Core Insights - The company reported a nearly 20% year-over-year increase in total revenue, driven by higher bulk sales and strong online channel performance [3] - There was a significant improvement in gross margin due to increased production volumes, which lowered cost per unit and enhanced overall efficiency [3] - Price increases for Nutrex-branded products contributed to margin expansion, despite challenges from tariffs affecting contract extraction competitiveness [3] Financial Performance - Total revenue increased by nearly 20% year-over-year [3] - Improvement in gross margin was noted as production volumes increased [3] - Price increases earlier in the year for Nutrex-branded products aided in margin expansion [3] Operational Focus - The company emphasized operational excellence and disciplined cost control to build a stronger, more resilient business [3] - There is a commitment to long-term success despite external challenges such as tariffs [3]

Financial Data and Key Metrics Changes - Total revenue for the second quarter reached $7 million, an increase of $1.1 million, or 19.3%, year over year [4] - Gross profit rose to $2.4 million, with a gross margin of 34.3%, up from $1.5 million and 25.3% in the same quarter last year, reflecting a nine-point margin expansion [4] - Operating income was $190,000, compared to an operating loss of $975,000 in the same quarter of the prior fiscal year [4] - Net income for the current quarter was $1,000, or $0.00 per diluted share, compared to a net loss of $1.2 million, or $0.16 loss per diluted share in the same period of the prior year [5] - Cash at the end of the period was $649,000, down from $780,000 in the prior year, while working capital decreased to $39,000 from $550,000 [5] Business Line Data and Key Metrics Changes - The increase in total revenue was driven by higher bulk sales and strong performance in online channels [3] - Continued gains in production efficiency contributed to the improvement in gross margin [4] Market Data and Key Metrics Changes - Tariffs impacted contract extraction competitiveness, but the company maintained focus on operational excellence and cost control [3] Company Strategy and Development Direction - The company is focused on building a stronger, more resilient business position for long-term success, emphasizing operational excellence and disciplined cost control [3] - There is a commitment to improving profitability trends and maintaining momentum across brands despite challenging market conditions [3] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positive direction, citing continued momentum in sales growth and profitability [3] - The management highlighted the importance of adapting to market challenges while focusing on operational improvements [3] Other Important Information - The company has not received any questions during the call, indicating a lack of immediate investor inquiries [6] Q&A Session Summary - No questions were posed during the call, and thus there are no responses to summarize [6]

Financial Performance - Net sales for the three months ended September 30, 2025, increased to $6,976,000, a 19.3% increase from $5,845,000 in the same period of 2024[14] - Gross profit for the six months ended September 30, 2025, was $4,166,000, compared to $2,956,000 for the same period in 2024, reflecting a 40.7% increase[14] - The company reported a net income of $1,000 for the three months ended September 30, 2025, compared to a net loss of $1,150,000 for the same period in 2024[14] - For the six months ended September 30, 2025, the net loss was $925,000, a decrease from a net loss of $2,352,000 in the same period of 2024, representing a 60.7% improvement[20] - Total net sales for the three months ended September 30, 2025, were $6,976,000, representing an increase of 19.3% compared to $5,845,000 for the same period in 2024[53] - For the six months ended September 30, 2025, total net sales reached $12,797,000, a 9.0% increase from $11,743,000 in 2024[54] Cash and Liquidity - Cash balance increased to $649,000 as of September 30, 2025, from $257,000 as of March 31, 2025, showing a significant improvement[12] - The company had a working capital of $39,000 as of September 30, 2025, a significant decrease from $302,000 as of March 31, 2025, indicating liquidity challenges[28] - Cash at the end of the period was $649,000, down from $780,000 as of September 30, 2024, indicating a decrease of 16.8% year-over-year[20] - Net cash used in operating activities was $220,000 for the six months ended September 30, 2025, compared to $201,000 for the same period in 2024, reflecting a 9.5% increase in cash outflow[20] - The company continues to face challenges with operating losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern[122] Expenses and Costs - Operating expenses for the three months ended September 30, 2025, were $2,203,000, a decrease of 10.2% from $2,454,000 in the same period of 2024[14] - Operating expenses totaled $4.7 million for the six months ended September 30, 2025, a decrease of approximately 4.9% compared to the prior year[120] - The company incurred $360,000 in interest payments during the period, an increase from $330,000 in the same period of 2024, representing a 9.1% rise[20] - Interest expense for the six months ended September 30, 2025, was $(361,000), compared to $(336,000) for the same period in 2024, indicating a slight increase in interest costs[14] Assets and Liabilities - Total current assets as of September 30, 2025, were $11,931,000, up from $10,545,000 as of March 31, 2025, indicating an increase of 13.2%[12] - Total liabilities increased to $15,962,000 as of September 30, 2025, compared to $14,606,000 as of March 31, 2025, representing an increase of 9.3%[12] - The accumulated deficit as of September 30, 2025, was $(27,029,000), compared to $(26,104,000) as of March 31, 2025[12] - The company had $4,200,000 outstanding borrowings on a related party loan facility as of September 30, 2025, compared to $3,000,000 as of March 31, 2025, indicating a 40% increase in debt[29] - Total debt as of September 30, 2025, was $8,420,000, including $370,000 in short-term bank debt and $4,200,000 in related party line of credit[63] Sales Breakdown - Packaged sales for the three months ended September 30, 2025, totaled $4,573,000, up 8.7% from $4,206,000 in 2024[53] - Bulk sales for the three months ended September 30, 2025, increased significantly to $2,359,000, a 75.7% rise from $1,342,000 in 2024[53] - Bulk sales of astaxanthin increased by 142.6% to $1,533,000, while spirulina bulk sales rose by 16.3% to $826,000 for the three months ended September 30, 2025[112] - Three customers accounted for 22%, 14%, and 11% of total net sales for the six months ended September 30, 2025, highlighting a concentration risk in revenue generation[44] Stock and Shares - The company had 7,392,243 shares outstanding as of September 30, 2025, an increase from 7,199,908 shares as of March 31, 2025[12] - Basic and diluted net income per share for the three months ended September 30, 2025 was $1, with 7,293 shares outstanding, while for the same period in 2024, the net loss per share was $(1,150) with 7,004 shares[95] - For the six months ended September 30, 2025, the basic and diluted net loss per share was $(925) with 7,252 shares, compared to a net loss of $(2,352) with 6,976 shares for the same period in 2024[96] Operational Insights - The Company is a leader in the production of natural products derived from microalgae, emphasizing quality and environmental sensitivity in its operations[106] - The production facility on the Kona Coast of Hawaii allows for year-round harvest of microalgal products in a cost-effective manner due to favorable growing conditions[109] - The company aims to stabilize production volume and rationalize market channel participation while focusing on higher margin consumer products[137] - The company is exploring opportunities for bulk sales orders for spirulina and astaxanthin, both domestically and internationally[137] Future Outlook and Risks - Future results may fluctuate due to various risks, including changes in customer order patterns and increased competition[141] - The gross profit margin may decline in future periods due to lower production volumes and increased input costs[138] - Inflationary factors have led to overall lower demand as consumers manage discretionary spending, impacting operations[144] Compliance and Governance - The Company was not in compliance with the debt service coverage ratio as of March 31, 2023, 2024, and 2025, but received waivers from the Bank for these violations[71] - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended September 30, 2025[149] - The company has not experienced any significant legal matters outstanding as of September 30, 2025[151]

Financial Data and Key Metrics Changes - In Q1 2026, net sales decreased by 1.3% to $5.8 million compared to $5.9 million in the same period last year, a decline of $78,000 [5] - Gross profit increased by 20% to $1.8 million, with a gross profit margin of 30.5%, up from 25% in the prior year, reflecting improved production efficiencies [5][6] - The operating loss was reduced to $753,000 from $1 million in the previous year, while the net loss improved to $926,000 or $0.13 per diluted share, compared to a net loss of $1.2 million or $0.17 per diluted share in the prior year [6] Business Line Data and Key Metrics Changes - Bulk spirulina and bulk azathiothin sales saw significant increases of 484% and 849% respectively, indicating a renewed demand for US-sourced materials in the ingredients channel [3][4] - Packaged product sales, however, declined by 12%, impacting overall sales performance [4] Market Data and Key Metrics Changes - The company reported a shift in sales mix, with a notable increase in bulk ingredient sales, while packaged products faced a decline [3][4] Company Strategy and Development Direction - The company remains focused on long-term strategies, including enhancing brand value through storytelling, strengthening relationships in e-commerce and bulk ingredient markets, and prioritizing sustainable cash flows [4] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the team's resilience amid ongoing macroeconomic challenges and highlighted progress in executing the company's strategies [4] Other Important Information - The company reported cash of $383,000 and negative working capital of $255,000, compared to $257,000 and $302,000 respectively in the prior year [6] Q&A Session Summary - No questions were received during the call [7]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarter ended June 30, 2025, showing a slight sales decrease, improved gross profit, reduced net loss, and a 'going concern' warning [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased slightly to $23.0 million, total liabilities increased to $15.0 million, and stockholders' equity decreased to $8.0 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Total Current Assets** | $10,523 | $10,545 | | **Total Assets** | **$22,995** | **$23,490** | | **Total Current Liabilities** | $10,778 | $10,243 | | **Total Liabilities** | **$14,995** | **$14,606** | | **Total Stockholders' Equity** | **$8,000** | **$8,884** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported a net loss of $926,000, an improvement from the prior year, driven by a higher gross profit margin Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2026 (ended June 30, 2025) | Q1 2025 (ended June 30, 2024) | | :--- | :--- | :--- | | Net Sales | $5,820 | $5,898 | | Gross Profit | $1,773 | $1,476 | | Gross Margin | 30.5% | 25.0% | | Loss from Operations | $(753) | $(1,041) | | Net Loss | $(926) | $(1,202) | | Basic and Diluted EPS | $(0.13) | $(0.17) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased to $8.00 million by June 30, 2025, primarily due to the net loss incurred during the period - Stockholders' equity fell to **$8.0 million** at June 30, 2025, from **$10.66 million** a year prior, mainly due to recurring net losses[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended June 30, 2025, operating activities used cash, while financing activities provided funds, resulting in an overall cash increase Cash Flow Summary (in thousands) | Activity | Q1 2026 (ended June 30, 2025) | Q1 2025 (ended June 30, 2024) | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | $(328) | $243 | | Net Cash Used in Investing Activities | $(22) | $(47) | | Net Cash Provided by (Used in) Financing Activities | $476 | $(183) | | **Net Increase in Cash** | **$126** | **$13** | | **Cash at End of Period** | **$383** | **$720** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail critical accounting policies, a 'going concern' warning, significant customer concentration, and reliance on related-party debt - The financial statements were prepared assuming the company will continue as a going concern, but sustained operating losses, negative cash flows, and debt covenant violations raise substantial doubt about this ability[25](index=25&type=chunk) - For the quarter ended June 30, 2025, three customers accounted for **20%**, **12%**, and **12%** of total net sales, indicating significant customer concentration risk[40](index=40&type=chunk) - The company violated debt covenants as of March 31, 2025, and received a waiver from the bank. However, due to the probability of future violations, the **$2.9 million 2012 Loan** is classified as a current liability[28](index=28&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - The company has a revolving line of credit of up to **$4.0 million** with a related party, Skywords Family Foundation, Inc. As of June 30, 2025, **$3.75 million** was outstanding on this facility[27](index=27&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a slight decrease in net sales, improved gross margin, critical liquidity concerns, and strategic initiatives to address the 'going concern' issue [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Net sales for Q1 FY2026 decreased by 1.3% due to a decline in packaged sales offset by a surge in bulk sales, while gross profit margin improved significantly Net Sales by Category (in thousands) | Category | Q1 2026 | Q1 2025 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Packaged Sales | $4,118 | $4,689 | $(571) | (12.2)% | | Total Bulk Sales | $1,662 | $1,117 | $545 | 48.8% | | **Total Sales** | **$5,820** | **$5,898** | **$(78)** | **(1.3)%** | - The gross profit margin increased by **5.5 percentage points**, from **25.0%** to **30.5%**, primarily due to higher production volumes which resulted in lower production costs for the quarter[105](index=105&type=chunk) [Liquidity and Going Concern](index=24&type=section&id=Liquidity%20and%20Going%20Concern) The company faces precarious liquidity with a working capital deficit and reliance on related-party debt, raising substantial doubt about its ability to continue as a going concern - As of June 30, 2025, the company had cash of **$0.4 million** and a negative working capital deficit of **$0.3 million**[108](index=108&type=chunk) - Management highlights that sustained operating losses, negative cash flows, and debt covenant non-compliance raise substantial doubt about the ability to continue as a going concern[107](index=107&type=chunk) - The company continues to implement cost-saving initiatives, including aligning production with demand, reducing headcount, and hiring a Head of Sales to strengthen its eCommerce and retail strategy[112](index=112&type=chunk) [Cash Flows](index=25&type=section&id=Cash%20Flows) Operating activities used cash, investing activities were minimal, and financing activities provided funds, primarily from a related-party line of credit - Cash used in operations was **$328,000**, driven by a net loss of **$0.9 million** and an increase in inventory, partially offset by non-cash items and a decrease in accounts receivable[114](index=114&type=chunk) - Cash from financing activities was **$476,000**, primarily from a **$750,000** draw on the related-party line of credit[115](index=115&type=chunk)[19](index=19&type=chunk) [Outlook](index=27&type=section&id=Outlook) The company's strategic focus is on stabilizing production, rationalizing channels, and leveraging core competencies, while managing cash and potential gross margin declines - Strategic direction is to stabilize production, focus on high-margin Nutrex Hawaiian consumer products, and pursue bulk sales and third-party extraction services[120](index=120&type=chunk) - Management warns that future gross profit margins could be negatively impacted by lower production volumes, input cost pressures, and increased competition[121](index=121&type=chunk) - To manage cash resources, the company will balance production with sales demand, minimize inventory costs, and judiciously manage expenses[123](index=123&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[131](index=131&type=chunk) - No changes occurred during the quarter that materially affected, or were reasonably likely to materially affect, the company's internal control over financial reporting[132](index=132&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no significant outstanding legal matters as of June 30, 2025 - There were no significant legal matters outstanding at June 30, 2025[134](index=134&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The report refers investors to the comprehensive risk factors detailed in the company's Annual Report on Form 10-K - For a discussion of risk factors, the report incorporates by reference Part I, Item 1A of the Form 10-K for the year ended March 31, 2025[135](index=135&type=chunk) [Other Items (2, 3, 5)](index=30&type=section&id=Other%20Items%20%282%2C%203%2C%205%29) The company reported no unregistered sales of equity securities, no defaults upon senior securities, and no other information requiring disclosure - The company reported 'None' for Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults upon Senior Securities), and Item 5 (Other Information)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to equity plans, debt agreements, and officer certifications - Exhibits filed include amendments to incentive and debt plans, CEO/CFO certifications (Sections 302 and 906), a press release, and XBRL data files[141](index=141&type=chunk)

[PART I](index=5&type=section&id=PART%20I) [Business](index=5&type=section&id=Item%201.%20Business) Cyanotech cultivates microalgae in Hawaii, producing BioAstin® astaxanthin (65% of FY25 sales) and Hawaiian Spirulina (32% of FY25 sales), along with contract services - The company operates in a single business segment: the cultivation and production of microalgae into health and nutrition products[17](index=17&type=chunk) - The company's production facility is located on a 96-acre site in Kona, Hawaii, chosen for its optimal microalgae growing conditions, including consistent warmth, sunshine, and access to deep ocean water[16](index=16&type=chunk) - In fiscal year 2025, two major customers accounted for **31%** and **10%** of total net sales, indicating significant customer concentration[44](index=44&type=chunk) Net Sales by Product Line (in thousands) | Product Line | FY 2025 Net Sales | FY 2024 Net Sales | | :--- | :--- | :--- | | BioAstin® (Natural astaxanthin) | $15,738 | $15,104 | | Hawaiian Spirulina Pacifica® | $7,628 | $7,351 | | Contract extraction and R&D services | $849 | $616 | | **Total** | **$24,215** | **$23,071** | [Natural Astaxanthin Products (BioAstin®)](index=6&type=section&id=Natural%20Astaxanthin%20Products) BioAstin® astaxanthin, 65% of FY25 net sales, is a GRAS-certified antioxidant cultivated from microalgae using proprietary systems, sold in various forms, facing global competition - Astaxanthin products accounted for approximately **65%** of the company's net sales for the fiscal year ended March 31, 2025[20](index=20&type=chunk) - The company utilizes a proprietary PhytoDome Closed Culture System to grow large volumes of contaminant-free Haematococcus culture for astaxanthin production[22](index=22&type=chunk) - BioAstin® is sold as a packaged consumer product through Nutrex Hawaii and in liquid lipid form as a raw ingredient to other manufacturers[26](index=26&type=chunk) [Spirulina Products (Hawaiian Spirulina Pacifica®)](index=8&type=section&id=Spirulina%20Products) Hawaiian Spirulina Pacifica®, 32% of FY25 net sales, is a GRAS-certified superfood produced in open ponds using a proprietary drying process, competing with Indian and Chinese firms - Hawaiian Spirulina Pacifica® represented approximately **32%** of net sales in fiscal year 2025[29](index=29&type=chunk) - The product is dried using a proprietary low-oxygen Ocean-Chill Drying process to preserve high levels of antioxidant carotenoids and other nutrients[35](index=35&type=chunk) - Direct competition in the spirulina market comes from Parry Nutraceuticals (India), Earthrise Nutritionals, LLC, and several farms in China[40](index=40&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, financial (going concern, debt non-compliance), market, and ownership concentration risks due to its single-location agricultural process - The company's single production facility in Hawaii is susceptible to natural disasters like earthquakes, tsunamis, and hurricanes, which could cause significant business interruption[63](index=63&type=chunk) - Recurring losses and negative cash flows from operations raise substantial doubt about the company's ability to continue as a going concern[101](index=101&type=chunk)[100](index=100&type=chunk) - The company has defaulted on debt covenants in previous years and was not in compliance with certain ratios as of March 31, 2025, requiring waivers from its lender. A failure to obtain future waivers could lead to default[99](index=99&type=chunk) - The company's two largest shareholders collectively own approximately **37.6%** of its common stock, giving them the ability to exert significant influence over business policies and affairs[81](index=81&type=chunk) [Cybersecurity](index=25&type=section&id=Item%201C.%20Cybersecurity) Cyanotech maintains a comprehensive cybersecurity program, overseen by the Board, with no material threats identified to date - The company has a cybersecurity risk management program that includes risk assessments, an incident response plan, and employee training[106](index=106&type=chunk)[111](index=111&type=chunk) - The Board of Directors oversees the cybersecurity program, while executive officers are responsible for daily management of material risks[108](index=108&type=chunk) - As of the report date, the company has not identified any cybersecurity risks that have materially affected its business, strategy, or financial condition[107](index=107&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) The company's main 96-acre facility in Hawaii is leased until 2035/2037, secured by a $3.0 million mortgage, with additional rented warehouse space in California - The main facility is on **96 acres** in Kailua-Kona, Hawaii, leased from the State of Hawaii with leases expiring in 2035 and 2037[109](index=109&type=chunk) - The company's interest in the NELHA leases is mortgaged to secure approximately **$3.0 million** of debt[109](index=109&type=chunk) [Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) As of March 31, 2025, the company had no significant outstanding legal matters, though it may face litigation in the normal course of business - As of March 31, 2025, the company had no significant outstanding legal matters[110](index=110&type=chunk) [PART II](index=26&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Cyanotech's common stock trades on OTCQB, with no cash dividends paid or anticipated due to loan restrictions, and details on equity compensation plans are provided - The company's common stock is traded on the OTCQB Venture Market with the symbol "CYAN"[112](index=112&type=chunk) - The company is prohibited from declaring common stock dividends without prior written consent from a lender and does not anticipate paying any[113](index=113&type=chunk) Equity Compensation Plans as of March 31, 2025 | Description | Shares | | :--- | :--- | | Shares to be issued upon exercise of options and RSUs | 339,638 | | Weighted average exercise price | $2.09 | | Shares available for future grant | 1,237,031 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY25 net sales increased to **$24.2 million** due to bulk sales growth, while operating loss improved to **$(2.5) million**; however, recurring losses and debt non-compliance raise going concern doubts - The company sustained operating losses and negative cash flows, and was not in compliance with two debt covenants as of March 31, 2025, raising substantial doubt about its ability to continue as a going concern[133](index=133&type=chunk) - To address cash flow challenges, management is continuing cost-saving initiatives, including aligning production with demand, maintaining reduced headcount, and eliminating certain discretionary expenses[138](index=138&type=chunk) Consolidated Performance Summary ($ in thousands) | Metric | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net sales | $24,215 | $23,071 | | Gross profit | $6,876 | $5,945 | | Gross margin | 28.4% | 25.8% | | Operating loss | $(2,508) | $(4,592) | | Net loss | $(3,203) | $(5,267) | [Results of Operations](index=29&type=section&id=Results%20of%20Operations) FY25 net sales increased by **$1.1 million (5.0%)** due to bulk sales growth, improving gross profit margin to **28.4%** and reducing operating expenses by **$1.2 million (10.9%)** - The **5.0%** increase in net sales for FY2025 was driven by a **$1.9 million** increase in bulk sales, offset by a **$1.0 million** decrease in packaged sales[127](index=127&type=chunk)[129](index=129&type=chunk) - Gross profit as a percentage of net sales increased by **2.6 percentage points** in FY2025 due to higher production volumes, which resulted in lower production costs[130](index=130&type=chunk) Net Sales by Product and Type ($ in thousands) | Category | FY 2025 | FY 2024 | | :--- | :--- | :--- | | **Packaged Sales** | | | | Astaxanthin | $13,145 | $13,613 | | Spirulina | $5,223 | $5,779 | | **Total Packaged** | **$18,368** | **$19,392** | | **Bulk Sales** | | | | Astaxanthin | $2,593 | $1,491 | | Spirulina | $2,405 | $1,572 | | **Total Bulk** | **$4,998** | **$3,063** | | **Contract Services** | **$849** | **$616** | [Liquidity and Going Concern](index=31&type=section&id=Liquidity%20and%20Going%20Concern) Recurring losses and negative cash flows raise substantial doubt about the company's going concern, with cash and working capital at **$0.3 million** and reliance on a **$4.0 million** related-party line of credit - As of March 31, 2025, the company had cash of **$0.3 million** and working capital of **$0.3 million**, down from **$0.7 million** and **$2.0 million** respectively, at March 31, 2024[134](index=134&type=chunk) - The company was not in compliance with its debt service coverage ratio and current ratio covenants as of March 31, 2025, but received a waiver from the bank on June 4, 2025[136](index=136&type=chunk) - The company has a revolving loan facility with a related party for up to **$4.0 million**, with **$3.0 million** outstanding as of March 31, 2025. This facility expires in April 2026[135](index=135&type=chunk) [Cash Flows](index=33&type=section&id=Cash%20Flows) FY25 cash used in operations was **$1.2 million** due to a **$3.2 million** net loss, with financing activities providing **$1.0 million**, resulting in a **$0.5 million** overall cash decrease - Cash provided by financing activities in FY2025 was primarily from **$1.8 million** in draws on the related party line of credit, offset by **$0.8 million** in debt service and paydowns[148](index=148&type=chunk) Summary of Cash Flows (in thousands) | Activity | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Cash from Operating Activities | $(1,193) | $(455) | | Cash from Investing Activities | $(247) | $(381) | | Cash from Financing Activities | $990 | $569 | | **Net Decrease in Cash** | **$(450)** | **$(267)** | [Financial Statements and Supplementary Data](index=37&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The financial statements, including the auditor's "Going Concern" warning, detail a FY25 net loss of **$3.2 million**, an accumulated deficit of **$26.1 million**, and **$8.9 million** in stockholders' equity - The auditor's report explicitly includes a "Going Concern" paragraph, citing recurring losses, negative cash flows, and non-compliance with debt covenants as conditions that raise substantial doubt about the company's ability to continue as a going concern[165](index=165&type=chunk)[172](index=172&type=chunk) Key Financial Metrics (in thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Assets | $23,490 | $25,112 | | Total Liabilities | $14,606 | $13,298 | | Total Stockholders' Equity | $8,884 | $11,814 | | Accumulated Deficit | $(26,104) | $(22,901) | Key Operating Results (in thousands) | Metric | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net Sales | $24,215 | $23,071 | | Gross Profit | $6,876 | $5,945 | | Loss from Operations | $(2,508) | $(4,592) | | Net Loss | $(3,203) | $(5,267) | | Net Loss Per Share | $(0.45) | $(0.81) | [Notes to Consolidated Financial Statements](index=43&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the company's going concern uncertainty, debt structure including covenant violations and waivers, equity compensation plans, and related-party loan transactions - Note 1 (Liquidity and Going Concern) states that recurring operating losses, negative cash flows, and debt covenant non-compliance raise substantial doubt about the company's ability to continue as a going concern[189](index=189&type=chunk) - Note 5 (Line of Credit and Term Debt) discloses that as of March 31, 2025, the company was not in compliance with debt covenants but received a waiver on June 4, 2025. It also details the classification of long-term debt as current due to the probability of future covenant violations[242](index=242&type=chunk)[243](index=243&type=chunk) - Note 15 (Related-Party Transactions) describes a loan facility from Skywords Family Foundation, Inc., an entity controlled by the company's Chairman. As of August 2024, this facility was increased to a **$4.0 million** revolving line of credit and the maturity was extended to 2026/2027[287](index=287&type=chunk)[292](index=292&type=chunk) [Controls and Procedures](index=64&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of March 31, 2025, with no material changes reported - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[297](index=297&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of March 31, 2025, based on the COSO framework[298](index=298&type=chunk) [Other Information](index=64&type=section&id=Item%209B.%20Other%20Information) The Chairman of the Board completed the purchase of **315,000** common shares under a Rule 10b5-1 trading plan between July and October 2024 - The Chairman of the Board, Michael Davis, completed the purchase of **315,000** shares of common stock under a Rule 10b5-1 trading plan between July and October 2024[302](index=302&type=chunk) [PART III](index=65&type=section&id=PART%20III) [Directors, Executive Officers of the Registrant and Corporate Governance](index=65&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20of%20the%20Registrant%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement, including adopted Codes of Ethics and Conduct - Information regarding directors and executive officers is incorporated by reference from the company's 2025 Proxy Statement[305](index=305&type=chunk) [Executive Compensation](index=65&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the company's definitive 2025 Proxy Statement - Information regarding executive compensation is incorporated by reference from the company's 2025 Proxy Statement[307](index=307&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=65&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information for beneficial owners and management is incorporated by reference from the company's definitive 2025 Proxy Statement - Information regarding security ownership is incorporated by reference from the company's 2025 Proxy Statement[308](index=308&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=65&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive 2025 Proxy Statement - Information regarding certain relationships and related transactions is incorporated by reference from the company's 2025 Proxy Statement[309](index=309&type=chunk) [Principal Accountant Fees and Services](index=65&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information concerning principal accountant fees and services is incorporated by reference from the company's definitive 2025 Proxy Statement - Information concerning principal accountant fees and services is incorporated by reference from the company's 2025 Proxy Statement[310](index=310&type=chunk) [PART IV](index=66&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=66&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements and schedules filed with the Form 10-K, confirming their inclusion in Item 8 and detailing all accompanying exhibits - This item lists the financial statements included in Item 8 and provides a comprehensive list of all exhibits filed with the Form 10-K[312](index=312&type=chunk)[314](index=314&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Financial statements reveal a $2.6 million net loss, declining assets, rising liabilities, and significant going concern issues [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $24.0 million, liabilities rose to $14.5 million, and stockholders' equity declined | Balance Sheet Items (In thousands) | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $359 | $707 | | Total current assets | $10,551 | $10,591 | | Total assets | $23,956 | $25,112 | | **Liabilities & Equity** | | | | Total current liabilities | $9,949 | $8,554 | | Total liabilities | $14,456 | $13,298 | | Accumulated deficit | $(25,477) | $(22,901) | | Total stockholders' equity | $9,500 | $11,814 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net sales increased for both periods, with the net loss significantly narrowing | Metric (In thousands) | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $6,172 | $5,582 | $17,915 | $17,101 | | Gross profit | $2,179 | $1,649 | $5,134 | $5,270 | | Loss from operations | $(50) | $(848) | $(2,066) | $(2,689) | | Net loss | $(224) | $(1,020) | $(2,576) | $(3,186) | | Basic and diluted EPS | $(0.03) | $(0.16) | $(0.37) | $(0.50) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased to $9.5 million, primarily due to the $2.6 million net loss - The accumulated deficit increased from **$(22.9) million** at March 31, 2024, to **$(25.5) million** at December 31, 2024, reflecting the ongoing net losses[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash used in operations increased to $1.1 million, with overall cash decreasing by $0.35 million | Cash Flow Activity (In thousands) | Nine Months Ended Dec 31, 2024 | Nine Months Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,136) | $(762) | | Net cash used in investing activities | $(163) | $(323) | | Net cash provided by financing activities | $951 | $772 | | **Net decrease in cash** | **$(348)** | **$(313)** | | Cash at end of period | $359 | $661 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail going concern issues, debt covenant violations, related-party financing reliance, and high customer concentration - The company's financial statements have been prepared assuming it will continue as a going concern, but recurring operating losses, negative cash flows, and debt covenant violations raise substantial doubt about this ability[25](index=25&type=chunk) - As of March 31, 2024, the company was not in compliance with its debt service coverage ratio and current ratio covenants with its bank[28](index=28&type=chunk)[61](index=61&type=chunk) A waiver was obtained on September 12, 2024, but the bank reserves the right to declare a default in the future[28](index=28&type=chunk)[61](index=61&type=chunk) - The company has a revolving line of credit with a related party (Skywords Family Foundation) that was increased to **$4,000,000** in August 2024[27](index=27&type=chunk)[63](index=63&type=chunk)[95](index=95&type=chunk) As of December 31, 2024, **$2,750,000** was outstanding on this facility[27](index=27&type=chunk)[63](index=63&type=chunk)[95](index=95&type=chunk) - Customer concentration is a significant risk, with two customers accounting for **88%** of the accounts receivable balance as of December 31, 2024[40](index=40&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses sales growth, gross margin decline, ongoing liquidity challenges, and strategic priorities [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Net sales increased for both periods, driven by bulk sales, with mixed gross margin performance Net Sales Comparison - Three Months Ended Dec 31 (in thousands) | Category | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Packaged sales | $4,914 | $4,968 | (1.1)% | | Total Bulk sales | $1,057 | $573 | 84.5% | | Contract extraction & R&D | $201 | $41 | 390.2% | | **Total sales** | **$6,172** | **$5,582** | **10.6%** | Net Sales Comparison - Nine Months Ended Dec 31 (in thousands) | Category | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Packaged sales | $13,810 | $14,642 | (5.7)% | | Total Bulk sales | $3,516 | $2,201 | 59.7% | | Contract extraction & R&D | $589 | $258 | 128.3% | | **Total sales** | **$17,915** | **$17,101** | **4.8%** | - Gross profit margin for Q3 FY2025 increased by **5.8 percentage points** to **35.3%** due to higher production volumes[101](index=101&type=chunk)[103](index=103&type=chunk) However, for the nine-month period, the margin decreased by **2.1 percentage points** to **28.7%** due to lower production volumes in the first half of the fiscal year[107](index=107&type=chunk) [Liquidity and Going Concern](index=26&type=section&id=Liquidity%20and%20Going%20Concern) Substantial doubt exists about going concern due to losses, low cash, and reliance on related-party financing - Sustained operating losses and debt covenant non-compliance raise substantial doubt about the company's ability to continue as a going concern[110](index=110&type=chunk) | Metric (in millions) | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | | Cash | $0.4 | $0.7 | | Working Capital | $0.6 | $2.0 | - The company relies on a related-party loan facility for liquidity, which allows borrowing up to **$4.0 million** and expires in April 2026[112](index=112&type=chunk) As of Dec 31, 2024, **$2.8 million** was outstanding[112](index=112&type=chunk) [Outlook](index=29&type=section&id=Outlook) Outlook focuses on production stabilization, consumer products, bulk sales, and cash management amid margin risks - Strategic priorities include: - Stabilizing production volume - Focusing on Nutrex Hawaiian consumer products - Exploring opportunities for bulk sales of Spirulina and Astaxanthin - Generating additional income from third-party extraction services[124](index=124&type=chunk) - The company acknowledges significant risks to future performance, including production challenges in its complex biological process, competition, and cost pressures, which could cause gross margins to decline[125](index=125&type=chunk)[126](index=126&type=chunk) - To manage cash effectively, the company plans to balance production with sales demand, minimize inventory costs, and judiciously manage expenses[127](index=127&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[135](index=135&type=chunk) - No changes occurred during the quarter ended December 31, 2024, that materially affected, or were reasonably likely to materially affect, the company's internal control over financial reporting[136](index=136&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no significant outstanding legal matters as of December 31, 2024 - There were no significant legal matters outstanding at December 31, 2024[138](index=138&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section incorporates by reference risk factors from the company's Annual Report on Form 10-K - The report incorporates by reference the risk factors detailed in the Form 10-K for the fiscal year ended March 31, 2024[139](index=139&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None reported[140](index=140&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) The report lists several exhibits filed, including CEO/CFO certifications, a press release, and Inline XBRL data - Exhibits filed include: - Certifications of CEO and CFO (Sections 302 & 906) - Press Release dated February 11, 2025 - Inline XBRL financial data[146](index=146&type=chunk)

Core Insights - The global spirulina beverages market is projected to reach USD 61 million by 2030, with a compound annual growth rate (CAGR) of 14.5% from 2025 to 2030, driven by a shift towards healthier, nutritious, and vegan food options [2][8] Market Overview - The consumption of spirulina has significantly increased, creating new opportunities for spirulina-derived beverages as consumers prefer healthy options over carbonated drinks [3] - Spirulina is recognized for its high protein content and beneficial properties, including hypolipidemic, antioxidant, and anti-inflammatory effects [3] Regional Insights - North America accounted for over 33.3% of the spirulina beverages market in 2024, attributed to high consumption of algae-based protein and a growing vegan population [4][10] - The trend towards plant-based protein sources is gaining traction as consumers seek healthier lifestyles [4] Distribution Channels - Hypermarkets and supermarkets represented the largest segment of the market with a share of over 60.9% in 2024, due to high visibility and the ability for consumers to physically verify products [5] - The online retail segment is expected to experience the highest CAGR during the forecast period, driven by increased internet and smartphone adoption [5] Market Dynamics - The report highlights the increasing popularity of vegan trends globally, as consumers seek eco-friendly food products that meet their nutritional needs [5] - The industry is still in its nascent stage, with few companies currently offering products, but there is potential for growth as existing companies in spirulina powder and extracts enter the beverage market [10] Financial Projections - The estimated market value for spirulina beverages in 2024 is USD 27.3 million, with a forecasted value of USD 61 million by 2030 [8]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financial position deteriorated with decreased assets, increased liabilities, wider net losses, and negative operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2024 | Mar 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $10,125 | $10,591 | -$466 | | **Total Assets** | $23,913 | $25,112 | -$1,199 | | **Total Current Liabilities** | $9,575 | $8,554 | +$1,021 | | **Total Liabilities** | $14,221 | $13,298 | +$923 | | **Total Stockholders' Equity** | $9,692 | $11,814 | -$2,122 | - The company's working capital significantly decreased from **$2,037 thousand** at March 31, 2024, to **$550 thousand** at September 30, 2024, indicating increased short-term liquidity pressure[9](index=9&type=chunk)[22](index=22&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2024 | Q2 2023 | 6 Months 2024 | 6 Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $5,845 | $6,373 | $11,743 | $11,519 | | **Gross Profit** | $1,479 | $2,088 | $2,956 | $3,620 | | **Loss from Operations** | $(975) | $(632) | $(2,016) | $(1,841) | | **Net Loss** | $(1,150) | $(797) | $(2,352) | $(2,166) | | **Net Loss Per Share (Basic & Diluted)** | $(0.16) | $(0.13) | $(0.34) | $(0.34) | - Net sales decreased by **8.3%** in Q2 2024 compared to Q2 2023, while the net loss widened by **44.3%**[11](index=11&type=chunk) - For the six-month period, net sales slightly increased by **1.9%**, but the net loss still grew by **8.6%** year-over-year[11](index=11&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) - Total stockholders' equity decreased from **$11.8 million** at March 31, 2024, to **$9.7 million** at September 30, 2024, primarily driven by a net loss of **$2.35 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(201) | $238 | | **Net cash used in investing activities** | $(105) | $(286) | | **Net cash provided by financing activities** | $379 | $310 | | **Net increase in cash** | $73 | $262 | - Cash from operations turned negative for the six months ended Sep 30, 2024, at **($201,000)** compared to a positive **$238,000** in the prior year, mainly due to the net loss[15](index=15&type=chunk) - The company relied on financing activities, including a **$750,000** draw on a related-party line of credit, to fund operations and debt payments[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company's ability to continue as a going concern is in **substantial doubt** due to sustained operating losses, negative cash flows, and non-compliance with debt covenants[21](index=21&type=chunk) - For the six months ended September 30, 2024, two major customers accounted for **32%** and **11%** of total net sales, indicating significant customer concentration risk[34](index=34&type=chunk) - The company received a waiver for debt covenant violations but reclassified its **$3.1 million** loan as a current liability due to the probability of future violations[54](index=54&type=chunk)[55](index=55&type=chunk) - The company has increasingly relied on a related-party loan facility from its Chairman, which was increased to **$4 million** and extended to April 2026[56](index=56&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses declining sales and margins, critical liquidity issues, and a cautious outlook amid operational challenges [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q2 Net Sales Breakdown (in thousands) | Product Line | Q2 2024 | Q2 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Packaged Sales** | $4,206 | $5,291 | $(1,085) | (20.5)% | | **Total Bulk Sales** | $1,342 | $966 | $376 | 38.9% | | **Contract Services** | $297 | $116 | $181 | 156.0% | | **Total Net Sales** | **$5,845** | **$6,373** | **$(528)** | **(8.3)%** | Six Months Net Sales Breakdown (in thousands) | Product Line | 6 Months 2024 | 6 Months 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Packaged Sales** | $8,895 | $9,673 | $(778) | (8.0)% | | **Total Bulk Sales** | $2,459 | $1,629 | $830 | 51.0% | | **Contract Services** | $389 | $217 | $172 | 79.3% | | **Total Net Sales** | **$11,743** | **$11,519** | **$224** | **1.9%** | - Gross profit margin decreased to **25.3%** in Q2 2025 from **32.8%** in the prior-year quarter, a **7.5 percentage point drop** due to a sales mix shift and higher inventory costs[101](index=101&type=chunk) - Operating expenses for Q2 2025 decreased by **$0.2 million** compared to the prior year, primarily due to lower online selling fees and advertising costs[102](index=102&type=chunk) [Liquidity and Going Concern](index=27&type=section&id=Liquidity%20and%20Going%20Concern) - Management explicitly states that conditions raise **"substantial doubt about our ability to continue as a going concern"**[108](index=108&type=chunk) - As of September 30, 2024, the company had only **$0.8 million** in cash and **$0.6 million** in working capital, down from **$0.7 million** and **$2.0 million** respectively at March 31, 2024[109](index=109&type=chunk) - The company is relying on a related-party loan facility of up to **$4.0 million** to provide liquidity, with **$2.0 million** outstanding as of September 30, 2024[110](index=110&type=chunk) - The company is implementing cost savings initiatives, including slowing inventory production and reducing headcount, to address cash flow challenges[113](index=113&type=chunk) [Outlook](index=30&type=section&id=Outlook) - The company's strategic focus is on stabilizing production, rationalizing market channels, and emphasizing its Nutrex Hawaiian consumer products[123](index=123&type=chunk) - Future gross profit margins may decline due to lower production volumes, pressure on input costs, and increased market competition[124](index=124&type=chunk) - Management warns that a prolonged sales downturn could impair the ability to generate sufficient cash and attract additional capital investment[126](index=126&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[134](index=134&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter that materially affected, or were reasonably likely to materially affect, these controls[135](index=135&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no significant outstanding legal matters as of the end of the reporting period - As of September 30, 2024, there were **no significant outstanding legal matters** involving the company[138](index=138&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the risk factors previously disclosed in the company's Annual Report on Form 10-K - The report incorporates by reference the risk factors discussed in the company's **Form 10-K** for the year ended March 31, 2024[138](index=138&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) The company discloses the initiation and completion of a Rule 10b5-1 trading plan by the Chairman of the Board - The Chairman of the Board entered into a Rule 10b5-1 trading plan to purchase **315,000 shares** of common stock, which was completed and terminated on October 1, 2024[139](index=139&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the report, including a note amendment and executive certifications - Key exhibits filed include the Third Amendment to the related-party promissory note, **Sarbanes-Oxley certifications** from the CEO and CFO, and the earnings press release[140](index=140&type=chunk)

Company Summary - CYAN experienced a stock price increase of 6.58%, currently trading at $0.81 per share with a trading volume of 6,855 shares and a turnover rate of 0.10% [1] - The company reported a revenue of $5.90 million but incurred a net loss of $1.20 million, resulting in an earnings per share (EPS) of -$0.17 [2] - The gross profit for CYAN was $1.48 million, and the price-to-earnings (P/E) ratio was -1.01 [2] Industry Summary - The broader packaged foods industry on the U.S. OTC market saw a decline of 0.48% [3] - Notable stocks in the sector, such as Stryve Foods, Inc. and Steakholder Foods Ltd, posted considerable gains [3] - Active stocks included Blue Star Foods Corp., 农米良品, and Stryve Foods, Inc., with turnover rates of 5.21%, 3.61%, and 3.42%, respectively [3] - Stocks with significant price volatility included Above Food Ingredients Inc C/Wts 28/06/2029 (To Pur Com), Clene Inc C/Wts 30/12/2025 (To Pur Com), and 幸福来, showing swings of 79.74%, 76.01%, and 32.33%, respectively [3]