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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 July 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




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INDEX
 Page No.PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements.
    
    
    3Item 2. Managements Discussion and Analysis and Plan of Operations
    
    
    11Item 3. Controls and Procedures
    
    
    24PART II. OTHER INFORMATION
    
    
    24Item 1. Legal Proceedings
    
    
    24Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3. Defaults Upon Senior Securities
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    25Item 5. Other Information
    
    
    25Item 6. Exhibits
    
    
    25SIGNATURES
    
    
    27AgreementContract AgreementCertificationCertificationSection 1350 CertificationSection 1350 Certification
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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 ONE EARTH ENERGY, LLC
  July 31,ASSETS
    
    2007(unaudited)Current AssetsCash and cash equivalents
    
    $
    879,801Prepaid expenses
    
    
    37,854Total current assets
    
    
    917,655Property and EquipmentOffice equipment
    
    
    11,345Land
    
    
    869,687Construction in process
    
    
    1,971,6602,852,692Less accumulated depreciation
    
    
    (2,486
    )Net property and equipment
    
    
    2,850,206Other AssetsDeferred offering costs
    
    
    798,378Land options
    
    
    10,000Deferred financing costs
    
    
    61,522Total other assets
    
    
    869,900Total Assets
    
    $
    4,637,761LIABILITIES AND MEMBERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    47,976Accrued expenses
    
    
    9,800Accrued interest  related parties
    
    
    37,338Notes payable  related parties
    
    
    4,010,000Total current liabilities
    
    
    4,105,114Commitments and ContingenciesMembers EquityMember contributions, 855 units outstanding
less costs of raising capital
    
    
    1,424,470Deficit accumulated during development stage
    
    
    (891,824
    )Total members equity
    
    
    532,647Total Liabilities and Members Equity
    
    $
    4,637,761
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ONE EARTH ENERGY, LLC
  Three Months Ended
    
    
    Three Months EndedJuly 31,
    
    
    July 31,2007
    
    
    2006(unaudited)
    
    
    (unaudited)Revenues
    
    $
    
    
    
    $
    Operating ExpensesPreproduction
startup costs
    
    
    
    
    
    
    153,570Professional fees
    
    
    106,748
    
    
    
    19,673General and
administrative
    
    
    24,651
    
    
    
    67,683Total
    
    
    131,399
    
    
    
    240,926Operating Loss
    
    
    (131,399
    )
    
    
    (240,926
    )Other Income (Expense)Grant income
    
    
    2,500
    
    
    
    Interest income
    
    
    2,911
    
    
    
    11,021Interest expense
    
    
    (22,651
    )
    
    
    Total
    
    
    (17,240
    )
    
    
    11,021Net Loss
    
    $
    (148,639
    )
    
    $
    (229,905
    )Weighted Average
Units Outstanding
    
    
    855
    
    
    
    855Net Loss Per Unit
    
    $
    (174
    )
    
    $
    (269
    )
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##### Table of Contents



ONE EARTH ENERGY, LLC
  From Inception
    
    
    From InceptionNine Months Ended
    
    
    (November 28, 2005)
    
    
    (November 28, 2005)July 31, 2007
    
    
    to July 31, 2006
    
    
    to July 31, 2007(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Revenues
    
    $
    
    
    
    $
    
    
    
    $
    Operating ExpensesPreproduction
startup costs
    
    
    73,674
    
    
    
    158,827
    
    
    
    345,326Professional fees
    
    
    203,080
    
    
    
    130,747
    
    
    
    359,514General and
administrative
    
    
    147,136
    
    
    
    102,189
    
    
    
    310,717Total
    
    
    423,890
    
    
    
    391,763
    
    
    
    1,015,557Operating Loss
    
    
    (423,890
    )
    
    
    (391,763
    )
    
    
    (1,015,557
    )Other Income
(Expense)Grant income
    
    
    89,077
    
    
    
    20,000
    
    
    
    109,077Other income
    
    
    
    
    
    
    5,000
    
    
    
    5,000Interest income
    
    
    6,860
    
    
    
    18,817
    
    
    
    33,229Interest expense
    
    
    (23,573
    )
    
    
    
    
    
    
    (23,573
    )Total
    
    
    72,364
    
    
    
    43,817
    
    
    
    123,733Net Loss
    
    $
    (351,526
    )
    
    $
    (347,946
    )
    
    $
    (891,824
    )Weighted Average
Units Outstanding
    
    
    855
    
    
    
    535
    
    
    
    726Net Loss Per Unit
    
    $
    (411
    )
    
    $
    (650
    )
    
    $
    (1,228
    )
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ONE EARTH ENERGY, LLC
  Nine Months Ended
    
    
    From Inception
    
    
    From InceptionJuly 31,
    
    
    (November 28, 2005)
    
    
    (November 28, 2005)2007
    
    
    to July 31, 2006
    
    
    to July 31, 2007(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Cash Flows from Operating ActivitiesNet loss
    
    $
    (351,526
    )
    
    $
    (347,946
    )
    
    $
    (891,824
    )Adjustments to reconcile net loss to net cash from operations:Depreciation
    
    
    1,914
    
    
    
    285
    
    
    
    2,486Land option expired
    
    
    7,000
    
    
    
    
    
    
    
    7,000Change in assets and liabilitiesGrant receivable
    
    
    (86,578
    )
    
    
    
    
    
    
    (86,578
    )Prepaid expenses
    
    
    (4,813
    )
    
    
    (42,628
    )
    
    
    (37,854
    )Accounts payable
    
    
    33,255
    
    
    
    49,386
    
    
    
    43,351Accrued expenses
    
    
    9,800
    
    
    
    
    
    
    
    9,800Accrued interest  related parties
    
    
    36,377
    
    
    
    6,640
    
    
    
    37,338Net cash used in operating activities
    
    
    (354,571
    )
    
    
    (334,263
    )
    
    
    (916,281
    )Cash Flows from Investing ActivitiesPayments for land options
    
    
    (10,000
    )
    
    
    (37,000
    )
    
    
    (47,000
    )Payments for purchase of land
    
    
    (839,687
    )
    
    
    
    
    
    
    (839,687
    )Capital expenditures
    
    
    (4,478
    )
    
    
    (3,618
    )
    
    
    (11,345
    )Payments for construction in progress
    
    
    (1,967,035
    )
    
    
    
    
    
    
    (1,967,035
    )Net cash used in investing activities
    
    
    (2,821,200
    )
    
    
    (40,618
    )
    
    
    (2,865,067
    )Cash Flows from Financing ActivitiesProceeds from grants
    
    
    86,578
    
    
    
    
    
    
    
    86,578Payments for financing costs
    
    
    (61,522
    )
    
    
    
    
    
    
    (61,522
    )Payments for deferred offering costs
    
    
    (586,464
    )
    
    
    (122,222
    )
    
    
    (798,378
    )Payments for cost of raising capital
    
    
    
    
    
    
    (530
    )
    
    
    (530
    )Member contributions
    
    
    
    
    
    
    1,425,000
    
    
    
    1,425,000Proceeds from short term loans  related parties
    
    
    4,010,000
    
    
    
    
    
    
    
    4,010,000Net cash provided by financing activities
    
    
    3,448,593
    
    
    
    1,302,248
    
    
    
    4,661,149Net Increase in Cash and Cash Equivalents
    
    
    272,822
    
    
    
    927,367
    
    
    
    879,801Cash and cash equivalents  Beginning of Period
    
    
    606,979
    
    
    
    
    
    
    
    Cash and cash equivalents  End of Period
    
    $
    879,801
    
    
    $
    927,367
    
    
    $
    879,801Supplemental Cash Flow InformationCash paid for interest, net of amount capitalized of $13,765
    
    $
    
    
    
    $
    
    
    
    $
    Supplemental Disclosure of Noncash
Investing and Financing ActivitiesConstruction costs included in accounts payable
    
    $
    4,625
    
    
    $
    
    
    
    $
    4,625Deferred offering costs included in accounts payable
    
    $
    
    
    
    $
    61,066
    
    
    $
    5,426Deposit applied to land purchase
    
    $
    30,000
    
    
    $
    
    
    
    $
    30,000
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ONE EARTH ENERGY, LLC
   1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   Nature of Business
  Accounting Estimates
  2. MEMBERS EQUITY
     7




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ONE EARTH ENERGY, LLC
    3. NOTES PAYABLE
  4. DEBT FINANCING
   5. GRANT
  6. RELATED PARTY TRANSACTIONS
  7. COMMITMENTS AND CONTINGENCIES
 Plant Construction
  8




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ONE EARTH ENERGY, LLC
     Land and land options
        Consulting Contracts
  9




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ONE EARTH ENERGY, LLC
    Ethanol Marketing Contract
  Distillers Grains Marketing Contract
  Railroad Contract
  Installation Contract
  10




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ONE EARTH ENERGY, LLC









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;
    
    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 corn and 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.


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Overview
















12



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Plan of Operations and Start-Up of the Ethanol Plant
   Project Capitalization
   13




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14




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
    
    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;
    
    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






15



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Plant Construction and Start-Up of Plant Operations
      16




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Marketing, Grain Procurement and Utility Agreements
  17
    Table of Contents      Permitting and Regulatory Activities
   Trends and Uncertainties Impacting the Ethanol Industry
  18
    Table of Contents          19
    Table of Contents    th
  Massachusetts v. EPA
  Technology Developments
  Trends and Uncertainties Impacting the Corn and Natural Gas Markets and Our Cost of Goods
Sold
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Operating Expenses
  Critical Accounting Estimates
  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
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Liquidity and Capital Resources
 Sources of Funds
      22




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Uses of Proceeds
  Percent ofUse of Proceeds
    
    Amount
    
    
    TotalPlant construction
    
    $
    120,000,000
    
    
    
    72.29
    %Land & site development costs
    
    
    8,937,064
    
    
    
    5.38
    %Railroad
    
    
    1,980,000
    
    
    
    1.19
    %Fire protection & water supply
    
    
    10,179,000
    
    
    
    6.13
    %Administrative building
    
    
    500,000
    
    
    
    0.30
    %Office equipment
    
    
    90,000
    
    
    
    0.05
    %Computers, software, network
    
    
    175,000
    
    
    
    0.11
    %Construction insurance costs
    
    
    125,000
    
    
    
    0.08
    %Construction contingency
    
    
    2,085,936
    
    
    
    1.26
    %Capitalized interest
    
    
    3,000,000
    
    
    
    1.81
    %Rolling stock
    
    
    460,000
    
    
    
    0.28
    %Start up costs:Financing costs
    
    
    1,218,000
    
    
    
    0.73
    %Organization costs
    
    
    1,400,000
    
    
    
    0.84
    %Pre-production period costs
    
    
    850,000
    
    
    
    0.51
    %Inventory  spare parts  process
equipment
    
    
    500,000
    
    
    
    0.30
    %Working capital
    
    
    6,500,000
    
    
    
    3.92
    %Inventory  corn
    
    
    2,250,000
    
    
    
    1.36
    %Inventory  chemicals and ingredients
    
    
    200,000
    
    
    
    0.12
    %Inventory  ethanol and DDGS
    
    
    5,550,000
    
    
    
    3.34
    %Total
    
    $
    166,000,000
    
    
    
    100
    %
  Quarterly Financial Results
 23




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Off-Balance Sheet Arrangements
  
 Item 3. Controls and Procedures
   
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
   24




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
    
    Cash proceeds from unit sales deposited in the escrow account equals or exceeds the
minimum offering amount of $64,455,000, exclusive of interest;
    
    We obtain a written debt financing commitment for debt financing ranging from
$92,455,000 to $98,455,000 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
  
 Item 6. Exhibits
  Method ofExhibit No.
    
    Description
    
    Filing10.5
    
    Agreement between One Earth Energy, LLC and Ameritrack Railroad
Contractors, Inc. dated July 25, 2007.
    
    
    *10.6
    
    Foundation Services Corp. Contract Agreement dated August 23, 2007
    
    
    *10.16
    
    Design-Build Agreement between One Earth Energy, LLC and Fagen,
Inc. dated June 14, 2007.
    
    
    131.1
    
    Certificate Pursuant to 17 CFR 240.13a-14(a)
    
    
    *31.2
    
    Certificate Pursuant to 17 CFR 240.13a-14(a)
    
    
    *
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Method ofExhibit No.
    
    Description
    
    Filing32.1
    
    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 Post-Effective
Amendment No. 2, No. 333-135729, originally filed on July 3, 2007.(*)
    
    Filed herewith. 26




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SIGNATURES
  ONE EARTH ENERGY, LLCDate: September 10, 2007
    /s/ Steve KellySteve KellyChairman and President (Principal Executive Officer)Date: September 10, 2007
    /s/ Jack MurrayJack MurrayTreasurer  (Principal Financial and Accounting Officer) 27