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UNITED STATES SECURITIES AND
EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q

(Mark One)

[X]     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the quarterly period ended March 31, 2002

or

[   ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the transition period from                     to

Commission File Number 0-31499

EDEN Bioscience Corporation

(Exact name of registrant as specified in its charter)


|                                                                          |  |                                             
|------------------------------------------------------------------------- |  | --------------------------------------------
|Washington
(State or other jurisdiction of
incorporation or organization) |  | 91-1649604
(IRS Employer Identification No.)

3830 Monte Villa Parkway
Bothell, Washington 98021-6942
(Address of principal executive offices, including zip code)

(425) 806-7300
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes   [X]     No   [   ]

State the number of shares outstanding of each of the registrants classes of
common equity, as of the latest practicable date:

|                               |  |                                  |            | 
|------------------------------ |  | -------------------------------- | ---------- | 
|Class                          |  | Outstanding as of April 24, 2002
|                               |  |                                 
|Common Stock, $.0025 Par Value |  |                                  | 24,217,640 | 



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TABLE OF CONTENTS



|                               |                                                                                               |                                                                                        |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                               |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS                                                 
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                       
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                       
|                               |                                                                                               | NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                        
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               |                                                                                               | Factors That May Affect Our Business, Future Operating Results and Financial Condition
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|PART II  OTHER INFORMATION   
|                               | Item 2. Changes in Securities and Use of Proceeds                                            
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                    
|Exhibit 11.1                  



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EDEN Bioscience Corporation

Index to Form 10-Q

|           |  |                                                                                       |    |                                                                                                    |    |      |    | 
|---------- |  | ------------------------------------------------------------------------------------- | -- | -------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|           |  |                                                                                       |    |                                                                                                    |    | Page
|           |  |                                                                                       |    |                                                                                                    |    |     
|Part I.    |  | Financial Information                                                                 |    |                                                                                                    |    |     
|Item 1.    |  | Financial Statements                                                                  |    |                                                                                                    | 2  |     
|           |  |                                                                                       |    | Condensed Consolidated Balance Sheets as of December 31, 2001 and March 31, 2002                   |    |      | 2  | 
|           |  |                                                                                       |    | Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2001 and 2002 |    |      | 3  | 
|           |  |                                                                                       |    | Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2001 and 2002 |    |      | 4  | 
|           |  |                                                                                       |    | Notes to Unaudited Condensed Consolidated Financial Statements                                     |    |      | 5  | 
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |    |                                                                                                    | 7  |     
|           |  |                                                                                       |    | Factors That May Affect Our Business, Future Operating Results and Financial Condition             |    |      | 12 | 
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                            |    |                                                                                                    | 20 |     
|Part II.   |  | Other Information                                                                     |    |                                                                                                    |    |     
|Item 2.    |  | Changes in Securities and Use of Proceeds                                             |    |                                                                                                    | 20 |     
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                      |    |                                                                                                    | 20 |     
|Signatures |  |                                                                                       | 20 |                                                                                                   

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PART I  FINANCIAL INFORMATION




Item
1.   Financial Statements




EDEN BIOSCIENCE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |             |            | 
|------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | ------------ | ---------- | --------- | ---------- | ----------- | ---------- | 
|                                                  |                                                                                                                                                                            |                                            |            | December 31, |            | March 31,
|                                                  |                                                                                                                                                                            |                                            |            | 2001         |            | 2002     
|                                                  |                                                                                                                                                                            |                                            |            |              |            |          
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            | (Unaudited)
|Current assets:                                   |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  | Cash and cash equivalents                                                                                                                                                  |                                            | $          | 48,327,022   |            |           | $          | 41,548,277  |           
|                                                  | Accounts receivable                                                                                                                                                        |                                            |            | 89,128       |            |           |            | 560,678     |           
|                                                  | Inventory                                                                                                                                                                  |                                            |            | 2,117,953    |            |           |            | 2,357,613   |           
|                                                  | Other current assets                                                                                                                                                       |                                            |            | 897,825      |            |           |            | 895,838     |           
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  |                                                                                                                                                                            | Total current assets                       |            |              | 51,431,928 |           |            |             | 45,362,406 | 
|Property and equipment, net                       |                                                                                                                                                                            |                                            | 22,385,662 |              |            |           | 21,688,085 |            
|Other assets                                      |                                                                                                                                                                            |                                            | 1,721,413  |              |            |           | 1,710,031  |            
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  |                                                                                                                                                                            | Total assets                               |            | $            | 75,539,003 |           |            | $           | 68,760,522 | 
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|LIABILITIES AND SHAREHOLDERS EQUITY             
|Current liabilities:                              |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  | Accounts payable                                                                                                                                                           |                                            | $          | 906,557      |            |           | $          | 750,917     |           
|                                                  | Accrued liabilities                                                                                                                                                        |                                            |            | 3,967,113    |            |           |            | 2,944,064   |           
|                                                  | Current portion of capital lease obligations                                                                                                                               |                                            |            | 216,452      |            |           |            | 191,759     |           
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  |                                                                                                                                                                            | Total current liabilities                  |            |              | 5,090,122  |           |            |             | 3,886,740  | 
|Capital lease obligations, net of current portion |                                                                                                                                                                            |                                            | 129,916    |              |            |           | 88,032     |            
|Other long-term liabilities                       |                                                                                                                                                                            |                                            | 325,157    |              |            |           | 307,197    |            
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  |                                                                                                                                                                            | Total liabilities                          |            |              | 5,545,195  |           |            |             | 4,281,969  | 
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|Commitments and contingencies                     |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|Shareholders equity:                             |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  | Preferred stock, $.01 par value, 10,000,000 shares authorized; no shares
issued and outstanding at December 31, 2001 and March 31, 2002                                    |                                            |            |             |            |           |            |            |           
|                                                  | Common stock, $.0025 par value, 100,000,000 shares authorized; issued
and outstanding shares - 24,099,944 shares at December 31, 2001;
24,217,640 shares at March 31, 2002 |                                            |            | 60,250       |            |           |            | 60,544      |           
|                                                  | Additional paid-in capital                                                                                                                                                 |                                            |            | 132,326,759  |            |           |            | 132,326,465 |           
|                                                  | Deferred stock option compensation expense                                                                                                                                 |                                            |            | (10,145      | )          |           |            | (7,610      | )         
|                                                  | Cumulative translation adjustment                                                                                                                                          |                                            |            | (33,577      | )          |           |            | (46,650     | )         
|                                                  | Accumulated deficit                                                                                                                                                        |                                            |            | (62,349,479  | )          |           |            | (67,854,196 | )         
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  |                                                                                                                                                                            | Total shareholders equity                 |            |              | 69,993,808 |           |            |             | 64,478,553 | 
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            
|                                                  |                                                                                                                                                                            | Total liabilities and shareholders equity |            | $            | 75,539,003 |           |            | $           | 68,760,522 | 
|                                                  |                                                                                                                                                                            |                                            |            |              |            |           |            |            

The accompanying notes are an integral part of these statements.

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EDEN BIOSCIENCE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                                                       |                                     |                          |            |                              |            |      |            |           |            |  
|---------------------------------------------------------------------- | ----------------------------------- | ------------------------ | ---------- | ---------------------------- | ---------- | ---- | ---------- | --------- | ---------- | -
|                                                                       |                                     |                          |            | Three Months Ended March 31,
|                                                                       |                                     |                          |            |                             
|                                                                       |                                     |                          |            | 2001                         |            | 2002
|                                                                       |                                     |                          |            |                              |            |     
|Product sales, net of sales allowances                                 |                                     | $                        | 2,481,423  |                              |            | $    | 555,007    |          
|Operating expenses:                                                    |                                     |                          |            |                              |            |      |            |          
|                                                                       | Cost of goods sold                  |                          |            | 974,603                      |            |      |            | 692,323   |           
|                                                                       | Research and development            |                          |            | 2,097,954                    |            |      |            | 2,895,474 |           
|                                                                       | Selling, general and administrative |                          |            | 3,023,078                    |            |      |            | 2,681,899 |           
|                                                                       |                                     |                          |            |                              |            |      |            |          
|                                                                       |                                     | Total operating expenses |            |                              | 6,095,635  |      |            |           | 6,269,696  |  
|                                                                       |                                     |                          |            |                              |            |      |            |          
|                                                                       |                                     | Loss from operations     |            |                              | (3,614,212 | )    |            |           | (5,714,689 | )
|                                                                       |                                     |                          |            |                              |            |      |            |          
|Other income (expense):                                                |                                     |                          |            |                              |            |      |            |          
|                                                                       | Interest income                     |                          |            | 1,165,138                    |            |      |            | 223,135   |           
|                                                                       | Interest expense                    |                          |            | (24,975                      | )          |      |            | (13,163   | )         
|                                                                       | Gain on disposal of assets          |                          |            | 3,528                        |            |      |            |          |           
|                                                                       |                                     |                          |            |                              |            |      |            |          
|                                                                       |                                     | Total other income       |            |                              | 1,143,691  |      |            |           | 209,972    |  
|                                                                       |                                     |                          |            |                              |            |      |            |          
|Loss before income taxes                                               |                                     |                          | (2,470,521 | )                            |            |      | (5,504,717 | )        
|Provision for income taxes                                             |                                     |                          |           |                              |            |      |           |          
|                                                                       |                                     |                          |            |                              |            |      |            |          
|Net loss                                                               |                                     | $                        | (2,470,521 | )                            |            | $    | (5,504,717 | )        
|                                                                       |                                     |                          |            |                              |            |      |            |          
|Basic and diluted net loss per share                                   |                                     | $                        | (0.10      | )                            |            | $    | (0.23      | )        
|                                                                       |                                     |                          |            |                              |            |      |            |          
|Weighted average shares outstanding used
to compute net loss per share |                                     |                          | 23,908,272 |                              |            |      | 24,166,638 |          
|                                                                       |                                     |                          |            |                              |            |      |            |          

The accompanying notes are an integral part of these statements.

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EDEN BIOSCIENCE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |            |            |            |  
|---------------------------------------------------------------------- | ----------------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------- | ---------- | ---------------------------- | ---------- | ---------- | ---------- | ---------- | ---------- | -
|                                                                       |                                                                         |                                                   |                                       |            | Three Months Ended March 31,
|                                                                       |                                                                         |                                                   |                                       |            |                             
|                                                                       |                                                                         |                                                   |                                       |            | 2001                         |            | 2002      
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |           
|Cash flows from operating activities:                                  |                                                                         |                                                   |                                       |            |                              |            |            |           
|                                                                       | Net loss                                                                |                                                   | $                                     | (2,470,521 | )                            |            | $          | (5,504,717 | )         
|                                                                       | Adjustments to reconcile net loss to cash used in operating activities: |                                                   |                                       |            |                              |            |            |            |           
|                                                                       |                                                                         | Depreciation                                      |                                       |            | 380,560                      |            |            |            | 777,027    |           
|                                                                       |                                                                         | Amortization of stock option compensation expense |                                       |            | 4,620                        |            |            |            | 2,535      |           
|                                                                       |                                                                         | Gain on disposal of fixed assets                  |                                       |            | (3,528                       | )          |            |            |           |           
|                                                                       |                                                                         | Deferred rent payable                             |                                       |            | 137,405                      |            |            |            | 34,323     |           
|                                                                       | Changes in assets and liabilities:                                      |                                                   |                                       |            |                              |            |            |            |           
|                                                                       |                                                                         | Accounts receivable                               |                                       |            | (1,428,187                   | )          |            |            | (471,558   | )         
|                                                                       |                                                                         | Inventory                                         |                                       |            | (1,142,188                   | )          |            |            | (239,181   | )         
|                                                                       |                                                                         | Other assets                                      |                                       |            | (1,627,009                   | )          |            |            | 13,508     |           
|                                                                       |                                                                         | Accounts payable                                  |                                       |            | 231,585                      |            |            |            | (154,616   | )         
|                                                                       |                                                                         | Accrued liabilities                               |                                       |            | 47,531                       |            |            |            | (1,023,309 | )         
|                                                                       |                                                                         | Other long-term liabilities                       |                                       |            | 32,500                       |            |            |            | (52,283    | )         
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|                                                                       |                                                                         |                                                   | Net cash used in operating activities |            |                              | (5,837,232 | )          |            |            | (6,618,271 | )
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|Cash flows from investing activities:                                  |                                                                         |                                                   |                                       |            |                              |            |            |           
|                                                                       | Purchases of property and equipment                                     |                                                   |                                       | (5,509,163 | )                            |            |            | (78,650    | )         
|                                                                       | Proceeds from disposal of equipment                                     |                                                   |                                       | 4,820      |                              |            |            |           |           
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|                                                                       |                                                                         |                                                   | Net cash used in investing activities |            |                              | (5,504,343 | )          |            |            | (78,650    | )
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|Cash flows from financing activities:                                  |                                                                         |                                                   |                                       |            |                              |            |            |           
|                                                                       | Reduction in capital lease obligations                                  |                                                   |                                       | (71,380    | )                            |            |            | (66,577    | )         
|                                                                       | Proceeds from exercise of stock options                                 |                                                   |                                       | 19,166     |                              |            |            |           |           
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|                                                                       |                                                                         |                                                   | Net cash used in financing activities |            |                              | (52,214    | )          |            |            | (66,577    | )
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|Effect of foreign currency exchange rates on cash and cash equivalents |                                                                         |                                                   |                                      |            |                              |            | (15,247    | )         
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|Net decrease in cash and cash equivalents                              |                                                                         |                                                   | (11,393,789                           | )          |                              |            | (6,778,745 | )         
|Cash and cash equivalents at beginning of period                       |                                                                         |                                                   | 86,556,865                            |            |                              |            | 48,327,022 |           
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|Cash and cash equivalents at end of period                             |                                                                         | $                                                 | 75,163,076                            |            |                              | $          | 41,548,277 |           
|                                                                       |                                                                         |                                                   |                                       |            |                              |            |            |           
|Supplemental disclosures:                                              |                                                                         |                                                   |                                       |            |                              |            |            |           
|                                                                       | Cash paid for interest                                                  |                                                   | $                                     | 24,975     |                              |            | $          | 13,163     |           

The accompanying notes are an integral part of these statements.

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EDEN BIOSCIENCE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information as of and for the three months ended March 31, 2001 and 2002 is unaudited)



|1. |  | Organization and Summary of Significant Accounting Policies
|-- |  | -----------------------------------------------------------

Organization and Business

EDEN Bioscience Corporation (the Company) was incorporated in the State
of Washington on July 18, 1994. The Company is a plant technology company
focused on developing, manufacturing and marketing innovative, natural
protein-based products for agriculture and began sales of its initial product,
Messenger®, in August 2000.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and pursuant to the instructions to Form
10-Q. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. The balance sheet at December 31, 2001 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. These financial statements and notes should
be read in conjunction with the financial statements and notes for the year
ended December 31, 2001 included in the Companys Annual Report on Form 10-K,
which was filed with the Securities and Exchange Commission on March 29, 2002.

In the opinion of management, the unaudited condensed consolidated
financial statements include all adjustments, consisting only of normal
recurring adjustments, necessary to state fairly the financial information set
forth therein. Results of operations for the three months ended March 31, 2002
are not necessarily indicative of the results expected for the full fiscal year
or for any future period.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.

Property and Equipment

Equipment and leasehold improvements are stated at historical cost.
Improvements and replacements are capitalized. Maintenance and repairs are
expensed when incurred. The provision for depreciation is determined using
straight-line and accelerated methods, which allocate costs over estimated
useful lives of two to 20 years. On January 1, 2001, the Company adopted the
units-of-production method of depreciation for manufacturing equipment placed
into service after that date. Equipment leased under capital leases is
depreciated over the shorter of the equipments estimated useful life or lease
term, which ranges between three to five years.

Revenue

The Company recognizes revenue from product sales, net of sales
allowances, when product is delivered to distributors and all significant
obligations of the Company have been satisfied, unless acceptance provisions or
other contingencies exist. If acceptance provisions or contingencies exist,
revenue is recognized after such provisions or contingencies have been
satisfied. Distributors do not have price protection or product return rights.
The Company provides an allowance for warranty claims based on reasonable
expectations. Shipping and handling costs related to product sales are paid by
the Company and are included in cost of goods sold.

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EDEN BIOSCIENCE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Information as of and for the three months ended March 31, 2001 and 2002 is unaudited)

Sales allowances represent allowances granted to independent distributors
for sales and marketing support, product warehousing and delivery and
information exchange and are based on a percentage of sales. Sales allowances
are accrued when the related product sales revenues are recognized and are paid
to distributors when the distributors sell the product and report the sales
data to the Company, usually on a quarterly basis. Gross product sales and
sales allowances are as follows:

|                    |                                        |   |                              |           |      |   |          |         | 
|------------------- | -------------------------------------- | - | ---------------------------- | --------- | ---- | - | -------- | ------- | 
|                    |                                        |   | Three Months Ended March 31,
|                    |                                        |   |                             
|                    |                                        |   | 2001                         |           | 2002
|                    |                                        |   |                              |           |     
|Gross product sales |                                        | $ | 3,840,952                    |           |      | $ | 726,233  |        
|Sales allowances    |                                        |   | (1,359,529                   | )         |      |   | (171,226 | )      
|                    |                                        |   |                              |           |      |   |          |        
|                    | Product sales, net of sales allowances |   | $                            | 2,481,423 |      |   | $        | 555,007 | 
|                    |                                        |   |                              |           |      |   |          |        

Net Loss Per Share

Basic net loss per share is calculated as the net loss divided by the
weighted average number of common shares outstanding during the period. Diluted
net loss per share is calculated as the net loss divided by the sum of the
weighted average number of common shares outstanding during the period plus the
additional common shares that would have been issued had all dilutive warrants
and options been exercised, less shares that would be repurchased with the
proceeds from such exercises (treasury stock method). The effect of including
outstanding options and warrants is antidilutive for all periods presented.
Therefore, options and warrants have been excluded from the calculation of
diluted net loss per share and consist of the following:

|                                  |  |                 |           |      |  |  |           | 
|--------------------------------- |  | --------------- | --------- | ---- |  |  | --------- | 
|                                  |  | As of March 31,
|                                  |  |                
|                                  |  | 2001            |           | 2002
|                                  |  |                 |           |     
|Options to purchase common stock  |  |                 | 2,342,670 |      |  |  | 2,421,268 | 
|Warrants to purchase common stock |  |                 | 302,644   |      |  |  | 260,805   | 



|2. |  | Inventory
|-- |  | ---------

Inventory, at average cost, consists of the following:

|                |                 |   |              |           |           |   |           |           | 
|--------------- | --------------- | - | ------------ | --------- | --------- | - | --------- | --------- | 
|                |                 |   | December 31, |           | March 31,
|                |                 |   | 2001         |           | 2002     
|                |                 |   |              |           |          
|Raw materials   |                 | $ | 934,824      |           |           | $ | 944,789   |          
|Work in process |                 |   | 82,069       |           |           |   | 221,302   |          
|Finished goods  |                 |   | 1,101,060    |           |           |   | 1,191,522 |          
|                |                 |   |              |           |           |   |           |          
|                | Total inventory |   | $            | 2,117,953 |           |   | $         | 2,357,613 | 
|                |                 |   |              |           |           |   |           |          



|3. |  | Property and Equipment
|-- |  | ----------------------

Property and equipment, at cost, consist of the following:

|                              |                            |   |              |            |           |   |            |            | 
|----------------------------- | -------------------------- | - | ------------ | ---------- | --------- | - | ---------- | ---------- | 
|                              |                            |   | December 31, |            | March 31,
|                              |                            |   | 2001         |            | 2002     
|                              |                            |   |              |            |          
|Equipment                     |                            | $ | 12,986,850   |            |           | $ | 13,139,705 |           
|Equipment under capital lease |                            |   | 714,626      |            |           |   | 641,758    |           
|Leasehold improvements        |                            |   | 12,486,376   |            |           |   | 12,486,376 |           
|                              |                            |   |              |            |           |   |            |           
|                              |                            |   | 26,187,852   |            |           |   | 26,267,839 |           
|Less accumulated depreciation |                            |   | (3,802,190   | )          |           |   | (4,579,754 | )         
|                              |                            |   |              |            |           |   |            |           
|                              | Net property and equipment |   | $            | 22,385,662 |           |   | $          | 21,688,085 | 
|                              |                            |   |              |            |           |   |            |           

For the three months ended March 31, 2001 and 2002, the Company recorded
depreciation expense of $380,560 and $777,027, respectively.

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EDEN BIOSCIENCE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Information as of and for the three months ended March 31, 2001 and 2002 is unaudited)



|4. |  | Accrued Liabilities
|-- |  | -------------------

Accrued liabilities consist of the following:

|                                              |                           |   |              |           |           |   |           |           | 
|--------------------------------------------- | ------------------------- | - | ------------ | --------- | --------- | - | --------- | --------- | 
|                                              |                           |   | December 31, |           | March 31,
|                                              |                           |   | 2001         |           | 2002     
|                                              |                           |   |              |           |          
|Compensation and benefits                     |                           | $ | 1,397,639    |           |           | $ | 1,355,301 |          
|Research and development field trial expenses |                           |   | 1,113,546    |           |           |   | 569,921   |          
|Sales and marketing expenses                  |                           |   | 389,775      |           |           |   | 219,908   |          
|Insurance premiums                            |                           |   | 342,320      |           |           |   | 171,160   |          
|Other                                         |                           |   | 723,833      |           |           |   | 627,774   |          
|                                              |                           |   |              |           |           |   |           |          
|                                              | Total accrued liabilities |   | $            | 3,967,113 |           |   | $         | 2,944,064 | 
|                                              |                           |   |              |           |           |   |           |          



|5. |  | Stock Options and Warrants
|-- |  | --------------------------

The following table summarizes stock option activity since December 31,
2001:

|                             |                   |  |           |          |  
|---------------------------- | ----------------- |  | --------- | -------- | -
|                             |                   |  | Number of
|                             |                   |  | Options  
|                             |                   |  |          
|Balance at December 31, 2001 |                   |  | 2,740,603 |         
|                             | Options granted   |  |           | 20,000   |  
|                             | Options cancelled |  |           | (139,335 | )
|                             | Options exercised |  |           | (200,000 | )
|                             |                   |  |           |         
|Balance at March 31, 2002    |                   |  | 2,421,268 |         
|                             |                   |  |           |         

The Company has elected to apply the disclosure-only provisions of
Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation. Accordingly, the Company accounts for stock-based
compensation using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees,
and related interpretations.

No warrants to purchase shares of our common stock were issued during the
three-month period ended March 31, 2002.




Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations

This discussion and analysis should be read in conjunction with our
unaudited condensed consolidated financial statements and accompanying notes
included in this document and with the 2001 audited financial statements and
notes thereto included in our Annual Report on Form 10-K, which was filed with
the Securities and Exchange Commission on March 29, 2002.

The following discussion of our financial condition and results of
operations contains forward-looking statements that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and
intentions. We use words such as anticipate, believe, expect, future
and intend and similar expressions to identify forward-looking statements.
However, these words are not the exclusive means of identifying such
statements. In addition, any statements that refer to expectations, projections
or other characterizations of future events or circumstances are
forward-looking statements. Our actual results could differ materially from
those anticipated in these forward-looking statements for many reasons,
including the factors described below and under the caption Factors That May
Affect Our Business, Future Operating Results and Financial Condition set
forth at the end of this Item 2. You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this Form 10-Q.
The cautionary statements made in this document should be read as being
applicable to all forward-looking statements wherever they appear in this
document.

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Overview

We are a plant technology company focused on developing, manufacturing and
marketing innovative, natural protein-based products for agriculture. We have a
fundamentally new, patented and proprietary technology that we believe will
improve crop production and plant protection worldwide. We believe our
technology and initial product, Messenger, offer innovative solutions versus
traditional plant protection and crop enhancement alternatives and,
importantly, avoid the substantial and growing public resistance to chemical
pesticides and gene-based biotechnology. Commercial sales of Messenger began in
August 2000.

We have incurred significant operating losses since inception. As of March
31, 2002, we had an accumulated deficit of $67.9 million. We incurred net
losses of $2.5 million and $5.5 million for the quarters ended
March 31, 2001 and 2002, respectively. Total operating expenses increased
$200,000 (3%) from $6.1 million in the first quarter of 2001 to $6.3 million in
the quarter ended March 31, 2002. We expect to incur additional net losses as
we proceed with the commercialization of Messenger and the development of new
products and technologies.

Results of Operations

Three Months Ended March 31, 2001 and 2002

Revenue

We recognize revenue from product sales when (a) the product is delivered
to independent distributors, (b) we have satisfied all of our significant
obligations and (c) any acceptance provisions or other contingencies have been
satisfied. We do not offer price or inventory protection or product return
rights to our distributors. We generated our first product sales revenue in
August 2000. All product sales revenue to date has resulted from sales of
Messenger, our only product, to distributors in the United States. Product
sales revenue is reported net of applicable sales allowances, as follows:

|                    |                                        |   |                              |           |      |   |          |         | 
|------------------- | -------------------------------------- | - | ---------------------------- | --------- | ---- | - | -------- | ------- | 
|                    |                                        |   | Three Months Ended March 31,
|                    |                                        |   |                             
|                    |                                        |   | 2001                         |           | 2002
|                    |                                        |   |                              |           |     
|Gross product sales |                                        | $ | 3,840,952                    |           |      | $ | 726,233  |        
|Sales allowances    |                                        |   | (1,359,529                   | )         |      |   | (171,226 | )      
|                    |                                        |   |                              |           |      |   |          |        
|                    | Product sales, net of sales allowances |   | $                            | 2,481,423 |      |   | $        | 555,007 | 
|                    |                                        |   |                              |           |      |   |          |        

Gross product sales revenue for the first quarter of 2002 was $726,000, a
decrease of $3.1 million (82%) from $3.8 million in the comparable quarter of
2001. Sales were made to seven distributors in the first quarter of 2002 and to
six distributors in the initial quarter of 2001. Gross sales to the following
distributors exceeded 10% of our total sales in the first quarters of 2001 and
2002:

|                         |  |                              |           |      |  |   |         | 
|------------------------ |  | ---------------------------- | --------- | ---- |  | - | ------- | 
|                         |  | Three Months Ended March 31,
|                         |  |                             
|                         |  | 2001                         |           | 2002
|                         |  |                              |           |     
|AgRx, Inc.               |  | $                            |          |      |  | $ | 186,469 | 
|Montgomery Farmers Co-op |  |                              |          |      |  |   | 72,675  | 
|United Agri Products     |  |                              | 2,749,433 |      |  |   | 161,718 | 
|Western Farm Service     |  |                              | 602,831   |      |  |   | 121,388 | 

Some of our major distributors, particularly in our Southern business
unit, currently hold significant inventories of Messenger. In 2000, we shipped
453,000 ounces of Messenger to our distributors. We estimate that 66,000 ounces
were sold by our distributors to growers in 2000 and 387,000 ounces remained in
distributors inventories at December 31, 2000. In 2001, we
shipped 1,225,000
ounces of Messenger to our distributors. We estimate that 596,000 ounces were
sold by our distributors to growers in 2001 and 1,016,000 ounces remained in
distributors inventories at December 31, 2001. In the first quarter of 2002,
we shipped 167,000 ounces of Messenger to our distributors. We estimate that
144,000 ounces were sold by our distributors to growers in the first quarter of
2002 and 1,039,000 ounces remained in distributors inventories at March 31,
2002. We do not expect distributors that have significant inventories of
Messenger to place additional orders for Messenger until their current
inventories are reduced. We are working with our distributors and growers to
reduce distributors inventories of Messenger.

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Sales Allowances

Sales allowances represent allowances granted to independent distributors
for sales and marketing support, product warehousing and delivery and
information exchange and are based on a percentage of sales. Sales allowances
are accrued when the related product sales revenue is recognized and are paid
to distributors when the distributors sell the product and report the sales
data to us, usually on a quarterly basis. Sales allowances were $171,000 (24%
of gross product sales) for the first quarter of 2002, a reduction of $1.2
million (86%) from $1.4 million (35% of gross product sales) in the comparable quarter of
2001. Sales allowances as a percentage of gross product sales have declined as
we have increased the number of distributors. We expect 2002 sales allowances
to average approximately 25-30% of gross product sales.

Cost of Goods Sold

Cost of goods sold includes the cost of raw materials, labor and overhead
required to manufacture, package and ship Messenger for sale and for
promotional purposes. Cost of goods sold was $692,000 (125% of net revenues) in
the first quarter of 2002 compared to $975,000 (39% of net revenues) in the
first quarter of 2001. Cost of goods sold in the first quarter of 2002 includes
approximately $377,000 of manufacturing overhead costs incurred while our
manufacturing plant was not in production and approximately $144,000 of costs
associated with Messenger used for promotional purposes. We expect to incur
idle capacity charges in the future and will continue to take steps to reduce
staffing and other costs in this area to lower these charges during periods of
non-production.

Research and Development Expenses

Research and development expenses consist primarily of personnel, field
trial, laboratory, patent and facility expenses. Research and development
expenses increased $798,000 (38%) from $2.1 million in the first quarter of
2001 to $2.9 million in the same quarter of 2002. This increase resulted
primarily from higher personnel, regulatory and development costs in Europe and
Mexico and increased facilities and related costs in the United States, offset
by reductions in personnel costs and research supplies in the United States.
Research and development costs will continue to be significant in 2002 as we
continue to pursue regulatory approvals, conduct field research on Messenger
and develop new products.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of personnel and
related expenses for sales and marketing, executive and administrative
personnel; advertising, marketing and professional fees; and other corporate
expenses. Selling, general and administrative expenses decreased $341,000 (11%)
from $3.0 million in the first quarter of 2001 to $2.7 million in the same
period of 2002. This decrease resulted primarily from reductions in personnel
costs, travel costs and supplies, offset by increases in insurance, recruiting
and facilities costs. Selling, general and administrative expenses,
particularly sales, marketing and promotional expenses, will continue to be
significant in 2002 and an important part of our Messenger commercialization
strategy.

Interest Income

Interest income consists of earnings on our cash and cash equivalents.
Interest income decreased $1.0 million (83%) from $1.2 million in the first
quarter of 2001 to $223,000 in the same quarter of 2002. This decrease was due
in part to significantly lower average cash balances available for investment
in the current year and to significant interest rate
reductions that occurred last year.

Interest Expense

Interest expense consists of interest we pay on capital leases used to
finance certain equipment purchases. Interest expense decreased $12,000 (48%)
from $25,000 in the first quarter of 2001 to $13,000 in the same quarter of
2002. This decrease was due to reduced leasing activity and lower average
principal balances as we paid down our existing capital lease obligations.

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Income Taxes

We have generated a net loss from operations for each period since we
began doing business. As of December 31, 2001, we had accumulated approximately $62 million of net
operating loss carryforwards for federal income tax purposes. These
carryforwards expire between 2009 and 2021. The annual use of these net
operating loss carryforwards may be limited in the event of a cumulative change
in ownership of more than 50%.

Liquidity and Capital Resources

At March 31, 2002, our cash and cash equivalents totaled $41.5 million.
Prior to October 2000, we financed our operations primarily through the private
sale of our equity securities, resulting in net proceeds of $36.5 million
through September 30, 2000. In October 2000, we received approximately $91.5
million in net proceeds from the initial public offering of 6,670,000 shares of
our common stock. To a lesser extent, we have financed our equipment purchases
through lease financings.

Net cash used in operations increased $781,000 (13%) from $5.8 million in
the first quarter of 2001 to $6.6 million in same quarter of 2002. Net cash
used in operations in the first quarter of 2001 resulted primarily from a net
loss of $2.1 million, after adding back depreciation expense of
$381,000, and fluctuations in various asset and
liability balances totaling
$3.7 million. Net cash used in operations in the first quarter of 2002
resulted primarily from a net loss of $4.7 million, after adding
back depreciation expense of $777,000, and
fluctuations in various asset and liability balances totaling $1.9 million.

Net cash used in investing activities decreased $5.4 million (98%) from
$5.5 million in the first quarter of 2001 to $79,000 in the first quarter of
2002. Investing activities in the first quarter of 2001 consisted primarily of
property and equipment purchases in connection with expansion of our
manufacturing and research and development facilities, which were completed by
December 31, 2001.

Net cash used in financing activities increased $15,000 (29%) from $52,000
in the first quarter of 2001 to $67,000 in the same quarter of 2002. The
primary use of funds in both quarters was to pay down principal on our
outstanding capital leases, offset by $19,000 of proceeds from the exercise of
stock options in the first quarter of 2001.

We conduct our operations in three primary functional currencies: the U.S.
dollar, the European Union euro and the Mexican peso. Historically, neither
fluctuations in foreign exchange rates nor changes in foreign economic
conditions have had a significant impact on our financial condition or results
of operations. We currently do not hedge our foreign currency exposures and are
therefore subject to the risk of exchange rate fluctuations. We may invoice our
international customers in U.S. dollars, euros and Mexican pesos, as the case
may be. We are exposed to foreign exchange rate fluctuations as the financial
results of foreign subsidiaries are translated into U.S. dollars in
consolidation. Foreign exchange rate fluctuations did not have a material
impact on our financial results in the quarters ended March 31, 2001 and 2002.

The following are our contractual obligations as of March 31, 2002
associated with our capital and operating lease obligations:

|                          |                                    |   |                        |        |        |   |           |       |       |   |       |       |         |   |       |       |  |   |       |       | 
|------------------------- | ---------------------------------- | - | ---------------------- | ------ | ------ | - | --------- | ----- | ----- | - | ----- | ----- | ------- | - | ----- | ----- |  | - | ----- | ----- | 
|                          |                                    |   | Payments Due by Period
|                          |                                    |   |                       
|                          |                                    |   | (in thousands)        
|                          |                                    |   |                        |        |        |   | Less Than |       | 1-3   |   | 4-5   |       | After 5
|                          |                                    |   | Total                  |        | 1 Year |   | Years     |       | Years |   | Years
|                          |                                    |   |                        |        |        |   |           |       |       |   |      
|Capital lease obligations |                                    | $ | 317                    |        |        | $ | 222       |       |       | $ | 87    |       |         | $ | 8     |       |  | $ |      |      
|Operating leases          |                                    |   | 14,963                 |        |        |   | 1,885     |       |       |   | 3,731 |       |         |   | 3,567 |       |  |   | 5,780 |      
|                          |                                    |   |                        |        |        |   |           |       |       |   |       |       |         |   |       |       |  |   |       |      
|                          | Total contractual cash obligations |   | $                      | 15,280 |        |   | $         | 2,107 |       |   | $     | 3,818 |         |   | $     | 3,575 |  |   | $     | 5,780 | 
|                          |                                    |   |                        |        |        |   |           |       |       |   |       |       |         |   |       |       |  |   |       |      

Our operating expenditures have increased significantly since our
inception. We currently anticipate that our operating expenses will
significantly exceed net product sales and that net losses and working capital
requirements will consume a material amount of our cash resources. We believe
that the balance of our cash and cash equivalents at March 31, 2002 will be
sufficient to meet our anticipated cash needs for net losses, working capital
and capital expenditures for at least the next 18 months.

In the future, we may require additional funds to support our working
capital requirements or for other purposes and may seek to raise such
additional funds through public or private equity financing or through other
sources, such

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as credit facilities. We may be unable to obtain adequate or favorable
financing at that time or at all. The sale of additional equity securities
could result in dilution to our shareholders.

Significant Accounting Policies, Estimates and Judgments

Our significant accounting policies are more fully described in Note 1 to
our consolidated financial statements included in our Annual Report on Form
10-K, which was filed with the Securities and Exchange Commission on March 29,
2002. Certain of our accounting policies require the application of significant
judgment by management in selecting the appropriate assumptions for calculating
financial estimates. By their nature, these judgments are subject to an
inherent degree of uncertainty. These judgments are based on historical
experience, terms of existing contracts, commonly accepted industry practices,
information provided by our customers and other assumptions that we believe are
reasonable under the circumstances. Our estimates and assumptions are reviewed
periodically and the effects of revisions are reflected in the consolidated
financial statements in the period they are determined to be necessary. Actual
results may differ from these estimates under different assumptions or
conditions. Our significant accounting policies and estimates include:

Revenue Recognition

We sell our product through independent, third-party distributors. Our
contracts with those distributors provide no price protection or product-return
rights. We recognize revenue from product sales, net of sales allowances, when
product is delivered to our distributors and all of our significant obligations
have been satisfied, unless acceptance provisions or other contingencies exist.
If acceptance provisions or contingencies exist, revenue is recognized after
such provisions or contingencies have been satisfied. Sales allowances
represent allowances granted to independent distributors for sales and
marketing support, product warehousing and delivery and information exchange
and are based on a percentage of sales. Sales allowances are accrued when the
related product sales revenues are recognized and are paid to distributors when
the distributors sell the product and report the sales data to us, usually on a
quarterly basis. We also record an allowance for warranty claims based on a
percentage of sales, at the time revenues are recognized. The warranty reserve
percentage, which has ranged between one to five percent, is reviewed
periodically and adjusted as necessary, based on our experience and future
estimations.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable balances are reported net of related liabilities for
sales allowances payable. In determining the adequacy of the allowance for
doubtful accounts, we consider a number of factors including the aging of the
accounts receivable portfolio, customer payment trends, the financial condition
of our customers, historical bad debts and current economic trends. Based upon
our analysis of outstanding net accounts receivable at March 31, 2002, no
allowance for doubtful accounts was recorded.

Inventory

Our inventory is valued at the lower of cost or market on an average cost
basis. We regularly review inventory balances to determine whether a write-down
is necessary. We consider various factors in making this determination,
including recent sales history and predicted trends, industry market conditions
and general economic conditions. No inventory write-downs were recorded during
the three months ended March 31, 2002.

Valuation of Property and Equipment

We periodically review the carrying values of our property and equipment
to determine whether such assets have been impaired. An impairment loss must be
recorded pursuant to SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets, when the undiscounted net cash flows to be realized from
the use of such assets are less than their carrying value. The determination of
undiscounted net cash flows requires us to make many estimates, projections and
assumptions, including the lives of the assets, future sales and expense
levels, additional capital investments or expenditures necessary to maintain
the assets, industry market trends and general and industry economic
conditions. Based upon our most recent analysis of net cash flows to be
realized from our investments in property and equipment, no impairment loss was
recorded. Changes in the factors listed above or other factors could result in
significantly different cash flow estimates and an impairment charge.

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Recent Accounting Pronouncements

SFAS No. 143  In June 2001, the FASB issued SFAS No. 143, Accounting for
Asset Retirement Obligations, which provides the accounting requirements for
retirement obligations associated with tangible long-lived assets. This
statement requires entities to record the fair value of a liability for an
asset retirement obligation in the period in which it is incurred. This
statement is effective for our 2003 fiscal year, and early adoption is
permitted. The adoption of SFAS No. 143 is not expected to have a material
impact on our consolidated results of operations, financial position or cash
flows.

SFAS No. 144  In August 2001, the FASB issued SFAS No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, which excludes from the
definition of long-lived assets goodwill and other intangibles that are not
amortized in accordance with SFAS No. 142. SFAS No. 144 requires that
long-lived assets to be disposed of through sales be measured at the lower of
carrying amount or fair value less cost to sell, whether reported in continuing
operations or in discontinued operations. SFAS No. 144 also expands the
reporting of discontinued operations to include components of an entity that
have been or will be disposed of rather than limiting such discontinuance to a
segment of a business. This statement is effective for our 2002 fiscal year and
was adopted without any impact on our consolidated results of operations,
financial position or cash flows.




Factors That May Affect Our Business, Future Operating Results and Financial
Condition

You should carefully consider the risks described below, together with all
of the other information included in this quarterly report on Form 10-Q. The
risks and uncertainties described below are not the only ones facing our
company. If any of the following risks actually occurs, our business, financial
condition or operating results could be harmed.

We currently depend on a single product and our development and
commercialization of that product may not be successful.

For the immediately foreseeable future we will be dependent on the
successful development and commercialization of one product, Messenger, which
is based on a new technology. While Messenger has been subject to numerous
field tests on a wide variety of crops with favorable results, we have only
recently begun sales of Messenger, and Messenger could prove to be commercially
unsuccessful. Messenger may not prove effective or economically viable for all
crops or markets. In addition, because Messenger has not been put to widespread
commercial use over significant periods of time, no assurance can be given that
adverse consequences might not result from the use of Messenger, such as soil
or other environmental degradation, the development of negative effects on
animals or plants or reduced benefits in terms of crop yield or protection.

The markets for Messenger and other harpin-based products we may develop
are unproven. Messenger may not gain commercial acceptance or success. If we
are unable to successfully achieve broad market acceptance of Messenger, we may
not be able to generate enough product revenues in the future to achieve
profitability. A variety of factors will determine the success of our market
development and commercialization efforts and the rate and extent of market
acceptance of Messenger, including our ability to implement and maintain an
appropriate pricing policy for Messenger, general economic conditions in
agricultural markets, including commodity prices, climatic conditions and the
extent that growers, regulatory authorities and the public accept new
agricultural practices and products developed through biotechnology.

Inability to develop adequate sales and marketing capabilities could prevent us
from successfully commercializing Messenger and other products we may develop.

We currently have limited sales and marketing experience and capabilities.
Our internal sales and marketing staff consists primarily of sales and
marketing specialists and field development specialists who are trained to
educate growers and independent distributors on the uses and benefits of
Messenger. We will need to further develop our sales, marketing and field
development capabilities in order to enhance our commercialization efforts,
which will involve substantial costs. These specialists require a high level of
technical expertise and knowledge regarding Messengers capabilities and other
plant protection and yield enhancement products and techniques. We cannot
assure you that our specialists and other members of our sales and marketing
team will successfully compete against the sales and marketing operations of
our current and future competitors that may have more established relationships
with distributors, retailers and growers. Failure to recruit, train and retain
important sales and marketing personnel, such as our sales and marketing
specialists and field development specialists, or the inability of

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new sales and marketing personnel to effectively market and sell Messenger
and other products we may develop, could impair our ability to gain market
acceptance of our products and cause our sales to suffer.

We have a history of losses since inception, we expect to continue to incur
losses and we may not achieve or sustain profitability.

We have incurred operating losses in each quarter since inception and we
expect to continue to incur further operating losses for the foreseeable
future. From our inception in July 1994 to March 31, 2002, we have accumulated
a deficit of approximately $67.9 million. For the years ended December 31, 2000
and 2001, we had net losses of $15.7 million and $23.7 million, respectively.
To date, our revenues have been limited. We expect our future revenues to come
primarily from the sale of Messenger, and these sales are highly uncertain. For
example, there were no sales of Messenger in the fourth quarter of 2001.
Moreover, some of our major distributors, particularly in our Southern business
unit, currently hold significant inventories of Messenger. In 2000,
we shipped
453,000 ounces of Messenger to our distributors. We estimate that 66,000 ounces
were sold by our distributors to growers in 2000 and 387,000 ounces remained in
distributors inventories at December 31, 2000. In 2001, we
shipped 1,225,000
ounces of Messenger to our distributors. We estimate that 596,000 ounces were
sold by our distributors to growers in 2001 and 1,016,000 ounces remained in
distributors inventories at December 31, 2001. In the first quarter of 2002,
we shipped 167,000 ounces of Messenger to our distributors. We estimate that
144,000 ounces were sold by our distributors to growers in the first quarter of
2002 and 1,039,000 ounces remained in distributors inventories at March 31,
2002. We do not expect distributors that hold significant inventories of
Messenger to place additional orders for Messenger until their current
inventories are reduced, which will adversely affect our sales and results of
operations. We expect to continue to devote substantial resources to
maintaining and operating our manufacturing facility and to funding our
research and development and sales and marketing activities in the United
States and foreign countries. As a result, we will need to generate significant
revenues to achieve and maintain profitability. We may never generate profits,
and if we do become profitable, we may be unable to sustain or increase
profitability on a quarterly or annual basis.

Our product development efforts, which are based on an innovative technology
that is commercially unproven, may not be successful.

Our harpin and harpin-related technology is new, in an early stage of
development and commercially unproven. It may take years and significant
capital investment to develop viable enhancements of Messenger or any new
products we may develop based on our harpin and harpin-related technology.
Risks inherent in the development of products based on innovative technologies
include the possibility that:



| |  |  | new products or product enhancements will be difficult to produce on
a large scale or will be uneconomical to market;
| | - |  | ---------------------------------------------------------------------------------------------------------------------
|
| |  |  | proprietary rights of third parties will prevent us from marketing products; and                                     
|
| |  |  | third parties will market superior or equivalent products or will market their products first.                       

Inability to produce a high quality product could impair our business.

To be successful, we will have to manufacture Messenger in large
quantities at acceptable costs while also preserving high product quality. If
we cannot maintain high product quality on a large scale, we may be unable to
achieve market acceptance of our product and our sales would likely suffer.
Moreover, we do not have back-up manufacturing systems and, as a result, any
failure of any component required in the manufacturing process could delay or
impair our ability to manufacture Messenger in the quantities that we may
require.

We intend to continue to make changes to our manufacturing processes and
facilities in order to improve the efficiency and quality of our manufacturing
activities. We cannot guarantee that we will be successful in this regard or
that the changes we make will improve our manufacturing activities. We may
encounter difficulties in the production of our current product or any future
products we may develop, including problems involving manufacturing processes
or yields, packaging, distribution, storage, quality control and assurance,
shortages of qualified personnel or compliance with regulatory requirements.
Even if we are successful in developing our manufacturing capability and
processes, there can be no assurance that we will satisfy the requirements of
our distributors or customers.

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Actual storage conditions of Messenger may cause it to degrade more rapidly
than we anticipate, which could adversely affect market acceptance of Messenger
or our results of operations.

Messenger is currently being stored in large quantities under various
conditions by us and by our distributors in the United States. We have
conducted laboratory studies that indicate Messenger is stable for at least two
years under our recommended storage conditions. No assurance can be given,
however, that actual storage conditions will not cause Messengers quality to
degrade over a shorter time period. If this were to occur, we may have to
record inventory write-downs or, if required or we decide to do so, replace
product held by distributors or growers, which could adversely impact the
market acceptance of Messenger or our results of operations.

If our ongoing or future field trials are unsuccessful, we may be unable to
achieve market acceptance or obtain regulatory approval of our current product
or any other products we may develop.

The successful completion of multiple field trials in domestic and foreign
locations on a wide variety of crops is critical to the success of our product
development and marketing efforts. If our ongoing or future field trials are
unsuccessful or produce inconsistent results or adverse side effects, or if we
are unable to collect reliable data, regulatory approval of our current product
or any other products we may develop could be delayed or withheld or we may be
unable to achieve market acceptance of these products. Although we have
conducted successful field trials on a broad range of crops, we cannot be
certain that additional field trials conducted on a greater number of acres, or
on crops for which we have not yet conducted field trials, will be successful.
Moreover, the results of our ongoing and future field trials are subject to a
number of conditions beyond our control, including weather-related events such
as droughts and floods, severe heat and frost, hail, tornadoes and hurricanes.
Generally, we pay third parties, such as growers, consultants and universities,
to conduct our field tests for us. Incompatible crop treatment practices or
misapplication of the product by third parties could interfere with the success
of our field trials.

Rapid changes in technology could render our current product or any other
products we may develop unmarketable or obsolete.

We are engaged in an industry characterized by extensive research efforts
and rapid technological development. Our competitors, many of which have
substantially greater technological and financial resources than we do, may
develop plant protection and yield enhancement technologies and products that
are more effective than ours or that render our technology and products
obsolete or uncompetitive. To be successful, we will need to continually
enhance Messenger and any other products we may develop and to design, develop
and market new products that keep pace with new technological and industry
developments.

We may be unable to establish or maintain successful relationships with
independent distributors and retailers, which could adversely affect our sales.

We intend to rely on independent distributors and retailers of
agri-chemicals to distribute and assist with the marketing and sale of
Messenger and any other products we may develop. We have engaged several
independent distributors and retailers for the distribution and sale of
Messenger. Our future revenue growth will depend in large part on our success
in establishing and maintaining these sales and distribution channels. We are
in the early stages of developing our distribution network and we may be unable
to establish or maintain these relationships in a timely or cost-effective
manner. Moreover, we cannot assure you that the distributors and retailers on
which we rely will focus adequate resources on selling these products or will
be successful in selling them. Many of our potential distributors and retailers
are in the business of distributing and sometimes manufacturing other, possibly
competing, plant protection and yield enhancement products and may perceive
Messenger as a threat to various product lines currently being manufactured or
distributed by them. In addition, the distributors may earn higher margins by
selling competing products or combinations of competing products. If we are
unable to establish or maintain successful relationships with independent
distributors and retailers, we will need to further develop our own
distribution capabilities, which would be expensive and time-consuming and the
success of which would be uncertain.

Four of our
distributors accounted for an aggregate of approximately 75%
of our net revenues for the quarter ended March 31, 2002 and 85% of our trade
accounts receivable balance as of March 31, 2002. One of these distributors,
AgRx, Inc., accounted for approximately 26% of our net revenues and 28% of our
trade accounts receivable balance. Montgomery Farmers Co-op accounted
for approximately 10% of our net revenues and 11% of our trade
accounts receivable balance. United Agri Products, a subsidiary of
ConAgra Foods, Inc., accounted for approximately 22% of our net revenue and 46%
of our trade accounts receivable balance, and Western Farm Service accounted
for approximately 17% of our net revenues. There were no accounts receivable
from Western Farm Service at
March 31, 2002. We anticipate that we will continue to extend credit to
these distributors. If any of these

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distributors, or any other distributor which purchases a significant
amount of our products, were to discontinue purchasing our products at any
time, our sales would be adversely affected. In addition, the failure of any of
these distributors, or of any other distributor to which we extend a
significant amount of credit, to pay its account, now or in the future, may
harm our operating results.

Inability to obtain regulatory approvals, or to comply with ongoing and
changing regulatory requirements, could delay or prevent sales of Messenger or
any other products we may develop.

The field testing, manufacture, sale and use of plant protection and yield
enhancement products, including Messenger and any other products we may
develop, are extensively regulated by the EPA and state, local and foreign
governmental authorities. These regulations substantially increase the cost and
time associated with bringing Messenger and any other products we may develop
to market. If we do not receive the necessary governmental approvals to test,
manufacture and market these products, or if the regulatory authorities revoke
our approvals or grant them subject to restrictions on their use, we may be
unable to sell these products and our business may fail.

In April 2000, we received conditional approval from the EPA to market and
sell our first product, Messenger, in the United States. In April 2002, the EPA
determined that all conditions for registration had been satisfied and
converted the Messenger registration to unconditional. We are also required to
obtain regulatory approval from certain state and foreign regulatory
authorities before we market Messenger in those jurisdictions. Certain of these
jurisdictions may apply different criteria than the EPA in connection with
their approval processes. Although we are authorized to sell Messenger in 48
states on virtually all crops for crop production and disease management and in
California on strawberries, grapes and fruiting vegetables, such as tomatoes
and peppers, for disease management, we have not received approval for
Messenger in Colorado or for use on other crops in California. We have also
received authorization to sell Messenger in 12 foreign countries, including
China, Germany and Ecuador. Our registration in China is temporary and limited
to the sale of Messenger for use on several crops, including tomatoes, peppers,
rice, cotton and citrus.

If we significantly modify Messengers design as a result of our ongoing
research and development projects, additional EPA approvals may be required.
Moreover, we cannot assure you that we will be able to obtain approval for
marketing additional harpin-based products or product extensions that we may
develop. For example, while the EPA has in place a registration procedure for
products such as Messenger that is streamlined in comparison to the
registration procedure for chemical pesticides, there can be no assurance that
all of our products or product extensions will be eligible for the streamlined
procedure or that the EPA will not impose additional requirements that could
make the procedure more time-consuming and costly for any future products we
may develop.

Even if we obtain all necessary regulatory approvals to market and sell
Messenger and any other products we may develop, Messenger and these other
products will be subject to continuing review and extensive regulatory
requirements. The EPA, as well as state and foreign governmental authorities,
could withdraw a previously approved product from the market upon discovery of
new information, including an inability to comply with regulatory requirements,
the occurrence of unanticipated problems with the product or for other reasons.
In addition, federal, state and foreign regulations relating to crop protection
products developed through biotechnology are subject to public concerns and
political circumstances and, as a result, regulations have changed and may
change substantially in the future. These changes may result in limitations on
the manufacturing, marketing or use of Messenger or any other products we may
develop and commercialize.

Inability to satisfy the conditions of our California registration for
strawberries could limit or prevent sales of Messenger in that State.

Our registration to sell Messenger in California for use on strawberries
for disease management is conditioned on the requirement that we submit data
from several additional studies within various required timeframes ending on
March 31, 2003. There are no conditions on our registration to sell Messenger
in California for use on fruiting vegetables and grapes. As required by the
California registration for use on strawberries, in April 2001 we submitted to
the California Department of Pesticide Regulation the data required by the EPA
as a condition of federal registration. We submitted the results of six
additional strawberry field trials and other information in December 2001 and
March 2002, respectively. We will submit the results of additional studies to
the CDPR at various times in 2002 and 2003, in accordance with the conditions
of our registration. If we are unable to conduct the studies required by the
CDPR in a timely manner, or if the results of the studies are unacceptable to
the CDPR, they may not allow the continued use of Messenger on strawberries in
California or they may impose limitations on this use of Messenger, which could
have a negative impact on our sales. Because EPA and state approvals are
required for

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commercial sales of Messenger, the loss of any of these approvals for any
reason would prevent further sales of Messenger in the affected state or
nationwide.

Inability to comply with regulations applicable to our facilities and
procedures could delay, limit or prevent our research and development or
manufacturing activities.

Our research and development and manufacturing facilities and procedures
are subject to continual review and periodic inspection. To comply with the
regulations applicable to these facilities and procedures, we must spend funds,
time and effort in the areas of production, safety and quality control and
assurance to help ensure full technical compliance. If the EPA or another
regulator determines that we are not in compliance, regulatory approval of
Messenger or any other products we may develop could be revoked, delayed or
withheld or we may be required to limit or cease our research and development
or manufacturing activities or pay a monetary fine. If we were required to
limit or cease our research and development activities, our ability to develop
new products would be impaired. In addition, if we were required to limit or
cease our manufacturing activities, our ability to produce Messenger in
commercial quantities would be impaired or prohibited, which could have an
adverse effect on our sales.

If third-party manufacturers fail to adequately perform, we could be unable to
meet demand and our revenues could be impaired.

We currently depend on independent manufacturers to perform certain
portions of our production process. We intend to engage additional third-party
manufacturers as necessary to perform this process. Any failure or delay in the
ability of our current or any future manufacturers to provide us with material
they produce could adversely affect our ability to produce Messenger in the
quantities necessary to satisfy the requirements of our distributors or
customers, or could increase our costs associated with obtaining such
materials. In addition, the time and resources that our current or future
third-party manufacturers devote to our business are not within our control. We
cannot ensure that our current or future third-party manufacturers will perform
their obligations to meet our quality standards, that we will derive cost
savings or other benefits from our relationships with them or that we will be
able to maintain a satisfactory relationship with them on terms acceptable to
us. Moreover, these manufacturers may support products that compete directly or
indirectly with ours, or offer similar or greater support to our competitors.
If any of these events were to occur, our business and operations could be
adversely affected.

International expansion will subject us to risks associated with international
operations, which could adversely affect both our domestic and our
international operations.

Our success depends in part on our ability to expand internationally as we
obtain regulatory approvals to market and sell Messenger and any other products
we may develop in other countries. We have been conducting field trials in
several international locations, and we hired personnel in Europe, Mexico and
Africa to develop operations in those regions. International expansion of our
operations could impose substantial burdens on our resources, divert
managements attention from domestic operations or otherwise adversely affect
our business. Furthermore, international operations are subject to several
inherent risks, especially different regulatory requirements and reduced
protection of intellectual property rights, that could adversely affect our
ability to compete in international markets and could have a negative effect on
our operating results.

Inability to address strain on our resources caused by growth could result in
ineffective management of our business.

As we add manufacturing, marketing, sales, field development and other
personnel, both domestically and internationally, during the commercialization
of Messenger, and expand our manufacturing and research and development
capabilities, we expect that our operating expenses and capital requirements
will increase. Our ability to manage growth effectively requires us to continue
to expend funds to improve our operational, financial and management controls,
reporting systems and procedures. In addition, we must effectively expand,
train and manage our employee base. We will be unable to effectively manage our
business if we are unable to timely and successfully alleviate the strain on
our resources caused by growth in our business, which could adversely affect
our operating results.

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The high level of competition in our market may result in price reductions,
reduced margins or the inability of our products to achieve market acceptance.

The market for plant protection and yield enhancement products is
intensely competitive, rapidly changing and undergoing consolidation. We may be
unable to compete successfully against our current or future competitors, which
may result in price reductions, reduced margins or the inability to achieve
market acceptance of Messenger or any other products we may develop.

Many companies are engaged in developing plant protection and yield
enhancement products. Our competitors include major international agri-chemical
companies, specialized biotechnology companies and research and academic
institutions. Many of these organizations have significantly more capital,
research and development, regulatory, manufacturing, distribution, sales,
marketing, human and other resources than we do. As a result, they may be able
to devote greater resources to the development, manufacture, promotion or sale
of their products, receive greater resources and support from independent
distributors, initiate or withstand substantial price competition or take
advantage of acquisition or other opportunities more readily. Furthermore, many
of the large agri-chemical companies have a more diversified product offering
than we do, which may give these companies an advantage in meeting customer
needs by enabling them to offer integrated solutions to plant protection and
yield enhancement.

Inability to protect our patents and proprietary rights in the United States
and foreign countries could limit our ability to compete effectively since our
competitors may take advantage of our patents or proprietary rights.

Our success depends on our ability to obtain and maintain patent and other
proprietary-right protection for our technology and products in the United
States and other countries. If we are unable to obtain or maintain these
protections, we may not be able to prevent third parties from using our
proprietary rights. We also rely on trade secrets, proprietary know-how and
continuing technological innovation to remain competitive. We have taken
measures to protect our trade secrets and know-how, including the use of
confidentiality agreements with our employees, consultants and advisors. It is
possible that these agreements may be breached and that any remedies for breach
will not make us whole. We generally control and limit access to, and the
distribution of, our product documentation and other proprietary information.
Despite our efforts to protect these proprietary rights, unauthorized parties
may copy aspects of our products or obtain and use information that we regard
as proprietary. We also cannot guarantee that other parties will not
independently develop our know-how or otherwise obtain access to our
technology.

The laws of some foreign countries do not protect proprietary rights to
the same extent as the laws of the United States, and many companies have
encountered significant problems and incurred significant costs in protecting
their proprietary rights in these foreign countries.

Patent law is still evolving with respect to the scope and enforceability
of claims in the fields in which we operate. We are like many biotechnology
companies in that our patent protection is highly uncertain and involves
complex legal and technical questions for which legal principles are not firmly
established. Our patents and those patents for which we have license rights may
be challenged, narrowed, invalidated or circumvented. In addition, our issued
patents may not contain claims sufficiently broad to protect us against third
parties with similar technologies or products, or provide us with any
competitive advantage. We are not certain that our pending patent applications
will be issued. Moreover, our competitors could challenge or circumvent our
patents or pending patent applications.

The U.S. Patent and Trademark Office and the courts have not established a
consistent policy regarding the breadth of claims allowed in biotechnology
patents. The allowance of broader claims may increase the incidence and cost of
patent interference proceedings and the risk of infringement litigation. On the
other hand, the allowance of narrower claims may limit the value of our
proprietary rights.

We are at an early stage of development and are subject to the risks of a new
enterprise and the commercialization of a new technology.

We began our operations in 1994 and began the marketing and sale of our
first product, Messenger, in the third quarter of 2000. Our early stage of
development, the newness of our technology and the uncertain nature of the
market in which we compete make it difficult to assess our prospects or predict
our future operating results. We are subject to risks and uncertainties
frequently encountered in the establishment of a new business enterprise,

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particularly in the rapidly changing market for plant protection and yield
enhancement products. These risks include our inability to transition from a
company with a research focus to a company capable of supporting commercial
activities, including manufacturing, quality control and assurance, regulatory
approval and compliance, marketing, sales, distribution and customer service.
Our inability to adequately address these risks could cause us to be
unprofitable or to cease operations.

Other companies may claim that we infringe their intellectual property or
proprietary rights, which could cause us to incur significant expenses or be
prevented from selling Messenger or any other products we may develop.

Our success depends on our ability to operate without infringing the
patents and proprietary rights of third parties. Product development is
inherently uncertain in a rapidly evolving technological environment in which
there may be numerous patent applications pending, many of which are
confidential when filed, with regard to similar technologies. Future patents
issued to third parties may contain claims that conflict with our patents.
Although we believe that Messenger does not infringe the proprietary rights of
any third parties, third parties could assert infringement claims against us in
the future. Any litigation or interference proceedings, regardless of their
merit or outcome, would probably be costly and require significant time and
attention of our key management and technical personnel. Litigation or
interference proceedings could also force us to:

     stop or delay selling, manufacturing or using products that
incorporate the challenged intellectual property;

     pay damages; or

     enter into licensing or royalty agreements that may be unavailable on acceptable terms.

If we do not adequately distinguish Messenger from products that genetically
modify plants and certain other products, public concerns over those products
could negatively impact market acceptance of Messenger.

Claims that genetically engineered products are unsafe for consumption or
pose a danger to the environment have led to public concerns and negative
public attitudes, particularly in Europe. We intend to distinguish Messenger
and harpin-related technologies from products that genetically modify plants.
While our technology does involve genetic modification in the process of
manufacturing Messenger, Messenger and harpin-related technologies are
topically applied and do not genetically modify the plants DNA. If the public
or potential customers perceive Messenger as a product that genetically
modifies the plant, Messenger may not gain market acceptance. Similarly,
countries that have imposed more restrictive regulations on products that
genetically modify plants, including Japan and certain members of the European
Union, may perceive Messenger as a product that genetically modifies plants. If
so, regulators in those countries may impose more restrictive regulations on
Messenger, which could delay, limit or impair our ability to market and sell
Messenger in those countries.

We may be exposed to product liability claims, which could adversely affect our
operations.

We may be held liable or incur costs to settle product liability claims if
any products we may develop, or any products that use or incorporate any of our
technologies, cause injury or are found unsuitable during product testing,
manufacturing, marketing, sale or use. These risks exist even with respect to
any products that have received, or may in the future receive, regulatory
approval, registration or clearance for commercial use. We cannot guarantee
that we will be able to avoid product liability exposure.

We currently maintain product liability insurance at levels we believe are
sufficient and consistent with industry standards for companies at our stage of
development. We cannot guarantee that our product liability insurance is
adequate, and, at any time, it is possible that such insurance coverage may not
be available on commercially reasonable terms or at all. A product liability
claim could result in liability to us greater than our assets and insurance
coverage. Moreover, even if we have adequate insurance coverage, product
liability claims or recalls could result in negative publicity or force us to
devote significant time and attention to matters other than those that arise in
the normal course of business.

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Inability to retain our key employees or other skilled managerial or technical
personnel could impair our ability to maintain and expand our business.

We are highly dependent on the efforts and abilities of our current key
managerial and technical personnel, particularly Bradley Powell, our Interim
President and Chief Financial Officer, and Dr. Zhongmin Wei, our Chief
Scientific Officer and Vice President of Research. Our success will depend in
part on retaining the services of Mr. Powell and Dr. Wei and our other existing
key management and technical personnel and on attracting and retaining new,
highly qualified personnel.

Mr. Powell, formerly our Vice President of Finance, was appointed Interim
President when Jerry Butler, formerly our President and Chief Executive
Officer, resigned in November 2001. We have retained an executive search firm
to identify a Chief Executive Officer, but there can be no assurance that we
will be successful in identifying or attracting an individual with the required
qualifications. In addition, during the interim period, the additional
responsibilities assumed by our existing management team could impair its
ability to effectively manage our business.

Inability to retain our existing key management or technical personnel or
to attract additional qualified personnel, including a Chief Executive Officer,
could, among other things, delay our sales, marketing and research and
development efforts. Moreover, in our field, competition for qualified
management and technical personnel is intense and many of the companies with
which we compete for experienced personnel have greater financial and other
resources than we do. As a result, we may be unable to recruit, train and
retain sufficient qualified personnel.

We may have to reduce operations if we are unable to meet our funding
requirements.

We will require substantial additional funding to continue our research
and development activities, maintain and operate our manufacturing facilities
and commercialize worldwide Messenger and any other products we may develop. If
we are unable to generate sufficient cash flow from operations, or obtain funds
through additional financing, we may have to delay, curtail or eliminate some
or all of our research and development, field testing, marketing or
manufacturing programs. We believe that our existing capital resources will be
sufficient to support our operations for at least the next 18 months. Our
future capital requirements will depend on the success of our operations.

If our capital requirements vary from our current plans, we may require
additional financing sooner than we anticipate. Financing may be unavailable to
us when needed or on acceptable terms.

Our operating results are likely to fluctuate, resulting in an unpredictable
level of sales and earnings and possibly in a decrease in our stock price.

Our operating results for a particular quarter or year are likely to
fluctuate, which could result in uncertainty surrounding our level of sales and
earnings and possibly result in a decrease in our stock price. For example,
there were no sales of Messenger in the fourth quarter of 2001. Numerous other
factors will contribute to the unpredictability of our operating results. In
particular, our sales are expected to be highly seasonal. Sales of plant
protection and yield enhancement products are dependent on planting and growing
seasons, climatic conditions, economic and other variables, which we expect to
result in substantial fluctuations in our quarterly sales and earnings. For
example, weather-related events such as droughts and floods, severe heat and
frost, hail, tornadoes and hurricanes could decrease demand for our product and
any future products we may develop, and have an adverse impact on our operating
results from quarter to quarter. In addition, most of our expenses, such as
employee compensation and lease payments for facilities and equipment, are
relatively fixed. Our expense levels are based, in part, on our expectations
regarding future sales. As a result, any shortfall in sales relative to our
expectations could cause significant changes in our operating results from
quarter to quarter. Other factors may also contribute to the unpredictability
of our operating results, including the amount of Messenger carried in
inventory by independent distributors and retailers, the size and timing of
significant customer transactions, the delay or deferral of customer use of our
product and the fiscal or quarterly budget cycles of our customers. For
example, customers may purchase large quantities of our product in a
particular quarter to store and use over long periods of time, or time their
purchases to coincide with the availability of capital, which may cause
significant fluctuations in our operating results for a particular quarter or
year.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We do not currently hold any derivative instruments, and we do not engage
in hedging activities. Also, we do not have any outstanding variable rate debt
and currently do not enter into any material transactions denominated in
foreign currency. Therefore, our direct exposure to interest rate and foreign
exchange rate fluctuation is currently not material to our results of
operations. We believe that the market risk arising from the financial
instruments we hold is not material.




PART II  OTHER INFORMATION




Item 2. Changes in Securities and Use of Proceeds

On September 26, 2000, the SEC declared effective our Registration
Statement on Form S-1, as amended (Registration No. 333-41028), as filed with
the SEC in connection with our initial public offering. Proceeds to EDEN, after
accounting for $7.0 million in underwriting discounts and commissions and
approximately $1.6 million in other expenses of the offering, were
approximately $91.5 million.

To date, of the net offering proceeds, we have used approximately $18.2
million to expand and enhance our manufacturing and research and development
and administration facilities, and approximately $32.7 million for working
capital and general corporate purposes. The remaining portion of the net
offering proceeds has been invested in cash equivalent investments. Our use of
the proceeds from the offering does not represent a material change in the use
of proceeds described in the prospectus included as part of the Registration
Statement.




Item 6. Exhibits and Reports on Form 8-K

The following exhibits are being filed as part of this quarterly report on Form
10-Q.



|(a) |  | Exhibits.
|--- |  | ---------

|        |  |                                            
|------- |  | -------------------------------------------
|Exhibit |  |                                            
|Number  |  | Description                                
|        |  |                                            
|11.1    |  | Statement re computation of per share loss.



|(b) |  | Reports on Form 8-K.                                                                 
|--- |  | -------------------------------------------------------------------------------------
|   
|    |  | There were no reports on Form 8-K filed during the three months ended March
31, 2002.




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                     |  |                             |  |                                                                                                                        
|-------------------- |  | --------------------------- |  | -----------------------------------------------------------------------------------------------------------------------
|                    
|                     |  | EDEN BIOSCIENCE CORPORATION
|                    
|Date: April 26, 2002 |  |                             |  |                                                                                                                        
|                    
|                     |  | By:                         |  | /s/ Bradley S. Powell                                                                                                  
|                     |  |                             |  |                                                                                                                        
|                     |  |                             |  | Bradley S. Powell
Interim President, Chief Financial Officer and Secretary
(principal financial and accounting officer)

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