##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended: September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from                      to
 Commission file number: 000-50282
 
 PANDA ETHANOL, INC.
 (Exact name of registrant as specified in its charter)
 
 Nevada
    
    24-4799979(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 4100 Spring Valley, Suite 1002
Dallas, Texas
75244
(Address of principal executive offices)
(Zip Code)
 (972) 361-1200
(Registrants telephone number, including area code)
 
 þ o
  Large
accelerated
filer oAccelerated
filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ o þ




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##### 



PANDA ETHANOL, INC.
 FORM 10-Q
 FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2008
 INDEX
 PagePART IItem 1.
    

Financial Statements
    
    
    1Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4.
    
    Controls and Procedures
    
    
    27PART IIItem 1.
    
    Legal Proceedings
    
    
    28Item 1A.
    
    Risk Factors
    
    
    28Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 3.
    
    Defaults Upon Senior Securities
    
    
    29Item 6.
    
    Exhibits
    
    
    29Certification of Principal Executive OfficerCertification of Principal Financial OfficerCertification of Chief Executive Officer Pursuant to Section 906Certification of Chief Financial Officer Pursuant to Section 906EX-31.1EX-31.2EX-32.1EX-32.2




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Item 1. Financial Statements
 PANDA ETHANOL, INC.
AND SUBSIDIARIES
(A Development Stage Enterprise)
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (UNAUDITED)
 December 31,
    
    
    September 30,2007
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,127,913
    
    
    $
    252,115Accounts receivable
    
    
    353,516
    
    
    
    217,414Accounts receivable from former parent
    
    
    4,754
    
    
    
    11,350Inventories
    
    
    58,719
    
    
    
    204,412Prepaid expenses and other current assets
    
    
    660,054
    
    
    
    623,593Land under contract for sale
    
    
    
    
    
    
    310,000Financial derivatives
    
    
    611,450
    
    
    
    Total current assets
    
    
    2,816,406
    
    
    
    1,618,884Restricted cash and cash equivalents
    
    
    37,464,207
    
    
    
    28,496,518Property, plant and equipment:Construction in progress
    
    
    184,494,094
    
    
    
    213,921,625Land
    
    
    650,000
    
    
    
    Furniture, fixtures and equipment
    
    
    2,464,045
    
    
    
    3,867,200Accumulated depreciation
    
    
    (87,562
    )
    
    
    (386,777
    )Total property, plant and equipment, net
    
    
    187,520,577
    
    
    
    217,402,048Deposits
    
    
    965,575
    
    
    
    965,575Deferred income taxes
    
    
    486,000
    
    
    
    908,000Debt issuance costs, net of accumulated amortization
of $1,799,865 and $2,652,634 at December 31, 2007
and September 30, 2008, respectively
    
    
    7,623,227
    
    
    
    7,335,958Total assets
    
    $
    236,875,992
    
    
    $
    256,726,983LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts
payable and accrued liabilities 
property, plant and equipment
    
    $
    10,669,525
    
    
    $
    17,924,073Proceeds from contractor letter of credit
    
    
    
    
    
    
    16,219,377Accounts payable and accrued liabilities  operating expenses
    
    
    4,664,110
    
    
    
    3,332,767Accounts payable to former parent
    
    
    802,401
    
    
    
    469,434Current portion of financial derivatives
    
    
    820,177
    
    
    
    1,166,219Current portion of long-term debt
    
    
    
    
    
    
    145,896,999Current portion of capital lease obligations
    
    
    197,499
    
    
    
    191,726Accrued interest and letter of credit fees
    
    
    989,883
    
    
    
    2,406,729Total current liabilities
    
    
    18,143,595
    
    
    
    187,607,324Financial derivatives
    
    
    4,134,969
    
    
    
    Long-term debt
    
    
    141,596,623
    
    
    
    Long-term debt to former parent
    
    
    
    
    
    
    1,555,697Capital lease obligations
    
    
    873,783
    
    
    
    727,864Other noncurrent liabilities
    
    
    486,000
    
    
    
    908,000Commitments and contingencies (Notes 3, 5, 6 and 9)Temporary equity  payable to former parent
    
    
    4,301,558
    
    
    
    4,301,558Shareholders equity:Preferred stock, par value $.001; 100,000,000 shares
authorized; none issued and outstanding
    
    
    
    
    
    
    Common stock, par value $.001; 250,000,000 shares authorized;
31,066,659 and 31,770,193 shares issued and outstanding
at December 31, 2007 and September 30, 2008, respectively
    
    
    31,067
    
    
    
    31,770Additional contributed capital
    
    
    104,777,406
    
    
    
    106,729,948Accumulated other comprehensive loss
    
    
    (1,875,385
    )
    
    
    (3,818,729
    )Deficit accumulated during the development stage
    
    
    (35,593,624
    )
    
    
    (41,316,449
    )Total shareholders equity
    
    
    67,339,464
    
    
    
    61,626,540Total liabilities and shareholders equity
    
    $
    236,875,992
    
    
    $
    256,726,983
  1




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PANDA ETHANOL, INC.
AND SUBSIDIARIES
(A Development Stage Enterprise)
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2008,
AND FOR THE PERIOD FROM INCEPTION THROUGH SEPTEMBER 30, 2008
 (UNAUDITED)
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,
    
    
    Inception Through2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    September 30, 2008Development and administrative expenses:Development and administrative expenses allocated from former parent
    
    $
    420,169
    
    
    $
    385,730
    
    
    $
    726,866
    
    
    $
    1,277,752
    
    
    $
    14,833,591Other development and administrative expenses
    
    
    3,898,980
    
    
    
    3,986,148
    
    
    
    13,380,513
    
    
    
    10,031,180
    
    
    
    36,879,380Provision for impairment of land and development projects
    
    
    2,844,000
    
    
    
    340,000
    
    
    
    2,844,000
    
    
    
    340,000
    
    
    
    3,414,842Total development and administrative expenses
    
    
    7,163,149
    
    
    
    4,711,878
    
    
    
    16,951,379
    
    
    
    11,648,932
    
    
    
    55,127,813Other expense (income):Interest income
    
    
    (1,038,486
    )
    
    
    (91,277
    )
    
    
    (4,242,438
    )
    
    
    (477,930
    )
    
    
    (9,030,755
    )Interest expense and letter of credit fees
    
    
    196,235
    
    
    
    66,551
    
    
    
    2,536,338
    
    
    
    204,404
    
    
    
    5,939,929Amortization of debt issuance costs
    
    
    6,415
    
    
    
    
    
    
    
    206,779
    
    
    
    
    
    
    
    478,771Depreciation
    
    
    21,102
    
    
    
    112,854
    
    
    
    53,163
    
    
    
    299,216
    
    
    
    386,777Provision for impairment of investments available for sale
    
    
    220,000
    
    
    
    
    
    
    
    220,000
    
    
    
    
    
    
    
    875,000Gain on settlement of forward contracts
    
    
    
    
    
    
    (222,525
    )
    
    
    
    
    
    
    (830,976
    )
    
    
    (1,140,576
    )Change in fair value of financial derivatives
    
    
    (5,293,000
    )
    
    
    (1,190,092
    )
    
    
    (1,890,000
    )
    
    
    (5,120,821
    )
    
    
    (11,320,510
    )Total other expense (income)
    
    
    (5,887,734
    )
    
    
    (1,324,489
    )
    
    
    (3,116,158
    )
    
    
    (5,926,107
    )
    
    
    (13,811,364
    )Net loss
    
    $
    1,275,415
    
    
    $
    3,387,389
    
    
    $
    13,835,221
    
    
    $
    5,722,825
    
    
    $
    41,316,449Net loss
per common share 
basic and dilutive:Net loss per common share
    
    $
    0.04
    
    
    $
    0.11
    
    
    $
    0.45
    
    
    $
    0.18Weighted average common shares outstanding  basic and dilutive
    
    
    31,066,659
    
    
    
    31,660,152
    
    
    
    31,066,659
    
    
    
    31,448,696
  2




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PANDA ETHANOL, INC.
AND SUBSIDIARIES
(A Development Stage Enterprise)
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2008,
AND FOR THE PERIOD FROM INCEPTION THROUGH SEPTEMBER 30, 2008
 (UNAUDITED)
 Nine Months Ended September 30,
    
    
    Inception Through2007
    
    
    2008
    
    
    September 30, 2008Operating activities:Net loss
    
    $
    (13,835,221
    )
    
    $
    (5,722,825
    )
    
    $
    (41,316,449
    )Adjustments to reconcile net loss to
net cash used in operating activities:Operating expenses contributed by former parent
    
    
    272,678
    
    
    
    
    
    
    
    103,993Provision for impairment of land and
development projects
    
    
    2,844,000
    
    
    
    340,000
    
    
    
    3,414,842Provision for impairment of investments
available for sale
    
    
    220,000
    
    
    
    
    
    
    
    875,000Directors fees paid with common stock
    
    
    
    
    
    
    69,743
    
    
    
    69,743Compensation expense resulting from issuance
of stock options
    
    
    
    
    
    
    195,834
    
    
    
    195,834Interest cost added to debt principal
    
    
    3,808,155
    
    
    
    
    
    
    
    7,164,623Amortization of debt issuance costs
    
    
    206,779
    
    
    
    
    
    
    
    478,771Depreciation
    
    
    53,163
    
    
    
    299,216
    
    
    
    386,777Change in fair value of financial derivatives
    
    
    (1,890,000
    )
    
    
    (5,120,821
    )
    
    
    (11,320,510
    )Deferred tax benefit
    
    
    (232,000
    )
    
    
    (422,000
    )
    
    
    (908,000
    )(Increase) decrease in accounts receivable
    
    
    
    
    
    
    136,102
    
    
    
    (217,414
    )(Increase) decrease in accounts receivable
from former parent
    
    
    32,265
    
    
    
    (6,596
    )
    
    
    (11,350
    )Increase in inventories
    
    
    
    
    
    
    (145,693
    )
    
    
    (204,412
    )(Increase) decrease in prepaid expenses and
other current assets
    
    
    815,996
    
    
    
    36,461
    
    
    
    (623,593
    )Increase (decrease) in accounts payable and
accrued liabilities  operating expenses
    
    
    836,577
    
    
    
    (1,331,343
    )
    
    
    3,332,767Increase in accounts payable to former parent
    
    
    271,989
    
    
    
    1,354,701
    
    
    
    2,425,324Increase in accrued interest and letter of
credit fees
    
    
    50,314
    
    
    
    1,416,846
    
    
    
    2,406,729Increase in other noncurrent liabilities
    
    
    232,000
    
    
    
    422,000
    
    
    
    908,000Net cash used in operating activities
    
    
    (6,313,305
    )
    
    
    (8,478,375
    )
    
    
    (32,839,325
    )Investing activities:Purchases of investments available for sale
    
    
    (11,000,000
    )
    
    
    
    
    
    
    (94,025,000
    )Sales of investments available for sale
    
    
    24,825,000
    
    
    
    
    
    
    
    93,150,000(Increase) decrease in restricted cash and
cash equivalents
    
    
    78,667,025
    
    
    
    8,967,689
    
    
    
    (28,496,518
    )Decrease in restricted short-term investments
    
    
    12,495,335
    
    
    
    
    
    
    
    Additions to property, plant and equipment
    
    
    (92,564,621
    )
    
    
    (18,559,627
    )
    
    
    (195,690,874
    )Increase in deposits
    
    
    (1,198,949
    )
    
    
    
    
    
    
    (965,575
    )Proceeds from contractor letter of credit
    
    
    
    
    
    
    16,219,377
    
    
    
    16,219,377Net cash provided by (used in) investing
activities
    
    
    11,223,790
    
    
    
    6,627,439
    
    
    
    (209,808,590
    )Financing activities:Capital contributions from former parent
    
    
    
    
    
    
    
    
    
    
    16,133,464Capital distributions to former parent
    
    
    
    
    
    
    
    
    
    
    (5,480,712
    )Temporary equity advanced from former parent
    
    
    
    
    
    
    
    
    
    
    4,301,558Issuance of common stock to former parent
    
    
    
    
    
    
    
    
    
    
    2,859,354Issuance of common stock to non-affiliates
    
    
    
    
    
    
    
    
    
    
    90,924,152Repayment of capital lease obligations
    
    
    
    
    
    
    (151,692
    )
    
    
    (641,524
    )Issuance of long-term debt and financial
derivative
    
    
    
    
    
    
    136,633
    
    
    
    143,236,633Issuance of long-term debt to former parent
    
    
    
    
    
    
    1,555,697
    
    
    
    1,555,697Debt issuance costs
    
    
    
    
    
    
    (565,500
    )
    
    
    (9,988,592
    )Net cash provided by (used in) financing
activities
    
    
    
    
    
    
    975,138
    
    
    
    242,900,030Increase (decrease) in cash and cash equivalents
    
    
    4,910,485
    
    
    
    (875,798
    )
    
    
    252,115Cash and cash equivalents, beginning of period
    
    
    713,529
    
    
    
    1,127,913
    
    
    
    Cash and cash equivalents, end of period
    
    $
    5,624,014
    
    
    $
    252,115
    
    
    $
    252,115Noncash investing and financing activities:Property, plant and equipment costs accrued
    
    $
    10,827,366
    
    
    $
    17,924,073
    
    
    $
    17,924,073Property, plant and equipment acquired under
capital leases
    
    
    
    
    
    
    
    
    
    
    1,561,114Interest cost accrued to long-term debt
principal
    
    
    3,808,155
    
    
    
    4,163,742
    
    
    
    11,328,365Capital contributions from former parent:By reduction of accounts payable
    
    
    268,222
    
    
    
    
    
    
    
    268,222For operating expenses
    
    
    272,678
    
    
    
    
    
    
    
    103,993Expenses financed under services agreement
with former parent
    
    
    
    
    
    
    1,282,688
    
    
    
    2,085,089Common stock issued under services agreement
with former parent
    
    
    
    
    
    
    1,687,668
    
    
    
    1,687,668Common stock issued under services agreement
with directors
    
    
    
    
    
    
    69,743
    
    
    
    69,743
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PANDA ETHANOL, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
 NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
 For the Three Months and Nine Months Ended September 30, 2007 and 2008
And For the Period from Inception (November 1, 2004) through September 30, 2008
 (Unaudited)
 1. ORGANIZATION AND BASIS OF PRESENTATION
   Development Stage Enterprise 
 Liquidity and Going Concern Considerations
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2. SIGNIFICANT ACCOUNTING POLICIES
 Use of Estimates
 Condensed Footnote Disclosures
 Stock-Based Compensation .
 Adoption of New Accounting Pronouncement
  New Accounting Standards . 
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3. ETHANOL PROJECTS
   
    
    failure to complete the Hereford Facility within 180 days of the
guaranteed substantial completion date of December 16, 2007 set forth
in the EPC Contract;
    
    failure to perform its obligations in a manner sufficient and adequate
to successfully achieve completion of the Hereford Facility in
compliance with the terms of the EPC Contract; and
    
    failure to pay scheduled liquidated damages due to Panda Hereford.
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4. RELATED PARTY TRANSACTIONS
  8




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5. LONG-TERM DEBT
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
    
    to cooperate in good faith to reach an agreement regarding the
restructuring of Panda Herefords obligations by September 30, 2008;
    
    to provide or support the provision of certain protections for the
lenders in the case of a bankruptcy event with respect to Panda
Hereford; and
    
    that the applicable margin under the financing agreement, which is an
amount added to the base interest rate and the default interest rate,
was increased by 50 basis points to 4.25%.
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.
   11




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6. PURCHASE AND SALES COMMITMENTS
    7. STOCK-BASED COMPENSATION
   12




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8. FAIR VALUE MEASUREMENTS
  
    
    Level 1  Quoted prices in active markets for identical assets or
liabilities.
    
    Level 2  Inputs other than Level 1 that are observable, either
directly or indirectly, such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term of the
assets or liabilities.
    
    Level 3  Unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the assets or
liabilities.
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Level 1
    
    Level 2
    
    Level 3
    
    TotalFinancial derivative liabilities  current
    
    $
    
    
    
    $
    
    
    
    $
    1,166
    
    
    $
    1,166
  :
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Beginning balance
    
    $
    2,873Total gains or losses (realized/unrealized)Included in earnings
    
    
    (3,873
    )Included in other comprehensive income
    
    
    Purchases, issuances and settlements
    
    
    Transfers in and/or out of Level 3
    
    
    2,166Ending balance
    
    $
    1,166The amount of total gains or losses for the period
included in earnings attributable to the change
in unrealized gains or losses relating to liabilities
still existing at September 30, 2008 reported in
change in fair value of financial derivatives
    
    $
    3,873
 9. SUBSEQUENT EVENTS
   
    
    to provide or support the provision of certain protections for the
lenders in the case of a bankruptcy event with respect to Panda
Hereford;
    
    to submit, concurrently with each notice of borrowing and each
construction draw request, a revised budget and, semimonthly, an
updated timeline for completion of construction and start-up of
activities;
    
    that it will not pay management fees to the Company in excess of
$400,000 in any calendar month, which management fees, when paid, have
been $275,000 per month; and
    
    that the applicable margin under the financing agreements, which is an
amount added to the base interest rate and the default interest rate,
was increased by 150 basis points to 5.75%.
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nd
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis of our financial condition and results of operations
should be read in conjunction with our financial statements and the related notes to those
statements included elsewhere in this quarterly report on Form 10-Q . In this quarterly report on
Form 10-Q, the words Panda Ethanol refer to Panda Ethanol, Inc. and its subsidiaries, unless
otherwise stated or the context otherwise requires. Panda Ethanol is a Nevada corporation. On
November 6, 2006, Panda Ethanol, Inc. (a Delaware corporation), which is referred to in this
quarterly report as Panda Ethanol-Delaware, merged with and into Cirracor, Inc., a Nevada
corporation, which we refer to as Cirracor. The surviving Nevada corporation after the merger
changed its name to Panda Ethanol, Inc. In this quarterly report on Form 10-Q , the words
Company, we, our, ours and us refer to the surviving company after the merger and its
subsidiaries, unless otherwise stated or the context otherwise requires.
 Forward-Looking Statements
   
    
    the time, cost and ability to complete construction of our Hereford facility;
    
    our ability to draw additional funds under the Hereford senior credit facility;
    
    issues arising in connection with the development and construction of our projects,
including those related to permits, easements, site conditions, workmanship, process
engineering and conflicts of interest;
    
    the margin between ethanol and corn prices;
    
    the projected growth or contraction of the ethanol market in which we will operate;
    
    changes in or elimination of laws, tariffs, trade or other controls or enforcement practices such as:
 
    
    national, state or local energy policy;
    
    federal ethanol tax incentives;
    
    the renewable fuel standard and other legislation mandating the usage of ethanol or other oxygenate additives; and
    
    environmental laws and regulations applicable to our operations and the enforcement thereof;
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
    
    fluctuations in the market price of ethanol and ethanol co-products;
    
    our ability to obtain the necessary capital to finance our operations and initiatives;
    
    availability and costs of raw materials, particularly corn;
    
    our ability to generate free cash flow to invest in our business and service our indebtedness;
    
    limitations, restrictions and conditions contained in the instruments and agreements
governing our and our subsidiaries indebtedness, including those conditions related to
maintenance of a minimum contingency obligation and receipt of insurance proceeds;
    
    risks related to hedging decisions, including whether or not to enter into hedging
arrangements and the possibility of financial losses related to hedging arrangements;
    
    risks related to defects in material, workmanship or design which may cause delays in the
commencement of operations or failure to meet the design performance criteria of our
Hereford facility; and
    
    risks related to diverting managements attention from ongoing business operations.
 Overview
     Recent Events
 Termination of EPC Contract
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
    
    failure to complete the Hereford facility within 180 days of the guaranteed
substantial completion date of December 16, 2007 set forth in the EPC Contract;
    
    failure to perform its obligations in a manner sufficient and adequate to
successfully achieve completion of the Hereford facility in compliance with the terms of
the EPC Contract; and
    
    failure to pay scheduled liquidated damages due to Panda Hereford.
   Financing Transactions
   
    
    to cooperate in good faith to reach an agreement regarding the restructuring of Panda
Herefords obligations by September 30, 2008;
    
    to provide or support the provision of certain protections for the lenders in the
case of a bankruptcy event with respect to Panda Hereford; and
 20




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
    
    that the applicable margin under the financing agreements, which is an amount added
to the base interest rate and the default interest rate, was increased by 50 basis
points to 4.25%.
   
    
    to provide or support the provision of certain protections for the lenders in the
case of a bankruptcy event with respect to Panda Hereford;
    
    to submit, concurrently with each notice of borrowing and each construction draw
request, a revised budget and, semimonthly, an updated timeline for completion of
construction and start-up of activities;
    
    that it will not pay management fees to Panda Ethanol in excess of $400,000 in any
calendar month, which management fees, when paid, have been $275,000 per month; and
    
    that the applicable margin under the financing agreements, which is an amount added
to the base interest rate and the default interest rate, was increased by 150 basis
points to 5.75%.
      21




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Summary of Critical Accounting Policies and Estimates
  Allocation of Expenses from the Former Parent
  22




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Results of Operations
 For the three months ended September 30, 2007 as compared to the three months ended September 30,
2008
      For the nine months ended September 30, 2007 as compared to the nine months ended September 30,
2008
  23




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Liquidity and Capital Resources
   24




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25




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26




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Contractual Commitments
  Off-Balance
Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   27




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  nd
 
 Item 1A. Risk Factors
 Adverse capital and credit market conditions may significantly affect our ability to meet liquidity
needs, access to capital and cost of capital.
   28




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   
 Item 3. Defaults Upon Senior Securities
  
 Item 6. Exhibits
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger dated May 18,
2006, by and among Cirracor, Panda Ethanol,
Inc., and Grove Panda Investments, LLC,
filed as Exhibit 2.1 to our Current Report
on Form 8-K, filed on November 13, 2006 and
incorporated by reference herein.2.2
    
    First Amendment to Agreement and Plan of
Merger dated June 7, 2006, by and among
Cirracor, Panda Ethanol, Inc., and Grove
Panda Investments, LLC, filed as Exhibit 2.2
to our Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.3.1
    
    Amended and Restated Articles of
Incorporation, filed as Exhibit 3.1 to our
Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.
 29




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##### Table of Contents



ExhibitNumber
    
    Description3.2
    
    Amended and Restated Bylaws of Panda
Ethanol, Inc., filed as Exhibit 3.2 to our
Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.3.3
    
    Certificate of Designations of Series A
Convertible Preferred Stock, dated as of
October 7, 2008, filed as Exhibit 3.1 to our
Current Report on Form 8-K filed on October
10, 2008, and incorporated by reference
herein.4.1
    
    Amended and Restated Articles of
Incorporation, filed as Exhibit 3.1 to our
Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.4.2
    
    Amended and Restated Bylaws of Panda
Ethanol, Inc., filed as Exhibit 3.2 to our
Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.4.3
    
    Certificate of Designations of Series A
Convertible Preferred Stock, dated as of
October 7, 2008, filed as Exhibit 3.1 to our
Current Report on Form 8-K filed on October
10, 2008, and incorporated by reference
herein.4.4
    
    Registration Rights Agreement, dated as of
June 7, 2006, by and among Panda Ethanol,
Inc., Panda Energy International, Inc. and
the purchasers named therein, filed as
Exhibit 4.3 to our Current Report on Form
8-K, filed on November 13, 2006 and
incorporated by reference herein.4.5
    
    Registration Rights Agreement, dated as of
November 6, 2006, by and among Panda
Ethanol, Inc. and Grove Panda Investments,
LLC, filed as Exhibit 4.4 to our Current
Report on Form 8-K, filed on November 13,
2006 and incorporated by reference herein.4.6
    
    First Amendment to Registration Rights
Agreement as of November 13, 2006, among
Panda Ethanol, Inc., Panda Energy
International, Inc. and the several
purchasers signatory therein, filed as
Exhibit 10.1 to our Current Report on Form
8-K, filed on November 17, 2006 and
incorporated by reference herein.4.7
    
    Registration Rights Agreement, dated as of
December 1, 2006, by and among Panda
Ethanol, Inc., Panda Energy International,
Inc. and the several purchasers signatory
thereto, filed as Exhibit 4.1 to our Current
Report on Form 8-K, filed on December 4,
2006 and incorporated by reference herein.4.8
    
    Registration Rights Agreement, dated as of
November 9, 2007, by and between Panda
Ethanol, Inc. and Panda Energy
International, Inc., filed as Exhibit 10.2
to our Current Report on Form 8-K, filed on
November 15, 2007 and incorporated by
reference herein.4.9
    
    First Amendment to Registration Rights
Agreement, dated as of October 7, 2008, by
and among Panda Ethanol, Inc., Panda Energy
International, Inc. and the holders
signatory thereto, filed as Exhibit 10.6 to
our Current Report on Form 8-K, filed on
October 10, 2008 and incorporated by
reference herein.10.1
    
    Waiver to Depositary and Disbursement Agreement, dated as of September 5,
2008, by and among Panda Hereford Ethanol, L.P., Société Générale and the
lenders signatory thereto, filed as Exhibit 10.1 to our Current Report on
Form 8-K, filed on September 11, 2008 and incorporated by reference
herein31.1
    
    Certification of Principal Executive Officer.
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ExhibitNumber
    
    Description31.2
    
    Certification of Principal Financial Officer.32.1
    
    Certification of Chief Executive Officer
Pursuant to Section 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer
Pursuant to Section 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 31




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##### Table of Contents



SIGNATURES
  PANDA ETHANOL, INC.Date: November 14, 2008
    /s/ NATASHA RAYNatasha Ray, Chief Financial Officer and Treasurer(Principal financial officer duly authorized to
sign on behalf of Registrant) 32




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger dated May 18,
2006, by and among Cirracor, Panda Ethanol,
Inc., and Grove Panda Investments, LLC,
filed as Exhibit 2.1 to our Current Report
on Form 8-K, filed on November 13, 2006 and
incorporated by reference herein.2.2
    
    First Amendment to Agreement and Plan of
Merger dated June 7, 2006, by and among
Cirracor, Panda Ethanol, Inc., and Grove
Panda Investments, LLC, filed as Exhibit 2.2
to our Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.3.1
    
    Amended and Restated Articles of
Incorporation, filed as Exhibit 3.1 to our
Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.3.2
    
    Amended and Restated Bylaws of Panda
Ethanol, Inc., filed as Exhibit 3.2 to our
Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.3.3
    
    Certificate of Designations of Series A
Convertible Preferred Stock, dated as of
October 7, 2008, filed as Exhibit 3.1 to our
Current Report on Form 8-K filed on October
10, 2008, and incorporated by reference
herein.4.1
    
    Amended and Restated Articles of
Incorporation, filed as Exhibit 3.1 to our
Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.4.2
    
    Amended and Restated Bylaws of Panda
Ethanol, Inc., filed as Exhibit 3.2 to our
Current Report on Form 8-K, filed on
November 13, 2006 and incorporated by
reference herein.4.3
    
    Certificate of Designations of Series A
Convertible Preferred Stock, dated as of
October 7, 2008, filed as Exhibit 3.1 to our
Current Report on Form 8-K filed on October
10, 2008, and incorporated by reference
herein.4.4
    
    Registration Rights Agreement, dated as of
June 7, 2006, by and among Panda Ethanol,
Inc., Panda Energy International, Inc. and
the purchasers named therein, filed as
Exhibit 4.3 to our Current Report on Form
8-K, filed on November 13, 2006 and
incorporated by reference herein.4.5
    
    Registration Rights Agreement, dated as of
November 6, 2006, by and among Panda
Ethanol, Inc. and Grove Panda Investments,
LLC, filed as Exhibit 4.4 to our Current
Report on Form 8-K, filed on November 13,
2006 and incorporated by reference herein.4.6
    
    First Amendment to Registration Rights
Agreement as of November 13, 2006, among
Panda Ethanol, Inc., Panda Energy
International, Inc. and the several
purchasers signatory therein, filed as
Exhibit 10.1 to our Current Report on Form
8-K, filed on November 17, 2006 and
incorporated by reference herein.4.7
    
    Registration Rights Agreement, dated as of
December 1, 2006, by and among Panda
Ethanol, Inc., Panda Energy International,
Inc. and the several purchasers signatory
thereto, filed as Exhibit 4.1 to our Current
Report on Form 8-K, filed on December 4,
2006 and incorporated by reference herein.4.8
    
    Registration Rights Agreement, dated as of
November 9, 2007, by and between Panda
Ethanol, Inc. and Panda Energy
International, Inc., filed as Exhibit 10.2
to our Current Report on Form 8-K, filed on
November 15, 2007 and incorporated by
reference herein.
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ExhibitNumber
    
    Description4.9
    
    First Amendment to Registration Rights
Agreement, dated as of October 7, 2008, by
and among Panda Ethanol, Inc., Panda Energy
International, Inc. and the holders
signatory thereto, filed as Exhibit 10.6 to
our Current Report on Form 8-K, filed on
October 10, 2008 and incorporated by
reference herein.10.1
    
    Waiver to Depositary and Disbursement Agreement, dated as of September 5,
2008, by and among Panda Hereford Ethanol, L.P., Société Générale and the
lenders signatory thereto, filed as Exhibit 10.1 to our Current Report on
Form 8-K, filed on September 11, 2008 and incorporated by reference
herein31.1
    
    Certification of Principal Executive Officer.31.2
    
    Certification of Principal Financial Officer.32.1
    
    Certification of Chief Executive Officer
Pursuant to Section 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer
Pursuant to Section 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 34