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Pluvia Securities Research Announces Investment Opinion on Energy BioSystems
Corporation
SALT LAKE CITY, Feb 11, 2000 (BUSINESS WIRE) -- Pluvia Securities
Research Initiates Coverage of Energy BioSystems Corporation
(Nasdaq:ENBC) with a Sell Recommendation.
According to ENBC's most recent 10Q, since it's inception, ENBC has
spent approximately 10 years and $72,803,126 in an attempt to develop a
commercial process for removing sulfur from petroleum products using
bacteria.
According to ENBC's most recent Annual Report, from 1992 to 1994 ENBC
entered into various joint development agreements with large,
well-known energy corporations to further develop this desulfurization
process. These agreements led to the development of a desulfurization
"pilot plant." The plant was operational from March 1995 but shut down
in the summer of 1998.
According to an August 1998 ENBC press release, one of ENBC's alliance
partners agreed to "build and operate a pilot plant in one of its
European industrial facilities during 1999."
energybiosystems.com
Approximately 18 months later, no pilot plant has been built and
according to ENBC's CFO Paul Brown, in a telephone interview yesterday,
there are no current plans to build this plant. Mr. Brown reasoned
ENBC's current desulfurization technology is not sufficient to warrant
construction of the plant.
In a press release dated march 10, 1998, ENBC announced that Petro Star
Inc. signed the first commercial license agreement for a 5,000
barrel-per-day desulfurization plant, to be installed at Petro Star's
Valdez, Alaska refinery.
energybiosystems.com.
In a conversation with ENBC's CFO Paul Brown yesterday, Mr. Brown
indicated that two years after this agreement was signed, design of the
plant was still "in progress."
To confirm the progress of this plant, Pluvia Capital Research
contacted Walter Gore of Petro Star Inc. in Alaska. In a telephone
interview Mr. Gore indicated that while he was aware of the agreement
with ENBC, he knew of no plans to build a desulfurization plant using
ENBC's technology. However he did indicate Petro Star was working with
another firm, Oakridge National Labs concerning development of a plant
using a different desulfurization technology. This information suggests
ENBC has no pilot plants slated anywhere.
ENBC stock is being promoted by Polaris Capital Group, a one-man stock
promotion firm comprised of J. Daniel Ramsey III. In a phone interview
conducted yesterday with Mr. Ramsey, he indicated during June of 1999,
while working with SAMCO Capital Markets, he assisted ENBC in the sale
of stock and warrants which raised ENBC a total of 7.9 million dollars.
According to an 8K filed by ENBC on July 9, 1999, The company sold
stock and warrants totaling 4,876,443 shares, at prices between $1.80
and 2.40 per share. A subsequent S-3 registration filed by ENBC on
August 31, 1999, registered all 4,876,443 of these shares making them
currently available for sale. edgar-online.com.
According to Mr. Ramsey, after raising money for ENBC he left SAMCO,
formed Polaris Capital Group and wrote a very bullish research report
for his one and only client -- ENBC, giving the company a "BUY"
recommendation and a very ambitious 68.25 price target.
energybiosystems.com.
Mr. Ramsey's report is posted prominently on the ENBC website, where it
appears to be written by an independent analyst. Neither Ramsey's
bullish report nor ENBC's website disclose Ramsey's ownership of
126,000 shares of ENBC stock as required by the Securities & Exchange
Commission.
Reviewing Mr. Ramsey's NASD records, accessible to the public via
nasdr.com, we discovered that while working as a stockbroker
Mr. Ramsey was accused of forging customer documents. Yesterday, in a
telephone interview with Pacific Investigations, Mr. Ramsey
acknowledged these problems and further disclosed Dean Witter had filed
these accusations with the NASD. Mr. Ramsey also disclosed he has been
selling his shares of ENBC into the recent stock rise.
Based on these facts, we are issuing this sell opinion at 19 dollars.
Pluvia Securities Research, their agents, associates, and or employees
have investment positions consistent with the above-stated investment
opinion. |
