TIDMTYR TIDMTYRU
RNS Number : 7563Q
TyraTech, Inc.
22 June 2015
TyraTech, Inc.
("TyraTech" or the "Company")
Final Results
TyraTech, Inc. (AIM: TYR and TYRU), a life sciences company
focusing on nature-derived insect and parasite control products,
today announced its final results for the year ended 31 December
2014.
Operational Highlights
-- Achieved nationwide distribution of Vamousse Lice Treatment
with Walmart in the USA, as well as with Amazon.com, Walmart.com
and Drugstore.com
-- Expanded distribution of Vamousse Lice Treatment in the USA
with McKesson, and independent pharmacy retailers, including
Rochester Drug, Lewis Drug and Bartell Drug
-- Guardian personal mosquito and tick repellent available online with Amazon.com in the USA
-- Established a UK branch and engaged specialist healthcare
marketing firm to handle all marketing, commercialisation and
logistics in the UK
-- Launched Vamousse Lice Treatment in Boots and Tesco stores
and in Superdrug, Rowlands and Sainsbury's stores where we also
launched Vamousse Lice Protection Shampoo in the UK
-- Received nine new patents from the United States and
international patent offices for the Company's novel pest control
compositions
Financial Highlights
-- Overall gross revenue for 2014 was $4.9 million, a 250 percent year-over-year increase
-- Total gross product revenue in initial product launch year was $2.8 million
-- Overall gross margin was 74.9 percent
-- Product gross margin was 64.1 percent
-- Operating expenses of $8.5 million reflect product launch activities in both the USA and UK
-- Net loss, before and after taxes, was $5.1 million
-- Cash and cash equivalents at 31 December 2014 were $2.2 million
-- Received $8.9 million in net proceeds from stock issuances
Post Period Highlights
-- Vamousse Lice Protection Shampoo available at Walmart stores nationwide in the USA
-- Vamousse Lice Treatment listed with Walgreens and CVS Pharmacy Group in the USA
-- Vamousse products available with the three biggest
distributors of pharmaceutical products in the USA: McKesson,
AmerisourceBergen and Cardinal Health
-- Listing of Vamousse Lice Treatment and Vamousse Lice
Protection Shampoo products with Lloyds Pharmacy and Day Lewis
Pharmacy in the UK
-- Distribution agreement with SmartPak Equine to launch
OutSmart Fly Spray, the first TyraTech product to be used on
animals
Current Trading, Outlook and Cash
The combination of the launch of Vamousse Protection Shampoo in
Walmart and a number of new distribution arrangements in both the
US, including CVS and Walgreens and the UK has contributed to a
positive start to 2015, with year-to-date revenue being in line
with management's expectations.
It is worth noting, however, that the sale of head-lice
products, which account for a significant proportion of the
Company's current turnover levels, is a seasonal business and, as a
result, the Company's full year outcome will be heavily weighted to
the level of Vamousse sales achieved in the second half of the
year, which includes the traditional back to school period. That
aside, and notwithstanding the lack of prior year sales data to
assist with budgeting, management is confident that the commercial
achievements of the first half of the year puts TyraTech in a
strong position to address the market demand in the high head lice
season which occurs in the second half of the year.
Whilst we continue to incur costs for the onboarding and
integration associated with establishing and maintaining major
retail customer relationships, the Company is extremely focused on
cash preservation and optimisation. Subsequent to year end, the
Company received approximately $0.5 million in repayment of loans
and consideration relating to the renegotiation of the shareholding
structure of Envance, the Company's joint venture with AMVAC. Based
upon the Company's existing cash and cash equivalents, its current
operating plans and anticipated revenues from product sales and
other collaborative arrangements, and the ability to control costs
as a result of the Company's cost minimisation program, the Company
believes it will have sufficient cash to meet its working capital
needs for the foreseeable future.
Bruno Jactel, CEO of TyraTech, commented: "During the course of
the last eighteen months, we are very pleased to have significantly
expanded distribution for Vamousse Treatment in both the USA and
the UK. In addition, we have successfully launched Vamousse
Protection Shampoo with a number of major mass retail and pharmacy
groups in both territories.
Furthermore, Guardian personal mosquito and tick repellent is
available online and is building a strong core of loyal and
enthusiastic customers. We have also launched OutSmart, an equine
fly repellent product, with our partner SmartPak.
Through all of these successes, we have demonstrated the
strength of our technology in different market segments, the
breadth of our product portfolio, and the agility of our business
model. We believe that the medium term outlook for the Company is
strong as our technology continues to be commercialised into new
products and geographies."
Extracts of the audited final results appear below and the
Company's Annual Report and Notice of AGM will be posted to
shareholders on 29 June 2015 and made available on the Company's
website, www.tyratech.com, shortly.
For further information, please contact:
TyraTech, Inc.
Bruno Jactel, Chief Executive Officer
Tel: +1 919 415 4340
Barry Riley, Acting Chief Financial Officer
Tel: +44 7770 714796
SPARK Advisory Partners Limited
Matt Davis / Mark Brady
Tel: +44 20 3368 3552
Allenby Capital Limited, Joint Broker
Chris Crawford
Tel: +44 20 3328 5656
Whitman Howard, Joint Broker
Ranald Mc-Gregor Smith / Niall Devins
Tel: +44 20 7659 1234
Walbrook, Financial PR and IR
Nick Rome / Guy McDougall
Tel: +44 7933 8792
Chairman's Statement
Last year was a breakthrough year for TyraTech. Vamousse, the
first TyraTech-branded product, was successfully launched in stores
in both the US and UK; Guardian, the Company's personal mosquito
and tick repellent, was made available online in the US; and
TyraTech established operations in both the US and UK to drive
product development and commercialisation.
The Board of Directors believes that the commercial developments
of the past year validate the Company's technology and demonstrate
that its innovative products resonate with customers by answering
real market needs.
Specifically, following on from the 2014 Vamousse launch in
Walmart in the US, TyraTech has continued to expand its US
distribution in the first half of 2015, with key wins secured with
two major pharmacies, namely CVS and Walgreens. Within the UK, we
believe that several customer wins during late-2014 with Boots,
Tesco and Sainsbury's helped to influence the decisions of other
drug and mass market chains to stock Vamousse in 2015. Combined,
the US and UK distribution networks position TyraTech well to
continue gaining market share in the growing head lice treatment
category and drive revenue growth.
While focusing its efforts on a successful launch of Vamousse,
TyraTech also made its innovative Guardian mosquito and tick
personal repellent product available online in the US via
Amazon.com. Currently, the objective is to build a "grass roots
awareness" amongst outdoor enthusiasts from which the brand can
grow both in terms of wider distribution and a broader customer
base.
The Company also enjoyed commercial success in the animal health
market. In 2014, an initial partnership with Novartis Animal
Health, currently being reassessed after the takeover by Elanco
Animal Health, allowed the company to provide products for large
industrial production animal facilities. Early in 2015, a
distribution agreement was reached with SmartPak Equine, the
largest distributor of equine products in the US, to launch a novel
equine fly repellent, OutSmart. In both cases, TyraTech's products
answered a market need for solutions that control insects with a
high level of efficacy and safety.
The above accomplishments reflect the dedication and commitment
of TyraTech's employees to the development and launch of the
Company's products. In addition, a valuable network of partners has
supported the Company's growth in the domains of commercialisation,
marketing, supply chain and manufacturing.
I would like to take this opportunity to offer my sincere thanks
to all of the aforementioned parties.
Outlook
Going forward, the Company's focus will be on driving product
revenue growth, especially Vamousse. In the US in early-2015,
Walmart accepted the second Vamousse product, Lice Protection
Shampoo. Vamousse Shampoo opens an opportunity to grow the lice
treatment product revenue, while bringing real value for retailers
and the brand. In addition, the Vamousse distribution network was
expanded within both the US (Walgreens and CVS) and the UK (Day
Lewis and Lloyd's).
Guardian and OutSmart have gained an initial enthusiast customer
base, which, over time the Company will look to invest in and build
upon.
During this period of rapid development supported by the launch
of multiple products in two geographic markets, the Company has
learned how to generate sales under resource constraints. The Board
is particularly attentive to the optimisation of each dollar spent
and to the capture of market opportunities, two objectives that
will be balanced in the future.
Finally, I would like to thank our Board members, Company team,
partners and shareholders who have shown continuous support to
deliver the full value of TyraTech's technology.
Alan Reade
Non-Executive Chairman
22 June 2015
Chief Executive's Statement
The past year has been a milestone year for our company as we
introduced into the market our first consumer products and started
to implement our business model of managing the entire product
cycle, from discovery-to-development-to-commercialisation. TyraTech
is at the forefront of an evolving marketplace where customers are
demanding new alternatives to chemical pesticides. Families want to
protect their children and pets against insects and parasites with
non-toxic solutions, eat food that is not contaminated with
pesticide residues, and enjoy an environment that is not polluted.
Our vision is to use green technology to meet this market demand;
"putting nature to work" to control insects and parasites and,
ultimately, enhance the health and well-being of humans, animals
and the planet. I believe that TyraTech has technology powerful and
broad enough to bring to fruition innovative insect and parasite
control products that are effective and safe for multiple
applications in personal care, animal health, home, garden and
agriculture. I also believe in the power of our innovation, in the
skills of our collaborators, and in the strength of our external
partnerships to bring to the market a series of products that will
make a difference.
What did we achieve in 2014 and early 2015?
We focused our efforts to successfully launch Vamousse, our
flagship head lice product
Second only to the common cold, pediculosis, or head lice
infestation, remains the most frequent health issue facing children
aged 3 to 11. More than 12 million children are affected in the USA
every year and it is a global problem. In addition, the most common
pesticides used to treat this parasite are becoming less effective
due to increased head lice resistance.
Vamousse Lice Treatment is scientifically proven to kill 100% of
lice and eggs, even those that have developed resistance against
the most common pyrethroid products, in a single 15-minute
treatment. Vamousse Lice Treatment comes in a convenient mousse
formulation, is non-toxic, pesticide-free, and safe to use on
children two years of age and older. Vamousse Lice Protection is a
shampoo gentle enough for daily use and specifically developed to
help the consumer protect against an infestation following a
potential exposure to head lice or following treatment to prevent
re-infestation.
In 2014, TyraTech successfully launched Vamousse Lice Treatment
in the USA with a nationwide listing with Walmart. In the second
half of 2014, both Vamousse Lice Treatment and Vamousse Lice
Protection Shampoo were introduced in the UK with major retailers
including Boots, Superdrug, Tesco and Sainsbury's. We supported the
launch with a strong marketing campaign. Our objective was to
achieve broad market penetration with major distributors in both
the USA and the UK. This was further accomplished in early 2015
when we expanded our shelf presence in the USA with CVS and
Walgreens, the two biggest pharmacy chains in the USA and added
Vamousse Protective Shampoo at Walmart nationwide. We also
strengthened our market presence in the UK by adding distribution
of the Vamousse suite of products with Lloyds, Rowlands, Day Lewis
and a host of independent pharmacies. The deployment of our
products in these new distribution channels positions us well to
address the market demand occurring in the high head lice season,
which coincides with the traditional back to school period.
The success of Vamousse drove our financial results in 2014
In 2014, the Company generated $2.8 million in product sales
(FY2013: $0.0 million) and total gross revenue of $4.9 million
(2013: $1.4 million). These numbers reflected only a partial year
of product sales, primarily through our relationship with Walmart.
This success led Walmart to take a second product, the Protection
Shampoo, for 2015, and led CVS and Walgreens to accept the
Treatment product with shipments beginning early 2015.
The net loss of the Company for 2014 was $5.1 million (2013:
$4.9 million), mainly driven by the launch of Vamousse in the UK in
the second half of the year and the decision of the major pharmacy
chains in the USA to go for a full launch of Vamousse in 2015,
instead of a partial-year launch at the end of 2014. Cash and cash
equivalents were $2.2 million at year end (2013: $0.9 million). We
expect Vamousse to still drive most of our sales in 2015,
benefiting from an expanded first-rate distribution network, a very
strong competitive positioning, and positive feedback from
customers.
The Company launched Guardian personal repellent online
TyraTech has developed a non-toxic, DEET-free, plant-based
insect repellent that exceeds the activity of 15% DEET products.
Independent third party testing demonstrated that the TyraTech
personal repellent, marketed as Guardian Wilderness, provides up to
8 hours of protection against mosquitoes on human volunteers and 4
hours of protection against ticks. Additionally, two peer-reviewed
research papers published in scientific journals demonstrated the
efficacy of Guardian Wilderness against mosquitoes and ticks as
compared to competitor products.
For its first year in the market, TyraTech focused on building a
strong customer support base for its products among outdoor
enthusiasts. To do this, we built a grassroots marketing campaign
based on samples and targeted consumer promotion to drive a
prominent listing on Amazon.com. Guardian Wilderness is now one of
the top non-DEET personal repellents on Amazon.com with excellent
ratings. This constitutes a solid base on which the Company plans
to build a broader distribution network with both online and more
traditional retailers in late-2015 and the subsequent years.
The Company entered the animal health market
Insects and parasites are a major source of productivity loss
for farmers and present an increasing risk for the public health
through the transmission of infectious diseases. The common fly,
Musca domestica, negatively affects livestock by biting and
nuisance swarming. As mechanical vectors of pathogens, flies are
estimated to cause up to $1 billion in production losses to the
worldwide meat and dairy industry. Similarly, cockroaches serve as
mechanical vectors of viruses, bacteria, and endoparasites and can
disseminate antibiotic resistant bacteria from barn to barn. In
addition, production animals living outdoors are frequently
infested by internal parasites, while dogs and cats are constantly
pestered by fleas, ticks and heartworms. Products which control
insects and parasites in the animal health market are a key target
for TyraTech and represent a global market estimated to be worth
more than $7 billion.
In 2013, the Company entered into a distribution agreement with
Novartis Animal Health to launch six products under the Natunex
brand with distributors and producers of cattle, swine and poultry.
The Company generated approximately $0.3 million of products sales
in 2014 with Novartis. On 22 April 2014 Eli Lilly (NYSE: LLY)
announced that it had entered into an agreement to acquire Novartis
Animal Health, which subsequently closed in January 2015. This
change of control adversely impacted TyraTech's product launches.
However, it provided the Company with an opportunity to reassess
its distribution strategy. Currently, the Company continues to
evaluate its options for a reintroduction of this product portfolio
in 2016.
In February 2015, TyraTech entered into an exclusive
distribution agreement with SmartPak Equine to launch OutSmart Fly
Spray - a pioneering, new insect repellent. While the first of
TyraTech's products have been applied to targeting the control of
insects on humans or within livestock premises, this is the first
TyraTech product to be used directly on animals, opening the door
to further expansion into a larger segment of the animal health
market.
Adjustment of TyraTech's holdings in the Envance Joint
Venture
Envance Technologies, LLC, a jointly owned enterprise between
TyraTech and AMVAC, a wholly-owned subsidiary of American Vanguard
Corporation (NYSE: AVD), was originally created in November 2012 to
further develop and commercialise TyraTech's technology in the
fields of agriculture, home, and lawn and garden. Since that time,
TyraTech's primary focus, both financially and commercially, has
been on its personal care (the Vamousse range of products) and
animal health products. In line with this area of focus, the
majority of the financing for Envance has been provided by AMVAC.
Therefore, in 2015, TyraTech and AMVAC have agreed 1) to adjust
their original ownership percentage interests in Envance; and 2)
for AMVAC to purchase three percent of TyraTech's remaining
ownership interest in Envance. Post these transactions, AMVAC owns
86.67 percent interest in Envance, and TyraTech owns a 13.33
percent interest. As a result of these transactions, TyraTech
received approximately $0.5 million in cash in repayment of loans
and consideration.
This reduction of TyraTech's membership interest in Envance
reflects the greater focus of the Company on its core markets of
personal care and animal health.
What are the lessons of 2014?
First, our products answer significant unmet market needs.
Today, families are relying on Vamousse to treat and protect their
children against head lice infestation. Outdoor enthusiasts are
using Guardian to protect themselves against ticks and mosquitoes.
And, horse owners are discovering the benefits of the OutSmart fly
repellent. Our problem-solving approach to addressing market needs
will continue to drive our innovation engine.
Second, TyraTech's products are gaining traction in the market
and attracting major retailers. In both the USA and the UK,
Vamousse is distributed by world-class chains of pharmacies and
groceries, validating our business model and paving the way for
future growth. Our early successes have attracted the interest of
potential partners and will serve as a launching pad for
geographical expansion.
Third, we demonstrated our operational ability to address large
customers and varied markets. I am particularly proud of the
TyraTech team for having established a full
discovery-to-development-to-commercialisation process, a solid
production and supply network, and an award-winning marketing
program. The progress made in 2014 and early 2015 is the building
block for expansion into other market segments.
Fourth, we have established a reliable network of business
partners. I want to thank all the partners, being in sales and
commercialisation, supply chain, marketing and distribution, who
believed in our story, our technology and our team and often took
the risk with us to market our products. These partners have the
bandwidth to grow with TyraTech and the reach to help us
successfully launch new products.
Fifth, we are laying the foundations for future growth. The
Company's growth pathway will rely upon increasing the market
penetration of its existing products, expanding geographically, and
developing its rich patent portfolio into a pipeline of new
products.
Outlook for 2015
In 2015, we are clearly seeing opportunities for growth,
immediately with Vamousse, but also in a diversified portfolio of
products for both personal care and animal health and we will
continue to implement a phased geographical expansion, as resources
permit.
The combination of the launch of Vamousse Protection Shampoo in
Walmart and a number of new distribution arrangements in both the
US, including CVS and Walgreens, and the UK has contributed to a
positive start to 2015, with year-to-date revenue being in line
with management's expectations.
It is worth noting, however, that the sale of head lice
products, which account for a significant proportion of the
Company's current turnover levels, is a seasonal business and, as a
result, the Company's full year outcome will be heavily weighted on
the level of Vamousse sales achieved in the second half of the
year, which includes the traditional back to school period. That
aside, and notwithstanding the lack of prior year sales data to
assist with budgeting, management is confident that the commercial
achievements in the first half of the year put TyraTech in a strong
position to address the market demand in the upcoming head lice
high season.
Whilst TyraTech continues to incur costs for the on-boarding and
integration associated with establishing and maintaining major
retail customer relationships, the Company remains focused on cash
preservation and optimisation. Subsequent to year end, the Company
received approximately $0.5 million in repayment of loans and
consideration relating to the renegotiation of the shareholding
structure of Envance, the Company's joint venture with AMVAC. Based
upon the Company's internal forecasts through 2016, TyraTech
believes its existing cash and cash equivalents, its current
operating plans, the anticipated revenues from product sales and
other collaborative arrangements, and the ability to control costs
as a result of the Company's cost minimisation program, will
provide sufficient cash to meet its working capital needs for the
foreseeable future.
Vincent Morgus, who was CFO, has decided to leave the Company to
pursue other interests and the Board wishes him well in his future
plans. We have commenced the process of finding a replacement for
Vince, and in the interim, Barry Riley (Chairman of the Audit
Committee), non-executive Director and a Chartered Accountant, has
agreed to become acting CFO.
In closing, I want to thank our Board of Directors and the
TyraTech team who work so diligently to help us launch our
innovative products. They have committed themselves to our vision
and have given us a compelling advantage in today's marketplace. I
also want to thank our shareholders for their continued confidence
in our strategy and implementation capabilities.
Bruno Jactel
Chief Executive Officer
22 June 2015
Financial Highlights
Revenue
Overall, gross revenue for 2014 was $4.9 million versus $1.4
million in 2013. This increase in gross revenue can be primarily
attributed to the introduction of product revenue ($2.8 million
versus $0.0 million), which commenced in February 2014 in the USA
($2.1 million) and in July 2014 in the UK ($0.7 million). Going
forward, as our business model continues to evolve, we anticipate
product revenue will become a greater percentage of our overall
gross revenue.
Net revenue grew approximately 245 percent, or $3.3 million,
year-over-year to $4.7 million from $1.4 million. This growth can
be primarily attributed to product net revenue growth ($2.6 million
versus $0.0 million). The remaining growth in net revenue came from
collaborative revenue, which benefited from a one-time recognition
of the approximate $1.2 million remaining Terminix exclusive
product license fee, which was offset by year-over-year reductions
in other collaborative revenue sources. Again, going forward we
anticipate product net revenue will become a greater percentage of
our overall net revenue.
Cost of Revenue, Gross Profit, and Gross Margin
Overall, cost of revenue for 2014 was $1.2 million versus $0.7
million in 2013. Product cost of revenue was $0.9 million and $0.0
million for 2014 and 2013, respectively; while collaborative cost
of revenue was $0.3 million in 2014 versus $0.7 million in
2013.
Gross profit for 2014 was $3.5 million (gross margin equals 74.9
percent) versus $0.6 million (46.3 percent) in 2013. Gross profit
and gross margin both benefited from the one-time recognition of
the remaining Terminix exclusive product license fee.
As our business model moves to a product-based model, product
gross profit and product gross margin will become primary measures.
For 2014, product gross profit was $1.7 million (64.1 percent).
Within the personal care market, we anticipate product gross margin
can remain in the low-to-mid 60 percentage range. However, downward
gross margin pressure may be experienced due to such factors as, i)
the initial year investments required for our customer acquisition
initiatives, ii) our response to competitive market dynamics, and
iii) our ability to effectively manage our supply chain,
manufacturing, and distribution costs, as well as other
factors.
Operating Performance
Operating costs and expenses for 2014 were $8.5 versus $5.0
million in 2013.
Net of non-cash and other one-time expenses, operating costs and
expenses were approximately $8.2 million and $4.7 million in 2014
and 2013, respectively, an increase of $3.5 million. The increase
was driven by an approximate $3.0 million increase in business
development costs and expenses, primarily due to advertising and
sales support costs associated with the USA and the UK product
launches, as well as an approximate $0.7 million increase in
general and administrative costs and expenses, primarily due to
establishing a UK branch and incurring personnel-related costs.
These increases were partially offset by a $0.2 million reduction
in research and development costs and expenses. Furthermore, as we
continue to evaluate growth opportunities such as market
penetration, geographic expansion, and new product launch options,
both business development and general and administrative costs and
expenses are expected to increase in absolute terms. However, over
time, we anticipate both these costs items will decrease as a
percentage of total product revenue.
The loss from operations for 2014 was $5.0 million versus $4.3
million in 2013, and the net loss, before and after taxes, for 2014
was $5.1 million versus $4.9 million in 2013. In 2014, the drivers
of the $0.1 million difference between loss from operations and net
loss, before and after taxes, were the income impact of $0.2
million due to the change in the valuation of warrants offset by
recognizing a $0.3 million loss on our investment in the Envance
joint venture.
Balance Sheet
At 31 December 2014 and 2013, cash and cash equivalents were
$2.2 million and $0.9 million, respectively.
Working capital was $2.5 million at 31 December 2014 versus
negative working capital of $0.2 million at 31 December 2013. The
$2.7 million change is attributable to increases in cash and cash
equivalents, accounts receivable, and inventory, partially offset
by increases in accounts payable and accrued liabilities.
Deferred revenue and other long-term liabilities decreased by
$1.3 million ($0.1 million in 2014 versus $1.4 million in 2013)
primarily due to recognising the remaining $1.2 million of the
Terminix exclusive product license fee during 2014.
At 31 December 2014 shareholders' equity was approximately $2.6
million versus a shareholders' deficit of $1.4 million at 31
December 2013. The $4.0 million increase was primarily due to
approximately $8.9 million received in net proceeds from stock
issuances, including exercise of warrants, throughout the year,
offset by the current year $5.1 million net loss, before and after
taxes.
Cash Flow and Liquidity
Net cash used in operations was $7.2 million in 2014 compared to
$4.6 million for 2013, an increase of $2.6 million. This increase
was primarily the result of the production of inventory, an
increase in accounts receivable associated with product sales and
an increase in business development costs and expenses in relation
to the product launches undertaken in both the USA and the UK.
Net cash used investing was approximately $0.3 million, which
represented the Company's October 2014 covering capital
contribution to Envance.
Net cash provided by financing activities was approximately $8.9
million received in net proceeds from current year stock
issuances.
As of 31 December 2014, the Company had approximately $2.2
million in cash and cash equivalents. The Company had no
indebtedness as of 31 December 2014 but currently has no committed
external sources of funds. Subsequent to year end, the Company
received approximately $0.5 million in repayment of loans and
consideration relating to the renegotiation of the shareholding
structure of Envance, the Company's joint venture with AMVAC.
With new products and distribution channels, there is always
uncertainty as to the speed and level of market penetration and, as
explained in the CEO's letter, there is a strong seasonal element
to the Company's product sales, which can impact liquidity. Based
upon the Company's existing cash and cash equivalents, its current
operating plans, anticipated revenues from product sales and other
collaborative arrangements, and the ability to control costs as a
result of the Company's cost minimisation program, the Company's
forecast indicates it will have sufficient cash to meet its working
capital needs through the next twelve months. However, the forecast
provides no assurance that these anticipated revenues or
collaborative arrangements, cost minimisation actions and related
cash flows will materialise. In this event, the Company may need to
initiate actions to raise additional capital.
Currency Effects
In the current year, the Company had no material foreign
currency risk. Going forward, as the Company pursues current and
future growth opportunities in geographic regions outside the USA,
the foreign currency risk may become material, at which time the
Company may evaluate the need to use financial derivatives to
mitigate the foreign currency risk. However, there can be no
assurance these financial derivatives will either mitigate the risk
or be available on acceptable terms, if at all.
Barry Riley
Acting Chief Financial Officer
22 June 2015
Consolidated Balance Sheets
31 December 2014 and 2013
in $000's, except for share data
2014 2013
------------------------------------------ -------------------------------- --------------------------------
ASSETS
Current assets
Cash and cash equivalents 2,212 873
Accounts receivable 909 85
Inventory 925 63
Prepaid expenses 191 150
------------------------------------------ -------------------------------- --------------------------------
Total current assets 4,237 1,171
Property and equipment, net of
accumulated depreciation ($1.5M
2014, $1.4M 2013) 84 167
Long term deposits 69 66
Total assets 4,390 1,404
------------------------------------------ -------------------------------- --------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT)
Current liabilities
Accounts payable 971 250
Accrued liabilities 664 412
Liability for warrants 23 210
Deferred revenue 72 501
------------------------------------------ -------------------------------- --------------------------------
Total current liabilities 1,730 1,373
Deferred revenue and other long-term
liabilities 89 1,381
Total liabilities 1,819 2,754
------------------------------------------ -------------------------------- --------------------------------
Commitments and contingencies
Shareholders' equity (deficit)
Common stock, at $0.001 par authorized
380 million; 262.3 million shares
issued, 261.2 million shares outstanding
(2013: 168.8 million shares issued,
167.7 million shares outstanding) 261 168
Additional paid in capital 87,341 78,421
Accumulated deficit (84,920) (79,826)
Accumulated other comprehensive 2 -
income
Treasury stock of 1.1 million
shares (2013: 1.1 million shares) (108) (108)
Total shareholders' equity (deficit) 2,576 (1,345)
------------------------------------------ -------------------------------- --------------------------------
Non-controlling interest (5) (5)
Total shareholders' equity (deficit) 2,571 (1,350)
Total liabilities & shareholders'
equity 4,390 1,404
------------------------------------------ -------------------------------- --------------------------------
Consolidated Statements of Operations
Years ended 31 December 2014 and 2013
in $000's except for share data
2014 2013
------------------------------------------------- ------------------ -------------------
Gross revenue:
Product 2,836 -
Collaborative 2,097 1,366
------------------------------------------------- ------------------ -------------------
Total gross revenue 4,933 1,366
Less: sales discounts, returns, and 215 -
allowances
------------------------------------------------- ------------------ -------------------
Total net revenue 4,718 1,366
Cost of revenue:
Product 940 -
Collaborative 242 733
------------------------------------------------- ------------------ -------------------
Total cost of revenue 1,182 733
------------------------------------------------- ------------------ -------------------
Gross profit 3,536 633
Costs and expenses:
General and administrative 3,558 2,798
Business development 3,357 430
Research and development 1,603 1,754
Total costs and expenses 8,518 4,982
------------------------------------------------- ------------------ -------------------
Loss from operations (4,982) (4,349)
------------------------------------------------- ------------------ -------------------
Other income (expense):
Interest income 1 1
Other income (expense) - 15
Net loss (from unconsolidated subsidiary) (300) (359)
Change in fair value of warrant liabilities 187 (210)
-------------------
Total other income (expense) (112) (553)
------------------------------------------------- ------------------ -------------------
Loss from operations before income
taxes (5,094) (4,902)
Income tax expense - -
Net income (loss) (5,094) (4,902)
------------------------------------------------- ------------------ -------------------
Net loss per common share
Basic and diluted (0.03) (0.03)
------------------------------------------------- ------------------ -------------------
Weighted average number of common shares
(000's)
Basic and diluted 207,232 152,417
------------------------------------------------- ------------------ -------------------
Consolidated Statements of Shareholders' Equity (Deficit)
Years ended 31 December 2014 and 2013 in $000's
Common Additional Accumulated Treasury Non-controlling Accumulated Total
Stock Paid-in deficit Stock Interest Other Equity
Capital Comprehensive (Deficit)
Income
Balances as
of
December 31,
2012 107 74,342 (74,924) (108) (5) - (588)
-------------- ------------- ------------- ---------------------------- ----------- ---------------- ----------------------- -------------
Proceeds from
issuance of
common
stock, net
of
expenses 61 3,918 - - - - 3,979
Stock based
compensation
- SARS - 161 - - - - 161
Stock based
compensation
- stock
grants - - - - - - -
Consolidated
net loss - - (4,902) - - (4,902)
Balances as
of
December 31,
2013 168 78,421 (79,826) (108) (5) - (1,350)
-------------- ------------- ------------- ---------------------------- ----------- ---------------- ----------------------- -------------
Proceeds from
issuance of
common
stock, net
of
expenses 87 8,063 - - - - 8,150
Equity
warrants
issued (also
reduces
proceeds
above) - 210 - - - - 210
Exercise of
AMVAC
warrants 6 494 - - - - 500
Exercise of
SARS - 1 - - - - 1
Stock based
compensation
- SARS - 152 - - - - 152
Foreign
Currency
translation - - - - - 2 2
Consolidated
net loss - - (5,094) - - - (5,094)
Balances as
of
December 31,
2014 261 87,341 (84,920) (108) (5) 2 2,571
-------------- ------------- ------------- ---------------------------- ----------- ---------------- ----------------------- -------------
Consolidated Statements of Cash Flows
Years ended 31 December 2014 and 2013
in $000's
2014 2013
--------------------------------------------------- ----------------------- -----------------------
Cash flows from operating activities:
Net loss (5,094) (4,902)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 96 109
Amortisation of stock awards 152 161
Change in fair value of warrant
liability (187) 210
Net loss from unconsolidated subsidiary 300 359
Changes in operating assets and
liabilities:
Accounts receivable (824) 25
Inventory (862) (46)
Prepaid expenses and long-term
deposits (45) (69)
Accounts payable and accrued liabilities 973 18
Deferred revenue and other long-term
liabilities (1,721) (501)
--------------------------------------------------- ----------------------- -----------------------
Net cash used in operating activities (7,212) (4,636)
--------------------------------------------------- ----------------------- -----------------------
Cash flows from investing activities:
Purchases of property and equipment (12) (18)
Investment in unconsolidated subsidiary (300) -
Net cash used in investing activities (312) (18)
--------------------------------------------------- ----------------------- -----------------------
Cash flows from financing activities:
Net proceeds from sale of common
stock 8,150 3,978
Equity warrants issued 210 -
Exercise of SARS 1 -
Exercise of warrants 500 -
Net cash provided by financing
activities 8,861 3,978
--------------------------------------------------- ----------------------- -----------------------
Net increase (decrease) in cash 1,337 (676)
Cash and cash equivalents, beginning
of year 873 1,549
Accumulated other comprehensive 2 -
income
Cash and cash equivalents, end
of year 2,212 873
--------------------------------------------------- ----------------------- -----------------------
Notes
1. Basis of preparation
TyraTech, Inc., a Delaware corporation, (the Company) or
(TyraTech) is engaged in the development, manufacture, marketing
and sale of proprietary insecticide and parasiticide products,
through the utilisation of a proprietary development platform that
enables rapid characterisation of potent blends of plant oil
derived pesticides. TyraTech is focused on developing safe and
effective products with plant essential oils to be used in a wide
variety of pesticidal and parasitic applications. These new
synergistic formulations target specific receptors unique to
invertebrates.
The consolidated financial statements of the Company for the
year ended 31 December 2014 and 2013 comprise the Company and its
subsidiaries.
The information contained within this Announcement has been
extracted from the audited financial statements which have been
prepared in accordance with accounting principles generally
accepted in the United States of America (US GAAP).
The results announcement for the year ended 31 December 2014 was
approved by the Board for release on 22 June 2015.
2. Liquidity and Capital Resources
The Company's operations have been funded through a combination
of common stock issuances, product sales, collaborative
arrangements, and proceeds from technology licensing
agreements.
The Company's future capital requirements will depend on many
factors. For example, i) the level of product sales of the
Company's currently marketed products and any additional products
that may be marketed in the future; ii) the scope, progress,
results, and costs of development activities for current product
candidates; iii) the costs of commercialisation activities
including product marketing, sales, and distribution; and iv) the
costs of preparing, filing, and prosecuting patent applications and
maintaining, enforcing, and defending claims to intellectual
property.
As of 31 December 2014, the Company had approximately $2.2
million in cash and cash equivalents. The Company has no
indebtedness as of 31 December 2014.
The Company has produced monthly forecasts to the end of 2016,
which indicate the Company will have sufficient cash to meet its
working capital needs through the next twelve months based upon the
following forecast assumptions: existing cash and cash equivalents,
its current operating plans, anticipated revenues from product
sales and other collaborative arrangements, and the ability to
control costs as a result of the Company's cost minimisation
program. However, there can be no assurance, based upon the
Company's existing cash and cash equivalents, its current operating
plans, anticipated revenues from product sales and other
collaborative arrangements, and the ability to control costs as a
result of the Company's cost minimisation program, that the Company
will have sufficient cash to meet its working capital needs through
the next twelve months. As such, to the extent the Company's
capital resources are insufficient to meet future capital
requirements, the Company will need to finance its cash needs
through public or private equity offerings, debt financings,
corporate collaboration and licensing arrangements, or other
financing alternatives. Currently, the Company has no committed
external sources of funds, and additional equity or debt financing,
or corporate collaboration and licensing arrangements, may not be
available on acceptable terms, if at all.
3. Distribution of Annual Report and Financial Statements
The Company will distribute copies of its full Annual Report and
Financial Statements that comply with US GAAP on 29 June 2015
following which copies will be available either from the registered
office of the Company: The Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware 19801, US; or from the Company's
website; www.tyratech.com.
4. Date of Annual General Meeting
The Annual General Meeting (AGM) of the stockholders of
TyraTech, Inc., will be held at the offices of the Company, 5151
McCrimmon Parkway, Suite 275, Morrisville, NC USA 27560 on 29 July
2015 at 10:00AM EDT.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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