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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END
IR DDLFLFKLFBBV
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