<PAGE>
As filed with the Securities and Exchange Commission on August 31, 1999
Registration No. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
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 Number)
4200 RESEARCH FOREST DRIVE
THE WOODLANDS, TEXAS 77381
(281) 419-7000
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)
PETER POLICASTRO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
4200 RESEARCH FOREST DRIVE
THE WOODLANDS, TEXAS 77381
(281) 419-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------
Copies to:
JEFFREY R. HARDER
ANDREWS & KURTH L.L.P.
2170 BUCKTHORNE PLACE, SUITE 150
THE WOODLANDS, TEXAS 77380
(713) 220-4801
------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of the Registration Statement.
If the only securities being registered on this form are being
offered pursuant to dividend or 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, 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 statement 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 to be made pursuant to
Rule 434, please check the following box. |_|
------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate offering Amount of registration
Securities to be registered registered per share (1) price (1) fee
- --------------------------------------- ------------------- --------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per 4,874,943 $2.05 $9,993,633 $2,778.23
share..................................
======================================= =================== ===================== ====================== ========================
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the registration fee based on the average of the high and low sales
price per share of the Registrant's common stock on the Nasdaq National
Market on August 26, 1999.
------------------------------------
THIS REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 8(a) OF THE SECURITIES ACT OF 1933.
- -------------------------------------------------------------------------------
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to completion, dated August 31, 1999
4,874,943 SHARES
ENERGY BIOSYSTEMS CORPORATION
COMMON STOCK
The selling stockholders listed on page 8 may offer and resell up to
4,876,443 shares of our common stock under this prospectus, for each of their
own accounts. The number of shares the selling stockholders may sell includes
shares of common stock currently issued and outstanding, as well as shares of
common stock that they may receive if they exercise their warrants. We will
not receive any proceeds from these sales, but we will receive proceeds from
the exercise of any warrants.
Our common stock is quoted on the Nasdaq National Market under the
symbol "ENBC." On August 26, 1999, the last sale price of our common stock
was $2.03.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE
SEE "RISK FACTORS" BEGINNING ON PAGE 5.
THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY
STATE SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this prospectus is August 31, 1999.
<PAGE>
RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. YOU SHOULD
CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, TOGETHER WITH ALL OF THE OTHER
INFORMATION INCLUDED IN THIS PROSPECTUS, IN DECIDING WHETHER TO INVEST IN THE
COMMON STOCK.
THIS PROSPECTUS ALSO CONTAINS FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN FACTORS, INCLUDING THE RISKS FACED BY US DESCRIBED BELOW AND
ELSEWHERE IN THIS PROSPECTUS.
- - COMMERCIALIZATION OF OUR TECHNOLOGY IS RISKY BECAUSE OF NUMEROUS
UNCERTAINTIES
Since our inception, we have primarily researched and developed our
biocatalytic desulfurization, or BDS, process. We must conduct substantial
additional research, development and testing to determine the commercial
viability of the BDS process. We have not proven this process beyond a
limited extent in laboratory, bench-scale and pilot plant trials. Our ability
to make BDS commercially viable depends greatly on our success in:
1. achieving improvement of our biocatalyst, which is the
biological agent responsible for the desulfurization,
including the manipulation of the genes responsible for
desulfurization activity to increase the reaction rate and
extent of the biocatalyst;
2. improving the rate at which sulfur molecules transfer from
petroleum to the biocatalyst;
3. more fully developing the catalyst regeneration process;
4. developing a bioreactor for use with the BDS process capable
of operating at commercial levels of throughput and
desulfurization;
5. identifying economically viable processes for commercial-scale
sulfur coproduct recovery; and
6. marketing the BDS process effectively.
We may never accomplish these objectives, or we may take a longer
time than anticipated to accomplish them. If we take a longer time than
anticipated to accomplish them, we may require additional capital to continue
the development and commercialization of the BDS process. We cannot assure
that capital will be available or that we will successfully commercialize the
BDS process.
- - WE HAVE A HISTORY OF OPERATING LOSSES AND WE MAY NOT BE PROFITABLE IN
THE FUTURE
We have incurred net losses since our inception and expect losses to
increase in the foreseeable future as we continue to expend capital for the
ongoing development and commercialization of our BDS technology. Our only
revenue to date from the use or sale of our technology has been the initial
payment of a license fee of $200,000 in 1998. At December 31, 1998, we had an
accumulated deficit of $67.2 million. We remain uncertain about the amount of
time required for us to become profitable. We cannot ensure that we will
achieve sustained profitability, if at all.
- - WE WILL NEED ADDITIONAL FUNDS
Our operations to date have consumed substantial amounts of cash. We
expect this negative cash flow from operations to continue in the foreseeable
future. We believe that our existing capital resources will be sufficient to
fund our operations through mid 2001. Thereafter, we will need to raise
additional funds to continue development and commercialization of our
technology. We may seek additional funding through public or private
financings, including equity financings, and through collaborative
arrangements. Adequate funds may not be
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<PAGE>
available when needed or on terms acceptable to us. Our inability to raise
funds when needed may require us to delay, scale back or eliminate some or
all of our research and product development programs.
- - WE WILL INITIALLY REQUIRE A THIRD PARTY TO MANUFACTURE OUR BIOCATALYST
We intend to manufacture, at our own facility, a quantity of
biocatalyst sufficient only for our in-house research and pilot plant needs.
We expect that initially a third party will manufacture the biocatalyst to be
employed in the commercial BDS process, including its manufacture at each BDS
unit site for startup quantities. We have discussed non-exclusive biocatalyst
supply arrangements with several parties we believe capable of satisfying our
supply requirements. If we fail to enter into agreements for the supply of
commercial quantities of biocatalyst, we may establish our own fermentation
facilities. This could delay commercialization of the BDS process and require
significant capital expenditures.
- - WE CANNOT ASSURE THAT THE MARKET WILL ACCEPT THE BDS PROCESS
The BDS process will require significant capital expenditures by
refiners and producers. Historically, the refining and oil production
industries have been reluctant to accept new technologies. We may have
difficulty in obtaining these industries' acceptance of the BDS process.
Also, economic conditions in these industries' may affect the rate of
purchase of our BDS process. These industries have had periods of depressed
profitability, and fluctuations in the price of crude oil and finished
products substantially affect their performance. Oil production and drilling
activity greatly depend on the level and volatility of oil prices.
- - WE RELY ON STRINGENT ENVIRONMENTAL REGULATIONS TO CREATE DEMAND FOR
OUR TECHNOLOGY
Demand for the BDS process depends greatly on legislation and
regulations in the US, Europe and Asia that specify stringent environmental
quality standards and that impose penalties for noncompliance. Amendments to
the federal Clean Air Act required the US Environmental Protection Agency, or
EPA, to develop maximum sulfur content standards for highway diesel fuel and
new standards for gasoline content. In response, the EPA promulgated
regulations specifying the maximum sulfur content of highway diesel fuel in
1990 and regulations for a reformulated gasoline program in 1994. Western
Europe and certain Asian counties have adopted similar regulations on the
maximum sulfur content of diesel fuel. We expect 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 our BDS process.
- - WE DEPEND ON A STRONG PATENT POSITION AND PROPRIETARY TECHNOLOGIES
Our success depends heavily upon our proprietary technologies. In
total, we have rights to 27 US and 35 foreign patents. In addition, we have
13 patent applications pending in the US patent office and more than 70
foreign patent applications pending to cover the BDS technology and the
molecular cloning of the biocatalyst genes. We cannot ensure the scope,
validity or value of such patents, patent applications or related
intellectual property rights. Furthermore, we cannot ensure that the steps we
have taken to protect these 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 our technologies or design around any of our proprietary technologies.
Any misappropriation could materially and adversely affect us. Although we
believe that none of our proprietary technologies infringe the patent or
other proprietary rights of third parties, we cannot assure that infringement
claims will not be asserted against us in the future or that any such claims
will not require us to enter into license arrangements or result in
litigation. In the event that we are required to obtain licenses to patents
or other proprietary rights of third parties, we cannot assure that any
required licenses would be made available to us on terms acceptable to us, or
at all. If we do not obtain such licenses, we could face delays in
commercializing our BDS technology or find that we cannot commercialize our
BDS technology while we attempt to design around such patents. In addition,
to the extent that we seek to protect our proprietary technologies overseas,
we cannot assure
-3-
<PAGE>
that our actions to protect our proprietary technologies will be adequate
under the laws of certain foreign countries, which may not protect our
proprietary rights to the same extent as do the laws of the United States.
We rely on secrecy to protect our proprietary technologies in
addition to patent protection, especially where patent protection is not
believed to be appropriate or obtainable. We have entered into
confidentiality agreements with our employees, licensors and certain of our
collaborators and consultants. We cannot ensure that these parties will honor
their obligations of confidentiality, that other parties will not otherwise
gain access to our trade secrets or that we can effectively protect our
rights to our unpatented trade secrets.
- - WE DEPEND ON COLLABORATORS FOR ASSISTANCE IN PRODUCT DEVELOPMENT
Due in part to our small size, we depend on collaborative
relationships for development of certain key components of the BDS process,
and our commercialization strategy requires continued dependence on these
relationships. We signed an agreement with Kellogg Brown & Root, or Kellogg,
to provide the basic engineering designs necessary for BDS implementation at
customer sites. We entered into alliances with:
1. TOTAL Raffinage Distribution, S.A., or TOTAL, relating to the
application of the BDS process to diesel fuel;
2. Koch Refining Company, or Koch, to develop the BDS process for
certain gasoline products; and
3. Texaco Group, Inc., or Texaco, to develop a process for
desulfurizing high-sulfur crude oil.
Each alliance partner currently provides technical assistance during
the development of the BDS process. Collaborative arrangements involve risks
that the participating partners may disagree on business decisions and
strategies, which may result in delays, additional costs or litigation. Our
inability to successfully maintain existing collaborative relationships or
enter into new collaborative relationships could materially and adversely
affect us.
- - WE HAVE LIMITED MARKETING EXPERIENCE
We have limited experience marketing our BDS technology, and we have
assembled only a small sales and marketing staff. We cannot ensure our
ability to successfully implement our sales and marketing plan.
- - WE RELY HEAVILY ON A FEW KEY EMPLOYEES FOR MANAGEMENT AND PRODUCT
DEVELOPMENT EFFORTS
We depend on the efforts of our executive officers, scientists and
other key employees, the loss of any one of whom could have materially and
adversely affect us. Shortages of qualified scientists within certain
disciplines may occur and competition for the services of qualified
scientists may intensify. We may not succeed in recruiting or retaining these
personnel in the future.
- - WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION
Various federal and state laws regarding protection of the
environment and employee health and safety may subject certain of our current
and planned operations to regulation. In our current research and development
activities, we generate small quantities of solid and hazardous wastes that
are subject to regulation under the Resource Conservation and Recovery Act,
or RCRA, and various other federal and state regulations. Our research and
development activities are also subject to the Occupational Safety and Health
Act, or OSHA, and similar state laws and regulations. Upon completion of the
development of our technology, our 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, or TSCA, and other
applicable state and federal environmental laws and regulations. In addition,
sales of the BDS technology outside the US will require compliance with the
regulations of foreign countries. Failure to comply with applicable
regulations may adversely affect us.
-4-
<PAGE>
- - WE FACE HEAVY COMPETITION
We expect competition from suppliers of existing desulfurization
technology and processes in place at oil refineries. These companies have
well-established relationships in the refining industry and have
substantially greater financial, technical and human resources than us. In
addition, other companies may develop new desulfurization technologies
competitive with or superior to our BDS technology.
- - WE HAVE A CONCENTRATION OF STOCK OWNERSHIP AMONG OFFICERS AND DIRECTORS
Our officers and directors and Ethyl Corporation, which has the
right to designate a director, beneficially owned approximately 15% of our
common stock as of July 31, 1999. Accordingly, these stockholders can
exercise significant influence over all matters requiring stockholder
approval, including the election of directors and approval of significant
corporate transactions.
- - OUR STOCK PRICE IS VOLATILE
The market price of our common stock, like other emerging technology
companies, has been highly volatile. In the future, the market price of our
common stock could fluctuate substantially due to a variety of factors,
including the results of research or collaborative programs relating to us or
our competitors, governmental regulation, developments in patent or other
proprietary rights of us or our competitors, fluctuations in our operating
results and fluctuations in the market prices of emerging technology stocks
and market conditions in general.
- - DIVIDENDS ON OUR PREFERRED STOCK DILUTE OWNERSHIP IN OUR COMMON STOCK
AND CREATE A DEFICIENCY IN BOTH FIXED CHARGES AND IN PREFERRED STOCK
DIVIDEND COVERAGE
We pay dividends on our preferred stock with our common stock,
although we may pay dividends in cash or a combination of common stock and
cash. Dividends will be payable on the preferred stock only when, as and if
declared by our Board of Directors as permitted under Delaware law. We have
incurred net losses since our inception, and we expect our losses to increase
in the foreseeable future. While we intend to pay dividends on the preferred
stock in common stock, we anticipate that we will continue to incur losses
and thus will continue to have a deficiency in fixed charges and preferred
stock dividend coverage. Preferred stock dividends may be paid only out of
capital surplus (within the meaning of the Delaware General Corporation Law)
or out of our net profits for the fiscal year in which the dividend is
declared and the preceding fiscal year. Unpaid dividends do not earn
interest. Dividends may be paid from a portion of the net proceeds of this
offering. We have issued a total of 564,411 shares of common stock to date as
dividends on the preferred stock. In addition, the dividend payment due on
the Series B Preferred Stock for May 1999 has not been paid and is in arrears.
- - CERTAIN CHARTER AND BYLAW PROVISIONS AND OUR STOCKHOLDER RIGHTS PLAN
MAY NEGATIVELY AFFECT THE STOCKHOLDERS
Certain provisions of our charter, bylaws and rights plan may
discourage proposals by third parties to acquire a controlling interest in
us, which could deprive stockholders of the opportunity to consider an offer
that would be beneficial to them.
- - FUTURE SALES OF COMMON STOCK MAY NEGATIVELY AFFECT THE STOCKHOLDERS
On June 30, 1999, 6,569,557 shares of our common stock were
outstanding, 1,294,616 shares of common stock were issuable upon conversion
of shares of our preferred stock and 905,492 shares of common stock were
issuable upon the exercise of outstanding options and warrants (including the
preferred stock issuable upon the exercise of outstanding warrants). Future
sales of substantial amounts of our common stock in the public market could
have an adverse effect on prevailing market prices of the common stock and
the marketability of and price obtainable for shares of the common stock.
-5-
<PAGE>
- - OUR COMMON STOCK COULD BE DELISTED FROM NASDAQ
Although our common stock meets the current listing requirements of,
and presently lists on, the Nasdaq National Market, we must maintain certain
minimum financial requirements for continued inclusion on Nasdaq. If we
cannot satisfy Nasdaq's maintenance requirements, Nasdaq may delist our
common stock. In such event, trading in our common stock would thereafter be
conducted in the over-the-counter markets in the so-called "pink sheets" or
the NASD's "Electronic Bulletin Board." Consequently, the liquidity of our
common stock could be impaired, not only in the number of shares which could
be bought and sold, but also through delays in the timing of the
transactions, reductions in security analysts' and the news media's coverage
of us, and lower prices for our common stock than it might otherwise attain.
- - STOCKHOLDERS FACE THE RISKS OF HOLDING "PENNY STOCKS"
If Nasdaq delisted our common stock, it could become subject to Rule
15g-9 under the Securities and Exchange Act of 1934, as amended, or the
Exchange Act, which imposes additional sales practice requirements on
broker-dealers which sell such securities to persons other than established
customers and "accredited investors" (generally, individuals with net worths
in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000
together with their spouses). For transactions covered by this rule, a
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written consent to the transaction prior to sale.
Consequently, the rule may adversely affect the ability of the holders of our
common stock to sell their shares in the secondary market.
Regulations of the Securities and Exchange Commission, or the
Commission, define a "penny stock" to be any non-Nasdaq equity security that
has a market price (as therein defined) of less than $5.00 per share or with
an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require delivery, prior to any transaction in a penny stock, of a
disclosure schedule prepared by the Commission relating to the penny stock
market. The Commission also requires disclosure about commissions payable to
both the broker-dealer and the registered representative and current
quotations for the securities. Finally, the Commission requires monthly
statements to be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks.
These penny stock restrictions will not apply to our common stock if
Nasdaq continues to list it and has certain price and volume information
provided on a current and continuing basis or meets certain minimum net
tangible assets or average revenue criteria. We cannot ensure that our common
stock will qualify for exemption from these restrictions. Even if our common
stock were exempt from such restrictions, we would remain subject to Section
15(b)(6) of the Exchange Act, which gives the Commission the authority to
prohibit any person engaged in unlawful conduct while participating in a
distribution of a penny stock from associating with a broker-dealer or
participating in a distribution of a penny stock, if the Commission finds
that such a restriction would be in the public interest. If our common stock
were subject to the rules on penny stocks, the market liquidity for our
common stock could be severely and adversely affected.
- - WE MAY BE AFFECTED BY YEAR 2000 COMPUTER PROBLEMS
Many computer software applications and operating programs written
in the past may not properly recognize calendar dates beginning in the year
2000. This failure could cause computer systems to shut down or provide
incorrect information. We plan to prepare our computer systems and related
software to accommodate sensitive information relating to the year 2000. We
expect that any additional costs to prepare these systems and software for
the year 2000 will not be material to our financial condition or results of
operations. We cannot assure that year 2000 related computer problems or
expenses will not arise with our computer systems and software or those of
our vendors and customers.
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<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by
any of the selling stockholders. We will use any proceeds we receive from the
exercise of warrants for general corporate purposes.
SELLING STOCKHOLDERS
This prospectus covers a total of 4,874,943 shares of common stock
to be sold by the selling stockholders, including
- 4,214,820 shares of common stock issued and outstanding
- 660,123 shares of common stock issuable upon exercise of
outstanding warrants
On June 22, 1999, we completed a private placement of 4,214,820
shares of common stock and warrants to purchase 646,623 shares of common
stock.
On August 25, 1999, we granted warrants to purchase 13,500 shares of
our common stock, subject to customary anti-dilution adjustments, to one of
the selling stockholders.
We granted certain registration rights to the investors in the
above-described transactions. This prospectus serves to register all of the
shares of common stock subject to those registration rights.
The table on the following page lists:
- all of the selling stockholders
- the number of shares of common stock owned by each selling
stockholder immediately prior to the private placement;
- the number of shares of common stock (including those shares
of common stock underlying warrants) covered by this
prospectus; and
- the amount of shares of common stock that will be owned by
each selling stockholder assuming that each selling
stockholder sells all of his or her shares of common stock
that this prospectus registers
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<TABLE>
<CAPTION>
SHARES OF COMMON STOCK COVERED BY THIS PROSPECTUS
SHARES OF NUMBER
COMMON STOCK OF SHARES OF
OWNED ISSUABLE UPON COMMON STOCK
PRIOR TO EXERCISE OF OWNED AFTER THE
NAME OF SELLING STOCKHOLDER THE OFFERING(1) OUTSTANDING WARRANTS TOTAL OFFERING
- ---------------------------------------- --------------- ----------- ------------- ------ ---------------
<S> <C> <C> <C> <C> <C>
Dean Anderson............................ 0 69,597 13,919 83,516 0
Asphalt Green, Inc....................... 777 8,000 0 8,000 777
Butler Family LLC........................ 895 12,000 0 12,000 895
R.J. Comeaux............................. 3,427 5,600 0 5,600 3,427
Curran Partners L.P...................... 0 75,000 15,000 90,000 0
Dean Witter Foundation................... 3,152 12,000 0 12,000 3,152
Ethyl Corporation........................ 300,995 138,900 0 138,900 300,995
Larry N. Feinberg........................ 0 125,000 25,000 150,000 0
The Ferris Hamilton Family Trust......... 0 22,000 0 22,000 0
Beverly Flaks............................ 0 30,000 6,000 36,000 0
David A. Flaks........................... 1,524 0 56,648 56,648 1,524
Fred & Lucy Giampino..................... 0 6,000 0 6,000 0
Susan Uris Halpern....................... 0 3,000 0 3,000 0
David C. Halpert......................... 269 3,000 0 3,000 269
Bryan D. Harris.......................... 428 15,000 3,000 18,000 428
Bryan D. Harris, Trustee
Bryan D. Harris..........................
DDS Money Purchase Plan.................. 0 25,000 5,000 30,000 0
Helen Hunt............................... 598 8,000 0 8,000 598
Public Employee Retirement System of
Idaho.................................... 18,505 38,000 0 38,000 18,505
Frederick L. Jacobson.................... 0 6,000 0 6,000 0
The Jennifer Altman Foundation........... 7,744 16,000 0 16,000 7,744
Keystone, Inc............................ 92,244 250,000 50,000 300,000 92,244
Kingdon Associates....................... 0 150,000 30,000 180,000 0
Kingdon Family Partnership, L.P.......... 0 40,000 8,000 48,000 0
Kingdon Partners......................... 0 115,000 23,000 138,000 0
Lazar Foundation......................... 4,467 12,000 0 12,000 4,467
Leonard Kingsley......................... 598 8,000 0 8,000 598
William E. Konrad, Trustee for the
William E. Konrad Trust.................. 126,642 500,000 0 500,000 126,642
M. Kingdon Offshore, NV.................. 0 695,000 139,000 834,000 0
Mary Ann S. Hamilton Trust for Self...... 897 12,000 0 12,000 897
John T. McCamant......................... 0 0 56,648 56,648 0
The Meehan Investment Partnership I, L.P. 598 6,000 0 6,000 598
Thomas E. Messmore....................... 6,428 25,000 5,000 30,000 6,428
City of Milford Pension & Retirement
Fund..................................... 9,838 31,000 0 31,000 9,838
Domenic J. Mizio......................... 1,196 15,000 0 15,000 1,196
Morgan Trust Co. of the Bahamas Ltd. as
Trustee MDG Trust No. BT-2260 U/A/D
11/30/93................................. 0 28,000 0 28,000 0
Nicola Mullen............................ 0 8,000 0 8,000 0
Murray Capital, LLC...................... 0 22,000 0 22,000 0
NFIB Corporate Account................... 4,553 15,000 0 15,000 4,553
William E. Nasser, Trustee, U/I
William E. Nasser, dated 3/17/95......... 0 27,778 0 27,778 0
State of Oregon PERS/ZCG................. 23,684 633,000 0 633,000 23,684
Psychology Associates.................... 5,000 6,000 0 6,000 5,000
J. Daniel Ramsey, III.................... 0 0 126,245 126,245 0
Roanoke College.......................... 3,490 15,000 0 15,000 3,490
SAMCO Capital Markets, Inc............... 0 0 84,163 84,163 0
Special Situations Private Equity
Fund, L.P................................ 0 277,778 0 277,778 0
Tab Products Co. Pension Plan............ 0 23,000 0 23,000 0
Wells Family LLC......................... 0 23,000 0 23,000 0
Harold & Grace Willens................... 0 8,000 0 8,000 0
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<S> <C> <C> <C> <C> <C>
State of Wisconsin Investment Board...... 0 455,556 0 455,556 0
Wolfson Investment Partners LP........... 3,008 15,000 0 15,000 3,008
Woodlands Operating Company, L.P......... 0 0 13,500 13,500 0
William D. Young and Sharyn L. Young..... 0 83,500 0 83,500 0
A. Carey Zesiger......................... 0 12,000 0 12,000 0
Albert L. Zesiger........................ 5,276 38,111 0 38,111 5,276
Alexa L. Zesiger......................... 0 12,000 0 12,000 0
Anne N. Zesiger.......................... 0 6,000 0 6,000 0
Barrie Ramsay Zesiger.................... 1,794 23,000 0 23,000 1,794
Jeffrey A. Zesiger....................... 0 6,000 0 6,000 0
</TABLE>
- ---------------------------
(1) All of the selling shareholders listed below shall hold less than 1% of
the outstanding shares of our common stock after this offering, except
the following shareholders with the following percentages:
Ethyl Corporation................................ 4.6%
Keystone, Inc.................................... 1.4%
William E. Konrad, Trustee for the William
E. Konrad Trust.................................. 1.9%
Messrs. Comeaux, Messmore and Nasser have served as our directors for
at least the last three years. Mr. Nasser serves as our Chairman of the Board
of Directors. Mr. Young has served as a director since 1997.
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:
1. 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;
2. purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this
prospectus;
3. ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
4. privately negotiated transactions.
We will not receive any of the proceeds from the sale of the shares
of common stock subject to this prospectus by the selling stockholders except
for payment of the exercise price in the event that the warrants are
exercised. We have 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
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<PAGE>
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 agreement pertaining to any offering of shares of common stock
will:
1. entitle the underwriters to indemnification by us and the
selling stockholders against certain civil liabilities under
the Securities Act;
2. provide that the obligations of the underwriters will be
subject to certain conditions precedent; and
3. 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 us 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
Andrews & Kurth, L.L.P. will issue an opinion about the legality of
the shares for us.
EXPERTS
Arthur Andersen LLP, independent public auditors audited the
financial statements included in this prospectus and registration statement
as set forth in its report regarding those financial statements. We have
included their financial statements and report in reliance on the authority
of the firm as an expert in giving the report.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the public reference facilities of the SEC in Washington, D.C., Chicago,
Illinois and New York, New York. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from the SEC's web site at http:\\www.sec.gov.
The SEC allows us to "incorporate by reference" the information we
have filed with them, which means that we can disclose important information
to you by referring you to those documents. The information
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<PAGE>
incorporated by reference is considered to be part of this prospectus and any
later information that we file with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any additional documents we file with the SEC until the offering of
the common stock is terminated. This prospectus is part of a registration
statement on Form S-3 that we filed with the SEC. The documents that we
incorporate by reference are:
1. The description of our common stock contained in our
Registration Statement on Form 8-A filed on January 25, 1993,
as amended by Post-Effective Amendment No. 1 filed with the
Commission on March 15, 1993.
2. Our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.
3. Our Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1999.
4. Our Definitive Proxy Statement for our annual meeting of
shareholders filed on April 27, 1999.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Energy BioSystems Corporation
4200 Research Forest Drive
The Woodlands, Texas 77381
(281) 419-7000
Attention: Secretary
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<PAGE>
- -------------------------------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION (OTHER THAN THIS PROSPECTUS) OR TO MAKE ANY REPRESENTATIONS
AS TO MATTERS NOT STATED IN THIS PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR A
SOLICITATION OF YOUR OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE
THAT WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER AFTER THE DATE OF THIS PROSPECTUS SHALL CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR OUR AFFAIRS HAVE NOT
CHANGED SINCE THE DATE THEREOF.
------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
Prospectus Summary........................................................1
Risk Factors..............................................................2
Use of Proceeds...........................................................7
Business..................................................................7
Selling Stockholders......................................................7
Legal Matters............................................................10
Experts..................................................................10
Where You Can Find More Information......................................10
</TABLE>
- ---------------------------------------------------------------------------
ENERGY BIOSYSTEMS
CORPORATION
4,874,943 Shares
Common Stock
------------------
PROSPECTUS
------------------
August 31, 1999
- ------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the
sale of the Common Stock being registered. All the amounts shown are
estimates except for the registration fee.
<TABLE>
<S> <C>
SEC registration fee............................ $ 2,778
NASD filing fee................................. 17,500
------------------
Blue Sky fees and expenses...................... --
Legal fees and expenses......................... 20,000
------------------
Accounting fees and expenses.................... --
Transfer agent and registrar fees............... ------------------
Miscellaneous fees and expenses................. ------------------
TOTAL $ 40,278
==================
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
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 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
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<PAGE>
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 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
(a) 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
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;
(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.
Provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act")
that are incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under
the Securities Act, 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.
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<PAGE>
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) 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.
Insofar as indemnification for liabilities arising under the
Securities Act 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 Securities 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 or paid by a director,
officer or controlling person of the Registrant 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it 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 Woodlands, Texas, on the 31st day of
August, 1999.
ENERGY BIOSYSTEMS CORPORATION
By: /s/ Peter Policastro
--------------------------------------
Peter Policastro
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 Peter Policastro, William E. Nasser, and Paul
G. Brown, III, or any 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/ Peter Policastro President and Chief Executive Officer August 31, 1999
- ------------------------------------------ (PRINCIPAL EXECUTIVE OFFICER)
Peter Policastro
/s/ Paul G. Brown, III Vice President--Finance and August 31, 1999
- ------------------------------------------ Chief Financial Officer
Paul G. Brown, III (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
/s/ Daniel J. Monticello, Ph.D. Vice President--Research and August 31, 1999
- ------------------------------------------ Development, and Director
Daniel J. Monticello, Ph.D.
/s/ William E. Nasser Chairman of the Board August 31, 1999
- ------------------------------------------
William E. Nasser
/s/ Ramon Lopez Director August 31, 1999
- ------------------------------------------
Ramon Lopez
/s/ R. James Comeaux Director August 31, 1999
- ------------------------------------------
R. James Comeaux
/s/ Edward B. Lurier Director August 31, 1999
- ------------------------------------------
Edward B. Lurier
/s/ Thomas E. Messmore Director August 31, 1999
- ------------------------------------------
Thomas E. Messmore
/s/ John S. Patton Director August 31, 1999
- ------------------------------------------
John S. Patton
/s/ William D. Young Director August 31, 1999
- ------------------------------------------
William D. Young
</TABLE>
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*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.
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<PAGE>
Exhibit 5.1
August 31, 1999
Board of Directors
Energy BioSystems Corporation
4200 Research Forest Drive
The Woodlands, Texas 77380
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 1933, as amended (the "Securities Act"), of the offer and sale by the
Selling Stockholders identified in the Registration Statement of up to 4,874,943
shares (the "Shares") of the Company's Common Stock, par value $0.01 per share,
including 660,123 shares (the "Warrant Shares") issuable upon exercise of
warrants.
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 the Shares have been duly authorized by
the Company and are or, in the case of the Warrant Shares, upon issuance in
accordance with the terms of the Warrants, will be, validly issued, fully paid
and nonassessable.
This opinion is limited in all respects to the General Corporation Law
of the State of Delaware and the laws of the United States of America insofar as
such laws are applicable.
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. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act or the rules and regulations of
the Securities and Exchange Commission thereunder.
Very truly yours,
ANDREWS & KURTH, L.L.P.
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<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 of our report dated March 30, 1999
included in the Annual Report on Form 10-K of Energy BioSystems Corporation for
the year ended December 31, 1998, and to all references to our firm included in
this Registration Statement.
ARTHUR ANDERSEN LLP
Houston, Texas
August 31, 1999
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