TyraTech (AIM: TYR) announced it plans to raise £1 million and up to a further£1.2 million before expenses by means of a subscription of new shares in the company at 9 pence per new share to provide additional working capital.
The group flagged a fundraising to provide adequate short term working capital headroom on April 29, saying it had already received expressions of interest from potential subscribers totalling approximately £1 million. On the day, it said whilst the business continues to perform broadly in line with expectations, the board was aware, based on current cash flow forecasts and the likely timing of certain cash receipts due to be paid in June, that the company's working capital headroom may fall to below £50,000 during the last weeks of May.
Today, the novel pesticide company for human, animal and environmental health said the subscription is conditional on shareholder approval at a special meeting which it is calling for May 19 2010.
It has received irrevocable undertakings from certain stockholders to vote in favour of the fundraising plans amounting in aggregate to 12,072,390 common shares, representing approximately 55 percent of the capital.
Following approval, interested parties may subscribe for up to 24,444,444 new common shares to raise up to £2.2 million before expenses. Subscriptions have so far been received in respect of 11,113,604 new common chares conditionally raising £1,000,224 million before expenses.
TyraTech said the subscription will enable it to leverage existing partnerships to create new business opportunities, develop relationships with new partners, maintain the confidence of current and future partners in the company, improve its negotiating position with new partners and provide greater security for the future.
In February, the company announced an expanded strategic relationship with professional pest control group Terminix International. Today, TyraTech announced it received an additional order for 300,000 units of its co-branded Terminix SafeShield product from Terminix. This order is currently being fulfilled and represents a significant increase on the amount of Terminix SafeShield ordered in 2009, and additional orders are expected in 2010. The Company's partnership with Terminix requires that it supplies new products, for example other effective presentations and formulations, for new markets.
The relationship with Kraft Foods Holdings Inc (NYSE: KFT) continues strongly. The company has received the second payment under the revised contract announced in October 2009 reimbursing costs of the project incurred during 2010.
TyraTech’s cost base has been cut to a level close to half of that incurred in 2009. “Because of the current cash constraints, negotiations with new potential partners have been difficult and most have simply been put on hold until the company can focus more on the strength of its products and less on the weakness of its balance sheet. Other important areas on hold include geographic expansion as the company has had to freeze the European regulatory program,” the company said.
In full-year results statement from its April 29, TyraTech said it has demonstrated the commercial value of its technology during the period, with the launch of the company’s first Terminix International joint-development product into consumer markets. Consequently, TyraTech achieved product revenue growth and reduced costs by a third to report a significantly improved financial performance in 2009. The company reduced its net pre-tax loss to US$12.9m, down from US$17.4m in the previous year.