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Cereplast Slumps After Announcing Offering

Stock of Cereplast fell 28 percent early Friday after the company announced agreements to sell an offering to institutional investors.

Under the deal, the investors will pay $1.60 for each unit. Each unit has one share of stock plus a warrant to buy three-quarters of a share. The warrants have an exercisable price of $2.20 a share.

The company expects the offering will raise about $5 million. The offering is expected to close on approximately Nov. 16.

In midday trading on the Nasdaq, the share price of Cereplast had fallen to $1.43, a decline of 55 cents or 28 percent.

Based in El Segundo, Cereplast produces biological-based plastic resins used to manufacture packaging and other products.

Lazard Capital Markets and Ardour Capital Investments were agents for the stock offering.

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