TYRATECH • ANNUAL REPORT 2014 • PAGE 28
N o t e s t o C o n s o l i d at e d F i n a n c i a l
S t at e m e n t s
(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 utilisation of a proprietary development
platform that enables rapid characterisation of potent blends of
plant oil derived pesticides. TyraTech is focused on developing
safe and effective 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 markets include personal
care product sales and animal health insecticides within the
United States (US) and the United Kingdom (UK).
During the normal course of business of research, product
development, and product commercialisation, the Company
has entered several third party agreements for licensing its
intellectual property, certain products, and product market
channels. These agreements have involved reimbursement of
research, development and intellectual property expenses, as
well as payment of licencing fees to the Company. The revenue
and expenses resulting from these agreements are reflected as
collaborative revenue and cost of revenue in the Company's
Consolidated Statements of Operations and, where appropriate,
as deferred revenue in the Consolidated Balance Sheets.
(b) Principals of consolidation
The accompanying consolidated financial statements of the
Company are presented in US Dollars ($) and 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.
The Company made a $400,000 investment for a 40% share of
a new enterprise (Envance Technologies, LLC or Envance) in
late 2012 and a $300,000 capital contribution in October 2014.
Envance is jointly owned with AMVAC Chemical Corporation
(AMVAC), a wholly owned subsidiary of American Vanguard
Corporation. This unconsolidated entity is accounted for under
the equity method of accounting.
(c) Segment information
The Company's chief operating decision maker reviews the
financial information presented on a consolidated basis for
purposes of allocating resources and evaluating the Company's
financial performance. Accordingly, the Company has
determined that it operates in a single operating segment.
(d) Cash and Cash Equivalents
The Company considers all highly liquid securities with maturities
of three months or less when acquired to be cash equivalents.
The Company maintains cash balances at both US and UK
financial institutions and invests in unsecured money market
funds. In the US, the accounts at these institutions are insured
by the Federal Deposit Insurance Corporation up to $250,000.
At times during the year, balances in these accounts exceeded
the federally insured limits; however, the Company has not
experienced any losses in such accounts.
