SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) AUGUST 31, 2005
------------------------------
PACIFIC ETHANOL, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 000-21467 41-2170618
------------------------------ ------------------------ ---------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5711 N. WEST AVENUE, FRESNO, CALIFORNIA 93711
----------------------------------------------- -----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (559) 435-1771
-----------------------------
--------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
ETHANOL MARKETING AGREEMENT DATED AS OF AUGUST 31, 2005 BY AND BETWEEN
KINERGY MARKETING, LLC AND FRONT RANGE ENERGY, LLC
On August 31, 2005, Kinergy Marketing, LLC, a wholly-owned subsidiary of
the Company ("Kinergy"), entered into an Ethanol Marketing Agreement (the
"Marketing Agreement") with Front Range Energy, LLC, a Colorado limited
liability company ("FRE").
The Marketing Agreement is effective for three years with automatic
renewals for additional one-year periods thereafter unless a party to the
agreement delivers written notice of termination at least 60 days prior to the
end of the original or renewal term.
Under the Marketing Agreement, Kinergy is to provide denatured fuel ethanol
marketing services for FRE's production facility in Windsor, Colorado (the
"Facility"). Kinergy is to have the exclusive right to market and sell all of
the ethanol from the Facility, an estimated 40 million gallons-per-year. Kinergy
is obligated to use reasonable commercial efforts to solicit, negotiate and
enter into transactions, consisting of one or more forward sales of ethanol to
be supplied by the Facility, with one or more third parties.
Title to, risk of loss with respect to and the obligation to transport the
Facility's ethanol passes from FRE to Kinergy upon delivery to Kinergy. The risk
of degradation in quantity and quality that occurs after delivery to Kinergy
will be borne by Kinergy.
Kinergy must take delivery within seven days of the time that FRE makes
ethanol available to Kinergy. In the event that stored ethanol exceeds storage
capacity more than two times in any 60-day period or for longer than 24 hours at
any given time, FRE has the right to terminate the Marketing Agreement.
Kinergy is to pay FRE the gross payments received by Kinergy from third
parties for forward sales of ethanol (the "Purchase Price") less certain
transaction costs and fees. From the Purchase Price, Kinergy may deduct all
reasonable out-of-pocket and documented costs and expenses incurred by or on
behalf of Kinergy in connection with the marketing of ethanol pursuant to the
Marketing Agreement, including truck, rail and terminal costs for the
transportation and storage of the Facility's ethanol to third parties and
reasonable, documented out-of-pocket expenses incurred in connection with the
negotiation and documentation of sales agreements between Kinergy and third
parties (the "Transaction Costs"). From the Purchase Price, Kinergy may also
deduct and retain the product of 1.0% multiplied by the difference between the
Purchase Price and the Transaction Costs. In addition, Kinergy will split the
profit from any logistical arbitrage associated with ethanol supplied by FRE.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
-------------------------------------------
None.
-2-
(b) Pro Forma Financial Information.
-------------------------------
None.
(c) Exhibits.
--------
Number Description
10.1 Ethanol Marketing Agreement dated as of August 31, 2005 by
and between Kinergy Marketing, LLC and Front Range Energy,
LLC
-3-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 7, 2005 PACIFIC ETHANOL, INC.
By: /S/ RYAN TURNER
------------------------------------
Ryan Turner, Chief Operating Officer
-4-
EXHIBITS FILED WITH THIS REPORT
Number Description
------ -----------
10.1 Ethanol Marketing Agreement dated as of August 31, 2005 by and between
Kinergy Marketing, LLC and Front Range Energy, LLC
-5-