Section 1 – Registrant’s Business and Operations

On February 28, 2007, Eden Bioscience Corporation (the “Company”) completed the closing of the sale of the Company’s harpin protein technology and substantially all of the assets related to its agricultural and horticultural markets to Plant Health Care, Inc. (“PHC”), a subsidiary of Plant Health Care, plc, pursuant to the purchase agreement dated as of December 1, 2006.

Under the terms of the sale, PHC purchased substantially all of the Company’s assets and other rights relating to the creation of plant health technology incorporating harpin proteins and the manufacture of biopesticide, plant health and nutrient products utilizing harpin protein technology. The assets included the Company’s core harpin protein technology, including its license agreement with the Cornell Research Foundation, the Company’s manufacturing equipment and all of the Company’s inventory of products designated for the agricultural and horticultural markets. PHC assumed certain liabilities of the Company at closing, including all of the Company’s obligations under its office and manufacturing facility lease and under the Cornell license.

The Company retained its cash, accounts receivable and assets relating to its home and garden business, consisting primarily of its inventory of harpin products designated for the home and garden market. As part of the closing, the Company and PHC entered into a license and supply agreement dated as of February 28, 2007, pursuant to which the Company will continue to have the exclusive right to sell harpin products in the home and garden market.

The adjusted purchase price for the assets was $2.2 million, $1.5 million of which was paid at closing. The balance of $0.7 million is evidenced by a promissory note delivered by PHC to the Company. The promissory note, which is payable in full on December 28, 2007, has an interest rate of 5% per annum and, pursuant to a security agreement and patent and trademark security agreement dated as of February 28, 2007, is secured by a first priority security interest in the equipment and certain intellectual property and other assets acquired by PHC in the transaction. PHC’s payment obligations under the promissory note are guaranteed by PHC’s parent, Plant Health Care plc, pursuant to a guaranty dated February 28, 2007. The sale was approved by the shareholders of the Company at the Company’s special meeting of shareholders held on February 26, 2007.

The Company plans to use the net proceeds of the sale for general working capital purposes related to its home and garden business and to explore whether there may be opportunities to realize potential value from its remaining business assets, primarily its tax loss carryforwards.

Copies of the license and supply agreement, the promissory note, the security agreement and patent and trademark security agreement, and the guaranty are attached as exhibits hereto and, with the asset purchase agreement dated as of December 1, 2006, which is filed as an exhibit to the Company’s Form 8-K filed with the Securities and Exchange Commission (“SEC”) on December 7, 2006, are incorporated herein by reference.

Section 2 – Financial Information

See discussion under Item 1.01 above, which is incorporated into this Item 2.01 by reference.