The clock struck twelve on Cyanotech Corp. today. Cyanotech will be
delisted next monthBy Dave Segal
dsegal@starbulletin.comThe Kona aquaculture company, given three months by the Nasdaq Stock Market to boost its stock price to $1, was unable to do so and will be delisted in mid-September.
Cyanotech Chief Financial Officer Ron Scott said the company, which makes nutritional products Spirulina and BioAstin out of microalgae as well as the animal feed NatuRose, applied earlier this week for the company to be listed on the Nasdaq SmallCap Market.
The company's stock, which closed unchanged today at 55 cents, needed to maintain a minimum bid price of $1 or higher for 10 consecutive trading days prior to Sept. 16 in order to remain listed on the Nasdaq National Market. However, since Monday is a holiday, there are only nine trading days left after today before the Sept. 16 deadline. Cyanotech's stock has been below $1 for 83 consecutive trading days.
"From a shareholders' perspective, I don't see any change in liquidity (by switching to the SmallCap)," Scott said. "The market makers (dealers who buy and sell the shares) all stay the same. The only real difference is the daily quote is not printed in as many newspapers around the country."
As of July 31, there were 3,040 companies listed on the Nasdaq National Market and 803 on the Nasdaq SmallCap Market.
One of the main factors weighing down the stock has been $1.2 million in convertible debentures that the company is obligated to pay on Oct. 31. The company's auditor, KPMG LLP, has expressed doubt whether the company can continue as a going concern due to that debt and recurring losses from operations. Cyanotech is seeking outside financing.
"We're still in discussions with several interested potential investors," Scott said. "It's still moving forward. Nothing has been finalized. At this point, we're still optimistic we'll get that resolved."
Cyanotech reported in its June 30 quarterly filing to the Securities and Exchange Commission that it had $666,000 in cash and cash equivalents and $1.1 million in working capital.
Cyanotech, which has about 5,000 shareholders, moved to the Nasdaq National Market from the Nasdaq SmallCap Market in March 1996. Four months earlier, Cyanotech's stock hit its all-time high of $15 during intraday trading on the Nasdaq SmallCap.
The company hit its peak in fiscal 1997 when it had a profit of $4.2 million on $11.4 million in sales. But things turned sour when Cyanotech's largest customer, a multilevel marketing company in China, essentially went out of business after the Chinese government banned multilevel marketing. That cost Cyanotech about 40 percent of its sales and the company has been in the red since. In its last fiscal year that ended March 31, 2002, Cyanotech had a loss of $2.6 million on $8.2 million in sales.
Nasdaq issued a 90-calendar-day delisting warning to Cyanotech after the company's stock had traded below a $1 minimum bid price for 30 consecutive business days. Its stock, trading at 81 cents when Cyanotech made the warning public June 18, hit an intraday low of 40 cents on June 27 and has traded between 55 and 70 cents for the last month.
Cyanotech's stock, which will continue trading on the Nasdaq National Market until the delisting takes effect around Sept. 16, will have until June 16, 2003, on the Nasdaq SmallCap to regain admittance to the larger Nasdaq market. To get relisted, its stock will have to trade at $1 or higher for 30 consecutive days.