Cyanotech Receives Delisting Warning from Nasdaq

Cyanotech Receives Delisting Warning from Nasdaq

KAILUA-KONA, Hawaii--In mid-June, Cyanotech Corp. (NASDAQ:CYAN)reported it had received a delisting warning letter from the NASDAQ NationalMarket for failure to comply with a $1.00 minimum bid price. Cyanotech has 90calendar days, or until Sept. 16, to once more be in compliance. Cyanotech'scommon stock must close at $1.00 per share or more for at least 10 consecutivetrading days prior to Sept. 16.

If the company is unable to comply with NASDAQ's requirements, Cyanotech willapply to be listed on the NASDAQ SmallCap Market, which allows for a 180-daygrace period, or until June 12, 2003. During that time, the company will have tomaintain a minimum bid price of $1.00 per share for 30 consecutive trading daysin order to be eligible to be transferred back to the NASDAQ National Market.

"Although our intention is to remain on the NASDAQ National Market, wenow have the option of moving to the $45 billion NASDAQ SmallCap Market, wherewe would join over 700 other companies," said Ronald Scott, chief financialofficer and executive vice president of Cyanotech. He added that the company'sstock reached an all-time high of $14.88 in November 1995 when it had previouslybeen on the SmallCap Market.

In late June, Cyanotech's auditor KPMG LLP was doubtful about the company'sability to do business after factoring ongoing losses from operations. Thecompany also has limited sources of additional liquidity to pay its debt,including convertible debentures of $1.2 million that are due Oct. 31. "Weare currently seeking additional financing, which I expect to have in placebefore October," said Ronald Scott, executive vice president and chieffinancial officer of Cyanotech.

For its fiscal year (FY02), ended March 31 and reported June 28, Cyanotechreported $8.2 million in sales, but a net loss of $2.6 million, or $.15 pershare lost.