##### 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: June 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
    
    (I.R.S. Employerincorporation or organization)
    
    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 o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



PANDA ETHANOL, INC.
FORM 10-Q
FOR THE FISCAL QUARTER ENDED JUNE 30, 2008
INDEX
 PagePART IItem 1. Financial Statements
    
    
    1Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23PART IIItem 1. Legal Proceedings
    
    
    24Item 1A. Risk Factors
    
    
    24Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3. Defaults Upon Senior Securities
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    25Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    26Form of Nonqualified Stock Option AgreementAmended and Restated Loan AgreementCertification of Principal Executive OfficerCertification of Principal Financial OfficerCertification of Chief Executive Officer Pursuant to Section 906Certification of Chief Financial Officer Pursuant to Section 906




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 PANDA ETHANOL, INC.
AND SUBSIDIARIES
(A Development Stage Enterprise)
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (UNAUDITED)
 December 31,
    
    
    June 30,2007
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,127,913
    
    
    $
    544,066Accounts receivable
    
    
    353,516
    
    
    
    207,613Accounts receivable from former parent
    
    
    4,754
    
    
    
    22,392Inventories
    
    
    58,719
    
    
    
    207,979Prepaid expenses and other current assets
    
    
    660,054
    
    
    
    671,047Financial derivatives
    
    
    611,450
    
    
    
    Total current assets
    
    
    2,816,406
    
    
    
    1,653,097Restricted cash and cash equivalents
    
    
    37,464,207
    
    
    
    18,789,080Property, plant and equipment:Construction in progress
    
    
    184,494,094
    
    
    
    207,978,433Land
    
    
    650,000
    
    
    
    650,000Furniture, fixtures and equipment
    
    
    2,464,045
    
    
    
    3,743,444Accumulated depreciation
    
    
    (87,562
    )
    
    
    (273,923
    )Total property, plant and equipment, net
    
    
    187,520,577
    
    
    
    212,097,954Deposits
    
    
    965,575
    
    
    
    965,575Deferred income taxes
    
    
    486,000
    
    
    
    806,000Debt issuance costs, net of accumulated amortization
of $1,799,865 and $2,383,306 at December 31, 2007
and June 30, 2008, respectively
    
    
    7,623,227
    
    
    
    7,039,786Total assets
    
    $
    236,875,992
    
    
    $
    241,351,492LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities 
property, plant and equipment
    
    $
    10,669,525
    
    
    $
    17,127,808Accounts payable and accrued liabilities  operating expenses
    
    
    4,664,110
    
    
    
    3,195,248Accounts payable to former parent
    
    
    802,401
    
    
    
    434,671Current portion of financial derivatives
    
    
    820,177
    
    
    
    1,562,572Current portion of capital lease obligations
    
    
    197,499
    
    
    
    186,088Accrued interest and letter of credit fees
    
    
    989,883
    
    
    
    2,343,371Total current liabilities
    
    
    18,143,595
    
    
    
    24,849,758Financial derivatives
    
    
    4,134,969
    
    
    
    793,739Long-term debt
    
    
    141,596,623
    
    
    
    144,323,574Long-term debt to former parent
    
    
    
    
    
    
    1,000,000Capital lease obligations
    
    
    873,783
    
    
    
    777,963Other noncurrent liabilities
    
    
    486,000
    
    
    
    806,000Commitments and contingencies (Notes 3, 5 and 6)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 31,488,977 shares issued and outstanding
at December 31, 2007 and June 30, 2008, respectively
    
    
    31,067
    
    
    
    31,489Additional contributed capital
    
    
    104,777,406
    
    
    
    106,215,200Accumulated other comprehensive loss
    
    
    (1,875,385
    )
    
    
    (3,818,729
    )Deficit accumulated during the development stage
    
    
    (35,593,624
    )
    
    
    (37,929,060
    )Total shareholders equity
    
    
    67,339,464
    
    
    
    64,498,900Total liabilities and shareholders equity
    
    $
    236,875,992
    
    
    $
    241,351,492
  1




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PANDA ETHANOL, INC.
AND SUBSIDIARIES
(A Development Stage Enterprise)
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2008,
AND FOR THE PERIOD FROM INCEPTION THROUGH JUNE 30, 2008
 (UNAUDITED)
 InceptionThree Months Ended June 30,
    
    
    Six Months Ended June 30,
    
    
    Through2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    June 30, 2008Development and administrative expenses:Development and administrative expenses allocated from former parent
    
    $
    172,678
    
    
    $
    385,890
    
    
    $
    306,697
    
    
    $
    892,022
    
    
    $
    14,447,861Other development and administrative expenses
    
    
    5,946,545
    
    
    
    4,062,728
    
    
    
    9,481,533
    
    
    
    6,045,032
    
    
    
    32,893,232Provision for impairment of development projects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,074,842Total development and administrative expenses
    
    
    6,119,223
    
    
    
    4,448,618
    
    
    
    9,788,230
    
    
    
    6,937,054
    
    
    
    50,415,935Other expense (income):Interest income
    
    
    (1,443,693
    )
    
    
    (134,566
    )
    
    
    (3,203,952
    )
    
    
    (386,653
    )
    
    
    (8,939,478
    )Interest expense and letter of credit fees
    
    
    910,199
    
    
    
    75,082
    
    
    
    2,340,103
    
    
    
    137,853
    
    
    
    5,873,378Amortization of debt issuance costs
    
    
    77,562
    
    
    
    
    
    
    
    200,364
    
    
    
    
    
    
    
    478,771Depreciation
    
    
    19,508
    
    
    
    94,532
    
    
    
    32,061
    
    
    
    186,362
    
    
    
    273,923Provision for impairment of investments available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    875,000Gain on settlement of forward contracts
    
    
    
    
    
    
    (204,250
    )
    
    
    
    
    
    
    (608,451
    )
    
    
    (918,051
    )Change in fair value of financial derivatives
    
    
    (973,000
    )
    
    
    (1,561,679
    )
    
    
    3,403,000
    
    
    
    (3,930,729
    )
    
    
    (10,130,418
    )Total other expense (income)
    
    
    (1,409,424
    )
    
    
    (1,730,881
    )
    
    
    2,771,576
    
    
    
    (4,601,618
    )
    
    
    (12,486,875
    )Net loss
    
    $
    4,709,799
    
    
    $
    2,717,737
    
    
    $
    12,559,806
    
    
    $
    2,335,436
    
    
    $
    37,929,060Net loss per common share 
basic and dilutive:Net loss per common share
    
    $
    0.15
    
    
    $
    0.09
    
    
    $
    0.40
    
    
    $
    0.07Weighted average common shares outstanding  basic and dilutive
    
    
    31,066,659
    
    
    
    31,454,599
    
    
    
    31,066,659
    
    
    
    31,341,806
  2




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PANDA ETHANOL, INC.
AND SUBSIDIARIES
(A Development Stage Enterprise)
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2008,
AND FOR THE PERIOD FROM INCEPTION THROUGH JUNE 30, 2008
 (UNAUDITED)
 Six Months Ended June 30,
    
    
    Inception Through2007
    
    
    2008
    
    
    June 30, 2008Operating activities:Net loss
    
    $
    (12,559,806
    )
    
    $
    (2,335,436
    )
    
    $
    (37,929,060
    )Adjustments to reconcile net loss to
net cash used in operating activities:Operating expenses contributed by former parent
    
    
    
    
    
    
    
    
    
    
    103,993Provision for impairment of development projects
    
    
    
    
    
    
    
    
    
    
    3,074,842Provision for impairment of investments available for sale
    
    
    
    
    
    
    
    
    
    
    875,000Directors fees paid with common stock
    
    
    
    
    
    
    46,505
    
    
    
    46,505Compensation expense resulting from issuance of stock options
    
    
    
    
    
    
    97,917
    
    
    
    97,917Interest expense added to debt principal
    
    
    2,460,195
    
    
    
    
    
    
    
    7,164,623Amortization of debt issuance costs
    
    
    200,364
    
    
    
    
    
    
    
    478,771Depreciation
    
    
    32,061
    
    
    
    186,362
    
    
    
    273,923Change in fair value of financial derivatives
    
    
    3,403,000
    
    
    
    (3,930,729
    )
    
    
    (10,130,418
    )Deferred tax benefit
    
    
    
    
    
    
    (320,000
    )
    
    
    (806,000
    )(Increase) decrease in accounts receivable
    
    
    
    
    
    
    145,903
    
    
    
    (207,613
    )(Increase) decrease in accounts receivable from former parent
    
    
    32,265
    
    
    
    (17,638
    )
    
    
    (22,392
    )Increase in inventories
    
    
    
    
    
    
    (149,260
    )
    
    
    (207,979
    )(Increase) decrease in prepaid expenses
    
    
    575,395
    
    
    
    (10,993
    )
    
    
    (671,047
    )Increase (decrease) in accounts payable and
accrued liabilities  operating expenses
    
    
    1,353,609
    
    
    
    (1,468,862
    )
    
    
    3,195,248Increase in accounts payable to former parent
    
    
    358,501
    
    
    
    926,064
    
    
    
    1,996,687Increase in accrued interest and letter of credit fees
    
    
    29,428
    
    
    
    1,353,488
    
    
    
    2,343,371Increase in other noncurrent liabilities
    
    
    
    
    
    
    320,000
    
    
    
    806,000Net cash used in operating activities
    
    
    (4,114,988
    )
    
    
    (5,156,679
    )
    
    
    (29,517,629
    )Investing activities:Purchases of investments available for sale
    
    
    (8,500,000
    )
    
    
    
    
    
    
    (94,025,000
    )Sales of investments available for sale
    
    
    16,700,000
    
    
    
    
    
    
    
    93,150,000(Increase) decrease in restricted cash and cash equivalents
    
    
    43,620,569
    
    
    
    18,675,127
    
    
    
    (18,789,080
    )Decrease in restricted short-term investments
    
    
    12,495,335
    
    
    
    
    
    
    
    Additions to property, plant and equipment
    
    
    (56,325,037
    )
    
    
    (14,995,064
    )
    
    
    (192,126,311
    )Increase in deposits
    
    
    (431,451
    )
    
    
    
    
    
    
    (965,575
    )Net cash provided by (used in) investing activities
    
    
    7,559,416
    
    
    
    3,680,063
    
    
    
    (212,755,966
    )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
    
    
    
    
    
    
    (107,231
    )
    
    
    (597,063
    )Issuance of long-term debt and financial derivative
    
    
    
    
    
    
    
    
    
    
    143,100,000Issuance of long-term debt to former parent
    
    
    
    
    
    
    1,000,000
    
    
    
    1,000,000Debt issuance costs
    
    
    (382,440
    )
    
    
    
    
    
    
    (9,423,092
    )Net cash provided by (used in) financing activities
    
    
    (382,440
    )
    
    
    892,769
    
    
    
    242,817,661Increase (decrease) in cash and cash equivalents
    
    
    3,061,988
    
    
    
    (583,847
    )
    
    
    544,066Cash and cash equivalents, beginning of period
    
    
    713,529
    
    
    
    1,127,913
    
    
    
    Cash and cash equivalents, end of period
    
    $
    3,775,517
    
    
    $
    544,066
    
    
    $
    544,066Noncash investing and financing activities:Property, plant and equipment costs accrued
    
    $
    10,404,008
    
    
    $
    17,127,808
    
    
    $
    17,127,808Property, plant and equipment acquired under capital leases
    
    
    
    
    
    
    
    
    
    
    1,561,114Interest cost accrued to long-term debt principal
    
    
    2,460,195
    
    
    
    2,726,951
    
    
    
    7,164,623Capital contributions from former parent:By reduction of accounts payable
    
    
    268,222
    
    
    
    
    
    
    
    268,222For operating expenses
    
    
    
    
    
    
    
    
    
    
    103,993Expenses financed under services agreement with former parent
    
    
    
    
    
    
    885,267
    
    
    
    1,687,668Common stock issued under services agreement with former parent
    
    
    
    
    
    
    1,293,794
    
    
    
    1,293,794Common stock issued under services agreement with directors
    
    
    
    
    
    
    46,505
    
    
    
    46,505
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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 Six Months Ended June 30, 2007 and 2008
And For the Period from Inception (November 1, 2004) through June 30, 2008
 (Unaudited)
 1. ORGANIZATION AND BASIS OF PRESENTATION
   Development Stage Enterprise 
 Liquidity and Going Concern Considerations
  4




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2. SIGNIFICANT ACCOUNTING POLICIES
 Use of Estimates
 Condensed Footnote Disclosures
 Stock-Based Compensation .
 Adoption of New Accounting Pronouncement
 6




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New Accounting Standards . 
  3. ETHANOL PROJECTS
   7




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4. RELATED PARTY TRANSACTIONS
   8




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5. LONG-TERM DEBT
   9




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.
   6. PURCHASE AND SALES COMMITMENTS
   11




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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.
     13




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Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalFinancial derivative liabilities  current
    
    $
    
    
    
    $
    1,563
    
    
    $
    
    
    
    $
    1,563Financial derivative liabilities  noncurrent
    
    $
    
    
    
    $
    794
    
    
    $
    
    
    
    $
    794
  :
 Beginning balance
    
    $
    2,873Total gains or losses (realized/unrealized)Included in earnings
    
    
    (2,873
    )Included in other comprehensive income
    
    
    Purchases, issuances and settlements
    
    
    Transfers in and/or out of Level 3
    
    
    Ending balance
    
    $
    The 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 June 30, 2008 reported in
change in fair value of financial derivatives
    
    $
    2,873
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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:
 o
    
    national, state or local energy policy;o
    
    federal ethanol tax incentives;o
    
    the renewable fuel standard and other legislation
mandating the usage of ethanol or other oxygenate additives; ando
    
    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;
and
    
    risks related to diverting managements attention from ongoing business
operations.
 Overview
      16




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Summary of Critical Accounting Policies and Estimates
 
 Allocation of Expenses from the Former Parent
   18




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Results of Operations
 For the three months ended June 30, 2007 as compared to the three months ended June 30, 2008
     For the six months ended June 30, 2007 as compared to the six months ended June 30, 2008
    19




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Liquidity and Capital Resources
    20




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Hereford Facility Project Financing
  22




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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
   Changes in Internal Control over Financial Reporting
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 Panda
Hereford has been unable to obtain a draw under the senior credit
facility at the end of June or July to pay project expenses,
and may be unable to do so in the future.
  Management of Panda Hereford is currently exploring its options with respect to the filing of a
plan of reorganization under the U.S. Bankruptcy Code or other use of the protections afforded by
the U.S. Bankruptcy Code.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  24




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Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  1.
    
    to elect five directors to serve for a term of one year or until their
respective successors are elected and qualified; and2.
    
    to ratify the appointment of Deloitte & Touche LLP as the Companys
independent registered public accounting firm for 2008.
   Number of
    
    Number ofName
    
    Votes Cast For
    
    Votes WithheldRobert W. Carter
    
    
    17,772,156
    
    
    
    0Todd W. Carter
    
    
    17,772,156
    
    
    
    0G. Michael Boswell
    
    
    17,772,156
    
    
    
    0Donnell Brown
    
    
    17,772,156
    
    
    
    0Philip D. English
    
    
    17,772,156
    
    
    
    0
  For
    
    
    17,772,156Against
    
    
    0Abstain
    
    
    0Broker Non-Vote
    
    
    0
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Item 5. Other Information
  
    
    increase the principal amount which may, in the aggregate, be outstanding at
one time from $1,000,000 to $1,700,000;
    
    reduce the minimum permissible amount of any distribution thereunder from
$250,000 to $100,000;
    
    change the maturity date from November 1, 2009 to November 1, 2010;
    
    require the Company to make mandatory prepayment of outstanding principal in an
amount equal to the proceeds received from Panda Energy as a purchaser in an
offering of any class of the Companys equity securities in which it receives
aggregate gross proceeds of at least $1,700,000;
    
    provide that, if the Company defaults in its payment obligation at maturity,
Panda Energy has the option to convert the amount outstanding on its note into
such number of shares of common stock of the Company, par value $0.001 per share,
as shall be equal to (x) the amount outstanding on the note divided by (y) the
fair market value of the common stock on the maturity date; and
    
    provide a method for determining fair market value.
  
 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.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.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
 26




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##### Table of Contents



ExhibitNumber
    
    Descriptionon Form 8-K, filed on
November 13, 2006 and incorporated by reference herein.4.3
    
    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.4.4
    
    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.4.5
    
    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.4.6
    
    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.4.7
    
    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.10.1
    
    Form of Nonqualified Stock Option Agreement under the Panda
Ethanol, Inc. 2006 Amended and Restated Long-Term Incentive Plan.10.2
    
    Amended and Restated Loan Agreement, dated as of July 29, 2008, by
and among Panda Ethanol, Inc. and Panda Energy International, Inc.10.3
    
    Second Amendment to Financing Agreement and Depositary and
Disbursement Agreement, dated as of April 2, 2008, by and among
Panda Hereford Ethanol, L.P., Société Générale and the lenders
named therein, filed as Exhibit 10.1 to our Current Report on Form
8-K, filed on April 8, 2008 and incorporated by reference herein.10.4
    
    Sponsor Support Agreement, dated as of April 2, 2008, by and among
Panda Ethanol, Inc., Panda Hereford Ethanol, L.P. and Société
Générale, filed as Exhibit 10.2 to our Current Report on Form 8-K,
filed on April 8, 2008 and incorporated by reference herein.31.1
    
    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.
 27




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##### Table of Contents



SIGNATURES
  PANDA ETHANOL, INC.Date: August 19, 2008
    /s/ NATASHA RAYNatasha Ray, Chief Financial Officer and Treasurer(Principal financial officer duly authorized to sign
on behalf of Registrant) 28




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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.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
    
    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.4.4
    
    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.4.5
    
    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.4.6
    
    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.4.7
    
    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.10.1
    
    Form of Nonqualified Stock Option Agreement under the Panda
Ethanol, Inc. 2006 Amended and Restated Long-Term Incentive Plan.10.2
    
    Amended and Restated Loan Agreement, dated as of July 29, 2008, by
and among Panda Ethanol, Inc. and Panda Energy International, Inc.10.3
    
    Second Amendment to Financing Agreement and Depositary and
Disbursement Agreement, dated as of April 2, 2008, by and among
Panda Hereford Ethanol, L.P., Société Générale and the lenders
named therein, filed as Exhibit 10.1 to our Current Report on Form
8-K, filed on April 8, 2008 and incorporated by reference herein.10.4
    
    Sponsor Support Agreement, dated as of April 2, 2008, by and among
Panda Ethanol, Inc., Panda Hereford Ethanol, L.P. and Société
Générale, filed as Exhibit 10.2 to our Current Report on Form 8-K,
filed on April 8, 2008 and incorporated by reference herein.31.1
    
    Certification of Principal Executive Officer.
 29




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##### Table of Contents



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.
 30