Table of Contents

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|                                   
|-----------------------------------
|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, 2011                 
|                                                                  |                                                                                    
|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.)
|                                                                 
|4172 19TH STREET SW, MASON CITY, IA 50401                        
|(Address of principal executive offices)                         
|                                                                 
|(641) 421-7590                                                   
|(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, 2011, we had 33,018 units outstanding.

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Table of Contents

|           |                                                                                       |   
|---------- | ------------------------------------------------------------------------------------- | --
|PART 1.    | FINANCIAL INFORMATION                                                                 | 3 
|Item 1.    | Financial Statements                                                                  | 3 
|Item 2.    | Managements Discussion
 and Analysis of Financial Condition and Results of Operation | 10
|Item 3.    | Quantitative and
 Qualitative Disclosures about Market Risk                           | 19
|Item 4.    | Controls and Procedures                                                               | 19
|PART II.   | OTHER INFORMATION                                                                     | 19
|Item 1.    | Legal Proceedings                                                                     | 19
|Item 1A.   | Risk Factors                                                                          | 19
|Item 2.    | Unregistered Sales of
 Equity Securities and Use of Proceeds                          | 19
|Item 3.    | Defaults Upon Senior
 Securities                                                      | 20
|Item 4.    | [Removed and Reserved]                                                                | 20
|Item 5.    | Other Information                                                                     | 20
|Item 6.    | Exhibits                                                                              | 20
|SIGNATURES |                                                                                       | 21

2

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Table of Contents

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

Item 1. Financial Statements

|                             
|-----------------------------
|SOY ENERGY, LLC              
|(A Development Stage Company)
|                             
|Condensed Balance Sheets     

|                                                           |  |                   |            |                   |   |            |  
|---------------------------------------------------------- |  | ----------------- | ---------- | ----------------- | - | ---------- | -
|                                                           |  |                   |            |                   |  
|ASSETS                                                     |  | January 31,
 2011 |            | October 31,
 2010 |  
|                                                           |  |                   |            |                   |  
|                                                           |  | (Unaudited)       |            |                   |  
|                                                           |  |                   |            |                   |   |            |  
|Current Assets                                             |  |                   |            |                   |   |            |  
|Cash and equivalents                                       |  | $                 | 5,507,994  |                   | $ | 6,352,955  |  
|Certificates of deposit                                    |  |                   | 514,781    |                   |   |           |  
|Accrued interest receivable                                |  |                   | 12,754     |                   |   | 3,993      |  
|Prepaid costs and other                                    |  |                   | 84,231     |                   |   | 99,976     |  
|                                                           |  |                   |            |                   |  
|Total current assets                                       |  |                   | 6,119,760  |                   |   | 6,456,924  |  
|                                                           |  |                   |            |                   |   |            |  
|Property, Plant and Equipment                              |  |                   |            |                   |   |            |  
|Land and improvements                                      |  |                   | 502,176    |                   |   | 502,176    |  
|Buildings                                                  |  |                   | 3,272,616  |                   |   | 3,272,616  |  
|Equipment                                                  |  |                   | 6,242,987  |                   |   | 6,242,987  |  
|Accumulated depreciation                                   |  |                   | (6,441     | )                 |   | (5,954     | )
|                                                           |  |                   |            |                   |  
|Total                                                      |  |                   | 10,011,338 |                   |   | 10,011,825 |  
|Construction-in-progress                                   |  |                   | 3,425,380  |                   |   | 1,383,899  |  
|                                                           |  |                   |            |                   |  
|Net property, plant and equipment                          |  |                   | 13,436,718 |                   |   | 11,395,724 |  
|                                                           |  |                   |            |                   |   |            |  
|Other Assets                                               |  |                   |            |                   |   |            |  
|Assets held for sale                                       |  |                   | 2,300,380  |                   |   | 2,825,380  |  
|Escrow deposit                                             |  |                   | 6,680,336  |                   |   | 6,677,482  |  
|Debt service reserve                                       |  |                   | 150,106    |                   |   | 150,000    |  
|Debt issuance costs, net                                   |  |                   | 143,147    |                   |   | 148,257    |  
|                                                           |  |                   |            |                   |  
|Total other assets                                         |  |                   | 9,273,969  |                   |   | 9,801,119  |  
|                                                           |  |                   |            |                   |  
|                                                           |  |                   |            |                   |   |            |  
|Total Assets                                               |  | $                 | 28,830,447 |                   | $ | 27,653,767 |  
|                                                           |  |                   |            |                   |  
|                                                           |  |                   |            |                   |   |            |  
|LIABILITIES AND MEMBERS EQUITY                            |  |                   |            |                   |   |            |  
|                                                           |  |                   |            |                   |   |            |  
|Current Liabilities                                        |  |                   |            |                   |   |            |  
|Accounts payable                                           |  | $                 | 1,445,131  |                   | $ | 96,224     |  
|Accrued expenses                                           |  |                   | 167,279    |                   |   | 132,081    |  
|Current maturities of long-term debt                       |  |                   | 116,402    |                   |   |           |  
|                                                           |  |                   |            |                   |  
|Total current liabilities                                  |  |                   | 1,728,812  |                   |   | 228,305    |  
|                                                           |  |                   |            |                   |   |            |  
|Long-Term Debt, Net of Current Maturities                  |  |                   | 5,934,272  |                   |   | 6,050,048  |  
|                                                           |  |                   |            |                   |   |            |  
|Members Equity                                            |  |                   |            |                   |   |            |  
|Member contributions, 33,018 units issued
 and outstanding |  |                   | 31,031,572 |                   |   | 31,031,572 |  
|Deficit accumulated during development
 stage              |  |                   | (9,864,209 | )                 |   | (9,656,158 | )
|                                                           |  |                   |            |                   |  
|Total members equity                                      |  |                   | 21,167,363 |                   |   | 21,375,414 |  
|                                                           |  |                   |            |                   |  
|                                                           |  |                   |            |                   |   |            |  
|Total Liabilities and Members Equity                      |  | $                 | 28,830,447 |                   | $ | 27,653,767 |  
|                                                           |  |                   |            |                   |  

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

3

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Table of Contents

|                                  
|----------------------------------
|SOY ENERGY, LLC                   
|(A Development Stage Company)     
|                                  
|Condensed Statements of Operations

|                                                        |  |                                   |          |                                   |   |                                                     |   |   |             |  
|------------------------------------------------------- |  | --------------------------------- | -------- | --------------------------------- | - | --------------------------------------------------- | - | - | ----------- | -
|                                                        |  |                                   |          |                                   |   |                                                     |   |  
|                                                        |  | Three monthsendedJanuary 31, 2011 |          | Three monthsendedJanuary 31, 2010 |   | From Inception(December 15,2005) toJanuary 31, 2011 |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |  
|                                                        |  | (Unaudited)                       |          | (Unaudited)                       |   | (Unaudited)                                         |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |   |             |  
|Revenues                                                |  | $                                 |         |                                   | $ |                                                    |   | $ |            |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |   |             |  
|Operating Expenses                                      |  |                                   |          |                                   |   |                                                     |   |   |             |  
|General and administrative                              |  |                                   | 155,304  |                                   |   | 53,602                                              |   |   | 1,763,888   |  
|Professional fees                                       |  |                                   | 76,897   |                                   |   | 126,057                                             |   |   | 1,943,744   |  
|Impairment expense                                      |  |                                   |         |                                   |   |                                                    |   |   | 7,553,488   |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |  
|Total operating expenses                                |  |                                   | 232,201  |                                   |   | 179,659                                             |   |   | 11,261,120  |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |   |             |  
|Operating Loss                                          |  |                                   | (232,201 | )                                 |   | (179,659                                            | ) |   | (11,261,120 | )
|                                                        |  |                                   |          |                                   |   |                                                     |   |   |             |  
|Other Income (Expense)                                  |  |                                   |          |                                   |   |                                                     |   |   |             |  
|Interest income                                         |  |                                   | 19,734   |                                   |   | 13,139                                              |   |   | 1,405,845   |  
|Other income                                            |  |                                   | 4,416    |                                   |   |                                                    |   |   | 19,477      |  
|Interest expense                                        |  |                                   |         |                                   |   |                                                    |   |   | (28,411     | )
|                                                        |  |                                   |          |                                   |   |                                                     |   |  
|Total other income, net                                 |  |                                   | 24,150   |                                   |   | 13,139                                              |   |   | 1,396,911   |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |   |             |  
|Net Loss                                                |  | $                                 | (208,051 | )                                 | $ | (166,520                                            | ) | $ | (9,864,209  | )
|                                                        |  |                                   |          |                                   |   |                                                     |   |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |   |             |  
|Weighted Average Units Outstanding - Basic
 and Diluted |  |                                   | 33,018   |                                   |   | 33,018                                              |   |   | 24,155      |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |  
|                                                        |  |                                   |          |                                   |   |                                                     |   |   |             |  
|Net Loss Per Unit - Basic and Diluted                   |  | $                                 | (6.30    | )                                 | $ | (5.04                                               | ) | $ | (408.37     | )
|                                                        |  |                                   |          |                                   |   |                                                     |   |  

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

4

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Table of Contents

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

|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |   |             |  
|-------------------------------------------------------------------------------------------------- |  | -------------------------------- | --------- | -------------------------------- | - | ---------------------------------------------------- | - | - | ----------- | -
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|                                                                                                   |  | Three monthsendedJanuary 31,2011 |           | Three monthsendedJanuary 31,2010 |   | From Inception (December 15,2005) toJanuary 31, 2011 |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|                                                                                                   |  | (Unaudited)                      |           | (Unaudited)                      |   | (Unaudited)                                          |  
|Cash Flows from Operating Activities                                                               |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Net loss                                                                                           |  | $                                | (208,051  | )                                | $ | (166,520                                             | ) | $ | (9,864,209  | )
|Adjustments to reconcile net loss to net
 cash used for operating activities:                      |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Depreciation and amortization                                                                      |  |                                  | 487       |                                  |   | 444                                                  |   |   | 8,184       |  
|Impairment of long-lived assets                                                                    |  |                                  |          |                                  |   |                                                     |   |   | 7,553,488   |  
|Write off of construction services related
 to terminated agreement                                |  |                                  |          |                                  |   |                                                     |   |   | 50,000      |  
|Write off of debt issuance costs                                                                   |  |                                  |          |                                  |   |                                                     |   |   | 25,000      |  
|Non-cash interest income                                                                           |  |                                  | (2,960    | )                                |   |                                                     |   |   | (33,706     | )
|Expenses financed with long-term debt                                                              |  |                                  |          |                                  |   |                                                     |   |   | 50,048      |  
|Changes in operating assets and
 liabilities:                                                      |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Accrued interest receivable                                                                        |  |                                  | (8,761    | )                                |   | 1,322                                                |   |   | (12,754     | )
|Prepaid costs and other                                                                            |  |                                  | (107,752  | )                                |   | 2,638                                                |   |   | (112,728    | )
|Accounts payable                                                                                   |  |                                  | 38,326    |                                  |   | 64,433                                               |   |   | 73,915      |  
|Accrued expenses                                                                                   |  |                                  | 35,198    |                                  |   | 1,655                                                |   |   | 167,279     |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Net cash used for operating activities                                                             |  |                                  | (253,513  | )                                |   | (96,028                                              | ) |   | (2,095,483  | )
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Cash Flows from Investing Activities                                                               |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Capital expenditures                                                                               |  |                                  | (76,667   | )                                |   |                                                     |   |   | (14,869,132 | )
|Proceeds from disposal of property and
 equipment                                                  |  |                                  |          |                                  |   |                                                     |   |   | 1,725,000   |  
|Proceeds from disposal of assets held for
 sale                                                    |  |                                  |          |                                  |   | 4,951                                                |   |   | 5,818       |  
|Escrow deposits, net                                                                               |  |                                  |          |                                  |   |                                                     |   |   | (8,000,000  | )
|Payments for design services deposit                                                               |  |                                  |          |                                  |   |                                                     |   |   | (5,450,000  | )
|Refund of design services deposit                                                                  |  |                                  |          |                                  |   |                                                     |   |   | 3,300,000   |  
|Payments for construction deposit                                                                  |  |                                  |          |                                  |   |                                                     |   |   | (2,500,000  | )
|Refund of construction deposit                                                                     |  |                                  |          |                                  |   |                                                     |   |   | 2,450,000   |  
|Payments for certificates of deposit                                                               |  |                                  | (514,781  | )                                |   |                                                     |   |   | (2,464,781  | )
|Proceeds from maturing certificates of
 deposit                                                    |  |                                  |          |                                  |   |                                                     |   |   | 1,950,000   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Net cash (used for) provided by investing activities                                               |  |                                  | (591,448  | )                                |   | 4,951                                                |   |   | (23,853,095 | )
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Cash Flows from Financing Activities                                                               |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Payments for debt issuance costs                                                                   |  |                                  |          |                                  |   |                                                     |   |   | (175,000    | )
|Funding debt service reserve                                                                       |  |                                  |          |                                  |   |                                                     |   |   | (150,000    | )
|Members contributed capital                                                                       |  |                                  |          |                                  |   |                                                     |   |   | 31,968,000  |  
|Payments for offering costs                                                                        |  |                                  |          |                                  |   |                                                     |   |   | (186,428    | )
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Net cash provided by financing activities                                                          |  |                                  |          |                                  |   |                                                     |   |   | 31,456,572  |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Net (Decrease) Increase in Cash and
 Equivalents                                                   |  |                                  | (844,961  | )                                |   | (91,077                                              | ) |   | 5,507,994   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Cash and Equivalents at Beginning of Period                                                        |  |                                  | 6,352,955 |                                  |   | 19,826,065                                           |   |   |            |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Cash and Equivalents at End of Period                                                              |  | $                                | 5,507,994 |                                  | $ | 19,734,988                                           |   | $ | 5,507,994   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Supplemental Cash Flow Information                                                                 |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Capitalized interest paid                                                                          |  | $                                | 82,403    |                                  | $ |                                                     |   | $ | 215,959     |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Interest expense paid                                                                              |  | $                                |          |                                  | $ |                                                     |   | $ | 26,667      |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Supplemental Schedule of Noncash Investing
 and Financing Activities                               |  |                                  |           |                                  |   |                                                      |   |   |             |  
|Construction-in-progress in accounts
 payable                                                      |  | $                                | 1,310,581 |                                  | $ |                                                     |   | $ | 1,371,216   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Assets held for sale reclassified to
 construction-in-progress                                     |  | $                                | 525,000   |                                  | $ |                                                     |   | $ | 525,000     |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Amortization of loan fees, discounts and
 prepaid expenses capitalized as construction-in-progress |  | $                                | 34,233    |                                  | $ |                                                     |   | $ | 34,233      |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Prepaid costs reclassified to
 construction-in-progress                                            |  | $                                | 95,000    |                                  | $ |                                                     |   | $ | 95,000      |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Property and equipment financed with
 long-term debt                                               |  | $                                |          |                                  | $ |                                                     |   | $ | 6,000,000   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Assets held for sale reclassified to
 prepaid expenses                                             |  | $                                |          |                                  | $ |                                                     |   | $ | 95,000      |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Long-term debt issued to pay operating
 expenses                                                   |  | $                                |          |                                  | $ |                                                     |   | $ | 50,048      |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|Payment of construction-in-progress with
 escrow deposit                                           |  | $                                |          |                                  | $ |                                                     |   | $ | 1,323,264   |  
|                                                                                                   |  |                                  |           |                                  |   |                                                      |   |  
|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 Financial Statements are
an integral part of this Statement.

5

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Table of Contents

SOY ENERGY, LLC(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements
January 31, 2011

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, 2010, 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, 2011 and the results of operation and cash
flows for all periods present.

Nature of Business

Soy Energy, LLC, a development stage Iowa limited liability company,
(the Company) was originally organized to develop, own and operate a 30 million
gallon per year (MGY) production biodiesel facility between Cleghorn and
Marcus, Iowa in Cherokee County. The Company was formed December 15, 2005
to have a perpetual life. As of January 31, 2011, the Company is in the
development stage with its efforts being principally devoted to organizational
activities and construction of improvements to the Mason City, Iowa plant,
which will produce 30 MGY of biodiesel. The Company anticipates
construction completion and commencement of operations in August 2011.

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. The Company uses estimates and assumptions in accounting for
significant matters, among others, the carrying value of property, plant, and
equipment and related assumptions related to impairment testing and the
carrying value of assets held for sale. In addition, the Company estimates that
it has the necessary capital to finish the construction of improvements to get
the plant operational. Actual results may differ from previously estimated
amounts and such differences may be material to the financial statements.

Property, Plant and Equipment

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

Ordinary maintenance and repairs are expensed as incurred. Cost of
renewals and betterments are capitalized in appropriate property and equipment
accounts and depreciated as discussed above.

The Company capitalizes construction costs as construction-in-progress
until the assets are placed in service. The Company had
construction-in-progress of approximately $3,425,000 and $1,384,000 as of
January 31, 2011 and October 31, 2010, respectively, relating to the
Mason City, Iowa plant improvements.

Construction-in-Progress

The Company continues to make payments for the construction of a
30 MGY plant. The Company anticipates the construction will cost
approximately $9,303,000, including capitalized interest, insurance, and assets
previously held for sale now utilized in the construction, with approximately $5,877,000
remaining at January 31, 2011. The Company capitalized interest of
approximately $82,000, including amounts accrued, during the three months ended
January 31, 2011.

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SOY ENERGY, LLC(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements
January 31, 2011

Debt Issuance Costs

The Company had debt issuance costs of approximately $143,000 and
$148,000 at January 31, 2011 and October 31, 2010, respectively.
Accumulated amortization at January 31, 2011 and October 31, 2010 was
approximately $6,900 and $1,700, respectively. The amortization expense related
to the debt issuance costs for the fiscal year 2010 was approximately $1,700.
The Company capitalized the amortization of debt issuance costs as part of the
construction-in-progress during the three months ended January 31, 2011 of
approximately $5,200.

Long-Lived Assets

The Company reviews its long-lived assets, such as property, plant and
equipment for impairment whenever events or changes in circumstances indicate
the carrying amount of an asset may not be recoverable. If circumstances
require a long-lived asset be tested for possible impairment, the Company first
compares undiscounted cash flows expected to be generated by an asset to the
carrying value of the asset. If the carrying value of the long-lived asset is
not recoverable on an undiscounted cash flow basis, impairment is recognized to
the extent that the carrying value exceeds its fair value. Fair value is
determined through various valuation techniques including discounted cash flow
models, quoted market values and third-party independent appraisals, as
considered necessary. The Company reviews assets held for sale at each
reporting date to determine that the carrying value is equal or greater than
the estimated net selling price.

Fair Value of Financial Instruments

The Company follows guidance for accounting for fair value measurements
of financial assets and financial liabilities and for fair value measurements
of nonfinancial items that are recognized or disclosed at fair value in the
financial statements on a recurring basis. Additionally, the Company adopted
guidance for fair value measurement related to nonfinancial items that are
recognized and disclosed at fair value in the financial statement on a
nonrecurring basis. The guidance establishes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to measurements involving significant unobservable inputs
(Level 3 measurements). The three levels of the fair value hierarchy are as
follows:

| |   |                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | Level 1
 inputs are quoted prices (unadjusted) in active markets for identical assets
 or liabilities that the Company has the ability to access at the measurement
 date.
| |   |                                                                                                                                                                           
| | - | Level 2
 inputs are inputs other than quoted prices included within Level 1 that are
 observable for the asset or liability, either directly or indirectly.               
| |   |                                                                                                                                                                           
| | - | Level 3
 inputs are unobservable inputs for the asset or liability.                                                                                                       

The level in the fair value hierarchy within which a fair value
measurement in its entirety falls is based on the lowest level input that is
significant to the fair value measurement in its entirety.

The Company believes the carrying value of cash and equivalents, escrow
deposit, debt service reserve, accounts payable, and other working capital
items approximate fair value due to the short maturity nature of these instruments.
The Company believes the carrying amount of the long-term debt approximates the
fair value due to terms of the debt approximating the current market interest
rates.

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SOY ENERGY, LLC(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements
January 31, 2011

2. LIQUIDITY

The Company is a developmental stage company and has no operating
revenues. The Company has a biodiesel facility in Mason City, Iowa and is in
the process of constructing improvements to the plant. The Company anticipates
that operations will commence in August 2011 and believes current cash reserves
will be sufficient to fund construction and fund all of operations through
January 2012 without additional financing.

3. ASSETS HELD FOR SALE

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

Amounts included in assets held for sale are as follows:

|                                              |  |                    |           |                     |   |           | 
|--------------------------------------------- |  | ------------------ | --------- | ------------------- | - | --------- | 
|                                              |  | January 31, 
 2011 |           | October 31, 
 2010* |  
|                                              |  |                    |           |                     |  
|Land                                          |  | $                  | 250,262   |                     | $ | 250,262   | 
|Equipment                                     |  |                    | 2,050,118 |                     |   | 2,575,118 | 
|                                              |  |                    |           |                     |   |           | 
|                                              |  |                    |           |                     |   |           | 
|Total assets
 held for sale                   |  | $                  | 2,300,380 |                     | $ | 2,825,380 | 
|                                              |  |                    |           |                     |   |           | 
|                                              |  |                    |           |                     |   |           | 
|* Derived
 from audited financial statements. |  |                    |           |                     |   |           | 

4. LONG-TERM DEBT

The Company has a term loan for $6,000,000 with a financial institution
with a fixed rate of 5.0% until October 2016. The interest rate will then
adjust to the greater of the five-year LIBOR swap rate plus 3.5% or 5.0%. The
Company makes monthly interest only payments on the term loan until
November 1, 2011, followed by 120 monthly principal and interest payments
sufficient to fully amortize the principal balance at maturity in September
2021.

The Company has a non-interest bearing note with the same financial
institution for $77,595 and will be due in full in September 2021. The carrying
value of the loan is shown net of unamortized discount of $26,921 and $27,547
as of January 31, 2011 and October 31, 2010, respectively, and is
calculated using a 5.0% market interest rate. The unamortized discount will be
recognized in interest expense over the life of the loan.

The loans are secured by substantially all business assets and are subject
to various financial and non-financial covenants that limit distributions,
capital expenditures, and require minimum debt service coverage requirements.
The Company negotiated a change to the loan agreements with the financial
institution in March 2011 whereby a covenant calculation was clarified as well
as certain defined terms.

Amounts included in long-term debt are as follows.

|                                              |  |                    |           |                     |   |           | 
|--------------------------------------------- |  | ------------------ | --------- | ------------------- | - | --------- | 
|                                              |  | January 31, 
 2011 |           | October 31, 
 2010* |  
|                                              |  |                    |           |                     |  
|Term loan                                     |  | $                  | 6,000,000 |                     | $ | 6,000,000 | 
|Term loan                                     |  |                    | 50,674    |                     |   | 50,048    | 
|                                              |  |                    |           |                     |   |           | 
|Total
 long-term debt                         |  | $                  | 6,050,674 |                     | $ | 6,050,048 | 
|Less current
 maturities                      |  |                    | 116,402   |                     |   |          | 
|                                              |  |                    |           |                     |   |           | 
|                                              |  |                    |           |                     |   |           | 
|                                              |  | $                  | 5,934,272 |                     | $ | 6,050,048 | 
|                                              |  |                    |           |                     |   |           | 
|                                              |  |                    |           |                     |   |           | 
|* Derived
 from audited financial statements. |  |                    |           |                     |   |           | 

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SOY ENERGY, LLC(A Development Stage Company)

Notes to Unaudited Condensed Financial
Statements
January 31, 2011

The estimated
maturities of long-term debt, net of unamortized discount, at January 31,
2011 are as follows:

|           |  |   |           | 
|---------- |  | - | --------- | 
|2012       |  | $ | 116,402   | 
|2013       |  |   | 480,402   | 
|2014       |  |   | 504,980   | 
|2015       |  |   | 530,816   | 
|2016       |  |   | 557,973   | 
|Thereafter |  |   | 3,860,101 | 
|           |  |   |           | 
|           |  |   |           | 
|Total      |  | $ | 6,050,674 | 
|           |  |   |           | 

5. COMMITMENTS AND CONTINGENCIES

Construction Agreement

On August 11, 2010, the Company entered into a construction
agreement with an unrelated party (contractor) for the design and construction
of modifications of the Mason City, Iowa biodiesel facility allowing for the
use of multiple feedstocks. Substantial completion of the work shall be
achieved no later than 270 days after the date of notice to proceed has been
delivered. The notice to proceed was delivered on October 1, 2010, so the date
of which substantial completion of the work to be achieved is July 1,
2011. If not completed within 45 days, August 15, 2011, after the
scheduled substantial completion date, the contractor shall pay the Company
$5,500 per day up to, but not exceeding, $350,000. The Guaranteed Maximum Price
of the project is $8,350,000. The amount of the Guaranteed Maximum Price was
deposited in to an escrow account, as disclosed above, to be drawn upon as work
progresses. The Company may terminate the agreement with seven days notice upon
written request without cause; however, the contractor is due any amounts
incurred for work completed. The Company may terminate the agreement with cause
with seven days notice whereby any unpaid work done by the contractor will
only be paid to the extent the Companys costs and expenses to complete the
project are less than the unpaid balance of the Cost of the Work. If the costs
and expenses to complete the project exceed the Cost of the Work the contractor
shall pay the excess. The Company had incurred approximately $2,694,000 on this
contract as of January 31, 2011, which is included in construction-in-progress.

Marketing Agreement

On August 12, 2010, the Company entered into a marketing agreement
with an unrelated party whereby the marketer would sell and market all of the
biodiesel produced by the Company. In the event that the Company is not
producing biodiesel by July 15, 2011 either company shall have the option
to terminate the agreement with 21 days written notice. The Company shall pay
the marketer a fee. The agreement shall commence on the effective date,
August 12, 2010, and has an initial term with options to renew for
additional terms. If either party breaches the contract, the other party may
terminate the agreement if the breach is not cured within 30 days of
written notice. This agreement may also be terminated by mutual consent of both
parties.

6. SUBSEQUENT EVENTS

On February 3, 2011, the Company entered into a development
agreement with the City of Mason City, Iowa providing for the payment of
semi-annual Tax Increments to the Company for 5 years, beginning
December 1, 2012, on the construction of the existing facility and
8 years, beginning December 1, 2013, on the expansion of the existing
facility totaling up to, but not to exceed, approximately $623,000. The
agreement provides for a new water main extension to the development property
estimated to cost approximately $120,000 of which 25% of the cost will be paid
by the City of Mason City and the remaining 75% will be paid using funds held
in the Holdback Escrow Account. Additionally, the Company has agreed to meet
certain employment related hiring and retention requirements through
December 31, 2021.

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

We prepared
the following discussion and analysis to help you better understand our
financial condition, changes in our financial condition, and results of
operations for the three month period ended January 31, 2011. 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, 2010.

Forward Looking Statements

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

| |   |                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Overcapacity within the biodiesel industry;                                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Our ability to successfully install equipment to make the Mason City
 biodiesel production facility a multi-feedstock capable plant;                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Our ability to effectively operate the Mason City biodiesel
 production facility and manage our business;                                                                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Changes in our business strategy, capital improvements or development
 plans;                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Availability and costs of feedstock, particularly soy oil, animal
 fats and corn oil;                                                                                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Changes in the price and market for biodiesel and glycerin;                                                                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Actual biodiesel and glycerin production varying from expectations;                                                                                                                                                                                                                             
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Changes in or elimination of governmental laws, tariffs, trade or
 other controls or enforcement practices such as national, state or local
 energy policy; federal biodiesel tax incentives; or environmental laws and
 regulations that apply to the Mason City biodiesel production facility;
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Changes in the weather or general economic conditions impacting the
 availability and price of vegetable oils and animal fats;                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Total U.S. consumption of diesel;                                                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Weather changes, strikes, transportation or production problems
 causing supply interruptions or shortages affecting the availability and
 price of feedstock;                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Changes in plant production capacity or technical difficulties in
 operating the Mason City biodiesel production facility;                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Changes in interest rates or the availability of credit;                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Our ability to generate free cash flow to invest in our business;                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Our potential liability resulting from future litigation;                                                                                                                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                                                 
| |  | General economic conditions;                                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Ability to sell assets held for sale at their carrying value minus
 selling costs;                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Changes and advances in biodiesel production technology;                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Restrictive covenants in our Loan Agreement;                                                                                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Competition from other alternative fuels; and                                                                                                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                                 
| |  | Other factors described elsewhere in this report.                                                                                                                                                                                                                                               

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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.

Overview

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

When the
economy went into a recession, management determined in October 2008 that
building this smaller biodiesel plant was not likely feasible. Therefore, we
then began exploring possibilities to use our assets to merge with or invest in
a company that has already completed construction of a biodiesel plant, rather
than constructing our own plant. 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 current
carrying 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 of our company. 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, 2011, we have incurred accumulated losses of
approximately $9,864,000.

On July 29,
2009, we entered into an Asset Purchase Agreement (APA) with Freedom Fuels,
LLC, an Iowa limited liability company (Freedom Fuels), which was in Chapter
11 bankruptcy and owned a biodiesel plant in Mason City, Iowa (the Mason City
biodiesel production facility). Pursuant to the APA, we would acquire
substantially all of Freedom Fuels assets in exchange for $9,000,000 in cash,
an agreement assigning to Freedom Fuels all of our right, title and interest in
the debtor in possession loans and an agreement assigning to Freedom Fuels all
of our right, title and interest in the dividend cash flow note of $2,000,000
issued by a to-be-created Freedom Fuels investor entity to us.

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

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

We and OSM
made customary representations, warranties and covenants in the Asset Purchase
Agreement. Among other conditions, the closing of the Transaction was
conditioned upon a $6,000,000 loan to us from OSM to use to purchase the
assets. The terms of the financing are described below. In addition, the
Transaction was subject to approval by our unitholders before the closing on
the Transaction and such unitholder approval was obtained at our annual member
meeting on June 24, 2010.

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On August
13, 2010, we entered into an Amendment to the Asset Purchase Agreement with OSM
(the Amendment). The purpose of the Amendment was to modify the definition of
Closing Deadline to extend such date to September 27, 2010.

On
September 27, 2010, we entered into a Second Amendment to the Asset Purchase
Agreement with OSM (the Second Amendment). The purpose of the Second
Amendment was to modify the definition of Closing Deadline to extend such date
to September 30, 2010.

We entered
into a Construction and Design Agreement (the Construction Agreement) with
Ball Industrial Services, LLC and Ball Construction Services, LLC (collectively,
Ball) effective August 11, 2010. Under the Construction Agreement, Ball will
provide design, engineering, procurement, testing, training, and construction
services and labor, materials, supplies and equipment for modifications to the
Mason City biodiesel production facility to allow it to produce biodiesel using
multiple feedstocks.

Ball
guaranteed that all of the work will be new (unless otherwise approved by us),
of good quality, in conformance with the Construction Agreement and all legal
requirements, and free of defects in materials and workmanship. For one year
from substantial completion, Ball will correct any work that does not conform
to the requirement of the Construction Agreement. If the biodiesel production
facility fails to perform due to defective work, the one-year period will be
extended one day for each day that the biodiesel production facility is not
operating due to the defective work. The Construction Agreement states that
Ball will not be liable to the Company for any special, punitive, incidental,
indirect or consequential damages arising from the breach of any warranty.

On
September 23, 2010, we entered into an amendment to the Construction and Design
Agreement with Ball. The purpose of this amendment was to extend the time the
Company had to close on its proposed purchase of the Mason City biodiesel
production plant, without the Construction Agreement terminating, to October 1,
2010.

On April 2,
2010, we entered into a Loan Agreement with OSM (the Loan Agreement). Subject
to the terms of the Loan Agreement, OSM agreed to lend us $6,000,000 to be used
to acquire the Mason City biodiesel production facility. The initial interest
rate is 5%. In October 2016, the interest rate will adjust to the 5-year
LIBOR/swap rate plus 3.5%, with a floor of 5%. During the first year of the
loan, we will be required to only pay interest on outstanding amounts.
Beginning in November 2011, we will make principal and interest payments
amortized over a ten-year period, with maturity of the note in 2021.

On
September 30, 2010, we entered into an Amended and Restated Loan Agreement with
OSM. The purpose of amending and restating the Loan Agreement was to address
certain items related to closing on the loan and to address additional details
related to the Construction Agreement and our anticipated biodiesel production
facility modifications to make it multi-feedstock capable.

On
September 30, 2010 we closed on the Transaction. We gave Ball notice on October
1, 2010 to proceed with the construction and installation of front end
equipment to make the Mason City biodiesel production facility multi-feedstock
capable. As of January 31, 2011, there was approximately $3,491,000 in
construction-in-progress.

On March 18, 2011, we entered into a
first amendment to the loan agreements with OSM, whereby certain defined terms
related to a covenant calculation were clarified.

To date, we
have not generated any revenues and we do not anticipate generating any
revenues until we complete the modifications at the Mason City biodiesel
production facility and begin operations. Since we have not commenced any
operations, we do not yet have comparable income, production or sales data.

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Liquidity and Capital Resources

We expect
to spend the next 12 months (i) installing equipment on the Mason City
biodiesel production facility to make it multi-feedstock capable; and (ii)
beginning our operations of the Mason City biodiesel production facility. We do
not anticipate raising additional equity capital in the next 12 months.
However, in the event our equity reserves and debt are not adequate to
recommence and continue operations of the Mason City biodiesel production
facility, we may be forced to do so. We also plan to use approximately
$8,350,000 of our equity reserves to install the front end equipment on the
Mason City biodiesel production facility so that it will be multi-feedstock
capable. As of January 31, 2011 there is approximately $3,491,000 in
construction-in-progress towards this equipment installation. Should we be
unsuccessful in our operation of the Mason City biodiesel production facility,
our project may fail and we may be dissolved. If we are dissolved, our assets
will be distributed pursuant to our operating agreement.

Currently,
progress on the construction at the Mason City biodiesel production facility
includes the pouring of the footings for the addition and the pouring of the
containment dike. Two field tanks have been erected and are being constructed.
We estimate approximately 37% of the work is complete as of February 28, 2011.
We estimate we will begin production in  August 2011.

On February
3, 2011, we entered into a development agreement with the City of Mason City,
Iowa this agreement provides for the payment of semi-annual tax increments to
us for 5 years, beginning December 1, 2012, related to the initial construction
of the Mason City biodiesel production facility and 8 years, beginning December
1, 2013, based on the equipment installation at the Mason City biodiesel
production facility, totaling up to, but not to exceed, approximately $623,000.
The agreement provides for a new water main extension to our site estimated to
cost approximately $120,000, of which 25% of the cost will be paid by the City
of Mason City and the remaining 75% will be paid using funds held in our
Holdback Escrow Account. Additionally under the development agreement, we have
agreed to meet certain employment requirements related to hiring and retention
through December 31, 2021.

We
anticipate the success of our operation of the Mason City biodiesel production
facility will be dependent upon several factors. First, we will be dependent
upon Ball to successfully install the front end equipment on the Mason City
biodiesel production facility, so that we can effectively utilize a variety of
feedstocks, and, specifically, corn oil. We may have difficulties getting the
additional equipment to operate smoothly with the current plant technology.
Then we will need to be able to find an adequate and cost-effective supply of
corn oil to use to produce our biodiesel. We anticipate that we will be able to
obtain corn oil largely from local ethanol plants. However, this will require
us to enter into agreements with such ethanol plants and we may be unable to
enter into the necessary number of agreements or such agreements may be on
terms unfavorable to us. Additionally, ethanol plants that are presently
producing corn oil as a by-product may cease such production in the future as a
result of patent infringement litigation related to the corn oil technology
many ethanol plants are currently using. We may decide to enter into joint
ventures with ethanol plants to encourage them to install corn oil equipment on
their plants, but this means we will also assume some of the risk.

Finally, we
will be dependent upon our marketer to sell our biodiesel at profitable prices.
On August 12, 2010, we entered into a biodiesel marketing agreement with RPMG
(Marketing Agreement). Pursuant to the terms of the Marketing Agreement, we
agreed that RPMG will market all of the biodiesel we may produce at the Mason
City biodiesel production facility during the term of the Marketing Agreement,
subject to our right to enter into tolling arrangements that will not be
subject to the Marketing Agreement. If we have not commenced operations at the
Mason City biodiesel production facility on or before July 15, 2011, then
either party may terminate the Marketing Agreement upon twenty-one (21) days
written notice to the other party.

RPMG will
be responsible for and shall bear the risk of loss of all biodiesel marketed
for us from the time the biodiesel crosses the loading flange at the Mason City
biodiesel facility and the common carrier or customer accepts for loading the
biodiesel at the Mason City biodiesel facility in either a railcar, tank truck
or other transport vehicle.

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Site Acquisition and Development

We
purchased approximately 35 acres for our plant site near Marcus, Iowa in
Cherokee County. In August 2007, we commenced construction of our 30 million
gallon per year 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. We may
be unable to sell the Marcus site and the construction completed at a profit,
or at all. Due to the significant changes we made to our project, we recorded
an impairment charge during our quarter ended October 31, 2008 in the value of
constructed and construction in process assets of approximately $6,923,000, a
portion of which is from the site we purchased. Additionally, as we have not
sold the assets being held, we recorded an additional impairment charge of
approximately $631,000 during the fiscal year ended October 31, 2010. We feel
the Marcus site is an attractive site for development and we are actively
looking for a buyer for the Marcus site. We have made some contacts with
potential buyers.

In
connection with our purchase of the Mason City biodiesel production facility,
we purchased approximately forty-five acres upon which the biodiesel production
facility sits. Mason City is in north central Iowa. The site was a portion of
the purchase price under the Asset Purchase Agreement with OSM.

Trends and Uncertainties Impacting the
Biodiesel Industry and Our Future Operations

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

We
anticipate our revenues will consist of sales of biodiesel and glycerin from
the Mason City biodiesel production facility. We expect biodiesel sales to
constitute the bulk of our revenues. Although the price of diesel fuel has
increased over the last several years, diesel fuel prices per gallon remain at
levels below or equal to the price of biodiesel. In addition, other more
cost-efficient domestic alternative fuels may be developed and displace
biodiesel as an environmentally-friendly alternative. If diesel prices do not
continue to increase or a new fuel is developed to compete with biodiesel, it
may be difficult to market biodiesel, which could result in the loss of some or
all of the value of our units. Further, many biodiesel production facilities
have ceased production due to lack of demand for biodiesel, and the industry
will need to continue to grow demand to offset the increased supply brought to
the market place if and when these facilities re-start production in the
future.

We expect
to benefit from federal and state biodiesel supports and tax incentives,
however, these benefits may be subject to the applicability of such supports
and tax incentives to our operation of the Mason City biodiesel production
facility. 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.

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 545 million gallons. According to Reuters, 2010
production decreased by 20%, posting only fifty percent (50%) of the 2008
biodiesel output. This reduction was likely largely related to the recession
and the related credit crisis. We believe this increase in biodiesel supply,
reduction in demand, and the loss of the biodiesel tax credit (until it was
reinstated at the end of 2010 for 2011 and made retroactive for 2010) have
forced some biodiesel producers to cut back production or cease production
altogether. The combination of additional supply and stagnant or reduced demand
may damage our ability to generate revenue and maintain positive cash flows
should we reach the point where we begin operating the Mason City biodiesel
production facility.

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Table of Contents

Renewable
Fuels Standard

The Energy
Policy Act of 2005 created the Renewable Fuel Standard (RFS) which required
refiners to use 7.5 billion gallons of renewable fuels by 2012. The Energy
Independence and Security Act of 2007 (EISA) expanded the existing RFS to
require the use of 9 billion gallons of renewable fuel in 2008, increasing to
36 billion gallons of renewable fuel by 2022 (RFS2). The RFS2 requires that 600
million gallons of renewable fuel used in 2009 must come from advanced biofuels
other than corn-based ethanol, such as ethanol derived from cellulose, sugar or
crop residue and biomass-based diesel (which includes biodiesel and renewable
diesel), increasing to 21 billion gallons in 2022. The RFS2 further includes a
requirement that 500 million gallons of biodiesel and biomass-based diesel fuel
be blended into the national diesel pool in 2009, gradually increasing to one
billion gallons by 2012. However, in November 2008, the EPA announced that the
RFS2 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 the 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 did 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. We anticipate that
there will again be a roll-over of some of the 2010 requirement into 2011 and
also that some of the cellulosic requirements that cannot be achieved due to
lack of technology may be allowed to be filled by biodiesel. Thus, we
anticipate that biodiesel requirements under the 2011 RFS2 may exceed the
previously set 800 million gallon requirement for 2011. According to The
Biodiesel Magazine website, cellulosic biofuel and biomass-based diesel
consumed beyond the 2011 minimum thresholds will be credited towards the
advanced biofuel and total renewable fuel volume requirements.

Part of
RFS2 required that advanced biofuels reduce life cycle greenhouse gas emissions
by 50% relative to gasoline sold or distributed in transportation. In May 2009,
the EPA proposed rules that took into account indirect land use changes when
calculating greenhouse gas emissions. Based on the EPAs preliminary findings,
soy-based biodiesel was found to reduce greenhouse gas emissions by only 22%,
which would disqualify it from counting towards the RFS2. Biodiesel from animal
fat was found to reduce greenhouse gas emissions by approximately 80%. The EPA
did not measure biodiesel produced from corn oil. 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.

The RFS2
program gained additional certainty when on December 21, 2010, a lawsuit
challenging the RFS2 regulations was dismissed. We anticipate that the RFS2 may
increase demand for biodiesel in the long-term, as it sets a minimum usage
requirement for biodiesel and other types of biomass-based diesel. However,
there can be no assurances that demand for biodiesel will be increased by the
RFS2. As of March 7, 2011, the Biodiesel Magazine website estimated that
national biodiesel production capacity was approximately 2.84 billion gallons
per year, which already exceeds the 2012 biodiesel and biomass-based diesel use
mandate contained in the EISA. Accordingly, there is no assurance that
additional production of biodiesel and biomass-based diesel will not
continually outstrip any additional demand for biodiesel that might be created
by this new law. We also anticipate that the expanded RFS2 will be primarily
satisfied by ethanol, including both corn-based and other types of ethanol. The
amount of corn-based ethanol that may be used to satisfy the RFS2 requirements
is capped at 15 million gallons starting in 2015 and, accordingly, other types
of ethanol, including cellulose-based ethanol, will likely be used to satisfy
any requirements over and above the 15 million gallon corn-based ethanol cap.
Because the biodiesel tax credit was only recently reinstated and extended, we
are still not certain if these measures in conjunction with each other will be
enough to re-stimulate the biodiesel market.

Biodiesel Tax Credit

The
American Jobs Creation Act of 2004 originally created the biodiesel blenders
excise tax credit under the Volumetric Ethanol Excise Tax Credit (VEETC).
Known as the biodiesel tax credit, it provided a tax credit of $1.00 per gallon
for biodiesel. The biodiesel 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 biodiesel tax credit was to streamline the
use of biodiesel and encourage petroleum blenders to blend biodiesel as far
upstream as possible, which will allow more biodiesel to be used in the
marketplace. The biodiesel tax credit also streamlined 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 biodiesel credit expired on December 31, 2009. Only in
December 2010 was the biodiesel tax credit reinstated retroactively for 2010
and extended through December 31, 2011. Due to the recent nature of this
change, it remains uncertain whether a one year extension of the biodiesel tax
credit will be sufficient to stimulate demand for biodiesel. Moreover, we will
not benefit from the retroactive application of the biodiesel tax credit in
2010, because we did not operate during 2010.

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Commodity Credit Corporation Bioenergy Program

The Farm,
Nutrition and Bioenergy Act of 2008 reauthorized the Commodity Credit
Corporation, or CCC, Bioenergy Program. The program provides $55.0 million in
funding in both 2009 and 2010, $85.0 million in funding in 2011 and $105.0
million in funding in 2012 for producers of advanced biofuels derived from
renewable biomass, including biodiesel, other than corn kernel. Biodiesel
producers must apply for this credit and will be paid based on the quantity and
duration of advanced biofuels production and on net nonrenewable energy content
of the advanced biofuel. Funding to a single eligible producer may be limited
to ensure equitable distribution of funding. Producers with production capacity
of less than 150 million gallons will be eligible for 95% of the funds provided
under the program.

State Legislation

Several
states, including Iowa, are currently researching and considering legislation
to increase the amount of biodiesel used and produced in their states.
Minnesota was the first state to mandate biodiesel use. The Minnesota
legislation, which became effective in September 2005, required that all diesel
fuel sold in the state contain a minimum of 2% biodiesel. In 2008, Minnesota
passed additional legislation to increase biodiesel content of diesel fuel sold
in the state from 2% to 20%, which is the highest in the nation, by 2015. In
2009, Minnesota increased its biodiesel blend requirements to mandate all
diesel fuel contain a minimum of 5% biodiesel, however; the state has
occasionally had to suspend this requirement during winter months, due to cold
flow concerns. Similarly, in July 2008, Massachusetts signed a law that
requires all home heating oil and diesel fuel in the state to consist of 2%
biodiesel by 2010 and 5% biodiesel by 2013. However, the Massachusetts
Department of Energy Resources will be entitled to delay those requirements if
it determines that fuels are not available to meet these requirements.

Originally
passed in May 2006, and updated in 2009, Iowa passed legislation that creates a
renewable fuels standard (IRFS) that requires 10% of the fuel used in Iowa to
be from renewable sources by 2009 and increasing the renewable fuel standard to
25% by 2021. While this does not require biodiesel use, it may significantly
increase renewable fuels use in Iowa, which may include increased biodiesel use
in Iowa. The Iowa legislation includes tax credits to help retailers meet this
requirement.

For
example, Iowa provides for an incentive of three cents per gallon of biodiesel
sold for retailers who sell at least 50% biodiesel blends. This incentive,
known as the Biodiesel Blended Fuel Tax Credit, is also expected to support
biodiesel sales and production. This incentive is set to expire in 2012.

In
addition, in 2009, Iowa passed the Ethanol Promotion Tax Credit, which began in
2009 and ends after calendar year 2020. The incentive each site is eligible for
will be directly tied to the IRFS schedule with amounts to be paid only for
pure ethanol gallons (E100). The law allows pure biodiesel gallons (B-100)
to count toward achieving the threshold schedule. However, biodiesel gallons
are not eligible for these credits; as they are covered by the Biodiesel Blended
Fuel Tax Credit. The schedule is based on E-100 plus B-100 divided by total
gasoline gallons. The amount of the credit will be determined each year using:

| |                                                                                           |                                                                                          
| | ----------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
| | o                                                                                         | 6.5 cents
 per gallon of E100 if retailer meets the biofuel standard threshold percentage
| |                                                                                           |                                                                                          
| | o                                                                                         | 4.5 cents
 per gallon of E100 if retailer is within 1-2% of threshold percentage         
| |                                                                                           |                                                                                          
| | o                                                                                         | 2.5 cents
 per gallon of E100 if retailer is within 3-4% of threshold percentage         
| |                                                                                           |                                                                                          
| | o                                                                                         | 0 cents if
 more than 4% below the threshold percentage                                  
| |                                                                                           |                                                                                          
| | We anticipate
 this program may also support biodiesel demand and growth in our industry.

Other
states have enacted legislation to encourage (but not require) biodiesel
production and use. Several states provide tax incentives and grants for
biodiesel-related studies and biodiesel production, blending, and use. In
addition, several governors have issued executive orders directing state
agencies to use biodiesel blends to fuel their fleets.

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Table of Contents

Future Legislation

Environmental
regulations that may affect our company change frequently. It is possible that
the government could adopt more stringent federal or state environmental rules
or regulations, which could increase our operating costs and expenses. The
government could also adopt federal or state environmental rules or regulations
that may have an adverse effect on the use of biodiesel. Furthermore, the
Occupational Safety and Health Administration (OSHA) governs our plant
operations. OSHA regulations may change such that the costs of the operation of
the plant may increase. Any of these regulatory factors may result in higher
costs or other adverse effects on our operations, cash flows and financial
performance. These adverse effects could decrease or eliminate the value of our
units.

Quarterly Financial Results

At January
31, 2011, we had total assets of approximately $28,896,000 consisting primarily
of cash and equivalents, property, plant and equipment, assets held for sale
and escrow deposits. At January 31, 2011, we had current liabilities of
approximately $1,794,000 consisting of our accounts payable, current maturities
of long-term debt, and other accrued expenses. Total members equity at January
31, 2011 was approximately $21,167,000. Since our inception, we have generated no
revenue from operations. For the three months ended January 31, 2011, we had a
net loss of approximately $208,000.

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

On April 2,
2010, we entered into a Loan Agreement with OSM. Subject to the terms of the
Loan Agreement, OSM agreed to lend us $6,000,000 to be used to acquire the
Mason City biodiesel production facility. The initial interest rate is 5%. In
October 2016, the interest rate will adjust to the 5-year LIBOR/swap rate plus
3.5%, with a floor of 5%. During the first year of the loan, we will be
required to only pay interest on outstanding amounts. Beginning in November
2011, we will make principal and interest payments amortized over a ten-year
period, with maturity of the note in 2021.

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

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

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Table of Contents

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

| |   |                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------
| |  | our failure
 to make the required principal and interest payments;                                                
| |   |                                                                                                                   
| |  | if any
 representation or warranty made by us proves to be materially misleading or
 untrue;                      
| |   |                                                                                                                   
| |  | our failure
 to comply with the terms of the Loan Agreement;                                                      
| |   |                                                                                                                   
| |  | the
 destruction of the Mason City biodiesel production facility;                                                 
| |   |                                                                                                                   
| |  | cessation of
 making certain improvements to the biodiesel plant required by OSM;                                 
| |   |                                                                                                                   
| |  | our failure
 to comply with certain requirements of governmental bodies;                                          
| |   |                                                                                                                   
| |  | if we have
 unsatisfied judgments against us that exceed $150,000 for 30 days or more;                            
| |   |                                                                                                                   
| |  | if we file
 for bankruptcy or cease to exist as a legal entity;                                                   
| |   |                                                                                                                   
| |  | if we fail
 to comply with all covenants;                                                                         
| |   |                                                                                                                   
| |  | if we are
 unable to pay our debts when due;                                                                      
| |   |                                                                                                                   
| |  | if we are in
 default under a material contract or lose a permit or material contract
 necessary for our business;
| |   |                                                                                                                   
| |  | if we are in
 default under any agreement with OSM; or                                                            
| |   |                                                                                                                   
| |  | if we are in
 default with respect to any other indebtedness.                                                     

On
September 30, 2010, we entered into an Amended and Restated Loan Agreement with
OSM. The purpose of amending and restating the Loan Agreement was to address
certain items related to closing on the loan and to address additional details
related to the Construction and Design Agreement and our anticipated biodiesel
production facility modifications to make it multi-feedstock capable.

On March
18, 2011, we entered into a  first amendment to the loan agreements with OSM,
whereby certain defined terms related to a covenant calculation were clarified.

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 to us in the event we begin
operations at the Mason City biodiesel production facility. Some combinations
of programs are mutually exclusive.

Critical Accounting Estimates

Management
uses various 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. Accounting estimates that are the most important to the presentation
of our results of operations and financial condition, and which require the
greatest use of judgment by management, are designated as our critical
accounting estimates. We have the following critical accounting estimates:          We review long-lived assets for
impairment whenever events or changes in circumstances indicate that the
related carrying amounts may not be recoverable. Impairment testing for assets
requires various estimates and assumptions, including an allocation of cash
flows to those assets and, if required, an estimate of the fair value of those
assets. We review assets held for sale at each reporting date to determine that
the carrying value is equal to or greater than the estimated net selling price.
The carrying value of assets held for sale is based on the ability to sell or utilize
these assets. Our estimates are based upon assumptions believed to be
reasonable, but which are inherently uncertain and unpredictable. These
valuations require the use of managements assumptions, which do not reflect
unanticipated events and circumstances that may occur.

Off-Balance Sheet Arrangements

We do not have any off-balance
sheet arrangements.

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Table of Contents

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 4. Controls and Procedures

Disclosure Controls and Procedures

Our
management, including our Chief Executive Officer (the principal executive
officer) Charles Sand, along with our Chief Financial Officer (the principal
financial officer) Dallas Thompson, have reviewed and evaluated the effectiveness
of our disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934, as amended) as of January 31, 2011. Based
upon this review and evaluation, these officers have concluded that our
disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

Our
management, including our principal executive officer and principal financial
officer, have reviewed and evaluated any changes in our internal control over
financial reporting that occurred during the period ended January 31, 2011 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.

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Table of Contents

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,
2011. 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, 2011.

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.                                     |  |        | (8,593,000 | )(2)
|Estimated Proceeds Used in Development and Purchase of biodiesel
 facility in Mason City, Iowa.                                     |  |        | (7,254,000 | )   
|Proceeds used to purchase the Mason City biodiesel production
 facility                                                             |  |        | (4,000,000 | )(3)
|Estimated Proceeds Used in Construction of Improvements at Mason City
 biodiesel production facility                                |  |        | (1,323,000 | )   
|Proceeds required to complete related improvements on the Mason City
 biodiesel production facility                                 |  |        | (6,677,000 | )   
|Interest income earned on cash and equivalents                                                                                      |  |        | 1,406,000  |     
|Estimated proceeds remaining for start-up of Mason
 City plant and related expenditures (does not include debt financing from
 OSM) |  | $      | 5,341,000  | (4) 
|                                                                                                                                    |  |        |            |     

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

(2) We believe these amounts represent the proceeds we used as of
January 31, 2011 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.

(3) This figure does not include the $6,077,595 we obtained from OSM
under the Loan Agreement, or the $375,000 paid to New Equity under the
Settlement and Termination Agreement.

(4) This number is our current cash and equivalents, less: our
accounts payable; and accrued expenses. It does not include amounts owed for improvements
to the Mason City biodiesel production facility, as those will be paid by the
escrow deposit. If we sell some of the assets we have held for sale, then this
will increase the proceeds remaining to invest in the Mason City biodiesel
production facility. Additionally, this figure does not include the $6,077,595
in debt financing that we obtained from OSM pursuant to the Loan Agreement, or
the $375,000 paid to New Equity under the Settlement and Termination Agreement.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]

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. |  | Description                                                                                                                |  | Method of
 Filing
|             |  |                                                                                                                            |  |                  
|10.1         |  | First Amendment to Amended
 and Restated Loan Agreement between OSM-REO FF, LLC and Soy Energy, LLC
 dated March 18, 2011. |  | *                
|             |  |                                                                                                                            |  |                  
|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. Section 1350                                                                            |  | *                
|             |  |                                                                                                                            |  |                  
|32.2         |  | Certificate pursuant to 18
 U.S.C. Section 1350                                                                            |  | *                
|             |  |                                                                                                                            |  |                  
|(*)          |  | Filed herewith.                                                                                                            |  |                  

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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 22, 2011  | /s/
 Charles Sand                      | 
|                       |                                        |  |  | 
|                       | Charles Sand                           | 
|                       | President and Chief
 Executive Officer | 
|                       | (Principal Executive
 Officer)         | 
|                       |                                        | 
|Date:   March 22, 2011 | /s/
 Dallas Thompson                   | 
|                       |                                        |  |  | 
|                       | Dallas Thompson                        | 
|                       | Treasurer and Chief
 Financial Officer | 
|                       |                                        | 
|                       |                                        | 

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