The agreement comes on the terms of Cereplast’s registered shelf offering and the $7.5M proceeds (a figure estimated before offering fees and expenses) will be used for general operations purposes. Each unit consists of one (1) shares and one (1) warrant option with an expiration of five years. The warrants are exercisable at a stock price of $4.44 per share, yesterday’s closing price, and will allow the investor to purchase .5 of a share. The warrants go into effect 180 days after the closing date of the offering.
Mr. Frederic Scheer, Chairman and CEO of Cereplast, Inc. said “This round of financing will assist us in continuing to further the growth of our business by expanding our product lines based on commitments and sales we see from both existing and new customers for our biodegradable, environmentally-friendly resins.”
Shares of Cereplast are trading down $1.04, or 23% in early trading at $3.40.
In addition, the company has also released press introducing 11 new grades of Cereplast Compostables resins to meet the increasing demand for improved productivity across all conventional plastic processing techniques while also improving physical property performance. According to the press release, the need for reduced dependency on petroleum is apparent more than ever in the wake of the BP oil spill in the gulf.
Aside from the need to reduce landfill disposal and carbon emissions, which is one of the main causes of global warming, the massive oil spill in the Gulf has sparked renewed interest in greener alternatives to fossil fuels. Businesses and consumers are now seeking products that are environmentally friendly, opening the door for bioplastics – the greener alternative to traditional, petroleum-based plastics.
Cereplast, Inc. is actively producing bioplastic resins for use in products ranging from tableware and cutlery to toys and healthcare/hygiene products, bottles/containers, bags, packaging, gift cards, printed displays, straws, even pipes, conduits, and many other applications in the $2.5 trillion dollar plastics industry.
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