Mail Stop 7010
November 28, 2005
Neil Koehler
Chief Executive Officer
Pacific Ethanol, Inc.
5711 N. West Avenue
Fresno, California 93711
Re: Pacific Ethanol, Inc.
Amendment No. 2 to Registration Statement on Form S-1
Filed on November 22, 2005
File No. 333-127714
Dear Mr. Koehler:
We have limited our review of your filing to those issues we
have addressed on our comments. Where indicated, we think you
should
revise your documents in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Prospectus Summary, page 2
1. Include a recent developments section describing the Cascade
transaction and the potential effect to the common stock
shareholders. Include a discussion of the protective, dividend and
voting rights of the preferred shareholders and the potential
changes
to your board.
Risk Factors, page 9
We have entered into an agreement for an $84 million . . . , page
16
2. We note the disparity between the Registrant`s quoted stock
price
and the conversion price of the referenced preferred stock. Please
expand this risk factor to discuss the expected impact of this
transaction on the Registrant`s future EPS. It appears that the
impact will be material in the period of issuance. See the
guidance
in EITF 98-5 and EITF 00-27.
3. Please disclose the effect of the issuance of the preferred
stock
to the existing common stock shareholders. Discuss, for example:
* the dilutive impact related to the conversion rights;
* that the preferred stock is convertible at any time by the
holder;
* that the preferred stock ranks senior in liquidation and
dividend
preferences to the common stock;
* that the preferred shareholders are entitled to vote on an as-
converted basis and disclose whether the preferred shareholders
will
have voting rights at a higher rate than the common stock
shareholders;
* the protective provisions; and
* any potential change of control.
Please also revise your proxy statement to include this
disclosure.
Selling Security Holders, page 84
4. We note your disclosure regarding Cagan-McAFee. Supplementally,
please tell us about the Settlement Agreement, dated November 1,
2005, among the Company, Cagan-McAfee Capital Partners, LLC and
Chadbourn Securities, Inc.
5. We note your revised disclosure that each of the selling
shareholders "has represented to
that it is not acting as an underwriter in this offering."
Please
revise here to clarify that notwithstanding this representation,
certain selling shareholders may be deemed to be underwriters.
Description of Preferred Stock, page 96
6. Please describe the terms of the Series A preferred stock in
greater detail.
As appropriate, please amend your filings in response to
these
comments. You may wish to provide us with marked copies of the
amendments to expedite our review. Please furnish a cover letter
with your amendments that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendments and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed decision. Since the company and its management
are
in possession of all facts relating to a company`s disclosure,
they
are responsible for the accuracy and adequacy of the disclosures
they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Al Pavot at (202) 551-3738 or Nili Shah at
(202) 551-3258 if you have questions regarding comments on the
financial statements and related matters. Please contact Brigitte
Lippmann at (202) 551-3713 or me at (202) 551-3767 with any other
questions.
Sincerely,
Jennifer Hardy
Branch Chief
cc: Larry A. Cerutti, Esq.
Rutan & Tucker, LLP
611 Anton Boulevard, 14th floor
Costa Mesa, California 92626
??
??
??
??
Neil Koehler
Pacific Ethanol, Inc.
November 28, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE