TYRATECH • ANNUAL REPORT 2014 • PAGE 7
Deferred revenue and other long-term liabilities decreased by
$1.3 million ($0.1 million in 2014 versus $1.4 million in 2013) primarily
due to recognising the remaining $1.2 million of the Terminix
exclusive product license fee during 2014.
At 31 December 2014 shareholders' equity was approximately
$2.6 million versus a shareholders' deficit of $1.4 million at 31
December 2013. The $4.0 million increase was primarily due to
approximately $8.9 million received in net proceeds from stock
issuances, including exercise of warrants, throughout the year,
offset by the current year $5.1 million net loss, before and after
taxes.
Cash Flow and Liquidity
Net cash used in operations was $7.2 million in 2014 compared to
$4.6 million for 2013, an increase of $2.6 million. This increase was
primarily the result of the production of inventory, an increase
in accounts receivable associated with product sales and an
increase in business development costs and expenses in relation
to the product launches undertaken in both the USA and the UK.
Net cash used for investing was approximately $0.3 million, which
represented the Company's October 2014 covering capital
contribution to Envance.
Net cash provided by financing activities was approximately
$8.9 million received in net proceeds from current year stock
issuances.
As of 31 December 2014, the Company had approximately
$2.2 million in cash and cash equivalents. The Company had
no indebtedness as of 31 December 2014 but currently has no
committed external sources of funds. Subsequent to year end,
the Company received approximately $0.5 million in repayment
of loans and consideration relating to the renegotiation of the
shareholding structure of Envance, the Company's joint venture
with AMVAC.
With new products and distribution channels, there is always
uncertainty as to the speed and level of market penetration
and, as explained in the CEO's letter, there is a strong seasonal
element to the Company's product sales, which can impact
liquidity. Based upon the Company's existing cash and cash
equivalents, its current operating plans, anticipated revenues
from product sales and other collaborative arrangements, and
the ability to control costs as a result of the Company's cost
minimisation program, the Company's forecast indicates it will
have sufficient cash to meet its working capital needs through
the next twelve months. However, the forecast provides no
assurance that these anticipated revenues or collaborative
arrangements, cost minimisation actions and related cash flows
will materialise. In this event, the Company may need to initiate
actions to raise additional capital.
Currency Effects
In the current year, the Company had no material foreign currency
risk. Going forward, as the Company pursues current and future
growth opportunities in geographic regions outside the USA, the
foreign currency risk may become material, at which time the
Company may evaluate the need to use financial derivatives
to mitigate the foreign currency risk. However, there can be no
assurance these financial derivatives will either mitigate the risk or
be available on acceptable terms, if at all.
Barry Riley
Acting Chief Financial Officer
22 June 2015
