As filed with
the Securities Exchange Commission on April 13
,
2017
Registration
No. 333-
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
PACIFIC ETHANOL, INC.
(Exact name of registrant as specified
in its charter)
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Delaware
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41-2170618
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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400 Capitol Mall, Suite 2060, Sacramento,
California 95814
(916) 403-2123
(Address,
including zip code, and telephone number, of registrant’s principal executive offices
)
Neil
Koehler
President and Chief Executive Officer
Pacific Ethanol, Inc.
400 Capitol Mall, Suite 2060
Sacramento, California 95814
(916) 403-2123
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies
of all correspondence to:
Larry A. Cerutti, Esq.
Rushika Kumararatne de Silva, Esq.
Troutman Sanders LLP
5 Park Plaza, Suite 1400
Irvine, California 92614-2545
(949) 622-2710 / (949) 622-2749 (fax)
Approximate date of proposed sale to the public:
From
time to time after this Registration Statement becomes effective.
If the only securities being registered on
this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box. ☐
If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement
pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment
to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes
of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. (Check one):
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Large accelerated filer ☐
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Accelerated filer ☒
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Non-accelerated filer ☐ (Do not check if a smaller
reporting company)
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Smaller reporting company ☐
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CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities To Be Registered(1)
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Amount
To Be
Registered(1)
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Proposed
Maximum
Offering Price
Per Security(1)(2)
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Proposed
Maximum
Aggregate
Offering Price(1)(2)
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Amount of
Registration Fee(3)
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Debt Securities
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Common Stock, par value $0.001 per share
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Preferred Stock, par value $0.001 per share
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Warrants
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Units
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Total
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$175,000,000
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$20,283
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(1)
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There are being registered hereunder such indeterminate number of shares of common stock and preferred stock, such indeterminate
principal amount of debt securities, such indeterminate number of units and such indeterminate number of warrants to purchase common
stock, preferred stock and/or debt securities as may be sold by the registrant from time to time, which together shall have an
aggregate initial offering price not to exceed $175,000,000. If any debt securities are issued at an original issue discount, then
the offering price of such debt securities shall be in such greater principal amount at maturity as shall result in an aggregate
offering price not to exceed $175,000,000. Any securities registered hereunder may be sold separately or as units with the other
securities registered hereunder. The proposed maximum offering price per unit will be determined from time to time by the registrant
in connection with the issuance by the registrant of the securities registered hereunder. The securities registered hereunder also
include such indeterminate number of shares of common stock and preferred stock and amount of debt securities as may be issued
upon conversion of or exchange for preferred stock or debt securities that provide for conversion or exchange, upon exercise of
warrants or pursuant to the antidilution provisions of any such securities. In addition, this registration statement relates to
an indeterminate amount of shares of common stock that may be issued as a result of stock splits, stock dividends or similar transactions
in accordance with Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”).
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(2)
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The proposed maximum aggregate offering price per class of securities will be determined from time to time by the registrant
in connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class
of security pursuant to General Instruction II.D. of Form S-3 under the Securities Act.
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(3)
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Calculated pursuant to Rule 457(o) under the Securities Act.
Pursuant to Rule 415(a)(6) under the Securities Act, the $175,000,000 of securities
registered pursuant to this registration statement
includes a total of $138,314,350 of unsold securities (the “Unsold
Securities”) registered pursuant to the registrant’s Registration Statement on Form S-3,
file number 333-195364, which was declared effective on April 30, 2014 (the “Prior Registration
Statement”). The registrant paid a registration fee of
$17,815 in connection with the registration of the Unsold Securities on the Prior
Registration Statement. Pursuant to Rule 415(a)(6) under the Securities
Act, the filing fees previously paid in connection with the Unsold Securities will continue to
be applied to the Unsold Securities. Accordingly, the amount of the registration fee has been calculated based on the
proposed maximum offering price of the $36,685,650 of additional
of securities registered on this registration statement. A filing fee of $4,252 is being paid
herewith in connection with the $36,685,650 of additional securities registered. Pursuant to Rule 415(a)(6) of the
Securities Act, the offering of the Unsold Securities registered
on the Prior Registration Statement will be
deemed terminated
as of the date of effectiveness of this registration statement.
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_______________
The Registrant hereby amends this registration statement
on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the registration statement becomes effective on such date as the Commission, acting under Section 8(a), may
determine.
EXPLANATORY NOTE
This registration statement contains two prospectuses:
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a base prospectus which covers the offering, issuance and sale by us of up to $175,000,000 in the aggregate of our debt securities,
common stock, preferred stock, warrants and units from time to time in one or more offerings; and
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·
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an at the market offering prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price
of $75,000,000 of our common stock that may be issued and sold under a sales agreement with FBR Capital Markets & Co.
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The base prospectus immediately follows
this explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus will be specified in
a prospectus supplement to the base prospectus. The at the market prospectus immediately follows the base prospectus. The $75,000,000
of common stock that may be offered, issued and sold under the at the market prospectus is included in the $175,000,000 of securities
that may be offered, issued and sold by us under the base prospectus.
The information in this prospectus
is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any state where the offer or sale is not permitted.
Subject to completion, dated April
13, 2017
PROSPECTUS
PACIFIC ETHANOL, INC.
$175,000,000
Debt Securities
Common
Stock
Preferred
Stock
Warrants
Units
This prospectus relates to the sale from
time to time in one or more offerings of up to $175,000,000 of debt securities, which we may issue in one or more series; shares
of our common stock; shares of our preferred stock, which we may issue in one or more series or classes; warrants to purchase our
debt securities, common stock or preferred stock; and units (collectively referred to as the “securities”).
We will provide the specific terms of any
securities to be offered in one or more supplements to this prospectus. The prospectus supplements may also add, update or change
information contained in this prospectus. This prospectus may not be used to offer and sell securities unless accompanied by a
prospectus supplement.
When securities are offered under this prospectus,
we will provide you with a prospectus supplement describing the specific securities being offered, the manner in which they are
being offered, the offering price of the securities and the net proceeds from the sale of those securities. The securities may
be offered separately or together in any combination or as a separate series. You should carefully read this prospectus and any
accompanying prospectus supplement, together with any documents incorporated by reference herein and therein, before you invest
in our securities. We may sell these securities to or through underwriters, to other purchasers, through dealers or agents or through
any combination of these methods, on a continuous or delayed basis. For additional information on the methods of sale, you should
refer to the section entitled “Plan of Distribution” in this prospectus. If any agents or underwriters are involved
in the sale of any securities with respect to which this prospectus is being delivered, the names of such agents or underwriters
and any applicable fees, commissions, discounts and over-allotment options will be set forth in a prospectus supplement. The price
to the public of such securities and the net proceeds that we expect to receive from such sale will also be set forth in a prospectus
supplement.
Our common stock is traded on The NASDAQ
Capital Market under the symbol “PEIX.” On April 12, 2017, the last reported sale price of our common stock on The
NASDAQ Capital Market was $6.95.
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Investing in our securities involves
substantial risks. See “Risk Factors” beginning on page 5 of this prospectus and in the applicable prospectus supplement,
and in any other document incorporated by reference herein or therein, for factors you should consider before buying any of our
securities.
_______________
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is ,
2017.
TABLE OF CONTENTS
PROSPECTUS
ABOUT
THIS PROSPECTUS
This prospectus is part of a “shelf”
registration statement that we have filed with the Securities and Exchange Commission. By using a shelf registration statement,
we may sell, at any time and from time to time in one or more offerings, any combination of the securities described in this prospectus,
up to a total dollar amount of $175,000,000. This prospectus provides you with a general description of the securities that we
may offer. Each time we sell securities, we will provide a prospectus supplement and attach it to this prospectus. The prospectus
supplement will contain more specific information about the terms of that offering, including the specific amounts, prices and
terms of the securities offered. The prospectus supplements may also add, update or change information contained or incorporated
by reference in this prospectus. Any statement that we make in this prospectus will be modified or superseded by any inconsistent
statement made by us in a prospectus supplement. If there is any inconsistency between the information in this prospectus and the
information in the prospectus supplement, you should rely on the information in the prospectus supplement.
This prospectus may
not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement
.
The exhibits to the registration statement
of which this prospectus is a part contain the full text of certain contracts and other important documents we have summarized
in this prospectus. Because these summaries may not contain all the information that you may find important in deciding whether
to purchase the securities we may offer, you should review the full text of these documents. The registration statement and the
exhibits can be obtained from the Securities and Exchange Commission as indicated under the heading “Where You Can Find Additional
Information” below.
You should rely only on the information
contained or incorporated by reference in this prospectus or any applicable prospectus supplements filed with the Securities and
Exchange Commission. We have not authorized anyone to provide you with different information and, if you are given any information
or representation about these matters that is not contained or incorporated by reference in this prospectus or a prospectus supplement,
you must not rely on that information. We are not making an offer to sell securities in any jurisdiction where the offer or sale
of such securities is not permitted.
Neither the delivery of this prospectus
or any applicable prospectus supplement nor any sale made using this prospectus or any applicable prospectus supplement implies
that there has been no change in our affairs or that the information in this prospectus or in any applicable prospectus supplement
is correct as of any date after their respective dates. You should not assume that the information in or incorporated by reference
in this prospectus or any applicable prospectus supplement prepared by us, is accurate as of any date other than the date(s) on
the front covers of those documents. Our business, financial condition, results of operations and prospects may have changed since
those dates.
When used in this prospectus, the terms
“Pacific Ethanol,” “we,” “our” and “us” refer to Pacific Ethanol, Inc. and its
consolidated subsidiaries, unless otherwise specified. Unless otherwise stated or indicated by context, the phrase “this
prospectus” refers to the prospectus and any applicable prospectus supplement.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated
by reference into this prospectus contain “forward-looking statements” and are intended to be covered by the safe harbor
provided for under Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements include our current expectations and projections
about future results, performance, prospects and opportunities. We have tried to identify these forward-looking statements by using
words like “believe,” “expect,” “may,” “will,” “could,” “seek,”
“estimate,” “continue,” “anticipate,” “intend,” “future,” “plan”
or variations of those terms and other similar expressions, including their use in the negative. You should not place undue reliance
on these forward-looking statements, which speak only as to our expectations, as of the date of this prospectus and any applicable
prospectus supplement. These forward-looking statements are subject to a number of risks, uncertainties and other factors that
could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied
by, these forward-looking statements.
These risks, uncertainties and other factors
include, but are not limited to, those set forth under “Risk Factors” discussed under the caption “Item 1A. Risk
Factors” in Part I of our most recent Annual Report on Form 10-K or any updates discussed under the caption “Item 1A.
Risk Factors” in Part II of our Quarterly Reports on Form 10-Q, together with all of the other information appearing in or
incorporated by reference into this prospectus and any applicable prospectus supplement. Given these risks and uncertainties, readers
are cautioned not to place undue reliance on our forward-looking statements. Projections included in such risk factors have been
prepared based on assumptions, which we believe to be reasonable, but not in accordance with United States generally accepted accounting
principles or any guidelines of the Securities and Exchange Commission. Actual results will vary, perhaps materially, and we undertake
no obligation to update the projections at any future date. You are strongly cautioned not to place undue reliance on such projections.
All subsequent written and oral forward-looking statements attributable to Pacific Ethanol or to persons acting on our behalf are
expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not
intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
DESCRIPTION
OF PACIFIC ETHANOL, INC.
Overview
We are a leading producer and marketer of
low-carbon renewable fuels in the United States.
We operate eight strategically-located ethanol
production facilities. Four of our plants are in the Western states of California, Oregon and Idaho, and four of our plants are
located in the Midwestern states of Illinois and Nebraska. We are the sixth largest producer of ethanol in the United States based
on annualized volumes. Our plants have a combined ethanol production capacity of 515 million gallons per year. We market all the
ethanol and co-products produced at our plants as well as ethanol produced by third parties. On an annualized basis, we market
nearly 1.0 billion gallons of ethanol and over 1.5 million tons of ethanol co-products on a dry matter basis. Our business consists
of two operating segments: a production segment and a marketing segment.
Our mission is to advance our position and
significantly increase our market share as a leading producer and marketer of low-carbon renewable fuels in the United States.
We intend to accomplish this goal in part by expanding our ethanol production capacity and distribution infrastructure, accretive
acquisitions, lowering the carbon intensity of our ethanol, extending our marketing business into new regional and international
markets, and implementing new technologies to promote higher production yields and greater efficiencies.
Production Segment
We produce ethanol and co-products at our
production facilities described below. Our plants located on the West Coast are near their respective fuel and feed customers,
offering significant timing, transportation cost and logistical advantages. Our plants located in the Midwest are in the heart
of the Corn Belt, benefit from low-cost and abundant feedstock production and allow for access to many additional domestic markets.
In addition, our ability to load unit trains from our plants located in the Midwest allows for greater access to international
markets.
We wholly-own all of our plants located
on the West Coast and the two plants in Pekin, Illinois. We own approximately 74% of the two plants in Aurora, Nebraska as well
as the grain elevator adjacent to those properties and related grain handling assets, including the outer rail loop, and the real
property on which they are located, through an entity owned approximately 26% by Aurora Cooperative Elevator Company.
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Facility
Name
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Facility
Location
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Estimated
Annual
Capacity
(gallons)
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Magic Valley
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Burley, ID
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60,000,000
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Columbia
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Boardman, OR
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40,000,000
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Stockton
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Stockton, CA
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60,000,000
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Madera
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Madera, CA
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40,000,000
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Aurora West
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Aurora, NE
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110,000,000
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Aurora East
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Aurora, NE
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45,000,000
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Pekin Wet
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Pekin, IL
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100,000,000
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Pekin Dry
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Pekin, IL
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60,000,000
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We produce ethanol co-products at our production
facilities such as wet distillers grains, dry distillers grains with solubles, wet and dry corn gluten feed, condensed distillers
solubles, corn gluten meal, corn germ, corn oil, distillers yeast and CO
2
.
Marketing Segment
We market ethanol and co-products produced
by our ethanol production facilities and market ethanol produced by third parties. We have extensive customer relationships throughout
the Western and Midwestern United States. Our ethanol customers are integrated oil companies and gasoline marketers who blend ethanol
into gasoline. Our customers depend on us to provide a reliable supply of ethanol, and manage the logistics and timing of delivery
with very little effort on their part. Our customers collectively require ethanol volumes in excess of the supplies we produce
at our production facilities. We secure additional ethanol supplies from third-party plants in California and other third-party
suppliers in the Midwest where a majority of ethanol producers are located. We arrange for transportation, storage and delivery
of ethanol purchased by our customers through our agreements with third-party service providers in the Western United States as
well as in the Midwest from a variety of sources.
We market our distillers grains and other
feed co-products to dairies and feedlots, in many cases located near our ethanol plants. These customers use our feed co-products
for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry and biodiesel customers.
We do not market co-products from other ethanol producers.
Corporate Information
We are a Delaware corporation formed in
February 2005. Our principal executive offices are located at 400 Capitol Mall, Suite 2060, Sacramento, California 95814. Our telephone
number is (916) 403-2123 and our Internet website is
www.pacificethanol.net
. The content of our Internet website does not
constitute a part of this prospectus.
Additional information about us and our
subsidiaries can be obtained from the documents incorporated by reference herein. See “Where You Can Find Additional Information.”
RISK FACTORS
Investing in our securities involves significant
risks. Before making an investment decision, you should consider carefully the risks, uncertainties and other factors described
in our most recent Annual Report on Form 10-K, as supplemented and updated by subsequent quarterly reports on Form 10-Q and current
reports on Form 8-K that we have filed or will file with the Securities and Exchange Commission, and in documents which are incorporated
by reference into this prospectus, as well as the risk factors and other information contained in or incorporated by reference
into the applicable prospectus supplement.
If any of these risks were to occur, our
business, affairs, prospects, assets, financial condition, results of operations and cash flow could be materially and adversely
affected. If this occurs, the market or trading price of our securities could decline, and you could lose all or part of your investment.
In addition, please read “Cautionary Note Regarding Forward-Looking Statements” in this prospectus, where we describe
additional uncertainties associated with our business and the forward-looking statements included or incorporated by reference
into this prospectus.
USE OF PROCEEDS
We will retain broad discretion over the
use of the net proceeds from the sale of the securities offered by this prospectus. Unless otherwise specified in the applicable
prospectus supplement, we currently expect to use the net proceeds of our sale of securities for general corporate purposes, which
may include, among other things, working capital requirements, capital expenditures, investments, acquisitions, and the repayment
or refinancing of outstanding indebtedness. Pending these uses, we expect to invest the net proceeds in demand deposit accounts
or short-term, investment-grade securities.
RATIOS OF
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our consolidated
ratios of earnings to fixed charges and preferred stock dividends for each of the periods indicated. For purposes of computing
the ratios, earnings represent income before taxes, extraordinary items and the cumulative effect of accounting changes, plus fixed
charges. You should read this table in conjunction with the consolidated financial statements and notes incorporated by reference
in this prospectus.
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Year Ended December 31,
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2016
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2015
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2014
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2013
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2012
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Ratio of Earnings to Fixed Charges
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1.0x
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(1.0)x
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5.2x
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0.9x
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(2.2)x
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Excess (Deficiency) of Earnings Available to Cover Fixed Charges (in thousands)
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$ (465)
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$ (28,691)
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$ 41,299
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$ (1,002)
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$ (43,195)
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Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
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0.9x
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(0.90)x
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4.3x
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0.9x
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(2.0)x
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Excess (Deficiency) of Earnings Available to Cover Fixed Charges and Preferred Stock Dividends (in thousands)
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$ (2,417)
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$ (30,637)
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$ 39,353
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$ (2,267)
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$ (44,463)
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DESCRIPTION
OF DEBT SECURITIES
The complete terms of the debt securities
will be contained in the indenture and supplemental indenture applicable to the debt securities unless we are not required under
the Trust Indenture Act of 1939, as amended, or the Trust Indenture Act, to issue the debt securities pursuant to an indenture.
These documents have been or will be included or incorporated by reference as exhibits to the registration statement of which this
prospectus is a part. You should read the indenture and supplemental indenture. You should also read the prospectus supplement,
which will contain additional information and which may update or change some of the information below.
This section describes the general terms
of the debt securities that we may offer using this prospectus. Further terms of the debt securities will be stated in the applicable
prospectus supplement. The following description and any description of the debt securities in a prospectus supplement may not
be complete and is subject to and qualified in its entirety by reference to the terms of the applicable indenture and supplemental
indenture (to the extent we are required to issue the debt securities pursuant to an indenture) and form of debt security.
General
We may issue debt securities, in one or
more series, as either senior or subordinated debt or as senior or subordinated convertible or exchangeable debt. The senior debt
securities will rank equally with any other unsubordinated debt that we may have and may be secured or unsecured. The subordinated
debt securities will be subordinate and junior in right of payment, to the extent and in the manner described in the instrument
governing the debt, to all or some portion of our senior indebtedness. Any convertible debt securities that we may issue will be
convertible into or exchangeable for common stock or other securities of Pacific Ethanol. Conversion may be mandatory or at your
option and would be at prescribed conversion rates.
If we are required pursuant to the provisions
of the Trust Indenture Act the debt securities will be issued under one or more indentures, which are contracts between us and
an eligible banking institution or other eligible party, as trustee. While the terms we have summarized below will apply generally
to any debt securities that we may offer under this prospectus, we will describe the particular terms of any debt securities that
we may offer, including debt securities that are issued under an indenture, in more detail in a prospectus supplement.
If required, we will issue the senior debt
securities under the senior indenture that we will enter into with the trustee named in the senior indenture. If required, we will
issue the subordinated debt securities under the subordinated indenture that we will enter into with the trustee named in the subordinated
indenture. We have filed forms of these documents as exhibits to the registration statement of which this prospectus is a part.
We use the term “indentures” to refer to both the senior indenture and the subordinated indenture.
The following summaries of the material
provisions of the senior debt securities, the subordinated debt securities and the indentures (to the extent applicable to a particular
issuance of our debt securities) are not complete and are qualified in their entirety by reference to all of the provisions of
the indenture applicable to a particular series of debt securities. You should read the applicable prospectus supplement that we
may authorize to be provided to you related to the series of debt securities being offered and, to the extent applicable, the complete
indentures that contain the terms of the debt securities. Forms of indentures have been filed as exhibits to the registration statement
of which this prospectus is a part, and we will file supplemental indentures and forms of debt securities containing the terms
of the debt securities being offered under indentures as exhibits to the registration statement of which this prospectus is a part
or such supplemental indentures will be incorporated by reference to reports that we file with the Securities and Exchange Commission.
Except as we may otherwise indicate, the terms of the senior indenture and the subordinated indenture are identical.
The indentures will be qualified under the
Trust Indenture Act. We use the term “indenture trustee” to refer to either the senior trustee or the subordinated
trustee, as applicable.
The indentures do not limit the amount of
other debt that we may incur and do not contain financial or similar restrictive covenants. The indentures do not contain any provision
to protect holders of debt securities against a sudden or dramatic decline in our ability to pay our debt.
The prospectus supplement will describe
the debt securities offered and the price or prices at which we will offer the debt securities. The description will include:
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the title of the debt securities;
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whether the debt securities are senior debt securities or subordinated debt securities and, if subordinated debt securities,
the related subordination terms;
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principal amount being offered, and, if a series, the total amount authorized and the total amount outstanding;
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any limit on the aggregate principal amount of the debt securities or the series of which they are a part;
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the date or dates on which we must pay the principal;
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whether the debt securities will be issued with any original issue discount;
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whether the debt securities are convertible into common stock or other securities or property and, if so, the terms and conditions
upon which conversion will be effected, including the initial conversion price or conversion rate and any adjustments thereto and
the conversion period;
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the rate or rates at which the debt securities will bear interest, if any, the date or dates from which interest will accrue,
and the dates on which we must pay interest;
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whether and under what circumstances, if any, we will pay a premium or additional amounts on any debt securities;
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the place or places where we must pay the principal and any premium or interest on the debt securities;
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the terms and conditions on which we may redeem or retire any debt security, if at all;
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any obligation to redeem or repurchase any debt securities, and the terms and conditions on which we must do so;
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the denominations in which we may issue the debt securities if other than denominations of $1,000 and any integral multiple
thereof;
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the manner in which we will determine the amount of principal of or any premium or interest or additional amounts on the debt
securities;
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the principal amount of the debt securities that we will pay upon declaration of acceleration of their maturity if other than
100%;
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the amount that will be deemed to be the principal amount for any purpose, including the principal amount that will be due
and payable upon any maturity or that will be deemed to be outstanding as of any date;
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whether the debt securities will be secured or unsecured, and the terms of any secured debt;
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whether the debt securities are defeasible;
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if applicable, the terms of any right to convert debt securities into, or exchange debt securities for, shares of common stock
or other securities or property;
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restrictions on transfer, sale or other assignment, if any;
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our right, if any, to defer payment of interest and the maximum length of any such deferral period;
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provisions for a sinking fund, purchase or other analogous fund, if any;
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whether we will issue the debt securities under indentures;
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whether we will issue the debt securities in the form of one or more global securities and, if so, the respective depositaries
for the global securities and the terms of the global securities;
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any addition to or change in the events of default applicable to the debt securities and any change in the right of the trustee
or the holders to declare the principal amount of any of the debt securities due and payable;
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any addition to or change in the covenants in the indentures, if any, including whether the indenture will restrict our ability
or the ability of our subsidiaries to:
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incur additional indebtedness;
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issue additional securities;
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pay dividends or make distributions in respect of our capital shares or the capital shares of our subsidiaries;
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place restrictions on our subsidiaries’ ability to pay dividends, make distributions or transfer assets;
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make investments or other restricted payments;
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sell or otherwise dispose of assets;
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enter into sale-leaseback transactions;
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engage in transactions with stockholders or affiliates;
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issue or sell shares of our subsidiaries; or
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effect a consolidation or merger;
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whether the indenture, if any, will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based
or other financial ratios;
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a discussion of any material United States federal income tax considerations applicable to the debt securities;
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information describing any book-entry features;
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procedures for any auction or remarketing, if any; and
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any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, including any events
of default that are in addition to those described in this prospectus or any covenants provided with respect to the debt securities
that are in addition to those described above, and any terms that may be required by us or advisable under applicable laws or regulations
or advisable in connection with the marketing of the debt securities.
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We may sell the debt securities at a substantial
discount below their stated principal amount. We will describe United States federal income tax considerations, if any, applicable
to debt securities sold at an original issue discount in the prospectus supplement. An “original issue discount security”
is any debt security that provides for an amount less than the principal amount to be due and payable upon the declaration of acceleration
of the maturity under the terms of the applicable indenture. The prospectus supplement relating to any original issue discount
securities will describe the particular provisions relating to acceleration of the maturity upon the occurrence of an event of
default. In addition, we will describe United States federal income tax or other considerations applicable to any debt securities
that are denominated in a currency or unit other than United States dollars in the prospectus supplement.
Conversion and Exchange Rights
The applicable prospectus supplement will
describe, if applicable, the terms on which you may convert debt securities into or exchange them for common stock or other securities
or property. The conversion or exchange may be mandatory or may be at your option. The prospectus supplement will describe how
the number of shares of common stock or other securities or property to be received upon conversion or exchange would be calculated.
Subordination of Subordinated Debt Securities
Unless the prospectus supplement indicates
otherwise, the following provisions will apply to the subordinated debt securities. The indebtedness underlying the subordinated
debt securities will be payable only if all payments due under our senior indebtedness, including any outstanding senior debt securities,
have been made. If we distribute our assets to creditors upon any dissolution, winding-up, liquidation or reorganization or in
bankruptcy, insolvency, receivership or similar proceedings, we must first pay all amounts due or to become due on all senior indebtedness
before we pay the principal of, or any premium or interest on, the subordinated debt securities. In the event the subordinated
debt securities are accelerated because of an event of default, we may not make any payment on the subordinated debt securities
until we have paid all senior indebtedness or the acceleration is rescinded. If the payment of subordinated debt securities accelerates
because of an event of default, we must promptly notify holders of senior indebtedness of the acceleration.
Unless otherwise indicated in a prospectus
supplement, we may not make any payment on the subordinated debt securities if a default in the payment of the principal of, premium,
if any, interest or other obligations, including a default under any repurchase or redemption obligation, in respect of senior
indebtedness occurs and continues beyond any applicable grace period. We may not make any payment on the subordinated debt securities
if any other default occurs and continues with respect to senior indebtedness that permits holders of the senior indebtedness to
accelerate its maturity and the trustee receives a notice of such default from us, a holder of such senior indebtedness or other
person permitted to give such notice. We may not resume payments on the subordinated debt securities until the defaults are cured
or certain periods pass.
If we experience a bankruptcy, dissolution
or reorganization, holders of senior indebtedness may receive more, ratably, and holders of subordinated debt securities may receive
less, ratably, than our other creditors.
The indentures in the forms initially filed
as exhibits to the registration statement of which this prospectus is a part do not limit the amount of indebtedness which we may
incur, including senior indebtedness or subordinated indebtedness, and do not limit us from issuing any other debt, including secured
debt or unsecured debt.
Form, Exchange and Transfer
We will issue debt securities only in fully
registered form, without coupons, and, unless otherwise specified in the prospectus supplement, only in denominations of $1,000
and any integral multiple thereof. The indentures provide that we may issue debt securities of a series in temporary or permanent
global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company, or DTC, or
another depositary named by us and identified in a prospectus supplement with respect to that series. We currently anticipate that
the debt securities of each series offered and sold pursuant to this prospectus will be issued as global debt securities as described
under “Global Securities” and will trade in book-entry form only.
At the option of the holder, subject to
the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement,
the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series,
in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and
the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities
may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed
thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office
of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder presents
for transfer or exchange, we will make no service charge for any registration of transfer or exchange, but we may require payment
of any taxes or other governmental charges.
We will name in the applicable prospectus
supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for
any debt securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent
in each place of payment for the debt securities of each series.
If we elect to redeem the debt securities
of any series, we will not be required to:
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issue, register the transfer or exchange of any debt securities of any series being redeemed in part during a period beginning
at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected
for redemption and ending at the close of business on the day of the mailing; or
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register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed
portion of any debt securities we are redeeming in part.
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Consolidation, Merger and Sale of Assets
Unless otherwise specified in the prospectus
supplement, we may not consolidate with or merge into, or sell, convey, transfer, lease or otherwise dispose of all or substantially
all of our properties and assets to, any person, and shall not permit any other person to consolidate with or merge into us, unless:
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either: (i) we are the surviving corporation or (ii) the person formed by or surviving any consolidation, amalgamation or merger
or resulting from such conversion (if other than Pacific Ethanol) or to which such sale, assignment, transfer, conveyance or other
disposition has been made, is a corporation, limited liability company or limited partnership organized and validly existing under
the laws of the United States, any state of the United States or the District of Columbia and assumes our obligations under the
debt securities and under the indentures pursuant to agreements reasonably satisfactory to the indenture trustee;
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immediately before and after giving pro forma effect to such transaction, no event of default, and no event which, after notice
or lapse of time or both, would become an event of default, has occurred and is continuing; and
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several other conditions, including any additional conditions with respect to any particular debt securities specified in the
applicable prospectus supplement, are met.
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The terms of any securities that we may
offer pursuant to this prospectus may limit our ability to merge or consolidate or otherwise sell, convey, transfer or otherwise
dispose of all or substantially all of our assets, which terms would be set forth in the applicable prospectus supplement and supplemental
indenture.
Events of Default
Unless otherwise specified in the applicable
prospectus supplement, it is anticipated that each of the following will constitute an event of default under the applicable indenture
with respect to debt securities of any series:
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failure to pay principal of or any premium on any debt security of that series when due, whether or not, in the case of subordinated
debt securities, such payment is prohibited by the subordination provisions of the subordinated indenture;
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failure to pay any interest on any debt securities of that series when due, continued for 30 days, whether or not, in the case
of subordinated debt securities, such payment is prohibited by the subordination provisions of the subordinated indenture;
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failure to deposit any sinking fund payment, when due, in respect of any debt security of that series, whether or not, in the
case of subordinated debt securities, such deposit is prohibited by the subordination provisions of the subordinated indenture;
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failure to perform or comply with the provisions described under “—Consolidation, Merger and Sale of Assets”;
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failure to perform any of our other covenants in such indenture (other than a covenant included in such indenture solely for
the benefit of a series other than that series), continued for 60 days after written notice has been given to us by the applicable
indenture trustee, or the holders of at least 25% in principal amount of the outstanding debt securities of that series, as provided
in such indenture; and
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certain events of bankruptcy, insolvency or reorganization affecting us or any significant subsidiary.
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If an event of default (other than an event
of default with respect to Pacific Ethanol described in the last item listed above) with respect to the debt securities of any
series at the time outstanding occurs and is continuing, either the applicable trustee or the holders of at least 25% in principal
amount of the outstanding debt securities of that series by notice as provided in the applicable indenture may declare the principal
amount of the debt securities of that series (or, in the case of any debt security that is an original issue discount debt security,
such portion of the principal amount of such debt security as may be specified in the terms of such debt security) to be due and
payable immediately, together with any accrued and unpaid interest thereon. If an event of default with respect to Pacific Ethanol
described in the last item listed above with respect to the debt securities of any series at the time outstanding occurs, the principal
amount of all the debt securities of that series (or, in the case of any such original issue discount security, such specified
amount) will automatically, and without any action by the applicable trustee or any holder, become immediately due and payable,
together with any accrued and unpaid interest thereon. After any such acceleration, but before a judgment or decree based on acceleration,
the holders of a majority in principal amount of the outstanding debt securities of that series may, under certain circumstances,
rescind and annul such acceleration if all events of default, other than the non-payment of accelerated principal (or other specified
amount), have been cured or waived as provided in the applicable Indenture. For information as to waiver of defaults, see “—Modification
and Waiver” below.
Subject to the provisions in the indentures
relating to the duties of the trustees in case an event of default has occurred and is continuing, each trustee will be under no
obligation to exercise any of its rights or powers under the applicable indenture at the request or direction of any of the holders,
unless such holders have offered to such trustee reasonable security or indemnity. Subject to such provisions for the indemnification
of the trustees, the holders of a majority in principal amount of the outstanding debt securities of any series will have the right
to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust
or power conferred on the trustee with respect to the debt securities of that series.
No holder of a debt security of any series
will have any right to institute any proceeding with respect to the applicable indenture, or for the appointment of a receiver
or a trustee, or for any other remedy thereunder, unless:
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such holder has previously given to the trustee under the applicable indenture written notice of a continuing event of default
with respect to the debt securities of that series;
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the holders of not less than 25% in principal amount of the outstanding debt securities of that series have made written request,
and such holder or holders have offered reasonable indemnity, to the trustee to institute such proceeding as trustee; and
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the trustee has failed to institute such proceeding, and has not received from the holders of a majority in principal amount
of the outstanding debt securities of that series a direction inconsistent with such request, within 60 days after such notice,
request and offer.
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However, such limitations do not apply to
a suit instituted by a holder of a debt security for the enforcement of payment of the principal of or any premium or interest
on such debt security on or after the applicable due date specified in such debt security.
We will be required to furnish to each trustee
annually, within 150 days after the end of each fiscal year, a certificate by certain of our officers as to whether or not we,
to their knowledge, are in default in the performance or observance of any of the terms, provisions and conditions of the applicable
indenture and, if so, specifying all such known defaults.
Modification and Waiver
Unless otherwise specified in the prospectus
supplement, modifications and amendments of an indenture may be made by us and the applicable trustee with the consent of the holders
of a majority in principal amount of the outstanding debt securities of each series affected by such modification or amendment.
However, no such modification or amendment may, without the consent of the holder of each outstanding debt security affected thereby:
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change the stated maturity of the principal of, or time for payment of any installment of principal of or interest on, any
debt security;
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reduce the principal amount of, or any premium or the rate of interest on, any debt security;
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reduce the amount of principal of an original issue discount security or any other debt security payable upon acceleration
of the maturity thereof;
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change the place or the coin or currency of payment of principal of, or any premium or interest on, any debt security;
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impair the right to institute suit for the enforcement of any payment due on any debt security;
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modify the subordination provisions in the case of subordinated debt securities;
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reduce the percentage in principal amount of outstanding debt securities of any series, the consent of whose holders is required
for modification or amendment of the indenture;
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reduce the percentage in principal amount of outstanding debt securities of any series necessary for waiver of compliance with
certain provisions of the indenture or for waiver of certain defaults; or
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modify such provisions with respect to modification, amendment or waiver, except to increase any such percentage or to provide
that certain other provisions of the indenture cannot be modified or waived without the consent of the holder of each outstanding
debt security affected thereby.
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The holders of a majority in principal amount
of the outstanding debt securities of any series may waive compliance by us with certain restrictive provisions of the applicable
indenture. The holders of a majority in principal amount of the outstanding debt securities of any series may waive any past default
under the applicable indenture, except a default in the payment of principal, premium or interest and certain covenants and provisions
of the indenture which cannot be amended without the consent of the holder of each outstanding debt security of such series.
Each of the indentures provides that in
determining whether the holders of the requisite principal amount of the outstanding debt securities have given or taken any direction,
notice, consent, waiver or other action under such indenture as of any date:
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the principal amount of an original issue discount security that will be deemed to be outstanding will be the amount of the
principal that would be due and payable as of such date upon acceleration of maturity to such date;
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the principal amount of a debt security denominated in one or more foreign currencies or currency units that will he deemed
to be outstanding will be the United States-dollar equivalent, determined as of such date in the manner prescribed for such debt
security, of the principal amount of such debt security (or, in the case of an original issue discount security the United States
dollar equivalent on the date of original issuance of such security of the amount determined as provided immediately above); and
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certain debt securities, including those owned by us or any of our other affiliates, will not be deemed to be outstanding.
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Except in certain limited circumstances,
we will be entitled to set any day as a record date for the purpose of determining the holders of outstanding debt securities of
any series entitled to give or take any direction, notice, consent, waiver or other action under the applicable indenture, in the
manner and subject to the limitations provided in the indenture. In certain limited circumstances, the trustee will be entitled
to set a record date for action by holders. If a record date is set for any action to be taken by holders of a particular series,
only persons who are holders of outstanding debt securities of that series on the record date may take such action.
Optional Redemption
If specified in the applicable prospectus
supplement, we may elect to redeem all or part of the outstanding debt securities of a series from time to time before the maturity
date of the debt securities of that series. Upon such election, we will notify the indenture trustee of the redemption date and
the principal amount of debt securities of the series to be redeemed. If less than all the debt securities of the series are to
be redeemed, the particular debt securities of that series to be redeemed will be selected by the depositary in accordance with
its procedures. The applicable prospectus supplement will specify the redemption price for the debt securities to be redeemed (or
the method of calculating such price), in each case in accordance with the terms and conditions of those debt securities.
Notice of redemption will be given to each
holder of the debt securities to be redeemed not less than 30 nor more than 60 days prior to the date set for such redemption.
This notice will include the following information, as applicable: the redemption date; the redemption price (or the method of
calculating such price); if less than all of the outstanding debt securities of such series are to be redeemed, the identification
(and, in the case of partial redemption, the respective principal amounts) of the particular debt securities to be redeemed; that
on the redemption date the redemption price will become due and payable upon each security to be redeemed and, if applicable, that
interest thereon will cease to accrue after such date; the place or places where such debt securities are to be surrendered for
payment of the redemption price; and that the redemption is for a sinking fund, if such is the case.
Prior to any redemption date, we will deposit
or cause to be deposited with the indenture trustee or with a paying agent (or, if we are acting as our own paying agent with respect
to the debt securities being redeemed, we will segregate and hold in trust as provided in the applicable indenture) an amount of
money sufficient to pay the aggregate redemption price of, and (except if the redemption date shall be an interest payment date
or the debt securities of such series provide otherwise) accrued interest on, all of the debt securities or the part thereof to
be redeemed on that date. On the redemption date, the redemption price will become due and payable upon all of the debt securities
to be redeemed, and interest, if any, on the debt securities to be redeemed will cease to accrue from and after that date. Upon
surrender of any such debt securities for redemption, we will pay those debt securities surrendered at the redemption price together,
if applicable, with accrued interest to the redemption date.
Any debt securities to be redeemed only
in part must be surrendered at the office or agency established by us for such purpose, and we will execute, and the indenture
trustee will authenticate and deliver to a holder without service charge, new debt securities of the same series and of like tenor,
of any authorized denominations as requested by that holder, in a principal amount equal to and in exchange for the unredeemed
portion of the debt securities that holder surrenders.
Satisfaction and Discharge
Each indenture will be discharged and will
cease to be of further effect as to all outstanding debt securities of any series issued thereunder, when:
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all outstanding debt securities of that series that have been authenticated (except lost, stolen or destroyed debt securities
that have been replaced or paid and debt securities for whose payment money has theretofore been deposited in trust and thereafter
repaid to us or discharged from such trust) have been delivered to the trustee for cancellation; or
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all outstanding debt securities of that series that have not been delivered to the trustee for cancellation have become due
and payable or will become due and payable at their stated maturity within one year or are to be called for redemption within one
year under arrangements satisfactory to the trustee;
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and in either case we have irrevocably deposited
with the trustee as trust funds for such purpose money in an amount sufficient, without consideration of any reinvestment of interest,
to pay and discharge the entire indebtedness of such debt securities not delivered to the trustee for cancellation, for principal,
premium, if any, and accrued interest to the date of such deposit (in the case of debt securities that have become due and payable)
or to the stated maturity or redemption date;
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we have paid or caused to be paid all other sums payable by us under the indenture with respect to the debt securities of that
series; and
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we have delivered an officer’s certificate and an opinion of counsel to the trustee stating that all conditions precedent
to satisfaction and discharge of the indenture with respect to the debt securities of that series have been complied with.
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Legal Defeasance and Covenant Defeasance
If and to the extent indicated in the applicable
prospectus supplement, we may elect, at our option at any time, to have provisions of the indentures relating to defeasance and
discharge of indebtedness, which we call “legal defeasance,” relating to defeasance of certain restrictive covenants
applied to the debt securities of any series, or to any specified part of a series, which we call “covenant defeasance.”
Legal Defeasance
. The indentures
provide that, upon our exercise of our option (if any) to have the provisions relating to legal defeasance applied to any debt
securities, we will be discharged from all our obligations, and, if such debt securities are subordinated debt securities, the
provisions of the subordinated indenture relating to subordination will cease to be effective, with respect to such debt securities
(except for certain obligations to convert, exchange or register the transfer of debt securities, to replace stolen, lost or mutilated
debt securities, to maintain paying agencies and to hold moneys for payment in trust) upon the deposit in trust for the benefit
of the holders of such debt securities of money or United States government obligations, or both, which, through the payment of
principal and interest in respect thereof in accordance with their terms, will provide money in an amount sufficient to pay the
principal of and any premium and interest on such debt securities on the respective stated maturities in accordance with the terms
of the applicable indenture and such debt securities. Such defeasance or discharge may occur only if, among other things:
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we have delivered to the applicable trustee an opinion of counsel to the effect that we have received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has been a change in tax law, in either case to the
effect that holders of such debt securities will not recognize gain or loss for federal income tax purposes as a result of such
deposit and legal defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times
as would have been the case if such deposit and legal defeasance were not to occur;
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no event of default or event that with the passing of time or the giving of notice, or both, shall constitute an event of default
shall have occurred and be continuing at the time of such deposit;
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such deposit and legal defeasance will not result in a breach or violation of, or constitute a default under, any agreement
or instrument (other than the applicable indenture) to which we are a party or by which we are bound;
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we must deliver to the trustee an officer’s certificate stating that the deposit was not made by us with the intent of
preferring the holders of the debt securities over any of our other creditors or with the intent of defeating, hindering, delaying
or defrauding any of our other creditors or others;
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we must deliver to the trustee an officer’s certificate stating that all conditions precedent set forth in the items
set forth immediately above and the item set forth immediately below, as applicable, have been complied with;
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in the case of subordinated debt securities, at the time of such deposit, no default in the payment of all or a portion of
principal of (or premium, if any) or interest on any of our senior debt shall have occurred and be continuing, no event of default
shall have resulted in the acceleration of any of our senior debt and no other event of default with respect to any of our senior
debt shall have occurred and be continuing permitting after notice or the lapse of time, or both, the acceleration thereof: and
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we have delivered to the trustee an opinion of counsel to the effect that all conditions precedent set forth in first, third
or fourth item above have been complied with.
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Covenant Defeasance
. The indentures
provide that, upon our exercise of our option (if any) to have the covenant defeasance provisions applied to any debt securities,
we may omit to comply with certain restrictive covenants (but not to conversion, if applicable), including those that may be described
in the applicable prospectus supplement, the occurrence of certain events of default, which are described above in the fifth item
listed under “Events of Default” above and any that may be described in the applicable prospectus supplement, will
not be deemed to either be or result in an event of default and, if such debt securities are subordinated debt securities, the
provisions of the subordinated indenture relating to subordination will cease to be effective, in each case with respect to such
debt securities. In order to exercise such option, we must deposit, in trust for the benefit of the holders of such debt securities,
money or United States government obligations, or both, which, through the payment of principal and interest in respect thereof
in accordance with their terms, will provide money in an amount sufficient to pay the principal of and any premium and interest
on such debt securities on the respective stated maturities in accordance with the terms of the applicable indenture and such debt
securities. Such covenant defeasance may occur only if we have delivered to the applicable trustee an opinion of counsel that in
effect says that holders of such debt securities will not recognize gain or loss for federal income tax purposes as a result of
such deposit and covenant defeasance and will be subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and covenant defeasance were not to occur, and the requirements set forth
in the second, third, fourth, fifth, sixth and seventh items above are satisfied. If we exercise this option with respect to any
debt securities and such debt securities were declared due and payable because of the occurrence of any event of default, the amount
of money and United States government obligations so deposited in trust would be sufficient to pay amounts due on such debt securities
at the time of their respective stated maturities but may not be sufficient to pay amounts due on such debt securities upon any
acceleration resulting from such event of default. In such case, we would remain liable for such payments.
Notices
We will mail notices to holders of debt
securities at the addresses that appear in the security register.
Title
We may treat the person in whose name a
debt security is registered as the absolute owner, whether or not such debt security may be overdue, for the purpose of making
payment and for all other purposes.
Information Concerning the Indenture Trustee
The indenture trustee undertakes to perform
only those duties as are specifically set forth in the applicable indenture. The indenture trustee must use the same degree of
care as a prudent person would exercise or use in the conduct of his or her own affairs. The indenture trustee shall be under no
obligation to exercise any of the rights or powers vested in it by an indenture at the request or direction of any of the applicable
holders pursuant to such indenture unless such holders shall have offered to the indenture trustee security or indemnity satisfactory
to the trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
Payment and Paying Agents
Unless otherwise indicated in the applicable
prospectus supplement, payment of interest on a debt security on any interest payment date will be made to the person in whose
name such debt security (or one or more predecessor securities) is registered at the close of business on the regular record date
for such interest.
Unless otherwise indicated in the applicable
prospectus supplement, principal of and any premium and interest on the debt securities of a particular series will be payable
at the office of such paying agent or paying agents as we may designate for such purpose from time to time, except that at our
option payment of any interest on debt securities in certificated loan may be made by check mailed to the address of the person
entitled thereto as such address appears in the security register. Unless otherwise indicated in the applicable prospectus supplement,
the corporate trust office of the trustee under the senior indenture in The City of New York will be designated as sole paying
agent for payments with respect to senior debt securities of each series, and the corporate trust office of the trustee under the
subordinated indenture in The City of New York will be designated as the sole paying agent for payment with respect to subordinated
debt securities of each series. Any other paying agents initially designated by us for the debt securities of a particular series
will be named in the applicable prospectus supplement. We may at any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any paying agent acts, except that we will be required to maintain
a paying agent in each place of payment for the debt securities of a particular series.
All money paid by us to a paying agent for
the payment of the principal of or any premium or interest on any debt security which remain unclaimed at the end of two years
after such principal, premium or interest has become due and payable will be repaid to us, and the holder of such debt security
thereafter may look only to us for payment.
Governing Law
The indentures and the debt securities will
be governed by and construed in accordance with the laws of the state of New York.
DESCRIPTION
OF capital STOCK
Authorized and Outstanding Capital Stock
Our authorized capital stock consists of
300,000,000 shares of common stock, $0.001 par value per share, 3,553,000 shares of non-voting common stock, $0.001 par value per
share, and 10,000,000 shares of preferred stock, $0.001 par value per share, of which 1,684,375 shares are designated as Series A
Cumulative Redeemable Convertible Preferred Stock, or Series A Preferred Stock, and 1,580,790 shares are designated as Series B
Cumulative Convertible Preferred Stock, or Series B Preferred Stock. As of April 12, 2017, there were 41,726,402 shares of common
stock, 2,100,931 shares of non-voting common stock, no shares of Series A Preferred Stock and 926,942 shares of Series B Preferred
Stock issued and outstanding. The following description of our capital stock does not purport to be complete and should be reviewed
in conjunction with our certificate of incorporation, including our Certificate of Designations, Powers, Preferences and Rights
of the Series A Preferred Stock, or Series A Certificate of Designations, our Certificate of Designations, Powers, Preferences
and Rights of the Series B Preferred Stock, or Series B Certificate of Designations, and our bylaws. See “Where
You Can Find Additional Information.”
Common Stock
All outstanding shares of our common stock
are fully paid and nonassessable. The following summarizes the rights of holders of our common stock:
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a holder of common stock is entitled to one vote per share on all matters to be voted upon generally by the stockholders;
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subject to preferences that may apply to shares of preferred stock outstanding, the holders of common stock are entitled to
receive lawful dividends as may be declared by our Board of Directors, or the Board;
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upon our liquidation, dissolution or winding up, the holders of shares of common stock are entitled to receive a pro rata portion
of all our assets remaining for distribution after satisfaction of all our liabilities and the payment of any liquidation preference
of any outstanding preferred stock;
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there are no redemption or sinking fund provisions applicable to our common stock; and
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there are no preemptive or conversion rights applicable to our common stock.
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Non-Voting Common Stock
The rights and preferences of shares of
our non-voting common are substantially the same in all respects to the rights and preferences of shares of our common stock, except
that (i) the holders of shares of non-voting common stock are not be entitled to vote, (ii) shares of non-voting common stock are
convertible into shares of common stock, and (iii) shares of non-voting common stock are not listed on any stock exchange, including
The NASDAQ Capital Market.
The following summarizes the rights of holders
of our non-voting common stock:
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a holder of non-voting common stock is not entitled to vote on any matter submitted to a vote of the stockholders, however
such holders are entitled to prior notice of, and to attend and observe, all meetings of the stockholders;
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subject to preferences that may apply to shares of preferred stock issued and outstanding, the holders of non-voting common
stock are entitled to receive lawful dividends as may be declared by the Board on parity in all respects with the holders of common
stock, provided that if the holders of common stock become entitled to receive a divided or distribution of shares of common stock,
holders of non-voting common stock shall receive, in lieu of the shares of common stock, an equal number of shares of non-voting
common stock;
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upon liquidation, dissolution or winding up Pacific Ethanol, the holders of shares of common stock and non-voting common stock
will be entitled to receive a pro rata portion of all of our assets remaining for distribution after satisfaction of all our liabilities
and the payment of any liquidation preference of any outstanding preferred stock;
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there are no redemption or sinking fund provisions applicable to our non-voting common stock; and
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there are no preemptive rights applicable to our non-voting common stock.
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Conversion
Each share of non-voting common stock is
convertible at the option of the holder into one share of our common stock at any time. The conversion price is subject to customary
adjustment for stock splits, stock combinations, stock dividends, mergers, consolidations, reorganizations, share exchanges, reclassifications,
distributions of assets and issuances of convertible securities, and the like.
No shares of non-voting common stock may
be converted into common stock if the holder of such shares or any of its affiliates would, after such conversion, beneficially
own in excess of 9.99% of our outstanding shares of common stock (sometimes referred to as the Blocker). The Blocker applicable
to the conversion of shares of non-voting common stock may be raised or lowered at the option of the holder to any percentage not
in excess of 9.99%, except that any increase will only be effective upon 61-days’ prior notice to us.
When shares of non-voting common stock cease
to be held by the initial holder or an affiliate of an initial holder of such shares, such shares shall automatically convert into
one share of our common stock.
Preferred Stock
Our Board is authorized to issue from time
to time, in one or more designated series, any or all of our authorized but unissued shares of preferred stock with dividend, redemption,
conversion, exchange, voting and other provisions as may be provided in that particular series. The issuance need not be approved
by our common stockholders and need only be approved by holders, if any, of our Series A Preferred Stock and Series B Preferred
Stock if, as described below, the shares of preferred stock to be issued have preferences that are senior to or on parity with
those of our Series A Preferred Stock and Series B Preferred Stock.
The rights of the holders of our common
stock, Series A Preferred Stock and Series B Preferred Stock will be subject to, and may be adversely affected by, the rights of
the holders of any preferred stock that may be issued in the future. Issuance of a new series of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of entrenching
our Board and making it more difficult for a third-party to acquire, or discourage a third-party from acquiring, a majority of
our outstanding voting stock. The following is a summary of the terms of the Series A Preferred Stock and the Series B Preferred
Stock.
Series B Preferred Stock
As of April 12, 2017, 926,942 shares of
Series B Preferred Stock were issued and outstanding and an aggregate of 1,419,210 shares of Series B Preferred Stock had been
converted into shares of our common stock. The converted shares of Series B Preferred Stock have been returned to undesignated
preferred stock. A balance of 653,848 shares of Series B Preferred Stock remain authorized for issuance.
Rank and Liquidation Preference
Shares of Series B Preferred Stock rank
prior to our common stock as to distribution of assets upon liquidation events, which include a liquidation, dissolution or winding
up of Pacific Ethanol, whether voluntary or involuntary. The liquidation preference of each share of Series B Preferred Stock is
equal to $19.50, or the Series B Issue Price, plus any accrued but unpaid dividends on the Series B Preferred Stock. If assets
remain after the amounts are distributed to the holders of Series B Preferred Stock, the assets shall be distributed pro rata,
on an as-converted to common stock basis, to the holders of our common stock and Series B Preferred Stock. The written consent
of a majority of the outstanding shares of Series B Preferred Stock is required before we can authorize the issuance of any class
or series of capital stock that ranks senior to or on parity with shares of Series B Preferred Stock.
Dividend Rights
As long as shares of Series B Preferred
Stock remain outstanding, each holder of shares of Series B Preferred Stock are entitled to receive, and shall be paid quarterly
in arrears, in cash out of funds legally available therefor, cumulative dividends, in an amount equal to 7.0% of the Series B Issue
Price per share per annum with respect to each share of Series B Preferred Stock. The dividends may, at our option, be paid in
shares of Series B Preferred Stock valued at the Series B Issue Price. In the event we declare, order, pay or make a dividend or
other distribution on our common stock, other than a dividend or distribution made in common stock, the holders of the Series B
Preferred Stock shall be entitled to receive with respect to each share of Series B Preferred Stock held, any dividend or distribution
that would be received by a holder of the number of shares of our common stock into which the Series B Preferred Stock is convertible
on the record date for the dividend or distribution.
The Series B Preferred Stock ranks pari
passu with respect to dividends and liquidation rights with the Series A Preferred Stock and pari passu with respect to any class
or series of capital stock specifically ranking on parity with the Series B Preferred Stock.
Optional Conversion Rights
Each share of Series B Preferred Stock is
convertible at the option of the holder into shares of our common stock at any time. Each share of Series B Preferred Stock is
convertible into the number of shares of common stock as calculated by multiplying the number of shares of Series B Preferred Stock
to be converted by the Series B Issue Price, and dividing the result thereof by the conversion price. The conversion price was
initially $682.50 per share of Series B Preferred Stock, subject to adjustment; therefore, each share of Series B Preferred Stock
was initially convertible into 0.03 shares of common stock, which number is equal to the quotient of the Series B Issue Price of
$19.50 divided by the initial conversion price of $682.50 per share of Series B Preferred Stock. Accrued and unpaid dividends are
to be paid in cash upon any conversion.
Mandatory Conversion Rights
In the event of a Transaction which will
result in an internal rate of return to holders of Series B Preferred Stock of 25% or more, each share of Series B Preferred Stock
shall, concurrently with the closing of the Transaction, be converted into shares of common stock. A “Transaction”
is defined as a sale, lease, conveyance or disposition of all or substantially all of our capital stock or assets or a merger,
consolidation, share exchange, reorganization or other transaction or series of related transactions (whether involving us or a
subsidiary) in which the stockholders immediately prior to the transaction do not retain a majority of the voting power in the
surviving entity. Any mandatory conversion will be made into the number of shares of common stock determined on the same basis
as the optional conversion rights above. Accrued and unpaid dividends are to be paid in cash upon any conversion.
No shares of Series B Preferred Stock will
be converted into common stock on a mandatory basis unless at the time of the proposed conversion we have on file with the Securities
and Exchange Commission an effective registration statement with respect to the shares of common stock issued or issuable to the
holders on conversion of the Series B Preferred Stock then issued or issuable to the holders and the shares of common stock are
eligible for trading on The NASDAQ Stock Market (or approved by and listed on a stock exchange approved by the holders of 66 2/3%
of the then outstanding shares of Series B Preferred Stock).
Conversion Price Adjustments
The conversion price is subject to customary
adjustment for stock splits, stock combinations, stock dividends, mergers, consolidations, reorganizations, share exchanges, reclassifications,
distributions of assets and issuances of convertible securities, and the like. The conversion price is also subject to downward
adjustments if we issue shares of common stock or securities convertible into or exercisable for shares of common stock, other
than specified excluded securities, at per share prices less than the then effective conversion price. In this event, the conversion
price shall be reduced to the price determined by dividing (i) an amount equal to the sum of (a) the number of shares of common
stock outstanding immediately prior to the issue or sale multiplied by the then existing conversion price, and (b) the consideration,
if any, received by us upon such issue or sale, by (ii) the total number of shares of common stock outstanding immediately after
the issue or sale. For purposes of determining the number of shares of common stock outstanding as provided in clauses (i) and
(ii) above, the number of shares of common stock issuable upon conversion of all outstanding shares of Series B Preferred Stock,
and the exercise of all outstanding securities convertible into or exercisable for shares of common stock, will be deemed to be
outstanding.
The conversion price will not be adjusted
in the case of the issuance or sale of the following: (i) securities issued to our employees, officers or directors or options
to purchase common stock granted by us to our employees, officers or directors under any option plan, agreement or other arrangement
duly adopted by us and the grant of which is approved by the compensation committee of our Board; (ii) the Series B Preferred Stock
and any common stock issued upon conversion of the Series B Preferred Stock; (iii) securities issued on the conversion of any convertible
securities, in each case, outstanding on the date of the filing of the Series B Certificate of Designations; and (iv) securities
issued in connection with a stock split, stock dividend, combination, reorganization, recapitalization or other similar event for
which adjustment is made in accordance with the foregoing.
Voting Rights and Protective Provisions
The Series B Preferred Stock votes together
with all other classes and series of our voting stock as a single class on all actions to be taken by our stockholders. Each share
of Series B Preferred Stock entitles the holder thereof to the number of votes equal to the number of shares of common stock into
which each share of Series B Preferred Stock is convertible on all matters to be voted on by our stockholders, however, the number
of votes for each share of Series B Preferred Stock may not exceed the number of shares of common stock into which each share of
Series B Preferred Stock would be convertible if the applicable conversion price were $682.50 (subject to appropriate adjustment
for stock splits, stock dividends, combinations and other similar recapitalizations affecting the shares).
We are not permitted, without first obtaining
the written consent of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock voting as
a separate class, to:
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increase or decrease the total number of authorized shares of Series B Preferred Stock or the authorized shares of our common
stock reserved for issuance upon conversion of the Series B Preferred Stock (except as otherwise required by our certificate of
incorporation or the Series B Certificate of Designations);
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increase or decrease the number of authorized shares of preferred stock or common stock (except as otherwise required by our
certificate of incorporation or the Series B Certificate of Designations);
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alter, amend, repeal, substitute or waive any provision of our certificate of incorporation or our bylaws, so as to affect
adversely the voting powers, preferences or other rights, including the liquidation preferences, dividend rights, conversion rights,
redemption rights or any reduction in the stated value of the Series B Preferred Stock, whether by merger, consolidation or otherwise;
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authorize, create, issue or sell any securities senior to or on parity with the Series B Preferred Stock or securities that
are convertible into securities senior to or on parity the Series B Preferred Stock with respect to voting, dividend, liquidation
or redemption rights, including subordinated debt;
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authorize, create, issue or sell any securities junior to the Series B Preferred Stock other than common stock or securities
that are convertible into securities junior to Series B Preferred Stock other than common stock with respect to voting, dividend,
liquidation or redemption rights, including subordinated debt;
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authorize, create, issue or sell any additional shares of Series B Preferred Stock other than the Series B Preferred Stock
initially authorized, created, issued and sold, Series B Preferred Stock issued as payment of dividends and Series B Preferred
Stock issued in replacement or exchange therefore;
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engage in a Transaction that would result in an internal rate of return to holders of Series B Preferred Stock of less than
25%;
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declare or pay any dividends or distributions on our capital stock in a cumulative amount in excess of the dividends and distributions
paid on the Series B Preferred Stock in accordance with the Series B Certificate of Designations;
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authorize or effect the voluntary liquidation, dissolution, recapitalization, reorganization or winding up of our business;
or
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purchase, redeem or otherwise acquire any of our capital stock other than Series B Preferred Stock, or any warrants or other
rights to subscribe for or to purchase, or any options for the purchase of, our capital stock or securities convertible into or
exchangeable for our capital stock.
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Reservation of Shares
We initially were required to reserve 3,000,000
shares of common stock for issuance upon conversion of shares of Series B Preferred Stock and are required to maintain a sufficient
number of reserved shares of common stock to allow for the conversion of all shares of Series B Preferred Stock.
Series A Preferred Stock
As of April 12, 2017, no shares of Series
A Preferred Stock were issued and outstanding and an aggregate of 5,315,625 shares of Series A Preferred Stock had been converted
into shares of our common stock and returned to undesignated preferred stock. A balance of 1,684,375 shares of Series A Preferred
Stock remain authorized for issuance. The rights and preferences of the Series A Preferred Stock are substantially the same as
the Series B Preferred Stock, except as follows:
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the Series A Issue Price, on which the Series A Preferred Stock liquidation preference is based, is $16.00 per share;
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dividends accrue and are payable at a rate per annum of 5.0% of the Series A Issue Price per share;
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each share of Series A Preferred Stock is convertible at a rate equal to the Series A Issue Price divided by an initial conversion
price of $840.00 per share;
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holders of the Series A Preferred Stock have a number of votes equal to the number of shares of common stock into which each
share of Series A Preferred Stock is convertible on all matters to be voted on by our stockholders, voting together as a single
class; provided, however, that the number of votes for each share of Series A Preferred Stock shall not exceed the number of shares
of common stock into which each share of Series A Preferred Stock would be convertible if the applicable conversion price were
$943.95 (subject to appropriate adjustment for stock splits, stock dividends, combinations and other similar recapitalizations
affecting the shares); and
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we are not permitted, without first obtaining the written consent of the holders of at least a majority of the then outstanding
shares of Series A Preferred Stock voting as a separate class, to:
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change the number of members of our Board to be more than nine members or less than seven members;
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effect any material change in our industry focus or that of our subsidiaries, considered on a consolidated basis;
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authorize or engage in, or permit any subsidiary to authorize or engage in, any transaction or series of transactions with
one of our or our subsidiaries’ current or former officers, directors or members with value in excess of $100,000, excluding
compensation or the grant of options approved by our Board; or
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authorize or engage in, or permit any subsidiary to authorize or engage in, any transaction with any entity or person that
is affiliated with any of our or our subsidiaries’ current or former directors, officers or members, excluding any director
nominated by the initial holder of the Series B Preferred Stock.
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Preemptive Rights
Holders of our Series A Preferred Stock
have preemptive rights to purchase a pro rata portion of all capital stock or securities convertible into capital stock that we
issue, sell or exchange, or agree to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange. We must deliver
each holder of our Series A Preferred Stock a written notice of any proposed or intended issuance, sale or exchange of capital
stock or securities convertible into capital stock which must include a description of the securities and the price and other terms
upon which they are to be issued, sold or exchanged together with the identity of the persons or entities (if known) to which or
with which the securities are to be issued, sold or exchanged, and an offer to issue and sell to or exchange with the holder of
the Series A Preferred Stock the holder’s pro rata portion of the securities, and any additional amount of the securities
should the other holders of Series A Preferred Stock subscribe for less than the full amounts for which they are entitled to subscribe.
In the case of a public offering of our common stock for a purchase price of at least $12.00 per share and a total gross offering
price of at least $50 million, the preemptive rights of the holders of the Series A Preferred Stock shall be limited to 50% of
the securities. Holders of our Series A Preferred Stock have a 30 day period during which to accept the offer. We will have 90
days from the expiration of this 30 day period to issue, sell or exchange all or any part of the securities as to which the offer
has not been accepted by the holders of the Series A Preferred Stock, but only as to the offerees or purchasers described in the
offer and only upon the terms and conditions that are not more favorable, in the aggregate, to the offerees or purchasers or less
favorable to us than those contained in the offer.
The preemptive rights of the holders of
the Series A Preferred Stock do not apply to any of the following securities: (i) securities issued to our employees, officers
or directors or options to purchase common stock granted by us to our employees, officers or directors under any option plan, agreement
or other arrangement duly adopted by us and the grant of which is approved by the compensation committee of our Board; (ii) the
Series A Preferred Stock and any common stock issued upon conversion of the Series A Preferred Stock; (iii) securities issued on
the conversion of any convertible securities, in each case, outstanding on the date of the filing of the Series A Certificate of
Designations; (iv) securities issued in connection with a stock split, stock dividend, combination, reorganization, recapitalization
or other similar event for which adjustment is made in accordance with the Series A Certificate of Designations; and (v) the issuance
of our securities issued for consideration other than cash as a result of a merger, consolidation, acquisition or similar business
combination by us approved by our Board.
Anti-Takeover Effects of Delaware Law and Our Certificate
of Incorporation and Bylaws
A number of provisions of Delaware law,
our certificate of incorporation and our bylaws contain provisions that could have the effect of delaying, deferring and discouraging
another party from acquiring control of Pacific Ethanol. These provisions, which are summarized below, are expected to discourage
coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire
control of Pacific Ethanol to first negotiate with our Board. We believe that the benefits of increased protection of our potential
ability to negotiate with an unfriendly or unsolicited acquiror outweigh the disadvantages of discouraging a proposal to acquire
Pacific Ethanol because negotiation of these proposals could result in an improvement of their terms. However, the existence of
these provisions also could limit the price that investors might be willing to pay for our securities.
Undesignated Preferred Stock
The ability to authorize undesignated preferred
stock makes it possible for our Board to issue preferred stock with voting or other rights or preferences that could impede the
success of any attempt to acquire us. These and other provisions may have the effect of deferring hostile takeovers or delaying
changes in control or management of Pacific Ethanol.
Advance Notice Requirements for Stockholder
Proposals and Director Nominations
Our bylaws provide that a stockholder seeking
to bring business before an annual meeting of stockholders, or to nominate candidates for election as directors, must provide timely
notice of such stockholder’s intention in writing. To be timely, a stockholder nominating individuals for election to the
Board or proposing business must provide advanced notice to Pacific Ethanol (a) not later than the close of business on the 90th
day, nor earlier than the close of business on the 120th day in advance of the anniversary of the previous year’s annual
meeting if such meeting is to be held on a day which is not more than thirty (30) days in advance of the anniversary of the previous
year’s annual meeting or not later than seventy (70) days after the anniversary of the previous year’s annual meeting,
and (b) with respect to any other annual meeting of stockholders, the close of business on the 10th day following the date of public
disclosure of the date of such meeting. In the event we call a special meeting of stockholders for the purpose of electing one
or more directors to the Board, any stockholder entitled to vote in such election of directors may nominate a person or persons
(as the case may be) for election to such position(s) as specified in our notice of meeting, if the stockholder’s notice
is delivered to us not later than the close of business on the 90th day prior to such special meeting and not earlier than the
close of business on the later of the 120th day prior to such special meeting or the 10th day following the date of public disclosure
of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting.
Delaware Anti-Takeover Statute
We are subject to the provisions of Section
203 of the Delaware General Corporation Law (sometimes referred to as Section 203) regulating corporate takeovers. In general,
Section 203 prohibits a publicly-held Delaware corporation from engaging, under specified circumstances, in a business combination
with an interested stockholder for a period of three years following the date the person became an interested stockholder unless:
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prior to the date of the transaction, the board of directors of the corporation approved either the business combination or
the transaction which resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of
determining the number of shares of voting stock outstanding (but not the outstanding voting stock owned by the stockholder) (1)
shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange
offer; or
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on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual
or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding
voting stock that is not owned by the interested stockholder.
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Generally, a business combination includes
a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested
stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of
interested stockholder status, did own 15% or more of a corporation’s outstanding voting securities. We expect the existence
of this provision to have an anti-takeover effect with respect to transactions the Board does not approve in advance. We also anticipate
that Section 203 may also discourage attempts that might result in a premium over the market price for the shares of our common
stock held by stockholders.
The provisions of Delaware law, our certificate
of incorporation and our bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence,
they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile
takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these
provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
DESCRIPTION
OF PREFERRED STOCK
We may issue up to 6,734,835 shares of preferred
stock, par value $0.001 per share, from time to time in one or more classes or series, with the exact terms of each series or class
established by our Board. Without seeking stockholder approval, our Board may issue preferred stock with voting and other rights
that are greater than the rights of our common stock and could adversely affect the voting power of the holders of our common stock.
The rights, preferences, privileges and
restrictions of the preferred stock of each series or class will be determined by our Board and set forth in a certificate of designations
relating to such series or class that will amend our Certificate of Incorporation. We will include each certificate of designations
as an exhibit to the registration statement that includes this prospectus, or as an exhibit to a filing with the Securities and
Exchange Commission that is incorporated by reference into this prospectus. The description of preferred stock in any prospectus
supplement will not necessarily describe all of the terms of the preferred stock in detail. You should read the applicable certificate
of designations for a complete description of all of the terms.
This section describes the general terms
of the preferred stock that we may offer using this prospectus. Further terms of the preferred stock will be stated in the applicable
prospectus supplement. The following description and any description of the preferred stock in a prospectus supplement may not
be complete and is subject to and qualified in its entirety by reference to the terms of the certificate of designations.
Terms
You should refer to the applicable prospectus
supplement relating to the offering of any series of preferred stock for specific terms of the shares, including the following
terms:
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the maximum number of shares in the series or class and the distinctive designation;
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number of shares offered and initial offering price;
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the terms on which dividends, if any, will be paid;
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the terms of any preemptive rights;
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the terms on which the shares may be redeemed, if at all;
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the liquidation preference, if any;
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the terms of any retirement or sinking fund for the repurchase or redemption of the shares of the series;
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the terms and conditions, if any, on which the shares of the series shall be convertible into, or exchangeable for, shares
of any other class or classes of capital stock, including the conversion price, rate or other manner of calculation, conversion
period and anti-dilution provisions, if applicable;
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terms and conditions upon which shares will be exchangeable into debt securities or any other securities, including the exchange
price, rate or other manner of calculation, exchange period and any anti-dilution provisions, if applicable;
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the relative ranking and preference as to dividend rights and rights upon liquidation, dissolution or the winding up of our
affairs, including liquidation preference amount;
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any limitation on issuance of any series of preferred stock ranking senior to or on a parity with that series of preferred
stock as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs;
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the voting rights, if any, on the shares of the series;
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any or all other preferences and relative, participating, operational or other special rights or qualifications, limitations
or restrictions of the shares; and
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any material United States federal income tax consequences.
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The issuance of preferred stock may delay,
deter or prevent a change in control.
Ranking
Unless we provide otherwise in an applicable
prospectus supplement, the preferred stock offered through that supplement will, with respect to dividend rights and rights upon
our liquidation, dissolution or winding up, rank:
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senior to all classes or series of our common stock, and to all other equity securities ranking junior to the offered preferred
stock;
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on a parity with all of our equity securities ranking on a parity with the offered preferred stock; and
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junior to all of our equity securities ranking senior to the offered preferred stock.
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As used herein, the term “equity securities”
does not include convertible debt securities.
Voting Rights
Unless otherwise indicated in the applicable
prospectus supplement, holders of our preferred stock will not have any voting rights, except as may be required by applicable
law.
Dividends
Subject to any preferential rights of any
outstanding shares or series of shares, our preferred stockholders are entitled to receive dividends, if any, when and as authorized
by our Board, out of legally available funds, as specified in the applicable prospectus supplement.
Redemption
If we provide for a redemption right in
a prospectus supplement, the preferred stock offered through that supplement will be subject to mandatory redemption or redemption
at our option, in whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in that prospectus
supplement.
Liquidation Preference
In the event of our voluntary or involuntary
dissolution, liquidation, or winding up, the holders of any series of our preferred stock will be entitled to receive, after distributions
to holders of any series or class of our capital shares ranking senior, an amount equal to the stated or liquidation value of the
series plus, if applicable, an amount equal to accrued and unpaid dividends. If the assets and funds to be distributed among the
holders of our preferred stock will be insufficient to permit full payment to the holders, then the holders of our preferred stock
will share ratably in any distribution of our assets in proportion to the amounts that they otherwise would receive on their our
preferred stock if the shares were paid in full.
Conversion Rights
The terms and conditions, if any, upon which
any series of preferred stock is convertible into common stock or other securities will be set forth in the prospectus supplement
relating to the offering of those preferred stock. These terms typically will include number of shares of common stock or other
securities into which the preferred stock is convertible; conversion price (or manner of calculation); conversion period; provisions
as to whether conversion will be at the option of the holders of the preferred stock or at our option; events, if any, requiring
an adjustment of the conversion price; and provisions affecting conversion in the event of the redemption of that series of preferred
stock.
Transfer Agent and Registrar
We will identify in a prospectus supplement
the transfer agent and registrar for any series of preferred stock offered by this prospectus.
DESCRIPTION
OF WARRANTS
The complete terms of the warrants will
be contained in the applicable warrant agreement and warrant. These documents will be included or incorporated by reference as
exhibits to the registration statement of which this prospectus is a part. You should read the warrant and warrant agreement. You
should also read the prospectus supplement, which will contain additional information and which may update or change some of the
information below.
This section describes the general terms
of the warrants to purchase common stock, preferred stock and/or debt securities that we may offer using this prospectus. Further
terms of the warrants will be stated in the applicable prospectus supplement. The following description and any description of
the rights in a prospectus supplement may not be complete and is subject to and qualified in its entirety by reference to the terms
of the warrant and warrant agreement.
General
We may issue additional warrants for the
purchase of common stock, preferred stock and/or debt securities in one or more series. If we offer warrants, we will describe
the terms in a prospectus supplement. Warrants may be offered independently, together with other securities offered by any prospectus
supplement, or through a dividend or other distribution to stockholders and may be attached to or separate from other securities.
Warrants may be issued under a written warrant agreement to be entered into between us and the holder or beneficial owner, or under
a written warrant agreement with a warrant agent specified in a prospectus supplement. A warrant agent would act solely as our
agent in connection with the warrants of a particular series and would not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of those warrants.
The following are some of the terms relating
to a series of warrants that could be described in a prospectus supplement:
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aggregate number of warrants;
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price or prices at which the warrants will be issued;
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designation, number, aggregate principal amount, denominations and terms of the securities that may be purchased on exercise
of the warrants;
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date, if any, on and after which the warrants and the debt securities offered with the warrants, if any, will be separately
transferable;
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purchase price for each security purchasable on exercise of the warrants;
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the terms for changes to or adjustments in the exercise price, if any;
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dates on which the right to purchase certain securities upon exercise of the warrants will begin and end;
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minimum or maximum number of securities that may be purchased at any one time upon exercise of the warrants;
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anti-dilution provisions or other adjustments to the exercise price of the warrants;
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terms of any right that we may have to redeem the warrants;
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effect of any merger, consolidation, sale or other transfer of our business on the warrants and the applicable warrant agreement;
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name and address of the warrant agent, if any;
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information with respect to book-entry procedures;
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any material United States federal income tax considerations; and
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other material terms, including terms relating to transferability, exchange, exercise or amendments of the warrants.
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Until any warrants to purchase our securities
are exercised, holders of the warrants will not have any rights of holders of the underlying securities.
Outstanding Warrants
As of April 12, 2017, we had outstanding
warrants to purchase 244,023 shares of our common stock at exercise prices ranging from $6.09 to $735.00 per share. These outstanding
warrants consist of warrants to purchase an aggregate of 210,503 shares of common stock at an exercise price of $6.09 per share
expiring in 2017 and warrants to purchase an aggregate of 33,520 shares of common stock at an exercise price of $735.00 per share
expiring in 2018.
DESCRIPTION
OF UNITS
The complete terms of the units will be
contained in the unit agreement and any document applicable to the securities comprising the units. These documents will be included
or incorporated by reference as exhibits to the registration statement of which this prospectus is a part. You should read the
unit agreement and any related documents. You also should read the prospectus supplement, which will contain additional information
and which may update or change some of the information below.
This section describes the general terms
of the units that we may offer using this prospectus. Further terms of the units will be stated in the applicable prospectus supplement.
The following description and any description of the units in a prospectus supplement may not be complete and is subject to and
qualified in its entirety by reference to the terms of any agreement relating to the units and the related documents applicable
to the securities constituting the units.
We may issue units, in one or more series,
consisting of any combination of one or more of the other securities described in this prospectus. If we offer units, we will describe
the terms in a prospectus supplement. Units may be issued under a written unit agreement to be entered into between us and the
holder or beneficial owner, or we could issue units under a written unit agreement with a unit agent specified in a prospectus
supplement. A unit agent would act solely as our agent in connection with the units of a particular series and would not assume
any obligation or relationship of agency or trust for or with any holders or beneficial owners of those units.
Each unit will be issued so that the holder
of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations
of a holder of each included security.
The following are some of the unit terms
that could be described in a prospectus supplement:
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aggregate number of units;
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price or prices at which the units will be issued;
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designation and terms of the units and of the securities comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
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effect of any merger, consolidation, sale or other transfer of our business on the units and the applicable unit agreement;
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name and address of the unit agent;
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information with respect to book-entry procedures;
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any material United States federal income tax considerations; and
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other material terms, including terms relating to transferability, exchange, exercise or amendments of the units.
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The provisions described in this section,
as well as those described under “Description of Capital Stock,” “Description of Preferred Stock,” “Description
of Debt Securities,” and “Description of Warrants,” will apply to each unit and to any common stock, preferred
stock, debt security or warrant included in each unit, respectively.
Unless otherwise provided in the applicable
prospectus supplement, the unit agreements will be governed by the laws of the State of New York. The unit agreement under which
a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or
at any time before a specified date. We will file as an exhibit to a filing with the Securities and Exchange Commission that is
incorporated by reference into this prospectus the forms of the unit agreements containing the terms of the units being offered.
The description of units in any prospectus supplement will not necessarily describe all of the terms of the units in detail. You
should read the applicable unit agreements for a complete description of all of the terms.
GLOBAL SECURITIES
Unless otherwise indicated in the applicable
prospectus supplement, securities other than common stock will be issued in the form of one or more global certificates, or “global
securities,” registered in the name of a depositary or its nominee. Unless otherwise indicated in the applicable prospectus
supplement, the depositary will be The Depository Trust Company, commonly referred to as DTC. We expect that DTC’s nominee
will be Cede & Co. Accordingly, we expect Cede & Co. to be the initial registered holder of all securities that are issued
in global form. No person that acquires a beneficial interest in those securities will be entitled to receive a certificate representing
that person’s interest in the securities except as described herein or in the applicable prospectus supplement. Unless and
until definitive securities are issued under the limited circumstances described below, all references to actions by holders of
securities issued in global form will refer to actions taken by DTC upon instructions from its participants, and all references
to payments and notices to holders will refer to payments and notices to DTC or Cede & Co., as the registered holder of these
securities.
DTC is a limited-purpose trust company organized
under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and
a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities
that DTC participants deposit with DTC. DTC also facilitates the settlement among DTC participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in DTC participants’
accounts, thereby eliminating the need for physical movement of certificates. DTC participants include securities brokers and dealers,
banks, trust companies and clearing corporations, and may include other organizations. DTC is a wholly owned subsidiary of the
Depository Trust & Clearing Company, or DTCC. DTCC, in turn, is owned by a number of DTC’s participants and subsidiaries
of DTCC as well as by other financial companies, including the New York Stock Exchange, Inc. and the Financial Industry Regulatory
Authority, Inc. Indirect access to the DTC system also is available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant, either directly or indirectly. The rules applicable
to DTC and DTC participants are on file with the Securities and Exchange Commission.
Persons that are not participants or indirect
participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, securities may do so only
through participants and indirect participants. Under a book-entry format, holders may experience some delay in their receipt of
payments, as such payments will be forwarded by our designated agent to Cede & Co., as nominee for DTC. DTC will forward such
payments to its participants, who will then forward them to indirect participants or holders. Holders will not be recognized by
the relevant registrar, transfer agent, trustee or warrant agent as registered holders of the securities entitled to the benefits
of our Certificate of Incorporation or the applicable indenture, warrant agreement, trust agreement or guarantee. Beneficial owners
that are not participants will be permitted to exercise their rights only indirectly through and according to the procedures of
participants and, if applicable, indirect participants.
Under the rules, regulations and procedures
creating and affecting DTC and its operations as currently in effect, DTC will be required to make book-entry transfers of securities
among participants and to receive and transmit payments to participants. DTC rules require participants and indirect participants
with which beneficial securities owners have accounts to make book-entry transfers and receive and transmit payments on behalf
of their respective account holders.
Because DTC can act only on behalf of participants,
who in turn act only on behalf of participants or indirect participants, and certain banks, trust companies and other persons approved
by it, the ability of a beneficial owner of securities issued in global form to pledge such securities to persons or entities that
do not participate in the DTC system may be limited due to the unavailability of physical certificates for these securities.
We expect DTC to advise us that DTC will
take any action permitted to be taken by a registered holder of any securities under our Certificate of Incorporation or the relevant
indenture, warrant agreement, trust agreement or guarantee only at the direction of one or more participants to whose accounts
with DTC such securities are credited.
Unless otherwise indicated in the applicable
prospectus supplement, a global security will be exchangeable for the relevant definitive securities registered in the names of
persons other than DTC or its nominee only if:
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DTC notifies us that it is unwilling or unable to continue as depositary for that global security or if DTC ceases to be a
clearing agency registered under the Exchange Act when DTC is required to be so registered;
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we execute and deliver to the relevant registrar, transfer agent, trustee and/or warrant agent an order complying with the
requirements of the applicable indenture, trust agreement or warrant agreement that the global security will be exchangeable for
definitive securities in registered form; or
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there has occurred and is continuing a default in the payment of any amount due in respect of the securities or, in the case
of debt securities, an event of default or an event that, with the giving of notice or lapse of time, or both, would constitute
an event of default with respect to these debt securities.
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Any global security that is exchangeable
under the preceding sentence will be exchangeable for securities registered in such names as DTC directs.
Upon the occurrence of any event described
in the preceding paragraph, DTC is generally required to notify all participants of the availability of definitive securities.
Upon DTC surrendering the global security representing the securities and delivery of instructions for re-registration, the registrar,
transfer agent, trustee or warrant agent, as the case may be, will reissue the securities as definitive securities, and then such
persons will recognize the holders of such definitive securities as registered holders of securities entitled to the benefits of
our articles or the relevant indenture trust agreement and/or warrant agreement.
Redemption notices will be sent to Cede
& Co. as the registered holder of the global securities. If less than all of a series of securities are being redeemed, DTC
will determine the amount of the interest of each direct participant to be redeemed in accordance with its then current procedures.
Except as described above, the global security
may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or
to a successor depositary we appoint. Except as described above, DTC may not sell, assign, transfer or otherwise convey any beneficial
interest in a global security evidencing all or part of any securities unless the beneficial interest is in an amount equal to
an authorized denomination for these securities.
The information in this section concerning
DTC and DTC’s book-entry system has been obtained from sources that we believe to be accurate, but we assume no responsibility
for the accuracy thereof. None of us, any indenture trustee, any depositary, any rights agent, any registrar and transfer agent
or any warrant agent, or any agent of any of them, will have any responsibility or liability for any aspect of DTC’s or any
participant’s records relating to, or for payments made on account of, beneficial interests in a global security, or for
maintaining, supervising or reviewing any records relating to such beneficial interests.
Secondary trading in notes and debentures
of corporate issuers is generally settled in clearing-house or next-day funds. In contrast, beneficial interests in a global security,
in some cases, may trade in the DTC’s same-day funds settlement system, in which secondary market trading activity in those
beneficial interests would be required by DTC to settle in immediately available funds. There is no assurance as to the effect,
if any, that settlement in immediately available funds would have on trading activity in such beneficial interests. Also, settlement
for purchases of beneficial interests in a global security upon the original issuance of this security may be required to be made
in immediately available funds.
PLAN OF
DISTRIBUTION
We may offer and sell the securities covered
by this prospectus in any one or more of the following ways:
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to or through underwriters, brokers or dealers;
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directly to one or more other purchasers;
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upon the exercise of rights distributed or issued to our security holders;
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through a block trade in which the broker or dealer engaged to handle the block trade will attempt to sell the securities as
agent, but may position and resell a portion of the block as principal to facilitate the transaction;
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in payment of our and our subsidiaries’ outstanding indebtedness;
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through agents on a best-efforts basis; or
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otherwise through a combination of any of the above methods of sale.
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We may sell the securities being offered
by this prospectus by any other method permitted by law, including sales deemed to be an “at the market” offering as
defined in Rule 415(a)(4) of the Securities Act, including without limitation sales made directly on The NASDAQ Capital Market,
on any other existing trading market for our securities or to or through a market maker.
In addition, we may enter into option, share
lending or other types of transactions that require us to deliver shares of common stock to an underwriter, broker or dealer, who
will then resell or transfer the shares of common stock under this prospectus. We may also enter into hedging transactions with
respect to our securities. For example, we or the selling stockholders may:
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enter into transactions involving short sales of the shares of common stock by underwriters, brokers or dealers;
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sell shares of common stock short and deliver the shares to close out short positions;
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enter into option or other types of transactions that require us or the selling stockholders, as applicable, to deliver shares
of common stock to an underwriter, broker or dealer, who will then resell or transfer the shares of common stock under this prospectus;
or
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loan or pledge the shares of common stock to an underwriter, broker or dealer, who may sell the loaned shares or, in the event
of default, sell the pledged shares.
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We may enter into derivative transactions
with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If
the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered
by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use
securities pledged by us or borrowed from us to settle those sales or to close out any related open borrowings of stock, and may
use securities received from us or selling stockholders in settlement of those derivatives to close out any related open borrowings
of stock. The third party in such sale transactions will be an underwriter identified in the applicable prospectus supplement.
In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the
securities short using this prospectus. Such financial institution or other third party may transfer its economic short position
to investors in our securities or in connection with a concurrent offering of other securities.
Each time we sell securities, we will provide
a prospectus supplement that will name any underwriter, dealer or agent involved in the offer and sale of the securities. The prospectus
supplement will also set forth the terms of the offering, including:
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the purchase price of the securities and the proceeds we will receive from the sale of the securities;
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any underwriting discounts and other items constituting underwriters’ compensation;
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any public offering or purchase price and any discounts or commissions allowed or re-allowed or paid to dealers;
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any commissions allowed or paid to agents;
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any other offering expenses;
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any securities exchanges on which the securities may be listed;
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the method of distribution of the securities;
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the terms of any agreement, arrangement or understanding entered into with the underwriters, brokers or dealers; and
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any other information we think is important.
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If underwriters or dealers are used in the
sale, the securities will be acquired by the underwriters or dealers for their own account. The securities may be sold from time
to time by us in one or more transactions:
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at a fixed price or prices, which may be changed;
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at market prices prevailing at the time of sale;
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at prices related to such prevailing market prices;
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at varying prices determined at the time of sale; or
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Such sales may be effected:
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in transactions on any national securities exchange or quotation service on which the securities may be listed or quoted at
the time of sale;
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in transactions in the over-the-counter market;
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in block transactions in which the broker or dealer so engaged will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate the transaction, or in crosses, in which the same broker acts as an
agent on both sides of the trade;
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through the writing of options; or
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through other types of transactions.
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The securities may be offered to the public
either through underwriting syndicates represented by one or more managing underwriters or directly by one or more of such firms.
Unless otherwise set forth in the prospectus supplement, the obligations of underwriters or dealers to purchase the securities
offered will be subject to certain conditions precedent and the underwriters or dealers will be obligated to purchase all the offered
securities if any are purchased. Any public offering price and any discount or concession allowed or reallowed or paid by underwriters
or dealers to other dealers may be changed from time to time.
The securities may be sold directly by us
or through agents designated by us from time to time. Any agent involved in the offer or sale of the securities in respect of which
this prospectus is delivered will be named, and any commissions payable by us to such agent will be set forth in, the prospectus
supplement. Unless otherwise indicated in the prospectus supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
Offers to purchase the securities offered
by this prospectus may be solicited, and sales of the securities may be made by us directly to institutional investors or others,
who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale of the securities. The
terms of any offer made in this manner will be included in the prospectus supplement relating to the offer.
If indicated in the applicable prospectus
supplement, underwriters, dealers or agents will be authorized to solicit offers by certain institutional investors to purchase
securities from us pursuant to contracts providing for payment and delivery at a future date. Institutional investors with which
these contracts may be made include, among others:
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commercial and savings banks;
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investment companies; and
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educational and charitable institutions.
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In all cases, these purchasers must be approved
by us. Unless otherwise set forth in the applicable prospectus supplement, the obligations of any purchaser under any of these
contracts will not be subject to any conditions except that (a) the purchase of the securities must not at the time of delivery
be prohibited under the laws of any jurisdiction to which that purchaser is subject, and (b) if the securities are also being sold
to underwriters, we must have sold to these underwriters the securities not subject to delayed delivery. Underwriters and other
agents will not have any responsibility in respect of the validity or performance of these contracts.
Some of the underwriters, dealers or agents
used by us in any offering of securities under this prospectus may be customers of, engage in transactions with, and perform services
for us or affiliates of ours in the ordinary course of business. Underwriters, dealers, agents and other persons may be entitled
under agreements which may be entered into with us to indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to be reimbursed by us for certain expenses.
Subject to any restrictions relating to
debt securities in bearer form, any securities initially sold outside the United States may be resold in the United States through
underwriters, dealers or otherwise.
Any underwriters to which offered securities
are sold by us for public offering and sale may make a market in such securities, but those underwriters will not be obligated
to do so and may discontinue any market making at any time.
The anticipated date of delivery of the
securities offered by this prospectus will be described in the applicable prospectus supplement relating to the offering.
In compliance with the guidelines of the
Financial Industry Regulatory Authority, or FINRA, the aggregate maximum discount, commission, agency fees or other items constituting
underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the offering proceeds
from any offering pursuant to this prospectus and any applicable prospectus supplement.
No FINRA member may participate in any offering
of securities made under this prospectus if such member has a conflict of interest under FINRA Rule 5121, including if 5% or more
of the net proceeds, not including underwriting compensation, of any offering of securities made under this prospectus will be
received by a FINRA member participating in the offering or affiliates or associated persons of such FINRA members, unless a qualified
independent underwriter has participated in the offering or the offering otherwise complies with FINRA Rule 5121.
To comply with the securities laws of some
states, if applicable, the securities may be sold in these jurisdictions only through registered or licensed brokers or dealers.
In addition, in some states the securities may not be sold unless they have been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied with.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
LEGAL MATTERS
Unless otherwise indicated in the applicable
prospectus supplement, the validity of the securities being offered by this prospectus will be passed upon by Troutman Sanders
LLP, Irvine, California.
EXPERTS
The consolidated financial statements of
Pacific Ethanol as of and for the years ended December 31, 2016 and 2015 appearing in Pacific Ethanol’s Annual Report on
Form 10-K for the year ended December 31, 2016 and the effectiveness of Pacific Ethanol’s internal control over financial
reporting as of December 31, 2016, have been audited by RSM US LLP, an independent registered public accounting firm, as stated
in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of
Pacific Ethanol for the year ended December 31, 2014 appearing in Pacific Ethanol’s Annual Report on Form 10-K for the year
ended December 31, 2016 have been audited by Hein & Associates LLP, an independent registered public accounting firm, as stated
in their report incorporated by reference herein, and have been so incorporated in reliance upon such reports and upon the authority
of such firm as experts in accounting and auditing.
WHERE YOU
CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange
Commission a registration statement on Form S-3 under the Securities Act, and the rules and regulations promulgated under the Securities
Act, with respect to the securities offered under this prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information contained in the registration statement and the exhibits and schedules to the
registration statement. Many of the contracts and documents described in this prospectus are filed as exhibits to the registration
statements and you may review the full text of these contracts and documents by referring to these exhibits.
For further information with respect to
us and the securities offered under this prospectus, reference is made to the registration statement and its exhibits and schedules.
We file reports, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the
Securities and Exchange Commission. The public may read and copy any materials we file with the Securities and Exchange Commission
at the Securities and Exchange Commission’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549, on official
business days during the hours of 10 a.m. to 3 p.m. The registration statement, including its exhibits and schedules, may be inspected
at the Public Reference Room. The public may obtain information on the operation of the Public Reference Room by calling the Securities
and Exchange Commission at 1-800-SEC-0330.
The Securities and Exchange Commission maintains
an Internet web site that contains reports, proxy and information statements and other information regarding issuers, including
Pacific Ethanol, that file electronically with the Securities and Exchange Commission. The Securities and Exchange Commission’s
Internet website address is http://www.sec.gov. Our Internet website address is http://www.pacificethanol.com.
We do not anticipate that we will send an
annual report to our stockholders until and unless we are required to do so by the rules of the Securities and Exchange Commission.
All trademarks or trade names referred to
in this prospectus are the property of their respective owners.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows
us to “incorporate by reference” the information we file with the Securities and Exchange Commission. This means that
we can disclose important information to you by referring you to another filed document. Any information referred to in this way
is considered part of this prospectus from the date we file that document. Any reports filed by us with the Securities and Exchange
Commission after the date of this prospectus and before the date that the offering of the securities by means of this prospectus
is terminated will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated
by reference in this prospectus. Accordingly, we incorporate by reference the following documents or information filed with the
Securities and Exchange Commission:
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Our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 13, 2017;
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which we filed with the Securities and Exchange
Commission on March 15, 2017;
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The description of our capital stock contained in our Current Report on Form 8-K filed with the Securities and Exchange
Commission on April 13, 2017; and
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All documents filed by us in accordance with Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date
of this prospectus and before the termination of an offering under this prospectus, other than documents or information deemed
furnished and not filed in accordance with Securities and Exchange Commission rules.
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We will provide a copy of the documents
we incorporate by reference, at no cost, to any person who received this prospectus. To request a copy of any or all of these documents,
you should write or telephone us at: Investor Relations, Pacific Ethanol, Inc., 400 Capitol Mall, Suite 2060, Sacramento, California
95814, (916) 403-2123. In addition, each document incorporated by reference is readily accessible on our website at
www.pacificethanol.net
.
The information in this prospectus
is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any state where the offer or sale is not permitted.
Subject to completion,
dated April 13, 2017
PROSPECTUS
PACIFIC ETHANOL, INC.
$75,000,000 of Common
Stock
We have entered into an At Market Issuance
Sales Agreement, or sales agreement, with FBR Capital Markets & Co., or FBR, dated April 13, 2017, relating to the sale of
shares of our common stock offered by this prospectus. In accordance with the terms of the sales agreement, under this prospectus
we may offer and sell shares of our common stock having an aggregate offering price of up to $75,000,000 from time to time through
FBR, acting as agent.
Sales of our common stock, if any, under
this prospectus will be made by any method permitted that is deemed an “at the market offering” as defined in Rule
415 under the Securities Act of 1933, as amended, or the Securities Act. FBR is not required to sell any specific amount, but will
act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices. There is no
arrangement for funds to be received in any escrow, trust or similar arrangement.
Unless we and FBR otherwise agree, we will
pay FBR a commission of up to 3.0% of the gross proceeds of the sales price per share. The net proceeds to us that we receive from
sales of our common stock will depend on the number of shares actually sold and the offering price for such shares. Based on the
closing price of our common stock on April 12, 2017, because we are limited to the sale of common stock with gross proceeds aggregating
$75,000,000, the maximum number of shares we could sell would be 10,791,366. We estimate the maximum total expenses of this offering,
excluding compensation and reimbursements payable to FBR under the terms of the sales agreement will be approximately $85,000.
If 10,791,366 shares of common stock were sold at the April 12, 2017 closing sales price, we would receive approximately $75,000,000
in gross proceeds, or approximately $72,750,000 in proceeds net of FBR’s fee. The actual proceeds to us will depend on the
number of shares we sell and the price of such sales.
Our common stock is listed on The NASDAQ
Capital Market under the symbol “PEIX”. On April 12, 2017, the last reported sale price of our common stock on The
NASDAQ Capital Market was $6.95 per share.
In connection with the sale of common stock
on our behalf, FBR may, and will with respect to sales effected in an “at the market offering,” be deemed to be an
“underwriter” within the meaning of the Securities Act and the compensation of FBR may be deemed to be underwriting
commissions or discounts. We have agreed to provide indemnification and contribution to FBR against certain civil liabilities,
including liabilities under the Securities Act.
Investing in our common stock involves
certain risks. See “Risk Factors” beginning on page A-6 of this prospectus and the risk and uncertainties described
in the documents we file with the Securities and Exchange Commission that are incorporated by reference in this prospectus for
certain risks and uncertainties relating to an investment in our common stock.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus or the accompanying prospectus. Any representation to the contrary is a criminal offense.
FBR
The date of this prospectus is _________, 2017.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus relates to the offering
of our common stock. Before buying any of the common stock that we are offering, you should carefully read this prospectus, any
supplement to this prospectus, the information and documents incorporated herein by reference and the additional information under
the heading “Where You Can Find Additional Information” and “Incorporation of Certain Information by Reference.”
These documents contain important information that you should consider when making your investment decision.
We provide information to you about this
offering of our common stock in two separate documents that are bound together: (i) this sales agreement prospectus, which describes
the specific details regarding this offering; and (ii) the accompanying base prospectus, which provides general information, some
of which may not apply to this offering. Generally, when we refer to this “prospectus,” we are referring to both documents
combined. If information in this sales agreement prospectus is inconsistent with the accompanying base prospectus, you should rely
on this prospectus. To the extent there is a conflict between the information contained in this prospectus, on the one hand, and
the information contained in any document incorporated by reference in this prospectus, on the other hand, you should rely on the
information in this prospectus. If any statement in one of these documents is inconsistent with a statement in another document
having a later date—for example, a document incorporated by reference into this prospectus—the statement in the document
having the later date modifies or supersedes the earlier statement.
You should rely only on this prospectus
and the information incorporated or deemed to be incorporated by reference in this prospectus or in any free writing prospectuses
we provide you. We have not, and FBR has not, authorized anyone to provide you with information that is in addition to, or different
from, that contained or incorporated by reference in this prospectus. If anyone provides you with different or inconsistent information,
you should not rely on it. We are not, and FBR is not, offering to sell securities in any jurisdiction where the offer or sale
is not permitted. You should not assume that the information contained or incorporated by reference in this prospectus is accurate
as of any date other than as of the date of this prospectus or in the case of the documents incorporated by reference, the date
of such documents regardless of the time of delivery of this prospectus or any sale of our common shares. Our business, financial
condition, liquidity, results of operations, and prospects may have changed since those dates.
When used in this prospectus, the terms
“Pacific Ethanol,” “we,” “our” and “us” refer to Pacific Ethanol, Inc. and its
consolidated subsidiaries, unless otherwise specified.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated
by reference into this prospectus contain “forward-looking statements” and are intended to be covered by the safe harbor
provided for under Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the
Exchange Act. These forward-looking statements include our current expectations and projections about future results, performance,
prospects and opportunities. We have tried to identify these forward-looking statements by using words like “believe,”
“expect,” “may,” “will,” “could,” “seek,” “estimate,” “continue,”
“anticipate,” “intend,” “future,” “plan” or variations of those terms and other
similar expressions, including their use in the negative. You should not place undue reliance on these forward-looking statements,
which speak only as to our expectations, as of the date of this prospectus and any applicable prospectus supplement. These forward-looking
statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance,
prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
These risks, uncertainties and other factors
include, but are not limited to, those set forth under “Risk Factors” discussed under the caption “Item 1A. Risk
Factors” in Part I of our most recent Annual Report on Form 10-K or any updates discussed under the caption “Item 1A.
Risk Factors” in Part II of our Quarterly Reports on Form 10-Q, together with all of the other information appearing in or
incorporated by reference into this prospectus. Given these risks and uncertainties, readers are cautioned not to place undue reliance
on our forward-looking statements. Projections included in such risk factors have been prepared based on assumptions, which we
believe to be reasonable, but not in accordance with United States generally accepted accounting principles or any guidelines of
the Securities and Exchange Commission. Actual results will vary, perhaps materially, and we undertake no obligation to update
the projections at any future date. You are strongly cautioned not to place undue reliance on such projections. All subsequent
written and oral forward-looking statements attributable to Pacific Ethanol or to persons acting on our behalf are expressly qualified
in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise.
PROSPECTUS
SUMMARY
The following summary of our business
highlights some of the information contained elsewhere in or incorporated by reference into this prospectus. Because this is only
a summary, however, it does not contain all of the information that may be important to you. You should carefully read this prospectus
and the accompanying base prospectus, including the documents incorporated by reference, which are described under “Where
You Can Find Additional Information” and “Incorporation of Certain Information by Reference” in this prospectus.
You should also carefully consider the matters discussed in the section in this prospectus entitled “Risk Factors.”
Pacific Ethanol
Overview
We are a leading producer and marketer of
low-carbon renewable fuels in the United States.
We operate eight strategically-located ethanol
production facilities. Four of our plants are in the Western states of California, Oregon and Idaho, and four of our plants are
located in the Midwestern states of Illinois and Nebraska. We are the sixth largest producer of ethanol in the United States based
on annualized volumes. Our plants have a combined ethanol production capacity of 515 million gallons per year. We market all the
ethanol and co-products produced at our plants as well as ethanol produced by third parties. On an annualized basis, we market
nearly 1.0 billion gallons of ethanol and over 1.5 million tons of ethanol co-products on a dry matter basis. Our business consists
of two operating segments: a production segment and a marketing segment.
Our mission is to advance our position and
significantly increase our market share as a leading producer and marketer of low-carbon renewable fuels in the United States.
We intend to accomplish this goal in part by expanding our ethanol production capacity and distribution infrastructure, accretive
acquisitions, lowering the carbon intensity of our ethanol, extending our marketing business into new regional and international
markets, and implementing new technologies to promote higher production yields and greater efficiencies.
Production Segment
We produce ethanol and co-products at our
production facilities described below. Our plants located on the West Coast are near their respective fuel and feed customers,
offering significant timing, transportation cost and logistical advantages. Our plants located in the Midwest are in the heart
of the Corn Belt, benefit from low-cost and abundant feedstock production and allow for access to many additional domestic markets.
In addition, our ability to load unit trains from our plants located in the Midwest allows for greater access to international
markets.
We wholly-own all of our plants located
on the West Coast and the two plants in Pekin, Illinois. We own approximately 74% of the two plants in Aurora, Nebraska as well
as the grain elevator adjacent to those properties and related grain handling assets, including the outer rail loop, and the real
property on which they are located, through an entity owned approximately 26% by Aurora Cooperative Elevator Company.
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Facility
Name
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Facility
Location
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Estimated
Annual
Capacity
(gallons)
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Magic Valley
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Burley, ID
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60,000,000
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Columbia
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Boardman, OR
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40,000,000
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Stockton
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Stockton, CA
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60,000,000
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Madera
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Madera, CA
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40,000,000
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Aurora West
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Aurora, NE
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110,000,000
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Aurora East
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Aurora, NE
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45,000,000
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Pekin Wet
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Pekin, IL
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100,000,000
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Pekin Dry
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Pekin, IL
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60,000,000
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We produce ethanol co-products at our production
facilities such as wet distillers grains, dry distillers grains with solubles, wet and dry corn gluten feed, condensed distillers
solubles, corn gluten meal, corn germ, corn oil, distillers yeast and CO
2
.
Marketing Segment
We market ethanol and co-products produced
by our ethanol production facilities and market ethanol produced by third parties. We have extensive customer relationships throughout
the Western and Midwestern United States. Our ethanol customers are integrated oil companies and gasoline marketers who blend ethanol
into gasoline. Our customers depend on us to provide a reliable supply of ethanol, and manage the logistics and timing of delivery
with very little effort on their part. Our customers collectively require ethanol volumes in excess of the supplies we produce
at our production facilities. We secure additional ethanol supplies from third-party plants in California and other third-party
suppliers in the Midwest where a majority of ethanol producers are located. We arrange for transportation, storage and delivery
of ethanol purchased by our customers through our agreements with third-party service providers in the Western United States as
well as in the Midwest from a variety of sources.
We market our distillers grains and other
feed co-products to dairies and feedlots, in many cases located near our ethanol plants. These customers use our feed co-products
for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry and biodiesel customers.
We do not market co-products from other ethanol producers.
Corporate Information
We are a Delaware corporation formed in
February 2005. Our principal executive offices are located at 400 Capitol Mall, Suite 2060, Sacramento, California 95814. Our telephone
number is (916) 403-2123 and our Internet website is
www.pacificethanol.net
. The content of our Internet website does not
constitute a part of this prospectus.
Additional information about us and our
subsidiaries can be obtained from the documents incorporated by reference herein. See “Where You Can Find Additional Information.”
THE OFFERING
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Common stock offered by us
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Up to $75,000,000 of common stock.
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Manner of offering
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Sales of shares of our common stock under this prospectus may be made by any method deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act. FBR will make all sales using commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of The NASDAQ Capital Market. See “Plan of Distribution.”
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Use of proceeds
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To the extent any of our Senior Secured Notes are outstanding at the time we sell shares pursuant to the sales agreement, any net proceeds from this offering will be used to reduce the amount owing under the Senior Secured Notes. Once our Senior Secured Notes are paid in full, any net proceeds from the sales of shares pursuant to this offering will be used for general corporate purposes, including working capital and capital expenditures, as well as repayment of indebtedness other than our Senior Secured Notes, acquisitions and other strategic purposes. See “Use of Proceeds.”
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Risk factors
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See “Risk Factors” beginning on page A-6 of this prospectus and the other information included in, or incorporated by reference into, this prospectus for a discussion of certain factors you should carefully consider before deciding to invest in shares of our common stock.
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The NASDAQ Capital Market symbol
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PEIX
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RISK FACTORS
Investing in our securities involves
a high degree of risk. You should carefully consider the risks, uncertainties and other factors described in our most recent Annual
Report on Form 10-K, as supplemented and updated by subsequent quarterly reports on Form 10-Q and current reports on Form 8-K that
we have filed or will filed with the Securities and Exchange Commission, and in other documents incorporated by reference to our
filings with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and
all other information contained or incorporated by reference in this prospectus and the accompanying base prospectus, including
our consolidated financial statements and the related notes, before investing in our common stock. If any of these risks materialize,
our business, financial condition or results of operations could be materially harmed. In that case, the trading price of our common
stock could decline, and you may lose some or all of your investment. The risks and uncertainties we describe are not the only
ones facing us. Additional risks not presently known to us, or that we currently deem immaterial, may also impair our business
operations. If any of these risks were to occur, our business, financial condition, or results of operations would likely suffer.
In that event, the trading price of our common stock could decline, and you could lose all or part of your investment.
Risks Related to This Offering
Our management will have broad discretion
over the use of the net proceeds from this offering, you may not agree with how we use the proceeds, and the proceeds may not be
invested successfully.
Our management will have broad discretion
as to the use of the net proceeds from any offering by us and could use them for purposes other than those contemplated at the
time of this offering. Accordingly, you will be relying on the judgment of our management with regard to the use of these net proceeds,
and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately.
It is possible that the proceeds will be invested in a way that does not yield a favorable, or any, return for Pacific Ethanol.
You may experience future dilution
as a result of future equity offerings.
In order to raise additional capital, we
may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common
stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities in any
other offering at a price per share that is less than the price per share paid by any investors in this offering, and investors
purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at
which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions
may be higher or lower than the price per share paid by any investors in this offering. In addition, the exercise of outstanding
stock options or warrants or the conversion of outstanding shares of our Series B Cumulative Convertible Preferred Stock, or Series
B Preferred Stock, could result in further dilution of your investment.
USE OF PROCEEDS
From time to time, we may sell shares of
our common stock pursuant to the sales agreement with FBR, which may result in aggregate gross proceeds of up to $75,000,000, or
approximately $72,750,000 in proceeds net of FBR’s fee. Because there is no minimum amount of shares of our common stock
that must be sold pursuant to our sales agreement with FBR, the actual number of shares of our common stock sold and aggregate
net proceeds to us are not presently determinable and may be substantially less than the amounts set forth above.
To the extent any of our Senior Secured
Notes are outstanding at the time we sell shares pursuant to the sales agreement, any net proceeds from this offering will be used
to reduce the amount owing under the Senior Secured Notes. Once our Senior Secured Notes are paid in full, any net proceeds from
the sales of shares pursuant to this offering will be used for general corporate purposes, including working capital and capital
expenditures, as well as repayment of indebtedness other than our Senior Secured Notes, acquisitions and other strategic purposes.
PLAN OF
DISTRIBUTION
We have entered into a sales agreement with
FBR under which we may sell an aggregate of up to $75,000,000 in gross proceeds of our common stock from time to time through FBR,
as our agent for the offer and sale of the common stock. The actual dollar amount and number of shares of common stock we sell
pursuant to the sales agreement will be dependent on, among other things, market conditions and our fund raising requirements.
FBR may sell the common stock by any method deemed to be an “at the market offering” as defined in Rule 415 of the
Securities Act. We may instruct FBR not to sell our common stock if the sales cannot be effected at or above the price designated
by us from time to time. We or FBR may suspend the offering of our common stock upon notice and subject to other conditions.
Each time that we wish to sell common stock
under the sales agreement, we will provide FBR with a placement notice describing the number of shares to be issued, the time period
during which sales are requested to be made, any limitation on the number of shares that may be sold in any one day, any minimum
price below which sales may not be made and other sales parameters as we deem appropriate.
Upon receipt of a placement notice from
us, and subject to the terms and conditions of the sales agreement, FBR has agreed to use its commercially reasonable efforts consistent
with its normal trading and sales practices to sell such shares up to the amount specified. The settlement between us and FBR of
each sale will occur on the third trading day following the date on which the sale was made or on some other date that is agreed
upon by us and FBR in connection with a particular transaction. The obligation of FBR under the sales agreement to sell our common
stock pursuant to a placement notice is subject to a number of conditions.
We will pay FBR commissions for its services
in acting as agent in the sale of our common stock. FBR will be entitled to compensation at a commission rate of up to 3.0% of
the gross proceeds of the sales price per share sold. FBR may also receive customary brokerage commissions from purchasers of the
common stock in compliance with FINRA Rule 2121. FBR may effect sales to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from FBR and/or purchasers of shares of common stock for whom they may act
as agents or to whom they may sell as principal. In addition, we have agreed to reimburse FBR for fees and disbursements of its
legal counsel in an amount not to exceed $35,000, and for certain other expenses. We estimate that the total expenses for the offering,
excluding compensation and reimbursements payable to FBR under the terms of the sales agreement, will be approximately $85,000.
Based on the closing price of our common
stock on April 12, 2017, because we are limited to the sale of common stock with gross proceeds aggregating $75,000,000, the maximum
number of shares we could sell is approximately 10,971,366. If 10,971,366 shares of common stock were sold at the April 12, 2017
closing sales price, we would receive approximately $75,000,000 in gross proceeds, or approximately $72,750,000 in proceeds net
of FBR’s fee. The actual proceeds to us will vary depending on the number of share sold and the prices of such sales. Because
there is no minimum offering amount required, the actual total may be substantially less than the maximum amount set forth above.
In connection with the sale of our common
stock on our behalf, FBR may, and will with respect to sales effected in an “at the market offering,” be deemed to
be an “underwriter” within the meaning of the Securities Act and the compensation paid to FBR may be deemed to be underwriting
commissions or discounts. We have agreed to provide indemnification and contribution to FBR against certain civil liabilities,
including liabilities under the Securities Act.
Sales of our common stock as contemplated
in this prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and FBR
may agree upon. There is no arrangement for funds to be received in escrow, trust or similar arrangement.
The offering of our common stock pursuant
to the sales agreement will terminate on the earlier of (i) the sale of all of our common stock subject to the sales agreement,
or (ii) termination of the sales agreement as permitted therein.
This is a brief summary of the material
provisions of the sales agreement and does not purport to be a complete statement of its terms and conditions. A copy of the sales
agreement has been filed with the Securities and Exchange Commission as an exhibit to the registration statement of which this
prospectus forms a part.
DESCRIPTION
OF COMMON STOCK
The following is a description of the material
terms of our common stock. This summary is not complete. We encourage you to read our certificate of incorporation and by-laws,
both of which are incorporated by reference into the registration statement of which this prospectus is a part. See “Where
You Can Find Additional Information.”
General
Our authorized capital stock consists of
300,000,000 shares of common stock, $0.001 par value per share, 3,553,000 shares of non-voting common stock, $0.001 par value per
share, and 10,000,000 shares of preferred stock, $0.001 par value per share, of which 1,684,375 shares are designated as Series A
Cumulative Redeemable Convertible Preferred Stock, and 1,580,790 shares are designated as Series B Preferred Stock. As of
April 12, 2017, there were 41,726,402 shares of common stock, 2,100,931 shares of non-voting common stock, no shares of Series
A Preferred Stock and 926,942 shares of Series B Preferred Stock issued and outstanding.
Common Stock
All outstanding shares of our common stock
are fully paid and nonassessable. The following summarizes the rights of holders of our common stock:
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a holder of common stock is entitled to one vote per share on all matters to be voted upon generally by the stockholders;
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subject to preferences that may apply to shares of preferred stock outstanding, the holders of common stock are entitled to
receive lawful dividends as may be declared by our Board of Directors, or the Board;
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upon our liquidation, dissolution or winding up, the holders of shares of common stock are entitled to receive a pro rata portion
of all our assets remaining for distribution after satisfaction of all our liabilities and the payment of any liquidation preference
of any outstanding preferred stock;
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there are no redemption or sinking fund provisions applicable to our common stock; and
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there are no preemptive or conversion rights applicable to our common stock.
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Non-Voting Common Stock
The rights and preferences of shares of
our non-voting common are substantially the same in all respects to the rights and preferences of shares of our common stock, except
that (i) the holders of shares of non-voting common stock are not be entitled to vote, (ii) shares of non-voting common stock are
convertible into shares of common stock, and (iii) shares of non-voting common stock are not listed on any stock exchange including
The NASDAQ Capital Market.
The following summarizes the rights of holders
of our non-voting common stock:
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a holder of non-voting common stock is not entitled to vote on any matter submitted to a vote of the stockholders, however
such holders are entitled to prior notice of, and to attend and observe, all meetings of the stockholders;
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subject to preferences that may apply to shares of preferred stock issued and outstanding, the holders of non-voting common
stock are entitled to receive lawful dividends as may be declared by the Board on parity in all respects with the holders of common
stock, provided that if the holders of common stock become entitled to receive a divided or distribution of shares of common stock,
holders of non-voting common stock shall receive, in lieu of the shares of common stock, an equal number of shares of non-voting
common stock;
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·
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upon liquidation, dissolution or winding up Pacific Ethanol, the holders of shares of common stock and non-voting common stock
will be entitled to receive a pro rata portion of all of our assets remaining for distribution after satisfaction of all our liabilities
and the payment of any liquidation preference of any outstanding preferred stock;
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there are no redemption or sinking fund provisions applicable to our non-voting common stock; and
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there are no preemptive rights applicable to our non-voting common stock.
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Conversion
Each share of non-voting common stock is
convertible at the option of the holder into one share of our common stock at any time. The conversion price is subject to customary
adjustment for stock splits, stock combinations, stock dividends, mergers, consolidations, reorganizations, share exchanges, reclassifications,
distributions of assets and issuances of convertible securities, and the like.
No shares of non-voting common stock may
be converted into common stock if the holder of such shares or any of its affiliates would, after such conversion, beneficially
own in excess of 9.99% of our outstanding shares of common stock (sometimes referred to as the Blocker). The Blocker applicable
to the conversion of shares of non-voting common stock may be raised or lowered at the option of the holder to any percentage not
in excess of 9.99%, except that any increase will only be effective upon 61-days’ prior notice to us.
When shares of non-voting common stock cease
to be held by the initial holder or an affiliate of an initial holder of such shares, such shares shall automatically convert into
one share of our common stock.
Transfer Agent and Registrar
Our shares of common stock are traded on
The NASDAQ Capital Market under the symbol “PEIX.” The transfer agent and registrar for our common stock is American
Stock Transfer & Trust Company, LLC. Its telephone number is (718) 921-8200.
Anti-Takeover Effects of Delaware Law and Our Certificate
of Incorporation and Bylaws
A number of provisions of Delaware law,
our certificate of incorporation and our bylaws contain provisions that could have the effect of delaying, deferring and discouraging
another party from acquiring control of Pacific Ethanol. These provisions, which are summarized below, are expected to discourage
coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire
control of Pacific Ethanol to first negotiate with our Board. We believe that the benefits of increased protection of our potential
ability to negotiate with an unfriendly or unsolicited acquiror outweigh the disadvantages of discouraging a proposal to acquire
Pacific Ethanol because negotiation of these proposals could result in an improvement of their terms. However, the existence of
these provisions also could limit the price that investors might be willing to pay for our securities.
Undesignated Preferred Stock
The ability to authorize undesignated preferred
stock makes it possible for our Board to issue preferred stock with voting or other rights or preferences that could impede the
success of any attempt to acquire us. These and other provisions may have the effect of deferring hostile takeovers or delaying
changes in control or management of Pacific Ethanol.
Advance Notice Requirements for Stockholder
Proposals and Director Nominations
Our bylaws provide that a stockholder seeking
to bring business before an annual meeting of stockholders, or to nominate candidates for election as directors, must provide timely
notice of such stockholder’s intention in writing. To be timely, a stockholder nominating individuals for election to the
Board or proposing business must provide advanced notice to Pacific Ethanol (a) not later than the close of business on the 90th
day, nor earlier than the close of business on the 120th day in advance of the anniversary of the previous year’s annual
meeting if such meeting is to be held on a day which is not more than thirty (30) days in advance of the anniversary of the previous
year’s annual meeting or not later than seventy (70) days after the anniversary of the previous year’s annual meeting,
and (b) with respect to any other annual meeting of stockholders, the close of business on the 10th day following the date of public
disclosure of the date of such meeting. In the event we call a special meeting of stockholders for the purpose of electing one
or more directors to the Board, any stockholder entitled to vote in such election of directors may nominate a person or persons
(as the case may be) for election to such position(s) as specified in our notice of meeting, if the stockholder’s notice
is delivered to us not later than the close of business on the 90th day prior to such special meeting and not earlier than the
close of business on the later of the 120th day prior to such special meeting or the 10th day following the date of public disclosure
of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting.
Delaware Anti-Takeover Statute
We are subject to the provisions of Section
203 of the Delaware General Corporation Law (sometimes referred to as Section 203) regulating corporate takeovers. In general,
Section 203 prohibits a publicly-held Delaware corporation from engaging, under specified circumstances, in a business combination
with an interested stockholder for a period of three years following the date the person became an interested stockholder unless:
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prior to the date of the transaction, the board of directors of the corporation approved either the business combination or
the transaction which resulted in the stockholder becoming an interested stockholder;
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·
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of
determining the number of shares of voting stock outstanding (but not the outstanding voting stock owned by the stockholder) (1)
shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange
offer; or
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·
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on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual
or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding
voting stock that is not owned by the interested stockholder.
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Generally, a business combination includes
a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested
stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of
interested stockholder status, did own 15% or more of a corporation’s outstanding voting securities. We expect the existence
of this provision to have an anti-takeover effect with respect to transactions the Board does not approve in advance. We also anticipate
that Section 203 may also discourage attempts that might result in a premium over the market price for the shares of our common
stock held by stockholders.
The provisions of Delaware law, our certificate
of incorporation and our bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence,
they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile
takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these
provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
DIVIDEND
POLICY
We have never paid cash dividends on our
common stock and do not intend to pay cash dividends on our common stock in the foreseeable future. We anticipate that we will
retain any earnings for use in the continued development of our business.
Our current and future debt financing arrangements
may limit or prevent cash distributions from our subsidiaries to us, depending upon the achievement of certain financial and other
operating conditions and our ability to properly service our debt, thereby limiting or preventing us from paying cash dividends
on our common stock. In addition, the holders of our outstanding Series B Preferred Stock are entitled to dividends of 7% per annum,
payable quarterly.
LEGAL MATTERS
Certain legal matters with respect to the
validity of the shares of common stock offered by this prospectus will be passed upon for us by Troutman Sanders LLP, Irvine, California.
FBR is being represented in connection with this offering by Duane Morris LLP, Newark, New Jersey.
EXPERTS
The consolidated financial statements of
Pacific Ethanol as of and for the years ended December 31, 2016 and 2015 appearing in Pacific Ethanol’s Annual Report on
Form 10-K for the year ended December 31, 2016 and the effectiveness of Pacific Ethanol’s internal control over financial
reporting as of December 31, 2016, have been audited by RSM US LLP, an independent registered public accounting firm, as stated
in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of
Pacific Ethanol for the year ended December 31, 2014 appearing in Pacific Ethanol’s Annual Report on Form 10-K for the year
ended December 31, 2016 have been audited by Hein & Associates LLP, an independent registered public accounting firm, as stated
in their report incorporated by reference herein, and have been so incorporated in reliance upon such reports and upon the authority
of such firm as experts in accounting and auditing.
WHERE YOU
CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange
Commission a registration statement on Form S-3 under the Securities Act, and the rules and regulations promulgated under the Securities
Act, with respect to the securities offered under this prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information contained in the registration statement and the exhibits and schedules to the
registration statement. Many of the contracts and documents described in this prospectus are filed as exhibits to the registration
statements and you may review the full text of these contracts and documents by referring to these exhibits.
For further information with respect to
us and the securities offered under this prospectus, reference is made to the registration statement and its exhibits and schedules.
We file reports, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the
Securities and Exchange Commission. The public may read and copy any materials we file with the Securities and Exchange Commission
at the Securities and Exchange Commission’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549, on official
business days during the hours of 10 a.m. to 3 p.m. The registration statement, including its exhibits and schedules, may be inspected
at the Public Reference Room. The public may obtain information on the operation of the Public Reference Room by calling the Securities
and Exchange Commission at 1-800-SEC-0330.
The Securities and Exchange Commission maintains
an Internet web site that contains reports, proxy and information statements and other information regarding issuers, including
Pacific Ethanol, that file electronically with the Securities and Exchange Commission. The Securities and Exchange Commission’s
Internet website address is
http://www.sec.gov
. Our Internet website address is
http://www.pacificethanol.net
.
We do not anticipate that we will send an
annual report to our stockholders until and unless we are required to do so by the rules of the Securities and Exchange Commission.
All trademarks or trade names referred to
in this prospectus are the property of their respective owners.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows
us to “incorporate by reference” the information we file with the Securities and Exchange Commission. This means that
we can disclose important information to you by referring you to another filed document. Any information referred to in this way
is considered part of this prospectus from the date we file that document. Any reports filed by us with the Securities and Exchange
Commission after the date of this prospectus and before the date that the offering of the securities by means of this prospectus
is terminated will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated
by reference in this prospectus. Accordingly, we incorporate by reference the following documents or information filed with the
Securities and Exchange Commission:
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Our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 13, 2017;
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which we filed with the Securities and Exchange
Commission on March 15, 2017;
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The description of our capital stock contained in our Current Report on Form 8-K filed with the Securities and Exchange Commission
on April 13, 2017; and
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All documents filed by us in accordance with Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of
this prospectus and before the termination of an offering under this prospectus, other than documents or information deemed furnished
and not filed in accordance with Securities and Exchange Commission rules.
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We will provide a copy of the documents
we incorporate by reference, at no cost, to any person who received this prospectus. To request a copy of any or all of these documents,
you should write or telephone us at: Investor Relations, Pacific Ethanol, Inc., 400 Capitol Mall, Suite 2060, Sacramento, California
95814, (916) 403-2123. In addition, each document incorporated by reference is readily accessible on our website at
www.pacificethanol.net
.
$75,000,000
PACIFIC ETHANOL, INC.
Common Stock
PROSPECTUS
FBR
The date of this prospectus is __________, 2017
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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ITEM 14.
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OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
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The following table sets forth all fees
and expenses payable by the registrant in connection with the issuance and distribution of the securities registered hereby (other
than underwriting discounts and commissions). All amounts are estimated.
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SEC Registration
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$
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20,283
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Accounting Fees and Expenses
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35,000
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Legal Fees and Expenses
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100,000
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Trustee fees and Expenses
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*
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Miscellaneous Expenses
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*
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Total
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$
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*
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____________
* These fees are calculated based on the
number of issuances and the amount of securities offered and accordingly cannot be estimated at this time.
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ITEM 15.
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
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Section 145 of the Delaware General Corporation
Law (“DGCL”) permits a corporation to indemnify its directors and officers against expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred in connection with a pending or completed action, suit or proceeding if the
officer or director acted in good faith and in a manner the officer or director reasonably believed to be in the best interests
of the corporation.
Our certificate of incorporation provides
that, except in some specified instances, our directors shall not be personally liable to us or our stockholders for monetary damages
for breach of their fiduciary duty as directors, except liability for the following:
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any breach of their duty of loyalty to Pacific Ethanol or our stockholders;
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acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
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unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; and
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any transaction from which the director derived an improper personal benefit.
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In addition, our certificate of incorporation
and bylaws obligate us to indemnify our directors and officers against expenses and other amounts reasonably incurred in connection
with any proceeding arising from the fact that such person is or was an agent of ours. Our bylaws also authorize us to purchase
and maintain insurance on behalf of any of our directors or officers against any liability asserted against that person in that
capacity, whether or not we would have the power to indemnify that person under the provisions of the DGCL. We have entered and
expect to continue to enter into agreements to indemnify our directors and officers as determined by our Board. These agreements
provide for indemnification of related expenses including attorneys’ fees and settlement amounts incurred by any of these
individuals in any action or proceeding. We believe that these bylaw provisions and indemnification agreements are necessary to
attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability
insurance.
The limitation of liability and indemnification
provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against our directors
for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers,
even though an action, if successful, might benefit us and other stockholders. Furthermore, a stockholder’s investment may
be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required
by these indemnification provisions.
The underwriting agreements that we might
enter into (Exhibits 1.1, 1.2, 1.3 and 1.4) will provide for indemnification by any underwriters of us, our directors, our officers
who sign the registration statement and our controlling person for some liabilities, including liabilities arising under the Securities
Act. The At Market Sales Issuance Agreement that we entered into (Exhibit 1.5) provides for indemnification by FBR Capital Markets
& Co. of us, our directors, our officers who sign the registration statement and our controlling person for some liabilities,
including liabilities arising under the Securities Act.
Insofar as the provisions of our certificate
of incorporation or bylaws provide for indemnification of directors or officers for liabilities arising under the Securities Act,
we have been informed that in the opinion of the Securities and Exchange Commission this indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
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Incorporation
by Reference
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Exhibit
Number
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Description
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Form
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File Number
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Exhibit Number
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Filing Date
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Filed Herewith
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1.1
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Form of Underwriting Agreement for Common Stock*
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1.2
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Form of Underwriting Agreement for Preferred Stock*
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1.3
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Form of Underwriting Agreement for Units*
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1.4
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Form for Underwriting Agreement for Senior and Subordinated Debt Securities*
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1.5
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At Market Issuance Sales Agreement by and between Pacific Ethanol, Inc. and FBR Capital Markets & Co. dated April 13, 2017
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X
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4.1
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Certificate of Incorporation
|
10-Q
|
000-21467
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3.1
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11/06/2015
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4.2
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Certificate of Designations, Powers, Preferences and Rights of the Series A Cumulative Redeemable Convertible Preferred Stock
|
10-Q
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000-21467
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3.2
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11/06/2015
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4.3
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Certificate of Designations, Powers, Preferences and Rights of the Series B Cumulative Convertible Preferred Stock
|
10-Q
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000-21467
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3.3
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11/06/2015
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4.4
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Certificate of Amendment to Certificate of Incorporation dated June 10, 2010
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10-Q
|
000-21467
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3.4
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11/06/2015
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4.5
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Certificate of Amendment to Certificate of Incorporation dated June 8, 2011
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10-Q
|
000-21467
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3.5
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11/06/2015
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Incorporation
by Reference
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Exhibit
Number
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Description
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Form
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File Number
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Exhibit Number
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Filing Date
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Filed Herewith
|
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4.6
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Certificate of Amendment to Certificate of Incorporation dated May 14, 2013
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10-Q
|
000-21467
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3.6
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11/06/2015
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4.7
|
Certificate of Amendment to Certificate of Incorporation dated July 1, 2015
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10-Q
|
000-21467
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3.7
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11/06/2015
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4.8
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Amended and Restated Bylaws
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10-Q
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000-21467
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3.1
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11/12/2014
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4.9
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Specimen Common Stock Certificate
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X
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4.10
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Form of Senior Debt Indenture
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X
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4.11
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Form of Subordinated Debt Indenture
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X
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4.12
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Form of Senior Debt Security*
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4.13
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Form of Subordinated Debt Security*
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4.14
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Form of Certificate of Designations Creating New Series of Preferred Stock*
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4.15
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Form of Specimen Preferred Stock Certificate*
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4.16
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Form of Common Stock Warrant Agreement and Warrant Certificate*
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4.17
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Form of Preferred Stock Warrant Agreement and Warrant Certificate*
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4.18
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Form of Debt Securities Warrant Agreement and Warrant Certificate*
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4.18
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Form of Unit Agreement*
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5.1
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Opinion of Troutman Sanders LLP relating to base prospectus
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X
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5.2
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Opinion of Troutman Sanders LLP relating to sales agreement prospectus
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X
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12.1
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Statement of Computation of Ratio of Earnings to Fixed Charges
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X
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23.1
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Consent of Troutman Sanders LLP (contained in Exhibit 5.1)
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X
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23.2
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Consent of RSM US LLP
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X
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23.3
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Consent of Hein & Associates LLP
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X
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24.1
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Power of Attorney
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X
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25.1
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Statement of Eligibility of Trustee under the Senior Debt Indenture#
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25.2
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Statement of Eligibility of Trustee under the Subordinated Debt Indenture#
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*
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If applicable, to be filed by amendment or by a report
filed under the Securities Exchange Act of 1934, as amended, and incorporated herein by reference.
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#
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To be incorporated herein by reference from a subsequent filing in accordance with
Section 305(b)(2) of the Trust Indenture Act of 1939.
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The undersigned registrant hereby undertakes:
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(1)
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To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
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(i) To include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect
in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering
price set forth in the “Calculation of Registration fee” table in the effective registration statement; and
(iii) To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii)
shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial
bona fide
offering thereof.
(3) To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That,
for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus
of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating
to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free
writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is
an offer in the offering made by the undersigned registrant to the purchaser.
(6) That,
for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.
(7) That,
for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
(8) That,
for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof.
(9) To
file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the
Act.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers or controlling persons of the Registrant pursuant
to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Sacramento, State of California, on this 13th day of April, 2017.
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PACIFIC ETHANOL, INC.,
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a Delaware corporation
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By:
/s/ NEIL M. KOEHLER
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Neil M. Koehler
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Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that
each person whose signature appears below constitutes and appoints Neil M. Koehler his attorney-in-fact and agent, with the power
of substitution and resubstitution, for him and in his name, place or stead, in any and all capacities, to sign any amendment to
this registration statement on Form S-3, and to file such amendments, together with exhibits and other documents in connection
therewith, with the Securities and Exchange Commission, granting to such attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully as he might
or could do in person, and ratifying and confirming all that the attorney-in-fact and agent, or his substitute or substitutes,
may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ WILLIAM
L. JONES
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Chairman of the Board and Director
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April 13, 2017
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William L. Jones
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/s/ NEIL M. KOEHLER
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President, Chief Executive Officer
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April 13, 2017
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Neil M. Koehler
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(principal executive officer) and Director
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/s/ BRYON T. MCGREGOR
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Chief Financial Officer (principal
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April 13, 2017
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Bryon T. McGregor
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financial and accounting officer)
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/s/ MICHAEL
D. KANDRIS
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Chief Operating Officer and Director
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April 13, 2017
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Michael D. Kandris
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/s/ TERRY
L. STONE
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Director
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April 13, 2017
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Terry L. Stone
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/s/ JOHN
L. PRINCE
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Director
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April 13, 2017
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John L. Prince
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/s/ DOUGLAS
L. KIETA
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Director
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April 13, 2017
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Douglas L. Kieta
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/s/ LARRY
D. LAYNE
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Director
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April 13, 2017
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Larry D. Layne
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