Half Yearly Report

RNS Number : 2544N

Eden Research plc

27 September 2012

 



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

Interim Results for the six months ended 30 June 2012

Eden Research plc, the agrochemical and encapsulation development company, today announces its interim results for the six months ended 30 June 2012.

Business Highlights

·        Further EU regulatory milestone achieved with the receipt by the UK authorities of the draft EFSA conclusion report

·        Exclusive licence agreement signed with Teva Animal Health for animal health applications in North America using Eden's encapsulation technology and terpene formulations with payments of $0.25m made to date, with a further $0.8m due under the agreement

·        Memorandum of Understanding signed with FMC Corporation of the United States, for an exclusive licence for Eden's nematode product in Latin America

·        Data Access and Royalty Agreement signed with Xeda International SA ("Xeda") of France

·        Licence agreement signed with Phytalexin Limited granting exclusive rights to Eden's formulations and encapsulation technologies primarily for use as a head-lice product

·        Patents granted in Australia and ARIPO

Financial Highlights

·        Operating Loss for the period, excluding amortisation, of GBP0.57m (2011: GBP0.40m)

·        Revenue for the period of GBP0.01m (2011: GBP0.02m)

·        Administrative expenses GBP0.35m, excluding AIM listing costs of GBP0.23m (2011: GBP0.41m)

·        Cash at bank GBP0.48m (2011: GBP1.18m)

·        Debt GBP nil (2011: GBP0.63m). All long-term debt converted prior to AIM admission in April 2012

Sir Ben Gill, Non-executive Chairman, said:

"Making the move from the PLUS to the AIM market in May 2012 was, as it transpires, a very timely, but, also significant step forward for Eden which should provide a more well-recognised and dynamic platform upon which to build and expand the business.

Commercially, Eden has made good progress in maximising the potential benefits derived from using its encapsulation technologies in a number of fields of use. The signing of an exclusive licence with Teva Animal Health was a great start to the year which should provide Eden with a significant royalty stream within the next year. To see sales of product using Eden's technologies will be an important milestone in the evolution of the Company.

In February, Eden signed a memorandum of understanding with FMC Corporation ("FMC") for an exclusive licence for Eden's nematode product in Latin America. FMC is one of the world's foremost, diversified chemical companies with leading positions in agricultural, industrial and consumer markets with annual sales of circa US$3.4 billion. FMC recently became one of the world's top ten agro-chemical companies. Eden is also exploring other potential uses for its encapsulation technologies with FMC.

Other agreements signed in the first half of 2012 included a Data Access and Royalty Agreement with Xeda International SA ("Xeda") of France for which Eden will receive royalty payments on sales of Xeda's products which include Thymol as the active ingredient. Also, Eden signed a licence agreement with Phytalexin Limited which granted exclusive rights to Eden's formulations and encapsulation technologies primarily for use as a head-lice product.

Two patents were formally granted during the period which strengthens the real value of Eden's intellectual property and business proposition.

The EU registration process of the three active substances used in Eden's first agrochemical product has passed another key milestone with the recent receipt of the draft European Food Safety Authority Report conclusion. This enables the final part of the process to proceed with the all-important vote expected to take place in Spring 2013.

During the first half of the year and subsequently, Eden has been in dialogue with a number of potential licensees in areas such as food flavourings and cosmetics, as well as for further agrochemical products, such as miticides and powdery and downy mildew.

In line with our business model, the Board continues to seek licensing opportunities which maximise the value of the encapsulation technologies whilst keeping the company streamlined. This involves partnering with companies that have a strong background in their field of expertise and, to this end, we are exploiting a continually growing list of companies that we think are well placed to help us create the most value for our shareholders."

For further information please contact:

Eden Research plc	www.edenresearch.com
Clive Newitt, Managing Director	Tel: [phone]
Alex Abrey, Chief Financial Officer
Zeus Capital Limited
Nominated Advisor and Broker Ross Andrews, Andrew Jones (Corporate Finance)	Tel: [phone]
John Goold (Institutional Sales)	Tel: [phone]
Walbrook PR Ltd	Tel: [phone]
Paul McManus (Media Relations)	Mob: [phone] or [e-mail]
Paul Cornelius (Investor Relations)	Mob: [phone] or [e-mail]

 

Eden Research plc Consolidated Statement of Comprehensive Income for the six months ended 30 June 2012
		Six months ended 30 June 2012 GBP'000 unaudited		Six months ended 30 June 2011 GBP'000 unaudited		Year ended 31 December 2011    GBP'000 audited
Group Revenue		8		15		91
Cost of sales		-		-		-
Gross profit		8		15		91
Administrative expenses		(585)		(411)		(848)
Amortisation of intangible assets		(329)		(329)		(697)
Share based payments		(82)		(315)		(376)
		(996)		(1,040)		(1,921)
Other operating Income		1		1		-
Operating loss		(987)		(1,039)		(1,830)
Finance costs		(588)		(1,183)		(1,459)
Loss on ordinary activities before taxation		(1,575)		(2,222)		(3,289)
Tax on loss on ordinary activities		-		-		5
Loss for the financial period		(1,575)		(2,222)		(3,284)
Other Comprehensive Income net of tax		-		-		-
Total Comprehensive Income		(1,575)		(2,222)		(3,284)
Loss per share (pence) - basic and diluted		(1.47)		(2.48)		(3.66)

 

Eden Research plc

Consolidated Statement of Financial Position as at 30 June 2012

	30 June 2012		30 June 2011		31 Dec 2011
	GBP'000		GBP'000		GBP'000
	unaudited		unaudited		audited
ASSETS
NON-CURRENT ASSETS
Intangible assets	7,534		7,895		7,810
CURRENT ASSETS
Trade and other receivables	121		132		95
Cash and cash equivalents	477		1,182		389
	598		1,314		484
TOTAL ASSETS	8,132		9,209		8,294
LIABILITIES
CURRENT LIABILITIES
Trade and other payables	342		1,064		875
Financial liabilities - borrowings
- Convertible loan notes	-		627		652
TOTAL CURRENT LIABILITIES	342		1,691		1,527
NON-CURRENT LIABILITIES
Other payables	1,549		1,131		1,381
TOTAL LIABILITIES	1,891		2,822		2,908
EQUITY
Called up share capital	1,110		993		993
Share premium account	22,353		20,122		20,122
Merger reserve	10,210		10,210		10,210
Warrant reserve	1,516		1,374		1,434
Retained earnings	(28,948)		(26,312)		(27,374)
TOTAL EQUITY attributable
to owners of the parent	6,241		6,387		5,385
TOTAL EQUITY AND LIABILITIES	8,132		9,209		8,293

Eden Research plc

Statement of Changes in Equity as at 30 June 2012

                                                                       Share              Share          Merger        Warrant       Retained

                                                                     capital      premium          reserve         reserve        earnings               Total

                                                                                                                                                                                                                              £                                                                                 £                       £                       £                       £                       £

Six months ended 30 June 2012

Balance at 1 January 2012                         993            20,122            10,210              1,434           (27,374)             5,385

Loss and total comprehensive income    -                        -                        -                       -             (1,492)           (1,492)

Transactions with owners

-     Issue of share                                        117               2,231                        -                       -                        -              2,348

-     Options granted                                        -                        -                        -                    82                   (82)                      -

-     Options exercised/lapsed                     -                        -                        -                       -                        -                       -

                                                                   _______         _______         _______         _______         _______         _______

Transactions with owners                        117               2,231                        -                       -                        -              2,348

                                                                   _______         _______         _______         _______         _______         _______

Balance at 30 June 2012                         1,110            22,353            10,210              1,516           (28,948)              6,241

                                                                   _______         _______         _______         _______         _______         _______

Six months ended 30 June 2011

Balance at 1 January 2011                         670            14,755            10,210              1,254           (24,285)             2,603

Loss and total comprehensive income    -                        -                        -                       -             (2,222)           (2,222)

Transactions with owners

-     Issue of shares                                      323               5,367                        -                       -                        -              5,690

-     Options granted                                        -                        -                        -                  376                        -                  376

-     Options exercised/lapsed                     -                        -                        -                (256)                 195                  (60)

                                                                   _______         _______         _______         _______         _______         _______

Transactions with owners                        323               5,367                        -                  180                  195            6,0066

                                                                   _______         _______         _______         _______         _______         _______

Balance at 30 June 2011                            993            20,122            10,210              1,374           (26,312)               6,387

                                                                   _______         _______         _______         _______         _______         _______

                Eden Research plc

Statement of cash flows for the six months ended 30 June 2012

	Six months		Six months
	ended		ended		Year ended 31
	30 June 2012		30 June 2011		December 2011
	GBP '000		GBP '000		GBP '000
	unaudited		unaudited		audited
Cash flows from operating activities
Cash outflow from operations	(1,039)		(298)		(1,500)
Tax credit received	-		-		5
Net finance charges paid	(588)		(1,183)		(1,133)
	___________		___________		______________
Net cash used in operating activities	(1,627)		(1,481)		(2,628)
	___________		___________		______________
Cash flows from investing activities
Capitalisation of development expenditure	(25)		(25)		(308)
Finance income	-		1		1
	___________		___________		______________
Net cash used in investing activities	(25)		(24)		(307)
	___________		___________		______________
Cash flows from financing activities
Shareholders' loan - repayment	-		-		(21)
Shareholders' loan - drawdown	950		1,620		2,278
Issue of equity shares	790		1,061		1,061
	___________		___________		______________
Net cash from financing activities	1,740		2,681		3,318
	___________		___________		______________
Increase/(decrease) in cash and cash equivalents	88		1,176		383
Cash and cash equivalents at
beginning of year	389		6		6
	___________		___________		______________
Cash and cash equivalents at
end of year	477		1,182		389
	___________		___________		______________

Cash and cash equivalents comprise bank account balances.

Notes to the Interim Results

1.            The above numbers have not been reviewed by the company's auditors.

2.            Nature of operations and general information

Eden is an early stage revenue company with intellectual property and expertise in encapsulation, terpenes and environmentally friendly technologies to provide naturally occurring solutions to the global agrochemicals industry, the animal health industry, and consumer products. Revenues are earned by the Company through identifying suitable industrial partners and entering into licence agreements.

The financial information set out in this interim report does not constitute statutory accounts.  The company's statutory financial statements for the year ended 31 December 2011 are available from the company's website.  The auditor's report on those financial statements was unqualified.

3.            Accounting Policies

Basis of Preparation 

These interim condensed consolidated financial statements are for the six months ended 30 June 2012. They have been prepared following the recognition and measurement principles of IFRS.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the financial statements of the company for the year ended 31 December 2011.

These financial statements have been prepared on the going concern basis and under the historical cost convention.

These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2011.

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

4.            Copies of the interim statement are available from the Company at its registered office, as well as on the Company's website.

5.            Loss per share

					Six months		Six months
					ended		ended		Year ended 31
					30 June 2012		30 June 2011		December 2011
					GBP '000		GBP '000		GBP '000
					unaudited		unaudited		audited
Loss per ordinary share (pence) - basic and diluted					(1.47)		(2.48)		(3.66)
					________		________		________

Loss per share has been calculated on the net basis on the loss after tax of £1,573,877 (30 June 2011: loss £2,221,781), (31 December 2011: £3,283,741) using the weighted average number of ordinary shares in issue of 107,312,913 (30 June 2011 and 31 December 2011: 89,641,547).

Due to the loss for the period there is no dilution of the loss per share arising from options in existence.

6.          Intangible assets

                                                                                                                Licences

                                                                           Intellectual                   and                    Development

                                                                             property              trademarks                     Costs                           Total

                                                                                     £                                £                                   £                                    £

             COST

           At 1 January 2011                                       9,652                         290                           2,060                               12,002

             Additions                                                             -                              -                                 25                                       25                                                                                               

                                                                           _________           _________                 _________                    __________

           At 30 June 2011                                           9,652                         290                           2,085                               12,027

             Additions                                                             -                         129                               154                                     283                                                                                               

                                                                           _________           _________                 _________                    __________

             At 31 December 2011                             9,652                         419                           2,239                               12,310

             Additions                                                          28                              -                                 25                                       53            

                                                                           _________           _________                 _________                    __________

             At 30 June 2012                                        9,680                         419                           2,264                               12,363

                                                                           _________           _________                 _________                    __________

           AMORTISATION

             At 1 January 2011                                     3,213                         242                               350                                 3,805

             Charge for the period                               248                           14                                 66                                     329

                                                                        __________           _________                 _________                    __________

             At 30 June 2011                                        3,461                         256                               416                                 4,133

             Charge for the period                               248                           14                               106                                     368

                                                                        __________           _________                 _________                    __________

             At 31 December 2011                             3,709                         270                               522                                 4,501

             Charge for the period                               247                           15                                 67                                     329

                                                                        __________           _________                 _________                    __________

             At 30 June 2012                                        3,956                         285                               589                                 4,830

                                                                        __________           _________                 _________                    __________

             CARRYING AMOUNT

             At 30 June 2012                                        5,724                        134                           1,675                                 7,533

                                                                        __________           _________                 _________                    __________

             At 31 December 2011                             5,944                         149                           1,718                                 7,810

                                                                        __________           _________                 _________                    __________

             At 30 June 2011                                        6,191                           34                           1,669                                 7,895

                                                                        __________           _________                 _________                    __________

             At 31 December 2010                             6,439                           49                           1,711                                 8,198

                                                                        __________           _________                 _________                    __________

7.    Non-current liabilities

		Six months ended 30 June 2012 GBP'000 unaudited		Six months ended 30 June 2011 GBP'000 unaudited		Year ended 31 December 2011    GBP'000 audited
Other payables		1,381		1,131		1,381

Other payables relate to a non-executory contract which commits the Company to make royalty payments of 2.5% on all future sales that incorporate the main patent to the licensor. The liability has been calculated based on the projected sales forecasts for all products incorporating the main patent discounted to their present value.

8.           Share based payments

Share Options

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

			Six months ended 30 June 2012				Six months ended 30 June 2011
			Weighted				Weighted
			average				average
			exercise				exercise
			price (pence)		Number		price (pence)		Number
Outstanding at the beginning
of the period			20		6,845,000		26		3,370,000
Granted during the period			-		-		14		4,000,000
Exercised during the period			-		-		-		-
Lapsed during the period			-		-		18		(725,000)
			20		6,845,000		20		6,645,000

              The exercise price of options outstanding at the end of the period ranged between 10p and 60p (30 June 2011: 9p and 60p) and their weighted average contractual life was 2.6 years (30 June 2011: 3.1 years). None of the options have vesting conditions.

              The weighted average share price (at the date of exercise) of options exercised during the period was nil p (30 June 2011: nil p).

              The weighted average fair value of each option granted during the period was nil p (30 June 2011: 14p).

The share based payment charge for the period was £81,241 (30 June 2011: £315,267).

Warrants

			Six months ended 30 June 2012				Six months ended 30 June 2011
			Weighted				Weighted
			average				average
			exercise				exercise
			price (pence)		Number		price (pence)		Number
Outstanding at the beginning
of the period			15		6,096,875		15		7,757,849
Granted during the period			23		805,000		17		802,431
Exercised during the period			-		-		14		(2,113,405)
Lapsed during the period			-		-		25		(350,000)
			20		6,901,875		15		6,096,875

The exercise price of warrants outstanding at the end of the period ranged between 13p and 21p (30 June 2011: 13p and 21p) and their weighted average contractual life was 1 year (30 June 2011: 1.5 years)

The weighted average share price (at the date of exercise) of warrants exercised during the period was nil p (30 June 2011: 14p).

The weighted average fair value of each warrant granted during the year was 23p (30 June 2011: 17p).

Other notes:

Eden is an early stage revenue company with intellectual property and expertise in encapsulation, terpenes and environmentally friendly technologies to provide naturally occurring solutions to the global agrochemicals industry, the animal health industry, and consumer products.

Eden's encapsulation technology harnesses the biocidal efficacy of naturally occurring chemicals produced by plants (terpenes) and can also be used with hydrophobic compounds both natural and synthetic. The technology uses yeast cells to deliver a slow release of natural compounds for agricultural and non-agricultural uses. Terpenes are already widely used in the food flavouring, cosmetic and pharmaceutical industries.

Historically, terpenes have had limited commercial use in the agrochemical sector due to their volatility, phytotoxicity and poor solubility. Eden's platform encapsulation technology provides a unique, environmentally friendly solution to these problems and enables terpenes to be used as effective, low-risk agrochemicals.

With leading consultants in their respective fields, the Company is developing these technologies through innovative research and a series of commercial production, marketing and distribution partnerships.

The Company has a number of patents and has a pipeline of products at differing stages of development targeting specific areas of the global agrochemicals industry. To date, the Company has invested in the region of £12m in developing and protecting its intellectual property. Revenues earned by the Company have been modest whilst the Company has concentrated on securing patent protection for its intellectual property, identifying suitable industrial partners and entering into licence agreements.

Eden was admitted to trading on AIM on 11 May 2012 and trades under the symbol EDEN.

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

 

END

 

 

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