Significant Accounting Policies (Policies)

6 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Consolidation

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 intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

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.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash

Cash primarily consists of cash on hand and cash in bank deposits.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration Risk

A significant portion of revenue and accounts receivable are derived from a few major customers. For the

three

months ended

September 30, 2020

and

2019,

two

customers individually accounted for

24%

and

21%,

and

40%

and

17%,

respectively, of the Company's net sales. For the

six

months ended

September 30, 2020

and

2019,

two

customers individually accounted for

19%

and

16%

and

36%

and

17%,

respectively, of the Company's net sales.

Three

and

two

customers accounted for

70%

and

80%,

respectively, of the Company's accounts receivable balance at

September 30, 2020

and

March 31, 2020,

respectively.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

The Company records revenue based on the

five

-step model which includes: (

1

) identifying the contract with the customer; (

2

) identifying the performance obligations in the contract; (

3

) determining the transaction price; (

4

) allocating the transaction price to the performance obligations; and (

5

) recognizing revenue when the performance obligations are satisfied. Substantially all of the Company's revenue is generated by fulfilling orders for the purchase of our microalgal nutritional supplements to retailers, wholesalers, or direct to consumers via online channels, with each order considered to be a distinct performance obligation. These orders

may

be formal purchase orders, verbal phone orders, e-mail orders or orders received online. Shipping and handling activities for which the Company is responsible under the terms and conditions of the order are

not

accounted for as performance obligations but as fulfillment costs. These activities are required to fulfill the Company's promise to transfer the goods and are expensed when revenue is recognized. 

Revenue is measured as the net amount of consideration expected to be received in exchange for fulfilling a performance obligation. The Company has elected to exclude sales, use and similar taxes from the measurement of the transaction price.  The amount of consideration expected to be received and revenue recognized includes estimates of variable consideration, which includes costs for trade promotion programs, coupons, returns and early payment discounts.  Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. The Company reviews and updates these estimates at the end of each reporting period and the impact of any adjustments are recognized in the period the adjustments are identified. In assessing whether collection of consideration from a customer is probable, the Company considers the customer's ability and intent to pay that amount of consideration when it is due. Payment of invoices is due as specified in the underlying customer agreement, typically

30

 days from the invoice date, which occurs on the date of transfer of control of the products to the customer. Revenue is recognized at the point in time that control of the ordered products is transferred to the customer. Generally, this occurs when the product is delivered, or in some cases, picked up from

one

of the Company's distribution centers by the customer. Revenue from extraction services is recognized when control is transferred upon completion of the extraction process.

Customer contract liabilities consist of customer deposits received in advance of fulfilling an order and are shown separately on the consolidated balance sheets. During the

three

months ended

September 30, 2020 

and

2019,

the Company recognized

$0

and

$6,000,

respectively, of revenue from deposits that were included in contract liabilities as of

March 31, 2020

and

2019,

respectively. During the

six

months ended

September 30, 2020

and

2019,

the Company recognized

$251,000

and

$517,000,

respectively, of revenue from deposits that were included in contract liabilities as of

March 31, 2020

and

2019,

respectively. The Company's contracts have a duration of

one

year or less and therefore, the Company has elected the practical expedient of

not

disclosing revenues allocated to partially unsatisfied performance obligations.

Disaggregation of Revenue

The following table represents revenue disaggregated by major product line and extraction services for the:

($ in thousands)	Three Months Ended September 30, 2020		Three Months Ended September 30, 2019
Packaged sales
Astaxanthin packaged	$	4,138	$	4,747
Spirulina packaged		2,126		1,731
Total packaged sales		6,264		6,478
Bulk sales
Astaxanthin bulk		463		328
Spirulina bulk		1,684		744
Total bulk sales		2,147		1,072
Contract extraction revenue		160		140
Total net sales	$	8,571	$	7,690

($ in thousands)	Six Months Ended September 30, 2020		Six Months Ended September 30, 2019
Packaged sales
Astaxanthin packaged	$	7,380	$	9,357
Spirulina packaged		3,968		3,645
Total packaged sales		11,348		13,002
Bulk sales
Astaxanthin bulk		882		502
Spirulina bulk		3,214		1,977
Total bulk sales		4,096		2,479
Contract extraction revenue		479		280
Total net sales	$	15,923	$	15,761

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements

Effective

April 1, 2019,

the Company adopted Accounting Standards Update (“ASU”)

2016

-

02,

Leases (Topic

842

): Accounting for Leases

and issued subsequent amendments to the initial guidance and implementation guidance including ASU

No.

2018

-

01,

2018

-

10,

2018

-

11,

2018

-

20

and

2019

-

01

(collectively including ASU

No.

2016

-

02,

“ASC

842”

). ASC

842

requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at lease commencement date. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will largely remain unchanged and shall continue to depend on its classification as a finance or operating lease. The Company elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and did

not

restate prior periods. Under the new guidance, the majority of the Company's leases continue to be classified as operating. Based on the Company's lease portfolio, the impact of adopting ASC

842

increased both total assets and total liabilities, however, it did

not

have a significant impact on the Company's consolidated statements of operations or cash flows. Finance leases continue to be classified with long-term debt on the Consolidated Balance Sheets and are described in Note

6.

See Note

8

for operating leases.

In

June 2018,

the Financial Accounting Standards Board ("FASB") issued ASU

2018

-

07,

“

Compensation - Stock Compensation (Topic

718

)”

(“ASU

No.

2018

-

07”

): Improvements to Nonemployee Share-Based Payment Accounting. ASU

No.

2018

-

07

expands the scope of Topic

718

to include share-based payment transactions for acquiring goods and services from non-employees, and as a result, the accounting for share-based payments to non-employees will be substantially aligned. ASU

No.

2018

-

07

is effective for the Company in the

first

quarter of fiscal year

2020.

  The Company adopted ASU

No.

2018

-

07

as of

April 1, 2019

with

no

impact on its consolidated financial statements and related disclosures.

In

November 2018,

the FASB issued ASU 

2018

-

18

 – 

Collaborative Arrangements

(“ASU

2018

-

18”

), which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is

not

a customer. This ASU requires retrospective adoption to the date the Company adopted ASC

606,

April 1, 2018,

by recognizing a cumulative-effect adjustment to the opening balance of retained earnings of the earliest annual period presented. The Company adopted ASU

2018

-

18

as of

April 1, 2020

with

no

impact on its financial statements. 

In

August 2018,

the FASB issued ASU

2018

-

15,

 “

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”

(“ASU

No.

2018

-

15”

), which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software 

(Subtopic

350

-

40

)

. The Company adopted AUD

No.

2018

-

15

as of

April 1, 2020

with

no

impact on its financial statements. 

In

August 2018,

the FASB issued ASU 

2018

-

13,

 “

Fair Value Measurement - Disclosure Framework (Topic

820

)”

(“ASU

No.

2018

-

13”

).The updated guidanceimproves the disclosure requirements on fair value measurements. The Company adopted this standard as of

April 1, 2020,

with

no

impact to its disclosures. 

Recently Issued Accounting Pronouncements

In

December 2019,

the FASB issued ASU

2019

-

12,

“

Simplifying the Accounting for Income Taxes”

(“ASU

2019

-

12”

), which as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes, removes certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU

2019

-

12

also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The guidance is effective for interim and annual periods beginning after

December 15, 2020,

with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its financial statements.