##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
 Commission File Number 001-34689
 CEREPLAST, INC.
 (Exact name of registrant as specified in its charter)
 Nevada
(State or Other Jurisdiction of Incorporation or Organization)
    
    91-2154289
(I.R.S. Employer Identification No.)300 N. Continental Avenue Suite 100El Segundo, California
    
    90245(Address of Principal Executive Office)
    
    (Zip Code)
 (310) 676-5000
(Registrants Telephone Number, Including Area Code)
 Yes þ No o
 Yes o
No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 Yes o No þ




---



##### 



CEREPLAST, INC.
FORM 10-Q
TABLE OF CONTENTS
 PagePART IFINANCIAL INFORMATIONItem 1. FINANCIAL STATEMENTS
    
    
    3CONSOLIDATED BALANCE SHEETS AT MARCH 31, 2010 AND DECEMBER 31, 2009
    
    
    3CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 2010 AND 2009
    
    
    4CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
    
    
    5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    
    
    6Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    13Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    19Item 4T. CONTROLS AND PROCEDURES
    
    
    19PART IIOTHER INFORMATIONItem 1. LEGAL PROCEEDINGS
    
    
    20Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    20Item 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    20Item 4. RESERVED
    
    
    20Item 5. OTHER INFORMATION
    
    
    20Item 6. EXHIBITS
    
    
    20SIGNATURES
    
    
    21Exhibit 31.1Exhibit 32.1
  Unless otherwise indicated or unless the context requires otherwise, all references in this report
to we, us, our, Cereplast or the Company shall refer to Cereplast, Inc.
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1.
    
    CONSOLIDATED FINANCIAL STATEMENTS
  
  3/31/2010
    
    
    12/31/2009(Unaudited)
    
    
    (Audited)ASSETSCurrent AssetsCash
    
    $
    1,165,263
    
    
    $
    1,305,771Accounts Receivable, Net
    
    
    261,877
    
    
    
    325,270Inventory, Net
    
    
    957,616
    
    
    
    847,527Prepaid Expenses
    
    
    34,557
    
    
    
    215,356Total Current Assets
    
    
    2,419,313
    
    
    
    2,693,924Property and EquipmentProperty and Equipment
    
    
    5,438,179
    
    
    
    5,416,436Accumulated Depreciation and Amortization
    
    
    (1,652,517
    )
    
    
    (1,519,714
    )Net Property and Equipment
    
    
    3,785,662
    
    
    
    3,896,722Other AssetsRestricted Cash
    
    
    42,934
    
    
    
    Intangibles, Net
    
    
    181,696
    
    
    
    184,039Deposits
    
    
    47,252
    
    
    
    89,286Total Other Assets
    
    
    271,882
    
    
    
    273,325Total Assets
    
    $
    6,476,857
    
    
    $
    6,863,971LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts Payable
    
    $
    767,192
    
    
    $
    989,927Other Payables
    
    
    1,329
    
    
    
    1,413Accrued Expenses
    
    
    684,618
    
    
    
    604,015Capital Leases, Current Portion
    
    
    15,900
    
    
    
    25,341Loan Payable, Current Portion
    
    
    3,203
    
    
    
    53,487Total Current Liabilities
    
    
    1,472,242
    
    
    
    1,674,183Long-Term LiabilitiesLoan Payable
    
    
    16,875
    
    
    
    Capital Leases
    
    
    8,897
    
    
    
    8,897Total Long-Term Liabilities
    
    
    25,772
    
    
    
    8,897Total Liabilities
    
    
    1,498,014
    
    
    
    1,683,080Shareholders EquityPreferred Stock, $0.001 par value;
5,000,000 authorized preferred shares, 0 outstanding
    
    
    
    
    
    
    Common Stock, $0.001 par value;
495,000,000 authorized shares; 10,576,726 shares &
9,825,476 shares issued and outstanding, respectively
    
    
    10,577
    
    
    
    9,825Additional Paid in Capital
    
    
    42,042,729
    
    
    
    40,578,981Retained Earnings/(Deficit)
    
    
    (37,129,562
    )
    
    
    (35,444,968
    )Other Comprehensive Income
    
    
    55,099
    
    
    
    37,053Total Shareholders Equity
    
    
    4,978,843
    
    
    
    5,180,891Total Liabilities and Shareholders Equity
    
    $
    6,476,857
    
    
    $
    6,863,971
   3




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##### Table of Contents



3/31/2010
    
    
    3/31/2009GROSS SALES
    
    $
    319,217
    
    
    $
    564,383Sales Discounts, Returns & Allowances
    
    
    (29,389
    )
    
    
    (3,806
    )NET SALES
    
    
    289,828
    
    
    
    560,577COST OF SALES
    
    
    198,262
    
    
    
    462,807GROSS PROFIT
    
    
    91,566
    
    
    
    97,770OPERATING EXPENSESDepreciation and Amortization
    
    
    155,112
    
    
    
    135,910Marketing Expense
    
    
    274,094
    
    
    
    158,805Professional Fees
    
    
    142,551
    
    
    
    148,299Rent Expense
    
    
    84,064
    
    
    
    241,693Research and Development
    
    
    60,238
    
    
    
    141,210Salaries & Wages
    
    
    388,197
    
    
    
    748,320Salaries & Wages  Stock Based Compensation
    
    
    116,308
    
    
    
    349,255Other Operating Expenses
    
    
    336,153
    
    
    
    338,852TOTAL OPERATING EXPENSES
    
    
    1,556,717
    
    
    
    2,262,344LOSS FROM OPERATIONS BEFORE OTHER INCOME(EXPENSES)
    
    
    (1,465,151
    )
    
    
    (2,164,574
    )OTHER INCOME (EXPENSES)Loss on Sale of Equipment
    
    
    
    
    
    
    (25,449
    )Restructuring Costs
    
    
    (218,435
    )
    
    
    Interest Income
    
    
    117
    
    
    
    8,279Interest Expense
    
    
    (1,125
    )
    
    
    (11,811
    )TOTAL OTHER INCOME (EXPENSES)
    
    
    (219,443
    )
    
    
    (28,981
    )LOSS BEFORE PROVISIONS FOR TAXES
    
    
    (1,684,594
    )
    
    
    (2,193,555
    )Provision for Taxes
    
    
    
    
    
    
    NET LOSS
    
    
    (1,684,594
    )
    
    
    (2,193,555
    )OTHER COMPREHENSIVE INCOMEGain on Foreign Currency Translation
    
    
    18,046
    
    
    
    261TOTAL COMPREHENSIVE LOSS
    
    $
    (1,666,548
    )
    
    $
    (2,193,294
    )BASIC AND DILUTED LOSS PER SHARE
    
    $
    (0.17
    )
    
    $
    (0.30
    )WEIGHTED-AVERAGE COMMON SHARES OUTSTANDINGBASIC AND DILUTED
    
    
    9,868,143
    
    
    
    7,277,295
   4




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##### Table of Contents



3/31/2010
    
    
    3/31/2009CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (1,684,594
    )
    
    $
    (2,193,555
    )Adjustment to reconcile net loss to net cash
used in operating activitiesDepreciation and amortization
    
    
    155,112
    
    
    
    135,910Reserve for Inventory Obsolescence
    
    
    
    
    
    
    46,000Allowance for Doubtful Accounts
    
    
    (385
    )
    
    
    (1,325
    )Loss on sale of equipment
    
    
    
    
    
    
    25,449Loss on disposal of leasehold improvements
    
    
    11,584
    
    
    
    Common Stock Issued for Services, Salaries & Wages
    
    
    175,000
    
    
    
    406,754(Increase) Decrease in:Accounts Receivable
    
    
    63,778
    
    
    
    108,791Inventory
    
    
    (110,089
    )
    
    
    115,448Deposits
    
    
    42,034
    
    
    
    (3,084
    )Prepaid Expenses
    
    
    180,779
    
    
    
    44,203Restricted Cash
    
    
    (42,934
    )
    
    
    Intangibles
    
    
    (249
    )
    
    
    (6,557
    )Increase (Decrease) in:Accounts Payable
    
    
    (223,156
    )
    
    
    500,491Accrued Expenses
    
    
    80,603
    
    
    
    (68,909
    )Other Payables
    
    
    (84
    )
    
    
    (1,323
    )NET CASH USED IN OPERATING ACTIVITIES
    
    
    (1,352,601
    )
    
    
    (891,707
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment, and intangibles
    
    
    (52,603
    )
    
    
    (6,869
    )Proceeds from sale of equipment
    
    
    
    
    
    
    1,154NET CASH USED IN INVESTING ACTIVITIES
    
    
    (52,603
    )
    
    
    (5,715
    )CASH FLOWS FROM FINANCING ACTIVITIES:Payments on Capital Leases
    
    
    (9,441
    )
    
    
    (14,811
    )Proceeds on Notes Payable
    
    
    20,524
    
    
    
    Payments on Notes Payable
    
    
    (53,933
    )
    
    
    (2,903
    )Proceeds from issuance of common stock and subscriptions
    
    
    1,289,500
    
    
    
    467,341NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    1,246,650
    
    
    
    449,627FOREIGN CURRENCY TRANSLATION
    
    
    18,046
    
    
    
    261NET DECREASE IN CASH
    
    
    (140,508
    )
    
    
    (447,534
    )CASH, BEGINNING OF PERIOD
    
    
    1,305,771
    
    
    
    501,699CASH, END OF PERIOD
    
    $
    1,165,263
    
    
    $
    54,165
       5




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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 (Unaudited)
  Organization
  Line of Business
 ® ®
    
    
    Cereplast Compostables Resins®are renewable, ecologically-sound substitutes
for petroleum-based plastics targeting primarily single-use disposables and packaging
applications. We offer 17 commercial grades of Compostables Resins in this product line.
These resins are compatible with existing manufacturing processes and equipment making them
a ready substitute for traditional petroleum-based resins. We commercially introduced our
Compostables line in November 2006.
 
    
    Cereplast Hybrid Resins® replace up to 50% of the petroleum content in
conventional plastics with bio-based materials such as industrial starches sourced from
plants. The Hybrid Resin line is designed to offer similar properties to traditional
polyolefins such as impact strength and heat deflection temperature, and is compatible with
existing converter processes and equipment. Hybrid Resins provide a viable alternative for
brand owners and converters looking to partially replace petroleum-based resins in durable
goods applications. Hybrid Resins address this need in a wide range of markets, including
automotive, consumer goods, consumer electronics, medical, packaging, and construction.
We commercially introduced our first grade of Hybrid Resin, Hybrid 150, at the end of 2007.
We currently offer two commercial grades in this product line.
  6




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##### Table of Contents




    
    Cereplast Algae
Plastics. In October 2009, we announced that we have been developing a
new technology to transform algae into bioplastics and intend to launch a new family of
algae-based resins that will complement the companys existing line of Compostables &
Hybrid resins. Although we do not expect
this new technology to become commercial before the end of 2010 or early 2011, it remains an
important development as we believe that the potential open by algae is quite substantial.
Cereplast algae-based resins could replace in a first step 50% or more of the petroleum
content used in traditional plastic resins. Currently, Cereplast is using renewable material
such as starches from corn, tapioca, wheat and potatoes and Ingeo® PLA. The Company believes
that algae is a very attractive feedstock as it does offer a low carbon footprint
alternative and at the same time could be accessible in very large quantity. We also have a
future plan to create algae plastic made of 100% algae component abandoning any reliance on
fossils fuels.
   Basis of Presentation and Consolidation
  Use of Estimates
  Cash and Cash Equivalents
  Concentration of Credit Risk
   7




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##### Table of Contents



Other Concentration
  Restricted Cash
  Fair Value of Financial Instruments
  Accounts Receivable
  Inventories
  2010
    
    
    2009Raw Materials
    
    $
    468,969
    
    
    $
    344,489Bioplastic Resins
    
    
    384,129
    
    
    
    355,082Finished Goods
    
    
    71,485
    
    
    
    76,458Packaging Materials
    
    
    33,033
    
    
    
    14,978WIP
    
    
    
    
    
    
    56,250Total Inventories
    
    $
    957,616
    
    
    $
    847,527
 Property and Equipment
  March 31,
    
    
    December 31,2010
    
    
    2009Equipment
    
    $
    5,132,030
    
    
    $
    2,518,132Construction in Progress
    
    
    
    
    
    
    2,588,904Furniture & Fixtures
    
    
    277,305
    
    
    
    275,055Automobile
    
    
    25,359
    
    
    
    Leasehold Improvements
    
    
    3,485
    
    
    
    34,3455,438,179
    
    
    
    5,416,436Less Accumulated Depreciation
    
    
    (1,652,517
    )
    
    
    (1,519,714
    )Net Property and Equipment
    
    $
    3,785,662
    
    
    $
    3,896,722
  8




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##### Table of Contents



Intangibles
  March 31,
    
    
    December 31,2010
    
    
    2009Intangibles
    
    $
    208,104
    
    
    $
    208,304Less Accumulated Amortization
    
    
    (26,408
    )
    
    
    (24,265
    )Net Intangibles
    
    $
    181,696
    
    
    $
    184,039
 Deferred Income Taxes
    Revenue Recognition
  Marketing and Advertising
  Research and Development Costs
   9




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##### Table of Contents



Stock-Based Compensation
 
 Loss per Share Calculations
  Legal Proceedings
   Reverse Stock Split
  Capital Stock Issued
  
    
    In a private placement transactions made in reliance upon an exemption from
registration under rule 506 of Regulation D promulgated under Section 4(2) of the
Securities Act of 1933, as amended the Securities Act), we issued 705,000 shares of
common stock for net cash proceeds of $1,289,500.
 
    
    On January 4, 2010, we issued 31,250 shares of common stock valued at $125,000 for fees
associated with the early termination of a lease in California.
 
    
    On January 6, 2010, we issued 12,500 shares of common stock valued at $50,000 to a board
member for services provided.
  10




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##### Table of Contents



Valuation Assumptions for Stock Options
  Year endedDecember 31,2009Average risk-free interest rate
    
    
    3.84
    %Average expected life (in years)
    
    
    5.1Volatility
    
    
    102.2
    %
 
    
    Expected Volatility:The fair values of stock based payments were valued using a
volatility factor based on our historical stock prices.
 
    
    Expected Term:We elected to use the simplified method as discussed in SAB No. 107 to
develop the estimate of the expected term.
 
    
    Expected Dividend:We have not paid any dividends and do not anticipate paying dividends
in the foreseeable future.
 
    
    Risk-Free Interest Rate:We base the risk-free interest rate used on the implied yield
currently available on U.S. Treasury zero-coupon issues with remaining term equivalent to
the expected term of the options.
 Stock Option Activity
   11




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##### Table of Contents



2010
    
    
    2009Weighted Average
    
    
    
    
    
    
    Weighted AverageShares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstandingbeginning of year
    
    
    73
    
    
    $
    0.56
    
    
    
    249
    
    
    $
    0.56Granted at fair value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Canceled/forfeited
    
    
    
    
    
    
    
    
    
    
    (176
    )
    
    
    0.56Outstandingend of year
    
    
    73
    
    
    
    0.56
    
    
    
    73
    
    
    
    0.56Options exercisable at year-end
    
    
    73
    
    
    $
    0.56
    
    
    
    0
    
    
    $
    0.56
 Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    WeightedWeighted
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    Weighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    Aggregate
    
    
    
    
    
    
    Average
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contract
    
    
    Intrinsic
    
    
    
    
    
    
    Exercise
    
    
    Contract
    
    
    IntrinsicRange of Exercise Prices
    
    Shares
    
    
    Price
    
    
    Life
    
    
    Value
    
    
    Shares
    
    
    Price
    
    
    Life
    
    
    Value$0.0-$0.56
    
    
    73
    
    
    $
    0.56
    
    
    
    4
    
    
    
    
    
    
    
    73
    
    
    $
    0.56
    
    
    
    4
    
    
    
    
        California Facilities
 Indiana Facility 
  Notes Payable
    12




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   
    
    inability to raise sufficient additional capital to finance operations;
 
    
    potential fluctuation in quarterly results;
 
    
    our failure to earn profits;
 
    
    inadequate capital to expand our business, inability to raise additional capital or
financing to implement our business plans;
 
    
    decline in demand for our products and services;
 
    
    rapid and significant changes in markets and other factors that encourage use of
bioplastics;
  13




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##### Table of Contents




    
    failure to successfully commence operations at our new Seymour facility and relocate
manufacturing activities from California to Indiana;
 
    
    failure to commercialize new grades of resin being pursued in our technical / market
development pipeline;
 
    
    competitor actions that curtail our market share, negatively affect pricing or limit
sales growth;
 
    
    inability to retain employees as a result of deferral of payment of salaries to preserve
cash;
 
    
    litigation with or legal claims and allegations by outside parties;
 
    
    insufficient revenues to cover operating costs;
 
    
    inability to successfully implement our Strategic Restructuring Program, including the
successful negotiation of a strategic partnership to outsource our manufacturing
activities, consolidation of product lines and the sale of our commercial production
equipment at attractive prices.
    General
  
    
    Cereplast Compostables Resins®are renewable, ecologically-sound substitutes
for petroleum-based plastics targeting primarily single-use disposables and packaging
applications. We offer 17 commercial grades of Compostables Resins in this product line.
These resins are compatible with existing manufacturing processes and equipment making them
a ready substitute for traditional petroleum-based resins. We commercially introduced our
Compostables line in November 2006.
 
    
    Cereplast Hybrid Resins® replace up to 50% of the petroleum content in
conventional plastics with bio-based materials such as industrial starches sourced from
plants. The Hybrid Resin line is designed to offer similar properties to traditional
polyolefins such as impact strength and heat deflection temperature, and is compatible with
existing converter processes and equipment. Hybrid Resins provide a viable alternative for
brand owners and converters looking to partially replace petroleum-based resins in durable
goods applications. Hybrid Resins address this need in a wide range of markets, including
automotive, consumer goods, consumer electronics, medical, packaging, and construction.
We commercially introduced our first grade of Hybrid Resin, Hybrid 150, at the end of 2007.
We currently offer two commercial grades in this product line.
  14




---



##### Table of Contents




    
    Cereplast Algae Plastics. In October 2009 we announced that we have been developing a
new technology to transform algae into bioplastics and intend to launch a new family of
algae-based resins that will complement the companys existing line of Compostables &
Hybrid resins. Although we do not expect this new technology to become commercial before
the end of 2010 or early 2011, it remains an important development as we believe that the
potential open by algae is quite substantial. Cereplast algae-based resins could replace in
a first step 50% or more of the petroleum content used in traditional plastic resins.
Currently, Cereplast is using renewable material such as starches from corn, tapioca, wheat
and potatoes and Ingeo® PLA. Recently the algae production business has attracted a lot of
attention when Exxon announced a $600 million investment in Synthetic Genomics and BPs $10
million investment in Martek Biosciences. The Company retains that algae is a very
attractive feedstock as it does offer a low carbon footprint alternative and at the same
time could be accessible in very large quantity. We also have a future plan to create algae
plastic made of 100% algae component abandoning any reliance on fossils fuels.
  Trends and Uncertainties that May Impact Future Results of Operations
 Global Market and Economic Conditions.
   15




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##### Table of Contents



Sales.
 Operating Expenses. th
    ales
   16




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##### Table of Contents



Gross Profit
  Operating Expenses
  
    
    Salaries and wages, including stock based compensation, decreased by $593,070 or 54.0%,
to $504,505 for the three months ended March 31, 2010 as compared to the
three months ended March 30, 2009, largely as a result of the significant reductions in our
workforce in 2009 and associated reductions in compensation expense related to the vesting
of employee stock options to reflect actual stock option forfeiture rates.
 
    
    Marketing expense increased $115,289, or 72.6%, to $274,094 for the three months ended
March 31, 2010, compared to the three months ended March 31, 2009. The increase is due
primarily to costs associated with stock issued for the termination of an existing
marketing agreement on March 23, 2010.
 
    
    Research and Development costs decreased by $80,972, or 57.3% to $60,238 for the three
months ended March 31, 2010, compared to the three months ended March 31, 2009 also as a
result of an improved focus of our pipeline process for technical development and
expansion of our resin families and other cost cutting measures.
 
    
    Rent expense decreased by $157,629, or 65.2%, to $84,064 for the three months ended
March 31, 2010 compared to the three months ended March 31, 2009. The decrease for the
period resulted for the termination of two leases for 30,000 sq. ft & 25,000 sq. ft. of
office and warehouse space during the prior year and the renegotiation of the lease of the
Indiana facility.
 Net Loss
   17




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##### Table of Contents



Payments Due by PeriodLess Than
    
    
    2-3
    
    
    4-5
    
    
    More ThanTotal
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsCapitalized lease obligations
    
    $
    24,797
    
    
    $
    15,900
    
    
    $
    8,897
    
    
    $
    
    
    
    $
    Purchase obligations
    
    
    214,452
    
    
    
    214,452
    
    
    
    
    
    
    
    
    
    
    
    Rental lease obligations
    
    
    3,241,975
    
    
    
    409,737
    
    
    
    409,737
    
    
    
    409,737
    
    
    
    2,012,764Term loan obligations
    
    
    20,078
    
    
    
    3,203
    
    
    
    4,023
    
    
    
    4,086
    
    
    
    8,766$
    3,501,302
    
    
    $
    643,292
    
    
    $
    422,657
    
    
    $
    413,823
    
    
    $
    2,021,530
  18




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##### Table of Contents



ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4T.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
   19




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
  ITEM 1A.
    
    RISK FACTORS
  
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
    
    We sold 705,000 shares of common stock for net cash proceeds of $1,289,500.
 
    
    On January 4, 2010, we issued 31,250 shares of common stock valued at $125,000 for fees
associated with the early termination of a lease.
 
    
    On January 6, 2010, we issued 12,500 shares of common stock valued at $50,000 to a
board member for services provided.
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    RESERVED
 
 ITEM 5.
    
    OTHER INFORMATION
  
 ITEM 6.
    
    EXHIBITS
  20




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##### Table of Contents



ExhibitNumber
    
    Description31.1
    
    
    Certification of the Chief Executive Officer and Principal Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of the Chief Executive Officer and Principal Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ***
 
 (1)
    
    Filed as an exhibit to the Form SB-2 Registration Statement declared effective on July 5,
2005 and incorporated herein by reference.***
    
    In accordance with Item 601(b)(32)(ii) of Regulation S-K, this exhibit shall not be deemed
filed for the purposes of Section 18 of the Exchange Act or otherwise subject to the
liability of that section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act.  21




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##### Table of Contents



SIGNATURES
  Date: May 12, 2010
    CEREPLAST, INC.By:
    /s/ Frederic ScheerFrederic ScheerChairman, Chief Executive Officer, Principal
Financial Officer and Director  22