<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)

/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended June 30, 2000

                                       OR

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from ________ to ___________

                         Commission file number: 0-21130


                        ENCHIRA BIOTECHNOLOGY CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                             04-3078857
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

4200 Research Forest Drive
The Woodlands, Texas                                         77381
(address of principal executive offices)                     (zip code)

                                    281-419-7000
                (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No __


         As of August 1, 2000, there were outstanding 7,037,912 shares of Common
Stock, par value $.01 per share, of the registrant.


<PAGE>


                        ENCHIRA BIOTECHNOLOGY CORPORATION


                  FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2000

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                   <C>
Factors Affecting Forward-Looking Statements                                                           3

PART I.                 FINANCIAL INFORMATION

Item 1.                 Financial Statements                                                           4

                        Balance Sheets as of June 30, 2000 (Unaudited)                                 5
                        and December 31, 1999

                        Statements of Operations for the Three and Six Months                          6
                        Ended June 30, 2000 and 1999 (Unaudited)

                        Statements of Cash Flows for the Six Months Ended                              7
                        June 30, 2000 and 1999 (Unaudited)

                        Notes to Financial Statements                                                  8

Item 2.                 Management's Discussion and Analysis of Financial                             10
                        Condition and Results of Operations

PART II.                OTHER INFORMATION

Item 1.                 Legal Proceedings                                                             13

Item 4.                 Submission of Matters to a Vote of Security Holders                           13

Item 6.                 Exhibits and Reports on Form 8-K                                              14

SIGNATURES                                                                                            16

</TABLE>


                                       2
<PAGE>

                  FACTORS AFFECTING FORWARD-LOOKING STATEMENTS

         This Quarterly Report on Form 10-Q includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The
words "anticipate", "believe", "expect", "estimate", "project" and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks, uncertainties and assumptions. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
believed, expected, estimated or projected. These risks and uncertainties
include technological uncertainty and risks associated with the
commercialization of the Company's technology, the pending dispute and
arbitration with Maxygen relating to the Company's rights to its RACHITT
technology, the Company's history of operating losses and uncertainty of future
profitability, manufacturing risks and uncertainties, uncertainty of market
acceptance of the Company's technology, the Company's reliance on environmental
regulations, uncertainties as to the protection offered by the Company's patents
and proprietary technology, the Company's dependence on collaborations, the
Company's need for additional funds, limited marketing experience and dependence
on key personnel, government regulations, competition and other risks and
uncertainties described in the Company's filings with the Securities and
Exchange Commission. For additional discussion of such risks, uncertainties and
assumptions ("Cautionary Statements"), see "Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" included elsewhere in this report and "Item 1. Business -
Risk Factors" in the Company's Annual Report on Form 10-K (filed as Energy
BioSystems Corporation) for the year ended December 31, 1999 ("1999 Form 10-K").
All subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements.


                                        3
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         The following unaudited financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made herein are adequate to make the
information presented not misleading. These financial statements should be read
in conjunction with the 1999 Form 10-K.

         The information presented in the accompanying financial statements is
unaudited, but in the opinion of management, reflects all adjustments (which
include only normal recurring adjustments) necessary to present fairly such
information.


                                       4
<PAGE>


                        ENCHIRA BIOTECHNOLOGY CORPORATION

                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                          June 30,            December 31,
                                                                            2000                  1999
                                                                      ---------------      ---------------
                                                                        (Unaudited)
     ASSETS
Current Assets:
<S>                                                                       <C>                <C>
     Cash and cash equivalents                                            $ 2,390,987        $   2,510,274
     Short-term investments                                                 1,500,000            3,445,199
     Prepaid expenses and other current assets                                512,524              143,014
                                                                      ---------------      ---------------
         Total current assets                                               4,403,511            6,098,487

Furniture, equipment and leasehold improvements, net                          812,137              926,684
Intangible and other assets, net                                            1,134,255            1,038,927
                                                                      ---------------      ---------------
         Total assets                                                     $ 6,349,903         $  8,064,098
                                                                      ===============      ===============

     LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued liabilities                           $     261,182       $      327,150
     Short term capital lease                                                  11,684                   --
     Deferred revenue                                                         730,000              180,000
     Note payable                                                              28,784                  --
                                                                      ---------------     ----------------
         Total current liabilities                                          1,031,650              507,150


Long term capital lease                                                        64,847                   --

Stockholders' equity:
     Series B Convertible Preferred Stock, $0.01 par value
        (liquidation value $35,105,000; 760,000 shares
        authorized, 395,700 and 519,400 shares,
        respectively, issued and outstanding)                              22,812,507           28,100,250
     Common Stock, $0.01 par value (30,000,000 shares
        authorized, 7,034,921 and 6,572,135 shares,
        respectively, issued and outstanding)                                  70,349               65,721
     Additional paid-in capital                                            60,962,820           54,470,252
     Accumulated deficit                                                  (78,592,270)         (75,079,275)
                                                                       --------------       --------------
        Total stockholders' equity                                          5,253,406            7,556,948
                                                                       --------------       --------------
        Total liabilities and stockholders' equity                      $   6,349,903         $  8,064,098
                                                                       ==============       ==============


           The accompanying notes are an integral part of these financial statements.
</TABLE>

                                                           5
<PAGE>


                        ENCHIRA BIOTECHNOLOGY CORPORATION

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                     Three Months Ended                   Six Months Ended
                                                          June 30,                            June 30,
                                                  2000              1999              2000               1999
                                             ----------------  ----------------  ----------------   ---------------
REVENUES:
<S>                                                 <C>             <C>                 <C>             <C>
    Sponsored research and licensing
       revenues                                     $ 70,468         $ 514,063          $358,165         $1,024,936

    Interest and investment income                    54,463            20,197           125,439             41,343
                                              ---------------   ---------------   ---------------    --------------

          Total revenues                             124,931           534,260           483,604          1,066,279

COSTS AND EXPENSES:
    Research and development                         979,208         1,067,728         1,985,671          2,669,104
    General and administrative                       543,533           465,549         1,015,121          1,012,597
                                              ---------------   ---------------   ---------------    --------------

          Total costs and expenses                 1,522,741         1,533,277         3,000,792          3,681,701
                                              ---------------   ---------------   ---------------    --------------

NET LOSS                                         $(1,397,810)       $ (999,017)      $(2,517,188)       $(2,615,422)
                                              ===============   ===============   ===============    ==============

NET LOSS PER COMMON SHARE -
    basic and diluted                              $   (0.28)        $   (0.56)        $   (0.55)         $   (1.60)
                                              ===============   ===============   ===============    ==============

SHARES USED IN COMPUTING
    NET LOSS PER COMMON SHARE - basic and
    diluted                                        7,026,388         3,153,783         6,838,391          2,669,523
                                                   =========         =========         =========          =========

           The accompanying notes are an integral part of these financial statements.
</TABLE>
                                                            6
<PAGE>


                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                     Six Months Ended
                                                                                         June 30,
                                                                          ----------------------------------------
                                                                                 2000                1999
                                                                          ------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                          <C>                 <C>
      Net loss                                                               $ (2,517,188)       $ (2,615,422)
      Adjustments to reconcile net loss to net cash provided by
         (used in) operating activities:
           Depreciation and amortization                                          233,574             405,623
           Issuance of common stock for services                                   25,000               5,000
      Changes in assets and liabilities:
           Increase in prepaid expenses and other
               current assets                                                    (369,510)           (103,631)
           Decrease in accounts payable and accrued
               liabilities                                                        (65,968)           (360,351)
           Increase in deferred revenue                                           550,000                  --
                                                                          ------------------- --------------------
        Net cash used in operating activities                                  (2,144,092)         (2,668,781)
                                                                          -------------------- -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                                                        (24,496)            (27,292)
      Patent expenditures                                                        (113,328)           (112,380)
      Sale of investments                                                       1,945,199                  --
                                                                          ------------------- --------------------
         Net cash provided by (used in) investing activities                    1,807,375            (139,672)
                                                                          ------------------- --------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      (Payments) proceeds on notes payable, net                                    28,784             (84,409)
      Issuance of stock and warrants                                              188,646           7,539,321
                                                                          ------------------- --------------------
         Net cash provided by financing activities                                217,430           7,454,912
                                                                          ------------------- --------------------

NET INCREASE (DECREASE) IN CASH AND CASH
      EQUIVALENTS                                                                (119,287)          4,646,459
CASH AND CASH EQUIVALENTS AT BEGINNING OF
      PERIOD                                                                    2,510,274           2,795,429
                                                                          ------------------- --------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                   $  2,390,987        $  7,441,888
                                                                          =================== ====================

           The accompanying notes are an integral part of these financial statements.
</TABLE>


                                       7
<PAGE>

                      ENCHIRA BIOTECHNOLOGY CORPORATION


                         NOTES TO FINANCIAL STATEMENTS
                                 JUNE 30, 2000

NOTE 1.  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

     Enchira Biotechnology Corporation ("EBC" or the "Company"), formerly
Energy BioSystems Corporation, was incorporated in the State of Delaware on
December 20, 1989, and commenced operations in January 1990. EBC is a
biotechnology company incorporating genetic recombination, high throughput
screening and bioprocessing in an integrated, directed evolution technology
platform. The Company believes that this proprietary platform technology can
be used to generate libraries of novel genes for the creation of improved
enzymes for a broad range of applications, such as protein-based
pharmaceuticals, agricultural crop enhancement and protection products, and
industrial enzymes for the manufacture of specialty chemicals, fine chemicals
and pharmaceutical intermediates. EBC believes that the proprietary platform
technology will greatly accelerate the development of a commercial
biocatalyst for its biocatalytic desulfurization ("BDS"), a proprietary
process involving the use of enzymes in bacteria to remove sulfur from
petroleum.

     EBC has discovered that its proprietary biocatalytic technology may also
provide an economic basis for production of a broad family of industrial
organosulfur chemicals with potential uses in detergent, surfactant, polymer
and adhesive markets. Joint development and testing agreements were executed
with several major chemical companies for detailed evaluation of these
products in specific commercial applications, and EBC is pursuing strategic
business alliances for commercialization of this technology.

     On April 27, 2000, the Company received notice from Maxygen Inc. that
they had elected to seek arbitration under the License and Development
Agreement dated May 19, 1997 between the Company and Maxygen. Maxygen claims
that the Company used Maxygen's confidential information which they allege
was provided to the Company under the Agreement to develop its own
RACHITT(TM) directed evolution technology. The Company denies all allegations
of Maxygen and believes that its technology was independently developed after
the collaboration with Maxygen ceased. Arbitration is set to begin in
November, 2000. The Company believes that there is no merit to the
allegations brought against it by Maxygen and believes the action will not
have a material adverse affect on the financial statements. However, the
Company cannot assure that its defense will be substantially successful, if
at all. If the Company is not successful, its business could be materially
and adversely affected and the Company could be required to enter into cross
license agreements, pay a substantial amount in damages or otherwise have its
proprietary rights in directed evolution technology adversely affected.

     The accompanying unaudited interim financial statements reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the results for the interim periods presented. These
financial statements should be read in conjunction with the 1999 Form 10-K.

Revenue Recognition

         In May 2000, the Company entered into a licensing agreement with
Genencor International, Inc. ("Genencor") involving EBC's proprietary gene
shuffling technology for directed evolution. Under the agreement,

                                       8

<PAGE>

                      ENCHIRA BIOTECHNOLOGY CORPORATION

                  NOTES TO FINANCIAL STATEMENTS - (CONTINUED)

Genencor will use the Company's proprietary RACHITT(TM) technology to develop
gene-based products for the cleaning, textiles, grain processing, animal feed
and food ingredients industries. An initial licensing fee and an additional
fee for an option to expand the licensing field were paid by Genencor in June
2000. Revenues received under the licensing agreement during the second
quarter of 2000 have been deferred.

     Sponsored research revenue is recognized based on the percentage of
total research payments to be received in relation to the total research and
development costs to be incurred under specific research agreements. In
December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin 101, "Revenue Recognition in Financial Statements" ("SAB
101") which provides guidance related to revenue recognition. EBC is required
to adopt SAB 101 by the fourth quarter of 2000. Upon its adoption, SAB 101
will be effective as of January 1, 2000, at which time EBC will report any
changes in revenue recognition as a cumulative change in accounting
principle. EBC is currently evaluating the impact of SAB 101 on its financial
position and results of operations.

Net Loss Per Common Share

     Net loss per share has been computed by dividing the net loss, which has
been increased for periodic accretion and accrued dividends on the Series B
Convertible Preferred Stock issued in February and March 1997, by the
weighted average number of shares of common stock outstanding during the
period.

NOTE 2.  SERIES B CONVERTIBLE PREFERRED STOCK

     Shares of Series B Preferred Stock are convertible into shares of common
stock at an adjusted conversion price equal to $20.06 per share, subject to
certain adjustments. The Series B Preferred Stock may be redeemed by the
Company under certain circumstances after February 26, 1999 and is required
to be redeemed, subject to certain limitations, on February 26, 2002 at a
redemption price of $50.00 per share, plus accrued and unpaid dividends. It
is the Company's present intent, however, to redeem the Series B Preferred
Stock for common stock, subject to certain requirements. Accordingly, the
Series B Preferred Stock is included in stockholders' equity. During the
first six months of 2000, 123,700 shares of Series B Preferred Stock were
converted to 308,322 shares of common stock.

         As of June 30, 2000, 306,400 aggregate shares of Series B Preferred
Stock had been converted to 522,011 shares of common stock. Dividends on the
Series B Preferred Stock are cumulative from the date of the initial closing,
February 27, 1997, and are payable, at the Company's election, in cash or
common stock of the Company, or a combination thereof, at an annual rate
equal to (i) $4.00 per share to the extent the dividend is paid in cash and
(ii) $4.50 per share to the extent the dividend is paid in common stock. The
Company has not declared a dividend payment since November 1998, and has not
paid dividends on Series B Preferred Stock except on conversion of Series B
Preferred Stock to common stock.

                                       9

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

         Since its inception in December 1989, the Company has devoted
substantially all resources to its research and development. To date, all of
the Company's revenues have resulted from interest and investment income and
sponsored research payments from collaborative agreements. The Company has
incurred cumulative net losses since inception and expects to incur
substantial losses for at least the next several years, due primarily to its
research and development activities and the development of its directed
evolution technology, organosulfur compounds, and biocatalyst development.
The Company expects that losses will fluctuate from quarter to quarter and
that such fluctuations may be substantial. As of June 30, 2000, the Company's
accumulated deficit was $78,592,270.

RESULTS OF OPERATIONS

         The Company had total revenues for the three months ended June 30,
2000 and 1999 of $124,931 and $534,260, respectively. The decrease in total
revenues was attributable to decreases in sponsored research revenues offset
in part by increases in interest and investment income. The Company had
sponsored research revenues of $70,468 during the second quarter of 2000 as
compared to $514,063 during the second quarter of 1999. The decrease of
$443,595 in sponsored research revenues resulted from a decrease in sponsored
research revenue received under a Department of Energy ("DOE") grant.

         The Company had total revenues for the six months ended June 30,
2000 and 1999 of $483,604 and $1,066,279, respectively. The decrease in total
revenues was attributable to decreases in sponsored research revenues offset
in part by increases in interest and investment income. The Company had
sponsored research revenues of $358,165 during the first six months of 2000
as compared to $1,024,936 during the first six months of 1999. The decrease
of $666,771 in sponsored research revenues resulted from the decrease in
sponsored research revenues from a DOE grant.

         The Company had interest and investment income for the three months
ended June 30, 2000 and 1999 of $54,463 and $20,197, respectively and for the
six months ended June 30, 2000 and 1999 of $125,439 and $41,343,
respectively. The increases of $34,266 and $84,096, respectively, for the
three and six months ended June 30, 2000 as compared to the corresponding
prior year periods resulted primarily from an increase in the available cash
from which interest and other investment income are generated.

          The Company had research and development expenses for the three months
ended June 30, 2000 and 1999 of $979,208 and $1,067,728, respectively, and for
the six months ended June 30, 2000 and 1999 of $1,985,671 and $2,669,104,
respectively. The decrease in research and development expenses of $88,520 and
$683,433, respectively, for the three and six months ended June 30, 2000 as
compared to the corresponding prior year periods resulted primarily from a
reduction in research and development personnel at the end of the first quarter
of 1999. See "Liquidity and Capital Resources" below for additional discussion.
The Company expects its research and development expenses to remain below 1999
levels for the remainder of 2000,

                                       10

<PAGE>

reflecting a decrease in the number of research and development personnel due
to attrition and a change in the primary focus of the research and
development to the directed evolution technology.

         The Company had general and administrative expenses for the three
months ended June 30, 2000 and 1999 of $543,533 and $465,549, respectively,
and for the six months ended June 30, 2000 and 1999 of $1,015,121 and
$1,012,597, respectively. The increases of $77,984 and $2,524, respectively,
for the three months and six months ended June 30, 2000 as compared to the
corresponding periods in 1999, resulted primarily from increased use of
consultants and additional legal expenses offset in part by the reduction of
the general and administrative personnel at the end of the first quarter of
1999 and subleasing of office space in June 1999. The Company expects a
slight increase from 1999 levels in its general and administrative expenses
during the remainder of 2000, reflecting its intention to hire additional
personnel in the later part of 2000.

LIQUIDITY AND CAPITAL RESOURCES

     As of June 30, 2000, 306,400 shares of Series B Preferred Stock had been
converted to 522,011 shares of common stock. Dividends on the Series B
Preferred Stock are cumulative from the date of the initial closing, February
27, 1997, and are payable, at the Company's election, in cash or common stock
of the Company, or a combination thereof, at an annual rate equal to (i)
$4.00 per share to the extent the dividend is paid in cash and (ii) $4.50 per
share to the extent the dividend is paid in common stock. The Company has not
declared a dividend payment since November 1998, and has not paid dividends
on Series B Preferred Stock except on conversion of Series B Preferred Stock
to common stock.

      For the six months ended June 30, 2000, the Company used $2,144,092 in
operating activities, incurred $137,824 in capital and patent expenditures
and provided $217,430 in financing activities. At June 30, 2000, the Company
had cash, cash equivalents and short-term investments totaling $3,890,987 and
working capital of $3,371,861.

     The Company expects to incur substantial additional research and
development expenses, including expenses associated with its directed
evolution technology, organosulfur compounds, and biocatalyst development. In
addition, the Company is subject to cost sharing arrangements under various
collaboration agreements.

     In May 2000, the Company entered into a licensing agreement with
Genencor involving EBC's proprietary gene shuffling technology for directed
evolution. Under the agreement, Genencor will use the Company's proprietary
RACHITT(TM) technology to develop gene-based products for the cleaning,
textiles, grain processing, animal feed and food ingredients industries. An
initial licensing fee and an additional fee for an option to expand the
licensing field were paid by Genencor in June 2000. Revenues received during
the second quarter of 2000 have been deferred.

     In October 1999, the DOE approved the third year of funding to the
Company of approximately $1.0 million for a program dedicated to the
development of a BDS application for gasoline. Through June 30, 2000 the
Company has recognized approximately $2.3 million in sponsored research
revenue from the grant, of which $385,842 was receivable at June 30, 2000.


                                       11

<PAGE>

     The Company has experienced negative cash flow from operations since its
inception and has funded its activities to date primarily from equity
financings and sponsored research revenues. The Company will continue to
require substantial funds to continue its research and development activities
and to market, sell and commercialize its technology. The Company believes
that its available cash, investments and interest income will be adequate to
fund its operations through mid-2001. The Company will require additional
financing by mid-2001 to meet its operating cash flow needs and enable it to
continue as a going concern. Should the Company be unsuccessful in raising
adequate funds on a timely basis, the Company's common stock could be subject
to being delisted from the NASDAQ National Market.

     The Company's capital requirements will depend on many factors,
including the problems, delays, expenses and complications frequently
encountered by companies developing and commercializing new technologies; the
progress of the Company's research and development activities; timing of
environmental regulations; the rate of technological advances; determinations
as to the commercial potential of the Company's technology under development;
the status of competitive technology; the outcome of the Maxygen dispute; the
establishment of biocatalyst manufacturing capacity or third-party
manufacturing arrangements; the establishment of collaborative relationships;
the success of the Company's sales and marketing programs; the cost of
filing, prosecuting and defending and enforcing patents and intellectual
property rights and of defending the Maxygen claims; and other changes in
economic, regulatory or competitive conditions in the Company's planned
business. Estimates about the adequacy of funding for the Company's
activities are based upon certain assumptions, including assumptions that the
research and development programs relating to the Company's technology can be
conducted at projected costs and that progress towards the commercialization
of its technology will be timely and successful. There can be no assurance
that changes in the Company's research and development plans, acquisitions or
other events will not result in accelerated or unexpected expenditures. To
satisfy its capital requirements, the Company may seek additional funding
through various alternatives that include: an equity financing, government
funding, and alliances with chemical companies and corporate partners. There
can be no assurance that any such funding will be available to the Company on
favorable terms or at all. If adequate funds are not available when needed,
the Company may be required to delay, scale back or eliminate some or all of
its research and product development programs. If the Company is successful
in obtaining additional financing, the terms of such financing may have the
effect of diluting or adversely affecting the holdings or the rights of the
holders of the Company's Common Stock.

     In April 2000, the Company received notice from Maxygen, Inc. that they
had elected to seek arbitration under the License and Development Agreement
dated May 19, 1997 between the Company and Maxygen. See "Item 1 to Part II --
Legal Proceedings" for additional discussion. The cost of defending such
arbitration could be substantial and could greatly and adversely affect the
Company's projections for working capital. In addition, the uncertainty
surrounding the outcome of the arbitration as well as the delay in bringing
such matter to conclusion could materially adversely affect the Company's
ability to secure additional capital on a timely basis or at all. As with any
litigation, the outcome cannot be predicted; however, the Company currently
believes it will not have a material adverse affect on the financial
statements

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     None



                                       12
<PAGE>


PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     On April 27, 2000, the Company received notice from Maxygen Inc. that they
had elected to seek arbitration under the License and Development Agreement
dated May 19, 1997 between the Company and Maxygen. Maxygen claims that the
Company used Maxygen's confidential information which they allege was provided
to the Company under the Agreement to develop its own RACHITT(TM) directed
evolution technology. The Company denies all allegations of Maxygen and believes
that its technology was independently developed after the collaboration with
Maxygen ceased. No date for arbitration has been set. The Company believes that
there is no merit to the allegations brought against it by Maxygen and believes
the action will not have a material adverse affect on the financial statements.
However, the Company cannot assure that its defense will be substantially
successful, if at all. If the Company is not successful, its business could be
materially and adversely affected and the Company could be required to enter
into cross license agreements, pay a substantial amount in damages or otherwise
have its proprietary rights in directed evolution technology adversely affected.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company's Annual Meeting of Stockholders was held on June 8, 2000,
to consider and vote on the following proposals:

          Proposal 1:      The Election of Directors

     The following individuals were nominated and elected as directors to hold
office until the next annual meeting of the stockholders of the Company or until
their successors have been duly elected and qualified.

<TABLE>
<CAPTION>
                                                                    FOR                     WITHHELD
<S>                                                              <C>                         <C>
Ramon Lopez                                                      6,032,143                   14,817
R. James Comeaux                                                 6,032,113                   14,847
Edward B. Lurier                                                 6,032,143                   14,817
Thomas E. Messmore                                               6,032,113                   14,847
Daniel J. Monticello, Ph.D.                                      6,032,901                   14,059
William E. Nasser                                                6,032,901                   14,059
John S. Patton                                                   6,032,143                   14,817
Peter P. Policastro, Ph.D.                                       6,032,901                   14,059
William D. Young                                                 6,032,901                   14,059

</TABLE>

     Proposal 2: Approval of Amending the Company's Amended and Restated
Certificate of Incorporation

With respect to the following resolution:

         Resolved, that the amendment to the Company's Amended and Restated
Certificate of Incorporation to change the name of the Company from Energy
BioSystems Corporation to Enchira Biotechnology Corporation, be and hereby is
adopted, ratified and approved.

                                                            13
<PAGE>


For      5,027,057        Against       1,015,527        Abstain        4,376

     Proposal 3: Ratification and Approval of Independent Public Accountants

With respect to the following resolution:

         Resolved, that the appointment by the Board of Directors of Arthur
Andersen LLP as the independent public accountants of the Company for the year
ending December 31, 2000 be and hereby is ratified and approved.

For      6,035,133        Against           8,688        Abstain        3,139

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     a.    Exhibits

                3.1(a)+ Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 2 to Post Effective Amendment No. 1 (the
"1993 8-A Amendment") to the Company's Registration Statement on Form 8-A as
filed with the Commission on March 15, 1993).

                3.1(b)+ Certificate of Amendment to the Amended and Restated
Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the
Company's Current Report on Form 8-K filed June 22, 2000).

                3.1(c)+ Certificate of Designation of Series One Junior
Participating Preferred Stock (incorporated by reference to Exhibit 3.1(c) to
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994).

                4.1+ Stockholder Rights Agreement, dated March 8, 1995, between
the Company and Society National Bank (predecessor in interest to Harris Trust &
Savings Bank) as Rights Agent (incorporated by reference to Exhibit 1 to the
Company's Registration Statement on Form 8-A (the "Form 8-A") filed with the
Securities and Exchange Commission on March 13, 1995).

                4.2+ Form of Rights Certificate (incorporated by reference to
Exhibit B to the Stockholder Rights Agreement filed as Exhibit 1 to the Form
8-A).

                4.3+ First Amendment to Stockholder Rights Agreement, dated as
of April 30, 1997, between the Company and Harris Trust & Savings Bank, as
Rights Agent (incorporated by reference to Exhibit 4.3 to Post Effective
Amendment No. 2 (the "2000 8-A Amendment") to the Company's Registration
Statement on Form 8-A as filed with the Commission on June 23, 2000).

                4.4+ Second Amendment to Stockholder Rights Agreement, dated as
of June 23, 2000, between the Company and Harris Trust & Savings Bank, as Rights
Agent (incorporated by reference to Exhibit 4.4 to the 2000 8-A Amendment).

                10.1++ License Agreement dated May 17, 2000 between Genencor
International, Inc. and the Company.

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<PAGE>


+ Incorporated herein by reference.
++ Portions of this exhibit have been omitted based on a request for
confidential treatment pursuant to Rule 24b-2 of the Exchange Act. Such omitted
portions have been filed separately with the Commission.

                11.1  Statement regarding Computation of Per Share Earnings.

                27.1  Financial Data Schedule.

     b.    Reports on Form 8-K

           On May 24, 2000, the Company filed a current report on Form 8-K
reporting an event under Item 5.

           On June 23, 2000, the Company filed a current report on Form 8-K
reporting an event under Item 5.






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<PAGE>


SIGNATURES

           Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Enchira Biotechnology Corporation

By:      /s/ Peter P. Policastro
         -----------------------------------------------
         Peter P. Policastro
         Chief Executive Officer and President

Date: August 14, 2000

By:      /s/ Paul G. Brown III
         -----------------------------------------------
         Paul G. Brown III
         Vice President, Finance and Administration and
         Chief Financial Officer

Date: August 14, 2000



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