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Panda Ethanol, Inc. – ‘PREM14A’ on 9/11/06

On:  Monday, 9/11/06, at 5:02pm ET   ·   Accession #:  1193125-6-188782   ·   File #:  0-50282

1 Reference:  By:  SEC – ‘UPLOAD’ on 9/27/06

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 9/11/06  Panda Ethanol, Inc.               PREM14A                1:1.7M                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     Preliminary Merger Proxy                            HTML   1.52M 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant x   Filed by a Party other than the Registrant ¨

Check the appropriate box:

CIRRACOR, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Common stock, par value $0.001 per share of Cirracor, Inc.

28,800,000 shares of Cirracor common stock

The filing fee of $1.03 was calculated pursuant to Rule 0-11(c) of the Exchange Act and is equal to $107.00 per million dollars of aggregate merger consideration of $9,600.00. The aggregate merger consideration is calculated as the product of 28,800,000 shares of Cirracor common stock and one-third of the $0.001 per share par value of such shares, in accordance with Rule 0-11(a)(4) of the Exchange Act.

$            

$            

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Cirracor, Inc.

Preliminary Copy – Subject to Completion

                 , 2006

Dear Cirracor Stockholder:

You are cordially invited to attend a special meeting of stockholders of Cirracor, Inc. to be held on                  , 2006 at          [a.m.][p.m.], Newport Beach, California Time, at the office of M2 Law Professional Corporation, 500 Newport Center Drive, Suite 800, Newport Beach, California 92660.

At the special meeting, you will be asked to consider and vote upon the following proposals:

We are also asking that you grant the authority to vote your shares to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies in the event there are not sufficient votes in favor of adoption of the merger agreement at the time of the special meeting.

The affirmative vote of the holders of a majority of the outstanding shares of Cirracor on the record date is required to approve the merger proposal, the reverse stock split and the charter amendment. The adoption of the merger proposal is conditioned on the adoption of the reverse stock split. Furthermore, the reverse stock split proposal and the charter amendment proposal will not be presented to the meeting unless the merger proposal is approved.

After careful consideration, our board of directors unanimously determined that the merger, the reverse stock split and the charter amendment are in the best interests of Cirracor and its stockholders. Our board of directors has unanimously approved the merger agreement, the merger proposal, the reverse stock split proposal and the charter amendment proposal. Our board of directors unanimously recommends that you vote “FOR” the adoption of the merger proposal, the reverse stock split proposal, and the charter amendment proposal at the special meeting.

Our board of directors considered a number of factors in evaluating the transaction and consulted with its legal and financial advisors. The enclosed proxy statement provides detailed information about the merger agreement and the merger. The description of the merger agreement and all other agreements described in the proxy statement are subject to the terms of the actual agreements. We encourage you to read this proxy statement carefully, including its annexes and the documents we refer to in this proxy statement.

Your vote is very important, regardless of the number of shares you own. The merger proposal, the reverse stock split proposal and the charter amendment proposal must be adopted by the holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting. Therefore, if you do not return your proxy card or attend the special meeting and vote in person, it will have the same effect as if you voted “AGAINST”

This proxy statement is dated                  , 2006 and is first being mailed to stockholders of Cirracor, Inc. on or

about                  , 2006.

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adoption of the merger proposal, the reverse stock split proposal and the charter amendment proposal. Only stockholders who owned shares of Cirracor common stock at the close of business on                  , 2006, the record date for the special meeting, will be entitled to vote at the special meeting. To vote your shares, you may use the enclosed proxy card or attend the special meeting and vote in person. On behalf of the board of directors, I urge you to complete, sign, date and return the enclosed proxy card as soon as possible, even if you currently plan to attend the special meeting.

Thank you for your support of our company. I look forward to seeing you at the special meeting.

Neither the Securities and Exchange Commission (which we refer to as the “SEC”), nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosures in this proxy statement. Any representation to the contrary is a criminal offense.

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CIRRACOR, INC.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

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CIRRACOR, INC.

SPECIAL MEETING OF STOCKHOLDERS

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i

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ii

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Annexes

Annex A — Agreement and Plan of Merger

Annex B — Dissenters’ Rights Statute

Annex C — Amended and Restated Articles of Incorporation

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SUMMARY OF THE MATERIAL TERMS OF THE MERGER

This summary of material terms highlights selected information from this proxy statement and may not contain all of the information that is important to you. To understand the merger fully and for a more complete description of the merger agreement and the merger, you should read carefully this entire proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement. We encourage you to read the merger agreement, the legal document that governs the merger, which is attached as Annex A to this proxy statement.

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The following Q&A is intended to address some commonly asked questions regarding the merger. These questions and answers may not address all questions that may be important to you as a Cirracor stockholder. We urge you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement.

Except as otherwise specifically noted in this proxy statement, “we,” “our,” “us” and similar words in this proxy statement refer to Cirracor, Inc. In addition, we refer to Cirracor, Inc. as “Cirracor,” to Panda Ethanol, Inc. as “Panda Ethanol,” to Panda Energy International, Inc., the former parent of Panda Ethanol, as “Panda Energy” and to Grove Panda Investments, LLC, Cirracor’s controlling stockholder, as “Grove Panda.”

You should carefully read this proxy statement, including its annexes and the other documents we refer to in this proxy statement, because they contain important information about the merger, the merger agreement and the special meeting of the stockholders of Cirracor. The enclosed voting materials allow you to vote your shares without attending the special meeting. We anticipate filing a definitive proxy statement on December 20, 2006.

Your vote is very important. We encourage you to vote as soon as possible.

In addition, in connection with the merger, you are being asked to approve (i) a reverse stock split to occur immediately prior to the merger whereby each share of Cirracor common stock outstanding shall be converted into 0.340885 of a share of Cirracor common stock and (ii) the Amended and Restated Articles of Incorporation attached as Annex C to this proxy statement.

In addition, you are being asked to grant Cirracor management discretionary authority to adjourn or postpone the special meeting. If, for example, we do not receive proxies from stockholders holding a sufficient number of shares to adopt the merger agreement, we could adjourn or postpone the special meeting and use the additional time to solicit additional proxies in favor of adoption of the merger agreement.

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As of the record date for the special meeting, Grove Panda beneficially owned and was entitled to vote 2,749,250 shares of Cirracor common stock, or 78% of the aggregate voting power for all outstanding shares of Cirracor common stock on that date. Pursuant to the merger agreement, Grove Panda has agreed that it will vote all of its Cirracor common stock in favor of the reverse stock split, the merger agreement, the merger and the transactions contemplated thereby. Grove Panda has indicated its present intention to vote, or cause to be voted, the shares of Cirracor common stock owned by it “FOR” the adoption of the merger agreement, “FOR” the reverse stock split proposal and “FOR” the charter amendment proposal. As a result, we currently believe that the merger agreement will be adopted, the reverse stock split will be approved, and the Amended and Restated Articles of Incorporation will be approved, regardless of the vote of the other Cirracor stockholders.

However, as of the record date for the special meeting, Grove Panda beneficially owned and was entitled to vote 78% of the aggregate voting power for all outstanding shares of Cirracor common stock on that date. Pursuant to the merger agreement, Grove Panda has agreed that it will vote all of its Cirracor common stock in favor of the reverse stock split, the merger agreement, the merger and the transactions contemplated thereby. We therefore anticipate that the merger agreement will be adopted, the reverse stock split will be approved and the Amended and Restated Articles of Incorporation will be approved, regardless of the vote of the other Cirracor stockholders.

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Any written notice of revocation or subsequent proxy should be delivered to Cirracor, Inc., 3375 Toopal Drive, Suite 101, Oceanside, California 92054, Attention: Secretary, or hand-delivered to our Secretary at or before the taking of the vote at the special meeting.

If you have instructed a broker or bank to vote your shares, you must follow directions received from your broker or bank to change your vote.

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Cirracor, Inc.

3375 Toopal Drive, Suite 101

Oceanside, California 92054

Telephone: (760) 277-1505

Attn: Secretary

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SUMMARY

This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To understand the merger fully and for a more complete description of the merger agreement and the merger, you should read carefully this entire proxy statement, the annexes to this proxy statement and the documents we refer to in this proxy statement. We encourage you to read the merger agreement, the legal document that governs the merger, which is attached as Annex A to this proxy statement.

The Companies (page 33)

Cirracor, Inc.

3375 Toopal Drive, Suite 101

Oceanside, California 92054

Telephone: (760) 277-1505

Cirracor, Inc. has designed and built web sites and web applications. Cirracor has provided web development services to enterprises of varying sizes. Cirracor has aimed to be a single source of web services for businesses by providing custom graphics, advanced technical designs and detailed site maintenance services. Since May 2006, Cirracor’s primary objective has been to complete the merger with Panda Ethanol, and Cirracor has ceased its web design operations. Because Cirracor has limited operations and assets, it may be considered a shell company as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or Exchange Act.

In the event that the merger is consummated, Cirracor anticipates that it will be engaged exclusively in the projected business of Panda Ethanol.

Panda Ethanol, Inc.

4100 Spring Valley, Suite 1001

Dallas, Texas 75244

Telephone: (972) 980-7159

Panda Ethanol, Inc. is headquartered in Dallas, Texas. Panda Ethanol is currently developing fuel ethanol plants and biomass facilities in the United States. Panda Ethanol anticipates that its ethanol facilities will operate on a continuous basis and, where available, will utilize biomass energy technology as a fuel source. Panda Ethanol is currently developing ethanol production facilities in Hereford, Texas, Haskell, Kansas and Yuma, Colorado. Panda Ethanol estimates that the Hereford facility will be completed sometime in the fourth quarter of 2007, and that the Haskell and Yuma facilities will be completed in the second quarter of 2008.

The facility in Hereford, Texas will be constructed on a 383-acre site and is expected to produce approximately 105 million gallons of denatured ethanol per year. Panda Ethanol has received air permits for the Hereford facility and began construction in August 2006. On June 7, 2006, Panda Ethanol closed a private placement for total gross proceeds of approximately $90.0 million. On July 28, 2006, a wholly-owned subsidiary of Panda Ethanol entered into project level debt financings aggregating approximately $188.1 million.

Panda Energy, Panda Ethanol’s founder and largest stockholder, has 25 years experience as a company with a team of professionals that has developed, financed, constructed, owned and operated power generation facilities and other large scale, energy-related projects. Panda Ethanol believes it is well-positioned to benefit from Panda Energy’s experience, relationships and experienced management team and employee base.

Merger Consideration (page 40)

At the effective time of the merger, each outstanding share of common stock of Panda Ethanol (other than treasury shares, shares held by Panda Ethanol or any direct or indirect wholly-owned subsidiary of Panda Ethanol or Cirracor and shares held by stockholders who perfect their dissenters’ rights), will be converted into the right to receive one share of Cirracor common stock. Treasury shares and shares held by Panda Ethanol or any direct or indirect wholly-owned subsidiary of Panda Ethanol or Cirracor will be cancelled immediately prior to the effective

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time of the merger. As of the effective time of the merger, all shares of Panda Ethanol common stock will no longer be outstanding and will automatically be cancelled and will cease to exist, and each holder of a certificate representing any shares of Panda Ethanol common stock (other than stockholders of Panda Ethanol who have perfected their dissenters’ rights under Delaware law) will cease to have any rights as a stockholder, except the right to receive one share of Cirracor common stock per share of Panda Ethanol common stock. The conversion ratio of one share of Cirracor common stock (post reverse stock split) per share of Panda Ethanol common stock was determined through arm’s-length negotiations between Panda Ethanol and Cirracor.

Market Prices and Dividend Data (page 34)

Cirracor’s common stock is available for quotation on the OTC Bulletin Board, or OTCBB, under the trading symbol “CIRC.OB.” The OTCBB is an electronic quotation medium for securities that are not listed on a national securities exchange such as the American Stock Exchange or the New York Stock Exchange. The market for such securities is extremely limited and the prices quoted are not a reliable indication of the value of the Cirracor common stock. As of August 31, 2006, the Cirracor common stock has never been traded. Since it has never been traded, there was no closing price per share of the Cirracor common stock on May 17, 2006, the last full trading day before the public announcement of the merger, or on                  , 2006, the latest practicable trading day before the printing of this proxy statement.

There have been no cash dividends declared on the Cirracor common stock or on Panda Ethanol common stock. Cirracor and, after the merger, the surviving company intend to reinvest earnings to fund future growth. Accordingly, we do not anticipate that cash dividends will be paid on the Cirracor common stock in the foreseeable future.

Material United States Federal Income Tax Consequences of the Merger (page 41)

The merger will qualify as a reorganization within the meaning of Section 368(a) of the Code and no gain or loss will be recognized by Cirracor stockholders as a result of the merger.

A U.S. Holder of Cirracor common stock who exercises dissenters’ rights and effects a termination of his or its interest in Cirracor after the merger will generally be required to recognize capital gain or loss upon the exchange of such U.S. Holder’s shares of common stock of Cirracor for cash if such shares were held as a capital asset on the date of the merger. Such gain or loss will be measured by the difference between the amount of cash received and the U.S. Holder’s tax basis in the Cirracor common stock.

A non-U.S. Holder of Cirracor common stock who exercises dissenters’ rights and effects a termination of his or its interest in Cirracor after the merger generally will not be subject to U.S. federal income tax or withholding tax on any gain realized on the exchange unless (i) the gain is effectively connected with the conduct by the non-U.S. Holder of a trade or business in the United States and, if an income tax treaty applies, is attributable to a permanent establishment maintained by the non-U.S. Holder in the United States or (ii) the non-U.S. person is an individual who is present in the United States for periods aggregating 183 or more days in the taxable year the rights are exercised and certain other conditions are met.

For a more complete description of the tax consequences of the merger, see the section entitled “The Merger — Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 41.

Because individual circumstances may differ, stockholders should consult their own tax advisors to determine the particular tax consequences to them (including the application and effect of any federal, state, local or foreign income and other tax laws) of the merger.

Reasons for the Merger and Recommendation of Cirracor’s Board of Directors (page 40)

Panda Ethanol is currently developing fuel ethanol plants and biomass facilities in the United States. Cirracor believes that a business combination with Panda Ethanol will provide Cirracor stockholders with an opportunity to participate in a company with growth potential in the ethanol industry.

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In making its recommendation, Cirracor’s board of directors took into account, among other things, the business, competitive position, strategy and prospects of Panda Ethanol, the fairness of the merger, from a financial point of view, to the holders of Cirracor common stock, and the terms and conditions of the merger agreement. For a more complete description of the factors considered by the Cirracor board of directors, see the section entitled “The Merger — Reasons for the Merger and Recommendation of the Cirracor Board of Directors” beginning on page 40.

The Special Meeting of Cirracor’s Stockholders (page 35)

Date, Time and Place. A special meeting of Cirracor’s stockholders will be held on                  , 2006, at          [a.m.][p.m.], Newport Beach, California Time, at the office of M2 Law Professional Corporation, 500 Newport Center Drive, Suite 800, Newport Beach, California 92660, to:

Record Date and Voting Power. You are entitled to vote at the special meeting if you owned shares of Cirracor common stock at the close of business on                  , 2006, the record date for the special meeting. You will have one vote at the special meeting for each share of Cirracor common stock you owned at the close of business on the record date. There are 3,520,250 shares of Cirracor common stock entitled to be voted at the special meeting.

Vote Required. The adoption of the merger agreement, approval of the reverse stock split and approval of the Amended and Restated Articles of Incorporation require the affirmative vote of the holders of at least a majority of the outstanding shares of Cirracor common stock entitled to vote at the special meeting. Approval of any proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies requires the affirmative vote of at least a majority of the votes cast by holders of the Cirracor common stock present, in person or represented by proxy, at the special meeting, provided a quorum is present, in person or represented by proxy, at the special meeting.

Interests of Cirracor’s Executive Officers and Directors in the Merger (page 40)

Cirracor’s executive officers and directors do not have any independent interests in the merger.

Conditions to the Closing of the Merger (page 51)

The merger is subject to the satisfaction or waiver of various conditions, which include the following:

Panda Ethanol and Cirracor are not obligated to effect the merger unless the following conditions are satisfied or waived:

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Cirracor is not obligated to effect the merger unless the following conditions are satisfied or waived:

Panda Ethanol is not obligated to effect the merger unless the following conditions are satisfied or waived:

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(except that those representations and warranties that speak only as of a particular date need only be true and correct as of such date), and Panda Ethanol has received a certificate, signed by Cirracor’s president and dated as of the closing date, to the effect that the representations and warranties set forth in the merger agreement have been satisfied;

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Limitation on Considering Other Acquisition Proposals (page 51)

Except for the issuance and sale of certain equity securities of Panda Ethanol, none of the parties may authorize any of their officers, directors, agents, representatives or advisors to solicit, initiate, execute or encourage or take any action to facilitate the submission of inquiries, proposals or offers from any person relating to any matter concerning any merger, consolidation, business combination, recapitalization or similar transaction involving Panda Ethanol or Cirracor (other than the transaction contemplated by the merger agreement) or any other transaction, the consummation of which would or could reasonably be expected to impede, interfere with, prevent or delay the merger or which would or could be expected to dilute the benefits to Panda Ethanol of the transactions contemplated by the merger agreement. Upon signing of the merger agreement, all parties were required to immediately cease and cause to be terminated any existing activities, discussions and negotiations with any parties with respect to any of the foregoing.

Termination of the Merger Agreement (page 54)

The merger agreement may be terminated and abandoned at any time prior to the effective time of the merger under certain circumstances, including:

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Dissenters Rights (page 45)

Under Chapter 92A of the Nevada Revised Statutes, you are entitled to dissenters’ rights in connection with the merger. You have the right to dissent from the merger and obtain cash payment for the “fair value” of your shares, which is defined as the value of your shares immediately before the effectuation of the merger. Generally, in order to exercise your appraisal rights you must:

Voting for the merger will waive your rights to dissent and obtain fair value for your shares of Cirracor stock under Nevada law. Failure to vote against the merger will not constitute a waiver of dissenters’ rights. Merely voting against the merger will not protect your rights to dissent, which requires strict compliance with all procedural steps provided under Nevada law. Requirements under Nevada law for exercising dissenters’ rights are described in further detail in the section entitled “Dissenters’ Rights for Cirracor Stockholders” beginning on page 45 of this proxy statement. In addition, the relevant sections of Nevada law regarding dissenters’ rights are reproduced and attached as Annex B to this proxy statement.

We encourage you to read these provisions carefully and in their entirety. Failure to follow the steps required by law for perfecting dissenters’ rights may lead to the loss of those rights, in which case the dissenting stockholder will be treated in the same manner as a non-dissenting stockholder. Because of the complexity of the law relating to dissenters’ rights, stockholders who are considering objecting to the merger are encouraged to read these provisions carefully and consult their own legal advisors.

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FORWARD-LOOKING INFORMATION

This proxy statement contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our current expectations, assumptions, beliefs, estimates and projections about Cirracor, Panda Ethanol and the ethanol and other related industries. The forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “should” and variations of such words or similar expressions.

We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be incorrect. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include the risk factors discussed under the heading “Risk Factors” and the following:

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RISK FACTORS

In this “Risk Factor” section, “our company,” “we,” “our,” “us,” and similar words refer to the surviving corporation following the merger.

Risks Related to our Business and Operations Following the Merger

Risks Related to our Company as a Development-Stage Company Following the Merger

We have no operating history of ethanol production, which could result in errors in management and operations, causing a material adverse effect on our financial condition and results of operations

Panda Ethanol was recently formed and has no history of, or experience in, operating an ethanol production facility. While its founder and current largest stockholder, Panda Energy, which, after the merger, will have a significant interest in the surviving corporation, has extensive experience developing, constructing and operating large-scale power generation facilities and has several ethanol projects under development, none of Panda Energy, Panda Ethanol or Cirracor has experience in constructing or operating an ethanol production facility.

We may be unable to manage the start-up of our facilities in a timely and cost-effective manner, and any failure by us to do so would delay our ability to begin producing and selling ethanol. A delay in start-up operations is likely to further delay our ability to generate revenue and satisfy our debt obligations and our financial condition and results of operations could be materially adversely affected.

We anticipate a period of significant growth, involving the construction and start-up of operations of one or more ethanol production facilities. This period of growth and the start-up of our facilities are likely to be a substantial challenge to us. If we fail to manage this start-up effectively, you could lose all or a substantial part of the value of your common stock.

We may never become profitable.

The management of Panda Ethanol believes that our company will incur significant losses until we are able to successfully complete construction and commence operations of our facilities. We may not be successful in our efforts to build and operate one or more ethanol production facilities. In addition, we may not be successful in securing additional financing that may be necessary to build and operate our ethanol production facilities. Even if we successfully meet all of these objectives and begin operations, we may be unable to operate profitably.

We may be unable to meet the administrative and operational needs of our growth strategy effectively, which could result in our inability to adequately increase our sales or to efficiently operate our business.

Our strategy envisions a period of rapid growth that may impose a significant burden on our administrative and operational resources. The growth of our business, and in particular, the completion of construction of our ethanol facilities currently under development, will require significant investments of capital and management’s close attention. Our ability to effectively manage our growth will require us to substantially expand the capabilities of our administrative and operational resources and to attract, train, manage and retain qualified management, technicians and other personnel. Although we have retained, through a transition services agreement described below and in the section entitled “Other Information Related to Panda Ethanol — Employees,” beginning on page 77, and anticipate hiring persons with experience in the ethanol industry, we may be unable to retain and hire the number of qualified persons necessary to operate our facilities effectively. Until approximately October 1, 2006, all of our managers, officers and individuals who perform services related to our operations, management, marketing, project management, logistics and administration will be employed by Panda Energy and its affiliates and will be subject to a transition services agreement between our company and Panda Energy. It is possible that some of these managers, officers and employees could decide not to become our employees. Our failure to successfully meet our administrative and operational needs of our growth strategy could result in our inability to operate our business effectively.

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Certain of our managers, officers and employees may have other business and management responsibilities which may cause conflicts of interest in the allocation of their time and services to our company.

Our managers and officers may have other management responsibilities and business interests apart from our ethanol projects for an interim or extended period of time. Until approximately October 1, 2006, all of our managers, officers and individuals who perform services related to our operations, management, marketing, project management, logistics and administration will be employed by Panda Energy and its affiliates and will be subject to a transition services agreement between the company and Panda Energy. After October 1, 2006, all of these managers, officers and individuals will become our employees but may continue to provide services to Panda Energy. Accordingly, certain of our managers, officers and employees may experience conflicts of interest in allocating their time and services between us, Panda Energy and its affiliates. Such conflicts may compromise such managers’, officers’ and individuals’ performance and efficacy in performing the necessary tasks and functions to our start-up business and ultimately have a material adverse effect on our business.

If our principal agreements are terminated or become unfavorable, our projects may fail or be harmed in ways that significantly reduce the value of your common stock.

We will be dependent on various contractors, suppliers, lenders and other third parties for the implementation and financing of each project. If agreements with such parties are terminated or if the terms are amended unfavorably to us, our projects may be harmed or even fail. Because we will be dependent on the success of several large-scale projects, the impairment or failure of any of these projects could significantly reduce our production and revenues.

Given that all of our revenue will be primarily derived from the production and marketing of ethanol and its co-products, any disruption in our operations could have a material adverse effect on us.

After the merger, our primary source of revenues will be from the sale of ethanol and related co-products that we will produce at our facilities. We will not have an alternative line of business in the event that we are unable to operate our facilities for any reason. Any delay or stoppage in our anticipated production would substantially reduce our revenues.

We will be dependent on Panda Energy’s infrastructure and the services that Panda Energy will provide to us, which may increase our costs or make us unable to operate as an independent entity.

Panda Ethanol was a wholly-owned subsidiary of Panda Energy until June 7, 2006 and continues to depend upon Panda Energy to provide facilities, services and personnel as well as other operational and organizational assistance. The costs that Panda Energy incurs in connection with obtaining these services for itself and Panda Ethanol are proportionately allocated to Panda Ethanol. Following the merger, although it is anticipated that Panda Energy will own 46% of the issued and outstanding shares of the surviving company, Panda Energy will have no obligation to provide financial, operational or organizational assistance to us other than limited services pursuant to a transition services agreement described in greater detail in the section entitled “Other Information Related to Panda Ethanol — Employees” beginning on page 77. If Panda Energy ceases to provide the operational or organizational assistance that it currently provides, we may be unable to replace these services with a comparable quality of services on terms and conditions as favorable as those Panda Energy has been able to obtain. We may be unable to implement successfully the changes necessary to operate independently. We may also incur additional costs relating to operating independently that would cause our costs to increase materially.

Risks Related to our Indebtedness

We will have a substantial amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business.

We anticipate having a significant amount of indebtedness. The extent of our leverage may have important consequences, including:

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We may be unable to service, repay or refinance our debt and remain in compliance with our debt covenants, which would have a material adverse effect on our business.

Our ability to repay debt will depend on our financial and operating performance and on our ability to successfully implement our business strategy following the merger. Our financial and operational performance will depend on numerous factors, many of which are beyond our control, such as economic conditions and governmental regulation. We cannot be certain that our earnings will be sufficient to allow us to pay the principal and interest on our debt and meet our other obligations. If we do not have enough money to service our debt, we may be required but unable to refinance all or part of our existing debt, sell assets, borrow more money or raise equity on terms acceptable to us, if at all. Further, failing to comply with the financial and other restrictive covenants in our loan agreements could result in an event of default, which could adversely affect our ability to successfully operate our ethanol production facilities and our financial condition and results of operations.

Our inability to obtain the debt financing necessary to construct and operate our planned ethanol production facilities could result in the failure of those projects and perhaps our company after the merger.

Our financing plan requires a significant amount of debt financing. The amount and nature of the debt financing that we are seeking is subject to fluctuating interest rates and an ever-evolving credit environment as well as general economic factors and other factors over which we have no control.

In addition to financing our operations through equity capitalization private offerings, we plan to employ significant leverage by borrowing funds from various commercial banks and financial companies, the obligations of which will be repaid from the operating cash flow of each subsidiary project and secured by the assets of each associated facility. The construction and start-up of each facility is contingent on our ability to arrange debt financing from third party financing sources. If the debt financing we need is not available for any reason, we could be forced to abandon one or more of our projects which singularly or in the aggregate could adversely impact our business and could force us to abandon our business plan.

Restrictive loan covenants in our financing agreements may hinder our ability to operate our business and delay or prohibit us from making cash contributions to our stockholders.

Our debt load and service requirements necessary to implement our business plan following the merger will result in substantial debt service requirements, which could have important adverse consequences that could hinder our ability to conduct our operations, including our ability to:

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If we default on any covenant, a lender could make the entire debt immediately due and payable. If this occurs, we might not be able to repay our debt or borrow sufficient funds to refinance it. Even if new financing becomes available, it may not be on terms that are acceptable to us. These events could cause us to cease construction of one or more of our planned facilities or to cease operations entirely.

Risks Related to the Construction of our Ethanol Plants

Our dependency on key suppliers to design and build our facilities and supply necessary equipment may have a material adverse effect on our business.

We will be highly dependent upon our general contractors and key vendors to design, engineer and build our facilities. If one of our contracted suppliers or vendors were to terminate its relationship with us after construction was initiated, there is no assurance that we would be able to obtain a replacement supplier or vendor or that a replacement would be able to complete construction within the originally contracted time frame and at the same or lower price. In the event that any of our suppliers or vendors fails to deliver the equipment or the intellectual rights associated with such equipment, such as the rights to our innovative biomass conversion process, we may be unable to replace this equipment or technology quickly. Any delay in the construction of our facilities or commencement of operations or a problem in the design or engineering of our facilities could have a material adverse effect on our production of ethanol.

Our general contractors, suppliers and vendors may have conflicting interests that could cause them to put their financial interests ahead of ours, which may have a material adverse effect our business.

Our contractors, suppliers and vendors may experience conflicts of interest that cause them to put their financial interests ahead of our best interests. Our contractors, suppliers and vendors may also have conflicts of interest due to the fact that they are involved in the design and construction of other ethanol plants. Although schedule and performance guarantees may motivate our contractors, suppliers and vendors to perform their agreements with respect to our facilities, we cannot ultimately require them to devote their full time or attention to our activities. As a result, they may have, or may come to have, a conflict of interest in allocating personnel, materials and other resources to our facilities which could result in inefficiencies and delays in our ethanol production, which could materially adversely affect our business. Such conflicts of interest may reduce our profitability and the value of our common stock and could result in reduced distributions to investors.

The cost and time to construct our facilities and commence operations may be more than we anticipate. Our contractor has recently increased construction costs and extended the construction schedule for our Hereford Facility.

The cost to construct our facilities and commence operations may be higher than expected and the construction of any of our facilities could take longer than anticipated. For example, we expect direct construction costs for our Hereford Facility to be approximately $200 million. We estimate the total cost to be approximately $269 million including financing, development, working capital and contingency costs. Although Energy Products of Idaho, Inc., or EPI, has agreed to design and supply the biomass handling and conversion equipment for the Hereford Facility for approximately $25 million and Lurgi PSI, Inc., or Lurgi, has agreed to design and construct the Hereford Facility for approximately $161 million based on current designs, actual costs may be higher than expected and there is no assurance that the final costs will not be higher than we presently assume. In addition, the construction timetable has already been extended to 17 months.

Any significant increase in the estimated construction cost of and in the estimated length of time for, one or more of our facilities could hinder our ability to complete construction and delay our ability to generate revenues and as a result could have a material adverse effect on our business and results of operations or even force us to abandon our business plan.

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We may encounter defective material and workmanship or process engineering that could cause significant delays in the commencement of our operations.

Any defects in material or workmanship may cause substantial delays in the commencement of operations of our facilities. If defects are discovered after commencement of operations, or if our facilities fail to meet the performance criteria, substantial delays in the commencement of operations could occur which may have a material adverse effect on our business and results of operations.

The condition of our construction sites may differ from what we expect.

If we encounter concealed or unknown conditions at our facility sites, then our general contractors may be entitled to an adjustment in the contract price and time for performance if the conditions affect its costs and performance time. Such adjustments could result in increasing the cost of construction of our facilities and may result in time delays. Concealed or unknown conditions include any concealed physical conditions at each site that materially differ from the conditions contemplated in the proposed project plans or from the geotechnical study performed on the property for each facility, or any unknown conditions that differ materially from the conditions ordinarily encountered in similar work. Although the site has been inspected, concealed or unknown conditions are often difficult to detect and there can be no assurance that we will not encounter them.

We could face environmental permitting issues that may delay or prevent construction or increase our costs.

Issues regarding compliance with applicable environmental standards could arise at any time during the construction and operation of our facilities, which could have a material adverse effect on our business. While we have been granted air permits authorizing construction of Hereford Facility and our planned facility in Haskell County, Kansas and expect to receive an air permit authorizing construction of our planned facility in Yuma, Colorado in September 2006, we may have difficulty obtaining or complying with all of the necessary environmental permits required in connection with the construction and on-going operation of one or more of our facilities. As a condition of granting necessary permits, regulators may impose conditions that would increase our costs of construction and operation or delay our ability to commence operations within the time period we presently expect, resulting in an increase of our construction and compliance costs which could force us to discontinue construction or operation of one or more of our facilities and you could lose part or all of your investment.

Risks Related to our Ethanol Production

The market price of ethanol is volatile and subject to significant fluctuations, which may cause our profitability to fluctuate significantly.

The market price of ethanol is influenced by many factors, including the price of gasoline and crude oil and the supply of ethanol in the market. Oil prices are highly volatile and difficult to forecast due to frequent changes in global politics and the world economy and the demand for petroleum-derived products. The supply and demand for oil throughout the world is affected by incidents in unstable political environments, the demand for oil from rapidly developing countries such as China and India, weather conditions, drilling, extraction and refinery technology, success in exploration, decisions made by OPEC and its member countries, industrial output and many other factors. We cannot predict the future price of crude oil or gasoline. Although the market price of ethanol has historically tracked the market price of gasoline we cannot provide any assurance that this will continue to occur. Low prices for crude oil and gasoline and the relationship between ethanol supply and demand may reduce the price of ethanol to a level that makes it unprofitable to produce. In recent years, the prices of crude oil, gasoline and ethanol have all reached historically high levels. If the prices of crude oil or gasoline were to decline, our revenues and ultimately our profitability may be adversely affected. Fluctuations in the market price of ethanol may cause our profitability to fluctuate significantly.

Our business is highly sensitive to corn prices and we generally cannot pass on increases in corn prices to our customers.

The principal raw material we use to produce ethanol and co-products, including dry and wet distillers grains, is corn. As a result, changes in the price of corn can significantly affect our business. In general, rising corn

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prices produce lower profit margins. Because ethanol competes with non-corn-based fuels, we generally are unable to pass along increased corn costs to our customers. At certain levels, corn prices may make ethanol uneconomical to use in fuel markets. The price of corn is influenced by weather conditions and other factors affecting crop yields, farmer planting decisions and general economic, market and regulatory factors. These factors include government policies and subsidies with respect to agriculture and international trade, and global and local demand and supply. The significance and relative effect of these factors on the price of corn is difficult to predict. Any event that tends to negatively affect the supply of corn, such as adverse weather or crop disease, could increase corn prices and potentially harm our business. In addition, we may also have difficulty, from time to time, in physically sourcing corn on economical terms due to supply shortages. Such a shortage could require us to suspend operations until corn is available at economical terms, which would have a material adverse effect on our business, results of operations and financial position. If an additional ethanol production facility is built in the same general vicinity as ours, the price we pay for corn at a facility could increase and the local supply of corn be reduced, which may result in increased costs and reduced profits.

The spread between ethanol and corn prices can vary significantly and we do not expect the spread to remain at recent high levels which could materially adversely impact our gross margins.

Our gross margins are principally dependent on the spread between ethanol and corn prices. In recent periods, the spread between ethanol and corn prices has been at a historically high level, driven in large part by high oil prices and historically low corn prices. In recent months, however, this spread fluctuated widely and we cannot provide any assurance that fluctuations in this spread will not continue to occur. Any reduction in the spread between ethanol and corn prices, whether as a result of an increase in corn prices or a reduction in ethanol prices, would adversely affect our results of operations and financial condition.

Our plan to use cattle manure and cotton gin waste as fuel to generate steam for the ethanol production process at certain of our facilities, including our Hereford and Haskell Facilities, is unique to the industry and has not been utilized to date in commercial quantities and may not be as successful as we expect.

In many of our facilities, we plan to primarily use a biomass conversion process involving the use of cattle manure and cotton gin waste to generate steam for the ethanol production process. Most other ethanol producers currently use natural gas as their sole fuel source in the production process. No other ethanol facility that we know of uses a cattle manure biomass conversion system. While the technology has been proven to work with different feed stocks and has been successfully tested with manure, it has not been tested at or utilized in commercial quantities or to solely power an ethanol plant. At each of our biomass-powered facilities, we will also have a separate natural gas system in place that will allow us to operate such facilities using natural gas in the event that we are unable to operate using the biomass conversion system. However, the use of natural gas would make our ethanol production dependent on natural gas prices, which could be substantially more expensive for us than cattle manure and cotton gin waste. Use of natural gas as the primary fuel for our ethanol production instead of the biomass conversion process could materially impact the profitability of our biomass-powered facilities.

The cost and availability of cattle manure will affect our business.

We expect our biomass-powered facilities will annually consume approximately 525,000 tons of cattle manure to produce approximately 105 million gallons of denatured ethanol. Although we expect to be able to meet all of our cattle manure requirements locally, our business will depend on the continued availability of cattle manure. At our Hereford facility, for example, we currently have contracts with approximately 18 local feedlots and dairies that we expect to collectively meet the estimated annual manure need at the Hereford facility. On the other hand, significant limitations in the availability of cattle manure could increase our costs at our biomass-powered facilities.

We may engage in hedging transactions which involve risks that can harm our business.

In an attempt to partially offset the effects of the volatility of ethanol prices and corn and natural gas costs, we may take hedging positions in order to limit our exposure to commodity price fluctuations. These may include (i) purchasing corn through spot cash, fixed-price forward and delayed pricing contracts, (ii) utilizing hedging positions in the corn futures and options markets on the Chicago Board of Trade, or CBOT, to manage the risk of corn price

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fluctuations, (iii) entering into contracts to supply a portion of our ethanol production on a forward basis and, in connection with our corn hedging positions, to lock in specific “crush” margins for a portion of our corn requirements, (iii) hedging a portion of our exposure to natural gas price risk from time to time, by using fixed price or indexed physical contracts, and (iv) establishing from time to time an unleaded gasoline hedge position using futures to reduce our exposure to unleaded gasoline price risk. The financial impact of these activities is dependent upon, among other things, the commodity futures prices involved and our ability to sell sufficient products to use all of the corn and natural gas for which we have futures contracts. Hedging arrangements also expose us to the risk of financial loss in situations where the other party to the hedging contract defaults or, in the case of physical contracts, where there is a change in expected differential of an open position and the underlying price in the hedging agreement affecting the actual prices paid or received by us. Hedging activities can themselves result in losses when a position is purchased in a declining market or a position is sold in a rising market. A hedge position often settled in the same time frame as the physical commodity, is either purchased, as in the case of corn and natural gas, or sold as in the case of ethanol. Hedging losses may be offset by a decreased cash price for corn and natural gas and an increased cash price for ethanol. We may also vary the amount of hedging or other risk mitigation strategies we undertake, and we may choose not to engage in hedging transactions at all. Our hedging activities may cause us to forego additional future profits or result in our making cash payments.

Increases in natural gas prices or changes in our natural gas costs relative to natural gas costs paid by competitors may adversely affect our results of operations and financial position.

It is currently contemplated that we will use natural gas as a backup energy source in our biomass-powered facilities and as the primary/sole energy source in a select number of our facilities where biomass is not locally available in amounts that are either sufficient or economical to install and employ a biomass conversion system such as our planned Yuma Facility. The market for natural gas is subject to market conditions that create uncertainty in the price and availability of the natural gas. We will rely upon third parties for our supply of natural gas. The prices for and availability of natural gas are subject to volatile market conditions. These market conditions often are affected by factors beyond our control such as higher prices resulting from colder than average weather conditions and overall economic conditions. Significant disruptions in the supply of natural gas could impair our ability to produce ethanol at our facilities that rely on natural gas as the primary fuel source.

Because the production of ethanol requires a significant supply of water, our business will be materially harmed if we are unable to obtain an adequate quality and quantity of water.

Water supply and water quality are important in the process required to produce ethanol. Each of our 105 million gallon per year denatured ethanol facilities is expected to use up to one million gallons of water per day, or almost 700 gallons per minute. While we expect that our requirements will be met by the local municipalities and regional authorities that control the rights to or the direct supply of water serving each of our facilities, there is no assurance that alternative sources of water at commercially reasonable rates could be obtained, if at all. In addition, there are no assurances that such water will be of an adequate quality. If the water quality from any of these sources is not adequate, we may, at greater cost to us, need to treat the water or find other sources. Further, certain of our facilities, including our Hereford Facility located in the panhandle of Texas, are located in drought prone areas and there is a possibility we may be unable to meet our water requirements using these sources in the event of a significant prolonged drought. The possibility of drought, or any other unforeseen disruption in the quantity and quality of our water, may have a material adverse effect on our operations, cash flows and financial performance and could even cause us to cease ethanol production for periods of time.

The transportation of feedstock to us and of ethanol and distillers grains to our customers will be affected by business risks that are largely out of our control, any of which could significantly reduce our revenues and operating margins.

The operation of our facilities will depend on our ability to receive adequate amounts of feedstock (over and above our storage capability) in a timely manner and our failure to receive sufficient feedstock could have a material adverse effect on our production, revenues and results of operations. We anticipate purchasing corn and other feedstock from states in the Midwest, including Illinois and Nebraska, to be delivered to us by shuttle trains, rail, and truck. We will rely on third parties to transport feedstock to us and our ethanol to our customers. The transportation companies with whom we contract may be subject to risks that are largely out of their and our control,

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including weather, limitations on capacity in the transportation industry, security measures, fuel prices, taxes, license and registration fees, and insurance premiums. In addition, to the extent we will rely upon delivery by truck of feedstock to us and ethanol and distillers grains to our customers, we may be affected by any overall shortage of truck drivers caused by the Hazmat Threat Assessment Program implemented under the USA PATRIOT Act or any other security measures instituted as a result of the threat of terrorism. This shortage may result in increased shipping costs or delays in transport, which could adversely affect our production and profits.

Our dependency on the marketing efforts of Aventine Renewable Energy, Inc., or Aventine, for substantially all of the ethanol produced at our Hereford plant in accordance with certain marketing arrangements could have a material adverse effect on our business.

We do not currently have our own sales force or sales organization to support the sale of ethanol. However, we may develop and staff a sales force in the future or enter into arrangements with other distributors similar to our arrangement with Aventine. Until that time, Aventine, a potential competitor of ours, will be the sole distributor of substantially all of the ethanol produced at our Hereford plant, which will initially be our only plant. Accordingly, we will initially be dependent on one distributor and expect to rely heavily on its marketing efforts to successfully sell our product.

Because Aventine also sells ethanol for itself and a number of other producers, we have limited control over its sales efforts. In addition, a significant portion of our accounts receivable may be attributable to Aventine, whose credit is currently rated below investment grade. We or Aventine may terminate these agreements upon the occurrence of an event of default by the other party. If Aventine were to default on payments to us, we could experience a material loss. If our agreements with Aventine terminate, we may seek other arrangements to sell our ethanol, including selling our product with our own sales personnel, but we can give no assurance that our sales efforts would achieve results comparable to those that may be achieved by Aventine.

Limitations on our ability to sell wet distillers grains locally could have a material adverse effect on our business.

The production of ethanol produces distillers grains, which can be sold to feedyards as a supplement to cattle feed. Distillers grains can be sold wet or dried; however, the cost to dry the distillers grains can be significant. For this reason, the majority of the distillers grains we intend to produce and market will be wet distillers grains with solubles, or WDGS, which have a shelf life of three days to one week. In the event of an unanticipated change in market demand, we may be unable to sell our WDGS at a profit or at all. In addition, because of the short shelf life of the product, we will be limited in our ability to transport the WDGS to other markets for sale. Decreased local demand for WDGS or limitations on our ability to sell WDGS in other markets could have a material adverse effect on our business.

Work stoppages and other labor relations issues could result in decreased sales or increased costs, either of which would negatively impact our financial condition and results of operation.

Our employees are currently not unionized. While we believe our relations with employees are satisfactory, any prolonged work stoppage or strike could have a negative impact on our business, financial condition or results of operations. In addition, our suppliers, contractors or other third parties associated with the construction of our facilities or the operation of our business may have unionized work forces. A labor strike, work stoppage or slowdown by unionized employees could halt or slow the construction of our facilities or the production, transportation or sale of our products, which could increase our costs and have a significant adverse impact on our operations.

Natural disasters, such as fires, hurricanes, floods, unusually heavy or prolonged rain, and droughts may cause fluctuations in the price, availability and quality of supplies, labor, and raw materials which could result in production delays and increase costs causing a material adverse effect on our business.

Fluctuations in the price, availability and quality of supplies, labor, and raw materials that we need in order to produce, transport and sell ethanol could have a material adverse effect on our construction, cost of sales or ability to meet our customers’ demands. The price and availability of such supplies, labor, and raw materials may fluctuate significantly, depending on many factors, including natural disasters, such as fires, hurricanes, floods, unusually

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heavy or prolonged rain, and droughts natural resources. These events can also cause increased freight costs. Hurricane Katrina, in particular, caused severe devastation in New Orleans and the Mississippi Gulf Coast in August, which led to increased costs and shortages of construction labor and building supplies and raw material throughout the entire southeastern United States. In addition, hurricane-related disruption of rail and pipeline traffic in the U.S. Gulf Coast area negatively affected shipments of raw materials and products.

Risks Related to the Ethanol Industry

We will operate in a competitive industry and competition may negatively impact our profitability.

We will be in competition with numerous other ethanol producers, some of whom may have greater resources than we do. Additional ethanol producers may enter the market if the demand for ethanol increases and existing producers may increase the capacity of their current plants or build new ethanol production facilities. The largest ethanol producers in the United States include Archer-Daniels-Midland, VeraSun Energy Corporation, Aventine, Cargill, Inc. and New Energy Corp., all of which are capable of producing as much or more ethanol than we expect to initially produce. We will also be in competition with several local competitors with respect to sales of the distillers grains that we will produce. Although some of our future competitors may be larger than we will be, smaller farm cooperatives have also been able to compete effectively in the ethanol industry.

We also face increasing competition from international suppliers of ethanol. According to the RFA, Brazil is currently the world’s second largest producer and exporter of ethanol. In Brazil, ethanol is produced primarily from sugarcane, which is also used to produce food-grade sugar. Brazil experienced a dramatic increase in ethanol production and trade in 2004, exporting approximately 112 million gallons to the U.S. alone. Ethanol imported from Brazil may be a less expensive alternative to domestically produced ethanol, which is primarily made from corn. Competition from ethanol imported from Brazil may affect our ability to sell our ethanol profitably, which would reduce the value of your common stock.

Lastly, ethanol is not the only product that can be added to gasoline to reduce emissions and increase octane levels. Oil companies have historically used methyl tertiary butyl ether, or MTBE, as a fuel additive to reduce emissions, and although the use of MTBE has been limited or banned in 25 states due to potentially adverse environmental effects from its production, it is still used by several major oil companies in some markets. Alternatives to ethanol and MTBE are continually under development and existing alternatives, such as alkylates and ethyl tertiary butyl ether, or ETBE, may become more cost effective. Our competitors may be able to successfully develop and market alternatives to ethanol which could adversely affect our business and results of operations.

New plants under construction or decreases in the demand for ethanol may result in excess production capacity in our industry causing a material adverse effect on our revenues and profitability.

According to the RFA, domestic ethanol production capacity has increased steadily from 1.8 BGY in 2001 to an annualized rate of 4.5 BGY as of January 2006. In addition, over 2.2 BGY of domestic capacity is under construction representing a 49% increase over current production levels. Excess capacity in the ethanol industry would have an adverse impact on our results of operations, cash flows and financial condition. In a manufacturing industry with excess capacity, producers have an incentive to manufacture additional products for so long as the price exceeds the marginal cost of production (i.e., the cost of producing only the next unit, without regard for interest, overhead or fixed costs). This incentive can result in the reduction of the market price of ethanol to a level that is inadequate to generate sufficient cash flow to cover our costs. In addition, increased production of ethanol could result in increased demand for corn. This could result in higher prices for corn and cause higher ethanol production costs and, in the event that we are unable to pass increases in the price of corn to our customers, would result in lower profits. Excess capacity may also weaken pricing for WDGS, an ethanol co-product we intend to produce and sell to local feedyards. Any material decline in the price of ethanol or WDGS will adversely affect our revenues and profitability.

Excess capacity may result or intensify from increases in capacity coupled with insufficient demand. Demand could be impaired due to a number of factors, including regulatory developments and reduced U.S. gasoline consumption. Reduced gasoline consumption could occur as a result of increased prices for gasoline or crude oil.

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For example, price increases could cause businesses and consumers to reduce driving or acquire vehicles with more favorable gasoline mileage. There is some evidence that this has occurred in the recent past as U.S. gasoline prices have increased.

Development of alternative ethanol production systems or alternative fuels could affect our results of operations.

Alternative fuels, gasoline oxygenates and ethanol production methods are continually under development. A number of automotive, industrial and power generation manufacturers are developing more efficient engines, hybrid engines and alternative clean power systems using fuel cells or clean burning gaseous fuels. Vehicle manufacturers are working to develop vehicles that are more fuel efficient and have reduced emissions using conventional gasoline. Vehicle manufacturers have developed and continue to work to improve hybrid technology, which powers vehicles by engines that utilize both electric and conventional gasoline fuel sources. In the future, the emerging fuel cell industry offers a technological option to address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns. Fuel cells have emerged as a potential alternative to certain existing power sources because of their higher efficiency, reduced noise and lower emissions. Fuel cell industry participants are currently targeting the transportation, stationary power and portable power markets in order to decrease fuel costs, lessen dependence on crude oil and reduce harmful emissions. If the fuel cell and hydrogen industries continue to expand and gain broad acceptance, and hydrogen becomes readily available to consumers for motor vehicle use, we many not be able to compete effectively. This additional competition could reduce the demand for ethanol, which would negatively impact our profitability.

In addition, many of our competitors invest heavily in research and development of alternative ethanol production systems and alternative fuels. Our inability to meet the substantial capital investments required to remain technologically competitive could result in our competitors being able to produce ethanol more cost effectively or produce less expensive alternative fuels, which could adversely affect the demand for our ethanol. These events could have a material adverse effect on our business.

Corn-based ethanol may compete with cellulose-based ethanol in the future, which could make it more difficult for us to produce ethanol on a cost-effective basis and could reduce the value of your investment.

Most ethanol is currently produced from corn and other raw grains, such as milo or sorghum (especially in the Midwest). The current trend in ethanol production research is to develop an efficient method of producing ethanol from cellulose-based biomass such as agricultural waste, forest residue, municipal solid waste, and other biomass material. This trend is driven by the fact that cellulose-based biomass is generally cheaper to obtain than corn and that the use of cellulose-based biomass to produce ethanol would create opportunities to locate plants and produce ethanol in areas that are not suitable to grow corn in significant amounts. Although the current technology for converting cellulose-based biomass to ethanol is not sufficiently efficient to be competitive with ethanol produced from corn, a report by the U.S. Department of Energy entitled “Outlook for Biomass Ethanol Production and Demand” indicates that new conversion technologies may be developed in the future. If an efficient method of producing ethanol from cellulose-based biomass is developed, we may not be able to compete effectively. Our facilities are not equipped to convert cellulose-based biomass into ethanol, and to convert our facilities to be able to process cellulose-based ethanol would require significant additional capital investment. If we are unable to produce ethanol as cost-effectively as cellulose-based producers, our ability to generate revenue will be negatively impacted and your common stock could lose value.

Consumer resistance to the use of ethanol based on the belief that ethanol is expensive, adds to air pollution, harms engines or takes more energy to produce than it contributes may affect the demand for ethanol.

Certain individuals believe that the use of ethanol will have a negative impact on gasoline prices at the pump. Some also believe that ethanol adds to air pollution and harms car and truck engines. Still other consumers believe that the process of producing ethanol actually uses more fossil energy, such as oil and natural gas, in relation to the amount of ethanol that is produced and its benefits. These consumer beliefs could potentially be wide-spread. If consumers choose not to buy ethanol, it would affect the demand for the ethanol that we produce and negatively affect our profitability and financial condition.

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The expansion of domestic ethanol production in combination with state bans on MTBE and/or state renewable fuels standards may burden rail and terminal infrastructure, raising the cost of our shipment to blending terminals.

If the volume of ethanol shipments continues to increase and blenders switch from MTBE to ethanol, there may be weaknesses in infrastructure such that our ethanol cannot reach its target markets. Many terminals may need to make infrastructure changes to blend ethanol instead of MTBE. If the blending terminals do not have sufficient capacity or the necessary infrastructure to make the switch, there may be an oversupply of ethanol on the market, which could depress ethanol prices and negatively impact our financial performance. In addition, rail infrastructure may be inadequate to meet the expanding volume of ethanol shipments, which could prevent us from shipping our ethanol to our target markets.

Substantial development of infrastructure will be required for our operations, and the ethanol industry generally, to grow. Areas requiring expansion include, but are not limited to:

There is no assurance that the substantial investments required for these infrastructure changes and expansions will be made or that they will be made on a timely basis. Any delay or failure in making the changes to or expansion of infrastructure could hurt the demand or prices for our products, impede our delivery of products, impose additional costs on us or otherwise have a material adverse effect on our results of operations or financial position. Our business is dependent on the continuing availability of infrastructure and any infrastructure disruptions could have a material adverse effect on our business.

Ethanol can be imported duty free from certain countries into the United States, which may undermine the ethanol industry in the United States.

Ethanol can be imported into the U.S. duty-free from some countries, which may negatively affect the ethanol industry in the U.S. and our operations. Imported ethanol is generally subject to a $0.54 per gallon tariff that was designed to offset the $0.51 per gallon ethanol incentive available under the federal excise tax incentive program for refineries that blend ethanol in their fuel. A special exemption from the tariff exists for ethanol imported from 24 countries in Central America and the Caribbean, which is limited to a total of 7% of the previous year’s U.S. production per year. Imports from the exempted countries may increase as a result of new plants under development there. In addition, reductions in the tariff currently applicable to ethanol imports from countries other than those in Central American and the Caribbean that qualify for the exemption, or increases in the percentage of ethanol that may be imported from Central America and the Caribbean on a duty-free basis, may result in more ethanol from countries having a lower cost of production than the United States being imported into this country. An increase in such imported ethanol could adversely affect the demand for domestically-produced ethanol and the price at which we will be able to sell our ethanol.

Risks Related to Government Regulation

The U.S. ethanol industry is highly dependent upon a myriad of federal and state legislation and regulation, and any changes in legislation or regulation could materially adversely affect our results of operations and financial condition.

The elimination of or significant reduction in federal ethanol tax incentives could have a material adverse effect on our results of operations and financial condition. The cost of production of ethanol is made significantly more competitive with regular gasoline by federal tax incentives. Before January 1, 2005, the federal excise tax incentive program allowed gasoline distributors who blended ethanol with gasoline to receive a federal excise tax

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rate reduction for each blended gallon they sold. If the fuel was blended with 10% ethanol, the refiner/marketer paid [$0.052] per gallon less tax, which equated to an incentive of $0.52 per gallon of ethanol. The $0.52 per gallon incentive for ethanol was reduced to $0.51 per gallon in 2005 and, unless otherwise extended, will expire at the end of 2010. We cannot provide you with any assurance that the federal ethanol tax incentives will be renewed in 2010 or if renewed, on what terms they will be renewed. The elimination or any significant reduction in the federal ethanol tax incentive may have a material adverse effect on our results of operations and financial condition.

The effect of the Renewable Fuels Standard, or RFS, in the recent Energy Policy Act of 2005 is uncertain. The use of fuel oxygenates, including ethanol, was mandated through government regulations, and much of the forecasted growth in demand for ethanol was expected to result from additional mandated use of oxygenates. Most of this growth was projected to occur in the coming months as the remaining markets switch from MTBE to ethanol. The recently enacted Energy Policy Act of 2005, or the Energy Policy Act, however, eliminated the mandated use of oxygenates and established minimum nationwide levels of renewable fuels (“renewable fuel standards” or “RFS” including ethanol, biodiesel or any other liquid fuel produced from biomass or biogas) to be included in gasoline. The Energy Policy Act also included provisions for trading of credits for use of renewable fuels and authorized potential reductions in the RFS minimum by action of a governmental administrator under certain conditions. In addition, the rules for implementation of the RFS and other provisions of the Energy Policy Act are still under development. We can provide no assurance that the favorable ethanol provisions in the Energy Policy Act will not be adversely affected by such regulations or the enactment of additional legislation in the future.

The Energy Policy Act did not include MTBE liability protection sought by refiners, and this has resulted in the accelerated removal of MTBE and sudden increase in the demand for ethanol. No assurance can be given, however, that refineries will maintain using ethanol in favor of other additives, such as iso-octane or alkylate. In addition, the federal oxygenate mandate that had originally prompted the use of MTBE was repealed by the Energy Policy Act. However, some oxygenate mandates remain at the state level. Accordingly, the actual demand for ethanol may increase at a lower rate than production for estimated demand, resulting in excess production capacity in the ethanol industry, which would negatively affect our results of operations, financial position and cash flows.

The Texas Department of Agriculture has established an incentive program called the “Fuel Ethanol and Biodiesel Production Incentive Program” effective as of 2006. Under the program, ethanol and biodiesel producers will contribute [$0.032] per gallon into the program and be entitled to receive a 20 cent per gallon incentive payment for the first 18 million gallons of annual production or a net benefit up to $3,024,000 per producer per year. We are not currently eligible for this program nor have we included any benefits from this program in our financial projections. We intend to apply for registration under this program, but the Texas Department of Agriculture may not register our Texas-based facilities, including our Hereford Facility, or it may terminate the program. Our inability to qualify for this incentive program may make it more difficult to compete with other ethanol production facilities in Texas that are eligible to receive the incentive as well as with production facilities in other states with similar programs. These factors could negatively impact our profitability, causing a reduction in the value of your common stock.

Federal regulations concerning tax incentives could expire or change which could reduce our revenues.

The federal government presently encourages ethanol production by taxing it a lower rate. This currently equates to a $0.51 per gallon subsidy of ethanol. Some states and cities provide additional incentives. The new Energy Policy Act of 2005 effectively mandates increases in the amount of annual ethanol consumption in the United States. The result is that the ethanol industry’s economic structure is highly dependent on government policies. Although current policies are favorable factors, any major change in federal policy, including a decrease in ethanol production incentives, would have significant adverse effects on our proposed plan of operations and cause us to discontinue our ethanol business.

There is disagreement in the scientific community about the wisdom of policies encouraging ethanol production, which could result in changes in governmental policies concerning ethanol.

Some past studies have challenged whether ethanol is an appropriate source of fuel and fuel additives because of concerns about energy efficiency, potential health effects, cost and impact on air quality. Federal energy policy, as set forth in the Energy Policy Act of 2005, strongly supports ethanol production. If a consensus develops that ethanol production does not enhance our overall energy policy, our ability to produce and market ethanol could be materially and adversely affected.

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The cost of compliance and/or non-compliance with extensive environmental laws and regulations could have a material adverse effect on our business.

We will be subject to various federal, state and local environmental laws and regulations, such as 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. We are required to obtain permits that must be renewed from time to time to operate our business. Additionally, compliance with new or amended environmental laws, regulations and/or permits, or new interpretations of such laws, regulations and/or permits, could require us to incur significant expense. Such changes in laws, regulations and/or permits, or increased enforcement by governmental authorities, may have a material adverse effect on our financial condition. These laws, regulations and permits may limit our operations, require us to alter our production process or purchase pollution control equipment, any of which could negatively impact our business. We may not at all times be in complete compliance with these laws, regulations and/or permits and we cannot guarantee that we will be successful in obtaining all permits required to operate our business. A violation of these laws and regulations or permits can result in significant fines, criminal sanctions, permit revocations, damages and/or operational shutdowns.

We may be subject to legal actions brought by third parties for actual or alleged violations of certain of our environmental permits or environmental laws and regulations.

We also may be subject to legal actions from third parties alleging that we have an obligation to remediate or respond to an environmental condition or alleging property damage and/or personal injury resulting from the handling, producing, storing, transporting, and/or using our raw materials and/or products. Ethanol production may produce an odor which may be objectionable to surrounding residents, and may increase dust in the vicinity of the plant due to our operations and the transportation of grain to our facilities and transportation of ethanol and distillers grains from our facilities. Such activities could subject us to nuisance, trespass or similar claims by employees of our facilities or property owners or residents in the vicinity of the plant. The occurrence of events which result in significant personal injury or damage to property or third parties that is not fully covered by insurance could have a material adverse impact on our results of operations and financial condition.

We may be subject to liability for the investigation and cleanup of environmental contamination at our facilities and/or at off-site properties where we arrange for the disposal of hazardous materials. If such materials are disposed of or released at sites that undergo investigation and/or remediation, we may be responsible under environmental laws for all or part of the costs of such 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/or personal injury due to exposure to hazardous or other materials at, on, under or from such properties. Some of these matters may require us to expend significant amounts of money for investigation and/or cleanup or other costs.

Risks Relating to Ownership of our Common Stock Following the Merger

There is no established public trading market for our common stock and we do not know if one will develop. Even if a market does develop, the stock prices in the market may not exceed the value of the Cirracor common stock prior to the merger.

There is no established public trading market for our common stock and our common stock is not currently listed on a national stock exchange. In addition, there are few public companies with substantial ethanol operations that are currently traded in public markets. We cannot predict the extent to which investor interest in our company after the merger will lead to the development of an active trading market, or how liquid that market may become, especially if few stock analysts follow our stock or issue research reports concerning our business or the ethanol industry in general. If an active trading market does not develop, you may have difficulty selling the shares you hold after the merger.

The merger consideration was determined by negotiations among the merger parties and may not be indicative of prices that will prevail in the open market following the merger. Consequently, you may be unable to sell shares of our common stock at prices equal to or greater than the price at which you could sell your Cirracor common stock prior to the merger.

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Our common stock price may be volatile and you may lose all or part of the value of your common stock.

The market price of our common stock could fluctuate significantly, and you may be unable to resell your shares at or above their current value. Those fluctuations could be based on various factors, including:

In addition, in recent years the stock market has experienced significant price and volume fluctuations. These fluctuations may be unrelated to the operating performance of particular companies. These broad market fluctuations may cause declines in the market price of our common stock. The price of our common stock could fluctuate based upon factors that have little or nothing to do with our company after the merger or its performance, and those fluctuations could materially reduce our common stock price.

Our ability to issue additional shares may dilute or otherwise limit your voting or economic rights.

We expect to seek additional equity financing in the future, which may cause dilution to the holders of our common stock, and a reduction in their equity interest. Stockholders do not have any preemptive rights with regard to shares to be issued by us in the future in connection with any such additional equity financing. If we sell additional shares, the sale price of those shares could be higher or lower than the price per share of the Cirracor stock prior to the merger. If we issue additional shares at a lower price, the value of your shares may decrease. Issuances of additional shares may also have the effect of diluting or otherwise limiting your voting or economic rights in the company. Furthermore, we will assume in connection with the merger a stock option pool representing up to 10% of the fully diluted stock of our company after the merger to attract, retain and reward our key directors, managers and employees, which program would be dilutive to all existing stockholders.

Shares eligible for sale after the merger could adversely affect the price of the shares of our common stock.

Following the merger, stockholders will be free to sell shares of our common stock, subject to obtaining necessary corporate authorizations and approvals from securities regulators in relevant jurisdictions. In addition, certain stockholders will have the right to require us to register the resale of their shares. The sale of a significant number of shares by any one or more of our stockholders, or the perception that these sales may occur, could adversely affect the market price of our common stock. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional common or preferred stock.

On June 7, 2006, Panda Ethanol entered into a registration rights agreement with the purchasers of its common stock. This agreement covered the registration of a total of 28,800,000 shares of common stock of Panda Ethanol, which after the merger will become 28,800,000 shares of common stock of the surviving corporation, also covered by the registration rights agreement. The registration rights agreement requires us to register for resale all of these shares by the 75^th calendar day following the effective time of the merger. In the event that we fail to file a registration statement by this date, we will be required to pay to the stockholders that are parties to the agreement partial liquidated damages of 1% of the amount initially invested in Panda Ethanol, with an additional 1% on each monthly anniversary of this date. Under the registration rights agreement, 75% of the Panda Ethanol shares held by Panda Energy will be subject to a six-month lockup period from the effective date of the registration statement. The

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filing of any resale registration statement and the sale of shares thereunder could have a material adverse effect on the market price of our common stock. In addition, simultaneously with the merger, the surviving corporation will execute a registration rights agreement covering all of the shares of its common stock held by Grove Panda.

The stockholders of Panda Ethanol will exert significant influence over us after the completion of the merger. Their interests may not coincide with yours and they may make decisions with which you may disagree.

After the merger, current stockholders of Panda Ethanol will together control up to 96% of our outstanding common stock. As a result, these stockholders, acting individually or together, could control substantially all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or prevent a change in control of our company after the merger and make some transactions more difficult or impossible without the support of these stockholders. The interests of these stockholders may not always coincide with our interests as a company or the interest of other stockholders. Accordingly, these stockholders could cause us to enter into transactions or agreements that you would not approve or make decisions with which you may disagree.

We have not paid dividends in the past and do not expect to pay dividends in the future, and any return on your initial investment in our common stock or that of Panda Ethanol may be limited to the value of our stock.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock after the merger in the foreseeable future. The payment of dividends will depend on our earnings, capital requirements, financial condition, prospects and other factors our board of directors may deem relevant. If we do not pay dividends, our stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

We may be a U.S. real property holding corporation, in which case non-U.S. Holders may be subject to U.S. federal income tax (including withholding tax) in connection with the disposition of our shares, and U.S. Holders selling our shares may be required to certify as to their status in order to avoid withholding.

A non-U.S. Holder of our common stock generally will be subject to U.S. federal income tax with respect to distributions made by us that are treated as dividends for U.S. federal income tax purposes. A non-U.S. Holder of our common stock generally will not be subject to U.S. federal income tax on gain from the sale or other disposition of our common stock. However, a non-U.S. Holder of our common stock will be subject to U.S. federal income tax at regular U.S. tax rates with respect to such sale or other disposition if we are, or have been, a “U.S. real property holding corporation,” within the meaning of the Code, at any time within the five-year period preceding the disposition (or the non-U.S. Holder’s holding period if shorter). Generally, we will be a U.S. real property holding corporation if the fair market value of our U.S. real property interests, equals or exceeds 50% of the sum of the fair market values of our worldwide real property interests and other assets used or held for use in a trade or business, all as determined under applicable Treasury Regulations.

Certain non-U.S. Holders of our common stock may be eligible for an exception to the foregoing rule relating to U.S. real property holding corporations if our common stock is regularly traded on an established securities market during the calendar year in which the sale or disposition occurs and the non-U.S. Holder holds no more than 5% of our outstanding common stock, directly or indirectly, during the relevant period (the “5% exception”). If, however, we are a U.S. real property holding corporation during the relevant time period, and the 5% exception does not apply, the buyer or other transferee of our common stock will generally be required to withhold tax at the rate of 10% on the sales price or other amount realized, unless the transferor furnishes an affidavit certifying that it is not a foreign person in the manner and form specified in the applicable Treasury Regulations.

We believe that neither we nor Panda Ethanol have been or are currently a U.S. real property holding corporation within the meaning of the Code, and we do not expect to become a U.S. real property holding corporation after the merger. However, no assurances can be made in this regard.

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We are a public company and are subject to financial reporting and other requirements, which may put a strain on our accounting, internal audit and other management systems and resources.

We are subject to reporting and other obligations under the Exchange Act, which may include the requirements of Section 404 of the Sarbanes-Oxley Act beginning in 2007. Section 404 would require annual management assessment of the effectiveness of our internal controls over financial reporting and a report by our independent auditors addressing these assessments. Section 404 and all reporting and other obligations under the Exchange Act will place significant demands on our management, administrative, operational, internal audit and accounting resources.

Since Panda Ethanol was a privately held company prior to the merger, we anticipate that we will need to upgrade the systems; implement additional financial and management controls, reporting systems and procedures; implement an internal audit function; and hire additional accounting, internal audit and finance staff in order to prepare Panda Ethanol to comply with the financial reporting and other requirements to which we are or may become subject. If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired. Any failure to maintain effective internal controls could have a material adverse effect on our business, operating results and stock price.

Risks Related to the Merger

Because the market price of our common stock may fluctuate, Cirracor stockholders cannot be sure of the value of the shares to be issued to the stockholders of Panda Ethanol in the merger.

When we complete the merger, the stockholders of Panda Ethanol will receive 28,800,000 shares of our common stock. This number is fixed and will not be adjusted for changes in the market price of our common stock. The merger agreement does not provide for any price-based termination right. Accordingly, the market value of the Cirracor common stock that Panda Ethanol stockholders will be entitled to receive when we complete the merger will depend on the market value of our common stock at the time that we complete the merger and could vary significantly from the market value on the date of this proxy statement or the date of the special meeting. The market value of the Cirracor common stock may also fluctuate after the completion of the merger. See “Market Prices and Dividend Data for Cirracor” on page 34.

These variations could result from changes in the business, operations or prospects of Cirracor and Panda Ethanol prior to or following the merger, regulatory considerations, general market and economic conditions and other factors both within and beyond the control of Cirracor. We may complete the merger a considerable period after the date of the special meeting. As such, at the time of the special meeting, Cirracor stockholders will not know with certainty the value of the common stock that will be issues upon completion of the merger.

Any delay in completing the merger may reduce or eliminate the benefits expected.

The merger is subject to a number of conditions beyond our control that may prevent, delay or otherwise materially adversely affect its completion. We cannot predict whether and when these other conditions will be satisfied. Any delay in satisfying these conditions could delay the completion of the merger for a significant period of time or prevent it from occurring. Any delay in completing the merger could cause us not to realize some or all of the synergies that we expect to achieve if the merger is successfully completed within its expected timeframe. See “The Merger Agreement — Conditions to the Closing of the Merger” beginning on page 51.

Completion of, or the failure to complete, the merger could adversely affect our stock price and future business and operations.

The merger is subject to the satisfaction of various closing conditions, including the approval by both Cirracor and Panda Ethanol stockholders, and there can be no assurance that the merger will be successfully completed. In the event that the merger is not consummated, we will be subject to many risks, including the costs related to the merger, such as legal, accounting and advisory fees, which must be paid even if the merger is not completed. If the merger is not consummated for any reason, the market price of our common stock could decline and/or return to the market prices prior to the announcement of the merger.

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Our common stock is currently quoted on the OTCBB, and we anticipate that the common stock of the surviving company will be quoted on the OTCBB. We cannot predict how the market will react to the merger. Even the successful completion of the merger may negatively affect the stock price of our company after the merger.

The merger agreement contains provisions that could discourage a potential competing merger partner that might provide more value to the Cirracor stockholders than that offered by Panda Ethanol.

The merger agreement contains a “no solicitation” provision that, subject to limited exceptions, restrict our ability to solicit, initiate, execute or encourage competing third-party proposals to enter into a business combination with us. Further, there are only limited exceptions to the agreement of Grove Panda, our controlling stockholder, to vote to approve the merger agreement, the merger, and the related transactions. We describe these provisions under “The Merger Agreement — Limitation on Considering Other Acquisition Proposals” beginning on page 51 and “— Termination of the Merger Agreement” beginning on page 54. These provisions could discourage a potential competing merger partner that might have an interest in consummating a business combination with us that might provide greater value to you than that offered by the merger with Panda Ethanol.

If the merger is terminated and we determine to seek another business combination, we may be unable to negotiate a transaction with another company on terms comparable to, or better than, the terms of the merger.

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THE COMPANIES

Cirracor, Inc.

Cirracor, Inc. has designed and built web sites and web applications. Cirracor has provided web development services to enterprises of varying sizes. Cirracor has aimed to be a single source of web services for businesses by providing custom graphics, advanced technical designs and detailed site maintenance services. Since May 2006, Cirracor’s primary objective has been to complete the merger with Panda Ethanol, and Cirracor has ceased its web design operations. Because Cirracor has limited operations and assets, it may be considered a shell company as defined in Rule 12b-2 of the Exchange Act.

In the event that the merger is consummated, Cirracor anticipates that it will be engaged exclusively in the projected business of Panda Ethanol.

Cirracor’s principal executive offices are located at 3375 Toopal Drive, Suite 101, Oceanside, California 92054. Cirracor’s telephone number is (760) 277-1505. Cirracor’s website is located at www.cirracor.com. Additional information regarding Cirracor is contained in its filings with the Securities and Exchange Commission. See “Where You Can Find More Information” beginning on page 102, and under “Other Information Related to Cirracor” beginning on page 63 and elsewhere in this proxy statement.

Panda Ethanol, Inc.

Panda Ethanol, Inc. is headquartered in Dallas, Texas. Panda Ethanol is currently developing fuel ethanol plants and biomass facilities in the United States. Panda Ethanol anticipates that its ethanol facilities will operate on a continuous basis and, where available, will utilize biomass energy technology as a fuel source. Panda Ethanol is currently developing ethanol production facilities in Hereford, Texas, Haskell, Kansas and Yuma, Colorado. Panda Ethanol estimates that the Hereford facility will be completed sometime in the fourth quarter of 2007, and that the Haskell and Yuma facilities will be completed in the second quarter of 2008.

The facility in Hereford, Texas will be constructed on a 383-acre site and is expected to produce approximately 105 million gallons of denatured ethanol per year. Panda Ethanol has received air permits for the Hereford facility and began construction in August 2006. On June 7, 2006, Panda Ethanol closed a private placement for total gross proceeds of approximately $90.0 million. On July 28, 2006, a wholly-owned subsidiary of Panda Ethanol entered into project level debt financings aggregating approximately $188.1 million.

The Haskell, Kansas and the Yuma, Colorado facilities are also designed to each produce approximately 105 million gallons of denatured ethanol per year. Panda Ethanol has received air permits for the Haskell project and has applied for a waste water discharge permit. After receipt of the waste water discharge permit, Panda Ethanol plans to proceed with financing and construction of the Haskell facility. Panda Ethanol is in the process of obtaining an air permit for the Yuma project and expects that the air permit will be issued in September 2006, after which Panda Ethanol will proceed with financing and construction.

Panda Energy, Panda Ethanol’s founder and largest stockholder, has 25 years experience as a company with a team of professionals that has developed, financed, constructed, owned and operated power generation facilities and other large scale, energy-related projects. Panda Ethanol believes it is well-positioned to benefit from Panda Energy’s experience, relationships and experienced management team and employee base.

Panda Ethanol’s principal executive offices are located at 4100 Spring Valley, Suite 1001, Dallas, Texas 75244. Panda Ethanol’s telephone number is (972) 980-7159.

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MARKET PRICES AND DIVIDEND DATA FOR CIRRACOR

Cirracor’s common stock is available for quotation on the OTCBB under the trading symbol “CIRC.OB.” The OTCBB is an electronic quotation medium for securities that are not listed on a national securities exchange such as the American Stock Exchange or the New York Stock Exchange. The market for such securities is extremely limited and the prices quoted are not a reliable indication of the value of the Cirracor common stock. As of August 31, 2006, the Cirracor common stock has never been traded. Accordingly, we have not included a table setting forth the historical market prices for Cirracor’s common stock.

Since it has never been traded, there was no closing price per share of the Cirracor common stock on May 17, 2006, the last full trading day before the public announcement of the merger, or on                  , 2006, the latest practicable trading day before the printing of this proxy statement.

As of August 31, 2006, 3,520,250 shares of Cirracor common stock were issued and outstanding held by ten record holders of Cirracor common stock. The only shareholders of Cirracor who hold 5% or more of Cirracor’s stock are Grove Panda Investments, LLC, who will own 2.84% of the shares outstanding after the merger. None of Cirracor’s officers or directors own or to our knowledge, will own any of Cirracor’s stock. Cirracor has no commitments to issue, nor does it expect to issue, any shares to any of its current 5% holders, officers or directors.

Following the merger, we anticipate that Cirracor’s common stock will be quoted on the OTCBB.

There have been no cash dividends declared on the Cirracor common stock. Dividends are declared at the sole discretion of Cirracor’s board of directors. Each holder of Cirracor common stock is entitled to a pro rata share of cash distributions made to stockholders, including dividend payments. The holders of Cirracor common stock are entitled to receive dividends when, as and if declared by Cirracor’s board of directors from funds legally available therefore. Cash dividends are at the sole discretion of its board of directors. In the event of Cirracor’s liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment of Cirracor’s liabilities and after provision has been made for each class of stock, if any, having any preference in relation to Cirracor’s common stock. Cirracor and, after the merger, the surviving company intend to reinvest earnings to fund future growth. Accordingly, we do not anticipate that cash dividends will be paid on the Cirracor common stock in the foreseeable future.

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THE SPECIAL MEETING

The enclosed proxy is solicited on behalf of the board of directors of Cirracor for use at the special meeting of stockholders or at any adjournment or postponement thereof.

Date, Time and Place

We will hold the special meeting on                  , 2006, at          [a.m.][p.m.], Newport Beach, California Time, at the office of M2 Law Professional Corporation, 500 Newport Center Drive, Suite 800, Newport Beach, California 92660.

Purpose of the Special Meeting

At the special meeting, we will ask the stockholders of our common stock to adopt the merger agreement, approve the reverse stock split, and approve the Amended and Restated Articles of Incorporation and, if there are not sufficient votes in favor of the adoption of the merger agreement, the approval of the reverse stock split or the approval of the Amended and Restated Articles of Incorporation, to adjourn or postpone the special meeting to a later date to solicit additional proxies in favor of adoption of the merger agreement, the reverse stock split and the Amended and Restated Articles of Incorporation.

Record Date; Shares Entitled to Vote; Quorum

Only holders of record of Cirracor common stock at the close of business on                  , 2006, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting. On the record date, 3,520,250 shares of Cirracor common stock were issued and outstanding and held by approximately ten holders of record. Holders of record of Cirracor common stock on the record date are entitled to one vote per share at the special meeting on the proposal to adopt the merger agreement, the proposal to approve the reverse stock split, the proposal to approve the Amended and Restated Articles of Incorporation and the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies in favor of adoption of the merger agreement, approval of the reverse stock split and approval of the Amended and Restated Articles of Incorporation.

A quorum of stockholders is necessary to hold a valid special meeting. Under Cirracor’s amended and restated bylaws, a quorum is present at the special meeting if a majority of the shares of Cirracor common stock entitled to vote on the record date are present, in person or represented by proxy. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or postponed to solicit additional proxies. For purposes of determining the presence or absence of a quorum, votes withheld, abstentions and “broker non-votes” (where a broker or nominee does not or cannot exercise discretionary authority to vote on a matter) will be counted as present.

Vote Required

The adoption of the merger agreement, the approval of the reverse stock split and the approval of the Amended and Restated Articles of Incorporation each require the affirmative vote of the holders of at least a majority of the shares of Cirracor common stock entitled to vote at the special meeting. Adoption of the merger agreement is a condition to the closing of the merger. Adoption of the merger proposal is conditioned on the adoption of the reverse stock split and the approval of the Amended and Restated Articles of Incorporation. Furthermore, the reverse stock split and the proposal to approve the Amended and Restated Articles of Incorporation will not be presented to the meeting unless the merger proposal is approved. If a Cirracor stockholder abstains from voting or does not vote, either in person or represented by proxy, it will count as a vote “AGAINST” the adoption of the merger agreement, the approval of the reverse stock split and the approval of the Amended and Restated Articles of Incorporation. Each “broker non-vote” will also count as a vote “AGAINST” the adoption of the merger agreement, the approval of the reverse stock split and the approval of the Amended and Restated Articles of Incorporation. Brokers holding stock for the accounts of their clients who have not given them specific voting instructions are not allowed to vote client proxies on the proposal to adopt the merger agreement, approve the reverse stock split or approve the Amended and Restated Articles of Incorporation.

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Approval of any proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies in favor of adoption of the merger agreement, the reverse stock split and the Amended and Restated Articles of Incorporation requires the affirmative vote of at least a majority of the votes cast by holders of Cirracor common stock present, in person or represented by proxy, at the special meeting provided a quorum is present, in person or represented by proxy, at the special meeting. Abstentions and “broker non-votes” will not be counted as votes cast and will not have an effect on the outcome of this proposal.

Voting of Proxies

If your shares are registered in your name, you may vote by returning a signed proxy card or voting in person at the special meeting.

If you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the special meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the special meeting in person.

Voting instructions are included on your proxy card. All shares represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted “FOR” the adoption of the merger proposal, “FOR” the reverse stock split proposal, “FOR” the charter amendment proposal, at the special meeting and “FOR” the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies in favor of adoption of the merger agreement.

If your shares are held in “street name” through a broker or bank, you may vote by completing and returning the voting form provided by your broker or bank or via the Internet or telephone if your broker or bank provides such a service. To vote via the Internet or telephone through your broker or bank, you should follow the instructions on the voting form provided by your broker or bank. If you plan to attend the special meeting, you will need a proxy from your broker or bank in order to vote the shares. If you do not return your bank’s or broker’s voting form, vote via the Internet or telephone through your broker or bank, if possible, or attend the special meeting and vote in person with a proxy from your broker or bank, it will have the same effect as if you voted “AGAINST” adoption of the merger agreement, the approval of the reverse stock split, the approval of the Amended and Restated Articles of Incorporation.

Revocability of Proxies

Any proxy you give pursuant to this solicitation may be revoked by you at any time before it is voted at the special meeting. If your shares are registered in your name, you may revoke your proxy in one of the three following ways:

First, you can deliver a written notice to the Secretary of Cirracor bearing a date later than the proxy you delivered to Cirracor stating that you would like to revoke your proxy, provided the notice is received by [a.m.] [p.m.] Newport Beach, California Time on                  , 2006.

Second, you can complete, execute and deliver to the Secretary of Cirracor a new, later-dated proxy card for the same shares.

Third, you can attend the special meeting and vote in person. Your attendance at the special meeting alone will not revoke your proxy. Any written notice of revocation or subsequent proxy should be delivered to Cirracor, Inc., 3375 Toopal Drive, Suite 101, Oceanside, California 92054, Attention: Secretary, or hand-delivered to Cirracor’s Secretary at or before the taking of the vote at the special meeting.

If you have instructed a broker or bank to vote your shares, you must follow directions received from your broker or bank to change your vote.

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Board of Directors’ Recommendations

At a meeting held on May 18, 2006, after careful consideration, Cirracor’s board of directors unanimously approved and declared advisable the merger agreement and the terms and conditions of the merger, including the reverse stock split and the Amended and Restated Articles of Incorporation, and determined that the merger agreement and the terms and conditions of the merger, including the reverse stock split and the Amended and Restated Articles of Incorporation, are fair to, advisable and in the best interests of Cirracor and its stockholders. Cirracor’s board of directors unanimously recommends that Cirracor stockholders vote “FOR” the proposal to adopt the merger agreement, also unanimously recommends that stockholders vote “FOR” the proposal to approve the reverse stock split, also unanimously recommends that stockholders vote “FOR” the approval of the Amended and Restated Articles of Incorporation at the special meeting and also unanimously recommends that stockholders vote “FOR” the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to permit the solicitation of additional proxies in favor of adoption of the merger agreement, the reverse stock split and the Amended and Restated Articles of Incorporation.

Voting by Cirracor Directors and Executive Officers

As of the record date for the special meeting, the directors and executive officers of Cirracor as a group beneficially owned and were not entitled to vote any shares of Cirracor common stock, or to exercise any of the aggregate voting power for all outstanding shares of Cirracor common stock on that date.

Voting by Controlling Stockholder

As of the record date for the special meeting, Grove Panda beneficially owned and was entitled to vote 2,749,250 shares of Cirracor common stock, or 78% of the aggregate voting power for all outstanding shares of Cirracor common stock on that date. Pursuant to the merger agreement, Grove Panda has agreed that it will vote all of its Cirracor common stock in favor of the reverse stock split, the merger agreement, the merger and the transactions contemplated thereby. Grove Panda has indicated its present intention to vote, or cause to be voted, the shares of Cirracor common stock owned by it “FOR” the adoption of the merger agreement, “FOR” the proposal to approve the reverse stock split, and “FOR” the proposal to approve the Amended and Restated Articles of Incorporation.

Abstentions and Broker Non-Votes

Stockholders that abstain from voting on a particular matter and shares held in “street name” by brokers or nominees who indicate on their proxies that they do not have discretionary authority to vote such shares as to a particular matter will not be counted as votes in favor of such matter, but will be counted to determine whether a quorum is present at the special meeting and will be counted as voting power present at the special meeting. Abstentions and broker non-votes will have the effect of a vote “AGAINST” the proposal to adopt the merger agreement, “AGAINST” the proposal to approve the reverse stock split, and “AGAINST” the Amended and Restated Articles of Incorporation because adoption of these proposals requires the affirmative vote of a majority of all outstanding shares of our common stock. For the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies, abstentions and broker non-votes will have no effect on the outcome of the proposal.

Solicitation of Proxies

The expense of soliciting proxies will be borne by Cirracor. In addition, Cirracor may reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares for their expenses in forwarding soliciting materials to such beneficial owners. Proxies may also be solicited by certain of Cirracor’s directors, officers and employees personally or by telephone, facsimile or other means of communication. No additional compensation will be paid for such services.

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Multiple Stockholders Sharing One Address

In accordance with Rule 14a-3(e)(1) under the Securities Exchange Act of 1934, as amended, one proxy statement may be delivered to two or more stockholders who share an address, unless we have received contrary instructions from one or more of the stockholders. Cirracor will deliver promptly upon written or oral request a separate copy of the proxy statement to a stockholder at a shared address to which a single copy of the proxy statement was delivered. Requests for additional copies of the proxy statement, and requests that in the future separate proxy statements be sent to stockholders who share an address, should be directed to our Secretary, Cirracor, Inc., 3375 Toopal Drive, Suite 101, Oceanside, California 92054, or at telephone number (760) 277-1505. In addition, stockholders who share a single address but receive multiple copies of the proxy statement may request that in the future they receive a single copy by contacting Cirracor at the address and phone number set forth in the prior sentence.

Postponement or Adjournment of Meeting

Although it is not expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies or if a quorum is not present. Cirracor’s bylaws permit adjournment without notice other than an announcement of the new time and place of the re-convened special meeting as required by law by a majority vote of the shares entitled to vote at the special meeting that are present in person or represented by proxy and vote for or against the adjournment. In the event that there are insufficient shares represented in person or by proxy at the special meeting to constitute a quorum required for conduct of business at the special meeting, or to solicit additional proxies, the special meeting may be postponed or adjourned one or more times until a quorum is present or represented by proxy, or sufficient proxies have been solicited to adopt the merger agreement, the reverse stock split, the Amended and Restated Articles of Incorporation.

Stockholder List

A list of Cirracor stockholders entitled to vote at the special meeting will be available for examination by any Cirracor stockholder at the special meeting. For a period commencing no later than two business days after mailing of this notice and ending no earlier than the date and time of the special meeting, this stockholder list will be available for inspection during ordinary business hours at Cirracor’s principal executive offices located at 3375 Toopal Drive, Suite 101, Oceanside, California 92054.

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THE MERGER

The following discussion summarizes the material terms of the merger. We urge you to read carefully the merger agreement, which is attached as Annex A to this proxy statement.

Background to the Merger

The terms of the merger agreement are the result of arm’s length negotiations between representatives of Cirracor and Panda Ethanol. The following is a brief discussion of the background of these negotiations, the merger agreement and related transactions.

Cirracor was formed on October 12, 2001 to provide website development services. In May 2003, Cirracor’s registration statement on Form SB-2 was declared effective by the SEC, which registered 1,250,000 shares of Cirracor common stock to be offered in a public offering along with 693,750 shares of common stock held by Cirracor stockholders. Pursuant to the registration statement, Cirracor issued 36,500 shares of common stock at $0.20 per share for proceeds of $7,300 during August 2003, and 270,000 shares of common stock at $0.20 per share for proceeds of $54,000 during December 2003.

In early 2006, Panda Energy decided it wanted to explore the possibility of taking its ethanol related activities public in an effort to take advantage of strong valuations of ethanol companies in the public market at that time and to access equity financing to grow its ethanol business. The idea of going public via a reverse merger arose from conversations between Energy Capital Solutions, LP, or ECS, and finance personnel at Panda Energy. The finance staff at Panda Energy undertook the task of familiarizing themselves with the reverse merger process subsequent to initial conversations between ECS and Panda Energy. ECS contacted Bonanza Capital, Ltd., or Bonanza, who in turn contacted Grove Street regarding a reverse merger and subsequent meetings and conversations amongst the parties ensued. Bonanza and ECS provided guidance on a possible valuation for Panda Energy’s ethanol interests and Panda Energy decided to move forward with the reverse merger concept at the same time as it pursued alternatives for financing various ethanol activities it was pursuing. An engagement letter was signed on April 18, 2006 between Panda Ethanol Holdings, LLC and ECS for ECS to act as Panda Ethanol Holdings, LLC ‘s financial advisor pursuant to a potential reverse merger and equity offering. Panda Ethanol Holdings, LLC became a part of Panda Ethanol in May 2006 when Panda Energy incorporated Panda Ethanol and transferred to Panda Ethanol all of its ethanol interests and activities.

At a meeting with Panda Energy in early 2006, Grove Street and Bonanza suggested that Panda Energy pursue a private placement of equity by an ethanol subsidiary in combination with a merger or acquisition of a U.S. public company that had limited operations and a small number of stockholders. Subsequent to this meeting, Grove Street suggested a merger with Cirracor, Inc., a web based design company with which Panda Energy had had no prior contact.

On March 21, 2006, Grove Street initially approached Cirracor’s officers and sole director regarding a potential merger between Cirracor and an ethanol subsidiary of Panda Energy, which would be consummated after the anticipated equity offering by the ethanol subsidiary. In its Quarterly Report on Form 10-QSB for the quarter ended March 31, 2006, Cirracor announced that, while it would continue to market its services, its primary objective was to acquire or merge with an established company with already-established product lines.

Throughout April, the parties discussed with Cirracor’s officers and sole director the terms of the potential merger and equity offering. On May 12, 2006, Grove Panda, an entity formed by Grove Street and managed by Peter G. Geddes, purchased 2,500,000 shares of Cirracor common stock, or 71% of the aggregate voting power of all outstanding shares of Cirracor common stock on that date, from Sean Connelly.

In late April and early May, negotiations continued over the terms of the merger agreement and the equity offering. During this time, Panda Energy and ECS proceeded to locate investors interested in participating in the equity offering.

On May 18, 2006, the sole director of Cirracor reviewed and approved the final terms of the merger agreement and related documents. No consideration was given to securing an opinion of an independent investment

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banker or other financial advisor to the effect that the merger would be fair, from a financial point of view, to the Cirracor stockholders, in light of the fact that the sole director believed the transaction to be fair and that the terms of the merger did not give rise to any inherent conflict of interest between Cirracor’s management, directors, principal and other stockholders. In reviewing the fairness of the merger agreement, the sole director took into account the factors discussed under “— Reasons for the Merger and Recommendation of the Cirracor Board of Directors” beginning on page 40. The merger agreement was signed on May 18, 2006. On May 24, 2006, Cirracor filed a Form 8-K announcing the execution of the merger agreement and describing its terms.

On June 7, 2006 the sole director approved an amendment to the merger agreement to allow Panda Ethanol to issue to institutional or accredited investors approximately $90,000,000 of common stock at a price of $6.01 per share in order to complete its private equity offering. The amendment also provided that, effective immediately after the effective time of the merger and for a period of 24 months thereafter, no more than 10% of the shares of the surviving company outstanding on a fully diluted basis as of the effective time of the merger may be reserved for grant or issuance under any stock option plans. The merger agreement was amended on June 7, 2006. On June 13, 2006, Cirracor filed a Form 8-K announcing the execution of the amendment and describing its terms.

Panda Ethanol completed the private placement of $90 million of common equity on June 7, 2006, with ECS’s assistance.

Reasons for the Merger and Recommendation of the Cirracor Board of Directors

Panda Ethanol is currently developing fuel ethanol plants and biomass facilities in the United States. Cirracor believes that a business combination with Panda Ethanol will provide Cirracor stockholders with an opportunity to participate in a company with growth potential in the ethanol industry.

In making its recommendation, Cirracor’s board of directors took into account, among other things, the business, competitive position, strategy and prospects of Panda Ethanol, the fairness of the merger, from a financial point of view, to the holders of Cirracor common stock, and the terms and conditions of the merger agreement.

Interests of Cirracor’s Executive Officers and Directors in the Merger

Cirracor’s executive officers and directors do not have any independent interests in the merger.

Form of the Merger

Subject to the terms and conditions of the merger agreement and in accordance with Nevada law, at the effective time of the merger, Panda Ethanol, Inc. will merge with and into Cirracor and Cirracor will survive the merger.

Merger Consideration

At the effective time of the merger, each outstanding share of common stock of Panda Ethanol (other than treasury shares, shares held by Panda Ethanol or any direct or indirect wholly-owned subsidiary of Panda Ethanol or Cirracor and shares held by stockholders who perfect their dissenters’ rights) will be converted into the right to receive one share of Cirracor common stock. Treasury shares and shares held by Panda Ethanol or any direct or indirect wholly-owned subsidiary of Panda Ethanol or Cirracor will be cancelled immediately prior to the effective time of the merger. As of the effective time of the merger, all shares of Panda Ethanol common stock will no longer be outstanding and will automatically be cancelled and will cease to exist, and each holder of a certificate representing any shares of Panda Ethanol common stock (other than stockholders of Panda Ethanol who have perfected their dissenters’ rights under Delaware law) will cease to have any rights as a stockholder, except the right to receive one share of Cirracor common stock per share of Panda Ethanol common stock. The conversion ratio of one share of Cirracor common stock (post reverse stock split) per share of Panda Ethanol common stock was determined through arm’s-length negotiations between Panda Ethanol and Cirracor.

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Effective Time of the Merger

The merger will become effective upon the later of the time of filing of articles of merger with the Secretary of State of the State of Nevada and a certificate of merger with the Secretary of State of the State of Delaware, or such later time as the parties agree should be specified in the articles of merger and the certificate of merger. The closing of the merger will take place at 10:00 a.m. central time on the business day after the satisfaction or waiver of each of the conditions to the closing set forth in the merger agreement and as described in this proxy statement, or on such other date as the parties may agree. We currently anticipate the merger to be completed by January 5, 2007.

Material United States Federal Income Tax Consequences of the Merger

The following is a summary of the material U.S. federal income tax consequences of the merger to Cirracor, Panda Ethanol and to stockholders who hold their Cirracor stock as a capital asset within the meaning of Section 1221 of the Code. This summary is based on the Code, the Treasury Regulations promulgated thereunder, published statements by the IRS and other applicable authorities in effect, as of the date of this proxy statement, all of which are subject to change, possibly with retroactive effect. We have not and will not request a ruling from the Internal Revenue Service (“IRS”) as to the U.S. federal income tax consequences of the merger, and the following summary is not binding on the IRS or the courts. This summary does not address the tax consequences to holders that are subject to special tax rules, such as banks, insurance companies, regulated investment companies, personal holding companies, partnerships and other pass-through entities, broker-dealers and tax-exempt entities. Further, it does not address the tax consequences of the merger under the alternative minimum tax provisions of the Code, state, local and foreign laws, or under U.S. federal tax law other than income tax law. This summary also assumes that the shares of common stock held immediately prior to the effective time of the merger were, and the new shares received will be, held as a “capital asset,” as defined in the Code (generally, property held for investment).

Cirracor stockholders are strongly urged to consult their tax advisors as to the specific tax consequences to them of the merger, including any applicable federal, state, local and foreign tax consequences.

Consequences to U.S. Holders of Cirracor Common Stock

General

Cirracor and Panda Ethanol have structured the merger to qualify as a reorganization within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes.

For purposes of this proxy statement, a “U.S. Holder” is:

If a partnership holds Cirracor stock, the tax treatment of a partner in such partnership will generally depend on the status of the partners and the activities of the partnership. A partner in a partnership holding Cirracor stock should consult its tax advisor.

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As a result of the merger constituting a reorganization within the meaning of Section 368(a) of the Code:

Exercise of Dissenters’ Rights

A dissenting U.S. Holder of Cirracor common stock who perfects appraisal rights will recognize gain or loss with respect to his or its shares of Cirracor stock equal to the difference between the amount of cash received and his or its basis in such shares. Such gain or loss will generally be long term capital gain or loss, provided the shares were held for more than one year prior to the disposition of the shares. Interest, if any, awarded in an appraisal proceeding by a court will be included in such stockholder’s income as ordinary income.

Backup Withholding and Information Reporting

Non-corporate U.S. Holders of Cirracor stock may be subject to information reporting and a backup withholding tax, currently at a rate of 28%, on any cash payments received on perfecting dissenters’ rights. You can generally avoid this backup withholding by properly executing under penalties of perjury an IRS Form W-9 or substantially similar form that provides:

Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against your U.S. federal income tax liability, provided you furnish the required information to the IRS.

Consequences to Non-U.S. Holders of Cirracor Common Stock

General

As used herein, a “non-U.S. Holder” is a person or holder other than a partnership or a “U.S. Holder,” as defined above.

As a result of the merger, non-U.S. Holders will not recognize gain or loss. Moreover, non-U.S. Holders of Cirracor common stock generally will be treated the same as U.S. Holders upon consummation of the merger, see “U.S. Federal Income Tax Consequences to U.S. Holders of Cirracor Common Stock — General.”

Exercise of Dissenters’ Rights

A non-U.S. Holder who exercises his or its dissenters’ rights generally will not be subject to U.S. federal income tax or withholding tax on any gain realized on the exchange unless (i) the gain is effectively connected with

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the conduct by the non-U.S. Holder of a trade or business in the United States and, if an income tax treaty applies, is attributable to a permanent establishment maintained by the non-U.S. Holder in the United States or (ii) the non-U.S. Holder is an individual who is present in the United States for periods aggregating 183 or more days in the taxable year of exercising the rights and certain other conditions are met. Interest, if any, awarded in an appraisal proceeding by a court generally will be subject U.S. federal income tax laws and subject to the 30% withholding tax, unless reduced by an applicable treaty.

Backup Withholding and Information Reporting

Following the merger, Cirracor must report to the IRS and to each non-U.S. Holder any cash payments received by such non-U.S. Holder upon perfecting dissenters’ rights. These information reporting requirements apply even if withholding was not required because of a treaty or Code exception. Copies of the information returns reporting those proceeds may also be made available to the tax authorities in the country in which the non-U.S. Holder is a resident under the provisions of an applicable income tax treaty or agreement. A non-U.S. Holder generally will not be subject to additional information reporting or to backup withholding at a rate of 28% with respect to any cash payments received upon perfecting dissenters’ rights if, either: (i) the non-U.S. Holder certifies under penalties of perjury on IRS Form W-8BEN or a suitable substitute form that he or it is not a “U.S. person,” as defined in the Code, and provides his or its name and address; or (ii) a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business and holds shares of Cirracor common stock on behalf of the non-U.S. Holder certifies under penalties of perjury that such a statement has been received from the non-U.S. Holder and furnishes a copy to Cirracor.

A non-U.S. Holder may obtain a refund or a credit against such non-U.S. Holder’s U.S. federal income tax liability of any amounts withheld under the backup withholding rules provided the required information is furnished to the IRS in a timely manner.

Non-U.S. Holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules in their particular situations, the availability of an exemption therefrom, and the procedure for obtaining such an exemption, if available.

U.S. Federal Income Tax Consequences to Cirracor and Panda Ethanol

Because the merger is being structured to qualify as a reorganization within the meaning of Code Section 368(a), neither Cirracor nor Panda Ethanol will recognize gain or loss as a result of the merger. However, given the percentage of Cirracor common stock to be held by the stockholders of Panda Ethanol immediately after the merger, Cirracor will be treated as undergoing an ownership change, within the meaning of Code Section 382 and its ability to utilize any of its net operating losses, or NOLs, arising prior to the merger will be significantly limited under Code Section 382. NOLs of Panda Ethanol will be inherited by Cirracor as a result of the merger but will not be limited under Code Section 382 as a result of the merger. Thus, Cirracor will be able to utilize any NOLs of Panda Ethanol arising prior to the merger that have not yet been taken into account.

Tax Return Reporting Requirements

Each of Cirracor and Panda Ethanol will be required to retain records pertaining to the merger and will be required to file with their respective U.S. federal income tax returns for the year in which the merger takes place a statement setting forth certain facts relating to the merger as provided in Treasury Regulations Section 1.368-3(a).

THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS FOR GENERAL INFORMATION ONLY AND IS BASED ON THE LAW IN EFFECT ON THE DATE HEREOF. THE HOLDERS OF CIRRACOR COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE MERGER.

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Circular 230 Tax Disclosures

TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, YOU ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS OFFER TO PURCHASE IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH CIRRACOR’S PROMOTION OR MARKETING OF THE MATTERS ADDRESSED HEREIN; AND (C) HOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

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DISSENTERS’ RIGHTS FOR CIRRACOR STOCKHOLDERS

Under Chapter 92A of the Nevada Revised Statutes, or NRS, stockholders of Cirracor that do not consent to the merger have the right to dissent from the merger and obtain cash payment for the “fair value” of their shares, which is defined as the value of the shares immediately before the effectuation of the merger. The text of the statute is set forth as Annex B of this proxy statement and Cirracor will require strict compliance with all statutory procedures in order for stockholders to perfect their rights.

The following is a brief summary of the material statutory procedures required by Chapter 92A of the NRS to be followed by a stockholder in order to dissent from the merger and perfect his or her dissenters’ rights. This summary is not intended to be a complete statement of all applicable requirements and is qualified in its entirety by reference to Chapter 92A of the NRS. If you wish to consider exercising your dissenters’ rights, you should carefully review the text of Chapter 92A of the NRS contained in Annex B because failure to timely and properly comply with the requirements of the statute may result in waiver of your dissenters’ rights under Nevada law.

If you, as a Cirracor stockholder, wish to exercise your right to dissent, you must:

Failure to vote against the merger will not constitute a waiver of dissenter’s rights. A vote against the merger is not deemed to satisfy the written notice requirement. If you satisfy the above conditions, Cirracor will send you a written dissenter’s notice within 10 days after the merger is effective. This dissenter’s notice shall:

After receipt of the dissenter’s notice, if you still wish to exercise your dissenters’ rights, you must:

Failure to demand payment in the proper form or deposit certificates as described in the dissenter’s notice will terminate your rights to receive payment for your shares pursuant to the NRS. Your rights as a stockholder will continue until those rights are cancelled or modified by the completion of the merger.

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Within 30 days after receiving your properly executed payment demand, Cirracor will pay you what it determines to be the fair value of your shares, plus accrued interest computed from the effective date of the merger until the date of payment. The payment shall be accompanied by:

Cirracor may elect to withhold payment if you became the beneficial owner of the shares on or after the date set forth in the dissenter’s notice. If Cirracor withholds payment, after the consummation of the merger, Cirracor will estimate the fair value of the shares, plus accrued interest, and offer to pay this amount to you in full satisfaction of your demand. This offer will contain a statement of Cirracor’s estimate of the fair value, an explanation of how the interest was calculated, and a statement of dissenters’ rights to demand payment under NRS Section 92A.480.

If you believe that the amount Cirracor pays in exchange for your dissenting shares is less than the fair value of your shares or that the interest has not been correctly determined, you can demand payment of the difference between your estimate and Cirracor’s offer. You must make such demand within 30 days after Cirracor has made or offered payment; otherwise, your right to challenge calculation of fair value terminates. If there is still disagreement about the fair market value within 60 days after Cirracor receives your demand, Cirracor will petition to the local district court in Nevada to determine the fair value of the shares and the accrued interest. If Cirracor does not commence such legal action with the 60-day period, Cirracor shall pay the amount demanded for all unsettled demands. All dissenters whose demands remain unsettled will be made parties to the proceeding, and are entitled to a judgment for either:

Cirracor will pay the costs and expenses of the court proceeding, unless the court finds the dissenters acted arbitrarily, vexatiously or in bad faith, in which case the costs will be equitably distributed. Attorney fees will be awarded as the court considers equitable.

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THE MERGER AGREEMENT

The following summary describes certain material provisions of the merger agreement. This summary is not complete and is qualified in its entirety by reference to the complete text of the merger agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. We urge you to read carefully the merger agreement in its entirety because this summary may not contain all the information about the merger agreement that is important to you.

The merger agreement has been included to provide you with information regarding its terms and conditions. It is not intended to provide any other factual information about Cirracor or its business or Panda Ethanol or its business. Accordingly, the representations and warranties and other provisions of the merger agreement should not be read alone, and you should read the information found elsewhere in this document and in the other public filings Cirracor makes with the SEC, which are available, without charge, at http://www.sec.gov.

The representations and warranties described below and included in the merger agreement were made by Cirracor and Grove Panda to Panda Ethanol and by Panda Ethanol to Cirracor and Grove Panda. These representations and warranties were made as of specific dates and are in some cases subject to important schedules, qualifications, limitations and supplemental information agreed to by Cirracor, Grove Panda and Panda Ethanol in connection with negotiating the terms of the merger agreement. In addition, the representations and warranties may have been included in the merger agreement for the purpose of allocating risk between Cirracor and Grove Panda on the one hand and Panda Ethanol on the other, rather than to establish matters as facts.

Closing and Effective Time of the Merger

The closing of the merger will take place at 10:00 a.m. central time on the business day after the satisfaction or waiver of each of the conditions to closing set forth in the merger agreement (or as soon as practicable thereafter), or on such other date as Cirracor, Grove Panda and Panda Ethanol may agree. The merger will become effective upon the later of the time of filing of articles of merger with the Secretary of State of the State of Nevada and a certificate of merger with the Secretary of State of the State of Delaware, or such later time as the parties agree should be specified in the articles of merger and the certificate of merger.

Exchange of Shares; Procedures for Exchange of Certificates

Prior to the effective time of the merger, Cirracor will effect a reverse stock split whereby each share of Cirracor stock then outstanding shall be converted into 0.340885 of a share of Cirracor stock. After completion of the reverse stock split, each share of Cirracor stock issued and outstanding immediately prior to the effective time of the merger shall remain one share of the stock of the surviving corporation amounting in the aggregate to 1,200,000 shares, and all such shares taken together shall represent four percent (4%) of the issued and outstanding stock of the surviving corporation. Please see the section entitled “Other Proposals — Reverse Stock Split Proposal — Procedure for Effecting a Reverse Stock Split and Exchange of Stock Certificates” for a discussion of the procedures for exchanging Cirracor stock certificates in connection with the reverse stock split.

As of the effective time of the merger, all shares of Panda Ethanol’s stock issued and outstanding immediately prior to the effective time of the merger shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such shares of Panda Ethanol’s stock shall cease to have any rights with respect thereto, except the right to receive certificates representing the applicable merger consideration to be issued in consideration therefore upon surrender of such certificates and the right of holders of dissenting shares to receive payment for their dissenting shares.

As soon as reasonably practicable after the effective time of the merger, the exchange agent shall mail to each holder of record of Panda Ethanol stock a letter of transmittal, with instructions for use in surrendering Panda Ethanol stock for stock in the surviving corporation. Upon surrender of a certificate representing Panda Ethanol stock for cancellation to the exchange agent, together with such letter of transmittal, duly completed and validly executed, and such other documents as may reasonably be required by the exchange agent, the holder of such

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certificate of Panda Ethanol stock will be entitled to receive in exchange therefor that number of whole shares of stock in the surviving corporation, and the certificate of Panda Ethanol stock so surrendered will be canceled. No fractional shares of stock in the surviving corporation will be issued in the merger.

In the event of a transfer of ownership of stock that is not registered in Panda Ethanol’s transfer records, a certificate evidencing the proper number of shares of the surviving corporation may be issued in exchange therefor to a person other than the person in whose name the certificate so surrendered is registered if such certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such issuance shall pay any transfer or other taxes required by reason of the issuance of shares of stock in the surviving corporation to a person other than the registered holder of such certificate or establish to the satisfaction of the surviving corporation that such tax has been paid or is not applicable. Until surrendered, each certificate of Panda Ethanol stock will be deemed at any time after the effective time of the merger to represent only the right to receive upon such surrender stock in the surviving corporation pursuant to the relevant exchange ratio, plus certain dividends or other distributions.

No dividends or other distributions declared or made with respect to shares of the stock of the surviving corporation with a record date after the effective time of the merger will be paid to the holder of any unsurrendered certificates of Panda Ethanol until the surrender of the certificates.

At the close of business on the day on which the effective time of the merger occurs, the stock transfer books of Panda Ethanol will be closed and there will be no further registration of transfers. If, after the effective time of the merger, certificates of Panda Ethanol stock are presented to the surviving corporation or the exchange agent, the certificates will be canceled and exchanged as provided in the merger agreement. The exchange agent will issue the appropriate number of shares of common stock of the surviving corporation in exchange for any lost, stolen or destroyed certificates, upon the making of an affidavit and indemnity and subject to the requirement to deliver a bond in such sum as the exchange agent may direct in its reasonably commercial discretion.

Any portion of Panda Ethanol stock (and any dividends or distributions thereon) that remains undistributed to the holders of the certificates for six months after the effective time of the merger will be delivered to the surviving corporation, upon demand, and any holders of such Panda Ethanol stock may only look to the surviving corporation for fulfillment of their claims.

Representations and Warranties

Cirracor and Grove Panda have made a number of representations and warranties to Panda Ethanol relating to, among other things:

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Panda Ethanol has made a number of representations and warranties to Cirracor and Grove Panda in the merger agreement relating to, among other things:

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The representations and warranties in the merger agreement or in any instrument delivered pursuant to the merger agreement will survive for a period of two years after the effective time of the merger.

Conduct of Business Pending the Merger

From the date of the merger agreement and until the earlier of the effective time of the merger, or until the prior termination of the merger agreement, Panda Ethanol and Cirracor will not, and Grove Panda shall cause Cirracor not to, unless mutually agreed to in writing:

In addition, Panda Ethanol, Grove Panda and Cirracor have also agreed that:

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Limitation on Considering Other Acquisition Proposals

Except for the issuance and sale of certain equity of Panda Ethanol, none of the parties may authorize any of their officers, directors, agents, representatives, or advisors to solicit, initiate, execute or encourage or take any action to facilitate the submission of inquiries, proposals or offers from any person relating to any matter concerning any merger, consolidation, business combination, recapitalization or similar transaction involving Panda Ethanol or us (other than the transaction contemplated by the merger agreement) or any other transaction, the consummation of which would or could reasonably be expected to impede, interfere with, prevent or delay the merger or which would or could be expected to dilute the benefits to Panda Ethanol of the transactions contemplated by the merger agreement. Upon signing of the merger agreement, all parties were required to immediately cease and cause to be terminated any existing activities, discussions and negotiations with any parties with respect to any of the foregoing.

Conditions to the Closing of the Merger

The merger is subject to the satisfaction or waiver of various conditions, which include the following:

None of the parties are obligated to effect the merger unless the following conditions are satisfied or waived:

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Cirracor is not obligated to effect the merger unless the following conditions are satisfied or waived:

Panda Ethanol is not obligated to effect the merger unless the following conditions are satisfied or waived:

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the merger (except that those representations and warranties that speak only as of a particular date need only be true and correct as of such date), and Panda Ethanol has received a certificate, signed by Cirracor’s president and dated as of the closing date, to the effect that the representations and warranties set forth in the merger agreement have been satisfied;

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Termination of the Merger Agreement

The merger agreement may be terminated and abandoned at any time prior to the effective time of the merger under certain circumstances, including:

Indemnification and Pledge Agreement

Panda Ethanol and the surviving corporation of the merger will indemnify and hold harmless Cirracor, Grove Panda and their respective affiliates, fiduciaries, directors, officers, controlling persons, representatives and agents and hold them harmless from any loss arising, directly or indirectly, out of or in connection with any material breach of any representation or warranty of Panda Ethanol contained in the merger agreement or any breach of any covenant or agreement of Panda Ethanol contained in the merger agreement.

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Cirracor (solely prior to the effective time of the merger) and Grove Panda (prior to and after the effective time of the merger) will indemnify and hold harmless Panda Ethanol and the surviving corporation of the merger and each of their respective affiliates, fiduciaries, directors, officers, controlling persons, representatives and agents and hold them harmless from any loss arising, directly or indirectly, out of or in connection with (i) any material breach of any representation or warranty of Cirracor or Grove Panda contained in the merger agreement, (ii) any breach of any covenant or agreement of Cirracor or Grove Panda contained in the merger agreement, (iii) any liabilities of Cirracor in excess of an agreed cap occurring or accruing prior to the effective time of the merger or any liabilities of Grove Panda occurring or accruing at any time or (iv) any claim by any Cirracor stockholder related to any acquisition of shares of Cirracor stock by Grove Panda. Except for a loss arising, directly or indirectly, out of or in connection with any breach of a representation or warranty that was knowing, intentional, grossly negligent or reckless, the sole recourse against Grove Panda will be to a minimum of 700,000 shares of the surviving corporation to be pledged by Grove Panda to the surviving corporation at the effective time of the merger.

Extension, Waiver and Amendment of the Merger Agreement

The parties may amend the merger agreement with the approval, in the case of Cirracor and Panda Ethanol, of not less than a majority of the members of such party’s board of directors then in office and, in the case of Cirracor , Grove Panda and Panda Ethanol, without the further approval of the stockholders of such party so long as the change does not amend the terms of the merger agreement to the material detriment of such stockholders.

At any time prior to the effective time of the merger, the parties may extend the time for the performance of any of the obligations or other acts of the other parties, waive any inaccuracies in the representations and warranties of the other party or waive compliance by the other party with any of the agreements or conditions contained in the merger agreement. An extension or waiver, in the case of Cirracor or Panda Ethanol, requires the approval of not less than a majority of the members of such party’s board of directors then in office in order to be effective.

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OTHER PROPOSALS

Reverse Stock Split Proposal

The board of directors of Cirracor has unanimously approved and recommends that the stockholders approve a reverse stock split whereby each outstanding share of Cirracor common stock would become 0.340885 shares of Cirracor common stock.

Cirracor is currently authorized to issue fifty-five million (55,000,000) shares of capital stock with a par value of $.001 per share. Fifty million (50,000,000) of these shares are common stock and five million (5,000,000) are preferred stock. The Amended and Restated Articles of Incorporation, if approved, will increase the total number of shares of capital stock, par value $0.001 per share, Cirracor is authorized to issue to three hundred and fifty million (350,000,000). Two hundred fifty million (250,000,000) of these shares will be common stock and one hundred million (100,000,000) will be preferred stock.

As of                  , 2006, the record date for this special meeting, 3,520,250 shares of Cirracor common stock were outstanding.

The reverse stock split, if implemented, would have the principal effect of reducing the outstanding number of shares of common stock by a ratio of 1:0.340885. Except for adjustments that may result from the treatment of fractional shares as described below, and as a result of the merger, the reverse stock split will not have any dilutive effect on Cirracor’s stockholders since each stockholder would hold the same percentage of common stock outstanding immediately following the reverse stock split as such stockholder held immediately prior to the reverse stock split. The reverse stock split will not affect the relative voting and other rights that accompany the shares of common stock. The common stock resulting from a reverse stock split will remain fully paid and non-assessable. A reverse stock split will not affect the public registration of the common stock under the Exchange Act.

Reasons for the Reverse Stock Split

The reverse stock split is a condition to the closing of the merger agreement that was required by Panda Ethanol. The reverse stock split is being implemented to maintain the negotiated relative ownership percentages between the holders of Cirracor stock prior to the merger and the holders of Panda Ethanol stock and to allow for a one-for-one share exchange of Panda Ethanol stock for stock in the surviving corporation.

Certain Risk Factors Associated with the Reverse Stock Split

There can be no assurance that the total market capitalization of Cirracor common stock (the aggregate value of all Cirracor common stock at the then market price) after the proposed reverse stock split will be equal to or greater than the total market capitalization before the proposed reverse stock split or that the per share market price of Cirracor common stock following the reverse stock split will either equal or exceed the current per share market price.

There can be no assurance that the price per new share of Cirracor common stock after the reverse stock split will increase in proportion to the reduction in the number of old shares of Cirracor common stock outstanding before the reverse stock split. For example, if the reverse stock split implemented at the contemplated ratio of 1:0.340885, the post-split price of Cirracor common stock may not increase proportionately from the pre-split price. Accordingly, the total market capitalization of Cirracor common stock after the proposed reverse stock split may be lower than the total market capitalization before the proposed reverse stock split and, in the future, the price of Cirracor common stock following the reverse stock split may not exceed or remain higher than the price prior to the proposed reverse stock split.

Procedure for Effecting a Reverse Stock Split and Exchange of Stock Certificates

If the stockholders approve the reverse stock split proposal, the merger proposal and the charter amendment proposal, the Cirracor board plans to effect the reverse stock split immediately prior to the consummation of the merger. At the effective time of the reverse stock split, each outstanding share of Cirracor common stock

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immediately prior to the effective time will, automatically, without any further action on the part of the stockholders, be converted into 0.340885 shares of Cirracor common stock and each certificate which, immediately prior to the effective time of the reverse stock split represented pre-reverse stock split shares, will be deemed for all corporate purposes to evidence ownership of post-reverse stock split shares.

As soon as reasonably practicable after the effective time of the merger, the exchange agent will mail to each holder of record of Cirracor common stock at the effective time of the reverse stock split a letter of transmittal, with instructions for use in surrendering certificates for pre-reverse stock split shares for certificates for post-reverse stock split shares in the surviving corporation. Upon surrender of a certificate representing pre-reverse stock split shares to the exchange agent, together with the letter of transmittal, duly completed and validly executed, and any other documents that are reasonably required by the exchange agent, the holder of such certificate of Cirracor common stock will be entitled to receive in exchange therefor a certificate representing 0.340885 shares of common stock of the surviving corporation for each pre-reverse stock split share of Cirracor common stock, and the certificate of Cirracor common stock so surrendered will be canceled. No fractional shares of stock in the surviving corporation will be issued.

In the event that a transfer of ownership of stock has not been registered in Cirracor’s transfer records, a certificate evidencing the proper number of shares of the surviving corporation may be issued to a person other than the person in whose name the certificate is registered in exchange for such certificate if such certificate is properly endorsed or otherwise in proper form for transfer and the person requesting such exchange pays any transfer or other taxes required by reason of the issuance of shares of stock in the surviving corporation to a person other than the registered holder of such certificate or establishes to the satisfaction of the surviving corporation that such tax has been paid or is not applicable. Until surrendered, each certificate of our stock will be deemed at any time after the effective time of the reverse stock split to represent only 0.340885 shares of common stock of the surviving corporation for each pre-reverse stock split share.

You will need to surrender your old certificate(s) before you will be able to sell or transfer your stock.

If an old certificate has a restrictive legend on the back of the old certificate, a new certificate evidencing shares of new common stock will be issued with the same restrictive legends, if any, that are on the back of the old certificate(s).

All expenses of the exchange will be borne by Cirracor.

Stockholders should not destroy any stock certificate(s). You should not send your old certificates to the exchange agent until you have received the letter of transmittal.

Fractional Shares

No fractional certificates will be issued in connection with the reverse stock split. Stockholders who otherwise would be entitled to receive fractional shares because they hold a number of shares of common stock not evenly divisible by the stock split ratio will be entitled, upon surrender of any certificate(s) representing such shares, to a cash payment in lieu thereof.

Stockholders who otherwise would be entitled to receive fractional shares will only be entitled to a cash payment in lieu of such shares and will no longer have any rights as a stockholder with respect to the shares of common stock that would have been exchanged for such fractional shares.

Authorized Shares

The reverse stock split would have the following effects on the number of shares of Cirracor common stock outstanding:

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In addition, in connection with the Amended and Restated Articles of Incorporation, the number of shares of Cirracor capital stock, par value $0.001, authorized for issuance would increase to three hundred fifty million (350,000,000) shares, comprised of two hundred fifty million (250,000,000) shares of common stock and one hundred million (100,000,000) shares of preferred stock. Upon consummation of the merger, Cirracor will issue 28,800,000 additional post-reverse stock split shares to the holders of Panda Ethanol.

As a summary and for illustrative purposes only, the following table shows approximately the effect on the Cirracor common stock of the reverse stock split, based on 3,520,250 shares of Cirracor common stock outstanding on                  , 2006, the record date, and assuming the reverse stock split and the merger became effective on the record date and the Amended and Restated Articles of Incorporation were filed on the record date: