CYAN

Cyanotech is a $3.5M sub-$1 micro-cap that grows Hawaiian spirulina and BioAstin astaxanthin in open ponds on the Kona coast. The story the numbers tell is a business that lost its footing: revenue peaked at $36.0M in FY2022, then collapsed to ~$23M and has only limped back to $24.2M (+5.0%) in FY2025. Alongside that top-line erosion, the company flipped from ~$2.15M of net income in FY2022 to three consecutive annual losses — -$3.44M, -$5.27M, and -$3.20M. Yes, the FY2025 loss narrowed 39% and gross profit rose 15.7% to $6.88M (28.4% margin), so operations are healing at the margin — but the company is still burning: operating income was -$2.51M and operating cash flow was -$1.19M (down 162% YoY).

The balance sheet is where this becomes an avoid rather than a cheap-turnaround bet. Cash and equivalents fell 63.6% to just $257K. Against that sliver of liquidity sits $2.89M of current debt and $10.2M of current liabilities (up 19.7%), versus $10.5M of current assets — a current ratio barely above 1.0x that is heavily reliant on inventory, not cash. Stockholders' equity dropped 24.8% to $8.88M against a -$26.1M accumulated deficit, and ROE is -36.1%. With negative operating cash flow and virtually no cash cushion, the company almost certainly must lean on its credit facility or issue equity — and shares already grew 4.1% this year, so dilution risk is live and the P/S of 0.1x reflects distress, not a bargain.