TYRATECH • ANNUAL REPORT 2014 • PAGE 10
D i r e c t o r 's Rep o r t ( c o n t ' d )
operating and financial systems, sub-contract manufacturers,
warehouse and logistic facilities and EDI services, 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 continually
improve its existing operational, financial and management
processes and to implement new systems. TyraTech will be reliant
upon distribution channels and existing and future distribution
partnerships, particularly as it expands its operation and is
therefore dependent on such distribution and partnerships to
achieve growth and expansion of its operations.
Market penetration rates
The Company's business model assumes that, over time, its
products will be adopted by the market. However, it is possible
that penetration rates may be slower than the Company's
forecasts assume. If Company's products do not achieve an
adequate level of market penetration, the Company may not
generate significant product revenue and may not be able to
generate a profit.
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. While it may apply from time to
time to register additional patents, trade-marks, 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 for in the future, or that the lack
of any such patents will not have a material adverse effect on
TyraTech's ability to develop and market its proposed products
or that third parties will not misappropriate TyraTech's trade
secrets and confidential information. There can be no assurance
as to the ownership, validity or scope of any patents in which
TyraTech has an interest or that claims relating to such patents
will not be asserted by other parties or that, if challenged, such
patents will not be revoked. Even if patent protection is obtained,
no assurance can be given that TyraTech will successfully
commercialise the product or technology prior to expiry of the
patent protection. It is also not certain that extensions of patent
protection (patent term extensions, supplementary protection
certificates or their equivalent around the world) will be available
at the end of the term of patents currently in existence so as
to provide patent protection during the initial period in which
products are marketed. TyraTech may be unable to adequately
protect its proprietary information and know-how. In addition
to its patented technology, TyraTech relies upon unpatented
proprietary technology, processes and know-how. TyraTech has
confidentiality agreements in place with customers, suppliers
and employees who have access to its proprietary information
and know-how, but such agreements may be breached and
TyraTech may not have adequate remedies for such breaches.
In addition, TyraTech's trade secrets may otherwise become
known or be independently developed by competitors. If
certain parts of TyraTech's proprietary information and knowhow
were to become public knowledge, then the value of
TyraTech's products could be adversely affected which could
have a material adverse effect on TyraTech's business, financial
condition and results of operations.
TyraTech's ability to introduce certain products to market
is dependent on successful completion of the regulatory
approval process
Insecticide and parasiticide products for humans and animals
are subject to a regulatory approval or registration process in the
US, in Europe and other parts of the world. Failure to obtain or
maintain regulatory approval or registration could result in the
inability to market and sell such products. The time necessary
to obtain regulatory approval or registration varies among
products and between the US, Europe and the rest of the world
and is affected by numerous factors many of which are beyond
TyraTech's control. There can be no assurance that regulatory
clearance for the product or, indeed, for trials at each stage and
approval for TyraTech's product candidates still in development
will be forthcoming without delay or at all.
