Eden Regulatory News (EDEN)

31 May 2022

Eden Research

("Eden" or "the Company")

Preliminary Results for Year Ended 31 December 2021

Eden Research plc (AIM: EDEN), the AIM-quoted company focused on sustainable biopesticides and plastic-free formulation technology for use in global crop protection, animal health and consumer products industries, announces its preliminary results for the year ended 31 December 2021.

Commercial and operational highlights

· Sales of agrochemical products, Cedroz and Mevalone, increased overall by approximately 4% in volume.

· Product sales remained flat in GBP terms at approximately £1.1m (2020: £1.1m), due to adverse foreign currency exchange rates.

· Exclusive Commercialisation, Supply and Distribution Agreement signed with Corteva Agriscience, the fourth largest agriculture input company in the world

· Significantly increased the Company's addressable market during the year with the addition of new countries, diseases and crop targets for Mevalone and Cedroz.

Financial highlights

· Revenue for the year was £1.2m* (2020: £1.4m) with a loss before tax of £3.4m (2020: £2.5m) and statutory operating loss of £3.2m (2020: £2.2m).

· Adjusted EBITDA (excluding share-based payments - see note 4) was £2.0m (loss) (2020: £1.5m loss).

· Cash position at the year-end was £3.9m, in-line with management expectations (2020: £7.3m).

*£0.14m of upfront payments due in the year (and paid after the year-end) has, following the audit process, been designated as deferred income and, accordingly, will only be recognised in the Group income statement following completion of the relevant performance milestones, as required under IFRS15.

The Group's full Financial Statements are available at: www.edenresearch.com.

Lykele van der Broek, Chairman of Eden Research plc, commented:

"Eden has continued to make positive strides in 2021, despite the ongoing challenges many of us have faced. 2021 has seen us lay down the foundations for considerable revenue growth by expanding our regulatory footprint for our flagship biopesticide products in multiple jurisdictions and across various crop types. We are particularly excited by the prospect of making an entrance to the US market, with our impending EPA approval, and to capitalise on the opportunity presented by being embedded in one of the largest agricultural markets in the world. This expansion comes alongside our recent OTC listing, where we hope to expand and diversify our shareholder base, offering US investors the opportunity to participate in the promising future of sustainable agriculture.

In the mid-term, we hope to further leverage our close partnership with Corteva, which has now entered its third year, to bring to market our innovative seed treatment product which uses Eden's proprietary, plastic-free Sustaine® encapsulation technology.

As we aim to become a central part of a more sustainable agricultural future, driven by our highly motivated and skilled team of experts, we look forward to delivering on our milestones this coming year and materialising the true value of Eden's proposition for all our stakeholders."

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information contact:

Notes to Editors:

Eden Research is the only UK-listed company focused on biopesticides for sustainable agriculture. It develops and supplies innovative biopesticide products and natural microencapsulation technologies to the global crop protection, animal health and consumer products industries. 

Eden's products are formulated with terpene active ingredients, based on natural plant defence metabolites. To date, they have been primarily used on high-value fruits and vegetables, improving crop yields and marketability, with equal or better performance when compared with conventional pesticides. Eden has two products currently on the market: 

Mevalone® is a foliar biofungicide which initially targets a key disease affecting grapes and other high-value fruit and vegetable crops. It is approved for sale in a number of key countries whilst Eden and its partners pursue regulatory clearance in new territories thereby growing Eden's addressable market globally.

Cedroz™ is a bionematicide that targets free living nematodes which are parasitic worms that affect a wide range of high-value fruit and vegetable crops globally. Cedroz is registered for sale on two continents and Eden's commercial collaborator, Eastman Chemical, is pursuing registration and commercialisation of this important new product in numerous countries globally.

Eden's Sustaine® encapsulation technology is used to harness the biocidal efficacy of naturally occurring chemicals produced by plants (terpenes) and can also be used with both natural and synthetic compounds to enhance their performance and ease-of-use. Sustaine microcapsules are naturally-derived, plastic-free, biodegradable micro-spheres derived from yeast. It is one of the only viable, proven and immediately registerable solutions to the microplastics problem in formulations requiring encapsulation.

Eden was admitted to trading on AIM on 11 May 2012 and trades under the symbol EDEN. It was awarded the London Stock Exchange Green Economy Mark in January 2021, which recognises London-listed companies that derive over 50% of their total annual revenue from products and services that contribute to the global green economy. Eden derives 100% of its total annual revenues from sustainable products and services. 

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

Chairman's Statement

Over the past two years, Eden has continued to steadily progress its development plans and has made strides on several fronts.

March 2020's successful fundraise provided Eden with a firm platform to invest in the development of the Company's product portfolio and broaden its technical capabilities with the opening of a laboratory facility. Not only has Eden been able to move forward apace in new product areas such as seed treatment and insecticides, but product regulatory approvals have also come to fruition which have provided opportunities for sales growth.

Nevertheless, the pace with which we had initially hoped to accelerate our development was hampered by the COVID-19 pandemic which brought a high degree of uncertainty globally. This was particularly challenging for growth companies like Eden, having hired a new team as well as opening a new laboratory facility during lockdown. In 2021, the effects of government-imposed restrictions were still being felt as travel and leisure activities along with wine consumption continued to be significantly lower than in 2019.

The other, and arguably more important, unfortunate consequence of the pandemic has been the slowing down of the regulatory approval process which has particularly affected Eden in the US. Additionally, the Environmental Protection Agency (EPA) suffered resource deficiencies as a consequence of underfunding during the previous Presidential administration which has further compounded the effects of the pandemic.

The knock-on effects from regulatory delays have been particularly impactful as the US represents a significant market opportunity for Eden with growers and consumers there becoming ever more concerned about the use of traditional chemical pesticides and seeking to replace them with effective, lower risk alternatives, such as Eden's.

The seed treatment project, for which Eden has partnered with Corteva Agriscience, has moved into its third year of development and progresses ever closer to commercialisation which is expected in time for the 2024 season.

Field trials of our insecticide formulations have shown consistently good efficacy results; comparable to the traditional chemical products and superior to that of one of the leading biopesticide alternatives.

We should soon be at the stage where we are able to hand over to a long list of interested parties our product for their own testing with a view to entering into what is expected to be a number of commercial agreements for those distribution rights.

In conjunction with its commercial partners, Eden has been able to expand the label of existing products which results in a larger addressable market, which should directly lead to product sales growth, the first results of which we expect to see in a meaningful way in 2022.

New disease targets for existing products have been identified and trials work undertaken in order to verify that these opportunities are viable and commercial success achievable.

The technical capabilities of Eden have increased dramatically, with our ability to develop products, undertake screening and formulation work all now in-house at our laboratory facility in Oxfordshire.

All of this has been achieved during a very challenging period which has hampered supply chains, caused staffing issues and backlogged administrative processes, affecting the team at Eden, the Company itself and the rest of the world. Despite the challenging environment, we remain focused upon the opportunities that exist in our growing industry and we look forward to embracing these in 2022 and beyond. This should begin by leveraging our US OTC listing on receipt of our expected EPA approval for our core products to expand our presence in a significant market. Advancements to also grow our product range represent another exciting avenue for the Company, bringing the potential to broaden our product reach into the consumer products industry. Finally, our recently obtained approvals across a number of geographies will allow Eden to materially grow its revenues in the 2023 growing season and beyond.

I would like to thank our staff for all their hard work and the shareholders for their on-going support. I would like to convey to you all my sincerely held confidence in Eden's future success.

Lykele van der Broek

Non-Executive Chairman

30 May 2022

Chief Executive Officer's Review

Section one: Introduction

Despite the ongoing, exceptional circumstances and the disruption to the global business landscape, agriculture and regulatory processes, Eden has continued to demonstrate resilience and make tangible progress in advancing our business strategy, capitalising on the rapidly growing global biopesticides market and growing demand for plastic free crop protection solutions.

Eden continued to expand its commercial and regulatory footprint by moving into new geographies, increasing our product offerings and forging milestone partnerships, including a landmark agreement with global major, Corteva Agriscience, for our first seed treatment product which uses our Sustaine® encapsulation technology and sustainable active ingredients.

Alongside these advances across the business, we have also focused on bolstering our credentials as a business and investment opportunity with sustainability at its core, building on the award of the London Stock Exchange's Green Economy Mark which we received at the beginning of 2021 in recognition of the role we are playing in supporting the transition to sustainability.

We believe that by expanding our global footprint, we are playing a key role in this transition. Consumers, farmers and regulators are demanding more sustainable and plastic-free agricultural solutions and Eden's products meet this demand.

Section two: Delivering on our strategy

Eden is the only UK-quoted company focused on biopesticides for sustainable agriculture. We are operating in a constantly expanding market, providing sustainable solutions to farmers globally. The biopesticides market is anticipated to be worth over £11 billion by 2027 and Eden is a true innovator in the space.

Our strategic goals remain the same. We are focused on being the leading deliverer of sustainable crop protection solutions through the development and distribution of our two approved products, Mevalone and Cedroz, and furthering the use of Sustaine with third party active ingredients.

Eden's products are capitalising on a global market for solutions that protect high-value crops, whilst improving yields and marketability, without damaging local biodiversity and environmental systems.

In the near term, our strategic focus is on:

- Expanding our commercial growth by:

o  Receiving regulatory clearance for applications already made in new countries, crops and diseases

o  Accelerating the development of our Sustaine® technology

o  Securing new partnerships for Mevalone® in new territories

o  Pursuing further collaborations with majors and selected national partners

o  Optimising our route to market

- Diversifying our business line by:

o  Expanding the crops and diseases our products can be applied to through new regulatory applications

o  Securing new regulatory approval and distribution agreements in new geographies and climates for products under development

o  Pursuing new opportunities in the seed treatment space

o  Advancing the development of our first insecticide products

o  Launching new products in the consumer products and animal health markets

- Expanding our research and development operations by:

o  Optimising our supply chain

o  Expanding our in-house screening and field trials capability

o  Accelerating the commercialisation of Sustaine® for conventional actives

o  Increasing self-reliance for R&D and reducing time to market

- Strengthening and growing our team by:

o  Adding to our R&D capacity, including in microbiology, plant biology, agronomy, and analytical chemistry

o  Expanding our commercial team

o  Building our in-house regulatory expertise in order to accelerate time to market and reducing regulatory costs

We continue to make consistent progress across these areas, to build on what we have achieved to date and develop new commercial growth opportunities.

Notable commercial and operational highlights from 2021 include:

· Development of Eden's foliar biofungicide product, Mevalone®, with the expanded authorisation of its use on a variety of key crops including:

o  Pome fruits (such as apples and pears) in France

o  Strawberries, raspberries, blueberries, cranberries, kiwi, aubergines and peppers in Portugal

o  Wine and table grapes in Romania and

o  Strawberries, peppers, courgettes, aubergine, tomatoes, lettuce, brassicas, and raspberries in Spain

· Authorisation of the use of Eden's nematicide formulation, CedrozTM for:

o  Tomatoes and cucumbers in Morocco and

o  Tomato, eggplant, pepper, chili, pepino, cucumber, melon, courgette, pumpkin, and strawberries in Italy

· The signing of an exclusive Commercialisation, Supply and Distribution Agreement with Corteva Agriscience, for Eden's first seed treatment product

· The signing of an exclusive agreement with Sipcam for the marketing, distribution and selling rights of Mevalone® (marketed as Araw®) in four North African countries: Egypt, Morocco, Algeria and Tunisia.

Corteva

In May 2021, we were delighted to sign an exclusive Commercialisation, Supply and Distribution Agreement with Corteva Agriscience, the fourth largest agriculture company in the world, for Eden's first seed treatment product which uses Eden's proprietary, plastic-free Sustaine® encapsulation technology. This built on a one-year evaluation agreement with Corteva signed in 2020 and successful evaluations of Eden's products and technology by Corteva for select seed treatment applications since late 2019.

The deal is a significant corporate milestone for Eden marking our first foray into the use of our active ingredients and Sustaine® technology in seed treatments and the first use of our products and technology on broad acre crops, which represents significant future revenue potential.

US investor market

In October 2021, Eden announced that its shares will be traded on the U.S. OTCQB market allowing US investors to trade Eden's shares for the first time. This move allows us to diversify our shareholder base in one of the world's biggest agricultural markets. Currently, farmers in the US spend billions of dollars every year on products that help them protect their crops and keep up with food demand.

This move is also in anticipation of expanding our commercial footprint in the US following the regulatory approval for our products, which is expected in 2022. The US has a fast growing, organic, 'green' and eco-label food market and is accelerating regulations against the use of harmful pesticides, mirroring the global drive to reduce, or eliminate, the use of potentially harmful pesticides. Eden's sustainable biopesticides are well placed to capitalise on this significant opportunity, once we have received the anticipated Environmental Protection Agency (EPA) approval.

Section three: Financial review

Revenue for the year was £1.2m (2020: £1.4m).

Our objective is to grow revenue primarily through product sales which will ultimately provide a sustainable, consistent source of income for the Company. In 2021, despite adverse market conditions in many territories, sales of Cedroz and Mevalone increased overall, in volume, by approximately 4% and by 6% on a constant currency basis (using the current year average foreign exchange rate for both current and prior year sales). However, due to adverse foreign currency exchange rates, this growth hasn't translated into an increase in product sales revenue, which remained flat at £1.1m (2020: £1.1m).

Following the successful fundraise in March 2020, the cash position at the year-end has reduced to £3.9m (2020: £7.3m). However, the Company remains sufficiently funded and well placed to implement its ambitious growth strategy, including investing in product trials, pursuing product authorisations and continuing to grow its team of experts.

Administrative expenses in the year increased to £2.6m (2020: £2.2m) with the introduction of new team members. Operating loss increased to £3.2m (2020: £2.2m). The increase in operating loss is due to increased staff costs, as well as share-based payment charges of £0.6m (2020: £0.1m). Throughout the year, the Company remained debt free with no long-term debt or lending facilities in place, or expected to be required.

Section four: 2022 outlook

In 2022, our ambition is to build on the new approvals (and the expanded addressable market that they represent) and partnerships achieved in 2021. Examples include new crop and pest uses for Mevalone® in Spain and Portugal, the use of Cedroz™ in Italy and Morocco, as well as working with our partners such as Sipcam to expand the sales of our products across key countries in North Africa.

The seed treatment project with Corteva continues this year with further field trials taking place which should ultimately be used in the application for regulatory authorisation in the EU.

Eden is awaiting approval of its active ingredients, as well as its products, Cedroz and Mevalone, in the US from the EPA. Expansion into the US will be a major milestone for Eden given the size of the US agricultural market; the world's second largest. Due to the nature of the process and a schedule heavily impacted by the COVID pandemic, it is hard to predict exactly when new approvals will be achieved. However, we are in continual contact with regulators to progress the process as quickly as possible, and we expect to be able to update shareholders with updates on EPA approval in the coming months.

In addition, now that Eden's shares can be traded in the US via the OTC market, we will be focusing our efforts on increasing visibility to US investors and audiences during the remainder of 2022. Our hope is that there will be increased demand for Eden shares once we achieve the anticipated US EPA approvals.

Section five: Driving positive impact

As a company which works closely with farmers and custodians of nature, we are acutely aware of both the immense power and fragility of the environment and its systems. The deepening impact of climate change and human activity affects farmers globally; from changes in temperature and destruction of critical biodiversity to adverse weather events. We believe that Eden has an important part to play in protecting and helping farmers to work with nature to find sustainable solutions, without adversely impacting their bottom line.

Eden is a company with sustainability at the core of its operations and products. We believe that the most significant way that Eden can make a positive impact on the planet is to grow our business rapidly, bringing our core products and technologies to the mainstream market, and displacing unsustainable alternatives.

We are dedicated to achieving this aim in a sustainable and responsible manner, by ensuring our operations and processes are shaped with the environmental impact in mind at every step.

Our portfolio of products helps farmers to protect natural biological ecosystems, as well as their high value crops, meeting the growing demands of both consumers and regulators. The ingredients we use to formulate our products; geraniol, eugenol and thymol, are naturally occurring and have all been allowed for use in organic agriculture in the European Union.

Our goal is to expand the reach and applications of our products, so more farmers in more markets globally can strike this balance of high crop yield and sustainable production.

In addition to our biopesticide products and ingredients, our patented microencapsulation technology, Sustaine®, directly addresses the growing issue of intentionally-added microplastics use in agriculture which leads to pollution in the soil, water and plant and animal tissues. Sustaine® microcapsules are naturally sourced, plastic-free, biodegradable micro-spheres derived from yeast extract, which enable farmers to deliver crop protection products without releasing microplastics into the environment.

This technology has significant potential to be applied beyond its use in biopesticides and crop protection products and we are exploring a range of applications across the animal and consumer product sectors, where producers are under pressure from consumers and regulators to reduce plastic use. 

Brexit

The impact of Brexit is starting to be understood by many UK companies, including Eden.

The Company's ownership of its EU approvals of Mevalone® and its constituent active substances has been unaffected by Brexit, based on guidance that was published stating that the owner of such approvals can continue to be a UK resident company.

We know that seeking regulatory approval in the UK for Eden products has become somewhat more challenging, and the Company continues to weigh up market opportunities and costs post Brexit. We are well placed to navigate what are likely to be dynamic and complex regulatory challenges. From an operational perspective, the Company has not seen any significant issues, rather it has benefited from having toll manufacturing facilities in mainland Europe, though it continues to monitor this situation.

The Company has toll manufacturing capabilities in the UK and the US, which provide some operational flexibility. Raw materials are currently sourced from outside of the EU and there has been manageable impact on this part of the supply chain.

COVID-19

The fallout from the COVID-19 pandemic has continued to represent an unprecedented challenge for the agricultural industry, with global food systems and supply chains put under extreme pressure. Throughout the pandemic, Eden's priority has been to continue developing and supplying its products and technologies for the crop production industry through its global partnership network.

Most significantly, regulatory processes globally have remained behind schedule due to severe backlogs from 2020. This resulted in delays to key regulatory approvals that we were expecting in 2021.

Our position on how we are addressing the COVID-19 pandemic remains as follows:

1 Growth funded

In March 2020, we raised £10.4 million (gross) from investors, a feat that the whole team is proud of given the volatility and uncertainty in the markets at the time. This vote of confidence from our shareholders (both existing and new) helped us capitalise on the global shift towards more environmentally friendly methods of crop protection, driving us to become a leading provider of sustainable solutions for global agriculture. Though the period since has presented challenges for the Company, our employees and our partners, Eden remains debt-free and has carefully managed its cash resources allowing us to continue to execute on our exciting plans. Our outsourced manufacturing model means that we continue to retain maximum flexibility over our choice of manufacturing locations with a relatively low fixed cost base.

2 Our industry has a pivotal role to play

As demand soared for food supply during the lockdown periods across the UK and beyond, the agriculture industry had a vital role to play in feeding the world through the crisis and minimising the economic fallout. Plant protection products play a fundamental role in agricultural production; without them, we would not be able to cope adequately with global emergencies such as COVID-19. The biopesticides market outlook remains undoubtedly positive, with a clear demand from consumers for sustainably grown produce and in response, a notable shift from growers towards greener farming practices. As we step into the 'new normal', consumer demand for a chemical-free supply chain journey will only be more prevalent. Not only do people need food to survive, they are increasingly conscious of where it comes from and concerned about the supply chain journey. The choices people are making to put healthy food on the table are driving what farmers grow in their fields and how they grow them with an increasing emphasis on sustainable practices and produce that is free from pesticide residues. This is the future of farming, and Eden is at the forefront of the movement towards sustainable farming practices.

3 Supporting our employees and partners

We continue to work closely with our partners as they maintain their business of supplying our product to growers in an increasing number of countries. Our team continues to regularly review the situation so that we can adapt to any changes that may be experienced by our partners, and ensure the health and safety of their workers is paramount. Closer to home, Eden's team are resuming travel, though we continue to work remotely part-time. I want to thank our partners and, of course, the farmers who cannot carry out their work remotely and who are working hard each day to ensure that we have enough to eat now and in the future. Their work cannot stop, and we are grateful now more than ever for all that they do to feed us.

TerpeneTech (UK)

TerpeneTech (UK) secured a CE mark for its head-lice treatment product in European Economic Area ("EEA") in 2018, which is the first step in the marketing and sales of such products. The launch of the head-lice product has been delayed by the COVID-19 pandemic, with the closure of schools particularly impacting its potential market. Since schools have re-opened, the UK distributor has not met expectations and, as such, a new partner for the UK market is being sought.

Sales of the head-lice treatment product are expected to commence in other countries around the world in 2022 with TerpeneTech (UK) expected to sign an agreement with a new distribution partner in due course.

Sales of geraniol into the biocide sector have continued to increase year on year and TerpeneTech (UK) is investigating the potential to register additional active ingredients under the EU's biocide directive.

TerpeneTech (Ireland)

TerpeneTech (Ireland) was established in 2019 in order to own the registration of geraniol under the EU's Biocidal Products Registration regulation, due to changes brought about by Brexit. As such, TerpeneTech (Ireland) receives royalty income from TerpeneTech (UK) on the sales of geraniol, but is otherwise non-operational.

Ukraine

Eden does not currently have any business activities in Russia or Ukraine and, as such, does not expect any immediate, direct impact on its business.

The knock-on effect of the conflict on other countries is yet to be understood, though we do not envisage significant disruption to the current business in the short term.

Dividends

There is no dividend to be paid or proposed in 2021. The Board continues to monitor its dividend policy.

Section six: Summary

Despite the ongoing, uncertain backdrop, I am pleased that Eden has made progressive strides in 2021, underpinned by a belief that we are best placed to meet global demands for sustainable and plastic-free agricultural solutions and have a long term positive impact on the health of the planet.

As we move through 2022, I am excited about the commercial opportunities ahead, including the potential expansion into the US market, subject to EPA approval, and the development of our first seed treatment product with Corteva, as well as continuing to grow our regulatory footprint and addressable markets in new territories and on new crops. We look forward to sharing updates on these, and more, positive developments with all our stakeholders.

I would like to take this opportunity to say thank you to Eden's team for the exceptional ingenuity and resilience they have shown this year, in sometimes challenging circumstances.

I remain proud of the work Eden is doing in contributing to more environmentally friendly agricultural practices globally and building a strong, visionary and innovative business with sustainability at its core.

Sean Smith,

Chief Executive Officer

Consolidated statement of comprehensive income for the year ended 31 December 2021

Consolidated statement of financial position as at 31 December 2021

Company statement of financial position as at 31 December 2021

Consolidated statement of changes in equity for the year ended 31 December 2021

Company statement of changes in equity for the year ended 31 December 2021

Consolidated statement of cash flows for the year ended 31 December 2021

Company statement of cash flows for the year ended 31 December 2021

Notes to the Preliminary Results for the year ended 31 December 2021

Accounting policies

1 Company information

Eden Research plc is a public company limited by shares incorporated in England and Wales. The registered office is 67C Innovation Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RQ. The Company's principal activities and nature of its operations are disclosed in the Directors' report.

The group consists of Eden Research plc, its subsidiaries, TerpeneTech Limited (Ireland), Eden Research Europe Limited (Ireland) and its associate company, TerpeneTech Limited (UK).

1.1 Accounting convention

The Group financial statements have been prepared in accordance with UK-adopted international accounting standards. The Company financial statements have been prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.

They have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.

Associates

Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another entity, or where the Company has a lower interest but the right to appoint a Director. The Company acquired 29.9% of TerpeneTech Limited ("TerpeneTech (UK)") during 2015; TerpeneTech (UK) is an associated undertaking.

Application of the equity method to associates

The investment in TerpeneTech (UK) is accounted for using the equity method. The investment was initially recognised at cost. The Company's investment includes goodwill identified on acquisition, net of any accumulated impairment losses and any separable intangible assets. The financial statements include the Company's share of the total comprehensive income and equity movements of TerpeneTech (UK), from the date that significant influence commenced.

Eden Research plc is a public company limited by shares incorporated in England and Wales. The registered office is 67C Innovation Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RQ. The company's principal activities and nature of its operations are disclosed in the directors' report.

The group consists of Eden Research plc, its subsidiaries, TerpeneTech Limited (Ireland), Eden Research Europe Limited (Ireland) and its associate company, TerpeneTech Limited (UK).

Changes in presentation of the financial statements

The Directors continue to assess the clarity of the financial statements and the need for changes in presentation to enable and assist understanding of users of the accounts as the operations of the Group continue to evolve.

Following this consideration, however, there have been no changes made in the current year, including changes in comparative figures, to enhance presentation.

1.2 Basis of consolidation

The consolidated financial statements consolidate the financial statements of the Company and its subsidiary undertakings up to 31 December 2021. The profits and losses of the Company and its subsidiary are consolidated from the date from which control is achieved. All members of the group have the same reporting period.

Subsidiary undertakings are entities controlled by the Company. The Company controls an entity when it is exposed to, or has the right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

1.3 Going concern

The Directors have, at the time of approving the financial statements, a reasonable expectation that the group has adequate resources to continue in operational existence for at least 12 months from the approval of the financial statements. Thus, the financial statements have been prepared on a going concern basis which contemplates the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Group has reported a loss for the year after taxation of £2,777,543 (2020: £2,263,024). Net current assets at that date amounted to £4,329,110 (2020: £7,653,036). Cash at that date amounted to £3,829,369 (2020: £7,286,503). As at 30 April 2022, the cash balance has reduced further to £2,451,971. The group is reliant on its existing cash balance to fund its working capital.

The Directors have prepared budgets and projected cash flow forecasts, based on forecast sales provided by Eden's distributors where available, for a period of at least 12 months from the date of approval of the financial statements and they consider that the Company will be able to operate with the cash resources that are available to it for this period. 

The forecasts adopted include revenue derived from existing contracts as well as expected new contracts in respect of products not yet available for use.

The impact of COVID has been considered in the forecasts. The Group has not been significantly impacted by the pandemic although it has led to some delays in regulatory approvals, product development process and limited promotional activity. The forecasts reflect this with the development expenditure timing based on the latest experience with regulatory authorities and sales volumes on the latest distributors' information which reflects their post-COVID demand.

In addition, the Group has relatively low fixed running costs and the Directors have previously demonstrated ability and willingness to delay certain costs, such as research and development expenditure, where required and are willing and able to delay costs in the forecast period should the need arise. A positive cash balance is forecast to be maintained in this base scenario throughout the entire forecast period.

In addition, the Directors have also considered a downside scenario which includes reductions to revenue derived from existing contracts as well as elimination of revenue from products not yet available for use offset by mitigations around research and development expenditure as well as some reductions in expansionary overheads. Under this scenario, a positive cash balance would be maintained over the forecast period.

Consequently, the Directors are confident that the Group and Company will have sufficient funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

The Group's achievement of long-term positive cash generation is reliant on the completion of ongoing product development and successful initial approval and registration of these products with various regulatory bodies, as well as the registration of existing products in new territories. While the Group is forecast to become cash generative in 2024 under the base budget, the Directors consider it reasonably possible that the Group will require a further fundraise prior to that point but beyond the going concern period. The Directors have assessed the likelihood of obtaining such funding, particularly in the context of the successful raise in March 2020, and would expect to be able to raise such funds as necessary.

1.4 Revenue

Revenue is recognised only when the Company has satisfied a performance obligation by transferring control to a customer.

Revenue represents amounts receivable by the Company in respect of services rendered during the year in accordance with the underlying contract of licence, stated net of value added tax.

Sales-based royalty income arising from licences of the Company's intellectual property is recognised in accordance with the terms of the underlying contract and is based on net sales value of product sold by Eden's licensees. It is recognised when the underlying sales occur.

Upfront and annual payments made by customers at commencement and for renewal of distribution and other agreements are recognised in accordance with the terms of the agreement. Where there is no ongoing obligation on the Company under the agreement, the payment is recognised in full in the period in which it is made. Where there is an ongoing obligation on the Company, the separate performance obligations under the agreement are identified and revenue allocated to each performance obligation. Revenue is then recognised when a corresponding performance obligation has been met.

Each sale of a licence by the Company is assessed to determine whether the licence is distinct from the sale of other goods and services, and whether the licence granted provides use of the Company's intellectual property as it exists at that point in time, with no ongoing obligation on the Company, or alternatively provides access to the intellectual property as it develops over time. Where the Company has discharged all of its ongoing obligations associated with the licence granted, revenue is recognised on invoicing of the licence fee payment at which point the customer can use and benefit from the licence. Where there is an ongoing obligation on the Company, revenue is recognised in the periods to which the obligations pertain.

Product sales are recorded once the ownership and related rights and responsibilities are passed to the customer and the product is made available to the partner to collect, or, if the Company is responsible for the shipping, the product has been shipped to the customer.

The following is a description of the principal activities from which the Company generates its revenue.

Licensing fees

The Company receives licensing fees from partners who have taken a licence for the right to use Eden's intellectual property, usually defined by field of use and territory. These are identified as the right to use as the Company does not have an obligation to undertake activities that significantly affect the relevant intellectual property.

Milestone payments

The Company receives milestone payments from other commercial arrangements, including any fees it has charged to partners for rights granted in respect of distribution agreements.

These agreements are bespoke and any such revenue is specific to the particular agreement. Consequently, for each such agreement, the nature of the underlying performance obligations is assessed in order to determine whether revenue should be recognised at a point in time or over time.

Revenue is then recognised based on the above assessment upon satisfaction of the performance obligation.

The Corteva agreement entered into in the current year includes milestone payments with £141,293 received in the current year. These milestone payments have been assessed to relate to a performance obligation in respect of provision of R&D services and a licence to the developed product with the performance obligation being satisfied at a point in time. As at year end, this performance obligation had not been reached and, consequently, the amounts received deferred as contract liability (presented within Accruals and Deferred Income in note 19).

Further milestone payments are contractually due in the year ending 31 December 2022. The performance obligation is expected to be met no later than by 31 December 2023.

The second performance obligation relates to product sales and will be accounted for in line with the product sales policy disclosed below once the commercial sales have commenced.

R&D charges

The Company sometimes charges its partners for R&D costs that it has incurred which usually relate to specific projects and which it has incurred through a third party.

Upon agreement with a partner, or if some specific milestone is met, then Eden will raise an invoice which is usually payable between 30 and 120 days. Revenue is recognised upon satisfaction of the underlying performance obligation.

Royalties

The Company receives royalties from partners who have entered into a licence arrangement with Eden to use its intellectual property and who have sold products, which then gives rise to an obligation to pay Eden a royalty on those sales.

Generally, royalties relate to specific time periods, such as quarterly or annual dates, in which product sales have been made. Revenue is recognised in line with when these sales occur.

Once an invoice is raised by Eden, following the period to which the royalties relate, payment is due to the Company is 30 to 60 days.

Product sales

Generally, where the Company has entered into a distribution agreement with a partner, Eden is responsible for supplying product to that partner once a sales order has been signed.

At that point, Eden has the product manufactured through a third-party, toll manufacturer. At the point at which the product is finished and is made available to the partner to collect, or, if the Company is responsible for the shipping, the product has been shipped, the partner is liable for the product and obliged to pay Eden. Normal terms for product sales are 90 to 120 days. Returns are not accepted and refunds are only made when product supplied is notified as defective within 60 days.

The Group does not have any contract assets or liabilities other than the liability in respect of the Corteva milestone payments noted in the milestone section (2020: none).

1.5 Intangible assets other than goodwill 

Intellectual property, including development costs, is capitalised and amortised on a straight-line basis over its remaining estimated useful economic life of 9 years in line with the remaining life of the Company's master patent, which was originally 20 years, with additional Supplementary Protection Certificates having been granted in the majority of the countries in the EU in which Eden is selling Mevalone®. The useful economic lie of intangible assets is reviewed on an annual basis.

An internally generated intangible asset arising from the Company's development activities is recognised only if all the following conditions are met:

· the project is technically and commercially feasible;

· an asset is created that can be identified;

· the Company intends to complete the asset and use or sell it and has the ability to do so;

· it is probable that the asset created will generate future economic benefits;

· the development cost of the asset can be measured reliably; and

· there are sufficient resources available to complete the project.

Internally-generated intangible assets are amortised on a straight-line basis over their useful lives from the date they are available for use. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred.

1.6 Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.7 Impairment of tangible and intangible assets

The Directors regularly review the intangible assets for impairment and provision is made if necessary. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

1.8 Inventories

Inventories are stated at the lower of cost and estimated selling price, less costs to complete and sell. Cost is based on the first-in-first-out principle. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

1.8 Inventories

Inventories are stated at the lower of cost and estimated selling price, less costs to complete and sell. Cost is based on the first-in-first-out principle. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

(i) Recognition and initial measurement

Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a part to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable with a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss ("FVTPL"), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(ii) Classification and subsequent measurement

Financial assets

(a) Classification

On initial recognition, a financial asset is classified as measured at amortised cost or FVTPL.

Financial assets are not reclassified subsequently to their initial recognition unless the Company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions:

· It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

· Its contractual terms give rise on specific dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in associates accounted for using the equity method and subsidiaries are carried at cost less impairment.

(b) Subsequent measurement and gains and losses

Financial assets at amortised cost - These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Financial liabilities and equity

Financial instruments issued by the Company are treated as equity only to the extent that they meet the following two conditions:

(a) they include no contractual obligations upon the Company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company; and

(b) where the instrument will or may be settled in the Company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Company's own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

Where a financial instrument that contains both equity and financial liability components exists these components are separated and accounted for individually under the above policy.

(iii) Impairment

The Group recognises loss allowances for expected credit losses (ECLs) on financial assets measured at amortised cost.

The Group measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition, which are measured as 12-month ECL.

Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company's historical experience and informed credit assessment and including forward-looking information.

The Group considers a financial asset to be in default when:

· the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or

· the financial asset is more than 120 days past due.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Write-offs

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery.

1.10 Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date. The current tax charge includes any research and development tax credits claimed by the Company.

R&D tax credits are accounted for by reference to IAS 12.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interest in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on the tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

1.11 Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12 Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13 Share-based payments

The Company has applied the requirements of IFRS 2 Share-Based Payments.

Unapproved share option scheme

The Company operated an unapproved share option scheme for executive directors, senior management and certain employees up to September 2017.

Long-Term Incentive Plan ('LTIP')

In 2017, the Company established a LTIP to incentivise the Executives to deliver long-term value creation for shareholders and ensure alignment with shareholder interest. Awards were made annually and were subject to continued service and challenging performance conditions usually over a three year period. The performance conditions were reviewed on an annual basis to ensure they remained appropriate and were based on increasing shareholder value. Awards were generally structured as nil cost options with a seven year lift after vesting.

Other than in exceptional circumstances, awards were up to 100% of salary in any one year and granted subject to achieving challenging performance conditions set at the date of the grant. A percentage of the award vests for 'Threshold' performance with full vesting taking place for equalling or exceeding the performance 'Target'. In between the Threshold and Target there may be pro rata vesting. 

The LTIP was adopted by the Board of Directors of Eden on 28 September 2017.

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Statement of Profit or Loss and Other Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that ultimately the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted, as long as other vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where the terms and conditions of options are modified before they vest, the increase in fair value of the options, measured immediately before and after the modification is also charged to the Statement of Profit or Loss and Other Comprehensive Income over the remaining vesting period.

In June 2021, the Company made changes to the LTIP. Details can be found in the Remuneration Report.

The changes to the LTIP have been treated as a modification of the existing plan for financial reporting purposes which means that the Fair Value of previous awards has been recognised over their remaining term and the incremental Fair Value of the new options granted has been recognised separately over their own vesting period.

The Company issued further options under the modified LTIP, in excess of the replacement awards, details of which can be found on note 22. These include graded vesting.

Share options which vest in instalments over a specified vesting period (graded vesting) where the only vesting condition is service from grant date to vesting date of each instalment are accounted for as separate share-based payments. Each instalment's fair value is assessed separately based on its term and the resulting charge recognised over each instalment's vesting period.

Other share options

In addition to the LTIP grants, the Company awarded certain employees approved options. Details of these options can be found in note 22. The accounting treatment for these options is consistent with that indicated under the LTIP section at the start of this page.

1.14 Leases

At inception, the Group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at, or before, the commencement date, plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the Group is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the Group's estimate of the amount expected to be payable under a residual value guarantee; or the Group's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

1.15 Grants

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.

1.16 Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period.

Whilst the majority of the Company's revenue is in Euros, the Company also incurs a significant level of expenditure in that currency. As such, the Company does not currently use any hedging facilities and instead chooses to keep some of its cash at the bank in Euros.

1.17 Research and development

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

1.18 Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement in the periods during which services are rendered by employees.

1.19 Financial risk management

The Company's activities expose it to a variety of financial risks: market risks (including currency risk and interest rate risks), credit risk and liquidity risk. Risk management focuses on minimising any potential adverse effect on the Company's financial performance and is carried out under policies approved by the Board of Directors.

2 Adoption of new and revised standards and changes in accounting policies

(a) New standards, amendments and interpretations

There has been one newly effective amendment to standards during the year.

• Amendments to IFRS 9 'Financial Instruments', IAS 39 'Financial Instruments: Recognition and Measurement', IFRS 7 'Financial Instruments: Disclosures, IFRS 4 'Insurance Contracts', IFRS 16 'Leases' related to interest rate benchmark reform (phase two) and the issues that arise from the implementation of the reforms, including the replacement of one benchmark with an alternative one.

(b) New standards, amendments and interpretations issued but not effective and not adopted early

A number of new standards, amendments to standards and interpretations which are set out below are effective for annual periods beginning after 1 January 2022 and have not been applied in preparing these consolidated financial statements.

• Amendment to IFRS 3 'Business combinations' to update references to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations.

• Amendments to IFRS 9 'Financial Instruments', IAS 39 'Financial Instruments: Recognition and Measurement', IFRS 7 'Financial Instruments: Disclosures, IFRS 4 'Insurance Contracts', IFRS 16 'Leases' related to interest rate benchmark reform (phase two) and the issues that arise from the implementation of the reforms, including the replacement of one benchmark with an alternative one.

• Amendment to IFRS 16 'Leases' which provides an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19 is a lease modification.

• IFRS 17 'Insurance contracts' which establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 'Insurance Contracts'

• Amendments to IAS 1 'Presentation of financial statements' on classification of liabilities which is intended to clarify that liabilities are classified as either current or non-current depending upon the rights that exist at the end of the reporting period.

• Amendments to IAS 16 'Property, plant and equipment' to prohibit the deduction from cost of property, plant and equipment amounts received from selling items produced while preparing the asset for its intended use with any such sales and related cost recognised in profit or loss.

• Amendments to IAS 37 'Provisions, contingent liabilities and contingent assets' to specify which costs a company includes when assessing whether a contract will be loss making.

• Annual improvements to make minor amendments to IFRS 1 'First-time adoption of IFRS', IFRS 9 'Financial Instruments', IAS 41 'Agriculture' and amendments to the illustrative examples accompanying IFRS 16 'Leases'.

The Directors anticipate that at the time of this report none of the new standards, amendments to standards and interpretations are expected to have a material effect on the financial statements of the Group or parent Company.

3 Critical accounting estimates and judgements

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Going concern

The Directors have considered the ability of the Company to continue as a going concern and this is considered to be a significant judgement made by the Directors in preparing the financial statements.

The ability of the Company to continue as a going concern is ultimately dependent upon the amount and timing of cash flows arising from the exploitation of the Company's intellectual property and the availability of existing and/or additional funding to meet the short term needs of the business until the commercialisation of the Company's portfolio is reached. The Directors consider it is appropriate for the financial statements to be prepared on a going concern basis based on the estimates they have made.

Associate

A judgement has been made that Eden exerts significant influence on TerpeneTech (UK) such that it is an associate company and, as such, adoption of equity accounting is appropriate.

COVID-19

The Company has made accounting judgements and estimates based on there being minimal impact of COVID-19 on the business in the long term. This is impacting, in particular, the forecasts used as the basis for intangibles impairment review, investment impairment review and going concern. Clearly, this is still a degree of uncertainty as to exactly how and if the business could be impacted and the Directors will continue to monitor the situation closely.

Other accounting judgements

In addition to the above, the Company has made other judgements which are considered of lesser significance.

Capitalised development costs and Intellectual property

The Directors have exercised a judgement that the development costs incurred meet the criteria in IAS 38 Intangible Assets for capitalisation. In making this judgement, the Directors considered the following key factors:

• The availability of the necessary financial resources and hence the ability of the Company to continue as a going concern.

• The assumptions surrounding the perceived market sizes for the products and the achievable market share for the Company.

• The successful conclusion of commercial arrangements, which serves as an indicator as to the likely success of the projects and, as such, any need to potential impairment.

Significant judgement had to be exercised in respect of £nil costs capitalised in the current year (2020: £59,222) and therefore the Directors do not consider this to represent a critical judgment. There has been no research and development expenditure recognised as an expense in the current year in the P&L in excess of the amortisation of intangible assets as disclosed in note 12 (2020: £nil).

4 Revenue and Segmental Information

IFRS 8 requires operating segments to be reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for the resource allocation and assessing performance of the operating segments has been identified as the Executive Directors as they are primarily responsible for the allocation of the resources to segments and the assessment of performance of the segments.

The Executive Directors monitor and then assess the performance of segments based on product type and geographical area using a measure of adjusted EBITDA. This is the result of the segment after excluding the share-based payment charges, other operating income and the amortisation of intangibles. These items, together with interest income and expense are allocated to Agrochemicals, being the Company's primary focus.

The segment information for the year ended 31 December 2021 is as follows:

Please note the Consumer products segment was previously referred to as Human health and biocides.

The segment information for the year ended 31 December 2020 is as follows: