Company Overview
| Company Name |
LUCA TECHNOLOGIES INC |
| Company Address |
500 Corporate Circle
Suite C
Golden, CO 80401 |
| Company Phone |
303-534-4344 |
| Company Website |
www.lucatechnologies.com |
| CEO |
Robert L. Cavnar |
| Employees (as of 3/15/2012) |
72 |
| State of Inc |
DE |
| Fiscal Year End |
12/31 |
| Status |
Withdrawn (4/23/2012) |
| Proposed Symbol |
-- |
| Exchange |
Nasdaq National Market |
| Share Price |
11.00-13.00 |
| Shares Offered |
8,500,000 |
| Offer Amount |
$127,075,000.00 |
| Total Expenses |
$1,913,771.00 |
| Shares Over Alloted |
1,275,000 |
| Shareholder Shares Offered |
-- |
| Shares Outstanding |
28,132,708 |
| Lockup Period (days) |
180 |
| Lockup Expiration |
-- |
| Quiet Period Expiration |
-- |
| CIK |
0001414367 |
We estimate that we will receive net proceeds of approximately $93.0 million
from the sale of 8,500,000 shares of common stock offered in this offering
based on an assumed initial public offering price of $12.00 per share (the
mid-point of the price range set forth on the cover page of this prospectus)
and after deducting the estimated underwriting discounts and commissions and
estimated offering expenses payable by us. A $1.00 increase (decrease) in the
assumed initial public offering price of $12.00 per share would increase
(decrease) the net proceeds to us from this offering by approximately $7.9
million, assuming that the number of shares offered by us, as set forth on
the cover page of this prospectus, remains the same and after deducting the
incremental estimated underwriting discounts and commissions payable by us.
If the underwriters exercise their option to purchase 1,275,000 additional
shares, we estimate that our net proceeds will be approximately $107.2 million
based on an assumed initial public offering price of $12.00 per share (the
mid-point of the price range set forth on the cover page of this prospectus).
The following table sets forth our estimated net proceeds from the offering
of shares of our common stock and our uses of such proceeds:
Sources of Net Proceeds (in millions) Uses of Net Proceeds (in millions)
Approximate net proceeds
from this offering $ 93 Acquisitions of natural gas properties (wells
and infrastructure) $ 34
Application of our Restoration Process
to such properties $ 41
Research and development, working capital
and other general corporate purposes $ 18
Total $ 93 Total $ 93
The potential uses of net proceeds from this offering represent our current
intentions based upon our present business plans and business conditions. We
currently intend to use any additional net proceeds which we receive from the
exercise of the underwriters’ option to purchase additional shares for
research and development, working capital and other general corporate
purposes.
Until we apply the net proceeds of this offering to its intended uses, we
intend to invest the net proceeds in interest-bearing demand deposit accounts
or short-term investment-grade securities. We cannot predict whether these
temporary investments of the net proceeds will yield a favorable return, or
any return at all.
We view traditional E&P companies, other biogenic gas creation companies and
alternative clean energy companies as our main competitors.
Traditional E&P competition
The traditional E&P industry is intensely competitive and many of our
competitors in this industry have greater resources than us. Although our
methane is similar to natural gas from other sources, we believe that our
process differentiates us from traditional E&P companies. Our natural gas is
created and produced in real-time in a sustainable manner, rather than
extracted in a rapidly depleting manner from stored and finite resources. We
believe the economics of our Restoration Process are more favorable than that
of traditional E&P companies. Our ability to reuse existing wells and
infrastructure substantially reduces our capital investments, and provides
significant competitive cost advantage relative to shale and traditional E&P
companies.
Access to resources on which we can deploy our technology is critical to
executing our business plan. Most resources suitable for our process are
presently owned by traditional E&P producers. We intend to acquire such
properties and will likely encounter competition from other producers who see
value in owning the properties. Where we cannot acquire properties, we may
form partnerships with owners to deploy our technology.
Biogenic gas creation competition
We are aware of other companies developing and/or planning to commercialize
bioconversion technology that is similar to or potentially overlaps with our
technology portfolio. These companies include Ciris Energy, Inc., or Ciris,
Synthetic Genomics, Inc., or SGI, and Next Fuel, Inc., or Next Fuel.
Ciris is a privately owned company based in Centennial, Colorado. Ciris’ patents
suggest they use a bioconversion process that involves injecting both chemicals
and nutrients down coalbed methane wells. The chemicals serve to solubilize a
fraction of the coal and nutrients stimulate microbes to produce methane. We
understand that Ciris has had limited application of its technology in the
field.
SGI is a privately owned company based in La Jolla, California which conducts a
broad range of research on next generation fuels and chemicals, hydrocarbon
recovery and conversion, and agricultural products. In June 2007, BP invested in
SGI and established a multi-year, research and development collaboration joint
venture focused on microbial-enhanced solutions to increase hydrocarbon
recovery. We believe SGI may not be restricting their process to use of native,
and/or genetically unmodified micro-organisms as we have done.
Next Fuel is a public company (OTCQB: NXFI) with a coal to gas process. We
understand that Next Fuel’s process re-introduces amendments that have been
designed and tested to the wide range of microorganisms that exist in seams of
coal and other carbonaceous deposits. Next Fuel’s proprietary amendments consist
of constituents with depolymerizing and structure-altering functions to
“condition” coal for the follow-up pathways for gas production. Because of the
use of coal depolymerizing and structure-altering chemicals, we believe Next
Fuel’s process may be suited for underground environments different from those
available to our Restoration Process.
Alternative clean energy competition
Production of electricity is one of the primary uses of natural gas. Several
clean technologies are used to produce electricity including wind, solar, hydro,
geothermal, and nuclear power. Although these technologies produce only a minor
percentage of all electricity, several are experiencing fast growth rates. In
addition, many national and local governments are promoting and subsidizing the
use of one or more of these technologies. As a result, we view these
alternatives as competitors to our Restoration Process.
While natural gas-fired technologies compete for a share of the clean energy
market with alternative clean technologies, they can also be used to complement
those that produce power intermittently like wind and solar. Intermittent
sources generally require backup capacity. In many markets, gas-fired power
plants are increasingly used to balance demand loads.
Natural gas can also be used as a low CO2 transportation fuel for CNG vehicles.
As a result, our Restoration Process competes with a range of biofuel
technologies that produce alcohols, bio-gasoline, bio-diesel, and bio-jet fuel.
Company Description
We use biotechnology to create and sustainably produce natural gas. Our
proprietary technology stimulates native microorganisms that reside in
subsurface hydrocarbon deposits, such as coal, oil, and organic-rich shales,
to accelerate the bioconversion of such resources into methane, the
principal
component of natural gas, which we produce and sell using existing
infrastructure. We believe that our business represents a transformative and
disruptive innovation in natural gas creation and production, integrating
sophisticated biotechnology with the traditional natural gas business. We
have performed extensive lab and field testing over the past eight years,
including the deployment of over 500 field level applications of our
technology, which we believe have:
o proved the efficacy of our technology to economically and sustainably
create new methane gas from wells treated with our technology;
o demonstrated that additional value can be created from using existing
natural gas wells and pipeline infrastructure, potentially extending the
economic lives of thousands of wells;
o confirmed that water should be conserved and re-used whenever feasible,
as it is integral to the biogenic creation of new methane gas; and
o demonstrated through extensive testing that the technology is safe to
the public and the environment.
Our Restoration Process, a proprietary bioconversion technology, accelerates
and enhances the naturally occurring methanogenic process of native anaerobic
microbial communities by circulating a mixture of water and nutrients into
reservoirs using existing oil and natural gas wells. Anaerobic microbes have
lived in subsurface coal, oil and shale deposits for millions of years,
feeding on organic matter to create natural gas. This complex microbial gas
creation process is susceptible to interruption by various biological and
other conditions, including traditional coalbed methane development, whereby
drilling and extraction dewaters the coal formations, inhibiting microbial
activity and disrupting natural gas creation. Our initial focus is to use our
Restoration Process to convert coal into methane by restoring subsurface
habitats to enhance the creation and production of natural gas.
Our technology allows us to economically and sustainably create natural gas
from existing wells treated with our technology, thereby utilizing and
extending the life of existing natural gas infrastructure, and minimizing our
need for new drilling. We produce this newly created natural gas from existing
wells and deliver it to the natural gas market via existing pipelines. We
are currently dependent on existing wells and associated infrastructure due
to the fact that the amount of incremental gas produced from the application
of our Restoration Process, combined with current natural gas prices, does
not presently justify the drilling of new wells by us. Unlike the traditional
exploration and production industry’s extraction methods in which production
peaks and then steeply declines as stored hydrocarbons are depleted, we
believe, based on lab and field results, that our Restoration Process
economically and sustainably creates low-cost energy for many years from
wells treated with our technology. We believe
our technology competes favorably with the traditional “hunter/gatherer”
style of natural gas development (find, drill, produce, then abandon) by
allowing a “farming” style of natural gas creation (restore, feed, grow, then
harvest), which continually produces a new crop of natural gas.
Our goal is to be the global market leader in biogenic methane gas creation
and production. We anticipate growing our business primarily through
acquiring natural gas properties, applying our Restoration Process to create
new sustainable sources of natural gas, and producing and selling this
natural gas to existing markets. In the future, we may expand our efforts
to include oil and organic-rich shales.
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We were formed as Clearflame Resources LLC, a Delaware limited liability
company, in April 2003 and changed our name to Luca Technologies LLC in July
2004. We converted into a Delaware corporation on April 20, 2007. Our
principal executive offices are located at 500 Corporate Circle, Suite C,
Golden, Colorado 80401, and our telephone number is (303) 534-4344.
Our website address is www.lucatechnologies.com.
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