Cereplast, Inc. (PINK:CERP) Release Preliminary Quarter Information

Cereplast designs and manufactures proprietary biobased, sustainable bioplastics which are used as substitutes for traditional plastics. The demand for this type of products will only increase with time as petroleum becomes less available but CERP‘s results from operations in 2012 didn’t reflect this potential.

Two days ago their 10-K report was filed and it showed a significant decline in there financials:

• $183 thousand cash
• $16 million total assets
• $26 million total liabilities
• $894 thousand net sales
• $30 million net loss

Furthermore the company has a total of $81 million accumulated deficit as of December 31. Each one of their financial indicators has gone down since 2011 but most of all their net sales – from $20 million to less than $1 million.

As we already informed you, a possible ray of hope for the company is the new Italian legislation aimed at reducing the usage of single-use plastic bags. Italy has already been responsible for the major part of realized sales – 59% in 2011 and 43% in 2012.

Of great importance for future investors are also the decisions taken at the recent special meeting of shareholders. On April 5 they approved a reverse stock split of the company’s common stock to be executed no later than one year after the date. The exact ratio of the split was left up to be determined by the Board of Directors but not greater than one-for-fifty. During the same meeting they increased the maximum authorized shares from 450 million to 2 billion.

It appears that despite the optimistic press releases, CERP have taken every possible precaution to ensure their future operations through the issuance of more shares.