##### 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, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 000-50282
 
 PANDA ETHANOL, INC.
 (Exact name of registrant as specified in its charter)
 
 Nevada
(State or other jurisdiction of 
incorporation or organization)
    
    33-0986282
(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
  o o þ
 o þ




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##### 



PANDA ETHANOL, INC.
 FORM 10-Q
 FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2007
 INDEX
  
 PagePART IItem 1.
    
    Financial Statements
    
    
    1Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    18Item 4.
    
    Controls and Procedures
    
    
    19PART II
    
    
    20Item 1A.
    
    Risk Factors
    
    
    20Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    20Item 6.
    
    Exhibits
    
    
    21Certification of Principal Executive OfficerCertification of Principal Financial OfficerCertificaton of Chief Executive Officer Pursuant to Section 906Certificaton of Chief Financial Officer Pursuant to Section 906




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PART 1  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 PANDA ETHANOL, INC.
AND SUBSIDIARIES
(A Development Stage Enterprise)
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 (UNAUDITED)
 December 31,
    
    
    September 30,2006
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    713,529
    
    
    $
    5,624,014Accounts receivable from former parent
    
    
    32,265
    
    
    
    Investments available for sale
    
    
    14,700,000
    
    
    
    655,000Prepaid expenses
    
    
    932,214
    
    
    
    116,218Deferred income taxes
    
    
    
    
    
    
    232,000Total current assets
    
    
    16,378,008
    
    
    
    6,627,232Restricted cash and cash equivalents
    
    
    135,607,427
    
    
    
    56,940,402Restricted short-term investments
    
    
    12,495,335
    
    
    
    Property, plant and equipment:Construction in progress
    
    
    66,087,367
    
    
    
    162,089,357Development costs
    
    
    2,084,463
    
    
    
    787,563Furniture and fixtures
    
    
    76,693
    
    
    
    358,765Accumulated depreciation
    
    
    (3,079
    )
    
    
    (56,243
    )Total property, plant and equipment, net
    
    
    68,245,444
    
    
    
    163,179,442Deposits
    
    
    
    
    
    
    1,198,949Debt issuance costs, net of accumulated amortization
of $520,393 and $1,475,707 at December 31, 2006
and September 30, 2007, respectively
    
    
    8,902,699
    
    
    
    7,947,385Total assets
    
    $
    241,628,913
    
    
    $
    235,893,410LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities 
property, plant and equipment
    
    $
    6,309,361
    
    
    $
    10,827,366Accounts payable and accrued liabilities  operating expenses
    
    
    1,051,919
    
    
    
    1,888,496Accounts payable to former parent  operating expenses
    
    
    
    
    
    
    3,767Current portion of financial derivatives
    
    
    
    
    
    
    437,000Current portion of long-term debt
    
    
    
    
    
    
    5,604,438Accrued interest
    
    
    491,497
    
    
    
    541,811Total current liabilities
    
    
    7,852,777
    
    
    
    19,302,878Financial derivatives
    
    
    7,659,400
    
    
    
    6,053,486Long-term debt
    
    
    136,369,890
    
    
    
    134,573,607Other noncurrent liabilities
    
    
    
    
    
    
    232,000Commitments and contingencies (Notes 3 and 5)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;
31,066,667 and 31,066,659 shares issued and outstanding
at December 31, 2006 and September 30, 2007, respectively
    
    
    31,067
    
    
    
    31,067Additional contributed capital
    
    
    104,405,191
    
    
    
    104,946,091Accumulated other comprehensive loss
    
    
    (513,400
    )
    
    
    (1,234,486
    )Deficit accumulated during the development stage
    
    
    (18,477,570
    )
    
    
    (32,312,791
    )Total shareholders equity
    
    
    85,445,288
    
    
    
    71,429,881Total liabilities and shareholders equity
    
    $
    241,628,913
    
    
    $
    235,893,410
  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, 2006 AND 2007,
AND FOR THE PERIOD FROM INCEPTION THROUGH SEPTEMBER 30, 2007
 (UNAUDITED)
 InceptionThree Months Ended September 30,
    
    
    Nine Months Ended September 30,
    
    
    Through2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    September 30, 2007Development and administrative expenses:Development and administrative expenses allocated from
former parent
    
    $
    2,537,852
    
    
    $
    420,169
    
    
    $
    6,470,647
    
    
    $
    726,866
    
    
    $
    12,896,609Other development and administrative expenses
    
    
    1,175,677
    
    
    
    3,898,980
    
    
    
    2,629,014
    
    
    
    13,380,513
    
    
    
    21,528,213Provision for impairment of development projects
    
    
    
    
    
    
    2,844,000
    
    
    
    
    
    
    
    2,844,000
    
    
    
    2,844,000Total development and administrative expenses
    
    
    3,713,529
    
    
    
    7,163,149
    
    
    
    9,099,661
    
    
    
    16,951,379
    
    
    
    37,268,822Other expense (income):Interest income
    
    
    (1,635,924
    )
    
    
    (1,038,486
    )
    
    
    (1,849,606
    )
    
    
    (4,242,438
    )
    
    
    (7,973,271
    )Interest expense and letter of credit fees
    
    
    1,307,905
    
    
    
    196,235
    
    
    
    1,307,905
    
    
    
    2,536,338
    
    
    
    5,674,227Amortization of debt issuance costs
    
    
    114,435
    
    
    
    6,415
    
    
    
    114,435
    
    
    
    206,779
    
    
    
    478,771Depreciation
    
    
    
    
    
    
    21,102
    
    
    
    
    
    
    
    53,163
    
    
    
    56,242Provision for impairment of investments available for sale
    
    
    
    
    
    
    220,000
    
    
    
    
    
    
    
    220,000
    
    
    
    220,000Decrease in fair value of financial derivative
    
    
    (335,000
    )
    
    
    (5,293,000
    )
    
    
    (335,000
    )
    
    
    (1,890,000
    )
    
    
    (3,412,000
    )Total other income
    
    
    (548,584
    )
    
    
    (5,887,734
    )
    
    
    (762,266
    )
    
    
    (3,116,158
    )
    
    
    (4,956,031
    )Net loss
    
    $
    3,164,945
    
    
    $
    1,275,415
    
    
    $
    8,337,395
    
    
    $
    13,835,221
    
    
    $
    32,312,791Net loss per common share basic and dilutive:Net loss per common share
    
    $
    0.11
    
    
    $
    0.04
    
    
    $
    0.41
    
    
    $
    0.45Weighted average common shares outstanding  basic and dilutive
    
    
    28,800,000
    
    
    
    31,066,659
    
    
    
    20,183,599
    
    
    
    31,066,659
  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, 2006 AND 2007,
AND FOR THE PERIOD FROM INCEPTION THROUGH SEPTEMBER 30, 2007
 (UNAUDITED)
 Nine Months Ended September 30,
    
    
    Inception Through2006
    
    
    2007
    
    
    September 30, 2007As Restated See Note 8Operating activities:Net loss
    
    $
    (8,337,395
    )
    
    $
    (13,835,221
    )
    
    $
    (32,312,791
    )Adjustments to reconcile net loss to
net cash used in operating activities:Operating expenses contributed by former parent
    
    
    
    
    
    
    272,678
    
    
    
    272,678Provision for impairment of development projects
    
    
    
    
    
    
    2,844,000
    
    
    
    2,844,000Provision for impairment of investments available for sale
    
    
    
    
    
    
    220,000
    
    
    
    220,000Interest expense added to debt principal
    
    
    741,803
    
    
    
    3,808,155
    
    
    
    5,746,045Amortization of debt issuance costs
    
    
    114,435
    
    
    
    206,779
    
    
    
    478,771Depreciation
    
    
    
    
    
    
    53,163
    
    
    
    56,242Decrease in fair value of financial derivative
    
    
    (335,000
    )
    
    
    (1,890,000
    )
    
    
    (3,412,000
    )Deferred tax benefit
    
    
    
    
    
    
    (232,000
    )
    
    
    (232,000
    )Decrease in accounts receivable from former parent
    
    
    
    
    
    
    32,265
    
    
    
    (Increase) decrease in prepaid expenses
    
    
    
    
    
    
    815,996
    
    
    
    (116,218
    )Increase in accounts payable and
accrued liabilities  operating expenses
    
    
    270,715
    
    
    
    836,577
    
    
    
    1,888,496Increase in accounts payable to former parent 
operating expenses
    
    
    926,390
    
    
    
    271,989
    
    
    
    271,989Increase in accrued interest
    
    
    326,488
    
    
    
    50,314
    
    
    
    541,811Increase in other noncurrent liabilities
    
    
    
    
    
    
    232,000
    
    
    
    232,000Net cash used in operating activities
    
    
    (6,292,564
    )
    
    
    (6,313,305
    )
    
    
    (23,520,977
    )Investing activities:Purchases of investments available for sale
    
    
    (68,025,000
    )
    
    
    (11,000,000
    )
    
    
    (94,025,000
    )Sales of investments available for sale
    
    
    56,575,000
    
    
    
    24,825,000
    
    
    
    93,150,000(Increase) decrease in restricted cash and cash equivalents
    
    
    (142,561,377
    )
    
    
    78,667,025
    
    
    
    (56,940,402
    )(Increase) decrease in restricted short-term investments
    
    
    (22,409,556
    )
    
    
    12,495,335
    
    
    
    Additions to property, plant and equipment
    
    
    (40,350,348
    )
    
    
    (92,564,621
    )
    
    
    (154,255,382
    )Increase in deposits
    
    
    
    
    
    
    (1,198,949
    )
    
    
    (1,198,949
    )Net cash provided by (used in) investing activities
    
    
    (216,771,281
    )
    
    
    11,223,790
    
    
    
    (213,269,733
    )Financing activities:Capital contributions from former parent
    
    
    6,424,972
    
    
    
    
    
    
    
    16,133,464Capital distributions to former parent
    
    
    (5,480,712
    )
    
    
    
    
    
    
    (5,480,712
    )Temporary equity advanced from former parent
    
    
    4,301,558
    
    
    
    
    
    
    
    4,301,558Issuance of common stock to former parent
    
    
    
    
    
    
    
    
    
    
    2,859,354Issuance of common stock to non-affiliates
    
    
    86,158,563
    
    
    
    
    
    
    
    90,924,152Issuance of long-term debt and financial derivative
    
    
    143,100,000
    
    
    
    
    
    
    
    143,100,000Debt issuance costs
    
    
    (9,334,646
    )
    
    
    
    
    
    
    (9,423,092
    )Net cash provided by financing activities
    
    
    225,169,735
    
    
    
    
    
    
    
    242,414,724Increase in cash and cash equivalents
    
    
    2,105,890
    
    
    
    4,910,485
    
    
    
    5,624,014Cash and cash equivalents, beginning of period
    
    
    25,043
    
    
    
    713,529
    
    
    
    Cash and cash equivalents, end of period
    
    $
    2,130,933
    
    
    $
    5,624,014
    
    
    $
    5,624,014Noncash investing and financing activities:Property, plant and equipment costs accrued
    
    $
    4,600,835
    
    
    $
    10,827,366
    
    
    $
    10,827,366Interest cost accrued to long-term debt principal
    
    $
    741,803
    
    
    $
    3,808,155
    
    
    $
    5,746,045Capital contributions from former parent:By reduction of accounts payable
    
    $
    
    
    
    $
    268,222
    
    
    $
    268,222For operating expenses
    
    $
    
    
    
    $
    272,678
    
    
    $
    272,678Debt issuance costs accrued
    
    $
    88,446
    
    
    $
    
    
    
    $
    
  3




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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, 2006 and 2007
And For the Period from Inception (November 1, 2004) through September 30, 2007
 (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
 Adoption of New Accounting Pronouncement
   5




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3. ETHANOL PROJECTS
     6




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4. RELATED PARTY TRANSACTIONS
  7




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5. LONG-TERM DEBT
  8




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.
   6. COMMODITY PURCHASE COMMITMENTS
  7. INVESTMENTS AVAILABLE FOR SALE
  9




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8. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
    As PreviouslyReported
    
    As RestatedFor the nine months ended September 30, 2006:Cash flows from investing activities:Purchases of investments available for sale
    
    $
    
    
    
    $
    (68,025,000
    )Sales of investments available for sale
    
    
    
    
    
    
    56,575,000Net cash provided by (used in) investing activities
    
    
    (205,321,281
    )
    
    
    (216,771,281
    )Increase in cash and cash equivalents
    
    
    13,555,890
    
    
    
    2,105,890Cash and cash equivalents, end of period
    
    
    13,580,933
    
    
    
    2,130,933
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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 amended, as Panda Ethanol-Delaware, merged with and into Cirracor, Inc., which
we refer to as Cirracor, a Nevada corporation. 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 effectiveness of the new organizational plan;
    
    the availability of and necessity for continued access to former management;
    
    our ability to obtain additional capital to finance our initiatives;
    
    the time, cost and ability to construct or complete construction of our Hereford
and other ethanol plants;
    
    issues arising in connection with the development and construction of our
projects, including those relating to permits, easements, site conditions, workmanship,
process engineering, and conflicts of interest;
    
    the projected growth or contraction of the ethanol market in which we will
operate;
    
    fluctuations in the market price of ethanol;
    
    our business strategy for expanding, maintaining or contracting our presence in
this market and related markets;
    
    our ability to obtain the necessary capital to finance our initiatives;
    
    the sale of interests in, or entry into, partnerships or joint ventures with
respect to specific projects;
    
    anticipated trends in our financial condition and results of operations;
    
    our ability to distinguish ourselves from our current and future competitors;
    
    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;
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
    
    regulation currently under consideration pursuant to the passage of the
Energy Policy Act of 2005, or Energy Policy Act, which contains a renewable fuel
standard and other legislation mandating the usage of ethanol or other oxygenate
additives;
    
    state and federal regulation restricting or banning the use of methyl
tertiary butyl ether, or MTBE;
    
    environmental laws and regulations applicable to our operations and the
enforcement thereof; and
    
    regulations related to homeland security;
 
    
    changes in weather and general economic conditions;
    
    overcapacity within the ethanol and petroleum production and refining industries;
    
    total United States consumption of gasoline;
    
    availability and costs of products and raw materials, particularly corn, natural
gas, stainless steel and carbon steel;
    
    labor costs;
    
    labor relations;
    
    fluctuations in petroleum prices;
    
    our or our employees failure to comply with applicable laws and regulations;
    
    our ability to generate free cash flow to invest in our business and service our
indebtedness;
    
    limitations and restrictions contained in the instruments and agreements
governing our and our subsidiaries indebtedness;
    
    changes in interest rates;
    
    our ability to retain key employees;
    
    liability resulting from actual or potential future litigation;
    
    competition with respect to any of our products;
    
    consolidation in the industry;
    
    plant shutdowns or disruptions at our planned plant;
    
    availability of shuttle trains, rail cars, trucks and barges;
    
    risks regarding a loss of or substantial decrease in purchases by our major
ethanol customers or any customer of our by-products;
    
    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
    12




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Summary of Critical Accounting Policies and Estimates
  13




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Allocation of Expenses from the Former Parent
   Results of Operations
 For the three months ended September 30, 2006 as compared to the three months ended September 30,
2007
     14




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For the nine months ended September 30, 2006 as compared to the nine months ended September 30,
2007
     15




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Liquidity and Capital Resources
       16




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Hereford Facility Project Financing
  Contractual Commitments
  Off-balance sheet arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
   Interest Rate Risk
    Commodity Price Risk
  18




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Investment Price 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 1A. Risk Factors
 Current commodity prices are unfavorable and may negatively impact our projected results from the
Hereford facility.
   
 Item 4. Submission of Matters to a Vote of Security Holders
  1.
    
    to elect five (5) directors to serve for a term of one year or until their
respective successors are elected and qualified;
 2.
    
    to consider and vote upon a proposal to approve the Panda Ethanol, Inc. 2006
Amended and Restated Long-Term Incentive Plan (the Incentive Plan); and
 3.
    
    to ratify the appointment of Deloitte & Touche LLP as the Companys independent
registered public accounting firm for 2007.
    Number of
    
    Number ofName
    
    Votes Cast For
    
    Votes WithheldRobert W. Carter
    
    
    19,790,997
    
    
    
    0Todd W. Carter
    
    
    19,790,997
    
    
    
    0G. Michael Boswell
    
    
    19,790,997
    
    
    
    0Donnell Brown
    
    
    19,790,997
    
    
    
    0Philip D. English
    
    
    19,790,997
    
    
    
    0
   For
    
    
    18,955,627Against
    
    
    835,370Abstain
    
    
    0Broker Non-Votes
    
    
    0
   For
    
    
    19,790,997Against
    
    
    0Abstain
    
    
    0Broker Non-Votes
    
    
    0
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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 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.10.1
    
    Services Agreement, effective as of September 1, 2007, by and
between Panda Energy Management, LP and Panda Ethanol, Inc., filed
as Exhibit 10.1 to our Current Report on Form 8-K, filed on
November 15, 2007 and incorporated by reference herein.10.2
    
    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.10.3
    
    Loan Agreement, dated as of November 9, 2007, by and between Panda
Ethanol, Inc. and Panda Energy International, Inc., filed as
Exhibit 10.3 to our Current Report on Form 8-K, filed on November
15, 2007 and incorporated by reference herein.10.4
    
    Pledge, Assignment and Security Agreement, dated as of November 9,
2007, by and between Panda Ethanol, Inc. and Panda Energy
International, Inc., filed as Exhibit 10.4 to our Current Report
on Form 8-K, filed on November 15, 2007 and incorporated by
reference herein.10.5
    
    Pledge, Assignment and Security Agreement, dated as of November 9,
2007, by and between Panda Ethanol Holdings, LLC and Panda Energy
International, Inc., filed as Exhibit 10.5 to our Current Report
on Form 8-K, filed on November 15, 2007 and incorporated by
reference herein.
 21




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##### Table of Contents



ExhibitNumber
    
    Description31.1
    
    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.
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##### Table of Contents



SIGNATURES
  PANDA ETHANOL, INC.Date: November 16, 2007
    /s/ Franklin ByrdFranklin Byrd, Chief Financial Officer(Principal financial officer duly authorized to
sign on behalf of Registrant) 23




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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.10.1
    
    Services Agreement, effective as of September 1, 2007, by and
between Panda Energy Management, LP and Panda Ethanol, Inc., filed
as Exhibit 10.1 to our Current Report on Form 8-K, filed on
November 15, 2007 and incorporated by reference herein.10.2
    
    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.10.3
    
    Loan Agreement, dated as of November 9, 2007, by and between Panda
Ethanol, Inc. and Panda Energy International, Inc., filed as
Exhibit 10.3 to our Current Report on Form 8-K, filed on November
15, 2007 and incorporated by reference herein.10.4
    
    Pledge, Assignment and Security Agreement, dated as of November 9,
2007, by and between Panda Ethanol, Inc. and Panda Energy
International, Inc., filed as Exhibit 10.4 to our Current Report
on Form 8-K, filed on November 15, 2007 and incorporated by
reference herein.10.5
    
    Pledge, Assignment and Security Agreement, dated as of November 9,
2007, by and between Panda Ethanol Holdings, LLC and Panda Energy
International, Inc., filed as Exhibit 10.5 to our Current Report
on Form 8-K, filed on November 15, 2007 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
 24




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##### Table of Contents



ExhibitNumber
    
    DescriptionSection 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.
 25