Filed by Bowne Pure Compliance

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 June 30, 2007


o		Transition report under Section 13 or 15(d) of the Exchange Act.

For the transition period from to .

Commission file number 000-52426

E ENERGY ADAMS, LLC

(Exact name of small business issuer as specified in its charter)


Nebraska		20-2627531
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

510 Main Street, P.O. Box 49, Adams, Nebraska 68301
(Address of principal executive offices)

(402) 988-4655
(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. þ Yes o No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes þ 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 July 31, 2007 there were 5,133 units outstanding.

Transitional Small Business Disclosure Format (Check one): o Yes þ No


PART I.		FINANCIAL INFORMATION


Item 1.		Financial Statements.

E ENERGY ADAMS, LLC
(A Development Stage Company)

Condensed Balance Sheet


	June 30,
	2007
	(Unaudited)
ASSETS

Current Assets
Cash and equivalents	$	4,131,118
Restricted cash		2,709,532
Prepaid and other		89,928

Total current assets		6,930,578

Property and Equipment
Land		1,438,162
Computers and office equipment		122,693
Leasehold improvements		4,408
Construction in progress		67,174,675

Total property and equipment		68,739,938
Less accumulated depreciation		13,735

Net property and equipment		68,726,203

Other Assets
Restricted cash		592,499
Investments		93,436
Debt issuance costs, net of amortization		574,437

Total other assets		1,260,372

Total Assets	$	76,917,153


LIABILITIES AND MEMBERS’ EQUITY

Current Liabilities
Current maturities of long-term debt	$	1,237,500
Derivative instruments		1,682,512
Accounts payable		45,785
Accrued expenses		93,778
Construction and retainage payable		2,509,027
Construction and retainage payable — related party		8,465,826
Line of credit		2,129,000

Total current liabilities		16,163,428

Long-Term Debt, less current maturities		13,397,500

Commitments and Contingencies

Members’ Equity

Member contributions, net of issuance costs related to capital contributions, 5,133 units outstanding		49,957,383
Deficit accumulated during development stage		(2,601,158	)

Total members’ equity		47,356,225


Total Liabilities and Members’ Equity	$	76,917,153

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

E ENERGY ADAMS, LLC
(A Development Stage Company)

Condensed Statement of Operations


	Nine Months			Nine Months			From Inception
	Ended			Ended			(March 25, 2005)
	June 30,			June 30,			to June 30,
	2007			2006			2007
	(Unaudited)			(Unaudited)			(Unaudited)

Revenues	$	—		$	—		$	—

Operating Expenses
Professional and consulting fees		345,628			383,358			1,026,240
Project coordinator		—			76,585			231,789
General and administrative		695,412			247,955			1,141,527

Total operating expenses		1,041,040			707,898			2,399,556


Operating Loss		(1,041,040	)		(707,898	)		(2,399,556	)

Other Income (Expense)
Other income		146,876			—			151,876
Loss on derivative instruments		(1,546,528	)		—			(1,546,528	)
Interest income		662,257			9,924			1,235,816
Interest expense		(6,725	)		(30,082	)		(42,766	)

Total other expense		(744,120	)		(20,158	)		(201,602	)


Net Loss	$	(1,785,160	)	$	(728,056	)	$	(2,601,158	)


Weighted Average Units Outstanding		5,133			194			2,114


Net Loss Per Unit	$	(348	)	$	(3,753	)	$	(1,230	)

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

E ENERGY ADAMS, LLC
(A Development Stage Company)

Condensed Statement of Cash Flows


	Nine Months			Nine Months			From Inception
	Ended			Ended			(March 25, 2005)
	June 30,			June 30,			to June 30,
	2007			2006			2007
	(Unaudited)			(Unaudited)			(Unaudited)

Cash Flows from Operating Activities
Net loss	$	(1,785,160	)	$	(728,056	)	$	(2,601,158	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		10,360			1,898			13,735
Gain on investment		(92,436	)		—			(92,436	)
Changes in assets and liabilities
Restricted cash		(3,302,031	)		—			(3,302,031	)
Derivative instruments		1,682,512			—			1,682,512
Prepaid and other		142,700			(14,292	)		(89,928	)
Accounts payable		(60,394	)		3,945			45,785
Accrued expenses		90,808			19,803			93,778

Net cash used in operating activities		(3,313,641	)		(716,702	)		(4,249,743	)

Cash Flows from Investing Activities
Payments for investment		(1,000	)		—			(1,000	)
Capital expenditures		(50,033,590	)		(1,057,404	)		(57,765,085	)

Net cash used in investing activities		(50,034,590	)		(1,057,404	)		(57,766,085	)

Cash Flows from Financing Activities
Debt issuance costs		(200,687	)		(27,500	)		(574,437	)
Proceeds from bridge loan		—			2,000,000			—
Proceeds from line of credit		2,129,000			—			2,129,000
Proceeds from TIF financing		5,035,000			—			5,035,000
Proceeds from construction loan		9,600,000			—			9,600,000
Member contributions		—			—			50,360,000
Costs related to capital contributions		—			(261,107	)		(402,617	)

Net cash provided by financing activities		16,563,313			1,711,393			66,146,946


Net Increase (Decrease) in Cash and Equivalents		(36,784,918	)		(62,713	)		4,131,118

Cash and Equivalents – Beginning of Period		40,916,036			737,053			—


Cash and Equivalents – End of Period	$	4,131,118		$	674,340		$	4,131,118


Supplemental Cash Flow Information
Cash paid during the period for:
Interest	$	—		$	15,288		$	36,041
Capitalized interest		31,560			—			31,560

Total	$	31,560		$	15,288		$	67,601


Supplemental Disclosure of Noncash Investing and Financing Activities

Land options exercised for land purchased	$	—		$	7,000		$	7,000

Deferred offering costs in accounts payable	$	—		$	39,377		$	—

Construction in progress in construction payable	$	10,974,853		$	—		$	10,974,853

Deferred offering costs offset against equity	$	—		$	—		$	402,617

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

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed 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 September 30, 2006, contained in the Company’s annual report on Form 10-KSB for 2006.

In the opinion of management, the interim condensed financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments.

Nature of Business

E Energy Adams, LLC, (a Nebraska Limited Liability Company) was organized with the intentions of developing, owning and operating a 50 million gallon dry mill corn-processing ethanol plant in Gage County, Nebraska. The Company was formed on March 25, 2005 to have an indefinite life. As of June 30, 2007, the Company is in the development stage with its efforts being principally devoted to organizational activities and construction of the plant. The Company anticipates completion of the plant in fall of 2007.

Fiscal Reporting Period

The Company has adopted a fiscal year ending September 30 for reporting financial operations.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Cash and Equivalents

The Company maintains its accounts primarily at two financial institutions. At times throughout the year the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation.

Derivative Instruments

The Company accounts for derivative instruments and hedging activities in accordance with Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended. SFAS No. 133 requires the recognition of derivatives in the balance sheet and the measurement of these instruments at fair value.

In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in other income and expense since the Company has not yet commenced operations.

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

Additionally, SFAS No. 133 requires a company to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting and reporting requirements of SFAS No. 133, and therefore, are not marked to market in our financial statements.

Property and Equipment

Property and equipment is stated at the lower of cost or estimated fair value. Depreciation is provided over an estimated useful life by use of the straight line depreciation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized.

The Company capitalizes construction costs until the assets are placed in service, at which time depreciation will be provided over the assets estimated useful life. As of June 30, 2007, the Company had a construction and retainage payable of approximately $10,975,000.

Debt Issuance Costs

Debt issuance costs are being amortized over the term of the related debt by use of the effective interest method.

Fair Value of Financial Instruments

The carrying value of cash and equivalents, derivative instruments and construction and retainage payables approximate fair value.

Recently Issued Accounting Pronouncements

Management has reviewed recently issued, but not yet effective, accounting pronouncements and does not expect the implementation of these pronouncements to have a significant effect on the Company’s financial statements.

2. MEMBERS’ EQUITY

As specified in the Company’s operating agreement, the Company is authorized to issue additional units as needed. The Company has one class of membership units, which include certain transfer restrictions as specified in the operating agreement and pursuant to applicable tax and securities laws. Income, losses and distributions are allocated to all members based upon their respective percentage units held. A member is entitled to one vote for each member unit held.

The Company was initially capitalized by a member who contributed $400,000 for 80 membership units. Additionally, the Company was further capitalized by 25 additional members, contributing an aggregate of $570,000 for 114 units.

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

The Company raised additional equity through a Form SB-2 Registration Statement with the Securities and Exchange Commission (SEC), which was declared effective May 15, 2006. The Offering was for a minimum of 1,990 and up to 5,810 membership units for sale at $10,000 per unit. The minimum purchase requirement was two units for a minimum investment of $20,000. The offering was closed on February 23, 2007 with the issuance of 4,939 units totaling $49,390,000. The Company offset proceeds from the equity offering with offering costs of approximately $402,600.

3. DERIVATIVE INSTRUMENTS

In order to reduce risk caused by market fluctuations, the Company hedges its anticipated corn purchases by entering into futures contracts. These contracts are used with the intention to fix the purchase price of the Company’s anticipated requirements of corn in production activities. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter markets. The fair value of derivatives is continually subject to change due to changing market conditions. The Company does not formally designate these instruments as hedges and, therefore, records in earnings adjustments caused from marking these instruments to market on a monthly basis.

At June 30, 2007, the Company had recorded restricted cash, related to derivative instruments, of approximately $2,285,000 and a corresponding liability related to corn options and future positions of approximately $1,683,000. The Company has recorded a combined loss of approximately $1,547,000, which includes a realized gain of approximately $136,000 and an unrealized loss of approximately $1,683,000.

4. BANK FINANCING

In August 2006, the Company entered into a credit agreement with a financial institution for the purpose of funding a portion of the cost of the ethanol plant. Under the credit agreement, the lender has provided a construction term loan for $35,000,000 and a construction revolving loan of $14,500,000, which are both secured by substantially all assets. An additional revolving loan for $3,000,000 is being provided for the financing of grain inventory, receivables and margin account equity. The Company is required to make monthly interest payments for all loans at a variable rate equivalent to the three-month LIBOR short term index rate plus 3.05% during the construction period. The variable rate will be adjusted to the three month London Inter-Bank Offer Rate (LIBOR) for any year after the first year of operations in which, at the end of the preceding year, the Company’s owners’ equity, is equal to or greater than 60%. Interest will be calculated on a 360 day basis.

In February 2007, the Company amended certain terms of its additional revolving loan, allowing the Company to begin drawing funds, as needed, beginning in February 2007, and requiring the Company to pay interest monthly until February 1, 2008, when the entire unpaid principal, plus accrued interest and any unpaid fees, costs or expenses shall be due. Prior to this amendment, the funds under this revolving loan would have been available beginning in November 2007, and due in November 2008.

In May 2007, the Company amended certain terms of its construction term loan, construction revolving loan and the additional revolving loan. The amendment temporarily limited the advances available under the construction term loan to $15,000,000 until the Company received the tax increment financing (TIF) as discussed below. The construction revolving loan terms were amended to allow the Company to advance funds under this loan, immediately, but the advances are limited to $3,000,000 until such time that the funds available under the construction term loan have been advanced in its entirety. The additional revolving term loan was amended to increase the amount available from $3,000,000 to $10,000,000.

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

Long-term debt consists of the following at June 30, 2007:


Term note payable to lending institution, see terms below	$	9,600,000

Tax increment financing, see terms below		5,035,000

Totals		14,635,000
Less amounts due within one year		(1,237,500	)


Net long-term debt	$	13,397,500

The estimated maturities of long-term debt at June 30, 2007 are as follows:


2008	$	1,237,500
2009		5,045,000
2010		3,617,500
2011		225,000
2012		245,000
After 2013		4,265,000


Total long-term debt	$	14,635,000

Construction Term Loan

The Company is required to make 29 principal installments of $1,237,500 plus accrued interest quarterly beginning six months following substantial completion, but no later than April 1, 2008 until October 1, 2015. In addition to the required payments, the Company will have to make additional principal payments equal to 65% of the Company’s excess cash flow as defined in the loan agreement not to exceed $2,000,000 per fiscal year and an aggregate total of $8,000,000.

Construction Revolving Loan

The Company is required to pay interest monthly until three months after the repayment of the term loan or January 1, 2016, at which point the Company is required to make 10 quarterly installments of $1,450,000 plus interest until April 1, 2018.

Additional Revolving Loan

For the additional revolving loan, the Company is required to pay interest monthly until February 1, 2008, when the entire unpaid principal, plus accrued interest and any unpaid fees, costs or expenses shall be due. As of June 30, 2007, the outstanding balance on the line of credit is $2,129,000. If the Company prepays any portion of the construction loans prior to April 1, 2009, the Company will owe a prepayment charge of 3% in addition to certain surcharges. The prepayment charge will be reduced by 1% each year thereafter and any prepayment made on the construction loan after April 1, 2011 will not be subject to a prepayment charge.

The Company has paid approximately $424,000 in debt financing costs and is obligated to pay an annual servicing fee of $25,000. Additionally, the Company will pay the lender an unused commitment fee quarterly equal to 0.5% of the average unused portion of the $14,500,000 revolving loan beginning May 8, 2007 and of the $10,000,000 revolving loan beginning February 1, 2007.

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

Covenants

The Company is subject to various financial and non-financial loan covenants that include among other items minimum working capital amounts, debt coverage ratio and net worth requirements. The Company is permitted to make distributions once a year not to exceed 40% of the net income as long as the Company is in compliance with these and other loan covenants. For fiscal years ending 2008 and thereafter, the Company may make distributions which may exceed 40% of the net income as long as the Company has made the excess cash flow payments and is in compliance with these and other loan covenants on a post-distribution basis.

Tax Increment Financing (TIF)

In May 2007 the Company entered into a redevelopment contract with the Community Development Agency of the Village of Adams, Nebraska, (“Authority”), for the redevelopment of the ethanol plant site. Pursuant to the contract, the Authority will provide a grant to the Company to reimburse the Company for certain expenditures which are payable from proceeds of the TIF indebtedness. The loan proceeds are to be used for “Project costs” as defined in the agreement, for the establishment of special funds held by the bond trustee for interest and principal payments and reserves (the “Capitalized Interest Fund” and the “Debt Service Reserve Fund”), and for debt issuance costs. The approximate amounts of the uses of the loan proceeds are as follows: available for Project costs $3,865,000; Capitalized Interest Fund $514,000; Debt Service Reserve Fund $503,000; and debt issuance costs $153,000. This loan bears interest at 9.15%, until the reset date of June 1, 2014, at which time the interest rate will be determined based on the U.S. Treasury Constant Maturity Index average for the prior month, plus 398 bps, not to exceed 10.0% or fall below 7.5%. The loans are secured by and payable from the grant and assignment of the Series A and Series B Notes, pledged revenues, consisting of pledged tax increment revenues, payment in lieu of taxes (PILOT) payments, and liquidated damages amount and amounts on deposit.

The Company may not convey, assign, or transfer the Project prior to the expiration of the 15 year period without the prior written consent of the Authority. If the Company were to default on the Contract under circumstances construed to be within the Company’s control, liquidated damages plus interest could be charged against the Company.

The Company will be assessed taxes on the value of the Project (“Tax Increment Revenues”) which will be paid by the Company to a special debt service fund and then used to pay the payments required on the loans. The Company has guaranteed that if such assessed Tax Increment Revenues are not sufficient for the required bond payments, the Company will provide such funds as are needed to fund the shortfall.

The loan matures in semi-annual increments commencing June 1, 2009. The semi-annual increments commence at $95,000 and increase to $730,000, with a final maturity of December 1, 2021. Interest on the loans is payable semi-annually on June 1 and December 1, commencing on December 1, 2007.

In connection with the bond issuance, the Authority also authorized a Series 2007B Note to the Company under which additional funding to the Company is contingently committed. Under the terms of the agreement the Authority may provide additional funding to the Company up to $2,500,000 to reimburse the Company for Project costs the Company has paid. However, any such funding to the Company would only be paid if there were Tax Increment Revenues remaining once the bonds have been fully paid. This funding commitment bears no interest and no amounts have been recorded in the accompanying financial statements due to the contingent nature of the agreement.

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

5. COMMITMENTS AND CONTINGENCIES

Design build agreement

The total cost of the project, including the construction of the ethanol plant and start-up expenses, is expected to approximate $103,100,000. The Company has signed a lump sum design-build contract with a contractor, an unrelated party, to design and build the ethanol plant at a total contract price of approximately $67,860,000. As part of the contract, the Company paid a mobilization fee of approximately $5,000,000, subject to retainage. Monthly applications will be submitted for work performed in the previous period. Final payment will be due when final completion has been achieved. The design-build agreement includes a provision whereby the general contractor receives an early completion bonus of $10,000 per day for each day the construction is complete prior to 485 days from the date construction began. However, the total amount paid for the early completion bonus shall not exceed $1,000,000. The contract may be terminated by the Company upon a ten day written notice subject to payment for work completed, termination fees, and any applicable costs and retainage. As of June 30, 2007, the Company has incurred approximately $54,952,000 for these services with approximately $8,466,000 included in construction and retainage payable.

Construction contracts

In March 2007, the Company entered into an agreement with an unrelated party for the construction of a spur track for approximately $3,516,000. The Company will make monthly progress payments until substantial completion at which time all remaining amounts will be due. As of June 30, 2007, the Company has incurred approximately $1,685,000 for these services, all of which is included in construction and retainage payable.

In March 2007, the Company entered into an agreement with an unrelated contractor for the construction of storage silos with fill and unload equipment for approximately $2,547,000. The Company was required to make a down payment of approximately $255,000 at the time the agreement was executed and will make progressive monthly payments thereafter. As of June 30, 2007, the Company has incurred approximately $1,911,000 for these services with approximately $627,000 included in construction and retainage payable.

Grants

In September 2006, the Company entered into a Memorandum of Understanding with the Nebraska Department of Economic Development (“DED”) and the Village of Adams, Nebraska (“Village”) for the award of a $355,000 Community Development Block Grant (“CDBG”) from DED to the Village, $5,000 of which is unconditionally granted for the Village’s costs of administration of the grant, and the remaining $350,000 is conditionally granted to the Village from the DED for a portion of the costs for the development of certain public streets for the benefit of E Energy Adams. The Village will provide matching funds up to $350,000, which will come from tax increment financing funds. E Energy Adams is required to satisfy certain job requirements and if the job requirements are not met, E Energy Adams will be obligated to repay the Village and the Village will be obligated to repay the DED for the conditional amount of $350,000. The job creation and maintenance requirements imposed on E Energy Adams are as follows:

	1.		The Company must create at least 26 new permanent jobs on a full-time basis at our facility in Adams, Nebraska within 18 months from September 1, 2006, and 51% or more of all these jobs must be held by or at least made available to low-to-moderate income persons;

	2.		The Company must maintain the 26 jobs for 12 months from the date of hire for each respective job; and

	3.		The Company must pay all of our employees a minimum hourly rate of $9.50 per hour, and provide all employees with an appropriate employee benefits package.

Utility Contracts

In March 2007, the Company entered into an agreement with an unrelated party for specialty water treatment chemicals, engineering services, environmental support services, and plant startup assistance. The Company will pay approximately $8,400 per month for these services, commencing September 18, 2007 and lasting for a period of three years. The maximum annual cost for chemicals is approximately $111,000. Either party may terminate the agreement by providing a 30 day advance written notice.

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Financial Statements (Unaudited)

June 30, 2007

Marketing Agreement

In March 2007, the Company entered into a marketing agreement with an unrelated party for the marketing, sale and delivery of distiller’s dried grains with solubles (DDGS), wet distillers grains (WDG), and solubles the Company is expected to produce. The Company will receive payment for the products sold based on a percentage (98% for DDGS, 96% for WDG, but not at a price of less than $1.50/ton fee for DDGS and WDG, and a $2.00/ton fee for solubles) of the actual sales price as defined in the agreement. The initial term is for one year commencing as of the startup of production and will continue until terminated by either party providing a 90 day advance written notice.

Corn Contracts

Currently, the Company has forward corn purchase contracts for delivery through March 2009 for a total commitment of approximately $8,900,000. Of the total corn purchase contracts, approximately less than 11% are with members of the Company.

Safety Services Agreement

In June 2007, the Company entered into a safety service agreement with an unrelated party for a safety program, employee manuals and on-site audits of the Company. The Company will pay $38,000 for these services, commencing July 2007 and lasting until November 2008. The Company may terminate the agreement by providing a 60 day advance notice; however no fees shall be reimbursed to the Company. The contracted party may terminate the agreement if certain insurance conditions are not maintained. In such case, a partial rebate of the fee will be negotiated.

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Item 2.		Management’s Discussion and Analysis and Plan of Operations.

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,” “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. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the following factors:

	•		Construction delays and technical difficulties in constructing the plant;

	•		Availability of sufficient capital to construct the plant and begin operations;

	•		Increases in the price of corn as the corn market becomes increasingly competitive;

	•		Our inelastic demand for corn, as it is the only available feedstock for our plant;

	•		Changes in federal and/or state laws (including the elimination of any federal and/or state ethanol tax incentives);

	•		Changes in our business strategy, capital improvements or development plans;

	•		The loss of any license or permit;

	•		Changes in the environmental regulations or in our ability to comply with the environmental regulations that apply to our plant site and our anticipated 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 distillers grains;

	•		Changes and advances in ethanol production technology; and

	•		Competition in the ethanol industry and from other alternative fuel additives.

Our actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including the reasons described in this report. We are not under any duty to update the forward-looking statements contained in this report. We cannot guarantee future results, 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 and the documents that we reference in this report and have filed as exhibits 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

E Energy Adams, LLC is a development-stage Nebraska limited liability company. It was formed on March 25, 2005 for the purpose of raising capital to develop, construct, own and operate a 50 million gallon dry mill corn-based ethanol plant near Adams, Nebraska. References to “we,” “us,” “our” and the “Company” refer to E Energy Adams, LLC. We are in the process of constructing the plant and have not yet engaged in the production of ethanol and distillers grains. Based upon engineering specifications from Fagen, Inc., we expect the ethanol plant to process approximately 20.4 million bushels of corn per year and use as much as 1,870,000 Million British Thermal Units (“MMBtu”) of natural gas per year to produce approximately 55 million gallons of fuel grade ethanol and 186,000 tons of distillers grains for animal feed each year. We expect to market all of the ethanol and distillers grains the plant produces. We expect to complete construction of our plant on our 172 acre site in fall of 2007. As of July 31, 2007, we estimate that construction of our plant is 75% complete.

Our current estimated total project cost is $103,100,000, and we are currently on budget to meet our total project cost. We are financing the development and construction of the ethanol plant with a combination of equity and debt. We raised equity in a public offering registered with the Securities and Exchange Commission and as of our fiscal quarter ended on June 30, 2007, we have issued 4,939 units and received $49,390,000 in offering proceeds. Until we received offering proceeds, our development activities were funded with our seed capital equity of $970,000. Effective February 23, 2007, we formally closed the registered public offering. On August 25, 2006, we entered into a Credit Agreement with Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA (“Farm Credit”) establishing a senior credit facility with Farm Credit for the construction of the plant. The construction financing is in the amount of $49,500,000 consisting of a $35,000,000 term loan and a $14,500,000 revolving loan. We also have entered into a $10,000,000 line of credit. In addition, we received Tax Increment Financing of approximately $5,035,000 (of which $3,865,000 is available for project costs) and we had earned approximately $244,000 in interest on our offering proceeds that were contained in our escrow account prior to their release from escrow on August 11, 2006. Taken together, our current sources of capital total $114,004,000. Therefore, based on our current total project cost estimate of $103,100,000, we expect our equity and debt capital sources to be sufficient to complete plant construction and begin start-up operations.

We have entered into a Lump Sum Design-Build Agreement with Fagen, Inc. to design and build a 50 million gallon per year dry grind ethanol production facility on our plant site located near the village of Adams, and we have engaged Aventine Renewable Energy, Inc. to market our ethanol and Commodity Specialist Company (“CSC”) to market our distillers grains. Subsequent to the quarter end, we were notified that CSC has been purchased by CHS, Inc. and our marketing agreement has been assigned to CHS, Inc.

As of the date of this report, we have obtained all of our necessary environmental permits to construct our plant from the Nebraska Department of Environmental Quality (NDEQ). We will need to obtain additional permits prior to the start up of operations. We are still in the development phase, and until the proposed ethanol plant is operational, we will generate no revenue. We anticipate that accumulated losses will continue to increase until the ethanol plant is operational. Since we have not yet become operational, we do not yet have comparable income, production or sales data.

Plan of Operations for the Next 12 Months

We expect to spend at least the next 12 months (as measured from the date of this report) focused on completion of plant construction, hiring of our remaining necessary employees, and starting operations. We expect construction of our plant to be complete in the next 3-6 months, with production beginning in fall 2007.

Due to our successful completion of the registered offering and the related debt financing, we expect to have sufficient cash on hand to cover all costs associated with construction of the project, including, but not limited to staffing, site development, utilities, construction and equipment acquisition, office costs, audit, legal, compliance and staff training. In the event that we do not have sufficient cash from our registered offering and debt financing, we may seek additional equity, debt or a combination of both. We estimate that it will cost approximately $103,100,000 to complete the project.

Project Capitalization

Seed Capital Offering

Registered Offering

We filed a Registration Statement for an initial public offering of our units with the Securities and Exchange Commission on Form SB-2 (SEC Registration No. 333-123473), as amended, which became effective on May 15, 2006. We issued 4,939 units in the registered offering and have received offering proceeds in the amount of $49,390,000. Effective February 23, 2007, we formally closed the offering..

Senior Debt Financing

On August 25, 2006, we entered into a Credit Agreement with Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA (“Farm Credit”) establishing a senior credit facility with Farm Credit for the construction of a 50 million gallon per year dry mill ethanol plant. The construction financing is in the amount of $49,500,000 consisting of a $35,000,000 term loan and a $14,500,000 revolving loan. The Credit Agreement also included a $3,000,000 line of credit. On May 8, 2007, we entered into a Second Amendment to the Credit Agreement, amending the Credit Agreement, dated August 25, 2006. Under the Second Amendment to the Credit Agreement, our advance limit under the revolving loan has been amended to $3,000,000 until the term loan has been advanced to its entirety. The $3,000,000 line of credit has been increased to $10,000,000, with advances available until February 1, 2008. Upon execution of the Second Amendment to the Credit Agreement we paid Farm Credit Services $50,000 for the re-structuring of the line of credit. Under the Second Amendment to Credit Agreement, we are obligated to repay the line of credit plus accrued interest, unpaid fees, costs or expenses by February 1, 2008.

We are obligated to repay the term construction loan in 29 equal, consecutive, quarterly installments of $1,237,500 plus accrued interest commencing on the first of the month which is six months following substantial completion of our ethanol plant, but no later than April 1, 2008, and the last installment due no later than October 1, 2015. On the earlier of January 1, 2016 or three months following repayment of the term loan we will begin repayment on the revolving term loan in ten equal, consecutive, quarterly principal installments of $1,450,000 plus accrued interest with the last installment due by April 1, 2018. During the term of the construction loan, we are required to make special principal payments in an annual amount equal to 65% of our excess cash flow for each year, not to exceed $2,000,000 in any fiscal year and the aggregate total of those payments will not exceed $8,000,000.

The loans are secured by a first mortgage on our real estate and a lien on all of our personal property. During the term of the loans, we are subject to certain financial loan covenants consisting of a minimum working capital, minimum debt coverage, and minimum tangible net worth. After the construction phase, we are only allowed to make annual capital expenditures up to $500,000 annually without prior approval. We are also prohibited from making distributions to our members; however, for each fiscal year commencing with the fiscal year ending 2008, we may make a distribution to our members of 40% of the net profit for such fiscal year after our lender has received audited financial statements for the fiscal year and provided no event of default or potential default exists. We may exceed 40% only if we have made the required free cash flow payment for that fiscal year. We must be in compliance with all financial ratio requirements and loan covenants before and after any distributions to our members.

Upon an occurrence of an event of default or an event which will lead to our default, Farm Credit may upon notice terminate its commitment to loan funds and declare the entire unpaid balance of the loans, plus accrued interest, immediately due and payable. An event of default includes, but is not limited to, our failure to make payments when due, insolvency, any material adverse change in our financial condition or our breach of any of the covenants, representations or warranties we have given in connection with the transaction.

Tax Increment Financing (“TIF”)

On May 1, 2006, we entered into a Redevelopment Contract with the Community Development Agency of the Village of Adams (the “Authority”) under which the Authority will provide a grant to us to reimburse certain expenditures which are payable from proceeds of the Tax Increment Financing (“TIF”) indebtedness. However, on May 29, 2007 we entered into a First Amended and Restated Redevelopment Contract with the Authority, which increased the assessed valuation of the real estate from $20,000,000 to $32,366,105, which translated to an increase in the amount of our loan proceeds. Pursuant to the contract, the loan proceeds are to be used for “Project costs” as defined in the contract, for the establishment of special funds held by the bond trustee for interest and principal payments and reserves (the “Capitalized Interest Fund” and the “Debt Service Reserve Fund”), and for debt issuance costs.

On June 29, 2007, we entered into a Loan Agreement with Security First Bank and other participants Under the loan agreement, we received a loan proceeds in the amount of $5,035,000. The approximate amounts of the uses of the loan proceeds are as follows: available for Project costs $3,865,000; Capitalized Interest Fund $514,000; Debt Service Reserve Fund $503,000; and debt issuance costs $153,000. This loan bears interest at 9.15%, until the reset date of June 1, 2014, at which time the interest rate will be determined based on the U.S. Treasury Constant Maturity Index average for the prior month, plus 398 bps, not to exceed 10.0% or fall below 7.5%. The loans are secured by and payable from the grant and assignment of the Series A and Series B Notes, pledged revenues, consisting of pledged tax increment revenues, payment in lieu of taxes (PILOT) payments, and liquidated damages amount and amounts on deposit.

We may not convey, assign, or transfer the our project prior to the expiration of the 15 year period without the prior written consent of the Authority. If we were to default on the Contract under circumstances construed to be within our control, liquidated damages plus interest could be charged against the us.

We will be assessed taxes on the value of the Project (“Tax Increment Revenues”) which we will pay to a special debt service fund and then the funds will be used to pay the payments required on the loans. We have guaranteed that if such assessed Tax Increment Revenues are not sufficient for the required bond payments, we will provide such funds as are needed to fund the shortfall.

In connection with the bond issuance, the Authority also authorized a Series 2007B Note to us under which additional funding to the Company is contingently committed. Under the terms of the agreement the Authority may provide additional funding to us up to $2,500,000 to reimburse us for Project costs we have paid. However, any such funding would only be paid to us if there were Tax Increment Revenues remaining once the bonds have been fully paid. This funding commitment bears no interest and no amounts have been recorded in the accompanying financial statements due to the contingent nature of the agreement.

We have also agreed to reimburse Gage County for up to $1,000,000 for the redevelopment of certain county roads near the plant site. In January 2007, we entered into an agreement with Smith Hayes as the exclusive placement agent for this TIF proposal. We paid a non-refundable retainer of $5,000 when we executed the agreement with Smith Hayes and an amount equal to 2% of the total bonds financed was paid at closing.

Nebraska Department of Economic Development Community Development Block Grant

On September 1, 2006, we entered into a Memorandum of Understanding with the Nebraska Department of Economic Development (“DED”) and the Village of Adams, Nebraska (“Village”) for the award of a $355,000 Community Development Block Grant (“CDBG”) from DED to the Village, $5,000 of which is unconditionally granted for the Village’s costs of administration of the grant, and the remaining $350,000 is conditionally granted to the Village from the DED for a portion of the costs for the development of certain public streets for the benefit of E Energy Adams. The Village will provide matching funds up to $350,000, which will come from tax increment financing funds. E Energy Adams is required to satisfy certain job requirements and if the job requirements are not met, E Energy Adams will be obligated to repay the Village and the Village will be obligated to repay the DED for the conditional amount of $350,000. The job creation and maintenance requirements imposed on E Energy Adams are as follows:

	1.		We must create at least 26 new permanent jobs on a full-time basis at our facility in Adams, Nebraska within 18 months from September 1, 2006, and 51% or more of all of these jobs must be held by or at least made available to low-to-moderate income persons;

	2.		We must maintain the 26 jobs for 12 months from the date of hire for each respective job; and

	3.		We must pay all of our employees a minimum hourly rate of $9.50 per hour, and provide all employees with an appropriate employee benefits package.

As of the date of this report, we have received approval from the Governor of the state of Nebraska for this funding.

Plant Construction and Project Development Activities

Plant construction is progressing on schedule with no significant deviation from our original construction timetable to date. We anticipate completion of plant construction during fall 2007. As of July 31, 2007, we estimate that plant construction is approximately 75% complete.

We entered into a Lump Sum Design-Build Agreement with Fagen, Inc. on August 4, 2006 to establish a 50 million gallon per year dry mill ethanol production facility on our plant site located near the Village of Adams, Nebraska. Pursuant to the Lump Sum Design-Build Agreement, the effective date is August 1, 2006. The final Contract Price was set at $67,500,000, based an increase in the Construction Cost Index (“CCI”). Subsequent to the increase in Contract Price due to the CCI, the final Contract Price increased to approximately $67,860,000 due to change orders agreed to by both Fagen, Inc. and E Energy Adams. The Contract Price with Fagen, Inc. is subject to any mutually agreed-upon adjustments and previously paid amounts that may be treated as credits. As part of the contract, we have paid a mobilization fee of $5,000,000. Fagen, Inc. will design and build the plant using ICM, Inc., technology. We currently expect the construction to be completed in fall of 2007; however, there is no assurance or guarantee that construction will stay on schedule or that we will be able to commence operations at the plant by fall 2007.

We also agreed under the Design-Build Agreement with Fagen, Inc. that if the plant was substantially complete within 485 days (16 months) for each day that substantial completion was achieved prior to 485 days from the date construction began, we would pay Fagen, Inc. an early completion bonus of $10,000 per day for each day that substantial completion was achieved prior to 485 days from the date construction began. However, in no event will we have to pay Fagen, Inc. an early completion bonus of more than $1,000,000. We expect that initial start-up and operations of the plant will also be under the general direction and guidance of Fagen, Inc. employees and our own personnel, who will have experience in ethanol production or will have received on-site training provided by Fagen, Inc. We further anticipate that additional on-site support will be provided by Fagen, Inc. for the first 30 days of plant operation.

The construction of our railroad spur track is underway under our agreement with Kelly-Hill Company dated March 23, 2007. The project was designed by Antioch International, Inc. The cost of this construction is approximately $3,516,000. We will make monthly progress payments on the basis of Kelly-Hill’s monthly applications for payment. This construction will provide our plant with access to and from the BNSF Railroad main line, which will allow for the transport of our corn for the plant, as well as for the transport of our ethanol and distiller’s grains.

Marketing and Natural Gas Agreements

We have entered into an ethanol marketing agreement with Aventine Renewable Energy, Inc., an unrelated party, for the marketing, sale and delivery of most of the ethanol produced by E Energy Adams, LLC. Under this agreement, we have the flexibility to market 10% of our ethanol ourselves to local markets. The initial term of the agreement with Aventine will run for three years from October 9, 2006, the date of entering into the agreement. After that, it will automatically renew for successive one year terms, unless terminated by either Party with at least one year written notice prior to such expiration date, or for breach of terms.

We have entered into a distiller’s grain marketing agreement with Commodity Specialist Company (“CSC”), wherein CSC agrees to buy, and we agree to sell, the entire bulk feed grade DDGS, WDG and Solubles output from our plant. The term of this agreement is for one year commencing as of completion of construction and start-up of production of the plant, which is expected to be by the end of 2007. Subsequent to the quarter end, we were notified that CSC has been purchased by CHS, Inc. and our marketing agreement has been assigned to CHS, Inc.

We have also entered into an agreement with Natural Gas Pipeline Company of America for the transportation of natural gas to our plant. Natural Gas Pipeline Company of America will transport the natural gas at an agreed upon rate ranging from $3.0417 to $3.1177 per Dth/month, for up to 4,400 Dth/day, as specified in the agreement. Our service will begin in September of 2007 and will continue for ten years thereafter. We intend to purchase our natural gas from a number of different venders on an as needed basis once we begin production.

Permitting and Regulatory Activities

We are subject to extensive air, water and other environmental regulations and we will need to construct and operate our plant in accordance with a number of environmental permits. As of the date of this report, we have obtained all of the necessary environmental permits to construct our plant from the NDEQ. We will be required to obtain additional permits prior to start-up of our operations. We engaged ICM, Inc. to coordinate and assist us with obtaining certain environmental permits, and to advise us on general environmental compliance. We retained Olsson Associates to obtain our National Pollutant Discharge Elimination System (“NPDES”) permits.

Even though we have received all required permits from the State of Nebraska to construct our ethanol plant, we will be required to obtain additional operational permits as we approach substantial completion of our plant. We may also be subject to regulatory oversight from the EPA. Currently, the EPA’s statutes and rules do not require us to obtain separate EPA approval in connection with the construction and operation of the proposed plant. Nebraska is authorized to enforce the EPA’s federal emissions program. However, the EPA does retain authority to take action if it decides that Nebraska is not correctly enforcing its emissions program. Additionally, environmental laws and regulations, both at the federal and state level, are subject to change, and changes can be made retroactively. Consequently, even though we have the proper permits at the present time, we may be required to invest or spend considerable resources to comply with future environmental regulations or new or modified interpretations of those regulations to the detriment of our financial performance.

Environmental Permits Obtained as of the Date of this Report

	•		Minor construction permit for air emissions

	•		State Archeological and Endangered Species Research and approval from the United States Department of Interior, Fish and Wildlife Service

	•		Above Ground Storage Tank Permit

	•		Waste Water National Pollutant Discharge Elimination System Permits (NPDES Permit)

	•		Industrial Storm Water Discharge Permit and Storm Water Pollution Prevention Program (General NPDES Permits)

Environmental Permits and Plans to be in Place Prior to the Start of Operations

	•		Spill Prevention, Control, and Countermeasures Plan

	•		Risk Management Plan

	•		Alcohol Fuel Producer’s Permit

	•		Hydrostatic Testing Water Discharge Permit

	•		Public Water Supply Permit

There are a number of additional environmental standards which may effect the construction and operation of the plant going forward. The Prevention of Significant Deterioration (“PSD”) regulation creates more stringent and complicated permit review procedures for construction permits. It is possible, but not expected, that the plant may exceed applicable PSD levels for NOx, CO, and VOCs. The plant will also be subject to New Source Performance Standards for both the plant’s distillation processes and the storage of volatile organic compounds used in the denaturing process. These duties include initial notification, emissions limits, compliance, monitoring requirements, and record keeping requirements. Even if we receive all Nebraska environmental permits for our plant, we will also be subject to oversight activities by the EPA. There is always a risk that the EPA may enforce certain rules and regulations differently than Nebraska’s environmental administrators. Nebraska or EPA rules and regulations are subject to change, and any such changes may result in greater regulatory burdens.

Trends and Uncertainties Impacting the Ethanol Industry and Our Future Operations

If we are able to complete construction of the plant and begin operations, we will be subject to industry-wide factors that affect our operating and financial performance. These factors include, but are not limited to, the available supply and cost of corn from which our ethanol and distillers grains will be processed; the cost of natural gas, which we will use in the production process; dependence on our ethanol marketer and distillers grains marketer to market and distribute our products; the intensely competitive nature of the ethanol industry; possible changes in legislation at the federal, state and/or local level; possible changes in federal ethanol tax incentives and the cost of complying with extensive environmental laws that regulate our industry.

We expect ethanol sales to constitute the bulk of our future revenues. Ethanol prices have been much higher than their 10 year average, but are experiencing a recent decline and our profit margins may not be as high as they have been in the industry over the past few years once we are operational. A number of factors have contributed to the decline in the price of ethanol, including but not limited to the increased price of corn. In addition, the total domestic production of ethanol is at an all time high, and the ethanol supply is expected to exceed current demand projections by the end of 2007. A greater supply of ethanol on the market from other plants could reduce the price we are able to charge for our ethanol. This would have a negative impact on our future revenues once we become operational. There also exists the potential for a “blend wall problem”, if the expanded ethanol production exceeds the capacity for blending such ethanol into gasoline. Thus, due to the anticipated increase in the supply of ethanol from new ethanol plants scheduled to begin production and the expansion of current plants, we believe current price levels will continue to be subject to downward pressure.

The direct competition of local ethanol plants could significantly affect our ability to operate profitably. A greater supply of ethanol on the market from other plants could reduce the price we are able to charge for our ethanol. This would have a negative impact on our future revenues once we become operational. Our ability to commence operations as quickly as possible will have a significant impact on our ability to be successful.

In order to sustain the ethanol market, the demand for ethanol must meet the current increase in supply. Increased gasoline prices, firm crude oil and gas markets, Federal and State legislative support, a positive political environment and increased consumer acceptance and exposure to ethanol would have a positive impact on the demand for ethanol and we would expect such increased demand to have a positive impact on our ability to operate profitably. For instance, if gasoline prices continue to trend higher, consumers will look for lower priced alternative fuels. Since ethanol blended fuel is currently a cheaper alternative for consumers, the demand for such ethanol blended fuel could increase, thus increasing the overall demand for ethanol. This could positively affect our earnings. However, a greater supply of ethanol on the market from additional plants and plant expansions could reduce the price we are able to charge for our ethanol, especially if supply outpaces demand.

Demand for ethanol may also increase as a result of consumption of E85 fuel. E85 is a blend of 70% to 85% ethanol and gasoline. According to the Energy Information Administration, E85 consumption is projected to increase from a national total of 11 million gallons in 2003 to 47 million gallons in 2025. E85 is used as an aviation fuel and as a hydrogen source for fuel cells. In the United States, there are currently about 6 million flexible fuel vehicles capable of operating on E85 and approximately 1,244 retail stations supplying it. Automakers have indicated plans to produce an estimated 4 million more flexible fuel vehicles per year.

Consumer resistance to the use of ethanol may affect the demand for ethanol, which could affect our ability to operate profitably and may negatively impact the value of your investment. Some individuals believe that use of ethanol has a negative impact on prices at the pump or that it reduces fuel efficiency to such an extent that it costs more to use ethanol than it does to use gasoline. Many also believe that ethanol adds to air pollution and harms car and truck engines. Still other consumers believe that the process of producing ethanol actually uses more fossil energy, such as oil and natural gas, than the amount of energy contained in the ethanol produced. These consumer beliefs could potentially be wide-spread. If consumers choose not to buy ethanol, it would affect the demand for the ethanol we produce which could also negatively affect our ability to sell our product and our profitability.

The support for and use of ethanol and ethanol-blended fuel has been and will continue to be supported by Federal and State legislation. The Energy Policy Act of 2005 includes various provisions that are expected to favorably impact the ethanol industry by enhancing both the production and use of ethanol. It created a 7.5 billion gallon renewable fuels standard (RFS). The RFS is a national flexible program that promotes ethanol production while allowing refiners to use renewable fuel blends in those areas where it is most cost-effective rather than setting requirements for ethanol use in any particular area or state. The RFS began at 4 billion gallons in 2006, and increases to 7.5 billion gallons by 2012. According to the Renewable Fuels Association, as of August 1, 2007, there were 124 operational ethanol plants nationwide that have the capacity to produce approximately 6.48 billion gallons annually. Thus, current ethanol production capacity exceeds the 2007 RFS requirement of 4.7 billion gallons. This could lead to a short-term oversupply. However, U.S. production of ethanol in 2006 also exceeded the RFS requirement of 4 billion gallons, as total U.S. production for 2006 was approximately 4.8 billion gallons. However, according to the Renewable Fuels Association, the demand for ethanol in 2006 was approximately 5.3 billion gallons, which would indicate that demand for ethanol remains strong. That being said, ethanol production capacity for 2007 is expected to increase significantly due to a number of plants coming on line or expanding their production capacity. Thus, we believe current price levels are subject to downward pressure. This could have an adverse effect on our future earnings.

There has been recent Congressional activity in both the Senate and the House of Representatives to accelerate the current RFS and provide additional incentives for the use of alternative fuels. The BioFuels Security Act, known as S. 23 or H.R. 559, was reintroduced on January 4, 2007, by sponsors Tom Harkin, Richard Luger, and others. If passed, the legislation would accelerate the current renewable fuels standard by requiring 10 billion gallons of renewable fuels to be used by 2010, 30 billion gallons by 2020 and 60 billion gallons by 2030. Other provisions would require additional E85 pumps at branded gasoline stations, increased use of alternative fuels in the federal fleet and an increase in the percentage of flex fuel vehicles produced. The Senate bill (S. 23) has been referred to the Senate Committee on Commerce, Science and Transportation and the corresponding bill in the House of Representatives (H.R. 559) has been referred to the Subcommittee on Government Management, Organization and Procurement. This legislation has not been signed into law, and there is no certainty that they will be passed. In addition, there is no certainty that these pieces of legislation, if passed, would provide any benefit to us or to the industry as a whole.

The Energy Policy Act of 2005 also amended the definition of “small ethanol producer” to increase the size of the plant eligible for the small producer tax credit from 30 million gallons per year to 60 million gallons per year. Small ethanol producers are allowed a 10-cent per gallon production income tax credit on up to 15 million gallons of production annually. The tax credit is capped at $1.5 million per year per producer. The credit is effective for taxable years ending after the date of enactment through 2010. Since we expect to now qualify as a small ethanol producer under the Act, we expect to be eligible for this tax credit this taxable year and to pass this credit on to our members.

The Energy Policy Act of 2005 also created a new credit that permits taxpayers to claim a 30% credit (up to $30,000) for the cost of installing clean-fuel vehicle refueling equipment, such as an E85 fuel pump, to be used in a trade or business of the taxpayer or installed at the principal residence of the taxpayer. Under the provision, clean fuels are any fuel, at least 85% of the volume of which consists of ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel. The provision is effective for equipment placed in service after December 31, 2005, and before January 1, 2010. While it is unclear how this credit will affect the demand for ethanol in the short term, we expect it will help raise consumer awareness of alternative sources of fuel and could positively impact future demand for ethanol.

Ethanol production is also expanding internationally. Imported ethanol is generally subject to a $0.54 per gallon tariff that was designed to offset the $0.51 per gallon ethanol incentive available under the federal excise tax program for refineries that blend ethanol in their fuel. There is, however, a special exemption from this tariff under a program known as the Caribbean Basin Initiative for ethanol imported from 24 countries in Central America and the Caribbean Islands, which is limited to a total of 7% of U.S. ethanol production per year. Imports from the exempted countries may increase as a result of new plants in development. Since production costs for ethanol in these countries are significantly less than what they are in the U.S., the duty-free import of ethanol through the countries exempted from the tariff may negatively affect the demand for domestic ethanol and the price at which we sell our ethanol.

The United States Supreme Court recently held in the case of Massachusetts v. EPA , that the EPA has a duty under § 202 of the Clean Air Act to regulate the level of emissions of the four main “greenhouse gases”, including carbon dioxide, from new motor vehicles. Other similar lawsuits have been filed seeking to require the EPA to regulate the level of carbon dioxide emissions from stationary sources, such as ethanol plants. If these lawsuits are successful, our cost of complying with new or changing environmental regulations may increase in the future.

Technology Developments

Ethanol is typically produced from the starch contained in grains, such as corn. However, ethanol can potentially be produced from cellulose, the main component of plant cell walls and the most common organic compound on earth. The main attraction towards cellulosic ethanol is based on the idea that the products used to make it are less expensive than corn. However, the downfall is that the technology and equipment needed to convert such products into ethanol are more complicated and more expensive than the technology currently used for the production of corn based ethanol. Recently, there has been an increased interest in cellulosic ethanol due to the relatively low maximum production capacity of corn-based ethanol. The products used to produce cellulosic ethanol exist in a far greater quantity than corn, and therefore cellulosic ethanol production may be an important aspect of expanding ethanol production capacity. Recognizing this need, Congress supplied large monetary incentives in the Energy Policy Act of 2005 to help initiate the creation of cellulosic ethanol plants in the United States. If such cellulosic ethanol plants are constructed and begin production on a commercial scale, the production of potentially lower-cost cellulosic ethanol may hinder our ability to compete effectively.

Trends and Uncertainties Impacting the Corn and Natural Gas Markets and Our Future Cost of Goods Sold

We expect our future cost of goods sold will consist primarily of costs relating to the corn and natural gas supplies necessary to produce ethanol and distillers grains for sale. We anticipate that the cost of corn will be the largest cost of producing our ethanol, consisting of between 60% and 70% of our total cost of production, followed by natural gas as the second largest cost of producing our ethanol.

The increased production of ethanol has placed upward pressure on the price and supply of corn, resulting in higher than normal corn prices. The spread between petroleum prices and corn prices has narrowed, which has reduced ethanol plant profit margins from the levels reached during 2006. However, the rise in corn prices has motivated farmers to plant additional acres of corn in 2007, which has helped to offset the upward pressure on the price of corn in the short-term. According to a July 12, 2007 report released by the United States Department of Agriculture, corn growers planted approximately 92.9 million of acres of corn in 2007, which is up 19% from 2006. Current market trends show that U.S. corn prices are currently averaging about $3.41 per bushel, and may be slightly lower for fall 2007 than the previous quarter. However, some local crops in our area are being negatively impacted by drought. The result is that national trends could lead to lower corn prices, but these could be partially offset by negative local conditions.

Generally, higher corn prices will produce lower profit margins. There is no assurance that a shortage will not develop, particularly with other area ethanol plants competing for corn, an extended drought or other production problems. Because the market price of ethanol is not related to grain prices, ethanol producers are generally not able to compensate for increases in the cost of grain feedstock through adjustments in prices charged for their ethanol. We, therefore, anticipate that our plant’s profitability will be negatively impacted during periods of high corn prices. However, we are building additional grain storage silos on our site, which will enable us to increase the percentage of corn purchased directly from local producers rather than purchasing through the commercial industry. This will lower our costs for corn procurement and we also expect that our usage of local producer corn will yield more gallons of ethanol per bushel due to fewer quality concerns with producer corn.

We have hired a Commodities Manager to ensure the consistent scheduling of corn deliveries and to establish and fill forward contracts. The Commodities Manager will utilize forward contracting and hedging strategies, including certain derivative instruments such as futures and option contracts, to manage our commodity risk exposure and optimize finished product pricing on our behalf. We anticipate that most of our grain will be acquired in this manner. Forward contracts allow us to purchase corn for future delivery at fixed prices without using the futures market. The corn futures market allows us to trade in standard units of corn for delivery at specific times in the future. Option contracts consist of call options (options to purchase a fixed amount of a commodity) and put options (options to sell a fixed amount of a commodity). We expect to use a combination of these derivative instruments in our hedging strategies to help guard against corn price volatility. Hedging means protecting the price at which we buy corn and the price at which we will sell our products in the future. It is a way to attempt to reduce the risk caused by price fluctuation. The effectiveness of such hedging activities will depend on, among other things, the cost of corn and our ability to sell enough ethanol and distillers grains to use all of the corn subject to futures and option contracts we have purchased as part of our hedging strategy. Although we will attempt to link hedging activities to sales plans and pricing activities, such hedging activities themselves can result in additional costs because price movements in corn contracts are highly volatile and are influenced by many factors that are beyond our control. We may incur such costs and they may be significant.

Natural gas is also an important input commodity to our manufacturing process. We estimate that our natural gas usage will be approximately 10% to 15% of our annual total production cost. We will use natural gas to (a) operate a boiler that provides steam used in the production process, (b) operate the thermal oxidizer that will help us comply with emissions requirements, and (c) dry our distillers grain products to moisture contents at which they can be stored for long periods of time, and can be transported greater distances. Recently, the price of natural gas has risen along with other energy sources. Natural gas prices are considerably higher than the 10-year average. Global demand for natural gas is expected to continue to increase, further driving up prices. As a result, we expect natural gas prices to remain higher than average in the short to mid-term. Increases in the price of natural gas will increase our cost of production and may negatively impact our future profit margins.

Operating Expenses

As the ethanol plant nears completion, we expect to incur various operating expenses, such as supplies, utilities and salaries for administration and production personnel. Along with operating expenses, we anticipate that we will have significant expenses relating to financing and interest. We have allocated funds in our budget for these expenses, but cannot assure that the funds allocated will be sufficient to cover these expenses. We may need additional funding to cover these costs if sufficient funds are not available or if costs are higher than expected.

Liquidity and Capital Resources

Estimated Sources of Funds

The following schedule sets forth our current sources of funds to capitalize the construction and start-up of operations of the ethanol plant to be located near Adams, Nebraska. See Project Capitalization under the section entitled “Management’s Discussion and Analysis and Plan of Operations” above.


			Percent
Sources of Funds		Amount	of total
Offering Proceeds (1)	$	49,390,000		43.34	%
Seed Capital Proceeds (2)	$	970,000		0.85	%
Senior Debt Financing (3)	$	49,500,000		43.43	%
Revolving Line of Credit (4)	$	10,000,000		8.77	%
Estimated Tax Increment Financing (5)	$	3,865,000		3.40	%
Interest on Escrow (6)		244,000		0.21	%

Total Sources of Funds	$	113,969,000		100.00	%


(1)		We received funds from investors for approximately $49,390,000.

(2)		We have issued a total of 194 units to our seed capital investors at a price of $5,000 per unit in our private placement in exchange for proceeds of $970,000.

(3)		We currently have entered into a definitive loan agreement with a senior lender for debt financing in the amount of $49,500,000.

(4)		In addition to our debt financing of $49,500,000, we also have a $10,000,000 revolving line of credit with our senior lender.

(5)		We have entered into a First Amended and Restated Redevelopment Contract with the Village of Adams for the redevelopment of our plant site. The Village has issued TIF indebtedness in the amount of $5,035,000 (of which $3,865,000 was received in proceeds) to assist the Company in the costs of redeveloping the site.

(6)		We earned approximately $244,000 in interest on our escrow account containing the offering proceeds prior to their release from escrow.

Estimated Use of Proceeds

We expect the project to cost approximately $103,100,000 to complete. The following table reflects our estimate of costs and expenditures for the ethanol plant we are building near Adams, Nebraska. These estimates are based on discussions with Fagen, Inc., ICM Inc., our lenders and management research. The following figures are intended to be estimates only, and the actual use of funds may vary significantly from the descriptions given below due to a variety of factors described elsewhere in this report. As the project progresses, any material changes will be reflected in a new budget.


				Percent
Use of Proceeds	Amount			of Total
Plant construction	$	65,900,000	⁽¹⁾		63.92	%
Road and ditch construction costs		750,000			0.73	%
Land cost		1,100,000			1.06	%
Site development costs		5,278,000			5.12	%
Construction contingency		3,600,000			3.50	%
Construction performance bond		500,000			0.48	%
Construction insurance costs		120,000			0.12	%
Administrative building		400,000			0.39	%
Office equipment		75,000			0.07	%
Computers, Software, Network		150,000			0.15	%
Rail infrastructure		3,594,750			3.49	%
Rolling stock		515,000			0.50	%
Fire Protection / Water Supply		3,180,000			3.08	%
Water treatment system		1,500,000			1.45	%
Capitalized interest		2,000,000			1.94	%
Facility for Additional Grain Storage		3,000,000			2.91	%


Start up costs:
Financing costs		506,250	0.49	%
Organization costs		1,300,000	1.26	%
Pre production period costs		1,345,000	1.30	%
Inventory — working capital		3,000,000	2.91	%
Inventory — corn		2,000,000	1.94	%
Inventory — chemicals and ingredients		150,000	0.15	%
Inventory — work in process — Ethanol		1,500,000	1.45	%
Inventory — work in process — DDGS		500,000	0.48	%
Inventory spare parts — process equipment		750,000	0.73	%
Operating costs:
Office labor, expense and equipment		165,000	0.16	%
Telephone, Internet, Postage service		25,500	0.03	%
Directors Expense		30,000	0.03	%
Payroll Tax		17,000	0.02	%
Accounting and Legal Fees		55,000	0.05	%
Insurance— D & O and Operations		70,000	0.07	%
Miscellaneous		23,500	0.02	%

Total	$	103,100,000	100.00	%


(1)		Our original Contract Price with Fagen, Inc. was approximately $65,900,000. This was increased in October, 2006, to approximately $67,500,000, based on the increase in the Construction Cost Index (“CCI”) as of October 2006 compared to our baseline index as of April 2006. Subsequent to the increase based on the CCI, the Contract Price has been increased to approximately $67,860,000 due to change orders agreed to by both Fagen, Inc. and E Energy Adams. We anticipate that our Construction Contingency will cover the increase to the Contract Price.

Quarterly Financial Results for Fiscal Quarter Ended June 30, 2007

As of June 30, 2007, we have total assets of approximately $76,917,000 consisting primarily of cash, cash equivalents, land and construction in progress. We have current liabilities of approximately $16,163,000 consisting primarily of construction and retainage payable. Total long-term liabilities as of June 30, 2007 were approximately $13,398,000. Total members’ equity as of June 30, 2007, was approximately $47,356,000. Since our inception, we have generated no revenue from operations. For the three months ended June 30, 2007, we had a net loss of approximately $644,000. This net loss includes a loss on derivative instruments of approximately $287,000. While the plant has not yet begun production, we are currently entering into derivative instruments for hedging purposes for the corn supply for our plant as we near our anticipated start-up date. For the period from inception to June 30, 2007, we had a net loss of approximately $2,601,000, primarily due to start-up business costs.

Derivative Instruments

In order to reduce risk caused by market fluctuations, we hedge our anticipated corn purchases by entering into futures contracts. These contracts are used with the intention to fix the purchase price of our anticipated requirements of corn in production activities. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter markets. The fair value of derivatives is continually subject to change due to changing market conditions. We do not formally designate these instruments as hedges and, therefore, records in earnings adjustments caused from marking these instruments to market on a monthly basis.

As of June 30, 2007, we had recorded restricted cash, related to derivative instruments, of approximately $2,285,000 and a corresponding liability related to corn options and future positions of approximately $1,683,000. We have recorded a combined loss of approximately $1,547,000, which includes a realized gain of approximately $136,000 and an unrealized loss of approximately $1,683,000, for the nine month period ended June 30, 2007.

Employees

Prior to commencement of operations, we intend to hire approximately 40 full-time employees. Approximately sixteen of our employees will be involved primarily in management and administration and the remainder will be involved primarily in plant operations.

The following table sets forth the anticipated positions within the plant and whether the particular positions are currently filled.


	# Full-Time
	Expected		# Positions
Position	Personnel		Filled
CEO		1		1
CFO		1
Plant Manager		1		1
Commodities Manager		1		1
Production Manager		1		1
EHS Manager		1		1
Human Resource Manager		1		1
Purchasing Agent/Planner Scheduler		1
Accounting/Clerical		4		3
Lab Manager		1		1
Lab Technician		1
Maintenance Manager		1		1
Maintenance Technicians		3
Material Handlers		2
Commodity Department Staff		4		4
Plant Operators/Shift Supervisors		16

TOTAL		40		15

The positions, titles, job responsibilities and number allocated to each position may differ when we begin to employ individuals for each position. As of the date of this report, we have hired 15 employees, including our CEO, Human Resources Manager, Plant Manager, Commodities Manager, Production Manager, Environmental, Health and Safety Manager, Maintenance Manager, four commodities staff personnel and three accounting/clerical staff personnel.

On July 17, 2007, Larry G. Brees tendered his resignation as Chief Financial Officer, effective as of July 17, 2007. We agreed to the terms of a severance agreement under which Mr. Brees received consideration of $15,834. In addition, Mr. Brees received $1,977 to cover approximate costs of health and dental insurance coverage for two months. The confidentiality, non-competition, and non-solicitation provisions in Mr. Brees’ pre-existing employment agreement are to remain in full force and effect.

Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements.


Item 3.		Controls and Procedures

Our management, including our Chief Executive Officer (the principal executive officer), Carl D. Sitzmann, along with our Treasurer (the principal financial and accounting officer), Nicholas J. Cusick, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2007. Based upon this review and evaluation, these officers believe that our disclosure controls and procedures are effective in ensuring that material information related to us is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission.

Our management, consisting of our Chief Executive Officer and our Treasurer, have reviewed and evaluated any changes in our internal control over financial reporting that occurred as of June 30, 2007, 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

None.


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

During the time period beginning with E Energy Adams’ formation on March 25, 2005 and ending on May 31, 2005, we raised $970,000 in seed capital through a private placement. We issued a total of 194 units to our seed capital investors at a price of $5,000 per unit. Our seed capital private placement was made directly by us without use of an underwriter or placement agent and without payment of commissions or other remuneration.

Our private placement was made under the registration exemption provided for in Section 4(2) of the Securities Act and Rule 504 of Regulation D. With respect to the exemption, neither we, nor any person acting on our behalf, offered or sold the securities by means of any form of general solicitation or advertising. Prior to making any offer or sale, we had reasonable grounds to believe and believed that each prospective investor was capable of evaluating the merits and risks of the investment and were able to bear the economic risk of the investment. Each purchaser represented in writing that the securities were being acquired for investment for such purchaser’s own account and agreed that the securities would not be sold without registration under the Securities Act or exemption therefrom. Each purchaser agreed that a legend was placed on each certificate evidencing the securities stating the securities have not been registered under the Securities Act and setting forth restrictions on their transferability.

We filed a Registration Statement for an initial public offering of our units with the Securities and Exchange Commission on Form SB-2 (SEC Registration No. 333-128902), which was declared effective on May 15, 2006. We commenced our initial public offering of our units shortly thereafter. Certain of our officers and directors offered and sold the units on a best efforts basis without the assistance of an underwriter. We did not pay these officers or directors any compensation for services related to the offer or sale of the units.

We registered a total of 5,810 units at $10,000 per unit for an aggregate maximum gross offering price of $58,100,000. As of the date of this report, we have issued 4,939 units, for an aggregate amount of $49,390,000. Our units are subject to transfer restrictions under our operating agreement and by applicable tax and securities laws. Except for transfers in limited circumstances, such as a transfer made without consideration to or in trust for an investor’s descendants or spouse or involuntary transfers by operation of law, members will not be able to transfers their units prior to the time that our ethanol plant is substantially operational. Once we begin substantial operations, transfers will still be subject to approval by our board and must be made in compliance with applicable tax and securities laws. As a result, investors will not be able to easily liquidate their investment in our company. Pursuant to our prospectus, all subscription payments from the offering were deposited in an escrow account. On August 11, 2006, we met the conditions to breaking escrow and received our offering proceeds at that time. We closed the offering on February 23, 2007.

The following is a breakdown of units registered and units sold in the offering as of June 30, 2007:


	Aggregate price		Aggregate price
Amount	of the amount		of the amount
Registered	registered	Amount Sold	sold
5,800	$58,000,000	4,939	$49,390,000

Our total expense related to the registration and issuance of these units was approximately $402,600, which was netted against the offering proceeds when the units were issued and the offering proceeds were released from escrow in August 2006. All of these expenses were direct or indirect payments to unrelated parties. Our net offering proceeds, including the $970,000 we raised in seed capital, after deduction of expenses were approximately $49,957,000. The following table describes our approximate use of net offering proceeds from the date of effectiveness of our registration statement (May 15, 2006) through our quarter ended June 30, 2007:


Plant Construction⁽¹⁾	$	45,279,000
Financing Costs⁽²⁾	$	424,000
Real Estate Purchases and Land Improvements⁽³⁾	$	1,438,000
Repayment of Indebtedness⁽⁴⁾	$	2,000,000
Other Expenses⁽⁵⁾	$	816,000

Total	$	49,957,000


(1)		This includes approximate expenses incurred as of June 30, 2007 for plant construction, rail infrastructure construction, and natural gas pipeline construction and maintenance and other miscellaneous equipment and construction costs.

(2)		We incurred approximately $424,000 in a bank commitment fee for our senior debt financing and TIF funds.

(3)		We have paid approximately $1,438,000 to purchase and improve the real estate for our plant site.

(4)		We incurred approximately $2,000,000 for the repayment of our bridge loan.

(5)		This includes payments to directors Bill Riechers and Jack Alderman, and former director Everett Larson pursuant to consulting agreements entered into between the forgoing individuals and E Energy Adams.

All of the foregoing payments were direct or indirect payments to persons or entities other than our directors, officers, or unit holders owning 10% or more of our units, except for the payments to Bill Riechers, Jack Alderman and Everett Larson.


Item 3.		Defaults Upon Senior Securities

None.


Item 4.		Submission of Matters to a Vote of Security Holders

None.


Item 5.		Other Information

None.


Item 6.		Exhibits

The following exhibits are incorporated by reference in this report:


Exhibit			Method of
No.		Description	Filing

	10.25	First Amended and Restated Redevelopment Agreement between E Energy Adams, LLC and the Village of Adams dated May 29, 2007	*

	10.26	Loan Agreement between E Energy Adams, LLC and Security First Bank dated June 29, 2007	*

	31.1	Certificate pursuant to 17 CFR 240 15d-14(a)	*

	31.2	Certificate pursuant to 17 CFR 240 15d-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.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	E ENERGY ADAMS, LLC
Date: August 14, 2007	/s/ Carl D. Sitzmann
	Carl D. Sitzmann
	Chief Executive Officer


Date: August 14, 2007	/s/ Nicholas J. Cusick
	Nicholas J. Cusick
	Treasurer and Director (Principal Financial Officer)


	Page No.

PART I. FINANCIAL INFORMATION		3

Item 1. Financial Statements.		3

Item 2. Management’s Discussion and Analysis and Plan of Operations		14

Item 3. Controls and Procedures		27

PART II. OTHER INFORMATION		27

Item 1. Legal Proceeding		27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27

Item 3. Defaults Upon Senior Securities		28

Item 4. Submission of Matters to a Vote of Security Holders		28

Item 5. Other Information		28

Item 6. Exhibits		29

SIGNATURES		29

Exhibit 10.25
Exhibit 10.26
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

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	Quarter			Quarter
	Ended			Ended
	June 30,			June 30,
	2007			2006
	(Unaudited)			(Unaudited)

Revenues	$	—		$	—

Operating Expenses
Professional and consulting fees		53,900			180,687
Project coordinator		—			24,585
General and administrative		359,993			96,894

Total operating expenses		413,893			302,166


Operating Loss		(413,893	)		(302,166	)

Other Income (Expense)
Other income		1,600			—
Loss on derivative instruments		(287,404	)		—
Interest income		55,287			2,998
Interest expense		—			(30,082	)

Total other expense		(230,517	)		(27,084	)


Net Loss	$	(644,410	)	$	(329,250	)


Weighted Average Units Outstanding		5,133			194


Net Loss Per Unit	$	(126	)	$	(1,697	)