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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Filed Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): February 27, 1997
ENERGY BIOSYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 0-21130 04-3078857
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation or organization)
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4200 Research Forest Drive
The Woodlands, Texas 77381
(Address of principal
executive offices
and zip code)
(281) 364-6100
(Registrant's telephone number,
including area code)
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Item 5. Other Events
On February 27, 1997, Energy BioSystems Corporation (the "Company")
conducted an initial closing of a private placement of its Series B Convertible
Preferred Stock in which it sold 220,100 shares of Series B Convertible
Preferred Stock at $50.00 per share. On March 10, 1997, the Company conducted a
final closing of the private placement in which it sold an additional 4,000
shares of Series B Convertible Preferred Stock. The Company received an
aggregate of approximately $11.2 million ($10.2 million net of placement fees
and expenses) from the sale of the Series B Convertible Preferred Stock in the
private placement.
Alex. Brown & Sons Incorporated ("Alex. Brown") served as the
placement agent for the private placement. In consideration for such services,
the Company paid Alex. Brown placement fees of $677,000.00 and issued a warrant
to Alex. Brown exercisable for 20,319 shares of Series B Convertible Preferred
Stock at an exercise price of $50.00 per share.
Concurrent with the initial closing of the private placement, on
February 27, 1997, the Company completed an initial closing of an exchange
offering in which it issued 463,300 shares of Series B Convertible Preferred
Stock in exchange for the same number of shares of its Series A Convertible
Preferred Stock. On March 10, 1997, the Company conducted a second closing of
the exchange offering in which it issued an additional 14,700 shares of Series B
Convertible Preferred Stock in exchange for the same number of shares of Series
A Convertible Preferred Stock. All of the outstanding shares of the Company's
Series A Convertible Preferred Stock (except for 2,000 shares) have been
exchanged for shares of Series B Convertible Preferred Stock in the exchange
offering.
Dividends on the Series B Convertible Preferred Stock are payable, at
the Company's option, in cash or common stock or a combination thereof, at an
annual rate equal to $4.00 per share to the extent paid in cash and $4.50 per
share to the extent paid in common stock. Shares of Series B Convertible
Preferred Stock are convertible into common stock at a conversion price of $7.25
per share, subject to adjustment under certain circumstances. The Series B
Convertible Preferred Stock may be redeemed at the option of the Company, under
certain circumstances, after February 26, 1997, and will be subject to mandatory
redemption on February 26, 2002. In each case, the redemption price will be
$50.00 per share payable, at the Company's option, in cash or common stock. The
Company has agreed to use its reasonable best efforts to file a registration
statement to cover the resale of the underlying common stock.
The private placement and exchange offering were not registered under
the Securities Act of 1933, as amended (the "Securities Act"), and were made in
reliance on Section 4(2) of the Securities Act and Rule 506 of Regulation D. The
purchasers in the private placement and holders of Series A Convertible
Preferred Stock that participated in the exchange offering consisted of
Qualified Institutional Buyers and other accredited investors.
On March 3, 1997, the Company issued a press release which announced
the initial closing of the private placement of 220,100 shares of Series B
Convertible Preferred Stock. The press release is filed as an exhibit to this
Current Report on Form 8-K pursuant to Rule 135c under the Securities Act of
1933, as amended.
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Item 7. Exhibits
Exhibit 99.1 -- Press Release
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENERGY BIOSYSTEMS CORPORATION
Date: March 11, 1997
By:/s/ Paul G. Brown, III
Paul G. Brown, III
Vice President, Finance and
Administration
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Exhibit 99.1
ENERGY BIOSYSTEMS COMPLETES $11 MILLION FINANCING
THE WOODLANDS, TEXAS (March 3, 1997) -- Energy BioSystems Corporation
(Nasdaq: ENBC) announced today that it has raised $11.0 million ($10.0 million
net proceeds) through the private placement of 220,100 shares of Series B
Convertible Preferred Stock ("Preferred Stock") at $50.00 per share. The Company
has received a subscription for an additional 4,000 shares of Preferred Stock,
from which it expects to receive an additional $0.2 million of proceeds at a
final closing of the private placement within the next few days.
Dividends on the Preferred Stock are payable, at the Company's option,
in cash or common stock or a combination thereof, at an annual rate equal to
$4.00 per share to the extent paid in cash and $4.50 per share to the extent
paid in common stock. The shares of Preferred Stock are convertible into common
stock at a conversion price of $7.25 per share, subject to adjustment under
certain circumstances. The Preferred Stock may be redeemed at the option of the
Company, under certain circumstances, after February 26, 1997, and will be
subject to mandatory redemption on February 26, 2002. In each case, the
redemption price will be $50.00 per share payable, at the Company's option, in
cash or common stock. The Company will agree to use its reasonable best efforts
to file a registration statement to cover the resale of the underlying common
stock.
The Company now has approximately $17 million in cash, cash equivalents
and short-term investments. This capital is expected to provide sufficient
financing for operations through year-end 1998. The Company intends to use the
proceeds of the private placement to fund the continued
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development of its biocatalytic desulfurization technology, for capital
expenditures and for working capital and general corporate purposes.
The private placement was not registered under the Securities Act of
1933 and was made in reliance on exemptions from the registration requirements
of the Securities Act. Shares of Preferred Stock may not be offered or sold by
the purchasers of such shares without registration under the Securities Act or
an applicable exemption from registration.
Energy BioSystems also announced that, concurrently with the closing of
the private placement, it completed an initial closing of an exchange offering
in which it has offered to exchange one share of Preferred Stock for each of its
outstanding shares of Series A Convertible Preferred Stock. The Company issued
463,300 shares of Preferred Stock in the initial closing in exchange for the
same number of shares of Series A Preferred Stock. The exchange offering will
expire on March 7, 1997, unless extended by the Company in its sole discretion.
The Company's Series A Preferred Stock is held by a limited number of Qualified
Institutional Buyer ("QIBs") and other accredited investors.
Energy BioSystems Corporation, of Houston, is commercializing
biotechnology-based processes for the petroleum refining and production
industries. The Company's focus to date has been on developing biocatalytic
desulfurization, a proprietary process involving the use of bacteria to remove
sulfur from petroleum. This process is expected to help refiners worldwide meet
environmental regulations in a more cost-effective manner and has the potential
to greatly improve the value of high-sulfur crude oil reserves.
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This document contains forward-looking statements that are subject to
certain risks, uncertainties and assumptions. Should one or more of such risks
and uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated in such forward-looking
statements. For a discussion of such risks and assumptions, see "Risk Factors"
included in the Company's annual report on Form 10-K for the year ended December
31, 1995.
