PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the quarter ended June 30, 2024, reveal a net loss of $1.2 million, an improvement from a $1.4 million loss in the prior-year period, with total assets decreasing to $24.4 million and total liabilities increasing, raising substantial doubt about the Company's ability to continue as a going concern due to recurring operating losses, negative cash flows, and non-compliance with debt covenants [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Balance Sheet Items (In thousands) | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $10,369 | $10,591 | | **Total Assets** | $24,432 | $25,112 | | **Total Current Liabilities** | $10,162 | $8,554 | | **Total Liabilities** | $13,772 | $13,298 | | **Total Stockholders' Equity** | $10,660 | $11,814 | - Working capital significantly decreased from **$2,037,000** as of March 31, 2024, to **$207,000** as of June 30, 2024[21](index=21&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Operating Results (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Net Sales** | $5,898 | $5,146 | | **Gross Profit** | $1,476 | $1,532 | | **Loss from Operations** | $(1,041) | $(1,209) | | **Net Loss** | $(1,202) | $(1,369) | | **Net Loss Per Share (Basic & Diluted)** | $(0.17) | $(0.22) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Summary (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $243 | $(596) | | **Net cash used in investing activities** | $(47) | $(150) | | **Net cash (used in) provided by financing activities** | $(183) | $420 | | **Net increase (decrease) in cash** | $13 | $(326) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The Company's financial statements have been prepared on a going concern basis, but recurring operating losses, negative cash flows, and debt covenant violations raise substantial doubt about its ability to continue as a going concern[20](index=20&type=chunk) - The Company has significant customer concentration risk: for the three months ended June 30, 2024, two customers accounted for **31%** and **13%** of total net sales, and as of June 30, 2024, two customers accounted for **89%** of the accounts receivable balance[29](index=29&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, and is seeking a waiver with no assurance it will be granted[23](index=23&type=chunk)[46](index=46&type=chunk) - The Company has a loan facility with a related party, Skywords Family Foundation, Inc., controlled by the Company's Chairman, with an outstanding balance of **$1.0 million** on the term note and **$1.25 million** on the revolving line of credit as of June 30, 2024[47](index=47&type=chunk)[48](index=48&type=chunk)[71](index=71&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net sales increased 14.6% from astaxanthin demand, but gross margin fell to 25.0% due to higher costs, as management addresses liquidity and going concern risks [Results of Operations](index=23&type=section&id=Results%20of%20Operations) | Net Sales by Product (In thousands) | Q1 FY2025 | Q1 FY2024 | % Change | | :--- | :--- | :--- | :--- | | **Astaxanthin Sales** | $4,035 | $3,108 | 29.8% | | **Spirulina Sales** | $1,771 | $1,937 | (8.6)% | | **Total Net Sales** | $5,898 | $5,146 | 14.6% | - The increase in net sales was driven by a **159.2%** surge in bulk astaxanthin sales and a **16.1%** increase in packaged astaxanthin sales, reflecting higher demand and timing of customer orders[80](index=80&type=chunk) - Gross profit as a percentage of net sales decreased by **4.8 percentage points** to **25.0%**, primarily due to higher costs associated with lower production volumes[81](index=81&type=chunk) - Operating expenses decreased by **$0.2 million**, mainly due to lower online selling fees and reduced research and development costs from a lower headcount[81](index=81&type=chunk) [Liquidity and Going Concern](index=24&type=section&id=Liquidity%20and%20Going%20Concern) - 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 as of March 31, 2024[82](index=82&type=chunk) - As of June 30, 2024, the company had cash of **$0.7 million** and working capital of **$207 thousand**, a significant decrease from **$2.0 million** in working capital at March 31, 2024[83](index=83&type=chunk) - To address cash flow challenges, management is continuing cost-saving initiatives, including aligning production with demand, maintaining reduced headcount, and eliminating discretionary expenses[87](index=87&type=chunk) [Cash Flows](index=25&type=section&id=Cash%20Flows) - Cash from operating activities was a positive **$243,000** for the quarter, an improvement from a use of **$596,000** in the prior year, driven by lower inventories and higher accounts payable[89](index=89&type=chunk)[92](index=92&type=chunk) - Cash used in financing activities was **$183,000**, consisting of debt service payments and a **$120,000** paydown on the 2023 term loan[89](index=89&type=chunk) [Outlook](index=27&type=section&id=Outlook) - The company's strategic direction is to stabilize production, rationalize market channels, and focus on its Nutrex Hawaiian consumer products while also exploring bulk sales and third-party extraction services[96](index=96&type=chunk) - Future gross profit margins may be negatively impacted by lower production volumes, pressure on input costs, and increased market competition[97](index=97&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective as of June 30, 2024, with no material changes to internal control over financial reporting - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures are effective[107](index=107&type=chunk) - No changes occurred during the quarter ended June 30, 2024, that materially affected, or were reasonably likely to materially affect, the company's internal control over financial reporting[108](index=108&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no significant outstanding legal matters as of June 30, 2024 - There were no significant legal matters outstanding at June 30, 2024[110](index=110&type=chunk) [Other Items (1A, 2, 3, 5)](index=31&type=section&id=Other%20Items%20(1A,%202,%203,%205)) No new risk factors, unregistered equity sales, senior security defaults, or other material information were reported during the period - For a discussion of risk factors, the company refers to its Form 10-K for the year ended March 31, 2024[111](index=111&type=chunk) - The company reported "None" for Unregistered Sales of Equity Securities, Defaults upon Senior Securities, and Other Information[111](index=111&type=chunk)[112](index=112&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) The report includes standard exhibits such as CEO/CFO certifications (SOX 302 and 906), a press release, and Inline XBRL financial statements - Exhibits filed with the report include CEO/CFO certifications (302 and 906), a press release dated August 7, 2024, and Inline XBRL data files[114](index=114&type=chunk)

Part I [Business](index=5&type=section&id=Item%201.%20Business) Cyanotech is a global leader in microalgae-derived natural products, primarily BioAstin® Astaxanthin and Hawaiian Spirulina, cultivated at its unique Hawaiian facility - The company is a **world leader** in producing high-value natural products from microalgae, operating from a **96-acre facility** in Kona, Hawaii, which offers unique environmental advantages for cultivation[15](index=15&type=chunk)[17](index=17&type=chunk) - The company's two major product lines are **BioAstin® Hawaiian Astaxanthin®** (a powerful antioxidant) and **Hawaiian Spirulina Pacifica®** (a nutrient-rich superfood)[19](index=19&type=chunk) Net Sales by Product Line (in thousands) | Product Line | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Natural astaxanthin products (BioAstin®)** | $15,104 | $14,209 | $17,378 | | **Spirulina products (Hawaiian Spirulina Pacifica®)** | $7,351 | $8,355 | $17,990 | | **Contract extraction and R&D services** | $616 | $614 | $600 | | **Total** | **$23,071** | **$23,178** | **$35,968** | - For fiscal year 2024, two major customers accounted for **34%** and **17%** of total net sales, indicating significant customer concentration[44](index=44&type=chunk) - The company's patents for production methods and BioAstin® usage have **expired**, now relying on trade secrets, know-how, and its unique location for competitive advantage[46](index=46&type=chunk)[47](index=47&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, market, and financial risks, including facility vulnerability, intense competition, and going concern doubts - The company's operations are concentrated at a single facility in Hawaii, making it vulnerable to natural disasters, weather patterns, and resource shortages like water and power[60](index=60&type=chunk)[62](index=62&type=chunk)[65](index=65&type=chunk) - The company faces significant financial risk, with recurring losses, negative cash flow, and an accumulated deficit of approximately **$22.9 million** as of March 31, 2024, raising substantial doubt about its ability to continue as a going concern[104](index=104&type=chunk)[105](index=105&type=chunk) - The company has defaulted on debt covenants related to its debt service coverage ratio and current ratio as of March 31, 2024, and is seeking a waiver from its lender, with failure to obtain a waiver potentially leading to default and bankruptcy[102](index=102&type=chunk)[103](index=103&type=chunk) - Significant customer concentration risk exists, with the top ten customers generating **69%** of net sales in fiscal 2024, where the loss of a major customer could materially reduce revenues[75](index=75&type=chunk) - Two largest shareholders collectively own approximately **32.7%** of the common stock, which could allow them to exert substantial influence over the company's business and policies[84](index=84&type=chunk) [Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) The company maintains a cybersecurity risk management program with Board oversight, reporting no material incidents to date - The company has a cybersecurity risk management program that includes risk assessments, an incident response plan, and employee training, with oversight from the Board of Directors[109](index=109&type=chunk)[111](index=111&type=chunk) - As of the end of fiscal year 2024, the company has not identified any cybersecurity risks or incidents that have materially affected its business, operations, or financial condition[110](index=110&type=chunk) [Properties](index=24&type=section&id=Item%202.%20Properties) The company's primary 96-acre facility and headquarters are in Kailua-Kona, Hawaii, under long-term leases expiring in 2035 and 2037 - The main operations are on a **96-acre** property in Kailua-Kona, Hawaii, leased from the State of Hawaii with leases expiring in **2035** and **2037**[112](index=112&type=chunk) [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) As of March 31, 2024, the company reported no significant outstanding legal proceedings - As of March 31, 2024, the company had no significant outstanding legal proceedings[113](index=113&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on OTCQB under 'CYAN', with no history of cash dividends due to lender restrictions - The company's common stock is traded on the **OTCQB Venture Market** under the symbol "**CYAN**"[114](index=114&type=chunk) - The company has never paid cash dividends and is prohibited from doing so by an existing loan agreement[115](index=115&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses declining sales, operating losses, and liquidity challenges, including debt covenant violations and going concern doubts, despite cost-saving efforts [Results of Operations](index=28&type=section&id=Results%20of%20Operations) FY2024 saw a slight sales decrease to $23.1 million, with worsening operating and net losses, and a decline in gross profit margin to 25.8% Consolidated Performance Summary ($ in thousands) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net sales | $23,071 | $23,178 | $35,968 | | Gross profit | $5,945 | $7,259 | $13,566 | | Gross profit % | 25.8% | 31.3% | 37.7% | | Operating (loss) income | $(4,592) | $(2,920) | $2,574 | | Net (loss) income | $(5,267) | $(3,440) | $2,154 | - In FY2024, net sales decreased **0.5%** to **$23.1 million**, with a **$1.0 million (12.0%)** decrease in spirulina sales largely offset by a **$0.9 million (6.3%)** increase in astaxanthin sales[130](index=130&type=chunk) - Gross profit margin decreased by **5.5 percentage points** in FY2024 to **25.8%**, caused by higher per-kilogram costs from lower production volumes and inventory write-downs[133](index=133&type=chunk) - Bulk sales saw a significant decline of **44.5%** in FY2024, with spirulina bulk sales dropping **55.6%** and astaxanthin bulk sales down **24.8%**, while total packaged sales grew **13.8%**[131](index=131&type=chunk)[132](index=132&type=chunk) [Liquidity and Going Concern](index=30&type=section&id=Liquidity%20and%20Going%20Concern) Recurring losses, negative cash flows, and debt covenant violations raise substantial doubt about the company's ability to continue as a going concern - Recurring operating losses, negative cash flows, and debt covenant violations have raised substantial doubt about the company's ability to continue as a going concern[139](index=139&type=chunk)[190](index=190&type=chunk) - As of March 31, 2024, the company was not in compliance with the debt service coverage ratio and current ratio covenants required by its lender, First Foundation Bank, and is seeking a waiver[142](index=142&type=chunk)[193](index=193&type=chunk) - The company is utilizing a **$2.0 million** revolving line of credit from a related party, with **$1.25 million** outstanding as of March 31, 2024, which expires in April 2025[141](index=141&type=chunk)[192](index=192&type=chunk) - In December 2023, the company raised net proceeds of **$388,000** for working capital through a private placement of **400,000 shares** of common stock at **$1.00 per share**[143](index=143&type=chunk)[194](index=194&type=chunk) [Cash Flows](index=32&type=section&id=Cash%20Flows) FY2024 operating cash outflow improved to $0.5 million, with overall cash decreasing by $0.3 million due to investing and financing activities Summary of Cash Flows ($ in thousands) | Activity | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Operating activities** | $(455) | $(2,100) | $2,379 | | **Investing activities** | $(381) | $(1,068) | $(1,270) | | **Financing activities** | $569 | $1,553 | $(2,287) | | **Net decrease in cash** | **$(267)** | **$(1,615)** | **$(1,178)** | [Financial Statements and Supplementary Data](index=35&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements, including balance sheets and income statements, with the auditor's report highlighting going concern doubts - The independent auditor's report includes a "Going Concern" paragraph, citing operating 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[172](index=172&type=chunk) Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $10,591 | $13,496 | | **Total Assets** | $25,112 | $29,728 | | **Total Current Liabilities** | $8,554 | $8,103 | | **Total Liabilities** | $13,298 | $13,381 | | **Total Stockholders' Equity** | $11,814 | $16,347 | Consolidated Statements of Operations Data (in thousands) | Account | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | | **Net sales** | $23,071 | $23,178 | $35,968 | | **Gross profit** | $5,945 | $7,259 | $13,566 | | **(Loss) income from operations** | $(4,592) | $(2,920) | $2,574 | | **Net (loss) income** | $(5,267) | $(3,440) | $2,154 | | **Basic and Diluted EPS** | $(0.81) | $(0.55) | $0.35 | - In FY2024, the company expensed **$206,000** in abnormal production costs and **$467,000** in other non-inventoriable fixed costs to cost of sales, primarily due to regenerating fallowed spirulina ponds and lower overall production volumes[230](index=230&type=chunk)[232](index=232&type=chunk) - The company has a loan and a revolving line of credit with a related party (Skywords Family Foundation, Inc., controlled by the Chairman), with outstanding balances of **$1.0 million** on the term loan and **$1.25 million** on the revolver as of March 31, 2024[244](index=244&type=chunk)[245](index=245&type=chunk)[290](index=290&type=chunk) - A full valuation allowance of **$4.4 million** has been recorded against deferred tax assets as of March 31, 2024, due to cumulative losses in recent years, indicating it is more likely than not that these assets will not be realized[279](index=279&type=chunk)[280](index=280&type=chunk) [Controls and Procedures](index=62&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, 2024 - Management concluded that the company's disclosure controls and procedures, as well as its internal control over financial reporting, were effective as of March 31, 2024[293](index=293&type=chunk)[294](index=294&type=chunk) [Other Information](index=62&type=section&id=Item%209B.%20Other%20Information) The Chairman of the Board initiated a Rule 10b5-1 trading plan on March 6, 2024, to purchase 315,000 shares - The Chairman of the Board, Michael Davis, entered into a Rule 10b5-1 trading plan on March 6, 2024, to purchase **315,000 shares** of company stock[298](index=298&type=chunk) Part III [Directors, Executive Officers, Compensation, Security Ownership, and Accountant Fees](index=63&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%20and%2014) Information on directors, executive compensation, security ownership, and accountant fees is incorporated by reference from the 2024 Proxy Statement - Information regarding directors, executive officers, compensation, security ownership, and accountant fees is incorporated by reference from the company's definitive 2024 Proxy Statement[301](index=301&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=64&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including material contracts and certifications - This section contains the list of all financial statements, schedules, and exhibits filed with the Form 10-K, including material contracts and certifications[307](index=307&type=chunk)[309](index=309&type=chunk) [Signatures](index=69&type=section&id=Item%2016.%20Signatures) This section contains the formal signatures of the registrant's authorized officers and directors, certifying the report

Financial Data and Key Metrics Changes - Net sales for Q3 FY2024 were $5.582 million, a decrease of 5% from $5.891 million in Q3 FY2023 [7] - Gross profit for Q3 FY2024 was $1.649 million with a gross profit margin of 29.5%, compared to a gross profit of $1.764 million and a margin of 29.9% in Q3 FY2023 [7] - Operating loss for Q3 FY2024 was $848,000, an increase from an operating loss of $404,000 in the prior year [13] - Net loss for Q3 FY2024 was $1.020 million or $0.16 per diluted share, compared to a net loss of $598,000 or $0.10 per diluted share in the prior year [13] Business Line Data and Key Metrics Changes - The macroeconomic environment led to lower sales across the portfolio, particularly driven by a decline in Spirulina bulk sales [6] - The company has drawn down inventories of bulk Spirulina and Astaxanthin to conserve cash and align inventory with sales demand [8] Market Data and Key Metrics Changes - Industry data indicates that consumers are not reducing their consumption of dietary supplements but are shifting towards private label brands to save costs [6] - The market for bulk material is becoming increasingly price-sensitive, with many companies sourcing lower-priced international ingredients [6] Company Strategy and Development Direction - The company intends to enhance consumer education and transparency through social media channels [9] - Key additions to the team include a Head of Global Sales and Business Development to drive a more tailored approach to business-to-business sales [9] - The focus is on promoting premium quality and competitive advantages of naturally sourced microalgae from Hawaii [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the current operating environment is challenging due to lower sales and higher manufacturing costs [13] - The company is revitalizing its sales and marketing team to address these challenges [6] Other Important Information - The company had cash of $661,000 and working capital of $3.7 million as of the reporting date, down from $974,000 and $5.4 million, respectively, as of March 31, 2023 [8] Q&A Session Summary Question: Trends and inventories - Management commented on the drawdown of inventories of bulk Spirulina and Astaxanthin as part of a strategy to conserve cash by aligning inventory with sales demand [8] Question: Additional details on initiatives to increase sales - Management highlighted the need for transparency and consumer education regarding product ingredients, aligning with current consumer demands [15]

KAILUA KONA, Hawaii--(BUSINESS WIRE)--Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health dietary supplement products, announced financial results for the third quarter and first nine months of fiscal year 2024, ended December 31, 2023. Commenting on the third quarter fiscal year 2024 results, Cyanotech’s President and Chief Executive Officer, Matthew K. Custer, said: “ The macroeconomic environment led to lower sales across the portfoli ...

Financial Performance - As of December 31, 2023, the company reported a net loss of $3,186,000 compared to a net loss of $2,010,000 for the same period in 2022, indicating a year-over-year increase in losses of approximately 58.5%[32] - The company reported a net loss of $1,020,000 for the three months ended December 31, 2023, compared to a net loss of $598,000 for the same period in 2022, reflecting a 70.4% increase in loss[145] - Total net sales for the three months ended December 31, 2023, were $5,582,000, a decrease of 5.2% compared to $5,891,000 for the same period in 2022[70] - Operating expenses for the first nine months of fiscal 2024 were $8,000,000, primarily due to higher online selling fees[133] - The company recognized $24,000 and $94,000 of revenue from customer deposits during the nine months ended December 31, 2023, and 2022, respectively, indicating a decrease in revenue recognition from contract liabilities[47] Cash Flow and Liquidity - The company had cash of $661,000 and working capital of $3,747,000 as of December 31, 2023, down from $974,000 and $5,393,000, respectively, as of March 31, 2023[36] - The company experienced a decrease in cash used in operating activities, with a net cash used of $762,000 for the three months ended December 31, 2023, compared to $2,683,000 for the same period in 2022[32] - The company sustained operating losses and negative cash flows from operations, raising substantial doubt about its ability to continue as a going concern[134] Debt and Financing - The company has $3,282,000 of debt payable to the bank, requiring monthly principal and interest payments through August 2032[37] - The company’s debt service coverage ratio fell short of the bank's annual requirement, leading to a covenant waiver from the bank[37] - As of December 31, 2023, the outstanding balance on the 2023 Loan was $1,360,000, with an interest rate of 8.5%[54] - The company had $1,250,000 outstanding on the related party Revolver as of December 31, 2023, which allows borrowing up to $2,000,000[60] - Future principal payments due under loans total $4,282,000, with $3,282,000 due in the remainder of 2024[104] Sales and Revenue - For the nine months ended December 31, 2023, two customers accounted for 36% and 18% of total net sales, highlighting a significant reliance on major customers[44] - Packaged sales of astaxanthin for the three months ended December 31, 2023, were $3,691,000, up 18.5% from $3,113,000 in the prior year[70] - Total packaged sales for December 2023 reached $4,968,000, an increase of 16.6% compared to $4,260,000 in December 2022[130] - Astaxanthin packaged sales increased by 18.6% to $3,691,000 in December 2023 from $3,113,000 in December 2022[130] - Total bulk sales decreased by 57.4% to $573,000 in December 2023 from $1,345,000 in December 2022[130] - Contract extraction and R&D services revenue fell by 85.7% to $41,000 in December 2023 from $286,000 in December 2022[130] Cost Management - The company has implemented cost-saving initiatives, including reducing production and headcount, to address cash flow challenges stemming from lower sales[40] - The company reported abnormal production cost recovery of $73,000 for the three months ended December 31, 2023, compared to $64,000 for the same period in 2022[74] - Depreciation and amortization expenses for the three months ended December 31, 2023, were approximately $395,000, compared to $409,000 for the same period in 2022[76] - Operating lease costs for the nine months ended December 31, 2023, were $615,000, an increase from $517,000 in the same period of 2022[84] Stock and Compensation - The company had a total of 297,000 stock options outstanding at December 31, 2023, with a weighted average exercise price of $2.47[89] - Total unrecognized stock-based compensation expense related to unvested stock options was $79,000, expected to be expensed over 1.4 years[90] - The company issued 17,672 shares of fully vested restricted stock in April 2023, with no compensation expense recognized for this issuance[91] - As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested restricted stock units was $92,000, expected to be expensed over 1.6 years[115] - Compensation expense recognized for stock options was $24,000 for the three months ended December 31, 2023, compared to $25,000 for the same period in 2022[88] Assets and Liabilities - Total right-of-use assets as of December 31, 2023, were $4,409,000, a decrease from $4,776,000 as of March 31, 2023[86] - Total lease liabilities decreased to $4,400,000 from $4,758,000 over the same period[86] - Inventories decreased to $9,124,000 as of December 31, 2023, from $10,707,000 as of March 31, 2023[96] - Total long-term debt, net of current maturities, remained stable at $1,000,000 as of December 31, 2023[99] - The principal balance of the Skywords Note was $1,000,000 as of December 31, 2023, with an interest rate of 9.5%[150] Tax and Legal Matters - The effective tax rate for the three months ended December 31, 2023, was (1.4%) compared to (0.1%) for the same period in 2022[142] - The company continues to carry a full valuation allowance on its net deferred tax assets, reflecting ongoing uncertainty regarding realization[142] - The company incurred legal expenses of $8,000 related to the private placement transaction[141]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarterly Period Ended September 30, 2023 Or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission File Number 0-14602 CYANOTECH CORPORATION (Exact name of registrant as specified in its charter) Nevada 91-1206026 (State or other jurisd ...

| --- | --- | --- | --- | --- | |-------------------------|-------|------------|---------------------------------------|-------------| | | | | | | | | | | | | | | | Authorized | As of June 30, 2023 Available | Outstanding | | | | | | | | 2016 Plan | | 1,300,000 | 873,737 | 310,756 | | | | | | | | 2014 Directors Plan | | 650,000 | 205,534 | 12,000 | | 2004 Directors Plan | | — | — | 6,000 | | Total | 14 | 1,950,000 | 1,079,271 | 328,756 | | --- | --- | --- | --- | --- | --- | --- | |------------------------- ...

Table of Contents FORM 10-K CYANOTECH CORPORATION (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended March 31, 2023 Or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission File Number 0-14602 Nevada 91-1206026 (State or other jurisdiction ...

(Exact name of registrant as specified in its charter) Nevada 91-1206026 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number) 73-4460 Queen Kaahumanu Hwy. #102, Kailua-Kona, HI 96740 (Address of principal executive offices) (808) 326-1353 (Registrant's telephone number) Not Applicable (Former name, former address and former fiscal year, if changed since last report) ● Failure of capital projects to operate as expected or meet expected results. | --- | --- | --- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarterly Period Ended September 30, 2022 Or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission File Number 0-14602 CYANOTECH CORPORATION (Exact name of registrant as specified in its charter) Nevada 91-1206026 (State or other jurisd ...