Eden Research plc
LSE : EDE

May 23, 2011 02:00 ET

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010

                                                                                                              
                                                                                                                        
                                                            
                                                                                               GB0001646941/GBP/PLUS-exn
                                                                                                             23 May 2011
                                                            
                                                            
                                                    EDEN RESEARCH PLC
                                                ("Eden" or the "Company")
                                                            
                                    FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
                                                            
                                                            
          CHAIRMAN'S REVIEW

          Introduction
          
          Eden  Research has seen significant activity in 2010 with a number of new licensees on board, product approval
          milestones having been met and rapidly increasing interest in the encapsulation technologies.
          
          The  year  started strongly, with the licensing of our encapsulation technologies and products to TEVA  Animal
          Health,  a  subsidiary  of the largest generic pharmaceutical company in the World, TEVA Pharmaceutical.  This
          has  helped  to  create  the  setting for Eden to push itself as a leading platform  encapsulation  technology
          company  with  applications and benefits not only in the agrochemical sector, where Eden  has  already  proved
          itself commercially, but, in other unrelated sectors, such as animal health.
          
          Adding together these new, exciting prospects to the agrochemical products that Eden has already developed  to
          date, it is possible to understand the vast potential that Eden has.
          
          Products
          
          3AEY
          
          3AEY,  Eden's lead product; a terpene based fungicide, has now been out-licensed to a number of parties for  a
          variety of applications throughout the World.
          
          Cheminova have the majority of the worldwide rights for professional crop applications and progress  is  being
          made in line with the European registration of the three active substances which make up 3AEY.
          
          Redestos,  who  have  rights  in Greece and the Balkans, are currently preparing  their  national  provisional
          authorisations for 3AEY.
          
          In  March 2010, Ecostyle BV, a Dutch company licensed rights to 3AEY for use in the amateur gardening  sector.
          As  well  as  conducting  a  number  of studies, Ecostyle have also been preparing  for  national  provisional
          authorisations.

          Nematodes

          In  2010,  Certis Europe entered into an exclusive option agreement for Eden's nematode product.  Since  then,
          both  Certis  and Eden have undertaken field trials on a variety of nematode species in order to evaluate  the
          potential  for  the  products and to determine the markets for which Certis would like to enter  into  a  full
          licensing agreement.

          Later  on  in  the year, Eden entered into a full licence agreement with Stockton Agrimor for  rights  to  the
          nematode product in South America.

          This  leaves Eden with NAFTA to out-licence for its nematode applications. Discussions are progressing in that
          respect.

          Spider Mites and Whitefly

          Following  on  from  the encouraging results seen in the trial work by ANADIAG, Eden is in discussion  with  a
          number  of  interested parties who are seeking to licence the product, take on registration and further  trial
          work responsibilities.

          Encapsulation

          As  previously  mentioned, Eden entered into an option and licence agreement with TEVA Animal  Health  at  the
          beginning  of  the  year to grant the rights to Eden's products and technologies in the animal  health  sector
          thus  broadening  the  scope  of  potential  revenue streams to be derived  from  the  platform  encapsulation
          technologies.

          At  the  very end of 2010, SBM Developpement SA, based in Lyon, signed two agreements with Eden which  granted
          SBM  the  rights  to use Eden's terpene encapsulation system. SBM are co-encapsulating two of their  important
          crop  protection  molecules with blends of synergistic terpenes to create new products  that  will  exhibit  a
          wider spectrum of activity and be less prone to resistance development.

          During  the  year  and since the year end, Eden has received a number of interesting enquiries  regarding  the
          potential  use  of  the  encapsulation system in a wide range of applications  and  markets  which  are  being
          actively pursued.

          Product registration

          In  April  2010,  the  UK  regulatory body, the Chemicals Regulation Directorate (CRD),  submitted  the  Draft
          Assessment Report ("DAR") for 3AEY to the European Food Safety Authority (EFSA).

          Eden has completed all of the work required including the additional study as recommended by CRD and EFSA  are
          currently  reviewing the DAR. After this process has completed, EFSA should then recommend  inclusion  of  the
          three  active substances used in 3AEY to the EU Commission who will then vote for its inclusion onto the  list
          of approved active substances.

          The Senior Management

          In  May  2010,  Stephen O'Brien MP stepped down from his role as Non-executive director at Eden following  his
          appointment to the Government as Minister for International Development.

          The management committee comprises:
          
          Sir Ben Gill     Chairman
          Ken Brooks       Executive Deputy Chairman
          Clive Newitt     Managing Director
          Alex Abrey       Chief Financial Officer

          AIM market

          Eden continues to progress its proposed admission to the Alternative Investment Market ("AIM"), following  the
          completion of a small number of significant events.


          Outlook
          On  a wider basis, the on-going issues of food security, the need for increased food production, together with
          the  increased  regulatory pressures on traditional chemical products and problems with  resistance  affecting
          their   efficacy  all  serve  to  highlight  the  need  for  novel,  environmentally  friendly  and  effective
          technologies, such as Eden's.

          The  platform  encapsulation  technology  provides a simple and  yet  effective  solution,  not  only  to  the
          agrochemical  sector,  but, given its diversity in application, to a number of other  sectors.  The  potential
          financial  benefits  from the encapsulation technology appear to be ever greater and of more  significance  to
          your company.

          Sir Ben Gill
          Chairman


                                                    EDEN RESEARCH PLC
                                                            
                                     CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                            
                                           FOR THE YEAR ENDED 31 DECEMBER 2010
         
         
         
                                                                                     2010                          2009
                                                                                                              (restated)
                                                                                       £                              £
         
         CONTINUING OPERATIONS
         Revenue                                                                 172,529                         192,815
         
         Cost of sales                                                                 -                               -
                                                                              __________                      __________
         
         GROSS PROFIT                                                            172,529                         192,815
         
         Administrative expenses
         - normal                                                            (1,335,117)                       (835,744)
         - amortisation of intangible assets                                   (664,097)                       (649,019)
         - share based payments                                                (436,084)                       (369,269)
                                                                              __________                      __________
         
         Total administrative expenses                                       (2,435,298)                     (1,854,032)
         
         Other operating income                                                        -                          25,350
                                                                              __________                      __________
         
         OPERATING LOSS                                                      (2,262,769)                     (1,635,867)
         
         Finance costs                                                       (1,018,928)                       (157,452)
         
         Finance income                                                               14                              17
                                                                              __________                      __________
         
         LOSS BEFORE TAX                                                     (3,281,683)                     (1,793,302)
         
         Tax                                                                      30,709                          66,094
                                                                              __________                      __________
         
         LOSS FOR THE YEAR and total
         comprehensive income attributable
         to owners of the parent                                             (3,250,974)                     (1,727,208)
                                                                              __________                      __________
         LOSS PER SHARE
         - basic and diluted                                                     (5.21)p                         (3.03)p
                                                                              __________                      __________
         
                                                    EDEN RESEARCH PLC
                                                            
                                 CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
                                                            
                                           FOR THE YEAR ENDED 31 DECEMBER 2010
         
         
         
         
                                                Share        Share        Merger      Warrant      Retained
                                              capital      premium       reserve      reserve      earnings       Total
                                                                                                  (restated)  (restated)

                                                    £            £             £            £            £            £
         
         Balance at 1 January 2008            559,736   12,387,217    10,209,673    2,441,708  (19,407,478)   6,190,856
         
         Prior period adjustments                   -           -              -            -     (167,479)    (167,479)
                                              _______      _______       _______      _______       _______     _______
         
                                              559,736   12,387,217    10,209,673    2,441,708  (19,574,957)   6,023,377
         
         Loss and total comprehensive income        -            -             -            -   (2,157,064)  (2,157,064)
         
         Transactions with owners
         -       Issue of shares                3,397      728,902             -            -            -      732,299
         -       Options granted                    -            -             -      431,795            -      431,795
         -       Options exercised/lapsed           -            -             -     (752,866)     752,866            -
                                              _______      _______       _______      _______       _______     _______
         
         Transactions with owners               3,397      728,902             -     (321,071)     752,866    1,164,094
                                              _______      _______       _______      _______       _______     _______
         
         Balance at 1 January 2009            563,133   13,116,119    10,209,673    2,120,637  (20,979,155)   5,030,407

         Loss and total comprehensive income        -            -             -            -   (1,727,208)  (1,727,208)
         
         Transactions with owners
         -       Issue of shares               54,191    1,029,634             -            -            -    1,083,825
         -       Options granted                    -            -             -      369,269            -      369,269
         -       Options exercised/lapsed           -            -             -     (303,633)     303,633            -
                                              _______      _______       _______      _______       _______     _______
         
         Transactions with owners              54,191    1,029,634             -       65,636      303,633    1,453,094
                                              _______      _______       _______      _______       _______     _______
         
         Balance at 1 January 2010            617,324   14,145,753    10,209,673    2,186,273  (22,402,730)   4,756,293
         
         Loss and total comprehensive income        -            -             -            -   (3,250,974)  (3,250,974)
         
         Transactions with owners
         -       Issue of share                52,960      609,035             -            -            -      661,995
         -       Options granted                    -            -             -      436,084            -      436,084
         -       Options exercised/lapsed           -            -             -   (1,368,824)    1,368,824           -
                                              _______      _______       _______      _______       _______     _______
         
         Transactions with owners              52,960      609,035             -     (932,740)    1,368,824   1,098,079
                                              _______      _______       _______      _______       _______     _______
         
         Balance at 31 December 2010          670,284   14,754,788    10,209,673    1,253,533   (24,284,880)  2,603,398
                                              _______      _______       _______      _______       _______     _______
         
         
         
         
                                                    EDEN RESEARCH PLC
                                                            
                                      CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                            
                                                 AS AT 31 DECEMBER 2010
                                                            
                                                                     2010            2009            2008
                                                                                  (restated)       (restated)
                                                                      £                   £                £
         ASSETS
         NON-CURRENT ASSETS
         Intangible assets                                         8,198,319        8,757,642       9,203,269
         Property, plant and equipment                                     -                -           6,926
                                                                  __________       __________      __________
         
                                                                   8,198,319        8,757,642       9,210,195
                                                                  __________       __________      __________
         CURRENT ASSETS
         Trade and other receivables                                  75,324           36,079         177,791
         Cash and cash equivalents                                     6,123           81,728          13,065
                                                                  __________       __________      __________
                                                                                                                                                                                              81,447          117,807         190,856
                                                                  __________       __________      __________
         

         TOTAL ASSETS                                              8,279,766        8,875,449       9,401,051
                                                                  __________       __________      __________
         LIABILITIES
         CURRENT LIABILITIES
         Trade and other payables                                  1,597,340        1,009,216       1,038,253
         Financial liabilities - borrowings
         Loan notes                                                2,947,502        2,049,235       2,271,686
                                                                  __________       __________      __________
         
                                                                   4,544,842        3,038,451       3,309,939
                                                                  __________       __________      __________
         NON CURRENT LIABILITIES
         Other payables                                            1,131,526        1,060,705       1,060,705
                                                                  __________       __________      __________
         
         TOTAL LIABILITIES                                         5,676,368        4,119,156       4,370,644
                                                                  __________       __________      __________
         
         EQUITY
         Called up share capital                                     670,284          617,324         563,133
         Share premium account                                    14,754,788       14,145,753      13,116,119
         Merger reserve                                           10,209,673       10,209,673      10,209,673
         Warrant reserve                                           1,253,533        2,186,273       2,120,637
         Retained earnings                                       (24,284,880)     (22,402,730)    (20,979,155)
                                                                  __________       __________      __________
         
         TOTAL EQUITY attributable
         to owners of the parent                                   2,603,398        4,756,293       5,030,407
                                                                  __________       __________      __________
         
         TOTAL EQUITY AND LIABILITIES                              8,279,766        8,875,449       9,401,051
                                                                  __________       __________      __________
         
         
         
         
         
         
         
         
         
         
         
         
         
        BASIS OF PREPARATION
        
        1.  The figures for the year ended 31 December 2010 and 2009  do not  constitute statutory  accounts within the
            meaning of s435 of the Companies Act 2006. The figures for the year ended 31 December 2010 have been        
            extracted from the statutory accounts for that year which have yet to be delivered to the Registrar of 
            Companies. The figures for the year ended 31 December 2009 have been extracted from the statutory accounts 
            for that year which have been delivered to the Registrar of Companies and on which the auditor issued an    
            unqualified audit report, modified to include an emphasis of matter with regard to going concern. 
            No statement was made by the auditor under section 237 (2) or (3) of the Companies Act 1985 in respect 
            of the 31 December 2010 statutory accounts.
        
            The  Group has applied consistent accounting policies in preparing the preliminary financial statements  for
            the  year  ended  31  December 2010 and the comparative information for the year  ended  31  December  2009,
            subject to note 6 below.
        
        2.  The  audit  report for the year ended 31 December 2010 contained the following statement from the Company's
            auditors:
             
            "Emphasis of matter - Going concern

            In  forming our opinion on the financial statements, which is not modified, we have considered the adequacy
            of  the disclosure made in note 1 to the financial statements concerning the Group's ability to continue as
            a  going  concern. The Group incurred a net loss of £3,250,974 during the year ended 31 December 2010  and,
            at  that  date,  the  Group had net current liabilities of £4,463,395.The Group is dependent  on  continued
            support  of  shareholders and the ability to raise additional finance and the successful  commercialization
            of  its  intellectual property. These conditions, along with the other matters explained in note 1  to  the
            financial  statements,  indicate the existence of a material uncertainty which may cast  significant  doubt
            about  the  Group's  ability to continue as a going concern. The financial statements do  not  include  the
            adjustments that would result if the Group was unable to continue as a going concern."
        
        3.  The directors do not recommend the payment of a final dividend (2009: £nil).
        
        4.  These financial statements are presented in sterling as that is the currency of the primary economic
            environment in which the Group operates.
        
        5.  Copies  of  the 2010 Annual Report and Accounts will be posted to shareholders with the  notice  of  the
            Annual  General  Meeting.  Further  copies  may be obtained by contacting  the  Company  Secretary  at  the
            registered office.
        
        6.  Restatement of prior accounting periods

            During the year the company identified that the accounting applied to a contract to make royalty payments 
            to a third party was incorrect. As all obligations on the third party have been fulfilled, the contract     
            should have been accounted for as a non-executory contract.

            The contract is considered non-executory as the licenser under the contract has provided exclusive 
            perpetual worldwide rights to the group to use the Intellectual property and has no further obligations to 
            the Group. As such the Group has accrued for all future payments based on the Directors? best estimate of 
            the amounts payable, discounted to their net present value. 

            The contract had not previously been accounted for in the Group?s financial statements.

            The effect of the correction of the accounting treatment on the financial statements for the year ended 31 
            December 2009 and 31 December 2008 is summarised below. Opening retained earnings at 1 January 2008 have 
            been reduced by £167,479, which is the amount of the adjustment for the three years ended 31 December 2007.
                
                
                
                
        Year ended 31 December 2009
             
                                                         As previously               As Restated           Restatement
                                                                stated
        Group                                                     2009                     2009                  2009
        Effect on statement of financial                             £                        £                     £
        position
        Intangible assets                                    7,976,070                8,757,642               781,572
        Non current liabilities                                      -               (1,060,705)           (1,060,705)
                                                                                                             (279,133)
        Retained earnings                                 (22,123,597)              (22,402,730)             (279,133)
        Net decrease in equity                                                                               (279,133)
                                                                                                                      
                                                         As previously               As Restated           Restatement
                                                                stated
                                                                  2009                      2009                  2009
        Effect on income statement                                   £                         £                     £
        Amortisation of intangible assets                    (593,192)                 (649,019)              (55,827)
        Total administrative expenses                      (1,798,205)               (1,854,032)              (55,827)
        Operating loss                                     (1,580,040)               (1,635,867)              (55,827)
        Decrease  in  result for  the  year                                                                           
        from continuing activities                                                                            (55,827)
                                                                                                                      
                                                         As previously               As Restated           Restatement
                                                                stated
                                                                  2009                      2009                  2009
        Effect on earnings per share                             pence                     pence                 pence
        Loss per share - basic and diluted                        2.93                      3.03                  0.10
        
        There  was  no  cash flow impact as a result of the misstatement other than the consequential  adjustments
        arising as a result of the changes to the balance sheet at 31 December 2009 and 31 December 2008.
             
             
       Year ended 31 Dec 2008
                                                         As previously                As Restated           Restatement
                                                                stated
       Group                                                      2008                      2008                  2008
       Effect  on  statement of financial                            £                         £                     £
       position
       Intangible assets                                     8,365,870                 9,203,269               837,399
       Non current liabilities                                       -                (1,060,705)           (1,060,705)
                                                            __________                 __________            __________
                                                                                                              (223,306)

       Retained earnings                                   (20,755,849)              (20,979,155)             (233,306)
                                                            __________                 __________            __________
       Net decrease in equity                                                                                 (223,306)
                                                                                                         
                                                         As previously                As Restated           Restatement
                                                                stated
                                                                  2008                      2008                  2008
       Effect on income statement                                    £                         £                     £
       Amortisation of intangible assets                      (604,340)                 (660,167)              (55,827)
       Total administrative expenses                        (2,112,185)               (2,168,012)              (55,827)
       Operating loss                                       (2,028,182)               (2,084,009)              (55,827)
                                                            __________                 __________            __________
       Decrease  in result for  the  year                                                                 
       from continuing activities                                                                              (55,827)
                                                                                                         
                                                         As previously                As Restated           Restatement
                                                                stated
                                                                  2008                       2008                  2008
       Effect on earnings per share                              pence                      pence                 pence
       Loss per share - basic and diluted                         3.86                       3.96                  0.10

       There  was  no cash flow impact as a result of the misstatement other than the consequential adjustments
       arising as a result of the changes to the balance sheet at 31 December 2008 and 31 December 2007.
             
               
        
       The directors of Eden Research plc are responsible for the contents of this announcement.

       Enquiries:

       Eden Research plc                                                  01993 862761
       Clive Newitt, Managing Director

       St Helens Capital Partners LLP                                     020 7368 6959
       Mark Anwyl or Duncan Vasey
         

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