PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS.) The company reported a significant profit turnaround in Q2 2020 despite lower sales, but faces a working capital deficit [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet reflects a decrease in total assets and a working capital deficit as of June 30, 2020 Financial Position | Financial Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $131,790 | $232,064 | | **Total Assets** | $497,129 | $612,495 | | **Total Current Liabilities** | $146,954 | $160,398 | | **Total Liabilities** | $286,388 | $385,450 | | **Total Stockholders' Equity** | $210,741 | $227,045 | - The company's total assets decreased from **$612.5 million** at the end of 2019 to **$497.1 million** as of June 30, 2020, primarily due to the sale of assets previously classified as held-for-sale[4](index=4&type=chunk) - As of June 30, 2020, the company had a **working capital deficit of $15.2 million**, with current liabilities of $147.0 million exceeding current assets of $131.8 million[127](index=127&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The company achieved a substantial increase in gross profit and net income for Q2 2020 compared to the prior year Three-Month Performance | Metric (in thousands, except per share) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net Sales | $212,074 | $346,301 | | Gross Profit | $31,182 | $3,971 | | Income (Loss) from Operations | $22,553 | $(2,737) | | Net Income (Loss) Attributed to Pacific Ethanol | $14,964 | $(7,646) | | Net Income (Loss) per Share, basic and diluted | $0.27 | $(0.17) | Six-Month Performance | Metric (in thousands, except per share) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net Sales | $523,478 | $702,104 | | Gross Profit | $18,292 | $1,682 | | Income (Loss) from Operations | $(549) | $(13,261) | | Net Income (Loss) Attributed to Pacific Ethanol | $(10,136) | $(20,536) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned positive, driven by net income and asset sale proceeds from investing activities Six-Month Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $45,655 | $(25,754) | | Net cash provided by (used in) investing activities | $17,386 | $(1,536) | | Net cash (used in) provided by financing activities | $(52,255) | $17,176 | | **Net change in cash and cash equivalents** | **$10,786** | **$(10,114)** | - Investing activities were primarily driven by **$19.9 million in proceeds** from the sale of Pacific Aurora, LLC ("PAL Sale")[10](index=10&type=chunk) - Financing activities included net payments on Kinergy's line of credit of **$36.9 million** and principal payments on borrowings of **$25.5 million**, partially offset by **$9.9 million** in proceeds from new borrowings (CARES Act loans)[10](index=10&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the Pacific Aurora sale, debt covenant non-compliance, and CARES Act loans Segment Performance | Segment Performance (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--- | :--- | :--- | | **Production Income (Loss) before taxes** | $17,811 | $(7,117) | | **Marketing & Distribution Income (Loss) before taxes** | $1,664 | $(129) | - On April 15, 2020, the company sold its ownership interest in Pacific Aurora for total consideration of **$52.8 million**, receiving **$19.9 million in cash** and **$16.5 million in long-term promissory notes**[28](index=28&type=chunk) - The company is **not in compliance** with its obligation to obtain lender approval for a comprehensive restructuring plan, which could result in debt acceleration; as a result, related debt has been classified as current[22](index=22&type=chunk) - In May 2020, the company and its subsidiary PE Pekin received a total of **$9.9 million in loan proceeds** under the Paycheck Protection Program of the CARES Act[41](index=41&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) Management discusses the strategic shift to high-quality alcohol, which drove Q2 2020 profitability amid the pandemic [Current Initiatives and Outlook](index=24&type=section&id=Current%20Initiatives%20and%20Outlook) The company is expanding high-quality alcohol production while focusing on asset sales and debt reduction - The company experienced an **excellent margin environment** for its high-quality alcohol due to robust demand for products used in sanitizers and disinfectants amid the COVID-19 pandemic[85](index=85&type=chunk) - To meet increased demand, the company is expanding its high-quality alcohol production capacity at its Pekin campus by a total of **55 million gallons per year**, with a target of **140 million gallons per year** total capacity by 2021[85](index=85&type=chunk) - Due to a poor margin environment for fuel-grade ethanol, the company does not intend to restart its **idled fuel ethanol plants** in the Western states until positive forward operating margins can be secured[90](index=90&type=chunk)[91](index=91&type=chunk) - Strategic initiatives remain focused on **selling additional production assets**, reducing debt, strengthening liquidity, and exploring strategic partnerships and capital raising[92](index=92&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q2 2020 saw a significant gross profit increase despite lower sales, driven by higher-margin alcohol products Q2 Operational Performance | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net Sales | $212.1M | $346.3M | | Cost of Goods Sold | $180.9M | $342.3M | | **Gross Profit** | **$31.2M** | **$4.0M** | | Gross Margin | 14.7% | 1.1% | - The decline in net sales for Q2 2020 was primarily due to a **52% decrease in production gallons sold**, driven by reduced transportation fuel demand from COVID-19 stay-at-home orders[99](index=99&type=chunk)[100](index=100&type=chunk) - The significant improvement in gross profit and margin was primarily due to **significantly higher margins** from sales of high-quality alcohol, which commanded a premium price over fuel ethanol[112](index=112&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **28.6% to $8.6 million** in Q2 2020, mainly due to higher professional fees associated with the sale of Pacific Aurora and other strategic initiatives[118](index=118&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces a working capital deficit and debt covenant non-compliance but believes it has sufficient liquidity Key Liquidity Metrics | Metric (in thousands) | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Working capital (deficit) | $(15,164) | $71,666 | | Long-term debt, net of current portion | $95,888 | $180,795 | - As of June 30, 2020, the company had **$29.8 million in cash** and **$10.0 million available** under its Kinergy operating line of credit[123](index=123&type=chunk) - The company is **not in compliance** with its obligation to obtain lender approval of a comprehensive restructuring plan, which could result in debt acceleration[128](index=128&type=chunk) - Despite the covenant issue and a working capital deficit of **$15.2 million**, management believes it has alleviated substantial doubt about its ability to continue as a going concern and has sufficient liquidity for the next twelve months[128](index=128&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) The company has indicated that this section is not applicable for this reporting period - This item is marked as **'Not applicable'** in the report[177](index=177&type=chunk) [Controls and Procedures](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) Management concluded that disclosure controls and procedures were effective as of the end of the quarter - Management, including the Co-CEOs and CFO, concluded that as of June 30, 2020, the company's disclosure controls and procedures were **effective at a reasonable assurance level**[178](index=178&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[180](index=180&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) Ongoing legal matters are not expected to have a material adverse effect on the company's financial condition - The company states that while it is subject to legal proceedings in the ordinary course of business, management **does not expect them to have a material adverse impact** on its financial condition[184](index=184&type=chunk) [Risk Factors](index=41&type=section&id=ITEM%201A.%20RISK%20FACTORS.) Key risks include the COVID-19 pandemic's impact, significant debt, historical losses, and commodity price volatility - The **COVID-19 pandemic** may continue to materially and adversely affect business operations and liquidity due to reduced demand for transportation fuels like ethanol[186](index=186&type=chunk)[187](index=187&type=chunk) - The company is **not in compliance** with its obligation to obtain lender approval for a restructuring plan, which could result in debt acceleration, and it lacks sufficient liquidity to immediately repay its debt if accelerated[190](index=190&type=chunk) - The company's profitability is highly dependent on the **volatile and uncertain prices** of corn, natural gas, high-quality alcohol, and ethanol, which are subject to market forces beyond its control[195](index=195&type=chunk)[196](index=196&type=chunk) - The independent auditor's report for fiscal year 2019 included an explanatory note expressing **substantial doubt about the company's ability to continue as a going concern**[225](index=225&type=chunk)[226](index=226&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS.) The report details shares withheld for tax obligations and the accrual of unpaid preferred stock dividends - In April 2020, the company effectively repurchased **357,239 shares** of its common stock by withholding them from employees to cover minimum tax obligations on vested restricted stock for an aggregate value of **$89,489**[262](index=262&type=chunk) - For the six months ended June 30, 2020, the company accrued dividends of **$0.6 million** on its Series B Preferred Stock but did not pay them in cash to preserve liquidity[264](index=264&type=chunk) [Other Items (Defaults, Mine Safety, Other Info, Exhibits)](index=52&type=section&id=Other%20Items) The company reports no defaults, mine safety issues, or other information, and lists filed exhibits - The company reports **'Not applicable'** for Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information)[267](index=267&type=chunk)[268](index=268&type=chunk)

Pacific Ethanol, Inc. (PEIX) Q2 2020 Earnings Conference Call August 12, 2020 11:00 AM ET Company Participants Moriah Shilton - Senior Vice President, LHA Investor Relations Michael Kandris - Co-Chief Executive Officer Bryon McGregor - Chief Financial Officer Conference Call Participants Eric Stine - Craig-Hallum Capital Group LLC Amit Dayal - H.C. Wainwright & Co, LLC Operator Ladies and gentlemen, thank you for standing by and welcome to the Pacific Ethanol, Inc., Second Quarter 2020 Financial Results Con ...

Financial Performance - Pacific Ethanol's Q2 2020 net sales reached $212 million[6], while for the first half of 2020, net sales amounted to $523 million[6] - Adjusted EBITDA for Q2 2020 was $28842 thousand[7, 14], and for the first half of 2020, it was $16492 thousand[7, 14] - The company reduced its total debt outstanding by $34.4 million in Q2 2020[6] - Pacific Ethanol anticipates Adjusted EBITDA to range between $50 million and $70 million for the second half of 2020[6] - The company aims to reduce total term debt outstanding by at least $70 million by year-end[6] Production and Diversification - Pacific Ethanol produces over 50 million pounds of yeast annually[5] - The company produces 38 thousand tons of corn gluten feed and 182 thousand tons of corn gluten meal annually[5] - Pacific Ethanol produces 70 thousand tons of corn germ annually[5] - The company aims to be a leading producer of high-quality alcohol products, high-value protein and palettant, and low-carbon renewable fuels[9]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number: 000-21467 PACIFIC ETHANOL, INC. (Exact name of registrant as specified in its charter) | --- | --- | |----------------- ...

Pacific Ethanol, Inc. (PEIX) Q1 2020 Earnings Conference Call May 13, 2020 11:00 AM ET Company Participants Moriah Shilton - Senior Vice President, LHA Investor Relations Neil Koehler - President & Chief Executive Officer Bryon McGregor - Chief Financial Officer Conference Call Participants Eric Stine - Craig-Hallum Sameer Joshi - H.C. Wainwright Operator Ladies and gentlemen, thank you for standing by and welcome to the Pacific Ethanol First Quarter 2020 Financial Results Conference Call. At this time, all ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000-21467 PACIFIC ETHANOL, INC. (Exact name of registrant as specified in its charter) Delaware 41-2170618 (State or other jurisdiction ...

Pacific Ethanol, Inc. (PEIX) Q4 2019 Results Conference Call March 27, 2020 11:00 AM ET Company Participants Moriah Shilton - LHA IR Neil Koehler - President and CEO Bryon McGregor - CFO Conference Call Participants Eric Stine - Craig-Hallum Amit Dayal - H.C. Wainwright Operator Ladies and gentlemen, thank you for standing by and welcome to the Pacific Ethanol Incorporated Fourth Quarter and Full Year 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number: 000-21467 (Exact name of registrant as specified in its charter) Delaware 41-2170618 (State or other jurisdiction o ...