Michael Kanellos 04 30 09, 1:15 PM

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Update: Where is Sapphire Energy’s $100M?

Sapphire Energy, which wants to make fuel out of genetically modified algae, is one of the five or six of the 50 or so algae companies worth following. It is taking an interesting and arguably controversial approach to raising algae -- it wants to raise genetically modified algae in open ponds, a feat that some competitors argue will be difficult. It also wants to harvest hydrocarbons straight from algae, not a lipid like most everyone else. This could save a few expensive refining steps.

Earlier this year, Sapphire provided algae fuel to a Continental test flight, but the algae didn't come from Sapphire's process. Instead, it came from a Hawaiian company that vehemently eschews genetic modification.

Just as important as the science, it has had tremendous success in raising money from top-notch firms. Last year, it announced it has raised over $100 million from investors, including Venrock, Arch Ventures and Cascade Investment (the venture arm of the Gates family).

But when you look at the documents filed with the SEC, the $100 million isn't fully documented. So far, Sapphire has filed only to Reg D forms, which private companies are supposed to file 15 days after getting funds. Look at Optisolar's Reg D filings and you can chart the progress of how that that company raised $322 million.

One of the Reg D forms is dated December 27, 2007 stating that it sold approximately $3 million worth of shares to two investors. Another from July 2007 states that it sold about $1 million worth of shares.

So where is the paper for the remaining $97 million? A spokeswoman for Sapphire said that the company was granted "an exclusion." She could not elaborate further but said she would get back to us. The money, however, has been raised, she added, and it is not contingent upon Sapphire hitting scientific milestones.

Here is the update from Tim Zenk, Vice President, Corporate Affairs, Sapphire Energy.

“As we have publicly stated on September 17, 2008,  Sapphire Energy had raised substantially more than $100 million.  Sapphire’s investors include ARCH Venture Partners, Wellcome Trust, Venrock and Cascade Investment, LLC. We felt it was more effective to make a public statement about our primary funding sources as a means to validate the  financial depth of Sapphire Energy.  Additionally, our funding is not dependent on reaching specific milestones nor is it a tranche arrangement.   Other than to reiterate previously made public statements approved by the management and its board of directors, Sapphire Energy’s policy is to not comment on company financial matters, either past, present or future.”

Reg D is fairly easy to avoid, said David Niebauer, a securities lawyer in San Francisco. The SEC doesn't enforce violations.

Still, "public statements should be consistent with Reg D filings," he said. After all, why decline to state something on an official form (that doesn't require much disclosure) that you've already said publicly.