Posted on: Friday, November 7, 2003

Cyanotech stocks rise to $1 per share

By Sean Hao
Advertiser Staff Writer

Shares of Kona-based Cyanotech Corp. yesterday closed up 19 cents, or 23 percent, at $1 a share. It was the first time the maker of micro-algae-based nutritional supplements closed at or above $1 since May 3, 2002.

However, Cyanotech has a ways to go before it gets out from under the threat of being delisted by the Nasdaq Stock Market. The exchange is seeking to drop the stock from its SmallCap Market to the less regulated OTC Bulletin Board because it failed to meet a minimum $1-per-share price for one year. The company appealed Nasdaq's ruling to delist it. Cyanotech is allowed to trade during the appeal process.

That appeal could be rendered moot if the stock trades at or above $1 a share for 10 consecutive trading days.

"That was the marketplace rule that we were not in compliance with when they initiated this delisting," said Jeffrey Sakamoto, Cyanotech's vice president for finance.

After trading in the range of 40 cents to 60 cents for much of the last 12 months, Cyanotech stock has risen sharply since the company released its quarterly results Oct. 30. The company had higher sales, a smaller loss and an improved cash position.

For the quarter ended Sept. 30, Cyanotech said, sales rose nearly 41 percent to $2.84 million, compared with sales of $2.02 million in the second quarter of fiscal 2003. The company attributed the gain to increased sales in Japan.

Cyanotech trimmed its net loss to $10,000 during the quarter, which was an improvement over a year-ago loss of $151,000, or a penny a share.

Additionally, Cyanotech's cash balance at the end of September had increased to $1.19 million, compared with $681,000 at the end of June.

Sakamoto attributed the rising share price to the improved earnings picture.

One dollar "is a fairer value than when we started" October, he said. "We've demonstrated that we are advancing towards profitability."

Cyanotech has lost money in all but three quarters since June 1997.

The company, which employs about 65 people, was one of the state's earliest high-tech hopes when it was launched on the Big Island, in the mid-1980s. Since then, it has struggled to achieve consistent profits. The company's products include the anti-oxidant BioAstin and NatuRose, which is used as a feed additive for sea bream.

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.