Bruce Russell/RCG 310-559-4955x101 brucerussell@ruscom.com Cyanotech Receives Extension from Nasdaq to File Its Late Reports and Restatements KAILUA KONA, Hawaii (

Cyanotech Receives Extension from Nasdaq to File

Its Late Reports and Restatements

KONA, Hawaii (December 20, 2006) Cyanotech

Corporation (Nasdaq: CYAN) received a determination letter from the

Nasdaq Listing Qualifications Panel dated December 18, 2006.

determination letter, the Panel decided that the Company should be granted an

exception, until February 20, 2007, within which to remedy its late filings of

Form 10-Q for the quarter ended June 30, 2006, Form 10-Q for the quarter ended

September 30, 2006, and any required restatements. The Panel s determination

represents the full extent of the Panel s authority to grant an exception

pursuant to Marketplace Rule 4002(b).

The late filings and required restatements are due to the Company s

previously announced and currently ongoing review of an historic inventory

letter the Panel said The Company internally identified an accounting issue

that required resolution and appears to be taking appropriate action to address

it The accounting issues causing the delay do not appear to involve any

intentional misconduct or impropriety.

The Company has indicated a willingness to make needed enhancements to

internal controls, and is actively engaged in meeting Section 404 SOX

the Panel determined to continue the listing of the Company s shares on The

Nasdaq Stock Market, subject to the following conditions:

before February 20, 2007, the Company shall file its late Form 10-Q for the

quarter ended June 30, 2006, its Form 10-Q for the quarter ended September 30,

2006, and any required restatements . Other conditions stated in the letter

require that the Company must be able to demonstrate compliance with all

Nasdaq continued listing requirements.

Company also expects to file Form 10-Q for the period ended December 31, 2006

on or before its February 14, 2007 due date.

Company expects to be able to comply with Nasdaq continued listing

requirements. However, as the Company

has stated previously, the ongoing review process and the ability of the

Company to meet either the February 14, 2007 due date or the February 20, 2007

deadline is subject to the requirements of the Company s independent registered

73-4460 Queen Kaahumanu

Highway, #102 - Kailua-Kona, Hawaii 96740

(808) 326-1353 fax (808) 329-3597 - www.cyanotech.com