Cereplast Announces $12 Million Private Placement
Cereplast, Inc. (NASDAQ:CERP), a leading manufacturer of proprietary bio-based, compostable and sustainable plastics, announced today that it has entered into a Securities Purchase Agreement with several institutional investors. Under the terms of the Purchase Agreement, the Company has agreed to sell in a private placement approximately 2.6 million units consisting of one share of common stock and warrants to purchase 0.25 shares of common stock at a price of $4.75 per unit resulting in gross proceeds to the company of approximately $12 million. Cereplast will receive net proceeds of approximately $11 million after fees and expenses related to the private placement. The Warrants are exercisable at a price of $6.35 per share. Lazard Capital Markets LLC served as lead placement agent for the offering with Merriman Capital, Inc. and Ardour Capital Investments, LLC acted as co-placement agents.
Proceeds from the financing will be used for working capital to fill the Company’s rapidly growing order pipeline resulting from new distribution agreements secured in 2011 in Europe. During the first three weeks of 2011, Cereplast announced new distribution agreements in Italy, Romania, Poland and Slovenia with multiple companies. These contracts reflect Cereplast’s rapid growth and expansion across the Pan-European marketplace.
In 2010, Cereplast’s total sales revenue was $6.3 million, a 133% percent increase from $2.7 million in 2009. 2010 sales revenue was limited due to supply constraints on raw materials from mid-November through December. The supply of raw materials has improved and projected revenue for Q1 2011 is between $5.0 million and $6.5 million. Projected revenue for the 2011 full year is between $24 million and $32 million, a 300% to 400% increase compared to 2010.
"Demand for bioplastic resin in Europe continues to soar, and the explosive growth we are experiencing in the region is reflected in the number of new contracts we have entered into there in 2011,” said Frederic Scheer, Chairman and CEO of Cereplast, Inc. “The increasing market penetration we are gaining in various parts of Europe gives us greater visibility to outline our growth expectations for 2011.”
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