UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under
the Securities Exchange Act of 1934
(Amendment
No. 1)*
PACIFIC
ETHANOL, INC.
(Name
of
Issuer)
Common Stock, $0.001 par value per
share
(Title
of
Class of Securities)
69423U107
(CUSIP
Number)
David
Tang, Esq.
Howard
Rice Nemerovski Canady Falk & Rabkin
A
Professional Corporation
Three
Embarcadero Center, Suite 700
San
Francisco, California 94111-4024
415.434.1600
(Name,
Address and Telephone Number of Person Authorized to
Receive
Notices and Communications)
July
30, 2008
(Date
of
Event which Requires Filing of this Statement)
If
the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. £
Note:
Schedules filed in paper
format shall include a signed original and five copies of the schedule,
including all exhibits. See §240.13d-7 for other parties to whom copies are to
be sent.
*
The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities,
and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed
to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
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1.
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Names
of Reporting Persons.
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Lyles
United, LLC
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2.
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Check
the Appropriate Box if a Member of a Group (See
Instructions)
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(a) £
(b) £
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3.
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SEC
Use Only
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4.
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Source
of Funds (See Instructions)
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WC
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5.
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Check
if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or
2(e)
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£
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6.
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Citizenship
or Place of Organization
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Delaware
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NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
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7.
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Sole
Voting Power
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9,500,419
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8.
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Shared
Voting Power
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0
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9.
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Sole
Dispositive Power
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9,500,419
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10.
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Shared
Dispositive Power
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0
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
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9,500,419
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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£
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13.
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Percent
of Class Represented by Amount in Row (11)
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17.7%
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14.
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Type
of Reporting Person (See Instructions)
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OO
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This
Amendment No. 1 to Schedule 13D (“Schedule”) regarding Pacific Ethanol, Inc.
(the “Issuer”) amends and restates the Schedule 13D filed with the Securities
and Exchange Commission on April 3, 2008 by Lyles United, LLC (“Lyles”). Lyles
is filing this Schedule solely to report the increase in its reported beneficial
ownership in the Issuer’s Common Stock resulting from the fact that, pursuant to
Rule 13d-3(d), Lyles is deemed to have become the beneficial owner of the shares
of Common Stock underlying the Private Placement Warrant (as defined in Item
4
below) as of July 30, 2008. See Items 4 and 5(c) below.
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Item
1.
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Security
and Issuer:
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This
Schedule relates to shares of common stock, par value $0.001 per
share
(the “Common Stock”), of the Issuer. The principal executive office
of the Issuer is 400 Capital Mall, Suite 2060, Sacramento,
CA 95814.
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Item
2.
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Identity
and Background:
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(a) This
Schedule is being filed by Lyles.
(b)-(c)
Lyles is a limited liability company organized under the laws of the state
of Delaware. Lyles is in the business of investments and seeks
returns through long-term investments. The address of Lyles’
principal place of business and principal office is 1210 W. Olive Street,
Fresno, California 92728. Information is provided below with respect
to persons who are executive officers and directors of Lyles:
Gerald
V.
Lyles, President and a Director of Lyles, 1210 W. Olive Street, Fresno,
California 92728.
Michael
F. Elkins, Vice President, Treasurer, Chief Financial Officer, Assistant
Secretary and a Director of Lyles, 1210 W. Olive Street, Fresno,
California 92728.
John
P.
Leonardo, Vice President, Secretary, Assistant Treasurer and Director of Lyles,
1210 W. Olive Street, Fresno, California 92728.
William
M. Lyles, IV, Vice President of Lyles, 1210 W. Olive Street, Fresno,
California 92728.
(d) None
of the persons set forth above has, during the past five years, been convicted
in any criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None
of the persons set forth above has, during the past five years, been a party
to
a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which any of them became or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) All
of the individuals set forth above are citizens of the United
States.
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Item
3.
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Source
and Amount of Funds or Other
Consideration:
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The
source of funds used to acquire the securities of the Issuer described in Item
4
below was working capital of Lyles in the amount of approximately
$40,000,000.00.
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Item
4.
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Purpose
of Transaction:
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On
March
18, 2008, Lyles entered into a Securities Purchase Agreement with the Issuer
(the “Purchase Agreement”), which provided for the sale by the Issuer
and the purchase by Lyles of: (i) 2,051,282 shares of the Issuer’s Series B
Cumulative Convertible Preferred Stock (the “Series B Preferred Stock”) at a
price of $19.50 per share (the “Series B Original Purchase Price”); and (ii) a
warrant to purchase up to 3,076,923 shares of the Issuer’s Common Stock (the
“Private Placement Warrant”) at an exercise price of $7.00 per share (the
“Private Placement”). On March 27, 2008 the Issuer and Lyles closed the Private
Placement. Each share of Series B Preferred Stock is convertible at any time
at
Lyles’s option into shares of the Issuer’s Common Stock, at a conversion rate
calculated as set forth in the Certificate of Designations, Powers, Preferences
and Rights of the Series B Cumulative Convertible Preferred Stock (the “Series B
Certificate of Designations”). The initial conversion rate of the Series B
Preferred Stock was 3.00:1 (i.e., each share of Series B Preferred Stock was
initially convertible into 3 shares of Common Stock). Based upon Lyles’
calculations, the conversion rate of the Series B Preferred Stock as of the
date
hereof is approximately 3.08:1 (as a result of certain anti-dilution adjustments
made subsequent to the original issuance of the Series B Preferred Stock).
In
addition, the Series B Certificate of Designations provides that the holders
of
Series B Preferred Stock are entitled to quarterly cumulative dividends payable
in arrears in an amount equal to 7.00% of the Series B Original Purchase Price
on a pari passu basis
with the holders of the Issuer’s Series A Cumulative Convertible Preferred
Stock, with such dividends payable in cash or, at the option of the Issuer,
in
additional shares of Series B Preferred Stock based initially on the Series
B
Original Purchase Price. Pursuant to the Letter Agreement described under Item
6
below, however, the Issuer has agreed to waive its right under the Series B
Certificate of Designations to make payments in additional shares of Series
B
Preferred Stock in lieu of cash dividend payments without the prior written
consent of Lyles.
By
its
terms, the Private Placement Warrant will become exercisable on September 28,
2008. Therefore, pursuant to Rule 13d-3(d) promulgated under the Exchange Act
of
1934, as amended (“Rule 13d-3(d)”), Lyles is deemed to have become the
beneficial owner of the shares of Common Stock underlying the Private Placement
Warrant as of July 30, 2008 (which date precedes the date on which the Private
Placement Warrant will become exercisable by 60 days).
In
connection with an extension of a loan under a Secured Promissory Note dated
November 2007 between Pacific Ethanol Imperial, LLC, an indirect subsidiary
of
the Issuer, and Lyles, on March 27, 2008, the Issuer issued to Lyles a warrant
(the “Loan Warrant” and, together with the Private Placement Warrant, the
“Warrants”) to purchase up to 100,000 shares of the Issuer’s Common Stock at an
exercise price of $8.00 per share. The Loan Warrant is currently
exercisable and expires 18 months from the date of issuance.
The
acquisitions of the Series B Preferred Stock and the Warrants described above
were made for investment purposes. Depending on market conditions and other
factors, Lyles may, at any time or from time to time, acquire additional
securities of the Issuer, or alternatively, may dispose of some or all of the
securities of the Issuer beneficially owned by it.
Except
as
described herein, Lyles does not currently have any plans or proposals that
relate to or would result in any of the following:
(a) The
acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the Issuer;
(b) An
extraordinary corporate transaction, such as a merger, reorganization, or
liquidation, involving the Issuer or any of its subsidiaries;
(c) A
sale or transfer of a material amount of assets of the Issuer or any of its
subsidiaries;
(d) Any
change in the present board of directors or management of the Issuer, including
any plans or proposals to change the number or term of directors or to fill
any
existing vacancies on the board;
(e) Any
material change in the present capitalization or dividend policy of the
Issuer;
(f) Any
other material change in the Issuer’s business or corporate
structure;
(g) Changes
in the Issuer’s charter, bylaws or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Issuer by any
person;
(h) Causing
a class of securities of the Issuer to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association;
(i) A
class of equity securities of the issuer becoming eligible for termination
of
registration pursuant to Section 12(g)(4) of the Act; or
(j) Any
action similar to those enumerated above.
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Item
5.
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Interest
in Securities of the Issuer:
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(a) For
the purposes of this Schedule, Lyles currently beneficially owns 9,500,419
shares of Common Stock, consisting of: (i) 6,317,496 shares of Common Stock
issuable upon conversion of the 2,051,282 shares of Series B Preferred Stock
acquired by Lyles in the Private Placement; (ii) 3,076,923 shares of Common
Stock underlying the Private Placement Warrant; (iii) 100,000 shares of Common
Stock underlying the Loan Warrant issued to Lyles; and (iv) 6,000 shares of
Common Stock. The percentage of the Issuer’s Common Stock beneficially owned by
Lyles for the purposes of this Schedule is 17.7%.
The
calculation of percentage of beneficial ownership in Item 13 of page 2 was
derived from the Issuer’s Quarterly Report on Form 10-Q, filed with the
Securities and Exchange Commission on May 19, 2008, in which the Issuer stated
that the number of shares of its Common Stock outstanding as of May 15, 2008
was
44,131,065.
(b) See
items 7 through 10 of the cover page to this Schedule for the number of shares
of Common Stock beneficially owned by Lyles as to which there is sole power
to
vote or to direct the vote, shared power to vote or to direct the vote and
sole
or shared power to dispose or to direct the disposition.
(c) As
described above in Item 4, pursuant to Rule 13d-3(d), Lyles is deemed to have
become the beneficial owner of the shares of Common Stock underlying the Private
Placement as of July 30, 2008. Lyles has effected no other transactions in
the
Issuer’s Common Stock during the past 60 days.
(d) Except
as set forth in this Schedule, no other person is known to have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, securities covered by this Schedule.
(e) Not
applicable.
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Item
6.
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Contracts,
Arrangements, Understandings or Relationships with Respect to Securities
of the Issuer:
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See
the
description of the Private Placement (and the Purchase Agreement and the Private
Placement Warrant entered into in connection therewith) under Item 4 above.
In
connection with the closing of the Private Placement, the Issuer also entered
into a Registration Rights Agreement (the “Registration Rights Agreement”) and a
letter agreement (the “Letter Agreement”) with Lyles, each dated as of March 27,
2008. Under the Registration Rights Agreement, the Issuer granted certain
registration rights to Lyles with respect to the shares of Common Stock issuable
upon conversion of the shares of Series B Preferred Stock and/or upon exercise
of the Warrants. Under the Letter Agreement, the Issuer agreed to waive its
right under the Series B Certificate of Designations to make payments in
additional shares of Series B Preferred Stock in lieu of cash dividend payments
without the prior written consent of Lyles.
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Item
7.
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Material
to Be Filed as Exhibits:
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1.
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Securities
Purchase Agreement dated March 18, 2008 between the Issuer and Lyles
(included as Exhibit 10.1 to the Issuer’s Form 8-K filed with the
Securities and Exchange Commission on March 18, 2008 and incorporated
herein by reference).
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2.
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Certificate
of Designations, Powers, Preferences and Rights of the Series B Cumulative
Convertible Preferred Stock (included as Exhibit 10.2 to the Issuer’s Form
8-K filed with the Securities and Exchange Commission on March 27,
2008
and incorporated herein by
reference).
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3.
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Issuer
Warrant dated March 27, 2008 (included as Exhibit 10.3 to the Issuer’s
Form 8-K filed with the Securities and Exchange Commission on March
27,
2008 and incorporated herein by
reference).
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4.
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Registration
Rights Agreement dated March 27, 2008 between the Issuer and Lyles
(included as Exhibit 10.4 to the Issuer’s Form 8-K filed with the
Securities and Exchange Commission on March 27, 2008 and incorporated
herein by reference).
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5.
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Letter
Agreement dated March 27, 2008 between the Issuer and Lyles (included
as
Exhibit 10.5 to the Issuer’s Form 8-K filed with the Securities and
Exchange Commission on March 27, 2008 and incorporated herein by
reference).
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Signature
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
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Dated:
August 11 , 2008
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LYLES
UNITED, LLC
By: /s/
William M. Lyles,
IV
William
M. Lyles, IV
Vice
President
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