CERES, INC. (CERE) IPO

We estimate that the net proceeds from this offering will be approximately 
$56.5 million, based upon the initial public offering price of $13.00 per 
share, after deducting net underwriting discounts and commissions and 
estimated offering expenses payable by us. 
  
If the underwriters exercise their option to purchase additional shares in 
full, we estimate that our net proceeds will be approximately $65.5 million, 
based upon the initial public offering price of $13.00 per share and after 
deducting net underwriting discounts and commissions and estimated offering 
expenses payable by us. 
  
We intend to use the net proceeds from this offering for the following: 

Research and development		                  $	30.0 million	

Capital expenditures primarily relating to 
breeding stations, production facilities, 
systems and agricultural equipment		          $	5.0 million	

Commercial activities, including increasing 
the number of sales and marketing personnel, 
expanding our advertising and branding efforts 
and pursuing government approvals		          $	 5.0 million	

Working capital and other general corporate 
purposes, including seed production efforts and 
operating as a public company		                  $	16.5 million

We may also use a portion of the net proceeds to expand our business through 
acquisitions of other companies, assets or technologies, which we expect 
would reduce the amount of net proceeds available for working capital and 
other general corporate purposes. However, we do not have any present 
understandings, commitments or agreements to enter into any potential 
agreements for any acquisitions. Pending the uses of the net proceeds of 
this offering, as described above, we intend to invest the net proceeds in 
short-term investment-grade, interest-bearing securities. 
  
Some of the other principal purposes of this offering are to create a public 
market for our common stock, increase our visibility in the marketplace and 
provide liquidity to existing stockholders. Creating a public market for 
our common stock will facilitate our ability to raise additional equity 
in the future and to use our common stock as a means of attracting and 
retaining key employees and as consideration for acquisitions.

The renewable energy industry is rapidly evolving and new competitors with 
competing technologies are regularly entering the market. We expect to face 
competitors on multiple fronts. First, we expect to compete with other 
providers of seed and vegetative propagation materials in the market for 
sweet sorghum, high biomass sorghum, switchgrass and miscanthus. While the 
competitive landscape in these crops is limited at this time, we anticipate 
that as our products gain market acceptance, other competitors will be 
attracted to this opportunity and produce their own seed varieties. Second, 
we believe that new as yet unannounced crops will be introduced into the 
renewable energy market and that existing energy crops will attempt to gain 
even greater market share. Existing crops, such as corn, sugarcane and oil 
palm trees, currently dominate the biofuels market. We believe the primary 
competitive factors in the energy crop seed industry are yield, performance, 
scale, price, reliable supply and sustainability. As new products enter the 
market, our products may become obsolete or our competitors’ products may be 
more effective, or more effectively marketed and sold, than our products. 
Changes in technology and customer preferences may result in short product 
life cycles. To remain competitive, we will need to develop new products and 
enhance and improve our existing products in a timely manner. Our failure to 
maintain our competitive position could have a material adverse effect on our 
business and results of operations. 
  
Our principal competitors may include major international agrochemical and 
agricultural biotechnology corporations, such as Advanta India Limited, The 
Dow Chemical Company, Monsanto Company, Pioneer Hi-Bred (DuPont), KWS and 
Syngenta, all of which have substantially greater resources to dedicate to 
research and development, production or marketing than we have. We also face 
direct competition from other seed companies and biotechnology companies, 
and from academic and government research institutions. New competitors may 
emerge, including through consolidation within the seed or renewable energy 
industry. We are unable to predict what effect evolution of the industry 
may have on price, selling strategies, intellectual property or our
competitive position. 
  
In the broader market for renewable energy, we expect to face competition 
from other potential feedstocks, including biomass residues from food crops, 
forestry trimmings and municipal waste materials as well as other energy 
crops. There are multiple technologies that process biomass into biofuels 
and we have yet to determine compatibility of our feedstocks with all of 
these processes. Our failure to develop new or enhanced products that are 
compatible with these alternative technologies, or a lack of market acceptance 
of our products as the common denominator in a broad array of bio-based 
products that are alternatives to petroleum based products, could have an 
adverse effect on our business. Significant developments in alternative 
technologies, such as the inexpensive and large-scale storage of solar or 
wind-generated energy, may materially and adversely affect our business in
ways that we do not currently anticipate.