Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

     If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. þ

     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

     If this Form is post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

     If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o

     The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

     The information in this prospectus is not complete and may be changed. The securities offered by this prospectus may not be sold until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is neither an offer to sell these securities nor a solicitation of an offer to buy these securities in any state where an offer or sale is not permitted.

[Effective Date]

The Securities being offered by One Earth Energy, LLC are class B Limited Liability Company Membership Units

     Minimum Offering Amount           $30,100,000           Minimum Number of Class B Units              6,020

     This is the initial public offering of class B limited liability company membership units in One Earth Energy, LLC, a development-stage Illinois limited liability company. We intend to use the offering proceeds to pay for a portion of the construction and start-up operating costs of a 100-million gallon per year dry mill corn-processing ethanol plant to be located in Ford County, Illinois near Gibson City. We estimate the total project, including operating capital, will cost approximately $155,500,000. We expect to use debt financing plus any grants, bond financing and/or other incentives we may be awarded to complete project capitalization. We are exploring opportunities to develop one or more additional plants. In the event that we raise equity in excess of that needed to fund the construction of the plant located near Gibson City, Illinois, we may invest in the construction of additional plants in other locations. The determination of whether to invest in other ethanol plants will be determined by our board in its sole discretion. In no event will we raise equity exceeding the maximum offering amount. If our board of directors chooses not to invest excess funds in additional plants, we intend to retain the funds for general corporate uses, including but not limited to upgrading plant technology and exploring the use of alternative fuel sources.

     A unit represents a pro rata ownership interest in our capital, profits, losses, and distributions. No public market exists for our units and none is expected to develop. Our units will not be listed on a national exchange. The units are subject to a number of transfer restrictions imposed by our amended and restated operating agreement, as well as applicable tax and securities laws. We are selling the units directly to investors on a best efforts basis, without using an underwriter.

     The offering will end no later than [one year from the effective date of this registration statement]. If we sell the maximum number of units prior to [one year date], the offering will end on the date that the maximum number of units have been sold. We may also decide to end the offering any time after we have sold the minimum number of units and prior to [one year date]. If we decide to abandon the project for any reason, we will terminate the offering and return your investment with nominal interest.

     Investments will be held in escrow until the earliest of: (1) our receipt of $30,100,000 or more in offering cash proceeds and a written debt financing commitment for an amount ranging from $68,955,000 to $98,955,000, depending on the equity raised and any grants, bond financing and/or other incentives we may be awarded, including the $1,425,000 we raised in previous private placement offerings and $120,000 of anticipated grant proceeds; (2) [one year date]; or (3) termination of the offering.

     Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

     These securities are speculative securities and involve a significant degree of risk. Before investing in our units, purchasers should read this prospectus and consider each of the factors under “RISK FACTORS” beginning on page 8. You should consider these risks before investing in us:

     This summary only highlights selected information from this prospectus and may not contain all of the information that is important to you. You should carefully read the entire prospectus, the financial statements, and the attached exhibits before you decide whether to invest.

     We are an Illinois limited liability company organized on November 28, 2005. We are a development-stage company with no prior operating history. We do not expect to generate any revenue until we begin operating the proposed ethanol plant. Our ownership interests are represented by membership interests, which are designated as units. We have two classes of units; class A and class B. The securities being offered by One Earth Energy in this initial public offering are class B units. Our principal address and location is 1306 West 8^th Street, Gibson City, Illinois 60936. Our telephone number is (217) 784-4284.

     The following is a brief summary of this offering:

     We currently plan to register the offering only with the Illinois, Indiana, Iowa, Missouri, and Wisconsin state securities regulatory bodies. We may also offer or sell our units in other states in reliance on exemptions from the registration requirements of the laws of those other states. However, we may not generally solicit investors in any jurisdictions other than Illinois, Indiana, Iowa, Missouri and Wisconsin unless we decide to register in additional states. This limitation may result in the offering being unsuccessful. The directors and officers identified on page 7 of this prospectus will be offering the securities on our behalf directly to investors without the use of an underwriter. We will not pay commissions to our directors and officers for these sales.

     We are presently, and are likely for some time to continue to be, dependent upon our initial directors. Most of these individuals are experienced in business generally but the majority have very little or no experience in raising capital from the public, organizing and building an ethanol plant, and governing and operating a public company. Many of the directors have no expertise in the ethanol industry.

     If we are able to fully capitalize the project as described in our financing plan below, we expect to use the offering proceeds to build and operate a 100-million gallon per year dry mill corn-processing ethanol plant near Gibson City, Illinois. We expect Fagen, Inc. of Granite Falls, Minnesota to build our plant using technology developed by ICM, Inc. of Colwich, Kansas. We have not begun design or construction of our plant. We have secured three adjacent options for the purchase of approximately 80 acres in Ford County, Illinois near Gibson City to be used as the primary site for the construction of our proposed ethanol plant. We have also secured a fourth option for an alternative site in Champaign County, Illinois. This plan may be changed completely at the discretion of our board of directors.

     We expect the ethanol plant will annually process approximately 36 million bushels of corn into approximately 100-million gallons of fuel-grade ethanol, 321,000 tons of distillers grains for animal feed and 220,500 tons of carbon dioxide per year. Distillers grains and carbon dioxide are the principal by-products of the ethanol manufacturing process. These production estimates are based upon engineering specifications from our anticipated design-builder, Fagen, Inc. While we believe our production estimates are reasonable, actual production results could vary.

     We have entered into a non-binding letter of intent with Fagen, Inc. for the design and construction of our proposed ethanol plant for a price of $105,997,000, subject to construction cost index increases, which we have estimated in the amount of $7,949,775. In addition, our letter of intent with Fagen, Inc. provides for an adjustment to the construction price in certain circumstances. See “DESCRIPTION OF BUSINESS – Design-Build Team” for detailed information about our non-binding letter of intent with Fagen, Inc. We anticipate entering into a definitive agreement with Fagen, Inc. for design and construction services in exchange for a lump sum price equal to $105,997,000, subject to adjustments related to construction cost index increases. As is the customary practice in transactions with Fagen, Inc., we expect to execute this agreement after we have received the minimum amount of funds necessary to break escrow, $30,100,000, and have received a debt financing commitment sufficient to carry out our business plan.

     We have also entered into a phase I and phase II engineering services agreement with Fagen Engineering, LLC for the performance of certain engineering and design work in exchange for a fixed fee, which will be credited against the total design build costs of our project. Fagen Engineering, LLC performs the engineering services for projects constructed by Fagen, Inc. See “DESCRIPTION OF BUSINESS – Design-Build Team” for detailed information about our phase I and phase II engineering services agreement with Fagen Engineering, LLC.

     Construction of the project is expected to take 14 to 16 months from ground-breaking. Our anticipated completion date is scheduled for summer 2008. We anticipate that one, several or all of our five class A cooperative members may supply part or all of our corn supply necessary to operate the plant; however, we have not yet executed a definitive corn supply agreement with any of our cooperative members. Once the plant is operational, we intend to sell all of the ethanol and distillers grains produced at the facility. We expect to hire or contract with a third party to market and sell our ethanol and distillers grains. There are no current plans to capture and market the

carbon dioxide, however, at some point in the future we may explore selling our raw carbon dioxide to a third party processor. We intend to sell approximately 10% of our distillers grains locally and the remaining 90% regionally or nationally. We expect to be dependent on the ethanol broker and distillers grain broker we engage.

     We are exploring the possibility of developing and building one or more additional ethanol plants in the United States. It is possible that we may take advantage of an opportunity which could result in our using equity raised in this offering for development of other projects, issuing additional equity and incurring additional significant debt obligations. If we decide to build one or more additional plants, we may not be successful. Even if we are successful in building additional plants, the profitability of the operations of those additional plants will affect the value of your investment in this offering. We are in the preliminary stages of considering and identifying these opportunities.

     We estimate the total project will cost approximately $155,500,000. We expect that the design and construction of the plant will cost approximately $105,997,000, subject to adjustments for construction cost index increases, which we have estimated to be $7,949,775, with additional start-up and development costs of $41,553,225. This is a preliminary estimate based primarily upon the experience of our general contractor, Fagen, Inc. with ethanol plants similar to the plant we intend to build and operate and assumes that we are not required to use union labor in the construction of our plant. We expect our cost estimate to change as we continue to develop the project. This change could be significant.

     Although we do not intend to apply for or accept certain grants that would require our use of union labor in constructing our plant, unforeseen circumstances could arise which would make it difficult for Fagen, Inc. to complete the construction of our plant without utilizing union labor. If Fagen is required to use union labor to construct all or a portion of our plant, we would expect our construction costs to increase substantially. If our construction costs rise substantially, it may be necessary for us to sell the maximum number of units provided for in this offering prior to terminating the offering, seek a higher than anticipated amount of debt financing, or a combination of the two. If the cost of using union labor is so significant that we are unable to cover our expenses by selling the maximum number of units and/or obtaining a higher than anticipated amount of debt financing, or if we are unable to obtain additional debt financing beyond the amount we currently anticipate that we will need, we may not be able to finance the construction of our ethanol plant and commencement of its operations. In this event, it may be necessary for us to abandon the project.

     We expect to capitalize our project using a combination of equity and debt to supplement the proceeds from our previous private placement. Through our previous private placement, we raised $1,425,000 of seed capital equity to fund our development, organizational and offering expenses. All of these proceeds are attributable to investments by our promoters as defined by the North American Securities Administrators Association (NASAA). However, the NASAA Statement of Policy Regarding Promoter’s Equity Investment requires that the initial equity investment by promoters of our project equal or exceed a certain percentage of the aggregate public offering price. Our promoters’ investment is less than the required minimum amount pursuant to this policy. Accordingly, a state administrator would have the discretion to disallow our offering. None of the states in which we have registered have restricted our offering because of our noncompliance with this standard.

     We intend to raise a minimum of $30,100,000 and a maximum of $60,100,000 in this offering. In addition, we have executed an agreement with Farmers Energy Incorporated (FEI), a subsidiary of Rex Stores Corporation, whereby FEI has agreed to invest $24,900,000 in One Earth Energy in a separate private placement following the closing of this registered offering, so long as we have raised a minimum of $30,100,000 in this registered offering and satisfy certain other conditions, described below. Depending on the level of equity raised in this offering, the subsequent investment by FEI and the amount of any grants, bond financing and/or other incentives we may be awarded, we will need to obtain debt financing ranging from approximately $68,955,000 to $98,955,000 in order to supplement our seed capital proceeds of $1,425,000 and $120,000 of anticipated grant proceeds to fully capitalize the project. We estimated the range of debt financing we will need by adding FEI’s subsequent investment to the minimum and maximum offering amounts from this registered offering and then subtracting those minimum and maximum amounts of equity, the $1,425,000 we raised as seed capital and the $120,000 of anticipated grant proceeds from the estimated total project cost.

     Our financing plan will require a significant amount of debt. We have no contracts or commitments with any bank, lender or financial institution for this debt financing. There are no assurances that we will be able to obtain the necessary debt financing, other financing or grants sufficient to capitalize the project. We have started identifying and interviewing potential lenders, however, we have not signed any commitment or contract for debt financing. Completion of the project relies entirely on our ability to attract these loans and close on this offering. The level of debt we require may be reduced by any bond financing, tax increment financing, grants and other incentives awarded to us. Depending on the number of units sold, we may also seek third party credit providers to provide subordinated debt for the construction and initial operating expenses of the project.

     Before we release funds from escrow, we must secure a written debt financing commitment. A commitment for debt financing is not a binding loan agreement and the lender may not be required to provide us the debt financing as set forth in the commitment because a commitment is only an agreement to lend subject to certain

terms and conditions. It is also subject to the negotiation, execution, and delivery of loan and loan-related documentation satisfactory to the lender. Therefore, even if we sell the aggregate minimum number of units prior to [one year date] and receive a debt financing commitment, we may not satisfy the loan commitment conditions before the offering closes, or at all. If this occurs, we have three alternatives:

     We plan to obtain a significant amount of our equity financing from a single institutional investor. On May 26, 2006, we entered into an agreement and a guaranty with Farmers Energy Incorporated (FEI), a subsidiary of Rex Stores Corporation, whereby FEI agreed to purchase 4,980 restricted class B units in a subsequent private placement for a total purchase price of $24,900,000. Pursuant to the terms of our agreement, FEI is obligated to purchase 4,980 of our class B units in a private placement offering if we meet the following conditions prior to June 30, 2007: (i) we have at least $30,100,000 of cash proceeds from this registered offering (including amounts in escrow but excluding proceeds from FEI’s subscription), resulting from the sale of units to parties other than FEI; (ii) we have entered into a binding loan financing commitment in an amount which will be sufficient when combined with net offering proceeds to complete construction of the ethanol plant; (iii) we are in compliance with all covenants and are in good standing under a binding loan financing commitment; and (iv) all other conditions are met, including certain amendments to the our operating agreement and approval by FEI’s board of directors. Prior to the filing of this registration statement, we amended and restated our operating agreement to incorporate FEI’s changes and received approval of FEI’s board of directors. If the maximum number of units is sold in this offering, FEI will have an equity interest in the company of at least 27.89% following its purchase of units in the subsequent private placement. If the minimum number of units is sold in this offering, FEI’s equity interest, following its purchase of units in the subsequent private placement, will be at least 42%. FEI’s guaranty to purchase the units will expire on the earlier of: (i) June 30, 2007; (ii) the closing of the transactions contemplated by our agreement with FEI; or (iii) the termination of the agreement.

     Our agreement with FEI required us to make the following amendments to our operating agreement to provide FEI with: (i) a right of first offer to participate in any future ethanol and/or biodiesel investment in which we enter; (ii) tag-along rights, i.e., the right to participate prorata in any sale of units (whether made in one transaction or a series of related transactions); (iii) customary registration rights; and (iv) preemptive rights with regard to all future offerings of our units, so as to provide FEI with the ability to avoid being diluted (if FEI chooses not to participate in such future offerings, we may offer such units to other investors).

     On July 11, 2006, we entered into a registration agreement with Farmers Energy One Earth, LLC, a wholly owned subsidiary of and successor-in-interest to FEI (together with FEI referred to as “FEI”), granting FEI customary registration rights with respect to the class B units to be purchased by FEI in the subsequent private placement offering. Under the terms of the registration agreement, any time after the fifth anniversary of FEI’s purchase of our class B units, or earlier if we complete an initial public offering registered with the Securities and Exchange Commission that results in our securities being publicly traded and listed on a national securities exchange or automated quotation system, FEI may require us to register its class B units (this is referred to as a demand registration). In addition, if at any time we propose to register any of our securities with the Securities and Exchange Commission (with certain limited exceptions), FEI may require us to also register some or all of their class B units (this is referred to as a piggyback registration). In the event FEI requires either a demand or piggyback registration, we must use our best efforts to register its class B units. Under these circumstances, we must pay the costs associated with registering FEI’s units.

     We are a development-stage company with no operating history and no revenues. Please see “SELECTED FINANCIAL DATA” for a summary of our finances and the index to our financial statements for our detailed financial information.

     Except as otherwise provided in the special allocation rules, profits and losses that we recognize will be allocated to you in proportion to the number of units you hold. Please see “DESCRIPTION OF MEMBERSHIP UNITS – Allocation of Profits and Losses” for a summary of our allocation rules.

     The class A and B units will be subject to certain restrictions on transfers pursuant to our amended and restated operating agreement. Unit holders may not transfer their units prior to the date on which substantial operations of the ethanol plant commence unless such transfer is: (1) to the investor’s administrative trustee to whom such units are transferred involuntary by operation of law; or (2) made without consideration to or in trust for the investor’s descendants or spouse. Beginning any time after substantial operations of the ethanol plant commence, investors may transfer their units to any person or organization only if such transfer meets the conditions precedent to a transfer under our amended and restated operating agreement and (1) has been approved by the directors; or (2) the transfer is made to any other member or to an affiliate or related party of the transferring member.

     In addition, transfers may be restricted by state securities laws. As a result, investors may not be able to liquidate their investments in the units and therefore may be required to assume the risks of investing in us for an indefinite period of time. Investment in us should be undertaken only by those investors who can afford an illiquid investment. Please see “DESCRIPTION OF MEMBERSHIP UNITS – Restrictions on Transfer of Units” and “SUMMARY OF OUR AMENDED AND RESTATED OPERATING AGREEMENT – Unit Transfer Restrictions” for a detailed discussion of our transfer restrictions.

     Our tax counsel has opined that, assuming that we do not elect to be treated as a corporation, we will be treated as a partnership for federal income tax purposes. This means that we will not pay any federal income tax and the unit holders will pay tax on their shares of our net income. We will not elect to be taxed as a corporation and will endeavor to take stapes as are feasible and advisable to avoid classification as a publicly traded partnership. Please see “FEDERAL INCOME TAX CONSEQUENCES OF OWNING OUR UNITS – Partnership Status” for a description of our federal income tax status.

     This prospectus does not constitute an offer to sell or the solicitation of an offer to purchase any securities in any jurisdiction in which, or to any person to whom, it would be unlawful to do so.

     Investing in our units involves significant risk. Please see “RISK FACTORS” beginning on page 8 to read about important risks you should consider before purchasing our units. No representations or warranties of any kind are intended or should be inferred with respect to economic returns or tax benefits of any kind that may accrue to the investors of the securities.

     These securities have not been registered under the securities laws of any state other than the states of Illinois, Indiana, Iowa, Missouri and Wisconsin and may be offered and sold in other states only in reliance on exemptions from the registration requirements of the laws of those other states.

     In making an investment decision, investors must rely upon their own examination of the entity creating the securities and the terms of the offering, including the merits and risks involved. Investors should not invest any funds in this offering unless they can afford to lose their entire investment. There is no public market for the resale

of the units in the foreseeable future. Furthermore, state securities laws and our amended and restated operating agreement place substantial restrictions on the transferability of the units. Investors should be aware that they will be required to bear the financial risks of this investment for an indefinite period of time.

     During the course of the offering of the units and prior to the sale of the units, each prospective purchaser and his or her representatives, if any, are invited to ask questions of, and obtain information from, our representatives concerning the information about the offering contained in this registration statement. Prospective purchasers or representatives having questions about the information contained in this registration statement should contact us at (217) 784-4284, or at our business address: One Earth Energy, LLC, 1306 West 8^th Street, Gibson City, Illinois 60936. Also, you may contact any of the following directors directly at the phone numbers listed below:

     Throughout this prospectus, we make “forward-looking statements” that involve future events, our future performance, and our expected future operations and actions. In some cases, you can identify forward-looking statements by the use of words such as “may,” “should,” “plan,” “future,” “intend,” “could,” “estimate,” “predict,” “hope,” “potential,” “continue,” “believe,” “expect” or “anticipate” or the negative of these terms or other similar expressions. The forward-looking statements are generally located in the material set forth under the headings “MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS,” “PLAN OF DISTRIBUTION,” “RISK FACTORS,” “USE OF PROCEEDS” and “DESCRIPTION OF BUSINESS,” but may be found in other locations as well. These forward-looking statements generally relate to our plans and objectives for future operations and are based upon management’s reasonable estimates of future results or trends. Although we believe that our plans and objectives reflected in or suggested by such forward-looking statements are reasonable, we may not achieve such plans or objectives. Actual results may differ from projected results due to, but not limited to, unforeseen developments, including developments relating to the following:

     You should read this prospectus completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements contained in this prospectus have been compiled as of the date of this prospectus and should be evaluated with consideration of any changes occurring after

the date of this prospectus. Except as required under federal securities laws and SEC rules and regulations, we will not update forward-looking statements even though our situation may change in the future.

     The purchase of units involves substantial risks and the investment is suitable only for persons with the financial capability to make and hold long-term investments not readily converted into cash. Investors must, therefore, have adequate means of providing for their current and future needs and personal contingencies. Prospective purchasers of the units should carefully consider the risk factors set forth below, as well as the other information appearing in this prospectus, before making any investment in the units. Investors should understand that there is a possibility that they could lose their entire investment in us.

Failure to sell the minimum number of units will result in the failure of this offering, which means your investment may be returned to you with nominal interest.

     We may not be able to sell the minimum amount of units required to close on this offering. We must sell and receive at least $30,100,000 worth of units to close the offering. If we do not sell units and collect funds of at least $30,100,000 in this offering by [one year from the effective date of this registration statement], we cannot close the offering and must return investors’ money with nominal interest, less expenses for escrow agency fees. This means that from the date of an investor’s investment, the investor would earn a nominal rate of return on the money he, she, or it deposits with us in escrow. We do not expect the termination date to be later than [one year from effective date of this prospectus].

We are not experienced in selling securities and no one has agreed to assist us or purchase any units that we cannot sell ourselves, which may result in the failure of this offering.

     We are making this offering on a “best efforts” basis, which means that we will not use an underwriter or placement agent. We have no firm commitment from any prospective buyer to purchase our units, other than our agreement with FEI to purchase class B units in a subsequent private placement, and there can be no assurance that the offering will be successful. We plan to offer the units directly to investors in the states of Illinois, Indiana, Iowa, Missouri, and Wisconsin. We plan to advertise in local media and by mailing information to area residents. We also plan to hold informational meetings throughout Illinois, Indiana, Iowa, Missouri and Wisconsin. Our directors have significant responsibilities in their primary occupations in addition to trying to raise capital. These individuals have no broker-dealer experience and most of our directors have limited or no experience with public offerings of securities. There can be no assurance that our directors will be successful in securing investors for the offering.

Proceeds of this offering are subject to promissory notes due after the offering is closed and investors unable to pay the 90% balance on their investment may have to forfeit their 10% cash deposit.

     As much as 90% of the total offering proceeds of this offering could be subject to promissory notes that may not be due until after the offering is closed. The success of our offering will depend on the investors’ ability to pay the outstanding balances on these promissory notes. In order to purchase units in this offering and become a member in One Earth Energy, each investor must, among other requirements, submit a check in the amount of 10% of the total amount due for the number of units for which subscription is sought, and a promissory note for the remaining 90% of the total amount due for the units. That balance will become due within 30 days of the date of our notice that our sales of units have met or exceeded the aggregate minimum offering amount, including the amounts owed under the promissory notes, of $30,100,000. We may not be able to collect on subscriptions from investors and are subject to the risk that subscribers may default on their payment obligations under their subscription agreements and promissory notes. We will take a security interest in the units. We intend to retain the initial payment and to seek damages from any investor who defaults on the promissory note obligation. This means that if you are unable to pay the 90% balance of your investment within 30 days of our notice, you may have to forfeit your 10% cash deposit. Nonetheless, the success of the offering depends on the payment of these amounts by the obligors.

     If we sell the minimum number of units by [one year date], we will be able to close the offering. However, we will not be able to release funds from escrow until the notes are paid off and the cash proceeds in escrow equal or exceed $30,100,000, we have received a written debt financing commitment, and our escrow agent has provided an affidavit to each state securities department in which we have registered our securities for sale stating that the escrow agreement requirements have been satisfied. Accordingly, we could have insufficient capital to complete the construction of the ethanol plant or insufficient ongoing operating capital.

Investors will not be allowed to withdraw their investment, which means that you should invest only if you are willing to have your investment unavailable to you for an indefinite period of time.

     Investors will not be allowed to withdraw their investments for any reason, unless we tender a rescission offer. We do not anticipate making a rescission offer. This means that from the date of your investment through [the ending date of this offering], your investment will be unavailable to you. You should only invest in us if you are willing to have your investment be unavailable for this period of time, which could be up to one year. If our offering succeeds and we convert your cash investment into our units, your investment will be denominated in our units until you transfer those units. There are significant transfer restrictions on our units. You will not have a right to withdraw and demand a cash payment from us.

We do not satisfy the promoters’ equity investment requirements recommended by NASAA, therefore our offering may be disallowed by state administrators that follow the NASAA Statement of Policy Regarding Promoter’s Equity Investment.

     The proceeds from our private placement, totaling $1,425,000, are attributable to investments by our promoters as defined by the North American Securities Administrators Association (NASAA). Pursuant to the Statement of Policy Regarding Promoter’s Equity Investment promulgated by the NASAA, any state administrator may disallow an offering of a development stage company if the initial equity investment by a company’s promoters does not equal or exceed a certain percentage of the aggregate public offering price. Our promoters’ investment is less than the required minimum amount pursuant to this policy. Accordingly, a state administrator would have the discretion to disallow our offering. The states of Indiana and Missouri have restricted our offering because of our noncompliance with this standard. Indiana and Missouri have required us to execute a lock-up agreement restricting our promoters’ ability to transfer their units. Our directors executed this agreement on November 1, 2006 and pursuant to the terms of the agreement, our initial class A members will be restricted from transferring their units for a period of three years.

If we are unable to fulfill our obligations under our agreement with FEI, we may not be able to obtain sufficient equity financing to construct our proposed ethanol plant.

     On May 26, 2006, we entered into an agreement and a guaranty with FEI, whereby FEI agreed to purchase 4,980 of our class B units in a private placement offering subsequent to this registered offering for a total purchase price of $24,900,000. Pursuant to the terms of our agreement, FEI is obligated to purchase 4,980 restricted class B units if we meet the following conditions prior to June 30, 2007: (i) we have at least $30,100,000 of cash proceeds (including amounts in escrow but excluding proceeds from FEI’s subscription), resulting from the sale of units to parties in this registered offering other than FEI; (ii) we have entered into a binding loan financing commitment in an amount which will be sufficient when combined with net offering proceeds to complete construction of the ethanol plant; (iii) we are in compliance with all covenants and are in good standing under a binding loan financing commitment; and (iv) all other conditions are met, including certain amendments to the our operating agreement and approval by FEI’s board of directors. Prior to the filing of this registration statement, we amended and restated our operating agreement to incorporate FEI’s changes and received approval of FEI’s board of directors. If the maximum number of units is sold in this offering, FEI will have an equity interest in the company of at least 27.89% following its purchase of units in the subsequent private placement. If the minimum number of units is sold in this offering, FEI’s equity interest will be at least 42% following its purchase of units in the subsequent private placement. FEI’s guaranty to purchase the units will expire on the earlier of: (i) June 30, 2007; (ii) the closing of the transactions contemplated by our agreement with FEI; or (iii) the termination of the agreement. The private placement units to be purchased by FEI comprise a significant amount of our equity financing, and if we fail to satisfy our obligations under our agreement, then FEI will not be obligated to purchase units. If this occurs, we may not be able to raise sufficient equity from other sources to construct our proposed ethanol plant.

Even if we raise the minimum amount of equity in this offering, we may not obtain the debt financing necessary to construct and operate our ethanol plant, which would result in the failure of the project and One Earth Energy.

     Our financing plan requires a significant amount of debt financing. We do not have contracts or commitments with any bank, lender or financial institution for debt financing, and we will not release funds from escrow until we secure a written debt financing commitment sufficient to construct and operate the ethanol plant. If debt financing on acceptable terms is not available for any reason, we will be forced to abandon our business plan and return your investment from escrow plus nominal interest less deduction for escrow agency fees. Including the $1,425,000 we raised in our previous private placement offering and $120,000 of anticipated grant proceeds and depending on the level of equity raised in this offering and the investment by FEI in the subsequent private placement, we expect to require approximately $68,955,000 to $98,955,000 (less any bond or tax increment financing, additional grants and other incentives we are awarded) in senior or subordinated long-term debt from one or more commercial banks or other lenders. Because the amounts of equity, grant funding bonds and/or tax increment financing are not yet known, the exact amount and nature of total debt is also unknown.

     If we do not sell the minimum amount of units, the offering will not close. Even though we must receive a debt financing commitment as a condition of closing escrow, the agreements to obtain debt financing may not be fully negotiated when we close on escrow. Therefore, there is no assurance that such commitment will be received, or if it is received, that it will be on terms acceptable to us. If agreements to obtain debt financing are arranged and executed, we expect that we will be required to use the funds raised from this offering prior to receiving the debt financing funds.

Future loan agreements with lenders may hinder our ability to operate the business by imposing restrictive loan covenants, which could delay or prohibit us from making cash distributions to our unit holders.

     Our debt load and service requirements necessary to implement our business plan will result in substantial debt service requirements. Our debt load and service requirements could have important consequences which could hinder our ability to operate, including our ability to:

     In the event that we are unable to pay our debt service obligations, our creditors could force us to (1) reduce or eliminate distributions to unit holders (even for tax purposes); or (2) reduce or eliminate needed capital expenditures. It is possible that we could be forced to sell assets, seek to obtain additional equity capital or refinance or restructure all or a portion of our debt. In the event that we would be unable to refinance our indebtedness or raise funds through asset sales, sales of equity or otherwise, our ability to operate our plant would be greatly affected and we may be forced to liquidate.

If we decide to spend equity proceeds and begin plant construction before we have fulfilled all of the loan commitment conditions, signed binding loan agreements or received loan proceeds, we may be unable to close the loan and you may lose all of your investment.

     If we sell the aggregate minimum number of units prior to [one year from the effective date of this registration statement] and satisfy the other conditions of releasing funds from escrow, including our receipt of a written debt financing commitment, we may decide it is necessary to begin spending the equity proceeds before we have obtained binding loan agreements. Our operating documents do not prohibit us from spending equity proceeds prior to obtaining binding loan agreements because doing so may limit our ability to make a down payment to Fagen, Inc. as is required to commence construction of the plant within our anticipated timeline and negotiated

price. If we are unable to close the loan after we begin spending equity proceeds, we may have to seek another debt financing source or abandon the project. If that happens, you could lose some or all of your investment.

If we successfully release funds from escrow but are unable to close our loan, we may decide to hold your investment while we search for alternative debt financing sources, which means your investment will continue to be unavailable to you and may decline in value.

     We must obtain a written debt financing commitment prior to releasing funds from escrow. However, a debt financing commitment does not guarantee that we will be able to successfully close the loan. If we fail to close the loan, we may choose to seek alternative debt financing sources. While we search for alternative debt financing, we may continue to hold your investment in another interest-bearing account. Your investment will continue to be unavailable while we search for alternative debt financing. It is possible that your investment will decline in value while we search for the debt financing necessary to complete our project.

We have no operating history, which could result in errors in management and operations causing a reduction in the value of your investment.

     We were recently formed and have no history of operations. We cannot provide assurance that we can manage start-up effectively and properly staff operations, and any failure to manage our start-up effectively could delay the commencement of plant operations. A delay in start-up operations is likely to further delay our ability to generate revenue and satisfy our debt obligations. We anticipate a period of significant growth, involving the construction and start-up of operations of the plant. This period of growth and the start-up of the plant are likely to be a substantial challenge to us. If we fail to manage start-up effectively, you could lose all or a substantial part of your investment.

We have little to no experience in the ethanol industry, which may affect our ability to build and operate the ethanol plant.

     We are presently, and are likely for some time to continue to be, dependent upon our initial directors. Most of these individuals are experienced in business generally but the majority have very little or no experience in raising capital from the public, organizing and building an ethanol plant, and governing and operating a public company. Many of the directors have no expertise in the ethanol industry. See “DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.” In addition, certain directors on our board are presently engaged in business and other activities which impose substantial demand on the time and attention of such directors. You should not purchase units unless you are willing to entrust all aspects of our management to our board of directors.

We will depend on Fagen, Inc. for expertise in beginning operations in the ethanol industry and any loss of this relationship could cause us delay and added expense, placing us at a competitive disadvantage.

     We will be dependent on our relationship with Fagen, Inc. and its employees. Any loss of this relationship with Fagen, Inc., particularly during the construction and start-up period for the plant, may prevent us from commencing operations and result in the failure of our business. The time and expense of locating new consultants and contractors would result in unforeseen expenses and delays. Unforeseen expenses and delays may reduce our ability to generate revenue and profits and significantly damage our competitive position in the ethanol industry, such that you could lose some or all of your investment.

If we fail to finalize critical agreements, such as the design-build agreement, ethanol and distillers grains marketing agreements and utility supply agreements, or the final agreements are unfavorable compared to what we currently anticipate, our project may fail or be harmed in ways that significantly reduce the value of your investment.

     This prospectus makes reference to documents or agreements that are not yet final or executed, and plans that have not been implemented. In some instances such documents or agreements are not even in draft form. The definitive versions of those agreements, documents, plans or proposals may contain terms or conditions that vary

significantly from the terms and conditions described. These tentative agreements, documents, plans or proposals may not materialize or, if they do materialize, may not prove to be profitable.

Our lack of business diversification could result in the devaluation of our units if our revenues from our primary products decrease.

     We expect our business to solely consist of ethanol and distillers grains production and sales. We do not have any other lines of business or other sources of revenue if we are unable to complete the construction and operation of the plant. Our lack of business diversification could cause you to lose all or some of your investment if we are unable to generate revenues by the production and sales of ethanol and distillers grains since we do not expect to have any other lines of business or alternative revenue sources.

We have a history of losses and may not ever operate profitably.

     For the period of November 28, 2005 through July 31, 2006, we incurred an accumulated net loss of $347,946. We will continue to incur significant losses until we successfully complete construction and commence operations of the plant. There is no assurance that we will be successful in completing this offering or in our efforts to build and operate an ethanol plant. Even if we successfully meet all of these objectives and begin operations at the ethanol plant, there is no assurance that we will be able to operate profitably.

Your investment may decline in value due to decisions made by our initial board of directors and until the plant is built, you have no ability to elect directors and no ability to replace the class A directors through amendment to our amended and restated operating agreement.

     Our amended and restated operating agreement provides that the initial board of directors will consist of ten class A directors appointed by the class A members. Each class A members will be entitled to appoint two class A directors. Our class A directors will serve indefinitely at the pleasure of the class A member appointing him or her or until a successor is appointed or until the earlier death, resignation or removal of such class A director. At the first annual or special meeting of the members following commencement of substantial operations of the ethanol plant, the class B members shall elect class B directors. The number of class B directors will be fixed at a number that is one less than the number of class A directors from time to time. Until the first annual or special meeting, the class B members will have no control over our operations. If our project suffers delays due to financing or construction, our initial board of directors consisting of only class A directors could serve for an extended period of time. You will have no recourse to replace these class A directors because an amendment to this section of the amended and restated operating agreement requires the unanimous approval of the holders of class A units and a majority of the holders of class B units.

We have not hired any employees, and may not be able to hire employees capable of effectively operating the ethanol plant, which may hinder our ability to operate profitably.

     Because we are a development-stage company, we have not hired any employees. Prior to completion of the plant construction and commencement of operations, we intend to hire approximately 45 full-time employees. Following completion of the ethanol plant, we expect to have 32 employees in ethanol production operations and 13 in general management and administration. However, we may not be successful in attracting or retaining such an individual because of the competitive market as new plants are constructed and the limited number of individuals with expertise in the area. In addition, we may have difficulty in attracting other competent personnel to relocated to Illinois in the event that such personnel are not available locally. If we are not able to hire and retain employees who can effectively operate the plant, our ability to generate revenue will be significantly reduced, or prevented altogether, thereby limiting or eliminating any profit that we might take which could result in the loss of all or a substantial portion of your investment.

We will depend on Fagen, Inc. and ICM, Inc. to design and build our ethanol plant; however, we currently have no agreement with ICM, Inc. and we have no binding design-build agreement with Fagen, Inc. The failure of either to enter into binding agreements could force us to abandon business, hinder our ability to operate profitably or decrease the value of your investment.

     We will be highly dependent upon Fagen, Inc. and ICM, Inc. to design and build the plant, but we have no definitive or binding agreement with either company. We have entered into a non-binding letter of intent with Fagen, Inc. for various design and construction services. We have also entered into a phase I and phase II engineering services agreement with Fagen Engineering, LLC for certain engineering and design work to allow us to obtain these services prior to the execution of the design-build agreement. Fagen Engineering, LLC provides engineering services for projects constructed by Fagen, Inc. Fagen, Inc. has indicated its intention to deliver to us a proposed design-build agreement, in which it will serve as our general contractor and will engage ICM, Inc. to provide design and engineering services. We anticipate that we will execute a definitive and binding design-build agreement with Fagen, Inc. to construct the plant when we have received the minimum amount of funds necessary to break escrow and have obtained a debt financing commitment sufficient to carry out our business plan. However, we have not yet negotiated, reviewed or executed the design-build agreement and there is no assurance that such an agreement will be executed.

     If we do not execute a definitive, binding design-build agreement with Fagen, Inc., or if Fagen, Inc. terminates its relationship with us after initiating construction, there is no assurance that we would be able to obtain a replacement general contractor. Any such event may force us to abandon our business. Fagen, Inc. and ICM, Inc. and their affiliates, may have a conflict of interest with us because Fagen, Inc., ICM, Inc. and their employees or agents are involved as owners, creditors and in other capacities with other ethanol plants in the United States. We cannot require Fagen, Inc. or ICM, Inc. to devote their full time and attention to our activities. As a result, Fagen, Inc. and ICM, Inc. may have, or come to have, a conflict of interest in allocating personnel, materials and other resources to our plant.

We may need to increase cost estimates for construction of the ethanol plant due to the use of union labor or other construction cost increases, and such increase could result in devaluation of our units if ethanol plant construction requires additional capital.

     We anticipate that Fagen, Inc. will construct the plant for a contract price, based on the plans and specifications in the anticipated design-build agreement. We have based our capital needs on a design for the plant that will cost approximately $105,997,000, subject to construction cost index increases of $7,949,775 with additional start-up and development costs of $41,553,225 for a total project completion cost of approximately $155,500,000. This cost includes construction period interest of 8%. The estimated total cost of the project is based on preliminary discussions, and there is no assurance that the final cost of the plant will not be higher. There is no assurance that there will not be design changes or cost overruns associated with the construction of the plant. Under the terms of the non-binding letter of intent we signed with Fagen, Inc., if as of the date we give a notice to proceed to Fagen, Inc., the Construction Cost Index published by Engineering News-Record Magazine (CCI) for the month in which the notice to proceed is given has increased over the CCI for September 2005, the contract price will be increased by an equal percentage amount. Our total project cost of $155,500,000 includes estimated construction cost index increases of $7,949,775, however, this is only an estimate and our construction cost index increases could be much higher, which could cause our total project cost to increase. In addition, the $105,997,000 construction price contained in the letter of intent assumes the use of non-union labor. In the event Fagen is required to employ union labor or compensate labor at higher than anticipated prevailing wages, the construction price will be adjusted upwards to include any increased costs associated with such labor or wages. We have not included any additional amount in our budget for the use of union labor or to compensate labor at prevailing wages.

     We do not intend to apply for or accept certain grants that would require our use of union labor in constructing our plant. Because we expect to be able to avoid being legally required to use union labor, we do not anticipate any increase in our plant construction costs associated with union labor. As a practical matter, however,

we recognize that unforeseen circumstances could arise which would make it difficult for Fagen, Inc. to complete the construction of our plant without utilizing union labor. Under these circumstances, we would expect our construction costs to increase substantially; however we are unable to estimate the likelihood of this happening and the degree to which the use of union labor would be desirable. Therefore, we are unable to estimate the potential impact that the use of union labor would have on our project costs and the date of completion. If we are required to use union labor and as a result the cost to construct our plant increases substantially, it may be necessary to abandon the project and you may lose a portion or all of your investment.

     If we are required to use union labor to construct all or part of the ethanol plant, it may be necessary for us to sell the maximum number of units provided for in this offering prior to terminating the offering, seek a higher than anticipated amount of debt financing, or a combination of the two. In no event will we sell more than the maximum number of units. If the cost of using union labor is so significant that we are unable to cover our expenses by selling the maximum number of units and/or obtaining a higher than anticipated amount of debt financing, or if we are unable to obtain additional debt financing beyond what we currently anticipate that we will need, we may not be able to obtain the funds we need to finance the construction of our ethanol plant and commence operations. Under those circumstances, it may be necessary for us to abandon the project. If that happens, you could lose all or a portion of your investment.

     In addition, increases in price of steel, cement and other construction materials, as well as increases in the cost of labor, could affect the final cost of construction of the ethanol plant. Further, shortages of steel, cement and other construction materials, as well labor shortages, could affect the final completion date of the project. Advances and changes in technology may require changes to our current plans in order to remain competitive. Any significant increase in the estimated construction cost of the plant could delay our ability to generate revenues and reduce the value of your units because our revenue stream may not be able to adequately support the increased cost and expense attributable to increased construction costs.

Construction delays could result in devaluation of our units if our production and sale of ethanol and its by-products are similarly delayed.

     We currently expect our plant to be operating by summer 2008; however, construction projects often involve delays in obtaining permits, construction delays due to weather conditions, or other events that delay the construction schedule. In addition, changes in interest rates or the credit environment or changes in political administrations at the federal, state or local level that result in policy change towards ethanol or this project, could cause construction and operation delays. If it takes longer to construct the plant than we anticipate, it would delay our ability to generate revenue and make it difficult for us to meet our debt service obligations. This could reduce the value of the units.

Fagen, Inc. and ICM, Inc. may have current or future commitments to design and build other ethanol manufacturing facilities ahead of our plant and those commitments could delay construction of our plant and our ability to generate revenues.

     We have asked Fagen, Inc. and ICM, Inc. how many other ethanol plants each has contracted to design and build, however Fagen, Inc. and ICM, Inc. do not disclose the numbers of their other commitments, and as private companies, they are not required to do so. Therefore, we do not know how many other ethanol plants they have contracted to design and build. It is possible that Fagen, Inc. and ICM, Inc. have outstanding commitments to other facilities that cause the construction of our plant to be delayed. It is also possible that Fagen, Inc. and ICM, Inc. will continue to contract with new facilities for plant construction and with operating facilities for expansion construction. These current and future building commitments may reduce the resources of Fagen, Inc. and ICM, Inc. to such an extent that construction of our plant is significantly delayed. If this occurs, our ability to generate revenue will also be delayed and the value of your investment will be reduced.

Defects in plant construction could result in devaluation of our units if our plant does not produce ethanol and its by-products as anticipated.

     There is no assurance that defects in materials and/or workmanship in the plant will not occur. Under the terms of the anticipated design-build agreement with Fagen, Inc., Fagen, Inc. would warrant that the material and equipment furnished to build the plant will be new, of good quality, and free from material defects in material or workmanship at the time of delivery. Though we expect the design-build agreement to require Fagen, Inc. to correct all defects in material or workmanship for a period of one year after substantial completion of the plant, material defects in material or workmanship may still occur. Such defects could delay the commencement of operations of the plant, or, if such defects are discovered after operations have commenced, could cause us to halt or discontinue the plant’s operation. Halting or discontinuing plant operations could delay our ability to generate revenues and reduce the value of your units.

The plant site may have unknown environmental problems that could be expensive and time consuming to correct, which may delay or halt plant construction and delay our ability to generate revenue.

     Our board of directors has purchased three options for adjacent parcels of real estate totaling approximately 80 acres in Ford County near Gibson City, Illinois as the primary site for the construction of our proposed ethanol plant. We have also secured an option for an alternative site in Champaign County, Illinois. Our board of directors reserves the right to select the location of the plant site, in their sole discretion, for any reason. In exercising their exclusive right to select the location, our board of directors will act in the best interests of the company and exercise independent judgment. There can be no assurance that we will not encounter hazardous environmental conditions at either of these sites that may delay the construction of the plant. We do not anticipate Fagen, Inc. to be responsible for any hazardous environmental conditions encountered at the plant site. Upon encountering a hazardous environmental condition, Fagen, Inc. may suspend work in the affected area. If we receive notice of a hazardous environmental condition, we may be required to correct the condition prior to continuing construction. The presence of a hazardous environmental condition will likely delay construction of the plant and may require significant expenditure of our resources to correct the condition. In addition, Fagen, Inc. will be entitled to an adjustment in price and time of performance if it has been adversely affected by the hazardous environmental condition. If we encounter any hazardous environmental conditions during construction that require time or money to correct, such event could delay our ability to generate revenues and reduce the value of your units. A hazardous environmental condition could be so expensive to correct or severe as to require us to change the location of the plant or discontinue construction altogether.

The proposed plant site is located seven miles from our anticipated source of natural gas, which may cause an increase in construction costs.

     We intend to tap into Natural Gas Pipeline Company of America’s (NGP) pipeline, which is seven miles away from our proposed site. We have included the cost to access this natural gas source in our projected cost of construction. The budgeted amount of $3.1 million was provided to us by NGP and is an estimated cost to reach the center of the proposed site in Ford County, Illinois, near Gibson City. This estimate also includes the costs of easements along the way. If circumstances arise in which it is only feasible to connect to the pipeline at a more distant part of the site, then the $3.1 million cost that we have budgeted for may not be sufficient. If the cost to access NGP’s pipeline is significantly higher, this will increase the total cost of construction and reduce profitability. We do not anticipate that the alternative location, in Champaign County, Illinois, will vary materially from the $3.1 million we have budgeted for access to NGP’s pipeline at the Ford County site.

The expansion of domestic ethanol production in combination with state bans on methyl tertiarly butyl ether (MTBE) and/or state renewable fuels standards may place strains on rail and terminal infrastructure such that our ethanol cannot be marketed and shipped to the blending terminals that would otherwise provide us the best cost advantages.

     If the volume of ethanol shipments continues to increase and blenders switch from MTBE to ethanol, there may be weaknesses in infrastructure such that our ethanol cannot reach its target markets. Many terminals may need to make infrastructure changes to blend ethanol instead of MTBE. If the blending terminals do not have sufficient capacity or the necessary infrastructure to make this switch, there may be an oversupply of ethanol on the market, which could depress ethanol prices and negatively impact our financial performance. In addition, rail infrastructure

may be inadequate to meet the expanding volume of ethanol shipments, which could prevent us from shipping our ethanol to our target markets.

Changes in the prices of corn and natural gas can be volatile and these changes will significantly impact our financial performance and the value of your investment.

     Our results of operations and financial condition will be significantly affected by the cost and supply of corn and natural gas. Changes in the price and supply of corn and natural gas are subject to and determined by market forces over which we have no control. Generally, higher corn and natural gas prices will produce lower profit margins. This is especially true if market conditions do not allow us to pass through increased corn and natural gas costs to our customers. There is no assurance that we will be able to pass through such higher prices. If we experience a sustained period of high corn and/or natural gas prices, such pricing may reduce our ability to generate revenues and our profit margins may significantly decrease or be eliminated and you may lose some or all of your investment.

     Ethanol production at our ethanol plant will require significant amounts of corn. In addition, other new ethanol plants may be developed in the state of Illinois. If these plants are successfully developed and constructed, we expect to compete with them for corn origination. Competition for corn origination may increase our cost of corn and harm our financial performance and the value of your investment.

     We intend to use natural gas as the power source for our ethanol plant. Natural gas costs represent approximately 15-20% of our total cost of production. Natural gas prices are volatile and may lead to higher operating costs, which would lower the value of your investment. In late August and early September 2005, Hurricane Katrina and Hurricane Rita caused dramatic damage to areas of Louisiana and Texas, which are the location of two of the largest natural gas hubs in the United States. The damage became apparent and natural gas prices substantially increased. At this time it is unknown how this damage will affect intermediate and long-term prices of natural gas. Future hurricanes could create additional uncertainty and volatility. We expect natural gas prices to remain high or increase given the unpredictable market situation.

Declines in the prices of ethanol and its by-products will have a significant negative impact on our financial performance and the value of your investment.

     Our revenues will be greatly affected by the price at which we can sell our ethanol and its by-products, i.e., distillers grains. These prices can be volatile as a result of a number of factors. These factors include the overall supply and demand, the price of gasoline, level of government support, and the availability and price of competing products. For instance, the price of ethanol tends to increase as the price of gasoline increases, and the price of ethanol tends to decrease as the price of gasoline decreases. Any lowering of gasoline prices will likely also lead to lower prices for ethanol, which may decrease our ethanol sales and reduce revenues, causing a reduction in the value of your investment.

     The price of ethanol has recently been much higher than its 10-year average. We do not expect these prices to be sustainable, as supply from new and existing ethanol plants increases to meet increased demand. The total production of ethanol is at an all-time high and continues to rapidly expand at this time. Increased production of ethanol may lead to lower prices. Any decrease in the price at which we can sell our ethanol will negatively impact our future revenues and could cause the value of your investment to decline.

     We believe that ethanol production is expanding rapidly at this time. Increased production of ethanol may lead to lower prices and other adverse effects. For example, the increased ethanol production could lead to increased supplies of by-products from the production of ethanol, such as distillers grains. Those increased supplies could outpace demand, which would lead to lower prices for those by-products. In addition, distillers grains competes with other protein based animal feed products. The price of distillers grains may decrease when the price of competing feed products decreases. The price of competing animal feed products is based in part on the price of the commodity from which it is derived. Downward pressure on commodity prices, such as soybeans, will generally cause the price of competing animal feed products to decline, resulting in downward pressure on the price of distillers grains. Any decrease in the prices at which we can sell our distillers grains will negatively affect our revenues and could cause the value of your investment to decline.

We have no current plan to sell the raw carbon dioxide we produce to a third party processor resulting in the loss of a potential source of revenue.

     At this time, we have no agreement to sell the raw carbon dioxide we produce. We intend to explore selling our raw carbon dioxide to a third party processor who may build a processing facility next to our ethanol plant. We cannot provide any assurances that we will sell our raw carbon dioxide at any time in the future. If we do not enter into an agreement to sell our raw carbon dioxide, we will have to emit it into the air. This will result in the loss of a potential source of revenue.

Our ability to successfully operate is dependent on the availability of energy at anticipated prices.

     Adequate energy is critical to plant operations. We have not yet entered into any definitive agreements to obtain energy resources and we may have to pay more than we expect to access efficient energy resources. As a result, our ability to make a profit may decline.

Our ability to successfully operate is dependent on the availability of water at anticipated prices.

     To produce ethanol, we will need a significant supply of water. We have not yet entered into any definitive agreements to obtain water resources and we may have to pay more than we expect to access efficient water resources. Water supply and water quality are important requirements to operate the ethanol plant. If we are unable to obtain a sufficient supply of water to sustain the ethanol plant in the future, our ability to make a profit may decline.

We will depend on others for sales of our products, which may place us at a competitive disadvantage and reduce profitability.

     We expect to hire or contract with a third party marketing firm to market all of the ethanol we plan to produce. We currently expect to contract with one or more brokers to market and sell our distillers grains. We expect to sell approximately 10% of our distillers grains locally and the remaining 90% regionally or nationally. As a result, we expect to be dependent on the ethanol broker and any distillers grains broker we engage. There is no assurance that we will be able to enter into contracts with any ethanol broker or distillers grains broker on terms that are favorable to us. If the ethanol or distillers grains broker breaches the contract or does not have the ability, for financial or other reasons to market all of the ethanol or distillers grains we produce, we will not have any readily available means to sell our products. Our lack of a sales force and reliance on third parties to sell and market our products may place us at a competitive disadvantage. Our failure to sell all of our ethanol and distillers dried grains feed products may result in less income from sales, reducing our revenue stream, which could reduce the value of your investment.

Changes and advances in ethanol production technology could require us to incur costs to update our ethanol plant or could otherwise hinder our ability to compete in the ethanol industry or operate profitably.

     Advances and changes in the technology of ethanol production are expected to occur. Such advances and changes may make the ethanol production technology installed in our plant less desirable or obsolete. These advances could also allow our competitors to produce ethanol at a lower cost than us. If we are unable to adopt or incorporate technological advances, our ethanol production methods and processes could be less efficient than our competitors, which could cause our plant to become uncompetitive or completely obsolete. If our competitors develop, obtain or license technology that is superior to ours or that makes our technology obsolete, we may be required to incur significant costs to enhance or acquire new technology so that our ethanol production remains competitive. Alternatively, we may be required to seek third party licenses, which could also result in significant expenditures. We cannot guarantee or assure you that third party licenses will be available or, once obtained, will continue to be available on commercially reasonable terms, if at all. These costs could negatively impact our financial performance by increasing our operating costs and reducing our net income, all of which could reduce the value of your investment.

New plants under construction or decreases in the demand for ethanol may result in excess production capacity in our industry.

     According to the Renewable Fuels Association, the supply of domestically produced ethanol is at an all-time high. In 2004, 81 ethanol plants located in 20 states produced a record 3.41 billion gallons; a 21% increase from 2003 and 109% increase from 2000. At the end of 2005, there were 95 ethanol plants with a combined annual production capacity of more than 4.3 billion gallons and an additional 31 ethanol plants and nine expansions under construction expected to result in an increase of combined annual capacity of more than 1.5 billion gallons. As of October 2006, there were 105 ethanol production facilities operating in 21 states with a combined annual production capacity of more than 5.0 billion gallons, with an additional 44 new plants and seven expansions under construction expected to add an additional 3.2 billion gallons of annual production capacity. Excess capacity in the ethanol industry would have an adverse impact on our results of operations, cash flows and general financial condition. Excess capacity may also result or intensify from increases in production capacity coupled with insufficient demand. If the demand for ethanol does not grow at the same pace as increases in supply, we would expect the price for ethanol to decline. If excess capacity in the ethanol industry occurs, the market price of ethanol may decline to a level that may adversely affect our ability to generate profits and our financial condition.

We operate in a competitive industry and compete with larger, better financed entities which could impact our ability to operate profitably.

     There is significant competition among ethanol producers with numerous producer and privately owned ethanol plants planned and operating throughout the Midwest and elsewhere in the United States. The number of ethanol plants being developed and constructed in the United States continues to increase at a rapid pace. The recent passage of the Energy Policy Act of 2005 included a renewable fuels mandate that we expect will further increase the number of domestic ethanol production facilities. The largest ethanol producers include Abengoa Bioenergy Corp., Archer Daniels Midland (ADM), Aventine Renewable Energy, Inc., Cargill, Inc., New Energy Corp. and VeraSun Energy Corporation, all of which are each capable of producing more ethanol than we expect to produce. ADM recently announced its plan to add approximately 500 million gallons per year of additional ethanol production capacity in the United States. ADM is currently the largest ethanol producer in the United States and controls a significant portion of the ethanol market. ADM’s plan to produce an additional 500 million gallons of ethanol per year will strengthen its position in the ethanol industry and cause a significant increase in domestic ethanol supply. If the demand for ethanol does not grow at the same pace as increases in supply, we expect that lower prices for ethanol will result which may adversely affect our ability to generate profits and our financial condition.

     Our ethanol plant is also expected to compete with producers of other gasoline additives made from raw materials other than corn having similar octane and oxygenate values as ethanol, such as producers of methyl tertiary butyl ether (MTBE). MTBE is a petrochemical derived from methanol which generally costs less to produce than ethanol. Many major oil companies produce MTBE and strongly favor its use because it is petroleum-based. However, MTBE has caused groundwater contamination and many states have enacted MTBE bans. Alternative fuels, gasoline oxygenates and alternative ethanol production methods are also continually under development. The major oil companies have significantly greater resources than we have to market MTBE, to develop alternative products, and to influence legislation and public perception of MTBE and ethanol. These companies also have significant resources to begin production of ethanol should they choose to do so.

Competition from the advancement of alternative fuels may lessen the demand for ethanol and negatively impact our profitability, which could reduce the value of your investment.

     Alternative fuels, gasoline oxygenates and ethanol production methods are continually under development. A number of automotive, industrial and power generation manufacturers are developing more efficient engines, hybrid engines and alternative clean power systems using fuel cells or clean burning gaseous fuels. Vehicle manufacturers are working to develop vehicles that are more fuel efficient and have reduced emissions using conventional gasoline. Vehicle manufacturers have developed and continue to work to improve hybrid technology, which powers vehicles by engines that utilize both electric and conventional gasoline fuel sources. In the future, the emerging fuel cell industry offers a technological option to address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns. Fuel cells have emerged as a potential alternative to certain existing power sources because of their higher efficiency, reduced noise and lower emissions. Fuel cell industry participants are currently targeting the transportation, stationary power and portable power markets in order to decrease fuel costs,

lessen dependence on crude oil and reduce harmful emissions. If the fuel cell and hydrogen industries continue to expand and gain broad acceptance, and hydrogen becomes readily available to consumers for motor vehicle use, we may not be able to compete effectively. This additional competition could reduce the demand for ethanol, which would negatively impact our profitability, causing a reduction in the value of your investment.

Corn-based ethanol may compete with cellulose-based ethanol in the future, which could make it more difficult for us to produce ethanol on a cost-effective basis and could reduce the value of your investment.

     Most ethanol is currently produced from corn and other raw grains, such as milo or sorghum, especially in the Midwest. However, the current trend in ethanol production research is to develop an efficient method of producing ethanol from cellulose-based biomass, such as agricultural waste, forest residue, municipal solid waste, and energy crops. Large companies, such as Iogen Corporation, Abengoa, Royal Dutch Shell Group, Goldman Sachs Group, Dupont and Archer Daniels Midland have all indicated that they are interested in research and development in this area. In addition, Xethanol Corporation has stated plans to convert a six million gallon per year plant in Blairstown, Iowa to implement cellulose-based ethanol technologies after 2007. Furthermore, the Department of Energy and the President have recently announced support for the development of cellulose-based ethanol, including a $160 million Department of Energy program for pilot plants producing cellulose-based ethanol

     This trend is driven by the fact that cellulose-based biomass is generally cheaper than corn, and producing ethanol from cellulose-based biomass would create opportunities to produce ethanol in areas which are unable to grow corn. Additionally, the enzymes used to produce cellulose-based ethanol have recently become less expensive. Although current technology is not sufficiently efficient to be competitive on a large scale, a report by the U.S. Department of Energy entitled “Outlook for Biomass Ethanol Production and Demand” indicates that new conversion technologies may be developed in the future. If an efficient method of collecting cellulose-based biomass for ethanol production and producing ethanol from cellulose-based biomass is developed, we may not be able to compete effectively. It may not be cost-effective to convert the ethanol plant we are proposing into a plant which will use cellulose-based biomass to produce ethanol. If we are unable to produce ethanol as cost-effectively as cellulose-based producers, our ability to generate revenue will be negatively impacted and your investment could lose value.

As domestic ethanol production continues to grow, ethanol supply may exceed demand causing ethanol prices to decline and the value of your investment to be reduced.

     The number of ethanol plants being developed and constructed in the United States continues to increase at a rapid pace. As these plants begin operations, we expect domestic ethanol production to significantly increase. If the demand for ethanol does not grow at the same pace as increases in supply, we would expect the price for ethanol to decline. Declining ethanol prices will result in lower revenues and may reduce or eliminate profits causing the value of your investment to be reduced.

Competition from ethanol imported from Caribbean Basin countries may be a less expensive alternative to our ethanol, which would cause us to lose market share and reduce the value of your investment.

     A portion of the ethanol produced or processed in certain countries in Central America and the Caribbean region is eligible for tariff reduction or elimination upon importation to the United States under a program known as the Caribbean Basin Initiative. Large ethanol producers, such as Cargill, have expressed interest in building dehydration plants in participating Caribbean Basin countries, such as El Salvador, which would convert ethanol into fuel-grade ethanol for shipment to the United States. Ethanol imported from Caribbean Basin countries may be a less expensive alternative to domestically produced ethanol. Competition from ethanol imported from Caribbean Basin countries may affect our ability to sell our ethanol profitably, which would reduce the value of your investment.

Competition from ethanol imported from Brazil may be a less expensive alternative to our ethanol, which would cause us to lose market share and reduce the value of your investment.

     Brazil is currently the world’s largest producer and exporter of ethanol. In Brazil, ethanol is produced primarily from sugarcane, which is also used to produce food-grade sugar. According to the RFA’s Ethanol Industry Outlook 2006, Brazil produced approximately 4.2 billion gallons of ethanol in 2005. Ethanol imported from Brazil may be a less expensive alternative to domestically produced ethanol, which is primarily made from corn. Tariffs presently protecting United States ethanol producers may be reduced or eliminated. Competition from ethanol imported from Brazil may affect our ability to sell our ethanol profitably, which would reduce the value of your investment.

A change in government policies favorable to ethanol may cause demand for ethanol to decline.

     Growth and demand for ethanol may be driven primarily by federal and state government policies, such as state laws banning MTBE and the national renewable fuels standard. The continuation of these policies is uncertain, which means that demand for ethanol may decline if these policies change or are discontinued. A decline in the demand for ethanol is likely to cause lower ethanol prices which in turn will negatively affect our results of operations, financial condition and cash flows.

Loss of or ineligibility for favorable tax benefits for ethanol production could hinder our ability to operate at a profit and reduce the value of your investment in us.

     The ethanol industry and our business are assisted by various federal ethanol tax incentives, including those included in the Energy Policy Act of 2005. The provision of the Energy Policy Act of 2005 likely to have the greatest impact on the ethanol industry is the creation of a 7.5 billion gallon Renewable Fuels Standard (RFS). The RFS will begin at 4 billion gallons in 2006, 4.7 billion gallons in 2007, increasing to 7.5 billion gallons by 2012. The RFS helps support a market for ethanol that might disappear without this incentive. The elimination or reduction of tax incentives to the ethanol industry could reduce the market for ethanol, which could reduce prices and our revenues by making it more costly or difficult for us to produce and sell ethanol. If the federal tax incentives are eliminated or sharply curtailed, we believe that a decreased demand for ethanol will result, which could result in the failure of the business and the potential loss of some or all of your investment.

     Another important provision involves an expansion in the definition of who qualifies as a small ethanol producer. Historically, small ethanol producers were allowed a 10-cents per gallon production income tax credit on up to 15 million gallons of production annually. The size of the plant eligible for the tax credit was limited to 30 million gallons. Under the Energy Policy Act of 2005 the size limitation on the production capacity for small ethanol producers increases from 30 million to 60 million gallons. Because we intend to build a plant with the capacity to annually produce 100-million gallons of ethanol, we do not expect to qualify for this tax credit which could hinder our ability to compete with other plants who will receive the tax credit.

A change in environmental regulations or violations thereof could result in the devaluation of our units and a reduction in the value of your investment.

     We will be subject to extensive air, water and other environmental regulations and we will need to obtain a number of environmental permits to construct and operate the plant. In addition, it is likely that our senior debt financing will be contingent on our ability to obtain the various environmental permits that we will require.

     Before we can begin construction of our plant, we must obtain numerous regulatory approvals and permits. While we anticipate receiving these approvals and permits, there is no assurance that these requirements can be satisfied in a timely manner or at all. If for any reason any of these permits are not granted, construction costs for the plant may increase, or the plant may not be constructed at all.

     Additionally, environmental laws and regulations, both at the federal and state level, are subject to change and changes can be made retroactively. Consequently, even if we have the proper permits at the present time, we may be required to invest or spend considerable resources to comply with future environmental regulations or new or modified interpretations of those regulations, which may reduce our profitability and you may lose some or all of your investment.

There has been no independent valuation of the units, which means that the units may be worth less than the purchase price.

     The per unit purchase price has been determined by us without independent valuation of the units. We established the offering prices based on our estimate of capital and expense requirements, not based on perceived market value, book value, or other established criteria. We did not obtain an independent appraisal opinion on the valuation of the units. The units may have a value significantly less than the offering prices and there is no guarantee that the units will ever obtain a value equal to or greater than the offering price.

No public trading market exists for our units and we do not anticipate the creation of such a market, which means that it will be difficult for you to liquidate your investment.

     There is currently no established public trading market for our units and an active trading market will not develop despite this offering. To maintain partnership tax status, you may not trade the units on an established securities market or readily trade the units on a secondary market (or the substantial equivalent thereof). We, therefore, will not apply for listing of the units on any securities exchange or on the NASDAQ Stock Market. As a result, you will not be able to readily sell your units.

Public investors will experience immediate and substantial dilution as a result of this offering.

     Our seed capital investors purchased class A units at a price per unit substantially less per unit for our membership units than the current public offering price for our class B units. Accordingly, if you purchase units in this offering, you will experience immediate and substantial dilution of your investment. Based upon the issuance and sale of the minimum number of units (6,020) at the public offering price of $5,000 per unit, and the anticipated purchase by FEI of 4,980 units in a subsequent private placement at an offering of $5,000 per unit, you will incur immediate dilution of $288.38 in the net tangible book value per unit if you purchase units in this offering. If we sell the midpoint offering of units (9,020) at the public offering of $5,000 per unit, and the anticipated purchase by FEI of 4,980 units in a subsequent private placement at an offering price of $5,000 per unit, you will incur immediate dilution of $230.14 in the net tangible book value per unit if you purchase units in this offering. If we sell the maximum number of units (12,020) at the public offering price of $5,000 per unit, and the anticipated purchase by FEI of 4,980 units in a subsequent private placement at an offering price of $5,000 per unit, you will incur immediate dilution of $191.47 in the net tangible book value per unit if you purchase units in this offering.

We have placed significant restrictions on transferability of the units, limiting an investor’s ability to withdraw his or her investment in us.

     The units are subject to substantial transfer restrictions pursuant to our amended and restated operating agreement and tax and securities laws. This means that you will not be able to easily liquidate your investment and you may have to assume the risks of investments in us for an indefinite period of time. See “SUMMARY OF OUR AMENDED AND RESTATED OPERATING AGREEMENT.”

     To help ensure that a secondary market does not develop, our amended and restated operating agreement prohibits transfers without the approval of our board of directors. The board of directors will not approve transfers unless they fall within “safe harbors” contained in the publicly-traded partnership rules under the tax code, which include, without limitation, the following:

There is no assurance that an investor will receive cash distributions which could result in an investor receiving little or no return on his or her investment.

     Distributions are payable at the sole discretion of our board of directors, subject to the provisions of the Illinois Limited Liability Company Act, our amended and restated operating agreement and the requirements of our creditors. We do not know the amount of cash that we will generate, if any, once we begin operations. Cash distributions are not assured, and we may never be in a position to make distributions. See “DESCRIPTION OF MEMBERSHIP UNITS.” Our board may elect to retain future profits to provide operational financing for the plant, debt retirement and possible plant expansion or the addition of new technology. This means that you may receive little or no return on your investment and be unable to liquidate your investment due to transfer restrictions and lack of a public trading market. This could result in the loss of your entire investment.

These units will be subordinate to company debts and other liabilities, resulting in a greater risk of loss for investors.

     The units are unsecured equity interests and are subordinate in right of payment to all our current and future debt. In the event of our insolvency, liquidation, dissolution or other winding up of our affairs, all of our debts, including winding-up expenses, must be paid in full before any payment is made to the holders of the units. In the event of our bankruptcy, liquidation, or reorganization, all units will be paid ratably with all our other equity holders, and there is no assurance that there would be any remaining funds after the payment of all our debts for any distribution to the holders of the units.

We may decide to build one or more additional ethanol plants which could affect our profitability and result in the loss of a portion or all of your investment.

     In the future, we may explore the possibility of developing and building one or more additional ethanol plants in the United States. If we decide to take advantage of one or more of these opportunities, this may result in our using equity raised in this offering. We might also issue additional equity, which could dilute the units issued in this offering and cause us to incur additional significant debt obligations in order to fund the new construction. Any proposed additional plants may also impose substantial additional demands on the time and attention of our directors. Since we are only in the preliminary stages of considering the possibility of developing and building additional ethanol plants, we do not know the states in which additional plants might be located. If we decide to build one or more additional plants, we may not be successful which could lead to an unrecoverable loss by us and you could lose a portion or all of your investment. Even if we are successful in building additional plants, the profitability of the operations of those additional plants will affect the value of your investment in this offering. In the event we do develop and build additional ethanol plants and those plants are more or less profitable than the plant we plan to build near Gibson City, Illinois, it may have an effect on the value of your investment and you may lose a portion or all of your investment.

You may have limited access to information regarding our business because our amended and restated operating agreement does not require us to deliver an annual report to security holders, we do not expect to be required to furnish proxy statements until a later date, our directors, officers and beneficial owners will not be required to report their ownership of units until a future time, and our obligations to file periodic reports with the Securities and Exchange Commission could be automatically suspended under certain circumstances.

     Except for our duty to deliver audited annual financial statements to our members pursuant to our amended and restated operating agreement, we are not required to deliver an annual report to security holders and currently have no plan to do so. We also will not be required to furnish proxy statements to security holders and our directors, officers and beneficial owners will not be required to report their beneficial ownership of units to the Securities and Exchange Commission pursuant to Section 16 of the Securities Exchange Act of 1934 until we have both 500 or more unit holders and greater than $10 million in assets. This means that your access to information regarding our business will be limited. However, as of effectiveness of our registration statement, we will be required to file periodic reports with the Securities and Exchange Commission which will be immediately available to the public for inspection and copying. These reporting obligations will be automatically suspended under Section 15(d) of the Securities Exchange Act of 1934 if we have less than 300 members. If this occurs, we will no longer be obligated to file periodic reports with the Securities and Exchange Commission and your access to our business information would then be even more restricted.

The presence of members holding 50% or more of the outstanding class A units and 30% or more of the outstanding class B units is required to take action at a meeting of our members.

     In order to take action at a meeting, members holding 50% or more of the outstanding class A units and 30% of the outstanding class B units must be represented at the meeting in person, by proxy or by mail ballot. See “SUMMARY OF OUR AMENDED AND RESTATED OPERATING AGREEMENT.” Assuming a quorum is present, members take action by a vote of the majority of the class A units and a majority of the class B units represented at the meeting and entitled to vote on the matter. The requirement of a quorum protects us from actions being taken when a sufficient number of the members have not considered the matter being voted upon. The requirement of a quorum means that members will not be able to take actions, which may be in our best interests, if we cannot secure the presence in person, by proxy, or by mail ballot of members holding a majority of class A units and a majority of class B units or more of the outstanding units.

After the plant is substantially operational, our amended and restated operating agreement provides for our class A directors to serve indefinitely and for staggered terms for our class B directors.

     Our initial board of directors consists of ten class A directors appointed by the class A members. Each class A member will be entitled to appoint two class A directors. Our class A directors will serve indefinitely at the pleasure of the class A member appointing him or her or until a successor is appointed or until the earlier death, resignation or removal of such class A director. At the first annual or special meeting of the members following substantial completion of the ethanol plant our class B members will elect class B directors for staggered three-year terms. The number of class B directors will be fixed at a number that is one less than the number of class A directors from time to time. Because class A directors serve indefinitely, it will be impossible for the class B members to replace the class A directors. Your only recourse to replace the class A directors would be through an amendment to our amended and restated operating agreement. Any amendment to the amended and restated operating agreement to replace the class A directors would have to be approved by all of the class A members and a majority of the class B directors. In addition, because our class B directors will serve on the board for staggered terms, it will be difficult for our class B members to replace our class B directors.

EACH PROSPECTIVE MEMBER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR CONCERNING THE IMPACT THAT HIS OR HER PARTICIPATION IN ONE EARTH ENERGY MAY HAVE ON HIS OR HER FEDERAL INCOME TAX LIABILITY AND THE APPLICATION OF STATE AND LOCAL INCOME AND OTHER TAX LAWS TO HIS OR HER PARTICIPATION IN THIS OFFERING.

IRS classification of One Earth Energy as a corporation rather than as a partnership would result in higher taxation and reduced profits, which could reduce the value of your investment in us.

     We are an Illinois limited liability company that has elected to be taxed as a partnership for federal and state income tax purposes, with income, gain, loss, deduction and credit passed through to the holders of the units. However, if for any reason the IRS would successfully determine that we should be taxed as a corporation rather than as a partnership, we would be taxed on our net income at rates of up to 35% for federal income tax purposes, and all items of our income, gain, loss, deduction and credit would be reflected only on our tax returns and would not be passed through to the holders of the units. If we were to be taxed as a corporation for any reason, distributions we make to investors will be treated as ordinary dividend income to the extent of our earnings and profits, and the payment of dividends would not be deductible by us, thus resulting in double taxation of our earnings and profits. See “FEDERAL INCOME TAX CONSEQUENCES OF OWNING OUR UNITS- Partnership Status.” If we pay taxes as a corporation, we will have less cash to distribute as a distribution to our unit holders.

The IRS may classify your investment as passive activity income, resulting in your inability to deduct losses associated with your investment.

     If you are not involved in our operations on a regular, continuing and substantial basis, it is likely that the Internal Revenue Service (IRS) will classify your interest in us as a passive activity. If an investor is either an

individual or a closely held corporation, and if the investor’s interest is deemed to be “passive activity,” then the investor’s allocated share of any loss we incur will be deductible only against income or gains the investor has earned from other passive activities. Passive activity losses that are disallowed in any taxable year are suspended and may be carried forward and used as an offset against passive activity income in future years. These rules could restrict an investor’s ability to currently deduct any of our losses that are passed through to such investor.

Income allocations assigned to an investor’s units may result in taxable income in excess of cash distributions, which means you may have to pay income tax on your investment with personal funds.

     Investors will pay tax on their allocated shares of our taxable income. An investor may receive allocations of taxable income that result in a tax liability that is in excess of any cash distributions we may make to the investor. Among other things, this result might occur due to accounting methodology, lending covenants that restrict our ability to pay cash distributions, or our decision to retain the cash generated by the business to fund our operating activities and obligations. Accordingly, investors may be required to pay some or all of the income tax on their allocated shares of our taxable income with personal funds.

An IRS audit could result in adjustments to One Earth Energy’s allocations of income, gain, loss and deduction causing additional tax liability to our members.

     The IRS may audit the income tax returns of One Earth Energy and may challenge positions taken for tax purposes and allocations of income, gain, loss and deduction to investors. If the IRS were successful in challenging One Earth Energy’s allocations in a manner that reduces losses or increases income allocable to investors, you may have additional tax liabilities. In addition, such an audit could lead to separate audits of an investor’s tax returns, especially if adjustments are required, which could result in adjustments on your tax returns. Any of these events could result in additional tax liabilities, penalties and interest to you, and the cost of filing amended tax returns.

Our directors and officers have other business and management responsibilities which may cause conflicts of interest in the allocation of their time and services to our project.

     Since our project is currently managed by the board of directors rather than a professional management group, the devotion of the directors’ time to the project is critical. However, our directors and officers have other management responsibilities and business interests apart from our project. Therefore, our directors and officers may experience conflicts of interest in allocating their time and services between us and their other business responsibilities. See “MANAGEMENT OF ONE EARTH ENERGY — Business Experience of Directors and Officers” for a summary of our directors and officers business activities. However, during the period of construction of our ethanol plant, we anticipate that our executive officers will dedicate approximately 15 hours per week on our project and that our directors will dedicate between four hours and 20 hours per week to our project depending upon which committees they serve. In addition, conflicts of interest may arise if the directors and officers, either individually or collectively, hold a substantial percentage of the units because of their position to substantially influence our business and management.

We may have conflicting financial interests with Fagen, Inc. and ICM, Inc., which could cause Fagen, Inc. or ICM, Inc. to put their financial interests ahead of ours.

     Fagen, Inc. and ICM, Inc. and their respective affiliates may have conflicts of interest because Fagen, Inc., ICM, Inc. and their respective employees or agents are involved as owners, creditors and in other capacities with other ethanol plants in the United States. We cannot require Fagen, Inc. or ICM, Inc. to devote their full-time or attention to our activities. As a result, Fagen, Inc. and ICM, Inc. may have, or come to have, a conflict of interest in allocating personnel, materials and other resources to our plant.

Affiliated investors may purchase additional units and influence decisions in their favor.

     We may sell units to affiliated or institutional investors and they may acquire enough units to influence the manner in which we are managed. These investors may influence our business in a manner more beneficial to

themselves than to our other investors. This may reduce the value of your units, impair the liquidity of your units and/or reduce our profitability.

Our agreement with FEI grants certain rights to FEI which are not provided for other investors and which may allow FEI to influence decisions in its favor.

     In accordance with our agreement with FEI we made the following amendments to our operating agreement to provide FEI with: (i) a right of first offer to participate in any future ethanol and/or biodiesel investment entered into by One Earth Energy; (ii) tag-along rights, i.e., the right to participate prorata in any sale of units (whether made in one transaction or a series of related transactions); (iii) customary registration rights; and (iv) preemptive rights with regard to all future offerings of our units, so as to provide FEI with the ability to avoid being diluted (if FEI chooses not to participate in such future offerings, we may offer such units to other investors). These changes will likely benefit FEI, possibly to the detriment of other investors.

     In addition, at any point that FEI is a class B member holding at least 27.89% of our outstanding units, FEI will be entitled to appoint one class B director.

     Our exclusive reliance on our five class A cooperative members to supply corn to our plant could damage our profitability if the cooperatives are unable to provide sufficient corn supply and we have to source the corn.

     We anticipate that one, several or all of our five class A cooperative members may supply part or all of our corn supply once operational. We intend to rely heavily on their ability to produce most of the corn necessary to operate the plant. We have no binding agreements with the cooperatives to supply our corn. If, for any reason, any of the cooperatives are unable to supply sufficient corn supply, we may have to source the corn at higher prices, which would damage our competitive position in the industry and decrease our profitability. If the cooperatives fail to competitively procure our corn, we could experience a material loss and we may not have any readily available means to procure the corn necessary to manufacture ethanol and distillers grains.

     Before making any decision to invest in us, investors should read this entire prospectus, including all of its exhibits, and consult with their own investment, legal, tax and other professional advisors.

     There is no established market for our units. We established the offering price without an independent valuation of the units. We established the offering price based on our estimate of capital and expense requirements, not based on perceived market value, book value, or other established criteria. In considering our capitalization requirements, we determined the minimum and maximum aggregate offering amounts based upon our cost of capital analysis and debt to equity ratios acceptable in the industry. In determining the offering price per unit we considered the additional administrative expense which would likely result from a lower offering price per unit, such as the cost of increased unit trading. We also considered the dilution impact of our recent private placement offering price in determining an appropriate public offering price per unit. The units may have a value significantly less than the offering price and there is no guarantee that the units will ever obtain a value equal to or greater than the offering price.

     An investor purchasing units in this offering will receive units diluted by the prior purchase of units by purchasers during our previous private placement offerings. We have sold class A units to our seed capital investors at prices substantially below the price at which we are currently selling class B units. The presence of these previously sold units will dilute the relative ownership interests of the units sold in this offering because these earlier investors received a relatively greater share of our equity for less consideration than investors are paying for units issued in this offering. Generally, all investors in this offering will notice immediate dilution. We have and will continue to use this previously contributed capital to finance development costs and for initial working capital purposes. We intend to use any remaining balance for the same purposes as those of this offering.

     As of July 31, 2006, we had 855 outstanding class A units, which were sold to our seed capital members for $1,666.67 per class A unit. The units, as of July 31, 2006, had a net tangible book value of $856,236 or $1,001.45 per class A unit. The net tangible book value per unit represents members’ equity less intangible assets which includes deferred offering costs and land options, divided by the number of units outstanding. The following chart sets forth the units issued since our inception through the date of this prospectus:

     The offering price of $5,000 per class B unit substantially exceeds the net tangible book value per unit of our outstanding class A units. Therefore, all current class A unit holders will realize an immediate increase of at least $3,710.17 per unit in the pro forma net tangible book value of their units if the minimum number of units (6,020) is sold at a price of $5,000 per unit and 4,980 units are sold to FEI in a subsequent private placement at a price of $5,000 per unit, an increase of at least $3,768.41 per unit if the midpoint number of units (9,020) is sold at a price of $5,000 per unit and 4,980 are sold to FEI in a subsequent private placement at a price of $5,000 per unit, and an increase of at least $3,807.08 per unit if the maximum number of units (12,020) is sold at a price of $5,000 per unit and 4,980 are sold to FEI in a subsequent private placement at a price of $5,000 per unit. Purchasers of units in this offering will realize an immediate dilution of at least $288.38 per unit in the net tangible book value of their units if the minimum number of units(6,020) is sold at a price of $5,000 per unit and 4,980 units are sold to FEI in a subsequent private placement at a price of $5,000 per unit, a decrease if at least $230.14 per unit if the midpoint number of units (9,020) is sold at a price of $5,000 per unit and 4,980 units are sold to FEI in a subsequent private placement at a price of $5,000 per unit, and a decrease of at least $191.47 per unit if the maximum number of units (12,020) is sold at a price of $5,000 per unit and 4,980 units are sold to FEI in a subsequent private placement at a price of $5,000 per unit.

     The following table illustrates the increase to existing unit holders and the dilution to purchasers in the offering in the net tangible book value per unit assuming the minimum or the maximum number of units is sold. The table does not take into account any other changes in the net tangible book value of our units occurring after July 31, 2006, or future offering expenses related to this offering.

     We may seek additional equity financing in the future, which may cause additional dilution to investors in this offering, and a reduction in their equity interest. FEI has preemptive rights to purchase additional class B units to protect its investment against dilution. If you purchase units in this offering, you will have no preemptive rights on any units to be issued by us in the future in connection with additional equity financing. We could be required to issue warrants to purchase units to a lender in connection with our debt financing. If we sell additional units or warrants to purchase additional units, the sale or exercise price could be higher or lower than the per unit purchase price for this offering. If we sell additional units at a lower price it could lower the value of units could decrease.

     The tables below sets forth as of this prospectus, on an “as-if-converted” basis, the difference between the number of units purchased, and total consideration paid for those units, by existing unit holders, compared to units purchased by new investors in this offering without taking into account any offering expenses.

     We have issued a total of 855 class A units to our seed capital investors at a purchase price of $1,666.67 per class A unit, for total class A unit proceeds of $1,425,000. If the minimum offering of $30,100,000 is attained, we will have total membership proceeds of $56,425,000 following the subsequent sale of units to FEI, less offering expenses from this registered offering. If the midpoint offering of $45,100,000 is attained, we will have total membership proceeds of $71,425,000 following the subsequent sale of units to FEI, less offering expenses from this registered offering. If the maximum offering of $60,100,000 is attained, we will have total membership proceeds of $86,425,000 following the subsequent sale of units to FEI, less offering expenses from this registered offering.

     The following table sets forth our capitalization at July 31, 2006, and our expected capitalization following this offering.

     Our previous private placement was made directly by us without use of an underwriter or placement agent and without payment of commissions or other remuneration. The aggregate sales proceeds, after payment of offering expenses of approximately $530, were applied to our working capital and other development and organizational purposes.

     With respect to the exemption from registration of issuance of securities claimed under Rule 506 and Section 4(2) of the Securities Act, neither we, nor any person acting on our behalf offered or sold the securities by means of any form of general solicitation or advertising. Prior to making any offer or sale, we had reasonable grounds to believe and believed that each prospective investor was capable of evaluating the merits and risks of the investment and were able to bear the economic risk of the investment. Each purchaser represented in writing that the securities were being acquired for investment for such purchaser’s own account, and agreed that the securities would not be sold without registration under the Securities Act or exemption from the Securities Act. Each purchaser agreed that a legend was placed on each certificate evidencing the securities stating the securities have not been registered under the Securities Act and setting forth restrictions on their transferability.

     We have not declared or paid any distributions on the units. We do not expect to generate earnings until the proposed ethanol plant is operational, which is expected to occur approximately 14 to 16 months from ground-breaking. After operation of the proposed ethanol plant begins, it is anticipated, subject to any loan covenants or restrictions with any senior and term lenders, that we will distribute “net cash flow” to our members in proportion to the units that each member holds relative to the total number of units outstanding. “Net cash flow,” means our gross cash proceeds less any portion, as determined by the board of directors in their sole discretion, used to pay or establish reserves for operating expenses, debt payments, capital improvements, replacements and contingencies. However, there can be no assurance that we will ever be able to pay any distributions to the unit holders including you. Additionally, our lenders may further restrict our ability to make distributions during the initial period of the term debt.

     The following table summarizes important selected financial information from our July 31, 2006 unaudited financial statements. You should read this table in conjunction with the financial statements and the notes included elsewhere in this prospectus.

     The following tables set forth various estimates of our sources of funds, depending upon the amount of units sold to investors and based upon various levels of equity that our lenders may require. The information set forth below represents estimates only and actual sources of funds could vary significantly due to a number of factors, including those described in the section entitled “RISK FACTORS” and elsewhere in this prospectus.

     Our board has elected to obtain debt financing instead of raising the entire project cost in equity because it believes the debt financing provides better leverage for the company since the rate of return for investors is anticipated to exceed the rate of interest paid to a lender.

     The gross proceeds from this offering, before deducting offering expenses, will be $30,100,000 if the minimum amount of equity offered is sold, $45,100,000 if the midpoint amount of equity offered is sold, and $60,100,000 if the maximum number of units offered is sold for $5,000 per unit. We estimate the offering expenses to be $480,000. Therefore, we estimate the net proceeds of the offering to be $29,620,000 if the minimum amount of equity is raised, $44,620,000 if the midpoint amount of equity is raised and $59,620,000 if the maximum number of units offered is sold.

     We intend to use the net proceeds of this offering along with the proceeds from an anticipated subsequent private placement with FEI to construct and operate a 100-million gallon per year gas-fired ethanol plant. This plan may be changed completely at the discretion of our board of directors. We must supplement the proceeds from both offerings with debt financing to meet our stated goals. We estimate that the total capital expenditures for the construction of the plant will be approximately $155,500,000. The total project cost is a preliminary estimate primarily based upon the experience of our general contractor, Fagen, Inc., with ethanol plants similar to the plant we intend to construct and operate. However, our letter of intent with Fagen, Inc. provides for an increase in construction costs in certain circumstances, including the use of union labor. In addition, we expect the total project cost will change from time to time as the project progresses. These changes may be significant.

     The following table describes our proposed use of proceeds. The actual use of funds is based upon contingencies, such as the estimated cost of plant construction, the suitability and cost of the proposed site, the regulatory permits required and the cost of debt financing and inventory costs, which are driven by the market. Therefore, the following figures are intended to be estimates only, and the actual use of funds may vary significantly from the descriptions given below depending on contingencies such as those described above. However, we anticipate that any variation in our use of proceeds will occur in the level of proceeds attributable to a particular use (as set forth below) rather than a change from one of the uses set forth below to a use not identified in this prospectus.

     We expect the total funding required for the plant to be $155,500,000 or $1.56 per gallon of annual denatured ethanol production capacity at 100-million gallons per year. Our use of proceeds is measured from our date of inception and we have already incurred some of the related expenditures.

     Plant Construction. The construction of the plant, including the projected construction cost index increases, is by far the single largest anticipated expense at $113,946,775. We expect Fagen, Inc., will design and build the plant using ICM, Inc., technology. We have a letter of intent with Fagen, Inc., but we have not yet signed a binding definitive agreement for plant construction. Our estimated cost of construction of the plant is subject to increase in certain circumstances according to our letter of intent, including the use of union labor. These increases

could be significant. See “Design-Build Team; Letter of Intent with Fagen, Inc.” Neither Fagen, Inc., or ICM, Inc., is an affiliate of ours.

     Land cost and site development. We have budgeted the cost of the land, including site improvements, dirt work, hard surface roads on our site, site utilities and permitting costs to be approximately $10,468,250.

     Rail Infrastructure and Rolling Stock. Depending upon the final site chosen, we anticipate that the cost of rail improvements will be $2,180,000. We anticipate the need to purchase rolling stock at a budgeted cost of $460,000.

     Fire Protection and Water Supply. We anticipate that it will cost $6,495,000 to equip the plant with adequate fire protection and water supply.

     Administration Building, Furnishings, Office and Computer Equipment. We anticipate that it will cost approximately $500,000 to build our administration building on the plant site. We expect to spend an additional $90,000 on our furniture and other office equipment and $175,000 for our computers, software and network.

     Construction insurance costs. We anticipate that it will cost approximately $125,000 for builder’s risk insurance, general liability insurance, workers’ compensation and property insurance. We have not yet determined our actual costs and the costs may exceed our expectations.

     Construction Contingency. We have budgeted approximately $2,228,975 for unanticipated expenditures in connection with the construction of our plant and offset any increases in the cost of construction. We intend to use excess funds for our general working capital or for the investment in or development of one or more additional ethanol plants.

     Capitalized Interest. This consists of the interest we anticipate incurring during the development and construction period of our project. For purposes of estimating capitalized interest and financing costs, we have assumed senior debt financing of approximately $90,000,000. We determined this amount of debt financing based upon an assumed equity amount of $63,955,000 and seed capital proceeds of $1,425,000. If any of these assumptions change, we would need to revise the level of term debt accordingly. Loan interest during construction will be capitalized and is estimated to be $1,500,000, based upon senior debt of $90,000,000 and an estimated interest rate of 8%.

     Financing Costs. We anticipate that we will incur approximately $931,000 for financing costs. Financing costs consist of all costs associated with the procurement of approximately $90,000,000 of debt financing. These costs include bank origination and legal fees, loan processing fees, appraisal and title insurance charges, recording and deed registration tax, our legal and accounting fees associated with the financing and project coordinator fees, if any, associated with securing the financing. Our actual financing costs will vary depending on the amount we borrow.

     Organizational Costs. We anticipate that we will incur approximately $1,400,000 for developmental, organizational, legal, accounting and other costs associated with our organization and operation as an entity, including, but not limited to estimated offering expenses of $480,000.

     Pre-production Period Costs and Inventory. We anticipate that we will incur approximately $14,850,000 of pre-production period costs and inventory expense. These represent costs of beginning production after the plant construction is finished, but before we begin generating income. These costs include $850,000 of pre-production period expenses, $2,450,000 of initial inventories of corn and other ingredients, our initial $5,550,000 of ethanol and dried distillers grain work in process inventories, $750,000 of spare parts for our process equipment and $5,250,000 of working capital.

     This prospectus contains forward-looking statements that involve risks and uncertainties. Actual events or results may differ materially from those indicated in such forward-looking statements. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties, including, but not limited to those risk factors described elsewhere in this prospectus. The following discussion of the financial condition and results of our operations should be read in conjunction with the financial statements and related notes thereto included elsewhere in this prospectus.

     We are an Illinois limited liability company. We were formed as an Illinois limited liability company on November 28, 2005, for the purpose of constructing and operating a plant to produce ethanol and distillers grains in Ford County, Illinois near Gibson City. This plan may be changed completely at the discretion of our board of directors. We do not expect to generate any revenue until the plant is completely constructed and operational.

     We have secured three options for adjacent parcels of real estate the purchase of approximately 80 acres in Ford County, Illinois near Gibson City as the primary site for the construction of our ethanol plant. In addition, we have purchased a fourth option in Champaign County, Illinois as an alternate site. For more information about our potential plant site, please refer to “DESCRIPTION OF BUSINESS — Project Location and Proximity to Markets.” Our board of directors reserves the right to choose the location of the final plant site, in their sole discretion. In exercising their exclusive right to select the location, our board of directors will act in the best interests of the company and will exercise independent judgment. We anticipate the final plant site will have access to both truck and rail transportation.

     Currently, our principal place of business is located at 1306 West 8^th Street, Gibson City, Illinois 60936. During the period of construction of our ethanol plant, Alliance Grain Co. has agreed to provide this office space to us at no cost. We have no written agreement for the use of this office space. The potential cost for rental of this space is not significant.

     Based upon engineering specifications produced by Fagen, Inc., the plant will annually consume approximately 36 million bushels of corn and annually produce approximately 100-million gallons of fuel grade ethanol and 321,000 tons of distillers grains for animal feed. We currently estimate that it will take 14 to 16 months from ground-breaking to complete the construction of the plant.

     We expect the project will cost approximately $155,500,000 to complete. This includes approximately $105,997,000 to build the plant, subject to construction cost index increases provided for in our non-binding letter of intent with Fagen, Inc., which we have budgeted in the amount of $7,949,775 and an additional $41,553,225 in other capital expenditures and working capital. As a result, our anticipated total project cost is not a firm estimate and may change from time to time as the project progresses. These changes may be significant. We have budgeted $7,949,775 in construction cost index increases to help offset any increases in our costs of construction. However, it is unknown whether this allowance will be sufficient to offset any increased cost. In addition, the $105,997,000 construction price contained in the letter of intent assumes the use of non-union labor. In the event Fagen is required to employ union labor or compensate labor at prevailing wages, the construction price will be adjusted upwards to include any increased costs associated with such union labor or prevailing wages. We have not included any additional amount in our budget for the use of union labor. We have also entered into a phase I and phase II engineering services agreement with Fagen Engineering, LLC for the performance of certain engineering and design work in exchange for a fixed fee, which will be credited against the total design build costs of our project. See “DESCRIPTION OF BUSINESS – Design-Build Team” for detailed information about our letter of intent with Fagen, Inc. and our phase I and phase II engineering services agreement with Fagen Engineering, LLC. Except for the non-binding letter of intent with Fagen, Inc. and the phase I and phase II engineering services agreement with Fagen Engineering, LLC, we do not have any binding or non-binding agreements with any contractor for the labor or materials necessary to build the plant.

     We are still in the development phase, and until the proposed ethanol plant is operational, we will generate no revenue. We anticipate that accumulated losses will continue to increase until the ethanol plant is operational.

We may decide to build one or more additional ethanol plants which could affect our profitability and result in the loss of a portion or all of your investment.

     In the future, we may explore the possibility of developing and building one or more additional ethanol plants in the United States. If we decide to take advantage of one or more of these opportunities, this may result in our using equity raised in this offering. We might also issue additional equity, which could dilute the units issued in this offering and cause us to incur additional significant debt obligations in order to fund the new construction. Any proposed additional plants may also impose substantial additional demands on the time and attention of our directors. Since we are only in the preliminary stages of considering the possibility of developing and building additional ethanol plants, we do not know the states in which additional plants might be located. If we decide to build one or more additional plants, we may not be successful which could lead to an unrecoverable loss by us and you could lose a portion or all of your investment. Even if we are successful in building additional plants, the profitability of the operations of those additional plants will affect the value of your investment in this offering. In the event we do develop and build additional ethanol plants and those plants are more or less profitable than the plant we plan to build near Gibson City, Illinois, it may have an effect on the value of your investment and you may lose a portion or all of your investment.

     We expect to spend at least the next 12 months focused on three primary activities: (1) project capitalization; (2) site acquisition and development; and (3) plant construction and start-up operations. Assuming the successful completion of this offering and the related debt financing, we expect to have sufficient cash on hand to cover all costs associated with construction of the project, including, but not limited to, site acquisition and development, utilities, construction and equipment acquisition. In addition, we expect our seed capital proceeds to supply us with enough cash to cover our costs through this period, including staffing, office costs, audit fees, legal fees, compliance and staff training. We estimate that we will need approximately $155,500,000 to complete the project.

     We raised $1,425,000 in our previous private placement to our seed capital investors and we anticipate receiving grant proceeds equal to $120,000. We will not close our current offering until we have raised the minimum offering amount of $30,100,000. We have until [one year date] to sell the minimum number of units required to raise the minimum offering amount. If we sell the minimum number of units prior to [one year date], we may decide to continue selling units until we sell the maximum number of units or [one year date], whichever occurs first. Even if we successfully close the offering by selling at least the minimum number of units by [one year date], we will not release the offering proceeds from escrow until the cash proceeds in escrow equal $30,100,000 or more and we secure a written debt financing commitment for debt financing ranging from a minimum of $68,955,000 to a maximum of $98,955,000 depending on the level of equity raised in this offering and the amounts of any grants, bond financing and/or other incentives we may be awarded. A debt financing commitment only obligates the lender to lend us the debt financing that we need if we satisfy all the conditions of the commitment. These conditions may include, among others, the total cost of the project being within a specified amount, the receipt of engineering and construction contracts acceptable to the lender, evidence of the issuance of all permits, acceptable insurance coverage and title commitment, the contribution of a specified amount of equity and attorney opinions. At this time, we do not know what business and financial conditions will be imposed on us. We may not satisfy the loan commitment conditions before closing, or at all. If this occurs we may:

     While the foregoing alternatives may be available, we do not expect to begin substantial plant construction activity before satisfying the loan commitment conditions or closing the loan transaction because it is very likely that Fagen, Inc. will begin construction under these circumstances, and it is very unlikely that any lending institution will prohibit substantial plant construction activity until satisfaction of loan commitment conditions or loan closing.

We expect that proceeding with plant construction prior to satisfaction of the loan commitment conditions or closing the loan transaction could cause us to abandon the project or terminate operations. As a result, you could lose all or part of your investment.

     During and after the offering, we expect to continue work principally on the preliminary design and development of our proposed ethanol plant, choosing our site plant, obtaining the necessary construction permits, identifying potential sources of debt financing and negotiating the corn supply, ethanol and distillers grains marketing, utility and other contracts. This plan may be changed completely at the discretion of our board of directors. We plan to fund these initiatives using the $1,425,000 of equity capital raised in our previous private placement. We believe that our existing funds will permit us to continue our preliminary activities through the end of this offering. If we are unable to close on this offering by that time or otherwise obtain other funds, we may need to discontinue operations.

     We expect to purchase approximately 80 acres of land on which to construct our ethanol plant. We have secured three adjacent options for the construction of our plant in Ford County, Illinois, near Gibson City, where we anticipate building our plant. We have also secured a fourth option for an alternative site in Champaign County, Illinois. We are waiting on approval of our rail design and resolution of water volume issues prior to making a final determination on the location of our plant. Once we have this information, we will make a decision about whether to construct our ethanol plant on our primary or secondary site. We expect to have approval of our rail design within the next 90 days and resolution of our water volume issues within the next 90 to 120 days. We reserve the right, in the sole discretion of our board of directors, to select the location for the plant. In exercising their exclusive right to select the location, our board of directors will act in the best interests of the company and exercise independent judgment.

     We have purchased three options for adjacent parcels of real estate for our proposed primary site in Ford County, Illinois. On February 28, 2006, we executed a real estate option agreement with Edward E. Tucker and Cynthia J. Tucker, granting us an option to purchase approximately 10 acres of land in Ford County, Illinois. Under the terms of the option agreement, we paid $10,000 and have the option to purchase the land for $10,000 per acre. This option expires on February 27, 2007. On April 17, 2006, we executed an option agreement with Lisa Foster granting us the option to purchase approximately 34 acres of land in Ford County, Illinois. Under the terms of the option agreement, we paid $10,000 and have the option to purchase the land for $12,000 per acre if the option is exercised during the first 9 months of the option period and $14,000 per acre if the option is exercised during the final 3 months of the option period. This option expires on April 17, 2007. On April 18, 2006, we executed an option agreement with the City of Gibson, Illinois, granting us an option to purchase approximately 35 acres of property in Ford County, Illinois. Under the terms of the option agreement, we paid $10,000 and have the option to purchase the land for $6,400 per acre. This option expires on April 18, 2007.

     In addition, on March 13, 2006, we executed a real estate option agreement with Don Maxwell granting us an option to purchase 81 acres of land in Champaign County, Illinois to be used as an alternate site. Under the terms of the option agreement, we paid $7,000 for the option and have the option to purchase the land for $18,500 per acre. This option expires on March 13, 2007.

     We expect to complete construction of the proposed plant and commence operations approximately 14 to 16 months from ground-breaking. Our work will include completion of the final design and development of the plant. We also plan to negotiate and execute finalized contracts concerning the construction of the plant, provision of necessary electricity, natural gas and other power sources and marketing agreements for ethanol and distillers grains. Assuming the successful completion of this offering and our obtaining the necessary debt financing, we expect to have sufficient cash on hand to cover construction and related start-up costs necessary to make the plant operational. We estimate that we will need approximately $105,997,000, subject to construction cost index increases, which we have budgeted in the amount of $7,949,775, to construct the plant and approximately $41,553,225 to cover all capital expenditures necessary to complete the project, make the plant operational and produce revenue. In addition, the $105,997,000 construction price contained in the letter of intent with Fagen, Inc.

assumes the use of non-union labor. In the event Fagen, Inc. is required to employ union labor or compensate labor at prevailing wages, the construction price will be adjusted upwards to include any increased costs associated with such labor or wages. We have not included any additional amount in our budget for the use of union labor.

     We are exploring the possibility of developing and building one or more additional ethanol plants in the United States. It is possible that we may take advantage of an opportunity which could result in our using equity raised in this offering for development of other projects, issuing additional equity and incurring additional significant debt obligations. If we decide to build one or more additional plants, we may not be successful. Even if we are successful in building additional plants, the profitability of the operations of those additional plants will affect the value of your investment in this offering. We are in the preliminary stages of considering and identifying these opportunities.

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

     If we are successful in building and constructing the ethanol plant, we expect our revenues will consist primarily of sales of ethanol and distillers grains. We expect ethanol sales to constitute the bulk of our future revenues. Ethanol prices have recently been much higher than their 10-year average. Historically, ethanol prices have been seasonal, increasing in the late summer and fall as gasoline blenders and marketers increase inventory in anticipation of mandatory blending in the winter months, and decreasing in the spring and summer when mandatory blending ceases. However, ethanol prices began increasing during the latter part of 2005 and have continued through the first quarter of 2006, despite a significant increase in supply of ethanol resulting from many additional producers in the industry. Increased demand, firm crude oil and gas markets, public acceptance, and positive political signals have all contributed to a strengthening of ethanol prices. In order to sustain these higher price levels however, management believes the industry will need to continue to grow demand to offset the increased supply brought to the market place by additional production. Areas where demand may increase are new markets in New Jersey, Pennsylvania, Massachusetts, North Carolina, South Carolina, Michigan, Tennessee, Louisiana and Texas. According to the Renewable Fuels Association, Minnesota may also generate additional demand due to the recent passage of state legislation mandating a 20% ethanol blend in its gasoline. Montana passed a similar mandate this year, but it will not go into effect until 60 million gallons of ethanol are produced in the state. See “INDUSTRY OVERVIEW – General Ethanol Demand and Supply.”

     We also expect to benefit from federal and ethanol supports and tax incentives. Changes to these supports or incentives could significantly impact demand for ethanol. The most recent ethanol supports are contained in the Energy Policy Act of 2005. Most notably, the Act creates a 7.5 billion gallon Renewable Fuels Standard (RFS). The RFS requires refiners to use 4 billion gallons of renewable fuels in 2006, 4.7 billion gallons in 2007, increasing to 7.5 billion gallons by 2012. See “INDUSTRY OVERVIEW – Federal Ethanol Supports.”

     On September 7, 2006, the EPA set forth proposed rules to fully implement the RFS program. The RFS for 2007 is 4.7 billion gallons of renewable fuel. Compliance with the RFS program will be shown through the acquisition of unique Renewable Identification Numbers (RINs) assigned by the producer to every batch of renewable fuel produced. The RIN shows that a certain volume of renewable fuel was produced. The RFS must be met by refiners, blenders and importers. Refiners, blenders and importer must acquire sufficient RINs to demonstrate compliance with their performance obligation. In addition, RINs can be traded and a recordkeeping and electronic reporting system for all parties that have RINs ensures the integrity of the RIN pool.

     The RFS system will be enforced through a system of registration, record keeping and reporting requirements for obligated parties, renewable producers (RIN generators), as well as any party that procures or

trades RINs either as part of their renewable purchases or separately. The program will apply in 2007 prospectively from the effective date of the final rule.

     In addition to government supports that encourage production and the use of ethanol, demand for ethanol may increase as a result of increased consumption of E85 fuel. E85 fuel is a blend of 70% to 85% ethanol and gasoline. According to the Energy Information Administration, E85 consumption is projected to increase from a national total of 11 million gallons in 2003 to 47 million gallons in 2025. E85 can be used as an aviation fuel, as reported by the National Corn Growers Association, and as a hydrogen source for fuel cells. According to the National Ethanol Vehicle Coalition, there are currently about 6.0 million flexible fuel vehicles capable of operating on E85 in the United States. Automakers have indicated plans to produce an estimated one million more flexible fuel vehicles per year. In addition, Ford and General Motors have recently begun national campaigns to promote ethanol and flexible fuel vehicles. The American Coalition for Ethanol reports that there are currently approximately 600 retail gasoline stations supplying E85. However, this remains a relatively small percentage of the total number of United States retail gasoline stations, which is approximately 170,000.

     Ethanol production continues to rapidly grow as additional plants and plant expansions become operational. According to the Renewable Fuels Association, as of October 2006, over 105 ethanol plants were producing ethanol with a combined annual production capacity of 5.0 billion gallons per year and current expansions and plants under construction constituted an additional future production capacity of 3.2 billion gallons per year. In 2005, ADM announced its plan to add 500 million gallons of ethanol production, clearly indicating its desire to maintain a significant share of the ethanol market. Since the current national ethanol production capacity exceeds the 2006 RFS requirement, we believe that other market factors, such as the growing trend for reduced usage of methyl tertiary butyl ether (MTBE) by the oil industry, state renewable fuels standards and increases in voluntary blending by terminals, are primarily responsible for current ethanol prices. MTBE is a petrochemical derived from methanol which generally costs less to produce than ethanol. Accordingly, it is possible that the RFS requirements may not significantly impact ethanol prices in the short-term. However, the increased requirement of 7.5 billion by 2012 is expected to support ethanol prices in the long term. A greater supply of ethanol on the market from these additional plants and plant expansions could reduce the price we are able to charge for our ethanol. This may decrease our revenues when we begin sales of product.

     Demand for ethanol has been supported by higher oil prices and its refined components. While the mandated usage required by the renewable fuels standard is driving demand, our management believes that the industry will require an increase in voluntary usage in order to experience long-term growth. We expect this will happen only if the price of ethanol is deemed economical by blenders. Our management also believes that increased consumer awareness of ethanol-blended gasoline will be necessary to motivate blenders to voluntarily increase the amount of ethanol blended into gasoline. In the future, a lack of voluntary usage by blenders in combination with additional supply may damage our ability to generate revenues and maintain positive cash flows.

     We expect our future cost of goods sold will consist primarily of costs relating to the corn and natural gas supplies necessary to produce ethanol and distillers grains for sale.

     The 2005 national corn crop was the second largest on record with national production reported by the USDA at approximately 11.11 billion bushels, exceeded only by the 2004 crop which is the largest ever recorded at approximately 11.8 billion bushels. As a result of the large 2005 corn crop, we expect corn prices to remain at relatively low levels into the 2005-2006 marketing year. However, variables such as planting dates, rainfall, and temperatures will likely cause market uncertainty and create corn price volatility throughout the year. We do not expect corn prices to remain at the current low levels indefinitely. Although we do not expect to begin operations until summer 2008, we expect these same factors will continue to cause continuing volatility in the price of corn, which will significantly impact our cost of goods sold.

     Natural gas is an important input to the ethanol manufacturing process. We estimate that our natural gas usage will be approximately 15-20% of our annual total production cost. We use natural gas to dry our distillers grains products to moisture contents at which they can be stored for longer periods and transported greater distances. Dried distillers grains have a much broader market base, including the western cattle feedlots, and the dairies of

California and Florida. Recently, the price of natural gas has risen along with other energy sources and has only been available at prices exceeding the 10-year historical average. The prices may increase our costs of production when we become operational. Due to the active hurricane season in late 2005 that disrupted up to 29% of the natural gas wells in the Gulf of Mexico, natural gas prices substantially increased and became more volatile. Future hurricanes in the Gulf of Mexico could cause similar or greater uncertainty. Natural gas prices tend to follow crude oil prices, which also reached historic highs during 2005. We expect this trend to continue into 2006. In addition, the price of natural gas has historically fluctuated with seasonal weather changes, often experiencing price spikes during extended cold spells. We look for continued volatility in the natural gas market. Any ongoing increases in the price of natural gas will increase our cost of production and may negatively impact our future profit margins.

     A new technology has recently been introduced, to remove corn oil from concentrated thin stillage (a by-product of “dry milling” ethanol processing facilities) which would be used as an animal feed supplement or possibly as an input for bio-diesel production. Although the recovery of oil from the thin stillage may be economically feasible, it fails to produce the advantages of removing the oil prior to the fermentation process. Various companies are currently working on or have already developed starch separation technologies that economically separate a corn kernel into its main components. The process removes the germ, pericarp and tip of the kernel leaving only the endosperm of kernel for the production of ethanol. This technology has the capability to reduce drying costs and the loading of volatile organic compounds. The separated germ would also be available through this process for other uses such as high oil feeds or bio-diesel production. Each of these new technologies is currently in its early stages of development. We do not presently intend to remove corn oil from concentrated thin stillage. There is no guarantee that either technology will be successful or that we will be able to implement the technology in our ethanol plant at any point in the future.

     We expect to hire approximately 45 full-time employees before commencing plant operations. Our officers are Steve Kelly, President; Scott Docherty, Vice President; and Jack Murray, Secretary/Treasurer. As of the date of this prospectus, we have not hired any employees.

     In February 2006, we sold 855 class A units to our seed capital investors at a price of $1,666.67 per unit for proceeds of $1,425,000. We determined the offering price per class A unit of $1,666.67 for our seed capital units based upon the capitalization requirements necessary to fund our development, organization and financing activities as a development-stage company. We did not rely upon any independent valuation, book value or other valuation criteria in determining the seed capital offering price per unit. We expect the proceeds from our previous private placements to provide us with sufficient liquidity to fund the developmental, organizational and financing activities necessary to advance our project. Specifically, we expect our seed capital proceeds will be sufficient to fund the following activities which we expect to conduct during this offering: identification of and negotiation with potential senior lenders and providers of subordinated debt, bond and tax increment financing, initial construction permitting, identification of and negotiation with potential ethanol and distillers grains marketing firms and project capitalization including equity raising activities. We do not expect that we will be able to begin significant site development and plant construction activity until we receive proceeds from this offering.

     All of the seed capital proceeds were immediately at-risk at the time of investment. We increased the public offering price per unit and created a new class of units based upon the differences in risk and the development stage of our project at the time of investment.

     As of July 31, 2006, we had total assets of $1,193,616 consisting primarily of cash and cash equivalents. As of July 31, 2006, we had current liabilities of $117,092 consisting primarily of our accounts payable. Since our inception through July 31, 2006, we have an accumulated deficit of $347,946. Total liabilities and members’ equity

as of July 31, 2006, was $1,193,616. Since our inception, we have generated no revenue from operations. From our inception to July 31, 2006, we have a net loss of $347,946, primarily due to start-up business costs.

     Based on our business plan and current construction cost estimates, we believe the total project will cost approximately $155,500,000. Our capitalization plan consists of a combination of equity, including equity capital raised in our previous private placements, debt, government grants and tax increment financing.

     We raised $1,425,000 in our previous private placement offering and have anticipated grant proceeds of $120,000. In addition, we are seeking to raise a minimum of $30,100,000 and a maximum of $60,100,000 of equity in this offering. We also plan to obtain proceeds equal to $24,900,000 in a subsequent private placement with FEI. Including the $1,425,000 we raised in our seed capital offering and our anticipated grant proceeds of $120,000 and depending on the level of equity raised in this offering, the equity proceeds from FEI and the amount of grants and other incentives awarded to us, we expect to require debt financing ranging from a minimum of $68,955,000 to a maximum of $98,955,000.

     We plan to obtain a significant amount of our equity financing from a single institutional investor in a subsequent private placement. On May 26, 2006, we entered into an agreement and a guaranty with FEI, whereby FEI agreed to purchase 4,980 restricted class B units in a private placement for a total purchase price of $24,900,000. Pursuant to the terms of our agreement, FEI is obligated to purchase 4,980 of our class B units in a subsequent private placement if we meet the following conditions prior to June 30, 2007: (i) we have at least $30,100,000 of cash proceeds from this registered offering (including amounts in escrow but excluding proceeds from FEI’s subscription), resulting from the sale of units to parties other than FEI; (ii) we have entered into a binding loan financing commitment in an amount which will be sufficient when combined with net offering proceeds to complete construction of the ethanol plant; (iii) we are in compliance with all covenants and are in good standing under a binding loan financing commitment; and (iv) all other conditions are met, including certain amendments to our operating agreement and approval by FEI’s board of directors. Prior to filing this registration statement, we amended our operating agreement in accordance with the terms of our agreement with FEI and we received approval from FEI’s board of directors. If the maximum number of units is sold in this offering, FEI will have an equity interest in the company of at least 27.89% following its purchase of units in a subsequent private placement. If the minimum number of units is sold in this offering, FEI’s equity interest will be at least 42% following its purchase of units in a subsequent private placement. FEI’s guaranty to purchase the units will expire on the earlier of: (i) June 30, 2007; (ii) the closing of the transactions contemplated by our agreement with FEI; or (iii) the termination of the agreement.

     Our agreement with FEI required us to make the following amendments to our operating agreement to provide FEI with: (i) a right of first offer to participate in any future ethanol and/or biodiesel investment in which we enter into; (ii) tag-along rights, i.e., the right to participate prorata in any sale of units (whether made in one transaction or a series of related transactions); (iii) customary registration rights; and (iv) preemptive rights with regard to all future offerings of our units, so as to provide FEI with the ability to avoid being diluted (if FEI chooses not to participate in such future offerings, we may offer such units to other investors).

     We hope to attract the senior bank loan from a major bank, with participating loans from other banks, to construct the proposed ethanol plant. We expect the senior loan will be a construction loan secured by all of our real property, including receivables and inventories. We plan to pay near prime rate on this loan, plus annual fees for maintenance and observation of the loan by the lender, however, there is no assurance that we will be able to obtain debt financing or that adequate debt financing will be available on the terms we currently anticipate. If we are unable to obtain senior debt in an amount necessary to fully capitalize the project, we may have to seek subordinated debt financing which could require us to issue warrants. The issuance of warrants could reduce the value of our units.

     We do not have contracts or commitments with any bank, lender, underwriter, governmental entity or financial institution for debt financing. We have started identifying and interviewing potential lenders, however, we have not signed any commitment or contract for debt financing. Completion of the project relies entirely on our ability to attract these loans and close on this offering.

     On January 19, 2006, we entered into an agreement with PlanScape Partners to serve as a consultant in researching and applying for local and state financial incentives for our project. Under the terms of the agreement, we will pay PlanScape Partners an hourly rate for their services. The agreement projects a fee between $20,500 and $25,500 for PlanScape Partners’ services. In addition, on January 19, 2006, we entered into an agreement with PlanScape Partners to prepare our application for the USDA’s Rural Business Co-operative Service Value Added Producer Grant. The agreement projects a fee between $5,500 and $7,000 for this grant application.

     Illinois Incentives. We may qualify for various incentive programs administered by the Illinois Department of Commerce and Economic Development, such as a Renewable Fuels Development Program Grant. Grants under the Renewable Fuels Development Program are available for the construction of new biofuels production facilities in Illinois. In order to be eligible for the program, the biofuels production facility must produce at least 30 million gallons of biofuels per year. The maximum grant award under the program is $6.5 million, including up to $1.5 million in rural economic development incentives. However, the total grant award cannot exceed 10% of the total construction costs of the facility. We have not yet applied for or received firm commitments or approvals for this grant and we have no assurance that these funds will be available to us.

     Illinois Grant. We received $20,000 from the Illinois Corn Marketing Board.

     USDA Grants. PlanScape Partners submitted an application for a USDA Rural Business Co-operative Service Value Added Producer Grant in the amount of $100,000, which is to be used for start-up costs.

     We plan to apply for additional grants from the USDA and other sources. Although we may apply under several programs simultaneously and may be awarded grants or other benefits from more than one program, it must be noted that some combinations of programs are mutually exclusive. Under some state and federal programs, awards are not made to applicants in cases where construction on the project has started prior to the award date. There is no guarantee that applications will result in awards of grants or loans.

     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. Significant estimates include the deferral of expenditures for offering costs, which are dependent upon successful financing of the project. We defer the costs incurred to raise equity financing until that financing occurs. At the time we issue new equity, we will net these costs against the equity proceeds received. Alternatively, if the equity financing does not occur, we will expense the offering costs. It is at least reasonably possible that this estimate may change in the near term.

     We do not have any off-balance sheet arrangements.

     Ethanol is ethyl alcohol, a fuel component made primarily from corn and various other grains, and can be used as: (i) an octane enhancer in fuels; (ii) an oxygenated fuel additive for the purpose of reducing ozone and carbon monoxide vehicle emissions; and (iii) a non-petroleum-based gasoline substitute. According to the Energy Information Administration, a section of the U.S. Department of Energy, approximately 95% of all ethanol is used in its primary form for blending with unleaded gasoline and other fuel products. The implementation of the Federal

Clean Air act has made ethanol fuels an important domestic renewable fuel additive. Used as a fuel oxygenate, ethanol provides a means to control carbon monoxide emissions in large metropolitan areas (“Air Quality and Ethanol in Gasoline” by Gary Z. Whitten, Ph.D., available at www.ethanolrfa.org). The principal purchasers of ethanol are generally the wholesale gasoline marketer or blender. Oxygenated gasoline is commonly referred to as reformulated gasoline.

     According to the Renewable Fuels Association (RFA), over the past twenty years the United States fuel ethanol industry has grown from almost nothing to an estimated current annual production capacity of 5.0 billion gallons of ethanol production per year. As of October 2006, plans to construct new ethanol plants or expand existing plants have been announced which would increase capacity by approximately 3.2 billion gallons per year. There are currently over 105 ethanol production facilities producing ethanol throughout the United States. Most of these facilities are based in the Midwest because of the nearby access to the corn and grain feedstock necessary to produce ethanol.

Demand for Ethanol

     According to the RFA, the annual demand for fuel ethanol in the United States reached a new high in 2005 of 3.57 billion gallons per year. In its report titled, “Ethanol Industry Outlook 2006,” the Renewable Fuels Association anticipates demand for ethanol to remain strong as a result of the national renewable fuels standard contained in the Energy Policy Act of 2005, rising gasoline and oil prices and increased state legislation banning the use of MTBE or requiring the use of renewable fuels. The RFA also notes that interest in E85, a blend of 85% ethanol and 15% gasoline, has been invigorated due to continued efforts to stretch U.S. gasoline supplies (“From Niche to Nation, Ethanol Industry Outlook 2006,” available at www.ethanolrfa.org/resource/outlook/). The RFA also expects that the passage of the Volumetric Ethanol Excise Tax Credit (VEETC) in 2004 will provide the flexibility necessary to expand ethanol blending into higher blends of ethanol such as E85, E diesel and fuel cell markets.

     The RFS (Renewable Fuel Standard) will begin at 4 billion gallons in 2006, 4.7 billion gallons in 2007, increasing to 7.5 billion gallons by 2012. 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. According to the RFA, the bill is expected to lead to about $6 billion in new investment in ethanol plants across the country. An increase in the number of new plants will bring an increase in the supply of ethanol. Thus, while this bill may cause ethanol prices to increase in the short term due to additional demand, future supply could outweigh the demand for ethanol. This would have a negative impact on our earnings. Alternatively, since the RFS begins at 4 billion gallons in 2006 and national production is expected to exceed this amount, there could be a short-term oversupply until the RFS requirements exceed national production. This would have an immediate adverse effect on our earnings.

     The following chart illustrates the RFS program adopted by the Energy Policy Act of 2005.

ETHANOL PRODUCTION

          Source: American Coalition for Ethanol (ACE)

     On September 7, 2006, the EPA set forth proposed rules to fully implement the RFS program. The RFS for 2007 is 4.7 billion gallons of renewable fuel. Compliance with the RFS program will be shown through the acquisition of unique Renewable Identification Numbers (RINs) assigned by the producer to every batch of renewable fuel produced. The RIN shows that a certain volume of renewable fuel was produced. Obligated parties must acquire sufficient RINs to demonstrate compliance with their performance obligation. In addition, RINs can be traded and a recordkeeping and electronic reporting system for all parties that have RINs ensures the integrity of the RIN pool.

     The RFS system will be enforced through a system of registration, record keeping and reporting requirements for obligated parties, renewable producers (RIN generators), as well as any party that procures or trades RINs either as part of their renewable purchases or separately. The program will apply in 2007 prospectively from the effective date of the final rule.

     While we believe that the nationally mandated usage of renewable fuels is currently driving demand, management believes that an increase in voluntary usage will be necessary for the industry to continue its growth trend. Our management expects that voluntary usage by blenders will occur only if the price of ethanol makes increased blending economical. In addition, we believe that heightened consumer awareness and consumer demand for ethanol-blended gasoline may play an important role in growing overall ethanol demand and voluntary usage by blenders. If blenders do not voluntarily increase the amount of ethanol blended into gasoline and consumer awareness does not increase, it is possible that additional ethanol supply will outpace demand and depress ethanol prices.

     According to the Renewable Fuels Association (RFA), the supply of domestically produced ethanol is at an all-time high. In 2005, 95 ethanol plants located in 19 states annually produced a record 4 billion gallons according to the RFA’s website; an approximately 17% increase from 2004 and nearly 1.5 times the ethanol produced in 2000. As of October 2006, there were 105 ethanol production facilities operating in 21 states with a combined annual production capacity of more than 5.0 billion gallons, with an additional 44 new plants and seven expansions under construction expected to add an additional estimated 3.2 billion gallons of annual production capacity.

     Illinois has the second largest ethanol production capacity in the country, based on the latest production figures from the Renewable Fuels Association and the Nebraska Energy Office. As of October 2006, Illinois has the capacity to produce 1,236 million gallons of ethanol, which is approximately 15.7% of the nation’s capacity of 7.8 billion gallons. Iowa has the largest production capacity (approximately 1,838 million gallons or 22.1% of the nation’s total), and Georgia has the smallest production capacity (0.4 million gallons).

Sources: Renewable Fuels Association, http://www.ethanolrfa.org/industry/locations/ (last updated: October 5, 2006); Ethanol Producer Magazine, http://www.ethanolproducer.com/plant-list.jsp?country=USA.

     Ethanol supply is also affected by ethanol produced or processed in certain countries in Central America and the Caribbean region. Ethanol produced in these countries is eligible for tariff reduction or elimination upon importation to the United States under a program known as the Caribbean Basin Initiative (CBI). Large ethanol producers, such as Cargill, have expressed interest in building dehydration plants in participating Caribbean Basin countries, such as El Salvador, which would convert ethanol into fuel-grade ethanol for shipment to the United States. Ethanol imported from Caribbean Basin countries may be a less expensive alternative to domestically produced ethanol. The International Trade Commission announced the 2006 CBI import quota of 268.1 million gallons of ethanol. In the past, legislation has been introduced in the Senate that would limit the transshipment of ethanol through the CBI. It is possible that similar legislation will be introduced this year, however, there is no assurance or guarantee that such legislation will be introduced or that it will be successfully passed.

     The ethanol industry is heavily dependent on several economic incentives to produce ethanol, including federal ethanol supports. The most recent ethanol supports are contained in the Energy Policy Act of 2005. Most notably, the Energy Policy Act of 2005 creates a 7.5 billion gallon Renewable Fuels Standard (RFS). The RFS

requires refiners to use 4 billion gallons of renewable fuels in 2006, increasing to 7.5 billion gallons by 2012. See “INDUSTRY OVERVIEW – General Ethanol Demand and Supply, Demand for Ethanol.”

     On December 30, 2005, the Environmental Protection Agency published an “interim rule” in the Federal Register imposing a 2.78% default provision (equating to 4 billion gallons of renewable fuel) of the RFS. The interim rule was prepared as a Direct Final Rule, meaning it became effective upon publication due to the absence of compelling negative comments filed within 30 days. The Direct Final Rule applies a collective compliance approach, meaning no refiner individually has to meet the standard, but that the industry as a whole will have to blend at least 2.78% renewable fuels into gasoline this year. Any shortfall in meeting this requirement would be added to the 4.7 billion gallon RFS requirement in 2007. There are no other consequences for failure to collectively meet the 2006 standard. Although there is not a requirement for individual parties to demonstrate compliance in 2006, the EPA found that increases in ethanol production and projections for future demand indicate that the 2006 volume is likely to be met and that more than 4 billion gallons of ethanol and biodiesel will be blended this year. An EPA brief explaining its action can be viewed at www.epa.gov/otaq/renwewablefuels/. The Direct Final Rule is only expected to apply in 2006. The EPA expects to promulgate more comprehensive regulations by August 8, 2006, but the interim rules and collective compliance approach are expected to apply for the entire 2006 calendar year. In 2007 and subsequent years, the EPA expects to specifically identify liable parties, determine the applicable RFS, and develop a credit trading program. Further, the standards for compliance, record-keeping and reporting are expected to be clarified.

     On September 7, 2006, the EPA published proposed final rules implementing the RFS program. The RFS program will apply in 2007 prospectively from the effective date of the final rule. The RFS for 2007 is 3.71% or 4.7 billion gallons of renewable fuel. The RFS must be met by refiners, blenders, and importers (obligated parties). Compliance with the RFS program will be shown through the acquisition of unique Renewable Identification Numbers (RINs) assigned by the producer to every batch of renewable fuel produced. The RIN shows that a certain volume of renewable fuel was produced. Obligated parties must acquire sufficient RINs to demonstrate compliance with their performance obligation. In addition, RINs can be traded and a recordkeeping and electronic reporting system for all parties that have RINs ensures the integrity of the RIN pool.

     RINs are valid for compliance purposes for the calendar year in which they were generated, or the following calendar year. No more than 20% of the current year obligation could be satisfied using RINs from the previous year. An obligated party may carry a deficit over from one year into the next if it cannot generate or purchase sufficient RINs to meet its renewable volume obligation. However, deficits cannot be carried over from year into the next.

     The RFS system will be enforced through a system of registration, record keeping and reporting requirements for obligated parties, renewable producers (RIN generators), as well as any party that procures or trades RINs either as part of their renewable purchases or separately. Any person who violates any prohibition or requirement of the RFS program may be subject to civil penalties for each day of each violation. For example, under the proposed rule, a failure to acquire sufficient RINs to meet a party’s renewable fuels obligation would constitute a separate day of violation for each day the violation occurred during the annual averaging period. The enforcement provisions are necessary to ensure the RFS program goals are not compromised by illegal conduct in the creation and transfer of RINs.

     Historically, ethanol sales have also been favorably affected by the Clean Air Act amendments of 1990, particularly the Federal Oxygen Program which became effective November 1, 1992. The Federal Oxygen Program requires the sale of oxygenated motor fuels during the winter months in certain major metropolitan areas to reduce carbon monoxide pollution. Ethanol use has increased due to a second Clean Air Act program, the Reformulated Gasoline Program. This program became effective January 1, 1995, and requires the sale of reformulated gasoline in nine major urban areas to reduce pollutants, including those that contribute to ground level ozone, better known as smog. The two major oxygenates added to reformulated gasoline pursuant to these programs are MTBE and ethanol, however MTBE has caused groundwater contamination and has been banned from use by many states. Although the Energy Policy Act of 2005 did not impose a national ban of MTBE, its failure to include liability protection for manufacturers of MTBE is expected to result in refiners and blenders using ethanol as an oxygenate rather than MTBE to satisfy the reformulated gasoline oxygenate requirement. While this may create increased demand in the short-term, we do not expect this to have a long term impact on the demand for ethanol as the Act

repealed the Clean Air Act’s 2% oxygenate requirement for reformulated gasoline. However, the Act did not repeal the 2.7% oxygenate requirement for carbon monoxide nonattainment areas which are required to use oxygenated fuels in the winter months. While we expect ethanol to be the oxygenate of choice in these areas, there is no assurance that ethanol will in fact be used.

     The recent voluntary shift away from MTBE to ethanol has put increased focus on America’s ethanol and gasoline supplies. By removing the oxygenate requirements mandated by the Clean Air Act, the Energy Policy Act of 2005 effectively eliminated RFG requirements; however, federal air quality laws in some areas of the country still require the use of RFG. As petroleum blenders now phase away from MTBE due to environmental liability concerns, the demand for ethanol as an oxygenate could increase. However, on April 25, 2006, President Bush announced that he has asked EPA Administrator Stephen Johnson to grant temporary reformulated gas waivers to areas that need them to relieve critical fuel supply shortages. Such waivers may result in temporary decreases in demand for ethanol in some regions, driving down the price of ethanol. Furthermore, legislation was recently introduced in the Senate and House that would strike the $0.54 secondary tariff on imported ethanol due to concerns that the recent spikes in retail gasoline prices are a result of ethanol supplies. These concerns may be misguided when one considers that the Energy Information Administration (EIA) estimates that 130,000 barrels per day of ethanol will be needed to replace the volume of MTBE refiners have chosen to remove from the gasoline pool, and the most recent EIA report shows that U.S. ethanol production has soared to 302,000 barrels per day in February, which would be enough ethanol to meet the new MTBE replacement demand while continuing to supply existing markets. Nevertheless, if the legislation is passed, the price of ethanol may decrease, negatively affecting our future earnings.

     The government’s regulation of the environment changes constantly. It is possible that more stringent federal or state environmental rules or regulations could be adopted, which could increase our operating costs and expenses. It also is possible that federal or state environmental rules or regulations could be adopted that could have an adverse effect on the use of ethanol. For example, changes in the environmental regulations regarding ethanol’s use due to currently unknown effects on the environment could have an adverse effect on the ethanol industry. Furthermore, plant operations likely will be governed by the Occupational Safety and Health Administration (OSHA). OSHA regulations may change such that the costs of the operation of the plant may increase. Any of these regulatory factors may result in higher costs or other materially adverse conditions effecting our operations, cash flows and financial performance.

     The use of ethanol as an alternative fuel source has been aided by federal tax policy. On October 22, 2004, President Bush signed H.R. 4520, which contained the Volumetric Ethanol Excise Tax Credit (VEETC) and amended the federal excise tax structure effective as of January 1, 2005. Prior to VEETC, ethanol-blended fuel was taxed at a lower rate than regular gasoline (13.2 cents on a 10% blend). Under VEETC, the ethanol excise tax exemption has been eliminated, thereby allowing the full federal excise tax of 18.4 cents per gallon of gasoline to be collected on all gasoline and allocated to the highway trust fund. This is expected to add approximately $1.4 billion to the highway trust fund revenue annually. In place of the exemption, the bill creates a new volumetric ethanol excise tax credit of 5.1 cents per gallon of ethanol blended at 10%. Refiners and gasoline blenders apply for this credit on the same tax form as before only it is a credit from general revenue, not the highway trust fund. Based on volume, the VEETC is expected to allow much greater refinery flexibility in blending ethanol since it makes the tax credit available on all ethanol blended with all gasoline, diesel and ethyl tertiary butyl ether (ETBE), including ethanol in E85 and the E-20 in Minnesota. The VEETC is scheduled to expire on December 31, 2010.

     The Energy Policy Act of 2005 expands who qualifies for the small ethanol producer tax credit. Historically, small ethanol producers were allowed a 10-cents per gallon production income tax credit on up to 15 million gallons of production annually. The size of the plant eligible for the tax credit was limited to 30 million gallons. Under the Energy Policy Act of 2005 the size limitation on the production capacity for small ethanol producers increases from 30 million to 60 million gallons. The credit can be taken on the first 15 million gallons of production. The tax credit is capped at $1.5 million per year per producer. We anticipate that our annual production will exceed production limits of 60 million gallons a year and that we will be ineligible for the credit.

     In addition, the Energy Policy Act of 2005 creates a new tax credit that permits taxpayers to claim a 30% credit (up to $30,000) for the cost of installing clean-fuel vehicle refueling equipment, such as an E85 fuel pump, to be used in a trade or business of the taxpayer or installed at the principal residence of the taxpayer. Under the

provision, clean fuels are any fuel of at least 85% of the volume of which consists of ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, and hydrogen and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel. The provision is effective for equipment placed in service January 9, 2007 and before January 1, 2010. While it is unclear how this credit will affect the demand for ethanol in the short term, we expect it will help raise consumer awareness of alternative sources of fuel and could positively impact future demand for ethanol.

     The ethanol industry and our business depend upon continuation of the federal ethanol supports discussed above. These incentives have supported a market for ethanol that might disappear without the incentives. Alternatively, the incentives may be continued at lower levels than at which they currently exist. The elimination or reduction of such federal ethanol supports would make it more costly for us to sell our ethanol and would likely reduce our net income and the value of your investment.

     We will be in direct competition with numerous other ethanol producers, many of whom have greater resources than we do. We also expect that additional ethanol producers will enter the market if the demand for ethanol continues to increase. Our plant will compete with other ethanol producers on the basis of price, and to a lesser extent, delivery service. We believe that we can compete favorably with other ethanol producers, due to our expected rail access and anticipated grain supplies at favorable prices. However, we believe that we can compete favorably with other ethanol producers due to the following factors:

     According to the Renewable Fuels Association, there are 105 ethanol production facilities operating in the United States with the capacity to produce over 5.0 billion gallons of ethanol annually and there are 44 ethanol refineries and seven expansions under construction which if completed will result in additional annual capacity of nearly 3.2 billion gallons. The largest ethanol producers include Abengoa Bioenergy Corp., Archer Daniels Midland (ADM), Aventine Renewable Energy, Inc., Cargill, Inc., New Energy Corp. and VeraSun Energy Corporation, all of which are capable of producing more ethanol than we expect to produce. In 2005, ADM announced that it intends to increase its ethanol production capacity by 500 million gallons through the construction of two new dry corn milling facilities. According to ADM’s news release, the facilities will be located adjacent to ADM’s existing ethanol plants. ADM is currently the largest ethanol producer in the United States and controls a significant portion of the ethanol market. ADM’s plan to produce an additional 500 million gallons of ethanol per year will strengthen its position in the ethanol industry and cause a significant increase in domestic ethanol supply. In addition, there are also several regional entities recently formed, or in the process of formation, of similar size and with similar resources to ours.

     The following table identifies most of the producers in the United States along with their production capacities.