<SEC-DOCUMENT>0001019687-13-002726.txt : 20130726
<SEC-HEADER>0001019687-13-002726.hdr.sgml : 20130726
<ACCEPTANCE-DATETIME>20130726163142
ACCESSION NUMBER:		0001019687-13-002726
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20130726
DATE AS OF CHANGE:		20130726

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Pacific Ethanol, Inc.
		CENTRAL INDEX KEY:			0000778164
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL ORGANIC CHEMICALS [2860]
		IRS NUMBER:				412170618
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-180731
		FILM NUMBER:		13989874

	BUSINESS ADDRESS:	
		STREET 1:		400 CAPITOL MALL, SUITE 2060
		CITY:			SACRAMENTO
		STATE:			CA
		ZIP:			95814
		BUSINESS PHONE:		916-403-2123

	MAIL ADDRESS:	
		STREET 1:		400 CAPITOL MALL, SUITE 2060
		CITY:			SACRAMENTO
		STATE:			CA
		ZIP:			95814

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ACCESSITY CORP
		DATE OF NAME CHANGE:	20030627

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DRIVERSSHIELD COM CORP
		DATE OF NAME CHANGE:	20001115

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FIRST PRIORITY GROUP INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>peix_424b5-072613.htm
<DESCRIPTION>424(B)(5) PROSPECTUS SUPPLEMENT
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Filed Pursuant to Rule 424(b)(5)<BR>
Registration No. 333-180731</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">PROSPECTUS SUPPLEMENT<BR>
(To Prospectus dated May 17, 2012)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">174,738 Shares of Common Stock</P>

<P STYLE="font: bold 16pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 16pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PACIFIC ETHANOL, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><IMG SRC="image_001.gif" ALT="" STYLE="height:
154px; width: 294px"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are offering 174,738 shares of our
common stock in this offering. The shares of common stock are being offered solely to holders of our Series B Cumulative Convertible
Preferred Stock, or Series B Preferred Stock, in satisfaction of a portion of the amount of accrued and unpaid dividends on shares
of outstanding Series B Preferred Stock. The shares of common stock are being offered solely to the holders of our Series B Preferred
Stock at a negotiated offering price of $4.19 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our common stock is listed on The
NASDAQ Capital Market under the symbol &ldquo;PEIX.&rdquo; On July 25, 2013, the last reported sales price of our common
stock on The NASDAQ Capital Market was $4.00 per share. The aggregate market value of our outstanding common equity held by
non-affiliates on July 25, 2013 was approximately $51.0 million, based on 13,106,291 shares of outstanding common stock, of
which 349,441  shares are held by non-affiliates, and a per share price of $4.00 based on the closing price of our common
stock on July 25, 2013. During the twelve calendar months prior to and including the date hereof, we have offered securities
with an aggregate market value of  0.7 million pursuant to General Instruction I.B.6. of Form S-3.<B> </B>During the twelve
calendar months prior to and including the date hereof, we have not sold any securities pursuant to General Instruction
I.B.6. of Form S-3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>Investing in our securities involves
certain risks. Before purchasing our common stock and warrants, please review the information, including the information incorporated
by reference, under the heading &ldquo;Risk Factors&rdquo; beginning on Page S-6 of this prospectus supplement and page 4 of the
accompanying prospectus. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>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 supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp; &nbsp; &nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The date of this prospectus supplement
is July 26, 2013.</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TABLE OF CONTENTS</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PROSPECTUS SUPPLEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 93%; padding-top: 12pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 7%; padding-top: 12pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt"><B><U>Page</U></B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">ABOUT THIS PROSPECTUS SUPPLEMENT</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">PROSPECTUS SUMMARY</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-2</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">THE OFFERING</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-5</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">RISK FACTORS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-6</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">FORWARD&ndash;LOOKING STATEMENTS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-16</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">USE OF PROCEEDS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-17</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DILUTION</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-17</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DESCRIPTION OF COMMON STOCK</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-18</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">PLAN OF DISTRIBUTION</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-19</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DIVIDEND POLICY</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-19</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">TRANSFER AGENT</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-19</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">LEGAL MATTERS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-19</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">EXPERTS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-19</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">INCORPORATION OF DOCUMENTS BY REFERENCE</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-20</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">WHERE YOU CAN FIND MORE INFORMATION</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">S-20</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">ABOUT THIS PROSPECTUS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">PACIFIC ETHANOL, INC.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">RISK FACTORS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">4</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">USE OF PROCEEDS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">RATIO OF EARNINGS TO FIXED CHARGES</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DESCRIPTION OF DEBT SECURITIES</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DESCRIPTION OF CAPITAL STOCK</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">18</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DESCRIPTION OF PREFERRED STOCK</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">25</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DESCRIPTION OF WARRANTS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">28</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DESCRIPTION OF UNITS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">29</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">GLOBAL SECURITIES</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">31</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">PLAN OF DISTRIBUTION</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">33</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">35</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">LEGAL MATTERS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">35</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">EXPERTS</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">35</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">WHERE YOU CAN FIND MORE INFORMATION</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">36</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">37</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">ABOUT
THIS PROSPECTUS SUPPLEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This document consists of two parts.
The first part is this prospectus supplement, which describes the specific terms of this offering. The second part, the accompanying
prospectus, gives more general information, some of which may not apply to this offering. Generally, when we refer only to the
&ldquo;prospectus,&rdquo; we are referring to both parts combined. This prospectus supplement may add to, update or change information
in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement or the accompanying
prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If information in this prospectus supplement
is inconsistent with the accompanying prospectus, on the one hand, and the information contained in the accompanying prospectus
or in any document incorporated by reference that was filed with the Securities and Exchange Commission before the date of this
prospectus supplement, on the other hand, you should rely on this prospectus supplement. If any statement in one of these documents
is inconsistent with a statement in another document having a later date &ndash; for example, a document incorporated by reference
in the accompanying prospectus &ndash; the statement in the document having the later date modifies or supersedes the earlier statement.
This prospectus supplement, the accompanying prospectus and the documents incorporated into each by reference include important
information about us, the shares of common stock being offered and other information you should know before investing in the securities
offered hereby. Before you invest, you should carefully read this prospectus supplement, the accompanying prospectus, all information
incorporated by reference herein and therein, as well as the additional information described under &ldquo;Where You Can Find More
Information&rdquo; on page S-20 of this prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">You should rely only on this prospectus
supplement, the accompanying prospectus and the information incorporated or deemed to be incorporated by reference in this prospectus
supplement and the accompanying prospectus. We have 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 supplement and the accompanying prospectus. If
anyone provides you with different or inconsistent information, you should not rely on it. We are 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 supplement or the accompanying prospectus is accurate as of any date other than as of the date
of this prospectus supplement or the accompanying prospectus, as the case may be, or in the case of the documents incorporated
by reference, the date of such documents regardless of the time of delivery of this prospectus supplement and the accompanying
prospectus or any sale of shares of common stock. Our business, financial condition, liquidity, results of operations, and prospects
may have changed since those dates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">When used in this prospectus, the terms
&ldquo;Pacific Ethanol,&rdquo; &ldquo;we,&rdquo; &ldquo;our&rdquo; and &ldquo;us&rdquo; refer to Pacific Ethanol, Inc. and its
consolidated subsidiaries, unless otherwise specified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">PROSPECTUS
SUMMARY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>The following summary of our business
highlights some of the information contained elsewhere in or incorporated by reference into the accompanying 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 supplement and the accompanying prospectus, including the documents incorporated by reference, which are described
under &ldquo;Where You Can Find More Information&rdquo; and &ldquo;Incorporation of Certain Information by Reference&rdquo; in
this prospectus supplement. You should also carefully consider the matters discussed in the section in this prospectus supplement
entitled &ldquo;Risk Factors&rdquo; and in the accompanying prospectus and in other periodic reports incorporated herein by reference.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Pacific Ethanol</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are the leading marketer and producer
of low-carbon renewable fuels in the Western United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We market all the ethanol produced by
four ethanol production facilities located in California, Idaho and Oregon, or Pacific Ethanol Plants, all the ethanol produced
by two<B> </B>other ethanol producers in the Western United States and ethanol purchased from other third-party suppliers throughout
the United States. We also market ethanol co-products, including wet distillers grains and syrup, or WDG, for the Pacific Ethanol
Plants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have extensive customer relationships
throughout the Western United States. Our ethanol customers are integrated oil companies and gasoline marketers who blend ethanol
into gasoline. 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, primarily in California, Arizona, Nevada, Utah, Oregon, Colorado,
Idaho and Washington. Our WDG customers are dairies and feedlots located near the Pacific Ethanol Plants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have extensive supplier relationships
throughout the Western and Midwestern United States. In some cases, we have marketing agreements with suppliers to market all of
the output of their facilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We hold an 85% ownership interest in
New PE Holdco LLC, or New PE Holdco, the owner of each of the plant holding companies, or Plant Owners, that collectively own the
Pacific Ethanol Plants. We operate and maintain the Pacific Ethanol Plants under the terms of an asset management agreement with
New PE Holdco and the Plant Owners, including supplying all goods and materials necessary to operate and maintain each Pacific
Ethanol Plant. In operating the Pacific Ethanol Plants, we direct the production process to obtain optimal production yields, lower
costs by leveraging our infrastructure, enter into risk management agreements such as insurance policies and manage commodity risk
practices. We are also in complete charge of, and have care and custody over, each Pacific Ethanol Plant that is not operational,
and provide recommendations as to when a Pacific Ethanol Plant should become operational. We perform all activities necessary to
support a cost effective return of any idled Pacific Ethanol Plant to operational status once New PE Holdco approves our recommendation
to re-start an idled Pacific Ethanol Plant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We market ethanol and WDG produced by
the Pacific Ethanol Plants under the terms of separate marketing agreements with the Plant Owners whose facilities are operational.
The marketing agreements provide us with the absolute discretion to solicit, negotiate, administer (including payment collection),
enforce and execute ethanol and co-product sales agreements with any third party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Pacific Ethanol Plants are comprised
of the four facilities described immediately below and have an aggregate annual production capacity of up to 200 million gallons.
Three of the facilities are currently operational and one of the facilities is currently idled. As future market conditions change,
we may increase, decrease or idle production at facilities that are operational or resume operations at any facility which is not
operational.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 20%; padding-right: 0.05in">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><B>Facility Name</B></P></TD>
    <TD STYLE="width: 20%; padding-right: 0.05in; padding-left: 0.05in">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid; text-align: center"><B>Facility
        Location</B></P></TD>
    <TD STYLE="width: 20%; padding-right: 0.05in; padding-left: 0.05in">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid; text-align: center"><B>Estimated
        Annual<BR>
 Capacity<BR>
        (gallons)</B></P></TD>
    <TD STYLE="width: 20%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid; text-align: center"><B>Current
        <BR>
Operating <BR>
Status</B></P></TD></TR>
<TR>
    <TD STYLE="padding-right: 0.05in; padding-left: 5.8pt; text-indent: -5.8pt"><FONT STYLE="font-size: 10pt">Magic Valley</FONT></TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">Burley, ID</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">60,000,000</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Operating</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 0.05in; padding-left: 5.8pt; text-indent: -5.8pt"><FONT STYLE="font-size: 10pt">Columbia</FONT></TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">Boardman, OR</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">40,000,000</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Operating</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 0.05in; padding-left: 5.8pt; text-indent: -5.8pt"><FONT STYLE="font-size: 10pt">Stockton</FONT></TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">Stockton, CA</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">60,000,000</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Operating</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 0.05in; padding-left: 5.8pt; text-indent: -5.8pt"><FONT STYLE="font-size: 10pt">Madera</FONT></TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">Madera, CA</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><FONT STYLE="font-size: 10pt">40,000,000</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Idled</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We earn fees as follows under our asset
management and other agreements with New PE Holdco and the Plant Owners:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.3in">&bull;</TD><TD>ethanol marketing fees of approximately 1% of the net sales price, but not less than $0.015 per gallon and not more than $0.0225
per gallon;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.3in">&bull;</TD><TD>corn procurement and handling fees of $0.045 per bushel;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.3in">&bull;</TD><TD>WDG fees of 5% of the third-party purchase price, but not less than $2.00 per ton and not more than $3.50 per ton; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.3in">&bull;</TD><TD>asset management fees of $75,000 per month for each operating facility and $40,000 per month for each idled facility.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We also provide operations, maintenance
and accounting services for a 250,000 gallon per year cellulosic integrated biorefinery owned by ZeaChem Inc. in Boardman, Oregon,
which is adjacent to the Pacific Ethanol Columbia plant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Recent Developments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Series A Subordinated Convertible
Notes</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On March 28, 2013, we issued $6.0 million
in Series A Subordinated Convertible Notes, or Series A Notes, and warrants to purchase an aggregate of 1.8 million shares of our
common stock for aggregate gross proceeds of $6.0 million. The warrants have an exercise price of $7.80 per share. Of the warrants
issued in the transaction, warrants to purchase 0.8 million shares of common stock expire in March 2015 and warrants to purchase
1.0 million shares of common stock expire on June 20, 2015. Unless converted or redeemed earlier, the Series A Notes will mature
on March 28, 2014. The Series A Notes bear interest at 5%&nbsp;per annum, compounded monthly. All amounts due under the Series
A Notes are convertible at any time, in whole or in part, at the option of the holders into shares of our common stock at a conversion
price, or Fixed Conversion Price, which is subject to adjustment as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Series A Notes are initially convertible
into shares of our common stock at the initial Fixed Conversion Price of $15.00 per share. If we sell or issue any securities with
&ldquo;floating&rdquo; conversion prices based on the market price of our common stock, the holder of a Series A Note will have
the right thereafter to substitute the &ldquo;floating&rdquo; conversion price for the Fixed Conversion Price upon conversion of
all or part of the Series A Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Amortization payments, together with
accrued and unpaid interest on the Series A Notes, will be payable on monthly installment dates. On or prior to the tenth calendar
day before each installment date, we are required to deliver a notice electing to effect a redemption in cash or a conversion of
the installment amount due on the installment date into shares of our common stock. Our ability to pay an installment amount in
shares of our common stock is subject to numerous equity conditions, the failure of any of which, unless waived, will require that
we pay an installment amount solely in cash. On the applicable installment date, we are required to deliver to the holders of Series
A Notes an amount of shares of common stock equal to that portion of the installment amount being converted divided by the lesser
of the then existing Fixed Conversion Price and 85% of the Market Price on the installment date, or Company Conversion Price. The
Market Price on any given date is equal to the lesser of (i) the volume weighted average price on the trading day immediately preceding
the date of determination, and (ii) the average of the three lowest volume weighted average prices during the ten trading day period
ending on the trading day immediately prior to the date of determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The holder of a Series A Note may, at
the holder&rsquo;s election by giving notice to us, defer the payment of the installment amount due on any installment date to
another installment date, in which case the amount deferred will become part of the subsequent installment date and will continue
to accrue interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On any day during the period commencing
on an installment date and ending on the trading day prior to the next installment date, the holder of a Series A Note may, at
its election, convert the installment amounts due on up to four future installment dates at the Company Conversion Price in effect
on the current installment date, provided that if we had elected to convert the installment amount due on the current installment
date, the holder may only convert up to three future installment amounts. Upon the occurrence of certain events of default, there
will be no limitation on the number of installment amounts that the holder may accelerate and the Company Conversion Price applicable
to conversions made pursuant to this acceleration feature will equal the lesser of (i) the Company Conversion Price on the current
installment date, (ii) 85% of the Market Price, and (iii) the Fixed Conversion Price then in effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Reverse Stock Split</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On May 14, 2013, we effected a one-for-fifteen
reverse split of our common stock. All share and per share information contained in this prospectus have been restated to show
the effect of the reverse stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Series B Subordinated Convertible
Notes</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On June 20, 2013, we issued $8.0 million
in Series B Subordinated Convertible Notes, or Series B Notes. Unless converted or redeemed earlier, the Series B Notes will mature
on March 28, 2014, together with the Series A Notes. The terms of the Series B Notes are substantially similar to those of the
Series A Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><I>Acquisition of Plant Debt and Additional
Interests in New PE Holdco </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On March 28, 2013, we used proceeds from
the issuance of its Series A Notes and warrants to purchase and immediately retire $3.5 million of the Plant Owners&rsquo; revolving
debt for a purchase price of $3.5 million. On March 28, 2013, we also used proceeds from the issuance of the Series A Notes and
warrants to purchase $2.6 million of the Plant Owners&rsquo; term debt and an additional 3% ownership interest in New PE Holdco
for a combined purchase price of $2.2 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On June 21, 2013, we used the proceeds
from the sale of the Series B Notes, to acquire $4.1 million of the Plant Owners&rsquo; combined term and revolving debt for a
purchase price of $3.0 million and 19.7 units of limited liability company interests of New PE Holdco for a purchase price of $197,000.
As a result of the purchases of debt on June 21, 2013, $1.2 million of the Plant Owners&rsquo; revolving debt was retired and the
maturity date applicable to approximately $2.9 million of the Plant Owners&rsquo; term debt was extended from June 25, 2013 to
June 30, 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of the date of this prospectus, we
hold an 85% ownership interest in New PE Holdco. As of the date of this prospectus, the Plant Owners have $101.8 million in combined
term and revolving debt, of which $7.6 million in revolving debt is due on June 25, 2015 and $94.2 million in combined term and
revolving debt is due on June, 30, 2016, of which Pacific Ethanol owns $27.1 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Corporate Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are a Delaware corporation that was
incorporated 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 <FONT STYLE="color: Blue"><U>www.pacificethanol.net</U></FONT>.
The content of our Internet website does not constitute a part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">THE
OFFERING</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="width: 47%; text-align: justify"><FONT STYLE="font-size: 10pt">Common stock
offered by us</FONT></TD>
    <TD STYLE="text-align: justify; width: 53%"><FONT STYLE="font-size: 10pt">174,738 Shares offered solely to holders of our Series B Preferred Stock, in satisfaction of a portion of the amount of accrued and unpaid dividends on shares of outstanding Series B Preferred Stock.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>
                Common stock outstanding immediately prior
        to this offering</TD>
    <TD STYLE="text-align: justify">13,106,291<FONT STYLE="font-size: 10pt"> shares</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Common stock to be outstanding immediately after this offering</FONT></TD>
    <TD STYLE="text-align: justify">13,281,029<FONT STYLE="font-size: 10pt"> shares</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Use of proceeds</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We will not receive any proceeds from the issuance of the shares of common stock offered under this prospectus to the holders of our Series B Preferred Stock.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Risk factors</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">See &ldquo;Risk Factors&rdquo; beginning on page S-7<B> </B>of this prospectus supplement and page 4 of the accompanying prospectus for a discussion of factors that you should read and consider before investing in our securities.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The NASDAQ Capital Market symbol&#9;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">PEIX</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The number of shares of common
stock shown above to be outstanding after this offering is based on the  13,106,291 shares outstanding as of July 25, 2013
and excludes the following as of July 25, 2013:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>257,153 shares of common stock reserved for issuance under our 2006 Stock Incentive Plan, or 2006 Plan, of which options to
purchase 241,246 shares were outstanding as of that date, at a weighted average exercise price of $4.20 per share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>762 shares of common stock reserved for issuance under outstanding options issued under our 2004 Stock Option Plan, or 2004
Plan, at a weighted average exercise price of $867.23 per share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>8,269,578 shares of common stock reserved for issuance under warrants to purchase common stock outstanding as of that date,
other than the Warrants held by the selling security holders, at a weighted average exercise price of $10.29 per share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>517,032 shares of common stock reserved for issuance upon conversion of our Series B Cumulative Convertible Preferred Stock,
or Series B Preferred Stock; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any additional shares of common stock we may issue from time to time after that date.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a result of the issuance of securities
in this offering, the exercise price of certain of our outstanding warrants will be adjusted downward as a result of weighted-average
anti-dilution price protection provisions contained in the agreements governing such securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">RISK
FACTORS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Investing in the securities offered
hereby involves a high degree of risk. You should carefully consider the following risks factors and the risk factors incorporated
by reference to our filings with the Securities and Exchange Commission pursuant to Sections&nbsp;13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended, or Exchange Act, and all other information contained or incorporated by reference
in this prospectus supplement and the accompanying prospectus, including our consolidated financial statements and the related
notes, before investing in our securities. 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.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>Risks Related
to Our Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>We have incurred significant losses and negative
operating cash flow in the past and we may incur significant losses and negative operating cash flow in the foreseeable future.
Continued losses and negative operating cash flow will hamper our operations and prevent us from expanding our business. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have incurred significant losses and
negative operating cash flow in the past. For the quarter ended March 31, 2013, we incurred a consolidated net loss of approximately
$6.6 million and a negative operating cash flow of approximately $6.5 million. For 2012 and 2011, we incurred consolidated net
losses of approximately $43.4 million and $4.0 million and negative operating cash flows of approximately $20.8 million and $4.0
million, respectively. We believe that we may incur significant losses and negative operating cash flows in the foreseeable future.
We expect to rely on cash on hand, cash, if any, generated from our operations and cash, if any, generated from future financing
activities, to fund all of the cash requirements of our business. Continued losses and negative operating cash flow may hamper
our operations and impede us from expanding our business. Continued losses and negative operating cash flows are also likely to
make our capital raising needs more acute while limiting our ability to raise additional financing on favorable terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>The results of our operations and our ability
to operate at a profit is largely dependent on managing the prices of corn, natural gas, ethanol and WDG, all of which are subject
to significant volatility and uncertainty. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our results of operations are highly
impacted by commodity prices, including the cost of corn and natural gas that we must purchase, and the prices of ethanol and WDG
that we sell. Prices and supplies are subject to and determined by market forces over which we have no control, such as weather,
domestic and global demand, shortages, export prices and various governmental policies in the United States and around the world.
For example, over a period of four weeks at the end of 2011, the market price of ethanol declined by approximately 28%, which substantially
reduced our profitability during the fourth quarter and full year of 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a result of price volatility of corn,
natural gas, ethanol and WDG, our results of operations may fluctuate substantially. In addition, increases in corn or natural
gas prices or decreases in ethanol or WDG prices may make it unprofitable to operate. In fact, some of our marketing activities
will likely be unprofitable in a market of generally declining ethanol prices due to the nature of our business. For example, to
satisfy customer demands, we must maintain certain quantities of ethanol inventory for subsequent resale. Moreover, we procure
much of our inventory outside the context of a marketing arrangement and therefore must buy ethanol at a price established at the
time of purchase and sell ethanol at an index price established later at the time of sale that is generally reflective of movements
in the market price of ethanol. As a result, our margins for ethanol sold in these transactions generally decline and may turn
negative as the market price of ethanol declines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">No assurance can be given that corn or
natural gas can be purchased at, or near, current or any particular prices or that ethanol or WDG will sell at, or near, current
or any particular prices. Consequently, our results of operations and financial position may be adversely affected by increases
in the price of corn or natural gas or decreases in the price of ethanol or WDG.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Over the past several years, the spread
between ethanol and corn prices has fluctuated widely and narrowed significantly. Fluctuations are likely to continue to occur.
A sustained narrow spread or any further reduction in the spread between ethanol and corn prices, whether as a result of sustained
high or increased corn prices or sustained low or decreased ethanol prices, would adversely affect our results of operations and
financial position. Further, combined revenues from sales of ethanol and WDG could decline below the marginal cost of production,
which could cause us to suspend production of ethanol and WDG at some or all of the Pacific Ethanol Plants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>We are currently a member of New PE Holdco with
limited control over certain business decisions. As a result, our interests may not be as well served as if we were in control
of all aspects of the business of New PE Holdco, which could adversely affect its contribution to our results of operations and
our business prospects related to that entity.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">New PE Holdco owns, and we operate, the
Pacific Ethanol Plants. We currently hold an 85% ownership interest in New PE Holdco. While this represents the single largest
ownership position in New PE Holdco and although we have the power to make decisions regarding the activities of New PE Holdco
that most significantly impact New PE Holdco&rsquo;s economic performance by virtue of the terms of the asset management agreement
we have with New PE Holdco and the Plant Owners and by virtue of the fact that Neil Koehler, our President and Chief Executive
Officer, is the sole manager of New PE Holdco, some actions require the consent of holders of 100% of the ownership interests.
In addition, we are precluded from voting on matters in which we have a direct financial interest, such as the amendment or extension
of the asset management agreement we have with New PE Holdco and the Plant Owners and/or the marketing agreements we have with
the Plant Owners whose facilities are operational. As a result of these limitations, we are dependent on the business judgment
of the other owners of New PE Holdco in respect of a number of significant matters bearing on the operations of the Pacific Ethanol
Plants. Consequently, our interests may not be as well served as if we were in complete control of New PE Holdco, and the contribution
by New PE Holdco to our results of operations and our business prospects related to that entity may be adversely affected by our
lack of control over that entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>Increased ethanol production may cause a decline
in ethanol prices or prevent ethanol prices from rising, and may have other negative effects, adversely impacting our results of
operations, cash flows and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We believe that the most significant
factor influencing the price of ethanol has been the substantial increase in ethanol production in recent years. Domestic ethanol
production capacity has increased steadily from an annualized rate of 1.5 billion gallons per year in January 1999 to 14.9 billion
gallons in 2012 according to the RFA. However, increases in the demand for ethanol may not be commensurate with increases in the
supply of ethanol, thus leading to lower ethanol prices. Demand for ethanol could be impaired due to a number of factors, including
regulatory developments and reduced United States gasoline consumption. Reduced gasoline consumption has occurred in the past and
could occur in the future as a result of increased gasoline or oil prices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>The market price of ethanol is volatile and subject
to large fluctuations, which may cause our profitability or losses to fluctuate significantly.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The market price of ethanol is volatile
and subject to large fluctuations. The market price of ethanol is dependent upon many factors, including the supply of ethanol
and the price of gasoline, which is in turn dependent upon the price of petroleum which is highly volatile and difficult to forecast.
For example, although the market price of ethanol increased by approximately 42% for the year ended December 31, 2011 as compared
to 2010, during a period of four weeks at the end of 2011, the market price of ethanol declined by approximately 28%, which substantially
reduced our profitability during the fourth quarter and full year of 2011. Fluctuations in the market price of ethanol may cause
our profitability or losses to fluctuate significantly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>Some of our marketing activities will likely
be unprofitable in a market of generally declining ethanol prices due to the nature of our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Some of our marketing activities will
likely be unprofitable in a market of generally declining ethanol prices due to the nature of our business. For example, to satisfy
customer demands, we must maintain certain quantities of ethanol inventory for subsequent resale. Moreover, we procure much of
our inventory outside the context of a marketing arrangement and therefore must buy ethanol at a price established at the time
of purchase and sell ethanol at an index price established later at the time of sale that is generally reflective of movements
in the market price of ethanol. As a result, our margins for ethanol sold in these transactions generally decline and may turn
negative as the market price of ethanol declines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>Disruptions in ethanol production infrastructure
may adversely affect our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our business depends on the continuing
availability of rail, road, port, storage and distribution infrastructure. In particular, due to limited storage capacity at the
Pacific Ethanol Plants and other considerations related to production efficiencies, the Pacific Ethanol Plants depend on just-in-time
delivery of corn. The production of ethanol also requires a significant and uninterrupted supply of other raw materials and energy,
primarily water, electricity and natural gas. The prices of electricity and natural gas have fluctuated significantly in the past
and may fluctuate significantly in the future. Local water, electricity and gas utilities may not be able to reliably supply the
water, electricity and natural gas that the Pacific Ethanol Plants will need or may not be able to supply those resources on acceptable
terms. Any disruptions in the ethanol production infrastructure, whether caused by labor difficulties, earthquakes, storms, other
natural disasters or human error or malfeasance or other reasons, could prevent timely deliveries of corn or other raw materials
and energy and may require the Pacific Ethanol Plants to halt production which could have a material adverse effect on our business,
results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>We and the Pacific Ethanol Plants may engage
in hedging transactions and other risk mitigation strategies that could harm our results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In an attempt to partially offset the
effects of volatility of ethanol prices and corn and natural gas costs, the Pacific Ethanol Plants may enter into contracts to
fix the price of a portion of their ethanol production or purchase a portion of their corn or natural gas requirements on a forward
basis. In addition, we may engage in other hedging transactions involving exchange-traded futures contracts for corn, natural gas
and unleaded gasoline from time to time. The financial statement impact of these activities is dependent upon, among other things,
the prices involved and our ability to sell sufficient products to use all of the corn and natural gas for which forward commitments
have been made. Hedging arrangements also expose us to the risk of financial loss in situations where the other party to the hedging
contract defaults on its contract or, in the case of exchange-traded contracts, where there is a change in the expected differential
between the underlying price in the hedging agreement and the actual prices paid or received by us. As a result, our results of
operations and financial position may be adversely affected by fluctuations in the price of corn, natural gas, ethanol and unleaded
gasoline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>Operational difficulties at the Pacific Ethanol
Plants could negatively impact sales volumes and could cause us to incur substantial losses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Operations at the Pacific Ethanol Plants
are subject to labor disruptions, unscheduled downtimes and other operational hazards inherent in the ethanol production industry,
including equipment failures, fires, explosions, abnormal pressures, blowouts, pipeline ruptures, transportation accidents and
natural disasters. Some of these operational hazards may cause personal injury or loss of life, severe damage to or destruction
of property and equipment or environmental damage, and may result in suspension of operations and the imposition of civil or criminal
penalties. Insurance obtained by the Pacific Ethanol Plants may not be adequate to fully cover the potential operational hazards
described above or the Pacific Ethanol Plants may not be able to renew this insurance on commercially reasonable terms or at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Moreover, the production facilities at
the Pacific Ethanol Plants may not operate as planned or expected. All of these facilities are designed to operate at or above
a specified production capacity. The operation of these facilities is and will be, however, subject to various uncertainties. As
a result, these facilities may not produce ethanol and its co-products at expected levels. In the event any of these facilities
do not run at their expected capacity levels, our business, results of operations and financial condition may be materially and
adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>The United States ethanol industry is highly
dependent upon myriad federal and state legislation and regulation and any changes in legislation or regulation could have a material
adverse effect on our results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><I>Various studies have criticized the efficiency of
ethanol in general, and corn-based ethanol in particular, which could lead to the reduction or repeal of mandates that require
the use and domestic production of ethanol or otherwise negatively impact public perception and acceptance of ethanol as an alternative
fuel.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Although many trade groups, academics
and governmental agencies have supported ethanol as a fuel additive that promotes a cleaner environment, others have criticized
ethanol production as consuming considerably more energy and emitting more greenhouse gases than other biofuels and as potentially
depleting water resources. Other studies have suggested that ethanol negatively impacts consumers by causing higher prices for
dairy, meat and other foodstuffs from livestock that consume corn. If these views gain acceptance, support for existing measures
requiring the use and domestic production of corn-based ethanol could decline, leading to a reduction or repeal of these measures.
These views could also negatively impact public perception of the ethanol industry and acceptance of ethanol as a component for
blending in transportation fuel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><I>Waivers or repeal of the national Renewable Fuel
Standard&rsquo;s minimum levels of renewable fuels included in gasoline could have a material adverse effect on our results of
operations.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Shortly after passage of the Energy Independence
and Security Act of 2007, which increased the minimum mandated required usage of ethanol, a Congressional sub-committee held hearings
on the potential impact of the national RFS on commodity prices. While no action was taken by the sub-committee towards repeal
of the national RFS, any attempt by Congress to re-visit, repeal or grant waivers of the national RFS could adversely affect demand
for ethanol and could have a material adverse effect on our results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>The ethanol production and marketing industry
is extremely competitive. Many of our significant competitors have greater production and financial resources and one or more of
these competitors could use their greater resources to gain market share at our expense. In addition, a number of Kinergy&rsquo;s
suppliers may circumvent the marketing services we provide, causing our sales and profitability to decline. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The ethanol production and marketing
industry is extremely competitive. Many of our significant competitors in the ethanol production and marketing industry, including
Archer Daniels Midland Company and Valero Energy Corporation, have substantially greater production and/or financial resources.
As a result, our competitors may be able to compete more aggressively and sustain that competition over a longer period of time.
Successful competition will require a continued high level of investment in marketing and customer service and support. Our limited
resources relative to many significant competitors may cause us to fail to anticipate or respond adequately to new developments
and other competitive pressures. This failure could reduce our competitiveness and cause a decline in market share, sales and profitability.
Even if sufficient funds are available, we may not be able to make the modifications and improvements necessary to compete successfully.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We also face increasing competition from
international suppliers. Currently, international suppliers produce ethanol primarily from sugar cane and have cost structures
that are generally substantially lower than the cost structures of the Pacific Ethanol Plants. Any increase in domestic or foreign
competition could cause the Pacific Ethanol Plants to reduce their prices and take other steps to compete effectively, which could
adversely affect their and our results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, some of our suppliers are
potential competitors and, especially if the price of ethanol reaches historically high levels, they may seek to capture additional
profits by circumventing our marketing services in favor of selling directly to our customers. If one or more of our major suppliers,
or numerous smaller suppliers, circumvent our marketing services, our sales and profitability may decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>If Kinergy fails to satisfy its financial covenants
under its credit facility, it may experience a loss or reduction of that facility, which would have a material adverse effect on
our financial condition and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are substantially dependent on Kinergy&rsquo;s
credit facility to help finance its operations. Kinergy must satisfy quarterly financial covenants under its credit facility, including
covenants regarding its quarterly EBITDA and fixed coverage ratios. Kinergy will be in default under its credit facility if it
fails to satisfy any financial covenant. A default may result in the loss or reduction of the credit facility. The loss of Kinergy&rsquo;s
credit facility, or a significant reduction in Kinergy&rsquo;s borrowing capacity under the facility, would result in Kinergy&rsquo;s
inability to finance a significant portion of its business and would have a material adverse effect on our financial condition
and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>The high concentration of our sales within the
ethanol marketing and production industry could result in a significant reduction in sales and negatively affect our profitability
if demand for ethanol declines. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We expect to be completely focused on
the marketing and production of ethanol and its co-products for the foreseeable future. We may be unable to shift our business
focus away from the marketing and production of ethanol to other renewable fuels or competing products. Accordingly, an industry
shift away from ethanol or the emergence of new competing products may reduce the demand for ethanol. A downturn in the demand
for ethanol would likely materially and adversely affect our sales and profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>In addition to ethanol produced by the Pacific
Ethanol Plants, we also depend on a small number of third-party suppliers for a significant portion of the ethanol we sell. If
any of these suppliers does not continue to supply us with ethanol in adequate amounts, we may be unable to satisfy the demands
of our customers and our sales, profitability and relationships with our customers will be adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition to the ethanol produced by
the Pacific Ethanol Plants, we also depend, and expect to continue to depend for the foreseeable future, on a small number of third-party
suppliers for a significant portion of the total amount of ethanol that we sell. Our third-party suppliers are primarily located
in the Midwestern United States. The delivery of ethanol from these suppliers is therefore subject to delays resulting from inclement
weather and other conditions. If any of these suppliers is unable or declines for any reason to continue to supply us with ethanol
in adequate amounts, we may be unable to replace that supplier and source other supplies of ethanol in a timely manner, or at all,
to satisfy the demands of our customers. If this occurs, our sales, profitability and our relationships with our customers will
be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>We may be adversely affected by environmental,
health and safety laws, regulations and liabilities.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are subject to various federal, state
and local environmental laws and regulations, including those relating to the discharge of materials into the air, water and ground,
the generation, storage, handling, use, transportation and disposal of hazardous materials, and the health and safety of our employees.
In addition, some of these laws and regulations require us to operate under permits that are subject to renewal or modification.
These laws, regulations and permits can often require expensive pollution control equipment or operational changes to limit actual
or potential impacts to the environment. A violation of these laws and regulations or permit conditions can result in substantial
fines, natural resource damages, criminal sanctions, permit revocations and/or facility shutdowns. In addition, we have made, and
expect to make, significant capital expenditures on an ongoing basis to comply with increasingly stringent environmental laws,
regulations and permits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may be liable for the investigation
and cleanup of environmental contamination at each of the Pacific Ethanol Plants or other third-party plants that we operate and
at off-site locations where we arrange for the disposal of hazardous substances. If these substances have been or are disposed
of or released at sites that undergo investigation and/or remediation by regulatory agencies, we may be responsible under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, or other environmental laws for all or part of the costs of investigation
and/or remediation, and for damages to natural resources. We may also be subject to related claims by private parties alleging
property damage and personal injury due to exposure to hazardous or other materials at or from those properties. Some of these
matters may require us to expend significant amounts for investigation, cleanup or other costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, new laws, new interpretations
of existing laws, increased governmental enforcement of environmental laws or other developments could require us to make significant
additional expenditures. Continued government and public emphasis on environmental issues can be expected to result in increased
future investments for environmental controls at the Pacific Ethanol Plants. Present and future environmental laws and regulations,
and interpretations of those laws and regulations, applicable to our operations, more vigorous enforcement policies and discovery
of currently unknown conditions may require substantial expenditures that could have a material adverse effect on our results of
operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The hazards and risks associated with
producing and transporting our products (including fires, natural disasters, explosions and abnormal pressures and blowouts) may
also result in personal injury claims or damage to property and third parties. As protection against operating hazards, we maintain
insurance coverage against some, but not all, potential losses. However, we could sustain losses for uninsurable or uninsured risks,
or in amounts in excess of existing insurance coverage. Events that result in significant personal injury or damage to our property
or third parties or other losses that are not fully covered by insurance could have a material adverse effect on our results of
operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>If we are unable to attract and retain key personnel,
our ability to operate effectively may be impaired.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our ability to operate our business and
implement strategies depends, in part, on the efforts of our executive officers and other key employees. Our future success will
depend on, among other factors, our ability to retain our current key personnel and attract and retain qualified future key personnel,
particularly executive management. Failure to attract or retain key personnel could have a material adverse effect on our business
and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>We depend on a small number of customers for
the majority of our sales. A reduction in business from any of these customers could cause a significant decline in our overall
sales and profitability.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The majority of our sales are generated
from a small number of customers. During 2012 and 2011, three customers accounted for an aggregate of approximately 49% and 38%
of our net sales, respectively. We expect that we will continue to depend for the foreseeable future upon a small number of customers
for a significant portion of our sales. Our agreements with these customers generally do not require them to purchase any specified
amount of ethanol or dollar amount of sales or to make any purchases whatsoever. Therefore, in any future period, our sales generated
from these customers, individually or in the aggregate, may not equal or exceed historical levels. If sales to any of these customers
cease or decline, we may be unable to replace these sales with sales to either existing or new customers in a timely manner, or
at all. A cessation or reduction of sales to one or more of these customers could cause a significant decline in our overall sales
and profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>Our lack of long-term ethanol orders and commitments
by our customers could lead to a rapid decline in our sales and profitability.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We cannot rely on long-term ethanol orders
or commitments by our customers for protection from the negative financial effects of a decline in the demand for ethanol or a
decline in the demand for our marketing services. The limited certainty of ethanol orders can make it difficult for us to forecast
our sales and allocate our resources in a manner consistent with our actual sales. Moreover, our expense levels are based in part
on our expectations of future sales and, if our expectations regarding future sales are inaccurate, we may be unable to reduce
costs in a timely manner to adjust for sales shortfalls. Furthermore, because we depend on a small number of customers for a significant
portion of our sales, the magnitude of the ramifications of these risks is greater than if our sales were less concentrated. As
a result of our lack of long-term ethanol orders and commitments, we may experience a rapid decline in our sales and profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Risks Relating to Ownership of Our
Common Stock and this Offering</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>Our future ability to raise capital may be limited
by applicable laws and regulations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our capital raising activities have benefited
from using a &ldquo;shelf&rdquo; registration on Form S-3, which typically enables an issuer to raise additional capital on a more
timely and cost effective basis than through other means, such as registration of a securities offering under a Form S-1 registration
statement. Our current and future ability to raise additional capital through the sale and issuance of our equity securities may
be limited by, among other things, current Securities and Exchange Commission rules and regulations. Under current Securities and
Exchange Commission rules and regulations, to be eligible to use a Form S-3 registration statement for primary offerings without
restriction as to the amount of securities to be sold and issued, the aggregate market value of our common equity held by non-affiliates
(i.e., our &ldquo;public float&rdquo;) must be at least $75.0 million at the time we file the Form S-3 (calculated pursuant to
the General Instructions to Form S-3). Furthermore, with respect to our effective Form S-3 registration statement, the Securities
and Exchange Commission&rsquo;s rules and regulations require that we periodically re-evaluate the value of our public float (typically
when we file our Annual Report on Form 10-K) to determine whether we continue to satisfy the foregoing public float requirement.
As of the date of this prospectus, we do not satisfy the $75.0 million public float requirement. As a result, the amount we can
raise through primary offerings of our securities in any 12-month period using a Form S-3 registration statement is limited to
an aggregate of one-third of our public float. Moreover, the market value of all securities sold by us under our Form S-3 registration
statements during the 12-month period prior to any intended sale will be subtracted from that amount to determine the amount we
can then raise under our Form S-3 registration statements. If our public float increases to $75.0 million or more, this limitation
would cease to apply until we conduct our next re-evaluation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>The conversion of convertible securities, the
issuance of the shares of our common stock in payment of interest on outstanding promissory notes, and the exercise of outstanding
options and warrants to purchase our common stock could substantially dilute your investment, impede our ability to obtain additional
financing and cause us to incur additional expenses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our Series B Preferred Stock and convertible
promissory notes, which are convertible into our common stock, and outstanding options to acquire our common stock issued to employees,
directors and others, and warrants to purchase our common stock, allow the holders of these securities an opportunity to profit
from a rise in the market price of our common stock such that conversion of the securities will result in dilution of the equity
interests of our common stockholders. In addition, the issuance of shares of our common stock at our election in payment of principal
and/or interest on our outstanding promissory notes will result in dilution of the equity interests of our common stockholders.
The terms on which we may obtain additional financing may be adversely affected by the existence and potentially dilutive impact
of our outstanding convertible and other promissory notes, Series B Preferred Stock, options and warrants. In addition, holders
of our outstanding promissory notes and certain warrants have registration rights with respect to the common stock underlying those
notes and warrants, the registration of which involves substantial expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><B><I>The voting power and value of your investment
could decline if our outstanding securities that are convertible or exercisable into shares of our common stock are converted or
exercised.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have issued a significant amount of
securities that are convertible or exercisable into shares of our common stock, the conversion or exercise of these securities
could have a substantial negative impact on the price of our common stock and could result in a dramatic decrease in the value
of your investment. The conversion or exercise prices applicable to some of our outstanding securities are subject to market-price
protection that may cause the conversion or exercise prices to be reduced in the event of a decline in the market price of our
common stock. In addition, the conversion or exercise prices of some of our outstanding securities are subject to downward anti-dilution
adjustments, from time to time, if we issue securities at a purchase, exercise or conversion price that is less than the then-applicable
conversion or exercise price of the applicable security. Consequently, the voting power and value of your investment in each of
these events would decline if the securities are converted or exercised for shares of our common stock at lower prices as a result
of the declining market price or sales of our securities are made below the conversion or exercise prices of some of our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The market-price protection features
of our convertible notes could also allow the convertible notes to become convertible into a greatly increased number of additional
shares of our common stock, particularly if a holder of a convertible note sequentially converts portions of the note into shares
of our common stock at alternate conversion prices and resells those shares into the market. If a holder of a convertible note
sequentially converts portions of the note into shares of our common stock or if we issue shares of common stock in lieu of cash
payments of principal and interest, each at alternate conversion prices, and the holder of the note resells those shares into the
market, then the market price of our common stock could decline due to the additional shares available in the market, particularly
in the event of any thin trading volume of our common stock. Consequently, if a holder of a convertible note repeatedly converts
portions of the note or we repeatedly issue shares of common stock in lieu of cash payments of principal and/or interest on the
note at alternate conversion prices and then the holder resells those underlying shares into the market, a continuous downward
spiral of the market price of our common stock could occur that would benefit a holder of the convertible note at the expense of
other existing or potential holders of our common stock, potentially creating a divergence of interests between a holder of the
convertible note and investors who purchase the shares of common stock resold by a holder of the convertible note following conversion
of the note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>The market price of our common stock and the
value of your investment could substantially decline if our convertible notes or Series B Preferred Stock are converted into shares
of our common stock, if we issue shares of our common stock in payment of principal and/or interest on our notes and if our options
and warrants are exercised for shares of our common stock and all of these shares of common stock are resold into the market, or
if a perception exists that a substantial number of shares will be issued upon conversion of our Notes or Series B Preferred Stock,
upon the payment of principal and/or interest on our promissory notes or upon exercise of our warrants or options and then resold
into the market.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If the conversion prices at which the
Series B Preferred Stock is converted, the conversion prices at which shares of common stock in payment of principal and/or interest
on our notes are issued, and the exercise prices at which our warrants and options are exercised are lower than the price at which
you made your investment, immediate dilution of the value of your investment will occur. In addition, sales of a substantial number
of shares of common stock issued upon conversion of Series B Preferred Stock, in lieu of cash payments of principal and/or interest
on our notes and upon exercise of our warrants and options, or even the perception that these sales could occur, could adversely
affect the market price of our common stock. As a result, you could experience a substantial decline in the value of your investment
as a result of both the actual and potential conversion of our outstanding shares of Series B Preferred Stock, issuance of shares
of common stock in lieu of cash payments of principal and/or interest on our notes and exercise of our outstanding warrants or
options.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>The issuance of shares upon the conversion of
Series B Preferred Stock, upon the payment of principal and/or interest on our notes and upon the exercise of outstanding options
and warrants could result in a change of control of Pacific Ethanol.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of July 25, 2013, we had
outstanding options, warrants, Series B Preferred Stock and Notes that were exercisable for or convertible into approximately
11,153,274  shares of common stock based on conversion and exercise prices as of that date. A change of control of Pacific
Ethanol could occur if a significant number of shares of our common stock are issued to the holders of our outstanding
options, warrants, notes or shares of Series B Preferred Stock.&nbsp; If a change of control occurs, then the stockholders
who historically have controlled our company would no longer have the ability to exert significant control over matters that
could include the election of our directors, changes in the size and composition of our board of directors, and mergers and
other business combinations involving Pacific Ethanol. Instead, one or more other stockholders could gain the ability to
exert this type of control and may also, through control of our board of directors and voting power, be able to control a
number of decisions, including decisions regarding the qualification and appointment of officers, dividend policy, access to
capital (including borrowing from third-party lenders and the issuance of additional equity securities), and the acquisition
or disposition of our assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>As a result of our issuance of
shares of Series B Preferred Stock, our common stockholders may experience numerous negative effects and most of the rights of
our common stockholders will be subordinate to the rights of the holders of our Series B Preferred Stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a result of our issuance of shares
of Series B Preferred Stock, our common stockholders may experience numerous negative effects, including dilution from any dividends
paid in preferred stock and anti-dilution adjustments. In addition, rights in favor of the holders of our Series B Preferred Stock
include seniority in liquidation and dividend preferences; substantial voting rights; and numerous protective provisions. Also,
our outstanding Series B Preferred Stock could have the effect of delaying, deferring and discouraging another party from acquiring
control of Pacific Ethanol.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B><I>Our stock price is highly volatile, which could
result in substantial losses for investors purchasing shares of our common stock and in litigation against us.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The market price of our common stock has
fluctuated significantly in the past and may continue to fluctuate significantly in the future. The market price of our common
stock may continue to fluctuate in response to one or more of the following factors, many of which are beyond our control:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>our ability to maintain contracts that are critical to our operations, including the asset management agreement with the Plant
Owners that provide us with the ability to operate the Pacific Ethanol Plants and the marketing agreements with the Plant Owners
whose facilities are operational that provide us with the ability to market all ethanol and co-products produced by the Pacific
Ethanol Plants;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>fluctuations in the market price of ethanol and its co-products;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the cost of key inputs to the production of ethanol, including corn and natural gas;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the volume and timing of the receipt of orders for ethanol from major customers;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>competitive pricing pressures;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>our ability to produce, sell and deliver ethanol on a cost-effective and timely basis;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the introduction and announcement of one or more new alternatives to ethanol by our competitors;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>changes in market valuations of similar companies;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>stock market price and volume fluctuations generally;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>regulatory developments or increased enforcement;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>fluctuations in our quarterly or annual operating results;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>additions or departures of key personnel;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>our inability to obtain financing; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.15pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>our financing activities and future sales of our common stock or other securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Furthermore, we believe that the economic
conditions in California and other Western states, as well as the United States as a whole, could have a negative impact on our
results of operations. Demand for ethanol could also be adversely affected by a slow-down in overall demand for oxygenate and gasoline
additive products. The levels of our ethanol production and purchases for resale will be based upon forecasted demand. Accordingly,
any inaccuracy in forecasting anticipated revenues and expenses could adversely affect our business. The failure to receive anticipated
orders or to complete delivery in any quarterly period could adversely affect our results of operations for that period. Quarterly
results are not necessarily indicative of future performance for any particular period, and we may not experience revenue growth
or profitability on a quarterly or an annual basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The price at which you purchase shares
of our common stock may not be indicative of the price that will prevail in the trading market. You may be unable to sell your
shares of common stock at or above your purchase price, which may result in substantial losses to you and which may include the
complete loss of your investment. In the past, securities class action litigation has often been brought against a company following
periods of high stock price volatility. We may be the target of similar litigation in the future. Securities litigation could result
in substantial costs and divert management&rsquo;s attention and our resources away from our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Any of the risks described above could
have a material adverse effect on our results of operations, the price of our common stock, or both.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">FORWARD&ndash;LOOKING
STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This prospectus and the documents incorporated
by reference into this prospectus contain &ldquo;forward-looking statements&rdquo; and are intended to be covered by the safe harbor
provided for under Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Exchange Act.
These forward-looking statements include our current expectations and projections about future results, performance, business strategy,
recent and pending acquisitions, budgets, objectives of management for future operations, legal strategies, prospects and opportunities.
We have tried to identify these forward-looking statements by using words like &ldquo;believe,&rdquo; &ldquo;expect,&rdquo; &ldquo;may,&rdquo;
&ldquo;will,&rdquo; &ldquo;would,&rdquo; &ldquo;could,&rdquo; &ldquo;seek,&rdquo; &ldquo;estimate,&rdquo; &ldquo;continue,&rdquo;
&ldquo;anticipate,&rdquo; &ldquo;intend,&rdquo; &ldquo;future,&rdquo; &ldquo;plan&rdquo; 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. We claim
the protection of the safe harbor for forward&ndash;looking statements contained in the Private Securities Litigation Reform Act
of 1995 for all forward&ndash;looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Forward&ndash;looking statements may
be made regarding our business, operations, financial performance and condition, earnings, our prospects, as well as regarding
our industry generally. Forward&ndash;looking statements are not guarantees of performance. You should understand that these factors,
in addition to those discussed in &ldquo;Risk Factors&rdquo; above and elsewhere in this prospectus, and in the documents that
are incorporated by reference into this prospectus, could affect our future results and could cause those results or other outcomes
to differ materially from those expressed or implied in any forward&ndash;looking statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">USE
OF PROCEEDS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We will not receive any proceeds from
the issuance of the shares of common stock offered hereby to the holders of our Series B Preferred Stock. The issuance of the shares
of common stock offered hereby is in satisfaction of a portion of the amounts owed by us to the holders of Series B Preferred Stock
in respect of accrued and unpaid dividends on shares of the Series B Preferred Stock.</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">DILUTION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a result of this offering our stockholders
will experience dilution to the extent of the difference between the price per share of common stock being offered in this offering
and the net tangible book value per share of our common stock immediately after this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our net tangible book value as of
March 31, 2013 was approximately $64.5 million, or $6.14<B> </B>per share of common stock. Net tangible book value per share
is equal to our total tangible assets minus total liabilities, all divided by the number of shares of common stock
outstanding as of March 31, 2013. After giving effect to the sale in this offering of 174,738 shares of common stock at the
public offering price of $4.19 per share, less the estimated offering expenses we expect to pay, our pro forma net tangible
book value as of March 31, 2013 would have been approximately $65.1 million, or approximately $6.10<B> </B>per share. This
represents an immediate decrease in net tangible book value per share of approximately $0.04<B> </B>per share to our existing
stockholders. The following table illustrates this calculation on a per share basis:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 87%; text-align: justify; padding-left: 22pt">Net tangible book value per share as of March 31, 2013&#9;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">6.14</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 22pt">Decrease per share attributable to the offering&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(0.04</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 22pt">As adjusted net tangible book value per share as of March 31, 2013 after giving effect to this offering&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6.10</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-left: 22pt; width: 83%">Common stock outstanding immediately prior to this offering</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: right">13,106,291 shares</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-left: 22pt">Common stock to be outstanding immediately after this offering</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -3.45pt; padding-left: 3.45pt; text-align: right">13,281,029<FONT STYLE="font-size: 10pt"> shares</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The number of shares of common
stock shown above to be outstanding after this offering is based on the 13,106,291  shares outstanding as of July 25, 2013
and excludes the following as of July 25, 2013:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>257,153 shares of common stock reserved for issuance under our 2006 Stock Incentive Plan, or 2006 Plan, of which options to
purchase 241,246 shares were outstanding as of that date, at a weighted average exercise price of $4.20 per share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>762 shares of common stock reserved for issuance under outstanding options issued under our 2004 Stock Option Plan, or 2004
Plan, at a weighted average exercise price of $867.23 per share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>8,269,578 shares of common stock reserved for issuance under warrants to purchase common stock outstanding as of that date,
other than the Warrants held by the selling security holders, at a weighted average exercise price of $10.29 per share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>517,032 shares of common stock reserved for issuance upon conversion of our Series B Cumulative Convertible Preferred Stock,
or Series B Preferred Stock; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any additional shares of common stock we may issue from time to time after that date</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As a result of the issuance of securities
in this offering, the exercise price of certain of our outstanding warrants will be adjusted downward as a result of weighted-average
anti-dilution price protection provisions contained in the agreements governing such securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">DESCRIPTION
OF COMMON STOCK</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In this offering, we are offering 174,738
shares of our common stock to the holders of our Series B Preferred Stock at a negotiated offering price of $4.19 per share. The
following is a description of the material terms of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Authorized and Outstanding Capital Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our authorized capital stock consists
of 300,000,000 shares of 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&nbsp;A Preferred Stock and 1,580,790 shares are designated as Series&nbsp;B
Preferred Stock. As of July 25, 2013, there were 13,106,291<B> </B>shares of common stock, no shares of Series A Preferred Stock
and 926,942 shares of Series B Preferred Stock issued and outstanding. On June 8, 2011, we effected a one-for-seven reverse split
of our common stock. On May 14, 2013, we effect a one-for-fifteen reverse split of our common stock. All share information contained
in this prospectus reflects the effects of these reverse stock splits. 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&nbsp;A Preferred Stock, or Series A Certificate of Designations, our
Certificate of Designations, Powers, Preferences and Rights of the Series&nbsp;B Preferred Stock, or Series&nbsp;B Certificate
of Designations, and our bylaws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">All outstanding shares of common stock
are fully paid and nonassessable. The following summarizes the rights of holders of our common stock:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>each holder of common stock is entitled to one vote per share on all matters to be voted upon generally by the stockholders;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>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;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>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;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>there are no redemption or sinking fund provisions applicable to our common stock; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>there are no preemptive or conversion rights applicable to our common stock.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Transfer Agent and Registrar</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our shares of common stock are listed
on The NASDAQ Capital Market under the symbol &ldquo;PEIX.&rdquo; The transfer agent and registrar for our common stock is American
Stock Transfer &amp; Trust Company, LLC. Its telephone number is (718) 921-8200.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">PLAN
OF DISTRIBUTION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are offering 174,738 shares of our
common stock to all of the holders of our Series B Preferred Stock, including certain of our affiliates, at a
negotiated offering price of $4.19 per share. We are issuing the shares pursuant to the terms of an agreement with the
holders of our Series B Preferred Stock under which each of the holders of our Series B Preferred Stock has agreed to forbear
from exercising its rights with respect to accrued and unpaid dividends on our Series B Preferred Stock owed to such holder
until December 31, 2014<B> </B>in consideration of us paying approximately 14% of the accrued and unpaid dividends owed to such
holder in shares of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Definitive prospectuses will be distributed
to all the holders of our Series B Preferred Stock. We currently anticipate that the closing of the sale of the shares of common
stock will take place on or about July 31, 2013. The estimated offering expenses payable by us are approximately $5,000, which
includes legal, accounting and printing costs and various other fees.</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">DIVIDEND
POLICY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">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. In addition, the holders of our outstanding Series B Preferred Stock are entitled to dividends of 7% per annum, payable
quarterly, none of which have been paid for the years ended December 31, 2011, 2010 and 2009. Although there are approximately
$5.9 million of accrued and unpaid dividends on the outstanding shares of Series B Preferred Stock from prior periods through December
31, 2011, we declared and paid $0.3 million in dividends on our Series B Preferred Stock for each of the three months ended March
31, 2012, the three months ended June 30, 2012, the three months ended September 30, 2012 and the three months ended December 31,
2012 and intend to continue to declare and pay the quarterly dividends that accrue on our Series B Preferred Stock in upcoming
quarters. In addition, the issuance of the shares of common stock in this offering to the holders of our Series B Preferred Stock
will result in a reduction in the amount of the accrued and unpaid dividends on the outstanding shares of Series B Preferred Stock
from approximately $5.1 million to approximately $4.4 million. Accumulated and unpaid dividends in respect of our preferred stock
must be paid prior to the payment of any dividends to our common stockholders.</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">TRANSFER
AGENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our shares of common stock are listed
on The NASDAQ Capital Market under the symbol &ldquo;PEIX.&rdquo;&nbsp;&nbsp;The transfer agent and registrar for our common stock
is American Stock Transfer &amp; Trust Company, LLC. Its telephone number is (718) 921-8200.</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">LEGAL
MATTERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The validity of the shares of common
stock offered by this prospectus supplement will be passed upon for us by our counsel, Troutman Sanders LLP, Irvine, California.</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">EXPERTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The consolidated financial statements
as of and for the years ended December 31, 2012 and 2011 incorporated by reference in this prospectus and registration statement
have been audited by Hein &amp; Associates LLP, an independent registered public accounting firm, as stated in their report (which
report expresses an unqualified opinion) and are incorporated by reference in reliance upon such report and upon the authority
of such firm as experts in accounting and auditing.</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"></P>

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<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="color: blue; font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">INCORPORATION
OF DOCUMENTS BY REFERENCE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Securities and Exchange Commission
allows us to &ldquo;incorporate by reference&rdquo; information in documents we file with them, which means that we can disclose
important information to you by referring you to those documents. The information we incorporate by reference is considered to
be part of this prospectus supplement and information that we file later with the Securities and Exchange Commission automatically
will update and supersede such information. We hereby incorporate by reference the documents listed below and any future filings
we make with the Securities and Exchange Commission under Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to
the termination of the offering of the securities covered by this prospectus supplement, as amended:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Current Reports on Form 8-K filed with the Securities and Exchange Commission on January 10, 2013,
January 15, 2013, March 28, 2013, March 28, 2013, March 28, 2013, April 30, 2013, May 8, 2013, May 10, 2013, May 16, 2013, June
18, 2013, June 20, 2013, June 26, 2013,  July 24, 2013 and July 26, 2013;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2013 filed with the Securities
and Exchange Commission on May&nbsp;15, 2013;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Definitive Proxy Statement for the 2013 Annual Meeting of Stockholders, which we filed with the
Securities and Exchange Commission on April 22, 2013;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2012, which we filed with
the Securities and Exchange Commission on April 1, 2013; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 12pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The description of our capital stock contained in our Current Report on Form&nbsp;8-K filed with
the Securities and Exchange Commission on June&nbsp;8, 2007.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We will provide a copy of the documents
we incorporate by reference (including exhibits to such filings that we have specifically incorporated by reference in such filings),
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 <FONT STYLE="color: Blue"><U>www.pacificethanol.ne</U>t</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">You should rely only on the information
provided or incorporated by reference in this prospectus supplement. We have not authorized anyone else to provide you with different
information. You should not assume that the information in this prospectus supplement is accurate as of any date other than the
date on the cover page of such documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>WHERE YOU CAN FIND
MORE INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We are subject to the informational requirements
of the Exchange Act and in accordance therewith file reports, proxy statements and other information with the Securities and Exchange
Commission. Our filings are available to the public over the Internet at the Securities and Exchange Commission&rsquo;s website
at <FONT STYLE="color: Blue"><I><U>www.sec.gov</U></I></FONT>. You may also read and copy, at prescribed rates, any document we
file with the Securities and Exchange Commission at the Public Reference Room of the Securities and Exchange Commission located
at 100 F Street, N.E., Washington, D.C. 20549. Please call the Securities and Exchange Commission at (800)&nbsp;SEC-0330 for further
information on the Securities and Exchange Commission&rsquo;s Public Reference Rooms.</P>



<P STYLE="margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0"></P>

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<P STYLE="margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0">&nbsp;</P>



<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>PROSPECTUS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0"><IMG SRC="image_001.jpg" ALT=""></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>PACIFIC ETHANOL, INC.</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>$100,000,000</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Debt Securities</B></P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Common Stock</B></P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Preferred Stock</B></P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Warrants</B></P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Units</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">This prospectus relates
to the sale from time to time in one or more offerings of up to $100,000,000 of:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: left; text-indent: 0pt">debt securities, which we may issue in one or more series;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;</TD>
    <TD STYLE="text-align: left; text-indent: 0pt">shares of our common stock;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;</TD>
    <TD STYLE="text-align: left; text-indent: 0pt">shares of our preferred stock, which we may issue in one or more series or classes;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;</TD>
    <TD STYLE="text-align: left; text-indent: 0pt">warrants to purchase our debt securities, common stock or preferred stock; and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;</TD>
    <TD STYLE="text-align: left; text-indent: 0pt">units.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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. See &#8220;Plan of Distribution.&#8221; The names
of the underwriters, dealers and agents, if any, will be set forth in the accompanying prospectus supplement. If any underwriters,
dealers or agents are involved in the sale of any securities, the applicable prospectus supplement will also set forth any applicable
commissions or discounts payable to them.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

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<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Our common stock is traded
on The NASDAQ Capital Market under the symbol &#8220;PEIX.&#8221;&#160;&#160;On&#160;May 10, 2012, the last reported sale price
of our common stock on The NASDAQ Capital Market was $0.94.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>_______________</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Investing in our securities
involves substantial risks.&#160;&#160;See &#8220;Risk Factors&#8221; beginning on page 4 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.</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>_______________</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>This prospectus may not
be used to consummate a sale of any securities unless accompanied by a prospectus supplement.</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The securities may be sold
directly by us to investors, through agents designated from time to time or to or through underwriters or dealers, on a continuous
or delayed basis.&#160;&#160;For additional information on the methods of sale, you should refer to the section entitled &#8220;Plan
of Distribution&#8221; in this prospectus.&#160;&#160;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.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>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.&#160;&#160;Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The date of this prospectus
is May 17, 2012.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="margin: 0pt">&nbsp;</P>

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<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>TABLE OF CONTENTS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>&#160;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 66%">&nbsp;</TD>
    <TD STYLE="text-align: right; width: 14%; text-indent: 0pt">Page</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">ABOUT THIS PROSPECTUS</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">1</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">2</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">PACIFIC ETHANOL, INC</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">3</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">RISK FACTORS</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">4</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">USE OF PROCEEDS</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">5</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">RATIO OF EARNINGS TO FIXED CHARGES</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">5</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">DESCRIPTION OF DEBT SECURITIES</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">6</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">DESCRIPTION OF CAPITAL STOCK</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">18</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">DESCRIPTION OF PREFERRED STOCK</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">25</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">DESCRIPTION OF WARRANTS</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">28</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">DESCRIPTION OF UNITS</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">29</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">GLOBAL SECURITIES</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">31</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">PLAN OF DISTRIBUTION</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">33</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">35</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">LEGAL MATTERS</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">35</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">EXPERTS</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">35</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">WHERE YOU CAN FIND MORE INFORMATION</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">36</TD></TR>
<TR STYLE="background-color: white; vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0pt">INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</TD>
    <TD STYLE="text-align: right; text-indent: 0pt">37</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">&#160;&#160;&#160;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>ABOUT THIS PROSPECTUS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">This prospectus is part
of a &#8220;shelf&#8221; 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 $100,000,000.&#160;&#160;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.&#160;&#160;THIS
PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 &#8220;Where You Can Find Additional
Information&#8221; below.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Neither the delivery
of this prospectus or any applicable prospectus supplement</B> <B>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.</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">When used in this prospectus,
the terms &#8220;Pacific Ethanol,&#8221; &#8220;we,&#8221; &#8220;our&#8221; and &#8220;us&#8221; refer to Pacific Ethanol, Inc.
and its consolidated subsidiaries, unless otherwise specified.&#160;&#160;Unless otherwise stated or indicated by context, the
phrase &#8220;this prospectus&#8221; refers to the prospectus and any applicable prospectus supplement.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

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<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">This prospectus and the
documents incorporated by reference into this prospectus contain &#8220;forward-looking statements&#8221; and are intended to be
covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section
21E of the Securities Exchange Act of 1934, as amended, or Exchange Act.&#160;&#160;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 &#8220;believe,&#8221; &#8220;expect,&#8221; &#8220;may,&#8221; &#8220;will,&#8221;
&#8220;could,&#8221; &#8220;seek,&#8221; &#8220;estimate,&#8221; &#8220;continue,&#8221; &#8220;anticipate,&#8221; &#8220;intend,&#8221;
&#8220;future,&#8221; &#8220;plan&#8221; 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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">These risks, uncertainties
and other factors include, but are not limited to, those set forth under &#8220;Risk Factors&#8221; included in our most recent
Annual Report on Form 10-K or any updates in 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.&#160;&#160;Given these risks and
uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements.&#160;&#160;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.&#160;&#160;Actual
results will vary, perhaps materially, and we undertake no obligation to update the projections at any future date.&#160;&#160;You
are strongly cautioned not to place undue reliance on such projections.&#160;&#160;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.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

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<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>PACIFIC ETHANOL, INC.</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Overview</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We are the leading marketer
and producer of low-carbon renewable fuels in the Western United States.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We market all the ethanol
produced by four ethanol production facilities located in California, Idaho and Oregon, or Pacific Ethanol Plants, all the ethanol
produced by three other ethanol producers in the Western United States and ethanol purchased from other third-party suppliers throughout
the United States. We also market ethanol co-products, including wet distillers grains and syrup, or WDG, for the Pacific Ethanol
Plants.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We have extensive customer
relationships throughout the Western United States. Our ethanol customers are integrated oil companies and gasoline marketers who
blend ethanol into gasoline. 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, primarily in California,&#160;&#160;Arizona, Nevada,
Utah, Oregon, Colorado, Idaho and Washington. Our WDG customers are dairies and feedlots located near the Pacific Ethanol Plants.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We have extensive supplier
relationships throughout the Western and Midwestern United States. In some cases, we have marketing agreements with suppliers to
market all of the output of their facilities.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We hold a 34% ownership
interest in New PE Holdco LLC, or New PE Holdco, the owner of each of the plant holding companies, or the Plant Owners, that collectively
own the Pacific Ethanol Plants. We operate and maintain the Pacific Ethanol Plants under the terms of an asset management agreement
with New PE Holdco and the Plant Owners, including supplying all goods and materials necessary to operate and maintain each Pacific
Ethanol Plant. In operating the Pacific Ethanol Plants, we direct the production process to obtain optimal production yields, lower
costs by leveraging our infrastructure, enter into risk management agreements such as insurance policies and manage commodity risk
practices. We are also in complete charge of, and have care and custody over, each Pacific Ethanol Plant that is not operational,
and provide recommendations as to when a Pacific Ethanol Plant should become operational. We perform all activities necessary to
support a cost effective return of any idled Pacific Ethanol Plant to operational status once New PE Holdco approves our recommendation
to re-start an idled Pacific Ethanol Plant.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We market ethanol and WDG
produced by the Pacific Ethanol Plants under the terms of separate marketing agreements with the Plant Owners whose facilities
are operational. The marketing agreements provide us with the absolute discretion to solicit, negotiate, administer (including
payment collection), enforce and execute ethanol and co-product sales agreements with any third party.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The Pacific Ethanol Plants
are comprised of the four facilities described immediately below, three of which are currently operational. When market conditions
permit, and with approval of New PE Holdco, we intend to resume operations at the Madera, California facility.</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0">&#160;&#160;&#160;&#160;&#160;&#160;</P>

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<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 30%; border-bottom: black 2px solid">
        <P STYLE="margin: 0">&#160;</P>
        <P STYLE="margin: 0">Facility Name</P></TD>
    <TD STYLE="width: 20%; border-bottom: black 2px solid">
        <P STYLE="margin: 0">&#160;</P>
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">Facility Location</P></TD>
    <TD STYLE="width: 20%; border-bottom: black 2px solid; text-align: center">
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">Estimated Annual Capacity</P>
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">(gallons)</P></TD>
    <TD STYLE="width: 20%; border-bottom: black 2px solid; text-align: center">
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">&#160;</P>
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">Current Operating Status</P></TD></TR>
<TR STYLE="background-color: #eeeeee">
    <TD STYLE="text-align: left; vertical-align: top; padding-left: 9pt; text-indent: -9pt">Magic Valley</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">Burley, ID</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">60,000,000</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">Operating</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="text-align: left; vertical-align: top; padding-left: 9pt; text-indent: -9pt">Columbia</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">Boardman, OR</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">40,000,000</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">Operating</TD></TR>
<TR STYLE="background-color: #eeeeee">
    <TD STYLE="text-align: left; vertical-align: top; padding-left: 9pt; text-indent: -9pt">Stockton</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">Stockton, CA</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">60,000,000</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">Operating</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="text-align: left; vertical-align: top; padding-left: 9pt; text-indent: -9pt">Madera</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">Madera, CA</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">40,000,000</TD>
    <TD STYLE="vertical-align: bottom; text-align: center; text-indent: 0pt">Idled</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We also provide operations,
maintenance and accounting services for a 250,000 gallon per year cellulosic integrated biorefinery owned by ZeaChem Inc. in Boardman,
Oregon, which is adjacent to the Pacific Ethanol Columbia plant.</P>

<P STYLE="text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>&nbsp;</B></P>

<P STYLE="text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Corporate Information</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We are a Delaware corporation
that was incorporated in February 2005.&#160;&#160;Our principal executive offices are located at 400 Capitol Mall, Suite 2060,
Sacramento, California 95814.&#160;&#160;Our telephone number is (916) 403-2123 and our Internet website is <FONT STYLE="color: #0000ff"><U>www.pacificethanol.net</U></FONT>.&#160;&#160;The
content of our Internet website does not constitute a part of this prospectus.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">In 2006, we began constructing
the first of the four Pacific Ethanol Plants and were continuously engaged in plant construction until the fourth facility was
completed in 2008. In late 2008 and early 2009, we idled production at three of the Pacific Ethanol Plants due to adverse market
conditions and lack of adequate working capital. On May 17, 2009, each of the Plant Owners filed voluntary petitions for relief
under chapter 11 of Title 11 of the United States Bankruptcy Code, or Bankruptcy Code, in the United States Bankruptcy Court for
the District of Delaware, or Bankruptcy Court, in an effort to restructure their indebtedness. On April 16, 2010, the Plant Owners
filed a joint plan of reorganization, or Plan, with the Bankruptcy Court, which was structured in cooperation with a number of
the Plant Owners&#8217; secured lenders. The Bankruptcy Court confirmed the Plan at a hearing on June 8, 2010. On June 29, 2010,
or Effective Date, the Plant Owners emerged from bankruptcy under the terms of the Plan. Under the Plan, on the Effective Date,
all of the ownership interests in the Plant Owners were transferred to New PE Holdco, which was wholly-owned as of that date by
some of the prepetition lenders to the Plant Owners and new lenders to the Plant Owners. As a result, the Pacific Ethanol Plants
became wholly-owned by New PE Holdco as of the Effective Date.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>RISK FACTORS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Investing in our securities
involves significant risks.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;If this occurs, the market or trading price of our securities could decline, and you could lose
all or part of your investment.&#160;&#160;In addition, please read &#8220;Cautionary Note Regarding Forward-Looking Statements&#8221;
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.</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0">&#160;&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>USE OF PROCEEDS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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, acquisitions, acquisitions of additional
ownership interests in New PE Holdco, and the repayment of outstanding indebtedness.&#160;&#160;Pending these uses, we expect
to invest the net proceeds in demand deposit accounts or short-term, investment-grade securities.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>RATIO OF EARNINGS TO FIXED
CHARGES</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The following summary is
qualified by the more detailed information appearing in the computation table found in Exhibit 12.1 to the registration statement
of which this prospectus is part and the historical financial statements, including the notes to those financial statements, incorporated
by reference in this prospectus.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Our earnings are inadequate
to cover fixed charges.&#160;&#160;The following table sets forth the dollar amount of the coverage deficiency for all periods
(in thousands):</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="18" STYLE="border-bottom: black 2px solid">
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">Year Ended December 31,</P></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 2px; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2px solid; text-align: center">
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">2011</P></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2px solid; text-align: center">
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">2010</P></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2px solid; text-align: center">
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">2009</P></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2px solid; text-align: center">
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">2008</P></TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2px solid; text-align: center">
        <P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">2007</P></TD>
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="background-color: #eeeeee; vertical-align: bottom">
    <TD STYLE="text-align: left; width: 30%; text-indent: 0pt">Ratio of Earnings to Fixed Charges</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 11%; text-align: right">1.12x</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 11%; text-align: right">7.46x</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 11%; text-align: right">&#8212;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 11%; text-align: right">&#8212;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 11%; text-align: right">0.3x</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="background-color: white; vertical-align: bottom">
    <TD STYLE="text-align: left; padding-left: 9pt; text-indent: -9pt">Excess (Deficiency) of Earnings Available to Cover Fixed Charges</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD>
    <TD STYLE="text-align: right">1,985</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD>
    <TD STYLE="text-align: right">72,121</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD>
    <TD STYLE="text-align: right">(310,948</TD>
    <TD NOWRAP STYLE="text-align: left">)</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD>
    <TD STYLE="text-align: right">(160,371</TD>
    <TD NOWRAP STYLE="text-align: left">)</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD>
    <TD STYLE="text-align: right">(27,101</TD>
    <TD NOWRAP STYLE="text-align: left">)</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="margin: 0pt">&nbsp;</P>

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<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">&#160;&#160;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>DESCRIPTION OF DEBT SECURITIES</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The complete terms of the
debt securities will be contained in the indenture and supplemental indenture applicable to the debt securities. 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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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, supplemental
indenture and form of debt security.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>General</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 in more detail in a prospectus supplement.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We will issue the senior
debt securities under the senior indenture that we will enter into with the trustee named in the senior indenture. 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 &#8220;indentures&#8221; to refer to both the senior indenture and the subordinated indenture.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The following summaries
of the material provisions of the senior debt securities, the subordinated debt securities and the indentures 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, as well as 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 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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The indentures will be qualified
under the Trust Indenture Act of 1939, as amended. We use the term &#8220;indenture trustee&#8221; to refer to either the senior
trustee or the subordinated trustee, as applicable.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the title of the debt securities;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">whether the debt securities are senior debt securities or subordinated debt securities and, if subordinated debt securities, the related subordination terms;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">principal amount being offered, and, if a series, the total amount authorized and the total amount outstanding;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">any limit on the aggregate principal amount of the debt securities or the series of which they are a part;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the date or dates on which we must pay the principal;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">whether the debt securities will be issued with any original issue discount;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
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    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
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    <TD STYLE="text-align: justify; text-indent: 0pt">whether and under what circumstances, if any, we will pay a premium or additional amounts on any debt securities;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
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    <TD STYLE="text-align: justify; text-indent: 0pt">the place or places where we must pay the principal and any premium or interest on the debt securities;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
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    <TD STYLE="text-align: justify; text-indent: 0pt">the terms and conditions on which we may redeem or retire any debt security, if at all;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">any obligation to redeem or repurchase any debt securities, and the terms and conditions on which we must do so;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the denominations in which we may issue the debt securities if other than denominations of $1,000 and any integral multiple thereof;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

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    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the manner in which we will determine the amount of principal of or any premium or interest or additional amounts on the debt securities;</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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    <TD STYLE="text-align: justify; text-indent: 0pt">the principal amount of the debt securities that we will pay upon declaration of acceleration of their maturity if other than 100%;</TD></TR>
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<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
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    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">whether the debt securities will be secured or unsecured, and the terms of any secured debt;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="text-align: justify; text-indent: 0pt">whether the debt securities are defeasible;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

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    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">restrictions on transfer, sale or other assignment, if any;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">our right, if any, to defer payment of interest and the maximum length of any such deferral period;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">provisions for a sinking fund, purchase or other analogous fund, if any;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">any addition to or change in the covenants in the indentures, including whether the indenture will restrict our ability or the ability of our subsidiaries to:</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: left; text-indent: 0pt">incur additional indebtedness;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">issue additional securities;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">create liens;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">pay dividends or make distributions in respect of our capital shares or the capital shares of our subsidiaries;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">redeem capital shares;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">place restrictions on our subsidiaries&#8217; ability to pay dividends, make distributions or transfer assets;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">make investments or other restricted payments;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">sell or otherwise dispose of assets;</TD></TR>
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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;&#160;</P>

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    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
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    <TD STYLE="text-align: justify; text-indent: 0pt">enter into sale-leaseback transactions;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

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    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">engage in transactions with stockholders or affiliates;</TD></TR>
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<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">issue or sell shares of our subsidiaries; or</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

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<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">effect a consolidation or merger;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">whether the indenture will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">a discussion of any material United States federal income tax considerations applicable to the debt securities;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">information describing any book-entry features;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">procedures for any auction or remarketing, if any; and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 &#8220;original issue
discount security&#8221; 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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Conversion and Exchange
Rights</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 of ours. 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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Subordination of Subordinated
Debt Securities</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Form, Exchange and Transfer</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 &#8220;Global Securities&#8221; and will trade in book-entry form only.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">If we elect to redeem the
debt securities of any series, we will not be required to:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Consolidation, Merger and
Sale of Assets</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top; text-align: justify">
    <TD STYLE="text-align: justify; width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">several other conditions, including any additional conditions with respect to any particular debt securities specified in the applicable prospectus supplement, are met.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Events of Default</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;&#160;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">failure to perform or comply with the provisions described under &#8220;&#8212;Consolidation, Merger and Sale of Assets&#8221;;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">certain events of bankruptcy, insolvency or reorganization affecting us or any significant subsidiary.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 &#8220;&#8212;Modification and Waiver&#8221; below.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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.</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Modification and Waiver</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;However, no such modification or amendment may, without the consent of the holder of each outstanding
debt security affected thereby:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">change the stated maturity of the principal of, or time for payment of any installment of principal of or interest on, any debt security;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">reduce the principal amount of, or any premium or the rate of interest on, any debt security;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">reduce the amount of principal of an original issue discount security or any other debt security payable upon acceleration of the maturity thereof;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">change the place or the coin or currency of payment of principal of, or any premium or interest on, any debt security;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">impair the right to institute suit for the enforcement of any payment due on any debt security;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">modify the subordination provisions in the case of subordinated debt securities;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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.</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">certain debt securities, including those owned by us or any of our other affiliates, will not be deemed to be outstanding.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Optional Redemption</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Satisfaction and Discharge</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: left; text-indent: 0pt">either:</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0 0 0 72pt; font: 10pt Times New Roman, Times, Serif">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;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">we have delivered an officer&#8217;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.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Legal Defeasance and Covenant
Defeasance</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 &#8220;legal defeasance,&#8221; 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 &#8220;covenant defeasance.&#8221;</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><I>Legal Defeasance</I>.&#160;&#160;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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">we must deliver to the trustee an officer&#8217;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;</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0 0 0 27pt">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0 0 0 27pt">&#160;&#160;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">we must deliver to the trustee an officer&#8217;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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><I>Covenant Defeasance</I>.&#160;&#160;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 &#8220;Events of Default&#8221; 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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Notices</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We will mail notices to
holders of debt securities at the addresses that appear in the security register.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Title</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Information Concerning
the Indenture Trustee</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Payment and Paying Agents</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Governing Law</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The indentures and the
debt securities will be governed by and construed in accordance with the laws of the state of New York.&nbsp;</P>

<P STYLE="margin: 0pt">&nbsp;&nbsp;</P>

<P STYLE="margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>DESCRIPTION OF CAPITAL STOCK</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Authorized and Outstanding
Capital Stock</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Our authorized capital stock
consists of 300,000,000 shares of 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&#160;A Preferred Stock and 1,580,790 shares are designated
as Series&#160;B Preferred Stock.&#160;&#160;As of May 10, 2012, there were 86,801,993 shares of common stock, no shares of Series
A Preferred Stock and 926,942 shares of Series B Preferred Stock issued and outstanding.&#160;&#160;On June 8, 2011, we effected
a one-for-seven reverse split of our common stock.&#160;&#160;All share information contained in this prospectus reflects the effect
of this reverse stock split.&#160;&#160;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&#160;A Preferred Stock, or Series A Certificate of Designations, our Certificate of Designations, Powers,
Preferences and Rights of the Series&#160;B Preferred Stock, or Series&#160;B Certificate of Designations, and our bylaws.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Common Stock</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">All outstanding shares of
common stock are fully paid and nonassessable.&#160;&#160;The following summarizes the rights of holders of our common stock:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">each holder of common stock is entitled to one vote per share on all matters to be voted upon generally by the stockholders;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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 Board;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">there are no redemption or sinking fund provisions applicable to our common stock; and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">there are no preemptive or conversion rights applicable to our common stock.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Preferred Stock</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;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.&#160;&#160;The following is a summary of the terms of the Series A Preferred
Stock and the Series B Preferred Stock.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Series B Preferred Stock</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">As of May 10, 2012, 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.&#160;&#160;The converted shares of Series B Preferred Stock have been returned
to undesignated preferred stock.&#160;&#160;A balance of 653,848 shares of Series B Preferred Stock remain authorized for issuance.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Rank and Liquidation
Preference</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Dividend Rights</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;The dividends may,
at our option, be paid in shares of Series B Preferred Stock valued at the Series B Issue Price.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Optional Conversion
Rights</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Each share of Series B Preferred
Stock is convertible at the option of the holder into shares of our common stock at any time.&#160;&#160;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.&#160;&#160;The
&#8220;Conversion Price&#8221; was initially $45.50 per share of Series B Preferred Stock, subject to adjustment; therefore, each
share of Series B Preferred Stock was initially convertible into 0.43 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 $45.50 per share of Series B Preferred Stock.&#160;&#160;Accrued
and unpaid dividends are to be paid in cash upon any conversion.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Mandatory Conversion
Rights</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 &#8220;Transaction&#8221;
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.&#160;&#160;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.&#160;&#160;Accrued and unpaid dividends are to be paid in cash upon any conversion.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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).</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Conversion Price Adjustments</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Voting Rights and
Protective Provisions</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;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 $45.50 (subject to appropriate adjustment
for stock splits, stock dividends, combinations and other similar recapitalizations affecting the shares).</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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);</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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);</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">engage in a Transaction that would result in an internal rate of return to holders of Series B Preferred Stock of less than 25%;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">authorize or effect the voluntary liquidation, dissolution, recapitalization, reorganization or winding up of our business; or</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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.</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Reservation of Shares</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Series A Preferred Stock</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">As of May 10, 2012, 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.&#160;&#160;A balance of 1,684,375 shares
of Series A Preferred Stock remain authorized for issuance.&#160;&#160;The rights and preferences of the Series A Preferred Stock
are substantially the same as the Series B Preferred Stock, except as follows:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the Series A Issue Price, on which the Series A Preferred Stock liquidation preference is based, is $16.00 per share;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">dividends accrue and are payable at a rate per annum of 5.0% of the Series A Issue Price per share;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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 $56.00 per share;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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 $62.93 (subject to appropriate adjustment for stock splits, stock dividends, combinations and other similar recapitalizations affecting the shares); and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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:</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">change the number of members of our Board to be more than nine members or less than seven members;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">effect any material change in our industry focus or that of our subsidiaries, considered on a consolidated basis;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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&#8217; 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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 72pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">o&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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&#8217; current or former directors, officers or members, excluding any director nominated by the initial holder of the Series B Preferred Stock.</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Preemptive Rights</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;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&#8217;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.&#160;&#160;Holders of our Series A Preferred Stock have a 30 day period during which to accept the offer.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The preemptive rights of
the holders of the Series A Preferred Stock shall 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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Anti-Takeover Effects
of Delaware Law and Our Certificate of Incorporation and Bylaws</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 us.&#160;&#160;These provisions, which are summarized below, are expected
to discourage coercive takeover practices and inadequate takeover bids.&#160;&#160;These provisions are also designed to encourage
persons seeking to acquire control of us to first negotiate with our board of directors.&#160;&#160;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 us because negotiation of these proposals could result in an improvement of their terms.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Undesignated Preferred
Stock</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;These and other provisions may have the effect of deferring
hostile takeovers or delaying changes in control or management of Pacific Ethanol.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 18pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B><I>Delaware Anti-Takeover
Statute</I></B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We are subject to the provisions
of Section 203 of the Delaware General Corporation Law, or DGCL, regulating corporate takeovers.&#160;&#160;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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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&#8532;% of the outstanding voting stock that is not owned by the interested stockholder.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Generally, a business combination
includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder.&#160;&#160;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&#8217;s outstanding voting securities.&#160;&#160;We expect
the existence of its provision to have an anti-takeover effect with respect to transactions our Board does not approve in advance.&#160;&#160;We
also anticipate that Section 203 of the DGCL may also discourage attempts that might result in a premium over the market price
for the shares of common stock held by stockholders.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;These provisions may also have the effect of preventing changes in our
management.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>DESCRIPTION OF PREFERRED
STOCK</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Terms</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the maximum number of shares in the series or class and the distinctive designation;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">number of shares offered and initial offering price;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the terms on which dividends, if any, will be paid;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the terms of any preemptive rights;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the terms on which the shares may be redeemed, if at all;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the liquidation preference, if any;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the terms of any retirement or sinking fund for the repurchase or redemption of the shares of the series;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the voting rights, if any, on the shares of the series;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">any or all other preferences and relative, participating, operational or other special rights or qualifications, limitations or restrictions of the shares; and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">any material United States federal income tax consequences.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: left; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The issuance of preferred stock
may delay, deter or prevent a change in control.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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    <!-- Field: /Page -->

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Ranking</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">senior to all classes or series of our common stock, and to all other equity securities ranking junior to the offered preferred stock;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">on a parity with all of our equity securities ranking on a parity with the offered preferred stock; and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">junior to all of our equity securities ranking senior to the offered preferred stock.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">As used herein, the term
&#8220;equity securities&#8221; does not include convertible debt securities.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Voting Rights</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Dividends</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Redemption</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Liquidation Preference</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Conversion Rights</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Transfer Agent and Registrar</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We will identify in a prospectus
supplement the transfer agent and registrar for any series of preferred stock offered by this prospectus.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>DESCRIPTION OF WARRANTS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>General</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The following are some of
the terms relating to a series of warrants that could be described in a prospectus supplement:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">title of the warrants;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">aggregate number of warrants;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">price or prices at which the warrants will be issued;</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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    <!-- Field: /Page -->

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">designation, number, aggregate principal amount, denominations and terms of the securities that may be purchased on exercise of the warrants;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">date, if any, on and after which the warrants and the debt securities offered with the warrants, if any, will be separately transferable;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">purchase price for each security purchasable on exercise of the warrants;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">the terms for changes to or adjustments in the exercise price, if any;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">dates on which the right to purchase certain securities upon exercise of the warrants will begin and end;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">minimum or maximum number of securities that may be purchased at any one time upon exercise of the warrants;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">anti-dilution provisions or other adjustments to the exercise price of the warrants;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">terms of any right that we may have to redeem the warrants;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">effect of any merger, consolidation, sale or other transfer of our business on the warrants and the applicable warrant agreement;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">name and address of the warrant agent, if any;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">information with respect to book-entry procedures;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">any material United States federal income tax considerations; and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">other material terms, including terms relating to transferability, exchange, exercise or amendments of the warrants.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Until any warrants to purchase
our securities are exercised, holders of the warrants will not have any rights of holders of the underlying securities.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>Outstanding Warrants</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">As of May 10, 2012, we had
outstanding warrants to purchase 6,139,674 shares of our common stock at exercise prices ranging from $0.45 to $49.70 per share.&#160;&#160;These
outstanding warrants consist of warrants to purchase an aggregate of 252,101 shares of common stock at an exercise price of $0.45
per share expiring in 2017, warrants to purchase an aggregate of 4,956,250 shares of common stock at an exercise price of $1.50
per share expiring in 2016, warrants to purchase an aggregate of 502,750 shares of common stock at an exercise price of $49.00
per share expiring in 2018, and warrants to purchase an aggregate of 428,573 shares of common stock at an exercise price of $49.70
per share expiring in 2013.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>DESCRIPTION OF UNITS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The following are some of
the unit terms that could be described in a prospectus supplement:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">title of the units;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">aggregate number of units;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">price or prices at which the units will be issued;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">effect of any merger, consolidation, sale or other transfer of our business on the units and the applicable unit agreement;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">name and address of the unit agent;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">information with respect to book-entry procedures;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">any material United States federal income tax considerations; and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">other material terms, including terms relating to transferability, exchange, exercise or amendments of the units.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The provisions described
in this section, as well as those described under &#8220;Description of Capital Stock,&#8221; &#8220;Description of Preferred Stock,&#8221;
&#8220;Description of Debt Securities,&#8221; and &#8220;Description of Warrants,&#8221; will apply to each unit and to any common
stock, preferred stock, debt security or warrant included in each unit, respectively.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>GLOBAL SECURITIES</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 &#8220;global securities,&#8221; 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&#8217;s
nominee will be Cede &amp; Co. Accordingly, we expect Cede &amp; 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&#8217;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 &amp; Co., as the registered holder
of these securities.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">DTC is a limited-purpose
trust company organized under the New York Banking Law, a &#8220;banking organization&#8221; within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a &#8220;clearing corporation&#8221; within the meaning of the New York Uniform
Commercial Code, and a &#8220;clearing agency&#8221; 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&#8217; 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 &amp; Clearing Company, or DTCC. DTCC, in turn, is owned by a number of DTC&#8217;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 &amp; 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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">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.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Any global security that
is exchangeable under the preceding sentence will be exchangeable for securities registered in such names as DTC directs.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Redemption notices will
be sent to Cede &amp; 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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The information in this
section concerning DTC and DTC&#8217;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&#8217;s or any participant&#8217;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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&#8217;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>PLAN OF DISTRIBUTION</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We may sell or distribute
the securities included in this prospectus through underwriters, through agents, dealers, in private transactions, at market prices
prevailing at the time of sale, at prices related to the prevailing market prices, or at negotiated prices.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">In addition, we may sell
some or all of the securities included in this prospectus through:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">a block trade in which a broker-dealer may resell a portion of the block, as principal, in order to facilitate the transaction;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account; or</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">ordinary brokerage transactions and transactions in which a broker solicits purchasers.</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">In addition, we may enter
into option or other types of transactions that require us to deliver common shares to a broker-dealer, who will then resell or
transfer the common shares under this prospectus. We may enter into hedging transactions with respect to our securities. For example,
we may:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">enter into transactions involving short sales of the common shares by broker-dealers;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">sell common shares short themselves and deliver the shares to close out short positions;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">enter into option or other types of transactions that require us to deliver common shares to a broker-dealer, who will then resell or transfer the common shares under this prospectus; or</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 36pt; text-indent: 0pt">&bull;&#160;</TD>
    <TD STYLE="text-align: justify; text-indent: 0pt">loan or pledge the common shares to a broker-dealer, who may sell the loaned shares or, in the event of default, sell the pledged shares.</TD></TR>
</TABLE>
<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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 or others to settle those sales or to close out any related open borrowings
of stock, and may use securities received from us 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 and, if not identified in this prospectus, will be identified
in the applicable prospectus supplement (or a post-effective amendment). 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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">There is currently no market
for any of the securities, other than the shares of common stock listed on The NASDAQ Capital Market. If the securities are traded
after their initial issuance, they may trade at a discount from their initial offering price, depending on prevailing interest
rates, the market for similar securities and other factors. While it is possible that an underwriter could inform us that it intends
to make a market in the securities, such underwriter would not be obligated to do so, and any such market making could he discontinued
at any time without notice. Therefore, we cannot assure you as to whether an active trading market will develop for these other
securities. We have no current plans for listing the debt securities on any securities exchange; any such listing with respect
to any particular debt securities will be described in the applicable prospectus supplement.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Any broker-dealers or other
persons acting on our behalf that participate with us in the distribution of the shares may be deemed to be underwriters and any
commissions received or profit realized by them on the resale of the shares may be deemed to be underwriting discounts and commissions
under the Securities Act. As of the date of this prospectus, we are not a party to any agreement, arrangement or understanding
between any broker or dealer and us with respect to the offer or sale of the securities pursuant to this prospectus.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We may have agreements with
agents, underwriters, dealers and remarketing firms to indemnify them or their controlling persons against certain civil liabilities,
including liabilities under the Securities Act. Agents, underwriters, dealers and remarketing firms, and their affiliates, may
engage in transactions with, or perform services for, us in the ordinary course of business. This includes commercial banking and
investment banking transactions.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">At the time that any particular
offering of securities is made, to the extent required by the Securities Act, a prospectus supplement will be distributed setting
forth the terms of the offering, including the aggregate number of securities being offered, the purchase price of the securities,
the initial offering price of the securities, the names of and the respective amounts underwritten by any underwriters, dealers
or agents, nature of the underwriters&#8217; obligation to purchase the securities, any discounts, commissions and other items
constituting compensation from us and any discounts, commissions or concessions allowed or reallowed or paid to dealers. The nature
and amount of discounts and commissions to underwriters for each security and in total will be provided in tabular format.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Pursuant to a requirement
by the Financial Industry Regulatory Authority, or FINRA, the maximum commission or discount to be received by any FINRA member
or independent broker/dealer may not exceed 8% of the gross proceeds received by us for the sale of any securities offered pursuant
to this prospectus and any applicable prospectus supplement.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>DISCLOSURE OF COMMISSION
POSITION ON INDEMNIFICATION</B></P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>FOR SECURITIES ACT LIABILITIES</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>LEGAL MATTERS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Unless otherwise indicated
in the applicable prospectus supplement, the validity of the securities being offered by this prospectus will be passed upon by
Rutan &amp; Tucker, LLP.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="margin: 0pt"></P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>EXPERTS</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The financial statements
incorporated by reference in this prospectus and registration statement have been audited by Hein &amp; Associates LLP, an independent
registered public accounting firm, as stated in their report (which report expresses an unqualified opinion) and are incorporated
by reference in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="margin: 0pt"></P>

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<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>WHERE YOU CAN FIND MORE
INFORMATION</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We have filed with the Securities
and Exchange Commission a registration statement on Form&#160;&#160;&#160;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.&#160;&#160;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.&#160;&#160;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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;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.&#160;&#160;The public may read and copy any materials we file with the
Securities and Exchange Commission at the Securities and Exchange Commission&#8217;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.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.&#160;&#160;The Securities
and Exchange Commission&#8217;s Internet website address is <FONT STYLE="color: #0000ff"><U>http://www.sec.gov</U></FONT>. Our
Internet website address is <FONT STYLE="color: #0000ff"><U>http://www.pacificethanol.net/</U></FONT>.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">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.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">All trademarks or trade
names referred to in this prospectus are the property of their respective owners.</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0"></P>

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<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;</P>


<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><B>INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE</B></P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The Securities and Exchange
Commission allows us to &#8220;incorporate by reference&#8221; the information we file with the Securities and Exchange Commission.&#160;&#160;This
means that we can disclose important information to you by referring you to another filed document.&#160;&#160;Any information
referred to in this way is considered part of this prospectus from the date we file that document.&#160;&#160;Any reports filed
by us with the Securities and&#160;&#160;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.&#160;&#160;Accordingly, we incorporate by reference
the following documents or information filed with the Securities and Exchange Commission:</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2012 filed with the Securities and Exchange Commission on May&#160;11, 2012;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">Current Report on Form 8-K filed with the Securities and Exchange Commission on May&#160;10, 2012;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">Current Report on Form 8-K filed with the Securities and Exchange Commission on May 8, 2012;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">Annual Report on Form 10-K/A for the fiscal year ended December 31, 2011, which we filed with the Securities and Exchange Commission on April&#160;13, 2012;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">Annual Report on Form 10-K for the fiscal year ended December&#160;31, 2011, which we filed with the Securities and Exchange Commission on March&#160;8, 2012;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">Current Report on Form 8-K filed with the Securities and Exchange Commission on February 27, 2012;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2012;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2012;</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">The description of our capital stock contained in our Current Report on Form&#160;8-K filed with the Securities and Exchange Commission on June&#160;8, 2007; and</TD></TR>
</TABLE>
<P STYLE="margin: 0pt">&nbsp;</P>

<TABLE ALIGN="CENTER" BORDER="0" CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36pt">&nbsp;</TD>
    <TD STYLE="width: 27pt; text-indent: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: left">All documents filed by&#160;&#160;us in accordance with Sections&#160;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.</TD></TR>
</TABLE>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: justify; text-indent: 36pt; margin: 0; font: 10pt Times New Roman, Times, Serif">We will provide a copy of
the documents we incorporate by reference, at no cost, to any person who received this prospectus.&#160;&#160;To request a copy
of any or all of these documents, you should write or telephone us at:&#160;&#160;Investor Relations, Pacific Ethanol, Inc., 400
Capitol Mall, Suite 2060, Sacramento, California 95814, (916) 403-2123.&#160;&#160;In addition, each document incorporated by reference
is readily accessible on our website at <FONT STYLE="color: #0000ff"><U>www.pacificethanol.net</U></FONT>.</P>

<P STYLE="text-align: justify; text-indent: 0pt; margin: 0">&#160;&#160;&#160;&#160;&#160;</P>

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<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="margin: 0pt">&nbsp;</P>

<P STYLE="text-align: center; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="font: bold 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">174,738 Shares of Common Stock</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 16pt Times New Roman, Times, Serif; margin: 0; text-align: center">PACIFIC ETHANOL, INC.</P>

<P STYLE="font: bold 16pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">PROSPECTUS SUPPLEMENT</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

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<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">July 26, 2013</P>

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