26th Sep 2007 07:01
TyraTech, Inc.26 September 2007 Press Release 26 September 2007 TyraTech Inc. ("TyraTech" or "the Company") Interim Results TyraTech (AIM:TYR), the pioneer of safer, effective and natural pesticideproducts, today announces its maiden Interim Results for the six months ended 30June 2007. Highlights • Revenue for the six months ended 30 June 2007 was US$333 thousand (same period in 2006 US$104 thousand); • Operating loss for the six months ended 30 June 2007 was US$8.1 million (same period in 2006 US$2.6 million); • Completion of the initial public offering in June 2007, raising gross proceeds of £25 million (US$49.6 million); • Successful achievement of Syngenta partnership milestone for the development of the lead product for the professional pest control operator market; and • Continued strengthening of the management team with the appointment of Steven Briggs (VP Global Markets) Commenting on the results Douglas Armstrong PhD, Chief Executive Officer ofTyraTech, said: "The Company has achieved significant milestones during thefirst half of this year. We have made our debut on to the equity capitalmarkets, having successfully raised £25 million as we joined AIM. We have alsoreceived a small milestone payment from one of our significant global commercialpartners, Syngenta, for the development of products within the professional pestcontrol market. Now we are accelerating our operations and look to bring ourfirst natural yet effective alternative in the international pesticides sector,which has traditionally been dominated by synthetic chemicals, to market in theforthcoming months." -Ends- For further information:TyraTech Inc.Douglas Armstrong PhD, Chief Executive Officer Tel: +1 (321) 409 7403 www.tyratech.com Nomura Code SecuritiesCharles Walker Tel: +44 (0) 20 7776 1200 www.nomuracode.comJefferies International LimitedJack Pryde Tel: +44 (0) 20 7618 3500 www.jefferies.comMedia enquiries:AbchurchHeather Salmond Tel: +44 (0) 20 7398 [email protected] [email protected] [email protected] www.abchurch-group.com Chairman's Statement TyraTech develops and commercializes proprietary products for the control ofinsects and parasites, which incorporate unique blends of natural activeingredients that provide a combined high potency and high safety capability. Theproduct pipeline addresses a diversity of pesticide market opportunities thatinclude agricultural and horticultural applications, consumer applications,professional pest control applications, mosquito control and human healthcareapplications. The first half of 2007 has been a period of great progress for TyraTech,highlighted by the successful completion of the initial public offering on AIMin June. The Company is now well funded and accelerating its operations to bringits first products to market in the coming months, and to build theinfrastructure to address the diverse market opportunities for the control ofinsects and parasites. We have made good progress internally which we expectshould become more externally evident over the coming months. Geoffrey VernonChairman25 September 2007 Chief Executive's Operational Report We have made several significant achievements during the six months to 30 June2007. We completed a successful initial public offering raising gross proceedsof £25 million (US$49.6 million). Since the IPO we have continued to develop astrong management team, adding Steve Briggs as our Vice President GlobalMarkets. We will continue to recruit the necessary resources to enable us tosuccessfully take our products to market. We have made good progress in the period in productizing our proprietarytechnology. This progress has been made in both the development of TyraTech'sown products, as well as those being developed by our strategic partners. I amparticularly pleased how our organization has progressed in this regard, even inthe short period since the IPO. We have successfully met the agreed development progress requirements for asmall paid milestone in our partnership with Syngenta for the development of thelead all-natural active ingredient product for professional pest controloperators. Similarly, after completing our first year of interaction andevaluating our product pipeline, Scott's Miracle-Gro made an option payment tonegotiate an expanded relationship with TyraTech. We also expect to announcethe meeting of additional key partner milestones later in the year. Our technology and product development have made progress on all fronts. A newproduct area is our "Natures Natural", a fully sustainable horticultural andgarden product that is intended to replace peat in growth or potting soilmixtures. In addition to fulfilling our objective for safe and naturalproducts, we believe that Natures Natural will offer a unique delivery of ourTyraTech Natural pesticides for these markets. We now believe that thisbusiness could move into revenue generation in the next few months. Overall I am pleased with the progress the Company made in the period,particularly since the IPO. R Douglas Armstrong Ph.D.Chief Executive Officer25 September 2007 Financial Review Operations TyraTech Inc is reporting its first results after raising gross proceeds of £25million (US$49.6million) at the time of its listing on AIM. The net proceedsafter cash expenses of the flotation amounted to £22.1 million (US$43.8million).The following discussion of results compares 30 June, 2007 with 30 June, 2006results. Revenue for the six month period was US$333 thousand (2006 US$104 thousand).This resulted from invoices raised in the period of US$110 thousand (2006 US$200thousand) being adjusted for deferred revenue recognized in this period ofUS$238 thousand (2006 US$(96 thousand)) and a sales incentive of US$15 thousandrelated to a change in fair value of warrants issued to a commercial partner. The overall gross margin for the six month period was US$240 thousand (2006US$104 thousand). Overall operating expenses grew for the six month period to US$8.318 million(2006 US$2.715 million). The overall growth was driven by an increase insalaries and consultancy costs as we increased the amount of resources committedto the exploitation of our technology. The overall expense for the six monthperiod included non-cash compensation of US$1.670 million (2006 US$0.002million), depreciation of US$0.102 million (2006 US$0.002 million), and licensemaintenance fees of US$100 thousand (2006 US$49 thousand), therefore the overallcash spent on operating expenses grew to US$6.446 million (2006 US$2.662million) for the six month period. Net finance expense for the six month period was US$962 thousand (2006 US$386thousand). During the six month period, the Company received interest income ofUS$68 thousand (2006 US$nil) from deposits of surplus funds raised from the IPO,and incurred interest of US$1,030 thousand (2006 US$386 thousand). The interestexpense includes US$643 thousand (2006 US$326 thousand) of deferred loan costwritten off. Changes in the fair value of warrants amounted to US$374 thousand (2006 US$nil)and relates to warrants issued to an affiliate and underwriters of the IPO. An arrangement to accelerate payment of the Vanderbilt University licensingagreement resulted in a $518 thousand loss on extinguishment of the discountedVanderbilt license liability. Payment of the liability was made through acombination of cash (US$470,000) and 65,457 shares of TyraTech, Inc. commonstock. Balance Sheet and Funding During the current period TyraTech LLC a Delaware LLC was merged with and intoTyraTech Inc, a company formed on 27 April 2007 as a Delaware Corporation. Theexisting members of TyraTech LLC received 16,934,565 common shares in TyraTechInc. A further 5,000,000 shares were issued with the admission of the company totrading on the AIM market of the London Stock Exchange for a net proceeds ofUS$43.758 million. At that time 65,457 common shares were issued to VanderbiltUniversity in conjunction with a cash payment for the assignment of outrightownership to the company of certain patents and patent applications. Furtherwarrants for 198,002 common shares were granted to the company's advisers onadmission of the shares to the AIM exchange. The proceeds from the issue of 5,000,000 shares were used in part to repay thenotes payable to XLTechGroup Inc. During the month of June the company acquired 129,121 treasury shares under theterms of a buy back agreement with an employee who had retired. Keith BigsbyChief Financial Officer25 September 2007 Consolidated Income Statements Unaudited Unaudited Audited six months ended six months ended year ended 30 June 2007 30 June 2006 31 December 2006 Note US$'000 US$'000 US$'000 Net Revenue 3 333 104 (265)Cost of Sales (93) - - Gross Profit 240 104 (265) Selling & Marketing Costs (1,098) - (1,231)Research & Development Costs (4,277) (2,196) (4,505)Administrative Costs (2,943) (519) (1,367) Total Operating Expenses (8,318) (2,715) (7,103) Operating loss (8,078) (2,611) (7,368) Net Finance Expense (962) (386) (1,594)Warrant Expense (374) - (2,229)Loss on Extinguishment of Liability (518) - - Loss Before Taxation (9,932) (2,997) (11,191) Taxation - - - Net loss (9,932) (2,997) (11,191) Loss per ordinary share 4Basic and diluted (0.45) (0.20) (0.69) Consolidated Balance Sheet Unaudited Unaudited Audited six months ended six months ended year ended 30 June 2007 30 June 2006 31 December 2006 Notes US$'000 US$'000 US$'000 Current AssetsCash and cash equivalents 32,298 114 1,657Restricted cash 101 - -Inventory 261 - 219Trade receivables and otherassets 5 355 130 214 Total current assets 33,015 244 2,090 Non current assetsProperty, plant & equipment 640 327 705Total assets 33,655 571 2,795 Current liabilitiesTrade and other payables 6 2,605 1,362 1,861Notes payable to affiliate - 1,366 6,019Deferred revenue 1,792 96 2,187Liability for warrants 1,396 1,930 4,655 Total current liabilities 5,793 4,754 14,722 Long term liabilitiesCapital Lease obligationgreater than one year 46 - 55Total liabilities 5,839 4,754 14,777 Equity 7Common stock at par 22 16 16Treasury stock (1) - -Additional paid in capital 53,108 2,988 3,383Retained loss (25,313) (7,187) (15,381) Shareholders' Equity 27,816 (4,183) (11,982) Total liabilities andShareholders' equity 33,655 571 2,795 Consolidated Cash flow Statements Unaudited Unaudited Audited six months ended six months ended year ended 30 June 2007 30 June 2006 31 December 2006 US$'000 US$'000 US$'000 Cash flows from operating activities Net loss (9,932) (2,997) (11,191)Adjustments to reconcile net loss to netcash used in operating activitiesDepreciation and amortization 745 328 1,356Write-off of inventory 93 -Deferred revenue recognized in the period (348) (104) (71)License maintenance fees 100 49 116Change in fair value of warrants issued as -sales incentive 15 496Changes in fair value of warrants 374 - 2,229Noncash compensation to employees andnonemployees 1,670 2 397Extinguishment of license maintenance feeliability 518 - -Changes in operating assets and liabilitiesAccounts receivable and other assets (300) (130) (56)Inventory (135) - (219)Accounts payable and accrued liabilities 963 537 810Deferred revenue 110 200 2,100Due to affiliate (184) 77 219Net cash used for operating activities (6,311) (2,038) (3,814) Cash flows used for investing activitiesPurchases of property and equipment (36) (253) (618)Net cash used for investing activities (36) (253) (618) Cash flows from financing activitiesNet (Payments)/Borrowings on notes payableto affiliate (6,663) 2,374 6,062Payments made under capital lease (8) - (4)Net proceeds from sale of common stock 43,760 - -Treasury stock purchase from employee (1) - -Net cash provided by financing activities 37,088 2,374 6,058Net increase in cash 30,741 83 1,626Cash beginning of the period 1,657 31 31Cash end of the period 32,398 114 1,657 Unaudited Unaudited Audited six months ended six months ended year ended 30 June 2007 30 June 2006 31 December 2006 US$'000 US$'000 US$'000 Non-cash investing and financing activities: The Company incurred a capital leaseobligation that was capitalized to propertyand equipment - - 76 The Company issued warrants to acquiremember units in connection with financingobtained, which was recorded as a discountto the debt and a non-cash warrant liability - 1,391 1,391 The Company recorded and subsequentlywrote-off a receivable and deferred revenuerelated transaction with an affiliate (158) - 158 The Company incurred IPO costs which wereincurred and included in accounts payable atperiod end 900 - - The Company reclassified warrants issued toa vendor and an affiliate at the IPO date to equity. 5,037 - - The Company issued warrants in satisfactionof IPO costs incurred to an advisor 1,390 - - Notes to the Interim Consolidated Financial Statements 1. Basis of Preparation The financial statements of TyraTech have been prepared in accordance withaccounting principles generally accepted in the Unites States of America (USGAAP). The results for the year ended 31 December 2006 have been extracted from thestatutory consolidated financial statements of TyraTech Inc. for the year ended31 December 2006 which are prepared in accordance with US GAAP, on which theauditors gave an unqualified report. The unaudited interim financial statements for the six months ended 30 June 2007and 2006 have been prepared on the basis of the accounting policies set out inthe most recently published financial statements of the Company for the yearended 31 December 2006. On May 23, 2007 the Company was recapitalized from a limited liability companyto a corporation in preparation for an IPO on the AIM. This recapitalizationwas accomplished through a reverse stock split where each LLC member unit wasexchanged for 0.8608 common stock shares in the Company. The equity section ofeach balance sheet and the loss per share presented below were restated toreflect the effect of the recapitalization. 2. Segmented Information. As at the 30 June 2007 the Company is organized into one operating division 3. Revenue Unaudited Unaudited Audited six months ended six months ended year ended 30 June 2007 30 June 2006 31 December 2006 US$'000 US$'000 US$'000 Opening deferred revenue 2,187 - -Written off to receivables (158) - -Closing deferred revenue 1,791 96 2,187Movement in deferred revenue 238 (96) (2,187)Invoices raised 110 200 2,418Gross Revenue 348 104 231Warrants issued as sales incentive (15) - (496)Net Revenue 333 104 (265) 4. Earnings per Common Stock The calculation of the basic and diluted earnings per ordinary share is based onthe Company's loss of US$9,932,000 (six months ended 30 June 2006: loss ofUS$2,997,000; year ended 31 December 2006: loss of US$11,191,000), and on22,000,022 (30 June 2006: 15,339,484; 31 December 2006: 16,239,027) commonshares, the weighted average number in issue and ranking for dividend during theperiod. 5. Trade Receivables and Other Assets Unaudited Unaudited Audited six months ended six months ended year ended 30 June 2007 30 June 2006 31 December 2006 US$'000 US$'000 US$'000 Trade receivables and other - 125 194Interest receivables 57 - -Prepaid expenses 298 5 20 355 130 214 6. Trade and Other Payables Unaudited Unaudited Audited six months ended six months ended year ended 30 June 2007 30 June 2006 31 December 2006 US$'000 US$'000 US$'000 Accounts payable 1,448 220 132Accrued liabilities 512 492 869Accrued license fees 470 453 502Amount payable toAffiliate 157 197 341Amounts due on the current portion ofcapital lease 18 - 17 2,605 1,362 1,861 7. Movement in Equity during the six months ended 30 June 2007 Common Stock Additional Accum-ulated Treasury Total deficit Stock Paid-in US$'000 US$'000 US$'000 US$'000 US$'000 17 3,383 (15,381) - (11,981) Shareholders' Equity, as ofDecember 31, 2006Grant of share services - 1,670 - 1,670Shares issued to settle 651 - - 651Vanderbilt licensing liabilityGross proceeds from issuance of 5 49,558 - - 49,563sharesIPO expenses paid or to be paid in - (5,801) - - (5,801)cashWarrants issued to acquire 198,002 - (1,390) - - (1,390)shares-IPO expenseWarrants re-classified from - 5,037 - - 5,037liability to equity at IPO dateTreasury stock re-purchased from - - - (1) (1)employeeNet loss for the period - - (9,932) - (9,932)Shareholders' equity, as of June30, 2007 22 53,108 (25,313) (1) 27,816 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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