KAILUA KONA, Hawaii — March 13, 2006 — Cyanotech Corporation (Nasdaq Capital Market: CYAN), and Earthrise Nutritionals, the world’s two leading suppliers of Spirulina, both ceased production of Organic Spirulina as of October 21, 2005 due to regulatory changes in the allowable nitrogen sources in the new organic standards.
The National Organic Standards Board of the US Department of Agriculture (NOSB) disallowed the use of a mined, water- soluble form of natural nitrogen that was previously allowed in Organic Spirulina farming, even though its use poses no potential problems for ground seepage or runoff due to both companies’ utilization of pond liners and closed loop systems for their microalgae farming.
Prior to October 2005, both companies spent years analyzing the nitrogen sources allowed under the new standard and concluded that switching to the allowable sources would compromise the safety of their Spirulina. “Teams of scientists from both companies concluded that the potential for very high bacterial levels and heavy metals is far too great under the new standard,” said Taro Ichimoto, Executive Vice President and Chief Operating Officer of Earthrise Nutritionals. “Although consumers like to see the word ‘organic’ on the label, we won’t produce an Organic Spirulina if it compromises the safety of the product.”
Dr. Gerald Cysewski, Cyanotech’s Founder and CEO, said, “Cyanotech and Earthrise are the world’s premier producers of Spirulina. Both companies thoroughly studied the situation and came to the conclusion that maintaining organic production under the new standard would lead to a lower quality product at a higher cost. Furthermore, with the use of the new nitrogen sources, Organic Spirulina produced under the new standard may not be considered vegetarian or vegan, a critical point of distinction to many Spirulina consumers.”
Cyanotech and Earthrise have begun a joint advertising campaign to educate retailers and the industry about this change. The companies had worked together previously in 2003 when they filed a joint GRAS petition to the FDA for Spirulina produced at their respective farms in California and Hawaii. The GRAS petition was reviewed by the FDA with no objection, which means that currently only Earthrise and Cyanotech Spirulina is recognized as safe by the FDA for use in all food, beverage and supplement applications. “If you want to be assured of having a high quality, safe Spirulina, you have to buy American,” said Dr. Cysewski.
About Cyanotech ---- Cyanotech Corporation, a world leader in microalgae technology, produces BioAstin® Natural Astaxanthin and Hawaiian Spirulina Pacifica®—all natural, functional nutrients that enhance human health and nutrition, providing significant antioxidant, anti-inflammatory and immune response benefits. NatuRose® Natural Astaxanthin is a natural pigment source that also promotes animal health and nutrition, primarily in aquaculture. Phycobiliproteins are fluorescent pigments used in medical diagnostic testing and research. Cyanotech produces these products from microalgae grown at its 90-acre facility in Hawaii using patented and proprietary technology. Cyanotech products are distributed to nutritional supplement, nutraceutical, cosmeceutical, and animal feed makers and marketers in more than 40 countries worldwide. Cyanotech was the first microalgae company in the world to obtain ISO 9001:2000 certification. Corporate data and product information are available at www.cyanotech.com
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 ---- Except for statements of historical fact, the statements in this news release are forward-looking. Such statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include, but are not limited to, general economic conditions, forecasts of sales in future periods, changes in sales levels to Cyanotech’s largest customers, weather patterns, production problems caused by contamination, risks associated with the acceptance of new products, competition, foreign exchange fluctuations, government regulation, and other factors more fully detailed in the Company’s recent Form 10-Q and annual form 10-K filings with the Securities and Exchange Commission.