On July 3, 2012, the Company raised $11,300,000, net of underwriting costs, through a public offering of units consisting of an aggregate of 28,000,000 shares of common stock, warrants to purchase 28,000,000 shares of common stock at an exercise price of $0.63 per share with a term of five years and warrants to purchase 14,000,000 shares of common stock at an exercise price of $0.53 per share with a term of eighteen months.

On July 13, 2012, the Company purchased an additional 33% ownership interest in New PE Holdco for $20,000,000 by paying $10,000,000 in cash and issuing $10,000,000 in Notes. The Notes are due April 13, 2013 and accrue interest at a rate of 5.00% per annum. Because the Company has a controlling financial interest in New PE Holdco, it does not expect to record any gain or loss on this purchase, but instead expects to reduce the amount of the noncontrolling interest in VIE on its consolidated balance sheets and record the difference between the fair value of the purchase and the price paid by the Company, to additional paid-in capital.

Upon the closing of the Company’s purchase of an additional 33% ownership interest, its ownership interest in New PE Holdco increased from 34% to 67%. Because New PE Holdco’s results are consolidated with the Company’s for financial reporting purposes, the acquisition of additional interests in New PE Holdco will not impact the consolidated net income or loss that it reports. However, the portion of New PE Holdco’s net income or loss that is allocated to the Company will increase from 34% to 67%, thus changing the net income or loss attributable to Pacific Ethanol after reducing the net income or loss attributable to the noncontrolling interests and the Company’s earnings per share. For the three and six months ended June 30, 2012 and 2011, had the Company owned the additional 33% interest in New PE Holdco and issued 28,000,000 shares of common stock under the financing noted above, the Company’s reported results would have had the following impact. For the three months ended June 30, 2012 and 2011, net loss available to common stockholders would have been $6,769,000 and $2,677,000, respectively, and loss per share would have been $0.06 for each period. For the six months ended June 30, 2012 and 2011, net loss available to common stockholders would have been $16,679,000 and $5,512,000, respectively, and loss per share would have been $0.15 and $0.13, respectively.

On July 13, 2012, the Plant Owners’ amended their existing credit facilities. Prior to the amendment, the credit facilities consisted of a $35,000,000 revolving credit facility, a $25,000,000 tranche A-1 term loan and a $26,300,000 tranche A-2 term loan. Under the amendment, the Plant Owners’ credit facilities were, among other things, amended to extend the maturity date in respect of $46,700,000 of the combined revolving credit facility and term debt from June 25, 2013 to June 30, 2016. In addition, the aggregate commitment amount under the revolving credit facility was increased by $5,000,000. Further, monthly interest payments due to certain lenders may, at the option of New PE Holdco, be deferred and added to the loans maturing on the extended maturity date of June 30, 2016. The amendment also provides the Plant Owners with the ability to pay down and pay off the non-extending lenders and the outstanding tranche A-2 term loan at, or at any time prior to, the original maturity date of June 25, 2013 without penalty while keeping the extended loans in place.