Cyanotech (CYAN) 10-Q 10 Nov 16 2017 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Sep. 30, 2016	Nov. 10, 2016
Document Information [Line Items]
Entity Registrant Name	Cyanotech Corp
Entity Central Index Key	768,408
Trading Symbol	cyan
Current Fiscal Year End Date	--03-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		5,668,881
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Mar. 31, 2016
Current assets:
Cash and cash equivalents	$ 2,055	$ 1,240
Accounts receivable, net of allowance for doubtful accounts of $49 at September 30, 2016 and $136 at March 31, 2016	3,053	2,983
Inventories, net	7,459	7,856
Deferred tax assets	74	74
Prepaid expenses and other current assets	761	502
Total current assets	13,402	12,655
Equipment and leasehold improvements, net	17,145	17,796
Other assets	374	392
Total assets	30,921	30,843
Current liabilities:
Line of credit	611
Current maturities of long-term debt	605	574
Customer deposits	50	117
Accounts payable	4,184	4,000
Accrued expenses	1,503	1,430
Total current liabilities	6,953	6,121
Long-term debt, net	6,549	6,790
Deferred tax liabilities	74	74
Deferred rent	38	30
Total liabilities	13,614	13,015
Commitments and contingencies[converted]
Stockholders’ equity:
Preferred stock of $0.01 par value, authorized 10,000,000 shares; no shares issued and outstanding
Common stock of $0.02 par value, shares authorized 50,000,000; 5,668,881 shares issued and outstanding at September 30, 2016 and 5,599,797 shares at March 31, 2016	113	112
Additional paid-in capital	31,656	31,585
Accumulated deficit	(14,462)	(13,869)
Total stockholders’ equity	17,307	17,828
Total liabilities and stockholders’ equity	$ 30,921	$ 30,843

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2016	Mar. 31, 2016
Accounts receivable, allowance for doubtful accounts	$ 49	$ 136
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred, authorized shares (in shares)	10,000,000	10,000,000
Preferred, issued shares (in shares)	0	0
Preferred outstanding, shares (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02
Common stock, authorized (in shares)	50,000,000	50,000,000
Common stock, issued (in shares)	5,668,881	5,599,797
Common stock, outstanding (in shares)	5,668,881	5,599,797

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
NET SALES	$ 9,862,000	$ 8,516,000	$ 17,184,000	$ 16,110,000
COST OF SALES	5,977,000	5,416,000	10,478,000	10,086,000
Gross profit	3,885,000	3,100,000	6,706,000	6,024,000
OPERATING EXPENSES:
General and administrative	2,032,000	1,486,000	3,739,000	2,696,000
Sales and marketing	1,470,000	1,616,000	3,025,000	3,348,000
Research and development	152,000	166,000	318,000	343,000
Gain on disposal of equipment and leasehold improvements	(16,000)	(29,000)	(13,000)	(29,000)
Total operating expenses	3,638,000	3,239,000	7,069,000	6,358,000
Income (loss) from operations	247,000	(139,000)	(363,000)	(334,000)
Interest expense, net	(122,000)	(51,000)	(253,000)	(75,000)
Income (loss) before income taxes	125,000	(190,000)	(616,000)	(409,000)
INCOME TAX EXPENSE (BENEFIT)	26,000	(204,000)	(24,000)	(318,000)
NET INCOME (LOSS)	$ 99,000	$ 14,000	$ (592,000)	$ (91,000)
NET INCOME (LOSS) PER SHARE:
Basic (in dollars per share)	$ 0.02	$ 0	$ (0.10)	$ (0.02)
Diluted (in dollars per share)	$ 0.02	$ 0	$ (0.10)	$ (0.02)
SHARES USED IN CALCULATION OF NET INCOME (LOSS) PER SHARE:
Basic (in shares)	5,657	5,568	5,645	5,566
Diluted (in shares)	5,727	6,047	5,645	5,566

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (592,000)	$ (91,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain on disposal of equipment and leasehold improvements	(13,000)	(29,000)
Depreciation and amortization	1,007,000	637,000
Amortization of debt issue costs and other assets	28,000	29,000
Share based compensation expense	215,000	324,000
Provision for doubtful accounts	(87,000)	22,000
Deferred income tax benefit		(338,000)
Net (increase) decrease in assets:
Accounts receivable	17,000	(990,000)
Inventories	397,000	(491,000)
Prepaid expenses	(259,000)	(146,000)
Other assets		39,000
Net increase (decrease) in liabilities:
Customer deposits	(67,000)	66,000
Accounts payable	184,000	1,068,000
Accrued expenses	73,000	36,000
Deferred rent	8,000	(1,000)
Net cash provided by operating activities	911,000	135,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from restricted cash		486,000
Investment in equipment and leasehold improvements	(277,000)	(3,214,000)
Net cash used in investing activities	(277,000)	(2,728,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short term notes payable	600,000	500,000
Net draw down on line of credit	611,000
Payment of short term notes payable	(600,000)	(500,000)
Proceeds from long-term debt, net of costs		2,580,000
Capitalized leases	(35,000)	(174,000)
Payments for debt issuance costs		94,000
Principal payments on long-term debt	(252,000)	(122,000)
Payments in stock withheld for tax payment on issuance	(147,000)
Proceeds from stock options exercised	4,000	51,000
Net cash provided by financing activities	181,000	2,429,000
Net increase (decrease) in cash and cash equivalents	815,000	(164,000)
Cash and cash equivalents at beginning of period	1,240,000	2,226,000
Cash and cash equivalents at end of period	2,055,000	2,062,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest	213,000	180,000
Income taxes		$ 21,000

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]	1. BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to the instructions to Form 10-Q and Regulation S-X of the Securities and Exchange Commission (SEC). These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows for the periods presented in accordance with GAAP. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year. The Condensed Consolidated Balance Sheet as of March 31, 2016 was derived from the audited consolidated financial statements. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements for the year ended March 31, 2016, contained in the Company’s annual report on Form 10-K as filed with the SEC on June 23, 2016. The accompanying condensed consolidated financial statements include the accounts of Cyanotech Corporation and its wholly owned subsidiary, Nutrex Hawaii, Inc. (“Nutrex Hawaii” or “Nutrex”, collectively the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of any contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods reported. Management reviews these estimates and assumptions periodically and reflects the effect of revisions in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions. Recent Accounting Pronouncements In August 2016, FASB issued Accounting Standards Update (“ASU”) 2016-15, “ Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments ” In March 2016, the FASB issued ASU 2016-09, “ Compensation – Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting” (“ ”) In March 2016, the FASB issued ASU No. 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ”, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ”, Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842)” (“ In November 2015, the FASB issued ASU No. 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” In July 2015, the FASB issued ASU No. 2015-11, “Inventory: Simplifying the Measurement of Inventory” In April 2015, the FASB issued ASU No. 2015-03, “ Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs Other recently issued accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Note 2 - Inventories

Note 2 - Inventories	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	2. INVENTORIES Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Inventories consist of the following: September 30, 201 6 March 31, 201 6 (in thousands) Raw materials $ 445 $ 375 Work in process 3,565 3,782 Finished goods (1) 3,302 3,543 Supplies 147 156 Inventories, net $ 7,459 $ 7,856 (1) Net of reserve for obsolescence of $8,000 at September 30, 2016 and March 31, 2016, respectively. The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, as an expense in the period incurred. Non-inventoriable fixed costs of $ 73,000 and $101,000 were charged to cost of sales for the three and six months ended September 30, 2016, respectively. $83,000 of non-inventoriable fixed costs and $225,000 of extraction operations start-up costs were charged to cost of sales for the three months ended September 30, 2015. $395,000 of extraction operations start-up costs and $127,000 of non-inventoriable fixed costs were charged to cost of sales for the six months ended September 30, 2015.

Note 3 - Equipment and Leasehol

Note 3 - Equipment and Leasehold Improvements, Net	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Property, Plant and Equipment Disclosure [Text Block]	3. EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Equipment and leasehold improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives for equipment and furniture and fixtures, or the shorter of the land lease term or estimated useful lives for leasehold improvements as follows: Years Equipment 3 to 10 Furniture and fixtures 3 to 7 Leasehold improvements 10 to 25 Equipment and leasehold improvements consist of the following: September 30, 201 6 March 31, 201 6 (in thousands) Equipment $ 17,418 $ 17,040 Leasehold improvements 13,887 13,797 Furniture and fixtures 376 354 31,681 31,191 Less accumulated depreciation and amortization (14,985 ) (14,067 ) Construction-in-progress 449 672 Equipment and leasehold improvements, net $ 17,145 $ 17,796 The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amount to forecasted undiscounted future cash flows expected to be generated by the asset. If the carrying amount exceeds its estimated future cash flows, then an impairment charge is recognized to the extent that the carrying amount exceeds the asset’s fair value. Management has determined no asset impairment existed as of September 30, 2016. The Company recognized a gain on disposal of assets in the amount of $16,000 and $13,000 for the three and six months ended September 30, 2016, respectively. The Company recognized a gain on disposal of assets in the amount of $29,000 and $29,000 for the three and six months ended September 30, 2015, respectively. The Company has no capitalized interest for the three and six months ended September 30, 2016. $78,000 and $137,000 of interest was capitalized for the three and six month period ended September 30, 2015, respectively.

Note 4 - Notes Payable

Note 4 - Notes Payable	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Short-term Debt [Text Block]	4. NOTES PAYABLE Line of C redit On August 30, 2016, the Revolving Credit Agreement (the “Credit Agreement”), which the Company and First Foundation Bank (“the Bank”) entered into on June 3, 2016, became effective after the Company and the Bank received the necessary approvals from the State of Hawaii to secure the lien on the Company’s leasehold property in Kona. The Credit Agreement allows the Company to borrow up to $2,000,000 on a revolving basis. Borrowings under the Credit Agreement bear interest at the Wall Street Journal prime rate + 2%, floating. The Credit Agreement’s initial term expires on August 30, 2017, and the term may be extended at the Bank’s sole discretion. The Credit Agreement includes various covenants as defined in the Credit Agreement. The Credit Agreement also contains standard acceleration provisions in the event of a default by the Company. Proceeds from the revolving line were used to repay a $600,000 short-term loan from First Foundation Bank. At September 30, 2016, the Company had borrowed $611,000 and had $1,389,000 available on the line. The Credit Agreement grants the Bank the following security interests in the Company’s property: (a) a lien on the Company’s leasehold interest in its Kona facility; (b) an assignment of the Company’s interest in leases and rents on its Kona facility; and (c) a security interest in all fixtures, furnishings and equipment related to or used by the Company at the Kona facility. Each security interest is further subject to the terms of the Credit Agreement.

Note 5 - Accrued Expenses

Note 5 - Accrued Expenses	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Accounts Payable and Accrued Liabilities Disclosure [Text Block]	5 . ACCRUED EXPENSES Accrued expenses consist of the following: September 30, 201 6 March 31, 201 6 (in thousands) Wages, bonus and profit sharing $ 836 $ 972 Legal 386 95 Use tax 141 140 Customer rebates — 74 Rent and utilities 66 49 Other expenses 74 100 Total accrued expenses $ 1,503 $ 1,430

Note 6 - Long-term Debt

Note 6 - Long-term Debt	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Long-term Debt [Text Block]	6 . LONG-TERM DEBT Long-term debt consists of the following: September 30, 201 6 March 31, 201 6 (in thousands) Long-term debt $ 7,439 $ 7,668 Less current maturities (605 ) (574 ) Long-term debt, excluding current maturities 6,834 7,094 Less unamortized debt issuance costs (285 ) (304 ) Total long-term debt, net of current maturities and unamortized debt issuance costs $ 6,549 $ 6,790 Term Loans The Company executed a loan agreement with a lender providing for $2,500,000 in aggregate credit facilities (the “2015 Loan”) secured by substantially all the Company’s assets, pursuant to a Term Loan Agreement dated July 30, 2015 (the “2015 Loan Agreement”). The 2015 Loan Agreement is evidenced by a promissory note in the amount of $2,500,000, the repayment of which is partially guaranteed under the provisions of a United States Department of Agriculture (“USDA”) Rural Development Guarantee program. The proceeds of the 2015 Loan were used to pay off a $500,000 short term note payable that matured on September 18, 2015, and to acquire new processing equipment and leasehold improvements at the Company’s Kona, Hawaii facility. The provisions of the 2015 Loan Agreement require the payment of principal and interest until its maturity on September 1, 2022, the obligation fully amortizes over seven (7) years. Interest on the 2015 Loan accrues on the outstanding principal balance at an annual variable rate equal to the published Wall Street Journal prime rate (3.50% at September 30, 2016) plus 2.0% and is adjustable on the first day of each calendar quarter and fixed for that quarter. At no time shall the annual interest rate be less than 6.00%. The 2015 Loan has a prepayment penalty of 5% for any prepayment made prior to the first anniversary of the date of the 2015 Loan Agreement, which penalty is reduced by 1% each year thereafter until the fifth anniversary of such date, after which there is no prepayment penalty. The balance under the 2015 Loan was $2,204,000 and $2,354,000 at September 30, 2016 and March 31, 2016, respectively. The 2015 Loan includes a one-time origination and guaranty fee totaling $113,900 and an annual renewal fee payable in the amount of 0.50% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year, beginning December 31, 2015. The amount of unamortized debt issuance cost was $93,000 and $102,000 as September 30, 2016 and March 31, 2016, respectively. The USDA has guaranteed 80% of all amounts owing under the 2015 Loan. The Company is subject to financial covenants and customary affirmative and negative covenants. The Company executed a loan agreement with a lender providing for $5,500,000 in aggregate credit facilities (the “Loan”) secured by substantially all the Company’s assets, including a mortgage on the Company's interest in its lease at the National Energy Laboratory of Hawaii Authority, pursuant to a Term Loan Agreement dated August 14, 2012 (the “Loan Agreement”). The Loan Agreement is evidenced by promissory notes in the amounts of $2,250,000 and $3,250,000, the repayment of which is partially guaranteed under the provisions of a USDA Rural Development Guarantee. The proceeds of the Loan have been used to acquire new processing equipment and leasehold improvements at the Company’s Kona, Hawaii facility. The provisions of the Loan Agreement required the payment of interest only for the first 12 months of the term; thereafter, and until its maturity on August 14, 2032, the obligation fully amortizes over nineteen (19) years. Interest on the Loan accrues on the outstanding principal balance at an annual variable rate equal to the published Wall Street Journal prime rate (3.50% at September 30, 2016) plus 1.0% and is adjustable on the first day of each calendar quarter and fixed for that quarter. At no time shall the annual interest rate be less than 5.50%. The Loan has a prepayment penalty of 5% for any prepayment made prior to the first anniversary of the date of the Loan Agreement, which penalty is reduced by 1% each year thereafter until the fifth anniversary of such date, after which there is no prepayment penalty. The balance under this Loan was $4,954,000 and $5,049,000 at September 30, 2016 and March 31, 2016, respectively. Proceeds from the Loan were classified as restricted cash until drawn upon to acquire new processing equipment and leasehold improvements. The Loan Agreement included a one-time origination and guaranty fees totaling $214,500 and an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year, beginning December 31, 2012. The amount of unamortized debt issuance cost was $193,000 and $202,000 as September 30, 2016 and March 31, 2016, respectively. The USDA has guaranteed 80% of all amounts owing under the Loan. The Company is subject to financial covenants and customary affirmative and negative covenants. Capital Leases The Company has four capital leases providing for $364,000 in equipment, secured by the equipment financed. The capital leases mature at various dates between March 2018 and March 2021and are payable in 60 equal monthly payments, except for one which is payable in 36 equal payments. The interest rates under these capital leases range from 4.18% to 12.90%. The balance under these leases was $281,000 and $261,000 at September 30, 2016 and March 31, 2016, respectively. Future principal payments under the term loans and capital lease agreements as of September 30, 2016 are as follows: Payments Due (in thousands) Next 12 Months $ 605 Year 2 626 Year 3 640 Year 4 655 Year 5 655 Thereafter 4,258 Total principal payments $ 7,439

Note 7 - Operating Leases

Note 7 - Operating Leases	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Leases of Lessee Disclosure [Text Block]	7 . OPERATING LEASES The Company leases facilities, equipment and land under operating leases expiring through 2035. The land lease provides for contingent rentals in excess of minimum rental commitments based on a percentage of the Company’s sales. Management has accrued for the estimated contingent rent as of September 30, 2016. Future minimum lease payments under all non-cancelable operating leases at September 30, 2016 are as follows: Payments Due (in thousands) Next 12 Months $ 610 Year 2 608 Year 3 617 Year 4 581 Year 5 526 Thereafter 4,556 Total minimum lease payments $ 7,498

Note 8 - Commitments and Contin

Note 8 - Commitments and Contingencies	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	8. COMMITMENTS AND CONTINGENCIES On May 24, 2016, one of our shareholders, Meridian OHC Partners, LP, initiated an action in the United States District Court, District of Nevada, entitled Meridian OHC Partners, LP vs. Cyanotech Corporation, Michael Davis and Rudolf Steiner Foundation (RSF), Inc. On August 26, 2016, the Company moved to dismiss Meridian’s initial complaint on the ground that Meridian lacked standing to proceed derivatively on behalf of the Company. In response, on September 19, 2016, Meridian filed an amended complaint. On November 4, 2016, the Company filed a motion to dismiss the amended complaint, again arguing that Meridian lacks standing to proceed derivatively on behalf of the Company. As previously disclosed, the Board of Directors of the Company formed a Special Committee comprised of independent directors to investigate, review and analyze the Meridian allegations and provide its recommendations to the Board. The Special Committee completed its investigation and presented its findings and recommendations to the Board on September 2, 2016. The special committee concluded, among other things, that (i) Mr. Davis should be filing his reports pursuant to Section 13 of the Exchange act (“Section 13”) on schedule 13D rather than on the short form schedule 13G; (ii) it has not found sufficient information to conclude that a “group” exists under Section 13; and (iii) it has not found any material corporate governance issues. The Special Committee did not recommend that the Board take legal action in response to Meridian’s allegations. The Board unanimously approved the findings and adopted the recommendations of the Special Committee. Additional details regarding the Special Committee’s findings and recommendations are set forth in the Company’s Form 8-K filed with the SEC on September 9, 2016. On March 31, 2016, the Company entered into a Separation Agreement and Release of Claims (the “Separation Agreement”), pursuant to which Brent Bailey, now-former CEO, resigned from the Company effective as of the date of the Separation Agreement. Under the Separation Agreement, Mr. Bailey was eligible to receive (i) an aggregate of $325,000 in separation payments, payable monthly through the end of April 2017, and (ii) up to 155,000 shares of the Company’s Common Stock, to be granted in two tranches. On April 29, 2016, the Company issued 48,467 shares of its Common Stock to Mr. Bailey in accordance with the Separation Agreement. On October 19, 2016 (the “Notification Date”), the Board notified Brent Bailey that, as a result of Mr. Baileys material breach of certain provisions of the Separation Agreement and his Employment Letter Agreement, dated November 5, 2010, the Board has exercised its right to terminate all future severance payments, healthcare benefits and share grants that would otherwise be payable to Mr. Bailey under the Separation Agreement, effective as of the Notification Date. In connection with the Separation and Release of Claims, the Company accrued separation expenses of $216,000 as of September 30, 2016. By letter dated October 27, 2016, Mr. Bailey informed the Company that he disputes the Company’s termination of his benefits, and he intends to initiate the mediation procedures set forth in the Separation Agreement. From time to time, the Company may be involved in other litigation and investigations relating to claims and matters arising out of its operations in the normal course of business. The Company believes that it currently is not a party to any legal proceedings which, individually or in aggregate, would have a material effect on its consolidated financial position, results of operations or cash flows.

Note 9 - Share-based Compensati

Note 9 - Share-based Compensation	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	9 . SHARE-BASED COMPENSATION The Company accounts for share-based payment arrangements using fair value. If an award vests or becomes exercisable based on the achievement of a condition other than service, such as for meeting certain performance or market conditions, the award is classified as a liability. Liability-classified awards are remeasured to fair value at each balance sheet date until the award is settled. The Company currently has no liability-classified awards. Equity-classified awards, including grants of employee stock options, are measured at the grant-date fair value of the award and are not subsequently remeasured unless an award is modified. The cost of equity-classified awards is recognized in the statement of operations over the period during which an employee is required to provide the service in exchange for the award, or the vesting period. All of the Company’s stock options are service-based awards, and because the Company’s stock options are “plain vanilla,” as defined by the U.S. Securities and Exchange Commission in Staff Accounting Bulletin No. 107, they are reflected only in equity and compensation expense accounts. Stock Options As of September 30, 2016, the Company had two equity-based compensation plans: the 2016 Cyanotech Equity Incentive Plan (the “2016 Plan”) and the 2014 Independent Director Stock Option and Restricted Stock Grant Plan (the “2014 Directors Plan”). The Company has also issued stock options, which remain outstanding as of September 30, 2016, under two equity-based compensation plans which have expired according to their terms: the 2005 Stock Option Plan (the “2005 Plan”) and the 2004 Independent Director Stock Option and Stock Grant Plan (the “2004 Directors Plan”). These plans allowed the Company to award stock options and shares of restricted common stock to eligible employees, certain outside consultants and independent directors. On August 25, 2016, the Company’s shareholders approved the 2016 Plan as a successor to the 2005 Plan, authorizing the Board of Directors to provide incentive to the Company’s officers, employees and certain independent consultants through equity based compensation in the form of stock options, restricted stock, restricted stock units, stock appreciation rights and other stock based awards (together, “Stock Awards”) and performance shares and performance units (together “Performance Awards”). Awards under the 2016 Plan are limited to the authorized amount of 1,300,000 shares, up to 600,000 of which are available for issuance in connection with Performance Awards and Stock Awards. As of September 30, 2016, there were 1,300,000 shares available for grant under the 2016 Plan. On August 28, 2014, the Company’s shareholders approved the 2014 Directors Plan authorizing the Board of Directors to provide incentive to the Company’s independent directors through equity based compensation in the form of stock options and restricted stock. Awards under the 2014 Directors Plan are limited to the authorized amount of 350,000 shares. As of September 30, 2016, there were 289,124 shares available for grant under the 2014 Directors Plan. The 2005 Plan and the 2004 Directors Plan have expired, and therefore no additional awards will be issued under those plans. The following table presents shares authorized, available for future grant and outstanding under each of the Company’s plans: As of September 3 0 , 201 6 Authorized Available Outstanding 2016 Plan 1,300,000 1,300,000 — 2014 Plan 350,000 289,124 12,000 2005 Plan — — 642,500 2004 Directors Plan — — 12,000 Total 1,650,000 1,589,124 666,500 All stock option grants made under equity-based compensation plans were issued at exercise prices no less than the Company’s closing stock price on the date of grant. Options under the 2005 Plan and 2014 Directors Plan were determined by the Board of Directors or the Stock Option and Compensation Committee of the Board in accordance with the provisions of the respective plans. The terms of each option grant include vesting, exercise, and other conditions are set forth in a Stock Option Agreement evidencing each grant. No option can have a life in excess of ten (10) years. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. The model requires various assumptions, including a risk-free interest rate, the expected term of the options, the expected stock price volatility over the expected term of the options and the expected dividend yield. Compensation expense for employee stock options is recognized ratably over the vesting term. Compensation expense recognized for options issued under the 2005 Plan was $58,000 and $136,000 for the three and six months ended September 30, 2016, respectively. Compensation expense recognized for options issued under the 2005 Plan was $161,000 and $324,000 for the three and six months ended September 30, 2015, respectively. Compensation expense recognized for options issued under the 2014 Directors Plan was $1,000 and $1,500 for the three and six months ended September 30, 2016. Compensation expense recognized for restricted stock issued under the 2014 Directors Plan was $78,000 for the three and six months ended September 30, 2016. No compensation expense was recognized under the 2014 Directors Plan for the three and six months ended September 30, 2015. All share-based compensation has been classified as general and administrative expense in the consolidated statement of operations. A summary of option activity under the Company’s stock plans for the six months ended September 30, 2016 is presented below: Option Activity Shares Weighted Price Weighted Average years) Aggregate Outstanding at March 31, 2016 685,000 $ 4.65 5.7 $ 566,323 Granted 6,000 $ 4.08 Exercised (1,500 ) $ 3.11 Forfeited (23,000 ) $ 5.02 Outstanding at September 30, 2016 666,500 $ 4.63 5.2 $ 136,596 Exercisable at September 30, 2016 578,000 $ 4.41 5.0 $ 136,596 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $3.69 for such day. A summary of the Company’s non-vested options for the six months ended September 30, 2016 is presented below: Nonvested Options Shares Weighted Nonvested at March 31, 2016 171,250 $ 3.75 Granted 6,000 .83 Vested (83,750 ) 3.29 Forfeited (5,000 ) 3.48 Nonvested at September 30, 2016 88,500 $ 4.00 The following table summarizes the weighted average characteristics of outstanding stock options as of September 30, 2016: Outstanding Options Exercisable Options Range of Number Remaining Weighted Price Number of Weighted Price $1.60 - $3.70 146,920 3.5 $ 2.76 146,920 $ 2.76 $3.71 - $4.42 200,580 5.0 $ 3.82 194,580 $ 3.82 $4.43 - $5.40 95,000 6.7 $ 5.00 66,500 $ 5.01 $5.41 - $7.08 224,000 5.9 $ 6.42 170,000 $ 6.26 Total stock options 666,500 5.2 $ 4.64 578,000 $ 4.41 The range of fair value assumptions related to options granted during the six months ended September 30, 2016 were as follows: 201 6 Exercise Price $ 4.08 Volatility 51.13 % Risk Free Rate 0.60 % Vesting Period (years) 0.5 Forfeiture Rate 0.00 % Expected Life (in years) 1.00 Dividend Rate 0 % As of September 30, 2016, total unrecognized stock-based compensation expense related to all unvested stock options was $245,000, which is expected to be expensed over a weighted average period of 2.2 years.

Note 10 - Income Taxes

Note 10 - Income Taxes	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	10 . INCOME TAXES We utilize our estimated annual effective tax rate to determine our provision (benefit) for income taxes for interim periods. The income tax provision (benefit) is computed by multiplying the estimated annual effective tax rate by the year to date pre-tax book income (loss). We recorded income tax expense of $26,000 and income tax benefit of $204,000 for the three months ended September 31, 2016 and 2015, respectively. We recorded income tax benefits of $24,000 and $318,000 for the six months ended September 30, 2016 and 2015, respectively. Our effective tax rate differs from the statutory rate of 34% as a result of non deductible stock option expense and the state taxes (net of federal benefit) and permanent differences. Our effective tax rate was 21.0% and 3.9% for the three and six months ended September 30, 2016, respectively, and 107.4% and 77.8% for the three and six months ended September 30, 2015, respectively. The effective tax rate for the three and six months ended September 30, 2016 differ from the statutory rate of 34% as a result of state taxes (net of federal benefit) and the net change in valuation allowance against the net deferred tax asset the Company believes is not more likely than not to be realized. The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (“uncertain tax positions”) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events. As of September 30, 2016, there was no liability for income tax associated with unrecognized tax benefits. The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest income or expense in its consolidated condensed statements of operations, which is consistent with the recognition of these items in prior reporting periods. With few exceptions, the Company is no longer subject to U.S. federal, state, local, and non-U.S. income tax examination by tax authorities for tax years before 2011.

Note 11 - Earnings (Loss) Per S

Note 11 - Earnings (Loss) Per Share	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Earnings Per Share [Text Block]	1 1 . EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is computed on the basis of the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed on the basis of the weighted average number of common shares outstanding plus the potentially dilutive effect of outstanding stock options using the “treasury stock” method. Reconciliations between the numerator and the denominator of the basic and diluted earnings per share computations for the three months ended September 30, 2016 and 2015 are as follows: Three Months Ended September 30, 201 6 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic income per share $ 99 5,657 $ 0.02 Effect of dilutive securities—Common stock options — 70 — Diluted income per share $ 99 5,727 $ 0.02 Three Months Ended September 30, 201 5 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic income per share $ 14 5,568 $ 0.00 Effect of dilutive securities — Common stock options — 479 — Diluted income per share $ 14 6,047 $ 0.00 Reconciliations between the numerator and the denominator of the basic and diluted earnings per share computations for the six months ended September 30, 2016 and 2015 are as follows: Six Months Ended September 30, 201 6 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic and diluted loss per share $ (592 ) 5,645 $ (0.10 ) Six Months Ended September 30, 201 5 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic and diluted loss per share $ (91 ) 5,566 $ (0.02 ) Basic and diluted earnings per share are the same in periods of a net loss, because common share equivalents are anti-dilutive when a net loss is recorded. Diluted earnings per share does not include the impact of common stock options totaling 6,000 and 134,063 for the three months ended September 30, 2016 and 2015, respectively, and 6,000 and 105,000 for the six months ended September 30, 2016 and 2015, respectively, as the effect of their inclusion would be anti-dilutive.

Note 12 - Concentrations of Ris

Note 12 - Concentrations of Risk	6 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	1 2 . CONCENTRATIONS OF RISK Concentration of Accounts Receivable and Revenues At September 30, 2016, 58.7% of the Company’s accounts receivable was comprised of two customer balances of 48.2% and 10.5%, respectively. At March 31, 2016, 44.4% of the Company’s accounts receivable was comprised of two customer balances of 30.7% and 13.4%, respectively. International sales represented 27% and 31% of net sales for the three and six months ended September 30, 2016, respectively, compared to 29% and 28% for the same periods, respectively, a year ago. One customer accounted for 28% and 17% of total net sales for the three months ended September 30, 2016 and 2015, respectively, and accounted for 24% and 16% of total net sales for the six months ended September 30, 2016 and 2015, respectively.

Significant Accounting Policies

Significant Accounting Policies (Policies)	6 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Accounting Pronouncements In August 2016, FASB issued Accounting Standards Update (“ASU”) 2016-15, “ Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments ” In March 2016, the FASB issued ASU 2016-09, “ Compensation – Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting” (“ ”) In March 2016, the FASB issued ASU No. 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ”, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ”, Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842)” (“ In November 2015, the FASB issued ASU No. 2015-17, “ Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” In July 2015, the FASB issued ASU No. 2015-11, “Inventory: Simplifying the Measurement of Inventory” In April 2015, the FASB issued ASU No. 2015-03, “ Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs Other recently issued accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Note 2 - Inventories (Tables)

Note 2 - Inventories (Tables)	6 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	September 30, 201 6 March 31, 201 6 (in thousands) Raw materials $ 445 $ 375 Work in process 3,565 3,782 Finished goods (1) 3,302 3,543 Supplies 147 156 Inventories, net $ 7,459 $ 7,856

Note 3 - Equipment and Leaseh20

Note 3 - Equipment and Leasehold Improvements, Net (Tables)	6 Months Ended
	Sep. 30, 2016
Notes Tables
Property, Plant, and Equipment, Estimated Useful Lives [Table Text Block]	Years Equipment 3 to 10 Furniture and fixtures 3 to 7 Leasehold improvements 10 to 25
Property, Plant and Equipment [Table Text Block]	September 30, 201 6 March 31, 201 6 (in thousands) Equipment $ 17,418 $ 17,040 Leasehold improvements 13,887 13,797 Furniture and fixtures 376 354 31,681 31,191 Less accumulated depreciation and amortization (14,985 ) (14,067 ) Construction-in-progress 449 672 Equipment and leasehold improvements, net $ 17,145 $ 17,796

Note 5 - Accrued Expenses (Tabl

Note 5 - Accrued Expenses (Tables)	6 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Accrued Liabilities [Table Text Block]	September 30, 201 6 March 31, 201 6 (in thousands) Wages, bonus and profit sharing $ 836 $ 972 Legal 386 95 Use tax 141 140 Customer rebates — 74 Rent and utilities 66 49 Other expenses 74 100 Total accrued expenses $ 1,503 $ 1,430

Note 6 - Long-term Debt (Tables

Note 6 - Long-term Debt (Tables)	6 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Long-term Debt Instruments [Table Text Block]	September 30, 201 6 March 31, 201 6 (in thousands) Long-term debt $ 7,439 $ 7,668 Less current maturities (605 ) (574 ) Long-term debt, excluding current maturities 6,834 7,094 Less unamortized debt issuance costs (285 ) (304 ) Total long-term debt, net of current maturities and unamortized debt issuance costs $ 6,549 $ 6,790
Schedule of Maturities of Long-term Debt [Table Text Block]	Payments Due (in thousands) Next 12 Months $ 605 Year 2 626 Year 3 640 Year 4 655 Year 5 655 Thereafter 4,258 Total principal payments $ 7,439

Note 7 - Operating Leases (Tabl

Note 7 - Operating Leases (Tables)	6 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]	Payments Due (in thousands) Next 12 Months $ 610 Year 2 608 Year 3 617 Year 4 581 Year 5 526 Thereafter 4,556 Total minimum lease payments $ 7,498

Note 9 - Share-based Compensa24

Note 9 - Share-based Compensation (Tables)	6 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Share-based Compensation Shares Authorized Available and Outstanding by Plan [Table Text Block]	As of September 3 0 , 201 6 Authorized Available Outstanding 2016 Plan 1,300,000 1,300,000 — 2014 Plan 350,000 289,124 12,000 2005 Plan — — 642,500 2004 Directors Plan — — 12,000 Total 1,650,000 1,589,124 666,500
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Option Activity Shares Weighted Price Weighted Average years) Aggregate Outstanding at March 31, 2016 685,000 $ 4.65 5.7 $ 566,323 Granted 6,000 $ 4.08 Exercised (1,500 ) $ 3.11 Forfeited (23,000 ) $ 5.02 Outstanding at September 30, 2016 666,500 $ 4.63 5.2 $ 136,596 Exercisable at September 30, 2016 578,000 $ 4.41 5.0 $ 136,596
Schedule of Nonvested Share Activity [Table Text Block]	Nonvested Options Shares Weighted Nonvested at March 31, 2016 171,250 $ 3.75 Granted 6,000 .83 Vested (83,750 ) 3.29 Forfeited (5,000 ) 3.48 Nonvested at September 30, 2016 88,500 $ 4.00
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]	Outstanding Options Exercisable Options Range of Number Remaining Weighted Price Number of Weighted Price $1.60 - $3.70 146,920 3.5 $ 2.76 146,920 $ 2.76 $3.71 - $4.42 200,580 5.0 $ 3.82 194,580 $ 3.82 $4.43 - $5.40 95,000 6.7 $ 5.00 66,500 $ 5.01 $5.41 - $7.08 224,000 5.9 $ 6.42 170,000 $ 6.26 Total stock options 666,500 5.2 $ 4.64 578,000 $ 4.41
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	201 6 Exercise Price $ 4.08 Volatility 51.13 % Risk Free Rate 0.60 % Vesting Period (years) 0.5 Forfeiture Rate 0.00 % Expected Life (in years) 1.00 Dividend Rate 0 %

Note 11 - Earnings (Loss) Per25

Note 11 - Earnings (Loss) Per Share (Tables)	6 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended September 30, 201 6 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic income per share $ 99 5,657 $ 0.02 Effect of dilutive securities—Common stock options — 70 — Diluted income per share $ 99 5,727 $ 0.02 Three Months Ended September 30, 201 5 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic income per share $ 14 5,568 $ 0.00 Effect of dilutive securities — Common stock options — 479 — Diluted income per share $ 14 6,047 $ 0.00 Six Months Ended September 30, 201 6 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic and diluted loss per share $ (592 ) 5,645 $ (0.10 ) Six Months Ended September 30, 201 5 Net Income Shares Per Share (Numerator) (Denominator) Amount (in thousands) Basic and diluted loss per share $ (91 ) 5,566 $ (0.02 )

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation (Details Textual) - Reclassification of Debt Issuance Costs From Non Current Assets to Non Current Long Term Debt [Member]	6 Months Ended
	Sep. 30, 2016USD ($)
March 31, 2016 [Member]
Prior Period Reclassification Adjustment	$ 304,000
Current Period Reclassification Adjustment	$ 285,000

Note 2 - Inventories (Details T

Note 2 - Inventories (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Mar. 31, 2016
Inventory Valuation Reserves	$ 8,000		$ 8,000		$ 8,000
Non Inventoriable Fixed Costs	$ 73,000	$ 83,000	$ 101,000	$ 127,000
Inventory Abnormal Production Costs		$ 225,000		$ 395,000

Note 2 - Inventories - Componen

Note 2 - Inventories - Components of Inventory (Details) - USD ($) $ in Thousands		Sep. 30, 2016	Mar. 31, 2016
Raw materials		$ 445	$ 375
Work in process		3,565	3,782
Finished goods (1)	[1]	3,302	3,543
Supplies		147	156
Inventories, net		$ 7,459	$ 7,856
[1]	Net of reserve for obsolescence of $8,000 at September 30, 2016 and March 31, 2016, respectively.

Note 3 - Equipment and Leaseh29

Note 3 - Equipment and Leasehold Improvements, Net (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Impairment of Long-Lived Assets Held-for-use			$ 0
Gain (Loss) on Disposition of Assets	$ 16,000	$ 29,000	13,000	$ 29,000
Interest Costs Capitalized	$ 0	$ 78,000	$ 0	$ 137,000

Note 3 - Equipment and Leaseh30

Note 3 - Equipment and Leasehold Improvements, Net - Estimated Useful Lives (Details)	6 Months Ended
	Sep. 30, 2016
Equipment [Member] | Minimum [Member]
Estimated useful lives	3 years
Equipment [Member] | Maximum [Member]
Estimated useful lives	10 years
Furniture and Fixtures [Member] | Minimum [Member]
Estimated useful lives	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Estimated useful lives	7 years
Leasehold Improvements [Member] | Minimum [Member]
Estimated useful lives	10 years
Leasehold Improvements [Member] | Maximum [Member]
Estimated useful lives	25 years

Note 3 - Equipment and Leaseh31

Note 3 - Equipment and Leasehold Improvements, Net - Components of Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands		Sep. 30, 2016	Mar. 31, 2016
Equipment [Member]
Equipment and leasehold improvements, gross	[1]	$ 17,418	$ 17,040
Leasehold Improvements [Member]
Equipment and leasehold improvements, gross		13,887	13,797
Furniture and Fixtures [Member]
Equipment and leasehold improvements, gross		376	354
Equipment and leasehold improvements, gross		31,681	31,191
Less accumulated depreciation and amortization		(14,985)	(14,067)
Construction-in-progress		449	672
Equipment and leasehold improvements, net		$ 17,145	$ 17,796
[1]	Includes $314,000 of equipment under capital lease at March 31, 2016, with accumulated amortization of $41,000.

Note 4 - Notes Payable (Details

Note 4 - Notes Payable (Details Textual) - USD ($)	Aug. 30, 2016	Sep. 18, 2015	Sep. 30, 2016	Sep. 30, 2015	Mar. 31, 2016
First Foundation Bank [Member] | Revolving Credit Facility [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	2.00%
First Foundation Bank [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,000,000
Line of Credit, Current			$ 611,000
Line of Credit Facility, Remaining Borrowing Capacity			1,389,000
First Foundation Bank [Member]
Repayments of Notes Payable	$ 600,000
Repayments of Notes Payable		$ 500,000	600,000	$ 500,000
Line of Credit, Current			$ 611,000

Note 5 - Accrued Expenses - Com

Note 5 - Accrued Expenses - Components of Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Mar. 31, 2016
Wages, bonus and profit sharing	$ 836	$ 972
Legal	386	95
Use tax	141	140
Customer rebates		74
Rent and utilities	66	49
Other expenses	74	100
Total accrued expenses	$ 1,503	$ 1,430

Note 6 - Long-term Debt (Detail

Note 6 - Long-term Debt (Details Textual) - USD ($)	Sep. 18, 2015	Aug. 14, 2012	Feb. 29, 2016	Jul. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Mar. 31, 2016
2015 Loan Agreement [Member] | Prime Rate [Member]
Debt Instrument Reference Rate					3.50%		3.50%
Debt Instrument, Basis Spread on Variable Rate					2.00%
2015 Loan Agreement [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage					6.00%		6.00%
2015 Loan Agreement [Member]
Proceeds from Issuance of Debt				$ 2,500,000
Debt Instrument, Term				7 years
Debt Instrument Prepayment Penalty Percentage					5.00%		5.00%
Debt Instrument Prepayment Penalty Percentage Reduction During Each Year					1.00%		1.00%
Long-term Debt and Capital Lease Obligations, Current and Noncurrent					$ 2,204,000		$ 2,204,000	$ 2,354,000
Debt Instrument One Time Origination and Guaranty Fees					$ 113,900
Debt Instrument Annual Renewal Fee Payable Percentage					0.50%		0.50%
Debt Issuance Costs, Net					$ 93,000		$ 93,000	102,000
Debt Instrument Guaranteed Portion					80.00%		80.00%
Term Loan Agreement, Maturing on August 14, 2032 [Member] | Minimum [Member]
Debt Instrument, Interest Rate During Period					5.50%
Term Loan Agreement, Maturing on August 14, 2032 [Member]
Proceeds from Issuance of Debt		$ 5,500,000
Debt Instrument Reference Rate					3.50%		3.50%
Debt Instrument, Basis Spread on Variable Rate					1.00%
Debt Instrument Prepayment Penalty Percentage					5.00%		5.00%
Debt Instrument Prepayment Penalty Percentage Reduction During Each Year					1.00%		1.00%
Long-term Debt and Capital Lease Obligations, Current and Noncurrent					$ 4,954,000		$ 4,954,000	5,049,000
Debt Instrument One Time Origination and Guaranty Fees					$ 214,500
Debt Instrument Annual Renewal Fee Payable Percentage					0.25%		0.25%
Debt Issuance Costs, Net					$ 193,000		$ 193,000	202,000
Debt Instrument Guaranteed Portion					80.00%		80.00%
Debt Instrument Interest Payment Period		1 year
Debt Instrument Amortization Period		19 years
Term Loan Agreement, Promissory Note One [Member]
Proceeds from Issuance of Debt		$ 2,250,000
Term Loan Agreement, Promissory Note Two [Member]
Proceeds from Issuance of Debt		$ 3,250,000
Bank of the West Finance [Member] | Capital Lease Asses Payable in 36 Equal Monthly Payments [Member]
Capital Leased Assets, Number of Units					1		1
Capital Lease Term							3 years
Bank of the West Finance [Member] | Capital Lease Obligations [Member]
Debt Instrument, Interest Rate, Stated Percentage					4.18%		4.18%
Bank of the West Finance [Member]
Capital Leased Assets, Number of Units					4		4
Capital Leased Assets, Gross					$ 364,000		$ 364,000
Capital Lease Term			5 years
Capital Lease Obligations					$ 281,000		$ 281,000	261,000
Hungtington Technology Finance [Member] | Capital Lease Obligations [Member]
Debt Instrument, Interest Rate, Stated Percentage					12.90%		12.90%
Repayments of Notes Payable	$ 500,000				$ 600,000	$ 500,000
Debt Issuance Costs, Net					$ 285,000		$ 285,000	$ 304,000

Note 6 - Long-term Debt - Summa

Note 6 - Long-term Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Mar. 31, 2016
Total principal payments	$ 7,439	$ 7,668
Less current maturities	(605)	(574)
Long-term debt, excluding current maturities	6,834	7,094
Less unamortized debt issuance costs	(285)	(304)
Total long-term debt, net of current maturities and unamortized debt issuance costs	$ 6,549	$ 6,790

Note 6 - Long-term Debt - Futur

Note 6 - Long-term Debt - Future Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Mar. 31, 2016
Next 12 Months	$ 605
Year 2	626
Year 3	640
Year 4	655
Year 5	655
Thereafter	4,258
Total principal payments	$ 7,439	$ 7,668

Note 7 - Operating Leases - Sum

Note 7 - Operating Leases - Summary of Future Minimum Lease Payments under Non-cancelable Operating Leases (Details) $ in Thousands	Sep. 30, 2016USD ($)
Next 12 Months	$ 610
Year 2	608
Year 3	617
Year 4	581
Year 5	526
Thereafter	4,556
Total minimum lease payments	$ 7,498

Note 8 - Commitments and Cont38

Note 8 - Commitments and Contingencies (Details Textual) - USD ($)	Apr. 29, 2016	Mar. 31, 2016	Sep. 30, 2016
Separation Payments [Member] | Chief Executive Officer [Member]
Other Commitment		$ 325,000
Maximum Shares Under Separation Agreement		155,000
Chief Executive Officer [Member]
Stock Issued During Period, Shares, New Issues	48,467
Separation Expense			$ 216,000

Note 9 - Share-based Compensa39

Note 9 - Share-based Compensation (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Aug. 25, 2016	Aug. 28, 2015
The 2016 Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized for Issuance in Connection with Performance Awards and Stock Awards					600,000
The 2016 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,300,000		1,300,000		1,300,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,300,000		1,300,000
2014 Directors Plan [Member] | Employee Stock Option [Member]
Allocated Share-based Compensation Expense	$ 1,000		$ 1,500
2014 Directors Plan [Member] | Restricted Stock [Member]
Allocated Share-based Compensation Expense	$ 78,000		$ 78,000
2014 Directors Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized						350,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	289,124		289,124
Allocated Share-based Compensation Expense		$ 0		$ 0
The 2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized			0
Allocated Share-based Compensation Expense	$ 58,000	$ 161,000	$ 136,000	$ 324,000
2004 Directors Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized			0
Maximum [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 245,000		$ 245,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			2 years 73 days
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,650,000		1,650,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,589,124		1,589,124
Share Price	$ 3.69		$ 3.69

Note 9 - Share-based Compensa40

Note 9 - Share-based Compensation - Shares Authorized, Available for Future Grant and Outstanding Under Each Plan (Details) - shares	Sep. 30, 2016	Aug. 25, 2016	Mar. 31, 2016
The 2016 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,300,000	1,300,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,300,000
Outstanding (in shares)
Authorized (in shares)	1,300,000	1,300,000
Available (in shares)	1,300,000
Outstanding (in shares)
The 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	350,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	289,124
Outstanding (in shares)	12,000
Authorized (in shares)	350,000
Available (in shares)	289,124
Outstanding (in shares)	12,000
The 2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant
Outstanding (in shares)	642,500
Authorized (in shares)
Available (in shares)
Outstanding (in shares)	642,500
2004 Directors Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant
Outstanding (in shares)	12,000
Authorized (in shares)
Available (in shares)
Outstanding (in shares)	12,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,650,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,589,124
Outstanding (in shares)	666,500		685,000
Authorized (in shares)	1,650,000
Available (in shares)	1,589,124
Outstanding (in shares)	666,500		685,000

Note 9 - Share-based Compensa41

Note 9 - Share-based Compensation - Summary of Option Activity Under Stock Plans (Details) - USD ($)	6 Months Ended	12 Months Ended
	Sep. 30, 2016	Mar. 31, 2016
Outstanding (in shares)	685,000
Outstanding, weighted average exercise price (in dollars per share)	$ 4.65
Outstanding, weighted average remaining contractual term	5 years 73 days	5 years 255 days
Outstanding, aggregate intrinsic value	$ 136,596	$ 566,323
Granted (in shares)	6,000
Granted, weighted average exercise price (in dollars per share)	$ 4.08
Exercised (in shares)	(1,500)
Exercised, weighted average exercise price (in dollars per share)	$ 3.11
Forfeited (in shares)	(23,000)
Forfeited, weighted average exercise price (in dollars per share)	$ 5.02
Outstanding (in shares)	666,500	685,000
Outstanding, weighted average exercise price (in dollars per share)	$ 4.63	$ 4.65
Exercisable (in shares)	578,000
Exercisable, weighted average exercise price (in dollars per share)	$ 4.41
Exercisable, weighted average remaining contractual term	5 years
Exercisable, aggregate intrinsic value	$ 136,596

Note 9 - Share-based Compensa42

Note 9 - Share-based Compensation - Summary of Non-vested Options (Details)	6 Months Ended
	Sep. 30, 2016$ / sharesshares
Nonvested (in shares) | shares	171,250
Nonvested (in dollars per share) | $ / shares	$ 3.75
Granted (in shares) | shares	6,000
Granted (in dollars per share) | $ / shares	$ 0.83
Vested (in shares) | shares	(83,750)
Vested (in dollars per share) | $ / shares	$ 3.29
Forfeited (in shares) | shares	(5,000)
Forfeited (in dollars per share) | $ / shares	$ 3.48
Nonvested (in shares) | shares	88,500
Nonvested (in dollars per share) | $ / shares	$ 4

Note 9 - Share-based Compensa43

Note 9 - Share-based Compensation - Summary of the Weighted-Average Characteristics of Outstanding Stock Options (Details)	6 Months Ended
	Sep. 30, 2016$ / sharesshares
Range 01 [Member]
Lower Range of Exercise (in dollars per share)	$ 1.60
Upper Range of Exercise (in dollars per share)	$ 3.70
Outstanding Options Number of Shares (in shares) | shares	146,920
Outstanding Options Remaining Life	3 years 182 days
Outstanding Options Weighted Average Price (in dollars per share)	$ 2.76
Exercisable Options Number of Shares (in shares) | shares	146,920
Exercisable Options Weighted Average Price (in dollars per share)	$ 2.76
Range 02 [Member]
Lower Range of Exercise (in dollars per share)	3.71
Upper Range of Exercise (in dollars per share)	$ 4.42
Outstanding Options Number of Shares (in shares) | shares	200,580
Outstanding Options Remaining Life	5 years
Outstanding Options Weighted Average Price (in dollars per share)	$ 3.82
Exercisable Options Number of Shares (in shares) | shares	194,580
Exercisable Options Weighted Average Price (in dollars per share)	$ 3.82
Range 03 [Member]
Lower Range of Exercise (in dollars per share)	4.43
Upper Range of Exercise (in dollars per share)	$ 5.40
Outstanding Options Number of Shares (in shares) | shares	95,000
Outstanding Options Remaining Life	6 years 255 days
Outstanding Options Weighted Average Price (in dollars per share)	$ 5
Exercisable Options Number of Shares (in shares) | shares	66,500
Exercisable Options Weighted Average Price (in dollars per share)	$ 5.01
Range 04 [Member]
Lower Range of Exercise (in dollars per share)	5.41
Upper Range of Exercise (in dollars per share)	$ 7.08
Outstanding Options Number of Shares (in shares) | shares	224,000
Outstanding Options Remaining Life	5 years 328 days
Outstanding Options Weighted Average Price (in dollars per share)	$ 6.42
Exercisable Options Number of Shares (in shares) | shares	170,000
Exercisable Options Weighted Average Price (in dollars per share)	$ 6.26
Outstanding Options Number of Shares (in shares) | shares	666,500
Outstanding Options Remaining Life	5 years 73 days
Outstanding Options Weighted Average Price (in dollars per share)	$ 4.64
Exercisable Options Number of Shares (in shares) | shares	578,000
Exercisable Options Weighted Average Price (in dollars per share)	$ 4.41

Note 9 - Share-based Compensa44

Note 9 - Share-based Compensation - Summary of Valuation Assumptions Related to Options Granted (Details)	6 Months Ended
	Sep. 30, 2015$ / shares
Exercise Price (in dollars per share)	$ 4.08
Volatility	51.13%
Risk Free Rate	0.60%
Vesting Period (years)	182 days
Forfeiture Rate	0.00%
Expected Life (in years)	1 year
Dividend Rate	0.00%

Note 10 - Income Taxes (Details

Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Expense (Benefit)	$ 26,000	$ (204,000)	$ (24,000)	$ (318,000)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	34.00%		34.00%
Effective Income Tax Rate Reconciliation, Percent	21.00%	107.40%	3.90%	77.80%
Unrecognized Tax Benefits	$ 0		$ 0

Note 11 - Earnings (Loss) Per46

Note 11 - Earnings (Loss) Per Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	6,000	134,063	6,000	105,000

Note 11 - Earnings (Loss) Per47

Note 11 - Earnings (Loss) Per Share - Summary of Reconciliations Between the Numerator and the Denominator of the Basic and Diluted Earnings Per Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Basic income per share	$ 99	$ 14
Basic (in shares)	5,657	5,568	5,645	5,566
Basic (in dollars per share)	$ 0.02	$ 0	$ (0.10)	$ (0.02)
Effect of dilutive securities—Common stock options (in shares)	70	479
Diluted income per share	$ 99	$ 14
Diluted (in shares)	5,727	6,047	5,645	5,566
Diluted (in dollars per share)	$ 0.02	$ 0	$ (0.10)	$ (0.02)
Net Income (Loss)	$ 99	$ 14	$ (592)	$ (91)
Shares (in shares)			5,645	5,566
Per Share Amount (in dollars per share)			$ (0.10)	$ (0.02)

Note 12 - Concentrations of R48

Note 12 - Concentrations of Risk (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Mar. 31, 2016
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Two Customers [Member]
Concentration Risk, Percentage			58.70%		44.40%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Number 1 [Member]
Concentration Risk, Percentage			48.20%		30.70%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Number 2 [Member]
Concentration Risk, Percentage			10.50%		13.40%
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Number of Major Customers			2		2
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | One Customer [Member]
Concentration Risk, Percentage	28.00%	17.00%	24.00%	16.00%
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Number of Major Customers	1	1	1	1
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | International [Member]
Concentration Risk, Percentage	27.00%	29.00%	31.00%	28.00%