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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarterly Period Ended December 31, 1995
Commission File Number 0-14602
CYANOTECH CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 91-1206026
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
73-4460 Queen Kaahumanu Hwy. #102, Kailua-Kona, HI 96740
(Address of principal executive offices)
(808) 326-1353
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes XX No
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Number of common shares outstanding as of January 15, 1995:
Title of Class Shares Outstanding
-------------- ------------------
Common stock - $.005 par value stock 9,908,275
Transitional Small Business Disclosure Format: Yes ; No X
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CYANOTECH CORPORATION
FORM 10-QSB/A
INDEX
PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K.................................................3
SIGNATURES . . ............................................................................4
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are furnished with this report:
3.1 Bylaws of the Registrant, as amended.
10.1 Sub-Lease Agreement between the Company and the Natural
Energy Laboratory of Hawaii Authority dated December 28,
1995.
10.2 Supply and Exclusive Marketing Agreement between the
Company and Nutrition Gandalf dated July 8, 1994.
Confidential portions of this exhibit have been omitted
and filed separately with the Commission.
10.3 Term Loan Agreement dated July 11, 1996 between Satoshi
Sakurada and the Company.
10.4 Management Incentive Plan dated May 18, 1995.
Confidential portions of this Exhibit have been omitted
and filed separately with the Commission.
27 Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
December 31, 1995.
3
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CYANOTECH CORPORATION (Registrant)
March 14, 1996 By: /s/ Gerald R. Cysewski
- ------------------- -----------------------------------------
(Date) Gerald R. Cysewski
Chairman of the Board,
President and Chief Executive Officer
By: /s/ Ronald P. Scott
-----------------------------------------
Ronald P. Scott
Executive Vice President - Finance &
Administration, Secretary and Treasurer
(Principal Financial and
Accounting Officer)
4
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[LETTERHEAD CYANOTECH CORPORATION]
SUPPLY AND EXCLUSIVE MARKETING AGREEMENT
This agreement is made this 8th day of July, 1994 between Cyanotech
Corporation, (including its wholly owned subsidiary Nutrex, Inc.)
(Cyanotech), a Nevada corporation having its principle place of business at:
P.O. Box 4384, Kailua-Kona, Hawaii 96745, and Nutrition Gandalf (Gandalf)
having its principle place of business at 2110 Cabot, Montreal, Quebec,
Canada H4E1E4.
1) GRANTING OF EXCLUSIVE MARKETING RIGHTS Cyanotech hereby grants Gandalf
exclusive marketing rights for Products, as listed on Exhibit A, to
use its best efforts to sell the Products in the Area of Primary
Responsibility described in paragraph 2, on the terms and conditions set
forth in this Agreement. Cyanotech agrees not to knowingly sell directly or to
knowingly ship to any company or person inside the boarders of the
countries in the Area of Primary Responsibility.
2) AREAS OF PRIMARY RESPONSIBILITY
a) CYANOTECH BULK PRODUCTS. Area of Primary Responsibility (the Area) as
used herein for the sale of Cyanotech bulk products, as listed on Exhibit A,
means the countries of Canada and Austria. Gandalf agrees not to sell
directly to or ship to any company or person outside the borders of the
countries in the Area of Primary Responsibility without advance written
authorization from Cyanotech.
b) NUTREX PRODUCTS. Area of Primary Responsibility (the Area) as used
herein for the sale of Nutrex products, as listed on Exhibit A, means the
country of Canada. Gandalf agrees not to sell Nutrex products directly to any
company or person outside the borders of the country in the Area of Primary
Responsibility without advance written authorization from Cyanotech.
3) GUARANTEED SUPPLY OF PRODUCTS Cyanotech guarantees to sell to Gandalf its
Spirulina Products, as listed on Exhibit A, and will use its best efforts to
supply Gandalf at least the quantities as shown on Exhibit B.
4) GUARANTEED PURCHASE OF PRODUCTS Gandalf guarantees to purchase from
Cyanotech Spirulina Products, as listed on Exhibit A, and will use its best
efforts to purchase from Cyanotech at least the quantities as shown on
Exhibit B.
5) PRICES AND PAYMENT TERMS Selling prices of Cyanotech Products will be the
current published prices of Cyanotech. Current prices, FOB Kona Hawaii are
[*] per kg for bulk Spirulina Pacifica powder and [*] for bulk Spirulina
Pacifica 1000 mg tablets. [*] Cyanotech products which are sold by Gandalf
under the Nutrex name and/or trademark. [*]
[*CONFIDENTIAL TREATMENT REQUESTED*]
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2
[*]
6) ADDITIONAL TERMS
a) Gandalf will be responsible for and bear all costs for all sales
promotion of Nutrex products including printed material, radio and television
advertisements, and demonstrations.
7) CYANOTECH SPIRULINA ONLY SPIRULINA SOLD BY GANDALF For the duration of
this agreement, Gandalf agrees that only Spirulina Products manufactured by
Cyanotech shall be sold, and/or used in products which Gandalf sells in the
Area.
8) TRADEMARKS The trademark Spirulina Pacifica and all other present or
future trademarks of Cyanotech may be displayed and used by Gandalf in the
sale and promotion of the Products in a manner identical or similar to
Cyanotech's own practice. Such trademarks are and shall remain the sole
property of Cyanotech and any use thereof by Gandolf shall be limited to the
Cyanotech Products, or such other products as may be authorized by Cyanotech.
It is expressly agreed that Gandalf's use of Cyanotech trademarks is with and
on the consent of Cyanotech and that Gandalf shall acquire no rights in said
trademarks because of its use thereof.
9) GANDALF TO INDEMNIFY CYANOTECH Gandalf agrees to indemnify and save
harmless Cyanotech for all loss and damages (including attorney's fees), that
either or both may sustain or become liable for by reason of claims against
it or them resulting from unauthorized acts or statements of Gandalf or its
employees agents or representatives.
10) CYANOTECH TO INDEMNIFY GANDALF Cyanotech agrees to indemnify and save
harmless Gandalf for all loss and damages (including attorney's fees), that
either or both may sustain or become liable for by reason of claims against
it or them resulting from unauthorized acts or statements of Cyanotech or its
employees agents or representatives.
11) INSURANCE During the term of this Agreement, both Gandalf and Cyanotech,
each on their own accord, will maintain, at their own expense, product
liability insurance with a minimum liability of $1,000,000. Proof of such
insurance will be provided upon written request by the other party.
12) TERM AND TERMINATION This Agreement shall be in force and effective
beginning as of the date first above written and shall continue in force from
the date of this agreement unless terminated as provided below:
a) In the event of a default by Gandalf in any of the obligations which
it undertakes by entering into this Agreement and/or purchasing Products from
Cyanotech, Cyanotech shall have the right to terminate this Agreement thirty
(30) days after sending a notice in writing to Gandalf specifying the nature
of the default and Cyanotech's intention to terminate, unless
[*CONFIDENTIAL TREATMENT REQUESTED*]
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within said thirty (30) day period, Gandalf shall have cured the default to
Cyanotech's satisfaction.
b) This Agreement shall terminate one day prior to Gandalf becoming
insolvent, or bankrupt or Gandalf's business being placed in the hands of a
receiver or trustee for the benefit of creditors, whether by voluntary act of
Gandalf or otherwise.
c) Gandalf's exclusivity in a country of its Area of Primary
Responsibility will terminate if Gandalf does not purchase at least 80% of
the annual quantity of the Products for that country as specified in Exhibit
B. At the request written of Cyanotech, Gandalf will, within 10 days after
receiving such request, provide documentation to substantiate the quantity of
products shipped to each country.
d) This Agreement will terminate four (4) years after the date first
above written. At the end of the first year of this agreement, Cyanotech and
Gandalf agree to negotiate in good faith to extend or modify this agreement
upon its termination. In this manner both Cyanotech and Gandalf will have as
much as three years notice should there be any change to the supply and
exclusive marketing arrangement.
13) FAILURE TO ENFORCE PROVISIONS The failure to either party to enforce at
any time or for any period of time the provisions hereof shall not be
construed to be a waiver of such provisions or right of such party thereafter
to enforce such provisions.
14) FORCE MAJEURE Neither party hereto shall be responsible for failure or
delay in the performance of any of its obligations hereunder or under any
purchase contract(s) made between Cyanotech and Gandalf hereunder by reason
of force majeure, including, but not limited to, industrial disputes, riots,
mobs, fires, floods, wars, shortage of labor, power, fuel, raw materials, or
transportation, laws, regulations, orders or administrative guidelines of any
government or its agencies or any other circumstances beyond the control of
such party.
15) GANDALF NOT AGENT OR LEGAL REPRESENTATIVE OF CYANOTECH This Agreement
does not constitute Gandalf the agent or legal representative of Cyanotech
for any purpose whatsoever. Gandalf is not granted any right or authority to
assume or to create any obligation or responsibility, express or implied, on
behalf of or in the name of Cyanotech or to bind it in any manner or thing
whatsoever.
16) LIABILITY Should either Cyanotech or Gandalf breach any of the terms of
this agreement, the damaged party has the right to collect unspecified
damages from the offending party and the offending party has the liability to
pay such unspecified damages which resulted from the breach of terms.
17) ENTIRE AGREEMENT This instrument cancels and supersedes any and all
previous agreements, arrangements, or understandings between the parties, and
contains the entire agreement between the parties respecting the subject
matter hereof, and any representations, promises or conditions not
incorporated herein shall not be binding upon Cyanotech until signed on its
behalf by an officer of Cyanotech nor shall any modification, renewal,
termination or waiver of any of the provisions herein contained, or any
future representation, promise, warranty of condition in connection with the
subject matter hereof be binding upon Cyanotech unless made in writing and
signed on its behalf by one of its officers.
18) ARBITRATION All disputes, controversies, differences, or claims arising
out of this
[*CONFIDENTIAL TREATMENT REQUESTED*]
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4
Agreement, or the breach thereof, are to be finally settled by final and
binding arbitration in the state of California in accordance with the rules
of the American Arbitration Association then existing. The losing party is to
bear the cost of its and the prevailing party's reasonable attorney's and
expert witness fees. Gandalf and Cyanotech agree that no party is to request
and the arbitrator is to have no authority to award punitive or exemplary
damages to the prevailing party against the other party.
19) APPLICABLE LAW This agreement shall be construed in accordance with the
laws in the state of California.
20) NOTICES Any payment, notice or other communication required or permitted
to be made or given by either party hereto pursuant to this Agreement shall
be sufficiently made or given on the date of mailing if sent to such party by
registered or certified air mail, postage prepaid, addressed to it at its
address set forth above, or to such other address as it shall designate by
written notice given to the other party at said address.
21) AGREEMENT NOT ASSIGNABLE This Agreement constitutes a personal contract
between Cyanotech and Gandalf and Gandalf shall not transfer or assign any
part thereof without Cyanotech's written consent.
22) SEVERABILITY In the event that any part of this Agreement between
Cyanotech and Gandalf shall be found to be illegal, or a violation of public
policy, or for any reason unenforceable in law. Such finding shall in no
event invalidate any other part of this Agreement.
The signed officers of Cyanotech and Gandalf have the personal obligation to
make their respective Board of Directors, any new management and any new
owners aware of this agreement. Any new management or owners of either
Cyanotech and Gandalf will have the responsibility to abide by this agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement in
duplicate as of the day and year first above written.
Cyanotech Corporation Nutrition Gandalf
_____________________ _________________
By /s/ Gerald R. Cysewski By /s/ Charles Goulet
Its President & CEO Its Directeur Finances et Secretaire
[*CONFIDENTIAL TREATMENT REQUESTED*]
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EXHIBIT A
CYANOTECH BULK PRODUCTS
1) Spirulina Pacifica -TM- bulk powder
2) Spirulina Pacifica bulk Crystal Flakes -TM-
3) Spirulina Pacifica -TM- bulk 1,000 mg tablets
4) Spirulina Pacifica -TM- bulk 500 mg tablets
NUTREX PRODUCTS
1) Spirulina Pacifica -TM- powder
2) Spirulina Pacifica -TM- tablets
3) Hawaiian Energizer powder
4) Hawaiian Energizer tablets
5) Papaya Pacifica -TM- tablets
6) Spirulina Pacifica Crystal Flake -TM-
[*CONFIDENTIAL TREATMENT REQUESTED*]
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EXHIBIT B
Gandalf Purchases of CYANOTECH BULK PRODUCTS Required to Maintain Area
Exclusivity and Agreement Renewal for Cyanotech Bulk Products. (Numbers in
1,000 Kilograms)
Country [*]
_______
Canada [*]
Austria [*]
[*] [*]
_______
Total [*]
[*] [*]
[*]
[*CONFIDENTIAL TREATMENT REQUESTED*]
