History of Losses
The Group has experienced operating losses in each year
since its inception and, as at 31 December 2010, had accumulated
losses of US $69.3 million. The Group will incur further
losses and there can be no assurance that the Group will ever
achieve significant revenues or profitability.
Working Capital and Significance of the Fundraisings
As at 31 December 2010, the Company had cash and shortterm
deposits of US $3.3 million. The Directors believe that,
based on current forecasts, the Company will have sufficient
cash to fund its operations for the foreseeable future. The
achievability of these forecasts is dependent on a number of
key assumptions, in particular, increased market penetration
through the Company's strategic relationship with Terminix
in 2011 and 2012 and the resulting sales increase and successful
leverage of the Company's products and technology into
consumer markets as well as its ability to enter into new partnerships
in new markets. If the Company does not perform in
line with these key assumptions underlying the forecasts, the
Company's cash resources may be absorbed earlier than
forecasted.
The Company's Future Operating Results Will Be Highly
Dependent on How Well It Manages the Expansion of
Its Operations
The Company may experience periods of rapid growth in
the number of products it supplies. This, in turn, would likely
necessitate an increase in the number of the Company's
employees, its operating and financial systems, sub-contract
manufacturers and the geographic scope of its operations.
This growth and expansion may place a significant strain on
the Company's financial, management and other resources. To
manage its expanded operations effectively, TyraTech will
be required to continue to improve its existing operational,
financial and management processes and to implement new
systems. TyraTech will be reliant upon distribution sales, particularly
as it expands its operation and is therefore dependent
on such distribution to achieve growth and expansion of
its operations.
Market Penetration Rates
The Company's business model assumes that, over time, its
product will be adopted by the market. However, it is possible
that penetration rates may be slower than the Company's
forecasts assume.
The Company Has an Outstanding Litigation With Molecular
Securities, Inc.
In October 2008, Molecular Securities, Inc. filed a complaint
against the Company asserting claims for breach of contract.
Molecular Securities, Inc. alleges that it is owed US $2.7 million
for services that it allegedly provided to the Company plus
interest, attorneys' fees and costs. On 26 May 2011, the New
York Supreme Court, Appellate Division of New York County
issued a ruling entering judgment in favour of the Company
and against Molecular and dismissing Molecular's complaint
in its entirety. Molecular may choose to appeal the ruling
with the Court of Appeals (New York's highest court) in which
case the Company will continue to defend itself. If Molecular
Securities, Inc. were to prevail in the litigation there could be
a material adverse effect upon the Group's working capital
and the Company might have insufficient funds to meet such
a claim.
The Failure of TyraTech's Patents, Trade Secrets and
Confidentiality Agreements to Protect Its Intellectual Property
May Adversely Affect Its Business
TyraTech is the owner, or co-owner, of intellectual property
rights, including patents, trademarks, designs, copyright,
trade secrets and confidential information. Whilst it may apply
from time to time to register additional patents, trademarks,
designs and copyrights and take reasonable steps to protect
its trade secrets and confidential information, TyraTech's ability
to compete effectively with other companies depends,
amongst other things, on the adequate protection of intellectual
property rights owned by or licensed to it. There can also
be no assurance that patents will be issued in connection with
any of its applications now pending or which may be applied
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