted |  |                                        | 33,018   |                                        |   | 33,018                                                    |   |   | 22,010     |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  
|Net Loss Per Unit - Basic and Diluted                  |  | $                                      | (5.04    | )                                      | $ | (3.44                                                     | ) | $ | (357.23    | )
|                                                       |  |                                        |          |                                        |   |                                                           |   |   |            |  

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

4

---



Table of Contents

SOY ENERGY, LLC(A Development Stage
Company)

Condensed Statements of Cash Flows

|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|----------------------------------------------------------------------------- |  | --------------------------------------- | ---------- | --------------------------------------- | - | ---------------------------------------------------------- | - | - | ----------- | -
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|                                                                              |  | Three
 months
 Ended
 January 31,
 2010 |            | Three
 months
 Ended
 January 31,
 2009 |   | From
 Inception
 (December 15,
 2005) to
 January 31, 2010 |  
|                                                                              |  |                                         |            |                                         |   |                                                            |  
|Cash Flows
 from Operating Activities                                         |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Net loss                                                                      |  | $                                       | (166,520   | )                                       | $ | (113,683                                                   | ) | $ | (7,862,654  | )
|Adjustments to reconcile net loss to net cash used for operating
 activities: |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Depreciation                                                                  |  |                                         | 444        |                                         |   | 444                                                        |   |   | 4,711       |  
|Impairment of long-lived assets                                               |  |                                         |           |                                         |   |                                                           |   |   | 6,922,625   |  
|Write off of construction services related to terminated agreement            |  |                                         |           |                                         |   |                                                           |   |   | 50,000      |  
|Write off of loan commitment fees                                             |  |                                         |           |                                         |   |                                                           |   |   | 25,000      |  
|Non-cash interest income                                                      |  |                                         |           |                                         |   |                                                           |   |   | (30,000     | )
|Changes in operating assets and liabilities:                                  |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Accrued interest receivable                                                   |  |                                         | 1,322      |                                         |   | 17,005                                                     |   |   | (4,849      | )
|Prepaid expenses                                                              |  |                                         | 2,638      |                                         |   | 1,100                                                      |   |   | (1,803      | )
|Accounts payable                                                              |  |                                         | 64,433     |                                         |   | 22,788                                                     |   |   | 119,312     |  
|Accrued expenses                                                              |  |                                         | 1,655      |                                         |   | 3,234                                                      |   |   | 9,682       |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Net
 cash used for operating activities                                       |  |                                         | (96,028    | )                                       |   | (69,112                                                    | ) |   | (767,976    | )
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Cash Flows from Investing Activities                                          |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Capital expenditures                                                          |  |                                         |           |                                         |   | (195,111                                                   | ) |   | (10,783,559 | )
|Proceeds from disposal of property and equipment                              |  |                                         |           |                                         |   |                                                           |   |   | 1,725,000   |  
|Proceeds from disposal of assets held for sale                                |  |                                         | 4,951      |                                         |   |                                                           |   |   | 4,951       |  
|Payments for design services deposit                                          |  |                                         |           |                                         |   |                                                           |   |   | (5,450,000  | )
|Refund of design services deposit                                             |  |                                         |           |                                         |   |                                                           |   |   | 3,300,000   |  
|Payments for construction deposit                                             |  |                                         |           |                                         |   |                                                           |   |   | (2,500,000  | )
|Refund of construction deposit                                                |  |                                         |           |                                         |   |                                                           |   |   | 2,450,000   |  
|Payments for certificates of deposit                                          |  |                                         |           |                                         |   |                                                           |   |   | (1,950,000  | )
|Proceeds from maturing certificates of deposit                                |  |                                         |           |                                         |   |                                                           |   |   | 1,950,000   |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Net
 cash provided by (used for) investing activities                         |  |                                         | 4,951      |                                         |   | (195,111                                                   | ) |   | (11,253,608 | )
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Cash Flows from Financing Activities                                          |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Loan commitment fees                                                          |  |                                         |           |                                         |   |                                                           |   |   | (25,000     | )
|Members' contributed capital                                                  |  |                                         |           |                                         |   |                                                           |   |   | 31,968,000  |  
|Payments for offering costs                                                   |  |                                         |           |                                         |   |                                                           |   |   | (186,428    | )
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Net
 cash provided by financing activities                                    |  |                                         |           |                                         |   |                                                           |   |   | 31,756,572  |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Net (Decrease) Increase in Cash and Equivalents                               |  |                                         | (91,077    | )                                       |   | (264,223                                                   | ) |   | 19,734,988  |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Cash and Equivalents at Beginning of Period                                   |  |                                         | 19,826,065 |                                         |   | 20,803,450                                                 |   |   |            |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Cash and Equivalents at End of Period                                         |  | $                                       | 19,734,988 |                                         | $ | 20,539,227                                                 |   | $ | 19,734,988  |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Supplemental Cash Flow Information                                            |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Capitalized interest paid                                                     |  | $                                       |           |                                         | $ |                                                           |   | $ | 133,556     |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Supplemental Schedule of Noncash Investing and
 Financing Activities          |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Construction-in-progress applied against design services deposit              |  | $                                       |           |                                         | $ |                                                           |   | $ | 963,675     |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Design services deposit applied against accounts payable to related
 party    |  | $                                       |           |                                         | $ |                                                           |   | $ | 431,696     |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Property and equipment returned for member units                              |  | $                                       |           |                                         | $ |                                                           |   | $ | 750,000     |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  
|Property and equipment reclassified to assets held for sale                   |  | $                                       |           |                                         | $ |                                                           |   | $ | 3,557,061   |  
|                                                                              |  |                                         |            |                                         |   |                                                            |   |   |             |  

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

5

---



Table of Contents

SOY ENERGY, LLC(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements

January 31, 2010

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed interim financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted as permitted by such rules and regulations. These
financial statements and related 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, 2009, contained in the
Companys Form 10-K.

In the opinion of management, the interim condensed financial
statements reflect all adjustments, consisting of only normal recurring
adjustments, considered necessary for fair presentation of the Companys
financial position as of January 31, 2010 and the results of operations and
cash flows for all periods present.

Nature of Business

Soy Energy, LLC, a development stage Iowa limited liability company,
(the Company) was organized to develop, own and operate a 30 million gallon per
year (MGY) production biodiesel facility between Cleghorn and Marcus, Iowa in
Cherokee County. The Company was formed December 15, 2005 to have a perpetual
life. As of January 31, 2010, the Company is in the development stage and is
considering the purchase of or investment in an existing biodiesel facility instead of developing a biodiesel facility between Cleghorn and Marcus, Iowa. On
July 29, 2009, the Company entered into an Asset Purchase Agreement to acquire
an existing biodiesel facility from Freedom Fuels, LLC (Freedom Fuels), a
debtor in possession in bankruptcy in Mason City, Iowa. Because of a change in
the bankruptcy, the Company is in the process of drafting an updated Asset
Purchase Agreement as described in Note 5.

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

Equipment

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

6

---



Table of Contents

SOY ENERGY, LLC(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements

January 31, 2010

2. LIQUIDITY

The Company is a developmental stage company and has no operating
revenues. The Company has determined it is not currently feasible to build a
biodiesel facility with the available cash on hand. The Company is currently
working to complete an agreement to acquire substantially all of the assets of
Freedom Fuels, LLC, a debtor in possession in bankruptcy, as further described
in Note 5. The Companys current cash reserves are sufficient to fund
operations without additional financing through 2011 if it does not purchase
the existing biodiesel facility.

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

3. FAIR VALUE MEASUREMENTS

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

Under FASB ASC 820-10, fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in the
principal or most advantageous market. FASB ASC 820-10 establishes a hierarchy
in determining the fair value of an asset or liability. The fair value
hierarchy has three levels of inputs, both observable and unobservable. FASB
ASC 820-10 requires the utilization of the lowest possible level of input to
determine fair value. Level 1 inputs include quoted market prices in an active
market for identical assets or liabilities. Level 2 inputs are market data,
other than Level 1, that are observable either directly or indirectly. Level 2
inputs include quoted market prices for similar assets or liabilities, quoted
market prices in an inactive market, and other observable information that can
be corroborated by market data. Level 3 inputs are unobservable and
corroborated by little or no market data.

Except for those assets and liabilities which are required by
authoritative accounting guidance to be recorded at fair value in our balance
sheets, the Company has elected not to record any other assets or liabilities
at fair value, as permitted by FASB ASC 825-10. No events occurred during the
three months ended January 31, 2010 that would require adjustment to the
recognized balances of assets or liabilities which are recorded at fair value
on a nonrecurring basis.

As of January 31, 2010, the Company does not have any assets or liabilities measured at fair value on a
recurring or nonrecurring basis that would require disclosure under this guidance.

4. ASSETS HELD FOR SALE

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

7

---



Table of Contents

SOY ENERGY, LLC(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements

January 31, 2010

Amounts
included in assets held for sale are as follows:

|                                             |  |                 |           |                  |   |           | 
|-------------------------------------------- |  | --------------- | --------- | ---------------- | - | --------- | 
|                                             |  | January 31,2010 |           | October 31,2009* |  
|                                             |  |                 |           |                  |  
|Land                                         |  | $               | 250,262   |                  | $ | 250,262   | 
|Equipment                                    |  |                 | 3,301,848 |                  |   | 3,306,799 | 
|                                             |  |                 |           |                  |  
|                                             |  |                 |           |                  |   |           | 
|                                             |  | $               | 3,552,110 |                  | $ | 3,557,061 | 
|                                             |  |                 |           |                  |   |           | 
|                                             |  |                 |           |                  |   |           | 
|* Derived
 from audited financial statements |  |                 |           |                  |   |           | 

5. COMMITMENTS AND CONTINGENCIES

Consulting Contract

In October 2009, the Company entered into an agreement with an
unrelated advisory service to act as participating debt placement agent to
market senior debt in a total amount of approximately $6,000,000. The Company
will pay a non-refundable advisory fee of $10,000 and a monthly advisory fee of
$5,000 per month until the expiration of the agreement, the closing of the
transaction, or upon written notice of termination by the Company.
Additionally, a debt placement fee of 1% of the total amount of committed debt
shall be paid as a condition to closing. All advisory fees paid will be
credited against the debt placement fee at the closing of the transaction. The
agreement expires six months from the date of its execution unless extended by
written consent of both parties, and may be terminated by either party at any
time by written notice of termination.

Asset Purchase Agreement  Freedom Fuels, LLC

On July 29, 2009, the Company entered into an Asset Purchase Agreement
(the APA) with Freedom Fuels in Mason City, Iowa 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 anticipated the Transaction would close
no later than December 31, 2009. The Transaction did not close by this date due
to Freedom Fuels transferring its assets to its bank, Outsource Services
Management, LLC (OSM) and the bankruptcy proceedings transferring to Chapter
7. Both parties are currently working together to complete a new agreement for
the transaction and anticipates closing on the transaction in the next several
months.

8

---



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 period ended January 31, 2010. This discussion
should be read in conjunction with the financial statements and notes and the
information contained in our annual report on Form 10-K for the fiscal year
ended October 31, 2009.

Forward Looking Statements

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

| |   |                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our inability to obtain financing to install corn oil processing
 equipment on the biodiesel plant we anticipate purchasing in Mason City (the
 Mason City biodiesel plant);                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Overcapacity within the biodiesel industry;                                                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Our ability to effectively operate the Mason City biodiesel plant and manage
 its business;                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Changes in our business strategy, capital improvements or development
 plans;                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Lack of definitive documents with Outsource Services Management, LLC
 (OSM) to purchase the Mason City plant;                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Availability and costs of feedstock, particularly soy oil, animal
 fats and corn oil;                                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Changes in the price and market for biodiesel and glycerin;                                                                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Our ability to successfully complete the purchase of the Mason City biodiesel plant from OSM and install equipment to make the plant a multi-feedstock
 capable plant;                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Actual biodiesel and glycerin production varying from expectations;                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Changes in or elimination of governmental laws, tariffs, trade or
 other controls or enforcement practices such as national, state or local
 energy policy; federal biodiesel tax incentives; or environmental laws and
 regulations that apply to the Mason City biodiesel plant, including the blenders tax
 credit;
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Changes in the weather or general economic conditions impacting the
 availability and price of vegetable oils and animal fats;                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Total U.S. consumption of diesel;                                                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Weather changes, strikes, transportation or production problems
 causing supply interruptions or shortages affecting the availability and
 price of feedstock;                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Changes in plant production capacity or technical difficulties in
 operating the Mason City biodiesel plant;                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Changes in interest rates or the availability of credit;                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Our ability to generate free cash flow to invest in our business;                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Our potential liability resulting from future litigation;                                                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Outcome of recently instigated litigation regarding possible patent
 infringement on certain types of corn oil production technology, which may
 cause ethanol producers that are currently producing corn oil to cease
 production;                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | General economic conditions;                                                                                                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Ability to sell assets held for sale at their carrying value minus
 selling costs;                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Changes and advances in biodiesel production technology;                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Competition from other alternative fuels; and                                                                                                                                                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                                                       
| |  | Other factors described elsewhere in this report.                                                                                                                                                                                                                                                                     

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

9

---



Table of Contents

Overview

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

Given the
recent economic downturn, Management determined in October 2008 that obtaining
the financing necessary to build even this smaller biodiesel plant is not
likely feasible. Therefore, we have since began exploring possibilities to use
our assets to merge with or invest in a company that has already completed
construction of a biodiesel plant, rather than constructing our own plant.

On July 29,
2009, we entered into an Asset Purchase Agreement with Freedom Fuels, LLC, an
Iowa limited liability company which was in Chapter 11 bankruptcy and owned a
biodiesel plant in Mason City, Iowa (Freedom Fuels) pursuant to which we
would acquire substantially all of Freedom Fuels assets 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 agreement assigning to Freedom Fuels all of our right, title and interest in
the debtor in possession loans and an agreement assigning to Freedom Fuels all
of the our right, title and interest in the dividend cash flow note of $2
million issued by New Equity, LLC to us. On the same day, we entered into a
Unit Purchase Agreement with New Equity, LLC, an Iowa limited liability company
(New Equity) pursuant to which we would issue 8,254 of our membership units
to New Equity, representing a 20% ownership interest in Soy Energy, LLC. New
Equity, LLC is comprised of 19 members of Freedom Fuels. New Equity was
designated as the Freedom Fuels Debtor In Possession Lender in the plan of
reorganization of Freedom Fuels filed with the Bankruptcy Court. As
consideration for the units that were to be issued under the Unit Purchase
Agreement, New Equity was to assign to us all of its interest in the Debtor In
Possession Loan and provide us with a promissory note for $2,000,000. However,
prior to closing on either of these agreements, Freedom Fuels transferred all
of its assets to its bank and on February 2, 2010 the proceedings were
converted from a Chapter 11 voluntary bankruptcy to a Chapter 7 involuntary
bankruptcy. Thus, we will be unable to close on the Asset Purchase Agreement
with Freedom Fuels and we do not expect to close on the Unit Purchase Agreement
with New Equity.

We are
currently in negotiations with Outsource Services Management, LLC (OSM), a
Minnesota limited liability company, which is the agent for the bank group that
has taken possession of Freedom Fuels assets, to enter into an asset purchase
agreement for us to purchase the Mason City biodiesel plant from the bank group. We
have not executed any binding agreements with OSM, however, and we may never do
so or may only be able to do so under terms unfavorable to Soy Energy. In the
event we cannot negotiate an asset purchase agreement with OSM, we may be
forced to abandon our business and ask our members to vote on dissolution of
our company.

Construction
of the proposed 15 million gallon per year plant in Marcus, Iowa was
approximately 10% complete when Management determined completion of the
construction was no longer feasible. Although we believe that we will be able
to sell our long-lived assets at their fair value, we may not be able to sell them at a profit. If we do not sell these
assets at the current carrying value or at all, it may result in a material loss to the financial
statements. Because we do not anticipate constructing the Marcus, Iowa plant,
all funds we expended in our construction and plant development efforts were
deemed a loss. From our inception to January 31, 2010, we have incurred
accumulated losses of approximately $7,863,000.

To date, we
have not generated any revenues and we do not anticipate generating any
revenues unless we successfully purchase an existing biodiesel facility. Since
we have not commenced any operations, we do not yet have comparable income,
production or sales data.

10

---



Table of Contents

Liquidity and Capital Resources

Plan of Operations

We expect to
spend the next 12 months negotiating and entering into an asset purchase
agreement with OSM for the Mason City biodiesel plant, which was previously
owned by Freedom Fuels, LLC, closing on the asset purchase agreement,
installing equipment on the Mason City biodiesel plant to process corn oil and
beginning our operations of the Mason City biodiesel plant. We anticipate that
in the next twelve months we may need to obtain debt financing, which will
likely be a part of our agreement with OSM. We have entered into an agreement
with Eiler Capital Advisors, LLC (ECA) to act as our outside consultant in
placing any debt financing we may need to obtain in relation to our
installation of the feedstock processing equipment at the Mason City plant. We
do not anticipate raising additional equity capital in the next 12 months.
However, in the event our equity reserves are not adequate to recommence or continue operations of the Mason City biodiesel plant we may be forced to do
so. We expect our equity reserves will be adequate for the purchase of the
Mason City biodiesel plant. Should we be unsuccessful in completing the
purchase of the Mason City biodiesel plant or in our operation of the plant, our project
may fail and we may be dissolved. If we are dissolved, our assets will be
distributed pursuant to our operating agreement.

Sources
and Uses of Funds

We
anticipate that any remaining funds from our original intrastate offering will
be used to purchase the Mason City biodiesel plant from OSM and install additional feedstock
processing equipment on the plant. In addition, we anticipate that we will obtain debt financing
for a portion of the equipment installation.

ESTIMATED USE OF PROCEEDS

|                                                                                               |  |   |            |    
|---------------------------------------------------------------------------------------------- |  | - | ---------- | ---
|Use of
 Proceeds                                                                               |  |   | Amount     |    
|                                                                                               |  |   |            |    
|Equity Proceeds Raised                                                                         |  | $ | 31,782,000 | (1)
|Estimated Proceeds Used in Development and
 Construction of biodiesel facility in Marcus, Iowa |  | $ | 12,005,000 | (2)
|Proceeds required to purchase the Mason
 City plant and complete related improvements          |  | $ | 18,000,000 | (3)
|Interest income earned on cash and
 equivalents                                                |  | $ | 1,354,000  |    
|                                                                                               |  |   |            |    
|Estimated proceeds remaining for start-up
of Mason City plant and related expenditures         |  | $ | 3,131,000  | (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 January 31, 2010 on construction, building and facilities, purchase
of machinery and equipment and purchases of real estate related to our attempt
to construct a biodiesel facility in Marcus, Iowa plus ongoing administrative
costs we have associated with operating our business until an acquisition, investment
or merger with another company is closed.

(3)
This amount assumes that the anticipated asset purchase agreement with OSM
closes and we obtain the numerous approvals required.

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

11

---



Table of Contents

Site Acquisition and Development

We
purchased approximately 35 acres for our plant site near Marcus, Iowa in
Cherokee County. In August 2007, we commenced construction of our biodiesel
plant. In November 2007, we suspended all construction related activities on
our plant while we sought the debt financing we needed to complete construction
of the plant. On April 10, 2008 our members approved reducing the initial
production capacity of the biodiesel plant to 15 million gallons per year from
30 million gallons per year. Upon completing approximately 10% of the
construction of our biodiesel plant in October 2008, Management determined that
it would not likely be feasible to complete construction of the biodiesel plant
due to current economic conditions and our lack of debt financing. We may be
unable to sell the site and the construction completed at a profit, or at all.
Due to the significant changes we made to our project, we recorded an
impairment charge during our quarter ended October 31, 2008 in the value of
constructed and construction in process assets of approximately $6,923,000, a
portion of which is from the site we purchased.

Trends and Uncertainties Impacting the
Biodiesel Industry and Our Future Operations

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

We
anticipate our revenues will consist of sales of biodiesel and glycerin. 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, due to the increase in
the supply of biodiesel from the number of new biodiesel plants scheduled to begin
production and the expansion of current plants, the industry will need to
continue to grow demand to offset the increased supply brought to the market
place by additional production.

We expect
to benefit from federal and state biodiesel supports and tax incentives,
however, these benefits may be subject to the applicability of such supports
and tax incentives to our operations. Biodiesel has generally been more
expensive to produce than petroleum-based diesel and, as a result, the
biodiesel industry depends on such incentives to be competitive. Changes to
these supports or incentives could significantly impact demand for biodiesel.
The most significant of these are the blenders tax credit and the RFS, as
amended by the Energy Independence and Security Act of 2007 (the EISA). The
American Jobs Creation Act of 2004 originally created the biodiesel blenders
excise tax credit under the Volumetric Ethanol Excise Tax Credit (VEETC).
Known as the blenders tax credit, it provides a tax credit of $1.00 per gallon
for biodiesel. The blenders credit may be claimed in both taxable and
nontaxable markets, including exempt fleet fuel programs and off-road diesel
markets. The desired effect of the blenders tax credit is to streamline the use
of biodiesel and encourage petroleum blenders to blend biodiesel as far
upstream as possible, which will allow more biodiesel to be used in the
marketplace. The blenders tax credit also streamlines the tax refund system for
below-the-rack blenders to allow a tax refund of the biodiesel tax credit on
each gallon of biodiesel blended with diesel (dyed or undyed) to be paid within
20 days of blending. Below-the-rack blenders are those blenders that market
fuel that is for ground transportation engines and is not in the bulk transfer
system. The blenders tax credit was set to expire on December 31, 2008, but was
extended until December 31, 2009 as part of the Emergency Economic
Stabilization Act of 2008 (EESA) and as of the date of this report has not
been extended further. Legislation to reinstate the blenders tax credit,
however, has been approved in both the House and Senate, but each version of
the legislation must now be reconciled.

12

---



Table of Contents

The amended
RFS, known as RFS2, required the use of 9 billion gallons of renewable fuel in
2008, increasing to 36 billion gallons of renewable fuel by 2022. The RFS
further required at least 500 million gallons of biodiesel and biomass-based
diesel fuel be blended into the national diesel pool in 2009, increasing to 1
billion gallons by 2012. However, in November 2008, the EPA announced that the RFS program
in 2009 would continue to be applicable to producers and importers of gasoline
only. This meant that the 500 million gallons of biomass-based diesel required
by RFS2 did not have to be blended into U.S. fuel supplies in 2009. This is due
to the fact that the regulatory structure of the original RFS program does not
provide a mechanism for implementing the EISA requirement for the use of 500
million gallons of biomass-based diesel. On February 3, 2010 the EPA issued
final rules under RFS2. The final rules addressed this issue by combining the
2010 biomass-based diesel requirement of 0.65 billion gallons with the 2009
biomass-based diesel requirement of 0.5 billion gallons to require that
obligated parties meet a combined 2009/2010 requirement of 1.15 billion gallons
by the end of the 2010 compliance year.

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

Thus,
Management anticipates that under the EPAs final RFS2 regulations, there may
be increased demand for biodiesel. There can be no assurance, however, that
demand for biodiesel will be increased by the RFS2, and any increase in demand
may be offset by the loss of the blenders tax credit. In addition, it is
already estimated that national biodiesel production capacity far exceeds the
2012 biodiesel and biomass-based diesel use RFS2 mandate. Accordingly, there is
no assurance that additional production of biodiesel and biomass-based diesel
will not continually outstrip any additional demand for biodiesel that might be
created by the RFS2.

Biodiesel
production grew as additional plants become operational, until 2009 when
production reduced. In 2006 biodiesel production was approximately 250 million
gallons. The National Biodiesel Board estimates that in 2008, biodiesel
production reached 700 million gallons. Estimates for 2009 biodiesel production
however, were approximately 450 million gallons. This reduction was likely
largely related to the recession and the related credit crisis. In June 22,
2009, the most recently reported data, the National Biodiesel Board estimated
there were 173 active plants with an annual production capacity of 2.69 billion
gallons annually, with another 29 plants and 1 expansion in construction. We
believe this increase in biodiesel supply, reduction in demand, and the loss of
the blenders credit have forced some biodiesel producers to cut back production
or cease production altogether. The combination of additional supply and
stagnant or reduced demand may damage our ability to secure the debt financing
we require and hurt our ability to generate revenue and maintain positive cash
flows should our biodiesel plant become operational.

The global
equity markets have been disrupted and have experienced significant volatility.
The U.S. stock markets have tumbled since September 2008 upon the collapse of
multiple major financial institutions, the federal governments takeover of two
major mortgage companies, Freddie Mac and Fannie Mae, and the enactment of various
bail out plans, pursuant to which the federal government will directly invest
in troubled financial institutions. Financial institutions across the country
have lost billions of dollars due to the extension of credit for the purchase
and refinance of over-valued real property. The collapse of these financial
institutions and the continued volatility in the credit market may
significantly decrease the availability of credit needed to fund our project.

Quarterly Financial Results

At January
31, 2010, we had total assets of approximately $23,298,000 consisting primarily
of cash and equivalents and assets held for sale. At January 31, 2010, we had
current liabilities of approximately $129,000 consisting of our accounts
payable and other accrued expenses. Total members equity at January 31, 2010,
was approximately $23,169,000. Since our inception, we have generated no
revenue from operations. For the three months ended January 31, 2010, we had a
net loss of approximately $167,000.

Based upon
the determination that building the plant would not likely be feasible, we now
anticipate purchasing an existing biodiesel plant from OSM for approximately
$10,000,000 and installing feedstock processing equipment on the plant for
approximately $8,000,000. If we cannot complete such a transaction, we may be
forced to dissolve our company, in which case, the assets of the company will
be distributed according to our operating agreement, which may result in a loss
of your investment.

13

---



Table of Contents

Sources of Funds

In December
2005, we sold a total of 1,500 units to our founding members at a price of
$333.33 per unit and received aggregate proceeds of $500,000. In addition, in
April 2006 we issued 1,600 units to our seed capital members at a price of $500
per unit and received aggregate proceeds of $800,000. We sold 30,668 units at a
price of $1,000 per unit in our Iowa registered offering and received aggregate
proceeds of $30,668,000. We broke escrow on our Iowa registered offering in June
2007. We incurred costs of raising capital of approximately $186,000 related to
the equity proceeds raised. These costs primarily consisted of legal fees,
professional fees and printing costs. In July 2008, we executed a redemption
agreement with Bratney pursuant to which Bratney agreed to return its 750
membership units.

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

Debt Financing

In October
2008, Management determined it would not likely be feasible to obtain the
necessary debt financing to complete construction of our biodiesel plant. We
now plan to purchase an existing biodiesel plant in Mason City, Iowa from OSM.
We plan to install additional feedstock equipment on this plant. We anticipate
we will need to obtain debt financing to complete our purchase of the plant,
equipment installation and start-up of operations.

Grants and Government Programs

Currently,
there are limited numbers of grants, loans and forgivable loan programs
available to biodiesel producers. We are uncertain what grants, loans and
forgivable loan programs, if any, will be available if we complete the purchase
of the Mason City biodiesel plant. Some combinations of programs are mutually
exclusive. Funds that we have expended in applying for grants, loans and
forgivable loan programs will likely be a loss, unless we can transfer those
benefits as a result of our anticipated purchase of the Mason City biodiesel
plant. Any benefits we may have already received may have to be repaid because
we no longer plan to complete construction of our plant.

Critical Accounting Estimates

Management
uses estimates and assumptions in preparing our financial statements in
accordance with generally accepted accounting principles. These estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. The carrying value of long lived assets held for sale and any
assumptions used in the impairment analysis of assets held for sale included in
significant estimates is based on the ability to sell or utilize these assets.

Off-Balance Sheet Arrangements

We do not
have any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about
Market Risk

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

Item 4T. Controls and Procedures

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 January 31, 2010. Based upon
this review and evaluation, these officers have concluded that our disclosure
controls and procedures were effective.

14

---



Table of Contents

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 January 31, 2010 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 January 31, 2010. None
of our membership units were purchased by or on behalf of the Company or any
affiliated purchaser (as defined in Rule 10b-18(a)(3) of the Exchange Act) of
the Company during the three months ended January 31, 2010.

|                                                     |  |   |             |     
|---------------------------------------------------- |  | - | ----------- | ----
|Net Proceeds                                         |  | $ | 31,782,000  | (1) 
|Capital Expenditures and Construction
 Related Costs |  |   | (11,259,000 | )   
|Project Development Costs                            |  |   | (2,308,000  | )(2)
|                                                     |  |   |             |     
|Balance                                              |  | $ | 18,861,000  |     

(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 January 31, 2010 on project
development costs and does not include the approximately $1,354,000 we have
received from interest on investments. The amount we have received from
interest has offset the amount we expended, as reflected on our statement of
cash flows and in the table Estimated Use of Proceeds above.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Reserved]

15

---



Table of Contents

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  | March 17,
 2010 |  | /s/ Charles
 Sand                     
|      |                 |  |                                       
|      |                 |  | Charles Sand                          
|      |                 |  | President
 and Chief Executive Officer
|      |                 |  | (Principal
 Executive Officer)        
|      |                 |  |                                       
|Date: | March 17,
 2010 |  | /s/ Dallas
 Thompson                  
|      |                 |  |                                       
|      |                 |  | Dallas
 Thompson                      
|      |                 |  | Treasurer
 and Chief Financial Officer

16

---