our raw materials, lack of demand for our product at profitable prices and will face, if our operations begin, the ordinary delay between when we would purchase raw materials and when we would receive payments from REG for our finished products.

Working Capital Financing and Other Strategic Efforts

We have developed a financing plan that has been presented to over 40 financial firms during the 2008 calendar year. These financial firms have included money center banks, regional banks, community banks, finance companies, factors and high net worth individuals. In addition, we have sought working capital from potential lenders in the agriculture industry, those with commodity experience and those with experience in renewable fuels. We have engaged placement agents to approach lenders that we would otherwise not have approached. These placement agents have access to both traditional lending sources and non traditional lenders. Our financing plan requests a minimum working capital facility of $10,000,000. We have offered potential lenders a first security interest in our inventory and accounts receivable. We believe a facility of less than $10,000,000 would not allow us to operate at meaningful volumes. However, we estimate the need for $15,000,000 in working capital financing to operate the plant optimally at its full capacity, based upon February 2009 commodity prices. To date we have not been successful in obtaining a working capital facility.

If we are unable to obtain working capital financing, we will have to resort to one or more of the following:

Our preference and goals are to fund principal and interest payments, obtain working capital financing and operate our plant profitably, rather than resorting to bankruptcy court relief. To date our negotiations with working capital lenders and other sources of capital have not resulted in a commitment, and we remain uncertain as to the likely outcome of our efforts.

We cannot predict the outcome of our efforts to obtain working capital financing.

Retention of Financial Advisor

We selected Chicago-based William Blair & Company, L.L.C. (William Blair) to act as our financial advisor in connection with our continued exploration of possible strategic alternatives, including (a) the possible merger or sale of all or a portion of our capital stock or assets or other business combination (a Business Combination); or (b) arranging new financing for us (a Financing Transaction, which along with a Business Combination, are collectively, Possible Transactions).   See “Other Information”, for terms of William Blair’s engagement, in Part II, Item 5, below.

Distribution to Unit Holders

As of December 31, 2008, the board of directors of the Company had not declared any dividends.

18

Critical Accounting Estimates

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

Impairment of long-lived assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset (or asset group) may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows from operations are less than the carrying  value of the asset group.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset.  In accordance with Company  policies, management has evaluated the plant for possible impairment based on projected future cash flows from operations assuming that the Company is able to obtain a working capital loan and commence operations.  Management has determined that its projected future cash flows from operations exceed the carrying value of the plant and that no impairment exists at December 31, 2008.

Revenue Recognition
 
Revenue  from the  production  of  biodiesel  and  glycerin  is recorded  upon  transfer of the risk and rewards of ownership and delivery to customers. Biodiesel and glycerin are generally shipped FOB from the plant.

Derivative Instruments and Hedging Activities
 
Statement  of  Financial  Accounting  Standards  No.  133,  Accounting  for  Derivative   Instruments  and  Hedging Activities,  or SFAS No. 133,  requires a company to evaluate its contracts to determine whether the contracts are derivatives.  Certain derivative contracts may be exempt under SFAS No. 133 as normal purchases or normal sales, which are contracts that provide for the purchase or sale of  something other than a financial  instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business.  At this time, our forward contracts related to the purchase of soybean oil and natural gas are considered normal purchases and, therefore, are exempted from the accounting and reporting requirements of SFAS No. 133.

Off-balance Sheet Arrangements
 
We have no off-balance sheet arrangements.

Evaluation of Disclosure Controls and Procedures

Based on management’s evaluation (with the participation of our principal executive officer (PEO), Mr. Chris L. Daniel, and principal financial officer (PFO), Mr. Jack W. Limbaugh, Jr.), as of the end of the period covered by this report, our PEO and PFO have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (SEC), and is accumulated and communicated to management, including our PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.

19

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our PEO and PFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II - OTHER INFORMATION

Our efforts to effect a Business Combination, arrange new financing and/or restructure our substantial Farm Credit indebtedness may not be successful. There can be no assurance that William Blair, our financial advisor, will be successful in facilitating one or more of the following possible strategic alternatives on a timely or sufficient basis: (a) the possible merger or sale of all or a portion of our capital stock or assets or other business combination; (b) arranging new financing for us; and/or (c) restructuring of our Farm Credit indebtedness. Our failure to achieve one or more of these strategic alternatives will likely require us to seek bankruptcy court relief.

As provided in a letter agreement dated December 26, 2008, we selected William Blair to act as our financial advisor in connection with our continued exploration of possible strategic alternatives, including a Business Combination or arranging a Financing Transaction.  See "Retention of Financial Advisor" in Part I, Item 2, above.  William Blair was selected because the firm is a nationally recognized investment banking firm that has substantial experience in the Possible Transactions.

The letter agreement provides that East Fork pay William Blair a non-refundable fee of $50,000 in cash upon execution of the letter agreement.

Also, William Blair is entitled to receive a non-refundable monthly fee of $50,000, payable in advance every 30 days after December 26, 2008, unless the letter agreement is terminated early. The total of these monthly fees may not exceed $200,000. William Blair will be compensated through a combination of the monthly retainer and contingent success fees related to the nature of the transaction consummated, if any.

William Blair will be entitled to a minimum fee of at least $500,000 (inclusive of all monthly fees paid and fairness opinion fee paid) upon the closing of a Business Combination or Financing Transaction.

20

East Fork has also agreed to reimburse William Blair for its reasonable expenses, including attorneys’ fees and disbursements, and to indemnify William Blair against various liabilities, including securities law violations, arising out of performance of its services under the letter agreement or Possible Transactions.

William Blair’s engagement may be terminated by either party at any time, with or without cause, upon written notice to the other party. If the letter agreement terminates or expires and East Fork subsequently closes a Possible Transaction within 12 months of such termination or expiration in which William Blair was involved, East Fork may be liable to William Blair for transaction fees.  The foregoing description of the letter agreement does not purport to be complete and is qualified in its entirety by reference to the letter, which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

21