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Pluvia Securities Research Announces Investment Opinion on Energy BioSystems Corporation.

Business Editors

NOTE TO EDITORS: The following is an investment opinion issued

by Pluvia Securities Research


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 &uot;pilot plant.&uot; 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 &uot;build and operate a pilot plant in one of its European industrial facilities during 1999.&uot;

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.

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 &uot;in progress.&uot;

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.

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 &uot;BUY&uot; recommendation and a very ambitious 68.25 price target.

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, 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.
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Publication:Business Wire
Date:Feb 11, 2000
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