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(NASDAQ:CYAN) Pending Breakout and or Acquisition? The Little Engine That Could

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April 15, 2011 – Comments (24) | RELATED TICKERS: CYAN , BMY , ABT


(NASDAQ:CYAN)  Pending Breakout and or Acquisition? The Little Engine That Could.


Cyanotech has been around for decades but has never been able to shake its perception as a penny stock or off off-broadway neutraceutical/pharmaceutical, in addition to its February 2010 troubling announcement of the abrupt and unexplained resignation of its President and CEO "...effective February 27, 2010, the Board of Directors elected to remove Andrew H. Jacobson from his responsibilities as President and Chief Executive Officer of the Company. Effective February 27, 2010, the Board of Directors appointed David I. Rosenthal, age 55, to serve as the Company's Interim President and Chief Executive Officer until the Board has selected and employed an individual to serve as the Company's new President and Chief Executive Officer; a search has been initiated..." (2.) 


Cyanotech announced on November 8th, 2010 the hiring of Brent Bailey, formerly "...President and Chief Operating Officer of Pharmavite LLC, a $500-million subsidiary of Otsuka Pharmaceutical Company, he and his team drove the Nature Made brand to the #1 position in mass market nutritional supplements and built Pharmavite into an industry leader...".

Given CYANs potential and current dominance of Astaxanthin production, track record, patents, recent back to back national exposure on Dr. Oz in re: Astaxanthin and Spirulina potential, and Brent Bailey's recent nomination as CEO, CYAN should represent a possibly superior undervalued asset play.  CYAN should simply be at a tipping point of an imminent acquisition by a major pharma/neutraceutical or Private Equity firm, and breakout due to its modest valuation and demand esp of its Astaxanthin, of which, CYAN private labels for many companies including Vitamin Shoppe (3.) (NYSE:VSI)...significantly all backed by recent scientific endorsements of its astaxanthin and spirulina. It all comes down to how Brent Bailey negotiates this tipping point $taring him in the face in my opinion.

 

Key (recent) Events

2/16/2011 UC Davis Research Study Indicates that Cyanotech’s Spirulina Pacifica® May Counter Anemia and Declining Immune Function in Persons Over Age 50. Source: Cellular & Molecular Immunology, January 31, 2011.

12/1/2010 Natural Astaxanthin Praised by Dr. Joseph Mercola for Broad Health Benefits. 


Key Metrics/Facts


Fiscal year ended March 31, 2011* Note: As of this writing Cyanotech has not announced Annual Shareholders Meeting, Q4/FY 2011 Earnings Announcement, DEF 14/A...

SEC Form 10-Q for the period ending December 31, 2010

Stock Price: $3.59 (as of April 15, 2011 market close)

Market Cap $ 19.35M *

Current Ratio: 4.02*

Shares Outstanding:  5.39M*

Total Cash  $729,000.00 (mrq)*

ROE: 7.13%*


Competition


AstaFX AstaREAL (Purity Products)

AstaFactor  (NASDQ:MRPI) is effectively insolvent yet owns AstaFactor (Mera Pharmaceuticals)

Zanthin (Valensa).



Studies


1. UC Davis Research Study Indicates that Cyanotech’s Spirulina Pacifica® May Counter Anemia and Declining Immune Function in Persons Over Age 50. Source: Cellular & Molecular Immunology, January 31, 2011.


2. globalnatural MEDICINE 

"...Cyanotech Corporation reports that their product, Bioastin, has been shown in double blind, placebo-controlled studies to be beneficial in rheumatoid arthritis (RA) and carpal tunnel syndrome (CTS). The clinical trials were conducted by Dr. Gene Spiller at the Health Research Studies Center in Los Altos, California, and were double-blinded, placebo-controlled studies. The RA clinical trial involved 21 patients with a group of 14 randomized patients consuming three BioAstin soft gel capsules daily with each meal for eight weeks and seven randomized patients consuming a placebo. The CTS clinical trial involved 20 patients with a group of 13 randomized patients consuming three BioAstin soft gel capsules daily with each meal for eight weeks and seven randomized patients consuming a placebo. In the RA study, subjects completed a health assessment questionnaire at the beginning of the study and after four and eight weeks. In the CTS study, subjects completed a Symptom Severity Survey at the same time frames



References:

* Yahoo! Finance Key Statistics for (NASDAQ:CYAN).

1. (May 19, 2008) Cyanotech names Andrew Jacobson president, CEO

2. (February 27, 2010) Implu.com   

3. Vitamin Shoppe's Astaxanthin (Supplement Facts), Cyanotech Bioastin. 

24 Comments – Post Your Own

#1) On April 16, 2011 at 8:00 AM, gnulaw (57.56) wrote:



>> the abrupt and unexplained resignation (removal) 1. of its President and CEO Andrew H. Jacobson

1. SEC FORM 8-K/A Filed February 27, 2010

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#2) On April 16, 2011 at 8:16 AM, gnulaw (57.56) wrote:

>>Cyanotech has been around for decades but has never been able to shake its perception as a penny stock or off off-broadway neutraceutical/pharmaceutical...  

 

...in addition to CYAN management's and Board's failure to create shareholder value over ten years.

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#3) On April 16, 2011 at 9:12 AM, gnulaw (57.56) wrote:





>> and breakout due to its modest valuation and demand esp of its Astaxanthin, of which, CYAN [private labels] for many companies including Vitamin Shoppe (3.) (NYSE:VSI)..

[CORRECTION]  "...Cyanotech produces these products from microalgae grown at its 90-acre facility in Hawaii using patented and proprietary technology and distributes them to nutritional supplement, nutraceutical and cosmeceutical makers and marketers in 58 countries on six continents..." [emphasis added] Source: Cyanotech.

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#4) On April 21, 2011 at 7:15 PM, gnulaw (57.56) wrote:

(April 21, 2011) Michael A. Davis Named Chairman of the Board of Directors of Cyanotech (NASDAQ:CYAN)

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#5) On April 21, 2011 at 7:29 PM, gnulaw (57.56) wrote:

Wilmington Trust, 13D Shareholder, owns 15.5% of CYAN common per said February 14, 2011 13G filing.

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#6) On April 28, 2011 at 5:56 PM, gnulaw (57.56) wrote:

AS A MATTER OF RECORD Cyanotech Management has still not announced its q4/fy 2011 conference call date for year ending March 31, 2011...

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#7) On May 09, 2011 at 4:06 PM, gnulaw (57.56) wrote:

May 9, 2011 - (NASDAQ:CYAN) up 11.84 % on 1.6 X ADV (3 mo) on no news during blackout period.

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#8) On May 20, 2011 at 6:04 PM, gnulaw (57.56) wrote:




AS A MATTER OF RECORD the Cyanotech Board of Directors have not announced a date for their Q4/FY 2011 conference for year ending March 31, 2011 as of May 20, 2011. This is simply unacceptable and will not be tolerated. 

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#9) On May 20, 2011 at 6:10 PM, gnulaw (57.56) wrote:

[CORRECTION] AS A MATTER OF RECORD the Cyanotech Board of Directors have not announced a date for their Q4/FY 2011 conference [call] for year ending March 31, 2011 as of May 20, 2011. This is simply unacceptable and will not be tolerated. 

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#10) On May 27, 2011 at 8:31 PM, gnulaw (57.56) wrote:



Gary Schick, on behalf of the Rudolph Steiner Foundation Files SEC SCHEDULE 13G today, May 27, 2011. RSF owns 659,366 shares or 12.23% of CYAN's common stock.

 

Top Three Insiders:

Wilmington Trust Company 938,419 shares (17.4%)

Rudolph Steiner Foundation 659,366 shares (12.23%)

Michael Davis, Chairman, CYAN, 346,663 (Direct Holdings) (6.4%) Indirect Holdings

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#11) On June 01, 2011 at 4:59 PM, gnulaw (57.56) wrote:



13D Shareholder, VItaeLab, dumped their common stock position in CYAN on May 17th... Form Type: SC 13D/A
Filing Date: 5/31/2011

"...On May 17, 2011, the Reporting Persons sold all of the shares of Common Stock of the Issuer they owned in a privately negotiated transaction.  The Reporting Persons ceased to be the beneficial owners of more than five percent of the Common Stock of the Issuer on May 17, 2011.  Based on the transaction, the Reporting Persons do not beneficially own, nor do they have the power to dispose or direct the disposition of or the power to vote or direct the voting of, any shares of Common Stock of the Issuer. .."

Andres Kongsgaard Flaaten

VitaeLab AS

Enebakkveien 117, 0680Oslo, Norway

+47 815 69 060 

 

 

Reference: 

SCHEDULE 14A 7/23/2010

VitaeLab AS, Helse AS, Telecom AS, Andres Kongsgaard Flaaten, Kenneth F. Bern, as a group (“VitaeLab Group”)

507,666 (3) 9.7%

 

(3)  Per Schedule 13D/A dated June 11, 2008, jointly filed by the reporting persons, due to certain affiliations and relationships among the reporting persons, such reporting persons may be deemed to beneficially own the same securities acquired by one of the reporting persons. Address is c/o VitaeLab AS, Enebakkveien, 117, 0680 Oslo, Norway. 

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#12) On June 02, 2011 at 5:29 PM, gnulaw (57.56) wrote:

AS A MATTER OF RECORD the Cyanotech Board of Directors have not announced a date for their Q4/FY 2011 conference [call] for year ending March 31, 2011 as of June 2, 2011. This is simply unacceptable and will not be tolerated by CYAN non-insider shareholders.

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#13) On June 08, 2011 at 5:40 PM, gnulaw (57.56) wrote:

 

Breaking...Thomas F. Chen named to CYAN's Board of Directors. Cyanotech Files SEC Form 8-K moments ago... 

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#14) On June 08, 2011 at 5:40 PM, gnulaw (57.56) wrote:

 

Breaking...Thomas F. Chen named to CYAN's Board of Directors. Cyanotech Files SEC Form 8-K moments ago... 

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#15) On June 17, 2011 at 7:01 AM, gnulaw (57.56) wrote:

AS A MATTER OF RECORD the Cyanotech Board of Directors , senior management, and controlling shareholders, have not announced a date for their Q4/FY 2011 conference [call/numbers release for year ending March 31, 2011 as of June 17, 2011. The non-insider shareholder(s) allege violations of State and Federal Securities disclosure statutes including but not limited to SEC Rule 10b-5. This is simply an unacceptable corporate governance and transparency fail, will accordingly not be tolerated by CYAN non-insider shareholders and will be vigorously pursued with all legal recourse.

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#16) On June 28, 2011 at 7:19 PM, gnulaw (57.56) wrote:



(June 23, 2011) Cyanotech (NASDAQ:CYAN) [finally] Reports Financial Results for the Fourth Quarter and Fiscal Year 2011 March 31, 2011.

Fourth Quarter 2011
"...For the fourth quarter of fiscal 2011 revenues were $5,218,000 compared to $3,814,000 for the fourth quarter of fiscal 2010. Gross profit was $1,798,000, with gross profit margin of 34%, compared to gross profit of $1,387,000 and gross profit margin of 36%. Net income was $795,000 or $.14 per diluted share, including a non-cash tax benefit of $552,000 due to a reduction in the deferred tax valuation allowance and recording of a net deferred tax asset, compared to net loss of $226,000 or $(0.04) per diluted share last fiscal year. Income before the tax benefit was $216,000 for the fourth quarter of 2011 compared to a loss of $230,000 in 2010.

Fiscal Year 2011
For the fiscal year ended March 31, 2011, revenues were $16,827,000 compared to revenues of $15,742,000 for the year ended March 31, 2010. Gross profit was $6,341,000, with gross profit margin of 38%, compared to gross profit of $6,633,000 and gross profit margin of 42% in fiscal 2010. Net income was $1,730,000 or $.32 per diluted share, including a non-cash tax benefit of $552,000 due to a reduction in the deferred tax valuation allowance and recording of a net deferred tax asset, compared to $1,391,000, or $0.26 per diluted share fiscal year 2010. Income before the income tax benefit for fiscal 2011 was $1,163,000 compared to $1,415,000 in 2010..."

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#17) On July 03, 2011 at 12:00 PM, gnulaw (57.56) wrote:

AS A MATTER OF RECORD

Cyanotech (NASDAQ:CYAN) Management, Insiders, Board of Directors, and Senior Officers, did not announce fy 2011 ending March 31 2011 numbers until one week before the end of q1 2012. Also note there was no conference call.

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#18) On August 07, 2011 at 4:22 PM, gnulaw (57.56) wrote:

[CORRECTION/CLARIFICATION]>>Competition Zanthin (Valensa).

CYAN actually entered into an agreement with Valensa Cyanotech formally disclosed on January 31, 2008. 

 

"...Cyanotech has also formed an important relationship with Valensa International (www.valensa.com), the world leader in supercritical CO2 extraction.  Valensa’s state-of-the-art facility is capable of extracting large volumes of Haematococcus microalgae under very high pressure without the use of solvents to produce a very high quality Astaxanthin oleoresin.  A contract has been signed between Valensa and Cyanotech to guarantee Valensa supply of Cyanotech’s Haematococcus to produce Valensa’s trademarked Astaxanthin product, “Zanthin®.”  On its part, Cyanotech is availing itself of Valensa’s outstanding extraction capabilities to produce its “BioAstin®” raw material.  Both companies view this relationship as a significant step toward bringing the benefits of Astaxanthin to a growing consumer base, and in ensuring the very highest quality product..."

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#19) On August 07, 2011 at 4:41 PM, gnulaw (57.56) wrote:

...and Valensa's Feb14, 2008 follow-on release (per previous comment #18):

 

"...Valensa International announced today that it has increased its capacity for the extraction of Haematococcus pluvialis for the manufacture of finished all-natural astaxanthin. The move was made in light of recently growing demand for a high-quality astaxanthin in North America, Asia and Europe that is both pesticide-free and allergen-free conditions that are only possible with select raw material sources and extraction facilities. In addition to market demand, a recently formed Strategic Alliance with Cyanotech Corporation (Kona, HI), where Valensa provides extraction services of raw material provided by Cyanotech, will require increased capacity to facilitate orderly growth of supply for the market and increased uptake of Valensa's own ZANTHIN(R) natural astaxanthin brand...

...According to Dr. Rudi Moerck, President of Valensa, high-quality astaxanthin biomass and strict quality control in manufacturing are the two key elements for creating a finished astaxanthin product that meets or exceeds the quality and regulatory requirements of world markets. "There is growing interest and excitement about the potential of astaxanthin - the world's most potent antioxidant with clinical trial data indicating support in areas such as eye health, neurological health, immune support, inflammation reduction and skin health. Recently, the demand for a high-quality, pesticide-free source of the product has outstripped supply. The Strategic Alliance that we have formed with Cyanotech Corporation and our move to increase extraction capacity will help meet market requirements for this growing demand," he said. "Valensa has provided extraction services to Cyanotech for some time now and we were impressed by their biomass purity and pesticide-free profile," he said. "Our company has previously qualified a number of astaxanthin biomass sources, but product purity and overall product integrity led us to choose Cyanotech as our principal algae biomass supplier." Valensa's ZANTHIN(R) natural astaxanthin product has been marketed in the United States for over a decade and was the first astaxanthin extract to have Novel Foods approval in the European Union in July 2004. "These approvals require a pesticide-free, solvent-free and allergen-free astaxanthin. By qualifying our suppliers and screening our raw materials, through the use of supercritical carbon dioxide extraction technology and through our superior quality management, we are uniquely positioned to deliver the astaxanthin products required by world markets,"said Dr. Moerck..."

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#20) On August 08, 2011 at 7:39 PM, gnulaw (57.56) wrote:

DOW -5.55%..NASDAQ -6.90%..S&P 500 -6.66%..CYAN +0.31%...

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#21) On August 24, 2011 at 1:58 AM, gnulaw (57.56) wrote:

(Aug 11 2011)  Cyanotech (NASDAQ:CYAN) Q1 2012...record net sales...cash $3M +258%...Astaxanthin Sales +97%

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#22) On September 03, 2011 at 1:06 PM, gnulaw (57.56) wrote:

>>February 2010 troubling announcement of the abrupt and unexplained resignation of its President and CEO "...effective February 27, 2010, the Board of Directors elected to remove Andrew H. Jacobson from his responsibilities as President and Chief Executive Officer of the Company..."

Perhaps Item 5.05 and Exhibit 14.1 pursuant to CYAN's 8-K filing yesterday provides some insight as to what happened to CYAN's previous President and CEO?

Form 8-K for CYANOTECH CORP

2-Sep-2011

Amendment or Waiver to Code of Ethics, Submission of Matters to a Vote of Security


Item 5.05 Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics.


(a) On August 29, 2011, the Board of Directors of Cyanotech Corporation (the "Company") considered and adopted a Board of Directors Code of Conduct (the "Directors Code of Conduct") that sets forth the Board of Directors' standards of conduct relating to, among other things, conflicts of interest, business relationships with directors, use of corporate information, opportunities and assets, confidentiality, compliance with laws, rules and regulations, fair dealing, accountability, and wavier. The Directors Code of Conduct shall apply to the Board of Directors in addition to the Company-wide Corporate Code of Conduct and Ethics that is currently in place and that applies to all employees. The Directors Code of Conduct and the Corporate Code of Conduct and Ethics are both available for viewing online at http://www.cyanotech.com/investors/investors_corpgov.html..."

Source: SEC Form 8K Files Friday September 02, 2011 http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001104659%2D11%2D050191%2Etxt&FilePath=%5C2011%5C09%5C02%5C&CoName=CYANOTECH+CORP&FormType=8%2DK&RcvdDate=9%2F2%2F2011&pdf=

 

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#23) On September 17, 2011 at 9:37 AM, gnulaw (57.56) wrote:

>>Cyanotech announced on November 8th, 2010 the hiring of Brent Bailey, formerly "...President and Chief Operating Officer of Pharmavite LLC, a $500-million subsidiary of Otsuka Pharmaceutical Company, he and his team drove the Nature Made brand to the #1 position in mass market nutritional supplements and built Pharmavite into an industry leader...".

Question: What was Brent Bailey doing from November 2005 - February 2010? 

See Brent Bailey LinkedIn http://www.linkedin.com/in/brentbailey32

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#24) On October 11, 2011 at 12:06 PM, gnulaw (57.56) wrote:

 (October 11, 2011) Cyanotech Announces 33% Expansion of Astaxanthin Production Capacity

(October 07, 2011)  EID Parry completes acquisition of (Cyanotech:CYAN) strategic alliance Valensa

 

 

 


 

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