TYRATECH • ANNUAL REPORT 2014 • PAGE 33
(6) ACCRUED LIABILITIES
Accrued liabilities as of 31 December 2014 and 2013 consist of:
2014 2013
in $000's in $000's
Accrued compensation $331 $161
Professional fees 130 65
Other 203 186
$664 $412
(7) COMMITMENTS AND CONTINGENCIES
Leases
On 17 February 2011, the Company signed a ten-year lease on
an office and laboratory facility in Morrisville, North Carolina. This
lease includes escalating rental payments which are recognised
on a straight-line basis under US GAAP. Related to this facility
lease, the Company maintains a stand-by-letter-of-credit, which
was $65,000 at 31 December 2014 and 2013, respectively.
Future minimum lease payments under non-cancellable
operating leases (with initial or remaining lease terms in excess of
one year) as of 31 December 2014 are as follows:
Year ending 31 December: in $000's
2015 $141
2016 145
2017 148
2018 152
2019 156
Thereafter $227
Rental expense for operating leases included in general and
administrative expenses in the consolidated statement of
operations during the year ended 31 December 2014 was $0.2
million (2013: $0.2 million).
(8) Related Party Transactions
The Company established a shared services agreement to
provide general and administrative, production support, and
research and development services to Envance (a joint venture
with AMVAC, which owns approximately 21.27 percent of the
Company) for a monthly fee based primarily on the percentage
of time Company employees devote to supporting Envance
business activities and the employee's salary expense. During
the year ended 31 December 2014 the Company charged
Envance $0.2 million which was recorded in collaborative
revenue (2013: $0.7 million). Envance represented $0.1 million of
the Company's accounts receivable balance at year end. There
were no amounts due to Envance.
(9) WARRANTS
AMVAC Warrant – In connection with the license and joint
venture agreements entered into with AMVAC during 2012,
in November 2012 the Company agreed to issue to American
Vanguard Corporation a warrant to subscribe for 10 million
common shares. The warrant was exercisable at a price of 10
pence per share at any time until 31 May 2013. The fair value
of the warrant at the date of grant was immaterial. This warrant
was amended on 02 April 2013 to reduce the exercisable price
from 10 pence to 6 pence and extend the expiry of the exercise
period of the warrant from 31 May 2013 to 31 May 2015. The
warrant was further amended on 21 February 2015 to reduce the
exercise price to 5 pence. Warrant liability of $0.0 million and $0.2
million was reported at 31 December 2014 and 31 December
2013, respectively. The Company employed a pricing model
to determine the fair value of the warrant liability and used
significant assumptions in estimating the fair value of the warrant
expense and liability including the estimated volatility, risk free
interest rate, and the estimated life of the warrant. There were
6,155,000 common shares issued from exercise of this warrant
through 31 December 2014. Subsequent to 31 December 2014,
on 31 May 2015 the warrant expired with the shares remaining
under the warrant unexercised.
Valuation assumptions:
Expected volatility 65.00%
Expected term (years) 0.4
Risk-free interest rate 0.12%
