Cyanotech to Restate Financial Statements

  
    
  
  
    
      Cyanotech Corporation (Nasdaq:CYAND) announced today that it has 
      determined to restate certain of its previously issued financial 
      statements. The restatement will include amounts correcting the Company’s 
      results for historical treatment of certain inventory related costs. 
      Additionally, the Company has identified certain minor out-of-period 
      items relating to recording Hawaii state tax credits and accruing 
      interest, which will also be recorded in the appropriate periods in the 
      restated consolidated financial statements. Further, the Company will 
      also reclassify certain certificates of deposit from cash to investments 
      in conjunction with the restatement.
    
    
      The Company identified the matter during the ordinary course of 
      reviewing the Company’s financial results for 
      the first quarter of fiscal year 2007. This was in conjunction with the 
      Company’s previously disclosed intent to adopt 
      Statement of Financial Accounting Standards No. 151 for the first 
      quarter of fiscal year 2007.
    
    
      The financial statements expected to be restated are the consolidated 
      balance sheets as of March 31, 2006 and 2005 and the consolidated 
      statements of operations, stockholders’ equity 
      and comprehensive income (loss), and cash flows for each of the years in 
      the three year period ended March 31, 2006. This includes the Company’s 
      unaudited quarterly financial statements during these years. The Company 
      said that these consolidated financial statements, as filed, contain 
      errors and should therefore not be relied upon. The related auditor 
      reports of KPMG LLP, the Company’s independent 
      registered public accounting firm, with respect to these consolidated 
      financial statements should also no longer be relied upon.
    
    
      The Company has informed its secured credit facility administrator of 
      its intention to restate its financial statements and of its failure to 
      submit its quarterly financial statements timely for the first and 
      second quarters of fiscal year 2007. The Company also requested and has 
      obtained waiver of debt covenants that may not be in compliance as a 
      result of restating previously issued financial statements and waiver as 
      related to untimely submission of its quarterly financial statements for 
      the first and second quarters of fiscal year 2007.
    
    
      The Company said that following completion of its work and that of its 
      independent registered public accounting firm, restatement of the Company’s 
      financial results will be effected as soon as practicable by the filing 
      of a Form 10-K/A.
    
  
Cyanotech Corporation (Nasdaq:CYAND) announced today that it has
determined to restate certain of its previously issued financial
statements. The restatement will include amounts correcting the
Company's results for historical treatment of certain inventory
related costs. Additionally, the Company has identified certain minor
out-of-period items relating to recording Hawaii state tax credits and
accruing interest, which will also be recorded in the appropriate
periods in the restated consolidated financial statements. Further,
the Company will also reclassify certain certificates of deposit from
cash to investments in conjunction with the restatement.

   The Company identified the matter during the ordinary course of
reviewing the Company's financial results for the first quarter of
fiscal year 2007. This was in conjunction with the Company's
previously disclosed intent to adopt Statement of Financial Accounting
Standards No. 151 for the first quarter of fiscal year 2007.

   The financial statements expected to be restated are the
consolidated balance sheets as of March 31, 2006 and 2005 and the
consolidated statements of operations, stockholders' equity and
comprehensive income (loss), and cash flows for each of the years in
the three year period ended March 31, 2006. This includes the
Company's unaudited quarterly financial statements during these years.
The Company said that these consolidated financial statements, as
filed, contain errors and should therefore not be relied upon. The
related auditor reports of KPMG LLP, the Company's independent
registered public accounting firm, with respect to these consolidated
financial statements should also no longer be relied upon.

   The Company has informed its secured credit facility administrator
of its intention to restate its financial statements and of its
failure to submit its quarterly financial statements timely for the
first and second quarters of fiscal year 2007. The Company also
requested and has obtained waiver of debt covenants that may not be in
compliance as a result of restating previously issued financial
statements and waiver as related to untimely submission of its
quarterly financial statements for the first and second quarters of
fiscal year 2007.

   The Company said that following completion of its work and that of
its independent registered public accounting firm, restatement of the
Company's financial results will be effected as soon as practicable by
the filing of a Form 10-K/A.