Versarien Regulatory News (VRS)

25 February 2020

Versarien plc

("Versarien", the "Company" or the "Group")

Corporate update

Versarien plc (AIM: VRS), the advanced materials engineering group, is pleased to provide an update on its recent activities, in particular in relation to its planned Chinese expansion, its subsidiary Gnanomat S.L., and its collaborations.

In doing so, the Company continues to follow the strategy detailed in its Annual Report, of being an IP led advanced engineering materials group that seeks to utilise proprietary technology to create innovative new engineering solutions. The Company intends to deliver this strategy in three ways: by identifying and acquiring majority stakes in companies capable of commercialising graphene applications; signing application development agreements with potential customers; and undertaking the actual production of graphene for specific applications. 

The global development of graphene within applications remains at an early stage. In line with this the Company's application development agreements are subject to both internal budget and time constraints, mutually agreed amendments, as well as simple engineering challenges. There can be no certainty as to when an application development agreement will lead to a financial benefit for the Group as this is ultimately within the control of the end-customer. However, the Company is committed to updating shareholders as appropriate.

The Company's Interim Report, released on 12 December 2019 (the "Interim Report"), set out the status of the Company's collaborations which have been the subject of previous announcements. Going forward, the Company intends to use its interim and full year results announcements to provide updates on the status of various collaborations and will not make announcements between these unless a disclosure obligation arises.

Apart from the projects listed below the status of the remaining projects remains unchanged from the information provided in the Interim Report.

China

As outlined in the Interim Report discussions with the Beijing Institute of Graphene Technology Co. Ltd ("BIGT") and the China International Graphene Industry Union ("CIGIU"), together with other related and government entities in China are still ongoing.

The term sheet with BIGT announced on 15 April 2019 ("Term Sheet") envisaged that BIGT would provide funding to Versarien for its recently established wholly owned subsidiary ("WFOE") and other corporate purposes in the form of an equity investment, providing BIGT with a holding of up to 15% of the issued share capital of the Company. It is now envisaged that funding of up to 15% of the issued share capital of the Company will be provided by other parties in collaboration with BIGT and CIGIU to facilitate, so far as is possible within the existing local regulatory regime, the transfer of cash offshore from China.

Whilst the formal negotiations with BIGT and CIGIU have taken longer than initially envisaged, they continue to be based on the term sheet signed with BIGT and announced on 15 April 2019. There is no certainty that a formal agreement will be completed with any party, nor the specific terms that any such agreement may take, but Versarien has been advised by BIGT, CIGIU and their affiliates that it remains their intention to facilitate funding for Versarien and for a joint venture to be established.

Further notifications and updates regarding the joint venture and associated financing will be made in the event that a development occurs that is sufficiently significant to require a regulatory notification.

Gnanomat S.L. ("Gnanomat")

Gnanomat continues to develop its energy storage technology in conjunction with other Group companies. It has performed independent tests of prototype hybrid energy storage devices incorporating graphene. The results of these tests have showed a significant electrochemical performance improvement over current market standards and, Versarien believes, confirms the feasibility of the Company's technical approach to bring it to industrial applications. In this regard, Gnanomat is in discussions with two supercapacitor manufacturers to sign collaborations to introduce the Company's materials into the electrodes of the manufacturer's devices. The Company notes that there can be no guarantee that any such discussions will progress to more advanced stages or that any agreement will be formalised.

Additionally, initial efforts have also been put into different energy storage applications such as metal-air batteries with encouraging results at lab scale. These results have brought metal-air batteries to the attention of a number of manufacturers that are showing interest in collaborating with Gnanomat.

Gnanomat has been invited to become a member of the European Technology and Innovation Platform (ETIP), Batteries Europe.

As announced on 10 February 2020, the Company continues to provide funding to Gnanomat, its 62% owned subsidiary, as necessary, to ensure its continued development. Since acquisition, Gnanomat has sought to control its costs whilst still developing its technology, which has meant that Versarien was able to vary the initially envisaged intra-group loan as previously disclosed on 25 September 2018. For the avoidance of doubt, the Company has not loaned any of the €1,250,000 that was originally contemplated in September 2018.

Versarien now expects to provide a loan of €300,000 this month to Gnanomat and continue to fund the working capital of Gnanomat, as it does in the normal course of business for all its subsidiaries.

Collaboration Updates

The Company provides the following updates on collaborations previously announced and notes that these remain at a development phase and there can be no guarantee that these will result in revenue generating contracts.  

Agreement with global apparel manufacturer, MAS Innovation (Private) Limited ("MAS")

Following the signing of the Commercial Partnership Agreement on 27 November 2019 with MAS, discussions with international brands for use of the graphene enhanced textiles have commenced. These discussions are aimed at introducing the graphene ink enhanced materials into new garment ranges with enhanced thermal conductivity and wicking properties, as well as impact protection wearables.

Consumer goods collaboration for polymer structures in plastics

Following the announcement made on 29 May 2018, after laboratory testing and optimisation of the graphene parameters, the next stage of this collaboration is to field test a pilot run of up to 20,000 bottles.

Construction materials collaboration with AECOM

Following the launch of the AECOM CNCT Arch at Network Rail's facility in Bristol, in July 2019, the product has now completed its testing phase. The data from these tests has been positive and Versarien has recruited the AECOM project lead to spearhead commercial progress on the Company's behalf in the UK and other regions.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

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About Versarien

Versarien plc (AIM: VRS), is an advanced engineering materials group. Leveraging proprietary technology, the Group creates innovative engineering solutions for its clients in a diverse range of industries. Versarien has seven subsidiaries operating under two divisions:

Graphene and Plastics

2-DTech Ltd, which specialises in the supply, characterisation and early stage development of graphene products. 2-DTech is based at the Graphene Innovation Engineering Centre, a £60 million facility set up to work in collaboration with industry partners to create, test and optimise new concepts for the delivery of graphene to the market. www.2-dtech.com

AAC Cyroma Limited, which specialises in the supply of vacuum-formed and injection-moulded products to the automotive, construction, utilities and retail industry sectors. Using Versarien's existing graphene manufacturing capabilities, AAC has the ability to produce graphene-enhanced plastic products. www.aaccyroma.co.uk

Cambridge Graphene Limited, supplies novel inks based on graphene and related materials, using patented processes to develop graphene materials technology. www.cambridgegraphene.com

Gnanomat S.L. ("GNA"), based in the Parque Cientifico Madrid, Spain, is a company capable of utilising Versarien's graphene products in an environmentally friendly, scalable production process for energy storage devices that offer high power density, fast recharging and very long lifetimes for use in electrical vehicles and portable electronics products. www.gnanomat.com 

Versarien Graphene Inc - based in Texas, is the recently incorporated sales business for the UK's graphene products.

Hard Wear and Metallic Products

Versarien Technologies Limited has developed an additive process for creating advanced micro-porous metals targeting the thermal management industry and supplies extruded aluminium. www.versarien-technologies.co.uk 

Total Carbide Limited, a leading manufacturer in sintered tungsten carbide for applications in arduous environments such as the oil and gas industry. www.totalcarbide.com