TIDMEDEN
RNS Number : 3162N
Eden Research plc
31 May 2022
31 May 2022
Eden Research
("Eden" or "the Company")
Preliminary Results for Year Ended 31 December 2021
Eden Research plc (AIM: EDEN), the AIM-quoted company focused on
sustainable biopesticides and plastic-free formulation technology
for use in global crop protection, animal health and consumer
products industries, announces its preliminary results for the year
ended 31 December 2021.
Commercial and operational highlights
-- Sales of agrochemical products, Cedroz and Mevalone,
increased overall by approximately 4% in volume.
-- Product sales remained flat in GBP terms at approximately
GBP1.1m (2020: GBP1.1m), due to adverse foreign currency exchange
rates.
-- Exclusive Commercialisation, Supply and Distribution
Agreement signed with Corteva Agriscience, the fourth largest
agriculture input company in the world
-- Significantly increased the Company's addressable market
during the year with the addition of new countries, diseases and
crop targets for Mevalone and Cedroz.
Financial highlights
-- Revenue for the year was GBP1.2m* (2020: GBP1.4m) with a loss
before tax of GBP3.4m (2020: GBP2.5m) and statutory operating loss
of GBP3.2m (2020: GBP2.2m).
-- Adjusted EBITDA (excluding share-based payments - see note 4)
was GBP2.0m (loss) (2020: GBP1.5m loss).
-- Cash position at the year-end was GBP3.9m, in-line with
management expectations (2020: GBP7.3m).
*GBP0.14m of upfront payments due in the year (and paid after
the year-end) has, following the audit process, been designated as
deferred income and, accordingly, will only be recognised in the
Group income statement following completion of the relevant
performance milestones, as required under IFRS15.
The Group's full Financial Statements are available at:
www.edenresearch.com .
Lykele van der Broek, Chairman of Eden Research plc,
commented:
"Eden has continued to make positive strides in 2021, despite
the ongoing challenges many of us have faced. 2021 has seen us lay
down the foundations for considerable revenue growth by expanding
our regulatory footprint for our flagship biopesticide products in
multiple jurisdictions and across various crop types. We are
particularly excited by the prospect of making an entrance to the
US market, with our impending EPA approval, and to capitalise on
the opportunity presented by being embedded in one of the largest
agricultural markets in the world. This expansion comes alongside
our recent OTC listing, where we hope to expand and diversify our
shareholder base, offering US investors the opportunity to
participate in the promising future of sustainable agriculture.
In the mid-term, we hope to further leverage our close
partnership with Corteva, which has now entered its third year, to
bring to market our innovative seed treatment product which uses
Eden's proprietary, plastic-free Sustaine(R) encapsulation
technology.
As we aim to become a central part of a more sustainable
agricultural future, driven by our highly motivated and skilled
team of experts, we look forward to delivering on our milestones
this coming year and materialising the true value of Eden's
proposition for all our stakeholders."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain .
For further information contact:
Eden Research plc www.edenresearch.com
Sean Smith
Alex Abrey 01285 359 555
Cenkos Securities plc (Nominated advisor and broker)
Giles Balleny / Max Gould (corporate finance)
Michael Johnson (sales) 020 7397 8900
Hawthorn Advisors (Financial PR)
Stephen Atkinson eden@hawthornadvisors.com
Victoria Ainsworth
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) 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 .
Chairman's Statement
Over the past two years, Eden has continued to steadily progress
its development plans and has made strides on several fronts.
March 2020's successful fundraise provided Eden with a firm
platform to invest in the development of the Company's product
portfolio and broaden its technical capabilities with the opening
of a laboratory facility. Not only has Eden been able to move
forward apace in new product areas such as seed treatment and
insecticides, but product regulatory approvals have also come to
fruition which have provided opportunities for sales growth.
Nevertheless, the pace with which we had initially hoped to
accelerate our development was hampered by the COVID-19 pandemic
which brought a high degree of uncertainty globally. This was
particularly challenging for growth companies like Eden, having
hired a new team as well as opening a new laboratory facility
during lockdown. In 2021, the effects of government-imposed
restrictions were still being felt as travel and leisure activities
along with wine consumption continued to be significantly lower
than in 2019.
The other, and arguably more important, unfortunate consequence
of the pandemic has been the slowing down of the regulatory
approval process which has particularly affected Eden in the US.
Additionally, the Environmental Protection Agency (EPA) suffered
resource deficiencies as a consequence of underfunding during the
previous Presidential administration which has further compounded
the effects of the pandemic.
The knock-on effects from regulatory delays have been
particularly impactful as the US represents a significant market
opportunity for Eden with growers and consumers there becoming ever
more concerned about the use of traditional chemical pesticides and
seeking to replace them with effective, lower risk alternatives,
such as Eden's.
The seed treatment project, for which Eden has partnered with
Corteva Agriscience, has moved into its third year of development
and progresses ever closer to commercialisation which is expected
in time for the 2024 season.
Field trials of our insecticide formulations have shown
consistently good efficacy results; comparable to the traditional
chemical products and superior to that of one of the leading
biopesticide alternatives.
We should soon be at the stage where we are able to hand over to
a long list of interested parties our product for their own testing
with a view to entering into what is expected to be a number of
commercial agreements for those distribution rights.
In conjunction with its commercial partners, Eden has been able
to expand the label of existing products which results in a larger
addressable market, which should directly lead to product sales
growth, the first results of which we expect to see in a meaningful
way in 2022.
New disease targets for existing products have been identified
and trials work undertaken in order to verify that these
opportunities are viable and commercial success achievable.
The technical capabilities of Eden have increased dramatically,
with our ability to develop products, undertake screening and
formulation work all now in-house at our laboratory facility in
Oxfordshire.
All of this has been achieved during a very challenging period
which has hampered supply chains, caused staffing issues and
backlogged administrative processes, affecting the team at Eden,
the Company itself and the rest of the world. Despite the
challenging environment, we remain focused upon the opportunities
that exist in our growing industry and we look forward to embracing
these in 2022 and beyond. This should begin by leveraging our US
OTC listing on receipt of our expected EPA approval for our core
products to expand our presence in a significant market.
Advancements to also grow our product range represent another
exciting avenue for the Company, bringing the potential to broaden
our product reach into the consumer products industry. Finally, our
recently obtained approvals across a number of geographies will
allow Eden to materially grow its revenues in the 2023 growing
season and beyond.
I would like to thank our staff for all their hard work and the
shareholders for their on-going support. I would like to convey to
you all my sincerely held confidence in Eden's future success.
Lykele van der Broek
Non-Executive Chairman
30 May 2022
Chief Executive Officer's Review
Section one: Introduction
Despite the ongoing, exceptional circumstances and the
disruption to the global business landscape, agriculture and
regulatory processes, Eden has continued to demonstrate resilience
and make tangible progress in advancing our business strategy,
capitalising on the rapidly growing global biopesticides market and
growing demand for plastic free crop protection solutions.
Eden continued to expand its commercial and regulatory footprint
by moving into new geographies, increasing our product offerings
and forging milestone partnerships, including a landmark agreement
with global major, Corteva Agriscience, for our first seed
treatment product which uses our Sustaine(R) encapsulation
technology and sustainable active ingredients.
Alongside these advances across the business, we have also
focused on bolstering our credentials as a business and investment
opportunity with sustainability at its core, building on the award
of the London Stock Exchange's Green Economy Mark which we received
at the beginning of 2021 in recognition of the role we are playing
in supporting the transition to sustainability.
We believe that by expanding our global footprint, we are
playing a key role in this transition. Consumers, farmers and
regulators are demanding more sustainable and plastic-free
agricultural solutions and Eden's products meet this demand.
Section two: Delivering on our strategy
Eden is the only UK-quoted company focused on biopesticides for
sustainable agriculture. We are operating in a constantly expanding
market, providing sustainable solutions to farmers globally. The
biopesticides market is anticipated to be worth over GBP11 billion
by 2027 and Eden is a true innovator in the space.
Our strategic goals remain the same. We are focused on being the
leading deliverer of sustainable crop protection solutions through
the development and distribution of our two approved products,
Mevalone and Cedroz, and furthering the use of Sustaine with third
party active ingredients.
Eden's products are capitalising on a global market for
solutions that protect high-value crops, whilst improving yields
and marketability, without damaging local biodiversity and
environmental systems.
In the near term, our strategic focus is on:
- Expanding our commercial growth by:
o Receiving regulatory clearance for applications already made
in new countries, crops and diseases
o Accelerating the development of our Sustaine(R) technology
o Securing new partnerships for Mevalone(R) in new
territories
o Pursuing further collaborations with majors and selected
national partners
o Optimising our route to market
- Diversifying our business line by:
o Expanding the crops and diseases our products can be applied
to through new regulatory applications
o Securing new regulatory approval and distribution agreements
in new geographies and climates for products under development
o Pursuing new opportunities in the seed treatment space
o Advancing the development of our first insecticide
products
o Launching new products in the consumer products and animal
health markets
- Expanding our research and development operations by:
o Optimising our supply chain
o Expanding our in-house screening and field trials
capability
o Accelerating the commercialisation of Sustaine(R) for
conventional actives
o Increasing self-reliance for R&D and reducing time to
market
- Strengthening and growing our team by:
o Adding to our R&D capacity, including in microbiology,
plant biology, agronomy, and analytical chemistry
o Expanding our commercial team
o Building our in-house regulatory expertise in order to
accelerate time to market and reducing regulatory costs
We continue to make consistent progress across these areas, to
build on what we have achieved to date and develop new commercial
growth opportunities.
Notable commercial and operational highlights from 2021
include:
-- Development of Eden's foliar biofungicide product,
Mevalone(R), with the expanded authorisation of its use on a
variety of key crops including:
o Pome fruits (such as apples and pears) in France
o Strawberries, raspberries, blueberries, cranberries, kiwi,
aubergines and peppers in Portugal
o Wine and table grapes in Romania and
o Strawberries, peppers, courgettes, aubergine, tomatoes,
lettuce, brassicas, and raspberries in Spain
-- Authorisation of the use of Eden's nematicide formulation, Cedroz(TM) for:
o Tomatoes and cucumbers in Morocco and
o Tomato, eggplant, pepper, chili, pepino, cucumber, melon,
courgette, pumpkin, and strawberries in Italy
-- The signing of an exclusive Commercialisation, Supply and
Distribution Agreement with Corteva Agriscience, for Eden's first
seed treatment product
-- The signing of an exclusive agreement with Sipcam for the
marketing, distribution and selling rights of Mevalone(R) (marketed
as Araw(R)) in four North African countries: Egypt, Morocco,
Algeria and Tunisia.
Corteva
In May 2021, we were delighted to sign an exclusive
Commercialisation, Supply and Distribution Agreement with Corteva
Agriscience, the fourth largest agriculture company in the world,
for Eden's first seed treatment product which uses Eden's
proprietary, plastic-free Sustaine(R) encapsulation technology.
This built on a one-year evaluation agreement with Corteva signed
in 2020 and successful evaluations of Eden's products and
technology by Corteva for select seed treatment applications since
late 2019.
The deal is a significant corporate milestone for Eden marking
our first foray into the use of our active ingredients and
Sustaine(R) technology in seed treatments and the first use of our
products and technology on broad acre crops, which represents
significant future revenue potential.
US investor market
In October 2021, Eden announced that its shares will be traded
on the U.S. OTCQB market allowing US investors to trade Eden's
shares for the first time. This move allows us to diversify our
shareholder base in one of the world's biggest agricultural
markets. Currently, farmers in the US spend billions of dollars
every year on products that help them protect their crops and keep
up with food demand.
This move is also in anticipation of expanding our commercial
footprint in the US following the regulatory approval for our
products, which is expected in 2022. The US has a fast growing,
organic, 'green' and eco-label food market and is accelerating
regulations against the use of harmful pesticides, mirroring the
global drive to reduce, or eliminate, the use of potentially
harmful pesticides. Eden's sustainable biopesticides are well
placed to capitalise on this significant opportunity, once we have
received the anticipated Environmental Protection Agency (EPA)
approval.
Section three: Financial review
Revenue for the year was GBP1.2m (2020: GBP1.4m).
Our objective is to grow revenue primarily through product sales
which will ultimately provide a sustainable, consistent source of
income for the Company. In 2021, despite adverse market conditions
in many territories, sales of Cedroz and Mevalone increased
overall, in volume, by approximately 4% and by 6% on a constant
currency basis (using the current year average foreign exchange
rate for both current and prior year sales). However, due to
adverse foreign currency exchange rates, this growth hasn't
translated into an increase in product sales revenue, which
remained flat at GBP1.1m (2020: GBP1.1m).
Following the successful fundraise in March 2020, the cash
position at the year-end has reduced to GBP3.9m (2020: GBP7.3m).
However, the Company remains sufficiently funded and well placed to
implement its ambitious growth strategy, including investing in
product trials, pursuing product authorisations and continuing to
grow its team of experts.
Administrative expenses in the year increased to GBP2.6m (2020:
GBP2.2m) with the introduction of new team members. Operating loss
increased to GBP3.2m (2020: GBP2.2m). The increase in operating
loss is due to increased staff costs, as well as share-based
payment charges of GBP0.6m (2020: GBP0.1m). Throughout the year,
the Company remained debt free with no long-term debt or lending
facilities in place, or expected to be required.
Section four: 2022 outlook
In 2022, our ambition is to build on the new approvals (and the
expanded addressable market that they represent) and partnerships
achieved in 2021. Examples include new crop and pest uses for
Mevalone(R) in Spain and Portugal, the use of Cedroz(TM) in Italy
and Morocco, as well as working with our partners such as Sipcam to
expand the sales of our products across key countries in North
Africa.
The seed treatment project with Corteva continues this year with
further field trials taking place which should ultimately be used
in the application for regulatory authorisation in the EU.
Eden is awaiting approval of its active ingredients, as well as
its products, Cedroz and Mevalone, in the US from the EPA.
Expansion into the US will be a major milestone for Eden given the
size of the US agricultural market; the world's second largest. Due
to the nature of the process and a schedule heavily impacted by the
COVID pandemic, it is hard to predict exactly when new approvals
will be achieved. However, we are in continual contact with
regulators to progress the process as quickly as possible, and we
expect to be able to update shareholders with updates on EPA
approval in the coming months.
In addition, now that Eden's shares can be traded in the US via
the OTC market, we will be focusing our efforts on increasing
visibility to US investors and audiences during the remainder of
2022. Our hope is that there will be increased demand for Eden
shares once we achieve the anticipated US EPA approvals.
Section five: Driving positive impact
As a company which works closely with farmers and custodians of
nature, we are acutely aware of both the immense power and
fragility of the environment and its systems. The deepening impact
of climate change and human activity affects farmers globally; from
changes in temperature and destruction of critical biodiversity to
adverse weather events. We believe that Eden has an important part
to play in protecting and helping farmers to work with nature to
find sustainable solutions, without adversely impacting their
bottom line.
Eden is a company with sustainability at the core of its
operations and products. We believe that the most significant way
that Eden can make a positive impact on the planet is to grow our
business rapidly, bringing our core products and technologies to
the mainstream market, and displacing unsustainable
alternatives.
We are dedicated to achieving this aim in a sustainable and
responsible manner, by ensuring our operations and processes are
shaped with the environmental impact in mind at every step.
Our portfolio of products helps farmers to protect natural
biological ecosystems, as well as their high value crops, meeting
the growing demands of both consumers and regulators. The
ingredients we use to formulate our products; geraniol, eugenol and
thymol, are naturally occurring and have all been allowed for use
in organic agriculture in the European Union.
Our goal is to expand the reach and applications of our
products, so more farmers in more markets globally can strike this
balance of high crop yield and sustainable production.
In addition to our biopesticide products and ingredients, our
patented microencapsulation technology, Sustaine(R), directly
addresses the growing issue of intentionally-added microplastics
use in agriculture which leads to pollution in the soil, water and
plant and animal tissues. Sustaine(R) microcapsules are naturally
sourced, plastic-free, biodegradable micro-spheres derived from
yeast extract, which enable farmers to deliver crop protection
products without releasing microplastics into the environment.
This technology has significant potential to be applied beyond
its use in biopesticides and crop protection products and we are
exploring a range of applications across the animal and consumer
product sectors, where producers are under pressure from consumers
and regulators to reduce plastic use.
Brexit
The impact of Brexit is starting to be understood by many UK
companies, including Eden.
The Company's ownership of its EU approvals of Mevalone(R) and
its constituent active substances has been unaffected by Brexit,
based on guidance that was published stating that the owner of such
approvals can continue to be a UK resident company.
We know that seeking regulatory approval in the UK for Eden
products has become somewhat more challenging, and the Company
continues to weigh up market opportunities and costs post Brexit.
We are well placed to navigate what are likely to be dynamic and
complex regulatory challenges. From an operational perspective, the
Company has not seen any significant issues, rather it has
benefited from having toll manufacturing facilities in mainland
Europe, though it continues to monitor this situation.
The Company has toll manufacturing capabilities in the UK and
the US, which provide some operational flexibility. Raw materials
are currently sourced from outside of the EU and there has been
manageable impact on this part of the supply chain.
COVID-19
The fallout from the COVID-19 pandemic has continued to
represent an unprecedented challenge for the agricultural industry,
with global food systems and supply chains put under extreme
pressure. Throughout the pandemic, Eden's priority has been to
continue developing and supplying its products and technologies for
the crop production industry through its global partnership
network.
Most significantly, regulatory processes globally have remained
behind schedule due to severe backlogs from 2020. This resulted in
delays to key regulatory approvals that we were expecting in
2021.
Our position on how we are addressing the COVID-19 pandemic
remains as follows:
1 Growth funded
In March 2020, we raised GBP10.4 million (gross) from investors,
a feat that the whole team is proud of given the volatility and
uncertainty in the markets at the time. This vote of confidence
from our shareholders (both existing and new) 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 period
since has presented challenges for the Company, our employees and
our partners, Eden remains debt-free and has carefully managed its
cash resources allowing us to continue to execute on our exciting
plans. Our outsourced manufacturing model means that we continue to
retain maximum flexibility over our choice of manufacturing
locations with a relatively low fixed cost base.
2 Our industry has a pivotal role to play
As demand soared for food supply during the lockdown periods
across the UK and beyond, the agriculture industry had 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 journey will only be more prevalent. Not
only do people need food to survive, they are increasingly
conscious of where it comes from and concerned about the supply
chain journey. 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 at the forefront of the movement
towards sustainable farming practices.
3 Supporting our employees and partners
We continue to work closely with our partners as they maintain
their business of supplying our product to growers in an increasing
number of countries. Our team continues to regularly review the
situation 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 are
resuming travel, though we continue to work remotely part-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 all that
they do to feed us.
TerpeneTech (UK)
TerpeneTech (UK) secured a CE mark for its head-lice treatment
product in European Economic Area ("EEA") in 2018, which is the
first step in the marketing and sales of such products. The launch
of the head-lice product has been delayed by the COVID-19 pandemic,
with the closure of schools particularly impacting its potential
market. Since schools have re-opened, the UK distributor has not
met expectations and, as such, a new partner for the UK market is
being sought.
Sales of the head-lice treatment product are expected to
commence in other countries around the world in 2022 with
TerpeneTech (UK) expected to sign an agreement with a new
distribution partner in due course.
Sales of geraniol into the biocide sector have continued to
increase year on year and TerpeneTech (UK) is investigating the
potential to register additional active ingredients under the EU's
biocide directive.
TerpeneTech (Ireland)
TerpeneTech (Ireland) was established in 2019 in order to own
the registration of geraniol under the EU's Biocidal Products
Registration regulation, due to changes brought about by Brexit. As
such, TerpeneTech (Ireland) receives royalty income from
TerpeneTech (UK) on the sales of geraniol, but is otherwise
non-operational.
Ukraine
Eden does not currently have any business activities in Russia
or Ukraine and, as such, does not expect any immediate, direct
impact on its business.
The knock-on effect of the conflict on other countries is yet to
be understood, though we do not envisage significant disruption to
the current business in the short term.
Dividends
There is no dividend to be paid or proposed in 2021. The Board
continues to monitor its dividend policy.
Section six: Summary
Despite the ongoing, uncertain backdrop, I am pleased that Eden
has made progressive strides in 2021, underpinned by a belief that
we are best placed to meet global demands for sustainable and
plastic-free agricultural solutions and have a long term positive
impact on the health of the planet.
As we move through 2022, I am excited about the commercial
opportunities ahead, including the potential expansion into the US
market, subject to EPA approval, and the development of our first
seed treatment product with Corteva, as well as continuing to grow
our regulatory footprint and addressable markets in new territories
and on new crops. We look forward to sharing updates on these, and
more, positive developments with all our stakeholders.
I would like to take this opportunity to say thank you to Eden's
team for the exceptional ingenuity and resilience they have shown
this year, in sometimes challenging circumstances.
I remain proud of the work Eden is doing in contributing to more
environmentally friendly agricultural practices globally and
building a strong, visionary and innovative business with
sustainability at its core.
Sean Smith,
Chief Executive Officer
Consolidated statement of comprehensive income for the year
ended 31 December 2021
2021 2020
Notes GBP GBP
Revenue 4 1,228,580 1,368,988
Cost of sales (667,343) (736,509)
Gross profit 561,237 632,479
Other operating income - 7,601
Amortisation of intangible
assets (434,630) (552,809)
Administrative expenses (2,694,290) (2,202,581)
Share based payments (640,597) (120,380)
Operating loss 5 (3,208,280) (2,235,690)
Investment revenues 8 98 5,725
Finance costs 9 (32,074) (24,000)
Foreign exchange gains/(losses) 9 (97,247) 35,706
Impairment of investment in
associate 15 - (299,521)
Share of loss of equity accounted
Investee, net of tax 15 (58,177) (30,352)
Loss before taxation (3,395,680) (2,548,132)
Income tax income 10 618,137 285,108
Loss and total comprehensive
income for the year (2,777,543) (2,263,024)
Total comprehensive income for the
year is attributable to:
- Owners of the parent Company (2,788,973) (2,270,347)
- Non-controlling interests 11,430 7,323
(2,777,543) (2,263,024)
Earnings per share 11
Basic (0.73p) (0.66p)
Diluted (0.73p) (0.66p)
The income statement has been prepared on the basis that all operations
are continuing operations.
Consolidated statement of financial position as at 31 December
2021
2021 2020
Notes GBP GBP
Non-current assets
Intangible assets 12 7,919,780 6,729,483
Property, plant and equipment 13 232,278 188,065
Right-of-Use assets 14 372,787 394,610
Investments 15 361,688 419,865
8,886,533 7,732,023
Current assets
Inventories 17 521,351 224,422
Trade and other receivables 18 886,587 1,396,308
Current tax recoverable 10 903,245 285,108
Cash and cash equivalents 3,829,369 7,286,503
6,140,552 9,192,341
Current liabilities
Trade and other payables 19 1,711,518 1,454,955
Lease liabilities 20
1 99,924 84,350
1,811,442 1,539,305
Net current assets 4,329,110 7,653,036
Non-current liabilities
Trade and other payables 19 87,740 125,212
Lease liabilities 20 298,428 330,898
386,168 456,110
Net assets 12,829,475 14,928,949
Equity
Called up share capital 23 3,803,402 3,803,402
Share premium account 24 39,308,529 39,308,529
Warrant reserve 25 937,505 429,915
Merger reserve 26 10,209,673 10,209,673
Retained earnings (41,460,753) (38,842,259)
Non-controlling interest 27 31,119 19,689
Total equity 12,829,475 14,928,949
The financial statements were approved by the Board of Directors
and authorised for issue on 30 May 2022 and are signed on its behalf
by:
..............................
Sean Smith
Director
Company statement of financial position as at 31 December
2021
2021 2020
Notes GBP GBP
Non-current assets
Intangible assets 12 7,813,583 6,610,014
Property, plant and equipment 13 232,278 188,065
Right-of-Use Assets 14 372,787 394,610
Investments 15 361,688 419,865
8,780,336 7,612,554
Current assets
Inventories 17 521,351 224,422
Trade and other receivables 18 970,587 1,444,308
Current tax recoverable 10 903,245 285,108
Cash and cash equivalents 3,829,369 7,286,503
6,224,552 9,240,341
Current liabilities
Trade and other payables 19 1,667,557 1,374,862
Lease liabilities 20 99,924 84,350
1,767,481 1,459,212
Net current assets 4,457,071 7,781,129
Non-current liabilities
Trade and other payables 19 87,740 125,212
Lease liabilities 20 298,428 330,898
386,168 456,110
Net assets 12,851,239 14,937,573
Equity
Called up share capital 23 3,803,402 3,803,402
Share premium account 24 39,308,529 39,308,529
Warrant reserve 25 937,505 429,915
Merger reserve 26 10,209,673 10,209,673
Retained earnings (41,407,870) (38,813,946)
Total equity 12,851,239 14,937,573
As permitted by s408 Companies Act 2006, the company has not presented
its own income statement and related notes. The company's loss for
the year was GBP2,764,403 (2020 - GBP2,229,669).
The financial statements were approved by the board of directors
and authorised for issue on 30 May 2022 and are signed on its behalf
by:
..............................
Sean Smith
Director
Company Registration No. 03071324
Consolidated statement of changes in equity for the year ended
31 December 2021
Share Share Merger Warrant Retained earnings Total Non-controlling Total
capital premium reserve reserve interest
account
Notes GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1
January 2020 2,071,893 31,289,915 10,209,673 335,739 (36,571,912) 7,335,308 12,366 7,347,674
Year ended 31
December 2019:
Loss and total
comprehensive
income for the
year - - - - (2,270,347) (2,270,347) 7,323 (2,263,024)
Issue of share
capital 1,731,509 8,018,614 - - - 9,750,123 - 9,750,123
Options granted - - - 94,176 - 94,176 - 94,176
Balance at 31 December
2020 3,803,402 39,308,529 10,209,673 429,915 (38,842,259) 14,909,260 19,689 14,928,949
Year ended 31
December 2021:
Loss and total
comprehensive
income for the
year - - - - (2,788,973) (2,788,973) 11,430 (2,777,543)
Issue of share
capital 23/24 - - - - - - - -
Options granted 22 - - - 678,069 - 678,069 - 678,069
Options lapsed 22 - - - (170,479) 170,479 - - -
Balance at 31 December
2021 3,803,402 39,308,529 10,209,673 937,505 (41,460,753) 12,798,356 31,119 12,829,475
Company statement of changes in equity for the year ended 31
December 2021
Share Share Merger Warrant Retained Total
capital premium reserve reserve earnings
account
Notes GBP GBP GBP GBP GBP GBP
Balance at 1 January 2020 2,071,893 31,289,915 10,209,673 335,739 (36,584,277) 7,322,943
Year ended 31 December 2020:
Loss and total comprehensive income for
the year - - - - (2,229,669) (2,229,669)
Issue of share capital 1,731,509 8,018,614 - - - 9,750,123
Options granted - - - 94,176 - 94,176
Balance at 31 December 2020 3,803,402 39,308,529 10,209,673 429,915 (38,813,946) 14,937,573
Year ended 31 December 2021:
Loss and total comprehensive income for
the year - - - - (2,764,403) (2,764,403)
Issue of share capital 23/24 - - - - - -
Options granted 22 - - - 678,069 - 678,069
Options lapsed 22 - - - (170,479) 170,479 -
Balance at 31 December 2021 3,803,402 39,308,529 10,209,673 937,505 (41,407,870) 12,851,239
Consolidated statement of cash flows for the year ended 31
December 2021
2021 2020
Notes GBP GBP GBP GBP
Cash flows from
operating activities
Cash absorbed by
operations 33 (1,586,582) (1,265,812)
Interest paid - (450)
Interest on lease
liabilities (32,074) (23,550)
Tax refunded - 268,777
Net cash outflow from
operating activities (1,618,656) (1,021,035)
Investing activities
Purchase of intangible
assets (1,624,927) (1,701,287)
Purchase of property,
plant and equipment (101,269) (200,758)
Interest received 98 5,725
Net cash used
in investing activities (1,726,098) (1,896,320)
Financing activities
Gross proceeds
from issue of shares - 10,389,053
Expenses from issue
of shares - (638,930)
Payment of lease
liabilities (90,387) (44,457)
Net cash generated
from/(used in)
financing activities (90,387) 9,705,666
Net increase/(decrease)
in cash and cash
equivalents (3,435,141) 6,788,311
Cash and cash
equivalents at
beginning of year 7,286,503 501,984
Effect of foreign
exchange rates (21,993) (3,792)
Cash and cash equivalents
at end of year 3,829,369 7,286,503
Relating to:
Bank balances and
short-term deposits 3,829,369 7,286,503
Company statement of cash flows for the year ended 31 December
2021
2021 2020
Notes GBP GBP GBP GBP
Cash flows from
operating activities
Cash absorbed
by operations 33 (1,586,582) (1,265,812)
Interest paid - (450)
Interest on
lease liabilities (32,074) (23,550)
Tax refunded - 268,777
Net cash outflow
from operating activities (1,618,656) (1,021,035)
Investing
activities
Purchase of
intangible
assets (1,624,927) (1,701,287)
Purchase of property,
plant and equipment (101,269) (200,758)
Interest received 98 5,725
Net cash used
in investing activities (1,726,098) (1,896,320)
Financing
activities
Gross proceeds
from issue
of shares - 10,389,053
Expenses from
issue of shares - (638,930)
Payment of
lease liabilities (90,387) (44,457)
Net cash generated
from/(used in)
financing activities (90,387) 9,705,666
Net increase/(decrease)
in cash and cash
equivalents 3,435,141 6,788,311
Cash and cash
equivalents at
beginning of year 7,286,503 501,984
Effect of
foreign exchange
rates (21,993) (3,792)
Cash and cash
equivalents
at end of
year 3,829,369 7,286,503
Relating
to:
Bank balances
and short-term
deposits 3,829,369 7,286,503
Notes to the Preliminary Results for the year ended 31 December
2021
Accounting policies
1 Company information
Eden Research plc is a public company limited by shares
incorporated in England and Wales. The registered office is 67C
Innovation Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RQ. The
Company's principal activities and nature of its operations are
disclosed in the Directors' report.
The group consists of Eden Research plc, its subsidiaries,
TerpeneTech Limited (Ireland), Eden Research Europe Limited
(Ireland) and its associate company, TerpeneTech Limited (UK).
1.1 Accounting convention
The Group financial statements have been prepared in accordance
with UK-adopted international accounting standards. The Company
financial statements have been prepared in accordance with
UK-adopted international accounting standards and as applied in
accordance with the provisions of the Companies Act 2006.
The financial statements are prepared in sterling, which is the
functional currency of the group. Monetary amounts in these
financial statements are rounded to the nearest GBP.
They have been prepared on the historical cost basis. The
principal accounting policies adopted are set out below.
Associates
Associates are those entities in which the Company has
significant influence, but not control, over the financial and
operating policies. Significant influence is presumed to exist when
the Company holds between 20 and 50 percent of the voting power of
another entity, or where the Company has a lower interest but the
right to appoint a Director. The Company acquired 29.9% of
TerpeneTech Limited ("TerpeneTech (UK)") during 2015; TerpeneTech
(UK) is an associated undertaking.
Application of the equity method to associates
The investment in TerpeneTech (UK) is accounted for using the
equity method. The investment was initially recognised at cost. The
Company's investment includes goodwill identified on acquisition,
net of any accumulated impairment losses and any separable
intangible assets. The financial statements include the Company's
share of the total comprehensive income and equity movements of
TerpeneTech (UK), from the date that significant influence
commenced.
Eden Research plc is a public company limited by shares
incorporated in England and Wales. The registered office is 67C
Innovation Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RQ. The
company's principal activities and nature of its operations are
disclosed in the directors' report.
The group consists of Eden Research plc, its subsidiaries,
TerpeneTech Limited (Ireland), Eden Research Europe Limited
(Ireland) and its associate company, TerpeneTech Limited (UK).
Changes in presentation of the financial statements
The 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, however, there have been no
changes made in the current year, including changes in comparative
figures, to enhance presentation.
1.2 Basis of consolidation
The consolidated financial statements consolidate the financial
statements of the Company and its subsidiary undertakings up to 31
December 2021. The profits and losses of the Company and its
subsidiary are consolidated from the date from which control is
achieved. All members of the group have the same reporting
period.
Subsidiary undertakings are entities controlled by the Company.
The Company controls an entity when it is exposed to, or has the
right to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the
entity.
1.3 Going concern
The Directors have, at the time of approving the 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
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 year after taxation of
GBP2,777,543 (2020: GBP2,263,024). Net current assets at that date
amounted to GBP4,329,110 (2020: GBP7,653,036). Cash at that date
amounted to GBP3,829,369 (2020: GBP7,286,503). As at 30 April 2022,
the cash balance has reduced further to GBP2,451,971. 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 financial statements 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 revenue derived from existing
contracts as well as expected new contracts in respect of products
not yet available for use.
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 regulatory approvals, product
development process 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 the Directors have previously demonstrated ability and
willingness to delay certain costs, such as research and
development expenditure, where required and are willing and able to
delay costs in the forecast period should the need arise. A
positive cash balance is forecast to be maintained in this base
scenario throughout the entire forecast period.
In addition, the Directors have also considered a downside
scenario which includes reductions to revenue derived from existing
contracts as well as elimination of revenue from products not yet
available for use offset by mitigations around research and
development expenditure as well as some reductions in expansionary
overheads. Under this scenario, a positive cash balance would be
maintained over the forecast period.
Consequently, the Directors are confident that the Group and
Company will have sufficient funds to continue to meet their
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.
The Group's achievement of long-term positive cash generation is
reliant on the completion of ongoing product development and
successful initial approval and registration of these products with
various regulatory bodies, as well as the registration of existing
products in new territories. While the Group is forecast to become
cash generative in 2024 under the base budget, the Directors
consider it reasonably possible that the Group will require a
further fundraise prior to that point but beyond the going concern
period. The Directors have assessed the likelihood of obtaining
such funding, particularly in the context of the successful raise
in March 2020, and would expect to be able to raise such funds as
necessary.
1.4 Revenue
Revenue is recognised only when the Company has satisfied a
performance obligation by transferring control to a customer.
Revenue represents amounts receivable by the Company in respect
of services rendered during the year in accordance with the
underlying contract of licence, stated net of value added tax.
Sales-based royalty income arising from licences of the
Company's intellectual property is recognised in accordance with
the terms of the underlying contract and is based on net sales
value of product sold by Eden's licensees. It is recognised when
the underlying sales occur.
Upfront and annual payments made by customers at commencement
and for renewal of distribution and other agreements are recognised
in accordance with the terms of the agreement. Where there is no
ongoing obligation on the Company under the agreement, the payment
is recognised in full in the period in which it is made. Where
there is an ongoing obligation on the Company, the separate
performance obligations under the agreement are identified and
revenue allocated to each performance obligation. Revenue is then
recognised when a corresponding performance obligation has been
met.
Each sale of a licence by the Company is assessed to determine
whether the licence is distinct from the sale of other goods and
services, and whether the licence granted provides use of the
Company's intellectual property as it exists at that point in time,
with no ongoing obligation on the Company, or alternatively
provides access to the intellectual property as it develops over
time. Where the Company has discharged all of its ongoing
obligations associated with the licence granted, revenue is
recognised on invoicing of the licence fee payment at which point
the customer can use and benefit from the licence. Where there is
an ongoing obligation on the Company, revenue is recognised in the
periods to which the obligations pertain.
Product sales are recorded once the ownership and related rights
and responsibilities are passed to the customer and the product is
made available to the partner to collect, or, if the Company is
responsible for the shipping, the product has been shipped to the
customer.
The following is a description of the principal activities from
which the Company generates its revenue.
Licensing fees
The Company receives licensing fees from partners who have taken
a licence for the right to use Eden's intellectual property,
usually defined by field of use and territory. These are identified
as the right to use as the Company does not have an obligation to
undertake activities that significantly affect the relevant
intellectual property.
Milestone payments
The Company receives milestone payments from other commercial
arrangements, including any fees it has charged to partners for
rights granted in respect of distribution agreements.
These agreements are bespoke and any such revenue is specific to
the particular agreement. Consequently, for each such agreement,
the nature of the underlying performance obligations is assessed in
order to determine whether revenue should be recognised at a point
in time or over time.
Revenue is then recognised based on the above assessment upon
satisfaction of the performance obligation.
The Corteva agreement entered into in the current year includes
milestone payments with GBP141,293 received in the current year.
These milestone payments have been assessed to relate to a
performance obligation in respect of provision of R&D services
and a licence to the developed product with the performance
obligation being satisfied at a point in time. As at year end, this
performance obligation had not been reached and, consequently, the
amounts received deferred as contract liability (presented within
Accruals and Deferred Income in note 19).
Further milestone payments are contractually due in the year
ending 31 December 2022. The performance obligation is expected to
be met no later than by 31 December 2023.
The second performance obligation relates to product sales and
will be accounted for in line with the product sales policy
disclosed below once the commercial sales have commenced.
R&D charges
The Company sometimes charges its partners for R&D costs
that it has incurred which usually relate to specific projects and
which it has incurred through a third party.
Upon agreement with a partner, or if some specific milestone is
met, then Eden will raise an invoice which is usually payable
between 30 and 120 days. Revenue is recognised upon satisfaction of
the underlying performance obligation.
Royalties
The Company receives royalties from partners who have entered
into a licence arrangement with Eden to use its intellectual
property and who have sold products, which then gives rise to an
obligation to pay Eden a royalty on those sales.
Generally, royalties relate to specific time periods, such as
quarterly or annual dates, in which product sales have been made.
Revenue is recognised in line with when these sales occur.
Once an invoice is raised by Eden, following the period to which
the royalties relate, payment is due to the Company is 30 to 60
days.
Product sales
Generally, where the Company has entered into a distribution
agreement with a partner, Eden is responsible for supplying product
to that partner once a sales order has been signed.
At that point, Eden has the product manufactured through a
third-party, toll manufacturer. At the point at which the product
is finished and is made available to the partner to collect, or, if
the Company is responsible for the shipping, the product has been
shipped, the partner is liable for the product and obliged to pay
Eden. Normal terms for product sales are 90 to 120 days. Returns
are not accepted and refunds are only made when product supplied is
notified as defective within 60 days.
The Group does not have any contract assets or liabilities other
than the liability in respect of the Corteva milestone payments
noted in the milestone section (2020: none).
1.5 Intangible assets other than goodwill
Intellectual property, including development costs, is
capitalised and amortised on a straight-line basis over its
remaining estimated useful economic life of 9 years in line with
the remaining life of the Company's master patent, which was
originally 20 years, with additional Supplementary Protection
Certificates having been granted in the majority of the countries
in the EU in which Eden is selling Mevalone(R). The useful economic
lie of intangible assets is reviewed on an annual basis.
An internally generated intangible asset arising from the
Company's development activities is recognised only if all the
following conditions are met:
-- the project is technically and commercially feasible;
-- an asset is created that can be identified;
-- the Company intends to complete the asset and use or sell it
and has the ability to do so;
-- it is probable that the asset created will generate future economic benefits;
-- the development cost of the asset can be measured reliably; and
-- there are sufficient resources available to complete the project.
Internally-generated intangible assets are amortised on a
straight-line basis over their useful lives from the date they are
available for use. Where no internally-generated intangible asset
can be recognised, development expenditure is recognised as an
expense in the period in which it is incurred.
1.6 Property, plant and equipment
Property, plant and equipment are initially measured at cost and
subsequently measured at cost, net of depreciation and any
impairment losses.
Depreciation is recognised so as to write off the cost or
valuation of assets less their residual values over their useful
lives on the following bases:
Leasehold land and buildings Over the term of the lease
Fixtures and fittings 5 years straight line
Motor vehicles Over the term of the lease
The gain or loss arising on the disposal of an asset is
determined as the difference between the sale proceeds and the
carrying value of the asset, and is recognised in the income
statement.
1.7 Impairment of tangible and intangible assets
The Directors regularly review the intangible assets for
impairment and provision is made if necessary. Assets that are
subject to amortisation are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair
value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash-generating
units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at
each reporting date.
1.8 Inventories
Inventories are stated at the lower of cost and estimated
selling price, less costs to complete and sell. Cost is based on
the first-in-first-out principle. Cost comprises direct materials
and, where applicable, direct labour costs and those overheads that
have been incurred in bringing the inventories to their present
location and condition.
1.8 Inventories
Inventories are stated at the lower of cost and estimated
selling price, less costs to complete and sell. Cost is based on
the first-in-first-out principle. Cost comprises direct materials
and, where applicable, direct labour costs and those overheads that
have been incurred in bringing the inventories to their present
location and condition.
(i) Recognition and initial measurement
Trade receivables are initially recognised when they are
originated. All other financial assets and financial liabilities
are initially recognised when the Company becomes a part to the
contractual provisions of the instrument.
A financial asset (unless it is a trade receivable with a
significant financing component) or financial liability is
initially measured at fair value plus, for an item not at fair
value through profit or loss ("FVTPL"), transaction costs that are
directly attributable to its acquisition or issue. A trade
receivable without a significant financing component is initially
measured at the transaction price.
(ii) Classification and subsequent measurement
Financial assets
(a) Classification
On initial recognition, a financial asset is classified as
measured at amortised cost or FVTPL.
Financial assets are not reclassified subsequently to their
initial recognition unless the Company changes its business model
for managing financial assets in which case all affected financial
assets are reclassified on the first day of the first reporting
period following the change in the business model.
A financial asset is measured at amortised cost if it meets both
of the following conditions:
-- It is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
-- Its contractual terms give rise on specific dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
Investments in associates accounted for using the equity method
and subsidiaries are carried at cost less impairment.
(b) Subsequent measurement and gains and losses
Financial assets at amortised cost - These assets are
subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment
losses. Interest income, foreign exchange gains and losses and
impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
Financial liabilities and equity
Financial instruments issued by the Company are treated as
equity only to the extent that they meet the following two
conditions:
(a) they include no contractual obligations upon the Company to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Company; and
(b) where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments or is a derivative that will be settled by the
Company's exchanging a fixed amount of cash or other financial
assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Company's own shares, the
amounts presented in these financial statements for called up share
capital and share premium account exclude amounts in relation to
those shares.
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as at FVTPL if
it is classified as held-for-trading, it is a derivative or it is
designated as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit or loss.
Other financial liabilities are subsequently measured at amortised
cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognised in profit or loss.
Any gain or loss on derecognition is also recognised in profit or
loss.
Where a financial instrument that contains both equity and
financial liability components exists these components are
separated and accounted for individually under the above
policy.
(iii) Impairment
The Group recognises loss allowances for expected credit losses
(ECLs) on financial assets measured at amortised cost.
The Group measures loss allowances at an amount equal to
lifetime ECL, except for other debt securities and bank balances
for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased
significantly since initial recognition, which are measured as
12-month ECL.
Loss allowances for trade receivables and contract assets are
always measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a financial asset
has increased significantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable
information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information
and analysis, based on the Company's historical experience and
informed credit assessment and including forward-looking
information.
The Group considers a financial asset to be in default when:
-- the borrower is unlikely to pay its credit obligations to the
Company in full, without recourse by the Company to actions such as
realising security (if any is held); or
-- the financial asset is more than 120 days past due.
Lifetime ECLs are the ECLs that result from all possible default
events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default
events that are possible within the 12 months after the reporting
date (or a shorter period if the expected life of the instrument is
less than 12 months).
The maximum period considered when estimating ECLs is the
maximum contractual period over which the Group is exposed to
credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the
Group expects to receive). ECLs are discounted at the effective
interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial
assets carried at amortised cost are credit-impaired. A financial
asset is 'credit-impaired' when one or more events that have a
detrimental impact on the estimated future cash flows of the
financial asset have occurred.
Write-offs
The gross carrying amount of a financial asset is written off
(either partially or in full) to the extent that there is no
realistic prospect of recovery.
1.10 Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting end date.
The current tax charge includes any research and development tax
credits claimed by the Company.
R&D tax credits are accounted for by reference to IAS
12.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition of other assets and
liabilities in a transaction that affects neither the tax profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interest in joint ventures, except where the Company is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at each
reporting end date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on the tax rates that have been enacted or
substantively enacted by the end of the reporting period. Deferred
tax is charged or credited to profit or loss, except when it
relates to items charged or credited directly to equity, in which
case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when the Company
has a legally enforceable right to offset current tax assets
against current tax liabilities and when they relate to income
taxes levied by the same taxation authority and the Company intends
to settle its current tax assets and liabilities on a net
basis.
1.11 Employee benefits
The costs of short-term employee benefits are recognised as a
liability and an expense, unless those costs are required to be
recognised as part of the cost of inventories or non-current
assets.
The cost of any unused holiday entitlement is recognised in the
period in which the employee's services are received.
Termination benefits are recognised immediately as an expense
when the group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
1.12 Retirement benefits
Payments to defined contribution retirement benefit schemes are
charged as an expense as they fall due.
1.13 Share-based payments
The Company has applied the requirements of IFRS 2 Share-Based
Payments.
Unapproved share option scheme
The Company operated an unapproved share option scheme for
executive directors, senior management and certain employees up to
September 2017.
Long-Term Incentive Plan ('LTIP')
In 2017, the Company established a LTIP to incentivise the
Executives to deliver long-term value creation for shareholders and
ensure alignment with shareholder interest. Awards were made
annually and were subject to continued service and challenging
performance conditions usually over a three year period. The
performance conditions were reviewed on an annual basis to ensure
they remained appropriate and were based on increasing shareholder
value. Awards were generally structured as nil cost options with a
seven year lift after vesting.
Other than in exceptional circumstances, awards were up to 100%
of salary in any one year and granted subject to achieving
challenging performance conditions set at the date of the grant. A
percentage of the award vests for 'Threshold' performance with full
vesting taking place for equalling or exceeding the performance
'Target'. In between the Threshold and Target there may be pro rata
vesting.
The LTIP was adopted by the Board of Directors of Eden on 28
September 2017.
Where share options are awarded to employees, the fair value of
the options at the date of grant is charged to the Statement of
Profit or Loss and Other Comprehensive Income over the vesting
period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each
reporting date so that ultimately the cumulative amount recognised
over the vesting period is based on the number of options that
eventually vest. Market vesting conditions are factored into the
fair value of the options granted, as long as other vesting
conditions are satisfied. The cumulative expense is not adjusted
for failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before
they vest, the increase in fair value of the options, measured
immediately before and after the modification is also charged to
the Statement of Profit or Loss and Other Comprehensive Income over
the remaining vesting period.
In June 2021, the Company made changes to the LTIP. Details can
be found in the Remuneration Report.
The changes to the LTIP have been treated as a modification of
the existing plan for financial reporting purposes which means that
the Fair Value of previous awards has been recognised over their
remaining term and the incremental Fair Value of the new options
granted has been recognised separately over their own vesting
period.
The Company issued further options under the modified LTIP, in
excess of the replacement awards, details of which can be found on
note 22. These include graded vesting.
Share options which vest in instalments over a specified vesting
period (graded vesting) where the only vesting condition is service
from grant date to vesting date of each instalment are accounted
for as separate share-based payments. Each instalment's fair value
is assessed separately based on its term and the resulting charge
recognised over each instalment's vesting period.
Other share options
In addition to the LTIP grants, the Company awarded certain
employees approved options. Details of these options can be found
in note 22. The accounting treatment for these options is
consistent with that indicated under the LTIP section at the start
of this page.
1.14 Leases
At inception, the Group assesses whether a contract is, or
contains, a lease within the scope of IFRS 16. A contract is, or
contains, a lease if the contract conveys the right to control the
use of an identified asset for a period of time in exchange for
consideration. Where a tangible asset is acquired through a lease,
the group recognises a right-of-use asset and a lease liability at
the lease commencement date. Right-of-use assets are included
within property, plant and equipment, apart from those that meet
the definition of investment property.
The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at, or before, the commencement date, plus
any initial direct costs and an estimate of the cost of obligations
to dismantle, remove, refurbish or restore the underlying asset and
the site on which it is located, less any lease incentives
received.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of
the lease term. The estimated useful lives of right-of-use assets
are determined on the same basis as those of other property, plant
and equipment. The right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value
of the lease payments that are unpaid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. Lease payments included in the measurement of the
lease liability comprise fixed payments, variable lease payments
that depend on an index or a rate, amounts expected to be payable
under a residual value guarantee, and the cost of any options that
the Group is reasonably certain to exercise, such as the exercise
price under a purchase option, lease payments in an optional
renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a change
in: future lease payments arising from a change in an index or
rate; the Group's estimate of the amount expected to be payable
under a residual value guarantee; or the Group's assessment of
whether it will exercise a purchase, extension or termination
option. When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced to
zero.
The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases of machinery that have a
lease term of 12 months or less, or for leases of low-value assets
including IT equipment. The payments associated with these leases
are recognised in profit or loss on a straight-line basis over the
lease term.
1.15 Grants
Government grants are recognised when there is reasonable
assurance that the grant conditions will be met and the grants will
be received.
1.16 Foreign exchange
Transactions in currencies other than pounds sterling are
recorded at the rates of exchange prevailing at the dates of the
transactions. At each reporting end date, monetary assets and
liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting end date.
Gains and losses arising on translation are included in the income
statement for the period.
Whilst the majority of the Company's revenue is in Euros, the
Company also incurs a significant level of expenditure in that
currency. As such, the Company does not currently use any hedging
facilities and instead chooses to keep some of its cash at the bank
in Euros.
1.17 Research and development
Expenditure on research activities is recognised as an expense
in the period in which it is incurred.
1.18 Defined contribution plan
A defined contribution plan is a post-employment benefit plan
under which the Company pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined
contribution pension plans are recognised as an expense in the
income statement in the periods during which services are rendered
by employees.
1.19 Financial risk management
The Company's activities expose it to a variety of financial
risks: market risks (including currency risk and interest rate
risks), credit risk and liquidity risk. Risk management focuses on
minimising any potential adverse effect on the Company's financial
performance and is carried out under policies approved by the Board
of Directors.
2 Adoption of new and revised standards and changes in
accounting policies
(a) New standards, amendments and interpretations
There has been one newly effective amendment to standards during
the year.
-- Amendments to IFRS 9 'Financial Instruments', IAS 39
'Financial Instruments: Recognition and Measurement', IFRS 7
'Financial Instruments: Disclosures, IFRS 4 'Insurance Contracts',
IFRS 16 'Leases' related to interest rate benchmark reform (phase
two) and the issues that arise from the implementation of the
reforms, including the replacement of one benchmark with an
alternative one.
(b) New standards, amendments and interpretations issued but not
effective and not adopted early
A number of new standards, amendments to standards and
interpretations which are set out below are effective for annual
periods beginning after 1 January 2022 and have not been applied in
preparing these consolidated financial statements.
-- Amendment to IFRS 3 'Business combinations' to update
references to the Conceptual Framework for Financial Reporting
without changing the accounting requirements for business
combinations.
-- Amendments to IFRS 9 'Financial Instruments', IAS 39
'Financial Instruments: Recognition and Measurement', IFRS 7
'Financial Instruments: Disclosures, IFRS 4 'Insurance Contracts',
IFRS 16 'Leases' related to interest rate benchmark reform (phase
two) and the issues that arise from the implementation of the
reforms, including the replacement of one benchmark with an
alternative one.
-- Amendment to IFRS 16 'Leases' which provides an optional
practical expedient for lessees from assessing whether a rent
concession related to COVID-19 is a lease modification.
-- IFRS 17 'Insurance contracts' which establishes the
principles for the recognition, measurement, presentation and
disclosure of insurance contracts and supersedes IFRS 4 'Insurance
Contracts'
-- Amendments to IAS 1 'Presentation of financial statements' on
classification of liabilities which is intended to clarify that
liabilities are classified as either current or non-current
depending upon the rights that exist at the end of the reporting
period.
-- Amendments to IAS 16 'Property, plant and equipment' to
prohibit the deduction from cost of property, plant and equipment
amounts received from selling items produced while preparing the
asset for its intended use with any such sales and related cost
recognised in profit or loss.
-- Amendments to IAS 37 'Provisions, contingent liabilities and
contingent assets' to specify which costs a company includes when
assessing whether a contract will be loss making.
-- Annual improvements to make minor amendments to IFRS 1
'First-time adoption of IFRS', IFRS 9 'Financial Instruments', IAS
41 'Agriculture' and amendments to the illustrative examples
accompanying IFRS 16 'Leases'.
The Directors anticipate that at the time of this report none of
the new standards, amendments to standards and interpretations are
expected to have a material effect on the financial statements of
the Group or parent Company.
3 Critical accounting estimates and judgements
The Company makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk to the carrying amounts of
assets and liabilities within the next financial year are discussed
below:
Going concern
The Directors have considered the ability of the Company to
continue as a going concern and this is considered to be a
significant judgement made by the Directors in preparing the
financial statements.
The ability of the Company to continue as a going concern is
ultimately dependent upon the amount and timing of cash flows
arising from the exploitation of the Company's intellectual
property and the availability of existing and/or additional funding
to meet the short term needs of the business until the
commercialisation of the Company's portfolio is reached. The
Directors consider it is appropriate for the financial statements
to be prepared on a going concern basis based on the estimates they
have made.
Associate
A judgement has been made that Eden exerts significant influence
on TerpeneTech (UK) such that it is an associate company and, as
such, adoption of equity accounting is appropriate.
COVID-19
The Company has made accounting judgements and estimates based
on there being minimal impact of COVID-19 on the business in the
long term. This is impacting, in particular, the forecasts used as
the basis for intangibles impairment review, investment impairment
review and going concern. Clearly, this is still a degree of
uncertainty as to exactly how and if the business could be impacted
and the Directors will continue to monitor the situation
closely.
Other accounting judgements
In addition to the above, the Company has made other judgements
which are considered of lesser significance.
Capitalised development costs and Intellectual property
The Directors have exercised a judgement that the development
costs incurred meet the criteria in IAS 38 Intangible Assets for
capitalisation. In making this judgement, the Directors considered
the following key factors:
-- The availability of the necessary financial resources and
hence the ability of the Company to continue as a going
concern.
-- The assumptions surrounding the perceived market sizes for
the products and the achievable market share for the Company.
-- The successful conclusion of commercial arrangements, which
serves as an indicator as to the likely success of the projects
and, as such, any need to potential impairment.
Significant judgement had to be exercised in respect of GBPnil
costs capitalised in the current year (2020: GBP59,222) and
therefore the Directors do not consider this to represent a
critical judgment. There has been no research and development
expenditure recognised as an expense in the current year in the
P&L in excess of the amortisation of intangible assets as
disclosed in note 12 (2020: GBPnil).
4 Revenue and Segmental Information
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 allocation 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 allocated to Agrochemicals, being
the Company's primary focus.
The segment information for the year ended 31 December 2021 is
as follows:
Agrochemicals Consumer Animal Total
products health
-------------- ---------- -------- ------------
Revenue GBP GBP GBP GBP
-------------- ---------- -------- ------------
Milestone payments 5,250 - - 5,250
-------------- ---------- -------- ------------
R & D charges - 7,760 - 7,760
-------------- ---------- -------- ------------
Royalties 57,170 36,131 - 93,301
-------------- ---------- -------- ------------
Product sales 1,122,269 - - 1,122,269
-------------- ---------- -------- ------------
Total revenue 1,184,689 43,891 - 1,228,580
-------------- ---------- -------- ------------
Adjusted EBITDA (2,021,602) 43,891 - (1,977,711)
-------------- ---------- -------- ------------
Share Based Payments (640,597) - - (640,597)
-------------- ---------- -------- ------------
EBITDA (2,662,199) 43,891 - (2,618,308)
-------------- ---------- -------- ------------
Amortisation (421,358) (13,272) - (434,630)
-------------- ---------- -------- ------------
Depreciation (155,342) - - (155,342)
-------------- ---------- -------- ------------
Finance costs, foreign
exchange and investment
revenues (129,223) - - (129,223)
-------------- ---------- -------- ------------
Impairment of investment - - - -
in associate
-------------- ---------- -------- ------------
Income Tax 618,137 - - 618,137
-------------- ---------- -------- ------------
Share of Associate's loss - (58,177) - (58,177)
-------------- ---------- -------- ------------
(Loss)/Profit for the
Year (2,749,985) (27,558) - (2,777,543)
-------------- ---------- -------- ------------
Total Assets 15,004,888 22,197 - 15,027,085
-------------- ---------- -------- ------------
Total assets includes:
-------------- ---------- -------- ------------
Additions to Non-Current
Assets 1,802,660 - - 1,802,660
-------------- ---------- -------- ------------
Total Liabilities 2,153,649 43,961 - 2,197,610
-------------- ---------- -------- ------------
Please note the Consumer products segment was previously
referred to as Human health and biocides.
The segment 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
-------------- ---------- -------- ------------
Adjusted EBITDA (1,528,934) 36,470 - (1,492,464)
-------------- ---------- -------- ------------
Share Based Payments (120,380) - - (120,380)
-------------- ---------- -------- ------------
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 (2,286,220) 23,196 - (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
-------------- ---------- -------- ------------
2021 2020
GBP GBP
Revenue analysed by geographical market
UK 83,891 16,211
Europe 1,144,689 1,352,777
1,228,580 1,368,988
The above analysis represents sales to the Group's direct
customers who further distribute these products to their end
markets.
Revenues of approximately GBP1,036,156 (2020: GBP1,297,922) are
derived from three customers who each account for greater than 10%
of the Group's total revenues:
2021 2021 2020 2020
Customer GBP % GBP %
A 900,364 73.3 741,609 54.2
-------- ------ -------- ------
B 134,192 10.9 230,412 16.8
-------- ------ -------- ------
C 1,600 0.1 325,901 23.8
-------- ------ -------- ------
5 Operating loss
2021 2020
GBP GBP
Operating loss for the year is stated after charging/(crediting):
Government grants - (7,601)
Fees payable to the Company's auditor for
the audit of the Company's financial statements 55,000 40,000
Depreciation of right-of-use assets (included
within administrative expenses) 98,287 57,346
Impairment of investment in associate - 299,521
Amortisation of intangible assets 434,630 552,809
Share-based payments 640,597 120,380
Government grants related to amounts received in respect of the
Coronavirus Job Retention Scheme.
6 Employees
The average monthly number of persons (including directors)
employed by the group during the year was:
2021 2020
Number Number
Management 4 4
Operational 12 7
16 11
Their aggregate remuneration comprised:
2021 2020
GBP GBP
Wages and salaries 1,422,841 1,104,400
Social security costs 172,142 131,158
Pension costs 53,836 51,056
Benefits in kind 5,826 5,562
Share based payment charge 678,069 94,176
2,332,714 1,386,352
7 Directors' remuneration
2021 2020
GBP GBP
Remuneration for qualifying services 656,194 618,350
Company pension contributions to defined contribution
schemes 31,009 28,990
Non-executive Directors' fees 85,000 78,333
Benefits in kind 5,826 5,562
Share based payment charge relating to all
Directors 632,836 94,176
1,410,865 825,411
The number of Directors for whom retirement benefits are
accruing under defined contribution schemes amounted to 2 (2020 -
2).
The number of Directors who are entitled to receive shares under
long term incentive schemes during the year is 2 (2020 - 2).
Remuneration disclosed above includes the following amounts paid
to the highest paid Director:
2021 2020
GBP GBP
Remuneration for qualifying services 376,972 366,602
The Executive Directors are considered to also be the key
management personnel of the Company and Group. Details of
Directors' share options can be found in the Remuneration
report.
2021 Salary Bonus Fees Pension Share Total
Based Payments
GBP GBP GBP GBP GBP GBP
A Abrey 190,000 79,800 - 13,297 271,256 554,353
S Smith 253,000 106,260 - 17,712 361,580 738,552
R Cridland - - 40,000 - - 40,000
L van der
Broek - - 45,000 - - 45,000
443,000 186,060 85,000 31,009 632,836 1,377,905
======== ======== ======= ======== ================ ==========
2020 Salary Bonus Fees Pension Share Total
Based Payments
GBP GBP GBP GBP GBP GBP
A Abrey 180,000 88,200 - 12,538 39,872 320,610
S Smith 235,000 115,150 - 16,452 54,304 420,906
R Cridland - - 36,666 - - 36,666
L van der
Broek - - 41,667 - - 41,667
-------- -------- ------- -------- ---------------- ----------
415,000 203,350 78,333 28,990 94,176 819,849
======== ======== ======= ======== ================ ==========
8 Investment income
2021 2020
GBP GBP
Interest income
Bank deposits 98 5,725
Total interest income for financial assets that are not held at
fair value through profit or loss is GBP98 (2020: GBP5,725).
9 Finance costs and foreign exchange (gains)/losses
2021 2020
GBP GBP
Interest on lease liabilities 32,074 23,550
Interest on bank overdrafts and loans - 450
Finance costs 32,074 24,000
Exchange differences on working capital 75,254 (39,498)
Effect of exchange rate fluctuations on cash 21,993 3,792
Exchange losses and (gains) 97,247 (35,706)
10 Income tax income
2021 2020
GBP GBP
Current tax
UK corporation tax on profits for the
current period (572,585) (285,108)
Adjustments in respect of prior periods (45,552) -
Total UK current tax (618,137) (285,108)
The charge for the year can be reconciled to the loss per the
income statement as follows:
2021 2020
GBP GBP
Loss (3,395,680) (2,548,132)
Expected tax credit based on a corporation
tax rate of 19% (2019: 19.00%) (645,179) (484,145)
Ineligible fixed asset differences 11,639 32,067
Expenses not deductible for tax purposes 129,845 88,498
Additional deduction for R&D expenditure (424,074) (211,159)
Surrender of tax losses for R&D tax
credit refund 177,699 88,481
Adjustment in respect of prior years (45,552) -
Deferred tax not recognised 177,485 201,150
Taxation credit for the year (618,137) (285,108)
The March 2020 Budget announced that a corporation tax rate of
19% would continue to apply with effect from 1 April 2020, and this
change was substantively enacted on 17 March 2020. The March 2021
Budget announced that a corporation tax rate of 25% would apply
with effect from 1 April 2023. This was substantively enacted on 24
May 2021. As this change was not substantively enacted at the
balance sheet date, it has not been reflected in the measurement of
deferred tax balances at the period end.
The taxation credit for the year represents the research and
development credit for the year ended 31 December 2021.
The current tax recoverable as at 31 December 2021 represents
R&D tax credits and is made up as follows:
2021 2020
GBP GBP
Current tax
R & D cash tax credit for the current
period (572,585) (285,108)
R & D cash tax credit for the prior period (330,660) -
Total UK current tax recoverable (903,245) (285,108)
Deferred Tax
In the year, a deferred tax liability in respect of fixed asset
temporary differences of GBP1,237,820 has been recognised. This has
been offset fully by partial recognition of deferred tax asset from
trading losses brought forward, resulting in a GBPnil deferred tax
balance in the Statement of Financial Position.
The losses carried forward, after the above offset, for which no
deferred tax asset has been recognised, amount to approximately
GBP21,214,533 (2020: GBP22,379,505).
The unprovided deferred tax asset of GBP4,030,761 (2020:
GBP4,265,891) arises principally in respect of trading losses. It
has been calculated at 19% (2020: 19%) and has not been recognised
due to the uncertainty of timing of future profits against which it
may be realised.
11 Earnings per share
2021 2020
GBP GBP
Weighted average number of ordinary shares
for basic and diluted earnings per share 380,340,229 344,629,577
=========== ===========
Earnings (all attributable to equity shareholders of the Company)
Loss for the period (2,777,543) (2,270,347)
=========== ===========
Basic earnings per share (0.73p) (0.66p)
Diluted earnings per share (0.73p) (0.66p)
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted
average number of shares adjusted to assume the conversion of all
dilutive potential ordinary shares.
There were 11,018,738 (2020: nil) potential ordinary shares at
the year end which were not included in the calculation of the
diluted EPS because they were antidilutive for the period
presented.
12 Intangible assets
Group
Licences Development Intellectual Total
and trademarks costs property
GBP GBP GBP GBP
Cost
At 1 January 2020 447,351 5,059,621 9,181,324 14,688,296
Additions 1,545 1,564,785 134,957 1,701,287
At 31 December 2020 448,896 6,624,406 9,316,281 16,389,583
Additions 7,788 1,525,734 91,405 1,624,927
At 31 December 2021 456,684 8,150,140 9,407,686 18,014,510
Amortisation and impairment
At 1 January 2020 437,751 2,179,331 6,490,209 9,107,291
Charge for the year 11,145 315,192 226,472 552,809
At 31 December 2020 448,896 2,494,523 6,716,681 9,660,100
Charge for the year - 214,682 219,948 434,630
At 31 December 2021 448,896 2,709,205 6,936,629 10,094,730
Carrying amount
At 31 December 2021 7,788 5,440,935 2,471,057 7,919,780
At 31 December 2020 - 4,129,883 2,599,600 6,729,483
Company
Licences Development Intellectual Total
and trademarks costs property
GBP GBP GBP GBP
Cost
At 1 January 2020 447,351 5,059,621 9,048,581 14,555,553
Additions 1,545 1,564,785 134,957 1,701,287
At 31 December 2020 448,896 6,624,406 9,183,538 16,256,840
Additions 7,788 1,525,734 91,405 1,624,927
At 31 December 2021 456,684 8,150,140 9,274,943 17,881,767
Amortisation and impairment
At 1 January 2020 437,751 2,179,331 6,490,209 9,107,291
Charge for the year 11,145 315,192 213,198 539,535
At 31 December 2020 448,896 2,494,523 6,703,407 9,646,826
Charge for the year - 214,682 206,676 421,358
At 31 December 2021 448,896 2,709,205 6,910,083 10,068,184
Carrying amount
At 31 December 2021 7,788 5,440,935 2,364,860 7,813,583
At 31 December 2020 - 4,129,883 2,480,131 6,610,014
Intellectual property represents intellectual property in
relation to use of encapsulated terpenes in agrochemicals. The
remaining useful economic life of that asset is 9 years.
An annual impairment review is undertaken by the Board of
Directors. The Directors have considered the progress of the
business in the current year, including a review of the potential
market for its products, the progress the Company has made in
registering its products and other key commercial factors to inform
the review.
Of GBP7,919,780 carrying amount of intangible assets,
GBP7,813,583 has been allocated to the Agrochemicals Cash
Generating Unit (CGU). The remaining intangible assets have been
allocated to the Consumer products CGU for which no impairment
indicators have been identified. The Agrochemicals CGU has been
tested for impairment as it is the only CGU with intangible assets
not yet available for use.
The Directors have prepared a discounted cash-flow forecast,
based on product sales forecasts including those provided by the
Company's commercial partners, and have taken into account the
market potential for Eden's products and technologies using third
party market data that Eden has acquired licences to.
The forecast covers a period of 9 years, with no terminal value,
reflecting the useful economic life of the patent in respect of the
underlying technology. Financial forecasts for 2022 are based on
the approved annual budget. Financial forecasts for 2023-2028 are
based on the approved long-term plan. Financial forecasts for
2029-2030 are extrapolated based on the long-term growth rate of
2%.
The estimated recoverable amount of the CGU exceeded its
carrying amount by GBP8.3m and based on the review carried out
management is satisfied that intangible assets are not
impaired.
As set out in the Strategic Report, the business is in a
critical phase of its development as the development of products is
transitioned to revenue generation. The value of the CGU is
supported by forecasts of continued revenue growth of existing
products and the successful introduction and growth of sales of
products currently under development.
The key assumptions of the forecast are the future cash flows,
driven primarily by level of sales, and the discount rate. The
discount rate is estimated using pre-tax rates that reflect current
market assessments of the time value of money and the risk specific
to the CGU. The rate used was 12.4% (2020: 10%). The increase in
the rate reflects the wider market movements as based on the
comparator group as well as increased forecasting risk given the
underperformance in the current year. This is offset by a slight
reduction in the discount rate in respect of the impact of COVID-19
which has been incorporated into the forecast cash flows given
greater clarity since prior year.
The impact of increasing the discount rate by 1.6%, which is
considered a reasonably possible change, would be a decrease in the
recoverable amount by GBP1.9m. The discount rate would have to
increase to 28.9% to reduce the headroom to GBPnil which is not
considered likely.
The average annual growth rate has been assumed at 51% (2020:
48%), reflecting the latest forecasts based on information provided
by customers and own market analysis. The rate stands at 98% up to
2025, reflecting commercialisation of new products in the period,
reducing to 14% from 2026 onwards.
A reduction in growth from year 6 onwards to the long-term
growth rate for the Insecticides product (the sole product with
growth in excess of the long-term growth rate after year 5), which
is considered a reasonably possible change, would reduce the
recoverable amount by GBP5.3m.
Forecast sales would have to reduce by an average of,
approximately, 22% per annum to reduce headroom to GBPnil, which is
not considered likely.
13 Property, plant and equipment
Consolidated and Company
Fixtures Total
and fittings
GBP GBP
Cost
At 1 January 2020 - -
Additions - owned 200,758 200,758
At 31 December 2020 200,758 200,758
Additions - owned 101,269 101,269
At 31 December 2021 302,027 302,027
Accumulated depreciation and
impairment
At 1 January 2020 - -
Charge for the year 12,693 12,693
At 31 December 2020 12,693 12,693
Charge for the year 57,056 57,056
At 31 December 2021 69,749 69,749
Carrying amount
At 31 December 2021 232,278 232,278
At 31 December 2020 188,065 188,065
14 Right-of-Use Assets
Consolidated and Company
Land Motor Total
and buildings vehicles
GBP GBP GBP
Cost
At 1 January 2020 78,668 35,865 114,533
Additions 417,521 - 417,521
Disposals (78,668) - (78,668)
-------------- --------- --------
At 31 December 2020 417,521 35,865 453,386
Additions 26,256 50,208 76,464
Disposals - - -
-------------- --------- --------
At 31 December 2021 443,777 86,073 529,850
Accumulated depreciation and impairment
At 1 January 2020 39,334 13,449 52,783
Charge for the year 48,380 8,966 57,346
Eliminated on disposal (51,353) - (51,353)
-------------- --------- --------
At 31 December 2020 36,361 22,415 58,776
Charge for the year 83,504 14,783 98,287
-------------- --------- --------
At 31 December 2021 119,865 37,198 157,063
Carrying amount
At 31 December 2021 323,912 48,875 372,787
At 31 December 2020 381,160 13,450 394,610
15 Investments in associates
Current Non-current
2021 2020 2021 2020
GBP GBP GBP GBP
Investments in associates - - 361,688 419,865
Details of the Group's associates at 31 December 2021 are as
follows:
Name of undertaking Registered Principal Class % held
office activities of shares
held
Direct Voting
Research and
experimental
TerpeneTech United development
(UK) Kingdom on biotechnology Ordinary 29.90 29.90
2021 2020
GBP GBP
Non-current assets 440,601 502,954
Current assets 287,576 237,697
Non-current liabilities (98,806) (98,806)
Current liabilities (269,026) (213,670)
---------- ----------
Net assets (100%) 360,345 428,175
Company's share of net assets 107,743 151,352
Separable intangible assets 140,817 155,385
Goodwill 412,649 412,649
Impairment of investment in associate (299,521) (299,521)
---------- ----------
Carrying value of interest in associate 361,688 419,865
Revenue 361,307 279,185
100% of loss after tax (145,849) (52,790)
29.9% of loss after tax (43,609) (15,784)
Amortisation of separable intangible (14,568) (14,568)
---------- ----------
Company's share of loss including amortisation
of separable intangible asset (58,177) (30,352)
The associate is included in the Consumer Products operating
segment.
TerpeneTech Limited's ("TerpeneTech (UK)") registered office is
Kemp House, 152 City Road, London, EC1V 2NX and its principal place
of business is 3 rue de Commandant Charcot, 22410, St Quay
Portrieux, France.
The Directors have considered the progress of the business in
the current year, including a review of the potential market for
its products, the progress TerpeneTech (UK) has made in registering
its products and other key commercial factors to determine whether
any indicators of impairment exist. As a result of identification
of indicators of impairment, an impairment review of the investment
in TerpeneTech (UK) was undertaken by the Board of Directors.
The Directors have used discounted cash-flow forecasts, based on
product sales forecasts provided by TerpeneTech (UK), and have
taken into account the market potential for those products. These
forecasts cover a 9-year period, with no terminal value, in line
with the patent of the underlying technology.
The key assumptions of the forecast are the growth rate and the
discount rate. The discount rate is estimated using pre-tax rates
that reflect current market assessments of the time value of money
and the risk specific to the asset. The rate used was 15% (2020:
15%). The use of the same discount rate reflects, in addition to
the wider market movements, a reduction in uncertainty in the
head-lice sales, reflecting conclusion of negotiations with a
distributor as well as in geraniol sales, following another year of
double digit growth, offset by increased forecasting risk as the
company failed to fully meet the forecast performance for another
year.
Based on the review the Directors carried out, it was determined
that the Investment was not impaired and, as such, no impairment
charge (2020: GBP299,521) was recognised.
The impairment in 2020 was primarily due to the impact of
COVID-19 which resulted in a delay in the launch of the head-lice
product and which significantly impacted the head-lice product
market and, consequently, the forecast level of sales. This impact
is exacerbated by the limited forecast period.
An increase in the discount rate of 1.9% would result in an
increase in impairment of GBP27,890.
The growth rates are derived from discussions with the Company's
commercial partner, TerpeneTech (UK), as described above.
The average annual growth rate has been assumed at 21% (2020:
32%). The majority of this growth arises in the first 3 years of
the forecast, reflecting primarily the initial commercialisation of
the head-lice product, resulting in the average growth rate over
that period of 46%, reducing to 9% for the remainder of the
forecast period. The average annual growth rate of existing
business stands at 13% (2020: 4%).
An annual reduction of 20% in the forecast head-lice product
sales over the entire forecast period would result in impairment of
GBP7,101.
A reduction to growth rate of the existing business in the first
5 years of the forecast to the growth observed in the prior year
would result in impairment of GBP91,563.
The Directors have also considered whether any reasonable change
in assumptions would lead to a material change in impairment
recognised and are satisfied that this is not the case.
16 Subsidiaries
Details of the Company's subsidiaries at 31 December 2021 are as
follows:
Name of undertaking Registered office Principal Class of % Held
activities
shares held Direct Voting
TerpeneTech Sale of biocide
Limited Republic of Ireland products Ordinary 50.00 50.00
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).
Eden Research Europe Limited, whose registered office is 108 Q
House, Furze Road, Sandyford, Dublin, Ireland, was incorporated on
18 November 2020 and is wholly owned by both Eden Research plc.
Non-controlling interests
The following table summarises the information relating to the
Group's subsidiary with material non-controlling interest, before
intra-group eliminations:
2021 2020
GBP GBP
NCI percentage 50% 50%
Non-current assets 106,199 119,471
Current assets - -
Non-current liabilities - -
Current liabilities (43,962) (80,093)
-------- --------
Net (liabilities)/assets (100%) 62,237 39,378
Carrying amount of NCI
Revenue 36,131 27,919
Profit after tax 22,859 14,647
OCI - -
-------- --------
Total comprehensive income 22,859 14,647
Cash flows from operating activities - -
Cashflows form investing activities - -
Cashflows from financing activities - -
-------- --------
Net increase / (decrease) in cash and cash equivalents - -
-------- --------
Dividends paid to non-controlling interests - -
-------- --------
17 Inventories
Group and Company
2021 2020
GBP GBP
Finished goods 521,351 224,422
18 Trade and other receivables
Group Company
2021 2020 2021 2020
GBP GBP GBP GBP
Trade receivables 693,948 909,452 693,948 909,452
VAT recoverable 104,760 242,187 104,760 242,187
Other receivables 65,957 57,619 149,957 57,619
Prepayments and accrued
income 21,922 187,050 21,922 235,050
886,587 1,396,308 970,587 1,444,308
Trade receivables disclosed above are measured at amortised
cost. The Directors consider that the carrying amount of trade and
other receivables approximates their fair value.
19 Trade and other payables
Group Company
2021 2020 2021 2020
GBP GBP GBP GBP
Current
Trade payables 1,147,823 794,439 1,147,823 794,439
Accruals and deferred income 440,416 250,017 440,416 250,017
Social security and other
taxation 45,495 43,186 45,495 43,186
Other payables 77,784 367,313 33,823 287,220
1,711,518 1,454,955 1,667,557 1,374,862
Non-current
Other payables (note 22,
'Xinova liability') 87,740 125,212 87,740 125,212
87,740 125,212 87,740 125,212
20 Lease liabilities
2021 2020
Maturity analysis GBP GBP
Within one year 128,553 117,204
In two to five years 307,275 385,388
Total undiscounted liabilities 435,828 502,592
Future finance charges and other adjustments (37,476) (87,344)
Lease liabilities in the financial statements 398,352 415,248
Lease liabilities are classified based on the amounts that are
expected to be settled within the next 12 months and after more
than 12 months from the reporting date, as follows:
2021 2020
GBP GBP
Current liabilities 99,924 84,350
Non-current liabilities 298,428 330,898
398,352 415,248
2021 2020
Amounts recognised in profit or loss include GBP GBP
the following:
Interest on lease liabilities 32,074 23,550
21 Retirement benefit schemes
Defined contribution schemes
The Group operates a defined contribution pension scheme for all
qualifying employees. The assets of the scheme are held separately
from those of the group in an independently administered fund.
The total costs charged to income in respect of defined
contribution plans is GBP53,836 (2020 - GBP51,056).
22 Share-based payment transactions
Long-Term Incentive Plan ("LTIP")
Since September 2017 Eden has operated an option scheme for
executive directors, senior management and certain employees under
an LTIP which allows for certain qualifying grants to be HMRC
approved. Further details can be found in the Remuneration
Report.
2019 Award
On 28 June 2019, 5,891,111 shares were awarded under the LTIP
scheme to the Chief Executive Officer and the Chief Financial
Officer ("2019 Award").
The share-based payment charge for the 2019 Award is set out as
follows:
Financial year Share based
ended payment charge
31 December GBP
2017 27,210
2018 85,372
2019 110,743
2020 94,176
2021 51,909
2022 16,959
386,369
The following information is relevant in the determination of
the fair value of options granted under the 2019 Award.
2017 Award 2018 Award
Grant date 28/06/2019 28/06/2019
Number of awards 2,868,889 3,022,222
Share price 0.115 0.115
Exercise price GBPnil GBPnil
Expected dividend yield -% -%
Expected volatility 50.82% 50.82%
Risk free rate 0.614% 0.614%
80 80
Vesting period 2 years 3 years
Expected Life (from date of 2 years 3 years
grant)
LTIP Replacement Award
In 2021, the Company made changes to the LTIP in line with the
requirements of a fundraise completed in 2020. The new plan was
deemed a more appropriate scheme to incentivise management given
the Company's stage of development and replaced the 2019 Award,
which lapsed in its entirety.
Pursuant to the updated plan, in 2021 the Company granted
options over 10.5 million new Ordinary Shares, at a strike price of
6p each, in the amounts of 6 million awarded to Sean Smith and 4.5
million awarded to Alex Abrey. The options vested immediately and
lapse in three equal tranches in June 2022, June 2023 and June
2024. For the first five years following grant, no shares arising
from the exercise of these options may be sold unless the Company's
prevailing share price is equal to, or in excess of, 10p.
The shares arising from exercise of options are subject to a
one-year lock-in restriction, followed by a one-year orderly market
restriction.
For accounting purposes, the options granted under the LTIP
Replacement Award have been treated as a modification of the 2019
Award as per IFRS 2.
Where awards previously granted have been deemed to be modified,
IFRS 2 requires the share-based payment charge to comprise the
original fair value of the awards, together with an incremental
fair value.
A summary of the number of awards modified in the year ended 31
December 2021 and their fair values is set out in the table
below:
Fair Value of Awards Incremental Fair Incremental Fair
at 31 December 2021 Value GBP Value per Award GBP
2017 Awards 231,846 0.048
----------------- ---------------------
2018 Awards 229,998 0.046
----------------- ---------------------
Total 461,844
----------------- ---------------------
Share-based payment charge
The total share-based payment charge to be recognised by Eden in
respect of the LTIP Replacement Award in the year ended 31 December
2021 and subsequent periods are as follows:
2017 Awards 2018 Awards Total
Charge Original Replacement Original Replacement Annual
for grants Annual Annual Annual Annual GBP
during the GBP GBP GBP GBP
period
--------- ------------ --------- ------------ --------
31 Dec 21 17,735 231,846 34,174 229,998 513,753
--------- ------------ --------- ------------ --------
31 Dec 22 - - 16,959 - 16,959
--------- ------------ --------- ------------ --------
The following information is relevant in the determination of
the fair value of options granted under the LTIP Replacement
Award.
Replacement Awards
Grant date 30/06/2021
Number of awards 10,500,000
Share price GBP0.10
Exercise price GBP0.06
Expected dividend yield -%
Expected volatility 70%/59%/67%
Risk free rate 0.02%/0.02%/0.05%
80
Vesting period Nil
Expected Life (from date of grant) 0.5/1/1.5 years
As the options have been issued at a significant discount to the
share price, the expected exercise has been assumed to equal the
midpoint between the vest and lapse date.
2021 Award
Also in 2021, the Company made a further grant of options in
order to ensure continuity of long term incentive of options over
7,183,784 new Ordinary Shares in Eden, at a strike price of 10.37p
each, in the amounts of 4,102,703 awarded to Sean Smith and
3,081,081 awarded to Alex Abrey.
These grants expire on 31 July 2025 and vest as follows:
1/3 upon grant
1/3 12 months from the date of grant
1/3 24 months from the date of grant
The share-based payment charge for the year ended 31 December
2021 in respect of the above 2021 LTIP awards was GBP119,083.
In addition to the options granted under the LTIP, certain
employees were awarded approved options over a total of 996,220
shares. These have been issued at a strike price of 10-10.37p with
expiry date between 30 June 2022 and 30 June 2024. 640,664 of these
vested immediately with the remainder vesting over a 3-year period.
The share-based payments charge in respect of all these options for
the year ended 31 December 2021 was GBP45,233.
A summary of all the above options is set out in the table
below.
Options awards
Number of share Weighted average
options exercise price (pence)
2021 2020 2021 2020
Outstanding at 1 January 5,891,111 5,891,111 - -
Granted during the year 18,680,004 - 7 -
Exercised during the year - - - -
Lapsed during the year (5,891,111) - - -
----------- --------- ------------------- ----
Exercisable at 31 December 18,680,004 5,891,111 7 -
=========== ========= =================== ====
The exercise price of options outstanding at the end of the year
ranged between 1p and 10p (2020: GBPnil) and their weighted average
contractual life was 2.4 years (2020: 1.4 years.)
The share-based payment charge for the year, in respect of
options, was GBP678,069 (2020: GBPnil).
At the year end, of the options granted 13,680,006 were
unapproved (2020: nil) and 4,999,998 were approved (2020:
5,891,111).
Options granted prior to the 2017 LTIP
Prior to the implementation of the LTIP in 2017, Eden had
granted options to its Executive Directors, senior management and
certain employees, as follows:
Number of share options Weighted average
exercise price (pence)
2021 2020 2021 2020
Outstanding at 1 January 1,050,000 1,050,000 13 13
Granted during the year - - - -
Exercised during the
year - - - -
Lapsed during the year (1,050,000) - 13 -
Exercisable at 31 December - 1,050,000 - 13
For those options and warrants which were not granted under the
Company's 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.
For those options which were granted under the Company's 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.
Warrants
Number of share Weighted average
options exercise price (pence)
2021 2020 2021 2020
Outstanding at 1 January 2,989,865 2,989,865 19 19
Granted during the year - - - -
Exercised during the year - - - -
Lapsed during the year - - - -
Exercisable at 31 December 2,989,865 2,989,865 19 19
The exercise price of warrants outstanding at the end of the
year ranged between 12p and 30p (2020: 12p and 30p) and their
weighted average contractual life was 0.4 years (2020: 1.4 years.)
None of the warrants have vesting conditions.
The share-based payment charge for the year, in respect of
warrants, was GBPnil (2020: GBPnil). The weighted average fair
value of each warrant granted during the year was GBPnil (2020
Xinova liability
In September 2015, the Company entered into a Collaboration and
Licence agreement with Invention Development Management Company LLC
(part of Intellectual Ventures, now called Xinova LLC). As part of
this agreement, upon successful completion of a number of different
tasks, Xinova will be entitled to a payment which is calculated
using a percentage (initially 3.17%, reduced to 1.6% following the
fundraise in March 2020) of the fully diluted equity value, reduced
by cash and cash equivalents, of the Company on the date on which
payment becomes due which is expected to be 30 September 2025. This
has been accounted for as a cash-settled share-based payment under
IFRS 2.
An amount of GBP67,462, being the estimated fair value of the
liability due to Xinova, was recognised during 2016 and included as
a non-current liability, as disclosed in note 19 to the accounts.
It is not believed that the value of the services provided by
Xinova can be reliably measured, and so this amount was calculated
based on the Company's market capitalisation at 31 December 2016,
adjusted to reflect the percentage of work completed by Xinova at
that date based on a pre-determined schedule of tasks.
A reduction of GBP37,472 was made in the year (2020: charge of
GBP26,204), reflecting a reduction in the share price at the year
end, compared to the previous year.
At the year end, an amount of GBP87,704 (2020: GBP125,212) was
owed to Xinova and is shown in note 19 as non-current other
liabilities.
Please see note 34, Post Balance Sheet Events, for further
information
23 Share capital
2021 2020 2021 2020
Ordinary share Number Number GBP GBP
capital
Issued and fully
paid
Ordinary shares
of 1p each 380,340,229 380,240,229 3,803,402 3,803,402
On 18 March 2020, the Company issued 86,182,500 ordinary shares
at 6p each for a total consideration of GBP5,170,950 before
directly attributable costs.
On 19 March 2020, the Company issued 86,968,392 ordinary shares
at 6p each for a total consideration of GBP5,218,104 before
directly attributable costs.
Share issue costs of GBPnil (2020: GBP638,931) were incurred and
have been charged to the share premium account.
24 Share premium account
2021 2020
GBP GBP
At the beginning of the year 39,308,529 31,289,915
Issue of new shares - 8,018,614
At the end of the year 39,308,529 39,308,529
25 Warrant reserve
GBP
Balance at 1 January 2021 429,915
Share-based payment expense in respect of options
granted 678,069
Share-based payment expense in respect of options
lapsed (170,479)
Balance at 31 December 2021 937,505
The warrant reserve represents the fair value of share options
and warrants grants, and not exercised or lapsed, in accordance
with the requirements of IFRS 2 Share Based Payments.
26 Merger reserve
2021 2020
GBP GBP
At the beginning and end of the year 10,209,673 10,209,673
The merger reserve arose on historical acquisitions of
subsidiary undertakings for which merger relief was permitted under
the Companies Act 2006.
27 Non-controlling interest
2021 2020
GBP GBP
Non-controlling interest 31,119 19,689
The non-controlling interest arose from Eden Research plc's 50%
share in TerpeneTech (Ireland) Limited.
28 Other interest-bearing loans and borrowings - Group and
Company
Changes in liabilities, arising from financing activities are
presented below:
2021 2020
GBP GBP
Balance as at 1 January 415,248 69,499
Changes from financing cashflows
Payment of lease liabilities (90,388) (44,457)
Total changes from financing cashflows (90,388) (44,457)
Other changes
New leases
Inter 50,209 417,521
Adjustment to Right of Use Assets
Inter 23,283 -
Surrender of lease - (27,315)
Total other changes 73,492 390,206
Balance as at 31 December 398,352 415,248
29 Other leasing information
Amounts recognised in profit or loss as an expense during the
period in respect of lease arrangements are as follows:
2021 2020
GBP GBP
Expense relating to leases of low-value assets 740 334
Set out below are the future cash outflows to which the lessee
is exposed to that are reflected in the measurement of lease
liabilities:
2021 2020
Land and buildings GBP GBP
Within one year 92,143 74,783
Between two and five years 256,935 325,794
349,078 400,577
2021 2020
Leases apart from land and GBP GBP
buildings
Within one year 18,361 9,567
Between two and five years 30,914 5,104
49,275 14,671
The Group holds five leases, for two properties and three
vehicles. All leases have fixed lease repayments and remaining
terms of 3.5 years for the properties and 2.2 years for the
vehicles.
The incremental borrowing rate applied to lease liabilities
recognised in the statement of financial position at the date of
initial application of IFRS 16 was 4.75%.
Information relating to lease liabilities is included in note
20.
30 Capital risk management
The Group is not subject to any externally imposed capital
requirements.
31 Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, including
directors, is set out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures.
Group
During the year, Eden invoiced its associate, TerpeneTech (UK),
GBP7,760 for R&D charges (2020: GBP8,551) and accrued income of
GBP40,000 (2020: GBPnil) for minimum royalties due under the
headlice agreement.
Also, during the year Eden paid GBP8,787 (2020: GBP6,362) for
expenses on behalf of TerpeneTech (UK).
At the year end, a net amount of GBP165,644 was due from
TerpeneTech (UK) (2020: GBP128,983) to Eden. This amount is
included within Trade and Other Receivables.
At the year end, a net amount of GBP43,962 (2020: GBP80,093) was
due from TerpeneTech (Ireland) to TerpeneTech (UK). It represents
the amount due in respect of the intangible asset above, reduced by
fees receivable in respect of sales. This amount is included within
Trade and Other Payables.
Company
During the year, Eden invoiced its associate, TerpeneTech (UK),
GBP7,760 for R&D charges (2020: GBP8,551) and accrued income of
GBP40,000 (2020: GBPnil) for minimum royalties due under the
headlice agreement.
Also, during the year Eden paid GBP8,787 (2020: GBP6,362) for
expenses on behalf of TerpeneTech (UK).
Further, at year end, GBP36,000 has been accrued in respect of
management recharges from Eden to TerpeneTech (Ireland) (2020:
GBP48,000). An amount of GBP84,000 (2020: GBP48,000) is included
within the Company Trade and Other Receivables.
At the year end, a net amount of GBP165,644 was due from
TerpeneTech (UK) (2020: GBP128,983). This amount is included within
Trade and Other Receivables.
32 Financial risk management
Credit risk
2021 2020
GBP GBP
Cash and cash equivalents 3,829,369 7,286,503
Trade receivables 886,587 1,396,308
4,715,956 8,682,811
The average credit period for sales of goods and services is 206
days (2020: 242). No interest is charged on overdue trade
receivables. At 31 December 2021, trade receivables of GBP272,912
(2020: GBP200,840) were past due. During the year the Company wrote
off bad debts in the amount of GBPnil (2020: GBPnil).
Trade receivables of GBP563,273 (2020: GBP791,581) at the
reporting date were held in Euros and GBP104,866 (2020: GBP104,265)
were held in USD.
The Company's policy is to recognise loss allowances for
expected credit losses (ECLs) on financial assets measured at
amortised cost. The Group measures loss allowances for trade
receivables at an amount equal to lifetime ECL. When determining
whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating ECL,
the Group considered reasonable and supportable information that is
relevant and available without undue cost of effect. This includes
both quantitative and qualitative information and analysis, based
on the Group's historical experience and information credit
assessment and including forward-looking information.
The largest trade debtor at the year end is a well-established,
profitable business and long-term customer of the Company with whom
Eden has had no issue of collecting debts due before and does not
expect to have any going forward. In addition, TerpeneTech (UK),
Eden's associate company, owed gross GBP170,279 (2020: GBP174,952)
to Eden at the year-end.
TerpeneTech (UK), is a cash-positive business, albeit in its
infancy, with good shareholder support and, again, Eden has had no
issue of collecting debtors due from TerpeneTech (UK) before and
does not expect to have any going forward.
Considering these factors, the Directors consider the ECL to be
immaterial.
Credit risk
2021 2020
GBP GBP
Trade payables 1,147,823 794,439
Other payables 77,784 367,313
Other taxes and social security 45,495 43,186
Accruals and deferred income 440,416 250,017
1,711,518 1,454,955
The carrying amount of trade payables approximates their fair
value.
The average credit period on purchases of goods is 123 days. No
interest is charged on trade payables. The Company has policies in
place to ensure that trade payables are paid within the credit
timeframe or as otherwise agreed.
Maturity of financial liabilities (excluding lease liabilities)
The maturity profile of the group's financial liabilities at 31 December
2021 was as follows:
2021 2020
GBP GBP
In one year or less, or on demand 1,711,518 1,454,955
Over one year 87,740 125,212
1,799,258 1,580,167
Liquidity risk is managed by regular monitoring of the Company's
level of cash and cash equivalents, debtor and creditor management
and expected future cash flows. See note 1 for further details on
the going concern position of the Company. For details of lease
liabilities, see notes 20 and 29.
Market price risk
The company's exposure to market price risk comprises currency
risk exposure. It monitors this exposure primarily through a
process known as sensitivity analysis. This involves estimating the
effect on results before tax over various periods of a range of
possible changes in exchange rates. The sensitivity analysis model
used for this purpose makes no assumptions about any
interrelationships between such rates or about the way in which
such changes may affect the economies involved. As a consequence,
figures derived from the Company's sensitivity analysis model
should be used in conjunction with other information about the
Company's risk profile.
The Company's policy towards currency risk is to eliminate all
exposures that will impact on reported results as soon as they
arise. This is reflected in the sensitivity analysis, which
estimates that five and ten percentage point increases in the value
of sterling against all other currencies would have had minimal
impact on results before tax.
Capital risk management
The primary objective of the Company's capital management is to
ensure that it maintains healthy capital ratios in order to support
its business and maximise shareholder value.
The Company seeks to enhance shareholder value by capturing
business opportunities as they develop. To achieve this goal, the
Company maintains sufficient capital to support its business.
The Company manages its capital structure and makes adjustments
to it in light of changes in economic conditions.
The Company looks to maintain a reasonable debt position by
repaying debt or issuing equity, as and when it is deemed to be
required.
No changes were made in the objectives, policies or processes
for managing capital during the years ended 31 December 2021 and 31
December 2020.
The Company monitors capital using a gearing ratio, which is net
debt divided by total capital plus net debt. The Company's policy
is to keep the gearing ratio below 10% (2020: below 10%). The
Company includes within net debt, any interest bearing loans and
borrowings (none in current or prior year), any loans from a
venture partner (none in the current or prior year), trade and
other payables, less cash and cash equivalents.
33 Cash absorbed by operations
Consolidated
2021 2020
GBP GBP
Loss for the year after tax (2,777,543) (2,263,024)
Adjustments for:
Taxation charged/(credited) (618,137) (285,108)
Finance costs 122,311 24,000
Investment income (98) (5,725)
Foreign exchange currency losses 21,993 3,792
Amortisation and impairment of intangible
assets 434,630 552,809
Impairment of investment in associate - 299,521
Depreciation and impairment of property,
plant and equipment and right-of-use
assets 155,341 70,039
Share of associate's loss 58,177 30,352
Share-based payment expense 640,597 120,380
Movements in working capital:
(296,929)
Increase in inventories (155,998) (155,999)
Decrease/(increase) in trade and other
receivables 509,721 236,784
(Decrease)/increase in trade and other
payables 163,355 106,367
Cash absorbed by operations (1,586,582) (1,265,812)
Company
2021 2020
GBP GBP
Loss for the year after tax (2,764,402) (2,229,669)
Adjustments for:
Taxation charged/(credited) (618,137) (285,108)
Finance costs 122,311 24,000
Investment income (98) (5,725)
Foreign exchange currency losses 21,993 3,792
Amortisation and impairment of intangible
assets 421,358 539,535
Impairment of investment in associate - 299,521
Depreciation and impairment of property,
plant and equipment and right-of-use
assets 155,341 70,039
Share of associate's loss 58,177 30,352
Share-based payment expense 640,597 120,380
Movements in working capital:
(296,929)
Increase in inventories (155,998) (155,999)
Decrease/(increase) in trade and other
receivables 473,721 188,784
(Decrease)/increase in trade and other
payables 199,486 134,286
Cash absorbed by operations (1,586,582) (1,265,812)
34 Post balance sheet events
Xinova
After the year end, Eden was informed that Xinova had begun to
wind down its operations.
As a consequence, Eden began communications with an agent acting
on behalf of Xinova to effect the wind down in respect of the
liability owed to Xinova by Eden.
On 22 April 2022, Eden signed a 'full and final' settlement
agreement with Xinova which resulted in Eden paying an amount of
GBP43,870, which represented a 50% discount to the liability of
GBP87,740 as at 31 December 2021, in line with the then existing
contract.
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(END) Dow Jones Newswires
May 31, 2022 02:01 ET (06:01 GMT)
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