10QSB 1 v085083_10qsb.htm

U.S. Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended July 31, 2007

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from____________to________

Commission file number: 00-51354

MARWICH II, LTD.

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

Colorado	84-0925 128
(State or other jurisdiction of	(IRS Employer identification No.)
incorporation or organization)

203 N. LaSalle Street, Suite 2100

Chicago, IL 60601

(Address of principal executive offices)

(312) 264 -2682

(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

Number of shares of common stock outstanding as of July 31, 2007: 3,785,664

Transitional Small Business Disclosure Format: Yes o No x

MARWICH II, LTD.

FORM 10-QSB

INDEX

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS PART I. FINANCIAL INFORMATION		Page 3
Item 1.	Financial Statements
	Balance Sheets as of July 31, 2007 (unaudited) and January 31, 2007	4
	Unaudited Statements of Operations for Three and Six Months ended July 31, 2007 and 2006	5
	Unaudited Statements of Cash Flows for the Six Months ended July 31, 2007 and 2006	6
	Notes to the Unaudited Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Controls and Procedures	12
PART II. OTHER INFORMATION		13
Item 6.	Exhibits	16
SIGNATURES		17

SPECIAL NOTE REGARDING FORWARD—LOOKING STATEMENTS

On one or more occasions, we may make forward-looking statements in this Quarterly Report on Form 10-QSB regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events. Words or phrases such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue” or similar expressions identify forward-looking statements. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties, including, but not limited to those listed below and those business risks and factors described elsewhere in this report and our other Securities and Exchange Commission filings.

Forward-looking statements involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and believe such statements are based on reasonable assumptions, including without limitation, management’s examination of historical operating trends, data contained in records and other data available from third parties, we cannot assure you that our projections will be achieved.

We have attempted to identify, in context, certain of the factors that we believe may cause actual future experience and results to differ materially from our current expectation regarding the relevant matter or subject area. In addition to the items specifically discussed above, our business and results of operations are subject to the uncertainties described under the caption “Risk Factors” which is a part of the disclosure included in Item 2 of this Report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

From time to time, oral or written forward-looking statements are also included in our reports on Forms 10-KSB, 10-QSB and 8-K, Proxy Statements on Schedule 14A, press releases, analyst and investor conference calls, and other communications released to the public. Although we believe that at the time made, the expectations reflected in all of these forward-looking statements are and will be reasonable, any or all of the forward-looking statements in this quarterly report on Form 10-QSB, our reports on Forms 10-KSB and 8-K, our Proxy Statements on Schedule 14A and any other public statements that are made by us may prove to be incorrect. This may occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Many factors discussed in this Quarterly Report on Form 10-QSB, certain of which are beyond our control, will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this Quarterly Report on Form 10-QSB or other public communications that we might make as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent annual and periodic reports filed with the SEC on Forms 10-KSB, 10-QSB and 8-K and Proxy Statements on Schedule 14A.

Unless the context requires otherwise, references to “we,” “us,” “our” the “Company” and “the Company” refer specifically to Marwich II, Ltd.

PART I - FINANCIAL INFORMATION

(1) Item 1 - Financial Statements

Marwich II, Ltd.
BALANCE SHEETS
as of July 31, 2007 and January 31, 2007
(unaudited)

ASSETS

	July 31,			January 31,
	2007			2007
	(unaudited)

Current Assets	$	-		$	-

Total Assets	$	-		$	-

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable, related parties	$	121,934		$	91,189

Total Current Liabilities		121,934			91,189

Stockholders' Equity:
Preferred stock, $.01 par value;
1,000,000 shares authorized, none
issued and outstanding		-			-
Common stock, no par value,
100,000,000 shares authorized,
3,785,664 shares issued and
outstanding		333,567			333,567
Additional paid in capital		3,000			3,000
Accumulated deficit		(458,501	)		(427,756	)
		(121,934	)		(91,189	)

Total Liabilities and Stockholders' Equity	$	-		$	-

The accompanying notes are an integral part of the financial statements.

Marwich II, Ltd.
STATEMENTS OF OPERATIONS
For the six and three months ended July 31, 2007 and 2006
(unaudited)



	For the six months ended						For the three months ended
	July 31,			July 31,			July 31,			July 31,
	2007			2006			2007			2006

Revenues	$	-		$	-		$	-		$	-

Operating expenses:
Professional fees		28,148			9,760			16,398			6,200
Administrative and other		2,597			2,834			1,300			2,609
		30,745			12,594			17,698			8,809

Net loss	$	(30,745	)	$	(12,594	)	$	(17,698	)	$	(8,809	)

Per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average number of shares outstanding		3,785,664			3,785,664			3,785,664			3,785,664

The accompanying notes are an integral part of the financial statements.

Marwich II, Ltd.
STATEMENTS OF CASH FLOWS
For the six months ended July 31, 2007 and 2006

(unaudited)



	For the six months ended
	July 31,			July 31,
	2007			2006

Cash flows from operating activities:
Net loss	$	(30,745	)	$	(12,594	)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Increase (decrease) in accounts payable		30,745			(1,200	)

Net cash used by operating activities		-			(13,794	)

Cash flows from investing activities		-			-

Cash flows from financing activities
Contributions of capital		-			3,000

Net cash provided by financing activities		-			3,000

Increase (decrease) in cash		-			(10,794	)

Cash, Beginning of period		-			10,794

Cash, End of period	$	-		$	-

MARWICH II, LTD.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

(1) Unaudited Financial Statements

The balance sheets as of July 31, 2007, the statements of operations and the statements of cash flows for the three and six month periods ended July 31, 2007 and 2006, have been prepared by Marwich II, Ltd. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures, normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted as allowed by such rules and regulations, and the Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to the 2006 figures to conform to the 2007 presentation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position at July 31, 2007 and for all periods presented, have been made.

It is suggested that these statements be read in conjunction with the January 31, 2007 audited financial statements and the accompanying notes included in the Company's Annual Report on Form 10-KSB, filed with the Securities and Exchange Commission on April 10, 2007.

(2) Basis of Presentation - Ability to continue as a Going Concern

Marwich II, Ltd. (the "registrant" or "Company") was incorporated under the laws of the State of Colorado on August 16, 1983.

The Company ceased active business operations and was administratively dissolved by the Colorado Secretary of State effective January 1, 1991. The Company was reinstated by the Colorado Secretary of State effective October 13, 2004.

Marwich has an authorized capitalization of 100,000,000 shares of common stock, no par value per share and 1,000,000 shares of preferred stock, $.01 par value per share. On June 2, 2006, the Company effected a three-for-one common stock dividend on the Company's common stock. All references to share numbers reflect this stock dividend.

In October 2004, the Company’s Board of Directors, appointed three new directors and three new officers, all of whom were shareholders of the firm Pride Equities, Inc. (Pride). Management then secured the services of Pride, a consulting firm to assist the Company in its efforts to salvage value for the benefit of its shareholders. Pride contributed $30,000 as paid in capital to the Company and the Company issued Pride 1,920,000 shares of its common stock. The paid-in capital was used to pay for professional services, including accounting services in order to enable the Company to make all necessary filings with the Securities and Exchange Commission.

The Company is a "shell" company, whose sole purpose at this time, is to consummate the Merger with American Ethanol, Inc. (“American Ethanol”) described below.

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern.

The Company has limited working capital and no active business operations, which raises substantial doubt about its ability to continue as a going concern. Management resumed the filing of Securities and Exchange Commission reporting in 2004 and in 2006 began to seek a business combination. Management believes that this plan provides an opportunity for the Company to continue as a going concern. As a result, the Company’s ability to continue as a going concern is dependent upon the Company's ability to successfully consummate a business combination.

On June 23, 2006, American Ethanol acquired approximately 88.3% of the outstanding common stock of the Company from three principal shareholders and directors of the Company for $675,000. In connection with this transaction, the three directors of the Company resigned from the board and members of American Ethanol’s management were named to the Company’s Board of Directors and as officers of the Company.

Effective as of June 23, 2006, Marwich-Colorado and American Ethanol entered into an Agreement and Plan of Merger, pursuant to which American Ethanol agreed to merge with and into Marwich-Colorado, with Marwich-Colorado being the surviving company. On July 19, 2007, Marwich-Colorado, Marwich II, Ltd., a Nevada corporation (“Marwich-Nevada”), AE Biofuels, Inc., a Nevada corporation and wholly owned subsidiary of Marwich-Nevada (“Merger Sub”), and American Ethanol entered into an Amended and Restated Agreement and Plan of Merger (the “Amended Merger Agreement”). The Amended Merger Agreement superseded the Agreement and Plan of Merger entered into with American Ethanol on June 23, 2006 as disclosed in our current report on Form 8-K filed on that date, adds Marwich Nevada and Merger Sub as parties to the agreement and further amends the former agreement to (i) amend Article II to provide that Merger Sub will merge with and into American Ethanol with American Ethanol being the surviving corporation; (ii) provide that the name of Marwich-Nevada be changed to AE Biofuels, Inc. effective upon the consummation of the merger; (iii) add a covenant that Marwich-Nevada will authorize a new series of Series B Convertible Preferred with rights, preferences and privileges substantially similar to the rights, preferences and privileges of the American Ethanol Series B Preferred (the “Marwich-Nevada Series B Preferred”); (iv) amend Article III to provide that (a) each issued and outstanding share of American Ethanol common stock (including shares of American Ethanol Series A Preferred Stock, which will automatically convert into common on the Effective Date of the merger) will be automatically canceled and converted into the right to receive one share of Marwich-Nevada common stock; (b) each issued and outstanding share of American Ethanol’s Series B Preferred will be automatically canceled and converted into the right to receive one share of Marwich-Nevada Series B Preferred; and (c) each issued and outstanding American Ethanol option and warrant will be assumed by Marwich-Nevada and become an option or warrant to purchase Marwich-Nevada’s common stock or Marwich-Nevada Series B Preferred as applicable on the same terms and conditions; and (v) add as a condition to American Ethanol’s obligation to complete the Merger that the Reincorporation be completed. The Amended and Restated Agreement and Plan of Merger, is herein referred to as the “Merger Agreement”.

Based on the foregoing, assuming that American Ethanol does not issue any additional shares prior to the Merger, Marwich-Nevada would issue 83,914,998 shares of common stock in exchange for all the outstanding American Ethanol common stock and Series A Preferred Stock, 8,447,440 shares of Series B Preferred Stock in exchange for the same number of shares of American Ethanol Series B Preferred Stock, and would assume option and warrants exercisable for an additional 1,747,000 shares of common stock and 902,310 shares of Series B Preferred Stock. The exercise prices and other terms of the outstanding options and warrants will remain unchanged. In addition, the shares of Marwich-Colorado common stock held by American Ethanol would be cancelled. If the Merger is completed, the directors and the officers of American Ethanol would become the directors and officers of Marwich-Nevada and Marwich-Nevada will change its name to AE Biofuels, Inc. Upon the closing of the Merger, shareholders of American Ethanol would own approximately 99.5% of the common stock of Marwich-Nevada and current shareholders of Marwich-Colorado will hold approximately 0.5% of Marwich-Nevada common stock.

The Merger Agreement has been approved by the boards of directors of each of the Company and American Ethanol and must be submitted to the shareholders of each of American Ethanol and the Company for their approval. American Ethanol currently owns 88.3% of the outstanding voting shares of the Company, a sufficient number to ensure approval of the Merger. However, the Merger closing is still subject to the satisfaction of the normal closing conditions in transactions of this kind, and the SEC must still approve the form and content of the proxy or information statement to be mailed by the Company to its shareholders. No assurance can be given that the Merger will be consummated, or if consummated, that the terms will not change from those currently contained in the Merger Agreement.

In addition, immediately prior to the Merger, the Company currently intends to reincorporate from the State of Colorado to the State of Nevada.

Effective Date

The Merger will become effective upon the satisfaction of various conditions, including the approval of the Merger by the shareholders of both the Company and American Ethanol. It is currently anticipated that the merger will occur during the third quarter of 2007.

Conditions to the Merger

The Company and American Ethanol have each agreed to continue to operate their respective businesses in the ordinary course prior to the Merger. Under the Merger Agreement, each of the parties agreed to do certain things, some of which are conditions to the Merger transaction. Each party is obligated to (a) obtain all necessary approvals for various aspects of the transaction, (b) give the other access to the records and personnel to complete due diligence review, and (c) proceed expeditiously to undertake all actions so as to be able to consummate the Merger. Consummation of the Merger is also contingent upon (i) preparation, filing and distribution to the Company’s shareholders of a proxy or information statement related to the approval of the Merger by the Company’s shareholders, and (ii) continued quotation of the Company’s common stock on the OTC Bulletin Board. The representations and warranties of the parties to the Merger Agreement generally do not survive the closing of the Merger.

Regulatory Approval

No specific federal or state regulatory approvals must be obtained by the parties to the Merger Agreement in order to consummate the Merger, other than general compliance with applicable corporation laws and state and federal securities laws and obtaining the SEC’s approval of the proxy or information statement if the SEC elects to review the proxy or information statement.

Termination

At any time prior to the Merger closing, notwithstanding the approval of the Merger Agreement by the shareholders of both the Company and American Ethanol, the Merger Agreement may be terminated and the Merger abandoned by (i) the mutual consent of the boards of directors of the Company and American Ethanol, (ii) by either the Company or American Ethanol if the Merger is prohibited by issuance of an order, decree or ruling, or (iii) by either party if the other is in material breach of any representation, warranty, covenant or agreement. Neither the Company nor American Ethanol presently knows of any reason why the Merger might be abandoned.

Change of Domicile/Corporate Name

Immediately prior to the Merger, the Company currently intends to reincorporate from the State of Colorado to the State of Nevada and upon consummation of the Merger to change its name to AE Biofuels, Inc.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The Company was incorporated under the laws of the state of Colorado on August 16, 1983 and was organized to engage in the acquisition of assets and properties which management believed had good business potential. On January 1, 1991, the Company was dissolved by administrative action of the Colorado Secretary of State as a result of the failure to file required documents with the State of Colorado and at that time became dormant.

Effective October 13, 2004, the Company filed article of reinstatement with the Colorado Secretary of State and over the next few months became current with respect to its SEC reporting requirements as a publicly traded company. The Company’s stated purpose was to identify, evaluate and investigate various companies with the intent that, if such investigation warranted, a reverse merger transaction be negotiated and completed pursuant to which the Company would acquire a target company with an operating business with the intent of continuing the acquired company's business as a publicly held entity.

The Company generated no revenues during the three and six months ended July 31, 2007, and management does not anticipate that the Company will generate any revenues until the Merger is consummated.

Expenses reported in the Company’s financial statements included herewith are costs related to being a public entity. Since American Ethanol acquired an 88.3% interest in the Company it has been advancing funds for such expenses to the Company. Such advances are reflected in “Accounts Payable to Related Parties” on the Company’s Balance Sheet at the reporting date. It is anticipated that American Ethanol will continue to advance funds until such time as the Merger is completed.

The Company has no capital. The Company anticipates operational costs will be limited until such time as the Merger is consummated.

At July 31, 2007, the Company had no material commitments for capital expenditures.

Merger with American Ethanol, Inc.

On June 23, 2006 American Ethanol acquired approximately 88.3% of the outstanding common stock of the Company from three principal shareholders and directors of the Company for $675,000. In connection with this transaction, the three directors of the Company resigned from the board and American Ethanol’s Chief Executive Officer, and Chief Financial Officer, were named to the Company’s Board of Directors.

The Company currently has 3,785,664 shares of common stock issued and outstanding, of which American Ethanol owns 3,343,200 shares (or 88.3%). Assuming no shareholder of either American Ethanol or the Company elects dissenters' rights and that the capitalization of either company does not change prior to the closing of the Merger, in the Merger based on the foregoing, assuming that American Ethanol does not issue any additional shares prior to the Merger, Marwich-Nevada would issue 83,914,998 shares of common stock in exchange for all the outstanding American Ethanol common stock and Series A Preferred stock, 8,447,440 shares of Series B Preferred Stock in exchange for the same number of shares of American Ethanol Series B Preferred Stock, and would assume option and warrants exercisable for an additional 1,747,000 shares of common stock and 902,310 shares of Series B Preferred Stock. The exercise prices and other terms of the outstanding options and warrants will remain unchanged. In addition, the shares of Marwich-Colorado common stock held by American Ethanol would be cancelled. If the Merger is completed, the directors and the officers of American Ethanol would become the directors and officers of Marwich-Nevada and Marwich-Nevada will change its name to AE Biofuels, Inc. Upon the closing of the Merger, shareholders of American Ethanol would own approximately 99.5% of the common stock of Marwich-Nevada and current shareholders of Marwich-Colorado will hold approximately 0.5% of Marwich-Nevada common stock.

ITEM 3. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rules 13(a)-15(e) under the Securities Exchange Act of 1934, as amended. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report the Company's disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company's periodic Securities and Exchange Commission reports.

There has been no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

RISK FACTORS

Risks Related to the Merger with American Ethanol

We may not consummate the Merger in the near future, or at all.

It is our intention to effect the Merger; however no assurance can be given that the Merger will occur, or that if it does occur that it will occur in the near future. Under Colorado state corporate law, the Company will have to obtain shareholder approval for the Merger, which will require us to mail a proxy or information statement to our shareholders. As a public company, the proxy or information statement must be filed with the SEC before it can be mailed to our shareholders. The proxy or information statement may not be mailed to our shareholders until (i) ten days after it has been filed if the SEC elects not to review the proxy or information statement, or (ii) if the

SEC elects to review the proxy or information statement, until the SEC has approved of its use. The proxy or information statement is a lengthy document that is currently being prepared, but that has not yet been filed. Accordingly, it is not known when the proxy or information statement will be filed, whether the SEC will review the proxy or information statement, and if it does what effect the review will have on the timing and outcome of the Company’s shareholder meeting and on the Merger. If the SEC does review the proxy or information statement, depending on the SEC’s comments and the Company’s ability to satisfactorily address all of the SEC’s comments, the review process could delay the mailing of the proxy or information statement for a lengthy period of time, which period could last several months or more. In addition, the SEC’s comments may require that we and American Ethanol make changes to the terms and structure of the Merger. For example, the SEC or certain state securities agencies may require that the shares issued by the Company in the Merger be registered in accordance with the Securities Act or, that additional steps be taken by either the Company or American Ethanol before the Merger can be completed, any of which could make the Merger impractical or undesirable. In addition, our ability to complete the Merger, or the desirability of completing the Merger, may be affected by other regulatory issues related to our business, by future business conditions, by the state of the stock market, or by other events that we cannot currently predict. Accordingly, no assurance can be given that the Merger will occur.

The Merger may fail to enhance shareholder value.

While our goal is to maximize shareholder value, there can be no guarantees that the Merger will not impair shareholder value. If the Merger is effected, our business will be that of American Ethanol. Moreover, the Merger may require us to incur non-recurring or other charges and may pose significant integration challenges and/or management and business disruptions, any of which could harm our results of operation and business prospects.

There may be possible litigation in connection with the Merger.

The Merger may also be challenged in court by various parties, including our existing shareholders. Our board did not seek or obtain an independent evaluation or opinion of the fairness of the Merger to our shareholders. Since American Ethanol currently owns approximately 88.3% of our voting stock, and the officers and directors of the Company are affiliates of American Ethanol, the Merger could be challenged on the grounds, among others, that the transaction is not being completed on arms’ length terms and conditions. Any such legal challenge to the Merger could delay the Merger or make the consummation of the Merger undesirable. Conversely, if the Merger is not consummated for any reason, including due to no fault of our own, lawsuits may be filed against us by third parties, for a variety of reasons, including, but not limited to, for failing to consummate the Merger. Such litigation, if it occurs, could harm our business, our prospects and our reputation.

Our current and future shareholders will be diluted by the Merger.

Our current and future shareholders will be diluted as a result of the issuance of our shares to the American Ethanol shareholders in the Merger. In addition, our shareholders may be diluted by future issuances of shares to satisfy our working capital needs. We anticipate that our current shareholders will own less than 0.5% of the outstanding shares of the combined entity, if the Merger is consummated under the current terms.

There can be no assurance that a liquid public market for our common stock will exist after the Merger.

Although the Company’s shares of common stock are eligible for quotation on the OTC Bulletin Board electronic over-the-counter trading system, a very limited number of shares trade on a regular basis and there may not be a significant market in such stock after the Merger. In addition, there can be no assurance that a regular and established market will be developed and maintained for the securities upon completion of the Merger. There can also be no assurance as to the strength or liquidity of any market for the Company’s common stock or the prices at which holders may be able to sell the shares.

It is likely that there will be significant volatility in the trading price.

In the event that a public market for our common stock is created or maintained after the Merger, market prices for the common stock will be influenced by many factors and will be subject to significant fluctuations in response to variations in operating results of American Ethanol and other factors. Factors that could affect our future stock price, and create volatility in our stock price, include the price and demand for ethanol, the price and availability of oil and gasoline, the political situation in the Middle East, U.S. energy policies, federal and state regulatory changes that affect the price of ethanol, the existence or discontinuation of legislative incentives for renewable fuels, the trading price of the stock of our competitors, investor perceptions of American Ethanol, interest rates, general economic conditions and those specific to the industry, developments with regard to American Ethanol’s operations and activities, our future financial condition, and changes in our management.

Risks relating to low priced stocks.

Although the Company’s common stock currently is quoted and traded on the OTC Bulletin Board, the price at which the stock will trade after the consummation of the Merger cannot currently be estimated. If the Company’s common stock trades below $5.00 per share, trading in the common stock may be subject to the requirements of certain rules promulgated under the Exchange Act of 1934, as amended (the “Exchange Act”), which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any non-Nasdaq equity security that has a market price share of less than $5.00 per share, subject to certain exceptions) and a two business day “cooling off period” before broker and dealers can effect transactions in penny stocks. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. These, and the other burdens imposed upon broker-dealers by the penny stock requirements, could discourage broker-dealers from effecting transactions in the common stock which could severely limit the market liquidity of the common stock and the ability of holders of the common stock to sell it.

PART II - OTHER INFORMATION

Item 6. Exhibits

31.1 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.

32.1 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this Report on Form 10-QSB to be signed on its behalf by the undersigned, thereunto duly authorized.


	MARWICH II, LTD. (Registrant)

Date: August 15, 2007	By:	/s/ William J. Maender
		Chief Financial Officer
		(Principal Financial and Accounting Officer)