10QSB

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 March 31, 2008

OR

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)

13238 East Aspen Road
Adams, NE 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 April 30, 2008 there were 5,133 units outstanding.

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

INDEX

	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		22
PART II. OTHER INFORMATION		22
Item 1. Legal Proceeding		22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		22
Item 3. Defaults Upon Senior Securities		22
Item 4. Submission of Matters to a Vote of Security Holders		23
Item 5. Other Information		23
Item 6. Exhibits		24
SIGNATURES		24
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

E ENERGY ADAMS, LLC

Condensed Balance Sheet

	March 31,
	2008
	(Unaudited)
ASSETS
Current Assets
Cash and equivalents	$	4,547,799
Restricted cash		1,469,973
Trade accounts receivable		5,134,370
Inventories		11,386,921
Prepaid and other		1,213,369
Total current assets		23,752,432
Property and Equipment
Land		1,054,282
Land improvements		7,831,832
Computers and office equipment		896,366
Buildings		1,503,913
Equipment		76,622,613
Railroad improvements		5,420,982
Total property and equipment		93,329,988
Less accumulated depreciation		2,491,905
Net property and equipment		90,838,083
Other Assets
Restricted cash		520,983
Investments and other		94,823
Debt issuance costs, net of amortization		477,388
Other intangibles, net of amortization		979,166
Total other assets		2,072,360
Total Assets	$	116,662,875
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities
Additional revolving loan	$	9,999,970
Current maturities of long-term debt		4,959,996
Accounts payable		2,049,153
Construction and retainage payable		116,539
Construction and retainage payable — related party		150,000
Accrued expenses		670,906
Derivative instruments		1,197,389
Total current liabilities		19,143,953
Long-Term Debt, less current maturities		52,130,081
Note payable — related party		1,000,000
Members’ Equity
Member contributions, net of costs related to capital contributions, 5,133 units outstanding at March 31, 2008 and September 30, 2007		44,388,841
Total members’ equity		44,388,841
Total Liabilities and Members’ Equity	$	116,662,875

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

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E ENERGY ADAMS, LLC

Condensed Statement of Operations

	Quarter			Quarter
	Ended			Ended
	March 31,			March 31,
	2008			2007
	(Unaudited)			(Unaudited)
Revenues	$	32,298,172		$	—
Cost of Goods Sold		28,498,489			—
Gross Profit (Loss)		3,799,683			—
Operating Expenses
Professional and consulting fees		156,104			140,671
General and administrative		794,173			219,699
Total operating expenses		950,277			360,370
Operating Income (Loss)		2,849,406			(360,370	)
Other Income (Expense)
Other income		106,488			145,276
Loss on derivative instruments		—			(1,259,124	)
Interest income		20,146			223,658
Interest expense		(1,170,396	)		(6,725	)
Total other income (expense)		(1,043,762	)		(896,915	)
Net Income (Loss)	$	1,805,644		$	(1,257,285	)
Weighted Average Units Outstanding — basic and diluted		5,133			5,133
Net Income (Loss) Per Unit — basic and diluted	$	351.77		$	(244.94	)

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

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E ENERGY ADAMS, LLC

Condensed Statement of Operations

	Six Months			Six Months
	Ended			Ended
	March 31,			March 31,
	2008			2007
	(Unaudited)			(Unaudited)
Revenues	$	49,263,451		$	—
Cost of Goods Sold		47,720,126			—
Gross Profit (Loss)		1,543,325			—
Operating Expenses
Professional and consulting fees		373,085			291,728
General and administrative		1,599,742			335,419
Total operating expenses		1,972,827			627,147
Operating Income (Loss)		(429,502	)		(627,147	)
Other Income (Expense)
Other income		131,012			145,276
Loss on derivative instruments		—			(1,259,124	)
Interest income		39,774			606,970
Interest expense		(1,944,484	)		(6,725	)
Total other income (expense)		(1,773,698	)		(513,603	)
Net Income (Loss)	$	(2,203,200	)	$	(1,140,750	)
Weighted Average Units Outstanding — basic and diluted		5,133			5,133
Net Income (Loss) Per Unit — basic and diluted	$	(429.22	)	$	(222.24	)

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

5

E ENERGY ADAMS, LLC

Condensed Statement of Cash Flows

	Six Months			Six Months
	Ended			Ended
	March 31,			March 31,
	2008			2007
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities
Net loss	$	(2,203,200	)	$	(1,140,750	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,569,361			5,709
Dividend income		—			(145,276	)
Change in fair value of derivative instruments		1,181,700			1,441,581
Changes in assets and liabilities
Restricted cash		(1,130,465	)		(1,258,457	)
Accounts receivable		(5,134,370	)		—
Prepaid and other		(975,385	)		96,676
Inventories		(11,229,859	)		—
Accounts payable		1,710,195			(34,959	)
Accrued expenses		278,241			27,865
Net cash used in operating activities		(14,933,782	)		(1,007,611	)
Cash Flows from Investing Activities
Proceeds from dividends		—			52,840
Payments for investments		—			(1,000	)
Payments for other intangibles		(571,080	)		—
Capital expenditures		(17,640,491	)		(31,720,939	)
Net cash used in investing activities		(18,211,571	)		(31,669,099	)
Cash Flows from Financing Activities
Payments for debt issuance costs		(6,315	)		—
Proceeds from additional revolving loan		14,500,000			1,076,000
Proceeds from term loans		22,253,071			—
Change in restricted cash		175,487			—
Net cash provided by financing activities		36,922,243			1,076,000
Net Increase (Decrease) in Cash and Equivalents		3,776,890			(31,600,710	)
Cash and Equivalents — Beginning of Period		770,909			40,916,036
Cash and Equivalents — End of Period	$	4,547,799		$	9,315,326
Supplemental Cash Flow Information
Cash paid during the period for:
Interest		1,728,974			—
Capitalized interest		249,671			—
Total	$	1,978,645		$	—
Supplemental Disclosure of Noncash Investing and Financing Activities
Construction costs in accounts payable	$	266,539		$	8,005,922
Construction costs in Note payable, related party	$	1,000,000		$	—
Investment — dividend reinvestment	$	—		$	92,436

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

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E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Unaudited Financial Statements

March 31, 2008

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, 2007, contained in the Company’s annual report on Form 10-KSB.

In the opinion of management, the interim 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. The Company was in the development stage until October 2007, when the Company commenced 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.

Revenue Recognition

The Company sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. The Company’s products are sold FOB shipping point.

In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, marketing fees and commissions due to the marketers are deducted from the gross sales price at the time payment is remitted to the Company. Commissions were approximately $488,000 for the six months ended March 31, 2008. No commissions were paid for the period ending March 31, 2007.

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E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Unaudited Financial Statements

March 31, 2008

Cash and Equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents consist of a money market account and a certificate of deposit and totaled approximately $2,540,000 at March 31, 2008.

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

Restricted Cash

Restricted cash consists of capitalized interest and debt reserve funds, plus interest income, related to the Company’s Tax Increment Financing loan, and totaled approximately $860,000 at March 31, 2008 (Note 4). Additionally, the Company has restricted cash of approximately $1,131,000 related to its derivative instruments (Note 3).

Accounts Receivable

Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral.

Accounts receivable are recorded at their estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company’s credit terms. Accounts considered uncollectible are written off. The Company’s estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. At March 31, 2008, the Company was of the belief that such amounts would be collectible and thus an allowance was not considered necessary. It is possible this estimate will change in the future.

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 initiated operations in October 2007 and began depreciating the plant at that time. Depreciation is computed using the straight-line method over the following estimated useful lives:

Land improvements	15 years
Office building	20 years
Office equipment	3-7 years
Plant and process equipment	7-20 years

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E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Unaudited Financial Statements

March 31, 2008

Environmental Liabilities

The Company’s operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices and procedures in the areas of pollution control, occupational health, and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. No liabilities were recorded at March 31, 2008 or 2007.

Fair Value of Financial Instruments

The carrying value of cash and equivalents approximates their fair value. The Company believes the carrying amount of derivative instruments approximates fair value based on quoted market prices.

It is not currently practicable to estimate fair value of the additional revolving loan or long-term debt. Because these agreements contain certain unique terms, conditions, covenants, and restrictions, as discussed in Note 4, there are no readily determinable similar instruments on which to base an estimate of fair value.

Net Income (Loss) per Unit

Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members’ units outstanding during the period. Diluted net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members’ units and members’ unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, the Company’s basic and diluted net incomes (loss) per unit are the same.

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E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Unaudited Financial Statements

March 31, 2008

2. INVENTORIES

Inventories consist of the following as of March 31, 2008:

Raw materials	$	7,726,002
Work in progress		1,085,268
Finished goods		1,832,263
Parts		743,388
Total	$	11,386,921

3. DERIVATIVE INSTRUMENTS

In order to reduce risk caused by market fluctuations, the Company hedges its anticipated corn and natural gas purchases and ethanol sales by entering into options and futures contracts. These contracts are used with the intention to fix the purchase price of the Company’s anticipated requirements of corn and natural gas 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 for accounting purposes and, therefore, records in earnings any change in underlying fair value.

At March 31, 2008, the Company had restricted cash of approximately $1,131,000 and cash at a brokerage firm of approximately $8,000, related to derivative instruments. The Company had a corresponding liability related to corn and ethanol options and future positions of approximately $1,197,000 at March 31, 2008. The Company has also recorded unrealized and realized losses of approximately $15,000 and $4,941,000 for the three and six month periods ending March 31, 2008, respectively, which are included in cost of goods sold.

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 and an additional revolving loan for $10,000,000 which is provided for the financing of grain inventory, receivables and margin account equity. These loans are secured by substantially all assets of the Company.

10

E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Unaudited Financial Statements

March 31, 2008

In March 2008, the Company amended certain terms of its term loan and the additional revolving loan. The amendment allowed the Company to begin making payments on the term loan in May 2008, previously April 2008 and changed the maturity date of the additional revolving loan to April 2009, previously February 2008. In addition, certain financial covenants were amended (see below).

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. In March 2008, the Company amended certain terms of its loan covenants. The Company is required to maintain working capital of not less than $3,000,000 and to maintain a minimum tangible net worth of not less than $40,000,000, effective January 2008, and increasing to maintain a working capital of not less than $5,000,000 and maintain a minimum tangible net worth of not less than $48,000,000 through September 30, 2010 and thereafter. The Company is not allowed to make payments on any subordinated debt nor incur any additional subordinated debt. Certain restrictions have also been put into place for distributions and payments of dividends.

Subordinated Debt

In January 2008, the Company entered into a subordinated debt agreement with a financial institution for $2,500,000 at a rate of 6.5% annually with the purpose of building their working capital to cure the existing default. For the first two years, the Company is required to make minimum annual payments of at least the unpaid accrued interest on the last day of each fiscal year. After two years, the debt will be amortized over five years, with payments due annually. All payments are subject to the Company’s continued compliance with the original loan agreement.

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.

Principal payments are due 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.

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E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Unaudited Financial Statements

March 31, 2008

Note Payable — Related party

In March 2008, the Company signed a promissory note with their contractor (Note 5) for $1,000,000. The note bears interest at 10% and is compounded and due annually on the anniversary of the note. 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.

Long-term debt, as discussed above, consists of the following at March 31, 2008:

Term note	$	35,000,000
Revolving loan		14,500,000
Tax increment financing		5,035,000
Note payable, related party		1,000,000
Subordinated debt		2,500,000
Capital lease		55,077
Totals		58,090,077
Less amounts due within one year		4,959,996
Net long-term debt	$	53,130,081

The estimated maturities of long-term debt at March 31, 2008 are as follows:

2008	$	4,959,996
2009		5,155,680
2010		6,176,412
2011		5,634,555
2012		5,682,449
After 2013		30,480,985
Total long-term debt	$	58,090,077

5. COMMITMENTS AND CONTINGENCIES

Design build agreement

The total cost of the project, including the construction of the ethanol plant and start-up expenses, was originally expected to be approximately $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. Final completion was achieved in January 2008 and final payment will be due upon receipt of final invoice.

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E ENERGY ADAMS, LLC
(A Development Stage Company)

Notes to Condensed Unaudited Financial Statements

March 31, 2008

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, not to exceed $1,000,000. The construction was completed prior to the 485 days. In March 2008, the Company signed a promissory note with the contractor for the $1,000,000 (Note 4). As of March 31, 2008, the Company has incurred approximately $68,409,000 for these services with approximately $151,000 included in construction and retainage payable.

Construction contracts

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. Subsequent to year end the project was completed. Total costs incurred on the project were approximately $2,561,000, with approximately $107,000 included in construction and retainage payable.

Corn Contracts

Currently, the Company has forward corn purchase contracts for delivery through November 2009 for a total commitment of approximately $31,481,000. Of the total corn purchase contracts, approximately 21% are with members of the Company.

Consulting Contracts

In April 2008, the Company entered into a consulting agreement with an unrelated company for financial advisory and business banking services which will include, but are not limited to, identifying and contacting prospective capital providers, facilitation of securing and structuring a financing transaction and/or exploring a potential sale, merger, consolidation or other business combination between the Company and a third party. The Company paid a $25,000 engagement fee and a monthly fee of $10,000, along with reimbursement of expenses. The Company will also be required to pay a success fee, which is based upon a percentage of the amount and type of equity, financing or business transaction the Company enters into as a result of their services. The minimum success fee shall be $500,000. The agreement may be terminated by either party with a 30 day written notice. If the Company terminates the agreement, and within 24 months of termination, enters into a transaction the company had contact with, the Company will be required to pay the minimum success fee as if the agreement had not been terminated.

Employment Contracts

In April 2008, the Company entered into an employment agreement with its Chief Financial Officer. The Company may terminate the agreement with cause at any time without prior notice and without cause with 30 days notice to the employee. The employee may terminate the agreement with at least 60 days notice to the Company, however, if the employee terminates the agreement prior to one year from the effective date, the employee will be required to repay all reasonable recruiting costs incurred by the Company.

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

Forward Looking Statements

Some of the statements in this report may contain forward-looking statements that reflect our current view on future events, future business, industry and other conditions, our future performance, and our plans and expectations for 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. You should read this report thoroughly with the understanding that our actual results may differ materially from those set forth in the forward-looking statements for many reasons, including events beyond our control and assumptions that prove to be inaccurate or unfounded. We cannot provide any assurance with respect to our future performance or results. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including, but not limited to, the following factors:

• Changes in the availability and price of corn;

• Lack of transport, storage and blending infrastructure preventing ethanol from reaching available markets;

• Fluctuation in U.S. petroleum prices and corresponding oil consumption;

• Ethanol supply exceeding demand and corresponding ethanol price reductions;

• Our ability to generate free cash flow to invest in our business, service our debt and pay our operating expenses as they are incurred;

• Changes in the environmental regulations that apply to our plant operations;

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

• Changes in plant production capacity or technical difficulties in operating the plant;

• Changes in general economic conditions or the occurrence of certain events causing an economic impact in the agriculture or automobile industries;

• 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;

• Additional ethanol plants or expansions of ethanol plants built in close proximity to our ethanol facility in south eastern Nebraska;

• Competition from alternative fuel additives;

• Changes in interest rates affecting our debt service payments;

• Our ability to retain key employees and maintain labor relations.

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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.

Available Information

Information about us is also available on our website at www.eenergyadams.com, under “Investor Relations — SEC Compliance,” which includes links to previous reports we have filed with the Securities and Exchange Commission. The content of our website is not incorporated by reference in this Quarterly Report on Form 10-QSB.

Overview

E Energy Adams, LLC (referred to herein as “we,” “us,” the “Company,” or “E Energy Adams”) is a Nebraska limited liability company formed on March 25, 2005 for the purpose of developing, constructing and operating a 50 million gallon per year (MGY) corn-based ethanol plant on our site in southeastern Nebraska near the Village of Adams. On October 27, 2007, we began plant operations and are currently producing fuel-grade ethanol and distillers grains at the Adams facility. Our plant has a nameplate production capacity of 50 MGY. Following the first week of operations, the plant has consistently met or exceeded the 50 MGY nameplate production guarantee provided by our general contractor, Fagen, Inc, as measured on a pro rata basis.

Our revenues as of March 31, 2008 were derived primarily from the sale and distribution of our ethanol and distillers grains. We expect to fund our operations during the next 12 months using cash flow from continuing operations and our credit facilities; however, we may need to identify potential strategies for additional equity and/or credit financing in order to have sufficient cash on hand to cover all costs associated with operating the plant.

Due to the fact we became operational in late October 2007, we do not have comparable income, production and sales data for the quarter ended March 31, 2007 with which you can compare against the quarter ended March 31, 2008. Accordingly, we do not provide a comparison of our financial results between reporting periods in this report. If you undertake your own comparison of our fiscal quarter ended March 31, 2007, with our fiscal quarter ended March 31, 2008, it is important that you keep this in mind.

Results of Operations for the Quarter Ended March 31, 2008

Revenues

During the fiscal quarter ended March 31, 2008 we earned approximately $32,300,000 in revenue from the sale of ethanol and distillers’ grains. Our revenues for the quarter ended December 31, 2007 were approximately $17,000,000. Increased production levels (i.e. three months of operation contained in current quarter versus only two months contained in quarter ended December 31, 2007) coupled with increasing ethanol and distillers grains prices contributed to an overall increase in revenues for the second fiscal quarter.

Cost of Goods Sold

During the fiscal quarter ended March 31, 2008, our cost of goods sold was approximately $28,500,000. In comparison to our first fiscal quarter, our costs of goods sold increased by approximately $9,300,000. However, most of this increase is explained by the fact that we converted from development stage to an operating company during our first fiscal quarter and did not produce as much ethanol in the first quarter as we did in the second. The costs of goods sold did not increase at the same pace as our revenues thereby resulting in a gross profit margin of approximately $3,800,000 for the second fiscal quarter.

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Operating Expenses

Our operating expenses for the quarter ended March 31, 2008 were approximately $950,000. This is a decrease of approximately $72,000 from operating expenditures reported as of the first fiscal quarter ended December 31, 2007. The decrease in our operating expenditures in the second fiscal quarter is related primarily to certain operational start-up expenses incurred in the first quarter.

Interest Expense and Interest Income

Interest expense for the quarter ended March 31, 2008 was approximately $1,170,000. This represents an increase of approximately $400,000 from our first fiscal quarter and is due to an increase in our borrowings. We earned slightly more interest income in the second fiscal quarter than that reported for the quarter ended December 31, 2007.

Net Income (Loss)

Our statement of operations shows net income of approximately $1,800,000 during the second fiscal quarter ended March 31, 2008. Our revenues for the period increased significantly and our other income also increased during the quarter. In addition, our operating expenses decreased during the quarter and our costs of goods sold did not increase correspondingly with our revenues thereby resulting in net income for the second fiscal quarter versus a net loss reported in the first fiscal quarter.

Results of Operations for the Six Months Ended March 31, 2008

During the fiscal quarter ended December 31, 2007, we transitioned from a development stage company to an operational company. The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the six months ended March 31, 2008:

	Six Months Ended
	March 31, 2008
	(Unaudited)
Income Statement Data	Amount			%
Revenues	$	49,263,451			100.00
Cost of Goods Sold	$	47,720,126			96.87
Gross Profit (Loss)	$	1,543,325			3.13
Operating Expenses	$	1,972,827			4.00
Operating Loss	$	(429,502	)		0.87
Other Income	$	131,012			0.27
Interest Expense	$	(1,944,484	)		3.95
Interest Income	$	39,774			0.08
Net Loss	$	(2,203,200	)		4.47

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Revenues

Our revenues for the six months ended March 31, 2008 were approximately $49,300,000. These revenues were generated from the sale of both fuel ethanol and distillers grains. Ethanol prices continued to increase during the six months ended March 31, 2008 due to strong demand for ethanol. However, an increase in supply of ethanol from new plants and expansions scheduled to begin production in the upcoming months may place downward pressure on the price of ethanol. We anticipate demand for ethanol will need to continue to grow to offset the increasing supply.

The principal purchasers of ethanol are petroleum terminals located throughout the United States. These terminals blend ethanol into gasoline either as mandated or discretionary gallons. Mandated gallons refer to blending requirements set forth by the renewable fuels standard (“RFS”) which was created by the Energy Policy Act of 2005 and increased by the Energy Independence and Security Act of 2007. The RFS has led to significant new investment in ethanol production across the country. The RFS is a national flexible program that does not require that any renewable fuels be used in any particular area or state, allowing refiners to use renewable fuel blends in those areas where it is most cost-effective. Discretionary gallons refer to volumes that are blended primarily due to the differential between gasoline prices and ethanol prices. When ethanol prices are below the sum of gas prices plus the blender’s credit of $0.51/gallon, discretionary blending can be significant. There is economic incentive for blenders to “cheapen” the cost of the final blend prior to sale, thus increasing the demand for ethanol.

The RFS requirement for 2008 is 9 billion gallons. The RFS will progressively increase to a 36 billion gallon requirement by 2022, 15 billion of which must be corn-based ethanol with the remainder from non-corn based ethanol sources. The Act also includes provisions for a variety of studies focusing on the optimization of flex fuel vehicles and the feasibility of the construction of pipelines dedicated to the transportation of ethanol. While the provisions in the Act are intended to stimulate an increase in the usage and price of ethanol, there is no guarantee or assurance that this legislation will have the desired impact on the ethanol industry. As of April 2, 2008, the Renewable Fuels Association reported that there are currently 147 ethanol plants in operation nationwide that have the capacity to annually produce approximately 8.5 billion gallons of ethanol. In addition, the RFA reports that there are 55 new ethanol plants under construction and 6 expansions of existing plants constituting another 5 billion gallons of annual capacity.

The increased production of ethanol has led to an increased supply of distillers grains. Increasing supplies of distillers grains to the market from other plants could reduce the price that our marketer, CHS, will be able to charge for our distillers grains. This could have a negative impact on our revenues. However, to date, demand for distillers grains in our area has kept pace with supply, as more users of animal feed (for cattle, swine and poultry) are becoming familiar with distillers grains and are incorporating distillers grains into their rations instead of using corn. Prices for distillers grains generally move in tandem with corn prices. Therefore, distillers grains prices were relatively high during the quarter ended March 31, 2008, and are expected to stabilize at these levels in the short term.

Cost of Goods Sold

Our cost of goods sold as a percentage of revenues was 96.87% for the six months ended March 31, 2008. Since we have begun operations, we have included approximately $2,415,000 in depreciation related to our plant in cost of goods sold. For the six months ending March 31, 2008, we have sustained significant hedging losses of approximately $4,941,000 (almost all of which occurred in the first fiscal quarter) against the market positions of our commodities pertaining to contracts throughout the current period and all of calendar year 2008. These losses have all been reflected in cost of goods sold in accordance with GAAP provisions.

Additionally, corn costs significantly impact our cost of goods sold. Despite the large 2007 corn crop, corn prices have remained high throughout the start of 2008. In March 2008 the USDA released its Prospective Plantings Report which estimates that farmers intend to plant 86 million acres of corn in 2008, down from an all time high of 93 million acres planted in 2007. Variables such as planting conditions and the number of corn acres planted will likely cause market uncertainty and create corn price volatility as the 2008 growing season begins. Increases in corn prices without accompanying increases in ethanol prices may negatively impact our profitability by increasing our cost of goods sold and reducing our net operating income. Newly constructed ethanol plants and expansions of existing plants in our geographical area may lead to increased local demand for corn and/or higher corn prices

We expect natural gas prices to maintain their current levels or increase during 2008. Any ongoing increases in the price of natural gas will increase our cost of production and may negatively impact our profit margins.

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Operating Expenses

Our operating expenses as a percentage of revenues was 4.00% for the six months ended March 31, 2008, and consists primarily of payroll and benefits; accounting, legal and consulting; property taxes; and depreciation and amortization.

Interest Expense and Interest Income

Interest expense as a percentage of revenues was 3.95% for the six months ended March 31, 2008. We expect that this percentage will be consistent or possibly lower during the remainder of the fiscal year as our outstanding balances decrease and interest rates on variable rate debt may decrease.

Net Income (Loss)

Our statement of operations shows a loss of approximately $2,200,000 for the six month period ending March 31, 2008. The major reasons for our losses were hedging losses and start-up expenses we incurred during the first fiscal quarter. Hedge losses are a cost of doing business. Our hedge losses were attributable to short positions taken in the ethanol market before prices climbed approximately $0.40 per gallon unexpectedly in a relatively short period of time. In addition, due to the mark-to-market requirements of U.S. GAAP accounting of our undesignated hedges, all negative positions were reported on our statement of operations as of the end of the quarter (December 31) even though a portion of our hedge positions (approximately $3,000,000) were actually for calendar year 2008. Due to timing differences in using mark-to-market accounting for our derivative instruments, we expect the impact of the loss reflected in our hedged volume will be more than offset by future gains realized on the sale of our ethanol into a higher priced market.

Plan of Operations for the Next 12 Months

We plan to spend the next 12 months focused on plant operations, including the following three primary functions: (i) management of cost-effective purchasing of the critical inputs to our production process which include corn and natural gas; (ii) optimizing the production process in such a way as to minimize manufacturing costs; and (iii) monitoring and evaluating the performance of our marketing agents to ensure effective marketing of our principal products, which consist of ethanol and distillers grains. Over the next 12 months, we plan to identify potential strategies for additional equity and/or credit financing in order to have sufficient cash on hand to manage the overall business in a more efficient manner.

Consulting Agreement

Subsequent to the end of the period covered in this report, we engaged Headwaters BD, LLC, (“Headwaters”) a wholly owned subsidiary of Headwaters MB, LLC to assist and advise us in the process of exploring available strategic alternatives to maximize long-term member value. Pursuant to the agreement, Headwaters will exclusively provide financial advisory and investment banking services which include, but are not limited to, identifying and contacting prospective capital providers, facilitation of securing and structuring a financing transaction and/or exploring a potential sale, merger, consolidation, or other business combination between us and a third party.

We are required to pay a $25,000 engagement fee and a $10,000 monthly fee for Headwaters’ services. Headwaters will be reimbursed for reasonable out-of-pocket expenses incurred pursuant to the agreement. In addition to the engagement fee, the monthly fee and the expense reimbursement, we will be required to pay Headwaters a success fee in the event we are able to close on a transaction facilitated by Headwaters. The amount of the success fee is based upon a percentage of the amount and type of equity, financing or business combination transaction we enter into as a result of Headwaters’ services. The minimum success fee is $500,000.

Our agreement with Headwaters may be terminated by either party upon 30 days notice. If we terminate the agreement and then proceed, within 24 months of the termination, to enter into a transaction described in the agreement with any party Headwaters has made contact with during the agreement, we will be required to pay Headwaters the corresponding success fee as if the agreement had not been terminated.

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Permitting

We have obtained the required air, water, construction and other permits necessary to construct and operate the plant. The plant’s emissions must be tested within 180 days of start-up of production. Performance testing for air emissions (based on the existing Construction Permit) was conducted during the week of March 10-17, 2008. With the exception of particulate matter for the thermal oxidizer and the CO2 scrubber, all items tested were well within the required limits. The particulate matter for the thermal oxidizer and the CO2 scrubber test results are currently being discussed and reviewed by the Nebraska Department of Environmental Quality (NDEQ). The outcome of these discussions will be incorporated into the establishment of our Operating Permit limits which are due in October 2008.

Marketing Agreements

Aventine Renewable Energy, Inc. (“Aventine”) markets our ethanol and Cenex Harvest States, Inc. (“CHS”) markets our distillers grains by rail and truck. Our contracts with these unrelated parties are critical to our success, and we are very dependent on both of these companies. We are independently marketing a small portion of our ethanol to local markets; however, if local markets do not supply competitive prices, we may market all of our ethanol through Aventine.

Commodity Price Risk Protection

In order to reduce risk caused by market fluctuations, we hedge our anticipated corn and natural gas purchases and ethanol sales by entering into futures and options contracts. These contracts are intended to effectively fix the purchase and sales prices of our commodities.

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, we record earnings adjustments caused from marking these instruments to market on a monthly basis.

As of March 31, 2008, we had recorded restricted cash, related to derivative instruments, of approximately $1,131,000 and a corresponding liability related to corn and ethanol options and future positions of approximately $1,197,000. We have recorded a combined loss which includes unrealized and realized losses of approximately $15,000 and $4,941,000 for the three month and six month periods ended March 31, 2008, which are included in costs of goods sold.

Employees

As of March 31, 2008, we employed 46 full-time employees.

Critical Accounting Estimates

Management uses estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.

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Liquidity and Capital Resources

The following table shows cash flows for the six months ended March 31, 2008:

	Six Months Ended
	03/31/08
	(unaudited)
Net cash used in operating activities	$	14,933,782
Net cash used in investing activities	$	18,211,571
Net cash provided by financing activities	$	36,922,243

Cash Flow From Operations

We began operations at our plant on October 27, 2007. The net cash used by operating activities was approximately $15,000,000 for the six months ended March 31, 2008. Most of the cash used by operations related to a build up in inventory levels and accounts receivable. Increases in ethanol prices and corn costs resulted in higher carrying values for receivables and inventories. Investments in commodities contracts were utilized to protect against adverse price fluctuations with corn.

Cash Flow From Investing Activities

The net cash used in investing activities was approximately $18,200,000 for the six months ended March 31, 2008. The increase is primarily due to the purchase of approximately $17,640,000 of various pieces of equipment and final construction of our plant.

Cash Flow From Financing Activities

Net cash provided by financing activities was approximately $36,922,000 for the six months ended March 31, 2008, consisting primarily of $14,500,000 from a revolving loan and approximately $22,253,000 from long-term debt financing obligations.

Short-Term and Long-Term Debt Sources

Senior Credit Facility: Our senior credit facility is with Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA (“Farm Credit”). The facility includes a $35,000,000 term loan and a $14,500,000 revolving loan. We also have entered into an additional revolving loan for $10,000,000 for the purpose of financing our grain inventory, receivables and margin account equity. As of March 31, 2008, the outstanding balance on the term loan was $35,000,000, the outstanding balance on the original revolving loan was $14,500,000, and the outstanding balance on the additional revolving loan was approximately $10,000,000.

We must pay interest on the above loans at variable rates equivalent to the London InterBank Offered Rates (“LIBOR”) Short Term Index Rate plus 3.05%. The variable rate will be adjusted to the three-month LIBOR Short Term Index Rate (LIBOR + 280 basis points) for any year after the first year of operations in which, at the end of the preceding year, our owners’ equity (defined as net worth to total tangible assets) is equal to or greater than 60%, provided we are not otherwise in default. Interest will be calculated on a 360-day basis.

On March 11, 2008 we entered into the Third Amendment to Credit Agreement with Farm Credit (the “Third Amendment”). Pursuant to the Third Amendment, we are obligated to repay the $35,000,000 term 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, and continuing on the first of each quarter thereafter until the principal, plus all accrued interest and any unpaid fees, costs and expenses are paid in full no later than October 1, 2015. Our first payment was made on May 2, 2008.

On the earlier of January 1, 2016 or three months following repayment of the term loan we will begin repayment on the $14,500,000 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 $35,000,000 term 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. These payments will be applied to scheduled principal installments of the term loan in inverse order of maturity.

20

Pursuant to the Third Amendment, we are obligated to repay principal, plus all accrued interest and any unpaid fees, costs or expenses in full on the $10,000,000 additional revolving loan on or before April 1, 2009.

The loans are secured by a first mortgage on our real estate and a lien on all of our personal property. If we prepay any portion of the construction loans prior to April 1, 2009, we will pay a prepayment charge of 3% in addition to certain surcharges. This prepayment charge will be reduced by 1.0% each year thereafter and any prepayment made on the construction loan after April 1, 2011 will not be subject to a prepayment charge.

The Third Amendment provides that during the term of our loans with Farm Credit, we will be subject to various financial and non-financial covenants that include, among other items, the following requirements: (1) maintain a working capital of not less than $3,000,000 increasing to $4,000,000 at the 2008 fiscal year end and further increasing to $5,000,000 at fiscal year end 2009 and $6,000,000 at fiscal year end 2010 and thereafter; (2) maintain a certain debt coverage ratio, as defined in the Credit Agreement; and (3) maintain a minimum tangible net worth of at least $40,000,000, increasing to at least $42,000,000 at fiscal year end 2008, $45,000,000 at fiscal year end 2009 and $48,000,000 at fiscal year end 2010 and thereafter.

The Third Amendment provides consent from Farm Credit for $2,500,000 of subordinated debt for the purpose of injecting equity and improving working capital. Farm Credit further consented to related subordinate liens securing the subordinated debt in accordance with subordinated debt agreements approved by Farm Credit

We will only be allowed to make annual capital expenditures up to $500,000 annually without prior approval. We will also be 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. We are currently in compliance with all financial ratio requirements and loan covenants.

We have paid approximately $430,000 in debt financing costs and we must pay an annual administration fee of $25,000 to Farm Credit. For the revolving credit facility and the line of credit facility, we will pay a non-use fee in the event that the average outstanding balance on these facilities is less than the maximum principal balance of said facilities. This fee will be equal to 0.5% per annum of the difference between the maximum principal balance and the actual usage. This fee will be due quarterly. As of March 31, 2008, we have incurred approximately $16,400 in unused commitment fees.

Subordinated Debt Financing. On January 29, 2008, we entered into a Subordinated Debt Agreement with North Star Bank, a Minnesota corporation. The Subordinated Debt Agreement was entered into for the purpose of increasing our working capital. The additional working capital of $2,500,000 borrowed pursuant to the agreement will allow us to reestablish compliance with the working capital covenants required under our senior credit facility with Farm Credit. The subordinated debt will accrue interest at a rate of 6.5% per annum. We are obligated to make interest only payments on September 30, 2008 and September 30, 2009. On January 29, 2010 the unpaid principal will be amortized over a five year period and we will be obligated to repay the principal and accrued interest in five equal annual payments commencing in 2011. All payments are subject to our continued compliance with the Farm Credit obligations and are subordinate to the repayment of our obligations under the Farm Credit senior credit facilities. We will be considered in default under the Subordinated Debt Agreement if we fail to make any payment.

Tax Increment Financing. We have entered into a tax increment financing arrangement with the Community Development Agency of the Village of Adams, Nebraska (the “Agency”), pursuant to which we have received approximately $3,865,000 for project costs related to our ethanol plant. The Agency has issued bonds and in satisfaction of a requirement that we acquire sufficient private financing sufficient to complete the project, we have entered into a loan agreement with Security First Bank, pursuant to which Security First Bank has loaned us $5,035,000. The approximate amounts of the loan proceeds are as follows: available for project costs $3,865,000; capitalized interest $514,000; debt service reserve fund $503,000; and debt issuance costs $153,000.

21

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% or fall below 7.5%. 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. We will be assessed taxes on the value of our plant which will be paid to a special debt service fund and then used to pay the payments required on the loan. 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. We are obligated to pay all project costs that exceed the amounts paid from the tax increment financing.

In connection with the bond issuance, the Agency 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 Agency 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.

On February 12, 2008, we executed a Promissory Note in favor of Fagen, Inc. obligating us to pay Fagen, Inc. $1,000,000. The Promissory Note fulfills our obligation to Fagen, Inc., our design-builder, to pay an “Early Completion Bonus” in the amount of $1,000,000 under the terms of the Design-Build Agreement dated August 1, 2006. We are obligated to repay the loan, plus accrued interest, as soon as possible, but, in no event, later than the second anniversary of the Note. Interest will accrue at a rate of 10%, compounded annually. This Note is unsecured.

Off-Balance Sheet Arrangements

We do not have any 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 Chief Financial Officer (the principal financial and accounting officer), Nicholas E. Stovall, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2008. 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 Chief Financial Officer, have reviewed and evaluated any changes in our internal control over financial reporting that occurred as of March 31, 2008, 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

None.

Item 3. Defaults Upon Senior Securities

None.

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

The annual meeting of the members was held on February 1, 2008 in Beatrice, Nebraska. The following nine directors were elected by the members both present at the meeting or by proxy: Dennis Boesiger, Kenneth Brinkman, Ron Miller, Steven Dean, David Lukens, Tom Roode, Jack L. Alderman, Duane Wollenburg and William Riechers. In addition to the elected directors, Scott Brittenham and Lawrence Peck were appointed to serve as directors on our board pursuant to the terms of our Operating Agreement.

The members, both by written ballot and proxy, voted on several amendments to the Company’s Operating Agreement. The amendments voted upon included: (i) approval authorizing the Company’s board of directors to change the fiscal year of the Company without a vote of the members; (ii) approval for amending Section 5.3(b) regarding the term of office for a director filling a vacancy on the board occurring other than due to an expiration or removal from office; (iii) a change in the calculation of the number of directors needed to constitute a quorum; and (iv) approval of an amendment allowing for removal of directors without cause by the members and allowing the directors to remove elected directors for cause. The table below sets forth the number of votes cast for and against each matter and director nominated as well as the number of abstentions.

Voting by the members was as follows:

	For		Against		Abstain
Proposal One		2,774		117		75
Proposal Two		2,752		61		153
Proposal Three		2,583		179		204
Proposal Four		2,751		84		131
Dennis Boesiger		2,357				198
Kenneth Brinkman		2,358				197
Ron Miller		2,364				191
Steven Dean		2,389				166
David Lukens		2,343				212
Tom Roode		2,343				212
Jack L. Alderman		2,404				151
Duane Wollenburg		2,380				175
William Riechers		2,362				193

Item 5. Other Information

Distribution Policy

On February 1, 2008, the Board of Directors adopted a Distribution Policy. The policy states that the Board intends to make distributions of at least 40% of net profit for the calendar year ended to cover taxes incurred by members. Other factors such as capital investment needs, loan principal payments and loan covenants and other cash needs will be considered before the board determines the actual distribution amount. Once the Board makes a final distribution decision and declares a distribution, the date of payment shall not exceed 45 days from the date the distribution is declared.

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Item 6. Exhibits

The following exhibits are incorporated by reference in this report:

Exhibit		Method of
No.	Description	Filing
10.1	Promissory Note between E Energy Adams, LLC and Fagen, Inc., dated February 12, 2008	*
10.2	Third Amendment to Credit Agreement between E Energy Adams, LLC and Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA, dated March 11, 2008	*
10.3	Engagement Letter between E Energy Adams, LLC and Headwaters BD, LLC dated April 1, 2008	*
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: May 14, 2008	/s/ Carl D. Sitzmann
	Carl D. Sitzmann
	Chief Executive Officer (Principal Executive Officer)
Date: May 14, 2008	/s/ Nicholas E. Stovall
	Nicholas E. Stovall
	Chief Financial Officer (Principal Financial Officer)

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EX-10.1

Exhibit 10.1

PROMISSORY NOTE

$1,000,000.00

Note Date: February 12, 2008
Maturity Date: February 12, 2010

1. Promise to Pay. For value received, the undersigned, E Energy Adams, LLC, a Nebraska limited liability company at 13238 East Aspen Road, Adams, NE 68301, (the “Obligor”) promises to pay to Fagen, Inc., a Minnesota corporation, (the “Obligee”) the principal sum of One Million and 00/100 Dollars ($1,000,000.00) with interest on the unpaid balance of such principal sum advanced and outstanding equal to the rate set forth below from the date hereof. This Note is being delivered in consideration of the Obligor’s obligation to pay the Obligee its early Completion Bonus in the amount of original principal amount of this Note in accordance with that certain Design-Build Agreement dated August 1, 2006, between Obligor and Obligee.

2. Interest. Interest shall accrue on the unpaid balance at a rate of ten percent (10%), compounded annually until paid. Interest shall be computed on the basis of a 365-day year basis, counting the actual number of days elapsed.

3. Payments. Obligor shall pay this Note as soon as possible; and in any event, this Note, plus accrued interest, shall balloon and become due on the second anniversary of this Note. All payments shall be applied first to accrued interest and then to principal. Interest only shall be payable annually, on the anniversary date of this Note. On each yearly anniversary of this Note, any unpaid accrued interest shall be converted to principal and shall accrue interest as principal thereafter.

4. Payment. Obligor shall pay Obligee in lawful money of the United States of America, at 501 West Hwy 212, PO Box 159, Granite Falls, MN 56241, or at such other place as the Obligee may designate in writing.

5. Security. The amounts owed pursuant to this Note are unsecured.

6. Prepayment. The Obligor may prepay the interest and principal balance outstanding in whole or in part at any time without premium or penalty. Any partial prepayment shall be applied first to accrued interest and then to the principal balance.

7. Default. If the Obligor fails to pay when due any amounts owing pursuant to this Note, or breaches any of their obligations hereunder, the Obligee may declare all amounts owing pursuant to this Note to be due and payable in full without further notice or demand.

8. Expenses. Obligor agrees to pay all costs of collection, including reasonable attorneys’ fees and legal expenses, in the event this Note is not paid when due, whether suit is included or not, including costs and expenses of litigation, bankruptcy, or insolvency proceedings.

9. No Waiver. Time is of the essence. No delay on the part of the Obligee in exercising any right hereunder will operate as a waiver thereof, nor will any single or partial exercise of any right hereunder preclude any other or further exercise thereof. The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which the Obligee may or would otherwise have.

10. Successors and Assignment. The respective rights and obligations of the Obligee and the Obligor hereunder shall benefit and be binding upon the successors, assigns, heirs, administrators and transferees thereof; provided, however, that this Note, and liability and obligations of Obligor hereunder, may not be assigned or transferred by the obligor except with the prior written approval of the Obligee. All rights of the Obligee as the holder of this Note may be freely assigned or transferred by the Obligee upon written notice to the Obligor.

11. Waiver of Presentment and Notice of Dishonor. Obligor and other parties who sign, guarantee or endorse the Promissory Note, to the extent allowed by law, hereby waive demand, presentment, notice of dishonor, protest, and any notice relating to the acceleration of the maturity date of this Note.

12. Governing Law. This Promissory Note shall be deemed to have been made under, and shall in all respects be governed by the laws of the State of Minnesota.

13. Notice. Any written notice by a party shall be by certified mail, postage prepaid, to the address designated in this Note.

Obligor:

E Energy Adams, LLC

By:	/s/ Nicholas Stovall
	Title: CFO

STATE OF NEBRASKA	)
	)ss.
COUNTY OF GAGE	)

On this 7 day of Mar, 2008, before me, the undersigned, a Notary Public, personally appeared Nick Stovall, who executed the foregoing instrument, and acknowledged that he executed the same as his voluntary act and deed.

/s/ Jenny Moerer  

Page 2 of 2

E-Energy Adams, LLC
Early Completion Bonus

Date of Commencement / Notice to Proceed Date (Per Section 6.2 of the Design Build Agreement)		10/27/2006
Certificate of Substantial Completion Issue Date (Grind Corn Date)		10/27/2007
Contractual Substantial Completion Date (Per Section 6.4.1 of the Design Build Agreement — 545 days following the Date of Commencement)		4/24/2008
Number of Days to Completion Eligible for Bonus		485
Actual Number of Days to Completion (10/27/06 — 10/27/07)		365
Early Completion — Number of Days Eligible for Bonus		120
Per Section 6.4.4 of the Agreement:
“...$10,000 per day, for each day that Substantial Completion occurred in advance Of said 485 days.”
Actual Number of Days to Completion (10/27/06 — 10/27/07)		485
Number of Days in Advance of 485		365
Times: $10,000 per day	$	10,000
Total for Section 6.4.4	$	1,200,000
Early Completion Bonus Cap (per Section 6.4.4 of the Agreement)	$	1,000,000
Total Early Completion Bonus Date	$	1,000,000

EX-10.2

Exhibit 10.2

Farm Credit Services of America

THIRD AMENDMENT TO CREDIT AGREEMENT

This Third Amendment to Credit Agreement (“Amendment”) is made and entered into effective the 11th day of March, 2008, by and between E Energy Adams, LLC (hereinafter referred to as “Borrower”) and Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA (hereinafter referred to as “Lender”) to amend and modify the Credit Agreement dated August 25, 2006 (hereinafter referred to as the “Credit Agreement”). The Credit Agreement and underlying Loan Documents are modified only to the extent necessary to give effect to the terms of this Amendment, and the remaining terms of said Loan Documents, not otherwise inconsistent herewith, are ratified by the parties. Capitalized terms used but not otherwise defined herein have the respective meanings given to them in the Credit Agreement.

In consideration of the mutual agreements, provisions and covenants herein contained, and furthermore to induce Lender to consider financial accommodations for the Borrower under the terms and provisions of the Credit Agreement, the parties hereby agree as follows:

Section 2.1 Credit Facility A, Sub Section (b) is amended to read as follows:

(b) Principal. Borrower hereby promises to pay principal plus all accrued interest as follows: in 29 equal installments of $1,237,500.00 plus accrued interest commencing on the first of the month which is six months following Substantial Completion (the “First Principal Payment Date”) and continuing on the 1st of each quarter thereafter until the entire unpaid principal, plus all accrued interest and any unpaid fees, costs or expenses is paid in full, and no later than October 1, 2015 (Maturity Date). The actual payment amount of all other payments may vary according to the interest rate then in effect and the outstanding principal balance.

Section 2.3 is amended to read as follows:

Section 2.3 Credit Facility C. Lender agrees to advance sums to Borrower up to the amount of $10,000,000.00 (Maximum Principal Balance), until April 1, 2009 (Final Advancement Date). Each Advance made will reduce the funds available for future advances by the amount of the Advance. Repayments of principal will be available for subsequent Advances. The proceeds of said Loan will be used by Borrower for the financing of eligible inventory and receivables, and commodity hedging activity (Purpose) and Borrower agrees not to request or use such proceeds for any other purpose.

(a) Interest. Borrower hereby promises to pay interest on the principal indebtedness outstanding from time to time on each Advance from and including the date of such Advance and otherwise in accordance with statements issued by Lender. Interest shall be payable on the following dates, each such date an “Interest Payment Date”, provided that interest accruing at the Default Rate, if applicable, shall be payable on demand.

Said interest shall be payable on the 1st day of each month at the following rate per annum.

Libor Rate Libor Rate interest shall accrue from the date of each Advance at a variable rate per annum equivalent to the Libor Short Term Index Rate plus 3.05% (the ‘Variable Rate’). Interest rate shall be adjusted higher or lower on the 15th of each month with any change in the Libor Rate and this higher or lower rate will thereafter apply to the outstanding principal indebtedness and remain in effect until a different rate of interest is established. The amount of any subsequent payments will be increased or decreased accordingly to reflect the different rate of interest without in any manner changing the due date of the payments. There is no limitation on the frequency or the amount of the change in the interest rate.

The Libor Short Term Index Rate is the three-month London InterBank Offered Rates in the London market based on the Libor rate published on the last business day of the month as published in the Wall Street Journal, rounded to the nearest 0.05%.

(b) Principal. Borrower hereby promises to pay principal, plus all accrued interest and any unpaid fees, costs or expenses in full on April 1, 2009.

The following Sections are amended to read as follows:

Section 6.10.1 Working Capital. Borrower agrees to maintain working capital (current assets, plus the unadvanced portion of Loan Facility B minus current liabilities) of not less than $3,000,000.00 effective January 31, 2008, increasing to not less than $4,000,000.00 on September 30, 2008, increasing to not less than $5,000,000.00 on September 30, 2009 and increasing to not less than $6,000,000.00 on September 30, 2010 and thereafter.

Section 6.10.3 Tangible Net Worth. Borrower agrees to maintain minimum Tangible Net Worth (total tangible assets minus total liabilities) of not less than $40,000,000.00 effective January 31, 2008, increasing to not less than $42,000,000.00 by September 30, 2008, increasing to not less than $45,000,000.00 by September 30, 2009 and then increasing to not less than $48,000,000.00 by September 30, 2010 and thereafter.

Section 7.10 Subordinated Debt. The Borrower will not make payments on account of any existing Subordinated Debt and shall not incur any additional Subordinated Debt except to the extent permissible under the agreement by which such Subordinated Debt is subordinated to the Loan. Borrower shall not amend, supplement, or otherwise modify any provisions of the Subordinated Debt agreement, and shall not refinance any portion of the subordinated debt, except on terms no less favorable to Borrower and Lender. Lender consents to $2,500,000.00 of subordinated debt to be incurred by Borrower for the purpose of injecting equity and improving working capital, and consents to related subordinate liens securing said subordinated debt in accordance with the terms of subordinated debt agreements executed by members of the Borrower and approved by Lender.

Section 7.12 Distribution and Withdrawals. Borrower will not distribute any profits, make any loans except for extensions of trade credit in the ordinary course of business, declare or pay any dividends, distribute earnings, allow any draws, or make other cash distributions to its members on account of Membership Economic Interests or apply any assets to the redemption, retirement, purchase or other acquisition of any such equity interests; provided however if no Event of Default or Potential Default shall exist following completion of Borrower’s audit for the fiscal years ending 2007 and 2008, respectively, Borrower may pay dividends and distributions within 120 days following the close of the prior fiscal year, not to exceed 40% of the net profit for said previous fiscal year less all payments on subordinated debt, so long as Borrower remains in compliance with required financial covenants on a post distribution basis. For fiscal years ending 2009 and thereafter, Borrower may pay dividends and distributions which exceed 40% of the net profit if Borrower has made the Excess Cash Flow payment for said fiscal year and so long as Borrower remains in compliance with required financial covenants on a post distribution basis.

The Borrowing Base Report Exhibit D is amended as attached hereto.

Borrower hereby represents and warrants to the Lender that, after giving effect to this Amendment, (i) no Default or Event of Default exists under the Credit Agreement or any of the other Loan Documents and (ii) the representations and warranties set forth in the Credit Agreement are true and correct in all material respects as of the date hereof (except for those which expressly relate to an earlier date).

Borrower hereby ratifies the Credit Agreement as amended and acknowledges and reaffirms (i) that it is bound by all terms of the Credit Agreement applicable to it and (ii) that it is responsible for the observance and full performance of its respective obligations.

Borrower hereby certifies that the person(s) executing this Amendment on behalf of Borrower is/are duly authorized to execute such document on behalf of Borrower and that there have been no changes in the name, ownership, control, organizational documents, or legal status of the Borrower since the last application, loan, or loan servicing action; that all resolutions, powers and authorities remain in full force and effect, and that the information provided by Borrower is and remains true and correct.

This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same agreement. Delivery of executed counterparts of this Amendment by telecopy shall be effective as an original and shall constitute a representation that an original shall be delivered.

THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEBRASKA.

This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

IN WITNESS WHEREOF, the parties hereto have set their hand effective the day and year first above written.

The Internal Revenue Service does not require your consent to any provision of this document other than the following certification required to avoid backup withholding. Under penalties of perjury, I/we certify that the Taxpayer Identification Number shown herein is correct and that I/we am/are not subject to backup withholding either because I/we are exempt, have not been notified that I/we are subject to backup withholding due to failure of reporting interest or dividends, or the Internal Revenue Service has notified me/us that I/we am/are no longer subject to backup withholding. I/we am/are a U.S. person (including U.S. resident alien):

E Energy Adams, LLC 20-2627531

BORROWER:

E Energy Adams, LLC

By:	/s/ Jack L. Alderman Jack L. Alderman, President
By:	/s/ Dennis L. Boesiger
	Dennis L. Boesiger, Secretary

Address for Notice: 510 Main Street, Adams, NE 68301

LENDER:

Farm Credit Services of America, FLCA
Farm Credit Services of America, PCA

By: /s/ Shane Frahm   Shane Frahm, Vice President

Address for Notice: 5015 South 118^th Street, Omaha, NE 68137

Exhibit “D”
Seasonal Borrowing Base Report

E ENERGY ADAMS, LLC For Period Ending

For purposes hereof, ELIGIBLE INVENTORY shall mean inventory which: (a) is of a type shown below; (b) is owned by the borrower and not held by the borrower on consignment or similar basis; (c) is not subject to a lien except in favor of Farm Credit Services of America; (d) is in commercially marketable condition; and (e) is not deemed ineligible by Farm Credit Services of America. Furthermore, market price shall mean the commodity FOB at the plant. For purposes hereof, ELIGIBLE RECEIVABLES shall mean rights to payment for goods sold and delivered or for services rendered which: (a) are not subject to any dispute, set-off, or counterclaim; (b) are not owing by an account debtor that is subject to a bankruptcy, reorganization, receivership or like proceeding; (c) are not subject to a lien in favor of any third party, other than liens authorized by Farm Credit Services of America in writing; (d) are not owing by an account debtor that is owned or controlled by the borrower; (e) are not deemed ineligible by Farm Credit Services of America; and (f) are less than 10 days past due.

		Amount/Price/		Advance			Collateral
Line	Type of Eligible Inventory	Value		Rate			Value
1	Corn Inventory (bushels)
2	Corn Price (lower of cost or market-$/bu)
3	Corn Value (Line 1 x Line 2)	$	0.00		90	%	$	0.00
4	Less All Grain Payables (if applicable to Above corn)				100	%	$	0.00
5	DDGS Inventory (tons)
6	DDGS Price (market- $/ton)
7	DDGS Value (Line 5 x Line 6)	$	0.00		65	%	$	0.00
8	WDGS Inventory (tons)
9	WDGS Price (market- $/ton)
10	WDGS Value (Line 8 x Line 9)	$	0.00		65	%	$	0.00
11	Ethanol Inventory (gallon)
12	Ethanol Price (market- $/gallon)
13	Ethanol Value (Line 11 x Line 12)	$	0.00		80	%	$	0.00
14	Net Value of Commodity Account	$	0.00		95	%	$	0.00
15	Eligible Cash **	$	0.00		100	%	$	0.00

		Amount/Price/		Advance			Collateral
Line	Type of Eligible Receivables	Value		Rate			Value
16	Ethanol Receivables less than 10 days Past Due				85	%	$	0.00
17	DDGS & WDGS Receivables less than 10 days Past Due				85	%	$	0.00
	Total Borrowing Base —						$	0.00
18	Less: Trade Payables	$	0.00		100	%	$	0.00
19	Less: Book Overdraft(s)				100	%	$	0.00
20	Less: Outstanding Balance of Loan(s)				100	%	$	0.00
21	Less: Issued Letters of Credit				100	%	$	0.00
22	Total Deducts (Line 17+18+19) —						$	0.00
23	EXCESS OR DEFICIT* (Line 16-Line 20) —						$	0.00

*	NOTE: If a deficit exists, funds must be remitted to Farm Credit Services of America within 5 business days of month end.
**	Cash maintained in account in which FCSA maintains a collateral interest/control agreement.

I HEREBY CERTIFY THAT TO THE BEST OF MY KNOWLEDGE THIS INFORMATION IS TRUE AND CORRECT.

Authorized Signature	Title	Date
Printed Name

EX-10.3

Exhibit 10.3

April 14, 2008

Board of Directors
E Energy Adams, LLC
510 Main Street
Post Office Box 49
Adams, NE 68301

Gentlemen:

We are writing today to outline the business terms under which Headwaters BD, LLC (“Headwaters”) will be engaged to act as financial advisor to E Energy Adams, LLC together with its affiliates and subsidiaries (the “Company”) in connection with its consideration of a possible Transaction (as defined in Attachment A). Please note that Headwaters BD, LLC is a wholly owned subsidiary of Headwaters MB, LLC; references to “Headwaters” may refer to either entity.

Various legal conditions governing our relationship are set forth in Attachment B.

ADVISORY DUTIES

In the course of our engagement, Headwaters will perform such financial advisory and investment banking services for the Company in connection with the proposed Transaction, defined in Attachment A, as are customary and appropriate for advisory services of this type and as you may, from time to time, reasonably request. Specific advisory services relating to the Transaction may include the following:

Transaction

1. Prepare a Confidential Memorandum describing the Company, operations, management and financial data, based upon information provided by the Company, to facilitate securing and structuring the financing,

2. Identify and contact appropriate prospective capital providers and / or prospective partners for the Transaction,

3. Assist and advise the Company in negotiating the terms and structure of a potential Transaction,

4. Assist the Company and their legal counsel with document preparation in connection with a Transaction,

5. Provide the Companies with periodic status reports (as requested) and be available to the Companies at all reasonable times to discuss any matters relating to the Transaction, and

6. Perform other financial advisory services relating to the foregoing as necessary and agreed between the parties.

The Company agrees to use Headwaters as its exclusive financial advisor related to the Transaction alternatives outlined herein. Such fees and services will be priced according to the schedule set forth in Attachment A.

In order to coordinate the efforts to effect Transactions satisfactory to the Company, during the period of our engagement hereunder, neither the Company nor anyone acting on its behalf shall initiate any discussions regarding a Transaction with any person or entity, except through Headwaters. In the event the Company or any of its officers or directors receives an inquiry regarding a potential Transaction, they will promptly inform Headwaters of such inquiry in order that Headwaters may assist the Company in any resulting negotiations and coordinate all activities related to the Transaction.

We are pleased to accept this engagement and look forward to working with the Company. Please confirm that the foregoing is in accordance with your understanding by signing and returning to us the enclosed duplicate of this letter (including signed attachments), which shall thereupon constitute a binding agreement.

Sincerely,
Headwaters BD, LLC
By:	/s/ Philip W. Seefried Jr.
	Philip W. Seefried Jr.
	Co-Founder & CFO
Accepted and agreed to by:
By:	/s/ Carl Sitzmann
	Title: CEO
Date: April 14, 2008

ATTACHMENT A
PAGE 1

FEES FOR SERVICES REFERENCED IN E ENERGY ADAMS, LLC/HEADWATERS BD LLC ENGAGEMENT LETTER DATED 14th APRIL 2008.

As used in this Attachment, “Transaction” means, whether effected in one transaction or a series of transactions:

(a) any senior secured first lien debt financing commitment in the form of a revolver and / or term debt (a “Senior Debt Financing” Transaction),

(b) any second lien debt, unsecured debt, subordinated debt, or mezzanine debt financing commitment (a “Junior Debt Financing” Transaction),

(c) any equity financing commitment in the form of common stock, preferred stock, redeemable stock, convertible stock, convertible debt, warrants, options, or any other form of equity linked securities (an “Equity Financing” Transaction),

(d) any merger, consolidation, reorganization, or other business combination pursuant to which a material portion of the Company’s business, is combined with that of a third party (a “Merger”),

(e) the acquisition, directly or indirectly, by a third party by way of a tender or exchange offer, negotiated purchase, or pursuant to a plan of reorganization or other means, of a material portion of the then outstanding membership units of the Company (an “Acquisition”),

(f) the acquisition, directly or indirectly, by a third party of a material portion of the assets of, or of any right to a material portion of all of the revenues or income of, the Company by way of a negotiated purchase, lease, license, exchange, or joint venture, or pursuant to a plan of reorganization or other means (an “Acquisition”).

Engagement Fee

Headwaters shall receive a non-refundable cash fee of $25,000 payable upon execution of this agreement which shall be credited to the Success Fee, if such Success Fee is greater than $525,000, upon a successful transaction.

Monthly Fee

Headwaters shall receive a non-refundable cash fee of $10,000 month, with the first month’s fee payable on the 1st of each month thereafter,

ATTACHMENT A
PAGE 2

FEES FOR SERVICES REFERENCED IN E ENERGY ADAMS, LLC/HEADWATERS BD LLC ENGAGEMENT LETTER DATED 14th APRIL 2008.

Success Fee

Concurrent with the closing of a Transaction, Headwaters shall receive Success Fee predicated on the type of Transaction closed. The cash Success Fee for each transaction type is detailed below:

(a) Senior Debt Financing — 1.25% of the Transaction Amount associated with a Transaction described in (a) above,

(b) Junior Debt Financing — 3.0% of the Transaction Amount associated with a Transaction described in (b) above, and

(c) Equity Financing — 7.0% of the Transaction Amount associated with a Transaction described in (c) above.

(d) Merger or Acquisition — 2.50% of the Transaction Amount associated with a Transaction described in (d), (e), or (f) above.

Regardless of the Transaction Amount, the minimum cash Success Fee payable to Headwaters hereunder upon closing of a Transaction shall be $500,000 (“Minimum Success Fee”).

Expense Reimbursement

In addition, the Company agrees to reimburse Headwaters, upon request made from time to time, for its reasonable out-of-pocket expenses incurred in connection with any Headwaters’ activity under this agreement. Such expense reimbursement amounts shall be considered separately from any fees that may be owed by Company to Headwaters. No single expense shall exceed $10,000 without the prior approval of the Company.

TRANSACTION AMOUNT

The Transaction Amount for purposes of calculating Headwaters’ fees for any Transaction contemplated by (a), (b), or (c) above under the definition of the term Transaction in this Attachment A (the “Capital Raise Transaction Amount”) shall be deemed to be the total amount of a financing commitment or available, whether funded at closing or otherwise, provided to the Company at closing.

ATTACHMENT A
PAGE 3

FEES FOR SERVICES REFERENCED IN E ENERGY ADAMS, LLC/HEADWATERS BD LLC ENGAGEMENT LETTER DATED 14th APRIL 2008.

The Transaction Amount for purposes of calculating Headwaters’ fee for a sale of the Company as described in (d), (e), or (f) above under the definition of the term Transaction in this Attachment A (the “Sell Side Transaction Amount”) shall be deemed to be the total amount of cash and the fair market value of other property received or receivable (including amounts paid into escrow) by the Company or a third party, as applicable, and by the officers and shareholders of the Company or a third party, as applicable, from any source in connection with the Transaction. The Transaction Amount will also include the principal amount of any indebtedness used as consideration for a Transaction, including any amounts of Company or shareholder indebtedness assumed by the acquirer and any payments to officers or shareholders of the Company or a third party in connection with the Transaction, including payments under non-competition agreements. For Transactions described in (d), (e), or (f) above under the definition of the term Transaction in this Attachment A that involve a transfer of more than 50% of the capital stock, assets, revenues or income of the Company but less than all of the Company’s business, capital stock, assets, revenues or income, then the Transaction Amount will be deemed to be the valuation implied as if all of the Company’s capital stock, assets, revenues or income had been transferred in the Transaction. If the Company owns real estate which, following the closing of a Transaction, is the subject of a lease by the purchaser of the Company (or is the subject of a lease by the Company if such real estate is spun out to the shareholders in connection with the Transaction), then, in such event, the Transaction Amount shall include the then present fair market value of such real estate, based primarily on market capitalization of such lease payments. The Transaction Amount shall also include any assets (net of related liabilities) used in the Company’s trade or business that are retained by or otherwise transferred to the Company’s owners in a transaction outside the ordinary course of business during the term of Headwaters’ engagement, if such Transaction Amount may be increased by payments related to future earnings, operations, or otherwise; the portion of Headwaters’ fee relating thereto shall be calculated and paid on the date of closing of the Transaction, as determined by the present value of the consideration based upon projections developed in connection with the Transaction.

BANKRUPTCY TERMINATION FEE

In addition to any fees and expenses that may be due payable as provided for herein, upon a Bankruptcy Event (as defined below), the Company shall immediately pay Headwaters a cash fee in the amount of 50% of the Minimum Success Fee (the “Bankruptcy Termination Fee”), The Bankruptcy Termination Fee shall be due in payable in immediately available fund or by wire transfer as directed by Headwaters. As used herein, a “Bankruptcy Event” shall mean (a) the institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to institution of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer or consent seeking reorganization or release under the federal Bankruptcy Act, or any other applicable federal or state law or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee or other similar official of the Company, or of any substantial part of its property, or the making by it of assignment for the benefit of creditors; or (b) if, within sixty (60) days after the commencement of an action against the Company (and service of process in connection therewith on the Company) seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such action shall not have been resolved in favor of the Company or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceeding shall thereafter be set aside, or if, within sixty (60) days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, such appointment shall not have been vacated.

ATTACHMENT A
PAGE 4

FEES FOR SERVICES REFERENCED IN E ENERGY ADAMS, LLC/HEADWATERS BD LLC ENGAGEMENT LETTER DATED 14th APRIL 2008.

TERMINATION OF ENGAGEMENT

Headwaters shall act as the Company’s exclusive financial advisor in connection with the proposed Transaction, Any engagement for services contained in this Attachment may be terminated by either the Company or Headwaters 30 days after receipt of written notice to that effect by the other party and, with respect to Headwaters’ termination by the Company, payment in full to Headwaters of all fees payable and reimbursement of all out-of-pocket expenses as described above. Additionally, the termination of this agreement will not affect the matters set out in Attachment B, “Conditions.” In the event that, at any time prior to 24 months following termination of this engagement by either party, the Company enters into a Transaction (or executes a definitive agreement which results in a Transaction), either (i) with any party with which Headwaters has sent offering materials and had discussions on behalf of the Company, or (ii) any party which comes to the attention of the Company as a potential party to a Transaction during the term of this engagement as a result of Headwaters’ activities, or (iii) any party that contacts the Company after termination of this engagement as a result of Headwaters’ efforts on the Company’s behalf then, in any such event, the Company will elect to either (a) engage Headwaters on terms equal to those herein to assist in closing such transaction, or (b) pay Headwaters full compensation with respect to such transaction as if this engagement had not been terminated.

Accepted and agreed to by:

E Adams Energy, LLC

By:	/s/ Carl Sitzmann
	Title: CEO
Date:	April 14, 2008
Headwaters BD, LLC
By:	/s/ Philip W. Seefried Jr.
	Philip W. Seefried Jr.
	Co-Founder & CEO

ATTACHMENT B
PAGE 1

CONDITIONS TO E ENERGY ADAMS, LLC/HEADWATERS BD LLC ENGAGEMENT LETTER DATED 14th DAY OF APRIL 2008

This attachment contains the detailed conditions of the above referenced engagement letter between E Energy Adams, LLC and Headwaters BD LLC.

USE OF INFORMATION

The Company agrees to furnish or cause to be furnished to Headwaters all information and data necessary for Headwaters to perform its duties under this engagement (the “Information”) and will give Headwaters access to the Company’s relevant shareholders and employees, as well as access to the Company’s independent accountants and legal counsel when the situation so requires. The Company hereby represents that the Information so furnished to Headwaters will be correct and complete in all material respects and not misleading. The Company recognizes and confirms that Headwaters will be entitled to use the information and other publicly available information and information in reports and other materials provided by others, and that Headwaters does not assume responsibility for and may rely, without independent verification, on the accuracy, completeness, reasonableness and fairness of any such information.

It is understood that any information or advice rendered by Headwaters or any of its representatives in connection with this engagement is for the confidential use of the Company and its Shareholders and will not be reproduced, disseminated, summarized, described, quoted or referred to or given to any other person at any time, in any manner or for any purpose without Headwaters’ prior written consent.

INDEMNITY AND CONTRIBUTION

The Company agrees to indemnify and hold harmless Headwaters and its affiliates and their respective members, partners, directors, officers, employees, agents, and controlling persons (Headwaters and each such person being an “Indemnified Party”) from and against any and all losses, claims, damages, judgments, assessments, costs and other liabilities, joint or several, to which such Indemnified Party may become subject under any applicable federal or state law, or otherwise, and related to or arising out of any transaction contemplated by this letter or the engagement of Headwaters pursuant to this letter.

The Company also will reimburse any Indemnified Party for all reasonable fees and expenses (including reasonable counsel fees and expenses) as they are incurred in connection with the investigation of, preparation for, or defense of any pending or threatened claim or any action or proceeding arising there from, whether or not such Indemnified Party is a party and whether or not such claim, action, or proceeding is initiated or brought by or on behalf of the Company.

ATTACHMENT B
PAGE 2

CONDITIONS TO E ENERGY ADAMS, LLC/HEADWATERS BD LLC ENGAGEMENT LETTER DATED 14th DAY OF APRIL 2008

The Company will not be liable under the foregoing indemnification and reimbursement provisions to the extent that any loss, claim, damage, judgment, assessment, cost or any other liability, or related expense, is found in a final judgment by a court of competent jurisdiction to have resulted primarily from an Indemnified Person’s bad faith or gross negligence. The Company also agrees that no Indemnified Party will have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company or its security holders or creditors related to or arising out of the engagement of Headwaters pursuant to this letter except to the extent that any loss, claim, damage, judgment, assessment, cost or any other liability, or related expenses, is found in a final judgment by a court of competent jurisdiction to have resulted primarily from an Indemnified Person’s bad faith or gross negligence.

The Company and Headwaters agree that if any indemnification or reimbursement sought pursuant to the preceding paragraph is for any reason unavailable or insufficient to hold it harmless (other than primarily because of an Indemnified Person’s bad faith or gross negligence) then, the Company and Headwaters shall contribute to the losses, claims, damages, judgments, assessments, costs and other liabilities and related expenses for which such indemnification is held unenforceable as is appropriate to reflect (i) the relative benefits to the Company on the one hand and Headwaters on the other hand, in connection with the transaction to which such indemnification or reimbursement relates, (ii) the relative fault of the parties, and (iii) other equitable considerations; provided, however, that in no event shall the amount to be contributed by Headwaters exceed the fees actually received by Headwaters under this engagement. The Company agrees that for the purposes of this paragraph the relative benefits to the Company and any Indemnified Party shall be deemed to be in same proportion that the aggregate cash consideration and value of securities or any other property payable, exchangeable or transferable in such transaction bears to the fees paid or payable to Headwaters under this engagement letter.

CERTAIN ACKNOWLEDGMENTS

The Company acknowledges and agrees that Headwaters has been retained to act solely as financial advisor to the Company and its Shareholders in connection with the

Analysis. In such capacity, Headwaters shall act as an independent contractor, and any duties of Headwaters arising out of its engagement pursuant to this letter shall be owed solely to the Company and its Shareholders. Headwaters may after completion of the services described herein and at its own expense, place announcements or advertisements in financial newspapers and journals describing its services hereunder.

ATTACHMENT B
PAGE 3

CONDITIONS TO E ENERGY ADAMS, LLC/HEADWATERS BD LLC ENGAGEMENT LETTER DATED 14th DAY OF APRIL 2008

MISCELLANEOUS

This letter shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that state, and will be

binding upon and inure to the benefit of the successors and assigns of the Company and Headwaters: The Company and Headwaters agree to waive trial by jury in any action, proceeding or counterclaim brought by or on behalf of either party with respect to any matter whatsoever relating to or arising out of any actual or proposed transaction or the engagement of or performance by Headwaters hereunder. This agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same document.

This agreement may not be waived, amended, modified or assigned, in any way, in whole or in part, including by operation of law, without the prior written consent of both parties hereto. The provisions hereof shall inure to the benefit of and be binding upon the successors, assigns and personal representatives of the Company and Headwaters.

The Company also hereby submits to the jurisdiction of the courts of the State of Colorado in any proceeding arising out of or relating to this agreement, including federal district courts located in such state, agrees not to commence any suit, action or proceeding relating thereto except in such courts, and waives, to the fullest extent permitted by law, the right to move to dismiss or transfer any action, brought in such court on the basis of any objection to personal jurisdiction, venue or inconvenient forum,

The Company hereby agrees to use its commercially reasonable efforts to place a. reference to Headwaters as the Company’s Financial Advisor in any public announcement of a Transaction which the Company publishes or in which consent of the Company is required for a third party to publish.

ATTACHMENT B
PAGE 4

CONDITIONS TO E ENERGY ADAMS, LLC/HEADWATERS BD LLC ENGAGEMENT LETTER DATED 14th DAY OF APRIL 2008

BUSINESS CONTINUITY PLANNING

Per FINRA regulations, Headwaters has developed a Business Continuity Plan (the “Plan”) on how we will respond to events that significantly disrupt our business. Please refer to our website at www.headwatersmb.com for a description of our Plan.

Accepted and agreed to by:

E Energy Adams, LLC

By:	/s / Carl Sitzmann
	Title: CEO
Date:	April 14, 2008
Headwaters BD, LLC
By:	/s/ Philip W. Seefried Jr.
	Philip W. Seefried Jr.
	Co-Founder & CEO

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO 17 CFR 240.15d-14(a)
(SECTION 302 CERTIFICATION)

I, Carl Sitzmann, certify that:

1.	I have reviewed this quarterly report on Form 10-QSB of E Energy Adams, LLC;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer, as of, and for, the periods presented in this report;
4.	The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer, and have:

a)	Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any changes in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal controls over financial reporting.

Date: May 14, 2008	/s/ Carl Sitzmann
	Carl Sitzmann, Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO 17 CFR 240.15d-14(a)
(SECTION 302 CERTIFICATION)

I, Nicholas E. Stovall, certify that:

1.	I have reviewed this quarterly report on Form 10-QSB of E Energy Adams, LLC;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer, as of, and for, the periods presented in this report;
4.	The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer, and have:

a)	Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any changes in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal controls over financial reporting.

Date: May 14, 2008	/s/ Nicholas E. Stovall
	Nicholas E. Stovall, Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-QSB of E Energy Adams, LLC (the “Company”) for the quarter ended March 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carl Sitzmann, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Carl Sitzmann Carl Sitzmann, Chief Executive Officer

Dated: May 14, 2008

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-QSB of E Energy Adams, LLC (the “Company”) for the quarter ended March 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nicholas E. Stovall, Chief Financial Officer (Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Nicholas E. Stovall Nicholas E. Stovall, Chief Financial Officer (Principal Financial Officer)

Dated: May 14, 2008