Cyanotech fights delisting

By David Butts
Advertiser Staff Writer

•	Cyanotech Corp. Headquarters: Kailua-Kona Produces BioAstin, Spirulina and other micro-algae products Net sales for most recent quarter: $2.43 million. Reported loss of $141,000 in 3 months ended June 30 Shares trade on Nasdaq (ticker symbol CYAN)

Cyanotech is the largest of Hawai'i's three publicly traded agricultural biotechnology companies, and all three are struggling with losses.

Nasdaq spokesman Wayne Lee said delisting could lead to less trading in the stock, less visibility for the company and the loss of analyst coverage.

Cyanotech said it "is exploring all possible avenues to preserve the Nasdaq listing."

Cyanotech has lost money in all but three quarters since June 1997, and its share price has been below $1 since May 2002. The technology-laden Nasdaq exchange has a rule that allows it to remove a company if its price remains below $1. If Cyanotech is delisted, its shares would trade in the over-the-counter market.

"The possibility of going to the over-the-counter means our stock will be traded on a potentially less active market," said Jeffrey Sakamoto, vice president for finance. "Really nothing has changed. Our focus as a management team and as a company is on our results. In the long term and short term, results are what will provide value to our shareholders."

Cyanotech shares rose 12 cents yesterday to close at 71 cents on trading volume of 229,750 shares, well above the 65,965 average volume for the past six months.

Among Hawai'i's other agriculture biotech companies, Kaua'i shrimp farm Ceatech notified the Securities and Exchange Commission yesterday that it would not be able to file its latest earnings report on time. That follows Ceatech's announcement in July that its independent accountants, PricewaterhouseCoopers, resigned after "expressing substantial doubt" about the company's ability to continue.

The third company, Mera Pharmaceutical, another Big Island algae-farming producer of nutritional supplements, reported a $178,000 loss in the most recent quarter after having to delay its earnings report in the previous quarter.

The next step for Cyanotech in the appeal process is a hearing, which Nasdaq has 45 days from Friday to set. During the appeal, the company's common stock will continue to trade on the Nasdaq SmallCap market.

If the company presents a viable business plan at the hearing, Lee said, the exchange could allow it to remain listed.

Reach David Butts at dbutts@honoluluadvertiser.com or 535-2453.