TIDMTYR TIDMTYRU
RNS Number : 9599H
TyraTech, Inc.
27 June 2013
27 June 2013
TyraTech, Inc.
("TyraTech" or the "Company")
Final Results
TyraTech Inc. (AIM: TYR and TYRU), a natural sciences company,
today announces its final results for the year ended 31 December
2012.
Operational Highlights
-- Secured a trademark licensing agreement with Terminix
International Company to market and sell TyraTech insecticide
products under the Terminix(R) brand for consumer household use in
the USA. This trademark licensing agreement was assigned to the new
business enterprise formed with AMVAC Chemical Corporation
("AMVAC"), Envance Technologies, LLC.
-- Completed a new business enterprise agreement with AMVAC to
commercialise existing and new pesticide products using TyraTech
Nature's Technology(R) in the global consumer, commercial and
agricultural markets
-- Received a significant upfront licensing fee from AMVAC for
licensing TyraTech Nature's Technology(R) to the joint enterprise,
named Envance Technologies, LLC
-- Reached a distribution agreement with a major US retailer to
launch nationally the Terminix(R) Ultimate Protection(TM) product
line of aerosols
-- Completed personal repellent product and registered in all 50
U.S. states, Germany, and the UK. Registration was also received
from France in 2013
-- Received registration in the UK for non-toxic head lice products
Financial Highlights
-- Product revenue decreased to $0.3 million (2011: $4.4 million)
-- Collaborative revenue increased to $3.2 million (2011: $2.7
million), which included an upfront license fee from AMVAC for
licensing TyraTech Nature's Technology(R) to the new joint
enterprise, named Envance Technology, LLC.
-- Gross profit decreased to $3.1 million (2011: $4.7 million)
-- Operating expenses reduced by 16% to $6.1 million (2011: $7.2 million)
-- Net loss before and after taxes increased to $2.9 million (2011: $2.7 million)
-- Cash and cash equivalents increased to $1.5 million at year end (2011: $0.9 million)
Post Period Highlights
-- Successfully raised approximately $4.3 million, net of
expenses, through a share placement and subscription
-- American Vanguard Corporation (the parent company of AMVAC)
purchased a 29.4% shareholding in the Company
Bruno Jactel, CEO of TyraTech, commented: "We expect to increase
our income from products in 2013 as we introduce the Company's new
personal care and animal health products to domestic and
international markets. We continue to remain positive about our
medium and long-term prospects due to the potential of the
Company's technology, as evidenced by the progress we have made,
particularly in our personal care and animal health product
development pipeline and the increasing interest in our products
from high caliber global partners."
Extracts of the audited final results appear below and the
Company's Annual Report and Notice of AGM will be posted to
shareholders today 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
R. Daniel Williams, Chief Financial Officer
Tel: +1 919 415 4285
N+1 Singer, Nominated Adviser and Joint Broker
Jonny Franklin-Adams / Alex Wright
Tel: +44 20 7496 3000
First Columbus LLP Joint Broker
Chris Crawford
Tel: +44 20 3002 2070
Walbrook, Financial PR and IR
Bob Huxford / Guy McDougall (Public Relations)
Tel + 44 7933 8792
Paul Cornelius (Investor Relations)
Tel +44 20 7933 8794
Chairman's Comments
From the onset we knew 2012 would be a challenging year but that
if we remained focused and achieved our goals it could also be the
year where we would be able to secure the commercial foundation of
the Company and accelerate the transition to a business focused on
important revenue generation.
The successful negotiation with Terminix to license their brand
name for the household insecticide product range in North America
was an important milestone. This led to the products being stocked
in The Home Depot stores very late in the year in preparation for a
full roll out in 2013.
Also, in the last quarter of the year the joint venture with
AMVAC Chemical Corporation (a wholly-owned subsidiary of American
Vanguard Corporation) was formed to create a new entity, Envance
Technologies, LLC, focused on exploiting the household insect
control market as well as the lawn and garden opportunities. This
initial strategic alliance was reinforced in early 2013 when
American Vanguard Corporation purchased stock in TyraTech to become
a 29.4% shareholder.
The TyraTech research and development and product teams
continued to successfully develop products which we are confident
will become exciting market opportunities particularly in the
personal care (head lice control / prevention and personal
repellents) and animal health markets.
The Company is now moving quite rapidly to a phase of product
commercialization which the Directors believe should lead to
significant revenue growth in the coming years. With this in mind,
the Board was very pleased to announce the appointment of Bruno
Jactel as Chief Executive Officer in January 2013. Bruno had a very
successful career as Global Head of Marketing and Strategy at
Merial Limited, the $2.6 billion revenue generating Animal Health
subsidiary of the Sanofi Group, and is highly skilled and
experienced in the commercialization process of consumer
products.
The Board has also recently made various changes to its
composition. Dr. Kevin Schultz retired from the Company and
resigned from the Board as a Non-Executive Director with effect
from 1 April 2013. Kevin was of great assistance in steering the
company through a challenging period in its growth. Following the
appointment of Bruno Jactel as Chief Executive Officer in January
2013, I became Non-Executive Chairman on 20 June 2013 relinquishing
my previous Executive Chairman position. At the same time, the
Board appointed Eric Wintemute as a Non-Executive Director. Eric is
the Chairman and CEO of American Vanguard Corporation (the
Company's largest shareholder) and is a highly skilled and
successful executive who will further enhance the competencies of
an already well qualified Board.
Finally I am pleased to say that the Board and all the members
of staff are confident and excited about the future of the Company.
I thank them for their hard work and dedication.
Alan Reade
Non-Executive Chairman
27 June 2013
Chief Executive Officer's Report and Operational Review
TyraTech is first and foremost a team of talented and passionate
people focused on developing and commercializing technology that
can be used to solve some of the most difficult problems in insect
and parasite control; providing answers to real and significant
market needs. Since joining the Company at the beginning of January
2013, I am continually amazed at the performance of our products,
which bring an enhanced level of safety for users and the
environment while providing performance equivalent or superior to
existing synthetic chemical pesticides. I also feel proud to have
joined the TyraTech team - people dedicated to replacing and
reducing the use of harmful products whenever possible. Our common
goal is to bring to the marketplace a range of bio-pesticides which
can reduce the impact of insects, insect-transmitted diseases and
parasite infestations that have dramatic effects on the lives of
children, families and animals, especially in developing
countries.
From 2008 to 2012, TyraTech was focused on establishing a strong
technology platform, accumulating a solid portfolio of patents and
developing and registering a series of novel products. The
Company's product portfolio now includes more than 15 products at
various stages of development with eight products ready for
commercialisation.
2012 was a turning point for the Company, transitioning from an
organization focused on research and product development to a
company able to register and successfully commercialize innovative
products. A line of consumer aerosol pesticides was placed with a
major home improvement retailer in the USA and our novel head lice
treatment and personal insect repellent were prepared for market
introduction in Europe as well as the USA. They both are registered
in the UK. In addition, the personal insect repellent is also
registered in the USA, Germany and France while the head lice
product is in the final phase of registration in the USA. This was
also a year of tightening control of expenses and preparing the
Company infrastructure to support growth. Operating expenses were
reduced by 16% to $6.1 million (2011: $7.2 million) during 2012,
creating a stronger financial foundation. We also formed a new
business enterprise, Envance Technologies, LLC ("Envance"), with
AMVAC Chemical Corporation ("AMVAC") to commercialise new pesticide
products for global consumer, commercial and agricultural markets.
The consumer products will provide insect control solutions for
homes, lawns and gardens. This agreement included a substantial
upfront licensing fee as well as annual residual payments. The two
companies established a strong relationship that deepened when
American Vanguard Corporation purchased a 29.4% share of TyraTech
by participating in our last fund raising initiative. The Company
raised gross proceeds of approximately $4.5 million (approximately
$4.3 million net of expenses).
As we proceed into the second half of 2013, the Directors
believe that TyraTech is well-positioned for growth with a range of
new products to launch through new and strengthened relationships
with important strategic partners, a strong potential for
geographical expansion in developing countries, an
industry-changing technology platform, and a rich pipeline of
innovative products.
Outlook
We expect to increase our income from products in 2013 as we
introduce the Company's new personal care and animal health
products to domestic and international markets. We continue to
remain positive about our medium and long-term prospects due to the
potential of the Company's technology, as evidenced by the progress
we have made, particularly in our personal care and animal health
product development pipeline and the increasing interest in our
products from high caliber global partners. These potential
partners include major global animal health and consumer products
companies, as well as major US retailers, with which we are
presently in discussions. The approximate $4.3 million net proceeds
raised in April 2013 provides us with the necessary resources to
advance our products while we continue negotiations with existing
and new partners. Envance Technologies, LLC has commenced sales of
the Terminix-branded insecticide products nationally through The
Home Depot and has also initiated test marketing at 100 of the
Target Corporation's stores.
Furthermore, we are evaluating each of the markets in which we
have developed products or have a development pipeline, in order to
focus our resources on those opportunities with the greatest
potential returns to shareholders. Accordingly, the Company may
seek to obtain value from some areas of application of its
technology in order to reinvest in others.
Bruno Jactel
Chief Executive Officer
27 June 2013
Financial Review
(All financial information in this report is denominated in USA
currency ("$"), unless otherwise indicated)
Revenues
TyraTech continues to develop its products and is working to
diversify revenue sources as the Company matures as a business.
Overall revenues decreased for the year to $3.6 million (2011: $7.2
million). Product revenues decreased to $0.3 million (2011: $4.4
million) as our partner experienced lower sales than forecasted.
Collaborative revenue increased to $3.2 million (2011: $2.7
million) primarily from a single upfront license exclusivity fee
which was part of the joint enterprise transaction (Envance
Technologies, LLC), along with changes in the Product Supply
Agreement with Terminix and the agreement with Kraft. TyraTech does
not consolidate the revenue, cost of goods sold, or operating
expenses of Envance Technologies, LLC, but alternatively reflects
the results using the equity method of accounting as a
non-controlled subsidiary.
Cost of Sales and Gross Margin
Cost of sales for the year was $0.5 million (2011: $2.5
million). This included cost of product sold of $0.2 million,
(2011: $1.8 million) and project costs for collaborative revenue
projects of $0.2 million (2011: $0.7 million). Gross margin from
product sales in 2012, excluding the effect of the $122,914
write-off of obsolete inventory, was 64% (2011: 59%). The increase
in gross margin was primarily driven by the upfront license fee
received from AMVAC on the establishment of the Envance joint
enterprise.
Operating Expenses and Loss for the Year
Operating expenses for the year were reduced by 16% to $6.1
million (2011: $7.2 million). The expenses for the year include
non-cash stock compensation to employees and non-employees of $0.7
million (2011: $0.7 million), and depreciation and amortization of
$0.1 million (2011: $0.2million). The decrease in overall operating
expenses for 2012 was driven primarily by the decrease in
subcontracted services and relocation expenses. Net loss for the
year before and after tax was $2.9 million (2011: $2.7
million).
Balance Sheet
Current assets show an increase to $1.8 million (2011: $1.2
million). Cash and cash equivalents increased to $1.5 million
(2011: $0.9 million) primarily resulting from the AMVAC upfront
licensing fee and the fund raise from early in the year, offset by
the increased net cash used in operating activities and the
investment in Envance Technologies, LLC. Trade and other
receivables increased to $0.1 million (2011: $11,816) primarily
from the shared services revenue from the new joint enterprise
(Envance Technologies, LLC). Inventories reduced significantly to
$17,126 (2011: $0.2 million) largely from a write off of obsolete
inventory from the insecticide business which was transferred to
Envance at the end of November, 2012. Prepaid expenses remained
stable at $81,202 (2011: $72,043).
Non-current assets increased by $0.3 million to $0.7 million
(2011; $0.4 million) largely from the Company's equity investment
in Envance Technologies, LLC.
Total liabilities decreased to $3.0 million (2011: $3.8 million)
from the combined effect of reducing current payables, recognizing
deferred revenue during the year, and the extension of the term of
revenue recognition of the Kraft deferred revenue.
The Company's common stock issued increased to 108,176,305
shares including 1,084,413 shares of Treasury Stock. These issued
shares increased as the combined result of a fundraise earlier in
2012 and the issuance of common shares in lieu of an executive's
cash payroll and funding several consulting contracts.
Additionally, after year end the Company issued 60,000,000 new
common shares of $0.001 each for a gross cash consideration of
GBP3.0 million (approximately $4.5 million) representing GBP2.9
million (approximately $4.3 million) net of cash expenses. The
Company issued an additional 600,000 common shares at the time of
this fund raise in payment of fees related to the fundraise. The
Company's shareholders' deficit at year end was improved at $0.6
million (2011; $2.2 million) before consideration of
non-controlling interests.
Liquidity and Cash Flow
Net cash used in operations increased in 2012 to $2.8 million
compared to $2.3 million for 2011, a $0.5 million increase. This
increased use of operations cash was primarily the result of
decreased cash from product sales, largely offset by increases in
upfront license payments receipts and decreased operating expenses.
Also contributing to the increased use of operations cash was our
increase in accounts receivable, partially offset by the decrease
in our accounts payable and accrued expenses. Cash flow used in
investing activities for 2012 was $0.4 million compared to $0.1
million for 2011. This increase resulted from the minority
investment in the Envance Technologies, LLC joint venture with
AMVAC.
Cash flow from financing activities in 2012 was $3.8 million,
compared to zero in 2011 as a result of the $3.9 million raised in
equity financing.
Cash and cash equivalents were $1.5 million at the end of 2012
(2011: $0.9 million). We invest our cash resources in deposits with
banks with the highest credit ratings, putting security before
absolute levels of return.
Subsequent to 31 December 2012, we raised approximately an
additional $4.3 million, net of expenses, through the issuance of
60,000,000 common shares to fund our operations while we continue
negotiations with our existing and new partners.
Currency Effects
The Company has no significant overseas cur-rency exposures and
does not use financial derivatives to manage currency risk.
R. Daniel Williams
Chief Financial Officer
27 June 2013
Consolidated Balance Sheets
31 December 2012 and 2011
2012 2011
----------------------------------- ------------------------------------ --- ------------- -------------
Assets
Current assets
Cash and cash equivalents $1,548,830 $905,115
Accounts receivable 109,867 11,816
Inventory, net of allowance
of $153,783 in 2012 and $30,824
in 2011 17,126 167,897
Prepaid expenses 81,202 72,043
-------------------------------------- --------------------------------------- ------------- -------------
Total current assets 1,757,025 1,156,871
Property and equipment, net of accumulated
depreciation, ($1.3M 2012, $1.2M 257,517 380,385
2011)
Investment in unconsolidated subsidiary 358,925 -
Long term deposits 65,000 65,000
--------------------------------------------------------------------------- --- ------------- -------------
Total assets $2,438,467 $1,602,256
------------------------------------- --------------------------------------- ------------- -------------
Liabilities and Shareholders' (Deficit)
Equity
Current liabilities
Accounts payable $139,554 $299,327
Accrued liabilities 503,667 448,752
Deferred revenue 501,070 668,717
-------------------------------------- --------------------------------------- ------------- -------------
Total current liabilities 1,144,291 1,416,796
Other long-term liabilities 1,882,548 2,341,706
--- ------------- -------------
Total liabilities 3,026,839 3,758,502
------------------------------------- --------------------------------------- ------------- -------------
Shareholders' deficit
Common stock, $0.001 par, authorised
200 million;
107.1 million shares issued
(2011:51.8 million shares
issued) 107,090 51,856
Additional paid-in capital 74,341,822 69,785,077
Retained deficit (74,923,475) (71,987,811)
Treasury stock of 1.1 million (108,441) -
(2011: 0)
----------------------------------- -------------------------------------- --- ------------- -------------
Total shareholders' deficit (583,004) (2,150,878)
------------------------------------- --------------------------------------- ------------- -------------
Non-controlling interest (5,368) (5,368)
------------------------------------- --------------------------------------- ------------- -------------
Total TyraTech, Inc. shareholders'
deficit (588,372) (2,156,246)
------------------------------------- --------------------------------------- ------------- -------------
Total liabilities and
shareholders' deficit $2,438,467 $1,602,256
------------------------------------- --------------------------------------- ------------- -------------
Consolidated Statements of Operations
Years ended 31 December 2012 and 2011
2012 2011
---------------------------------------------------------- --- -------------------- -----------------
Revenues:
Product sales $322,890 $4,406,531
Collaborative revenue 3,249,769 2,748,635
--------------- ----------------------------------------- --- -------------------- -----------------
Total revenues 3,572,659 7,155,166
Costs and expenses related to product
sales and collaboration revenue:
-------------------- -----------------
Product costs 238,440 1,810,176
Collaborative costs and expenses 222,964 686,091
-------------------- ---------------------
Total costs and expenses 461,404 2,496,267
Gross profit 3,111,255 4,658,899
Costs and expenses:
General and administrative 3,008,322 3,470,414
Business development 638,826 987,217
Research and technical development 2,363,770 2,779,892
Net loss (from unconsolidated
subsidiary) 41,075 -
--------------- ---------------------------------------------- ---------------- -----------------
Total cost and expenses 6,051,993 7,237,523
--------------- -------------- ------------------------------ ---------------- -----------------
Loss from operations (2,940,738) (2,578,624)
--------------- -------------- ------------------------------ ---------------- -----------------
Other income (expense):
Interest income 16 29
Other income 5,058 (13,388)
Loss on disposal of fixed
assets - (129,517)
Total other income 5,074 (142,876)
--------------- -------------- ------------------------------ ---------------- -----------------
Loss from operations
before income taxes (2,935,664) (2,721,500)
Income tax expense - -
--------------------------------------------------------------- ---------------- -----------------
Net loss $(2,935,664) $(2,721,500)
--------------- -------------- ------------------------------ ---------------- -----------------
Consolidated net loss $(2,935,664) $(2,721,500)
Net (loss)income attributable to non-controlling
interest - 841
--------------------------------------------------------------- -----------------
Net loss attributable to TyraTech,
Inc. $(2,935,664) $(2,720,659)
---------------------------------------------------------------
Net loss per common share
Basic and diluted $(0.03) $(0.05)
--------------- ---------------------------------------------- ------- ----------- -----------------
Net loss per common share attributable
to TyraTech, Inc. $(0.03) $(0.05)
--------------------------------------------------------------- ------- ----------- -----------------
Weighted average number of common shares
Basic and diluted 97,258,479 51,843,801
--------------- ---------------------------------------------- ------- ----------- -----------------
Consolidated Statements of Shareholders' (Deficit) Equity
Years ended 31 December 2012 and 2011
Additional
Common Paid-in Accumulated Non-Controlling Treasury Total (Deficit)
Stock Capital Deficit Interest Stock Equity
------------------------ -------- ------------ -------------- ---------------- --------- ----------------
Balances as of
31 December 2010 $51,837 $69,059,576 $(69,267,152) $(5,374) $(177) $(161,290)
-------- ------------ -------------- ---------------- --------- ----------------
Issuance
of common
stock for
SARs exercise 19 - - - - 19
Contribution
from non-controlling
interest - - - 847 - 847
Stock based
compensation - 716,848 - - - 716,848
Sale of treasury
stock - 8,653 - - 177 8,830
Consolidated
net loss - - (2,720,659) (841) - (2,721,500)
----------------------- -------- ------------ -------------- ---------------- --------- ----------------
Balances as of
31 December 2011 $51,856 $69,785,077 $(71,987,811) $(5,368) $0 $(2,156,246)
------------------------ -------- ------------ -------------- ---------------- --------- ----------------
Proceeds from
issuance of
common stock
net of expenses 52,102 3,894,055 - - - 3,946,157
Stock based
compensation-SARS - 373,378 - - - 373,378
Stock based compensation-
stock grants 3,132 289,312 - - - 292,444
Net loss - - (2,935,664) - - (2,935,664)
Purchase of
treasury stock - - - - (108,441) (108,441)
--------------------------- --------- ------------ -------------- --------- ----------- ------------
Balances as of
31 December 2012 $107,090 $74,341,822 $(74,923,475) $(5,368) $(108,441) $(588,372)
--------------------------- --------- ------------ -------------- --------- ----------- ------------
Consolidated Statements of Cash Flows
Years ended 31 December 2012 and 2011
------------------------------------------------------------- -------------- -------------
2012 2011
----- ---- ------------------------------------------------ -------------- -------------
Cash flows from operating activities:
Net loss $(2,935,664) $(2,721,500)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortisation 134,802 246,934
Write-off of inventory 122,914 -
Net loss from unconsolidated subsidiary 41,075 -
Amortisation of stock awards 662,690 716,848
Loss on disposal of assets - 130,717
Changes in operating assets and liabilities:
Accounts receivable (98,051) 779,607
Inventory 27,858 173,517
Prepaid expenses (9,159) 32,485
Accounts payable and accrued liabilities (104,859) (564,991)
Other liabilities - (1,193)
Deposits - (65,000)
Deferred revenue and other long-term
liabilities (626,805) (1,044,544)
Net cash provided from discontinued
operations - 597
------------------------------------------------ --------- -------------- -------------
Net cash used in operating activities (2,785,199) (2,316,523)
------------------------------------------------- --------- -------------- -------------
Cash flows from investing activities:
Purchase of property and equipment (11,934) (131,639)
Investment in non-controlled joint (400,000) -
venture
-------------- -------------
Net cash used in investing activities (411,934) (131,639)
------------------------------------------------- --------- -------------- -------------
Cash flows from financing activities:
Treasury stock purchased from employee (108,441) -
Contribution from non-controlling
interest - 847
Net proceeds from sale of treasury
stock - 8,830
Net proceeds from sale of common
stock 3,946,157 19
Net proceeds from stock grants issued
for services 3,132 -
Net cash provided by financing activities 3,840,848 9,696
------------------------------------------------- --------- -------------- -------------
Net increase (decrease) in cash 643,715 (2,438,466)
Cash and cash equivalents, beginning of
year 905,115 3,343,581
-------------------------------------------------------- --- -------------- -------------
Cash and cash equivalents, end of year $1,548,830 $905,115
Notes
1. Basis of preparation
TyraTech, Inc. (the "Company" or "TyraTech"), a Delaware
corporation, 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 safer natural
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 2012 and 2011 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 2012 was
approved by the Board for release on 27 June 2012.
2. Liquidity and capital resources
As of 31 December 2012, the Company had $1,548,830 (2011:
$905,115) in cash and cash equivalents and had no indebtedness.
The Company has had significant negative cash flows from
operating activities since inception. The Company has produced
monthly forecasts to the end of 2015. Based upon cash expected to
be received through existing contracts, new contracts to be closed,
and the ability to control costs as a result of the Company's cost
minimisation program, with existing cash on hand and cash received
from a share placing in April 2013, the Company's Directors believe
that the Company will have sufficient cash to meet its working
capital needs through the next twelve months. For this reason the
Company continues to apply the going concern basis of
accounting.
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 today following which
copies will be available either from the registered office of the
Company: The Corporation Trust Company, 1209 Orange Street,
Wilmington, Delaware 19801, USA; or from the Company's website;
www.tyratech.com.
4. Date of Annual 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 25 July
2013 at 10:00AM EDT.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DMGZVRVVGFZM
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