CYANOTECH CORP - Quarter Report: 2013 June (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For Quarterly Period Ended June 30, 2013
Or
o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period From to
Commission File Number 0-14602
CYANOTECH CORPORATION
(Exact name of registrant as specified in its charter)
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NEVADA |
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91-1206026 |
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(State or other jurisdiction |
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(IRS Employer |
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of incorporation or organization) |
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Identification Number) |
73-4460 Queen Kaahumanu Hwy. #102, Kailua-Kona, HI 96740
(Address of principal executive offices)
(808) 326-1353
(Registrant’s telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o |
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Accelerated filer o |
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Non-accelerated filer o |
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Smaller reporting company x |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Number of common shares outstanding as of August 5, 2013:
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Title of Class |
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Shares Outstanding |
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Common stock - $0.02 par value |
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5,465,788 |
CYANOTECH CORPORATION
FORM 10-Q
Item 1. Financial Statements (Unaudited)
CYANOTECH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except par value and number of shares)
(Unaudited)
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June 30, |
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March 31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
3,104 |
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$ |
4,364 |
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Accounts receivable, net of allowance for doubtful accounts of $6 at June 30, 2013 and $6 at March 31, 2013 |
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3,896 |
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3,766 |
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Inventories, net |
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4,213 |
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3,688 |
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Deferred tax assets |
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110 |
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110 |
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Prepaid expenses and other current assets |
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651 |
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263 |
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Total current assets |
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11,974 |
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12,191 |
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Equipment and leasehold improvements, net |
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10,198 |
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8,835 |
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Restricted cash |
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2,717 |
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3,360 |
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Deferred tax assets |
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3,323 |
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3,429 |
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Other assets |
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811 |
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772 |
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Total assets |
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$ |
29,023 |
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$ |
28,587 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Current maturities of long-term debt |
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$ |
156 |
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$ |
128 |
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Customer deposits |
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29 |
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33 |
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Accounts payable |
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2,209 |
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1,852 |
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Accrued expenses |
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751 |
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872 |
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Total current liabilities |
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3,145 |
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2,885 |
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Long-term debt, excluding current maturities |
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5,418 |
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5,454 |
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Deferred rent |
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21 |
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21 |
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Total liabilities |
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8,584 |
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8,360 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Common stock of $0.02 par value, shares authorized 50,000,000; 5,465,788 shares issued and outstanding at June 30, 2013 and 5,463,938 at March 31, 2013 |
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109 |
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109 |
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Additional paid-in capital |
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29,259 |
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29,077 |
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Accumulated deficit |
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(8,929 |
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(8,959 |
) | ||
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Total stockholders’ equity |
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20,439 |
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20,227 |
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Total liabilities and stockholders’ equity |
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$ |
29,023 |
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$ |
28,587 |
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See accompanying Notes to Condensed Consolidated Financial Statements.
CYANOTECH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
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Three Months Ended June 30, |
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2013 |
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2012 |
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NET SALES |
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$ |
6,909 |
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$ |
6,506 |
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COST OF SALES |
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4,057 |
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3,932 |
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Gross Profit |
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2,852 |
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2,574 |
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OPERATING EXPENSES: |
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General and administrative |
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1,556 |
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1,148 |
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Sales and marketing |
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1,004 |
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838 |
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Research and development |
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115 |
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51 |
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Loss on disposal of equipment and leasehold improvements |
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5 |
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22 |
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Total operating expenses |
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2,680 |
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2,059 |
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Income from operations |
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172 |
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515 |
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Interest expense, net |
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36 |
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12 |
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Income before provision for income taxes |
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136 |
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503 |
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PROVISION FOR INCOME TAXES |
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106 |
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10 |
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NET INCOME |
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$ |
30 |
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$ |
493 |
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NET INCOME PER SHARE: |
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Basic |
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$ |
0.01 |
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$ |
0.09 |
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Diluted |
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$ |
0.01 |
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$ |
0.08 |
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SHARES USED IN CALCULATION OF NET INCOME PER SHARE: |
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Basic |
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5,464 |
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5,441 |
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Diluted |
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5,615 |
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5,873 |
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See accompanying Notes to Condensed Consolidated Financial Statements.
CYANOTECH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
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Three Months Ended |
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2013 |
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2012 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
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$ |
30 |
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$ |
493 |
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Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
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Loss on disposal of equipment and leasehold improvements |
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5 |
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22 |
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Depreciation and amortization |
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240 |
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192 |
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Amortization of debt issue costs and other assets |
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10 |
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11 |
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Share based compensation expense |
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178 |
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125 |
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Reduction of allowance for doubtful accounts |
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— |
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(10 |
) | ||
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Reduction of inventory reserve |
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(1 |
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— |
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Deferred income tax provision |
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106 |
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— |
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Net (increase) decrease in assets: |
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Accounts receivable |
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(130 |
) |
(354 |
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Inventories |
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(523 |
) |
459 |
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Prepaid expenses and other assets |
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(438 |
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(9 |
) | ||
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Net increase (decrease) in liabilities: |
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Customer deposits |
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(4 |
) |
(13 |
) | ||
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Accounts payable |
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357 |
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(237 |
) | ||
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Accrued expenses |
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(121 |
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(468 |
) | ||
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Deferred rent |
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— |
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4 |
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Net cash (used in) provided by operating activities |
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(291 |
) |
215 |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Proceeds from restricted cash |
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644 |
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— |
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Investment in equipment and leasehold improvements |
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(1,611 |
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(566 |
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Net cash used in investing activities |
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(967 |
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(566 |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Principal payments on long-term debt |
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(8 |
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(58 |
) | ||
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Proceeds from stock options exercised |
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6 |
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— |
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Net cash used in financing activities |
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(2 |
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(58 |
) | ||
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Net decrease in cash and cash equivalents |
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(1,260 |
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(409 |
) | ||
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Cash and cash equivalents at beginning of period |
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4,364 |
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5,061 |
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Cash and cash equivalents at end of period |
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$ |
3,104 |
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$ |
4,652 |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
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Cash paid during the period for: |
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Interest |
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$ |
75 |
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$ |
13 |
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Income taxes |
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$ |
5 |
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$ |
— |
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See accompanying Notes to Condensed Consolidated Financial Statements.
CYANOTECH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2013
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to the instructions to Form 10-Q and Regulation S-X of the Securities and Exchange Commission (SEC). These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows for the periods presented in accordance with GAAP. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The Condensed Consolidated Balance Sheet as of March 31, 2013 was derived from the audited financial statements. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements for the year ended March 31, 2013, contained in the Company’s annual report on Form 10-K as filed with the SEC on June 24, 2013.
The accompanying condensed consolidated financial statements include the accounts of Cyanotech Corporation and its wholly owned subsidiary, Nutrex Hawaii, Inc. (“Nutrex Hawaii” or “Nutrex”, collectively the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.
The preparation of financial statements in conformity with 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.
2. INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Inventories consist of the following:
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June 30, 2013 |
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March 31, 2013 |
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(in thousands) |
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Raw materials |
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$ |
638 |
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$ |
932 |
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Work in process |
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324 |
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330 |
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Finished goods (1) |
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3,010 |
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2,164 |
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Supplies |
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241 |
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262 |
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$ |
4,213 |
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$ |
3,688 |
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(1) Net of reserve for obsolescence of $7,000 and $9,000, at June 30, 2013 and March 31, 2013, respectively.
The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, as an expense in the period incurred. There were no abnormal production costs charged to cost of sales for the quarter ended June 30, 2013. Approximately $233,000 of abnormal production costs were charged to cost of sales for the quarter ended June 30, 2012.
3. EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET
Equipment and leasehold improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives for equipment and furniture and fixtures, or the shorter of the land lease term or estimated useful lives for leasehold improvements as follows:
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Equipment |
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3 to 10 years |
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Furniture and fixtures |
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3 to 7 years |
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Leasehold improvements |
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10 to 25 years |
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Equipment and leasehold improvements consist of the following:
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|
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June 30, 2013 |
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March 31, 2013 |
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(in thousands) |
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Equipment |
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$ |
7,570 |
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$ |
7,455 |
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Leasehold improvements |
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8,583 |
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8,313 |
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Furniture and fixtures |
|
215 |
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208 |
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16,368 |
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15,976 |
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Less accumulated depreciation and amortization |
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(10,719 |
) |
(10,496 |
) | ||
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Construction-in-progress |
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4,549 |
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3,355 |
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Equipment and leasehold improvements, net |
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$ |
10,198 |
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$ |
8,835 |
|
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amount to forecasted undiscounted future cash flows expected to be generated by the asset. If the carrying amount exceeds its estimated future cash flows, then an impairment charge is recognized to the extent that the carrying amount exceeds the asset’s fair value. Management has determined no asset impairment existed as of June 30, 2013. The Company recognized a loss on disposal of equipment in the amount of $5,000 for the three months ended June 30, 2013. The Company recognized a loss on disposal of equipment in the amount of $22,000 for the three months ended June 30, 2012.
The Company has capitalized $43,000 of interest for the three months ended June 30, 2013. No interest was capitalized for the three month period ended June 30, 2012.
4. ACCRUED EXPENSES
Accrued expenses consist of the following:
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|
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June 30, 2013 |
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March 31, 2013 |
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|
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(in thousands) |
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Wages and profit sharing |
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$ |
500 |
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$ |
623 |
|
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Customer rebates |
|
46 |
|
109 |
| ||
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Other accrued expenses |
|
205 |
|
140 |
| ||
|
|
|
$ |
751 |
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$ |
872 |
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5. LONG-TERM DEBT
Long-term debt consists of the following:
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|
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June 30, 2013 |
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March 31, 2013 |
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(in thousands) |
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Term loans |
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$ |
5,574 |
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$ |
5,582 |
|
|
Less current maturities |
|
(156 |
) |
(128 |
) | ||
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Long-term debt, excluding current maturities |
|
$ |
5,418 |
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$ |
5,454 |
|
Term Loan Agreements
The Company executed a loan agreement with a lender providing for $5,500,000 in aggregate credit facilities (the “Loan”) secured by substantially all the Company’s assets, pursuant to a Term Loan Agreement dated August 14, 2012 (the “Loan Agreement”). The Loan Agreement 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 United States Department of Agriculture (“USDA”) Rural Development Guarantee program (the “Guarantees”). The proceeds of the Loan will be used to acquire new processing equipment and leasehold improvements at its Kona, Hawaii facility.
The provisions of the Loan require 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 Loan accrues on the outstanding principal balance at an annual variable rate equal to the published Wall Street Journal prime rate (3.25% at June 30, 2013) plus 1.0% and is adjustable on the first day of each calendar quarter and fixed for that quarter. At no time shall the annual interest rate be less than 5.50%. The Loan has a prepayment penalty of 5% for any prepayment made prior to the first anniversary of the date of the Loan Agreement, which penalty is reduced by 1% each year thereafter until the fifth anniversary of such date, after which there is no prepayment penalty. The balance under this Loan was $5,500,000 at June 30, 2013. Proceeds from the Loan are classified as restricted cash until drawn upon to acquire new processing equipment and leasehold improvements.
The Loan includes a one-time origination and guaranty fee 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 has guaranteed 80% of all amounts owing under the Loan. The Company is subject to financial covenants and customary affirmative and negative covenants. The Company was in compliance with these financial covenants at June 30, 2013.
The Company has three equipment loans with John Deere credit providing for $103,000 in equipment financing; these loans are payable in 48 equal monthly principal payments. At June 30, 2013 and March 31, 2013 the total outstanding combined balance was approximately $60,000 and $66,000, respectively. The equipment loans have maturity dates of May 2015 as to $20,000, November 2015 as to $18,000 and June 2016 as to $22,000. The loans are at a 0% rate of interest and are net of unamortized discount of $1,500 and $2,000 at June 30, 2013 and March 31, 2013, respectively.
In September 2011, the Company executed a Term Loan Agreement with Nissan Motor Acceptance Corporation providing for $23,000 in equipment financing, secured by the equipment. The Term Loan has a maturity date of September 13, 2016 and is payable in 60 equal monthly principal payments. The interest rate under this Term Loan is 0%. Imputed interest at a rate of 2% (cash discount offered by seller) has been recorded and is being amortized as interest over the term of the loan. The balance outstanding under the Term Loan was $14,000 and $15,000 at June 30, 2013 and March 31, 2013, respectively, less the unamortized discount of $500 and $600 at June 30, 2013 and March 31, 2013, respectively.
Future principal payments under the term loan and capital lease agreements as of June 30, 2013 are as follows:
|
Payments Due |
|
(in |
| |
|
Next 12 Months |
|
$ |
156 |
|
|
Year 2 |
|
205 |
| |
|
Year 3 |
|
201 |
| |
|
Year 4 |
|
198 |
| |
|
Year 5 |
|
208 |
| |
|
Thereafter |
|
4,606 |
| |
|
Total principal payments |
|
$ |
5,574 |
|
6. LEASES
The Company leases facilities, equipment and land under operating leases expiring through 2035. The land lease provides for contingent rentals in excess of minimum rental commitments based on a percentage of the Company’s sales. Management has accrued for the estimated contingent rent as of June 30, 2013.
Future minimum lease payments under all non-cancelable operating leases at June 30, 2013 are as follows:
|
Payments Due |
|
(in |
| |
|
Next 12 Months |
|
$ |
470 |
|
|
Year 2 |
|
479 |
| |
|
Year 3 |
|
374 |
| |
|
Year 4 |
|
301 |
| |
|
Year 5 |
|
299 |
| |
|
Thereafter |
|
5,235 |
| |
|
Total minimum lease payments |
|
$ |
7,158 |
|
7. COMMITMENTS AND CONTINGENCIES
On September 12, 2012, the Company entered into an agreement with Uhde Corporation of America (“Uhde”) for the purchase of supercritical carbon dioxide extraction equipment to be used in the processing of its natural astaxanthin (“Equipment”). Pursuant to the terms of the agreement, Uhde will build, ship and provide assistance in installing the Equipment, which is required to be delivered in approximately 14 months from the date of the agreement. The Company will pay Uhde an aggregate of $3,222,000 for the equipment and services, of which $968,000 remains unpaid as of June 30, 2013. Progress payments through June 30, 2013 of $2,255,000 have been classified in construction in progress in the consolidated balance sheet.
The Company is subject to legal proceedings and claims from time to time in the ordinary course of business. Although management cannot predict with certainty the ultimate resolution of legal proceedings and claims asserted against the Company, management does not believe that any currently pending legal proceeding to which the Company is a party is likely to have a material adverse effect on its business, results of operations, cash flows or financial condition.
8. SHARE-BASED COMPENSATION
The Company accounts for share-based payment arrangements using fair value. If an award vests or becomes exercisable based on the achievement of a condition other than service, such as for meeting certain performance or market conditions, the award is classified as a liability. Liability-classified awards are remeasured to fair value at each balance sheet date until the award is settled. The Company currently has no liability-classified awards. Equity- classified awards, including grants of 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 of the Company’s stock options are service-based awards, and because the Company’s stock options are “plain vanilla,” as defined by the U.S. Securities and Exchange Commission in Staff Accounting Bulletin No. 107, they are reflected only in equity and compensation expense accounts.
Stock Options
As of June 30, 2013, the Company had the following two shareholder approved plans under which shares were available for equity based awards: The 2005 Stock Option Plan (the “2005 Plan”) wherein 2,075,000 shares of common stock are reserved for issuance until the Plan terminates on August 21, 2015, and; The Independent Director Stock Option and Stock Grant Plan (the “2004 Directors Plan”) wherein 200,000 shares of common stock are reserved for issuance until the plan terminates in 2014.
Under the 2005 Plan, eligible employees and certain independent consultants may be granted options to purchase shares of the Company’s common stock. The shares issuable under the 2005 Plan will either be shares of the Company’s authorized but previously unissued common stock or shares reacquired by the Company, including shares purchased on the open market. As of June 30, 2013, there were 412,878 options available for grant under the 2005 Plan.
Under the 2004 Directors Plan, upon election to the Board of Directors at an annual stockholders meeting, a newly elected non-employee director will be granted a ten-year option to purchase 6,000 shares of the Company’s common stock. Options vest and become exercisable six months from the date of grant. In addition, on the date of each annual stockholders meeting, each non-employee director continuing in office is automatically issued 4,000 shares of the Company’s common stock, and an additional 1,000 shares to the director serving as Chairman of the Board, non-transferable for six months following the date of grant. As of June 30, 2013, there were 130,123 shares available for grant under the 2004 Directors Plan.
The following table presents shares authorized, available for future grant and outstanding under each of the Company’s plans:
|
|
|
As of June 30, 2013 |
| ||||
|
|
|
Authorized |
|
Available |
|
Outstanding |
|
|
|
|
|
|
|
|
|
|
|
2005 Plan |
|
2,075,000 |
|
412,878 |
|
1,480,606 |
|
|
2004 Directors Plan |
|
200,000 |
|
130,123 |
|
12,000 |
|
|
Total |
|
2,275,000 |
|
543,001 |
|
1,492,606 |
|
All stock option grants made under the 2005 Plan and the 2004 Directors Plan were issued at exercise prices no less than the Company’s closing stock price on the date of grant. Options under the 2005 Plan and 2004 Directors Plan were determined by the Board of Directors or the Stock Option and Compensation Committee of the Board in accordance with the provisions of the respective plans. The terms of each 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 the 2005 Plan was $178,000 and $122,000 for the three months ended June 30, 2013 and 2012, respectively. Compensation expense recognized for options issued under the 2004 Directors Plan was $0 and $3,000 during the three months ended June 30, 2013 and 2012, respectively. All share-based compensation has been classified as general and administrative expense.
A summary of option activity under the Company’s stock plans for the three months ended June 30, 2013 is presented below:
|
Option Activity |
|
Shares |
|
Weighted Average |
|
Weighted Average |
|
Aggregate |
| ||
|
Outstanding at March 31, 2013 |
|
1,495,856 |
|
$ |
4.03 |
|
8.3 years |
|
$ |
1,174,810 |
|
|
Granted |
|
— |
|
— |
|
— |
|
— |
| ||
|
Exercised |
|
(1,850 |
) |
$ |
2.37 |
|
— |
|
5,693 |
| |
|
Forfeited or expired |
|
(1,400 |
) |
$ |
3.63 |
|
— |
|
1,221 |
| |
|
Outstanding at June 30, 2013 |
|
1,492,606 |
|
$ |
4.03 |
|
8.0 years |
|
$ |
3,626,504 |
|
|
Exercisable at June 30, 2013 |
|
377,040 |
|
$ |
3.01 |
|
7.2 years |
|
$ |
1,280,379 |
|
The aggregate intrinsic value as of June 30, 2013 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 $6.41 for such day.
A summary of the Company’s non-vested options for the three months ended June 30, 2013 is presented below:
|
Nonvested Options |
|
Shares |
|
Weighted |
| |
|
Nonvested at March 31, 2013 |
|
1,157,566 |
|
$ |
3.05 |
|
|
Granted |
|
— |
|
— |
| |
|
Vested |
|
(40,600 |
) |
0.65 |
| |
|
Forfeited or expired |
|
(1,400 |
) |
2.52 |
| |
|
Nonvested at June 30, 2013 |
|
1,115, 566 |
|
$ |
3.14 |
|
The following table summarizes the weighted average characteristics of outstanding stock options as of June 30, 2013:
|
|
|
Outstanding Options |
|
Exercisable Options |
| ||||||||
|
Range of |
|
Number |
|
Remaining |
|
Weighted |
|
Number of |
|
Weighted |
| ||
|
$ 1.60 - $3.70 |
|
447,340 |
|
7.2 |
|
$ |
2.92 |
|
301,220 |
|
$ |
2.72 |
|
|
$ 3.71 - $4.42 |
|
732,266 |
|
8.2 |
|
3.82 |
|
56,820 |
|
3.82 |
| ||
|
$ 4.43 - $5.40 |
|
77,500 |
|
8.7 |
|
5.19 |
|
19,000 |
|
5.26 |
| ||
|
$ 5.41 - $7.08 |
|
235,500 |
|
9.1 |
|
6.40 |
|
— |
|
— |
| ||
|
Total stock options |
|
1,492,606 |
|
8.0 |
|
$ |
4.03 |
|
377,040 |
|
$ |
3.01 |
|
There were no stock options granted during the three months ended June 30, 2013 and June 30, 2012, respectively. The value assumptions related to options granted during the fiscal year ended March 31, 2013 were as follows:
|
|
|
2013 |
| |
|
Exercise Price: |
|
$ |
5.26 – 7.08 |
|
|
Volatility: |
|
78.26 – 80.39 |
% | |
|
Risk Free Rate: |
|
0.85 – 0.93 |
% | |
|
Vesting Period: |
|
5 - 7 yrs |
| |
|
Forfeiture Rate: |
|
7.66 - 9.00 |
% | |
|
Expected Life: |
|
6.25 yrs |
| |
|
Dividend Rate: |
|
0 |
% | |
As of June 30, 2013, total unrecognized share-based compensation expense related to all unvested stock options was $2,406,000 which is expected to be expensed over a weighted average period of 4.0 years.
9. INCOME TAXES
We utilize our estimated annual effective tax rate to determine our provision for income taxes for interim periods. The income tax provision is computed by taking the estimated annual effective tax rate and multiplying it by the year to date pre-tax book income. We recorded income tax expense of $106,000 and $10,000 for the three months ended June 30, 2013 and 2012, respectively. Our effective tax rate was 77.6% and 2.0% for the quarters ended June 30, 2013 and June 30, 2012, respectively. The effective tax rate for the three months ended June 30, 2013 differs from the statutory rate of 34% as a result of the state taxes (net of federal benefit) and permanent differences.
The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (“uncertain tax positions”) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events.
As of June 30, 2013, there was no liability 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 income or expense in its consolidated condensed statements of operations, which is consistent with the recognition of these items in prior reporting periods.
With few exceptions, the Company is no longer subject to U.S. federal, state, local, and non-U.S. income tax examination by tax authorities for tax years before 2008.
10. EARNINGS PER SHARE
Basic earnings 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 using the “treasury stock” method.
Reconciliations between the numerator and the denominator of the basic and diluted earnings per share computations for the three months ended June 30, 2013 and 2012 are as follows:
|
|
|
Three Months Ended June 30, 2013 |
| ||||||
|
|
|
Net Income |
|
Shares |
|
Per Share |
| ||
|
|
|
(Numerator) |
|
(Denominator) |
|
Amount |
| ||
|
|
|
(in thousands) |
|
|
| ||||
|
Basic income per share |
|
$ |
30 |
|
5,464 |
|
$ |
0.01 |
|
|
Effect of dilutive securities—Common stock options |
|
— |
|
151 |
|
— |
| ||
|
Diluted income per share |
|
$ |
30 |
|
5,615 |
|
$ |
0.01 |
|
|
|
|
Three Months Ended June 30, 2012 |
| ||||||
|
|
|
Net Loss |
|
Shares |
|
Per Share |
| ||
|
|
|
(Numerator) |
|
(Denominator) |
|
Amount |
| ||
|
|
|
(in thousands) |
|
|
| ||||
|
Basic income per share |
|
$ |
493 |
|
5,441 |
|
$ |
0.09 |
|
|
Effect of dilutive securities — Common stock options |
|
— |
|
432 |
|
(0.01 |
) | ||
|
Diluted income per share |
|
$ |
493 |
|
5,873 |
|
$ |
0.08 |
|
Diluted earnings per share does not include the impact of common stock options totaling 712,252 and 0 for the three months ended June 30, 2013 and 2012, respectively, as the effect of their inclusion would be anti-dilutive.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 nutritional supplements, litigation, regulatory investigations or other events, conditions and circumstances involving the Company which receive national media coverage;
· The 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;
· Our dependence on the experience, continuity and competence of our executive officers and other key employees;
· The added risks associated with the current local, national and world economic crises, including but not limited to, the volatility of crude oil prices, inflation and currency fluctuations;
· 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;
· Changes in laws, corporate governance requirements and tax rates, regulations, accounting standards and the application to us or the nutritional products industry of new decisions by courts, regulators or other government authorities;
· The 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.
Overview:
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 ISO 9001:2008 compliant and GMP (Good Manufacturing Practices) certified by the Natural Products Association™, reinforcing our commitment to quality in our products, quality in our relationships (with our customers, suppliers, co-workers and the communities we live in), and quality of the environment in which we work. Our products include:
· Hawaiian Spirulina Pacifica® - a nutrient-rich dietary supplement used for extra energy, a strengthened immune system, cardiovascular benefits and as a source of antioxidant carotenoids; and
· Hawaiian BioAstin® natural astaxanthin - a powerful dietary antioxidant shown to support and maintain the body’s natural inflammatory response, to enhance skin, and to support eye and joint health. It has expanding applications as a human nutraceutical and functional food ingredient
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 provide human nutritional products derived from microalgae.
Our production of these products at the 90-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, free of pesticides and herbicides. 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.
Results of Operations
Because our core operations are agricultural and dependent on favorable environmental factors, from time to time we experience cycles of low production in our harvests. Our spirulina production had been experiencing one of those cycles within the past twelve months. Specifically, in the last three quarters of fiscal 2013 we have harvested microalgae with smaller cell sizes than had been typical over the past several years. While the quality of our spirulina remains very high, with nutrient levels at or above our high standards, the physical size of the cells has impacted our harvest levels. We continue to take steps to improve our harvest efficiency and maintain a large size cell. Our harvest level has improved to targeted levels in this first quarter of fiscal 2014.
We have continued to make progress in developing our total consumer business. Our astaxanthin pond expansion project completed early this year and, the overall expertise we have developed in cultivating and harvesting our natural Hawaiian astaxanthin have helped us offset the downturn in our spirulina target harvest cycle.
The following tables present selected consolidated financial data for each of the periods indicated ($ in thousands):
|
|
|
Three Months Ended |
| ||||
|
|
|
June 30, 2013 |
|
June 30, 2012 |
| ||
|
Net sales |
|
$ |
6,909 |
|
$ |
6,506 |
|
|
Net sales increase |
|
6.2 |
% |
|
| ||
|
Gross profit |
|
$ |
2,852 |
|
$ |
2,574 |
|
|
Gross profit as % of net sales |
|
41.3 |
% |
39.6 |
% | ||
|
Operating expenses |
|
$ |
2,680 |
|
$ |
2,059 |
|
|
Operating expenses as % of net sales |
|
38.8 |
% |
31.6 |
% | ||
|
Operating income |
|
$ |
172 |
|
$ |
515 |
|
|
Operating income as % of net sales |
|
2.5 |
% |
7.9 |
% | ||
|
Income tax expense |
|
$ |
106 |
|
$ |
10 |
|
|
Net income |
|
$ |
30 |
|
$ |
493 |
|
|
|
|
|
|
|
| ||
|
Net sales by product |
|
|
|
|
| ||
|
Bulk sales |
|
|
|
|
| ||
|
Spirulina bulk |
|
$ |
808 |
|
$ |
1,222 |
|
|
Spirulina bulk sales decrease |
|
(33.9 |
)% |
|
| ||
|
Astaxanthin bulk |
|
$ |
2,287 |
|
$ |
2,633 |
|
|
Astaxanthin bulk sales decrease |
|
(13.1 |
)% |
|
| ||
|
Total Bulk sales |
|
$ |
3,095 |
|
$ |
3,855 |
|
|
Total Bulk sales decrease |
|
(19.7 |
)% |
|
| ||
|
|
|
|
|
|
| ||
|
Packaged sales |
|
|
|
|
| ||
|
Spirulina packaged |
|
$ |
1,467 |
|
$ |
1,138 |
|
|
Spirulina packaged sales increase |
|
28.9 |
% |
|
| ||
|
Astaxanthin packaged |
|
$ |
2,347 |
|
$ |
1,513 |
|
|
Astaxanthin packaged sales increase |
|
55.1 |
% |
|
| ||
|
Total Packaged sales |
|
$ |
3,814 |
|
$ |
2,651 |
|
|
Total Packaged sales increase |
|
43.8 |
% |
|
| ||
Comparison of the Three Months Ended June 30, 2013 and 2012
Net Sales The net sales growth of 6% for the quarter was driven by a 44% increase in our packaged products consistent with our focus and investment in the consumer packaged goods side of our business. Within this growth, sales of spirulina increased 29% and sales of astaxanthin increased 55%. Sales of our bulk products decreased 20%, consisting of a decrease in sales of bulk spirulina of 34% and a decrease in sales of bulk astaxanthin of 13%. The decrease in spirulina sales compared to the same period a year ago was driven by higher levels of inventory at the end of fiscal 2012 that were sold in the first quarter of fiscal 2013. International sales represented 45% of net sales for the three months ended June 30, 2013 compared to 35% for the same period a year ago. There was one customer who accounted for more than 10% of our total net sales for the three months ended June 30, 2013. There were no customers with sales equaling or exceeding 10% of our total net sales for the three months ended June 30, 2012.
Gross Profit Our gross profit as a percent of net sales increased by 1.7 points in the first quarter. Gross profit was impacted by higher spirulina production which resulted in better overhead absorption compared to the same period last year. As a result, there were no abnormal production costs this quarter compared to $200,000 in the first quarter of fiscal year and 2013.
Operating Expenses Operating expenses increased by $621,000 for the first quarter compared to the same period in fiscal 2013. Included in this is an increase in general and administrative expenses of $408,000, or 36%, due to increased salary from new headcount and headcount transferred from operations functions, increases in costs associated with stock options granted to key employees and increased legal costs. Sales and marketing expenses increased $166,000, or 20%, due to an increase in brand development costs, advertising programs for our packaged products and the full year impact of management level staffing added last year. .
Income Taxes We recorded income tax expense of $106,000 in the current quarter compared to $10,000 for the same period in fiscal 2013. Our effective tax rate was 77.6% for the current quarter and 2.0% for the same period last year.
Variability of Results
We have experienced significant quarterly fluctuations in operating results and such fluctuations could occur in future periods. We have, during our history, experienced fluctuations in operating results due to the following: changes in sales levels to our customers; competition including pricing, new products and shifts in market trends; production difficulties from environmental influences; increased production costs and variable production results due to inclement weather; and start up costs associated with new product introductions, new facilities and expansion into new markets. In addition, future operating results may fluctuate as a result of factors beyond our control such as foreign exchange fluctuations, changes in government regulations, and economic changes in the regions we have customers. A portion of our operating expenses are relatively fixed and the timing of increases in expense levels is based in large part on forecasts of future sales. Therefore, if net sales are below expectations in any given period, the adverse impact on results of operations may be magnified by our inability to effectively adjust spending in certain areas, or to adjust spending in a timely manner, as in personnel and administrative costs. We may also choose to reduce prices or increase spending in response to market conditions, and these decisions may have a material adverse effect on financial condition and results of operations.
Liquidity and Capital Resources
Cash Flows The following table summarizes our cash flows for the period indicated ($ in thousands):
|
|
|
Three months ended June 30 |
| ||||
|
|
|
2013 |
|
2012 |
| ||
|
Total cash provided by (used in): |
|
|
|
|
| ||
|
Operating activities |
|
$ |
(291 |
) |
$ |
215 |
|
|
Investing activities |
|
(967 |
) |
(566 |
) | ||
|
Financing activities |
|
(2 |
) |
(58 |
) | ||
|
|
|
|
|
|
| ||
|
Decrease in cash and cash equivalents |
|
$ |
(1,260 |
) |
$ |
(409 |
) |
Cash provided by operating activities decreased $506,000 compared to the same period last year due primarily to changes in working capital, driven largely by lower net income and an increase in inventory of $438,000 compared to $9,000 last year
Cash used in investing activities in the current quarter includes costs related to leasehold improvements and equipment acquisitions at our Kona facility.
Cash used in financing activities consists of principal payments on debt in the normal course of business.
Sources and Uses of Capital
At June 30, 2013, our working capital was $8,829,000, a decrease of $477,000 compared to March 31, 2013. The decrease is due primarily to investments in equipment and leasehold improvement that contributed to a $1,260,000 reduction of cash and cash equivalents compared to March 31, 2013.
On September 7, 2012, the Company completed a Term Loan Agreement with a lender providing for $5,500,000 in aggregate credit facilities pursuant to a Term Loan Agreement dated August 14, 2012. The Term Loan Agreement is evidenced by promissory notes in the amounts of $2,250,000 and $3,250,000, and was secured under the provisions of a United States Department of Agriculture (“USDA”) Rural Development Guarantee program. The proceeds of the Term Loan can only be used for specific new processing equipment and leasehold improvements at its Kona, Hawaii facility. Until their disbursement for approved projects, the funds advanced are classified as restricted cash.
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.
Based upon our current operating plan, analysis of our consolidated financial position and projected future results of operations, we believe that our operating cash flows, cash balances, and working capital will be sufficient to finance current operating requirements, debt service requirements, and routine planned capital expenditures, for the next twelve (12) months. We expect liquidity in the remainder of fiscal 2014 to be generated from operating cash flows.
Outlook
This outlook section contains a number of forward-looking statements, all of which are based on current expectations. Actual results may differ materially.
Our strategic direction has been to position the Company as a world leader in the production and marketing of high-value natural products from microalgae. We are vertically aligned, producing raw materials in the form of microalgae processed at our 90-acre facility in Hawaii, and integrating those raw materials into finished products. In fiscal 2014, our primary focus has been to put a scalable foundation in place, improving our processes, systems, facilities and organization. We will continue putting increased emphasis on our Nutrex Hawaii consumer products to introduce them to a broader consumer market than in prior years. Our focus going forward will continue to be to leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. The foundation of our nutritional products is naturally cultivated Hawaiian Spirulina Pacifica® in powder and tablet form; and BioAstin® Hawaiian Astaxanthin™ antioxidant in extract, softgel caplet and micro-encapsulated beadlet form. Information about our Company and our products can be viewed at www.cyanotech.com and www.nutrex-hawaii.com. Consumer products can also be purchased online at www.nutrex-hawaii.com.
We are focused on sustainability of production levels in order to promote growth in our astaxanthin and spirulina product lines. We will continue to improve and expand this line to meet the demand of consumers. Cyanotech filed a New Dietary Ingredient (NDI) notice with the US FDA to allow a 12 mg dosage of BioAstin Natural Astaxanthin to cover the broad spectrum of potential users. The NDI was reviewed by the FDA without comment and Cyanotech’s BioAstin® Natural Astaxanthin is now permitted at 12 mg per day. This compares to other brands whose allowed levels range from 4 mg — 7.8 mg per daily serving. The Company has now introduced a new 12 mg BioAstin softgel capsule which is available as a bulk gelcap product and as a finished consumer product through Nutrex Hawaii. We will continue to promote the nutritional superiority of Hawaiian grown spirulina to maintain and expand market share. Significant sales variability between periods and even across several periods can be expected based on historical results.
Rising crude oil prices in prior years resulted in increased nutrient, utility and transportation costs which reflect and respond to oil prices. We feel that these conditions are likely to continue and/or reoccur from time to time in the future, and consequently, we are putting greater focus on prudent cost controls and expense avoidance.
Gross profit margin percentages going forward will be impacted by continued pressure on input costs and greater competition in the market place. This could cause margins to decline in future periods. We will continue to focus on health and well-being, promoting higher gross margin items. We are dedicated to continuous improvements in process and production methods to stabilize and increase production levels for the future.
Producing the highest quality microalgae is a complex biological process which requires balancing numerous factors including microalgal strain variation, temperature, acidity, nutrient and other environmental considerations, some of which are not within our control. An imbalance or unexpected event can occur resulting in production levels below normal capacity. The allocation of fixed production overheads (such as depreciation, rent and general insurance) to inventories is determined based on normal production capacity. When our production volumes are below normal capacity limits, certain fixed production overhead costs cannot be inventoried and are recorded immediately in cost of sales. In addition, when production costs exceed historical averages, we evaluate whether such costs are one-time-period charges or an ongoing component of inventory cost.
To manage our cash resources effectively, we will continue to balance production in light of sales demand, minimizing the cost associated with build-ups in inventory when appropriate. We could experience unplanned cash outflows and may need to utilize other cash resources to meet working capital needs. A prolonged downturn in sales could impair our ability to generate sufficient cash for operations and minimize our ability to attract additional capital investment which could become necessary in order to expand facilities, enter into new markets or maintain optimal production levels.
Our future results of operations and the other forward-looking statements contained in this Outlook, in particular the statements regarding revenues, gross margin and capital spending, involve a number of risks and uncertainties. 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, previously experienced imbalances in the highly complex biological production systems, together with volatile energy costs and rapidly changing world markets, suggest a need for continuing caution with respect to variables beyond our reasonable control. Therefore, we cannot, and do not attempt to, provide any definitive assurance with regard to our technology, systems, processes, location, or cost-effectiveness. Risk factors are discussed in detail in Item 1A in our Form 10-K report for the year ended March 31, 2013.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We do not enter into any transactions using derivative financial instruments or derivative commodity instruments and believe that our exposure to market risk associated with other financial instruments is not material.
Item 4. Controls and Procedures
(a) Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15 (d)-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Security and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the fiscal period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective to meet the objective for which they were designed and operate at the reasonable assurance level.
This Form 10-Q should be read in conjunction with Item 9A “Controls and Procedures” of the Company’s Form 10-K for the fiscal year ended March 31, 2013, filed June 24, 2013.
(b) Changes to Internal Control Over Financial Reporting
There was no change 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 quarterly period ended June 30, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
We are subject to legal proceedings and claims from time to time in the ordinary course of business. Although we cannot predict with certainty the ultimate resolution of legal proceedings and claims asserted against us, we do not believe that any currently pending legal proceeding to which we are a party is likely to have a material adverse effect on our business, results of operations, cash flows or financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
None.
a) The following exhibits are furnished with this report:
31.1 Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed as of August 12, 2013.
31.2 Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed as of August 12, 2013.
32 Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed as of August 12, 2013.
101 The following financial statements from Cyanotech Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CYANOTECH CORPORATION | |
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(Registrant) | |
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August 12, 2013 |
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By: |
/s/ Brent D. Bailey |
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(Date) |
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Brent D. Bailey |
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President and Chief Executive Officer and Director |
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August 12, 2013 |
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By: |
/s/ Jole Deal |
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(Date) |
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Jole Deal |
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Vice President — Finance & Administration and CFO |
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(Principal Financial and Accounting Officer) |
EXHIBIT INDEX
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Exhibit Number |
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Description |
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31.1 |
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Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed as of August 12, 2013. |
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31.2 |
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Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed as of August 12, 2013. |
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32 |
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Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed as of August 12, 2013. |
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101 |
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The following financial statements from Cyanotech Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements |