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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-K/A

Amendment No. 1

(Mark One)



| | x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ------------------------------------------------------------------------------------

For the Fiscal Year Ended December 31, 2006

OR



| |  ̈ | 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



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PANDA ETHANOL, INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 33-0986282                          
|(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)                          

Registrants telephone number, including area code: (972) 361-1200

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.001 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ̈No  x

Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes ̈No  x

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act. (Check one):

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

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

The aggregate market value of Common Stock, $0.001 par
value per share (the Common Stock), held by nonaffiliates of the registrant, based on the last sale price of the Common Stock on the last business day of Panda Ethanols most recently completed second fiscal quarter, was $8,162. As
of May 9, 31,066,659 shares of Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

None

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PANDA ETHANOL, INC.

FORM 10-K/A

AMENDMENT NO. 1

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006

INDEX



|                                                       |  |     
|------------------------------------------------------ |  | ----
|                                                       |  | Page
|PART III                                               |  |     
|                                                       | 
|Item 11.    Executive Compensation                     |  | 1   
|                                                       | 
|PART IV                                                |  |     
|                                                       | 
|Item 15.    Exhibits and Financial Statement Schedules |  | 7   

EXPLANATORY NOTE

Panda Ethanol, Inc. is filing this Amendment No. 1 on Form 10-K/A (this Amendment) to its Annual Report on Form 10-K for the fiscal year
ended December 31, 2006, originally filed on May 2, 2007. In response to a comment letter from the Securities and Exchange Commissions Division of Corporation Finance, the Company has made the following amendments to its disclosure:



| |  |  | Amend Item 11 to disclose the basis and performance measurements utilized for the bonus payments made to the named executive officers in 2006.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Amend Item 11 to clarify that the Company did not make any grants of plan-based awards in 2006.
| | - |  | -----------------------------------------------------------------------------------------------

In addition, we are also including as exhibits to this Amendment the certifications required under Section 302 of the Sarbanes-Oxley Act of 2002.
Because no financial statements are contained within this Amendment, we are not including certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Except as set forth herein, no other changes are made to our Annual Report on
Form 10-K for the fiscal year ended December 31, 2006.





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PART III

Item 11. Executive Compensation

Compensation Discussion and Analysis

Overview

The following Compensation Discussion
and Analysis describes the material elements of compensation for our executive officers identified in the Summary Compensation Table, whom we refer to as the named executive officers.

Prior to the merger of Panda EthanolDelaware with and into our company on November 6, 2006, our sole employee, Mr. Reed Fisher, President
and Secretary, received no compensation. After the merger, all of the members of management of Panda EthanolDelaware became members of our management. Because the merger fell so late in the year, for the remaining two months of the 2006 fiscal
year, we generally kept in place the salary and bonus compensation structure that was previously in place at Panda EthanolDelaware and, prior to that, at Panda Energy, for such employees. Both Panda EthanolDelaware and Panda Energy were
private companies. Accordingly, the discussion of our fiscal 2006 compensation contained in this Compensation Discussion and Analysis is brief. The compensation committee plans to review all of our compensation arrangements for fiscal 2007 and this
Compensation Discussion and Analysis also includes some general concepts related to our planned practices and procedures with respect to compensation.

Compensation Philosophy and Objectives

The compensation committee is responsible for
reviewing the competitiveness of our executive compensation programs to ensure (a) the attraction and retention of corporate officers, (b) the motivation of corporate officers to achieve our business objectives, and (c) the alignment
of the interests of key leadership with the short-term and long-term interests of our stockholders. The compensation committee also has responsibility for establishing, implementing and continually monitoring adherence with our compensation
philosophy, and ensuring that the total compensation paid to our executive officers, including the named executive officers, is fair and reasonable. Generally, the types of compensation and benefits provided to the named executive officers are
similar to those provided to other executive officers.

The day-to-day design and administration of savings, health, welfare and paid
time-off plans and policies applicable to salaried employees in general are handled by our Human Resources department. The compensation committee (or board of directors) remains responsible for certain fundamental changes outside the day-to-day
requirements necessary to maintain these plans and policies.

The compensation committee will base its compensation programs on the
following objectives:



| |  |  | Compensation should be based on the level of job responsibility, individual performance, and company performance. As employees progress to higher levels in the
organization, an increasing proportion of their pay should be linked to company performance and shareholder returns, because they are more able to affect the companys results.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Compensation should reflect the value of the job in the marketplace. To attract and retain a highly skilled work force, we must remain competitive with the pay of
other premier employers who compete with us for talent.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Compensation and benefit programs should be egalitarian. While the programs and individual pay levels will always reflect differences in job responsibilities,
geographies, and marketplace considerations, the overall structure of compensation and benefit programs should be broadly similar across the organization. Perquisites for executives should be rare and limited to those that are important to the
executives ability to safely and effectively carry out his or her responsibilities.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Role of the Chairman and Executive Officers in Compensation Decisions

For fiscal 2007, the compensation committee plans to make all compensation decisions for the executive officers, including the named executive officers
and to approve all equity awards, if any, to our executive officers. It is anticipated that the Chairman will participate in the annual review of the compensation and performance of the executive officers, including the named executive officers, and
the President will participate in the annual review for all executive officers, other than himself. For fiscal 2006, the Chairman set the original salaries at Panda EthanolDelaware and determined the amount of the 2006 cash bonus in accordance
with past practices.

Setting Executive Compensation

Prior to the merger on November 6, 2006, the sole employee of Cirracor, Mr. Reed Fisher, President and Secretary, Prior to the merger on
November 6, 2006, the sole employee of Cirracor, Mr. Reed Fisher, President and Secretary, received no compensation. For November and December of 2006, we generally kept in place the overall compensation structure that was set by Panda
EthanolDelaware and Panda Energy earlier in the year for our executives. This was mainly due to the facts that the merger occurred very late in the year and all of the members of our current management were former employees of Panda
EthanolDelaware and, prior to that, Panda Energy. We concluded that the most efficient and logical course of action was to essentially carry-over the prior compensation structure at Panda EthanolDelaware and Panda Energy for the
remainder of fiscal 2006. The cash bonuses paid by us to our executive officers covered the full 2006 fiscal year and were based on a full years employment and base salary in effect at the end of the year. At Panda EthanolDelaware and
Panda Energy, the Chairman set the base salary and cash bonus amounts in accordance with past practices. This overall compensation was at a level that the Chairman, Panda EthanolDelaware and Panda Energy believed to be competitive with their
peer companies.

The compensation committee plans to review all of our compensation arrangements for fiscal 2007. Based on the compensation
philosophy and objectives described above, the compensation committee plans to structure our annual and incentive-based executive compensation to motivate executives to achieve the business goals set by us and reward the executives for achieving
such goals. We currently do not have any non-cash component of our compensation, although such non-cash compensation may be incorporated into our structure in the future.

Components of Executive Compensation

The components of the total compensation paid to the
executives include the following:



| |  |  | Base salary
| | - |  | -----------



| |  |  | Cash incentive bonus
| | - |  | --------------------

Base
salary

Base salary is the guaranteed element of executives annual cash compensation. The value of base salary reflects the
executives long-term performance, skill set and the market value of that skill set. The compensation committee plans to review our base salary arrangements as a part of its overall review of our compensation practices.

Cash incentive bonus

The Chairman
set our fiscal 2006 bonus in accordance with past practices at Panda Ethanol  Delaware and Panda Energy. The payout of this bonus was intended to cover the full 2006 fiscal year and occurred in December 2006, which is consistent with the
timing of prior bonus payments. Each executive was paid a bonus equal to approximately 8.3% of his base salary in effect at the end of the year, the same percentage paid to all other employees of Panda Ethanol who were employed by Panda
EthanolDelaware and Panda Energy for the full year. The determination was made after consideration of the cash flow position of the Company and the anticipated timing of future project finance closings.

To date, we have granted only cash incentive compensation. There is no current pre-established policy or target for the allocation between either cash
and non-cash or short-term and long-term incentive compensation. The compensation committee plans to review our incentive compensation arrangements to determine the appropriate level and mix of incentive compensation as a part of its overall review
of our compensation practices.



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Compensation of Executive Officers

The total compensation paid for the 2006 fiscal year to the Chief Executive Officer, Mr. Todd W. Carter, Chief Financial Officer, Mr. Michael Trentel, and the other three most highly paid executive
officers who received cash compensation in excess of $100,000 for the fiscal year ended December 31, 2006 collectively referred to as the named executive officers, is set forth below in the following Summary Compensation Table. For
fiscal year 2006, we incorporated compensation received by the named executive officers from Panda EthanolDelaware and Panda Energy to determine the status of such persons as named executive officers. Otherwise, none of such persons would have
exceeded the $100,000 threshold. Compensation information is also provided for Mr. Reed Fisher, who served as President and Secretary of Cirracor prior to the merger on November 6, 2006.

2006 FISCAL YEAR SUMMARY COMPENSATION TABLE



|                                                            |  |      |  |            |     |  |               |  |                  |  |                  |  |                                            |     |  |                                                                             |  |                            |      |  |          
|----------------------------------------------------------- |  | ---- |  | ---------- | --- |  | ------------- |  | ---------------- |  | ---------------- |  | ------------------------------------------ | --- |  | --------------------------------------------------------------------------- |  | -------------------------- | ---- |  | ---------
|Name and Principal Position                                 |  | Year |  | Salary ($) |     |  | Bonus ($) (1) |  | Stock Awards ($) |  | OptionAwards ($) |  | Non-Equity Incentive Plan Compensation ($) |     |  | Change in Pension Value and Nonqualified Deferred Compensation Earnings
($) |  | All Other Compensation ($) |      |  | Total ($)
|Todd W. Carter Chief Executive Officer                      |  | 2006 |  | 69,396     | (2) |  | 34,689        |  |                 |  |                 |  |                                           |     |  |                                                                            |  | 600                        | (3)  |  | 104,685  
|Robert K. Simmons Senior Vice President- Finance            |  | 2006 |  | 66,242     | (4) |  | 33,121        |  |                 |  |                 |  |                                           |     |  |                                                                            |  |                           |      |  | 99,363   
|L. Stephen Rizzieri Chief Legal Officer and General Counsel |  | 2006 |  | 52,273     | (5) |  | 26,136        |  |                 |  |                 |  |                                           |     |  |                                                                            |  |                           |      |  | 78,409   
|Michael A. Trentel Chief Financial Officer and Treasurer    |  | 2006 |  | 39,375     | (6) |  | 19,688        |  |                 |  |                 |  |                                           | (7) |  |                                                                            |  |                           |      |  | 59,063   
|Darol S. Lindloff Chief Operating Officer                   |  | 2006 |  | 48,125     | (8) |  | 24,063        |  |                 |  |                 |  |                                           |     |  |                                                                            |  | 380                        | (9)  |  | 72,568   
|Reed Fisher President and Secretary of Cirracor             |  | 2006 |  |           |     |  |              |  |                 |  |                 |  |                                           |     |  |                                                                            |  |                           | (10) |  |         

---

|(1) | Bonus amounts covered the full 2006 fiscal year and were based on a full years employment and salary.
|--- | ------------------------------------------------------------------------------------------------------



|(2) | Represents amounts paid since the merger on November 6, 2006. Does not include $34,689 paid by Panda EthanolDelaware to Mr. Carter from October 1, 2006 to
November 6, 2006 and $299,065 paid by Panda Energy to Mr. Carter from January 1, 2006 to September 30, 2006. The aggregate of all payments of salary by us, Panda EthanolDelaware and Panda Energy to Mr. Carter for
fiscal 2006 equals $403,150.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Represents a $300 per month car allowance paid by us. Does not include $300 paid by Panda EthanolDelaware to Mr. Carter from October 1, 2006 to
November 6, 2006 and $2,700 paid by Panda Energy to Mr. Carter from January 1, 2006 to September 30, 2006. Does not include any amounts for personal use by Mr. Carter on two occasions, one in January 2006 and one in April
2006, of an aircraft owned by a subsidiary of Panda Energy as any
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | amounts related to such use were paid in full by Panda Energy and were not reimbursed by us or Panda EthanolDelaware. Does not include $49,500 of
compensation paid by us to Mr. Carter in connection with his service as a director. See Compensation of Directors. Also does not include $36,500 of compensation paid by Panda Energy to Mr. Carter in fiscal 2006 in
connection with his service as a director.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Represents amounts paid since the merger on November 6, 2006. Does not include $33,121 paid by Panda EthanolDelaware to Mr. Simmons from October 1, 2006 to
November 6, 2006 and $285,471 paid by Panda Energy to Mr. Simmons from January 1, 2006 to September 30, 2006. The aggregate of all payments of salary by us, Panda EthanolDelaware and Panda Energy to Mr. Simmons for
fiscal 2006 equals $384,834.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) | Represents amounts paid since the merger on November 6, 2006. Does not include $26,136 paid by Panda EthanolDelaware to Mr. Rizzieri from October 1, 2006 to
November 6, 2006 and $225,270 paid by Panda Energy to Mr. Rizzieri from January 1, 2006 to September 30, 2006. The aggregate of all payments of salary by us, Panda EthanolDelaware and Panda Energy to Mr. Rizzieri for
fiscal 2006 equals $303,679.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) | Represents amounts paid since the merger on November 6, 2006. Does not include $19,688 paid by Panda EthanolDelaware to Mr. Trentel from October 1, 2006 to
November 6, 2006 and $169,688 paid by Panda Energy to Mr. Trentel from January 1, 2006 to September 30, 2006. The aggregate of all payments of salary by us, Panda EthanolDelaware and Panda Energy to Mr. Trentel for
fiscal 2006 equals $228,751.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(7) | Does not include amounts related to an option to purchase 25,000 shares of Panda Energy common stock granted to
Mr. Trentel by Panda Energy on August 16, 2006. The option has an exercise price of $3.00 per share and vests in three equal installments on August 16, 2008, 2009 and 2010. The option will not vest if a termination of employment with
Panda Energy or Panda Ethanol has occurred. The option expires (i) on August 16, 2016, (ii) on the 30thday following termination of Mr. Trentels employment with Panda Energy or Panda Ethanol other than for cause and immediately upon a termination for cause, and (iii) six months following
Mr. Trentels death or disability. The option was granted in connection with an agreement entered into on November 14, 2005 between Panda Energy and Mr. Trentel regarding the acquisition of options to purchase 25,000 shares of
Panda Energy common stock upon closing of financing for the Hereford facility and options to purchase 10,000 shares of Panda Energy common stock upon closing of financing for each of the next six ethanol facilities with a capacity of
100 million gallons or more. All of such options will have an exercise price of $3.00 per share.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(8) | Represents amounts paid since the merger on November 6, 2006. Does not include $24,063 paid by Panda EthanolDelaware to Mr. Lindloff from October 1, 2006 to
November 6, 2006 and $207,396 paid by Panda Energy to Mr. Lindloff from January 1, 2006 to September 30, 2006. The aggregate of all payments of salary by us, Panda EthanolDelaware and Panda Energy to Mr. Lindloff for
fiscal 2006 equals $279,584.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(9) | Represents a $190.00 per month car allowance paid by the Company. Does not include $190 paid by Panda EthanolDelaware to Mr. Lindloff from October 1, 2006 to
November 6, 2006 and $1,710 paid by Panda Energy to Mr. Lindloff from January 1, 2006 to September 30, 2006.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(10) | Mr. Fisher received no compensation in fiscal 2006. Does not include a loan in the amount of $7,666 which we repaid to Mr. Fisher after consummation of the merger.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

We provide only minimum perquisites to executive officers which have been identified in the footnotes to the Summary
Compensation Table above. We prefer to compensate named executive officers using a mix of salary and cash bonus. We do provide Messrs. Carter and Lindloff with a monthly car allowance. Perquisites do not include any amounts related to the provision
of covered parking to the above named executive officers because the covered parking is provided by the building at no incremental cost to us.

On November 1, 2006, Panda Energy granted options to purchase common stock of Panda Energy to
Messrs. Simmons, Trentel and Lindloff. Mr. Simmonss option is for 100,000 shares, Mr. Lindloffs option is for 15,000 shares and Mr. Trentels has two options for 5,000 shares each. The options have an exercise price
of $3.00 per share and are fully vested and exercisable. The options expire on (i) the 30thday following
termination of employment of the option holder with Panda Energy or Panda Ethanol other than for cause and immediately upon a termination for cause or (ii) six months following the option holders death or
disability. The option granted to Mr. Simmons otherwise expires on July 1, 2011, the option granted to Mr. Lindloff otherwise expires on March 31, 2009 and Mr. Trentels options otherwise expire on March 31,



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2009 and on July 1, 2011. The option amounts, terms and price are the same as options held by such option holders that expired by their terms upon their
employment with Panda Energy due to such option holders change in employment to Panda EthanolDelaware. These options were issued in recognition of the option holders past services as an employee of Panda Energy. We do not believe
that any of these options represents compensation for services rendered to us.

We did not grant any options to any of our employees,
including our named executive officers, during 2006.

Compensation of Directors

The total compensation paid for the 2006 fiscal year to our directors for the fiscal year ended December 31, 2006, is set forth below in the
following Summary Compensation Table:

2006 FISCAL YEAR DIRECTOR COMPENSATION



|                          |  |                               |     |  |                 |  |                  |  |                                            |  |                                                                             |  |                            |  |          
|------------------------- |  | ----------------------------- | --- |  | --------------- |  | ---------------- |  | ------------------------------------------ |  | --------------------------------------------------------------------------- |  | -------------------------- |  | ---------
|Name*                     |  | Fees Earnedor Paid inCash ($) |     |  | StockAwards ($) |  | OptionAwards ($) |  | Non-Equity Incentive Plan Compensation ($) |  | Change in Pension Value and Nonqualified Deferred Compensation Earnings
($) |  | All Other Compensation ($) |  | Total ($)
|Robert W. Carter Chairman |  | 79,500                        | (1) |  |                |  |                 |  |                                           |  |                                                                            |  |                           |  | 79,500   
|Todd W. Carter            |  | 49,500                        | (2) |  |                |  |                 |  |                                           |  |                                                                            |  |                           |  | 49,500   
|G. Michael Boswell        |  | 66,000                        | (3) |  |                |  |                 |  |                                           |  |                                                                            |  |                           |  | 66,000   
|Donnell Brown             |  | 60,000                        | (4) |  |                |  |                 |  |                                           |  |                                                                            |  |                           |  | 60,000   
|Stanford Stoddard (5)     |  |                              |     |  |                |  |                 |  |                                           |  |                                                                            |  |                           |  |         



|(1) | Comprised of annual retainer of $75,000 and $4,500 in board meeting fees.
|--- | -------------------------------------------------------------------------



|(2) | Comprised of annual retainer of $45,000 and $4,500 in board meeting fees.
|--- | -------------------------------------------------------------------------



|(3) | Comprised of annual retainer of $45,000, $4,500 in board meeting fees, chairman of audit committee annual retainer of $12,000 and $4,500 in committee meeting fees.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Comprised of annual retainer of $45,000, $4,500 in board meeting fees, chairman of nominating and corporate governance committee annual retainer of $6,000 and $4,500 in committee
meeting fees.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) | Mr. Stoddard resigned from the board effective November 7, 2006 and did not receive any compensation for his service as director.
|--- | ---------------------------------------------------------------------------------------------------------------------------------



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Our current compensation policy for our directors is summarized as follows. The Chairman receives
an annual retainer of $75,000 and all other directors receive an annual retainer of $45,000. All directors, including the Chairman, receive $2,500 for each board meeting attended in person and $2,000 for each board meeting attended by telephone. The
chairman of the audit committee receives an annual retainer of $12,000. The chairman of each other committee receives an annual retainer of $6,000. If a director is the chairman of more than one committee, he or she would receive a retainer for each
such committee. All committee members, including the chairman, receive $1,500 for each committee meeting attended, whether in person or by telephone. In addition, board members are reimbursed for reasonable travel expenses incurred in connection
with their attendance at a board or committee meeting.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended December 31, 2006, the compensation committee was comprised of Messrs. Boswell and Brown.

No member of the compensation committee is or has been an officer or employee of Panda Ethanol or any of its subsidiaries or had any relationship
requiring disclosure pursuant to Item 404 of Regulation S-K during the fiscal year ended December 31, 2006. No executive officer of Panda Ethanol served as a member of the compensation committee (or other board committee performing similar
functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on the compensation committee. No executive officer of Panda Ethanol served as a director of another entity,
one of whose executive officers served on the compensation committee. No executive officer of Panda Ethanol served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such
committee, the entire board of directors) of another entity, one of whose executive officers served as a director of Panda Ethanol.

Compensation Committee Report

Our compensation committee has reviewed and discussed the Compensation Discussion and
Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the compensation committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this
annual report in Form 10-K.

The foregoing report is provided by the following directors, who constitute the compensation committee.

COMPENSATION COMMITTEE

Philip D. English, Chairman

G. Michael Boswell

Donnell Brown



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PART IV

Item 15. Exhibits and Financial Statement Schedules

EXHIBIT INDEX



|              |  |                                              
|------------- |  | ---------------------------------------------
|ExhibitNumber |  | Description                                  
|              | 
|31.1(1)       |  | Certification of Principal Executive Officer.
|              | 
|31.2(1)       |  | Certification of Principal Financial Officer.

---

|(1) | Filed herewith.
|--- | ---------------



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this amendment no. 1 to its annual report to be signed on its behalf by the undersigned,
thereunto duly authorized.

May 17, 2007.



PANDA ETHANOL, INC./s/ TODD W. CARTERTodd W. Carter, Chief Executive Officer and President




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EXHIBIT INDEX



|              |  |                                              
|------------- |  | ---------------------------------------------
|ExhibitNumber |  | Description                                  
|              | 
|31.1(1)       |  | Certification of Principal Executive Officer.
|              | 
|31.2(1)       |  | Certification of Principal Financial Officer.

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|(1) | Filed herewith.
|--- | ---------------