TIDMEDEN

RNS Number : 1327N

Eden Research plc

28 September 2021

28 September 2021

Eden Research plc ("Eden" or "the Company")

Half Yearly Report

Eden Research plc (AIM: EDEN), the AIM-quoted company focused on sustainable biopesticides and plastic-free formulation technology for use in the global crop protection, animal health and consumer products industries, announces its interim results for the six months ended 30 June 2021.

Financial highlights

   --    Revenue for the period of GBP0.79m (H1 2020: GBP0.60m*) 
   --    Product sales of GBP0.66m (H1 2020: GBP0.56m*) 
   --    Upfront and milestone payments of GBP0.10m (H1 2020: GBP0.02m) 
   --    Operating loss for the period of GBP1.75m (H1 2020: GBP1.00m) 
   --    Cash and cash equivalents of GBP5.75m (2020: GBP7.29m, H1 2020: GBP8.66m) 

*See prior-year adjustment - note 17

Business & Operational highlights

-- Exclusive Commercialisation, Supply and Distribution Agreement signed with Corteva Agriscience (NYSE: CTVA ("Corteva")), the fourth largest agriculture input company in the world, for Eden's first seed treatment product

-- Received the London Stock Exchange's Green Economy Mark in recognition of London-listed companies that derive over 50% of their total annual revenue from products and services that contribute to the global green economy

-- Authorisation received for the sale of Eden's bio-fungicide in Spain for use on a range of new crops for the control of an increased number of fungal pathogens

-- Eden's commercial collaborator, Eastman Chemical Company ("Eastman"), received authorisation for the sale of Cedroz(TM) in Italy

Lykele van der Broek, Chairman, commented:

"Values based upon sustainability, biodiversity and climate have become increasingly important to consumers, businesses, investors, and campaigners concerned about the future health of the planet and society. Despite the disruption and distraction of the global COVID-19 pandemic, the prioritisation of these issues has actually accelerated as we look to reset and reboot our global economy with a more sustainable approach.

We were, therefore, very pleased to start 2021 by being awarded the London Stock Exchange's Green Economy Mark, which recognises London-listed companies that derive over 50% of their total annual revenue from products and services that contribute to the global green economy. I am proud to state that 100% of our revenue contributes to the global green economy.

In addition, the Company has been working hard to solidify its formal Environmental, Social and Governance ("ESG") credentials, which we hope will be well-received by our stakeholders and, in particular, ESG investors, for whom a concrete sustainability mission, set of goals and impact are paramount.

Of course, a successful business is not simply built on its 'green' credentials and so I am pleased to report that we continue to make commercial progress. Most notably in May, Eden signed a landmark, exclusive Commercialisation, Supply and Distribution Agreement with Corteva, the fourth largest agriculture input company in the world, for Eden's first seed treatment product.

At the same time, the pandemic has continued to hamper regulatory processes, which means we are awaiting product approval in a number of countries for our biopesticide products, Mevalone and Cedroz. Furthermore, the pandemic and associated restrictions on travel and gatherings has hindered some commercial activities, including events and meetings that support the active and direct promotion of our products which are relatively new to the market and, therefore, would have benefited from more aggressive sales campaigns. Nevertheless, there are signs that the pace of regulatory activity is picking up, as we have received a number of key approvals in the first half of 2021, such as Cedroz in Italy and a key label extension for Mevalone in Spain, both major markets for Eden. Meanwhile, we continue to await approval in the vital US market for our three terpene active ingredients, as well as Mevalone and Cedroz. We anticipate there will be material progress to report towards the end of 2021.

Despite the obvious challenges of the past 18 months, impacting the whole of the agricultural sector, I want to reflect on Eden's resilience during this period. Eden has grown significantly over the past few years and the Company boasts high commercial potential, which the team at Eden is working hard to nurture and realise. We now possess internal skills and capabilities that we could only dream of just one year ago, and our operating environment continues to evolve rapidly in Eden's favour. I believe that we are well positioned to seize the market opportunity and truly live up to our full potential."

For further information contact:

 
                                                www.edenresearch.com 
   Eden Research plc 
 Sean Smith 
  Alex Abrey                                    01285 359 555 
 
   Cenkos Securities plc (Nominated advisor 
   and broker) 
 Giles Balleny / Camilla Hume/ Mark Connelly 
  (corporate finance) 
  Michael Johnson (sales)                       020 7397 8900 
 
   Hawthorn Advisors (Financial PR) 
 Victoria Ainsworth / Johanna Pemberton         eden@hawthornadvisors.com 
 

Eden Research plc

Chief Executive's Statement for the six months ended 30 June 2021

Introduction

Eden remains the only UK-quoted company focused on biopesticides for sustainable agriculture. We are operating at the heart of a sector on the rise - the biopesticide market specifically is growing at a rate of 15% per annum, due to increasing awareness amongst consumers, and consequently regulators, about the health of the planet and how and where food is produced and sourced.

All the while, as the population of the planet continues to grow and global standards for quality and safety increase, the pressure on our global food systems and farmers is higher than ever.

Eden exists to meet the need of global food producers seeking sustainable and effective alternatives to conventional chemical pesticides. Our mission is to be the leader in sustainable crop protection, supporting farmers by protecting their crops, improving yield and marketability, in order to keep up with rising global demand.

Through the first half of of 2021 the ongoing state of uncertainty and disruption caused by the COVID-19 pandemic globally, as well as the UK's exit from the European Union, persisted. However, despite these factors, Eden has become increasingly resilient as a business in the face of the unprecedented global upheaval and has steadfastly continued to progress its strategy, capabilities and growth plans.

Meeting our strategic objectives

In the near term, our strategic focus continues to be on:

- Registering and commercialising our two approved products, Mevalone(R) and Cedroz(TM), in new territories and for new applications, including the United States;

- Developing the use of our novel microencapsulation technology, Sustaine(R), with third-party active ingredients, including conventional agrochemicals;

- Building on existing opportunities with Corteva Agriscience, Sipcam and other collaborators;

   -       Advancing the development of our first insecticide product. 

These objectives build on the work and achievements of H1 2021, which provide firm foundations from which we will continue to pursue our strategic and commercial goals.

Notable commercial highlights from H1 2021 include:

-- New authorisation for the use of our biofungicide, Mevalone(R), in Spain, where over 24% of the European Union's production of fruit and vegetables originates;

-- Regulatory approval for sale of Cedroz(TM) in Italy, covering tomato, eggplant, pepper, chilli, pepino, cucumber, melon, courgette, pumpkin, and strawberries;

   --      The receipt of the London Stock Exchange's Green Economy Mark. 

Post period updates include:

   --      New authorisation for the use of our products: 

o Romania, the sixth largest wine producer in Europe, authorised Mevalone(R) for use on wine and table grapes;

o Morocco, which authorised the use of Cedroz on tomatoes and cucumbers. This is Eden's first registration in this important territory

-- New distribution agreement with Sipcam covering four North African countries; Egypt, Morocco, Algeria and Tunisia. Sipcam will sell Mevalone locally under the trade name Araw,for use against Botrytis on wine and table grapes, strawberries, tomatoes and cucurbits, including cucumber, courgette, squash, melons.

Forging landmark partnerships

In addition to the above, in May 2021, we were delighted to sign an exclusive Commercialisation, Supply and Distribution Agreement with Corteva Agriscience, the fourth largest agriculture input company in the world, for Eden's first seed treatment product. This deal followed a successful multi-season evaluation of the use of Eden's products and technology. The proposed product is based on our active ingredients and is delivered using our Sustaine(R) encapsulation technology.

This partnership, with a recognised industry leader, is testament to the potential of Eden's products and technology. It marks a major inflection point for Eden as a company and represents our ambition to expand our technology to new product categories, crops, and applications globally.

Moving into insecticides

As well as developing our first seed treatment product, we are investing in the development of an insecticide for future commercialisation.

Open-field and glasshouse trials which will be used for regulatory purposes are underway in various parts of the world and a number of potential partners have shown an interest in undertaking field trials with a view to acquiring distribution rights to the insecticide product.

It is envisaged that commercial discussions with those interested parties will begin in early 2022.

Driving positive impact through sustainable solutions

Eden received the London Stock Exchange Green Economy Mark in January 2021, highlighting our credentials as a business driving positive environmental transformation. This accolade is given to London-listed companies that derive over 50% of their total annual revenue from products and services that contribute to the global green economy. The Green Economy Mark accreditation recognises the positive impact Eden's products have on the global agricultural industry and Eden's credentials as a company with sustainability at its core.

As the only AIM quoted company focused on sustainable and plastic-free bio-pesticides, we are ahead of the curve when it comes to offering sustainable alternatives to traditional pesticide chemistries.

We offer farmers effective alternatives to the conventional chemical pesticides which have historically dominated production, so that they can fill the gap created by shifting consumer demands and regulatory changes that have and will continue to remove many pesticides from the market. In addition, our Sustaine(R) encapsulation technology provides crop protection product companies with a plastic-free alternative technology to encapsulate active ingredients, in response to a greater awareness of the importance of biodiversity and soil/land health, as well as impending regulatory restrictions on the use of microplastics in agricultural products.

Financial Review

Revenue for the half-year increased to GBP0.79m (H1 2020 (restated - see note 17): GBP0.60m).

The focus for the business remains to grow revenue through product sales which will ultimately provide a sustainable, consistent source of income for the Company. In the first half of 2021, product sales increased to GBP0.66m (H1 2020 (restated - see note 17): GBP0.56m).

The cash position at the half-year was GBP5.75m (H1 2020: GBP8.66m).

As planned, administrative expenses in the year increased to GBP1.27m (H1 2020: GBP0.97m) with the introduction of new team members and additional costs in respect of the new office and laboratory facilities. Consequently, operating loss increased to GBP1.75m (H1 2020: GBP1.00m). The increase in operating loss is due to the aforementioned increased staff and facilities costs, as well as amortisation of GBP0.32m (H1 2020: GBP0.26m) and share based payment charges of GBP0.54m (H1 2020 GBP0.05m).

Brexit

As previously stated, the Company understands that the ownership of its EU approvals of Mevalone and its constituent active substances are not impacted by Brexit, since guidance has been published stating that the owner of such approvals can continue to be a UK resident company.

However, seeking regulatory approval in the UK market for Eden products has become somewhat more challenging due to the introduction of parallel, but not identical, regulations and the Company is now weighing up market opportunities and costs under the new regulatory framework. We are now better placed than before to navigate what are likely to be complex regulatory challenges following our investment in an in-house regulatory affairs team.

From an operational perspective, the Company has not experienced any significant issues with continuing to use toll-manufacturing facilities in mainland Europe, though it is monitoring this situation. The Company also has manufacturing capabilities in the UK as well as the US which would provide some flexibility in the event that this situation changes. In addition, it continues to be feasible for Eden to manage some of its operations through its Irish subsidiary, should this be necessary. Raw materials are currently sourced from outside of the EU and so there has been minimal impact on this part of the supply chain.

COVID-19

The past 18 months have been an exceptionally challenging period for the industry. Despite disruption, farmers globally had to maintain production levels and a united effort was required to ensure that the provision of fresh food and produce was undisrupted, whilst the COVID-19 pandemic continued. Eden has continued to provide its products and technologies to the global crop production industry through its global partnership network.

At the onset of the pandemic in March 2020, there was no direct operational impact for Eden, and our stakeholders were reassured by our strengthened balance sheet, following our March 2020 fundraising.

Some disruption was experienced as the pandemic unfolded, including reduced import and export activities, limitation on field trial capacity due to reduced workforces, and limited promotional activity. Some regulatory authorities were working at reduced capacity and we experienced delayed product approvals as a result. However, we have continued to make good progress with new authorisations from late May onwards. We have also been able to execute on some key operational plans such as opening our new facilities in Oxfordshire and making key hires.

Our position on how we are addressing the COVID-19 pandemic is as follows:

1 We Are Funded for Future Growth

In March 2020, we raised GBP10.4 million (gross) from investors, an achievement that the whole team is proud of particularly given the volatility and uncertainty in the markets at the time. This vote of confidence from our shareholders (both existing and new) has helped us capitalise on the global shift towards more environmentally friendly methods of crop protection, driving us to become a leading provider of sustainable solutions for global agriculture. Though the coming months will still present challenges for the Company, our employees and our partners, Eden remains debt-free and has a strengthened balance sheet allowing us to execute on our exciting plans. Our outsourced manufacturing model means that we retain flexibility over our choice of manufacturing locations with a low fixed cost base.

2 Our Industry Has a Pivotal Role to Play

The agriculture industry has a vital role to play in feeding the world through the crisis and minimising the economic fallout. Plant protection products play a fundamental role in agricultural production - without them, we would not be able to cope adequately with global emergencies such as COVID-19. The biopesticides market outlook remains undoubtedly positive, with a clear demand from consumers for sustainably grown produce and in response, a notable shift from growers towards greener farming practices. As we step into the 'new normal', consumer demand for a chemical-free supply chain will only grow further. Not only do people need food to survive, they remain conscious of where it comes from and care about the supply chain. The choices people are making to put healthy food on the table are driving what farmers grow in their fields and how they grow them with an increasing emphasis on sustainable practices and produce that is free from pesticide residues. This is the future of farming, and Eden is in the forefront of the movement towards sustainable farming practices.

3 Supporting Our Employees and Partners

As always, we are working closely with our partners as they continue to maintain their business of supplying our products to growers in an increasing number of countries. Our team is reviewing the situation every day so that we can adapt to any changes that may be experienced by our partners and ensure the health and safety of their workers is paramount. Closer to home, Eden's team continue to avoid unnecessary travel and work remotely, part of the time. I want to thank our partners and, of course, the farmers who cannot carry out their work remotely and who are working hard each day to ensure that we have enough to eat now and in the future. Their work cannot stop, and we are grateful now more than ever for their efforts.

Dividend

There was no dividend paid or proposed for the six-month period. The Board continues to monitor its dividend policy.

Outlook

For the first time in 18 months, there are real signs of life and work returning to normal as the effects of mass vaccinations in developed countries come into effect. We are hopeful that a return to pre-pandemic levels of international travel and face to face business meetings will result in new revenue streams in the near future.

Despite these hopeful developments, we are conscious that the disruption to the agricultural industry is likely to remain for many months and years to come with key stakeholders impacted at all levels; from small-scale farmers, to regulators, to agricultural giants. We continue to be realistic about demand for high-value crop inputs, including Eden's products, and expect demand to remain dampened for the remainder of H2 2021, but we are hopeful that conditions will gradually pick up thereafter. Adverse weather has also had an impact in a number of countries, including France, where hard late frosts have significantly impacted grape production.

For Eden, although we are pleased to say that our daily operations remain predominantly unchanged by the pandemic, delays to regulatory processes globally continue to negatively affect the rate of product roll out and commercialisation in most territories. This continues to adversely affect Eden's sales growth. Nevertheless, in the past couple of months, we have already seen pick up in the pace of progress with new approvals for our products across Europe and North Africa and we are hopeful that this will continue as we move into the second half of the year.

In H2 2021, the Company expects to further establish itself and build on the initial sales achieved in the territories where it received approvals in 2021 so far, including Spain, Romania and Morocco.

The Company currently anticipates that the US EPA will approve the sale of Mevalone(R) and Cedroz(TM) in the United States in time for the 2022 growing season. However, there is little doubt that the current situation with COVID-19 and the consequential shutdown of certain government services, coupled with a fundamentally changed working dynamic, will have an adverse impact on operations at the regulator and, subsequently, the pace of approvals. Although the Company might expect to see some level of channel stocking, the overall levels of sales in 2021 still depend largely upon the timing of approvals relative to the growing season.

Whilst the various complexities of regulatory approvals, Brexit and a global pandemic have been challening, in addition to those always faced by any growth company, I am pleased with the progress that we are making and am confident that we will flourish. I am grateful to our new team, our partners and our shareholders for all of their support in helping us to realise Eden's full potential. We are on the right track with the right resources and capabilities, and we are focussed upon exciting opportunites that should reward our efforts and patience in the future.

Sean Smith, Chief Executive Officer

 
 Eden Research plc 
  Consolidated Statement of Comprehensive Income for the six months 
  ended 30 June 2021 
                                                                              Six 
                                                                           months 
                                                                            ended 
                                                                          30 June 
                                                            Six          2020 GBP         Year ended 
                                                         months         unaudited        31 December 
                                                       ended 30         (restated               2020 
                                                      June 2021             - see                GBP 
                                                  GBP unaudited          note 17)            audited 
 
 Revenue (note 16)                                      785,294           598,858          1,368,988 
                                                ---------------      ------------      ------------- 
 Cost of sales                                        (403,570)         (328,621)          (736,509) 
                                                ---------------      ------------      ------------- 
 Gross profit                                           381,724           270,237            632,479 
                                                ---------------      ------------      ------------- 
 Other operating income                                       -                 -              7,601 
 Administrative expenses                            (1,272,825)         (970,275)        (2,202,581) 
 Amortisation of intangible assets                    (316,536)         (257,446)          (552,809) 
 Share based payments (note 15)                       (544,028)          (47,088)          (120,380) 
                                                ---------------      ------------      ------------- 
 Operating loss                                     (1,751,665)       (1,004,572)        (2,235,690) 
                                                             82             5,540              5,725 
  Investment revenues                                  (18,320)           (2,826)           (24,000) 
   Finance costs                                       (54,847)          (13,463)             35,706 
   Foreign exchange gains/(losses)                            -                 -          (299,521) 
   Impairment of investment in associate 
   Share of loss of equity accounted 
    investee, net of tax (note 11)                      (9,199)           (7,241)           (30,352) 
                                                ---------------      ------------      ------------- 
 Loss before taxation                               (1,833,949)       (1,022,562)        (2,548,132) 
 Income tax income                                      261,020                 -            285,108 
                                                ---------------      ------------      ------------- 
 Loss for the financial period                      (1,572,929)       (1,022,562)        (2,263,024) 
 Attributable to: 
  Equity holder of the company                      (1,583,887)       (1,030,753)        (2,270,347) 
 Non-controlling interest                                10,958             8,191              7,323 
                                                ---------------      ------------      ------------- 
 Other Comprehensive Income net 
  of tax                                                      -                 -                  - 
 Total Comprehensive Income                         (1,572,929)       (1,022,562)        (2,263,024) 
 
 
   Earnings per share (note 8) 
 Basic                                                   (0.42)            (0.40)             (0.66) 
 Diluted                                                 (0.42)            (0.40)             (0.66) 
 

Eden Research plc - Consolidated Statement of Financial Position as at 30 June 2021

 
                                         30 June 
                                            2021    30 June 2020    31 Dec 2020 
                                                   GBP Unaudited 
                                                       (restated 
                                             GBP      - see note            GBP 
                                       unaudited              5)        audited 
 NON-CURRENT ASSETS 
 Intangible assets (note 10)           7,315,305       5,618,764      6,729,483 
 Property, plant & equipment 
  (note 13)                              259,484               -        188,065 
 Right of Use assets (note 14            373,968         360,421        394,610 
 Investments in equity accounted 
  investee (note 12)                     410,666         742,497        419,865 
 
 
                                       8,359,423       6,721,682      7,732,023 
 CURRENT ASSETS 
 Inventories                             264,797         355,582        224,422 
 Trade and other receivables           1,495,898       1,675,253      1,396,308 
 Taxation                                546,128         268,777        285,108 
 Cash and cash equivalents             5,748,840       8,663,209      7,286,503 
 
 
                                       7,770,555      10,962,821      9,192,341 
 
 CURRENT LIABILITIES 
 Trade and other payables              1,705,285       1,095,122      1,454,955 
 Lease liabilities                        94,415          58,065         84,350 
 
 
                                       1,924,912       1,153,187      1,539,305 
 
 
 NET CURRENT ASSETS                    5,845,643       9,809,634      7,653,036 
 
 
 NON-CURRENT LIABILITIES 
  Trade and other payables               125,212          99,008        125,212 
 Lease liabilities                       305,016         309,985        330,898 
 
 
                                         430,228         408,993        456,110 
 
 
 NET ASSETS                           13,900,050      16,122,323     14,928,949 
 
 EQUITY 
 Called up share capital               3,803,402       3,803,402      3,803,402 
 Share premium account                39,308,529      39,308,529     39,308,529 
 Warrant reserve                         876,764         382,827        429,915 
 Merger reserve                       10,209,673      10,209,673     10,209,673 
 Retained earnings                  (40,328,965)    (37,598,491)   (38,842,259) 
 Non-controlling interest                 30,647          16,383         19,689 
 
 
 TOTAL EQUITY                         13,900,050      16,122,323     14,928,949 
 
 

Eden Research plc

Company Statement of Financial Position as at 30 June 2021

 
                                    30 June 2021    30 June 2020    31 Dec 2020 
                                                   GBP Unaudited 
                                                       (restated 
                                             GBP      - see note            GBP 
                                       unaudited              5)        audited 
 NON-CURRENT ASSETS 
 Intangible assets (note 10)           7,202,470       5,486,021      6,610,014 
 Property, plant & equipment 
  (note 13)                              259,484               -        188,065 
 Right of Use assets (note 
  14)                                    373,968         360,421        394,610 
 Investments in equity accounted 
  investee (note 12)                     410,666         742,497        419,865 
 
 
                                       8,246,588       6,588,939      7,612,554 
 CURRENT ASSETS 
 Inventories                             264,797         355,582        224,422 
 Trade and other receivables           1,258,790       1,675,253      1,444,308 
 Taxation                                546,128         268,777        285,108 
 Cash and cash equivalents             5,748,840       8,663,209      7,286,503 
 
 
                                       7,818,555      10,962,821      9,240,341 
 
 CURRENT LIABILITIES 
 Trade and other payables              1,653,743       1,003,493      1,374,862 
 Lease liabilities                        94,415          58,065         84,350 
 
 
                                       1,748,158       1,061,558      1,459,212 
 
 
 NET CURRENT ASSETS                    6,070,397       9,901,263      7,781,129 
 
 
 NON-CURRENT LIABILITIES 
  Trade and other payables               125,212          99,008        125,212 
 Lease liabilities                       305,016         309,985        330,898 
 
 
                                         430,228         408,993        456,110 
 
 
 NET ASSETS                           13,886,757      16,081,209     14,937,573 
 
 EQUITY 
 Called up share capital               3,803,402       3,803,402      3,803,402 
 Share premium account                39,308,529      39,308,529     39,308,529 
 Warrant reserve                         876,764         382,827        429,915 
 Merger reserve                       10,209,673      10,209,673     10,209,673 
 Retained earnings                  (40,311,611)    (37,623,222)   (38,813,946) 
 
 
 TOTAL EQUITY                         13,886,757      16,081,209     14,935,573 
 
 

Eden Research plc - Consolidated Statement of Changes in Equity as at 30 June 2021

 
                                                                                         Non-control-ling 
                                                                                                 interest 
                             Share        Share       Merger    Warrant       Retained 
                           capital      premium      reserve    reserve       earnings                            Total 
                               GBP          GBP          GBP        GBP            GBP                GBP           GBP 
 Six months ended 
  30 June 2021 
 
 Balance at 1 
  January 2021 
  (audited)              3,803,402   39,308,529   10,209,673    429,915   (38,842,259)             19,689    14,928,949 
 
 Loss and total 
  comprehensive 
  income                         -            -            -          -    (1,583,887)             10,958   (1,572,929) 
 
   Transactions 
   with owners 
 - Share issue                   -            -            -          -              -                  -             - 
  - Options granted              -            -            -    544,028              -                  -       544,028 
 - Options 
  exercised/lapsed               -            -            -   (97,179)         97,179                  -             - 
                      ------------  -----------  -----------  ---------  -------------  -----------------  ------------ 
 
 Transactions 
  with owners                    -            -            -    446,849         97,179                  -       544,028 
                      ------------  -----------  -----------  ---------  -------------  -----------------  ------------ 
 
 Balance at 30 
  June 2021 
  (unaudited)            3,803,402   39,308,529   10,209,673    876,764   (40,328,965)             30,647    13,900,050 
                      ------------  -----------  -----------  ---------  -------------  -----------------  ------------ 
 
 Six months ended 
  30 June 2020 
 
 Balance at 1 
  January 2020 
  (audited)              2,071,893   31,289,915   10,209,673    335,739   (36,571,912)             12,366     7,347,674 
 
 Loss and total 
  comprehensive 
  income                         -            -            -          -    (1,030,753)              8,191   (1,022,562) 
 
   Transactions 
   with owners 
 - Share issue           1,731,509    8,018,614            -          -              -                  -     9,750,123 
  - Options granted              -            -            -     47,088              -                  -        47,088 
 - Options                       -            -            -          -              -                  -             - 
 exercised/lapsed 
                      ------------  -----------  -----------  ---------  -------------  -----------------  ------------ 
 
 Transactions 
  with owners            1,731,509    8,018,614            -     47,088              -                  -     9,797,211 
                      ------------  -----------  -----------  ---------  -------------  -----------------  ------------ 
 
 Balance at 30 
  June 2020 
  (unaudited)            3,803,402   39,308,529   10,209,673    382,827   (37,598,491)             20,557    16,122,323 
                      ------------  -----------  -----------  ---------  -------------  -----------------  ------------ 
 
 
 

Eden Research plc

Company Statement of Changes in Equity as at 30 June 2021

 
                                     Share        Share       Merger    Warrant       Retained 
                                   capital      premium      reserve    reserve       earnings             Total 
                                       GBP          GBP          GBP        GBP            GBP               GBP 
 Six months ended 30 
  June 2021 
 
 Balance at 1 January 
  2021 (audited)                 3,803,402   39,308,529   10,209,673    429,915   (38,813,946)        14,937,573 
 
 Loss and total comprehensive 
  income                                 -            -            -          -    (1,594,844)       (1,594,844) 
 
   Transactions with owners 
 - Share issue                           -            -            -          -              -                 - 
  - Options granted                      -            -            -    544,028              -           544,028 
 - Options exercised/lapsed              -            -            -   (97,179)         97,179                 - 
                                ----------  -----------  -----------  ---------  -------------      ------------ 
 
 Transactions with owners                -            -            -    446,849         97,179           544,028 
                                ----------  -----------  -----------  ---------  -------------      ------------ 
 
 Balance at 30 June 
  2021 (unaudited)               3,803,402   39,308,529   10,209,673    876,764   (40,311,611)        13,886,757 
                                ----------  -----------  -----------  ---------  -------------      ------------ 
 
 Six months ended 30 
  June 2020 
 
 Balance at 1 January 
  2020 (audited)                 2,071,893   31,289,915   10,209,673    335,739   (36,584,277)         7,322,943 
 
 Loss and total comprehensive 
  income                                 -            -            -          -    (1,038,945)       (1,038,945) 
 
   Transactions with owners 
 - Share issue                   1,731,509    8,018,614            -          -              -         9,750,123 
  - Options granted                      -            -            -     47,088              -            47,088 
 - Options exercised/lapsed              -            -            -          -              -                 - 
                                ----------  -----------  -----------  ---------  -------------      ------------ 
 
 Transactions with owners        1,731,509    8,018,614            -     47,088              -         9,797,211 
                                ----------  -----------  -----------  ---------  -------------      ------------ 
 
 Balance at 30 June 
  2020 (unaudited)               3,803,402   39,308,529   10,209,673    382,827   (37,623,222)        16,081,209 
                                ----------  -----------  -----------  ---------  -------------      ------------ 
 
 

Eden Research plc - Consolidated Statement of cash flows for the six months ended 30 June 2021

 
 
                                             Six months     Six months 
                                                                          Year ended 
                                                  ended          ended            31 
                                                30 June                     December 
                                                   2021   30 June 2020          2020 
                                                    GBP            GBP           GBP 
                                                             unaudited 
                                                             (restated 
                                                            - see note 
                                              unaudited             5)       audited 
 
 Cash flows from operating activities 
 
 Cash outflow from operations 
  (note 5)                                    (420,027)      (975,203)   (1,265,812) 
 Interest paid                                        -          (330)         (450) 
 Interest on lease liabilities                 (18,320)        (2,826)      (23,550) 
 Tax refunded                                         -              -       268,777 
 
 Net cash used in operating 
  activities                                  (438,347)      (978,359)   (1,021,035) 
 
 Cash flows from investing activities 
 
 Purchase of intangible assets                (902,356)      (295,210)   (1,701,287) 
 Purchase of property, plant 
  and equipment                                (98,458)              -     (200,758) 
 Capitalisation of lease                              -      (309,710)             - 
 Interest received                                   82          5,540         5,725 
                                           ------------  -------------  ------------ 
 
 Net cash used in investing 
  activities                                (1,000,732)      (599,380)   (1,896,320) 
                                           ------------  -------------  ------------ 
 
 Cash flows from financing activities 
 
 Gross proceeds from issue of 
  shares                                              -     10,389,053    10,389,053 
 Expenses incurred from issue 
  of shares                                           -      (638,930)     (638,930) 
 Payment of lease liabilities                  (43,737)       (11,159)      (44,457) 
 
 Net cash from financing activities            (43,737)      9,738,964     9,705,666 
                                           ------------  -------------  ------------ 
 
 (Decrease)/increase in cash 
  and cash equivalents                      (1,482,816)      8,161,225     6,788,311 
 
 Cash and cash equivalents at 
   beginning of period                        7,286,503        501,984       501,984 
    Effect of exchange rate fluctuations 
    on cash held                               (54,847)              -       (3,792) 
                                           ------------  -------------  ------------ 
 
 Cash and cash equivalents at 
   end of period                              5,748,840      8,663,209     7,286,503 
                                           ============  =============  ============ 
 
 

Cash and cash equivalents comprise bank account balances.

Eden Research plc - Company Statement of cash flows for the six months ended 30 June 2021

 
 
                                             Six months    Six months 
                                                                         Year ended 
                                                  ended         ended            31 
                                                30 June       30 June      December 
                                                   2021          2020          2020 
                                                    GBP           GBP           GBP 
                                                            Unaudited 
                                                            (restated 
                                                           - see note 
                                              unaudited            5)       audited 
 
 Cash flows from operating activities 
 
 Cash outflow from operations 
  (note 5)                                    (420,027)     (975,203)   (1,265,812) 
 Interest paid                                        -         (330)         (450) 
 Interest on lease liabilities                 (18,320)       (2,826)      (23,550) 
 Tax refunded                                         -             -       268,777 
 
 Net cash used in operating 
  activities                                  (438,347)     (978,359)   (1,021,035) 
 
 Cash flows from investing activities 
 
 Purchase of intangible assets                (902,356)     (295,210)   (1,701,287) 
 Purchase of property, plant 
  and equipment                                (98,458)             -     (200,758) 
 Capitalisation of lease                              -     (309,710)             - 
 Interest received                                   82         5,540         5,725 
                                           ------------  ------------  ------------ 
 
 Net cash used in investing 
  activities                                (1,000,732)     (599,380)   (1,896,320) 
                                           ------------  ------------  ------------ 
 
 Cash flows from financing activities 
 
 Gross proceeds from issue of 
  shares                                              -    10,389,053    10,389,053 
 Expenses incurred from issue 
  of shares                                           -     (638,930)     (638,930) 
 Payment of lease liabilities                  (43,737)      (11,159)      (44,457) 
 
 Net cash from financing activities            (43,737)     9,738,964     9,705,666 
                                           ------------  ------------  ------------ 
 
 (Decrease)/increase in cash 
  and cash equivalents                      (1,482,816)     8,161,225     6,788,311 
 
 Cash and cash equivalents at 
   beginning of period                        7,286,503       501,984       501,984 
    Effect of exchange rate fluctuations 
    on cash held                               (54,847)             -       (3,792) 
                                           ------------  ------------  ------------ 
 
 Cash and cash equivalents at 
   end of period                              5,748,840     8,663,209     7,286,503 
                                           ============  ============  ============ 
 
 

Cash and cash equivalents comprise bank account balances.

Notes to the Interim Results

   1.         Reporting Entity 

Eden Research plc is a public limited company incorporated in the United Kingdom under the Companies Act 2006. The Company is domiciled in the United Kingdom and is quoted on the Alternative Investment Market (AIM).

These condensed consolidated interim financial statements ('Interims') as at and for the six months ended 30 June 2021 comprise the Company and its Subsidiaries (together referred to as 'the Group'). The principal activities of the Group are the development and commercialisation of encapsulation, terpenes and environmentally friendly technologies to provide naturally occurring solutions for the global agrochemicals, animal health, and consumer product industries.

   2.         Basis of Preparation 

These interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting', and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 31 December 2020 which were approved by the Board of Directors on 29 June 2021 and have been delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

The interim financial statements do not include all of the information required for a complete set of IFRS financial statements and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.

Comparative information in the interim financial statements as at and for the year ended 31 December 2020 has been taken from the published audited financial statements as at and for the year ended 31 December 2020. All other periods presented are unaudited.

The Company's auditor in accordance with ISRE 2410 has reviewed the financial information contained in these interim financial statements. This review does not constitute an audit.

The Board of Directors and the Audit Committee approved the interim financial statements on 27 September 2021.

   3.         Going Concern 

The directors have, at the time of approving the Interim financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for at least 12 months from the approval of the financial statements. Thus, the Interim financial statements have been prepared on a going concern basis which contemplates the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Group has reported a loss for the first half of the year after taxation of GBP1,572,929 (2020: GBP1,022,562). Net current assets at that date amounted to GBP5,845,643 (2020: GBP7,653,036). Cash at that date amounted to GBP5,748,840 (2020: GBP8,663,209). The Group is reliant on its existing cash balance to fund its working capital.

The Directors have prepared budgets and projected cash flow forecasts, based on forecast sales provided by Eden's distributors where available, for a period of at least 12 months from the date of approval of the Interims and they consider that the Company will be able to operate with the cash resources that are available to it for this period.

The forecasts adopted include only revenue derived from existing contracts. They do not include potential upside from on-going discussions and negotiations with other parties not yet contracted, as well as other 'blue sky' opportunities.

The impact of COVID has been considered in the forecasts. The Group has not been significantly impacted by the pandemic although it has led to some delays in product development processes and limited promotional activity. The forecasts reflect this with the development expenditure timing based on the latest experience with regulatory authorities and sales volumes on the latest distributors' information which reflects their post-COVID demand.

In addition, the Group has relatively low fixed running costs and, while mitigating actions are not forecast to be required to support the going concern basis, the Directors have previously demonstrated its ability to delay certain other costs, such as Research and Development expenditure, in the event of unforeseen cash constraints and are willing and able to delay costs in the forecast period should the need arise.

The Directors have also considered a scenario whereby the Company receives no revenue during the forecast period. Under this scenario, a positive cash balance would be maintained over that period.

Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis

   4.         Adoption of new and revised standards and changes in accounting policies 

These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2020, except for the application of the following standard at 1 January 2021:

-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform (published on 6 January 2021)

The adoption of this new standard would not result in any material changes to the financial statements.

The accounting policies have been applied consistently for the purposes of preparation of these condensed interim financial statements.

   5.         Changes in presentation of the financial statements 

Directors continue to assess the clarity of the financial statements and the need for changes in presentation to enable and assist understanding of users of the accounts as the operations of the Group continue to evolve.

Following this consideration, the following changes have been made in the year ended 31 December 2020, including changes in comparative figures in the 2020 Annual Report and Accounts, to enhance presentation:

- Right-of-use Assets have been presented on the face of the balance sheet (2019 and H1, 2020: as part of Property, plant and equipment). This reflects the increased quantum of this balance, following the move to the new office

- Finance costs have been presented separately from the foreign exchange gains/losses in the consolidated income statement, consolidated and company cash flow statements and note 33 of the 2020 Annual Report and Accounts, reflecting the increase in interest payable, coming chiefly as a result of the new leases.

- Exchange differences on working capital balances have been removed as an adjustment to profit in arriving at Cash absorbed by operations in note 33 of the 2020 Annual Report and Accounts and removed as an adjustment to Cash absorbed by operations in arriving at Net cash outflow from operating activities on the face of the consolidated and company cash flow statements. There is no impact on Net cash outflow from operating activities. This is a best practice improvement, considered by the Directors to result in a more appropriate presentation.

- Change in the EPS calculation to only include profit/loss attributable to the shareholders (which represents a correction of an immaterial error in the prior year).

The above changes have had the following effect on the comparative (2019) figures in the 2020 Annual Report and Accounts and the H1, 2020 figures, which are considered to be immaterial:

- Right-of-use Assets of GBP61,750 (H1, 2020: GBP360,421) have been separately presented on the face of the consolidated and company balance sheet.

- Finance costs of GBP8,397 (H1, 2020: GBP2,826) have been presented separately from the foreign exchange losses of GBP73,166 (H1, 2020: GBP13,436).

- Exchange differences on working capital balances of GBP44,475 (H1, 2020: GBPnil) have been removed as an equal and opposite adjusting item in arriving at Net cash outflow from operating activities.

- EPS has been restated from (0.54p) to (0.55p) for the year ended 31 December 2019 (H1, 2020: no change).

   6.         Principal risks and uncertainties 

The Company's prime risk is the on-going commercialisation of its intellectual property, which involves testing of the Company's products, obtaining regulatory approvals and reaching a commercially beneficial arrangement for each product to be taken to market. This is measured by comparing actual results with forecasts that have been agreed by the Company's Board of Directors.

The Company's credit risk is primarily attributable to its trade receivables. Credit risk is managed by running credit checks on customers and by monitoring payments against contractual agreements.

The Company monitors cash flow as part of its day to day control procedures. The Board considers cash flow projections at its meetings and ensures that the Company has sufficient cash resources to meet its on-going cash flow requirements.

Due to the nature of the business, there is inherent risk of infringement of Eden's intellectual property rights by third parties. The risk of infringement is managed by taking (and acting on) the relevant legal advice as and when required.

There is also inherent uncertainty surrounding the regulatory approval of products in terms of both timing and outcome. This risk is managed by retaining appropriately experienced staff and contracting with expert consultants as needed.

   7.         COVID-19 

The Board has seen some impact on the operations of the business with the restrictions on employees' ability to work at the Company's offices and laboratory facilities in addition to the restrictions on travel which make logistics in terms of conducting field trials and attending marketing events problematic.

Commercially, there has been some negative impact on the sales of our products due to the reduction in demand for wine grapes, a knock-on effect of the substantive closure of the hospitality industry.

The Company has not seen a significant change, thus far, on its toll manufacturing operations.

Regulatory authorities are working at reduced capacity, which is expected to impact on-going product approval applications that we have around the world, though it is difficult at this stage to assess what, if any, commercial and financial impact there may be.

The Company has been careful to manage its cost-base and cash position given the general uncertainties that currently exist due to the global COVID-19 pandemic.

   8.         Group profit/(loss) per share 
 
                                           Six months         Six months     Year ended 
                                                ended              ended    31 December 
                                              30 June       30 June 2020           2020 
                                                 2021    Pence unaudited          Pence 
                                      Pence unaudited                           audited 
 (Loss)/profit per ordinary share 
  (pence) - basic                              (0.42)             (0.40)         (0.66) 
 (Loss)/profit per ordinary share 
  (pence) - diluted                            (0.42)             (0.40)         (0.66) 
                                    =================  =================  ============= 
 

Loss per share - basic has been calculated on the net basis on the loss after tax of GBP1,572,929 (30 June 2020: GBP1,022,562, 31 December 2020: GBP2,263,024) using the weighted average number of ordinary shares in issue of 380,340,229 (30 June 2020: 255,812,826, 31 December 2020: 344,629,577).

Loss per share - diluted has been calculated on the net basis on the loss after tax of GBP1,572,929 (30 June 2020: GBP1,022,562, 31 December 2020: GBP2,263,024) using the weighted average number of ordinary shares in issue of 380,340,229 (30 June 2020: 255,812,826, 31 December 2020: 344,629,577).

   9.          Reconciliation of loss before income tax to cash used by operations - Group 
 
                                           Six months    Six months 
                                                ended         ended      Year ended 
                                              30 June       30 June     31 December 
                                                 2021          2020            2020 
                                                  GBP           GBP             GBP 
                                            unaudited     Unaudited         audited 
                                                          (restated 
                                                         - see note 
                                                                 5) 
 (Loss)/profit after tax                  (1,572,929)   (1,022,562)     (2,263,024) 
 
 Adjustments for: 
 Share of associate's losses                    9,199         7,241          30,352 
 Amortisation charges                         316,536       257,446         552,809 
 Impairment of investment in associate              -             -         299,521 
 Share based payment charge                   544,028        47,088         120,380 
 Depreciation of property, plant 
  and equipment and right of use 
  assets                                       75,601        11,039          70,039 
 Finance costs                                 18,320         3,156          24,000 
 Foreign exchange currency losses              54,847        13,133           3,792 
 Finance income                                  (82)       (5,540)         (5,725) 
 Tax credit                                 (261,020)             -       (285,108) 
 
 Movements in working capital: 
 (Decrease)/increase in trade 
  and other receivables                       185,518      (42,161)         236,784 
 Increase/(decrease) in trade 
  and other payables                          250,330        43,116         106,367 
 Decrease/(increase) in stock                (40,375)     (287,159)       (155,999) 
                                         ------------  ------------  -------------- 
 
 Cash used by operations                    (420,027)     (975,203)     (1,265,812) 
                                         ============  ============  ============== 
 

Reconciliation of loss before income tax to cash used by operations - Company

 
                                           Six months    Six months 
                                                ended         ended      Year ended 
                                              30 June       30 June     31 December 
                                                 2021          2020            2020 
                                                  GBP           GBP             GBP 
                                            unaudited     Unaudited         audited 
                                                          (restated 
                                                         - see note 
                                                                 5) 
 (Loss)/profit after tax                  (1,594,844)   (1,038,945)     (2,229,669) 
 
 Adjustments for: 
 Share of associate's losses                    9,199         7,241          30,352 
 Amortisation charges                         309,900       257,446         539,535 
 Impairment of investment in associate              -             -         299,521 
 Share based payment charge                   544,088        47,088         120,380 
 Depreciation of property, plant 
  and equipment and right of use 
  assets                                       75,601        11,039          70,039 
 Finance costs                                 18,320         3,156          24,000 
 Foreign exchange currency losses              54,847        13,133           3,792 
 Finance income                                  (82)       (5,540)         (5,725) 
 Tax refunded                               (261,020)             -       (285,108) 
 
 Movements in working capital: 
 (Decrease)/increase in trade 
  and other receivables                       185,518      (42,161)         188,784 
 Increase/(decrease) in trade 
  and other payables                          278,881        59,499         134,286 
 Decrease/(increase) in stock                (40,375)     (287,159)       (155,999) 
                                         ------------  ------------  -------------- 
 
 Cash used by operations                    (420,027)     (975,203)     (1,265,812) 
                                         ============  ============  ============== 
 
   10.        Intangible assets - Group 
 
                          Intellectual          Licences   Development        Total 
                              property    and trademarks         Costs 
                                   GBP               GBP           GBP          GBP 
 COST 
 At 1 January 2020           9,181,324           447,351     5,059,621   14,688,296 
 Additions                           -             1,545       293,665      295,210 
                         -------------  ----------------  ------------  ----------- 
 
 At 30 June 2020             9,181,324           448,896     5,353,286   14,983,506 
 Additions                     134,957                 -     1,271,120    1,406,077 
                         -------------  ----------------  ------------  ----------- 
 
 At 31 December 2020         9,316,281           448,896     6,624,406   16,389,583 
 Additions                           -                 -       902,356      902,356 
                         -------------  ----------------  ------------  ----------- 
 
 At 30 June 2021             9,316,281           448,896     7,526,762   17,291,939 
                         =============  ================  ============  =========== 
 
 AMORTISATION 
 
 At 1 January 2020           6,490,209           437,751     2,179,329    9,107,289 
 Charge for the period         106,596            11,145       139,705      257,446 
                         -------------  ----------------  ------------  ----------- 
 
 At 30 June 2020             6,596,805           448,896     2,319,034    9,364,735 
 Charge for the period         119,876                 -       175,487      295,363 
                         -------------  ----------------  ------------  ----------- 
 
 At 31 December 2020         6,716,681           448,896     2,494,521    9,660,098 
 Charge for the period         109,974                 -       206,562      316,536 
                         -------------  ----------------  ------------  ----------- 
 
 At 30 June 2021             6,826,655           448,896     2,701,083    9,976,634 
                         =============  ================  ============  =========== 
 
 CARRYING AMOUNT 
 
 At 30 June 2021             2,489,626                 -     4,825,679    7,315,305 
                         =============  ================  ============  =========== 
 
 At 31 December 2020         2,599,600                 -     4,129,883    6,729,483 
                         =============  ================  ============  =========== 
 
 At 30 June 2020             2,584,514                 -     3,034,250    5,618,764 
                         =============  ================  ============  =========== 
 

Intangible assets - Company

 
                      Intellectual          Licences   Development        Total 
                          property    and trademarks         Costs 
                               GBP               GBP           GBP          GBP 
 COST 
 At 1 January 2020       9,048,581           447,351     5,059,621   14,555,553 
 Additions                       -             1,545       293,665      295,210 
                     -------------  ----------------  ------------  ----------- 
 
 At 30 June 2020         9,048,581           448,896     5,353,286   14,849,213 
 Additions                 134,957                 -     1,271,120    1,406,077 
                     -------------  ----------------  ------------  ----------- 
 
 At 31 December 
  2020                   9,183,538           448,896     6,624,406   16,256,840 
 Additions                       -                 -       902,356      902,356 
                     -------------  ----------------  ------------  ----------- 
 
 At 30 June 2021         9,183,538           448,896     7,526,762   17,159,196 
                     =============  ================  ============  =========== 
 
 AMORTISATION 
 
 At 1 January 2020       6,490,209           437,751     2,179,331    9,107,291 
 Charge for the 
  period                   106,596            11,145       139,705      257,446 
                     -------------  ----------------  ------------  ----------- 
 
 At 30 June 2020         6,596,805           448,896     2,319,036    9,364,737 
 Charge for the 
  period                   106,602                 -       175,487      282,089 
                     -------------  ----------------  ------------  ----------- 
 
 At 31 December 
  2020                   6,703,407           448,896     2,494,523    9,646,826 
 Charge for the 
  period                   103,338                 -       206,562      309,900 
                     -------------  ----------------  ------------  ----------- 
 
 At 30 June 2021         6,806,745           448,896     2,701,085    9,956,726 
                     =============  ================  ============  =========== 
 
 CARRYING AMOUNT 
 
 At 30 June 2021         2,376,793                 -     4,825,677    7,202,470 
                     =============  ================  ============  =========== 
 
 At 31 December 
  2020                   2,480,131                 -     4,129,883    6,610,014 
                     =============  ================  ============  =========== 
 
 At 30 June 2020         2,451,771                 -     3,034,250    5,486,021 
                     =============  ================  ============  =========== 
 
   11.        Investment in equity accounted investee 
 
                                            Six months     Six months    Year ended 
                                               ended          ended 
                                           30 June 2021   30 June 2020   31 December 
                                                                             2020 
                                             GBP'000        GBP'000        GBP'000 
                                                           unaudited 
                                                            (restated 
                                                           - see note 
                                            unaudited          13)         audited 
 
 Percentage ownership interest 
 and proportion of voting rights                 29.90%         29.90%        29.90% 
 
                                                    GBP            GBP           GBP 
 Non-current assets                             440,601        533,703       502,954 
 Current assets                                 333,532        241,328       237,697 
 Non-current liabilities                       (98,806)       (98,806)      (98,806) 
 Current liabilities                          (253,558)      (195,115)     (213,670) 
 
 Net assets (100%)                              421,769        481,111       428,175 
 
 Company's share of net assets                  149,437        167,179       151,352 
 Separable intangible assets                    148,101        162,669       155,385 
 Goodwill                                       412,649        412,649       412,649 
 Impairment of investment in 
  associate                                   (299,521)              -     (299,521) 
 
 Carrying amount of interest 
  in associate                                  410,666        742,497       419,865 
 
 
 Revenue                                        270,970        147,443       279,185 
 Profit/(loss) from continuing 
  operations                                    (6,406)            145      (52,790) 
 Post tax profit from discontinued                    -              -             - 
  operations 
 100% of total post-tax profits                 (6,406)            145      (52,790) 
 29.9% of total post-tax profits                (1,915)             43      (15,784) 
 Amortisation of separable intangible 
  assets                                        (7,284)        (7,284)      (14,568) 
 
 Company's share of loss including 
  amortisation of separable intangible 
  asset                                         (9,199)        (7,241)      (30,352) 
 
   12.        Subsidiaries 
 
Details of the company's subsidiaries at 30 June 2021 are as follows: 
 
Name of undertaking   Country of       Ownership interest  Voting power  Nature of business 
                       incorporation    (%)                 held (%) 
TerpeneTech           Republic of                                        Sale of biocide 
 Limited               Ireland         50.00               50.00          products 
 
 
TerpeneTech Limited ("TerpeneTech (Ireland))", whose registered office is 
 108 Q House, Furze Road, Sandyford, Dublin, Ireland, was incorporated on 
 15 January 2019 and is jointly owned by both Eden Research Plc and TerpeneTech 
 (UK), the company's associate. 
 
 Eden has the right to appoint a director as chairperson who will have a 
 casting vote, enabling the Group to exercise control over the Board of Directors 
 in the absence of an equivalent right for TerpeneTech (UK). Eden owns 500 
 ordinary shares in TerpeneTech (Ireland). 
 

Non-controlling interests

The following table summarises the information relating to the Group's subsidiary with material non-controlling interest, before intra-group eliminations:

 
                                            30 June      30 June      31 Dec 
                                              2021         2020        2020 
                                              GBP          GBP         GBP 
                                                        unaudited 
                                                        (restated 
                                                        - see note 
                                           unaudited       13)       audited 
 
 NCI percentage                               50%          50%         50% 
 
 Non-current assets                          112,835       132,743    119,471 
 Current assets                                    -             -          - 
 Non-current liabilities                           -             -          - 
 Current liabilities                        (55,542)      (91,629)   (80,093) 
 
 Net assets                                   61,293        41,114     39,378 
                                          ----------  ------------  --------- 
 
 Carrying amount of NCI                                          -          - 
 
  Revenue                                     28,551        16,383     27,919 
  Profit/(loss)                               21,915        16,383     14,647 
  OCI                                              -             -          - 
 Total comprehensive income                   21,915        16,383     14,647 
                                          ----------  ------------  --------- 
 
 Cash flows from operating activities              -             -          - 
 Cash flows from investment activities             -             -          - 
 Cash flows from financing activities              -             -          - 
 Net increase/(decrease) in cash 
  and cash equivalents                             -             -          - 
                                          ----------  ------------  --------- 
 
 Dividends paid to non-controlling 
  interests                                        -             -          - 
                                          ----------  ------------  --------- 
 
   13.        Property, plant and equipment - Consolidated and Company 
 
                                          Land and 
                                         buildings             Total 
                                               GBP               GBP 
 COST 
 At 1 January 2020                               -                 - 
 Additions                                       -                 - 
                                       -----------        ---------- 
 
 At 30 June 2020                                 -                 - 
 Additions - owned                         200,758           200,758 
                                       -----------        ---------- 
 
 At 31 December 2020                       200,758           200,758 
 Additions                                  98,458            98,458 
                                       -----------        ---------- 
 
 At 30 June 2021                           299,216           299,216 
                                       ===========        ========== 
 
 AMORTISATION 
 
 At 1 January 2020                               -                 - 
 Charge for the period                           -                 - 
                                       -----------        ---------- 
 
 At 30 June 2020                                 -                 - 
 Charge for the period                      12,693            12,693 
                                       -----------        ---------- 
 
 At 31 December 2020                        12,693            12,693 
 Charge for the period                      27,039            27,039 
                                       -----------        ---------- 
 
 At 30 June 2021                            39,732            39,732 
                                       ===========        ========== 
 
 CARRYING AMOUNT 
 
 At 30 June 2021                           259,484           259,484 
                                       ===========        ========== 
 
 At 31 December 2020                       188,065           188,065 
                                       ===========        ========== 
 
 At 30 June 2020                                 -                 - 
                                       ===========        ========== 
 
 
   14.        Right of use assets - Consolidated and Company 
 
                            Land and 
                           buildings     Vehicles           Total 
                                 GBP          GBP             GBP 
 COST 
 At 1 January 2020            78,668       35,865         114,533 
 Additions                   309,710            -         309,710 
                         -----------  -----------      ---------- 
 
 At 30 June 2020             388,378       35,865         424,243 
 Additions                   107,811            -         107,811 
  Disposals                 (78,668)            -        (78,668) 
                         -----------  -----------      ---------- 
 
 At 31 December 2020         417,521       35,865         453,386 
 Additions                         -       27,920          27,920 
                         -----------  -----------      ---------- 
 
 At 30 June 2021             417,521       63,785         481,306 
                         ===========  ===========      ========== 
 
 AMORTISATION 
 
 At 1 January 2020            39,334       13,449          52,783 
 Charge for the period         6,555        4,484          11,039 
                         -----------  -----------      ---------- 
 
 At 30 June 2020              45,889       17,933          63,822 
 Charge for the period        41,825        4,482          46,307 
 Charge for the period      (51,353)            -        (51,353) 
 
 At 31 December 2020          36,361       22,415          58,776 
 Charge for the period        41,752        6,810          48,562 
                         -----------  -----------      ---------- 
 
 At 30 June 2021              78,113       29,225         107,338 
                         ===========  ===========      ========== 
 
 CARRYING AMOUNT 
 
 At 30 June 2021             339,408       34,560         373,968 
                         ===========  ===========      ========== 
 
 At 31 December 2020         381,160       13,450         394,610 
                         ===========  ===========      ========== 
 
 At 30 June 2020             342,489       17,932         360,421 
                         ===========  ===========      ========== 
 
   15.            Share based payments 

Share Options

Unapproved option scheme

Eden Research plc operates an unapproved option scheme for executive directors, senior management and certain employees.

 
                                Six months ended 30 June        Six months ended 30 
                                           2021                      June 2020 
 
                                    Weighted                      Weighted 
                                     average                       average 
                                    exercise                      exercise 
                               price (pence)        Number   price (pence)      Number 
 
 Outstanding at the 
  beginning 
 of the period                            13     1,050,000              13   1,050,000 
 Granted during the 
  period                                   -             -               -           - 
 Exercised during the 
  period                                   -             -               -           - 
 Lapsed during the period                 13   (1,050,000)               -           - 
 
 
                                           -             -              13   1,050,000 
 
 

The exercise price of options outstanding at the end of the period was nil p (30 June 2020: 63p) and their weighted average contractual life was nil years (30 June 2020: 0.5 years). None of the options have vesting conditions.

The share-based payment charge for the period was GBPnil (30 June 2020: GBP47,088).

Long-Term Incentive Plan ("LTIP")

'Nil-priced' options

Until April 2021, Eden operated a 'Nil-priced', approved option scheme for executive directors, senior management and certain employees under a LTIP which it adopted in 2017, in respect of the following options:

 
                        2015 Award   2016 Award   2017 Award   2018 Award 
 Grant date             28/09/2017   28/09/2017   28/06/2019   28/06/2019 
                       -----------  -----------  -----------  ----------- 
 Number of awards       1,908,680    2,108,000    2,868,889    3,022,222 
                       -----------  -----------  -----------  ----------- 
 Share price            0.125        0.125        0.115        0.115 
                       -----------  -----------  -----------  ----------- 
 Exercise price         GBPnil       GBPnil       GBPnil       GBPnil 
                       -----------  -----------  -----------  ----------- 
 Expected dividend      -%           -%           -%           -% 
  yield 
                       -----------  -----------  -----------  ----------- 
 Expected volatility    73.20%       73.20%       50.82%       50.82% 
                       -----------  -----------  -----------  ----------- 
 Risk free rate         0.80%        0.80%        0.614%       0.614% 
                       -----------  -----------  -----------  ----------- 
 Vesting period         2 years      3 years      2 years      3 years 
                       -----------  -----------  -----------  ----------- 
 Expected Life                       10 years     2 years      3 years 
  (from date 
  of grant) 
                       -----------  -----------  -----------  ----------- 
 

The above options were cancelled on 31 March 2021 and the LTIP was replaced with a new one at that time, details of which are set out below.

The share-based payment charge for the year ended 31 December 2017 and subsequent years, up to the year ended 31 December 2020, after which the LTIP was replaced with a new one on 31 March 2021, is set out as follows:

 
 Financial year ended 31 December    Share based payment charge GBP 
 2017                                                        27,210 
                                    ------------------------------- 
 2018                                                        85,370 
                                    ------------------------------- 
 2019                                                       110,743 
                                    ------------------------------- 
 2020                                                        94,176 
                                    ------------------------------- 
 

For the 'Nil-priced' options which were granted under the Company's previous LTIP, Monte Carlo techniques were used to simulate future share price movements of the Company to assess the likelihood of the performance criteria being met and the fair value of the awards upon vesting. The modelling calculates many scenarios in order to estimate the overall fair value based on the average value where awards vest.

'Priced' option scheme

On 31 March 2021, Eden implemented a new LTIP, replacing the previous one, under which 'priced', approved options are granted to the Executive Directors and under which the Company intends to grant options to senior management and certain employees.

During the first half of the year, the Company granted to the Executive Directors a total of 10,500,000 options at an exercise price of 6p per share.

 
                                Six months ended 30 June     Six months ended 30 
                                          2021                     June 2020 
 
                                    Weighted                     Weighted 
                                     average                      average 
                                    exercise                     exercise 
                               price (pence)       Number   price (pence)   Number 
 
 Outstanding at the 
  beginning 
 of the period                             -            -               -        - 
 Granted during the 
  period                                   6   10,500,000               -        - 
 Exercised during the 
  period                                   -            -               -        - 
 Lapsed during the period                  -            -               -        - 
 
 
                                           6   10,500,000               -        - 
 
 

The exercise price of options outstanding at the end of the period was 6p (30 June 2020: nil p) and their weighted average contractual life was 1.5 years (30 June 2020: nil years). None of the options have vesting conditions.

The share-based payment charge for the period, in respect of these options, was GBP544,028 (30 June 2020: GBPnil).

The following information is relevant in the determination of the fair value of options granted during the year under the unapproved options scheme under the LTIP operated by Eden Research Plc.

 
                            2015 Award   2016 Award   2017 Award 
 Grant date                 30/6/2021    30/6/2021    31/03/2021 
                           -----------  -----------  ----------- 
 Number of awards           3,500,000    3,500,000    3,500,000 
                           -----------  -----------  ----------- 
 Share price                0.10         0.10         0.10 
                           -----------  -----------  ----------- 
 Exercise price             GBPnil       GBPnil       GBPnil 
                           -----------  -----------  ----------- 
 Expected dividend yield    -%           -%           -% 
                           -----------  -----------  ----------- 
 Expected volatility        63.20%       63.20%       63.20% 
                           -----------  -----------  ----------- 
 Risk free rate             0.95%        0.95%        0.95% 
                           -----------  -----------  ----------- 
 Vesting period             Nil          Nil          Nil 
                           -----------  -----------  ----------- 
 Expected Life (from        2 years      3 years      4 years 
  date of grant) 
                           -----------  -----------  ----------- 
 

For the 'priced' options which were granted under the Company's new LTIP, fair value is measured using the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural conditions.

Warrants

 
                                Six months ended 30 June       Six months ended 30 
                                          2021                      June 2020 
 
                                     Weighted                    Weighted 
                                      average                     average 
                                     exercise                    exercise 
                                price (pence)      Number   price (pence)      Number 
 
 Outstanding at the 
  beginning 
 of the period                             19   2,989,865              19   2,989,865 
 Granted during the 
  period                                    -           -               -           - 
 Lapsed during the period                   -           -               -           - 
 
 
                                           19   2,989,865              19   2,989,865 
 
 

The exercise price of warrants outstanding at the end of the period ranged between 12p and 30p (30 June 2020: 11p and 30p) and their weighted average contractual life was 1.0 year (30 June 2020: 2.0 years).

   16.       Revenue 

IFRS 8 requires operating segments to be reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for the resource allocati on and assessing performance of the operating segments has been identified as the Executive Directors as they are primarily responsible for the allocation of the resources to segments and the assessment of performance of the segments.

The Executive Directors monitor and then assess the performance of segments based on product type and geographical area using a measure of adjusted EBITDA. This is the result of the segment after excluding the share-based payment charges, other operating income and the amortisation of intangibles. These items, together with interest income and expense are not allocated to a specific segment.

The segmental information for the six months ended 30 June 2021 is as follows:

 
                                    Agrochemicals   Consumer    Animal       Total 
                                                     products    health 
                                   --------------  ----------  --------  ------------ 
 Revenue                                 GBP           GBP        GBP         GBP 
                                   --------------  ----------  --------  ------------ 
 Milestone payments                    95,025           -          -        95,025 
                                   --------------  ----------  --------  ------------ 
 R & D charges                            -           3,218        -         3,218 
                                   --------------  ----------  --------  ------------ 
 Royalties                                -          28,551        -        28,551 
                                   --------------  ----------  --------  ------------ 
 Product sales                         658,500          -          -        658,500 
                                   --------------  ----------  --------  ------------ 
 Total revenue                         753,525       31,769        -        785,294 
                                   --------------  ----------  --------  ------------ 
 EBITDA                               (843,969)      28,551        -       (815,418) 
                                   --------------  ----------  --------  ------------ 
 Share Based Payments                 (544,028)         -          -       (544,028) 
                                   --------------  ----------  --------  ------------ 
 Adjusted EBITDA                     (1,387,997)     28,551        -      (1,359,446) 
                                   --------------  ----------  --------  ------------ 
 Amortisation                         (309,900)      (6,636)       -       (316,536) 
                                   --------------  ----------  --------  ------------ 
 Depreciation                         (75,601)          -          -       (75,601) 
                                   --------------  ----------  --------  ------------ 
 Finance costs, foreign exchange 
  and investment revenues             (73,167)          -          -       (73,167) 
                                   --------------  ----------  --------  ------------ 
 Income Tax                            261,020          -          -        261,020 
                                   --------------  ----------  --------  ------------ 
 Share of Associate's loss                -          (9,199)       -        (9,199) 
                                   --------------  ----------  --------  ------------ 
 (Loss)/Profit for the Year          (1,585,645)     12,716        -      (1,572,929) 
                                   --------------  ----------  --------  ------------ 
 Total Assets                        16,017,143      112,835       -      16,129,978 
                                   --------------  ----------  --------  ------------ 
 Total assets includes: 
                                   --------------  ----------  --------  ------------ 
 Additions to Non-Current 
  Assets                              1,028,734         -          -       1,028,734 
                                   --------------  ----------  --------  ------------ 
 Total Liabilities                    2,303,598      51,542        -       2,355,140 
                                   --------------  ----------  --------  ------------ 
 
 

The segmental information for the six months ended 30 June 2020 (restated - see note 17) is as follows:

 
                                    Agrochemicals   Consumer    Animal       Total 
                                                     products    health 
                                   --------------  ----------  --------  ------------ 
 Revenue                                 GBP           GBP        GBP         GBP 
                                   --------------  ----------  --------  ------------ 
 Milestone payments                    19,645           -          -        19,645 
                                   --------------  ----------  --------  ------------ 
 R & D charges                            -             -          -           - 
                                   --------------  ----------  --------  ------------ 
 Royalties                                -          16,383        -        16,383 
                                   --------------  ----------  --------  ------------ 
 Product sales                         562,830          -          -        562,830 
                                   --------------  ----------  --------  ------------ 
 Total revenue                         582,475       16,383        -        598,858 
                                   --------------  ----------  --------  ------------ 
 EBITDA                               (794,018)      16,383        -       (777,635) 
                                   --------------  ----------  --------  ------------ 
 Share Based Payments                 (47,088)          -          -       (47,088) 
                                   --------------  ----------  --------  ------------ 
 Adjusted EBITDA                      (746,930)      16,383        -       (730,547) 
                                   --------------  ----------  --------  ------------ 
 Amortisation                         (257,446)         -          -       (257,446) 
                                   --------------  ----------  --------  ------------ 
 Depreciation                         (11,039)          -          -       (11,039) 
                                   --------------  ----------  --------  ------------ 
 Finance costs, foreign exchange 
  and investment revenues             (16,289)          -          -       (10,749) 
                                   --------------  ----------  --------  ------------ 
 Impairment of investment                 -             -          -           - 
  in associate 
                                   --------------  ----------  --------  ------------ 
 Income Tax                               -             -          -           - 
                                   --------------  ----------  --------  ------------ 
 Share of Associate's loss                -          (7,241)       -        (7,241) 
                                   --------------  ----------  --------  ------------ 
 (Loss)/Profit for the Year          (1,031,704)      9,142        -      (1,022,562) 
                                   --------------  ----------  --------  ------------ 
 Total Assets                        17,551,760      132,743       -      17,684,503 
                                   --------------  ----------  --------  ------------ 
 Total assets includes: 
                                   --------------  ----------  --------  ------------ 
 Additions to Non-Current 
  Assets                               604,920          -          -        604,920 
                                   --------------  ----------  --------  ------------ 
 Total Liabilities                    1,470,551      91,629        -       1,562,180 
                                   --------------  ----------  --------  ------------ 
 

The segmental information for the year ended 31 December 2020 is as follows:

 
                                    Agrochemicals   Consumer    Animal       Total 
                                                     products    health 
                                   --------------  ----------  --------  ------------ 
 Revenue                                 GBP           GBP        GBP         GBP 
                                   --------------  ----------  --------  ------------ 
 Milestone payments                    27,523           -          -        27,523 
                                   --------------  ----------  --------  ------------ 
 R & D charges                          7,660         8,551        -        16,211 
                                   --------------  ----------  --------  ------------ 
 Royalties                             180,801       27,919        -        208,720 
                                   --------------  ----------  --------  ------------ 
 Product sales                        1,116,534         -          -       1,116,534 
                                   --------------  ----------  --------  ------------ 
 Total revenue                        1,332,518      36,470        -       1,368,988 
                                   --------------  ----------  --------  ------------ 
 EBITDA                              (1,528,934)     36,470        -      (1,492,464) 
                                   --------------  ----------  --------  ------------ 
 Share Based Payments                 (120,380)         -          -       (120,380) 
                                   --------------  ----------  --------  ------------ 
 Adjusted EBITDA                     (1,649,314)     36,470        -      (1,612,844) 
                                   --------------  ----------  --------  ------------ 
 Amortisation                         (539,535)     (13,274)       -       (552,809) 
                                   --------------  ----------  --------  ------------ 
 Depreciation                         (70,039)          -          -       (70,039) 
                                   --------------  ----------  --------  ------------ 
 Finance costs, foreign exchange 
  and investment revenues              17,433           -          -        17,433 
                                   --------------  ----------  --------  ------------ 
 Impairment of investment 
  in associate                        (299,521)         -          -       (299,521) 
                                   --------------  ----------  --------  ------------ 
 Income Tax                            285,108          -          -        285,108 
                                   --------------  ----------  --------  ------------ 
 Share of Associate's loss                -         (30,352)       -       (30,352) 
                                   --------------  ----------  --------  ------------ 
 (Loss)/Profit for the Year          (2,255,868)     (7,156)       -      (2,263,024) 
                                   --------------  ----------  --------  ------------ 
 Total Assets                        16,804,893      119,471       -      16,924,364 
                                   --------------  ----------  --------  ------------ 
 Total assets includes: 
                                   --------------  ----------  --------  ------------ 
 Additions to Non-Current 
  Assets                              2,319,566         -          -       2,319,566 
                                   --------------  ----------  --------  ------------ 
 Total Liabilities                    1,915,322      80,093        -       1,995,415 
                                   --------------  ----------  --------  ------------ 
 

The share of associate's loss has been moved from the agrochemicals to consumer products segment to reflect a change in the operating/reporting structure and reflects a change in internal reporting provided to the chief operating decision maker who receives this information and assesses performance.

Geographical Reporting

 
           Six months    Six months     Year ended 
                ended      ended 30    31 December 
              30 June     June 2020           2020 
                 2021     (restated 
                         - see note 
                                13) 
                  GBP           GBP            GBP 
 
 UK            31,769           694         16,211 
 Europe       753,525       598,164      1,352,777 
          -----------  ------------  ------------- 
 
              785,294       598,858      1,368,988 
          ===========  ============  ============= 
 
 

The revenue derived from Milestone Payments relates to agreements which cover a number of countries both in the EU and the rest of the world.

All of the non-current assets are in the UK.

   17.       Prior Year Adjustment 

Following the incorporation of TerpeneTech (Ireland) in 2019, the Group is reorganising the roles of TerpeneTech (Ireland) and TerpeneTech (UK) in the sale of geraniol and certain other products.

Following communications with the Financial Reporting Council (refer to the Audit Committee Report on pages 38 - 39 of the 2020 Annual Report and Accounts), the Directors have reconsidered the arrangements that were in place in 2019 (and which remained in place in 2020 and to date) in regard to sales made by TerpeneTech (Ireland).

The Directors have concluded that TerpeneTech (Ireland) was acting as an agent in these transactions and should have recognised sales of GBP24,730 (H1, 2020: GBP16,383) being the 10% margin on the sales of geraniol rather than recognising gross sales and cost of sales. As such, they have restated the Group's revenue and cost of sales in 2019.

As a consequence of this restatement, revenue has been reduced by GBP222,574 (H1, 2020: GBP163,826) and cost of sales have been reduced by GBP222,574 (H1, 2020: GBP163,826) in the Income Statement for the year ending 31 December 2019. There was no impact on loss before or after taxation or net assets and no impact on any opening balances.

As the arrangements change going forward, the Directors will reconsider the revenue recognition.

Notes to Editors:

Eden Research is the only UK-listed company focused on biopesticides for sustainable agriculture. It develops and supplies innovative biopesticide products and natural microencapsulation technologies to the global crop protection, animal health and consumer products industries.

Eden's products are formulated with terpene active ingredients, based on natural plant defence metabolites. To date, they have been primarily used on high-value fruits and vegetables, improving crop yields and marketability, with equal or better performance when compared with conventional pesticides. Eden has two products currently on the market:

Mevalone (R) / Araw(R) is a foliar biofungicide which initially targets a key disease affecting grapes and other high-value fruit and vegetable crops. It is approved for sale in a number of key countries whilst Eden and its partners pursue regulatory clearance in new territories thereby growing Eden's addressable market globally.

Cedroz (TM) is a bionematicide that targets free living nematodes which are parasitic worms that affect a wide range of high-value fruit and vegetable crops globally. Cedroz is registered for sale on two continents and Eden's commercial collaborator, Eastman Chemical, is pursuing registration and commercialisation of this important new product in numerous countries globally.

Eden's Sustaine (R) encapsulation technology is used to harness the biocidal efficacy of naturally occurring chemicals produced by plants (terpenes) and can also be used with both natural and synthetic compounds to enhance their performance and ease-of-use. Sustaine microcapsules are naturally-derived, plastic-free, biodegradable micro-spheres derived from yeast. It is one of the only viable, proven and immediately registerable solutions to the microplastics problem in formulations requiring encapsulation.

Eden was admitted to trading on AIM on 11 May 2012 and trades under the symbol EDEN. It was awarded the London Stock Exchange Green Economy Mark in January 2021, which recognises London-listed companies that derive over 50% of their total annual revenue from products and services that contribute to the global green economy. Eden derives 100% of its total annual revenues from sustainable products and services.

For more information about Eden, please visit: www.edenresearch.com .

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September 28, 2021 01:59 ET (05:59 GMT)

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