Notes to Consolidated Financial Statements
TYRATECH, INC. • ANNUAL REPORT 2011 • PAGE 34
(1) SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES AND PRACTICES
(a) Description of Business
TyraTech, Inc., a Delaware corporation, (the Company or
TyraTech) is engaged in the development, manufacture,
marketing and sale of proprietary insecticide and parasiticide
products, through the utilization of a proprietary development
platform that enables rapid characterization 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 Company is subject to risks common to companies in the
life sciences industry including, but not limited to, development
by its competitors of new technological innovations,
dependence on key personnel, sourcing of capital resources
and its ability to protect proprietary technology.
The Company's present product sales market is insecticide
sales within the United States (U.S.) through a distributor.
Liquidity and Capital Resources
The accompanying consolidated financial statements contemplate
continuation of the Company as a going concern.
The Company has incurred a net loss since Inception
as it has sought to develop, market and sell its products in
its target markets. As of December 31, 2011, the Company
had an accumulated deficit of US$ 71,987,811 and a cash
balance of US$905,115. During the year ended December 31,
2011, the Company incurred a net loss of US$2,720,659 and
its cash used in operations totaled US$2,316,523. 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. Subsequent
to December 31, 2011, the Company further raised
net cash proceeds of US$3.8 million from the issuance of
additional common stock. Until such time as the Company
can generate additional revenue from product sales and/or
enter into additional licensing arrangements, the Company
may require additional capital to continue its operations. The
Company is taking several actions, including identifying new
markets and customers, and discussing strategic licensing
arrangements with existing and new partners. At the same
time, the Company is evaluating each of the markets in
which the Company has developed products or has a development
pipeline, in order to focus the Company's resources
on those opportunities with the greatest potential returns to
shareholders. However, there is no assurance that such new
sources of revenues and/or cash flows will materialize and,
as a result, the Company may need to raise additional debt
and/or equity capital in the near future. There can be no assurance
that additional debt or equity funding can be obtained
or that available capital would be on terms acceptable to the
Company.
(b) Principals of consolidation
The accompanying consolidated financial statements of the
Company in U.S. Dollars (US$) have been prepared in accordance
with accounting principles generally accepted in
the United States of America (US GAAP) and include the accounts
of TyraTech, Inc. and subsidiaries listed below. Noncontrolling
interests are accounted for based upon the value
or cost attributed to their investment adjusted for the share of
income or loss that relates to their percentage ownership of
the entity.
Country of Percentage
Company name Incorporation holding
TyraTech Sustainable Solutions, LLC USA 100%
TyraChem LLC USA 50%
All intercompany balances and transactions have been eliminated
in consolidation.
