TIDMTYR TIDMTYRU
RNS Number : 5739K
TyraTech, Inc.
26 June 2014
26 June 2014
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 announces its final results for the year ended 31 December
2013.
Operational Highlights
-- Completed registration of the Vamousse(R) treatment mousse
and preventative shampoo in USA and Europe
-- Worldwide distribution agreement with Novartis Animal Health
leading to launch of six new animal health products in USA under
Natunex(TM) brand for insect and parasite control in production
animal premises
-- Scale up of manufacturing and logistic capabilities to handle
demand of large retailers in USA and Europe
-- Established external sales force, marketing, and public
relations partnerships to expand retail distribution and strengthen
commercialisation strategy
Financial Highlights
-- Total revenue decreased to $1.4 million (2012: $3.6 million),
due primarily to the absence of one time 2012 collaborative revenue
fee in 2013 and transfer of insect control products that generated
$1.0 million in product revenue to Envance Technologies in 2013
-- Gross profit decreased to $0.6 million (2012: $3.1 million)
due primarily to the absence of one time 2012 collaborative license
fee in 2013
-- Operating expenses reduced by 17% to $5.0 million (2012: $6.0 million)
-- Net loss increased to $4.9 million (2012: $2.9 million)
-- Cash and cash equivalents decreased to $0.9 million at year end (2012: $1.5 million)
Post Period Highlights
-- Vamousse treatment product available in more than 4,000
Walmart stores nationwide from early 2014.Product sales are
increasing ahead of main head lice season when schools return after
summer vacation
-- Vamousse treatment mousse and preventative shampoo now
available in the USA on Amazon.com, Drugstore.com and
Walmart.com
-- Launch of the Natunex range of products by Novartis Animal
Health, with highly positive feedback from livestock producers
-- Launch of Guardian(TM) range of mosquito and tick repellents
scheduled for July, predominantly online, at beginning of season.
Currently preparing for review process by major retailers for full
launch in 2015
-- Currently preparing for UK launch of Vamousse
-- Jonathan Hill appointed as UK Country Manager. His role will
be to prepare for the launch of Vamousse in the UK and to expand
TyraTech's European operations
-- Retained services of Ceuta Healthcare ("Ceuta"), the UK's
leading provider of sales and marketing services to health and
beauty brand owners, as partner. Ceuta will be responsible for the
marketing, commercialisation and logistics of launching the
Vamousse products in the UK, with possible extension into other
European countries
-- Successfully raised approximately $2.8 million, net of
expenses, through a share placement and subscription
Bruno Jactel, CEO of TyraTech, commented: "We expect to have
launched ten new products by the end of 2014, which we believe will
show substantial increases in product revenues over the previous
two years. We are working hard to further expand distribution
channels, both in the USA and Europe. Most notably, by securing
distribution of our Vamousse head lice products at Walmart and
entering in the global product distribution agreement with Novartis
for the Natunex range of animal health products, the Board believes
that TyraTech will be able to achieve significant market
penetration of its products.
In addition, it has recently become apparent that, due in part
to the success and interest generated in the USA, we will have
excellent opportunities in other markets in a much shorter
timeframe than we had previously envisaged. In order to prepare for
the UK launch of Vamousse, and to expand TyraTech's operations in
Europe, the Company is pleased to announce the appointment of
Jonathan Hill as UK Country Manager, a senior executive with
extensive operational experience in animal health and OTC products.
Jonathan was most recently the Head of Marketing and Technical,
Europe, for Merial, the animal health division of Sanofi. Jonathan
will be responsible for product establishment in the UK and later
into other European countries and will operate from the recently
established UK branch.However, in the short term, forecasting both
the timing and quantum of revenues and profits accurately remains
particularly challenging as seemingly minor delays in "on-boarding"
timings and processes can have significant impact on these early
market forecasts. Similarly, given the relative immaturity of
TyraTech's product range, any delays in product reaching stores can
also significantly impact near term revenue forecasts.
The Board anticipates that, as its products become more
established and known amongst consumers, demand will become easier
to predict. The medium term outlook for the Company is extremely
strong as our IP 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 26 June 2014 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
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 7087 4550
Walbrook, Financial PR and IR
Bob Huxford / Guy McDougall
Tel + 44 7933 8792
Chairman's Comments
During 2013, TyraTech achieved significant milestones which the
Directors believe will lead to a positive commercial future for the
Company. In particular, by securing distribution of our Vamousse
head lice products at Walmart and entering in the global product
distribution agreement with Novartis for the Natunex range of
animal health products, the Board believes that TyraTech will be
able to achieve significant penetration of its products.
The agreement with Novartis was reached August 2013, with the
first products launched in April 2014 under the Natunex brand. We
are excited about the potential of this partnership, as the
products fulfil an increasingly important unmet need in a market
which is growing in economic significance.
The distribution of Vamousse head lice treatment at Walmart was
confirmed in December 2013 and product was stocked in almost all
Walmart stores across the USA in the first quarter of 2014. Walmart
was the first retailer to enter the market with Vamousse. This was
a particularly significant milestone as it is unusual for major
retailers to be the first to commercialise new brands, and also
unusual for new brands to receive placement in such a large
percentage of a retailer's stores in the first year. Early
indications of sales are promising.
The Directors are particularly happy with the progress the
Company has made in embracing and developing new competencies in
both retail commercialisation and supply chain logistics. With the
addition of innovative marketing skills in 2014, the Board believes
that TyraTech will complete a circle of competencies that will
complement its world class products and partnerships.
TyraTech's headlines have been mostly related to commercial
breakthroughs, but I would certainly like our shareholders to
understand that our R&D teams have been successfully enriching
our patent portfolio and developing new products. For example, the
head lice preventative shampoo is a product that we believe is
unique in the USA and many other markets.
Outlook
The Board expects that 2014 will show substantial increases in
product sales over the previous two years and we are working hard
to further expand distribution channels, both in the USA and
Europe. Indeed, it has recently become apparent that, due in part
to the success and interest generated in the USA, we may have
excellent opportunities in other markets in a much shorter
timeframe than we had previously envisaged. To take full advantage
of these opportunities may require some additional working capital,
a position that we will keep under review in the coming months. In
addition, we also know that we cannot stand still in terms of
product development and must continue to bring innovative new
solutions to market, while also continually improving upon existing
products.
Over the past year TyraTech, as an organisation, has learned a
tremendous amount; not just about the development of what we
consider are world-class products, but also about what is required
to take them to market. With hard work and the continued support of
our employees and shareholders, we can deliver the value which we
firmly believe is present in our Company.
Alan Reade
Non-Executive Chairman
June 26, 2014
Chief Executive Officer's Report and Operational Review
TyraTech's mission is to bring to the marketplace a range of
safe and efficacious products which can reduce the impact of
insects, insect-transmitted diseases and parasite infestations on
children, families, animals and agriculture.
During the course of the last couple of years TyraTech has
transitioned from a technology and R&D oriented company to an
organisation capable of commercialising innovative branded
products. In 2013, TyraTech focused on preparing to launch 10 new
products in the first part of 2014.
First, the Vamousse range of products, comprising a mousse
treatment and a preventative shampoo, was launched in the USA
market in April. The mousse treatment is available in Walmart
stores and superstores in the USA as well as online with Amazon.com
and Drugstore.com. These major online retailers are also carrying
the Vamousse preventative shampoo.
Second, the Company's Guardian(TM) brand range of personal
mosquito and tick repellents will launch during the summer season
of 2014 in the USA, first online and second with an objective to be
present in selected stores specialising in outdoor activities. The
main goal is to be ready to present these products during the
annual category reviews conducted by the major retailers in the
second half of 2014, for the 2015 mosquito and tick season.
Third, TyraTech signed a global product distribution agreement
with Novartis Animal Health to market and sell TyraTech's insect
control products in the production animal premises. Under the brand
Natunex, six products were launched in the USA in the first part of
2014, and will be followed by a roll-out in selected European
countries.
Envance Technologies, LLC ("Envance"), the business enterprise
that TyraTech formed in 2012 with AMVAC Chemical Corporation
("AMVAC"), continues to expand its commercialisation of non-toxic
consumer pesticide products with major USA retailers.
In addition, TyraTech prepared its future growth platform by
strengthening its patent portfolio in mid-2014 with 21 granted
patents and 50 pending patent applications and its product
portfolio now includes more than 10 products at various stages of
development.
During 2013, the Company's total revenue decreased to $1.4
million, largely due to the receipt in the prior year of a
substantial one-off payment on the establishment of Envance, and
also the switching of the pesticide products previously sold
through TyraTech to that organisation. However, during the same
timeframe, the Company reduced operating expenses by 17% to $5.0
million. In early 2014, the Company raised approximately $2.8
million in new equity (net, after expenses). As TyraTech moves into
the second half of 2014 and beyond, the Directors believe that the
Company will reach sales that are commensurate with the quality of
the products, the breadth of its distribution network, and will
begin to reap the benefit of the time and resources invested in
bringing a new brand to the market.
Bruno Jactel
Chief Executive Officer
June 26, 2014
Financial Review
Revenues
TyraTech continues to develop its products and is working to
diversify revenue sources as the Company matures as a business.
Overall revenues for the year were $1.4 million (2012: $3.6
million). Collaborative revenue decreased to $1.4 million (2012:
$3.3 million), primarily due to a single 2012 upfront license
exclusivity fee which was part of the joint enterprise transaction
establishing Envance Technologies, LLC ("Envance"), along with
changes in the Product Supply Agreement with Terminix and the
agreement with Mondelez Global in 2012. There were no product
revenues shown in the accounts of TyraTech in 2013 (2012: $0.3
million) as the insect control products were transferred to
Envance. As indicated above, Envance expanded retail sales of these
products to $1.0 million in 2013. TyraTech does not consolidate the
revenue, cost of goods sold, or operating expenses of Envance as
the results are recorded using the equity method of accounting as a
non-controlled subsidiary. For 2014 and beyond, TyraTech revenues
are expected to come from the new personal care range and sales of
pest control products in the animal health sector via Novartis.
Cost of Sales and Gross Margin
Cost of sales for the year was $0.7 million (2012: $0.5
million). This included cost of product sold of $0, (2012: $0.2
million) and project costs for collaborative revenue projects of
$0.7 million (2012: $0.2 million). Gross profits totaled $0.6
million (2012: $3.1 million) and were all attributable to
collaborative revenue.
Operating Expenses and Loss for the Year
Operating expenses for the year were reduced by 17% to $5.0
million (2012: $6.0 million). The expenses for the year include
non-cash stock compensation to employees and non-employees of $0.2
million (2012: $0.7 million), and depreciation and amortisation of
$0.1 million (2012: $0.1 million). The decrease in overall
operating expenses for 2013 was driven primarily by offsets to
expenses from charging Envance and Mondelez Global for shared
services, along with reductions in payroll expenses and stock
compensation expenses. Net loss for the year before and after tax
was $4.9 million (2012: $2.9 million) resulting primarily from the
absence of the AMVAC upfront license fee in 2013 as compared to
2012.
Balance Sheet
Current assets show a decrease to $1.2 million (2012: $1.8
million). Cash and cash equivalents decreased to $0.9 million
(2012: $1.5 million). Trade and other receivables were equivalent
to 2012 at $0.1 million (2012: $0.1 million). Inventories increased
to $62,813 (2012: $17,126). Prepaid expenses increased to $149,972
(2012: $81,202).
Non-current assets decreased by $0.5 million to $0.2 million
(2012: $0.7 million) largely from the Company's decrease in the
equity investment in Envance due to losses incurred in the start-up
phase and reductions in fixed assets from depreciation.
Total liabilities decreased to $2.8 million (2012: $3.0 million)
primarily from the effect of recognising deferred revenue during
the year, partially offset by the increase in warrant liabilities
from the amendment in the AMVAC stock warrant agreement.
The Company's common stock issued increased to 168,776,305
shares as of 31 December 2013, including 1,084,413 shares of
Treasury Stock issued in 2012. These issued shares increased as the
combined result of a fund raise earlier in 2013. The Company issued
an additional 1,152,700 common stock warrants at the time of this
fund raise in payment of fees related to the fund raise. The
Company's shareholders' deficit at year end increased to $1.4
million (2012: $0.6 million) before consideration of
non-controlling interests.
Liquidity and Cash Flow
Net cash used in operations was $4.6 million in 2013 compared to
$2.8 million for 2012, a $1.8 million increase. This increase was
primarily the result of decreased cash receipts when compared
against the 2012 upfront AMVAC license fee and product sales (2012:
$2.5 million), partially offset by decreases in working capital
employed.
Cash flow used in investing activities was significantly reduced
to $17,601 (2012: $0.4 million) primarily due to the Company's $0.4
million investment in Envance in 2012, with no additional
investment made in Envance in 2013.
Cash flow from financing activities in 2013 was $4.0 million,
compared to $3.8 million in 2012 as a result of the $4.0 million
versus the $3.9 million raised in equity financing in respective
years and the effect of the treasury stock purchase ($0.1 million)
in 2012.
Cash and cash equivalents were $0.9 million at the end of 2013
(2012: $1.5 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 2013, the Company raised approximately
an additional $2.8 million in capital, net of expenses, ($3.1
million gross) through the issuance of 37,391,763 common shares to
fund our operations while we continue negotiations with our
existing and new customers. The Company has prepared forecasts to
the end of 2016 which assume additional expenditures to expand the
Company's operations into the UK beginning in 2014 to take
advantage of new opportunities which have arisen recently and which
will require additional funding in the second half of 2014. The
Company has also prepared forecasts with no new funding, and
therefore delaying the planned 2014 expansion into the UK to 2015.
As with the introduction of any new products, there is always
uncertainty as to the rate and level of market penetration. The
Company believes its forecasts are reasonable, but if it does not
perform in line with the key assumptions of both of these
forecasts, the Company's cash resources may be absorbed earlier
than forecasted. In this case, further cost reduction initiatives
may be implemented and additional capital may be required.
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
June 26, 2014
Consolidated Balance Sheets
31 December 2013 and 2012
2013 2012
--------- ----------- -------------------------- ---- --------------------------------------- --- -----------------------------------
Assets
Current assets
Cash and cash equivalents $873,413 $1,548,830
Accounts receivable 85,270 109,867
Inventory, net of allowance
of $0 in 2013 and $153,783
in 2012 62,813 17,126
Prepaid expenses 149,972 81,202
---------------------------------------- -------------- --------------------------------------- --- -----------------------------------
Total current assets 1,171,468 1,757,025
Property and equipment,
net of accumulated depreciation,
($1.4 million 2013, $1.3
million 2012)
Investment in unconsolidated
subsidiary 166,690 257,517
Long term deposits - 358,925
65,808 65,000
--------------------------------------------------- ---- --------------------------------------- --- -----------------------------------
Total assets $1,403,966 $2,438,467
--------------------------- -------------------------- --------------------------------------- --- -----------------------------------
Liabilities and Shareholders'
(Deficit) Equity
Current liabilities
Accounts payable $249,464 $139,554
Accrued liabilities 412,138 503,667
Liability for warrants 210,000 -
Deferred revenue 501,070 501,070
---------------------------------------- -------------- --------------------------------------- --- -----------------------------------
Total current liabilities 1,372,672 1,144,291
Deferred revenue and other
long-term liabilities 1,381,477 1,882,548
---- --------------------------------------- --- -----------------------------------
Total liabilities 2,754,149 3,026,839
--------------------------- -------------------------- --------------------------------------- --- -----------------------------------
Commitments and contingencies
Shareholders' deficit
Common stock, $0.001
par, authorised 300 million;
168.8 million shares
issued , 167.7 million
shares outstanding (2012:108.2
million shares issued,
107.1 million shares
outstanding) 167,690 107,090
Additional paid-in capital 78,421,113 74,341,822
Accumulated deficit (79,825,177) (74,923,475)
Treasury stock of 1.1
million (2012: 1.1million) (108,441) (108,441)
---------------------------------------- -------------- --------------------------------------- --- -----------------------------------
Total shareholders'
deficit (1,344,815) (583,004)
--------------------------- -------------------------- --------------------------------------- --- -----------------------------------
Non-controlling interest (5,368) (5,368)
Total shareholders'
deficit (1,350,183) (588,372)
--------------------------- -------------------------- --------------------------------------- --- -----------------------------------
Total liabilities
and shareholders'
deficit $1,403,966 $2,438,467
--------------------------- -------------------------- --------------------------------------- --- -----------------------------------
Consolidated Statements of Operations
Years ended 31 December 2013 and 2012
2013 2012
----------------------------------------------------- ---- ------------------------ --- ----------------------
Revenues:
Product sales $ - $322,890
Collaborative revenue 1,366,068 3,249,769
------------------------------------------- ------------- ------------------------ --- ----------------------
Total revenues 1,366,068 3,572,659
Costs and expenses related to
product sales and collaboration
revenue:
Product costs
Collaborative costs and expenses - 238,440
732,997 222,964
----------------------------------------------------------- ------------------------ --- ----------------------
Total costs of goods sold 732,997 461,404
Gross profit 633,071 3,111,255
Costs and expenses:
General and administrative 2,797,508 3,008,322
Business development 430,181 638,826
Research and technical
development 1,753,955 2,363,770
------------------------------------------- ------------- ------------------------ --- ----------------------
Total cost and
expenses 4,981,644 6,010,918
----------------------------------------------- ------- ------------------------ --- ----------------------
Loss from operations (4,348,573) (2,899,663)
----------------------------------------------- ------- ------------------------ --- ----------------------
Other income (expense):
Interest income 842 16
Other income 14,954 5,058
Net loss (from unconsolidated
subsidiary) (358,925) (41,075)
Change in fair value
of warrant liabilities (210,000) -
Total other income
(expense) (553,129) (36,001)
----------------------------------------------- ------- ------------------------ --- ----------------------
Loss from operations
before income taxes (4,901,702) (2,935,664)
Income tax expense - -
---- ------------------------ --- ----------------------
Net loss $(4,901,702) $(2,935,664)
----------------------------------------------- ------- ------------------------ --- ----------------------
Net loss per common share
Basic and diluted $(0.03) $(0.03)
------------------------------------------- ------------- ------------------------ --- ----------------------
Weighted average number of
common shares
Basic and diluted 152,417,371 97,258,479
------------------------------------------- ------------- ------------------------ --- ----------------------
Consolidated Statements of Shareholders' (Deficit) Equity
Years ended 31 December 2013 and 2012
Click on, or paste the following link into your web browser, to
view the associated PDF document of the
Consolidated Statements of Shareholders' (Deficit) Equity
table.
http://www.rns-pdf.londonstockexchange.com/rns/5739K_1-2014-6-25.pdf
Consolidated Statements of Cash Flows
Years ended 31 December 2013 and 2012
2013 2012
--- --- ------------------------------------ ------ ----------- ------------
Cash flows from operating activities:
Net loss $(4,901,702) $(2,935,664)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortisation 108,428 134,802
Write-off of inventory - 122,914
Net loss from unconsolidated
subsidiary 358,925 41,075
Amortisation of stock based
compensation 161,484 662,690
Change in fair value of 210,000 -
warrants
Changes in operating assets and
liabilities:
Accounts receivable 24,597 (98,051)
Inventory (45,687) 27,858
Prepaid expenses and long-term
deposits (69,578) (9,159)
Accounts payable and accrued
liabilities 18,381 (104,859)
Deferred revenue and other
long-term liabilities (501,071) (626,805)
----------------------------------------
Net cash used in operating
activities (4,636,223) (2,785,199)
------------------------------------- --------------- -------------
Cash flows from investing activities:
Purchase of property and equipment (17,601) (11,934)
Investment in unconsolidated
subsidiary - (400,000)
Net cash used in investing
activities (17,601) (411,934)
------------------------------------- ------------------- -------------
Cash flows from financing activities:
Treasury stock purchased from
employee - (108,441)
Net proceeds from sale of common
stock 3,978,407 3,946,157
Net proceeds from stock grants
issued for services - 3,132
Net cash provided by financing
activities 3,978,407 3,840,848
------------------------------------- --------------- -------------
Net (decrease) increase in cash (675,417) 643,715
Cash and cash equivalents, beginning
of year 1,548,830 905,115
------------------------------------------ --------------- -------------
Cash and cash equivalents, end of
year $873,413 $1,548,830
------------------------------------------ --------------- -------------
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 2013 and 2012 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 2013 was
approved by the Board for release on 26 June 2014.
2. Liquidity and capital resources
The accompanying consolidated financial statements contemplate
continuation of the Company as a going concern. The company has
incurred losses from inception ($4,901,702 in 2013, $2,935,664 in
2012), its cash used in operations in 2013 totalled $4,636,223
(2012: $2,785,199), and has accumulated losses of $79,825,177. As
of 31 December 2013, the Company had $873,413 (2012: $1,548,830) in
cash and cash equivalents and no indebtedness.
The Company's operations have been funded through a combination
of common stock issuances, sales of the Company's products, and
proceeds from technology licensing agreements. The Company most
recently raised $2.8 million through a fund raise in February 2014.
Neither further investor funding nor debt funding has been received
to the date of this Annual Report. The Company has produced monthly
forecasts to the end of 2016, which reflect an intention to incur
significant sales/marketing investments to introduce products to
the UK in 2014, which will require the Company to obtain additional
funding in 2014 through the issuance of equity or debt. There can
be no assurances that additional debt or equity funding can be
obtained or that available capital would be on terms acceptable to
the Company.
The Company has produced alternative operational/financial
projections, deferring UK expansion, which could enable it to work
within its existing cash resources, if further funding was not
available on acceptable terms for the 2014 UK expansion. However,
the Company has no assurances that it will achieve its projected
revenues, profitability, or cash flows under either of these
forecasts and as a result the Company may need to initiate further
cost reduction programs and raise additional debt and/or equity
capital over the next twelve months.
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 26 June 2014
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 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 15 July
2014 at 10:00AM EDT.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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