Corporation: Investors and Media: Cyanotech Corporation Russell Communications Group Jeffrey H. Sakamoto Bruce Russell (808) 326-1353 (310) 559-4955 x101 jsakamoto@cyanotech.com brucerusse

QUARTER FISCAL 2006 FINANCIAL RESULTS

Sales of $2,517,000, Net Loss of $321,000

KAILUA KONA, Hawaii. November 3,

2005 - Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in

producing high-value nutrition and health products from microalgae, today

announced financial results for the second quarter of its fiscal year 2006,

ended September 30, 2005.

Sales for the second

quarter of fiscal 2006 were $2,517,000, a decrease of 16% and 17% compared to

sales of $2,998,000 for the same period of the prior fiscal year and $3,029,000

for the prior sequential quarter, respectively.

The decrease in sales resulted from lower order levels for Spirulina

Pacifica products and reduced demand for NatuRose from the Japanese

aquaculture market, offset in part by slightly higher sales of BioAstin

natural astaxanthin for the human nutritional supplement market.

Gross profit for the

second quarter of fiscal 2006 was $581,000, with gross profit margin of 23%, compared to a gross profit of $1,054,000 and

gross profit margin of 35% reported for the same quarter of the prior

year. Gross profit and gross profit

margin for the quarter ended September 30, 2005 were impacted by higher per

unit natural astaxanthin production costs due to the Company s decision to

reduce production in response to overall order levels.

Net loss for the second

quarter was $321,000, or ($0.02) per diluted share, compared to net income of

$121,000, or $0.01 per diluted share for the same quarter of the prior year and

net income of $153,000, or $0.01 per diluted share for the prior sequential

revenue during the second quarter of fiscal 2006 was due largely to fluctuation

in the ordering pattern of our spirulina customers as well as to reduced orders

for NatuRose from the Sea Bream market in Japan, said Cyanotech s Chairman,

President and Chief Executive Officer, Gerald R. Cysewski. As a consequence of the present state of the

Japan aquaculture market we are expanding into other areas such as tropical

fish. There are also studies underway to

determine the potential of NatuRose for decreasing mortality and improving

absorption of food by young fish. Such

economic benefits for the aquaculture market would expand NatuRose s value

beyond pigment enhancement.

levels from our two largest BioAstin customers, sales of BioAstin increased

overall reflecting our new wholesale, business-to-business marketing focus, Dr. Cysewski

continued. Our BioAstin natural

astaxanthin is an ingredient in health formulations from nearly 40 manufacturers,

with customers such as Now Foods, Health Plus, Twin Laboratories and Jarrow

Formulas among others. Dr. Cysewski

added further, We have launched a new corporate website with additional

information thereby increasing the effectiveness of our marketing activity.

73-4460 Queen Kaahumanu Highway, #102

~ Kailua-Kona, Hawaii 96740

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

For the first six months

of fiscal 2006 the Company reported sales of $5,546,000, a slight decrease from

sales of $5,705,000 reported for the comparable period of the prior fiscal

year. Gross profit for the first six

months of fiscal 2006 was $1,606,000 with gross profit margin of 29%, compared

to gross profit of $1,941,000 and gross profit margin of 34% for the comparable

period of the prior fiscal year. Gross

profit and gross profit margin were impacted by higher per unit natural

astaxanthin production costs due to the Company s decision to reduce production

in response to market conditions. For

the first six months of fiscal 2006 the Company reported a net loss of

$168,000, or ($0.01) per diluted share compared to net income of $234,000, or

$0.01 per diluted share reported for the comparable period of the prior fiscal

The Company s cash and

cash equivalents increased to $2,054,000 from the March 31, 2005 balance

of $2,005,000. Working capital remained

adequate, increasing $210,000 from $5,102,000 at March 31, 2005 to

$5,312,000 at September 30, 2005.

Corporation, the 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 and distributes them to nutritional

supplement, nutraceutical, cosmeceutical, and animal feed makers and marketers

in more than 30 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 press 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 our 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.

Cyanotech Corporation

will hold a conference call on Thursday, November 3, 2005 at 5:30 p.m.

Eastern Time to be broadcast live over the Internet. It can be accessed by linking through the

Investor Broadcast Network s VCall website at www.vcall.com or through

Cyanotech s website, http://www.cyanotech.com.

To access the simultaneous webcast, please go to either website at least

15 minutes prior to the start of the call to register, download, and install

any necessary audio software. For those