<PAGE>
REGISTRATION NO. 333-
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1997
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ENERGY BIOSYSTEMS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 04-3078857
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4200 RESEARCH FOREST DRIVE
THE WOODLANDS, TEXAS 77381
(281) 364-6100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-----------------------------
PAUL G. BROWN, III
VICE PRESIDENT, FINANCE AND ADMINISTRATION
ENERGY BIOSYSTEMS CORPORATION
4200 RESEARCH FOREST DRIVE
THE WOODLANDS, TEXAS 77381
(281) 364-6100
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH COPIES TO:
ANDREWS & KURTH L.L.P.
2170 BUCKTHORNE PLACE, SUITE 150
THE WOODLANDS, TEXAS 77380
(713) 220-4801
ATTN.: JEFFREY L. WADE
-----------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected is expected to be made pursuant
to Rule 434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
TITLE OF EACH CLASS OF SHARES TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED/(1)/ OFFERING AGGREGATE OFFERING REGISTRATION
PRICE PER SHARE/(2)/ PRICE/(2)/ FEE/(2)/
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share/(3)/ 6,500,000 $5.50 $35,750,000 $10,833
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</TABLE>
/(1)/ Consists of (i) 4,982,200 shares issuable upon conversion of the Company's
Series B Convertible Preferred Stock and (ii) up to 1,517,800 shares which
may be issued as dividends on shares of Series B Convertible Preferred
Stock.
/(2)/ Pursuant to Rule 457(c), the registration fee is calculated based upon the
average of the high and low sale prices for the Common Stock reported by
the Nasdaq National Market on April 15, 1997.
/(3)/ Each share of Common Stock includes one Preferred Stock Purchase Right.
-----------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
Prospectus
ENERGY BIOSYSTEMS
6,500,000 SHARES OF
COMMON STOCK
This Prospectus relates to the offering of up to 6,500,000 shares (the
"Shares") of the Common Stock, par value $.01 per share ("Common Stock"), of
Energy BioSystems Corporation, a Delaware corporation ("EBC" or the "Company"),
issuable upon conversion of the Company's Series B Convertible Preferred Stock,
par value $.01 per share (the "Preferred Stock"), or issuable as a stock
dividends on the Preferred Stock. The Common Stock is quoted on the Nasdaq
National Market under the trading symbol "ENBC." On April 18, 1997, the last
reported sale price of the Common Stock on the Nasdaq National Market was $5.00
per share.
An aggregate of 702,100 shares of Preferred Stock were issued upon the
initial and final closings of a private placement and an exchange offering by
the Company February 27, 1997 and March 10, 1997, respectively. An additional
20,319 shares of Preferred Stock are issuable upon the exercise of certain
warrants (the "Warrants") issued in connection with the private placement.
Dividends on the Preferred Stock are cumulative from February 27, 1997, and are
payable semi-annually commencing May 1, 1997 at an annual rate equal to (i)
$4.00 per share of Preferred Stock to the extent the dividend is paid in cash,
and (ii) $4.50 per share of Preferred Stock to the extent the dividend is paid
in Common Stock.
Each share of Preferred Stock is convertible at any time at the option of
the holder, unless previously redeemed, into Common Stock at a conversion price
of $7.25 per share, subject to adjustment under certain circumstances. The
Preferred Stock may be redeemed by the Company under certain circumstances after
February 26, 1999, and is required to be redeemed, subject to certain
limitations, on February 26, 2002, at a redemption price of $50.00 per share,
plus accrued and unpaid dividends (the "Redemption Price"). In the event of
certain fundamental changes relating to the Company, the Preferred Stock will be
repurchased at the option of the holders at the Redemption Price. The
Redemption Price may be paid in cash or Common Stock or a combination thereof,
at the Company's option. The Preferred Stock is not listed on any securities
exchange or quoted in any over-the-counter market.
All or part of the Shares may be offered by the selling stockholders named
herein (the "Selling Stockholders") from time to time for their own account in
transactions on The Nasdaq National Market, in negotiated transactions or
otherwise, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Selling Stockholders
may effect such transactions by selling the Shares to or through broker-dealers
and such broker-dealers may receive compensation in the form of discounts,
concessions or commission from the Selling Stockholders or the purchasers of the
Shares for whom such broker-dealers may act as agent or to whom they sell as
principal or both (which compensation to a particular broker-dealer might be in
excess of customary commissions).
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company. The Company has agreed to bear
certain expenses in connection with the registration and sale of the Shares
being offered by the Selling Stockholders. The Selling Stockholders and any
broker-dealers participating in the distribution of the Shares may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), and any profit on the sale of Shares by the Selling
Stockholders and any commissions received by any such broker-dealer may be
deemed to be underwriting commissions under the Securities Act.
The Shares have not been registered for sale by the Selling Stockholders
under the securities laws of any state as of the date of this Prospectus.
Brokers or dealers effecting transactions in the Shares should confirm
registration thereof under the securities laws of the states in which such
transactions occur, or the existence of any exemption from registration.
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" WHICH BEGINS ON PAGE 5 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April 21, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, accordingly, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed with the Commission are available for inspection and copying
at the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, and at the
Commission's Regional Offices located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and at Seven World Trade Center,
Suite 1300, New York, New York 10048. Copies of such documents may also be
obtained from the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549, at prescribed rates. The
Commission maintains a site on the World Wide Web at http://www.sec.gov that
contains reports, proxy statements and other information regarding registrants
that file electronically with the Commission. In addition, such materials and
other information concerning the Company can be inspected at the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, DC
20006.
The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), on Form S-3 with respect to the securities offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to are not necessarily complete. With respect to each
such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved. The Registration Statement and any
amendments thereto, including exhibits filed or incorporated by reference as a
part thereof, are available for inspection and copying at the Commission's
offices as described above.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (File No. 0-21130), are incorporated by
reference into this Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
2. The Company's Current Report on Form 8-K dated February 27, 1997; and
3. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed January 25, 1993, as amended
by Post-Effective Amendment No. 1 filed with the Commission on
March 15, 1993.
All reports and documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement contained herein or in a
document all or a portion of which is incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT
CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS
PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH
PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN
OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO
SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
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<PAGE>
BY REFERENCE INTO SUCH DOCUMENTS). SUCH REQUESTS FOR DOCUMENTS SHOULD BE
DIRECTED TO ENERGY BIOSYSTEMS CORPORATION, 4200 RESEARCH FOREST DRIVE, THE
WOODLANDS, TEXAS 77381, ATTENTION: PAUL G. BROWN III, TELEPHONE NUMBER
(281) 364-6100.
No person is authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been authorized.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to purchase, any of the securities offered by this Prospectus, or the
solicitation of a proxy, in any jurisdiction in which, or to any person to whom,
it is unlawful to make such offer or solicitation of an offer or proxy
solicitation. Neither the delivery of this Prospectus nor any distribution of
the securities offered hereby shall, under any circumstances, create any
implication that the information contained herein is correct as of any time
subsequent to the date hereof or that there has been no change in the affairs of
the Company since the date hereof.
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<PAGE>
THE COMPANY
The following is qualified in its entirety by the more detailed information
appearing elsewhere in this Prospectus, and by the more detailed information and
financial statements, including notes thereto, included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996, and in subsequent
reports filed pursuant to Section 13 or 15(d) of the Exchange Act, which are
incorporated by reference herein.
EBC is developing and commercializing innovative biotechnology-based
processes for the petroleum refining and production industries. The Company's
focus to date has been on developing biocatalytic desulfurization ("BDS"), a
proprietary process involving the use of enzymes to remove sulfur from
petroleum. EBC believes that BDS can be used as a substitute for, or in
conjunction with, existing desulfurization technology and expects BDS to be
significantly less expensive than conventional desulfurization methods. The
Company's BDS pilot plant, which is a fully integrated desulfurization unit
capable of processing up to five barrels of diesel fuel per day, was completed
in late 1994 and began processing diesel feedstock in March 1995. The pilot
plant is intended to provide the basis for the design of a commercial-scale BDS
unit.
Removal of sulfur is one of the most costly issues facing the petroleum
industry and is a growing problem worldwide. Sulfur removal is desirable to the
refining industry because of (i) environmental regulations mandating decreased
sulfur in refined products, (ii) an increasing level of sulfur in crude oil
processed by refiners and (iii) high operating and maintenance costs associated
with the existence of sulfur in petroleum. Desulfurization is also attractive
to the crude oil production market, where low-sulfur crude oil commands a
premium price over high-sulfur crude oil.
The Company has entered into a number of strategic alliances with
recognized industry leaders in support of the Company's BDS development and
commercialization activities, providing an opportunity for the Company to build
on established expertise and resources in critical areas. The Company has an
agreement with The M.W. Kellogg Company ("M.W. Kellogg") for the basic
engineering services necessary for BDS implementation at customer sites, and an
agreement with Petrolite Corporation ("Petrolite") relating to the development
of the Company's BDS technology and the construction and operation of the
Company's pilot plant. The Company also has entered into collaborations
focusing on the application of the BDS technology as follows: an alliance with
Total Raffinage Distribution, S.A. ("Total") to develop a BDS process for diesel
fuel streams; an alliance with Koch Refining Company ("Koch") to develop a BDS
process for certain gasoline streams; an alliance with the Exploration and
Production Technology Division of Texaco Inc. ("Texaco") to develop a BDS
process for crude oil; and an alliance with The Carbide/Graphite Group, Inc.
("Carbide/Graphite") to develop a BDS process for decant oil. The Company is
pursuing additional alliances with potential customers, particularly in the
Middle East and Asia, two markets which are expected to make significant
investments in desulfurization technology over the next decade. The Company is
also pursuing agreements with leading worldwide biocatalyst manufacturers to
ensure a continuous supply of biocatalyst for the Company's BDS process.
To date, the Company has engaged primarily in research and development
related to its BDS process. The Company's BDS process will require substantial
additional research, development and testing in order to determine its
commercial viability. See "Risk Factors--Technological Uncertainty; Risks
Associated with Commercialization of BDS Technology."
The Company was incorporated in Delaware on December 20, 1989. The
Company's executive offices are located at 4200 Research Forest Drive, The
Woodlands, Texas 77381, and its telephone number is (281) 364-6100.
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<PAGE>
RISK FACTORS
In evaluating the Company and its business, prospective investors should
consider carefully the following risk factors, together with the information and
financial data set forth in the reports and documents incorporated by reference
herein, prior to purchasing any shares of Common Stock offered hereby.
Technological Uncertainty; Risks Associated with Commercialization of BDS
Technology. Since its inception, the Company has engaged primarily in research
and development related to its BDS process. The Company's BDS process will
require substantial additional research, development and testing in order to
determine its commercial viability. The Company has not proven its BDS
technology other than to a limited extent in laboratory, bench-scale and pilot
plant trials. The Company's ability to make its BDS technology commercially
viable will depend in large part on its success in (i) achieving improvement of
its biocatalyst, including the manipulation of the genes responsible for
desulfurization activity to increase the expression and longevity of the
desulfurization trait, (ii) improving the rate at which sulfur molecules
transfer from petroleum to the biocatalyst, (iii) developing the fermentation
process, (iv) contracting for the manufacture of, or manufacturing, sufficient
biocatalyst for use in commercial BDS units, (v) developing a bioreactor for use
with the BDS process capable of operating at commercial levels of throughput and
desulfurization, (vi) identifying economically viable processes for commercial-
scale, sulfur byproduct disposition and (vii) marketing its BDS systems
effectively. The accomplishment of some or all of these objectives may take
longer than anticipated or may never occur. If the accomplishment of any of
these objectives takes longer than anticipated, the Company may require
additional capital to continue the development and commercialization of its BDS
technology, and there can be no assurance that such capital will be available or
that the Company will be able to successfully commercialize the BDS technology.
History of Operating Losses and Uncertainty of Future Profitability. The
Company has incurred net losses since its inception and expects its losses to
increase in the foreseeable future as it increases its expenditures for the
continued development and commercialization of its biorefining technology. The
Company has not derived any revenues to date from the use or sale of its
biorefining technology and had an accumulated deficit of $42,713,302 at December
31, 1996. The time required for the Company to become profitable is uncertain,
and there can be no assurance that the Company will achieve profitability on a
sustained basis, if at all.
Manufacture of Biocatalyst. The Company currently intends to manufacture,
at its own facility, only a quantity of biocatalyst sufficient for its in-house
research and pilot plant needs. The Company expects that the biocatalyst to be
employed in the commercial BDS process initially will be manufactured by a third
party. The Company has had discussions regarding non-exclusive biocatalyst
supply arrangements with several parties that it believes are capable of
satisfying the Company's supply requirements. If the Company is unable to enter
into agreements for the supply of commercial quantities of biocatalyst, the
Company may be forced to establish its own fermentation facilities. This
alternative could delay the commercialization of the BDS process and would
require significant capital expenditures.
Market Acceptance. The BDS process will require significant capital
expenditures by refiners and producers. The refining and oil production
industries historically have been reluctant to accept new technologies. There
is a risk, therefore, that the Company will have difficulty in obtaining the
refining and oil production industries' acceptance of the BDS process. Also,
the rate of purchase of the Company's BDS process may be affected by economic
conditions in the refining and oil production industries. The refining and oil
production industries have been subject to periods of depressed profitability
and are substantially affected by fluctuations in the price of crude oil and
finished products. Oil production and drilling activity are also largely
dependent on the level and volatility of oil prices.
Reliance on Environmental Regulation. Demand for the BDS units and
services being developed by the Company is based, in large part, on legislation
and regulations in the United States, Europe and Asia that specify stringent
environmental quality standards and that impose penalties for noncompliance.
The amendments to the federal Clean Air Act required the Environmental
Protection Agency ("EPA") to develop maximum sulfur content standards for
highway diesel fuel and new standards for gasoline content. In response, EPA
promulgated regulations regarding the maximum sulfur content of highway diesel
fuel in 1990 and regulations for a reformulated gasoline program in 1994.
Similar regulations regarding the maximum sulfur content of diesel fuel have
been adopted in Western Europe and
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<PAGE>
certain Asian countries. The Company also expects that European and Asian
countries will adopt and enforce additional standards requiring a reduction in
the sulfur content of petroleum products. Any reduction of severity in current
regulations, lax enforcement of current regulations, delay in implementation and
enforcement of planned regulations, or reduction of severity in planned or
anticipated regulations worldwide may delay or decrease the worldwide demand for
the Company's BDS process.
Patents and Proprietary Technologies. The Company's success is heavily
dependent upon its proprietary BDS and other technologies. In total, the
Company has rights to 20 U.S. and 32 foreign patents. In addition, the Company
has 12 patent applications pending in the U.S. patent office and more than 60
foreign patent applications pending to cover BDS process technology and the
molecular cloning of the biocatalyst genes. There can be no assurance
concerning the scope, validity or value of such patents, patent applications or
related intellectual property rights. Furthermore, there can be no assurance
that the steps taken by the Company to protect its proprietary technologies will
be adequate to prevent misappropriation of these technologies by third parties,
particularly where third parties may independently develop similar technologies,
duplicate any of the Company's technologies or design around any proprietary
technologies owned by the Company. Any such misappropriation could have a
material adverse effect on the Company. Although the Company does not believe
any of its proprietary technologies infringe the patent or other proprietary
rights of third parties, there can be no assurance that infringement claims will
not be asserted against the Company in the future or that any such claims will
not require the Company to enter into license arrangements or result in
litigation. In the event that the Company may be required to obtain licenses
to patents or other proprietary rights of third parties, there can be no
assurance that any required licenses would be made available to the Company on
terms acceptable to the Company, or at all. If the Company does not obtain such
licenses, it could encounter delays in commercializing its BDS technology while
it attempts to design around such patents or could find that the
commercialization of its BDS technology could be foreclosed. In addition, to
the extent that the Company seeks to protect its proprietary technologies
overseas, there can be no assurance that steps taken by the Company to protect
its proprietary technologies will be adequate under the laws of certain foreign
countries, which may not protect the Company's proprietary rights to the same
extent as do the laws of the United States.
The Company relies on secrecy to protect its proprietary technologies in
addition to patent protection, especially where patent protection is not
believed to be appropriate or obtainable. The Company has entered into
confidentiality agreements with its employees, licensors and certain of its
collaborators and consultants. There can be no assurance that such obligations
of confidentiality will be honored, that other parties will not otherwise gain
access to the Company's trade secrets or that the Company can effectively
protect its rights to its unpatented trade secrets.
Dependence on Collaborators. The Company has been dependent on
collaborative relationships for development of certain key components of the BDS
process, and the Company's commercialization strategy contemplates continued
dependence on collaborative relationships. The Company has signed an agreement
with M. W. Kellogg to provide the basic engineering designs necessary for BDS
implementation at customer sites and an agreement with Petrolite relating to the
development of the Company's BDS technology and the construction and operation
of the Company's pilot plant. Each alliance partner is currently providing
technical assistance during the development of the BDS process. The Company
also has entered into an alliance with Total relating to the application of the
BDS process to diesel fuel, an alliance with Koch to develop the BDS process for
certain gasoline products, an alliance with Texaco to develop a process for
desulfurizing high-sulfur crude oil, and an alliance with Carbide/Graphite
relating to the development of the BDS process for the desulfurization of decant
oil. Collaborative arrangements involve risks that the participating partners
may disagree on business decisions and strategies, which may result in delays,
additional costs or litigation. The inability of the Company to successfully
maintain existing collaborative relationships or enter into new collaborative
relationships could have a material adverse effect on the Company.
Need for Additional Funds. EBC's operations to date have consumed
substantial amounts of cash. The negative cash flow from operations is expected
to continue over the foreseeable future. The Company believes that its existing
capital resources will be sufficient to fund its operations through year end
1998. Thereafter, the Company may need to raise additional funds to continue
development and commercialization of its biorefining technology. The Company
may seek additional funding through public or private financings, including
equity financings, and through collaborative arrangements. Adequate funds for
these purposes, whether obtained through financial markets or
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<PAGE>
collaborative or other arrangements with corporate partners or from other
resources, may not be available when needed or on terms acceptable to the
Company. The Company's inability to raise funds when needed may require the
Company to delay, scale back or eliminate some or all of its research and
product development programs.
Limited Marketing Experience. The Company has only limited experience
marketing its BDS technology, and has assembled only a small sales and marketing
staff. There can be no assurance that the Company will be able to successfully
implement its sales and marketing plan.
Dependence on Key Personnel. The Company is dependent on the efforts of
its executive officers, scientists and other key employees, the loss of any one
of whom could have a materially adverse effect on the Company's business.
Shortages of qualified scientists within certain disciplines may occur and
competition for the services of qualified scientists may intensify. The Company
may not be successful in recruiting or retaining such personnel in the future.
Government Regulation. Certain of the Company's current and planned
operations are, or may be, subject to regulation under various federal and state
laws pertaining to protection of the environment and employee health and safety.
In the course of its current research and development activities, the Company
generates small quantities of solid and hazardous wastes that are subject to
regulation under the Resource Conservation and Recovery Act ("RCRA") and various
other federal and state regulations. The research and development activities of
the Company are also subject to the Occupational Safety and Health Act ("OSHA")
and similar state laws and regulations. Upon commercialization of the Company's
technology, the Company's operations will be subject to the full scope of
environmental and employee health and safety regulations including not only RCRA
and OSHA, but also the Clean Air Act, the Federal Water Pollution Control Act,
the Toxic Substances Control Act and other applicable state and federal
environmental laws and regulations. In addition, commercialization of the BDS
technology outside the United States will require compliance with the
regulations of foreign countries. Failure to comply with applicable regulations
could have an adverse effect on the Company.
Competition. The Company expects to encounter competition from suppliers
of existing desulfurization technology in the marketing of the Company's BDS
units. These companies have well-established relationships in the refining
industry and have substantially greater financial, technical and human resources
than the Company. In addition, new desulfurization technologies could be
developed that are competitive with or superior to the Company's BDS technology.
Uncertainty Relating to Exercise of Petrolite Option. In October 1996, the
Company entered into an agreement with Petrolite providing the Company with the
option to amend the terms of its strategic alliance with Petrolite. Under the
agreement, the Company made an initial payment of $1 million to Petrolite in
December 1996 in exchange for the option and the extension of Petrolite's
obligations to provide operational and technical support for the pilot plant
from September 1, 1996 through December 31, 1998. If the Company exercises its
option, the percentage of site license fees and adjusted gross profit payable to
Petrolite will be reduced to 9.5% from 22%, in exchange for which the Company
will (i) assume responsibility for servicing the BDS units on site at customer
locations, (ii) pay Petrolite an additional $9 million in cash and (iii) issue
to Petrolite a warrant entitling Petrolite to purchase 138,889 shares of Common
Stock at an exercise price of $7.20 per share. The Company may exercise the
Petrolite option at any time on or before the earlier to occur of (i) ten
business days following the close of any equity financing by the Company in
which the gross cash proceeds raised in such financing (together with cash
proceeds raised by the Company in any other equity financing after the date of
the option agreement, if applicable) equal or exceed $25 million and (ii)
December 30, 1998. The Company does not presently intend to exercise the
Petrolite option until it has raised additional funds or received additional
capital. No assurance can be made that the Company will exercise the Petrolite
option.
Concentration of Stock Ownership. The Company's officers and directors and
Ethyl Corporation beneficially owned approximately 32.0% of the Company's Common
Stock as of March 31, 1997. Accordingly, these stockholders will be able to
exercise significant influence over all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions.
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Volatility of Stock Price. The market price of the Common Stock, like that
of the common stock of many other emerging technology companies, has been highly
volatile. In the future, the market price of the Common Stock could fluctuate
substantially due to a variety of factors, including the results of research or
collaborative programs relating to the Company or its competitors, governmental
regulation, developments in patent or other proprietary rights of the Company or
its competitors, fluctuations in the Company's operating results and
fluctuations in the market prices of emerging technology stocks and market
conditions in general.
Effects of Certain Charter and Bylaws Provisions and Stockholder Rights
Plan. Certain provisions of the Company's Restated Certificate of
Incorporation, as amended, and Bylaws and the Company's Rights Plan may have the
effect of discouraging proposals by third parties to acquire a controlling
interest in the Company, which could deprive stockholders of the opportunity to
consider an offer that would be beneficial to them.
Future Sales of Common Stock. On March 31, 1997, 11,605,377 shares of
Common Stock were outstanding, 186,666 shares of Common Stock were issuable upon
conversion of shares of the Company's Series A Convertible Preferred Stock
(including the Series A Convertible Preferred Stock issuable upon the exercise
of outstanding warrants), 4,982,200 shares of Common Stock were issuable upon
conversion of shares of the Preferred Stock (including the Preferred Stock
issuable upon the exercise of outstanding warrants) and 2,030,032 shares of
Common Stock were issuable upon the exercise of outstanding options. Future
sales of substantial amounts of the Company's Common Stock in the public market
could have an adverse effect on prevailing market prices of the Common Stock.
Forward-Looking Statements and Associated Risks. This Prospectus contains
forward-looking statements. The words "anticipate," "believe," "expect,"
"estimate," "project" and similar expressions are intended to identify forward-
looking statements. Such statements reflect the Company's current views with
respect to future events and financial performance and are subject to certain
risks, uncertainties and assumptions, including the risk factors set forth
above. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, believed, expected, estimated or projected.
USE OF PROCEEDS
The Company will not receive any proceeds from the sales, if any, of Common
Stock by the Selling Stockholders to the public. Upon the exercise of Warrants
to acquire Preferred Stock that is convertible into shares registered hereunder,
the Company will receive the exercise price of $50.00 per share of Preferred
Stock acquired. The costs and expenses incurred in connection with the
registration under the Securities Act of the offering described herein are
estimated to be $35,000 and will be paid by the Company. Each Selling
Stockholder will pay all brokerage fees and commissions, if any, incurred in
connection with the sale of Shares by such party.
-8-
<PAGE>
SELLING STOCKHOLDERS
The offering of the Shares is being registered under the Securities Act in
accordance with the terms of agreements entered into by the Company with the
Selling Stockholders in connection with the private placement and exchange
offering in which the Company issued 702,100 shares of Preferred Stock and in
accordance with the terms of the Warrants issued to Alex. Brown & Sons
Incorporated, the placement agent for the private placement.
The following table sets forth the name of each Selling Stockholder, the
number of shares of Common Stock beneficially owned by each Selling Stockholder
as of the date of this Prospectus, the number of shares of Common Stock being
offered by each Selling Stockholder hereby, and the percentage of the Company's
Common Stock to be beneficially owned by each Selling Stockholder after the
offering (assuming that all shares covered by this Prospectus are sold). Common
Stock ownership information is based solely upon reports furnished to the
Company by the respective Selling Stockholders pursuant to the rules of the
Commission.
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO THE OFFERING/(1)/ SHARES OF AFTER THE OFFERING/(1)/
---------------------------- COMMON STOCK --------------------------
NUMBER COVERED BY THIS NUMBER
NAME OF SELLING STOCKHOLDER OF SHARES PERCENTAGE PROSPECTUS (1) OF SHARES PERCENTAGE
--------------------------- -------------- ----------- ---------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Alex. Brown & Sons Incorporated/(2)/ 296,539 /(3)/ 2.5% 195,303 /(4)/ 101,236 *
American Express Trust Company 241,379 2.0% 241,379 -- *
Arthur D. Little Employee
Investment Plan 126,379 1.1% 41,379 85,000 *
Asphalt Green, Inc. 9,231 * 8,965 266 *
Baker NYE Securities, LP 52,068 * 52,068 -- *
Banque Ferrier Lullin (Luxembourg) S.A. 20,690 * 20,690 -- *
Banque SCS Alliance SA 34,483 * 34,483 -- *
Brearley School General Investment Fund 10,345 * 10,345 -- *
Butler Family LLC 10,345 * 10,345 -- *
Cantor Fitzgerald & Co. 11,724 * 11,724 -- *
Chapin School Ltd. - Endowment Fund 17,241 * 17,241 -- *
City of Milford Pension &
Retirement Plan 77,586 * 27,586 50,000 *
Dean Witter Foundation 10,345 * 10,345 -- *
Declaration of Trust for the Defined Benefit
Plans of ICI America Holdings, Inc. 56,809 * 55,172 1,637 *
Declaration of Trust for the
Defined Benefit Plans of Zeneca
Holdings, Inc. 36,926 * 35,862 1,064 *
Delaware State Employees
Retirement Fund 190,310 1.6% 184,827 5,483 *
Ethyl Corporation 1,319,316/(5)/ 10.4% 1,103,448 215,868/(5)/ 1.7%
Farmers Group, Inc. 73,842 * 70,344 3,498 *
Farmers Group, Inc. - Pension Plan 100,627 * 95,862 4,765 *
Farmers Group, Inc. - Profit Sharing B 31,129 * 29,655 1,474 *
Farmers Group, Inc. - Rabbi Trust 2 1,447 * 1,379 68 *
Farmers Insurance Exchange 207,042 1.8% 197,241 9,801 *
Fire Insurance Exchange 33,301 * 31,724 1,577 *
ICI American Holdings Pension Trust 82,758 * 82,758 -- *
General Motors Employees
Domestic Group Trust 689,655 5.6% 689,655 -- *
David C. Halpert 2,759 * 2,759 -- *
Helen Hunt 10,896 * 6,896 4,000 *
Investors Guaranty Life 5,027 * 4,827 200 *
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO THE OFFERING/(1)/ SHARES OF AFTER THE OFFERING/(1)/
---------------------------- COMMON STOCK --------------------------
NUMBER COVERED BY THIS NUMBER
NAME OF SELLING STOCKHOLDER OF SHARES PERCENTAGE PROSPECTUS(1) OF SHARES PERCENTAGE
--------------------------- -------------- ----------- ---------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
The Jenifer Altman Foundation 20,097 * 18,620 1,477 *
Keystone, Inc. 732,862 6.2% 275,862 457,000 3.8%
Leonard Kingsley 6,896 * 6,896 -- *
Lazar Foundation 10,345 * 10,345 -- *
Mary Ann S. Hamilton Trust for Self 10,345 * 10,345 -- *
Meehan Investment Partnership I, L.P. 10,447 * 6,896 3,551 *
Mid-Century Insurance Company 83,977 * 80,000 3,977 *
Millenium Trading Co., LP 52,068 * 52,068 -- *
Domenic J. Mizio 13,793 * 13,793 -- *
NALCO Chemical Company
Retirement Trust 27,586 * 27,586 -- *
National Federation of Independent
Business Corporate Account 16,236 * 13,793 2,443 *
Ohio State Life 14,478 * 13,793 685 *
Public Employee Retirement
System of Idaho 142,606 1.2% 41,379 1 01,227 *
Roanoke College 28,793 * 13,793 15,000 *
Henry A. Rosenberg, Jr. 13,793 * 13,793 -- *
Warren L. Schwerin 44,900 * 27,586 17,314 *
St. George's Trust Company Limited,
as Trustee of the Wilbur Boat Trust 13,793 * 13,793 -- *
State of Delaware Retirement Trust 103,448 * 103,448 -- *
State of Oregon/ZCG PERS 714,797 5.4% 656,552 58,275 *
Robert J. Suslow 10,345 * 10,345 -- *
Tab Products Co. Pension Plan 20,690 * 20,690 -- *
Truck Insurance Exchange 28,196 * 26,896 1,300 *
Trustees of Amherst College 33,793 * 13,793 20,000 *
Van Loben Sels Foundation 17,241 * 17,241 -- *
Veer Palthe Voute N.V. 27,586 * 27,586 -- *
Warren Investment Group Ltd. LLC 10,345 * 10,345 -- *
Wells Family LLC 27,586 * 27,586 -- *
Harold and Grace Willens JTWROS 6,896 * 6,896 -- *
Wilson T. Gildee
Charitable Remainder Trust,
Wilson T. Gildee as Trustee 13,793 * 13,793 -- *
Wolfson Investment Partners LP 13,793 * 13,793 -- *
Andrew D. Zacks 1,379 * 1,379 -- *
Barrie Ramsay Zesiger 20,690 * 20,690 -- *
Albert L. Zesiger 34,483 * 34,483 -- *
Zeneca Holdings Pension Trust 62,068 * 62,068 -- *
</TABLE>
_________________________
* Represents less than 1%
/(1)/ The table reflects the shares of Common Stock beneficially owned by each
Selling Stockholder and includes the number of Shares being registered
hereunder that each Selling Shareholder would receive upon conversion of
all shares of Preferred Stock, as well as the shares of Common Stock
otherwise owned by such Selling Stockholder. While the Selling
Stockholders have not expressed a specific intention as to the number of
Shares to be sold, the
-10-
<PAGE>
table shows the beneficial ownership that would
result if all Shares issuable upon conversion of the Preferred Stock were
sold. The shares of Common Stock issuable as stock dividends on the
Preferred Stock have not been included in the table above, although the
resale of such Shares is being registered hereunder.
/(2)/ Alex. Brown & Sons Incorporated ("Alex. Brown") served as agent for the
private placement of the Preferred Stock in February 1997 and co-agent for
the Company's private placement of Series A Convertible Preferred Stock
completed in October 1994.
/(3)/ Includes 140,131 Shares that Alex. Brown would receive upon the conversion
of the 20,319 shares of Preferred Stock that are issuable upon the
exercise of the Warrants and 101,236 shares that Alex. Brown would receive
upon the conversion of 16,704 shares of Series A Convertible Preferred
Stock that are issuable upon the exercise of warrants issued in connection
with the Company's 1994 private placement .
/(4)/ Includes 140,131 shares that Alex. Brown would receive upon the conversion
of the 20,319 shares of Preferred Stock that are issuable upon the
exercise of the Warrants.
/(5)/ Excludes 2,136,078 shares of Common Stock beneficially owned by Gryphon
Ventures II, Limited Partnership ("Gryphon"), a limited partnership of
which a wholly-owned subsidiary of Ethyl Corporation ("Ethyl") is the sole
limited partner, and as to which Ethyl has no voting or dispositive power,
based upon information provided in a Schedule 13D filed by Ethyl with the
Securities and Exchange Commission on November 7, 1994, as amended. Mr.
Edward B. Lurier, a director of the Company since 1991, has served since
1984 as Chairman of the Board of Directors of Gryphon Financial Partners,
a venture capital firm which is an affiliate of Gryphon.
PLAN OF DISTRIBUTION
The Selling Stockholders may offer the shares of Common Stock subject to
this Prospectus from time to time for their own account in transactions on The
Nasdaq National Market, in negotiated transactions or otherwise, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the shares to or through broker-dealers and such broker-
dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders or the purchasers of the shares for
whom such broker-dealers may act as agent or to whom they sell as principal or
both (which compensation to a particular broker-dealer might be in excess of
customary commissions). The methods by which the shares may be sold include (i)
a block trade (which may involve crosses) in which the broker or dealer so
engaged will attempt to sell the securities as agent but may position and resell
a portion of the block as principal to facilitate the transaction; (ii)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus; (iii) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (iv)
privately negotiated transactions.
None of the proceeds from the sale of the shares of Common Stock subject to
this Prospectus by the Selling Stockholders will be received by the Company.
The Company has agreed to bear certain expenses in connection with the
registration and sale of the shares being offered by the Selling Stockholders.
The Selling Stockholders and any broker-dealers participating in the
distribution of the shares of Common Stock subject to this Prospectus may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
profit on the sale of Shares by the Selling Stockholders and any commissions
received by any such broker-dealers may be deemed to be underwriting commission
under the Securities Act.
The shares of Common Stock subject to this Prospectus have not been
registered for sale by the Selling Stockholders under the securities laws of any
state as of the date of this Prospectus. Brokers or dealers effecting
transactions in the shares should confirm registration thereof under the
securities laws of the states in which such transactions occur, or the existence
of any exemption from registration.
If underwriters are used in any offering of shares of Common Stock, the
underwriter or underwriters with respect to such offering will be named in a
Prospectus Supplement. Only underwriters named in a Prospectus Supplement will
be deemed to be underwriters in connection with the shares of Common Stock
offered thereby. Firms not so named will have no direct or indirect
participation in the underwriting of such Common Stock, although such a firm may
participate in the distribution of such Common Stock under circumstances
entitling it to a dealer's commission. Unless otherwise set forth in the
Prospectus Supplement relating to such offering, any underwriting
-11-
<PAGE>
agreement pertaining to any offering of shares of Common Stock will (i) entitle
the underwriters to indemnification by the Company and the Selling Stockholders
against certain civil liabilities under the Securities Act; (ii) provide that
the obligations of the underwriters will be subject to certain conditions
precedent; and (iii) provide that the underwriters will be obligated to purchase
all shares of such Common Stock so offered if any shares are purchased. If
underwriters are used in any offering of Common Stock, the names of such
underwriters, the anticipated date of delivery and other material terms of the
transaction will be set forth in the Prospectus Supplement relating to such
offering.
Underwriters, brokers and dealers may engage in transactions with or
perform services for the Company in the ordinary course of business.
Offers to purchase Common Stock may be solicited, and sales thereof may be
made, by the Selling Stockholders directly to one or more purchasers in fixed
price offerings, in negotiated transactions, at market prices prevailing at the
time of sale or at prices related to such market prices. Certain of such
purchasers may be deemed to be underwriters with respect to any resale by them
of Common Stock so acquired. This Prospectus may be delivered by any such
purchaser in connection with any such resales. Such resales may be through
underwriters, brokers or dealers, or directly to one or more purchasers, all in
the manner described above.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Common Stock
offered hereby are being passed on for the Company by Andrews & Kurth L.L.P.,
The Woodlands, Texas.
EXPERTS
The financial statements incorporated by reference in this Registration
Statement from the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said report.
-12-
<PAGE>
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS NOT QUALIFIED TO
DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH SOLICITATION.
--------------------------
TABLE OF CONTENTS
PAGE
----
Available Information 2
Documents Incorporated by Reference 2
The Company 4
Risk Factors 5
Use of Proceeds 8
Selling Stockholders 9
Plan of Distribution 11
Legal Matters 12
Experts 12
================================================================================
================================================================================
[LOGO OF ENERGY BIOSYSTEMS APPEARS HERE]
6,500,000 SHARES OF
COMMON STOCK
---------------
PROSPECTUS
---------------
APRIL 21, 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below are the expenses expected to be incurred in connection with
the issuance and distribution of the securities registered hereby. With the
exception of the Securities and Exchange Commission registration fee, the
amounts set forth below are estimates and consist exclusively of expenses
incurred in connection with this amendment on Form S-3:
Securities and Exchange Commission registration fee $10,833
Printing and engraving expenses --
Legal fees and expenses 15,000
Accounting fees and expenses 5,000
Blue Sky fees and expenses --
Miscellaneous expenses 4,167
-------
Total $35,000
___________________
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL"), inter alia,
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Similar indemnity is
authorized for such persons against expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement of
any such threatened, pending or completed action or suit if such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and provided further that (unless a court of
competent jurisdiction otherwise provides) such person shall not have been
adjudged liable to the corporation. Any such indemnification may be made only as
authorized in each specific case upon a determination by the stockholders or
disinterested directors or by independent legal counsel in a written opinion
that indemnification is proper because the indemnitee has met the applicable
standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
enterprise, against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would otherwise have the power to indemnify him under Section 145.
The Company maintains policies insuring its and its subsidiaries' officers and
directors against certain liabilities for actions taken in such capacities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
Article Sixth, Section (f) of the Company's Amended and Restated
Certificate of Incorporation, as amended, limits under certain circumstances the
liability of the Company's directors for a breach of their fiduciary duty as
directors. These provisions do not eliminate the liability of a director (i)
for a breach of the director's duty of loyalty
II-1
<PAGE>
to the Company or its stockholders, (ii) for acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the DGCL (relating to the declaration of dividends and
purchase or redemption of shares in violation of the DGCL) or (iv) for any
transaction from which the director derived an improper personal benefit.
The Bylaws of the Company provide for indemnification of the directors,
officers and employees of the Company to the full extent permitted by law. The
Company has entered into indemnification contracts with certain of its directors
and executive officers. The company currently has a liability insurance policy
which insures directors and officers of the Company in certain circumstances.
The policy also insures the Company against losses as to which its directors and
officers are entitled to indemnification.
ITEM 16. EXHIBITS
*5.1 Opinion of Andrews & Kurth L.L.P.
*23.1 Consent of Arthur Andersen LLP
*23.2 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1)
*24.1 Powers of Attorney (included as part of the signature page of this
Registration Statement).
_______________________
* Filed herewith.
ITEM 17. UNDERTAKINGS
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) ((S)
230.424(b) of this chapter) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in the
Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred by paid by a director officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by its
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1933, the
Registrant certifies that is has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of The Woodlands, State of Texas on the 21st day of
April, 1997.
ENERGY BIOSYSTEMS CORPORATION
By: /s/ John H. Webb
----------------
John H. Webb
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of Energy BioSystems Corporation (the "Company") hereby constitutes
and appoints John H. Webb and Paul G. Brown, III, or either of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file this Registration Statement under the Securities Act of 1933,
as amended, and any or all amendments (including, without limitation, post-
effective amendments), with all exhibits and any and all documents required to
be filed with respect thereto, with the Securities and Exchange Commission or
any regulatory authority, granting unto such attorneys-in-fact and agents, and
each of them acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same, as fully to all intents and purposes as he
himself might or could do if personally present, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or any of them, or their substitute
or substitutes, may lawfully do or cause to be done.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John H. Webb President, Chief Executive April 21, 1997
- ---------------------------------- Officer and Vice Chairman
John H. Webb (Principal executive officer)
/s/ Paul G. Brown, III Vice President--Finance and April 21, 1997
- ---------------------------------- Administration (Principal
Paul G. Brown, III financial and accounting
officer)
/s/ Daniel J. Monticello, Ph.D. Vice President--Science and April 21, 1997
- ---------------------------------- Technology, and Director
Daniel J. Monticello, Ph.D.
/s/ Ramon Lopez Chairman of the Board April 21, 1997
- ----------------------------------
Ramon Lopez
/s/ James Comeaux Director April 21, 1997
- ----------------------------------
James Comeaux
/s/ Edward B. Lurier Director April 21, 1997
- ----------------------------------
Edward B. Lurier
/s/ Thomas E. Messmore Director April 21, 1997
- ----------------------------------
Thomas E. Messmore
/s/ William E. Nasser Director April 21, 1997
- ----------------------------------
William E. Nasser
/s/ John S. Patton Director April 21, 1997
- ----------------------------------
John S. Patton
- ----------------------------------
/s/ John T. Preston Director April 21, 1997
- ----------------------------------
John T. Preston
- ----------------------------------
/s/ William D. Young Director April 21, 1997
- ----------------------------------
William D. Young
</TABLE>
II-4
<PAGE>
EXHIBIT 5.1
April 21, 1997
Board of Directors
Energy BioSystems Corporation
4200 Research Forest Drive
The Woodlands, Texas 77381
Gentlemen:
We have acted as counsel to Energy BioSystems Corporation (the "Company")
in connection with the Company's Registration Statement on Form S-3 (the
"Registration Statement") relating to the registration under the Securities Act
of 1993, as amended (the "Securities Act"), of the offer and sale by the Selling
Stockholders identified in the Registration Statement of up to 6,500,000 shares
(the "Shares") of the Common Stock, par value $.01 per share ("Common Stock"),
of the Company issuable upon conversion of the Company's Series B Convertible
Preferred Stock, par value $0.01 per share ("Preferred Stock"), or issuable as
stock dividends on the Preferred Stock. Of the 722,419 shares of Preferred
Stock convertible into shares, an aggregate of 702,100 shares of Preferred Stock
were issued upon the closing of a private placement by the Company and 20,319
shares of Preferred Stock are issuable upon the exercise of certain warrants
issued in connection with the private placement.
As the basis for the opinions hereinafter expressed, we have examined such
statutes, regulations, corporate records and documents, certificates of
corporate and public officials, and other instruments as we have deemed
necessary or advisable. In such examination we have assumed the authenticity of
all documents submitted to us as originals and the conformity with the original
documents of all documents submitted to us as copies.
Based on the foregoing and on such legal considerations as we deem
relevant, we are of the opinion that:
1. The Shares issuable by the Company upon the conversion of the Preferred
Stock have been reserved for issuance upon such conversion of the Preferred
Stock, are duly and validly authorized, and when so issued upon conversion of
the Preferred Stock in accordance with the terms thereof, will be validly
issued, fully paid and nonassessable.
2. The Shares issuable by the Company as a stock dividend on the Preferred
Stock have been reserved for issuance, are duly and validly authorized, and
when so issued as a stock dividend on the Preferred Stock will be validly
issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and reference to our firm under the caption "Legal
Matters" in the Prospectus included therein.
Very truly yours,
/s/ ANDREWS & KURTH L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of Energy BioSystems
Corporation of our report dated March 7, 1997 included in Energy BioSystems
Corporation's Annual Report on Form 10-K for the year ended December 31, 1996
and to all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
The Woodlands, Texas
April 21, 1997
