##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal quarter ended January 31, 2007
 OR
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from          to          .
 Commission file number 333-135729
 ONE EARTH ENERGY, LLC
  Illinois
(State or other jurisdiction of 
incorporation or organization)
    
    20-3852246
(I.R.S. Employer Identification No.)
 1306 West 8 th Street, Gibson City, IL 60936
 (217) 784-4284
 þ o
 o þ
  o þ




---



##### Table of Contents



INDEX
 Page No.PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements.
    
    
    3Item 2. Managements Discussion and Analysis and Plan of Operations
    
    
    13Item 3. Controls and Procedures
    
    
    25PART II. OTHER INFORMATION
    
    
    26Item 1. Legal Proceedings
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3. Defaults Upon Senior Securities
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    27SIGNATURES
    
    
    29Distiller's Grain Marketing AgreementSection 302 CertificationSection 302 CertificationSection 1350 CertificationSection 1350 Certification
 2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 ONE EARTH ENERGY, LLC
  PageUnaudited Financial StatementsBalance Sheet
    
    
    4Statements of Operations
    
    
    5Statements of Cash Flows
    
    
    7Notes
to Unaudited Financial Statements
    
    
    8-12
 3




---



##### Table of Contents



ONE EARTH ENERGY, LLC
 
  January 31,2007(unaudited)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    145,866Grant receivable
    
    
    86,578Prepaid expenses
    
    
    23,453Total current assets
    
    
    255,897Property and EquipmentOffice equipment
    
    
    11,345Less accumulated depreciation
    
    
    (1,217
    )Net property and equipment
    
    
    10,128Other AssetsDeferred offering costs
    
    
    667,441Land options
    
    
    47,000Total other assets
    
    
    714,441Total Assets
    
    $
    980,466LIABILITIES AND MEMBERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    180,811Total current liabilities
    
    
    180,811Commitments and ContingenciesMembers EquityMember contributions, 855 units outstanding less costs of raising capital
    
    
    1,424,470Deficit accumulated during development stage
    
    
    (624,815
    )Total members equity
    
    
    799,655Total Liabilities and Members Equity
    
    $
    980,466
  4




---



##### Table of Contents



ONE EARTH ENERGY, LLC
 
  Three Months Ended
    
    
    From Inception
    
    
    From InceptionJanuary 31,
    
    
    (November 28, 2005)
    
    
    (November 28, 2005)2007
    
    
    to January 31, 2006
    
    
    to January 31, 2007(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Revenues
    
    $
    
    
    
    $
    
    
    
    $
    Operating ExpensesPreproduction startup costs
    
    
    73,346
    
    
    
    
    
    
    
    344,998Professional fees
    
    
    32,022
    
    
    
    50,223
    
    
    
    188,456General and administrative
    
    
    69,389
    
    
    
    7,473
    
    
    
    232,970Total
    
    
    174,757
    
    
    
    57,696
    
    
    
    766,424Operating Loss
    
    
    (174,757
    )
    
    
    (57,696
    )
    
    
    (766,424
    )Other IncomeGrant income
    
    
    86,578
    
    
    
    20,000
    
    
    
    106,578Other income
    
    
    
    
    
    
    5,000
    
    
    
    5,000Interest income
    
    
    3,662
    
    
    
    
    
    
    
    30,031Total
    
    
    90,240
    
    
    
    25,000
    
    
    
    141,609Net Loss
    
    $
    (84,517
    )
    
    $
    (32,696
    )
    
    $
    (624,815
    )Weighted Average Units Outstanding
    
    
    855
    
    
    
    
    
    
    
    672Net Loss Per Unit
    
    $
    (99
    )
    
    $
    
    
    
    $
    (930
    )
  5




---



##### Table of Contents



ONE EARTH ENERGY, LLC
 
  Three Months Ended
    
    
    From Inception
    
    
    From InceptionJanuary 31,
    
    
    (November 28, 2005)
    
    
    (November 28, 2005)2007
    
    
    to January 31, 2006
    
    
    to January 31, 2007(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Cash Flows from Operating ActivitiesNet loss
    
    $
    (84,517
    )
    
    $
    (32,696
    )
    
    $
    (624,815
    )Adjustments to reconcile net loss to net cash used in operations:Depreciation
    
    
    645
    
    
    
    
    
    
    
    1,217Change in assets and liabilities
Grant receivable
    
    
    (86,578
    )
    
    
    
    
    
    
    (86,578
    )Prepaid expenses
    
    
    9,588
    
    
    
    (6,917
    )
    
    
    (23,453
    )Accounts payable
    
    
    85,986
    
    
    
    
    
    
    
    96,082Accrued expenses
    
    
    (961
    )
    
    
    7,047
    
    
    
    Net cash used in operating activities
    
    
    (75,837
    )
    
    
    (32,566
    )
    
    
    (637,547
    )Cash Flows from Investing ActivitiesPayment for land options
    
    
    (10,000
    )
    
    
    
    
    
    
    (47,000
    )Capital expenditures
    
    
    (4,478
    )
    
    
    
    
    
    
    (11,345
    )Net cash used in investing activities
    
    
    (14,478
    )
    
    
    
    
    
    
    (58,345
    )Cash Flows from Financing ActivitiesPayments for deferred offering costs
    
    
    (370,798
    )
    
    
    (2,610
    )
    
    
    (582,712
    )Payments for cost of raising capital
    
    
    
    
    
    
    
    
    
    
    (530
    )Member contributions
    
    
    
    
    
    
    75,000
    
    
    
    1,425,000Net cash provided by (used in) financing activities
    
    
    (370,798
    )
    
    
    72,390
    
    
    
    841,758Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    (461,113
    )
    
    
    39,824
    
    
    
    145,866Cash and cash equivalents  Beginning of Period
    
    
    606,979
    
    
    
    
    
    
    
    Cash and cash equivalents  End of Period
    
    $
    145,866
    
    
    $
    39,824
    
    
    $
    145,866Supplemental Disclosure of Noncash Investing and Financing
ActivitiesDeferred offering costs included in accounts payable
    
    $
    84,729
    
    
    $
    
    
    
    $
    84,729
  7




---



##### Table of Contents



ONE EARTH ENERGY, LLC
 
   1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Nature of Business
  Fiscal Reporting Period
  Accounting Estimates
   Cash And Cash Equivalents
   Deferred Offering Costs
  8




---



##### Table of Contents



ONE EARTH ENERGY, LLC
   Property and Equipment
   Grants
  Income Taxes
  Organizational and Start Up Costs
  Fair Value of Financial Instruments
  Recently Issued Accounting Pronouncements
  2. DEVELOPMENT STAGE ENTERPRISE
   9




---



##### Table of Contents



ONE EARTH ENERGY, LLC
    3. MEMBERS EQUITY
  4. GRANT
   5. RELATED PARTY TRANSACTIONS
  6. COMMITMENTS AND CONTINGENCIES
 Plant Construction
   10




---



##### Table of Contents



ONE EARTH ENERGY, LLC
    Land options
       Consulting Contracts
     11




---



##### Table of Contents



ONE EARTH ENERGY, LLC
     Equity agreement
  Ethanol Marketing Contract
  Distillers Grains Marketing Contract
  12




---



##### Table of Contents



Item 2. Managements Discussion and Analysis and Plan of Operations.
 Forward Looking Statements
  
    
    Investors ability to pay the outstanding balances on promissory notes after the
closing of the offering;
    
    Our ability to obtain the debt financing necessary to construct and operate our plant;
    
    Our ability to enter into binding agreements with Fagen, Inc. and ICM, Inc. to build
our plant;
    
    Changes in our business strategy, capital improvements or development plans;
    
    Construction delays and technical difficulties in constructing the plant;
    
    Changes in the environmental regulations that apply to our plant site and operations;
    
    Changes in general economic conditions or the occurrence of certain events causing an
economic impact in the agriculture, oil or automobile industries;
    
    Changes in the availability and price of natural gas and the market for ethanol and
distillers grains;
    
    Changes in federal and/or state laws (including the elimination of any federal and/or
state ethanol tax incentives);
    
    Changes and advances in ethanol production technology; and
    
    Competition from alternative fuel additives.
  Overview
  13




---



##### Table of Contents



14




---



##### Table of Contents



Plan of Operations to Start-Up of the Ethanol Plant
  Project Capitalization
     
    
    commence construction of the plant using all or a part of the equity funds raised while
we seek another debt financing source;
    
    hold the equity funds raised indefinitely in an interest-bearing account while we seek
another debt financing source;
 15




---



##### Table of Contents




    
    return the equity funds, if any, to investors with accrued interest, after
deducting the currently indeterminate expenses of operating our business or partially
constructing the plant before we return the funds.
    Site Acquisition and Development
  Our board of directors, in its sole
discretion, reserves the right to select the location for the plant.
  16




---



##### Table of Contents



Plant Construction
    Construction Consultants
 Fagen, Inc .
  
    
    Providing a preliminary design and construction schedule and a guaranteed
maximum price for the design and construction of the plant;
    
    Assisting us with site evaluation and selection;
    
    Designing and building the plant; and
    
    Assisting us in locating appropriate operational management for the plant.
  17




---



##### Table of Contents



Fagen Engineering, LLC
  ICM, Inc.
   Other Consultants
 RTP Environmental Engineering
  U.S. Energy Services, Inc.
  18




---



##### Table of Contents



Eco-Energy, LLC
  United Bio Energy Ingredients, LLC
  Above Zero Media, LLC
  
    
    a one-time commitment fee of $15,000 upon execution of the agreement;
    
    payment of $60,000 upon satisfactory completion of written and visual equity marketing materials;
    
    payment of $60,000 thirty days following the date of payment for written and visual
equity marketing materials;
  19




---



##### Table of Contents




    
    $300 per day (not to exceed $1,500 per week) for each day that Above Zero Media
personnel provide technical assistance to us, through personal attendance, at our equity
drive meetings; and
    
    a one-time conditional bonus of $15,000 on the date of execution and delivery of all
required documents by us with our project lender(s) for debt financing.
 Consulting Agreement with Mitch Dawson
  Permitting and Regulatory Activities
   Trends and Uncertainties Impacting the Ethanol Industry
   20




---



##### Table of Contents



Trends and uncertainties impacting the corn and natural gas markets and our future cost of goods
sold.
 21




---



##### Table of Contents



Technology developments.
  22




---



##### Table of Contents



Operating Expenses
  Employees
   # Full-TimePosition
    
    PersonnelPresident & Chief Executive Officer
    
    
    1Plant Manager/Vice President of Operations
    
    
    1Commodities Specialist/Purchasing Manager
    
    
    1Controller/Bookkeeper
    
    
    1Team Leaders/Supervisors
    
    
    4General Plant Operations Personnel
    
    
    19Utilities, Maintenance and Safety Manger
    
    
    1Maintenance Manager
    
    
    1Maintenance Personnel and Technicians
    
    
    10Lab Manager
    
    
    1Lab Technician
    
    
    2Office Staff
    
    
    3TOTAL
    
    
    45
  Liquidity and Capital Resources
 Sources of Funds
  23




---



##### Table of Contents



Uses of Proceeds
  PercentUse of Proceeds
    
    Amount
    
    of TotalPlant construction and CCI contingency1
    
    $
    116,976,775
    
    
    
    72.43
    %Land & site development costs
    
    
    10,368,250
    
    
    
    6.42
    %Railroad
    
    
    2,180,000
    
    
    
    1.35
    %Fire protection & water supply
    
    
    6,995,000
    
    
    
    4.33
    %Administrative building
    
    
    500,000
    
    
    
    0.31
    %Office equipment
    
    
    90,000
    
    
    
    0.06
    %Computers, software, network
    
    
    175,000
    
    
    
    0.11
    %Construction insurance costs
    
    
    125,000
    
    
    
    0.08
    %Construction contingency
    
    
    2,009,975
    
    
    
    1.25
    %
 
 1
    
    Includes plant construction amount of $105,997,000 and a contingency for a construction cost index increase of
$7,949,775. 24




---



##### Table of Contents



PercentUse of Proceeds
    
    Amount
    
    
    of TotalConstruction manager fees
    
    
    150,000
    
    
    
    0.09
    %Capitalized interest
    
    
    3,000,000
    
    
    
    1.86
    %Rolling stock
    
    
    460,000
    
    
    
    0.28
    %Start up costs:Financing costs
    
    
    1,218,000
    
    
    
    0.75
    %Organization costs
    
    
    1,400,000
    
    
    
    0.87
    %Pre-production period costs
    
    
    850,000
    
    
    
    0.53
    %Inventory  spare parts
    
    
    500,000
    
    
    
    0.31
    %Working capital
    
    
    6,500,000
    
    
    
    4.02
    %Inventory  corn
    
    
    2,250,000
    
    
    
    1.39
    %Inventory  chemicals and ingredients
    
    
    200,000
    
    
    
    0.12
    %Inventory  ethanol and DDGS
    
    
    5,550,000
    
    
    
    3.44
    %Total
    
    $
    161,498,000
    
    
    
    100
    %
  Quarterly Financial Results
     Off-Balance Sheet Arrangements
  
 Item 3. Controls and Procedures
  25




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    Cash proceeds from unit sales deposited in the escrow account equals or exceeds the
minimum offering amount of $30,100,000, exclusive of interest;
    
    We obtain a written debt financing commitment for debt financing ranging from
$68,955,000 to $98,955,000 less any grants and/or tax increment financing we are
awarded;
    
    We elect, in writing, to terminate the escrow agreement;
    
    The escrow agent provides to each state securities department in which the Company
has registered its securities for sale an affidavit stating that the foregoing
requirements have been satisfied; and
    
    The state securities commissioners have consented to release of the funds on
deposit.
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  26




---



##### Table of Contents



Item 6. Exhibits
  Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing3.1
    
    Articles of Organization of One Earth Energy, LLC.
    
    13.2
    
    Amended and Restated Operating Agreement of One Earth Energy, LLC.
    
    13.3
    
    First Amendment to Operating Agreement of One Earth Energy, LLC.
    
    34.1
    
    Form of Membership Unit Certificate.
    
    14.2
    
    Form of Subscription Agreement.
    
    24.3
    
    Amended and Restated Escrow Agreement with Great Western Bank.
    
    25.1
    
    Opinion of Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, P.L.C. as to certain securities matters.
    
    58.1
    
    Opinion of Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, P.L.C. as to certain tax matters.
    
    510.1
    
    Letter of Intent dated December 2, 2005 between One Earth Energy, LLC and Fagen, Inc.
    
    110.2
    
    Phase I and II Engineering Services Agreement between One Earth Energy, LLC and Fagen Engineering, LLC dated December 13, 2005.
    
    110.3
    
    Option Agreement between One Earth Energy, LLC and Edward E.Tucker and Cynthia J. Tucker dated February 28, 2006.
    
    110.4
    
    Option Agreement between One Earth Energy, LLC and Don Maxwell dated March 13, 2006.
    
    110.5
    
    Consulting Agreement between One Earth Energy, LLC and Mitch Dawson dated March 23, 2006.
    
    110.6
    
    Option Agreement between One Earth Energy, LLC and Lisa Foster dated April 17, 2006.
    
    110.7
    
    Option Agreement between One Earth Energy, LLC and City of Gibson, Illinois dated April 18, 2006.
    
    110.8
    
    Consulting Agreement between One Earth Energy, LLC and Above Zero Media, LLC dated May 22, 2006.
    
    110.9
    
    Letter Agreement between One Earth Energy, LLC and Farmers Energy Incorporated (a wholly owned subsidiary of REX Stores Corporation) dated May 26, 2006.
    
    1
 27




---



##### Table of Contents



Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing10.10
    
    Registration Agreement between One Earth Energy, LLC and Farmers Energy One Earth, LLC dated July 11, 2006
    
    110.11
    
    Ethanol Marketing Agreement between One Earth Energy, LLC and Eco-Energy, Inc. dated September 15, 2006.
    
    210.12
    
    Lock-Up Agreement between One Earth Energy, LLC, Alliance Grain Co., Fisher Farmers Grain & Coal Company, Grand Prairie Co-op, Inc., Ludlow Cooperative Elevator Company and Topflight Grain Cooperative, Inc dated November 1, 2006.
    
    410.13
    
    Distillers Grain Marketing Agreement between One Earth Energy, LLC and United Bio Energy Ingredients, LLC.
    
    *31.1
    
    Certificate Pursuant to 17 CFR 240.13a-14(a)
    
    *31.2
    
    Certificate Pursuant to 17 CFR 240.13a-14(a)
    
    *32.1
    
    Certificate Pursuant to  18 U.S.C. § 1350
    
    *32.2
    
    Certificate Pursuant to  18 U.S.C. § 1350.
    
    *
 
 (1)
    
    Incorporated by reference to the exhibit of the same number on our Registration
Statement on Form SB-2, No. 333-135729, originally filed on July 12, 2006.(2)
    
    Incorporated by reference to the exhibit of the same number in Pre-Effective
Amendment No. 1 filed on September 20, 2006 to our Registration Statement on Form SB-2, No.
333-135729, originally filed on July 12, 2006.(3)
    
    Incorporated by reference to the exhibit of the same number in Pre-Effective
Amendment No. 2 filed on October 13, 2006 to our Registration Statement on Form SB-2, No.
333-135729, originally filed on July 12, 2006.(4)
    
    Incorporated by reference to the exhibit of the same number in Pre-Effective
Amendment No. 3 filed on November 2, 2006 to our Registration Statement on Form SB-2, No.
333-135729, originally filed on July 12, 2006.(5)
    
    Incorporated by reference to the exhibit of the same number in Post-Effective
Amendment No. 1 filed on November 17, 2006 to our Registration Statement on Form SB-2, No.
333-135729, originally filed on July 12, 2006.(*)
    
    Filed herewith. 28




---



##### Table of Contents



SIGNATURES
  ONE EARTH ENERGY, LLCDate: March 16, 2007
    
    /s/ Steve KellySteve KellyChairman and President (Principal Executive Officer)Date: March 16, 2007
    
    /s/ Jack MurrayJack MurrayTreasurer (Principal Financial and Accounting Officer)
 29