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Eden Research – failure to achieve minimum sales levels on licensed technology is spun as a positive

By Tom Winnifrith, The Sheriff of AIM | Thursday 29 June 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

We goaded AIM listed fraud Eden Research (EDEN) on its deal with UMMS and it has today made an announcement. The phrase polishing a turd springs to mind.

Eden states:

“New terms agreed with UMMS for licence to next-generation technology

Eden Research plc (AIM: EDEN), the AIM-listed company that provides breakthrough biocontrol products and natural microencapsulation technologies to the global agrochemicals, animal health and consumer products industries, announces that it has agreed new terms covering its licence agreement with University of Massachusetts Medical School ("UMMS").

In Eden's 2016 Report and Accounts it was noted that an amount of £570,462, (USD$700,000) had been accrued to UMMS for minimum royalties payable under the licence agreement which Eden signed with UMMS in 2011. Eden has now agreed with UMMS to revise the minimum royalties from October 2017, resulting in a net reduction in Eden's short-term financial obligations to UMMS, with the amount accrued being written off in its entirety.

Eden has achieved this by signing an Amendment with UMMS, for which Eden has agreed to pay a fee of USD$250,000. A portion of this fee is payable upon signature of the Amendment, and the balance is payable in one year's time.

Sean Smith, Chief Executive of Eden, said: "We are pleased to announce the re-setting of some of the key commercial terms of our licence agreement with UMMS. We believe that the new terms reflect both the long term potential of our next-generation encapsulation technology whilst also reflecting the current stage of technology development. We look forward to the ongoing collaboration with UMMS which is, in part, focussed on the further development of this technology with the objective of creating a next-generation encapsulation system to help us solve a broader set of challenges for our partners."”


True in net financial terms, it is positive news as it eliminates liability of £570,462 at a cost of $250,000 ($ circa £192,500) so a net gain of over £375,000. It also defers payment of an unspecified element of the fee for 12 months positive given Eden’s cash flow challenges. However, the reality is that the technology failed to generate sufficient sales to generate the minimum level of royalties even some six years later. Just how long is the long in long term potential?

As ever with Eden it is the promise of jam tomorrow. It never arrives. After more than 20 years of lying to investors and issuing bogus announcements of deals that never amount to a row of beans, Eden is still a cash guzzling fraud. The next bailout placing looms ever closer. The shares, at 10.375p, remain a slam dink sell with a target price of 0p

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