S-1/A 1 b86680a4sv1za.htm FORM S-1/A sv1za
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As filed with the U.S. Securities and Exchange Commission on August 12, 2011
Registration No. 333-174583
­ ­
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
Amendment No. 4
to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
 
 
 
MYRIANT CORPORATION
(Exact name of Registrant as specified in its charter)
 
         
Delaware
  2869   26-4724442
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)
 
1 Pine Hill Drive, Batterymarch Park II, Suite 301, Quincy, MA 02169
(617) 657-5200
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
 
 
 
 
Stephen J. Gatto
Chief Executive Officer
Myriant Corporation
1 Pine Hill Drive
Batterymarch Park II, Suite 301
Quincy, MA 02169
(617) 657-5200
(Name, address, including zip code, and telephone number, including area code, of agent for service)
 
 
 
 
Copies to:
 
     
Byron S. Kalogerou
  Donald J. Murray
David A. Cifrino   Dewey & LeBoeuf LLP
McDermott Will & Emery LLP   1301 Avenue of the Americas
28 State Street   New York, NY 10019-6092
Boston, MA 02109   Telephone: (212) 259-8000
Telephone: (617) 535-4000   Facsimile: (212) 259-6333
Facsimile: (617) 535-3800    
 
 
 
 
Approximate date of commencement of proposed sale to the public:  As soon as practicable after the effective date of this Registration Statement.
 
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, check the following box.  o
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) 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.  o
 
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.  o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) 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.  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
             
Large accelerated filer o
  Accelerated filer o   Non-accelerated filer þ   Smaller reporting company o
        (Do not check if a smaller reporting company)    
 
CALCULATION OF REGISTRATION FEE
 
             
      Proposed Maximum
    Amount of
Title of Each Class of
    Aggregate Offering
    Registration
Securities to be Registered     Price(1)     Fee
Common Stock, $0.0001 par value
    $125,000,000     $14,512.50(2)
             
 
(1)  Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933. Includes the offering price of additional shares that the underwriters have the option to purchase.          
 
(2)  Previously paid.
 
 
 
 
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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The information contained in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
 
SUBJECT TO COMPLETION          , 2011
 
PRELIMINARY PROSPECTUS
 
          Shares
 
(MYRIANT LOGO)
 
Common Stock
 
This is the initial public offering of our common stock. No public market currently exists for our common stock. We are offering all of the shares of common stock offered by this prospectus. We expect the public offering price to be between $      and $      per share.
 
We have applied to list our common stock on The Nasdaq Global Market under the symbol “MYRT.”
 
Investing in our common stock involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our common stock in “Risk factors” beginning on page 12 of this prospectus.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
 
                 
    Per Share   Total
 
Public offering price
  $           $        
Underwriting discounts and commissions
  $       $    
Proceeds, before expenses, to us
  $       $  
 
The underwriters have the option to purchase from us up to an additional      shares of our common stock at the public offering price, less the underwriting discounts and commissions payable by us, to cover over-allotments, if any, within 30 days from the date of this prospectus. If the underwriters exercise this option in full, the total underwriting discounts and commissions will be $      , and our total proceeds, after underwriting discounts and commissions but before expenses, will be $     .
 
The underwriters are offering the common stock as set forth under “Underwriting.” Delivery of the shares will be made on or about          , 2011.
 
 
UBS Investment Bank  
         J.P. Morgan  
        Citi  
  Piper Jaffray
 
 
Morgan Joseph TriArtisan
 
Prospectus dated          , 2011


 

 
You should rely only on the information contained in this prospectus. We and the underwriters have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front cover of this prospectus, or such other dates as are stated in this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.
 
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 EX-23.1


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Conventions that apply to this prospectus
 
Unless the context otherwise requires, in this prospectus:
 
  •  “the company,” “we,” “us” and “our” refer to Myriant Corporation and its subsidiaries, or its predecessor prior to July 16, 2009, as the context requires.
 
  •  “CBOT” refers to the Chicago Board of Trade.
 
  •  “EIA” refers to the U.S. Energy Information Association.
 
  •  “USDA” refers to U.S. Department of Agriculture.
 
  •  “DOE” refers to U.S. Department of Energy.
 
Certain market data presented in this prospectus have been derived from the most recent available data published by government agencies and commodities exchanges, as well as private sector organizations. These agencies, exchanges and organizations include those listed above as well as leading chemical industry consulting firms. Certain target market size information presented in this prospectus has been calculated by us (as further described below) based on such data. Unless otherwise indicated, market data included in this prospectus were derived as discussed below. None of these entities has endorsed or otherwise passed upon the computations, accuracy or presentations of data calculated on the basis of data published by these entities. In addition, you should read our cautionary statement in the section entitled “Special note regarding forward-looking statements.”
 
With respect to our calculation of product market volumes and market sizes contained in this prospectus:
 
  •  product market volumes are provided solely to show the magnitude of the potential markets for biobased chemical intermediates and the products derived from them. They are not intended to be projections of our biochemical production volumes or sales;
 
  •  target market sizes are calculated based on estimated product market volumes consumed within the petrochemicals industry multiplied by current market prices; and
 
  •  volume data with respect to target market sizes are derived from data included in various industry publications, surveys and forecasts. We have converted these sizes into volumes of biochemical equivalent as follows:
 
  •  we calculate the size of the biochemicals markets by substituting volumes of biochemical equivalent to the volume of products currently used to serve these markets; and
 
  •  for consistency in measurement, where necessary, we convert market sizes into pounds.


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Prospectus summary
 
This summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider in making your investment decision. You should read this summary together with the more detailed information, including our financial statements and the related notes, appearing elsewhere in this prospectus. In particular, you should carefully consider the matters discussed in “Risk factors” before making an investment decision.
 
We are a development stage company with a history of losses. We have generated minimal revenues and have had limited sales.
 
OVERVIEW
 
We are an industrial biotechnology company focused on becoming a low-cost producer of biobased chemicals. We have designed a process that uses proprietary microorganisms, which we call “biocatalysts,” to convert a variety of sugars into chemical precursors, called “intermediates.” We plan to sell those “biobased” intermediates into the large and growing petrochemicals industry.
 
Petrochemical companies manufacture and sell a broad range of chemicals used to make thousands of industrial and consumer products. Historically, these chemicals have been sourced from oil, natural gas and coal. These sources, or “feedstocks,” are extremely rich in carbon-based molecules, called organic molecules. Organic molecules will readily react with other organic or inorganic chemicals, and by controlling these reactions, industrial chemists can convert organic intermediates into thousands of different chemicals with specific properties tailored to commercial applications. In recent years, however, the petrochemicals industry has become increasingly challenged by a variety of factors, including the rising and volatile prices of fossil-fuels, increasing regulation of the sourcing and processing of fossil fuel based feedstock and concerns over depleting supplies of fossil fuels. One solution to these challenges is to use industrial sugars to produce biobased chemicals.
 
We have developed a proprietary technology platform that we believe will enable us to manufacture biobased chemical intermediates to replace petroleum-based chemicals in the same applications using a broad range of renewable feedstocks, rather than petroleum-based feedstocks. Through a process known as directed evolution, we adapt microorganisms to convert sugars into organic chemical intermediates with greater productivity and yield compared to other known bioproduction processes. We believe that we can produce our target chemical intermediates at an average of half the cost of traditional petrochemical intermediates at a wide range of oil and industrial sugar prices without relying on government subsidies.
 
We are using our technology to produce, at competitive costs, biobased chemical intermediates using commercial-scale unit operations and multiple feedstocks. Our technology combines proprietary microorganisms, or biocatalysts, and a fermentation process capable of using a variety of renewable feedstocks to create biobased chemical intermediates. We have successfully produced several of these intermediates at laboratory and pilot scale and have commercialized our first product, lactic acid, through a licensee. We are preparing to commercialize our second product, succinic acid. We refer to succinic acid produced using our bioproduction processes as “biosuccinic acid.” Our biosuccinic acid is chemically identical to succinic acid produced from petrochemicals.
 
We plan to market our biobased chemical intermediates for use in chemical reaction processes requiring the same or similar intermediates as an input. We refer to this as a “drop in” product. We also plan to market our products to replace different chemicals in various manufacturing processes. Replacing a different chemical input is possible by adjusting the chemical reaction process and either ending up with a functionally similar or the same end product. We believe that our market opportunities include biosuccinic acid (a $7.5 billion market at current market prices), fumaric acid (a $1.7 billion market at current market prices), acrylic acid (a $14.5 billion market at current market prices) and lactic acid (forecast to eventually become a multi-billion pound market).
 
We believe that our technology can efficiently produce biobased chemicals at high yields while consuming less feedstock by using an anaerobic process (that is, a reaction process that does not require oxygen) that consumes, rather than produces, carbon dioxide, resulting in a reduced carbon footprint and higher yield of the target product. Based on current commercial-scale costs and using 95 Dextrose, a widely


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available industrial sugar, as a feedstock, we estimate that the production process for our biosuccinic acid, will be cost-competitive with petroleum-based processes down to $45 per barrel of oil.
 
Furthermore, our biocatalysts can consume sugars from a variety of sources, including glucose from corn and grain sorghum, sucrose from sugarcane, cellulosic feedstocks from waste biomass, and glycerol. Cellulosic feedstocks are non-food based feedstocks derived from agricultural, forestry and other types of organic wastes. In terms of their chemical composition, cellulosic feedstocks are a mixture of polymers, or chains, of sugars with five or six carbon atoms per sugar molecule. Xylose is an example of a five-carbon sugar. Glucose is an example of a six-carbon sugar. Our biocatalysts can consume both five-carbon sugars and six-carbon sugars derived from cellulosic feedstocks, which we believe will lower the cost of feedstocks when they become more widely available. This is because cellulosic feedstocks tend to be much cheaper than food-based feedstocks, resulting in lower overall product manufacturing cost. We plan to use the lowest cost regional feedstocks or a combination of low-cost feedstocks in our manufacturing plants.
 
We have entered into or intend to enter into strategic relationships with international companies to accelerate the global commercialization of our products and development of our biochemical production capabilities. For example, we have signed a non-binding memorandum of understanding to enter into a joint development agreement with Johnson Matthey PLC’s subsidiary, Davy Process Technology Limited, or Davy, a developer and licensor of advanced process technologies used to produce petrochemicals. Under that agreement, upon successful completion of testing and engineering using our biosuccinic acid, Davy would guarantee the use of our biosuccinic acid in plants using the Davy process to manufacture butanediol, a widely used petrochemical. Davy believes that its butanediol process accounts for approximately 1.2 billion pounds or 27% of total global capacity, and 50% of plant capacity installed since 1992. We have also signed exclusive alliance agreements with ThyssenKrupp’s subsidiary Uhde GmbH, or Uhde, a chemical plant engineering company, and its U.S. subsidiary, under which Uhde will integrate our fermentation and its separation technology in biochemical manufacturing plants and guarantee the performance of those plants to facilitate access to project finance. In addition, through PTT Chemical International Private Limited, or CH Inter, a subsidiary of PTT Chemical Public Company Limited, or PTTCH, a Thailand-based petrochemical producer, we can access a breadth of commercial and technical expertise and extensive knowledge and infrastructure in Asian markets.
 
In January 2006, we granted Purac Biochem BV, or Purac, a wholly-owned subsidiary of CSM N.V., an exclusive, worldwide and royalty-bearing license to use our technology to produce, market and sell D(−) lactic acid, as well as its derivatives and by-products. Purac has been using our technology to produce D(−) lactic acid at commercial scale since 2008.
 
We are currently building a 30 million pound biosuccinic acid plant in Lake Providence, Louisiana, or the Louisiana Plant, which we expect will begin commercial operations during the first quarter of 2013. We are funding the construction of the Louisiana Plant in part with a $50 million cost-sharing award from the U.S. Department of Energy, or the DOE. We intend to expand the annual production capacity of this plant to approximately 170 million pounds by the end of the first quarter of 2014. We are also negotiating a letter of intent with Uhde for an industrial biochemical facility for the production of biosuccinic acid at the Infraleuna Chemical Site in Leuna, Germany. The plant, which we expect would commence operations in the first half of 2012, would utilize our technologies to produce biosuccinic acid and ammonium sulfate in accordance with our product specifications. The plant would be owned and operated by Uhde and we would purchase the biosuccinic acid and ammonium sulfate produced by Uhde in accordance with our specifications. We have also signed a memorandum of understanding with China National BlueStar (Group) Co. Ltd., or BlueStar, to develop a proposal for a jointly-owned 220 million pound biosuccinic acid plant in Nanjing, China, the biosuccinic acid requirements of which would be exclusively supplied by the Company. BlueStar is currently producing BDO utilizing a process licensed from Davy.
 
We have already produced 24 metric tons of biosuccinic acid in support of internal and customer/vendor sampling and testing programs. We scaled up these quantities from an initial fermentation vessel size of five liters to 50,000 liters from January 2008 to February 2011 at various locations. The commercial scale-up of the Louisiana Plant represents a two-fold scale-up of the fermentation already commercialized by Purac in the production of our biobased D(−) lactic acid. We have contracts committing customers to buy 100% of their


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annual succinic acid requirements from us, consuming a substantial portion, and prospectively all, of the Louisiana Plant’s initial capacity based on these customers’ current stated forecasts for biosuccinic acid demand. We are in discussions with prospective customers who have indicated interest in purchasing the biosuccinic acid that we would produce from the additional capacity created upon the expansion of the Louisiana Plant.
 
Our Commercial Products
 
Biosuccinic Acid
 
We are currently focused on commercializing and producing biosuccinic acid. Succinic acid is a chemical building block that is used as an intermediate in the production of numerous large-volume products, including plastics, fibers, coatings, solvents and cosmetics. The U.S. Department of Energy and others have identified biosuccinic acid as one of the five most promising “building block” chemicals that can be produced commercially from biomass rather than fossil fuels. This product represents a market opportunity of $7.5 billion. We believe we will be a low-cost producer of biosuccinic acid relative to producers using either traditional petroleum-based processes, or other known bioproduction techniques.
 
There is currently a small existing merchant market for succinic acid for use in pigments, solvents, detergents, metal plating and PBS polymers. In addition to targeting the existing succinic acid market, we plan to sell our biosuccinic acid as a drop-in or replacement chemical in the following target markets:
 
Butanediol
 
Butanediol, or BDO, is a chemical intermediate with end markets in a wide variety of everyday products, including engineered plastics, biodegradable food packaging, adhesive tapes, foams, fibers such as elastane (better known as Spandex® and Lycra®) and coatings. Approximately 27% of global BDO production capacity utilizes a proprietary production process developed by Davy, in which maleic anhydride, or MAN, an organic intermediate, is converted to dimethyl succinate, a derivative of succinic acid, and then to BDO. Today, petroleum-derived MAN is produced from benzene, a carcinogen, or butane. Through our memorandum of understanding with Davy, we are negotiating a joint development agreement with the goal of targeting BDO plants using the Davy process to replace petroleum-derived MAN with our biosuccinic acid. This raw material replacement would enable our customers to produce BDO from renewable resources with a reduced carbon footprint, higher renewable content and reduced price volatility compared to the existing Davy BDO production process. We are also exclusively working with Davy to integrate and optimize each other’s processes to further reduce the costs of producing biosuccinic acid for BDO applications.
 
Adipic Acid
 
Adipic acid is a chemical intermediate derived from benzene and used in a range of polymers and plastics applications, which are in turn used in the production of a wide variety of end products, including flexible foams, garment linings, packaging, filters, fuel tank linings and adhesive tapes with automotive, electrical, surgical and industrial applications. Our biosuccinic acid can be substituted for adipic acid. Several prospective customers have already tested our biosuccinic acid as an adipic acid replacement, and one customer has signed a supply contract with us for that purpose.
 
Phthalic Anhydride
 
Phthalic anhydride is a chemical intermediate used as a raw material to produce plasticizers, coatings, and a wide variety of everyday plastics used in food wrap films, flexible PVC piping, flexible wire jackets, and toys. As a result of increasing government regulation of this class of chemicals and growing public awareness of their potential health risks, producers are looking for phthalic anhydride replacements. Succinate esters, chemicals derived from succinic acid, have performance characteristics similar to phthalic anhydride and can be used as a replacement. Several prospective customers have already tested our biosuccinic acid as a phthalic anhydride replacement, and one customer, The Chemical Company, has signed a supply contract with us for that purpose.


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D(−) lactic acid
 
Lactic acid is derived from the fermentation of sugars and can be converted, through a process called polymerization, into polylactic acid, or PLA. PLA is used in a range of everyday products, including packaging, apparel, bottles, durable goods, films, bedding, non-wovens, and plastic dining utensils. The market for PLA is currently limited because conventional PLA cannot be used in applications requiring a resistance to heat. Our D(−) lactic acid can be used to produce D-PLA, which, when combined with conventional PLA, forms a polymer called stereo-complex PLA, or SC-PLA. This polymer addresses the heat stability problem that has limited the adoption of PLA. SC-PLA also offers greater strength and crystallinity than PLA, enabling its use in higher-value applications such as engineered and high-performance plastics. We believe that growth in demand for SC-PLA, which requires D(−) lactic acid as a key input, will significantly expand the PLA market beyond its current size. In June 2008, our technology was commercialized for the production of D(−) lactic acid through our licensee, Purac, who pays us royalties based on sales. Market forecasts indicate that the market for D(−) lactic acid will eventually exceed one billion pounds.
 
OUR PRODUCT PIPELINE
 
Our technology platform provides for the manufacture of several additional biochemicals utilizing the same or similar microorganisms.
 
Fumaric Acid
 
Fumaric acid is currently used as a preservative in food and beverages, as a sizing agent to protect and help the spread of ink in paper production, and as an input in the production of alkyd resins, chemicals used in paints and coatings. Given that fumaric acid is chemically equivalent to a combination of MAN and water, it can potentially be used as a replacement for MAN in all MAN-based applications, including the production of unsaturated polyester resins (UPR), chemicals used in construction, marine, and automotive products. We are currently developing a biobased fumaric acid utilizing the same E. coli bacteria used to produce our biosuccinic acid. We plan to address both the existing fumaric acid market and the potential market for fumaric acid as a replacement for MAN in UPRs and other applications, which represent a combined market for fumaric acid of $1.7 billion at current prices. We are one year into our development cycle for fumaric acid and anticipate scaling the technology to pilot scale in 2012.
 
Acrylic Acid
 
Acrylic acid is one of the most versatile and widely used industrial chemicals with applications in superabsorbents, coatings, adhesives, sealants, textiles, paper chemicals, and plastic additives. The acrylic acid market is estimated at $14.5 billion at current market prices. We have achieved proof of concept at laboratory scale and are in the first year of our development phase for acrylic acid. We expect to enter pilot phase in 2012.
 
OUR COMPETITIVE STRENGTHS
 
We believe the following competitive strengths differentiate us from both traditional chemical producers and other biobased chemical producers:
 
Validated proprietary technology
 
Our proprietary technology platform, validated in our laboratories and third-party facilities and commercialized with our licensee, Purac, is based on a single-step anaerobic process that allows our biocatalysts to grow and simultaneously produce the targeted product in the fermentation vessel. This anaerobic process, in the case of our biosuccinic acid and biobased fumaric acid, consumes carbon dioxide when producing the target product, rather than releases it, resulting in greater productivity and yield relative to other known bioproduction techniques.


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Low-cost producer of sustainable biobased products
 
Our biobased products seek to address large and growing industrial chemical markets. We believe we can produce these products at an average of half the cost of traditional petrochemical intermediates at a wide range of oil and industrial sugar prices without relying on government subsidies. We believe our manufacturing cost profile will allow us to offer customers sustainable, biobased inputs for existing processes at prices competitive with petroleum-based inputs while providing us with an attractive return on capital. We will also market our biosuccinic acid as a substitute for other petroleum-based products, such as adipic acid and phthalic anhydride, reducing our customers’ exposure to the price volatility of oil.
 
Feedstock flexible
 
We have produced biosuccinic acid at laboratory and pilot scale from a wide variety of sugars, including 95 Dextrose, grain sorghum, sucrose from sugarcane, cellulosic sugars from waste biomass, and glycerol. Our biocatalysts consume both five-carbon sugars and six-carbon sugars, which we believe will provide a competitive advantage when cellulosic feedstocks become more widely available due to their lower cost. We plan to use the lowest cost regional feedstocks or a combination of low cost feedstocks in our future plants.
 
Commercialized product
 
Our technology platform was commercialized for the production of D(−) lactic acid through our licensee, Purac, one of the world’s leading lactic acid producers. Purac uses our technology to address the thermal stability problems associated with polylactic acid, or PLA, by producing SC-PLA, a biopolymer created by combining D-PLA with L-PLA. SC-PLA offers higher strength and crystallinity and superior heat resistance relative to L-PLA, enabling its use in higher-value applications such as engineered and high-performance plastics.
 
Strategic relationships with leaders in the fields of chemicals, process technology, and engineering
 
We are working with international companies to create key strategic partnerships to accelerate the global commercialization of our products and development of our biochemical production capabilities. Our memorandum of understanding with Davy contemplates that upon successful completion of testing and engineering using our biosuccinic acid, Davy would guarantee its butanediol process licensees that they can use our biosuccinic acid in their butanediol process in place of petroleum-derived MAN without significant additional capital expenditures. We have entered into an exclusive alliance with Uhde in which it will integrate our fermentation and its separation technology in biochemical manufacturing plants and guarantee the performance of those plants, to facilitate access to project finance. In addition, through CH Inter and PTTCH, we can access a breadth of commercial and technical expertise and extensive knowledge and infrastructure in Asian markets.
 
Profitable unit-level economics without subsidies or mandates
 
We do not rely on green premiums, regulatory policies, subsidies, mandates, or tariffs to make our products commercially viable. Based on our testing, projections, and experience to date, we believe that our technology platform will allow us to offer our products at a price that is competitive with petroleum-based chemicals. We believe capital expenditures required for production of our products are consistent on a per pound basis with traditional chemical plants and have the potential to achieve a more attractive return on capital.
 
Scale-up and signed customer contracts
 
We scaled up the production of our biosuccinic acid from an initial fermentation vessel size of five liters to 50,000 liters between January 2008 and February 2011 at various locations, completing our scale-up at Fermic’s “toll manufacturing facility”. A toll manufacturing facility is a plant which companies use to contract manufacture products or to scale-up technologies to production levels. The owner of the facility provides the equipment, labor, utilities and raw materials for a monthly fee to manufacture a given product. Using biosuccinic acid samples produced at Fermic and supplied to prospective customers, we have signed contracts with three customers who have agreed to buy up to 100% of their succinic acid requirements from our


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30 million pound Louisiana Plant. We are in discussions with prospective customers who have indicated interest in purchasing the biosuccinic acid that we would produce from the additional capacity created upon the expansion of the Louisiana Plant to 170 million pounds.
 
Experienced team with a demonstrated track record
 
The members of our management team have more than 100 combined years of experience, and with other companies have developed, scaled, built and operated biotechnology and chemical businesses. Our team has achieved success in (i) developing microorganisms and new products, (ii) developing the fermentation and downstream processes of industrial biotechnology, (iii) employing process development and project management of large-scale plants from start to finish, (iv) financing and constructing large-scale capital projects, (v) commercializing and navigating product approvals at global and multinational companies, and (vi) managing global business functions, including pricing, sourcing, customer interfacing, budgeting, and capital planning.
 
OUR STRATEGY
 
Our strategy is to become a low-cost producer of biobased chemical intermediates that can drop in or replace traditional petroleum-based industrial chemicals. Key elements of our strategy include:
 
  •  developing drop-in and replacement products for large, existing markets
 
  •  leveraging and establishing partnerships to achieve commercial success
 
  •  targeting drop-in applications to drive market penetration
 
  •  securing customer contracts to support production capacity expansion
 
  •  expanding internationally to markets with the greatest business opportunities
 
  •  capitalizing on feedstock flexibility to further reduce our costs
 
SUMMARY RISK FACTORS
 
Our business is subject to numerous risks that could prevent us from successfully implementing our business strategy. These risks are discussed more fully in “Risk factors” beginning on page 12 of this prospectus, and include the following:
 
  •  We are an early stage company with a history of losses. We expect to incur losses for at least the next several years, and we may never achieve profitability.
 
  •  We have never operated a commercial-scale plant or produced our lead product, biosuccinic acid, in commercial volumes, and as a result, we may encounter unforeseen difficulties in constructing and operating large-scale commercial facilities.
 
  •  Our biochemical products, including biosuccinic acid, may not be accepted by customers in the petrochemicals industry, particularly if we cannot meet our customers’ product specifications.
 
  •  We will be dependent initially on three customers for sales of our lead product, biosuccinic acid. The product requirements of these customers may be less than the initial capacity of our Louisiana Plant.
 
  •  Our initial production of biosuccinic acid will be conducted at a single location. Any delays or disruptions in production that occur at this plant may prevent us from generating revenue from the sales of our product.
 
  •  We expect to face competition for our biochemical products, including biosuccinic acid, often from companies with greater resources and experience.
 
  •  A significant decline in the price of petroleum and petroleum-based products may reduce demand for our biosuccinic acid and our other biochemical intermediates.
 
  •  We are dependent on third parties with whom we have entered into strategic commercial relationships.


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  •  Some of our key operating strategies, including those involving Davy and PTTCH, depend upon negotiating and executing binding agreements.
 
  •  Our rights to key intellectual property are licensed to us. Termination of the underlying agreements would be highly detrimental to us.
 
  •  We may not be able to enforce our intellectual property rights, including our trade secrets, especially in the international markets in which we expect to operate.
 
CORPORATE INFORMATION
 
We were formed in Delaware on April 3, 2009 as Myriant Technologies LLC, a limited liability company. On July 16, 2009, through a series of separation transactions, the holders of BioEnergy International, LLC, a Delaware limited liability company, or the Predecessor Company, acquired membership units of Myriant Technologies LLC, which simultaneously acquired the assets and liabilities of the chemical intermediates business of the Predecessor Company. For further information with respect to our reorganization, see Management’s discussion and analysis and Note 1 to Consolidated Financial Statements. We filed a certificate of conversion and a certificate of incorporation in Delaware on January 10, 2011, converting into a corporation originally named Myriant Corp. Our second amended and restated certificate of incorporation will be filed and take effect following the completion of this offering.
 
Our principal executive offices are located at 1 Pine Hill Drive, Batterymarch Park II, Suite 301, Quincy, MA 02169, and our telephone number is (617) 657-5200. Our website address is www.myriant.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus.
 
Our logos, “Myriant®”, “Myriant Technologies®”, “Chemistry Refined Naturally®” and other trademarks or service marks of Myriant Corporation appearing in this prospectus are the property of Myriant Corporation. This prospectus contains additional trade names, trademarks and service marks of other companies. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply relationships with, or endorsement or sponsorship of us by, these other companies.


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THE OFFERING
 
Common stock offered by us            shares (or           shares if the underwriters exercise in full their over-allotment option to purchase additional shares).
 
Common stock to be outstanding after this offering            shares (or           shares if the underwriters exercise in full their over-allotment option to purchase additional shares).
 
Proposed Nasdaq Global Market symbol MYRT
 
Use of proceeds We expect that the net proceeds to us from the sale of the shares of common stock we are offering will be $      million, assuming an initial public offering price of $      per share (the mid-point of the price range set forth on the cover page of this prospectus) and after deducting underwriting discounts and commissions and estimated offering expenses. If the underwriters exercise their over-allotment option in full, the net proceeds to us would be approximately $      million.
 
We intend to use the net proceeds of this offering to finance, in part, the construction of the Louisiana Plant (approximately $103 million, including working capital, fees and expenses), to fund our expected equity contribution to the planned expansion of the Louisiana Plant (approximately $60 million, which includes working capital, fees and expenses), to pay the dividend accruing on the Class A common stock (which totaled $2,222,466 as of June 30, 2011), to fund research and development expenses (which we estimate will be approximately $25.5 million in the aggregate for the two fiscal years following the completion of this offering) and for working capital and other general corporate purposes, which will include expenses and the costs associated with being a public company.
 
We may also use a portion of the net proceeds to acquire other complementary businesses, products or technologies or to make other strategic investments. We currently have no agreements or commitments for any specific acquisitions or investments at this time.
 
The potential uses of net proceeds from this offering represent our current intentions based upon our present business plans and conditions. We cannot guarantee the specific amount of the net proceeds that will be used to develop, construct and operate our biochemical production capabilities globally, fund working capital or be used for other general corporate purposes.
 
Please see “Use of proceeds.”
 
Risk factors See “Risk factors” beginning on page 12 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.
 
 
The number of shares of common stock to be outstanding after this offering is based on the number of shares outstanding as of June 30, 2011, assumes the obligatory exercise of warrants exercisable for 17,134 shares of common stock at an exercise price of $6.00 per share and warrants exercisable for 89,656 shares of


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common stock at an exercise price of $10.00 per share assuming an initial public offering price per share in excess of 1.5 times the exercise price of the warrants, and excludes:
 
  •  1,629,941 shares of common stock issuable upon the exercise of options issued under our 2011 Omnibus Incentive Plan and outstanding as of June 30, 2011 at a weighted average exercise price of $13.32 per share;
 
  •  699,220 shares issuable under restricted stock units granted subject to vesting conditions under the 2011 Omnibus Incentive Plan;
 
  •  59,231 shares of common stock issuable upon the exercise of warrants outstanding as of June 30, 2011 at an exercise price of $13.00 per share;
 
  •  1,452,528 shares of our common stock reserved for future issuance under our 2011 Omnibus Incentive Plan, plus any annual increases in the number of shares of common stock reserved for future issuance as provided for in such plan, as described in “Management — Employee Benefit and Stock Plans; and
 
  •  500,000 shares of common stock reserved for issuance under our 2011 employee stock purchase plan, which will become effective upon completion of this offering.
 
In addition, except as otherwise indicated, all information in this prospectus:
 
  •  gives effect to the conversion of all of our outstanding shares of convertible common stock into 14,259,858 shares of common stock upon completion of this offering;
 
  •  assumes no exercise of the underwriters’ option to purchase additional shares; and
 
  •  reflects the filing of our second amended and restated certificate of incorporation upon completion of this offering.


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Summary selected financial data
 
The following summary selected financial data is derived from financial information of us and BioEnergy International, LLC, or the Predecessor Company. We were separated from the Predecessor Company through a series of transactions effective as of July 16, 2009. The financial data set forth below as of and for the periods ended December 31, 2006, 2007 and 2008 are derived from the historical financial statements of the Predecessor Company. The results of operations set forth below for the year ended December 31, 2009 represent the pro forma combined financial results for the Predecessor Company (through July 15) and us (from July 16). A more detailed description of the foregoing is set forth under “Selected historical financial data” and “Management’s discussion and analysis of financial condition and results of operations.” Potential investors are urged to carefully consider that information as well as the information contained in our and the Predecessor Company’s consolidated financial statements and related notes included elsewhere in this prospectus.
 
Consolidated Statements of Operations Data:
 
                                                                 
    Predecessor Company     Myriant Corporation  
                            Period from
                   
                      Period from
    July 16,
                   
    Fiscal Year
    Fiscal Year
    Fiscal Year
    January 1,
    2009
    Fiscal Year
             
    Ended
    Ended
    Ended
    2009
    (Inception)
    Ended
    Six Months Ended
 
    December 31,
    December 31,
    December 31,
    to July 15,
    to December 31,
    December 31,
    June 30,  
    2006     2007     2008     2009     2009     2010     2010     2011  
    (Unaudited)     (Unaudited)                             (Unaudited)     (Unaudited)  
 
Revenues:
                                                               
License fee revenue
  $ 267,065     $ 396,515     $ 344,860     $ 71,833     $ 221,711     $ 258,241     $ 13,297     $ 20,997  
Management fee revenue-related party
                262,212       267,318             3,557,574       1,575,166       2,519  
Development fee revenue-related party
                3,125,714                                
Government awards
                                  10,419,043       5,499,039        
                                                                 
Total revenues
    267,065       396,515       3,732,786       339,151       221,711       14,234,858       7,087,502       23,516  
                                                                 
Operating expenses:
                                                               
Cost of license fee revenue
    108,432       135,813       110,020       22,373       73,859       84,600       3,148       6,999  
Research and development
    653,469       1,499,577       4,679,935       3,770,721       2,793,085       15,904,717       8,029,832       4,224,776  
Project development
    706,666       1,764,244       2,179,965                                
General and administrative expense
    1,547,540       3,166,646       5,699,186       5,438,073       4,979,186       12,673,247       5,681,186       7,827,370  
                                                                 
Total operating expenses
    3,016,107       6,566,280       12,669,106       9,231,167       7,846,130       28,662,564       13,714,166       12,059,145  
                                                                 
Operating loss
    (2,749,042 )     (6,169,765 )     (8,936,320 )     (8,892,016 )     (7,624,419 )     (14,427,706 )     (6,626,664 )     (12,035,629 )
Other income (expense), net:
                                                               
Interest income
    1,477       138,395       60,222       5,385       8,051       87,611       85,985       18,316  
Interest expense
    (260,268 )     (1,959,909 )     (1,636,062 )     (1,352,767 )     (915,804 )     (4,470,478 )     (1,304,264 )     (12,606,762 )
Miscellaneous income
    600                                           5,437  
Gain(loss) on foreign currency exchange
                      (21,721 )           (5,235 )     (3,853 )     7,759  
Changes in fair value of warrant liability
                      2,092,643       (515,108 )     2,592,979       (660,521 )     (1,459,220 )
                                                                 
Other income (expense), net
    (258,191 )     (1,821,514 )     (1,575,840 )     723,540       (1,422,861 )     (1,795,123 )     (1,882,653 )     (14,034,470 )
Net loss
    (3,007,233 )     (7,991,279 )     (10,512,160 )     (8,168,476 )     (9,047,280 )     (16,222,829 )     (8,509,317 )     (26,070,099 )
Dividend on Class A common stock
                                              (2,222,466 )
                                                                 
Net loss attributable to common stockholders
  $ (3,007,233 )   $ (7,991,279 )   $ (10,512,160 )   $ (8,168,476 )   $ (9,047,280 )   $ (16,222,829 )   $ (8,509,317 )   $ (28,292,565 )
                                                                 


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    Predecessor Company     Myriant Corporation  
                            Period from
                   
                      Period from
    July 16,
                   
    Fiscal Year
    Fiscal Year
    Fiscal Year
    January 1,
    2009
    Fiscal Year
             
    Ended
    Ended
    Ended
    2009
    (Inception)
    Ended
    Six Months Ended
 
    December 31,
    December 31,
    December 31,
    to July 15,
    to December 31,
    December 31,
    June 30,  
    2006     2007     2008     2009     2009     2010     2010     2011  
    (Unaudited)     (Unaudited)                             (Unaudited)     (Unaudited)  
 
Net loss per unit/share attributable to common stockholders-basic and diluted
  $ (0.69 )   $ (1.72 )   $ (2.14 )   $ (1.55 )   $ (1.30 )   $ (2.31 )   $ (1.22 )   $ (3.30 )
Weighted average number of units outstanding- basic and diluted
    4,358,126       4,655,011       4,918,668       5,285,807       6,953,079       7,009,251       6,993,252       8,582,456  
Net loss used in computing pro forma net loss per share of common stock-basic and diluted (unaudited)
                                                            (28,292,565 )
Pro forma net loss per common share (unaudited)
                                                          $ (1.24 )
Weighted average shares used in computing pro forma basic and diluted net loss per common share (unaudited)
                                                            22,842,314  
 
Balance Sheet Data:
 
                 
    June 30, 2011
    Actual   As Adjusted(1)
    (Unaudited)   (Unaudited)
 
Cash, cash equivalents and restricted cash
  $ 42,570,475     $  
Working capital
    25,383,057          
Total assets
    57,105,090          
Warrant liability
    1,462,522       392,013  
Stockholders’ equity
    50,688,929     $  
 
 
(1) Adjusted for the obligatory exercise of warrants exercisable for 17,134 shares of common stock at an exercise price of $6.00 per share and warrants exercisable for 89,656 shares of common stock at an exercise price of $10.00 per share assuming an initial public offering price per share in excess of 1.5 times the exercise price of the warrants and the issuance and sale of the shares of our common stock in this offering (assuming an initial public offering price of $     per share which is the mid-point of the price range set forth on the cover page of this prospectus, and after underwriting discounts and commissions and our expected offering expenses) and the receipt of the net proceeds from the offering.

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Risk factors
 
Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this prospectus, before deciding whether to invest in shares of our common stock. The occurrence of any of the events described below could harm our business, financial condition, results of operations and growth prospects. In such an event, the trading price of our common stock may decline and you may lose all or part of your investment.
 
WE ARE AN EARLY STAGE COMPANY WITH AN UNPROVEN PRODUCT
 
We are a development stage company with a history of losses. We expect to incur losses for at least the next several years, and we may not achieve or maintain profitability.
 
We are a development stage company. To date, we have generated no product sales of any significance, and the minimal revenues we have generated have been generated primarily through licensing royalties and government awards. We, and before us, the Predecessor Company, have a history of losses, including losses of $10.5 million in 2008, $17.2 million in 2009 and $16.2 million in 2010, as well as a loss of $26.1 million for the six months ended June 30, 2011. As of June 30, 2011, we had an accumulated deficit of $26.1 million, resulting from losses incurred by us since our conversion to a subchapter C corporation in January 2011. Our cumulative losses (including those of our Predecessor Company) total $81.0 million. We expect to incur losses and negative cash flow from operating activities for at least the next several years, and we may never achieve profitability. In addition, as detailed below, we expect to incur substantial costs associated with the construction of the Louisiana Plant. As a result, even if our revenues increase substantially, we expect that our expenses will exceed revenues for at least the next several years. If we never become profitable, or if the time required to become profitable is longer than we expect, we may not be able to continue our business. Even if we become profitable, we may not be able to sustain or increase profitability on a quarterly or annual basis.
 
Our processes and resulting products are unproven at commercial scale.
 
While the manufacturing of organic compounds from fossil-fuel feedstocks has a long history of process development and optimization, we have limited experience operating our biobased technology and have only done so at pilot scale. To successfully commercialize our biosuccinic acid and other biochemical intermediates, we must manufacture our products on a cost-competitive basis at commercial scale and in accordance with customer quality specifications. We have only manufactured a variety of chemical intermediates at laboratory and pilot scale, with the exception of D(−) lactic acid, which has been manufactured at commercial scale by our licensee, Purac Biochem BV, or Purac, a wholly-owned subsidiary of CSM N.V., a leading global chemical producer. However, our biosuccinic acid technology, and that of other products that we attempt to commercialize, may not perform at commercial scale in the same manner as we have seen at laboratory or pilot scale. Moreover, our technology may not achieve customer acceptance or generate significant product sales for a variety of reasons, many of which are described in detail below.
 
OUR BUSINESS MODEL AND OPERATING STRATEGIES HAVE INHERENT RISKS
 
We have never built a commercial-scale plant or produced our products, including biosuccinic acid, in commercial volumes, and as a result we may encounter unforeseen difficulties in constructing a large scale facility.
 
Our first large-scale commercialization initiative is producing biosuccinic acid and selling it into the petrochemicals market as a chemical intermediate. To date, we have produced limited quantities of biosuccinic acid for customer/vendor sampling and validation. While we have reached performance targets for certain aspects of the commercial production of biosuccinic acid, we have not yet done so in a commercial-scale plant or in commercial volumes, and we may not be able to do so in a timely or cost-effective manner.
 
To commercialize our biosuccinic acid, we are constructing a 30 million pound, 392,000 square-foot plant at the Port of Lake Providence, Louisiana. Constructing a production facility of this type and size is a complex and lengthy undertaking that requires sophisticated, multi-disciplinary planning and precise execution. Despite the


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detailed planning and the time and money that we have invested and will continue to invest in the construction of this plant, it may not perform as expected. For example, our biocatalyst may perform less efficiently than it did in smaller-scale production. Design parameters for mixing, heat transfer and flow rates may need to be adjusted to meet required product or volume specifications. Production rate, concentration and purity may vary dramatically from our expectations. We may need to install additional equipment to achieve desired specifications, which could delay commercialization and increase costs. In addition, contaminants in our feedstock could reduce the purity of the biosuccinic acid that we produce and require us to invest in more costly processes or equipment. We may encounter these or other operational challenges, and we may be unable to devise workable solutions. Furthermore, our processes require us to maintain certain levels of product purity to assure consistent product quality. In the event an impurity is introduced in a particular production batch of our biosuccinic acid, the product quality may be reduced or the product rendered unsalable, which would affect our profitability.
 
We have entered into an agreement pursuant to which, among other things, we are collaborating with ThyssenKrupp’s subsidiary Uhde GmbH, and its U.S. subsidiary, or Uhde, in the design, engineering and procurement for the Louisiana Plant. If Uhde does not perform as expected, we could experience significant delays and cost overruns.
 
Developing this plant also subjects us to many financial uncertainties. We have created financial forecasts for construction costs, construction time, output and operating costs of the plant. Our decision to proceed with the construction of the Louisiana Plant is based on our analysis of these forecasts. However, these forecasts are based on a variety of observations and assumptions, some involving considerable judgment on our part, which could prove to be inaccurate. Inherent risks associated with the novel nature of this project, inaccurate assumptions about our operating metrics and the fact that neither we nor anyone else has built or operated a biosuccinic acid facility at a commercial scale could result in:
 
  •  significant delays in constructing the Louisiana Plant and commercializing our product;
 
  •  greater operating costs than anticipated;
 
  •  cost overruns and the need for significant additional expenditure of time and capital; and
 
  •  lower than expected revenues and profit margins generated from the Louisiana Plant.
 
We may experience unexpected challenges and setbacks in operating our Louisiana Plant.
 
Our success depends on our ability to operate the Louisiana Plant so as to produce biosuccinic acid efficiently and cost-effectively in a timely manner. We have never operated a commercial-scale biosuccinic acid facility and we may be required to expend significant time and money to develop our operational capabilities. Although our management team has significant experience in chemical intermediates and fermentation technology, the skills and knowledge gained in these fields and in operating smaller-scale biosuccinic acid production facilities may prove insufficient for successful operation of a commercial-scale biosuccinic acid facility. Accordingly, we may encounter significant difficulties in operating the Louisiana Plant.
 
The production of biosuccinic acid requires multiple, integrated steps, including:
 
  •  obtaining the feedstocks;
 
  •  generating fermentable sugars;
 
  •  fermentation by organisms to produce succinic salts and ammonium succinate from the fermentable sugars;
 
  •  separation of the biosuccinic acid and ammonium-salt fractions;
 
  •  purification of the biosuccinic acid; and
 
  •  storage and distribution of the resulting biosuccinic acid.


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The technological and logistical challenges associated with each of these and other processes involved in production, marketing, sale and distribution of biosuccinic acid are substantial. We may not be able to resolve any difficulties that arise in a timely or cost-effective manner.
 
In addition, while certain members of our management team have experience in procuring large quantities of feedstocks for other production facilities we have never sourced large quantities of feedstocks, and we have no experience storing and/or distributing significant volumes of biosuccinic acid. We may not be able to do so cost-effectively. We may also have difficulty in recruiting, training and retaining qualified personnel to operate the Louisiana Plant. Failure to meet the operational challenges of developing and managing our production processes would have a material adverse effect on our business, financial condition and results of operations.
 
We may not achieve overall profitability due to higher costs of producing biosuccinic acid and other biochemicals.
 
The cost to produce biosuccinic acid and other chemical intermediates is highly dependent on the cost and usage of various process chemicals, such as sulfuric acid and ammonia. Although the chemical and nutrient usage quantities are based on predictable chemical reactions, the actual consumption required to produce biosuccinic acid on a commercial scale may be greater, affecting production cost and impacting production volumes. Although there are indices that show the pricing of the process chemicals used for production that closely track to our end products, there are no assurances that the indices are valid or, if valid, that current prices will not later change. We cannot control the cost of these process chemicals, and we could underestimate the volume required to operate at commercial scale. These uncertainties could affect our costs and margins.
 
Moreover, our operating and other financial projections for our Louisiana Plant assume that we will sell 100% of the volume of ammonium sulfate, or AMS, that we will produce as a co-product of our biosuccinic acid manufacturing process. We have entered into a contract with Wilson Industrial Sales Company, Inc. to sell all of the AMS produced at the Louisiana Plant during the term of the contract. AMS is a co-product of our biosuccinic acid production process and is commonly used as a soil fertilizer. If the quality of the AMS co-product does not meet market specifications, we may not be able to sell AMS at the anticipated price or in the anticipated quantity. Also, if the nature and quantity of the wastewater generated in the manufacturing process is substantially higher than in pilot testing, our wastewater treatment design may be undersized, affecting our ability to operate the Louisiana Plant at full capacity, if at all.
 
Fluctuations in the price of feedstocks may affect our cost structure.
 
An increase in the price of feedstocks would change our cost structure and therefore our profit margins. At certain levels, prices may make our products uneconomical to produce, as we may be unable to pass the full amount of feedstock cost increases on to our customers. The prices of many of these feedstocks are cyclical and volatile. While our biocatalysts are able to process a variety of feedstocks to make chemical intermediates, our ability to deliver products to our customers in a timely and cost-effective fashion may be impacted by the need to substitute feedstocks because of price fluctuations.
 
We may experience delayed production, reduced output and reduced revenues if the cost or availability of feedstocks or other factors require us to change feedstocks.
 
The production of our products will require large volumes of feedstocks. Although our process can utilize a wide variety of feedstocks, we cannot predict the future availability of such feedstocks or be sure that our suppliers, who we expect to supply the feedstocks necessary to produce our products, will be able to supply it in sufficient quantities or in a timely manner. The supply of feedstocks might be impacted by growing-season disruptions, crop yields, crop disease, droughts, floods, infestations, natural disasters, farming decisions or government policies and subsidies. In particular, weather conditions have historically caused volatility in the sugar industries by causing crop failures or reduced harvests. Excessive rainfall can adversely affect the supply of certain feedstocks by reducing the sugar content and limiting growers’ ability to harvest the crop. Crop disease and pestilence can adversely affect growth, potentially rendering unusable all or a substantial portion


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of affected harvests. The limited amount of time during which certain feedstocks retain their sugar content after harvest also limits our ability to substitute supply, if necessary.
 
We cannot assure you that our biochemicals, including biosuccinic acid, will be accepted by our target customers.
 
If we fail to successfully market our biosuccinic acid and other chemical intermediates to our target customers, our business, financial condition and results of operations will be adversely affected. The markets we intend to enter first are those for chemical intermediates used by large consumer products or chemical companies. In entering these markets, we intend to sell our products as alternatives to current petroleum-based intermediates. Although a significant market currently exists for succinic acid produced from petroleum, to our knowledge, biosuccinic acid has never been produced or sold at a commercial scale. Many potential chemical industry customers have invested substantial amounts of time and money in developing petroleum-based production channels. These potential customers for our products, including biosuccinic acid, generally have well-developed manufacturing processes and, in many instances, arrangements with suppliers of the components of their products. Pre-existing contractual commitments, unwillingness to invest in new infrastructure, distrust of new production methods and long-term relationships with current suppliers may all slow market acceptance of our biosuccinic acid and our other biochemicals. Furthermore, most producers of plastics and specialty chemicals that rely on succinic acid as a chemical intermediate have been producing their succinic acid requirements internally. As such, there is only a small merchant market for succinic acid.
 
We will be dependent initially on three customers.
 
We have supply agreements with three customers requiring that they purchase 100% of their succinic acid requirements from us. These supply agreements do not require these customers to purchase a minimum quantity of succinic acid from us. Although we expect that these purchasers will consume a substantial portion, and prospectively all, of the Louisiana Plant’s production capacity, we cannot be certain that these customers’ requirements will meet our expectations.
 
Two of these customer contracts require us to negotiate initial pricing of our product and to renegotiate pricing on a quarterly basis. These and other provisions of these contracts could result in disputes or stand-offs with these customers, disrupting our product sales. We are in discussions with these customers to agree on a pricing formula, but we may not succeed in doing so.
 
In addition, substantially all of our revenues will be derived, initially and for the foreseeable future, from these three customers. This customer concentration increases the risk of volatility in our revenues and operating results. Moreover, under specified circumstances, these customers are permitted to cancel their agreements with us. The loss or reduction of business from any one or more of these customers could materially adversely affect our revenues, financial condition and results of operations. We have indications of interest from others to purchase quantities of our biosuccinic acid. However, even if one of these substitute purchasers were willing to purchase excess supply, we would likely experience a temporary disruption in product sales, which would adversely affect our revenues.
 
We have limited experience in structuring arrangements with customers for the purchase of our biochemicals, including biosuccinic acid, and we may not be successful in this essential aspect of our business.
 
To date, we have generated limited revenues from sales of our commercial products and have limited experience operating in our customers’ industries and interacting with the customers that we are targeting. Developing that expertise may take longer than we expect and will require that we expand and improve our sales and marketing infrastructure. These activities could delay our ability to capitalize on the opportunities that our technology and products present, and may prevent us from achieving commercialization of our initial products. Our target customers are generally much larger than we are and have substantially longer operating histories in the specialty chemicals industry than we have. As a result, we may not be effective in negotiating


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or managing the terms of our relationships with these companies, which could adversely affect our future results of operations.
 
We may be unable to produce biosuccinic acid and other biobased intermediates in accordance with customer specifications.
 
It is critically important that we are able to meet customers’ product and volume specifications. If we fail to do so, prospective customers will not purchase from us and existing customers could terminate their agreements with us. While our biosuccinic acid will be sold in various grades, failure to successfully meet the specifications of our customers and potential customers for biosuccinic acid and other chemical intermediates would decrease demand for our production and significantly hinder market adoption of our product.
 
Even if we produce our products at our contractual or targeted specifications, as the case may be, we may face delays or reduced demand for our product related to current or future customer qualification trials that could take several months. For our biosuccinic acid to be accepted, our customers may need to test and certify it for use in their processes and, in some cases, determine whether products that contain our biosuccinic acid satisfy additional third-party specifications. We may need to demonstrate to our customers that our biosuccinic acid does not contain impurities that cause our product to behave differently than the petroleum-based equivalent in a way that impacts their end product quality. Our customers, in turn, may need to validate the use of our biosuccinic acid in products produced for third parties. Meeting these suitability standards could be a time-consuming and expensive process, and we may invest substantial time and resources into such qualification efforts without ultimately securing approval by our customers. This could materially and adversely impact revenues until customer qualification is achieved and maintained.
 
A significant decline in the price of petroleum and petroleum-based products may reduce demand for our biosuccinic acid.
 
Based on our current financial modeling, if the price of oil falls below $45 per barrel for a sustained period, we will be unable to manufacture biosuccinic acid as a cost-effective alternative to competing petroleum-based products, which will result in lost sales and would adversely impact our operating results. We anticipate that biosuccinic acid will be marketed as an alternative to corresponding petroleum-based products. World prices for oil have fluctuated widely in recent years. For example, during 2008 the average market price per barrel of West Texas Intermediate crude oil ranged from a low of $30.81 to a high of $145.66 and was $82.89 as of August 10, 2011. We expect that prices will continue to fluctuate in the future. Declining oil prices, or the perception of a future decline in oil prices, may adversely affect the prices we can obtain from our potential customers or prevent potential customers from entering into agreements with us to buy our products.
 
We expect to face competition for our biochemical intermediates, often from companies with greater resources and experience than us.
 
In the industrial biochemical market, we expect to face vigorous competition from both the traditional, largely petroleum-based chemicals that are currently used in our target markets and from alternatives to these existing products, such as other biobased chemicals. We may not compete effectively against incumbent petroleum-based products. Petroleum-based products have dominated the market for many years, and there is substantial existing infrastructure designed for petroleum-based intermediates, which may impede our ability to establish a position in these markets. Producers of these incumbent products include global oil companies, large international chemical companies and other companies specializing in specific chemicals. We may also compete in one or more of these markets with products that are offered as alternatives to the traditional petroleum-based or other traditional products being offered in these markets. Our potential customers generally have well-developed manufacturing processes and arrangements with suppliers of the chemical components of their products and may resist changing these processes and components. Many of our prospective competitors are better capitalized, with larger research and development departments and budgets, and have well-developed distribution systems and networks for their products.


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In addition, our potential customers frequently impose lengthy and complex product qualification procedures on their suppliers, influenced by consumer preference, manufacturing considerations such as process changes and capital and other costs associated with transitioning to alternative components, supplier operating history, regulatory issues, product liability and other factors. Satisfying these processes may take many months or years. If we are unable to convince these potential customers that our biosuccinic acid and our other chemical intermediates are comparable or superior to the alternatives that they currently use, we will not be successful in entering these markets.
 
We believe the primary competitive factors in the industrial biochemical market are:
 
  •  product price;
 
  •  product performance and other measures of quality;
 
  •  infrastructure compatibility of products;
 
  •  sustainability; and
 
  •  dependability of supply.
 
We believe that for our biochemicals to succeed in the market, we must demonstrate that our products are comparable, attractive alternatives to existing products and to any alternative products that are being developed for the same markets based on some combination of product cost, availability, performance and consumer preference characteristics. We may not be able to compete effectively against these other products.
 
Technological innovation could render our products and processes obsolete.
 
The biochemical industry is characterized by rapid technological change. Our success will depend on our ability to maintain a competitive position with respect to technological advances. Our technologies and products may be rendered obsolete or uneconomical by technological advances, more efficient and cost-effective biocatalysts or entirely different approaches developed by one or more of our competitors.
 
WE ARE HIGHLY DEPENDENT ON THIRD PARTIES WITH WHICH WE HAVE ENTERED INTO, OR ARE SEEKING TO ENTER INTO, STRATEGIC COMMERCIAL RELATIONSHIPS
 
Our commercialization strategy relies heavily on negotiating a definitive agreement with Davy Process Technology.
 
We plan to market our biosuccinic acid as a drop-in chemical intermediate for use in established processes for the production of industrial and specialty chemicals. In February 2011, we signed a non-binding memorandum of understanding with Davy Process Technology Limited, or Davy, to enter into a definitive joint development agreement. Under the agreement, Davy would test and approve our biosuccinic acid as a drop-in feedstock replacement for petroleum-derived maleic anhydride within Davy’s process for the production of butanediol, or BDO.
 
The proposed joint development agreement would require Davy to perform, at its expense, the engineering, development and pilot plant work necessary for it to guarantee to its customers that our biosuccinic acid will work for existing Davy process production facilities. We cannot be certain that Davy would be satisfied with its findings, that Davy would offer the guarantee sought or, if the use of our biosuccinic acid is guaranteed for Davy BDO process licensees, that Davy would expend the resources necessary to continue to guarantee our biosuccinic acid for use in its process. If we do not enter into the proposed joint development agreement, our business and prospects could be materially and adversely affected.
 
BDO producers that use Davy’s process represent a substantial portion of our target customer base. If Davy will not guarantee that our biosuccinic acid will work in the Davy BDO process, our market for biosuccinic acid will be dramatically reduced.


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Our plant construction and project finance strategy relies heavily on our relationship with Uhde.
 
In September 2009 and October 2009, we signed two Alliance Agreements with Uhde. These contracts require that Uhde and we work collaboratively and exclusively to incorporate each party’s proprietary technology in the development of our plant. Pursuant to the Alliance Agreements, Uhde will integrate our fermentation technology with its separation technology in the plant design and, on a project-by-project basis, provide process and performance guarantees on mutually agreeable terms for our biochemical plants around the world. If we and Uhde are unable to agree upon the terms and conditions by which Uhde would provide process and performance guarantees for the operational outputs of our plant, we could have difficulty performing our obligations to our customers, and it could become more difficult for us to secure and maintain project financing for our proposed industrial biochemical plants on terms favorable to us, if at all. Since adapting our technology to commercial-scale production and building plants to use our technology is a major part of our commercialization strategy, losing our exclusive alliance with Uhde would likely slow our technological and commercial development. It could also force us to find a new contractor with less experience than Uhde in designing and building industrial biochemical plants or to invest the time and resources necessary to build plants on our own. This could substantially hinder our ability to expand our production capacity and could severely impact our performance. If Uhde fails to fulfill its obligations to us under our agreements or our competitors obtain access to Uhde’s expertise, our ability to realize continued development and commercial benefits from our alliance could be impaired. Accordingly, if we lose our exclusive alliance with Uhde or Uhde terminates or breaches its agreements with us, our business and prospects could be adversely affected.
 
Our potential relationship with PTTCH may have a substantial impact on us.
 
We are negotiating a joint venture agreement and licensing arrangement with PTT Chemical Public Company Limited, or PTTCH, a large Thailand-based petrochemical producer and the parent company of our largest stockholder, which we envision we will finalize and execute shortly. As part of the joint venture, we would grant a license to the joint venture under our intellectual property to commercialize our technology exclusively within the ASEAN countries. The license agreement under discussion would provide for payments to us with respect to royalties based on product sales, maintenance fees and our pro rata share of joint venture earnings. The joint venture also calls for a research and development collaboration between us and PTTCH to, among other things, validate and optimize our biocatalysts and regional feedstocks for use in the ASEAN countries.
 
The consummation of our joint venture and licensing agreement with PTTCH is subject to the negotiation and execution of transaction documentation, including intellectual property licenses and sublicenses. We may not enter into the joint venture and licensing agreement with PTTCH on the timing we expect or at all. If the joint venture company is formed, we do not know whether we will receive any benefits from it. If the proposed joint venture and licensing agreement with PTTCH is not consummated, our business and prospects could be adversely affected.
 
We rely on our other strategic partners and collaborators, and our failure to successfully manage these relationships could delay us from developing and commercializing many of our products and achieving or sustaining profitability.
 
We expect that our ability to maintain and manage collaborations in our markets, like those we intend to establish with Davy, Uhde and PTTCH, will be significant factors to the success of our business. We have limited or no control over the amount or timing of resources that any third party commits to negotiating a collaboration with us or, if negotiated and entered into, the timing or amount of resources that a collaboration partner will commit. Davy, PTTCH or any other third party with which we are in negotiations may experience a change of policy or priorities and may discontinue negotiations with us. Any of our strategic partners or collaborators may fail to perform their obligations as expected. These strategic partners and collaborators may breach or terminate their agreements with us or otherwise fail to conduct their collaborative activities successfully and in a timely manner. Further, our strategic partners and collaborators may not develop products arising out of our collaborative arrangements or devote sufficient resources to the development, manufacture, marketing, or sale of our existing and future products. Moreover, disagreements with a strategic partner or


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collaborator regarding strategic direction, economics of our relationship, intellectual property or other matters could develop, and any such conflict could reduce our ability to enter into future collaboration agreements and negatively impact our relationships with one or more existing strategic partners or collaborators. If any of these events occur, or if we fail to maintain our agreements with our strategic partners and collaborators, we may not be able to commercialize our existing and future products, further develop our business, or generate sufficient revenues to support our operations.
 
Additionally, our business could be negatively impacted if any of our strategic partners or collaborators undergoes a change of control or assigns the rights or obligations under any of our agreements. If any of our strategic partners or collaborators were to assign these agreements to our competitors or to a third party who is not willing to work with us on the same terms or commit the same resources as the current strategic partner or collaborator, our business and prospects could be adversely affected.
 
OTHER RISKS ASSOCIATED WITH OUR BUSINESS OPERATIONS
 
We may not be successful in identifying market needs for new technologies and in developing new products to meet those needs.
 
The success of our business model depends in part on our ability to identify additional market opportunities for our biochemicals. The materials and manufacturing technologies we research and develop are new and continuously changing and advancing. The biochemicals that are derived from these technologies may not be applicable or compatible with demands in existing or future markets. Furthermore, we may not be able to identify new opportunities as they arise for our products since future applications of any given product may not be readily determinable, and we cannot reasonably estimate the size of any markets that may develop. If we are not able to successfully develop new products, we may be unable to expand our business beyond biosuccinic acid.
 
Ethical, legal and social concerns about genetically engineered products and processes, and similar concerns about feedstocks that could be used for food production, could limit or prevent the use of our products, processes and technologies and limit our revenues.
 
The use of genetically-engineered products and processes is subject to laws and regulations in many countries, some of which are new or still evolving. Public attitudes about the safety and environmental hazards of genetically-engineered products and processes, and ethical concerns over genetic research, could influence public acceptance of our technology, process and products.
 
Our ability to develop and commercialize one or more of our technologies, products, or processes could be limited by the following additional factors:
 
  •  public attitudes regarding, and potential changes to laws governing, ownership of genetic material, which could harm our intellectual property rights with respect to our genetic material and discourage others from supporting, developing or commercializing our products, processes and technologies;
 
  •  public attitudes and ethical concerns surrounding production of feedstocks on land which could be used to grow food, which could influence public acceptance of our technologies, products and processes; and
 
  •  governmental reaction to negative publicity concerning genetically engineered organisms, which could result in greater government regulation of genetic research and derivative products or feedstocks produced on land that could be used to grow food, which could result in greater government regulation of feedstock sources.
 
The subjects of genetically engineered organisms and food versus fuel have received negative publicity, which has aroused public debate. This adverse publicity could lead to greater regulation and trade restrictions on imports of genetically engineered products or feedstocks grown on land suitable for food production. These trends could result in increased expenses, delays or other impediments to our programs or the public acceptance and commercialization of our products.


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Our initial production of biosuccinic acid will be conducted at a single location, which makes us susceptible to disasters.
 
Our biosuccinic acid production will initially be conducted at a single location in Lake Providence, Louisiana. We plan to take precautions to safeguard this facility from natural and other disasters, through insurance, hazard protection, health and safety protocols and off-site storage of critical research results and computer data. However, a natural disaster, such as a fire, flood, hurricane, tornado, earthquake or an international act of sabotage or terrorism, could cause substantial delays in our operations, damage or destroy our manufacturing equipment, feedstocks, or product inventory, and cause us to incur additional expenses. The insurance we maintain against natural disasters may not be adequate to cover our losses in any particular case. For example, the Louisiana Plant will be located on a site adjacent to the Mississippi River. Recent flooding on the river has brought disastrous results to businesses, farms and residences located in the vicinity. While to date we have experienced no flooding, we could be affected by similar events in the future.
 
If we lose key personnel or are unable to attract and retain additional key personnel, it could harm our research and development efforts, delay the commercialization of our products, delay launch of products in our development pipeline and impair our ability to meet our business objectives.
 
Our business involves complex operations spanning a variety of disciplines and demanding a management team and employee workforce that is knowledgeable in the many areas necessary for our operations. The loss of any key member of our management team or key research and development or operational employees, or the failure to attract and retain such employees, could prevent us from developing and commercializing our products for our target markets and executing our business plans.
 
We may not be able to attract or retain qualified employees due to the intense competition for qualified personnel among biotechnology and other technology-based businesses, particularly in the biorenewables area, or due to the scarcity of personnel with the qualifications or experience necessary for our business. Hiring, training and successfully integrating qualified personnel into our operation is lengthy and expensive. The market for qualified personnel is very competitive because of the limited number of people available with the necessary technical skills and understanding of our technology and anticipated products. If we are not able to attract and retain the necessary personnel to accomplish our business objectives, we may experience staffing constraints that will adversely affect our ability to support our internal research and development programs or satisfy customer demands for our products. In particular, our product development and research and development programs are dependent on our ability to attract and retain highly skilled scientific, technical and operational personnel. Competition for such personnel from numerous companies and academic and other research institutions may limit our ability to do so on acceptable terms, or at all. All of our employees are at-will employees, which means that either the employee or we may terminate their employment at any time.
 
We use hazardous materials in our business and must comply with applicable environmental laws and regulations. Any claims relating to improper handling, storage or disposal of these materials or noncompliance with applicable laws and regulations could be time consuming and costly and could adversely affect our business and results of operations.
 
We use hazardous chemicals and biological materials in our business and are subject to a variety of federal, state and local laws and regulations governing the use, generation, manufacture, storage, handling and disposal of these materials both in the U.S. and overseas. Although we have implemented safety procedures for handling and disposing of these materials and waste products, we cannot be sure that our safety measures are compliant with legal requirements or adequate to eliminate the risk of accidental injury or contamination. In the event of contamination or injury, we could be held liable for any resulting damages, and any liability could exceed our insurance coverage. There can be no assurance that we will not violate environmental, health and safety laws as a result of human error, accident, equipment failure or other causes. Compliance with applicable environmental laws and regulations is expensive and time consuming, and the failure to comply with past, present, or future laws could result in the imposition of fines, third-party property damage, product liability and personal injury claims, investigation and remediation costs, the suspension of production, or a cessation of operations. Our liability in such an event may exceed our total assets. Liability under


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environmental laws can be joint and several and without regard to comparative fault. Environmental laws could become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violations, which could impair our research, development or production efforts and harm our business. Accordingly, violations of present and future environmental laws could restrict our ability to expand facilities, or pursue certain technologies, and could require us to acquire equipment or incur potentially significant costs to comply with environmental regulations.
 
WE ARE SUBJECT TO A VARIETY OF UNCERTAINTIES AND RISKS RELATING TO OUR AND THIRD PARTIES’ INTELLECTUAL PROPERTY
 
Our patent rights may not provide commercially meaningful protection against competition.
 
Our success will depend in part on our ability to obtain patents and other intellectual property rights to protect our products from competition. We have adopted a strategy of seeking patents and patent licenses in the U.S. and in certain foreign countries with respect to certain technologies used in, or relating to, our products and processes.
 
The scope and validity of patents and success in prosecuting patent applications involve complex legal and factual questions, and the issuance, scope, validity, and enforceability of a patent cannot be predicted with any certainty. Patents issued or licensed to us may be challenged, invalidated or circumvented. Moreover, third parties could practice our inventions in secret and in territories where we do not have patent protection. Such third parties may then try to sell or import products made using our inventions in and into the U.S. or other territories. We may be unable to prove that such products were made using our inventions. Additional uncertainty may result from patent reform legislation proposed by the U.S. Congress and other national governments and from legal precedent as handed down by the U.S. Court of Appeals for the Federal Circuit, the U.S. Supreme Court and the courts of other countries, as they determine legal issues concerning the scope, validity and construction of patent claims. Because patent applications in the U.S. and many foreign jurisdictions are typically not published until 18 months after filing, or in some cases not at all, and because publication of discoveries in the scientific literature often lags behind the actual discoveries, there is additional uncertainty as to the inventorship, and therefore the validity, of any issued patents. Accordingly, we cannot be certain that any of our patent applications will result in issued patents, or even if issued, be sure of their validity or enforceability. Moreover, we cannot predict whether any of our patent rights will be broad enough in scope to provide commercial advantage and prevent circumvention. In any event, patents are enforceable only for a limited term.
 
We may not be able to enforce our intellectual property rights throughout the world.
 
We plan in the future to build, or partner with others in building, manufacturing facilities using our technologies in countries other than the United States. However, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S. Many companies have encountered significant problems in protecting and enforcing intellectual property rights in certain foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to bioindustrial technologies. This could make it difficult for us to stop the infringement of our patents or misappropriation of our other intellectual property rights. Proceedings to enforce our patents and other proprietary rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business. Accordingly, our efforts to enforce our intellectual property rights in such countries may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop.
 
We may not be able to operate our business without infringing third-party patents.
 
Our ability to commercialize our proposed products depends on our ability to develop, manufacture, market and sell our proposed products without infringing the proprietary rights of third parties. Numerous U.S. and foreign patents and pending patent applications owned by third parties exist in fields that relate to our proposed products and our underlying methodologies and discoveries. Third parties may allege that our


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proposed products or our methods infringe their intellectual property rights. If we are found to infringe their intellectual property rights, we could be prohibited from commercializing the infringing product unless we obtain a license to use the technology covered by the patent or are able to design around the patent. We may be unable to obtain a license on terms acceptable to us, if at all, and we may not be able to redesign our products, biocatalysts or processes to avoid infringement. Even if we are able to redesign our products, biocatalysts or processes to avoid an infringement claim, our efforts to design around the patent may lead to an inferior or more costly product. A court could also order us to pay compensatory damages for any infringement, plus prejudgment interest and could, in addition, treble the compensatory damages and award attorney fees. These damages could be substantial and could harm our reputation, business, financial condition and operating results. A court also could enter orders that temporarily, preliminarily or permanently prohibit us and our customers from making, using, selling or offering to sell one or more of our products, or could enter an order mandating that we undertake certain remedial activities.
 
In addition to our patent rights, we rely in part on trade secrets to protect our technology. Trade secrets can be difficult to protect and enforce.
 
We rely on trade secrets to protect some of our technology, particularly where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to maintain and protect. Our strategy for scale-up of production requires us to share confidential information with our business partners and other parties. Our business partners’ employees, consultants, contractors or scientific and other advisors may unintentionally or willfully disclose our proprietary information to competitors. Enforcement of claims that a third party has illegally obtained and is using trade secrets is expensive, time consuming and uncertain. In addition, foreign courts are sometimes less willing than U.S. courts to protect trade secrets. If our competitors independently develop equivalent knowledge, methods and know-how, we would not be able to assert our trade secrets against them. Our failure to obtain or maintain trade secret protection could adversely affect our competitive business position.
 
If our biocatalysts, or the genes that code for our biocatalysts, are stolen, misappropriated or reverse engineered, others could use these biocatalysts or genes to produce competing chemical intermediates.
 
A number of third parties, including various collaborators, tolling plant operators, university scientists and researchers, customers and those involved in the shipping and handling of our biocatalysts and our primary fermentation products, have access to our proprietary biocatalysts. If our biocatalysts, or the genes that code for our biocatalysts, were stolen, misappropriated or reverse engineered based on our disclosures in our patent applications, they could be used by other parties for their own commercial gain. If this were to occur, it could be difficult for us to discover or challenge this type of use, especially in countries with limited intellectual property protection.
 
Our rights to key intellectual property are licensed to us. Termination of the related agreements would be highly detrimental to us.
 
We are a party to certain license agreements, including our license agreements with the University of Florida Research Foundation, Inc., pursuant to which we license key intellectual property underlying technology used in our business. These license agreements impose various diligence, milestone, payment, royalty, insurance and other obligations on us. If we fail to comply with any of these obligations, the licensors may have the right to reduce an exclusive license of intellectual property to a nonexclusive license or to terminate the license completely, in which case our competitors may gain access to these important licensed technologies or we may be unable to develop or market products covered by the licensed intellectual property. If we lose rights that are important to our biosuccinic acid or other biochemical production, our business would be materially adversely affected. We may enter into additional licenses in the future, and if we fail to comply with obligations under those agreements, we could suffer similar consequences.


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Certain colleges and universities that license intellectual property to us receive funding from U.S. government agencies, which could negatively affect our intellectual property rights.
 
Some of the research undertaken by the university technology offices with which we have relationships have been funded by grants from U.S. government agencies. When new technologies are developed with U.S. government funding, the government obtains certain rights in any resulting patents and technical data, generally including, at a minimum, a nonexclusive license authorizing the government to use the invention or technical data for noncommercial purposes. U.S. government funding must be disclosed in any resulting patent applications, and our rights in such inventions will normally be subject to government license rights, periodic progress reporting, foreign manufacturing restrictions and march-in rights. March-in rights refer to the right of the U.S. government, under certain limited circumstances, to require us to grant a license to technology developed under a government grant to a responsible applicant, or, if we refuse, to grant such a license itself. March-in rights can be triggered if the government determines that we have failed to work sufficiently towards achieving practical application of a technology or if action is necessary to alleviate health or safety needs, to meet requirements of federal regulations or to give preference to U.S. industry. If we breach the terms of our grants, the government may gain rights to the intellectual property developed in our related research.
 
Furthermore, the terms of our research grants from U.S. government agencies may prohibit us from using the new technologies we have developed using those grants in non-U.S. manufacturing plants, which could adversely affect our business. Under the Bayh-Dole Act of 1980, a party that acquires an exclusive license for an invention that was funded in whole or in part by a federal research grant is subject to the following government rights:
 
  •  products using the invention that are sold in the U.S. are to be manufactured substantially in the U.S., unless a waiver is obtained;
 
  •  the government may force the granting of a license to a third party who will make and sell the needed product if the licensee does not pursue reasonable commercialization of a needed product using the invention; and
 
  •  the U.S. government may use the invention for its own needs.
 
If we fail to meet these guidelines, we would lose our exclusive rights to these inventions and we would lose potential revenue derived from these inventions.
 
We may not retain exclusive rights to intellectual property created as a result of our collaborations.
 
We are negotiating a joint development agreement with Davy and a joint venture and licensing arrangement with PTTCH and have established a partnership with Uhde, each of which involves, or would involve if a binding agreement were signed, joint venture research and development efforts. We share, and would share, to various degrees, intellectual property we jointly develop. Such provisions may limit our ability to gain commercial benefit from some of the intellectual property we develop and may lead to costly or time-consuming disputes with parties with whom we have commercial relationships over rights to certain innovations.
 
Patent disputes and litigations can be expensive.
 
Because of the uncertainties involved in the issuance and enforcement of patents, and the value of a broadly interpreted patent, patent disputes and litigations are common. We may become involved in patent disputes relating to infringement of our technology, with third-parties asserting “blocking patents,” with our licensors or licensees, with collaborators and with employees, among others. Patent disputes can take years to resolve, can be very costly and can result in loss of rights, injunctions and substantial penalties. Moreover, patent disputes and related proceedings can distract management’s attention and interfere with running the business.


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FINANCING UNCERTAINTIES CREATE RISKS FOR US
 
We may require substantial additional financing to achieve our goals. If we cannot raise capital when needed or on acceptable terms, we could be forced to delay, limit, reduce or terminate our development and commercialization efforts.
 
Since our inception, most of our resources have been dedicated towards research and development and otherwise investigating the technological and commercial feasibility of our technology in our laboratories and at third-party tolling facilities. We have consumed substantial amounts of capital since our inception in 2009 for our research and development activities. For the year ended December 31, 2010, we used $9.4 million to fund our operating and investing activities. Although we believe our existing cash resources of $42.6 million as of June 30, 2011, including the $15.2 million of restricted cash for the Louisiana Plant, plus the proceeds of this offering, will be sufficient to fund our anticipated cash requirements for at least the next 24 months, we may require significant additional financing in the future to fund our operations. We believe that we will continue to expend substantial resources for the foreseeable future on further developing our technologies and developing commercial-scale industrial biochemical plants. These expenditures will include costs associated with research and development, developing, building and operating industrial biochemical plants, acquiring or constructing storage facilities and negotiating agreements for the purchase of feedstocks and the sale of biosuccinic acid and other biochemicals that we plan to produce. In addition, unanticipated costs may arise. Because the costs of developing our technology at a commercial scale are highly uncertain, we cannot estimate with certainty the amounts necessary to successfully commercialize our production.
 
To date, we have funded our operations primarily through equity issuances, debt and government awards. We believe that the net proceeds from this offering, together with our existing cash and cash equivalents and government awards, will allow us to take a substantial step toward implementing our strategy. However, based on our current plans and expectations, we will require additional funding to achieve our production and sales objectives for the next several years. In addition, the cost of preparing, filing, prosecuting, maintaining and enforcing patent, trademark and other intellectual property rights and defending ourselves against potential claims by others that we are violating their intellectual property rights may be significant. Moreover, our plans and expectations may change as a result of factors currently unknown to us, and we may need additional funds sooner than planned. We may also choose to seek additional capital sooner than required due to favorable market conditions or strategic considerations.
 
Our future capital requirements will depend on many factors, including:
 
  •  the timing of, and costs involved in, developing and scaling up our technologies for commercial-scale production of biosuccinic acid and other chemical intermediates;
 
  •  the timing of, and costs involved in, developing and building the Louisiana Plant and other industrial biochemical manufacturing plants;
 
  •  the cost of operating and maintaining our manufacturing plants;
 
  •  our ability to gain market acceptance for biosuccinic acid;
 
  •  the requirements for biosuccinic acid of our initial three customers and whether they comply with their supply agreements with us by purchasing those requirements from us;
 
  •  our ability to negotiate additional supply arrangements for our biosuccinic acid and other biochemicals and the timing and terms of those sales;
 
  •  our ability to negotiate supply agreements for the purchase of the feedstocks required in our production process and for the sale of biosuccinic acid and other biochemicals we produce and the timing and terms of those agreements;
 
  •  our ability to sell ammonium sulfate, a co-product of producing biosuccinic acid, and the timing and terms of those sales;


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  •  our ability to enter into binding collaboration agreements with Davy, PTTCH and others, to maintain those relationships and the timing and terms of those arrangements; and
 
  •  the cost of preparing, filing, prosecuting, maintaining, defending and enforcing patent, trademark and other intellectual property claims, including litigation costs and the outcome of such litigation.
 
Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If needed funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate:
 
  •  our research and development activities;
 
  •  our plans to build biosuccinic acid and other biochemical manufacturing plants;
 
  •  our production of biosuccinic acid at our plants; and
 
  •  our ability to discover, develop, scale-up and produce additional biochemicals and products from our pipeline.
 
Additional financing may not be available to us when and if we need it, on commercially reasonable terms, or at all. Until we can generate significant continuing revenues, we expect to satisfy our future cash needs through strategic collaborations, private or public sales of our securities, debt financings, governmental awards, or by licensing our technology. Further, additional funding may significantly dilute existing stockholders.
 
Our government award from the DOE is subject to certain conditions and obligations.
 
We are the recipient of an award from the U.S. Department of Energy providing for a 50/50 cost share for our Louisiana Plant, with up to $50 million reimbursable by the DOE. We have already received and spent $11.4 million under this award as of June 30, 2011. The terms of this award require us, and we intend, to use the funds to design, build and operate our Louisiana Plant to develop U.S.-based production capabilities for renewable chemicals derived from grain sorghum and other lignocellulosic feedstocks for a period of approximately 1,100 hours, which we anticipate will not have an impact on our overall business plan. Under this award, we are required to fund an additional $38.6 million in cost-sharing expenses to build the Louisiana Plant and to reserve $15.2 million in cash contingency. Generally, government award agreements have fixed terms and may be terminated, modified or recovered by the granting agency under certain conditions. If the Department of Energy later terminates its funding agreement with us, our ability to complete the construction of the Louisiana Plant could be impaired, which could harm our business.
 
The planned expansion of our Louisiana Plant will depend on infrastructure improvements that will be paid for and undertaken by the Lake Providence Port Commission and the State of Louisiana.
 
The Lake Providence Port Commission and the State of Louisiana have committed a combined total of $16 million to support infrastructure improvements at the site of our Louisiana Plant, $6 million of which has already been spent on engineering and related fees. These infrastructure improvements will be necessary to support the proposed expansion of the Louisiana Plant. If the Lake Providence Port Commission or the State of Louisiana later terminate their commitments to provide funding for and make the infrastructure improvements referenced above, production prospects could be impaired, which could harm our business.
 
We may seek to obtain additional government awards and subsidies in the future to offset all or a portion of the costs of building or retrofitting new biochemical manufacturing plants and research and development activities. We cannot be certain that we will be able to secure any such additional government awards or subsidies. Our existing funding or any new government awards that we may obtain may be terminated, modified or recovered by the granting governmental body under certain conditions. Various governments have grant, loan and subsidy programs focused on the development of clean technologies, including alternatives to petroleum-based products and the reduction of carbon emissions. Such government programs could lead to increased funding for our competitors or a rapid increase in the number of competitors within those markets.


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We may experience shortfalls in our funding of the Louisiana Plant.
 
We expect to pay for the completion of the Louisiana Plant, including construction and start-up costs, with the net proceeds of the $50 million award from the DOE and $10 million in infrastructure improvements from the Lake Providence Port Commission and the State of Louisiana and the balance from our own funds. We have estimated the $103 million cost to complete the Louisiana Plant, which includes working capital, fees and expenses, based upon a competitive bidding process for various equipment and construction packages designed by our engineering partners. Most of the equipment and construction packages were provided on a lump sum basis, so the costs for these are firm, but are subject to additional costs for design changes. Cost overruns or other unexpected difficulties could result in additional costs in excess of the amount that we have reserved for construction contingencies, which could require additional funding. Such funds may not be available when we need them, on terms that are acceptable to us or at all, which could delay or prevent our initial commercial production of biosuccinic acid. If there are difficulties, delays or other unforeseen issues relating to the construction or operation of the Louisiana Plant, our total investment in the plant may increase significantly and the revenue from sales, if any, of biosuccinic acid and our other biochemical intermediates produced at the plant and the distribution of profits, if any, may be delayed.
 
OTHER RISKS YOU WOULD FACE AS AN INVESTOR
 
A significant portion of our total outstanding shares of common stock is restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
 
Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. When this offering is completed, assuming the sale of           shares of common stock in this offering, our three largest stockholders as of           , 2011 will beneficially own, collectively, approximately     % of our outstanding common stock. If one or more of them were to sell a substantial portion of the shares they hold, it could cause our stock price to decline.
 
Upon completion of this offering we will have           outstanding shares of common stock, which excludes shares subject to outstanding options and warrants. All of the shares we sell in this offering (except any acquired by our affiliates) will be freely tradable.          shares of common stock will be subject to a 180-day contractual lock-up with the underwriters (which lock-up period may be released at any time and as to any number of shares by the underwriters). Upon expiration of the lockup agreements, these shares will be eligible for immediate resale, subject in some cases to the volume and other restrictions of Rule 144 under the Securities Act of 1933, as amended, or the Securities Act. These shares represent a substantial majority of our total shares outstanding, and sales of these shares upon expiration of the lock-up could significantly depress our share price.
 
In addition, as of June 30, 2011, there were 2,574,883 shares issuable under currently outstanding options, restricted stock units and warrants that if issued will become eligible for sale in the public market to the extent permitted by any applicable vesting requirements, the lock-up agreements and Rules 144 and 701 under the Securities Act. Moreover, after this offering, the holders of an aggregate of approximately           shares of our outstanding common stock (including shares of our common stock issued and issuable upon the exercise of options or warrants), will have rights, subject to some conditions, to require us to file registration statements covering their shares and to include their shares in registration statements that we may file for ourselves or other stockholders.
 
We also intend to register           shares of common stock that have been reserved for issuance under our 2011 Omnibus Incentive Plan and our 2011 employee stock purchase plan. To the extent any of these registered shares are issued, subject to any applicable vesting requirements they can be freely sold in the public market subject to the 180-day lock-up periods under the lock-up agreements described in the “Underwriting” section of this prospectus.


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Concentration of ownership among our existing officers, directors and principal stockholders may prevent other stockholders from influencing significant corporate decisions and depress our stock price.
 
Assuming that           shares are sold in this offering, our officers, directors and existing stockholders who beneficially own at least 5% of our stock will together beneficially own approximately      % of our outstanding common stock following the completion of this offering. As of June 30, 2011, PTT Chemical International Private Limited, a wholly-owned subsidiary of PTTCH, Plainfield Finance II LLC/Plainfield Direct LLC and Norwood LDK, LLC, the entity through which our chief executive officer, Stephen J. Gatto, holds his shares in the company, beneficially owned approximately 47.9%, 27.1% and 13.8% of our common stock, respectively. If these officers, directors, and principal stockholders or a group of our principal stockholders act together, they will be able to exert a significant degree of influence over our management and affairs and control matters requiring stockholder approval, including the election of directors and approval of mergers or other business combination transactions. The interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders. For instance, officers, directors, and principal stockholders, acting together, could cause us to enter into transactions or agreements that we would not otherwise consider. Similarly, this concentration of ownership may have the effect of delaying or preventing a change in control of our company otherwise favored by our other stockholders. This concentration of ownership could depress our stock price.
 
Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.
 
The initial public offering price in this offering will be substantially higher than the tangible book value per share of shares of our common stock immediately after the offering. Tangible book value means the total value of our tangible assets less our total liabilities divided by the number of shares of our common stock outstanding. We call the difference between the price per share paid by investors in this offering and the tangible book value per share immediately after this offering “book value dilution,” or simply “dilution.” To the extent outstanding options and warrants to purchase shares of common stock are exercised, there will be further dilution. For further information on this calculation, see “Dilution” elsewhere in this prospectus.
 
We have broad discretion in the use of net proceeds from this offering and may not use them effectively.
 
Although we currently intend to use the net proceeds from this offering in the manner described in “Use of proceeds” elsewhere in this prospectus, we will have broad discretion in the application of the net proceeds. Our failure to apply these net proceeds effectively could affect our ability to continue to develop and sell our products and grow our business, which could cause the value of your investment to decline.
 
We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.
 
We have never operated as a public company. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as related rules implemented by the Securities and Exchange Commission, or the SEC, and The Nasdaq Stock Market, impose various requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more expensive for us to maintain director and officer liability insurance.
 
If we fail to maintain an effective system of internal controls, we might not be able to report our financial results accurately or prevent fraud; in that case, our stockholders could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our stock.
 
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. In addition, SEC rules implemented in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 will


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require us to evaluate and report on and, in the event we become an “accelerated filer” as defined in SEC rules, our independent registered public accounting firm to attest to, our internal control over financial reporting beginning with our Annual Report on Form 10-K for the year ending December 31, 2012. The process of implementing our internal controls and complying with Section 404 will be expensive and time consuming and will require significant attention of management. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Even if we conclude, and our independent registered public accounting firm concurs, that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our reporting obligations. If we or our independent registered public accounting firm determine a “material weakness,” as defined in SEC rules, exists in our internal control over financial reporting, the disclosure of that determination, even if quickly remedied, could reduce the market’s confidence in our financial statements and harm our stock price. In addition, non-compliance with Section 404 could subject us to a variety of administrative sanctions, including SEC action, ineligibility for short form resale registration, the suspension or delisting of our common stock from the stock exchange on which it is listed and the inability of registered broker-dealers to make a market in our common stock, which would further reduce our stock price and could harm our business.
 
We are subject to anti-takeover provisions in our certificate of incorporation and bylaws and under Delaware law that could delay or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders.
 
Provisions in our second amended and restated certificate of incorporation, our amended and restated bylaws and Delaware law may delay or prevent an acquisition of us. These provisions may also frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, who are responsible for appointing the members of our management team. Although we believe these provisions together provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would apply even if an offer to acquire our company may be considered beneficial by some stockholders. These provisions are described in detail under the caption “Description of capital stock.”
 
Our share price may be volatile and you may be unable to sell your shares at or above the offering price.
 
The initial public offering price for our shares will be determined by negotiations between us and representatives of the underwriters and may not be indicative of prices that will prevail in the trading market. The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:
 
  •  actual or anticipated fluctuations in our financial condition and operating results;
 
  •  the position of our cash and cash equivalents;
 
  •  actual or anticipated changes in our growth rate relative to our competitors;
 
  •  actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate;
 
  •  announcements of technological innovations by us, our partners or our competitors;
 
  •  announcements by us, our partners or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
 
  •  the entry into, modification or termination of licensing arrangements;
 
  •  the entry into, modification or termination of research, development, commercialization, supply or distribution arrangements;


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  •  additions or losses of customers;
 
  •  additions or departures of key management or scientific personnel;
 
  •  competition from existing products or new products that may emerge;
 
  •  issuance of new or updated research reports by securities or industry analysts;
 
  •  fluctuations in the valuation of companies perceived by investors to be comparable to us;
 
  •  disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
 
  •  announcement or expectation of additional financing efforts;
 
  •  sales of our common stock by us or our stockholders;
 
  •  share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
 
  •  general market conditions in our industry; and
 
  •  general economic and market conditions, including the recent financial crisis.
 
Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of shares of our common stock. If the market price of shares of our common stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.
 
A significant portion of our total outstanding shares of common stock is restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.


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Special note regarding forward-looking statements
 
This prospectus contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are contained principally in the sections entitled “Prospectus summary,” “Risk factors,” “Management’s discussion and analysis of financial condition and results of operations” and “Business.” These statements relate to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties are contained principally in the section entitled “Risk factors.”
 
Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential,” or the negative of those terms, and similar expressions and comparable terminology intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as guarantees of future events. These forward-looking statements represent our estimates and assumptions only as of the date of this prospectus and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this prospectus.
 
In particular, forward-looking statements in this prospectus include statements about:
 
  •  the timing and cost of constructing, operating and expanding the Louisiana Plant and other biochemical production facilities;
 
  •  our expectations of how our biobased production technology will perform at ongoing, commercial scale, especially as to its efficiency and cost;
 
  •  our access to capital, including to the remaining portion of our award from the DOE;
 
  •  the commercial scale-up of our industrial biochemical production, including the timing and volume of our future production;
 
  •  the purchase needs of our initial three customers and our ability to negotiate pricing terms with them and their performance under our supply agreements with them;
 
  •  the availability of suitable and cost-competitive feedstocks;
 
  •  our ability to gain market acceptance for biosuccinic acid and other biochemicals;
 
  •  our ability to produce and sell ammonium sulfate;
 
  •  the expected applications of our products and potential products and markets;
 
  •  the expected cost-competitiveness and relative performance attributes of our biosuccinic acid and the products derived from it;
 
  •  the achievement of advances in our technology platform;
 
  •  the timing of commercial sales of our products, including the timing and terms of supply agreements for the biosuccinic acid that we will produce;


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  •  our ability to enter into collaborations with Davy, PTTCH and other commercial enterprises, the timing of any such collaboration and our success in obtaining the hoped-for benefits from our current collaborations and any such future arrangements that we may negotiate;
 
  •  the cost of protecting intellectual property rights and/or defending against patent infringement claims, and our ability to compete in the event of an adverse outcome in any legal or administrative proceeding regarding intellectual property rights or patent infringement;
 
  •  customer certification, approval and acceptance of our products;
 
  •  the anticipated sizes of the markets for our products;
 
  •  the future price and volatility of renewable feedstocks; and
 
  •  the future price and volatility of petroleum and products derived from petroleum.


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Use of proceeds
 
We estimate that we will receive net proceeds of approximately $      million from the sale of           shares of common stock in this offering based on an assumed initial public offering price of $      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 $      per share (the mid-point of the price range set forth on the cover page of this prospectus) would increase (decrease) the net proceeds to us from this offering by $      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 estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase           additional shares, we estimate that our net proceeds will be approximately $      million based on an assumed initial public offering price of $      per share (the mid-point of the price range set forth on the cover page of this prospectus).
 
We currently intend to use all or a portion of the net proceeds of this offering, together with $      million of remaining proceeds from a government award, $10 million in infrastructure improvements to be contributed by the Lake Providence Port Commission and the State of Louisiana and $      million of existing cash, cash equivalents and restricted cash to complete the 30 million pound per year plant at the Port of Lake Providence, Louisiana, or the Louisiana Plant (approximately $103 million, which includes working capital, fees and expenses), to fund our expected equity contribution to the expansion of the Louisiana Plant to 170 million pounds per year (approximately $60 million, which includes working capital, fees and expenses), to pay the dividend accruing on the Class A common stock upon the closing of this offering (which totaled $2,222,466 as of June 30, 2011) and to fund research and development expenses (which we estimate will be approximately $25.5 million in the aggregate for the two fiscal years following the completion of this offering) and for working capital and other general corporate purposes, which will include expenses and the costs associated with being a public company. We may also use a portion of the net proceeds to acquire other complementary businesses, products or technologies or to make other strategic investments. Although we do not have any current plans or agreements for any specific acquisitions or investments at this time, we believe opportunities may exist from time to time to expand our current business through strategic investments or acquisitions with other companies, products or technologies.
 
The potential uses of net proceeds from this offering represent our current intentions based upon our present business plans and business conditions. We cannot guarantee the specific amount of the net proceeds that will be used to develop, construct and operate our biochemical production capabilities globally, fund working capital or be used for 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.


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Dividend policy
 
We have never declared or paid cash dividends on shares of our common or convertible common stock and currently do not plan to declare or pay cash dividends in the foreseeable future, other than the dividend accruing on the Class A common stock at the rate per annum of 8% per share compounded annually on a cumulative basis, which is to be paid upon the conversion of Class A common stock into common stock upon the closing of this offering. As of June 30, 2011, accrued Class A common stock dividends totaled $2,222,466. We expect to retain our future earnings, if any, for use in the operation and expansion of our business. The payment of cash dividends in the future, if any, will be at the discretion of our board of directors and will depend upon such factors as earnings levels, capital requirements, requirements under the Delaware General Corporation Law, restrictions and covenants pursuant to any other credit facilities or debt indentures we may enter into, our overall financial condition and any other factors deemed relevant by our board of directors.


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Capitalization
 
The following table sets forth our cash, cash equivalents and restricted cash and our capitalization as of June 30, 2011:
 
  •  on an actual basis; and
 
  •  on a pro forma basis after giving effect to the conversion of all of our outstanding Class A common stock and Class B common stock into 14,259,858 shares of common stock and payment of the Class A common stock cumulative 8% dividend in the amount accrued through June 30, 2011 of $2,222,466 upon completion of this offering and the inclusion of 186,491 shares of restricted stock issued under the 2011 Omnibus Incentive Plan; including the increase to 40,000,000 shares of our common stock authorized for issuance, effected by the filing of an amendment to our amended and restated certificate of incorporation; and
 
  •  on a pro forma, as adjusted basis to reflect the pro forma adjustments described above, the completion of this offering and our receipt of the estimated net proceeds from this offering, based on an assumed initial public offering of      shares at a price of $      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; including the obligatory exercise of warrants exercisable for 17,134 shares of common stock at an exercise price of $6.00 per share and warrants exercisable for 89,656 shares of common stock at an exercise price of $10.00 per share; and the increase to 100,000,000 shares of our common stock authorized for issuance, among other things, effected by the filing of a second amended and restated certificate of incorporation.
 
The pro forma and pro forma, as adjusted, information below is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and the accompanying notes appearing elsewhere in this prospectus.
 
                         
    As of June 30, 2011  
                Pro Forma as
 
    Actual     Pro Forma     Adjusted  
 
Cash, cash equivalents and restricted cash
  $ 42,570,475     $ 40,348,009     $  
                         
Stockholders’ equity:
                       
Class A common stock, $0.0001 par value per share: 11,214,953 shares authorized and outstanding, actual; 11,214,953 shares authorized, no shares outstanding, pro forma; no shares authorized or outstanding, pro forma, as adjusted
  $ 1,121     $        
Class B common stock, $0.0001 par value per share: 3,044,905 shares authorized and outstanding, actual; 3,044,905 authorized, no shares outstanding, pro forma; no shares authorized or outstanding, pro forma, as adjusted
    304              
Preferred stock, $0.0001 par value per share: No shares authorized or outstanding, actual and pro forma; 5,000,000 shares authorized, no shares outstanding, pro forma, as adjusted
                 
Common stock, $0.0001 par value per share: 30,000,000 shares authorized; 9,159,907 outstanding, actual; 40,000,000 shares authorized, 23,606,256 shares outstanding, pro forma; 100,000,000 shares authorized,             shares issued and outstanding, pro forma, as adjusted
    916       2,360        
Additional paid-in capital
    76,756,687       76,756,687        
Accumulated deficit
    (26,070,099 )     (28,292,565 )      
                         
Total stockholders’ equity
    50,688,929       48,466,482        
                         
Total capitalization
  $ 50,688,929     $ 48,466,482     $  
                         


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Each $1.00 increase or decrease in the assumed initial public offering price of $      per share (the mid-point of the price range set forth on the cover page of this prospectus) would increase (decrease), our pro forma, as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $      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 estimated underwriting discounts and commissions and estimated offering expenses payable by us.
 
 
The number of shares of common stock shown as issued and outstanding in the table set forth above is based on the number of shares outstanding as of June 30, 2011, and excludes:
 
  •  186,491 shares of restricted stock issued under the 2011 Omnibus Incentive Plan and outstanding (except all of these shares are included in the pro forma and pro forma as adjusted columns);
 
  •  699,220 shares issuable under restricted stock units granted subject to vesting conditions under our 2011 Omnibus Incentive Plan.
 
  •  1,629,941 shares of common stock issuable upon the exercise of options issued under our 2011 Omnibus Incentive Plan and outstanding as of June 30, 2011 at a weighted average exercise price of $13.32 per share;
 
  •  166,021 shares of common stock issuable upon the exercise of warrants outstanding as of June 30, 2011 at a weighted average exercise price of $10.66 per share (except, as noted, the obligatory exercise of warrants exercisable for 17,134 shares of common stock at an exercise price of $6.00 per share and warrants exercisable for 89,656 shares of common stock at an exercise price of $10.00 per share, with net proceeds to the company of $999,364, are reflected in the pro forma as adjusted column);
 
  •  1,452,528 shares of our common stock reserved for future issuance under our 2011 Omnibus Incentive Plan plus any annual increases in the number of shares of common stock reserved for future issuance as provided for in such plan, as described in “Management — Employee Benefits and Stock Plans”; and
 
  •  500,000 shares of common stock reserved for issuance under our 2011 employee stock purchase plan, which will become effective upon completion of this offering.


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Dilution
 
If you invest in our common stock, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma, as adjusted net tangible book value per share of our common stock after this offering.
 
Our pro forma net tangible book value at June 30, 2011 was $48.5 million, or $2.05 per share of common stock. Pro forma net tangible book value per share represents total tangible assets less total liabilities, divided by the number of outstanding shares of common stock on June 30, 2011, after giving effect to the conversion of all of our outstanding Class A common stock and Class B common stock into shares of our common stock upon completion of this offering. Our pro forma, as adjusted net tangible book value at June 30, 2011, after giving effect to the sale by us of           shares of common stock in this offering at an assumed initial public offering price of $      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, would have been approximately $      million, or $      per share. This represents an immediate increase in pro forma, as adjusted net tangible book value of $      per share to existing stockholders and an immediate dilution of $      per share to new investors purchasing shares of our common stock in this offering at the assumed initial public offering price of $      per share (the mid-point of the price range set forth on the cover page of this prospectus), subject to adjustment to reflect the actual offering price. The following table illustrates this per share dilution:
 
                 
Assumed initial public offering price per share
          $        
Pro forma net tangible book value per share at June 30, 2011
  $ 2.05          
Increase in pro forma net tangible book value per share attributable to this offering
               
                 
Pro forma, as adjusted net tangible book value per share after this offering
               
                 
Dilution per share to new investors
          $    
                 
 
If the underwriters exercise their over-allotment option in full, the pro forma as adjusted net tangible book value will increase to $      per share, representing an immediate increase to existing stockholders of $      per share and an immediate dilution of $      per share to new investors.
 
A $1.00 increase (decrease) in the assumed initial public offering price of $      per share (the mid-point of the price range set forth on the cover page of this prospectus) would increase (decrease) our pro forma, as adjusted net tangible book value by $      million, the pro forma, as adjusted net tangible book value per share by $      per share and the dilution in the pro forma net tangible book value to new investors in this offering by $      per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
 
The following table shows, as of June 30, 2011, the number of shares of common stock purchased from us, the total consideration paid to us and the average price paid per share by existing stockholders and by new investors purchasing common stock in this offering at an assumed initial public offering price of $      per share (the mid-point of the price range set forth on the cover page of this prospectus), before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The discussion and tables in this section regarding dilution are based on 23,606,256 shares of common stock issued and outstanding as of June 30, 2011 and the $6.00 and $10.00 per share warrant exercise and assumes the conversion of all of our Class A common stock and Class B common stock into an aggregate of 14,259,858 shares of our common stock upon the completion of this offering and inclusion of the 186,491 shares of restricted stock.
 
                                         
    Shares Purchased     Total Consideration     Average Price per
 
    Number     Percent     Amount     Percent     Share  
 
Existing stockholders
    23,606,256                 $ 76,759,047                 $ 3.25  
New investors
                  $               $  
                                         
Total
  $               $               $  
                                         


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The table above, and the information below, assumes that our existing stockholders do not purchase any shares in this offering.
 
A $1.00 increase (decrease) in the assumed initial public offering price per share of $      per share (the mid-point of the price range set forth on the cover page of this prospectus) would increase (decrease) total consideration paid by new investors, total consideration paid by all stockholders and the average price per share paid by all stockholders by $      million, $      million and $     , respectively, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and before deducting the underwriting discount and estimated offering expenses payable by us.
 
The discussion and tables in this section regarding dilution assume the obligatory exercise of warrants exercisable for 17,134 shares of common stock at an exercise price of $6.00 per share and warrants exercisable for 89,656 shares of common stock at an exercise price of $10.00 per share assuming an initial public offering in excess of 1.5 times the exercise price of the warrants, and exclude:
 
  •  699,220 shares issuable under restricted stock unit grants subject to vesting conditions under the 2011 Omnibus Incentive Plan.
 
  •  1,629,941 shares of common stock issuable upon the exercise of options issued under the 2011 Omnibus Incentive Plan and outstanding as of June 30, 2011 at a weighted average exercise price of $13.32 per share;
 
  •  59,231 shares of common stock issuable upon the exercise of warrants outstanding as of June 30, 2011 at an exercise price of $13.00 per share;
 
  •  1,452,528 shares of our common stock reserved for future issuance under our 2011 Omnibus Incentive Plan, plus any annual increases in the number of shares of common stock reserved for future issuance as provided for in such plan, as described in “Management — Employee Benefit and Stock Plans”; and
 
  •  500,000 shares of common stock reserved for issuance under our 2011 employee stock purchase plan, which will become effective upon completion of this offering.
 
If the underwriters exercise their option to purchase additional shares in full, the following will occur:
 
  •  the number of shares of our common stock held by existing stockholders would decrease to     % of the total number of shares of our common stock outstanding after this offering; and
 
  •  the number of shares of our common stock held by new investors would increase to approximately     % of the total number of shares of our common stock outstanding after this offering.
 
To the extent that outstanding options or warrants are exercised, you will experience further dilution. If all options and warrants outstanding as of June 30, 2011 had been exercised on such date, our pro forma net tangible book value as of June 30, 2011 would have been $70.9 million, or $2.80 per share, and the pro forma, as adjusted net tangible book value after this offering would have been $      million, or $      per share, causing dilution to new investors of $      per share.
 
In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities would result in further dilution to our stockholders.


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Selected historical financial data
 
The following selected historical financial data should be read together with our historical consolidated financial statements and the accompanying notes, included elsewhere in this prospectus, and “Management’s discussion and analysis of financial condition and results of operations.” The selected historical financial data in this section is not intended to replace our historical financial statements and the accompanying notes. For purposes of the disclosure contained in this section, “Myriant”, “Company”, “we”, “us” and “our” refer only to Myriant Corporation and its subsidiaries.
 
We derived the historical financial statement data as of and for the fiscal year ended December 31, 2008 and for the period from January 1, 2009 to July 15, 2009 from the audited consolidated financial statements of BioEnergy International, LLC, or the Predecessor Company, included elsewhere in this prospectus, and as of December 31, 2009 and 2010, for the period from July 16, 2009 (inception) to December 31, 2009, and for the fiscal year ended December 31, 2010 from our audited consolidated financial statements, included elsewhere in this prospectus. We derived the financial statement data for the years ended December 31, 2007 and 2006 from the Predecessor’s unaudited financial statements, which are not included in this prospectus.
 
The consolidated statements of operations data for the six months ended June 30, 2010 and 2011 and the consolidated balance sheet data as of June 30, 2011 are derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. The unaudited interim consolidated financial statements have been prepared on the same basis as our audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly our financial position as of June 30, 2011 and results of operations for the six months ended June 30, 2010 and 2011. Operating results for the six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ended December 31, 2011. The data should be read in conjunction with the consolidated financial statements, related notes, and other financial information included elsewhere in this prospectus.
 
The table below sets forth our and the Predecessor Company’s respective consolidated results of operations for the periods shown. The inception of the Company was July 16, 2009. The 2008 results reflect the results of the Predecessor Company for the year ended December 31, 2008. The 2009 results reflect the results of the Predecessor Company for the period from January 1, 2009 through July 15, 2009, which we refer to as the 2009 Predecessor Period, and for us for the period from July 16, 2009 to December 31, 2009, which we refer to as the 2009 Successor Period.
 
The operations of the Predecessor Company and our company were substantially the same as all assets and liabilities transferred from the Predecessor Company to us, with the exception of certain of the Predecessor Company’s debt and the Predecessor Company’s investment in BioEnergy Holding LLC, as described above. The most notable changes that resulted from the transfer of the chemical intermediates business from the Predecessor Company to us are as follows:
 
  •  The Predecessor Company’s investment in BioEnergy Holding LLC was not transferred to us. This did not have a significant financial impact as there were no earnings or invested capital in the investment.
 
  •  The Predecessor Company’s note payable to BioEnergy Holding LLC, in the amount of approximately $10.0 million at such time with interest at 6%, was not transferred to us.
 
  •  The Predecessor Company’s warrant liability in the amount of $1.5 million was not transferred to us.
 
Based on our analysis, we concluded that (i) the results of the Predecessor Company’s operations for the year ended December 31, 2008 were comparable to the results of the operations for the 2009 Predecessor Period combined with the 2009 Successor Period and (ii) the results of operations for the 2009 Predecessor Period combined with the 2009 Successor Period were comparable to our results of operations for the year ended December 31, 2010.


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The financial statements included in this prospectus do not reflect results of operations, financial position and cash flows as if the Predecessor Company’s biochemical business had been operated as a stand-alone company during all periods presented prior to July 16, 2009 (inception).
 
                                                                 
    Predecessor Company     Myriant Corporation  
                      Period from
                         
    Fiscal Year
    Fiscal Year
    Fiscal Year
    January 1, 2009
    Period from
    Fiscal Year
    Six Months Ended
 
    Ended
    Ended
    Ended
    to July 15,
    July 16, 2009 (Inception)
    Ended
    June 30,  
    December 31, 2006     December 31, 2007     December 31, 2008     2009     to December 31, 2009     December 31, 2010     2010     2011  
    (Unaudited)     (Unaudited)                             (Unaudited)     (Unaudited)  
 
Revenues:
                                                               
License fee revenue
  $ 267,065     $ 396,515     $ 344,860     $ 71,833     $ 221,711     $ 258,241     $ 13,297     $ 20,997  
Management fee revenue-related party
                262,212       267,318             3,557,574       1,575,166       2,519  
Development fee revenue-related party
                3,125,714                                
Government awards
                                  10,419,043       5,499,039        
                                                                 
Total revenues
    267,065       396,515       3,732,786       339,151       221,711       14,234,858       7,087,502       23,516  
                                                                 
Operating expenses:
                                                               
Cost of license fee revenue
    108,432       135,813       110,020       22,373       73,859       84,600       3,148       6,999  
Research and development
    653,469       1,499,577       4,679,935       3,770,721       2,793,085       15,904,717       8,029,832       4,224,776  
Project development
    706,666       1,764,244       2,179,965                                
General and administrative expense
    1,547,540       3,166,646       5,699,186       5,438,073       4,979,186       12,673,247       5,681,186       7,827,370  
                                                                 
Total operating expenses
    3,016,107       6,566,280       12,669,106       9,231,167       7,846,130       28,662,564       13,714,166       12,059,145  
                                                                 
Operating loss
    (2,749,042 )     (6,169,765 )     (8,936,320 )     (8,892,016 )     (7,624,419 )     (14,427,706 )     (6,626,664 )     (12,035,629 )
Other income (expense), net
                                                               
Interest income
    1,477       138,395       60,222       5,385       8,051       87,611       85,985       18,316  
Interest expense
    (260,268 )     (1,959,909 )     (1,636,062 )     (1,352,767 )     (915,804 )     (4,470,478 )     (1,304,264 )     (12,606,762 )
Miscellaneous income
    600                                           5,437  
Gain(loss) on foreign currency exchange
                      (21,721 )           (5,235 )     (3,853 )     7,759  
Changes in fair value of warrant liability
                      2,092,643       (515,108 )     2,592,979       (660,520 )     (1,459,220 )
                                                                 
Other income (expense), net
    (258,191 )     (1,821,514 )     (1,575,840 )     723,540       (1,422,861 )     (1,795,123 )     (1,882,653 )     (14,034,470 )
Net loss
    (3,007,233 )     (7,991,279 )     (10,512,160 )     (8,168,476 )     (9,047,280 )     (16,222,829 )     (8,509,317 )     (26,070,099 )
Dividend on Class A common stock
                                              (2,222,466 )
                                                                 
Net loss attributable to common stockholders
  $ (3,007,233 )   $ (7,991,279 )   $ (10,512,160 )   $ (8,168,476 )   $ (9,047,280 )   $ (16,222,829 )   $ (8,509,317 )   $ (28,292,565 )
                                                                 
Net loss per unit/share attributable to common stockholders — basic and diluted
  $ (0.69 )   $ (1.72 )   $ (2.14 )   $ (1.55 )   $ (1.30 )   $ (2.31 )   $ (1.22 )   $ (3.30 )
Weighted average number of units outstanding- basic and diluted
    4,358,126       4,655,011       4,918,668       5,285,807       6,953,079       7,009,251       6,993,252       8,582,456  
Balance Sheet Data:
                                                               
Cash, cash equivalents and restricted cash
  $ 1,108,795       7,335,110       624,838               1,467,781       938,197       154,697       42,570,475  
Working capital
    852,780       7,263,300       (725,839 )             (2,158,612 )     (6,484,047 )     (3,018,234 )     25,383,057  
Total assets
    4,797,908       9,172,118       4,761,835               13,169,940       12,450,937       12,274,727       57,105,090  
Current and long term notes payable
    7,651,771       6,065,567       11,040,091               11,802,522       20,846,719       16,212,879        
Warrant liability
                              2,640,435       3,289,625       3,402,061       1,462,522  
Stockholders equity (deficit)
    (3,270,782 )     1,769,985       (8,338,239 )             (3,843,892 )     (19,540,777 )     (12,147,056 )     50,688,929  


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Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and the historical consolidated financial statements and related notes of our Predecessor Company included elsewhere in this prospectus. In addition to historical financial information, the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk factors.”
 
OVERVIEW
 
We are an industrial biotechnology company focused on becoming a low-cost producer of high-value biochemicals that “drop-in” and substitute for traditional petroleum-based industrial chemicals. We have developed a proprietary technology platform that we believe will enable us to manufacture a variety of drop-in chemicals and replacement chemicals for large and growing markets using a broad range of low-cost, renewable and readily available feedstocks. Our technology platform, which we have validated in our laboratories and third-party tolling facilities and commercialized with our licensee, Purac Biochem BV, or Purac, a wholly-owned subsidiary of CSM N.V., is based on a single-step anaerobic fermentation process that allows our microorganisms to grow and simultaneously produce the target product, resulting in greater productivity and yield relative to other known bioproduction processes. We believe that we can produce our target high-value chemical intermediates at an average of half the cost of traditional petrochemical intermediates at a wide range of oil and industrial sugar prices without relying on government subsidies.
 
We have entered into or intend to enter into strategic relationships with international companies to accelerate the global commercialization of our products and development of our biochemical production capabilities. For example, we signed a non-binding memorandum of understanding, or MOU, to enter into a definitive joint development agreement with Johnson Matthey PLC’s subsidiary Davy Process Technology Limited, or Davy, a developer and licensor of advanced process technologies. Under that agreement, Davy would, upon successful completion of testing and engineering using our biobased succinic acid, or biosuccinic acid, guarantee to its butanediol process licensees that they could use our biosuccinic acid in their butanediol process in place of petroleum-derived maleic anhydride without significant additional capital expenditures. We have also signed exclusive alliance agreements with ThyssenKrupp’s subsidiary Uhde GmbH, or Uhde, a chemical plant engineering company, and its U.S. subsidiary, under which Uhde will integrate our fermentation technology with its separation technology in the plant design and, on a project-by-project basis, provide process and performance guarantees for our future plants on mutually agreeable terms. In addition, we plan to leverage our partnership with PTT Chemical International Private Limited, or CH Inter, our largest stockholder and a subsidiary of PTT Chemical Public Company Limited, or PTTCH, a large Thailand-based petrochemical producer, to access CH Inter’s and PTTCH’s breadth of commercial and technical expertise and extensive knowledge and infrastructure in Asian markets.
 
Our technology platform enables us to manufacture a variety of drop-in chemicals and replacement chemicals using a broad range of renewable feedstocks. Our proprietary microorganisms can metabolize diverse sugars to create various chemical intermediates such as biosuccinic acid, lactic acid, fumaric acid and acrylic acid. We have in-licensed patent rights relating to certain core technologies from the University of Florida. Prior to our spin-off, the Predecessor Company, BioEnergy International, LLC, a Delaware limited liability company, developed a process to produce D(−) lactic acid using our technology and licensed this process, with associated patent rights, to Purac. These licenses were assigned to us as part of the restructuring described above. The D(−) lactic acid made and sold by Purac represents the first commercial product utilizing our biobased, fermentation technology.
 
We have signed contracts with three customers who have agreed to buy 100% of each of their annual requirements of succinic acid from us. We expect these three customers will consume a substantial portion, and prospectively all, of this plant’s annual production capacity, based on the customers’ current stated forecasts of their demand. We intend to enter into similar supply arrangements in connection with the planned


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expansion of our Louisiana Plant to an annual production capacity of 170 million pounds. In addition to biosuccinic acid, we plan to sell ammonium sulfate, or AMS, commonly used as a soil fertilizer, which is generated as a co-product of our process. We signed a contract with Wilson Industrial Sales Company, Inc. to sell all of the AMS produced at the Louisiana Plant during the term of the contract.
 
We estimate that the total cost to complete our Louisiana Plant will be approximately $103 million, which includes working capital, fees and expenses. We, along with the Lake Providence Port Commission and the State of Louisiana, have already invested over $13 million to prepare the plant’s site for construction. In addition, we were awarded $50 million from the U.S. Department of Energy, or the DOE, in federal cost-share funding under the American Recovery and Reinvestment Act of 2009, which will enable us to complete the Louisiana Plant. This award was made in two phases. The first phase of engineering and piloting, referred to as Budget Period 1, or BP1, was completed on December 31, 2010 and we have received the $10.4 million maximum amount allowed for BP1. The second construction phase, referred to as Budget Period 2, or BP2, with an allowable amount under the award of $39.6 million, is ongoing. Costs eligible for reimbursement in BP2 include those related to the Louisiana Plant’s construction, equipment purchases, testing and operation. As of June 30, 2011, we have received approximately $1.0 of the $39.6 million allowable for BP2. Once the Louisiana Plant is completed, we plan to make significant investments in infrastructure to accommodate the planned expansion. We intend to finance our equity contribution to the expansion of our Louisiana Plant with a combination of cash on hand and a portion of the net proceeds received from this initial public offering of our common stock. We may implement other financing plans if financially attractive options become available.
 
We may also use a portion of the net proceeds to acquire other complementary businesses, products or technologies or to make other strategic investments. Although we do not have any current plans or agreements for any specific acquisitions or investments at this time, we believe opportunities may exist from time to time to expand our current business through strategic investments or acquisitions with other companies, products or technologies.
 
The potential uses of net proceeds from this offering represent our current intentions based upon our present business plans and business conditions. As of the date of this prospectus, we cannot guarantee the specific amount of the net proceeds that will be used to develop, construct and operate our biochemical production capabilities globally, fund working capital or be used for other general corporate purposes.
 
We have also signed a memorandum of understanding with China National BlueStar (Group) Co. Ltd., or BlueStar, to develop a proposal for a jointly-owned 220 million pound biosuccinic acid plant in Nanjing, China, the biosuccinic acid requirements of which would be exclusively supplied by the Company. BlueStar is currently producing BDO utilizing a process licensed from Davy.
 
We scaled up the production of our biosuccinic acid from an initial fermentation vessel of five liters to 50,000 liters from January 2008 to February 2011 at various locations. This process was completed at the tolling plant owned by Fermic, S.A. de C.V., or Fermic, in Mexico City. This scale-up of biosuccinic acid was executed in ten fold increments over prior capacity and validated assumed commercial-scale cost metrics to be cost-competitive down to $45 per barrel of oil. The Fermic tolling facility has operated under our supervision for over a year and a half and produced 24 metric tons of biosuccinic acid for us in support of our internal customer/vendor sampling and testing programs.
 
We were formed in Delaware in April 2009 as a limited liability company for the purpose of succeeding to the chemical intermediates business of our Predecessor Company. The Predecessor Company was focused on the development of proprietary biocatalysts to produce renewable fuels and biobased chemical intermediates for use by energy companies, specialty chemical companies and manufacturers of a wide range of consumer products. To differentiate the biochemical business from its renewable fuels business, the Predecessor Company underwent a restructuring in July 2009 whereby the Predecessor Company assigned to us the assets and liabilities of the chemical intermediates business while leaving the renewable fuels business, along with its related assets and liabilities, consisting principally of an investment in BioEnergy Holding LLC and debt, with the Predecessor Company. Following this assignment, our ownership interests were distributed pro rata to the Predecessor Company’s investors.


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Following our spin-off, we have focused on developing our technology to produce biosuccinic acid, lactic acid, fumaric acid and acrylic acid. We are currently building a 30 million pound biosuccinic acid plant in Lake Providence, Louisiana, or the Louisiana Plant, which we expect will begin commercial operations during the first quarter of 2013. We intend to expand the annual production capacity of this plant to approximately 170 million pounds by the end of the first quarter of 2014.
 
We are a development stage company. To date, we have generated minimal revenues and no product sales. We and the Predecessor Company have incurred losses since our inception, including losses of $10.5 million in 2008, $17.2 million in 2009 and $16.2 million in 2010, as well as a loss of $26.1 million for the six months ended June 30, 2011. As of that date, we had an accumulated deficit of $26.1 million which reflects our conversion to a subchapter C corporation in January 2011. Our cumulative losses (including those of our Predecessor Company) total $81.0 million. We expect most of our expenditures over the next 24 months will go towards constructing and expanding the Louisiana Plant and designing and planning additional manufacturing facilities. We do not expect to record meaningful product revenue until the Louisiana Plant becomes operational, which we project will occur in the first quarter of 2013. We expect to incur losses and negative cash flow from operating activities for the foreseeable future.
 
The financial statements and data included in this prospectus represent the financial position and results of operations:
 
  •  of the Predecessor Company for 2008 and 2009 (through July 15, the effective date of the restructuring); and
 
  •  of Myriant for the remainder of 2009 and thereafter.
 
Since our spin-off from the Predecessor Company, we have committed substantial resources to the development of our biobased fermentation technology, including the construction of our Louisiana Plant, and expect our operations to diverge substantially from those of the Predecessor Company in the future. As such, the historical results of operations set forth in this prospectus do not necessarily provide a reliable basis against which our future performance can be measured.
 
OPERATING RESULTS DISCUSSION
 
As described above, our historical results of operations are not representative of our expected future financial results. Set forth below is a description of our principal items of historical revenues and expenses as well as a description of factors we expect to be important to our future financial position and results of operations. Please refer to “Special note regarding forward-looking statements” for cautionary information relating to the forward-looking statements included in the discussion below.
 
Revenues and Operating Expenses
 
Revenues
 
The historical revenues we report in this prospectus were derived from the following sources:
 
  •  License fee revenue represents royalty payments received from Purac under our license agreement. We licensed to Purac the right to make and sell D(−) lactic acid using our technology in return for royalties based on product sales. We have recognized only limited revenues from this source and do not expect it to be a source of significant future revenues.
 
  •  Management and development fee revenue — related party represents payments made to us for consulting and management services we provided to the owners of a biofuel production facility owned by affiliated entities located in Clearfield County, Pennsylvania. We terminated this agreement in January 2011 and will not receive additional revenues from this arrangement.
 
  •  Government awards represent payments under our award from the DOE. Through December 31, 2010, payments received under the award were recognized as revenues in the period during which the related costs were incurred. Following the completion of Budget Period 1 in December 2010, payments made


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  under this award will no longer be recognized as revenue but rather will be capitalized as construction in progress.
 
We expect that, once we begin commercial production, our revenues will be largely derived from product sales of biosuccinic acid and, to a lesser extent, ammonium sulfate. Product sales will be largely dependent on:
 
  •  Demand — Demand will vary not only with market acceptance of our product but also the fluctuating need for the consumer, industrial and other end-market products that biosuccinic acid is used to manufacture.
 
  •  Pricing — We intend to be price competitive in the sale of biosuccinic acid. The extent to which we can maintain pricing will have a direct impact on our revenue. Also, pricing for biosuccinic acid is subject to fluctuations in the manufacturing cost, or purchase price for, biosuccinic acid in the market generally.
 
  •  Capacity — Assuming sufficient demand for our product, our revenues will depend on the throughput capacity of our manufacturing facility. Capacity will depend on a variety of factors, including the efficiency of our biobased production process and the operational start-up of our production facilities. We do not expect feedstock availability to constrain capacity.
 
  •  Ammonium sulfate sales — AMS, commonly used as soil fertilizer, is a co-product of our biosuccinic acid production process. We expect to sell all of the AMS we generate and have entered into a contract with Wilson Industrial Sales Company, Inc. to supply it with all of the liquid ammonium sulfate produced at the Louisiana Plant.
 
Cost of goods sold
 
To date, the cost of license fee revenue has been our sole cost of goods sold and represents royalty and other amounts paid to the University of Florida, or the University, under our license agreement with it. We are obligated to pay the University royalties on product sales at a rate that declines with increasing volume. We are also obligated to share with the University any license fees we receive from sublicensing the relevant patent rights. We do not expect these payments to represent a substantial cost to us.
 
Upon completion of our Louisiana Plant, our cost of goods sold will depend principally on:
 
  •  Fermentation efficiency — Yields and productivity will not be known with certainty until our Louisiana Plant is fully operational. Based on our experience to date, we believe that our fermentation technology will result in attractive product yields. We likely will engage in continuous refinement of the fermentation process once operating at commercial scale to achieve the highest possible yield and productivity. As a product of biological processes and chemical separation and purification, yields and productivity will likely fluctuate, resulting in period-to-period fluctuations of costs of goods sold.
 
  •  Plant operations — Beyond the product yield from our fermentation technology, there are numerous processes, including product separation and purification and deriving sugars from available feedstocks, that can significantly affect overall operational efficiency.
 
  •  Cost of feedstock — After completing start-up and operational trials on sorghum-based sugars at the Louisiana Plant, we will transition to widely available, low-cost industrial sugars such as 95 Dextrose. This carbon source is derived from corn not sold for human consumption. Its cost and availability are tied to factors we cannot control, such as the weather in crop-producing areas, trends in the commodities markets and government policies. We believe that, as a whole, 95 Dextrose represents a more dependable and less cost-volatile feedstock than that used in other biobased production facilities. Nevertheless, fluctuations in our acquisition costs of feedstock could have a significant impact on our cost of goods sold. We anticipate our purchase volumes will not have a significant impact on the market price of 95 Dextrose. In addition, we believe there is an ample market supply of 95 Dextrose to supply our commercial operations.


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Gross Margin
 
Our gross margins will depend principally on the factors described above. While our operations will have a significant fixed-cost component, we do not expect that under-utilization of our manufacturing facilities will be a principal driver of our gross margins, since we are designing our manufacturing facilities to run at full capacity based on customer demand. For example, we currently have signed agreements with customers that, based on their current stated forecasts, would consume a substantial portion, and prospectively all, of our expected capacity of the Louisiana Plant’s initial 30 million pound annual production capacity.
 
Research and Development Expenses
 
Research and development expenses represent costs incurred for internal projects. These costs include salaries and other personnel-related expenses, travel costs, facility costs, piloting costs, supplies and depreciation of laboratory equipment, as well as research consultants and the cost of funding research at universities and other research institutions. These costs are expensed as incurred. Costs to acquire technologies that are utilized in research and development and that have no alternative future use are expensed when incurred.
 
Sales and Marketing
 
We do not currently record a material amount of sales and marketing expense. We expect that these costs will grow significantly in conjunction with future revenue growth.
 
General and Administrative Expenses
 
General and administrative expenses represent personnel-related costs, travel costs, consulting, marketing and professional fees, depreciation and occupancy-related costs not associated with our research and development facility. After completion of this offering, we anticipate incurring a significant increase in general and administrative expenses as we incur additional compliance costs as a public company. These increases will likely include increased costs for insurance, costs related to the hiring of additional personnel and payments to consultants, lawyers and accountants. We also expect to incur significant costs to comply with corporate governance, internal controls and similar requirements applicable to public companies.
 
Results of Operations
 
The following table sets forth consolidated results of operations for us and the Predecessor Company for the periods shown. Our inception date is July 16, 2009. The 2008 results of operations set forth in this prospectus reflect the results of the Predecessor Company. The 2009 results reflect the Predecessor Company’s results for the period from January 1, 2009 through July 15, 2009, which we refer to as the 2009 Predecessor Period, and our results from July 16 (inception) through year end, which we refer to as the 2009 Successor Period.
 
Our operations and those of the Predecessor Company were substantially the same, as all assets and liabilities were contributed from the Predecessor Company to us with the exception of certain of the Predecessor Company’s debt and the Predecessor Company’s investment in BioEnergy Holding LLC, as described above. The most notable changes that resulted from the transfer of the chemical intermediates business from the Predecessor Company to us are set forth below:
 
  •  The Predecessor Company’s investment in BioEnergy Holding LLC was not transferred to us. This did not have significant financial impact as there were no earnings or invested capital in the investment.
 
  •  The Predecessor Company’s note payable to BioEnergy Holding LLC, in the amount of $10.0 million with interest at 6%, was not transferred to us.
 
  •  The Predecessor Company’s warrant liability of approximately $1.5 million was not transferred to us.
 
Based on our analysis, we concluded that (i) the results of the Predecessor Company’s operations for the year ended December 31, 2008 were comparable to the combined results of the operations for the 2009 Predecessor Period and the 2009 Successor Period, and (ii) the combined results of operations for the 2009


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Predecessor Period and the 2009 Successor Period were comparable with our operations for the year ended December 31, 2010.
 
For the reasons stated under “Overview — Operating Results Discussion,” our historical results of operations are not representative of our expected future operating results.
 
                                                 
    Predecessor Company     Myriant Corporation  
    Fiscal Year
    Period from
    Period from
    Fiscal Year
    Six Months Ended
 
    Ended
    January 1, 2009
    July 16, 2009 (Inception)
    Ended
    June 30,  
    December 31, 2008     to July 15, 2009     to December 31, 2009     December 31, 2010     2010     2011  
                            (Unaudited)     (Unaudited)  
 
Revenues:
                                               
License fee revenue
  $ 344,860     $ 71,833     $ 221,711     $ 258,241     $ 13,297     $ 20,997  
Management fee revenue-related party
    262,212       267,318             3,557,574       1,575,166       2,519  
Development fee revenue-related party
    3,125,714                                
Government awards
                      10,419,043       5,499,039        
                                                 
Total revenues
    3,732,786       339,151       221,711       14,234,858       7,087,502       23,516  
                                                 
Operating expenses:
                                               
Cost of license fee revenue
    110,020       22,373       73,859       84,600       3,148       6,999  
Research and development
    4,679,935       3,770,721       2,793,085       15,904,717       8,029,832       4,224,776  
Project development
    2,179,965                                
General and administrative expense
    5,699,186       5,438,073       4,979,186       12,673,247       5,681,186       7,827,370  
                                                 
Total operating expenses
    12,669,106       9,231,167       7,846,130       28,662,564       13,714,166       12,059,145  
                                                 
Operating loss
    (8,936,320 )     (8,892,016 )     (7,624,419 )     (14,427,706 )     (6,626,664 )     (12,035,629 )
Other income (expense), net:
                                               
Interest income
    60,222       5,385       8,051       87,611       85,985       18,316  
Interest expense
    (1,636,062 )     (1,352,767 )     (915,804 )     (4,470,478 )     (1,304,264 )     (12,606,762 )
Miscellaneous income
                                  5,437  
Gain (loss) on foreign currency exchange
          (21,721 )           (5,235 )     (3,853 )     7,759  
Change in fair value of warrant liability
          2,092,643       (515,108 )     2,592,979       (660,521 )     (1,459,220 )
                                                 
Other income (expense), net
    (1,575,840 )     723,540       (1,422,861 )     (1,795,123 )     (1,882,653 )     (14,034,470 )
Net loss
    (10,512,160 )     (8,168,476 )     (9,047,280 )     (16,222,829 )     (8,509,317 )     (26,070,099 )
Dividend on Class A common stock
                                  (2,222,466 )
                                                 
Net loss attributable to common stockholders
  $ (10,512,160 )   $ (8,168,476 )   $ (9,047,280 )   $ (16,222,829 )   $ (8,509,317 )   $ (28,292,565 )
                                                 
Net loss per unit/share attributable to common stockholders-basic and diluted
  $ (2.14 )   $ (1.55 )   $ (1.30 )   $ (2.31 )   $ (1.22 )   $ (3.30 )
Weighted average number of units outstanding — basic and diluted
    4,918,668       5,285,807       6,953,079       7,009,251       6,993,252       8,582,456  


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Comparison of six months ended June 30, 2010 and 2011
 
The following table shows the amounts of the listed items from our consolidated statements of operations for the periods presented, showing period-over-period changes:
 
                         
    Six Months Ended
       
    June 30,     Increase
 
    2010     2011     (Decrease)  
 
Revenues:
                       
License fee revenue
  $ 13,297     $ 20,997     $ 7,700  
Management fee revenue-related party
    1,575,166       2,519       (1,572,647 )
Government awards
    5,499,039             (5,499,039 )
                         
Total revenues
    7,087,502       23,516       (7,063,986 )
                         
Operating expenses:
                       
Cost of license fee revenue
    3,148       6,999       3,851  
Research and development
    8,029,832       4,224,776       (3,805,056 )
General and administrative expense
    5,681,186       7,827,370       2,146,184  
                         
Total operating expenses
    13,714,166       12,059,145       (1,655,021 )
                         
Operating loss
    (6,626,664 )     (12,035,629 )     (5,408,965 )
                         
Other income (expense), net:
                       
Interest income
    85,985       18,316       (67,669 )
Interest expense
    (1,304,264 )     (12,606,762 )     (11,302,498 )
Miscellaneous income
          5,437       5,437  
Gain (loss) on foreign currency exchange
    (3,853 )     7,759       11,612  
Change in fair value of warrant liability
    (660,521 )     (1,459,220 )     (798,699 )
                         
Other income (expense), net
    (1,882,653 )     (14,034,470 )     (12,151,817 )
                         
Net loss
  $ (8,509,317 )   $ (26,070,099 )   $ (17,560,782 )
                         
 
Total Revenues:  Total revenues declined to $24,000 for the six months ended June 30, 2011 from $7.1 million for the prior-year period. Management fee revenue-related party declined to $3,000 for the six months ended June 30, 2011 from $1.6 million for the prior-year period as we terminated our management agreement with a related party in January 2011. Government award revenue declined to $0 for the six months ended June 30, 2011 from $5.5 million for the prior-year period. Prior to entering into the construction phase of the Louisiana Plant, all receipts under the DOE award were recorded as revenue and the corresponding expenditures were recorded as expense in accordance with our policy. In February 2011, we entered into the construction phase of the project, and as a result, all future costs and related reimbursements under the award will be capitalized as construction in progress.
 
Research and development:  Research and development expense declined to $4.2 million for the six months ended June 30, 2011 from $8.0 million during the prior-year period. This decline was driven by lower engineering and piloting costs associated with the Fermic tolling facility.
 
General and administrative:  General and administrative expenses increased to $7.8 million for the six months ended June 30, 2011 from $5.7 million during the prior-year period. This increase related principally to $1.6 million in stock-based compensation expense incurred as a result of the institution of our 2011 Omnibus Incentive Plan.
 
Other income (expense), net:  Interest expense increased to $12.6 million for the six months ended June 30, 2011 from $1.3 million during the prior-year period. The conversion of senior convertible notes into equity in January 2011 resulted in a charge to interest expense to fully amortize the remaining value ascribed to the warrants issued as well as an interest charge associated with the beneficial conversion feature of the notes. The


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change in the fair value of the warrant liability increased to $1.5 million for the six months ended June 30, 2011 from $660,000 during the prior year period. This reflected an increase in the fair value of our stock.
 
Comparison of the 2009 Predecessor Period combined with the 2009 Successor Period, with the year ended December 31, 2010
 
The financial results for the year ended December 31, 2009 described below reflect the combined results of the 2009 Predecessor Period and the 2009 Successor Period, which, as discussed under the heading “Selected historical financial data” above, we believe is a comparable presentation to our financial results for the year ended December 31, 2010.
 
                                         
    Predecessor     Myriant     Combined     Myriant        
    January 1, 2009
                         
    through
    July 16, 2009
    Year Ended
    Year Ended
       
    July 15,
    through
    December 31,
    December 31,
    Increase
 
    2009     December 31, 2009     2009     2010     (Decrease)  
 
Revenues:
                                       
License fee revenue
  $ 71,833     $ 221,711     $ 293,544     $ 258,241     $ (35,303 )
Management fee revenue-related party
    267,318             267,318       3,557,574       3,290,256  
Government awards
                      10,419,043       10,419,043  
                                         
Total revenues
    339,151       221,711       560,862       14,234,858       13,673,996  
                                         
Operating expenses:
                                       
Cost of license fee revenue
    22,373       73,859       96,232       84,600       (11,632 )
Research and development
    3,770,721       2,793,085       6,563,806       15,904,717       9,340,911  
General and administrative expense
    5,438,073       4,979,186       10,417,259       12,673,247       2,255,988  
                                         
Total operating expenses
    9,231,167       7,846,130       17,077,297       28,662,564       11,585,267  
                                         
Operating loss
    (8,892,016 )     (7,624,419 )     (16,516,435 )     (14,427,706 )     2,088,729  
                                         
Other income (expense), net:
                                       
Interest income
    5,385       8,051       13,436       87,611       74,175  
Interest expense
    (1,352,767 )     (915,804 )     (2,268,571 )     (4,470,478 )     (2,201,907 )
Gain (loss) on foreign currency exchange
    (21,721 )           (21,721 )     (5,235 )     16,486  
Changes in fair value of warrant liability
    2,092,643       (515,108 )     1,577,535       2,592,979       1,015,444  
                                         
Other income (expense), net
    723,540       (1,422,861 )     (699,321 )     (1,795,123 )     (1,095,802 )
                                         
Net loss
  $ (8,168,476 )   $ (9,047,280 )   $ (17,215,756 )   $ (16,222,829 )   $ 992,927  
                                         
 
Revenues:  Revenues increased to $14.2 million for the year ended December 31, 2010 from $561,000 for the prior year. This increase was driven by an increase in management fees of $3.3 million reflecting the start up of operations at BioEnergy Holding’s biofuels facility and receipt of funds under the DOE award. Under the terms of the award, the initial stage consisted of engineering and product development efforts designed to prove the feasibility of our technology. Because these efforts consisted principally of determining technological feasibility and piloting the technology, all costs and related award receipts were recorded in the statement of operations as expenses and award revenue, respectively. Award receipts amounting to $10.4 million were recorded as revenue during 2010. We also recognized a slight decrease in license fee revenue attributable to exchange rate fluctuations as the contract is denominated in Euros.


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Cost of license fee revenue:  Cost of license fee revenue decreased to $85,000 for the year ended December 31, 2010 from $96,000 in the prior year. This decrease related to lower license fee revenue recorded in 2010, as the cost represents a royalty payment to the University of Florida based on a percentage of revenues achieved.
 
Research and development:  Research and development expense increased to $15.9 million for the year ended December 31, 2010 from $6.6 million in the prior year. This increase was primarily driven by increases in engineering costs of $7.0 million and laboratory costs of $1.6 million related to piloting activities associated with our biosuccinic acid.
 
General and administrative expense:  General and administrative expenses increased to $12.7 million for the year ended December 31, 2010 from $10.4 million in the prior year. This increase was primarily driven by increases in personnel-related costs of $1.0 million, bad debt expense of $546,000 and travel costs of $463,000. The personnel and travel costs reflected higher headcount in 2010. The increase in bad debt expense resulted from the establishment of a bad debt reserve on an amount advanced to a related party of the Predecessor Company in conjunction with the termination of our management agreement with that related party.
 
Other income (expense), net:  Our interest expense increased to $4.5 million for the year ended December 31, 2010 from $2.3 million in the prior year, which reflected an increase in the balance of our senior convertible notes during 2010. We recognized a gain associated with our warrant liability of $2.6 million for 2010, which was an increase of $1.0 million over the prior year. This reflected a decrease in the fair value of our warrants from 2009.
 
Comparison of year ended December 31, 2008 to the 2009 Predecessor Period combined with the 2009 Successor Period
 
The 2008 results reflect the results of the Predecessor Company for the year ended December 31, 2008. The financial results for the year ended December 31, 2009 reflect the 2009 Predecessor Period combined with the 2009 Successor Period.
 
                                         
                Myriant              
                Period from
             
    Predecessor     July 16, 2009
    Combined        
          January 1, 2009
    (Inception)
             
    Year Ended
    through
    through
    Year Ended
       
    December 31,
    July 15,
    December 31,
    December 31,
    Increase
 
    2008     2009     2009     2009     (Decrease)  
 
Revenues:
                                       
License fee revenue
  $ 344,860     $ 71,833     $ 221,711     $ 293,544     $ (51,316 )
Management fee revenue-related party
    262,212       267,318             267,318       5,106  
Development fee revenue
    3,125,714                         (3,125,714 )
                                         
Total revenues
    3,732,786       339,151       221,711       560,862       (3,171,924 )
                                         
Operating expenses:
                                       
Cost of license fee revenue
    110,020       22,373       73,859       96,232       (13,788 )
Research and development
    4,679,935       3,770,721       2,793,085       6,563,806       1,883,871  
Project development
    2,179,965                         (2,179,965 )
General and administrative expense
    5,699,186       5,438,073       4,979,186       10,417,259       4,718,073  
                                         
Total operating expenses
    12,669,106       9,231,167       7,846,130       17,077,297       4,408,191  
                                         
Operating loss
    (8,936,320 )     (8,892,016 )     (7,624,419 )     (16,516,435 )     (7,580,115 )
                                         


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                Myriant              
                Period from
             
    Predecessor     July 16, 2009
    Combined        
          January 1, 2009
    (Inception)
             
    Year Ended
    through
    through
    Year Ended
       
    December 31,
    July 15,
    December 31,
    December 31,
    Increase
 
    2008     2009     2009     2009     (Decrease)  
 
Other income (expense), net:
                                       
Interest income
    60,222       5,385       8,051       13,436       (46,786 )
Interest expense
    (1,636,062 )     (1,352,767 )     (915,804 )     (2,268,571 )     (632,509 )
Gain (loss) on foreign currency exchange
          (21,721 )           (21,721 )     (21,721 )
Changes in fair value of warrant liability
          2,092,643       (515,108 )     1,577,535       1,577,535  
                                         
Other income (expense), net
    (1,575,840 )     723,540       (1,422,861 )     (699,321 )     876,519  
                                         
Net loss
  $ (10,512,160 )   $ (8,168,476 )   $ (9,047,280 )   $ (17,215,756 )   $ (6,703,596 )
                                         
 
Revenues:  Revenues decreased to $561,000 for the year ended December 31, 2009 from $3.7 million for the prior year. The decline was principally due to the decline in development fee revenue. In 2008, the Predecessor Company received fees in conjunction with services provided to a related party in closing a financing transaction to construct a biofuels facility. We performed no such services in 2009 nor do we anticipate any such revenue in the future.
 
Cost of license fee revenue:  Cost of license fee revenue decreased to $96,000 for the year ended December 31, 2009 from $110,000 in the prior year. This decrease related to decreased license fee revenue recorded in 2009, as the cost represents a royalty payment to the University of Florida based on a percentage of revenues achieved.
 
Research and development:  Research and development expense increased to $6.6 million for the year ended December 31, 2009 from $4.7 million during the prior year. This increase was primarily driven by increases in personnel-related costs of $1.3 million, laboratory and engineering costs of $347,000 and depreciation expense of $252,000. The increase in personnel and laboratory and engineering costs reflected higher headcount as we expanded our research and development department. The increase in depreciation expense reflected a full year of depreciation in 2009 on equipment purchased throughout the year in 2008.
 
Project development:  Project development expenses declined to $0 for the year ended December 31, 2009 from $2.2 million in the prior year. These expenses included engineering and personnel costs associated with the development of a biofuels facility for a related party in 2008. No such activity occurred in 2009.
 
General and administrative:  General and administrative expenses increased to $10.4 million for the year ended December 31, 2009 from $5.7 million in the prior year. This was primarily driven by increases in personnel-related costs of $2.3 million, legal and professional fees of $1.0 million and stock-based compensation of $487,000. The increase in personnel-related costs reflected higher headcount as we expanded our operations. Legal and professional fees increased as we were involved with various contract negotiations throughout 2009.
 
Other income and expense, net:  Interest expense increased to $2.3 million for the year ended December 31, 2009 from $1.6 million in the prior year, which reflected an increase in the balance of our senior convertible notes during 2009. We recognized a gain on warrant liability of $1.6 million for 2009 in conjunction with changes in the fair value of warrants classified as a liability on our balance sheet.
 
Liquidity and Capital Resources
 
From July 16, 2009 (inception) through December 31, 2010, we funded our operations primarily through $13.7 million from the sale of senior convertible notes, $10.4 million from the DOE award, $480,000 from license fees and $3.6 million from management fees. In January 2011, we completed a $60 million equity

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financing with CH Inter, a wholly-owned subsidiary of PTTCH, which resulted in net proceeds of $57.1 million. To date, we have not generated any revenues from the sale of biosuccinic acid. As of June 30, 2011, our cash and cash equivalents totaled $42.6 million, of which $15.6 million was, in accordance with the terms of our DOE award, restricted as a reserve to cover any contingencies that arise in connection with construction of our Louisiana Plant.
 
We currently intend to use all or a portion of the net proceeds of this offering, together with $38.6 million of remaining proceeds from a government award, $10 million in infrastructure improvements to be undertaken by the Lake Providence Port Commission and the State of Louisiana and $42.6 million of existing cash and cash equivalents, to complete the Louisiana Plant (approximately $103 million, which includes working capital, fees and expenses), to fund our expected equity contribution to the expansion of the Louisiana Plant to 170 million pounds per year (estimated at $60 million, which includes working capital, fees and expenses), to pay the dividend accruing on the Class A common stock (which totaled $2,222,466 as of June 30, 2011) and to fund working capital, research and development expenses and other general corporate purposes, which will include expenses and the costs associated with being a public company.
 
We may also use a portion of the net proceeds to acquire other complementary businesses, products or technologies or to make other strategic investments. Although we do not have any current plans or agreements for any specific acquisitions or investments at this time, we believe opportunities may exist from time to time to expand our current business through strategic investments or acquisitions with other companies, products or technologies.
 
Based on our current operating plan, we believe that the anticipated net proceeds from this offering, together with the remaining DOE award funds and our existing cash and cash equivalents, will provide adequate funds for ongoing operations, planned capital expenditures and working capital requirements for at least the next 24 months. Successful completion of our research and development program and, ultimately, the attainment of profitable operations are dependent upon future events, including completion of our development activities resulting in commercial products and technology, obtaining financing to complete our development activities, obtaining financing to construct production facilities, market acceptance and demand for our products and services and attracting and retaining qualified personnel.
 
The following table sets forth the major sources and uses of cash for each of the periods set forth below. The 2008 results reflect the results of the Predecessor Company for the year ended December 31, 2008. The 2009 results reflect the combined results of the Successor Company and the Predecessor Company for the year ended December 31, 2009.
 
                                                 
    Predecessor Company   Myriant   Combined   Myriant
            Period from
           
        Period from
  July 16, 2009
  Year
      Six Months
    Year Ended
  January 1, 2009
  (Inception) to
  Ended
  Year Ended
  Ended
    December 31,
  to July 15,
  December 31,
  December 31,
  December 31,
  June 30,
    2008   2009   2009   2009   2010   2011
 
Net cash used in operating activities
  $ (7,006,013 )   $ (8,236,413 )   $ (6,330,465 )   $ (14,566,878 )   $ (9,034,096 )   $ (15,021,224 )
Net cash provided by (used in) investing activities
  $ (3,004,285 )   $ (2,910,589 )   $ 2,199,920     $ (710,669 )   $ (373,170 )   $ (15,753,030 )
Net cash provided by financing activities
  $ 3,283,054     $ 10,845,519     $ 5,175,367     $ 16,020,886     $ 8,926,591     $ 57,188,617  
 
Operating activities
 
Our primary uses for cash from operating activities are personnel-related expenses, research and development-related expenses, including costs associated with piloting our technology, and engineering and permitting costs associated with our Louisiana Plant.
 
Cash used in operating activities of $15.0 million during the six months ended June 30, 2011 reflected our net loss of $26.1 million offset by non-cash charges totaling $16.3 million and changes in operating assets and liabilities of $(5.2 million). Non-cash charges included non-cash interest expense and amortization of debt discounts of $12.6 million, stock based compensation of $1.8 million, depreciation and amortization of


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$473,000 and a loss from the change in the fair value of warrant liabilities of $1.5 million. The net use of cash from our operating assets and liabilities of $5.2 million primarily reflected the payment of engineering invoices that had been accrued at year end.
 
Cash used in operating activities of $9.0 million in 2010 reflected our net loss of $16.2 million offset in part by non-cash charges totaling $3.3 million and changes in operating assets and liabilities of $3.8 million. Non-cash charges included non-cash interest expense and amortization of debt discounts of $4.4 million, gain from change in fair value of warrant liabilities of $2.6 million, depreciation and amortization of $1.0 million and stock-based compensation of $526,000. The net source of cash from our operating assets and liabilities of $3.8 million primarily reflected accrued engineering costs that were payable in 2011.
 
Cash used in operating activities of $14.6 million in 2009 reflected our net loss of $17.2 million offset in part by non-cash charges totaling $2.0 million and changes in operating assets and liabilities of $651,000. Non-cash charges included non-cash interest expense and amortization of debt discounts of $2.2 million, change in fair value of warrant liabilities of $(1.6 million), depreciation of $841,000 and stock-based compensation of $488,000. The net source of cash from our operating assets and liabilities of $651,000 primarily reflected increases in accrued liabilities.
 
Cash used in operating activities of $7.0 million in 2008 reflected our net loss of $10.5 million offset in part by non-cash charges totaling $2.1 million and changes in our operating assets and liabilities of $1.4 million. Non-cash charges included non-cash interest expense and amortization of the value ascribed to the warrants of $1.6 million and depreciation of $478,000. The net source of cash from our operating assets and liabilities of $1.4 million primarily reflected growth in accounts payable and accrued liabilities due to the growth of the business.
 
Investing activities
 
Our investing activities consist primarily of capital expenditures.
 
During the six months ended June 30, 2011, cash used in investing activities included $15.2 million in restricted cash associated with the construction of our Louisiana Plant and $2.8 million for capital expenditures net of government award receipts of $2.3 million.
 
In 2010, cash used in investing activities was primarily related to $422,000 of capital expenditures.
 
In 2009, cash used in investing activities was primarily related to $633,000 of capital expenditures, along with $107,000 in deposits associated with facility leases.
 
In 2008, cash used in investing activities was primarily related to $3.0 million of capital expenditures which was principally associated with the expansion of our laboratory.
 
Financing activities
 
During the six months ended June 30, 2011, cash provided by financing activities was $57.2 million, primarily due to the net proceeds of $57.1 million from our sale of equity to CH Inter, a strategic investor.
 
In 2010, cash provided by financing activities was $8.9 million, primarily due to net proceeds of $9.7 million from the issuance of senior convertible notes offset by repayment of a $1.7 million note payable.
 
In 2009, cash provided by financing activities was $16.0 million, primarily due to $9.5 million in proceeds from the exercise of warrants, $5.8 million in proceeds from the issuance of senior convertible notes and the receipt of a note payable in the amount of $1.7 million.
 
In 2008, cash provided by financing activities was $3.3 million, primarily due to proceeds of $3.8 million from the issuance of senior convertible notes.


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Contractual Obligations and Commitments
 
The following summarizes the future commitments arising from our contractual obligations at December 31, 2010:
 
                                         
          Less Than
                More Than
 
    Total     1-Year     1-3 Years     3-5 Years     5 Years  
 
Debt
  $ 0     $ 0     $ 0     $ 0     $ 0  
Capital Lease Obligations
    0       0       0       0       0  
Operating Lease Obligations
    2,265,770       1,048,827       1,207,897       9,046       0  
Purchase Obligations
    0       0       0       0       0  
Other Long-Term Liabilities
    0       0       0       0       0  
                                         
Total
  $ 2,265,770     $ 1,048,827     $ 1,207,897     $ 9,046     $ 0  
                                         
 
Off-Balance Sheet Arrangements
 
We did not have during the periods presented, and we do not currently have any relationships with unconsolidated entities, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
 
The Predecessor Company holds an investment in BioEnergy Holding, a variable interest entity, or VIE. At December 31, 2009 and 2008, management determined that the Predecessor Company was not the primary beneficiary of the VIE and, as such, concluded that they were not required to consolidate BioEnergy Holding. For investments that are not required to be consolidated, the Predecessor Company followed the equity method of accounting. As there were no earnings or invested capital in the investment, there were no amounts recorded with respect to this investment in 2008 and 2009.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Interest rate risk
 
We had unrestricted cash and cash equivalents totaling $1.0 million, $564,000 and $27.0 million at December 31, 2009, December 31, 2010 and June 30, 2011, respectively. These amounts were invested primarily in demand deposit savings accounts and are held for working capital purposes. The primary objective of our investment activities is to preserve our capital for the purpose of funding our operations. We do not enter into investments for trading or speculative purposes. We believe that we do not have material exposure to changes in fair value as a result of changes in interest rates. Declines in interest rates, however, will reduce future investment income.
 
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 
Our consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, or the U.S., and include our accounts and the accounts of our wholly-owned subsidiaries, Myriant LP LLC and Myriant Lake Providence, Inc. The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the applicable periods. Management bases its estimates, assumptions and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our consolidated financial statements, which, in turn, could change the results from those reported. Our management evaluates its estimates, assumptions and judgments on an ongoing basis.
 
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included in this prospectus, we believe that the following accounting policies are the most critical


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to aid you in fully understanding and evaluating our reported financial results and reflect the more significant judgments and estimates that we use in the preparation of our consolidated financial statements.
 
Stock-based compensation
 
We have adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. Compensation costs related to all equity instruments are recognized at the grant date fair value of the awards.
 
Prior to 2011, Myriant was organized as a limited liability company. In certain instances, employees and non-employee advisors were granted membership units with vesting provisions. In those instances, management estimated the fair value of the award and recognized compensation expense over the vesting period on a straight-line basis.
 
Membership unit and common stock valuations
 
In the absence of a public trading market, we determined a reasonable estimate of the then current fair value of our common stock for purposes of granting stock-based compensation based on multiple criteria. We determined the fair value of our common stock utilizing methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Practice Aid, “Valuation of Privately-Held-Company Equity Securities Issued as Compensation” (AICPA Practice Aid). In addition, we exercised judgment in evaluating and assessing the foregoing based on several factors including:
 
  •  the nature and history of our business;
 
  •  our historical operating and financial results;
 
  •  the market value of companies that are engaged in a similar business to ours;
 
  •  the lack of marketability of our common stock;
 
  •  the price at which shares of our membership units have been sold;
 
  •  our progress in developing our technology;
 
  •  our progress towards producing biosuccinic acid at commercial scale at the Louisiana Plant;
 
  •  the risks associated with transferring our biosuccinic acid production technology to full commercial scale;
 
  •  the overall inherent risks associated with our business at the time stock option grants and restricted shares were approved; and
 
  •  the overall equity market conditions and general economic trends.
 
We considered the factors outlined above, as well as the results of an independent outside valuations performed as of January 14, 2011 and May 4, 2011. We used an option-pricing method, as well as other factors outlined above, to estimate the fair value of our membership units and common stock as follows:
 
     
    Fair Value
Valuation Date
  per Unit
 
December 31, 2008
  $10.00
July 15, 2009
  $8.48
December 31, 2009
  $6.00
January 14, 2011
  $3.45-$5.35
May 4, 2011
  $19.36
 
In January 2009, we completed a valuation to estimate the fair market value of the membership units of our Predecessor Company as of December 31, 2008. To determine our estimated enterprise value, we applied an income-based approach and a market based approach based upon negotiations with potential investors at that point in time. This valuation included the estimated value of the Predecessor Company’s investment in


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BioEnergy Holding LLC. Using a 30% discount for the lack of marketability of our membership units, we estimated a fair market value at December 31, 2008 of $10.00 per unit. This value was supported by existing investors exercising warrants at $10.00 per unit during that period of time. We used this fair market value per unit for units granted between December 1, 2008 and July 15, 2009.
 
In July 2009, we separated from the Predecessor Company. The principal asset that was not transferred to us was the Predecessor Company’s investment in BioEnergy Holding LLC. At July 15, 2009, we estimated the value of the Predecessor Company’s investment in BioEnergy Holding LLC by discounting the estimated future cash flows of BioEnergy Holding LLC using a discount rate of 15%. This discount rate was lower than the rate applied to Myriant as the cash flows associated with the biofuels facility were supported by an offtake agreement and were more predictable in nature. This investment was estimated to have a $1.52 per unit value. Accordingly, the value of the units associated with our business was estimated at $8.48 per unit. We used this fair market value per unit for units granted between July 16, 2009 and December 31, 2009.
 
In January 2010, we completed a valuation to estimate the fair market value of our membership units as of December 31, 2009 using an income based approach. To determine our estimated enterprise value, we discounted expected future cash flows by 40% which resulted in an estimated fair market value at December 31, 2009 of $6.00 per unit. We used this fair market value per unit for units granted between January 1, 2010 and October 31, 2010.
 
In January 2011, we consummated a $60 million equity financing with CH Inter, a wholly-owned subsidiary of PTTCH, which resulted in net proceeds of $57.1 million. In conjunction with this transaction, we converted from a limited liability company to a Subchapter C corporation with three classes of common stock. CH Inter purchased Class A common stock at a price of $5.35 per share. At this time, a valuation was done to estimate the fair value of our common stock as of January 14, 2011. To determine our estimated enterprise value, we applied a market-based approach based upon the investment in our Class A common stock by CH Inter. We used the option-pricing method to allocate the estimated enterprise value between the three classes of stock. Within the allocation model, we applied two liquidity event scenarios. The event scenarios were a merger or acquisition, or M&A, within 2 years and an initial public offering, or an IPO, within 1 year. The risk free rate employed was 0.29% and 0.59% for the IPO and M&A scenarios, respectively, which represented the published yield on the one- and two-year U.S. Treasury notes. Stock price volatility was estimated at 65% for both scenarios based upon an analysis of historical volatilities of public companies deemed comparable to us. We then weighted the probability of the M&A scenario at 40% and the IPO scenario at 60%. Using this method, we estimated a fair market value per common share at January 14, 2011 of $3.45. We used this fair market value per common share for the restricted shares and options granted between January 14, 2011 and April 30, 2011.
 
No single event caused the valuation of our common stock to decline from December 31, 2008 to April 2011; rather, it was a combination of factors that led to the changes in the fair value of the underlying common stock:
 
  •  The separation of our business from our Predecessor Company resulted in a reduction in value associated with the investment in BioEnergy Holding LLC which remained with the Predecessor Company.
 
  •  The estimated cash flows from our license agreement for D(−) lactic acid have not expanded as rapidly as originally anticipated.
 
  •  We completed our equity financing with a strategic investor in January 2011. The value of the company negotiated during this financing resulted in the creation of three classes of stock. The preferences afforded the Class A and Class B common shares resulted in a lower value ascribed to the common stock.
 
In May 2011, a valuation was done to estimate the fair value of our common stock as of May 4, 2011. To determine our estimated enterprise value, we applied a market-based and income-based approach. The income approach employed was a discounted cash flow analysis while the market approach involved the performance


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of a guideline public company analysis. Each of these methodologies was given equal weight in arriving at an equity value. We used the option pricing and probability weighted expected return methods, or PWERM, to allocate the estimated enterprise value among the three classes of stock. Within the allocation model, we applied two liquidity event scenarios. The event scenarios were a merger or acquisition, or M&A, within 1.5 years and an IPO within 6 months. The risk free rate employed was .07% and .30% for the IPO and M&A scenarios, respectively, which represented the Federal Reserve interpolated constant maturity Treasury Yield as of the valuation date. Stock price volatility was estimated based upon an analysis of historical volatilities of companies deemed to be comparable to us. Stock price volatility was estimated to be 45%. We then weighted the probability of the M&A scenario at 25% and the IPO scenario at 75%. We weighed the PWERM and option methods evenly. Using this methodology we estimated a fair market value per common share of $19.36. We used this fair market value per common share for the restricted shares and options granted between May 1, 2011 and June 30, 2011. The increase between the January and May valuations reflect our current discussions with the underwriters related to our public filing.
 
There is inherent uncertainty in these estimates and if we had made different assumptions than those described above, the amount of stock-based compensation expense, net loss and net loss per share could have been significantly different.
 
In conjunction with our conversion to a Subchapter C corporation, we adopted the 2011 Omnibus Incentive Plan. The following table summarizes the stock options granted from the inception of the plan through June 30, 2011 with their exercise prices, the fair value of the underlying common stock and the intrinsic value per share at the date of grant, if any:
 
                             
    Number of
  Exercise Price
  Fair
  Intrinsic
Date of Issuance
  Options   per Share   Value   Value
 
January 13, 2011
    282,737     $ 5.35     $ 3.45     $—
March 23, 2011
    433,410     $ 3.45     $ 3.45     $—
May 27, 2011
    633,250     $ 19.36     $ 19.36     $—
June 21, 2011
    348,250     $ 19.36     $ 19.36     $—
 
Common stock options granted in January 2011 had an exercise price of $5.35 per share, the same per share price realized in a sale by us of 11.2 million shares of our Class A common stock to an unrelated party in an arms-length transaction completed on January 13, 2011. By comparison to our common stock, our Class A common stock accrues dividends at the rate per annum of 8% per share compounded annually and has other preferences in the event of liquidation. The January common stock option grant exercise price was set at the Class A common stock price to ensure such exercise prices were at least at, and likely at a premium to, the common stock fair value.
 
By reference to $5.35 price of the January 2011 issuance of the Class A common stock, a fair value of the common stock as of January 14, 2011 of $3.45 per share was determined on February 25, 2011 using, consistent with the AICPA Practice Guide, the option pricing method, which involves the use of option pricing theory to allocate total company value amongst stockholders. This method treats common stock and preferred stock as options on the enterprise’s value, with common stock only having value to the extent that the net assets of the enterprise exceed the value of the liquidation preference at the time of a liquidity event. The common stock is treated as a call option with a claim on the enterprise at a strike price equal to the enterprise value that satisfies the liquidation preference of the preferred stock. With respect to our Class A common stock specifically, the Class A common stock has participating preferred rights so that in the event of our sale or merger, the holders of the Class A common stock would receive a return of their initial investment and also participate in the liquidity event as if the shares of Class A common stock were common stock. Accordingly, in the event of a sale or merger, the Class A common stock is necessarily worth more than the common stock. Upon a qualified IPO, the Class A common stock converts to common stock and thus has the same value. At the time of the January valuation, management estimated the probability of an exit in the form of a sale or merger (at least a year away) at 40% and an exit in the form of an IPO (at least one or two years away) at 60%. Based on the implied enterprise value, it was calculated that a sale or merger would yield approximately $6.74 per share for the Class A common stock while the value realized on the common stock upon such an


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event would be $2.00 per share. Applying a probability of 40% resulted in the $1.90 difference between the fair value of the common stock of $3.45 and the $5.35 price at which the Class A common stock was sold in January 2011.
 
Significant factors, assumptions and methodologies used in determining fair value
 
We have estimated the fair value of our stock option grants using the Black-Scholes option-pricing method. We calculate the estimated volatility rate based on selected comparable public companies, due to a lack of historical information regarding the volatility of our stock price. We will continue to analyze the historical stock price volatility assumption as more historical data for our common stock becomes available. Due to our limited history of grant activity, we calculate the expected life of options granted using the “simplified method” permitted by the SEC as the arithmetic average of the total contractual term of the option and its vesting period. The risk-free interest rate assumption was based on the U.S. Treasury yield curve in effect during the year of grant for instruments with a term similar to the expected life of the related option. No dividends are expected to be paid. Forfeitures have been estimated by us based upon our historical and expected forfeiture experience.
 
The fair value of stock options granted for the six months ended June 30, 2011 were estimated using the following assumptions:
 
     
    Six Months Ended
    June 30, 2011
 
Risk free interest rate
  1.83-2.41%
Expected dividend yield
  0%
Expected volatility factor
  65-79%
Expected option life (years)
  5-6
Expected forfeitures
  5%
 
Our Predecessor Company recognized stock-based compensation expense of $0 and $280,000 for the year ended December 31, 2008 and the period from January 1, 2009 to July 15, 2009, respectively, all of which was attributable to membership unit grants. This amount was recorded as general and administrative expense. We recognized a total of $208,000 in stock-based compensation expense for the period from July 16, 2009 to December 31, 2009, all of which was attributable to membership unit grants and included in general and administrative expense. We recognized $526,000 in stock-based compensation expense for 2010, all of which was attributable to membership unit grants. Of this amount, $235,000 was recorded as research and development expense and $291,000 was recorded as general and administrative expense. In the six months ended June 30, 2010 and 2011, we recognized a total of $206,000 and $1.8 million in stock-based compensation expense, respectively, of which $0 and $565,000, respectively, was attributable to employee stock options and $206,000 and $1.2 million, respectively, was attributable to membership units and restricted stock.
 
Beneficial Conversion
 
Our Class A and Class B common stock contain a conversion feature. This feature resets the conversion price in the event of a “down round.” In the event that the conversion price is reset, we would record a beneficial conversion at the time the reset occurs.
 
Our January 2011 sale of 11.2 million shares of our Class A common stock at $5.35 per share to PTTCH, then an unrelated party, for gross proceeds of approximately $60 million, or the January 2011 Equity Transaction, was the result of a broad capital raising process undertaken by us with the assistance of a financial advisor. In late 2010, we had discussions with a number of potential investors regarding a possible investment, resulting in two non-binding term sheets, one from PTTCH, and the other from an unrelated private equity firm. The valuation under the term sheet from the private equity firm was slightly higher than PTTCH’s valuation, but imposed much stricter liquidity preferences and a substantially higher dividend, making it considerably less favorable to our existing investors and resulting in an effectively lower valuation than the terms offered by PTTCH. Based on the results of our equity raising process, our board of directors


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determined that the PTTCH investment represented the highest valuation and most attractive terms available to us at the time.
 
At the time of the January 2011 Equity Transaction, we considered the potential for a beneficial conversion relating to the convertible Class A and B common stock. The conversion price of the Class A and B common stock was set at $5.35 per common stock share as part of the terms of the transaction. Based upon the common stock valuation completed in conjunction with the January 2011 Equity Transaction, we determined that the fair value of the common stock was $3.45 per share. The conversion rate at the time of the transaction was equal to the original issue price per share for Class A and B common stock, which has preferential rights over our common stock. Accordingly, no beneficial conversion was recorded.
 
PTTCH’s investment in our Class A common stock provided us with a significant cash infusion that allowed us to fulfill our financial obligations under, and therefore obtain, our matching grant from the DOE and validated our technology and future development and growth plans to potential strategic partners and customers. Since this investment, we have used our improved financial condition and enhanced market credibility to achieve important milestones, such as the following:
 
  •  Louisiana Plant:  The PTTCH investment allowed us to access the $39.6 million balance of a $50.0 million award from the DOE for the Louisiana Plant.
 
  •  Joint Venture with PTTCH:  In addition to its investment, we agreed with PTTCH to enter into an exclusive joint venture aimed at commercializing our technology in the ASEAN countries. Partnering with a company with PTTCH’s capabilities and presence in that market will substantially accelerate our time to market in Asia and reduce the execution risk associated with our planned expansion within the region.
 
  •  Piedmont Chemical Industries I, LLC:  In January 2011, we entered into a supply agreement with Piedmont Chemical Industries I, LLC to supply it with 100% of its requirements for succinic acid, with a target volume of five million pounds annually.
 
  •  Davy Memorandum of Understanding:  In February 2011, we announced our memorandum of understanding with Davy Process Technology Limited in which the parties would integrate and optimize each company’s respective processes to further reduce the costs of producing BDO applications, potentially enhancing our profitability and competitive position within the BDO market.
 
  •  Wilson Industrial Sales Company, Inc.: In April 2011, we entered into a supply agreement with Wilson Industrial Sales Company, Inc., a supplier of chemicals to manufacturers in a variety of industries, to sell it 100% of the liquid ammonium sulfate produced at the Louisiana Plant.
 
  •  China National BlueStar Memorandum of Understanding:  In May 2011, we signed a memorandum of understanding with China National BlueStar (Group) Co. Ltd., or BlueStar, to develop a proposal for a jointly-owned 220 million pound biosuccinic acid plant in Nanjing, China and to enter into an agreement to be the exclusive supplier of biosuccinic acid to BlueStar. Although non-binding, this MOU represents our first proposed agreement with a third party to build a biosuccinic acid plant at full commercial scale, and provides significant validation for our global roll-out plan, as well as for our plan to sell our biosuccinic acid to Davy BDO process licensees. Securing BlueStar as a potential customer and partner also further validates our technology and reduces the execution risk of building production capacity and selling product.
 
  •  Louisiana Plant Lease and $10 million in Infrastructure Funds:  In June 2011, we entered into a critically important lease with the Lake Providence Port Commission enabling the Port to secure $10 million in infrastructure improvements for the Louisiana Plant, and enabling us to commence construction of the Louisiana Plant.
 
  •  Uhde GmbH:  We entered into negotiations on a letter of intent with Uhde GmbH, or Uhde, for an industrial biochemical facility for the production of biosuccinic acid at the Infraleuna Chemical Site in Leuna, Germany. The plant, which we expect could commence operations in the first half of 2012, would utilize our technologies to produce biosuccinic acid and ammonium sulfate in accordance with


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  our product specifications, and accelerate Uhde’s ability to provide performance guarantees for our plants to facilitate access to project finance for future plants.
 
  •  Customer Pipeline:  Since the date of the PTTCH investment, we have added a number of customers to our pipeline. These customers are in various stages of development, ranging from initial discussion to final commercial negotiation.
 
On July 22, 2011, the underwriters proposed a price range for the offering of between $      and $      per share, which is the range set forth on the cover page of this prospectus. The top of the price range set forth on the cover page of this prospectus is $      as compared to $19.36 and $5.35, which represent, respectively, management’s determination of the estimated fair value of our common stock on May 4, 2011 and the price per share realized in a sale of the our Class A common stock to PTTCH in January 2011. The estimated fair value established on May 4, 2011 represents a discount of approximately     % from the top of the price range set forth on the cover page of this prospectus. The estimated fair value established on January 13, 2011 represents a discount of approximately      % from the top of the price range set forth on the cover page of this prospectus.
 
As is typical in IPOs, this estimated price range set forth on the cover page of this prospectus was not derived using a formal determination of fair value, but was determined based upon discussions between the underwriters and us. Of the factors considered in setting the range set forth on the cover page of this prospectus, we believe that the difference in value reflected between the top of the range and management’s determinations of the estimated fair value of our common stock on May 4, 2011 and January 13, 2011 is primarily the result of significantly increased activity and investor interest in early-stage clean technology companies like us and our increased expectations that we would complete our initial public offering in the third quarter of 2011. In addition, history has shown that it is reasonable to expect that the completion of an initial public offering will increase the value of stock as a result of the significant increase in the liquidity and enhanced ability to sell such securities, though it is not possible to measure such increase in value with precision or certainty. For example, we expect that the initial public offering of our common stock will provide funding for our operations for at least the next 24 months, enable us to fund the construction of our 30 million pound Louisiana Plant as well as our expected equity contribution to the expansion of the Louisiana Plant to 170 million pounds per year and enhance our long-term viability and market credibility. The completion of the initial public offering will also trigger the conversion of our Class A common stock to common stock, thereby eliminating the cumulative 8% dividend going forward.
 
Given that our valuation has increased since the conversion rate was set at $5.35 per common share, no reset of the conversion price has occurred and no beneficial conversion has been recorded. In the event a reset were to occur in the future, we would record a beneficial conversion at that time.
 
Estimation of fair value of warrants to purchase stock
 
In accordance with FASB ASC 815, Derivatives and Hedging, all warrants issued by us that are exercisable for common stock are accounted for as derivatives and recognized in the consolidated balance sheets as fair value of warrant liabilities at their estimated fair value. We determined that this treatment was appropriate because the common stock underlying the warrants has down-round protection. At inception, July 16, 2009, we recorded these liabilities at their fair value of $2.1 million.
 
As of December 31, 2009 and 2010, the fair value of stock warrants was estimated to be $2.6 million and $3.3 million, respectively, using the Black-Scholes option pricing model . We recorded $515,000 and $2.6 million of non-cash charges related to the change in fair value of stock warrants for the years ended December 31, 2009 and 2010, respectively, and $660,000 and $1.5 million for the six months ended June 30, 2010 and 2011, respectively. These warrant liabilities are marked to fair value from July 16, 2009 resulting in the recognition of gain or loss in our consolidated statements of operations as gain or loss from change in fair value of warrant liabilities from that date.
 
Stock warrants were initially issued by us in connection with the issuance of senior convertible debt and promissory notes. The warrants were not issued with the intent of effectively hedging any exposures to cash


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flow, market or foreign currency risks. The warrants do not qualify for hedge accounting, and as such, all future changes in the fair value of these warrants will be recognized currently in earnings until such time as the warrants are exercised, expire or are converted to common stock. The warrants do not trade in an active market, and as such, we estimated the fair value of these warrants using an option-pricing model with the following assumptions:
 
                 
    July 16, 2009   December 31, 2009   December 31, 2010   June 30, 2011
 
Risk free interest rate
  2.46%   2.69%-3.04%   0.66%   0.11%
Expected volatility
  49%-51%   49%-51%   38%   45%
Expected time to liquidity event
  5-6 years   5-6 years   1-2 years   0.5 years
 
To value our common stock warrants as of June 30, 2011, we first estimated our enterprise value and then allocated this value to the underlying classes of equity using the option-pricing method as outlined in the AICPA Practice Aid. We used the option-pricing method to calculate our overall estimated enterprise value, using a scenario analysis incorporating probabilities of future events for existing stockholders of an IPO and an M&A transaction as described previously.
 
There is inherent uncertainty in these estimates and if we had made different assumptions than those described above, the amount of our loss on change in fair value of common stock warrants, net loss and net loss per share amounts could have been significantly different.
 
The table below summarizes the common stock warrants that were issued by us and recorded as a liability as of July 16, 2009, December 31, 2009, December 31, 2010 and June 30, 2011. The warrants listed in the table below and issued in 2009 were transferred from our Predecessor Company at the time of the transaction.
 
                                                         
    Number of
                                     
    Warrant
    Number of
                               
    Shares
    Warrant
          Fair Value of
                   
    Outstanding
    Shares
          Warrants at
    Fair Value of
    Fair Value of
    Fair Value of
 
    at July 16,
    Outstanding
          July 16,
    Warrants at
    Warrants at
    Warrants at
 
    2009
    at December 31,
    Exercise
    2009
    December 31,
    December 31,
    June 30,
 
Year of Issuance
  (Inception)     2010     Price     (Inception)     2009     2010     2011  
 
2010
          17,134     $ 6.00     $     $     $ 147,487     $ 228,217  
2009
    766,347       89,656       10.00       1,233,819       1,754,935       896       842,292  
2009
    482,308       59,231       13.00       803,846       885,500       178       392,013  
2010
          639,170       0.01                   3,141,064        
                                                         
      1,248,655       805,191             $ 2,037,665     $ 2,640,435     $ 3,289,625     $ 1,462,522  
                                                         
 
Revenue recognition
 
Substantially all of our revenue is related to a government award and related party management fees. Revenue under this award is recognized in the period during which the related costs are incurred, provided that the conditions under the awards have been met and only perfunctory obligations are outstanding. We do not expect further revenue from awards as all future award receipts will be recorded as a reduction in the carrying value of our production facility. Additionally, our management fee agreement with a related party was terminated effective January 2011. No future management fee revenue is expected. At June 30, 2011, the Company’s only existing source of revenue is from its license agreement for D(−) lactic acid, which is recognized when Purac informs us on a quarterly basis of volumes produced with a reconciliation at the end of the year for the minimum royalty when relevant.
 
Impairment of long-lived assets
 
In accordance with FASB ASC 360, Property, Plant, and Equipment, we assess impairment of long-lived assets, which include property, plant and equipment, for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to, significant decreases in the market price of the asset; significant adverse


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changes in the business climate, legal or regulatory factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; or expectations that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.
 
The Company assesses the impairment of long-lived assets when events or changes in circumstances suggest that the fair value of the assets could be less than their net book value. In those circumstances, the Company assesses long-lived assets for impairment by determining their fair value based upon the forecasted, undiscounted cash flows the assets are expected to generate plus the net proceeds expected from the sale of the asset. An impairment loss would be recognized when the fair value is less than the carrying value of the asset group.
 
There were no indications of impairment of long-lived assets for the six months ended June 30, 2011 and the years ended December 31, 2010 and 2009.
 
We have not yet generated positive cash flows from operations on a sustained basis, and such cash flows may not materialize for a significant period in the future, if ever. Additionally, we may make changes to our business plan that will result in changes to the expected cash flows from long-lived assets. As a result, it is possible that future evaluations of long-lived assets may result in impairment.
 
We make estimates and judgments about future undiscounted cash flows. Although our cash flow forecasts are based on assumptions that are consistent with our plans, there is significant exercise of judgment involved in determining the cash flow attributable to a long-lived asset over its estimated remaining useful life. As a result, the carrying amounts of our long-lived assets could be reduced through impairment charges in the future.
 
Recent Accounting Pronouncements
 
In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, Fair Value Measurements and Disclosures — Improving Disclosures about Fair Value Measurements, that requires entities to make new disclosures about recurring or non-recurring fair value measurements and provides clarification of existing disclosure requirements. This amendment requires disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. This amendment is effective for periods beginning after December 15, 2009, except for the requirement to provide the Level 3 activity of purchases, sales, issuances, and settlements, which will be effective for fiscal years beginning after December 15, 2010. The adoption of this standard did not have a material impact on the consolidated financial statements.


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Industry
 
We are an industrial biotechnology company focused on becoming a low-cost producer of high-value biochemicals that drop-in and substitute for traditional petroleum-based industrial chemicals. We have developed a proprietary technology platform that we believe will enable us to manufacture a variety of drop-in chemicals and replacement chemicals for large and growing markets using a broad range of low-cost, renewable and readily available feedstocks. Our technology platform is based on a single-step anaerobic fermentation process that allows our microorganisms to grow and simultaneously produce the target product, resulting in greater productivity and yield relative to other known bioproduction processes. We believe that we can produce our target high-value chemical intermediates at an average of half the cost of traditional petrochemical intermediates at a wide range of oil and industrial sugar prices without relying on government subsidies. We have entered into or intend to enter into strategic relationships with international companies to accelerate the global commercialization of our products and development of our biochemical production capabilities. We are currently building a 30 million pound biosuccinic acid plant in Lake Providence, Louisiana, which we expect will begin commercial operations during the first quarter of 2013.
 
Our vision is to be the pre-eminent global low-cost producer of green, high-value biochemical intermediates.
 
INDUSTRY OVERVIEW
 
The global chemical market is estimated at approximately $1.2 trillion in annual sales. Chemicals are generally produced through the conversion of a feedstock into a higher-value product through a series of chemical reactions.
 
Organic chemicals are a class of chemicals based on or containing carbon atoms. Petrochemicals, which are organic chemicals, have traditionally been derived from fossil fuels such as petroleum, natural gas or coal. Organic chemicals can also be produced from renewable carbon sources such as plant-derived matter, including sugars, oils and cellulosic materials. These renewable plant sources are the basis of the biochemicals industry.
 
Organic chemical building blocks are used by the petrochemical industry to produce, through different chemical reactions, downstream chemicals used in thousands of industrial and consumer applications. These building blocks are classified according to the number of carbon atoms per molecule. For example, ethylene, the building block for such materials as polyethylene and ethylene glycol, has two carbon atoms per molecule (C2), is primarily derived from natural gas found in the U.S. and the Middle East, and is considered a light feedstock (i.e., its molecules contain few carbon atoms). Building blocks with three (C3), four (C4) and six (C6) carbon atoms are most commonly derived from a heavier petroleum feedstock. Supplies of these building blocks are influenced in part by the broader supply and demand dynamics of fossil-based feedstocks. For example, in the U.S., due to the widening pricing spread between natural gas and oil, many cracker operators are using lighter natural gas feedstocks to earn higher margins, thus limiting the production of heavier C3, C4 and C6 building block chemicals, which are derived from higher-priced petroleum feedstocks.
 
We are targeting high-value chemicals traditionally derived from these heavier feedstocks. Given their supply and demand dynamics, proprietary nature and barriers to entry, these target chemicals generally command higher prices than traditional commodity chemicals. We are targeting the C3, C4, and C6 chemicals shown in the diagram below.


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PETROCHEMICAL PRODUCT CHAIN
 
(FLOW CHART)
 
Feedstock cost and availability are important factors for chemical producers seeking to manufacture products with predictable and competitive costs. The overwhelming majority of chemicals are currently derived from fossil fuel sources. According to industry estimates, a substantial majority of all chemicals could be produced from renewable feedstocks. Given the limited availability and the increasingly volatile price of most fossil-based feedstocks, chemical and energy companies such as BASF, Dow, DuPont, DSM and Total are exploring alternatives, including using biobased inputs such as plant-derived sugars, cellulosic sugars and plant-based oils, to increase availability of feedstocks and reduce price volatility.
 
The market for biobased chemicals was estimated to be between $130 and $180 billion in 2010. By 2025, biobased chemical products are expected to comprise over 20% of the chemicals market at $490 to $610 billion (8-9% CAGR). Currently, chemical producers use biobased materials in a variety of products, such as in the production of fatty acids from plant-based oils for use as surfactants in detergents, cosmetics, synthetic lubricants and plastics. For example, DuPont and Tate & Lyle have developed and are operating a commercial-scale facility in Tennessee using renewable feedstocks to produce propanediol used in DuPont’s Sorona® product line of textile fibers and fabrics.
 
We believe that biotechnology has the potential to revolutionize the competitive dynamics of the petrochemicals market. This technology can substitute biobased chemicals for existing fossil fuel-based chemicals to produce drop-in chemicals and replacement chemicals that are less price volatile as compared to petroleum-based alternatives and are of identical quality. Biobased chemicals can be molecularly identical or perform identically to fossil fuel chemicals for which they substitute. This drop-in attribute allows downstream customers to use the same manufacturing processes designed and optimized for the use of traditional chemicals, allowing them to immediately substitute in biobased chemicals without long qualification steps or significant additional capital expenditures.
 
KEY FACTORS DRIVING DEMAND FOR BIOBASED CHEMICALS
 
Finite supply of fossil fuels
 
Petrochemical manufacturers and energy producers compete for petroleum, natural gas and coal. These carbon sources are finite resources with continuously growing demand. The global population is growing at a rate of over 80 million people per year, resulting in higher industrial output, powered principally by fossil fuels. Emerging markets (defined by the International Monetary Fund’s World Economic Outlook Database as


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150 emerging and developing countries) are expected to continue to grow rapidly, experiencing approximately 6% annual real GDP growth over the next 10 years, leading to increased demand for energy. For example, China and India’s combined share of energy consumption has nearly doubled in the past 20 years, rising from 10% of the world’s total energy consumption in 1990 to more than 20% in 2010, leading to pressure on feedstock availability and pricing pressure on chemicals production.
 
High and volatile price of petroleum
 
According to the EIA, global petroleum prices have risen over 300% in the past 10 years from $25.89 on May 18, 2001 to $108.48 on May 20, 2011. Chemical companies are continually evaluating feedstock alternatives to mitigate high input prices, maintain or improve margins and limit the need for price increases for their downstream products, which reduce demand and drive product substitution. Additionally, volatile prices for fossil fuels have generated financial and economic uncertainty for chemical producers. For instance, the average market price per barrel of West Texas Intermediate crude oil ranged from $145.66 in July 2008 to $30.81 in December 2008 and has increased to $82.89 as of August 10, 2011. Chemical manufacturers are seeking feedstocks with stable pricing to generate more predictable profit and cash flows.
 
Shortages of petroleum-based feedstocks
 
Steam crackers convert both petroleum-based feedstock (e.g., naphtha) and natural gas-based feedstock (e.g., ethane) into building blocks used in the production of chemicals. Recently, the low price of natural gas relative to petroleum in the U.S. has driven many cracker operators to switch from petroleum-based feedstocks to natural gas-based feedstocks to earn higher margins. Cracking natural gas-based feedstocks yields lower quantities of C3 and heavier chemical building blocks relative to yields resulting from cracking petroleum-based feedstock. The recent shift away from cracking petroleum-based feedstocks has reduced the supply of C3 and heavier chemical building blocks. Examples of affected chemicals include propylene (an input to acrylic acid) and benzene (an input to adipic acid and phthalic acid). Scarcity of such chemicals is expected to continue in the future as crackers continue to switch to natural gas-based feedstock, particularly in North America and the Middle East.
 
Low price volatility of biobased chemicals alternatives
 
Advances in the fields of industrial biotechnology and metabolic engineering are enabling the manufacture of biobased alternatives for a broad set of chemicals at lower production costs than petroleum-based chemicals. These biobased chemicals can substitute for existing fossil fuel-based chemicals, are less price volatile, and can be of identical quality. We believe that these qualities will drive industry adoption of biobased chemicals.
 
Improving economics drive increasing demand for “green” products
 
Market demand for “green” products is growing as a result of consumer preferences shifting towards products that are renewable and environmentally friendly. Leading consumer products companies, such as Coca-Cola, Wal-Mart, and Proctor & Gamble, are responding by introducing green products with a reduced carbon footprint and higher renewable content. Many of these initiatives have been hampered by the historically higher costs, or “green premium,” of manufacturing products using environmentally-friendly methods versus traditional cost-optimized processes. Cost-competitive, biobased chemicals would enable end-product vendors to address the growing demand for green products without sacrificing margins.
 
Increasing regulatory pressure and public awareness
 
Concerns over energy independence, product toxicity and greenhouse gas emissions generated in the production and consumption of fossil fuels have increased government regulation of the petrochemical industry, such as the U.S.’s Clean Air Act and Toxic Substances Control Act (TSCA) and the European Union’s REACH regulation. Growing public awareness of and concern over the production of atmospheric greenhouse gases and regulation of CO2 as a pollutant is increasing pressure on petrochemical companies to find replacements for current petroleum-based processes that generate large quantities of CO2 (such as BDO from butane or benzene and adipic acid from benzene) with newer biobased processes (such as our bioprocesses that produce biosuccinic acid) with reduced carbon footprints.


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Business
 
COMPANY OVERVIEW
 
We are an industrial biotechnology company focused on becoming a low-cost producer of high-value biochemicals that drop-in and substitute for traditional petroleum-based industrial chemicals. We have developed a proprietary technology platform that we believe will enable us to manufacture a variety of drop-in chemicals and replacement chemicals for large and growing markets using a broad range of low-cost, renewable and readily available feedstocks. Our technology platform, which we have validated in our laboratories and third-party tolling facilities and commercialized with our licensee, Purac Biochem BV, or Purac, a wholly-owned subsidiary of CSM N.V., is based on a single-step anaerobic fermentation process that allows our microorganisms to grow and simultaneously produce the target product, resulting in greater productivity and yield relative to other known bioproduction processes. We believe that we can produce our target high-value chemical intermediates at an average of half the cost of traditional petrochemical intermediates at a wide range of oil and industrial sugar prices without relying on government subsidies.
 
We have entered into or intend to enter into strategic relationships with international companies to accelerate the global commercialization of our products and development of our biochemical production capabilities. For example, we signed a non-binding memorandum of understanding, or MOU, to enter into a definitive joint development agreement with Johnson Matthey PLC’s subsidiary Davy Process Technology Limited, or Davy, a developer and licensor of advanced process technologies. Under that agreement, Davy would, upon completion of testing and engineering of our biosuccinic acid, guarantee to its butanediol process licensees that they could use our biosuccinic acid in their butanediol process in place of petroleum-derived maleic anhydride without significant additional capital expenditures. We have also signed exclusive alliance agreements with ThyssenKrupp’s subsidiary Uhde GmbH, or Uhde, a chemical plant engineering company, and its U.S. subsidiary, to integrate our fermentation technology with Uhde’s separation technology in the plant design and, on a project-by-project basis, provide process and performance guarantees for our future plants on mutually agreeable terms to facilitate access to project finance. In addition, we plan to leverage our partnership with PTT Chemical International Private Limited, or CH Inter, our largest stockholder and a subsidiary of PTT Chemical Public Company Limited, or PTTCH, a large Thailand-based petrochemical producer, to access CH Inter’s and PTTCH’s breadth of commercial and technical expertise and extensive knowledge and infrastructure in Asian markets.
 
We have validated our proprietary technology as cost-competitive using commercial-scale unit operations and multiple feedstocks. Our technology platform combines proprietary microorganisms, or biocatalysts, and a fermentation process capable of using diverse industrial sugars to create various chemical intermediates, such as succinic acid (a $7.5 billion market at current prices), fumaric acid (a $1.7 billion market), acrylic acid (a $14.5 billion market) and lactic acid (forecast to eventually become a multi-billion pound market). We believe that our technology is capable of efficiently producing organic chemicals at high yields while consuming less feedstock because we use an anaerobic process that consumes, rather than releases, atmospheric carbon dioxide, or CO2. For example, our models show that we can convert the same amount of sugar needed to make 100 million gallons of ethanol into approximately 1.4 billion pounds of biosuccinic acid, thereby yielding potential sales of $1.2 billion from biosuccinic acid versus $250 million from ethanol based on today’s market prices. Overall, our improved feedstock efficiency allows us to achieve significant cost advantages relative to competitors who use either traditional petroleum-based processes or other known bioproduction techniques, allowing us to realize attractive margins and return on capital.
 
Based on current commercial-scale cost metrics, we estimate that our production process for biosuccinic acid will be cost-competitive with petroleum-based processes down to $45 per barrel of oil. We believe, as a result, that we can radically transform the 1,4 butanediol, or BDO, and adipic acid markets, using renewable feedstocks while reducing our customers’ carbon footprint. Using this same technology platform, we also plan to address even larger markets, such as acrylic acid.
 
Our biosuccinic acid is a drop-in product that can be used in a number of petrochemical manufacturing processes. We are able to accomplish this because our technology produces a biosuccinic acid that is the same


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molecule as petroleum-based succinic acid currently used in existing markets. Our customers benefit from our chemical intermediates because we produce these high-value chemicals at costs that have lower volatility than petroleum inputs. We believe we can replicate this model for many widely used petrochemicals.
 
We are currently building a 30 million pound biosuccinic acid plant in Lake Providence, Louisiana, or the Louisiana Plant, and have contracts committing customers to buy 100% of each customer’s annual succinic acid requirements from us, consuming a substantial portion, and prospectively all, of the Louisiana Plant’s initial capacity based on the customers’ current stated forecasts. We anticipate that the Louisiana Plant will begin commercial operations during the first quarter of 2013. We intend to expand the annual production capacity of this plant to approximately 170 million pounds by the end of the first quarter of 2014. We are also negotiating a letter of intent with Uhde for an industrial biochemical facility for the production of biosuccinic acid at the Infraleuna Chemical Site in Leuna, Germany. The plant, which we expect would commence operations in the first half of 2012, would utilize our technologies to produce biosuccinic acid and ammonium sulfate in accordance with our product specifications. The plant would be owned and operated by Uhde and we would purchase the biosuccinic acid and ammonium sulfate produced by Uhde in accordance with our specification. We have also signed a memorandum of understanding with China National BlueStar (Group) Co. Ltd., or BlueStar, to develop a proposal for a jointly-owned 220 million pound biosuccinic acid plant in Nanjing, China, the biosuccinic acid requirements of which would be exclusively supplied by the Company. BlueStar is currently producing BDO utilizing a process licensed from Davy.
 
TECHNOLOGY
 
We are applying our expertise in metabolic engineering, directed evolution, fermentation technology and chemical engineering to design methods for producing high-value biochemicals at competitive prices. Our team of 37 scientists and researchers, including 18 with Ph.D. degrees, have developed a proprietary technology platform that we use to produce high-value biochemicals at high yield and productivity. We accomplished this by developing biocatalysts, microorganisms with altered metabolic pathways, that grow and simultaneously produce target biochemicals from a variety of feedstocks without the use of expensive complex nutrients. Our ability to couple the growth of our biocatalysts to target biochemical production improves productivity and yield and limits by-product formation, thereby reducing the need for expensive post-conversion unit operations. This reduces the risks of commercial scale-up and enables low-cost fermentations. Our process is anaerobic and therefore does not release CO2; in addition, in the production of biosuccinic acid, we introduce CO2 as an additional carbon source, thereby using less feedstock and reducing the carbon footprint of our products. Using our experience in industrial chemical engineering, we develop and scale-up fermentation processes that efficiently recover industrial biochemicals from fermentation broth in high purities. To separate and purify our target biochemicals, we use off-the-shelf equipment that has been deployed and proven at commercial scale for other organic products.
 
FEEDSTOCKS
 
Our biocatalysts are feedstock flexible and can consume sugars from a variety of sources, including glucose from corn and grain sorghum, sucrose from sugarcane, cellulosic sugars from waste biomass (e.g., bagasse and wood waste) and glycerol, a by-product of biodiesel facilities. After completing start-up and operational trials on sorghum-based sugars at the Louisiana Plant, we plan to transition to low cost sugars such as 95 Dextrose. The price of 95 Dextrose, an intermediate product of the corn wet-milling process, is significantly less volatile than that of corn. Between May 2001 and May 2011, corn prices on the CBOT ranged from $1.94 to $7.33 per bushel while 95 Dextrose ranged from $0.13 to $0.20 per pound.
 
Our management team has extensive experience in the commercial scale-up and operation of plants utilizing cellulosic-derived sugars spanning more than 20 years, having built and operated three separate pilot plants with various production capabilities. This experience includes all aspects of feedstock preparation, pre-treatment, hydrolysis and fermentation. We have made hydrolysate, containing both five carbon sugars (C5s such as xylose) and six carbon sugars (C6s such as glucose), which we have converted to both biosuccinic and lactic acid at the same efficiencies as traditional sugars. Our biocatalysts can consume both five carbon and six carbon sugars, which we believe positions us to be a first mover when cellulosic feedstocks become more


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widely available. We plan to use the most cost-effective regional feedstocks or a combination of feedstocks in our future plants.
 
COMMERCIAL SCALE-UP
 
Our technology platform has been deployed on a commercial scale since June 2008 at Purac’s manufacturing facility in Barcelona, Spain for the production of D(−) lactic acid. Purac is a worldwide leader in the production of lactic acid. In January 2006, we granted Purac an exclusive, worldwide and royalty-bearing license under our licensed patents and technologies to produce, market and sell D(−) lactic acid, its derivatives and by-products. Purac produces D(−) lactic acid using our technology in 200,000 liter fermenters. The scale-up of the Louisiana Plant represents a two fold scale-up as compared to the production of D(−) lactic acid as commercialized by Purac and is comparable in nature.
 
We have scaled up our biosuccinic acid production from an initial fermentation vessel size of five liters to 50,000 liters from January 2008 to February 2011 beginning in our laboratories, and continuing at Uhde’s Leipzig, Germany pilot plant, at Wisconsin BioProducts, a contract fermenter, and at Fermic. We entered into a contract manufacturing arrangement with Fermic to validate our technology at a larger scale and produce samples for customers and equipment vendors. Using Fermic’s 20,000 liter fermenters represented a more than 1,000 fold increase in fermenter size compared to the fermenters in our R&D laboratory. We began to make product in our labs with five liter fermenters, then transitioned to 500 liter fermenters at Fermic and then rapidly progressed to Fermic’s 20,000 liter fermenters. Using Fermic’s site, personnel, and equipment, we produced a total of 24 metric tons of biosuccinic acid. Myriant reimbursed Fermic for raw materials, the use of Fermic’s personnel, and the rental of Fermic’s equipment. All product made under this arrangement belonged exclusively to Myriant and was sent to customers, vendors, and our laboratories for testing. For a period of 20 months, we conducted our tests, further developed our process, and made product samples.
 
PARTNERSHIPS
 
We have entered into or intend to enter into strategic relationships with international companies to accelerate the global commercialization of our products and the development of our biochemical production capabilities. Our partners include international process design, engineering and licensing firms that serve the chemicals industry, such as Davy and Uhde. These arrangements will help validate our products and processes for the commercial production of biosuccinic acid. For example, we expect that Davy will perform, at its expense, all of the engineering, development and pilot plant work at its facilities needed to validate our biosuccinic acid for its process technology and, upon successful testing of our biosuccinic acid, would guarantee to its licensees that our biosuccinic acid will work in replacement of MAN in its BDO production process. This approach takes advantage of the existing plants that use the Davy process for BDO production (approximately 1.2 billion pounds or 27% of total global capacity and 50% of capacity installed since 1992) and would enable Davy process licensees to use our biosuccinic acid in their production process without significant additional capital expenditures. To accelerate development, construction and financing of our production facilities, we have signed exclusive alliance agreements with Uhde, an international engineering company focused on the design and construction of chemical, refining and other industrial plants. Uhde will integrate our fermentation technology with its separation technology in the plant design and provide process and performance guarantees on mutually agreed terms facilitating access to project finance.
 
We plan to leverage our partnership with CH Inter and PTTCH to access CH Inter’s and PTTCH’s breadth of commercial and technical expertise and extensive knowledge in Asian markets. In addition, we are negotiating a joint venture and licensing arrangement with PTTCH that will enable us to commercialize our technology and develop biochemical plants in the ASEAN countries.
 
TARGET MARKETS
 
The following markets are established chemical markets traditionally dependent on petroleum-based feedstocks for which we are developing biobased alternatives.


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Succinic Acid ($7.5 billion market)
 
Succinic acid is a chemical building block that is used as an intermediate in the production of numerous high-volume products including plastics, fibers, coatings, solvents and cosmetics. The U.S. Department of Energy has identified succinic acid as one of the five most promising “building block” chemicals that can be produced commercially from biomass rather than fossil fuels, as can be seen in the following figure.
 
Biosuccinic Acid Applications
 
(IMAGE)
 
Succinic acid is conventionally produced from benzene or butane. To produce succinic acid, benzene or butane is first oxidized to produce maleic anhydride, or MAN, releasing roughly half the raw material mass as CO2, after which MAN is reduced to succinic acid through hydrolysis. Succinic acid is produced in existing chemical processes that use MAN as an input, and is most commonly produced as a captive intermediate rather than as a merchant product. Examples of high-volume production processes that go through succinic acid include BDO, gamma-butyrolactone (GBL), and tetrahydrofuran (THF). We plan to produce biosuccinic acid that will feed into existing processes that use succinic acid as an intermediate, replacing MAN with biosuccinic acid and thereby eliminating plant unit operations and saving capital costs.
 
There is currently a small existing merchant market for succinic acid which we plan to sell our biosuccinic acid into. Succinic acid is currently produced by Royal DSM N.V. and several small producers in China and India, and is used as an input in the production of pigments, solvents, detergents, metal plating, and polybutylene succinate (PBS) polymers. PBS polymers are biodegradable, and can be used to replace conventional plastics in applications such as flexible packaging, agricultural films and compostable bags. The PBS polymers market is currently small, but we expect it to grow over time as demand for biodegradable plastics increases.


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In addition to targeting the existing succinic acid market, we plan to sell our biosuccinic acid in the following target markets:
 
Butanediol
 
BDO is a high-value chemical intermediate with end markets in polymer resins, fibers, coatings and other downstream chemical products. Total global BDO capacity is estimated at approximately 4.5 billion pounds per year. Half of global BDO is used as an intermediate in the production of THF, which is an intermediate in the production of elastic fibers such as elastane, better known as Spandex® and Lycra®. The rest of global BDO production is used as a raw material for polybutylene terephtalate (PBT) engineering polymers, polyurethanes and other applications. Growth drivers for BDO demand include increasing demand for elastic fibers in China and recovering demand for PBT engineering resins in the U.S.
 
Roughly two-thirds of global BDO is captively used by BDO producers. BDO is produced through four main processes: the Reppe process (41% of global capacity), the Davy process (27%), the Propylene Oxide process (21%) and the Mitsubishi process (7%). The largest producers of BDO globally include BASF, Dairen Chemical, LyondellBasell, ISP, Invista and China National BlueStar Corporation.
 
The Davy process was commercialized in the 1990s as a lower-cost, more efficient alternative to the Reppe process and is based on the conversion of MAN into dimethyl succinate and then into BDO. Succinic acid can be used as a drop-in replacement for MAN in this process. This process represents the fastest growing BDO technology. The Davy process accounts for 50% of BDO plant capacity built since 1992, and its licensed installed base is currently estimated at 1.2 billion pounds per year. The largest Davy process producers include China National BlueStar Corporation, Sinopec, BASF/Petronas, Gulf Advanced Chemical Industries and Sanwei.
 
We plan to sell our biosuccinic acid as a drop-in in the butanediol market.
 
Adipic Acid
 
Adipic acid is a major chemical intermediate derived from benzene and used in a range of polymers and plastics applications, which are in turn used in the production of specialty flexible foams for textile laminations and garment linings, packaging, filters and fuel tank linings and for PVC-based adhesive tapes, such as automotive decals, labels and electrical, surgical and industrial tapes. Over half of the adipic acid produced globally is used to produce nylon 6,6 fibers and engineering resins. The remainder of adipic acid is used to produce polyester polyols, plasticizers, and other polymer applications. The total market size of adipic acid is estimated at $6.9 billion at current prices.
 
The adipic acid market has been negatively impacted by the limited supply of benzene, which is the traditional building block used to produce adipic acid. Periodic supply shortages and high prices in benzene have led to volatility in the availability and cost of adipic acid. In addition, capacity rationalization during the recent recession combined with a rebound in demand for adipic acid has further contributed to shortages and price increases. Adipic acid production also generates large quantities of pollutants such as carbon dioxide and nitrous oxide. Emissions of these pollutants attract regulatory pressure and can lead to higher taxes and regulatory requirements to add equipment to reduce emissions. Biosuccinic acid, which can be sold as a replacement for adipic acid in non-nylon applications, offers an alternative with potentially less volatile prices and green attributes.
 
The major producers of adipic acid include Invista, Rhodia, Ascend Performance Materials and BASF.
 
We plan to sell our biosuccinic acid as a replacement chemical in the adipic acid market.
 
Phthalic Anhydride
 
Phthalic anhydride, or the anhydride of phthalic acid, is a major chemical intermediate used as a raw material to produce plasticizers, coatings and polymer resins. Plasticizers account for approximately half of global phthalic anhydride consumption, with the remainder used in alkyd resins for surface coatings, unsaturated polyester resins and polyester polyols. Plasticizers are used in, among other products, wire/cable


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jacketing, garden hoses, medical tubing and PVC film. Polyester resins are used in pipes, ducts, bathroom components, automotive parts and swimming pools. The total market size of phthalic anhydride is estimated at $6.2 billion at current prices.
 
Phthalic anhydride is generally produced from o-xylene, a benzene derivative, but can also be produced from naphthalene or an o-xylene/naphthalene blend. Because phthalic anhydride markets are linked to benzene, recent global shortages in benzene have driven up prices and reduced available supply.
 
Health concerns have recently been raised regarding the use of phthalic anhydride derivatives, or phthalates in consumer plastics. Studies have found that animals exposed to phthalates experience adverse health effects including reduced testosterone production, reduced estrogen production, birth defects and liver cancer. Citing health risks, the U.S. government in 2008 enacted a permanent ban on three phthalates and a temporary ban on three others from composing more than 0.1% of any children’s product for ages 12 and under. In 2005, the E.U. enacted a similar ban on the use of six phthalates in children’s products, and in 2011 Canada restricted the use of six phthalates above 1,000 milligrams per kilogram in children’s toys and child care products. Phthalates were also the subject of a recent U.S. law suit in which two consumer advocacy groups sued the U.S. Consumer Product Safety Commission (CPSC) alleging the commission acted illegally by failing to adequately regulate toxic phthalates in consumer products.
 
As a result of increasing government regulation of phthalates and growing public awareness of their potential health risks, producers are looking for non-phthalate chemicals to use as replacements. Succinate esters, derived from succinic acid, have similar performance characteristics to phthalates. Some of our prospective customers have already tested replacing phthalates with succinates and one customer has signed a contract with us for that purpose.
 
The major global producers of phthalic anhydride include BASF, Nan Ya, ExxonMobil, UPC Group and Aekyung Petrochemical.
 
We plan to sell our biosuccinic acid as a replacement chemical in the phthalic anhydride market. We have entered into a supply agreement with The Chemical Company to supply it with biosuccinic acid in accordance with the terms set forth in the section titled “Customers” on page 74 of this prospectus.
 
Lactic Acid (forecast to eventually become a multi-billion pound market)
 
Lactic acid exists in nature as a mixture of two forms: D(−) lactic acid and L(+) lactic acid. These molecules contain the same elements but are mirror images of each other, like a right and left hand. The production of the polylactic acid, or PLA, uses this mixture of lactic acid. PLA has an inherent weakness in heat stability, compared to other polymers such as polyethylene and polypropylene. PLA polymers melt at approximately 70 degrees Celsius, which makes it unsuitable for many applications. Combining D(−) lactic acid in higher concentration raises the melting point of PLA to 200 degrees Celsius, which opens up many new applications to PLA. Thus, there is significant value in producing pure D(−) lactic acid.
 
Since D(−) and L(+) lactic acid are so similar, they are difficult to separate into pure product. Prior to the development of our technology, D(−) and L(+) lactic acid were separated from each other through an expensive chemical separation process. As a result of this costly separation process, use of pure D(−) lactic acid in PLA has not been commercially viable. Our technology allows for the production of D(−) lactic acid alone or L(+) lactic acid alone in one step through biosynthesis, which simplifies and lessens the cost of the purification process. We believe our low cost position in the production of D(−) lactic acid would thus create an economically viable solution for manufacturers looking to enhance the performance of PLA.
 
Until recently, SC-PLA could not be produced because there was no commercial supply of D(−) lactic acid. In 2008, Purac, one of the world’s largest producers of lactic acid, began commercial production of D(−) lactic acid using bioproduction technology licensed from us.


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Fumaric Acid ($1.7 billion market)
 
Fumaric acid is currently used as a preservative in food and beverages, as a sizing agent in paper production and as an input for alkyd resins used in paints and coatings. The existing fumaric acid market size is estimated at $319 million at current prices. Fumaric acid can also be used as a replacement for MAN in the production of unsaturated polyester resins (UPR), which are used in construction, marine and automotive products. This replacement is possible because fumaric acid is chemically equivalent to a combination of MAN and water. Fumaric acid is not used as a MAN replacement today because it is not currently produced at a cost that is competitive with the MAN production cost. The market for which fumaric acid can potentially replace MAN, excluding MAN used in the Davy BDO process, is estimated at $1.4 billion at current prices. The existing fumaric market and MAN market are together estimated at $1.7 billion at current prices.
 
The major global fumaric producers include Bartek Ingredients, Polynt, Thirumlai, DSM Fine Chemicals, UPC Technology, Weinan Shuangqiao, Proaroma Industria e Comercio, Tate & Lyle and Yongsan Chemicals.
 
We plan to sell our fumaric acid as both a drop-in to the fumaric acid market and as a replacement for MAN.
 
Acrylic Acid ($14.5 billion market)
 
Acrylic acid, one of the most versatile monomers, is used to impart hardness, tackiness and durability to thousands of polymer formulations. Its two main derivatives are acrylates and polyacrylic acid. Acrylates, which are esters of acrylic acid, are used in superabsorbents, coatings, adhesives, sealants, textiles, paper chemicals and plastic additives. The acrylic acid market size is estimated at $14.5 billion. Major growth applications for acrylates include radiation-curable coatings, adhesives, sealants and acrylic fibers.
 
Acrylic acid is produced primarily from propylene. Propylene-based production involves adding oxygen to propylene to produce acrolein, an unsaturated aldehyde, which is further oxidized to acrylic acid. Acrylate esters can then be produced through esterification of acrylic acid with an alcohol (e.g., n-butanol, ethanol, methanol). Major global producers of acrylic acid include BASF, Dow, Nippon Shokubai, Arkema, Formosa Plastics, Evonik Stockhausen and Jiangsu Jurong.
 
We plan to sell our acrylic acid as a drop-in chemical in the acrylic acid market.
 
OUR COMMERCIAL PRODUCTS
 
Biosuccinic Acid
 
We are currently focused on commercializing and producing biosuccinic acid. This product represents a market opportunity of $7.5 billion. Biosuccinic acid can be used to make a range of high-volume, high-value chemical products, including BDO, polybutylene succinate, or PBS, tetrahydrofuran, or THF, and as a substitute for adipic acid and phthalic anhydride. These products are primarily used in the production of polyurethane fibers, solvents and engineered plastics. We believe we can be a low-cost producer of biosuccinic acid relative to producers using either traditional petroleum-based processes, including petroleum-derived maleic anhydride, or other known bioproduction techniques.
 
We believe we can achieve commercial-scale cost targets for our biosuccinic acid and have already had more than 24 metric tons of biosuccinic acid made for us at the Fermic tolling plant for our internal testing and customer/vendor sampling and validation. Customer feedback has been positive and has resulted in three supply contracts and one signed letter of intent. We estimate that these contracts will consume a substantial portion, and prospectively all, of the initial annual production capacity available at our Louisiana Plant. We are planning to expand the plant to 170 million pounds by the end of the first quarter of 2014 and have a pipeline of customers in place that have indicated interest in purchasing our biosuccinic acid that would be sourced from this additional annual production capacity.
 
Through our relationship with Davy, we intend to target BDO plants that use the Davy process to replace their petroleum-derived maleic anhydride with our biosuccinic acid. This will allow our customers to produce BDO from renewable resources with a reduced carbon footprint and higher renewable content relative to the


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traditional Davy production processes. We are also working with Davy to integrate and optimize our respective processes to reduce the number of unit processing operations, thereby further reducing our overall cost of biosuccinic acid production for use in BDO applications.
 
D(−) Lactic Acid
 
In June 2008, our technology platform was commercialized for the production of D(−) lactic acid through our licensee, Purac. This is the first product based on our technology. Purac pays us royalties based on sales. Our D(−) lactic acid is, to our knowledge, the only pure D(−) form of lactic acid on the market, which allows it to be cost-effectively alloyed with PLA as a stereocomplex (SC-PLA), addressing the thermal stability problem that has limited the adoption of traditional PLA (L-PLA). We believe that biobased SC-PLA has the potential to enter higher-value markets such as engineered plastic, which will expand SC-PLA’s market. As a result, market forecasts predict the market for D(−) lactic acid will eventually exceed one billion pounds. The conversion of feedstock through our D(−) lactic acid to PLA can be visualized in four general steps:
 
(FLOW CHART)
 
We are currently in the development phase of our stage-gated process to use non-food cellulosic biomass to make D(−) and L(+) lactic acid. Our stage-gate process is described in more detail in the section titled “Our Technology Platform” on page 73 of this prospectus. When the second generation process is completed, we will have the ability to produce and sell D(−) and L(+) lactic acid from our own plants. We have no obligation to license the second generation process to Purac. D(−) lactic acid and L(+) lactic acid are together forecast to become a multi-billion pound market.
 
We intend to finance the completion of this development with a combination of cash on hand and a portion of the net proceeds received from this initial public offering of our common stock.
 
OUR PRODUCT PIPELINE
 
Our technology platform provides for the manufacture of several additional products through the use of metabolic pathways related to those that we used to develop both our lactic acid and biosuccinic acid technologies.
 
Fumaric Acid
 
We are developing a biobased fumaric acid utilizing the same E. coli-based technology used to produce our biosuccinic acid. Fumaric acid is an important ingredient used in food preservation, as a sizing agent in paper production and as an input to alkyd resins used in paints and coatings. Fumaric acid can also be used as a replacement for MAN in all MAN-based applications, because fumaric acid is chemically equivalent to a combination of MAN and water. The most significant of these applications is the production of UPRs, where fumaric acid can be used on a drop-in basis to replace MAN. We are in initial discussions with major UPR producers regarding the use of biobased fumaric acid in UPR production. Including both the existing fumaric acid market and the market for which fumaric acid can replace MAN, but excluding MAN used in Davy BDO plants, we believe that fumaric acid represents a $1.7 billion market. We are one year into our development cycle for fumaric acid, and we expect to enter the scale-up phase in 2012.
 
Acrylic Acid
 
We are currently in the discovery stages of developing a biobased process for making acrylic acid, one of the most versatile monomers. We have achieved proof of concept at laboratory scale and are in the first year of our development phase for acrylic acid. We expect to enter the pilot phase in our cycle in 2012.


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OUR COMPETITIVE STRENGTHS
 
We believe that the following strengths differentiate us from both traditional chemical producers and other biobased chemical producers:
 
Validated proprietary technology.  Our technology has the following features:
 
  •  single-step anaerobic process allows our biocatalysts to grow and simultaneously produce the target product, resulting in greater productivity and yield relative to other known bioproduction techniques;
 
  •  allows fermentation of diverse sugars to create multiple high-value biochemicals;
 
  •  enables us to produce a broad set of C3, C4 and C6 based chemicals;
 
  •  reduces carbon footprint for our products by consuming rather than producing CO2;
 
  •  limits by-product creation, lowering purification costs; and
 
  •  organism that thrives in a minimal salt medium with no need for corn steep liquor, yeast extract or other expensive raw materials.
 
Low-cost producer of sustainable biobased products.  Our drop-in and replacement products address large existing industrial chemical markets at an average of half of the cost of traditional petrochemical intermediates at both today’s and a wide range of oil and industrial sugar prices. We believe our low-cost manufacturing process will allow us to offer customers sustainable, biobased inputs to existing processes at stable prices competitive with petroleum-based inputs. For example, Davy-licensed BDO producers could offer a green product and reduce their exposure to price volatility of petroleum-derived MAN by substituting our biosuccinic acid. In addition to stable raw material pricing, Davy approval of our biosuccinic acid for use in its BDO process would enable its process licensees to use our biosuccinic acid in their production process without significant additional capital expenditure. We also plan to offer our biosuccinic acid as a replacement for other petroleum-based products such as adipic acid and phthalic anhydride, thus reducing price volatility faced by purchasers of those products.
 
Feedstock flexible.  Using bioproduction processes, we have successfully made biosuccinic acid from 95 Dextrose, grain sorghum, sucrose from sugarcane, cellulosic sugars from waste biomass (e.g. bagasse and wood waste) and glycerol, which is a by-product of biodiesel facilities. Our biocatalysts consume both five carbon sugars (C5s such as xylose) and six carbon sugars (C6s such as glucose), which we believe positions us to be one of the first movers when cellulosic feedstocks become more widely available. We plan to use the most cost-effective regional feedstocks or combination of feedstocks in our future plants, such as cassava in Thailand, sugarcane in Brazil, corn-derived 95 Dextrose in the United States and waste biomass and cellulosics throughout the world.
 
Commercialized product.  Our technology platform has been commercialized for the production of D(−) lactic acid through our licensee, Purac. Purac uses our process to produce D(−) lactic acid, which is an input to SC-PLA, a biopolymer that addresses the thermal stability problems associated with conventional PLA (L-PLA). SC-PLA offers higher strength and crystallinity and superior heat resistance relative to L-PLA, enabling its use in higher value applications such as engineered and high-performance plastics. We know of no other biocatalyst capable of producing pure D(−) lactic acid in one step via bio-synthesis.
 
Strategic relationships with international companies in the fields of chemicals, process technology and engineering.  We have entered into or intend to enter into strategic relationships with international companies to accelerate the global commercialization of our products and the development of our biochemical production capabilities. We are collaborating or negotiating with two international process design, engineering and licensing firms to the chemical industry, Davy and Uhde, to help validate our products and processes through developing process and performance guarantees for the commercial production of biosuccinic acid. Our memorandum of understanding with Davy contemplates that if Davy successfully completes engineering and testing of our biosuccinic acid, Davy would guarantee to its licensees that our biosuccinic acid will work in replacement of MAN in its BDO production process. This approach takes advantage of the existing installed asset base that uses the Davy process for BDO production and would enable Davy process licensees to use our biosuccinic acid in their production process without significant additional capital expenditures. To accelerate development, construction and project financing of our production facilities, we have signed exclusive alliance


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agreements with Uhde, an international engineering company focused on the design and construction of chemical, refining and other industrial plants, providing for Uhde to integrate our fermentation technology with its separation technology in the plant design and, on a project-by-project basis, to provide process and performance guarantees on mutually agreed terms for our future plants, facilitating access to project finance.
 
We also plan to leverage our partnership with CH Inter and PTTCH to access CH Inter’s and PTTCH’s breadth of commercial and technical expertise and extensive knowledge in Asian markets. In addition, we are negotiating a joint venture and licensing arrangement with PTTCH to commercialize our intellectual property and develop biochemical plants in the ASEAN countries.
 
Profitable unit-level economics without subsidies or mandates.  We do not rely on regulatory policies, subsidies, mandates or tariffs to make our products commercially viable. Based on our testing, projections and experience to date, we believe that our technological platform will allow us to offer our products at prices that are competitive with petroleum-based chemicals, without reliance on green premiums or government subsidies. We believe capital expenditures required for production of our products are consistent on a per-pound basis with traditional chemicals plants and provide a more attractive return on capital.
 
Scale-up and signed customer contracts.  We have scaled up the production of our biosuccinic acid from an initial five liters to 50,000 liters from January 2008 to February 2011. This scale-up was executed in ten fold increments over prior capacity and was executed successfully, providing the basis of the commercial-scale cost metrics that will make our production process for our biosuccinic acid cost-competitive down to $45 per barrel of oil. Under our supervision, the Fermic tolling facility produced 24 metric tons of biosuccinic acid for us in support of our internal and customer/vendor sampling and testing programs of over 100 current and potential customers. Our biosuccinic acid was validated through sampling and testing in analytical labs, application labs and pilot plants by 26 major chemical companies. We anticipate entering into additional contracts with a variety of customers prior to construction of new production facilities. We are negotiating additional supply agreements for the supply of our products from our Louisiana Plant expansion with a variety of large, well-established chemical companies.
 
Experienced team with a demonstrated track record.  Members of our management team have years of experience in developing, scaling, building and operating biotechnology and chemical businesses, and have led several companies and projects with a demonstrated track record of achievement and technological process. Accomplishments include:
 
  •  developing microorganisms and new products (D(−) lactic acid, cellulosic ethanol, DuPont’s Suva®, riboflavin);
 
  •  developing the fermentation and downstream processes of industrial biotechnology (D(−) lactic acid, cellulosic ethanol, riboflavin);
 
  •  employing process development and project management of large scale plants from start to finish (BASF’s $1.3 billion steam cracker and the world’s largest butadiene extraction unit);
 
  •  financing and constructing large scale capital projects;
 
  •  commercializing and navigating product approvals at global and multinational companies (D(−) lactic acid and DuPont’s Suva®);
 
  •  constructing and operating a $270 million, 100 million gallon biofuel facility; and
 
  •  managing global business functions, including pricing, sourcing, customer interfacing, budgeting, and capital planning.


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OUR STRATEGY
 
Our strategy is to become a low-cost producer of high-value biochemicals that drop-in and substitute for traditional petroleum-based industrial chemicals. Key elements of our strategy include:
 
Developing drop-in and replacement products for large existing markets.  We intend to commercialize a broad set of chemicals with large markets. Through our licensee Purac, we commercialized our first high-value chemical, D(−) lactic acid, and we are currently constructing a commercial-scale production facility for our biosuccinic acid (a $7.5 billion market) product. In addition, we are developing new biocatalysts and processes to produce fumaric acid (a $1.7 billion market) and acrylic acid (a $14.5 billion market). We intend to finance the development of such new biocatalysts and processes with a combination of cash on hand and a portion of the net proceeds received from this initial public offering of our common stock.
 
Leveraging and establish partnerships to achieve commercial success.  We believe that our technology and engineering partnership with Uhde and potential partnership with Davy will enable us to accelerate the global commercialization of our products and the development of our biochemical production capabilities and provide us with a channel to market for high-value biochemicals. We intend to leverage our strategic partnership with CH Inter and PTTCH to access their breadth of commercial and technical expertise and extensive knowledge and infrastructure in Asian markets. We are currently in discussions with potential partners to accelerate all elements of our business plan.
 
Targeting drop-in applications to drive market penetration.  We intend to initially target drop-in applications for our products to drive market adoption. We also plan to pursue replacement applications for our products to expand our market position. For example, our biosuccinic acid commercialization strategy involves targeting drop-in products for BDO manufacturing and existing biosuccinic acid applications, where we intend to drive adoption to increase productivity without the need for significant additional capital expenditure by our targeted customers. We also plan to market our biosuccinic acid as a replacement for adipic acid in applications where manufacturers can use it to make products of identical quality with lower price volatility and greater environmental sustainability.
 
Rapidly penetrating existing BDO market.  We signed a non-binding memorandum of understanding, or MOU, with Davy to enter into a definitive joint development agreement, pursuant to which Davy would approve our biosuccinic acid for use in BDO plants that use the Davy process, which would provide us with an immediately available market for biosuccinic acid. This represents roughly 27% of the BDO market, or 1.2 billion pounds per year. We believe our biosuccinic acid, if successfully guaranteed by Davy for use in its BDO process, will enable Davy process licensees to use our biosuccinic acid in their production process without significant additional capital expenditure.
 
Securing customer contracts to support production capacity expansion.  We plan to secure customer contracts in advance of expanding our production capacity to mitigate capacity utilization risks. We have signed contracts with three customers who have agreed to buy 100% of their succinic acid from our Louisiana Plant to replace petroleum-based succinic acids, adipic acid and phthalates. As of May 2011, we were in discussions with over 100 prospective customers that have indicated interest in purchasing our biosuccinic acid that would be sourced from the additional capacity created upon the expansion of the Louisiana Plant to 170 million pounds.
 
Expanding internationally to markets with the greatest business opportunities.  We plan to compete in the broad petrochemical market by deploying our technology and establishing manufacturing operations globally. We expect that Asia will be responsible for a majority of the growth of demand in global markets. Our strategic relationship with CH Inter and PTTCH will enhance our ability to develop, finance, build and operate plants in the region.
 
Capitalizing on our feedstock flexibility to further reduce cost.  Our biocatalysts are feedstock flexible and can consume sugars from a variety of biomass sources. We plan to use the most cost-effective regional feedstocks or combination of feedstocks in our future plants, such as cassava in Thailand, sugarcane in Brazil and corn-derived 95 Dextrose in the United States, as well as waste biomass


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and cellulosics throughout the world. This strategy is designed to expand the geographic scope of our business while further improving the economics of our products.
 
OUR TECHNOLOGY PLATFORM
 
Our proprietary technology platform, which we have validated in our laboratories and third-party tolling facilities and commercialized with our licensee, Purac, is based on a single-step anaerobic fermentation process (that is, a chemical reaction process that does not require oxygen). This process allows our biocatalysts to grow and simultaneously produce the target product, resulting in greater productivity and yield relative to other known bioproduction techniques, rather than a two-step process of first growing biocatalysts aerobically and then switching to an aerobic fermentation process. Aerobic growth uses more feedstock than anaerobic growth, reducing yield and increasing costs. For this reason, we can produce high-value biochemical intermediates at an average of half the cost of traditional petrochemical processes at a wide range of oil and feedstock prices without reliance on government subsidies or a “green premium”. We intend to capitalize on the feedstock flexibility of our processes to tailor manufacturing plants to utilize low cost, readily available feedstocks.
 
Our detailed understanding of many of the biochemical pathways within microbial cells has allowed us to create engineered microbes that produce desirable biochemicals. Such engineered microbes can be grown in suitable media and used as biocatalysts to create desired biochemicals.
 
Our team of 37 scientists and researchers, including 18 with Ph.D. degrees, couple the understanding of the biochemical pathways of microorganisms with our expertise in metabolic engineering and metabolic evolution to create unique and novel proprietary biocatalysts that produce target biochemicals at high yields. We believe that our biocatalysts are unique in their ability to grow and simultaneously produce target biochemicals in minimal growth medium and without the use of expensive complex nutrients. Our ability to couple the growth of our biocatalysts to target biochemical production improves productivity and yield and limits by-product formation thereby reducing the need for expensive post-conversion unit operations. In addition, our biocatalysts have the capacity to produce target biochemicals through one-step anaerobic growth as opposed to aerobic growth. Aerobic growth results in greater variability and less predictability in the growth of the biocatalysts and in commercial scale production of target biochemicals due to technical difficulties in providing uniform oxygen partial pressure throughout a large volume fermentation vessel. On the other hand, the growth under anaerobic growth conditions is uniform. Our biocatalysts are produced through metabolic engineering and metabolic evolution and do not contain any foreign genes.


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Once we have established laboratory scale production of target biochemicals using our biocatalysts, our expertise in fermentation technology allows us to scale up to commercial scale production with consistent productivity and yield. The chart below indicates where our products stand in our stage-gated commercialization process. A “stage-gate process” is a roadmap for advancing a product from the exploration stage to commercialization. The stage gate divides the development activities into distinct stages separated by decision points that do not allow further progress until the decision makers elect to proceed based on the results of the particular stage. At each “gate” meeting, the decision makers review technical progress up to that point, estimated costs of proceeding to the next stage and benefits of the new product or technology. The decision to proceed to the next stage or terminate the project is based on this review.
 
(FLOW CHART)
 
The D(-) lactic acid production process is at commercial scale. We are in the process of commercializing our biosuccinic acid process. Our current development efforts are focused on developing biocatalysts for the production of fumaric and acrylic acid from a variety of sources, including glucose from corn and grain sorghum, sucrose from sugarcane, cellulosic sugars from waste biomass and glycerol. Our platform provides flexibility and we are able to produce biocatalysts that are based on a variety of micro-organisms, including gram negative bacteria, such as E. coli, gram positive bacteria, such as bacillus, and yeasts. Our platform is directed toward selecting the most efficient microorganism to create biocatalysts for the production of desired biochemicals in a cost-effective manner. We have developed biocatalysts with the ability at laboratory scale to utilize a variety of different biobased feedstocks, including glucose, xylose, sucrose, glycerol and hydrolysates derived from woody lignocellulosic feedstock.
 
With our extensive experience in industrial chemical engineering processes, we have recovered high-value biochemicals from fermentation broth with high purities. To separate and purify our products, we use off-the shelf equipment that has proved useful in the large-scale recovery of other organic compounds. Through research and development, metabolic engineering and directed-evolution processes, we seek to remove chemical pathways in organisms that may create unwanted by-products. This enables the elimination of purification steps in the chemical manufacturing process thereby reducing capital costs.
 
CUSTOMERS
 
As of June 2011, we have entered into the following contracts for the supply of biosuccinic acid as described below. Except as noted, in each case, pricing is to be determined by future negotiations with the


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customers. However, we intend to develop and incorporate pricing formulas into our contracts that will be based, in part, on the market prices of certain reference commodities.
 
Johann Haltermann Ltd.  We entered into a supply agreement in June 2010 with Johann Haltermann Ltd., or Haltermann, previously the Dow Haltermann Custom Processing division of the Dow Chemical Company, to supply it with 100% of its requirements for succinic acid, not to exceed 20 million pounds annually. Haltermann is a leading supplier of a wide range of chemicals. Haltermann has been a partner with virtually all of the top chemical, automotive, and engine companies since 1981. Our contract with Haltermann has a five-year term.
 
Piedmont Chemical Industries I, LLC.  We entered into a supply agreement in January 2011 with Piedmont Chemical Industries I, LLC, or Piedmont, to supply it with 100% of its requirements for succinic acid, with a target volume of five million pounds annually at a fluctuating price based in part on certain reference commodities. Piedmont is a subsidiary of Piedmont Chemical Industries, Inc., which has over seventy years of experience in the chemical industry serving customers in a wide range of specialty chemicals. Our contract with Piedmont has a five-year term.
 
The Chemical Company.  We entered into a supply agreement in May 2010 with The Chemical Company, or TCC, to supply it with 100% of its requirements for succinic acid, with a target volume of five million pounds of biosuccinic acid annually. TCC is a leading manufacturer and distributor of specialty and commodity chemicals with over 40 years of experience in the industry. Its chemicals are used in the cosmetics, pharmaceuticals, petroleum, plastics, and food and paper industries. Our contract with TCC has an initial five-year term.
 
As of June 2011, we have entered into the following non-binding arrangement for the supply of biosuccinic acid:
 
Showa Denko Europe GmbH.  We entered into a non-binding Heads of Agreement in February 2010 with Showa Denko Europe GmbH, or Showa Denko, outlining a relationship in which Showa Denko would purchase our biosuccinic acid in replacement of petroleum-based succinic acid for use in the production of polybutylene succinate (PBS), a type of biodegradable polyester, outside of North America. The Heads of Agreement also sets the terms by which we would work with Showa Denko to develop the North American market for polybutylene succinate.
 
As of June 2011, we have entered into the following arrangement for the supply of liquid ammonium sulfate:
 
Wilson Industrial Sales Company, Inc.  We entered into a supply agreement with Wilson Industrial Sales Company, Inc., or Wilson, to supply it with 100% of the liquid ammonium sulfate produced at the Louisiana Plant. Wilson is a supplier of virgin chemicals to manufacturers in a variety of industries. Liquid ammonium sulfate is a co-product of the manufacturing of our biosuccinic acid. Wilson has agreed to purchase all of the liquid ammonium sulfate produced at the Louisiana Plant for a period of five years and three months, beginning in October 2011, which is automatically renewable for two year terms.
 
PARTNERSHIPS
 
Davy Process Technology
 
Davy develops licenses and advanced process technologies for the manufacture of oil and gas, petrochemicals, commodity chemicals, fine chemicals and pharmaceuticals. Davy is a developer and licensor of advanced process technologies for the commercial production of BDO and its derivatives tetrahydrofuran (THF), and gamma-buttyrolactone (GBL), which are all chemical intermediaries used in the manufacture of elastic fibers (Lycra®/Spandex®), polyurethanes and other plastics. Davy has licensed 11 BDO plants (18 trains) with an aggregate capacity in excess of 610,000 metric tons per year. The Davy licensed process has been used in approximately 50% of all new BDO capacity built since 1992.
 
On February 9, 2011, we signed a non-binding memorandum of understanding, or MOU, with Davy to enter into a definitive joint development agreement. The agreement would provide for the testing and approval of our biosuccinic acid as a drop-in feedstock replacement for petroleum-derived maleic anhydride within the Davy process. Under the proposed joint development agreement, Davy would perform, at its expense, all of the engineering,


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development and pilot plant work at its facilities in Teeside, England and, upon successful testing of our biosuccinic acid, guarantee that our biosuccinic acid will work for the production of BDO at commercial scale. This approach takes advantage of the existing BDO plants that use the Davy process, enabling them to use our biosuccinic acid in their production process without significant additional capital expenditure. This would provide us with an immediately available market for biosuccinic acid in existing and future BDO plants that use the Davy process to replace biosuccinic acid produced from MAN in the production of BDO, representing a market opportunity for our biosuccinic acid of 1.8 billion pounds per year. Our biosuccinic acid would enable Davy process licensees to reduce their exposure to petroleum price volatility and carbon footprint and sell a green product.
 
In addition, we are collaborating exclusively with Davy to integrate and optimize our biosuccinic acid technology with the Davy BDO technology for the production of biobased BDO. This development work will aim to further integrate and optimize our biosuccinic acid production process with Davy’s BDO production process by eliminating intermediate unit process operations. If successful, we believe this process integration would drive down our overall operating and capital costs for BDO applications, further enhancing our competitive position in this market.
 
The following graphic demonstrates the current integration of our process and the Davy process for the production of biobased BDO from sugar as well as the expected impact of our further integration and optimization:
 
(FLOW CHART)
 
The technology and know-how necessary to implement Stage 2 in the above graphic currently exist, but require further testing to validate and implement. The technology and know-how necessary to implement Stage 3 in the above graphic does not currently exist and would need to be developed.
 
Uhde GmbH, a subsidiary of the ThyssenKrupp Group
 
In September 2009 and October 2009, we signed two Alliance Agreements with Uhde and its U.S. subsidiary. Uhde an international engineering company focused on the design and construction of chemical, refining, and other industrial plants. Pursuant to the Alliance Agreements, we exclusively cooperate with each other in our research and development efforts to jointly develop and optimize our fermentation process and Uhde’s separation process for the production of biosuccinic acid in our planned production facilities, including at the Louisiana Plant. We also exclusively cooperate in our business development efforts to develop commercial scale biosuccinic acid plants globally, subject to certain conditions and limitations. Uhde has agreed to act exclusively as our engineering, procurement and construction contractor for commercial scale biosuccinic acid plants, except in certain limited circumstances. Under the terms of the Alliance Agreements, if an identified project requires the provision of process and performance guarantees, Uhde will be prepared to negotiate such guarantees on mutually agreeable terms, thus lowering our cost of capital by facilitating access to project finance.


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PTT Chemical International Private Limited
 
In January 2011, we closed a $60 million strategic equity investment by PTT Chemical International Private Limited, or CH Inter, our largest stockholder and a subsidiary of PTT Chemical Public Company Limited, or PTTCH, a large Thailand-based petrochemical producer, which investment resulted in net proceeds of $57.1 million. PTTCH, through its subsidiaries, produces and distributes various petrochemical and chemical products in Thailand and internationally. This investment creates a strategic relationship with a major petrochemical company in Asia that provides significant future partnering and commercial opportunities for us throughout Asia.
 
In addition, we intend to establish a joint venture company with PTTCH for the ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam), of which PTTCH would own 54% and we would own the remaining 46%. Under the proposed joint venture and licensing arrangement, we would grant a license to the joint venture company to commercialize our intellectual property exclusively within the ASEAN countries for which we would receive a technology transfer fee, royalty income, maintenance fees and our pro rata share of earnings of the joint venture company. Specifically, the joint venture company would sublicense our intellectual property for the production of biochemicals in the ASEAN countries. PTTCH would have the primary responsibility to develop, structure and scope the parameters of such projects for consideration by the joint venture company. We would have the right to participate in such projects as an equity investor or sponsor provided our investment in any such project was limited to our proportionate equity interest that we hold in the joint venture company. In every case, we would receive priority royalties and intellectual property maintenance fees from the projects for the use of our intellectual property.
 
The joint venture also calls for a research and development collaboration between PTTCH and us to, among other things, validate and optimize our biocatalysts and regional feedstocks in connection with our intellectual property for use in the ASEAN countries. By combining PTTCH’s presence, research and development capabilities and our technology and intellectual property, we believe that the joint venture will further drive technologies for the manufacturing of green chemicals using the abundant high quality biobased feedstocks available in Thailand and elsewhere in the ASEAN countries.
 
China National BlueStar
 
On May 10, 2011, we signed a memorandum of understanding with China National BlueStar (Group) Co. Ltd., or BlueStar, a Davy process licensee for the production of BDO. BlueStar is recognized as one of the leading BDO producers in Asia and will have 120,000 metric tons of butanediol production capacity in 2011 at its BDO plant in Nanjing, China. Pursuant to the memorandum of understanding, we intend to develop a proposal for the construction of a biosuccinic acid plant to be located adjacent to its plant and enter into an agreement for the exclusive supply of biosuccinic acid to BlueStar. This proposed jointly-owned biosuccinic acid plant would have the capacity to produce 220 million pounds of biosuccinic acid on an annual basis, of which 185 million pounds would be dedicated for use in BlueStar’s BDO plant. We would plan to sell the balance into the merchant market in that region.
 
Milestones Achieved and Commercialization Roadmap
 
Our principal commercial milestones achieved to date and our commercialization roadmap of future activities include:
 
     
Commercial License to Purac
May 2008
  We granted Purac, one of the world’s largest producers of lactic acid, a full royalty-bearing exclusive license to use our D(−) lactic acid strain technology to commercially produce D(−) lactic acid.
D(−) Lactic Acid Commercial Scale-Up
Summer 2008
  Our first D(−) lactic acid strain was scaled up to commercial scale (200,000 liter fermenters) at Purac’s facility in Spain.


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OmniGene Bioproducts Acquisition
July 2008
  We acquired equipment, organisms, intellectual property and know-how, including the proprietary strain development systems of OmniGene Bioproducts. In addition, we acquired the entire OmniGene team of scientists and engineers with a long track record of commercial success in molecular biology, cell biology and fermentation technology (e.g., invention of the process to manufacture riboflavin).
Successful Pilot Plant Fermentation
July 2009
  We completed our first successful pilot fermentation of biosuccinic acid to 5,000 liter fermenters at Wisconsin Bioproducts.
Uhde Exclusive Alliance
September / October 2009
  We signed a global exclusive partnership with Uhde for the design, engineering, procurement and construction of biosuccinic acid manufacturing plants and to provide process and performance guarantees on mutually agreed terms for such plants.
$50 Million Department of Energy Award
December 2009
  The U.S. Department of Energy awarded us $50 million in federal cost share funding for our Louisiana Plant, which was the only award focused exclusively on biobased chemicals rather than biofuels.
Biosuccinic Acid Scale-Up
   
December 2009
  We scaled our biosuccinic acid process using 20,000 liter fermenters while improving yield at the tolling plant owned by Fermic in Mexico City
Showa Denko Heads of Agreement
May 2010
  We entered into a non-binding Heads of Agreement with Showa Denko. Pursuant to that Heads of Agreement, we intend to establish a relationship in which Showa Denko would purchase our biosuccinic acid for use in polybutylene succinate, or PBS, production and we will work with Showa Denko to develop the North American market for PBS.
First Customer Commitment to Purchase Biosuccinic Acid
May 2010
  We signed a contract with TCC to supply all of its biosuccinic acid requirements with a target of 5 million pounds on an annual basis from our Louisiana Plant.
Second Customer Commitment to Purchase Biosuccinic Acid
June 2010
  We signed a contract with Haltermann to supply all of its succinic acid requirements of not more than 20 million pounds on an annual basis from our Louisiana Plant.
PTT Chemical International Private Limited (CH Inter) Strategic Investment
January 2011
  CH Inter, a subsidiary of PTTCH, a large Thailand-based petrochemical producer, made a $60 million strategic equity investment in us, which resulted in net proceeds of $57.1 million. We also agreed to establish a joint venture company to license our intellectual property for construction of biochemical plants in the ASEAN countries.
Third Customer Commitment to Purchase Biosuccinic Acid
January 2011
  We signed a contract with Piedmont to supply all of its succinic acid requirements with a target of 5 million pounds on an annual basis from our Louisiana Plant.

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Construction Phase of Louisiana Plant
January 2011
  We entered Budget Period 2, the construction phase (pursuant to the DOE award), of our Louisiana Plant.
Davy Exclusive Partnership
February 2011
  We signed a non-binding memorandum of understanding with Davy for the testing and approval of our biosuccinic acid technology as a drop-in feedstock replacement for petroleum-derived MAN within the Davy process for the production of biobased BDO. We are negotiating a joint development agreement with Davy to reflect the terms of this memorandum of understanding.
Customer Commitment to Purchase Liquid Ammonium Sulfate
April 2011
  We signed a contract with Wilson to supply it with all of the liquid ammonium sulfate produced at the Louisiana Plant.
China National BlueStar Memorandum of Understanding
May 2011
  We signed a memorandum of understanding with BlueStar to develop a proposal for the construction of a biosuccinic acid plant in Nanjing, China, and to enter into an agreement to be the exclusive supplier of biosuccinic acid to BlueStar.
Louisiana Plant Commercial Operations
First Quarter 2013
  We anticipate commencing commercial operations of the Louisiana Plant.
Louisiana Plant Expansion
First Quarter 2014
  We anticipate that the expanded Louisiana Plant, with an annual production capacity of over 170 million pounds, will become operational.
 
Our Production Capabilities
 
Scale-up and pilot plant operation
 
Over the past year and a half, we have produced 24 metric tons of biosuccinic acid in support of the sampling and testing programs of our current and prospective customers at the Fermic tolling plant primarily using their 20,000 liter fermenters while improving yield. To make these samples, we deployed a process from feedstock to product, validating process economics and generating the engineering data required for the construction of a commercial scale plant. The commercial scale-up of the Louisiana Plant represents a two fold scale-up from the fermentation already commercialized by Purac in the production of D(−) lactic acid based on our technology platform. All the separation and purification equipment used is off-the-shelf and is customarily used at even larger scale for other organic acids and sugar applications.
 
Louisiana Plant
 
We plan to complete construction of the Louisiana Plant and begin commercial operations during the first quarter of 2013. We have completed preliminary engineering and design planning with two multinational engineering, design and construction companies: Uhde, which built Purac’s largest lactic acid plant, and CH2M HILL, which built DuPont and Tate & Lyle’s biopropanediol plant. We, along with the Lake Providence Port Commission and the State of Louisiana, have previously made over $13 million in improvements to the site. The site has access to significant biomass feedstock providers as well as rail and barge transportation. The Department of Energy has conducted an Environmental Assessment of the project and has issued a “Finding of No Significant Impact” (FONSI) in December 2010. A state permit covering the Louisiana Plant’s industrial wastewater discharges has been issued, as has a minor source permit covering its air pollutant emissions. It is not believed that any federal air pollution control permits will be needed for the plant, given the limited amount of expected emissions.

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We plan to expand the Louisiana Plant to 170 million pounds from its initial 30 million pound annual production capacity and commence commercial operations by the end of the first quarter of 2014. We are identifying the demand for this additional capacity and are negotiating commercial supply agreements. We believe the current group of potential customers to which we are speaking will have demand in excess of the planned expansion capacity of the Louisiana Plant. The infrastructure for the 30 million pound Louisiana Plant includes certain design elements intended to support the expanded capacity of the plant.
 
We were awarded $50 million in 2009 by the U.S. Department of Energy, or DOE, in federal cost share funding under the American Recovery and Reinvestment Act of 2009 for the financing of the construction of the Louisiana Plant. We were chosen as the only biobased chemical-focused, as opposed to biofuels-focused, award recipient from hundreds of applicants. Current cash on hand, including the $15.2 million in construction cash contingency reserve that the DOE requires us to maintain for the project, and government funds, including $10 million in infrastructure improvements to be undertaken by the Lake Providence Port Commission and the State of Louisiana, will enable us to construct the 30 million pound Louisiana Plant. Under the terms of the award, we are required, and we intend, to use grain sorghum as the initial feedstock for a period of approximately 1,100 hours, which we do not anticipate will have an impact on our overall business plan. We procured the services of Vogelbush USA under the terms of a services agreement entered into in March 2010 for the process engineering necessary to convert the grain sorghum into fermentable sugars. The DOE award is structured as a cost-share funding arrangement. During each design, construction and operational phase, we submit certain of our plant-related expenses for reimbursement by the DOE. The DOE matches our expenditures related to the plant, including research and development and certain other indirect corporate costs, up to a predetermined limit during each phase, not to exceed $50 million in the aggregate. This award was made in two phases. The first phase of engineering and piloting, referred to as Budget Period 1, or BP1, was completed on December 31, 2010 and we have received $10.4 million, the maximum amount allowed for BP1. The second construction phase, referred to as Budget Period 2, or BP2, with an allowable amount of $39.6 million, is ongoing. Costs eligible for reimbursement in BP2 include those related to the Louisiana Plant’s construction, equipment purchases, testing and operation. As of June 30, 2011, we have received approximately $1 million of the $39.6 million allowable under the award for BP2.
 
Future Manufacturing Facilities
 
We recognize the importance of establishing biochemical facilities located in close proximity to our customers and are developing additional manufacturing plants.
 
We signed a memorandum of understanding with China National BlueStar (Group) Co. Ltd., or BlueStar, a Davy process licensee for the production of BDO, on May 10, 2011. BlueStar is recognized as one of the leading BDO producers in Asia and will have 120,000 metric tons of butanediol production capacity in 2011 at its plant in Nanjing, China. Pursuant to the memorandum of understanding, we intend to develop a proposal for the construction of a jointly-owned biosuccinic acid plant to be located adjacent to BlueStar’s BDO plant in Nanjing, China, and to enter into an agreement to be the exclusive supplier of biosuccinic acid to BlueStar. This proposed biosuccinic acid plant would have the capacity to produce 220 million pounds of biosuccinic acid on an annual basis, of which 185 million pounds would be dedicated for use in BlueStar’s BDO plant. We would plan to sell the balance into the merchant market in that region.
 
We are also negotiating a letter of intent with Uhde for an industrial biochemical facility for the production of biosuccinic acid at the Infraleuna Chemical Site in Leuna, Germany. The plant, which we expect would commence operations in the first half of 2012, would utilize our technologies to produce biosuccinic acid and ammonium sulfate in accordance with our product specifications. In its first year of operation, we expect the plant would produce 500 tons of biosuccinic acid and 600 tons of ammonium sulfate. The plant would be owned and operated by Uhde and we would purchase the biosuccinic acid and ammonium sulfate produced by Uhde in accordance with our specifications. To date, we have begun the technical analysis in conjunction with Uhde in order to ready the plant for its intended purpose.
 
As part of our strategic relationship with CH Inter and PTTCH, we are evaluating feedstocks and markets for the construction of a plant in an ASEAN country to support PTTCH’s interest in BDO, PBS and other potential chemical markets. We are also continuing to evaluate the potential for the development of additional


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biochemical manufacturing plants in a variety of locations, including other parts of greater China, including Taiwan, and Korea based on a number of factors, including customer demand, feedstock accessibility, potential partners, and access to capital.
 
INTELLECTUAL PROPERTY
 
Our success depends in part on our proprietary technology for which we seek intellectual property protection under patent, copyright, trademark and trade secret laws and by contract through confidentiality agreements, and our ability to operate without infringing the proprietary rights of third parties. Intellectual property protection of our technology is important so that we may offer our customers and partners proprietary products and services that are not available from our competitors and so that we can exclude our competitors from using technology that we have developed or exclusively licensed from third parties. If competitors in our industry have access to the same technology as we do, our competitive position may be adversely affected.
 
As of August 10, 2011, we have filed three United States provisional patent applications and seven patent applications under the Patent Cooperation Treaty. These patent applications cover our technology, including biocatalysts and methods for making our products, which support our chemical intermediates business. In addition to our patent portfolio, we maintain significant trade secrets and know-how related to processes and systems for producing our products.
 
As of August 10, 2011, we have exclusively licensed rights to three granted United States Patents and 33 pending patent applications (including 12 national stage applications being filed) in the United States and various foreign jurisdictions, which licenses expire between November 5, 2023 and November 21, 2031. These licensed patents and patent applications are owned by the University of Florida and cover enabling technology, including biocatalysts and methods for the production of lactic acid, biosuccinic acid, malic acid, acetic acid and pyruvic acid. Our licenses allow us to freely practice the licensed invention.
 
We and our leadership have a long-standing working relationship with the University of Florida for the development of technology related to our business. We financially support research at the University of Florida that is related to our business under a Research Agreement and have a first option to license, non-exclusively or exclusively at our election, any and all technology developed under the Research Agreement. We cannot assure you that additional technology will be developed under the Research Agreement, or that we will exercise our option to license any such technology.
 
We are aware of U.S. patents issued to third parties that relate to biocatalysts and methods of using biocatalysts to produce succinic acid. We believe that the properly construed claims of the U.S. patents do not cover the biocatalyst or processes we use to produce biosuccinic acid. If it is determined that they do encompass our biocatalyst or processes, we will likely be required to seek a license to these patents. We are also aware of published U.S. and international patent applications that are owned by third parties, which relate to various biocatalysts, and methods for making and using biocatalysts to produce succinic acid.
 
We cannot assure you that we will be successful in obtaining licenses to the technology of third parties that may be required or desirable to conduct our business in the future, or that such technology can be licensed on terms agreeable to us and at a reasonable cost. Our business may be adversely affected if we are not successful in obtaining such licenses. It is possible that the parties that currently license or sublicense patents to us, or patents which we may later acquire, license or sublicense, may be successfully challenged or invalidated in whole or in part. It is also possible that we may not obtain issued patents from our filed applications, and may not be able to obtain patents that cover other inventions we seek to protect. Under appropriate circumstances, we may sometimes permit certain intellectual property to lapse or go abandoned.
 
Due to uncertainties inherent in prosecuting patent applications, sometimes patent applications are rejected and we may subsequently abandon them. It is also possible that we may develop products or technologies that will not be patentable or that the patents of others will limit or preclude our ability to do business. In addition, any patent issued to us may provide us with little or no competitive advantage, in which case we may abandon such patent or license it to another entity. Our efforts to protect our proprietary rights may not be adequate and our competitors may independently develop technology or products that are similar


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to or compete with ours. Patent, trademark and trade secret laws afford only limited protection for our technology platform and products. The laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the U.S. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to operate using aspects of our intellectual property or products or to obtain and use information that we regard as proprietary. Third parties may also design around our proprietary rights, which may render our protected technology and products less valuable. In addition, if any of our products or technologies is covered by third-party patents or other intellectual property rights, we could be subject to various enforcement, infringement or other legal actions. We cannot assure you that our technology platform, biocatalysts, processes and products do not infringe patents held by others or that they will not in the future.
 
Some of our technology is dependent upon proprietary information that is developed through the knowledge, skills and expertise of our scientific, research and technical personnel, which are not patentable. We require our employees, advisors, and consultants to execute confidentiality and invention assignment agreements upon commencing a relationship with us, to protect our rights to and maintain the confidentiality of our trade secrets and other proprietary information. These agreements prohibit unauthorized disclosure of confidential information, require assignment of inventions and require disclosure of certain information, including discoveries, ideas and inventions, made or developed by our employees, advisors, and consultants. We cannot assure you that these agreements will not be breached, or that our trade secrets and proprietary information will not become known to others or independently developed by others.
 
Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement, invalidity, misappropriation or other allegations. Any such litigation could result in substantial costs and diversion of our resources.
 
As of August 10, 2011, our trademark applications for “Myriant Technology”, “Myriant”, “Chemistry Refined Naturally” and a logo design have been allowed at the United States Patent and Trademark Office. The trademark “Myriant” has been registered in the European Union.
 
COMPETITION
 
We expect that our products will compete in the industrial biochemicals market. The major U.S. and European companies in this market include BioAmber, Royal DSM N.V. (through a joint venture with Roquette Fréres S.A.), BASF (through a partnership with Purac) and Genomatica. We believe that our products will also compete in the broader petrochemical market.
 
We believe that the primary competitive factors in the biobased chemicals market are:
 
• cost of production;
 
• capital requirements;
 
• feedstock flexibility;
 
• technology, including yields and productivity;
 
• ability to develop drop-in and replacement products for existing large markets; and
 
• ability to reach commercial production levels.
 
We believe that the primary competitive factors in the global petrochemicals market are:
 
• cost of production;
 
• capital requirements;
 
• the price and reliability of the supply of feedstock; and
 
• technology, including production yields.


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Our competitors include large chemical companies. Many of these are better capitalized, with larger research and development departments and budgets, and have well-developed distribution systems and networks for their products. These companies have relationships with our potential customers and have sales and marketing programs in place to promote their products.
 
FACILITIES
 
Louisiana Plant
 
On June 16, 2011, Myriant Lake Providence, Inc., our wholly-owned subsidiary, entered into a lease (superceding and replacing all prior agreements between the parties, their predecessors and affiliates) with the Lake Providence Port Commission, a political subdivision of the State of Louisiana, for the premises located at 420 Port Road, Lake Providence, Louisiana. The primary term of the lease is for a period commencing on June 16, 2011, and continuing 20 years, subject to extension by the Company for two additional terms of 10 years each.
 
Laboratories
 
Our research and development activities are concentrated in a 17,760 square foot laboratory located in Woburn, Massachusetts. The lease for the laboratory expires in March 2013. The Woburn laboratory is equipped to conduct numerous types of genetic engineering work to develop new biocatalysts for the production of a number of biochemicals and testing the yield and productivity of those new biocatalysts. In addition, the Woburn laboratory has equipment required for the processing of various biomass feedstocks and downstream processing of fermentation broth to recover various biochemicals. Moreover, we are also engaging contract research laboratories and academic institutions to address specific technical issues in its developmental programs.
 
Headquarters
 
Our corporate headquarters are located in Quincy, Massachusetts, where we occupy approximately 11,000 square feet of office space. The lease for the Quincy headquarters expires in January 2012.
 
REGULATORY OVERVIEW
 
We are subject to various federal, state and local environmental laws and regulations, including those relating to pollutant discharges into the environment, the management of hazardous materials, the protection of endangered species and the health and safety of our employees. These laws and regulations require the procurement of environmental permits in addition to those already in place and compliance with health, safety and environmental requirements for construction and operation of our Louisiana Plant. In addition, future expansion of the plant may require installation of pollution control equipment and implementation of operational changes to limit environmental impacts that are significant in cost. Furthermore, such laws, regulations and permit conditions can result in substantial liabilities and the potential for permit revocations and facility shutdowns.
 
In addition to actual plant operations, liabilities could arise from investigation and cleanup of environmental contamination at the plant or at an off-site location where we arranged for the disposal of hazardous substances generated at the Louisiana Plant. We may also be subject to third party claims alleging property damage or personal injury due to the release of or exposure to such hazardous substances. However, we are not aware of any material environmental liabilities relating to contamination at the Louisiana Plant site which is situated on previously undeveloped property.
 
In addition, new laws, new regulations, new interpretations of existing laws or regulations, future governmental enforcement of environmental laws or other developments could result in significant expenditures. For example, promulgation of a more stringent standard for an existing source of air pollution, or of a standard for a newly identified pollutant, could trigger a significant expenditure for procurement and operation of pollution control equipment where emissions of the pollutant from the Louisiana Plant exceed the relevant applicability threshold. Future construction of a new facility, or expansion of the Louisiana Plant, also might


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trigger application of new standards not relevant in the past, like those governing hazardous air pollutants. Such standards may also limit our operational flexibility.
 
As a condition to granting the permits necessary for operating our facilities, regulators could likewise make demands that increase our construction and operating costs, and result in the procurement of additional financing. In addition, failure to obtain and comply with all applicable permits and licenses could halt construction and subject us to future claims. We therefore cannot guarantee procurement or compliance with the terms of all permits needed to complete our Louisiana Plant.
 
EMPLOYEES
 
As of August 10, 2011, we had 68 employees, of which 37 were engaged in research and development activities. Of the 37 individuals engaged in research and development activities, 18 of them have Ph.D. degrees. Based on our current business plan, we expect to increase the number of employees significantly, particularly in the areas of research and development and engineering and operations. None of our employees are represented by a labor union and we consider our employee relations to be good.
 
STRATEGIC AND SCIENTIFIC ADVISORY PANELS
 
We have formed both a Strategic Advisory Panel and a Scientific Advisory Panel. While members of these panels do not participate in managing our operations, they provide us with advice, insights, contacts and other assistance based on their extensive experience and expertise.
 
Strategic Advisory Panel
 
The company’s Strategic Advisory Panel advises the company’s board of directors and management on the company’s strategic decision making process and other matters, including business and organizational development, technology, policy and outreach. Members of our Strategic Advisory Panel enter into a Strategic Advisory Panel Agreement with us upon their appointment. This agreement is for a term of one year and is automatically renewable for additional one year periods unless either the panel or the member provides notice at least 10 days prior to the anniversary date. Additionally,