TIDMEDEN
RNS Number : 2360B
Eden Research plc
30 September 2022
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.
30 September 2022
Eden Research plc ("Eden" or "the Company")
Half Yearly Report
Eden Research plc (AIM: EDEN), the AIM-quoted company focused on
sustainable biopesticides and plastic-free formulation technology
for use in the global crop protection, animal health and consumer
products industries, announces its interim results for the six
months ended 30 June 2022.
Financial highlights
-- Revenue for the period of GBP1.04m (H1 2021: GBP0.79m), an increase of c. 32%
-- Product sales of GBP1.01m (H1 2021: GBP0.66m), an increase of c. 53%
-- Operating loss for the period of GBP1.3m (H1 2021: GBP1.8m)
-- Cash and cash equivalents of GBP1.9m (H1 2021: GBP5.8m)
-- Cash and cash equivalents at 31 August 2022 of GBP2.4m
following a tax refund and receipts from half-year end trade
debtors
-- On track to meet 2022 product sales revenue guidance of GBP1.4m
Business highlights
Expanding regulatory approvals in key territories, including the
US, and leveraging of high-value commercial agreements
-- Materially increased Eden's global addressable market with
label extensions and new regulatory approvals, most notably the
addition of the US following EPA approval, post-period end
o Other notable approvals included Mevalone(R) label extensions
in Italy (sold under the brand "3logy(R)", by Sipcam-Oxon)
-- Eden's new insecticide product heading towards
commercialisation with extensive registration and commercial
evaluation field trials ongoing in 2022
-- Commercialisation of the seed treatment product developed as
part of the Corteva project remains on track with commercial launch
possible in advance of the 2024 growing season (subject to
regulatory approvals)
-- Robust sales of Eden's products indicating that demand is returning to pre-pandemic levels
-- New distribution arrangements in key territories expected by year-end
Corporate highlights
New team additions reflecting Eden's next phase of growth and
ambition to capitalise on the abundance of new opportunities
-- Appointment of Richard Horsman as Non-Executive Director,
with effect from 1 September 2022. Richard brings over 25 years of
AIM and Main Market experience to the team
-- New Development Team Lead and Formulation Team members recruited
-- Strengthening of the Commercial Team underway
Lykele van der Broek, Chairman of Eden Research, commented:
"We reached the mid-part of 2022 on a firm footing, expanding
our regulatory approvals in key regions, advancing our strategic
partnerships with major industry players, and delivering robust
sales of our products, indicating a return to pre-pandemic demand
levels.
The authorisation of Cedroz(TM) and Mevalone(R) and their
associated active ingredients in the US after the period end has
been a particular highlight for us. As the Environmental Protection
Agency ("EPA") continues to ban a number of commonly used
conventional chemical pesticide products in recent years, US-based
farmers are in need of viable alternatives to keep up with the
growing demand for food. The approval of our biopesticide products,
which are based on naturally occurring substances, provide this
alternative, without compromising efficacy, yield or production
costs.
This development opens up significant revenue and growth
opportunities for us, with our total addressable market in the
region of $500 million. We now turn our attention to state level
approvals, focusing on California and Florida in the first
instance, which we expect to see in the coming months, followed by
the start of meaningful sales in 2023.
This year so far has also seen us continue to successfully
develop new product ranges, including our insecticide offering,
which has produced good field trial results to date in both our own
hands, and in the hands of potential commercial partners. Our
partnership to develop our seed treatment product with Corteva also
goes from strength to strength and we look forward to successfully
commercialising this offering as quickly as possible, subject to
regulatory clearance.
Despite ongoing macro-economic challenges, we are pleased with
the progress that has been made during the year so far. With our
new board and team additions, we are confident that we have the
talent and capabilities to capitalise on the significant and
growing market opportunity available for Eden across the globe. I
look forward to reporting further progress in the coming months as
we continue to work towards our strategic and financial goals."
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)
Victoria Ainsworth eden@hawthornadvisors.com
Stephen Atkinson
Chief Executive Officer's Statement
The first of half of 2022 has represented a period of progress
for Eden, and I am delighted to say we are beginning to see the
fruits of our commercial efforts with stronger sales.
Executing on our strategic objectives
At our recent AGM, we laid out four key strategic areas that we
are pursuing to take the Company forward into its next phase of
growth:
-- Diversification of our product portfolio, geographic
presence, target markets, and product uses
-- Enhancing our research, development and operations, and
self-reliance, through the expansion of our in-house capabilities,
optimising our supply chains, and reducing our time to market
-- Growth through new partnerships and collaborations with major
global and regional partners, as well as regulatory clearance in
new countries, crops, and diseases
-- Team expansion with added capacity in key strategic areas such as development and commercial
Eden has been delivering against these objectives in the
following ways:
1. Widening our global market opportunities
We are excited to be able to report federal approval from the
EPA received after the period end for distribution of our flagship
products, Mevalone(R) and Cedroz(TM), alongside our three
associated active ingredients, in one of the largest agricultural
markets in the world. This has been the result of over four years
of effort by our experienced regulatory and commercial teams who
worked tirelessly to ensure that Eden addressed the EPA's extensive
and evolving list of strict requirements. We are the first British
crop protection company to receive such approval for a
biopesticide, and we are, by far, the smallest company to achieve
the ambitious goal of registering three active ingredients and two
formulated products at once, thereby opening up one of the world's
most important markets for agricultural inputs.
Eden's naturally derived products represent a compelling
proposition for American farmers looking to navigate the
increasingly restrictive landscape of regulations whilst still
maintaining or increasing food production in a sustainable way. We
estimate this one addressable market alone to be worth in excess of
$500 million per annum. The next step in the process will be to
focus on local regulatory approval in the key states of California
and Florida, where many of the country's high-value crops are
grown. We expect these regulatory processes to be relatively short,
as we target the 2023 growing season.
Eden also received a label extension for Mevalone(R) in Italy
which is sold under the brand name "3logy(R)" by our commercial
partner Sipcam Oxon. This label extension has allowed Eden and
Sipcam to target two new fungal pathogens and add a wide range of
new crop types to the label. We estimate that this expansion of the
label for 3logy adds thousands of hectares of high-value crops to
our addressable market.
We are currently hard at work to further optimise our
distribution network, and we anticipate announcing new partnerships
in the coming months; all aimed at adding new territories or
expanding our market access in existing countries.
2. Expanding our product line and applicable uses
Our product development pipeline continues to progress. Examples
include our forthcoming insecticide product which we have been
conducting extensive field trials on this year. We are now at the
stage of receiving trial results and, in the meantime, we have sent
our product to a long list of third parties, including several
industry leaders, to undertake field trials of their own. We look
forward to sharing the outcome of these field trials in due course
as we prepare for registration and commercialisation.
In addition, field trials this growing season on our seed
treatment product, developed for commercialisation by Corteva, have
so far proven successful. We are looking to move forward with the
regulatory process in key markets as swiftly as possible. Our
aspiration is to launch this important new product in time for the
2024 growing season, although the process is subject to regulatory
approval by the relevant authorities across our targeted
geographies.
We are continually assessing applicable use of our biopesticide
products across crops outside our existing remit such as cannabis,
as well as the use of our proprietary technologies in the consumer
products and animal health industries.
3. New team additions to drive next phase of growth
Post-period, we welcomed Richard Horsman as a new Non-Executive
Director. Richard possesses an abundance of industry, commercial
and corporate acumen and expertise which will help drive Eden
through our next phase of growth. This not only applies to
maximising the potential of our existing opportunities, but also in
driving new opportunities that share synergies with our core
business.
Strong revenue and sales performance against year-end
guidance
Revenues for the first half of the year increased by
approximately 32% to GBP1.04m compared to GBP0.79m for H1 2021.
The focus for the business remains to grow revenue through
product sales which will ultimately provide a sustainable,
consistent source of income for the Company. Product sales
increased by approximately 53% to GBP1.01m compared to GBP0.66m for
H1 2021.
Earnings improved against H1 2021 with overall loss before tax
of GBP1.3m (H1 2021: GBP1.8m loss), but were flat against H1 2021
Adjusted EBITDA (i.e. EBITDA excluding Share Based Payments) with a
loss of GBP0.8m (H1 2021: GBP0.8m loss).
The cash position at half-year was GBP1.9m (H1 2021: GBP5.8m)
and GBP2.4m at 31 August 2022 following a tax refund and receipts
from half-year end trade debtors.
Our cash generation is supported by the material progress made
along various development lines, as well as the growing number of
additional commercial agreements and regulatory approvals in new
territories.
We continue to aggressively manage our cash position and always
aim to achieve operational efficiencies. Much of the work that has
been brought in-house was previously contracted to third parties,
and so many of our internal costs have offset what were previously
larger third-party expenditures. By bringing certain strategic
capabilities in-house, we have also been able to significantly
reduce development time whilst building internal know-how and
strengthening our strategic capabilities in support of future
growth.
Dividend
At present, there is currently no near-term plan to pay a
dividend. However, the Board continues to review the company's
dividend policy.
Maintaining a cautious approach against a promising outlook
The commercial foundations for the remainder of the year have
been set in place by the interim period and we remain on track to
meet full year product sales revenue market expectations of GBP1.4
million. As ever, we continue to monitor conditions of the current
growing season and any impact this may have on our product sales.
Generally dry weather conditions across the south of Europe have,
once again, reduced demand for botryticides and certain other
agrochemicals. Ultimately this can result in higher-than-desired
inventory levels.
Whilst it is premature to assess what impact this will have on
the post-season selling period, we are monitoring this situation
closely as we are with various supply chain-related issues,
including increasing raw material prices. The well-known potential
impact of weather in the short-term, and climate change in the
longer term, further highlights the need to expand our product
range and the diseases and pests that we target in order to achieve
a diversification of risks across the product portfolio. We have
made good progress in this area in the last five years, and we will
continue to focus upon these efforts as a matter of priority.
On behalf of the Company, I'd like to thank our staff for their
outstanding efforts so far this year as well as our shareholders
for their continued interest and support.
Sean Smith
Chief Executive Officer
29 September 2022
Eden Research plc - Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2022
Six
Six months Year ended
months ended 31 December
ended 30 30 June 2021
June 2022 2021 GBP GBP
GBP unaudited unaudited audited
Revenue (note 16) 1,040,036 785,294 1,228,580
--------------- ------------ -------------
Cost of sales (626,342) (403,570) (667,343)
--------------- ------------ -------------
Gross profit 413,694 381,724 561,237
--------------- ------------ -------------
Administrative expenses (1,295,770) (1,272,825) (2,694,290)
Amortisation of intangible assets (246,325) (316,536) (434,630)
Share based payments (note 15) (152,135) (544,028) (640,597)
--------------- ------------ -------------
Operating loss (1,280,536) (1,751,665) (3,208,280)
28 82 98
Investment revenues (9,868) (18,320) (32,074)
Finance costs (33,351) (54,847) (97,247)
Foreign exchange gains/(losses)
Share of loss of equity accounted
investee, net of tax (note 10) (9,849) (9,199) (58,177)
--------------- ------------ -------------
Loss before taxation (1,333,576) (1,833,949) (3,395,680)
Income tax income 345,424 261,020 618,137
--------------- ------------ -------------
Loss for the financial period (988,152) (1,572,929) (2,777,543)
Attributable to:
Equity holder of the company (997,630) (1,583,887) (2,788,973)
Non-controlling interest 9,478 10,958 11,430
--------------- ------------ -------------
Other Comprehensive Income net
of tax - - -
Total Comprehensive Income (988,152) (1,572,929) (2,777,543)
Earnings per share (note 7)
Basic (pence per share) (0.26) (0.42) (0.73)
Eden Research plc - Consolidated Statement of Financial Position
as at 30 June 2022
30 June
2022 30 June 2021 31 Dec 2021
GBP GBP GBP
unaudited unaudited audited
NON-CURRENT ASSETS
Intangible assets (note 9) 8,330,644 7,315,305 7,919,780
Property, plant & equipment
(note 12) 222,712 259,484 232,278
Right of Use assets (note 13) 339,179 373,968 372,787
Investments in associate (note
10) 351,839 410,666 361,688
9,244,374 8,359,423 8,886,533
CURRENT ASSETS
Inventories 459,424 264,797 521,351
Trade and other receivables 1,564,652 1,495,898 886,587
Taxation 918,009 546,128 903,245
Cash and cash equivalents 1,852,019 5,748,840 3,829,369
4,794,104 7,770,555 6,140,552
CURRENT LIABILITIES
Trade and other payables 1,638,945 1,705,285 1,711,518
Lease liabilities 114,478 94,415 99,924
1,753,423 1,924,912 1,811,442
NET CURRENT ASSETS 3,040,681 5,845,643 4,329,110
NON-CURRENT LIABILITIES
Trade and other payables - 125,212 87,740
Lease liabilities 247,742 305,016 298,428
247,742 430,228 386,168
NET ASSETS 12,037,313 13,900,050 12,829,475
EQUITY
Called up share capital 3,803,402 3,803,402 3,803,402
Share premium account 39,308,529 39,308,529 39,308,529
Warrant reserve 769,773 876,764 937,505
Merger reserve 10,209,673 10,209,673 10,209,673
Retained earnings (42,094,661) (40,328,965) (41,460,753)
Non-controlling interest 40,597 30,647 31,119
TOTAL EQUITY 12,037,313 13,900,050 12,829,475
Eden Research plc - Consolidated Statement of Changes in Equity
as at 30 June 2022
Non-control-ling
interest
Share Share Merger Warrant Retained
capital premium reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP
Six months
ended 30 June
2022
Balance at
1 January 2022
(audited) 3,803,402 39,308,529 10,209,673 937,505 (41,460,753) 31,119 12,829,475
Loss and total
comprehensive
income - - - - (997,630) 9,478 (988,152)
Transactions
with owners
- Xinova write
off - - - - 43,855 - 43,855
- Options granted - - - 152,135 - - 152,135
- Options
exercised/lapsed - - - (319,867) 319,867 - -
---------- ----------- ----------- ---------- ------------- ----------------- ------------
Transactions
with owners - - - (167,732) 363,722 - 195,990
---------- ----------- ----------- ---------- ------------- ----------------- ------------
Balance at
30 June 2022
(unaudited) 3,803,402 39,308,529 10,209,673 769,773 (42,094,661) 40,597 12,037,313
---------- ----------- ----------- ---------- ------------- ----------------- ------------
Six months
ended 30 June
2021
Balance at 1
January 2021
(audited) 3,803,402 39,308,529 10,209,673 429,915 (38,842,259) 19,689 14,928,949
Loss and total
comprehensive
income - - - - (1,583,887) 10,958 (1,572,929)
Transactions
with owners
- Xinova write
off - - - - - - -
- Options granted - - - 544,028 - - 544,028
- Options
exercised/lapsed - - - (97,179) 97,179 - -
---------- ----------- ----------- ---------- ------------- ----------------- ------------
Transactions
with owners - - - 446,849 97,179 - 544,028
---------- ----------- ----------- ---------- ------------- ----------------- ------------
Balance at 30
June 2021
(unaudited) 3,803,402 39,308,529 10,209,673 876,764 (40,328,965) 30,647 13,900,050
---------- ----------- ----------- ---------- ------------- ----------------- ------------
Eden Research plc - Consolidated Statement of cash flows for the
six months ended 30 June 2022
Six months Six months
Year ended
ended ended 31
30 June December
30 June 2022 2021 2021
GBP GBP GBP
unaudited unaudited audited
Cash flows from operating
activities
Cash outflow from operations
(note 8) (1,528,470) (420,027) (1,586,582)
Interest on lease liabilities (9,868) (18,320) (32,074)
Tax refunded 330,660 - -
Net cash used in operating
activities (1,207,678) (438,347) (1,618,656)
Cash flows from investing
activities
Purchase of intangible assets (657,189) (902,356) (1,624,927)
Purchase of property, plant
and equipment (21,790) (98,458) (101,269)
Interest received 28 82 98
------------- ------------ ------------
Net cash used in investing
activities (678,951) (1,000,732) (1,726,098)
------------- ------------ ------------
Cash flows from financing
activities
Payment of lease liabilities (57,370) (43,737) (90,387)
Net cash used in financing
activities (57,370) (43,737) (90,387)
------------- ------------ ------------
(Decrease)/increase in cash
and cash equivalents (1,943,999) (1,482,816) (3,435,141)
Cash and cash equivalents
at
beginning of period 3,829,369 7,286,503 7,286,503
Effect of exchange rate fluctuations
on cash held (33,351) (54,847) (21,993)
------------- ------------ ------------
Cash and cash equivalents
at
end of period 1,852,019 5,748,840 3,829,369
============= ============ ============
Cash and cash equivalents comprise bank account balances.
Notes to the Interim Results
1. Reporting Entity
Eden Research plc is a public limited company incorporated in
the United Kingdom under the Companies Act 2006. The Company is
domiciled in the United Kingdom and is quoted on the Alternative
Investment Market (AIM).
These condensed consolidated interim financial statements
('Interims') as at and for the six months ended 30 June 2022
comprise the Company and its Subsidiaries (together referred to as
'the Group'). The principal activities of the Group are the
development and commercialisation of encapsulation, terpenes and
environmentally friendly technologies to provide naturally
occurring solutions for the global agrochemicals, animal health,
and consumer product industries.
2. Basis of Preparation
These Interims have been prepared in accordance with IAS 34
'Interim Financial Reporting', and should be read in conjunction
with the Group's last annual consolidated financial statements as
at and for the year ended 31 December 2021 which were approved by
the Board of Directors on 30 May 2022 and have been delivered to
the Registrar of Companies. The report of the auditors on those
financial statements was unqualified, did not contain an emphasis
of matter paragraph and did not contain any statement under section
498 of the Companies Act 2006.
The Interims do not include all of the information required for
a complete set of financial statements prepared under UK-adopted
International Accounting Standards and do not constitute statutory
accounts within the meaning of section 434 of the Companies Act
2006. However, selected explanatory notes are included to explain
events and transactions that are significant to an understanding of
the changes in the Group's financial position and performance since
the last annual financial statements.
Comparative information in the Interims as at and for the year
ended 31 December 2021 has been taken from the published audited
financial statements as at and for the year ended 31 December 2021.
All other periods presented are unaudited.
The Board of Directors and the Audit Committee approved the
interims on 29 September 2022.
3. Going Concern
The directors have, at the time of approving the Interims, a
reasonable expectation that the Group has adequate resources to
continue in operational existence for at least 12 months from the
approval of the financial statements. Thus, the Interim financial
statements have been prepared on a going concern basis which
contemplates the realisation of assets and the settlement of
liabilities in the ordinary course of business.
The Group has reported a loss for the first half of the year
after taxation of GBP988,152 (H1 2021: GBP1,572,929). Net current
assets at that date amounted to GBP3,040,681 (H1 2021:
GBP5,845,643). Cash at that date amounted to GBP1,852,019 (H1 2021:
GBP5,748,840). The Group is reliant on its existing cash balance to
fund its working capital.
The Directors have prepared budgets and projected cash flow
forecasts, based on forecast sales provided by Eden's distributors
where available, for a period of at least 12 months from the date
of approval of the Interims and they consider that the Company will
be able to operate with the cash resources that are available to it
for this period.
The forecasts adopted include only revenue derived from existing
contracts. They do not include potential upside from on-going
discussions and negotiations with other parties not yet contracted,
as well as other 'blue sky' opportunities.
The impact of COVID-19 has been considered in the forecasts. The
Group has not been significantly impacted by the pandemic although
it has led to some delays in product development processes and
limited promotional activity. The forecasts reflect this with the
development expenditure timing based on the latest experience with
regulatory authorities and sales volumes on the latest
distributors' information which reflects their post-COVID-19
demand.
In addition, the Group has relatively low fixed running costs
and, while mitigating actions are not forecast to be required to
support the going concern basis, the Directors have previously
demonstrated its ability to delay certain other costs, such as
Research and Development expenditure, in the event of unforeseen
cash constraints and are willing and able to delay costs in the
forecast period should the need arise.
Consequently, the directors are confident that the company will
have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the date of approval of the
financial statements and therefore have prepared the financial
statements on a going concern basis
4. Adoption of new and revised standards and changes in accounting policies
These condensed consolidated Interims have been prepared in
accordance with the accounting policies adopted in the last annual
financial statements for the year to 31 December 2021, except for
the application of the following standard at 1 January 2022:
-- Amendments to IFRS 3, IAS 16, IAS 37 and the 2018-2020 IFRS Annual Improvements cycle
The adoption of these new standards would not result in any
material changes to the Interims.
The accounting policies have been applied consistently for the
purposes of preparation of these condensed Interims.
5. Principal risks and uncertainties
The Company's prime risk is the on-going commercialisation of
its intellectual property, which involves testing of the Company's
products, obtaining regulatory approvals and reaching a
commercially beneficial arrangement for each product to be taken to
market. This is measured by comparing actual results with forecasts
that have been agreed by the Company's Board of Directors.
The Company's credit risk is primarily attributable to its trade
receivables. Credit risk is managed by running credit checks on
customers and by monitoring payments against contractual
agreements.
The Company monitors cash flow as part of its day-to-day control
procedures. The Board considers cash flow projections at its
meetings and ensures that the Company has sufficient cash resources
to meet its on-going cash flow requirements.
Due to the nature of the business, there is inherent risk of
infringement of Eden's intellectual property rights by third
parties. The risk of infringement is managed by taking (and acting
on) the relevant legal advice as and when required.
There is also inherent uncertainty surrounding the regulatory
approval of products in terms of both timing and outcome. This risk
is managed by retaining appropriately experienced staff and
contracting with expert consultants as needed.
6. COVID-19 and Ukraine
COVID-19
As restrictions significantly eased in the first part of 2022,
operationally things are returning to normal.
Commercially, there has been some negative impact on the sales
of our products due to the on-going reduction in demand for wine
grapes, a knock-on effect of the substantive closure of the
hospitality industry.
The Company has not seen a significant change on its toll
manufacturing operations, though supply of some raw materials
continues to be somewhat delayed.
Regulatory authorities were working at reduced capacity, which
has impacted on-going product approval applications that we have
around the world, though it is still difficult at this stage to
assess what, if any, commercial and financial impact there may
be.
The Company has been careful to manage its cost-base and cash
position given the general uncertainties that currently exist due
to the global COVID-19 pandemic.
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.
7. Earnings per share
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2021 2021
2022 Pence unaudited Pence
Pence unaudited audited
(Loss)/profit per ordinary share
(pence) - basic (0.26) (0.42) (0.73)
================= ================= =============
Loss per share - basic has been calculated on the net basis on
the loss after tax of GBP988,152 (30 June 2021: GBP 1,572,929 , 31
December 2021: GBP2,777,543) using the weighted average number of
ordinary shares in issue of 380,340,229 (30 June 2021: 380,340,229,
31 December 2021: 380,340,229).
Diluted earnings per share has not been presented as the Group
is currently loss making and as a result, any additional equity
instruments have the effect of being anti-dilutive.
8. Reconciliation of loss before income tax to cash used by operations
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2022 2021 2021
GBP GBP GBP
unaudited unaudited audited
(Loss)/profit after tax (988,152) (1,572,929) (2,777,543)
Adjustments for:
Share of associate's losses 9,849 9,199 58,177
Amortisation charges 246,325 316,536 434,630
Share based payment charge 152,135 544,028 640,597
Xinova loan balance written 43,855 - -
off
Depreciation of property,
plant and equipment and right
of use assets 88,159 75,601 155,341
Finance costs 9,868 18,320 122,311
Foreign exchange currency
losses 33,351 54,847 21,993
Finance income (28) (82) (98)
Tax credit (345,424) (261,020) (618,137)
Movements in working capital:
(Increase)/decrease in trade
and other receivables (678,066) 185,518 509,721
(Decrease)/ Increase in trade
and other payables (162,269) 250,330 163,355
Decrease/(increase) in inventory 61,927 (40,375) (296,929)
------------ ------------ --------------
Cash used by operations (1,528,470) (420,027) (1,586,582)
============ ============ ==============
9. Intangible assets
Intellectual Licences Development Total
property and trademarks Costs
GBP GBP GBP GBP
COST
At 1 January 2021 9,316,281 448,896 6,624,406 16,389,583
Additions - - 902,356 902,356
------------- ---------------- ------------ -----------
At 30 June 2021 9,316,281 448,896 7,526,762 17,291,939
Additions 91,405 7,788 623,378 722,571
------------- ---------------- ------------ -----------
At 31 December
2021 9,407,686 456,684 8,150,140 18,014,510
Additions - - 657,189 657,189
------------- ---------------- ------------ -----------
At 30 June 2022 9,407,686 456,684 8,807,329 18,671,699
============= ================ ============ ===========
AMORTISATION
At 1 January 2021 6,716,681 448,896 2,494,523 9,660,100
Charge for the
period 109,974 - 206,562 316,536
------------- ---------------- ------------ -----------
At 30 June 2021 6,826,655 448,896 2,701,085 9,976,636
Charge for the
period 109,974 - 8,120 118,094
------------- ---------------- ------------ -----------
At 31 December
2021 6,936,629 448,896 2,709,205 10,094,730
Charge for the
period 105,174 648 140,503 246,325
------------- ---------------- ------------ -----------
At 30 June 2022 7,041,803 449,544 2,849,708 10,341,055
============= ================ ============ ===========
CARRYING AMOUNT
At 30 June 2022 2,365,883 7,140 5,957,621 8,330,644
============= ================ ============ ===========
At 31 December
2021 2,471,057 7,788 5,440,935 7,919,780
============= ================ ============ ===========
At 30 June 2021 2,489,626 - 4,825,679 7,315,305
============= ================ ============ ===========
10. Investment in associate
Six months Six months Year ended
ended ended
30 June 2022 30 June 2021 31 December
2021
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Percentage ownership interest
and proportion of voting rights 29.90% 29.90% 29.90%
GBP GBP GBP
Non-current assets 409,425 440,601 440,601
Current assets 310,173 333,532 287,576
Non-current liabilities (98,806) (98,806) (98,806)
Current liabilities (269,026) (253,558) (269,026)
Net assets (100%) 351,766 421,769 360,345
Company's share of net assets 105,178 149,437 107,743
Separable intangible assets 133,533 148,101 140,817
Goodwill 412,649 412,649 412,649
Impairment of investment in
associate (299,521) (299,521) (299,521)
Carrying amount of interest
in associate 351,839 410,666 361,688
Revenue 255,912 270,970 361,307
Profit/(loss) from continuing
operations (8,579) (6,406) (145,849)
Post tax profit from discontinued - - -
operations
100% of total post-tax profits (8,579) (6,406) (145,849)
29.9% of total post-tax profits (2,565) (1,915) (43,609)
Amortisation of separable intangible
assets (7,284) (7,284) (14,568)
Company's share of loss including
amortisation of separable intangible
asset (9,849) (9,199) (58,177)
11. Subsidiaries
Details of the company's subsidiaries at 30 June 2022 are as follows:
Name of undertaking Country of Ownership Voting power Nature of business
incorporation interest (%) held (%)
TerpeneTech Republic of 50.00 50.00 Sale of biocide
Limited Ireland products
Eden Research Republic of 100.00 100.00 Dormant
Europe Limited Ireland
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:
30 June 30 June 31 Dec
2022 2021 2021
GBP GBP GBP
unaudited unaudited audited
NCI percentage 50% 50% 50%
Non-current assets 99,563 112,835 106,199
Current assets - - -
Non-current liabilities - - -
Current liabilities (18,371) (55,542) (43,962)
Net assets 81,192 61,293 62,237
---------- ---------- ---------
Carrying amount of NCI -
Revenue 25,591 28,551 36,131
Profit/(loss) 18,955 21,915 22,859
OCI - - -
Total comprehensive income 18,955 21,915 22,859
---------- ---------- ---------
Cash flows from operating activities - - -
Cash flows from investment activities - - -
Cash flows from financing activities - - -
Net increase/(decrease) in cash
and cash equivalents - - -
---------- ---------- ---------
Dividends paid to non-controlling
interests - - -
---------- ---------- ---------
12. Property, plant and equipment
Land
and buildings Total
GBP GBP
COST
At 1 January 2021 200,758 200,758
Additions 98,458 98,458
--------------- ---------
At 30 June 2021 299,216 299,216
Additions - owned 2,811 2,811
--------------- ---------
At 31 December 2021 302,027 302,027
Additions 21,790 21,790
--------------- ---------
At 30 June 2022 323,817 323,817
=============== =========
AMORTISATION
At 1 January 2021 12,693 12,693
Charge for the period 27,039 27,039
--------------- ---------
At 30 June 2021 39,732 39,732
Charge for the period 30,017 30,017
--------------- ---------
At 31 December 2021 69,749 69,749
Charge for the period 31,356 31,356
--------------- ---------
At 30 June 2022 101,105 101,105
=============== =========
CARRYING AMOUNT
At 30 June 2022 222,712 222,712
=============== =========
At 31 December 2021 232,278 232,278
=============== =========
At 30 June 2021 259,484 259,484
=============== =========
13. Right of use assets
Land and
buildings Vehicles Total
GBP GBP GBP
COST
At 1 January 2021 417,521 35,865 453,386
Additions - 27,920 27,920
----------- ----------- ---------
At 30 June 2021 417,521 63,785 481,306
Additions 26,256 22,288 48,544
----------- ----------- ---------
At 31 December 2021 443,777 86,073 529,850
Additions - 23,194 23,194
Disposals - (35,865) (35,865)
----------- ----------- ---------
At 30 June 2022 443,777 73,402 517,179
=========== =========== =========
AMORTISATION
At 1 January 2021 36,361 22,415 58,776
Charge for the period 41,752 6,810 48,562
----------- ----------- ---------
At 30 June 2021 78,113 29,225 107,338
Charge for the period 41,752 7,973 49,725
At 31 December 2021 119,865 37,198 157,063
Charge for the period 45,438 11,364 56,802
Eliminated on disposal - (35,865) (35,865)
----------- ----------- ---------
At 30 June 2022 165,303 12,697 178,000
=========== =========== =========
CARRYING AMOUNT
At 30 June 2022 278,474 60,705 339,179
=========== =========== =========
At 31 December 2021 323,912 48,875 372,787
=========== =========== =========
At 30 June 2021 339,408 34,560 373,968
=========== =========== =========
14. Trade and other receivables
30 June 31 December
30 June 2022 2021 2021
GBP GBP GBP
Trade receivables 1,166,042 780,215 693,948
VAT recoverable 231,407 164,026 104,760
Other receivables 66,410 319,259 65,957
Prepayments and accrued
income 100,793 232,398 21,922
1,564,652 1,495,898 886,587
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.
15. Share based payments
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. Details on options issued in prior periods can be found
in the annual report for the year ended 31 December 2021.
2022 Award
Options
Number of share Weighted average
options exercise price (pence)
30 Jun 30 Jun 30 Jun 30 Jun
2022 2021 2022 2021
Outstanding at 1 January 18,680,0044 5,891,111 7 -
Granted during the period 2,006,939 10,500,000 6 6
Exercised during the period - - - -
Lapsed during the period - (5,891,111) - -
----------- ----------- -------------------- ------
Exercisable at 30 June 20,686,943 10,500,000 7 -
=========== =========== ==================== ======
The following information is relevant in the determination of
the fair value of options granted during the period under the LTIP
Replacement Award.
Grant date 30/06/2022
Number of awards 2,006,939
------------------
Share price GBP0.04 - GBP0.05
------------------
Exercise price GBP0.01 - GBP0.06
------------------
Expected dividend yield -%
------------------
Expected volatility 63%
------------------
Risk free rate 0.95%
------------------
Vesting period One year
------------------
Expected Life (from date of grant) 3 years
------------------
The exercise price of options outstanding at the end of the period
ranged between 1p and 10p (H1 2021: 6p) and their weighted average
contractual life was 2.1 years (H1 2021: 1.5 years).
The share-based payment charge for the period, in respect of options,
was GBP152,135 (H1 2021: GBP544,028), GBP119,083 of which related
to options granted in 2021 and GBP33,052 of which related to options
granted in the period.
Warrants
Number of share Weighted average
options exercise price (pence)
30 Jun 30 Jun 30 Jun 30 Jun
2022 2021 2022 2021
Outstanding at 1 January 2,989,865 2,989,865 19 19
Granted during the period - - - -
Exercised during the period - - - -
Lapsed during the period (400,000) - 25 -
------------ ------------ ---------- -------------
Exercisable at 30 June 2,589,865 2,989,865 15 15
============ ============ ========== =============
The exercise price of warrants outstanding at the end of the period
ranged between 12p and 30p (H1 2021: 12p and 30p) and their weighted
average contractual life was 0.0 years (H1 2021: 1.0 year.) None
of the warrants have vesting conditions.
The share-based payment charge for the period, in respect of warrants,
was GBPnil (H1 2021: GBPnil). The weighted average fair value of
each warrant granted during the period was GBPnil (2020: GBPnil).
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 became 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. 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.
At 31 December 2021, an amount of GBP87,704 (30 June 2021:
GBP125,212) was owed to Xinova and is shown as non-current other
liabilities.
During the period, 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
GBP43,855, which represented a c. 50% discount to the liability of
GBP87,740 as at 31 December 2021, in line with the then existing
contract.
16. Segmental Reporting
IFRS 8 requires operating segments to be reported in a manner
consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who
is responsible for the resource allocati on and assessing
performance of the operating segments has been identified as the
Executive Directors as they are primarily responsible for the
allocation of the resources to segments and the assessment of
performance of the segments.
The Executive Directors monitor and then assess the performance
of segments based on product type and geographical area using a
measure of adjusted EBITDA. This is the result of the segment after
excluding the share-based payment charges, other operating income
and the amortisation of intangibles. These items, together with
interest income and expense are not allocated to a specific
segment.
The segmental information for the six months ended 30 June 2022
is as follows:
Agrochemicals Consumer Animal Total
products health
-------------- ---------- -------- -----------
Revenue GBP GBP GBP GBP
-------------- ---------- -------- -----------
Milestone payments - - - -
-------------- ---------- -------- -----------
R & D charges - 3,232 - 3,232
-------------- ---------- -------- -----------
Royalties - 25,591 - 25,591
-------------- ---------- -------- -----------
Product sales 1,011,213 - - 1,011,213
-------------- ---------- -------- -----------
Total revenue 1,011,213 28,823 - 1,040,036
-------------- ---------- -------- -----------
EBITDA (822,740) 28,823 - (793,917)
-------------- ---------- -------- -----------
Share Based Payments (152,135) - - (152,135)
-------------- ---------- -------- -----------
Adjusted EBITDA (974,875) 28,823 - (946,052)
-------------- ---------- -------- -----------
Amortisation (239,689) (6,636) - (246,325)
-------------- ---------- -------- -----------
Depreciation (88,159) - - (88,159)
-------------- ---------- -------- -----------
Finance costs, foreign exchange
and investment revenues (43,191) - - (43,191)
-------------- ---------- -------- -----------
Income Tax 345,424 - - 345,424
-------------- ---------- -------- -----------
Share of Associate's loss - (9,849) - (9,849)
-------------- ---------- -------- -----------
(Loss)/Profit for the Year (1,000,490) 12,338 - (988,152)
-------------- ---------- -------- -----------
Total Assets 13,931,631 99,563 - 14,038,478
-------------- ---------- -------- -----------
Total assets includes:
-------------- ---------- -------- -----------
Additions to Non-Current
Assets 702,173 - - 702,173
-------------- ---------- -------- -----------
Total Liabilities 1,982,793 18,371 - 2,001,164
-------------- ---------- -------- -----------
The segmental information for the six months ended 30 June 2021
is as follows:
Agrochemicals Consumer Animal Total
products health
-------------- ---------- -------- ------------
Revenue GBP GBP GBP GBP
-------------- ---------- -------- ------------
Milestone payments 95,025 - - 95,025
-------------- ---------- -------- ------------
R & D charges - 3,218 - 3,218
-------------- ---------- -------- ------------
Royalties - 28,551 - 28,551
-------------- ---------- -------- ------------
Product sales 658,500 - - 658,500
-------------- ---------- -------- ------------
Total revenue 753,525 31,769 - 785,294
-------------- ---------- -------- ------------
EBITDA (843,969) 28,551 - (815,418)
-------------- ---------- -------- ------------
Share Based Payments (544,028) - - (544,028)
-------------- ---------- -------- ------------
Adjusted EBITDA (1,387,997) 28,551 - (1,359,446)
-------------- ---------- -------- ------------
Amortisation (309,900) (6,636) - (316,536)
-------------- ---------- -------- ------------
Depreciation (75,601) - - (75,601)
-------------- ---------- -------- ------------
Finance costs, foreign exchange
and investment revenues (73,167) - - (73,167)
-------------- ---------- -------- ------------
Income Tax 261,020 - - 261,020
-------------- ---------- -------- ------------
Share of Associate's loss - (9,199) - (9,199)
-------------- ---------- -------- ------------
(Loss)/Profit for the Year (1,585,645) 12,716 - (1,572,929)
-------------- ---------- -------- ------------
Total Assets 16,017,143 112,835 - 16,129,978
-------------- ---------- -------- ------------
Total assets includes:
-------------- ---------- -------- ------------
Additions to Non-Current
Assets 1,028,734 - - 1,028,734
-------------- ---------- -------- ------------
Total Liabilities 2,303,598 51,542 - 2,355,140
-------------- ---------- -------- ------------
The segmental information for the 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
-------------- ---------- -------- ------------
Geographical Reporting
Six months Six months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
GBP GBP GBP
UK 28,823 31,769 83,891
Europe 1,011,213 753,525 1,144,689
----------- ----------- -------------
1,040,036 785,294 1,228,580
=========== =========== =============
The revenue derived from Milestone Payments relates to
agreements which cover a number of countries both in the EU and the
rest of the world.
All of the non-current assets are in the UK.
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:
Based on plant-derived active ingredients, Mevalone (R) is a
foliar biofungicide which initially targets a key disease affecting
grapes and other high-value fruit and vegetable crops. It is a
useful tool in crop defence programmes and is aligned with the
requirements of integrated pest management programmes. 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 bio-nematicide that targets free living
nematodes which are parasitic worms that affect a wide range of
high-value fruit and vegetable crops globally. Cedroz is registered
for sale on two continents and Eden's commercial collaborator,
Eastman Chemical, is pursuing registration and commercialisation of
this important new product in numerous countries globally.
Eden's Sustaine (R) encapsulation technology is used to harness
the biocidal efficacy of naturally occurring chemicals produced by
plants (terpenes) and can also be used with both natural and
synthetic compounds to enhance their performance and ease-of-use.
Sustaine microcapsules are naturally-derived, plastic-free,
biodegradable micro-spheres derived from yeast. It is one of the
only viable, proven and immediately registerable solutions to the
microplastics problem in formulations requiring encapsulation.
Eden was admitted to trading on AIM on 11 May 2012 and trades
under the symbol EDEN. It was awarded the London Stock Exchange
Green Economy Mark in January 2021, which recognises London-listed
companies that derive over 50% of their total annual revenue from
products and services that contribute to the global green economy.
Eden derives 100% of its total annual revenues from sustainable
products and services.
For more information about Eden, please visit: www.edenresearch.com .
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END
IR LLMFTMTBTBIT
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