CYAN Cyanotech Corp

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Report and other presentations made by Cyanotech Corporation (“CYAN”) and its subsidiary contain “forward-looking statements,” which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as “expects,” “anticipates,” “intends,” “plan,” “believes,” “predicts”, “estimates” or similar expressions. In addition, any statement concerning future financial performance, ongoing business strategies or prospects and possible future actions are also forward-looking statements. Forward-looking statements are based upon current expectations and projections about future events and are subject to risks, uncertainties and the accuracy of assumptions concerning CYAN and its subsidiary (collectively, the “Company”), the performance of the industry in which CYAN does business, and economic and market factors, among other things. These forward-looking statements are not guarantees of future performance. You should not place undue reliance on forward-looking statements.

 

Forward-looking statements speak only as of the date of the Report, presentation or filing in which they are made. Except to the extent required by the Federal Securities Laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Our forward-looking statements in this Report include, but are not limited to:

 

	●	Statements relating to our business strategy;
	●	Statements relating to our business objectives; and
	●	Expectations concerning future operations, profitability, liquidity and financial resources.

 

These forward-looking statements are subject to risk, uncertainties and assumptions about us and our operations that are subject to change based on various important factors, some of which are beyond our control. The following factors, among others, could cause our financial performance to differ significantly from the goals, plans, objectives, intentions and expectations expressed in our forward-looking statements:

 

	●	Environmental restrictions, soil and water conditions, levels of sunlight and seasonal weather patterns, particularly heavy rain, wind and other hazards;
	●	Consumer perception of our products due to adverse scientific research or findings, publicity regarding dietary supplements, litigation, regulatory investigations or other events, conditions and circumstances involving the Company which receive national media coverage;
	●	Effects of competition, including tactics and locations of competitors and operating and market competition;
	●	Demand for our products, the quantities and qualities thereof available for sale and levels of customer satisfaction, including significant unforeseen fluctuations in global demand for products similar to our products;
	●	Changes in purchasing practices among our customers, particularly our largest customers;
	●	Our dependence on the experience, continuity and competence of our executive officers and other key employees;
	●	The added risks associated with or attributed to the current local, national and world economic conditions, including but not limited to, the volatility of crude oil prices, inflation and currency fluctuations;
	●	Labor shortages could restrict our ability to operate or grow our business or result in increased labor costs that could adversely affect our results of operations;
	●	The effects of global outbreaks of pandemics or contagious diseases or fear of such outbreaks, including on our supply chain, the demand for our products, our ability to expand and produce in new geographic markets or the timing of such expansion efforts, and on overall economic conditions and consumer confidence and spending levels;
	●	Changes in domestic and/or foreign laws, regulations or standards, affecting nutraceutical products or our methods of operation;
	●	Access to available and reasonable financing on a timely basis;
	●	The availability of financing on acceptable terms to provide operating capital in the event of an unexpected cash shortfall;
	●	The Company’s inability to generate enough revenues to meet its obligations or repay maturing indebtedness;
	●	Failure of capital projects to operate as expected or meet expected results;
	●	Changes in laws, corporate governance requirements and tax rates, regulations, accounting standards and the application to us or the dietary supplement products industry of new decisions by courts, regulators or other government authorities;
	●	Legal costs associated with any legal proceedings, and the potential direct and indirect cost and other effects on our business or financial condition resulting from any legal proceedings
	●	Risk associated with the geographic concentration of our business;
	●	Acts of war, terrorist incidents or natural disasters; and
	●	Other risks or uncertainties described elsewhere in this Report and in other periodic reports previously and subsequently filed by us with the Securities and Exchange Commission.

 

 

PART I

Item 1.

Business

 

Unless otherwise indicated, all references in this report to the “Company”, “we”, “us”, “our”, and “Cyanotech” refer to Cyanotech Corporation and its wholly owned subsidiary, Nutrex Hawaii, Inc. (“Nutrex Hawaii” or “Nutrex”), a Hawaii corporation.

 

General 

 

We are a world leader in the production of high value natural products derived from microalgae. Incorporated in 1983, we are guided by the principle of providing beneficial, quality microalgal products for health and human nutrition in a sustainable, reliable and environmentally sensitive operation. We are Good Manufacturing Practices ("GMP") certified by Merieux NutriSciences, reinforcing our commitment to quality in our products, quality in our relationships (with our customers, suppliers, employees and the communities we live in), and quality of the environment in which we work. Our products include:

 

	●	BioAstin® Hawaiian Astaxanthin® - a powerful, natural antioxidant clinically studied to support and maintain the body’s natural inflammatory response, to enhance skin, and to support eye, joint and immune health*. It has expanding applications as a human dietary supplement and dietary ingredient; and
	●	Hawaiian Spirulina Pacifica® - a nutrient-rich superfood dietary supplement clinically supported for natural energy, immune system support, cardiovascular health and as a source of antioxidant carotenoids*

 

*These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

 

Microalgae are a diverse group of microscopic plants that have a wide range of physiological and biochemical characteristics and contain, among other things, high levels of natural protein, amino acids, vitamins, pigments and enzymes. Microalgae have the following properties that make commercial production attractive: (1) microalgae grow much faster than land grown plants, often up to 100 times faster; (2) microalgae have uniform cell structures with no bark, stems, branches or leaves, permitting easier extraction of products and higher utilization of the microalgae cells; and (3) the cellular uniformity of microalgae makes it practical to control the growing environment in order to optimize a particular cell characteristic. Efficient and effective cultivation of microalgae requires consistent light, warm temperatures, low rainfall and proper chemical balance in a very nutrient-rich environment, free of environmental contaminants and unwanted organisms. This is a challenge that has motivated us to design, develop and implement proprietary production and harvesting technologies, systems and processes in order to commercially produce human dietary supplement products derived from microalgae.

 

Our production of these products at our 96-acre facility on the Kona Coast of the island of Hawaii provides several benefits. We selected the Keahole Point location in order to take advantage of relatively consistent warm temperatures, sunshine and low levels of rainfall needed for optimal cultivation of microalgae. This location also offers us access to cold deep ocean water, drawn from an offshore depth of 2,000 feet, which we use in our Ocean-Chill Drying system to eliminate the oxidative damage caused by standard drying techniques and as a source of trace nutrients for microalgal cultures. The area is also designated a Biosecure Zone, with tight control of organisms allowed into the area and free of genetically modified organisms ("GMO"). We believe that our technology, systems, processes and favorable growing location generally permit year-round harvest of our microalgal products in a cost-effective manner.

 

Our Business

 

We operate entirely in one operating segment, the cultivation and production of microalgae into high-value, high-quality natural health and nutrition products. We cultivate, on a large-scale basis, two microalgal species from which our two major product lines, natural astaxanthin products and spirulina products, are derived. We record revenue and cost of sales information by product category, but do not record operating expenses by such product category.

 

The following table sets forth, for the three years ended March 31, 2024, the net sales contributed by each of our major product lines and extraction and research and development (“R&D”) services (in thousands): 

 

		Net Sales
		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

 

 

Cost of sales for contract extraction and R&D services for the years ended March 31, 2024, 2023 and 2022 were $358,000, $441,000 and $439,000, respectively. 

 

Natural Astaxanthin Products

 

We commenced commercial production of natural astaxanthin in 1997 and in 1999 BioAstin®, our natural astaxanthin product was cleared for sale in the U.S. Dietary Supplement market, and in 2007, was approved for sale in Europe. Astaxanthin represented approximately 65% of our net sales in the fiscal year ended March 31, 2024. Astaxanthin’s antioxidant properties are believed to surpass many of the antioxidant properties of vitamin C, vitamin E, beta-carotene and other carotenoids. Independent scientific studies indicate that in certain models, natural astaxanthin has up to 100 times the antioxidant activity of vitamin E and 4 times the antioxidant activity of beta-carotene. In addition, a growing body of scientific literature suggests that natural astaxanthin has beneficial properties as an anti-inflammatory, with additional benefits for joint, skin, eye and immune health. 

 

BioAstin® is generally recognized as safe ("GRAS") as determined by the United States Food and Drug Administration ("FDA"). Our all natural BioAstin® is cultivated without the use of herbicides or pesticides and is not genetically modified ("non-GMO"). In fiscal 2012, we applied for a new dietary ingredient ("NDI"), with the United States FDA, providing for a daily dosage of 12mg of astaxanthin which was reviewed without comment. BioAstin® holds several independent third-party quality certifications including: iGen Non-GMO, Gluten Intolerance Group’s Gluten Free, Detox Project Glyphosate Free, and Informed Choice, for products produced up to and including the fiscal year ended March 31, 2024.

 

We produce natural astaxanthin from Haematococcus pluvialis microalgae grown in a combination of fresh water and a metered amount of nutrient-rich deep ocean water (containing essential trace elements), drawn from a depth of 2,000 feet below sea level, supplemented with nutrients. As these algae are extremely susceptible to contamination by unwanted algae, protozoa and amoebae, we developed a proprietary system known as the PhytoDome Closed Culture System or PhytoDome CCS to overcome this problem. Using this proprietary system at the early culture stage, we have generally been able to grow consistently large volumes of contaminant-free Haematococcus culture, subject to quarterly seasonality.

 

For the final stage of cultivation, the Haematococcus algae is transferred to open ponds where an environmental stress is applied causing the algae to form spores which accumulate high levels of astaxanthin. The astaxanthin crop in each pond is circulated by paddlewheels to keep an even blend of nutrients in suspension and a uniform exposure of the algae to sunlight, which is a major component of cultivation. Once ready for harvest, the media containing these spores is transported through underground pipes to our astaxanthin processing building where the culture media and algal spores are separated. Astaxanthin is produced in a batch-mode and each cultivation pond must be completely drained and thoroughly cleaned between cycles.

 

The harvested algal spores are dried to flakes or a fine powder. During processing, the spores are cracked in a proprietary system to assure efficient extraction of astaxanthin. Natural astaxanthin is processed further utilizing a high-pressure supercritical carbon dioxide extraction process at our facility in Kona. The resulting product is a water insoluble lipid extract used in the production of gelcaps.

 

All natural astaxanthin products undergo a prescribed set of microbiological food product tests to ensure safety and quality. We use third party contract manufacturers for the encapsulation, molding of gummies and packaging of gelcaps and gummies. All third-party contract manufacturers are audit inspected by our Quality Department and are required to comply with the FDA GMP regulations. These contract manufacturers hold independent third party GMP certifications.

 

BioAstin® is sold primarily as a packaged consumer product through Nutrex Hawaii to natural product distributors, retailers and online channels, or directly to consumers. It is also sold in liquid lipid form as a raw ingredient to dietary supplement manufacturers, health food formulators and cosmetic manufacturers. BioAstin® gelcaps are sold in bulk quantities to distributors. We sell BioAstin® consumer products in gelcap form, including a vegan gelcap, and condition specific health formats and in 2024, we introduced sugar-free and vegan gummies enhanced with Vitamin D3.

 

BioAstin® competes directly with similar products marketed by other manufacturers including Fuji Chemical of Japan, AlgaTechnologies of Israel and BGG of China. In the general category of dietary supplements, BioAstin® also competes with a variety of vitamins, dietary supplements and other antioxidant products available to consumers. The dietary supplement products market is highly competitive and includes international, national, regional and local producers and distributors, many of whom have greater resources than we have, and many of whom offer a greater variety of products.

 

The potential benefits of astaxanthin to human health are continuing to emerge. As one of the most potent and bioactive biological antioxidants found in nature, the number of potential roles of natural astaxanthin for human health is growing. Much research has been published in recent years on the beneficial roles of antioxidants in our health, in the aging process and on specific health conditions. The full efficacy of BioAstin® as a human nutraceutical supplement requires further significant clinical study. Independent antioxidant research and prior clinical trials show promising human applications.

 

 

Spirulina Products

 

We have been producing a strain of spirulina microalgae marketed as Hawaiian Spirulina Pacifica® since 1984. Hawaiian Spirulina Pacifica® represents approximately 32% of our net sales in the fiscal year ended March 31, 2024. Hawaiian Spirulina Pacifica® is a nutrient-rich superfood dietary supplement, proving a plant-based, highly absorbable source of protein, natural beta-carotene, mixed carotenoids, B vitamins, gamma linolenic acid, essential amino acids and other phytonutrients.

 

Hawaiian Spirulina Pacifica® is produced in two forms: powder and tablets. Powder is used as an ingredient in dietary supplements and health beverages. Powder and tablets are consumed as a daily dietary supplement. All forms are sold in bulk quantities and as packaged consumer products under the Nutrex Hawaii label and as private label consumer packaged products.

 

Hawaiian Spirulina Pacifica® is GRAS for addition to a variety of foods as determined by the United States Food and Drug Administration. Our all natural Hawaiian Spirulina Pacifica® is cultivated without the use of herbicides or pesticides, is Non-GMO Project verified, is certified Kosher by Organized Kashrus Laboratories of Brooklyn, New York and is certified Halal by the Islamic Food and Nutrition Council of America. Hawaiian Spirulina Pacifica® holds additional independent third-party quality certifications including: Gluten Intolerance Group’s Gluten Free, Detox Project Glyphosate Free, and is certified Vegan through Vegan.org. It also holds the highest, Class A safety rating from the Dietary Supplement Information Expert Committee (DSI-EC) of the United States Pharmacopeia.

 

Our Hawaiian Spirulina Pacifica® is cultivated in fresh water and supplemented with other major required nutrients. We recycle the media and all freshwater input in our spirulina production process.

 

The spirulina crop in each pond is circulated by paddlewheels to keep an even blend of nutrients in suspension and a uniform exposure of the algae to sunlight, which is a major component of cultivation. Our ponds are engineered to maintain the right media depth for sunlight to permeate each crop completely, facilitating rapid growth. The design of our cultivation ponds promotes efficient growing conditions, allowing the Hawaiian Spirulina Pacifica® algae to reproduce rapidly. Each pond can be harvested, on average, in nine days.

 

Once ready for harvest, a majority of the spirulina algae are pumped from a pond to our processing building where the crop is separated from the culture media. The culture remaining in the ponds serves as an inoculum for the next growth cycle. Harvested spirulina is washed with fresh water and filtered before moving to the drying stage. Culture media separated from spirulina algae during processing are conserved and recycled. Our Integrated Culture Biology Management (“ICBM”) technology for microalgae cultivation has proven to be a reliable and stable operating environment, allowing us to grow and harvest spirulina without significant contamination by unwanted microorganisms and without associated loss of productivity.

 

Hawaiian Spirulina Pacifica® powder is dried via our low-oxygen Ocean-Chill Drying process, thereby preserving high levels of antioxidant carotenoids and other nutrients sensitive to heat and oxygen. The rapid drying process results in a dark green powder. Spirulina powder is generally difficult to form into tablets, and most tablet manufacturers either add high amounts (from 10% to 30%) of inert substances to “glue” the tablet together or use a heat granulation process that destroys nutrients. In contrast, our Hawaiian Spirulina Pacifica® tablets contain a maximum of 2% of such substances and are produced in cold press compression tablet-making machines.

 

Each production lot of Hawaiian Spirulina Pacifica® is sampled and subjected to thorough quality control analyses including testing for moisture, carotenoids, minerals, color and taste, among others. Further, each lot of our Hawaiian Spirulina Pacifica® undergoes a prescribed set of microbiological tests to ensure the absence of contaminants, including total aerobic bacteria, coliform bacteria, Salmonella and E. coli. The Hawaiian Spirulina Pacifica® powder, tablets and gummies are packaged to extend shelf life and ensure product freshness. Our packaged consumer products are bottled and labeled by third party contractors in California. These contractors are subject to regular government inspections and hold Drug Manufacturing Licenses & Processed Food Registrations with the State of California Department of Health. These contract manufacturers hold independent third party GMP certifications.

 

The majority of our bulk spirulina is sold to international health food manufacturers and formulators, many of whom identify and promote our Hawaiian Spirulina Pacifica® in their products. Such customers purchase bulk powder or bulk tablets and package these products under their brand label for sale to the health and natural food markets in their countries. Some of the brands produced by these customers are marketed and sold in direct competition with the packaged consumer products sold through our Nutrex Hawaii subsidiary in international channels. In the domestic market, Nutrex Hawaii packaged consumer products are sold through natural product distributors, retailers and online channels, or directly to consumers. In selected international markets, we have exclusive sales distributors for both our bulk and packaged consumer products.

 

 

Our Hawaiian Spirulina Pacifica® products compete with a variety of vitamins, dietary supplements, other algal products and similar nutritional products available to consumers. The dietary supplement products category is highly competitive and includes international, national, regional and local producers and distributors, many of whom have greater resources than Cyanotech and many of whom offer a greater variety of products.

 

Our direct competition in the spirulina market is currently from Parry Nutraceuticals, a division of Murugappa Group of India and several farms in China.

 

In addition, there are numerous other smaller farms throughout the world. As one of the largest producers of spirulina, and the only producer of spirulina in Hawaii, our challenge is to increase our market share among customers who seek the high-quality products we produce while concurrently adjusting our product mix to meet our revenue and profitability targets.

 

Contract Extraction and Research and Development Services (“contract services”)

 

As a result of capacity improvements that we made to our best-in-class, 1,000 bar, supercritical carbon dioxide extraction system, we began offering contract extraction services to third-party producers of astaxanthin biomass in fiscal 2019.

 

Due to our knowledge and expertise in cultivating microalgae combined with excess production capacity, we began offering R&D services to third-parties in fiscal 2023.

 

Total contract services and R&D services revenue represented approximately 3%, 3% and 2% of our net sales in fiscal years ended March 31, 2024, 2023 and 2022, respectively.

 

Major Customers

 

Two customers individually accounted for 34% and 17% of our total net sales for the fiscal year ended March 31, 2024. Two customers individually accounted for 34% and 6% of our total net sales for the fiscal year ended March 31, 2023. Two customers individually accounted for 22% and 19% of our total net sales for the fiscal year ended March 31, 2022.

 

Research and Development

 

Our expertise for many years has been in the development of efficient, stable and cost-effective production systems for microalgal products. We have learned production levels from our systems may not be sustainable across periods of days, weeks, or even months. Accordingly, we typically investigate each specific microalgae identified in the scientific literature for potentially marketable products and for solutions to production stability and efficiency challenges, and then strive to develop the technology to grow such microalgae on a commercial scale or to incorporate procedures or technology to improve production stability and efficiency. Successful microalgal product developments and technical solutions are highly uncertain and dependent on numerous factors, many beyond our control. Products and solutions or improvements that appear promising in early phases of development may be found to be ineffective, may be uneconomical because of manufacturing costs or other factors, may be precluded from commercialization due to the proprietary rights of other companies, or may fail to receive necessary regulatory approvals. Our research and development expenses were $0.7 million, $0.8 million and $0.7 million for the years ended March 31, 2024, 2023 and 2022, respectively.

 

Patents, Trademarks and Licenses

 

We previously held four United States patents: one on aspects of our production methods and three relating to usage of our BioAstin® products. Our production method patent, which was directed to microalgae production technology, expired in April 2016. Our other three patents, which were utility patents relating to the use of astaxanthin in our BioAstin® products, expired in December 2019, February 2020 and April 2020.

 

Although we view our proprietary rights as important, we currently believe that a loss of patent rights is not likely to have a material adverse effect on our present business as a whole. Instead, our commercial results mainly depend upon our trade secrets, know-how, other non-patent proprietary rights, customer relationships, our climate and our location. As a result, we feel that our competitors will not be able to implement competing technology covered by our former patents without our same combination of non-patented attributes.

 

We have registered trademarks in the U.S. and in some foreign markets, such as the European Union. Our operations are not dependent upon any single trademark, although some trademarks are identified with a number of our products and are important in the sale and marketing of such products.

 

 

Regulations

 

Several governmental agencies regulate various aspects of our business and our products in the United States, including the Food and Drug Administration, the Federal Trade Commission (“FTC”), the Consumer Product Safety Commission, the State of Hawaii Department of Health, the Department of Agriculture, the Environmental Protection Agency (“EPA”), the United States Postal Service, state attorney general offices and various agencies of the states and localities in which our products are sold. We believe we are in compliance with all material government regulations which apply to our products and operations. However, we are not able to predict the nature of any future laws, regulations, interpretations or applications, nor can we predict what effect future changes would have on our business.

 

Our international customers are subject to similar governmental agency regulations in their various geographic regions. Compliance by our customers with such local regulations is beyond our control and we cannot predict their ability to maintain such compliance. However, we strive to assist our customers in meeting local regulations pertaining to the use and sale of our products whenever possible.

 

Environmental Matters

 

In 2002, we were issued under the Endangered Species Act (“ESA”) an Incidental Take Permit (“ITP”) by the United States Department of Interior Fish and Wildlife Service (“FWS”). The ESA defines “incidental take” as “incidental to, and not for the purpose of, the carrying out of an otherwise lawful activity.” This permit authorizes incidental take of the endangered Hawaiian stilt (Himantopus mexicanus knudseni) that is anticipated to occur as a result of ongoing operations and maintenance at our Kona facility. As a mandatory component for the issuance of such permit, we submitted and maintain a Habitat Conservation Plan (“HCP”) to ensure that the effects of the permitted action on listed species are adequately minimized and mitigated.

 

The HCP called for the creation of a nesting and breeding ground for the Hawaiian stilt to offset any take activity. We have complied with these requirements since 2002. The breeding program was so successful that the increase in the Hawaiian stilt population in the area became a potential hazard for the adjacent State airport facility. We disassembled the stilt habitat and are mitigating “take” by using standard non-lethal hazing devices to discourage nesting and breeding.

 

A requirement of the ITP is to provide insurance coverage for funding the project for the term of the ITP. Our insurance broker was unable to locate an underwriter who would provide such a bond. As permitted by law, the FWS waived this requirement recognizing that this HCP did not involve a significant capital expenditure. However, under Hawaii state law, no waiver provision is available. A new ITP was issued by the US Department of the Interior effective June 1, 2019; the permit expires June 1, 2035.

 

Employees

 

As of March 31, 2024, we employed 77 people. Of the total, 29 are involved in harvesting, production and quality, with the remainder in maintenance, shipping, sales, administration and support. None of our employees are subject to collective bargaining agreements. Management believes that its relations with employees are good.

 

Company Website and SEC Filings

 

Our corporate website is www.cyanotech.com. There we make available copies of Cyanotech documents, news releases and our filings with the Securities Exchange Commission, or the “SEC”, including financial statements. Also included are copies of the Board of Directors Code of Conduct, the Company’s Code of Conduct and Ethics, the Nominating and Corporate Governance Committee Charter, the Compensation Committee Charter and the Charter and Powers of the Audit Committee. We also maintain the website www.nutrex-hawaii.com dedicated to our wholly owned subsidiary, Nutrex Hawaii, Inc. On that website, Hawaiian Spirulina Pacifica® and BioAstin® are sold directly online. The information found on our websites, unless otherwise indicated, is not part of this or any other report we file or furnish to the Securities and Exchange Commission.

 

 

Item 1A.

Risk Factors

 

You should carefully consider the risks described below which we believe are significant but not the only ones we face. Any of the following risks could have a material adverse effect on our business, financial condition and operating results. You should also refer to the other information contained in this report, including our financial statements and the related notes.

 

General economic conditions affecting the dietary supplement industry and various operating factors and the health of the economy in general may affect our business and operating results.

 

Our operations and financial performance may be affected by general economic conditions such as volatility and disruptions, diminished liquidity and credit market conditions and the level of consumer confidence. Inflation may affect our business by reducing consumer spending, which may impact sales growth and our underlying costs. We have observed increased inflation during the past few years with varying impacts on our business. If increases in energy costs and inflationary trends continue, our business and operating results could be adversely affected. We may also experience adverse impacts to our business as a result of consumers’ perceptions of the economy, and a decrease in their personal financial condition could hurt overall consumer confidence and reduce demand for our products. Consumers may reduce non-essential items, purchase value-oriented products or increasingly rely on dietary supplement discounters in an effort to secure their products, which could impact our operating results. In addition, adverse changes in the U.S. economy, consumer confidence and economic conditions could have an adverse effect on our operating results.

 

Public health crises may adversely affect our business, results of operations, financial condition, liquidity, and cash flow.

 

Future pandemics or public health crises and the measures taken in response could adversely impact our business, financial condition and results of operation and heighten many of the other risks described throughout this report, including but not limited to those relating to our operating strategy, supply chain, increased labor costs, availability of labor, disruption in operations, loss of key employees, our indebtedness, and general economic conditions. We may also experience a negative impact from government mandated restrictions and community response measures which may disrupt our business and thus negatively impact our financial results.

 

Our production of algae involves an agricultural process, subject to such risks as weather, disease, contamination, water availability and climate change.

 

The production of our algae products involves complex agricultural systems with inherent risks including weather, disease, and contamination. These risks are unpredictable and also include such elements as the control and balance of necessary nutrients and other factors. The efficient and effective cultivation of microalgae requires consistent light, warm temperatures, low rainfall and proper chemical balance in a very nutrient-rich environment.

 

If the chemical composition of a pond changes from its required balance, unusually high levels of contamination due to the growth of unwanted organisms or other biological problems may occur and would result in a loss of harvestable output. These often arise without warning and sometimes there are few or no clear indicators as to appropriate remediation or corrective measures. We believe that our technology, systems, processes and favorable growing location generally permit year-round harvest of our microalgal products in a cost-effective manner. However, environmental factors cannot be controlled in an open-air environment, therefore, we cannot, and do not attempt to, provide any form of assurance with regard to our systems, processes, location, or cost-effectiveness. In the event that we need to take steps to correct any chemical imbalance or contamination of our ponds, including by re-inoculating the ponds, such measures may not be effective and could interrupt production. To the extent that our production is negatively impacted by environmental factors, we may be unable to fill large orders for one or more months until such time that production improves. The efficient and effective cultivation and processing of microalgae requires a consistent supply of fresh water and cold ocean water. If the availability and or quality composition of water changes from its required levels, problems may occur that could result in a loss of harvestable output.

 

Hawaii from time to time has experienced shortages of water, electric power and fuels. Future shortages could disrupt our operations and could result in additional expense. Our astaxanthin is cultivated in a combination of fresh water and deep ocean water. In the case of deep ocean water, although abundantly available at this location, the facility to pump and deliver the water to our location is owned by the State of Hawaii. The State of Hawaii sets the price for deep ocean water annually based on its cost to deliver the water. Any significant increase in the price could adversely affect our business. The availability and price of water could also be impacted by a significant population growth in the region as well as throughput constraints on the water delivery infrastructure. In June 2017, several fresh-water pumps owned by the County of Hawaii were disabled, and the county instituted restrictions on fresh water supply. We have adopted several water savings strategies to mitigate this challenge, but there is no guarantee that they will be effective or that they will not have unforeseen negative effects on the growth of spirulina. If we are unable to obtain enough fresh water at reasonable prices to cultivate our products, our business could be negatively impacted.

 

Climate change has not impacted weather at our location on Hawaii Island. We have experienced both dry and wet periods of weather, but it has not affected production. However, there can be no guarantee that future climate change will not affect our production.

 

 

There is risk in operating entirely in one business segment such as the cultivation and production of microalgae at a single production facility.

 

Single location agricultural and production facilities do not provide the protections and assurances afforded by operations in two or more widely separated locations. Our single location in Hawaii is susceptible to unfavorable weather patterns and catastrophic natural disasters such as earthquakes, tsunamis, hurricanes and volcanic eruptions. In the event of a natural disaster or localized extended outages of critical utilities or transportation systems, we could experience a significant business interruption. Also, a single agricultural facility provides limited biologic diversity protection against invasive, mutant, or harmful organisms.

 

Our facilities in Hawaii are located adjacent to a major airport, and an aircraft disaster could disrupt our operations.

 

Our production facility and corporate headquarters in Hawaii are located adjacent to the Keahole International Airport. In the event of an aircraft disaster, we could experience a significant business interruption, including loss of water, electrical and communication services as well as inability to access our facilities.

 

Unfavorable publicity or consumer perception of our products and any similar products distributed by other companies could have a material adverse effect on our business.

 

The dietary supplements market is highly dependent upon consumer perception regarding the safety, efficacy and quality of dietary supplements. Consumer perception of our products can be significantly influenced by scientific research and findings, as well as by national media attention and other publicity regarding the consumption of dietary supplements. There can be no assurance that future research or publicity will be favorable to the dietary supplements market or any product in particular, or consistent with earlier publicity. Our dependence on consumer perception means that any adverse reports, findings or publicity, whether or not accurate or with merit, could have a material adverse effect on the demand for our products and on our results of operations, cash flow and financial condition.

 

We may become subject to legal proceedings.

 

We may become subject to claims and legal proceedings in the ordinary course of business. The costs of such proceedings could vary from quarter to quarter based on the status of the proceedings and could have a material impact on our results in any given quarter.

 

The dietary supplement products industry is extremely competitive. Many of our significant competitors have greater financial and other resources than we do, and one or more of these competitors could use their greater resources to gain market share at our expense.

 

The dietary supplement products market includes international, national, regional and local producers and distributors, many of whom have substantially greater production, financial, research and development, personnel and marketing resources than we do, and many of whom offer a greater variety of products.

 

As a result, each of these companies could compete more aggressively and sustain that competition over a longer period of time than we could. Our lack of resources relative to our significant competitors may cause us to fail to anticipate or respond adequately to development of new products and changing consumer demands and preferences or may cause us to experience significant delays in obtaining or introducing new or enhanced products. These failures or delays could reduce our competitiveness and cause a decline in our market share and sales. Increased competition in our industry could result in price reductions, reduced gross profit margin or loss of market share, any of which could have a material effect on our business, results of operations and financial condition.

 

We depend heavily on the unique abilities and knowledge of our officers and key personnel. If we are unable to recruit and retain key personnel, we may be unable to achieve our goals.

 

Our success depends, to a significant extent, upon the services of our officers and key personnel, including qualified management, professional, scientific, and technical operating staff. The loss of any such personnel or the delay in the replacement of such personnel could significantly delay the achievement of our business objectives and could adversely affect our ability to do business or provide needed management. Attracting permanent skilled executives in Hawaii can be difficult due to limited local qualified applicants. If we are unable to attract qualified candidates, or if the search process takes longer than expected, it could adversely impact our business.

 

Labor shortages could restrict our ability to operate or grow our business or result in increased labor costs that could adversely affect our results of operations.

 

Our success depends in large part on our ability to attract, retain, train, manage and engage employees. The COVID-19 pandemic had a significant impact on the labor market. Post pandemic, labor shortages have affected our ability to hire or re-hire employees. For a large percentage of our business, our activities need to be performed in person at Kona. Our labor pool on the island of Hawaii is limited. Because payroll costs are a major component of the operating expenses a shortage of labor could also require higher wages that would increase labor costs, which could adversely affect our results of operations.

 

 

Our operations are vulnerable because we have limited personnel and redundancy and backup systems in our data management function.

 

Our internal order, inventory and product data management system is an electronic system through which orders are placed for our products and through which we manage product pricing, shipment, returns and other matters. This system’s continued and uninterrupted performance is critical to our day-to-day business operations. Despite our precautions, unanticipated interruptions in our computer and telecommunications systems have, in the past, caused problems or stoppages in this electronic system. These interruptions, and resulting problems, could occur again in the future. We also have limited personnel available to process purchase orders and to manage product pricing and other matters in any manner other than through this electronic system. Any significant interruption or delay in the operation of this electronic management system could cause a decline in our sales and profitability.

 

The loss of a major customer, or a change in their procurement practices, could result in a material reduction in our revenues and profitability.

 

Our top ten customers generated 69% and 66% of our net sales for fiscal years 2024 and fiscal 2023, respectively. Two customers individually accounted for 34% and 17%, and 34% and 6% of our total net sales in the fiscal years ended March 31, 2024 and 2023, respectively. Accordingly, the loss of one or more of those customers or a substantial decrease in such customers' purchases from us could result in a material reduction in our revenues and profitability.

 

We could be subject to breaches of our information technology systems, which could damage our reputation and customer relationships. Such breaches could subject us to significant reputational, financial, legal, and operational consequences.

 

Our business relies on information systems to obtain, rapidly process, analyze and manage data to, among other things, facilitate the purchase and distribution of inventory items through numerous distributors; receive, process and ship orders on a timely basis; accurately bill and collect from customers; process payments to suppliers; and provide technical support to our customers.

 

A cyber-attack that bypasses our security, or employee error, malfeasance or other disruptions that cause a security breach could lead to a material disruption of our information systems and/or the loss of business information. Cyber-attacks are expected to accelerate on a global basis and threats are increasingly sophisticated in using techniques and tools, including artificial intelligence, that are designed to circumvent security controls and evade detection. Such an attack could result in, among other things, the theft, destruction, loss, misappropriation or release of confidential data and intellectual property; operational or business delays; liability for a breach of personal information belonging to our customers or our employees; and damage to our reputation any of which could have a material adverse effect on our business, financial condition, and results of operations. In the event of an attack, we would be exposed to a risk of loss or litigation and possible liability, including under laws that protect the privacy of personal information.

 

To date, the risks posed by such cybersecurity threats have not materially affected us or our business strategy, results of operations or financial condition, and as of the date of this report, we are not aware of any material risks from cybersecurity threats that are reasonably likely to do so, but there can be no assurance that we will not be materially affected by such risks in the future.

 

Compliance with new and existing governmental regulations could increase our costs significantly and adversely affect our results of operations.

 

The processing, formulation, manufacturing, packaging, labeling, advertising and distribution of our products are subject to federal laws and regulation by one or more federal agencies, including the FDA, the FTC, the United States Department of Agriculture (“USDA”) and the EPA. These activities are also regulated by various state, local and international laws and agencies of the states and localities in which our products are sold. Regulations may prevent or delay the introduction, or require the reformulation, of our products, which could result in lost sales and increased costs to us. A regulatory agency may not accept the evidence of safety for any new ingredients that we may want to market, may determine that a particular product or product ingredient presents an unacceptable health risk, may determine that a particular statement of nutritional support on our products or that parties use on the products we manufacture for them, or that we want to use on our products or that third parties want to use on the products we manufacture for them, is an unacceptable drug claim or an unauthorized version of a food “health claim”. A regulatory agency may determine that particular claims are not adequately supported by available scientific evidence. Any such regulatory determination would prevent us from marketing particular products or using certain statements on those products, which could adversely affect our sales of those products.

 

Additional or more stringent laws and regulations of dietary supplements and other products have been considered from time to time. These developments could require reformulation of some products to meet new standards, recalls or discontinuance of some products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of some products, additional or different labeling, additional scientific substantiation, or other new requirements. Any of these developments could increase our costs significantly. In addition, regulators' evolving interpretation of existing laws could have similar effects.

 

 

If we fail to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes Oxley Act or fail to maintain adequate internal control over financial reporting, our business, financial condition, and results of operations, and investors’ confidence in us, could be materially and adversely affected.

 

As a public company, we are required to comply with the periodic reporting obligations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including preparing annual reports, quarterly reports, and current reports. Our failure to prepare and disclose this information in a timely manner and meet our reporting obligations in their entirety could subject us to penalties under federal securities laws and regulations of the OTCQB Market (“OTCQB”), expose us to lawsuits, and restrict our ability to access financing on favorable terms, or at all.

 

In addition, pursuant to Section 404 of the Sarbanes Oxley Act, we are required to evaluate and provide a management report of our systems of internal control over financial reporting. During the course of the evaluation of our internal control over financial reporting, we could identify areas requiring improvement and could be required to design enhanced processes and controls to address issues identified through this review. This could result in significant delays and costs to us and require us to divert substantial resources, including management time, from other activities. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with the Sarbanes Oxley Act. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent fraud. Any failure to maintain compliance with the requirements of Section 404 on a timely basis could result in the loss of investor confidence in the reliability of our financial statements, which in turn could, negatively impact the trading price of our stock, and adversely affect investors’ confidence in the Company and our ability to access capital markets for financing.

 

Our two largest shareholders own a substantial portion of our common stock and could exert substantial influence over our business, particularly if any of them choose to work together.

 

Our two largest shareholders collectively own approximately 32.7% of our common stock. According to publicly filed beneficial ownership reports, as of the respective dates of such reports, Michael Davis, chairman of our board of directors, beneficially owned 1,356,894 of shares representing a 19.5% beneficial ownership and the Rudolf Steiner Foundation ("RSF"), beneficially owned 917,133 shares representing a 13.2% beneficial ownership. The shares held by RSF were originally donated by a foundation affiliated with Mr. Davis or acquired from the proceeds of donations made by that foundation. In addition, Mr. Davis and RSF filed a Schedule 13D with the SEC on March 17, 2017, announcing the formation of a “group” among the two of them and certain of Mr. Davis’ affiliates under Section 13 of the Exchange Act. As part of the agreement between Mr. Davis and RSF, RSF has agreed not to sell, transfer or otherwise dispose of any of its shares in the Company unless RSF provides concurrent written notice to an affiliate of Mr. Davis and the Company at least three days prior to the consummation of any such sale, transfer or other disposition. On August 24, 2023, 424,621 shares of our common stock owned by Skywords Family Foundation, Inc. (“Skywords”) was donated to Ginungagap Foundation, a Delaware corporation (“Ginungagap”), recognized as a tax-exempt organization. Mr. Davis serves as the President of both Skywords and Ginungagap and has recused himself from all matters related to the common stock owned by Ginungagap, including, without limitation, decisions to vote or dispose of Cyanotech common stock. Along with this recusal, the formation of this “group” was dissolved In addition, on April 12, 2019, the Company borrowed $1.5 million from an entity affiliated with Mr. Davis pursuant to an unsecured promissory note.  In April 2021, the Company amended the loan, which extended the expiration to April 2024, converted $500,000 into revolving loans, adjusted the interest rate to reflect a floor of 5%, and granted a security interest in substantially all of the Company’s personal property assets, subject to limited exceptions. In December 2022, the Company amended the promissory note which extended the maturity to April 2025 and increased the revolving line amount from $0.5 million to $1.0 million. In August 2023, the Company amended the loan to increase the revolving line amount from $1.0 million to $2.0 million. As of both March 31, 2024 and 2023, $1.0 million remained due under this promissory note, and at March 31, 2024 and 2023, $1.25 million and $0.5 million were outstanding on the revolving line, respectively.

 

Our significant stockholders, particularly if they choose to work together, may have the ability to exert significant influence over our business policies and affairs on matters submitted to our stockholders for approval, such as the election or removal of directors, amendments to our certificate of incorporation, the approval of a business combination or certain corporate financing activities. The interests of our significant stockholders could differ from those of other stockholders in ways that could be adverse to the interests of other shareholders. For example, this concentration of ownership could have the effect of delaying or preventing a change of control of our company even if such a transaction is at a premium to the prevailing market price of our common stock and is supported by other shareholders. Concentration of ownership could also harm the market price of our common stock because investors may perceive disadvantages in owning stock in a company that a substantial portion of common stock is controlled by a small number of stockholders.

 

 

Some provisions of our charter documents and Nevada law may discourage an acquisition of us by others, even if the acquisition may be in the best interest of our stockholders.

 

Provisions in our Restated Articles of Incorporation and Amended and Restated Bylaws, as well as certain provisions of Nevada law, could make it more difficult for a third-party to acquire us, even if doing so may benefit our stockholders. These provisions include the authorization of “blank check” preferred stock, the rights, preferences and privileges of which may be established and shares of which may be issued by our board of directors at its discretion from time to time and without stockholder approval.

 

Because we are incorporated in Nevada, we may be governed by Nevada’s statutes governing combinations with interested stockholders and control share acquisitions, which may discourage, delay or prevent someone from acquiring us or merging with us, whether or not it is desired by or beneficial to our stockholders. We have not opted out of the application of these laws but may elect to opt out in the future. Under Nevada’s laws governing combinations with interested stockholders, a Nevada corporation may not, in general, engage in certain types of business combinations with any beneficial owner of 10% or more of the corporation’s voting shares or an affiliate of the corporation who at any time within two years immediately prior to the date in question was the beneficial owner of 10% or more of the corporation’s voting shares, unless the holder has held the stock for two years or the board of directors approved the beneficial owner’s acquisition of its shares, the board of directors approved the transaction before the beneficial owner acquired its shares, or holders of at least a majority of the outstanding voting power approve the transaction after the beneficial owner acquired its shares. In addition, Nevada’s control share acquisition laws prohibit a purchaser of the shares of an issuing corporation from voting those shares, under certain circumstances and subject to certain limitations, after crossing specified threshold ownership percentages, unless the purchaser obtains the approval of the issuing corporation’s disinterested stockholders.

 

Any provision of our Restated Articles of Incorporation or Amended and Restated Bylaws or of Nevada law that is applicable to us that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock in the event that a potentially beneficial acquisition is discouraged and could also affect the price that some investors are willing to pay for our common stock.

 

A significant or prolonged economic downturn could have a material adverse effect on our results of operations.

 

Our results of operations are affected by the business activity of our customers who in turn are affected by the level of economic activity in the industries and markets that they serve. A decline in the level of business activity of our clients or the economy as a whole could have a material adverse effect on our revenues and profit margin.

 

The global cost of oil derived energy impacts us in several ways, and it may hinder our efforts to achieve profitability. Oil prices primarily impact us through the costs of electricity, transportation, materials and supplies which are tied to the cost of oil either directly or indirectly. The return of a high cost of oil on a global basis may signal a prolonged economic downturn resulting in a material adverse effect on our business.

 

Our quarterly operating results may vary from quarter to quarter, which may result in increased volatility of our share price.

 

We have experienced, and may in the future continue to experience, fluctuations in our quarterly operating results. These fluctuations could reduce the market price of our common stock. Factors that may cause our quarterly operating results to vary include, but are not limited to:

 

	●	weather-related cultivation difficulties;
	●	availability and cost of fresh water and ocean water;
	●	any non-routine legal fees;
	●	fluctuations in customer demand;
	●	business decisions of our customers regarding orders for our products;
	●	changes in energy costs;
	●	changes and availability of raw material costs;
	●	production problems which we cannot solve technically or economically;
	●	contamination of our cultivation and production facilities;
	●	effects of weather on our ability to meet customer demand;
	●	timing of promotional activities;
	●	the introduction of new products by us or our competitors;
	●	changes in our pricing policies or those of our competitors;
	●	changes in seasonal and other trends in our customers’ buying patterns;
	●	changes in government regulation, both domestic and foreign;

 

 

	●	fluctuation in foreign currency exchange rates;
	●	global economic and political conditions and related risks, including the impacts of a global pandemic and acts of terrorism; and
	●	other factors beyond our control.

 

A significant portion of our expense levels are relatively fixed. If net sales are below expectations in any given period, the adverse impact on results of operations may be magnified by our inability to reduce expenses quickly enough to compensate for the sales shortfall.

 

Our global operations expose us to complex management, foreign currency, legal, tax and economic risks, which we may not be able to address quickly and adequately.

 

Our products are marketed in a number of countries around the world. For the year ended March 31, 2024, approximately 18% of our net sales were from sales to foreign customers. As a result, we are subject to a number of risks which include, but are not limited to:

 

	●	the burden of complying with a wide variety of national and local laws;
	●	potentially longer payment cycles for foreign sales;
	●	restrictions (government and otherwise) on the movement of cash;
	●	the absence in some jurisdictions of effective laws protecting our intellectual and proprietary property rights, or of enforcement of such laws where they do exist;
	●	changes in government regulations, both domestic and foreign, including changes in trade tariffs;
	●	global economic and political conditions and related risks, including acts of terrorism; and
	●	fluctuations in foreign currency exchange rates.

 

Climate change initiatives could materially and adversely affect our business, financial condition, and results of operations.

 

Our manufacturing processes require that we purchase significant quantities of energy from third parties, which results in the generation of greenhouse gases, either directly onsite or indirectly at electric utilities. Both domestic and international legislation to address climate change by reducing greenhouse gas emissions and establishing a price on carbon could create increases in energy costs and price volatility. Considerable international attention is now focused on development of an international policy framework to address climate change. Proposed and existing legislative efforts to control or limit greenhouse gas emissions could affect our energy source and supply choices as well as increase the cost of energy and raw materials derived from sources that generate greenhouse gas emissions. If our suppliers are unable to obtain energy at a reasonable cost in the future, the cost of our raw materials could be negatively impacted which could result in increased manufacturing costs.

 

If we are unable to protect our intellectual property rights or if we infringe upon the intellectual property rights of others our business may be harmed.

 

We regard our proprietary technology, trade secrets, trademarks and similar intellectual property as important and we rely on a combination of trade secret, contract, copyright and trademark law to establish and protect our rights in our products and technology. However, there can be no assurance that we will be able to protect our technology adequately or that competitors will not be able to develop similar technology independently, particularly following the expiration of our patents relating to the use of astaxanthin. In addition, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States. Litigation in the United States or abroad may be necessary to enforce intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement. Such litigation, even if successful, could result in substantial costs and diversion of resources and could have a material adverse effect on our business, results of operations and financial condition. Additionally, if any such claims are asserted against us, we may seek to obtain a license under the third party’s intellectual property rights. There can be no assurance, however, that a license would be available on terms acceptable or favorable to us, if at all.

 

Our insurance liability coverage is limited and may not be adequate to cover potential losses.

 

In the ordinary course of business, we purchase insurance coverage (e.g., property and liability coverage) to protect us against loss of or damage to our properties and claims made by third parties and employees for property damage or personal injuries. However, the protection provided by such insurance is limited in significant respects and, in some instances, we have no coverage and certain of our insurance policies have substantial “deductibles” or limits on the maximum amounts that may be recovered. For example, if a volcanic eruption, tsunami, earthquake or other catastrophic natural disaster should occur, we may not be able to recover all facility restoration costs and revenues lost from business interruption. In addition, we maintain product liability insurance in limited amounts for all of our products involving human consumption; however, broader product liability coverage is prohibitively expensive. Insurers have also introduced new exclusions or limitations of coverage for claims related to certain perils including, but not limited to, mold and terrorism. If a series of losses occurred, such as from a series of lawsuits in the ordinary course of business each of which were subject to the deductible amount, or if the maximum limit of the available insurance were substantially exceeded, we could incur losses in amounts that would have a material adverse effect on our results of operations and financial condition.

 

 

Our ability to develop and market new products or modify existing products and production methods may be adversely affected if we lose the services of or cannot replace certain employees knowledgeable in advanced scientific and other fields.

 

Our products are derived from and depend on proprietary and non-proprietary processes and methods founded on advanced scientific knowledge, skills, and expertise. If the services of employees knowledgeable in these fields are lost and cannot be replaced in a reasonable time frame at reasonable costs, our ability to develop and market new products or modify existing products and production methods would be adversely impacted. At the same time, regulatory compliance surrounding our products and financial matters generally requires a basic knowledge and level of expertise related to production, quality assurance, and financial control. If we lose the services or cannot reasonably replace employees who have the necessary knowledge and expertise our ability to remain in regulatory compliance could be adversely affected.

 

We may need to raise additional capital in the future which may not be available.

 

We believe our cash to be provided from operations will be sufficient to meet a portion of our working capital and operating requirements for at least the next 12 months and may have to secure a commitment to fund the remaining gap, but we may experience unexpected reductions in sales due to changes in customer demand, customer purchasing practices, or other factors described in these Risk Factors. If we have an unexpected decline in sales, or we have other unexpected capital needs, we may need to raise additional funds. There is no guarantee that we will be able to secure such funding on acceptable terms, if at all. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our then current stockholders may be reduced. If we raise additional funds through the issuance of convertible debt securities, or through additional debt or similar instruments, such securities, debt, or similar instruments could have rights senior to those of our common stockholders and such instruments could contain provisions restricting our operations. If adequate funds are not available to satisfy either short-term or long-term capital requirements, we may be required to limit operations with adverse results.

 

We may not be able to refinance, extend or repay our senior indebtedness, which would have a material adverse effect on our financial condition and ability to continue as a going concern.

 

As of March 31, 2024, we owed First Foundation Bank (the “Bank”) approximately $3.2 million under a Term Loan Agreement dated August 14, 2012, which requires monthly payments of principal and interest until its maturity on August 14, 2032. If we are unable to make payments when due under this agreement, or repay this obligation at maturity, and we are otherwise unable to extend the maturity date or refinance this obligation, we would be in default. We cannot provide any assurances that we will be able to generate the necessary amount of capital to make payments as they become due, or to repay this obligation, or that we will be able to extend the maturity date or otherwise refinance this obligation. In the event of default, the Bank would have the right to exercise its rights and remedies to collect, which would include foreclosing on our assets. Accordingly, a default would have a material adverse effect on our business and, if the Bank exercises its rights and remedies, we would likely be forced to seek bankruptcy protection.

 

In addition, the agreements governing our indebtedness include certain debt service and other financial covenants that we must satisfy. In previous years, we have defaulted on certain of these covenants and have received waivers of the defaults from the Bank. As of March 31, 2024, the Company was not in compliance with the required debt service coverage and current ratios. The Company is currently seeking a waiver of such default, however, we cannot provide any assurance that the Bank will provide us with such a waiver. As of March 31, 2023, the Company was not in compliance with the required debt service coverage ratio, but the Bank provided a waiver of the default on June 22, 2023 and implemented an immediate freeze on any and all further advances of the Revolving Credit Agreement (the “Credit Agreement”) through the maturity date. We cannot provide any assurance that the Bank would provide us with a waiver should we not be in compliance in the future. A failure to maintain compliance along with our lender not agreeing to a waiver for the non-compliance would cause the outstanding borrowings to be in default and payable on demand which would have a material adverse effect on us and our ability to continue as a going concern.

 

We have incurred significant losses in the past. If we incur significant losses in the future, we will experience negative cash flow which may hamper current operations and prevent us from sustaining or expanding our business.

 

As of March 31, 2024, we had an accumulated deficit of approximately $22.9 million, primarily as a result of current and prior year losses. Historically, we have relied upon cash from operations and financing activities to fund all of the cash requirements of our business. However, no assurance can be provided that we will return to profitability and, even if we do return to profitability, extended periods of profitability and net income do not assure positive cash flows. Future periods of net losses from operations could result in negative cash flow, may cause us to default on certain covenants in our existing debt instruments and may hamper ongoing operations and prevent us from sustaining or expanding our business. We cannot assure you that we will achieve, sustain or increase profitability on a quarterly or annual basis in the future. If we do not achieve, sustain or increase profitability, our business will be adversely affected and our stock price may decline.

 

 

Our recurring losses from operations resulting in net cash outflows from operating activities, as well as current cash and liquidity projections, raise substantial doubt about our ability to continue as a going concern.

 

Based on our recurring losses from operations resulting in net cash outflows from operating activities for the fiscal year ended March 31, 2024, as well as current cash and liquidity projections, we have concluded that there is substantial doubt about our ability to continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern.  You should not rely on our consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to shareholders, in the event of liquidation.

 

Our stock price is volatile, which could result in substantial losses for investors purchasing shares of our common stock.

 

Stock markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. In addition, the average daily trading volume of the securities of small companies can be very low. Limited trading volume of our stock may contribute to its future volatility. Price declines in our common stock could result from general market and economic conditions and a variety of other factors, including any of the following:

 

	●	volatility resulting from minimal trading activity;
	●	changes in market valuations of similar companies;
	●	stock market price and volume fluctuations generally;
	●	economic conditions specific to the dietary supplement products industry;
	●	economic conditions tied to global resource markets, such as fuel costs;
	●	announcements by us or our competitors of new or enhanced products or of significant contracts, acquisitions, strategic relationships, joint ventures or capital commitments;
	●	fluctuations in our quarterly or annual operating results;
	●	changes in our pricing policies or the pricing policies of our competitors;
	●	changes in foreign currency exchange rates affecting our product costs, pricing or our customers markets;
	●	regulatory developments effecting our specific products or industry; and
	●	additions or departures of key personnel.

 

The price at which you purchase shares of our common stock may not be indicative of the price that will prevail later in the trading market. You may be unable to sell your shares of common stock at or above your purchase price, which may result in substantial losses to you. As of March 31, 2024, there were approximately 6.9 million shares of our common stock outstanding and stockholders holding at least 5% of our stock, individually or with affiliated persons or entities, collectively beneficially owned or controlled approximately 32.7% of such shares. Sales of large numbers of shares by any of our large stockholders could adversely affect our trading price, particularly given our relatively small historic trading volumes. If stockholders holding shares of our common stock sell, indicate an intention to sell, or if it is perceived that they will sell, substantial amounts of their common stock in the public market, the trading price of our common stock could decline. Moreover, if there is no active trading market or if the volume of trading is limited, holders of our common stock may have difficulty selling their shares.

 

Recent European Union regulations include stringent requirements for health claims on food and supplement labels.

 

The European Union has harmonized standards among Member States for health claims on food and supplement labels. The scientific assessment of health claims is performed by the European Food Safety Authority ("EFSA"), an advisory panel to the European Commission. The European Commission will consider the opinions of EFSA in determining whether to include a health claim on a Positive List of permissible claims. Once the list is published, only health claims for ingredients and products included on the list may be used in promotional materials for products marketed and sold in the European Union. This could severely decrease or limit the marketability for our products in this market area. We have implemented strategies that we believe will allow for continued and increasing sales of our products in the European Union. However, there can be no guarantee that such strategies will be successful.

 

 

Item 1C.

Cybersecurity

 

Cybersecurity Risk Management and Strategy

 

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan and is integrated with our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational and financial risk areas. Our cybersecurity risk management program includes the following key elements:

 

●

Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, services and our broader enterprise information technology (“IT”) environment;

●

A team comprised of IT personnel responsible for directing (1) our cybersecurity risk assessment processes; (2) our security controls; and (3) our response to cybersecurity incidents;

●

The use of external cybersecurity service providers, where appropriate, to assess, test or otherwise assist with aspects of our cybersecurity processes;

●

Cybersecurity awareness training of employees with access to our systems; and

●

A cybersecurity incident response plan.

 

During the fiscal year ended March 31, 2024, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition, as we have described in the Risk Factors section of this Form 10-K.

 

Cybersecurity Governance

 

Our Board of Directors considers cybersecurity risk as critical to the enterprise and oversees management’s design, implementation and enforcement of our cybersecurity risk management program, while our executive officers are responsible for the day-to-day management of the material risks. Our Board of Directors receive annual updates, and/or significant updates as needed, on relevant information regarding cybersecurity.

 

Item 2.

Properties

 

Our principal facility and corporate headquarters are located at the Natural Energy Laboratory of Hawaii Authority (“NELHA”) at Keahole Point in Kailua-Kona, Hawaii. It encompasses approximately 96 fully developed acres containing microalgal cultivation ponds, processing facilities, research and quality control laboratories, and sales and administrative offices. The property is leased from the State of Hawaii under a 40-year commercial lease expiring in 2035 and a 19-year commercial lease expiring in 2037. Our lessee interest in the NELHA leases is encumbered by a mortgage securing approximately $3.2 million of debt (see Note 5 in the notes to our consolidated financial statements). If we were to require additional land for expansion, we believe that there is sufficient available land at NELHA, provided a revised or additional NELHA lease can be negotiated with acceptable terms. Under the terms of the existing NELHA leases, we could be required to remove improvements at the end of the lease terms. Based upon our analysis, we do not believe the projected cost for such removal to be reasonably estimable, and we also believe we are unlikely to incur such costs, given historical practices. However, conditions could change in the future and it is not possible to predict such changes or estimate any impact thereof. We also rent warehouse space in Rancho Cucamonga, California.

 

Item 3.

Legal Proceedings

 

From time to time, the Company may be involved in litigation and investigations relating to claims and matters arising out of its operations in the normal course of business. There were no significant legal matters outstanding at March 31, 2024.

 

 

PART II

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

Our common stock is traded on the OTCQB Venture Market under the symbol “CYAN”. The approximate number of holders of record of our common stock was 383 as of June 14, 2024.

 

We are prohibited from declaring any common stock dividends without the prior written consent of a lender per the conditions of an existing term loan agreement with such lender. We have never declared or paid cash dividends on our common stock. We currently do not anticipate paying any cash dividends on common stock.

 

The following table sets forth the Company’s common shares authorized for issuance under equity compensation plans as of March 31, 2024:

 

		Common shares to be issued upon exercise of options and restricted stock units outstanding (in shares)				Weighted- average exercise price of outstanding options and restricted stock units				Common shares available for future grant under equity compensation plans (in shares)
Equity compensation, plans approved by security holders			427,820			$	1.71				668,899

 

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative of our financial condition, results of operations, liquidity and certain other factors that may affect our future results from the perspective of management.

 

Our MD&A should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 10-K. A more comprehensive description of our products and markets for such products is provided in Part I. Item 1. Business.

 

Overview

 

We are an agricultural company and a world leader in the production of natural products derived from microalgae grown in complex and intricate agricultural systems on the Kona coast of Hawaii. We have a core competency in cultivating and processing microalgae into high-value, high-quality natural products for the human dietary supplement market. We are unique in that our microalgae are grown in open ponds which, similar to natural land and plant-based horticulture, require favorable weather conditions.  In our case these conditions include consistent light, warm temperatures and low rainfall to achieve optimum production.  Equally important is a nutrient-rich environment, which requires the proper control and balance of necessary nutrients to support growth and yields.  Greater variability in these environmental factors more commonly occur in our winter growing season.

 

Our products are sold as consumer-packaged goods through natural products distributors, retailers and online channels, and direct to consumers, primarily in the U.S., as well as in bulk form to manufacturers, formulators and distributors worldwide in the health foods, cosmetic manufacturers and nutraceuticals and dietary supplement markets.

 

We will continue to focus on growing the market for our high quality, higher margin consumer products by emphasizing the higher nutritional content of our Hawaiian Spirulina Pacifica® and the multiple health benefits of our BioAstin® Hawaiian Astaxanthin®. We generated 18%, 27% and 32% of our revenues outside of the United States during the years ended March 31, 2024, 2023 and 2022, respectively. Competing in a global marketplace, we are influenced by the general economic conditions of the countries in which our customers operate, including adherence to our customers’ local governmental regulations and requirements. Since substantially all sales are made in U.S. currency, we have no material foreign exchange exposure.

 

Our production levels have a significant impact on our gross profit margin, as well as our ability to meet customer demand. Because our processes are agricultural and a large percentage of our production costs are fixed, it is important to maintain production volumes to support the minimal resource levels required to sustain a large-scale open culture agricultural facility. Our production costs include customary variables such as availability and costs of personnel, raw materials, energy, water and freight. These variables fluctuate based on changes in the local, national and world economies. More complex variables include cultivation methods, feeding formulations and harvesting processes, all of which include efforts to anticipate the extent of weather and environmental events and make timely and sufficient adjustments. Although the variability of such costs cannot be fully anticipated, we have focused increased effort in this area in order to produce both spirulina and astaxanthin at levels sufficient to fully absorb production costs into inventory.

 

Fresh water is critical for our natural astaxanthin and spirulina production, and while we have not experienced any long-term constraint on fresh-water availability, future availability could be negatively impacted by significant growth in the local population as well as by throughput constraints on the water delivery infrastructure owned by the County of Hawaii. Given the criticality of fresh water to our operations and the community, we recycle fresh water where possible and have developed additional water recycling systems in our efforts to utilize fresh water efficiently. Both fresh and sea water require electricity for pumping; and the cost of our electricity depends on the cost of fuel which is, in turn, tied to the global price of crude oil.

 

Complex biological processes in the cultivation and processing of our microalgae are influenced by factors beyond our control—the weather, for example. As a result, we cannot assure that adequate production levels will be consistent period over period. To the extent that our production levels are not sufficient to absorb these costs on a period basis, we recognize abnormal and non-inventoriable production costs, including fixed cost variances from normal production capacity, as an expense in the period incurred. Abnormal amounts of freight, handling costs and wasted material (spoilage) are recognized as current-period charges and fixed production overhead costs are allocated to inventory based on the normal capacity of production facilities. Normal capacity is defined as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. To offset increased production costs, we seek ways to increase production efficiencies in volume yield, potency, and quality consistent with our commitment to produce high-value, high-quality products.

 

We utilize several third-party contractors for encapsulation of our gelcaps, molding of our gummies and for the packaging of our finished products. Although these services are available from a limited number of sources, we believe that we have the ability to use other parties if any of the current contractors become unavailable.

 

 

During fiscal year 2024, we continue to experience a loss from operations as the impacts from the macroeconomic environment led to lower sales across our portfolio. Industry data shows that consumers intake of dietary supplements is not slowing down but may be trading down to private label brands to save on costs. The market for bulk material is increasingly price sensitive with many companies sourcing lower priced international ingredients.

 

Fiscal 2024 Summary:

 

	●	Net sales for the year were $23.1 million, a decrease of $0.1 million, or 0.5% from the prior year, driven primarily by a $1.0 million, or 12.0%, decrease in spirulina sales, offset by $0.9 million, or 6.3%, increase in astaxanthin sales.
	●	The pretax loss for the year was $5.3 million compared to pretax loss of $3.4 million in fiscal 2023.
	●	Cash at March 31, 2024 decreased by $0.3 million compared to last year primarily due to the net loss for the year, an increase in accounts receivables and investments in capital expenditures, offset by draws on the line of credit - related party, proceeds from the issuance of common stock related to a private placement and a decrease in inventories as we balanced inventory with customer demand.

 

 

Fiscal 2023 Summary:

 

	●	Net sales for the year were $23.2 million, a decrease of $12.8 million, or 35.6% from the prior year, driven primarily by a $9.6 million, or 53.6%, decrease in spirulina sales and $3.2 million, or 18.2%, decrease in astaxanthin sales.
	●	The pretax loss for the year was $3.4 million compared to pretax income of $2.2 million in fiscal 2022.
	●	Cash at March 31, 2023 decreased by $1.6 million compared to last year primarily due to the net loss for the year, an increase in inventories and investments in capital expenditures, offset by draws on the line of credit and line of credit - related party.

 

 

Results of Operations for the 2024, 2023, and 2022 Fiscal Years

 

The following tables present selected consolidated financial data for each of the past three fiscal years ($ in thousands):

 

Consolidated Performance Summary		2024				2023				2022
Net sales		$	23,071			$	23,178			$	35,968
Net sales (decrease) increase			(0.5	)%			(35.6	)%			11.2	%
Gross profit		$	5,945			$	7,259			$	13,566
Gross profit as % of net sales			25.8	%			31.3	%			37.7	%
Operating expenses		$	10,537			$	10,179			$	10,992
Operating expenses as % of net sales			45.7	%			43.9	%			30.6	%
Operating (loss) income		$	(4,592	)		$	(2,920	)		$	2,574
Operating (loss) income as % of net sales			(19.9	)%			(12.6	)%			7.2	%
Gain on extinguishment of debt		$	—			$	—			$	—
Income tax expense		$	(7	)		$	(18	)		$	(28	)
Net (loss) income		$	(5,267	)		$	(3,440	)		$	2,154

 

 

Net sales by product		2024				2023				2022
Packaged sales
Astaxanthin packaged		$	13,613			$	12,227			$	14,931
Astaxanthin packaged sales (decrease) increase			11.3	%			(18.1	)%			2.9	%
Spirulina packaged		$	5,779			$	4,814			$	7,604
Spirulina packaged sales (decrease) increase		20.0		%			(36.7	)%			(0.2	)%
Total Packaged sales		$	19,392			$	17,041			$	22,535
Total Packaged sales (decrease) increase			13.8	%			(24.4	)%			1.8	%
Bulk sales
Astaxanthin bulk		$	1,491			$	1,982			$	2,447
Astaxanthin bulk sales (decrease) increase			(24.8	)%			(19.0	)%			7.3	%
Spirulina bulk		$	1,572			$	3,541			$	10,386
Spirulina bulk sales (decrease) increase			(55.6	)%			(65.9	)%			45.9	%
Total Bulk sales		$	3,063			$	5,523			$	12,833
Total Bulk sales (decrease) increase			(44.5	)%			(57.0	)%			36.6	%
Contract extraction and R&D services revenue		$	616			$	614			$	600

 

Fiscal 2024 results compared with Fiscal 2023

 

Net Sales Net sales decreased $0.1 million, or 0.5%, in fiscal year ended March 31, 2024 compared with fiscal year 2023. Although the sales were essentially flat, the mix of sales changed with more packaged sales in the fiscal year ended March 31, 2024 and lower sales of bulk products. The sales decrease in bulk spirulina was primarily due to the market for bulk material being increasingly price sensitive with many companies sourcing lower priced international ingredients, and the change in the business of one of our key customers. The lower sales of bulk astaxanthin were mostly due to timing. For our packaged sales, the increase was primarily due to the timing of shipments and higher demand at one of our key customers.

 

Gross Profit Gross profit as a percent of net sales decreased by 5.5 percentage points compared to fiscal 2023, which was the result of higher cost per kilogram of astaxanthin and spirulina due to lower overall production volumes, as well as write downs of purchased third party material and higher than normal excess capacity, lower of cost or market adjustment for spirulina inventory write-offs.

 

Operating Expenses Operating expenses increased $0.4 million, or 3.5% compared to fiscal year 2023. Selling and marketing expenses increased primarily due to higher online selling fees, offset by lower general and administrative and research and development costs related to lower headcount.

 

Income Taxes We recorded an income tax expense of $7,000 in fiscal 2024 for state taxes, compared to income tax expense of $18,000 in fiscal 2023. 

 

Fiscal 2023 results compared with Fiscal 2022

 

Net Sales Net sales decreased $12.8 million, or 35.6%, in fiscal year ended March 31, 2023 compared with fiscal year 2022. This decrease was primarily driven by a $6.8 million, or 65.9%, decrease in spirulina bulk sales and $5.5 million, or 24.4%, decrease in astaxanthin and spirulina packaged sales, when compared with fiscal year 2022. The overall sales decrease was primarily due to lower demand resulting from higher inflation and consumers shifting their spend from goods to experiences and services. Given the lower demand combined with global supply chain constraints in the prior year, our bulk customers continue to have higher than normal inventory levels. For our packaged sales, in addition to the macroeconomic impacts noted above, there was a decrease in sales due to the timing of shipments to a significant customer. As a result, in the current fiscal year, consumer movement was not fully reflected in the packaged sales.

 

Gross Profit Gross profit as a percent of net sales decreased by 6.4 percentage points compared to fiscal 2022, which was the result of higher cost per kilogram of astaxanthin and spirulina due to the impact of inflation on our underlying costs and lower spirulina production volumes.

 

Operating Expenses Operating expenses decreased $0.8 million, or 7.4% compared to fiscal year 2022. Selling and general and administrative expenses decreased primarily due to lower incentive compensation expense resulting from net operating loss in the current year compared to the prior year.

 

 

Income Taxes We recorded an income tax expense of $18,000 in fiscal 2023 for state taxes, compared to income tax expense of $28,000 in fiscal 2022.   

 

Liquidity and Going Concern

 

The accompanying consolidated financial statements, as of and for the fiscal year ended March 31, 2024 and 2023, have been prepared assuming we will continue as a going concern.  The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  We sustained operating losses and negative cash flows from operations for these same periods.  Further, as discussed below, we were not in compliance with two debt covenant requirements at March 31, 2024 and one debt covenant requirement at March 31, 2023.  In June 2023, the Bank instituted a freeze on additional advances from the Revolving Credit Agreement.  These conditions raise substantial doubt about our ability to continue as a going concern.  The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expense that may be necessary if we were unable to continue as a going concern.

 

As of March 31, 2024, we had cash of $0.7 million and working capital of $2.0 million compared to $1.0 million and $5.4 million, respectively, at March 31, 2023. We had the Credit Agreement with the Bank that provided for borrowings up to $2.0 million on a revolving basis, however, as part of the covenant waiver at March 31, 2023, the borrowings under this line of credit were frozen. On October 13, 2023, the Bank converted this line of credit to a term loan in the amount of $1.48 million with a maturity date of August 30, 2024. As of March 31, 2024, we had $1.24 million outstanding on this loan and as of March 31, 2023, we had outstanding borrowings of $1.54 million on the line of credit. (see Note 5 in the notes to consolidated financial statements).

 

We also have a loan facility with a related party that allows us to borrow up to $2.0 million on a revolving basis (the “Revolver”). At March 31, 2024 and 2023, we had $1.25 million and $0.5 million, respectively, outstanding borrowings on the Revolver, which were included in line of credit – related party on the Consolidated Balance Sheets. The Revolver expires on April 12, 2025 (see Note 5 and 15 in the notes to consolidated financial statements).

 

As of March 31, 2024, we had $3.2 million of debt ("Term Loans") payable to the Bank that require the payment of principal and interest monthly through August 2032. Pursuant to the Term Loans and the Credit Agreement, we are subject to annual financial covenants, customary affirmative and negative covenants and certain subjective acceleration clauses. As of March 31, 2024, our debt service coverage ratio and current ratio fell short of the Bank’s annual requirement. We are currently seeking a letter from the Bank waiving the covenant violations as of March 31, 2024, but noting there can be no assurance that the Bank will provide such a waiver and may declare a default if any covenants remain out of compliance at applicable measurement dates.  As of March 31, 2023, our debt service coverage ratio fell short of the Bank’s annual requirement. On June 22, 2023, the Bank provided us with a letter waiving the covenant violation as of March 31, 2023. 

 

On December 15, 2023, we completed a Private Placement of an aggregate of 400,000 shares of our common stock at a price of $1.00 per share, and incurred legal cost related to the Private Placement of $12,000. The net proceeds of $388,000 were used by us for general working capital. (See Note 10 in the notes to consolidated financial statements).

 

In April 2019, we obtained a loan in the amount of $1.5 million from a related party. The proceeds were used to pay down accounts payable and for general operating capital purposes. On April 12, 2021, December 14, 2022 and August 14, 2023, we amended this loan (see Note 5 and 15 in the notes to consolidated financial statements). As of both March 31, 2024 and 2023, we had $1.0 million outstanding on the related party note. The loan matures on April 12, 2025.

 

We continue to experience a loss from operations as the impacts from the macroeconomic environment led to lower sales across our portfolio for the fiscal year ended March 31, 2024. Industry data shows that consumers intake of dietary supplements is not slowing down but may be trading down to private label brands to save on costs. The market for bulk material is increasingly price sensitive with many companies sourcing lower priced international ingredients. Beginning in the second quarter of fiscal year 2023 through the end of fiscal year ended 2024, we drew on our funding sources to provide liquidity. To address the resulting cash flow challenges, we continue to monitor cost savings initiatives implemented in fiscal year 2023, including stopping or slowing production of inventory in alignment with current customer demand, maintaining a reduced headcount and compensation, primarily through attrition and furloughs, respectively, and eliminating certain discretionary selling, general and administrative expenses. We have also made some changes in the sales and marketing team starting with the Chief Commercial Officer and strengthening the sales team, updating our marketing materials to emphasize our competitive strengths and raising capital by completing a private placement in the third quarter of fiscal 2024.

 

Funds generated by operating activities and available cash are our most significant sources of liquidity for working capital requirements, debt service and funding of maintenance levels of capital expenditures. We have developed our operating plan to produce a significant portion of the cash flows necessary to meet all financial requirements, with the remaining need for capital raising. Although we have a history of either being in compliance with debt covenants, or obtaining the necessary waivers, execution of our operating plan is dependent on many factors, some of which are not within our control. However, no assurances can be provided that we will achieve our operating plan and cash flow projections for the next fiscal years or our projected consolidated financial position as of March 31, 2025. Such estimates are subject to change based on future results and such change could cause future results to vary significantly from expected results.  

 

 

As further described in the Risk Factors located in Item 1A of this Annual Report on Form 10-K, our results of operations and financial condition can be affected by numerous factors, many of which are beyond our control and could cause future results of operations to fluctuate materially as it has in the past.

 

Future operating results may fluctuate as a result of changes in sales volumes to our largest customers, weather patterns, increased competition, increased materials, nutrient and energy costs, government regulations and other factors beyond our control.

 

A significant portion of our expense levels are relatively fixed, so the timing of increases in expenses is based in large part on forecasts of future sales. If net sales are below expectations in any given period, the adverse impact on results of operations may be magnified by our inability to adjust spending quickly enough to compensate for the sales shortfall. We may also choose to reduce prices or increase spending in response to market conditions, which may have a material adverse effect on financial condition and results of operations.

 

Off-Balance Sheet Arrangements

 

As of March 31, 2024, we had no off-balance sheet arrangements or obligations.

 

Impact of Inflation

 

Inflationary factors such as increases in the costs of materials, utilities and labor directly affect our operations. We are also experiencing overall lower demand as consumers are feeling the impacts of higher inflation and are closely managing their discretionary spend. The exact impact on our results is difficult to isolate and quantify given the macroeconomic environment. Most of our leases provide for cost-of-living adjustments and require us to pay for insurance and maintenance expenses, all of which are subject to inflation. Additionally, our future lease costs for new facilities may include potentially escalating costs of real estate and construction. There is no assurance that we will be able to pass on increased costs to our customers.

 

Depreciation expense is based on our historical cost of fixed assets and is therefore potentially less than it would be if it were based on current replacement cost. While property and equipment acquired in prior years will ultimately have to be replaced at higher prices, it is expected that replacement will be a gradual process over many years.

 

Cash Flows The following table summarizes our cash flows from operating, investing and financing activities for each of the past three fiscal years ($ in thousands):

 

		2024				2023				2022
Total cash is provided by (used in):
Operating activities		$	(455	)		$	(2,100	)		$	2,379
Investing activities			(381	)			(1,068	)			(1,270	)
Financing activities			569				1,553				(2,287	)
Decrease in cash		$	(267	)		$	(1,615	)		$	(1,178	)

 

Cash used in operating activities in fiscal 2024 was the result of a net loss of $5.3 million and an increase of $0.8 million in accounts receivable, offset by non-cash charges of $2.4 million and a decrease of $3.4 million in inventories.

 

Cash used in operating activities in fiscal 2023 was the result of a net loss of $3.4 million, an increase of $1.2 million in inventories and a decrease of $1.7 million in accounts payables and other accruals, offset by non-cash charges of $2.1 million and a decrease of $2.2 million in accounts receivables. 

 

Cash used in investing activities in fiscal years 2024 and 2023 includes costs for acquiring equipment and leasehold improvements at our Kona facility.

 

Cash provided by financing activities in fiscal 2024 consisted primarily of the proceeds from the Private Placement of $0.4 and draws on the related party line of credit of $0.8 million, offset by debt service payments of $0.2 million and paydown of the Bank line of credit of $0.3 million.

 

Cash provided by financing activities in fiscal 2023 consisted primarily of draws on the line of credit of $1.5 million and on the related party line of credit of $0.5 million, offset by debt service payments of $0.5 million.

 

 

Recent Accounting Pronouncements

 

Except as discussed in Note 2, Significant Accounting Policies, in the notes to our consolidated financial statements included in this Annual Report on Form 10-K, we have considered all new accounting pronouncements and have concluded that there are no new pronouncements that may have a material impact on our results of operations, financial condition, or cash flows, based on current information. 

 

Application of Critical Accounting Policies and Estimates

 

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements in conformity with those accounting principles requires management to make judgments and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Management regularly re-evaluates its judgments and estimates which are based upon historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Management believes that of its significant accounting policies, policies that may involve a higher degree of judgment and complexity are inventory valuations, valuation of equipment and leasehold improvements and long-lived assets, and income taxes.

 

Revenue - We record revenue based on the five-step model which includes: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when the performance obligations are satisfied. Substantially all of our revenue is generated by fulfilling orders for the purchase of our microalgal dietary supplements to retailers, wholesalers, or direct to consumers via online channels, with each order considered to be a distinct performance obligation. These orders may be formal purchase orders, verbal phone orders, e-mail orders or orders received online. Shipping and handling activities for which we are responsible under the terms and conditions of the order are not accounted for as performance obligations but as fulfillment costs. These activities are required to fulfill our promise to transfer the goods and are expensed when revenue is recognized. 

 

Revenue is measured as the net amount of consideration expected to be received in exchange for fulfilling a performance obligation. We have elected to exclude sales, use and similar taxes from the measurement of the transaction price.  The amount of consideration expected to be received and revenue recognized includes estimates of variable consideration, which includes costs for trade promotion programs, coupons, returns and early payment discounts.  Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. We review and update these estimates at the end of each reporting period and the impact of any adjustments are recognized in the period the adjustments are identified. In assessing whether collection of consideration from a customer is probable, we consider the customer's ability and intent to pay that amount of consideration when it is due. Payment of invoices is due as specified in the underlying customer agreement, typically 30 days from the invoice date, which occurs on the date of transfer of control of the products to the customer. Revenue is recognized at the point in time that control of the ordered products is transferred to the customer. Generally, this occurs when the product is delivered, or in some cases, picked up from one of our distribution centers by the customer.  Revenue from extraction services is recognized when control is transferred upon completion of the extraction process.

 

Customer contract liabilities consist of customer deposits received in advance of fulfilling an order and are shown separately on the consolidated balance sheets. During the years ended March 31, 2024 and 2023, we recognized $26,000 and $94,000, respectively, of revenue from deposits that were included in contract liabilities as of March 31, 2023 and 2022, respectively. Our contracts have a duration of one year or less and therefore, we have elected the practical expedient of not disclosing revenues allocated to partially unsatisfied performance obligations.

 

Inventories - We record inventories at the lower of cost or net realizable value. Cost is defined as the sum of the applicable expenditures and charges directly or indirectly incurred in bringing inventories to their existing condition and location. Our inventories are valued using the first-in, first-out method. Inventory values are subject to many critical estimates, including production levels and capacity, changes in the prices paid for raw materials, supplies, and labor, changes in yield, potency, and quality of biomass, changes in processing or production methods, and changes in the carrying value of our inventories resulting from the prices our customers are willing to pay for our products. Such estimates are revised quarterly. Changes in management’s estimates could result in increases or decreases in the recorded amounts of inventory and cost of sales.

 

To the extent that our production levels are not sufficient to absorb all production costs on a period basis, we recognize abnormal production costs, including fixed cost variances from normal production capacity, fixed production overhead costs, idle facilities, freight handling costs and spoilage, as an expense in the period incurred, without adjusting overhead absorption rates. Normal capacity is defined as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. Changes in management’s estimates could result in increases or decreases in the recorded amounts of inventory and cost of sales.

 

 

Beginning in fiscal 2021 through fiscal year 2023, cultivation of astaxanthin was completed in the first six months of the fiscal year during the most productive months of the year due to the best growing conditions, compared to year-round cultivation in the prior fiscal years. In fiscal year 2024, cultivation of astaxanthin reverted back to year-round in order to manage staffing constraints. We calculate total production costs for the year based on normal capacity of production expected to be achieved in a year under normal circumstances. These costs are then allocated into inventory based on the period of production, not including abnormal production costs. Allocating fixed and overhead costs requires management’s judgement to determine when production is outside of the normal range of expected variation in production.

 

Management reviews inventory levels, inventory turnover, product age and product marketability quarterly to evaluate recoverability and determine if a write-off of inventory is deemed necessary.

 

Equipment and leasehold improvements - Equipment and leasehold improvements are reported at cost less accumulated depreciation and amortization. Self-constructed leasehold improvements include design, construction and supervision costs. These costs are recorded in construction in progress and are transferred to equipment and leasehold improvements when construction is completed, and the facilities are placed in service. Long-lived assets, such as property and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized to the extent that the carrying amount exceeds the asset’s fair value. We did not recognize any impairment of long-lived assets as of March 31, 2024. We recognized $5,000 impairment of long-lived assets as of March 31, 2023, which are included in other income (expense) on the consolidated statements of operations.

 

Stock-Based Compensation - We provide compensation benefits in the form of stock options, restricted stock units and restricted stock grants to employees and non-employee directors. Our stock-based compensation expense is based on the fair value of awards, adjusted for estimated forfeitures, and amortized on a straight-line basis over the requisite service period for stock options and restricted stock units (“RSUs”). The fair value of stock options is estimated as of the date of grant using the Black-Scholes option-pricing model. This model requires input assumptions for our expected dividend yield, expected stock price volatility, risk-free interest rate and the expected option term. Restricted stock and RSUs are valued at the fair value of our common stock as of the date of the grant. See Note 9 in the notes to our consolidated financial statements.

 

Income taxes - Income taxes are accounted for under the asset and liability method. The asset and liability method require the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using income tax rates applicable to the period in which the tax difference is expected to reverse.

 

Our judgment is required in determining any valuation allowance recorded against deferred tax assets, specifically net operating loss carryforwards, tax credit carryforwards and deductible temporary differences that may reduce taxable income in future periods. In assessing the need for a valuation allowance, we consider all available evidence including past operating results, estimates of future taxable income and tax planning opportunities. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to income tax expense in the period in which such determination is made. 

 

 

 

CYANOTECH CORPORATION

 

CONSOLIDATED BALANCE SHEETS

 

March 31,

 

 

See accompanying notes to consolidated financial statements

 

 

CYANOTECH CORPORATION

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

Years ended March 31,

 

 

See accompanying notes to consolidated financial statements

 

 

CYANOTECH CORPORATION

 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

Years ended March 31, 2024, 2023 and 2022 

 

 

See accompanying notes to consolidated financial statements

 

 

CYANOTECH CORPORATION

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Years ended March 31,

 

 

See accompanying notes to consolidated financial statements

 

 

CYANOTECH CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

1.	ORGANIZATION AND BASIS OF PRESENTATION

 

Cyanotech Corporation (the “Company”), located in Kailua-Kona, Hawaii, was incorporated in the state of Nevada on March 3, 1983 and is traded on the OTCQB Market under the symbol “CYAN”. The Company is engaged in the production of natural products derived from microalgae for the dietary supplements market.

 

The Company is an agricultural company that produces high value natural products derived from microalgae grown in complex and intricate open-pond agricultural systems on the Kona coast of Hawaii.  The Company's products include Hawaiian Spirulina Pacifica®, a superfood with numerous benefits, including boosting the immune system and overall cellular health; and BioAstin® Hawaiian Astaxanthin®, a powerful antioxidant shown to support and maintain the body's natural inflammatory response.

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements include the accounts of Cyanotech Corporation and its wholly owned subsidiary, Nutrex Hawaii, Inc. (“Nutrex Hawaii” or “Nutrex”). The Company operates in one business segment and uses one measurement of profitability for its business.  Intercompany balances and transactions have been eliminated in consolidation.

 

Liquidity and Going Concern

 

The accompanying consolidated financial statements, as of and for the fiscal year ended March 31, 2024 and 2023, have been prepared assuming the Company will continue as a going concern.  The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The Company sustained operating losses and negative cash flows from operations for these same periods.  Further, as discussed below, the Company was not in compliance with two debt covenant requirements at March 31, 2024 and one debt covenant requirement at March 31, 2023. In June 2023, First Foundation Bank (the “Bank”) instituted a freeze on additional advances from the Revolving Credit Agreement (the “Line of Credit”).  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expense that may be necessary if the Company was unable to continue as a going concern.

 

As of March 31, 2024, the Company had cash of $707,000 and working capital of $2,037,000 compared to $974,000 and $5,393,000, respectively, at March 31, 2023. The Company had a Line of Credit with the Bank that provided for borrowings up to $2,000,000 on a revolving basis, however, as part of the covenant waiver at March 31, 2023, the borrowings under this line of credit were frozen. On October 13, 2023, the Bank converted this line of credit to a term loan in the amount of $1,480,000 with a maturity date of August 30, 2024 (the “2023 Loan”). As of March 31, 2024, the Company had $1,240,000 outstanding on this loan and as of March 31, 2023, the Company had outstanding borrowings of $1,540,000 on the line of credit.  (See Note 5).

 

The Company also has a loan facility with a related party that allows the Company to borrow up to $2,000,000 on a revolving basis (the “Revolver”). At March 31, 2024 and March 31, 2023, the Company had $1,250,000 and $500,000, respectively, outstanding borrowings on the Revolver, which were included in line of credit – related party on the Consolidated Balance Sheets. The Revolver expires on April 12, 2025 (see Notes 5 and 15).

 

As of March 31, 2024, the Company had $3,220,000 of debt (“2012 Loan”) payable to the Bank that require the payment of principal and interest monthly through August 2032. Pursuant to the 2012 Loan and 2023 Loan, the Company is subject to annual financial covenants, customary affirmative and negative covenants and certain subjective acceleration clauses. As of March 31, 2024, the Company’s debt service coverage ratio and current ratio fell short of the Bank’s annual requirement. The Company is currently seeking a letter from the Bank waiving the covenant violations as of March 31, 2024, but noting there can be no assurance that the Bank will provide such a waiver and may declare a default if any covenants remain out of compliance at applicable measurement dates. As of March 31, 2023, the Company’s debt service coverage ratio fell short of the Bank’s annual requirement. On June 22, 2023, the Bank provided the Company with a letter waiving the covenant violation as of March 31, 2023.

 

On December 15, 2023, the Company completed a private placement (the “Private Placement”) for 400,000 shares of its common stock at a price of $1.00 per share, and incurred legal costs related to the Private Placement of $12,000. The net proceeds of $388,000 were used by the Company for general working capital. (See Note 10).

 

In April 2019, the Company obtained a loan in the amount of $1,500,000 from a related party. The proceeds were used to pay down accounts payable and for general operating capital purposes. On April 12, 2021, December 14, 2022 and August 14, 2023, the Company amended this loan (see Notes 5 and 15). As of both March 31, 2024 and 2023, the Company had $1,000,000 outstanding on the related party note. The loan matures on April 12, 2025.

 

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The Company continues to experience a loss from operations as the impacts from the macroeconomic environment led to lower sales across all of the Company’s portfolio for the fiscal year ended 2024. Industry data shows that consumers intake of dietary supplements is not slowing down but may be trading down to private label brands to save on costs. Beginning in the second fiscal quarter of 2023 through the end of fiscal year ended 2024, the Company drew on its funding sources to provide liquidity. To address the resulting cash flow challenges, the Company continues to monitor cost savings initiatives implemented in fiscal year 2023, including stopping or slowing production of inventory in alignment with current customer demand, maintaining a reduced headcount and compensation, primarily through attrition and furloughs, respectively, and eliminating certain discretionary selling, general and administrative expenses. The Company has also made changes in the sales and marketing team starting with the Chief Commercial Officer and strengthening the sales team, updating the Company’s marketing materials to emphasize its competitive strengths and raising capital by completing a private placement in the third fiscal quarter of 2024.

 

Funds generated by operating activities and available cash are the Company's most significant sources of liquidity for working capital requirements, debt service and funding of maintenance levels of capital expenditures. The Company has developed its operating plan to produce a significant portion of the cash flows necessary to meet all financial requirements. Although the Company has a history of either being in compliance with debt covenants, or obtaining the necessary waivers, execution of its operating plan is dependent on many factors, some of which are not within the control of the Company. However, no assurances can be provided that the Company will achieve its operating plan and cash flow projections for the next fiscal years or its projected consolidated financial position as of March 31, 2025. Such estimates are subject to change based on future results and such change could cause future results to vary significantly from expected results.  

 

2.	SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of any contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods reported.  Management reviews these estimates and assumptions periodically and reflects the effect of revisions in the period that they are determined to be necessary.  Actual results could differ from those estimates and assumptions.

 

Financial Instruments and Fair Value

 

The Company applies a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:

 

	Level 1 —	Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
	Level 2 —	Inputs to the valuation methodology include:

 

	●	Quoted prices for similar assets or liabilities in active markets;
	●	Quoted prices for identical or similar assets or liabilities in inactive markets;
	●	Inputs other than quoted prices that are observable for the asset or liability; and
	●	Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

If the asset or liability has a specified contractual term, the Level 2 input must be observable for substantially the full term of the asset or liability.

 

Level 3 —

Inputs to the valuation methodology are unobservable and significant to the fair value.

 

Cash, Accounts Receivable, Accounts Payable, Accrued Expenses and Customer Deposits - Due to the short-term nature of these instruments, management believes that the carrying amounts approximate fair value.

 

Line of Credit, Revolver, Short-Term and Long-Term Debt - The carrying amount of our line of credit, Revolver and short and long-term debt approximates fair value as interest rates applied to the underlying debt are adjusted quarterly to market interest rates, which approximate current interest rates for similar debt instruments of comparable maturities. 

 

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Cash

 

Cash primarily consists of cash on hand and cash in bank deposits.

 

Concentration Risk

 

The Company maintains its cash accounts in banks located in Hawaii, which are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank.  The Company had cash balances at March 31, 2024 and 2023 that exceeded the balance insured by the FDIC by $166,000 and $422,000, respectively.  A significant portion of revenues and accounts receivables are derived from a few major customers. For the year ended March 31, 2024, two customers individually accounted for 34% and 17% of the Company’s total net sales and for the year ended March 31, 2023, two customers individually accounted for 34% and 6% of the Company’s total net sales. Two customers accounted for 72% and 46% of the Company’s accounts receivable balance as of March 31, 2024 and 2023, respectively.

 

Accounts Receivable

 

Accounts receivable are recorded at the invoiced amount and do not accrue interest. Credit is extended based on evaluation of the customer's financial condition. Collateral is not required. The allowance for credit losses reflects management’s best estimate of expected credit losses inherent in the accounts receivable balance. Management determines the allowance based on historical experience, specifically identified nonpaying accounts and other currently available evidence. Management reviews its customer account balances monthly with a focus on significant individual past due balances over 90 days. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers or otherwise.

 

Inventories

 

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. Net realizable value is defined as estimated sales price less cost to dispose. Inventory costs include materials, labor, overhead and third-party costs. Management reviews and writes down inventory for known or expected inventory obsolescence based on product age and quality which may affect salability.

 

The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, fixed production overhead costs, idle facilities, freight handling costs and spoilage, as an expense in the period incurred, without adjusting overhead absorption rates. Normal production capacity is defined as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance.

 

Equipment and Leasehold Improvements

 

Equipment and leasehold improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives for equipment and furniture and fixtures, and the shorter of the land lease term (see Notes 4 and 7) or estimated useful lives for leasehold improvements as follows (in years):

 

Equipment	3	to	10
Furniture and fixtures	3	to	7
Leasehold improvements	10	to	25

 

Capital project costs are accumulated in construction-in-progress until completed, at which time the costs are transferred to the relevant asset and commence depreciation. Repairs and Maintenance costs are expensed in the period incurred. Repairs and maintenance that significantly increase the useful life or value of the asset are capitalized and depreciated over the remaining life of the asset. The Company capitalizes interest cost incurred on funds used to construct property and equipment. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life.

 

Impairment of Long-Lived Assets

 

Management reviews long-lived assets, such as equipment, leasehold improvements and purchased intangibles subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized to the extent that the carrying amount exceeds the asset’s fair value. Assets to be disposed of and related liabilities would be separately presented in the consolidated balance sheet. Assets to be disposed of would be reported at the lower of the carrying value or fair value less costs to sell and would not be depreciated.

 

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Accounting for Asset Retirement Obligations

 

Management evaluates quarterly the potential liability for asset retirement obligations under the Company’s lease for its principal facility and corporate headquarters. No liability has been recognized as of March 31, 2024 and 2023 (see Note 7).

 

Revenue Recognition

 

The Company records revenue based on the five-step model which includes: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when the performance obligations are satisfied. Substantially all of the Company’s revenue is generated by fulfilling orders for the purchase of its microalgal dietary supplements to retailers, wholesalers, or direct to consumers via online channels, with each order considered to be a distinct performance obligation. These orders may be formal purchase orders, verbal phone orders, e-mail orders or orders received online. Shipping and handling activities for which the Company is responsible under the terms and conditions of the order are not accounted for as performance obligations but as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the goods and are expensed when revenue is recognized. 

 

Revenue is measured as the net amount of consideration expected to be received in exchange for fulfilling a performance obligation. The Company has elected to exclude sales, use and similar taxes from the measurement of the transaction price.  The amount of consideration expected to be received and revenue recognized includes estimates of variable consideration, which includes costs for trade promotion programs, coupons, returns and early payment discounts.  Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. The Company reviews and updates these estimates at the end of each reporting period and the impact of any adjustments are recognized in the period the adjustments are identified. In assessing whether collection of consideration from a customer is probable, the Company considers the customer's ability and intent to pay that amount of consideration when it is due. Payment of invoices is due as specified in the underlying customer agreement, typically 30 days from the invoice date, which occurs on the date of transfer of control of the products to the customer. Revenue is recognized at the point in time that control of the ordered products is transferred to the customer. Generally, this occurs when the product is delivered, or in some cases, picked up from one of the Company’s distribution centers by the customer. Revenue from extraction services is recognized when control is transferred upon completion of the extraction process.

 

Customer contract liabilities consist of customer deposits received in advance of fulfilling an order and are shown separately on the consolidated balance sheets. During the years ended March 31, 2024 and 2023, the Company recognized $26,000 and $94,000, respectively, of revenue from deposits that were included in contract liabilities as of March 31, 2023 and 2022, respectively. The Company’s contracts have a duration of one year or less and therefore, the Company has elected the practical expedient of not disclosing revenues allocated to partially unsatisfied performance obligations.

 

Research and Development

 

Research and development costs are expensed as incurred and consist primarily of labor, benefits and outside research.

 

Advertising

 

Advertising costs are expensed as incurred. Total advertising expense for the years ended March 31, 2024, 2023 and 2022 was $1,308,000, $1,513,000, and $1,458,000, respectively.

 

Income Taxes

 

Income taxes are accounted for under the asset and liability method. The asset and liability method require the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using income tax rates applicable to the period in which the tax difference is expected to reverse.

 

Judgment is required in determining any valuation allowance recorded against deferred tax assets, specifically net operating loss carryforwards, tax credit carryforwards and deductible temporary differences that may reduce taxable income in future periods. In assessing the need for a valuation allowance, the Company considers all available evidence including past operating results, estimates of future taxable income and tax planning opportunities. In the event the Company changes its determination as to the amount of deferred tax assets that can be realized, it will adjust its valuation allowance with a corresponding impact to income tax expense in the period in which such determination is made.

 

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In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including resolution of related appeals or litigation processes, based on the technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold, the tax position is measured and recognized in the Company’s financial statements as the largest amount of tax benefit that, in management’s judgment, is greater than 50% likely of being realized upon settlement. At March 31, 2024 and 2023, there were no liabilities for income tax associated with unrecognized tax benefits.

 

The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest expense in its consolidated statements of operations. During the years ended March 31, 2024 and 2023, there were no accruals for the payment of interest and penalties related to uncertain tax positions.

 

Share-Based Compensation

 

The Company accounts for share-based payment arrangements using fair value. The Company currently has no liability-classified awards. Equity-classified awards, including grants of restricted stock, restricted stock units and employee stock options, are measured at the grant-date fair value of the award and are not subsequently remeasured unless an award is modified. The cost of equity-classified awards is recognized in the statement of operations over the period during which an employee is required to provide the service in exchange for the award, or the vesting period.  All stock-based compensation for restricted stock, restricted stock units and stock options has been classified as general and administrative expense in the consolidated statement of operations.

 

The Company utilizes the Black-Scholes option pricing model to determine the fair value of each option award. Expected volatilities are based on the historical volatility of the Company’s common stock over a period consistent with that of the expected term of the options. The expected term of the options is estimated based on factors such as vesting periods, contractual expiration dates and historical exercise behavior. The risk-free rates for periods within the contractual life of the options are based on the yields of U.S. Treasury instruments with terms comparable to the estimated option terms. The forfeiture rate of the options is estimated at the time of the grant and is based on historical forfeitures of similar grants.  The fair value of restricted stock units is the closing stock price on the grant date.

 

Per Share Amounts

 

Basic earnings (loss) per common share is calculated by dividing net income (loss) for the year by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by dividing net income for the year by the sum of the weighted average number of common shares outstanding during the year plus the number of potentially dilutive common shares (“dilutive securities”) that were outstanding during the year. Dilutive securities include restricted stock units and stock options granted pursuant to the Company’s stock option plans. Dilutive securities related to the Company’s stock option plans are included in the calculation of diluted earnings per common share using the treasury stock method. Potentially dilutive securities are excluded from the computation of earnings per share in periods in which a net loss is reported, as their effect would be antidilutive. A reconciliation of the numerators and denominators of the basic and diluted income (loss) per common share calculations for the years ended March 31, 2024, 2023 and 2022 is presented in Note 11. 

 

Reclassifications

 

Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation.  There was no impact on previously reported financial statements for the periods presented.

 

Recent Accounting Pronouncements

 

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses” (“Topic 326”), which was subsequently amended in November 2018 through ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses” (“CECL”). CECL requires entities to estimate lifetime expected credit losses for trade and other receivables, net investment in leases, financing receivables, debt securities and other instruments, which will result in earlier recognition of credit losses. The guidance is effective for interim and annual periods beginning after December 15, 2022. The Company adopted this standard as of April 1, 2023, however, due to the relatively short-term nature of its accounts receivable and history of limited bad debt expense, the impact of this guidance was not significant to the Company’s consolidated financial statements and related disclosure. The Company will continue to evaluate the impact of CECL going forward.

 

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 28): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosure of incremental segment information on an annual and interim basis.  ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and it requires retrospective application to all prior periods presented in the financial statements.  The Company is currently evaluating the impact that ASU 2023-07 will have on the presentation of its consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosure” (“ASU 2023-09”), which enhances the transparency and decision usefulness of income tax disclosures. Adjustments to the annual disclosure of income taxes include: a tabulate rate reconciliation comprised of eight specific categories; income taxes paid, disaggregated between significant federal, state, and foreign jurisdictions; eliminating requirements to disclose the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made; and adds a requirement to disclose income (or loss) from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) from continuing operations disaggregated between domestic and foreign. ASU 2023-09 is effective for public business entities for fiscal years beginning on or after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-09 should be applied on a prospective basis. Retrospective application is permitted. The company is currently evaluating ASU 2023-09 to determine its impact on the Company’s disclosures.

 

 

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3.	INVENTORIES

 

Inventories consist of the following as of March 31, 2024 and 2023:

 

		2024				2023
		(in thousands)
Raw materials		$	1,149			$	1,887
Work in process			2,195				2,049
Finished goods			3,658				6,502
Supplies			311				269
Inventories		$	7,313			$	10,707

 

The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, fixed production overhead costs, idle facilities, freight handling costs and spoilage, as an expense in the period incurred, without adjusting overhead absorption rates. Normal production capacity is defined as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. The Company expensed abnormal production costs of $206,000, $90,000 and $0 to cost of sales for the fiscal years ended March 31, 2024, 2023 and 2022, respectively. The increase in the current fiscal year was primarily due to abnormally high costs associated with regenerating fallowed spirulina ponds, therefore, these production costs were written off.

 

Beginning in fiscal year 2021 through fiscal year 2023, cultivation of astaxanthin was completed in the first six months of the fiscal year during the most productive months of the year due to the best growing conditions, compared to year-round cultivation in the prior fiscal years. In fiscal year 2024, cultivation of astaxanthin reverted back to year-round in order to manage staffing constraints. The Company calculates total production costs for the year based on normal capacity of production expected to be achieved in a year under normal circumstances. These costs are then allocated into inventory based on the period of production, not including abnormal production costs. Allocating fixed and overhead costs requires management’s judgement to determine when production is outside of the normal range of expected variation in production.

 

Other non-inventoriable fixed costs of $467,000, $269,000 and $136,000 were expensed to cost of sales for the fiscal years ended March 31, 2024, 2023 and 2022, respectively. The increase in the current fiscal year was primarily due to lower overall production volumes with higher than normal excess capacity expense for the full year compared to the prior fiscal year.

 

Net realizable value adjustments for spirulina products of $256,000 were expensed to cost of sales for the fiscal year ended March 31, 2024, primarily due to low production volumes with high fixed cost base. There were no net realizable value adjustments for fiscal year ended March 31, 2023 or 2022.

 

4.	EQUIPMENT AND LEASEHOLD IMPROVEMENTS

 

Equipment and leasehold improvements consist of the following as of March 31, 2024 and 2023:

 

		2024				2023
		(in thousands)
Equipment		$	21,904			$	21,649
Leasehold improvements			15,075				15,038
Furniture and fixtures			419				407
			37,398				37,094
Less accumulated depreciation and amortization			(27,500	)			(25,947	)
Construction in-progress			211				219
Equipment and leasehold improvements, net		$	10,109			$	11,366

 

Management has determined that $0, $5,000 and $21,000 of asset impairment existed as of March 31, 2024, 2023 and 2022, and the impairment losses were included in other income (expense) on the consolidated statements of operations.

 

Depreciation and amortization expense were approximately $1,589,000, $1,655,000 and $1,599,000 for the years ended March 31, 2024, 2023 and 2022, respectively.

 

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5.	LINE OF CREDIT AND TERM DEBT

 

Total debt consists of the following at March 31, 2024 and 2023 as follows:

 

		2024				2023
		(in thousands)
Line of credit – bank		$	—			$	1,540
Short-term debt – bank			1,240				—
Line of credit – related party			1,250				500
Long-term debt			3,220				3,461
Long-term debt – related party			1,000				1,000
Unamortized debt issuance costs			(80	)			(92	)
Less current maturities			(5,630	)			(5,409	)
Total long-term debt, less current maturities		$	1,000			$	1,000

 

Line of Credit and Term Loans

 

On June 3, 2016, the Company entered into a Credit Agreement with the Bank after the necessary approvals from the State of Hawaii were received, to secure the lien on the Company’s leasehold property in Kona, Hawaii. The Credit Agreement further defined the terms and conditions for the 2012 Loan and allowed for the Line of Credit, which was subsequently converted to the 2023 Loan. The Credit Agreement grants the Bank the following security interests in the Company’s property: (a) a lien on the Company’s leasehold interest in its Kona facility; (b) an assignment of the Company’s interest in leases and rents on its Kona facility; and (c) a security interest in all fixtures, furnishings and equipment related to or used by the Company at the Kona facility. Each security interest is further subject to the terms of the Credit Agreement.

 

The Line of Credit allowed the Company to borrow up to $2,000,000 on a revolving basis. Borrowings under the Credit Agreement bear interest at the Wall Street Journal prime rate (8.0% at March 31, 2023) plus 2%, floating, provided that at no time shall the annual interest rate be less than 5.25%. On October 13, 2023, the Bank converted the Line of Credit to the 2023 Loan in the amount of $1,480,000, with no further advances or disbursements under this line and matures on August 30, 2024. The 2023 Loan requires monthly payments of at least $40,000 plus interest accrued on the unpaid balance of the loan at the Wall Street Journal prime rate plus 2%, floating, provided that at no time shall the annual interest rate be less than 7.0%. As of March 31, 2024, the Company had $1,240,000 outstanding on the 2023 Loan which bears interest at 8.5%, plus 2%. As of March 31, 2023, the outstanding balance under the Line of Credit was $1,540,000. Both the 2023 Loan and the Line of Credit were included in current liabilities on the Consolidated Balance Sheets.

 

In 2012, the Company executed a loan agreement with a lender providing for $5,500,000 in aggregate the 2012 Loan secured by substantially all the Company’s assets, including a mortgage on the Company's interest in its lease at the National Energy Laboratory of Hawaii Authority, pursuant to a Term Loan Agreement dated August 14, 2012 (the “2012 Loan Agreement”). The 2012 Loan is evidenced by promissory notes in the amounts of $2,250,000 and $3,250,000, the repayment of which is partially guaranteed under the provisions of a USDA Rural Development Guarantee. The proceeds of the 2012 Loan were used to acquire processing equipment and leasehold improvements at its Kona, Hawaii facility.

 

The provisions of the 2012 Loan required the payment of interest only for the first 12 months of the term; thereafter, and until its maturity on August 14, 2032, the obligation fully amortizes over nineteen (19) years. Interest on the 2012 Loan accrues on the outstanding principal balance at an annual variable rate equal to the published Wall Street Journal prime rate (8.5% at March 31, 2024 and 7.5% at March 31, 2023) plus 1.0% and is adjustable on the first day of each calendar quarter and fixed for that quarter, provided that at no time shall the annual interest rate be less than 5.5%. The balance under the 2012 Loan was $3,220,000 and $3,461,000 at March 31, 2024 and 2023, respectively, and was included in current maturities of long-term debt in the debt table above. See Loan Covenants, Violations and Waiver below.

 

The 2012 Loan included a one-time origination and guaranty fees totaling $214,500 and an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year, beginning December 31, 2012. The USDA guaranteed 80% of all amounts owing under the 2012 Loan. The balance in unamortized debt issuance costs was $80,000 and $92,000 at March 31, 2024 and 2023, respectively, and was included in current maturities of long-term debt in the debt table above.  See Loan Covenants, Violations and Waiver below.

 

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Loan Covenants, Violations and Waiver

 

The Company’s 2023 Loan and 2012 Loan are subject to annual debt service and other financial covenants, including covenants which require the Company to meet key financial ratios and customary affirmative and negative covenants.  As of March 31, 2023, the Company was not in compliance with the required debt service coverage ratio, however, was in compliance with the two other covenants. Due to this violation, the Bank would be contractually entitled to require immediate repayment of the outstanding term loan amount of $3,461,000 and the outstanding line of credit balance of $1,540,000. However, on June 22, 2023, the Bank issued the Company a letter waiving the covenant violation as of March 31, 2023, and implemented an immediate freeze on any and all further advances of the Credit Agreement through the maturity date, with an outstanding balance in the amount of $1,770,000 as of June 21, 2023. As of March 31, 2024, the Company was not incompliance with the debt service coverage and current ratio, however, was in compliance with the third covenant. The Company is currently seeking a letter from the Bank waiving the covenant violations as of March 31, 2024, but there can be no assurance that the Bank will provide such a waiver and may declare a default if any covenants remain out of compliance at applicable measurement dates.

 

Although the Term Loans mature in August 2032, it is probable that a debt covenant violation occurs within the next twelve months.  Therefore, the Term Loans and related unamortized debt issuance costs are classified as current on the Balance Sheet as of March 31, 2024 and 2023.

 

Line of Credit and Debt – Related Party

 

In April 2019, the Company obtained a loan in the amount of $1,500,000 with a related party and the interest was payable quarterly.  The loan was originally due in April 2021. In April 2021, the Company amended the loan, which extended the expiration to April 2024, converted $500,000 into the Revolver, adjusted the interest rate to reflect a floor of 5%, and granted a security interest in substantially all of the Company’s personal property assets, subject to limited exceptions. Concurrently, with the amendment and conversion of the original loan, the Company repaid in cash the principal amount of $500,000 plus accrued interest to date of $1,900 (see Note 15).  In December 2022, the Company amended the loan to extend the expiration to April 2025 and increase the Revolver to $1,000,000. On August 14, 2023, the Company amended the loan to increase the Revolver to $2,000,000.

 

At both March 31, 2024 and 2023, the balance under this loan was $1,000,000, which was included in long-term debt in the debt table above. At March 31, 2024 and 2023, the balance under the Revolver was $1,250,000 and $500,000, respectively, which was included in line of credit – related party in the debt table above. Interest accrues on the outstanding principal balance and the Revolver at an annual variable rate equal to the published Wall Street Journal prime rate (8.5% and 7.5% at March 31, 2024 and 2023, respectively) plus 1.0% and is adjustable on the first day of each calendar quarter and fixed for that quarter, provided that at no time shall the annual interest rate be less than 5.0%.

 

Future principal payments, excluding unamortized debt issuance costs, under the loans at March 31, 2024 are as follows:

 

Fiscal year ending March 31		(in thousands)
2025		$	4,460
2026			1,000
Total principal payments		$	5,460

 

6.	ACCRUED EXPENSES

 

Accrued expenses as of March 31, 2024 and 2023 consist of the following:

 

		2024				2023
		(in thousands)
Wages		$	234			$	215
Bonus and profit sharing			—				143
Vacation			327				393
Interest and legal			32				30
Other accrued expenses			164				320
Total accrued expenses		$	757			$	1,101

 

7.	OPERATING LEASES

 

The Company’s principal facility and its corporate headquarters are located at the Natural Energy Laboratory of Hawaii Authority (“NELHA”) at Keahole Point in Kailua-Kona, Hawaii. The Company leases two properties from the State of Hawaii under a 40-year commercial lease expiring in 2035 and a 19-year commercial lease expiring in 2037. Under the terms of the existing NELHA leases, the Company could be required to remove improvements at the end of the lease terms. Under generally accepted accounting principles in the United States, an entity should recognize the fair value of a liability for an asset retirement obligation in the period in which the retirement obligation is incurred, if a reasonable estimate of fair value can be made. If such an estimate cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when the fair value can be reasonably estimated. Based on communications with NELHA, management does not believe the projected cost for such removal to be material to the consolidated financial statements, or likely, given historical practices. However, conditions could change in the future. It is not possible to predict such changes or estimate any impact thereof.

 

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The Company leases facilities, equipment and land under non-cancelable operating leases expiring through 2037. One of its facility leases contains price escalations and the Company exercised its option to renew for five years expiring on December 31, 2027. The NELHA land lease provides for contingent rentals in excess of minimum rental commitments based on a percentage of the Company’s sales. For fiscal years ended March 31, 2024 and 2023, there were no contingent rental payments. The contingent rental payment for the year ended March 31, 2022 was $73,000.

 

Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are based on the present value of lease payments over the lease terms, using the Bank’s incremental borrowing rate based on the information available at recognition, and the Company has elected to exclude non-lease components. The Company also leases two 84-month solar leases for two of its buildings and a 48-month lease for equipment, which are included in the right-of-use assets and liabilities. At March 31, 2024, the weighted average remaining lease terms of all operating leases was 9.1 years, the weighted average discount rate was 7.3% and the operating lease costs were $818,000. At March 31, 2023, the weighted average remaining lease terms of all operating leases was 9.8 years, the weighted average discount rate was 7.3% and the operating lease costs were $719,000. For fiscal year ended March 31, 2023, noncash right-of-use assets obtained in exchange for operating lease obligations was $1,429,000, representing the lease renewal of one of the Company's facility leases. There were no new leases for fiscal year ended March 31, 2024.

 

Supplemental balance sheet information related to leases consist of the following as of:

 

Operating leases		Balance Sheet Classification		March 31, 2024				March 31, 2023
				(in thousands)
Right-of-use assets		Operating lease right-of-use assets		$	6,149			$	6,149
Accumulated lease amortization		Operating lease right-of-use assets			(1,865	)			(1,373	)
Total right-of-use assets				$	4,284			$	4,776
Current lease liabilities		Operating lease obligations		$	530			$	483
Non-current lease liabilities		Long-term operating lease obligations			3,744				4,275
Total lease liabilities				$	4,274			$	4,758

 

Maturities of lease liabilities at March 31, 2024 are as follows:

 

Fiscal year ending March 31		(in thousands)
2025		$	820
2026			797
2027			798
2028			683
2029			416
Thereafter			2,344
Total undiscounted lease payments			5,858
Less: present value discount			(1,584	)
Total lease liabilities balance		$	4,274

 

Rent expense, including contingent rent, under operating leases were $685,000, $506,000 and $713,000 for the years ended March 31, 2024, 2023 and 2022, respectively. Property taxes paid to the states of Hawaii and California were $38,000, $37,000 and $30,000 for the years ended March 31, 2024, 2023 and 2022, respectively.

 

8.	OTHER COMMITMENTS AND CONTINGENCIES

 

From time to time, the Company may be involved in litigation and investigations relating to claims and matters arising out of its operations in the normal course of business. There were no significant legal matters outstanding at March 31, 2024.

 

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As of March 31, 2024, 2023 and 2022, the Company had purchase obligations of $808,000, $822,000 and $1,105,000, respectively, including agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The term of the minimum purchase agreement is for ten years, expiring in April 2026 and purchase obligations do not include agreements that are cancelable without penalty.

 

9.	SHARE-BASED COMPENSATION

 

As of March 31, 2024, the Company had two equity-based compensation plans: the 2016 Equity Incentive Plan (the “2016 Plan”) and the 2014 Independent Director Stock Option and Restricted Stock Grant Plan and Amendment (the “2014 Directors Plan”). These plans allowed the Company to award stock options and shares of restricted common stock to eligible employees, certain outside consultants and independent directors.

 

On August 25, 2016, the Company’s shareholders approved the 2016 Plan, authorizing the Board of Directors to provide incentive to the Company’s officers, employees and certain independent consultants through equity-based compensation in the form of stock options, restricted stock, restricted stock units, stock appreciation rights and other stock-based awards (together, “Stock Awards”) and performance shares and performance units (together, “Performance Awards”). Awards under the 2016 Plan are limited to the authorized amount of 1,300,000 shares, up to 600,000 of which are available for issuance in connection with Performance Awards and Stock Awards. As of March 31, 2024, there were 635,679 shares available for grant under the 2016 Plan.

 

On August 28, 2014, the Company’s shareholders approved the 2014 Directors Plan authorizing the Board of Directors to provide incentive to the Company’s independent directors through equity-based compensation in the form of stock options and restricted stock. Awards under the 2014 Directors Plan are limited to the authorized amount of 350,000 shares. At the 2021 Annual Meeting of Shareholders, the stockholders of the Company approved an amendment to the 2014 Directors Plan to increase the number of shares of common stock available for issuance under the plan by 300,000 shares. As of March 31, 2024, there were 33,220 shares available for grant under the 2014 Directors Plan.

 

The following table presents shares authorized, available for future grant and outstanding under each of the Company’s plans:

 

		As of March 31, 2024
		Authorized				Available				Outstanding
2016 Plan			1,300,000				635,679				415,820
2014 Directors Plan			650,000				33,220				12,000
Total			1,950,000				668,899				427,820

 

Stock Options

 

All stock option grants made under the equity-based compensation plans were issued at exercise prices no less than the Company’s closing stock price on the date of grant. Stock options under the 2016 Plan and 2014 Directors Plan were determined by the Board of Directors or the Compensation Committee of the Board of Directors in accordance with the provisions of the respective plans. The terms of each stock option grant include vesting, exercise, and other conditions are set forth in a Stock Option Agreement evidencing each grant. No option can have a life in excess of ten (10) years. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. The model requires various assumptions, including a risk-free interest rate, the expected term of the options, the expected stock price volatility over the expected term of the options, and the expected dividend yield. Compensation expense for employee stock options is recognized ratably over the vesting term. Compensation expense recognized for options issued under all Plans was $98,000, $90,000 and $63,000 for the fiscal years ended March 31, 2024, 2023 and 2022, respectively.

 

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A summary of option activity under the Company’s stock plans for the years ended March 31, 2024, 2023 and 2022 is presented below:

 

Option Activity		Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (in years)				Aggregate Intrinsic Value
Outstanding at March 31, 2021			374,300			$	3.64				3.9			$	129,700
Granted			50,000				2.96
Forfeited			(5,000	)			5.21
Expired			(166,800	)			3.84
Outstanding at March 31, 2022			252,500			$	3.34				6.5			$	159,650
Granted			50,000				3.43
Expired			(49,500	)			5.80
Outstanding at March 31, 2023			253,000			$	2.88				7.5			$	—
Granted			50,000				0.79
Expired			(6,000	)			5.56
Outstanding at March 31, 2024			297,000			$	2.47				7.1			$	—
Exercisable at March 31, 2024			172,000			$	2.76				6.3			$	—

 

The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $0.29, $0.88 and $3.37 at March 31, 2024, 2023 and 2022, respectively. No stock options were exercised during fiscal year 2024, 2023 or 2022.

 

A summary of the Company’s non-vested options for the year ended March 31, 2024 is presented below:

 

Nonvested Options		Shares				Weighted Average Grant-Date Fair Value
Nonvested at March 31, 2023			141,667			$	1.55
Granted			50,000				0.48
Vested			(66,667	)			1.49
Nonvested at March 31, 2024			125,000			$	1.16

 

The weighted average grant-date fair value of stock options granted during fiscal years 2024, 2023 and 2022 was $24,000, $97,000 and $80,000, respectively. The total grant-date fair value of stock options that vested during fiscal years 2024, 2023 and 2022 were $99,000, $67,000 and $40,000, respectively.

 

The following table summarizes the weighted average characteristics of outstanding stock options as of March 31, 2024:

 

					Outstanding Options												Exercisable Options
Range of Exercise Prices					Number of Shares				Remaining Life (Years)				Weighted Average Exercise Price				Number of Shares				Weighted Average Exercise Price
$0.79	-	$2.20				55,000				9.1			$	0.91				5,000			$	2.11
$2.21	-	$2.34				100,000				6.3			$	2.29				75,000			$	2.29
$2.35	-	$3.20				80,000				6.9			$	2.80				63,334			$	2.76
$3.21	-	$5.91				62,000				7.0			$	3.73				28,666			$	4.09
Total stock options						297,000				7.1			$	2.74				172,000			$	2.76

 

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The range of fair value assumptions related to options granted during the years ended March 31, 2024, 2023 and 2022 were as follows:

 

		2024				2023				2022
Exercise Price		$	0.48			$	1.94			$	1.60
Volatility			61.63	%			57.47	%			58.23	%
Risk Free Rate			4.34	%			3.36	%			1.06	%
Vesting Period (in years)			3.0				3.0				3.0
Forfeiture Rate			16	%			19	%			0	%
Expected Term (in years)			6.0				6.0				6.0
Dividend Rate			0	%			0	%			0	%

 

Total unrecognized stock-based compensation expense related to all unvested stock options was $58,000, $124,000 and $139,000, at March 31, 2024, 2023 and 2022, respectively, which is expected to be expensed over a weighted average period of 1.3 years, 1.6 years and 2.1 years, respectively.

 

Restricted Stock

 

Grants of fully vested restricted stock issued to Non-Employee Directors during fiscal years 2024, 2023 and 2022 was 159,493, 64,489 and 55,438 shares, respectively. Compensation expense recognized for fully vested restricted stock grants issued under the 2014 Directors Plan was $126,000, $158,000 and $158,000 for the fiscal years ended March 31, 2024, 2023 and 2022, respectively.

 

To reduce the Company’s ongoing cash expenses, the Nominating and Corporate Governance Committee of the Board of Directors adopted a resolution allowing each director to elect to receive his or her quarterly director fees in the form of restricted stock in lieu of cash. Two Board members elected to receive shares of restricted stock in lieu of cash for the third fiscal quarter of 2023 and one Board member elected to receive shares of restricted stock in lieu of cash for the second fiscal quarter of 2024. On April 3, 2023, 17,672 shares of fully vested restricted stock were issued to the two Board members with compensation expense earned and recognized for these fully vested restricted stock grants in the amount of $15,500 in the fiscal year ended March 31, 2023. On October 13, 2023, 12,821 shares of fully vested restricted stock were issued to one Board member with $10,000 of compensation expense recognized in fiscal year ended March 31, 2024.

 

Restricted Stock Units (“RSUs”)

 

RSUs are service-based awards granted to eligible employees under our 2016 Plan. Compensation expense recognized for RSUs issued under the 2016 Plan was $124,000, $62,000 and $123,000 for the years ended March 31, 2024, 2023 and 2022, respectively.

 

The following table summarizes information related to awarded RSUs:

 

Nonvested Restricted Stock Units		Shares				Weighted Average Grant Price
Nonvested restricted stock units at March 31, 2021			28,188			$	2.38
Granted			38,672			$	2.91
Vested			(46,963	)		$	2.85
Forfeited			(5,432	)		$	2.51
Nonvested restricted stock units at March 31, 2022			14,465			$	2.22
Granted			66,423			$	3.13
Vested			(8,312	)		$	2.35
Forfeited			(2,242	)		$	2.91
Nonvested restricted stock units at March 31, 2023			70,334			$	3.04
Granted			204,964			$	0.49
Vested			(135,272	)			1.00
Forfeited			(9,206	)		$	2.12
Nonvested restricted stock units at March 31, 2024			130,820			$	1.23

 

Total unrecognized stock-based compensation expense related to unvested restricted stock units was $98,000, $122,000 and $19,000 at March 31, 2024, 2023 and 2022, respectively, which is expected to be expensed over a weighted average period of 1.2 years, 2.3 years and 1.2 years, respectively.

 

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10.	COMMON, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

 

The Company has authorized a total of sixty million shares of which fifty million shares are authorized common stock and ten million shares are authorized preferred stock. None of the preferred stock was issued or outstanding at March 31, 2024 and 2023. Under the terms of the Company’s Amended and Restated Articles of Incorporation, the Board of Directors is authorized to determine or alter the rights, preferences, privileges and restrictions of the Company’s authorized but unissued shares of preferred stock.

 

On December 15, 2023, the Company completed the Private Placement of an aggregate of 400,000 shares (the “Shares”) of its common stock, par value $0.02 per share (the “Common Stock”), at a price of $1.00 per share for gross proceeds of $400,000. The Shares were issued pursuant to the exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(a)(2) of the Securities Act to one investor, the Company’s Chairman of the Board, and pursuant to a Subscription Agreement (the “Subscription Agreement”), dated December 15, 2023. The Company incurred legal expenses of $12,000 related to this transaction during the fiscal year ended March 31, 2024. The net proceeds of $388,000 from the Private Placement were used by the Company for general working capital.

 

The Shares are restricted securities under applicable federal securities laws and are subject to certain piggyback registration rights as provided for in the Subscription Agreement.

 

11.	EARNINGS (LOSS) PER SHARE

 

Basic earnings (loss) per share is computed on the basis of the weighted average number of common shares outstanding. Diluted earnings per share is computed on the basis of the weighted average number of common shares outstanding plus the potentially dilutive effect of outstanding stock options and unvested restricted stock units using the treasury stock method.

 

Reconciliations between the numerator and the denominator of the basic and diluted income (loss) per share computations for the years ended March 31, 2024, 2023 and 2022 are as follows: 

 

		Net Income (loss) (Numerator)				Shares (Denominator)				Per Share Amount
		(in thousands, except per share amounts)
Year ended March 31, 2024:
Basic and diluted loss per share		$	(5,267	)			6,531			$	(0.81	)
Year ended March 31, 2023:
Basic and diluted loss per share		$	(3,440	)			6,244			$	(0.55	)
Year ended March 31, 2022:
Basic income per share		$	2,154				6,157			$	0.35
Effective dilutive securities—Common stock options and restricted stock units			—				11				—
Diluted income per share		$	2,154				6,168			$	0.35

 

Basic and diluted per share amounts are the same in periods of a net loss because common share equivalents are anti-dilutive when a net loss is recorded. Diluted earnings per share does not include the impact of restricted stock units totaling 3,000 for the fiscal year ended March 31, 2024, as the effect of their inclusion would be anti-dilutive. Restricted stock units become dilutive within the period granted and remain dilutive until the units vest and are then included in the calculation of basic earnings per share. 

 

12.	PROFIT SHARING AND 401(K) PLAN

 

The Company sponsors a profit sharing plan for all employees not covered under a separate management incentive plan. Under the profit sharing plan, a percentage determined by the Board of Directors of pre-tax profits on a quarterly basis may be allocated to non-management employees at management’s discretion. The profit sharing bonus may be distributed all in cash on an after-tax basis or distributed half in cash (on an after-tax basis) and the remainder deposited in an employee’s 401(k) account on a pre-tax basis. Employees may also make voluntary pre-tax contributions to their 401(k) accounts. There was no compensation expense under this plan for fiscal years ended March 31, 2024 or 2023. Compensation expense under this plan was approximately $121,000 for the fiscal year ended March 31, 2022. Additionally, the Company has the discretion to make a retirement contribution to all employees individual 401(k) accounts equal to two percent of each employee’s base pay for each bi-weekly pay period on a pre-tax basis. Retirement expense under this plan was approximately $82,000, $138,000 and $135,000 for fiscal years ended March 31, 2024, 2023 and 2022, respectively. 

 

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13.	PRODUCT LINE AND GEOGRAPHIC INFORMATION

 

Disaggregation of Revenue

 

The following table represents revenue disaggregated by major product line and extraction services for the years ended March 31, 2024, 2023 and 2022 (in thousands):

 

		2024				2023				2022
Packaged sales
Astaxanthin packaged		$	13,613			$	12,227			$	14,931
Spirulina packaged			5,779				4,814				7,604
Total packaged sales			19,392				17,041				22,535
Bulk sales
Astaxanthin bulk			1,491				1,982				2,447
Spirulina bulk			1,572				3,541				10,386
Total bulk sales			3,063				5,523				12,833
Contract extraction and R&D services revenue			616				614				600
Total net sales		$	23,071			$	23,178			$	35,968

 

Cost of sales for contract extraction and R&D services for the years ended March 31, 2024, 2023 and 2022 were $358,000, $441,000 and $439,000, respectively.

 

Net sales by geographic region for the years ended March 31, 2024, 2023 and 2022 are as follows:

 

		2024								2023								2022
		(dollars in thousands)
Net sales(1):
United States		$	18,886				82	%		$	17,031				73	%		$	24,468				68	%
Asia / Pacific			1,247				5	%			2,164				9	%			7,102				20	%
Europe			1,596				7	%			2,440				11	%			3,183				9	%
Other			1,342				6	%			1,543				7	%			1,215				3	%
		$	23,071				100	%		$	23,178				100	%		$	35,968				100	%

 

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(1)	Net sales are attributed to countries based on location of customer.

 

14.	INCOME TAXES

 

Income tax (expense) benefit for the years ended March 31, 2024, 2023 and 2022 consisted of:

 

		2024				2023				2022
		(in thousands)
Current:
Federal		$	—			$	—			$	—
State			(7	)			(18	)			(28	)
Total current (expense) benefit			(7	)			(18	)			(28	)
Deferred:
Federal			—				—				—
State			—				—				—
Total deferred expense			—				—				—
Income tax expense		$	(7	)		$	(18	)		$	(28	)

 

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The following table reconciles the amount of income taxes computed at the federal tax rate of 21% for each of the fiscal years ended March 31, 2024, 2023 and 2022, to the amount reflected in the Company’s consolidated statements of operations for the years ended March 31, 2024, 2023 and 2022:

 

		2024				2023				2022
		(in thousands)
Tax provision at federal statutory income tax rate		$	1,457			$	952			$	(591	)
Stock-based compensation			(44	)			(23	)			(16	)
Decrease (increase) in valuation allowance			(1,404	)			(518	)			557
State and local income taxes, net of federal tax benefit			(6	)			(12	)			(2	)
Expired losses			—				(380	)			—
Deferred tax true-up			(25	)			(24	)			34
Other, net			15				(13	)			(10	)
Income tax expense		$	(7	)		$	(18	)		$	(28	)

 

The tax effects of temporary differences related to various assets, liabilities and carry forwards that give rise to deferred tax assets and deferred tax liabilities as of March 31, 2024 and 2023 are as follows:

 

		2024				2023
		(in thousands)
Deferred tax assets:
Net operating loss carry forwards		$	4,471			$	3,570
Inventory			213				50
Compensation accrual			109				177
Tax credit carry forwards			28				28
Interest limitation			268				108
Operating lease right-of-use assets			1,184				1,323
Section 174 Costs			223				118
Other			9				26
Gross deferred tax assets			6,505				5,400
Less valuation allowance			(4,394	)			(2,990	)
Net deferred tax assets			2,111				2,410
Deferred tax liabilities:
Operating lease obligations			(1,186	)			(1,328	)
Depreciation and amortization			(925	)			(1,082	)
Net deferred tax liabilities			(2,111	)			(2,410	)
Net deferred tax assets (liabilities)		$	—			$	—

 

In assessing the valuation allowance for deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Ultimately, the realization of deferred tax assets will depend on the existence future taxable income during the periods. In making this assessment, management considers past operating results, the scheduled reversal of deferred tax liabilities, estimates of future taxable income and tax planning strategies.

 

As of March 31, 2024, 2023 and 2022, the Company has concluded that a valuation allowance was appropriate in light of the significant negative evidence, which was objective and verifiable, primarily the cumulative losses in recent years.

 

While the Company’s long-term financial outlook remains positive, the Company concluded that its ability to rely on its long-term outlook as to future taxable income was limited due to the relative weight of the negative evidence from its recent cumulative losses. The Company’s conclusion regarding the need for a valuation allowance against its deferred tax assets could change in the future based on improvements in operating performance, which may result in the full or partial reversal of the valuation allowance.

 

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At March 31, 2024, the Company has net operating loss carry forwards and tax credit carry forwards available to offset future federal income tax as follows (in thousands):

 

Expires March 31,		Federal Net Operating Loss				State Net Operating Losses				Research and Experimentation Tax Credit
		(in thousands)
2025		$	—			$	—			$	8
2026			159				—				2
2027			2,665				—				—
2028			1,612				—				1
Thereafter			2,767				15,333				17
Indefinite			9,962				—				—
		$	17,165			$	15,333			$	28

 

At March 31, 2024, the Company has federal net operating loss carry forwards of $17,165,000, of which $7,203,000 of the losses carried forward were generated prior to the 2018 tax year and have a 20 year carry forward and are available to offset 100% of taxable income. The remaining $9,962,000 of the losses were generated in tax years 2018 or later, which have an unlimited carry forward and are limited to 80% of taxable income. At March 31, 2024, the Company had state tax net operating loss carry forwards available to offset future California state taxable income of $4,959,000. These carry forwards expire March 31, 2037 through 2044. At March 31, 2024, the Company had state tax net operating loss carry forwards available to offset future Hawaii state taxable income of $9,718,000. These carry forwards expire March 31, 2030 through 2044. At March 31, 2024, the Company had $656,000 of net operating loss carry forwards between the remaining states filed in.

 

The following, in general, represents the open tax years and jurisdictions that the Company used in its evaluation of tax positions. The Company has unused net operating losses carried forward, which cause the statute to remain open up to the amount of unused loss with the statute not begin until the year in which they are used.

 

Open tax years ending March 31,				Jurisdiction
2021	-	2024		U.S. Federal
2021	-	2024		State of Hawaii
2020	-	2024		State of California

 

15.	RELATED-PARTY TRANSACTIONS AND BALANCES

 

In April 2019, the Company obtained an unsecured subordinated loan from Skywords Family Foundation, Inc. (“Skywords”) in the principal amount of $1,500,000 pursuant to a Promissory Note (the “Skywords Note”) executed by the Company in favor of Skywords. Skywords is controlled by the Company’s Chairman of the Board of Directors and largest stockholder. The Skywords Note bore interest at a rate of 1% plus the prime rate (as published by the Wall Street Journal), which was recalculated and payable on a quarterly basis.  The principal amount and any accrued and unpaid interest were due and payable on April 12, 2021.  The proceeds of the Skywords Note were used to pay down accounts payable and for general operating capital purposes.

 

On April 12, 2021, the Company entered into an Amended and Restated Promissory Note (the “Skywords Amended Note”) with Skywords. The Company and Skywords agreed to amend, restate, replace and otherwise modify without novation, the Skywords Note in order to convert $500,000 of the outstanding principal amount into revolving loans that may be prepaid and reborrowed from time to time in principal amounts not to exceed $500,000, extend the maturity date by three years, adjust the interest rate to reflect a floor of 5% and secure Skywords’ interest by granting a security interest in substantially all of the Company’s personal property assets, subject to limited exceptions (the “Collateral”). On April 12, 2021, concurrently with the conversion, the Company repaid in cash to Skywords the principal amount of $500,000 plus accrued interest to date of $1,900. The Skywords Amended Note bears interest at a rate of 1% plus the prime rate (as published by the Wall Street Journal), which will be recalculated and payable on a quarterly basis, provided that at no time shall the annual interest rate be less than 5%. The Company may prepay the Skywords Amended Note at any time without penalty.

 

On April 12, 2021, in connection with the grant of a security interest in the Collateral, the Company also entered into an Intercreditor and Subordination Agreement with the Bank and Skywords. The Company is indebted to the Bank pursuant to two Term Loans and a Credit Agreement, each of which granted the Bank a security interest in substantially all of the Company’s personal property assets. The Bank’s security interest in the Company’s personal property assets ranks senior to Skywords’ security interest in the Collateral, and the Intercreditor and Subordination Agreement generally governs the relationship between the Bank and Skywords as secured lenders to the Company and includes customary terms.

 

46

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On December 14, 2022, the Company entered into a First Amendment (the “Amendment”) to the Skywords Amended Note. The Amendment extends the maturity date to April 12, 2025 and increases the revolving amount that the Company may borrow from time to time under the Skywords Note from $500,000 to $1,000,000. All other terms of the Skywords Note remain the same.

 

On August 14, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the Skywords Amended Note. The Second Amendment increased the revolving amount that the Company may borrow from time to time under the Skywords Amended Note from $1,000,000 to $2,000,000. All other terms of the Skywords Amended Note remain the same.

 

At both March 31, 2024 and 2023, the Skywords Note principal balance was $1,000,000, and was included in long-term debt on the Consolidated Balance Sheets. At March 31, 2024 and 2023, the balance on the Revolver was $1,250,000 and $500,000, respectively, and was included in line of credit – related party on the Consolidated Balance Sheets. At March 31, 2024 and 2023, the interest rates were 8.5% and 7.5%, respectively.

 

16.	SUBSEQUENT EVENTS

 

The Company had no additional subsequent events.

 

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Item 9A.

Controls and Procedures

 

Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our chief executive officer (“CEO”) and chief financial officer (“CFO”), we have evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15(d)-15(e) of the Exchange Act as of the end of the period covered by this Report. Based on that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.

 

Management’s Report on Internal Control over Financial Reporting.

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management evaluated the effectiveness of our internal control over financial reporting as of March 31, 2024. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control - Integrated Framework” (2013 Framework). Based on our assessment, using those criteria, management concluded that our internal control over financial reporting was effective as of March 31, 2024.

 

Changes in Internal Control over Financial Reporting.

 

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2024 that has materially affected, or was reasonably likely to materially affect, our internal control over financial reporting.

 

Limitations on the Effectiveness of Controls.

 

Our management, including our CEO and CFO, do not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud. A control system no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

 

The inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, or by collusion of two or more people. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

Item 9B.

Other Information

 

On March 6, 2024, Michael Davis, the Chairman of the Company’s Board of Directors, entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan provides for the purchase of 315,000 shares of Cyanotech common stock and will expire on June 7, 2025, subject to early termination for certain specified events set forth in the plan.

 

48

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PART III

 

Item 10.

Directors, Executive Officers of the Registrant and Corporate Governance

 

Information with respect to Directors may be found under captions “Proposal One: Election of Directors,” “Board Meetings and Committees,” “Director Compensation,” “Security Ownership of Certain Beneficial Owners and Management: and “Compliance with Section 16(a) of the Exchange Act” contained in Cyanotech’s definitive 2024 Proxy Statement. Information on Executive Officers may be found under the caption “Executive Officers” contained in Cyanotech’s definitive 2024 Proxy Statement.

 

We have adopted the Cyanotech Code of Ethics for our officers and employees. We have also adopted the Board of Directors Code of Conduct. Both Codes are publicly available on our website at www.cyanotech.com. If we make any substantive amendments to or grant any waiver from such Codes relating to our Chief Executive Officer, Chief Financial Officer or Officers, we will disclose the nature of such amendment in a report on Form 8-K and amend the website disclosure.

 

Item 11.

Executive Compensation

 

The information required by this Item is incorporated herein by reference from the sections captioned “Executive Compensation and Other Information,” “Equity Compensation Plan Information” and “Option Grants in Fiscal Year 2024,” contained in Cyanotech’s definitive 2024 Proxy Statement.

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The security ownership information required by this Item is incorporated herein by reference from the sections captioned “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” contained in Cyanotech’s definitive 2024 Proxy Statement.

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

 

The information required by this Item, if any, is incorporated herein by reference from the sections captioned “Related Party Transactions” contained in Cyanotech’s definitive 2024 Proxy Statement.

 

Item 14.

Principal Accountant Fees and Services

 

Information concerning principal accountant fees and services appears under the heading “Independent Registered Public Accounting Firm’s Fees” in Cyanotech’s definitive 2024 Proxy Statement.

 

 

PART IV

 

Item 15.

Exhibits and Financial Statements Schedules

 

(a)		Financial Statements and Schedule
	(1)	The following Financial Statements of Cyanotech Corporation and the Report of Independent Registered Public Accounting Firm are included in Item 8 of this report:
		Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)	26
		Consolidated Balance Sheets as of March 31, 2024 and 2023	27
		Consolidated Statements of Operations for the years ended March 31, 2024, 2023 and 2022	28
		Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2024, 2023 and 2022	29
		Consolidated Statements of Cash Flows for the years ended March 31, 2024, 2023 and 2022	30
		Notes to Consolidated Financial Statements	31
	(2)	The following financial statement schedule is included in this report on the pages indicated below:
		Schedule II—Valuation and Qualifying Accounts	53

 

Financial statement schedules not listed above have been omitted since they are either not required, not applicable or the information is included in the consolidated financial statements or notes thereto.

 

 

(b)	Exhibit Listing

 

Exhibit Number		Document Description
3.1		Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed November 9, 2012, File No. 0-14602).
3.2		Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Company’s Report on Form 8-K filed January 13, 2010, File No. 0-14602)
4.1		Specimen Common Stock (Incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2007, File No. 0-14602)
4.2		Description of Registrant’s Securities (Incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2023, File No. 0-14602)
10.1		Sub-Lease Agreement between the Company and Natural Energy Laboratory of Hawaii Authority dated December 29, 1995 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 1995)
10.2		Supplemental Agreement effective February 1, 2012 to amend the Sub-Lease Agreement described in Exhibit 10.1 herein, (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 9, 2012).
10.3		2004 Independent Director Stock Option and Restricted Stock Grant Plan, amended and restated November 8, 2011 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated November 14, 2011 for the quarter ended September 30, 2011).
10.4		2005 Stock Option Plan, amended August 29, 2011 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
10.5		Term Loan Agreement between Pacific Rim Bank (“Pacific Rim”) and both the Company and Nutrex Hawaii, Inc. (“Nutrex”); Promissory Notes in favor of Pacific Rim in the amounts of $2,250,000 and $3,250,000, issued by the Company and Nutrex, dated September 7, 2012; Mortgage, Security Agreement and Financing Statement between the Company and Pacific Rim; Assignment of Lessor’s Interest in Leases and Rents between the Company and Pacific Rim; Security Agreement and UCC Financing Statement between the Company and Pacific Rim; United States Department of Agriculture Rural Development (“USDA”) Conditional Commitments; Hazardous Substances Certificate and Indemnity Agreement; Assignment of Construction Contract between the Company and No’Eau Construction LLC; Sublessor’s Consent to Mortgage of Sublease K-4; Estoppel Certificate and Subordination Agreement, given by the Natural Energy Laboratory of Hawaii Authority, State of Hawaii, as Sublessor; Security Agreement and UCC Financing Statement between Nutrex and Pacific Rim. (Incorporated by reference as Exhibit 4.1 to the Company’s Report on Form 10-Q filed on November 9, 2012)
10.6		Term Loan Agreement between First Foundation Bank (“First Foundation”) and both the Company and Nutrex; Promissory Note in favor of First Foundation in the amount of $2,500,000, issued by the Company and Nutrex, dated July 30, 2015; Mortgage, Security Agreement and Financing Statement between the Company and First Foundation; Assignment of Lessor’s Interest in Leases and Rents between the Company and First Foundation; Security Agreement and UCC Financing Statement between the Company and First Foundation; Security Agreement and UCC Financing Statement between Nutrex and First Foundation; USDA Conditional Commitments; Hazardous Substances Certificate and Indemnity Agreement; Sublessor’s Consent to Mortgage of Sublease K-4; Estoppel Certificate and Subordination Agreement. (Incorporated by reference as Exhibits 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 to the Company’s Report on Form 10-Q filed on November 12, 2015)
10.7		2014 Independent Director Stock Option and Restricted Stock Grant Plan (Incorporated by reference to the Company’s Definitive Proxy Statement filed July 18, 2014)
10.8		2014 Independent Director Stock Option and Restricted Stock Grant Plan and Amendment (Incorporated by reference to the Company’s Definitive Proxy Statement filed on July 15, 2021)
10.9		2016 Equity Incentive Plan (Incorporated by reference to the Company’s Definitive Proxy Statement filed July 15, 2016.
10.10		Revolving Credit Agreement, by and between First Foundation Bank and the Company, dated June 3, 2016. (Incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 1, 2016).
10.11		Supplemental Agreement No. 1 to Modify Sublease No. K-26, by and among LLC, the Natural Energy Laboratory of Hawaii Authority, and the Company, effective as of October 1, 2018 (Incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 7, 2018)
10.12		Sublease No. K-26, by and between the Natural Energy Laboratory of Hawaii Authority and Cellana LLC (assigned to the Company), effective as of October 1, 2018 (Incorporated by reference as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 7, 2018)
10.13		Promissory Note by and between Skywords Family Foundation, Inc. and Cyanotech Corporation, dated April 12, 2019 (Incorporated by reference as Exhibit 10.1 to the Company's Current Report on Form 8-K filed April 12, 2019)
10.14		Executive Employment Agreement, dated as of September 28, 2020, by and between Felicia Ladin and Cyanotech Corporation (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 1, 2020)

 

 

10.15		Amended and Restated Promissory Note, dated April 12, 2021, by and between Skywords Family Foundation, Inc. and Cyanotech Corporation (Incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 16, 2021)
10.16		Intercreditor and Subordination Agreement, dated April 12, 2021, by and between First Foundation Bank, Skywords Family Foundation, Inc. and Cyanotech Corporation (Incorporated by reference as Exhibit 10.2 to the Company’s Current Report on Form 8-K file April 16, 2021)
10.17		Executive Employment Agreement, dated as of June 16, 2022, by and between Matthew K. Custer and Cyanotech Corporation (Incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 22, 2022)
10.18		First Amendment to Amended and Restated Promissory Note, dated December 14, 2022, by and between Skywords Family Foundation, Inc. and Cyanotech Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 19, 2022)
10.19		Subscription Agreement, dated December 15, 2023, by and between The Michael Arlen Davis Revocable Trust and Cyanotech Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 19, 2023)
10.20*		Insider Trading Policy (Adopted August 29, 2011, Updated Effective December 1, 2023)
10.21*		Clawback Policy (Effective October 2, 2023)
21.1		Subsidiaries of the Company (Incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2012, File No. 0-14602)
23.1*		Consent of Independent Registered Public Accounting Firm
31.1*		Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed as of June 26, 2024.
31.2*		Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed as of June 26, 2024.
32.1*		Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed as of June 26, 2024.
99.1*		Press Release dated June 26, 2024.
101		The following financial information from our Annual Report on Form 10-K for fiscal year ended March 31, 2024, filed with the SEC on June 26, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets at March 31, 2024 and 2023, (ii) the Consolidated Statements of Operations for the years ended March 31, 2024, 2023 and 2022, (iii) the Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2024, 2023 and 2022, (iv) the Consolidated Statements of Cash Flows for the years ended March 31, 2024 and 2023, and (v) Notes to Consolidated Financial Statements.
104		Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)
		* Included herewith. Other exhibits were filed as shown above.

 

 

Schedule II

 

Cyanotech Corporation

Valuation and Qualifying Accounts

 

Years Ended March 31, 2024, 2023 and 2022

(in thousands)

 

						Additions
Description		Balance at Beginning of Year				Charged to Costs and Expense				Charged to Other Accounts				Deductions				Balance at End of Year
Allowance for Credit Losses:
2024		$	64			$	22			$	—			$	75			$	11
2023			67				64				—				67				64
2022			32				40				—				5				67

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 26 day of June, 2024.

 

	CYANOTECH CORPORATION
	By:	/s/ Matthew K. Custer
		Matthew K. Custer
		President and Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signatures		Title		Date
/s/ Matthew K. Custer		President and Chief Executive Officer		June 26, 2024
Matthew K. Custer		(Principal Executive Officer)
/s/ Felicia Ladin		Chief Financial Officer, Vice President—Finance and		June 26, 2024
Felicia Ladin		Administration, and Treasurer (Principal Financial Officer)
/s/ Michael A. Davis		Chairman of the Board		June 26, 2024
Michael A. Davis
/s/ Angela M. McElwee		Director		June 26, 2024
Angela M. McElwee
/s/ David M. Mulder		Director		June 26, 2024
David M. Mulder
/s/ David L. Vied		Director		June 26, 2024
David L. Vied

 

 

Exhibit Number		Document Description
3.1		Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed November 9, 2012, File No. 0-14602)
3.2		Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Company’s Report on Form 8-K filed January 13, 2010, File No. 0-14602)
4.1		Specimen Common Stock (Incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2007, File No. 0-14602)
4.2		Description of the Registrant’s Securities (Incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2023, File No. 0-14602)
10.1		Sub-Lease Agreement between the Company and Natural Energy Laboratory of Hawaii Authority dated December 29, 1995 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended December 31, 1995)
10.2		Supplemental Agreement effective February 1, 2012 to amend the Sub-Lease Agreement described in Exhibit 10.1 herein, (Incorporated by reference to Exhibit 10. 1 to the Company’s Current Report on Form 8-K dated March 9, 2012).
10.3		2004 Independent Director Stock Option and Restricted Stock Grant Plan, amended and restated November 8, 2011 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated November 14, 2011 for the quarter ended September 30, 2011)
10.4		2005 Stock Option Plan, amended August 29, 2011 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011).
10.5		Term Loan Agreement between Pacific Rim Bank (“Pacific Rim”) and both the Company and Nutrex Hawaii, Inc. (“Nutrex”); Promissory Notes in favor of Pacific Rim in the amounts of $2,250,000 and $3,250,000, issued by the Company and Nutrex, dated September 7, 2012; Mortgage, Security Agreement and Financing Statement between the Company and Pacific Rim; Assignment of Lessor’s Interest in Leases and Rents between the Company and Pacific Rim; Security Agreement and UCC Financing Statement between the Company and Pacific Rim; United States Department of Agriculture Rural Development (“USDA”) Conditional Commitments; Hazardous Substances Certificate and Indemnity Agreement; Assignment of Construction Contract between the Company and No’Eau Construction LLC; Sublessor’s Consent to Mortgage of Sublease K-4; Estoppel Certificate and Subordination Agreement, given by the Natural Energy Laboratory of Hawaii Authority, State of Hawaii, as Sublessor; Security Agreement and UCC Financing Statement between Nutrex and Pacific Rim. (Incorporated by reference as Exhibit 4.1 to the Company’s Report on Form 10-Q filed on November 9, 2012)
10.6		Term Loan Agreement between First Foundation Bank (“First Foundation”) and both the Company and Nutrex; Promissory Note in favor of First Foundation in the amount of $2,500,000, issued by the Company and Nutrex, dated July 30, 2015; Mortgage, Security Agreement and Financing Statement between the Company and First Foundation; Assignment of Lessor’s Interest in Leases and Rents between the Company and First Foundation; Security Agreement and UCC Financing Statement between the Company and First Foundation; Security Agreement and UCC Financing Statement between Nutrex and First Foundation; USDA Conditional Commitments; Hazardous Substances Certificate and Indemnity Agreement; Sublessor’s Consent to Mortgage of Sublease K-4; Estoppel Certificate and Subordination Agreement. (Incorporated by reference as Exhibits 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 to the Company’s Report on Form 10-Q filed on November 12, 2015)
10.7		2014 Independent Director Stock Option and Restricted Stock Grant Plan (Incorporated by reference to the Company’s Definitive Proxy Statement filed July 18, 2014)
10.8		2014 Independent Director Stock Option and Restricted Stock Grant Plan and Amendment (Incorporated by reference to the Company’s Definitive Proxy Statement filed on July 15, 2021)
10.9		2016 Equity Incentive Plan (Incorporated by reference to the Company’s Definitive Proxy Statement filed July 15, 2016)
10.10		Revolving Credit Agreement, by and between First Foundation Bank and the Company, dated June 3, 2016. (Incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 1, 2016).
10.11		Supplemental Agreement No. 1 to Modify Sublease No. K-26, by and among Cellana LLC, the Natural Energy Laboratory of Hawaii Authority, and the Company, effective as of October 1, 2018 (Incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 7, 2018)
10.12		Sublease No. K-26, by and between the Natural Energy Laboratory of Hawaii Authority and Cellana LLC (assigned to the Company), effective as of October 1, 2018 (Incorporated by reference as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 7, 2018)
10.13		Promissory Note by and between Skywords Family Foundation, Inc. and Cyanotech Corporation, dated April 12, 2019 (Incorporated by reference as Exhibit 10.1 to the Company's Current Report on Form 8-K filed April 12, 2019)
10.14		Executive Employment Agreement, dated as of September 28, 2020, by and between Felicia Ladin and Cyanotech Corporation (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 1, 2020).

 

 

10.15		Amended and Restated Promissory Note, dated April 12, 2021, by and between Skywords Family Foundation, Inc. and Cyanotech Corporation (Incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 16, 2021).
10.16		Intercreditor and Subordination Agreement, dated April 12, 2021, by and between First Foundation Bank, Skywords Family Foundation, Inc. and Cyanotech Corporation (Incorporated by reference as Exhibit 10.2 to the Company’s Current Report on Form 8-K file April 16, 2021).
10.17		Executive Employment Agreement, dated as of June 16, 2022, by and between Matthew K. Custer and Cyanotech Corporation (Incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 22, 2022)
10.18		First Amendment to Amended and Restated Promissory Note, dated December 14, 2022, by and between Skywords Family Foundation, Inc. and Cyanotech Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 19, 2022)
10.19		Subscription Agreement, dated December 15, 2023, by and between The Michael Arlen Davis Revocable Trust and Cyanotech Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 19, 2023)
10.20*		Insider Trading Policy (Adopted August 29, 2011, Updated Effective December 1, 2023)
10.21*		Clawback Policy (Effective October 2, 2023)
21.1		Subsidiaries of the Company (Incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2012)
23.1*		Consent of Independent Registered Public Accounting Firm
31.1*		Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed as of June 26, 2024
31.2*		Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed as of June 26, 2024
32.1*		Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed as of June 26, 2024
99.1*		Press Release dated June 26, 2024
101		The following financial information from our Annual Report on Form 10-K for fiscal year ended March 31, 2024, filed with the SEC on June 26 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets at March 31, 2024 and 2023, (ii) the Consolidated Statements of Operations for the years ended March 31, 2024, 2023 and 2022, (iii) the Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2024, 2023 and 2022, (iv) the Consolidated Statements of Cash Flows for the years ended March 31, 2024 and 2023, and (v) Notes to Consolidated Financial Statements.
104		Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)

 

 

Exhibit 10.20

 

CYANOTECH CORPORATION

 

Insider Trading Policy

(Adopted August 29, 2011,

Updated Effective December 1, 2023)

 

Purpose

 

This Insider Trading Policy (the “Policy”) provides guidelines with respect to transactions in the securities of Cyanotech Corporation (the “Company”) and the handling of confidential information about the Company, its subsidiaries and the companies with which the Company does business. The Company’s Board of Directors has adopted this Policy to promote compliance with federal, state and foreign securities laws that prohibit certain persons who are aware of material nonpublic information about a company from: (i) trading in securities of that company; or (ii) providing material nonpublic information to other persons who may trade on the basis of that information.

 

Persons Subject to the Policy

 

This Policy applies to all officers of the Company and its subsidiaries, all members of the Company’s Board of Directors and all employees of the Company and its subsidiaries. The Company may also determine that other persons should be subject to this Policy, such as contractors or consultants who have access to material nonpublic information. This Policy also applies to family members, other members of a person’s household and entities controlled by a person covered by this Policy, as described below.

 

Transactions Subject to the Policy

 

This Policy applies to transactions in i) the Company’s securities (collectively referred to in this Policy as “Company Securities”), including the Company’s common stock, options to purchase common stock, or any other type of securities that the Company may issue, including (but not limited to) preferred stock, convertible debentures and warrants, as well as derivative securities that are not issued by the Company, such as exchange-traded put or call options or swaps relating to the Company’s Securities and (ii) the securities of certain other companies, including common stock, options and other securities issued by those companies as well as derivative securities relating to any of those companies’ securities, where the person trading used information obtained while working for the Company.

 

Individual Responsibility

 

Persons subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about the Company and to not engage in transactions in Company Securities while in possession of material nonpublic information. Each individual is responsible for making sure that he or she complies with this Policy, and that any family member, household member or entity whose transactions are subject to this Policy, as discussed below, also comply with this Policy. In all cases, the responsibility for determining whether an individual is in possession of material nonpublic information rests with that individual, and any action on the part of the Company, the Compliance Officer or any other employee or director pursuant to this Policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws. You could be subject to severe legal penalties and disciplinary action by the Company for any conduct prohibited by this Policy or applicable securities laws, as described below in more detail under the heading “Consequences of Violations.”

 

Administration of the Policy

 

The Company’s Vice President – Finance and Administration shall serve as the Compliance Officer for the purposes of this Policy, and in that person’s absence, the Company’s Chief Executive Officer (“CEO”) or another employee designated in writing by the Compliance Officer or alternatively by the CEO, shall be responsible for administration of this Policy. All determinations and interpretations by the named or acting Compliance Officer shall be final and not subject to further review.

 

 

Statement of Policy

 

It is the policy of the Company that no director, officer or other employee of the Company (or any other person designated by this Policy or by the Compliance Officer as subject to this Policy) who is aware of material nonpublic information relating to the Company may, directly, or, indirectly through family members or other persons or entities:

 

1.

Engage in transactions in Company Securities, except as otherwise specified in this Policy under the headings “Transactions Under Company Plans,” “Transactions Not Involving a Purchase or Sale” and “Rule 10b5-1 Plans;”

 

2.

Recommend the purchase or sale of any Company Securities;

 

3.

Disclose material nonpublic information to persons within the Company whose jobs do not require them to have that information, or outside of the Company to other persons, including, but not limited to, family, friends, business associates, investors and expert consulting firms, unless any such disclosure is made in accordance with the Company’s policies regarding the protection or authorized external disclosure of information regarding the Company; or

 

4.

Assist anyone engaged in the above activities.

 

In addition, it is the policy of the Company that no director, officer or other employee of the Company (or any other person designated as subject to this Policy) who, in the course of working for the Company, learns of material nonpublic information about another company may trade in that company’s securities until the information becomes public or is no longer material.

 

There are no exceptions to this Policy, except as specifically noted herein.

Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure), or small transactions, are not excepted from this Policy. The securities laws do not recognize any mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct.

 

Definition of Material Nonpublic Information

 

Material Information. Information is considered “material” if a reasonable investor would consider that information important in making a decision to buy, hold or sell securities. Any information that could be expected to affect the Company’s stock price, whether it is positive or negative, should be considered material. There is no bright-line standard for assessing materiality; rather, materiality is based on an assessment of all of the facts and circumstances, and is often evaluated by enforcement authorities with the benefit of hindsight. While it is not possible to define all categories of material information, some examples of information that ordinarily would be regarded as material are:

 

●

Projections of future earnings or losses, or other earnings guidance;

●

Changes to previously announced earnings guidance, or the decision to suspend earnings guidance;

●

A pending or proposed merger, acquisition or tender offer;

●

A pending or proposed acquisition or disposition of a significant asset;

●

A pending or proposed joint venture;

●

A Company restructuring;

●

Significant related party transactions;

●

A change in dividend policy, the declaration of a stock split, or an offering of additional securities;

●

Bank borrowings or other financing transactions out of the ordinary course;

 

 

●

The establishment of a repurchase program for Company Securities;

●

A change in the Company’s pricing or cost structure;

●

Major marketing changes;

●

A change in management;

●

A change in auditors or notification that the auditor’s reports may no longer be relied upon;

●

Development of a significant new product, process, or service;

●

Pending or threatened significant litigation, or the resolution of such litigation;

●

Impending bankruptcy or the existence of severe liquidity problems;

●

The gain or loss of a significant customer or supplier;

●

The imposition of a ban on trading in Company Securities or the securities of another company.

 

When Information is Considered Public. Information that has not been disclosed to the public is generally considered to be nonpublic information. In order to establish that the information has been disclosed to the public, it may be necessary to demonstrate that the information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed through the Dow Jones “broad tape,” newswire services, a broadcast on widely-available radio or television programs, publication in a widely-available newspaper, magazine or news website, or public disclosure documents filed with the SEC that are available on the SEC’s website. By contrast, information would likely not be considered widely disseminated if it is available only to the Company’s employees, or if it is only available to a select group of analysts, brokers and institutional investors.

 

Once information is widely disseminated, it is still necessary to afford the investing public sufficient time to absorb the information. As a general rule, information should not be considered fully absorbed by the marketplace until after the second business day after the day on which the information is released. If, for example, the Company were to make an announcement on a Monday, you should not trade in Company Securities until Thursday. Depending on the particular circumstances, the Company may determine that a longer or shorter period should apply to the release of specific material nonpublic information.

 

Transactions by Family Members and Others

 

This Policy applies to your family members who reside with you (including a spouse, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else who lives in your household, and any family members who do not live in your household but whose transactions in Company Securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in Company Securities (collectively referred to as “Family Members”). You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in Company Securities, and you should treat all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were for your own account. This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made by a third party not controlled by, influenced by or related to you or your Family Members.

 

 

Transactions by Entities that You Influence or Control

 

This Policy applies to any entities that you influence or control, including any corporations, partnerships or trusts (collectively referred to as “Controlled Entities”), and transactions by these Controlled Entities should be treated for the purposes of this Policy and applicable securities laws as if they were for your own account.

 

Transactions Under Company Plans

 

This Policy does not apply in the case of the following transactions, except as specifically noted:

 

Stock Option Exercises. This Policy does not apply to the exercise of an employee stock option acquired pursuant to the Company’s plans, or to the exercise of a tax withholding right pursuant to which a person has elected to have the Company withhold shares subject to an option to satisfy tax withholding requirements. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.

 

Restricted Stock Awards. This Policy does not apply to the vesting of restricted stock, or the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock. The Policy does apply, however, to any market sale of restricted stock.

 

401(k) Plan. This Policy does not apply to purchases of Company Securities in the Company’s 401(k) plan resulting from your periodic contribution of money to the plan pursuant to your payroll deduction election. This Policy does apply, however, to certain elections you may make under the 401(k) plan, including: (a) an election to increase or decrease the percentage of your periodic contributions that will be allocated to the Company stock fund; (b) an election to make an intra-plan transfer of an existing account balance into or out of the Company stock fund; (c) an election to borrow money against your 401(k) plan account if the loan will result in a liquidation of some or all of your Company stock fund balance; and (d) an election to pre-pay a plan loan if the pre- payment will result in allocation of loan proceeds to the Company stock fund.

 

Transactions Not Involving a Purchase or Sale

 

Bona fide gifts are not transactions subject to this Policy, unless the person making the gift has reason to believe that the recipient intends to sell the Company Securities while the officer, employee or director is aware of material nonpublic information, or the person making the gift is subject to the trading restrictions specified below under the heading “Additional Procedures” and the sales by the recipient of the Company Securities occur during a blackout period. Further, transactions in mutual funds that are invested in Company Securities are not transactions subject to this Policy.

 

Special and Prohibited Transactions

 

The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. It therefore is the Company’s policy that any persons covered by this Policy may not engage in any of the following transactions, or should otherwise consider the Company’s preferences as described below:

 

Short-Term Trading. Short-term trading of Company Securities may be distracting to the person and may unduly focus the person on the Company’s short-term stock market performance instead of the Company’s long-term business objectives. For these reasons, any director, officer or other employee of the Company who purchases Company Securities in the open market may not sell any Company Securities of the same class during the six months following the purchase (or vice versa).

 

Short Sales. Short sales of Company Securities (i.e., the sale of a security that the seller does not own) may evidence an expectation on the part of the seller that the securities will decline in value, and therefore have the potential to signal to the market that the seller lacks confidence in the Company’s prospects. In addition, short sales may reduce a seller’s incentive to seek to improve the Company’s performance. For these reasons, short sales of Company Securities are prohibited. In addition, Section 16(c) of the Exchange Act prohibits officers and directors from engaging in short sales. (Short sales arising from certain types of hedging transactions are governed by the paragraph below captioned “Hedging Transactions.”)

 

 

Publicly-Traded Options. Given the relatively short term of publicly-traded options, transactions in options may create the appearance that a director, officer or employee is trading based on material nonpublic information and focus a director’s, officer’s or other employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in put options, call options or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the next paragraph below.)

 

Hedging Transactions. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such hedging transactions may permit a director, officer or employee to continue to own Company Securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as the Company’s other shareholders. Therefore, directors, officers and employees are prohibited from engaging in any such transactions.

 

Margin Accounts and Pledged Securities. Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan.

Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company Securities, directors, officers and other employees are prohibited from holding Company Securities in a margin account or otherwise pledging Company Securities as collateral for a loan. (Pledges of Company Securities arising from certain types of hedging transactions are governed by the paragraph above captioned “Hedging Transactions.”)

 

Standing and Limit Orders. Standing and limit orders (except standing and limit orders under Rule 10b5-1 Plans, as described below) create heightened risks for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a director, officer or other employee is in possession of material nonpublic information. The Company therefore discourages placing standing or limit orders on Company Securities. If a person subject to this Policy determines that they must use a standing order or limit order, the order should be limited to short duration and should otherwise comply with the restrictions and procedures outlined below under the heading “Additional Procedures.”

 

Additional Procedures

 

The Company has established additional procedures in order to assist the Company in the administration of this Policy, to facilitate compliance with laws prohibiting insider trading while in possession of material nonpublic information, and to avoid the appearance of any impropriety. These additional procedures are applicable only to those individuals described below.

 

Pre-Clearance Procedures. The persons designated by the Compliance Officer as being subject to these procedures (generally, all persons required to file beneficial ownership reports with the SEC), as well as the Family Members and Controlled Entities of such persons, may not engage in any transaction in Company Securities without first obtaining pre-clearance of the transaction from the Compliance Officer. A request for pre-clearance should be submitted to the Compliance Officer at least two business days in advance of the proposed transaction. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance, and may determine not to permit the transaction. If a person seeks pre-clearance and permission to engage in the transaction is denied, then he or she should refrain from initiating any transaction in Company Securities, and should not inform any other person of the restriction.

 

 

When a request for pre-clearance is made, the requestor should carefully consider whether he or she may be aware of any material nonpublic information about the Company, and should describe fully those circumstances to the Compliance Officer. The requestor should also indicate whether he or she has effected any non-exempt “opposite- way” transactions within the past six months, and should be prepared to report the proposed transaction on an appropriate SEC Form 4 or Form 5. The requestor should also be prepared to comply with SEC Rule 144 and file Form 144, if necessary, at the time of any sale.

 

Quarterly Trading Restrictions. The persons designated by the Compliance Officer as subject to this restriction (generally, all persons who have access to material, nonpublic information), as well as their Family Members or Controlled Entities, may not conduct any transactions involving the Company’s Securities (other than as specified by this Policy), during a “Blackout Period” beginning ten business days prior to the end of each fiscal quarter and ending on the second business day following the date of the public release of the Company’s earnings results for that quarter. In other words, these persons may only conduct transactions in Company Securities during the “Window Period” beginning on the third business day following the public release of the Company’s quarterly earnings and ending ten business days prior to the close of the next fiscal quarter.

 

Under certain very limited circumstances, a person subject to this restriction may be permitted to trade during a Blackout Period, but only if the Compliance Officer concludes that the person does not in fact possess material nonpublic information.

 

Persons wishing to trade during a Blackout Period must contact the Compliance Officer for approval at least two business days in advance of any proposed transaction involving Company Securities.

 

Event-Specific Trading Restriction Periods. From time to time, an event may occur that is material to the Company and is known by only a few directors, officers and/or employees. So long as the event remains material and nonpublic, the persons designated by the Compliance Officer may not trade Company Securities. In addition, the Company’s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, designated persons should refrain from trading in Company Securities even sooner than the typical Blackout Period described above. In that situation, the Compliance Officer may notify these persons that they should not trade in the Company’s Securities, without disclosing the reason for the restriction. The existence of an event-specific trading restriction period or extension of a Blackout Period will not be announced to the Company as a whole, and should not be communicated to any other person. Even if the Compliance Officer has not designated you as a person who should not trade due to an event-specific restriction, you should not trade while aware of material nonpublic information. Exceptions will not be granted during an event-specific, trading restriction period.

 

Exceptions. The quarterly trading restrictions and event-driven trading restrictions do not apply to those transactions to which this Policy does not apply, as described above under the headings: “Transactions Under Company Plans” and “Transactions Not Involving a Purchase or Sale.” Further, the requirement for pre-clearance, the quarterly trading restrictions and event-driven trading restrictions do not apply to transactions conducted pursuant to approved Rule 10b5-1 plans, described under the heading “Rule 10b5-1 Plans.”

 

Rule 10b5-1 Plans

 

Rule 10b5-1 under the Exchange Act provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on this defense, a person subject to this Policy must enter into a Rule 10b5-1 plan for transactions in Company Securities that meets certain conditions specified in the Rule (a “Rule 10b5-1 Plan”). If the plan meets the requirements of Rule 10b5-1, Company Securities may be purchased or sold without regard to certain insider trading restrictions. To comply with the Policy, a Rule 10b5-1 Plan must be approved by the Compliance Officer and meet the requirements of Rule 10b5-1 and the Company’s “Guidelines’ for Rule 10b5-1 Plans,” which may be obtained from the Compliance Officer. In general, a Rule 10b5-1 Plan must be entered into at a time when the person entering into the plan is not aware of material nonpublic information. Once the plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The plan must either specify the amount, pricing and timing of transactions in advance or delegate discretion on these matters to an independent third party.

 

Any Rule 10b5-1 Plan must be submitted for approval [five days] prior to the entry into the Rule 10b5-1 Plan. No further pre-approval of transactions conducted pursuant to the Rule 10b5-1 Plan will be required.

 

 

Post-Termination Transactions

 

This Policy continues to apply to transactions in Company Securities even after termination of service to the Company. If an individual is in possession of material nonpublic information when his or her service terminates, that individual may not trade in Company Securities until that information has become public or is no longer material.

 

The pre-clearance procedures specified under the heading “Additional Procedures” above, however, will cease to apply to transactions in Company Securities upon the expiration of any Blackout Period or other Company-imposed trading restrictions applicable at the time of the termination of service.

 

Consequences of Violations

 

The purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to others who then trade in the Company’s Securities, is prohibited by the federal and state laws. Insider trading violations are pursued vigorously by the SEC, U.S. Attorneys and state enforcement authorities as well as the laws of foreign jurisdictions. Punishment for insider trading violations is severe, and could include significant fines and imprisonment. While the regulatory authorities concentrate their efforts on the individuals who trade, or who tip inside information to others who trade, the federal securities laws also impose potential liability on companies and other “controlling persons” if they fail to take reasonable steps to prevent insider trading by company personnel.

 

In addition, an individual’s failure to comply with this Policy may subject the individual to Company-imposed sanctions, including dismissal for cause, whether or not the employee’s failure to comply results in a violation of law. Needless to say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish a person’s reputation and irreparably damage a career.

 

Company Assistance

 

Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the Compliance Officer.

 

Certification

 

All persons subject to this Policy must certify their understanding of, and intent to comply with, this Policy.

 

 

Exhibit 10.21

Clawback Policy

 

 

The Board of Directors (the “Board”) of Cyanotech Corporation and its subsidiary, Nutrex Hawaii, Inc. (the “Company”) believes that it is in the best interests of the Company and its shareholders to adopt this Clawback Policy (the “Policy”), which provides for the recovery of certain incentive compensation in the event of an Accounting Restatement (as defined below). This Policy is designed to comply with, and shall be interpreted to be consistent with, Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10D-1 promulgated under the Exchange Act (“Rule 10D-1”) and Nasdaq Listing Rule 5608 (the “Listing Standards”).

 

1.	Administration

 

Except as specifically set forth herein, this Policy shall be administered by the Board or, if so designated by the Board, a committee thereof (the Board or such committee charged with administration of this Policy, the “Administrator”). The Administrator is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate or advisable for the administration of this Policy. Any determinations made by the Administrator shall be final and binding on all affected individuals and need not be uniform with respect to each individual covered by the Policy. In the administration of this Policy, the Administrator is authorized and directed to consult with the full Board or such other committees of the Board, such as the Audit Committee or the Compensation Committee, as may be necessary or appropriate as to matters within the scope of such other committee’s responsibility and authority. Subject to any limitation at applicable law, the Administrator may authorize and empower any officer or employee of the Company to take any and all actions necessary or appropriate to carry out the purpose and intent of this Policy (other than with respect to any recovery under this Policy involving such officer or employee).

 

2.	Definitions

 

As used in this Policy, the following definitions shall apply:

 

●

“Accounting Restatement” means an accounting restatement of the Company’s financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

 

●	“Administrator” has the meaning set forth in Section 1 hereof.

 

●

Applicable Period” means the three completed fiscal years immediately preceding the date on which the Company is required to prepare an Accounting Restatement, as well as any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years (except that a transition period that comprises a period of at least nine months shall count as a completed fiscal year). The “date on which the Company is required to prepare an Accounting Restatement” is the earlier to occur of (a) the date the Board, a committee of the Board (e.g., Audit Committee), or the officer or officers of the Company authorized to take such action if Board action is not required concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement or (b) the date a court, regulator or other legally authorized body directs the Company to prepare an Accounting Restatement, in each case regardless of if or when the restated financial statements are filed.

 

 

●	“Covered Executives” means the Company’s current and former executive officers, as determined by the Administrator in accordance with the definition of executive officer set forth in Rule 10D-1 and the Listing Standards.

 

●	Erroneously Awarded Compensation” has the meaning set forth in Section 5 of this Policy.

 

●

“Financial Reporting Measure” is any measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measure that is derived wholly or in part from such measure. Financial Reporting Measures include but are not limited to the following (and any measures derived from the following): Company stock price; total shareholder return (“TSR”); revenues; net income; operating income; profitability of one or more reportable segments; financial ratios (e.g., accounts receivable turnover and inventory turnover rates); earnings before interest, taxes, depreciation and amortization (“EBITDA”); funds from operations and adjusted funds from operations; liquidity measures (e.g., working capital, operating cash flow); return measures (e.g., return on invested capital, return on assets); earnings measures (e.g., earnings per share); sales per square foot or same store sales, where sales is subject to an Accounting Restatement; revenue per user, or average revenue per user, where revenue is subject to an Accounting Restatement; cost per employee, where cost is subject to an Accounting Restatement; any of such financial reporting measures relative to a peer group, where the Company’s financial reporting measure is subject to an Accounting Restatement; and tax basis income. A Financial Reporting Measure need not be presented within the Company’s financial statements or included in a filing with the Securities Exchange Commission.

 

●

“Incentive-Based Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure. Incentive-Based Compensation is “received” for purposes of this Policy in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive-Based Compensation award is attained, even if the payment or grant of such Incentive-Based Compensation occurs after the end of that period.

 

3.	Covered Executives; Incentive-Based Compensation

 

This Policy applies to Incentive-Based Compensation received by a Covered Executive after beginning services as a Covered Executive; (b) if that person served as a Covered Executive at any time during the performance period for such Incentive-Based Compensation; and (c) while the Company had a listed class of securities on a national securities exchange.

 

4.	Required Recoupment of Erroneously Awarded Compensation in the Event of an Accounting Restatement

 

In the event the Company is required to prepare an Accounting Restatement, the Company shall promptly recoup the amount of any Erroneously Awarded Compensation received by any Covered Executive, as calculated pursuant to Section 5 hereof, during the Applicable Period.

 

5.	Erroneously Awarded Compensation: Amount Subject to Recovery

 

The amount of “Erroneously Awarded Compensation” subject to recovery under the Policy, as determined by the Administrator, is the amount of Incentive-Based Compensation received by the Covered Executive that exceeds the amount of Incentive- Based Compensation that would have been received by the Covered Executive had it been determined based on the restated amounts.

 

Erroneously Awarded Compensation shall be computed by the Administrator without regard to any taxes paid by the Covered Executive in respect of the Erroneously Awarded Compensation.

 

 

By way of example, with respect to any compensation plans or programs that take into account Incentive-Based Compensation, the amount of Erroneously Awarded Compensation subject to recovery hereunder includes, but is not limited to, the amount contributed to any notional account based on Erroneously Awarded Compensation and any earnings accrued to date on that notional amount.

 

For Incentive-Based Compensation based on stock price or TSR: (a) the Administrator shall determine the amount of Erroneously Awarded Compensation based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or TSR upon which the Incentive-Based Compensation was received; and (b) the Company shall maintain documentation of the determination of that reasonable estimate and provide such documentation to The Nasdaq Stock Market (“Nasdaq”).

 

6.	Method of Recoupment

 

The Administrator shall determine, in its sole discretion, the timing and method for promptly recouping Erroneously Awarded Compensation hereunder, which may include without limitation (a) seeking reimbursement of all or part of any cash or equity-based award, (b) cancelling prior cash or equity-based awards, whether vested or unvested or paid or unpaid, (c) cancelling or offsetting against any planned future cash or equity-based awards, (d) forfeiture of deferred compensation, subject to compliance with Section 409A of the Internal Revenue Code and the regulations promulgated thereunder and (e) any other method authorized by applicable law or contract. Subject to compliance with any applicable law, the Administrator may affect recovery under this Policy from any amount otherwise payable to the Covered Executive, including amounts payable to such individual under any otherwise applicable Company plan or program, including base salary, bonuses or commissions and compensation previously deferred by the Covered Executive.

 

The Company is authorized and directed pursuant to this Policy to recoup Erroneously Awarded Compensation in compliance with this Policy unless the Compensation Committee of the Board¹ has determined that recovery would be impracticable solely for the following limited reasons, and subject to the following procedural and disclosure requirements:

 

•

The direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on expense of enforcement, the Administrator must make a reasonable attempt to recover such erroneously awarded compensation, document such reasonable attempt(s) to recover and provide that documentation to Nasdaq;

 

•

Recovery would violate home country law of the issuer where that law was adopted prior to November 28, 2022. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on violation of home country law of the issuer, the Administrator must satisfy the applicable opinion and disclosure requirements of Rule 10D-1 and the Listing Standards; or

 

•	Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.

 

---

¹ Under Rule 10D-1, the determination that recovery would be impracticable under the rule must be made by “the issuer’s committee of independent directors responsible for executive compensation decisions, or in the absence of such a committee, a majority of the independent directors serving on the board”, so this reference is to the Compensation Committee rather than the Administrator. If the Administrator is the Compensation Committee, the term Administrator can be used here.

 

 

7.	No Indemnification of Covered Executives

 

Notwithstanding the terms of any indemnification or insurance policy or any contractual arrangement with any Covered Executive that may be interpreted to the contrary, the Company shall not indemnify any Covered Executives against the loss of any Erroneously Awarded Compensation, including any payment or reimbursement for the cost of third-party insurance purchased by any Covered Executives to fund potential clawback obligations under this Policy.

 

8.	Administrator Indemnification

 

Any members of the Administrator, and any other members of the Board who assist in the administration of this Policy, shall not be personally liable for any action, determination or interpretation made with respect to this Policy and shall be fully indemnified by the Company under applicable law and Company policy with respect to any such action, determination, or interpretation. The foregoing sentence shall not limit any other rights to indemnification of the members of the Board under applicable law or Company policy.

 

9.	Effective Date; Retroactive Application

 

This Policy shall be effective as of October 2, 2023 (the “Effective Date”). The terms of this Policy shall apply to any Incentive-Based Compensation that is received by Covered Executives on or after the Effective Date, even if such Incentive-Based Compensation was approved, awarded, granted, or paid to Covered Executives prior to the Effective Date. Without limiting the generality of Section 6 hereof, and subject to applicable law, the Administrator may affect recovery under this Policy from any amount of compensation approved, awarded, granted, payable or paid to the Covered Executive prior to, on or after the Effective Date.

 

10.	Amendment; Termination

 

The Board may amend, modify, supplement, rescind or replace all or any portion of this Policy at any time and from time to time in its discretion, and shall amend this Policy as it deems necessary to comply with applicable law or any rules or standards adopted by a national securities exchange on which the Company’s securities are listed.

 

11.	Other Recoupment Rights; Company Claims

 

The Board intends that this Policy shall be applied to the fullest extent of the law. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company under applicable law or pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.

 

Nothing contained in this Policy, and no recoupment or recovery as contemplated by this Policy, shall limit any claims, damages, or other legal remedies the Company or any of its affiliates may have against a Covered Executive arising out of or resulting from any actions or omissions by the Covered Executive.

 

12.	Successors

 

This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators, or other legal representatives.

 

13.	Exhibit Filing Requirement

 

A copy of this Policy and any amendments shall be filed as an exhibit to the Company’s annual report on Form 10-K.

 

 

To be signed by Company’s Covered Executives

 

 

Clawback Policy Acknowledgment

 

I, the undersigned, agree and acknowledge that I am fully bound by, and subject to, all of the terms and conditions of Cyanotech Corporation’s Clawback Policy (as may be amended, restated, supplemented or otherwise modified from time to time, the “Policy”). In the event of any inconsistency between the Policy and the terms of any employment agreement to which I am a party, or the terms of any compensation plan, program or agreement under which any compensation has been granted, awarded, earned or paid, the terms of the Policy shall govern. In the event it is determined by the Administrator that any amounts granted, awarded, earned or paid to me must be forfeited or reimbursed to the Company, I will promptly take any action necessary to effectuate such forfeiture and/or reimbursement. Any capitalized terms used in this Acknowledgment without definition shall have the meaning set forth in the Policy.

 

 

By: ___________________________________

 

 

Date: _________________________________

 

 

Exhibit 23.1

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We have issued our report dated June 26, 2024, with respect to the consolidated financial statements and schedule included in the Annual Report of Cyanotech Corporation on Form 10-K for the year ended March 31, 2024. We consent to the incorporation by reference of said report in the Registration Statements of Cyanotech Corporation on Forms S-3 (File No. 333-42486, File No. 333-97755, and File No. 333-101401), and on Forms S-8 (File No. 033-63789, File No. 333-42484, File No. 333-141911, File No. 333-141912, File No. 333-154165, File No. 333-179605 , File No. 333-198790, and File No. 333-214572).

 

 

/s/ GRANT THORNTON LLP

 

Newport Beach, California

June 26, 2024

 

 

Exhibit 31.1

 

Certification Pursuant

To 18 U. S. C. Section 1350,

As Adopted Pursuant To

Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Matthew K. Custer, Chief Executive Officer certify that:

 

1.	I have reviewed this annual report on Form 10-K of Cyanotech Corporation;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

 

Date: June 26, 2024	/s/ Matthew K. Custer
	Matthew K. Custer
	President and Chief Executive Officer

 

 

Exhibit 31.2

 

Certification Pursuant

To 18 U. S. C. Section 1350,

As Adopted Pursuant To

Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Felicia Ladin, Chief Financial Officer certify that:

 

1.	I have reviewed this annual report on Form 10-K of Cyanotech Corporation;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

 

Date: June 26, 2024	/s/ Felicia Ladin
	Felicia Ladin
	Chief Financial Officer; Vice President—Finance & Administration, and Treasurer
	(Principal Financial Officer)

 

 

Exhibit 32.1

 

 

 

Certification of CEO and CFO

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

 

In connection with the Annual Report of Cyanotech Corporation (the “Company”) on Form 10-K for the period ended March 31, 2024 (the “Report”) as filed with the Securities and Exchange Commission on the date hereof, each of the undersigned certifies that:

 

1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act (15 U.S.C. 78m or 78o (d)); and

 

2)	The information contained in the Report fairly presents, in all material aspects, the financial condition and results of operations of the Company.

 

 

 

Date: June 26, 2024	/s/ Matthew K. Custer
	Matthew K. Custer
	President and Chief Executive Officer
Date: June 26, 2024	/s/ Felicia Ladin
	Felicia Ladin
	Chief Financial Officer; Vice President—Finance & Administration, and Treasurer
	(Principal Financial Officer)

 

 

Exhibit 99.1

 

 

 

News Release

Contact: Felicia Ladin (808) 334-9455 investorrelations@cyanotech.com

 

Cyanotech Reports Financial Results for the Fourth Quarter and Fiscal Year 2024

 

KAILUA KONA, Hawaii (June 26, 2024) — Cyanotech Corporation (OTCQB Market: CYAN), a world leader in microalgae-based, high-value nutrition and health dietary supplement products, announced financial results for the fourth quarter and fiscal year 2024, ended March 31, 2024.

 

Commenting on the fiscal year results (changes shown vs. fiscal 2023), Cyanotech’s President and Chief Executive Officer, Matthew K. Custer, said:

 

“Although the year was filled with challenges, our team effectively managed spending, production and inventory to conclude the year with only slightly increased debt of $209,000. As we look forward to this next year, and the increasing interest we are currently seeing in our products along with new product offerings, we are now turning our focus to meeting this demand with a well-managed increase in supply. We have preliminarily secured the financing to ensure we can meet market demand.”

 

“Our sales were essentially flat with the prior year, however, the product mix shifted as we saw an increase in our packaged sales. This increase was offset by declines in spirulina bulk sales as the market for bulk material is increasingly price sensitive with many companies sourcing lower priced international ingredients.”

 

“Our re-aligned commercial function continues to expand on and create market awareness with strategic initiatives. These initiatives include restructuring the sales team to bolster both the business to business and business to consumer channels, aligning our selling materials and messaging with our commitment to transparency and sustainability, and refining our core value proposition to emphasize and educate the consumer about our high-quality farm-direct, and responsibly grown products. We have also expanded our product offerings by launching our BioAstin® Hawaiian Astaxanthin® and Hawaiian Spirulina® in new, convenient gummy formats.”

 

Fiscal Year 2024

Cyanotech reported net sales of $23,071,000 for fiscal 2024 compared to $23,178,000 in fiscal 2023, a decrease of 0.5%. Gross profit was $5,945,000, with gross profit margin of 25.8%, compared to gross profit of $7,259,000 and gross profit margin of 31.3%. Operating loss was $4,592,000 compared to operating loss of $2,920,000.

 

Net loss was $5,267,000 or $0.81 loss per share, compared to net loss of $3,440,000 or $0.55 earnings per share.

 

Fourth Quarter Fiscal 2024

Cyanotech reported net sales of $5,970,000 for the fourth quarter of fiscal year 2024 compared to $5,391,000 in the fourth quarter of fiscal 2023, an increase of 10.7%. Gross profit was $675,000 with gross profit margin of 11.3%, compared to gross profit of $1,387,000 and gross profit margin of 25.7% in the fourth quarter of fiscal 2023. Operating loss was $1,903,000 compared to operating loss of $1,255,000 in the fourth quarter of fiscal 2023. Net loss was $2,081,000, or $0.30 loss per share, compared to net loss of $1,430,000, or $0.23 loss per share in the fourth quarter of fiscal 2023.  

 

Please review the Company’s Form 10-K for the period ended March 31, 2024 for more detailed information.

 

— Cyanotech will host a broadcast at 9:00 PM EDT on Thursday, June 27, 2024, to respond to questions about its operating results and other topics of interest. Interested parties are asked to submit questions to questions@cyanotech.com before 12 p.m. EDT on Thursday, June 27, 2024. The Company will respond only to relevant questions relating to the Company’s fourth quarter and fiscal 2024 financial performance and will not be accepting any questions or comments during the broadcast.

 

To join the broadcast, please browse http://cyanotech.com/meet approximately five minutes prior to the start time.

 

73-4460 Queen Kaahumanu Highway, #102 ~ Kailua-Kona, Hawaii 96740

(808) 326-1353 fax (808) 329-3597 ~ www.cyanotech.com

 

 

 

About Cyanotech — Cyanotech Corporation, a world leader in microalgae technology for more than 30 years, produces BioAstin® Hawaiian Astaxanthin® and Hawaiian Spirulina Pacifica®. These all-natural, dietary ingredients and supplements leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. The Company’s mission is to fulfill the promise of whole health through Hawaiian microalgae. Cyanotech’s BioAstin® offers superior antioxidant activity which supports skin, eye and joint health, as well as recovery from exercise*. Cyanotech's Spirulina products offer nutrition that supports cardiovascular health and immunity*. All Cyanotech products are produced from microalgae grown at our 96-acre facility in Kona, Hawaii using patented and proprietary technology and are Generally Recognized as Safe (“GRAS”) for use in food products. Cyanotech sells its products direct to consumers at retail locations in the United States and online at www.nutrex-hawaii.com and also distributes to dietary supplement, nutraceutical and cosmeceutical manufacturers and marketers. The Company is regulated by the Food and Drug Administration. Visit www.cyanotech.com for more information.

 

*These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

 

“Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995 Besides statements of present fact and historical fact, this press release may contain forward-looking statements. Forward-looking statements relate to the future and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by forward-looking statements. We caution against relying on forward-looking statements. Important factors that could change actual, future results include: changes in sales levels to our largest customers, weather patterns in Hawaii, production problems, risks associated with new products, foreign exchange fluctuations, availability of financing, and our ability to continue as a going concern, as well as national and global political, economic, business, competitive, market and regulatory conditions. Other factors are more fully detailed in the Company’s annual Form 10-K filings with the Securities and Exchange Commission.

 

Financial Tables Follow: The following tables do not contain footnotes or other information contained in the Company’s Form 10-K for the fiscal year ended March 31, 2024, which can be found on the Cyanotech website (www.cyanotech.com) under Investors>Investor Filings upon filing. As such the following Financial Tables are provided only as a guide and other factors are more fully detailed in the Company’s annual Form 10-K filings with the Securities and Exchange Commission.  

 

73-4460 Queen Kaahumanu Highway, #102 ~ Kailua-Kona, Hawaii 96740

(808) 326-1353 fax (808) 329-3597 ~ www.cyanotech.com

 

 

 

CYANOTECH CORPORATION 

CONSOLIDATED BALANCE SHEETS

 

March 31,  

 

		2024				2023
		(in thousands, except share data)
ASSETS
Current assets:
Cash		$	707			$	974
Accounts receivable, net of allowance for credit losses of $11 in 2024 and $64 in 2023			2,102				1,331
Inventories			7,313				10,707
Prepaid expenses and other current assets			469				484
Total current assets			10,591				13,496
Equipment and leasehold improvements, net			10,109				11,366
Operating lease right-of-use assets, net			4,284				4,776
Other assets			128				90
Total assets		$	25,112			$	29,728
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	1,439			$	1,021
Accrued expenses			757				1,101
Customer deposits			198				89
Operating lease obligations, current portion			530				483
Short term debt – bank			1,240				—
Line of credit – bank			—				1,540
Line of credit – related party			1,250				500
Current maturities of long-term debt			3,140				3,369
Total current liabilities			8,554				8,103
Long-term debt, less current maturities			1,000				1,000
Long-term operating lease obligations			3,744				4,275
Other long-term liabilities			—				3
Total liabilities			13,298				13,381
Commitments and contingencies
Stockholders’ equity:
Preferred stock of $0.01 par value, authorized 10,000,000 shares; no shares issued and outstanding			—				—
Common stock of $0.02 par value, authorized 50,000,000 shares; issued and outstanding 6,947,246 shares at March 31, 2024 and 6,271,971 shares at March 31, 2023			139				125
Additional paid-in capital			34,576				33,856
Accumulated deficit			(22,901	)			(17,634	)
Total stockholders’ equity			11,814				16,347
Total liabilities and stockholders’ equity		$	25,112			$	29,728

 

73-4460 Queen Kaahumanu Highway, #102 ~ Kailua-Kona, Hawaii 96740

(808) 326-1353 fax (808) 329-3597 ~ www.cyanotech.com

 

 

 

CYANOTECH CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

Years ended March 31,

 

		2024				2023				2022
		(in thousands, except per share data)
Net sales		$	23,071			$	23,178			$	35,968
Cost of sales			17,126				15,919				22,402
Gross profit			5,945				7,259				13,566
Operating expenses:
General and administrative			4,464				4,659				5,367
Sales and marketing			5,384				4,750				4,913
Research and development			689				770				712
Total operating expense			10,537				10,179				10,992
(Loss) income from operations			(4,592	)			(2,920	)			2,574
Other income (expense):
Interest expense, net			(668	)			(502	)			(392	)
(Loss) income before income taxes			(5,260	)			(3,422	)			2,182
Income tax expense			(7	)			(18	)			(28	)
Net (loss) income		$	(5,267	)		$	(3,440	)		$	2,154
Net (loss) income per share:
Basic		$	(0.81	)		$	(0.55	)		$	0.35
Diluted		$	(0.81	)		$	(0.55	)		$	0.35
Shares used in calculation of net (loss) income per share:
Basic			6,531				6,244				6,157
Diluted			6,531				6,244				6,168

 

73-4460 Queen Kaahumanu Highway, #102 ~ Kailua-Kona, Hawaii 96740

(808) 326-1353 fax (808) 329-3597 ~ www.cyanotech.com

 

v3.24.1.1.u2

Document And Entity Information - USD ($)	12 Months Ended
	Mar. 31, 2024	Jun. 14, 2024	Sep. 29, 2023
Document Information [Line Items]
Entity Central Index Key	0000768408
Entity Registrant Name	Cyanotech Corp
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2024
Document Type	10-K
Document Annual Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	0-14602
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	91-1206026
Entity Address, Address Line One	73-4460 Queen Kaahumanu Highway, Suite 102
Entity Address, City or Town	Kailua-Kona
Entity Address, State or Province	HI
Entity Address, Postal Zip Code	96740
City Area Code	808
Local Phone Number	326-1353
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 3,327,018.4
Entity Common Stock, Shares Outstanding		6,948,379
Auditor Name	GRANT THORNTON LLP
Auditor Firm ID	248
Auditor Location	Newport Beach, California

v3.24.1.1.u2

Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Current assets:
Cash	$ 707,000	$ 974,000
Accounts receivable, net of allowance for credit losses of $11 in 2024 and $64 in 2023	2,102,000	1,331,000
Inventories	7,313,000	10,707,000
Prepaid expenses and other current assets	469,000	484,000
Total current assets	10,591,000	13,496,000
Equipment and leasehold improvements, net	10,109,000	11,366,000
Operating lease right-of-use assets, net	4,284,000	4,776,000
Other assets	128,000	90,000
Total assets	25,112,000	29,728,000
Current liabilities:
Accounts payable	1,439,000	1,021,000
Accrued expenses	757,000	1,101,000
Customer deposits	198,000	89,000
Operating lease obligations, current portion	530,000	483,000
Short-term debt – bank	1,240,000	0
Line of credit – bank	0	1,540,000
Line of credit – related party	1,250,000	500,000
Current maturities of long-term debt	3,140,000	3,369,000
Total current liabilities	8,554,000	8,103,000
Long-term debt, less current maturities	1,000,000	1,000,000
Long-term operating lease obligations	3,744,000	4,275,000
Other long-term liabilities	0	3,000
Total liabilities	13,298,000	13,381,000
Commitments and contingencies
Stockholders’ equity:
Preferred stock of $0.01 par value, authorized 10,000,000 shares; no shares issued and outstanding	0	0
Common stock of $0.02 par value, authorized 50,000,000 shares; issued and outstanding 6,947,246 shares at March 31, 2024 and 6,271,971 shares at March 31, 2023	139,000	125,000
Additional paid-in capital	34,576,000	33,856,000
Accumulated deficit	(22,901,000)	(17,634,000)
Total stockholders’ equity	11,814,000	16,347,000
Total liabilities and stockholders’ equity	$ 25,112,000	$ 29,728,000

v3.24.1.1.u2

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Accounts receivable, allowance for doubtful accounts	$ 11	$ 64
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred, authorized shares (in shares)	10,000,000	10,000,000
Preferred, issued shares (in shares)	0	0
Preferred outstanding, shares (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	6,947,246	6,271,971
Common stock, shares outstanding (in shares)	6,947,246	6,271,971

v3.24.1.1.u2

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Net sales	$ 23,071	$ 23,178	$ 35,968
Cost of sales	17,126	15,919	22,402
Gross profit	5,945	7,259	13,566
Operating expenses:
General and administrative	4,464	4,659	5,367
Sales and marketing	5,384	4,750	4,913
Research and development	689	770	712
Total operating expense	10,537	10,179	10,992
(Loss) income from operations	(4,592)	(2,920)	2,574
Other income (expense):
Interest expense, net	(668)	(502)	(392)
(Loss) income before income taxes	(5,260)	(3,422)	2,182
Income tax expense	(7)	(18)	(28)
Net (loss) income	$ (5,267)	$ (3,440)	$ 2,154
Net (loss) income per share:
Basic (in dollars per share)	$ (0.81)	$ (0.55)	$ 0.35
Diluted (in dollars per share)	$ (0.81)	$ (0.55)	$ 0.35
Shares used in calculation of net (loss) income per share:
Basic (in shares)	6,531	6,244	6,157
Diluted (in shares)	6,531	6,244	6,168

v3.24.1.1.u2

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Mar. 31, 2021	6,116,073
Balance at Mar. 31, 2021	$ 122	$ 33,267	$ (16,348)	$ 17,041
Issuances of common stock for Director Stock Grants (in shares)	55,438
Issuances of common stock for Director Stock Grants	$ 1	157	0	158
Issuance of vested shares of restricted stock (in shares)	46,963
Issuance of vested shares of restricted stock	$ 1	(53)		(52)
Shares withheld for tax payments (in shares)	(16,251)
Shares withheld for tax payments	$ 0	0	0	0
Share-based compensation expense	0	186	0	186
Net income (loss)	$ 0	0	2,154	2,154
Balance (in shares) at Mar. 31, 2022	6,202,223
Balance at Mar. 31, 2022	$ 124	33,557	(14,194)	19,487
Issuances of common stock for Director Stock Grants (in shares)	64,489
Issuances of common stock for Director Stock Grants	$ 1	157	0	158
Issuance of vested shares of restricted stock (in shares)	8,312
Issuance of vested shares of restricted stock	$ 0	(10)		(10)
Shares withheld for tax payments (in shares)	(3,053)
Shares withheld for tax payments	$ 0	0	0	0
Share-based compensation expense	0	152	0	152
Net income (loss)	$ 0	0	(3,440)	(3,440)
Balance (in shares) at Mar. 31, 2023	6,271,971
Balance at Mar. 31, 2023	$ 125	33,856	(17,634)	16,347
Issuances of common stock for Director Stock Grants (in shares)	159,493
Issuances of common stock for Director Stock Grants	$ 3	123	0	126
Issuance of vested shares of restricted stock (in shares)	135,272
Issuance of vested shares of restricted stock	$ 3	(30)	0	(27)
Shares withheld for tax payments (in shares)	(49,983)
Shares withheld for tax payments	$ (1)	0	0	(1)
Share-based compensation expense	0	222	0	222
Net income (loss)	$ 0	0	(5,267)	(5,267)
Proceeds from the sale of common stock, net of expenses (in shares)	400,000
Proceeds from the sale of common stock, net of expenses	$ 8	380	0	388
Issuances of common stock to Directors in lieu of cash for current year board fees (in shares)	12,821
Issuances of common stock to Directors in lieu of cash for current year board fees	$ 1	10	0	11
Issuance of common stock to Directors in lieu of cash for prior year board fees (in shares)	17,672
Issuance of common stock to Directors in lieu of cash for prior year board fees	$ 0	15	0	15
Balance (in shares) at Mar. 31, 2024	6,947,246
Balance at Mar. 31, 2024	$ 139	$ 34,576	$ (22,901)	$ 11,814

v3.24.1.1.u2

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (5,267,000)	$ (3,440,000)	$ 2,154,000
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities:
Depreciation and amortization	1,589,000	1,655,000	1,599,000
Loss on impairment of assets	0	5,000	21,000
Amortization of debt issue costs and other assets	(13,000)	40,000	57,000
Amortization of operating leases right-of-use assets	492,000	440,000	322,000
Share-based compensation expense	359,000	310,000	344,000
Provision for credit losses	22,000	64,000	35,000
Net (increase) decrease in assets:
Accounts receivable	(793,000)	2,269,000	(1,263,000)
Inventories	3,394,000	(1,231,000)	(717,000)
Prepaid expenses and other assets	2,000	60,000	(74,000)
Net increase (decrease) in liabilities:
Accounts payable	467,000	(1,422,000)	(358,000)
Accrued expenses	(329,000)	(311,000)	568,000
Customer deposits	109,000	(75,000)	40,000
Operating lease obligations	(484,000)	(452,000)	(331,000)
Other liabilities	(3,000)	(12,000)	(18,000)
Net cash (used in) provided by operating activities	(455,000)	(2,100,000)	2,379,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in equipment and leasehold improvements	(381,000)	(1,068,000)	(1,270,000)
Net cash used in investing activities	(381,000)	(1,068,000)	(1,270,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on short term debt and line of credit – bank	(575,000)	(660,000)	(1,000,000)
Draws on short term debt and line of credit – bank	275,000	2,200,000	0
Net draws on line of credit – related party	750,000	500,000	0
Payments on long-term debt – related party	0	0	(500,000)
Principal payments on long-term debt – bank	(241,000)	(477,000)	(735,000)
Proceeds from the issuance of common stock, net of expenses	388,000	0	0
Taxes paid related to net share settlement of restricted stock units	(28,000)	(10,000)	(52,000)
Net cash provided by (used in) financing activities	569,000	1,553,000	(2,287,000)
Net decrease in cash	(267,000)	(1,615,000)	(1,178,000)
Cash at beginning of year	974,000	2,589,000	3,767,000
Cash at end of year	707,000	974,000	2,589,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest	583,000	408,000	342,000
Income taxes	$ 6,000	$ 32,000	$ 2,000

v3.24.1.1.u2

Note 1 - Organization and Basis of Presentation	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Business Description and Basis of Presentation [Text Block]	CYANOTECH CORPORATION   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     1. ORGANIZATION AND BASIS OF PRESENTATION   Cyanotech Corporation (the “Company”), located in Kailua-Kona, Hawaii, was incorporated in the state of Nevada on March 3, 1983 and is traded on the OTCQB Market under the symbol “CYAN”. The Company is engaged in the production of natural products derived from microalgae for the dietary supplements market.   The Company is an agricultural company that produces high value natural products derived from microalgae grown in complex and intricate open-pond agricultural systems on the Kona coast of Hawaii.  The Company's products include Hawaiian Spirulina Pacifica®, a superfood with numerous benefits, including boosting the immune system and overall cellular health; and BioAstin® Hawaiian Astaxanthin®, a powerful antioxidant shown to support and maintain the body's natural inflammatory response.   The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements include the accounts of Cyanotech Corporation and its wholly owned subsidiary, Nutrex Hawaii, Inc. (“Nutrex Hawaii” or “Nutrex”). The Company operates in one business segment and uses one measurement of profitability for its business.  Intercompany balances and transactions have been eliminated in consolidation.   Liquidity and Going Concern   The accompanying consolidated financial statements, as of and for the fiscal year ended March 31, 2024 and 2023, have been prepared assuming the Company will continue as a going concern.  The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The Company sustained operating losses and negative cash flows from operations for these same periods.  Further, as discussed below, the Company was not in compliance with two debt covenant requirements at March 31, 2024 and one debt covenant requirement at March 31, 2023. In June 2023, First Foundation Bank (the “Bank”) instituted a freeze on additional advances from the Revolving Credit Agreement (the “Line of Credit”).  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expense that may be necessary if the Company was unable to continue as a going concern.   As of March 31, 2024, the Company had cash of $707,000 and working capital of $2,037,000 compared to $974,000 and $5,393,000, respectively, at March 31, 2023. The Company had a Line of Credit with the Bank that provided for borrowings up to $2,000,000 on a revolving basis, however, as part of the covenant waiver at March 31, 2023, the borrowings under this line of credit were frozen. On October 13, 2023, the Bank converted this line of credit to a term loan in the amount of $1,480,000 with a maturity date of August 30, 2024 (the “2023 Loan”). As of March 31, 2024, the Company had $1,240,000 outstanding on this loan and as of March 31, 2023, the Company had outstanding borrowings of $1,540,000 on the line of credit.  (See Note 5).   The Company also has a loan facility with a related party that allows the Company to borrow up to $2,000,000 on a revolving basis (the “Revolver”). At March 31, 2024 and March 31, 2023, the Company had $1,250,000 and $500,000, respectively, outstanding borrowings on the Revolver, which were included in line of credit – related party on the Consolidated Balance Sheets. The Revolver expires on April 12, 2025 (see Notes 5 and 15).   As of March 31, 2024, the Company had $3,220,000 of debt (“2012 Loan”) payable to the Bank that require the payment of principal and interest monthly through August 2032. Pursuant to the 2012 Loan and 2023 Loan, the Company is subject to annual financial covenants, customary affirmative and negative covenants and certain subjective acceleration clauses. As of March 31, 2024, the Company’s debt service coverage ratio and current ratio fell short of the Bank’s annual requirement. The Company is currently seeking a letter from the Bank waiving the covenant violations as of March 31, 2024, but noting there can be no assurance that the Bank will provide such a waiver and may declare a default if any covenants remain out of compliance at applicable measurement dates. As of March 31, 2023, the Company’s debt service coverage ratio fell short of the Bank’s annual requirement. On June 22, 2023, the Bank provided the Company with a letter waiving the covenant violation as of March 31, 2023.   On December 15, 2023, the Company completed a private placement (the “Private Placement”) for 400,000 shares of its common stock at a price of $1.00 per share, and incurred legal costs related to the Private Placement of $12,000. The net proceeds of $388,000 were used by the Company for general working capital. (See Note 10).   In April 2019, the Company obtained a loan in the amount of $1,500,000 from a related party. The proceeds were used to pay down accounts payable and for general operating capital purposes. On April 12, 2021, December 14, 2022 and August 14, 2023, the Company amended this loan (see Notes 5 and 15). As of both March 31, 2024 and 2023, the Company had $1,000,000 outstanding on the related party note. The loan matures on April 12, 2025.   The Company continues to experience a loss from operations as the impacts from the macroeconomic environment led to lower sales across all of the Company’s portfolio for the fiscal year ended 2024. Industry data shows that consumers intake of dietary supplements is not slowing down but may be trading down to private label brands to save on costs. Beginning in the second fiscal quarter of 2023 through the end of fiscal year ended 2024, the Company drew on its funding sources to provide liquidity. To address the resulting cash flow challenges, the Company continues to monitor cost savings initiatives implemented in fiscal year 2023, including stopping or slowing production of inventory in alignment with current customer demand, maintaining a reduced headcount and compensation, primarily through attrition and furloughs, respectively, and eliminating certain discretionary selling, general and administrative expenses. The Company has also made changes in the sales and marketing team starting with the Chief Commercial Officer and strengthening the sales team, updating the Company’s marketing materials to emphasize its competitive strengths and raising capital by completing a private placement in the third fiscal quarter of 2024.   Funds generated by operating activities and available cash are the Company's most significant sources of liquidity for working capital requirements, debt service and funding of maintenance levels of capital expenditures. The Company has developed its operating plan to produce a significant portion of the cash flows necessary to meet all financial requirements. Although the Company has a history of either being in compliance with debt covenants, or obtaining the necessary waivers, execution of its operating plan is dependent on many factors, some of which are not within the control of the Company. However, no assurances can be provided that the Company will achieve its operating plan and cash flow projections for the next fiscal years or its projected consolidated financial position as of March 31, 2025. Such estimates are subject to change based on future results and such change could cause future results to vary significantly from expected results.

v3.24.1.1.u2

Note 2 - Significant Accounting Policies	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Significant Accounting Policies [Text Block]	2. SIGNIFICANT ACCOUNTING POLICIES   Use of Estimates   The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of any contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods reported.  Management reviews these estimates and assumptions periodically and reflects the effect of revisions in the period that they are determined to be necessary.  Actual results could differ from those estimates and assumptions.   Financial Instruments and Fair Value   The Company applies a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:     Level 1 — Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.   Level 2 — Inputs to the valuation methodology include:     ● Quoted prices for similar assets or liabilities in active markets;   ● Quoted prices for identical or similar assets or liabilities in inactive markets;   ● Inputs other than quoted prices that are observable for the asset or liability; and   ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means.    If the asset or liability has a specified contractual term, the Level 2 input must be observable for substantially the full term of the asset or liability.     Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value.   Cash, Accounts Receivable, Accounts Payable, Accrued Expenses and Customer Deposits - Due to the short-term nature of these instruments, management believes that the carrying amounts approximate fair value.   Line of Credit, Revolver, Short-Term and Long-Term Debt - The carrying amount of our line of credit, Revolver and short and long-term debt approximates fair value as interest rates applied to the underlying debt are adjusted quarterly to market interest rates, which approximate current interest rates for similar debt instruments of comparable maturities.    Cash   Cash primarily consists of cash on hand and cash in bank deposits.   Concentration Risk   The Company maintains its cash accounts in banks located in Hawaii, which are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank.  The Company had cash balances at March 31, 2024 and 2023 that exceeded the balance insured by the FDIC by $166,000 and $422,000, respectively.  A significant portion of revenues and accounts receivables are derived from a few major customers. For the year ended March 31, 2024, two customers individually accounted for 34% and 17% of the Company’s total net sales and for the year ended March 31, 2023, two customers individually accounted for 34% and 6% of the Company’s total net sales. Two customers accounted for 72% and 46% of the Company’s accounts receivable balance as of March 31, 2024 and 2023, respectively.   Accounts Receivable   Accounts receivable are recorded at the invoiced amount and do not accrue interest. Credit is extended based on evaluation of the customer's financial condition. Collateral is not required. The allowance for credit losses reflects management’s best estimate of expected credit losses inherent in the accounts receivable balance. Management determines the allowance based on historical experience, specifically identified nonpaying accounts and other currently available evidence. Management reviews its customer account balances monthly with a focus on significant individual past due balances over 90 days. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers or otherwise.   Inventories   Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. Net realizable value is defined as estimated sales price less cost to dispose. Inventory costs include materials, labor, overhead and third-party costs. Management reviews and writes down inventory for known or expected inventory obsolescence based on product age and quality which may affect salability.   The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, fixed production overhead costs, idle facilities, freight handling costs and spoilage, as an expense in the period incurred, without adjusting overhead absorption rates. Normal production capacity is defined as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance.   Equipment and Leasehold Improvements   Equipment and leasehold improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives for equipment and furniture and fixtures, and the shorter of the land lease term (see Notes 4 and 7) or estimated useful lives for leasehold improvements as follows (in years):   Equipment 3 to 10 Furniture and fixtures 3 to 7 Leasehold improvements 10 to 25   Capital project costs are accumulated in construction-in-progress until completed, at which time the costs are transferred to the relevant asset and commence depreciation. Repairs and Maintenance costs are expensed in the period incurred. Repairs and maintenance that significantly increase the useful life or value of the asset are capitalized and depreciated over the remaining life of the asset. The Company capitalizes interest cost incurred on funds used to construct property and equipment. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life.   Impairment of Long-Lived Assets   Management reviews long-lived assets, such as equipment, leasehold improvements and purchased intangibles subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized to the extent that the carrying amount exceeds the asset’s fair value. Assets to be disposed of and related liabilities would be separately presented in the consolidated balance sheet. Assets to be disposed of would be reported at the lower of the carrying value or fair value less costs to sell and would not be depreciated.   Accounting for Asset Retirement Obligations   Management evaluates quarterly the potential liability for asset retirement obligations under the Company’s lease for its principal facility and corporate headquarters. No liability has been recognized as of March 31, 2024 and 2023 (see Note 7).   Revenue Recognition   The Company records revenue based on the five-step model which includes: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when the performance obligations are satisfied. Substantially all of the Company’s revenue is generated by fulfilling orders for the purchase of its microalgal dietary supplements to retailers, wholesalers, or direct to consumers via online channels, with each order considered to be a distinct performance obligation. These orders may be formal purchase orders, verbal phone orders, e-mail orders or orders received online. Shipping and handling activities for which the Company is responsible under the terms and conditions of the order are not accounted for as performance obligations but as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the goods and are expensed when revenue is recognized.    Revenue is measured as the net amount of consideration expected to be received in exchange for fulfilling a performance obligation. The Company has elected to exclude sales, use and similar taxes from the measurement of the transaction price.  The amount of consideration expected to be received and revenue recognized includes estimates of variable consideration, which includes costs for trade promotion programs, coupons, returns and early payment discounts.  Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. The Company reviews and updates these estimates at the end of each reporting period and the impact of any adjustments are recognized in the period the adjustments are identified. In assessing whether collection of consideration from a customer is probable, the Company considers the customer's ability and intent to pay that amount of consideration when it is due. Payment of invoices is due as specified in the underlying customer agreement, typically 30 days from the invoice date, which occurs on the date of transfer of control of the products to the customer. Revenue is recognized at the point in time that control of the ordered products is transferred to the customer. Generally, this occurs when the product is delivered, or in some cases, picked up from one of the Company’s distribution centers by the customer. Revenue from extraction services is recognized when control is transferred upon completion of the extraction process.   Customer contract liabilities consist of customer deposits received in advance of fulfilling an order and are shown separately on the consolidated balance sheets. During the years ended March 31, 2024 and 2023, the Company recognized $26,000 and $94,000, respectively, of revenue from deposits that were included in contract liabilities as of March 31, 2023 and 2022, respectively. The Company’s contracts have a duration of one year or less and therefore, the Company has elected the practical expedient of not disclosing revenues allocated to partially unsatisfied performance obligations.   Research and Development   Research and development costs are expensed as incurred and consist primarily of labor, benefits and outside research.   Advertising   Advertising costs are expensed as incurred. Total advertising expense for the years ended March 31, 2024, 2023 and 2022 was $1,308,000, $1,513,000, and $1,458,000, respectively.   Income Taxes   Income taxes are accounted for under the asset and liability method. The asset and liability method require the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using income tax rates applicable to the period in which the tax difference is expected to reverse.   Judgment is required in determining any valuation allowance recorded against deferred tax assets, specifically net operating loss carryforwards, tax credit carryforwards and deductible temporary differences that may reduce taxable income in future periods. In assessing the need for a valuation allowance, the Company considers all available evidence including past operating results, estimates of future taxable income and tax planning opportunities. In the event the Company changes its determination as to the amount of deferred tax assets that can be realized, it will adjust its valuation allowance with a corresponding impact to income tax expense in the period in which such determination is made.   In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including resolution of related appeals or litigation processes, based on the technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold, the tax position is measured and recognized in the Company’s financial statements as the largest amount of tax benefit that, in management’s judgment, is greater than 50% likely of being realized upon settlement. At March 31, 2024 and 2023, there were no liabilities for income tax associated with unrecognized tax benefits.   The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest expense in its consolidated statements of operations. During the years ended March 31, 2024 and 2023, there were no accruals for the payment of interest and penalties related to uncertain tax positions.   Share-Based Compensation   The Company accounts for share-based payment arrangements using fair value. The Company currently has no liability-classified awards. Equity-classified awards, including grants of restricted stock, restricted stock units and employee stock options, are measured at the grant-date fair value of the award and are not subsequently remeasured unless an award is modified. The cost of equity-classified awards is recognized in the statement of operations over the period during which an employee is required to provide the service in exchange for the award, or the vesting period.  All stock-based compensation for restricted stock, restricted stock units and stock options has been classified as general and administrative expense in the consolidated statement of operations.   The Company utilizes the Black-Scholes option pricing model to determine the fair value of each option award. Expected volatilities are based on the historical volatility of the Company’s common stock over a period consistent with that of the expected term of the options. The expected term of the options is estimated based on factors such as vesting periods, contractual expiration dates and historical exercise behavior. The risk-free rates for periods within the contractual life of the options are based on the yields of U.S. Treasury instruments with terms comparable to the estimated option terms. The forfeiture rate of the options is estimated at the time of the grant and is based on historical forfeitures of similar grants.  The fair value of restricted stock units is the closing stock price on the grant date.   Per Share Amounts   Basic earnings (loss) per common share is calculated by dividing net income (loss) for the year by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by dividing net income for the year by the sum of the weighted average number of common shares outstanding during the year plus the number of potentially dilutive common shares (“dilutive securities”) that were outstanding during the year. Dilutive securities include restricted stock units and stock options granted pursuant to the Company’s stock option plans. Dilutive securities related to the Company’s stock option plans are included in the calculation of diluted earnings per common share using the treasury stock method. Potentially dilutive securities are excluded from the computation of earnings per share in periods in which a net loss is reported, as their effect would be antidilutive. A reconciliation of the numerators and denominators of the basic and diluted income (loss) per common share calculations for the years ended March 31, 2024, 2023 and 2022 is presented in Note 11.    Reclassifications   Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation.  There was no impact on previously reported financial statements for the periods presented.   Recent Accounting Pronouncements   In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses” (“Topic 326”), which was subsequently amended in November 2018 through ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses” (“CECL”). CECL requires entities to estimate lifetime expected credit losses for trade and other receivables, net investment in leases, financing receivables, debt securities and other instruments, which will result in earlier recognition of credit losses. The guidance is effective for interim and annual periods beginning after December 15, 2022. The Company adopted this standard as of April 1, 2023, however, due to the relatively short-term nature of its accounts receivable and history of limited bad debt expense, the impact of this guidance was not significant to the Company’s consolidated financial statements and related disclosure. The Company will continue to evaluate the impact of CECL going forward.   In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 28): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosure of incremental segment information on an annual and interim basis.  ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and it requires retrospective application to all prior periods presented in the financial statements.  The Company is currently evaluating the impact that ASU 2023-07 will have on the presentation of its consolidated financial statements.   In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosure” (“ASU 2023-09”), which enhances the transparency and decision usefulness of income tax disclosures. Adjustments to the annual disclosure of income taxes include: a tabulate rate reconciliation comprised of eight specific categories; income taxes paid, disaggregated between significant federal, state, and foreign jurisdictions; eliminating requirements to disclose the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made; and adds a requirement to disclose income (or loss) from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) from continuing operations disaggregated between domestic and foreign. ASU 2023-09 is effective for public business entities for fiscal years beginning on or after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-09 should be applied on a prospective basis. Retrospective application is permitted. The company is currently evaluating ASU 2023-09 to determine its impact on the Company’s disclosures.

v3.24.1.1.u2

Note 3 - Inventories	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Inventory Disclosure [Text Block]	3. INVENTORIES   Inventories consist of the following as of March 31, 2024 and 2023:       2024     2023       (in thousands)   Raw materials   $ 1,149     $ 1,887   Work in process     2,195       2,049   Finished goods     3,658       6,502   Supplies     311       269   Inventories   $ 7,313     $ 10,707     The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, fixed production overhead costs, idle facilities, freight handling costs and spoilage, as an expense in the period incurred, without adjusting overhead absorption rates. Normal production capacity is defined as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. The Company expensed abnormal production costs of $206,000, $90,000 and $0 to cost of sales for the fiscal years ended March 31, 2024, 2023 and 2022, respectively. The increase in the current fiscal year was primarily due to abnormally high costs associated with regenerating fallowed spirulina ponds, therefore, these production costs were written off.   Beginning in fiscal year 2021 through fiscal year 2023, cultivation of astaxanthin was completed in the first six months of the fiscal year during the most productive months of the year due to the best growing conditions, compared to year-round cultivation in the prior fiscal years. In fiscal year 2024, cultivation of astaxanthin reverted back to year-round in order to manage staffing constraints. The Company calculates total production costs for the year based on normal capacity of production expected to be achieved in a year under normal circumstances. These costs are then allocated into inventory based on the period of production, not including abnormal production costs. Allocating fixed and overhead costs requires management’s judgement to determine when production is outside of the normal range of expected variation in production.   Other non-inventoriable fixed costs of $467,000, $269,000 and $136,000 were expensed to cost of sales for the fiscal years ended March 31, 2024, 2023 and 2022, respectively. The increase in the current fiscal year was primarily due to lower overall production volumes with higher than normal excess capacity expense for the full year compared to the prior fiscal year.   Net realizable value adjustments for spirulina products of $256,000 were expensed to cost of sales for the fiscal year ended March 31, 2024, primarily due to low production volumes with high fixed cost base. There were no net realizable value adjustments for fiscal year ended March 31, 2023 or 2022.

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Note 4 - Equipment and Leasehold Improvements	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Property, Plant and Equipment Disclosure [Text Block]	4. EQUIPMENT AND LEASEHOLD IMPROVEMENTS   Equipment and leasehold improvements consist of the following as of March 31, 2024 and 2023:       2024     2023       (in thousands)   Equipment   $ 21,904     $ 21,649   Leasehold improvements     15,075       15,038   Furniture and fixtures     419       407         37,398       37,094   Less accumulated depreciation and amortization     (27,500 )     (25,947 ) Construction in-progress     211       219   Equipment and leasehold improvements, net   $ 10,109     $ 11,366     Management has determined that $0, $5,000 and $21,000 of asset impairment existed as of March 31, 2024, 2023 and 2022, and the impairment losses were included in other income (expense) on the consolidated statements of operations.   Depreciation and amortization expense were approximately $1,589,000, $1,655,000 and $1,599,000 for the years ended March 31, 2024, 2023 and 2022, respectively.

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Note 5 - Line of Credit and Term Debt	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Debt Disclosure [Text Block]	5. LINE OF CREDIT AND TERM DEBT   Total debt consists of the following at March 31, 2024 and 2023 as follows:       2024     2023       (in thousands)   Line of credit – bank   $ —     $ 1,540   Short-term debt – bank     1,240       —   Line of credit – related party     1,250       500   Long-term debt     3,220       3,461   Long-term debt – related party     1,000       1,000   Unamortized debt issuance costs     (80 )     (92 ) Less current maturities     (5,630 )     (5,409 ) Total long-term debt, less current maturities   $ 1,000     $ 1,000     Line of Credit and Term Loans   On June 3, 2016, the Company entered into a Credit Agreement with the Bank after the necessary approvals from the State of Hawaii were received, to secure the lien on the Company’s leasehold property in Kona, Hawaii. The Credit Agreement further defined the terms and conditions for the 2012 Loan and allowed for the Line of Credit, which was subsequently converted to the 2023 Loan. The Credit Agreement grants the Bank the following security interests in the Company’s property: (a) a lien on the Company’s leasehold interest in its Kona facility; (b) an assignment of the Company’s interest in leases and rents on its Kona facility; and (c) a security interest in all fixtures, furnishings and equipment related to or used by the Company at the Kona facility. Each security interest is further subject to the terms of the Credit Agreement.   The Line of Credit allowed the Company to borrow up to $2,000,000 on a revolving basis. Borrowings under the Credit Agreement bear interest at the Wall Street Journal prime rate (8.0% at March 31, 2023) plus 2%, floating, provided that at no time shall the annual interest rate be less than 5.25%. On October 13, 2023, the Bank converted the Line of Credit to the 2023 Loan in the amount of $1,480,000, with no further advances or disbursements under this line and matures on August 30, 2024. The 2023 Loan requires monthly payments of at least $40,000 plus interest accrued on the unpaid balance of the loan at the Wall Street Journal prime rate plus 2%, floating, provided that at no time shall the annual interest rate be less than 7.0%. As of March 31, 2024, the Company had $1,240,000 outstanding on the 2023 Loan which bears interest at 8.5%, plus 2%. As of March 31, 2023, the outstanding balance under the Line of Credit was $1,540,000. Both the 2023 Loan and the Line of Credit were included in current liabilities on the Consolidated Balance Sheets.   In 2012, the Company executed a loan agreement with a lender providing for $5,500,000 in aggregate the 2012 Loan secured by substantially all the Company’s assets, including a mortgage on the Company's interest in its lease at the National Energy Laboratory of Hawaii Authority, pursuant to a Term Loan Agreement dated August 14, 2012 (the “2012 Loan Agreement”). The 2012 Loan is evidenced by promissory notes in the amounts of $2,250,000 and $3,250,000, the repayment of which is partially guaranteed under the provisions of a USDA Rural Development Guarantee. The proceeds of the 2012 Loan were used to acquire processing equipment and leasehold improvements at its Kona, Hawaii facility.   The provisions of the 2012 Loan required the payment of interest only for the first 12 months of the term; thereafter, and until its maturity on August 14, 2032, the obligation fully amortizes over nineteen (19) years. Interest on the 2012 Loan accrues on the outstanding principal balance at an annual variable rate equal to the published Wall Street Journal prime rate (8.5% at March 31, 2024 and 7.5% at March 31, 2023) plus 1.0% and is adjustable on the first day of each calendar quarter and fixed for that quarter, provided that at no time shall the annual interest rate be less than 5.5%. The balance under the 2012 Loan was $3,220,000 and $3,461,000 at March 31, 2024 and 2023, respectively, and was included in current maturities of long-term debt in the debt table above. See Loan Covenants, Violations and Waiver below.   The 2012 Loan included a one-time origination and guaranty fees totaling $214,500 and an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year, beginning December 31, 2012. The USDA guaranteed 80% of all amounts owing under the 2012 Loan. The balance in unamortized debt issuance costs was $80,000 and $92,000 at March 31, 2024 and 2023, respectively, and was included in current maturities of long-term debt in the debt table above.  See Loan Covenants, Violations and Waiver below.   Loan Covenants, Violations and Waiver   The Company’s 2023 Loan and 2012 Loan are subject to annual debt service and other financial covenants, including covenants which require the Company to meet key financial ratios and customary affirmative and negative covenants.  As of March 31, 2023, the Company was not in compliance with the required debt service coverage ratio, however, was in compliance with the two other covenants. Due to this violation, the Bank would be contractually entitled to require immediate repayment of the outstanding term loan amount of $3,461,000 and the outstanding line of credit balance of $1,540,000. However, on June 22, 2023, the Bank issued the Company a letter waiving the covenant violation as of March 31, 2023, and implemented an immediate freeze on any and all further advances of the Credit Agreement through the maturity date, with an outstanding balance in the amount of $1,770,000 as of June 21, 2023. As of March 31, 2024, the Company was not incompliance with the debt service coverage and current ratio, however, was in compliance with the third covenant. The Company is currently seeking a letter from the Bank waiving the covenant violations as of March 31, 2024, but there can be no assurance that the Bank will provide such a waiver and may declare a default if any covenants remain out of compliance at applicable measurement dates.   Although the Term Loans mature in August 2032, it is probable that a debt covenant violation occurs within the next twelve months.  Therefore, the Term Loans and related unamortized debt issuance costs are classified as current on the Balance Sheet as of March 31, 2024 and 2023.   Line of Credit and Debt – Related Party   In April 2019, the Company obtained a loan in the amount of $1,500,000 with a related party and the interest was payable quarterly.  The loan was originally due in April 2021. In April 2021, the Company amended the loan, which extended the expiration to April 2024, converted $500,000 into the Revolver, adjusted the interest rate to reflect a floor of 5%, and granted a security interest in substantially all of the Company’s personal property assets, subject to limited exceptions. Concurrently, with the amendment and conversion of the original loan, the Company repaid in cash the principal amount of $500,000 plus accrued interest to date of $1,900 (see Note 15).  In December 2022, the Company amended the loan to extend the expiration to April 2025 and increase the Revolver to $1,000,000. On August 14, 2023, the Company amended the loan to increase the Revolver to $2,000,000.   At both March 31, 2024 and 2023, the balance under this loan was $1,000,000, which was included in long-term debt in the debt table above. At March 31, 2024 and 2023, the balance under the Revolver was $1,250,000 and $500,000, respectively, which was included in line of credit – related party in the debt table above. Interest accrues on the outstanding principal balance and the Revolver at an annual variable rate equal to the published Wall Street Journal prime rate (8.5% and 7.5% at March 31, 2024 and 2023, respectively) plus 1.0% and is adjustable on the first day of each calendar quarter and fixed for that quarter, provided that at no time shall the annual interest rate be less than 5.0%.   Future principal payments, excluding unamortized debt issuance costs, under the loans at March 31, 2024 are as follows:   Fiscal year ending March 31   (in thousands)   2025   $ 4,460   2026     1,000   Total principal payments   $ 5,460

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Note 6 - Accrued Expenses	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Accounts Payable and Accrued Liabilities Disclosure [Text Block]	6. ACCRUED EXPENSES   Accrued expenses as of March 31, 2024 and 2023 consist of the following:       2024     2023       (in thousands)   Wages   $ 234     $ 215   Bonus and profit sharing     —       143   Vacation     327       393   Interest and legal     32       30   Other accrued expenses     164       320   Total accrued expenses   $ 757     $ 1,101

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Note 7 - Operating Leases	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Lessee, Operating Leases [Text Block]	7. OPERATING LEASES   The Company’s principal facility and its corporate headquarters are located at the Natural Energy Laboratory of Hawaii Authority (“NELHA”) at Keahole Point in Kailua-Kona, Hawaii. The Company leases two properties from the State of Hawaii under a 40-year commercial lease expiring in 2035 and a 19-year commercial lease expiring in 2037. Under the terms of the existing NELHA leases, the Company could be required to remove improvements at the end of the lease terms. Under generally accepted accounting principles in the United States, an entity should recognize the fair value of a liability for an asset retirement obligation in the period in which the retirement obligation is incurred, if a reasonable estimate of fair value can be made. If such an estimate cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when the fair value can be reasonably estimated. Based on communications with NELHA, management does not believe the projected cost for such removal to be material to the consolidated financial statements, or likely, given historical practices. However, conditions could change in the future. It is not possible to predict such changes or estimate any impact thereof.   The Company leases facilities, equipment and land under non-cancelable operating leases expiring through 2037. One of its facility leases contains price escalations and the Company exercised its option to renew for five years expiring on December 31, 2027. The NELHA land lease provides for contingent rentals in excess of minimum rental commitments based on a percentage of the Company’s sales. For fiscal years ended March 31, 2024 and 2023, there were no contingent rental payments. The contingent rental payment for the year ended March 31, 2022 was $73,000.   Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are based on the present value of lease payments over the lease terms, using the Bank’s incremental borrowing rate based on the information available at recognition, and the Company has elected to exclude non-lease components. The Company also leases two 84-month solar leases for two of its buildings and a 48-month lease for equipment, which are included in the right-of-use assets and liabilities. At March 31, 2024, the weighted average remaining lease terms of all operating leases was 9.1 years, the weighted average discount rate was 7.3% and the operating lease costs were $818,000. At March 31, 2023, the weighted average remaining lease terms of all operating leases was 9.8 years, the weighted average discount rate was 7.3% and the operating lease costs were $719,000. For fiscal year ended March 31, 2023, noncash right-of-use assets obtained in exchange for operating lease obligations was $1,429,000, representing the lease renewal of one of the Company's facility leases. There were no new leases for fiscal year ended March 31, 2024.   Supplemental balance sheet information related to leases consist of the following as of:   Operating leases   Balance Sheet Classification   March 31, 2024     March 31, 2023           (in thousands)   Right-of-use assets   Operating lease right-of-use assets   $ 6,149     $ 6,149   Accumulated lease amortization   Operating lease right-of-use assets     (1,865 )     (1,373 )                       Total right-of-use assets   $ 4,284     $ 4,776                         Current lease liabilities   Operating lease obligations   $ 530     $ 483   Non-current lease liabilities   Long-term operating lease obligations     3,744       4,275                         Total lease liabilities   $ 4,274     $ 4,758     Maturities of lease liabilities at March 31, 2024 are as follows:   Fiscal year ending March 31   (in thousands)   2025   $ 820   2026     797   2027     798   2028     683   2029     416   Thereafter     2,344   Total undiscounted lease payments     5,858   Less: present value discount     (1,584 ) Total lease liabilities balance   $ 4,274     Rent expense, including contingent rent, under operating leases were $685,000, $506,000 and $713,000 for the years ended March 31, 2024, 2023 and 2022, respectively. Property taxes paid to the states of Hawaii and California were $38,000, $37,000 and $30,000 for the years ended March 31, 2024, 2023 and 2022, respectively.

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Note 8 - Other Commitments and Contingencies	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	8. OTHER COMMITMENTS AND CONTINGENCIES   From time to time, the Company may be involved in litigation and investigations relating to claims and matters arising out of its operations in the normal course of business. There were no significant legal matters outstanding at March 31, 2024.   As of March 31, 2024, 2023 and 2022, the Company had purchase obligations of $808,000, $822,000 and $1,105,000, respectively, including agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The term of the minimum purchase agreement is for ten years, expiring in April 2026 and purchase obligations do not include agreements that are cancelable without penalty.

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Note 9 - Share-based Compensation	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Share-Based Payment Arrangement [Text Block]	9. SHARE-BASED COMPENSATION   As of March 31, 2024, the Company had two equity-based compensation plans: the 2016 Equity Incentive Plan (the “2016 Plan”) and the 2014 Independent Director Stock Option and Restricted Stock Grant Plan and Amendment (the “2014 Directors Plan”). These plans allowed the Company to award stock options and shares of restricted common stock to eligible employees, certain outside consultants and independent directors.   On August 25, 2016, the Company’s shareholders approved the 2016 Plan, authorizing the Board of Directors to provide incentive to the Company’s officers, employees and certain independent consultants through equity-based compensation in the form of stock options, restricted stock, restricted stock units, stock appreciation rights and other stock-based awards (together, “Stock Awards”) and performance shares and performance units (together, “Performance Awards”). Awards under the 2016 Plan are limited to the authorized amount of 1,300,000 shares, up to 600,000 of which are available for issuance in connection with Performance Awards and Stock Awards. As of March 31, 2024, there were 635,679 shares available for grant under the 2016 Plan.   On August 28, 2014, the Company’s shareholders approved the 2014 Directors Plan authorizing the Board of Directors to provide incentive to the Company’s independent directors through equity-based compensation in the form of stock options and restricted stock. Awards under the 2014 Directors Plan are limited to the authorized amount of 350,000 shares. At the 2021 Annual Meeting of Shareholders, the stockholders of the Company approved an amendment to the 2014 Directors Plan to increase the number of shares of common stock available for issuance under the plan by 300,000 shares. As of March 31, 2024, there were 33,220 shares available for grant under the 2014 Directors Plan.   The following table presents shares authorized, available for future grant and outstanding under each of the Company’s plans:       As of March 31, 2024       Authorized     Available     Outstanding   2016 Plan     1,300,000       635,679       415,820   2014 Directors Plan     650,000       33,220       12,000   Total     1,950,000       668,899       427,820     Stock Options   All stock option grants made under the equity-based compensation plans were issued at exercise prices no less than the Company’s closing stock price on the date of grant. Stock options under the 2016 Plan and 2014 Directors Plan were determined by the Board of Directors or the Compensation Committee of the Board of Directors in accordance with the provisions of the respective plans. The terms of each stock option grant include vesting, exercise, and other conditions are set forth in a Stock Option Agreement evidencing each grant. No option can have a life in excess of ten (10) years. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. The model requires various assumptions, including a risk-free interest rate, the expected term of the options, the expected stock price volatility over the expected term of the options, and the expected dividend yield. Compensation expense for employee stock options is recognized ratably over the vesting term. Compensation expense recognized for options issued under all Plans was $98,000, $90,000 and $63,000 for the fiscal years ended March 31, 2024, 2023 and 2022, respectively.   A summary of option activity under the Company’s stock plans for the years ended March 31, 2024, 2023 and 2022 is presented below:   Option Activity   Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (in years)     Aggregate Intrinsic Value   Outstanding at March 31, 2021     374,300     $ 3.64       3.9     $ 129,700   Granted     50,000       2.96                   Forfeited     (5,000 )     5.21                   Expired     (166,800 )     3.84                   Outstanding at March 31, 2022     252,500     $ 3.34       6.5     $ 159,650   Granted     50,000       3.43                   Expired     (49,500 )     5.80                   Outstanding at March 31, 2023     253,000     $ 2.88       7.5     $ —   Granted     50,000       0.79                   Expired     (6,000 )     5.56                   Outstanding at March 31, 2024     297,000     $ 2.47       7.1     $ —   Exercisable at March 31, 2024     172,000     $ 2.76       6.3     $ —     The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $0.29, $0.88 and $3.37 at March 31, 2024, 2023 and 2022, respectively. No stock options were exercised during fiscal year 2024, 2023 or 2022.   A summary of the Company’s non-vested options for the year ended March 31, 2024 is presented below:   Nonvested Options   Shares     Weighted Average Grant-Date Fair Value   Nonvested at March 31, 2023     141,667     $ 1.55   Granted     50,000       0.48   Vested     (66,667 )     1.49   Nonvested at March 31, 2024     125,000     $ 1.16     The weighted average grant-date fair value of stock options granted during fiscal years 2024, 2023 and 2022 was $24,000, $97,000 and $80,000, respectively. The total grant-date fair value of stock options that vested during fiscal years 2024, 2023 and 2022 were $99,000, $67,000 and $40,000, respectively.   The following table summarizes the weighted average characteristics of outstanding stock options as of March 31, 2024:             Outstanding Options     Exercisable Options   Range of Exercise Prices     Number of Shares     Remaining Life (Years)     Weighted Average Exercise Price     Number of Shares     Weighted Average Exercise Price   $0.79 - $2.20       55,000       9.1     $ 0.91       5,000     $ 2.11   $2.21 - $2.34       100,000       6.3     $ 2.29       75,000     $ 2.29   $2.35 - $3.20       80,000       6.9     $ 2.80       63,334     $ 2.76   $3.21 - $5.91       62,000       7.0     $ 3.73       28,666     $ 4.09   Total stock options       297,000       7.1     $ 2.74       172,000     $ 2.76     The range of fair value assumptions related to options granted during the years ended March 31, 2024, 2023 and 2022 were as follows:       2024     2023     2022   Exercise Price   $ 0.48     $ 1.94     $ 1.60   Volatility     61.63 %     57.47 %     58.23 % Risk Free Rate     4.34 %     3.36 %     1.06 % Vesting Period (in years)     3.0       3.0       3.0   Forfeiture Rate     16 %     19 %     0 % Expected Term (in years)     6.0       6.0       6.0   Dividend Rate     0 %     0 %     0 %   Total unrecognized stock-based compensation expense related to all unvested stock options was $58,000, $124,000 and $139,000, at March 31, 2024, 2023 and 2022, respectively, which is expected to be expensed over a weighted average period of 1.3 years, 1.6 years and 2.1 years, respectively.   Restricted Stock   Grants of fully vested restricted stock issued to Non-Employee Directors during fiscal years 2024, 2023 and 2022 was 159,493, 64,489 and 55,438 shares, respectively. Compensation expense recognized for fully vested restricted stock grants issued under the 2014 Directors Plan was $126,000, $158,000 and $158,000 for the fiscal years ended March 31, 2024, 2023 and 2022, respectively.   To reduce the Company’s ongoing cash expenses, the Nominating and Corporate Governance Committee of the Board of Directors adopted a resolution allowing each director to elect to receive his or her quarterly director fees in the form of restricted stock in lieu of cash. Two Board members elected to receive shares of restricted stock in lieu of cash for the third fiscal quarter of 2023 and one Board member elected to receive shares of restricted stock in lieu of cash for the second fiscal quarter of 2024. On April 3, 2023, 17,672 shares of fully vested restricted stock were issued to the two Board members with compensation expense earned and recognized for these fully vested restricted stock grants in the amount of $15,500 in the fiscal year ended March 31, 2023. On October 13, 2023, 12,821 shares of fully vested restricted stock were issued to one Board member with $10,000 of compensation expense recognized in fiscal year ended March 31, 2024.   Restricted Stock Units (“RSUs”)   RSUs are service-based awards granted to eligible employees under our 2016 Plan. Compensation expense recognized for RSUs issued under the 2016 Plan was $124,000, $62,000 and $123,000 for the years ended March 31, 2024, 2023 and 2022, respectively.   The following table summarizes information related to awarded RSUs:   Nonvested Restricted Stock Units   Shares     Weighted Average Grant Price   Nonvested restricted stock units at March 31, 2021     28,188     $ 2.38   Granted     38,672     $ 2.91   Vested     (46,963 )   $ 2.85   Forfeited     (5,432 )   $ 2.51   Nonvested restricted stock units at March 31, 2022     14,465     $ 2.22   Granted     66,423     $ 3.13   Vested     (8,312 )   $ 2.35   Forfeited     (2,242 )   $ 2.91   Nonvested restricted stock units at March 31, 2023     70,334     $ 3.04   Granted     204,964     $ 0.49   Vested     (135,272 )     1.00   Forfeited     (9,206 )   $ 2.12   Nonvested restricted stock units at March 31, 2024     130,820     $ 1.23     Total unrecognized stock-based compensation expense related to unvested restricted stock units was $98,000, $122,000 and $19,000 at March 31, 2024, 2023 and 2022, respectively, which is expected to be expensed over a weighted average period of 1.2 years, 2.3 years and 1.2 years, respectively.

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Note 10 - Common, Preferred Stock and Stockholders' Equity	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Equity [Text Block]	10. COMMON, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY   The Company has authorized a total of sixty million shares of which fifty million shares are authorized common stock and ten million shares are authorized preferred stock. None of the preferred stock was issued or outstanding at March 31, 2024 and 2023. Under the terms of the Company’s Amended and Restated Articles of Incorporation, the Board of Directors is authorized to determine or alter the rights, preferences, privileges and restrictions of the Company’s authorized but unissued shares of preferred stock.   On December 15, 2023, the Company completed the Private Placement of an aggregate of 400,000 shares (the “Shares”) of its common stock, par value $0.02 per share (the “Common Stock”), at a price of $1.00 per share for gross proceeds of $400,000. The Shares were issued pursuant to the exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(a)(2) of the Securities Act to one investor, the Company’s Chairman of the Board, and pursuant to a Subscription Agreement (the “Subscription Agreement”), dated December 15, 2023. The Company incurred legal expenses of $12,000 related to this transaction during the fiscal year ended March 31, 2024. The net proceeds of $388,000 from the Private Placement were used by the Company for general working capital.   The Shares are restricted securities under applicable federal securities laws and are subject to certain piggyback registration rights as provided for in the Subscription Agreement.

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Note 11 - Earnings (Loss) Per Share	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Earnings Per Share [Text Block]	11. EARNINGS (LOSS) PER SHARE   Basic earnings (loss) per share is computed on the basis of the weighted average number of common shares outstanding. Diluted earnings per share is computed on the basis of the weighted average number of common shares outstanding plus the potentially dilutive effect of outstanding stock options and unvested restricted stock units using the treasury stock method.   Reconciliations between the numerator and the denominator of the basic and diluted income (loss) per share computations for the years ended March 31, 2024, 2023 and 2022 are as follows:        Net Income (loss) (Numerator)     Shares (Denominator)     Per Share Amount       (in thousands, except per share amounts)   Year ended March 31, 2024:                         Basic and diluted loss per share   $ (5,267 )     6,531     $ (0.81 ) Year ended March 31, 2023:                         Basic and diluted loss per share   $ (3,440 )     6,244     $ (0.55 ) Year ended March 31, 2022:                         Basic income per share   $ 2,154       6,157     $ 0.35   Effective dilutive securities—Common stock options and restricted stock units     —       11       —   Diluted income per share   $ 2,154       6,168     $ 0.35     Basic and diluted per share amounts are the same in periods of a net loss because common share equivalents are anti-dilutive when a net loss is recorded. Diluted earnings per share does not include the impact of restricted stock units totaling 3,000 for the fiscal year ended March 31, 2024, as the effect of their inclusion would be anti-dilutive. Restricted stock units become dilutive within the period granted and remain dilutive until the units vest and are then included in the calculation of basic earnings per share.

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Note 12 - Profit Sharing and 401k Plan	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Profit Sharing Plan and 401 Plan Disclosure [Text Block]	12. PROFIT SHARING AND 401(K) PLAN   The Company sponsors a profit sharing plan for all employees not covered under a separate management incentive plan. Under the profit sharing plan, a percentage determined by the Board of Directors of pre-tax profits on a quarterly basis may be allocated to non-management employees at management’s discretion. The profit sharing bonus may be distributed all in cash on an after-tax basis or distributed half in cash (on an after-tax basis) and the remainder deposited in an employee’s 401(k) account on a pre-tax basis. Employees may also make voluntary pre-tax contributions to their 401(k) accounts. There was no compensation expense under this plan for fiscal years ended March 31, 2024 or 2023. Compensation expense under this plan was approximately $121,000 for the fiscal year ended March 31, 2022. Additionally, the Company has the discretion to make a retirement contribution to all employees individual 401(k) accounts equal to two percent of each employee’s base pay for each bi-weekly pay period on a pre-tax basis. Retirement expense under this plan was approximately $82,000, $138,000 and $135,000 for fiscal years ended March 31, 2024, 2023 and 2022, respectively.

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Note 13 - Product Line and Geographic Information	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	13. PRODUCT LINE AND GEOGRAPHIC INFORMATION   Disaggregation of Revenue   The following table represents revenue disaggregated by major product line and extraction services for the years ended March 31, 2024, 2023 and 2022 (in thousands):       2024     2023     2022   Packaged sales                         Astaxanthin packaged   $ 13,613     $ 12,227     $ 14,931   Spirulina packaged     5,779       4,814       7,604   Total packaged sales     19,392       17,041       22,535                             Bulk sales                         Astaxanthin bulk     1,491       1,982       2,447   Spirulina bulk     1,572       3,541       10,386   Total bulk sales     3,063       5,523       12,833                             Contract extraction and R&D services revenue     616       614       600   Total net sales   $ 23,071     $ 23,178     $ 35,968     Cost of sales for contract extraction and R&D services for the years ended March 31, 2024, 2023 and 2022 were $358,000, $441,000 and $439,000, respectively.   Net sales by geographic region for the years ended March 31, 2024, 2023 and 2022 are as follows:       2024     2023     2022       (dollars in thousands)   Net sales(1):                                                 United States   $ 18,886       82 %   $ 17,031       73 %   $ 24,468       68 % Asia / Pacific     1,247       5 %     2,164       9 %     7,102       20 % Europe     1,596       7 %     2,440       11 %     3,183       9 % Other     1,342       6 %     1,543       7 %     1,215       3 %     $ 23,071       100 %   $ 23,178       100 %   $ 35,968       100 %   (1) Net sales are attributed to countries based on location of customer.

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Note 14 - Income Taxes	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Income Tax Disclosure [Text Block]	14. INCOME TAXES   Income tax (expense) benefit for the years ended March 31, 2024, 2023 and 2022 consisted of:       2024     2023     2022       (in thousands)   Current:                         Federal   $ —     $ —     $ —   State     (7 )     (18 )     (28 ) Total current (expense) benefit     (7 )     (18 )     (28 ) Deferred:                         Federal     —       —       —   State     —       —       —   Total deferred expense     —       —       —   Income tax expense   $ (7 )   $ (18 )   $ (28 )   The following table reconciles the amount of income taxes computed at the federal tax rate of 21% for each of the fiscal years ended March 31, 2024, 2023 and 2022, to the amount reflected in the Company’s consolidated statements of operations for the years ended March 31, 2024, 2023 and 2022:       2024     2023     2022       (in thousands)   Tax provision at federal statutory income tax rate   $ 1,457     $ 952     $ (591 ) Stock-based compensation     (44 )     (23 )     (16 ) Decrease (increase) in valuation allowance     (1,404 )     (518 )     557   State and local income taxes, net of federal tax benefit     (6 )     (12 )     (2 ) Expired losses     —       (380 )     —   Deferred tax true-up     (25 )     (24 )     34   Other, net     15       (13 )     (10 ) Income tax expense   $ (7 )   $ (18 )   $ (28 )   The tax effects of temporary differences related to various assets, liabilities and carry forwards that give rise to deferred tax assets and deferred tax liabilities as of March 31, 2024 and 2023 are as follows:       2024     2023       (in thousands)   Deferred tax assets:                 Net operating loss carry forwards   $ 4,471     $ 3,570   Inventory     213       50   Compensation accrual     109       177   Tax credit carry forwards     28       28   Interest limitation     268       108   Operating lease right-of-use assets     1,184       1,323   Section 174 Costs     223       118   Other     9       26   Gross deferred tax assets     6,505       5,400   Less valuation allowance     (4,394 )     (2,990 ) Net deferred tax assets     2,111       2,410                     Deferred tax liabilities:                 Operating lease obligations     (1,186 )     (1,328 ) Depreciation and amortization     (925 )     (1,082 ) Net deferred tax liabilities     (2,111 )     (2,410 ) Net deferred tax assets (liabilities)   $ —     $ —     In assessing the valuation allowance for deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Ultimately, the realization of deferred tax assets will depend on the existence future taxable income during the periods. In making this assessment, management considers past operating results, the scheduled reversal of deferred tax liabilities, estimates of future taxable income and tax planning strategies.   As of March 31, 2024, 2023 and 2022, the Company has concluded that a valuation allowance was appropriate in light of the significant negative evidence, which was objective and verifiable, primarily the cumulative losses in recent years.   While the Company’s long-term financial outlook remains positive, the Company concluded that its ability to rely on its long-term outlook as to future taxable income was limited due to the relative weight of the negative evidence from its recent cumulative losses. The Company’s conclusion regarding the need for a valuation allowance against its deferred tax assets could change in the future based on improvements in operating performance, which may result in the full or partial reversal of the valuation allowance.   At March 31, 2024, the Company has net operating loss carry forwards and tax credit carry forwards available to offset future federal income tax as follows (in thousands):   Expires March 31,   Federal Net Operating Loss     State Net Operating Losses     Research and Experimentation Tax Credit       (in thousands)   2025   $ —     $ —     $ 8   2026     159       —       2   2027     2,665       —       —   2028     1,612       —       1   Thereafter     2,767       15,333       17   Indefinite     9,962       —       —       $ 17,165     $ 15,333     $ 28     At March 31, 2024, the Company has federal net operating loss carry forwards of $17,165,000, of which $7,203,000 of the losses carried forward were generated prior to the 2018 tax year and have a 20 year carry forward and are available to offset 100% of taxable income. The remaining $9,962,000 of the losses were generated in tax years 2018 or later, which have an unlimited carry forward and are limited to 80% of taxable income. At March 31, 2024, the Company had state tax net operating loss carry forwards available to offset future California state taxable income of $4,959,000. These carry forwards expire March 31, 2037 through 2044. At March 31, 2024, the Company had state tax net operating loss carry forwards available to offset future Hawaii state taxable income of $9,718,000. These carry forwards expire March 31, 2030 through 2044. At March 31, 2024, the Company had $656,000 of net operating loss carry forwards between the remaining states filed in.   The following, in general, represents the open tax years and jurisdictions that the Company used in its evaluation of tax positions. The Company has unused net operating losses carried forward, which cause the statute to remain open up to the amount of unused loss with the statute not begin until the year in which they are used.   Open tax years ending March 31,   Jurisdiction 2021 - 2024   U.S. Federal 2021 - 2024   State of Hawaii 2020 - 2024   State of California

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Note 15 - Related Party Transactions and Balances	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	15. RELATED-PARTY TRANSACTIONS AND BALANCES   In April 2019, the Company obtained an unsecured subordinated loan from Skywords Family Foundation, Inc. (“Skywords”) in the principal amount of $1,500,000 pursuant to a Promissory Note (the “Skywords Note”) executed by the Company in favor of Skywords. Skywords is controlled by the Company’s Chairman of the Board of Directors and largest stockholder. The Skywords Note bore interest at a rate of 1% plus the prime rate (as published by the Wall Street Journal), which was recalculated and payable on a quarterly basis.  The principal amount and any accrued and unpaid interest were due and payable on April 12, 2021.  The proceeds of the Skywords Note were used to pay down accounts payable and for general operating capital purposes.   On April 12, 2021, the Company entered into an Amended and Restated Promissory Note (the “Skywords Amended Note”) with Skywords. The Company and Skywords agreed to amend, restate, replace and otherwise modify without novation, the Skywords Note in order to convert $500,000 of the outstanding principal amount into revolving loans that may be prepaid and reborrowed from time to time in principal amounts not to exceed $500,000, extend the maturity date by three years, adjust the interest rate to reflect a floor of 5% and secure Skywords’ interest by granting a security interest in substantially all of the Company’s personal property assets, subject to limited exceptions (the “Collateral”). On April 12, 2021, concurrently with the conversion, the Company repaid in cash to Skywords the principal amount of $500,000 plus accrued interest to date of $1,900. The Skywords Amended Note bears interest at a rate of 1% plus the prime rate (as published by the Wall Street Journal), which will be recalculated and payable on a quarterly basis, provided that at no time shall the annual interest rate be less than 5%. The Company may prepay the Skywords Amended Note at any time without penalty.   On April 12, 2021, in connection with the grant of a security interest in the Collateral, the Company also entered into an Intercreditor and Subordination Agreement with the Bank and Skywords. The Company is indebted to the Bank pursuant to two Term Loans and a Credit Agreement, each of which granted the Bank a security interest in substantially all of the Company’s personal property assets. The Bank’s security interest in the Company’s personal property assets ranks senior to Skywords’ security interest in the Collateral, and the Intercreditor and Subordination Agreement generally governs the relationship between the Bank and Skywords as secured lenders to the Company and includes customary terms.   On December 14, 2022, the Company entered into a First Amendment (the “Amendment”) to the Skywords Amended Note. The Amendment extends the maturity date to April 12, 2025 and increases the revolving amount that the Company may borrow from time to time under the Skywords Note from $500,000 to $1,000,000. All other terms of the Skywords Note remain the same.   On August 14, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the Skywords Amended Note. The Second Amendment increased the revolving amount that the Company may borrow from time to time under the Skywords Amended Note from $1,000,000 to $2,000,000. All other terms of the Skywords Amended Note remain the same.   At both March 31, 2024 and 2023, the Skywords Note principal balance was $1,000,000, and was included in long-term debt on the Consolidated Balance Sheets. At March 31, 2024 and 2023, the balance on the Revolver was $1,250,000 and $500,000, respectively, and was included in line of credit – related party on the Consolidated Balance Sheets. At March 31, 2024 and 2023, the interest rates were 8.5% and 7.5%, respectively.

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Note 16 - Subsequent Events	12 Months Ended
	Mar. 31, 2024
Notes to Financial Statements
Subsequent Events [Text Block]	16. SUBSEQUENT EVENTS   The Company had no additional subsequent events.

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Insider Trading Arrangements	12 Months Ended
	Mar. 31, 2024 shares
Insider Trading Arr Line Items
Material Terms of Trading Arrangement [Text Block]	Item 9B. Other Information   On March 6, 2024, Michael Davis, the Chairman of the Company’s Board of Directors, entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan provides for the purchase of 315,000 shares of Cyanotech common stock and will expire on June 7, 2025, subject to early termination for certain specified events set forth in the plan.
Non-Rule 10b5-1 Arrangement Adopted [Flag]	false
Rule 10b5-1 Arrangement Terminated [Flag]	false
Non-Rule 10b5-1 Arrangement Terminated [Flag]	false
Trading Arrangement Adoption Date	March 6, 2024
Trading Arrangement, Individual Name	Michael Davis
Trading Arrangement, Individual Title	Chairman of the Company’s Board of Directors
Rule 10b5-1 Arrangement Adopted [Flag]	true
Trading Arrangement, Securities Aggregate Available Amount	315,000
Trading Arrangement Expiration Date	June 7, 2025

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Significant Accounting Policies (Policies)	12 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Use of Estimates, Policy [Policy Text Block]	Use of Estimates   The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of any contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods reported.  Management reviews these estimates and assumptions periodically and reflects the effect of revisions in the period that they are determined to be necessary.  Actual results could differ from those estimates and assumptions.
Fair Value of Financial Instruments, Policy [Policy Text Block]	Financial Instruments and Fair Value   The Company applies a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:     Level 1 — Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.   Level 2 — Inputs to the valuation methodology include:     ● Quoted prices for similar assets or liabilities in active markets;   ● Quoted prices for identical or similar assets or liabilities in inactive markets;   ● Inputs other than quoted prices that are observable for the asset or liability; and   ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means.    If the asset or liability has a specified contractual term, the Level 2 input must be observable for substantially the full term of the asset or liability.     Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value.   Cash, Accounts Receivable, Accounts Payable, Accrued Expenses and Customer Deposits - Due to the short-term nature of these instruments, management believes that the carrying amounts approximate fair value.   Line of Credit, Revolver, Short-Term and Long-Term Debt - The carrying amount of our line of credit, Revolver and short and long-term debt approximates fair value as interest rates applied to the underlying debt are adjusted quarterly to market interest rates, which approximate current interest rates for similar debt instruments of comparable maturities.
Cash and Cash Equivalents, Policy [Policy Text Block]	Cash   Cash primarily consists of cash on hand and cash in bank deposits.
Concentration Risk, Credit Risk, Policy [Policy Text Block]	Concentration Risk   The Company maintains its cash accounts in banks located in Hawaii, which are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank.  The Company had cash balances at March 31, 2024 and 2023 that exceeded the balance insured by the FDIC by $166,000 and $422,000, respectively.  A significant portion of revenues and accounts receivables are derived from a few major customers. For the year ended March 31, 2024, two customers individually accounted for 34% and 17% of the Company’s total net sales and for the year ended March 31, 2023, two customers individually accounted for 34% and 6% of the Company’s total net sales. Two customers accounted for 72% and 46% of the Company’s accounts receivable balance as of March 31, 2024 and 2023, respectively.
Accounts Receivable [Policy Text Block]	Accounts Receivable   Accounts receivable are recorded at the invoiced amount and do not accrue interest. Credit is extended based on evaluation of the customer's financial condition. Collateral is not required. The allowance for credit losses reflects management’s best estimate of expected credit losses inherent in the accounts receivable balance. Management determines the allowance based on historical experience, specifically identified nonpaying accounts and other currently available evidence. Management reviews its customer account balances monthly with a focus on significant individual past due balances over 90 days. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers or otherwise.
Inventory, Policy [Policy Text Block]	Inventories   Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. Net realizable value is defined as estimated sales price less cost to dispose. Inventory costs include materials, labor, overhead and third-party costs. Management reviews and writes down inventory for known or expected inventory obsolescence based on product age and quality which may affect salability.   The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, fixed production overhead costs, idle facilities, freight handling costs and spoilage, as an expense in the period incurred, without adjusting overhead absorption rates. Normal production capacity is defined as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance.
Property, Plant and Equipment, Policy [Policy Text Block]	Equipment and Leasehold Improvements   Equipment and leasehold improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives for equipment and furniture and fixtures, and the shorter of the land lease term (see Notes 4 and 7) or estimated useful lives for leasehold improvements as follows (in years):   Equipment 3 to 10 Furniture and fixtures 3 to 7 Leasehold improvements 10 to 25   Capital project costs are accumulated in construction-in-progress until completed, at which time the costs are transferred to the relevant asset and commence depreciation. Repairs and Maintenance costs are expensed in the period incurred. Repairs and maintenance that significantly increase the useful life or value of the asset are capitalized and depreciated over the remaining life of the asset. The Company capitalizes interest cost incurred on funds used to construct property and equipment. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life.
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]	Impairment of Long-Lived Assets   Management reviews long-lived assets, such as equipment, leasehold improvements and purchased intangibles subject to amortization for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized to the extent that the carrying amount exceeds the asset’s fair value. Assets to be disposed of and related liabilities would be separately presented in the consolidated balance sheet. Assets to be disposed of would be reported at the lower of the carrying value or fair value less costs to sell and would not be depreciated.
Asset Retirement Obligation [Policy Text Block]	Accounting for Asset Retirement Obligations   Management evaluates quarterly the potential liability for asset retirement obligations under the Company’s lease for its principal facility and corporate headquarters. No liability has been recognized as of March 31, 2024 and 2023 (see Note 7).
Revenue [Policy Text Block]	Revenue Recognition   The Company records revenue based on the five-step model which includes: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when the performance obligations are satisfied. Substantially all of the Company’s revenue is generated by fulfilling orders for the purchase of its microalgal dietary supplements to retailers, wholesalers, or direct to consumers via online channels, with each order considered to be a distinct performance obligation. These orders may be formal purchase orders, verbal phone orders, e-mail orders or orders received online. Shipping and handling activities for which the Company is responsible under the terms and conditions of the order are not accounted for as performance obligations but as fulfillment costs. These activities are required to fulfill the Company’s promise to transfer the goods and are expensed when revenue is recognized.    Revenue is measured as the net amount of consideration expected to be received in exchange for fulfilling a performance obligation. The Company has elected to exclude sales, use and similar taxes from the measurement of the transaction price.  The amount of consideration expected to be received and revenue recognized includes estimates of variable consideration, which includes costs for trade promotion programs, coupons, returns and early payment discounts.  Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. The Company reviews and updates these estimates at the end of each reporting period and the impact of any adjustments are recognized in the period the adjustments are identified. In assessing whether collection of consideration from a customer is probable, the Company considers the customer's ability and intent to pay that amount of consideration when it is due. Payment of invoices is due as specified in the underlying customer agreement, typically 30 days from the invoice date, which occurs on the date of transfer of control of the products to the customer. Revenue is recognized at the point in time that control of the ordered products is transferred to the customer. Generally, this occurs when the product is delivered, or in some cases, picked up from one of the Company’s distribution centers by the customer. Revenue from extraction services is recognized when control is transferred upon completion of the extraction process.   Customer contract liabilities consist of customer deposits received in advance of fulfilling an order and are shown separately on the consolidated balance sheets. During the years ended March 31, 2024 and 2023, the Company recognized $26,000 and $94,000, respectively, of revenue from deposits that were included in contract liabilities as of March 31, 2023 and 2022, respectively. The Company’s contracts have a duration of one year or less and therefore, the Company has elected the practical expedient of not disclosing revenues allocated to partially unsatisfied performance obligations.
Research and Development Expense, Policy [Policy Text Block]	Research and Development   Research and development costs are expensed as incurred and consist primarily of labor, benefits and outside research.
Advertising Cost [Policy Text Block]	Advertising   Advertising costs are expensed as incurred. Total advertising expense for the years ended March 31, 2024, 2023 and 2022 was $1,308,000, $1,513,000, and $1,458,000, respectively.
Income Tax, Policy [Policy Text Block]	Income Taxes   Income taxes are accounted for under the asset and liability method. The asset and liability method require the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using income tax rates applicable to the period in which the tax difference is expected to reverse.   Judgment is required in determining any valuation allowance recorded against deferred tax assets, specifically net operating loss carryforwards, tax credit carryforwards and deductible temporary differences that may reduce taxable income in future periods. In assessing the need for a valuation allowance, the Company considers all available evidence including past operating results, estimates of future taxable income and tax planning opportunities. In the event the Company changes its determination as to the amount of deferred tax assets that can be realized, it will adjust its valuation allowance with a corresponding impact to income tax expense in the period in which such determination is made.   In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including resolution of related appeals or litigation processes, based on the technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold, the tax position is measured and recognized in the Company’s financial statements as the largest amount of tax benefit that, in management’s judgment, is greater than 50% likely of being realized upon settlement. At March 31, 2024 and 2023, there were no liabilities for income tax associated with unrecognized tax benefits.   The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest expense in its consolidated statements of operations. During the years ended March 31, 2024 and 2023, there were no accruals for the payment of interest and penalties related to uncertain tax positions.
Share-Based Payment Arrangement [Policy Text Block]	Share-Based Compensation   The Company accounts for share-based payment arrangements using fair value. The Company currently has no liability-classified awards. Equity-classified awards, including grants of restricted stock, restricted stock units and employee stock options, are measured at the grant-date fair value of the award and are not subsequently remeasured unless an award is modified. The cost of equity-classified awards is recognized in the statement of operations over the period during which an employee is required to provide the service in exchange for the award, or the vesting period.  All stock-based compensation for restricted stock, restricted stock units and stock options has been classified as general and administrative expense in the consolidated statement of operations.   The Company utilizes the Black-Scholes option pricing model to determine the fair value of each option award. Expected volatilities are based on the historical volatility of the Company’s common stock over a period consistent with that of the expected term of the options. The expected term of the options is estimated based on factors such as vesting periods, contractual expiration dates and historical exercise behavior. The risk-free rates for periods within the contractual life of the options are based on the yields of U.S. Treasury instruments with terms comparable to the estimated option terms. The forfeiture rate of the options is estimated at the time of the grant and is based on historical forfeitures of similar grants.  The fair value of restricted stock units is the closing stock price on the grant date.
Earnings Per Share, Policy [Policy Text Block]	Per Share Amounts   Basic earnings (loss) per common share is calculated by dividing net income (loss) for the year by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by dividing net income for the year by the sum of the weighted average number of common shares outstanding during the year plus the number of potentially dilutive common shares (“dilutive securities”) that were outstanding during the year. Dilutive securities include restricted stock units and stock options granted pursuant to the Company’s stock option plans. Dilutive securities related to the Company’s stock option plans are included in the calculation of diluted earnings per common share using the treasury stock method. Potentially dilutive securities are excluded from the computation of earnings per share in periods in which a net loss is reported, as their effect would be antidilutive. A reconciliation of the numerators and denominators of the basic and diluted income (loss) per common share calculations for the years ended March 31, 2024, 2023 and 2022 is presented in Note 11.
Reclassification, Comparability Adjustment [Policy Text Block]	Reclassifications   Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation.  There was no impact on previously reported financial statements for the periods presented.
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Accounting Pronouncements   In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses” (“Topic 326”), which was subsequently amended in November 2018 through ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses” (“CECL”). CECL requires entities to estimate lifetime expected credit losses for trade and other receivables, net investment in leases, financing receivables, debt securities and other instruments, which will result in earlier recognition of credit losses. The guidance is effective for interim and annual periods beginning after December 15, 2022. The Company adopted this standard as of April 1, 2023, however, due to the relatively short-term nature of its accounts receivable and history of limited bad debt expense, the impact of this guidance was not significant to the Company’s consolidated financial statements and related disclosure. The Company will continue to evaluate the impact of CECL going forward.   In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 28): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosure of incremental segment information on an annual and interim basis.  ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and it requires retrospective application to all prior periods presented in the financial statements.  The Company is currently evaluating the impact that ASU 2023-07 will have on the presentation of its consolidated financial statements.   In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosure” (“ASU 2023-09”), which enhances the transparency and decision usefulness of income tax disclosures. Adjustments to the annual disclosure of income taxes include: a tabulate rate reconciliation comprised of eight specific categories; income taxes paid, disaggregated between significant federal, state, and foreign jurisdictions; eliminating requirements to disclose the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made; and adds a requirement to disclose income (or loss) from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) from continuing operations disaggregated between domestic and foreign. ASU 2023-09 is effective for public business entities for fiscal years beginning on or after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-09 should be applied on a prospective basis. Retrospective application is permitted. The company is currently evaluating ASU 2023-09 to determine its impact on the Company’s disclosures.

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Note 2 - Significant Accounting Policies (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Property, Plant, and Equipment, Estimated Useful Lives [Table Text Block]	Equipment 3 to 10 Furniture and fixtures 3 to 7 Leasehold improvements 10 to 25

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Note 3 - Inventories (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Schedule of Inventory, Current [Table Text Block]	2024     2023       (in thousands)   Raw materials   $ 1,149     $ 1,887   Work in process     2,195       2,049   Finished goods     3,658       6,502   Supplies     311       269   Inventories   $ 7,313     $ 10,707

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Note 4 - Equipment and Leasehold Improvements (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Property, Plant and Equipment [Table Text Block]	2024     2023       (in thousands)   Equipment   $ 21,904     $ 21,649   Leasehold improvements     15,075       15,038   Furniture and fixtures     419       407         37,398       37,094   Less accumulated depreciation and amortization     (27,500 )     (25,947 ) Construction in-progress     211       219   Equipment and leasehold improvements, net   $ 10,109     $ 11,366

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Note 5 - Line of Credit and Term Debt (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Schedule of Long-Term Debt Instruments [Table Text Block]	2024     2023       (in thousands)   Line of credit – bank   $ —     $ 1,540   Short-term debt – bank     1,240       —   Line of credit – related party     1,250       500   Long-term debt     3,220       3,461   Long-term debt – related party     1,000       1,000   Unamortized debt issuance costs     (80 )     (92 ) Less current maturities     (5,630 )     (5,409 ) Total long-term debt, less current maturities   $ 1,000     $ 1,000
Schedule of Maturities of Long-Term Debt [Table Text Block]	Fiscal year ending March 31   (in thousands)   2025   $ 4,460   2026     1,000   Total principal payments   $ 5,460

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Note 6 - Accrued Expenses (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Schedule of Accrued Liabilities [Table Text Block]	2024     2023       (in thousands)   Wages   $ 234     $ 215   Bonus and profit sharing     —       143   Vacation     327       393   Interest and legal     32       30   Other accrued expenses     164       320   Total accrued expenses   $ 757     $ 1,101

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Note 7 - Operating Leases (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Schedule of Supplement Balance Sheet Information for Operating Lease [Table Text Block]	Operating leases   Balance Sheet Classification   March 31, 2024     March 31, 2023           (in thousands)   Right-of-use assets   Operating lease right-of-use assets   $ 6,149     $ 6,149   Accumulated lease amortization   Operating lease right-of-use assets     (1,865 )     (1,373 )                       Total right-of-use assets   $ 4,284     $ 4,776                         Current lease liabilities   Operating lease obligations   $ 530     $ 483   Non-current lease liabilities   Long-term operating lease obligations     3,744       4,275                         Total lease liabilities   $ 4,274     $ 4,758
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]	Fiscal year ending March 31   (in thousands)   2025   $ 820   2026     797   2027     798   2028     683   2029     416   Thereafter     2,344   Total undiscounted lease payments     5,858   Less: present value discount     (1,584 ) Total lease liabilities balance   $ 4,274

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Note 9 - Share-based Compensation (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Schedule of Share-based Compensation Shares Authorized Available and Outstanding by Plan [Table Text Block]	As of March 31, 2024       Authorized     Available     Outstanding   2016 Plan     1,300,000       635,679       415,820   2014 Directors Plan     650,000       33,220       12,000   Total     1,950,000       668,899       427,820
Share-Based Payment Arrangement, Option, Activity [Table Text Block]	Option Activity   Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (in years)     Aggregate Intrinsic Value   Outstanding at March 31, 2021     374,300     $ 3.64       3.9     $ 129,700   Granted     50,000       2.96                   Forfeited     (5,000 )     5.21                   Expired     (166,800 )     3.84                   Outstanding at March 31, 2022     252,500     $ 3.34       6.5     $ 159,650   Granted     50,000       3.43                   Expired     (49,500 )     5.80                   Outstanding at March 31, 2023     253,000     $ 2.88       7.5     $ —   Granted     50,000       0.79                   Expired     (6,000 )     5.56                   Outstanding at March 31, 2024     297,000     $ 2.47       7.1     $ —   Exercisable at March 31, 2024     172,000     $ 2.76       6.3     $ —
Schedule of Nonvested Share Activity [Table Text Block]	Nonvested Options   Shares     Weighted Average Grant-Date Fair Value   Nonvested at March 31, 2023     141,667     $ 1.55   Granted     50,000       0.48   Vested     (66,667 )     1.49   Nonvested at March 31, 2024     125,000     $ 1.16
Share-Based Payment Arrangement, Option, Exercise Price Range [Table Text Block]	Outstanding Options     Exercisable Options   Range of Exercise Prices     Number of Shares     Remaining Life (Years)     Weighted Average Exercise Price     Number of Shares     Weighted Average Exercise Price   $0.79 - $2.20       55,000       9.1     $ 0.91       5,000     $ 2.11   $2.21 - $2.34       100,000       6.3     $ 2.29       75,000     $ 2.29   $2.35 - $3.20       80,000       6.9     $ 2.80       63,334     $ 2.76   $3.21 - $5.91       62,000       7.0     $ 3.73       28,666     $ 4.09   Total stock options       297,000       7.1     $ 2.74       172,000     $ 2.76
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	2024     2023     2022   Exercise Price   $ 0.48     $ 1.94     $ 1.60   Volatility     61.63 %     57.47 %     58.23 % Risk Free Rate     4.34 %     3.36 %     1.06 % Vesting Period (in years)     3.0       3.0       3.0   Forfeiture Rate     16 %     19 %     0 % Expected Term (in years)     6.0       6.0       6.0   Dividend Rate     0 %     0 %     0 %
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]	Nonvested Restricted Stock Units   Shares     Weighted Average Grant Price   Nonvested restricted stock units at March 31, 2021     28,188     $ 2.38   Granted     38,672     $ 2.91   Vested     (46,963 )   $ 2.85   Forfeited     (5,432 )   $ 2.51   Nonvested restricted stock units at March 31, 2022     14,465     $ 2.22   Granted     66,423     $ 3.13   Vested     (8,312 )   $ 2.35   Forfeited     (2,242 )   $ 2.91   Nonvested restricted stock units at March 31, 2023     70,334     $ 3.04   Granted     204,964     $ 0.49   Vested     (135,272 )     1.00   Forfeited     (9,206 )   $ 2.12   Nonvested restricted stock units at March 31, 2024     130,820     $ 1.23

v3.24.1.1.u2

Note 11 - Earnings (Loss) Per Share (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Net Income (loss) (Numerator)     Shares (Denominator)     Per Share Amount       (in thousands, except per share amounts)   Year ended March 31, 2024:                         Basic and diluted loss per share   $ (5,267 )     6,531     $ (0.81 ) Year ended March 31, 2023:                         Basic and diluted loss per share   $ (3,440 )     6,244     $ (0.55 ) Year ended March 31, 2022:                         Basic income per share   $ 2,154       6,157     $ 0.35   Effective dilutive securities—Common stock options and restricted stock units     —       11       —   Diluted income per share   $ 2,154       6,168     $ 0.35

v3.24.1.1.u2

Note 13 - Product Line and Geographic Information (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Revenue from External Customers by Products and Services [Table Text Block]	2024     2023     2022   Packaged sales                         Astaxanthin packaged   $ 13,613     $ 12,227     $ 14,931   Spirulina packaged     5,779       4,814       7,604   Total packaged sales     19,392       17,041       22,535                             Bulk sales                         Astaxanthin bulk     1,491       1,982       2,447   Spirulina bulk     1,572       3,541       10,386   Total bulk sales     3,063       5,523       12,833                             Contract extraction and R&D services revenue     616       614       600   Total net sales   $ 23,071     $ 23,178     $ 35,968
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]	2024     2023     2022       (dollars in thousands)   Net sales(1):                                                 United States   $ 18,886       82 %   $ 17,031       73 %   $ 24,468       68 % Asia / Pacific     1,247       5 %     2,164       9 %     7,102       20 % Europe     1,596       7 %     2,440       11 %     3,183       9 % Other     1,342       6 %     1,543       7 %     1,215       3 %     $ 23,071       100 %   $ 23,178       100 %   $ 35,968       100 %

v3.24.1.1.u2

Note 14 - Income Taxes (Tables)	12 Months Ended
	Mar. 31, 2024
Notes Tables
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]	2024     2023     2022       (in thousands)   Current:                         Federal   $ —     $ —     $ —   State     (7 )     (18 )     (28 ) Total current (expense) benefit     (7 )     (18 )     (28 ) Deferred:                         Federal     —       —       —   State     —       —       —   Total deferred expense     —       —       —   Income tax expense   $ (7 )   $ (18 )   $ (28 )
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]	2024     2023     2022       (in thousands)   Tax provision at federal statutory income tax rate   $ 1,457     $ 952     $ (591 ) Stock-based compensation     (44 )     (23 )     (16 ) Decrease (increase) in valuation allowance     (1,404 )     (518 )     557   State and local income taxes, net of federal tax benefit     (6 )     (12 )     (2 ) Expired losses     —       (380 )     —   Deferred tax true-up     (25 )     (24 )     34   Other, net     15       (13 )     (10 ) Income tax expense   $ (7 )   $ (18 )   $ (28 )
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]	2024     2023       (in thousands)   Deferred tax assets:                 Net operating loss carry forwards   $ 4,471     $ 3,570   Inventory     213       50   Compensation accrual     109       177   Tax credit carry forwards     28       28   Interest limitation     268       108   Operating lease right-of-use assets     1,184       1,323   Section 174 Costs     223       118   Other     9       26   Gross deferred tax assets     6,505       5,400   Less valuation allowance     (4,394 )     (2,990 ) Net deferred tax assets     2,111       2,410                     Deferred tax liabilities:                 Operating lease obligations     (1,186 )     (1,328 ) Depreciation and amortization     (925 )     (1,082 ) Net deferred tax liabilities     (2,111 )     (2,410 ) Net deferred tax assets (liabilities)   $ —     $ —
Schedule of Operating Loss and Tax Credit Carry Forwards [Table Text Block]	Expires March 31,   Federal Net Operating Loss     State Net Operating Losses     Research and Experimentation Tax Credit       (in thousands)   2025   $ —     $ —     $ 8   2026     159       —       2   2027     2,665       —       —   2028     1,612       —       1   Thereafter     2,767       15,333       17   Indefinite     9,962       —       —       $ 17,165     $ 15,333     $ 28
Summary of Income Tax Contingencies [Table Text Block]	Open tax years ending March 31,   Jurisdiction 2021 - 2024   U.S. Federal 2021 - 2024   State of Hawaii 2020 - 2024   State of California

v3.24.1.1.u2

Note 1 - Organization and Basis of Presentation (Details Textual) - USD ($)		12 Months Ended
	Dec. 15, 2023	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2023	Oct. 13, 2023	Sep. 30, 2023	Aug. 14, 2023	Dec. 31, 2022	Apr. 30, 2019	Aug. 30, 2016
Cash and Cash Equivalents, at Carrying Value		$ 707,000	$ 974,000
Working Capital (Deficit)		2,037,000	5,393,000
Line of Credit, Current		0	1,540,000
Lines of Credit, Related Party, Current		1,250,000	500,000
Long-term Debt and Capital Lease Obligations, Current and Noncurrent		3,220,000
Proceeds from Issuance of Common Stock		388,000	0	$ 0
Unsecured Subordinated Loan From Skywords [Member]
Debt Instrument, Face Amount		1,000,000	1,000,000							$ 1,500,000
Private Placement [Member]
Stock Issued During Period, Shares, New Issues (in shares)	400,000
Shares Issued, Price Per Share (in dollars per share)	$ 1
Legal Fees	$ 12,000	12,000
Proceeds from Issuance of Common Stock	$ 388,000
First Foundation Bank [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		2,000,000									$ 2,000,000
Line of Credit, Current		1,240,000	1,540,000			$ 1,480,000
Related Party 1 [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity					$ 2,000,000		$ 2,000,000	$ 2,000,000	$ 1,000,000
Lines of Credit, Related Party, Current		$ 1,250,000	$ 500,000

v3.24.1.1.u2

Note 2 - Significant Accounting Policies (Details Textual)	12 Months Ended
	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)
Cash, Uninsured Amount	$ 166,000	$ 422,000
Contract with Customer, Liability, Revenue Recognized	26,000	94,000
Advertising Expense	1,308,000	1,513,000	$ 1,458,000
Unrecognized Tax Benefits	0	0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	$ 0	$ 0
Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Number of Major Customers	2	2
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Number 1 [Member]
Concentration Risk, Percentage	34.00%	34.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Number 2 [Member]
Concentration Risk, Percentage	17.00%	6.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Number of Major Customers	2	2
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Two Customers [Member]
Concentration Risk, Percentage	72.00%	46.00%

v3.24.1.1.u2

Note 2 - Significant Accounting Policies - Estimated Useful Lives (Details)	Mar. 31, 2024
Equipment [Member] | Minimum [Member]
Estimated useful lives (Year)	3 years
Equipment [Member] | Maximum [Member]
Estimated useful lives (Year)	10 years
Furniture and Fixtures [Member] | Minimum [Member]
Estimated useful lives (Year)	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Estimated useful lives (Year)	7 years
Leasehold Improvements [Member] | Minimum [Member]
Estimated useful lives (Year)	10 years
Leasehold Improvements [Member] | Maximum [Member]
Estimated useful lives (Year)	25 years

v3.24.1.1.u2

Note 3 - Inventories (Details Textual) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Inventory Abnormal Production Costs	$ 206,000	$ 90,000	$ 0
Non Inventoriable Fixed Costs	467,000	269,000	136,000
Spirulina Products [Member]
Inventory Write-down	$ 256,000	$ 0	$ 0

v3.24.1.1.u2

Note 3 - Inventories - Components of Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Raw materials	$ 1,149	$ 1,887
Work in process	2,195	2,049
Finished goods	3,658	6,502
Supplies	311	269
Inventories	$ 7,313	$ 10,707

v3.24.1.1.u2

Note 4 - Equipment and Leasehold Improvements (Details Textual) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Asset Impairment Charges	$ 0	$ 5,000	$ 21,000
Depreciation, Depletion and Amortization	$ 1,589,000	$ 1,655,000	$ 1,599,000

v3.24.1.1.u2

Note 4 - Equipment and Leasehold Improvements - Components of Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Equipment and leasehold improvements, gross	$ 37,398	$ 37,094
Less accumulated depreciation and amortization	(27,500)	(25,947)
Construction in-progress	211	219
Equipment and leasehold improvements, net	10,109	11,366
Equipment [Member]
Equipment and leasehold improvements, gross	21,904	21,649
Leasehold Improvements [Member]
Equipment and leasehold improvements, gross	15,075	15,038
Furniture and Fixtures [Member]
Equipment and leasehold improvements, gross	$ 419	$ 407

v3.24.1.1.u2

Note 5 - Line of Credit and Term Debt (Details Textual) - USD ($)							1 Months Ended	12 Months Ended				37 Months Ended
	Mar. 31, 2024	Oct. 13, 2023	Mar. 31, 2023	Apr. 12, 2021	Aug. 30, 2016	Aug. 14, 2012	Apr. 30, 2021	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2020	Apr. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Aug. 14, 2023	Jun. 21, 2023	Dec. 31, 2022	Dec. 14, 2022	Apr. 30, 2019
Line of Credit, Current	$ 0		$ 1,540,000					$ 0	$ 1,540,000
Long-Term Debt	5,460,000							5,460,000
Long-term Debt and Capital Lease Obligations, Current and Noncurrent	3,220,000							3,220,000
Debt Issuance Costs, Current, Net	80,000		92,000					80,000	92,000
Long-term Debt, Current Maturities, Total	5,630,000		5,409,000					5,630,000	5,409,000
Interest Paid, Excluding Capitalized Interest, Operating Activities								583,000	408,000	$ 342,000
Lines of Credit, Related Party, Current	$ 1,250,000		$ 500,000					1,250,000	500,000
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]	Prime Rate [Member]	Prime Rate [Member]	Prime Rate [Member]	Prime Rate [Member]	Prime Rate [Member]		Prime Rate [Member]				Prime Rate [Member]	Prime Rate [Member]
Unsecured Subordinated Loan [Member]
Long-Term Debt, Gross	$ 1,000,000		$ 1,000,000					$ 1,000,000	$ 1,000,000
Term Loan Agreement, Maturing on August 14, 2032 [Member]
Debt Instrument Reference Rate	8.50%		7.50%					8.50%	7.50%
Debt Instrument, Basis Spread on Variable Rate						1.00%
Proceeds from Issuance of Debt						$ 5,500,000
Debt Instrument Interest Payment Period (Month)						12 months
Debt Instrument Amortization Period (Year)						19 years
Long-term Debt and Capital Lease Obligations, Current and Noncurrent	$ 3,220,000		$ 3,461,000					$ 3,220,000	$ 3,461,000
Debt Instrument One Time Origination and Guaranty Fees								$ 214,500
Debt Instrument Annual Renewal Fee Payable Percentage	0.25%							0.25%
Debt Instrument Guaranteed Portion	80.00%							80.00%
Debt Covenant, Further Advances of Credit Agreement, Immediate Freeze																$ 1,770,000
Term Loan Agreement, Promissory Note One [Member]
Proceeds from Issuance of Debt						$ 2,250,000
Term Loan Agreement, Promissory Note Two [Member]
Proceeds from Issuance of Debt						$ 3,250,000
Skywords Note [Member]
Debt Instrument Reference Rate	8.50%		7.50%					8.50%	7.50%
Debt Instrument, Basis Spread on Variable Rate							1.00%
Repayments of Long-term Debt, Total				$ 500,000			$ 500,000
Interest Paid, Excluding Capitalized Interest, Operating Activities				$ 1,900			1,900
Skywords Note [Member] | Unsecured Subordinated Loan [Member]
Debt Instrument, Basis Spread on Variable Rate											1.00%
Long-Term Debt	$ 1,000,000		$ 1,000,000					$ 1,000,000	$ 1,000,000
Debt Instrument, Face Amount											$ 1,500,000								$ 1,500,000
Long-term Debt, Current Maturities, Total							$ 500,000
Long-Term Debt, Gross	$ 1,000,000		$ 1,000,000					1,000,000	$ 1,000,000
Skywords Amended Note [Member]
Debt Instrument, Basis Spread on Variable Rate				1.00%
Debt Instrument, Floor Interest Rate				5.00%			5.00%
Debt Instrument, Face Amount				$ 500,000														$ 1,000,000
Minimum [Member] | Term Loan Agreement, Maturing on August 14, 2032 [Member]
Debt Instrument, Interest Rate During Period						5.50%
Minimum [Member] | Skywords Note [Member]
Debt Instrument, Interest Rate During Period							5.00%
First Foundation Bank [Member] | Term Loan Converted From Line of Credit [Member]
Debt Instrument, Basis Spread on Variable Rate	2.00%	2.00%
Debt Instrument, Periodic Payment		$ 40,000
Debt Instrument, Floor Interest Rate		7.00%
Long-Term Debt	$ 1,240,000							1,240,000
Debt Instrument, Interest Rate During Period	8.50%
First Foundation Bank [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage					5.25%
First Foundation Bank [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,000,000				$ 2,000,000			2,000,000
Debt Instrument Reference Rate			8.00%						8.00%
Debt Instrument, Basis Spread on Variable Rate					2.00%
Line of Credit, Current	$ 1,240,000	$ 1,480,000	$ 1,540,000					$ 1,240,000	$ 1,540,000
Long-Term Line of Credit			$ 1,540,000						$ 1,540,000
Related Party 1 [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity													$ 2,000,000	$ 2,000,000	$ 2,000,000		$ 1,000,000
Debt Instrument, Interest Rate, Stated Percentage	8.50%		7.50%					8.50%	7.50%
Lines of Credit, Related Party, Current	$ 1,250,000		$ 500,000					$ 1,250,000	$ 500,000

v3.24.1.1.u2

Note 5 - Line of Credit and Term Debt - Summary of Line of Credit and Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Short-term debt – bank	$ 1,240	$ 0
Unamortized debt issuance costs	(80)	(92)
Less current maturities	(5,630)	(5,409)
Total long-term debt, less current maturities	1,000	1,000
Line of Credit Excluding Related Party [Member]
Long-term debt	0	1,540
Line of Credit, Related Party [Member]
Long-term debt	1,250	500
Long-term Debt, Excluding Related Party Debt [Member]
Long-term debt	3,220	3,461
Unsecured Subordinated Loan [Member]
Long-term debt	$ 1,000	$ 1,000

v3.24.1.1.u2

Note 5 - Line of Credit and Term Debt - Future Payments (Details) $ in Thousands	Mar. 31, 2024 USD ($)
2025	$ 4,460
2026	1,000
Total principal payments	$ 5,460

v3.24.1.1.u2

Note 6 - Accrued Expenses - Components of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Wages	$ 234	$ 215
Bonus and profit sharing	0	143
Vacation	327	393
Interest and legal	32	30
Other accrued expenses	164	320
Total accrued expenses	$ 757	$ 1,101

v3.24.1.1.u2

Note 7 - Operating Leases (Details Textual)	12 Months Ended
	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)
Operating Leases, Expense, Contingent Rentals	$ 0	$ 73,000
Operating Lease, Weighted Average Remaining Lease Term (Year)	9 years 1 month 6 days	9 years 9 months 18 days
Operating Lease, Weighted Average Discount Rate, Percent	7.30%	7.30%
Operating Lease, Cost	$ 818,000	$ 719,000
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability		1,429,000
Operating Lease, Expense	685,000	506,000	$ 713,000
State and Local Jurisdiction [Member]
Real Estate Tax Expense	$ 38,000	$ 37,000	$ 30,000
Solar Lease for Buildings [Member]
Leases, Number of Lease Properties	2
Lessee, Operating Lease, Term of Contract (Year)	84 months
Equipment [Member]
Lessee, Operating Lease, Term of Contract (Year)	48 months
HAWAII1 [Member]
Leases, Number of Lease Properties	2
HAWAII1 [Member] | Commercial Lease Expiring in 2035 [Member]
Lessee, Operating Lease, Term of Contract (Year)	40 years
HAWAII1 [Member] | Commercial Lease Expiring in 2037 [Member]
Lessee, Operating Lease, Term of Contract (Year)	19 years

v3.24.1.1.u2

Note 7 - Operating Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Right-of-use assets	$ 6,149	$ 6,149
Accumulated lease amortization	(1,865)	(1,373)
Total right-of-use assets	4,284	4,776
Current lease liabilities	530	483
Non-current lease liabilities	3,744	4,275
Total lease liabilities	$ 4,274	$ 4,758

v3.24.1.1.u2

Note 7 - Operating Leases - Operating Leases Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
2025	$ 820
2026	797
2027	798
2028	683
2029	416
Thereafter	2,344
Total undiscounted lease payments	5,858
Less: present value discount	(1,584)
Total lease liabilities balance	$ 4,274	$ 4,758

v3.24.1.1.u2

Note 8 - Other Commitments and Contingencies (Details Textual) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Purchase Obligation	$ 808,000	$ 822,000	$ 1,105,000
Purchase Obligation Agreement, Term (Year)	10 years

v3.24.1.1.u2

Note 9 - Share-based Compensation (Details Textual)			12 Months Ended
	Oct. 13, 2023 shares	Apr. 03, 2023 shares	Mar. 31, 2024 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 31, 2022 USD ($) $ / shares shares	Aug. 25, 2016 shares	Aug. 28, 2014 shares
Number of Shareholder Approved Share-based Compensation Plans			2
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)			1,950,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)			668,899
Share Price (in dollars per share) | $ / shares			$ 0.29	$ 0.88	$ 3.37
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period, Intrinsic Value | $			$ 0	$ 0	$ 0
ShareBased Compensation Arrangement By Share Based Payment Award Weighted Average Grant Date Fair Value Options Granted | $			24,000	97,000	80,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $			99,000	67,000	40,000
Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Expense | $			98,000	90,000	63,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $			$ 58,000	$ 124,000	$ 139,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			1 year 3 months 18 days	1 year 7 months 6 days	2 years 1 month 6 days
Restricted Stock [Member] | Share-Based Payment Arrangement, Nonemployee [Member]
Share-Based Payment Arrangement, Expense | $			$ 126,000	$ 158,000	$ 158,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)			159,493	64,489	55,438
Restricted Stock [Member] | Share-Based Payment Arrangement, Nonemployee [Member] | Two Board Members [Member]
Share-Based Payment Arrangement, Expense | $				$ 15,500
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)		17,672
Restricted Stock [Member] | Share-Based Payment Arrangement, Nonemployee [Member] | One Board Member [Member]
Share-Based Payment Arrangement, Expense | $			$ 10,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	12,821
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)			204,964	66,423	38,672
Restricted Stock Units (RSUs) [Member] | Employees [Member]
Share-Based Payment Arrangement, Expense | $			$ 124,000	$ 62,000	$ 123,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $			$ 98,000	$ 122,000	$ 19,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			1 year 2 months 12 days	2 years 3 months 18 days	1 year 2 months 12 days
Maximum [Member] | Share-Based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)			10 years
The 2016 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)			1,300,000			1,300,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)			635,679
The 2016 Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized for Issuance in Connection with Performance Awards and Stock Awards (in shares)						600,000
2014 Directors Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)			650,000				350,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)			33,220
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)			300,000

v3.24.1.1.u2

Note 9 - Share-based Compensation - Shares Authorized, Available for Future Grant and Outstanding Under Each Plan (Details) - shares	Mar. 31, 2024	Aug. 25, 2016	Aug. 28, 2014
Authorized (in shares)	1,950,000
Available (in shares)	668,899
Outstanding (in shares)	427,820
The 2016 Plan [Member]
Authorized (in shares)	1,300,000	1,300,000
Available (in shares)	635,679
Outstanding (in shares)	415,820
2014 Directors Plan [Member]
Authorized (in shares)	650,000		350,000
Available (in shares)	33,220
Outstanding (in shares)	12,000

v3.24.1.1.u2

Note 9 - Share-based Compensation - Summary of Option Activity Under Stock Plans (Details) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2021
Outstanding (in shares)	253,000	252,500	374,300
Outstanding, weighted average exercise price (in dollars per share)	$ 2.88	$ 3.34	$ 3.64
Outstanding, weighted average remaining contractual term (Year)	7 years 1 month 6 days	7 years 6 months	6 years 6 months	3 years 10 months 24 days
Outstanding, aggregate intrinsic value	$ 0	$ 0	$ 159,650	$ 129,700
Granted (in shares)	50,000	50,000	50,000
Granted, weighted average exercise price (in dollars per share)	$ 0.79	$ 3.43	$ 2.96
Forfeited (in shares)			(5,000)
Forfeited, weighted average exercise price (in dollars per share)			$ 5.21
Expired (in shares)	(6,000)	(49,500)	(166,800)
Expired, weighted average exercise price (in dollars per share)	$ 5.56	$ 5.8	$ 3.84
Outstanding (in shares)	297,000	253,000	252,500	374,300
Outstanding, weighted average exercise price (in dollars per share)	$ 2.47	$ 2.88	$ 3.34	$ 3.64
Exercisable (in shares)	172,000
Exercisable, weighted average exercise price (in dollars per share)	$ 2.76
Exercisable, weighted average remaining contractual term (Year)	6 years 3 months 18 days
Exercisable, aggregate intrinsic value	$ 0

v3.24.1.1.u2

Note 9 - Share-based Compensation - Summary of Non-vested Options (Details) - $ / shares	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Nonvested (in shares)	141,667
Nonvested (in dollars per share)	$ 1.55
Granted (in shares)	50,000	50,000	50,000
Granted (in dollars per share)	$ 0.48
Vested (in shares)	(66,667)
Vested (in dollars per share)	$ 1.49
Nonvested (in shares)	125,000	141,667
Nonvested (in dollars per share)	$ 1.16	$ 1.55

v3.24.1.1.u2

Note 9 - Share-based Compensation - Summary of the Weighted-average Characteristics of Outstanding Stock Options (Details)	12 Months Ended
	Mar. 31, 2024 $ / shares shares
Outstanding Options Number of Shares (in shares) | shares	297,000
Outstanding Options Remaining Life (Year)	7 years 1 month 6 days
Outstanding Options Weighted Average Price (in dollars per share)	$ 2.74
Exercisable Options Number of Shares (in shares) | shares	172,000
Exercisable Options Weighted Average Price (in dollars per share)	$ 2.76
Range 01 [Member]
Lower Range of Exercise (in dollars per share)	0.79
Upper Range of Exercise (in dollars per share)	$ 2.2
Outstanding Options Number of Shares (in shares) | shares	55,000
Outstanding Options Remaining Life (Year)	9 years 1 month 6 days
Outstanding Options Weighted Average Price (in dollars per share)	$ 0.91
Exercisable Options Number of Shares (in shares) | shares	5,000
Exercisable Options Weighted Average Price (in dollars per share)	$ 2.11
Range 02 [Member]
Lower Range of Exercise (in dollars per share)	2.21
Upper Range of Exercise (in dollars per share)	$ 2.34
Outstanding Options Number of Shares (in shares) | shares	100,000
Outstanding Options Remaining Life (Year)	6 years 3 months 18 days
Outstanding Options Weighted Average Price (in dollars per share)	$ 2.29
Exercisable Options Number of Shares (in shares) | shares	75,000
Exercisable Options Weighted Average Price (in dollars per share)	$ 2.29
Range 03 [Member]
Lower Range of Exercise (in dollars per share)	2.35
Upper Range of Exercise (in dollars per share)	$ 3.2
Outstanding Options Number of Shares (in shares) | shares	80,000
Outstanding Options Remaining Life (Year)	6 years 10 months 24 days
Outstanding Options Weighted Average Price (in dollars per share)	$ 2.8
Exercisable Options Number of Shares (in shares) | shares	63,334
Exercisable Options Weighted Average Price (in dollars per share)	$ 2.76
Range 04 [Member]
Lower Range of Exercise (in dollars per share)	3.21
Upper Range of Exercise (in dollars per share)	$ 5.91
Outstanding Options Number of Shares (in shares) | shares	62,000
Outstanding Options Remaining Life (Year)	7 years
Outstanding Options Weighted Average Price (in dollars per share)	$ 3.73
Exercisable Options Number of Shares (in shares) | shares	28,666
Exercisable Options Weighted Average Price (in dollars per share)	$ 4.09

v3.24.1.1.u2

Note 9 - Share-based Compensation - Summary of Valuation Assumptions Related to Options Granted (Details) - $ / shares	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Exercise Price (in dollars per share)	$ 0.48	$ 1.94	$ 1.6
Volatility	61.63%	57.47%	58.23%
Risk Free Rate	4.34%	3.36%	1.06%
Vesting Period (Year)	3 years	3 years	3 years
Forfeiture Rate	16.00%	19.00%	0.00%
Expected Term (in years) (Year)	6 years	6 years	6 years
Dividend Rate	0.00%	0.00%	0.00%

v3.24.1.1.u2

Note 9 - Share-based Compensation - Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Nonvested restricted stock units (in shares)	70,334	14,465	28,188
Nonvested restricted stock units, weighted average grant price (in dollars per share)	$ 3.04	$ 2.22	$ 2.38
Granted (in shares)	204,964	66,423	38,672
Granted, weighted average grant price (in dollars per share)	$ 0.49	$ 3.13	$ 2.91
Vested (in shares)	(135,272)	(8,312)	(46,963)
Vested, weighted average grant price (in dollars per share)	$ 1	$ 2.35	$ 2.85
Forfeited (in shares)	(9,206)	(2,242)	(5,432)
Forfeited, weighted average grant price (in dollars per share)	$ 2.12	$ 2.91	$ 2.51
Nonvested restricted stock units (in shares)	130,820	70,334	14,465
Nonvested restricted stock units, weighted average grant price (in dollars per share)	$ 1.23	$ 3.04	$ 2.22

v3.24.1.1.u2

Note 10 - Common, Preferred Stock and Stockholders' Equity (Details Textual) - USD ($)		12 Months Ended
	Dec. 15, 2023	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Shares Authorized (in shares)		60,000,000
Common Stock, Shares Authorized (in shares)		50,000,000	50,000,000
Preferred Stock, Shares Authorized (in shares)		10,000,000	10,000,000
Preferred Stock, Shares Issued (in shares)		0	0
Common Stock, Par or Stated Value Per Share (in dollars per share)		$ 0.02	$ 0.02
Proceeds from Issuance of Common Stock		$ 388,000	$ 0	$ 0
Preferred Stock, Shares Outstanding (in shares)		0	0
Private Placement [Member]
Stock Issued During Period, Shares, New Issues (in shares)	400,000
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.02
Shares Issued, Price Per Share (in dollars per share)	$ 1
Proceeds From Sale of Common Stock, Gross Value	$ 400,000
Legal Fees	12,000	$ 12,000
Proceeds from Issuance of Common Stock	$ 388,000

v3.24.1.1.u2

Note 11 - Earnings (Loss) Per Share (Details Textual)	12 Months Ended
	Mar. 31, 2024 shares
Common Stock Options and Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	3,000

v3.24.1.1.u2

Note 11 - Earnings (Loss) Per Share - Summary of Reconciliations Between the Numerator and the Denominator of the Basic and Diluted Earnings Per Share Computations (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Net income (loss)	$ (5,267)	$ (3,440)	$ 2,154
Shares outstanding - basic and diluted (in shares)	6,531	6,244	6,157
Earnings per share - basic and diluted (in dollars per share)	$ (0.81)	$ (0.55)	$ 0.35
Effective dilutive securities—Common stock options and restricted stock units			$ 0
Effective dilutive securities—Common stock options and restricted stock units, outstanding (in shares)			11
Net income - diluted			$ 2,154
Shares outstanding - diluted (in shares)	6,531	6,244	6,168
Diluted income per share (in dollars per share)	$ (0.81)	$ (0.55)	$ 0.35

v3.24.1.1.u2

Note 12 - Profit Sharing and 401k Plan (Details Textual) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Profit Sharing Defined Contribution Plan [Member]
Defined Contribution Plan, Cost	$ 0	$ 0	$ 121,000
Defined Contribution 401K Plan [Member]
Defined Contribution Plan, Cost	$ 82,000	$ 138,000	$ 135,000
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	2.00%

v3.24.1.1.u2

Note 13 - Product Line and Geographic Information (Details Textual) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Cost of Goods and Services Sold	$ 17,126,000	$ 15,919,000	$ 22,402,000
Contract Extraction [Member]
Cost of Goods and Services Sold	$ 358,000	$ 441,000	$ 439,000

v3.24.1.1.u2

Note 13 - Product Line and Geographic Information - Net Sales by Product Line (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Total net sales	$ 23,071	$ 23,178	$ 35,968
Packaged Astaxanthin [Member]
Total net sales	13,613	12,227	14,931
Packaged Spirulina [Member]
Total net sales	5,779	4,814	7,604
Packaged Products [Member]
Total net sales	19,392	17,041	22,535
Bulk Astaxanthin [Member]
Total net sales	1,491	1,982	2,447
Bulk Spirulina [Member]
Total net sales	1,572	3,541	10,386
Bulk Products [Member]
Total net sales	3,063	5,523	12,833
Contract Extraction and R&D Services [Member]
Total net sales	$ 616	$ 614	$ 600

v3.24.1.1.u2

Note 13 - Product Line and Geographic Information - Sales by Geographic Region (Details) - USD ($) $ in Thousands		12 Months Ended
		Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Net sales		$ 23,071	$ 23,178	$ 35,968
Geographic Concentration Risk [Member]
Net sales	[1]	$ 23,071	$ 23,178	$ 35,968
Net sales, percent	[1]	100.00%	100.00%	100.00%
Geographic Concentration Risk [Member] | UNITED STATES
Net sales	[1]	$ 18,886	$ 17,031	$ 24,468
Net sales, percent	[1]	82.00%	73.00%	68.00%
Geographic Concentration Risk [Member] | Asia Pacific [Member]
Net sales	[1]	$ 1,247	$ 2,164	$ 7,102
Net sales, percent	[1]	5.00%	9.00%	20.00%
Geographic Concentration Risk [Member] | Europe [Member]
Net sales	[1]	$ 1,596	$ 2,440	$ 3,183
Net sales, percent	[1]	7.00%	11.00%	9.00%
Geographic Concentration Risk [Member] | Other Countries [Member]
Net sales	[1]	$ 1,342	$ 1,543	$ 1,215
Net sales, percent	[1]	6.00%	7.00%	3.00%
[1] Net sales are attributed to countries based on location of customer.

v3.24.1.1.u2

Note 14 - Income Taxes (Details Textual) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%	21.00%
Operating Loss Carryforwards	$ 17,165,000
Domestic Tax Jurisdiction [Member]
Operating Loss Carryforwards	17,165,000
Operating Loss Carryforwards, Expiration Period (Year)		20 years
Domestic Tax Jurisdiction [Member] | Prior To 2018 Tax Year [Member]
Operating Loss Carryforwards Subject to Expiration		$ 7,203,000
Operating Loss Carryforwards Not Subject to Expiration	9,962,000
State and Local Jurisdiction [Member]
Operating Loss Carryforwards	15,333,000
State and Local Jurisdiction [Member] | Other States [Member]
Operating Loss Carryforwards	656,000
State and Local Jurisdiction [Member] | Carryforwards Expire March 31, 2037 through 2044 [Member] | California Franchise Tax Board [Member]
Operating Loss Carryforwards Subject to Expiration	4,959,000
State and Local Jurisdiction [Member] | Carryforwards Expire March 31, 2030 through 2044 [Member] | State of Hawaii Department of Taxation [Member]
Operating Loss Carryforwards Subject to Expiration	$ 9,718,000

v3.24.1.1.u2

Note 14 - Income Taxes - Components of Income Tax Benefit (Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Federal	$ 0	$ 0	$ 0
State	(7)	(18)	(28)
Total current (expense) benefit	(7)	(18)	(28)
Federal	0	0	0
State	0	0	0
Total deferred expense	0	0	0
Income tax expense	$ (7)	$ (18)	$ (28)

v3.24.1.1.u2

Note 14 - Income Taxes - Reconciliation of the Amount of Income Taxes Computed at the Federal Statutory Rate to the Amount Reflected in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Tax provision at federal statutory income tax rate	$ 1,457	$ 952	$ (591)
Stock-based compensation	(44)	(23)	(16)
Decrease (increase) in valuation allowance	(1,404)	(518)	557
State and local income taxes, net of federal tax benefit	(6)	(12)	(2)
Expired losses	0	(380)	0
Deferred tax true-up	(25)	(24)	34
Other, net	15	(13)	(10)
Income tax expense	$ (7)	$ (18)	$ (28)

v3.24.1.1.u2

Note 14 - Income Taxes - Effects of Temporary Differences Related to Various Assets, Liabilities and Carry Forwards That Give Rise to Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Net operating loss carry forwards	$ 4,471	$ 3,570
Inventory	213	50
Compensation accrual	109	177
Tax credit carry forwards	28	28
Interest limitation	268	108
Operating lease right-of-use assets	1,184	1,323
Section 174 Costs	223	118
Other	9	26
Gross deferred tax assets	6,505	5,400
Less valuation allowance	(4,394)	(2,990)
Net deferred tax assets	2,111	2,410
Operating lease obligations	(1,186)	(1,328)
Depreciation and amortization	(925)	(1,082)
Net deferred tax liabilities	(2,111)	(2,410)
Net deferred tax assets (liabilities)	$ 0	$ 0

v3.24.1.1.u2

Note 14 - Income Taxes - Net Operating Loss Carry Forwards and Tax Credit Carry Forwards Available to Offset Future Federal Income Tax (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Operating Loss Carryforwards	$ 17,165
Research Tax Credit Carryforward [Member]
Research and Experimentation Tax Credits	28
State and Local Jurisdiction [Member]
Operating Loss Carryforwards	15,333
Expiration Tax Year 2025 [Member]
Operating Loss Carryforwards	0
Expiration Tax Year 2025 [Member] | Research Tax Credit Carryforward [Member]
Research and Experimentation Tax Credits	8
Expiration Tax Year 2025 [Member] | State and Local Jurisdiction [Member]
Operating Loss Carryforwards	0
Expiration Tax Year 2026 [Member]
Operating Loss Carryforwards	159
Expiration Tax Year 2026 [Member] | Research Tax Credit Carryforward [Member]
Research and Experimentation Tax Credits	2
Expiration Tax Year 2026 [Member] | State and Local Jurisdiction [Member]
Operating Loss Carryforwards	0
Expiration Tax Year 2027 [Member]
Operating Loss Carryforwards	2,665
Expiration Tax Year 2027 [Member] | Research Tax Credit Carryforward [Member]
Research and Experimentation Tax Credits	0
Expiration Tax Year 2027 [Member] | State and Local Jurisdiction [Member]
Operating Loss Carryforwards	0
ExpirationTax Year 2028 [Member]
Operating Loss Carryforwards	1,612
ExpirationTax Year 2028 [Member] | Research Tax Credit Carryforward [Member]
Research and Experimentation Tax Credits	1
ExpirationTax Year 2028 [Member] | State and Local Jurisdiction [Member]
Operating Loss Carryforwards	0
Expiration Tax Year After 2028 [Member]
Operating Loss Carryforwards	2,767
Expiration Tax Year After 2028 [Member] | Research Tax Credit Carryforward [Member]
Research and Experimentation Tax Credits	17
Expiration Tax Year After 2028 [Member] | State and Local Jurisdiction [Member]
Operating Loss Carryforwards	15,333
Indefinite [Member]
Operating Loss Carryforwards	9,962
Indefinite [Member] | Research Tax Credit Carryforward [Member]
Research and Experimentation Tax Credits	0
Indefinite [Member] | State and Local Jurisdiction [Member]
Operating Loss Carryforwards	$ 0

v3.24.1.1.u2

Note 14 - Income Taxes - Open Tax Years and Jurisdictions That the Company Used in Its Evaluation of Tax Positions (Details)	12 Months Ended
	Mar. 31, 2024
Domestic Tax Jurisdiction [Member] | Internal Revenue Service (IRS) [Member]
Open tax year	2021 2022 2023 2024
State and Local Jurisdiction [Member] | Hawaii Department of Taxation [Member]
Open tax year	2021 2022 2023 2024
State and Local Jurisdiction [Member] | California Franchise Tax Board [Member]
Open tax year	2020 2021 2022 2023 2024

v3.24.1.1.u2

Note 15 - Related Party Transactions and Balances (Details Textual) - USD ($)						1 Months Ended	12 Months Ended				37 Months Ended
	Mar. 31, 2024	Oct. 13, 2023	Mar. 31, 2023	Apr. 12, 2021	Aug. 30, 2016	Apr. 30, 2021	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2020	Apr. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Aug. 14, 2023	Dec. 31, 2022	Dec. 14, 2022	Apr. 30, 2019
Interest Paid, Excluding Capitalized Interest, Operating Activities							$ 583,000	$ 408,000	$ 342,000
Long-Term Debt	$ 5,460,000						5,460,000
Lines of Credit, Related Party, Current	$ 1,250,000		$ 500,000				1,250,000	500,000
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]	Prime Rate [Member]	Prime Rate [Member]	Prime Rate [Member]	Prime Rate [Member]	Prime Rate [Member]	Prime Rate [Member]				Prime Rate [Member]	Prime Rate [Member]
Revolving Credit Facility [Member] | Related Party 1 [Member]
Line of Credit Facility, Maximum Borrowing Capacity												$ 2,000,000	$ 2,000,000	$ 2,000,000	$ 1,000,000
Lines of Credit, Related Party, Current	$ 1,250,000		$ 500,000				$ 1,250,000	$ 500,000
Debt Instrument, Interest Rate, Stated Percentage	8.50%		7.50%				8.50%	7.50%
Conversion of Skywords Note Into Revolving Loans [Member]
Debt Conversion, Original Debt, Amount				$ 500,000
Skywords Note [Member]
Debt Instrument, Basis Spread on Variable Rate						1.00%
Repayments of Long-term Debt, Total				500,000		$ 500,000
Interest Paid, Excluding Capitalized Interest, Operating Activities				1,900		$ 1,900
Skywords Note [Member] | Unsecured Subordinated Loan [Member]
Debt Instrument, Face Amount										$ 1,500,000							$ 1,500,000
Debt Instrument, Basis Spread on Variable Rate										1.00%
Long-Term Debt	$ 1,000,000		$ 1,000,000				$ 1,000,000	$ 1,000,000
Skywords Amended Note [Member]
Debt Instrument, Face Amount				$ 500,000												$ 1,000,000
Debt Instrument, Basis Spread on Variable Rate				1.00%
Debt Instrument, Term (Year)				3 years
Debt Instrument, Floor Interest Rate				5.00%		5.00%

---