Liquidity and Cash Flow
Cash flow used in operations for 2011 was US$2.3 million compared to US$2.7 million for 2010, a $0.4 million
improvement. This improvement was primarily the result of our increased gross margin on product sales offset by
lower upfront license payments receipts. Also contributing to the improvement was our decrease in accounts
receivable and inventory, partially offset by the decrease in our accounts payable and accrued expenses.
Cash flow from financing activities in 2011 were nil, compared to US$4.8 million in 2010 when the Company raised
US$4.8 million in equity financing.
Cash and cash equivalents were US$0.9 million at the end of 2011 (2010: US$3.3 million). We invest our cash resources
in deposits with banks with the highest credit ratings, putting security before absolute levels of return.
Subsequent to December 31, 2011 we raised an additional US$3.8 million in capital, net of expenses, through the
issuance of 52,101,460 common shares to fund our operations while we continue negotiations with our existing and
new partners. While we expect 2012 revenues from our primary customer to be below 2011 levels, discussions with
potential new partners are progressing well, and although there remains uncertainty as to the timing and amounts
of any resulting funds, we believe that existing and potential cash resources should be sufficient for the Company's
short-term requirements.
Currency Effects
The Group has no significant overseas currency exposures and does not use financial derivatives to manage
currency risk.
Peter Jerome
Chief Financial Officer and Group Secretary
June 28, 2012
TYRATECH, INC. • ANNUAL REPORT 2011 • PAGE 12
Financial Review
(CONTINUED)
