TIDMTYR
RNS Number : 4767T
TyraTech, Inc.
29 September 2010
+------------------------------------+------------------------------------+
| For Immediate Release | 29 September 2010 |
+------------------------------------+------------------------------------+
Interim Results for the six months ended 30 June 2010
TyraTech Inc. AIM: (TYR), a leading independent eco-technology company
developing novel pesticides for human, animal and environmental health, today
announces its interim results for the six month period ended 30 June 2010.
Financial Highlights:
· A successful US$2.8 million (net) placing through the issue of 24,443,888
shares of common stock;
· Net revenues from continuing operations of US$2.7 million (2009: US$3.0
million), slightly down due to a partial order which was shipped after the half
year;
· Overall operating expenses from continued operations reduced 45% to
US$3.8 million (2009: US$6.9 million);
· Net loss before and after taxes including discontinued operations was
US$3.1 million for the first half of 2010, (2009: US$6.2 million net loss) and
· Cash and cash equivalents of US$1.5 million, US$ 3.3 million at 30 June
2009, and US$1.3 million at 31 December 2009.
Operational Highlights:
· Continued expansion of TyraTech's Strategic Business Relationship
Agreement with pest control market leader, Terminix, to expand coverage of
development and commercialization of co-branded products for the US commercial
and institutional market segments;
· First order of TyraTech Insecticide Dust was received from Terminix;
· More than 300,000 units of SafeShield shipped to Terminix by the end of
August, 2010 and Terminix is expanding the marketing and sales programs for this
product;
· Sustainable Solutions business discontinued during this period.
On Outlook, Alan Reade, Chairman said:
"Our target in the latter half of 2010 and into 2011 is to be cash positive and
to continue to improve our balance sheet in such a way as to take full advantage
of the growth opportunities our new products will provide. Our strategic focus
will remain firmly in the area of functional foods and household and commercial
pest control."
For further information:
+------------------------------------+------------------------------------+
| TyraTech Inc. | |
+------------------------------------+------------------------------------+
| Alan Reade, Chief Executive | +1 (321) 409 7403 |
| Officer | |
+------------------------------------+------------------------------------+
| www.tyratech.com | |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Nomura Code Securities | |
+------------------------------------+------------------------------------+
| Richard Potts | |
+------------------------------------+------------------------------------+
| www.nomuracode.com | +44 (0)20 7776 1200 |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| Buchanan Communications | |
+------------------------------------+------------------------------------+
| Lisa Baderoon/Jessica Fontaine | +44 (0) 20 7466 5000 |
+------------------------------------+------------------------------------+
| www.buchanan.uk.com | |
+------------------------------------+------------------------------------+
Executive Chairman's Statement
We entered 2010 under very difficult circumstances and our priority has been to
ensure that we create a stable and sustainable business going forward. We
identified three main priorities:
1. increase the focus on cost control and ensure that every dollar of spend
contributed to the immediate objectives and priorities of the business;
2. ensure a company wide focus on continued support of our partnerships with a
particular emphasis on those with Kraft (functional food) and Terminix (domestic
and commerical pest control);
3. strengthen our balance sheet, particularly the cash position.
I want to first say how proud I am of the TyraTech team as they have
demonstrated a clear understanding of the challenges we faced at the beginning
of the year and have worked tirelessly to ensure that all our challenges were
met. This is evident from the massive reduction in operating cash expense from
$5.5 million in the first half of 2009, down to $3.1 million in the half year to
30 June 2010.
Our two key projects with Kraft and Terminix have progressed very well. Both
are well on track and moving on the timelines we set. The distribution of
SafeShield by Terminix continues to be successful and the indications and
forecasts we are receiving for 2011 are most encouraging. New product
development continues to be an area of success and we are very excited about the
new product opportunities being created.
As I mentioned in my comments on the 2009 results we now have a very solid
platform on which to build. However the challenge of expanding a new business in
a cash efficient/positive way remains difficult and requires our constant
attention. We were able to improve our balance sheet in May with a fully
subscribed share issue resulting in the addition of $2.8 million available
working capital. This, of itself, would not be sufficient to secure the
requirements of the Company without further growth and new agreements, but we
remain confident that, with current cash levels and expected future product
sales in additition to funding from prospective agreements, the Company can meet
its working capital needs for the remainder of this year and through 2011.
The claim by Molecular Securities for $2.8 million, as detailed in Note 9, is
still being contested in court, but we now expect that the court hearing is
unlikely to be before the second half of 2011, although the precise timeframe
remains uncertain. We continue to believe that the claim has no merit, but it
remains a significant contingency in the context of the Company's cash
resources.
Board Changes:
As reported earlier this year, Dr Geoffrey Vernon and Dr Ken Noonan resigned as
a non-executive Directors . In August we also reported that Keith Bigsby had
resigned as Chief Financial Officer and director. I would like to take this
opportunity of thanking all three of them for their contribution.
In July Jim Hills joined the Board as a non-executive Director, bringing
invaluable experience in consumer marketing and brand management.
Summary & Outlook:
Our target in the latter half of 2010 and into 2011 is to be cash positive and
to continue to improve our balance sheet in such a way as to take full advantage
of the growth opportunities our new products will provide. Our strategic focus
will remain firmly in the area of functional foods and household and commercial
pest control.
Alan Reade
Executive Chairman.
29 September 2010
Financial Review
Revenue
Revenue for the six month period from continuing operations was US$2.7 million
(2009: US$3.0 million). Invoices raised in the period ended June 30, 2010 were
slightly ahead of the corresponding period at US$2.4 million (2009 US$2.0
million), the difference in revenue being due to a lower release from deferred
revenue. Collaborative revenue totaled US$1.3 million (2009: US$1.3 million).
The lower product sales in the first half year of US$ 1.4 million (2009: US$ 1.7
million) is due to the final part of an order being shipped after the half-year
end.
Cost of sales and gross profit
The cost of material and manufacturing costs for product sales was US$0.9
million (2009: US$0.9 million) and costs for collaborative undertakings were
US$1.2 million (2009: US$0.9 million). Collaborative costs from the Kraft
Project are offset by US$1.3 million of collaborative revenue resulting in 13%
gross profit margin (2009: 30% gross margin). The overall gross profit for the
six month period ended June 30, 2010 was US$0.7 million (2009: US$1.2 million).
As above, the reduction was due to the final part of an order being shipped
after the half-year end, together with a lower margin on collaborative revenue.
Operating expenses
Overall operating expenses from continuing operations reduced by 45% for the six
month period to US$3.8 million (2009: US$6.9 million) as the Company continued
its cost containment efforts. The overall expense for the six months included
non-cash compensation relating to founder share grants and options of US$0.6
million (2009: US$1.7 million) and depreciation of US$0.1 million (2009: US$0.3
million). The reduction in stock compensation during the first half of 2010
resulted primarily from staff reductions, which included senior and executive
personnel with large stock or option grants. The overall gross cash spent on
operating expenses was reduced to US$3.1 million (2009 US$5.5 million) for the
six month period. This was driven by a decrease in salary expenses (US$1.2
million), the average headcount of full time equivalents for the first six
months of 2010 decreased to 18 (2009: 36), decreases in legal and other
subcontractor expenses (US$0.8 million), and decreases in travel and
entertainment expenses (US$0.2 million).
Detailed in the chart below are the changes in cash operating expenses for the
most recent three six month periods from 1 January 2009 through 30 June 2010.
The Company's focus in containing cash operating expenses is demonstrated in
these results, particularly during the most recent half year ended 30 June 2010.
+------------------------------+-+---------+-------------+------------+
| |
| Cash Operating Expenses |
| (including discontinued operations) |
+---------------------------------------------------------------------+
| | | Six | Six months | Six months |
| | | months | ended 31 | ended 30 |
| | | ended | December | June 2009 |
| | | 30 June | 2009 | |
| | | 2010 | | |
+------------------------------+-+---------+-------------+------------+
| General and administrative | $| 1.3m | $ | $ 1.4m |
| | | | 2.4m | |
+------------------------------+-+---------+-------------+------------+
| Business development | | 0.3m | 1.0m | 1.8m |
+------------------------------+-+---------+-------------+------------+
| Research and technical | | 1.5m | 1.5m | 2.3m |
| development | | | | |
+------------------------------+-+---------+-------------+------------+
| | $| 3.1m | $ | $ 5.5m |
| | | | 4.9m | |
+------------------------------+-+---------+-------------+------------+
Balance Sheet
Non-current assets decreased by US$0.3 million to US$0.7 million (2009 US$1.0
million) due to depreciation and the sale of surplus fixed assets. Cash and cash
equivalents were US$1.5 million at June 30, 2010 (2009: US$3.3 million). A
proportion of the $2.8 million net proceeds of the share issue was used in
reducing accounts payables from December 31, 2009 levels. Trade and other
receivables decreased to US$0.1 million (2009: US$0.7 million) and inventory
reduced to US$0.2 million (2009: US$0.9 million) as a result of the Company's
December 31, 2009 inventory write down, and much tighter management of
inventories generally. Assets related to discontinued operations were US$33,323
(2009: US$1.8 million) As a result, current assets decreased by US$5.0 million
to US$1.9 million (2009: US$6.9 million).
Total liabilities increased to US$2.2 million (2009: US$1.9 million). The
accounts payable and accrued liabilities increased slightly to US$1.9 million
(2009: US$1.5 million) while deferred revenue remained constant at US$0.2
million (2009: US$0.2 million). Liabilities related to discontinued operations
were US$0.2 million (2009: US$0.1 million)
Liquidity and Cash Flow
The net loss before and after tax for the period was US$3.1 million (2009:
US$6.2 million) including non-cash expenses such as amortization of employee
stock awards of US$0.6 million (2009 US$1.7 million), depreciation and
amortization of US$0.1 million (2009: US$0.3 million) and deferred revenue
recognized in the period of US$0.3 million (2009: US$1.0 million). Accounts
receivable and prepaid expenses decreased by US$0.6 million (2009: US$0.2
million increase). Inventory decreased by US $0.1 million (2009: US$0.4 million
increase) as a result of improved management of inventory levels, while payables
and accruals decreased by US$0.6 million (2009: US $0.0 million) due to reducing
accumulation of payables and accruals from December 31, 2009 from the cash
received from the common stock sale.
Cash invested in property, plant and equipment increased to US$21 thousand
(2009: US$16 thousand). This was largely for the minor upgrades of our
information technology infrastructure and laboratory facilities. The Company
also disposed of surplus lab equipment for US$25 thousand.
During the period 24,443,888 shares of common stock were issued, which received
proceeds of US$2.8 million net of cash expenses. An additional 749,112 shares
of common stock were issued in settlement of other expenses of US$99,781.
The Company invests its cash resources in deposits with banks with the highest
credit ratings, putting security before absolute levels of return.
D. Williams
Financial Controller and Company Secretary
29 September 2010
Consolidated Statements of Operations
in $'000 (except share information)
+------------------------------+-+-------------+-------------+-------------+
| | | (Unaudited) | (Unaudited) | Year ended |
| | | Six months | Six months | 31 December |
| | | ended | ended | 2009 |
| | | 30 June | 30 June | |
| | | 2010 | 2009 | |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Revenues: | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Product sales | | $1,398 | $1,743 | $2,591 |
+------------------------------+-+-------------+-------------+-------------+
| Collaborative revenue | | 1,318 | 1,304 | 3,740 |
+------------------------------+-+-------------+-------------+-------------+
| Gross revenue | | 2,716 | 3,047 | 6,331 |
+------------------------------+-+-------------+-------------+-------------+
| |
| Cost and expenses related to product sales |
| and collaborative revenue: |
+--------------------------------------------------------------------------+
| Product costs | | 856 | 946 | 1,895 |
+------------------------------+-+-------------+-------------+-------------+
| Collaborative costs and | | 1,151 | 907 | 2,561 |
| expenses | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Total costs and expenses | | 2,007 | 1,853 | 4,456 |
+------------------------------+-+-------------+-------------+-------------+
| Gross Profit | | 709 | 1,194 | 1,875 |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Costs and expenses: | | | | |
+------------------------------+-+-------------+-------------+-------------+
| General and administrative | | 1,750 | 2,960 | 6,536 |
+------------------------------+-+-------------+-------------+-------------+
| Business and development | | 371 | 1,378 | 2,042 |
+------------------------------+-+-------------+-------------+-------------+
| Research and technical | | 1,661 | 2,539 | 4,393 |
| development | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Total costs and expenses | | 3,782 | 6,877 | 12,971 |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Loss from operations | | (3,073) | (5,683) | (11,096) |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Other income (expense): | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Interest income | | - | 15 | 15 |
+------------------------------+-+-------------+-------------+-------------+
| Interest/other expense | | (9) | (2) | (3) |
+------------------------------+-+-------------+-------------+-------------+
| Change in fair value of | | - | (1) | 1 |
| warrant liabilities | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Currency loss | | - | (1) | - |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Loss from continuing | | (3,082) | (5,672) | (11,083) |
| operations before income | | | | |
| taxes | | | | |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Income tax expense | | - | - | - |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Loss from continuing | | (3,082) | (5,672) | (11,083) |
| operations | | | | |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Discontinued operations | | | | |
| (note 4): | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Loss from discontinued | | (47) | (559) | (2,798) |
| operations before income | | | | |
| taxes | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Income tax expense | | - | - | - |
+------------------------------+-+-------------+-------------+-------------+
| Loss from discontinued | | (47) | (559) | (2,798) |
| operations | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Net loss attributable to | | 5 | 17 | 28 |
| non-controlling interest | | | | |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Net loss attributable to | | (3,124) | (6,214) | (13,853) |
| TyraTech, Inc. including | | | | |
| discontinued operations | | | | |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Net loss per common share |
| from continuing operations |
+--------------------------------------------------------------------------+
| Basic and diluted | | (0.11) | (0.27) | (0.53) |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Net loss per common share | | | | |
| from discontinued | | | | |
| operations: | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Basic and diluted | | - | (.03) | (0.13) |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| Net loss per common share attributable |
| to TyraTech, Inc. |
+--------------------------------------------------------------------------+
| Basic and diluted | | (0.11) | (0.30) | (0.66) |
+------------------------------+-+-------------+-------------+-------------+
| Weighted average number of common shares: |
+--------------------------------------------------------------------------+
| Basic and diluted | | 27,091,966 | 20,893,633 | 21,068,343 |
+------------------------------+-+-------------+-------------+-------------+
| | | | | |
+------------------------------+-+-------------+-------------+-------------+
| The accompanying notes are an integral part of these consolidated |
| financial statements |
+------------------------------+-+-------------+-------------+-------------+
Consolidated Balance Sheets
in $'000 (except share information)
+------------------------------+----------+-------------+-------------+------------------------------+
| | | (Unaudited) | (Unaudited) | year ended |
| | | six months | six months | 31 December |
| | | ended | ended | 2009 |
| | | 30 June | 30 June | |
| | | 2010 | 2009 | |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Assets | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Current Assets: | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Cash and cash equivalents | | $1,475 | | $1,265 |
| | | | $3,316 | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Accounts receivable, net | | 83 | 730 | 528 |
+------------------------------+----------+-------------+-------------+------------------------------+
| Inventory | | 177 | 857 | 224 |
+------------------------------+----------+-------------+-------------+------------------------------+
| Prepaid expenses | | 143 | 268 | 215 |
+------------------------------+----------+-------------+-------------+------------------------------+
| Current assets from | | 33 | 1,761 | 464 |
| discontinued operations | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Total current assets | | 1,911 | 6,932 | 2,696 |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Property and equipment, net | | | | |
| of accumulated depreciation | | 700 | 1,017 | 834 |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Total assets | | $2,611 | $7,949 | $3,530 |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Liabilities andShareholders' | | | | |
| Equity | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Current liabilities: | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Accounts payable | | $786 | $526 | $971 |
+------------------------------+----------+-------------+-------------+------------------------------+
| Accrued liabilities | | 1,104 | 987 | 1,392 |
+------------------------------+----------+-------------+-------------+------------------------------+
| Current liabilities of | | 166 | 137 | 552 |
| discontinued operations | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Deferred revenue | | 154 | 175 | 476 |
+------------------------------+----------+-------------+-------------+------------------------------+
| Current installments of | | | | |
| obligation under capital | | 9 | 20 | 17 |
| leases | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Liability for warrants | | - | 1 | |
| | | | | - |
+------------------------------+----------+-------------+-------------+------------------------------+
| Total current liabilities | | 2,219 | 1,846 | 3,408 |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Other long-term liabilities | | 105 | 19 | 105 |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Total liabilities | | 2,324 | 1,865 | 3,513 |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Equity | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Common stock, at $0.001 par | | 47 | 22 | 22 |
| authorized and issued 47 | | | | |
| million for 6/30/10 and 22 | | | | |
| million for 6/30/09 and | | | | |
| 12/31/09 | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Additional paid in capital | | 66,550 | 61,598 | 63,177 |
+------------------------------+----------+-------------+-------------+------------------------------+
| Retained deficit | | (66,300) | (55,538) | (63,177) |
+------------------------------+----------+-------------+-------------+------------------------------+
| Treasury stock of 326,241 | | | | |
| common stock 6/30/10, | | (4) | (4) | (4) |
| 6/30/09 and 12/31/09 | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| TyraTech Inc. shareholders' | | 293 | 6,078 | 18 |
| equity | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| Non-controlling interest | | (6) | 6 | (1) |
+------------------------------+----------+-------------+-------------+------------------------------+
| Total shareholders' equity | | 287 | 6,084 | 17 |
+------------------------------+----------+-------------+-------------+------------------------------+
| Total liabilities & | | $2,611 | $7,949 | $3,530 |
| shareholders' equity | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+------------------------------+
| The accompanying notes are an integral part of these consolidated financial |
| statements |
+------------------------------+----------+-------------+-------------+------------------------------+
Consolidated Statements of Cash Flow
in '000
+------------------------------+----------+-------------+-------------+--------------+
| | | (Unaudited) | (Unaudited) | year ended |
| | | six months | six months | 31 December |
| | | ended | ended | 2009 |
| | | 30 June | 30 June | |
| | | 2010 | 2009 | |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Cash flows from operating | | | | |
| activities: | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Net loss | | $(3,129) | $(6,231) | $(13,881) |
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Adjustments to reconcile net | | | | |
| loss to net cash used in | | | | |
| operating activities: | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Depreciation and | | 121 | 253 | 453 |
| amortization | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Inventory valuation | | - | - | 1,922 |
| adjustment | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Provision for doubtful | | - | - | 91 |
| receivable | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Change in fair value of | | - | 1 | (1) |
| warrants | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Amortization of stock awards | | 572 | 1,723 | 3,303 |
+------------------------------+----------+-------------+-------------+--------------+
| Loss on disposal of assets | | 8 | - | - |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Changes in operating assets | | | | |
| and liabilities: | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Accounts receivable | | 490 | (348) | (106) |
+------------------------------+----------+-------------+-------------+--------------+
| Inventory | | 149 | (380) | (867) |
+------------------------------+----------+-------------+-------------+--------------+
| Prepaid expenses | | 72 | 164 | 582 |
+------------------------------+----------+-------------+-------------+--------------+
| Accounts payable and accrued | | (575) | 8 | 1,342 |
| liabiities | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Deferred revenue | | (322) | (1,024) | (722) |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Net cash used in operating | | (2,614) | (5,834) | (7,884) |
| activities | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Cash flows from investing | | | | |
| activities: | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Purchases of property and | | (21) | (16) | (34) |
| equipment | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Sale of property and | | 25 | - | - |
| equipment | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Net cash provided by (used | | 4 | (16) | (34) |
| in) investing activities | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Cash flows from financing | | | | |
| activities: | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Payments made under capital | | (6) | (10) | (20) |
| leases | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Net proceeds from sale of | | 2,826 | - | - |
| common stock | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Contribution from | | - | - | 27 |
| non-controlling interest | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Net cash provided by (used | | 2,820 | (10) | 7 |
| in) financing activities | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Net increase(decrease) in | | 210 | (5,860) | (7,911) |
| cash and cash equivalents | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Cash and cash equivalents | | 1,265 | 9,176 | 9,176 |
| beginning of the period | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Cash and cash equivalents | | $1,475 | $3,316 | $1,265 |
| end of the period | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Supplemental disclosures: | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Cash paid for interest | | $ - | $ 2 | $ 3 |
+------------------------------+----------+-------------+-------------+--------------+
| Cash paid for income taxes | | $ - | $ - | $ - |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Non-cash operating | | | | |
| activities | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| The Company exchanged inventory for settlement of |
| accounts payable and accrued liabilities of a |
| Sustainable Solutions, LLC Supplier: |
+------------------------------------------------------------------------------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Accounts payable and accrued | | $(283) | $ - | $ - |
| liabilities | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| Inventory | | $283 | $ - | $ - |
+------------------------------+----------+-------------+-------------+--------------+
| | | | | |
+------------------------------+----------+-------------+-------------+--------------+
| These accompanying notes are an integral part of these consolidated financial |
| statements |
+------------------------------+----------+-------------+-------------+--------------+
Notes to the Interim Consolidated Financial Statements
1. Basis of Preparation
The financial statements of TyraTech, Inc. and its subsidiaries (TyraTech
Sustainable Solutions, LLC; TyraChem, LLC; TyraTech India, Pvt. Ltd., TyraTech
International Ltd.; TyraTech International td.; TyraTech International LP;
TyraTech International BV; and TyraTech International Coop) referred to as the
"Company" have been prepared in accordance with accounting principles generally
accepted in the United States of America (US GAAP) and the attached financial
statements have been prepared on a consolidated basis.
The results for the year ended 31 December 2009 have been extracted from the
statutory consolidated financial statements of TyraTech, Inc. for the year ended
31 December 2009 which were prepared in accordance with US GAAP.
The unaudited interim consolidated financial statements for the six months ended
30 June 2010 and 2009 were prepared on the basis of the accounting policies set
out in the most recently published consolidated financial statements of the
Company for the year ended 31 December 2009. As permitted this interim report
has been prepared in accordance with AIM rules.
In May 2009, the FASB issued additional guidance on subsequent events, now
codified as ASC 855-10, Subsequent Events (ASC 855-10). ASC 855-10 is intended
to establish general standards of accounting for and disclosures of events that
occur after the balance sheet date, but before financial statements are issued
or are available to be issued. It requires the disclosure of the date through
which an entity has evaluated events and the basis for the date-that is, whether
the date represents the date the financial statements were issued or were
available to be issued. This disclosure should alert all users of the financial
statements that an entity has not evaluated subsequent events after that date in
the financial statements issued for fiscal years and interim periods after June
15, 2009. The Company evaluated all subsequent events through September 29,
2010, the date the date the accompanying financial statements were available to
be issued. The adoption of ASC 855-10 had no impact on the Company's financial
statements.
2. Liquidity and Capital Resources
At 30 June 2010 the Company had US$1,475,232, before discontinued operations
adjustment, (2009 US $3,315,860) in cash and cash and cash equivalents and no
indebtness.
The Company issued 24,443,888 of new common shares of par value US$0.001 each
for a gross cash consideration amount of US$3.2 million and US$2.8 million net
of cash expenses. An additional 749,112 of new common shares par value of
US$0.001 each were issued in settlement of other expenses of US$99,781. These
shares are subject to a lock up agreement of six months which expires on 20
November 2010.
The Company has had significant negative cash flows from operating activities
since inception. The Company is continuing to reduce the magnitude of these
negative operating cash flows through cost reduction programs and product sales
expansion. The Company believes that with the existing cash on hand, cash
expected from existing supply contracts, funding from prospective agreements
currently being negotiated, and a continued focus on cost control, that the
Company will have sufficient cash to meet its working capital needs through the
remainder of 2010 through 30 June 2011.
3. Segments
The Company previously considered itself to have two separate strategic business
units that offer different products. They were managed separately because each
business required different knowledge, skills and marketing strategies. These
two business segments were pesticides and insecticides and sustainable
solutions. In the first half of 2010 the Company decided to discontinue the
business conducted in the sustainable solutions segment. The effect of that
decision is discussed in the Discontinue Operations footnote.
4. Discontinued Operations
During 2010, the Company discontinued its sustainable solutions segment which is
reported as discontinued operations in the consolidated statements of operations
for the six months ended June 30, 2010 and June 30, 2009 and the twelve months
ended December 31, 2009. The assets and liabilities of discontinued operations
have been reclassified and are segregated in the consolidated balance sheets for
the six months ended June 30, 2010 and June 30, 2009 and the twelve months ended
December 31, 2009.
The Company ceased operations of the Sustainable Solutions, LLC.
subsidiary effective March 31, 2010 and began liquidating the product inventory
and settling the remaining liabilities with suppliers. This subsidiary was
discontinued because its operations did not align with the Company's strategic
plans.
The consolidated statements of operations for the six months ended June 30,
2010, twelve months ended December 31, 2009, and six months ended June 30, 2009
exclude revenues of $82,101, $311,004, and $276,199 and losses of $46,551,
$2,797,950, and $558,462, respectively, from continuing operations. The
following tables summarizes the major categories of assets and liabilities being
discontinued:
+------------------------------+----------+-----------+------------+--------------+
| | | 6/30/2010 | 6/30/2009 | 12/31/2009 |
+------------------------------+----------+-----------+------------+--------------+
| | | | | |
+------------------------------+----------+-----------+------------+--------------+
| Accounts receivable | | 1,500 | 177,833 | 46,797 |
+------------------------------+----------+-----------+------------+--------------+
| Prepaid expenses | | 0 | 364,356 | 413 |
+------------------------------+----------+-----------+------------+--------------+
| Inventory | | 31,823 | 1,218,648 | 416,778 |
+------------------------------+----------+-----------+------------+--------------+
| Total current assets | | $33,323 | $1,760,837 | $463,988 |
+------------------------------+----------+-----------+------------+--------------+
| | | | | |
+------------------------------+----------+-----------+------------+--------------+
| Accounts payable | | $165,064 | $128,934 | $269,373 |
+------------------------------+----------+-----------+------------+--------------+
| Accrued expenses | | 595 | 8,427 | 283,392 |
+------------------------------+----------+-----------+------------+--------------+
| Total current liabilities | | $165,659 | $137,361 | $552,765 |
+------------------------------+----------+-----------+------------+--------------+
5. Revenue (net of discontinued operations)
+--------------------------------+-------------+-------------+-------------+
| | (Unaudited) | (Unaudited) | (Audited) |
| | six months | six months | year ended |
| | ended | ended | 31 December |
| | 30 June | 30 June | 2009 |
| | 2010 | 2009 | |
+--------------------------------+-------------+-------------+-------------+
| | $'000 | $'000 | $'000 |
+--------------------------------+-------------+-------------+-------------+
| | | | |
+--------------------------------+-------------+-------------+-------------+
| Opening deferred revenue | 476 | 1,199 | 1,199 |
+--------------------------------+-------------+-------------+-------------+
| | | | |
+--------------------------------+-------------+-------------+-------------+
| Closing deferred revenue | 154 | 175 | 476 |
+--------------------------------+-------------+-------------+-------------+
| Movement in deferred revenue | 322 | 1,024 | 723 |
+--------------------------------+-------------+-------------+-------------+
| Invoices raised | 2,394 | 2,023 | 5,608 |
+--------------------------------+-------------+-------------+-------------+
| Total revenue | $2,716 | $3,047 | $6,331 |
+--------------------------------+-------------+-------------+-------------+
6. Loss per Common Stock
The calculation of the basic and diluted earnings per ordinary share is based on
the Company's loss, excluding the effect of losses attributable to
non-controlling interests, and including losses from discontinued operations, of
$3,128,949 for the six months ended 30 June 2010 (six months ended 30 June 2009:
loss of $6,230,367; year ended 31 December 2009: loss of $13,880,838), and on
27,091,966, (30 June 2009: 20,893,633; 31 December 2009: 21,068,343) common
shares, the weighted average number in issue and ranking for dividend during the
period. There is no impact considered on the conversion of stock options or
warrants as the effect would be antidilutive.
7. Accounts Receivable and Other Assets (net of discontinued operations)
+---------------------+-------------+-------------+--------------+
| | (Unaudited) | (Unaudited) | (Audited) |
| | six months | six months | year ended |
| | ended | ended | 31 December |
| | 30 June | 30 June | 2009 |
| | 2010 | 2009 | $'000 |
| | $'000 | $'000 | |
+---------------------+-------------+-------------+--------------+
| | | | |
+---------------------+-------------+-------------+--------------+
| Accounts receivable | 83 | 730 | 528 |
| and other | | | |
+---------------------+-------------+-------------+--------------+
| | | | |
+---------------------+-------------+-------------+--------------+
| Prepaid expenses | 143 | 268 | 215 |
+---------------------+-------------+-------------+--------------+
| | $226 | $998 | $743 |
+---------------------+-------------+-------------+--------------+
8. Movement in Shareholders' Equity during the six months ended 31
December 2009 and 30 June 2010
+---------------------+--------+------------+--------------+----------+----------+------------+
| | Common | Additional | Accum-ulated | Treasury | Non-con- | Total |
| | Stock | | deficit | Stock | trolling | |
| | | Paid-in | | | Interest | |
| | | Capital | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
+---------------------+--------+------------+--------------+----------+----------+------------+
| | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Shareholders' | $22 | $61,598 | $(55,538) | $(4) | $6 | $6,084 |
| Equity as of June | | | | | | |
| 30, 2009 | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Contribution from | | | | | 27 | 27 |
| non-controlling | | | | | | |
| interest | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Stock based | | 1,579 | | | | 1,579 |
| compensation | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Net loss | | | (7,639) | | (34) | (7,673) |
+---------------------+--------+------------+--------------+----------+----------+------------+
| | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Shareholders' | $22 | 63,177 | (63,177) | (4) | (1) | 17 |
| Equity as of | | | | | | |
| December 31, 2009 | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Proceeds from | 25 | 2,801 | | | | 2,826 |
| issuance of common | | | | | | |
| stock, net of | | | | | | |
| expenses | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Stock based | | 572 | | | | 572 |
| compensation | | | | | | |
| Noncontrolling | | | | | | |
| interest | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Net loss | | | (3,123) | | (5) | (3,128) |
+---------------------+--------+------------+--------------+----------+----------+------------+
| | | | | | | |
+---------------------+--------+------------+--------------+----------+----------+------------+
| Stockholders' | | | | | | |
| equity, as of June | $47 | $66,550 | $(66,300) | $(4) | | $287 |
| 30, 2010 | | | | | $(6) | |
+---------------------+--------+------------+--------------+----------+----------+------------+
9. Contingencies
In November, 2008, Molecular Securities, Inc. ("Molecular") filed a Complaint
against the Company asserting claims for breach of contract and quantum meruit.
Molecular alleges that it is owed US$2,760,470 for services it allegedly
provided to TyraTech plus interest, attorneys' fees and costs. The appellate
court recently granted the Company's motion for a stay of trial, on September
21, 2010. The stay will delay the trial until the appellate court determines
the Company's appeal, likely the later part of 2011. TyraTech strongly refutes
this claim and continues vigorously defending itself in the lawsuit. As a
result, the Company has not recorded any liability related to this contingency.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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