Wednesday, June 30, 1999

begins sales after
11 years; stock up

By Russ Lynch


Aquasearch Inc., the younger of two companies making specialized products from microalgae grown in ponds in Kona, said today it has begun selling its first product, an animal-feed additive containing natural astaxanthin.

In its commercial form, astaxanthin is a red pigment used mostly to enhance color in the flesh of farm-raised fish such as salmon.

Aquasearch shares have soared in recent days, after the company mailed a letter to shareholders citing medical research suggesting that astaxanthin could help prevent or treat diseases such as Parkinson's, Alzheimer's or even cancer. The company said it expects to market an astaxanthin product for human consumption soon.

The stock, traded on the over-the-counter bulletin board market, had been trading recently at around 17 cents a share.

On Thursday, three days after the date on the shareholders' letter, it jumped to 24 cents. Yesterday it was at 38 cents, more than double its level of recent months, with 1.3 million shares trading hands, well above its daily average volume for the past year of 56,951 shares. On Wall Street today closed at 46 cents, up 8 cents.

In today's statement, Aquasearch said it has begun selling its commercial astaxanthin product, Aquaxan, to a European business. It did not disclose terms.

In its most recent financial report, filed June 14 with the Securities & Exchange Commission, Aquasearch -- which describes itself as a development-stage enterprise -- reported a loss of $1.1 million for its second quarter which ended April 30. In the year-earlier quarter, the company lost $555,000.

In the fiscal year through Oct. 31, Aquasearch lost $7.1 million and by the end of April this year it had an accumulated deficit of $8.9 million. The company, founded in 1988, said its losses were from expenses on research and development and general and administrative costs.

The other Kona microalgae company, Cyanotech Corp., also has reported losses as it develops its market. Cyanotech was incorporated in 1983 and had its first sales in 1985.

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